FINANCIAL RATIOS

2021 2020 2019 2018 2017 2016
Profitability Ratios
Gross profit ratio % 4.53 1.10 3.12 3.73 4.23 3.32
Net Profit / (Loss) ratio % 2.42 (0.58) 0.92 1.45 2.08 1.52
EBITDA margin to sales % 4.65 0.89 2.39 3.14 4.14 3.61
Return on shareholders' equity % 20.82 (5.72) 8.88 14.00 17.72 11.22
Return on capital employed % 15.52 (3.19) 4.97 7.13 8.48 5.39
Operating leverage ratio % 6,411.86 1,725.19 (211.76) (40.07) 170.92 (6.54)

Analysis

The variation in ratios as compared to FY 2020 is because of the following:

  • Gross Profit and EBITDA ratios have increased as compared to last year due to improvement in gross margins.
  • Net profit ratio went up due to higher gross margins, increase in other income and reduction in finance cost.
  • Positive return on shareholders' equity and capital employed as compared to negative in last year is due to profit earned during the year on account of reasons mentioned above vs loss in last year.
  • The increase in operating leverage ratio is due to more proportionate increase in EBIT as compared to sales on account of increase in gross margins and other income.

2021 2020 2019 2018 2017 2016
Capital Structure Ratios
Interest cover ratio (x) 5.30 0.62 2.94 6.30 5.95 3.28
Financial leverage ratio (x) 41.00 59.00 90.00 81.00 127.00 115.00
Weighted average cost of debt % 3.69 13.19 8.58 4.10 4.66 5.02
Economic value addition PKR. In Mn 10,292 (32,114) (14,962) (8,075) (4,570) (9,903)

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 2020 is because of the following:

  • Interest cover has increased due to decline in finance cost by 23.7% and increase in earning before interest and taxes by 554.7%.
  • Financial leverage has decreased during the year mainly on account of decline of short term borrowings by PKR.10.4 bn and increase in shareholder's equity by PKR. 26.9 bn.
  • Weighted average cost of debt has decreased significantly due to lower borrowing rates during the period.

2021 2020 2019 2018 2017 2016
Liquidity Ratios
Cash to current liabilities (x) (0.026) (0.004) (0.06) (0.03) (0.15) (0.12)
Cash Flow from Operating Activity (x) 0.08 0.21 (0.04) 0.01 (0.12) (0.004)
Cash Flow from Operations to Sales (x) 0.01 0.04 (0.01) 0.002 (0.03) (0.001)
Current ratio (x) 1.44 1.35 1.32 1.32 1.31 1.12
Quick ratio (x) 1.10 1.09 1.01 1.03 1.07 0.91
Free cash flows to the firm PKR. In Mn. 42,886 66,161 (3,130) 8,063 (18,742) 6,594
Free cash flows to the equity holders PKR. In Mn. 23,645 27,347 386 (2,464) (6,191) 12,091

Analysis

The variation in ratios as compared to FY 2020 is because of the following:

  • Cash to current liabilities has decreased due to reduction in cash and cash equivalents during the year whereas the current liabilities have increased by 4.5%.
  • Cash flow from operating activity and cash flow from operations to sales both these ratios have decreased due to decrease in cashflow from operations during the year. The cash flows from operating activities have decreased in FY21 primarily due to increase in stock in trade and trade debts which is partially offset by increase in trade and other payables.
  • Current ratio has improved slightly due to greater percentage increase in current assets than current liabilities. Current assets have increased mainly due to increase in stock in trade and trade debts.
  • Quick ratio has also improved slightly due to greater percentage increase in quick assets than increase in current liabililties.
  • Decrease in cash flows to the firm and equity holders are primarily due to negative working capital on account of increase in stock in trade and trade debts.
2021 2020 2019 2018 2017 2016
Investment Ratios
Earning / (Loss) per share (basic & diluted) PKR 62.1 (13.8) 22.5 32.9 38.8 21.9
Market value per share (Year End) PKR 224.3 158.2 169.6 318.3 387.4 375.5
Highest price PKR 259.3 216.9 352.1 466.6 486.1 399.6
Lowest price PKR 159.4 114.0 152.0 265.2 379.9 287.0
Break-up value PKR 298.2 240.8 253.9 235.3 219.1 195.1
Price earning ratio (P/E) (x) 3.6 (11.5) 7.5 9.7 10.0 17.2
Price to book Ratio (x) 0.3 0.2 0.2 0.4 0.5 0.5
Dividend per share PKR 15.0 - 10.0 15.0 25.0 12.5
Bonus share % - - 20.0 20.0 20.0 -
Dividend payout (including bonus) % 24.2 - 44.3 45.5 64.4 57.1
Dividend yield (including bonus) % 6.7 - 7.1 5.3 7.0 3.3
Dividend cover ratio (including bonus) (x) 4.1 - 2.3 2.8 2.5 3.0

Analysis

The variation in ratios as compared to FY 2020 is because of the following:

  • Price earning ratio has improved due to increase in profitability for the year which is partially offset by increase in market value per share.
  • Breakup value of the company has improved due to the profit retained during the year.
  • Dividend payout and dividend yield percentages have increased vs FY20 due to declaration of cash dividend of PKR.15.0 per share in FY21 as compared to no dividend last year.
  • Dividend cover ratio has increased due to increase in EPS for the year.

2021 2020 2019 2018 2017 2016
Activity/Turnover Ratios
Inventory turnover ratio (x) 16.88 14.93 13.06 13.84 14.36 11.99
No. of days in inventory No. 22.00 25.00 28.00 26.00 25.00 30.00
Debtor turnover ratio (x) 6.83 6.25 5.77 5.73 5.61 5.05
No. of days in receivables No. 54.00 58.00 63.00 64.00 65.00 72.00
Creditor turnover ratio (x) 16.51 12.51 10.15 10.75 11.64 8.50
No. of days in creditors No. 23.00 30.00 36.00 34.00 31.00 43.00
Total asset turnover ratio (x) 3.94 3.43 3.27 3.30 2.98 2.65
Fixed asset turnover ratio (x) 116.81 142.18 172.07 183.24 160.93 138.97
Operating cycle No. 53.00 53.00 55.00 56.00 59.00 59.00

Analysis

The variation in ratios as compared to FY 2020 is because of the following:

  • Inventory turnover has increased as company is coverting its inventory into sales in a quicker time.
  • Debtors turnover has increased primarily due to increase in gross revenue by 9.4% whereas average debtors have increased by 0.15% only.
  • Creditors turnover has improved primarily due to prompt payments made to suppliers for purchases on credit.
  • Operating cycle has remained almost the same.
  • Total Asset turnover has improved due to more proportionate increase in sales than average total assets. Increase in sales is due to both positive volume and price variance.
2021 2020 2019 2018 2017 2016
Employee Productivity Ratio
*Production per Employee Metric Ton 416 411 412 467 447 405
*Revenue per Employee PKR in Mn. 503 441 446 374 323 241
Staff Turnover Ratio (x) 0.06 0.05 0.04 0.05 0.06 0.04

*For consistency purposes, employees number for each year includes outsourced employees who were regularized in FY2018 & FY2019 in accordance with court rulings.

2021 2020 2019 2018 2017 2016
Non Financial Ratios
% of Plant Availability % 1.16 1.16 1.14 1.08 1.08 1.06
*Customer Satisfaction Index % 70 70 71 66

*Customer responses are being formally monitored by Company since FY2018.

2021 2020 2019 2018 2017 2016
Others
Spares Inventory as % of Assets Cost % 0.2 0.2 0.1 0.1 0.1 0.1
Maintenance Cost as % of Operating Expense % 7.3 10.6 6.1 6.3 7.4 7.1