Asyad Financial Analysis

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ASYAD HOLDING COMPANY

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER, 2007 - 2010

DESCRIPTION 2010 2009 2008 2007

Current Assets

Total Current Assets 382,084,629 290,149,102 181,633,970 166,003,504

Non Current Assets

Total Non Current Assets 118,844,701 63,049,140 42,124,297 37,101,097

TOTAL ASSETS 500,929,330 353,198,242 223,758,267 203,104,601

Current Liabilities

Total Current Liabiliites 216,094,352 165,514,079 124,258,025 120,624,641

Non Current Liabilities

Total Non Current Liabiliites 5,506,043 4,545,256 4,145,689 3,780,256

TOTAL LIABILITIES 221,600,395 170,059,335 128,403,714 124,404,897

Equity

Total Owners' Equity 279,328,935 183,138,907 95,354,553 78,699,704

TOTAL LIABILITIES & EQUITY 500,929,330 353,198,242 223,758,267 203,104,601



ASYAD HOLDING COMPANY

CONSOLIDATED INCOME STATEMENT - AMOUNTS IN SAR

FOR THE YEAR ENDED 31 DECEMBER 2007 - 2010

DESCRIPTION 2010 2009 2008 2007

Operating Revenue 1,012,243,087 668,262,955 249,876,353 205,696,825

Direct Operating Cost (844,726,872) (561,477,422) (193,058,991) (153,456,747)

Gross Operating Profit 167,516,215 106,785,533 56,817,362 52,240,078

General and AdminExp. (36,154,040) (26,646,984) (18,016,159) (13,259,429)

Other Income - 67,965 82,047 18,165

Net Operating Profit 131,362,175 80,206,514 38,883,250 38,998,814

Zakat Provided (2,949,528) (475,610) (2,084,658) (1,657,107)

Net Profit for the year 128,412,647 79,730,904 36,798,592 37,341,707



Ratio Analysis

Ratio analysis is a very valuable tool to quantitatively value a business's performance. The

most important information should be available in order to calculate the ratio is found in

the income statement, balance sheet and cash flow statement. Ratio analysis can be used to

determine:

Business profitability.

Assets efficiency.

Financial strength.

If there enough assets to cash due bills.

Liquidity Ratios

Current Ratio

Working Capital

Current ratio shows the measures a company's ability to pay short-term obligations. The group in

four years is willing to cover its short term liabilities. Year 2010 has high liquidity rate compared

to previous years indicating that over time the group is becoming more liquid and cash rich.

Year 2010 2009 2008 2007

Current Ratio=

Current Assets

1.74 1.75 1.46 1.37

Current liabilities

Year 2010 2009 2008 2007

Net Working

Capital to Total

Assets =

Current Assets-Current

Liabilities33.1% 35.2% 25.6% 22.3%

Total Assets



The Working Capital to Total Assets ratio measures a group's ability to cover its short term

financial obligations by comparing its current assets to its Total Assets. This ratio can provide

some insight as to the liquidity of the group, since this ratio can uncover the percentage

of remaining liquid assets compared to the group's Total Assets. This ratio started gradually from

2007 up till 2010 indicating the Group is becoming more able to pay out its short creditors and

especially in the year 2010.

Long term solvency measures

Total Debt Ratio

Debt-Equity Ratio

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2010 2009 2008 2007

Current Ratio

NWC

Year 2010 2009 2008 2007

Total Debt Ratio

=

Total Assets-Total Equity0.44

times

0.48

times

0.57

times

0.61

timesTotal Assets

Year 2010 2009 2008 2007

Debt-Equity

Ratio =

Total Debt 0.79

times

0.92

times

1.34

times

1.58

timesTotal Equity



Equity Multiplier

There is a significant change in Total debt ratio, Debt-Equity ratio, and Equity Multiplier shows that

ASYAD's solvency position has improved from the Year 2007 to the Year 2010, as the Group rely less

(mainly) on short term debt Islamic financing and replace with equity financing.

Profitability measures

Profit Margin

Return on Assets

0

0.5

1

1.5

2

2.5

3

2010 2009 2008 2007

Total Debt Ratio

Debt-Equity

Ratio

Year 2010 2009 2008 2007

Equity

Multiplier =

Total Assets1.79

times

1.92

times

2.34

times

2.58

timesTotal Equity

Year 2010 2009 2008 2007

Profit Margin=

Net Income

13% 12% 15% 18%

Sales

Year 2010 2009 2008 2007

Return on

Assets=

Net Income

26% 23% 16% 18%

Total Assets



Return on Equity

ASYAD'S profit margin is decreasing from the Year 2007 at 18% to reach 13% in 2010

indicating that as the group is expanding and this process some extra costs are being made to gain

more investments, or maybe due to the huge amounts of new investments the group might be not

efficient in generating enough profits at the same rate of their expansion.

Return on Assets gives an idea of how efficient management is at using its assets to generate

earnings. This rate is increasing from the end of year 2008 all the way through till the year 2010. It

showed an improvement in the management ability to efficiently utilize assets.

Return on Equity return measures the company's profitability provided for the owners as a reward

for their investment in the Group. This can be revealed by the amount of profit the company

generates with the money that owners have invested. ROE has been increasing since 2009 and

onwards as it slightly decreased in 2008 after being relatively high in 2007, which is a good

indicator for the owners.

Year 2010 2009 2008 2007

Return on

Equity=

Net Income

46% 44% 39% 47%

Total Equity



Overall Evaluation of EBGH financial performance

In my opinion EBGH over performance is strong and the hospital financial performance is

so far good, but some stress should be made to control the costs which will increase the

profitability.

Pro forma financial statements

B ALANCE SHEET: 2010 E

0%

10%

20%

30%

40%

50%

2010 2009 2008 2007

Profit

Margin

ROA



Assets Liabilities and Owner’s equity

Current assets 20,971,435 Current liability 10,500,505

Non-current assets 52,416152 Non-current liability 29,071,955

Shareholders’ equity 49,892,189

Total assets 73,387,587 Total L & SHE 69,964,144

ASSUMPTIONS

Current assets and current liabilities will increase proportionally with sales 8%

Non-current liability and equity are constant

Equity will be added by 2,012,674

INCOME STATEMENT: 2010E

Year 2010E

Net Revenues 86,032,535

Total Operating Expenses (83,738,388)

Operating Income 2,294,146

Other Income (Losses) 1,368,770

Net Income 5,031,686

ASSUMPTIONS

Net revenues increase from 2008 to 2009 =7.8%

Let us assume the sales growth rate from 2009 to 2010 is also 8%

Mentioned in the EBGH agreement among owners that 60% is taken by owners out of any yearly

Net income and 40% are reinvested in the Business

Money to be paid to Owners = 5,031,686 x 0.60 =3,019,012

Retained earnings = 5,031,686 x 0.40=2,012,674



External financing needed = 73,387,587 – 69,964,144= 3,423,443 SR

ACHIEVABLE SOURCES FOR EXTERNAL FINANCING

EBGH can go for the option of borrowing or owners can invest more money. Borrowing is

a better choice in my opinion since EBGH has low debt financing percentage and also

because it gains the financing resources in respect of major investment programs from

government financial institutions in Saudi Arabia that support Health care institutions. This

financing cost is cheap considering a normal Business that does not deal with health care.

The effective cost of borrowings from institutions affiliated by the Saudi Government is

typically lower than borrowings from commercial banks and is not subject to commission

rate risk.

Asyad Financial Analysis

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