REPORT

“PRINCIPLE OF FINANCE”

FACULTY: SUNDUS WAQAR

GROUP MEMBERS:

“CONTENTS”
 1. Introduction of the company.

2. Horizontal Analysis of Balance Sheet.

3. Vertical Analysis of Balance Sheet.

4. Horizontal analysis of Profit and Loss Statement.

5. Vertical analysis of Profit and Loss Statement.

6. Ratio analysis and interpretation.

“INTRODUCTION OF ABBOTT LABORATORIES PAKISTAN”

ABBOTT LABORATORIES is an all-inclusive health care company which was

founded in 1888. It has presence in over 150 countries and has 74000 employees
working under its name. ABBOTT LABORATORIES`s global headquarter is

situated in Illinois, USA. The company`s range of products includes generic

pharmaceuticals, medical devices, laboratories diagnostics and nutrition.

ABBOTT LABORATORIES PAKISTAN was incorporated in1948 as a marketing

affiliate and is one of the oldest companies to start operations in Pakistan.

ABBOTT LABORATORIES PAKISTAN has two plants in Karachi located at

Korangi and Landhi. Over 1500 employees make up the work force of the

company.

MISSION STATEMENT:

“We believe to deliver consistently superior product and service which contributes

significantly to improve the quality of life of consumer.”

VISION STATEMENT:

“to be the most admired healthcare company in Pakistan.”

Regulatory environment of pharmaceuticals sector:

The Drug Regulatory Authority of Pakistan (DRAP) determines that pricing

policy of pharmaceutical products in Pakistan. In its 2015 policy, it

recommended amongst other points that the retail value of all drugs be

frozen at the approved level as on October 31, 2013. And this price level

would be maintained till June 30, 2016.The policy further proposed the
reduction of originator drugs/brands prices to the extent of 10 percent every

subsequent year. This was strongly objected by the pharmaceutical sector

and a constitutional petition was been filed in Sindh High Court.DRAP had

committed that it would take decisions on applications pending with it in

respect to price increases on specific products by December 5, 2015. These

cases are referred to as hardship cases through which companies argue that

the current price level is unviable for sale of select products. However,

DRAP has failed to do so in several cases for which companies in the sector

are seeking legal address.

Since the pharmaceutical sector is significantly dependent on imports of raw

materials and finished goods, the on-going currency devaluation is a major

concern as companies cannot control pricing.

Pattern of shareholding: 

A statement showing the pattern of shareholding in the company and

additional information as at December 31, 2018.

Mr. Ehsan Ali Malik, director acquired 2300 shares during January 2018 out

of which 1800 shares were acquired at the rate of Rs.670.35 whereas

remaining 500 were acquired at the rate of Rs. 655.35. Subsequently,5700

shares out of his holding , were transferred to his spouse at the rate of

Rs.679.98.
Kamran Y.Mirza, director inherited 1269 shares at the rate of 666.00 during

march 2018 which were later disposed off at the rate of Rs. 681.01.

Other directors, CEO, CFO, company secretary and their spouses and minor

children did not carry out any transaction in the shares of the company

during the year.

Future outlook: 
The challenges faced by ABOTT LABORATORIES PAKISTAN are the

same as the ones faced the rest of the sector. Margins are being eroded

because rupee's value has eroded and the company is dependent on imports

which are bought in Euros or Dollars. The regulatory environment,

especially relating to price increase approvals, poses obstacles for all pharma

companies.

FINANCIAL STATEMENT OF POSITION(BALANCE

SHEET): 

FINANCIAL STATEMENT OF PROFIT AND LOSS

(INCOME STATEMENT): 
HORIZONTAL & VERTICAL ANALYSIS OF ABBOTT

LABORATORIES PAKISTAN:

o Horizontal Analysis of Balance sheet 2014 -2015:

o Horizontal Analysis of Profit & Loss Statement 2014 – 2015:

o Horizontal Analysis of Balance Sheet 2015 -2016:

o Horizontal Analysis of Profit & Loss Statement 2015 -2016:

o Horizontal Analysis of Balance Sheet 2016 – 2017:

o Horizontal Analysis of Profit & Loss Statement 2016 – 2017:

o Vertical Analysis of Balance Sheet 2014 – 2015:

o Vertical Analysis of Profit & Loss 2014 – 2015:

o Vertical Analysis of Balance Sheet 2015 -2016:

o Vertical Analysis of Profit & Loss 2015 – 2016:

o Vertical Analysis of Balance Sheet 2016 – 2017:

o Vertical Analysis of Profit & Loss 2016 – 2017:

o Horizontal Analysis of Balance Sheet 2018 – 2017:

o Comment on Horizontal Analysis of Balance Sheet 2018 – 2017:
Fixed and other non current assets increased as compared to last year for the
capital expenditure to increase manufacturing capacity, enhancement of
productivity and improvement of plant efficiency. These all fixed and non
current assets are finance through non current liabilities which cause a
decreasing effect on total equity while the current liabilities are also increase
due to currency devaluation, timing of shipments and increased volume.

o Horizontal Analysis of Profit &Loss Statement 2018 – 2017:

o Comment on Horizontal Analysis of Profit &Loss Statement 2018 –

2017:
 Net sales increased due to the establishment of high productive plants and
efficiency in productivity but the cost of goods sold is increased due to
increase in production cost which causes declining gross profit as compare
to last year. While the devaluation of currency causes increase in taxation,
finance cost, other charges, other incomes, administrative expense and
selling and distribution expense, which cause declining profit for the year as
compare to last year.

o Vertical Analysis of Balance Sheet 2018 – 2017:

o Comment on Vertical Analysis of Balance Sheet 2018 – 2017:

o Vertical Analysis of Profit & Loss 2018 – 2017:

o Comment on Vertical Analysis of Profit & Loss 2018 – 2017:

RATIOS ANALYSIS & INTREPRETATION:

⮚ LIQUIDITY RATIOS:
 Interpretation of Liquidity Ratios:

⮚ INVENTORY TURNOVER RATIO:

Interpretation of Inv. Turnover Ratio:

⮚ RECEIVABLE TURNOVER:

Interpretation of Receivable turnover:

 ⮚ FIXED ASSETS TURNOVER RATIO AND
TOTAL ASSETS TURNOVER RATIO:

Interpretation of Fixed Assets Turnover Ratio and Total

Assets Turnover :

⮚ DEBT MANAGEMENT RATIOS:

Interpretation of Debt Management:

Net. The debt management ratio is increases in every year and interest charges is
also increases in every year which decreases the net profit. But in the other hand,
the total assets of the company are more than its liability. Which means the
position of company is financially good.
⮚ PROFITABILITY RATIOS:
Interpretation of PROFITABILITY RATIOS :

⮚ MARKET VALUE RATIOS:

Interpretation of MARKET VALUE RATIOS:

Market position of the ABBOTT PAKISTAN is in healthy position the investors
willing to purchase more and more shares although the book value is below the
market price per share but as the company’s growth rate is high and risk factor is
low as compare to the competitor, the investors have a great charm to invest in
ABBOTT LABORATORIES PAKISTAN.