financial statement

shezan company limited

balance sheet
for the year ended 2008

Aseet
Non current aseet
plant property and equipment
long term investement
long term deposits
current Aseet
stores and spares
stoke in trade
trade debt
advances,deposits,prepayments
income tax recoverable
cash and bank balance

total aseet
Equity and Liabilities
share capital and reserve
share capital
reserves
unappropriated profit
Total Equity
long term liabilities
current liabilities
Total liabilities

Income s

Shezan com
for the year
2007
Rs
2174894
1489845

Sales
Cost of sales

Gross profit

685049

Distribution Cost
Administrative cost
Other operating expences
Other operating income

289336
68213
70145
-13240
414454

Operating profit

270595

Finance cost
share of loss from associates
profit before taxation
taxation

12940
257655
116981

net profit for the year

140674

Ratio Ana
profitability ratios analysis

Gross profit m
2007
Err:509

Interpretation.

Gross profit/net Sales

685049/2174894=31.50

Groos profit margin is an indicator of the total margin which is ava

31.48% and reason in decrease in gross profit margin is increas

Operating pr
2007

operating profit/net sales

Interpretation

270595/2174894=12.44

operating profit margin indivates that operating profit margin of sh

Net profit m
Net income/net sales

Interpretation

140674/2174894=6.4

the net profit margin is profit after taxation ,shezan net profit in
decrease.

Return on Aseet
Net income/avg.total aseet

Interpretation

2007
140674/1120347=12.55

return on asset measure the return on total investement in org.the

Return on Equit
Net income/avg.total.equity

Interpretation

2007
140674/625412=22.49

return on equity measure the rate of return on investement in bus

reason is that decrease in the net income of the shezan company

Return on comm
net income-prefered dividend/avg.common equity

Interpretation

return on common equity measures the rate of return on the comm

Liquidity ratio analy

Curent ratio
current aseet/current liabilities

Interpretation

20007
836031/437654=1.91

current ratio indicates the extent too which short term creditors ar

Quick ratio
current aseet -inventory/curent liabilities

Interpretation

2007
836031-612251/43765

quick ratio is a measure of a firms ability to pay off short term obli

Financial

Debt to equity rati

2007
494935/625412=0.79

total liabilities/total equity

Interpretation

Financial leaverages refers to the use of the data capital in a comp

which is riskier

Debt to Aseet

2007
494935/1120347=0.44

total liabilities/total asset

Interpretation

The debt to assets ratio show how much of your asset base its fina

Long term debt to

2007
long term liability/total equity

Interpretation

57281/625412=0.09

Long term debt to equity measures the balance between debt and

ACTIvity r

inventory tur

2007
cost of good sold/avg.inventory 1489845/836031=3.56

Interpretation

inventory turnover provides an indicator of company ex

Fixed asset t
annual sale/fixed asset

Interpretation

2007
2174894/284316=7.64

fixed aset turnover is a measure of sale productivity an

total aseet
2007

annual sale/total aset

2174894/1120347=1.9

Interpretation Total aseet tuenover is a measure of the firm

d 2008

pment

ayments

2007
Rs

2008
Rs

256787

292922

25591

9915

1938
284316

2603
305440

1348

1091

610903

689438

59749

74892

13729

38897

42116

114255

108186
836031

84042
1002615

1120347

1308055

50000

60000

425000

500000

150696

176900

625412

736700

57281

51858

437654

519497

494935

571355

ncome statement

Shezan company limited

or the year ended 31,dec 2008

2008
Rs
2468572
1691443

777129
368240
78951
72555
-19880
499866

277263
8104
760
268399
107195
161204

Ratio Analysis

Gross profit margin

4894=31.50

2008
777129/2468572=31.48

l margin which is available to cover operating expences and yield a profit .the gros profit of shezan in 2007 w
ofit margin is increase in the cost of good sold

Operating profit margin

2008

4894=12.44

277263/2468572=11.23

ng profit margin of shezan 12.44 &shows a decreasing trend in 2008 it was 11.23 it means that operating ex

Net profit margin

4894=6.4

161204/2468572=6.5

shezan net profit in 2007 is 6.4 and in 2008 net profit margin increased by 6.5 reason is that interest charge

n on Aseet

0347=12.55

2008
161204/1308055=12.32

nvestement in org.the return on aset of a shezan company decreased over the period from 12.56%in 2007 to

n on Equity

412=22.49

2008
161204/736700=21.88

n investement in busines.return on equity of shezan has decreased over time period of 2007 is 22.49 to 2008
he shezan company

n on common equity
2007
140674-0/625412=22.49

2008
161204-0/736700=21.88

of return on the common stokeholders investment in busines.return on common equity decrase over time pe

o analysis

ent ratio

36031/437654=1.91

2008
1002615/519497=1.92

hort term creditors are covered by aseet corospending to the maturity of liabilities.shezan,s cureent ratii has

Quick ratio

36031-612251/437654=0.51

2008
1002615-690529/519497=0.60

ay off short term obligation .quick ratio of shezan increase from 2007 is 0.51 &in 2008 the ratio is 0.60 .reaso

Financial leaverage

o equity ratio

94935/625412=0.79

2008
571355/736700=0.78

data capital in a company to finance its assets.even though debt is cheaperit is considered riskier compare to

to Aseet ratio

94935/1120347=0.44

2008
571355/1308055=0.44

our asset base its finance with debt debt to asset ratio for shezan has 2007&2008 are same its means shezan

erm debt to equity

7281/625412=0.09

2008
51858/736700=0.07

ce between debt and equity in the firm long term .long term debt to equity ratio decline in 2007 0.09&2008

ACTIvity ratio

nventory turnover

489845/836031=3.56

2008
1691443/1002614=3.58

icator of company exces amount of inventory of finish goods.shezan has low inventiry turnover ratio of 3.56

ixed asset turnover

174894/284316=7.64

2008
2468572/305440=8.08

f sale productivity and utilization of fixed aset.ratio of fixed asset turnover increase over the year 2007 is 7.6

otal aseet turnover

2008

174894/1120347=1.94

2468572/1308055=1.88

easure of the firmx asset .the ratio for shezan has decreased from year2007 is 1.94 a

profit of shezan in 2007 was 31.50% which has decreased over the year and in 2008 it

means that operating expences of shezan has increased over the year

son is that interest charges and other expences

od from 12.56%in 2007 to 12.32% in 2008

d of 2007 is 22.49 to 2008 is 21.88

uity decrase over time period year 2007 it was 22.49 &in 2008 it is 21.88 reason is that decrease in the net i

shezan,s cureent ratii has decreasedfrom year 2007 1.91 but considered as a threat becouse ideal curent rat

008 the ratio is 0.60 .reason is that less inventories are stocked

sidered riskier compare to equity &a huge threat to company.shezan is financing 100%of its ase

are same its means shezan has finance its 44% of the aseet with debt

cline in 2007 0.09&2008 it is 0.07,ths mean major chunk of long term debt was repaid

tiry turnover ratio of 3.56 in 2007&in 2008 3.58

over the year 2007 is 7.64 &in 2008 it increase to 8.08due to sale of shezan

m year2007 is 1.94 and in 2008 ratio is 1.88 reason is decrease in sale of shezan

t decrease in the net income of company.

couse ideal curent ratio should be 2

through debt

le of shezan