FAUJI FERTILIZER COMPANY LIMITED

STATEMENT OF BALANCE SHEET

AT THE YEAR ENDED DECEMBER 31, 2020
(Rupees in (Rupees in
ASSETS Million)
LIABILITIES & EQUITY Million)
Non-Current Assets Non-Current Liabilities
Property, plant & equipment 22,841 Long term borrowings - secured 10,627
Intangible assets 1,572 Lease liabilities 59
Long term investments 34,675 Deferred government grant 25
Long term loans & advances - secured 1,945 Gas Infrastructure Development 32,772
Cess (GIDC) payable
Long term deposits & prepayments 14 Deferred liabilities 5,259
Total Non-current Assets 61,047 Total Non-Current Liabilities 48,742
Current Assets Current Liabilities
Stores, spares and loose tools 4,434 Current portion of long term 4,335
borrowings - secured
Stock in trade 320 Current portion of lease liabilities 23
Trade debts 2,287 Current portion of deferred 87
government grant
Loans and advances - secured 789 Trade and other payables 46,621
Deposits and prepayments 51 Mark - up and profit accrued 275
Other receivables 20,965 Short term borrowings - secured 25,258
Short term investments 81,902 Unclaimed dividend 468
Cash and bank balances 1,154 Taxation 4,604
Total Current Assets 111,902 Total Current Liabilties 81,671
TOTAL LIABILITIES 130,413
Equity
Outstanding Ordinary Shares 12,722
Capital reserve 160
Retainted earning 29,654
Total Equity 42,536
Total Assets 172,949 Total Equity & Liabilities 172,949

FAUJI FERTILIZER COMPANY LIMITED

 STATEMENT OF PROFIT & LOSS
AT THE YEAR ENDED DECEMBER 31, 2020

RUPEES IN MILLION
Turnover – net 97,655
Cost of sales (66,072)
Gross profit 31,583
Distribution cost (7,848)
Operating profit (EBIT) 23,735
Finance cost (1,874)
Other gains / (losses) 3,940
Other expenses (2,639)
23,162
Other income 6,429
Profit before taxation 29,591
Provision for taxation (8,772)
Profit for the year 20,819

Earnings per share (EPS Rupees) 16.36

Market price per share 108.50

Calculate the Altman Z score:

Z score = 1.2X1+1.4X2+3.3X3+0.6X4+1.0X5

Code and Formula of Ratio Ratio Weight Weight Ratio

X1= Working Capital* / Total 30,231/172,949 = 0.175 1.2*0.175= 0.21
1.2
Assets
X2= Retained Earnings / Total 29,654/172,949 = 0.1715 1.4*0.1715= 0.2401
1.4
Assets
23,735/172,949 = 0.137 3.3*0.137= 0.4521
X3= EBIT/ Total Assets 3.3

X4= MV of Equity** / Total 1,380,337/130,413=10.584 0.6*10.584= 6.3504

0.6
Liabilities
97,655/172,949 = 0.565 1.0*0.565= 0.565
X5= Sales / Total Assets 1.0

Z score = 0.21+0.2401+0.4521+6.3504+0.565
 Z score = 7.8176
Additional Formulas:
Working Capital = Current Assets – Current
111,902-81,671 = 30,231
Liabilities
MV of Equity = No. of Shares * Current Market
12,722*108.50 = 1,380,337
Price of Share

Altman's Z-Score model is a numerical measurement that is used to predict the chances of a
business going bankrupt in the next two years. A Z score of greater than 2.99 means that the
entity being measured is safe from bankruptcy. A score of less than 1.81 means that a business is
at considerable risk of going into bankruptcy, while scores in between should be considered a
red flag for possible problems. Fauji Fertilizer Company Limited's Z-score is over 2.99,
indicating that the company is in a safe zone and unlikely to declare bankruptcy.

FAUJI FERTILIZER COMPANY LIMITED

STATEMENT OF BALANCE SHEET
AT THE YEAR ENDED DECEMBER 31, 2021

(Rupees in (Rupees in
ASSETS Million)
LIABILITIES & EQUITY Million)
Non-Current Assets Non-Current Liabilities
Property, plant & equipment 23,987 Long term borrowings - secured 16,740

Intangible assets 1,576 Lease liabilities 24

Long term investments 46,115 Deferred government grant -

Long term loans & advances - secured 3,044 Gas Infrastructure Development 20,802
Cess (GIDC) payable

Long term deposits & prepayments 15 Deferred liabilities 3,758

Total Non-current Assets 74,737 Total Non-Current Liabilities 41,324

Current Assets Current Liabilities

Stores, spares and loose tools 4,558 Current portion of long term 4,504
borrowings - secured

Stock in trade 1,048 Current portion of lease liabilities 38

Trade debts 833 Current portion of deferred 41

government grant
Loans and advances - secured 759 Trade and other payables 62,481

Deposits and prepayments 67 Mark - up and profit accrued 723

Other receivables 22,619 Short term borrowings - secured 38,954

Short term investments 95,196 Unclaimed dividend 472

Cash and bank balances 1,190 Taxation 4,956
Total Current Assets 126,270 Total Current Liabilties 112,169
TOTAL LIABILITIES 153,493
Equity
Outstanding Ordinary Shares 12,722
Capital reserve 160
Retained earning 34,632
Total Equity 47,514
Total Assets 201,007 Total Equity & Liabilities 201,007

FAUJI FERTILIZER COMPANY LIMITED

STATEMENT OF PROFIT & LOSS
AT THE YEAR ENDED DECEMBER 31, 2021

RUPEES IN
MILLION
Turnover - net 108,651
Cost of sales (69,772)
Gross profit 38,879
Distribution cost (8,409)
Operating profit (EBIT) 30,470
Finance cost (2,292)
Other gains / (losses) (2,811)
Other expenses (2,947)
22,420
Other income 7,919
Profit before taxation 30,339
Provision for taxation (8,443)
Profit for the year 21,896
Earnings per share (EPS) 17.21
Market price per share 100.26
Calculate the Altman Z score:

Z score = 1.2X1+1.4X2+3.3X3+0.6X4+1.0X5

Code and Formula of Ratio Ratio Weight Weight Ratio

X1= Working Capital* / Total
Assets
X2= Retained Earnings / Total
Assets
X3= EBIT/ Total Assets
14,101/201,007= 0.07015 1.2*0.07015= 0.08418
1.2
34,632/201,007= 0.1723 1.4*0.1723= 0.24122
1.4
30,470/201,007= 0.1516 3.3*0.1516= 0.50028
3.3

X4= MV of Equity** / Total 1,275,507.72/153,493= 0.6*8.3099 = 4.98594

8.3099 0.6
Liabilities
108,651/201,007= 0.5405 1.0*0.5405= 0.5405
X5= Sales / Total Assets 1.0

Z score = 0.08418+0.24122+0.50028+4.98594+0.5405
Z score = 6.35212
Additional Formulas:
Working Capital = Current Assets – Current
126,270 -112,169 = 14,101
Liabilities
MV of Equity = No. of Shares * Current
12,722*100.26 = 1,275,507.72
Market Price of Share

Altman's Z-Score model is a numerical measurement that is used to predict the chances of a
business going bankrupt in the next two years. A Z score of greater than 2.99 means that the
entity being measured is safe from bankruptcy. A score of less than 1.81 means that a business is
at considerable risk of going into bankruptcy, while scores in between should be considered a
red flag for possible problems. Fauji Fertilizer Company Limited's Z-score is over 2.99,
indicating that the company is in a safe zone and unlikely to declare bankruptcy.As the Z-score
of Fauji Fertilizer Company Limited is above than 2.99, it shows that company is in safe zone
and is unlikely to file for bankruptcy.
On December 31, 2019, Fauji Fertilizer Company Limited's z-score value is ___, but on
December 31, 2020, it _creases to 7.8176. As a result, the company's credit worthiness was on
the rise/decline. Therefore, Fauji Fertilizer Company Limited's z-score value for 2021 is 6.35212,
which indicates that the company's credit worthiness is on the decline.