Vertica analysis of B/S (liabilities)

Vertical analysis of PEL is done for the last five years starting from 2010 to 2014.
In 2010 out of total liabilities and equity, total shareholder`s equity of PEL was
almost 34% whereas its total liabilities were almost 66%. Among its total liabilities
its non-current liabilities were more than 30% and current liabilities were 35%.
Which means than company is relying on every type of financing . they are not
preferring any single financing but are relying on each type.
In 2011, total equity slightly decreases and goes to nearly equal to 32% where as
total liabilities increases and goes to 68%. Among liabilities its non-current liability
was almost 28%whereas its current liabilities were 40%. Which shows that in 2011
PEL was relying more on current liabilities than other two financing activities.
In 2012, total equity decreases more and becomes 30% whereas non-current
liability increases a little and current decreases and becomes 30% and 39%
respectively.
In 2013, PEL equity part increases in terms of percentage whereas its liability part
decreases by a large amount . its equity becomes 40% whereas liability becomes
60% of total liability and equity.
In 2014, PEL financing further through its own equity whereas financing from short
and long term financing continue to decrease. Total equity in 2014 becomes almost
48% and total equity bcomes less than 52%. And its financing through current or
short term loan decreases largely and goes to 22%.
Overall, company equity share increases whereas liability decreases . the reason
bhind this company has paid its liability and not taken more loans again whereas
invested on its own.

Vertical analysis of B/S (assets)

In 2010, out of total asset PEL had almost 55% of long-term assets whereas it had
current assets equals to 45%. It has largely invested in propery, plant and
equipment almost 53% which is the requirement of company as well because its an
electronic manufacturing company. 2nd largest investment of PEL was In Stock in
trade which was 22%. And its trade debt was 15%.
In 2011, investment in long term asset decreases further and becomes 60% of the
total asset th reason is that its investment in plant, property and equipment
increases and goes to 59%. Whereas its current assets decreases and goes to 39%.
The main reason was , its stock in trade decrease by 4%.
In 2012, percentage of total long term asset decreases as its property, plant and
equipment becomes 54% of the total assets whereas its current assets increases to
43%. Increases in current assets is because its trade debt increases whereas there
is a slight decreases in percentage of stock in trade of Pel in 2012.
In 2013, total equity , long term assets, current assest almost remains the same.
Whereas its stocek in trade further decreases to 14% and trade debt also decreases
to 20% this year.
In 2014, percentage of long term assets of PEL decreases largely because of
increases in stock in trade as well as trade debt. As a result long term assets
decreases to 46% whereas current assets increases 10% as compare to last year.
Overall its total long term assets shows increasing and constant trend except last
year similarly its short term assets also shows increasing and constant trend except
2011.

Vertical analysis of income statement

In 2010, out of total revenue earned by the company almost 79% of its revenue
goes its Cost of good sold. And gross profit becomes 21%. In Other expenses
distribution cost was 6% of the revenue and administrative expense was 4%.
Finance cost was 9% of the revenue.
Operating profit in 2010 was only 10.7% of the revenue and Profit before taxation
was 1.49% of revenue whereas Profit after taxation was 1.07% which means that
company has large expenses on 2010 which it had to control.
In 2011, Company has not taken steps to minimize its cost of god sold and it
increases to 90% which was not good for the company and its gross profit was only
9%.
There was not much change in its distribution cost. But other expenses increases as
a result its operating profit become loss of 3.3%. Finance cost also increases and it
was 12% of the revenue.