pso financial analysis

FINANCIAL STATEMENT ANALYSIS

Financial Statement Analysis of PSO

From: (2005 to2009)

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SUBMITED TO: SIR BURHAN SHAH

SUBMITED BUY: ASAD ALI RIND MBA-3(B)

Acknowledgement:

First of all I am thanks full to Almighty Allah who give me courageous and potential to complete this project well manner after that I am thanks full to my Respected Teacher Sir Burhan Shah who has given me such a brilliant opportunity and proper guidance to practically

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work on the Financial analysis of Pakistan State oil limited. And I am also thanks full to my senior fellows who has also support me in completion of this project.

PSO PAKISTAN

INTRODUCTION

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Pakistan state oil is the largest oil marketing company in the country. Currently engaged in the marketing and distribution of various POL products including motor gasoline, high speed diesel, furnace oil, jet fuel, kerosene, LPG CNG, petrochemical and lubricants. In addition to this also import different product according to their demand pattern and posses biggest storage facilities representing 80% of country total storage capacity. PSO also win the “award of Karachi stock Exchange” Tope Company Award.

HISTORY OF PSO

Soon after the 3rd June 1976 petroleum storage development corporation (PSDC) came into existence. On august 23rd 1976 PSDC was renamed as state oil company limited (SOCL). On the 30th December 1976 the merger of premier oil company and state oil company give way to Pakistan state oil (PSO) company. After commencement of PSO corporate culture went to comprehensive renewal program which was fully implemented in 2004. This program over the years includes the revamping of the organizational architecture, rationalization of staff, employee empowerment and transparency in decision making through cross functional teams. This new corporate renewal program has divided the company’s major operations into independent activities supported by legal, financial, informative and other services.

In order to reinforce and monitor this cultural change related check and balance have been established by incorporating monitoring and control system. Human resource becomes the company’s one of the main priorities on the companies agenda under corporate reform.

It is due to this effective implementation of corporate reform and consistent application of the best industrial practices and business development strategies, that PSO has been able to maintain its market leadership in a highly competitive business environment.

VISSION STATEMENT

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To excel in delivering value to customer as an innovative and dynamic energy company that get

to the future first.

MISSION STATEMENT

We are committed to leaderships in energy market through competitive advantages in providing the highest quality petroleum products and services to our customers based on.

Professionally trained high quality motivated work force working as a team in an environment which recognizes and rewards performance innovation and creativity and provide for personal growth and development.

Lowest cost operation and assured access to long term and cost effective supply sources.

Sustain growth in earning in real terms.

High ethical and safety environment and socially responsible business practices.

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VALUE

Our values are the fundamental principles that define our culture and are brought to life in our attitudes and behavior it is our values that t make us unique and unmistakable. Our values are defining bellow.

Excellence: We believe that excellence in our core activities emerges from a passion for satisfying our customers' needs in terms of total quality management. Our foremost goal is to retain our corporate leadership.

Cohesiveness: We endeavor to achieve higher collective and individual goals through team. This is inculcated in the organization through effective communication.

Respect: We are an Equal Opportunity Employer attracting and recruiting the finest people from around the country. We individual contribution of individuals and teams. Individual contributions are recognized through our reward and recognition program.

Integrity: We uphold our values and Business Ethics principles in every action and decision. Professional and personal honesty, dedication and and commitment are the landmarks of our success. Open and transparent business practices are based on ethical values and respect for employees, communities and the environment.

Innovation: We are committed to continuous improvement, both in New Product and Processes as well as those existing already. We encourage Creative Ideas from all stakeholders.

Corporate responsibility: We promote Health, Safety and Environment culture both internally and externally. We emphasize on Community Development and aspire to make society a better place to live in.

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Market Share despite Economic Slowdown

Karachi, August 12, 2009: The Board of Management of Pakistan State Oil Company Limited (PSO) reviewed the performance of the company for the financial year ended June 30, 2009 on Wednesday, August 12, 2009 at the company’s head office and approved the audited financial statements for the year.

Sardar Muhammad Yasin Malik, Chairman, BoM, presided over the meeting. He said that during financial year 2009, the Company’s sales revenue touched Rs. 719 billion compared to Rs. 583 billion in the corresponding period last year mainly due to the reliance of power sector on PSO for supply of Furnace Oil as other suppliers in the market shied away due to circular debt problem. During financial year2009, PSO sold 13.2 million tons of POL products as compared to 13 million tons during the preceding year. The Company was able to sustain its sales volumes and market share despite the overall economic slowdown and decline in petroleum products consumption in the white oil segment. PSO ended financial year2009 at an overall market share of 71.3% as compared to 70.5% during financial yeare2008.

Black Oil

In Black Oil, PSO sales volume grew by over 10.2% which enabled the Company to enhance its market share appreciably from 82.3 % in financial year2008 to 85.8% in financial year2009. This actually demonstrates Company’s ability to meet the rising Furnace Oil demand from the power sector.

White Oil

In White Oil, despite a negative growth of 9.1% in sales volumes, PSO continued its market leadership with 59.4% market share. The decrease in white oil volumes was mainly due to the overall economic downturn in the country which resulted in a 5.3% decline in industrial volumes as well.

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Quick overview of the company’s financial statements

An overview of the company’s financial statements has shown that the management

is following the GAAPs for the preparation of its financial statements.

Some of the generally accepted accounting principles that are being followed are:

Principle of regularity: conformity to enforced rules and laws.

Principle of consistency: when a business has once fixed a method for the

accounting treatment of an item, it will enter all similar items that follow in

exactly the same way.

Principle of sincerity: the accounting unit is reflecting in good faith the

reality of the company's financial status.

Principle of the permanence of methods: This principle aims at allowing

the coherence and comparison of the financial information published by the

company.

Principle of non-compensation: Management is showing the full details of

the financial information and not seeks to compensate a debt with an asset,

revenue with an expense, etc.

Principle of prudence: This principle aims at showing the reality "as is" and

it is also being followed. Etc.

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Auditor’s Opinion

In the past five years auditor has approved the financial statements as un-qualified.

Auditors in 2009

A.F. Fergussion & co KPMG Tasser Hadi & co

Auditors in 2008

Ford Rhodds Sidat Hyder & co A.F. Fergussion & co

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Pakistan State Oil LimitedHorizontal AnalysisCurrent Assets: 2005 2006 2007 2008 2009Stores, spares and loose tools 100 95.77 97.95648 88.70626 85.8945Stock-in-trade 100 136.85 143.6215 302.9644 197.7244Trade debts 100 174.34 200.2623 499.254 1185.524Loans and advances 100 127.88 171.619 185.8024 196.0229Trade deposits and short term prepayments

100 191.97 218.1227 55.28185 75.98949Other receivables 100 139.22 152.0679 151.3978 123.6414Short term investments 100 0.00 0 0 0Taxation Cash and bank balances 100 98.80 79.20534 157.0625 150.0111Total Current Assets 100 142.68 153.4657 284.474 340.473Fixed Assets

Property, plant and equip: 100 92.27 98.77747 91.97517 86.13747Intangibles 100 107.03 87.25518 72.93757 47.61385Long term investments 100 141.47 129.0266 116.5366 92.91158Long term loans, advances and receivables 100 81.90 81.58935 62.07108 52.72102Long term deposits and prepayments 100 88.17 62.67699 75.21467 79.54794Deferred tax 100 327.32 321.4983 326.5488 4035.011Total Fixed Assets 100 104.11 105.6208 97.04335 127.2916Total Assets 100 134.15 142.8796 243.0036 293.305Liabilities & Stockholders’ Equity Current LiabilitiesTrade and other payables 100 141.83 160.6467 314.335 426.9986Provisions 100 103.06 91.28711 96.27287 91.28711Accrued interest / mark-up 100 188.87 206.4342 340.9173 870.3773Short term borrowings 100 158.97 188.3941 228.5705 387.6986Taxation-net 100 143.65 5.162512 54.05938 0Total Current Liabilities 100 143.62 156.835 286.0934 396.845Longe Term LiabilitiesLong-term deposits 100 110.19 113.7947 123.613 126.593Retirement & other Benefits 100 117.47 124.2032 118.9214 126.3908Total Longe Term Liabilities 100 115.01 120.6875 120.5061 126.4591Stockholders' Equity SHARE CAPITAL 100 100.00 100 100 100RESERVES 100 120.65 121.4433 184.7792 121.011Total Stockholders' Equity 100 118.63 119.347 176.4912 118.957Total liabilities & Shareholder's equity 100 134.15 142.8796 243.0036 293.305

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Pakistan State Oil LimitedHorizontal Analysis

PROFIT AND LOSS ACCOUNT

INCOME STATEMENT 2005 2006 2007 2008 2009

Net sales /revenue 100 140.3505 164.5649 233.0682 288.3224

Less: Cost of Goods Sold 100 141.4 169.7783 234.0819 306.7487

Gross Profits 100 125.1769 89.18329 218.4119 21.89756

other operating income 100 73.46221 98.80966 107.895 112.155

Less: Operating Expenses:

Transportation costs 100 116.7671 117.8948 107.8581 163.9719

Distribution and marketing expenses 100 106.6963 118.4004 140.3224 169.5473

Administrative expenses 100 105.9929 111.2437 129.9592 130.4867

Depreciation 100 107.5517 112.824 114.9795 117.2974

Amortisation 100 332.8808 392.3603 446.4844 492.6037

Other operating expenses 100 265.3561 81.45507 361.5423 430.7051

Total Operating Expenses 100 134.789 110.457 170.5316 198.6767

Add: Other income

profit/Loss from operation 100 117.3639 82.83535 233.9353(58.1078

)

Less: Interest Expense 100 238.5097 312.413 369.005 1681.163

100 112.4965 73.61136 228.5085(127.988

)

Share of profit of associates

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Net Profits Before Taxes 100 123.757 77.19137 231.6985(123.091

)

Less: Taxes 100 110.0722 68.7577 207.0384 129.1465

Net Profit/Loss After Taxes 100 132.2659 82.43522 247.0315(119.326

)

Pakistan State Oil LimitedVertical ANALYSIS

Current Assets: 2005 2006 2007 2008 2009Stores, spares and loose tools 0.249597 0.178185 0.171121 0.091113 0.073095Stock-in-trade 39.35029 40.14426 39.55461 49.05991 26.52703Trade debts 12.9829 16.87298 18.19702 26.67353 52.47619Loans and advances 0.407679 0.388626 0.48968 0.311714 0.272462Trade deposits and short term prepayments 1.3882363 1.9866899 2.1193068 0.3158154 0.3596644Other receivables 19.802 20.55065 21.07541 12.33718 8.34744Short term investments 0.019272 0 0 0 0Taxation 0 0 0 0 0.462534Cash and bank balances 3.674276 2.706191 2.036835 2.374825 1.879212Total Current Assets 77.87424 82.82758 83.64399 91.16409 90.39763Fixed Assets Property, plant and equip: 15.50719 10.66636 10.72064 5.869363 4.554133Intangibles 0.27653 0.220639 0.168874 0.083001 0.044891Long term investments 4.431091 4.672993 4.00147 2.125007 1.403657Long term loans, advances and receivables 1.4714303 0.8984099 0.8402389 0.3758516 0.2644868Long term deposits and prepayments 0.201046 0.13214 0.088193 0.062228 0.054526Deferred tax 0.238473 0.581879 0.536595 0.32046 3.28068Total Fixed Assets 22.12576 17.17242 16.35601 8.835911 9.602373Total Assets 100 100 100 100 100Liabilities & Stockholder’s Equity Current Liabilities Trade and other payables 49.30458 52.12966 55.43559 63.77748 71.77847Provisions 1.441899 1.107727 0.921243 0.57125 0.448771Accrued interest / mark-up 0.122207 0.172059 0.176566 0.171448 0.362648Short term borrowings 9.198623 10.90078 12.12886 8.652275 12.15899Taxation-net 2.569915 2.752003 0.092856 0.571712 0Total Current Liabilities 62.63722 67.06223 68.75512 73.74416 84.74888

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Long Term LiabilitiesLong-term deposits 1.290761 1.060296 1.028011 0.656595 0.557104Retirement & other Benefits 2.530571 2.215941 2.199789 1.238414 1.090472Total Long Term Liabilities 3.821332 3.276237 3.2278 1.895009 1.647576Stockholders' Equity SHARE CAPITAL 3.279028 2.444387 2.294958 1.349374 1.117958RESERVES 30.26242 27.21715 25.72213 23.01145 12.48559Total Stockholders' Equity 33.5414 29.6615 28.0171 24.3608 13.6035Total liabilities & Shareholder's equity 100 100 100 100 100

Pakistan State Oil Limited

Vertical Analysis

PROFIT AND LOSS ACCOUNT

INCOME STATEMENT 2005 2006 2007 2008 2009

Net sales /revenue 100 100 100 100 100

Less: Cost of Goods Sold

93.53125 94.2306

96.49436

93.93803

99.50871

Gross Profits

6.468751

5.769396

3.505636

6.061968 0.49129

other operating income 0.60909 0.318810.36571

60.28196

80.23693

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Less: Operating Expenses:

Transportation costs

0.147418

0.122647

0.105611

0.068221

0.083838

Distribution and marketing expenses

1.099367

0.835753

0.790968

0.661891 0.64648

Administrative expenses

0.415376

0.313693

0.280789

0.231615

0.187988

Depreciation

0.458033

0.350994

0.314023

0.225961 0.18634

Amortization

0.005026

0.011921

0.011984

0.009629

0.008587

Other operating expenses

0.436419

0.825123

0.216016

0.676987

0.651937

Total Operating Expenses2.5616

392.4601

311.7193

91.8743

03 1.76517

Add: Other income 00.14846

30.12131

3 0.063370.12676

5

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profit/Loss from operation4.5162

013.7765

382.2732

754.5330

03

(0.91018)

Less: Interest Expense0.17444

40.29644

70.33116

70.27618

81.01715

44.3417

583.4800

911.9421

084.2568

16(1.9273

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Share of profit of associates 00.00348

30.00094

50.00059

40.00073

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Net Profits Before Taxes4.3417

583.8284

362.0365

64.3162

4(1.8535

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Less: Taxes1.66459

41.30548

50.69549

31.47868

70.74561

2

Net Profit/Loss After Taxes2.6771

642.5229

511.3410

682.8375

54(1.1079

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Pakistan State Oil Limited

Overview of Ratio Analysis

Ratios 2005 2006 2007 2008 2009

Liquidity Ratio

Current Ratio 1.243258 1.235085 1.216549 1.236221 1.066653

Quick Ratio 0.615033 0.636473 0.641252 0.570949 0.753645

Day's sales in receivable ratio 35.35424 34.47292 30.85489 45.95682 24.24507

Day's sales in inventory ratio 37.79939 36.58358 31.97585 48.92248 24.36477

Operating cycle 73.15363 71.0565 62.83074 94.8793 48.60984

Leverage Ratio

Time Interest Earned 25.88918 12.73934 6.864436 16.41277 (0.89483)

Debt Ratio 0.664586 0.703385 0.719829 0.756392 0.863965

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Debt-to-Equity 1.981386 2.37137 2.569251 3.104951 6.351024

Profitability Ratio

Net profit Margin 0.026772 0.02523 0.013411 0.028376 (0.01108)

Total Asset Turnover 4.062555 4.250482 4.67914 3.896455 3.993541

Return on Assets 0.108761 0.107238 0.06275 0.110564 (0.04425)

Operating Incom Margin 0.045162 0.037765 0.022733 0.04533 (0.0091)

Return on Total Equity 0.324259 0.361537 0.223972 0.45386 (0.32526)

Gross Profit Margin 0.064688 0.057694 0.035056 0.06062 0.004913

INTERPRETATIONS OF RATIO’S

CURRENT RATIO:

CURRENT RATIO= Current Assets Current Liabilities

Current Ratio shows a firm’s ability to cover its current liabilities with its current assets. Current ratio is more than one in the following year 2005,2006,2007,2008 &2009 which is good sign for the company but it is gradually decreases from year 2005 to 2009 which is not

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good sign. The main reason of this large Decrease in the current ratio is because of large amount of increase in current liabilities from year 2005 to 2009. Although there is increase in the current asset but less than the current liabilities. only the figure of short term borrowing is increase to442% greater than the previous years, in spite of that the current ratio is decreases from year 2005to 2009 company has potentials to pay its current liabilities because current ratio is greater than one and company can easily pay its current liabilities from it current assets.

QUICK RATIO:

QUICK RATIO = current assets-Inventory Current Liabilities

Quick ratio of Pakistan State Oil company has continuously increasing because the inventory cost is continuously decreasing from year 2005 to2009except for the year 2008 because in the year 2008 the inventory cost was increased up to the 49% result of that Quick Ratio was decreased . In the year 2009 the quick ratio is on top which is 0.75 because in this year the inventory was decreased up to 26%. Over the entire firm Quick ratio is good which positive sign is to pay its current obligation.

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DAY'S SALES IN RECEIVABLE RATIO:

DAY'S SALES IN RECEIVABLE RATIO = Gross Receivable

Net Sale / 365

This is the general relationship between the gross receivables and the net sales of the year. This ratio states that how efficiently the company is managing its receivables. As this ratio is less it is a positive indicator for the firm is. When we compare Day’s Account Receivable Ratio from years 2005to2009 the average days sales account receivable is decreases which are good sign but when we look at the figure of 2008 this ratio were increases from 30days to 45 days but again decrease to 24 days in2009. It means that firm is working efficiently monitoring its credit sale properly due to which this ratio is constantly decreases and there are less chance of bad debt.

DAY'S SALES IN INVENTORY RATIO:

DAY'S SALES IN INVENTORY RATIO = Ending Inventory

Cost of Goods Sold / 365

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This ratio shows a relationship between the inventory and the cost of goods sold. Inventory is taken from the balance sheet of the firm while the cost of goods sold is obtained from the income statement of the organization. It tells us that how often the company places an order for the inventory. When we compare it with the previous years we have found that this year company is placing fewer orders than the previous years. It means there is decreasing trends is shown from 2005 to 2009 this ratio was decreased except for the 2008 because in this year the inventor was increased more than double but in the recent year 2009 this ratio is again decreased dramatically and this is the positive sign.

OPERATING CYCLE:

OPERATING CYCLE= Account Receivable in Days + Inventory Turnover Turnover in days

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It shows how many days are required to sale the inventory and receive cash from customers. If this is low then it is good signal. When we compare operating cycle with the previous years we found that there is decreasing trend was shown in the operating cycle from 2005 to 2009 except for year 2008 in which operating cycle ratio was increased from 73% to 98% because in this year the Days in inventory turnover ratio and days sales account receivable was increased dramatically and ultimately increase in the operating cycle ratio . Again this ratio was decreased in the year 2009 which is negative sign

TIME INTEREST EARNED:

Recurring Earnings, Excluding Interest Expense, Tax Expense, Equity Earnings, and Minority EarningTIME INTEREST EARNED= Interest Expense, Including Capitalized Interest

This ratio shows how many times we are able to pay the amount of interest of loan which we borrowed for the annual earning. If it is increases then it is satisfactory for business. The investors show more confidence. When we look at the Time Interest Earned Ratio of PSO from 2005 to 2009 there is decreasing trends were shown because the cost of goods sold was increased due to increased in price of petroleum price in international market result of that the

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EBIT was decreased an ultimate effect this ratio in the year 2009 this ratio was negative which is not good sign for the company from investor point of view.

DEBT RATIO:

DEBT RATIO = Total Liabilities / Total Assets

This ratio indicates the firm long term debt paying ability .also indicates how many assets are financed by creditors; it helps to tell how much creditors are protected in case of solvency. The creditors are not well protected the company is not position to issue new long term debt from the perspective of long term debt paying ability. This ratio lowers is better. if we look at the trends of this ratio from 2005 to2009 there is increasing trend it means company has acquired more and more debt and more assets are financed by debt result in this ratio was increased.

DEBT-TO-EQUITY:

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DEBT-TO-EQUITY = Debt / Equity

This ratio determines the long term debt paying ability of firm this compare total debt with share holder’s equity. This also tells how well creditors are protected in case of solvency, from long term debt paying ability point of view the lower this ratio is better, the company debt position. When we look at the Debt to Equity ratio of PSO there is increasing trend was shown from 2005 to 2009 it means the long term debt paying ability of PSO is decreasing from 2005 to2009 and creditors are less protected in case of solvency.

NET PROFIT MARGIN:

NET PROFIT MARGIN = Net Income

Net Sales

This ratio shows a general relationship between net profit and the sales of the year. If this ratio is high it shows that the firm is earning more profit and this is beneficial for the organization. This ratio is mainly concern with the income statement of the business. When we compare this ratio with the previous year’s 2005 to2009 ratios. we have found that the net profit margin is declining so this is not a good news for the organization. This cause due to high cost of goods sold and

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increased in prices of crude oil in the international market from last few years so it is very

difficult to control the cost of goods sold.

Total Asset Turnover: Total Asset Turnover = Net Sales Average Total Assets

This ratio shows the relationship between the net sales and the average total assets. This shows that how much the company is generating sales by the utilizing the assets of the firm. One item like sale is related to the income statement of the company while the average total assets are related to the balance sheet of the firm. When we compare this ratio with the previous years from 2005to 2009 we have found that this ratio is going to increase from 2005to 2007 but in 2008 it is decreases and again in 2009 it is increases which is a positive sign for the organization. This is due to the efficient use of the assets. So when sales increases then this ratio are also increases. It is necessary to increase sale the nominator for the high taken results

RETURN ON ASSETS:

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Return on Assets = Net Income Total Assets

This ratio gives a general relationship between net income and the average total assets of the company. Net income is relates to the income statement of the firm while the average total assets are relates to the balance sheet of the firm. As this ratio decreases from 2005 to 2009 except for 2008 so this is a negative indicator for the firm. When we compare this ratio with the previous year ratio we found that the company is going to decline because this ratio is less. This cause due to net income because we have found that the operating expenses are high for this reasons the net income decline and this ratio is also decreases.

OPERATING INCOM MARGIN: Operating Income Margin= Operating Profit Net Sale

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This ratio shows the relationship between operating profit and net sales. Both are concerned with income statement. If operating profit increases this ratio also increases. In general higher this ratio is beneficial for the organization. As compared this ratio from 2005 to 2009 this ratio is decreases except for the 2008 in which this ratio is increased. Overall decreased in this ratio is not because in these years the operating cost was increase because of the increase in petroleum prices in the international market. As the negative trend was shown in the past few years this decreasing trend is not good sign for company.

RETURN ON TOTAL EQUITY: Return on Total Equity= Net income Total Equity

This ratio shows the relationship between net income and total equity. The net income is concerned with the income statement while the equity is equity is concerned with balance sheet. It shows the percentage earned on equity. If this ratio increases it is good signal for organization. When we see this there is decreasing tend were shown from 2005 to 2009 which is not good sign for the growth of PSO. This ratio was decreased because net income was also decreases in these years.

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GROSS PROFIT MARGIN:

Gross Profit Margin= Gross Profit Net Sale

This ratio shows a relationship between the gross profit and the net sales of the organization. Gross profit is concern with the income statement while the net sales are also concern with the income statement. In general higher this ratio is higher is the benefit for the organization. When we compare it with the previous year’s margin we have found that there is very slight difference between these ratios is. So we can say that the gross profit of the company is stable as there is a slight difference in it. But one thing is here that this profit margin is very low so company is inefficient in generating profit so it is recommended that the company should have to increase this margin to earn high profit

EARNINGS PER SHARE: Earnings per Share= Net income No of shares

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This ratio shows a relationship between the net incomes less preferred dividends to weighted average number of common shares outstanding. It shows that how many shareholders earn on their investments. If it is increases it is a better for shareholders and they consider the organization as a healthy company. As we analyze this ratio from 205 to 2009 we find that there is big ups and down in this ratio it increases from 2005 to 2006 and decrease in 2007 and again increases in 2008 an we look at the 2009 figure this figure is negative because in this year PSO was in the loss so this figure is negative which is not healthy sign for PSO

CURRENT ASSETS:

The current assets of PSO comprises of cash and cash equivalent, account receivable, spareparts, inventory and short term investment in the money market securities . When we analyze the current assets of PSO we see there is increasing trends it means there is growth in the PSO in the balance sheet point of view because its current assets are increasing each year which is positive sign for the company and its short term debt paying ability is also going to increased

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TOTAL ASSETS:

The total assets of the PSO comprises of both current assets and fixed assets which are financed by both debt and owners equity. We analyze the total assets of PSO from 2005 to 2009 there is increasing trend were shown which is positive sign it means that the companies total wealth is going to increases. Which good for future earnings.

NET SALES:

The net sale is the total sales generated by the company through its core business activities. When we analyzed the net sales from 2005 to2009 the is increasing trends were shown because the consumption is going to be increase day by day.

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NET INCOME:

The net income comprises of sales minus all expenses including cost of goods sold, selling and administrative expenses and interest expense and income tax. when we analysis the net income trend from 2005 to 2009 there is ups and down were shown it means there is no stability in the

profit in the last five year due to different which were already explained above in the ratios.

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Conclusion: In the above analysis of Pakistan State Oil (PSO) for the year 2005 to 2009, we found that the earning per share is decreases and even in the year 2009 it is negative. It is not a good signal for Pakistan State Oil Company Limited (PSO). The net sales are increases but cost of goods sold with a higher rate that’s why the Gross profit, profit from operation decreases. This year finance cost is very much increased. Its mean company borrows more loans. The overall performance of PSO is not good But market Share increased which is positive sign for the future long term growth.

Reference

www.pso.com

www.wickypedia.com

www.kse.com.pk

www.business.recorder

Analysis of Financial statement by Charles H Gibson

Financial Management by Vein Hon

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http://www.kse.com.pk/

http://www.wickypedia.com/

http://www.pso.com/

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pso financial analysis