Hubco Horizontal Analysis

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Annual report 2015

Submitted by:

AMNA KASHIF (35765)

MUHAMMAD YOUSUF (35821)

Submitted to:

Sir. Shoaib Wasim

Class: BBA 6A

HORIZONTAL ANALYSIS:

SALES:

The company's sales has grown in 2015 as compared to 2010 by 31.89% which has a $ amount of 31.790 million, its maybe because of the ease of operation, strategic decision making and investments and skilful management. In comparison with base year the %sales increase in 2014 by 62.30%, 2013 by 66.37%, 2012 by 75.25% and 2011 by 23.69%. This shows the increasing sales trend as the year passes by, but after 2013 there is a decrease in company's sales to some extent as compared to 2012 and also comparing previous year 2014 with 2015 it has been decreased.

OPERATING COSTS:

 In comparison with the base year 2010, the operating cost has increased by 27.27% in 2015 which has a $ amount of around 25 million. This increase is mainly because of the increase in production or the quantity sold. The trends showing increase throughout the years but as compared to 2014 which has 63.11% operating cost in 2015 the operating costs has reduced to 27.27%. This shows the company is trying to control its operating costs and has still maintain to gain profit despite of less sales.

GROSS PROFIT:

The gross profit in 2015 in growing by 87.19% as compared to 2010. The $ amount has also increased by an amount of 6703 million. While there is a continuous increasing trend in terms of % when compared with 2010 as in 2011 the gross profit increased by 19.89%, in 2012 103.58% than boomed to 112.25 % in 2013, then in 2014 it has slightly decreased by 52.65% as compared to 2013 this change is mainly because of the increase in operating costs, however in 2015 the gross profit has increased from 52.65% to 87.19% due to the decrease in operating cost.

General and administration expense:

As compared to 2010 the general and administration expenses has been increased by 135.55% in 2015. The $ amount has also increased by 530 million. The trends shows that there is a continuous increase every year from 2010 to 2015 but a slightly decrease in 2012 as compared to 2011 and again increase in 2015 as compared to 2014 from 69.05% to 135.55%.

OTHER INCOME:

There has been seen a drastic increase in other income in 2015 as compared to 2010 by $ 1532 million. This has increased by a huge % i.e. 2790.57% in 2015 and it is due to some irregular item that is dividend income from LEL- subsidiary company and gain on disposal of a fixed asset.

Profit from operations:

They have been increasing in 2015 as compared to 2010 by 97.97% which has a $ amount of 7201. The trend shows that there is a continuous increase every year from 2010 to 2015 but slightly decrease in 2014 as compared to 2013 and again increase in 2015 as compared to 2014.

Profit before taxation:

As compared to 2010 profit before taxation has increased by 80.22% in 2015 which has a $ amount of 4457 million. The trend shows the slightly decrease in 2011 as compared to 2010 but an increase after 2011 till 2015.

NET INCOME:

Net income of the company in 2015 as compared to the base year 2010 has been increased by 77.34%. The trends showing the increase throughout the years as compared to the base year 2010, but in 2014 it was decreased as compared to 2015 it increased because of the decrease in operating costs.

CONCLUSION:

From the above horizontal analysis we can say that the net income of the company has increased by $ 4279 million as compared to 2010. The main reason for the increase in net income is due to the decrease in operating costs and drastic increase in other income and the increase in gross profit as compared to previous year.

VERTICAL ANALYSIS:

Operating Costs:

Operating cost in 2010 was 92.29% of turnover which in 2011 remain constant 92.53% it slightly decreased in 2012 and 2013 which was 91.04% and 90.16% respectively of turnover. Then in 2014 it again increased to 92.75% of sales and now again with a decline it becomes 89.05% of sales.

Gross Profit:

Gross profit in 2010 and 2011 was 7.71% and 7.47% of sales respectively which increased in 2012 and 2013 8.96% and 9.84% of sales. It again decreased in 2014 and becomes 7.25% of sales then in 2015 it has been increased to 10.95% of sales.

Profit from operations:

Profit from operations was same in 2010 and 2011 7.37% and 7.14% of sales it gradually increased in 2012 and 2013 and becomes 8.74% and 9.61% of sales which in 2014 declined and becomes 6.90% of sales then in 2015 there has been an increase in income from operations and it becomes 11.07% of sales.

EBT:

Profit before taxation was 5.57% of sales in 2010, it decreased in 2011 and 2012 and becomes 4.40% and 4.69% of sales, it increased in 2013 and becomes 5.66% of sales then decreased in 2014 and was 4.05% of sales it again increased in 2015 which in now 7.62% of sales.