Al-Ekbal Printing and Packaging

8/9/2019 Al-Ekbal Printing and Packaging

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Jordan Hashematic Kingdom

Faculty of Economics & Adminstrative Sciences

Course Title : Financial Statement Analysis

( Thus Day )

Analysis Of Financial Statements Of

Al-Ekbal Printing And Packaging

(2005 - 2008)

Instructors : Dr. Mishiel Suwaidan .

Prepaired By : Ahmad Draghmah , ( 2008 7300 23 ) .


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Theoretical Frame Work:First :

Objectives of the Analysis)A - 1(

Al-Ekbal Printing And Packaging:)A - 2(

Introduction)A 2 -1(

Management and Board of Directors)A 2 -2(

Share holder owns 5 % or more)A 2 -3(

Risk the company is faced)A 2 -4(

Significant Policies of accounting and preparation

of financial statement)A 2 -5(

sector of Printing and Packaging)A - 3(


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: Theoretical Frame Work:First

Objectives of the Analysis:(A-1)

The main object from this analysis is to evaluate Al-Ekbal

Printing And Packaging company from many aspects like

liquidity and how efficient to manage it is assets and generate

higher net income and cash flow from its operations , through

compare the performance and financial center over many years

to the same company to see percentage of growth over this years

, and through compare the performance and financial center

with only competitor in Jordanian market ( Union Advanced

Industries ) to see how efficiency of the company .

Al-Ekbal Printing And Packaging:(A-2)

Introduction :)A 2 -1(

The company is established in 27 / 12 / 1994 by JD

8,000,000 capital , but in 2006 the company decide to decrease

its capital from JD 8,000,000 to JD 5,000,000 by JD 3,000,000

, because it is increase of its need . and it is Established to do

Commercial Presses and printing and forming of packaging

materials for cigarettes, detergents, pharmaceuticals , and books

...etc. . the main place to the company management building

and the factory building in AL-Naor City south of Amman ,

and it didnt have any affiliate company and any branches . at


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the end of 2008 the investment capital to the company was (J D

8,022.545) , but the company capital is ( J D 5,000,000 ) .

The company get the ISO 9001 2000 certificate . After

finish all the requirement to get this certified .

The auditor company is Ibrahim Al-Abbasi & Co. and legal

consular is Osama Sukkary .

Management and Board of Directors :)A 2 -2(

The general manager of the company is Adel Abo Durgham .

The board of director :

1- Mayr Mclnhof Packaging International Co.

2- Neupack Gesellschaft M.B.H Co.

3- Mayr Mclnhof Packaging Austria Co.

4- Company pearl trade and investment for reconstruction.

5- Arabic Gulf for Investment and General Transportation .

Termination Date of the Board: 11-7-2011


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(A 2 3) Name of Share holder owns 5 % or more and

numbers of they owns shares compared With previous year1:

Percent

%

Number of

shares

31-12-2007

Percent

%

Number of

shares 31-

12-2006

Name

29.491,474,46429.491,474,464Mayr Mclnhof

Packaging Austria Co.

201,000.000201,000.000Neupack Gesellschaft

M.B.H Co .

6.1305,203.15,000Al-Ekbal Company For

Investing

006300.2.3Jean Joseph Issa

Chamo'un

5.84292,1875.84292,187Bank Of Jordan

5250,0005250,000Al-Said For Trade

Risk the company is faced2:)A 2 - 4(

The main risk the company is faced is little number of

customer , through that its activity is effected directly by any

change happened to that customers , and the company strive to

increase its numbers of customers .

But the risk this firm is in general is international economicand financing problem which is started in the last quarter in 2008

and still to now .

, 1* annual report for Al-Ekbal Printing And Packaging ( 2008 ) , page 42* the same previous references


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loss. Moreover, the impairment loss of debt instruments can be

recovered through the statement of income, while the

impairment loss in companies shares can be recovered through

the cumulative change in fair value.

Provisions

are recognized when the Company has liabilities at the date of

the balance sheet arising from previous events, settlement of

these liabilities is probable, and their value can be reliablymeasured.

Fixed assets

are stated at cost net of accumulated depreciation and

impairment, and depreciated (except for land), when ready for

use, according to the straight-line method over their expectedoperating lives at annual rates .

- When the recoverable amount of any fixed asset becomes less

than its net book value, its value is reduced to the recoverable

amount and the impairment in value is taken to the income

statement.

- The productive lives of fixed assets are revalued at the end of

every year. If revaluation differ from previous estimates, the

change is recorded in subsequent years being a change in

estimate.

- Fixed assets are eliminated when disposed of or when no

future benefits are expected from their use or disposal.


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Finished products

are stated at the lower of cost or ex-refinery selling price.

Spare parts and supplies

are stated at cost according to the weighted average method

Revenue

from fuel sales is recognized upon delivery of goods to the

customer and issuance of the invoice.

sector of Printing and Packaging:(A-3)

The company work in industry the competition in the high level

in the Jordanian market and foreign market .


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Evaluate Financial StatementsSecond :

Common Size Financial Statement:)B - 1(

Common-Size Balance Sheet( B-1-1 )

Common-Size Income Statement( B-1-2 )

Trend ratios:( B - 2 )

Trend Analysis for Balance Sheet( B-2-1 )

Trend Analysis for Income Statement( B-2-2 )

Cash flow analysis( B - 3 )

Structure analysis( B - 4 )

Ratios Analysis :( B - 5 )

Short -Term Liquidity Ratios( B-5-1 )

Capital Structure & Solvency Ratios( B-5-2 )

Operating Efficiency & Profitability Ratios( B-5-3 )

Market Ratios( B-5-4 )

Comparison with industry competitors( B - 6 )


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ents:Evaluate Financial Statem:Second

(B-1)Common Size Financial Statement:

B-1-1) Common-Size Balance Sheet :(

Table (1)

Common-Size Balance Sheet (%)

2008200720062005Liability& Equity2008200720062005Assets

0.060.020.050.04Accounts and Notes

Payable

0.040.040.040.09Cash on Hand & at

Banks

0.000.020.000.00Credit Banks0.110.060.090.08AccountReceivables, Net

0.040.060.040.00Short Term Loans0.000.000.000.00Short TermInvestments

0.140.130.150.06Total Current

Liabilities

0.330.370.370.36Inventory

0.220.290.31

0.07

Total Liabilities0.500.490.530.53Total Current

Assets0.090.080.080.07

Compulsory Reserve0.480.490.460.45Fixed Assets, Net

0.000.000.040.00Proposed Cash

Dividends

0.050.020.0010.02Retained Earnings

0.780.710.690.93Total Shareholders

Equity1.001.001.001.00Total Liabilities &

Shareholders Equity

1.001.001.001.00Total Assets

From the table above we can to the following:

A : Assets aspect :

( A: 1 ) current Assets : In 2005 & 2006 The table current assets

was formed (53%) of to tall assets but in 2007 & 2008 this


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1) The total curate liability was formed about 6% total liability in 2005

but in 2006 this % was increase to be (15% ) of total liability and then

in 2007 this % decrease to be (13%) but also in 2008 this % was

returned to be (14% ) .

2) The Short Term loans was formed zero percentage of total liability

in 2005 but in 2006 , 2007 , 2008 it was ( 4% ) , (6%) , (4%)

respectively .

3)The Credit Banks: it was formed zero percentage of total liability in

2005 , 2006&2008 but in 2007 it was formed 2% of total liability .

4)The account & notes payable: it was formed about (4%) of total

liability in 2005 but in 2006 this % increase to be (5%) in 2006 and

decrease to be (2%) in 2007 and then in 2008 it was increase to be

(6%) .

5)The Total Shareholders Equity : this Itemed was formed (93%) oftotal liability & shareholder equity in 2005 but in 2006 this percentage

decrease to be in 2007 it was increase to be (71%) (78%)

respectively.


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The figure below show the Common-Size Balance Sheet:

Figure1

0.04

0.11

0.00 0.000.00

0.330.00

0.50

0.01

0.48

0.000.00

0.48

0.00

1.00

C.S Asset 2008Cash on Hand & at Banks

Account Receivables, Net

Short Term Investments

Inventory

Total Current Assets

Long Term Investments

Fixed Assets, Net

Total Fixed AssetsOther Assets

Total Assets

Figure2


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(B-2) Trend ratios:

(B-2-1) Trend Analysis for Balance Sheet:

Table (3)

Trend Analysis for Balance Sheet (%)

200

8

2007200

6

2005Liability &Equity2008200720062005Assets

0.30-0.600.110.00Accounts and NotesPayable

-0.63-0.58-0.530.00Cash on Hand &at Banks

0.20-0.290.140.00Account

Receivables, Net

0.810.801.170.00Total Current

Liabilities

-0.22-0.07-0.020.00Inventory

1.652.893.290.00Total Liabilities-0.22-0.17-0.080.00Total Current

Assets0.120.090.050.00Compulsory Reserve-0.11-0.02-0.040.00Fixed Assets, Net

1.510.43-0.950.00Retained Earnings

-0.30

-0.32-0.310.00Total Shareholders

Equity-

0.17-0.10-0.070.00Total Liabilities &

Shareholders Equity

-0.17-0.10-0.070.00Total Assets

- Firsts: Assents aspects :

- The percentage change of cash on hand & at banks was ( 0.53) in 2006

and this % was decrease to be (0.58 ) (0.663 ) in 2007 , 2008 respectively

.

- The % of Account Receivables was (0.14) in 2006 and this value was

decrease to be


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(0.29 ) in 2007 and then it was increase to be ( 0.20 ) in 2008.

- The % of lavatory was ( -0.02 ) in 2006 but in 2007 ,2008 this 5%

was decrease to be (0.07) , ( 0.22 ) in 2007 ,2008 respectively .

- The % of total current assets was (-0.08 ) in 2006 and this 5% was

decrease to be

( 0.7), ( 0.22- ) in 2007 , 2008 respectively .

- The % fixed assets was ( 0.04 ) in 2006 but this value was increase

to be ( 0.02- ) in 2007 and in crease to be ( -0.11 ) in 2008 .

- There in no % in short term investment and other assets .

Second: Liability & Equity Aspect :

- The % of accounts and notes payable was ( 0.11 ) in 2006 and in 2007

this value was decrease to be ( 0.60- ) but in 2008 this% was in crease to

be( 0.30) .

- The total current liability was deuces from ( 1.17 ) in 2006 to be . (80 )

in 2007 but in 2008 it was increase to be ( 0.81 ) .

- The % of total liability was ( 3.29 ) in 2006 but in 2007 , 2008 it was

decrease to be ( 2.89 ) , ( 1.65 ) respectively .

- The % of compulsory Reserve was ( 0.05 )in 2006 and then in

2007,2008 it was increase from ( 0.95- ) in 2006 to be ( 0.43 ) ( 1.51 ) in

2007 , 2008 respectively .

- The % of total shareholders was deceased form ( 0.31 ) in 2007 to (

0.32- ) in 2008 but in 2008 was increase to be ( 0.30- )


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- The % of total liability & shareholders Equity was decrease from (

0.07- ) in 2006 to be ( 0.10- ) ( -0.17 ) in 2007 , 2008 respectively .

(B-2-2) Trend Analysis for Income Statement:

Table (4)

Trend Analysis for Income Statement(%)

2008200720062005Income statement

-0.11-0.11-0.080.00Operating Revenues

-0.17-0.20-0.140.00Operating Expenses

0.290.490.350.00Gross Profit

0.430.130.110.00General and AdministrativeExpenses

-0.44-0.37-0.340.00Selling and DistributionExpenses

0.411.321.010.00Net Operating Income

0.501.290.840.00Income Before Interest & Tax

-0.300.010.000.00Net Income before Tax

0.040.430.420.00Net Income

- The % of operating Revenues was decrease from ( 0.08- ) in 2006 to

be ( 0.11- ) in 2007 , 2008 .

- The % of grass profit was in crease from ( 0.35 ) in 2006 to be ( 0.49 )

in 2007 but in 2008 this % was decrease to be ( 0.29 ) .

- The % of general & administrative Expenses was increase from 0% in

2006 to ( 0.13 ) ( 0.43 ) in 2007 , 2008 respectively .


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-The % of selling and distribution Expenses was decrease from (

0.34-) in 2006 to be

( 0.37-) ( 0.44- ) in 2007 , 2008 respectively .

-The % of net operating in come was increase from ( 1.01 ) in 2006 to

( 1.32 ) in 2007 but in 2008 it was ( 0.41 ) .

-The % of in come before interest & tax was increase from ( .84 ) in

2006 to ( 1.29 ) in 2007 but in 2008 it was decrease to be ( 0.50 ) .

-The % of net income before tax was increase from ( 0% ) in 2006 to

( 0.01 ) in 2007 and it was decrease to be ( 0.30-) in 2008 .

-The % of net income was increase frame ( 0.42) in 2006 to be ( 0.43

) in 2007 . but in 2008 it was decease to be ( 0.04 ) in 2008 .

(B-3) cash flow analysis :

Table (5)

cash flow from main activities

2008 2007 2006 2005

cash flow from operating

activity 1,097,234 1,117,643 1,224,167 597,796cash flow from investment

activity -86,852 -670,531 -521,607 24,502

cash flow from finance activity -1,052,671 -489,842 -1,148,415 -408,844

net change in cash flow -42,289 -42,730 -445,855 276,060

add : cash and banks beginning

year 347,718 390,447 836,302 560,242

add : cash and banks ending

year 305,429 347,718 390,447 836,302


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From the above table , the company can generate cash flow

from operating activity by stable and good way , and cash flow

from financing activity it shows by mince (cash out flow)

which mean is good because the company it is expansion and

investing , and cash flow from financing either shows by mince

(cash out flow) which mean the company pay interest and

dividends to creditor and stock holder .

(B-4) Structure analysis:

The table below shows the capital structure o Al-Ekbal Printing

and PackagingCompany.

Table (6)

2008200720062005Liability& Equity

0.220.290.310.07Total Liabilities

0.780.710.690.93Total Shareholders Equity

1.001.001.001.00Total Liabilities & Shareholders Equity

This table the capital structure for the company and show to us

the increase in percent of debt , which mean the company startfinance its project by debt , which is good , because the higher

debt in capital structure make the company take advantages from

pretax expense ,so increase net income maximize profit- and its

generate higher rate of return equity .


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(B-5) Ratios Analysis:

(B-5-1) Short -Term Liquidity Ratios:

Table (7)

Liquidity RatiosShort-Term

Avg.2008200720062005Ratios

4.8063.5813.8153.5308.296Current ratio1.4791.2000.9461.0232.747Acid - test ratio47.15259.99635.80648.28644.521Collection Period251.481

222.214275.608270.433237.668Days to sell inventory

From table above we note the following:

1- Current Ratio: the current ratio for Al-Ekbal Printing and

Packaging company was (8.296) time in 2005 and if we

compare this ratio with the historical standard of that ratio

(Aug) we found that this ratio is more than the historical

standard so it's almost bad situation which the company must

try to decrease it.

So in 2006, 2007 this ratio was decreased to be (3.530) (3.815)

respectively and this decrease is below the historical standard

(4.806) time that means the current asset could cover the currentliability by (4.81) time approximately. So this company have

surplus about (3.81) JD.

In 2008 this ratio was deceased to be (3.581) time, although it

still less than the historical standard but its good result.

2- Acid test ratio: in 2005 the acid - test ratio was (2.747)

time and if we compare this result with historical ratio we find


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that this result is more than the historical standard (1.479) time

but in 2006, 2007, this ratio was decrease to be (1,023),

(0.946), respectively and increase to be (1.200) in 2008 but in

every case it still below the historical standard (1.479).

3- Collection Period: the collection period for this company

was about 45 day in 2005 and this good situation (the lower the

collection period the better the situation), because this ratio is

below it's historical standard (47) day. In 2006 this ratio was

increase to be about (48) day and this value is bad according

the average, but in 2007this ratio decrease to be about (36),

days this result is good situation, but in 2008 the result of this

ratio returned to be bad (about 60 days).

4-Days to sell inventory: the result of this ratio was about

(238) day in 2005, and this result is below it's historicalstandard (about 251) day, so this is a good indices. In 2006,

2007 this ratio was increase to be about (270) (276) day

respectively, so the company have to decrease this value. in

2008 this ratio returned to decrease to be about (222) day , and

this result reflect good indices in general.


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Figure4

0.000

50.000

100.000

150.000

200.000

250.000

300.000

acid ratio

day to sell inventory

C.R

coll.period

(B-5-2) Capital Structure & Solvency Ratios:

Table (8)

Capital Structure & Solvency Ratios

From the table above we note:

1-Total Debt to Equity: the debt burden on this corporation

was about (7.3%) in 2005 and this value is below it's

average (30.5%) so the corporation have to increase this

ratio. In 2006 the debt burden was increase to be (45.5%)

and this increase is above the average. In 2007, 2008 the

Avg.2008200720062005Ratios

0.3050.2770.4170.4550.073Total debt to equity0.1360.0880.2270.2310.000Long-term debt to equity6.5623.2082.8444.94015.255Times interest earned


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debt burden decrease to be (41.7%) and (27.7%)

respectively but the value of 2008 was below the average.

2-Long-Term Debt to Equity: the total long term debt to

equity was zero in 2005 and it increase in 2006 to be (0.231)

and then decrease to be (0.227), (0.088) in 2007, 2008

respectively. and all values are less than the historical

standard (0.136) this indicate that this firm has a few

depend on long term debt to finance it's investment in term

of other companies in the same industry.

3-Time Interest Earned: this company could cover it's dept

by about (15) times in the year 2005 and this value is higher

than the average that about (7) but in 2006, 2007 this value

was decrease to be about (5), (3) respectively so these value

is below the historical standard. In 2008 the ratio wasincrease to be (3.208) although this increasing it still below

the average.

Figure5

0.000

2.000

4.000

6.000

8.000

10.00012.000

14.000

16.000

total debt to equity

long term debt to eaquity

time interest earned


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(B-5-3) Operating Efficiency & Profitability Ratios:

Table (9)

Profitability Ratios

Avg.2008200720062005Ratios

0.0230.0220.0270.0260.017Return on Assets0.0310.0280.0390.0380.019Return on common equity0.1770.1830.2120.1850.126Gross Profit Margin0.0470.0410.0670.0560.026Operating Profit Margin (pretax)0.0370.0330.0450.0430.028Net Profit Margin


1-Return on assets: this company increase it's generated

income from it's assets from (0.017) in 2005 to (0.026),

(0.027) in 2006, 2007 respectively and this increase is

above the average (0,23%) but in 2008 the ability of

generating income for this company from it's total assetsdecrease to be (0.022) this decrease is around the average

(0.23) in other word it's good result.

2-Return on common equity: this company could generating

income from it's owner equity by (0.019), (0.038), (0.039)

in 2005, 2006, 2007 respectively and this result was above

the historical standard (0.031) but in 2008 this value was

decrease to be less than the historical standard (0.028).

3-Gross profit margin: the gross profit margin for this

company was (12.6%), (18.5%), (21.2%) in the year 2005,

2006, 2007 respectively and this value is above the average

(17.7%) except the value of 2005, in 2008 this ratio


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decrease to be (18.3%) but also it still above the average, so

this is perfect situation.

4-Operating profit margin (pre tax): this ratio was increase

from (2.6%) in 2005 to (5.6 %) (6.7%) in 2006, 2007

respectively but in 2008 it was decrease to be (4.1%), but

although this decrease it still around the average (4.7%).

5-Net profit margin: this ratio was increase from (2.8%) in

2005 to (4.3%) (4.5%) in 2006, 2007, respectively but in

2008 it was decrease to be (3.3) and this ratio is around the

average (3.7%) so(good situation).

Figure 6

0.000

0.050

0.100

0.150

0.200

0.250

ROA

ROE

GPM

NPM

OPM


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Table (10)

Activity Ratios

From the table above we note:1-Cash Turn Over: the efficiency of the firm in utilizing it's

cash was about (7.16) time in 2005 and this vale is less than

the average (about 13.5), in 2006, 2007, 2008 the efficiency

of the firm in utilizing it's cash increase in high percentage

to be about (14.14), (15.29), (17.42) in 2006, 2007, 2008

respectively so this firm increase it's efficiency.

2-A/R Turn Over: this ratio was (8.086) in 2005 and it's

above the average (7.899) but in 2006, this ratio was

decreased to be (7.456) which is less than the average. in

2007 it was increase to be (10.054) so it's become above the

average (7.899) and then it's good result, but in 2008 it

decrease to be less than the average (6), so this company has

to increase this value.

3-Inventory Turn Over: the ability of the firm in generating

sales from it's inventories was (1.734) in 2005 (around the

average (1.752) but the ability of the firm in generating

sales from it's inventories was decrease to be (1.634), in

Avg.200820072006200513.49917.42015.28514.1357.157Cash Turn Over7.8996.00010.0547.4568.086A/R Turn Over1.7521.9841.6571.6341.734Inv. Turn Over0.6260.6630.6110.6110.618T.A Turn Over1.6141.8301.6891.6191.319W.C Turn Over1.3251.3691.2381.3221.371PPE Turn Over


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2006, but in 2007, 2008 this value was increase to be

(1.657), (1.984) in 2007, 2008 respectively. So the company

improve its policy.

4-Total Asset Turn Over: the ability of the firm in

generating it's sales from it's total asset was (0.618) in 2005

and this ability decrease to be (0.611), in 2006, 2007, but in

2008 this value increase to be (0.663) so it's higher than the

average (0.626) and this result is good.

5-Working Capital Turn Over: this ratio was increase from

(1.319) in 2005 to be above the average that is (1.614), and

these value are (1.619), (1.689), (1.830) in 2006, 2007, 2008

respectively. So good result was being.

6-PPE Turn Over: this ratio was decrease from (1.371) in

2005, to be (1.322), (1.238), in 2006, 2007, respectively.But in 2008 this value was increase to be above the average

(1.325) So this company increase its sales from using fixed

assets.


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Figure 7

0.000

2.000

4.000

6.000

8.000

10.000

12.00014.000

16.000

18.000

Cash T.OA/R T.O

PPT T.O

Inventory T.O

W.C T.O

T.A T.O

(B-5-4) Market Ratios:

Table (11)

Market Ratios

Avg.2008200720062005Ratios

0.0580.0760.0350.0350.086EPS36.25626.62836.87226.56354.962P/E0.0300.0380.0270.0380.018Ear. yield0.0140.0000.0000.0560.000Div. yield0.3690.0000.0001.4760.000Div. payout1.0520.7401.4341.0151.019P/B


1-Earning Per Share (EPS): this ratio was decrease from

(0.086) in 2005 to (0.035) in 2006, 2007 and the value of

this decrease was below than the average (0.058) but after

that it was increase to be (0.076) in 2008, so it became


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above the average (0.058) and this result is a benefit to the

stockholders.

2-Price to Earning: this ratio was about (54.96) in 2005 so it

higher than the average (about 36.26) after that it was

decrease to be (26.56) in 2006, and then increase to be

above the average (36.87) in 2007 but in 2008 it was

decrease to be below the average (36.25).

3-Earning Yield: the earning yield for this company was

(0.018) in 2005 and increase in 2006 to be (0.038),but it

decrease to be (0.027) in 2007, and increase to be (0.038) in

2008. So this value is above the average (0.030) and it's

reflect good situation.

4-Dividend Yield: this ratio still zero in 2005, 2007, and 2008

and in 2006 it was (0.056). The average was (0.014). so thiscompany have to increase this ratio.

5-Dividend Pay Out: this ratio still zero in 2005, 2007, and

2008 and in 2006 it was (1.476). The average was (0.369)

so this company has to increase this ratio.

6-Price to Book Value: in 2005 this ratio was (1.019) and it's

below the average (1.052) but it was decrease in 2006 to be

(1.015). in 2007 it was increase to be (1.434), and in 2008 it

return to decrease to be (0.740) and this below the average.


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Figure8

0.000

10.000

20.000

30.000

40.000

50.000

60.000

EPS

P/E

Earning Yeild

div. yeild

div pay out

price to B.V

( B-6 ) Comparison with industry competitors:

Table (12)

The industrial standard for Printing and Packaging

Industries

(Short Term Liquidity)


- Current Ratio: the industrial standard for the current assets is

(2.44) and the historical standard for AL-Ekbal Printing Company

Ind. Stan.AL-Ekbal

Printing

Union Advanced

Industries

2.443.581.31C.R0.821.200.44Acid - ratio49.3860.0038.77Coll. period231.03222.21239.84Days-sell inv.


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is (4.806) so we find that the current ratio of AL-Ekbal Printing

Company is higher than the current ratio of the industrial standard

so this company has a good and positive liquidity, but it has to

decrease it to benefit from cash investment.

- Acid Ratio: according to the industrial standard to this ratio

which was (0.82) we find that the historical standard which was

(1.479) is higher than the industrial standard and this indicate a

perfect performance to this company in term of it's competitive

firm the market.

- Collection Period: the industrial standard for this ratio is

(49.38) day while AL-Ekbal Printing Company ratio was (47.15)

day so this result is good according to competitive firms.

- Days Sell Inventory: the industrial standard for this ratio was

about (231) day, but the historical ratio of AL-Ekbal PrintingCompany was about (251) day and that indicate a bad

performance for his company according to it's competitive firms

in the market, so this company has to decrease this ratio.


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34

Table (13)


Industries

(Capital Structure. & L.T Solvency.)


- Debt to Equity Ratio: the industrial standard for this ratio is

equal to (72%) and the historical ratio is (30.5%) so this company

is less depended on debt than it's competitive.

- Long term debt to equity: the industrial standard for this ratio

was (24%) and the historical standard for AL-Ekbal Printing

Company was (13.6%), and this is a good value according to themarket.

- Time Interest Earned: the industrial standard for this ratio

was about (4) times and for the AL-Ekbal Printing Company it

was about (7) times so this company has perfect indices according

to the market.

Ind. Stan.AL-Ekbal

Printing

Union Advanced

Industries

0.720.281.15D / E0.240.090.40L. D / E3.993.214.78Time I . earned


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35

Table (14)


Industries

(Operating Efficiency & Profitability)


- Return on assets: the industrial standard for this ratio was

about (7.15) and for the AL-Ekbal Printing Company the

historical ratio was about (2%) and so this ratio is very low

according to competitive companies and AL-Ekbal Printing

Company has to increase it.

- Return equity : the industrial standard for this ratio was

(10.26) but for AL-Ekbal Printing Company the historical

ratio was about (3%) and we can not make a judgments

about this result because this related to the policy of the

company.-Gross Profit Margin: the industrial standard for this ratio

was about (26%) but for the AL-Ekbal Printing Company

the historical standard was (17.7%) so this ratio is less

efficient in the AL-Ekbal Printing Company than the

competitive companies.

Ind. Stan.AL-Ekbal

Printing

Union Advanced

Industries

7.153.3810.93ROA10.262.7817.75ROE25.6418.3332.94GPM16.935.8328.02OPM10.643.2817.99NPM


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36

- Operating Profit Margin: the industrial standard for this

ratio was about (17%) and for the AL-Ekbal Printing

Company it was about (5%) so this company has bad

performance in generating profit.

- Net Profit Margin: the industrial standard for this ratio

was about (11%) but for the AL-Ekbal Printing Company it

was equal to (4.7%) so this ratio is bad for the AL-Ekbal

Printing Company.

Table (15)


Industries

(Market Ratios)


- Earning per share: the industrial standard for this ratio was

(0.22) and for the AL-Ekbal Printing Company it's has historical

ratio about (6%) so the stock holders in this company receive

earning more than the stock holders in other competitive firms on

the market.

Ind. Stan.AL-Ekbal

Printing

Union Advanced

Industries

0.220.030.41EPS16.3926.636.15P/E0.030.040.03Ear. yield3.000.006.00Div. yield0.950.001.90Div. payout0.920.741.09P/B


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37

- Price to earning: the industrial standard for this ratio was about

(12.30) and for AL-Ekbal Printing Company the historical ratio

was (929.71) so there is very difference between tow ratio behalf

to the AL-Ekbal Printing Company.

- Earning yield: the industrial standard for his ratio was

(16.39%) and for the AL-Ekbal Printing Company it was about

(36.25%) so this ratio behalf the AL-Ekbal Printing Company.

- Dividend yield: the industrial standard for this ratio is (0.95)

and for the AL-Ekbal Printing Company it was (0.014) so this

company did not have high dividend according to the market.

- Price to book value: the industrial standard for this ratio was

(0.92) and the historical ratio for AL-Ekbal Printing Company

was (1.052) so this ratio is good according to the competitive

companies ratio in the market.


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38

Table (16)


Industries

(Activity Ratios)


- Cash Turn Over: the industrial standard for this ratio was

( 377.35) time, but for the AL-Ekbal Printing Company it's

historical standard was about (13.5) time so it's better for

this company to increase this ratio.

- A/ R turn over: the industrial standard for this firm was

about (8) time and for the AL-Ekbal Printing Company it

was also about (8) so this company's activity is near to the

market.

- Inventory turn over: the industrial standard for this ratio

was about (1.7) time and for AL-Ekbal Printing Company itwas about (1.8) time and so this company's activity is near

to the market.

- Total Asset Turn Over: the industrial standard for his

ratio was about (0.6) and for the AL-Ekbal Printing

Company it was also about (0.6) so this company's activity

is near to the market.

Ind. Stan.AL-Ekbal

Printing

Union Advanced

Industries

377.3517.42737.28Cash Turn Over7.646.009.29A/R Turn Over1.741.981.50Inv. Turn Over0.560.660.46T.A Turn Over3.041.834.26W.C Turn Over1.131.370.90PPE Turn Over


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39

- Working capital turn over: the industrial standard for

this ratio was about (3) but for the AL-Ekbal Printing

Company it was positive and about (1.61) so this indicate a

bad performance for this company according to it's

competitive companies in the market.

- PPE Turn Over: the industrial standard for his ratio was

(1.13), and this value is above the historical standard of AL-

Ekbal Printing Company, which was (1.05), so this

company has to try to increase this ratio.


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40

Results and Recommendations :

1 - The company have problem with liquidity because Current

ratio is too high when we compared with historical standard ,industrial standard and competitor standard ( Union Advanced

Industries ) . the company should decrease it through more

investment in fixed assets because its more profitable assets .

2 - The company have a problem with collect its receivable

because it is takes too much time to collect its debt . it should

mad more restriction about the credit on sales and improve

collection department ).

3 - The company have littlie debt in its capital structure

component . which is make it lose the advantages from debt like

(pretax deduction , higher rate of return on equity , creditor have

no control on the company and increase time interest earned ) .

so I advice him to finance future project by debt .

4 - The company have problem with managing its assets because

the return on its assets it is very littlie when we compared with

historical standard , industrial standard and competitor standard

( Union Advanced Industries ) . so the company should increase

its profit by finding new market and customers, not just depend

little numbers from customers .

5 - The cost of goods sold is too high when we compared with

sales , which mean little percentage of profit margin . so I advice

him to seek a new market for material and dont depend on 2

main suppliers .


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41

From all previous result and recommendations , I observe bad

performance of management with little development and

improvement in manage its assts compared with its competitor (

Union Advanced Industries ) which reflected in the big

difference of stock prices to both companies .

Figure 9

0

0.5

1

1.5

2

2.5

3

3.5

4

2008 2007 2006 2005

Al-Ekbal

Printing And

Packaging

Union

Advanced

Industries


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References :

1 Annual Report Of Al-Ekbal Printing And Packaging for

years ( 2005 2008 ) .

2 Companies' Guide for Jordanian market for years ( 2005

2008 ) .

3 Some Statistic about Al-Ekbal Printing And Packaging on

.www.moubasher.infothe web sit :

4 - Some Statistic about Al-Ekbal Printing And Packaging on

www.ase.orgthe web sit :

5 Excel Files by stock prices at the end of each month from

year ( 2005 2008 ) .

6 K.R Suberamanyam And John.Wild , Financial Statement

Analysis ,10th

, Mc Graw Hill -usa- 2009 .

7 Gibson ,c.h , financial reporting and analysis : uses financial

accounting information , 11th

, western college publishing -usa-

2009 .
http://www.moubasher.info/http://www.ase.org/http://www.ase.org/http://www.moubasher.info/

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Al-Ekbal Printing and Packaging

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