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Brief Introduction
Bata Pakistan Limited is incorporated in Pakistan as a Public Limited company and is engaged inthe manufacturing of footwear.
Bata Pakistan Limited having its registered office at BATA, G.T. Road Lahore and factories atMaraka, Multan Road Lahore and Bata Lahore with its Liaison office at Mai Kolachi By-pass,Karachi.
It is also listed on Karachi and Lahore Stock Exchanges.
Their vision is to grow as dynamic, innovative and market driven domestic manufacturer anddistributor, with footwear as our core business, while maintaining a commitment to the country,
culture an d environment in which we operate.
Bata Pakistan Limited is a public limited company incorporated in Pakistan and is quoted on
Lahore and Karachi stock exchanges. The company is engaged mainly in manufacturing and saleof footwear of all kinds.
Vision
To grow as dynamic, innovative and market driven domestic manufacturer and distributor, with
footwear as our core business, while maintaining a commitment to the country, culture andenvironment in which we operate.
Mission
To be successful as the most dynamic, flexible and market responsive organization, withfootwear as its core business.
Current State of Entity
This year, overall sales turnover grew by 12% for the year, despite a very poor first quarter andnegative effect of the earthquake in the last quarter. The sales growth came predominantly from
the retail division which managed to achieve a very creditable growth of 17% in sales. Theperformance in the very important last quarter was particularly impressive with sales growing
30% over the corresponding period of year.
During 2005 they opened a total of 15 new retail stores including new flagship City store onMM Alam Road in Lahore. The results from this large format upgraded store have beenextremely positive and apart from additional turnover generated, this store plus the four other
newly opened city concept stores have done much for enhancing the image of Bata brand.
The operating profit for the year was Rs. 184.5 million which was only marginally better thanprevious year due to higher expenses.
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Profit before tax amounted to Rs. 128.5 million compared to Rs. 178.2 million the previous year.Directors have decided to recommend a final cash dividend at 40% for 2005. The sum of Rs. 53
million is being transferred to general reserves.
At the end of fiscal year, the total number of employees in all divisions numbered 3226 which
was 39 fewer than at the end of year 2004.
Product
Obviously Bata Pakistans products are footwear.
Target Customer
Footwear for children, young, old, male & female is the target customers for Bata Pakistan.
TargetMarket
The target market for Bata Pakistan is the whole Pakistan market.
Analysis Tools
Financial analyses are basic techniques used by investors and managers to analyze basic financial statements.
These analysis are generally begins with the calculation of a set of financial ratios designed to reveal the
relative strengths and weaknesses of a company with other companies in the same industry and to show
whether to companys position has been improving or deteriorating over time.
These analyses are also helpful for the future planning. We can say that these analyses provide asound base for making future planning. For example these financial analyses can be used for:
Innovation of new products.
Determines the interest rates at which money should be borrowed.
Reducing the continue losses by making effective planning.
Determines the strength of the firm to pay its debt as well as its fix cost.
Gives the information about the wealth of owner.
Ratio analyses has limitations, but used with care and judgment can be most helpful.
Actual Balance Sheet (As At Dec 31st 2005)
2005 2004
CAPITALAND
RESERVES
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Authorized capital
10000000ordinary
shares of
Rs. 10each 100,000,000 100,000,000Issued
subscribedand paid
up capital 75,600,000 75,600,000Reserves
& SurplusCapital
reserve 483,000 483,000General
Reserve
510,000,00
0
457,000,0
00Unappropriat
ed profit32,099,00
0 12,523,000
542,582,00
0
470,006,00
0
SHAREHOLDERS' EQUITY 618,182,000
545,606,00
0DEFERRED
LIABILITIES
Provision
forgratuity
67,836,000 66,322,000
LONG TERMDEPOSITES 20,467,000 19,361,000CURRENTLIABILITES
Trade and
otherpayables
431,112,000
448,462,000
Mark-upAccrued 8,607,000 2,196,000
Short termborrowing
s215,766,0
00
168,564,00
0Provision
fortaxation 3,211,000 24,397,000
658,696,000
643,619,000
Contingent
Liabilities &
1,365,181,000
1,274,908,000
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Capital
CommitmentsFIXED
CAPITAL
EXPENDITURE
Operatingfixed assets-tangible 282,645,000
266,487,000
-intangible 1,295,000 2,589,000
283,940,00
0
269,076,00
0LONG TERM
INVESTMENTS 20,467,000 19,361,000LONG TERM
DEPOSITS
AND
PREPAYMENT
S
31,672,00
0
21,906,00
0DEFEREDTAXATION 9,925,000 3,508,000CURRENT
ASSETS
Stores and
spares 29,998,000
37,922,00
0Stock in
trade606,765,00
0
541,247,0
00trade
debts317,722,00
0
314,364,0
00Loan and
advances 691,000 4,234,000Deposits,
short termprepayme
nts andother
receivables 28,953,000 22,803,000
Cash andbank
balance35,048,00
0 40,487,000
1,019,177,000
961,057,000
1,365,181,0
00
1,274,908,0
00
PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31,
2005
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2005 2004
Rs. '000s Rs. '000s
NET SALES 2,543,344 2,279,556COST OF
SALES 1,605,938 1,443,722
GROSS PROFIT 937,406 835,834OPERATINGEXPENSES
Selling anddistribution 542,283 462,070
Administrative 210,654 190,186
752,937 652,256
OPERATINGPROFIT 184,469 183,578
FINANCECOST 40,087 19,877
144,382 163,701OTHER
INCOME 2,784 28,807PROFIT FOR
THE YEAR 147,166 192,508OTHER
OPERATINGEXPENSES 18,631 14,311
PROFITBEFORE
TAXATION 128,535 178,197PROVISION
FORTAXATION
Current 54,402 60,562Prior years (3,366) (2,539)
Deferred (6,417) (1,698)
44,619 56,325
PROFIT AFTERTAXATION 83,916 121,872
EARNING PERSHARE Rs. 11.10 Rs. 16.12
Cash Flow Statement for the year ended December 31, 2005
2005
Rs.'000s
2004
Rs.'000s
CASH FLOW FROM
OPERATING
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ACTIVITIESProfit Before Taxation 128,535 178,197
Adjustment For Non - CashCharges And Other Items:
Depreciation 39,657 29,273
Amortization 1,294 1,295Provision For Gratuity 4,547 5,915Profit On Fixes Assets Sold
And Scrapped (1,360) (24,347)Finance Cost 40,087 19,228
84,225 31,368Operating Profit Before
Working Capital Changes 212,760 209,565Net Changes In Operating
Assets And Liabilities (92,367) (26,753)Financing Cost Paid (33,676) (18,807)
Income Taxes Paid (69,424) (57,375)Gratuity Paid (3,033) (1,802)
Net Cash Generated FromOperating Activities 14,260 104,828
CASH FLOW FROMINVESTING
ACTIVITIESPurchase Of Fixed Assets -
Tangible (57,689) (44,218)Purchase Of Fixed Assets
Sold 3,234 24,951Increase In Long Term
Investments (1,106) (648)Net Cash Used In Investing
Activities (55,561) (19,915)
CASH FLOW FROM
FINANCINGACTIVITIES
Change In Short TermBorrowings 47,202 (48,734)
Dividend Paid (11,340) (52,920)Net Cash Provided / (Used
In) Financing Activities 35,862 (101,654)
NET DECREASE IN
CASH AND CASHEQUIVALENTS (5,439) (16,741)
CASH AND CASHEQUIVALENTS AT
BEGINNING OF YEAR 40,487 57,228
CASH AND CASH 35,048 40,487
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EQUIVALENT AT ENDOF YEAR
Statement for Sources & Uses
Items Changes Sources Uses
All Capital & Reserve 72,576 72,576
Provision For Gratuity 1,514 1,514Long Term Deposit 1,106 1,106
Trade & Other Payables (17,350) 17,350Markup Accrued 6,411 6,411
Short Term Borrowings 47,202 47,202Provision For Taxation (21,186) 21,186
Operating Fixed Assets Tangible &
Intangible 14,864 14,864Long Term Investment 1,106 1,106
Long Term Deposit & Prepayments 9,766 9,766Deferred Taxation 6,417 6,417
Stores And Spares (7,924) 7,924Stock In Trade 65,518 65,518
Trade Debts 3,358 3,358Loans And Advances (3,543) 3,543
Receivables 6,150 6,150Cash And Bank Balance (5,439) 5,439
Total 145,715 145,715
CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2005
Rs.
000s
CASH FLOWS FROM
OPERATINGACTIVITIES
Net Profit after Tax. 83,916Add: Depreciation 39,657
Cash Flow fromoperating Activities 123,573
Changes in Assets exceptchanges in CashStores & Spares 7,924Stock in Trade (65,518)
Trade Debts (3,358)Loans and Advances 3,543
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Deposits & OtherReceivables (6,150)
Deferred Taxation (6,417)Long-term Investments 1,106
Long-term Deposits &
Prepayments (9,766)Changes in All CLTrade & Other Payables (17,350)
Accrued Mark-up 6,411Provision for Taxation (21,186)
Provision for Gratuity 1,514
NET CASH FROM
OPERATINGACTIVITIES 14,326 14,326
CASH FLOWS FROMINVESTING ACTIVITIES
Additions in Fixed Assets (57,689)Disposals of Fixed Assets
(Tangible) 1,874Disposals of Fixed Assets
(In-tangible) 1,294Increase in Long-term
Investments (1,106)
NET CASH USED BY
INVESTINGACTIVITIES (55,627) (55,627)
CASH FLOWS FROMFINANCING
ACTIVITIESIncrease in Short-term
Borrowings 47,202Dividend Paid (11,340)
NET CASH FROMFINANCING
ACTIVITIES 35,862 35,862TOTAL CHANGE IN
CASH (5,439)VerificationCASH AT THE BEGININGOF THE YEAR 40,487
CASH AT THE END OFTHE YEAR 35,048
RATIO ANALYSIS OF BATA PAKISTAN LIMITED 2005
There are five ratios:
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1. Liquidity Ratios2. Activity Ratios3. Leverage Ratios4. Profitability Ratios5. Marketability Ratios
We will discuss all of above thoroughly in the following area.
1: Liquidity Ratios:
Current Ratio = Current Assets / Current Liabilities
Current ratio (2004)=961057 / 643619 = 1.49
Current ratio (2005)=1019177 / 658696 =1.54
Quick (Acid Test) Ratio =(Current Assets - Inventory) / Current Liabilities
Quick Ratio (2004) = (961057 - 579169) / 643619 = 0.59
Quick Ratio (2005) = (1019177-636763) / 658696 = 0.58
Net Working Capital Ratio
Net Working Capital =CA CL if it is positive then we calculates
Shrinkage = NWC / CA
Net Working Capital (2004) = CA CL = 961057 643619 = 317438
Shrinkage = NWC/ CA = 317438 / 961057 = 33.03%
Net Working Capital (2005) = CA- CL = 1019177-658696 = 360481
Shrinkage = NWC / CA = 360481 / 1019177 = 35.36 %
Cash to Current Liabilities Ratio = (Cash + C.E) / CL
Cash to Current Liabilities Ratio(2004)= 40487 / 643619 =0.0629 =6.29%
Cash to Current Liabilities Ratio (2005)= 35048 / 658696 = 5.32%
Cash to Total Assets Ratio = (Cash + C.E) / TA
Cash to Total Assets Ratio (2004) = 40487 / 1274908=0.0317 = 3.17%
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Cash to Total Assets Ratio (2005)= 35048 / 1365181 =0.0256 = 2.56%
Interpretation
The importance of adequate liquidity in the sense of the ability of a firm to meet current/short-
term obligations when they become due for payment can hardly be overstressed. In fact, liquidityis a prerequisite for the very survival of a firm. The short-term creditors of the firm are interestedin short-term solvency or liquidity of a firm.
Current ratio of company improves from 1.49 to 1.54 which is a good sign and but the Acid-testratio, at the same time, decrease which is not a good sign.
Furthermore Acid-test ratio is just satisfactory because obviously it implies that for every 1 Rs.
of liability only Rs. 0.58 available quickly.
Both of the cash ratios of company declines w.r.t previous year.
Since keeping all these things into mind we can say that Bata Pakistan limited is not in a very
good liquid condition. But it might be the sign that the company is investing more in fixed assetswhich are more productive as compared to current assets.
2: Activity / Efficiency Ratios:
Inventory Turnover =Cost of goods sold / Ending Stock Inventory
Inventory turnover ratio (2004)= 2279556 / 579169 = 3.93 times
Inventory turnover ratio (2005)= 1605938 / 636763 = 2.52 times
i) Average age of Inventory =No. of Working days / Inventory turnover
Average age of Inventory (2004)= 360 / 3.93 = 91.6
Average age of Inventory (2005)= 360 / 2.52 =142.85
Average collection Period =Accounts Receivable / Average credit Sales per day
Average collection Period (2004)= 314364 / 6332 = 50 days
Average collection Period (2005)= 317722 / 7064 = 45 days
ii) Accounts Receivable turnover = No. of Working days / Average collection Period
Accounts Receivable turnover(2004)= 360 / 50 = 7.2
Accounts Receivable turnover(2005)= 360 / 45 = 8
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Average Payment Period = Accounts Payable / Average Credit Purchase per day
Average Payment Period (2004) = (448462 x 360) / 753985 = 212.4
Average Payment Period (2005) = (431112 x 360) / 702322 = 219.6
iii) Accounts Payable Turnover = No. of Working days / APP
Accounts payable turnover(2004)= 360 / 212.4 =1.69
Accounts payable turnover(2005)=360 / 219.6 =1.63
Fixed Assets Turn Over Ratios = Sales / Fixed Assets
Fixed Assets turn over ratios (2004)= 2279556 / 269076 = 8.47
Fixed Assets turn over ratios (2005)= 2543344 / 283940 = 8.95
Total Assets Turn Over Ratio =Sales / Total Assets
Total Assets turn over(2004) = 2279556 / 1274908 = 1.78
Total Assets turn over(2005)= 2543344 / 1365181 = 1.86
Sales To Net Worth Ratio =Sales / Net worth Or SHE
Net worth turn over(2004)= 2279556 / 545606 = 4.17
Net worth turn over(2005)= 2543344 / 618182 = 4.11
Interpretation
Activity ratios measure the speed with which accounts are converted into sales or cash. The
inventory turnover of the company declines as compared to last year which implies that companyis not so much active while dealing with its inventory as compared to last year. AAI also raises
w.r.t last year which is not a good sign. ACP is a little bit less than last year which is a good sign.
APP is less by 5 days as compared to last year. Overall the activity ratios of Bata show that
companys activity has declined as compared to last year.
3: Leverage / Gearing Ratios:
Debt ratio = Total Liabilities / Total Assets
Debt ratio (2004)= 729302 / 1274908 = 0.572 = 57.2%
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Debt ratio (2005)= 746999 / 1365181= 0.547 = 54.7%
Debt Equity Ratio = Total Debt / Stock holders Equity
Debt Equity Ratio (2004) = 0 / 545606 = 0:100 times
Debt Equity Ratio (2005)= 0 / 618182 = 0:100 times
EquityMultiplier =Total Assets / Stock holders Equity
Equity Multiplier(2004) = 1274908 / 545606 = 2.33
Equity Multiplier(2005)= 1365181 / 618182 = 2.2
Times Interest earned ratio = EBIT / Interest
Times Interest earned ratio (2004)= 183578 / 19877 = 9.2 times
Times Interest earned ratio (2005)= 184469 / 40087 = 4.6 times
Interpretation
Companys debt ratio decreases as compared to last year and debt-equity ratio is 0:100 times
which means that company is not using any financing which obviously declines companysprofitability. Since company doesnt have any long term debts only short term borrowings are
being utilized in this year. Times interest earned ratio declines from 9.2 times to 4.6 times whichis very bad apparently but in fact its because of reduction of debts.
4: Profitability Ratios:
Gross Profit Ratio = (Gross Profit / Sales) x 100
Gross profit ratio (2004) = (835834 / 2279556) x 100 = 36.66%
Gross profit ratio (2005) = (937406 / 2543344) x 100 = 36.85%
Operating Profit Ratio = (Operating profit / Sales) x 100
Operating Profit Ratio (2004)= (183578 / 2279556) x 100 = 8.05%
Operating Profit Ratio (2005)= (184469 / 2543344) x 100 = 7.25%
Net Profit Ratio = (NPAT / Sales) x 100
Net Profit ratio (2004)= (121872 / 2279556) x 100 = 5.34%
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Net Profit ratio (2005) = (83916 / 2543344) x 100 = 3.29%
Basic Earning Power =(EBIT / TA) x 100
Basic Earning Power(2004) = (183578 / 1274908) x 100 = 14.39%
Basic Earning Power(2005) =(184469 / 1365181) x 100 = 13.51%
Return on Assets = (NPAT / TA) x 100
Return on Assets (2004)= (121872 / 1274908) x 100 =9.5%
Return on Assets (2005) = (83916 / 1019177) x 100 = 8.23%
Return on Equity = (NPAT / S.H.E) x 100
Return on Equity (2004)= (121872 / 545606) x 100 = 22.33%
Return on Equity (2005)= (83916 / 618182) x 100 = 13.57%
Interpretation
Gross profit ratio is almost same as of the last year but operating profit ratio decrease which
show that company increases its operating expenses which is not good. Due to this entire netprofit ratio also decreases.
Overall firms profitability this year is not very good, even, return on equity decreases even by
almost 50%.
5:Marketability Ratios:
Earning Per Share =(NPAT Dividend on P.S.) / Outstanding common stock
Earning Per Share (2004)= 121872000 / 7560000 = Rs. 16.12
Earning Per Share (2005)= 83916000 / 7560000 = Rs. 11.10
Dividend Per Share =Dividend Paid / Outstanding common stock
Dividend per share (2004)= 52920000 / 7560000 = Rs. 7
Dividend per share (2005)= 11340000 / 7560000 = Rs. 1.5
Dividend payout ratio = Dividend per share / Earning per share
Dividend payout ratio (2004)= 7 / 16.12 = 0.4342 = 43.42%
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Dividend payout ratio (2005)= 1.5 / 11.1 = 0.1351 = 13.51%
Flow Back Ratio = (1 Dividend payout) x 100
Flow Back Ratio (2004)= 56.58%
Flow Back Ratio (2005)= 86.49%
Dividend Yield = (Dividend per share / Current market price) x 100
Dividend Yield (2004)= 6.34%
Dividend Yield (2005)= 4.44%
Price Earning Ratio =Current M.P of C.S / EPS
Price Earning Ratio (2004)=4.4 times
Price Earning Ratio (2005)=8.11 times
Break up Value per share (2004) = Rs. 72.17
Break up Value per share (2005) = Rs. 81.77
Market Price per share (2004) = Rs. 71
Market Price per share (2005)= Rs. 90
Interpretation
It measures the return earned on owners investment in the firm. Companys EPS declines by Rs.
5 which is due to decrease in net profit & a very less amount of profit is paid as dividend thisyear as compared to last years which is not a good sign with the point of view of investor.
Common Statement Analysis
In common statement analysis we are having two types of analysis these are given below:
1. Vertical Analysis
2. Horizontal Analysis
We will discuss these in the light of Profit & Loss Account as well as Balance Sheet.
Common
Statement
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AnalysisProfit And
Loss AccountVertical
Analysis
2005 2004
Rs. '000s %AGE
Rs.'000s %AGE
NET SALES 2,543,344 100% 2,279,556 100%COST OF
SALES 1,605,938 63.14 1,443,722 63.33GROSS
PROFIT 937,406 36.86 835,834 36.67OPERATING
EXPENSESSelling and
distribution 542,283 462,070Administrative210,654 190,186
752,937 29.60 652,256 28.61OPERATING
PROFIT 184,469 7.25 183,578 8.05FINANCE
COST 40,087 1.58 19,877 0.87
144,382 163,701
OTHERINCOME 2,784 0.11 28,807 1.26
PROFIT FORTHE YEAR 147,166 5.79 192,508 8.44
OTHEROPERATING
EXPENSES 18,631 0.73 14,311 0.63PROFIT
BEFORETAXATION 128,535 5.05 178,197 7.82
PROVISIONFOR
TAXATIONCurrent 54,402 60,562
Prior years (3,366) (2,539)Deferred (6,417) (1,698)
44,619 1.75 56,325 2.47PROFIT
AFTERTAXATION 83,916 3.30 121,872 5.35
HorizontalAnalysis
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NET SALESCOST OF
SALES 2005 2004 CHANGE
%AGE
CHANGEGROSS
PROFIT
2543344000 2279556000 263,788,000 11.57OPERATINGEXPENSES 1605938000 1443722000 162,216,000 11.24
937406000 835834000 101,572,000 12.15OPERATING
PROFIT
Selling and
distribution 542283000 462070000Administrative 210654000 190186000
FINANCECOST 752937000 652256000 100,681,000 15.44
184469000 183578000 891,000 0.49OTHER
INCOME 40087000 19877000 20,210,000 101.68PROFIT FOR
THE YEAR 144382000 1637010002784000 28807000 (26,023,000) (90.34)
OTHEROPERATING
EXPENSES 147166000 192508000 (45,342,000) (23.55)PROFIT
BEFORETAXATION
PROVISIONFOR
TAXATION 18631000 14311000 4,320,000 30.19128535000 178197000 (49,662,000) (27.87)
Current 54402000 60562000PROFIT
AFTERTAXATION Prior years -3366000 -2539000
Deferred -169800056325000 (11,706,000) (20.78)
121872000 (37,956,000) (31.14)
Balance SheetVertical Analysis
2005 2004
Rs. '000s%AGERs. '000s%AGECAPITAL AND
RESERVESAuthorize
d capital10000000 100,000 100,00
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ordinaryshares of
Rs. 10each
0
Issued
subscribedand paidup capital 75,600 5.54% 75,600 5.93%
Reserves& Surplus
Capitalreserve 483 483
GeneralReserve
510,000 457,000
Unappropriated profit 32,099 12,523
542,582 39.74% 470,006 36.87%SHAREHOLDER
S' EQUITY 618,182 45.28%
545,60
6 42.80%
DEFERRED
LIABILITIESProvision
forgratuity 67,836 4.97% 66,322 5.20%
LONG TERMDEPOSITES 20,467 1.50% 19,361 1.52%
CURRENTLIABILITES
Trade andother
payables431,11
2 448,462Mark-up
Accrued 8,607 2,196Short term
borrowings
215,766 168,564
Provisionfor
taxation 3,211 24,397
658,69
6 48.25% 643,619 50.48%
1,365,18
1
100.00
%
1,274,90
8
100.00
%
Balance SheetHorizontalAnalyses
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2005 2004 Change
%ageChang
eCAPITAL AND
RESERVES
Authorizedcapital10000000
ordinaryshares of
Rs. 10each 100,000,000
100,000,000
Issuedsubscribed
and paidup capital 75,600,000
75,600,000 - 0.00%
Reserves& Surplus
Capitalreserve 483,000 483,000
GeneralReserve 510,000,000 457,000,000
Unappropriated profit 32,099,000 12,523,000
542,582,000 470,006,00072,576,000
15.44%
SHAREHOLDERS' EQUITY
618,182,000 545,606,000
72,576,000 13.30%
DEFERREDLIABILITIES
Provisionfor
gratuity 67,836,000
66,322,00
0 1,514,000 2.28%
LONG TERM
DEPOSITES 20,467,000 19,361,000 1,106,000 5.71%
CURRENT
LIABILITESTrade and
otherpayables 431,112,000
448,462,000
Mark-upAccrued 8,607,000 2,196,000
Short termborrowing
s 215,766,000
168,564,0
00Provision 3,211,000 24,397,00
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fortaxation
0
658,696,000
643,619,000 15,077,000 2.34%
1,365,181,0
00
1,274,908,0
00FIXEDCAPITAL
EXPENDITUREOperating fixed
assets-tangible282,645,00
0 266,487,000-intangible 1,295,000 2,589,000
283,940,000 269,076,00014,864,000 5.52%
LONG TERMINVESTMENTS 20,467,000 19,361,000 1,106,000 5.71%
LONG TERM
DEPOSITS AND
PREPAYMENTS 31,672,000 21,906,000 9,766,000 44.58%
DEFEREDTAXATION 9,925,000 3,508,000 6,417,000 182.92%
CURRENTASSETS
Stores andspares 29,998,000
37,922,000
Stock intrade 606,765,000
541,247,000
trade debts 317,722,000
314,364,000
Loan andadvances 691,000 4,234,000
Deposits,short term
prepayments and
otherreceivables28,953,000
22,803,000
Cash andbank
balance 35,048,000
40,487,00
0
1,019,177,0
00 961,057,000
58,120,0
00 6.05%
1,365,181,0
00
1,274,908,0
00
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Answers to Analytical Questions
Q#1: Would you like to invest as an equity investor in this company?
Ans.NO I dont like to invest in Bata Pakistan Limited because its current year Because
Result of activity ratios for this year is not very good
Company didnt handle operating expenses in good manner for this year
Its EPS declines By Rs. 5 this year
Only 0.4% dividend is given in this year
Q#2: would you like to extend a long-term loan to this company?
Ans. Yes, I would like to extend long term loan to the company because
Companys times interest earned ratio is satisfactory
It has a good reputation in market
Its debt ratio decreases this year
Its debt equity ratio is 0:100 times i.e. currently it is not using any long term financing
Company is continuously growing from last many years only this year its performance in a bit
low because of earthquake otherwise it has very good growth in previous years.
Q#3: would you like to extend a short-term loan to Bata?
Ans. Yes, I would like to extend short term loan to the company because
Companys liquidity ratios yield sufficient results
It has a good reputation in market
No risk involved
Its activity ratios are very satisfactory in previous years
Its debt ratio decreases this year
Its cash flows are satisfactory for this year
Its debt equity ratio is 0:100 times i.e currently it is not using any long term financing.
8/6/2019 bata anaylsis
21/21
Q # 4 Suppose you are existing owner of Bata Pakistan how do you find it?
Ans. To be an existing owner of Bata Pakistan I really would like to improve some of its featureslike customer service etc.
Conclusion
I really enjoyed so much while preparing this report. Its really very useful for me in myprofessional career. Thanks God I have finished it. I think Bata should try to reduce its operating
expenses and furthermore think about its activity ratios it is more important for them. And thefact that I want to say here again Batas performance in previous years was very good, in this
year company has to bear some losses and make some improvements due to which itsperformance looks not so attractive this year.
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