Final IBF Report

Financial Ratio
Analysis
Wikash Kumar
Ms
Najeha A. Bela
14291
Introduction to Business Finance
R a u h a R a fi q
Section:
1 3 2 5 4A
Institute
Management,
N a u m aof
n Business
Ali
Karachi
Khowaja
TERM REPORT
Spring 2014
14940
Page | 1
Table of Contents
Letter of Acknowledgement............................................................................................................4
Letter of Transmittal........................................................................................................................5
Executive Summary......................................................................................................................... 6
Introduction of the Industry............................................................................................................7
Problems faced by textile sector in Pakistan:..............................................................................8
2013 outlook for the textile industry of Pakistan........................................................................8
GUL AHMED TEXTILE MILLS LTD..............................................................................................9
Overview of company:..................................................................................................................9
Industry overview and performance:...........................................................................................9
Common Size Income Statement...........................................................................................10
Common Size Balance Sheet...................................................................................................12
Financial Ratio Analysis Of Gul Ahmed.........................................................................................17
Liquidity ratios........................................................................................................................... 17
Leverage Ratios.......................................................................................................................... 18
Efficiency Ratios......................................................................................................................... 19
Profitability Ratios.....................................................................................................................21
Equity Ratios..............................................................................................................................23
Analysis.................................................................................................................................. 24
NISHAT TEXTILE MILLS.............................................................................................................26
Overview of the Firm.................................................................................................................26
Vertical.................................................................................................................................... 27
Common Size Balance Sheet..................................................................................................28
Common size income statement.............................................................................................31
Common size balance sheet...................................................................................................32
Horizontal..............................................................................................................................32
Financial Ratio Analysis of Nishat Mills........................................................................................35
Liquidity ratios...........................................................................................................................35
Leverage ratios........................................................................................................................... 36
Efficiency ratios.......................................................................................................................... 37
Profitability ratios......................................................................................................................39
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IBF
Financial Ratio Analysis
Page | 2
Equity Ratios.............................................................................................................................. 41
Analysis.................................................................................................................................. 43
KOHINOOR TEXTILE MILLS......................................................................................................44
Overview of the Company:.........................................................................................................44
Kohinoor Textiles Mills:............................................................................................................44
Contribution to Pakistan:..........................................................................................................44
Common Size Balance Sheet..................................................................................................47
Financial Ratio Analysis of Kohinoor Textiles..............................................................................50
Liquidity ratios:......................................................................................................................... 50
Leverage Ratios:......................................................................................................................... 51
Efficiency Ratios......................................................................................................................... 51
Profitability Ratios.....................................................................................................................53
Equity Ratios..............................................................................................................................55
Analysis...................................................................................................................................... 56
Comparative Analysis Among Firms.............................................................................................57
Explanation of Comparative Ratio Analysis..................................................................................59
Liquidity RATIOS...................................................................................................................... 59
current Raio............................................................................................................................ 59
Quick Ratio............................................................................................................................. 59
working Capital......................................................................................................................60
Leverage ratios........................................................................................................................... 60
Total debt ratio.......................................................................................................................60
Total debt to equity................................................................................................................60
Total capitalization:................................................................................................................61
Interest coverage....................................................................................................................61
efficiency ratios:......................................................................................................................... 61
Average collection period.......................................................................................................61
Inventory turnover.................................................................................................................62
Total Asset Turnover:.............................................................................................................62
Payable Turnover...................................................................................................................63
Profitability Ratio.......................................................................................................................63
Net Profit Margin...................................................................................................................63
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Gross Profit Margin................................................................................................................64
Returns Ratios........................................................................................................................64
Return on Assets (also called Return on Investment)...........................................................64
Return on Equity....................................................................................................................64
EQUITY RATIOS....................................................................................................................... 65
Earning per share:..................................................................................................................65
Price to earning ratio..............................................................................................................65
Book value per share..............................................................................................................65
References...................................................................................................................................... 65
APPENDIX.................................................................................................................................... 66
Appendix A-1.......................................................................................................................... 67
Appendix A-2.........................................................................................................................68
Appendix A-2......................................................................................................................... 69
Appendix B-1..........................................................................................................................68
Appendix B-2.......................................................................................................................... 69
Appendix B-2..........................................................................................................................70
Appendix C-1........................................................................................................................... 71
Appendix C-2.......................................................................................................................... 72
Appendix C-2..........................................................................................................................73
Contribution Statement.................................................................................................................74
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LETTER OF ACKNOWLEDGEMENT
We are thankful to Almighty Allah for giving us the capability and strength to complete
this Term Report Spring 2014 on Financial Ratio Analysis of Textile Industries of Pakistan
of Introduction to Business Finance Course.
We would also like to thank our course Instructor Ms. Najeha A. Bela whose utmost
dedication and devotion provided us with the insight to analyze all the situations
regarding this. It was due to her guidance and teachings that enabled us to finish this
term report.
Report prepared by:
Wikash Kumar
14291
Rauha Rafiq
13254
Nauman Ali Khowaja
14940
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LETTER OF TRANSMITTAL
Ms. Najeha A. Bela
April 29, 2014
Institute of Business Management,

Karachi.
Dear Ms. Najeha,

Here is our Term Report on Financial Ratio Analysis of Textile Industries of Pakistan,
which is to be submitted on April 29, 2014. The report analyzes the various aspects of
Business Finance, its application, implementation and practical work.
We greatly benefited from this report. It helped us to widening our vision, improving
our quality of work, building self-reliance work and gave us a vital experience in order to
improve our analytical and practical skills. We hope it is up to your expectations and
fulfills all the requirements given by you.
Yours Obediently,
Wikash Kumar
14291
Rauha Rafiq
13254
Nauman Ali Khowaja
14940
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EXECUTIVE SUMMARY
The report focuses mainly on the comparative analysis of three companies belonging to the same
industry. The three companies we have worked with are Gul Ahmed Textiles, Nishat Mills
Limited and Kohinoor Textile Mills Limited. This report comprises of the analysis of how the
companies' ratios and values change from the year 2012 to 2013 and how the company has been
performing in the previous years. The analysis provides an idea of how the companies respond
to different economic changes through different indicators and financial ratios. The analysis also
provides a brief idea of whether the liquidity or profitability of firm affects its other ratios and
whether the company's functions are efficient and what are its earnings and payouts to its
shareholders. This report would help in creating a better understanding as to how sales and
changes made in the asset borrowings effects the company's decisions.
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INTRODUCTION OF THE INDUSTRY

Pakistan is one of the largest cotton-producing countries of the world. Both directly and
indirectly, textile sector employs the largest number of the human resource. The industry
contributes more than 60 % (US $ 9.6 billion) to the countrys total exports and contributes
approximately 46 %t to the total output i.e 8.5%of the country GDP. In Asia, Pakistan is the 8th
largest exporter of textile products, catering for 38% employment.
Currently, major losses are being incurred by this industry with foreclosure looming around.
The reasons of this decline are largely contributed by the high cost of production due to increase
in the energy costs. Cost of import has risen due to a depreciating Rupee. Rise in inflation rate
and high cost of financing has also effected seriously the growth in the textile industry. The
sector recorded a 10.2 percent decline in output in the first four months, July-October of
FY2011.
The overall growth of textile industry is noteworthy and appreciable, and regardless of some
hiccups general progress and development of Pakistani textile sector is really good. The
performance of this sector could have been even better if some of the existing policies and
practices get revised and critically reviewed.
The industry's overall contribution of taxes in 2011-12 is expected to reach Rs. 23.5 billion,
including payments of withholding taxes and applicability of lower rate of sales tax of 4% - 6%
on local supplies. Textile exports stood at $12.5 billion from July 2010 to May 2011. During the
last fiscal year, the tax department collected Rs. 10.5 billion as 1.0% withholding tax.
Similarly, textile industry contributed Rs. 2.5 billion at the rate of 0.25% as Export Development
Fund (EDF). Break-up shows that the applicability of lower rate of 4%-6% sales tax on local
supplies would contribute an additional amount of Rs. 11 billion, annually, to the national
exchequer. Moreover, the collection of withholding tax amounted to Rs. 10.5 billion during
ongoing fiscal year.
A leading textile exporter said that the Ministry of Textile had issued three notifications to
facilitate the industry in the past. Textile manufacturers will receive 3% drawback on garments,
2% on home textile and 1% on fabrics. The government has yet to issue any notification in the
extension for these facilities.
Financial year 2011-2011 recorded a decent ratio of textile exports to many of the European,
American and Middle Eastern markets. Not only the raw material, Pakistan also managed to
export hundreds and thousands of finished products to these global markets, showing the real
potential lying in our textiles and garments sectors. Following tables show the growth of cotton
textile industry in Pakistan:
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The previous fiscal period starting from June 2010 to June 2011 experienced severe blows as a
result of massive destruction of cotton crops due to massive floods and heavier rains throughout
the country.
Despite such positive figures and statistics, textile and garment industries in Pakistan have not
shown any considerable progress in producing valued-added items. Our neighbouring countries
like India and China, on the other hand, have achieved the largest share in the global market by
exporting value-added textiles and garments products, while local manufacturers in Pakistan are
way behind in this.
Another mistake we have already made is that we tend to export raw materials to the global
textile buyers, and the same raw material comes back to the Pakistani market in form of finished
value-added textile products and fashion accessories on higher prices.
Problems faced by textile sector in Pakistan:

All things considered, it is apparent that the Pakistani Textile Industry is facing an uncertain
environment. The increase in input cost of minimum wage by 50 percent, increasing interest
rates, non-guaranteed energy supplies, lack of R&D and reduction in cotton production has had
a negative impact on the industrys competitiveness internationally. In order to sustain the
Textile Industry, the new Pakistani government has a tough task ahead and needs to urgently
implement a suitable long-term strategy that provides a level-playing field against their regional
competitors.
2013 outlook for the textile industry of Pakistan

Fiscal year 2011-12 (July 2011-June 2012) was indeed a very difficult year for the Pakistans
textile industry. Extremely precarious energy situation, poor law and order and the
deteriorating economic conditions put a great stress on the textile industry. Almost all the
sectors of textile industry suffered in this period except spinning industry. Exports of yarn
increased by 100% while all other downstream sectors suffered small decline or stagnancy at
best. This increase in yarn exports was spurred by the low price of Pakistani yarn in
international market, and emergence of China as a key buyer. China is moving out of basic
textiles and this has benefitted our spinning industry. But yarn is a low margin commodity and
the textile industry cannot thrive on exports of yarn, when the rest of the value added sectors are
suffering due to unavailability of yarn and other challenges such as energy shortage. This was
the scenario until June 2012. Now the good news is that the value added sectors have also
started to show positive signs as indicated by the statistics for the first six months (July 2012Dec 2012) of the fiscal year. Cotton yarn continued to show remarkable increase of 39% over the
same period last year. However the encouraging signs are 12% increase in cotton fabrics exports,
almost 13.3% for woven garments and 12.7% increase in towel exports. The sectors which
continued to show decline were bedwear (-7.16%) and synthetic textiles (-51%)
Pak rupee declined to reach almost Rs. 100/US$. This slide of Rupee can be accounted for the
renewed exports. However the positive signal is that those categories which showed increase
also registered increase in the unit value with an increase in both quantity as well as value. This
means that Pakistani garments received better export price, an encouraging sign indeed.
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GUL AHMED TEXTILE MILLS LTD

Overview of company:
The story of textiles in the subcontinent is the story of Gul Ahmed. The group began trading in
textiles in the early 1900s. The group entered in the field of manufacturing with the
establishment of today's iconic name of Gul Ahmed Textile Mills Ltd in the year 1953. Since its
listing on the Karachi Stock Exchange in 1970, the company has been making rapid progress and
enjoying a leading position in the world of textiles.
With an installed capacity of more than 130,000 spindles, 300 state-of-the-art weaving
machines and most modern yarn dyeing, processing & stitching units, Gul Ahmed is a composite
unit making everything from cotton yarn to finished products. Gul Ahmed has its own captive
power plant comprising of gas engines, gas & steam turbines, and backup diesel engines.
Believing in playing its role in protecting the environment, Gul Ahmed has also set up a waste
water treatment plant to treat 100% of its effluent, bringing it to NEQS levels.
Gul Ahmed is playing a vital role not only as a textile giant, but has its strong presence in the
retail business as well. The opening of its flagship store Ideas by Gul Ahmed marked the
group's entry into the retail business. Starting from Karachi, Gul Ahmed now has an extensive
chain of more than 40 retail stores across the country, offering a diverse range of products from
home accessories to fashion clothing.
More than 50 years since its inception, the name Gul Ahmed is still globally synonymous with
quality, innovation & reliability.
Industry overview and performance:

Pakistan is one of the largest cotton-producing countries in the world. Both directly and
indirectly textile sector employs largest number of human resource. The industry contributes
more than 60% to countrys total exports and imports. Currently major losses are being
incurred by this industry with foreclosure looming around. The reasons for this decline are
largely contributed by the high cost of production due to increase in energy costs. Sector
recorded 10.2 percent decline in output in first four months of 2011.
Gul Ahmed textile Mills Limited is a company listed on Karachi and Lahore stock exchanges.
Chairman and chief executive officer of GATM is Mr. Mohomed Bashir. It is composite textile
mill and is engaged in the manufacture of textile products. it has state of art production facilities
in its two segments yarn and processing. opening its first 'Ideas' store in 2003, the company was
amongst the first-and subsequently one of the most successful-composite mills that went down
the retail path. GulAhmed is the largest exporter to Europe for home textiles and governs
domestic market with fashion products for quality conscious customer. In November 2013
Karachi stock exchange issued 20% of right shares of Gul Ahmed textile Mills Limited at par
Rs.10.
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Common Size Income Statement
Note
2012
2013
2012
2013
Sales
24
30,201,588
24,918,480
100%
100%
Cost of Sales
25
25,502,336
21,432,746
84.5%
86%
4,699,252
3,485,734
15.5%
14%
Gross Profit
Distribution cost
26
1,509,886
1,322,582
5%
5.3%
Administrative expenses
27
1,086,920
955,070
3.59%
3.83%
Other operating expenses
28
72,356
653
0.24%
0.0026%
2,669,162
2,278,305
8.84%
9.14%
2,030,090
1,207,429
6.72%
4.85%
38,558
166,617
0.13%
0.67%
2,068,648
1,374,046
6.85%
5.51%
1,227,520
1,375,463
4.06%
5.52%
841,128
(1,417)
2.8%
(0.0057%)
139,050
238,947
0.46%
0.96%
Profit/(loss) after taxation
702,078
(240,364)
2.33%
(0.96%)
Earnings/(loss) per share - basic

and diluted (Rs.)
32
4.84
(1.73)
0.16%
0.69%
Other income
29
Operating profit
Finance cost
30
Profit/(loss) before taxation

Provision for taxation
31
Indicators/Symptoms:
Gul Ahmed s cost of goods sold cover the major part of its net sales As cost of goods
sold increases price of product it leads to decline in gross profit of Gul Ahmed covering
lower part of net sales being down from 15.5% to 14% in the years of 2012-2013. The
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finance cost of the company has increased from 4.06% to 5.52% which portrays a
substantial increase in interest expense over time period.
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Over all the net profit of company has decreased from 2.33% to 0.96% which is due to
increase in cost of goods sold , increase in taxation , finance cost and administrative
expenses. As a result of these factors earning per share has decreased considerably in
these two years of 2012-2013. Common Size Balance Sheet
NOTE
2012
2013
2012
2013
Property, plant and equipment
6,828,920
7,132,112
38.5%
33.7%
Intangible assets
26,535
23,130
0.15%
0.11%
Long term investment
58,450
58,450
0.33%
0.33%
Long term loans and advances
2,900
2,061
0.016%
0.0097%
47,801
51,312
0.27%
0.24%
6,964,606
7,267,065
39.3%
34.3%
739,986
723,435
4.17%
3.41%
7,415,451
9,555,224
41.8%
45%
10
2,074,159
2,573,268
11.7%
12.14%
11
169,612
346,429
0.95%
1.64%
27,361
28,172
0.15%
0.13%
190,248
0.89%
ASSETS
NON-CURRENT ASSETS
Long term deposits
CURRENT ASSETS
Stores, spare parts and loose
tools
Stock-in-trade
Trade debts
Loans and advances
Short term prepayments
Income tax refundablepayments less provision
Other receivables
12
182,699
173,714
1.03%
0.82%
Tax refunds due from

Government
13
24,871
229,454
0.14%
1.08%
14
120,013
101,921
0.67%
0.48%
Cash and bank balances
10,754,152
13,921,865
60.7%
65.7%
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17,718,758
21,188,930
15
1,269,571
1,523,486
7.17%
7.2%
16
3,430,000
3,180,000
19.35%
15%
(227,062)
725,016
(1.28)%
3.42%
4,472,509
5,428,502
25.24%
25.6%
17
2,096,432
2,154,999
11.83%
10.17%
18
273,969
316,028
1.55%
1.49%
19
23,894
33,637
0.135%
0.16%
297,863
349,665
1.68%
1.65%
EQUITY AND LIABILITIES

SHARE CAPITAL AND
RESERVES
Share capital
Reserves
Un-appropriated profit/
(accumulated loss)
NON-CURRENT LIABILITIES
Long term financing
Deferred liabilities
Deferred taxation - net
Staff retirement benefits
20
CURRENT LIABILITIES
21
2,716,990
4,211,618
15.33%
19.9%
Trade and other payables
22
171,612
191,792
0.97%
0.9%
7,289,065
8,290,416
41.13%
39.12%
Current maturity of long term

financing
664,636
561,938
3.75%
2.65%
Provision for taxation - net of

payments
9,651
0.054%
10,851,95
4
13,255,764
61.2%
62.6%
Accrued mark-up
Short term borrowings
CONTINGENCIES AND
COMMITMENTS
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21,188,930
17,718,758
Gul Ahmeds balance sheet clearly shows that its current assets make a greater
proportion of total assets as compared to fixed assets over the years of 2012-2013. And
non-current assets have considerably decreased from 39.3% to 34.3% from 2012 to 2013
among which long term investment remains the same however long term deposits and
property, plant and equipment have decreased rapidly from 38.5% to 33.7%.
Among the total assets property, plant and equipment , trade debts and stock-in-trade
make up the major part of total assets. In the current assets stock-in-trade increased
rapidly from 41.8% to 45% while other receivables and cash and bank balances
decreased gradually.
Total equity has increased in smaller extent from 25.24% to 25.6% due to lower increase
in share capital and decrease in reserves from 19.35% to 15%. In liabilities section
current liabilities make greater proportion of total liabilities that have increased from
61.2% to 62.6% in the years 2012-2013 while non-current liabilities cover smaller
portion of total liabilities.
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FINANCIAL RATIO ANALYSIS OF GUL AHMED

Liquidity ratios
Current Ratio = Total Current Assets/Total Current Liabilities
Current Ratio =
Current Asset
13921865
Current Liability
13255764
1.05
Current Ratio =
Current Asset
10754152
Current Liability
10851954
0.99
The current ratio for Gul Ahmed Textiles limited is in 2012 is 0.99 whereas in 2013. It
becomes 1.05 this shows that current ratio is increasing as year goes through. It is
because current assets are increasing whereas current liabilities are decreasing.
Quick Ratio
Quick Ratio =
Current Assets
13921865
Inventory
9555224
Loans and advances
346429
Prepayments
28172
3992040
0.30
Quick Ratio =
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Current liabilities
13255764
Current Assets
10754152
Inventory
7415451
Loans and advances
169612
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Prepayments
27361
Current liabilities
10851954
3141728
0.29
If we talk about quick ratio, from 2012 to 2013 It has increased from 0.24 to 0.27 . the
increased ratio from 2012 to 2013 shows slight increase in liquid assets of company
which also means that they have increased their current assets.
Leverage Ratios
Total Debt to Total Assets
Total debt to total asset =
Total debt
Total asset
Current maturities have not been deducted from total debt
Total debt
Total asset
Current maturities have not been deducted from total debt
13605429
21188930
0.64
11149817
17718758
0.63
In 2013 it shows that the ratio of the firm is 0.64 which means that 64% of the companys total
assets are financed by Total debt, whereas in 2012 the ratio is less to 0.63 which means that
63% of the companys total assets were financed by total debt.
Total Debt to Total Equity:
Total debt
Total Equity
13605429
5428502
2.51
Total debt
Total Equity
11149817
4472509
2.49
In 2012 the total debt to equity ratio was 2.49 which increased to 2.51 in 2013 which clearly
indicates that extent to which firm has financed by its debts has increased from 2012 to 2013 it
shows that total equity that is financed by debt has increased by 0.8% in 2013.
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Total Capitalization:
Total Capitalization :
Total Debt
13605429
Total Capitalization
5778167
2.35
Total Capitalization :
Total Debt
11149817
Total Capitalization
4770372
2.33
In 2012 ratio of total capitalization was 2.33 which now increased to 2.35 in 2013 this means
that Gul Ahmed Textiles Ltd has increased amount of long term debt for long term financing of
the firm by 0.85%.
Time Interest Earned
Times Interest Earned =
Operating Income
Interest expense
Operating income is after taxes but before distribution
2068648
1227520
1.69
Times Intrest Earned =
1374046
1375463
1
Operating Income
Interest expense
Operating income is after taxes but before distribution
In comparison to 2011, in 2012 the company was fully able to stabilize its financial issues. And
their TIE ratio increased from 1 to 1.69 the main reason for increase in TIE ration is increase in
operating income from 2012 to 2013 by 50.5%
Efficiency Ratios
Average Collection Period : Average Collection Period: (Receivables x 360)/Net
Sales
Year
Ratio (Days)
2013
28
2012
30
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In 2013, they give 28 days to their customers to pay back their liabilities. But in 2012 ratio was
considerably at the rate of 30 days to pay back their debts.
Inventory Turnover: cost of goods sold /Inventory

Year
Ratio (Times)
2013
3.01
2012
2.41
In 2012, the inventory turnover was 2.41 and in 2013 the ratio became 3.01 which
means that as the year passes, the company is efficiently converting the inventory into
sales and they are not stocking up the inventory , decreasing their holding cost and in
turn increasing their inventory turnover ratio.
Payable Turnover : COGS / Accounts Payable
Payable Turnover =
Cost Of Goods Sold
25502336
Accounts Payable
4211618
6.05
Payable Turnover =
Cost Of Goods Sold
21432746
Accounts Payable
2716990
7.88
Payable Turnover Ratio in 2012 was 7.88 which got decreased to 6.05 in 2013 so
promptness of customers to pay back their liabilities got decreased in 2013 and average
payable outstanding in 2012 was 45 days that got increased to 60 days in 2013 bringing
negative effect on payable turnover in Gul Ahmed Textiles Limited.
Total Assets Turnover: Net Sales/Total Asset
Total Asset Turnover =
Net sales
30201588
Total assets
21188930
1.43
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Total Asset Turnover =
Net sales
24918480
Total assets
17754152
1.41
From 2012 to 2013 it increases from 1.41 to 1.43, which indicates that in 2012 the
company was able to convert 1.41 times of their assets into sales but in the next year, the
company utilized 1.43 of its assets in generating sales.
Net Worth Turnover
Networth turnover
Net sales
30201588
Equity
5428502
5.56
Networth turnover
Net sales
24918480
Equity
4472509
5.57
In 2012 turnover was 5.57 whereas in case of 2013, the ratio decreased to 5.56 times
which tells us that they have decreased their level of utilization of shareholders' equity.
Profitability Ratios
Net Profit Margin
Profit Margin
Net profit
702078
Net sales
30201588
2.32
Profit Margin
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Net profit
(204364)
Net sales
24918480
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(0.96)
In 2012 firm had profit margin of 0.96% which was due to loss born by Gul
Ahmed textile mills limited which was mainly due to low sales and high
administrative expenses whereas in 2013 profit margin got up to 2.23% and
lead to greater increase in net income and hence greater ratio as compared
to 2012.
Gross Profit Margin:
Profit Margin
Gross profit
4699252
Net sales
30201588
15.56
Profit Margin
Gross profit
3485734
Net sales
24918480
13.99
In 2012 , gross profit margin of Gul Ahmed Textiles Limited was 13.99% which
increased to 15.56% in 2013 which indicated that efficiency of operations and firm
pricing policies increased to greater extent by 11%.
Return on Total Assets

Return on total assets
Net profit
702078
Total assets
21188930
3.31
Return on total assets
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Net profit
(240364)
Total assets
17718758
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1.36
Return on investment or return on assets ratio in 2012 was 1.36% however

in 2013 it got increased to 3.31% which indicates that profitability on assets
of firm in 2013 was comparatively greater as compared to that of 2012.
Return on Equity:
Return on Equity
Net profit
702078
Total Equity
5428502
12.93
Return on Equity
Net profit
(240364)
Total Equity
4472509
(5.37)
In 2012, the company has ratio of 5.37% which shows that the stockholders had no
return on investment and the net loss prevailed therein. However, in 2013, the ratio
increased slightly to 12.93% giving the stockholders high return on investment and
showing that the firms net income increased.
Equity Ratios
Price/Earnings Ratio
P/E ratio
Price per share
23.716
Earning per share
4.84
4.9
P/E ratio
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Price per share
21.071
Earnings per share
(1.73)
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(12.18)
If we look at P\E ratio, in 2012 the ratio was (12.18) which interprets that investors were
willing to pay a low amount for each dollar of earnings made by the company and EPS at
(1.73) suggests that company is losing money per share its stock whereas in 2013 price
earnings ratio increased to 4.9 being good sign that investors are willing to pay higher
amount for each dollar of earnings made by company.
Book Value per share

Book Value
Total Equity
5428502
No of common shares outstanding
152348515
3.56
Book Value
Total Equity
4472509
No of common shares outstanding
126957096
3.52
In 2012 the firms book value is 3.52 whereas in 2013, the book value has increased to
3.56 which show that the shareholders will be happy as they get higher amount.
Analysis
The liquidity ratios include Current and Quick ratios only. The current ratio for the year
2013 is higher than the previous years which result in 0.06% of the overall increment
and the quick ratio increases hand by hand with 0.01% which clearly shows that the firm
has the ability to meet its financial obligations and inventory is utilized effectively to
convert it into the cash.
Leverage Ratios include Total Debt to total assets , Total Debt to Total Equity ,Total
Capitalization and Times interest earned. The total debt to total asset ratio increases by
0.01% which is higher than last years and total debt to total equity ratio increases by
0.02% , total capitalization by 0.02% and times interest earned by 0.69% which is
enhancing Gul Ahmeds capability to cover its interest expenses from funds available
through operations but it does not possess much capability of financing its assets
through debts.
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Profitability ratios include Net profit margin which has increased by 3.28% than 2012,
Gross profit margin increased by 1.57% increment , Return on Total Assets by 1.95%
overall increment and Return on Equity gets increased by 18.3%. it indicates that Gul
Ahmed as compared to previous year has shown greater results in terms of increasing its
profitability and reducing its taxes expense and finance cost simultaneously and
increasing its profitability to shareholders of firm by greatest extent.
Efficiency ratios include Average Collection period which has decreased by 2 days
making Gul Ahmeds efficiency for quick receivables than last years, Inventory turnover
which is increased from 2.41 to 3.01 it means that firm has increased the efficiency of
converting its inventory into sales by 0.6% increment. Assets turnover is increased
slightly by 0.02% than 2012 which gives a highlight that Shell is effectively utilizing its
assets in generating sales and Net worth turnover which also seems to be decreased by
0.01%. The overall analysis puts the results that Gul Ahmed is effectively using its
resources in terms of Inventory turnover and total assets turnover which shows that
Shell has been effectively utilizing its resources however some measures needs to be
taken for quick receivables and net worth turnover.
Equity ratios include price to earnings ratio which has increased as compared to last
years by 17.08% , Dividend Payout is zero, dividend yield is also zero and also the book
value has also increased by 0.04% . This shows that the P/E ratio has become much
attractive enough to the stock holders which results positively in companys benefits.
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NISHAT TEXTILE MILLS

Overview of the Firm
Nishat Mills Limited ("Nishat") is a public company incorporated in Pakistan and
listed on all three Pakistani stock exchanges. Nishat is engaged in textile
manufacturing.
Which involves spinning, combing, weaving, bleaching, dyeing, and printing,
stitching, buying, and selling of textiles? They deal with yarn, linen, cloth and
other goods including fabrics made from raw cotton, synthetic fiber and cloth.
The Company is engaged in the business of textile manufacturing and of
spinning, combing, weaving, bleaching, dyeing printing, stitching, buying, selling
and otherwise dealing in yarn, linen, cloth and other goods and fabrics made
from raw cotton, synthetic fiber and cloth, and to generate, accumulate,
distribute and supply electricity.
Company is providing quality products to its customers within the Pakistan and
outside the Pakistan. Presently company is exporting its all kinds if apparel
products.
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Vertical
2012
2013
2012 (%)
2013 (%)
Sales
44,924,101
52,426,030
100
100
COGS
(38,134,910)
(43,381,545)
84.8
82.7
Gross profit
6,789,191
9,044,485
15.1
17.25
Distribution cost
(2,555,327)
(2,529,455)
5.7
4.8
Administrative
expense
(731,740)
(870,269)
1.6
1.6
Other expense
(343,699)
(409,429)
0.7
0.7
3,158,425
5,235,332
10
Other income
2,683,685
2,739,102
5.9
5.2
Profit from
operations
5,842,110
7,974,434
13
15.2
Finance cost
(1,760,543)
(1,617,581)
3.9
Profit before
taxation
4,081,567
6,356,853
12.1
taxation
(553,000)
(510,000)
1.2
Profit after
taxation
3,528,567
5,846,853
7.8
11
If we compare common sized profit and loss account of 2012 and 2013 of nishat we can
conclude that cost of good sold has decreased by 2.1 % in 2013 whereas gross profit is increased
by 2.15%. distribution cost is also declined by 0.9% which can be due to more production as
there sales have also been increased. Finance cost is decreased by 0.9% which indicates that firm
reduced its long term debts by paying them back in 2013. Net income is increased by 3.2% which
indicates that nishat is doing well.
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Common Size Balance Sheet
Vertical
2012
2013
2012 (%)
2013 (%)
Issued,
subscribed and
paid up share
capital
3,515,999
3,515,999
4.3
reserves
34,246,750
55,401,036
60.4
68.7
Total equity
37,762,749
58,917,035
66.68
73.06
Long term
financing
3,289,538
3,083,410
5.8
3.82
Liabilities
against assets
subject to
finance lease
137,040
66,322
0.24
0.08
Deffered income
tax liability
310,305
499,415
0.54
0.619
3,736,883
3,649,147
6.58
4.52
3,397,640
3,785,501
4.69
Accrued mark-up 269,579
300,755
0.47
0.37
Short term
borrowings
9,665,849
11,939,028
17.06
14.8
Current portion
of non current
liabilities
1,106,902
1,310,769
1.95
1.625
Equity and
liability
liabilities
Non current
liabilities
Current
liability
Trade and other
payables
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Provision for
taxation
686,781
732,359
1.12
0.9
15,126,751
18,068,412
26
22.4
Total liability
18,863,634
21,717,559
33.3
26.9
Total equity and

liability
56,626,383
80,634,594
100
100
Property, plant
and equipment
14,318,639
15,530,320
25.28
19.2
Investment
properties
241,969
394,745
0.42
0.48
Long term
investments
21,912,790
37,378,224
38.69
46.3
Long term loan
268,330
84,997
0.47
0.10
Longterm
deposits and
prepayments
36,984
41,748
0.06
0.05
36,778,712
53,430,034
64.94
66.26
Store, spare
parts and loose
tools
1,019,041
1,285,371
1.79
1.59
Stock in trade
9,695,133
10,945,439
17.1
13.5
Trade debts
3,489,070
6,243,535
6.16
7.7
867,631
1,898,334
1.5
2.3
Short term
deposits and
prepayments
41,008
40,018
0.07
0.04
Other receivables
758,077
1,019,164
1.3
1.2
Accrued interest
30,062
13,550
0.05
0.016
assets
Non current
assets
Current assets
Loan and
advances
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Short term
investment
1,589,093
4,362,880
2.8
5.4
Cash and bank

balances
2,358,556
1,128,862
4.16
1.3
19,847,671
26,937,153
35.0
33.4
267,407
19,847,671
27,204,560
35.0
33.7
56,626,383
80,634,594
100
100
Non current
assets held for
sale
Total assets
0.33
If we analyze nishats common size balance sheet comparing years 2012 & 2013 we can conclude
that there are significant changes in some of its accounts. If we look upon the assets side of
nishats balance sheet we can see that current asstes are decreased by 1.6% which is because
company is keeping less inventory and spare parts and losse tools as compared to 2012. Non
current assets are increased by 1.32% because company has increased its long term
investments.
Non current liabilities are decreased by2.06% because company has reduced its long term
financing by paying of the debts because of which cash is also reduced by 3.3%. we can see that
company has reduced its risk by decreasing their financing through short term running finance.
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Common size income statement
Horizontal
2011
2012
2013
2011
2012 (%)
2013 (%)
Sales
48,565,144
44,924,101
52,426,030
100
92.5
107.9
COGS
(40718697)
(38,134,910)
(43,381,545)
100
93.6
106.5
Gross profit
7,846,447
6,789,191
9,044,485
100
86.5
115.2
Distribution
cost
(2,190,496
)
(2,555,327)
(2,529,455)
100
116.65
115.47
Administrative
expense
(656,756)
(731,740)
(870,269)
100
111.4
132.50
Other expense
(431,220)
(343,699)
(409,429)
100
79.70
94.9
4,567,975
3,158,425
5,235,332
Other income
2,444,985
2,683,685
2,739,102
100
109.76
112.02
Profit from
operations
7,012,960
5,842,110
7,974,434
100
83.30
113.7
Finance cost
(1,601,048)
(1,760,543)
(1,617,581)
100
109.96
101.03
Profit before
taxation
5,411,912
4,081,567
6,356,853
100
75.4
117.46
taxation
(568000)
(553,000)
(510,000)
100
97.3
89.7
Profit after
taxation
4,843,912
3,528,567
5,846,853
100
72.84
120.70
Company is running well in 2013. Sales and gross profit is increased by a great margin however
distribution cost is decreased because of increased sales. Finance cost is also decreased which
indicates that company has paid of some of its longterm debt obligations. Overall profit is
increased by 47.86% which is a good indicator about companys health.
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Common size balance sheet
Horizontal
2011
2012
2013
2011(%)
2012 (%)
2013 (%)
Issued,
subscribed
and paid up
share capital
3,515,999
3,515,999
3,515,999
100
100
100
reserves
31,877,960
34,246,750
55,401,036
100
107.4
173.7
Total equity
35,393,959
37,762,749
58,917,035
Long term
financing
2,659,328
3,289,538
3,083,410
100
123.69
115.9
Liabilities
against assets
subject to
finance lease
202,628
137,040
66,322
100
69.6
32.79
Deffered
income tax
liability
510,640
310,305
499,415
100
60.07
97.8
3,372,596
3,736,883
3,649,147
Trade and
other
payables
2,577,020
3,397,640
3,785,501
100
131.8
146.8
Accrued
mark-up
358,454
269,579
300,755
100
75.2
83.9
Short term
borrowings
10,471,685
9,665,849
11,939,028
100
92.3
114.0
Current
portion of non
1,283,865
1,106,902
1,310,769
100
86.2
102.09
Equity and
liability
liabilities
Non current
liabilities
Current
liability
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current
liabilities
Provision for
taxation
631,325
686,781
732,359
100
108.7
116.0
15,322,349
15,126,751
18,068,412
Total liability
18,694,945
18,863,634
21,717,559
100
100.9
116.1
Total equity
and liability
54,088,904 56,626,383
80,634,594
100
104.6
149.07
Property,
plant and
equipment
13,303,514
14,318,639
15,530,320
100
25.28
19.2
Investment
properties
126,834
241,969
394,745
100
190.7
311.2
Long term
investments
21,337,889
21,912,790
37,378,224
100
102.6
175.17
Long term
loan
849,206
268,330
84,997
100
31.59
10.0
Longterm
deposits and
prepayments
29,502
36,984
41,748
100
125.3
141.5
35,646,945
36,778,712
53,430,034
Store, spare
parts and
loose tools
955,136
1,019,041
1,285,371
100
106.6
134.5
Stock in trade
9,846,680
9,695,133
10,945,439
100
98.4
111.15
Trade debts
2,481,259
3,489,070
6,243,535
100
140.6
251.6
756,351
867,631
1,898,334
100
114.7
250.98
47,211
41,008
40,018
100
86.8
84.4
assets
Non current
assets
Current assets
Loan and
advances
Short term
deposits and
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prepayments
Other
receivables
1,406,890
758,077
1,019,164
100
53.88
72.4
Accrued
interest
34,260
30,062
13,550
100
87.7
39.5
Short term
investment
1,781,471
1,589,093
4,362,880
100
89.2
244.9
Cash and
bank balances
1,132,701
2,358,556
1,128,862
100
208.2
99.6
18,441,959
19,847,671
26,937,153
100
107.6
146.0
267,407
18,441,959
19,847,671
27,204,560
100
107.6
147.5
80,634,594
100
104.6
149.07
Non current
assets held for
sale
Total assets
54,088,904 56,626,383
Current assets are increased which is mainly due to increase in inventory and receivables.
Company has highly invested in properties and paid of its longterm debt obligations because of
which its cash balance has become low. Because of increased sales, account payable is also
increased. Overall company is doing well, its current assets have been increased due to growth in
business of the company
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Financial Ratio Analysis of Nishat Mills

Liquidity ratios
Year
Ratio
2012
1.31
2013
1.4
Current ratio is increased from 1.31 to 1.41 which indicates that company is in a better position to meet its
current financial obligations. Company is having Rs. 1.4 of current assets for every Rs. 1 of liabilities.
Quick Ratio = (Total Current Assets Inventories- prepaid)/Total Current

Liabilities
Year
Ratio
2012
0.668
2013
0.882
Quick ratio is below 1 which is because company is relying too much on its inventory to pay its short term
obligations.in 2012 it low but company has somehow managed to increase it in 2013 by increasing the
sales which resulted in more account receivbles.
Networking Capital = Current Assets Current Liabilities

Year
Ratio
2012
4720920
2013
8868741
Net working capital is increased from 2012 to 2013 which is a good indicator of companys progress. This
increase is mainly due to increase in sales. The company has more flexibility to spend on growing its
business.
Cash ratio = Cash/Current Liabilities

Year
Ratio
2012
0.156
2013
0.06
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Cash ratio is decreased from 2012 to 2013 which is mainly because company has invested a huge amount
in long term investments. It may be a good decision to invest money rather than keeping idle cash.
Leverage ratios
Total Debt to Total Assets Ratio: Total Debt/Total Assets
Year
Ratio
2012
0.33
2013
0.26
These ratios indicates that majority of assets of nishat mills are financed thorugh its equity. This indicates
that the company has Rs. 0.26 in long term debt for each dollar it has in assets. Ratio is decreasing
because companys non current liabilities are decreased in 2013.
Times Interest Earned: Operating Income/Interest Expense

Year
Ratio
2012
3.3
2013
4.9
Company has sufficient profitability to bear four times the amount of its current finance cost. Profit from
operations increased and finance cost is decreased decreased because of which ratio is increased in 2013.
This interest ratio may be the result of the fact that the company is unnecessarily careful about its debts
and is not taking full advantage of the debt facilities.
Debt to equity ratio: total debt/total equity

Year
Ratio
2012
0.49
2013
0.37
The ratio is decreased in 2013 because of increase in equities. This ratio indicates that much of companys
assets are provided by stockholders because of which company is in a safe position and having low risk.
The other side of coin can be that company is not taking advantage of financial leverage to increase its
profitability.
Equity multiplier: total assets/total equities
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Year
Ratio
2012
1.49
2013
1.36
This indicates that 0.73 of companys assets are financed by equity in 2013. The ratio decreased from 2012
to 2013 which indicates that firm has increased its equity.
Efficiency ratios
Debtor turnover ratio: sales/accounts receivable
Year
Ratio (Days)
2012
12.87
2013
8.39
In 2012 the receivables are more liquid and are being collected promptly but this ratio decreased in 2013
because of a huge increase in account receivables. The fall of ratio in 2013 is mainly due to increase in
accounts receivables which is almost doubled.
Average Collection Period: (Receivables x 360)/Net Sales

Year
Ratio (Days)
2012
28
2013
43
Because of decrease in debtors turnover ratios average collection period is increased, previoulsy it took 28
days but now it takes 43 days to collect receivables. This may be an alarming situation for the company
because it indicates that companys accounts receivables aren't as liquid or aren't being converted to cash as quickly
as needed..

Year
Ratio (Times)
2012
3.93
2013
3.96
The inventory turnover ratio is quite low in both years which indicates that company has more inventory
than it really needs. Therefore too much of its capital is tied up in goods that will take long time to sell
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Number of days in inventory: 360/inventory turnover

Year
Ratio (Times)
2012
92
2013
91
According to these ratios it takes quite long for the company to sell of its inventory this is
because company is buying excessive inventory.
Credit turnover: cogs/accounts payable
Year
Ratio (Times)
2012
11.2
2013
11.4
This ratio indicates the prompt payment to suppliers for the goods purchased. Company is able
to attract more suppliers because its quick payments.
Days payable outstanding: 360/credit turnover
Year
Ratio (Times)
2012
32
2013
31
Company takes 31 days to payoff its outstanding invioces in 2013 and in 2012 it takes 32 days.
Operating cycle: DIO + DSO - DPO
Year
Ratio (Times)
2012
120
2013
134
The companys operating cycle is increased which is not a good indicator at all. This indicates
that an investment is locked up in production for 134 days which is quite much.
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Year
Ratio (Times)
2012
0.79
2013
0.65
This ratio indicates that for every dollar of companys assets, company is generating Rs. 0.65 in
revenue. This ratio falls from 2012 to 2013 which shows that company has been less effective in
the use of its total assets.
Net Worth Turnover: Net Sales/Net Worth
Year
Ratio (Times)
2012
1.2
2013
0.88
Profitability ratios
Profit Margin = EAIT/Netsales
Year
Ratio
2012
0.07
2013
0.11
Ratio is increased from 2012 t0 2013 which indicates that business is improving its profitability.
However company can increase its profitability to a great extent if it stops playing the safe
game.
Gross Profit Margin = Gross Profits / Net Sales
Year
Ratio
2012
0.15
2013
0.17
Gross margin is increased from 2012 to 2013 which is a good indicator.this indicates that
company would retain Rs. 0.17 from each dollar of revenue generated, to be put forward paying
off selling, general and administrative expenses, interest expenses and distribution to share
holders.
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EBIT Margin = EBIT / Net Sales

Year
Ratio
2012
0.13
2013
0.15
Ratio is increased which is a good sign for the company. This means that a net profit of Rs. 0.15
is made on each rupee of sales. Increase in ratio indicates that more proportion of revenue is
converted to operating income.
EBT MARGIN= EBT/ NET SALES
Year
Ratio
2012
0.09
2013
0.12
Companys profit before tax is increased form 2012 to 2013.

Return on Total Assets = Net Profits/Total Assets
Year
Ratio
2012
0.06
2013
0.07
This indicates that on each rupee of asset Rs. 0.07 is earned. Increse in return on assets
indicates that company is earning more money on its assets.
Return on Net Worth = Net Profits/Net Worth
Year
Ratio
2012
0.09
2013
0.1
Return on equity is increased from 2012 to 2013 which is a good indicator for companys health.
This indicates that company generates Rs. 0.1 of profit from its equity. The ratio is increased
because of increase in companys equities.
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Equity Ratios
Earnings per share = net income/num of shares out standing
Year
Ratio
2012
10.03
2013
16.62
There is a consistent improvement in eps figure which indicates the improvemnet in earning
power of the company. It means every share of the common stock earns Rs. 16.62 of net income.
Price to Earnings Ratio = Price/Earnings
Year
Ratio
2012
4.4
2013
5.6
Price earning ratios is incresed which can serve as a great attraction for investors and stock
holders. The ratio is increased due to increase in eps.
Dividend Payout = Dividends / Net Profit
Year
Ratio
2012
32.8
2013
21
Company is paying back 21% of its total earnings to shareholders which is quite an attractive
percentage from investment point of view. The percentage is decreasing due to increase in eps
amount.
DIVIDEND YEILD = DIVIDEND PER SHARE /CURRENT PER SHARE
Year
Ratio
2012
6.9
2013
3.7
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Dividends yield is decreased because of increase in the market value per share. This ratio indicates
that an investor earns 3.7% on his investment if he buys the common stock of the company at current
market price
Analysis
All the liquidity ratios are increasing from 2012 to 2013 except the cash ratio. This shows that
company is in a better position to pay off its short term financial obligations. Cash ratio is
decresing because company has invested a huge amount in long term investments and it also ha
spaid off some of its long financing debts. Over all company is in a good position to meet
financial obligations.
By analyzing all the leverage ratios it is quite clear that company is playing safe game by not
taking much outside financing. Interest coverage ratio is quite high which clearly indicate sthat
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company is very careful about its debts and taking full advantage of debt facilities. Most of the
companys assets are provided by stock holders this shows that company is more equity
financed. Overall company is playing good but it can increase its profitability by taking more
advantage of the financial facilities available.
Efficiency ratios of nishat textiles are quite alarming. Collection period is longer than the
payment period. Days in inventory is also very high this is because company is buying excessive
inventory. Company takes a long period in completing its operating cycle and this period is
increased in 2013.
All the Profitability ratios of the company are increasing which is a good sign. Profitability ratios
are increasing very slowly because company is focusing more on its equity rather than on
outside financing. The overall analysis says that nishat is keeping good profit margin however
some measures needs to be taken if they want to increase their profits.
Equity ratios of the company are attractive. Company is giving handsome amount of dividends
to its stock holders. Company is in a positio0n to attract more investors.
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Kohinoor Textile Mills

(A Kohinoor Maple Leaf Group Company)
Overview of the Company:

The Kohinoor Maple Leaf Group was born from the trifurcation of the Saigol group of
companies and is a reputable and leading manufacturer of textiles and cement. KMLG
comprises of Kohinoor Textile Mills limited (KTML) and Maple Leaf Cement factory limited
(MLCF). Both companies are incorporated in Pakistan and are listed on three stock exchanges of
the country. Kohinoor Mills Limited with its state-of-the-art facilities spread over an area of 103
acres is located at 8th KM Manga Raiwind Road near provincial capital city Lahore.
Kohinoor Mills Limited is one of the largest vertically integrated textile manufacturers, started
its successful journey back in 1949. The company has achieved annual sales of US$ 140 million
to customers based in Americas, Europe, Africa, Australia and Asia. We have diversified
products and engaged in manufacturing of Greige and Dyed Fabrics exported to major brands
and retail chains.
Kohinoor Mills Limited has employed a highly qualified and technically trained workforce of
1500 people working as a closely knitted family based on corporate culture, values and beliefs.
Our team is capable of taking on challenges for fulfilling every work related task with dynamism
and dedicated efforts.
Kohinoor is socially responsible company complying with all labour laws of Pakistan and ILO
standards and is certified for :ISO 9001:2000, Oekotex 100, SA 8000:2001, WRAP and C-TPAT.
Kohinoor Textiles Mills:

KTML was established in 1953 at Rawalpindi and is one of the oldest companies of
Pakistan with over 50 years experience in textile manufacturing. It was initially set up
as a spinning and weaving project with 25,000 spindles and 600 looms. However, after
decades of aggressive expansion and modernization KTML has emerged into a fully
vertically integrated home textiles company with state of the art capabilities for
spinning, weaving, dyeing, printing and stitching. The company has a diverse customer
base with sales in both the local and export markets. The main international markets
include Asia, Europe, USA and Australia.
Contribution to Pakistan:
Contribution to GDP and Employment:
The contribution of this industry to the total GDP is 8.5%. It provides employment to 38% of the
work force in the country, which amounts to a figure of 15million. However, the proportion of
skilled labor is very less as compared to that of unskilled labor.
Finishing Look And Control Components

The products manufactured locally, when displayed against foreign goods - offer a
poor look primarily because of the unsightly finishing of welding seams,electroplating,
painting and other surface treatments. In addition, the adoption of wrong design
Term Report 2014
IBF
P a g e | 44
parameters, or the attempt to reduce the cost of production, lead to the incorporation
of under-sized electrical motors and electric / electronic control panels
Need For Training Institutions
Diploma Level Courses on the pattern of Pak-Swiss Training Centre inKarachi should also be
opened in the Textile Institutions in Faisalabad and Karachiand more such courses
should be introduced in the Polytechnics in areas like Multan,Hyderabad, Lahore and
Gujranwala.
Exhibitions
Most of these small workshops are shyor afraid of getting registered or displaying their p
roducts, mainly from the fear of the revenue collection, labor controlling and other
government regulating agencies. This fear keeps them awayfrom the mainstream
Industry.
This
also
leads
to
the
lack
of
interaction
among
thesmall scale, medium scale and higher level industry for a purposeful vendor develop
ment. National Exhibitions held annually can be very helpful in bringing out theskills,
the range of products and opportunities of group collaboration. It will help the planners
and large scale engineering industry in defining the way for developing skillsin order to
make this sector strong and viable
The interaction between the foreign textile manufacturing industries could also be
enhanced by facilitating the indigenous Textile Engineering Industry to participatein the
specialized Exhibitions and fairs being held in those countries
Term Report 2014
IBF
P a g e | 45
PARTICULARS
Sales
Note
27
2013
14250439
Cost of Sales
28
(1211618)
Gross Profit
Distribution Cost
Administration
Expense
Other Expenses
Other Income
Profit from
Operations
Finance Cost
Profit Before
Taxation
Taxation
Profit After
Taxation
Earnings Per
Share
2013
100
2012
100
85.02
83.52
29
2134252
(438598)
2012
11146698
(9310049
)
1836649
(402526)
14.98
3.08
16.48
3.61
30
(258398)
(210356)
1.81
1.89
31
32
(50733)
(747729)
1386523
(116011)
(728893)
1107756
0.36
5.25
9.73
1.04
6.54
9.94
33
52455
67273
0.37
0.60
1438978
1175029
10.10
10.54
(640543)
(870740)
4.49
7.81
798435
304289
5.60
2.73
(313903)
(187860)
2.20
1.69
484532
116429
3.40
1.04
1.97
0.47
0.138
0.042
34
If we look at the Gross Profit of Kohinoor Textile Mills in 2012 we have 16.48% which
has decreased to 14.98% in 2013. The reason behind decreasing the profit margin rate
by KTM is that they have lowered the cost of goods it sells or by using higher quality,
and thus more expensive material to make the goods. However if we look at the Net
profit of KTM, they have increased their profit from 2.73 to 5.60% annually which is
quite good and appreciable.
Term Report 2014
IBF
P a g e | 46
Common Size Balance Sheet
Equities & Liabilities:

Equity and Liabilities
PARTICULARS
Not
e
2013
2012
2013
2012
370000
0
300000
400000
0
370000
0
300000
400000
0
24.15
24.35
1.96
1.97
26.11
26.32
2455262
2455262
16.03
16.16
2544007
4999269
2059475
4514737
16.61
32.63
13.55
29.71
3673825
3673825
23.98
24.17
38958
519135
0.25
3.42
20501
0.13
350549
389507
140175
679811
2.29
2.54
0.92
4.47
9
10
11
1248315
104101
4329341
1161892
185698
4364111
8.15
0.68
28.26
7.65
1.22
28.72
12
576239
617856
3.76
4.07
6257996
6647503
6329557
7009368
40.85
43.39
41.65
46.12
1532059
7
1519793
0
100.0
0
100.0
0
Equity
Share Capital and Reserves
Authorized share capital
Issued, subscribed and paid up

share capital
Reserves
Total Equity
Surplus on revaluation of land
and investments properties
Liabilities
Non-Current Liabilities
Long term financing
Liabilities against assets subject
to finance lease
Deferred income tax liability
Current Liabilities
Trade and other payables
Accrued mark up
Short term borrowings
Current portion of non-current
liabilities
Total Liabilities
Total Equity & Liability
Term Report 2014
IBF
P a g e | 47
PARTICULARS
Not
e
2013
2012
14
5959112
6161381
15
16
3006
1729843
17
3248680
18
40382
1098102
3
6284
1728886
324868
0
50515
1119574
6
19
365281
20
2013
201
2
Assets
Non-Current Assets
Property, plant and equipment
Intangible asset
Investment properties
Long term investment
Long term deposits
Current Assets
Stores, spare parts and loose
tools
stock in trade
Trade debts
Advances
Security deposits and short
term prepayments
Accrued interest
Other receivables
Short term investments
Taxation recoverable
Cash and back balances
Total Assets
0.26
40.5
4
0.04
11.38
21.3
8
0.33
71.67
73.67
320486
2.38
2.11
1768203
1529949
11.54
21
22
1066724
223272
986683
312406
6.96
1.46
10.0
7
6.49
2.06
23
32585
25909
0.21
0.17
6229
412521
1040
142867
320852
217
308494
611
131926
385503
4339574
4002184
0.04
2.69
0.01
0.93
2.09
28.3
3
0.00
2.03
0.00
0.87
2.54
26.3
3
1532059
7
1519793
0
100
100
24
25
26
38.9
0
0.02
11.29
21.20
Current assets are a greater proportion of the total assets as compared to fixed assets
over the years 2013 to 2012. Out of all the assets, fixed assets (property, plant and
equipment) and Stock-in-trade are the largest percentage of the total assets.
Term Report 2014
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P a g e | 48
Fixed assets and inventory show a gradual increase from 2012 to 2013. However, stores
and spares increase gradually. There is an increase in trade debts from 2012 to 2013.
Loans and advances have been quite decreased in 2013. There is a slow incline in other
receivables from 2012 to 2013.
Total equity has gradually inclined from 2012 to 2013, due to incline in inappropriate
profit and reserves. Current liabilities have decreased at a rate of 40.85% to 41.65% from
2012 to 2013.
Current liabilities make up a larger proportion of total equity and liabilities as compared
to non-current liabilities.
Term Report 2014
IBF
P a g e | 49
Financial Ratio Analysis of Kohinoor Textiles

Liquidity ratios:
Year
Ratio
2013
0.693
2012
0.632
Current ratios obtained by dividing total Current assets by total current liabilities. The
current ratio for Kohinoor Textile Mills (KTM) in 2012 is 0.632% where as in 2013 it
becomes 0.693 %. This shows that the Current Ratio is increasing as year passes
through. It is because the current assets are increasing and current liabilities are
decreasing.
Quick Ratio = (Total Current Assets Inventories- prepaid)/Total Current
Liabilities
Year
Ratio
2013
0.375
2012
0.341
If we talk about the quick ratio, from 2012 to 2013 it increases from 0.34 to 0.37
percent. from 2012-13 , the company's ratio increased slightly which indicates that they
had increased their current assets.
Networking Capital = Current Assets Current Liabilities

Year
Ratio
2013
(1918422)
2012
(2327373)
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P a g e | 50
Leverage Ratios:
Total Debt to Total Assets Ratio: Total Debt/Total Assets
Year
Ratio
2013
0.434
2012
0.461
In 2012 it shows that the ratio of the firm is 0.461 which means that 46% of the
companys total assets are financed by Total debt, whereas in 2013 the ratio is decreased
to 0.43 which means that only 43% of the companys total assets are financed by total
debt.
Times Interest Earned: Operating Income/Interest Expense
Year
Ratio
2013
2.246
2012
1.349
In comparison to 2012, in 2013 the company was able to stabilize its financial issues.
And their TIE ratio increased from 1.349 to 2.246.
Efficiency Ratios
Average Collection Period: (Receivables x 360)/Net Sales
Year
Ratio (Days)
2013
26.94 or 27
2012
31.86 or 32
In 2012, they give 32 days to their customers to pay back. But in 2013, they decreased
their collection period from 32 days to 27 days.
Year
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Ratio (Times)
IBF
P a g e | 51
2013
6.852
2012
6.085
In 2012, the inventory turnover was 6.085 and in 2013 the ratio became 6.852 which
indicate that as the year passes, the company is efficiently converting the inventory into
sales and they are not stocking up the inventory and hence not increasing their holding
cost.
Year
Ratio (Times)
2013
0.930
2012
0.733
From 2012 to 2013 it increases from 0.733 to 0.930, which indicates that in 2013 the
company was not able to convert much of their assets into sales but in the previous year,
the company utilized more of their assets in generating sales.
Net worth Turnover: Net Sales/Net Worth
Year
Ratio (Times)
2013
1.643
2012
1.361
In 2012 turnover was 1.36 whereas in case of 2013, the ratio increased to1.643 times
which tells us that they have increased their level of utilization of shareholders' equity.
Net Working Capital Turnover: Net Sales/Net Working Capital
Year
Ratio
2013
(7.428)
2012
(4.789)
Term Report 2014
IBF
P a g e | 52
NWC turnover for 2012 is (4.789), which shows that the firm has no more current
liability than current asset and it 2013 its current liabilities increases, increasing the
NWC ratio to (7.428)
Profitability Ratios
Profit Margin = EAIT/Netsales
Year
Ratio
2013
0.034
2012
0.010
The firm had a profit margin of 0.010 in 2012. In 2013 there was an increase in net
income which resulted in the increase of ratio to 0.034, hence not giving a good
turnover yield.
Gross Profit Margin = Gross Profits / Net Sales

Year
Ratio
2013
0.150
2012
0.165
EBIT Margin = EBIT / Net Sales

Year
Ratio
2013
0.101
2012
0.105
EBT MARGIN= EBT/ NET SALES

Year
Ratio
2013
0.056
2012
0.027
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P a g e | 53
Return on Total Assets = Net Profits/Total Assets

Year
Ratio
2013
0.032
2012
0.008
In 2012 the company had a 0.008 return on its assets. However, it increased to 0.032 in
2013which shows that the company was using its assets efficiently.
Return on Net Worth = Net Profits/Net Worth
Year
Ratio
2013
0.056
2012
0.014
In 2012, the company had ratio of 0.014 which shows that the stockholders had less
return on investment and the net income was low. However, in 2013, the ratio increased
to 0.056 giving the stockholders more return on investment and showing that the firms
net income increased.
Return on Net Working Capital = Net Profits/Net Working Capital
Year
Ratio
2013
(0.253)
2012
(0.050)
In 2012, the ratio was -0.050.This shows us that the firm was not using its resources
efficiently and they did not have good resources to carry receivables and inventory. In
2013, however, the firm was not able to recover a bit. Return on Working capital
increased to -0.253%. This shows us that firm was not able to use its resources
efficiently as compared to 2012.
Equity Ratios
Price to Earnings Ratio = Price/Earnings
Year
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Ratio
IBF
P a g e | 54
2013
12.69
2012
53.19
If we look at P/E ratio, in 2012 the ratio is 53.19 times which tells us that the investors
are willing to pay a good price for companys share. The firms balance sheet and profit
loss account for 2013 shows that it has decreased to 12.69 times, which is not good and
insufficient price to earnings ratio as compared to 2012.
Dividend Payout = Dividends / Net Profit
Year
Ratio
2013
2012
No dividend paid in 2012 and 2013. Therefore, no dividend payout ratio will be
calculated.
DIVIDEND YEILD = DIVIDEND PER SHARE /CURRENT PER SHARE
Year
Ratio
2013
2012
No dividend paid therefore no dividend yield in 2012 and 2013.

Book Value per Share = Net Worth/Shares
Year
Ratio
2013
3.532
2012
3.335
In 2012 the firms book value is 3.335 whereas in 2013, the book value has increased to
3.532 which show that the shareholders will be quite happy as they get at least some
lower amount.
Term Report 2014
IBF
P a g e | 55
Analysis
The liquidity ratios include Current and Quick ratios only. The current ratio for the year
2013 is higher than the previous years i.e. 2012 which result in 0.632 of the overall
increment and the quick ratio is also increased hand by hand with 0.375 in 2013 from
0.341 in 2012 which clearly shows that the firm has to meet up with the financial
obligations.
Leverage Ratios include Total Debt to total assets and Times interest earned. The total
debt to total asset ratio is 0.434 which is lesser than last year i.e. 2012 with 0.461and
time interest earned is 2.246 higher than last years which does allow KTM with much
capabilities to face its interest expenses from funds available through operations.
Efficiency ratios include Average Collection period which has decreased by 5 days (in
2012 it was 32 and now in 2013 it is 27) which points out the KTMs efficiency for quick
receivables than last years, Inventory Turnover which is increased from 6.085 to 6.852
which points out that the firm not have appropriate inventories given the sales volume.
Total Assets turnover is increased by slightly than 2012 which gives a highlight that
KTM is effectively utilizing its assets in generating sales and Net worth turnover which
also seems to be increased to 1.643 from 1.361. The overall analysis says that KTM is
effectively using its resources in terms of Inventory turnover and total assets turnover
which shows that KTM has been effectively utilizing its resources effectively however
some measures needs to be taken for quick receivables.
Profitability ratios include profit margin which has increased from 0.010 to 0.341,
Return on total assets which increased to 0.032 from 0.008, Return on equity which
also increased and return on Net working capital also seems to be increased. The overall
analysis says that KTM is keeping good profit margin however some measures needs to
be taken in terms of increasing its profitability and investments in current assets.
Equity ratios include price to earnings ratio which decreased as compared to last years,
Dividend Payout is zero, dividend yield is also zero and also the book value which has
decreased. This explains that the P/E ratio is not attractive enough to the stock holders
which can result negatively.
COMPARATIVE ANALYSIS AMONG FIRMS

GUL
AHME
D
Term Report 2014
KOHINOO
R
NISHA
T
IBF
INDUSTR
Y
P a g e | 56
AVERAGE
2012
2013
2012
2013
2012
2013
2012
2013
0.99
1.05
0.632
0.693
1.31
1.4
0.977
1.047
QUICK RATIO
0.29
0.3
0.341
0.375
0.668
0.882
0.433
0.52
NET WORKING
CAPITAL
(97802
)
66610
1
(2327373)
(1918422
)
472092
0
886874
1
2295745
761642
0
TOTAL DEBTASSET RATIO
0.63
0.64
0.461
0.434
0.33
0.26
0.473
0.444
TOTAL DEBTEQUITY RATIO
2.49
2.51
1.55
1.32
0.49
0.37
1.51
1.4
TOTAL
CAPITILIZATIO
N
2.33
2.35
1.392
1.319
0.45
0.34
1.39
1.33
TIMES
INTEREST
EARNED
1.69
1.349
2.246
3.33
4.9
1.9
2.945
AVERAGE
COLLECTION
PERIOD
30
28
32
27
28
43
30
33
INVENTORY
TURNOVER
2.41
3.01
6.08
6.85
3.93
3.96
4.14
4.6
PAYABLE
TURNOVER
7.88
6.05
8.99
12.67
11.2
11.4
9.36
10.04
TOTAL ASSET
TURNOVER
1.41
1.43
0.733
0.930
0.65
0.79
0.931
1.05
NET WORTH
TURNOVER
5.57
5.56
1.361
1.643
1.2
0.88
2.71
2.69
NET PROFIT
MARGIN
(0.96)
2.32
0.010
0.034
0.07
0.11
(0.293)
0.821
CURRENT
RATIO
Term Report 2014
IBF
P a g e | 57
GROSS PROFIT
MARGIN
13.99
15.56
0.165
0.150
0.15
0.17
4.76
5.3
RETURN ON
TOTAL ASSETS
1.36
3.31
0.008
0.032
0.06
0.07
0.476
1.14
RETURN ON
TOTAL EQUITY
(5.57)
12.93
0.014
0.056
0.09
0.1
(1.822)
4.4
EARNING PER
SHARE
(1.73)
4.84
0.47
1.97
10.04
16.6
2.92
7.68
PRICE
EARNING
RATIO
(12.18)
4.9
8.87
8.53
4.4
5.6
15.13
7.73
DIVIDEND
YIELD RATIO
6.9%
3.7%
0.07
0.03
DIVIDENT
PAYOUT RATIO
32.8%
21.0%
0.45
0.34
BOOK VALUE
PER SHARE
3.52
3.56
3.335
3.532
107.4
167.5
38.085
58.19
Term Report 2014
IBF
P a g e | 58
Explanation of Comparative Ratio Analysis

Liquidity RATIOS
CURRENT RAIO:
For any company current ratio must be equal to 1 or

more than 1. In the case of GUL AHMED , KOHINOOR and NISHAT
current ratio is above 1 which means that current assets of all 3
companies are greater than their current liabilities and possess the
ability to cover its current liabilities with its current assets. Among
three , NISHAT has comparatively higher current ratio that is sign that
company possesses greater current assets that lead towards higher
liquidity. If comparing them yearly , Gul Ahmed has improved its
current ratio by 6% and Kohinoor by 9% and Nishat By 7% from 2012
to 2013. Gul Ahmed in 2012 was below industry average due to higher
current liabilities including taxes for provision but now it has average
industry average and has improved current assets level by greater
extent.
Taking into consideration KOHINOOR had the below industry
average in 2012 as well and has not improved considerably in 2013 as
ratio is 0.693 while industry average is 1.047. This indicates that it
own less current assets and higher current liabilities as compared to
NISHAT and GUL AHME while NISHAT in 2012 and 2013 both is
above industry average and comparatively among other two , it has
higher current assets to cover its current liabilities.
QUICK RATIO:
In quick ratio we just deduct inventories and prepaid

from current assets and then divide it by current liabilities that shows
extent of liquid assets to cover its current liabilities. Gul Ahmed
possesses strong current ratio and weak quick ratio as compared with
industry average taking into consideration inventory as potential
problem for Co. Same is the case with Kohinoor Co while Nishat owns
strong current ratio and strong quick ratio compared with industry
average which means that inventory holding is Nishat is less than
Term Report 2014
IBF
P a g e | 59
other two companies and is selling its inventory to greater extent in

both the years of 2012 and 2013.
: Working Capital is the amount of current assets
that is left after passing current liabilities. There it is derived by
subtracting current assets with current liabilities. Net working capital
of Gul Ahmed in 2012 was poorer than industry average putting into
fact higher current liabilities and less assets but it has improved
significantly in 2013 but if compared with industry average it is still far
from industry average while in case of Kohinoor its current liabilities
are much higher than current assets in both years of 2012 and 2013
and it has poorest ratio as compared with industry average whereas
net working capital of NISHAT Textiles Limited is stronger in both
years of 2012 and 2013 compared with industry average so NISHAT
has higher liquidity and less risk for current assets.
WORKING CAPITAL
Leverage ratios
Total debt ratio:
This is a ratio of total debt to total asset of the business.

This shows how much of the company is financed by debts and how
much is not. In the case of Gul ahmed, it is highly geared company
which means most of its assets are financed through debts, not equity.
However nishat and kohinoor are below industry average which
indicates that much of its assets are owned which means they are
financed through companys equity not debt. The ratios of nishat and
kohinoor are good, because the company have low amount of debt,
and is therefore exposed to less risk then gul ahmed.
Total debt to equity:
this compares a company's total liabilities to its

total share holders equity. This is a measurement of how much
suppliers, lenders, creditors and obligors have committed to the
company versus what the shareholders have committed. kohinoor is
below industry average but it is in stable position which means that
they are using less leverage and has stronger equity position. Nishat is
very much below than the industry average which indicates that it is
not taking advantage of the increased profits that financial leverage
may bring. On the other hand gul ahmeds ratio is above industry
average which means the company is being financed by creditors
Term Report 2014
IBF
P a g e | 60
rather than from its own financial sources which may be a dangerous
trend. Lenders and investors usually prefer low debt-to-equity ratios
because their interests are better protected in the event of a business
decline. Thus, there is a risk that because of high debt-to-equity ratios
gul ahmed may not be able to attract additional lending capital.
It tells the investors about the extent to which the
company is using its equity to support its operations and growth. Gul
ahmed is having ratios above industry average and its ratio is
increasing from 2012 to 2013 which indicates that the finance of
company mainly comes from debt which is quite risky and gul ahmed
may find it difficult to get more loans in future. however kohinoor is
having ratio above industry average in 2012 but its ratio fell in 2013
which shows that there is an increase in stock holders equity. Nishats
ratios are below industry average which indicate sthat the company is
not much involved in taking risks and it is using its equity for its
operations and growth purposes.
Total capitalization:
Interest coverage:
this ratio is used to determine how easily a company

can pay interest expenses on outstanding debt. Gul ahmed and
kohinoor both are below industry averages ut they are increasing from
year to year which is the positive signal for companys overall health.
In 2012 gul ahmeds ratio was so low that its ability to meet interest
expenses is questionable however this ratio increased in 2013 but it is
still not up to the mark. By contrast, nishat sustains its earnings well
above its interest requirements is in an excellent position to weather
possible financial storms.
EFFICIENCY RATIOS:
Average collection period:
Gul Ahmed in 2012 has same average

collection period as compared to industry average of 30 where it has
improved its collection period in 2013 which is 28 days as compared to
33 days. In addition to increasing its sales , Gul Ahmed has collected
receivables quickly by providing discounts etc whereas in case of
KOHINOOR Co , average collection period in 2012 was weaker as
Term Report 2014
IBF
P a g e | 61
compared with industry average but in 2013 it has improved its

collection period significantly . when comparing these both firms with
NISHAT textiles , it had strong receivable turnover in 2012 but in 2013
it has much weaker receivable turnover and its collection period has
risen to 43 days with industry average of 33 days due to flexible credit
policies .
Inventory turnover:
inventory turnover shows extent to which firm is

converting its inventory into sales . in Gul Ahmed , inventory turnover
has increased from 2012 to 2013 but compared with industry average
it lacks far behind as it is stocking higher inventory as compared to
inventory of other two giant firms whereas in case of KOHINOOR Co,
inventory turnover is stronger in both years of 2012 and 2013 as
compared with industry average so it is converting its inventory
quickly into sales while in case of NISHAT Textiles limited , is
inventory turnover is low compared with industry average .its
inventory stock out is low which leads to low sales of NISHAT Co.
Total Asset turnover of Gul Ahmed Co is stronger
with industry average so it has been utilizing efficiently its assets into
generating sales. In Gul Ahmed stores, spare tools and loose parts
have been utilized effectively from 2012 to 2013 leading to increase in
sales whereas in case of KOHINOOR , total asset turnover is low and
weaker compared with industry average so it has not been utilizing its
property , plant and equipment into generation of sales however ratio
has improved from 2012 to 2013. Same is case with NISHAT CO as it
is farer away from industry average and not making efficient look on
its total assets especially inventory and equipment into creation of
sales in the company.
Total Asset Turnover:
PAYABLE TURNOVER:
Payable turnover indicates extent to which the

firm makes payments to suppliers of the firm. Payable turnover ratio
of GUl AHMED TEXTILES LIMITED is lower than industry averages
as in 2012 it took 45 days to make payment to suppliers whereas in
Term Report 2014
IBF
P a g e | 62
2013 it takes 60 days to make payment to suppliers as compared with

industry average of 35 days in 2013. In case of KOHINOOR TEXTILES
LIMITED , payable turnover ratio was lower than industry average in
2012 as it took 40 days to make payment to suppliers while industry
average was 38 days however it increased its turnover ratio to 12.67
with payment period of 28 days making it stronger as compared with
industry average. Comparing these both firms with NISHAT
TEXTILES Co, payable turnover ratio was stronger compared with
industry average as in 2013 company took 32 days to make payment
while industry average stood at 38 days of payment period.
Profitability Ratio
Every firm is most concerned with its profitability. One of the most
frequently used tools of financial ratio analysis is profitability ratios
which are used to determine the company's bottom line and its return
to its investors. Profitability ratios show a company's overall efficiency
and performance. Here we will discuss about the profitability ratio
analysis of Gul Ahmed, Nishat and Kohinoor Textile Mills with the
average ratio of industry.
Net Profit Margin
When doing a simple profitability ratio analysis, net profit margin is
the most often margin ratio used. The net profit margin shows how
much of each sales dollar shows up as net income after all expenses
are paid. By calculating our ratios, Nishat is on top with 0.11 in 2013
and 0.07 in 2012. Then Kohinoor on second with 0.034 in 2013 and
Gul Ahmed on third with 0.0232 in 2013. If we compare these ratios
with the Average Industry ratios of 2013 i.e. 0.821 we can say that
overall Nishat in on top at .11 whereas the other companies are also
progressing with average ratios per year.
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Gross Profit Margin

The gross profit margin looks at cost of goods sold as a percentage of
sales. These ratios look at how well a company controls the cost of
its inventory and the manufacturing of its products and subsequently
pass on the costs to its customers. The larger the gross profit margin,
the better for the company. Currently Nishat is on lead with 17 percent
in 2013 where as Gul Ahmed is on second with 15.56 ratio and
Kohinoor on third with 15 percent in 2013. If we compare these ratios
with the industry ratio it has 5.3 in 2013. We can say that Nishat has
quite good progress in Gross Profit Margin comparing to industry. We
can say that these ratios are quite considerable.
Returns Ratios
Return on Assets (also called Return on Investment)

The Return on Assets ratio is an important profitability ratio because
it measures the efficiency with which the company is managing its
investment in assets and using them to generate profit. It measures
the amount of profit earned relative to the firm's level of investment in
total assets. The return on assets ratio is related to the asset
management category of financial ratios. If we talk about the ROA
ratio currently Nishat is on top with 0.07 or 7%. Then Gul Ahmed on
second and Kohinoor on third. Comparing these ratios with the
average industry ratios, are good
Return on Equity
The Return on Equity ratio is perhaps the most important of all the
financial ratios to investors in the company. It measures the return on
the money the investors have put into the company. This is the ratio
potential investors look at when deciding whether or not to invest in
the company. Currently Gul Ahmed is at top with 12.93 in 2013 then
Nishat on second with 10% and Kohinoor on third with 5.6% in 2013.
Comparing these ratios with the industry average we can say that
industry is also normal in the year 2013. In general, the higher the
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percentage, the better, with some exceptions, as it shows that the

company is doing a good job using the investors' money.
EQUITY RATIOS
EPS tells you how well a company is generating profit

for its shareholders. Gul ahmed Is having negative EPS in 2012 which
means that it is losing money. kohinoor and gul ahmed are below
industry average which indicates that they need to work out on their
earnings in order to attract investors and retain the curent stock
holders. On the other hand nishat is having a really favorable EPS
which indicates that it is generating more profit for its share holders.
Earning per share:
Price to earning ratio:
The P/E ratio tells how much the market is willing

to pay for a companys earnings. Kohinoor is showing a higher P/E
ratio which indicates that the market is more willing to pay for the
earnings of the company and the market has high hopes for the future
of the share and therefore it has bid up the price. On the other hand,
gul ahmed and nishat are having a lower price to earnings ratio
indicates the market does not have much confidence in the future of
the share and people are not willing to pay. Gul ahmed is having
negative price earning ratio on 2012 which shows that it is losing
money per share of its stock.
Book value per share:
the purpose of calculating book value per share is

to relate shareholder's equity to the number of shares of common
stock outstanding. Since the number of shares of preferred stock are
not considered, this gives a more "real" value to the common shares
outstanding. Nishat is currently having very high book value and on
the other hand kohinoor and gul ahmed are much behind. However
book value alone cannot provide the proper picture of the situation.
Dividend yield and dividend payout: Gul ahmed and kohinoor are not
giving any dividends to their stock holders in concerned years however
Nishat is giving a satisfactory rate of dividend to its stake holders.
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References:
http://www.kse.com.pk/
http://www.nishatmillsltd.com/
http://www.gulahmed.com/
http://www.kohinoormills.com/
We also referred:
IBF Handouts and Notes given by our respective teacher

Books (Our text, essential and reference books)
Website (Such as Wikipedia and Google)
Personal Visit at Karachi Stock Exchange (KSE) for Annual
Report Collection
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APPENDEX
A:
Gul Ahmed
1. Profit and Loss Account
2. Balance Sheet
B:
Nishat
2. Balance Sheet
C:
Kohinoor
2. Balance Sheet
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Appendix A-1
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Appendix A-2
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Appendix A-2
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Appendix B-1
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Appendix B-2
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A
ppendix B-2
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Appendix C-1
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Appendix C-2
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Appendix C-2
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CONTRIBUTION STATEMENT
NAME
CONTRIBUTION
Gul Ahmed Textiles
Liquidity Ratios
Efficiency Ratios
Nishat Textile Mills
Leverage Ratios
Equity Ratios
Kohinoor Textile Mills
Profitablity Ratios
Analysis
Wikash Kumar
Rauha Rafiq
Nauman Ali Khowaja
Term Report 2014
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Financial Ratio

Introduction to Business Finance

Term Report 2014

Financial Ratio Analysis

Term Report 2014

Financial Ratio Analysis

Term Report 2014

Financial Ratio Analysis

Report prepared by:

Nauman Ali Khowaja

Term Report 2014

Financial Ratio Analysis

Ms. Najeha A. Bela

April 29, 2014

Institute of Business Management,

Dear Ms. Najeha,

Nauman Ali Khowaja

Term Report 2014

Financial Ratio Analysis

Term Report 2014

Financial Ratio Analysis

INTRODUCTION OF THE INDUSTRY

Term Report 2014

Financial Ratio Analysis

Problems faced by textile sector in Pakistan:

2013 outlook for the textile industry of Pakistan

Term Report 2014

Financial Ratio Analysis

GUL AHMED TEXTILE MILLS LTD

Industry overview and performance:

Term Report 2014

Financial Ratio Analysis

Common Size Income Statement

Other operating expenses

Profit/(loss) after taxation

Earnings/(loss) per share - basic

Profit/(loss) before taxation

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Financial Ratio Analysis

Term Report 2014

Financial Ratio Analysis

Property, plant and equipment

Long term investment

Long term loans and advances

Long term deposits

Tax refunds due from

Cash and bank balances

Term Report 2014

Financial Ratio Analysis

EQUITY AND LIABILITIES

Trade and other payables

Current maturity of long term

Provision for taxation - net of

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Financial Ratio Analysis

Term Report 2014

Financial Ratio Analysis

FINANCIAL RATIO ANALYSIS OF GUL AHMED

Loans and advances

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Loans and advances

Financial Ratio Analysis

Total debt to total asset =

Total debt to total asset =