GROUP MEMBER

M. Arshad Bashir
Ei17MBA087 1
Ghulam Murtaza
2 Ei17MBA065

Faisal Siddique
Ei17MBA059
3
GENERAL TYRE AND RUBBER
COMPANY OF PAKISTAN
LIMITED
INTRODUCTION
 The General Tyre and Rubber Company of Pakistan
Limited is a tyre manufacturing company based in Karachi
 owned by the Bibojee Group. The Company was established
by General Tyre International Corporation (GTIC) in 1963
at Landhi, Karachi on a 25-acre plot and commenced its
production in 1964 with a total capacity of only 120,000 
tyres per annum.

 GTIC sold 90% of their shares to the present owners M/s

Bibojee Services Ltd. in 1977 and retained 10% of the
ownership. In 1985, the Company completed a major
expansion, which took the capacity to 600,000 tyres
annually.
 CONT..
 Continental AG, Germany’s tyre manufacturer purchased
GTIC in 1987.
 The brand name “GENERAL” also belongs to 
Continental AG. Currently, the capacity of the Company
stands at 2.5 million tyres approximately. GTR has been and
still is one of the largest tyre manufacturer in Pakistan.

 Being a public listed Company; the current main sponsors of

the Company beside Bibojee Services are Pak Kuwait
Investment Company, National Institute of Technology and
Continental AG of Germany.
VISION
 To be the leader in tyre technology by building the
Company’s image through quality improvement,
competitive prices, customer’s satisfaction and meeting
social obligations.
MISSION
 To offer quality products at competitive prices to our
customers.

 Try to be the market leader by enhancing market share,

consistently improving efficiency and the quality of our
products.

 To improve performance in all operating areas, so that

profitability increases thereby ensuring growth for the
company and increasing return to the stakeholders.
 GENERAL TYRE AND RUBBER
COMPANY OF PAKISTAN LIMITED
ASSOCIATED COMPANIES
 ASKARI BANK LIMITED
 GHANDHARA INDUSTRIES LIMITED
 PRODUCT LINE
 PASSENGER CAR TYRES  TRACTOR TYRES

 LIGHT TRUCK TYRES  MOTORCYCLE TYRES

 TRUCK & BUS TYRES  RICKSHAW TYRES

2018-2019
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LIQUIDITY
EXCHANGE
ANALYSIS
RATIOS

PROFITABILITY SOLVENCY EFFICIENCY

ANALYSIS ANALYSIS ANALYSIS
 CURRENT  DIVIDEND COVER
 EARNING PER
RATIO SHARE
 INVENTORY  DIVIDEND PER
  DEBT EQUITY
 QUICK RATIO GROSS PROFIT TURNOVER SHARE
MARGIN RATIO  EARNING YIELD
RATIO
 WORKING  DEBTORS  DIVIDEND YIELD
 OPERATING  DEBT SERVICE
CAPITAL TURNOVER  PRICE EARNING
PROFIT MARGIN INTEREST
RATIO RATIO
COVERAGE  PAYOUT RATIO
 ASSETS
 NET PROFIT RATIO
 TURNOVER  BOOK VALUE PER
MARGIN
RATIO SHARE
LIQUIDITY ANALYSIS
CURRENT RATIO
CURRENT ASSETS
= ------------------------------------
CURRENT LIABILITIES CURRENT RATIO
1.40%
1.21%
CURRENT ASSETS / CURRENT 1.20%
YEAR 0.97%
CURRENT LIABILITIES RATIO 1.00%
0.80%
0.60%
2018 6,350,173 / 5,214,722 =1.21%
0.40%
0.20%
0.00%
2018 2019
2019 7,278,420 / 7,468,539 =0.97%

INTERPRETATION:
The standard norm for current ratio is 2:1. As it shows in 2018 the current
ratio is 1.21%. After that the current ratio has been decreased to 0.97% in
2019. This shows the ability of the company to cover its current liabilities
with current assets. So the ratio was not satisfactory. It shows the bad signs
for the company. Because the company has to pay more liabilities due to
decrease in the current ratio.
QUICK RATIO
QUICK ASSETS - PREPAID EXP
= ----------------------------------------------
CURRENT LIABILITIES QUICK RATIO
0.70%
QUICK ASSETS - PREPAID EXP / QUICK 0.60% 0.58%
YEAR 0.47%
CURRENT LIABILITIES RATIO 0.50%
0.40%
0.30%
2018 6,350,173 - / 5,214,722 =0.58%
0.20%
0.10%
0.00%
2018 2019
2019 7,278,420 - / 7,468,539 =0.47%

INTERPRETATION:
The standard form of a quick ratio is 1:1. It shows the ability of a company
to pay its current liabilities through its most liquid assets. In 2019 it
decreases to 0.47% as compare to 2018. Which shows that the company
cannot pay its debts without its inventory. However the ratio is less than the
standard norms so it is not satisfactory.
WORKING CAPITAL RATIO
CURRENT ASSETS –
CURRENT LIABILITIES WORKING CAPITAL
RATIO
WORKING 1,135,451
CURRENT ASSETS - 1,200,000
YEAR CAPITAL
CURRENT LIABILITIES RATIO
1,000,000
800,000
600,000
2018 6,350,173 - 5,214,722 =1,135,451 400,000
190,119
200,000
0
2018 2019

2019 7,278,420 - 7,468,539 =190,119

INTERPRETATION:
The decrease in working capital in 2019. Which shows that in both years
the company’s current liabilities exceed. Which is not good sign for the
company.
LIQUIDITY ANALYSIS
LIQUIDITY ANALYSIS
1.40%
1.21%
1.20%
1.00% 0.97%

0.80%
0.58%
0.60% 0.47%
0.40%
0.20%
0.00%
Current Ratio Quick Ratio

2018 Percentage 2019 Percentage

INTERPRETATION:
After the liquidity analysis we conclude that the liquidity position of the
company for 2019 is not progressive. So the company is not in a position
to discharge their short term liabilities.
 Ghulam Murtaza
2 Ei17MBA065
PROFITABILITY ANALYSIS
GROSS PROFIT RATIO
GROSS PROFIT
= ---------------------------- X 100
GROSS PROFIT
NET SALES
RATIO
GROSS 17.69%
GROSS PROFIT / NET SALES 18.00%
YEAR PROFIT
*100 RATIO
17.00%
16.00%
15.15%
15.00%
2018 2,085,678 / 11,785,457 *100 =17.69%
14.00%
13.00%
2018 2019

2019 1,589,484 / 10,486,282 *100 =15.15%

INTERPRETATION:
Higher the ratio, higher will be the company’s ability to produce goods and
services at low cost. With high sales the above figures show a decrease in
the ratio in 2019. We can interpret that the company has increased their
cost of goods but their sales are not increasing.
OPERATING PROFIT RATIO
OPERATING PROFIT RATIO
= ------------------------------------------ X100
NET SALES
OPERATING PROFIT
OPERATING RATIO
OPERATING PROFIT
YEAR PROFIT
RATIO / NET SALES *100 RATIO 12.00%
10.09%
10.00%
7.97%
2018 1,190,067 / 11,785,457 *100 =10.09% 8.00%
6.00%
4.00%
2.00%
2019 836,370 / 10,486,282 *100 =7.97% 0.00%
2018 2019

INTERPRETATION:
Higher is better. As the operating profit ratio of general tyre has decreased
in 2019. Which shows that the company have increase their operating
expenses the Company is Downfall in 2019. This is not good Sign for the
company.
NET PROFIT MARGIN
NET PROFIT AFTER TAX
= --------------------------------------- X 100
NET SALES
NET PROFIT
NET PROFIT AFTER TAX / NET PROFIT MARGIN
YEAR
NET SALES *100 MARGIN
7.00% 6.07%
2018 715,551 / 11,785,457 *100 =6.07% 6.00%
5.00%
4.00%
3.00%
2.00% 1.17%
2019 122,876 / 10,486,282 *100 =1.17% 1.00%
0.00%
2018 2019

INTERPRETATION:
Higher the ratio, higher will the firm’s ability to pay its taxes. These figures
show that the company has increase their expenses as the net profit ratio has
decreased in 2019.
PROFITABILITY ANALYSIS

PROFITABILITY ANALYSIS
20.00%
18.00%
16.00% 17.69% 15.15%
14.00%
12.00%
10.00% 7.97%
8.00% 10.09%
6.00%
4.00% 6.07%
2.00% 1.17%
0.00%
Gross Profit Ratio Operating Profit Ratio Net Profit Margin

2018 2019

INTERPRETATION:
The decrease in gross profit ratio impact in operating profit and net profit
margin and reason of decrease in gross profit first cost is increase and
second Sales are decreased in competitive market.
LONG TERM SOLVENCY ANALYSIS
DEBT EQUITY RATIO
TOTAL LONG TERM DEBT
= -----------------------------------------
SHAREHOLDER FUND
DEBT EQUITY RATIO
DEBT
TOTAL LONG TERM DEBT /
YEAR EQUITY
SHAREHOLDER FUND RATIO
0.54 0.53
0.53
0.52
0.51
2018 1,900,177 / 3,571,196 =0.53 0.5
0.5

0.49
0.48
2018 2019
2019 1,665,731 / 3,340,782 =0.50

INTERPRETATION:
1:1 is the bench mark. Ratio has decreased in 2019 and become 0.50:1
which shows that the creditors of general tyre have provided 50% of asset
for each Rs. 1 of asset provided by shareholders.
DEBT EQUITY RATIO
LONG TERM DEBT
= ------------------------------------
LONG TERM FUNDS

DEBT
DEBT EQUITY RATIO
LONG TERM DEBT / LONG
YEAR EQUITY
TERM FUNDS RATIO 0.35
0.34
0.34
2018 1,900,177 / 5,471,373 =0.34 0.34
0.33
0.33
0.33
2019 1,665,731 / 5,006,513 =0.33 2018 2019

INTERPRETATION:
1:1 is the bench mark. Ratio has decreased in 2019 and become 0.33:1
which shows that the creditors of General Tyre have provided 33% of asset
for each Rs. 1 of asset provided by shareholders.
DEBT SERVICE INTEREST COVERAGE
RATIO
EARNING BEFORE INTEREST & TAX
= -------------------------------------------------------
FIXED INTEREST CHARGED
DEBT SERVICE ICR
EARNING BEFORE INTEREST DEBT
YEAR & TAX / FIXED INTEREST SERVICE
ICR 7
CHARGED 6
6.06

5
2018 4
1,557,216 / 256,782 =6.06 3 2.12
TIMES 2
1
0
2019 1,242,183 / 585,032 =2.12 2018 2019
TIMES

INTERPRETATION:
1:1 is the bench mark. As the debt service interest coverage ratio has been
decreased in 2019. Which shows that the company has 2.12 rupees to pay
Rs. 1 tax. Which shows good solvency position because higher is better.
FIXED INTEREST CHARGED
NET FIXED ASSETS
= ----------------------------------
LONG TERM FUND FIXED INTEREST
CHARGED

FIXED 2
NET FIXED ASSETS / LONG
YEAR INTEREST 1.56
TERM FUND CHARGED
1.5 1.23
1

2018 6,735,011 / 5,471,373 =1.23 0.5

0
2018 2019
2019 7,811,482 / 5,006,513 =1.56

INTERPRETATION:
1:1 is the bench mark. As the Fixed Interest ratio has been increase in
2019. which shows that the company has Fixed interest increase as
compare previous years.
 SOLVENCY ANALYSIS COMPARISON
TIMES & PERCENTAGE
Solvency Analysis By Solvency Analysis By Percentage
Times 1.80%
1.60% 1.56%
2.5
1.40%
2.12 1.23%
2 1.20%
1.00%
1.5 0.80%
0.60% 0.53% 0.50%
1 0.34% 0.33%
0.40%
0.20%
0.5 0.6
0.00%
Debt Equity Ratio Debt Equity Ratio Fixed Interest Charged
0
DEBT Service ICR

2018 TIMES 2019 TIMES 2018 Percentage 2019 Percentage

INTERPRETATION:
The company is in a better position to finance its business by obtaining
further debts from financial institutions or other appropriate resources.
INVENTORY TURNOVER RATIO

COST OF GOODS SOLD

= -----------------------------------
AVERAGE INVENTORY
INVENTORY TURNOVER
RATIO
INVENTORY
COST OF GOODS SOLD / 3.5
YEAR TURNOVER 2.91
AVERAGE INVENTORY RATIO
3
2.39
2.5
2
2018 =2.91 TIMES 1.5
9,699,779 / 3,324,857 1
0.5
0
2019 =2.39 TIMES 2018 2019
8,896,798 / 3,721,748

INTERPRETATION:
Higher is better. As inventory turnover ratio deteriorated from 2018 to
2019. Which shows that the ability to sell inventory has decreased.
INVENTORY CONVERSION PERIOD
NO. OF DAYS IN A YEAR
= ------------------------------------------------
INVENTORY TURNOVER RATIO INVENTORY CONVERSION
PERIOD

NO. OF DAYS IN A YEAR / INVENTORY 200

YEAR INVENTORY TURNOVER CONVERSION 159
150 126
RATIO PERIOD
100

2018 365 / 2.91 =126 DAYS 50

0
2018 2019
2019 365 / 2.39 =159 DAYS

INTERPRETATION:
Lower is better. It shows that in 2018 the company dispose off its
inventory in 126 days. But in 2019 it goes up to 159 days it means that the
company’s efficiency has decreased.
 DEBTORS TURNOVER RATIO
ANNUAL NET CREDIT SALE
= --------------------------------------------------------
AVERAGE ACCOUNTS RECEIVABLE
DEBTOR TURNOVER
RATIO
ANNUAL NET CREDIT DEBTORS
YEAR SALE / AVG ACCOUNTS TURNOVER 60 52
RECEIVABLE RATIO 50 42
40
30
2018 11,785,457 / 279,671 =42 TIMES 20
10
0
2019 10,486,282 / 202,594 =52 TIMES 2018 2019

INTERPRETATION:
Higher is better. It measures company's efficiency in collecting its sales on
credit and collection policies. As the ratio highly increased. It indicate that
the company needs to improve its business.
RECEIVABLE COLLECTION PERIOD
NO. OF DAYS IN A YEAR
= ------------------------------------------------
DEBTOR TURNOVER RATIO
RECEIVABLE COLLECTION
PREIOD
NO. OF DAYS IN A YEAR / RECEIVABLE
YEAR DEBTOR TURNOVER COLLECTION
10 9
RATIO PERIOD
8 7
6
2018 365 / 42 =9 DAYS
4
2
2019 365 / 52 =7 DAYS 0
2018 2019

INTERPRETATION:
Lower is better. It shows the ability of the company to collect its receivable
in a specific time as the data shows that in 2018. They collects receivables
in 9 days while it goes up to 7 days in 2019. Which means that the
company is now recovering fast as compare to previous year.
ASSETS TURNOVER RATIO
COST OF GOODS SOLD
= ------------------------------------------------
AVERAGE TOTAL ASSETS
ASSETS TURNOVER
COST OF GOODS SOLD / ASSETS RATIO
YEAR TURNOVER
AVERAGE TOTAL ASSETS RATIO 2 1.81

1.5 1.42
2018 9,699,779 / 5,343,047 =1.81 TIMES
1

0.5
2019 8,896,798 / 6,237,526 =1.42 TIMES 0
2018 2019

INTERPRETATION:
Higher is better. Assets turnover ratio of General Tyre in 2019 has been
decreased. As this ratio is supposed to be high so we can interpret that the
company generated more revenue of assets investment in 2018 as
compared to 2019.
 EFFICIENCY RATIOS COMPARISON
DAYS & TIMES
EFFICIENCY RATIOS IN DAYS EFFICIENCY RATIOS IN
TIMES
200 60 52
159 50
150 42
126 40
100 30
20
50
9 7 10 2.91 2.39 1.81 1.42
0 0
Inventory Conversion Receivable Collection Inventory Debtor Turnover Assets Turnover
Period Period Turnover Ratio Ratio Ratio

INTERPRETATION:
The efficiency analysis shows that the company was more efficient in 2018.
And in 2019 its efficiency is decreased. Which is not favorable for the
company.
Faisal Siddique
Ei17MBA059
3
STOCK
EXCHA
N GE RAT
I OS
DIVIDEND COVER
PROFIT AFTER TAX
= ----------------------------------- DIVIDEND COVER
ORDINARY DIVIDEND

1
PROFIT AFTER TAX / DIVIDEND 0.79
YEAR COVER 0.8
ORDINARY DIVIDEND
0.6
0.4 0.34
2018 715,551 / 896,569 =0.79
0.2
0
2018 2019
2019 122,876 / 358,628 =0.34

INTERPRETATION:
Dividend cover measures a company's ability to pay dividends to
stockholders. Specifically, it calculates how many times over the
company's net profit after tax could have paid for dividends to its common
stockholders.
EARNING PER SHARE
PROFIT AFTER TAX
= ------------------------------------------------------
NO. OF ORDINARY SHARE ISSUED EARNING PER SHARE

EARNING 0.01
PROFIT AFTER TAX / NO. OF 0.01
YEAR PER 0.01
ORDINARY SHARE ISSUED SHARE 0.01
0.01
0
2018 715,551 / 59,771,250 =0.01 0 0
0
2018 2019
2019 122,876 / 101,611,125 =0.001

INTERPRETATION:
Earning per share shows how much money a company makes from shares.
So in 2018 its value was 0.01 but huge decline in the in the value of share
it decreased to 0.001 in 2019. Which is not showing a good sign for the
company.
DIVIDEND PER SHARE
ORDINARY DIVIDEND
= ------------------------------------------------------
NO. OF ORDINARY SHARE ISSUED DIVIDEND PER SHARE

ORDINARY DIVIDEND / NO. OF DIVIDEND

0.01
0.01
YEAR PER 0.01
ORDINARY SHARE ISSUED SHARE 0.01
0.01
0 0
2018 896,569 / 59,771,250 =0.01 0
0
2018 2019
2019 358,628 / 101,611,125 =0.003

INTERPRETATION:
In 2018 the company pay 0.01 dividend on each share to shareholder but in
2019 it almost nothing to pay to its shareholder because in 2019 its value
decrease to 0.003 due to major decline in the business.
EARNING YIELD
EARNING PER SHARE
= --------------------------------------------- X 100 EARNING YIELD
MARKET PRICE PER SHARE

5 4.34
EARNING PER SHARE / EARNING 4
YEAR YIELD
MARKET PRICE PER SHARE 3 2.32
2
2018 7.04 / 162 *100 =4.34 1
0
2018 2019
2019 1.21 / 52.15 *100 =2.32

INTERPRETATION:
The higher the ratio the greater the benefits earned. So in 2018 earning
yield is 4.34 which is decreased in 2019 with the value of 2.32.
DIVIDEND YIELD
DIVIDEND PER SHARE
= -----------------------------------------------X 100 DIVIDEND YIELD
MARKET PRICE PER SHARE
4 3.7
DIVIDEND PER SHARE / DIVIDEND 3.5
YEAR 3
MARKET PRICE PER SHARE YIELD 2.5
2
1.5
2018 6 / 162 *100 =3.70 1
0.5 0
0
2018 2019
2019 0 / 52.15 *100 =0

INTERPRETATION:
A good dividend yield vary with interest rate and market conditions. A
good yield is 4 to 6 but in 2018 its dividend yield is 3.70 but in 2019 its
value decrease to 0 because of non payment of the dividend amount.
PRICE EARNING RATIO
MARKET PRICE PER SHARE
= ------------------------------------------------------
NO. OF ORDINARY SHARE ISSUED PRICE EARNING RATIO

MARKET PRICE PER SHARE PRICE 0 0

YEAR / NO. OF ORDINARY SHARE EARNING 0
ISSUED RATIO 0
0
0
2018 162 / 59,771,250 =0.00000271 0
0

0
2018 2019
2019 52.15 / 101,611,125 =0.000000513

INTERPRETATION:
Price earning ratio indicates the expected price of a share based on earning
high P/E ratio also indicate the future performance.
PAYOUT RATIO
TOTAL DIVIDEND
= --------------------------------- X100 PAYOUT RATIO
PROFIT AFTER TAX
350
292.84
TOTAL DIVIDEND / PAYOUT 300
YEAR RATIO 250
PROFIT AFTER TAX 200
150 124.5
2018 890,907 / 715,551 *100 =124.50 100
50
0
2018 2019
2019 359,832 / 122,876 *100 =292.84

INTERPRETATION:
Lower payout ratio indicate that a company is retaining earning to full
growth is higher. Payout ratio indicate to sharing more of earning with
stockholder.
BOOK VALUE PER SHARE
EQUITY
= -------------------------------------- BOOK VALUE PER
NO. OF SHARE ISSUED SHARE
0.06
0.05
EQUITY / NO. OF SHARE BOOK VALUE 0.05
YEAR
ISSUED PER SHARE 0.04
0.03
0.03
0.02
2018 3,571,196 / 59,771,250 =0.05 0.01
0
2018 2019
2019 3,340,782 / 101,611,125 =0.03

INTERPRETATION:
Value under 1.0 is considered a good sign for the company but in both
years it decline continuously fall.
CONCLUSION
 General Tyre and Rubber Company of Pakistan Limited is facing
decline in 2019 as compare to 2018.

 Its operating and net profit is also decreasing therefore the company
is still not in a condition to pay dividend.

 EPS has decreased because the overall efficiency has been

decreased.

 They are not able to pay short term debts but in a good condition to
take debts as their solvency position is strong.

 General Tyre and Rubber Company of Pakistan Limited is in a

declining phase they should take immediate steps in order to
improve its market position other wise they will be not be able to
achieve its aim.