Financial Ratio Analysis for Financial Reportof

Dana Gas Company and TAQA

 

 

 

 

 

 

 

Name : Suhaila Mohamed                                                              ID : 1053309

ShaimaID :

 

Institution :

 

 

 

 

 

 

 

 

 

Table Of Contents for Dana Gas PJSC (DANA)

- FinancList of Tables

-Introduction  Dana Gas, Key Information

-Objectiove ,Dana Gas PJSC,

-Dana Gas PJSC, Financial Analysis

-Dana Gas PJSC, Ratios based on current share price

-Dana Gas PJSC, Annual Ratios

-Liquidity Rtio

-Leverage Ratios

-Profitability Ratios

-Efficiency Ratiosial and Strategic Analysis.

-Conclution

-Refrences

 

 

 

 

 

 

 

 

 

Introduction:

Dana Gas is a public companyis the prior natural gas company in the private sector that is based in the United Arab Emirates although it has operations around Africa, Asia and Middle East.rather it is the first in the entire Gulf region. It is a company which holds assets of natural gas supply chain at the largest level in the entire Gulf region. The firm that began in 2005 is a leader in the natural gas industry in the Middle East region. They deal with the exploration of natural gas, its production, and distribution.

 

The company has made significant steps in the industry with an increasing rate of production over the years to a record 65,000 barrels per day. The company also trades on the Abu Dhabi securities market (Danagas.com, n.d.).

And in the view of increasing its present status in the industry, it is planning to move further in various other fields of producing natural gas through out the Gulf region. It is also expanding its work in Middle East, South Asia and North Africa region. (Dana Gas: Corporate Profile).

 

Dana Gas mainly focuses on the following activities of the business:

1- Ownership of natural gas projects through long supply agreements.

2- It also aims in selling dry gas to the Federal region and other State owned utilities.

In this paper, I will make an analysis of their financial statements for the previous years.

Dana Gas Financial Profile , P.O BOX 2011, Sharjah. Started 2005 .

 

Objective :

To understand the information contained in financial statements with a view to know the strength or weaknesses of the firm and to make forecast about the future prospects of the firm and thereby enabling the financial analyst to take different decisions regarding the operations of the firm.

Standardized Financial Statements Report  RatioAanlyze-DANA GAZ for year December-2013

 

Fundamental Analysis has a very broad scope. One aspect looks at the general (qualitative) factors of a company. The other side considers tangible and measurable factors (quantitative). This means crunching and analyzing numbers from the financial statements. If used in conjunction with other methods, quantitative analysis can produce excellent results.

Ratio analysis isn't just comparing different numbers from the balance sheet, income statement, and cash flow statement. It's comparing the number against previous years, other companies, the industry, or even the economy in general. Ratios look at the relationships between individual values and relate them to how a company has performed in the past, and might perform in the future. It is true that the technique of ratio analysis is not a creative technique in the sense that it uses the same figure & information, which is already appearing in the financial statement.

CLASSIFICATION OF RATIO

 

 

CLASSIFICATION OF RATIO

 

 

 

 

 

 

BASED ON FINANCIAL           BASED ON FUNCTION            BASED ON USER

STATEMENT

 

 

 

1] BALANCE SHEET              1] LIQUIDITY RATIO           1] RATIOS FOR

RATIO                                          2]LEVERAGE RATIO             SHORT TERM

2] REVENUE                                3] ACTIVITY RATIO    CREDITORS

STATEMENT                                4] PROFITABILITY                 2] RATIO FOR

RATIO                                    RATIOSHAREHOLDER

 

3] COMPOSITE                      5] COVERAGE                      3] RATIOS FOR

 

RATIO                                     RATIOMANAGEMENT

 

4] RATIO FOR

LONG TERM

CREDITORS

 

 

Ratio analysis is one of the best possible techniques available to the management to impart the basic functions like planning & control. As the future is closely related  to the immediate past, ratio calculated on the basis of historical financial statements may be of good assistance to predict the future. Ratio analysis also helps to locate & point out the various areas, which need the management attention in order to improve the situation.As the ratio analysis is concerned with all the aspect of a firms financial analysis (liquidity, solvency, activity, profitability & overall performance) , it enables the interested persons to know the financial & operational characteristics of an organisation& take the suitable decision..

 

-Based on  Financial Statement:

 

Accounting ratios express the relationship between figures taken from financial statements. Figures may be taken from Balance Sheet , P& P A/C, or both. One-way of classification of ratios is based upon the sources from which are taken.

-Common-Size Balance Sheets

-Compute all accounts as a percent of total assets

-Common-Size Income Statements

-Compute all line items as a percent of sales

Standardized statements make it easier to compare financial information, particularly as the company grows.

They are also comparing companies of different sizes, particularly within the same industry

 

1] Balance Sheet Ratio:

 

If the ratios are based on the figures of balance sheet, they are called Balance Sheet Ratios. Ratio of current assets to current liabilities or ratio of debt to equity. While calculating these ratios, there is no need to refer to the Revenue statement. These ratios study the relationship between the assets & the liabilities, of the concern. These ratio help to judge the liquidity, solvency & capital structure of the concern. Balance sheet ratios are Current ratio, Liquid ratio, and Proprietory ratio, Capital gearing ratio, Debt equity ratio, and Stock working capital ratio.Balance Sheet Ratio the below:

 

 

 

 

 

 

 

 

 

Financial Ratio Analysis –Dana Gaz for Dec-2013-Balance Sheet

Balance Sheet(all values are in AED mm)	2013	Change%	Percent%	2012	Percent%
Assets	Â	Â	Â	Â	Â
Non-Current Assets	Â	Â	Â	Â	Â
Property, plant and equipment	3519	2%	27%	3437	27%
Intangible assets	2705	-6%	21%	2877	23%
Investment property	99	-4%	0.8%	103	0.8%
Interest in joint ventures	2078	-0.2%	16%	2082	16%
Total Non-Current Assets	8401	Â	Â	8499	Â
Current Assets	Â	Â	Â	Â	Â
Inventories	217	10%	1.7%	198	2%
Trade and other receivables	3098	25%	24%	2485	19%
Available for sale financial assets	367	-61%	2.8%	935	7%
Financial assets at fair value through profit or loss	29	-22%	0.2%	37	0.3%
Cash and cash equivalents	748	24%	5.8%	601	4.7%
Assets classified as held for sale	47	100%	0.4%	-	-
Total –Current Assets	4506	Â	Â	4256	Â
TOTAL ASSETS	12907	1%	100%	12755	100%
Â	Â	Â	Â	Â	Â
EQUITY	Â	Â	Â	Â	Â
Share capital	6602	0%	51%	6602	52%
Statutory reserve	293	23%	2.3%	238	1.9%
Legal reserve	293	23%	2.3%	238	1.9%
Retained earnings	1767	38%	14%	1280	10%
Other reserves	58	-81%	0.5%	310	2.4%
Convertible bonds – equity component	297	69%	2.3%	176	1.4%
Non-controlling interest	11	-27%	0.1%	15	0.1%
TOTAL EQUITY	9321	5%	Â	8859	Â
Â	Â	Â	Â	Â	Â
LIABILITY	Â	Â	Â	Â	Â
Non-CurrentLiabilities	Â	Â	Â	Â	Â
Borrowing	2988	100%	23%	-	-
Provisions	62	22%	0.5%	51	0.4%
Total Non-Current Libilities	3050	Â	Â	51	Â
Current Liabilities	Â	Â	Â	Â	Â
Borrowings	-	-100%	-	3372	26%
Trade payables and accruals	518	10%	4%	473	3.7%
Total Current Libilities	518	Â	Â	3845	Â
TOTAL LIABILITIES	3568	-8%	28%	3896	31%
Liabilities as a result of assets held for sale	18	100%	0.1%	-	-
TOTAL EQUITY AND LIABILITIES	12907	1%	100%	12755	100%

Income Statements Ratio Analysis

1] Revenue Ratio:

Ratio based on the figures from the revenue statement is called revenue statement ratios. These ratio study the relationship between the profitability & the sales of the concern. Revenue ratios are Gross profit ratio, Operating ratio, Expense ratio, Net profit ratio, Net operating profit ratio, Stock turnover ratio.Net Revenue was at 2012 , 1821 compered for the year of 2013 is 1686 it is mean the net revenue decreased because the amount of Royalties high at  the 2013 ( 704000000 but at 2012 ,499000000) .

And Gross profit for that two years ,2012 and 2013 , (1301000000 –1055000000) it is mean the Gross Profit increase for the year of 2013.

 

3] Composite Ratio:

These ratios indicate the relationship between two items, of which one is found in the balance sheet & other in revenue statement.There are two types of composite ratios :

a) Some composite ratios study the relationship between the profits & the investments of the concern. E.g. return on capital employed, return on proprietors fund, return on equity capital etc.

b) Other composite ratios e.g. debtors turnover ratios, creditors turnover ratios, dividend payout ratios, & debt service ratios.

 

Based on Function:

 

Ratio Analysis - Two-Year Comparison	2013	2012	% Variance
Liquidity Ratios -Current Ratio -Quick Ratio -Cash Ratio Coverage Ratios Debt Ratio   Profitability Ratios Percent Gross Profit Percent Profit Margin on Sales Percent Rate of Return on Assets Percent Rate of Return on Equity Price Earnings Ratio Earnings Per Share Coverage Ratios Debt to Total Assets Percent Owners' Equity Equity Multiplier Debt to Equity Cash Flow to Current Maturities Long-Term Debt Times Interest Earned Book Value Per Share Expense to Sales Ratios Percent Depreciation to Sales Percent Owners' Compensation to Sales	Â	Â	Â

 

 

Accounting ratios can also be classified according to their functions in to liquidity ratios, leverage ratios, activity ratios, profitability ratios & turnover ratios.

 

 

 

 

 

 

 

 

 

1-Short-Term Solvency or Liquidity Ratios:

Liquidity refers to the ability of a firm to meet its short-term (usually up to 1 year) obligations. The ratios, which indicate the liquidity of a company, are Current ratio, Quick/Acid-Test ratio, and Cash ratio. These ratios are discussed below.

Short term-solve or Liquidity Indicator	2013	2012	The Indicator Description
1. Current Ratio (working capital ratio)	8.608	1.1068	The current ratio is calculated by dividing current assets by current liabilities. It indicates a company's ability to meet short-term debt obligations.
2. Quick Ratio (acid-test ratio)	8.189	1.055	The quick ratio is calculated by dividing liquid assets.which a company can pay its current liabilities without relying on the sale of inventory.
3. Cash Ratio	1.444	0.156	Cash ratio is calculated by dividing absolute liquid assets (cash and cash equivalents) by current liabilities
Long term-solve or leverage Ratio	2013	2012	The Description
4. Debt Ratio	0.2315	0.2643	Leverage refers to the efficient use of assets to generate business.

 

-CurrentRatio :

This ratio compares the current assests with the current liabilities. It is also known as ‘working capital ratio’ or ‘ solvency ratio’. It is expressed in the form of pure ratio. Analyses the ability of a company to deal with short-term debts through the use of the current assets. It is termed as the liquidity ratio because it assesses the liquidity of a firm. It is calculated as the ratio of current assets/current liabilities.

Formula:

Current assets

                        Current Ratio =

 

            Current liabilities

 

The current ratio for 2012 was   :  (4,256,000,000/3,845,000,000) = 1.1068

and for the following year 2013: (4,459,000,000/518,000,000)   =  8.608

The current assests of a firm represents those assets which can be, in the ordinary course of business, converted into cash within a short period time, normally not exceeding one year. The current liabilities defined as liabilities which are short term maturing obligations to be met, as originally contemplated, with in a year.

 

- Quick Ratio:

Quick Ratio (QR) is the ratio between quick current assets (QA) and CL. QA refers to those current assets that can be converted into cash immediately without any value strength. QA includes cash and bank balances, short-term marketable securities, and sundry debtors. Inventory and prepaid expenses are excluded since these cannot be turned into cash as and when required ,QR indicates the extent to which a company can pay its current liabilities without relying on the sale of inventory.

Formula:

 Current Assets-Inventory

                      Quick Ratio   =

 

 

 Current liabilities

For 2012 was Quick Ratio : (4256000000-198000000) / 3845000000=1.055

For 2013 Ouick Ratio        : (4459000000-217000000) / 518000000= 8.189

Quick Ratio (QR) is the ratio between quick current assets (QA) and CL. With out the inventory , mean the QR increased at 2013 than the oriviouse year for 2012, (QR) refers to good. One drawback of the quick ratio is that it ignores the timing of receipts and payments.

- Cash Ratio

This is also called as super quick ratio. This ratio considers only the absolute liquidity available with the firm.

Formula:

            Cash

     Cash Ratio    =

      Current Liabilities

For 2012 was Cash Ratio : (601000000 / 3845000000 ) = 0.156

For 2013 the  Cash Ratio  : (748000000 / 518000000) = 1.444

Since cash and bank balances and short term marketable securities are the most liquid assets of a firm, financial analysts look at the cash ratio. If the super liquid assets are too much in relation to the current liabilities then it may affect the profitability of the firm.And Cash at 2013 becme increase more than 2012.

 

 

- Debt Ratio :

Calculates the proportion of a firms assets that have been financed through leverage or debt. It is a ratio of the total leverage to the total assets and thus is calculated as total debt/total assets.

Formula :

                      Total Debt

Debt Ratio    =

 Total Assets

 

For the year 2012 Cash Ratio : (3,372,000,000/12,755,000,000) = 0.2643

For the year 2013 Cash Ratio : (2,988,000,000/12,907,000,000) = 0.2315

Asper this anlasiscash ratio at decrease at 2013 comered with the priviouse year of 2012 it is mean the Assets at 2013 moer than 2012.

It shows the relationship between the profit on the one hand & the claims of the outsiders to be paid out of such profit e.g. dividend payout ratios & debt service ratios.

 

Coverge Ratio

-Times Interest Earned :

This ratio measures a company's ability to meet interest payments. A higher number is preferred,

suggesting a company can easily meet interest obligations and can potentially take on additional debt.

Note that this particular ratio uses earnings before interest and taxes because this is the income amount

available to cover interest.

Formula:

                                                               EBIT

Times Interest Earned  =

                                            Interest

 

For the year 2012, Times Interest Earned  was : (1280 /15) = 85.00   times 

For the year 2013 Times Interest Earned  is      :  (1767 / 11) = 160.64 times

 

-Cash Coverage :

Formula:

                                            EBIT +Depreciation

Times Interest Earned  =

                                            Interest

 

For the year 2012, Times Interest Earned  was : (1280+326 /15) = 107 times 

For the year 2013 Times Interest Earned  is      : (1767 +389 / 11) = 196 times

 

4- ProfitabilityRatio :

 

These ratios help measure the profitability of a firm. A firm, which generates a substantial amount of profits per rupee of sales, can comfortably meet its operating expenses and provide more returns to its shareholders. The relationship between profit and sales is measured by profitability ratios. There are two types of profitability ratios: Gross Profit Margin and Net Profit Margin.

Profitability levels : by analyzing the returns that the company has from :

 

 

- Return On Equity ( ROE) :

This ratio expresses the rate of return on equity capital employed and measures the ability of a

company's management to realize an adequate return on the capital invested by the owners in a

company. A higher number is preferred for this commonly analyzed ratio.

Formula:

Net Income

            ROE     =                                          * 100

                                                                          Total Equity

For the year 2012, the return on equity was :(605,000,000/8,859,000,000 * 100%) = 6.829% 

For the year 2013 the return on equity is      : (571,000,000/9,321,000,000 * 100%) = 6.1259%

 

Analysis:The percent rate of return on equity for  Dana Gaz at 2012, 6.829%, whichcompared to the baseline of percent at 2013 , 6.1259%indicates management may not beeffectively managing the profits earnedbased on the owners investment in thecompany .

 

-Return on Aassets (ROA) :

This ratio measures how effectively a company's assets are being used to generate profits. It is one of

the most important ratios when evaluating the success of a business. A higher number reflects a well

managed company with a healthy return on assets. Heavily depreciated assets, a large number of

intangible assets, or any unusual income or expenses can easily distort this calculation.

Formula:

Net Income

               ROA     =                                                                * 100

Total Assets

The Return On Aassetson 2012 was  : (605,000,000 /12755,000,000 * 100%) =  4.7432%

Return On Aassets in theis2013 is     :(571,000,000 / 12907,000,000 * 100%) = 4.4239%

Analysis :The percent rate of return on assets forDana Gazis  2012 , 4.7432%, whichcompared to the baseline of 2013 , is 4.4239%indicates there is a need forimprovement in this area to ensure thecompany can remain competitive andcontinue to operate successfully.

- Gross PrpfitRatio :

This ratio measures the relationship between gross profit and sales. It is defined as the excess of the net sales over cost of goods sold or excess of revenue over cost. This ratio shows the profit that remains after the manufacturing costs have been met. It measures the efficiency of production as well as pricing. This ratio helps to judge how efficient the concern is I managing its production, purchase, selling & inventory, how good its control is over the direct cost, how productive the concern , how much amount is left to meet other expenses & earn net profit.This ratio measures the gross profit earned on sales and reports how much of each sales AED isavailable to cover operating expenses and contribute to profits.

Formula:

Sales-Cost of Sale

               Gross profit ratio      =          * 100

Net sales

The Gross Profit on 2012 was     :  (2320,000,000-194,000,000) /1821,000,000 * 100% = 116.75%

The Gross Profit on the 2013 is : (2390,000,000-242000000) / 1686,000,000 * 100% = 127.40%

Analysis:The percent gross profit for Dana Gaz at 2012 was 116.75%, whichcompared to the baseline of the year 2013 is 127.40% isa good indication of financial health forthe company because increase profit at  the year of . 2013.

 

 

 

 

-Profit Margin Ratio :

Net Profit ratio indicates the relationship between the net profit & the sales it is usually expressed in the form of a percentage.This ratio measures how much profit a company makes on each sales AED received and how well acompany could potentially deal with higher costs or lower sales in the future.This ratio shows the net earnings (to be distributed to both equity and preference shareholders) as a percentage of net sales. It measures the overall efficiency of production, administration, selling, financing, pricing and tax management. Jointly considered, the gross and net profit margin ratios provide an understanding of the cost and profit structure of a firm.

Formula:

 Net Income 

 Profit Margin Ratio   =         * 100

 Net sales

The Profit Margin on 2012 was     :  (605,000,000 / 2320,000,0000 * 100%) = 26.08%

Profit Margin on the 2013 is :  (571,000,000 / 2390,000,000 * 100%) = 23.89%

Analysis :The percent profit margin on sales forDana Gaz at 2012 was26.08%, whichcompared to the baseline of the year 2013 is 23.89%indicates sales may not be contributingenough to the company's bottom line.

The Sales Decresed at 2013 .

 

3- Market value ratios:

 

 

-Earning PerSahre:

Earnings per Share are calculated to find out overall profitability of the organization. An earnings per Share representsearning of the company whether or not dividends are declared. If there is only one class of shares, the earning per share are determined by dividing net profit by the number of equity shares.EPS measures the profits available to the equity shareholders on each share held.

Formula:

                                           Net Income (Profit)

Earning per share =

                                           Number of equity share

 

The higher EPS will attract more investors to acquire shares in the company as it indicates that the business is more profitable enough to pay the dividends in time. But remember not all profit earned is going to be distributed as dividends the company also retains some profits for the business .

The price earnings ratio : is a tool used to make a comparison between the market value of a share of the earnings for a specified period of time. It is calculated by market value of the share/ earnings per share.

The price-earnings ratio as at September 2012 was 4.76 and 8.16 in September the following year (Gurufocus.com, n.d.). Return on equity is a ratio calculated by finding the proportion of net income on the shareholder’s equity. This ratio is used as a measure of a firm.

 

4- Profitability :

 

These ratios help measure the profitability of a firm. A firm, which generates a substantial amount of profits per rupee of sales, can comfortably meet its operating expenses and provide more returns to its shareholders. The relationship between profit and sales is measured by profitability ratios. There are two types of profitability ratios: Gross Profit Margin and Net Profit Margin.

Profitability levels : by analyzing the returns that the company has from :

 

 

 

 

 

 

- Return On Equity ( ROE) :

Shareholders’ Investment at the company

Formula:

                                           Net Income

ROE =

                                           Total Equity

For the year 2012, the return on equity was :(605,000,000/8,859,000,000 * 100%)=6.829%

For the year 2013 the return on equity is      : (571,000,000/9,321,000,000 * 100%)=6.1259%

-Return onAassets (ROA) :

Formula:

                                           Net Income

ROA =

                                           Total Assets

Return on investment is a measure of the efficiency of a company on generating income using the resources it possesses, that is, the total assets.

The Return On Aassets on 2012 was :(605,000,000/12755,000,000* 100%) = 4.7432%

Return OnAassets in the 2013 is : (571,000,000/12907,000,000 * 100%) = 4.4239%

-Gross PrpfitRatio :

This ratio measures the relationship between gross profit and sales. It is defined as the excess of the net sales over cost of goods sold or excess of revenue over cost. This ratio shows the profit that remains after the manufacturing costs have been met. It measures the efficiency of production as well as pricing. This ratio helps to judge how efficient the concern is I managing its production, purchase, selling & inventory, how good its control is over the direct cost, how productive the concern , how much amount is left to meet other expenses & earn net profit.

Formula:

Gross profit

               Gross profit ratio      =          * 100

Net sales
The Gross Profit on 2012 was  :  (1301,000,000/2320,000,000 * 100%) = 56.08%

The Gross Profit on the 2013 is : (1055,000,000/2390,000,000 * 100%) = 44.14%

 

-Profit Margin Ratio :

Net Profit ratio indicates the relationship between the net profit & the sales it is usually expressed in the form of a percentage.

Formula:

 Net Income

Profit MarginRatio   =           * 100

 

Net sales

This ratio shows the net earnings (to be distributed to both equity and preference shareholders) as a percentage of net sales. It measures the overall efficiency of production, administration, selling, financing, pricing and tax management. Jointly considered, the gross and net profit margin ratios provide an understanding of the cost and profit structure of a firm.

The Profit Margin on 2012 was     :  (605,000,000 / 2320,000,0000 * 100%) = 26.08%

Profit Margin on the 2013 is :  (571,000,000 / 2390,000,000 * 100%) = 23.89%

 

Reasons for Change in Ratios Comparing Between 2012&2013:

The price-earnings ratio increase during the period. This rise is due to the fact that the earnings per share reduced over the period whereas the market value increased. This reflects that an investor may pay a high amount for a share, but get a low earning from their investment that is not favorable to a company.The return on equity for the two years was on a decline from 6.829% to 6.1259%. This decrease was as a result of the reduction in the net income in the year 2013. This fall in income can be attributed to the increase in the payment of royalties from 499,000,000 AED to 704,000,000 AED. There was also an increase in the cost of sales, the depreciation and depletion charges plus a loss charged to the company because of the loss of a joint venture. On the other hand, the shareholders equity was on the rise. This gain was as a result of the increase in amount in statutory and legal reserves and the retained earnings. Furthermore, there was also a significant rise in the value of equity component of the convertible bond. This increase is because of the maturity of the sukuk whereby the holders were to be paid in cash and bonds (Reuters, 2012).Therefore, an overall decrease in the net income and increase in the shareholder’s equity brought about the decline in the return on equity ratio.A decline reflect a reduction in financial performance that is not favorable to accompany.The return on the assets also decreased from 4.7432% to 4.4239%. As seen above, the net income had a drop as compared to 2012 due to the increase in cost of sales, depreciation charges and royalties. On the other hand, the total assets increases. The value of property, plant and equipment increased because of additions, intangible asset transfers and work-in-progress transfers. The inventories also rose from the previous year together with receivables as a result of trade. Cash and its equivalents also increased mostly because of the sale of the assets that were held for resale and a significant rise in the finance income. The overall rise in value of these assets was greater than the reduction in assets like investment property. Therefore, a dip in the net income coupled with a rise in the total assets had a negative effect on the return on assets. This suggests that for that period the company were relatively less effective in maximizing the return from the assets invested as compared to the previous year.The debt ratio dipped from 0.2643 to 0.2315. This can be attributed to the decrease in the amount of debt that Dana gas had. There was a decrease in the amount of borrowings. The total assets, as shown above, increased and as a result of these the debt ratio fell. This suggests that the leverage used to finance assets is reducing that is favorable because risk is reduced.The current ratio increased from 1.1068 to8.608. This rise was as a result of the overall increase in current liabilities. The inventories and trade receivables were higher as compared to 2011. Cash and its equivalents also increased significantly. On the other hand, the short term liabilities took a huge dip because of the huge reduction in the amount of borrowings because of the maturity of the sukuk that resulted in payment with cash and bonds(Reuters, 2012). The rise in current assets together with the dip in current liabilities produced the rise in the current ratio. This increase was good because it showed stabilization in the company’s financial strength.

 

Recommendations:

We can recommend in this project that a shareholder should invest in the company because of the reason that the company's shareholder's equity has decrease marginally in the year 2013with a very less increase in the liabilities. This means that company's debt is very less as compare to the assets of the company. When the company  at previous year ( 2012) was increase the shareholder equity with Decrease liabilities this means highy debt to the assets , we can see from the company's trend from the last year (2013) , that is considerable increase in the assets and very less increase in the debt. This means that company's debt to equity ratio as well as debt ratio is decreasing which means that 2013 better than 2012, there is very less amount of financial risk associated with investing in the company. Hence we can recommend to the general stakeholders that they can easily invest in the company in order to earn more dividends. There is another reason for which shareholders can invest in the company because we have described that the company is a producer of natural gas and natural gas is considered to be the future fuel of the country. Hence this suggests that company is going to flourish in the near future. Hence it would be profitable to invest in the company rather thinking of the effects of 2013.

In short we can give some short description for investing in the company:

Ø Market value of the company is increasing.

Ø Company is having higher earnings.

Ø Higher assets and lower debt.

Ø Investors are getting more dividends.

 

Conclusion:

We can recommend from our analysis that according to the financial data given to us and our analysis to the financial data, for the best as per the investment by the shareholders are concerned. The main reason behind this is that there is an increase the liability of the company during this period of time for the company was very less. Hence from our study during the two periods we can say that the best periods in which shareholders could have invested in the company was the year of 2013. But as the time passed, in the year 2012, there was a great increase in the liabilities of the company. This increase in debt of the company shocked the people and made the people or the share holders to change their decision as all the shareholders thought that with this huge increase in the liabilities of the company, company would never be able to survive in the industry. According to our analysis of two year period, financial data of 2012 was the worst as per the point of view of the investors to invest in the company because there was a huge increase in the liabilities of the company.With this decrease in the trust of shareholders on the company, better in the year 2012. This means that the conditions of the companies are increasing year by year. Now we can suggest that people may invest in the company after seeing the betterment in the company's scenario after 2012. And in the last year 2013 company has done a lot to improve its condition in the industry.

References :

1- Danagas.com,. Overview - Dana Gas. Retrieved 11 April 2015, from,http://www.danagas.com/en/article/about-us/overview.html

2-Gurufocus.com,. Dana Gas PJSC (ADX:DANA) Earnings per Share. Retrieved 11 April 2015,from,http://www.gurufocus.com/term/per%20share%20eps/ADX:DANA/Earnings%2Bper%2BShare/Dana%2BGas%2BPJSC

3-Reuters,. (2012). UPDATE 3-Dana Gas restructures $920 mlnsukuk. Retrieved 11 April 2015,fromhttp://www.reuters.com/article/2012/11/07/danagas-sukuk-idUSL5E8M72F820121107

4-Dana Gas: Corporate Profile. (n.d.) Retrieved on March 19, 2010 from http://www.danagas.ae/