Engro foods

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1.ENGRO FOODS
The Local Flavor with a global Vision
Engro Foods (Pvt.) Limited (EFL) has been established in 2005 as part of a
diversification process at the Engro Group. The plant located at Sukkhur on 23 acre land, has the
raw milk reception capability of 300,000 liters per day and UHT milk capacity of 200,000 liters
per day. The plant has been established at a cost of Rs. 1 billion which provides direct
employment to 750 people.
Engro Foods has entered the Food business through milk processing and sale with the
company’s vision to pursue growth opportunities based on country fundamentals and own
strength. It also positions the company to leverage its corporate social responsibility initiatives
and work closely with rural communities to promote integrated farming and livestock
development. This effort is expected to play a pivotal role in poverty alleviation and improving
livelihoods of the poor in the milk collection areas.
2.VISION
“ To be the Premier Pakistani Enterprise with a global reach, passionately pursuing value
creation for all stake holders”.
3.MISSION
“To help farmers maximize their farm produce by providing quality plant nutrients and technical
services upon which they can depend. To create wealth by building new businesses based on
company and country strengths in Petrochemicals, Information Technology, Infrastructure and

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other Agricultural sectors. In pursuing the mission we shall at all-time be guided in our conduct
and decision making by our Core Values.”
4. Consolidated Balance Sheet
Amounts In Thousand Dec 31,
2014
Dec 31,
2013
Dec 31,
2012
Assets
Non-Current Assets
Property, plant and equipment 15,021,519 14,509,608 11,023,246
Biological assets 858,680 716,465 668,455
Intangible assets 112,208 603,719 104,569
Long term advances and deposits 109,174 93,132 81,862
Deferred employee share option
compensation expense
112,581 168,865 ______
Advance against purchase of shares of
Engro Foods Netherland B.V.
______ ______ 863,018
16,214,162 16,091,789 12,741,150
Current Assets
Stores, spares and loose tools 788,141 739,671 610,640
Stock-in-trade 3,697,787 3,199,390 3,494,605
Trade debts 95,962 245,767 149,074
Advances, deposits and prepayments 113,501 186,754 261,790
Other receivables 2,865,607 2,359,162 1,440,167
Deferred employee share option
compensation expense
90,430 136,153 ______
Taxes recoverable 1,637,018 636,588 347,075
Derivative financial instruments ______ ______ 25,787
Short term investments ______ 170,000 2,708,750
Cash and bank balances 197,106 575,036 422,008

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9,485,552 8,248,521 9,459,896
Total Assets 25,699,714 24,340,310 22,201,046
2014
Dec 31,
2013
Dec 31,
2012
Equity & Liabilities
Equity
Share capital 7,665,961 7,665,961 7,615,776
Advance against issue of share capital ______ ______ 1,234
Share premium 865,354 865,354 810,280
Employee share option compensation
reserve
399,740 407,133 ______
Hedging reserve (27,736) (9,581) 16,761
Remeasurement of post-employment
benefits - Actuarial loss
(35,715) (34,839) (22,954)
Other reserve (628,780) (628,780) ______
Exchange revaluation reserve (9,507) 14,727 ______
Unappropriated profit / (Accumulated
loss)
3,348,470 2,480,594 1,610,222
11,577,787 10,760,569 10,031,319
Non-Current Liabilities
Long term finances 5,476,993 7,126,994 6,023,070
Deferred taxation 1,185,717 1,538,583 1,652,520
Deferred income 2,516 9,410 17,390
6,665,226 8,674,987 7,692,980
Current Liabilities
Current portion of
-long term finances 1,605,597 1,032,008 1,685,823
-obligations under finance lease ______ ______ 2,589
Trade and other payables 3,222,697 3,405,175 2,394,108
Derivative financial instruments 41,397 14,517 ______
Accrued interest / mark-up on
-long term finances 194,025 229,312 302,273

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-short term finances 61,092 10,337 6,565
Short term finances 2,331,893 213,405 85,389
7,456,701 4,904,754 4,476,747
Total Equity & Liabilities 25,699,714 24,340,310 22,201,046
5. Consolidated Profit And Loss Account
Amounts In Thousands Dec 31,
2014
Dec 31,
2013
Dec 31,
2012
Net sales 43,422,187 37,929,238 40,168,919
Cost of sales (35,306,950) (29,752,008) (29,848,301)
Gross profit 8,115,237 8,177,230 10,320,618
Distribution and marketing expenses (4,744,092) (5,020,269) (4,654,275)
Administrative expenses (1,389,722) (975,371) (795,690)
Other operating expenses (112,608) (340,473) (429,763)
Other income 304,854 326,911 382,402
Operating profit 2,173,669 2,168,028 4,823,292
Other expenses (453,381) (208,456) ______
Finance costs (1,246,888) (785,467) (902,503)

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Profit before taxation 473,400 1,174,105 3,920,789
Taxation 394,476 (303,733) (1,325,616)
Profit for the year 867,876 870,372 2,595,173
6. Financial Ratio Analysis Data

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Input Data
(Amounts In
Thousands)
2014 2013 2012
Current Assets 9,485,552 8,248,521 9,459,896
Current liabilities 7,456,701 4,904,754 4,476,747
Inventories 3,697,787 3,199,390 3,494,605
Total debt 14,121,927 13,579,741 12,169,727
Stakeholder’s equity 11,577,787 10,760,569 10,031,319
Total assets 25,699,714 24,340,310 22,201,046
Long term debt 6,665,226 8,674,987 7,692,980
Total capitalization 18,243,013 19,435,556 17,724,299
Earnings before interest and taxes 2,173,669 2,168,028 4,823,292
Interest expenses 902,503 785,467 1,246,888
Net sales 43,422,187 37,929,238 40,168,919
Receivables 2,865,607 2,359,162 1,440,167
Net purchases 29,144,023 23,969,367 26,397,197
Accounts payable 3,222,697 3,405,175 2,394,105
Cost of goods sold 35,306,950 29,752,008 29,848,301
Gross profit 8,115,237 8,177,230 10,320,616
Net profit after tax 867,876 870,372 2,595,173

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7. Ratio Analysis
BALANCE SHEET
1) Liquidity Ratio – the ratio between the liquid assets and the liabilities of a
bank or other institution /the ability of the firm to pay its way.
a) Current Ratio- The current ratio is a liquidity ratio that measures a company's
ability to pay short-term and long-term obligations. To gauge this ability, the current
ratio considers the total assets of a company (both liquid and illiquid) relative to that
company's total liabilities.
Current Ratio =
Current Assets
Current Liabilities
b) Quick/ Acid Test Ratio- The quick ratio is a measure of how well a company can
meet its short-term financial liabilities. Also known as the acid-test ratio.
Quick Ratio =
Current Assets − Inventories
Current Liabilities
2) Financial Leverage/ Debt Ratio – Financial leverage is the amount of debt
that an entity uses to buy more assets. Leverage is employed to avoid using too much
equity to fund operations. An excessive amount of financial leverage increases the risk of

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failure, since it becomes more difficult to repay debt/ the rate at which the company sells
its stock and the efficiency with which it uses its assets.
a) Debt To Equity Ratio- It is a financial ratio indicating the relative proportion of
shareholders' equity and debt used to finance a company's assets. Closely related to
leveraging, the ratio is also known as Risk, Gearing or Leverage.
Debt To Equity Ratio =
Total Debt
Shareholder′s Equity
b) Debt To Total Assets Ratio- The debt to total assets ratio is an indicator of
financial leverage. It tells you the percentage of total assets that were financed by
creditors, liabilities, debt.
Debt To Total Assets Ratio =
Total Debt
Total Assets
c) Long Term Debt To Total Capitalization Ratio- A measurement of a
company's financial leverage, calculated as the company's debt divided by its total
capital. Long term Debt includes all long-term obligations. Total capital includes the
company's debt and shareholders' equity, which includes common stock, preferred
stock, minority interest and net debt.
Long Term Debt To Total Capitalization Ratio =
Long Term Debt
Total Capitalization

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INCOME STATEMENT RATIO’S & INCOME
STATEMENT TO BALANCE SHEET RATIO’S
3) Coverage Ratio- The coverage ratio is a measure of a company's ability to meet its
financial obligations.
a) Interest Coverage Ratio- The interest coverage ratio is a financial ratio used to
measure a company's ability to pay the interest on its debt. The interest coverage
ratio is also known as the times interest earned ratio.
Interest Coverage Ratio =
Earning Before Interest And Taxes
Interest Expense
4) Activity Ratios- Activity ratios are accounting ratios that measure a firm's ability to
convert different accounts within its balance sheets into cash or sales. Activity ratios are
used to measure the relative efficiency of a firm based on its use of its assets, leverage or
other such balance sheet items.
a) Receivable Activity
i. Receivable Turnover Ratio- Receivable Turnover Ratio or
Debtor's Turnover Ratio is an accounting measure used to measure how
effective a company is in extending credit as well as collecting debts.
The receivables turnover ratio is an activity ratio, measuring how efficiently a
firm uses its assets.

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Receivable Turn Over Ratio =
Annual Net Credit Sales
Receivables
ii. Receivable Turnover In Days- Average number of days receivables are
outstanding before being collected.
Receivable Turn Over In Days =
Days In Years
Rceivable Turn Over Ratio
b) Payables Activity
i. Payable Turnover Ratios- The accounts payable turnover ratio is a short-
term liquidity measure used to quantify the rate at which a company pays
off its suppliers.
Payable Turn Over Ratio =
Annual Net Credit Purchases
Accounts Payable
ii. Payable Turnover In Days
Payable Turn Over In Days =
Days In Years
Payable Turn Over Ratio
c) Inventory Activities
i. Inventory Turnover Ratio- The inventory turnover ratio is an
efficiency ratio that shows how effectively inventory is managed by
comparing cost of goods sold with average inventory for a period. This
measures how many times average inventory is "turned" or sold during a
period.
Inventory Turn Over Ratio =
Cost Of Good Sold
Inventory

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ii. Inventory Turnover In Days- Average number of days the inventory is
held before it is turned into accounts receivable through sales.
Inventory Turn Ovedr In Days =
Days In Years
Inventory Turn Over Ratio
OPERATING CYCLE VERCES CASH CYCLE
Operating Cycle - The operating cycle is the average period of time required for a
business to make an initial outlay of cash to produce goods, sell the goods, and receive cash from
customers in exchange for the goods.
Operating Cycle = Inventory Turnover In Days + Receivable Turn Over In Days
Cash Cycle- Flow of cash that begins with payment for raw materials and ends
with receipt of cash on goods sold. Shorter the number of days in this cycle, more the amount of
available cash, and lesser the need to borrow. Also called cash conversion cycle or cash
flow cycle.
Cash Cycle = Operating Cycle − Payable Turn Over In Days
5) Profitability Ratios – Profitability ratios are a class of financial metrics that are
used to assess a business's ability to generate earnings as compared to its expenses and
other relevant costs incurred during a specific period of time/ how effective the firm is at
generating profits given sales and or its capital assets.
a) Profitability In Relation To Sales

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i. Gross Profit Margin- Gross profit margin is a financial metric used to
assess a firm's financial health by revealing the proportion of money left
over from revenues after accounting for the cost of goods sold. Gross
profit margin serves as the source for paying additional expenses and
future savings.
Gross Profit Margin =
Sales − Cost Of Good Sold
Net Sales
ii. Net Profit Margin- Net profit margin is the percentage of revenue
remaining after all operating expenses, interest, taxes and preferred stock
dividends (but not common stock dividends) have been deducted from a
company's total revenue.
Net Profit Margin =
Net Profit After Tax
Net Sales
b) Profitability In terms Of Investment
i. Return On Assets- Return on assets (ROA) is an indicator of how
profitable a company is relative to its total assets. ROA gives an idea as to
how efficient management is at using its assets to generate earnings.
Return On Assets =
Total Assets
ii. Return On Equity- Return on equity (ROE) is a measure of profitability
that calculates how many dollars of profit a company generates with each
dollar of shareholders' equity.

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Return On Equity =
ShareHolder′s Equity
Engro Foods Corporation
8. Ratio Analysis
Calculation & Interpretation
An Index That Relate Two Accounting Numbers And Is
Obtained By Dividing One Number By The Other. Ratio
Analysis Is A Form Of Financial Statement Analysis That
Is Used To Obtain A Quick Indication Of A Firm's
Financial Performance In Several Key Areas
Year
Dec 31, 2014

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Dec 31, 2013
Dec 31, 2012
1)Liquidity Ratio
a) Current Ratio
Current Ratio =
Current Assets
Current Liabilities
Years Current Asset Current
Liability
Current
Ratio
Industry
Average
2014 9,485,552 7,456,701 1.30
2013 8,248,521 4,904,754 1.70 1.22
2012 9,459,896 4,476,747 2.11
Analysis:

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Generally a minimum current ratio of 1.0 is acceptable, which indicated that current
assets at least equal current liabilities. The current ratio of the firm is decreasing from 2012-
2014 but it is still high from the industry average, which means the company can easily payoff
its current liabilities by having high amount of current assets.
b) Quick/ Acid Test Ratio
Quick Ratio =
Current Assets − Inventories
Current Liabilities
Years Current
Asset
Inventories Current
Liability
Quick Ratio Industry
Average
2014 9,485,552 3,697,787 7,456,701 1.0
2013 8,248,521 3,199,390 4,904,754 1.02 0.66
2012 9,459,896 3,494,605 4,476,747 1.33
2014 2013 2012
Current Ratio 1.3 1.7 2.11
Industry Average 1.22 1.22 1.22
0
0.5
1
1.5
2
2.5
LiquidityRatio(Current
Ratio)
CurrentRatio

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Analysis:
The quick ratio of the firm is decreasing gradually but it is still higher than the industry
average which indicates that the firm can meet its current financial obligations with the available
quick funds on hand.
2)Financial Leverage/Debt Ratio
a) Debt To Equity Ratio
Debt To Equity Ratio =
Total Debt
Shareholder′s Equity
Years Total Debt Shareholder’s
Holders
Debt Ratio Industry
Average
2014 14,121,927 11,577,787 1.20
2013 13,579,741 10,760,569 1.21 1.47
2014 2013 2012
Quick Ratio 1 1.02 1.33
0
0.2
0.4
0.6
0.8
1
1.2
1.4
LiquidityRatio(QuickRatio)
Quick Ratio

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2012 12,169,727 10,031,319 1.21
Analysis:
It indicated the relationship between the creditors and owners. Generally a ratio of 3 or lower
is considered acceptable. Debt to equity ratio is gradually declining during 2012-2014 and it is
also lower than industry average. The lower the ratio the higher the level of company’s financing
that is being provided by shareholders.
b) Debt To TotalAssets Ratio
Debt To Total Assets Ratio =
Total Debt
Total Assets
Years Total Debt Total Assets Debt To Total
Asset Ratio
Industry
Average
2014 14,121,927 25,699,714 0.54
2013 13,579,741 24,340,310 0.55 0.61
2014 2013 2012
Debt To Equity Ratio 1.2 1.21 1.21
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
Financialleverage(DebtTo
EquityRatio)
DebtTo EquityRatio

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2012 12,169,727 22,201,046 0.60
Analysis:
The declining trend in debt to asset ratio is a good sign for the company which means that
total assets are increasing with high ratio than total debt. The lower the debt to asset ratio the
lower the financial risk. The ratio is continuously decreasing over the 3 year and is also lower
than the industry average that means company’s financial risk is decreasing every year.
c) Long Term Debt To TotalCapitalization Ratio
Long Term Debt To Total Capitalization Ratio =
Long Term Debt
Total Capitalization
2014 2013 2012
Debt To Total Assets Ratio 0.54 0.55 0.6
0.5
0.52
0.54
0.56
0.58
0.6
0.62
Financialleverage(Debt
ToTotalAssetsRatio)
DebtTo TotalAssetsRatio

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Years Long Term
Debt
Total
Capitalization
Total
Capitalization
Ratio
Industry
Average
2014 6,665,226 18,243,013 0.36
2013 8,674,987 19,435,556 0.43 0.57
2012 7,692,980 17,724,229 0.44
Analysis:
The Total Capitalization Ratio of 3 years Financial Analysis of Engro Foods is
decreasing gradually. Long term debt ratio is also less than the Industry Average. The Low debt
and high equity levels in the capitalization ratio indicates good quality of investment.
3)Coverage Ratio
a) Interest Coverage Ratio
Interest Coverage Ratio =
Earning Before Interest And Taxes
Interest Expense
2014 2013 2012
Total Capitalization Ratio 0.36 0.44 0.45
0
0.1
0.2
0.3
0.4
0.5
0.6
Financialleverage(Long
termDebtToTotal
capitalizationRatio)
Long Term Debt To TotalCapitalization Ratio

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Years EBIT Interest Expense Interest Coverage
Ratio
Industry
Average
2014 2,173,669 1,246,888 1.74
2013 2,168,028 785,467 2.76 6.0
2012 4,823,292 902,503 5.34
Analysis:
The interest coverage ratio of the firm has been falling since 2012. It has been below
industry average for the past 3 years. This indicates that low earnings may be a potential problem
for the firm. A low ratio is a strong indicator that a company may default on its loan payments.
4)Activity Ratios
a) Receivable Activity
2014 2013 2012
Interest Coverage Ratio 1.74 2.76 5.34
Industry Average 6 6 6
0
1
2
3
4
5
6
7
CoverageRatio(Interest
CoverageRatio)
Interest CoverageRatio

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i. Receivable Turn Over Ratio
Receivable Turn Over Ratio =
Annual Net Credit Sales
Receivables
Years Annual Net Credit
Sales
Receivables Receivable
Turn Over
Ratio
Industry
Average
2014 43,422,187 2,865,607 15.15
2013 37,929,238 2,359,162 16.07 12.36
2012 40,168,919 1,440,167 27.89
Analysis:
The company’s receivable turnover is best in 2012 because the annual credit sales and
receivables are lowest in that year. Also Receivable Turnover Ratio of 3 years Financial Analysis
of Engro Foods is greater than the Industry Average, a high ratio indicates that the receivables
are more liquid and are being collected promptly.
ii. R
2014 2013 2012
Receivable Turn Over Ratio 15.15 16.07 27.89
0
5
10
15
20
25
30
ActivityRatio(Receivable
TurnOverRatio)
Receivable TurnOver Ratio

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eceivable Turn Over In Days
Receivable Turn Over In Days =
Days In Years
Rceivable Turn Over Ratio
Years Days In
Years
Receivable Turn
Over Ratio
Receivable Turn
Over In Days
Industry
Average
2014 365 15.15 24 days
2013 365 22.71 22 days 36 days
2012 365 27.89 13 days
Analyses:
The overall receivable turnover for the company is not bad because it is collecting cash in
maximum 24 days. The Receivable Turn Over in days of 3 years Financial Analysis of Engro
Foods is less than the Industry Average, because the higher the turnover the shorter the time
between the typical sale and cash collection.
2014 2013 2012
Receivable Turn Over In Days 24 22 13
0
5
10
15
20
25
30
35
40
ActivityRatio(Receivable
TurnOverInDays)
Receivable TurnOver In Days

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b) Payables Activity
i. Payable Turn Over Ratios
Payable Turn Over Ratio =
Annual Net Credit Purchases
Accounts Payable
Years Annual Net
Credit
Purchases
Accounts
Payable
Payable Turn
Over Ratio
Industry
Average
2014 29,144,023 3,222,697 9.04
2013 23,969,367 3,405,175 7.03 4.11
2012 26,397,197 2,394,105 11.02
Analysis:
Payable turnover determines that how earlier a company has paid up its liabilities.
Payable turnover rate has decreased gradually from 2012 to 2013 because of having low
purchases but started to increase in 2014 that means the company is becoming stable and more
capable again to paid up its liabilities. The Payable Turn Over ratio of 3 years Financial Analysis
of Engro Foods is greater than the Industry Average, a higher value indicates that the business
2014 2013 2012
Payable Turn Over Ratio 9.04 7.03 11.02
0
2
4
6
8
10
12
PayableAcyivity(Pyable
TurnOverRatio)
Payable Turn OverRatio

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was able to repay its suppliers quickly.
ii. Payable Turn Over In Days
Payable Turn Over In Days =
Days In Years
Payable Turn Over Ratio
Years Days In
Years
Payable Turn
Over Ratio
Payable Turn
Over In Days
Industry
Average
2014 365 9.04 40 days
2013 365 7.03 52 days 84 days
2012 365 11.02 33 days
Analysis:
It determines average number of days that payables are outstanding. Company is paying
its suppliers in maximum 52 days. The overall 3 years of inventory turnover ratio of the firm is
lower than the industry average, which indicates that company is paying its liabilities earlier.

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c) Inventory Activities
i. Inventory Turn Over Ratio
Inventory Turn Over Ratio =
Cost Of Good Sold
Inventory
Years Cost Of Goods
Sold
Inventories Inventory Turn
Over Ratio
Industry
Average
2014 35,306,950 3,697,787 9.54
2013 29,752,008 3,199,390 9.29 7.21
2012 29,848,301 3,494,605 8.54
Analysis:
2014 2013 2012
Payable Turn Over In Days 40 51 33
0
20
40
60
80
100
PayableActivity(Payable
TurnOverInDays)
Payable Turn OverIn Days

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The increasing trend in inventory turnover ratio from 2012-2014 leads the highest sale
that means it is turning its inventory into sales quickly. The Inventory Turn Over ratio of 3 years
Financial Analysis of Engro Foods is greater than the Industry Average, a high inventory
turnover ratio indicate good sales. It also implies better liquidity.
ii. Inventory Turnover In Days
Inventory Turn Over In Days =
Days In Years
Years Days In Years Inventory Turn
Over Ratio
Inventory Turn
Over In Days
Industry
Average
2014 365 9.54 38 days
2013 365 9.29 39 days 53 days
2012 365 8.54 43 days
Analysis:
It determines how quickly a company is converting their inventory into sales. Inventory
2014 2013 2012
Inventory Turn Over Ratio 9.54 9.29 8.54
0
2
4
6
8
10
12
InventoryActivities
(InventoryTurnOver
Ratio)

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turnover ratio from2012-2104 is decreasing gradually. The company will take maximum 43 days
to sell Inventory as compared to Industry Average. The 3 years of financial analysis is lower than
the industry average, indicating that firm will take less time to turn their inventory in to account
receivables through sales.
Operating Cycle
Operating Cycle= Inventory Turnover In Days + Receivable Turn Over In Days
Years Inventory
Turn Over In
Days
Receivable
Turn Over In
Days
Operating Cycle Industry
Average
2014 38 days 24days 62 days
2013 39 days 22days 61 days 91 days
2012 43 days 13days 56 days
Analysis:
2014 2013 2012
Inventory Turn Over In Days 38 39 43
0
10
20
30
40
50
60
InventoryActivity
(InventoryTurnOverIn
Days)
Inventory Turn Over In Days

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It determines how fast the company is selling its products and receiving cash. Engro had
a great operating cycle in 2012 with minimum 56days of average collection period. Reading
shows the high operating cycle in 2013 and 2014 because of having fewer sales and therefore,
they had less receivable turnover. The Operating Cycle of 3 years Financial Analysis of Engro
Foods is lower than the Industry Average that means the company has taken less days to
manufacture a product, sell it, and collect cash from sales.
Cash Cycle
Cash Cycle = Operating Cycle − Payable Turn Over In Days
Years Operating
Cycle
Payable Turn
Over In Days
Cash Cycle Industry
Average
2014 62 days 40 days 22 days
2013 61 days 52 days 9 days 58 days
2012 56 days 33 days 23 days
Analysis:
2014 2013 2012
Operating Cycle 62 61 56
0
20
40
60
80
100
OperatingCycle
OperatingCycle

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Cash cycle of a company shows that how much cash is generating by a company in how
many days. Engro had the minimum cash cycle in 2013 when the company had fewer sales as
compared to other years. As the sales had increased in 2012 and 2014; lead to high operating
cycle and high payable turnover because of having high purchases. The Cash Cycle of 3 years
Financial Analysis of Engro Foods is lower than the Industry Average, that means company
generated cash in fewer days as compared to Industry Average.
5)Profitability Ratios
a) Profitability In RelationTo Sales
i. Gross Profit Margin
Gross Profit Margin =
Sales − Cost Of Good Sold
Net Sales
Years Sales Cost Of
Goods Sold
Net Sales Gross Profit
Margin
Industry Average
2014 43,422,187 35,306,950 43,422,187 0.18 or 18.6%
2013 37,929,238 29,752,008 37,929,238 0.21 or 21.5% 0.36 or 36%
2012 40,168,919 29,848,301 40,168,919 0.25 or 25.6%
2014 2013 2012
Cash Cycle 22 9 22
0
10
20
30
40
50
60
70
CashCycle
Cash Cycle

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Analysis:
The decreasing trend in gross profit margin from 2012-2014 occurs due to increase in
cost of goods sold. The Gross Profit Margin of 3 years Financial Analysis of Engro Foods is also
lower than the Industry Average, which means that the firm has weak gross profit margin. A
decline in a business' gross profit margin means fewer funds are available for operating expenses
and taxes.
ii. Net Profit Margin
Net Profit Margin =
Net Sales
Years Net Profit
After Tax
Net Sales Net Profit Margin Industry Average
2014 867,876 43,422,187 0.02 or 2%
2013 870,372 37,929,238 0.02 or 2% 0.06 or 6%
2014 2013 2012
Gross Profit Margin 0.18 0.21 0.25
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
ProfitabilityRatio(Gross
ProfitMargin)
Gross ProfitMargin

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2012 2,595,173 40,168,919 0.06 or 6.4%
Analysis:
Profit margin tells that how much profit we earned by the sales. In 2012 the company’s
profitability is highest because the net profit has increased and it is also almost equals to industry
average. In 2013-2014 companies’ net profit has decreased and so the company had less net
profit margin and this ratio is also lower than the industry average.
b) Profitability In terms Of Investment
i. Return On Assets
Return On Assets =
Total Assets
Years Net Profit
After Tax
Total
Assets
Return On Assets Industry Average
2014 867,876 25,699,714 0.03 or 3.4%
2013 870,372 24,340,310 0.03 or 3.5% 0.08 or 8%
2014 2013 2012
Net Profit Margin 0.02 0.02 0.06
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
ProfitabilityRatio(Net
ProfitMargin)
NetProfitMargin

32 | P a g e
2012 2,595,173 22,201,046 0.11 or 11.6%
Analysis:
Return on Investment tells us about how much company is getting profit by the
investment. In 2012, company had highest return on investment which was a good sign for the
company and this year ratio is also greater than the industry average but after that, company was
not earning by the investment as it was earning in 2012 because they had less investment in 2013
and in 2014. The Return on Asset of years Financial Analysis of Engro Foods (i.e. 2013-2014) is
also smaller than the Industry average, that means company is facing difficulty in managing its
assets to produce greater amount of net income.
ii. Return On Equity
Return On Equity =
ShareHolder′s Equity
Years Net Profit
After Tax
Shareholder’s
Equity
Return On Equity Industry Average
2014 867,876 11,577,787 0.07 or 7.7%
2014 2013 2012
Return On Asset 0.03 0.03 0.11
Industery Average 0.08 0.08 0.08
0
0.02
0.04
0.06
0.08
0.1
0.12
ProfitabilityRatio(Return
OnAsset)
ReturnOn Asset

33 | P a g e
2013 870,372 10,760,569 0.08 or 8% 0.21 or 21%
2012 2,595,173 10,031,319 0.25 or 25.9%
Analysis:
Return on equity of the company shows that how much a company is getting returns
through shareholder’s equity which is highest in 2012 when the company had highest sales and
this year ratio of ROE is also greater than the industry average. The declining trend in ROE of
the firm can be seen clearly, in 2013 – 2014 Company had less sales and less equity as well.
2014 2013 2012
Interest Coverage Ratio 0.07 0.08 0.25
0
0.05
0.1
0.15
0.2
0.25
0.3
ProfitabilityRatio(Return
OnEquity)
ReturnOn Equity

34 | P a g e
“A Trend Analysis Is A Method Of Analysis That Allows
Traders To Predict What Will Happen With A Stock In
The Future. Trend Analysis Is Based On Historical Data
About The Stock's Performance Given The
Overall Trends Of The Market And Particular Indicators
Within The Market.”
Year
Dec 31, 2014
9. Trend Analysis

35 | P a g e
Dec 31, 2013
Dec 31, 2012
Trend Analysis
Types Of Ratio
Analysis
Dec 31,
2014
Dec 31,
2013
Dec 31,
2012
Industry
Median
Liquidity
Current Ratio 1.30 1.70 2.11 1.22
Quick/Acid Test Ratio 1.0 1.02 1.33 0.66
Financial Leverage
Debt Ratio
Debt To Equity Ratio 1.20 1.21 1.21 1.47
Debt To Total Asset Ratio 0.54 0.55 0.60 0.61
Long Term Debt To Total
Capitalization Ratio
0.36 0.43 0.44 0.57
Coverage Ratios
Interest Coverage Ratio 1.74 2.76 5.34 6.0
Activity Ratios
Receivable Turn Over Ratio 15.15 16.07 27.89 12.36
Receivable Turn Over In
Days
24 days 22 days 13 days 36 days
Payable Turn Over Ratio 9.04 7.04 11.02 4.11
Payable Turn Over In Days 40 days 52 days 33 days 84days
Inventory Turn Over Ratio 9.54 9.29 8.54 7.21

36 | P a g e
Inventory Turn Over In
Days
38 days 39 days 43 days 53 days
Operating cycle 62days 61days 56days 91days
Cash Cycle 22days 9days 23days 58days
Profitability Ratio
Gross Profit Margin 18.6% 21.5% 25.6% 36%
Net Profit Margin 2% 2% 6.4% 6%
Return On Assets 3.4% 3.5% 11.6% 8%
Return On Equity 7.7% 8% 25.9% 21%
Interpretation (Trend Analysis)
Until now our concern has been with introducing the various financial ratios, explaining
their uses in analysis, and comparing the ratios computed for Engro foods with industry average.
It is important to compare the financial ratios for a given company over time. In this way we will
be able to detect any improvement or deterioration in a firm’s financial condition and
performance.
The Trend analysis table shows financial ratios for Engro foods over the 2012-2104 periods along
with their industry average. As can be seen, the current and acid-test ratios have fallen off
somewhat over time but still exceed industry norms.
The decreasing trend in the financial leverage/debt to equity ratio coupled with a present relative
debt level typical of the industry would be viewed favorable by creditors.
The interest coverage ratio of the firm has been falling since 2012. It has been below industry
average for the past 3 years. This indicates that low earnings may be a potential problem for the
firm. A low ratio is a strong indicator that a company may default on its loan payments.
The figures for receivable turnover in days, payable turnover in days and average collection
period have grown but are low when compared to industry average. The higher the turnover the
shorter the time between the typical sale and cash collection and more effectively and earlier the
company will pay its liabilities.
The inventory turnover and cash flow cycle is decreasing gradually over the 3 years and is also
lower than the industry average. Inventory turnover indicates that firm will take less time to turn
their inventory in to account receivables through sales. Flow of cash that begins
with payment for raw materials and ends with receipt of cash on goods sold interpret that shorter

37 | P a g e
the number of days in this cycle, more the amount of available cash, and lesser the need to
borrow.
The profitability in relation to sales are decreasing from 2012-2014 and are lower than the
industry average that means fewer funds are available for operating expenses and taxes.
Profitability in terms of investment is also decreasing drastically but in 2012 it is greater than
industry average that means firm is getting highest returns on investment and through
shareholder’s equity but in 2013-2014 company is facing difficulty in managing its assets to
produce greater amount of net income and had less sales and less equity as well.
“An Analysis Of % Financial Statements Where All Balance
Sheet Items Are Divided By Total Assets And All Income
Statements Items Are Divided By Net Sales Or Revenues.”
Year
Dec 31, 2014
Dec 31, 2013
10. Common Size Analysis

38 | P a g e
Dec 31, 2012
Consolidated Balance Sheet
________Regular_______ __Common Size (%)__
Amounts In
Thousand
Dec 31,
2014
Dec 31,
2013
Dec 31,
2012
2014 2013 2012
Assets
Non-Current Assets
Property, plant and equipment 15,021,519 14,509,608 11,023,246 58.45 59.61 49.65
Biological assets 858,680 716,465 668,455 3.34 2.94 3.01
Intangible assets 112,208 603,719 104,569 0.43 2.48 0.47
Long term advances and
deposits
109,174 93,132 81,862 0.42 0.38 0.36
Deferred employee share
option compensation expense
112,581 168,865 ______ 0.43 0.69 ______
Advance against purchase of
shares of Engro Foods
Netherland B.V.
______ ______ 863,018 ______ ______ 3.88
16,214,162 16,091,789 12,741,150 63.09 66.11 57.38
Current Assets
Stores, spares and loose tools 788,141 739,671 610,640 3.06 3.03 2.75
Stock-in-trade 3,697,787 3,199,390 3,494,605 14.38 13.14 15.74
Trade debts 95,962 245,767 149,074 0.37 1 0.67
Advances, deposits and
prepayments
113,501 186,754 261,790 0.44 0.76 1.17
Other receivables 2,865,607 2,359,162 1,440,167 11.15 9.69 6.48
90,430 136,153 ______ 0.35 0.55 ______
Taxes recoverable 1,637,018 636,588 347,075 6.36 2.61 1.56
Derivative financial ______ ______ 25,787 ______ ______ 0.11

39 | P a g e
instruments
Short term investments ______ 170,000 2,708,750 ______ 0.69 12.20
Cash and bank balances 197,106 575,036 422,008 0.76 2.36 1.90
9,485,552 8,248,521 9,459,896 36.90 33.88 42.61
Total Assets 25,699,714 24,340,310 22,201,046 100 100 100
________Regular_______ __Common Size (%)__
2014
Dec 31,
2013
Dec 31,
2012
2014 2013 2012
Equity
Share capital 7,665,961 7,665,961 7,615,776 29.82 31.49 34.30
Advance against issue of share
capital
______ ______ 1,234 ______ ______ 0.005
Share premium 865,354 865,354 810,280 3.36 3.55 3.64
Employee share option
compensation reserve
399,740 407,133 ______ 1.55 1.67 ______
Hedging reserve (27,736) (9,581) 16,761 0.10 0.03 0.07
Remeasurement of post-
employment benefits - Actuarial
loss
(35,715) (34,839) (22,954) 0.13 0.14 0.10
Other reserve (628,780) (628,780) ______ 2.44 2.58 ______
Exchange revaluation reserve (9,507) 14,727 ______ 0.03 0.06 ______
Unappropriated profit /
(Accumulated loss)
3,348,470 2,480,594 1,610,222 13.02 10.19 7.25
11,577,787 10,760,569 10,031,319 45.05 44.20 45.18
Non-Current Liabilities
Long term finances 5,476,993 7,126,994 6,023,070 21.31 29.28 27.12
Deferred taxation 1,185,717 1,538,583 1,652,520 4.61 6.32 7.44
Deferred income 2,516 9,410 17,390 0.01 0.03 0.07
6,665,226 8,674,987 7,692,980 25.93 35.64 34.65
Current Liabilities
Current portion of
-long term finances 1,605,597 1,032,008 1,685,823 6.24 4.23 7.59
-obligations under finance lease ______ ______ 2,589 ______ ______ 0.01
Trade and other payables 3,222,697 3,405,175 2,394,108 12.53 13.98 10.78

40 | P a g e
Derivative financial instruments 41,397 14,517 ______ 0.16 0.05 ______
-long term finances 194,025 229,312 302,273 0.75 0.94 1.36
-short term finances 61,092 10,337 6,565 0.23 0.04 0.02
Short term finances 2,331,893 213,405 85,389 9.07 0.87 0.38
7,456,701 4,904,754 4,476,747 29.01 20.15 20.16
Total Equity & Liabilities 25,699,714 24,340,310 22,201,046 100 100 100
Interpretation (Balance Sheet)
In common size we express the various components of balance sheet as percentages of
the total assets of the company. The expression of individual financial statement items as
percentages of total helps the analyst spot trends with respect to the relative importance of these
items over time. Common size balance sheets are shown alongside regular statements in common
size analysis table for 2012 through 2014.
We see that over the past 3 year span Biological assets increased, intangible assets slightly
decreased from 0.47% in 2012 to 0.43% in 2014, long term advances increases and property,
plant and equipment had a noticeable increase from 49.65% in 2012 to 58.45% in 2014 as
percentage of total assets.
The fluctuating behavior of total non-current assets can be seen clearly.
Stock in trade and Trade debts also fluctuate over the 3 years span. While “fluctuation” can refer
to an unexpected rise or fall in inventory, most fluctuations in the value of inventory items are
downward. The reasons are many, including theft, damage, obsolescence, government recalls,
defects, spoilage, and adulteration and shifting consumer tastes.
Taxes recoverable increase from 1.56% in 2012 to 6.36% in 2014, receivables increases from
6.4% in 2102 to 11.15% in 2014 which indicate the company is having trouble collecting money
from its customers, stores/ spares and loose tools increases, and the remaining current assets
decreased as percentage of total assets.
On the liability portion of the balance sheet share capital, share premium and hedging decreased,
remeasurement of post-employment benefits slightly increased while accumulated loss increased

41 | P a g e
from 7.24% in 2012 to 13.02% in 2014 as a percentage of total liabilities and shareholder’s
equity.
Long term finance decreased from 27.12% in 2012 to 21.31% in 2014, while deferred taxation
and income remains decreasing gradually.
Accounts payable and short term finance increased while other current liabilities decreased. The
primary reason that an accounts payable increases is because of the purchase of inventory, new
purchases increases accounts payable entries by adding a new liability to the business.
The composition of assets, liabilities, and shareholders’ equity accounts changed from 2012 to
2014.
Notable changes occurred for Property, plant and equipment (49.6% in 2012 versus 58.45% in
2014), receivables (6.4% in 2012 versus 11.15% in 2014), taxes recoverable ( 1.5% in 2012
versus 6.36% in 2014), current assets(42.6% in 2012 versus 36.90% in 2014), share capital
(34.30% in 2012 versus 29.82% in 2014), non-current liabilities (34.65% in 2012 versus 25.93%
in 2014), short term finance (0.38% in 2012 versus 9.07% in 2014), and current liabilities
(20.16% in 2012 versus 29.015 in 2014).

42 | P a g e
Consolidated Profit And Loss Account
_________Regular_________ __Common Size (%)__
Amounts In
Thousands
Dec 31,
2014
Dec 31,
2013
Dec 31,
2012
2014 2013 2012
Net sales 43,422,187 37,929,238 40,168,919 100 100 100
Cost of sales (35,306,950) (29,752,008) (29,848,301) 81.31 78.44 74.30
Gross profit 8,115,237 8,177,230 10,320,618 18.68 21.55 25.69
2014 2013 2012
Current Assets 36.9 33.88 42.61
Non-current Assest 63.09 66.11 57.38
Current Liabilities 29.01 20.15 20.16
Non-current liabilities 25.93 35.64 34.65
Total Equity 45.05 44.2 45.18
0
10
20
30
40
50
60
70
Common SizeAnalysis of BalanceSheet

43 | P a g e
Distribution and
marketing
expenses
(4,744,092) (5,020,269) (4,654,275) 10.92 13.23 11.58
Administrative
expenses
(1,389,722) (975,371) (795,690) 3.20 3.27 1.98
Other operating
expenses
(112,608) (340,473) (429,763) 0.25 0.89 1.06
Other income 304,854 326,911 382,402 0.70 0.86 0.95
Operating profit 2,173,669 2,168,028 4,823,292 5 5.7 12
Other expenses (453,381) (208,456) ______ 1.04 0.54 ______
Finance costs (1,246,888) (785,467) (902,503) 2.87 2.07 2.24
Profit before
taxation
473,400 1,174,105 3,920,789 1.90 3.09 9.76
Taxation 394,476 (303,733) (1,325,616) 0.90 0.80 3.30
Profit for the year 867,876 870,372 2,595,173 1.99 2.29 6.46
Earnings per share
Basic-diluted
1.13 1.14 3.40 ______ ______ ______
Interpretation (Income Statement)
Cost of goods sold increased from 74.30% of net sales in 2012 to 81.31% in 2014, which
resulted in a decrease in gross margin from 25.69% to 18.68%, gross profit margin decreases due
to increase in cost of goods sold. Cost of goods sold can increase due to higher prices of raw
materials as well as higher labor costs, decreasing the gross profit margin temporarily may be
beneficial in the long run. A business may decrease its gross profit margin by lowering the cost
of the goods it sells or by using higher quality, and thus more expensive, materials to make the
goods. Lower prices attract new customers, which may eventually raise profit margins.

44 | P a g e
Administrative expenses increases from 1.98% in 2012 to 3.20% in 2014.Operating expenses
decreases from 1.06% in 2012 to 0.25% in 2014 and other expenses increases from 0.54% in
2013 to 1.04% in 2014.
Operating profit decreases from 12% in 2012 to 5% in 2014. The main reason for a decline in
operating profit is an increase in expenses. Finance cost increases from 2.24% in 2012 to 2.87%
in 2014 and other income slightly decreases from 0.95% in 2012 to 0.70% in 2014.
Profit before taxation decreases from 9.76% in 2012 to 1.90% in 2014. Income taxes decreases
from 3.30% in 2012 to 0.90% in 2014. Net income decreases from 6.46% in 2012 to 1.99% in
2014, if sales are up, but cost of goods sold increases more than total sales increased, net income
would go down.
2014 2013 2012
Gross Margin 18.68 21.55 25.69
Operating Profit 5 5.7 12
Net Income 1.99 2.29 6.46
0
5
10
15
20
25
30
Common SizeAnalysis of Income Statement

45 | P a g e
“An Analysis Of % Financial Statements Where All Balance
Sheet Items Or Income Statement Figures For A Base Year
Equal 100% And Subsequent Financial Statement Items
Are Expressed As % Of Their Values In The Base Year.”
Year
Dec 31, 2014
Dec 31, 2013
Dec 31, 2012
11. Indexed Analysis

46 | P a g e
Consolidated Balance Sheet
_________Regular________ ____Indexed (%)____
Amounts In
Thousand
Dec 31,
2014
Dec 31,
2013
Dec 31,
2012
2014 2013 2012
Assets
Non-Current Assets
Property, plant and equipment 15,021,519 14,509,608 11,023,246 136.27 131.62 100
Biological assets 858,680 716,465 668,455 128.45 107.18 100
Intangible assets 112,208 603,719 104,569 107.30 577.34 100
Long term advances and
deposits
109,174 93,132 81,862 133.36 131.76 100
112,581 168,865 ______ ______ ______ ______
Advance against purchase of
shares of Engro Foods
Netherland B.V.
______ ______ 863,018 ______ ______ 100
16,214,162 16,091,789 12,741,150 127.25 126.29 100
Current Assets
Stores, spares and loose tools 788,141 739,671 610,640 129.06 121.13 100
Stock-in-trade 3,697,787 3,199,390 3,494,605 105.81 91.55 100
Trade debts 95,962 245,767 149,074 64.37 164.86 100
Advances, deposits and
prepayments
113,501 186,754 261,790 43.35 71.33 100
Other receivables 2,865,607 2,359,162 1,440,167 198.97 163.81 100
90,430 136,153 ______ ______ ______ ______
Taxes recoverable 1,637,018 636,588 347,075 471.66 183.41 100
Derivative financial
instruments
______ ______ 25,787 ______ ______ 100

47 | P a g e
Short term investments ______ 170,000 2,708,750 ______ 6.27 100
Cash and bank balances 197,106 575,036 422,008 46.70 136.26 100
9,485,552 8,248,521 9,459,896 100.27 87.19 100
Total Assets 25,699,714 24,340,310 22,201,046 115.75 109.63 100
_________Regular_______ ____Indexed (%)___
2014
Dec 31,
2013
Dec 31,
2012
2014 2013 2012
Equity
Share capital 7,665,961 7,665,961 7,615,776 100.65 100.65 100
Advance against issue of share
capital
______ ______ 1,234 ______ ______ 100
Share premium 865,354 865,354 810,280 106.79 106.79 100
Employee share option
compensation reserve
399,740 407,133 ______ ______ ______ ______
Hedging reserve (27,736) (9,581) 16,761 165.47 57.16 100
Remeasurement of post-
employment benefits - Actuarial
loss
(35,715) (34,839) (22,954) 155.59 151.77 100
Other reserve (628,780) (628,780) ______ ______ ______ ______
Exchange revaluation reserve (9,507) 14,727 ______ ______ ______ ______
Unappropriated profit /
(Accumulated loss)
3,348,470 2,480,594 1,610,222 207.95 154.05 100
11,577,787 10,760,569 10,031,319 115.41 107.26 100
Non-Current Liabilities 100
Long term finances 5,476,993 7,126,994 6,023,070 90.93 118.32 100
Deferred taxation 1,185,717 1,538,583 1,652,520 71.75 93.10 100
Deferred income 2,516 9,410 17,390 14.46 54.11 100
6,665,226 8,674,987 7,692,980 86.64 112.76 100
Current Liabilities
Current portion of
-long term finances 1,605,597 1,032,008 1,685,823 95.24 61.21 100
-obligations under finance lease ______ ______ 2,589 ______ ______ 100
Trade and other payables 3,222,697 3,405,175 2,394,108 134.60 142.23 100
Derivative financial instruments 41,397 14,517 ______ ______ ______ ______

48 | P a g e
-long term finances 194,025 229,312 302,273 64.18 75.86 100
-short term finances 61,092 10,337 6,565 930.57 157.45 100
Short term finances 2,331,893 213,405 85,389 2730.90 249.92 100
7,456,701 4,904,754 4,476,747 166.56 109.56 100
Total Equity & Liabilities 25,699,714 24,340,310 22,201,046 115.75 109.63 100
Interpretation (Balance Sheet)
The composition of assets, liabilities, and shareholders’ equity accounts changed from
2012 to 2014.
Notable changes occurred for Intangible assets as they increased by 477.34% (577.34% - 100%)
in 2013 and 7.3% ( 107.30% - 100%) in 2014over the base year period, while other non-current
assets continue to increase gradually.
Stock in trade decreases in 2013 by 8.45% (91.55% - 100) while started to increase in 2014 by
5.81% (105.81% - 100%).
Trade debts increases in 2013 by 64.86% over the base year period while decreases in 2014 by
35.63%.
Advance deposits decreases while there is a sharp increment in the amount of taxes recoverable,
this latter change was not apparent in the common size analysis.
To a lesser extent there was a noticeable decrease of 53.3% in the amount of cash in 2014 on the
other hand it was increasing in 2013 by 83.41%. Other current assets remain increasing.
When we compare the accounts receivables figures with those for net sales the increases seems
to be more prominent, we would probably want to follow up on this information, nonetheless, by
checking the firm’s receivable turnover to see how well the firm is managing these growing
assets.
As compared to current assets, non-current assets increases significantly through the 3 years
analysis.
On the liability portion of the balance sheet we note a large decrease in non-current liabilities. As
they were increasing in 2013 by 12.76% but decreases in 2014 by13.36%.

49 | P a g e
A change in accounts payable and short term finance is prominent as they are increasing
significantly while other current liabilities remains decreasing over the base year period.
In the equity side share capital and share premium index analysis are same for both year 2013-
2014, they increases at the same rate over the base year period.
While there is a noticeable increment in the amount of hedging reserves of 65.47% in 2014.
Other equity items remain increasing significantly.
2014 2013 2012
Current Assets 100.27 87.19 100
Non-current Assest 127.25 126.29 100
Current Liabilities 166.56 109.56 100
Non-current liabilities 86.64 112.76 100
Total Equity 115.41 107.26 100
0
20
40
60
80
100
120
140
160
180
Index Analysis of Balance Sheet

50 | P a g e
Consolidated Profit And Loss Account
__________Regular__________ ___Indexed (%)____
Amounts In
Thousands
Dec 31,
2014
Dec 31,
2013
Dec 31,
2012
2014 2013 2012
Net sales 43,422,187 37,929,238 40,168,919 108.09 94.42 100
Cost of sales (35,306,950) (29,752,008) (29,848,301) 118.28 99.67 100
Gross profit 8,115,237 8,177,230 10,320,618 78.63 79.23 100
Distribution and
marketing
expenses
(4,744,092) (5,020,269) (4,654,275) 101.92 107.86 100
Administrative
expenses
(1,389,722) (975,371) (795,690) 174.65 122.58 100
Other operating
expenses
(112,608) (340,473) (429,763) 26.20 79.22 100
Other income 304,854 326,911 382,402 79.72 85.48 100
Operating profit 2,173,669 2,168,028 4,823,292 45.06 44.94 100
Other expenses (453,381) (208,456) ______ ______ ______ ______
Finance costs (1,246,888) (785,467) (902,503) 138.15 87.03 100

51 | P a g e
Profit before
taxation
473,400 1,174,105 3,920,789 12.07 29.94 100
Taxation 394,476 (303,733) (1,325,616) 29.75 22.91 100
Profit for the year 867,876 870,372 2,595,173 33.44 33.53 100
Interpretation (Income Statement)
Indexed net sales figure for 2014 is 108.09%, which indicates a 8.09% (108.09 - 100)
increase in sales over the base period two years ago. Cost of goods sold increases by 18.28% in
2014 due to which Gross profit remain decreasing.
Noticeable increment in the amount of administration expense of 74.65% in 2014 can be seen
clearly while other expenses remain decreasing.
The sharp increment of 38.15% in 2014 in the amount of finance cost is more easily to
distinguish –especially when we compare it with the smaller percentage improvement in sales.
Profit before taxation decreases form 70.06% in 2013 (29.94 – 10 ) to 87.93% (12.07 – 100) in
2014 due to high finance cost.
Amount of taxation decreases by 77.09% in 2013 (22.91 – 100) and 70.25% in 2014 (29.75 –
100) over the base period.

52 | P a g e
Net profit and operating profit remains almost same for both years 2013-2014.
2014 2013 2012
Net Sales 108.09 94.42 100
Gross Profit 78.63 79.23 100
Operating Profit 45.06 44.94 100
Net Income 33.44 33.53 100
0
20
40
60
80
100
120
Index Analysis of Income Statement

Engro foods

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