FINANCIAL MANAGEMENT REPORT

GROUP MEMBERS:
HASSAN MEHMOOD
 Table of Contents
Leverage Ratios ...................................................................................................................................................................... 2
D/E Ratio ............................................................................................................................................................................. 2
Interest Coverage Ratio...................................................................................................................................................... 2
Vertical Analysis PSO .............................................................................................................................................................. 3
Vertical Analysis Shell ............................................................................................................................................................ 4
Horizontal Analysis PSO ......................................................................................................................................................... 5
Horizontal Analysis Shell ........................................................................................................................................................ 6
Leverage Ratios
D/E Ratio

DEBT TO EQUITY RATIO

SHELL PSO

5.34
6.00 3.16

2.83

2.82

2.81
2.74
4.00
2.00
0.00
2015 2016 2017
SHELL 3.16 2.74 2.82
PSO 5.34 2.83 2.81

Debt to equity ratio of PSO was very high in 2015 having 5.34 whereas Shell was at 3.16. by the passage of time, PSO
lowered their D/E Ratio and closed on almost same ratio as of Shell. High D/E means the company is relying more on
debt rather than equity.
3.165.34

6.00
2.83

2.82
2.81
2.74

4.00
2.00
0.00
2015 2016 2017

Interest Coverage Ratio

INTEREST COVERAGE RATIO

SHELL PSO
25.30

30.00
15.83

25.00
20.00
15.00
6.89

5.85
3.19

10.00
2.06

5.00
0.00
2015 2016 2017
SHELL 6.89 25.30 15.83
PSO 2.06 3.19 5.85

PSO’s Interest Ratio Coverage is increasing year by year with a smooth increase, however Shell’s ICR is fluctuating very
much which is creating a risky situation for the shareholders as there is a swift increase and then decrease in following 3
years.
Vertical Analysis PSO
PSO Vertical Analysis
2017
(Rupees '000) % Net Sales
Net Sales 878,146,786 100.000%
Cost of products sold (840,948,073) 95.764%
Gross profit 37,198,713 4.236%
Other income 10,744,932 1.224%
Operating costs
Distribution and marketing expenses (8,822,106) 1.005%
Administrative expenses (2,478,797) 0.282%
Other operating expenses (1,980,999) 0.226%
(13,281,902) 1.512%
Profit from operations 34,661,743 3.947%
Finance costs (5,923,256) 0.675%
28,738,487 3.273%
Share of profit of associates 608,380 0.069%
Profit before taxation 29,346,867 3.342%
Taxation (11,121,242) 1.266%
Profit after tax 18,225,625 2.075%

OTHER INFORMATION
Net Profits 18,225,625,000
Weighted average number of ordinary shares 2,716,860
Market value per share- year end 387.35
Dividend per share 25.00
Vertical Analysis Shell
Shell Vertical Analysis
2017
(Rupees '000) % Net Sales
NET SALES 205,791,893 100.000%
Other Revenue 965,737 0.469%
206,757,630
Sales Tax (37,909,193) 18.421%
Net Revenue 168,848,437 82.048%
Cost of sales (153,972,023) 74.819%
Gross Profit 14,876,414 7.229%
Distribution and marketing expenses (6,018,105) 2.924%
Administrative expenses (4,146,166) 2.015%
other operating expenses (1,411,469) 0.686%
Other operating Income 419,559 0.204%
Operating Profit 3,720,233 1.808%
Finance Cost (235,049) 0.114%
Profit before taxation 3,485,184 1.694%
Share of associate 837,776 0.407%
Taxation (1,140,258) 0.554%
Accrual Loss/Gain on post- employment benefits (348,993) 0.170%
(Loss)/ Profit after taxation 2,833,709 1.377%

Basic earnings/loss per share 18.89

OTHER INFORMATION
Net Profits 2,833,709,000
Weighted average number of ordinary shares 150,000,000
Market value per share- year end 313.80
Dividend per share 24.00
Horizontal Analysis PSO

PSO PROFIT AND LOSS ACCOUNT Horizontal Analysis (Base 2015)

2015 2015 2016 2017
(Rupees '000)
Net Sales 913,094,377 100% -25.75% -3.83%
Cost of products sold (889,515,267) 100% -26.32% -5.46%
Gross profit 23,579,110 100% -4.47% 57.76%
Other income 14,023,958 100% -8.74% -23.38%

Operating costs
Distribution and marketing expenses (9,018,504) 100% -10.31% -2.18%
Administrative expenses (2,400,824) 100% 0.91% 3.25%
Other operating expenses (3,512,788) 100% -43.46% -43.61%
(14,932,116) 100% -16.31% -11.05%
Profit from operations 22,670,952 100% 0.69% 52.89%
Finance costs (11,016,553) 100% -35.10% -46.23%
11,654,399 100% 34.51% 146.59%
Share of profit of associates 379,349 100% 61.46% 60.37%
Profit before taxation 12,033,748 100% 35.36% 143.87%
Taxation (5,097,384) 100% 18.02% 118.18%
Profit after tax 6,936,364 100% 48.11% 162.75%

OTHER INFORMATION
Net Profits 6,936,364,000 100% 48.11% 162.75%
Weighted average number of ordinary shares 271,685,939 100% -99.00% -99.00%
Market value per share- year end 385.79 100% -2.68% 0.40%
Dividend per share 10 100% 25.00% 150.00%
Horizontal Analysis Shell

SHELL PAKISTAN LTD- PROFIT AND LOSS ACCOUNT Horizontal Analysis (Base 2015)
2015 2015 2016 2017
(Rupees '000)
NET SALES 248,570,957 100% (0.14) (0.17)
Other Revenue 824,840 100% 0.27 0.17
249,395,797 100% (0.13) (0.17)
Sales Tax (52,267,446) 100% (0.08) (0.27)
Net Revenue 197,128,351 100% (0.15) (0.14)
Cost of sales (186,533,476) 100% (0.18) (0.17)
Gross Profit 10,594,875 100% 0.32 0.40
Distribution and marketing expenses (4,965,781) 100% 0.10 0.21
Administrative expenses (2,995,215) 100% 0.20 0.38
other operating expenses (998,218) 100% (0.41) 0.41
Other operating Income 424,349 100% 0.81 (0.01)
Operating Profit 2,060,010 100% 1.50 0.81
Finance Cost (299,146) 100% (0.32) (0.21)
Profit before taxation 1,760,864 100% 1.81 0.98
Share of associate 583,961 100% 0.29 0.43
Taxation (1,433,855) 100% (1.74) (0.20)
Accrual Loss/Gain on post- employment benefits - 0% 76.24% 348.99%
(Loss)/ Profit after taxation 910,970 100% 651% 211%
Basic earnings/loss per share 8.51 100% 436% 122%

OTHER INFORMATION
Net Profits 910,970,000 100% 6.51 2.11
Weighted average number of ordinary shares 107,012,331 100% 0.40 0.40
Market value per share- year end 228.18 100% 1.18 0.38
Dividend per share - 0% 34% 24%