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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.

SHARE CAPITAL AND RESERVES

Share Capital and Reserves include Issued, Subscribed and Paid up Capital,

Issuance and General Reserves and Un-appropriated profit.

2006 2005 2004 2003 2002

145.17 158.35 116.00 108.40 100 (%)

COMMENTS

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.

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NON CURRENT LIABILITIES

Non current liabilities include Suppliers Credit, Deferred Taxation, Employees

Retirement benefits, and Long term security deposits.

2006 2005 2004 2003 2002


63.54 62.99 68.89 92.64 100 (%)

COMMENTS

These 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.

CURRENT LIABILITIES

Current Liabilities includes Payables, Interest and Markup accrued, Short term

borrowing, Current portion of accumulating compensated absences, Suppliers

credit and Taxation.

2006 2005 2004 2003 2002

43.77 36.88 72.85 70.61 100 (%)

COMMENTS

By comparing the figures 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.

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TOTAL EQUITY AND LIABILITIES

2006 2005 2004 2003 2002


96.92 101.00 93.28 92.86 100 (%)

COMMENTS

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.

FIXED CAPITAL EXPENDITURE

Fixed Capital Assets includes Property, Plants, Equipments, Capital work in

progress and Intangible assets.

2006 2005 2004 2003 2002

96.12 90.96 95.33 96.96 100 (%)

COMMENTS

Table shows the percentage values of the under consideration years. 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.

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LONG TERM ASSETS

These assets include long term investment and loans.

2006 2005 2004 2003 2002

127.97 147.19 150.38 123.55 100 (%)

COMMENTS

The overall value of the long term investment and loans increase 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.

CURRENT ASSETS

Current Assets include Cash, Receivables, Loans, Advances Store & Spares and

Trade debts.

2006 2005 2004 2003 2002

93.39 114.85 79.14 78.77 100 (%)

COMMENTS

The overall Assets decrease during the year 2003, 2004 & 2006, but increase

during the year 2005 and then decreased in year 2006. Hence overall situation is

not as good as compared to base year.

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REVENUE

2006 2005 2004 2003 2002


122.46 119.48 108.32 107.07 100 (%)

COMMENTS

From table, 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

2006 2005 2004 2003 2002


125.93 102.33 102.04 109.67 100 (%)

COMMENTS

Operating cost is increasing with respect to base year with the passage of time.

OPERATING PROFIT

2006 2005 2004 2003 2002


118.88 137.11 114.78 104.40 100 (%)

COMMENTS

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

137.11 to 118.88.

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PROFIT BEFORE TAXATION AND AFTER TAXATION

2006 2005 2004 2003 2002


146.55 160.67 127.14 109.13 100

COMMENTS

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.

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