financial statements of pia
TRANSCRIPT
Analysis of Financial Statements (2011-2012)
Presented by:
MBA 90 D- 1B
November 13, 2014
Presented to:
Course Facilitator
Introduction:
Pakistan International Airline (PIA) is the national
flag carrier of Pakistan.PIA is the national airline
and the main cargo service around the world. Their
central points of activity are as:
• Jinnah International Airport Karachi.
• The Allama Iqbal airport in Lahore.
• and Islamabad International airport.
PIA traces its beginning when Pakistan was not a nation. In 1946, Quaid-e-Azam the founder of nation realized the need of air line network for the developing country and after the efforts PIA was established in 1955. The most important element of any airline service airline is its craft itself. Now a day’s PIA has 43 aircrafts in its fleet.
Vision and Mission
VISION:
PIA’s vision is to be world class airline exceeding customer expectations through dedicated employees, committed to excellence, innovation products and absolute safety.
MISSION:
• PIAC’s mission statement as follows:
• Employee teams will contribute towards making PIA a global airline of choice through
• Offering quality customer service and innovation products.
• Using state of the art technologies.
• Ensuring cost effective measures in procurement and operations.
• Development safety culture.
CORE VALUES:
• Customer Expectations
• Convenience, Caring, and Competitive Tariff
• Service
• Personalized and Courteous
• Innovation
• Cherishing New Ideas, Translated Into Action
• Cohesiveness
• Respect for Individuals, Teamwork, and Effective Communication
• Integrity
• Business Ethics, Accountability, and Transparency
• Reliability
• Loyalty and Consistency
• Safety
• Passengers, Employees, Environment, and Health
• Humility and mutual respect
6
ORGANIZATION HIERARCHY
Human Resources Corporate Planning
Flight Operations Marketing
Airport Services Finance
Flight Services Financial monitoring and Appraisal
Work Store Purchases
Information Technology Engineering
Quality Assurance Coordination
Presicion Engineering General Services
Chairman/CEO
Board of Directors
7
MANAGEMENT HIERARCHY
Staff
Supervisor
Staff
Supervisor
Officer Officer
Assistant Manager Assistant Manager
Manager Manager Manager
General Manager General Manager General Manager
Senior Vice President
Staff
Supervisor
Officer
Assistant Manager
Manager
General Manager
Senior Vice President
Deputy Managing Director
Chairman/ CEO
Products & Services
• Same day speed
• Second day speed
• Overnight SpeedPIA Speedex
• DHL cargo
• Royal air cargoPIA Cargo
Share holders of PIA
85%
3% 8%4%
Government
Individual
PIA Employees
public sector
Market Share
Domestic Market International Market
24%
76%
61%
39%
Others
PIA
Analysis of Financial Statements:
• PKR Change Analysis and Percentage change:
In rupee and percentage change the amount would be
change in rupee and we can easily calculate the percentage of the two years to show how much increase and decrease in assets and liabilities.
PKR change=Current Amount-Base Amount
Percentage change=
PKR change/Base Amount
Analysis of Financial Statements:
• Trend Analysis:
Trend analysis is also called horizontal analysis. It is used to disclosed the patterns of data and information which covers the one or another period of time.
Trend Percentage=
(Current Amount/Base Amount)*100
Analysis of Financial Statements:
• Common Size Analysis:
• It is also known as vertical analysis. By computing this type of analysis organization examined the size of each and every item of financial statements. For common size Analysis.
Common Size Analysis= (Analysis Amount/Amount of Total Assets)*100
Analysis of Financial Statements:
• Ratios: Ratios are simply relationships between the two financial calculations, and these ratios are made to measuring the financial performance of the organizations. Ratios are of four types:
1.Short Term Liquidity Ratios
2.Long Term Credit Risk Ratio
3.Profitability Ratio
4.Market Ratio
Graphical Analysis Of Current Ratios
0.25
0.22
0.16
0.13
0
0.05
0.1
0.15
0.2
0.25
0.3
2009 2010 2011 2012
Graphical Analysis
-20,786,501
-26772325
-33,177,503-35000000
-30000000
-25000000
-20000000
-15000000
-10000000
-5000000
0
2010 2011 2012
NET PROFIT/LOSS
-40,000,000
-20,000,000
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
2012 2011
Revenue Operating Expenses Operating loss
Position of Profit / Loss
Ratios 2012 2011 Interpretations
Current ratio 0.13 0.16
The company has an ability to pay
off the short term debts in 2011 in
compare with 2012
Quick Ratio 0.11 0.12The company has an ability to pay
off the short term debts
Working Capital (144445613) (88221403)
The company has more current
liabilities then current assets in both
the years
Cash flows from operations to
current liabilities(0.065) (0.015)
In comparative with 2011 the
company is cash deficit for paying
their short term liabilities
Receivables turnover rate 34.6 51.2 The receivable turnover rate with
respect to days is slow in 2012 than
in 2011. In 2012 in 10 days
receivable are collected while in
2011 the collectable rate of
receivables is 7 days. So, the
company is least concern about the
recovery of their receivables in 2012
Days to collect average accounts
receivable10 7
Short term Liquidity Ratio:
Short term Liquidity Ratio:
Inventory turnover rate 28.39 29.75It means how quickly the inventory
sell from the ware houses. In 2012
and 2011 the days to sell the
inventory is same, it means the PIA
sells their inventory in 13 days
which shows the company has good
inventory turnover rate with respect
to days.
Days to sell average inventory 13 13
Operating Cycle 23 20
The Co. shows the good position in
2012 that they can easily invested in
inventory and converts back into
the cash
Long Term Credit Risk:
Debt ratio 185% 162%It indicates the relative size
of the equity position
Profitability Ratios:
Gross profit rate -19% -15%
It shows the profitability of the
company but PIA has very low gross
profit rate in both the years
Operating expense ratio 18.74% 14%
Management’s ability to control
expenses but PIA has more expenses
than revenue
Net income as a percentage of net
sales-29.5% -22%
Due to the losses the management is unable to control the cost of company. The other reason is due to decrease of net sales affects the income of the company.
Return on assets -0.16 -0.14.
The Co. has faces loss in both the year so in compare with 2011,the PIA has negative productivity of assets and not liable to pay their debts in respect of their assets.
Return on equity 32% 31%
The rate of return earned on the
shareholders equity is also low in
comparison of 2011. This shows what
the shareholders earned this year is
low than in 2011.
Investment or Market Ratios
Earnings per share -11 -9.73
Earning per share is -11 in
2012 which shows that
earning is very low.
Market value per share 4.07 1.97It shows the market value
of share
CONCLUSION
In general, the ratios show the continuous improvement trend in financial statements
over the years. The resolution of circular debt will raise the position of the
company. In short, financial ratios help us to profile a company easily.