Term Report
Company Analysis
(By applying Mathematical and
Statistical Tools)
Prepared by
Tanzeela Saleem
MBA-Weekend (SP15-EX-0063)
Dated: 04 Aril, 2015
Submitted to
Syed GhazanferInam (Course Facilitator)
TABLE OF CONTENT
Topic
Executive Summary
Page Number
3
Preface
Company Introduction
Research problem/ objective
Multiple Bar Diagram, Pie Chart
Sub Divided Bar Diagram
Mean, Median, Mode
10
Quartile, Decile, Percentile
11
Variance, Standard Deviation, Coefficient of Variation
12
Linear Equation
13
Revenue, cost and profit functions
14
Conclusion
15
Recommendations
15
Executive Summary
Page 2 of 16
This report is about analysis of company by applying statistical and
mathematical concepts which are being thought in MBA, first semester of
Muhammad Ali Jinnah University.
The report will be beneficial for investor, creditors, company as it analyze
critical factors of company and point out the area of improvement.
Following concepts have been applied in this report: Multiple bar & Sub-dividend bar diagrams.
Histogram & Frequency Curve.
Central tendency (mean, median, mode)
Quartile, decile& percentile).
Measurement of variation (standard deviation & coefficient of
variation).
Determination of the Linear Equation.
Determination of the total profit function, revenue function, cost
function
The report was prepared with the help of books, material from internet and class
notes etc.
Preface
This report is part of requisite project (term report) of MBA class in Muhammad
Ali Jinnah University. The data has been gathered from annual report of Pakistan
Tabbaco which is available at the company website.
Page 3 of 16
Companys introduction
Pakistan Tobacco Company Limited is part of British American Tobacco, the
world's most international tobacco group, with brands sold in 180 markets around
the world.
Its operations in Pakistan began in 1947, and it is one of Pakistan's first foreign
investments. They produce high quality tobacco products to meet the diverse
preferences of millions of consumers, and to work in all areas of the business from
crop to consumer.
Company is committed to providing consumers with excellent products and to
demonstrating that are meeting their commercial goals in the manner expected of a
responsible tobacco group in the 21st century.
Data:
The financial data has been taken from the last five years to analyze the
Performance over the years through statically and mathematically.
Sr
.no
Financial Data
1.
Balance sheet
2.
Cash flows
3.
Profit and loss
Page 4 of 16
Research Objective
The aim of the study is:
To determine the comparison of the financial performance over the last five years
To evaluate the financial position of the company
To measure the central tendency (mean, median, mode) and to compare & find out the
Shape of Distribution from Frequency Curve
To measure the Partition Values (quartile, decile & percentile)
To determine the Measurement of Variation (standard deviation & coefficient of
variation)
To determine the Linear Equation (linear function, meaning of slope, total expected
admission in 2020, sketch of linear function)
To find out the Total Profit Function, Revenue Function, Cost Function
Page 5 of 16
Multiple bar & Sub-dividend bar diagrams
Company-Net Profit
Rs million
6
5
4
Axis Title
3
2
1
0
2014
2013
2012
2011
2010
2009
2008
Axis Title
Company Quarterly Sales of Year-2014
Page 6 of 16
Sales (2014)
1st Qtr
2nd Qtr
3rd Qtr
4th Qtr
10%
39%
21%
30%
Year wise Total Assets of Company
Total Asset
20,000,000
18,000,000
16,000,000
14,000,000
12,000,000
Rs. 000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
2013
2012
2011
2010
2009
2008
Five Years Sales, Cost of Goods Sold and
Gross profit
Page 7 of 16
40,000,000
35,000,000
30,000,000
25,000,000
2014
2013
20,000,000
2012
2011
15,000,000
2010
10,000,000
5,000,000
0
Sales
C.O.G.S
G.P
EPS vs Dividend
40
35
30
25
Dividend
20
EPS
15
10
5
0
2014
2013
2012
2011
Page 8 of 16
2010
Bar Diagram of Company Sales, COGS
and Profit
Chart Title
Sales
C.O.G.S
G.P
13847393
22771684
10610216
20012587
8445519
17434790
36619077
30622803
2014
2013
25880309
2012
Quarterly Dividends
Page 9 of 16
6240701
16709273
22949974
2011
6204912
14747717
20952629
2010
Measure of Central Tedency
Calculation of mean median and mode of Profit :
Year
2013
2012
2011
2010
2009
2008
Total
X
Rs million
3,124
1,728
364
925
3,022
2,532
11695
Formula for Mean:
Page 10 of 16
=11695/6
=1949.16
Interpretations :
Formula for Median:
M = Value of (n+1)
/2
Arrangement of data: 364, 925, 1728, 2532, 3022, 3125,
= 6+1/2
=3.5
=3rdvalue +0.5(4th value-3rd Value)
=1728+0.5(804)
=2130
Formula for Mode:
The "mode" is the value that occurs most often. But in this data there is no mode
and each value is different from other.
Interpretation: The median profit is slightly higher than mean profit, as it is
central value, however we should considered mean profit as it takes into acccount
all value of data.
Measurement of the Partition Values (quartile, decile & percentile)
Formula for quartile:
th value
Page 11 of 16
Q2= [i(n+1)/4]
th value
= [2(6+1)/4]
= 3.5th value
=3rd value +0.5(4th- 3rd value)
=1728+0.5(2532-1728)
=2130
Formula for Decile:
D5= 5(6+1)/1O
= 3.5th value
=3rd value +0.5(4th- 3rd value)
=1728+0.5(2532-1728)
=2130
Formula for Percentile:
P50= 50(6+1)/1O0
=3.5
=3rd value +0.5(4th value-3rd value)
Page 12 of 16
=1728+0.5(2532-1728)
=2130
MEASURE OF VARIATION
Formula for Variance:
= 129,629,7
Formula of Standard Deviation:
= under root (Variance)
= (129,629,7)1/2
= 1138
Formula of coefficient of variation:
= Standard Deviation/ Mean x 100
= 1138/1949 x 100
= 58.4%
Linear Function of Sales
Year
2010
2011
2012
2013
2014
Sales
(Rs. In
billion)
20.95
22.94
25.88
30.62
36.61
For liner equation we will use two point formula, so lets set year 2010 as t=0, so we have.
Page 13 of 16
Lets assume y = sales, x = time
(0,20.95) and (4,36.61)
Slope = 36.61 20.95 = 3.91
4- 0
Interpretation and Meaning of Slope
For every one year increase, the sale will increase by 3.91 billion.
Linear Equation:Y-Y1 = slope (X-X1)
y-20.95 = 3.91(x-0)
y-20.95 = 3.91x
y=3.91x+20.95
Estimating sales for year 2020
Y=3.91(10)+20.95
Y=39.1+20.95
Y=60.05 billion
Interpretation and Meaning
By year 2020, the expected sale shall be Rs. 60.05 billion.
Revenue, Cost and Profit Function
Sales Price = 1025 per cotton
Current sales = 35 million cottons
Variable cost = 650 per cotton
Fixed cost = Rs. 6.76 billion
Revenue Function R(x) = 1025x
Cost Function C(x) = 650x + 6.76
Profit Function P(x) =
= 1025x (650x+6.76)
= 1025x 650x 6.76
= 375x 6.76
Calculation of Break Even
=
Fixed Cost
Contribution per unit
= 6.76 / (1025-650) = 18 million cottons
Page 14 of 16
How many more units are required to be sold to get profit of 20 billion rupees
= (6.76+20) / 375 = 71 million cottons, exiting level of sales is 35 million, therefore company
need to sale additional 36 million cottons to get desired level of profit.
Conclusion
1.
Profit after tax bar diagram shows that the company performance reduced in
year 2011 but the company has again improved the profitability position and
has show highest profit level in year 2014.
2.
Pie chart gram shows the sales for four quarters of 2014. It is evident that
sales in first two quarters was higher than the last two quarters.
Page 15 of 16
3.
The companies sales, cost of goods sold, gross profit and total assets are
increasing as stable rates and no abnormality has been observed in this
regard.
4.
Except for year 2011, where the company was facing low profitability, the
company has been paying almost half of its earning in dividends.
5.
The average profit of the company is 1.9 billion. Median is 2.1 billion.
6.
The standard deviation of the profitability is 1138 and coefficient of
variation is 58%
7.
Moreover, we also estimated linear function of sales to estimate the sales for
the year 2020.
8.
We also construction Revenue, Cost and Profit function to calculate the
breakeven point and units to be sold to get desired level of profit.
Recommendations
1.
2.
3.
The company has started progressing again, it should keep the momentum
and proper strategies should be developed keeping in view SWOT analysis,
internal and external factors etc.
The company should keeping paying dividend in order to keep the
shareholders satisfied.
Efforts should be made to increase the sale in third and last quarter as well.
Page 16 of 16
