Millat tractor financial analysis

2. FINANCIAL ANALYSIS
ANALYSIS OF FINANCIAL STATEMENT OF MILLAT TRACTORS LIMITED

4. PRESENTERS
Muhammad Asad
E18MBA208
Hafiz Qamar
E18MBA207

5. INTRODUCTION
 Millat Tractors was initially started as Rana Tractors and Equipment Limited to import and market
Massey Ferguson tractors. In 1965, facilities were created in Karachi to assemble tractors from semi-
knocked-down kits. In 1967, operations were shifted from Karachi to Lahore.
• In 1972, under the Zulfiqar Ali Bhutto, the company was nationalized and started assembling and
marketing tractors on behalf of the Pakistan Tractor Corporation (PTC).
• In 1992, the company was privatized, and Millat Tractors plant started its in-house production. The
establishment of this modern plant not only increased production capacity to 16,000 tractors per
year on a single-shift basis.

6. BOARD OF
DIRECTORS
Syed Muhammad Irfan
Aqueel
Chief Executive officer
Sikandar Mustafa Khan
Chairman
Sohail Ahmad Nisar
Chief Financial Officer
Muhammad Ayaz
Khurshid
General Manager
Information Technology
Laeeq Uddin Ansari
Non-Executive Director
Latif Khalid Hashmi
Non-Executive Director
Sohail Bashir Rana
Non-Executive Director
Mian Muhammad
Saleem
Non-Executive Director
Saad Iqbal
Independent Director
Ahmad Aqeel
Non-Executive Director

7. VISION & MISSION
• Vision Statement
Millat to be a global group of companies, recognized for a range of quality products with innovative
design capabilities.
• Mission Statement
Millat to be the market leader in agricultural tractors and machinery, building Company’s image
through innovation and competitiveness, grow by expanding market and investing into group
companies, ensuring satisfaction to customers, stakeholders and fulfilling our corporate social
responsibility.

8. PRODUCTS
MILLAT TRACTORS
LIMITED IS PRINCIPALLY
ENGAGED IN ASSEMBLY
AND MANUFACTURE OF
AGRICULTURE TRACTORS,
IMPLEMENTS AND
AGRICULTURE
EQUIPMENT’S:
AGRICULTURAL TRACTOR
S.
DIESEL ENGINES. DIESEL GENERATING SETS
AND PRIME MOVERS.
FORKLIFT TRUCKS,
UNDER LICENSE FROM
ANHUI HELI FORKLIFT
TRUCKS CHINA.
A WIDE RANGE OF
AGRICULTURAL
IMPLEMENTS.

9. TRACTORS CATEGORIES
• MF-240
• MF-385
• MF-455
• MF-260
• MF-385
• MF-375
• MF-360
• MF-250

10. AGRICULTURE INSTRUMENTS
• Mould Board plough
• Chisel Plough
• Disc Plough
• Tine Tiller
• Disc Harrow
• Rigger
• Lawn Mover
• Post Hole digger
• Jib crane

11. FINANCIAL SOURCES
Principal Bankers
• Habib Bank LTD.
• Muslim Commercial Bank.
• United Bank Limited.
• Faisal Bank Limited.
• Meezan Bank Limited.

15. CURRENT RATIOS
Current Ratio = Current Assets
Current Liabilities
• INTERPRETATION:
The standard norm for current ratio is 2:1. As it shows in 2018 the current ratio is 1.37. After that the current ratio
has been increased to 1.39 in 2019. This shows the ability of the company to cover its current liabilities with
current assets. So the ratio was satisfactory. It shows the good signs for the company.
Year
Current Asset/Current
Liabilities
Current
Ratio
2018 14875959/10822231 1.37:1
2019 7964021/5728286 1.39:1
1.37
1.39
1.36 1.37 1.38 1.39 1.4
2018
2019
2018 2019
Ratio 1.37 1.39
RATIO

16. QUICK RATIOS
• Quick Ratio = Cash + Marketable Securities + Receivables
Current Liabilities
• INTERPRETATION:
The standard form of a quick ratio is 1:1. It shows the ability of a company to pay its current liabilities
through its most liquid assets. In 2019 it decreases to 0.81 as compare to 2018. Which shows that the
company cannot pay its debts without its inventory. However the ratio is less than the standard norms
so it is not satisfactory.
Year Liquid asset/Current Liabilities Quick Ratios
2018 10718897/10822231 0.98:1
2019 4815432/5728286 0.81:1 0
0.5
1
1.5
2
2.5
3
2018 2019
QUICK RATIO
Quick Ratio

17. WORKING CAPITAL RATIO
Working Capital = Current Asset – Current Liabilities
• INTERPRETATION:
The decrease in working capital in 2019. Which shows that in both years the company’s current
liabilities exceed. Which is not good sign for the company.
Year Current Asset - Current Liabilities
Working Capital
Ratio
2018 14875959-10822231 4053728
2019 7964021-5728286 2235735 0
1000000
2000000
3000000
4000000
5000000
2018 2019
Working Capital
Working Capital

18. LIQUIDITY ANALYSIS
1.37
0.98
1.39
0.81
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
Current Ratio Quick Ratio
Liquidity Analysis
2018 2019

20. GROSS PROFIT RATIO
Year Gross Profit/Net Sales*100 Gross Profit
2018 8434775/38517147*100 21.90%
2019 5946367/31144057*100 19.09%
Gross Profit Ratio = Gross Profit / Net Sales * 100%
INTERPRETATION:
Higher the ratio, higher will be the company’s ability to produce goods and services at low cost.
With high sales the above figures show a decrease in the ratio in 2019. We can interpret that the
company has increased their cost of goods but their sales are not increasing.
17.00%
18.00%
19.00%
20.00%
21.00%
22.00%
23.00%
2018 2019
G/P RATIO
G/P Ratio

21. OPERATING PROFIT RATIO
Year Operating Profit/Net Sales*100 Operating profit Ratio
2018 7782358/38517147*100 20.20%
2019 5124905/31144057*100 16.46%
Operating profit ratio = (Operating profit / Net sales) × 100
INTERPRETATION:
Higher is better. As the operating profit ratio of Millat has decreased in 2019. Which shows that the
company have increase their operating expenses the Company is Downfall in 2019. This is not good
Sign for the company.
0.00%
10.00%
20.00%
30.00%
2018 2019
OP/Ratio
OP/Ratio

22. NET PROFIT RATIO
Year Net profit/Net Sales*100 Net Profit Ratio
2018 5334362/38517147*100 13.85%
2019 3638045/31144057*100 11.68%
Net Profit Ratio = Net Profit After Tax / Net Sales * 100%
INTERPRETATION:
Higher the ratio, higher will the firm’s ability to pay its taxes. These figures show that the
company has increase their expenses as the net profit ratio has decreased in 2019.
NP Ratio
10.00%
15.00%
2018 2019
NP Ratio
NP Ratio

23. PROFITABILITY ANALYSIS
21.90%
20.20%
13.85%
19.09%
16.46%
11.68%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Gross Profit Operating Profit Net Profit
Profitability analysis
2018 2019

25. DEBT EQUITY RATIOS
Year Long Term Debt/Share Holder Fund Debt Equity Ratio
2018 12691/10989186 0.0012:1 Times
2019 12731/8471212 0.0015:1 Times
Debt Equity Ratio = Long Term Debt / Share Holder Fund
INTERPRETATION:
1:1 is the bench mark. Ratio has increase in 2019 and become 00015:1 which show that the debt
increase due to economic condition and interest also increase. Share holder fund decrease due to the
utilization of the Reserves to pay the debt.
0
0.0005
0.001
0.0015
0.002
2018 2019
Debt/Equity Ratio
Debt/Equity Ratio

26. DEBT SERVICE INTEREST COVERAGE RATIOS
Year NPBI&T/Fixed Cost Debt Service Ratio
2018 7782358/2490 3125.44 Times
2019 5124905/42044 122 times
Debt Service Intrest coverage Ratio = Net Profit Before Intrest & Tax / Finance Cost
INTERPRETATION:
1:1 is the bench mark. As the debt service interest coverage ratio has been decreased in 2019.
Which shows good solvency position because higher is better.
0
1000
2000
3000
2018 2019
Debt Service Ratio
Debt Service Ratio

27. SOLVENCY ANALYSIS
0.0012
149.164
0.0015
122
0
20
40
60
80
100
120
140
160
Debt Equity Debt Service Intrest Coverage Ratio
Chart Title
2018 2019

29. INVENTORY TURN OVER
Year CGS/Average Stock Inventory turn over
2018 30082372/3901822 7.36 Times
2019 25197690/3652826 6.10 Times
Inventory Turn Over = CGS / Average Stock
INTERPRETATION:
Higher is better. As inventory turnover ratio deteriorated from 2018 to 2019. Which shows
that the ability to sell inventory has decreased.
0
5
10
2018 2019
Inventory Turnover
Ratio
Inventory Turnover Ratio

30. INVENTORY COVERAGE PERIOD
Year No of days/Inventory turn over Inventory coverage period
2018 365/7.36 49.5 Days
2019 365/6.10 60 Days
Inventory Coverage Period = No of days / Inventory Turn Over
INTERPRETATION:
Lower is better. It shows that in 2018 the company dispose off its inventory in 49.5 days. But in 2019 it
goes up to 60 days it means that the company’s efficiency has decreased.
0
20
40
60
2018 2019
ICP
ICP

31. DEBTOR TURN OVER
Year Net Credit sale/Average debtor Debtor turn over
2018 38517147/124203 310.12 Times
2019 31144057/56107.5 555.08 Times
Debtor Turn Over = Net Credit Sale / Average Debtor
INTERPRETATION:
Higher is better. It measures company's efficiency in collecting its sales on credit and collection policies.
As the ratio highly increased. It indicate that the company needs to improve its business.
0
200
400
600
2018 2019
Debtor Turnover
Debtor Turnover

32. DEBTOR COLLECTION PERIOD
Year No Of days/Debtor turn over Debtor collection Period
2018 365/310.12 1.17 Day
2019 365/555.08 0.65 Day
Debtor Collection Period = No of Days / Debtor Turn Over
INTERPRETATION:
Lower is better. It shows the ability of the company to collect its receivable in a specific time as the
data shows that in 2018. They collects receivables in 1.17 days while it goes up to 0.65 days in 2019.
Which means that the company is now recovering fast as compare to previous year.
Debtor Collection Period
0
1
2018 2019
Debtor Collection Period

33. ASSET TURN OVER
Year CGS/Total Asset Asset turn Over
2018 30082372/16571365 1.8 Times
2019 25197690/10574184 2.38 Times
Asset Turn Over = COST OF GOOD SOLD / Total Asset
INTERPRETATION:
Higher is better. Assets turnover ratio of MILLAT in 2019 has been increased. As this ratio is
supposed to be high so we can interpret that the company generated more revenue of assets
investment in 2010 as compared to 2018.
0 0.5 1 1.5 2 2.5
2018
2019
ASSET TURNOVER
Asset Turnover

35. DIVIDEND COVER
Year Profit After Tax/Ordinary Dividend Dividend Cover
2018 5334362/5252986 1 Times
2019 3638045/4611967 0.78 Times
Dividend Cover = Profit after Tax / Ordinary Dividend
INTERPRETATION:
Dividend cover measures a company's ability to pay dividends to stockholders. Specifically, it
calculates how many times over the company's net profit after tax could have paid for dividends to its
common stockholders.
0
0.5
1
2018 2019
Dividend Cover Ratio
Data

36. EARNING PER SHARE
Year Profit after Tax/No Share Issued Earning Per Share
2018 5334362000/44292600 Rs 120.43
2019 3638045000/44292600 Rs 82.14
Earning Per Share = Profit After tax / No share Issued
INTERPRETATION:
Earning per share shows how much money a company makes from shares. So in 2018 its value was
Rs 120.43 but decline in the in the value of share it decreased to Rs 82.14 in 2019. Which is not
showing a good sign for the company.
0
50
100
150
2018 2019
EPS
EPS

37. DIVIDEND PER SHARE
Year Ordinary Divided/No of shares issued Dividend per share
2018 5252986000/44292600 Rs 119
2019 4611967000/44292600 Rs 104
Dividend Per Share = ordinary Dividend / No Share Issued
INTERPRETATION:
In 2018 the company pay Rs 119 dividend on each share to shareholder but in 2019 it pay to Rs 104
Dividend On each share its shareholder because in 2019 its value decrease to Rs 104 due to major
decline in the business.
2018 2019
DPS 119 104
0
50
100
150
DPS
DPS Linear (DPS)

38. EARNING YIELD
Year Earning per share/Market price share Earning Yield
2018 120.43/1188 10%
2019 82.14/862 9.5%
Earning Yield = Earning Per share / Market Price Per Share
INTERPRETATION:
The higher the ratio the greater the benefits earned. So in 2018 earning yield is 10% which is
decreased in 2019 with the value of 9.5%
9% 10% 11%
2018
2019
Earning Yield
Earning Yield

39. PAY-OUT RATIO
Year Total Dividend/Profit after tax*100 Pay-out ratio
2018 5252986/5334362*100 98.4%
2019 4611967/3638045*100 126.7%
Pay-out ratio = Total Dividend / Profit after tax
INTERPRETATION:
Lower payout ratio indicate that a company is retaining earning to full growth is higher. Payout
ratio indicate to sharing more of earning with stockholder.
0.00%
50.00%
100.00%
150.00%
Category 1 Category 2
Series 1
Series 1

40. BOOK VALUE PER SHARE
Year Equity/No of ordinary share issued Book Value Per Share
2018 5654824000/44292600 Rs 127.6
2019 4833167000/44292600 Rs 109
Book Value Per share = Equity / No of ordinary share Issued
INTERPRETATION:
Value under 1.0 is considered a good sign for the company in 2018 Book Value is Rs 127.6 But in
2019 its value decrease to Rs 109. Both year consider the good sighn of the company.
95
100
105
110
115
120
125
130
2018 2019
Book Value Per Share
Book Value Per Share

41. CONCLUSION
 Millat Tractors is facing decline in 2019 as compare to 2018.
 Its operating and net profit is also decreasing therefore the company
is still in a condition to pay dividend.
 EPS has decreased because the overall efficiency has been decreased.
 They are not able to pay short term debts but in a good condition to
take debts as their solvency position is strong.
 Millat Tractors is in a declining phase they should take immediate
steps in order to improve its market position other wise they will not
be able to achieve its aim.