Atlas Battery Limited: 1. Vision Statement

ATLAS BATTERY LIMITED
1. VISION STATEMENT
A manufacturer and supplier of high quality lead acid automotive and
motorcycle batteries in domestic and international market.
2. MISSION STATEMENT
To achieve market leadership through technological edge, distinguished by
quality service and customers’ satisfaction, emphasis on employees’ long
term welfare and ensure adequate return to shareholders. Be a good
corporate citizen of the society and country through harmonized endeavor.
LAHORE BUSINESS SCHOOL

3. Company Profile
Atlas Battery Limited pioneered the manufacture of dry charged Hard Rubber
batteries in Pakistan. Now the company manufactures a complete range of
Polypropylene and hard rubber batteries which caters to the needs of
passenger cars of varied capacities, trucks, tractors, heavy vehicles,
construction and road building equipment, as well as host of stationary and
industrial applications. Motorcycle batteries have also been added to this
range. The company has always been at the vanguard of development in the
automotive industry in Pakistan making great strides in the fields of research
and development. The brand has, over the years, earned a solid reputation as
a product of latest Japanese technology with consistently high levels of
performance and reliability.
The sustained and continued high level of quality is ensured by ABL’s Quality
Department with its exacting standards and state-of-the-art lab facilities
manned by highly trained professionals monitoring the quality of batteries
being produced .The entire process is overseen by a Technical Advisor from
Japan Storage Battery Company Limited stationed at Karachi. He is attached
to the factory and monitors and guides the technical Division in ensuring and
meeting the international standards of quality.
The focal point of the company’s philosophy is customer satisfaction through
continued product excellence. Atlas Battery Limited aims at maintaining its
lead in technology with the help of its in-house research and development
program, interfacing with Japan Storage Battery Company Limited.
ABL’s technological superiority is matched by its vast national network of over
600 dealers and retail outlets ensuring availability and prompt delivery of its
products. All our regional and zonal offices are equipped with service center
and are staffed with trained to provide technical personnel to provide an
efficient service backup. The technical personnel also regularly tour their
sales and territories monitoring service needs, problem and trouble-shooting.
Our associates are ably supported by a steady supply of instruments and
equipment imported and supplied by us, to enable them to carry out testing
and repairing services with prompt attention and efficient resolution of
operational complaints.

4. Sector Overview
The initial focus of auto parts manufacturing units established in1950s, 1960s
and 1970s was limited to tractors, buses & truck parts as well as to cater the
need of after sales market of different automobiles. However, the major
advancement in the industry took place during the 80's when for the first time
Suzuki commenced production in Pakistan. After that other assemblers of
cars and motorcycles were also established. The establishment of assembling
plants gives the encouragement to local industry to enter in auto parts
manufacturing.
The fundamentals of the battery industry are vibrant. This industry has faced
challenges year after year and overcome them. Being an ancillary business to
the automotive industry, the battery sector depends on the growth of
automotive industry. Automotive industry is the backbone of the economy for
every country. The growth of this industry indicates that the country’s
economy is moving in the right direction. Presently, the automotive market is
in recession the world over. The market in Pakistan is also presenting
challenges for automaker. However, conditions are expected to improve in the
near future.
During the year auto industry suffered significantly in the manufacturing

sector. The slowdown in growth of the automotive industry during last two
years will definitely have a negative impact in the following year on demand of
automotive batteries. The present policy of government in relation to
automotive industry needs a favorable review so that this industry, which is in
its infancy, can be provided with a strong base for growth in future periods.

5. RATIO ANALYSIS
Financial ratios are the analyst’s microscope; they allow them to get a better
view of the firm’s financial health than just looking at the raw financial
statements.
Ratios are used by both internal and external analysts:
Internal uses
 Planning
 Evaluation of management
External uses
 Credit granting
 Performance monitoring
 Investment decisions
 Making of policies
6. Time-series analysis
Evaluate a firm’s financial performance over time. Following is the time series
analysis for Atlas Battery and for Exide Battery.

7. Short Term Analysis:
2005 2006 2007 2008 2009
Current Ratio 1.99 1.53 1.24 1.21 1.30
Quick Ratio 0.63 0.37 0.25 0.22 0.23
Cash Ratio 0.41 0.15 0.11 0.09 0.06
Analysis:
In start we see a decreasing trend in current ratio but in 2009 there is a little
rising in ratio. This due to decrease in current assets like cash and trade debts
but cash has decrease significantly during the years except in 2009. Overall it
is a good snapshot, which means company can easily payoff its liabilities.
ATLAS BATTERY LTD

Current Ratio
2.5
2
Current Ratio
1.5
0.5
0
2005 2006 2007 2008 2009

Quick Ratio:
There is no marketable security in the concerning years except 2005. Cash

has also decreased over the years. Therefore quick ratio is decreasing in
years.
ATLAS BATTERY LTD

Quick Ratio
0.7
0.6
0.5
Quick Ratio
0.4
0.3
0.2
0.1
0
2005 2006 2007 2008 2009
CASH RATIO:
It is clear that cash has been decreased in all concerning years. This is mainly
due to increased receivables which mean more cash is due. Company’s
capacity is maximum in 2005 to pay off its current liabilities.

ATLAS BATTERY LTD

Cash Ratio
0.45
0.4
0.35
0.3 Cash Ratio
0.25
0.2
0.15
0.1
0.05
0
2005 2006 2007 2008 2009
Exide Battery:
Analysis:
2005 2006 2007 2008 2009

Current Ratio 1.36949 1.54559 1.57025 1.40181 1.33063
2 5 4 2
Quick Ratio 0.37428 0.43025 0.30920 0.26235 0.39274
3 9 1 5 2
Cash Ratio 0.13996 0.16428 0.12694 0.10723 0.23196
3 7 4 5
Current Ratio:
Current ratio is highest in 2007 which shows that in 2007 the company was in
best position to pay its liability.

EXIDE PAKISTAN LTD

Current Ratio
1.6
1.55
1.5
Current Ratio
1.45
1.4
1.35
1.3
1.25
1.2
2005 2006 2007 2008 2009
Quick Ratio:
Quick ratio is fluctuating through the years because of increasing then

suddenly decreasing of trade debts.
EXIDE PAKISTAN LTD

Quick Ratio
0.5
0.45
0.4
0.35 Quick Ratio
0.3
0.25
0.2
0.15
0.1
0.05
0
2005 2006 2007 2008 2009

CASH RATIO:
In first four years cash ratio is not sufficient to meet its obligations but in 2009
we see a huge increase in it. This is due to high net sales in 2009.
EXIDE PAKISTAN LTD

Cash Ratio
0.25
0.2
Cash Ratio
0.15
0.1
0.05
0
2005 2006 2007 2008 2009
8. Profitability Analysis
2005 2006 2007 2008 2009
Net Profit Ratio 4.30% 3.42% 5.52% 4.06% 5.63%

Gross Profit Ratio 16.59% 15.64% 18.39% 14.72% 16.79%
Operating Margin Ratio 6.65% 6.96% 9.10% 7.82% 10.02%

Gross Profit Margin:

Gross margin ratio is high in 2005, 09 but highest in 2007. In 2007 company
meets the high growing diverse battery demand and several others. In 2009
cost of sales and raw material prices are very high that’s why gross margin is
less than 2007. In 2008 cost of sales as against last year’s increased by
73.3%.
ATLAS BATTERY LTD

Gross Profit Ratio
20.00%
18.00%
16.00%
14.00% Gross Profit Ratio
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2005 2006 2007 2008 2009
Operating Margin Ratio:

In 2007 high battery demands has increased operating profit in comparison
with last years. In 2009 sales percentage has increased in comparison with
2007 and 2008 and other income has also increased. All these effects has
boosted operating margin.

ATLAS BATTERY LTD

Operating Margin Ratio
12.00%
10.00%
8.00% Operating Margin Ratio
6.00%
4.00%
2.00%
0.00%
2005 2006 2007 2008 2009
Net Profit Margin:

Increased gross margin and operating profit has increased the net profit ratio
in 2009 in comparison with other years. This is due to increased demand of
UPS by households due to electricity crisis in Pakistan.
ATLAS BATTERY LTD

Net Profit Ratio
6.00%
5.00%
4.00% Net Profit Ratio
3.00%
2.00%
1.00%
0.00%
2005 2006 2007 2008 2009

Exide Battery:
9. Profitability Analysis
2005 2006 2007 2008 2009

Net Profit Ratio 4.19% 3.75% 4.74% 3.10% 2.10%
Gross Profit Ratio 17.51% 17.14% 16.26% 11.95% 11.02%
Operating Margin Ratio 8.19% 8.30% 8.95% 6.36% 4.70%
Gross Profit Margin:

In 2006-7 distribution expenses grew only by 6.6% but in 2008 distribution
expense increased by 19% and administration and general expense
increased by 15% that’s why it is less in 2008. In 2009 not only both expenses
are high but cost of sales is also high that is why gross margin is low in 2009
in comparison with other years.
EXIDE PAKISTAN LTD

Gross Profit Ratio
20.00%
18.00%
16.00%
14.00% Gross Profit Ratio
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2005 2006 2007 2008 2009

Operating Margin Ratio:

Other than distribution and general expenses, financial charges are also high
in 2009 in comparison with last years. Sales’ high percentage in 2007 has
overcome the percentage of operating expenses which in comparison with
2008, 09 is less that’s why operating ratio is high in 2007.
EXIDE PAKISTAN LTD

Operating Margin Ratio
10.00%
9.00%
8.00%
7.00% Operating Margin Ratio
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2005 2006 2007 2008 2009
Net Profit Margin:

All the factors above have a combined effect on net profit margin, which is
high in 2007. Sales volume of automotive and motorcycle batteries grew over
the year 2007 while volumes in industrial and DES Batteries segment reduced
on account of decline in demand from customers.

EXIDE PAKISTAN LTD

Net Profit Ratio
5.00%
4.50%
4.00%
3.50% Net Profit Ratio
3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
2005 2006 2007 2008 2009
10. Long Term Analysis
2005 2006 2007 2008 2009

Fixed Assets Turnover Ratio 6.281947 5.043689 5.098628 5.076294 4.969049
9 6 5
Total Assets Turnover Ratio 1.877966 2.147914 2.099523 2.178454 2.428021
2 1 9 7
Fixed Assets Turnover Ratio:
The ratio is showing decreasing trend which means company is underutilizing

its fixed assets in sales contribution. For this ratio to high, company should
increase its utilization.

ATLAS BATTERY LTD

Fixed Assets Turnover Ratio
7
6
5 Fixed Assets Turnover
Ratio
4
3
2
1
0
2005 2006 2007 2008 2009
Total Assets Turnover Ratio:
This ratio is less than fixed assets turnover ratio in all years which shows the
contribution of remaining assets in sales is less than fix assets.

ATLAS BATTERY LTD

Total Assets Turnover Ratio
3
2.5
2 Total Assets Turnover

Ratio
1.5
0.5
0
2005 2006 2007 2008 2009
Exide Battery:
2005 2006 2007 2008 2009

Fixed Assets Turnover Ratio 4.31467 3.02236 3.84479 5.62959 8.38215
9 4 5 4
Total Assets Turnover Ratio 1.48990 1.32665 1.48213 1.63589 2.76461
9 3 6 8
Fixed Assets Turnover Ratio:
The ratio is showing first decreasing trend and then increasing which shows
that company is now using its fixed assets to boost its sales.

EXIDE PAKISTAN LTD

Fixed Assets Turnover Ratio
9
8
7
6 Fixed Assets Turnover
Ratio
5
4
3
2
1
0
2005 2006 2007 2008 2009
Total Assets Turnover Ratio:
This shows that remaining assets other than fixed is not contributing to sales.
But in 2009 the ratio is increased which shows management is now utilizing
the assets.
EXIDE PAKISTAN LTD

Total Assets Turnover Ratio
3
2.5
2 Total Assets Turnover

Ratio
1.5
0.5
0
2005 2006 2007 2008 2009

11. DEBT ANALYSIS
2005 2006 2007 2008 2009

Debt to Capital Ratio 0.364157 0.331308 0.337540 0.435139 0.163133
4 8 6 2
Debt to Equity Ratio 0.572716 0.495456 0.509526 0.770348 0.194933
3 8 8 9 3
Debt to Capital Ratio:
From 2005-07 company has done more equity financing with same proportion
but in 2008 company slightly move towards debt financing by 43% and in
2009 it again shifts to more equity. In 2009 company has faced high material
prices, adverse foreign exchange movements and rapid decline in the lending
capacity of the financial institutions. To cover this risk 16% financing is
through debt and 84% is through their internal resources.
ATLAS BATTERY LTD

Debt to Capital Ratio
0.5
0.45
0.4
0.35 Debt to Capital Ratio
0.3
0.25
0.2
0.15
0.1
0.05
0
2005 2006 2007 2008 2009

Debt to Equity Ratio:
In comparison with other years in 2009 debt to equity ratio is good and
company has more resources to pay its claimholders and chances of
liquidation are low. In 2008 there is no long term debt but high short term
borrowing which is not a good position for the company.
ATLAS BATTERY LTD

Debt to Equity Ratio
0.9
0.8
0.7
0.6 Debt to Equity Ratio
0.5
0.4
0.3
0.2
0.1
0
1 2 3 4 5
Exide Battery:
2005 2006 2007 2008 2009

Debt to Capital Ratio 0.45668 0.41934 0.40967 0.48337 0.42868
1 5 1 4 9
Debt to Equity Ratio 0.84054 0.72219 0.69397 0.93563 0.75036
4 1 6
Debt to Capital Ratio:

Only in 2008 debt financing proportion is high than the other years because
long-term loans are highest in 2008. Overall they have maintained their
capital structure.
EXIDE PAKISTAN LTD

0.5
0.48
0.46
0.44
0.42
0.4
0.38
0.36
2005 2006 2007 2008 2009
Debt to Equity Ratio:
In 2008 and 2005 debt to equity ratio is more alarming which means that
company has fewer resources to pay its claims, But in 2009 position is a bit
better but still alarming and chances of liquidation are high. Therefore
company should maintain its capital structure and should pay off its debts.

EXIDE PAKISTAN LTD

Debt to Equity Ratio
1
0.9
0.8
0.7 Debt to Equity Ratio
0.6
0.5
0.4
0.3
0.2
0.1
0
2005 2006 2007 2008 2009
12. Comparison of ATLAS BATTERY LIMITED and

Exide Battery
Short Term Analysis:
In short term analysis Exide has performed better than the Atlas ltd. By
analyzing all three ratios it is clear that Exide battery Pakistan has more
capability to pay off its current liability.
Profitability Analysis:
By analyzing profitability ratios it can be seen that Atlas battery are earning
more profits than the Exide Pakistan. Although sales of Exide are high but
there cost of sales is also high which affects its profits where as Atlas Battery
has control over its cost.
Long Term Analysis:
Both companies are not fully utilizing their assets to contribute into sales. But
in 2009 Exide step ahead in both ratios which results in increase sales.

DEBT ANALYSIS:
By comparing both companies we see that the proportion of equity in total

capital is high in Atlas than Exide. As far as debt to equity is concerned Exide
has more debt against $1 equity, which means in comparison atlas is
somehow in a better position and less chances of liquidation.
13. Sector Comparison:
Sector Average Atlas Exide

2009 2009 2009
Current Ratio 1.31577 1.30091 1.33063
4 7 2
Quick Ratio 0.31166 0.23058 0.39274
4 5 2
Cash Ratio 0.14435 0.05674 0.23196
Fixed Assets Turnover 6.67560 4.96904 8.38215
Ratio 1 9 4
Total Assets Turnover 2.59632 2.42802 2.76461
Ratio 2 8
Net Profit Ratio 3.86391 5.63% 2.10%
9
Gross Profit Ratio 13.9065 16.79% 11.02%
4
Operating Margin Ratio 7.36073 10.02% 4.70%
8
Debt to Capital Ratio 0.29591 0.16313 0.42868
1 3 9
Debt to Equity Ratio 0.47264 0.19493 0.75036
6 3

Analysis:
In comparison with sector Exide’s short and long term position is better and
for Atlas profitability and debt ratios are better, but overall the industry is not
performing well due to economic downturn. The poor state of the industry is
reflected in Business Monitor International (BMI)’s Business Environment
Rating for the automotive industry in Asia Pacific, where Pakistan is in last
place on a score of 42.4 out of a possible 100. The market is held back by low
production growth potential and an average rating for sales growth. However,
as a signatory to the Trade Related Intellectual Property Rights Agreement
(TRIPS) under the auspices of the World Trade Organization (WTO), the
country’s regulatory environment scores well. A number of free trade
agreements also contribute to this criterion, although forming FTAs with non-
Asian countries would improve this rating further. Despite low marks for
bureaucracy and corruption, the market does score well for its long-term
economic risk and policy continuity.
According to Daily Times, as many as 60,000 workers and staffers in

Pakistan's auto sector have lost their jobs from July, 2008 to January, 2009
due to falling demand for cars. More jobs cuts are feared with continuing
weakness in demand. But as the current financial crisis ebbs, there will be
significant pent-up demand for automobiles in Pakistan that will drive the
growth in auto industry.
14. Vertical Analysis of Balance Sheet
ATLAS BATTERY LIMITED:

As we know that Atlas Battery Limited is a leading manufacturing company

and marketing in Pakistan. Let see how they progressed in perspective of all
their Assets and liabilities over the five years.
The number of shares issued last two year 2009 and 2008 was same before
which they were different. The company after 2005 raised some share capital
to raise fund as their value was Going Up.
The amount of taxation also was being reduced which seems that the
company started paying off their tax instead to defer it to the next upcoming
years.
The trade and other payables increased by a huge amount in percentage from
year 2005 which tells the company increased the liabilities in greater
proportion of percentage over the last five years.
The short term borrowing was also been seen but they did not increased that
much as the trade and other payables and remained consistent over the
years.
Since the company position starts getting better from year 2006 the Fixed
assets section increased in huge amount which tells us that the company
really invested in the buying of the fixed assets for much better capacity and
storage so they can improve and increase their production.
The current assets section as it is clear that the stores, spares and loose tools
and stock in trade were almost just enough as much they needed. It seems
that the company is utilizing their inventory as much they needed.
The current assets section was in the greater proportion as compared to rest
of assets that how well the company not in the long term but also in short term
is keeping it better in the market and improved their position over the last few
years.
15. Horizontal Analysis of Balance Sheet

The company increased their share capital in the year 2005 and it is still the
same until now. Because of this the company’s issued, subscribed and fully
paid section also increased.
The company’s noncurrent liabilities increased in huge amount from year

2007 and in year 2008. The Long provision taxation also increased by a huge
amount in percentage over the last two to three years as compared to last five
years.
The trade and other payable section also increased by a huge amount
especially from year 2007 so the company increased most of their liabilities in
this section. The company also increased the short term borrowing amount by
a much greater percentage from year 2005 until now which tells the company
really increased most of their liabilities in this particular section.
So overall the taxation, total liabilities and equity section increased in much
greater percentage from year 2006 and until now which tells how much the
company increased their liabilities.
The fixed assets section increased by a very greater proportion in percentage

as the company’s position started getting better from year 2007 until now. The
percentage increase in the fixed assets was very huge which tells how much
the company has invested to buy more fixed assets to increase their
production and sales.
So over the last five years we see how much the Atlas Battery Limited has
improved in perspective of all kinds of noncurrent and especially current
assets and how better they are managing it.
16. Vertical Analysis of Income Statement

As we seen the company’s strengthens from year 2006 it improved in all kinds
of section. If we talk about their sales are increasing a lot year after years. So
because of this the cost of goods sold also increased in much greater amount
The company also improved year after year in the gross profit section as well
which better tells the company how much they improved over the past few
years and the big reason for that in not only better sales but also a decline in
cost of sales percentage.
The company maintained its distribution cost from 2005 to 2008 which were
around 4 to 6 percent.
As the company improved in increasing sales and decreasing their cost of

sales and maintain their distribution cost they also made a healthier operating
profit over the last few years.
So because all these reason the company improved in maintain their before
tax and after tax profit to a much better position.
17. Horizontal Analysis of Income Statement

As we know the Atlas Battery Limited position started getting stronger and
stronger from year 2007 they improved in almost all kinds of sections in which
they can earn profit increase their sales and make more money by every ways
by buying assets.
Since the company bought lot of fixed assets that definitely have improved
their production capacity and this was definitely due to much bigger demand
and supply. So the company really improved in much greater proportion in
increasing their sales from year 2007 and continued their progress until now.

As the increase in the sales we know the cost of sales also increased so the
amount of cost of sales was also quiet high but the company did make some
efforts in year 2007 to reduce its cost of sales in order to make much more
profit.
Since the increase in sales much in greater proportion as compare to cost of

sales the company’s gross profit also rose year after year.
With all the increase in the sales and cost of sales the distribution cost also
rose with greater proportion as compare to last eight years.
Due to all the steps taken by the company to reduce their expenses with the
increase in the sales that company also made a huge amount of operating
profit which better tells the company’s position that how better they are getting
year after year. This progress tells us also one more thing that the company
will really earn a lot of profit with increased sales the future as well.
Other expense also rose with the increase in the sales and as compared to
the country’s condition this up and down will continue in upcoming years so
the company should be aware of it and should have primitive measures for it.
The before tax profit was also high year after year from year 2007 and still
rising over the last three years.
The taxation amount also rose especially in the year 2009 due to the
increased taxes but the company’s good progress is not affected by it.
The Atlas Battery Limited net profit after taxation also rose to much greater
proportion over all the last three years but raised much in year 2009 as
compare to the last few years due to the increased demand and supply.
18. Vertical Analysis of Balance Sheet
EXIDE BATTERY LIMITED:

Vertical Analysis of the balance sheets shows that Current liabilities of the
company increase from last years. On the other side of balance sheet Current
assets of the Co slightly increase from 2006. The amount of taxation has been
constant from 0 to 1 percent that the company started paying off their tax. The
trade and other payables also remain constant percentage last two year which
tells the company increased the liabilities in greater proportion of percentage.
the company Fixed assets section does not increased in much amount which
tells us that the company is not much investing in the buying of the fixed
assets for much better capacity and storage so they can improve and
increase their production. As far as current assets section as it is clear that
stock in trade has been increased in great proportion of percentage from 2005
to 2009. It seems that the company is utilizing their inventory as much they
needed. The current assets section was in the greater proportion as
compared to rest of assets that how well the company not in the long term but
also in short term is keeping it better in the market and improved their position
over the last few years.
19. Horizontal Analysis of Balance Sheet:
Liabilities and owner equity of the balance sheet shows that issued and paid
up capital of the company has been constant from year to year 2005 to 2009.
Accumulated profits of the company have been in increasing trend.
Noncurrent liabilities of the company increases from 2005 to 2008 but there is
a decline in 2009. Current liabilities of the company also have increasing
trend.
This horizontal analysis of balance sheet shows that Fixed Assets of the
Company increase from last two years. It means Company has much
productive assets. It shows a good trend of fixed assets. Company also

invests in long term investment and this asset also has increasing trend from
2005 to 2008 but in percentage went down with huge margin. Company also
has long term deposits and these also have increasing trend.
Current Assets of the Company also have increased in last two year. Trade
debts of the Company also have increasing trend and its debts are not in a
good position.
20. Vertical Analysis of Income Statement

In vertical analysis of income statement shows that has high cost of goods
sold from last two years. Gross Profit of the Company has decreasing trend
from last two year. This is decrease due to high cost of goods sold. Operating
expense of the company has minimum portion in the income statement. Profit
from operations also has decreasing trend in 2009 from 6.30% to 4.70%.
Provision for income taxes also has decreasing trend.
21. Horizontal Analysis of Income Statement:
Horizontal analysis of income statement shows that net sales of the Company
has increasing trend. But on the other hand Cost of goods sold jump quickly in
2009 from sales. This is not a good trend. Distribution costs has been
increased in 2009 from 2008 i.e. 127.53% to 256.44%. Other operating
expenses of the Company are increasing quickly in 2009 than 2008 i.e. from
191.20% to 496.18%. Company is also increasing trend in other operating
income but 2009 it has decrease in huge proportion of percentage. Co also
has high finance cost from last years.

22. Du-Pont Analysis:
Du-Pont basis is Return on equity. There are three main components who
measure the effectiveness of ROE.
 Financial leverage
 Asset Turnover
 Profit margin
Atlas’ return on equity is 33% in 2009, which is greater than 2008 which were
26%. It depicts a high return on equity with little or no debt which enables it to
grow without large capital expenditures, allowing the owners of the business
to withdrawal cash and reinvest it elsewhere.
Net profit margin has increased in 2009 to 5.6%, which also effect the return
on equity. Due to better working capital management and negotiation of lower
markup rates with banks, finance cost increased marginally by 4.8%. Thus the
company achieved profit before tax of Rs. 272.9 million for the year 2008-09
as against Rs. 164.1 million achieved during last year. After providing taxation
of Rs. 95.2 million profit after tax stood at Rs. 177.7 million with growth of
66.4% as compared to previous year. The company earned Rs. 25.41 per
share against Rs. 15.27 per share last year. Return on equity rose to 33.4%
as against 26.4% last year.
Exide Battery:
Exide Battery’s return on equity is 16% in 2009 which has only increased by
0.003929% from 2008.
Exide’s has high leverage ratios which mean that company is relying on more
debts than equity which is about 93% in 2008 which allows it to reduce the tax
burden. In 2009 ROE has increased because cost of sales is very high. It
shows the management’s weakness to control inventory. Finance cost has
been increased from 2008 to 2009, which ultimately impact the return on
equity.

23. References
 www.atlasbattery.com.pk/
 www.exide.com/
 http://www.pakalumni.com/profiles/blog/show?
id=1119293%3ABlogPost%3A64556
 http://www.smeda.org.pk
 www.investopedia.com

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ATLAS BATTERY LIMITED

LAHORE BUSINESS SCHOOL

LAHORE BUSINESS SCHOOL

During the year auto industry suffered significantly in the manufacturing

LAHORE BUSINESS SCHOOL

Ratios are used by both internal and external analysts:

LAHORE BUSINESS SCHOOL

7. Short Term Analysis: