OGDCL

Market Ratios
Market ratios evaluate the economic status of the company in the wider marketplace. Market
ratios give management an idea of what the firm’s investors think of the firm’s performance and
future prospects.

Items Involved:
Net earnings, no of common stocks, market value per share, earning per share, book value of the
share, retained earnings and earnings available for distribution to shareholders.

Price Earnings Ratio:

For 2014
𝑀𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 257
Formula 𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
= 28.81 = 𝑅𝑠 8.92

For 2013
𝑀𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 228
Formula 𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
=
21.22
= 𝑅𝑠 10.74

Earnings per share

For 2014
𝑁𝑒𝑡 𝑖𝑛𝑜𝑚𝑒−𝑝𝑟𝑒𝑓𝑓𝑒𝑟𝑒𝑑 𝑠𝑡𝑜𝑐𝑘 123914550000
Formula 𝑁𝑜.𝑜𝑓 𝑐𝑜𝑚𝑚𝑜𝑛 𝑠ℎ𝑎𝑟𝑒𝑠
= 4300928400
= 𝑅𝑠 28.81

For 2013
𝑁𝑒𝑡 𝑖𝑛𝑜𝑚𝑒−𝑝𝑟𝑒𝑓𝑓𝑒𝑟𝑒𝑑 𝑠𝑡𝑜𝑐𝑘 91272619000
Formula 𝑁𝑜.𝑜𝑓 𝑐𝑜𝑚𝑚𝑜𝑛 𝑠ℎ𝑎𝑟𝑒𝑠
= 4300928400
= 𝑅𝑠 22.22

2014 Rs 8.92
2013 Rs 10.74
Comment….
As we analyzed that price earnings ratio has been decreased in current year so this is not
favorable sign for the company. This deviation in the ratio indicates to the investors poor current
as well as future performance of the corporation.
Market To book value Ratio:
For 2014
𝑀𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 257
Formula 𝐵𝑜𝑜𝑘 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒𝑠
= 10
= 𝑅𝑠 25.7

For 2013
𝑀𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 228
Formula 𝐵𝑜𝑜𝑘 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒𝑠
= 10
= 𝑅𝑠 22.8

2014 Rs 25.7
2013 Rs 22.8
Comment…
After carefully analyzing we have been conclude that market to book value of the company has
been increased this year, it is because share’s value in the market increased in the current year,
that is positive sign of the performance of the company in investor’s point of view.

Dividend Payout Ratio:

For 2014
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 6.33
Formula 𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒𝑠
= 28.81 = 0.22 𝑜𝑟 22%

For 2013
𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 7.88
Formula 𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒𝑠
= 21.22 = 0.37 𝑜𝑟 37%

Dividend per share

For 2014

Formula
𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑡𝑜 𝑐𝑜𝑚𝑚𝑜𝑛 𝑠𝑡𝑜𝑐𝑘ℎ𝑜𝑙𝑑𝑒𝑟𝑠−𝑟𝑒𝑡𝑎𝑖𝑛𝑒𝑑 𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 272223260
= = 6.33
𝑁𝑜.𝑜𝑓 𝑠ℎ𝑎𝑟𝑒𝑠 𝑜𝑓 𝑐𝑜𝑚𝑚𝑜𝑛 𝑠𝑡𝑜𝑐𝑘 43009284

For 2014

Formula
𝐸𝑎𝑟𝑛𝑖𝑛𝑔 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑡𝑜 𝑐𝑜𝑚𝑚𝑜𝑛 𝑠𝑡𝑜𝑐𝑘ℎ𝑜𝑙𝑑𝑒𝑟𝑠−𝑟𝑒𝑡𝑎𝑖𝑛𝑒𝑑 𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 339218980
= = 7.88
𝑁𝑜.𝑜𝑓 𝑠ℎ𝑎𝑟𝑒𝑠 𝑜𝑓 𝑐𝑜𝑚𝑚𝑜𝑛 𝑠𝑡𝑜𝑐𝑘 43009284
2014 0.22 or 22%
2013 0.37 or 37%
Comment…
There are two prospects for judging the corporations performance in this type of ratio, one is that
you are seeing organization being as short run investor, and then fall in dividend payout ratio is
not fair for you and being as long run investor vice versa. As it is clear that ogdcl is the big
organization in the country and there is participation in equities of Govt. foreign investors and
local investors at small scale, so decreasing rate of dividend payout ratio is the good indicator for
the investors because they know that company will use retention of funds in useful and
productive activities.

Dividend Yield Ratio:

For 2014
𝐶𝑎𝑠ℎ 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 6.33
Formula 𝑀𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒𝑠
= 257
= 0.025 or 25 %

For 2013
𝐶𝑎𝑠ℎ 𝑑𝑖𝑣𝑖𝑑𝑒𝑛𝑑 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 7.88
Formula 𝑀𝑎𝑟𝑘𝑒𝑡 𝑣𝑎𝑙𝑢𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒𝑠
= 228
= 0.034 or 34%

2014 25%
2013 34%
Comment….
This conclusion of the ratio indicates fair condition of the corporation in long run investor’s
point of view because company is paying less than it is retaining. And investor will take the
results as company is going to introduce special project or expanding its business.
Note:
The difference between dividend yield and dividend payout ratio is that dividend yield ratio
measures the amount of cash dividend distributed to common stockholders relative to market
value per share, whereas dividend payout ratio measures the amount of cash dividend distributed
to common shareholders relative to earnings per share.

Percentage of retained earnings ratio:

For 2014
𝑅𝑒𝑡𝑎𝑖𝑛𝑒𝑑 𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 96692224
Formula 𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑡𝑜 𝑐𝑜𝑚𝑚𝑜𝑛 𝑠𝑡𝑜𝑐𝑘ℎ𝑜𝑙𝑑𝑒𝑟𝑠
= 123914550 = 78%
For 2013
𝑅𝑒𝑡𝑎𝑖𝑛𝑒𝑑 𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 57350721
Formula 𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑡𝑜 𝑐𝑜𝑚𝑚𝑜𝑛 𝑠𝑡𝑜𝑐𝑘ℎ𝑜𝑙𝑑𝑒𝑟𝑠
= 91272619 = 63%

2014 78%
2013 63%
Comments…

Analysis of percentage of retained earnings ratio have been increased in the current year, which
is indicating that in the previous year corporation was retaining 63% of total earnings now
retention is 78% which shows that shareholders equity is in the organization and they are going
to serve for long term, that is attracting for the investors.