Business and Financial Analysis of Fauji Fertilizer Company

Business and Financial Analysis of Fauji Fertilizer Company Limited andEvaluation of it’s Strategies.

Summary of the Research Proposal

This research encompasses both financial and business aspects of an organization’s performance.
Practical use of financial analysis tools such as; Profitability Ratios, Liquidity Ratios, Long Term
Solvency Ratios and Investor Ratios will be demonstrated in this research study. The research will also include an in depth evaluation of the facts and figures which have caused different trends and
movements in the financial performance of Fauji Fertilizer Company. Business analysis will also be
conducted using various business analysis models.

A business analysis at both Micro and Marco levels will be conducted. For analysis at micro level Porter’s five forces model will be used which will help in understanding the industry in which the company is operating. PESTEL analysis model and SWOT analysis model will be used as techniques for analysis at macro level. The Marco environment is referred to the bigger external environment of the business.

Business and Financial Analysis and Evaluation of it’s Strategies

Pakistan’s economy is greatly dependent on agriculture. The industry is also dependent upon the agriculture sector for obtaining raw material. More than 70% of the population is directly or indirectly reliant on agriculture. The sector has a reasonable contribution in the GDP of Pakistan. Cotton produces used by the textile sector which also is a main export for the country. The textile sector employees about 30% of workforce and makes up to 9% of Pakistan’s GDP.

The textile sector employees about 30% of workforce and makes up to 9% of Pakistan’s GDP. The performance of agriculture sector is not up to the mark and there are several reasons behind it. One reason being the difficulty in obtaining fertilizers. The total supply of fertilizers is less than the demanded quantity. The fertilizer manufacturing companies do have a capacity of meeting the demand but are not producing as much they can. A question arises that what can be the possible causes for such low production.

A research study will be conducted to analyze this sector’s business and financial performance so that the reasons behind low production can be found. FFC is the market leader in this sector that’s why it has been chosen for the research. Fauji Fertilizer is a very well known company and belongs to a very wealthy group of companies.

Business and Financial Analysis  FFC and other companies in market is to be completed during
my research which will give a clear picture of the competitive environment and competitiveness of FFC. Financial analysis using financial data of previous five years will give a true picture of the profitability, Liquidity, Long term and short term solvancy of the company and its main competitor Engro Fertilizers.This analysis will also be a great learning experience and a demonstration of research skills.

A special focus will be kept on presentation and layout of the thesis. The conclusions and
recommendations will be based on wide research and study of gathered information from various reliable sources. The analysis and research is aimed to be fair and neutral in order to ensure the achievement of the research objectives.

Purpose of Study/Justification

The aim of this research study is to apply financial ratio analysis and business analysis techniques
(SWOT, PESTEL and Porter’s Five Forces) on the chosen company, supported by an extensive  research. Understanding and interpretation of the financial performance and position of FFC. Provision of effective conclusions in order to provide workable recommendations to the company.Development of an in depth understanding of the industry sector in which FFC is operating. Enhancement of analytically, communication and technical skills and depiction of the same in the thesis.

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