Pakistan Petrolium

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RESEARCH & ANALYSIS PROJECT
FOR THE PERIOD OF THREE YEARS i.e. from 2008 to 2010

NAME: Sarah Kamran

ACCA REG No: 2050737

WORD COUNT:6480 words

Contents
CHAPTER 1: PROJECT OBJECTIVES & RESEARCH QUESTIONS4
INTRODUCTION4
PROJECT OBJECTIVES6
OVERALL RESEARCH APPROACH7
CHAPTER 2: INFORMATION GATHERING & ACCOUNTING/BUSINESS TECHNIQUES8
SOURCES & METHODS OF INFORMATION GATHERING8
Primary Source8
Secondary Source8
LIMITATIONS OF INFORMATION GATHERING9
ETHICAL ISSUES10
BUSINESS & FINANCIAL MODELS USED & THEIR LIMITATIONS10
SWOT Analysis10
Ratio Analysis11
CHAPTER 3: ANALYSIS, CONCLUSION & RECOMMENDATIONS13
SWOT ANALYSIS13
STRENGTHS:13
Weaknesses15
Opportunities17
Threats19
RATIO ANALYSIS21
Revenue:21
Profitability24
Return on Equity (ROE)27
Return on Assets (ROA)28
Current ratio29
Gearing Ratio31
Earnings per share32
Price Earning (P/E) Ratio33
CONCLUSION & RECOMMENDATIONS35

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CHAPTER 1: PROJECT OBJECTIVES & RESEARCH QUESTIONS

INTRODUCTION
Financial and business analysis has always been an area of interest for me. I was more confident with this one than any other topic as I was already familiar with the techniques generally used for this analysis. I felt I could get a head start without worrying about mastering them first. This decision was also supported by the idea that I would be able to apply the knowledge acquired in my previous studies as I believed that I will be able to grasp the practical aspect of my studies in a better way by this research project, plus this would certainly help me in future; either in conducting further analysis or my advanced studies. Furthermore information for financial analysis is easily available as compared to other topics laid out in the BSC info pack, and also the information can be considered authentic and impartial as it can be verified from various sources thus it can be relied upon. Furthermore, the companies are often reluctant to provide inside information to students due to the threats to confidentiality so access to primary data is usually considered as a more difficult option. Oil and gas sector plays a vital role in a country’s economy. “It contributes more than Rs. 230 billion to the national exchequer annually”. A growing economy as of Pakistan demands higher energy consumption. Although Pakistan has got enough of gas reserves for its current requirements however the unstable political situation makes it unlikely to attract international investors. It would be interesting to analyze how the companies working in Pakistan achieve their objective of long term growth while facing these threats. Pakistan Petroleum Limited is one of such companies. It is one of the four major national oil companies currently involved in the oil and gas sector of Pakistan. “The pioneer of the natural gas industry in the country, Pakistan Petroleum Limited (PPL) has been a frontline player in the energy sector since the mid-1950s. As a major supplier of natural gas, PPL today contributes some 25 percent of the country’s total natural gas supplies besides producing crude oil, Natural Gas Liquid and Liquefied Petroleum Gas. It is one of the leading companies in the exploration and production of oil in Pakistan”. Analyzing its financial and business performance would give me an insight about the contribution that oil and gas sector makes towards the economy of Pakistan. Pakistan Petroleum Limited (PPL)’s shareholding is divided between: |

PROJECT OBJECTIVES
“Growth has been the prime focus of PPL. It wishes to spread its operations beyond the boundaries of Pakistan and at the same time increasing its supplies in Pakistan”. I would like to analyze how the company is pursuing its objectives and how is this affecting the company in terms of revenue, profitability, size and investor returns keeping in mind the...
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