Abstract:
The debate on Capital structure has been living for many decades but the main dispute for
researchers is whether the capital structure positively or negatively impacts firm value. The main
purpose of this research is to assess existing and future prospect of Engro Fertilizer in view of
heavy debts on its balance sheet. Talk of the town among analysis is whether Engro Fertilizer
will be able to pay off its debt on time without re-structuring its outstanding loans. This paper
contains the detailed analysis on long term borrowings of Engro Fertilizer from 2008 to first
quarter of calendar year 2012 (1QCY12). This research study also estimates the company’s
current financial position and its ability to repay its huge debts going forward. Moreover, this
study analyzes and explores the excessive debt problems on the profitability of the company. In
addition, research paper also focuses on the current and future situation of gas in the country.
Furthermore, given the massive “Gas curtailment” in the country, this report considers how the
gas curtailment issue impacts fertilizer business of Engro Fertilizer.
