SlideShare a Scribd company logo
0
FINAL REPORT
COMPANY: Mitchell’s Fruit Farms Limited
For the fulfillment
Of the course
Analysis of Financial Statement
_____________________________
Submitted to
Mr. Nadeem Khan
By:
Shahnawaz Bhamani (8303)
Syed Muhammad Noman Mazhar (7997)
Syed Ramiz Gohar (0000)
BBA-H
1
TABLE OF CONTENT
Introduction to Mitchell’s………………………………………………………............................2
Mission Statement………………………………………………….……..........................2
Vision of Company……………………………………………………...………………...2
Mitchell’s Strength………………………………………………………………………...2
Mitchell’s Weakness………………………………………………………………………3
Financial Ratio Analysis
Introduction ………………………………………………………………………………………3
How to analyze business using financial ratios……………………………..…………………….3
What You Should Know Before Getting Started ………………………………………………..4
Purpose of Financial Ratio Analysis………………………………………..…………………......4
Why use Financial Ratio Analysis? ................................................................................................4
Balance Sheet of Mitchell’s…………………………………………………………………...…..5
Income Statement of Mitchell’s………………………………………………………………..…7
Basic Tools of Financial Analysis
1. Trend Analysis………………………………………………………………………....…8
Mitchell’s Trend Analysis of Income Statement……...……………….……………………8
Mitchell’s Trend Analysis of Balance Sheet………………………………………………..9
2. Common Size Analysis………………………………………………………………..…10
Mitchell’s Common Size Analysis Income Statement…………………………………….10
Mitchell’s Common Size Analysis of Balance Sheet …………………………………......11
3. Ratio Analysis
Liquidity Ratios……………………………………………………………………...…..13
Operating / Activity Ratios…………………………………………………………..….14
Solvency Ratios………………………………………………….……………………....14
Investment Ratios………………………………………………….…………………....15
Profitability Ratios……………………………………………….….……………….….16
4. Industry Comparison…………………………………………………………………….17
5. Balance Sheet Forecasting……………………………………………………………….19
6. Income Statement Forecasting…………………………………………………………..20
References……………………………………………………………….….……………………21
2
.
Introduction to Mitchell’s
Mitchell’s fruit farm limited is one of the oldest industries still existing in Pakistan. It was
established in 1933 by Francis J. Mitchell under the name of Indian Mildura Fruits Farm LTD.
After the country gained independence in 1947, the company name was changed to Mitchell’s
Fruit Farms LTD. with the brand name of Mitchell’s.
The result of their efforts is that today they are among the market leaders in all our
product categories. Not only that, but their products are also gaining a market abroad with
exports to several parts of the world including UK, USA, Canada, the Middle-East and South-
West Asia where already Mitchell’s is a name to reckon with.
Mission & Vision Statement of the Company
1. To be a leader in the markets we serve by providing quality products to our customers
while learning from their feedback to set even high standard.
2. To be a company that continuously enhance its superior technological skills to remain
international competitive in this day and age of increasing challenge.
3. To be a company that attracts and retains competent people by creating a culture that
fosters innovation, promotes individual growth and rewards initiative and performance.
4. To be a company which optimally combines its people, technology, management
systems, and market opportunities to achieve profitable growth while providing fair
returns to its shareholders.
5. To be a company that Endeavour’s to set the highest standards incorporate ethics.
6. To be a company that fulfills its social responsibility.
Mitchell’s Strength:
 Oldest company of Pakistan.
 ISO 9001 Award in 1998.
 International recognition.
 Own reputation in market.
 Own growing and processing facilities at one location.
 Pioneer in Pakistan for chocolate production.
3
 Single national company that has variety in flavors.
 Have more fruit content.
Mitchell’s Weakness:
 Less support of Promotions.
 Hardly advertising on the Media.
 Contended with their brand name.
 Not serious in promoting its brands.
 Very less packaging variants.
 Don’t have any short term and long-term decision-making plan.
 Decreasing growth rate and eventually losing market shares.
Financial Ratio Analysis
Introduction
A sustainable business and mission requires effective planning and financial management. Ratio
analysis is a useful management tool that will improve your understanding of financial results
and trends over time, and provide key indicators of organizational performance. Managers will
use ratio analysis to pinpoint strengths and weaknesses from which strategies and initiatives can
be formed. Funders may use ratio analysis to measure your results against other organizations or
make judgments concerning management effectiveness and mission impact.
How to analyze business using financial ratios
Ratios are use to evaluate the performance of a business and identify potential problems. Each
ratio informs about factors such as the earning power, solvency, efficiency, and debt load of your
business. They are use to measure the relationship between two or more components of the
financial statements and have greater meaning when the results are compare to industry
standards for businesses of similar size and activity.
4
What You Should Know Before Getting Started
• The Purpose of Financial Ratio Analysis
• Why Use Financial Ratio Analysis?
• Basic Tools of Financial Analysis
 Trend Analysis
 Common-Size Analysis
 Component Percentage
 Ratio Analysis
Purpose of Financial Ratio Analysis
A sustainable business and mission requires effective planning and financial management. Ratio
analysis is a useful management tool that will improve your understanding of financial results
and trends over time, and provide key indicators of organizational performance. Managers will
use ratio analysis to pinpoint strengths and weaknesses from which strategies and initiatives can
be form. Funders may use ratio analysis to measure your results against other organizations or
make judgments concerning management effectiveness and mission impact.
Why use Financial Ratio Analysis?
Financial ratio analysis can be use in two different but equally useful ways. You can use them to
examine the current performance of your company in comparison to past periods, from the prior
quarter two years ago. Frequently, this can help you identify problems that need fixing. Even
better, it can direct your attention to potential problems that can be avoided. In addition, you can
use these ratios to compare the performance of your company against that of your competitors or
other members of your industry.
5
BalanceSheet of Mitchell’s
Mitchell’s Food Farm Pakistan Ltd.
Balance Sheet
Year Ended 2012 & 2013
2013 2012
Assets
Non-current assets
Property, Plant and Equipments
393,166,181 12,491,433
Intangible assets
1,077,596 1,285,370
Biological assets
9,573,000 9,505,667
Long term Receivables
750,000 _
Total Current Liabilities
404,566,777 375,502,685
Current Assets
Stores and spares
15,026,848 12,491,433
Stock in trade
327,371,490 342,532,608
Trade debt
56,548,807 59,816,430
Advances,Deposits, Prepayments and other
receivables
84,008,075 11,387,684
Cash and Bank Balance
37,800,677 12,354,863
Total Current Assets
520,755,897 438,583,018
Total Assets
925,322,674 814,085,703
Equity and Liabilities
Capital and Reserves
Authorized Capital
200,000,000 100,000,000
Issued, Subscribed and Paid up capital
63,000,000 50,400,000
Reserves
9,635,878 9,635,878
Unappropriated Profit
454,469,244 372,529,248
Total
527,105,122 432,565,126
Non-current Liabilities
6
Deferred Liabilities
111,235,470 93,012,838
Current Liabilities
Short term running finances-Secured 97,102,844 140,987,776
Creditors, accrued and other liabilities 188,394,095 146,322,898
Accrued finance cost on short term finances 1,485,143 1,197,065
Total Liabilities
286,982,082 288,507,739
Total Liabilities & Shareholder Equity
925,322,674 814,085,703
7
Income Statementof Mitchell’s
Mitchell’s Food Farm Pakistan Ltd.
Profit & Loss Statement
Year Ended 2012 & 2013
2013 2012
Net Sales
2,084,261,537 1,884,503,125
Cost of Sales
1,546,820,121 1,421,735,606
Gross Profit
537,441,416 462,767,519
Marketing and distribution Expense
248,456,191 206,795,747
Administrative Expense
82,867,912 84,567,766
Other operating expense
14,221,178 12,104,042
Other operating income
12,534,263 16,023,676
Profit from operation
204,430,398 175,323,640
Finance Cost
17,557,660 22,964,482
Profit before taxation
186,872,738 152,359,158
Taxation
54,532,742 44,009,003
Profit for the year
132,339,996 108,350,155
8
Basic Tools of Financial Analysis
1. TREND ANALYSIS (Horizontal)
Trend analysis is one of the tools for the analysis of the company’s monetary statements for
the investment purposes. Investors use this analysis tool a lot in order to determine the
financial position of the business. In a trend analysis, the financial statements of the company
are comparing with each other for the several years after converting them in the percentage.
Mitchell’s Trend Analysis
Trend Percentage
Income Statement
Analysis
$ change Trend
%
$ change Trend
%
2013 2012 2013 2012
Net Sales 2,084,261,537 1,884,503,125 199,758,412 10.60 90,254,808 5.03
Cost of Sales 1,546,820,121 1,421,735,606 125,084,515 8.80 21,604,007 1.54
Gross Profit 537,441,416 462,767,519 74,673,897 16.14 68,650,801 17.42
Administrative
Expense 82,867,912 84,567,766 (1,699,854) (2.01) 17,828,775 26.71
Marketing and
distribution
Expense 248,456,191 206,795,747 41,660,444 20.15 23,391,565 12.75
Other operating
expense 14,221,178 12,104,042 2,117,136 17.49 3,730,248 44.55
Other operating
income 12,534,263 16,023,676 (3,489,413) (21.78) 5,116,693 46.91
operating profit 204,430,398 175,323,640 29,106,758 16.60 28,816,906 19.67
Financial Charges 17,557,660 22,964,482 (5,406,822) (23.54)
(15,395,98
6) (40.14)
Profit before
taxation 186,872,738 152,359,158 34,513,580 22.65 44,212,892 40.88
Taxation 54,532,742 44,009,003 10,523,739 23.91 9,287,946 26.75
Profit of the year 132,339,996 108,350,155 23,989,841 22.14 34,924,946 47.57
Interpretation and Recommendation on Trend Analysis of Income Statement:
As per the trend analysis by comparing the trend percentage between 2013 and 2012, Mitchell’s
net income has decreased by twice throughout year, which creates alarming situation for the
firm, and significant drop in its profitability.
9
Trend Percentage
Balance sheet analysis 2013 2012
Assets
$ change Trend
%
$ change Trend
%
Non-current assets
Property, Plant and
Equipments 393,166,181 364,711,648 28454533 7.80 41282826 12.76
Intangible assets 1,077,596 1,285,370 (207774) (16.16) (321342) (20.00)
Biological assets 9,573,000 9,505,667 67333 0.71 2372667 33.26
Long term Receivables 750,000 _ 750000
Total Non Current Assets 404,566,777 375,502,685 29,064,092 7.74 43,334,151 13.05
Current Assets
Stores and spares 15,026,848 12,491,433 2535415 20.30 3197531 34.40
Stock in trade 327,371,490 342,532,608 (15161118) (4.43) 30466632 9.76
Trade debt 56,548,807 59,816,430 (3267623) (5.46) (3428451) (5.42)
Advances,Deposits,
Prepayments and other
receivables 84,008,075 11,387,684 72620391 637.71 (21680431) (65.56)
Cash and Bank Balance 37,800,677 12,354,863 25445814 205.96 (1224908) (9.02)
Total Current Assets 520,755,897 438,583,018 82172879 18.74 7330373 1.70
Total Assets 925,322,674 814,085,703 111236971 13.66 50664524 6.64
Equity and Liabilities
Capital and Reserves
Authorized Capital 200,000,000 100,000,000 100000000 100.00 0 0.00
Issued, Subscribed and Paid up
capital
63,000,000 50,400,000
12600000 25.00 0 0.00
Reserves 9,635,878 9,635,878 0 0.00 0 0.00
Unappropriate Profit 454,469,244 372,529,248 81939996 22.00 73070155 24.40
Total 527,105,122 432,565,126 94539996 21.86 73070155 20.33
Non-current Liabilities
Deferred Liabilities 111,235,470 93,012,838 18222632 19.59 13302778 16.69
Current Liabilities
Short term running finances-
Secured 97,102,844 140,987,776 (43884932) (31.13) (13806805) (8.92)
Creditors, accrued and other
liabilities 188,394,095 146,322,898 42071197 28.75 (20211010) (12.14)
Accrued finance cost on short
term finances 1,485,143 1,197,065 288078 24.07 (1690594) (58.55)
10
Total Current Liabilities 286,982,082 288,507,739 (1525657) (0.53) (35708409) (11.01)
Total Liabilities &
Shareholder Equity 925,322,674 814,085,703 111236971 13.66 50664524 6.64
Interpretation and Recommendation on Trend Analysis of Balance Sheet:
Mitchell’s balance sheet trend analysis indicates the increase in Equity and Current Assets,
which shows quite good position and reliability of the company.
2. Common Size Analysis
Common Size Analysis is a company financial statement that displays all items as percentages of
a common base figure. This type of financial statement allows for easy analysis between
companies or between time periods of a company. Formatting financial statements in this way
reduces the bias that can occur when analyzing companies of differing sizes. It also allows for
the analysis of a company over various time periods, revealing, for example, what percentage of
sales is cost of goods sold and how that value has changed over time.
Common Size Balance Sheet: A common size balance sheet expresses each item on the balance
sheet as a percentage of total assets.
Common Size Income Statement: A common size income statement expresses each income
statement category as a percentage of total sales revenues.
Mitchell’s Common Size Analysis
COMMON SIZE
Income Statement Analysis
2013 2012
Net %
2013
Net %
2012
Net Sales
2,084,261,537 1,884,503,125
100 100
Cost of Sales
1,546,820,121 1,421,735,606 74.21 75.44
Gross Profit
537,441,416 462,767,519
25.79 24.56
Administrative Expense
248,456,191 206,795,747
3.98 4.49
Distribution and marketing Expense
82,867,912 84,567,766
11.92 10.97
Other operating expense
14,221,178 12,104,042
0.68 0.64
Other operating income
12,534,263 16,023,676
0.60 0.85
Profit from operation
204,430,398 175,323,640
9.81 9.30
Finance cost
17,557,660 22,964,482
0.84 1.22
Profit before taxation
186,872,738 152,359,158
8.97 8.08
Taxation
54,532,742 44,009,003
2.62 2.34
Profit of the year
132,339,996 108,350,155
6.35 5.75
11
Interpretation and Recommendation on Common-Size Income Statement Analysis:
The net income of Mitchell’s is increase by 1% as per common size financial analysis by
decrease in 1% of gross profit and some changes in expenses including increase in administrative
expense and taxation and, which is not beneficial for the firm.
COMMON SIZE
Balance sheet analysis
2013 2012 Net % 2013 Net % 2012
Non-current assets
Property, Plant and Equipments 393,166,181 12,491,433 42.48 44.80
Intangible Assets 1,077,596 1,285,370 0.11 0.15
Biological Assets 9,573,000 9,505,667 1.03 1.16
Long term recievables 750,000 _ 0.08 0
404,566,777 375,502,685 43.72 46.12
Current Assets
Stores and spares and loose tools 15,026,848 12,491,433 1.62 1.53
Stock in trade 327,371,490 342,532,608 35.37 42.07
Trade debt 56,548,807 59,816,430 6.11 7.34
Advance, deposits, prepayments and
other receivables
84,008,075 11,387,684 9.07 1.39
Cash and bank balances 37,800,677 12,354,863 4.08 1.51
520,755,897 438,583,018 56.27 53.87
Total Assets 925,322,674 814,085,703 100 100
Capital and Reserves
Authorized Capital 200000000 100000000 21.61 12.28
Issued, subscribed and Paid up Capital 63000000 50400000 6.80 6.19
Reserves 9,635,878 9,635,878 1.041 1.18
Unappropriate Profit 454,469,244 372,529,248 49.11 45.76
527,105,122 432,565,126 56.96 53.13
Non-current Liabilities
Deferred liabilities 111,235,470 93,012,838 12.02 11.42
Current Liabilities
12
Short term running finances-Secured 97,102,844 140,987,776 10.49 17.31
Creditors, accrued and other liabilities 188,394,095 146,322,898 20.35 17.97
Accrued finance cost on short term
finances 1,485,143 1,197,065 0.16 0.14
Total Liabilities 286,982,082 288,507,739 31.01 35.4
Total Liabilities & Shareholder
Equity
925,322,674 814,085,703 100 100
Interpretation and Recommendation on Common-Size Income Statement Analysis:
As per common size of the year 2013 with the comparison of the year 2012 the current assets
increased up to 3% from 56.28% to 53.87% and liabilities also decreased by 4% which is good
signal for the company. The change in liabilities is 4 times more than change in assets, so
Mitchell’s is in stable position.
3. Ratio Analysis
Types of Ratio
There are four main types of ratios, which use to analyze financial performance of a company.
1. Liquidity Ratio
2. Efficiency Ratio/ Operating Ratio
3. Solvency Ratio
4. Profitability Ratio
13
Mitchell’s Ratio Analysis 2013
FORMULA CALCULATI
ON
RATIO RATIO RECOMMENDATION
Liquidity Ratios 2013 2012
1.
Current
Ratio
Current Assets
/ Current
Liabilities
520755897/
286982082
1.81
1.52
Current Ratio shows the
financial strength of the
company. It measures the
short-term debt paying ability.
There is 1.81 in current assets
to pay Rs. 1 in current
liabilities, which are good
enough.
2. L
Quick
Ratio
Quick Assets/
Current
Liabilities
*Quick
Assets=
Cash+
Receivables
+Trade Debt
178357559 /
286982082
*Q.A=
37800677+840
08075+565488
07
0.62
0.28
The quick ratio tests whether a
business can meet its
obligations even if adverse
conditions occur. There is 0.62
in quick assets to pay Rs. 1 in
current liabilities; quick ratios
between 0.5 and 1 are consider
satisfactory.
3.
Cash
Ratio
Cash / Current
Liabilities
37800677 /
286982082
0.13
0.042
Cash ratio measure the
immediate amount of cash
available to satisfy short-term
liabilities. In general 0.5:1 or
higher is preferred so cash
ratio i.e. 0.13 is very good in
firm and have to maintain its
cash ratio.
14
Activity/ Operating Ratios
4.
Inventory
Turnover
COGS /
Inventory
1546820121/
327371490
4.72 4.15
Inventory turnover 4.75 *
indicates that how quickly
inventory sells.
5.
No. of
days to
sell
Inventory
365 /
Inventory
Turnover
365 / 4.72 77
88
It indicates that in 77 days
inventory sells and shows good
turnover of firm’s inventory.
6.
Receivabl
e
Turnover
Sales /
Average
Receivable
2084261537/
58945013
35.35 30.71
The ratio is used to calculate
the firm’s debt receivables for
its credit sales. However, ratio
indicates 35.35 times firm
collect receivables.
7.
No. of
days in
Receivabl
e
365 /
Receivable
Turnover
365/35.35 10
12
It indicates that in 10 days
collecting receivables and
shows very good turnover of
firm.
8.
Payable
Turnover
Purchases /
Average
Payable
1546820121/
188394483
8.21 9.71
Ratio 8.21 times shows how
quickly pay its debt to their
suppliers.
9.
No. of
days in
Payable
365 /
Payable
Turnover
365/8.21 44 38
It takes 44 days to pay debt to
the firm’s suppliers.
10.
Cash
Conversio
n Cycle
No. of days
in
receivable +
No. of days
in Inventory
–
No. of days
in Payable
10+77-44 43 62
The 43 days is a metric that
expresses the length of time, in
days, that it takes for a company
to convert resource inputs
into cash flows.
11.
Fixed
Asset
Turnover
Net Sales /
Avrg. Fixed
Assets
2084261537
/
390034731
5.34
5.32
It measures a company’s ability
to generate net sales from
fixed-asset investment. Fixed
asset turnover 5.34 times shows
that company has been more
effective in using the
investment in fixed-assets to
generate revenues.
15
12.
Total
Asset
Turnover
Net Sales /
Average
Total
Assets
2084261537/
925322674
2.25 2.31
It measures a company’s ability
to generate net sales from asset
investment. 2.25 times shows that
company has been use its assets
to quite efficiently generate sale
Solvency Ratios
13.
Financial
Leverage
Ratio or
Debt to
equity
Ratio
Total Debt /
S.H.E
398217552/
527105122
0.75
0.88
It indicates the proportion of
equity and debt the company is
using to finance its assets.
14.
Equity
Ratio
Total S.H.E
/
Total
Assets
527105122/
925322674
0.57
0.53
It measure how much
shareholders would receive in
the event of company-wide
liquidation. 0.57 indicates the
average position of ratio
shareholder may receive.
15.
Debt
Ratio
Total
Liabilities /
Total
Assets
398217552 /
925322674
0.43 0.46
It indicates the proportion of
debt a company has relative to
its assets. Debt ratio is less than
1 i.e. 0.43 shows company has
more assets than debt.
16.
Interest
Coverage
Ratio
Operating
Income /
Interest
Charges
204430398/
17557660
11.64 7.63
Interest Coverage Ratio is the
indicator of company’s ability
to meet its interest payment
obligations. Mitchell’s is
effectively able to meet its
interest payment obligation by
the ratio of 11.64
Investment Ratios
17.
Earnings
Per Share
(E.P.S.)
Net
income/
Number of
shares
outstanding
132339996/
6300000
21.01 17.20
The portion of a company’s
profit allocated to each
outstanding share of common
stock. Mitchell’s has Rs. E.P.S.
of 21.01
18.
Price –
Earnings
Ratio
Market
price per
share /
E.P.S
500 / 21.01
23.8
20.93
Price earnings ratio is the
measure of investor’s
expectations about the
company’s future prospects.
Mitchell’s p/e ratio explains
that an investor is willing to pay
Rs.23.8 for Rs.1 of current
earnings.
16
19.
Price to
book ratio
Common
S.H.E/
No. of
shares
outstanding
527,105,122/
6300000
83.66 85.82
Book value per share is the
recorded value of net assets
underlying each share of
common stock.
20.
Dividend
Yield
Dividend
per share /
Market
price per
share
7.50 / 500 0.015 0.020
Dividend expressed as a
rate of return on the market
price of the stock i.e. 0.015.
Profitability Ratios
21.
Return on
asset
Net Income
/ Total
Assets)*100
(132339996 /
925322674)*100
14.3 13.3
ROA indicates that how
profitable company’s assets
are generating profit.
Mitchell’s 14.3% get return
from its assets.
22.
Return on
equity or
Return on
net worth
(Net Income
/
S.H.E.)*100
(132339996 /
527105122)*100
25.1
25.0
ROE indicates company’s
profitability by measuring
how much profit generated
with the money invested by
common stock owners.
Mitchell’s generated about
25.0% of profit as per
S.H.E.
23.
Return on
sales or Net
profit
margin
(Net Income
/
Net
Sales)*100
(132339996 /
2084261537)*10
0
6.3 5.7
The indicator of
management’s ability to
control cost. Mitchell’s has
6.3% profit margin and that
is good enough.
24.
Gross
Margin
(Gross
Profit /
Net
Sales)*100
(537441416 /
2084261537)*10
0
25.7
24.5
It shows the measure of the
profitability of the
company’s product.
25.
Operating
Margin
(Operating
Income /
Net
Sales)*100
(204430398/
2084261537)*10
0
9.80
9.30
It indicates the measure of
the profitability from
operating profit, which is
9.80% of Mitchell’s.
26.
Earnings
Pre Tax
(Pre Tax
Profit / Net
Sales)*100
(186872738/
2084261537)*10
0
8.96 8.00
The higher the pre-tax
profit margin, the more
profitable the company and
ratio shows 8.96 with good
indicator.
 As the performance evaluated by different ratios, it is shown that Mitchells
Company is performing well in term of their own financing and borrowed capital
and utilizing enough to generate Profits from it. Furthermore, investors are also
willing to invest in the business to earn maximum output.
17
4. Food Industry 2013 Comparison:
No. Ratios Mitchell’s Fruit
Farms
National Foods Interpretation
2013 2013
1. Current Ratio 1.81 1.28 Mitchell’s has greater
current ratio than
National Foods; it means
Mitchell’s can easily pay
its shorts term debt.
2. Quick Ratio 0.62 0.50 Both company is in good
position to meet adverse
situation if occurs.
3. Cash Ratio 0.13 (0.33) Mitchell’s can easily pay
its immediate cash
amount for short term
liabilities where as
National foods have a
negative amount and not
able to meet its short
term liabilities.
4. No. of days to sell
inventory
77 113 Mitchell’s take less days
to sell its inventory as
compared to National
Foods.
5. No. of days to receive 10 20 Its shows that Mitchell’s
can quickly recover its
receivables than National
Foods.
6. Payable turnover 44 17 It shows that National
Foods efficiently pay
their debts to their
supplier, whereas
Mitchell’s takes more
days to pay to their
suppliers.
7. Cash Conversion
cycle
43 116 National Foods resources
take more than to convert
in cash form whereas
Mitchell’s takes less.
8. Total Asset Turnover 2.25 2.31 Both companies are
efficiently using their
assets to generate sales.
18
9. Debt to Equity 0.75 1.54 Shows the percentage to
owner’s investment into
the business and
remaining shows the debt
portion which company
has borrowed.
10. Equity Ratio 0.57 0.39 Higher ratio shows that
more investors are
willing to invest in
business and firm is less
risky to lend loans.
11. Debt Ratio 0.43 0.60 It shows that National
Foods are using more
debts to acquire assets
where as Mitchell’s uses
less debt.
12. Interest Coverage
Ratio
11.64 14.08 Both companies can
easily pay interest
expenses on debt which
they have borrowed.
National Foods has
higher ratio.
13. Earning Per Share 21.01 13.01 Mitchell’s Earning per
share is greater than
National Foods and it is a
part of Company’s
income.
14. Price Earning Ratio 23.8 27.72 It shows that investors of
National foods are paying
higher amount than
Mitchell’s investors.
15. Dividend Yield Ratio 0.015 2.77 National Foods are
getting more dividends
than Mitchell’s on each
stock.
16. Return on Assets 14.3 15.84 National Foods are
generating more than
Mitchell’s to generate
profit.
17. Return on Equity 25.1 43.96 Similarly, National Foods
is generating more profit
on its equity financing
than Mitchell’s.
18. Net Profit Margin 6.3 7.88 A national food has
higher return on each sale
of inventory than
Mitchell’s.
19. Operating Margin 9.80 12.33 National Foods has
higher operating margin
19
which is good sign.
20. Gross Profit Margin 25.7 34.61 National Food has high
profit margin than
Mitchell’s.
5. Mitchell’s Balance Sheet Forecasting:
Balance sheet
analysis
Amount
Change
% Change Forecasting 2014 Forecasting 2015
Assets
Non-current
assets
Property, Plant and
Equipments 28454533 7.80 423840715.6 456908454.7
Intangible assets (207774) (16.16) 903407.6874 757376.0943
Biological assets 67333 0.71 9640809.951 9709100.23
Long term
Receivables 750000 750000 750000
Total Non Current
Assets 29,064,092 7.74 435880444 469617804.1
Current Assets
Stores and spares 2535415 20.30 18076882.04 21745988.53
Stock in trade (15161118) (4.43) 312881430.7 299032727.9
Trade debt (3267623) (5.46) 53459686.13 50539316.26
Advances,Deposits,
Prepayments and
other receivables 72620391 637.71 619735906.4 4571853285
Cash and Bank
Balance 25445814 205.96 115654150.2 353852987
Total Current
Assets 82172879 18.74 618324680 734173942.4
Total Assets 111236971 13.66 1051759106 1195471858
Equity and
Liabilities
Capital and
Reserves
Authorized Capital 100000000 100.00 400000000 800000000
Issued, Subscribed
and Paid up capital 12600000 25.00 78750000 98437500
Reserves 0 0.00 9635878 9635878
Unappropriate
Profit 81939996 22.00 554432423.4 676383091.1
Total 94539996 21.86 642307465.3 782688049.7
Non-current
Liabilities
Deferred Liabilities 18222632 19.59 133028193.2 159090442.9
20
Current
Liabilities
Short term running
finances-Secured (43884932) (31.13) 66877871.12 46060954.15
Creditors, accrued
and other liabilities 42071197 28.75 242561728.3 312303801.5
Accrued finance cost
on short term
finances 288078 24.07 1842548.007 2285963.816
Total Current
Liabilities (1525657) (0.53) 285464492.8 283954928.8
Total Liabilities &
Shareholder Equity 111236971 13.66 1051759106 1195471858
6. Mitchell’s Income Statement Forecasting:
Income Statement Amount Change % Change
Forecasting
2014
Forecasting
2015
Net Sales 199,758,412 10.60 2305194455 2549546390
Cost of Sales 125,084,515 8.80 1682909591 1830972233
Gross Profit 74,673,897 16.14 624164972.2 724882565.7
Administrative
Expense (1,699,854) (2.01) 81202225.91 79570020.93
Distribution and
marketing Expense 41,660,444 20.15 298509421.7 358646224.4
Other operating
expense 2,117,136 17.49 16708625.41 19631155.95
Other operating
income (3,489,413) (21.78) 9804725.767 7669589.138
Profit from
operation 29,106,758 16.60 238369381.5 277942823.5
Finance cost (5,406,822) (23.54) 13423835.32 10263289.92
Profit before
taxation 34,513,580 22.65 229204602.2 281125809.2
Taxation 10,523,739 23.91 67572990.69 83731514.38
Profit of the year 23,989,841 22.14 161641435 197430514.7
21
References:
 Mitchell’s_Annual_Report_2013.
 Books:
 Accounting The Basis for Business Decisions by Meigs&Meigs 9th Edition
 Accounting The Basis for Business Decisions by Meigs Williams HakaBettner 11th
Edition
 Financial Reporting & Analysis by Charles H. Gibson 12th Edition
 Analysis and use of Financial Statements by G.I.White, A.C.Sondhi, Dov Fried 3rd
Edition
 https://www.zionsbank.com/pdfs/biz_resources_book-6.pdf
 http://www.investopedia.com/terms/c/commonsizefinancialstatement.asp
 http://www.readyratios.com/reference/analysis/trend_analysis.html
 http://www.cliffsnotes.com/more-subjects/accounting/accounting-principles-ii/financial-
statement-analysis/trend-analysis

More Related Content

What's hot

Shezan Marketing Report - Final Project - 2017 - UCP
Shezan Marketing Report - Final Project - 2017 - UCPShezan Marketing Report - Final Project - 2017 - UCP
Shezan Marketing Report - Final Project - 2017 - UCP
FaHaD .H. NooR
 
Atlas Honda
Atlas HondaAtlas Honda
Atlas Honda
Saad Mazhar
 
pak-suzuki-final-report
pak-suzuki-final-reportpak-suzuki-final-report
pak-suzuki-final-report
Shaikh Rehan Abdur Rasheed
 
Nishat Group Pvt-1 (1)
Nishat Group Pvt-1 (1)Nishat Group Pvt-1 (1)
Nishat Group Pvt-1 (1)
Abdul Majid
 
Strategic management report (meezan)
Strategic management  report (meezan)Strategic management  report (meezan)
Strategic management report (meezan)
Mudassar Iqbal
 
shezan markting project
shezan markting projectshezan markting project
shezan markting project
Aqsa Nawab
 
National foods ltd.
National foods ltd.National foods ltd.
National foods ltd.
Zain Shah
 
NATIONAL FOODS (Mangement Report)
NATIONAL FOODS (Mangement Report)NATIONAL FOODS (Mangement Report)
NATIONAL FOODS (Mangement Report)
Hammad Hasan
 
National foods limited
National foods limitedNational foods limited
National foods limited
M Shahzaib Khan
 
Project of lucky cement .
Project of lucky cement .Project of lucky cement .
Project of lucky cement .
Rehman khan shama
 
Nestle
NestleNestle
Nestle
bomarayag
 
Engro foods distribution channel
Engro foods distribution channelEngro foods distribution channel
Engro foods distribution channel
The Superior University, Lahore
 
National foods
National foodsNational foods
National foods
Usman Aziz
 
Engro fFoods dairy milk product mabrook Product Failure & Its Reasons
Engro fFoods dairy milk product mabrook Product Failure & Its Reasons  Engro fFoods dairy milk product mabrook Product Failure & Its Reasons
Engro fFoods dairy milk product mabrook Product Failure & Its Reasons
Syed Shahbaz
 
Honda atlas
Honda atlasHonda atlas
Honda atlas
Wakas Khalid
 
Strategic Analysis of Shan Food Industries
Strategic Analysis of Shan Food IndustriesStrategic Analysis of Shan Food Industries
Strategic Analysis of Shan Food Industries
Abubakr Naushahi
 
Fauji fertilizers
Fauji fertilizersFauji fertilizers
Fauji fertilizers
zaraahmad22
 
Shan And National Competitor_Our Project on [Aroma Foods]
Shan And National Competitor_Our Project on  [Aroma Foods] Shan And National Competitor_Our Project on  [Aroma Foods]
Shan And National Competitor_Our Project on [Aroma Foods]
Salma Khaliq
 
Dawlance
DawlanceDawlance
Dawlance
DoctrineWorld
 
Financial ratio analysis of Nishat mills ltd
Financial ratio analysis of Nishat mills ltdFinancial ratio analysis of Nishat mills ltd
Financial ratio analysis of Nishat mills ltd
SoftSol
 

What's hot (20)

Shezan Marketing Report - Final Project - 2017 - UCP
Shezan Marketing Report - Final Project - 2017 - UCPShezan Marketing Report - Final Project - 2017 - UCP
Shezan Marketing Report - Final Project - 2017 - UCP
 
Atlas Honda
Atlas HondaAtlas Honda
Atlas Honda
 
pak-suzuki-final-report
pak-suzuki-final-reportpak-suzuki-final-report
pak-suzuki-final-report
 
Nishat Group Pvt-1 (1)
Nishat Group Pvt-1 (1)Nishat Group Pvt-1 (1)
Nishat Group Pvt-1 (1)
 
Strategic management report (meezan)
Strategic management  report (meezan)Strategic management  report (meezan)
Strategic management report (meezan)
 
shezan markting project
shezan markting projectshezan markting project
shezan markting project
 
National foods ltd.
National foods ltd.National foods ltd.
National foods ltd.
 
NATIONAL FOODS (Mangement Report)
NATIONAL FOODS (Mangement Report)NATIONAL FOODS (Mangement Report)
NATIONAL FOODS (Mangement Report)
 
National foods limited
National foods limitedNational foods limited
National foods limited
 
Project of lucky cement .
Project of lucky cement .Project of lucky cement .
Project of lucky cement .
 
Nestle
NestleNestle
Nestle
 
Engro foods distribution channel
Engro foods distribution channelEngro foods distribution channel
Engro foods distribution channel
 
National foods
National foodsNational foods
National foods
 
Engro fFoods dairy milk product mabrook Product Failure & Its Reasons
Engro fFoods dairy milk product mabrook Product Failure & Its Reasons  Engro fFoods dairy milk product mabrook Product Failure & Its Reasons
Engro fFoods dairy milk product mabrook Product Failure & Its Reasons
 
Honda atlas
Honda atlasHonda atlas
Honda atlas
 
Strategic Analysis of Shan Food Industries
Strategic Analysis of Shan Food IndustriesStrategic Analysis of Shan Food Industries
Strategic Analysis of Shan Food Industries
 
Fauji fertilizers
Fauji fertilizersFauji fertilizers
Fauji fertilizers
 
Shan And National Competitor_Our Project on [Aroma Foods]
Shan And National Competitor_Our Project on  [Aroma Foods] Shan And National Competitor_Our Project on  [Aroma Foods]
Shan And National Competitor_Our Project on [Aroma Foods]
 
Dawlance
DawlanceDawlance
Dawlance
 
Financial ratio analysis of Nishat mills ltd
Financial ratio analysis of Nishat mills ltdFinancial ratio analysis of Nishat mills ltd
Financial ratio analysis of Nishat mills ltd
 

Viewers also liked

Communicative English Jeruk Madu Pak Ali
Communicative English Jeruk Madu Pak Ali Communicative English Jeruk Madu Pak Ali
Communicative English Jeruk Madu Pak Ali
syahizam95
 
Financial statement for islamic banks
Financial statement for islamic banksFinancial statement for islamic banks
Financial statement for islamic banks
Farzan Mohammed
 
The keller williams way recruiting grow your profit
The keller williams way recruiting grow your profitThe keller williams way recruiting grow your profit
The keller williams way recruiting grow your profit
John Taylor
 
Project Management Basics
Project Management BasicsProject Management Basics
Project Management Basics
Mitchell Manning Sr.
 
ENT300 Business Proposal Jeruk madu tip top
ENT300 Business Proposal Jeruk madu tip topENT300 Business Proposal Jeruk madu tip top
ENT300 Business Proposal Jeruk madu tip top
Alia Najiha
 
Report on launching of new product
Report on launching of new productReport on launching of new product
Report on launching of new product
Faiza Javaid
 

Viewers also liked (6)

Communicative English Jeruk Madu Pak Ali
Communicative English Jeruk Madu Pak Ali Communicative English Jeruk Madu Pak Ali
Communicative English Jeruk Madu Pak Ali
 
Financial statement for islamic banks
Financial statement for islamic banksFinancial statement for islamic banks
Financial statement for islamic banks
 
The keller williams way recruiting grow your profit
The keller williams way recruiting grow your profitThe keller williams way recruiting grow your profit
The keller williams way recruiting grow your profit
 
Project Management Basics
Project Management BasicsProject Management Basics
Project Management Basics
 
ENT300 Business Proposal Jeruk madu tip top
ENT300 Business Proposal Jeruk madu tip topENT300 Business Proposal Jeruk madu tip top
ENT300 Business Proposal Jeruk madu tip top
 
Report on launching of new product
Report on launching of new productReport on launching of new product
Report on launching of new product
 

Similar to Mitchels annual report

GSK Annual Report
GSK Annual ReportGSK Annual Report
GSK Annual Report
Shahnawaz Bhamani
 
Strategic management 2010 prashant
Strategic management 2010 prashantStrategic management 2010 prashant
Strategic management 2010 prashant
dinesh salame
 
Tim Hoad - Creating Value from your Intangibles - Diagnostic - Feb 2004
Tim Hoad - Creating Value from your Intangibles - Diagnostic - Feb 2004Tim Hoad - Creating Value from your Intangibles - Diagnostic - Feb 2004
Tim Hoad - Creating Value from your Intangibles - Diagnostic - Feb 2004
Tim Hoad
 
Mastering Finance in Business
Mastering Finance in BusinessMastering Finance in Business
Mastering Finance in Business
Melih ÖZCANLI
 
Lecture7
Lecture7Lecture7
Condensed Business Plan
Condensed Business PlanCondensed Business Plan
Condensed Business Plan
Zaid Kadwa
 
Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'
Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'
Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'
miranga88
 
Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'
Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'
Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'
miranga88
 
Strategic management
Strategic managementStrategic management
Strategic management
noor ikram
 
24398947 strategic-management-final-notes
24398947 strategic-management-final-notes24398947 strategic-management-final-notes
24398947 strategic-management-final-notes
Santosh Pathak
 
Eco Industries MGMT 497
Eco Industries MGMT 497Eco Industries MGMT 497
Eco Industries MGMT 497
Luisana Villalba
 
Strategic assignment v1
Strategic assignment v1Strategic assignment v1
Strategic assignment v1
Tabish Ahmad
 
Strategic Financial Analysis and Design - Finance Report
Strategic Financial Analysis and Design - Finance ReportStrategic Financial Analysis and Design - Finance Report
Strategic Financial Analysis and Design - Finance Report
Abdul Aziz Afzaal Siddiqui
 
Organizational Objectives
Organizational ObjectivesOrganizational Objectives
Organizational Objectives
Reactivador Fantasma
 
Finance Presentation 2008
Finance Presentation  2008Finance Presentation  2008
Finance Presentation 2008
stevepollard
 
W1007 MANAGEMENT
W1007 MANAGEMENTW1007 MANAGEMENT
Application Of Bsc
Application Of BscApplication Of Bsc
Application Of Bsc
mufaroo
 
Application Of Bsc
Application Of BscApplication Of Bsc
Application Of Bsc
mufaroo
 
Application of Balance Scorecard
Application of Balance ScorecardApplication of Balance Scorecard
Application of Balance Scorecard
mufaroo
 
Pl 3 Effective Planning Models
Pl 3    Effective Planning ModelsPl 3    Effective Planning Models
Pl 3 Effective Planning Models
Jo Balucanag - Bitonio
 

Similar to Mitchels annual report (20)

GSK Annual Report
GSK Annual ReportGSK Annual Report
GSK Annual Report
 
Strategic management 2010 prashant
Strategic management 2010 prashantStrategic management 2010 prashant
Strategic management 2010 prashant
 
Tim Hoad - Creating Value from your Intangibles - Diagnostic - Feb 2004
Tim Hoad - Creating Value from your Intangibles - Diagnostic - Feb 2004Tim Hoad - Creating Value from your Intangibles - Diagnostic - Feb 2004
Tim Hoad - Creating Value from your Intangibles - Diagnostic - Feb 2004
 
Mastering Finance in Business
Mastering Finance in BusinessMastering Finance in Business
Mastering Finance in Business
 
Lecture7
Lecture7Lecture7
Lecture7
 
Condensed Business Plan
Condensed Business PlanCondensed Business Plan
Condensed Business Plan
 
Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'
Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'
Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'
 
Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'
Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'
Ratio Analysis in 'ROYAL CERAMIC LANKA PLC'
 
Strategic management
Strategic managementStrategic management
Strategic management
 
24398947 strategic-management-final-notes
24398947 strategic-management-final-notes24398947 strategic-management-final-notes
24398947 strategic-management-final-notes
 
Eco Industries MGMT 497
Eco Industries MGMT 497Eco Industries MGMT 497
Eco Industries MGMT 497
 
Strategic assignment v1
Strategic assignment v1Strategic assignment v1
Strategic assignment v1
 
Strategic Financial Analysis and Design - Finance Report
Strategic Financial Analysis and Design - Finance ReportStrategic Financial Analysis and Design - Finance Report
Strategic Financial Analysis and Design - Finance Report
 
Organizational Objectives
Organizational ObjectivesOrganizational Objectives
Organizational Objectives
 
Finance Presentation 2008
Finance Presentation  2008Finance Presentation  2008
Finance Presentation 2008
 
W1007 MANAGEMENT
W1007 MANAGEMENTW1007 MANAGEMENT
W1007 MANAGEMENT
 
Application Of Bsc
Application Of BscApplication Of Bsc
Application Of Bsc
 
Application Of Bsc
Application Of BscApplication Of Bsc
Application Of Bsc
 
Application of Balance Scorecard
Application of Balance ScorecardApplication of Balance Scorecard
Application of Balance Scorecard
 
Pl 3 Effective Planning Models
Pl 3    Effective Planning ModelsPl 3    Effective Planning Models
Pl 3 Effective Planning Models
 

More from Shahnawaz Bhamani

Huawei(2)
Huawei(2)Huawei(2)
Agency and the act of an Uncommissioned Agent (Fadooli)
Agency and the act of an Uncommissioned Agent (Fadooli)Agency and the act of an Uncommissioned Agent (Fadooli)
Agency and the act of an Uncommissioned Agent (Fadooli)
Shahnawaz Bhamani
 
Metro Cash and Carry
Metro Cash and CarryMetro Cash and Carry
Metro Cash and Carry
Shahnawaz Bhamani
 
Metro Cash and Carry
Metro Cash and CarryMetro Cash and Carry
Metro Cash and Carry
Shahnawaz Bhamani
 
Metro Cash and Carry
Metro Cash and CarryMetro Cash and Carry
Metro Cash and Carry
Shahnawaz Bhamani
 
Al Haj FAW Company
Al Haj FAW CompanyAl Haj FAW Company
Al Haj FAW Company
Shahnawaz Bhamani
 
Al haj faw company
Al haj faw companyAl haj faw company
Al haj faw company
Shahnawaz Bhamani
 
Gender Bias
Gender BiasGender Bias
Gender Bias
Shahnawaz Bhamani
 
Professional Business plan
Professional Business planProfessional Business plan
Professional Business plan
Shahnawaz Bhamani
 

More from Shahnawaz Bhamani (9)

Huawei(2)
Huawei(2)Huawei(2)
Huawei(2)
 
Agency and the act of an Uncommissioned Agent (Fadooli)
Agency and the act of an Uncommissioned Agent (Fadooli)Agency and the act of an Uncommissioned Agent (Fadooli)
Agency and the act of an Uncommissioned Agent (Fadooli)
 
Metro Cash and Carry
Metro Cash and CarryMetro Cash and Carry
Metro Cash and Carry
 
Metro Cash and Carry
Metro Cash and CarryMetro Cash and Carry
Metro Cash and Carry
 
Metro Cash and Carry
Metro Cash and CarryMetro Cash and Carry
Metro Cash and Carry
 
Al Haj FAW Company
Al Haj FAW CompanyAl Haj FAW Company
Al Haj FAW Company
 
Al haj faw company
Al haj faw companyAl haj faw company
Al haj faw company
 
Gender Bias
Gender BiasGender Bias
Gender Bias
 
Professional Business plan
Professional Business planProfessional Business plan
Professional Business plan
 

Recently uploaded

Global Situational Awareness of A.I. and where its headed
Global Situational Awareness of A.I. and where its headedGlobal Situational Awareness of A.I. and where its headed
Global Situational Awareness of A.I. and where its headed
vikram sood
 
DSSML24_tspann_CodelessGenerativeAIPipelines
DSSML24_tspann_CodelessGenerativeAIPipelinesDSSML24_tspann_CodelessGenerativeAIPipelines
DSSML24_tspann_CodelessGenerativeAIPipelines
Timothy Spann
 
DATA COMMS-NETWORKS YR2 lecture 08 NAT & CLOUD.docx
DATA COMMS-NETWORKS YR2 lecture 08 NAT & CLOUD.docxDATA COMMS-NETWORKS YR2 lecture 08 NAT & CLOUD.docx
DATA COMMS-NETWORKS YR2 lecture 08 NAT & CLOUD.docx
SaffaIbrahim1
 
ViewShift: Hassle-free Dynamic Policy Enforcement for Every Data Lake
ViewShift: Hassle-free Dynamic Policy Enforcement for Every Data LakeViewShift: Hassle-free Dynamic Policy Enforcement for Every Data Lake
ViewShift: Hassle-free Dynamic Policy Enforcement for Every Data Lake
Walaa Eldin Moustafa
 
一比一原版(UO毕业证)渥太华大学毕业证如何办理
一比一原版(UO毕业证)渥太华大学毕业证如何办理一比一原版(UO毕业证)渥太华大学毕业证如何办理
一比一原版(UO毕业证)渥太华大学毕业证如何办理
aqzctr7x
 
Analysis insight about a Flyball dog competition team's performance
Analysis insight about a Flyball dog competition team's performanceAnalysis insight about a Flyball dog competition team's performance
Analysis insight about a Flyball dog competition team's performance
roli9797
 
Everything you wanted to know about LIHTC
Everything you wanted to know about LIHTCEverything you wanted to know about LIHTC
Everything you wanted to know about LIHTC
Roger Valdez
 
在线办理(英国UCA毕业证书)创意艺术大学毕业证在读证明一模一样
在线办理(英国UCA毕业证书)创意艺术大学毕业证在读证明一模一样在线办理(英国UCA毕业证书)创意艺术大学毕业证在读证明一模一样
在线办理(英国UCA毕业证书)创意艺术大学毕业证在读证明一模一样
v7oacc3l
 
原版制作(unimelb毕业证书)墨尔本大学毕业证Offer一模一样
原版制作(unimelb毕业证书)墨尔本大学毕业证Offer一模一样原版制作(unimelb毕业证书)墨尔本大学毕业证Offer一模一样
原版制作(unimelb毕业证书)墨尔本大学毕业证Offer一模一样
ihavuls
 
End-to-end pipeline agility - Berlin Buzzwords 2024
End-to-end pipeline agility - Berlin Buzzwords 2024End-to-end pipeline agility - Berlin Buzzwords 2024
End-to-end pipeline agility - Berlin Buzzwords 2024
Lars Albertsson
 
The Ipsos - AI - Monitor 2024 Report.pdf
The  Ipsos - AI - Monitor 2024 Report.pdfThe  Ipsos - AI - Monitor 2024 Report.pdf
The Ipsos - AI - Monitor 2024 Report.pdf
Social Samosa
 
一比一原版(UMN文凭证书)明尼苏达大学毕业证如何办理
一比一原版(UMN文凭证书)明尼苏达大学毕业证如何办理一比一原版(UMN文凭证书)明尼苏达大学毕业证如何办理
一比一原版(UMN文凭证书)明尼苏达大学毕业证如何办理
nyfuhyz
 
一比一原版(Unimelb毕业证书)墨尔本大学毕业证如何办理
一比一原版(Unimelb毕业证书)墨尔本大学毕业证如何办理一比一原版(Unimelb毕业证书)墨尔本大学毕业证如何办理
一比一原版(Unimelb毕业证书)墨尔本大学毕业证如何办理
xclpvhuk
 
Palo Alto Cortex XDR presentation .......
Palo Alto Cortex XDR presentation .......Palo Alto Cortex XDR presentation .......
Palo Alto Cortex XDR presentation .......
Sachin Paul
 
Udemy_2024_Global_Learning_Skills_Trends_Report (1).pdf
Udemy_2024_Global_Learning_Skills_Trends_Report (1).pdfUdemy_2024_Global_Learning_Skills_Trends_Report (1).pdf
Udemy_2024_Global_Learning_Skills_Trends_Report (1).pdf
Fernanda Palhano
 
办(uts毕业证书)悉尼科技大学毕业证学历证书原版一模一样
办(uts毕业证书)悉尼科技大学毕业证学历证书原版一模一样办(uts毕业证书)悉尼科技大学毕业证学历证书原版一模一样
办(uts毕业证书)悉尼科技大学毕业证学历证书原版一模一样
apvysm8
 
一比一原版(UCSF文凭证书)旧金山分校毕业证如何办理
一比一原版(UCSF文凭证书)旧金山分校毕业证如何办理一比一原版(UCSF文凭证书)旧金山分校毕业证如何办理
一比一原版(UCSF文凭证书)旧金山分校毕业证如何办理
nuttdpt
 
Predictably Improve Your B2B Tech Company's Performance by Leveraging Data
Predictably Improve Your B2B Tech Company's Performance by Leveraging DataPredictably Improve Your B2B Tech Company's Performance by Leveraging Data
Predictably Improve Your B2B Tech Company's Performance by Leveraging Data
Kiwi Creative
 
STATATHON: Unleashing the Power of Statistics in a 48-Hour Knowledge Extravag...
STATATHON: Unleashing the Power of Statistics in a 48-Hour Knowledge Extravag...STATATHON: Unleashing the Power of Statistics in a 48-Hour Knowledge Extravag...
STATATHON: Unleashing the Power of Statistics in a 48-Hour Knowledge Extravag...
sameer shah
 
一比一原版(UCSB文凭证书)圣芭芭拉分校毕业证如何办理
一比一原版(UCSB文凭证书)圣芭芭拉分校毕业证如何办理一比一原版(UCSB文凭证书)圣芭芭拉分校毕业证如何办理
一比一原版(UCSB文凭证书)圣芭芭拉分校毕业证如何办理
nuttdpt
 

Recently uploaded (20)

Global Situational Awareness of A.I. and where its headed
Global Situational Awareness of A.I. and where its headedGlobal Situational Awareness of A.I. and where its headed
Global Situational Awareness of A.I. and where its headed
 
DSSML24_tspann_CodelessGenerativeAIPipelines
DSSML24_tspann_CodelessGenerativeAIPipelinesDSSML24_tspann_CodelessGenerativeAIPipelines
DSSML24_tspann_CodelessGenerativeAIPipelines
 
DATA COMMS-NETWORKS YR2 lecture 08 NAT & CLOUD.docx
DATA COMMS-NETWORKS YR2 lecture 08 NAT & CLOUD.docxDATA COMMS-NETWORKS YR2 lecture 08 NAT & CLOUD.docx
DATA COMMS-NETWORKS YR2 lecture 08 NAT & CLOUD.docx
 
ViewShift: Hassle-free Dynamic Policy Enforcement for Every Data Lake
ViewShift: Hassle-free Dynamic Policy Enforcement for Every Data LakeViewShift: Hassle-free Dynamic Policy Enforcement for Every Data Lake
ViewShift: Hassle-free Dynamic Policy Enforcement for Every Data Lake
 
一比一原版(UO毕业证)渥太华大学毕业证如何办理
一比一原版(UO毕业证)渥太华大学毕业证如何办理一比一原版(UO毕业证)渥太华大学毕业证如何办理
一比一原版(UO毕业证)渥太华大学毕业证如何办理
 
Analysis insight about a Flyball dog competition team's performance
Analysis insight about a Flyball dog competition team's performanceAnalysis insight about a Flyball dog competition team's performance
Analysis insight about a Flyball dog competition team's performance
 
Everything you wanted to know about LIHTC
Everything you wanted to know about LIHTCEverything you wanted to know about LIHTC
Everything you wanted to know about LIHTC
 
在线办理(英国UCA毕业证书)创意艺术大学毕业证在读证明一模一样
在线办理(英国UCA毕业证书)创意艺术大学毕业证在读证明一模一样在线办理(英国UCA毕业证书)创意艺术大学毕业证在读证明一模一样
在线办理(英国UCA毕业证书)创意艺术大学毕业证在读证明一模一样
 
原版制作(unimelb毕业证书)墨尔本大学毕业证Offer一模一样
原版制作(unimelb毕业证书)墨尔本大学毕业证Offer一模一样原版制作(unimelb毕业证书)墨尔本大学毕业证Offer一模一样
原版制作(unimelb毕业证书)墨尔本大学毕业证Offer一模一样
 
End-to-end pipeline agility - Berlin Buzzwords 2024
End-to-end pipeline agility - Berlin Buzzwords 2024End-to-end pipeline agility - Berlin Buzzwords 2024
End-to-end pipeline agility - Berlin Buzzwords 2024
 
The Ipsos - AI - Monitor 2024 Report.pdf
The  Ipsos - AI - Monitor 2024 Report.pdfThe  Ipsos - AI - Monitor 2024 Report.pdf
The Ipsos - AI - Monitor 2024 Report.pdf
 
一比一原版(UMN文凭证书)明尼苏达大学毕业证如何办理
一比一原版(UMN文凭证书)明尼苏达大学毕业证如何办理一比一原版(UMN文凭证书)明尼苏达大学毕业证如何办理
一比一原版(UMN文凭证书)明尼苏达大学毕业证如何办理
 
一比一原版(Unimelb毕业证书)墨尔本大学毕业证如何办理
一比一原版(Unimelb毕业证书)墨尔本大学毕业证如何办理一比一原版(Unimelb毕业证书)墨尔本大学毕业证如何办理
一比一原版(Unimelb毕业证书)墨尔本大学毕业证如何办理
 
Palo Alto Cortex XDR presentation .......
Palo Alto Cortex XDR presentation .......Palo Alto Cortex XDR presentation .......
Palo Alto Cortex XDR presentation .......
 
Udemy_2024_Global_Learning_Skills_Trends_Report (1).pdf
Udemy_2024_Global_Learning_Skills_Trends_Report (1).pdfUdemy_2024_Global_Learning_Skills_Trends_Report (1).pdf
Udemy_2024_Global_Learning_Skills_Trends_Report (1).pdf
 
办(uts毕业证书)悉尼科技大学毕业证学历证书原版一模一样
办(uts毕业证书)悉尼科技大学毕业证学历证书原版一模一样办(uts毕业证书)悉尼科技大学毕业证学历证书原版一模一样
办(uts毕业证书)悉尼科技大学毕业证学历证书原版一模一样
 
一比一原版(UCSF文凭证书)旧金山分校毕业证如何办理
一比一原版(UCSF文凭证书)旧金山分校毕业证如何办理一比一原版(UCSF文凭证书)旧金山分校毕业证如何办理
一比一原版(UCSF文凭证书)旧金山分校毕业证如何办理
 
Predictably Improve Your B2B Tech Company's Performance by Leveraging Data
Predictably Improve Your B2B Tech Company's Performance by Leveraging DataPredictably Improve Your B2B Tech Company's Performance by Leveraging Data
Predictably Improve Your B2B Tech Company's Performance by Leveraging Data
 
STATATHON: Unleashing the Power of Statistics in a 48-Hour Knowledge Extravag...
STATATHON: Unleashing the Power of Statistics in a 48-Hour Knowledge Extravag...STATATHON: Unleashing the Power of Statistics in a 48-Hour Knowledge Extravag...
STATATHON: Unleashing the Power of Statistics in a 48-Hour Knowledge Extravag...
 
一比一原版(UCSB文凭证书)圣芭芭拉分校毕业证如何办理
一比一原版(UCSB文凭证书)圣芭芭拉分校毕业证如何办理一比一原版(UCSB文凭证书)圣芭芭拉分校毕业证如何办理
一比一原版(UCSB文凭证书)圣芭芭拉分校毕业证如何办理
 

Mitchels annual report

  • 1. 0 FINAL REPORT COMPANY: Mitchell’s Fruit Farms Limited For the fulfillment Of the course Analysis of Financial Statement _____________________________ Submitted to Mr. Nadeem Khan By: Shahnawaz Bhamani (8303) Syed Muhammad Noman Mazhar (7997) Syed Ramiz Gohar (0000) BBA-H
  • 2. 1 TABLE OF CONTENT Introduction to Mitchell’s………………………………………………………............................2 Mission Statement………………………………………………….……..........................2 Vision of Company……………………………………………………...………………...2 Mitchell’s Strength………………………………………………………………………...2 Mitchell’s Weakness………………………………………………………………………3 Financial Ratio Analysis Introduction ………………………………………………………………………………………3 How to analyze business using financial ratios……………………………..…………………….3 What You Should Know Before Getting Started ………………………………………………..4 Purpose of Financial Ratio Analysis………………………………………..…………………......4 Why use Financial Ratio Analysis? ................................................................................................4 Balance Sheet of Mitchell’s…………………………………………………………………...…..5 Income Statement of Mitchell’s………………………………………………………………..…7 Basic Tools of Financial Analysis 1. Trend Analysis………………………………………………………………………....…8 Mitchell’s Trend Analysis of Income Statement……...……………….……………………8 Mitchell’s Trend Analysis of Balance Sheet………………………………………………..9 2. Common Size Analysis………………………………………………………………..…10 Mitchell’s Common Size Analysis Income Statement…………………………………….10 Mitchell’s Common Size Analysis of Balance Sheet …………………………………......11 3. Ratio Analysis Liquidity Ratios……………………………………………………………………...…..13 Operating / Activity Ratios…………………………………………………………..….14 Solvency Ratios………………………………………………….……………………....14 Investment Ratios………………………………………………….…………………....15 Profitability Ratios……………………………………………….….……………….….16 4. Industry Comparison…………………………………………………………………….17 5. Balance Sheet Forecasting……………………………………………………………….19 6. Income Statement Forecasting…………………………………………………………..20 References……………………………………………………………….….……………………21
  • 3. 2 . Introduction to Mitchell’s Mitchell’s fruit farm limited is one of the oldest industries still existing in Pakistan. It was established in 1933 by Francis J. Mitchell under the name of Indian Mildura Fruits Farm LTD. After the country gained independence in 1947, the company name was changed to Mitchell’s Fruit Farms LTD. with the brand name of Mitchell’s. The result of their efforts is that today they are among the market leaders in all our product categories. Not only that, but their products are also gaining a market abroad with exports to several parts of the world including UK, USA, Canada, the Middle-East and South- West Asia where already Mitchell’s is a name to reckon with. Mission & Vision Statement of the Company 1. To be a leader in the markets we serve by providing quality products to our customers while learning from their feedback to set even high standard. 2. To be a company that continuously enhance its superior technological skills to remain international competitive in this day and age of increasing challenge. 3. To be a company that attracts and retains competent people by creating a culture that fosters innovation, promotes individual growth and rewards initiative and performance. 4. To be a company which optimally combines its people, technology, management systems, and market opportunities to achieve profitable growth while providing fair returns to its shareholders. 5. To be a company that Endeavour’s to set the highest standards incorporate ethics. 6. To be a company that fulfills its social responsibility. Mitchell’s Strength:  Oldest company of Pakistan.  ISO 9001 Award in 1998.  International recognition.  Own reputation in market.  Own growing and processing facilities at one location.  Pioneer in Pakistan for chocolate production.
  • 4. 3  Single national company that has variety in flavors.  Have more fruit content. Mitchell’s Weakness:  Less support of Promotions.  Hardly advertising on the Media.  Contended with their brand name.  Not serious in promoting its brands.  Very less packaging variants.  Don’t have any short term and long-term decision-making plan.  Decreasing growth rate and eventually losing market shares. Financial Ratio Analysis Introduction A sustainable business and mission requires effective planning and financial management. Ratio analysis is a useful management tool that will improve your understanding of financial results and trends over time, and provide key indicators of organizational performance. Managers will use ratio analysis to pinpoint strengths and weaknesses from which strategies and initiatives can be formed. Funders may use ratio analysis to measure your results against other organizations or make judgments concerning management effectiveness and mission impact. How to analyze business using financial ratios Ratios are use to evaluate the performance of a business and identify potential problems. Each ratio informs about factors such as the earning power, solvency, efficiency, and debt load of your business. They are use to measure the relationship between two or more components of the financial statements and have greater meaning when the results are compare to industry standards for businesses of similar size and activity.
  • 5. 4 What You Should Know Before Getting Started • The Purpose of Financial Ratio Analysis • Why Use Financial Ratio Analysis? • Basic Tools of Financial Analysis  Trend Analysis  Common-Size Analysis  Component Percentage  Ratio Analysis Purpose of Financial Ratio Analysis A sustainable business and mission requires effective planning and financial management. Ratio analysis is a useful management tool that will improve your understanding of financial results and trends over time, and provide key indicators of organizational performance. Managers will use ratio analysis to pinpoint strengths and weaknesses from which strategies and initiatives can be form. Funders may use ratio analysis to measure your results against other organizations or make judgments concerning management effectiveness and mission impact. Why use Financial Ratio Analysis? Financial ratio analysis can be use in two different but equally useful ways. You can use them to examine the current performance of your company in comparison to past periods, from the prior quarter two years ago. Frequently, this can help you identify problems that need fixing. Even better, it can direct your attention to potential problems that can be avoided. In addition, you can use these ratios to compare the performance of your company against that of your competitors or other members of your industry.
  • 6. 5 BalanceSheet of Mitchell’s Mitchell’s Food Farm Pakistan Ltd. Balance Sheet Year Ended 2012 & 2013 2013 2012 Assets Non-current assets Property, Plant and Equipments 393,166,181 12,491,433 Intangible assets 1,077,596 1,285,370 Biological assets 9,573,000 9,505,667 Long term Receivables 750,000 _ Total Current Liabilities 404,566,777 375,502,685 Current Assets Stores and spares 15,026,848 12,491,433 Stock in trade 327,371,490 342,532,608 Trade debt 56,548,807 59,816,430 Advances,Deposits, Prepayments and other receivables 84,008,075 11,387,684 Cash and Bank Balance 37,800,677 12,354,863 Total Current Assets 520,755,897 438,583,018 Total Assets 925,322,674 814,085,703 Equity and Liabilities Capital and Reserves Authorized Capital 200,000,000 100,000,000 Issued, Subscribed and Paid up capital 63,000,000 50,400,000 Reserves 9,635,878 9,635,878 Unappropriated Profit 454,469,244 372,529,248 Total 527,105,122 432,565,126 Non-current Liabilities
  • 7. 6 Deferred Liabilities 111,235,470 93,012,838 Current Liabilities Short term running finances-Secured 97,102,844 140,987,776 Creditors, accrued and other liabilities 188,394,095 146,322,898 Accrued finance cost on short term finances 1,485,143 1,197,065 Total Liabilities 286,982,082 288,507,739 Total Liabilities & Shareholder Equity 925,322,674 814,085,703
  • 8. 7 Income Statementof Mitchell’s Mitchell’s Food Farm Pakistan Ltd. Profit & Loss Statement Year Ended 2012 & 2013 2013 2012 Net Sales 2,084,261,537 1,884,503,125 Cost of Sales 1,546,820,121 1,421,735,606 Gross Profit 537,441,416 462,767,519 Marketing and distribution Expense 248,456,191 206,795,747 Administrative Expense 82,867,912 84,567,766 Other operating expense 14,221,178 12,104,042 Other operating income 12,534,263 16,023,676 Profit from operation 204,430,398 175,323,640 Finance Cost 17,557,660 22,964,482 Profit before taxation 186,872,738 152,359,158 Taxation 54,532,742 44,009,003 Profit for the year 132,339,996 108,350,155
  • 9. 8 Basic Tools of Financial Analysis 1. TREND ANALYSIS (Horizontal) Trend analysis is one of the tools for the analysis of the company’s monetary statements for the investment purposes. Investors use this analysis tool a lot in order to determine the financial position of the business. In a trend analysis, the financial statements of the company are comparing with each other for the several years after converting them in the percentage. Mitchell’s Trend Analysis Trend Percentage Income Statement Analysis $ change Trend % $ change Trend % 2013 2012 2013 2012 Net Sales 2,084,261,537 1,884,503,125 199,758,412 10.60 90,254,808 5.03 Cost of Sales 1,546,820,121 1,421,735,606 125,084,515 8.80 21,604,007 1.54 Gross Profit 537,441,416 462,767,519 74,673,897 16.14 68,650,801 17.42 Administrative Expense 82,867,912 84,567,766 (1,699,854) (2.01) 17,828,775 26.71 Marketing and distribution Expense 248,456,191 206,795,747 41,660,444 20.15 23,391,565 12.75 Other operating expense 14,221,178 12,104,042 2,117,136 17.49 3,730,248 44.55 Other operating income 12,534,263 16,023,676 (3,489,413) (21.78) 5,116,693 46.91 operating profit 204,430,398 175,323,640 29,106,758 16.60 28,816,906 19.67 Financial Charges 17,557,660 22,964,482 (5,406,822) (23.54) (15,395,98 6) (40.14) Profit before taxation 186,872,738 152,359,158 34,513,580 22.65 44,212,892 40.88 Taxation 54,532,742 44,009,003 10,523,739 23.91 9,287,946 26.75 Profit of the year 132,339,996 108,350,155 23,989,841 22.14 34,924,946 47.57 Interpretation and Recommendation on Trend Analysis of Income Statement: As per the trend analysis by comparing the trend percentage between 2013 and 2012, Mitchell’s net income has decreased by twice throughout year, which creates alarming situation for the firm, and significant drop in its profitability.
  • 10. 9 Trend Percentage Balance sheet analysis 2013 2012 Assets $ change Trend % $ change Trend % Non-current assets Property, Plant and Equipments 393,166,181 364,711,648 28454533 7.80 41282826 12.76 Intangible assets 1,077,596 1,285,370 (207774) (16.16) (321342) (20.00) Biological assets 9,573,000 9,505,667 67333 0.71 2372667 33.26 Long term Receivables 750,000 _ 750000 Total Non Current Assets 404,566,777 375,502,685 29,064,092 7.74 43,334,151 13.05 Current Assets Stores and spares 15,026,848 12,491,433 2535415 20.30 3197531 34.40 Stock in trade 327,371,490 342,532,608 (15161118) (4.43) 30466632 9.76 Trade debt 56,548,807 59,816,430 (3267623) (5.46) (3428451) (5.42) Advances,Deposits, Prepayments and other receivables 84,008,075 11,387,684 72620391 637.71 (21680431) (65.56) Cash and Bank Balance 37,800,677 12,354,863 25445814 205.96 (1224908) (9.02) Total Current Assets 520,755,897 438,583,018 82172879 18.74 7330373 1.70 Total Assets 925,322,674 814,085,703 111236971 13.66 50664524 6.64 Equity and Liabilities Capital and Reserves Authorized Capital 200,000,000 100,000,000 100000000 100.00 0 0.00 Issued, Subscribed and Paid up capital 63,000,000 50,400,000 12600000 25.00 0 0.00 Reserves 9,635,878 9,635,878 0 0.00 0 0.00 Unappropriate Profit 454,469,244 372,529,248 81939996 22.00 73070155 24.40 Total 527,105,122 432,565,126 94539996 21.86 73070155 20.33 Non-current Liabilities Deferred Liabilities 111,235,470 93,012,838 18222632 19.59 13302778 16.69 Current Liabilities Short term running finances- Secured 97,102,844 140,987,776 (43884932) (31.13) (13806805) (8.92) Creditors, accrued and other liabilities 188,394,095 146,322,898 42071197 28.75 (20211010) (12.14) Accrued finance cost on short term finances 1,485,143 1,197,065 288078 24.07 (1690594) (58.55)
  • 11. 10 Total Current Liabilities 286,982,082 288,507,739 (1525657) (0.53) (35708409) (11.01) Total Liabilities & Shareholder Equity 925,322,674 814,085,703 111236971 13.66 50664524 6.64 Interpretation and Recommendation on Trend Analysis of Balance Sheet: Mitchell’s balance sheet trend analysis indicates the increase in Equity and Current Assets, which shows quite good position and reliability of the company. 2. Common Size Analysis Common Size Analysis is a company financial statement that displays all items as percentages of a common base figure. This type of financial statement allows for easy analysis between companies or between time periods of a company. Formatting financial statements in this way reduces the bias that can occur when analyzing companies of differing sizes. It also allows for the analysis of a company over various time periods, revealing, for example, what percentage of sales is cost of goods sold and how that value has changed over time. Common Size Balance Sheet: A common size balance sheet expresses each item on the balance sheet as a percentage of total assets. Common Size Income Statement: A common size income statement expresses each income statement category as a percentage of total sales revenues. Mitchell’s Common Size Analysis COMMON SIZE Income Statement Analysis 2013 2012 Net % 2013 Net % 2012 Net Sales 2,084,261,537 1,884,503,125 100 100 Cost of Sales 1,546,820,121 1,421,735,606 74.21 75.44 Gross Profit 537,441,416 462,767,519 25.79 24.56 Administrative Expense 248,456,191 206,795,747 3.98 4.49 Distribution and marketing Expense 82,867,912 84,567,766 11.92 10.97 Other operating expense 14,221,178 12,104,042 0.68 0.64 Other operating income 12,534,263 16,023,676 0.60 0.85 Profit from operation 204,430,398 175,323,640 9.81 9.30 Finance cost 17,557,660 22,964,482 0.84 1.22 Profit before taxation 186,872,738 152,359,158 8.97 8.08 Taxation 54,532,742 44,009,003 2.62 2.34 Profit of the year 132,339,996 108,350,155 6.35 5.75
  • 12. 11 Interpretation and Recommendation on Common-Size Income Statement Analysis: The net income of Mitchell’s is increase by 1% as per common size financial analysis by decrease in 1% of gross profit and some changes in expenses including increase in administrative expense and taxation and, which is not beneficial for the firm. COMMON SIZE Balance sheet analysis 2013 2012 Net % 2013 Net % 2012 Non-current assets Property, Plant and Equipments 393,166,181 12,491,433 42.48 44.80 Intangible Assets 1,077,596 1,285,370 0.11 0.15 Biological Assets 9,573,000 9,505,667 1.03 1.16 Long term recievables 750,000 _ 0.08 0 404,566,777 375,502,685 43.72 46.12 Current Assets Stores and spares and loose tools 15,026,848 12,491,433 1.62 1.53 Stock in trade 327,371,490 342,532,608 35.37 42.07 Trade debt 56,548,807 59,816,430 6.11 7.34 Advance, deposits, prepayments and other receivables 84,008,075 11,387,684 9.07 1.39 Cash and bank balances 37,800,677 12,354,863 4.08 1.51 520,755,897 438,583,018 56.27 53.87 Total Assets 925,322,674 814,085,703 100 100 Capital and Reserves Authorized Capital 200000000 100000000 21.61 12.28 Issued, subscribed and Paid up Capital 63000000 50400000 6.80 6.19 Reserves 9,635,878 9,635,878 1.041 1.18 Unappropriate Profit 454,469,244 372,529,248 49.11 45.76 527,105,122 432,565,126 56.96 53.13 Non-current Liabilities Deferred liabilities 111,235,470 93,012,838 12.02 11.42 Current Liabilities
  • 13. 12 Short term running finances-Secured 97,102,844 140,987,776 10.49 17.31 Creditors, accrued and other liabilities 188,394,095 146,322,898 20.35 17.97 Accrued finance cost on short term finances 1,485,143 1,197,065 0.16 0.14 Total Liabilities 286,982,082 288,507,739 31.01 35.4 Total Liabilities & Shareholder Equity 925,322,674 814,085,703 100 100 Interpretation and Recommendation on Common-Size Income Statement Analysis: As per common size of the year 2013 with the comparison of the year 2012 the current assets increased up to 3% from 56.28% to 53.87% and liabilities also decreased by 4% which is good signal for the company. The change in liabilities is 4 times more than change in assets, so Mitchell’s is in stable position. 3. Ratio Analysis Types of Ratio There are four main types of ratios, which use to analyze financial performance of a company. 1. Liquidity Ratio 2. Efficiency Ratio/ Operating Ratio 3. Solvency Ratio 4. Profitability Ratio
  • 14. 13 Mitchell’s Ratio Analysis 2013 FORMULA CALCULATI ON RATIO RATIO RECOMMENDATION Liquidity Ratios 2013 2012 1. Current Ratio Current Assets / Current Liabilities 520755897/ 286982082 1.81 1.52 Current Ratio shows the financial strength of the company. It measures the short-term debt paying ability. There is 1.81 in current assets to pay Rs. 1 in current liabilities, which are good enough. 2. L Quick Ratio Quick Assets/ Current Liabilities *Quick Assets= Cash+ Receivables +Trade Debt 178357559 / 286982082 *Q.A= 37800677+840 08075+565488 07 0.62 0.28 The quick ratio tests whether a business can meet its obligations even if adverse conditions occur. There is 0.62 in quick assets to pay Rs. 1 in current liabilities; quick ratios between 0.5 and 1 are consider satisfactory. 3. Cash Ratio Cash / Current Liabilities 37800677 / 286982082 0.13 0.042 Cash ratio measure the immediate amount of cash available to satisfy short-term liabilities. In general 0.5:1 or higher is preferred so cash ratio i.e. 0.13 is very good in firm and have to maintain its cash ratio.
  • 15. 14 Activity/ Operating Ratios 4. Inventory Turnover COGS / Inventory 1546820121/ 327371490 4.72 4.15 Inventory turnover 4.75 * indicates that how quickly inventory sells. 5. No. of days to sell Inventory 365 / Inventory Turnover 365 / 4.72 77 88 It indicates that in 77 days inventory sells and shows good turnover of firm’s inventory. 6. Receivabl e Turnover Sales / Average Receivable 2084261537/ 58945013 35.35 30.71 The ratio is used to calculate the firm’s debt receivables for its credit sales. However, ratio indicates 35.35 times firm collect receivables. 7. No. of days in Receivabl e 365 / Receivable Turnover 365/35.35 10 12 It indicates that in 10 days collecting receivables and shows very good turnover of firm. 8. Payable Turnover Purchases / Average Payable 1546820121/ 188394483 8.21 9.71 Ratio 8.21 times shows how quickly pay its debt to their suppliers. 9. No. of days in Payable 365 / Payable Turnover 365/8.21 44 38 It takes 44 days to pay debt to the firm’s suppliers. 10. Cash Conversio n Cycle No. of days in receivable + No. of days in Inventory – No. of days in Payable 10+77-44 43 62 The 43 days is a metric that expresses the length of time, in days, that it takes for a company to convert resource inputs into cash flows. 11. Fixed Asset Turnover Net Sales / Avrg. Fixed Assets 2084261537 / 390034731 5.34 5.32 It measures a company’s ability to generate net sales from fixed-asset investment. Fixed asset turnover 5.34 times shows that company has been more effective in using the investment in fixed-assets to generate revenues.
  • 16. 15 12. Total Asset Turnover Net Sales / Average Total Assets 2084261537/ 925322674 2.25 2.31 It measures a company’s ability to generate net sales from asset investment. 2.25 times shows that company has been use its assets to quite efficiently generate sale Solvency Ratios 13. Financial Leverage Ratio or Debt to equity Ratio Total Debt / S.H.E 398217552/ 527105122 0.75 0.88 It indicates the proportion of equity and debt the company is using to finance its assets. 14. Equity Ratio Total S.H.E / Total Assets 527105122/ 925322674 0.57 0.53 It measure how much shareholders would receive in the event of company-wide liquidation. 0.57 indicates the average position of ratio shareholder may receive. 15. Debt Ratio Total Liabilities / Total Assets 398217552 / 925322674 0.43 0.46 It indicates the proportion of debt a company has relative to its assets. Debt ratio is less than 1 i.e. 0.43 shows company has more assets than debt. 16. Interest Coverage Ratio Operating Income / Interest Charges 204430398/ 17557660 11.64 7.63 Interest Coverage Ratio is the indicator of company’s ability to meet its interest payment obligations. Mitchell’s is effectively able to meet its interest payment obligation by the ratio of 11.64 Investment Ratios 17. Earnings Per Share (E.P.S.) Net income/ Number of shares outstanding 132339996/ 6300000 21.01 17.20 The portion of a company’s profit allocated to each outstanding share of common stock. Mitchell’s has Rs. E.P.S. of 21.01 18. Price – Earnings Ratio Market price per share / E.P.S 500 / 21.01 23.8 20.93 Price earnings ratio is the measure of investor’s expectations about the company’s future prospects. Mitchell’s p/e ratio explains that an investor is willing to pay Rs.23.8 for Rs.1 of current earnings.
  • 17. 16 19. Price to book ratio Common S.H.E/ No. of shares outstanding 527,105,122/ 6300000 83.66 85.82 Book value per share is the recorded value of net assets underlying each share of common stock. 20. Dividend Yield Dividend per share / Market price per share 7.50 / 500 0.015 0.020 Dividend expressed as a rate of return on the market price of the stock i.e. 0.015. Profitability Ratios 21. Return on asset Net Income / Total Assets)*100 (132339996 / 925322674)*100 14.3 13.3 ROA indicates that how profitable company’s assets are generating profit. Mitchell’s 14.3% get return from its assets. 22. Return on equity or Return on net worth (Net Income / S.H.E.)*100 (132339996 / 527105122)*100 25.1 25.0 ROE indicates company’s profitability by measuring how much profit generated with the money invested by common stock owners. Mitchell’s generated about 25.0% of profit as per S.H.E. 23. Return on sales or Net profit margin (Net Income / Net Sales)*100 (132339996 / 2084261537)*10 0 6.3 5.7 The indicator of management’s ability to control cost. Mitchell’s has 6.3% profit margin and that is good enough. 24. Gross Margin (Gross Profit / Net Sales)*100 (537441416 / 2084261537)*10 0 25.7 24.5 It shows the measure of the profitability of the company’s product. 25. Operating Margin (Operating Income / Net Sales)*100 (204430398/ 2084261537)*10 0 9.80 9.30 It indicates the measure of the profitability from operating profit, which is 9.80% of Mitchell’s. 26. Earnings Pre Tax (Pre Tax Profit / Net Sales)*100 (186872738/ 2084261537)*10 0 8.96 8.00 The higher the pre-tax profit margin, the more profitable the company and ratio shows 8.96 with good indicator.  As the performance evaluated by different ratios, it is shown that Mitchells Company is performing well in term of their own financing and borrowed capital and utilizing enough to generate Profits from it. Furthermore, investors are also willing to invest in the business to earn maximum output.
  • 18. 17 4. Food Industry 2013 Comparison: No. Ratios Mitchell’s Fruit Farms National Foods Interpretation 2013 2013 1. Current Ratio 1.81 1.28 Mitchell’s has greater current ratio than National Foods; it means Mitchell’s can easily pay its shorts term debt. 2. Quick Ratio 0.62 0.50 Both company is in good position to meet adverse situation if occurs. 3. Cash Ratio 0.13 (0.33) Mitchell’s can easily pay its immediate cash amount for short term liabilities where as National foods have a negative amount and not able to meet its short term liabilities. 4. No. of days to sell inventory 77 113 Mitchell’s take less days to sell its inventory as compared to National Foods. 5. No. of days to receive 10 20 Its shows that Mitchell’s can quickly recover its receivables than National Foods. 6. Payable turnover 44 17 It shows that National Foods efficiently pay their debts to their supplier, whereas Mitchell’s takes more days to pay to their suppliers. 7. Cash Conversion cycle 43 116 National Foods resources take more than to convert in cash form whereas Mitchell’s takes less. 8. Total Asset Turnover 2.25 2.31 Both companies are efficiently using their assets to generate sales.
  • 19. 18 9. Debt to Equity 0.75 1.54 Shows the percentage to owner’s investment into the business and remaining shows the debt portion which company has borrowed. 10. Equity Ratio 0.57 0.39 Higher ratio shows that more investors are willing to invest in business and firm is less risky to lend loans. 11. Debt Ratio 0.43 0.60 It shows that National Foods are using more debts to acquire assets where as Mitchell’s uses less debt. 12. Interest Coverage Ratio 11.64 14.08 Both companies can easily pay interest expenses on debt which they have borrowed. National Foods has higher ratio. 13. Earning Per Share 21.01 13.01 Mitchell’s Earning per share is greater than National Foods and it is a part of Company’s income. 14. Price Earning Ratio 23.8 27.72 It shows that investors of National foods are paying higher amount than Mitchell’s investors. 15. Dividend Yield Ratio 0.015 2.77 National Foods are getting more dividends than Mitchell’s on each stock. 16. Return on Assets 14.3 15.84 National Foods are generating more than Mitchell’s to generate profit. 17. Return on Equity 25.1 43.96 Similarly, National Foods is generating more profit on its equity financing than Mitchell’s. 18. Net Profit Margin 6.3 7.88 A national food has higher return on each sale of inventory than Mitchell’s. 19. Operating Margin 9.80 12.33 National Foods has higher operating margin
  • 20. 19 which is good sign. 20. Gross Profit Margin 25.7 34.61 National Food has high profit margin than Mitchell’s. 5. Mitchell’s Balance Sheet Forecasting: Balance sheet analysis Amount Change % Change Forecasting 2014 Forecasting 2015 Assets Non-current assets Property, Plant and Equipments 28454533 7.80 423840715.6 456908454.7 Intangible assets (207774) (16.16) 903407.6874 757376.0943 Biological assets 67333 0.71 9640809.951 9709100.23 Long term Receivables 750000 750000 750000 Total Non Current Assets 29,064,092 7.74 435880444 469617804.1 Current Assets Stores and spares 2535415 20.30 18076882.04 21745988.53 Stock in trade (15161118) (4.43) 312881430.7 299032727.9 Trade debt (3267623) (5.46) 53459686.13 50539316.26 Advances,Deposits, Prepayments and other receivables 72620391 637.71 619735906.4 4571853285 Cash and Bank Balance 25445814 205.96 115654150.2 353852987 Total Current Assets 82172879 18.74 618324680 734173942.4 Total Assets 111236971 13.66 1051759106 1195471858 Equity and Liabilities Capital and Reserves Authorized Capital 100000000 100.00 400000000 800000000 Issued, Subscribed and Paid up capital 12600000 25.00 78750000 98437500 Reserves 0 0.00 9635878 9635878 Unappropriate Profit 81939996 22.00 554432423.4 676383091.1 Total 94539996 21.86 642307465.3 782688049.7 Non-current Liabilities Deferred Liabilities 18222632 19.59 133028193.2 159090442.9
  • 21. 20 Current Liabilities Short term running finances-Secured (43884932) (31.13) 66877871.12 46060954.15 Creditors, accrued and other liabilities 42071197 28.75 242561728.3 312303801.5 Accrued finance cost on short term finances 288078 24.07 1842548.007 2285963.816 Total Current Liabilities (1525657) (0.53) 285464492.8 283954928.8 Total Liabilities & Shareholder Equity 111236971 13.66 1051759106 1195471858 6. Mitchell’s Income Statement Forecasting: Income Statement Amount Change % Change Forecasting 2014 Forecasting 2015 Net Sales 199,758,412 10.60 2305194455 2549546390 Cost of Sales 125,084,515 8.80 1682909591 1830972233 Gross Profit 74,673,897 16.14 624164972.2 724882565.7 Administrative Expense (1,699,854) (2.01) 81202225.91 79570020.93 Distribution and marketing Expense 41,660,444 20.15 298509421.7 358646224.4 Other operating expense 2,117,136 17.49 16708625.41 19631155.95 Other operating income (3,489,413) (21.78) 9804725.767 7669589.138 Profit from operation 29,106,758 16.60 238369381.5 277942823.5 Finance cost (5,406,822) (23.54) 13423835.32 10263289.92 Profit before taxation 34,513,580 22.65 229204602.2 281125809.2 Taxation 10,523,739 23.91 67572990.69 83731514.38 Profit of the year 23,989,841 22.14 161641435 197430514.7
  • 22. 21 References:  Mitchell’s_Annual_Report_2013.  Books:  Accounting The Basis for Business Decisions by Meigs&Meigs 9th Edition  Accounting The Basis for Business Decisions by Meigs Williams HakaBettner 11th Edition  Financial Reporting & Analysis by Charles H. Gibson 12th Edition  Analysis and use of Financial Statements by G.I.White, A.C.Sondhi, Dov Fried 3rd Edition  https://www.zionsbank.com/pdfs/biz_resources_book-6.pdf  http://www.investopedia.com/terms/c/commonsizefinancialstatement.asp  http://www.readyratios.com/reference/analysis/trend_analysis.html  http://www.cliffsnotes.com/more-subjects/accounting/accounting-principles-ii/financial- statement-analysis/trend-analysis