Analysis of Financial Statements

ANALYSIS OF FINANCIAL
STATEMENTS
REPORT ON ENGRO
CHEMICALS
Acknowledgement
The compilation of this report could not have been realized without the blessings of Almighty Allah. I am
highly indebted to quite a few people who have been there from the beginning till the completion of my
research. Their undue support has been the source of inspiration for us to complete it efficiently within time.
I would deeply like to thank our teacher Mr. Maqbool Ur - Rehman, Assistant Professor, inance and
Accounting, at I.o.!." for his guidance during the pro#ect. $is e%cessive support has been the source of
motivation to perform our best, regarding the report.
&mair 'aseen
Page 2
Table of Contents
Acknowledgement............................................................................................................................................... 2
Table of Contents................................................................................................................................................ 3
ABOUT ENGRO.................................................................................................................................................. 7
Company Profile.............................................................................................................................................. 7
ENGRO AT A GLANCE...................................................................................................................................... 8
FERTlLlZER PORTFOLlO.............................................................................................................................. 9
EXPANSlONS............................................................................................................................................... ll
Fertilizer SECTORAL OUTLOOK...................................................................................................................... l2
AGRlCULTURE SECTOR............................................................................................................................. l2
TYPES OF FERTlLlZER............................................................................................................................... l2
GLOBAL SCENARlO.................................................................................................................................... l3
PRlClNG....................................................................................................................................................... l4
lnternational versus Local.............................................................................................................................. l5
DEMAND & SUPPLY.................................................................................................................................... l6
TAXES........................................................................................................................................................... l7
Future Outlook Sales & growth...................................................................................................................... l8
VERTlCAL ANALYSlS...................................................................................................................................... l9
lncome Statement......................................................................................................................................... l9
Balance Sheet............................................................................................................................................... 20
HORlZONTAL ANLYSlS................................................................................................................................... 24
lncome Statement......................................................................................................................................... 24
Balance Sheet .............................................................................................................................................. 26
Component Percentage Analysis...................................................................................................................... 29
BALANCE SHEET......................................................................................................................................... 30
Component Analysis according to Pakistani Rupees ....................................................................................... 33
Balance Sheet............................................................................................................................................... 33
LlQUlDlTY RATlOS.......................................................................................................................................... 35
CURRENT RATlO......................................................................................................................................... 35
QUlCK RATlO............................................................................................................................................... 36
CASH FLOW LlQUlDlTY RATlO................................................................................................................... 38
AVERAGE COLLECTlON PERlOD............................................................................................................... 39
Page 3
AVERAGE lNVENTORY DAYS..................................................................................................................... 40
AVERAGE PAYABLE DAYS......................................................................................................................... 4l
TURNOVER / EFFlClENCY RATlOS................................................................................................................ 42
RECElVABLE TURNOVER........................................................................................................................... 42
lNVENTORY TURNOVER............................................................................................................................. 43
PAYABLE TURNOVER................................................................................................................................. 44
FlXED ASSET TURNOVER.......................................................................................................................... 46
TOTAL ASSET TURNOVER......................................................................................................................... 47
SOLVENCY / LEVERAGE RATlOS.................................................................................................................. 48
DEBT RATlO................................................................................................................................................. 48
LONG TERM DEBT TO CAPlTALlZATlON RATlO....................................................................................... 49
DEBT TO EQUlTY RATlO............................................................................................................................. 50
COVERAGE RATlOS....................................................................................................................................... 5l
TlMES lNTEREST EARNED......................................................................................................................... 5l
CASH COVERAGE RATlO........................................................................................................................... 53
CASH FLOW ADEQUACY RATlO................................................................................................................ 54
PROFlTABlLlTY RATlOS................................................................................................................................. 55
GROSS PROFlT MARGlN............................................................................................................................ 55
OPERATlNG MARGlN.................................................................................................................................. 56
NET POFlT MARGlN.................................................................................................................................... 57
CASH FLOW MARGlN.................................................................................................................................. 59
RETURN ON EQUlTY................................................................................................................................... 60
RETURN ON ASSET.................................................................................................................................... 6l
CASH RETURN ON ASSET.......................................................................................................................... 62
MARKET RATlOS............................................................................................................................................. 63
EARNlNG PER SHARE................................................................................................................................. 63
PRlCE TO EARNlNG RATlO........................................................................................................................ 64
DlVlDEND PAYOUT...................................................................................................................................... 65
DlVlDEND YlELD.......................................................................................................................................... 66
DUPONT ANALYSlS........................................................................................................................................ 67
lnsight for lnvestors........................................................................................................................................... 68
Future Projections............................................................................................................................................. 69
Problems & their Solution.................................................................................................................................. 7l
ANNEXURE...................................................................................................................................................... 72
Ratios............................................................................................................................................................ 72
Page 4
Balance Sheet............................................................................................................................................... 75
References........................................................................................................................................................ 78
Page 5
Page 6
ABOUT ENGRO
Company Profile
Engro Chemical Pakistan Limited is the second largest producer of urea fertilizer in Pakistan. The company
was incorporated in l965 and was formerly known as Exxon Chemical Pakistan Limited until l99l. Exxon
decided to divest their fertilizer business on a global basis and sold off its equity of 75% shares in the company
to the employees of Engro. Post acquisition by the employees the company was renamed as Engro Chemical
Pakistan Limited.
Construction of Engro's l00,000 tons per annum capacity NPK fertilizers plant at Port Qasim at a cost of USD
l0mn was completed in 200l. The plant is benefiting the country's agricultural sector by providing balance
nutrition to improve farm yields. During the year 2004, the product's generic name of NPK was replaced by
Zarkhez.
ln April 2003 Engro acquired 5l% interest in the Automation & Control Division of lnnovative (Private) Limited,
a Lahore based company that provides process control industrial solutions in the services sector. The joint
venture has been named "lnnovative Automation & Engineering (Private) Limited (lAEL)".The acquisition was
part of Engro's diversification strategy.
Engro Seeds business has made significant progress in developing its own hybrid seeds of maize and
sunflower crops and launched two new maize hybrids of imported origin. All seed products are being marketed
under the brand name of 'Bemisal'.
ln March 2006 Engro set up a milk processing facility via 'Engro Foods Ltd.' to produce and market branded
UHT milk, cream and other dairy product. EFL operates two plants which are located in Sukkur and Sahiwal
with an annual capacity of 200mn liters.
Page 7
ENGRO AT A GANCE

Page 8
!ERT""#ER PORT!O"O
NITROGENEOS FERTILIZERS
ENGRO UREA is a trusted high grade fertilizer containing 46% Nitrogen (N), with moderate hydroscopicity. lt
has a pH value of 6.8 (organic molecule) and is suitable for all crops on all soils. Engro Urea is an excellent
source of Nitrogen for the vast majority of cultivated soils of Pakistan.
PHOSPHATIC FERTILIZERS
Engro DAP: contains 46% P2O5 and l8% N. More than 90% of Phosphate (P) is water soluble. lt has a pH
value of 7.33 and is a good source of P fertilizer for all crops. lt is an equally good source on problem soils
(saline sodic) with coarse texture. On an overall basis it suits to about 90% soils of the country.
Engro Zorawar: is one of the highest grade phosphatic fertilizers. lt is acidic in reaction (pH >= 3.5) and
contains 52% P2O5 of which more than 90% is water soluble, while the rest is citrate soluble. ln addition to P,
it contains l2% N, 2% sulphur and l% calcium. lt is a beneficial fertilizer for all crops on all soils of Pakistan
and produces excellent results on alkaline soils, due to its acidicy.
The acidic pH of Engro Zorawar also tends to slow down the rapid conversion of soluble P to water insoluble
compounds, keeping it plant available for a longer period of time.
Engro Phosphate: is brown colored mono ammonium phosphate with ll% nitrogen and 52% phosphorus. lt
is being marketed as relatively cheaper alternate of DAP.
BLENDED FERTILIZERS
Engro Zarkhe: is homogenously granulated fertilizer which maximizes crop yield by providing balanced
nutrition for a wide variety of crops through the uniform availability of Nitrogen, Phosphorous and Potassium.
Engro Zarkhez grades are specially produced to suit the requirements of individual crops and soils, and
provide convenience to the farmer through ready availability of precise quantities of primary nutrients.
Engro Zarkhez fertilizers have low moisture content, high crush strength; 2mm-4mm granule size and free
flowing nature - attributes which ensure excellent handling and application characteristics.
Green 08:23:l8 Potato, Maize, Sugarcane, Wheat, Cotton, Rice and Vegetables
Blue l7:l7:l7 Citrus, Mango, Banana and Other Fruits
Tobacco l2:l5:20 Tobacco
Engro NP: it provides 22% nitrogen, and 20% phosphorus. ECPL entered into NP business in 2005 to cater
the need of its customers for this established category. Primary focus area for ENP marketing is South Zone
(Sind).
!"#ro N$tr"ents
Page 9
Z"ngro: Zinc Sulphate, a highly effective and potent fertilizer which primarily targets Zinc deficiency in crops
like Rice, Potato, Maize, Sugar cane, Wheat, Cotton, vegetables and fruits. Zingro increases crop yield and
enhances crop appearance.
Page l0
E$PAN%"ON%
ln order to take advantage of the current fertilizer shortage scenario, the company planned to establish a
l.3mntpa urea plant, taking its aggregate capacity to 2.275mntpa by mid CYl0. This expansion will make the
company the market leader in urea business in Pakistan, with an estimated market share of 34%. The planned
expansion will be the world's largest single train urea plant. The expansion along with benefiting the company
will also result in meeting the demand of the local market thus reducing the amount of invaluable foreign
exchange spent by the GoP on import. We do not foresee a supply glut with the commencement of commercial
operations of the new plant, however in case there is any excess supply, there are various opportunities in the
region where the fertilizer can be exported. We do not expect Engro to gain additional advantage, in the event
of exports, from the heavy differential between local and international urea prices as the GoP subsidizes the
gas (feedstock) heavily to local manufacturers. Most likely scenario in this case would be GoP buying the
excess production from Engro at the prevailing domestic price and exporting at international prices while
pocketing the price differential.
The new plant along with being fuel-efficient (expected to consume l5% less gas than the existing plant), will
also bring in various other synergies, especially with regards to labor cost. The expansion will require hiring of
a further 300 employees at the plant complex of which 260 will be devoted to the plant while approximately 40
will be required for managerial positions, translating into 38% increase in labor count (current workforce is
77l). Marketing and distribution is another area where the company will benefit as it already has a well laid out
distribution network and does not need any substantial investment in further building new channels for sales.
Page ll
!ertili&er %ECTORA OUTOO'
AGR"CUTURE %ECTOR
The undeniable importance of the agriculture sector to the economy of Pakistan is reflected in its contribution
to national output, employment and export earnings. This sector contributes 22% to the country's Gross
Domestic Product (GDP) and employs 43% of total labor force. Growth in this area of Economy is vital for
poverty alleviation, as about 66 percent of rural population is directly or indirectly dependent on the agriculture
sector for sustenance. Pakistan's major source of foreign exchange earnings is the textile sector which also
relies on agricultural performance. The major crops of Pakistan are wheat, cotton, rice and sugarcane, which
make up 7% of the country's GDP.
Fertilizer has a significant contribution in increasing crop yields and productivity. Proper application of nutrients
helps in efficient utilization of limited natural resources such as land and water. Fertilizers improve crop yield by
removing the deficiency of chemical elements taken from the soil by harvesting, grazing, leaching or erosion.
Coupled with improved seeds, better insecticides and more effective fungicides, chemical fertilizers play a vital
role in boosting agricultural output. With proper farmer education and increased awareness, the fertilizer off-
take can improve substantially. Nutrient application in suitable quantities can further improve farm productivity,
thereby helping in eradicating poverty.
T(PE% O! !ERT""#ER
Urea, which represents 65% of total fertilizer consumed and di-ammonium phosphate (DAP), which accounts
for l8%, are the main types of fertilizer used in Pakistan, but there is a total of eight different fertilizer products
which fall into three categories.
Urea, along with calcium ammonium nitrate (CAN) and ammonium sulphate (AS) together make up almost
three fourths of total fertilizer consumption and come under the nitrogenous category. Under the phosphatic
category which makes up about 27%, is DAP, triple super phosphate (TSP), single super phosphate (SSP) and
Page l2
nitro phosphate (NP). And under the last category, potassic is sulphate of potash which makes up only l%.
Since the soil in Pakistan generally tends to be deficient in nitrogen, urea is the most used fertilizer. DAP is
used, as most phosphatic fertilizers are to counter the effect of the acidic urea and maintain levels of fertility in
the soil.
GOBA %CENAR"O
The world grain consumption has outpaced production in six of the last seven years, with 2005 being the only
exception, in which production superseded supply due to favorable weather in almost all the major grain
producing countries. With the growing demand of food and rapid increase in demand for biofuels, the grain
consumption growth has witnessed an increase of 2% in 2007 from the historical average rate of l.2% p.a.
This has led to a widening gap between consumption and production resulting in sharp increase in food prices
in the global market.
During 2007, total global production of grains was recorded at 2.3bn tons, up 4% YoY. Despite, the increase in
production the global commodity prices have climbed significantly during the past twelve months on the back of
rising demand from emerging economies. Corn, wheat, and rice account for about 85% of the global grain
harvest (in terms of weight), while sorghum, millet, barley, oats, and other less common grains make up the
rest. China, lndia, and the United States alone account for 46% of global grain production; Europe, including
the former Soviet states, grow another 2l%.
ln 2007, a 200mn ton jump in the global coarse grain harvest was responsible for nearly all of the increase in
the total grain harvest. Production of coarse grains a group that includes corn, barley, sorghum, and other
grains fed mainly to animals increased l0% from 985mn tons in 2006 to l,080mn tons in 2007. During 2007, a
significant amount of global corn production was used in producing biofuels, the use of which is being
promoted in developed countries (mainly EU and USA). Governments in developed countries have been
encouraging the use of biofuels primarily due to (l) lncreasing price of international crude oil and (2) Bio-fuels
are environment friendly.
Out of a total of 784mn tons of corn harvested during 2007, about 255mn tons or 32.5% was used in extracting
biofuels which has resulted in sharp increase in price of the commodity. Higher corn prices prompted many a
farmers in various countries (China, Brazil and the United States) to switch to corn harvesting. Another major
consumer of grains is the livestock sector, which accounted for approximately 627mn tons (27%) in the form of
feed for the cattle. Demand of grains from this sector has grown rapidly over the past few years on account of
higher consumption of dairy products and meat by the developing countries especially China, lndia and Brazil.
The amount of grain stored by governments, a good measure of the global cushion against poor harvests and
rising prices continues to decline. Global cereal stocks were expected to stand at 3l8mn tons by the close of
the 2007 season, equivalent to about l4 percent of annual consumption, lowest since many years. ln
comparison to the global scenario, Pakistan's food grain production has witnessed a rising trend over the years
registering a 4-year CAGR (FY02-06) of 5.7% on the back of good harvest of major crops (wheat & rice) which
account for almost 84% of the total grain production of the country.
Page l3
PR"C"NG
Lo#a% Arena
Urea prices have shown a positive trend over the last few years on the back of step-wise increase in feedstock
gas prices, the primary raw-material for urea manufacturing. Government heavily subsidizes feedstock prices
in Pakistan, to keep the urea prices within affordable limits of the farmers. A 50kg bag of urea is sold at PKR
558-565 (prices were revised upwards in Dec'07) versus a price of approximately PKR l000 per bag in the
international market. DAP prices on the other hand have undergone a radical increase during 2007, due to
record high phosphoric acid prices in the international market (a major raw material). Local prices of DAP are
highly correlated with their global rates since over 70% of the commodity used in the country is imported. As a
Page l4
result, domestic DAP prices have surged during CY07, rising from PKR 800 per bag at the start of the year to
touch PKR l,680 by Dec'07.
"nternational )ers*s ocal
&rea Pr"#es
lnternational urea prices have escalated at a healthy 4-year CAGR (FY03-07) of l9.6%, driven by its increased
usage globally from l28mntpa in 2005 to l38mntpa in 2007. On the other hand local urea prices have risen at
a 4-year CAGR of 6.8% from FY03 to FY07. GOP heavily subsidizes the feedstock gas prices in order to make
available the fertilizer to the local farmers at an affordable cost. Urea prices are primarily linked to the increase
in feedstock gas prices, which are expected to rise at a next 4-year CAGR of ll% going forward.
Consequently we expect local urea prices to increase at a 4-year CAGR of 5.5% for the period FY07-FYll.
Page l5
DAP Pr"#es
lnternational DAP prices have risen sharply during 2007 (+l43% YoY) on the back of rising demand for the
phosphatic fertilizer for harvesting of crops used in production of biofuels. ln the local market, price of DAP
fertilizer too has followed suit and has gone up from PKR 873 per 50kg bag at the start of 2007 to around PKR
l,680 per bag at present. Despite the PKR 470 per bag subsidy by the GOP, the hefty rise in DAP prices has
caused its off-take to drop significantly during the past few months with many farmers reverting to the use of
urea. FFBL the only producer of DAP and caters to only 3l% of the DAP demand of Pakistan while the rest of
the demand is met through imports. Since the local prices are highly correlated to global prices we estimate
DAP prices to increase at a 4-year CAGR (CY07-llE) of 6.3%.
+E,AN+ - %UPP(
There are nine fertilizer plants in Pakistan with a total installed capacity of 4.35mn tons including urea, Di-
ammonium phosphate (DAP), single super phosphate (SSP), calcium ammonium nitrate (CAN), nitro
phosphate (NP) and ammonium sulfate (AS). Total demand of these fertilizers is estimated to grow at an
average of 4% per annum in the medium term. The shortfall of approximately l.lmntpa is met through import
on which GOP provides subsidies. During FY08, the GOP allocated a sum of PKR l3.5bn for import of various
fertilizers.
Page l6
The graph above shows the demand trend of both major fertilizers, urea and DAP, which has increased at a 4-
year CAGR (CY02-06) of 4.6% and 7.7% respectively. Given the increase in crop prices, low per acre usage of
fertilizers, increasing awareness among the farming community and vast cultivable land, we estimate demand
growth of fertilizers to average over 4% per annum over the next 4 years.
TA$E%
The government has privatized and deregulated fertilizer imports and prices. ln l986, all subsidies on
nitrogenous fertilizers were abolished followed by phosphates in l993 and potash in l997. Provincial quotas
were abolished, provincial supply organizations in the public sector abandoned and import controls were lifted.
Page l7
All imports are affected by the private sector. ln 200l, the government imposed a l5 percent general sales tax
on all fertilizer products. Farmers have to pay international prices for imported products, apart from urea.
The share of the private sector in fertilizer marketing is 89 percent, compared to ll percent for the public
sector. The private sector handles about 90 percent of the urea and l00 percent of the DAP, the two major
fertilizer products consumed in the country. A dealer network of about 8 000 retailers exists in the country.
Fertilizer companies select and train the dealers. There is no government intervention. However, under
'Fertilizer Acts' promulgated by provinces, fertilizer quality is monitored by the provincial governments.
!*t*re O*tlook %ales - growt.
The future outlook of the fertilizer sector is very strong because of supportive government policies, favorable
climatic conditions and gas pricing. The Economic Coordination Committee (ECC) has directed Sui Northern
Gas Pipelines Limited (SNGPL) to market an additional l00 million cubic feet a day of natural gas from the
Qadirpur gas field, close to both Engro and the FFC.
Short term outlook appears encouraging with significant projections for strong demand for our fertilizers. ln the
long term, the Company is committed to achieve sustained levels of operations at demonstrated operating
efficiencies through focus on their fundamental strengths.
Customs duty of 5% was withdrawn from imported urea. A similar withdrawal was done on imported DAP
fertilizer last year this will not affect local manufacturers The medium to long term projected demand supply
gap situation together with commissioning of their BMR projects with enhanced urea production capacities
would further consolidate their market presence and allow improved returns to the Company and its
stakeholders.
Page l8
/ERT"CA ANA(%"%
"ncome %tatement
200l 2002 2003 2004 2005 2006 2007 2008
Net sa%es l00% l00% l00% l00% l00% l00% l00% l00%
Cost o' sa%es 67% 67% 68% 74% 79% 76% 79% 73%
GROSS PROFIT 33% 33% 32% 26% 2l% 24% 2l% 27%
Se%%"ng ( )"str"*$t"on
e+penses
l2% ll% ll% 8% 7% 8% 7% 7%
Other Operat"ng In#o,e 0%
Pro'"t Fro, Operat"ons 2l% 2l% 2l% l7% l4% l6% l4% l9%
Other "n#o,e 2% 2% 3% 4% 6% 8% 8% l2%
24% 23% 24% 22% 2l% 23% 22% 3l%
Less : F"nan#e Charges 8% 5% 3% l% 2% 2% 2% 6%
Other #harges l% l% 2% -2% -2% 2% l% 2%
9% 7% 5% 4% -3% -4% -4% -9%
Pro'"t Be'ore Ta+at"on l4% l7% l9% l8% l8% 20% l9% 22%
TA-ATION 2% 6% 6% 6% 5% 5% 5% 4%
Pro'"t a'ter Ta+at"on l3% l0% l3% l3% l3% l4% l4% l8%
Cost of goods sold contribution has been increasing over the year which is not a good sign for the
company as it is unable to control its cost.
Selling and administrative expenses contribution has decreased which is a positive sign as the firm is
able to control its expenses.
An important development in 2008 is the amount spent on interest charges which has increased by 4%
due to high debt.
Profit from expansion has increased due to contribution of income from other sources.
Page l9
Balance %.eet
.//0 .//. .//1 .//2 .//3 .//4 .//5 .//6
NON C&RRENT ASSETS
Propert78 p%ant an) e9$"p,ent 55% 50% 55% 54% 48% 4l% 36% 55%
Intang"*%e assets - - - 0% 0% 0% 0% 0%
Long ter, "n:est,ents ll% 9% ll% ll% l5% 23% 20% l8%
De'erre) e,p%o7ee #o,pensat"on
e+pense
- - - - - - - 0%
De'erre) e+pen)"t$re 0% l% 0% - - - - -
Long ter, %oans8 a):an#es an)
other re#e":a*%es "n#%$)"ng
)er":at":es
l% l% l% 0% 0% 0% 0% 0%
Fore"gn E+#hange R"sk Ins$ran#e
Contra#t
l%
TOTAL NON;C&RRENT ASSETS 68% 62% 67% 65% 64% 64% 57% 75%

C&RRENT ASSETS
Stores8 spares an) %oose too%s 5% 4% 4% 4% 5% 4% 2% 2%
Sto#k "n tra)e 3% 5% 3% 4% l4% 6% 7% 8%
Leaseho%) %an) he%) 'or sa%e - 0% - - - - - -
Tra)e )e*ts 3% 4% 5% 4% 4% 4% 4% 0%
e+pense
0% 0% 0% 0% 0% - - 0%
Loans8 a):an#es8 )epos"ts an)
prepa7,ents
l% 2% l% 4% 3% 3% 2% 3%
Other re#e":a*%es "n#%$)"ng
)er":at":es
2% l% 0% 0% 2% 6% 6% 8%
C$rrent Port"on o' Fore"gn
E+#hange R"sk Ins$ran#e #ontra#t
- l% - - - - - -
Ta+at"on 4% l% l% l% l%
Short ter, "n:est,ents 6% 5% 6% 7% l% l% l6% 0%
Cash ( *ank *a%an#es 8% l5% l3% ll% 8% ll% 4% 3%
TOTAL C&RRENT ASSETS 32% 38% 33% 35% 36% 36% 43% 25%

TOTAL ASSETS l00.00 l00.00 l00.00 l00.00 l00.00 l00.00 l00.00 l00.00
Page 20
% % % % % % % %
Page 2l
.//0 .//. .//1 .//2 .//3 .//4 .//5 .//6
SHARE CAPITAL ( RESER<ES

SHARE CAPITAL
A$thor"e) l6% l4% l6% l5% l4% l3% 8% 5%

Iss$e)8 s$*s#r"*e) ( pa");$p ll% l0% l2% l2% ll% ll% 5% 4%
Share Pre,"$, - - - - - 7% l0% l2%
E,p%o7ee share opt"on #o,pensat"on
reser:e
- - - - - 0% 0% l%
Reser:es ; #ap"ta% - l% - - - - - -
; re:en$e = genera% 3l% 27% 32% 34% 3l% 28% l2% 7%
; he)g"ng 0% 0% 0% 0% 0% 0% 3% 4%
&nappropr"ate) pro'"t 0% 0% 0% 5% l0% l4% ll% ll%
TOTAL SHE 2.> 15> 22> 3/> 3.> 3?> 20> 16>

NON C&RRENT LIABILIITES
Re)ee,a*%e Cap"ta% ( a##r$e) ,ark $p 20% 20% 2l% 20% 20% ll% - -
Long ter, %oans 4% 4% 4% - - - 40% 46%
Der":at":es - - - - - - - 2%
E,p%o7ee Ho$s"ng S$*s")7 - - - - - - - 0%
L"a*"%"t7 aga"nst asset s$*@e#t to '"nan#e
%ease
- - - 0% 0% - - -
De'erre) Ta+at"on 6% 6% 7% 7% 7% 7% 5% 4%
Ret"re,ent ( Other ser:"#e *ene'"ts l% l% l% l% 0% 0% 0% 0%
TOTAL NON-CURRENT LlABlLlTlES 1.> 1/> 11> .5> .6> 0?> 24> 3.>

C&RRENT LIABILITIES
C$rrent port"on o'
; re)ee,a*%e #ap"ta% ( a##r$e) ,ark;$p 3% 4% 5% 8% 5% 7% - -
; %ong ter, %oans 2% 2% - 5% - - 3% 0%
; %"a*"%"t7 aga"nst asset s$*@e#t to
'"nan#e %ease
- - - 0% 0% 0% 0% 0%
; other ser:"#e *ene'"ts 0% 0% 0% 0% 0% 0% 0%
Short ter, *orrow"ngs 5% 8% 3% 0% 0% 8% 3%
Cre)"tors8 a##r$e) ( other %"a*"%"t"es l3% l5% l0% 9% l4% 7% l0% 6%
&n#%a",e) )":")en)s - - - 0% l% l% l% l%
Ta+at"on - - l% 0% 0% 0% - -
Propose) )":")en) 4% 3% 4% - - - - -
TOTAL C&RRENT LIABILIITES .4> 1.> .1> .1> ./> .1> 02> 0/>

TOTAL LIABILIITES 36> 41> 34> 3/> 26> 20> 3?> 4.>

TOTAL SHAREHOLDERAS EB&ITC ( 0//> 0//> 0//> 0//> 0//> 0//> 0//> 0//>
Page 22
LIABILITIES
Assets:
During 2005 to 2007 there was a decrease in plant assets however it has increased in 2008 to 55% of
total assets. This is due to the impact of expansion which will come online in 20l0
Long term investments of the firm have also shown an increasing during the last three years.
Another important feature is the decline in receivables. The company might have tightened its credit
policy as result there aren't many receivables in 2008
During the last two years cash balance have fallen tremendously. This shows that the company does not
want to hold excess cash.
E9$"t7:
The paid up capital contribution has declined over the last couple of years. This shows that the firm is
reluctant to issue more capital. Some possible reasons are payment of dividends to shareholders.
The share premium account of a company is the capital that a company raises upon issuing shares that
is in excess of the nominal value of the shares. ln the last three years Engro has benefitted greatly from
share premium which is expanding the size of it balance sheet.
Unappropiated profit is another important dimension inequity section of the balance sheet. lts
contribution is increasing over the years. This is the retained earning balance which the company is
carrying for expansion and contingencies.
L"a*"%"t"es:
We seen an increasing trend in non-current liabilities. The major contributor is long term loan.
Redeemable capital means shares that are issued for urgent need of funds. The firm retired its
redeemable capital in 2007 and took long term loans which have the highest portion in 2007 & 2008.
Page 23
0OR"#ONTA AN(%"%
"ncome %tatement
.//0 .//. .//1 .//2 .//3 .//4 .//5 .//6
Net sa%es l00% l33% l48% l56% 222% 2l4% 282% 284%
Cost o' sa%es l00% l34% l52% l74% 262% 244% 333% 3l3%
GROSS PROFIT l00% l29% l4l% ll9% l43% l55% l79% 226%
e+penses
l00% l23% l32% l03% l26% l47% l63% l65%
Other Operat"ng In#o,e - - - - - - - -
Pro'"t Fro, Operat"ons l00% l34% l46% l29% l52% l59% l89% 26l%
Other "n#o,e l00% ll7% l97% 28l% 577% 674% 922% l387%
l00% l32% l5l% l44% l96% 2l2% 264% 377%
Less : F"nan#e Charges l00% 89% 58% 29% 44% 56% 83% 234%
Other #harges l00% l5l% 237% -293% -287% 295% 348% 594%
l00% 97% 8l% 64% -76% -87% -ll8% -28l%
Pro'"t Be'ore Ta+at"on l00% l54% l95% l94% 270% 289% 356% 437%
TA-ATION l00% 552% 603% 554% 708% 705% 850% 758%
Pro'"t a'ter Ta+at"on l00% l06% l46% l5l% 2l8% 239% 296% 399%

Sales have increased over the years. One important trend that we have seen is the increase in COGS
& Sales is not showing the same trend i.e. cost of production has increased over the years. The firm in
2008 insisted on controlling its COGS which is a positive step as there isn't any remarkable increase in
sales but a drastic decline in COGS
As a result of above mentioned steps we have seen an increase in profit from operations in 2008.
Profit from operations has been increasing widely over the years. Analyzing its notes that profits from
workers participation fund and workers welfare fund are the major contributor.
The finance charges have increased in 2008 owing mostly to interest payments on short term
borrowing
Taxation grew five times in 2002 but then it grew steadily, however in 2008 it shoes a decline in growth
compared to 2007
Page 24
Net lncome has been increasing throughout the eight years. ln 2008 it showed a strong growth due to
better cost control strategies and higher profit from operations.
Page 25
Balance %.eet
.//0 .//. .//1 .//2 .//3 .//4 .//5 .//6
NON CURRENT ASSETS
Propert78 p%ant an) e9$"p,ent l00% l05% l03% l03% l00% 96% 20l% 487%
Intang"*%e assets - - - - - - - -
Long ter, "n:est,ents l00% l00% l06% l06% l62% 273% 579% 828%
e+pense

De'erre) e+pen)"t$re l00% l34% 75% - - - - -
Long ter, %oans8 a):an#es an) other
re#e":a*%es "n#%$)"ng )er":at":es
l00% 7l% 49% 34% 43% 42% 33% l70%
Contra#t
- - - - - - - -
TOTAL NON-CURRENT ASSETS l00% l06% l03% l02% l08% l22% 259% 534%

CURRENT ASSETS
Stores8 spares an) %oose too%s l00% l0l% 96% l00% ll3% ll7% l26% l62%
Sto#k "n tra)e l00% l8l% 9l% ll4% 453% 2l7% 633% ll02%
Leaseho%) %an) he%) 'or sa%e - - - - - - - -
Tra)e )e*ts l00% l24% l5l% l23% l28% l47% 332% 62%
e+pense
- - - - - - - -
prepa7,ents
l00% l39% 89% 267% 20l% 233% 497% l060%
)er":at":es
l00% 4l% 2l% 25% 92% 385% 9l0% l949%
C$rrent Port"on o' Fore"gn E+#hange
R"sk Ins$ran#e #ontra#t
- - - - - - - -
Ta+at"on l00% 34% 32% l07% l24%
Short ter, "n:est,ents l00% l08% ll0% l24% 20% 33% 884% l0%
Cash ( *ank *a%an#es l00% 230% l76% l54% l22% l93% l73% l80%
TOTAL CURRENT ASSETS l00% l35% l05% ll5% l25% l42% 409% 382%
- - - - - - - -
TOTAL ASSETS l00% ll5% l04% l06% ll4% l29% 307% 485%
Page 26

200l 2002 2003 2004 2005 2006 2007 2008
SHARE CAPITAL
A$thor"e) l00% l00% l00% l00% l00% l00% l50% l50%
Iss$e)8 s$*s#r"*e) ( pa");$p l00% l00% ll0% ll0% ll0% l2l% l39% l53%
Share Pre,"$, - - - - - - - -
reser:e
- - - - - - - -
Reser:es ; #ap"ta% - - - - - - - -
; re:en$e = genera% l00% 99% l07% ll5% ll5% ll5% ll5% ll5%
; he)g"ng
&nappropr"ate) pro'"t l00% l26% 93% ll873
%
26820
%
4l457
%
77652
%
l308l8
%
TOTAL SHE l00% l02% l08% l26% l4l% l79% 295% 44l%
Re)ee,a*%e Cap"ta% ( a##r$e) ,ark $p l00% ll4% l08% l05% ll7% 73% - -
Long ter, %oans l00% 96% l09% - - - 29l6% 5248%
Der":at":es - - - - - - - -
E,p%o7ee Ho$s"ng S$*s")7 - - - - - - - -
L"a*"%"t7 aga"nst asset s$*@e#t to '"nan#e
%ease
- - - - - - - -
De'erre) Ta+at"on l00% lll% l09% l24% l29% l45% 25l% 3ll%
Ret"re,ent ( Other ser:"#e *ene'"ts l00% l06% l20% 44% 28% 26% 25% 28%
TOTAL NON-CURRENT LlABlLlTlES l00% lll% l09% 92% l00% 76% 444% 795%
C&RRENT LIABILITIES
C$rrent port"on o' - - - - - - - -
; re)ee,a*%e #ap"ta% ( a##r$e) ,ark;$p l00% l83% l72% 3l8% 20l% 3l8% - -
; %ong ter, %oans l00% l29% - 30l% - - 659% 39%
'"nan#e %ease
- - - - - - - -
; other ser:"#e *ene'"ts - - - - - - - -
Short ter, *orrow"ngs l00% l93% 55% - - 223% - 294%
Cre)"tors8 a##r$e) ( other %"a*"%"t"es l00% l27% 79% 75% ll9% 66% 227% 235%
&n#%a",e) )":")en)s - - - - - - - -
Ta+at"on - - - - - - - -
Propose) )":")en) l00% l00% ll0% - - - - -
TOTAL C&RRENT LIABILIITES 0//> 020> ?/> ?.> 64> 00.> 04.> 062>
; ; ; ; ; ; ; ;
TOTAL LIABILIITES 0//> 0.3> 0//> ?.> ?2> ?.> 104> 306>
; ; ; ; ; ; ; ;
TOTAL SHAREHOLDERAS EB&ITC (
LIABILITIES
0//> 003> 0/2> 0/4> 002> 0.?> 1/5> 263>
Page 27
Assets:
Engro fixed assets have increased sharply in 2007 & 2008, depicting firm's strategy to acquire fixed
assets for future growth. Also Engro had made significant investments in long term investments in order
to earn from long term projects.
One important development is in the account of long term, loans, other receivables including derivatives
account. The rupee amount declined from 2002-07 but it showed an increase in 2008.
ln the last two years we see a significant rise in Stock in Trade account. This is due to larger inventory
levels which the firm is carrying.
Engro loans, advances and prepayments also have increased sharply due to early payments of its
expenses that will be realized later.
The cash and bank balances have shown a fixed trend over the years. lt seems that the firm does not
have a clear policy towards the level of cash.
Fixed Assets have increased more compared to current assets in percentage amount
E9$"t7:
ln shareholder's equity there is one thing which catches our attention and that is the unappropriated
profit account. The firm retained earning balance has increased rapidly over the years.
The total value of equity has risen by four times in eight years. This is not a significant increase
considering the overall growth of Engro.
L"a*"%"t"es:
Analyzing non-current liabilities we see a policy shift from equity to debt as principle source of
financing. As the company retired its long term loans 2005-06. However to finance its expansions the
firm took large amount of long term loans.
Non-current liabilities have increased eight times from 200l.
During the last two years, creditors and accrued liabilities account has doubled.
Page 28
Component Percentage Analysis
"ncome %tatement
200l 2002 2003 2004 2005 2006 2007 2008
Net sa%es l00% l33% ll2% l05% l43% 96% l32% l0l%
Cost o' sa%es l00% l34% ll3% ll5% l5l% 93% l37% 94%
GROSS PROFIT l00% l29% l09% 85% l20% l08% ll6% l26%
e+penses
l00% l23% l08% 78% l23% ll7% lll% l0l%
Other Operat"ng In#o,e - - - - - - - -
Pro'"t Fro, Operat"ons l00% l34% l09% 88% ll8% l04% ll9% l38%
Other "n#o,e l00% ll7% l69% l42% 205% ll7% l37% l50%
l00% l32% ll4% 95% l36% l08% l25% l43%
Less : F"nan#e Charges l00% 89% 65% 5l% l5l% l27% l47% 282%
Other #harges l00% l5l% l57% -l23% 98% -l03% ll8% l7l%
Pro'"t Be'ore Ta+at"on l00% l54% l27% l00% l39% l07% l23% l23%
TA-ATION l00% 552% l09% 92% l28% l00% l20% 89%
Pro'"t a'ter Ta+at"on l00% l06% l37% l03% l44% ll0% l24% l35%
The net sales of the company have increased just a percent in 2008, depicting the lack of demand and
the cut throat competition.
The firm has controlled its cost of sales as well as selling & distribution expenses this year
The finance charges have significantly increased this year due to heavy short term as well as long term
loans and the rising cost of raising debt in the country in 2008.
The taxation cost on year on year basis in 2008 due to lower deferred tax in the year.
As a result the bottom line of the firm has shown improvement over the preceding year.
Page 29
BAANCE %0EET
200l 2002 2003 2004 2005 2006 2007 2008
NON C&RRENT ASSETS
Propert78 p%ant an) e9$"p,ent l00% l05% 99% l00% 96% 96% 2ll% 242%
Intang"*%e assets - - - - 2l8% 84% 74l% 92%
Long ter, "n:est,ents l00% l00% l06% l00% l53% l68% 2l2% l43%
e+pense
De'erre) e+pen)"t$re l00% l34% 56% - - - - -
Long ter, %oans8 a):an#es an) other
re#e":a*%es "n#%$)"ng )er":at":es
l00% 7l% 70% 69% l26% 96% 78% 524%
Contra#t
- - - - - - - -
TOTAL NON;C&RRENT ASSETS l00% l06% 97% 99% l06% ll3% 2ll% 207%
C&RRENT ASSETS
Stores8 spares an) %oose too%s l00% l0l% 95% l04% ll3% l03% l08% l29%
Sto#k "n tra)e l00% l8l% 50% l26% 397% 48% 29l% l74%
Leaseho%) %an) he%) 'or sa%e - - - - - - - -
Tra)e )e*ts l00% l24% l22% 82% l04% ll5% 226% l9%
e+pense
prepa7,ents
l00% l39% 64% 299% 76% ll5% 2l3% 2l3%
)er":at":es
l00% 4l% 5l% ll8% 368% 420% 236% 2l4%
C$rrent Port"on o' Fore"gn E+#hange
R"sk Ins$ran#e #ontra#t
- - - - - - - -
Ta+at"on l00% 34% - - - - - ll6%
Short ter, "n:est,ents l00% l08% l02% ll3% l6% l66% 2693% l%
Cash ( *ank *a%an#es l00% 230% 77% 87% 79% l58% 90% l04%
TOTAL C&RRENT ASSETS l00% l35% 78% l09% l09% ll3% 288% 93%
TOTAL ASSETS l00% ll5% 90% l02% l07% ll3% 239% l58%
Page 30

200l 2002 2003 2004 2005 2006 2007 2008

SHARE CAPITAL
A$thor"e) l00% l00% l00% l00% l00% l00% l50% l00%

Iss$e)8 s$*s#r"*e) ( pa");$p l00% l00% ll0% l00% l00% ll0% ll5% ll0%
Share Pre,"$, - - - - - - 37l% l80%
reser:e
- - - - - - - -
Reser:es ; #ap"ta% - - - - - - - -
; re:en$e = genera% l00% 99% l09% l07% l00% l00% l00% l00%
; he)g"ng - - - - - - - 208%
&nappropr"ate) pro'"t l00% l26% 74% l2804
%
226% l55% l87% l68%
TOTAL SHE l00% l02% l06% ll6% ll2% l27% l65% l49%

Re)ee,a*%e Cap"ta% ( a##r$e) ,ark $p l00% ll4% 94% 97% ll2% 62% - -
Long ter, %oans l00% 96% ll4% - - - - l80%
Der":at":es - - - - - - - -
E,p%o7ee Ho$s"ng S$*s")7 - - - - - - - -
L"a*"%"t7 aga"nst asset s$*@e#t to
'"nan#e %ease
- - - - - - - -
De'erre) Ta+at"on l00% lll% 98% ll4% l04% ll2% l73% l24%
Ret"re,ent ( Other ser:"#e *ene'"ts l00% l06% ll4% 36% 63% 96% 94% ll5%
TOTAL NON;C&RRENT LIABILITIES l00% lll% 98% 85% l09% 75% 587% l79%

C&RRENT LIABILITIES
C$rrent port"on o'
; re)ee,a*%e #ap"ta% ( a##r$e) ,ark;
$p
l00% l83% 94% l85% 63% l58% - -
; %ong ter, %oans l00% l29% - - - - - 6%
'"nan#e %ease
- - - - l07% l04% 0% -
; other ser:"#e *ene'"ts - - l24% 96% 90% 8l% ll3% 99%
Short ter, *orrow"ngs l00% l93% 29% 0% - - - -
Cre)"tors8 a##r$e) ( other %"a*"%"t"es l00% l27% 62% 95% l59% 55% 347% l03%
&n#%a",e) )":")en)s - - - - l82% l06% 234% l65%
Ta+at"on - - - 0% - l67% - -
Propose) )":")en) l00% l00% ll0% - - - - -
TOTAL C&RRENT LIABILIITES l00% l4l% 64% l02% 94% l30% l45% ll4%

TOTAL LIABILIITES l00% l25% 80% 92% l02% 98% 343% l64%

TOTAL SHAREHOLDERAS EB&ITC (
LIABILITIES
l00% ll5% 90% l02% l07% ll3% 239% l58%
Page 3l
Assets
ln the last two years Engro has invested heavily into plant & equipment as we see in 2007 & 2008 its
amount has doubled.
Firm has invested actively in long term investments. This shows the approach of the firm to have an
income stream from other sources on a growing basis.
One notable aspect in the asset side is the low levels of receivables in the latest year which signifies a
change in collection structure of the firm as it might be discounts and other items to lure creditors to
convert receivables into cash quickly
ln recent years there has been a significant rise in advances, prepayments & deposits.
ln 2008 there is a drastic decline in Engro's short term investments. This may by due to lower return on
them & a change in policy decision to invest in long term investments
The firm is not maintaining high levels of cash balances and has enough cash to just meet its
operational requirements.
E9$"t7
During the last three years, company has issued share to raise equity but this is not insignificant
compared to the increase in debt in these years.
Engro is retaining a large amount of its earning and not paying it out as dividends, this will have an
impact on dividend payout ratio. Also investors won't be happy with this policy.
L"a*"%"t"es
After seeing a declining trend in long term liabilities from 2003 to 2006, Engro has again resorted to
debt to finance its expansions and meet its operational requirements.
The level of current liabilities has increased during the last couple of year but less compared to long
term liabilities. lt seems that company is contended with long term borrowing than short term maybe
because of the higher interest charges on long term liabilities or the Engro might be unable to utilize
short term liabilities.
Page 32
Component Analysis according to Pakistani R*pees
"ncome %tatement
The sales of Engro have increased over the years at a good pace however in 2008 we don't see any
remarkable improvement.
The cost of sales have shown a slide which shows that the company in 2008 focused on controlling its
cost structure and made many adjustments to it. Same is true for selling & administrative expenses
which has shown just a slight increase.
Although Engro has benefitted greatly from Other income however the impact of this was nullified due
to rising finance charges
Engro hasn't been hurt much due to its taxes as its tax structure has remained somewhat consistent
around 25%
Balance %.eet
Assets:
The amount spent on plant & machinery has increased dramatically over the last two years as Engro
has invested a lot in its expansions.
Long term investments have been on the rise as Engro has invested in its subsidiaries.
There has been a rise in inventory levels however the trade debt have declined considerably
E9$"t7:
Engro is increasing its equity position by issuing more shares to the general public
Engro retained earning value has been increasing as the firm is building its reserves
Liabilities
We are seeing an enormous rise in the long term loans during the last couple of years.
Also a tremendous rise in creditors and accrued liabilities is seen
Page 33
Page 34
Cear Engro In)$str7

.//0 l.23 l.62
.//. l.l7 2.94
.//1 l.44 2.09
.//2 l.54 2.l5
.//3 l.79 l.99
.//4 l.56 l.27
.//5 3.ll 2.09
.//6 2.55 l.9l
"1U"+"T( RAT"O%
CURRENT RAT"O
lt is a Balance Sheet Ratio.
lt indicates the firm's ability to cover its current liabilities
with its current assets.
Interna% Ana%7s"s:
Engro's current ratio has shown a growth considering the eight
years. This persistent growth in the ratio has been due to a
gradual rise in the level of current assets as Engro is keeping
higher levels of inventory and there are more advances, loans &
prepayments.
The decline in 2008 is attributed to a decrease in levels of trade
debts.
E+terna% Ana%7s"s:
ln external analysis we compare Engro with the other firms in the
fertilizer sector. Last three years have witnessed an increase in
the liquidity of Engro in comparison to the industry. Engro has
changed its approach towards higher liquidity to meets its
operating requirements.
F"n)"ngs:
Engro is well placed to meet its obligations
Formula
CURRENT ASSETS
CURRENT LIABILITIES
Formula
CURRENT ASSETS
CURRENT LIABILITIES
Page 35
0.00
0.50
l.00
l.50
2.00
2.50
3.00
3.50
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
0.00
0.50
l.00
l.50
2.00
2.50
3.00
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Vdvdvd
Cear Engro In)$str7
.//0 0.92 l.45
.//. 0.88 2.72
.//1 l.l2 l.90
.//2 l.l8 2.0l
.//3 0.87 l.67
.//4 l.l2 l.08
.//5 2.46 l.8l
.//6 l.6l l.59
LlQUlDlTY RATlOS
1U"C' RAT"O
lt indicates the firm's ability to meet its current liabilities
with its most liquid assets i.e. excluding lnventory.
Interna% Ana%7s"s:
Engro's quick ratio has shown variability over the past eight
years and its difficult to analyze any trend. Since the firm is
having sizable amount of inventory over the last several years,
its significant impact is seen in this ratio. The ratio has decline in
the year 2008 but its still within the acceptable range.
E+terna% Ana%7s"s:
ln the first five years Engro, quick ratio was below the industrial
average which posed a question on the firm's ability to meet its
current obligations with its liquid current assets. However the
picture has change considerably from FY05 and the firm's
liquidity position has enhanced.
F"n)"ng:
The firm is at par with the industry and quite capable of meeting
its current obligations.
Formula
CURRENT ASSETS -
INVENTORY
CURRENT LIABILITIES
Formula
CURRENT ASSETS -
INVENTORY
CURRENT LIABILITIES
Page 36
Page 37
0.00
0.20
0.40
0.60
0.80
l.00
l.20
l.40
l.60
l.80
2.00
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 0.9l l.28
.//. l.0l 2.67
.//1 l.46 l.7l
.//2 l.ll l.76
.//3 0.95 l.50
.//4 0.94 0.88
.//5 l.77 l.49
.//6 0.27 l.09
LlQUlDlTY RATlOS
CA%0 !O2 "1U"+"T( RAT"O
This ratio measures how well a company can handle
its short-term debt with its cash and other liquid assets
lt's a balance sheet / Cash flow statement ratio
Interna% Ana%7s"s:
This ratio touched its peak in 2007 as Engro witnessed high
growth due to booming demand in both local & export market.
However in 2008 the ratio has declined considerably in 2008 as
Engro cash flow from operating activities was negative. This
was due to:
Decline in cash generated from operations
lnterest paid has increased almost five times in FY08
due to expansions
Payment of long term loans and advances
E+terna% Ana%7s"s:
This ratio poses a significant question mark on the liquidity
picture of the firm .As in the past eight years Engro's cash flow
liquidity ratio has surpassed sector's ratio only six times which is
a real cause of concern. This shows that Engro may face
problem in meeting its current liabilities with cash and
marketable securities.
F"n)"ng:
Liquidity of Engro posed a rosy picture based on accrual basis
i.e. cash basis & accrual basis
Formula
CFO + CASH + MARKETABLE
SECURITIES
CURRENT LIABILITIES
Formula
CFO + CASH + MARKETABLE
SECURITIES
CURRENT LIABILITIES
Page 38
0
5
l0
l5
20
25
30
35
40
45
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 l9 25
.//. l7 26
.//1 l9 22
.//2 l5 40
.//3 ll l8
.//4 l3 l4
.//5 22 2l
.//6 4 4
LlQUlDlTY RATlOS
A/ERAGE COECT"ON PER"O+
lt is a Balance Sheet/lncome Statement Ratio.
lt indicates the average number of days firm's receivables
are outstanding
Interna% Ana%7s"s:
The average collection period has declined in 2008 this shows
that receivables were converted into cash in just four days. This
indicates that there has been a significant change in the firm
collection policy due to lesser amount of receivables as
compared to the previous year. This decline is primarily due to a
sharp decline in receivables as Engro might have tightened its
collection policy.
E+terna% Ana%7s"s:
Analyzing the industrial trend, it looks like from FY06 all the other
firms in the industry have followed Engro's tight receivable
policy. Although it looks like industry has become efficient in
collecting receivables but a tight stance might be hurting their
potential sales.
F"n)"ng:
Receivables of the industry have declined enhancing liquidity.
Formula
NET RECEIVABLES
AVERAGE SALES PER
DAY
Formula
NET RECEIVABLES
AVERAGE SALES PER
DAY
Page 39
Cear Engro In)$str7
.//0 67 39
.//. 67 36
.//1 4l 24
.//2 4l l8
.//3 65 33
.//4 43 32
.//5 68 54
.//6 ll9 48
LlQUlDlTY RATlOS
A/ERAGE "N/ENTOR( +A(%
lt indicates the average number of days before inventory
is turned into accounts receivable via sales.
Interna% Ana%7s"s:
Excluding FY08 Engro average inventory days on an average is
around sixty days, however this ratio has increased sharply in
2008 which indicates that the firm is not efficient in handling its
inventory and a sound policy is needed to decrease the number
of days. Engro must use the inventory efficiently to generate
sales in order to gain profits in the end. The prime reason for this
increase is the high value of inventory which Engro is currently
holding.
E+terna% Ana%7s"s:
A comparison with the industrial analysis reveals more shocking
picture. The other firms in the fertilizer sector are more efficient
in utilizing inventory; however this is a real cause of concern for
Engro.
F"n)"ng:
A high amount of inventory is causing the liquidity position to
deteriorate.
Formula
INVENTORY
AVERAGE DAILY COST OF GOODS
SOLD
Formula
INVENTORY
SOLD
Page 40
0
20
40
60
80
l00
l20
l40
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 27 65
.//. 26 58
.//1 l4 84
.//2 ll 89
.//3 l7 95
.//4 l4 67
.//5 9 83
.//6 8 72
LlQUlDlTY RATlOS
A/ERAGE PA(ABE +A(%
This ratio shows how many days it takes to pay accounts
payable
Interna% Ana%7s"s:
Over the course of eight years the numbers of days have
declined which shows the firm has enhanced its capacity to pay
off its suppliers. ln 2008 it just took eight days for Engro to pay its
account payable. Engro may be gaining valuable creditor
discounts by paying promptly. Engro's payable have decline
considerably
E+terna% Ana%7s"s:
lndustry's payable days are much more higher than Engro's .
This shows that Engro is much more efficient in paying off its
suppliers which is a unique sign. This can also have negative
repercussions as the firm may be wasting opportunities to earn
interest by holding cash as opposes by the industry.
F"n)"ng:
A really low payable days might be hurting Engro.
Formula
PAYABLES
SOLD
Formula
PAYABLES
SOLD
Page 4l
0
l0
20
30
40
50
60
70
80
90
l00
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
TURNO/ER 3 E!!"C"ENC( RAT"O%
RECE"/ABE TURNO/ER
lt indicates the firm's quality of receivables and how
successful the firm is in its collections.
Interna% Ana%7s"s:
The receivable turnover rate has shown a sharp increase in 2008.
lt shows that the firm is collecting its receivable quickly and in
2008. The average receivable of the firm is collected 89 times
during FY08 which is a positive sign. The reason for this increase
is the decline in account receivable due to tightening of credit
policy as discussed earlier.
E+terna% Ana%7s"s:
Engro's receivable turnover is moving in line with industry
average. ln FY08 whole of the industry witnessed an increase
which shows that firms have tighten their collection policy. Also
firms have created good relations with their borrowers.
F"n)"ng:
Engro has tightened its collection policy & receivable turnover is
moving in line with industry.
Formula
SALES
AVERAGE RECEIVABLES
Formula
SALES
AVERAGE RECEIVABLES
Page 42
0
l0
20
30
40
50
60
70
80
90
l00
200l2002 2003 20042005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 l9 l6
.//. 2l 23
.//1 l9 ll
.//2 24 l8
.//3 34 33
.//4 28 39
.//5 l6 24
.//6 89 89
TURNOVER / EFFlClENCY RATlOS
"N/ENTOR( TURNO/ER
lt indicates the firm's effectiveness of the inventory
management practices.
Interna% Ana%7s"s:
As denoted by the graph, Engro's inventory turnover has declined
over the years and in FY08 in touched its lowest levels since
FY0l. A deeper analysis reveals the culprit of the crime which is
inventory. ln the last two years Engro's cost of goods sold has
remained relatively steady however its inventory level
accumulated in FY08.
E+terna% Ana%7s"s:
Engro is lagging behind the industry in each and every year which
is a real worry and must be looked upon. ln Fy08 industry's
inventory turnover has increased however for Engro it has moved
in the opposite direction.
lt is expensive to maintain a large inventory and money (that may
be invested elsewhere) are tied up in inventories that are not
used.
F"n)"ng:
Engro is inefficient in utilizing its inventory.
Formula
COST OF GOODS SOLD
AVERAGE INVENTORY
Formula
COST OF GOODS SOLD
AVERAGE INVENTORY
Page 43
0.0
5.0
l0.0
l5.0
20.0
25.0
30.0
35.0
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 5.4 l0.2
.//. 5.4 l2.l
.//1 8.7 l6.2
.//2 8.9 29.7
.//3 5.5 l5.6
.//4 8.3 l3.3
.//5 5.3 l4.4
.//6 3.0 23.l
Formula
COST OF GOODS SOLD
AVERAGE PAYABLES
Formula
COST OF GOODS SOLD
AVERAGE PAYABLES
PA(ABE TURNO/ER
lt's a balance sheet/income statement ratio
Shows how many times in one accounting period the
company turns over (repays) its accounts payable to
creditors
Interna% Ana%7s"s:
Engro's payable days has been increasing gradually and
consistently over the years however the ratio dipped in FY05 but it
did recovered thereafter. An increasing number shows that the
firm is paying off its suppliers quickly over the years and trying to
have a lasting relationship with its suppliers.
E+terna% Ana%7s"s:
External analysis shows that Engro is paying off its suppliers at a
greater pace than the industry. Although it looks good but the
point is why is Engro following this approach when the industry is
taking longer. Maybe Engro wants to keep its suppliers happy or
its financial managers are missing an important aspect of utilizing
cash on short term securities.
F"n)"ng:
Engro is repays its creditors too quickly.
Page 44
0.0
5.0
l0.0
l5.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
200l20022003200420052006 20072008
Engro lndustry
Cear Engro In)$str7
.//0 l3.3 7.4
.//. l4.0 7.0
.//1 25.5 9.l
.//2 32.l l0.7
.//3 2l.0 7.5
.//4 26.3 9.7
.//5 39.9 l2.5
.//6 44.7 l4.3
Page 45
0.00
0.50
l.00
l.50
2.00
2.50
3.00
3.50
4.00
4.50
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 0.98 4.25
.//. l.23 3.l8
.//1 l.4l 2.84
.//2 l.49 2.4l
.//3 2.0l 2.63
.//4 l.7l 2.l7
.//5 l.07 2.05
.//6 0.52 2.48
!"$E+ A%%ET TURNO/ER
Measures the capacity utilization and the quality of fixed
assets
Interna% Ana%7s"s
Engro's fixed asset turnover has declined in the last three years
which shows that the firm is not utilizing its fixed assets effectively.
Some of the possible reasons for this decline are as follows:
Engro has been investing heavily into fixed assets due
to expansions.
Engro might have idle capacity.
Low sales
E+terna% Ana%7s"s:
Engro fixed asset utilization rate lags far behind the industry which
is a cause of concern. This shows that Engro has the fixed assets
but can't utilize them. Engro utilization rate has declined in FY08
as opposed to the industry's ratio which has increased.
F"n)"ng:
Engro lags far behind the industry.
Formula
SALES
FIXED ASSETS
Formula
SALES
FIXED ASSETS
Page 46
0.00
0.20
0.40
0.60
0.80
l.00
l.20
l.40
200l20022003200420052006 20072008
Engro lndustry
Cear Engro In)$str7
.//0 0.66 0.63
.//. 0.76 0.53
.//1 0.95 0.58
.//2 0.97 0.63
.//3 l.30 0.76
.//4 l.l0 0.74
.//5 0.6l 0.54
.//6 0.39 0.55
TOTA A%%ET TURNO/ER
lt indicates overall effectiveness of the firm in utilizing
its assets to generate sales.
Interna% Ana%7s"s:
Engro's internal analysis reveals a decline in total asset utilization
rate. This shows that Engro effectiveness has decline in utilizing
its total assets to generate sales. Engro's assets have increased
tremendously over the past three years; however its impact on
income statement is not seen yet.
E+terna% Ana%7s"s:
Engro's turnover did falls behind the industry in FY08. On a closer
look there is something interesting by analyzing fixed asset & total
asset turnover i.e. the industry's ratio fell sharply in total asset
turnover and that to an extent that Engro had a higher total asset
turnover than the industry. This shows that other firms in the
industry are holding high level of current assets in relation to fixed
assets. On the other side Engro is keen on increasing its capacity
through expansions and investing in fixed assets.
F"n)"ng:
Engro total asset turnover has declined due to high level of fixed
assets.
Formula
SALES
TOTAL ASSETS
Formula
SALES
TOTAL ASSETS
Page 47
Cear Engro In)$str7
.//0 58% 27%
.//. 63% 54%
.//1 56% 53%
.//2 50% 52%
.//3 48% 50%
.//4 4l% 5l%
.//5 59% 55%
.//6 62% 58%
%O/ENC( 3 E/ERAGE RAT"O%
+EBT RAT"O
lt indicates the percentage of the firm's assets that are
financed through debt.
Interna% Ana%7s"s:
Engro debt ratio has seen an increasing trend in the last couple of
years. This increase means higher interest payment as we have
evident from the income statement. This leads to decreased
profits and as a result fewer amounts of dividends would be paid
to share holders.
This increase is primarily due to increase in non-current liabilities
especially long term loans which the firm might have taken to
finance its expansions and support its dropping sales.
E+terna% Ana%7s"s:
Engro's debt ratio is almost at par with the industry which shows
that debt is the preferred mode of financing in the industry
recently.
F"n)"ng:
Engro debt ratio has increased but is at par with the industry.
Formula
TOTAL DEBT
TOTAL ASSETS
Formula
TOTAL DEBT
TOTAL ASSETS
Page 48
0%
l0%
20%
30%
40%
50%
60%
70%
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 36% l3%
.//. 38% 30%
.//1 36% 25%
.//2 28% 25%
.//3 28% 2l%
.//4 l6% l7%
.//5 50% 33%
.//6 55% 36%
SOLVENCY / LEVERAGE RATlOS
ONG TER, +EBT TO CAP"TA"#AT"ON RAT"O
Shows the contribution of long term debt in permanent
financing of the firm.
Interna% Ana%7s"s:
The ratio has increased considerably over the years, indicating the
enhanced leverage position of Engro and in FY08 the proportion
of long term debt compared to available capital reached fifty five
percent and Engro has became more riskier.
E+terna% Ana%7s"s:
The sector's ratio is much lower than the Engro's ratio. One
possible reason for this drastic change might be that other firms in
the sector are opting for equity or meeting their obligations
through current assets.
F"n)"ng:
Engro has high contribution of long term debt in permanent
financing of the firm.
Formula
LONG TERM DEBT
LONG TERM DEBT + TOTAL
EQUITY
Formula
LONG TERM DEBT
LONG TERM DEBT + TOTAL
EQUITY
Page 49
0%
l0%
20%
30%
40%
50%
60%
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
SOLVENCY / LEVERAGE RATlOS
+EBT TO E1U"T( RAT"O
lt indicates the extent to which the firm is financed through
debt.
Interna% Ana%7s"s:
We see a particular trend regarding this ratio. The ratio declined
from FY02 to FY06 and then it started rising from FY07 to FY08.
However for this aggressive approach to finance its growth with
debt Engro had to bear higher interest expenses.
This shows that the preferred mode of financing is debt as it has
increased especially due to long term loans
E+terna% Ana%7s"s:
Although the sector's debt to equity ratio has increased but Engro
ratio is way beyond normal limits and the financial managers must
be concerned about it as it is hurting the earnings of the firm and
too much reliance on debt may drag the firm to bankruptcy.
F"n)"ng:
Engro is highly debt financed.
Formula
TOTAL DEBT
TOTAL EQUITY
Formula
TOTAL DEBT
TOTAL EQUITY
Page 50
0%
20%
40%
60%
80%
l00%
l20%
l40%
l60%
l80%
200l2002 200320042005200620072008
Engro lndustry
Cear Engro In)$str7
.//0 l37% 92%
.//. l68% l36%
.//1 l27% ll0%
.//2 l00% 9l%
.//3 9l% 92%
.//4 7l% 79%
.//5 l47% l22%
.//6 l6l% l29%
CO/ERAGE RAT"O%
T",E% "NTERE%T EARNE+
lt is an lncome Statement Ratio.
lt indicates the firm's ability to cover the interest charges.
Interna% Ana%7s"s:
Engro ratio has been on a declining trend over the past four years,
which is hampering its ability to meet interest charges over the
years. This can be attributed to a number of reasons:
l. borrowing has increased many folds
2. increase in capital expenditures
3. decline in EBlT due to low sales growth
E+terna% Ana%7s"s:
lndustrial analysis also shows a decline showing all the firms are
facing problems in covering their interest charges. However Engro
is facing interest expense as compared to others which can be a
concern for creditors
F"n)"ng:
Engro's ability to pay interest charges has declined.
Formula
OPERATING PROFIT
INTEREST EXPENSE
Formula
OPERATING PROFIT
INTEREST EXPENSE
Page 5l
0.00
5.00
l0.00
l5.00
20.00
25.00
200l2002 2003 200420052006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 2.69 20.l6
.//. 4.04 5.93
.//1 6.82 ll.53
.//2 ll.73 l5.58
.//3 9.2l ll.56
.//4 7.58 7.77
.//5 6.l3 6.22
.//6 3.0l 4.92
Page 52
0.00
5.00
l0.00
l5.00
20.00
25.00
30.00
200l2002 20032004200520062007 2008
Engro lndustry
Cear Engro In)$str7
.//0 3.27 23.3l
.//. 4.22 8.30
.//1 5.78 27.25
.//2 7.7l l3.43
.//3 9.7l l3.23
.//4 6.86 4.96
.//5 9.64 8.29
.//6 l.42 8.08
COVERAGE RATlOS
CA%0 CO/ERAGE RAT"O
lt is a Cash flow Statement Ratio.
Shows company's ability of the firm to cover its interest
payment on taxes
Interna% Ana%7s"s:
Engro had a stable cash coverage ratio till FY07. However the
ratio has declined significantly in FY08 . So the efficiency of Engro
to cover its interest payments on taxes by cash has been
hampered and the firm is at risk to pay its interest & tax
obligations. This decline is due to negative cash flow in FY08 and
high interest payments.
E+terna% Ana%7s"s:
As compared to the industry average Engro is quiet incompetent
as industry average is much higher than Engro.
F"n)"ng:
Engro cash coverage ratio is declining
Formula
CFO + INTEREST PAID +
TAXES PAID
INTEREST PAID
Formula
CFO + INTEREST PAID +
TAXES PAID
INTEREST PAID
Page 53
Cear Engro In)$str7
.//0 0.76 0.76
.//. 0.88 l.l2
.//1 0.83 0.76
.//2 0.57 l.52
.//3 0.56 l.20
.//4 0.64 0.25
.//5 0.l4 0.25
.//6 -0.0l l.22
COVERAGE RATlOS
2. CASH FLOW ADEQUACY RATlO
Formula
CASH FLOW FROM OPERATIONS
DIVIDENDS PAID + CAPITAL EXPENDITURE + DEBT
REPAYMENT
Formula
CASH FLOW FROM OPERATIONS
DIVIDENDS PAID + CAPITAL EXPENDITURE + DEBT
REPAYMENT
COVERAGE RATlOS
CA%0 !O2 A+E1UAC( RAT"O
lt is a Balance sheet/Cash flow Statement Ratio.
Shows Company's ability of the firm to pay its dividends,
capital expenditure and debt repayment from the cash
generated from their operations.
Interna% Ana%7s"s:
Engro's internal reveals a desperate picture as the ratio is
declining. And Engro is facing difficulties for the payment of debt,
capital expenditure and debt repayment. ln 2008 Engro had a
negative cash flow from operations. This is a significant problem
and requires considerate attention.
E+terna% Ana%7s"s:
The industry has become efficient in meeting its dividends
repayments, capital expenditure and debt repayment obligations.
This also shows industry has a positive cash flow from operations,
however Engro doesn't.
F"n)"ng:
Cash flow adequacy ratio varies significantly from the industry.
Page 54
-0.20
0.00
0.20
0.40
0.60
0.80
l.00
l.20
l.40
l.60
200l 2002 2003 2004 2005 200620072008
Engro lndustry
Cear Engro In)$str7
.//0 33% 30%
.//. 33% 34%
.//1 32% 3l%
.//2 26% 30%
.//3 2l% 32%
.//4 24% 3l%
.//5 2l% 33%
.//6 27% 35%
PRO!"TAB""T( RAT"O%
GRO%% PRO!"T ,ARG"N
lt indicates the firm's efficiency of operation and its
pricing policies.
Interna% Ana%7s"s:
Engro's gross profit margin has shown a mixed trend over the
years. ln Fy08 the ratio increased to 27%. The reasons behind the
increase are:
A decline in COGS as the company has been able to
control costs
The company has also raised prices of some of its
products.
E+terna% Ana%7s"s:
Engro falls short of industry average in the case of gross profit
margin. Engro's ratio may have improved this year but it still lags
the sector. The company is trying to control costs and raise its
sales which are the right thing to do.
F"n)"ng:
Engro is not efficiently utilizing its operations.
Formula
GROSS PROFIT
NET SALES
Formula
GROSS PROFIT
NET SALES
Page 55
0%
5%
l0%
l5%
20%
25%
30%
35%
40%
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
PROFlTABlLlTY RATlOS
OPERAT"NG ,ARG"N
A ratio used to measure a company's pricing strategy
and operating efficiency.
Interna% Ana%7s"s:
As expected Engro's operational efficiency has increased.
However it has varied over the last eight years which shows that
managers aren't able to control expenses. Operating margin is a
measurement of what proportion of a company's revenue is left
over after paying for variable costs of production such as wages,
raw materials, etc.
E+terna% Ana%7s"s:
Engro is way behind the industry which shows it only has l9% of
its sales left to pay for interest & tax obligations as compared to
industry's 28%. Also Engro's is paying more in operating
expenses than the industry as ratio falls from a GP margin of 27%
tol9% in operating margin i.e. a decline of 9% whereas that of
industry is 7%.
F"n)"ng:
Engro has higher operating expenses than the industry.
Formula
OPERATING PROFIT
NET SALES
Formula
OPERATING PROFIT
NET SALES
Page 56
0%
5%
l0%
l5%
20%
25%
30%
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 2l% l8%
.//. 2l% 24%
.//1 2l% 22%
.//2 l7% 26%
.//3 l4% 2l%
.//4 l6% 22%
.//5 l4% 26%
.//6 l9% 28%
NET PO!"T ,ARG"N
lt indicates the firm's profitability after taking into
account all the expenses and income taxes.
Interna% Ana%7s"s:
An internal analysis reveals a positive picture for Engro. This ratio
has been on an increasing trend over the years which are a
positive sign for investors. The major reasons for an increase in
2008 are:
High levels of Other income
A reduction in tax charges in 2008
E+terna% Ana%7s"s:
Engro has been significantly lagging behind the industry in
generating net profit out of sales. The prominent reason for the
decline is low operating margin. However has increased its net
profit margin this year and may be at par nest year.
F"n)"ng:
Engro's profitability has peaked in FY08 but still lags the industry.
Formula
NET PROFIT
NET SALES
Formula
NET PROFIT
NET SALES
Page 57
0%
l0%
20%
30%
40%
50%
60%
70%
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 l3% 2%
.//. l0% 2l%
.//1 l3% 24%
.//2 l3% 23%
.//3 l3% 34%
.//4 l4% 25%
.//5 l4% 64%
.//6 l8% 23%
Page 58
-5%
0%
5%
l0%
l5%
20%
25%
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 l6% l2%
.//. l6% l6%
.//1 l5% 20%
.//2 8% 22%
.//3 8% 20%
.//4 8% 7%
.//5 7% l4%
.//6 -l% 3%
CA%0 !O2 ,ARG"N
lt is an lncome Statement/cash flow statement ratio.
Measures of how efficiently a company converts its
sales dollars to cash
Interna% Ana%7s"s:
Engro's cash flow margin has shown a trend opposite to its net
profit margin. Since expenses and purchases of assets are paid
from cash, this is an extremely useful and important profitability
ratio. So Engro has less cash available from sale. A negative ratio
indicates that even as Engro is generating sales revenue, it is
losing money. The company will have to borrow money or raise
money through investors in order to keep on operating. This is real
cause of concern. . This may be due to higher finance charges
that Engro has paid in 2008
E+terna% Ana%7s"s:
The external analysis shoes a mixed trend. ln 2008 firms ability to
convert its cash into sales has declined sharply. The picture
looked good on accrual basis however it has changed sharply o
cash basis
F"n)"ng:
Engro is losing money in generating sales revenue.
Formula
CASH FLOW FROM
OPERATIONS
NET SALES
Formula
CASH FLOW FROM
OPERATIONS
NET SALES
Page 59
0%
5%
l0%
l5%
20%
25%
30%
35%
40%
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 20% l8%
.//. 2l% 24%
.//1 27% 24%
.//2 24% 25%
.//3 3l% 33%
.//4 27% 28%
.//5 20% 37%
.//6 l8% 29%
RETURN ON E1U"T(
lt is an lncome Statement/balance sheet ratio.
lt indicates the firm's profitability to the shareholders of
the firm after taking into account all the expenses and
taxes
Interna% Ana%7s"s:
The return on equity has lowered in 2008. This is an alarming
situation for the firm and for the shareholders. They are not getting
higher return on their investments. This can lead to loss of its
shareholders loss of its market share. Possible reason for this
decline is the increase in un-appropriated profit as these earnings
are not paid out as dividends but instead reinvested in the
business.
E+terna% Ana%7s"s
Engro's return on equity is below the industry which is a real
concern as industry is earning more on shareholders wealth than
the Engro. As the firm's net income is not growing in proportion to
its increasing equity. We must keep in mind the expansion taking
place at Engro, so it might be building up its reserve instead of
distributing it.
F"n)"ng:
Engros amount of net income returned as a percentage of shareholders
equity is lower than the industry.
Formula
NET INCOME
TOTAL EQUITY
Formula
NET INCOME
TOTAL EQUITY
Page 60
0%
2%
4%
6%
8%
l0%
l2%
l4%
l6%
l8%
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 9% l0%
.//. 8% l3%
.//1 l2% l2%
.//2 l2% l2%
.//3 l6% l5%
.//4 l6% l5%
.//5 8% l2%
.//6 7% l4%
RETURN ON A%%ET
lt is a Balance sheet/lncome statement ratio.
lt indicates the firm's profitability on the total assets of
the firm
Interna% Ana%7s"s:
Engro's return on asset has been declining over the past two
years .The firm is not getting enough return on its investments. lt
should utilize its assets in a better way in order to get a higher
return. Sales should be increased, costs should be minimized and
debt should be managed well in order to get a higher return. The
prime reason is the increasing size of Engro due to its expansions
as they haven't come online yet
E+terna% Ana%7s"s:
lndustry is earning twice as more on its assets than Engro which
is a real cause of concern and is eroding value from Engro's share
price. The financial managers have to take it into consideration
F"n)"ng:
Engro's profitability is half as that of industry.
Formula
NET INCOME
TOTAL ASSETS
Formula
NET INCOME
TOTAL ASSETS
Page 6l
-4%
-2%
0%
2%
4%
6%
8%
l0%
l2%
l4%
l6%
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 ll% 9%
.//. l2% 8%
.//1 l4% ll%
.//2 8% 9%
.//3 l0% 8%
.//4 9% 9%
.//5 4% 7%
.//6 0% -3%
CA%0 RETURN ON A%%ET
lt is a Balance sheet/cash flow statement ratio.
lt indicates the firm's cash generated on it assets
Interna% Ana%7s"s:
Engro's cash return on asset is declining. This can indicate a that
lower return is expected. This is because lower the ratio, lower the
cash available to Engro for reintegration into the company,
whether be it upgrades, replacements or other areas.
The decline in ratio in 2008 is due to increase in interest cost over
the year.
E+terna% Ana%7s"s:
Except for 2007 Engro was better placed than the industry. We
see in 2008 an industrial average of negative three percent. This
shows that industry is not generating any cash from its core
operation.
F"n)"ng:
Like the industry, Engro's cash return on asset is declining.
Formula
CASH FLOW FROM
OPERATIONS
TOTAL ASSETS
Formula
CASH FLOW FROM
OPERATIONS
TOTAL ASSETS
Page 62
0
5
l0
l5
20
25
30
35
40
45
50
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 7.65 ll.45
.//. 8.l5 l4.87
.//1 l0.l8 l8.35
.//2 l0.53 l7.35
.//3 l5.l6 26.94
.//4 l5.47 24.67
.//5 l7.l7 43.72
.//6 20.5 3l.58
,AR'ET RAT"O%
EARN"NG PER %0ARE
lt's a Balance Sheet/lncome Statement ratio.
The portion of a company's profit allocated to each
outstanding share of common stock
Interna% Ana%7s"s:
The earnings per share of the company which is considered as
the most important ratio by an investor has shown an increasing
trend over the eight years. Engro's income has raised steadily
over the years. As Engro has preferred debt over equity, we see
a rise in EPS.
E+terna% Ana%7s"s
EPS of Engro lags behind industry average. This tells that they
are not earnings on returned on the initial investment amount.
F"n)"ng
Formula
NET INCOME
NUMBER OF COMMON STOCK
OUTSTANDING
Formula
NET INCOME
NUMBER OF COMMON STOCK
OUTSTANDING
Page 63
0.00
2.00
4.00
6.00
8.00
l0.00
l2.00
200l2002 2003 200420052006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 6.80 4.l2
.//. 6.38 7.00
.//1 5.ll 9.24
.//2 4.94 l0.60
.//3 3.43 8.46
.//4 3.36 8.69
.//5 3.03 7.58
.//6 2.54 4.86
MARKET RATlOS
PR"CE TO EARN"NG RAT"O
lt is a Balance sheet ratio.
The P/E looks at the relationship between the stock price
and the company's earnings.
Interna% Ana%7s"s:
P/E ratio is a measure of how expensive a stock is. Over the
years Price to Earnings ratio of Engro has decline which shows
the market is not willing to pay more of Engro's share. This
indicates that the market does not have high hopes for the firms'
share. This declining P/E ratio presents a problem which by the
graph look those financial managers have overlooked
E+terna% Ana%7s"s:
lndustrial comparison represents a sharp contrast to Engro P/E
ratio over the years. During the last seven years Engro's P/E ratio
is lower than the industry which is not a good sign for the firm.
This show s that investors are willing to pay more for the stocks of
other listed Fertilizer Company.
F"n)"ng:
Engro P/E ratio is much lower than the industry.
Formula
PRICE PER SHARE
EARNING PER SHARE
Formula
PRICE PER SHARE
EARNING PER SHARE
Page 64
0%
l0%
20%
30%
40%
50%
60%
70%
80%
90%
l00%
200l 2002 20032004 2005 2006 20072008
Engro lndustry
Cear Engro In)$str7
.//0 85% 82%
.//. 86% 86%
.//1 79% 65%
.//2 8l% 64%
.//3 73% 64%
.//4 58% 62%
.//5 4l% 45%
.//6 29% 43%
MARKET RATlOS
+"/"+EN+ PA(OUT
lt's a balance sheet ratio
DPS shows how much the shareholders were actually paid
by way of dividends
Interna% Ana%7s"s:
The dividend payout for Engro is decreasing which is not a good
sign for investors as it will lower their confidence in the firm'
shares. The shareholders might offload their holding in Engro.
The effect of this is evident in retained earnings account which is
increasing heavily over the last couple of years.
E+terna% Ana%7s"s:
Over the course of many years firm has kept pace with industry
average but lost way in 2008. Net profit in dollar amount is
increasing over the years but Engro is not content with paying out
dividends instead its happy to build up its reserve.
F"n)"ng:
Engro dividend payout has decline in 2008
Formula
DIVIDEND PER SHARE
MARKET PRICE PER SHARE
Formula
DIVIDEND PER SHARE
MARKET PRICE PER SHARE
Page 65
0%
5%
l0%
l5%
20%
25%
30%
35%
200l 2002 2003 2004 2005 2006 2007 2008
Engro lndustry
Cear Engro In)$str7
.//0 l3% l3%
.//. 8% 7%
.//1 9% 7%
.//2 7% 30%
.//3 7% 5%
.//4 5% l6%
.//5 3% 2%
.//6 6% 4%
MARKET RATlOS
+"/"+EN+ ("E+
Shows the relationship between dividends and
company's earnings
Interna% Ana%7s"s:
Dividend yield is a way to measure how much cash flow you are
getting for each rupee in an equity position. Over the years we
have seen Engro's dividend yield stream to remain steady
showing an average of around seven percent. This is a positive
sign for an investor who has invested in Engro as it is a
confidence building measure. An investor will get a stable cash
flow stream by investing in Engro.
E+terna% Ana%7s"s:
The dividend yield of Engro has remained in par with industrial
average excluding a couple of years. However we see a declining
trend in the fertilizer sector. A reason for this may as these firms
like Engro might be expanding.
F"n)"ngs:
Engro dividend yield is at par with industry
Formula
DIVIDEND PER SHARE
EARNING PER SHARE
Formula
DIVIDEND PER SHARE
EARNING PER SHARE
Page 66
+UPONT ANA(%"%
F":e Co,ponent D"saggregat"on
Pro'"ta*"%"t7 T$rno:e
r
So%:en#7 ROE
Ta+es F"nan#"n
g
Operat"o
ns
Cear Net
In#o,e=E
BT
EBT=EBIT EBIT=Sa%e
s
Net
In#o,e=Sa%
es
Sa%es=Tota
% Assets
Net
In#o,e=Tot
a% Assets
Tota%
Assets=Co,,
on E9$"t7
Net
In#o,e=
Co,,on
E9$"t7
.//0 l.43 0.38 24% l3% 0.66 9% 2.37 20%
.//. l.57 0.28 23% l0% 0.76 8% 2.68 2l%
.//1 2.58 0.2l 24% l3% 0.95 l2% 2.27 27%
.//2 3.38 0.l7 22% l3% 0.97 l2% 2.00 24%
.//3 4.09 0.l5 2l% l3% l.30 l6% l.9l 3l%
.//4 3.92 0.l6 23% l4% l.l0 l6% l.7l 27%
.//5 3.6l 0.l7 22% l4% 0.6l 8% 2.47 20%
.//6 2.03 0.29 3l% l8% 0.39 7% 2.6l l8%
lncome tax burden has shown a mixed trend over the years. Taxes dont have a role in declining the
profitability of the firm. ln Engro's case its pretty high which shows its tax structure is not affecting its
profitability.
The impact of financing option is on Engro profitability and company has maintained it interest charges
in respect of its earnings. However we are seeing a rising trend in its operations which is a good trend
as firm is controlling its operations.
Engro asset turnover has decline over the year which shows its not utilizing its assets very well. We are
also a decline in return on asset. Sales should be increased, costs should be minimized and debt
should be managed well in order to get a higher return.
We have seen that solvency has increased in the last two years this indicates use of debt to finance
operations.
The return on equity (ROE) ratio is a measure of the rate of return to stockholders. As a result the
return on equity has declined. We now that the real cause of this decline is the declining return on asset
that causing the slide.
Page 67
"nsig.t for "n)estors
Engro is currently undergoing huge expansions and is a giant diversified conglomerate. As its expansions are
to come online in 20l0 we are witnessing a decline in its ratios particularly the turnover ratios and the return on
assets.
l would suggest investors not to lose faith in Engro and off load their holdings because of the following
reasons:
Engro's results are bound to improve in 20l0 due to expansion effect.
lt's a giant in its industry and will always look after its position in the industry
Engro's will to always stay ahead and give a tough time to its competitors
Page 68
!*t*re Pro4ections
Do,"nat"ng !arket Share
With current capacity of 975ktpa and a capacity utilization rate of over l00% achieved over the last few years,
Engro commands the 2nd largest market share in the domestic fertilizer market, catering to l9% of the local
urea market. The new plant is likely to bring in operational efficiencies in the form of reduced fuel consumption
and labor costs.
Shortage D Opport$n"t7 to #ap"ta%"eE
Pakistan currently faces a fertilizer shortage of l.lmntpa (CY07 demand of 6.8mntpa versus a supply of
5.7mntpa), and we expect this deficiency to continue till 20l0. Engro's expansion will ease the demand-supply
gap, but is not likely to create a supply glut. Pakistan's dependence on its agricultural output can be judged
from the fact that 20.l% of total GDP is contributed by this sector alone. Secondly, almost 4l% of total
workforce in the country earns their livelihood from agriculture related activity. With GDP assumed to grow at
6.5% in FY08 and over 6% in the medium term (next 5 years) we believe the demand for fertilizers will remain
strong going forward. Pakistan also has one of the lowest consumption of fertilizer per acre resulting in low
crop yields. With rising awareness, increasing crop prices and improving per capita income we believe fertilizer
usage per acre is set to rise, which bodes well with the fertilizer manufacturers.
&rea ; The ne+t DAPE
During CY07 global DAP prices witnessed an unprecedented appreciation, with prices surging from USD 288
per ton at the start of the year to reach an all time high level of over USD 700 per ton by Dec'07 (+l43% YoY).
Despite the increase in subsidy from PKR400 per bag to PKR 470 per bag by the government (GoP) in FY08
budget, the hike in price resulted in a 46.8% YoY decline in the offtake of the phosphatic fertilizer. The
escalating international prices have also been taken advantage of by the domestic dealers to manipulate the
situation for their own gains. According to MlNFAL (Ministry of
Food, Agriculture and Livestock) majority of the dealers despite receiving the subsidy from the State Bank of
Pakistan (SBP) have been selling DAP at a price of around PKR 2,000 per 50kg bag which is roughly the
international price of DAP.
ln the wake of high DAP prices; the consumer has started shifting to using urea, as is confirmed by NFDC.
Urea offtake has registered an increase of 0.7% YoY, while DAP has shown a decline of 36.4% YoY (Rabi
2007-08). We do not foresee DAP demand to rise over the next few years due to its high price unless the GoP
further enhances the subsidy. However, we believe, further increase in subsidy allocation carries slim chance
due to a widening budget deficit. Under this scenario the most likely beneficiary will be Engro. We expect urea
demand to grow robustly over the next few years with YoY growth averaging 4%-4.5% as a number of farmers
will revert to usage of urea instead of the expensive DAP.
In:est,ent "n S$*s")"ar"es
Engro has investments in a variety of businesses including chemical storage terminals, PVC resin
manufacturing, a power project and a dairy venture. We estimate payouts from subsidiaries to grow at a 5-year
CAGR of l6% (CY07-l2E) on the back of capacity expansions which are likely to come online during CY09-
llE.
Enhancement of Engro Vopak's storage capacity by 50% is likely to come online by CY09E. Engro Polymer
and Chemical Ltd's capacity is being increased by 50% given the strong demand of PVC pipes in Pakistan
for irrigation, electrical insulation etc.
Page 69
Engro Foods Ltd (EFL) has increased its milk processing capacity by 300% during CY07. Furthermore, the
company plans to invest another PKR 3.4bn over the next 2 years in establishing a dairy farm and
launching an ice cream venture.
Engro Energy has obtained Letter of Support (LoS) from PPlB for establishing a 220MW gas fired lPP at a
cost of USD 228mn which is likely to commence commercial operation in 2009. lPP projects yield low-risk
returns which will provide stable stream of revenues to the company going forward.
Page 70
Problems - t.eir %ol*tion
R"s"ng In:entor7 Le:e%s
Engro has increased its inventory levels, most notably in the last couple of years. As a result might be
incurring carrying and handling cost. The inventory levels should be reduced to control these costs.
Negat":e Cash F%ow 'ro, Operat"ons
For the first time in the last year Engro witnessed a negative cash flow. This shows that Engro is
loosing money on its operations. This is mainly due to higher interest charges which has to be controlled
&t"%"at"on o' Assets
Engro is inefficient in utilizing in assets. Part of this reason is the expansions which are underway at
Engro. However it lags the industry average. As in 2008 there was just a marginal increase in sales compared
to its increase in assets. This has to be taken into account.
R"s"ng De*t
Rising debt post another problem for Engro. The effect of this was evident in 2008 as Engro paid an
great interest charges. lssue equity
De#%"n"ng !arg"ns
Engro's profit margins have also declined. lt although has improved its operational efficiency but the
impact is not seen due to a small rise in assets
De#%"n"ng !arket <a%$e
Market ratios indicate that Engro's investors are losing their trust on the stock. However in must also be
kept in mind of the harsh economic enviourment in the last two years. But this is not alone the reason.
Engro is not paying its shareholders less dividends. lt has to pay more dividends
Page 7l
ANNE$URE
Ratios
.//0 .//. .//1 .//2 .//3 .//4 .//5 .//6
LIQUIDITY
C$rrent Rat"o l.23 l.l7 l.44 l.54 l.79 l.56 3.ll 2.55
B$"#k Rat"o 0.92 0.88 l.l2 l.l8 0.87 l.l2 2.46 l.6l
Cash F%ow L"9$")"t7 Rat"o 0.9l l.0l l.46 l.ll 0.95 0.94 l.77 0.27
A:erage Co%%e#t"on Per"o) l8.57 l7.39 l8.93 l4.70 l0.70 l2.75 2l.88 4.04
A:erage In:entor7 Da7s 66.70 67.ll 4l.26 40.50 64.88 43.42 67.63 ll8.55
A:erage Pa7a*%e Da7s 27.l2 25.69 l4.l0 ll.22 l7.l3 l3.7l 9.03 8.06
TURNOVER/EFFICIENCY
Re#e":a*%e T$rno:er l9.39 20.70 l9.0l 24.49 33.64 28.24 l6.46 89.l6
In:entor7 T$rno:er 5.40 5.36 8.72 8.89 5.55 8.29 5.32 3.04
Pa7a*%e T$rno:er l3.28 l4.0l 25.54 32.09 2l.02 26.26 39.87 44.68
F"+e) Asset T$rno:er 0.98 l.23 l.4l l.49 2.0l l.7l l.07 0.52
Tota% Asset T$rno:er 0.66 0.76 0.95 0.97 l.30 l.l0 0.6l 0.39
SOLVENCY/LEVERAGE
De*t Rat"o 58% 63% 56% 50% 48% 4l% 59% 62%
Long Ter, De*t To Cap"ta%"at"on
Rat"o
36% 38% 36% 28% 28% l6% 50% 55%
De*t To E9$"t7 Rat"o l37% l68% l27% l00% 9l% 7l% l47% l6l%
COVERAGE
T",es Interest Earne) 2.69 4.04 6.82 ll.73 9.2l 7.58 6.l3 3.0l
Cash Co:erage Rat"o 3.27 4.22 5.78 7.7l 9.7l 6.86 9.64 l.42
F"+e) Charge Co:erage Rat"o
Cash F%ow A)e9$a#7 Rat"o 0.76 0.88 0.83 0.57 0.56 0.64 0.l4 -0.0l
PROFTABILITY
Gross Pro'"t !arg"n 33% 33% 32% 26% 2l% 24% 2l% 27%
Operat"ng !arg"n 2l% 2l% 2l% l7% l4% l6% l4% l9%
Net Pro'"t !arg"n l3% l0% l3% l3% l3% l4% l4% l8%
Cash F%ow !arg"n l6% l6% l5% 8% 8% 8% 7% -l%
Ret$rn On Asset 9% 8% l2% l2% l6% l6% 8% 7%
Ret$rn On E9$"t7 20% 2l% 27% 24% 3l% 27% 20% l8%
Cash Ret$rn On Asset ll% l2% l4% 8% l0% 9% 4% 0%
MARKET
Earn"ng Per Share 7.65 8.l5 l0.l8 l0.53 l5.l6 l5.47 l7.l7 20.5
Pr"#e to Earn"ng 6.80 6.38 5.ll 4.94 3.43 3.36 3.03 2.54
D":")en) Pa7o$t 85% 86% 79% 8l% 73% 58% 4l% 29%
Page 72
D":")en) C"e%) l3% 8% 9% 7% 7% 5% 3% 6%
Page 73
"ncome %tatement
.//0 .//. .//1 .//2 .//3 .//4 .//5 .//6
Net sa%es
8,220,l58

l0,893,3l9

l2,l73,00
6
l2,797,66
2
l8,276,27
7
l7,60l,7
83
23,l83,2
22
23,3l7,l
98
Cost o' sa%es
5,478,l93

7,343,l32

8,309,937
9,528,2l
5
l4,364,28
8
l3,364,5
24
l8,262,7
93
l7,l20,6
35
GROSS PROFIT
2,74l,965

3,550,l87

3,863,069
3,269,44
7
3,9ll,98
9
4,237,2
59
4,920,4
29
6,l96,5
63
e+p

l,005,997

l,233,089

l,328,73l
l,036,50
9
l,270,70
3
l,48l,7
30
l,64l,7
24
l,657,8
l5
Other Operat"ng In#o,e -
l0,000
- - -
Pro'"t Fro, Operat"ons
l,735,968

2,327,098

2,534,338
2,232,93
8
2,64l,28
6
2,755,5
29
3,278,7
05
4,538,7
48
Other "n#o,e
l98,588

23l,398

392,093
558,l5
4
l,l44,98
7
l,338,8
54
l,83l,2
60
2,754,3
30

l,934,556

2,558,496

2,926,43l

2,79l,092

3,786,273

4,094,383

5,l09,965

7,293,078
Less : F"nan#e Charges
645,795

575,5l0

37l,8l0
l90,32
8
286,65
2
363,
55l
535,
023
l,508,9
48
Other #harges
97,500

l47,26l

23l,370
(285,7
ll)
(280,0
70)
287,
l76
339,
430
579,5
56
Pro'"t Be'ore Ta+at"on
l,l9l,26l

l,835,725

2,323,25l
2,3l5,05
3
3,2l9,55
l
3,444,6
56
4,235,5
l2
5,204,5
74
TA-ATION
l27,20l

702,562

766,468
704,47
8
900,46
9
897,
330
l,080,9
29
964,l
44
Pro'"t a'ter Ta+at"on
l,064,060

l,l33,l63

l,556,783
l,6l0,57
5
2,3l9,08
2
2,547,3
26
3,l54,5
83
4,249,4
30
EPS ; *as"# ( )"%$te) 8 8 l0 ll l5 l5 l7 2l
Page 74
Balance %.eet
.//0 .//. .//1 .//2 .//3 .//4 .//5 .//6
NON C&RRENT ASSETS
Propert78 p%ant an) e9$"p,ent 6,86l,5
76
7,l95,5
77
7,095,7
20
7,096,3
30
6,840,0
58
6,557,6
03
l3,8ll,6
83
33,395,7
62
Intang"*%e assets - - - 9,
938
2l,
6l8
l8,
062
l33,
867
l22,
858
Long ter, "n:est,ents l,340,0
00
l,340,0
00
l,424,5
57
l,424,5
57
2,l72,7
57
3,657,5
96
7,764,4
82
ll,09l,8
57
De'erre) e,p%o7ee
#o,pensat"on e+p
- - - - - - - 96,
078
De'erre) e+pen)"t$re 59,
689
79,
86l
44,
808
- - - - -
Long ter, %oans8 a):an#es
an) other re#e":a*%es
"n#%$)"ng )er":at":es
l5l,
988
l07,
308
75,
223
5l,
928
65,
642
63,
l09
49,
42l
258,
8l3
Fore"gn E+#hange R"sk
Ins$ran#e Contra#t
- l53,
660
- - - - - -
TOTAL NON;C&RRENT
ASSETS
8,4l3,2
53
8,876,4
06
8,640,3
08
8,582,7
53
9,l00,0
75
l0,296,3
70
2l,759,4
53
44,965,3
68
C&RRENT ASSETS
Stores8 spares an) %oose too%s 590,
079
597,
806
566,
922
587,
288
665,
902
688,
568
740,
873
957,
24l
Sto#k "n tra)e 424,
870
77l,
055
385,
582
484,
748
l,922,9
82
923,
448
2,690,l
53
4,680,8
96
Leaseho%) %an) he%) 'or sa%e - 4,
608
- - - - - -
Tra)e )e*ts 424,
045
526,
l24
640,
243
522,
608
543,
3l6
623,
349
l,408,8
85
26l,
508
De'erre) e,p%o7ee
#o,pensat"on e+p
- - 93,
2l3
Loans8 a):an#es8 )epos"ts
an) prepa7,ents
l79,
l2l
248,
278
l59,
82l
477,
636
360,
923
4l6,
758
889,
62l
l,899,l
24
)er":at":es
259,
532
l06,
948
55,
03l
64,
662
237,
93l
998,
565
2,360,4
95
5,057,5
8l
C$rrent Port"on o' Fore"gn
E+#hange R"sk Ins$ran#e
#ontra#t
- 77,
9l5
- - - - - -
Ta+at"on 499,
460
l70,
234
- l60,
29l
- - 535,
699
6l8,
746
Short ter, "n:est,ents 695,
940
748,
797
766,
022
864,
223
l38,
0l6
228,
5l8
6,l53,9
48
67,
8ll
Cash ( *ank *a%an#es 937,
4l2
2,l56,5
4l
l,65l,0
68
l,44l,l
48
l,l42,4
85
l,805,2
40
l,6l7,5
24
l,687,0
38
TOTAL C&RRENT ASSETS 4,0l0,4
59
5,408,3
06
4,224,6
89
4,602,6
04
5,0ll,5
55
5,684,4
46
l6,397,l
98
l5,323,l
58
TOTAL ASSETS l2,423,7
l2
l4,284,7
l2
l2,864,9
97
l3,l85,3
57
l4,lll,6
30
l5,980,8
l6
38,l56,6
5l
60,288,5
26
Page 75
200l 2002 2003 2004 2005 2006 2007 2008

SHARE CAPITAL
A$thor"e) 2,000,0
00
2,000,0
00
2,000,0
00
2,000,0
00
2,000,0
00
2,000,0
00
3,000,0
00
3,000,0
00

Iss$e)8 s$*s#r"*e) ( pa");$p l,390,3
64
l,390,3
64
l,529,4
00
l,529,4
00
l,529,4
00
l,682,3
40
l,934,6
92
2,l28,l
6l
Share Pre,"$, - - - - - l,068,3
69
3,963,9
77
7,l52,7
22
E,p%o7ee share opt"on
#o,pensat"on reser:e
- - - - - 305,
052
Reser:es ; #ap"ta% - l39,
036
- - - - - -
; re:en$e =
genera%
3,844,2
40
3,794,2
40
4,l29,2
40
4,429,2
40
4,429,2
40
4,429,2
40
4,429,2
40
4,429,2
40
; he)g"ng - - - - - - l,037,3
86
2,l57,7
69
&nappropr"ate) pro'"t - - - - - 2,l90,l
48
4,l02,3
66
6,9ll,l
24
TOTAL SHE 38.1?86
65
3811/8.
54
3844183
1?
4836386
62
5815383
44
?815/8/
?5
03824584
40
.18/628/
46

Re)ee,a*%e Cap"ta% ( a##r$e)
,ark $p
2,463,l
73
2,8l6,6
67
2,66l,5
00
2,575,0
00
2,887,5
00
l,800,0
00
- -
Long ter, %oans 528,
925
505,
607
574,
000
- - - l5,422,5
20
27,756,7
l4
Der":at":es - - - - - - - 9l8,
050
E,p%o7ee Ho$s"ng S$*s")7 - - - - - - - 73,
3l9
L"a*"%"t7 aga"nst asset s$*@e#t
to '"nan#e %ease
- - - 4,
5l5
2,
289
- - -
De'erre) Ta+at"on 776,
955
86l,
659
848,
722
966,
295
l,003,l
77
l,l27,l
39
l,948,9
80
2,4l2,7
57
Ret"re,ent ( Other ser:"#e
*ene'"ts
l55,
98l
l65,
453
l87,
889
68,
5l4
43,
004
4l,
l65
38,
560
44,
264
TOTAL NON;C&RRENT
LIABILITIES
18?.38/
12
2812?81
64
28.5.80
00
1840281
.2
18?138?
5/
.8?4681
/2
05820/8/
4/
108./380
/2

C&RRENT LIABILITIES
C$rrent port"on o'
; re)ee,a*%e #ap"ta% (
a##r$e) ,ark;$p
34l,
905
626,
282
587,
500
l,086,5
00
687,
500
l,087,5
00
- -
; %ong ter, %oans l97,
395
254,
893
- 594,
500
- - l,300,0
00
76,
600
; %"a*"%"t7 aga"nst asset
s$*@e#t to '"nan#e %ease
- - - 2,
085
2,
226
2,
32l

; other ser:"#e *ene'"ts - l8,
954
23,
42l
22,
47l
20,
320
l6,
477
l8,
552
l8,
334
Page 76
Short ter, *orrow"ngs 582,
270
l,l2l,3
30
322,
635
- - l,299,9
6l
- l,7ll,2
75
Cre)"tors8 a##r$e) ( other
%"a*"%"t"es
l,650,5
93
2,095,9
63
l,30l,5
70
l,236,7
90
l,969,0
0l
l,08l,7
45
3,752,9
45
3,874,8
24
&n#%a",e) )":")en)s - - - 42,
803
77,
870
82,
360
l93,
067
3l8,
320
Ta+at"on - - l58,
93l
43,
267
72,
05l
- -
Propose) )":")en) 486,
628
486,
628
535,
290
- - - - -
TOTAL C&RRENT LIABILIITES 18.3685
?0
284/28/
3/
.8?.?81
25
.8?6380
2?
.86//80
62
1842.82
03
38.4283
42
38???81
31

TOTAL LIABILIITES 5806186
.3
68?3182
14
58./082
36
483??82
51
4851480
32
4840/85
0?
..845284
.2
158./282
35

TOTAL SHE ( LIABILITIES 0.82.185
0.
028.6185
0.
0.86428?
?5
01806381
35
02800085
./
038?6/86
04
16802.8.
63
4/8.6683
.3
Page 77
References
Engro Chemical site
Engro's Annual reports
Research report by Fortune Securities Limited
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ANALYSIS OF FINANCIAL

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