Earnings per share is the ratio which is calculated to find out in how extend

shareholders would get if company wants to share its net profit. It serves as an
indicator of a company's profitability.

Net Profit after Tax/No. of Common Shares Outstanding

UNFAVORABLE

ANALYSIS:
ICI Pakistan earning per share in year 2018 is Rs.33.13 which not good because in
2017 it was Rs.35.69 Earnings per share decrease due to a decrease in profit after
tax. Also, increase in fuel prices because ICI Pakistan major operating segments on
fuel sources such as coal, gas and furnace oil.

HOW WE CAN IMPROVE THIS RATIO:

o This ratio can be improved by increasing the sales of the company which can
be done by better management of resources.
o The ratio can also be improved by reducing the expenses of the company
which were increased during this year.
o Another thing which can be done is ICI Pakistan can call back its shares which
are offered in the market.

o PRICE EARNING RATIO:

The price earnings ratio, often called the P/E ratio or price to earnings ratio, is a
market prospect ratio that calculates the market value of a stock relative to its
earnings by comparing the market price per share by the earnings per share. In other
words, the price earnings ratio shows what the investor is willing to pay for a stock
based on its current earnings.

Market Price per Share/Earning Per share

 UNFAVOURABLE

ANALYSIS:
ICI Pakistan price earning ratio was 30.67 in 2017 and 24.19 times in 2018 which is
not good because Investors often use this ratio to evaluate what a stock’s fair market
value should be by predicting future earnings per share. Companies with higher
future earnings are usually expected to issue higher dividends or have appreciating
stock in the future but ICI Pakistan price earnings ratio is low. A company with a
lower ratio, is usually an indication of poor current and future performance. This
could prove to be a poor investment.
HOW WE CAN IMPROVE THIS RATIO:
o Company should be managing its assets efficiently so that it can increase its
EPS.
o They should try to give more dividend to shareholders in order to get more
demand for their shares.
o Reduce Cost of Capital by earning the same profit with less capital.

 BOOK VALUE PER SHARE:

Book value per common share is a measure used by owners of common shares in a
firm to determine the level of safety associated with each individual share after all
debts are paid accordingly.

Common Equity/No. of Common Shares Outstanding

FAVOURABLE
ANALYSIS:
The book value per shares increase due to increase in common equity of ICI because
selling shares of stock, repurchasing of common stock, raising the company's
revenues and decreasing its operating expenses, reinvest profit into buying new
assets. This increase in book value per share is mainly due to increase in sales
HOW WE CAN IMPROVE THIS RATIO:
o Company has to come up with new ideas to increase their increase their
sales.
o ICI Pakistan can furthermore increase it by generating profit by promoting
sales or by reducing expenses due to which the share price of the company
would increase and in turn increase the ratio of the company.

 DIVIDEND PER SHARE:

Dividend Per Share (DPS) is the total amount of dividend attributed to each
individual share outstanding of a company. Calculating the dividend per share
allows an investor to determine how much income from the company he or she will
receive on a per share basis. Dividends are usually a cash payment paid to the
investors in a company.

Earnings Per Share X Dividend Payout Ratio

Or
Total Dividends Paid / Shares Outstanding

UNFAVOURABLE
ANALYSIS:
ICI Pakistan recently expand their business by introducing Soda Ash Plant which
can be reason its dividend per share decrease because this year company plan to
decrease it dividend to 16.50. Dividend per share can tell an investor about the
company's past financial health and its current financial stability. In 2017 Company
dividend per share is Rs 18 and then decrease to 16.50 which is unfavorable for
company because it shows investor that company’s financial position is not so good
and also market condition for company is also not good.
HOW WE CAN IMPROVE THIS RATIO:
 ICI Can increase Dividend per share ratio by increasing profit and reducing
their operation expenses