Ratio Based performance analysis of fertilizer and chemical sector

Abstract

Today, the concept of financial ratio analysis is associated with respect to economic tools that used to assess the relative strength of companies by performing simple calculation items. These financial calculation items are in practices of use of income statement to know company current worth and value in market, management use balance sheet in order to measure current asset is equal to liability and owner equity in state. Usage of cash flow is correlated with facilitates to prepare sound financial policies, in order to sort out or measure current cash position. Type of this research study is qualitative data strategies to practically implement to accomplish research goal. This research study is only limited to two fertilizers and chemical sector to known their current financial performances in market. These financial analyses are very obliging tool for management of both companies to take effective decision according to current market conditions. Fertilizer companies are in procedural of Arif Habib Corporation Limited and Engro Fertilizer Limited, whereas chemical companies are in practice of Engro Polymer and Chemical Limited and I.C.I Pakistan Limited in state. Financial data is collected from annual report of these companies. The finding of this study is associated with respect to examining the real form of profit of chemical and Fertilizer Company is favourable and with the passage of time it’s increased and developed scale of economies.