Habib Sugar Mills LTD.
Financial statement analysis
Ali Babar
SECTION K
3/25/2013

Common-size Analysis of Income Statement:

From the data we can interpret that the company’s COGS are almost the same the those were 81% of sales in 2009 and then they increased to 84% in 2010 then decreased to 83% and again decreased by 1% in 2012 which caused the company’s gross profits to be higher in 2009 and 2012 then other years. Company’s expense specially its selling expenses were relatively high in 2009 but those dropped by 2 percent in the next years and they are increased by 1% in 2012, and so which further affected 2010 sales in a way that its operating profit is lower those of other years. Highest tax was charged in 2011 and 2010 so concluding it all the company had stagnant accrued expenses over the years it didn’t much changed the company’s Net income over the year but relatively the company had bad 2010 because of higher taxes and expenses.

Common-size balance sheet:

Over the all years current assets of the company are way higher than its fixed assets, which can mean that the company is more liquid in terms of cash. Whereas, comparatively the fixed assets have increased over the years mainly due to the increase in long term investment by 24% (2009-2012), while current assets have decreased over the period mainly with decrease in its Cash and bank balance account of -18% (2011-2012). Looking at the equity and liabilities section, the equity in balance sheet is much more higher than fixed and current liabilities mainly because of the increase in reserve over the years though they decreased by 5% in2012 but still they are too good for other liabilities. Whereas, company have no long term liabilities except that of deferred taxation and current liabilities are dominated by A/P that is at-least in terms of their presence like company wasn’t current liable to