Financial analysisi

1. Biafo Industries Limited
Financial Analysis Valuation
Group Member:
Hira, Tufail, Bilal, Masood

2. Introduction
By Tufail

3. Introduction
•Established in 1988
•Public limited company
•Authorized licensee of Explosive Technology International (ETI)
•Utilizes DuPont Technology for production
•Located in the Hattar Industrial Estate since 1994
•Focuses on industrial standard Commercial Explosives
•Demonstrates commitment to technological advancements
•Upholds high-quality standards
•Strategic partnership

4. Vision statement
• To become a premier global manufacturer of commercial and industrial
explosives, delivering high-quality products globally, diversifying into related
industrial chemical products, and establishing a strong international market
presence.
Mission statement
Elevate market share by exceeding customer expectations domestically and
internationally, sustain recent market share growth, enhance profitability, and ensure
improved financial performance through ethical business practices
Products
• Water Gel Explosives
• Powder Explosives:
• Blasting Accessories

5. Qualitative Analysis
By Hira

6. Qualitative analysis
• Management
• Competitive positioning
• Product Quality
• Safety Focus
• Environmental Responsibility
• Customer Satisfaction
• Distribution Network
• Brand Reputation

7. SWOT analysis
• Strengths:
• Strong market position
• Experienced management team
• Strong financial performance
• Weaknesses:
• Limited geographic reach
• Reliance on a single product
• Exposure to regulatory risks

8. • Opportunities:
• Growth in the mining industry
• Expansion into new markets
• Diversification into new products
• Threats:
• Competition from international companies
• Economic downturn

9. Risk factors:
• Product Liability
• Operational Risks
• Financial Risks
• Regulatory Risks
• Competitive Risks
• Geopolitical Risks

10. Ratio Analysis & Common
Sizing
By Masood

11. Vertical Analysis : BS
Vertical Analysis
2017 2018 2019 2020 2021 2022 2023
Balance Sheet
Assets (PKR Millions)
Cash & Short Term Investment 32% 30% 23% 14% 13% 11% 8%
Total Receivables 15% 22% 13% 17% 13% 13% 17%
Total Inventory 10% 12% 15% 17% 21% 15% 17%
Prepaid Expenses 3% 1% 2% 4% 5% 6% 2%
Total Current Assets 60% 65% 53% 52% 52% 44% 43%
Property Plant Equipment-Net 38% 33% 46% 47% 47% 54% 55%
Long Term Investments 2% 2% 1% 1% 1% 2% 2%
Other Long Term Assets, Total 0% 0% 0% 0% 0% 0% 0%
Total Assets 100% 100% 100% 100% 100% 100% 100%
Liabilities (PKR Millions)
Payable/Accrued 12% 10% 8% 8% 10% 10% 8%
Accrued Expenses 0% 0%
Notes Payable/Short Term Debt 21% 26% 26% 20% 20% 15% 9%
Current Port. of LT Debt/Capital Leases 1% 1% 2% 2%
Other Current liabilities, Total 1% 2% 2% 2% 1% 3%
Total Current Liabilities 33% 38% 36% 31% 33% 28% 22%
Total Long Term Debt
Deferred Income Tax 2% 2% 2% 2% 1% 3% 3%
Other Liabilities, Total 0% 0% 0% 0% 0% 0% 0%
Total Liabilities 36% 40% 38% 34% 38% 36% 28%
Shareholders Equity (PKR Millions)
Common Stock 15% 14% 12% 15% 15% 13% 11%
Retained Earnings (Accumulated Deficit) 30% 29% 19% 19% 18% 15% 23%
Unrealized Gain (Loss) 19% 17% 31% 31% 28% 36% 37%
Total Equity 64% 60% 62% 66% 62% 64% 72%
Total Liabilities & Shareholders' Equity 100% 100% 100% 100% 100% 100% 100%

12. Horizontal Analysis : BS
Horizontal Analysis
2017 2018 2019 2020 2021 2022 2023
Balance Sheet
Assets (PKR Millions)
Cash & Short Term Investment 46% 53% 70% -1% -1% 24% 0%
Total Receivables 14% 93% 55% 101% 80% 148% 269%
Total Inventory 4% 31% 134% 171% 261% 284% 396%
Prepaid Expenses 261% 96% 314% 803% 1101% 1812% 593%
Total Current Assets 31% 60% 83% 79% 97% 145% 172%
Property Plant Equipment-Net 109% 106% 307% 311% 357% 673% 770%
Long Term Investments
Other Long Term Assets, Total -14% -14% -14% -14% -14% -14% -14%
Total Assets 56% 77% 149% 147% 173% 301% 348%
Liabilities (PKR Millions)
Payable/Accrued 17% 15% 26% 31% 69% 141% 121%
Accrued Expenses 89% 104% -100% -100%
Notes Payable/Short Term Debt 106% 186% 306% 213% 244% 275% 156%
Current Port. of LT Debt/Capital Leases
Other Current liabilities, Total 179% 303% 320% 356% 398% 1257%
Total Current Liabilities 58% 103% 168% 130% 169% 238% 191%
Total Long Term Debt
Deferred Income Tax -4% -19% 57% 9% 12% 188% 304%
Other Liabilities, Total -64% -59% -48% -50% -93% 17% 62%
Total Liabilities 48% 87% 151% 125% 174% 282% 234%
Shareholders Equity (PKR Millions)
Common Stock 10% 10% 32% 74% 92% 132% 132%
Retained Earnings (Accumulated Deficit) 41% 58% 43% 41% 53% 82% 215%
Unrealized Gain (Loss) 310% 309% 976% 970% 963% 1909% 2203%
Total Equity 61% 70% 148% 161% 173% 313% 418%
Total Liabilities & Shareholders' Equity 56% 77% 149% 147% 173% 301% 348%

13. Horizontal Analysis : IS
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Income Statement In Percentages (%)
Sales -2% 9% 13% -7% 32% 10% 23% 15% 30% 111%
Cost of Sales -8% -6% -7% -22% 2% -3% 24% 10% 31% 85%
Gross Profit 6% 36% 48% 22% 85% 33% 23% 23% 27% 159%
Operating Expenses
Selling & Admin 1% 25% 75% 73% 112% 121% 206% 147% 198% 344%
Depreciation 0%
Interest Expense/(Income)-Operating 0% 89% 77% 103% -280% -122% -93% -94% -94% -94%
Unusual Expense/(Income)
Other Operating Expense 0% 60% 22% 31% -83% 69% -75% -47% -53% -42%
Total Operation Expense 1% 24% 94% 105% 123% 105% 259% 187% 247% 411%
Operating Income 5% 38% 41% 9% 80% 22% -12% -1% -6% 121%
Non Operating-Interest (Expense)/Income
Other Non Operating (Expense)/Income -1% 44% 46% 6% 90% -3% -3% -3% 23% 161%
Net Income Before Tax 5% 37% 40% 10% 79% 24% -18% -11% -5% 126%
Provision For Taxes 2% 37% 44% 2% 54% 18% -31% -12% 23% 174%
Net Income After Tax 3% 37% 39% 12% 86% 26% -14% -11% -13% 112%

14. Vertical Analysis : IS
Common Size Statement
Sales 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Cost of Sales 64% 57% 56% 53% 53% 50% 57% 64% 62% 65% 56%
Gross Profit 36% 43% 44% 47% 47% 50% 43% 36% 38% 35% 44%
Operating Expenses 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Selling & Admin 5% 7% 6% 8% 10% 9% 11% 14% 12% 13% 12%
Depreciation 0% 0% 0% 0% 1% 1% 0% 0% 0% 0% 0%
Interest Expense/(Income)-Operating 1% 1% 1% 1% 2% -1% 0% 0% 0% 0% 0%
Unusual Expense/(Income) 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Other Operating Expense -2% -2% -2% -2% -2% 0% -3% 0% -1% -1% 0%
Total Operation Expense 5% 6% 5% 8% 10% 8% 9% 14% 12% 13% 11%
Operating Income 31% 37% 39% 39% 36% 42% 34% 22% 27% 22% 32%
Non Operating-Interest (Expense)/Income 0% 0% 0% 0% 0% 0% 0% -1% -3% 1% 1%
Other Non Operating (Expense)/Income -2% -3% -3% -3% -2% -3% -2% -2% -2% -2% -3%
Net Income Before Tax 29% 34% 36% 36% 34% 39% 33% 19% 22% 21% 31%
Provision For Taxes 7% 9% 8% 8% 7% 8% 7% 4% 5% 6% 9%
Net Income After Tax 22% 25% 28% 28% 27% 32% 26% 15% 17% 15% 22%

15. Ratio Analysis
2017 2018 2019 2020 2021 2022
GROWTH RATIOS
Sales Growth -17% 41% -17% 13% -7% 13%
Asset Growth -3% 13% 41% -1% 11% 47%
PROFITABILITY RATIOS
Gross Profit Margin 47% 50% 43% 36% 38% 35%
Return on Asset (ROA) 30% 47% 25% 15% 17% 12%
Return on Equity (ROE) 35% 57% 30% 17% 17% 13%
Operating Margin 36% 42% 34% 22% 27% 22%
Earnings per share (EPS) $ 6.91 $ 11.48 $ 7.76 $ 5.30 $ 5.48 $ 5.34
Dividend Per Share (DPS) 6.8 9.96 7.11 2.90 3.31 4.12
Price earnings ratio (P-E) $ 19.10 $ 11.49 $ 17.02 $ 24.90 $ 24.09 $ 24.72
Dividend Payout 98% 87% 92% 55% 60% 77%
Dividend Yield 5% 8% 5% 2% 3% 3%
ACTIVITY RATIOS
Working Capital 377.2 429.3 382 466.2 469.8 570.5
Recievable Turnover 5.424372598 5.951735 4.37696 4.806422 4.169875 4.209185
Fixed Asset Turnover 2.106409131 2.978753 1.716617 1.463923 1.282927 1.021244
Asset Turnover 0.828882363 1.113792 0.726373 0.701275 0.621055 0.543001
Inventory Turnover 7.370814132 10.13437 5.456164 4.441769 3.293749 3.166477
Average days inventory in stock 49.51963154 36.01604 66.89681 82.17446 110.816 115.2701
Working capital turnover 6.360551432 4.189461 3.474917 3.741099 3.147009 3.20696
Average receivables collection day 67.28888796 61.32665 83.39121 75.94006 87.53259 86.71512
LIQUIDITY RATIOS
Current Ratio 1.790609935 1.697255 1.470501 1.668675 1.577363 1.557565
Quick Ratio 1.48145043 1.395322 1.063062 1.118474 0.949736 1.026974
Cash Ratio 0.959756864 0.781549 0.655499 0.445927 0.383802 0.379887
SOLVENCY RATIOS
Debt to total Asset Ratio 33% 38% 36% 31% 33% 28%
Debt to total equity Ratio 56% 67% 62% 52% 61% 56%
Financial leverage 1.574809576 1.616541 1.638743 1.569456 1.569405 1.58326
CFO Ratio 62% 61% 33% 4% 24% 13%
CFO to Debt Ratio 40% 46% 29% 13% 18% 11%

16. Valuation
By Muhammad Bilal