Engro Foods Limited was officially launched in 2004 as a subsidiary of Engro. It has established dairy processing units in Sukkur and Sahiwal, Pakistan along with an ice cream production facility in Sahiwal. The main plant located in Sukkur sits on 23 acres of land and has a raw milk reception capacity of 300,000 liters per day. The plant was established at a cost of Rs. 1 billion and provides direct employment to 750 people.

2. Engro Foods Limited was
officially launched as a fully
owned subsidiary of Engro
in 2004. Using dairy as a
stepping stone to enter into
the food business, the
Company has established its
processing units in Sukkur
and Sahiwal, along with an
ice cream production facility
in Sahiwal.
HISTORY…..

3. The main plant that is located at
Sukhur on 23 acre of land, has the raw
milk reception capability 300000 liters
per day.
The plant has been established at a cost
of Rs. 1 billion which provides direct
employment to 750 peoples.

5. Hussain
Dawood
M.Aliuddin
Ansari
Sarfraz
Ahmed
Khawaja
Iqbal
Ruhail
Muhammad
Shabbir
Hashmi

6. Best Communication Award (for Tarang Sohni
Mahiwal Campaign) In 2011 (Karachi)
Best Launch of 2007/2008 Award (for Tarang)
In 2008
Brand that Created the Biggest Buzz Award for
Olpers In 2008
Best Commercial Consumer Award for Olpers:
Pakistan Media Awards, 2010
Tarang got award in 2011 for breakfast
category.
AWARDS

7. Leadership
Innovation
International focus
Open communication
Individual growth and development
Safety ,Health and Environment
Core values……

9. Ratio Analysis is a form of
Financial Statement Analysis
that is used to obtain a quick
indication of a firm's financial
performance. In addition,
ratios can be used in a form of
trend analysis to identify areas
where performance has
improved or has to improve.

10. Liquidity Ratio
Activity Ratio
Profitability Ratio
Solvency Ratio
Return on investment

11. Liquidity ratios are the ratios meant for testing short_term
financial position of a business.
CURRENT RATIO
LIQUID/ACID TEST/QUICK RATIO
ABSOLUTE LIQUID RATIO

12. Current ratio is a
financial ratio that
measures whether or
not a firm has enough
resources to pay its
debts over the next 12
months. It compares
the firm’s current
assets to its current
liabilities.
Current
Assets/Current
Liabilities
CUREENT RATIO

13. FORMULA Current Assets/Current
Liabilities
YEAR 2011 2012
Calculation
Result
=9512702/4441432
=2.14
=6369139/3479693
=1.83

14. Liquid ratio is also term as Acid test or Quick ratio.
It is the ratio of Liquid assets to Current Liabilities.
It expresses a company’s ability to repay short term
creditors out of its liquid assets.
Liquid assets/Current
liabilities
Liquid Ratio

15. FORMULA
(Current Assets – Stock
– Prepaid) / Current
Liabilities
YEAR 2011 2012
Calculation
Result
=3465230/3479693 =5756307/4441432
=0.9 =1.2

16. Absolute liquid ratio
In addition to computing current and liquid ratio, some analysts
also compute absolute liquid ratio to test the liquidity of the
business.

17. 2011 2012
=350728/3479693 =422008/4441432
=0.10 =0.09
FORMULA (Cash + Bank + Marketable
securities) / Current Liabilities
YEAR
Calculation
Result

18. ACTIVITY
RATIOS….

19. Inventory Turnover Ratio.
Inventory Conversion Period.
Receivables Turnover Ratio.
Receivables Conversion Period.
Payables Turnover Ratio.
Payables Conversion Period.
Working Capital Turnover Ratio.
Fixed Assets Turnover Ratio….

20. “This ratio measures the velocity with which average stock
is sold in market…….”
Formula...
CGS / Cost Of
Average Stock
Cost Of Average
Stock=(opening
Stock+closing Stock)/2

21. Calculation
Result:-
2011 2012
“CGS / Cost Of
Average Stock”
“CGS / Cost Of Average
Stock”
Cost of Average Stock=
(2089221+2637816)/2
Cost of Average Stock=
(2637816+3494605)/2
=23230445/2363519 =29848301/3066211
=9.8 Times….. =9.7 Times……
Formula:-

22. Inventory Conversion
Period…..
“It means that on an average how
many days were taken to dispose
off average inventory…..”
Formula
“365 /
Inventory
Turnover
Ratio”

23. 2011 2012
Formula:- 365 / Inventory
Turnover Ratio
365 / Inventory
Turnover Ratio
Calculation: = 365 / 9.8 = 365 / 9.7
Result:- = 37 Days = 37 Days

24. Receivables
Turnover Ratio…..
“This ratio
measures that how
many times
average
receivables have
been received
during a period of
one year…”
• Formula…
• Net Credit Sales /
Average Receivables
• Average Receivables
= (Opening Debtors
& B/R + Closing
Debtors & B/R)/2

25. Receivables Turnover Ratio…..
2011 2012
Formula... “Net Credit Sales /
Average Receivables”
“Net Credit Sales /
Average
Receivables”
Calculation: Average Receivables
= {(51879+720735)
+ (87121+1160126)}/2
Average Receivables
= {(87121 + 1160126)
+
(149074+1440167)}/2
// = 29859226/1009931 = 40168919 / 1418244
Result = 29.5 Times… = 28.3 Times…

26. “It means that on an average
how many days were taken to
receive average receivables…..”
Formula
Days In
Year /
Receivables
Turnover
Ratio
365 /
Receivables
Turnover
Ratio

27. 2011 2012
Formula 365 /
Receivables
Turnover Ratio
365 /
Receivables
Turnover Ratio
Calculation = 365 / 29.5 = 365 / 28.3
Result = 12
Days……
= 13
Days…..

28. “This ratio measures that how many times
average payables are being paid during a
period of one year…”
Formula…….
Net Credit
Purchases /
Average
Payables
CGS
Opening
Stock+Purchases
-Closing Stock
Avg Payables
(Opening Creditors
& B/P + Closing
Creditors & B/P) /
2

29. Payables Turnover Ratio :
Year 2011 2012
Formula… Net Credit Purchases
/ Average Payables
Net Credit
Purchases / Average
Payables
Calculation: Avg Payables =
(2040575 + 2343506) / 2
Avg Payables =
(2343506 + 2358793) /
2
// = 23779040 / 2192041 = 30705090 / 23511495
Result….. 10.8 Times 13.05 Times

30. “It means that on an average how many days
were taken to pay average payables…..”
Formula: 365 / Payables
Turnover Ratio

31. Year 2011 2012
Formula “365 / Payables
Turnover Ratio”
“365 / Payables
Turnover Ratio”
Calculation = 365 / 10.8 = 365 / 13.05
Result = 34 Days = 28 Days

32. Working Capital
Turnover Ratio……
“This ratio
measures that how
efficiency working
capital is being
utilized for
generation of
revenues………”
• CGS / Average working
Capital
Formula!!
• Current Assets – Current
Liabilities
Working Capital
• (Opening Working Capital +
Ending Working Capital) / 2
Avg Working Capital

33. Working Capital Turnover Ratio……
Year 2011 2012
Formula “CGS / Average
working Capital”
“CGS / Average
working Capital”
Calculation = 23230445 /
2888152
= 29848301 /
5071270
Result…. = 8.04
Times…..
= 5.9
Times……

34. “This ratio measures that how efficiency fixed
assets are being utilized for generation of
revenues………”
Formula = CGS /
Fixed
Assets

35. Year 2011 2012
Formula = CGS / Fixed
Assets
= CGS / Fixed
Assets
Calculation = 23230445 /
10270045
= 29848301 /
12675983
Result……. = 2.3
Times….
= 2.4
Times…

36. THE MAIN OBJECT OF BUSINESS CONCERN IS TO EARN PROFIT. IN GENERAL
TERMS, EFFICIENCY IN THE BUSINESS IS MEASURED BY PROFITABILITY.
BANKERS, FINANCIAL INSTITUTIONS AND OTHER CREDITORS LOOK AT THE
PROFITABILITY RATIOS AS AN INDICATOR WHETHER OR NOT THE FIRM EARNS
MORE THAN IT PAYS INTEREST FOR THE USE OF BORROWED FUNDS AND
WHETHER THE ULTIMATE REPAYMENT OF THEIR DEBT APPEARS REASONABLY
CERTAIN.

39. YEAR 2011 2012
CALCULATIONS
6628781/29859226
*100
10320618/40168919
*100
RESULT 22.20% 25.69%

40. OPERATING PROFIT
RATIO HELPS IN
DETERMINING THE
ABILITY OF
MANAGEMENT IN
RUNNING THE
BUSINESS…
FORMULA…
OPERATING PROFIT/NET
SALES*100

41. YEAR 2011 2012
CALCULATIONS
2411801/29859226
*100
4823292/40168919
*100
RESULT 8.07% 12.00%

42. THIS RATIO MEASURES THE
OVERALL PROFITABILITY.NET
PROFIT IS ARRIVED AT AFTER
TAKING INTO ACCOUNT
BOTH THE OPERATING AND
NON OPERATING ITEMS OF
iNCOME AND EXPENSES.THE
RATIO INDICATE WHAT
PORTION OF NET SALES IS
LEFT FOR THE OWNERS
AFTER ALL EXPENSES HAVE
BEEN MET..

43. YEAR 2011 2012
CALCULATIONS
890973/29859226
*100
2595193/40168919
*100
RESULT 3.00% 6.5%

44. The ratio is the test of efficiency of
the management in their business
operation. In normal conditions, the
operating ratio should b low enough
so as to leave portion of sales
sufficient to give a fair return to the
investors.

45. year 2011 2012
CALCULATIONS
((23230445+4430113)/29859226
*100)
((29848301+5879728)/40168919
*100)
RESULT 92.63% 88%

46. EXPENSE RATIOS ARE
CALCULATED BY DIVIDING
EACH ITEM OF EXPENSE OR
GROUP OF EXPENSES WITH
THE NET SALES SO ANALYSE
THE CAUSE OF VARIATION
OF THE OPERATING
RATIO.IT INDICATE THE
PORTION OF SALES WHICH
IS CONSUMED BY VARIOUS
OPEATING EXPENSES…

47. YEAR 2011 2012
CALCULATIONS
5950941/29858226
*1OO
8107847/40168919
*100
RESULT 19.92% 20.18%

48. Ratio:-
The term accounting ratios is used to describe significant
relationship which exist between figures shown in a balance sheet, in a
profit and loss account or in any other part of the accounting
organization.
EXAMPLE:-
The relationship between 100 and
500 may be expressed as1:5.
Ratio analysis facilitates the
presentation of information of financial
statements in simplified, concise and
summarized form.
J. Batty

50. The ratio determine the
long term debt paying
capacity of any
organization & measure
the efficiency of firm
regarding interest
payment.

51. Solvency Ratios
Debt to equity
ratio
Fixed asset ratio
Reserves to Capital
Proprietary
ratio
Interest coverage
ratio

52. The relationship between
borrowed funds and internal
owner’s funds is measured by
debt equity ratio.
Also known as:-
Debt to net worth ratio. FORMULAS:
Debt to equity ratio= long
term debt/ equity
Debt to equity ratio= total
debt /equity
Debt to equity ratio= long
term debt/long term funds

53. Debt to equity ratio= long term debt/ equity
Year 2011 2012
Calculation =5610,000/7236942 = 6023070/10054273
Result =0.77 =0.59

54. 0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
2011 2012
ANALYSIS

55. Debt to equity ratio= total debt /equity
Year 2011 2012
Calculation
=(5610,000+252250)
/7236942
=(6023,070+85389)
/10054273
Result
=0.81 =0.60

56. 0
0.2
0.4
0.6
0.8
1
2011 2012
ANALYSIS

57. Debt to equity ratio= long term debt/long term funds
long term funds=long term debt+equity
Year 2011 2012
Calculation =5610,000/12846942 =6023070/16077343
Result =0.43 =0.37

58. 0.3
0.35
0.4
0.45
2011
2012
ANALYSIS

59. Fixed assets ratio=Fixed Assets/Long Term Funds
Year 2011 2012
Calculation =10270045/12846942 =12675983/16077343
Result =0.80 =0.79

60. 0.785
0.79
0.795
0.8
2011 2012
ANALYSIS

61. Year 2011 2012
Calculation =(-280947/7517889) =2437263/7615776
Result =(-0.03) =0.32

62. -0.1
0
0.1
0.2
0.3
0.4
2011 2012
ANALYSIS
-0.03

63. Year 2011 2012
Calculation =7236942/16639184 =10054273/22188685
Result =0.43 =0.45

64. 0.42
0.43
0.44
0.45
2011
2012
ANALYSIS

65. Year 2011 2012
Calculation =2411801/1049141 =4823292/902503
Result =2.298 times =5.344 times

66. 0
1
2
3
4
5
6
2011 2012
ANALYSIS

68. 'Return On Investment RATIO

69. Types Of
Return On
Investment
Ratio
Return On
Capital
Employed
Ratio
Return On
Equity Ratio
Earning Per
Share Ratio
Price/
Earning
Ratio

71. Return On Capital Employed
(ROCE)
It is a measure
of the returns
that a business
is achieving
from the
capital
employed,
usually
expressed in
percentage
terms.

72. FORMULA ROCE =Earning before interest and tax (EBIT) *100
Capital employed
=Current Asset+ Fixed Asset-current Liabilities-
non Operating.Capital employed
2012
=(4823292/15038503)*100
=32.07%
2011
=(2411801/11865491)*100
=20.32%

73. 0
5
10
15
20
25
30
35
2011% 2012%
20.32% 32.07%
ANALYSIS

75. 'Return on Equity /shareholder’s
fund Ratio
This ratio measures that
how much profit a
company generates with
the money shareholders
have invested.ROE is
expressed as a percentage.

76. Formula=Profit After Tax*100
Equity
=(2595173/10054273)*100
=25.81%
= (890793/7236942)*100
=12.3%
2012
2011
Equity=Share Capital+Reserve+Profit&Loss
(Cr.)-Deferred Cost

77. 0
10
20
30
2011 2012
25.81%12.3%
ANALYSIS

79. EARNING PER SHARE
“This ratio tells us about
earning on “1” share”. EPS is
the most important term for
the investors of stock exchange.

80. 2012 =2595173/763248 =Rs.3.40
2011 =890973/730721 =Rs.1.22
Earning per share= Net profit after tax
No. of share outstanding.
FORMULA

81. 0
0.5
1
1.5
2
2.5
3
3.5
2011 2012
Rs.3.40Rs.1.22
ANALYSIS

82. PRICE/EARNING RATIO

83. PRICE/EARNING RATIO
It is a valuation ratio of
a company's current
share price compared to
its per-share earnings.

84. FORMULA:
= Market Value per Share
Earnings per Share (EPS)
2012 =98/3.4 =Rs.28.8
2011 =22.6/1.22 =Rs.18.5

85. 0
10
20
30
2011 2012
Rs. 18.5 Rs.28.8
ANALYSIS

86. Positive Points
Won the G20 award on
Inclusive Business Innovation .
Growth in profit
Growth in sales
Unique advertisement concept

87. Provide nutritious and
affordable dairy product.
Pakistan’s first company to cross
1 billion Tetra packs in 1 year.
Having 3rd UHT generation
plant.
Positive response from
customers.
Positive Points

88. EFL should have its own
packaging system to reduce
the cost.
EFL should build their
own dairy farms to meet
the increasing demand and
for quality milk and to
reduce cost.
EFL should own any
colour like Nestle and
Habib.
Recommendations:

89. CONCLUSION
After making the ratio analysis of Engro
Foods we determine that all the
profitability ratios are increases as
compare to previous year it means that
this company is growing company.