FINANCIAL RATIOS

2020 2019 2018 2017 2016 2015
Profitability Ratios
Gross profit ratio % 1.10 3.12 3.73 4.23 3.32 2.51
Net (loss) / profit ratio % (0.58) 0.92 1.45 2.08 1.52 0.76
EBITDA margin to sales % 0.89 2.39 3.14 4.14 3.61 2.63
Return on shareholders' equity % (5.72) 8.88 14.00 17.72 11.22 8.43
Return on capital employed % (3.19) 4.97 7.13 8.48 5.39 3.90
Operating leverage ratio % 1,725.19 (211.76) (40.07) 170.92 (6.54) 198.03

Analysis

The variation in ratios as compared to FY 2019 is because of the following:

  • Gross profit ratio has declined primarily due to significant inventory losses during the year on account of decline in international oil prices.
  • Net loss ratio vs. net profit ratio in FY19 due to significant inventory losses during the year on account of decline in international oil prices and increase in finance cost on account of higher average policy rate of SBP in FY20.
  • EBITDA margins has decreased primarily due to net loss in FY20 on account of reasons mentioned above vs profit in FY19.
  • Negative return on shareholders' equity and capital employed is mainly due to net loss during the year on account of reasons mentioned above.
  • Increase in operating leverage is due to decline of 68.7% in EBIT against a decrease of 4.0% in net sales.

2020 2019 2018 2017 2016 2015
Capital Structure Ratios
Interest cover ratio (x) 0.62 2.94 6.30 5.95 3.28 2.09
Financial leverage ratio (x) 59.00 90.00 81.00 127.00 115.00 124.00
Weighted average cost of debt % 15.49 8.58 4.10 4.66 5.02 9.68
Economic value addition Rs. In Mn (31,955) (14,962) (8,075) (4,570) (9,903) (11,571)

Note: D/E ratio has not been calculated as the Company has no long term debt.

Analysis

The variation in ratios as compared to FY 2019 is because of the following:

  • Interest cover has decreased primarily due to decline in profitability.
  • Financial leverage has decreased during the year on account of decline of short-term borrowings by Rs. 40.5 bn.
  • Weighted average cost of debt has increased mainly due to increase in policy rate by SBP.

2020 2019 2018 2017 2016 2015
Liquidity Ratios
Cash to current liabilities (x) (0.004) (0.06) (0.03) (0.15) (0.12) (0.16)
Cash flow from operations to sales (x) 0.04 (0.01) 0.002 (0.03) (0.001) (0.03)
Current ratio (x) 1.35 1.32 1.32 1.31 1.12 1.10
Quick ratio (x) 1.09 1.01 1.03 1.07 0.91 0.87
Free cash flows to the firm Rs. In Mn. 61,860 (3,130) 8,063 (18,742) 6,594 (15,171)
Free cash flows to the equity holders Rs. In Mn. 29,035 386 (2,464) (6,191) 12,091 (41,668)

Analysis

The variation in ratios as compared to FY 2019 is because of the following:

  • Cash flow to current liabilities has improved due to improvement in cash and cash equivalents and decline in trade and other payables.
  • Cash flow from operations to sales has increased due to higher positive cashflow from operations during the year.
  • Current ratio has improved slightly due to greater percentage decline in current liabilities than current assets.
  • Quick ratio has improved primarily due to decline in stock-in-trade.
  • Increase in cash flows to the firm and equity holders are primarily due to positive working capital on account of decline in trade receivables and other receivables.

2020 2019 2018 2017 2016 2015
Investment Ratios
(Loss) / earning per share (basic & diluted) Rs. (13.7) 22.5 32.9 38.8 21.9 14.8
Market value per share (year end) Rs. 158.2 169.6 318.3 387.4 375.5 385.8
Highest price Rs. 216.9 352.1 466.6 486.1 399.6 408.1
Lowest price Rs. 114.0 151.6 265.2 379.9 287.0 325.6
Break-up value Rs. 240.8 253.9 235.3 219.1 195.1 175.3
Price earning ratio (P/E) (x) (11.5) 7.5 9.7 10.0 17.2 26.1
Price to book Ratio (x) 0.7 0.7 1.4 1.8 1.9 2.2
Dividend per share Rs. - 10.0 15.0 25.0 12.5 10.0
Bonus share % - 20.0 20.0 20.0 - -
Dividend payout (including bonus) % - 44.3 45.5 64.4 57.1 67.7
Dividend yield (including bonus) % - 7.1 5.3 7.0 3.3 2.6
Dividend cover ratio (including bonus) (x) - 2.3 2.8 2.5 3.0 2.6

Analysis

The variation in ratios as compared to FY 2019 is because of the following:

  • Negative P/E ratio is primarily due to the loss during the year.
  • Price to book ratio has remained same due to almost similar decline in market and book price.
  • Breakup value of the company decreased primarily due to the loss during the year.
  • Divident payout and dividend yield is nil this year due to non declaration of the dividend in FY20 on account of net loss.
2020 2019 2018 2017 2016 2015
Activity/Turnover Ratios
Inventory turnover ratio (x) 14.93 13.06 13.84 14.36 11.99 12.30
No. of days in inventory No. 25.00 28.00 26.00 25.00 30.00 30.00
Debtor turnover ratio (x) 6.25 5.77 5.73 5.61 5.05 6.26
No. of days in receivables No. 59.00 63.00 64.00 65.00 72.00 58.00
Creditor turnover ratio (x) 12.51 10.15 10.75 11.64 8.50 8.20
No. of days in creditors No. 30.00 36.00 34.00 31.00 43.00 45.00
Total asset turnover ratio (x) 3.43 3.27 3.30 2.98 2.65 3.12
Fixed asset turnover ratio (x) 142.18 172.07 183.24 160.93 138.97 181.35
Operating cycle No. 54.00 55.00 56.00 59.00 59.00 43.00

Analysis

The variation in ratios as compared to FY 2019 is because of the following:

  • Inventory turnover has improved primarily due to decline in inventory by 36.2% mainly due to fluctuations in international oil prices.
  • Debtors turnover has increased primarily due to decrease in trade debts by 10.4% on account of recoveries from power sector.
  • Creditors turnover has improved primarily due to prompt payments made to suppliers for purchases on credit.
  • Operating cycle has improved due to decrease in inventory and receivable days.
  • Total assets turnover has improved due to decrease in total assets mainly on accounts of reduction in receivables and stock-in-trade.