Intro to Business Finance
International Industries Limited
Instructor: Sir Arsalan Hussain
Introduction
International Industries Limited (IIL): Established in 1948, a leading manufacturer of steel & polymer
pipes, tubes, and fittings.
Key Focus: Innovation, quality, and sustainability.
Market Position: Market leader in Pakistan and a notable player in the global market.
Financial Standing: Listed on the Pakistan Stock Exchange with substantial equity of PKR 15.2 billion
and an annual revenue of PKR 27 billion.
Mr. Sohail R. Bhojani, CEO since May 1st, 2021.
Common Size and Index Analysis
Balance Sheet
Asset Composition: Predominantly property, plant, and equipment in non-current assets, and
stock-in-trade in current assets. Fluctuations observed in non-current assets due to property,
plant, and equipment. Receivables from KE transitioned to other receivables.
Long-Term Investments: Strategic stakes in International Steels Limited (56.33%) and Pakistan
Cables Limited (17.12%), and wholly-owned subsidiaries.
Common Size and Index Analysis
Balance Sheet
Shareholders' Equity: Comprises share capital, reserves, and revaluation surplus. Witnessed growth
over the past five years.
Liabilities Overview: Non-current liabilities increased due to long-term loans for production
enhancements. Current liabilities surged due to higher working capital requirements and inclusion
of a portion of long-term debt.
Common Size and Index Analysis
Income Statement
Revenue Performance: Continuous growth, except for FY20 and FY23, attributed to COVID-19
lockdowns and economic instability.
Expense Management: Administrative and selling expenses remained consistent. Distribution
expenses fluctuated due to abnormal global container shortages in FY22.
Taxation: Corporate tax rates consistent, with a higher tax charge in FY23 due to the imposition of
a 10% Super Tax by the Government.
Common Size and Index Analysis
Income Statement
Working Capital and Financial Management: Higher working capital deployment despite efficiencies
due to continuous devaluation of PKR. Sharp surges in exchange rates and policy rates led to higher
finance costs in FY23.
Other Income and Expenses: Mainly consists of dividends received and gains due to exchange
differences. WWF/WPPF deductions directly derived from profitability.
Ratio Analysis
Liquidity: Current and quick ratios remained relatively consistent over five years. Negative net working
capital observed in 2020 due to COVID-19 impact.
Asset Utilization: Fluctuations in account receivable turnover and average collection period due
to COVID-19 and economic downturn. Inventory turnover and total assets turnover maintained
consistency.
Debt Utilization: Debt ratio fairly consistent, times interest earned turned negative in 2020 due to
loss from COVID-19, remained low in 2023 due to sharp surges in exchange rates.
Ratio Analysis
Profitability: Gross profit margin dipped in 2020 but rebounded significantly in 2021. Operating profit
margin and net profit margin showed variations. Return on assets and return on equity depicted an
upward trend.
Market Value: Profitability rebounded in last two years, yielding healthy earnings per share.
Price-earnings ratio lowest in FY23 due to politico-economic uncertainty. Price to cash flow and
price to sales ratios exhibited fluctuations.
Recommendations
Optimizing Working Capital Management: Implement efficient inventory control systems, explore
alternative sourcing strategies.
Strengthening Risk Management: Diversify supplier and customer bases, hedge against currency
fluctuations, monitor regulatory changes.
Enhancing Cash Flow Management: Optimize payment terms with vendors, actively manage debt
repayment schedules.
Presented By Aqeel Sikandar
20221-32973
