Common Size Statements            Vertical Analysis          31-Sept-12 31-Sept-11 31-Sept-10 31-Sept-09 31-Sept-08Balance Sheet Rupees in

'000% Rupees in

'000% Rupees in

'000% Rupees in

'000% Rupees in

'000%

                   NON-CURRENT ASSETS                     Fixed assets                    Capital work in progress 13,281,922 1.632% 14,503,179 1.900% 1,332,093 0.203% 5,196,841 0.714% 17,925,373 2.485%Operating fixed assets at cost

698,734,955 85.831% 623,887,372 81.723% 597,550,737 91.036% 585,549,778 80.443% 543,536,774 75.348%

Accumulated Depreciation (347,305,229) -42.662% (314,961,729)

-41.257% (294,626,169) -44.886% (269,058,792) -36.963% (239,179,759) -33.156%

Property, Plant and Equipment

351,429,726 43.169% 308,925,643 40.466% 302,924,568 46.150% 316,490,986 43.480% 304,357,015 42.191%

Intangible assets 1,285,370 0.158% 1,606,712 0.210% 1,060,580 0.162% 1,325,725 0.182% 1,657,156 0.230%Biological Assets 9,505,667 1.168% 7,133,000 0.934% 6,875,933 1.048% 5,397,600 0.742% 5,132,000 0.711%Longterm Loans and Deposits

0 0.000% 0 0.000% 751,753 0.115% 1,110,482 0.153% 716,334 0.099%

Total Non Current Assets 375,502,685 46.126% 332,168,534 43.511% 312,944,927 47.677% 329,521,634 45.270% 329,787,878 45.717%                     CURRENT ASSETS                    Stores, spares and loose tools

12,491,433 1.534% 9,293,902 1.217% 12,426,849 1.893% 12,781,281 1.756% 13,305,761 1.845%

Stock in trade 342,532,608 42.076% 312,065,976 40.877% 230,917,920 35.180% 260,382,527 35.771% 288,698,972 40.021%Trade debts 59,816,430 7.348% 63,244,881 8.284% 40,716,666 6.203% 58,674,183 8.061% 39,067,739 5.416%Advances, deposits, prepayments and other receivables

11,387,684 1.399% 33,068,115 4.332% 51,252,732 7.808% 53,330,558 7.327% 39,601,514 5.490%

Cash and bank balances 12,354,863 1.518% 13,579,771 1.779% 8,127,597 1.238% 13,217,682 1.816% 10,909,851 1.512%Total Current Assets 438,583,018 53.874% 431,252,645 56.489% 343,441,764 52.323% 398,386,231 54.730% 391,583,837 54.283%TOTAL ASSETS 814,085,703 100.000% 763,421,179 100.000% 656,386,691 100.000% 727,907,865 100.000 721,371,715 100.000%

%EQUITY AND LIABILITIES                    SHARE CAPITAL AND RESERVES

         

Authorised capital 100,000,000 12.284% 100,000,000 13.099% 100,000,000 15.235% 100,000,000 13.738% 100,000,000 13.862%Issued, subscribed and paid-up capital

50,400,000 6.191% 50,400,000 6.602% 50,400,000 7.678% 50,400,000 6.924% 50,400,000 6.987%

Reserves  9,635,878 1.184% 9,635,878 1.262% 9,635,878 1.468% 9,635,878 1.324% 9,635,878 1.336%Unappropriate Profits 372,529,248 45.760% 299,459,093 39.226% 246,193,884 37.507% 209,806,010 28.823% 200,794,368 27.835%Total Equity 432,565,126 53.135% 359,494,971 47.090% 306,229,762 46.654% 269,841,888 37.071% 260,830,246 36.158%                    NON-CURRENT LIABILITY                    Deferred Tax                   

45,360,346 5.572%                  

43,565,335 5.707%                

47,253,906 7.199%                 

28,478,162 3.912%                     

30,700,000 4.256%

Long term loan - Secured 0 0.000% 0 0.000% 0 0.000% 0 0.000% 7,368,418 1.021%Retirement and other benefits

47,652,492 5.853% 36,144,725 4.735% 28,565,965 4.352% 22,000,528 3.022% 18,907,813 2.621%

Total Non Current Liabilities 93,012,838 11.425% 79,710,060 10.441% 75,819,871 11.551% 50,478,690 6.935% 56,976,231 7.898% CURRENT LIABILITIES                    Short term running finances - secured

140,987,776 17.319% 154,794,581 20.276% 166,615,728 25.384% 307,671,564 42.268% 288,711,025 40.023%

Creditors, Accrued and Other Liabilities 146,322,898

17.974%166,533,908

21.814%103,254,409

15.731%87,816,200

12.064%89,805,848

12.449%

Accrued finance cost 1,197,065 0.147% 2,887,659 0.378% 4,466,921 0.681% 12,099,523 1.662% 10,311,523 1.429%Current portion of long term loans - secured

0 0.000% 0 0.000% 0 0.000% 0 0.000%14,736,842

2.043%

Total Liabilities 288,507,739 35.439% 324,216,148 42.469% 274,337,058 41.795% 407,587,287 55.994% 403,565,238 55.944%TOTAL EQUITY AND LIABILITIES 814,085,703

100.000%763,421,179

100.000%656,386,691

100.000%727,907,865

100.000% 721,371,715

100.000%

VERTICAL INCOME STATEMENT

INCOME STATEMENT                                         

Sales1,884,503,

125100.00

0%1,794,248,

317100.00

0%1,376,861,

492100.00

0%1,255,064,

266100.00

0%1,038,637

,296100.00

0%

less:Cost of Goods Sold(1,421,735,

606)

-75.444

%(1,400,131,

599)

-78.034

%(1,073,513,

561)

-77.968

%(1,020,067,

729)

-81.276

%(848,823,

705)

-81.725

%

Gross Profit462,767,51

924.556

%394,116,71

821.966

%303,347,93

122.032

%234,996,53

7 0189,813,5

9118.275

%Less: Operating Expenses  

                

Administration expenses(84,567,76

6)

-4.488

%(66,738,99

1)

-3.720

%(60,990,98

3)

-4.430

%(49,421,20

2)

-3.938

%(40,779,9

24)

-3.926

%

Distribution & Marketing expenses

(206,795,747)

-10.973

%(183,404,1

82)

-10.222

%(135,992,9

53)

-9.877

%(124,569,6

12)

-9.925

%(108,184,

873)

-10.416

%

Other operating expenses

(12,104,042)

-0.642

% (8,373,794)

-0.467

% (7,056,707)

-0.513

% (1,947,763)

-0.155

%(1,535,47

0)

-0.148

%

Operating Profit159,299,96

48.453

%135,599,75

17.557

% 99,307,2887.213

% 59,057,9604.706

%39,313,32

43.785

%Add: Other operating income 16,023,676

0.850% 10,906,983

0.608% 7,513,001

0.546% 12,962,644

1.033% 6,123,349

0.590%

Earning Before Interest and Tax

175,323,640

9.303%

146,506,734

8.165%

106,820,289

7.758% 72,020,604

5.738%

45,436,673

4.375%

less: Finance Cost(22,964,48

2)

-1.219

%(38,360,46

8)

-2.138

%(37,612,52

6)

-2.732

%(53,487,02

7)

-4.262

%(32,323,2

68)

-3.112

%

Earning Before Tax152,359,15

88.085

%108,146,26

66.027

% 69,207,7635.026

% 18,533,5771.477

%13,113,40

51.263

%

less: Taxation(44,009,00

3)

-2.335

%(34,721,05

7)

-1.935

%(22,739,88

9)

-1.652

% (4,481,935)

-0.357

%(4,775,86

5)

-0.460

%

PROFIT FOR THE YEAR108,350,15

55.750

% 73,425,2094.092

% 46,467,8743.375

% 14,051,6421.120

% 8,337,5400.803

%

31-Dec-12 31-Dec-11 31-Dec-10 31-Dec-09 31-Dec-08

Balance Sheet Rupees in '000

Rupees in '000 Rupees in '000

Rupees in '000

Rupees in '000

NON-CURRENT ASSETS Fixed assetsCapital work in progress 13,281,922 14,503,179 1,332,093 5,196,841 17,925,373Operating fixed assets at cost 698,734,955 623,887,372 597,550,737 585,549,778 543,536,774Accumulated Depreciation (347,305,229) (314,961,729) (294,626,169) (269,058,792) (239,179,759)Property, Plant and Equipment 351,429,726 308,925,643 302,924,568 316,490,986 304,357,015Intangible assets 1,285,370 1,606,712 1,060,580 1,325,725 1,657,156Biological Assets 9,505,667 7,133,000 6,875,933 5,397,600 5,132,000Longterm Loans and Deposits 0 0 751,753 1,110,482 716,334Total Non Current Assets 375,502,685 332,168,534 312,944,927 329,521,634 329,787,878

CURRENT ASSETSStores, spares and loose tools 12,491,433 9,293,902 12,426,849 12,781,281 13,305,761Stock in trade 342,532,608 312,065,976 230,917,920 260,382,527 288,698,972Trade debts 59,816,430 63,244,881 40,716,666 58,674,183 39,067,739Advances, deposits, prepayments and other receivables

11,387,684 33,068,115 51,252,732 53,330,558 39,601,514

Cash and bank balances 12,354,863 13,579,771 8,127,597 13,217,682 10,909,851Total Current Assets 438,583,018 431,252,645 343,441,764 398,386,231 391,583,837TOTAL ASSETS 814,085,703 763,421,179 656,386,691 727,907,865 721,371,715EQUITY AND LIABILITIESSHARE CAPITAL AND RESERVESAuthorised capital 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000Issued, subscribed and paid-up capital 50,400,000 50,400,000 50,400,000 50,400,000 50,400,000Reserves  9,635,878 9,635,878 9,635,878 9,635,878 9,635,878Unappropriate Profits 372,529,248 299,459,093 246,193,884 209,806,010 200,794,368Total Equity 432,565,126 359,494,971 306,229,762 269,841,888 260,830,246

NON-CURRENT LIABILITYDeferred Tax          

45,360,346            43,565,335 

         47,253,906 

         28,478,162 

       30,700,000 

Long term loan - Secured 0 0 0 0 7,368,418Retirement and other benefits 47,652,492 36,144,725 28,565,965 22,000,528 18,907,813Total Non Current Liabilities 93,012,838 79,710,060 75,819,871 50,478,690 56,976,231 CURRENT LIABILITIESShort term running finances - secured 140,987,776 154,794,581 166,615,728 307,671,564 288,711,025Creditors, Accrued and Other Liabilities 146,322,898 166,533,908 103,254,409 87,816,200 89,805,848

HORIZONTAL INCOME STATEMENT

INCOME STATEMENT 31-Sept-12 31-Sept-11 31-Sept-1031-Sept-09

        31-    Sept-08

Sales1,884,503,

1251,794,248,

3171,376,861,

492 1,255,064,266 1,038,637,29681.440

%72.750

%32.564

%20.83

8%

less:Cost of Goods Sold(1,421,735,

606)(1,400,131,

599)(1,073,513,

561)(1,020,067,729

) (848,823,705)67.495

%64.950

%26.471

%20.17

4%

Gross Profit462,767,51

9394,116,71

8303,347,93

1 234,996,537 189,813,591143.801

%107.63

4%59.814

%23.80

4%Less: Operating Expenses

Administration expenses(84,567,76

6)(66,738,99

1)(60,990,98

3) (49,421,202) (40,779,924)107.376

%63.656

%49.561

%21.19

0%Distribution & Marketing expenses

(206,795,747)

(183,404,182)

(135,992,953) (124,569,612) (108,184,873)

91.150%

69.528%

25.704%

15.145%

Other operating expenses(12,104,04

2) (8,373,794) (7,056,707) (1,947,763) (1,535,470)688.296

%445.35

7%359.58

0%26.85

1%

Operating Profit159,299,96

4135,599,75

1 99,307,288 59,057,960 39,313,324305.206

%244.92

1%152.60

5%50.22

4%Add: Other operating income 16,023,676 10,906,983 7,513,001 12,962,644 6,123,349

161.682%

78.121%

22.694%

Earning Before Interest and Tax

175,323,640

146,506,734

106,820,289 72,020,604 45,436,673

285.864%

222.442%

135.097%

58.508%

less: Finance Cost(22,964,48

2)(38,360,46

8)(37,612,52

6) (53,487,027) (32,323,268)

-28.954

%18.678

%16.364

%65.47

5%

Earning Before Tax152,359,15

8108,146,26

6 69,207,763 18,533,577 13,113,4051061.85

8%724.70

0%427.76

3%41.33

3%

less: Taxation(44,009,00

3)(34,721,05

7)(22,739,88

9) (4,481,935) (4,775,865)821.488

%627.01

1%376.14

2%

-6.154

%

PROFIT FOR THE YEAR108,350,15

5 73,425,209 46,467,874 14,051,642 8,337,5401199.54

6%780.65

8%457.33

3%68.53

5%

Common Size StatementsHorizontal Analysis

31-Sept-12 31-Sept-11 31-Sept-10 31-Sept-09 31-Sept-08 31-Sept-12

31-Sept-11

31-Sept-10

31-Sept-09

Balance Sheet Rupees in '000

Rupees in '000

Rupees in '000

Rupees in '000

Rupees in '000

% Increase/Decrease Over Base Year (2008)

NON-CURRENT ASSETS Fixed assetsCapital work in progress 13,281,922 14,503,179 1,332,093 5,196,841 17,925,373 -25.904% -19.091% -92.569% -71.008%Operating fixed assets at cost 698,734,955 623,887,372 597,550,737 585,549,778 543,536,774 28.553% 14.783% 9.937% 7.730%Accumulated Depreciation (347,305,229

)(314,961,729

)(294,626,169) (269,058,792

)(239,179,759

) 45.207% 31.684% 23.182% 12.492%Property, Plant and Equipment 351,429,726 308,925,643 302,924,568 316,490,986 304,357,015 15.466% 1.501% -0.471% 3.987%Intangible assets 1,285,370 1,606,712 1,060,580 1,325,725 1,657,156 -22.435% -3.044% -36.000% -20.000%Biological Assets 9,505,667 7,133,000 6,875,933 5,397,600 5,132,000 85.223% 38.991% 33.982% 5.175%Longterm Loans and Deposits 0 0 751,753 1,110,482 716,334 -

100.000%

-100.000% 4.944% 55.023%

Total Non Current Assets 375,502,685 332,168,534 312,944,927 329,521,634 329,787,878 13.862% 0.722% -5.107% -0.081%

CURRENT ASSETSStores, spares and loose tools 12,491,433 9,293,902 12,426,849 12,781,281 13,305,761 -6.120% -30.151% -6.605% -3.942%Stock in trade 342,532,608 312,065,976 230,917,920 260,382,527 288,698,972 18.647% 8.094% -20.014% -9.808%Trade debts 59,816,430 63,244,881 40,716,666 58,674,183 39,067,739 53.110% 61.885% 4.221% 50.186%Advances, deposits, prepayments and other receivables

11,387,684 33,068,115 51,252,732 53,330,558 39,601,514

-71.244% -16.498% 29.421% 34.668%Cash and bank balances 12,354,863 13,579,771 8,127,597 13,217,682 10,909,851 13.245% 24.473% -25.502% 21.154%

Total Current Assets 438,583,018 431,252,645 343,441,764 398,386,231 391,583,837 12.002% 10.130% -12.294% 1.737%TOTAL ASSETS 814,085,703 763,421,179 656,386,691 727,907,865 721,371,715 12.852% 5.829% -9.009% 0.906%EQUITY AND LIABILITIESSHARE CAPITAL AND RESERVESAuthorised capital 100,000,000 100,000,000 100,000,000 100,000,000 100,000,000 0.000% 0.000% 0.000% 0.000%Issued, subscribed and paid-up capital

50,400,000 50,400,000 50,400,000 50,400,000 50,400,0000.000% 0.000% 0.000% 0.000%

Reserves  9,635,878 9,635,878 9,635,878 9,635,878 9,635,878 0.000% 0.000% 0.000% 0.000%Unappropriate Profits 372,529,248 299,459,093 246,193,884 209,806,010 200,794,368 85.528% 49.137% 22.610% 4.488%Total Equity 432,565,126 359,494,971 306,229,762 269,841,888 260,830,246 65.842% 37.827% 17.406% 3.455%

NON-CURRENT LIABILITYDeferred Tax                        

45,360,346                43,565,335 

                47,253,906 

               28,478,162 

            30,700,000  47.754% 41.907% 53.922% -7.237%

Long term loan - Secured 0 0 0 0 7,368,418 -100.000

%-

100.000%

-100.000

%

-100.000

%Retirement and other benefits 47,652,492 36,144,725 28,565,965 22,000,528 18,907,813 152.025

% 91.163% 51.080% 16.357%Total Non Current Liabilities 93,012,838 79,710,060 75,819,871 50,478,690 56,976,231 63.248% 39.901% 33.073% -11.404% CURRENT LIABILITIESShort term running finances - secured

140,987,776 154,794,581 166,615,728 307,671,564 288,711,025-51.166% -46.384% -42.290% 6.567%

Creditors, Accrued and Other Liabilities 146,322,898 166,533,908 103,254,409 87,816,200 89,805,848 62.932% 85.438% 14.975% -2.215%Accrued finance cost 1,197,065 2,887,659 4,466,921 12,099,523 10,311,523 -88.391% -71.996% -56.680% 17.340%

Current portion of long term loans - secured

0 0 0 0

14,736,842

-100.000

%-

100.000%

-100.000

%

-100.000

%Total Liabilities 288,507,739 324,216,148 274,337,058 407,587,287 403,565,238 -28.510% -19.662% -32.022% 0.997%TOTAL EQUITY AND LIABILITIES 814,085,703 763,421,179 656,386,691 727,907,865 721,371,715 12.852% 5.829% -9.009% 0.906%

INCOME STATEMENT

31-Sept-12 31-Sept-11 31-Sept-10 31-Sept-09 31-Sept-08

Sales 1,884,503,125 1,794,248,317 1,376,861,492 1,255,064,266 1,038,637,296less:Cost of Goods Sold (1,421,735,606) (1,400,131,599) (1,073,513,561) (1,020,067,729) (848,823,705)Gross Profit 462,767,519 394,116,718 303,347,931 234,996,537 189,813,591Less: Operating ExpensesAdministration expenses (84,567,766) (66,738,991) (60,990,983) (49,421,202) (40,779,924)Distribution & Marketing expenses (206,795,747) (183,404,182) (135,992,953) (124,569,612) (108,184,873)Other operating expenses (12,104,042) (8,373,794) (7,056,707) (1,947,763) (1,535,470)Operating Profit 159,299,964 135,599,751 99,307,288 59,057,960 39,313,324Add: Other operating income 16,023,676 10,906,983 7,513,001 12,962,644 6,123,349Earning Before Interest and Tax 175,323,640 146,506,734 106,820,289 72,020,604 45,436,673less: Finance Cost (22,964,482) (38,360,468) (37,612,526) (53,487,027) (32,323,268)Earning Before Tax 152,359,158 108,146,266 69,207,763 18,533,577 13,113,405less: Taxation (44,009,003) (34,721,057) (22,739,889) (4,481,935) (4,775,865)PROFIT FOR THE YEAR 108,350,155 73,425,209 46,467,874 14,051,642 8,337,540

Dividends 34,457,318 20,182,832 10,014,167 4,755,631 10,080,000Average Fixed Assets 353835609.5 322556730.5 321233280.5 329654756 164893939Average Inventory 327299292 271491948 245650223.5 274540749.5 144349486Tax Rate 28.88% 32.10% 32.85% 24.10% 36.41%Average Total Assets 788753441 709903935 692147278 724639790 360685857.5

COGS 1,421,735,606 1,400,131,599 1,073,513,561 1,020,067,729 848,823,705

Finance Cost 22,964,482 38,360,468 37,612,526 53,487,027 32,323,268

                                                                                            

Ratio Analysis

Mitchell’s Fruit Farms

IntroductionSince its inception in 1933, Mitchells has come a long way to reach and sustain its position as one of the top Food and Beverage Company in the industry. Along with its outstanding physical performance it has maintained steady financials even when the country is facing major economic perils. Mitchell’s is the only major food company in Pakistan today with fully integrated operations having its own growing and processing facilities at one location. Modern high-volume industrial equipment,   professional  management   and   a   trained  workforce   all   combine   to   ensure   that  Mitchell’s   continues   its dominance as the innovator, market leader and trend setter.  

Liquidity MeasuresThe  liquidity  ratios  show the ability  of  a  company to satisfy  short   term financial  obligations.  The current  ratio  is  an indicator of the company’s priorities and shows how liquid the company is.  The current ratio of Mitchell’s fruit farms in 2008 was 0.97 but even while facing adverse economic conditions they have successfully managed to consistently increase the ratio to 0.98 in the next year and by 2012, it had risen to 1.55. A rise in the current ratio means that either the company has increased its current assets while the current liabilities have remained constant, or that the current liabilities 

of the company have decreased while the current assets has remained constant. A quick look on the company financials shows that while the current liabilities have fluctuated over the five year period, the overall trend shows that they have fallen.  On  the  other  hand,   the  current  assets   show a   rising   trend  from 2008  till  2012.  This  merely   strengthens   the argument that the company has improved its liquidity position by getting itself out of the danger zone i.e. a liquidity ratio below 1 and is well in the safe zone with a current ratio of 1.55. 

The quick ratio provides us with a clearer view of the company’s liquidity position and in the case of Mitchell’s fruit farms; it seems to be in a highly detrimental state. The quick ratio has increased from 0.25 to 0.33. Though this does represent an improvement in the ratio, the company still needs to work on its financial state and reduce its dependence on stock.  In comparison to the industry, we can see that Mitchell’s has performed well and can be categorized as one of the top performers of the industry. 

Asset Management

The  asset  management   ratios  of  a   company  attempt   to   represent   the  company’s   success   in  managing   its  assets   to generate sales.  These ratios cam provide  insight  into the company’s  management of  the credit  policy  and  inventory management. The days in receivables ratio analyses the company’s credit policy and its current state in terms of credit. The days in receivable ratio of the company suggests an improvement in the credit position of the company. In 2008 the company was able to successfully recover its money in 14 days. Now this has fallen down to 12 days. Though there hasn’t been a massive change, it still represents an improvement in the books. Another positive is that the main competitor of Mitchell’s; national foods has a days in receivable ratio of 14.68 compared to 12 of Mitchells fruit farms. At the same time however, the days in payables ratio has showed a steadier more horizontal trend across the five years as the change in the ratio is only by a single day (fallen from 39 days to 38 days).  the across the board improvements in all   the ratios  is apparent in the operating cycle as well which shows a mammoth improvement from 99 days down  to 62 days whilst the 

cash conversion cycle has also fallen from 60 to 24 days. Here also, the industry average for the cash conversion cycle is below that of Mitchell’s which suggests financial stability for the company.

The fixed asset turnover ratio of Mitchell’s fruit farms is also rising which shows that the company aims to invest in the long run. This improves and strengthens investor confidence which would also improve the company’s position on the stock exchange. The asset turnover ratio has steadily risen over the five year period and currently stands at 2.31 compared to 1.44 from 2008. An increase in the capital structure of the firm means that the company has a long run performance strategy. This means that Mitchell’s is sacrificing its short term gains in order to secure grater long term gains. Similar to this ratio is the total asset turnover ratio which has also steadily increased across the five years due to a rise in both the current assets and the fixed assets and a rise in the total sales as well.

Debt ManagementThe changes in the debt to equity ratio and the debt to asset ratio represent a major change in the capital structure of the business. The overall trend visible in both these ratios is significantly positive, via this we can infer that the company wishes to decrease its reliance on debt and is paying off creditors and decreasing the load rather than taking on more loans and adversely affecting the performance and financials of the company. The debt to equity ratio has fallen from 1.77 to 0.88. The change means that either the debt has fallen or the total equity has risen; and in our case we can see that since the company has paid off its loans thereby decreasing the total debt of the company, the ratio has consistently fallen over the five years. There is a similar situation in the case of the debt to asset ratio where not only has the debt of the company decreased, but this is coupled with an increase in the assets. The ratio has fallen from 63.84% down to 46.86%. This will not only strengthen investor confidence but at the same time it will also improve the company’s position in the market. Also, in comparison to the industry, Mitchells has a lower TIE ratio and a lower debt to equity ratio; both of which suggest that the company is not reliant on loans and that a smaller chunk of the income goes into paying out loans and interest.

Profitability Ratios:The profitability ratios of a company indicate a dollar of income on each dollar of net sales. Similar to ratios in other categories,   the  gross  profit  margin  and the  net  profit  margin  have shown a  vast   improvement  even while   the  local economy has been stagnant and has faced various obstacles. The gross profit margin indicates a 34.4% increase across the five years which means an annual increase of almost 7%. Similarly, in the case of the net profit margin the margin has increased from 0.80% to 5.75%. This is a whopping increase of 618.75%. This is a marvelous improvement and this further improves the position of Mitchells for the running of the market leader in the food and beverages category. Also, during the   same  time  period,  national   foods  has  also   improved  both   its   gross   profit   and  net   profit  margins   however   the percentage change increase in both the cases is higher of Mitchell’s. The EBITDA margin to sales ratios of both companies have improved which means that now, not only is the income of the company rising, but it is extracting more and more profit from sales. However, in contrast to the industrial average as declared by the state bank of Pakistan it seems that both Mitchell’s fruit farms and its competitors have a lot of catching up to do. The report suggests that the industry average net profit margin for the 2011 fiscal year is 10.38%. This suggests that even though Mitchell’s has performed well, in the previous years, there is still room for further growth.

Market Value Ratios:The market value ratios of a company indicate the performance of a company in a fiscal year. The market value ratios include the EPS, the P.E. ratio and the Book Value/Share ratio. A high PE ratio indicates the growth of the stock and also shows how much an investor  is willing to pay off a dollar’s earnings. The P.E.  ratio of Mitchell's  has shown a steady increase which not  only  suggests   that   the company  is  doing well  but   that   its  share has  a  solid  ground  in   the stock exchange. The Earnings per Share of the company has also risen over the five years which suggests that the overall allocation of profit to shares has increased. In contrast to its major competitor national foods, Mitchell’s has fared well in trying to reach its limits and improve its financial standing. 

An analysis of the PE ratios of both companies suggest that whilst both companies have improved their performance, Mitchells has come out n top with not only a higher PE ratio keeping investors happy but has increased its ratio quite significantly. This will therefore not only keep current investors happy but will also attract newer investors. 

Conclusion:In my opinion, Mitchells Fruit farms is an excellent company which has proved its credibility not only by smartly investing in the future but also through making sound financial decisions which will attract new investors and therefore be a risk free  way of   raising  capital  and further   improving  on  the  problems  that   it   faces.   .  They  have realized   that  optimum profitability and liquidity can only be reached by investing smartly into physical capital. In a troubled economy, Mitchell’s has proved itself to be the market leader in the food and beverages industry by outgrowing and outperforming each and every one of its competitors

RATIOSLIQUIDITY RATIOSCurrent Ratios 1.52 1.33 1.25 0.98 0.97Quick Ratios  0.33 0.37 0.41 0.34 0.25ASSET MANAGEMENT RATIOSFixed Asset Turn Over 5.33 5.56 4.29 3.81 6.30Asset Turnover 2.31 2.35 2.10 1.72 1.44Inventory Turnover 4.15 4.49 4.65 3.92 2.94Receivable Turnover 31.50 28.37 33.82 21.39 26.59Payable Turnover 9.72 8.41 10.40 11.62 9.45Operating CycleDSI 87.94 81.35 78.51 93.17 124.14DSO 11.59 12.87 10.79 17.06 13.73DPO 37.57 43.41 35.11 31.42 38.62Operating Cycle 99.52 94.22 89.31 110.23 137.87Cash Conversion Cycle 61.96 50.80 54.20 78.81 99.25

DEBT MANAGEMENT RATIOSDebt to Equity Ratio 0.88 1.12 1.14 1.70 1.77Debt to Assets Ratio 0.47 0.53 0.53 0.63 0.64TIE 7.63 3.82 2.84 1.35 1.41PROFITABILITY RATIOSNet Profit Margin 5.75% 4.09% 3.37% 1.12% 0.80%Gross Profit Margin 24.56% 21.97% 22.03% 18.72% 18.28%Return on Capital Employed 33.36% 33.36% 27.96% 22.48% 14.30%Return on Equity 25.05% 20.42% 15.17% 5.21% 3.20%Return on Assets 13.31% 9.62% 7.08% 1.93% 1.16%

MARKET VALUE RATIOS

Earning Per Share 21.5 14.57 9.22 2.79 1.65P.E. Ratio 16.74 5.49 7.48 26.49 35.61Dividend Payout Ratio 31.80% 27.49% 21.55% 33.84% 120.90%Market Price 360 80 69 73.9 58.75Book value per share 8.58 7.13 6.08 5.35 5.18Market value to Book Value 41.95 11.22 11.36 13.80 11.35

Ratio Comparison with Industrial Average and CompetitorFor the fiscal year ended December 2011

Liquidity ratio:Current ratio 0.97Quick Ratio 0.16

Debt managementDebt ratio 1.48Debt/equity ratio 2.1Times Interest Earned 5.61

Asset management ratiosInventory Turnover ratio 6.89Receivable T/O 57.69DSI 52.98DSO 6.33Operation Cycle 59.30Payable T/O 5.03DPO 72.54Cash Conversion Cycle -13.24Asset T/O 2.03

Profitability Ratios:GP Margin 27.39%NP Margin 10.93%ROA 25.30%ROCE 75.75%

MarketEPS 0.5409