Industry Ratios

Industry 2015-2019
2015-2019
Analysis
Group Members: Romessa Kamal 22-10148, Hajra 22-11320, Syed
Abdul Moueed Farukh 21-11448, Nouman Pervaiz 21-11385, Ameer
Fertilizer
Hamza 22-10672 Industry
Table of Contents
Agritech.....................................................................................................................3
Engro Fertilizers.........................................................................................................3
Fauji Fertilizers...........................................................................................................3
Dawood Fertilizers.....................................................................................................4
Fatima Fertilizers.......................................................................................................5
Industry Analysis........................................................................................................5
COMPANY ANALYSIS...............................................................................................20
Agritech Fertilizer.................................................................................................20
Engro Fertilizer.....................................................................................................29
Fauji Fertilizers.....................................................................................................39
Fatima Fertilizer....................................................................................................54
Agritech
Agritech (Formerly Pak-American Fertilizers LTD) was the first Nitrogenous fertilizer plant
built in Pakistan. The main business of the company is the manufacturing and marketing of
fertilizers. It owns and operates the country’s newest and most efficient urea manufacturing plant
at Mianwali. The company also manufactures SSP (Single Super Phosphate) at its plant at
Haripur Hazara, which is the largest Single Super Phosphate (SSP) manufacturing plant in the
country. Agritech has also achieved distinction of ISO certification for both; Quality
Management and Environmental Management Systems i.e., ISO 9001:2000 and ISO 14001:2004
Engro Fertilizers
Engro Fertilizers Limited is Engro Corporation's subsidiary and a renowned name in the fertilizer
industry in Pakistan. It is traded under the symbol 'EFERT on the stock exchange. Engro has a
large manufacturing and marketing infrastructure nationally and produces leading fertilizer
brands designed for the needs and demand of local cultivation. Engro is also a dominant importer
and dealer of phosphate fertilizers that are commonly sold across Pakistan. Since its launch, their
comprehensive market development efforts have ensured a consistent pull for their primary and
secondary fertilizer products and trading outputs. Due to its reputable fertilizers brands and
continuous agricultural assistance in training and education, Engro Fertilizers Limited enjoys a
client base across Pakistan. Engro Fertilizers Limited was founded in June 2009 following a
decision by its parent company, Engro Chemical Pakistan Limited, to demerge the fertilizer
market. A vast transformation of Engro Chemical's operations and management was required due
to the continuous growth and development of its enterprises. Engro Chemical Pakistan was
transformed into a holding company called Engro Corporation to allow effective performance,
and its fertilizer business was consequently demerged to a newly created Engro subsidiary called
Engro Fertilizers Limited.
Fauji Fertilizers
. Fauji Fertilizer Company Limited (FFC) is Pakistan's biggest producer of urea. It was founded
in 1978 as a joint venture between Haldor Topsoe A/S of Denmark and the Fauji Foundation (a
prominent charitable trust in Pakistan). The Company operates three urea plants worldwide with
an estimated design capability of more than 2 million metric tons per year. In 1993, FFC and the
Fauji Foundation contributed to the development of the only granulated urea and DAP complex
in Karachi. The new company, Fauji Fertilizer Bin Qasim Limited (FFBL), is meant to generate
551,100 metric tonnes of granulated urea and 650,000 metric tons of DAP. Thus, the largest
fertilizer marketing network in the world, the FFC Marketing Group. FFC is classified on all of
the country's stock exchanges and is among the biggest corporate companies in the country. FFC
is well known globally as a member of the International Fertilizer Association (IFA), the Arab
Fertilizer Association (AFA) and the New York United Nations Global Compact (UNGC).
Dawood Fertilizers
DH Fertilizers Limited (DHFL) is a urea fertilizer manufacturing and marketing concern
incorporated in August 2010 as a wholly owned subsidiary of the Dawood Hercules Corporation
Limited (previously Dawood Hercules Chemicals Limited). DHFL manufactures and markets
urea under the brand name "Bubber Sher" with market capitalization of PKR 29.39 billion.
Bubber Sher® has consistently delivered quality and value for more than 35 years and today it is
recognized as a household name for farmers and agriculturists. Anhydrous Ammonia is provided
for the manufacture of soda ash, fructose and other miscellaneous chemicals. The 445 Kt urea
plant is located in Sheikhupura, Punjab.
The manufacturing facility was established in 1968 as a joint venture with Hercules Chemicals
Inc. of the USA. It was the first private sector venture in Pakistan to receive a loan from the
World Bank and was the largest ammonia/urea plant in country at that time. Initially the plant's
capacity was 345,000 metric tons of urea per annum. The plant was revamped in 1989 / 1991 to
enhance the capacity to 445,500 metric tons of urea per annum. This also made the
manufacturing facilities more energy efficient and environment friendly.
In recent years, Dawood Hercules has made a colossal investment to incorporate the latest
technology, the most significant of which is the construction of a new pilling tower in record
time. The tower is the tallest industrial structure in Pakistan. Other fundamental technological
improvements and investments include the replacement of the Primary Waste Heat Exchanger,
Primary Reformer Harps Assemblies and conventional instrumentation (with Distributed Control
System). DHFL has the privilege of becoming the first fertilizer manufacturing company to
obtain ISO-9000:2000 certification. It has also been the recipient of numerous safety and
excellence awards.
Fatima Fertilizers
The Fatima fertilizer is a major contributor to Pakistan's economic growth. It was founded with
the trade of commodities in 1936 and eventually entered into the production of different goods.
The Group has a history of success spread over seven decades, stretching its horizon from trade
to production. The Group is currently engaged in commodity trading, fertilizer production,
textile products, sugar, mining and power. Fatima fertilizer Limited is a subsidiary of Fatima
Fertilizer Company Limited and a well-known name for localized cultivation in Pakistan's
fertilizer industry, selling Urea under the prominent brand name 'Bubber Sher.' Fatima fertilizer
Limited is also the largest importer of DAP, which is widely marketed in Pakistan. Due to its
established brand name and retaining the respect of its loyal customers, Fatima fertilizer Limited
has a wide customer base throughout Pakistan.
Industry Analysis
Liquidity Ratios
1. Current Ratio
Company 2019 2018 2017 2016 2015

Engro Times 1.1 1.1 1.0 1.2 0.9
Dawood Times 1.1 1.1 1.2 1.3 0.7
Fauji Times 0.91 0.95 0.95 0.91 0.85
Fatima Times 0.88 1.09 1.10 1.03 0.66
Agritech Times 0.14 0.10 0.11 0.12 0.14
In 2015, Engro and Dawood had the highest current ratio which was 1.1 times. This shows how
easily the company will be able to pay off its creditor back. After Engro and Dawood, Fatima
fertilizer and Fauji fertilizers were second best to maintain a good interest coverage ratio at 1.10
and 0.95 respectively. It also indicates that the companies have enough revenue to pay off their
liabilities. However, in 2016 there was a huge change in the current ratio of the companies.
Fatima and Engro fertilizers also have increase in their current ratio at 1.03 and 1.2 respectively;
Fauji had the good ratio among other companies in 2016 at 0.91. In 2017, Dawood fertilizers had
the highest current ratio at 1.2 Fatima and Engro fertilizers were second best to earn a ratio of
1.10 respectively. Fauji fertilizers had a ratio of 0.95. In 2018, Fatima fertilizer had a ratio of
1.09 and Engro fertilizer had a ratio of 1.1 In 2018 Fauji fertilizer had 0.95 and Dawood had 1.1
showing their company’s capability to pay off liabilities. In 2019 Engro fertilizer and Dawood
Fertilizer had the highest ratio at 1.1, Similarly, Fauji fertilizer had a ratio of 0.91 in 2019, which
is less than their company gained last year. Fatima fertilizer the highest current ratio in 2018 that
decreased to 0.88 in 2019. The Fauji fertilizers current ratio is less than 1 which means that the
company’s capability to meet interest expenses in doubtful. Therefore, in 2019, all companies
gained low ratio than what they had in 2018, especially Fauji fertilizer.
2. Quick Ratios
Company 2019 2018 2017 2016 2015

Engro Times 0.8 0.7 0.7 0.7 0.5
Dawood Times 0.9 0.7 0.7 0.7 0.5
Fauji Times 0.81 0.79 0.88 0.72 0.58
Fatima Times 0.65 0.89 0.90 0.83 0.39
Agritech Times 0.03 0.02 0.02 0.03 0.06
Now we talk about quick ratios. Fauji had the highest quick ratio in 2019 with 0.81 times then
comes Dawood and Engro with 0.9 and 0.8 and last Agritech had the lowest ratio with 0.03
times. Fauji fertilizer’s higher ratio tells that company had good capacity to pay its liabilities
without selling its inventory. In 2015 all the companies had the lowest quick in 5 years with
Engro and Dawood with 5.5 times each and then Fauji, Fatima fertilizers and Agritech with
ratios of 0.58, 0.39 and 0.06 respectively which mean that all the companies were not able to pay
their liabilities without selling their inventory in 2015 but they cover well.
Leverage Ratios
3. Debt to Equity Ratio
Company 2019 2018 2017 2016 2015

Engro Percentage 71.5 67.7 72.8 83 85.1
Dawood Percentage 70.5 67.5 71.5 85 85.1
Fauji Percentage 3.31 3.38 2.70 2.21 1.93
Fatima Percentage 16.3 20.5 29.9 47 49.3
Agritech Percentage 5.4 -10.45 -649.95 7.25 6.1
Engro and Dawood fertilizers both had a high debt to equity ratios during 2015 to 2019. Their
ratio varied between 65% to 85%. This high ratio is linked with high risk as well as the
companies have been excessively financing their growth with funds from creditors such as
banks. This leads to high debt risks for the companies. Fatima fertilizer also has a high ratio
initially but later decreased consistently. Fatima, Agritech and Fauji fertilizers have low debt to
equity ratios indicating that the companies are funded mostly by their shareholder. Agritech,
Fauji and Fatima fertilizer had very low debt to equity ratio which means that their financing is
done through their investors (shareholders) which is not risky for the company. However
Agritech had a negative ratio of -649.95% which means that the company has interest rates of
their debts which is higher than the return on investment of the company. Overall, Fauji and
Fatima fertilizer have consistently managed to have a low debt to equity ratio which is beneficial
for their companies. Agritech also had low ratios but also had negative ratios which mean that
the company was not able to pay its interest rates. Engro and Dawood had high debt to equity
ratios which means that their companies have high debts to pay their investors and are risky for
the company
4. Debt to Asset Ratio:
Company 2019 2018 2-17 2016 2015

Engro Times 0.7 0.7 0.7 0.8 0.9
Dawood Times 0.8 0.7 0.7 0.8 0.9
Fauji Times 0.7 0.7 0.7 0.6 0.6
Fatima Times 0.50 0.43 0.46 0.57 0.58
Agritech Times 1 1 1 1 1
Total-debt-to-total-assets is a leverage ratio that defines the total amount of debt relative to

assets owned by a company. Using this metric, analysts can compare one company's leverage
with that of other companies in the same industry. This information can reflect how financially
stable a company is. The higher the ratio, the higher the degree of leverage (DoL) and,
consequently, the higher the risk of investing in that company. Agritech has the highest ratio
among its competitors for 5 years. The company maintained the ratio of 1 since 2015.Whereas
the giants of the sector including Engro and Fauji have a very low debt to asset ratio. Whereas,
Fatima Fertilizers maintained the lowest ratio among the other competitors. The data given in the
table shows the ratios of the company for five years and it can be observed that if only leverage
ratio is considered than, Fatima fertilizer is the best option for investors to invest in.
5. Return on Capital Employed:
Company 2019 2018 2017 2016 2015

Dawood Percentage 46.53 49.56 29.37 136.79 64.81
Fatima Percentage 20.04 23.48 18.59 18.09 20.23
Agritech Percentage 0.1 -4.79 -0.27 0.03 -0.08
Over the last 5 years, Dawood fertilizers and Fauji fertilizers had the highest return on capital
employed ratio between 64.81% and 46.52 which is beneficial for the company as the company
is producing more profits per every dollar of the capital employed. These high ratios of the
companies indicate the profitability and capital efficiency of the companies. Engro and Fatima
fertilizers had very low ratios throughout the last 5 years, showing that the companies are earning
lower profits per every dollar of the capital employed. This means that the companies are not
gaining enough returns on capital employed to provide healthy revenue for the company. Their
ratios have been varying between 15 to 25% ROCE indicating low profits by the companies.
However, Agritech had a negative ratio during the last 5 years which means that the company
has high negative working capital that exceeds the size of their net fixed assets. Agritech
managed to gain a positive ROCE but is still very low at 0.03% and 0.1%. These ratios indicate
that the company is not earning much revenue. Overall, Fauji fertilizers had capital efficiency
and were earning profits whereas Agritech was not able to earn profits on capital employed.
Coverage Ratio
6. Interest Coverage
Company 2019 2018 2017 2016 2015

Engro Times 8 12.7 7.3 5.3 5.6
Dawood Times 8.8 12.6 7.7 5.8 5.9
Fauji Times 10.6 14.3 7.4 8.2 17.6
Fatima Times 5.57 13.76 6.79 5.24 5.85
Agritech Times 0.71 -0.41 -0.82 0.21 -0.65
From 2015 till 2019, the highest interest coverage ratio was by Fauji fertilizer. This illustrates
how efficiently the business will be capable of paying off its interest and outstanding debt. Their
ratio varied from 7.4 to 17.6%.This means that the business is earning enough revenue to from
their sales to easily pay off their liabilities. Dawood fertilizer, Fatima fertilizers and Engro
fertilizers were also able to earn profitable good interest coverage ratios. However, they did face
declining ratios which indicates that they may face high capital costs, leading the businesses to
face financial difficulties and have fewer funds to pay off debts. Agritech was the firm that
encountered the lowest interest coverage ratio. It faced negative ratios which suggest that they
had no funding and they were unable to pay off their debts or other liabilities, the corporation
faces a debt expense burden. The interest coverage ratio of the company is lower than 1.5, which
implies the willingness of the company to meet interest payments in questionable. Consequently,
with the exception of Agritech, all companies received a low ratio in 2019 relative to what they
had in 2018. Agritech has had a historically poor interest coverage ratio, implying that the
financial position of the company is not sustainable and that its debts and interest cannot be paid
off.
Activity Ratios
7. Receivables Turnover Ratio (Times)
Company 2019 2018 2017 2016 2015

Engro Times 10.4 15 11.9 14.1 56.6
Dawood Times 10.3 14 11.5 13.1 56.6
Fauji Times 12.3 28.6 22.60 23.97 65.36
Fatima Times 3.90 2.90 3.30 3.46 5.73
Agritech Times 6.46 3.24 3.53 5.27 4.02
Receivable turnover ratio is essentially the ratio of net sales to accounts receivables. A higher
number here is taken as a symbol of efficiency when changing receivables to cash. In lay man’s
terms, this ratio shows us what proportion of our sales (on average) are cash sales or how readily
or easily cash can be harvested from receivables. This not necessarily a good thing, not from all
perspective. For example, clients may find companies that are more lenient with their deadlines
and debt terms more attractive. This might explain why the ratio is experiencing the downward
trend explicit from the time series analysis. Engro, Dawood and Fauji all experienced
humongous falls following 2015. Agritech and Fatima fertilizers, however, keeps a stable low
ratio in comparison to the other like companies. Overall analysis shows though Engro, Dawood
and Fuji, historically, exhibited extremely high numbers, the ratio now converging towards a
lower, apparently stable, equilibrium. Considering the year 2019 Fauji fertilizers proved to be
efficient one and proved to have a great number of quality customers. The lowest one is the
Fatima fertilizers showing that it has a poor collection process. Furthermore, in 2018 to 2015 on
top is Fauji fertilizers, in accordance with that Fatima fertilizers has the lowest turnover ratio
showing that the company should reassess its credit policies in order to ensure timely collection
of its receivables.
8. Receivables Turnover Ratio (Days)
Company 2019 2018 2017 2016 2015

Engro Days 35 24 31 26 6
Dawood Days 37 23 30 25 7
Fauji Days 30 13 16 15 6
Fatima Days 94 126 111 105 64
Agritech Days 56.5 112.6 103.3 69.2 90.7
It is practically the same metric as receivable turnover ratio. A higher turnover ratio shows
lower number of days of receivables. It is a useful metric from a practical standpoint as it is
easier to understand. This table reflects the same scenario imparted in pervious table where
Fauji fertilizers is on top managing the receivables efficiently.
9. Payables Turnover (Times)
Company 2019 2018 2017 2016 2015

Engro Times 2.5 2.9 2.9 3.2 2.6
Dawood Times 2.18 3.35 3.27 4.89 5.25
Fauji Times 1.42 2.34 5.10 16.96 4.16
Fatima Times 1.21 0.77 Not Not Not
available available available
Agritech Times 0.18 -0.11 -2.00 -0.08 -0.1
This figure shows how many payments on average are made during the year. Any business
would prefer a lower payables turnover as it means that they will have liquid assets with them for
a longer time and consequently, it will be easier to manage day to day operations. Fauji group is
showing rather higher payables turnover. This might be an indicator to the fact that the group
was trying to enter new markets and developing new lines products. On time payments or even
before the due time can used as an incentive. Another reason for the abnormally high ratio for
Fauji Foods in 2016 may be explained by the fact that the average payables is just an
approximation and the estimate at a particular point in time is not always the representative of
overall year. An abnormally high payable at beginning or end of the year can yield abnormal
results. Analyzing the companies furthermore decrease in ratios is indication that companies
might be negotiating different payment arrangements with the suppliers. Another interesting case
is Agritech. The numbers suggest that business is not making any payments at all. This might be
indicator of serious problem for the business that company is in financial crisis.
10. Payables Turnover (Days)
Company 2019 2018 2017 2016 2015

Engro Days 149 126 125 114 139
Dawood Days 167 108 111 74 69
Fauji Days 258 156 72 20 88
Fatima Days 301 474 Not Not Not
Agritech Days -0.00 -0.00 -0.00 -0.00 -0.00
This ratio is practically like the payable’s turnover ratio. It explains the frequency of
payments as proportion of total sales in Days. The higher the better. As for the all the
industries the number are increasing except Agritech this give an indication that all the
companies are managing their debts efficiently. Only the case with Agritech is shows that
company is facing serious financial crisis.
11. Inventory Turnover Ratio (Times)
Company 2019 2018 2017 2016 2015

Engro Times 6.8 7.7 7.5 7.5 13.7
Dawood Times 6.7 8.7 7.5 10.5 13.9
Fauji Times 7.61 11.70 31.36 11.74 18.40
Fatima Times 5.43 4.41 3.44 2.38 2.73
Agritech Times 5 2.35 2.28 3.40 2.07
Then inventory turnover ratio (times). It was highest in 2015 of all the companies Fauji being the
highest with 18.40 times then Engro and Dawood with 13.7 and 13.9 each and then Fatima and
Agritech with 2.73 and 2.07 times. Then in 2016 Fauji was again highest with 11.74 times then
Dawood and Engro with 10.5 and 7.5 times each then Fatima and Agritech with the lowest
inventory ratio of 2.38 and 3.40 times. In 2017, 2018 and 2019 again Fauji was with the highest
inventory ratio of 31.36 times in 2017 and also their 2018 and 2019 was highest then other
companies then Dawood was having ratio of 8.7 in 2017. Fatima and Agritech was having low
ratio but it increased a little in 2019 of both with 5.43 and 5 times respectively. The high
inventory turnover mean that company is selling goods quickly mean that Fauji was in profit
more because of their high inventory turnover other companies were at low sides in term of sale
but they also recovered and their sale was increased because their inventory turnover was
increasing.
12. Inventory Turnover Ratio (Days)
Company 2019 2018 2017 2016 2015

Engro Days 54 47 49 48 27
Dawood Days 50 45 48 47 29
Fauji Days 48 31 12 31 20
Fatima Days 67 82 106 153 134
Agritech Days 71 154 159 107 175
Then inventory turnover ratio (days). Inventory turnover ratio (days) Agritech was highest with
175 days then Fatima fertilizers with 134 then Dawood, Engro and Fauji with 29, 27 and 20
days, it was in 2015. In 2016 Fatima fertilizers was highest ratio with 153 days then Agritech
with 107 days and Fauji was having lowest ratio with 31 days. In 2017 Agritech was having the
highest ratio with 159 days then Fatima fertilizer with 106 days then Engro and Dawood with 49
and 48 days and Fauji the lowest with 12 days. In 2018 Agritech was again have highest ratio
with 154 days then Fatima with 82 days and then Engro, Dawood and Fauji with 47,45 and 31
days. In 2019 Agritech was again the highest with 71 days and then Fatima, Engro, Dawood and
Fauji with 67, 54, 50 and 48 days.
13. Total Asset Turnover Ratio:
Company 2019 2018 2017 2016 2015

Engro Times 0.99 0.95 0.72 0.67 0.78
Dawood Times 0.99 0.93 0.75 0.67 0.78
Fauji Times 0.69 0.72 0.84 0.80 1.06
Fatima Times 0.53 0.44 0.36 0.33 0.34
Agritech Times 0.17 0.09 0.07 0.17 0.07
Total asset turnover ratio is likewise fixed asset turnover ratio is an efficiency or the activity ratio
that calculates the degree to which total assets contribute towards net sales. It also shows the
proper utilization of the total assets in order to generate sales. Higher turnover ratio means the
company is using its total assets more efficiently, so it’s preferable. Lower ratio means the
inefficiency of the company towards its total assets utilization. Analysis By analyzing the
fertilizer sector, Table shows fixed asset turnover ratio over five years. In Total asset turnover
ratio Fauji Group of Companies have maintained an excellent ratio as compared to the rest of the
companies which is a good sign for the company since 2015-2017. It shows they are highly
efficient in terms of utilizing their total assets to generate sales. However, saw a decrease in the
ratio. Consequently Engro, Dawood had their values improved since 2017-2019. But the
company; Agritech wasn’t able to make their ratio better and had been worse among the other
five companies. It shows that company has very few assets that are contributing towards the net
sales. However, there’s an increase in their values since 2015 annually, it shows that the
company’s assist is increasing which are contributing towards the net sales of Agritech.
Profitability Ratios
14. Gross Profit Margin:
Company 2019 2018 2017 2016 2015

Engro Percentage 32.6 32.3 30.1 25.1 34.8
Agritech Percentage 12.58 -6.8 -34.64 15.19 -20.05
Over the last 5 years, Fatima fertilizers had the highest gross profit margins as compared to the
other companies. This indicates how well the company has been able to generate revenue from
its cost which is directly related to production. Engro and Fauji and Dawood fertilizers also have
a high gross profit margin ratio showing profitable revenue earned by the companies. This means
that their companies are producing efficiently resulting in profitable revenue. However, Agritech
had a varying ratio. Over the years it had negative and positive gross profit ratio between -20.05
to 12.58 which means that initially in 2015the Company was unable to control its costs which
lead to cost of production exceeding their sales. Over the years it managed to have a positive
ratio which means that the company started generating revenue. Overall, Fatima fertilizers had
the best gross profit ratio in the last 5 years indicating how efficiently the company is generating
revenues from its cost of production whereas, Agritech had negative or very low ratios indicating
high cost of production and less revenue generated in the company.
15. Net Profit Margin
Company 2019 2018 2017 2016 2015

Agritech Percentage -5.36 -74 -121 -28 -98.5
Net profit margin measures how much of each rupee earned by the company is translated into
profits. It is an indicator of how efficient a company is and how well it controls its costs. The
higher the margin is, the more effective the company is in converting revenue into actual profit.A
low profit margin indicates a low margin of safety: higher risk that a decline in sales will erase
profits and result in a net loss. Analysis By analyzing fertilizer sector, it depicts from the table
that Agritech has maintained a bad ratio and it is decreasing as. Dawood, Engro, Fauji and
Fatima especially have maintained a highest ratio in 2015 which is a good sign for the company
and it’s satisfactory for the investors and creditors too. Engro, Fauji, Dawood are the companies
that are showing a decrease value which indicates that the company is in loss and it’s a very bad
image to the creditors and investors. Fauji Group of Companies has also maintained a
comparatively low ratio as well as its decreasing on a yearly basis which indicates a low profit in
these years. Agritech Fertilizer Limited has also shown a negative value since the last five years
however the percentage of loss is decreasing annually.
16. Return on Investment Ratio (Return in Asset)
Company 2019 2018 2017 2016 2015

Fatima 13.51 18.15 15.03 12.99 14.69
Percentage
Agritech Percentage -0.94 -7.24 -9.15 -4.82 -7.13
Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an

investment or compare the efficiency of a number of different investments. ROI tries to directly
measure the amount of return on a particular investment, relative to the investment’s cost. To
calculate ROI, the benefit (or return) of an investment is divided by the cost of the investment.
The result is expressed as a percentage or a ratio. The table shows the ROI of the five companies
that belong to fertilizers group. The table indicates that Dawood and Fatima had the best ROI
since 2015. Both of these companies had ROI which kept increasing for four years; however in
2019 the ROI of both the companies decreased to 13.8 and 13.51. Fauji Fertilizers had an
amazing ROI in 2015 of 20.9 which constantly were low over the course of five years. Similar
were the case with Dawood fertilizers, the company despite having competition with Engro had a
very bad RIO which was clearly showing the amount of return the company is getting on the
investments is low for a group as big as Dawood. Lastly Agritech, the company has been in
severe crisis since 2015. The company’s RIO has been seeing a negative value from 2015-2019.
Agritech has not been able to get a return on their investment costs. It indicates that the company
is going to face some financial crisis soon, as the owners of the company keeps on investing
without getting any return.
17. Return on Equity Ratio:
Company 2019 2018 2017 2016 2015

Engro Percentage 38 39.6 26.5 22.1 28.6
Dawood Percentage 38 39.8 27 22.1 29.6
Fatima Percentage 15.47 21.32 19.86 20.65 23
Agritech percentage -6.08 0 0 -52.4 -65.7
The return on equity ratio or ROE is a profitability ratio that calculates the effectiveness of the
firm to produce profits from its shareholders capital in the company. In other words, the return
on equity ratio shows how much profit each rupee of common stockholders' equity is generating.
It also shows the effectiveness of the management in utilizing the equity financing to fund
operations and run the company. This is an important measurement for potential investors
because they want to see how efficiently company will use their money to generate net income or
the profits. Analysis By analyzing the fertilizer sector, the table shows that Engro, Dawood are
improving their ratio on yearly basis. Fauji Group of Companies has maintained a positive and
good ratio throughout five years which is a good sign for the company. But Agritech has its their
ratios in negative, which again is a bad sign for the company showing that like their assets they
are not able to generate profits from their shareholders equity even. This negative value will
create a bad image for the company and the investors would be very much reluctant to invest in a
company having such state.
Growth Ratio
18. Earnings per Share
Company 2019 2018 2017 2016 2015

Engro Rs/Share 12.6 13 8.4 7 11.1
Dawood Rs/Share 11.6 14 8.9 8 11.5
Fauji Rs/Share 13.45 11.35 8.42 9.26 13.18
Fatima Rs/Share 5.75 6.32 5.04 4.66 4.41
Agritech Rs/Share -1.66 -8.52 -11.43 -6.33 -9.34
Earnings per share, also called net income per share, is a market prospect ratio that measures the
amount of net income earned per share of stock outstanding. In other words, this is the amount of
money each share of stock would receive after all of the profits were distributed to the
outstanding shares at the end of the year. It is a calculation that shows how profitable a company
is on a shareholder basis. Higher earnings per share are always better than a lower ratio because
this means the company is more profitable and the company has more profits to distribute to its
shareholders. Although many investors don't pay much attention to the EPS, higher earnings per
share ratio often make the stock price of a company rise. Since so many things can manipulate
this ratio, investors tend to look at it but don't let it influence their decisions drastically. By
analyzing fertilizer sector of the Pakistan, there is a mix trend of EPS among the companies.
Fauji Group of Companies has maintained a higher EPS ratio, again a brilliant sign of a company
in term of its market repute and profitability among the whole sector. It shows that the investors
of the Fauji group of Companies have satisfied in terms of market ratios. AGL has negative EPS
which shows that it has incurred loss and its repute in the market is not that good. Moreover, PFL
has zero EPS in both 2012 & in 2013
19. Dividend per Share
Company 2019 2018 2017 2016 2015

Engro Rs/Share 13 11 8.5 7 6
Dawood Rs/Share 14 12 9.5 8 7
Fauji Rs/Share 10.80 8.85 7.00 7.90 11.86
Fatima Rs/Share 26.59 36.47 30.88 36.89 44.73
Agritech Rs/Share 0 0 0 0 0
Dividend per Share (DPS) is the total amount of dividends attributed to each individual share
outstanding of a company. Calculating the dividend per share allows an investor to determine
how much income from the company he or she will receive on a per-share basis. Dividends are
usually a cash payment paid to the investors in a company, although there are other types of
payment that can be received. By analyzing the fertilizer sector of Pakistan it is evident that
Agritech Fertilizer maintained a very bad dividend per share over the five years as compared to
its competitors. The other competitors of Agritech Fertilizers i.e. Dawood, Fauji, Fatima and
Engro. Agritech had zero values over the time of five years. The company had this bad dividend
per share due to bad management. The other big competitors e.g., Engro never saw a negative
value or even zero. Engro had the highest Dividend per share among the five companies
following Dawood, Fauji to Fatima and then Agritech. So, if Agritech has to compete with the
giants of its industry it has to introduce new policies and have to bring change in its management
in order to improve its ratio and introduce new investors in the company.
20. Price Earnings Ratio
Company 2019 2018 2017 2016 2015

Engro Rs/Share 5.8 5.3 8.1 9.7 7.6
Dawood Rs/Share 6.8 5.5 9.1 10.78 7.9
Fauji Rs/Share 7.54 8.18 9.40 11.27 8.95
Fatima Rs/Share 4.63 5.77 6.13 7.92 10.15
Agritech Rs/Share -2.54 -0.55 -0.42 -2 -1
The price-to-earnings ratio (P/E ratio) is the ratio for valuing a company that measures its current
share price relative to its per-share earnings. The price-to-earnings ratio is also sometimes known
as the price multiple or the earnings multiple. P/E ratios are used by investors and analysts to
determine the relative value of a company's shares in an apples-to-apples comparison. It can also
be used to compare a company against its own historical record or to compare aggregate markets
against one another or over time. By looking at the table we can see that Agritech has a very bad
price earning share over the course of 5 years. The company had saw negative P/E ratio. The
ratio could be due to number of reasons ranging from policies, managements, discipline, capital
etc. The other competitors such as Engro and Dawood have great P/E ratio and because of which
they invite investors in the company, as those investors know, that the company has a sound
future.
COMPANY ANALYSIS
Agritech Fertilizer
Liquidity Ratios
1. Current ratio:
The current ratio is a liquidity ratio that measures a company's ability to pay short-term
obligations or those due within one year. It tells investors and analysts how a company can
maximize the current assets on its balance sheet to satisfy its current debt and other payables. It
is calculated by dividing your current assets by your current liabilities.
Year Current assets Current liabilities Current Ratio

(times)
2019 6,465,950,584 45,387,759,351 0.142460229
2018 4,989,660,677 45,988,959,989 0.108496924
2017 4,678,308,268 40,533,935,590 0.115417075
2016 4,489,533,727 34,696,588,234 0.129394098
2015 4,426,809,756 30,123,250,816 0.146956575
Agritech had a bad current ratio throughout these 5 years, the company doesn't have enough
liquid assets to cover its short-term liabilities as a good current ratio is between 1.2 to 2
consistently, which means that the business has 2 times more current assets than liabilities to
cover its debts on contrary Agritech has a current ratio below 0.5 throughout the past 5 years this
reflects the company’s poor financial performance.
2. Quick Ratio (Acid ratio):
The quick ratio is an indicator of a company's short-term liquidity position and measures a
company's ability to meet its short-term obligations with its most liquid assets. The current ratio
may be confused with the quick ratio as both Current ratio and quick ratio are applied to measure
the company's liquidity, but they use different formulas.
There are two ways to calculate the quick ratio:
 QR = (Current Assets – Inventories – Prepaid) / Current Liabilities.

 QR = (Cash + Cash Equivalents + Marketable Securities + Accounts Receivable) /
Current Liabilities.
Year Current inventory prepaid Current Quick ratio
assets liabilities (times)
2019 6,465,950,58 2,098,888,05 2,872,621,39 45,387,759,351 0.032926083
4 8 9
2018 4,989,660,67 2,054,694,59 2,014,711,11 45,988,959,989 0.020010345
7 8 7
2017 4,989,660,67 2,054,694,59 1,744,236,38 40,533,935,590 0.029376118
7 8 6
2016 4,989,669,67 2,054,694,59 1,657,045,06 34,696,588,234 0.036831316
7 8 9
2015 4,989,660,67 2,054,694,59 918,899,967 30,123,250,816 0.066937342
7 8
While a company should have a quick ratio higher than 1 so it can instantly get rid of its current
liabilities but Agritech Company has a quick ratio of less than 1, hence it may not be able to fully
pay off its current liabilities in the short term. Furthermore, considering the quick ratio of the
past five years it means that the company highly depends on its inventories.
Activity Turnover Ratios
The asset turnover ratio measures the efficiency of a company's assets to generate revenue or
sales. It compares the dollar amount of sales or revenues to its total assets. The asset turnover
ratio calculates the net sales as a percentage of its total assets.
Total asset turnover= Net sales ÷ Total assets
Year Net Sales Total Assets Total Asset

turnover
(times)
2019 12,174,418,992 69,135,918,719 0.176093979
2018 4,533,316,414 46,209,441,515 0.098103638
2017 3,551,518,706 47,088,681,193 0.075421919
2016 8,238,583,282 47,904,595,701 0.171978975
2015 3,542,570,270 48,984,232,641 0.072320624
Agritech ratio total asset turnover ratio is less than 0.5; it’s not good for the company as the total
assets aren’t able to produce enough revenue at the end of the year. It also implies inefficient
management of assets and internal problems of the company.
4. Inventory turnover ratio (Times):
Inventory turnover is a ratio that measures the number of times inventory is sold or consumed in
a given time period.
Inventory turnover is calculated by dividing the cost of goods sold (COGS) by average
inventory.
Year Cost of Sales Average Inventory Inventory Turnover

(times)
2019 10,643,275,951 2,098,888,058 5
2018 4,841,635,211 2,054,694,598 2.356377058
2017 4,841,882,062 2,089,007,431 2.289068957
2016 6,987,337,826 2,049,475,897 3.409329105
2015 4,252,903,869 2,050,290,642 2.074293167
The low turnover in years 20115-18 implies weak sales and possibly incompetence, excess
inventory, also overstocking. It may also indicate to poor liquidity of the company. However, in
2019 the turnover is 5 and a turnover ratio between 5 to 10 reflects that you are managing your
company’s inventory efficiently. So, we can imply that Agritech has improved in managing its
inventory in 2019 considering the last five years data.
5. Receivable Turnover Ratio (Times):
The receivables turnover ratio is an accounting measure used to quantify a company's

effectiveness in collecting its receivables or money owed by clients.
It is calculated by dividing your net credit sales by your average accounts receivable
Company 2019 2018 2017 2016 2015

Agritech Times 6.46 3.24 3.53 5.27 4.02
As the ratio shows how well a company uses and manages the credit it extends to customers and
how quickly that short-term debt is collected or is paid. In simple terms it means how many
times the company has collected its receivables and turned them to cash in the period of time. In
this case the Receivable turnover is fluctuating. After 2016 the receivables were decreasing like
in 2018 the receivables were 3.24 times which might reflects that the company had not been able
to collect receivables efficiently however, in 2019 it increased to 6.46 times which shows
improvement but still Agritech should strive to improve considering the low values.
6. Receivable Turnover Ratio (Days):
Company 2019 2018 2017 2016 2015

Agritech Days 56.5 112.65 103.39 69.26 90.79
During the last five years the receivable turnover has been fluctuating. In 2015 its 90.79 days,
and then in 2016 the span shortened to 69.25 days which indicated that company was paid back
in less time. Then again in 2017 it drastically increased to 103 day implying that company was
not paid off in the minimum time. In 2018, the days continued to increase which could have
volatile effects on the company. In 2019 it again improved to 56.501 days showing improving.
7. Payables Turnover Ratio (Times):
Accounts payable turnover ratio evaluates how fast a company pays off its creditors or suppliers.
The ratio shows how many times in a given period a company pays its average accounts payable.
It is calculated by dividing the total purchases by the average accounts payable for the year.
Company 2019 2018 2017 2016 2015

Agritech Times -0.18 -0.112 -2.0035 -0.089 -0.1008
The given Negative turnover ratio of Agritech throughout past 5 years indicates that a company
is taking longer to pay off its suppliers than in previous periods. It signals that the company is in
financial distress. The reason of this could be due to a company having a poor collection process,
bad credit policies, or customers that are not financially viable or creditworthy.
8. Payables Turnover Ratio (Days):
Company 2019 2018 2017 2016 2015
Agritech Days -0.005 -0.005 -0.005 -0.005 -0.005
The negative Payable turnover ratio in days of Agritech shows that the company is slow in
making payments to suppliers for purchases on credit.
Leverage Ratio
9. Debt to Equity Ratio:
Debt to equity ratio is used to calculate the financial leverage of the company.
It is calculated by dividing a company's total liabilities by its shareholder equity.

Company 2019 2018 2017 2016 2015
Agritech Percentag 5.40 -10.45 -649.95 7.25 6.1
e
The debt-to-equity ratio in 2019, 2016 and 2015, is high which means that debt holders have
more claim on assets than equity holders. A high debt to equity ratio usually means that a
company has been aggressive in financing growth with debt and often results in volatile
earnings.
While, the values of 2017-18 are negative which might reflect that the company has interest rates
on its debts that are greater than the return on investment and has negative net-worth. Hence,
Agritech might be facing financial instability in past five years.
10. Debt to Total Asset Ratio:
Company 2019 2018 2017 2016 2015
Agritech Times 1 1 1 1 1
Agritech has throughout Debt to total asset ratio 1 past 5 years, it means that the company owns
the same amount of liabilities as its assets. Moreover, it indicates that the company is highly
leveraged.
11. Return on Capital Employed (%)
Return on capital employed (ROCE) is a financial ratio that can be used in assessing a company's
profitability and capital efficiency.
Company 2019 2018 2017 2016 2015

Agritech Percentag 0.1 -4.79 -0.27 0.03 -0.08
e
Agritech has low return on capital employed percentages throughout last five years. In 2015 with
negative percentage of -0.08 shows capital in efficiency. In 2016, it slightly increased to 0.03
which still shows poor use of its capital sources. Then in 2016 and 2017 it consistently decreased
hence the company might have posted a very high Return on Equity. In 2019, it again slightly
increased to 0.1 % which still shows company’s inefficiency.
Coverage Ratio
12. Interest Coverage:
The interest coverage ratio is used to determine how easily a company can pay its interest
expenses on outstanding debt. The ratio is calculated by dividing a company's earnings before
interest and taxes (EBIT) by the company's interest expenses for the same period.
Company 2019 2018 2017 2016 2015

Agritech Times 0.71 -0.41 -0.82 0.21 -0.65
Analyzing the data of Agritech, the Interest coverage has been less than 1 throughout the 5 years
data that means the company's current earnings might be insufficient to service its outstanding
debt. It can also be an early warning sign of impending bankruptcy. Though 2019 and 2016 have
positive value but still as it is lower than 1 it indicates lower assets than liabilities to cover their
debts.
13. Gross Profit Margin (%)
Gross profit shows how well a company generates revenue from its costs that are directly tied to
production.
Company 2019 2018 2017 2016 2015

Agritech Percentag 12.58 -6.8 -34.64 15.19 -20.05
e
The five years data of Agritech shows fluctuating data which tells that company has failed to
stabilize its gross profit margin. The company’s cost of production was more than its sales in
2018, 2017 and 2015. It indicates that company is unable to control costs and managing its
operations hence is facing loss. In 2019 and 2016 the company is making 12.58 and 15.19%
gross profit margin.
14. Net Profit Margin:
The net profit margin is equal to how much net income or profit is generated as a percentage of
revenue. Net profit margin is the ratio of net profits to revenues for a company or business
segment.
To calculate your net profit margin, divide your net income by your total sales revenue.
Company 2019 2018 2017 2016 2015

Agritech Percentag -5.36 -74 -121 -28 -98.52
e
As, illustrated the net profit Margin of Agritech is having negative percentage value throughout
these 5 years. It indicates that the company is making less money than it is spending. It could
also be due to company’s inefficient management and inability to control costs. The company is
going in loss.
15. Return on Investment Ratio (Return on Assets):
Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets.
ROA gives a manager, investor, or analyst an idea as to how efficient a company's management
is at using its assets to generate earnings.
ROA = Net Income/Total Assets
Company 2019 2018 2017 2016 2015

Agritech Percentag -0.94 -7.24 -9.15 -4.82 -7.13
e
A negative percentage of return on assets of past 5 years as shown in the table indicates that the
company is not making enough income from the use of its assets.
There might be an unwise investment on the part of management and the machinery may not be
increasing production efficiency or lowering overall production costs enough to positively
impact the company's profit margin. It further reflects the company’s financial loss or lackluster
returns on an investment during these periods of time.
The return on equity ratio or ROE is a profitability ratio that measures the ability of a firm to
generate profits from its shareholders investments in the company.
ROE= Net Income/ Shareholders Equity
Company 2019 2018 2017 2016 2015

Agritech Percentag -6.08 0 0 -52.4 -65.77
e
The low and negative ROA of Agritech suggests that the company can't use its assets effectively
to generate income, thus it's not a favorable investment opportunity. Moreover, the company is
having more invested capital and earning lower profits.
Market Ratios
17. Earnings per share
Company 2019 2018 2017 2016 2015
Agritech Rs./Share -1.66 -8.52 -11.43 -6.33 -9.34
Earnings per share, or EPS, tells you how well a company is generating profit for its
shareholders. Throughout last five years of Agritech earnings per share the company is losing
money.
18. Dividend per share

Company 2019 2018 2017 2016 2015
Agritech Rs./Share 0 0 0 0 0
Agritech is having 0% yield throughout last five years. It is warning sign that a company is
facing adverse economic conditions or financial hardships. Although companies do not have to
pay dividends, those that have already committed to doing so could face investor backlash in the
event they fail to pay out profits.
19. Price Earnings share
Company 2019 2018 2017 2016 2015
Agritech Rs./Share -2.54 -0.55 -0.42 -2 -1
Agritech is showing negative P/E ratio past five years. It implies that the company is not
generating sufficient profit and run the risk of bankruptcy.
Engro Fertilizer
Liquidity Ratios
1. Current Ratio
Company 2019 2018 2017 2016 2015

Engro Times 1.1 1.1 1.0 1.2 0.9
In 2015 the current ratio of Engro fertilizers was less than 0.9 this means that the company is
unable to pay off its short-term cash liabilities. This reflects a company's poor financial
performance, but does not necessarily imply that they will be unable to survive. However, over
the next 4 years, from 2016 till 2019, the current ratio has been above 1 which implies that the
company has financial assets to be able to pay for their short-term expenditures. The higher the
percentage, the more competent the entity is. The current ratio was 1.2 in 2016 which was the
highest ratio in comparison to other years analyzed. The current ratio of Engro fertilizers offers
valuable intuition into how liquid the company is and thus contributes data to the company's
financial health.
2. Quick Ratio
Company 2019 2018 2017 2016 2015

Engro Times 0.8 0.7 0.7 0.7 0.5
When the quick ratio greater than one means that the existing assets of a company are higher
than current liabilities after deducting inventories. This then suggests that the firm will use its
existing assets to pay off current liabilities. The quick ratio of Engro fertilizers stays between 0.5
till 0.8 from 2015 till 2019, which means that the ratio is less than 1 throughout the tenure of 5
years and the company is in a more precarious situation since it does not have enough current
assets to offset near-term debt without inventory. In order to keep their operating in the short
term, this would mean that they rely heavily on successful inventory turnover. A significant
downturn in sales could have a negative impact on the company. This low ratio will also cause
uncertainty because of the short-term risk with potential buyers and creditors
Leverage Ratios
Company 2019 2018 2017 2016 2015

Over the last 5 years, the debt to equity ratio has been quite high. Although if a lot of debt is used
to finance growth, the company will produce more revenue than it would have without this
funding. Debt to equity ratio has been highest in 2015 with a percentage of 85.1%. The more
debt the company uses relative to equity, the higher the ratio is, but such a high ratio can cause
problems for the company. However, there has been a consistent minor decrease during the next
3 years i.e. 2016, 2017 and 2018 at a debt to equity ratio of 83%, 72.8% and 67.7% respectively.
This implies less debt of equity for every dollar of equity the company has. However, the debt to
equity ratio increased again in 2019 at a percentage ratio of 71.5%. High risk is also correlated
with a high debt/equity ratio; this means that Engro fertilizer has been aggressive in funding its
debt growth which can be dangerous for the company.
4. Debt to Total Asset Ratio (Leverage Ratio)
Company 2019 2018 2017 2016 2015

Engro Times 0.7 0.7 0.7 0.8 0.9
The debt to Asset Ratio of the company is less than 1 from 2015 till 2019. This indicates that the
business owns more assets than its liabilities. In 2015 the debt to asset ratio was 0.9% which
means that 90% of the company’s assets are financed by creditors and 10% by its owners
(shareholders). In 2016 it decreased to 0.8% and then decreased to 0.7% in 2017 and stayed
constant in 2018 and 2019. If the company’s debt to asset ratio in greater than 1 that would cause
problem as it indicates all the assets are debt financed and the firm has more liabilities than
assets. Fortunately, that is not the situation here and the company has maintained its ratio less
than 1.
5. Return on Capital Employed
Company 2019 2018 2017 2016 2015

Although there has been rise and fall in the return on capital employed from 2015 till 2019 but
Engro fertilizer has managed to maintain a profitable return on capital employed over the last 5
years. In 2015 the ROCE was 18.9% which indicates the productivity of the company. However,
ROCE fell down to 12% in 2016. The company managed to consistently increase the ROCE
from 14.9% in 2017 to 23.3% in 2018 which was the highest ROCE ratio over the last 5 years.
This explains the profit the company is producing per 1$ of their capital employed. It did fall
down to 22.4% in 2019 but on the whole the company was earning a profitable return on capital
employed. Greater ROCE implies greater efficiency of the company.
Coverage Ratios
6. Interest coverage
Company 2019 2018 2017 2016 2015

Engro Times 8 12.7 7.3 5.3 5.6
The interest coverage ratio has been changing during the last 5 years. In 2015, the company’s
interest ratio was 5.6%. The interest coverage percentage shows how easily the company will be
able to pay of its interest and any outstanding debt. This percentage decreased to 5.3% in 2016
that was the lowest as compared to all 5 years, which shows less ability of the company to pay
off its debts and interest expenses. However, the interest coverage ratio increased consistently in
the next 2 years. From 5.3%, it increased to 7.3% in 2017 and 12.7% in 2018. This high coverage
ratio is better for the company as it allows the company to pay of its debts and expenses. The
ratio fell down to 8% in 2019 which might have cause a problem for the company.
Activity/ Turnover Ratios
7. Receivable turnover ratio (times)
Company 2019 2018 2017 2016 2015

Engro Times 10.4 15 11.9 14.1 56.6
In the last 5 years, the company has varying receivable turnover rates. In 2015, the company’s
receivables turnover ratio was 56.6 times, which in the highest as compared to other years. This
high turnover ratio of receivables can mean that the collection of accounts receivable by the
company is productive and that the company has a high percentage of quality customers who
easily pay off their debts. This is quite beneficial for the company. However, there was a major
decrease in the company’s receivable turnover. In 2016, the receivables turnover decreased to
14.1 times which might imply that the company has not been able to collect receivables
efficiently or customers have not paid off their debt in time. It further decreased to 11.9 times in
2017. Receivables turnover increased to 15 times in 2018 that shows some improvement for the
collection of receivables. However, it again decreased to 10.4 times in 2019 indicating that the
company might be facing difficulties in collecting receivables form their customers.
8. Receivables turnover (Days)
Company 2019 2018 2017 2016 2015

Engro Days 35 24 31 26 6
During the last 5 years, the receivables turnover in days has been increasing. In 2015 the
receivables turnover was only 6 days which indicates that the company was paid back by their
customers in the minimum time span. However, this started to increase as in 2016 the receivables
turnover was 26 days which further increased to 31 days in 2017. The turnover decreased to 24
days in 2018 but there was a huge increase in 2019 when the receivables turnover raised to 35
days. This can have an adverse effect on the company as increasing number of days indicates
that the company takes more number of days in collecting receivables from the customer.
9. Payables Turnover Ratio (Times)
Company 2019 2018 2017 2016 2015

Engro Times 2.5 2.9 2.9 3.2 2.6
Payable turnover ratio for the company constantly changed over the last 5 years. In 2015 the
payables turnover ratio was 2.6times which increased to 3.2 times on 2016 which was the highest
ratio in the last 5 years. This high ratio indicates that payments for credit purchases were made to
suppliers in time. In 2017 and 2018 the payables turnover ratio decreased and was consistent at
2.9 times which further decreased to 2.5 times in 2019. This low ratios indicates that slow
payments were made for credit purchases to the suppliers.
10. Payables Turnover Ratio (Days)
Company 2019 2018 2017 2016 2015

Engro Days 149 126 125 114 139
Engro fertilizers have a varying payables turnover Ratio during the last 5 years. . In 2015, they
had a payables turnover ratio of 139 days. The more number of days the company takes in
making payments shows weak financial condition of the company. However, the payables
turnover ratio was 114 days in 2016. This decrease means that the company was financially
stable and was able to pay off its suppliers in less number of days. The payables turnover
consistently increased in the next 3 years. In 2017 the ratio was 125 days and 126 days in 2018
and 149 days in 2019. In 2019 the ratio was the greatest as compared to all other years. This
means that the company is facing poor financial state as it has not been able to pay back its
suppliers soon.
Company 2019 2018 2017 2016 2015

Engro Times 6.8 7.7 7.5 7.5 13.7
The company has maintained a good percentage of inventory turnover ratios during 2015 till
2019. The highest inventory turnover was 13.7 times in 2015. This indicates strong sales made
by the company and has sold and replaced their inventory over a given period. It decreased to
7.5 times in 2016 and 2017. In 2018 the inventory turnover again increased to 7.7times which
might be due to increase in sales. However, the inventory turnover decreased to 6.8 times which
was the lowest ratio in comparison to the data of 5 years.
Company 2019 2018 2017 2016 2015

Engro Days 54 47 49 48 27
The company’s inventory turnover ratio in days has constantly increased over the last 5 years. In
2015 the inventory turnover ratio was 27 days which indicates that the company was able to turn
its inventory into revenue efficiently in a few days. However, the inventory turnover ratio
increased to 48 days in 2016, 49 days in 2017 and 47 days in 2018. This high inventory indicates
that the company was inefficient and was able to turn its inventory into revenue in more days as
compared to other years. The inventory turnover ratio decreased to 54 days in 2019 that shows
the company was working efficiently in turning its inventory into revenue.
13. Total Asset Turnover Ratio
Company 2019 2018 2017 2016 2015

Engro Times 0.99 0.95 0.72 0.67 0.78
Engro fertilizers have high asset turnover ratio. In 2015 the asset turnover ratio was 0.78 times
which means that the company is generating profit from its assets. Although it decreased to 0.67
in 2016, the company is still generating profit. The company’s asset turnover ratio increased
consistently from 2017 till 2019. The ratio increased to 0.72 times in 2017, 0.95 times in 2018
and 0.99 times in 2019. The higher in asset turnover, the higher amount of profit is generated by
the company. Overall, the company is effectively producing sales and generating revenue.
14. Gross Profit Margin

Company 2019 2018 2017 2016 2015
The company has maintained an effective gross profit margin from 2015 till 2019. Gross profit
margin was highest in 2015 with a ratio of 34.8%. A higher gross profit margin means that the
company will have a high net profit as percentage of sales as the company would have been
managing its operational and administrative costs effectively. With a major decrease, the gross
profit margin ratio was 25.1% in 2016. This would have had decreased the net profit of the
company as well. However, from 2017 till 2019 the company has managed to maintain a
constantly increasing gross profit margin from 30.1% in 2017 to 32.3% in 2018 and 32.6% in
2019 indicating a better net profit margin and financial condition of the company.
Company 2019 2018 2017 2016 2015

There have been changes in the company’s net profit margin during the last 5 years. There has
been a constant increase and decrease. The ratio was highest in 2015 when the company had a
net profit value of 17.3%. This high net profit margin means that Engro fertilizers turned their
sales into real profit more efficiently. A high net profit margin means that the company is
efficiently managing its costs and selling their goods at a price greater than their expenses.
However, in 2016 the company had a net profit margin of 13.4% which is the lowest percentage
in comparison to all 5 years. This immense fall could be due to inefficient management of the
company. This low net profit margin implies that an inefficient cost structure, mismanaged
expenses or weak pricing techniques are used by the company. However, during 2017 and 2018
the company managed to increase its net profit margin to 14.5% and 15.9%, respectively. The
company again faced a low net profit ratio when it decreased to 13.9% in 2019. Overall, Engro
fertilizer has managed to balance their net profit margins over the last 5 years.
16. Return on investment Ratio:
Company 2019 2018 2017 2016 2015

Engro fertilizers have a positive ROI throughout the last 5 years, from 2015 till 2019. The
percentage of Return on investment kept evolving between 8.9% and 15.2 %which mean that
since total returns are higher than any related costs, net returns are positive. Return on
investment was 13.6% in 2015 which fell down to 8.9% in 2016 which is the lowest as compared
to other years. However, the company managed to increase its ROI 10.4% by 2017. 2018 shows
the highest ROI percentage which is 15.2 which shows a valuable and clear indication of how
efficient Engro fertilizer earns its income from an investment. In 2019 there was again a decrease
and the ROI of the company was 13.8%. Therefore, there has been an overall rise and fall in
percentages of return on investment implying changing yet positive return on investment of
Engro fertilizer in the last 5 years. A negative ROI implies that total costs are higher than returns.
However, ROI did not appear negative in any year under analysis. A positive ROI is beneficial
for Engro fertilizer as it attracts investors that prefer companies that are effective in producing
high returns using the investment.
Company 2019 2018 2017 2016 2015

Engro Percentag 38 39.6 26.5 22.1 28.6
e
A high Return on Equity (ROE) of Engro fertilizer demonstrates that they have enough profit to
pay their shareholders dividends. The higher ROE value indicates that the higher the dividends
distributed to shareholders and the stock return shown directly will also increase. From 2015 till
2019, there has been a rise and fall in return on equity percentage. This rising ROE means that
the business is growing its profit generation. It also shows how well shareholder capital is
deployed by the management Engro fertilizers. In 2015 the ROE was 28.6 % which decreased to
22.1% in 2016, which is lowest as compared to other years. There was a consistent rise in 2017
till 2018 from 26.5% to 39.6% which is the highest ROE, demonstrating a great percentages
increase within these 2 years. However, in 2019, there was a minor decrease in ROE again to
38%. On the whole, this increase in ROE implies that the management team of the company is
more successful in using investment finance to expand its business and is more likely to provide
better returns to investors.
Growth Ratios
Company 2019 2018 2017 2016 2015

Engro Rs./Share 12.6 13 8.4 7 11.1
Engro fertilize have an unstable earnings per share over the last 5 years. There has been increase
and decrease in the ratio every year. In 2015, the earnings per share of the company was Rs.11.1/
share that decreased to Rs.7/share in 2017 which was the lowest ratio earned by the company in
last 5 years. However, the company managed to increase their earnings per share in 2017 to
Rs.8.4/share which further increased to Rs.13/share in 2018 and was the earning per share in the
last 5 years. There was a minor decrease in earnings per share in 2019 when the ratio was
Rs.12/share. The high earnings per share indicate better profitability by the company. On the
whole the company has managed to gain profitable earnings per share. This high earning per
share shows higher value as investors will pay more for the shares of the company if they believe
that the company has higher profits relative to its share price.
Company 2019 2018 2017 2016 2015

Engro Rs./Share 13 11 8.5 7 6
Dividend per share of Engro fertilizer was at Rs.6/share in 2015 which was the lowest in
comparison to 5 years. This low dividend per share indicates low earnings and financial
hardships for the company or could also be due to debt reduction or reinvestment in the
operations of the company. However, dividend per share of the company increased consistently
since 2016. It increased from Rs. 7/share to 8.5/share, 11/share and 13/share in 2016, 2017, 2018
and 2019 respectively. A steady or increasing payment of dividends by the business can be a sign
of stability and growth.
20. Price earnings share
Company 2019 2018 2017 2016 2015

Engro Times 5.8 5.3 8.1 9.7 7.6
Engro fertilizer has varying price earnings share over the last 5 years. Price earning share was
7.6times in 2015 but raised to 9.7 times in 2016 which was the highest ratio the company earned
in 5 years. High price earnings share indicates positive future results for the company that
attracts investors who have higher expectations and are prepared to pay more for future earnings
growth. However, price earning share ratio of the company decreased during the next 2 years. In
2017 the ratio was 8.1 times which further decreased to 5.3 in 2018 which the lowest ratio was
earned by the company in 5 years. In 2019 the company managed to increase their price earning
share to only 5.8 times. This low price earnings ratio shows that they are undervalued because
their stock price trading is lower than the fundamentals.
Fauji Fertilizers
Liquidity ratio
1. Current Ratio:
Company 2019 2018 2017 2016 2015

Fauji Times 0.91 0.95 0.95 0.91 0.85
This is mainly the ratio of current asset to current liability. Moreover, it is the crudest form of
liquidity ratio. The analysis suggest that the company will experience some problems when it
comes to satisfying their current liabilities. The ratio is stable over first four years. Year 5 shows
greater variance as compare to proceeding years this could indicates problems in coming years.
In 2015 the ratio is 0.85 which is increasing to 0.91 in 2016 an 0.95 in 2017 which is the highest
and remained constant till 2018 showing the company was more competent. In 2019 this ratio
decreased by 0.04.
2. Quick Ratio:
Company 2019 2018 2017 2016 2015

Fauji Times 0.81 0.79 0.88 0.72 0.58
The data reinforces are analysis for the current ratio. Fairly stable quick ratios for initial four
years indicate that the company was not experiencing some significant problems. The greater
deviation for year five however can proof to be problematic.
Leverage Ratios
Company 2019 2018 2017 2016 2015

Fauji fertilizers were at the highest risk in 2018 and 2019 respectively. The company was more
financially stable in 2015 as for there were less liabilities and more equities but with the year
passes there is increase the creditors increases so does the liabilities. The company in financially
unstable compared to the recent years and is facing more risk.
4. Debt to Total Assets Ratio: (Leverage Ratio)
Company 2019 2018 2017 2016 2015

Fauji Times 0.7 0.7 0.7 0.6 0.6
(shareholders). In 2016 it remained constant to 0.6% in 2017 increased by 0.1 making it to 0.7%
staying constant in 2018 and 2019. If the company’s debt to asset ratio in greater than 1 that
would cause problem as it indicates all the assets are debt financed and the firm has more
liabilities than assets. Fortunately, that is not the situation here and the company has maintained
its ratio less than 1.
5. Return on capital employed
Company 2019 2018 2017 2016 2015

Fauji Days 62.39 55.57 40.48 44.13 60.13
There has been rise and fall in the return on capital employed from 2015 till 2019 but Engro
fertilizer has managed to maintain a profitable return on capital employed over the last 5 years.
In 2015 the ROCE was 60.13% which indicates the productivity of the company was very well.
However, ROCE fell down to 44.13% in 2016 decreased to 40.48% in 2017. The company
managed to consistently increase the ROCE to 55.57% in 2018 to 62.39% in 2019 which was the
highest ROCE ratio over the last 5 years. This explains the profit the company is producing per
1$ of their capital employed. It increased to 62.39% indicates financial stability for the company.
Greater ROCE implies greater efficiency of the company.
Coverage Ratio
Company 2019 2018 2017 2016 2015

Fauji Times 10.6 14.3 7.4 8.2 17.6
There is a great fluctuation between the years from 2015 to 2019. The interest coverage ratio
shows how easy it is for the company to pay off its interest and debts. Year 2015 shows highest
ratio showing a good indicator for the company’s ability that it was doing well in paying off its
debt. This ability decreased in 2016 to 8.2 and more to 7.4 till 2017. As the operating profit
increased in 2018 so did the interest cost but the interest coverage ratio increased to 14.3
indicating stability for company. The ratio decreased more to 3.7 in 2019 where the ratio was
10.6 which gives indication of instability comparing the last year.
7. Receivable Turnover Ratio: (Times)
Company 2019 2018 2017 2016 2015

Fauji Times 12.3 28.6 22.60 23.97 65.36
The receivable turnover ratio was highest in 2015 which is 65.36 showing the good efficiency of
the company on collection of their receivables and shows that there was highest proportion of
quality customers in that year. In 2016 the turnover ratio decreased to 23.97 and further to 22.60.
In 2018 the company managed increase its ratio to 28.6 percent but in 2019 the ratio shows a
decrease to 12.3 showing that company is having a poor collection process, bad credit policies,
or customers that are not financially viable.
8. Receivable Turnover Ratio: (Days)
Company 2019 2018 2017 2016 2015

Fauji Days 30 13 16 15 6
There is increase in ratio throughout the years since 2015. The turnover ratio is highest when the
company was paid back by their customers in the minimum time span. This started to increase in
2016 from 6 in 2015 to 2016. This ratio increased to 16 days in 2017 and decreased to 13 in
2018. The highest ratio was in 2019 which was 30 days.
9. Payable turnover ratio in times:
Company 2019 2018 2017 2016 2015

Fauji Days 1.42 2.34 5.10 17.96 4.16
The ratio is showing a great fluctuation in throughout the five years. The year 2016 being and
outlier tend to be a great year as the company is suitable to receive the financial credit which
shows the financial stability of the company in the market.
10. Payables turnover in days:
Company 2019 2018 2017 2016 2015

Fauji Days 258 156 72 20 88
Nevertheless, these are the days for the company showing measures in days it will take for the
company to pay the creditors. The year 2016 again as being and outlier is considered to be the
great as it takes less days for the company to pay the creditors. The year 2019 tends to show a
that the financial instability for the company in the market.
11. Inventory Turnover Ratio: (Times)
Company 2019 2018 2017 2016 2015

Fauji Times 7.61 11.70 31.36 11.74 18.40
Average trend is on the rise this might mean that company is becoming increasingly efficient
with the management of its inventory. 2017 can be interpreted as a data outlier this substantial
increase might show inventory management problem for the year. However, this general rise in
the ratio may explain the fall in the current ratio.
12. Average Inventory Turnover: (Days)
Company 2019 2018 2017 2016 2015

Fauji Days 48 31 12 31 20
Time series analysis of the ratios show that something special was going in year 3. Moreover,
this could be the year of expansion or growth of the company. The general trend shows that
company is becoming increasingly efficient when it came to collection from the customer.
13. Total assets turnover:

Company 2019 2018 2017 2016 2015
Fauji times 0.69 0.72 0.84 0.80 1.06
High price earnings share indicates positive future results for the company that attracts investors
who have higher expectations and are prepared to pay more for future earnings growth. The
investors were more likely to attract in 2015 where the share is highest 1.06 which decreased
over time. The lowest was in 2019 showing a little instability regarding company’s performance
in opinion of investor
14. Gross Profit Margin Ratio
Company 2019 2018 2017 2016 2015

Fauji Days 29.06 26.40 19.95 24.77 34.05
A higher gross profit margin means that the company will have a high net profit as percentage of
sales as the company would have been managing its operational and administrative costs
effectively. The figures show variance in all the values over the 5 years. The highest was in 2015
which is 34.05 showing the net profit was affected afterwards till 2018. However, in 2019
company tried to show some stability.
Company 2019 2018 2017 2016 2015

Net profit margin in 20015 was highest in all which was 19.7 whereas it started decreasing till
2018 to 16.1, 11.8 and 13.6, respectively. Being the most important indicator for financial health
of the business as high net profit margin means that the company is efficiently managing its costs
and selling their goods at a price greater than their expenses. In 2015 was the highest 19.7
turning sales into profit more efficiently. The lowest net profit margin faced by the company was
in 2017 which was 11.8 then company started to prosper.
16. Return on Investment Ratio: (Return on Assets)
Company 2019 2018 2017 2016 2015

Total assets can be interpreted as summation of different sources of financing. Rising percentage
represents an improvement in performance or efficiency of the company. In 2015 the ratio was
the highest, a great indicator for the performance of the company.
Company 2019 2018 2017 2016 2015

Return on equity is also measure of operational efficiency of the company. The better measure of
operational efficiency is the ratio of operating profit to total equity. This excludes the effect of
the final cost and help us better understand that how lucrative future investing can be.
Growth Ratio
Company 2019 2018 2017 2016 2015

Fauji Rs./share 13.45 11.35 8.42 9.26 13.18
Company has unstable earnings per share over the time span of 5 years. In 2015, the earnings per
share of the company was Rs.13.18/ share that decreased to Rs.9.26/share in 2016 and more
decreased to 8.42 which was the lowest ratio earned by the company in last 5 years. However,
the company managed to increase their earnings per share in 2018 to Rs. 11.35/share which
further increased to Rs.13.45/share in 2019 which was the highest earning per share in the last 5
years. Overall, the company has managed to gain profitable earnings per share. This high earning
per share shows higher value as investors will pay more for the shares of the company if they
believe that the company has higher profits relative to its share price.
19. Dividend per share:
Company 2019 2018 2017 2016 2015

Fauji Rs./share 10.80 8.85 7.00 7.90 11.86
Dividend per share of company was at Rs.7/share in 2017 which was the lowest in comparison to
5 years. This low dividend per share indicates low earnings and financial hardships for the
company or could also be due to debt reduction or reinvestment in the operations of the
company. However, dividend per share of the company shows decrease in since 2015. It
decreased from Rs. 11.86/share to 7.90/share, 7.00/share and 8.85/share, 10.80/share in 2015,
2016, 2017, 2018 and 2019 respectively. A steady or increasing payment of dividends by the
business can be a sign of stability and growth which shows decrease till 2018 from 2015 but then
there is increase of 1.95 showing a little stability in financial status of the company.
20. Price earning share
Company 2019 2018 2017 2016 2015

Fauji times 7.54 8.18 9.40 11.27 8.95
Fauji fertilizers has varying price earnings share over the last 5 years showing fluctuation every
year. Price earning share was 8.95 times in 2015 but raised to 11.27 times in 2016 which was the
highest ratio the company earned in 5 years. High price earnings share indicates positive future
results for the company that attracts investors who have higher expectations and are prepared to
pay more for future earnings growth. However, price earning share ratio of the company
decreased during the next 2 years. In 2017 the ratio was 9.40 times which further decreased to
8.18 in 2018. In 2019 the share decreased to 7.54 which were the lowest in last 5 years. This
low-price earnings ratio shows that they are undervalued because their stock price trading is
lower than the fundamentals.
1. Dawood Fertilizers
Liquidity Ratios
1. Current Ratio:
Company 2019 2018 2017 2016 2015

Dawood Times 1.1 1.1 1.2 1.3 0.7
In 2015 the current ratio of Dawood fertilizers was less than 0.7 this means that the company is
unable to pay off its short-term cash liabilities. This reflects a company’s poor financial
performance, but does not necessarily imply that they will be unable to survive. However, over
the next 4 years, from 2016 till 2019, the current ratio has been above 1 which implies that the
company has financial assets to be able to pay for their short-term expenditures. The higher the
percentage, the more competent the entity is. The current ratio was 1.3 in 2016 which was the
highest ratio in comparison to other years analyzed. The current ratio of Dawood fertilizers
offers valuable intuition into how liquid the company is and thus contributes data to the
company’s financial health.
2. Quick Ratio:
Company 2019 2018 2017 2016 2015

Dawood Times 0.9 0.7 0.7 0.7 0.5
When the quick ratio greater than one means that the existing assets of a company are higher
than current liabilities after deducting inventories. This then suggests that the firm will use its
existing assets to pay off current liabilities. The quick ratio of Dawood fertilizers stays between
0.5 till 0.9 from 2015 till 2019, which means that the ratio is less than 1 throughout the tenure of
5 years and the company is in a more precarious situation since it does not have enough current
assets to offset near-term debt without inventory. In order to keep their operating in the short
term, this would mean that they rely heavily on successful inventory turnover. A significant
downturn in sales could have a negative impact on the company. This low ratio will also cause
uncertainty because of the short-term risk with potential buyers and creditors.
Leverage Ratios
Company 2019 2018 2017 2016 2015

Dawood Percentage 70.5 67.5 71.5 85 85.1
Over the last 5 years, the debt to equity ratio has been quite high. Although if a lot of debt is used
to finance growth, the company will produce more revenue than it would have without this
3 years i.e. 2016, 2017 and 2018 at a debt to equity ratio of 85%, 71.5% and 67.5% respectively.
This implies less debt of equity for every dollar of equity the company has. However, the debt to
equity ratio increased again in 2019 at a percentage ratio of 70.5%. High risk is also correlated
with a high debt/equity ratio; this means that Dawood fertilizer has been aggressive in funding its
debt growth which can be dangerous for the company.
4. Debt to Total Assets Ratio: (Leverage Ratio)
Company 2019 2018 2017 2016 2015

Dawood Times 0.8 0.7 0.7 0.8 0.9
(shareholders). In 2016 it decreased to 0.8% and then decreased to 0.7% in 2017 and stayed
constant in 2018 and 2019. If the company’s debt to asset ratio in greater than 1 that would cause
problem as it indicates all the assets are debt financed and the firm has more liabilities than
assets. Fortunately, that is not the situation here and the company has maintained its ratio less
than 1.
Company 2019 2018 2017 2016 2015

Dawood fertilizer has managed to maintain a profitable return on capital employed over the last
5 years. In 2015 the ROCE was 64.81 % which indicates the productivity of the company.
However, ROCE increased to 136.79% in 2016. The company managed to consistently increase
the ROCE from 29.37% in 2017 to 49.56% in 2018. This explains the profit the company is
producing per 1$ of their capital employed. It did fall down to 46.53% in 2019 but on the whole
the company was earning a profitable return on capital employed. Greater ROCE implies greater
efficiency of the company.
Coverage Ratio
Company 2019 2018 2017 2016 2015

Dawood Times 8.8 12.6 7.7 5.8 5.9
interest ratio was 5.9%. The interest coverage percentage shows how easily the company will be
able to pay of its interest and any outstanding debt. This percentage decreased to 5.8% in 2016
that was the lowest as compared to all 5 years, which shows less ability of the company to pay
off its debts and interest expenses. However, the interest coverage ratio increased consistently in
the next 2 years. From 5.8%, it increased to 7.7% in 2017 and 12.6% in 2018. This high coverage
ratio is better for the company as it allows the company to pay of its debts and expenses. The
ratio fell down to 8.8% in 2019 which might have cause a problem for the company.
Activity Ratio
7. Receivable Turnover Ratio: (Times)
Company 2019 2018 2017 2016 2015

Dawood Times 10.3 14 11.5 13.1 56.6
receivables turnover ratio was 56.6 times, which in the highest as compared to other years. This
2017. Receivables turnover increased to 14 times in 2018 that shows some improvement for the
collection of receivables. However, it again decreased to 10.3 times in 2019 indicating that the
company might be facing difficulties in collecting receivables form their customers.
8. Receivable Turnover Ratio: (Days)
Company 2019 2018 2017 2016 2015

Dawood Days 37 23 30 25 7
During the last 5 years, the receivables turnover in days has been increasing. In 2015 the
receivables turnover was only 7 days which indicates that the company was paid back by their
customers in the minimum time span. However, this started to increase as in 2016 the receivables
turnover was 25 days which further increased to 30 days in 2017. The turnover decreased to 23
days in 2018 but there was a huge increase in 2019 when the receivables turnover raised to 37
days. This can have an adverse effect on the company as increasing number of days indicates
that the company takes more number of days in collecting receivables from the customer.
Company 2019 2018 2017 2016 2015

Dawood Times 2.81 3.35 3.27 4.89 5.25
Payable turnover ratio for the company constantly changed over the last 5 years. In 2015 the
payables turnover ratio was 5.25 times which is the highest and then it decreased to 4.89 times
on 2016. This high ratio indicates that payments for credit purchases were made to suppliers in
time. In 2017 and 2018 the payables turnover ratio decreased and was consistent at 3.55 and 3.27
times which further decreased to 2.18 times in 2019. This low ratio indicates that slow payments
were made for credit purchases to the suppliers.
10. Payables Turnover Ratio (Days)
Company Days 2019 2018 2017 2016 2015

Dawood 167 108 111 74 69
Dawood fertilizers have a varying payables turnover Ratio during the last 5 years. In 2015, they
had a payables turnover ratio of 69 days. The more number of days the company takes in making
payments shows weak financial condition of the company. However, the payables turnover ratio
was 74 days in 2016. This decrease means that the company was financially stable and was able
to pay off its suppliers in less number of days. The payables turnover consistently increased in
the next 3 years. In 2017 the ratio was 111 days and 108 days in 2018 and 167 days in 2019. In
2019 the ratio was the greatest as compared to all other years. This means that the company is
facing poor financial state as it has not been able to pay back its suppliers soon.
11. Inventory Turnover Ratio: (Times)
Company 2019 2018 2017 2016 2015

Dawood Times 6.7 8.7 7.5 10.5 13.9
The company has maintained a good percentage of inventory turnover ratios during 2015 till
2019. The highest inventory turnover was 13.9 times in 2015. This indicates strong sales made
by the company and has sold and replaced their inventory over a given period. It decreased to
7.5 times in 2016 and 2017. In 2018 the inventory turnover again increased to 8.7times which
might be due to increase in sales. However, the inventory turnover decreased to 6.7 times which
was the lowest ratio in comparison to the data of 5 years.
12. Inventory Turnover Ratio: (Days)
Company 2019 2018 2017 2016 2015

Dawood Days 50 45 48 47 29
The company’s inventory turnover ratio in days has constantly increased over the last 5 years. In
2015 the inventory turnover ratio was 29 days which indicates that the company was able to turn
its inventory into revenue efficiently in a few days. However, the inventory turnover ratio
increased to 47 days in 2016, 48 days in 2017 and 48 days in 2018. This high inventory indicates
that the company was inefficient and was able to turn its inventory into revenue in more days as
compared to other years. The inventory turnover ratio increased to 50 days in 2019 that shows
the company was working efficiently in turning its inventory into revenue.
Company 2019 2018 2017 2016 2015

Dawood Times 0.99 0.93 0.75 0.67 0.78
Dawood fertilizers have high asset turnover ratio. In 2015 the asset turnover ratio was 0.78 times
which means that the company is generating profit from its assets. Although it decreased to 0.67
in 2016, the company is still generating profit. The company’s asset turnover ratio increased
consistently from 2017 till 2019. The ratio increased to 0.75 times in 2017, 0.93 times in 2018
and 0.99 times in 2019. The higher in asset turnover, the higher amount of profit is generated by
the company. Overall, the company is effectively producing sales and generating revenue.
Company 2019 2018 2017 2016 2015

constantly increasing gross profit margin from 27.07 % in 2017 to 29.79% in 2018 and 30.4% in

Company 2019 2018 2017 2016 2015
net profit value of 17.8%. This high net profit margin means that Dawood fertilizers turned their
However, in 2016 the company had a net profit margin of 12.4% which is the lowest percentage
in comparison to all 5 years. This immense fall could be due to inefficient management of the
company. This low net profit margin implies that an inefficient cost structure, mismanaged
expenses or weak pricing techniques are used by the company. However, during 2017 and 2018
the company managed to increase its net profit margin to 13.5% and 16.9%, respectively. The
company again faced a low net profit ratio when it decreased to 14.9% in 2019. Overall, Dawood
fertilizer has managed to balance their net profit margins over the last 5 years
16. Return on Investment Ratio: (Return on Assets)
Company 2019 2018 2017 2016 2015

Dawood fertilizers have a positive ROI throughout the last 5 years, from 2015 till 2019. The
percentage of Return on investment kept evolving between 8.9% and 15.5 %which mean that
since total returns are higher than any related costs, net returns are positive. Return on
investment was 11.6% in 2015 which fell down to 8.9% in 2016 which is the lowest as compared
to other years. However, the company managed to increase its ROI 9.4% by 2017. 2018 shows
the highest ROI percentage which is 15.5 which shows a valuable and clear indication of how
efficient Dawood fertilizer earns its income from an investment. In 2019 there was again a
decrease and the ROI of the company was 13.8%. Therefore, there has been an overall rise and
fall in percentages of return on investment implying changing yet positive return on investment
of Dawood fertilizer in the last 5 years.
Company 2019 2018 2017 2016 2015

Dawood Percentage 38 39.8 27 22.1 29.6
A high Return on Equity (ROE) of Dawood fertilizer demonstrates that they have enough profit
to pay their shareholders dividends. The higher ROE value indicates that the higher the dividends
deployed by the management Dawood fertilizers. In 2015 the ROE was 29.6 % which decreased
to 22.1% in 2016, which is lowest as compared to other years. There was a consistent rise in
2017 till 2018 from 27% to 39.8% which is the highest ROE, demonstrating a great percentages
increase within these 2 years. However, in 2019, there was a minor decrease in ROE again to
38%. On the whole, this increase in ROE implies that the management team of the company is
more successful in using investment finance to expand its business and is more likely to provide
better returns to investors.
Growth Ratios
Company 2019 2018 2017 2016 2015

Dawood Rs./Share 11.6 14 8.9 8 11.5
Dawood fertilize have an unstable earnings per share over the last 5 years. There has been
increase and decrease in the ratio every year. In 2015, the earnings per share of the company was
Rs.11.5/ share that decreased to Rs.8/share in 2017 which was the lowest ratio earned by the
company in last 5 years. However, the company managed to increase their earnings per share in
2017 to Rs.8.9/share which further increased to Rs.14/share in 2018 and was the earning per
share in the last 5 years. There was a minor decrease in earnings per share in 2019 when the ratio
was Rs.11.6/share. The high earnings per share indicate better profitability by the company. On
the whole the company has managed to gain profitable earnings per share. This high earning per
share shows higher value as investors will pay more for the shares of the company if they believe
that the company has higher profits relative to its share price.
Company 2019 2018 2017 2016 2015

Dawood Rs./Share 14 12 9.5 8 7
Dividend per share of Engro fertilizer was at Rs.7/share in 2015 which was the lowest in
comparison to 5 years. This low dividend per share indicates low earnings and financial
hardships for the company or could also be due to debt reduction or reinvestment in the
operations of the company. However, dividend per share of the company increased consistently
since 2016. It increased from Rs. 8/share to 9.5/share, 12/share and 14/share in 2016, 2017, 2018
Company 2019 2018 2017 2016 2015

Dawood Times 6.8 5.5 9.1 10.78 7.9
Fertilizer has varying price earnings share over the last 5 years. Price earning share was 7.9times
in 2015 but raised to 10.78 times in 2016 which was the highest ratio the company earned in 5
years. High price earnings share indicates positive future results for the company that attracts
investors who have higher expectations and are prepared to pay more for future earnings growth.
However, price earning share ratio of the company decreased during the next 2 years. In 2017 the
ratio was 9.1 times which further decreased to 5.5 in 2018 which the lowest ratio was earned by
the company in 5 years. In 2019 the company managed to increase their price earning share to
only 6.8 times. This low price earnings ratio shows that they are undervalued because their stock
price trading is lower than the fundamentals.
Fatima Fertilizer
Liquidity Ratios
1. Current Ratio
Company 2019 2018 2017 2016 2015

Fatima Times 0.88 1.09 1.10 1.03 0.66
In 2015 the current ratio of Fatima fertilizers was 0.66 this means that the company is unable to
pay off its short-term cash liabilities. This reflects a company's poor financial performance, but
does not necessarily imply that they will be unable to survive. However, over the next 4 years,
from 2016 till 2018, the current ratio has been above 1 which implies that the company has
financial assets to be able to pay for their short-term expenditures. The higher the percentage, the
more competent the entity is. The current ratio reached its all-time high in 2017 when it touched
1.10. However, after that there was a decrease in the ratio in 2018 to a point where it got to 0.88
in 2019. This shows that company’s financial health has saw a decline and is not very healthy.
2. Quick Ratio
Company 2019 2018 2017 2016 2015

Fatima Times 0.65 0.89 0.90 0.83 0.39
Fertilizer has varying price earnings share over the last 5 years. Price earning share was 0.39
times in 2015 but raised to 0.83 times in 2016 and 0.90 in 2017 which was the highest ratio the
company earned in 5 years. High price earnings indicate positive future of the company that
attracts investors who are prepared to pay more for future earnings growth. However, price
earning share ratio of the company decreased during the next 2 years. In 2018 the ratio was 0.89
times which further decreased to 0.65 in 2019 which was the lowest ratio the company saw in
last 4 years. This low price earnings ratio shows that they are undervalued because their stock
price trading is lower than the fundamentals.
Coverage Ratios
3. Interest coverage
Company 2019 2018 2017 2016 2015

Fatima Times 5.57 13.76 6.79 5.24 8.85
interest ratio was 5.85%. The interest coverage percentage shows how easily the company will
be able to pay of its interest and any outstanding debt. This percentage decreased to 5.24% in
2016 that was very low, which shows less ability of the company to pay off its debts and interest
expenses. However, the interest coverage ratio increased consistently in the next 2 years. From
6.79%, it increased to 13.76% in 2017 to 2018. This high coverage ratio is better for the
company as it allows the company to pay of its debts and expenses. The ratio fell down to 5.57%
in 2019 which might have cause a problem for the company.
Leverage ratios
Company 2019 2018 2017 2016 2016

Fatima Percentage 16.33 20.5 29.9 47 49.3
Over the last 5 years, the debt to equity ratio has seen ups and downs. Although if a lot of debt is
used to finance growth, the company will produce more revenue than it would have without this
3 years i.e. 2016, 2017 and 2018 at a debt to equity ratio of 47.00%, 29.9% and 20.5%
respectively. This implies less debt of equity for every dollar of equity the company has. The
debt to equity ratio decreased again in 2019 at a percentage ratio of 16.3%. High risk is also
correlated with a high debt/equity ratio; this means that Fatima fertilizer has not been aggressive
in funding its debt growth which is not dangerous for the company.
5. Debt to Total Asset Ratio (Leverage Ratio)
Company 2019 2018 2017 2016 2015

Fatima Times 0.50 0.43 0.46 0.57 0.58
(shareholders). In 2016 it decreased to 0.57% and then decreased to 0.46% in 2017 and changed
in 2018 and 2019 from 0.43 to 0.50. If the company’s debt to asset ratio in greater than 1 that
would cause problem as it indicates all the assets are debt financed and the firm has more
liabilities than assets. Fortunately, that is not the situation here and the company has maintained
its ratio less than 1.
Company 2019 2018 2017 2016 2015

Fatima fertilizer has managed to maintain a profitable return on capital employed over the last 5
years. In 2015 the ROCE was 20.23% which indicates the productivity of the company.
However, ROCE fell down to 18.09% in 2016. The company managed to consistently increase
the ROCE from 18.59% in 2017 to 23.48% in 2018 which was the highest ROCE ratio over the
last 5 years. This explains the profit the company is producing per 1$ of their capital employed.
It did fall down to 20.04% in 2019 but on the whole the company was earning a profitable return
on capital employed. Greater ROCE implies greater efficiency of the company.
7. Receivable turnover ratio (times)
Company 2019 2018 2017 2016 2015

Fatima Times 3.90 2.90 3.30 3.46 5.73
receivables turnover ratio was 5.73 times, which is the highest as compared to other years. This
2017 and to 2.90 times in 2018. Receivables turnover increased to 3.90 times in 2018 that shows
some improvement for the collection of receivables.
8. Receivables turnover (Days)
Company 2019 2018 2017 2016 2015

Fatima Days 94 126 111 105 64
During the last 5 years, the receivables turnover in days has been increasing till 2019 where it
saw an evident decrease. In 2015 the receivables turnover was 64 days which indicates that the
company was paid back by their customers in not a long time span. However, this started to
increase as in 2016 the receivables turnover was 105 days which further increased to 111 days in
2017. The turnover increased to 126 days in 2018 but there was a decrease in 2019 when the
receivables turnover raised to 94 days. This can have an adverse effect on the company as
increasing number of days indicates that the company takes more number of days in collecting
receivables from the customer.
Company 2019 2018 2017 2016 2015

Fatima Times 1.21 0.77 Not Not Not
Fatima Fertilizers data on Payable turnover ratio wasn’t available from 2015 till 2017. However,
for 2018 and 2019 the company payables turnover changed. In 2017 the payables turnover ratio
was 0.77times which increased to 1.21 times in 2019 which was the highest ratio in the last 5
years. This increase in ratio indicates that payments for credit purchases were made to suppliers
in time. These low ratios indicate that slow payments were made for credit purchases to the
suppliers.
Company 2019 2018 2017 2016 2015

Fatima Times 5.43 4.41 3.44 2.38 2.73
Fertilizer has varying price earnings share over the last 5 years. Price earning share was
2.73times in 2015 and decreased to 2.38 times in 2016 which was the lowest ratio the company
earned in 5 years. High price earnings share indicates positive future results for the company that
growth. However, price earning share ratio of the company increased during the next 3 years. In
2017 the ratio was 3.44 times which further increased to 4.41 in 2018. In 2019 the company
managed to increase their price earning share to 5.43times. This low price earnings ratio shows
that they are undervalued because their stock price trading is lower than the fundamentals.
Company 2019 2018 2017 2016 2015

Fatima Days 67 82 106 153 134
The company’s inventory turnover ratio in days has constantly decreased after 2016. In 2015 the
inventory turnover ratio was 134 days which indicates that the company was able to turn its
inventory into revenue efficiently in more than hundred days. However, the inventory turnover
ratio increased to 153 days in 2016 and then decreased to 106 days in 2017 and 82 days in 2018.
This low inventory indicates that the company was efficient and was able to turn its inventory
into revenue in fewer days as compared to other years. The inventory turnover ratio decreased to
67 days in 2019 that shows the company was working efficiently in turning its inventory into
revenue.
Fatima Fertilizers data on Payable turnover ratio wasn’t available from 2015 till 2017. However,
for 2018 and 2019 the company payables turnover changed. In 2018, they had a payables
turnover ratio of 474 days. The more number of days the company takes in making payments
shows weak financial condition of the company. However, the payables turnover ratio was 301
days in 2019. This decrease means that the company was financially stable and was able to pay
off its suppliers in less number of days. In 2019 the ratio was the lowest as compared to all other
years. This means that the company is improving financially however still have been taking time
to pay back its suppliers.
Company 2019 2018 2017 2016 2015

constantly increasing gross profit margin from 56.30% in 2015 to 53.27% in 2016 and 54.07% in

Company 2019 2018 2017 2016 2015
net profit value of 30.61%. This high net profit margin means that Fatima fertilizers turned their
However, in 2016 the company had a net profit margin of 28.97% which is very low percentage.
This immense fall could be due to inefficient management of the company. This low net profit
margin implies that an inefficient cost structure, mismanaged expenses or weak pricing
techniques are used by the company. During 2017 and 2018 the company managed to increase its
net profit margin to 28.12% and 28.88%, respectively. The company again faced a low net profit
ratio when it decreased to 16.10% in 2019. Overall, Fatima fertilizer has managed to balance
their net profit margins over the last 5 years.
Company 2019 2018 2017 2016 2015

A high Return on Equity (ROE) of Fatima fertilizer demonstrates that they have enough profit to
pay their shareholders dividends. The higher ROE value indicates that the higher the dividends
deployed. In 2015 the ROE was 23.00 % which decreased to 20.65% in 2016 and further to
19.86% in 2017, it rise again in 2018 from 19.86% to 21.32% which is the highest ROE,
demonstrating a great percentages increase within these 1 years. However, in 2019, there was a
huge decrease in ROE again to 15.47%. On the whole, this decrease in ROE implies that the
management team of the company is not very successful in using investment finance to expand
its business and is more likely to provide better returns to investors.
Market Ratios
Company 2019 2018 2017 2016 2015

Fatima Rs./share 26.59 36.47 30.88 36.89 44.73
Dividend per share of Fatima fertilizer was at Rs.44.73/share in 2015 which was the highest in
comparison to 5 years. This high dividend per share indicates high earnings and financial ease
for the company or could also be due to debt increase or not reinvestment in the operations of the
company. However, dividend per share of the company decreased consistently since 2016. It
increased from Rs. 36.89/share to 30.88/share, 36.47/share and 26.59/share in 2016, 2017, 2018
Company 2019 2018 2017 2016 2015

Fatima Rs./Share 5.75 6.32 5.04 4.66 4.41
Fatima fertilize have an unstable earnings per share over the last 5 years. There has been increase
and decrease in the ratio every year. In 2015, the earnings per share of the company was Rs.4.41/
share that increased to Rs.4.66/share in 2016. However, the company managed to increase their
earnings per share in 2017 to Rs.5.04/share which further increased to Rs.6.32/share in 2018 and
was the earning per share in the last 5 years. There was a minor decrease in earnings per share in
2019 when the ratio was Rs.5.75/share. The high earnings per share indicate better profitability
by the company. On the whole the company has managed to gain profitable earnings per share.
This high earning per share shows higher value as investors will pay more for the shares of the
company if they believe that the company has higher profits relative to its share price.
Company 2019 2018 2017 2016 2015

Fatima Times 4.63 5.77 6.13 7.92 10.15
Fatima Fertilizer has varying price earnings share over the last 5 years. Price earning share was
10.15times in 2015 but decreased to 7.92 times in 2016 which was the highest ratio the company
earned in 4 years. High price earnings share indicates positive future results for the company that
growth. However, price earning share ratio of the company decreased during the next 2 years. In
2017 the ratio was 6.13 times which further decreased to 5.77 in 2018. In 2019 the company
further decreased to 4.63 times. This low price earnings ratio shows that they are undervalued
because their stock price trading is lower than the fundamentals.

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Industry 2015-2019

Company 2019 2018 2017 2016 2015

Company 2019 2018 2017 2016 2015

3. Debt to Equity Ratio

Company 2019 2018 2017 2016 2015

4. Debt to Asset Ratio:

Company 2019 2018 2-17 2016 2015

Total-debt-to-total-assets is a leverage ratio that defines the total amount of debt relative to

5. Return on Capital Employed:

Company 2019 2018 2017 2016 2015

Company 2019 2018 2017 2016 2015

7. Receivables Turnover Ratio (Times)

Company 2019 2018 2017 2016 2015

8. Receivables Turnover Ratio (Days)

Company 2019 2018 2017 2016 2015

9. Payables Turnover (Times)

Company 2019 2018 2017 2016 2015

10. Payables Turnover (Days)

Company 2019 2018 2017 2016 2015

11. Inventory Turnover Ratio (Times)

Company 2019 2018 2017 2016 2015

12. Inventory Turnover Ratio (Days)

Company 2019 2018 2017 2016 2015

13. Total Asset Turnover Ratio:

Company 2019 2018 2017 2016 2015

14. Gross Profit Margin:

Company 2019 2018 2017 2016 2015

15. Net Profit Margin

Company 2019 2018 2017 2016 2015

16. Return on Investment Ratio (Return in Asset)

Company 2019 2018 2017 2016 2015

Return on Investment (ROI) is a performance measure used to evaluate the efficiency of an

17. Return on Equity Ratio:

Company 2019 2018 2017 2016 2015

18. Earnings per Share

Company 2019 2018 2017 2016 2015

19. Dividend per Share

Company 2019 2018 2017 2016 2015

20. Price Earnings Ratio

Company 2019 2018 2017 2016 2015

Year Current assets Current liabilities Current Ratio

2. Quick Ratio (Acid ratio):

There are two ways to calculate the quick ratio:

 QR = (Current Assets – Inventories – Prepaid) / Current Liabilities.

Activity Turnover Ratios

3. Total Asset Turnover Ratio:

Total asset turnover= Net sales ÷ Total assets

Year Net Sales Total Assets Total Asset

4. Inventory turnover ratio (Times):

Year Cost of Sales Average Inventory Inventory Turnover

5. Receivable Turnover Ratio (Times):

The receivables turnover ratio is an accounting measure used to quantify a company's

Company 2019 2018 2017 2016 2015

6. Receivable Turnover Ratio (Days):

Company 2019 2018 2017 2016 2015

7. Payables Turnover Ratio (Times):

Company 2019 2018 2017 2016 2015

8. Payables Turnover Ratio (Days):

Company 2019 2018 2017 2016 2015

Agritech Days -0.005 -0.005 -0.005 -0.005 -0.005

9. Debt to Equity Ratio:

It is calculated by dividing a company's total liabilities by its shareholder equity.

10. Debt to Total Asset Ratio: