FINAL REPORT

COMPANY: Mitchell’s Fruit Farms Limited

For the fulfillment

Of the course

Analysis of Financial Statement

_____________________________

Submitted to

Mr. Nadeem Khan

By:

Shahnawaz Bhamani (8303)

Syed Muhammad Noman Mazhar (7997)

Syed Ramiz Gohar (0000)

BBA-H

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TABLE OF CONTENT

Introduction to Mitchell’s………………………………………………………............................2

Mission Statement………………………………………………….……..........................2

Vision of Company……………………………………………………...………………...2

Mitchell’s Strength………………………………………………………………………...2

Mitchell’s Weakness………………………………………………………………………3

Financial Ratio Analysis

Introduction ………………………………………………………………………………………3

How to analyze business using financial ratios……………………………..…………………….3

What You Should Know Before Getting Started ………………………………………………..4

Purpose of Financial Ratio Analysis………………………………………..…………………......4

Why use Financial Ratio Analysis? ................................................................................................4

Balance Sheet of Mitchell’s…………………………………………………………………...…..5

Income Statement of Mitchell’s………………………………………………………………..…7

Basic Tools of Financial Analysis

1. Trend Analysis………………………………………………………………………....…8

Mitchell’s Trend Analysis of Income Statement……...……………….……………………8

Mitchell’s Trend Analysis of Balance Sheet………………………………………………..9

2. Common Size Analysis………………………………………………………………..…10

Mitchell’s Common Size Analysis Income Statement…………………………………….10

Mitchell’s Common Size Analysis of Balance Sheet …………………………………......11

3. Ratio Analysis

Liquidity Ratios……………………………………………………………………...…..13Operating / Activity Ratios…………………………………………………………..….14Solvency Ratios………………………………………………….……………………....14Investment Ratios………………………………………………….…………………....15Profitability Ratios……………………………………………….….……………….….16

4. Industry Comparison…………………………………………………………………….175. Balance Sheet Forecasting……………………………………………………………….196. Income Statement Forecasting…………………………………………………………..20

References……………………………………………………………….….……………………21

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Introduction to Mitchell’s

Mitchell’s fruit farm limited is one of the oldest industries still existing in Pakistan. It was established in 1933 by Francis J. Mitchell under the name of Indian Mildura Fruits Farm LTD. After the country gained independence in 1947, the company name was changed to Mitchell’s Fruit Farms LTD. with the brand name of Mitchell’s.

The result of their efforts is that today they are among the market leaders in all our product categories. Not only that, but their products are also gaining a market abroad with exports to several parts of the world including UK, USA, Canada, the Middle-East and South-West Asia where already Mitchell’s is a name to reckon with.

Mission & Vision Statement of the Company

1. To be a leader in the markets we serve by providing quality products to our customers

while learning from their feedback to set even high standard.

2. To be a company that continuously enhance its superior technological skills to remain

international competitive in this day and age of increasing challenge.

3. To be a company that attracts and retains competent people by creating a culture that

fosters innovation, promotes individual growth and rewards initiative and performance.

4. To be a company which optimally combines its people, technology, management

systems, and market opportunities to achieve profitable growth while providing fair

returns to its shareholders.

5. To be a company that Endeavour’s to set the highest standards incorporate ethics.

6. To be a company that fulfills its social responsibility.

Mitchell’s Strength:

Oldest company of Pakistan.

ISO 9001 Award in 1998.

International recognition.

Own reputation in market.

Own growing and processing facilities at one location.

Pioneer in Pakistan for chocolate production.

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Single national company that has variety in flavors.

Have more fruit content.

Mitchell’s Weakness:

Less support of Promotions.

Hardly advertising on the Media.

Contended with their brand name.

Not serious in promoting its brands.

Very less packaging variants.

Don’t have any short term and long-term decision-making plan.

Decreasing growth rate and eventually losing market shares.

Financial Ratio Analysis

Introduction

A sustainable business and mission requires effective planning and financial management. Ratio analysis is a useful management tool that will improve your understanding of financial results and trends over time, and provide key indicators of organizational performance. Managers will use ratio analysis to pinpoint strengths and weaknesses from which strategies and initiatives can be formed. Funders may use ratio analysis to measure your results against other organizations or make judgments concerning management effectiveness and mission impact.

How to analyze business using financial ratios

Ratios are use to evaluate the performance of a business and identify potential problems. Each ratio informs about factors such as the earning power, solvency, efficiency, and debt load of your business. They are use to measure the relationship between two or more components of the financial statements and have greater meaning when the results are compare to industry standards for businesses of similar size and activity.

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What You Should Know Before Getting Started

• The Purpose of Financial Ratio Analysis

• Why Use Financial Ratio Analysis?

• Basic Tools of Financial Analysis

Trend Analysis Common-Size Analysis Component Percentage Ratio Analysis

Purpose of Financial Ratio Analysis

A sustainable business and mission requires effective planning and financial management. Ratio analysis is a useful management tool that will improve your understanding of financial results and trends over time, and provide key indicators of organizational performance. Managers will use ratio analysis to pinpoint strengths and weaknesses from which strategies and initiatives can be form. Funders may use ratio analysis to measure your results against other organizations or make judgments concerning management effectiveness and mission impact.

Why use Financial Ratio Analysis?

Financial ratio analysis can be use in two different but equally useful ways. You can use them to examine the current performance of your company in comparison to past periods, from the prior quarter two years ago. Frequently, this can help you identify problems that need fixing. Even better, it can direct your attention to potential problems that can be avoided. In addition, you can use these ratios to compare the performance of your company against that of your competitors or other members of your industry.

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Balance Sheet of Mitchell’s

Mitchell’s Food Farm Pakistan Ltd.Balance Sheet

Year Ended 2012 & 2013  2013 2012AssetsNon-current assets    

Property, Plant and Equipments393,166,181 12,491,433

Intangible assets1,077,596 1,285,370

Biological assets9,573,000 9,505,667

Long term Receivables750,000 _

 Total Current Liabilities404,566,777 375,502,685

Current Assets

Stores and spares15,026,848 12,491,433

Stock in trade327,371,490 342,532,608

Trade debt56,548,807 59,816,430

Advances, Deposits, Prepayments and other receivables

84,008,075 11,387,684

Cash and Bank Balance37,800,677 12,354,863

Total Current Assets520,755,897 438,583,018

Total Assets925,322,674 814,085,703

 

Equity and Liabilities

Capital and Reserves

Authorized Capital 200,000,000 100,000,000

Issued, Subscribed and Paid up capital63,000,000 50,400,000

Reserves9,635,878 9,635,878

 Unappropriated Profit454,469,244 372,529,248

Total527,105,122 432,565,126

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Non-current Liabilities   

Deferred Liabilities111,235,470 93,012,838

  Current LiabilitiesShort term running finances-Secured 97,102,844 140,987,776

Creditors, accrued and other liabilities 188,394,095 146,322,898

Accrued finance cost on short term finances 1,485,143 1,197,065

Total Liabilities 286,982,082 288,507,739

Total Liabilities & Shareholder Equity925,322,674 814,085,703

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Income Statement of Mitchell’s

Mitchell’s Food Farm Pakistan Ltd.Profit & Loss StatementYear Ended 2012 & 2013

  2013 2012

Net Sales2,084,261,537 1,884,503,125

Cost of Sales1,546,820,121 1,421,735,606

Gross Profit537,441,416 462,767,519

Marketing and distribution Expense248,456,191 206,795,747

Administrative Expense82,867,912 84,567,766

Other operating expense14,221,178 12,104,042

Other operating income12,534,263 16,023,676

Profit from operation204,430,398 175,323,640

Finance Cost17,557,660 22,964,482

Profit before taxation186,872,738 152,359,158

Taxation54,532,742 44,009,003

Profit for the year132,339,996 108,350,155

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Basic Tools of Financial Analysis

1. TREND ANALYSIS (Horizontal) Trend analysis is one of the tools for the analysis of the company’s monetary statements for the investment purposes. Investors use this analysis tool a lot in order to determine the financial position of the business. In a trend analysis, the financial statements of the company are comparing with each other for the several years after converting them in the percentage.

Mitchell’s Trend Analysis

Trend PercentageIncome Statement Analysis

$ change Trend %

$ change Trend %

2013 2012 2013 2012

Net Sales 2,084,261,5371,884,503,12

5 199,758,412 10.6090,254,80

8 5.03

Cost of Sales 1,546,820,1211,421,735,60

6 125,084,515 8.8021,604,00

7 1.54

Gross Profit 537,441,416 462,767,519 74,673,897 16.1468,650,80

1 17.42Administrative Expense 82,867,912 84,567,766 (1,699,854) (2.01)

17,828,775 26.71

Marketing and distribution Expense 248,456,191 206,795,747 41,660,444 20.15

23,391,565 12.75

Other operating expense 14,221,178 12,104,042 2,117,136 17.49 3,730,248 44.55Other operating income 12,534,263 16,023,676 (3,489,413) (21.78) 5,116,693 46.91

operating profit 204,430,398 175,323,640 29,106,758 16.6028,816,90

6 19.67

Financial Charges 17,557,660 22,964,482 (5,406,822) (23.54)(15,395,986)

(40.14)

Profit before taxation 186,872,738 152,359,158 34,513,580 22.65

44,212,892 40.88

Taxation 54,532,742 44,009,003 10,523,739 23.91 9,287,946 26.75

Profit of the year 132,339,996 108,350,155 23,989,841 22.1434,924,94

6 47.57

Interpretation and Recommendation on Trend Analysis of Income Statement:As per the trend analysis by comparing the trend percentage between 2013 and 2012, Mitchell’s net income has decreased by twice throughout year, which creates alarming situation for the firm, and significant drop in its profitability.

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Trend Percentage        

Balance sheet analysis 2013 2012

Assets$ change Trend

%$ change Trend

%Non-current assets    Property, Plant and Equipments 393,166,181 364,711,648 28454533 7.80 41282826 12.76

Intangible assets 1,077,596 1,285,370 (207774)

(16.16) (321342) (20.00)Biological assets 9,573,000 9,505,667 67333 0.71 2372667 33.26Long term Receivables 750,000 _ 750000 Total Non Current Assets 404,566,777 375,502,685 29,064,092 7.74 43,334,151 13.05Current AssetsStores and spares 15,026,848 12,491,433 2535415 20.30 3197531 34.40

Stock in trade 327,371,490 342,532,608 (15161118) (4

.43) 30466632 9.76

Trade debt 56,548,807 59,816,430 (3267623) (5

.46) (3428451) (5.42)Advances, Deposits, Prepayments and other receivables 84,008,075 11,387,684 72620391 637.71 (21680431) (65.56)Cash and Bank Balance 37,800,677 12,354,863 25445814 205.96 (1224908) (9.02)Total Current Assets 520,755,897 438,583,018 82172879 18.74 7330373 1.70Total Assets 925,322,674 814,085,703 111236971 13.66 50664524 6.64 Equity and LiabilitiesCapital and ReservesAuthorized Capital 200,000,000 100,000,000 100000000 100.00 0 0.00Issued, Subscribed and Paid up capital

63,000,000 50,400,00012600000 25.00 0 0.00

Reserves 9,635,878 9,635,878 0 0.00 0 0.00 Unappropriate Profit 454,469,244 372,529,248 81939996 22.00 73070155 24.40Total 527,105,122 432,565,126 94539996 21.86 73070155 20.33

Non-current Liabilities   

Deferred Liabilities 111,235,470 93,012,838 18222632 19.59 13302778 16.69  Current LiabilitiesShort term running finances-Secured 97,102,844 140,987,776 (43884932) (31.13) (13806805) (8.92)Creditors, accrued and other 188,394,095 146,322,898 42071197 28.75 (20211010) (12.14)

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liabilities Accrued finance cost on short term finances 1,485,143 1,197,065 288078 24.07 (1690594) (58.55)Total Current Liabilities 286,982,082 288,507,739 (1525657) (0.53) (35708409) (11.01)Total Liabilities & Shareholder Equity 925,322,674 814,085,703 111236971 13.66 50664524 6.64

Interpretation and Recommendation on Trend Analysis of Balance Sheet:Mitchell’s balance sheet trend analysis indicates the increase in Equity and Current Assets, which shows quite good position and reliability of the company.2. Common Size Analysis Common Size Analysis is a company financial statement that displays all items as percentages of a common base figure. This type of financial statement allows for easy analysis between companies or between time periods of a company. Formatting financial statements in this way reduces the bias that can occur when analyzing companies of differing sizes. It also allows for the analysis of a company over various time periods, revealing, for example, what percentage of sales is cost of goods sold and how that value has changed over time.Common Size Balance Sheet: A common size balance sheet expresses each item on the balance sheet as a percentage of total assets. Common Size Income Statement: A common size income statement expresses each income statement category as a percentage of total sales revenues.

Mitchell’s Common Size Analysis

COMMON SIZE        Income Statement Analysis        

  2013 2012Net %

2013Net %

2012

Net Sales2,084,261,537 1,884,503,125

100 100

Cost of Sales1,546,820,121 1,421,735,606 74.21 75.44

Gross Profit537,441,416 462,767,519

25.79 24.56

Administrative Expense248,456,191 206,795,747

3.98 4.49

Distribution and marketing Expense82,867,912 84,567,766

11.92 10.97

Other operating expense14,221,178 12,104,042

0.68 0.64

Other operating income12,534,263 16,023,676

0.60 0.85

Profit from operation204,430,398 175,323,640

9.81 9.30

Finance cost17,557,660 22,964,482

0.84 1.22

Profit before taxation186,872,738 152,359,158

8.97 8.08

Taxation54,532,742 44,009,003

2.62 2.34Profit of the year 132,339,996 108,350,155 6.35 5.75

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Interpretation and Recommendation on Common-Size Income Statement Analysis:The net income of Mitchell’s is increase by 1% as per common size financial analysis by decrease in 1% of gross profit and some changes in expenses including increase in administrative expense and taxation and, which is not beneficial for the firm.

COMMON SIZEBalance sheet analysis

2013 2012 Net % 2013 Net % 2012Non-current assetsProperty, Plant and Equipments 393,166,181 12,491,433 42.48 44.80

Intangible Assets 1,077,596 1,285,370 0.11 0.15

Biological Assets 9,573,000 9,505,667 1.03 1.16

Long term recievables 750,000 _ 0.08 0

404,566,777 375,502,685 43.72 46.12

Current AssetsStores and spares and loose tools 15,026,848 12,491,433 1.62 1.53

Stock in trade 327,371,490 342,532,608 35.37 42.07

Trade debt 56,548,807 59,816,430 6.11 7.34

Advance, deposits, prepayments and other receivables

84,008,075 11,387,684 9.07 1.39

Cash and bank balances 37,800,677 12,354,863 4.08 1.51

520,755,897 438,583,018 56.27 53.87

Total Assets 925,322,674 814,085,703 100 100

Capital and ReservesAuthorized Capital 200000000 100000000 21.61 12.28

Issued, subscribed and Paid up Capital 63000000 50400000 6.80 6.19

Reserves 9,635,878 9,635,878 1.041 1.18

Unappropriate Profit 454,469,244 372,529,248 49.11 45.76

527,105,122 432,565,126 56.96 53.13

Non-current Liabilities

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Deferred liabilities 111,235,470 93,012,838 12.02 11.42

Current LiabilitiesShort term running finances-Secured 97,102,844 140,987,776 10.49 17.31

Creditors, accrued and other liabilities 188,394,095 146,322,898 20.35 17.97

Accrued finance cost on short term finances 1,485,143 1,197,065 0.16 0.14

Total Liabilities 286,982,082 288,507,739 31.01 35.4

Total Liabilities & Shareholder Equity

925,322,674 814,085,703 100 100

Interpretation and Recommendation on Common-Size Income Statement Analysis:As per common size of the year 2013 with the comparison of the year 2012 the current assets increased up to 3% from 56.28% to 53.87% and liabilities also decreased by 4% which is good signal for the company. The change in liabilities is 4 times more than change in assets, so Mitchell’s is in stable position.

3. Ratio Analysis

Types of Ratio

There are four main types of ratios, which use to analyze financial performance of a company.

1. Liquidity Ratio2. Efficiency Ratio/ Operating Ratio3. Solvency Ratio4. Profitability Ratio

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Mitchell’s Ratio Analysis 2013

FORMULA CALCULATION

RATIO RATIO RECOMMENDATION

Liquidity Ratios 2013 2012

1. Current Ratio

Current Assets / Current

Liabilities 520755897/ 286982082 1.81 1.52

Current Ratio shows the financial strength of the company. It measures the short-term debt paying ability. There is 1.81 in current assets to pay Rs. 1 in current liabilities, which are good enough.

2.L

Quick Ratio

Quick Assets/ Current

Liabilities

*Quick Assets= Cash+

Receivables +Trade Debt

178357559 / 286982082

*Q.A= 37800677+84008075+565488

07

0.620.28

The quick ratio tests whether a business can meet its obligations even if adverse conditions occur. There is 0.62 in quick assets to pay Rs. 1 in current liabilities; quick ratios between 0.5 and 1 are consider satisfactory.

3. Cash Ratio

Cash / Current Liabilities

37800677 / 286982082 0.13 0.042

Cash ratio measure the immediate amount of cash available to satisfy short-term liabilities. In general 0.5:1 or higher is preferred so cash ratio i.e. 0.13 is very good in firm and have to maintain its cash ratio.

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Activity/ Operating Ratios

4. Inventory Turnover

COGS / Inventory

1546820121/ 327371490 4.72 4.15

Inventory turnover 4.75 * indicates that how quickly inventory sells.

5.

No. of days to sell Inventory

365 /Inventory Turnover

365 / 4.72 77 88It indicates that in 77 days inventory sells and shows good turnover of firm’s inventory.

6.Receivable Turnover

Sales /Average

Receivable2084261537/

58945013 35.35 30.71

The ratio is used to calculate the firm’s debt receivables for its credit sales. However, ratio indicates 35.35 times firm collect receivables.

7.

No. of days in Receivable

365 /Receivable Turnover

365/35.35 10 12

It indicates that in 10 days collecting receivables and shows very good turnover of firm.

8. Payable Turnover

Purchases /Average Payable

1546820121/188394483 8.21 9.71

Ratio 8.21 times shows how quickly pay its debt to their suppliers.

9.No. of days in Payable

365 /Payable

Turnover365/8.21 44 38

It takes 44 days to pay debt to the firm’s suppliers.

10.Cash Conversion Cycle

No. of days in

receivable +No. of days in Inventory

–No. of days in Payable

10+77-44 43 62

The 43 days is a metric that expresses the length of time, in days, that it takes for a company to convert resource inputs into cash flows.

11.Fixed Asset Turnover

Net Sales /Avrg. Fixed

Assets

2084261537 /

390034731 5.34 5.32

It measures a company’s ability to generate net sales from fixed-asset investment. Fixed asset turnover 5.34 times shows that company has been more effective in using the investment in fixed-assets to generate revenues.

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12.Total Asset Turnover

Net Sales /Average

Total Assets

2084261537/ 925322674 2.25 2.31

It measures a company’s ability to generate net sales from asset investment. 2.25 times shows that company has been use its assets to quite efficiently generate sale

Solvency Ratios

13.

Financial Leverage Ratio or Debt to equity Ratio

Total Debt / S.H.E

398217552/ 527105122

0.75 0.88

It indicates the proportion of equity and debt the company is using to finance its assets.

14. Equity Ratio

Total S.H.E /

Total Assets

527105122/ 925322674

0.57 0.53

It measure how much shareholders would receive in the event of company-wide liquidation. 0.57 indicates the average position of ratio shareholder may receive.

15. Debt Ratio

Total Liabilities /

Total Assets

398217552 / 925322674 0.43 0.46

It indicates the proportion of debt a company has relative to its assets. Debt ratio is less than 1 i.e. 0.43 shows company has more assets than debt.

16.Interest Coverage Ratio

Operating Income / Interest Charges

204430398/ 17557660 11.64 7.63

Interest Coverage Ratio is the indicator of company’s ability to meet its interest payment obligations. Mitchell’s is effectively able to meet its interest payment obligation by the ratio of 11.64

Investment Ratios

17.Earnings Per Share (E.P.S.)

Net income/

Number of shares

outstanding

132339996/6300000 21.01 17.20

The portion of a company’s profit allocated to each outstanding share of common stock. Mitchell’s has Rs. E.P.S. of 21.01

18.Price – Earnings Ratio

Market price per share / E.P.S

500 / 21.01 23.8 20.93

Price earnings ratio is the measure of investor’s expectations about the company’s future prospects. Mitchell’s p/e ratio explains that an investor is willing to pay Rs.23.8 for Rs.1 of current earnings.

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19. Price to book ratio

Common S.H.E/No. of shares

outstanding

527,105,122/ 6300000 83.66 85.82

Book value per share is the recorded value of net assets underlying each share of common stock.

20. Dividend Yield

Dividend per share /

Market price per

share

7.50 / 500 0.015 0.020

Dividend expressed as a rate of return on the market price of the stock i.e. 0.015.

Profitability Ratios

21. Return on asset

Net Income /

Total Assets)*100

(132339996 / 925322674)*100 14.3 13.3

ROA indicates that how profitable company’s assets are generating profit. Mitchell’s 14.3% get return from its assets.

22.

Return on equity or Return on net worth

(Net Income /

S.H.E.)*100

(132339996 / 527105122)*100 25.1 25.0

ROE indicates company’s profitability by measuring how much profit generated with the money invested by common stock owners. Mitchell’s generated about 25.0% of profit as per S.H.E.

23.

Return on sales or Net profit margin

(Net Income /

Net Sales)*100

(132339996 / 2084261537)*10

06.3 5.7

The indicator of management’s ability to control cost. Mitchell’s has 6.3% profit margin and that is good enough.

24. Gross Margin

(Gross Profit /

Net Sales)*100

(537441416 / 2084261537)*10

025.7 24.5

It shows the measure of the profitability of the company’s product.

25. Operating Margin

(Operating Income /

Net Sales)*100

(204430398/ 2084261537)*10

09.80 9.30

It indicates the measure of the profitability from operating profit, which is 9.80% of Mitchell’s.

26. Earnings Pre Tax

(Pre Tax Profit / Net Sales)*100

(186872738/ 2084261537)*10

08.96 8.00

 The higher the pre-tax profit margin, the more profitable the company and ratio shows 8.96 with good indicator.

As the performance evaluated by different ratios, it is shown that Mitchells Company is performing well in term of their own financing and borrowed capital and utilizing enough to generate Profits from it. Furthermore, investors are also willing to invest in the business to earn maximum output.

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4. Food Industry 2013 Comparison:

No. Ratios Mitchell’s Fruit Farms

National Foods Interpretation

2013 2013

1. Current Ratio 1.81 1.28 Mitchell’s has greater current ratio than National Foods; it means Mitchell’s can easily pay its shorts term debt.

2. Quick Ratio 0.62 0.50 Both company is in good position to meet adverse situation if occurs.

3. Cash Ratio 0.13 (0.33) Mitchell’s can easily pay its immediate cash amount for short term liabilities where as National foods have a negative amount and not able to meet its short term liabilities.

4. No. of days to sell inventory

77 113 Mitchell’s take less days to sell its inventory as compared to National Foods.

5. No. of days to receive 10 20 Its shows that Mitchell’s can quickly recover its receivables than National Foods.

6. Payable turnover 44 17 It shows that National Foods efficiently pay their debts to their supplier, whereas Mitchell’s takes more days to pay to their suppliers.

7. Cash Conversion cycle

43 116 National Foods resources take more than to convert in cash form whereas Mitchell’s takes less.

8. Total Asset Turnover 2.25 2.31 Both companies are efficiently using their assets to generate sales.

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9. Debt to Equity 0.75 1.54 Shows the percentage to owner’s investment into the business and remaining shows the debt portion which company has borrowed.

10. Equity Ratio 0.57 0.39 Higher ratio shows that more investors are willing to invest in business and firm is less risky to lend loans.

11. Debt Ratio 0.43 0.60 It shows that National Foods are using more debts to acquire assets where as Mitchell’s uses less debt.

12. Interest Coverage Ratio

11.64 14.08 Both companies can easily pay interest expenses on debt which they have borrowed. National Foods has higher ratio.

13. Earning Per Share 21.01 13.01 Mitchell’s Earning per share is greater than National Foods and it is a part of Company’s income.

14. Price Earning Ratio 23.8 27.72 It shows that investors of National foods are paying higher amount than Mitchell’s investors.

15. Dividend Yield Ratio 0.015 2.77 National Foods are getting more dividends than Mitchell’s on each stock.

16. Return on Assets 14.3 15.84 National Foods are generating more than Mitchell’s to generate profit.

17. Return on Equity 25.1 43.96 Similarly, National Foods is generating more profit on its equity financing than Mitchell’s.

18. Net Profit Margin 6.3 7.88 A national food has higher return on each sale of inventory than Mitchell’s.

19. Operating Margin 9.80 12.33 National Foods has higher operating margin

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which is good sign.20. Gross Profit Margin 25.7 34.61 National Food has high

profit margin than Mitchell’s.

5. Mitchell’s Balance Sheet Forecasting:

Balance sheet analysis

Amount Change

% Change Forecasting 2014 Forecasting 2015

AssetsNon-current assetsProperty, Plant and Equipments 28454533 7.80 423840715.6 456908454.7

Intangible assets (207774)

(16.16) 903407.6874 757376.0943Biological assets 67333 0.71 9640809.951 9709100.23Long term Receivables 750000 750000 750000 Total Non Current Assets 29,064,092 7.74 435880444 469617804.1Current AssetsStores and spares 2535415 20.30 18076882.04 21745988.53Stock in trade (15161118) (4.43) 312881430.7 299032727.9Trade debt (3267623) (5.46) 53459686.13 50539316.26Advances, Deposits, Prepayments and other receivables 72620391 637.71 619735906.4 4571853285Cash and Bank Balance 25445814 205.96 115654150.2 353852987Total Current Assets 82172879 18.74 618324680 734173942.4Total Assets 111236971 13.66 1051759106 1195471858 Equity and LiabilitiesCapital and ReservesAuthorized Capital 100000000 100.00 400000000 800000000Issued, Subscribed and Paid up capital 12600000 25.00 78750000 98437500Reserves 0 0.00 9635878 9635878 Unappropriate Profit 81939996 22.00 554432423.4 676383091.1Total 94539996 21.86 642307465.3 782688049.7

Non-current Liabilities

Deferred Liabilities 18222632 19.59 133028193.2 159090442.9

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 Current LiabilitiesShort term running finances-Secured (43884932) (31.13) 66877871.12 46060954.15Creditors, accrued and other liabilities 42071197 28.75 242561728.3 312303801.5Accrued finance cost on short term finances 288078 24.07 1842548.007 2285963.816Total Current Liabilities (1525657) (0.53) 285464492.8 283954928.8Total Liabilities & Shareholder Equity 111236971 13.66 1051759106 1195471858

6. Mitchell’s Income Statement Forecasting:

Income Statement Amount Change % ChangeForecasting

2014Forecasting

2015

Net Sales 199,758,412 10.60 2305194455 2549546390Cost of Sales 125,084,515 8.80 1682909591 1830972233Gross Profit 74,673,897 16.14 624164972.2 724882565.7Administrative Expense (1,699,854) (2.01) 81202225.91 79570020.93Distribution and marketing Expense 41,660,444 20.15 298509421.7 358646224.4Other operating expense 2,117,136 17.49 16708625.41 19631155.95Other operating income (3,489,413) (21.78) 9804725.767 7669589.138Profit from operation 29,106,758 16.60 238369381.5 277942823.5Finance cost (5,406,822) (23.54) 13423835.32 10263289.92Profit before taxation 34,513,580 22.65 229204602.2 281125809.2Taxation 10,523,739 23.91 67572990.69 83731514.38Profit of the year 23,989,841 22.14 161641435 197430514.7

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References:

Mitchell’s_Annual_Report_2013. Books:

Accounting The Basis for Business Decisions by Meigs&Meigs 9th Edition Accounting The Basis for Business Decisions by Meigs Williams HakaBettner 11 th

Edition Financial Reporting & Analysis by Charles H. Gibson 12th Edition Analysis and use of Financial Statements by G.I.White, A.C.Sondhi, Dov Fried 3 rd

Edition https://www.zionsbank.com/pdfs/biz_resources_book-6.pdf http://www.investopedia.com/terms/c/commonsizefinancialstatement.asp http://www.readyratios.com/reference/analysis/trend_analysis.html http://www.cliffsnotes.com/more-subjects/accounting/accounting-principles-ii/financial-

statement-analysis/trend-analysis

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