HORIZONTAL ANALYSIS / COMMENTS Horizontal analysis is used to evaluate the trend in accounts over the years.

This helps in disclosing changes on the items in financial statements over the years. In horizontal analysis, any one year is taken as base year and all items are compared with corresponds items in base year. Horizontal analysis of PTCL under my discussion provides the information about the organization where it stands in its financial status from 2002 to 2006. Whether it improving it position or not, all this is know through this analysis. During my analysis 2002 is taken as base year and all other year figures are compared with this base year. ANALYSIS SHAREHOLDERSEQUITY&LIABILITIES By comparing the data from 2002 to 2006, it is clear that reserves are increasing with respect to base year 2002, but in 2006 the value is reduced as compared to 2005. The reason is that during this year, the capital of the company remains same, reserves increase but the value of profit decrease during this year, which affects the overall value of 2006. Non current liabilities are reducing during the analysis years with respect to base year. During the years, Suppliers credit, deferred taxation and long term security deposits are reduced but the retirement benefits increased in 2006, which affects the over all value of this year. By comparing the figures of Current Liabilities of these years w.r.t base year, it is clear that during the years 2003-2006 Payables / Borrowing increase gradually with respect to 2002 but the Interest and Markup accrued, Taxation decreased with respect to base year. The over all value of Current liabilities decrease w.r.t base year. The overall value of Equity and Liabilities remains less during the years 2003, 2004 and 2006 but in 2005 increase to some extent. This shows the stability in Equity and Liabilities during these years.

TOTALASSETS The overall value of Fixed Capital decreases with respect to base year. The value of Property, Plant, and Equipment during these years decreases but the value of Capital work in progress increased during 2005-06. On the other hand the value of Intangible assets increases much more during 2006. The overall value of the long term investment and loans increased with respect to base year 2002. During the year 2006 this value reduces 127.97 from 147.19 in 2005. The reason behind this that during 2006, there was not as such investment occurred and value of loans also reduced as compared to previous years. The overall Current Assets decrease during the year 2003, 2004 & 2006. but increase during the year 2005. This shows that in 2007 the Receivables are almost double but Cash is much less as compared to 2006. Hence overall situation is not as good as compared to base year. PROFIT&LOSSACCOUNT From horizontal balance sheet, it is clear that Revenue of the company is increasing in the coming years with respect to base year 2002. This increase in value of Revenue shows that company is moving in the right direction and showing best results for investors and stockholders. Operating cost is increasing with respect to base year with the passage of time. Comparison shows that operating profit is increased every year with respect to base year. In 2005 Operating Profit was maximum but in 2006 this decrease from Rs. 137.11 million to Rs. 118.88 million. The overall value of Profit is increasing during the analysis years. Maximum profit occurs during 2005 but it reduces its value in 2006 as compared to 2005. RESULT The overall Horizontal analysis shows that the company is in good condition for its stock holders and the persons interested in this organization. The company is in running in profit situation. There is

increase in profit in the next coming years. In 2005, the company gets maximum profit while in 2006; there is decrease in the value of profit as compared to 2005. The reason behind this is the uncertainty in the process of privatization scenario, increase in the operating cost, decrease in inappropriate profit, increase in payables, increase in capital work in progress, less new investment and loans etc. VERTICAL ANALYSIS / COMMENTS In vertical analysis, a significant item on a financial statement is used as a base value, and all other items on the financial statement are compared to it. Vertical analysis is used to disclose the internal structure of an enterprise. In performing vertical analysis for the balance sheet, total assets and Total Equity & Liabilities are assigned 100 percent. Each account is then expressed as a percentage of these values. In profit and loss account, Revenue is given the value of 100 percent and all other items are evaluated in comparison to this Revenue. All this is done for the purpose of evaluating financial position of PTCL. ANALYSIS SHAREHOLDERSEQUITY&LIABILITIES By comparison it is clear that Share capital & Reserves are increasing from 49.14 to 77.05 during the year 2002 to 2005 and then decrease its %age value in 2006 as compare to 2005. During the period Reserves are increasing every year, Capital %age almost remain its value constant i.e. no significant difference. The alarming condition is about Un-appropriated profit. The profit is maximum in 2005 that is 18.43 as compared to total Equity & Liability and this value decrease in 2006. Non current liabilities are also decreasing every year but 2005, a slight rise in value exist. When we analysis its individual values, it is clear that Suppliers credit is decreasing significantly but the other values like Deferred taxation , Retirement benefits, Security deposits have mixed affect. In different years its %age values are different. But overall liabilities are decreasing.

Current liabilities in base year 2002 are 33.39, its value decrease in 2003, then increase in 2004 and again decrease and then rise. So have a mixed affect. When we study individual item in Current liabilities, it shows that Interest & Markup accrued decreases. Trade & Payables are increasing from 5.36 to 10.89. And other items have mixed affect. TOTALASSETS Vertical Balance Sheet shows the %age of Fixed Capital w.r. to total Assets. This value is 64.91 % in 2002; its value increase to 67.77% in 2003 then decrease to 64.37% in 2004 then reduce to 58.46% in 2005 and again rise in 2006. All other items have a mixed affect. Vertical Balance Sheet shows the %age values of Long term assets during the year 2002-2006 with respect to total assets. This value is 5.10% in 2002, 6.78%in 2003 (a rise of 1.68%), 6.73 in 2004 (a decrease of .05% as compared to 2003) 7.43 in 2005 (a rise of .70% as compared to 2004) and again decrease .70% in 2006. In 2004 and 2006, these values have same values. By comparing it shows that maximum current assets are 34.11 % in 2005 and minimum current assets are25.44 in 2003. In 2004 & 2006 its value is 28.90 % which is same in both years. When we study the items involved in current assets, it is clear that items have almost same %age of values in 2004 and 2006. Company bank balances are maximum 16.97% in 2004 and minimum bank balance was in 2003. PROFIT&LOSSACCOUNT During the vertical analysis of Profit and Loss Account Revenue is taken as 100% and all other items are compared with respect to this Revenue Operating profit is maximum 52.14% in 2006 and minimum in 2005 with respect to base value of Revenue. Company earns maximum Operating profit of 56.58% in 2005. During this year the Operating cost was minimum. Company earns minimum Operating profit of 47.86% in 2006. During this year the Operating cost was maximum. This shows that Operating cost & Operating profit are inversely to each other.

Company earns maximum profit in 2005 which is 39.36% of the total revenue. A decline in profit up to 9.34% exists during the year 2006. This shows the poor condition of the company during this year. During this decline the Earning per share during this year also decrease from 5.72 to 5.22. RESULT The overall vertical analysis shows that during the year 2005 the company earns maximum profit during this year the E.P.S was also maximum. In this year the Operating cost was minimum and its Operating profit was maximum as compared to other years.