The ratio analysis is Sitara Chemical Industries Ltd. The ratio analysis will hold 2011-2015. In the ratio analysis included the different ratio analysis firstly conduct the analysis is a balance sheet ratio analysis, income statement ratio analysis, cash ratio analysis, liquidity ratio analysis, long-term ratio analysis. All the detail of the company, with full company profile.

1. 1
Analysis of Financial Statements
Sitara Chemical Industries COMPANY LIMITED
Submitted To:
Mr. Salman Majeed
Submitted By:
SaniahSaleem 09 (Q) 7th
Semester
Department of Management Sciences
The Islamia University of Bahawalpur
Sub campus: Bahawalnagar

2. 2
Table of Content
Sr No. Contents Page
No.
1 Executive summery 3
2 History of Sitara Chemical Industry 4
3 Introduction of Sitara Chemical Company 5
4 Vision and mission 6
5 Product of Company 7
6 Analysis of Balance Sheet 8
8 Analysis of Income Statement 19
9 Ratio Analysis 26
10 Liquidity Analysis 27
11 Activity Analysis 31
12 Lon Term Analysis 34
13 Profitability Analysis 36
17 Qualitative Analysis 38
19 Conclusion and Suggestion 40
20 Annexure 41

3. 3
Executive summery
Summery
Sitara Chemical Industries Limited, Its product line includes Caustic Soda solid,
sodium hypochlorite, caustic soda liquid, hydrochloric acid, liquid chlorine, Specialty
Chemical, Fertilizer polyester Cotton.
This is manufacturing company, it’s private limited company, the division of the
company is chemical division. It’s a textile division, 343 employees are working
there. 17 major product the sub product is three.
We done the work to find the ratios Balance sheet ratio analysis, Income statement
ratio analysis, or complete ratio analysis in which have a major four ratio analysis.
We are analysis the SWOT analysis and analysis some major weakness and threat.
In the last we are done suggestion of the company.

4. 4
History of Sitara Chemical Industry
History
Sitara chemical industry limited, a unit of Sitara group founded by Haji Abdul
Ghafoor (late) and Haji Bashir Ahmed, was established in 1981.
SCIL began producing caustic soda in 1985, initially at a rate of 30 MT per day. The
plant‘s production capacity was gradually increased over the years to current level of
400MT per day .SCIL produces caustic soda, liquid chlorine and allied products at a
chemical complex, situated at 32Km Faisalabad sheik hupura road, Faisalabad.
Sitara chemical industry limited is being headed by the honorable Mian Muhammad
Adrees as a Chief Executive Officer. SCIL believes in demonstrating its abilities to
consistently provide products that meet industrial and consumer requirements.
Sitara chemical industry being the largest producer of chlor-alkali products in
Pakistan is a reference in employing the world’s latest technology at all times.
Sitara Chemical Industries Limited (SCIL) is committed to continual improvement of
its environmental management system (EMS) by adoption of appropriate pollution
prevention measures and complying with all relevant environmental legislation/
regulations through training, team work and procedures as implemented from time to
time.

5. 5
Introduction of Sitara Chemical Company
Introduction
Sitara Company Industry Limited was fused in 1981 and started delivering scathing
pop in 1985, at first at a rate of 30 metric tons Caustic a day. The plant's ability was
bit by bit expanded over the years to the current level of 610 metric tons a day. In
option, different by-item offices have been added and extended occasionally to adapt
to developing interest. The Organization went into Textile Spinning Business in 1995.
Its claim to fame chemicals and fare division was built up in 2001 and agriculture
chemicals division in 2003.
Sitara Chemical Industries Limited (SCIL) is focused on persistent change of its
natural administration framework (EMS) by the reception of suitable contamination
counteractive action measures and conforming to all important ecological
enactment/directions through preparing, cooperation and methodology as actualized
every once in a while.

6. 6
Vision and mission
Vision
Strive to develop and employ innovative technological
Solutions to add value to businesses with a progressive and proactive approach.
Mission
Continuing growth and diversification for the bottom
Line results with risks well contained.

7. 7
Product of Company
Products
1. Basic Chemicals
2. Specialty Chemicals
3. Gases
Names of the products.
Basic Chemicals:
 Ammonium Chloride
 Bleaching Powder
 Caustic Soda Flakes
 Caustic Soda Liquid (32-50 %)
 Caustic Soda Solid
 Hydrated Lime
 Hydrochloric Acid
 Liquid Chlorine
 Sodium Hypochlorite
Specialty Chemicals:
 Aluminium Sulphate
 Calcium Chloride Dihydrate
 Copper (I) Chloride
 Ferric Chloride
 Magnesium Carbonate
 Nickel Chloride Hexahydrate
 Calcium Chloride (Prills)
Gases
 Carbon Dioxide

8. 8
BALANCE SHEET
ANALYSIS

9. 9
Sitara Chemical COMPANY LIMITED
ANALYSIS OF BALANCE SHEET
AS ON DECEMBER, 2011-2015
Current Assets:
Cashand Bank Balance:
Years 2011 2012 2013 2014 2015
Cash and Bank Balance 140,776,990 7 9,861,668 279,534,490 436,767,468 256,977,410
Vertical Analysis 7% 3% 9% 12% 6%
Interpretation:
For past five years we can without much of a stretch watch that the adjust of money is
diminishing which demonstrates the organization's best administration of money
likewise convey that organization never held sit still money (better money
administration).
Trade Debts:
Years 2011 2012 2013 2014 2015
Trade Debts 512,397,911 796,202,867 936,929,485 1,262,557,632 1,187,078,233
Vertical Analysis 22% 29% 31% 35% 27%
Interpretation:
Exchange obligations are expanded in 2014 which implies our credit
deals is expanding yet next three years our exchange obligations were
abatement on the grounds that our normal gathering period is diminishing
and we fix our credit deal approach.

10. 10
Deposits and Prepayment:
Years 2011 2012 2013 2014 2015
Deposit & prepayment 7,036,816 6 ,680,502 9,612,725 8,567,010 7,777,958
Vertical Analysis 30% 0.2% 32% 24% 17%
Interpretation:
In the first year company paid the high amount to the supplier and stack holders in the
advances. In 2012 the least amount company paid to the supplier and stack holders in
the advanced. The last three year the average amount paid but the last yea company
will again start to maintain it.
Loans and Advances:
Years 2011 2012 2013 2014 2015
Loans and Advances
311,576,542 4 37,603,208 255,915,080 413,258,969 1,658,999,791
Vertical Analysis 14% 16.1 8.5% 11.4% 37%
Interpretation:
Because of the better position of the organization from the year, 2015 and increment
in deal and net benefit organization can give here and now advance and advances to
the representatives and different providers.

11. 11
Stock in Trade:
Interpretation:
Stock in public expos that its sum is expanded in 2011 because of completed great.
Organization can held vast sum as completed products yet in next two years 2012 and
2013 it is ordinary yet in 2015 organization held a slightest load of complete
merchandise.
Stores and Spares:
Interpretation:
Under this heading as expanding pattern demonstrates that organization holding free
instruments and day by day utilize oils and oils as creation expanded with the goal
that organization need to hold such things in adequate amount.
Others Receivables:
Years 2011 2012 2013 2014 2015
Stock in Trade
885,083,340 9 02,720,830 1,010,809,125 881,710,696 717,460,100
Vertical Analysis 39% 33% 34% 24% 16%
Years 2011 2012 2013 2014 2015
Stores and Spares
279,947,941 3 66,962,117 336,360,277 401,165,384 380,378,519
Vertical Analysis 12% 13.5% 11% 11% 8.5%

12. 12
Interpretation:
From year 2011 and 2014 different receivables like receivables from providers and
workers was diminishing which indicates organization better gathering administration
however it again expanded in 2013 yet in the time of 2015 the receivables again
diminishing. From the year 2011-2015 the proportion is not up to 1%.
Total Current Assets:
Interpretation:
The general position of the present resources demonstrates that there is having
diminished in 2012 and 2015 however again organization's aggregate streams
expanded from 2011 and 2013 because of consideration of Deposits and Prepayments,
Loans and Advances. Again 2014 will expanded in the high sum.
Non-current Assets:
Long Term Investments:
Years 2011 2012 2013 2014 2015
Others Receivables
7,773,380 9 ,079,166 16,599,019 5,901,655 11,726,462
Vertical Analysis 0.3% 0.4% 0.6% 0.1% 0.3%
Years 2011 2012 2013 2014 2015
Current Assets
2,293,235,870 2 ,715,289,032 3,008,549,505 3,601,755,335 4,446,080,341
Vertical Analysis 58% 6.3% 73% 87% 1%

13. 13
Interpretation:
From past year the condition of company is going to the same level.
Long Term Deposits, Prepayments:
Interpretation:
In first years 2011 organization put resources into long haul stores yet from 2012
organization changed its arrangement and began interests in here and now Deposits
and Prepayments.
Long Term Loans and Advances:
Years 2011 2012 2013 2014 2015
Long Term
Investments
96,480,134 67,607,937 63,431,202 63,431,202 99,192,142
Vertical Analysis 1% 1% 1% 1% 1%
Years 2011 2012 2013 2014 2015
Long Term
Deposits.
108,128,850 110,296,726 110,432,287 110,432,287 110,433,287
Vertical Analysis 1.3% 10% 11% 12% 11%
Years 2011 2012 2013 2014 2015
Long Term loan
and advances.
840,659,837 827,493,584 819,302,966 817,876,172 1,265,059,329

14. 14
Interpretation:
The organization began giving long haul credits and advances to the providers and
workers because of that reason organization's long haul advances and Advances are
expanded with the progression of time particularly in 2015 there is diminishing from
the year 2012-2014. In any case, it's keep up they don't down additional.
TotalNon- Current Assets:
Interpretation:
It the calculation of all above citation non- current assets. They are contributing in
making total assets. They are stable in last five years.
TotalAssets:
Interpretation:
Vertical Analysis
11% 8% 8% 8% 13%
Years 2011 2012 2013 2014 2015
Total Non-
Current Assets
8,001,028,528 10,165,371,942 9,950,437,686 9,784,655,301 9,997,843,214
Vertical Analysis
70% 79% 77% 73% 69%
Years 2011 2012 2013 2014 2015
Total Assets
11,472,264,398 12,880,660,974 12,958,987,191 13,386,410,636 14,443,923,555
Vertical Analysis 100% 100% 100% 100% 100%

15. 15
Add up to resources are the total of current resources non-current resource and settled
resources. As we see that there is no expansion and diminishing in these heads so our
aggregate resources are steady amid most recent five years.
Liabilities and Owners Equity:
Current Liabilities:
Current portion of long term financing:
Interpretation:
Organization developing its long haul obligations in initial four years and lessening its
liabilities in 2015. Organization again has a less add up to develop.
Trade and Other Payables:
Creditors:
Years 2011 2012 2013 2014 2015
Current portion of
long term financing
954,033,710 862,779,540 657,250,376 690,278,947 280,357,144
Vertical Analysis 24% 20% 16% 17% 7%

16. 16
Interpretation:
In initial two years organization pay to the leasers however in 2013company has more
risk towards the banks yet in 2011-2012 organization paid its obligation and decreases
the adjust.
TotalCurrent Liabilities:
Interpretation:
The general position of current liabilities demonstrates that in 2011 and 2012
organization expanded its present obligation however in 2013-2014 it's a stable and in
2015 the liabilities lessened.
TotalCurrent Liabilities:
Year 2011 2012 2013 2014 2015
Trade and Other
Payables
1,356,248,460 1,522,591,422 1,828,764,814 1,690,647,587 2,121,584,542
Vertical Analysis 34% 36% 44% 41% 49%
Year 2011 2012 2013 2014 2015
Total Current
Liabilities
11,472,264,398 12,880,660,974 12,958,987,191 13,386,410,636 14,443,923,555
Vertical Analysis 34% 33% 32% 32% 28%
Year 2011 2012 2013 2014 2015
Total Non- Current 2,824,812,215 2,732,005,569 2,047,311,132 1,776,277,772 1,952,385,658

17. 17
Interpretation:
The aggregate non-current liabilities diminishes because of reduction in getting credit
and finances from pariahs and running business with claim capital. That is the reason
add up to non-current liabilities are diminishing.
Owner’s EQUITY:
Reserves:
Interpretation:
In first years reserves increases due to general reserve and after that it is decreased
due to use of specific reserve.
Total Owner’s Equity:
Liabilities
Vertical Analysis 25% 21% 17% 13% 14%
Year 2011 2012 2013 2014 2015
Reserves
1,332,211,601 1,338,984,262 1,382,095,241 1,410,102,556 1,363,581,652
Vertical Analysis 35% 30% 26% 23% 20%
Year 2011 2012 2013 2014 2015
Total Owner’s 3,786,411,020 4,402,885,955 5,347,168,856 6,102,089,608 6,892,188,396

18. 18
Income STATEMENT
ANALYSIS
Interpretation:
The over-all position of liabilities and owner equity is stable over the years and the
liabilities and owner equity is continuously increased.
Sitara Chemical Indutries LIMITED
ANALYSIS OF INCOME STATEMENT
FOR THE YEAR ENDED
Net Sales:
Equity
Vertical Analysis
33% 34% 41% 46% 48%

19. 19
Interpretation:
A deal speaks to income from merchandise or administrations sold to clients. The firm
procure income from the offers of essential items. Deals are re more often than not
demonstrated net of any markdown, returns, and remittances. They stables from the
past 5 years.
Costof Manufacture:
Interpretation:
As raw material consumed, salaries and wages and fuel and power are increased cost
of goods manufactured because it is a function of all these items. So cost of goods
manufactured increased as sales increased.
Gross Profit:
Year 2011 2012 2013 2014 2015
Net Sales
6,216,879,954 7,463,926,517 8,099,794,812 8,807,482,117 8,722,879,814
Vertical Analysis 100% 100% 100% 100% 100%
Year 2011 2012 2013 2014 2015
Cost of Manufacture
4,883,737,562 5,233,665,895 5,681,733,225 6,487,777,545 7,165,278,592
Vertical Analysis 75% 72% 69% 76% 82%
Year 2011 2012 2013 2014 2015
Gross Profit
1,553,641,041 2,069,987,192 2,504,871,916 2,139,111,143 1,571,680,914

20. 20
Interpretation:
In the start of the two year 2011-2012 the Gross profit is not increasing. Time to time
the Gross profit will be increase.
Administration Expenses:
Interpretation:
Administrating expenses decreases because company focus on selling and after few
year Administrating expenses again increase.
TotalOperating Expenses:
Vertical Analysis 25% 28% 69% 76% 82%
Year 2011 2012 2013 2014 2015
Administration
Expenses
42,653,372 38,386,400 32,768,795 55,427,316 632,761,496
Vertical Analysis 4% 3% 5% 4% 5%
Year 2011 2012 2013 2014 2015
Total Operating
Expenses
42,088,096 88,450,365 98,157,980 97,891,659 82,637,992
Vertical Analysis

21. 21
Interpretation:
As selling and administrating expenses is decrease in the start after passing the year in
2013-2014 they increase and again decrease.
Finance cost:
Interpretation:
In the start 2011 the finance cost will increased after the time period they decreased
and 2015 they decrease more.
Profit before taxation:
0.64% 0.92% 1.15% 1.05% 0.94%
Year 2011 2012 2013 2014 2015
Finance Cost
1,078,065,020 1,124,322,227 1,161,649,775 1,048,725,239 1,091,999,443
Vertical Analysis
11% 9% 6% 5% 4%
Year 2011 2012 2013 2014 2015
Profit before taxation 518,229,393 984,051,365 1,375,990,936 1,145,813,220 1,112,442,967
Vertical Analysis
4% 13% 17% 13% 13%

22. 22
Interpretation:
Profit Before Taxation in the starting year 2011 they will decrease because they
paying the more tax after the year they stable and start increasing from the year 2013
they then again reduced but they stable.
Provisionfor taxation:
Interpretation:
Provision for taxation in the start they decrease because most of the fund are paid.
After the time spend these duties and fund will stable, the time which they stable from
the year 2012-2014 after the ended year 2014 they decrease.
Profit for the year:
Interpretation:
Year 2011 2012 2013 2014 2015
Provision for
taxation
90,238,072 295,569,418 338,867,640 284,639,086 126,011,653
Vertical Analysis 2% 4% 4% 3% 2%
Year 2011 2012 2013 2014 2015
Profit for the year
427,991,321 688,481,947 1,037,123,296 861,174,134 986,431,314
Vertical Analysis 7% 9% 13% 10% 12%

23. 23
RATIO ANALYSIS
In the start of the year 2011, this is the starting year that’s why profit is not more.
After the passage of the time they profit of the year is increase.

24. 24
Ratio Analysis
Ratio Analysis
Ratio analysis is a widely used tool of financial analysis. It is defined as the
systematic use of ratio to interpret the financial statements so that the strengths and
weaknesses of a firm, as well as its historical performance and current financial
condition, can be determined.
A single ratio in itself is meaningless because it does not furnish a complete picture. A
ratio becomes meaning full when compared with other standard and the ratio of the
other years. So the ratios of Packages limited have been calculated by me and I
compared it with the standards and the ratio of other years.
Purpose:
The purpose of ratio analysis depends upon the event for which the analysis is made.
The following paragraph briefly explains the purpose of ratio analysis:
‘Management’ would like to know the operational efficiency and would think of such
ratios as return on investment, turnover of fixed assets, net profit to sales etc.
While ‘Creditors’ would like to know the ability of the company to meet it current
obligations and, therefore, would think of current and liquid ratios, turnover of
receivables, coverage of interest by the level of earnings, etc. and on the other side,
‘Investors’ will be interested in such ratios as earnings per share, book value per share
and dividends per share etc.
Classification of Ratios:
Ratios may be classified in a number of ways keeping in view the particular purpose.
To achieve the above purposes effectively, ratios may be classified as;
 Liquidity ratio.
 Activity ratio
 Long term analysis
 Profitability ratio.

25. 25
Liquidity ratios
Liquidity ratios
The liquidity of a business firm is measured by its ability to satisfy its short-term
obligations as they come due. Liquidity refers to the solvency of the firm’s over all
financial position the case with which it can pay its bills.
Current Ratios
“Current ratio shows the liquidity position of the company. It shows how well the
company can meet its liquidity requirements and fulfills the cash demands of its
creditors”
Interpretation:
It shows a firm’s ability to cover its current liabilities with its current assets. The
current ratio of the Company is low according to the standard. It should be 2: 1 for a
medium size business. So management should take steps to improve the current ratio.
PRs. (000)
Current Ratio = Current Assets / Current Liabilities
2011 2012 2013 2014 2015
Current Assets 2293235 2715289 3008550 3601755 4446080
Current liabilities 3940420 4279703 4135006 4160634 4293654
Current ratio 0.58 0.63 0.73 0.87 1.04

26. 26
Quick Ratio:
“This ratio concentrates on the more liquid current assets-Cash, Marketable
Securities, and receivables- in relation to the current liabilities/ current obligations and
shows immediate solvency of the company.”
PRs. (000)
Quick Ratio = (Cash+MS+AR) / Current Liabilities
2011 2012 2013 2014 2015
(Cash+MS+AR) 297193 205120 458922 634496 469768
Current Liabilities 3940420 4279703 4135006 4160634 4293654
Quick Ratio 0.08 0.05 0.11 0.15 0.11
Interpretation:
It shows a firm’s ability to cover its current liabilities with its quick assets. The
current ratio of Industries is low according to the standard. It should be 1: 1 for a
medium size business. So management should take steps to improve the quick ratio.
CashRatio
PRs. (000)
Cash Ratio = Cash +MS / Current Liabilities
2011 2012 2013 2014 2015
Cash + MS 289420 196041 442323 628594 458042
Current Liabilities 3940420 4279703 4135006 4160634 4293654
Cash Ratio 0.07 0.05 0.11 0.15 0.11

27. 27
CashFlow from Operating Ratio
PRs. (000)
Cash flow from operating ratio = Cash flow from operation / Current
Liabilities
2011 2012 2013 2014 2015
Cash flow from operation
1,695,99
7
2,149,53
9
2,524,41
3
2,098,40
7
1,383,16
9
Current Liabilities 2239905 2849608 3750780 4477693 5314313
Cash flow from operating
ratio 0.76 0.75 0.67 0.47 0.26
Operating Cycle
PRs. (000)
Operating Cycle = AR in days + Inventory in days
2011 2012 2013 2014 2015
AR in days 29.67 38.40 41.64 51.61 48.99
Inventory in days 68.33 60.25 65.04 47.60 36.12
Operating Cycle 98.00 98.65 106.68 99.21 85.11
CashCycle
PRs. (000)
Cash Cycle= Operating Cycle - AP in days

28. 28
2011 2012 2013 2014 2015
Operating Cycle 98.00 98.65 106.68 99.21 85.11
AP in days 273.48 344.58 399.01 315.95 462.58
Cash Cycle -175.48 -245.93 -292.33 -216.75 -377.47
Work in Capital
PRs. (000)
Work in Capital = Current Assets - Current Liabilities
2011 2012 2013 2014 2015
Current Assets 2293236 2715289 3008550 3601755 4446080
Current Liabilities 3940420 4279703 4135006 4160634 4293654
Work in Capital -1647184 -1564414 -1126456 -558879 152426
Activity Analysis
Activity Analysis
Activity ratios can be used to assess the speed with which current accounts, inventory,
accounts receivable and accounts payable are converted into sales or cash.
Account Receivable Turnover

29. 29
PRs. (000)
AR Turnover = Net Sales / Avg. Trade (AR)
2011 2012 2013 2014 2015
Net Sales 6216880 7463927 8099795 8807482 8722880
Avg. Trade (AR) 512398 796203 936929 1262558 1187078
AR Turnover 12.13 9.37 8.65 6.98 7.35
Account Receivable in Days
PRs. (000)
AR in days = 360 / AR Turnover
2011 2012 2013 2014 2015
360 360 360 360 360 360
AR Turnover 12.13 9.37 8.65 6.98 7.35
AR in days 29.67 38.40 41.64 51.61 48.99
Inventory Turnover
This ratio establishes relationship between cost of sold during a given period and the
average amount of inventory held during that period. This ratio reveals the number of
times finished stock is turned over during a given accounting period.
In general, a high inventory turnover ratio is better than a low ratio. A high ratio
implies good inventory management.

30. 30
PRs. (000)
Inventory Turnover = CGS / Avg. Inventory
2011 2012 2013 2014 2015
CGS 4663239 5393939 5594923 6668371 7151199
Avg. Inventory 885083 902721 1010809 881711 717460
Inventory Turnover 5.27 5.98 5.54 7.56 9.97
Inte rpre tatio n:
This ratio tells us how many days, on average, before inventory is turned in to
accounts receivable through sales. Transforming the industry’s median inventory
turnover is 9.97.
Inventory Turnover in days
PRs. (000)
Inventory Turnover in days = 360 / Inventory Turnover
2011 2012 2013 2014 2015
360 360 360 360 360 360
Inventory Turnover 5.27 5.98 5.54 7.56 9.97
Inventory Turnover in days 68.33 60.25 65.04 47.60 36.12
Working Capital Turnover
PRs. (000)
Working Capital Turnover = Net Sales / Working Capital
2011 2012 2013 2014 2015
Net Sales 6216880 7463927 8099795 8807482 8722880
Working capital - - - -558879 152426

31. 31
1647184 1564414 1126456
Working Capital
Turnover -3.77 -4.77 -7.19 -15.76 57.23
Account Payables Turnover
PRs. (000)
AP Turnover = Purchases / Avg. AP
2011 2012 2013 2014 2015
Purchases 1785310 1590729 1649965 1926346 1651110
Avg. AP 1356248 1522591 1828765 1690648 2121585
AP Turnover 1.32 1.04 0.90 1.14 0.78
Account Payables Turnover in Days
PRs. (000)
AP Turnover in Days = 360 / AP Turnover
2011 2012 2013 2014 2015
360 360 360 360 360 360
AP Turnover 1.32 1.04 0.90 1.14 0.78
AP Turnover in Days 273.48 344.58 399.01 315.95 462.58
Long term analysis
Long term analysis
To cheek the firm long term debt paying capacity
 Income / Cash generating Point of view
 Going concern point of view
 Liquidity point of view
Income / Cashgenerating Point of view
Whether the project is able to liquidate the debt or self-liquidate.

32. 32
Time Interest Earned Ratio
The time interest earned ratio measures the ability to make contractual interest
payments
PRs. (000)
Time Interest Earned Ratio = EBIT / Interest Expense
2011 2012 2013 2014 2015
EBIT 1221723 1666922 1862820 1550765 1445685
Interest Expense 703494 682871 486829 404952 333242
Time Interest Earned Ratio 1.74 2.44 3.83 3.83 4.34
Inte rpre tatio n:
The higher the value of this ratio, the better able the firm is fulfill its interest
obligations.
Going Concern point of view
Debt Ratio
The debt ratio measures the proportion of total assets financed by the firm’s creditors.
PRs. (000)
Debt Ratio = Total Liabilities / Total Assets
2011 2012 2013 2014 2015
Total Liabilities 6765232 7011709 6182317 5936912 6246040

33. 33
Total Assets 11472264 12880661 12958987 13386411 14443924
Debt Ratio 0.59 0.54 0.48 0.44 0.43
Inte rpre tatio n:
This indicates the firm this year has financed 43 % of its assets with debts. The higher
this ratio, the more financial leverage the firm has.
Debt / Equity Ratio
The debt equity ratio indicates the relationship between the long-term funds provided
by creditors and those provided by the firm’s owners
PRs. (000)
Debt / Equity Ratio = Log term Debt / Capitalization
2011 2012 2013 2014 2015
Long Term Debt 1334776 734475 566071 858001
Capitalization 5596654 5737662 6081644 6668161 7750189
Debt / Equity Ratio 0.00 0.23 0.12 0.08 0.11
Inte rpre tatio n:
The standard debt equity ratio is 60:40. The lower debt equity ratio is preferable.

34. 34
Profitability Analysis
Profitability Analysis
A firm’s profitability can be assessed relative to sales, assets, and equity or share
value.
Gross Profit Margin
The gross profit margin measures the percentage of each sales dollar remaining after
the firm has paid for its goods. The higher the gross profit margin the better and the
lower the relative cost of merchandising sold and vice versa.
PRs. (000)
Gross Profit Margin =Gross Profit / Sale
2011 2012 2013 2014 2015
Gross Profit 1553641 2069987 2504872 2139111 1571681
Sale 6216880 7463927 8099795 8807482 8722880
Gross Profit Margin 24.99 27.73 30.93 24.29 18.02
Interpretation:
The CGS has decreased due to more efficient use of RM, less wastage of material.
Operating Profit Margin
It measures the percentage earned on each sales dollar before interest and taxes.
PRs. (000)
Operating Profit Margin = Operating Profit / Sale
2011 2012 2013 2014 2015
Operating Profit 1221723 1666922 1862820 1550765 1445685
Sale 6216880 7463927 8099795 8807482 8722880
Operating Profit Margin 19.65 22.33 23.00 17.61 16.57

35. 35
Net Profit Margin
It measures the percentage of each sales dollar remaining after all expenses, including
taxes, have deducted.
PRs. (000)
Net Profit Margin = Net Profit / Sale
2011 2012 2013 2014 2015
Net Profit 427991 688482 1037123 861174 986431
Sale 6216880 7463927 8099795 8807482 8722880
Net Profit Margin 6.88 9.22 12.80 9.78 11.31
Inte rpre tation:
In 2011 the company earn profit 6.8 % and 2015 the company earns profit 11.31%,
which is high.

36. 36
SWOT Analysis
SWOT Analysis

37. 37
Strength:
 Largest manufacture caustic soda.
 Largest Shareholder of the company
 Use the advance technology
 The good and efficient plant infrastructure
 Strong Management of the industry
 The strong brand name and strong image.
 Great financially sound
Weakness:
 Need Considerable Market to Sustain
 Lack of Operations in Abroad
 Relying on Permanent Customers
Opportunity:
 Increase Production Capacity
 Increase Product Line
 Taking Advantage of Geographic position
 Provide Online Customer Service Ordering System
Thereat:
 Strong competitors and new strategies of competitors.
 Economic Environment and new polices of every year and every five year.
 Energy Crises
 Threat of Stakeholders
 Unstable Law & Order Situation
Conclusion and Suggestion
Suggestion

38. 38
 For the Market Development, it is opportunity for them to export their product
in new markets.
 Sitara Chemical Industry must involve employees in decision making.
 Increase the Basic salary of its employees to increases their motivations.
 Avoid more credit Purchases.
 Control the Cost of product with the use of Advance Technology.
Conclusion:
 After the completion of ratio analysis, we have concluded that the Industry has
good will in market but this year some profitability ratios decreased and some
increased as compare to previous year plus E P S. It’s means that the company
has to take measures to maintain its position
 But still there is some room for improvement in compensation system, and
employment Planning.
Annexure
Sitara Chemical Industries Limited
Balance Sheet

39. 39
As on june 30, 2011-2015
Rs. (000)
2011 2012 2013 2014 2015
ASSETS
current
assets
Stores,
spare parts
and loose
tools
279,947,94
1
3
66,962,117
336,360,27
7
401,165,38
4
380,378,51
9
stock in
trade
885,083,34
0
9
02,720,830
1,010,809,1
25
881,710,69
6
717,460,10
0
Trade debts
512,397,91
1
7
96,202,867
936,929,48
5
1,262,557,6
32
1,187,078,2
33
Loans and
advances
311,576,54
2
4
37,603,208
255,915,08
0
413,258,96
9
1,658,999,7
91
Trade
deposits
and
prepaymen
ts 7,036,816 6 ,680,502 9,612,725 8,567,010 7,777,958
Other
receivables 7,773,380 9 ,079,166 16,599,019 5,901,655 11,726,462
Other
financial
assets
148,642,95
0
1
16,178,674
162,789,30
4
191,826,52
1
201,064,59
7
Cash and
bank
balances
140,776,99
0 7 9,861,668
279,534,49
0
436,767,46
8
256,977,41
0
Advance
sales tax 0 0 0 0 24,617,271
Total
Current
Assets
2,293,235,8
70
2
,715,289,03
2
3,008,549,5
05
3,601,755,3
35
4,446,080,3
41
Non-current
assets
Property,
plant and
equipment
5,378,904,0
86
6,339,937,3
35
6,068,941,9
31
5,765,295,5
02
5,790,535,7
75
Investment
property
1,576,855,6
21
2,820,036,3
60
2,868,379,3
00
3,004,815,3
78
2,716,463,1
81
Long term
investments 96,480,134 67,607,937 63,431,202 63,431,202 99,192,142
Long term 840,659,837 827,493,584 819,302,966 817,876,172 1,265,059,3

40. 40
loans and
advances
29
Long term
deposits 108,128,850 110,296,726 110,432,287 110,432,287 110,433,287
Intangible
Assests 0 0 19,950,000 17,955,000 16,159,500
Total
NON-
Current
Assets
8,001,028,5
28
10,165,371,
942
9,950,437,6
86
9,784,655,3
01
9,997,843,2
14
Non-
current
assets
classified
as held for
sale
1,178,000,0
00 0 0 0 0
3,471,235,8
70
0 0 0 0
Total
Assets
11,472,264,
398
12,880,660,
974
12,958,987,
191
13,386,410,
636
14,443,923,
555
EQUITY
AND
LIABILIT
IES
Equity
Share
capital 214,294,070 214,294,070 214,294,070 214,294,070 214,294,070
Reserves
1,332,211,6
01
1,338,984,2
62
1,382,095,2
41
1,410,102,5
56
1,363,581,6
52
Un-
appropriate
d profits
2,239,905,3
49
2,849,607,6
23
3,750,779,5
45
1,410,102,5
56
5,314,312,6
74
3,786,411,0
20
4,402,885,9
55
5,347,168,8
56
6,102,089,6
08
6,892,188,3
96
surplus
revaluation
of property,
plan &
Equipment
920,621,624
1,466,066,4
73
1,429,500,9
37
1,347,409,6
08
1,305,695,7
30
Current
liabilities
Trade and 1,356,248,4 1,522,591,4 1,828,764,8 1,690,647,5 2,121,584,5

41. 41
other
payables
60 22 14 87 42
Profit /
financial
charges
payable
120,376,568 92,938,164 70,245,987
1,690,647,5
87
55,225,614
Short term
borrowings
1,269,000,0
00
1,544,904,2
14
1,529,449,7
55
1,682,644,3
23
1,836,486,4
71
Current
portion of
long term
financing
954,033,710 862,779,540 657,250,376 690,278,947 280,357,144
Provision
for taxation
218,292,60
9
240,420,88
1 16,870,962 0 0
Sales tax
payable 22,468,192 16,068,756 32,424,372 36,596,986 0
3,940,419,5
39
4,279,702,9
77
4,135,006,2
66
4,160,633,6
48
4,293,653,7
71
Non-current
liabilities
Long term
financing
1,810,242,7
86
1,334,775,7
46
734,474,87
3
566,070,92
6
858,000,82
4
Long term
deposits 10,518,651 1 2,199,953 7,946,055 6,385,859 9,920,553
Deferred
liabilities
1,004,050,7
78
1
,385,029,87
0
1,304,890,2
04
1,203,820,9
87
1,084,464,2
81
2,824,812,2
15
2,732,005,5
69
2,047,311,1
32
1,776,277,7
72
1,952,385,6
58
24.6229699
5 21.2101349
15.7983884
2
13.2692610
5
13.5170035
4
Contingenci
es and
commitme
nts
Total
equity and
liabilities
11,472,264,
398
12,880,660,
974
12,958,987,
191
13,386,410,
636
14,443,923,
555

42. 42
Sitara Chemical Industries Limited
Income Statement
As on june 30, 2011-2015
Rs(000)
2011 2012 2013 2014 2015
Sales - net
6,216,879,9
54
7,463,926,5
17
8,099,794,8
12
8,807,482,1
17
8,722,879,8
14
Cost of good
sales
Raw material
consumed
1,673,402,2
52
1,428,802,0
63
1,679,007,0
02
2,034,133,6
44
1,827,288,0
40
Fuel & Power
2,260,610,8
37
2,791,620,3
01
2,880,940,6
64
3,242,839,8
16
4,049,773,1
97
Salaries &
wages
235,839,94
6
237,042,04
5
227,037,22
7
265,572,21
9
300,541,06
4
stores &
spare
138,385,61
4
156,410,51
9
279,109,74
6
283,001,42
9
400,615,76
5
Repair &
maintenace 70,736,851 48,923,184 27,425,710 47,344,556 44,256,132
vehicle
running &
maintaines 25,856,606 33,890,232 568,157 1,761,274 2,152,230
Travelling &
conveyance 19,096,172 26,794,940 25,083,301 26,717,274 25,095,007
Insurance 18,165,028 20,009,119 15,621,686 17,462,433 17,328,749
Depreciation
487,173,41
5
456,041,46
6
547,485,38
5
524,397,44
6
490,438,74
4
others 4,691,122 7,602.65 1,226,169 4,075,196 3,841,793
Amortization 0 0 1,050,000 1,995,000 1,795,500
4,933,957,8
43
5,207,136,5
21
5,684,555,0
47
6,449,300,2
87
7,163,126,2
21
work in
process
opening
stock 22,218,508 72,438,789 45,909,415 48,731,237 10,253,979
closing stock -72,438,789 -45,909,415 -48,731,237 -10,253,979 -8,101,608
-50,220,281 26,529,374 -2,821,822 38,477,258 2,152,371
cost of goods
manufacture
4,883,737,5
62
5,233,665,8
95
5,681,733,2
25
6,487,777,5
45
7,165,278,5
92
Finished
stock

43. 43
opening
stock
211,499,58
9
432,161,82
4
314,400,85
5
448,708,70
8
465,874,79
8
finished
goods
purchased 0 42,512,461 47,497,524
197,759,51
9 0
closing stock
-
432,161,82
4
-
314,400,85
5
-
448,708,70
8
-
465,874,79
8
-
479,954,49
0
-
220,662,23
5
160,273,43
0 -86,810,329
180,593,42
9 -14,079,692
4,663,075,3
27
5,393,939,3
25
5,594,922,8
96
6,668,370,9
74
7,151,198,9
00
163,586 0 0 0 0
cost of good
sale
4,663,238,9
13
5,393,939,3
25
5,594,922,8
96
6,668,370,9
74
7,151,198,9
00
Gross profit
1,553,641,0
41
2,069,987,1
92
2,504,871,9
16
2,139,111,1
43
1,571,680,9
14
Other operating income
income from
financial
assests 22,402,525 19,863,717 21,407,860 27,869,276 69,528,324
income from
other then
financial
assests 20,250,847 18,522,683 11,360,935 27,558,040
563,233,17
2
42,653,372 38,386,400 32,768,795 55,427,316
632,761,49
6
1,596,294,4
13
2,108,373,5
92
2,537,640,7
11
2,194,538,4
59
2,204,442,4
10
Distribution
cost
123,094,46
0
127,286,61
7
173,756,32
8
199,674,65
0
230,737,92
4
Administrati
on expenses
204,698,27
3
211,178,23
4
369,283,19
3
320,139,55
6
406,766,53
4
Depriciation 12,714,635
11,503,567.
00 30,406,685 29,643,610 29,929,070
depriciation
on
investment
property 544,010 489,609 440,648 3,330,090 6,114,502
Total
administratio
n expense
217,956,91
8
223,171,41
0
400,130,52
6
353,114,07
5
442,810,10
6
Other
operating
expenses 40,079,316 69,353,698 93,310,486 93,353,444 82,637,992
Impairment 2,008,780 7,072,302 0 0 0

44. 44
loss on
investment in
associated
company
loss on
disposal of
property,
plant &
equipment 0 12,024,365 4,847,494 4,538,215 0
total
operating
expense 42,088,096 88,450,365 98,157,980 97,891,659 82,637,992
Finance cost
long term
financing
475,459,34
7
327,196,02
7
210,132,74
1
123,150,47
2
102,281,61
4
short term
borrowing
226,360,91
4
348,422,67
8
272,543,26
7
278,730,12
9
228,928,64
7
Bank charge
&
commission 1,673,322 7,252,565 4,152,520 3,070,970 2,032,066
total
financing
cost
703,493,58
3
682,871,27
0
486,828,52
8
404,951,57
1
333,242,32
7
Share of loss/
(profit) of
associates -
net of tax
-8,568,037 2,542,565 2,776,413 -6,906,716 2,571,094
1,078,065,0
20
1,124,322,2
27
1,161,649,7
75
1,048,725,2
39
1,091,999,4
43
Profit before
taxation
518,229,39
3
984,051,36
5
1,375,990,9
36
1,145,813,2
20
1,112,442,9
67
Provision for
taxation 90,238,072
295,569,41
8
338,867,64
0
284,639,08
6
126,011,65
3
Profit for the
year
427,991,32
1
688,481,94
7
1,037,123,2
96
861,174,13
4
986,431,31
4
Sitara Chemical Industries Limited
Income Statement
As on june 30, 2011-2015
Rs(000)
2011 2012 2013 2014 2015
Sales - net 100 100 100 100 100
Cost of sales
75.0093125
1
72.2667795
9
69.0748719
7
75.7125689
9
81.9820867
9
Gross profit 24.99068749 27.73322041 30.92512803 24.28743101 18.01791321

45. 45
Other income
0.68608968
4
0.51429230
9
0.40456327
3 0.62932079
7.25404349
8
25.6767771
7
28.2475127
2
31.3296913
1 24.9167518 25.2719567
Distribution
cost
1.98000381
1
1.70535731
7
2.14519419
4
2.26710253
1
2.64520352
1
Administrative
expenses
3.50588912
1
2.99000009
6
4.94000817
7
4.00925111
5
5.07642103
8
Other
operating
expenses
0.64468537
7
0.92918516
6
1.15201049
1
1.05993339
3
0.94737052
2
Finance cost
11.3158624
3
9.14895488
9
6.01038099
5 4.59781315
3.82032464
2
Share of
(profit) / loss
of associates -
net of tax
-
0.137818923 0.034064711 0.034277572
-
0.078418734 0.029475289
17.58425966 14.80756218 14.28187143 12.01251892 12.51879501
Profit before
taxation 8.335843652 13.18409771 16.98797276 13.00954353 12.75316169
Provision for
taxation 1.451500957 3.959972239 4.183657091 3.231787272 1.444610675
Profit for the
year 6.884342695 9.224125471 12.80431567 9.77775626 11.30855102