Abstract:
Pakistan Petroleum Limited (PPL) is one of Pakistan’s most leading firms in the oil and
gas sector. It came into being in the 1950s and since then it has been a major performer
within the sector of energy and petroleum industry. Currently it contributes to 20 percent
of the natural gas supply along with other forms of petroleum. The following research
report is based on the business and financial analysis of the said company. It starts with
an introduction of the company’s establishment and past and present operations. It moves
on to highlight the current equity value structure of the organization and also reveals the
CSR activities the company is presently engaged in. The company has also initiated
various new business ventures within the oil refinery and reserves category. We have
mentioned the various companies which pose as a competition for PPL’s performance
and supremacy. However, due to the lack of time, this project only focused on analyzing
the performance of PPL against only one major competitor that is Pakistan Oilfields
Limited. We performed a ratio analysis to compare and contrast PPL’s financial
performance against POL. For this purpose we used the following ratios: profitability
ratio, liquidity ratio, efficiency ratio, leverage ratio and return to investor’s ratio. We also
looked into the sales growth ratio of the two companies for more assessment purposes.
The financial analysis revealed that PPL’s financial structure along with its asset holdings
have proved to be highly profitable with continually growing sales revenue based on the
increasing oil reservoirs and production. The liquidity and profitability ratios provide the
company with ample room in order to pay back its debtors, while the high return on
investor’s marks it as a highly feasible organization to invest in. To better understand the
future profitability of the organization, we performed a SWOT analysis to establish
whether or not it holds the strengths and opportunities to stand firm in the future. Based
on this and on the projected performance of the overall Oil and Gas sector of Pakistan,
we conclude the report with recommendations for more enhanced future performance.
