Exide Pakistan

limited
Five Year Financial Analysis

APRIL 5

Analysis by: ZIA UDDIN

Management Science 7th Semester

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 Contents
1) Introduction 03
2) Five Year Statements 04
3) Analysis and Results 07
4) Conclusion 13

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 Introduction
Company:
EXIDE Pakistan Limited, the company was incorporated in Pakistan in 1953 as a
private limited company in association with Chloride Group PLC of United
Kingdom. Chloride Group PLC at that time had its associates in 35 countries of
the world and was supported by Chloride Technical for establishing its
operations. The principal business operation of the company is manufacturing
batteries, chemicals and acid.

Project:
I am student of finance at S.B.B.U Sheringal. For academic purpose, I am
analyzing five year financial periods of Excide Pakistan Limited. Data is collected
from the annual reports of targeted company. This is internal analysis and I am
not focusing on market environment, political situation etc. The purpose of this
analysis is to find financial position and profitability of the company.

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 Five Year Statements
Balance Sheet
balance sheet Excide.inc
PKR(000) 2013 2014 2015 2016 2017
CURRENT
ASSETS
Spares 73,136 93,039 111,072 127,418 106,962
Stock-in-trade 1,605,155 2,355,195 2,396,343 2,770,081 3,866,881
Trade debts 286,504 602,809 1,335,269 2,510,293 2,331,845
Loans and
advances 20,347 25,969 41,406 26,629 30,678
other
receivables 87,711 48,969 31,838 34,144 44,312
Taxation recoverable 102,600 400,259 515,207 520,599 498,644
Cash and bank balances 582,762 1,266,552 1,673,231 399,357 1,017,896
Total 2,758,215 4,792,792 6,104,366 6,388,521 7,897,218
fixed asset
Property, plant and
equipment 1,039,059 1,249,709 1,313,152 1,355,372 1,442,525
Long-term investment 224 224 224 224 224
Long-term
loans 1,451 1,165 1,082 808 844
Long-term
deposits 18,703 25,520 33,389 36,919 34,738
Total 1,059,437 1,276,618 1,347,847 1,393,323 1,478,331
Total Assets 3,817,652 6,069,410 7,452,213 7,781,844 9,375,549
liabilities and owner
equity
CURRENT
LIABILITIES
Trade and other payables 960,478 1,193,062 1,177,568 1,596,786 1,991,805
Accrued profit 6,259 29,094 66,376 31,954 32,638
Short-term borrowings 451,748 2,080,257 3,068,701 2,569,132 3,117,456
Total 1,418,485 3,302,413 4,312,645 4,197,872 5,141,899
long term
libilities
Deferred tax liability - net 59,030 65,579 47,043 7,201 3,097
Total libilities 1,477,515 3,367,992 4,359,688 4,205,073 5,144,996
SHARE CAPITAL &
RESERVES

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 SURPLUS ON REVALUATION OF
PROPERTY 429,937 419,948 410,481 515,702 503,232
paid-up share
capital 70,624 77,686 77,686 77,686 77,686
Capital reserve 259 259 259 259 259
Revenue
reserves 1,269,991 1,714,991 2,079,991 2,379,991 2,729,991
Reserve arising on amalgamation -
net 25,823 25,823 25,823 25,823 25,823
Unappropriated profit 543,503 462,711 498,285 577,310 893,562
Total owner Equity 2,340,137 2,701,418 3,092,525 3,576,771 4,230,553
libility + Owner Equity 3,817,652 6,069,410 7,452,213 7,781,844 9,375,549

Cash Flow Statement

Cash Flow
Statement
Excide.inc
PKR(000) 2013 2014 2015 2016 2017
CASH FLOWS FROM OPERATING
ACTIVITIES
Cash (used in) / generated from
operations 1047050 -6,950 175,335 -159,807 741,665
Financial charges paid -64,073 -73,588 -216,944 -208,586 -64,281
Taxes paid -189,168 -493,475 -289,762 -285,597 -300,182
Increase in long-term deposits 1,513 -6,817 -7,869 -3,530 2,181
Increase / (decrease) in long-
term loans 495 286 83 274 -36
Net
cash 795817 -580544 -339157 -657246 379347
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for capital
expenditure -115,241 -323,772 -191,617 -62,348 -236,967
Proceeds from disposal of operating
fixed assets 2622 1,943 6,636 2,776 5,380
Net
cash -112619 -321829 -184981 -59572 -231587
CASH FLOWS FROM FINANCING
ACTIVITIES
Loan repaid to director -28,000
Dividends paid -42,341 -42,346 -57,627 -57,487 -77,545
Net
cash -70341 -42346 -57627 -57487 -77545
Net (decrease) / increase in cash and cash
equivalents 612857 -944719 -581765 -774305 70215
Cash and cash equivalents at the beginning of the
year -481,843 131,014 -813,705 -1,395,470 -2,169,775
Cash and cash equivalents at the end of
the year 131,014 -813,705 -1,395,470 -2,169,775 -2,099,560

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 Income Statement
income statement Excide.inc
PKR(000)

2013 2014 2015 2016 2017

revenue 11,145,295 11,593,822 13,138,079 11,788,316 12,909,940
CGS 9,565,660 10,160,746 11,131,069 9,613,108 10,342,279
gross profit 1,579,635 1433076 2007010 2175208 2567661
Selling and
distribution
expenses -599,332 -576,757 -926,102 -1,127,643 -1,228,058
Administration
expenses -92,393 -97,231 -107,499 -107,389 -103,834
Other income 9,126 15,649 12,040 4,093 5,727
Other
operating
charges -105,257 -74,857 -113,742 -118,563 -115,596
EBIT 791,779 699,880 871,707 825,706 1,125,900
interest 38,327 96,423 254,226 174,164 64,965
EBT 753,452 603,457 617,481 651,542 1,060,935
Taxation - net 267,596 202,365 169,796 226,926 321,679
net profit 485,856 401,092 447,685 424,616 739,256
Earnings per
share (EPS) 62.54 51.63 57.63 54.66 95.16

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 Analysis
(Financial position)
Liquidity ratios
Current Ratio

Current Ratio(1.1)
2.5

1.5

0.5

0
2013 2014 2015 2016 2017

Result: from the figure 1.1 we found that, liquidity is high in 2013 but it is
dropped down in 2014 and follow the same path for next four years. This ratio
Show normal position of the company. But the company is still in position to
cover its current liabilities with their current assets.
Quick Cash Ratio

Quick Ratio 1.2

0.5

0.4

0.3

0.2

0.1

0
2013 2014 2015 2016 2017

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Result: This Ratio show the capacity of the company to cover its current liabilities with
cash. In 2013 company have Rs 0.4 cash for each Rs 1 current liability. This is alarming
position. But in 2016 it dropped to 0.1 which is extreme alarming position but after
2017 it is going in upward direction.

Solvency ratios
Debt to Asset Ratio

Debt to Asset 1.3

70%

60%

50%

40%

30%

20%

10%

0%
2013 2014 2015 2016 2017

Result: In 2013 40% assets were financed through debt. But it increased up to 2015.
In 2016 it dropped slightly. If we lock overall the debt ratio is very high. But still the
company position is normal and not alarming.
Debt to equity ratio Ratio

Debt to Equity 1.4

1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2013 2014 2015 2016 2017

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Result: from the figure we found that, debt is at lowest point against equity in 2013
but it is increased in 2014 and 2015. Onward the trend is again in down side. Company
need to reduce it continuously. Because the debt ratio is very high against equity.
Time interest earned ratio

Interest earned ratio 1.5

25

20

15

10

0
2013 2014 2015 2016 2017

Result: In 2013 company has earned interest expense 20 time. But a huge drop occur
in next three years. But in 2017 huge increase occur and reach up to 17. Company
need to maintain this trend in the coming years.

Profitability Ratios
Return on sale
Return on sale 1.6
7%

6%

5%

4%

3%

2%

1%

0%
2013 2014 2015 2016 2017

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Result: in 2013 return on sale is 4% which is very low. It mean that profit margin in the
company products is very low. There is decrease in the next year. After 2016 there is a
slight increase and reached to 6% in 2017, but this speed is very low. It may be because
of tough market competition.
Gross profit margin
Gross profit margin 1.7
25%

20%

15%

10%

5%

0%
2013 2014 2015 2016 2017

Result: From the figure 1.6 and 1.7 we found that the major cost in this company is
CGS. If we control it will increase the profit margin.

Sale
Sale 1.8
13,500,000

13,000,000

12,500,000

12,000,000

11,500,000

11,000,000

10,500,000

10,000,000
2013 2014 2015 2016 2017

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Result: From 2013 up to 2015 there is positive trend in sale, But a huge fall occur in
2016. But again the fall is recovered in 2017.
CGS

CGS 1.9
11,500,000

11,000,000

10,500,000

10,000,000

9,500,000

9,000,000

8,500,000
2013 2014 2015 2016 2017

Result: Here same trend is followed in CGS as shown in the above figure 1.8 in Sale.
It mean that CGS is closely interlinked with sales.
Expenses

Expences 2.1
1,600,000

1,400,000

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0
2013 2014 2015 2016 2017

Result: If we see the above two figure of sale and CGS, and see the graph of expenses
the trend is not the same as the above two. It mean that fixed expenses is increased
which is not closely linked with sale. In 2016 there is a huge fall in sale and CGS but
expense is increased so it is alarming position for the company.

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Return on asset
Return on Asset 2.2
74%

72%

70%

68%

66%

64%

62%

60%
2013 2014 2015 2016 2017

Result: If we see the figure 1.8 (sale) and 1.9 (CGS), same trend is followed here.
It mean that sale and CGS is two major factors in the profitability of this
company.

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 Conclusion
From the above analysis, I have found that the company is financially strong. I am
telling this statement based on internal analysis. This statement may be wrong if we
analyze the industry and economy. There is up and down in the company. But in 2017
overall figure is showing good. Company need to follow this trend in future.
If we see profitability this is good because in this industry there is tough competition
and purchasing power of Pakistani people is also low. On the other hand if we see
labor cost is also very low in Pakistan. Low labor cost and purchasing power cancel
each other. For increasing Profitability, company need to focus on CGS. Because if we
see the figures CGS is the key player.

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