CVP Analysis On ENGRO Fertilizers
TABLE OF CONTENT
SR.NO
DETAILS
PAGE NO.
1
EXECUTIVE SUMMARY
2
2
INTRODUCTION TO COMPANY
3
4
CONTRIBUTION TOWARDS AGRICULTURE
4
5
CVP ANALYSIS
5
6
CONTRIBUTION INCOME STATEMENT
8
7
CONTRIBUTION INCOME RATIO
9
8
BREAKEVEN POINT
10
9
MARGIN OF SAFETY
11
11
BIBLIOGRAPHY
12
EXECUTIVE SUMMARY
This report examines the CVP analysis on ENGRO Fertilizer Company limited which is registered under SECP rule in stock exchange as a public company. For CVP analysis contribution income statement is made. Besides this, total fixed cost, total variable cost, contribution, contribution margin, contribution margin ratio, breakeven point of sales and margin of safety is computed form the data which is gathered from annual report of the company year 2013.
Considering the importance of the agriculture sector in Pakistan, contributing up to 24% in GDP growth (Pakistan bureau of statistics), and fertilizer industry becomes an integral part in crop cultivation and ultimately excising the agriculture sector. The Fertilizer industry in Pakistan has not been able to get its due share in long term government policies. The private sector has come up with huge investment and its present infrastructure not only ensures sufficient cheap and good quality Fertilizer for domestic use but has the potential to earn foreign exchange. I made its contribution income statement and computed its net operating profit which shows that company is performing very well and is earning profit this is it growth period and it is very much success full to cover its fixed cost and is going in right direction. Its margin of safety is high which shows that company has no chance of loss yet and is performing its operations in a right direction.
INTRODUCTON TO COMPANY
Engro Fertilizers Limited is a subsidiary of Engro Corporation and a renowned name in
SR.NO
DETAILS
PAGE NO.
1
EXECUTIVE SUMMARY
2
2
INTRODUCTION TO COMPANY
3
4
CONTRIBUTION TOWARDS AGRICULTURE
4
5
CVP ANALYSIS
5
6
CONTRIBUTION INCOME STATEMENT
8
7
CONTRIBUTION INCOME RATIO
9
8
BREAKEVEN POINT
10
9
MARGIN OF SAFETY
11
11
BIBLIOGRAPHY
12
EXECUTIVE SUMMARY
This report examines the CVP analysis on ENGRO Fertilizer Company limited which is registered under SECP rule in stock exchange as a public company. For CVP analysis contribution income statement is made. Besides this, total fixed cost, total variable cost, contribution, contribution margin, contribution margin ratio, breakeven point of sales and margin of safety is computed form the data which is gathered from annual report of the company year 2013.
Considering the importance of the agriculture sector in Pakistan, contributing up to 24% in GDP growth (Pakistan bureau of statistics), and fertilizer industry becomes an integral part in crop cultivation and ultimately excising the agriculture sector. The Fertilizer industry in Pakistan has not been able to get its due share in long term government policies. The private sector has come up with huge investment and its present infrastructure not only ensures sufficient cheap and good quality Fertilizer for domestic use but has the potential to earn foreign exchange. I made its contribution income statement and computed its net operating profit which shows that company is performing very well and is earning profit this is it growth period and it is very much success full to cover its fixed cost and is going in right direction. Its margin of safety is high which shows that company has no chance of loss yet and is performing its operations in a right direction.
INTRODUCTON TO COMPANY
Engro Fertilizers Limited is a subsidiary of Engro Corporation and a renowned name in
Bibliography: http://en.wikipedia.org/wiki/Cost%E2%80%93volume%E2%80%93profit_analysis http://accountingexplained.com/managerial/cvp-analysis/ Annual report ENGRO fertilizer company 2013 http://engrofertilizers.com/our-company/ (Pakistan bureau of statistics) http://www.cpaireland.ie/docs/default-source/Students/F2-Mgmt-Accounting/cost-volume-profit-%28cvp%29-analysis.pdf?sfvrsn=0 http://wps.prenhall.com/wps/media/objects/2033/2082045/student_study_guide/cost12_study03.pdf http://www.lead.org.pk/cscc/attachments/case_studies/engro_water.pdf