GROUP MEMBERS BILAL ASHRAF SEHRISH ANSARI

REG NO 15348 15246

MUHAMMAD UMAIR

15143

SEIMENS PAKISTAN
Siemens Pakistan Engineering Company Limited is the largest employer of engineering graduates Pakistan. It works primarily in the energy, industry and health care sectors.

The company is among the top 25 companies of the country and has won several awards including the prestigious CSR award from the employers federation of Pakistan. Siemens was the O&M partner for the electric power utility in Karachi and worked to overhaul the aging system. This contract was however terminated, allegedly due to noncooperation and inability to stabilize the current system

FINANCIAL Ratio Analysis FOR THE YEAR 2011-2012

1-

CURRENT RATIO

2011

2012

INTERPRETATION
A simple measure that estimates whether the business can pay debts due within one year from assets that it expects to turn into cash within that year. The current ratio of Siemens has been increased to 1.22 from 1.18 as it shows the short term debt paying ability of the firm.

REASONS:
Current liabilities have been decreased even though there is an increase in trade and the payables but the increment is small that it wont affect much. Current assets have also been decreased this year 2012, but the cash and bank has drastically increased.

QUICK RATIO

2011

2012

Increase 0.01 Times

INTERPRETATION
The quick ratio has increased by 0.01 times, this means that this year they will be more able to meet its immediate current liabilities. It shows Siemens financial strength is stronger in 2012 than 2011.

REASONS:
Because of decline in current liabilities. And current assets are enough to pay off the current liabilities.

INTEREST COVER

2011

2012

Decrease 1.82 times

INTERPRETATION
Interest Coverage ratio shows that are the profits sufficient to be able to pay interest and other finance costs. The interest coverage ratio decreases by 1.82 times from year 2011 to 2012 REASONS: Due to decrease in profit in 2012 i.e $22360 the firm ability to pay interest on its long debt decreases, because of insufficient profit.

ASSETS TURNOVER

2011

2012

Decrease 0.141 Times

INTERPRETATION
Asset turnover shows the sales generation by the investment made in capital assets. There is a decrease in Asset turnover from 2.181 times to 2.04 times, creates a decline of 0.04 times. REASONS: Companys sales volume decreased by 13.8 billion from 15 billion, some reasons for delay are shortages of fund in government and public sector. So the revenue has also been decreased with the decrease in sales. Withheld payment has also been decreased.

INVENTORY TURNOVER DAYS

2011

2012

Decrease 16 days

INTERPRETATION
There is a decrease in the Inventory Turnover days from 87 to 84 days from 2011 to 2012, which shows that 3 days are required from the purchase of inventory to the completion of sales in the company.

REASONS: Decrease in the cost of goods sold, because of an increase in the cost of goods manufactured in 2012. Inventories have also been decreased in the year 2012, and the purchase of raw material and components has increased and though the finished goods have increased in 2012, but the obsolete items have decreased the ending inventories.

DEBTOR TURNOVER DAYS

2011

2012

Decrease 38 days

INTERPRETATION
The "debtor days" ratio indicates whether debtors are being allowed excessive credit. The debtors turnover days has decreased by 38 days this year 2012, from 2011. As it shows the times of cycle from sales of inventory to the recovery from debtors. REASONS: Because of decrease in sales this year. Because of decrease in debtors, but some doubtful receivable has still increased.

CREDIT PAYMENT PERIOD

2011

2012

Increase 30 days

INTERPRETATION
Creditor turnover days have been increased by 30.48 days in the year of 2012. As this shows the debtors cycle in days, that from the purchase of inventory to the payments. REASONS: The creditor level has been decreased from 3.197 billion to 3.131 billion. And so the purchases have also decreased this year because of less sales.

GEARING RATIO

2011

2012

Decrease 0.295%

INTERPRETATION
Gearing ratio measures the proportion of assets invested in a business that are financed by borrowing. There is a decline in gearing ratio from 1.19% to 0.895%, as its healthy sign of this year gearing ratio, because the decrease means the foreign investment is less. REASONS: Long term debt have been decreased because of decline in: Retention money. Other non-current liabilities.

RETURN ON CAPITAL EMPLOYED

2011

2012

INTERPRETATION
ROCE is sometimes referred to as the "primary ratio"; it tells us what returns management has made on the resources made available to them before making any distribution of those returns.

There is a decrease in the return on capital employed from 3.59% to 0.329% in the year from 2011 to 2012
REASONS:

Increase in the cost of goods manufactured Increase in Provision for slow moving and Obstacle Items Increase in Impairing Loss in Plant and Building

GROSS PROFIT MARGIN

2011

2012

Decrease 5%

INTERPRETATION
GP Margin has been decreased by 6.6% from 11.12%, makes a decline of 4.52% in the year ended September, 2012. REASONS: Decline in sales because of delay in finalization of orders and due to the shortages of fund in the government and public sector. The cost of producing the goods has also increased which decreases the GP. Increase in salary & welfare expenses. Increase in Gratuity (services offered by employee) Increase in Impalement loss.

NET PROFIT MARGIN

2011

2012

Decrease 1.16%

INTERPRETATION
The Net profit margin tells us something about a company's ability to control its other operating costs or overheads. Net Profit of the company decreased from 1.81% to 0.161% due to following reasons: REASONS: Increase in closing inventory of finished goods. Decrease in profit on sale of property, plant and equipments. Decrease in rental income. The sales have been decreased up to 1.2 million. Increase in administrative expenses by 74498.