Factors Affecting the Financial Performance of Top Ten Companies in Pakistan Stock Exchange From 2017-2018
Keywords:Financial Performance, Sales/Total Income, Profit after tax (PAT), Earnings per share (EPS)
The Pakistan Stock Exchange is a Pakistan-based stock exchange with trade floors in Karachi, Islamabad, and Lahore. In May 2017, PSX was reclassified as an emerging Morgan Stanley Capital International (MSCI) market, whereas the Financial Times Stock Exchange (FTSE) classified PSX as a secondary emerging market. The research paper analyses the financial performance for the 2017-2018 years of top ten companies in PSX and what led to the fluctuation in their ranking. Only two (02) firms retained their ranking, namely Fauji Fertilizer Company Limited, which was listed as "first" in 2017 and 2018, and International Steels Limited ranked ninth in both 2017 and 2018. Financial metrics, such as sales, profit after tax and earnings per share showed an increasing trend for both enterprises. Besides, the Archroma Pakistan Ltd ranked 7th in 2017, was rated 3rd in 2018. The same was true of International Industries Ltd, which ranked 8th in 2017 and went up to 7th in the following year. On the contrary, only Gross Income / Revenue has increased in both companies, but after-tax profit and earnings per share showed a decline. Companies such as Lucky Cement Ltd, Nestle Pakistan Ltd, Golden Arrow Selected Fund Ltd and Arif Habib Ltd, all or any of which had deteriorated financial factors such as Sales, Profit After Tax (PAT) and Earnings Per Shares (EPS), were either removed from the list or downgraded to the PSX's top ten companies rating in the coming year. The exception, however, was the Unilever Pakistan Food Ltd and Engro Fertilizers Ltd which improved from 2017 to 2018 on all financial factors, such as revenue, profit after tax (PAT), and earnings per share (EPS). Yet they still haven't been able to retain their positions in the 2018 top ten list of PSX companies.
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