Ratio Analysis: A Comparative Study of National Petrochemicals Co. and Sahara Petrochemicals Co. of Saudi Arabia

Financial Statement of a company is a reflection of the operational and financial position of a company. The comparative analysis of two companies similar in nature, size, work, location and objectives etc., facilitates an understanding of the operational and financial soundness of the companies. The Kingdom of Saudi Arabia is aiming for rapid industrialization in its economy. Sahara Petrochemicals Company and National Petrochemicals Company of Kingdom of Saudi Arabia are Joint Stock Companies and producing similar type of petrochemical products. The operational performances of both these companies are primarily very different due to their operational efficiency and better utilization of resources. In this study, it is observed that the operational and financial position of National Petrochemicals is not satisfactory when compared to Sahara Petrochemicals. National Petrochemicals can improve its operational performance after reducing its administrative expenses by increasing other revenues. The shareholders equity in National petrochemicals needs to be increased to improve its financial position