Ratio analysis of three different companies.

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PISTACHIO

PISTACHIO (PRIVATE) LIMITED				PISTACHIO (PRIVATE) LIMITED		PROFITABILITY RATIOS
BALANCE SHEET AS AT JUNE 30, 2017				PROFIT AND LOSS ACCOUNT		Return on capital employed:
			2017	FOR THE YEAR ENDED JUNE 30, 2017		Result (PBT)	=	5,753,917	0.177
			Rupees		2017	Capital Employed (Equity)		32,427,432
ASSETS					Rupees
	NON CURRENT ASSETS			Sales - net	324,173,866	Gross profit margin:
		Property, plant and equipment		Cost of sales	(298,543,929)	Gross Profit	=	25,629,937	0.079
		Operating fixed assets	50,747,457	Gross profit	25,629,937	Turnover		324,173,866
		Intangible assets	4,635	Administrative expenses	(17,261,869)
		Deferred tax asset	2,080,867	Selling and distribution expenses	(2,671,902)	Net margin:
		Long term security deposits	1,257,459	Other operating expenses	(648,323)	PBT	=	5,753,917	0.018
			54,090,418	Operating profit	5,047,843	Turnover		324,173,866
	CURRENT ASSETS			Finance cost	(32,047)
		Store and spares	5,787,153	Other income	738,121	LIQUIDITY RATIOS
		Stock in trade	11,017,302	Profit before taxation	5,753,917	Current ratio:
		Advances	305,606	Taxation	18,918	Current Assets	=	26,788,621	1.052
		Short term prepayments	48,752	Profit after taxation	5,772,835	Current Liabilities		25,474,607
		Other receivables	3,338,667
		Taxation - net	3,491,103			Quick ratio:
		Cash and bank balances	2,800,038			Current Assets - Stock	=	9,984,166	0.392
			26,788,621			Current Liabilities		25,474,607
TOTAL ASSETS			80,879,039
EQUITY AND LIABILITIES						Working Capital ratio
	SHARE CAPITAL AND RESERVES					Current Assets - Current Liabilities	=	1,314,014	0.052
		Share capital	30,284,000			Current Liabilities		25,474,607
		Accumulated loss	2,143,432
			32,427,432			SOLVENCY RATIOS
	NON-CURRENT LIABILITIES					Gearing:
		Deferred liabilities	22,977,000			Debt	=	22,977,000	0.709
	CURRENT LIABILITIES					Equity		32,427,432
		Trade and other payables	25,474,607
						Interest cover:
CONTINGENCIES AND COMMITMENTS			- 0			Profit before Interest	=	5,753,917	179.55
TOTAL EQUITY AND LIABILITIES			80,879,039			Interest		32,047
						Debt/Asset
						Debt	=	22,977,000	0.425
						Asstes		54,090,418
						INVESTOR RATIOS
						EPS:
						Profit after tax	=	5,772,835	19.062
						Ordinary shares in issue		302,840
						P/E ratio:
						Price per share	=	100	5.246
						EPS		19.0623266411
						Dividend yield:
						Gross dividend per share	=	19.06	0.191
						Price per share		100
						Dividend cover:
						EPS	=	19.0623266411	1.000
						Net Dividend per share		19.06

CASHEW

CASHEW (PRIVATE) LIMITED		CASHEW (PRIVATE) LIMITED		PROFITABILITY RATIOS
BALANCE SHEET AS AT JUNE 30, 2017		PROFIT AND LOSS ACCOUNT		Return on capital employed:
	2017	FOR THE YEAR ENDED JUNE 30, 2017		Result (PBT)	=	54,150,954	0.058
	Rupees		2017	Capital Employed (Equity)		938,423,993
ASSETS			Rupees
NON CURRENT ASSETS		Sales - net	1,689,693,209	Gross profit margin:
Property, plant and equipment	439,798,013	Cost of sales	(1,538,265,477)	Gross Profit	=	151,427,732	0.090
Long term deposits	1,114,854	Gross profit	151,427,732	Turnover		1,689,693,209
Investment property	417,535,356	Administrative and selling expenses	(56,256,485)
Long term advance	36,815,867	Other operating expenses	(9,887,375)	Net margin:
	895,264,090	Operating profit	85,283,872	PBT	=	54,150,954	0.032
CURRENT ASSETS		Finance cost	(17,790,797)	Turnover		1,689,693,209
Stock in trade	956,944,096	Other operating income	62,317,904
Trade debts	20,909,441	(Impairment loss)/Fair value gain on investment property	(75,660,025)	LIQUIDITY RATIOS
Loans and advances	192,903,140	Profit before taxation	54,150,954	Current ratio:
Trade deposits and short term prepayments	58,650,705	Taxation	(42,096,781)	Current Assets	=	1,475,123,838	1.473
Tax refund due from government	232,292,873	Profit for the year	12,054,173	Current Liabilities		1,001,428,064
Taxation - net	- 0
Cash and bank balances	13,423,583			Quick ratio:
	1,475,123,838			Current Assets - Stock	=	518,179,742	0.517
TOTAL ASSETS	2,370,387,928			Current Liabilities		1,001,428,064
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVES				Working Capital ratio
Share capital	10,000,000			Current Assets - Current Liabilities	=	473,695,774	0.473
Unappropriated profit	928,423,993			Current Liabilities		1,001,428,064
	938,423,993
				SOLVENCY RATIOS
SURPLUS ON REVALUATION OF FIXED ASSETS	399,856,945			Gearing:
				Debt	=	30,678,926	0.033
				Equity		938,423,993
NON CURRENT LIABILITIES
Deferred taxation	17,730,548			Interest cover:
Long term deposit - rent	640,000			Profit before Interest	=	54,150,954	3.044
Obligation under finance lease	12,308,378			Interest		17,790,797
	30,678,926			Debt/Asset
CURRENT LIABILITIES				Debt	=	30,678,926	0.034
Trade and other payables	423,375,251			Asstes		895,264,090
Loan from director	15,000,000
Markup accrued	381,719			INVESTOR RATIOS
Short term borrowings	558,370,465			EPS:
Taxation - net	1,474,415			Profit after tax	=	12,054,173	12.054
Current portion of long term liabilities	2,826,214			Ordinary shares in issue		1,000,000
	1,001,428,064
CONTINGENCIES AND COMMITMENTS	- 0			P/E ratio:
TOTAL EQUITY AND LIABILITIES	2,370,387,928			Price per share	=	10	0.830
				EPS		12.05
				Dividend yield:
				Gross dividend per share	=	12.05	1.205
				Price per share		10
				Dividend cover:
				EPS	=	12.0541731962	1.000
				Net Dividend per share		12.05

ALMOND

ALMOND (PRIVATE) LIMITED					ALMOND (PRIVATE) LIMITED		PROFITABILITY RATIOS
BALANCE SHEET AS AT JUNE 30, 2017					PROFIT AND LOSS ACCOUNT		Return on capital employed:
				2017	FOR THE YEAR ENDED JUNE 30, 2017		Result (PBT)	=	17,061,115	0.049
				Rupees		2017	Capital Employed (Equity)		351,474,081
ASSETS						Rupees
	NON CURRENT ASSETS				Sales	505,661,281	Gross profit margin:
		Property, plant and equipment			Cost of sales	(462,786,804)	Gross Profit	=	42,874,477	0.085
			Operating fixed assets	434,193,856	Gross profit	42,874,477	Turnover		505,661,281
			Capital work in progress	- 0	Administrative expenses	(13,099,965)
				434,193,856	Operating profit	29,774,512	Net margin:
			Long term investment	44,471,318	Financial charges	(14,458,866)	PBT	=	17,061,115	0.034
			Deferred taxation	74,108,729	Other income	1,745,469	Turnover		505,661,281
				552,773,903	Profit before taxation	17,061,115
	CURRENT ASSETS				Taxation	62,018,496	LIQUIDITY RATIOS
		Stores and spares		5,822,232	Profit after taxation	79,079,611	Current ratio:
		Stock in trade		261,351,817			Current Assets	=	407,597,369	1.263
		Trade debts - unsecured considered good		149,971			Current Liabilities		322,758,457
		Advances		137,579,380
		Short term prepayments		62,500			Quick ratio:
		Cash and bank balances		2,631,469			Current Assets - Stock	=	140,423,320	0.435
				407,597,369			Current Liabilities		322,758,457
TOTAL ASSETS				960,371,272
							Working Capital ratio
EQUITY AND LIABILITIES							Current Assets - Current Liabilities	=	84,838,912	0.263
	SHARE CAPITAL AND RESERVES						Current Liabilities		322,758,457
		Share capital		90,000,000			SOLVENCY RATIOS
		Unappropriated profit		168,826,361			Gearing:
		Long term loan from associated undertaking		92,647,720			Debt	=	60,000,000	0.171
				351,474,081			Equity		351,474,081
		Advance against issue of shares		55,000,000			Interest cover:
							Profit before Interest	=	17,061,115	1.180
	SURPLUS ON REVALUATION OF FIXED ASSETS			171,138,734			Interest		14,458,866
							Debt/Asset
	NON-CURRENT LIABILITIES						Debt	=	60,000,000	0.125
			Deferred taxation	- 0			Asstes		478,665,174
			Long Term Borrowings	60,000,000
							INVESTOR RATIOS
	CURRENT LIABILITIES						EPS:
		Trade and other payables		104,756,043			Profit after tax	=	79,079,611	8.787
		Accrued markup		4,763,292			Ordinary shares in issue		9,000,000
		Short term borrowing		178,572,060
		Taxation - net		34,667,062			P/E ratio:
				322,758,457			Price per share	=	10	1.138
CONTINGENCIES AND COMMITMENTS				- 0			EPS		8.79
TOTAL EQUITY AND LIABILITIES				960,371,272
							Dividend yield:
							Gross dividend per share	=	8.79	0.879
							Price per share		10
							Dividend cover:
							EPS	=	8.79	1.000
							Net Dividend per share		8.79

Answers

ANSWERS OF THE REQUIRED QUESTIONS		Pistachio	Cashew	Almond
	Current ratio:	1.052	1.473	1.263
1. Which company is more liquid?	Quick ratio:	0.392	0.517	0.435
	Working Capital ratio	0.052	0.473	0.263
Cashew is more liquid as all the three retios are greater in the case of cashew as compared to others.
2. Which company has the strongest net income?		Pistachio	Cashew	Almond
	Profit after taxation	5,772,835	12,054,173	79,079,611
Almond has the strongest net income as it has significantly high profit after taxation as compared to other companies. So after dividend payment it shall surely have highest net income.
3. Which company has the strongest solvency?
		Pistachio	Cashew	Almond
Pistachio is strongest solvent as all the three retios are greater in the case of pistachio as compared to others.	Gearing:	0.709	0.033	0.171
	Interest cover:	179.546	3.044	1.180
	Debt/Asset	0.425	0.034	0.125
4. Which company is most profitable?
		Pistachio	Cashew	Almond
Pistachio is most profitable as return on capital is highest with great margin and other two ratios are slighty lesser than other companies, so we can say that pistachio is most profitable.	Return on capital employed:	0.177	0.058	0.049
	Gross profit margin:	0.079	0.090	0.085
	Net margin:	0.018	0.032	0.034
5. Which company would be the most solid financial investment? Why?		Pistachio	Cashew	Almond
Pistachio would be most solid financial investment as EPS and E/P ratios are highest with great margins, third is equal to other companies and fourth is slightly lesser than other companies.	EPS:	19.062	12.054	8.787
	P/E ratio:	5.246	0.830	1.138
	Dividend yield:	0.191	1.205	0.879
	Dividend cover:	1.000	1.000	1.000