UNIVERSITY OF CENTRAL PUNJAB
FALL - 2022
Course Title: Financial Statement Analysis Course
Code: FIN4233
Term Assignment/Project
Name of Course Instructor:
Ms. Madeeha Islam
Section: B
Program:
Submission Date:
10-02-2023
BBA
Maximum Marks:
Course Objective:CO1CO4
Program Objective:
PEO02, PEO-03
Date: 16-01-2023
20
Course Learning Objective: CL02-CL08
TO BE FILLED IN BY THE STUDENT
Student Name:
Registration No:
Ali Haider Rizvi
L1F19BBAM0860
M. Irfan
L1F19BBAM0002
Muhammad Junaid Khan
LL1F19BBAM0923
Yahya Khan
L1F21PABA0029
Sr. No:
Important Note: This is a group project of 5 students (each group). You are required to fill the above
table with correct details. Attendance Sheet has been uploaded on CMS portal for the details of serial
numbers. Submit hard copy of your project prepared on MS Word, also share Power Point through my
email: madeeha.islam@ucp.edu.pk
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Part 1: SELECTING A COMPANY
Attock Petroleum Limited
Attock Petroleum Limited is Pakistani oil marketing company which is a subsidiary of the UK-domiciled
company Attock Oil Company. It is based in Rawalpindi, Pakistan. It started its operations in 1998 and
is third largest oil marketing company in Pakistan as of 2018.
Part 2: COMPANY BACKGROUND
1). 2nd, 7th & 8th Floor, Attock House, Morgah, Rawalpindi. contact@apl.com.pk
https://www.apl.com.pk/
2). Attock Petroleum Limited is Pakistani oil marketing company which is a subsidiary of the UKdomiciled company Attock Oil Company. It is based in Rawalpindi, Pakistan. It started its operations
in 1998.
3). The company’s dependent audit firm.
4). In Pakistan and other parts of the world in various sectors like petroleum, power generation,
chemical, real estate and cement are the primary business of the company.
5). Large Size Public Listed Company
6). APL
 Current share price of the APL in the market: Rs.317.86.
7). Boards of Director:
Mr. Laith G. Pharaon (Chairman) Non – Executive.
A businessman and an international investor who has financial and trading interests in Pakistan and other
parts of the world in various sectors like petroleum, power generation, chemical, real estate and cement
etc. Mr. Laith holds a graduate degree from the University of Southern California. He is also Director
on the Board of various Companies in the Group.
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Mr. Wael G. Pharaon (Director) Non – Executive.
A businessman and an international investor who has financial and trading interests in Pakistan and
other parts of the world in various sectors like petroleum, power generation, chemical, real estate and
cement etc. Mr. Wael holds a graduate degree. He is a Director on the Board of various Companies
in the Attock Group of Companies.
Mr. Shuaib A. Malik (Chief Executive Officer & Director) Executive.
Mr. Shuaib A. Malik has been associated with Attock Group of Companies, one of the largest
conglomerates in the Country having diversified interests in Oil & Gas, Power Generation, Cement,
Information Technology, Renewable Energy, Medical Services and Real Estate Development etc.,
for more than four decades. He became the youngest Chief Executive of the Group Holding
Company, “The Attock Oil Company Limited” on September 01, 1995. With his hard work,
dedication, business acumen and professional abilities, he eventually rose to the highest management
position in the Group and was appointed as Group Chief Executive of “Attock Group of Companies”
in July 2006.
Mr. Abdus Sattar (Director) Non – Executive
Mr. Abdus Sattar has over 35 years of Financial Management experience at key positions of
responsibility in various Government organizations / ministries, commercial organizations with the
main objective of controlling costs of various commodities, to watch consumer interest, minimize
government subsidies, improve government revenues, eliminate wasteful expenses / leakages and
fixation of gas and POL prices. Serving as Financial Advisor in Ministry of Petroleum he also served
as Director on a number of boards like OGDCL, PPL, SNGPL, SSGCL, PSO, PARCO, ARL, POL,
NRL, PMDC etc. as a nominee of Government of Pakistan for about seven years.
Lt. General Javed Alam Khan (Retd.) (Independent Director) Non – Executive
Lt. General Javed Alam Khan was commissioned in Pakistan Army in April 1971 and subsequently
joined the Armored Corps – 24 Cavalry (Frontier Force) in 1972. He is a graduate of Armour Officer
Advance Course, Fort Knox (USA), Command and Staff College, Camberley (UK), National
Defense College, Islamabad and INSEAD, France. He holds a Master’s degrees in War Studies.
General Inter-Services Intelligence. His military career of nearly 35 years achieved its peak when
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appointed as Commander of a Strike Corps followed by his retirement in April 2006. In recognition
of his meritorious services, he has been awarded Hilal-e-Imtiaz (Military).
Mr. Mohammad Raziuddin (Independent Director) Non – Executive
Mr. Mohammad Raziuddin has over 30 years of rich experience in the energy sector. He holds a
Master’s Degree in Engineering from University of Detroit, Michigan, USA and did his MBA from
Syracuse University, New York, USA. During his career, he has held top-level advisory positions in
various organizations within the Country and also served as Technical Advisor in Saudi Arabia,
Pakistan and Bangladesh. He has served as the CEO of Attock Refinery Ltd. and Managing Director,
OGDCL. He has extensive knowledge and vast experience in energy consultancy, oil refining,
exploration and production, petroleum marketing etc.
Ms. Zehra Naqvi (Independent Director) Non – Executive
Ms. Zehra Naqvi was the CEO of Chubb Insurance Pakistan, (a wholly owned subsidiary of Chubb
INA International Holdings Limited, Delaware, USA) from September 2005 to September 2017. She
has over 35 years of work experience in the insurance sector. Ms. Naqvi has served as an Independent
Director on the Board of Abbott Laboratories (Pakistan) Limited. She presently serves as a NonExecutive Director on the Board of Chubb Insurance Pakistan Limited, as an Independent Director
on the Board of Atlas Asset Management Limited and on the Board of IGI Life Insurance Limited.
Mr. Babar Bashir Nawaz (Alternate Director to Mr. Laith G. Pharaon) Non – Executive
He has an illustrious career span of over 40 years with the Attock Group of Companies. During this
period, he has held various positions in Finance, Marketing, Personnel & General Management,
before being appointed as the Chief Executive Officer of Attock Cement Pakistan Limited in 2002.
Being a seasoned professional, he has attended various courses, workshops and seminars in Pakistan
and abroad on the business management and carries enormous knowledge of the cement industry in
Pakistan. Currently, he is the Vice Chairman of All Pakistan Cement Manufacturers Association
(APCMA).
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M. Adil Khattak (Alternate Director to Mr. Wael G. Pharaon) Non – Executive
Mr. M. Adil Khattak, Chief Executive Officer of Attock Refinery Limited (ARL) since 2005 has
been associated with the Attock Oil Group.
Mr. Khattak also holds the positions of Chief Executive Officer of Attock Gen Limited (AGL),
Attock Hospital (Pvt.) Ltd.
Attock Group of Companies is the only fully vertically integrated Group covering all aspects of the Oil
and Gas sectors of Pakistan, ranging from exploration.
Part 3: OVERVIEW OF THE ANNUAL REPORT
1. Review the year-end balance sheet of the company for the last 5 years and indicate
the following:
Total current assets = Cash and Cash Equivalents + Accounts Receivable + Inventory
+Marketable Securities
2018
= 12,460,539+16,475,576 + 5,839,645 + 3,372,804
Rs 38,148,564
2019
= 12,865,862+16,838,255 +3,810,956 +3,587,872
Rs 37,102,945
2020
= 9,464,503+ 13,970,178+8,279,393 +3,812,064
Rs 35,526,138
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2021
= 16,121,539+ 11,025,245+11,391,415 +5,672,781
Rs 44,210,980
2022
= 51,662,152+18,218,902 +5,438,672 +3,055,306
Rs 78,375,032
Total non-current assets= Property, plant and equipment + other non current assets
2018
=6,417,787 + 1,564,975
Rs 7,982,762
2019
=8,348,942 + 950,825
Rs 9,299,767
2020
=13,839,661 + 1,872,533
Rs 15,712,194
2021
=16,616,819 + 1,070,086
Rs 17,686,905
2022
=16,597,854 + 1,378,159
Rs 17,976,013
Total current liabilities= Trade payables + others
2018
=26,138,159 + 663,965
Rs 26,802,124
2019
=26,633,386 + 49598
Rs 26,682,984
2020
=27,561,324 + 347,404
Rs 27,908,728
2021
= 31,179,480 + 615,975
Rs 31,795,455
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2022
= 47,614,884 + 4,070,848
Rs 51,685,732
Total non-current liabilities; =Long term lease liabilities + others
2018
=0 + 911,540
Rs 911,540
2019
=0 + 792,993
Rs 792,993
2020
=3,978,932 + 904,651
Rs 4,883,583
2021
= 6,274,485 + 1,107,011
Rs 7,381,496
2022
= 6,257,911 + 1,088,2447
Rs 7,346,158
Total stockholder’s equity. = Shareholders equity + Non-current liabilities+ current liabilities
2018
= Rs 18,417,662 + 911,540 +26,802, 124
Rs 46,131,326
2019
=18,926,735 +792,993 + 26,682,984
Rs 46,402,712
2020
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=18,446,021+ 4,883,583 + 27,908,728
Rs 51,238,232
2021
= 22,720,934 + 7,381,496 + 31,795,455
Rs
2022
= 37,319,155 + 7,346,158 + 51,685,752
Rs 96,351,045
For each of the above, note whether this was an increase, a decrease, or no change from the previous
year-end balance sheet.
It is seen that there was an increase in total shareholders equity and liability compared with the
previous balance sheet
2. Review the last 5 year's income statement and other comprehensive income and
indicate the following: (Read notes)
o total (operating) revenues;
2018 177,216,737
2019 223,054,532
2020 201,078,720
2021 188,645,375
2022 370,074,929
o cost of goods sold;
2018 Rs 167,473,443
2019 Rs 214,833,185
2020 Rs 197,440,830
2021 Rs 178,663,434
2022 Rs 329,071,837
o total expenses (before income taxes)
2018 Rs 1,657,969
2019 Rs 2,512,789
2020 Rs 2,554,097
2021 Rs 2,482,212
2022 Rs 8,243,169
o
any non-operating (or extraordinary) gains and losses;
2022
2021
Finance income
1,607,795
1,333,519
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Finance cost
1,587,052
1,418,918
Share of profit of
Associated
Companies
78,756
33,553
Other Charges
2,249,653
508,825
o and earnings per common share and dilutive earning per share IAS-33
2018 Rs 68.19
2019 Rs 39.79
2020 Rs 10.13
2021 Rs 49.43
2022 Rs 186.23
Explain each item reported in the other comprehensive income, or otherwise.
The following items are included in other comprehensive income
Items that will not be subsequently reclassified to profit or loss:
1. Remeasurement loss/ gain on staff retirement benefit plan-net of tax
2. Share of other comprehensive loss/ income of associated companies
3. Other comprehensive loss/ income for the year
For each of the above, note whether this was an increase, a decrease, or no change from the previous
year's income statement.
3. Review the statement of cash flows for the last 5 years and indicate the following:
o if the company use the direct or indirect method of presenting this
statement;
o net cash inflow (outflow) from operating activities;
2018 (1,030,368)
2019 2,998,293
2020 7,414,512
2021 5,631,875
2022 (552,540)
o net cash inflow (outflow) from financing activities;
2018 (3,088,661)
2019 (3,492,842)
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2020 (1,851,147)
2021 (1,498,680)
2022 (5,223,655)
o net cash inflow (outflow) from investing activities;
2018 (2,292,841)
2019 (1,246,624)
2020 (1,681,346)
2021 (1,177,105)
2022 965,658
and
o net increase (decrease) in cash during the year.
2018 (6,607,048)
2019 (1,734,673)
2020 3,880,335
2021 2,957,816
2022 (4,802,111)
Part 4: THE AUDITORS
1). The name of your company's auditors (accounting firm):
 Mr. Mohammad Raziuddin (Chairman)
 Mr. Abdus Sattar
 Javed Alam Khan
 Mr Zehra Naqvi
 and the city in which the audit opinion was signed; The audit opinion was signed in
Rawalpindi
 The size of the accounting firm: It contains 4 members
2). Summary indicating what we learned about the audit firm.
The audit Committee of Attock petroleum limited has been formed to conduct its annual review
of its financial statements together through the conduct and operations of the company during
June 2022. The Committee had made sure that the achievement of operational, compliance, risk
management, and financial reporting control objectives thus it safeguards the asset of the
company and the shareholder’s wealth at all levels within the company by having deployed an
independent internal audit function in the company that is responsible for monitoring risks. The
audit committee would closely review the arrangements of the company. So that no cases of
complaints regarding whistleblowing events are been revised.
And the opinion of the auditor is Qualified opinion.
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Part 5: REVIEW OF OPERATIONS
1).
Sales revenue = Sales * Average Price of Service or Sales Price
2018
=177,216,737
2019
=223,054,352
2020
=201,078,720
2021
=188,645,375
2022
=370,074,929
Cost of goods sold = Beginning inventory + Purchases – Ending inventory
2018
= 92,831,590 + 120,968,983-46,327,130
=167,473,443
2019
=94,870,955+ 175,753,920-55,791,690
=214,833,185
2020
= 100,857,973+129,320,792- 32,737,935
=197,440,830
2021
=97,681,302+120,420, 587-39,438,455
=178,663,434
2022
156,879,712+238,987,188-66,795,063
=329,071,837
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Operating expenses =Gross profit - operating profit
2018
=9,743,294-8,085,325
=1,657,969
2019
=8,221,167-5,708,378
=2,512,789
2020
=3,637,890-1,083,793
=2,554,097
2021
=9,981,941-7,499,729
=2,482,212
2022
=41,003,092-32,759,923
=8,243,169
Income taxes = Net income - Profit before taxation
2018
=8,289,312-5,656,349
=2,632,963
2019
=5,722,857-3,960,606
=1,762,249
2020
=1,503,086-1,008,294
=494,792
2021
=6,939,058-4,919,632
=2,019,426
2022
=30,609,769-18,536,343
=12,073,426
Net income (loss) = Profit before taxes – Income tax
2018
=8,289,312-2,632,963
=5,656,349
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2019
=5,722,657- 1,762,249
=3,960,606
2020
=1,503,086 - 494,792
=1,008,294
2021
=6,939,058-2,019,426
=4,919,632
2022
=30,609,769- 12,073,426
=18,536,343
Earnings per share, Dilutive Earning per
share.
2018 68.19
2019 39.79
2020 10.13
2021 49.43
2022 186.23
Other comprehensive income = Profit +/- remeasurement gain/loss+/- share of other
comprehensive gain/loss+/-other comprehensive gain/loss
2021
=4,919,632+1,301+943+2244
=4,921,876
2022
=18,536,343-5,656-920-6,576
=18,529,767
2). Did your company have any extraordinary gains or losses, income from discontinued operations,
or cumulative effects of accounting changes during these five years? If so, list and briefly describe
them (hint: check footnotes for details).
Answer:
It is clearly seen that there had been no extraordinary gains or losses as it is clearly
seen in the income statement of 5 years of the company.
3).
Answer:
Items of Current Assets:
 Stock in trade
 Trade debts
 Cash, bank balances and short-term investments
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Items of Non-Current Assets
 Property, plant and equipment
 Long term investments
 Long term Deposits and other receivables
Items of Current Liabilities
 Current portion of long-term lease liabilities
 Current portion of long-term borrowing
 Current portion of deferred government grant
 Trade payables
 Unclaimed Dividend
 Provision for income tax
Items of Non-Current Liabilities
 Long-term deposits
 Long-term lease liabilities
 Long-term borrowing
 Deferred government grant
 Deferred tax liability
Equity
 Authorized capital
 Issued, subscribed and paid-up capital
 Special reserves
 Unappropriated profit
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Part 6: FINANCIAL ANALYSIS
1). Gross profit margin (%) = (Revenue – Cost of goods sold)/Revenue
2018
=(177,216,737-167,473,443)/177,216,737
= 5.50%
2019
=(223,054,352-214,833,185)/223,054,352
=3.69%
2020
=(201,078,720-197,440,830)/201,078,720
= 1.81%
2021
=(188,645,375-178,663,434)/188,645,375
=5.29%
2022
=(370,074,929-329,071,837)/370,074,929
=11.08%
Operating profit margin (%) = Operating income/ Sales (Revenue)
2018
=8,085,325/177,216,737
=4.6%
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2019
=5,708,378/223,054,352
=2.6%
2020
=1,083,793/201,078,720
=0.5%
2021
=7,499,729/188,645,375
=4.0%
2022
=32,759,923/370,074,929
=8.9%
Net profit margin (%) = Net Income/ Sales
2018
=5,656,349/177,216,737
=3.2%
2019
=3,960,606/223,054,352
=1.8%
2020
=1,008,294/201,078,720
=0.5%
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2021
=4,919,632/188,645,375
=2.6%
2022
=18,536,343/370,074,929
=5.0%
Operating and cash cycles
ICF= Net income +/- changes in assets and liability+ non-cash expenses
2018
(2)
2019
4
2020
(1)
2021
(10)
2022
8
ROA and ROE, Perform Dupont Analysis:
ROE= Net Income/shareholders’ equity
2018
=5,656,349/18,417,662
=32.59
2019
=3,969,606/18,926,735
=21.21
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2020
=1,008,294/18,446,021
=5.40
2021
=4,919,632/22,720,934
=23.90
2022
=18,536,343/37,319,155
=61.75
Dividend Payout (%) = Total Dividends/ Net Income
2018
=3,317,760/5,656,349
=58.66
2019
=1,990,656/3,969,606
=50.26
2020
=895,795/1,008,294
=88.84
2021
=2,687,386/4,919,632
=54.63
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2022
=4,478,976/18,536,343
=24.16
Common size analysis:
2). From the computations above and any other data you observe, what specific trends (if any) do you
observe? Briefly discuss the implications of each.
Answer:
From the above computations, it is clearly seen that there had been changes in ratios due to the increase
and decrease in values of the assets, liabilities, gross profit and operating and cash cycles
3). The issue of whether or not to capitalize costs is a controversial one in financial reporting. For
example, some interest costs are expensed, and others are capitalized. Some product development costs
are expensed, and others are capitalized. Give an example (if there is any) of a item that your company
capitalizes and another that it expenses, and present a brief conceptual argument against these
accounting methods.
Answer:
So therefore, it is said that for capitalization there is a recording of cost or expense on the balance sheet
for the purpose of delaying full recognition of the expense.
4). Based upon your review of the past five years' financial statements for your company, describe the
its overall operating effectiveness and efficiency. Document the accounting numbers or ratios that
support your conclusion.
Answer:
It is clearly seen from the financial that there is improvement in company’s overall operating
effectiveness and efficiency. Like it is seen that market share had been increased
2021: 9.40%
2022: 10%
5). Review your company's liabilities and stockholders' equity and describe briefly your conclusions
about the extent to which your company is using financial leverage (Debt financing).
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Answer:
It is clearly seen that the financial leverage is unchanged as total assets is equal to total Equity
6). List the number of outstanding shares from these five balance sheets and compute the increase or
decrease for each during this past year.
Answer:
 Share capital (there had been increase)
 Reserves (there had been increase)
 Shareholders’ equity (there had been increase)
7). If your company has more than one class of stock, briefly summarize the differences in these equity
securities. For instance, if the company has any preferred stock, indicate what features the stock has
(participating, convertible, cumulative, etc.).
Answer:
It is clearly seen that; the company has common stock and its features are effective and efficient.
8). What dividends, if any, did your company declare during the past year? Indicate whether the
dividends were paid in cash or stock.
Answer:
It is clearly seen dividends were been paid in cash.
9). Indicate whether the company held any treasury stock at the most recent balance sheet date. If so,
indicate how many shares and the average cost at which they were purchased.
Answer:
It is clearly seen that there is no treasury stock at the most recent balance sheet of the firm.
10). Did your firm make any material changes in capital structure (mix of debt and equity) during the
past year? If so, please describe briefly.
Answer:
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It is clearly seen that the firm have not made any material changes in capital structure during the past
year.
11). Does your company have any pension or other post-retirement benefit obligations in their most
recent balance sheet? If so, summarize the nature and amount of these obligations, and list the total
pension cost/expense for the most recent period (see income statement or related disclosures).
Answer:
It is clearly seen that there is no pension or other post-retirement benefit obligations in the most recent
balance sheet of the firm.
12). Are there any contingent liabilities reported or disclosed on the most recent year- end balance
sheet? What implications, if any, do they have for your company's financial well-being?
Answer:
It is clearly seen that there are no contingent liabilities reported or disclosed on the most recent.
13). Based upon the information you have for your company, compute the following financial ratios
and analysis for each of the most recent five years:
Liquidity:
Current Ratio = Current Assets/ Current Liabilities
2018
=38,148,564/26,802,124
=1.42
2019
=37,102,945/26,682,984
=1.39
2020
=35,526,138/27,908,728
=1.27
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2021
=44,210,980/31,795,455
=1.39
2022
=78,375,032 /51,685,732
=1.51
Quick ratio = (cash+ marketable securities+ receivable)/ Current liabilities
2018
= (5,839,635+ 0+0)/26,802,124
=0.22
2019
= (3,810,956+0+0)/ 26,682,984
=0.09
2020
= (8,279,393+0+0)/ 27,908,728
=0.93
2021
=(1,391,415+0+0)/ 31,795,455
=0.88
2022
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=(5,438,672 +0+0) / 51,685,732
=0.51
Cash ratio
Cash Ratio = (cash + marketable securities) / Current liabilities
2018
0.19
2019
0.13
2020
0.26
2021
0.32
2022
0.11
Solvency ratio:
Debt Ratio = Total debt/ total asset
2018
=16,475,576/46,131,326
= 0.36
2019
= 16,838,255/ 46,402,712
= 0.36
2020
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= 13,970,178/ 51,238,332
= 0.27
2021
= 11,025,245/ 61,897,885
= 0.18
2022
= 18,218,902/ 96,351,045
= 0.19
Financial leverage = Total asset / Total equity
2018
46,131,326/46,131,326 =1
2019
46,402,712/46,402,712= 1
2020
51,238,232/51,238,232=1
2021
61,897,885/61,897,885=1
2022
96,351,045/96,351,045=1
Long-term debt to equity = Long term debt /total equity
2018
0:100
2019
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0:100
2020
0.65 : 99.35
2021
0.27: 99.73
2022
0:100
Common size analysis:
14). Briefly comment on the inferences that you draw from the analysis you computed.
Answer:
It is clearly seen that there had been changes in the liquidity and solvency ratios, as there had been
increase or decrease in the ratios
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