Page 92 - Pakistan Oilfields Limited - Annual Report 2021

DUPONT ANALYSIS

Return on
Equity

34%

Return on Assets Net Profit
Equity Turnover Margin

2.40 38%
Times 37.13%

Total Total Net Net
Equity Assets Sales Income

39,362 94,344 36,042 13,382
Rs in Million Rs in Million Rs in Million Rs in Million

2016 2017 2018 2019 2020 2021
Net Profit Margin 29.11% 35.48% 34.85% 38.64% 44.82% 37.13%
Asset Turnover 0.45 0.47 0.47 0.54 0.40 0.38
Equity Multiplier 1.85 1.83 2.14 2.14 2.27 2.40
Return on Equity 23.99% 30.73% 34.74% 44.32% 40.67% 34.00%

Operating efficiency of the Company measured in terms of profit margins has decreased
(net profit decreased by 18.3%). This decrease is mainly due to lower other income (due to lower
mark-up rates and higher exchange loss on foreign currency bank balances) and increase in tax
provision due to decrease in addition of development and exploration & evaluation activities.

Assets turnover decreased from previous year due to decrease in sales due to lower production.
Equity multiplier has increased as compared to previous year depicting that the increase in
assets have effectively improved the equity of the Company.

POL has been posting increasing Return on Equity (ROE) for the last three years. For
the year under review, ROE decrease to 34% as against 40.67% in the previous year. This is mainly
because of lower other income and higher taxes resulting in decrease in the profitability of the
Company.

90 PAKISTAN OILFIELDS LIMITED