Capital Structure Analysis for Publicly-Traded Companies

This research paper focuses on analyzing the cost of capital of publicly-traded companies. It reviews the literature on capital structure, its importance, the risk associated with different capital structure and the total cost of capital of an organization. The report explains that the main concept of the capital structure is to identify how an organization finances its assets through the equity and debt. The report also studies the optimal level of capital structure and its impact on the overall position of the company. The study is conducted on four companies of the retail industry of Saudi Arabia.

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Capital Structure
Al Yamamah University
Supervised By: Mario Reyes
Submitted By:
Mahammad K. Al Rashed 201611067
Abdulaziz A. Raey 201611177
Khalid H. Al Shammeri 201611176
Abdullah E. Al Dhafyan 201611202
June 2018

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Executive summary:
In this research paper, we focus on the analysing the cost of capital of publicly-traded
companies. We review the literature on capital structure, its importance, the risk associated
with different capital structure and the total cost of capital of an organization. The report
explains that the main concept of the capital structure is to identify that how an organization
finances its assets through the equity and debt. We also studied in the report that the capital
structure concept and the importance of the capital structure is higher and it impacts on the
overall capital structure of the organization at huge level.
Or brief synthesis of the literature, we review the concept of the capital structure,
different types of capital, the concept of an optimal level of the capital. The capital structure
level of the company adds that the main aim of the financial managers and the organization to
set a proper link among the debt and equity to enhance the overall position of the company.
We have studied on the four companies of retail industry of Saudi Arabia. We find
that the capital structure of each organization is different which is derived from the various
internal and external sources and the factors of the company and the industry.

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Contents
Introduction:.....................................................................................................................4
Objective of the research project:.....................................................................................4
Importance of the research project:..................................................................................4
Research project methodology and hypothesis:...............................................................5
Literature review:..............................................................................................................6
Introduction...................................................................................................................6
The concept of capital structure....................................................................................6
Explanation of the four commonly types of fund, the interest paid and the associated
cost for each...........................................................................................................................7
The various risks involved in the different capital structure and its aversion..............8
The advantages and disadvantages of capital financing...............................................9
The total cost risks involved in the different capital structure:..................................11
Capital structure analysis:...............................................................................................13
Conclusion, implementation and recommendation:.......................................................15
References:.....................................................................................................................17
Appendix.........................................................................................................................20

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Introduction:
The report has been prepared to evaluate the capital structure of an organization.
Various methods and the techniques of an organization have been evaluated to measure the
capital budgeting importance and the implementation process of the company. The capital
structure of an organization depends on the various internal factors, industry factors and the
economical factors of the business. The optimal capital structure of the company has been
measured to identify the overall performance.
Objective of the research project:
The main objectives of the capital structure research paper are as follows:
 To determine the concept of capital structure
 To evaluate the optimal capital structure
 To measure the impact of optimal capital structure in an organization
 To forecast the impact of capital structure basis
 To appraise the impact of worst proportion of capital on the overall operations of the
company.
Importance of the research project:
The research proposal of capital structure has been conducted to make it easier to
understand the main reasons behind the optimal capital structure of an organization. The
optimal capital structure is a combination of debts and the equity of the business which
effectively balances the risk and cost of the company. The optimal capital structure is the mix
of debt and equity of the company which is set in such a proportion that the associated risk
with the capital and the cost of the company could be reduced.

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The main objective of the research proposal is to identify the optimal capital structure
level of an organization and enhance the debt % in a point where the benefit from the next
dollar of debt financing becomes equal to the bankruptcy rate of the company. Any
percentage of debt amount directly impacts on the associated risk of the company positively.
The research proposal makes it simpler for the financial managers and the management of the
business to evaluate the optimal level of the capital.
Research project methodology:
The research questions of this report are as follows:
 What are the types of capital?
 Why the optimal capital structure level is so significant for the company?
 What are the important consequences of capital structure in an organization?
 How the management and the financial department of an organization affect the
capital structure of an organization?
Further, for conducting the study, quantitative and qualitative data has been collected to
measure the overall result and a better conclusion. The literature review has been done on
newspaper, journal, articles, books etc. to identify the meaning and the performance of capital
structure in an organization. The data of Saudi Arabia has been calculated to identify the
optimal structure of the companies in the country. The secondary study has been done in the
report.
Literature review:
Introduction:
The main concept of the capital structure is to identify how an organization finances
its assets through the equity and the debt combination. Capital structure plays a crucial role in
an organization as well as it affects the profitability of an organization at great level. Some of
the researcher has explained that capital structure and the profitability level of an

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organization has the positive relations. On the other hand, the Zimmerman and Yahya-Zadeh,
(2011) has argued that the capital structure is not linked with the profitability level of an
organization. We have studied in the report that the capital structure concept and the
importance of the capital structure are huge and it impacts on the overall capital structure of
the organization.
In the part of the literature review, concept of the capital structure, different types of
capital, optimal level of the capital etc has been studied and a report has been prepared on the
basis of that. The capital structure level of the company adds that the main aim of the
financial managers and the organization to set a proper link among the debt and equity to
enhance the overall position of the company.
The concept of capital structure
Capital structure deals with the amount of the equity or debts that is used by the firm to
fund for its operations and to finance its assets. This is generally expressed as the debt to
equity or debt capital ratio. The capital structure of debt and equity are utilized in the
business for acquisitions, expenditures and to make other investments. The objective of the
manager of the firm is to balance between the two capital structure by deciding whether to
raise equity or debt in order to obtain the optimum structure of capital (Zabarankin, Pavlikov
& Uryasev, 2014).
The main study is to examine the impact of the capital structure and the contact of the
capital structure on the profitability level of the company. The capital structure level of an
organization explains that the debt and equity must be raised by the company in such a ratio
that the overall position of the company could be better as well as the overall position of the
company could also be improved. The main intend of the report is to evaluate the optimal
capital structure point of an organization.
The optimal capital structure is a group of debts and the equity of the company which
manages the risk and cost of the company in better way (Weston and Brigham, 2015). The
optimal capital structure is the mix of debt and equity of the company which is set in such a
proportion that the associated risk with the capital and the cost of the company could be
reduced.

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Explanation of the four commonly types of fund, the interest paid and the
associated cost for each
Mainly, the capital of an organization includes the debt and the equity of an
organization. Equity financing helps an organization to improve the capital without changing
the liability of the company whereas the debt amount raises the liability of the company as
well. The description of the equity and the debt financing of the company is as follows:
Equity Financing
Equity financing assists to enhance the funds by issuing the shares of equity, preference
stocks, on securities exchanges. A person who is holding the share is also known as the
stockholder who receives standard payments of dividend and generates profits when there is a
rise in the share. Equity financing basically explains about the ownership of the shareholder
in the organization (Ward, 2012). The increment in the equity position of an organization
enhances the cost of equity position and the overall cost position of the company (Gapenski,
2008).
Debt Financing
In the case of program of debt financing, the firm issues a convertible bond or regular
bonds in the financial markets. The bonds buyer, who is known as a bondholder, gets interest
payments on a periodic during the bond term. The principal amount is refunded at maturity.
Debt financing basically explains about the raiding the capital amount to manage the capital
expenditure through issuing the bonds in the market (Weaver, Weston and Weaver, 2001).
The increment in the debt position of an organization enhances the cost of debt position and
the overall cost position of the company. The debt interest amount is paid by the company on
the principal amount of the company (Schlichting, 2013).
The various risks involved in the different capital structure and its aversion
Further Ross et al, (2018) has added into his study that there are various risks which
are associated in the capital structure of an organization. Some of them has been studied and
presented below to understand the capital structure and its risk briefly.
The potential financial risk:

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The degree of financial risk could be determined by on the control of capital structure
of the corporate organization. An organization at the time of using the debt in its capital,
needs to pay the fixed charges of interest and the requirement of ability to compensate fixed
interest increases the liquidation risk. The risk related to finance also suggests that the
variability of earnings available to their stakeholders (Reilly & Brown, 2011). The risk that is
related to finance that enhances on account of debt utilize of fixed interest bearing securities
among the total capital. The business that has debt financing does not have any financial risk.
Non employment of debt capital ratio:
In case a business does not use borrowings in its capital structure, the business has to
countenance the risk of non-employment of debt capital. The risk of NEDC has an adverse
relationship with the ratio of debt in its total capital. If there is high leverage or debt-equity
ratio, lower is the NEDC risk and vice-versa (Ross, Westerfield & Jaffe, 2007).
This risk explains that if an organization does not use the debt then they cannot make
the use of financial leverage to improve the earnings per share (EPS). Thus the risk explains
that an organization has to reach at a trade off balance between the risk of non employment
and financial risk of debt capital to improve the market value of the business.
Therefore, the business has a reach a point of balance between the non-employment of
debt capital risk and financial risk to enhance its value in market.In order to achieve the
capital structure that is optimal there has to be determination of the generally total risk and
minimum along with exploit the probable return to accomplish the objective of firm’s higher
market value.
Financial flexibility:
It is essential for an organization to raise the capital and the funds in bad time. It must
be presented in the organization as no surprise that it is easier for the organization to raise the
funds in case if increased revenues and higher profitability. However, no one gives the funds
to the bad growing companies and thus it becomes important for the company to disclose all
the good things and the investment to raise the capital (Radebaugh Gray and Black, 2006).
The increment in the bad debts in such a case enhances the flexibility in the finance.
Tax exposure:

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Debt payment of the company is tax deductible and the equity dividends could not be
deducted from the tax expenses. And thus it becomes important for the company to manage
the tax expenses (Peterson & Fabozzi, 2002). If the company raises the funds through debt
payment than the tax expenses and the risk of the company becomes lower and it
significantly enhances the overall operations of the company.
Business risk:
Business risk is amongst one of the basic risk of the business and its operations. The
greater the business risk of an organization would be, the lower the optimal debt ratio of the
business. Such as, if the overall business risk of an organization would be higher than it
would directly make an impact over the business risk of the company (Phillips and Stawarski,
2016).
Growth rate:
Growth rate of an organization explains about the increment rate in the sales and the
other operations of the company. The growth rate of the company mainly depends on the
capital structure of the company due to the fact that the cost of debt and the cost of equity
affect the profitability position of the company at a huge level (Higgins, 2012). And it also
makes an impact over the total growth of the company (Palicka, 2011).
Market conditions:
Market conditions are also a risk for the capital structure and an organization. The
capital structure level of the company could be changed with the changes into the market
position of the company which lead to the company towards the huge losses or the higher
profits (Elton et al, 2009).
The advantages and disadvantages of capital financing
The advantages are as follows:
 Less burden is involved:
With the help of a sound capital financing there is no loan that is to be repaid.
The business does not have to make a loan payment on monthly basis. This also allows
to the company to get relief from the burden of channelling more money for developing
the organisations (Madhura, 2014).

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 There is no Credit issues:
In case the organisation lack solvency by having a poor credit history and a
lacking financial track record, the equity and the debt can be preferred for financing
(King and Santor, 2008).
 To obtain knowledge and gain from partners:
With the help of capital financing, the organisation may form partnership
swith enhanced experienced or knowledgeable individuals. The business may benefit
from the knowledge and the network of the business (Moles, Parrino & Kidwekk,
2011).
The disadvantages of capital are as follows
 The Share of profit:
The investors will have to be given their share of profits. However, this is a
trade-off which is worthwhile if the company is benefiting from the value they bring as
financial backers but in case the company does not earn it would be a drawback.
 Loss of control:
The price which has to be paid for the capital financing all of its prospective
benefits is that there has been share the control of the business with the stakeholders
(Gropp and Heider, 2010).
 Existence of Potential conflict:
The distribution of the ownership along with working with others can result in
conflict along with tension if there exists differences, management style in vision and
techniques of business process (Lord, 2007). It can be an issue that has to be
considered.
Further, it has also been measured that the organization’s capital structure is the main
key which set that what is the growth rate, what is the discount rate and whether the investor
should invest into the company or not. It also decides that whether the company should invest
into the particular project or not (Lumby & Jones, 2007). The measuring of the capital

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structure, the cost of the capital and the total risk involved into the capital structure is
important for the business.
The total cost risks involved in the different capital structure:
Kruth, (2013) explains that the main cost of capital of an organization is the cost of
equity and the cost of debt of the company. The cost of equity and the cost of debt add
together and make the weighted average cost of capital which is overall cost of capital that is
too paid by the corporation to the shareholders of the business. The discussion about the cost
of debt, cost of equity and the WACC of the company are as follows:
Cost of equity:
Cost of equity is the whole cost which is to be paid by the company to its shareholder
against the total equity capital of the organization (Lee & Lee, 2006). The cost of equity of a
business is decided on the basis of the risk free rate (Rf), market return (Rm) and the beta
amount of the company. Cost of equity formula of an organization is as follows:
Risk free rate of return + Premium expected for risk. Cost of equity = Risk free rate of
return + Beta × (market rate of return – risk free rate of return) (Antoniou, Guney and
Paudyal, 2008)
It explains that the cost of equity relates to the total amount of equity and the vaiorus
external and internal factors of the company.
Cost of debt:
Cost of debt is the total cost which is to be paid by the company to its debt holders
and the bond holders against the total equity capital of the organization. The cost of debt of
an organization is decided on the basis of the total interest rate and the tax rate of the
company. Cost of debt formula of an organization is as follows:
Cost of debt = interest rate * (1 – tax rate) (Kinsky, 2011)
It explains that the cost of debt relates to the total amount of debt and the interest rate
and the tax rate of the company (Kaplan and Atkinson, 2015).
Weighted average cost of capital:
Weighted average cost of capital is the total rate which is expected by the company to
pay on the overall resources and the capital which has been generated and enhanced on the

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basis of the total cost amount of the company. The WACC amount represented about the
minimum cost of the company which should be paid by the company to the debt holders and
the equity shareholders of the company against their invested amount (Hillier, Grinblatt and
Titman, 2011). The formula of the WACC is as follows:
(Krantz, 2016)
On the basis of the overall study on the capital structure through various articles and the
books, it has been measured that the capital structure deals with the amount of the equity or
debts that is used by the firm to fund for its operations and to finance its assets (Lemmon and
Zender, 2010). This is generally expressed as the debt to equity or debt capital ratio. The
capital structure of debt and equity are utilized in the business for acquisitions, expenditures
and to make other investments (Higgins, 2012). The main objective of the optimal capital
structure is to manage the risk and the overall cost related to the capital of the company.
Capital structure analysis:
The capital structure of Saudi Stock Exchange Market (“Tadawul”), The Tadawul All
Share Index (TASI) has been calculated. It is the major stock market index in Saudi Arabia
which tracks the performance of all companies listed on the Saudi Stock Exchange. The
capital structure of four companies has been measured in the report which is operating and

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the functions in the same industry, four companies which has been selected for the evaluation
are Fitaihi Holding group, the Jarir marketing co, national gas and industrialization co and
Saudi electricity company (Huang and Ritter, 2009). These four companies have been
chosen for the report because of their market share and the industry in which they are
operating. We have found that these companies are amongst the top companies in the retail
industry and petroleum industry of Saudi Arabia.
Fitaihi Holding group is a firm which holds various businesses in the Saudi Arabia. The
main business of the company is retailing the various FMCG and electrical products in the
market of Saudi Arabia. The business is run by a family which invests into various new
businesses with time to improve the performance of the business. On the other hand, Jarir
marketing co has been established in 1979. It is among the most growing companies of Saudi
Arabia. The company is operating its business in the retail industry of Saudi Arabia. The
retail industry of Saudi Arabia briefs the huge growth in the industry in last few years. Due to
the great increment in the industry, revenue and market share of firms have also been
improved which are working in the same industry.
National gas and Industrialization co engages in the filling, transporation and
marketing of liquefied petroleum gas. The main product of the company includes ground
surface gas tanks, gas tank, cylinder regulators, viber cylinder etc. Simultaneously, Saudi
electricity company is a utility company which enjoys the monopoly on the transmission,
generation and distribution of electric power.
The capital structure of all the four companies have been measured to identify the
different theories of capital structure and their impact on the industry. The capital structure of
Fitaihi Holding group is as follows:
Capital assets pricing model
Calculation of cost of equity
(CAPM)
RF 3.71%
RM 8.38% (Market risk premia, 2018)
Beta 1.080 (Bloomberg, 2018)
Required rate
of return 8.75%

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Cost of debt
Cost of debt:
Net finance
cost ($M) 7,179,859.00
Less: Tax
@20% 1,435,971.80 (Tax summaries, 2018)
After tax cost
of debt 5,743,887.20
Borrowings
amount 52,570,456.00
After tax cost
of debt (%) 10.93%
WACC
Debt Ordinary Shares Total
Cost of Finance 10.93% 8.75%
Market Weights 3.11% 96.89%
WACC 0.34% 8.48% 8.82%
(Morningstar, 2018)
The overall capital structure of the company explains that the book weight of the debt
and equity of the company is 3.11% and 96.89% which explains about huge disturbance in
the overall capital structure of the company. It briefs that the capital has been raised through
equity only which would impact on the overall capital of the company and the risk factor of
the company (Frank and Goyal, 2009).
On the basis of the above calculations, cost of debt and the cost of equity of the
company is 10.93% and 8.73%. It further explains that the total cost of capital of the

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company is 8.82%. It also explains that the capital structure of the company is not at all goo
which would make an impact on the investment level and the profitability position of the
company (Lemmon et al, 2018).
In addition, the capital structure of Jarir Marketing co has been calculated which is as
follows:
Capital assets pricing model
Calculation of cost of equity (CAPM)
RF 3.71%
RM 8.38%
Beta 0.070
(Yahoo
Finance,
2018)
Required rate of return 4.04%
(Fan et al,
2012)
Cost of debt
Cost of debt:
Net finance cost ($M) 901,000.00
Less: Tax @20% 180,200.00
After tax cost of debt 720,800.00
Borrowings amount 148,435,000
After tax cost of debt
(%) 0.49%
WACC

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Debt
Ordinary
Shares Total
Cost of Finance 0.49% 4.04%
Market Weights 8.34% 91.66%
WACC 0.04% 3.70% 3.74%
(Morningstar, 2018)
The overall capital structure of the company explains that the book weight of the debt
and equity of the company is 8.34% and 91.66% which explains about huge disturbance in
the overall capital structure of the company. It briefs that the capital has been raised through
equity only which would impact on the overall capital of the company and the risk factor of
the company (De Jong, Kabir and Nguyen, 2008).
GASCO:
Capital assets pricing model
Calculation of cost of equity
(CAPM)
RF 3.71%
RM 8.38%
Beta 0.66 (Yahoo Finance, 2018)
Required rate of
return 6.79%
Cost of debt
Cost of debt:
Net finance cost
($M) 7110
Less: Tax @20% 1422
After tax cost of debt 5688
Borrowings amount 157425
After tax cost of debt
(%) 3.61%
WACC

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Debt Ordinary Shares Total
Cost of Finance 3.61% 6.79%
Market Weights 12.36% 87.64%
WACC 0.45% 5.95% 6.40%
The overall capital structure of the company explains that the book weight of the debt
and equity of the company is 12.36% and 87.64% which explains about huge disturbance in
the overall capital structure of the company. It briefs that the capital has been raised through
equity mostly which would impact on the overall capital of the company and the risk factor of
the company. It has impacted on the optimal capital level of the company due to which the
leverage position of the company has affected.
Saudi electric company:
Capital assets pricing model
Calculation of cost of equity (CAPM)
RF 3.71%
RM 8.38%
Beta 0.8
Required rate of return 7.45%
Cost of debt
Cost of debt:
Net finance cost ($M) 2,572,396,000.00
Less: Tax @20% 514,479,200.00
After tax cost of debt 2,057,916,800.00
Borrowings amount 221,832,930,000
After tax cost of debt (%) 0.93%
WACC
Debt
Ordinary
Shares Total
Cost of Finance 0.93% 7.45%
Market Weights 58.30% 41.70%

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18
WACC 0.54% 3.10% 3.65%
The overall capital structure of the company explains that the book weight of the debt
and equity of the company is 58.3% and 41.70% which explains about better overall capital
structure of the company. It briefs that the company has raised the capital through debt and
equity both which improves the overall capital of the company and manage the risk factor of
the company. It explains that the optimal capital level of the company is quite better in the
industry due to which the leverage position of the company has also been better.
Comparison table
Fitaihi Holding
group
Jarir marketing
co
National Gas
and
Industrialization
co. (GASCO)
Saudi
electricity
company
(SEC)
Cost of debt 10.93% 4.04% 3.61% 0.93%
Cost of
equity 8.75% 0.49% 6.79% 7.45%
Debt share 3.11% 8.34% 12.36% 58.30%
Equity
share 96.89% 91.66% 87.64% 41.70%
WACC 8.82% 3.74% 6.40% 3.65%
The table explains that the weight of debt and equity of all the comapny are different.
The research has been done by us and it has been measured that the cost of debt of national
gas and industrialization co. is lower and thus the company is required to raise the debt level
a bit. However, the retail industry evaluation explains that the debt level of the industry is
lower than the equity level which is not better on the basis of the leverage level. The total
research on the capital structure of the companies explains that the different theories of
capital structure are adopted by the companies. This different theory is the outcome of the
nature, WACC and other factors of the company.
The evaluation explains that the capital structure of Saudi electricity company (SEC)
is better than the other companies in the country. The company has managed the equity and
debt ratio in better way so that the capital risk of the company could be controlled and the
performance of the company could be improved.

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19
The base capital structure is not good for an organization. Capital structure of the
company is not at all good which would make an impact on the investment level and the
profitability position of the company (Margaritis and Psillaki, 2010). However, if the
company raise the funds through debt amount than the overall capital of the company would
be reduced as well as the risk of the company is also lower.
Conclusion, implementation and
recommendation:
On the basis of the overall study on the capital structure and the associated risk and
return on the capital structure, it has been measured that the each company has different
capital structure of the company which is decided by the financial managers of the company
on the basis of the internal and external factors of the company. The optimal capital structure
is a group of debts and the equity of the company which manages the risk and cost of the
company in better way. Thus, an organization should set the optimal capital structure is the in
such a proportion that the associated risk with the capital and the cost of the company could
be reduced.
The study on the capital structure expresses that the future position of Fitaihi Holding
group, the Jarir marketing co, GASCO and SEC would be improved in terms of leverage
position and cost. The current level of the capital structure briefs that the debt ratio of three
companies are lower than the equity ratio of the company. On the other hand, SEC’s optimal
capital ratio is quite better. The company has managed all the elements in better way. On the
basis of the capital structure theory, it has been found that if the three companies raise the
funds through debt in future then the leverage position of the company would be improved.
With the improved leverage position, the tax liability of the company would be reduced and it
will lead to the lower cost of capital of the company. Further, it has been analyzed that the
companies could invest into the new projects if the particular project is offering more return
than the total weighted average cost of capital of the company.
On the basis of the evaluation on the capital structure of the four real companies, it has
been measured that the capital structure of both the companies are slightly different and these

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20
changes have occurred due to the various internal changes into the organization. On the basis
of the overall study, it has been measured that the capital structure management and set it as
optimal capital structure is one of the crucial choice of the organization which must be set by
the company on the basis of the risk, return, internal choices and the external factors of the
company.

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21
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Running Head: Capital structure
24

Running Head: Capital structure
25
Appendix:
JARIR MARKETING CO (4190) CashFlowFlag BALANCE SHEET
Fiscal year ends in December. 2013-12 2014-12 2015-12 2016-12 2017-12
Assets
Current assets
Cash
Cash and cash equivalents
8584200
0
1280310
00
1096220
00
1577940
00
2003310
00
Total cash
8584200
0
1280310
00
1096220
00
1577940
00
2003310
00
Inventories
7714900
00
8171200
00
7925910
00
8827980
00
9479450
00
Prepaid expenses
5924100
0
2316970
00
1638490
00
1987470
00
2029700
00
Other current assets
2569280
00
2039690
00
1527380
00
1009540
00
1470370
00
Total current assets
1173501
000
1380817
000
1218800
000
1340293
000
1498283
000
Non-current assets
Property, plant and equipment
Land
6345670
00
6345790
00
6760700
00
6564800
00
5320650
00
Fixtures and equipment
1187920
00
1618660
00
1772420
00
1921110
00
2176070
00
Other properties
4407940
00
4798540
00
5322710
00
6701890
00
6483990
00
Property and equipment, at cost
1194153
000
1276299
000
1385583
000
1518780
000
1398071
000
Accumulated Depreciation -
2001150
-
2278800
-
2543830
-
2905250
-
3223830

Running Head: Capital structure
26
00 00 00 00 00
Property, plant and equipment,
net
9940380
00
1048419
000
1131200
000
1228255
000
1075688
000
Other long-term assets
3338400
0
3290600
0
6099200
0
6839200
0
3031590
00
Total non-current assets
1027422
000
1081325
000
1192192
000
1296647
000
1378847
000
Total assets
2200923
000
2462142
000
2410992
000
2636940
000
2877130
000
Liabilities and stockholders'
equity
Liabilities
Current liabilities
Short-term debt
1250000
00
1000000
00
2500000
0
8415300
0
Capital leases 462000 462000 462000 462000 633000
Accounts payable
5274280
00
7110560
00
5836310
00
7939020
00
7170820
00
Taxes payable
2548300
0
3016600
0
2982500
0
2832500
0
Other current liabilities
1299740
00
1076050
00
1370280
00
1582550
00
2724590
00
Total current liabilities
7828640
00
9446060
00
7762870
00
9824440
00
1102652
000
Non-current liabilities
Long-term debt
1250000
00
2500000
0
Capital leases
1316700
0
1270500
0
1224300
0
1178100
0
1071600
0
Deferred revenues
3019300
0
2333300
0
1638400
0 9467000 4889000
Pensions and other benefits 2096100 9647200 1024810 1037150 1328300

Running Head: Capital structure
27
0 0 00 00 00
Other long-term liabilities
5607600
0
Total non-current liabilities
2453970
00
1575100
00
1311080
00
1249630
00
1484350
00
Total liabilities
1028261
000
1102116
000
9073950
00
1107407
000
1251087
000
Stockholders' equity
Common stock
9000000
00
9000000
00
9000000
00
9000000
00
9000000
00
Retained earnings
2073360
00
3201640
00
3808880
00
4060060
00
5014310
00
Accumulated other
comprehensive income
6532600
0
1398620
00
2227090
00
2235270
00
2246120
00
Total stockholders' equity
1172662
000
1360026
000
1503597
000
1529533
000
1626043
000
Total liabilities and
stockholders' equity
2200923
000
2462142
000
2410992
000
2636940
000
2877130
000
JARIR MARKETING CO (4190) CashFlowFlag INCOME STATEMENT
Fiscal year ends in December. 2013-12 2014-12 2015-12 2016-12 2017-12
Revenue
5242666
000
5698723
000
6375378
000
6122559
000
6941935
000
Cost of revenue
4448310
000
4812246
000
5403347
000
5247518
000
5904694
000
Gross profit
7943560
00
8864770
00
9720310
00
8750410
00
1037241
000
Operating expenses
Sales, General and administrative
1463270
00
1596630
00
1633310
00
1703000
00
8203300
0
Other operating expenses 1179200

Running Head: Capital structure
28
00
Total operating expenses
1463270
00
1596630
00
1633310
00
1703000
00
1999530
00
Operating income
6480290
00
7268140
00
8087000
00
7047410
00
8372880
00
Interest Expense 174000 901000
Other income (expense)
2642500
0
3869600
0
4325200
0
4643600
0
3875000
0
Income before income taxes
6744540
00
7655100
00
8519520
00
7510030
00
8751370
00
Provision for income taxes
2119100
0
2014600
0
2348100
0
1309400
0 7478000
Net income from continuing
operations
6532630
00
7453640
00
8284710
00
7379090
00
8676590
00
Net income
6532630
00
7453640
00
8284710
00
7379090
00
8676590
00
Net income available to common
shareholders
6532630
00
7453640
00
8284710
00
7379090
00
8676590
00
Earnings per share
Basic 7.26 8.28 9.21 8.2 9.64
Diluted 7.26 8.28 9.21 8.2 9.64
Weighted average shares
outstanding
Basic
9000000
0
9000000
0
9000000
0
9000000
0
9000000
0
Diluted
9000000
0
9000000
0
9000000
0
9000000
0
9000000
0
EBITDA
6689820
00
7509430
00
8343600
00
7716720
00
9252310
00
FITAIHI HOLDING GROUP (4180) CashFlowFlag INCOME STATEMENT
Fiscal year ends in December. 2013-12 2014-12 2015-12 2016-12 2017-12

Running Head: Capital structure
29
Revenue
249946
016
298446
576
2635551
33
195359
531
1548524
79
Cost of revenue
125916
951
155542
144
1361409
18
105073
842
8603248
0
Gross profit
124029
065
142904
432
1274142
15
902856
89
6881999
9
Operating expenses
Operating income
124029
065
142904
432
1274142
15
902856
89
6881999
9
Other income (expense)
-
808684
72
-
910523
23
-
1137522
13
-
903346
02
-
6117985
9
Income before income taxes
431605
93
518521
09
1366200
2 -48913 7640140
Net income from continuing
operations
431605
93
518521
09
1366200
2 -48913 7640140
Other
-
744548
6
-
742265
7
-
7937938
-
702866
2
-
6636005
Net income
357151
07
444294
52 5724064
-
707757
5 1004135
Net income available to common
shareholders
357151
07
444294
52 5724064
-
707757
5 1004135
Earnings per share
Basic 0.65 0.81 0.1 -0.13 0.01
Diluted 0.65 0.81 0.1 -0.13 0.01
Weighted average shares
outstanding
Basic 550000 550000 5500000 550000 5500000

Running Head: Capital structure
30
00 00 0 00 0
Diluted
550000
00
550000
00
5500000
0
550000
00
5500000
0
EBITDA
124029
065
142904
432
1274142
15
-
448523
98
-
2295832
20
FITAIHI HOLDING GROUP (4180) CashFlowFlag BALANCE SHEET
Fiscal year ends in December. 2013-12 2014-12 2015-12 2016-12 2017-12
Assets
Current assets
Cash
Cash and cash equivalents
3653829
2
3614836
5
4640352
1
3170056
3
8832485
7
Total cash
3653829
2
3614836
5
4640352
1
3170056
3
8832485
7
Other current assets
2768477
38
2648178
39
2740497
46
2361783
94
1999336
18
Total current assets
3133860
30
3009662
04
3204532
67
2678789
57
2882584
75
Non-current assets
Property, plant and equipment
Property, plant and equipment, net
1134144
08
1147173
74
1121308
67
1022453
42
8251813
5
Other long-term assets
3462753
35
4249535
97
3449870
57
4358162
83
3668365
21
Total non-current assets
4596897
43
5396709
71
4571179
24
5380616
25
4493546
56
Total assets
7730757
73
8406371
75
7775711
91
8059405
82
7376131
31

Running Head: Capital structure
31
Liabilities and stockholders'
equity
Liabilities
Current liabilities
Other current liabilities
4964078
8
5259169
3
5346843
0
2947063
0
3071676
6
Total current liabilities
4964078
8
5259169
3
5346843
0
2947063
0
3071676
6
Non-current liabilities
Minority interest 4110325 4428556 5165001 5776776 6001092
Other long-term liabilities
1825841
7
2089685
4
2041815
9
1884473
7
1585259
8
Total non-current liabilities
2236874
2
2532541
0
2558316
0
2462151
3
2185369
0
Total liabilities
7200953
0
7791710
3
7905159
0
5409214
3
5257045
6
Stockholders' equity
Accumulated other comprehensive
income
7010662
43
7627200
72
6985196
01
7518484
39
6850426
75
Total stockholders' equity
7010662
43
7627200
72
6985196
01
7518484
39
6850426
75
Total liabilities and stockholders'
equity
7730757
73
8406371
75
7775711
91
8059405
82
7376131
31
SAUDI ELECTRICITY CO (5110) CashFlowFlag INCOME STATEMENT
Fiscal year ends in December. SAR in
thousands except per share data.
2013-
12
2014-
12
2015-
12
2016-
12
2017-
12
Revenue
355460
05
383362
96
413151
65
499147
57
506153
17
Cost of revenue
125628
48
126625
28
132908
47
469078
73
439953
12
Gross profit
229831
57
256737
68
280243
18
300688
4
662000
5
Operating expenses
Other operating expenses 210950 245755 264314 984032 -

Running Head: Capital structure
32
48 20 74
337738
7
Total operating expenses
210950
48
245755
20
264314
74 984032
-
337738
7
Operating income
188810
9
109824
8
159284
4
202285
2
999739
2
Interest Expense
257239
6
Other income (expense)
114776
0
250834
6 -49202 81732
-
281334
Income before income taxes
303586
9
360659
4
154364
2
210458
4
714366
2
Provision for income taxes 235413
Net income from continuing operations
303586
9
360659
4
154364
2
210458
4
690824
9
Net income
303586
9
360659
4
154364
2
210458
4
690824
9
Net income available to common
shareholders
303586
9
360659
4
154364
2
210458
4
690824
9
Earnings per share
Basic 0.73 0.87 0.37 0.51 1.66
Diluted 0.73 0.87 0.37 0.51 1.66
Weighted average shares outstanding
Basic
415872
5
414551
0
417200
5
416659
4
416659
4
Diluted
415872
5
414551
0
417200
5
416659
4
416659
4
EBITDA
136187
75
146582
18
165263
52
247445
5
971605
8
SAUDI ELECTRICITY CO (5110) CashFlowFlag BALANCE SHEET
Fiscal year ends in December. SAR
in thousands except per share data. 2013-12 2014-12 2015-12 2016-12 2017-12
Assets
Current assets
Cash
Cash and cash equivalents 3992142 6943507 2038229 1222146 1058210
Total cash 3992142 6943507 2038229 1222146 1058210
Inventories 6638256 6602409 6495066
Prepaid expenses 6716297 9568104 8841894
Other current assets
1845164
4
1584367
5
2051238
4
4349837
6
3756949
5
Total current assets
3579833
9
3895769
5
3788757
3
4472052
2
3862770
5

Running Head: Capital structure
33
Non-current assets
Property, plant and equipment
Gross property, plant and equipment
3986911
10
4484694
77
5041830
04
Accumulated Depreciation
-
1609464
62
-
1740223
34
-
1884730
00
Net property, plant and equipment
2377446
48
2744471
43
3157100
04
3543941
05
4042895
36
Intangible assets 372115
Other long-term assets 3244657 4503355 4432372 3856148 2471104
Total non-current assets
2409893
05
2789504
98
3201423
76
3582502
53
4071327
55
Total assets
2767876
44
3179081
93
3580299
49
4029707
75
4457604
60
Liabilities and stockholders' equity
Liabilities
Current liabilities
Short-term debt 1816969 2254469 3347122
1260886
8
Accounts payable
2825488
9
3912225
5
5246041
4
Other current liabilities
1167201
0 5572658 6883995
8209471
9
1517181
23
Total current liabilities
4174386
8
4694938
2
6269153
1
9470358
7
1517181
23
Non-current liabilities
Long-term debt
4392572
9
5118073
5
6225843
6
3498561
5
Deferred revenues
2396641
0
2599927
1
2937007
3
Pensions and other benefits 5182553 5642755 6019260
Other long-term liabilities
1056927
71
1288935
54
1373415
22
2112579
50
2218329
30
Total non-current liabilities
1787674
63
2117163
15
2349892
91
2462435
65
2218329
30
Total liabilities
2205113
31
2586656
97
2976808
22
3409471
52
3735510
53
stockholders' equity
Common stock
4166593
8
4166593
8
4166593
8
Retained earnings
1250728
8
1520510
7
1604626
7
Accumulated other comprehensive
income 2103087 2371451 2636922
6202362
3
7220940
7
Total stockholders' equity
5627631
3
5924249
6
6034912
7
6202362
3
7220940
7

Running Head: Capital structure
34
Total liabilities and stockholders'
equity
2767876
44
3179081
93
3580299
49
4029707
75
4457604
60
SAUDI ELECTRICITY CO (5110) Statement of CASH FLOW
Fiscal year ends in December. SAR in
thousands except per share data.
2013-
12
2014-
12
2015-
12
2016-
12
2017-
12
Cash Flows From Operating Activities
Inventory
-
857928 18981 107343
Prepaid expenses
-
130284
7
-
285180
8 726210
Accrued liabilities -54766 892640
129797
4
Other working capital
-
995324
0
181433
77
118038
93
Other non-cash items
149545
10
148778
50
170443
57
317173
27
336142
27
Net cash provided by operating activities
278572
9
310810
40
309797
77
317173
27
336142
27
Cash Flows From Investing Activities
Investments in property, plant, and
equipment
-
409375
37
-
503118
22
-
562074
58
Property, plant, and equipment
reductions 90656 141093 96161
Acquisitions, net 155000
Purchases of investments
-
173451
Other investing activities
-
947192
-
112018
3 78324
-
559778
42
-
432335
18
Net cash used for investing activities
-
416390
73
-
514643
63
-
560329
73
-
559778
42
-
432335
18
Cash Flows From Financing Activities
Debt issued
365229
49
169941
44
206796
87
Cash dividends paid
-
552194
-
530456
-
531769
Other financing activities
382894
5
687600
0
234444
32
963211
4
Net cash provided by (used for) 397997 233396 201479 234444 963211

Running Head: Capital structure
35
financing activities 00 88 18 32 4
Net change in cash 946356
295636
5
-
490527
8
-
816083 12823
Cash at beginning of period
304578
6
398714
2
694350
7
203822
9
104538
7
Cash at end of period
399214
2
694350
7
203822
9
122214
6
105821
0
Free Cash Flow
Operating cash flow
278572
9
310810
40
309797
77
317173
27
336142
27
Capital expenditure
-
409375
37
-
503118
22
-
562074
58
Free cash flow
-
381518
08
-
192307
82
-
252276
81
317173
27
336142
27
Supplemental schedule of cash flow data