FINANCIAL ANALYSIS

OF
SUI NORTHEREN GAS
PIPELINES LIMITED
Presented by Mariyam Waheed
 VISION
To be the leading integrated natural
gas provider in the region seeking to
improve the quality of life of our
customers and achieve maximum
benefit for our stakeholders by
providing an uninterrupted and
environment friendly energy resource.
MISSIO
N
A commitment to deliver natural gas
to all doorsteps in our chosen areas
through continuous expansion of our
network, by optimally employing
technological, human and
organizational resources, best
practices and high ethical standards
 CORE
VALUES
Commitment Courtesy
Competence
Responsibility
Integrity
OPERATING RATIO
Year 2021 (2.57%)
An operating ratio of 2.57% suggests
that, for every rupee of revenue
generated, the company incurred
operating expenses equivalent to 2.57
paisas.
A lower operating ratio is generally
considered favorable as it indicates
efficient cost management and a higher
percentage of revenue available as
operating income.
Year 2022 (3.174%)
The increase in the operating ratio to
3.174% in 2022 indicates a higher
proportion of operating expenses
relative to revenue.
This may suggest increased operating
costs or a decrease in revenue efficiency
compared to the previous year.
FUNDED DEBT TO OPERATING
PROPERTY
Year 2021 (17.28%)
The ratio of 17.28% indicates that, at the
end of 2021, the company had funded
debt equivalent to 17.28% of its total
operating property.
This suggests a relatively higher level of
financial leverage, where a larger
portion of the company's operating
property is financed through debt.
Year 2022 (14.18%)
The decrease in the ratio to 14.18% in
2022 indicates a lower proportion of
funded debt in relation to operating
property.
This may suggest a reduction in financial
leverage or a change in the composition
of the company's capital structure, with
potentially less reliance on debt
PERCENT EARNED ON PROFIT
Year 2021 (5.131%)
The operating profit margin of 5.131%
indicates that, for every rupee of revenue
generated in 2021, the company retained
5.131 paisa as operating profit after
covering operating expenses.
A higher operating profit margin is
generally considered favorable, as it
suggests efficient cost management and a
greater percentage of revenue contributing
to operating profit.
Year 2022 (4.60%)
The decrease in the operating profit
margin to 4.60% in 2022 suggests that a
lower percentage of revenue is
translating into operating profit.
This may be due to increased operating
expenses, decreased revenue efficiency,
or a combination of both
OPERATING REVENUE TO OPERATING
PROPERTY
Year 2021 (301.04%)
The ratio of 301.04% suggests that, in
2021, the company generated operating
revenue equivalent to approximately
three times its operating property.
This may indicate effective utilization of
operating assets, resulting in a relatively
high revenue yield from these assets.
Year 2022 (478.63%)
The increase in the ratio to 478.63% in
2022 indicates a further improvement in
the efficiency of converting operating
property into operating revenue.
The company generated operating
revenue equivalent to almost five times
its operating property during the year,
signaling enhanced operational
efficiency or potentially increased
pricing power.
 9

Additional
Ratios
CURRENT RATIO
Year 2021 (96.7%)
A current ratio of 96.7% indicates that, at
the end of 2021, the company had current
assets equivalent to 96.7% of its current
liabilities.
This suggests a relatively strong ability to
meet short-term obligations using
available short-term assets.
Year 2022 (97.8%)
The increase in the current ratio to 97.8%
in 2022 indicates a further improvement in
the company's liquidity position.
The company now has current assets
equal to 97.8% of its current liabilities,
suggesting an enhanced ability to cover
short-term obligations
WORKING CAPITAL RATIO
Year 2021 Year 2022
(-22,706,694 PKR) (-22,262,753 PKR)
The negative value suggests that, at the The slight improvement in the negative
end of 2021, the company had more working capital ratio to -22,262,753 PKR in
short-term liabilities than short-term 2022 suggests a relatively better position
assets. compared to the previous year.

This could indicate potential liquidity However, the negative value still indicates
challenges, as the company may face that the company has more short-term
difficulty in meeting its immediate liabilities than short-term assets.
obligations with its existing current assets.
Acid-Test Ratio:
Year 2021
(0.9601 times)
The acid-test ratio of 0.9601 times
indicates that for every rupee of current
liabilities, the company has PKR0.9601
in highly liquid assets that can be quickly
converted to cash to meet its short-term
obligations.
A ratio below 1 suggests a potential
challenge in meeting all short-term
obligations with only the most liquid
assets.
Year 2022
(0.9662 times)
The increase in the acid-test ratio to
0.9662 times in 2022 suggests a slight
improvement in the company's short-
term liquidity position.
The company now has PKR0.9662 in
highly liquid assets for every rupee of
current liabilities, indicating a slightly
stronger ability to cover short-term
obligations.
Cash Ratio:
Year 2021
(0.015011 times)
A cash ratio of 0.015011 times means
that for every rupee of short-term
liabilities, the company has 0.015011
rupees in cash and cash equivalents.
This ratio indicates a relatively low level
of liquidity, suggesting that the company
may have a limited ability to cover its
short-term obligations with readily
available cash.
Year 2022
(0.01535 times)
The increase in the cash ratio to 0.01535
times in 2022 suggests a slight
improvement in liquidity compared to
the previous year.
While the cash ratio is still relatively low,
the company now has 0.01535 rupee in
cash and cash equivalents for every
rupee of short-term liabilities.
Operating Cash Flow Ratio
Year 2021
(0.05194 times)
A ratio of 0.05194 suggests that, on
average, the company generated
PKR0.05194 in operating cash flow for
every rupee of average total assets
during the year.
This implies that the company had a
reasonable ability to convert its
operational activities into cash in 2021.
Year 2022
(0.04905 times)
The decrease in the Operating Cash
Flow Ratio to 0.04905 in 2022 indicates a
slightly lower ability to generate
operating cash flow relative to average
total assets.
This may suggest changes in the
company's cash generation efficiency,
working capital management, or overall
operational performance
Debt Ratio:
Year 2021
(96.27%)
The Debt Ratio of 96.27% indicates that,
at the end of 2021, approximately
96.27% of the company's total assets
were financed by debt.
This suggests a high level of financial
leverage, where a significant portion of
the company's capital structure is
composed of debt.
Year 2022
(96.87%)
The increase in the Debt Ratio to 96.87%
in 2022 indicates a slightly higher
reliance on debt to finance the
company's assets.
This suggests that, compared to the
previous year, the company's level of
financial leverage has marginally
increased.
Debt to Equity Ratio:
Year 2021
(25.8281 times)
The Debt to Equity Ratio of 25.8281
times implies that, at the end of 2021,
the company had PKR 25.83 in total
debt for every PKR1 of shareholders'
equity.
This suggests a relatively high level of
financial leverage, indicating that the
company relies significantly on debt
financing to support its operations and
growth.
Year 2022
(30.98409 times)
The increase in the Debt to Equity Ratio
to 30.98409 times in 2022 indicates a
higher proportion of debt relative to
equity.
This may suggest that the company has
taken on additional debt or experienced
a decrease in equity during the year.
Interest Coverage Ratio:
Year 2021
(1.3956 times)
A ratio of 1.3956 times indicates that the
company's operating earnings (EBIT) are
1.3956 times higher than its interest
expenses.
This implies a moderate ability to cover
interest payments, but it is generally
considered lower than ideal. A higher
ratio is often preferred as it suggests a
greater buffer against financial risk.
Year 2022
(1.27058 times)
The decrease in the ratio to 1.27058
times in 2022 suggests a slight decline in
the company's ability to cover interest
payments compared to the previous
year.
A lower interest coverage ratio may
indicate increased financial risk, as the
company is generating less operating
income relative to its interest
obligations.
Asset Turnover Ratio:
Year 2021
(0.7020 Times)
An asset turnover ratio of 0.702
suggests that, on average, the company
generated PKR0.702 in revenue for
every rupee of assets during the year.
This may indicate that the company's
assets were not utilized very efficiently
in generating sales
Year 2022
( 0.8490times)
The increase in the asset turnover ratio
to 0.820 in 2022 indicates improved
efficiency in utilizing assets to generate
sales.
The company generated PKR0.820 in
revenue for every rupee of assets during
the year, suggesting a more effective
use of its asset base
Gross Margin Ratio:
Year 2021
(8.20%)
The gross margin ratio of 8.20%
indicates that, for every rupee of
revenue generated in 2021, the
company retained PKR0.082003 after
covering the direct costs associated with
producing goods or services.
Year 2022
( 7.94%)
The decrease in the gross margin ratio
to 7.94% in 2022 suggests that the
company retained a slightly smaller
portion of revenue after accounting for
the cost of goods sold

A higher gross margin ratio is generally

favorable, suggesting that the company
has a larger margin to cover operating
expenses and generate net profit.
Operating Margin Ratio:
Year 2021
(8.67%)
An operating margin of 8.67% indicates
that the company retained 8.67 paisas
as operating profit for every rupee of
sales revenue.
Year 2022
( 6.76%)
The decrease in the operating margin to
6.76% in 2022 suggests that the
company retained a lower percentage of
sales revenue as operating profit.

This suggests a relatively healthy

operating performance, with a
significant portion of revenue
translating into operating income.
Return on Assets Ratio:
Year 2021
(0.0119665)
The ROA of 0.0119665 indicates that, on
average, the company generated
approximately 1.19 paisas of profit for
every rupee of assets during 2021.
A higher ROA is generally considered
favorable, as it suggests that the
company is effectively utilizing its assets
to generate earnings.
Year 2022
(0.008174)
The decrease in ROA to 0.008174 in
2022 suggests that the company
generated around 0.82 paisas of profit
for every rupee of assets during the
year.
A lower ROA may indicate reduced
profitability relative to the company's
asset base compared to the previous
year.
Return on Equity Ratio:
Year 2021
(32.103%)
An ROE of 32.103%, indicates that the
company generated approximately
32.103 paisas in net income for every
rupee of average shareholders' equity
during the year.
A higher ROE generally suggests
efficient utilization of equity capital, and
it is often considered a positive indicator
of a company's profitability.
Year 2022
(26.145%)
The decrease in ROE to 26.145%, in 2022
indicates a decline in the company's
ability to generate profits relative to
shareholders' equity.
A lower ROE may suggest challenges in
maintaining or improving profitability
levels compared to the previous year.
Debt to EBITDA Ratio:
Year 2021
(15.81711)
A Debt to EBITDA ratio of 15.81711
suggests that, at the end of 2021, the
company had 15.81711 times its EBITDA
in total debt.
This ratio is an indication of the
company's ability to cover its total debt
obligations using its EBITDA. A lower
ratio is generally considered more
favorable, as it implies a lower level of
debt relative to earnings.
Year 2022
(26.8744)
The increase in the Debt to EBITDA ratio
to 16.8744 in 2022 indicates that the
company's total debt has increased
compared to its EBITDA.
A higher ratio could suggest increased
financial risk and may indicate that the
company is more leveraged, potentially
facing challenges in meeting its debt
obligations.
 24

Conculsion
In 2021, the company showed efficient asset
utilization with an Asset Turnover Ratio of 0.702,
indicating it generated $0.702 in revenue for every
dollar of assets. Operating efficiency was evident
with a low Operating Ratio of 2.57%, signaling
effective cost management. However, financial
leverage increased, as reflected in a Debt to EBITDA
Ratio of 15.81711. In 2022, while asset turnover
improved (0.820), there was a slight increase in
operating expenses (3.174%), and financial leverage
continued to rise with a Debt to EBITDA Ratio of
16.8744, potentially signaling increased risk. Overall,
a comprehensive analysis of these ratios is crucial to
assess the company's financial health and risk
management strategies
THANKS!
DO YOU HAVE ANY
QUESTIONS?

CREDITS: This presentation template was created

by Slidesgo, and includes icons by Flaticon and
infographics & images by Freepik