We worked on Annual Reports of 2008 to 2011

1. PRESENTED TO: SIR NAZIM
PRESENTED BY: AYESHA AHMED
KAZIM ALI
MOIZ KHAN
WASEEM SADIQ
ASIF

4. WHICH ONE IS BETTER TO
INVEST, FATIMA FERTILIZER
OR FAUJI FERTILIZER?

5. Working Capital
2008 2009 2010 2011
Current Assets 9,709,511 14,917,456 17,223,642 27,636,405
Current Liabilities 11,823,641 17,854,574 19,987,109 25,924,328
Working Capital -2,114,130 -2,937,118 -2,763,467 1,712,077
2008 2009 2010 2011
Current Assets 892,413 2,216,453 4,498,680 8,126,119
Current Liabilities 3,505,688 4,660,938 7,074,260 10,757,984
Working Capital -2,613,275 -2,444,485 -2,575,580 -2,631,865

6. Working Capital
2,000,000
1,000,000
0
2008 2009 2010 2011
Fauiji
-1,000,000
Fatima
-2,000,000
-3,000,000
-4,000,000

7.  Negative working capital means that a company
currently is unable to meet its short-term liabilities
with its current assets .If a company's current assets do
not exceed its current liabilities, then it may run into
trouble paying back creditors in the short term. The
worst-case scenario is bankruptcy. Working capitals
for both companies i.e. Fauji and Fatima Fertilizer have
declining working capital ratio and fauji’s working
capital increased in 2011 than previous year
2010.Fatima fertilizer has been facing problems in
paying their dues.

8. Current Ratio
2008 2009 2010 2011
Current Assets 9,709,511 14,917,456 17,223,642 27,636,405
Current Liabilities 11,823,641 17,854,574 19,987,109 25,924,328
Current Ratio 0.82 0.84 0.86 1.07
Current Ratio
2008 2009 2010 2011
Current Assets 892,413 2,216,453 4,498,680 8,126,119
Current Liabilities 3,505,688 4,660,938 7,074,260 10,757,984
Current Ratio 0.25 0.48 0.64 0.76

9. Current Ratio
1.20
1.07
1.00
0.86
0.82 0.84
0.80 0.76
0.64
0.60 Fuiji
Fatima
0.48
0.40
0.25
0.20
0.00
2008 2009 2010 2011

10.  The Current ratio is the measure of general liquidity in
the firm . For both companies i.e. Fauji Fertilizer and
Fatima Fertilizer, The current ratio of 2011 is slightly
higher than that of 2010 which means that in 2011 the
company will be much more in good position to pay
the debt in the next coming year. In above comparative
graph, you can easily judge that Fauji Fertilizer is in
better position than Fatima Fertilizer.

11. Quick Ratio
2008 2009 2010 2011
Current Assets 9,709,511 14,917,456 17,223,642 27,636,405
Stock in Trade 258,094 144,087 211,720 636,923
Deposits & Prepayments 107,369 37,653 50,188 53,852
365,463 181,740 261,908 690,775
Current Liabilities 11,823,641 17,854,574 19,987,109 25,924,328
Quick Ratio 0.79 0.83 0.85 1.04
Quick Ratio
2008 2009 2010 2011
Current Assets 892,413 2,216,453 4,498,680 8,126,119
Stock in Trade 0 0 539,730 1,215,014
Deposits & Prepayments 410,752 849,238 939,864 945,225
410,752 849,238 1,479,594 2,160,239
Current Liabilities 3,505,688 4,660,938 7,074,260 10,757,984
Quick Ratio 0.14 0.29 0.43 0.55

12. Quick Ratio
1.20
1.04
1.00
0.85
0.83
0.79
0.80
0.60 0.55 Fuiji
Fatima
0.43
0.40
0.29
0.20
0.14
-
2008 2009 2010 2011

13.  Quick Ratio is an indicator of a company's short-term
liquidity. The quick ratio measures a company's ability
to meet its short-term obligations with its most liquid
assets. The higher the quick ratio, the better the
position of the company. In above calculation you can
observe that Quick Ratio of Fauji Fertilizer is better
than Fatima Fertilizer, it is increased from 0.85 to 1.04
which is shows good sign or improvement and shows
ability to meet its short-term obligations with most its
liquid assets.

14. Inventory Turnover
2008 2009 2010 2011
Cost of Goods Sold 18,234,692 20,515,044 25,310,406 20,871,759
Average Stock in Trade 258,094 201,091 177,904 424,322
Inventory Turnover 70.65 102.02 142.27 49.19
Total Asset Turnover
2008 2009 2010 2011
Cost of Goods Sold 18,234,692 20,515,044 25,310,406 20,871,759
Average Total Assets 31,918,963 35,235,273 40,806,219 49,295,886
Total Asset Turnover 0.57 0.58 0.62 0.42

15. Non Current Asset Turnover
2008 2009 2010 2011
Cost of Goods Sold 18,234,692 20,515,044 25,310,406 20,871,759
Average Non Current Assets 22,209,452 22,921,789 24,735,670 26,865,863
Non Current Asset Turnover 0.82 0.90 1.02 0.78
Current Asset Turnover
2008 2009 2010 2011
Cost of Goods Sold 18,234,692 20,515,044 25,310,406 20,871,759
Average Current Assets 9,709,511 12313484 14917456 22430024
Current Asset Turnover 1.88 1.67 1.70 0.93
Working Capital Turnover
2008 2009 2010 2011
Cost of Goods Sold 18,234,692 20,515,044 25,310,406 20,871,759
Average Working Capital -2,114,130 -2525624 -2850293 -525695
Working Capital Capital -8.63 -8.12 -8.88 -39.70

16.  The activity analysis ratios are also called the Turnover
ratios or Performance ratios. These ratios are
computed to assess the efficiency with which the firm
manages and utilizes its assets. These ratios usually
indicate the frequency of sales with respect to its
assets. These ratios are usually calculated with
reference to sales/cost of goods sold and are expressed
in terms of rates or times. Fauji fertilizer shows
improvement in their activity ratio. Activity ratio for
Fatima Fertilizer is not possible due to the fact that
values are not given in Financial Statement

17. Gross Profit Margin
2008 2009 2010 2011
Gross Profit 12,358,114 15,648,130 19,563,953 34,349,409
Net Sales 30,592,806 36,163,174 44,874,359 55,221,168
Gross Profit Margin 40% 43% 44% 62%
Net Margin
2008 2009 2010 2011
EAT 6,525,083 8,823,106 11,028,849 22,492,053
Net Sales 30,592,806 36,163,174 44,874,359 55,221,168
Net Margin 21% 24% 25% 41%

18. Operating Margin
2008 2009 2010 2011
EBIT 8,098,525 10,256,230 13,156,739 26,536,552
Net Sales 30,592,806 36,163,174 44,874,359 55,221,168
Operating Margin 26% 28% 29% 48%
Operating Expense Ratio
2008 2009 2010 2011
Operating Expense 895,647 1,272,448 1,376,000 2,654,881
Net Sales 30,592,806 36,163,174 44,874,359 55,221,168
Operating Expense Ratio 3% 4% 3% 5%
Cost of Goods Sold Ratio
2008 2009 2010 2011
COGS 18,234,692 20,515,044 25,310,406 20,871,759
Net Sales 30,592,806 36,163,174 44,874,359 55,221,168
COGS Ratio 60% 57% 56% 38%

19. Operating Ratio
2008 2009 2010 2011
COGS 18,234,692 20,515,044 25,310,406 20,871,759
Operating Expense 895,647 1,272,448 1,376,000 2,654,881
Net Sales 30,592,806 36,163,174 44,874,359 55,221,168
Operating Ratio 63% 60% 59% 43%

20.  DEBT RATIO
Years 2008 2009 2010 2011
Total Debts 19,633,750 25,469,140 27,613,309 32,460,692
Total Assets 31,918,963 38,551,582 43,060,856 55,530,916
Ratios 0.62 0.66 0.64 0.58
Years 2008 2009 2010 2011
Total Debts 22,752,404 39,459,744 45,198,258 48,292,383
Total Assets 38,097,748 57,202,532 69,457,038 76,347,248
Ratios 0.60 0.69 0.65 0.63

21. Debt Ratio
70%
69%
68%
66%
66%
65%
64%
64%
63%
62% 62%
Fuiji
60% 60% Fatima
58%
58%
56%
54%
52%
2008 2009 2010 2011

22.  Debt ratio should be less than 1.0, both Fauji & fatima
fertilizer having less than 1 . The higher values are
respectively the signal of excessive debt. Although it is
decreased a little but still it is alarming situation. For
the case of Fatima fertilizer. Fauji fertilizer is at better
position than Fatima fertilizer.

23. Years 2008 2009 2010 2011
LTD 7,810,109 7,614,566 7,626,200 6,536,364
SHE 12,285,213 13,082,442 15,447,547 23,070,224
Ratio 0.64 0.58 0.49 0.28
Years 2008 2009 2010 2011
LTD 19,246,716 34,798,806 38,123,998 37,534,399
SHE 15,345,344 17,742,788 24,258,780 28,054,865
Ratio 1.25 1.96 1.57 1.34

24. Debt to Equity Ratio
250%
200% 196%
157%
150%
134%
125%
Fuiji
Fatima
100%
64%
58%
49%
50%
28%
0%
2008 2009 2010 2011

25. Years 2008 2009 2010 2011
Total Debts 19,633,750 25,469,140 27,613,309 32,460,692
SHE 12,285,213 13,082,442 15,447,547 23,070,224
Ratio 1.60 1.95 1.79 1.41
Years 2008 2009 2010 2011
Total Debts 22,752,404 39,459,744 45,198,258 48,292,383
SHE 15,345,344 17,742,788 24,258,780 28,054,865
Ratio 1.48 2.22 1.86 1.72

26. Total Debt to Equity Ratio
250%
222%
200% 195%
186%
179%
172%
160%
148%
150% 141%
Fuiji
Fatima
100%
50%
0%
2008 2009 2010 2011

27.  Total Debt to equity ratio indicates a capacity to
borrow additional fund by having low value of Debt to
Equity ratio. This is ideal situation for Fauji fertilizer
because 1.79 and 1.49 for the year 2010 and 2011
respectively. Fauji fertilizer is also in better condition
than Fatima fertilizer because value of Debt to Equity
ratio is still very low as compared to Fatima fertilizer

28. Years 2008 2009 2010 2011
EBIT 9,689,543 12,473,625 15,619,480 29,977,258
Interest 695,371 944,947 1,086,741 785,825
Ratio 13.93 13.20 14.37 38.15
Years 2008 2009 2010 2011
EBIT 9,150,623
Interest 3,063,055
Ratio #DIV/0! #DIV/0! #DIV/0! 2.99

29.  The times interest earned ratio indicates how well the
firm's earnings can cover the interest payments on its
debt. This ratio also is known as the interest coverage.
By having lower values it shows that company has very
low capability to pay interest charges. Fauji fertilizer is
in stable condition as compared to Fatima
fertilizer, because it have much higher value of Times
interest earned ration, whereas Fatima does not have
any capability to pay interest charges by having lesser
value.

30.  RETURN ON ASSET
Years 2008 2009 2010 2011
EAT 6,525,083 8,823,106 11,028,849 22,492,053
Average Total Asset 31,918,963 38,551,582 43,060,856 55,530,916
Ratios 20% 23% 26% 41%
Years 2008 2009 2010 2011
EAT (144,195) (97,121) (163,639) 4,116,975
Average Total Asset 38,097,748 57,202,532 69,457,038 76,347,248
Ratios -0.38% -0.17% -0.24% 5.39%

31. Return on Assets
25%
20%
20%
15%
11%
Fuiji
10%
Fatima
7%
6%
5%
2%
0%
2008 0% 2009 0% 2010 0% 2011
-5%

32.  Return on assets is a measure of how effectively the
firm's assets are being used to generate profits. By
having positive value means that company's assets are
greater than its profit. For Fauji fertilizer the value of
Return on Total Assets increased. It shows a little
improvement but higher value is better for company
and trend should be upward. For Fatima
fertilizer Negative ratio shows that company is in loss.
Company has to pay interest cost from its asset

33. Years 2008 2009 2010 2011
EAT 6,525,083 8,823,106 11,028,849 22,492,053
Average SHE 12,285,213 13,082,442 15,447,547 23,070,224
Ratio 53% 67% 71% 97%
Years 2008 2009 2010 2011
EAT (144,195) (97,121) (163,639) 4,116,975
Average SHE 15,345,344 17,742,788 24,258,780 28,054,865
Ratio -0.94% -0.55% -0.67% 14.67%

34. Return on Shareholder Equity
60%
53%
50%
40%
29%
30%
Fuiji
Fatima
19%
20% 17%
15%
10%
0%
2008 -1% 2009 -1% 2010 -1% 2011
-10%

35.  Return on equity is the bottom line measure for the
shareholders, measuring the profits earned for each
dollar invested in the firm's stock. Fauji fertilizer by
having positive Return on Equity (ROE) shows that
stockholders are getting profit from
company, although it is very minimal but trend is
going upward. Fauji fertilizer must increase its net
profit margin to have better ROE and to gain investor
trust. Fatima fertilizer is in very bad situation, having
negative ratio shows that company is in loss. Company
has to pay interest cost from its assets