PACKAGES LIMITED

Company Profile

Established in 1956 as a joint venture between the Ali Group of Pakistan and Akerlund
and Rausing of Sweden, Packages Limited provides premium packaging solutions for
exceptional value to individuals and businesses. We are the only packaging facility in
Pakistan offering a complete range of packaging solutions including offset printed
cartons, shipping containers and flexible packaging materials to individuals and
businesses world-wide. Our clientele includes illustrious names such as Unilever and
Pakistan Tobacco Company, who have been our customers for over 50 years. We employ
over 3000 people and had sales of over US $ 100 million in 2004.

Listed on all three stock exchanges in Pakistan, Packages Limited has maintained a long-
time credit rating of AA. Our joint ventures and business alliances with some of the
world's biggest names reflect our forward-looking strategy of continuously improving
customer value through improvements in productivity.

Packages has always been at the forefront of new developments in packaging research
and has pioneered several innovations, including the use of wheat straw as a raw material
for paper and board manufacture. Our on-site paper and board mill, established in 1968,
has constantly increased its production capacity. A new plant with even greater
capabilities is planned for the near future.
Product Line
Folding Carton Line

• Rotogravure printing

• Offset printing

Flexible Packaging Line

• Flexographic line

• Rotogravure Printing

• Lamination

• Extrusion

• Bag & Sleeve making

Corrugated Carton Line

 RATIO ANALYSIS

Packages Limited

1. Working Capital = Current Assent – Current liabilities

Years Current Assets Current W. Capital

Liabilities
2008 6923461 5616873 1306588

2009 7978769 1742693 6236076

Comment:
Packages Limited has enough working capital which is a good sign. Assets are growing
up and Current liabilities are decreasing which in turn is the result of increase in working
capital. This indicates increase growth and expansion in the future of the company as
liabilities are decreasing by the passing year.
2. Current Ratio: Current Assets / Current Liabilities
Years Current Assets Current Current ration
Liabilities
2008 6923461 5616873 1.23

2009 7978769 1742693 4.58

Comments:

In year 2009 Packages Limited is in strong and a better position than 2008. The ability to
pay the short term assets has increased significantly since the last year. Which indicates
the cuts in cost for production.

3. Acid Test Ratio = Quick Assets / Current Liabilities

Years Quick Assets Current Ratio

Liabilities
2008 4075094 5616873 0.73

2009 3255800 1742693 1.87

Comments:
The ideal Acid test ration is 1:1 and you can see in 2008 the company has over quick
assets which goes idol but in 2008 it is good because it is very close to an ideal ratio.
In 2009 the quick assets are greater than 1 so they will remain idle.
4. Cash Flow From Operations = Cash flow from operations / Current
Liabilities

Years Cash Flow Current liabilities Ratio

2008 -2778570 5616873 -0.49

2009 -1198377 1742693 -0.69

Comments:

In 2008 the ability to cover current maturing obligations from recurring operations was
high as compared to 2009.

5. Debt Ratio
= Total Liabilities / Total Assets

Years Total liabilities Total Assets Ratio

2008 18762061 35034633 0.54

2009 12191122 35608029 0.34

Comments:
The debt ratio is worse in 2009 as compared to 2008. it means that company has less self
proportion in the investment that should take less money as a loan and in the other year
company has good ratio that can take ratio with out any hesitation.
6. Gross Profit Ratio = Gross profit / Net Sales

Years Gross profit Net sales Ratio

2008 943299 12224779 0.08

2009 307335 14043833 0.02

Comments:

The profit has decreased since 2008 by 6% which indicates that the performance of the
company has decreased in 2009 despite the increase in the net sales.

7. Profit Margin Ratio = Net Income / Net Sales

Years Net Income Net sales Ratio

2008 -195825 12224779 -0.02

2009 4063924 14043833 0.29

Comments:
Profit margin rate is better than 2009 as compared to 2008's figures. The net profit
margin is indicative of managements ability to operate the business with sufficient
success not only to recover from revenues, but also to leave a reasonable margin to the
owners. Because it is higher in 2009 it means successful returns to investors and a long
term firm sustainability than in 2008.
8. Operating Expense Ratio = operating expense / net sales

Years Operating Net sales Ratio

expense
2008 874938 12224779 0.07

2009 2824465 14043833 0.2

Comments:
The operating expense ration in 2008 is higher which means that it was not favorable for
the company while in 2009 it is lower which means that it is more favorable in 2009. We
can compare this expense ratio to the industry standard for more evaluation.

9. Operating income = Gross Profit - Operating expense

Years Gross profit Operating Ratio

expense
2008 943299 874938 68361

2009 307335 2824465 -2517130

Comments:
Profitability from the basic business activities has decreased as operating expense has
increased.