Page 100 - Annual Report & Financial Statements 2017

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ANNUALREPORT2017
98
DuPont Analysis was developed by DuPont Corporation in the 1920s. It is an approach which breaks the Return on
Equity (ROE) into more detailed expressions. It interprets the basic ROE ratio in a manner so that it provides a great
insight into the performance of the company. It analyses profit margin, total asset turnover and financial leverage.
For the year under review, Return on equity (ROE) increase to 30.73 % as against 23.99% in the previous year. This is
mainly because of an increase in crude oil prices resulting in an increase in net sales and profitability of the Company.
The breakup of ROE is shown below.
2017
2016
Net Profit Margin
%
35.48
29.11
Asset Turnover
Time
0.47
0.45
Financial Leverage
Time
1.83
1.85
Return on Equity
%
30.73
23.99
Analysis of variations in results reported in interim reports
with the final accounts:
Quarter
Net Sales
Gross Profit
Profit Before Tax
Profit After Tax
EPS
First
5,724,190
2,579,085
2,827,025
2,317,470
9.80
Second
7,080,711
3,479,093
3,144,582
2,338,248
9.88
Third
7,611,720
4,083,840
3,681,134
2,809,900
11.88
Fourth
6,864,523
3,929,658
2,759,552
2,212,888
9.36
Total 2016-17
27,280,449
14,071,676
12,412,293
9,678,506
40.92
Decrease in Net Sales from second quarter onwards was observed due to start of production from Mardankhel
during 2016. Net Sales are higher in the second quarter and third quarter due to higher realized price of Crude and
LPG.
Gross profit reported in second, third and fourth quarter is on the higher side due to higher sales volume and prices.
First quarter gross profit remained on lower side due to lower sales as volumes and prices were lower as compared
to other quarters.
Profit before tax in second and third quarter was high as compared to first quarter due higher net sales. In fourth
quarter cost of Rs. 971.3 million pertaining to Gurgalot was charged as dry and abandon well.
DuPont Analysis