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PROJECT PROPOSAL
for Profitably Ratios Analysis of Alla Wasaya Nishat Textile Mills Kohinoor Textile Mills Limited And

Gul Ahmed Textile Mills Limited Submitted by FALAK SHER Student ID: mc090404884

Virtual University of Pakistan

Virtual University Of Pakistan April 15May, 2011

TABLE OF CONTENT
Here you are required to provide proper table of content of your proposal along with page numbers

CHAPTER 1 1.1 INTRODUCTION OF THE PROJECT: 1.2 BACKGROUND: 1.3 OBJECTIVES:1.4 SIGNIFICANCE CHAPTER 2 : PROJECT PROCEEDINGS: CHAPTER 3: METHODOLGY 3.1 DATA COLLECTION SOURCE 3.2 DATA PROCESSING & ANALYSIS BIBLIOGRAPHY CHAPTER 1 1.1 INTRODUCTION OF THE PROJECT: 1.2 BACKGROUND: 1.3 OBJECTIVES:1.4 SIGNIFICANCE CHAPTER 2 : PROJECT PROCEEDINGS:

4 4 4 5 6 6 7 7 7 8

CHAPTER 3: METHODOLGY

3.2 DATA COLLECTION TOOLS 3.3 DATA PROCESSING & ANALYSIS 3.1 DATA COLLECTION SOURCE
:

CHAPTER 1: 1.1 INTRODUCTION OF THE PROJECT: J.A Textile Mills Ltd. textiles lmits, A Public Limited Company which started commercial production in April, 1992. The mills is equipped with technologically advanced, ultramodern spinning plant of 21,804 spindles and ancillaries from World famous suppliers, where we manufacture 100% Cotton Yarn ( Carded / Combed ). This site provides information to the share holders about the financial status of the company. You can see up-dated information about yearly, half yearly and quarterly account. AllaWasaya Textiles is one of the most oldest textile unit in Pakistan, established in 1954. Its head office is situated in Multan. The mission of textile & Finishing Limited is to contribute positively to the Socio-Economic groth of Pakistan through business and industrial pursiots endeaving to achieve excellenece in all spheres of such activity with effective and efficient management. The best way to know the performance of any company companies is to analyze its profits. In the current scenario of the business new investor want to analyze whether the company is beneficial for the investment or not and what is the growth chances in percentage and in simple words. The project is about the profitability ratios analysis of a well known company Nishat Mills Pvt. Ltd. This will include the profits of the company for last three financial years and write analyze it with ratios so that the financial growth or drop can be analyze.

1.2 BACKGROUND: The textile sector Nishat Mills Limited was established in 1951. It has a production facility of 270,000 spindles, 740 looms, and a dyeing & printing capacity of 7 million meters (7.65 million yards), Nishat Mills Limited is the largest composite textile set up in Pakistan. The project is about profitability ratios of the above said firm. One of the most frequenty used critaria of financial ratio analysis is profitability ratios that are used to findout the company's end resluts. Profitability measures are essentials to company managers and owners too. If a small business has outside investors who have put their own money into the company, the primary owner certainly has to show profitability to those equity investors. The textile sector Nishat Mills Limited was established in 1951. It has a production facility of 270,000 spindles, 740 looms, and a dyeing & printing capacity of 7 million meters (7.65 million yards), Nishat Mills Limited is the largest composite textile set up in Pakistan. The project is about profitability ratios of the above said firm. One of the most frequenty used critaria of financial ratio analysis is profitability ratios that are used to findout the company's end resluts. Profitability measures are essentials to company managers and owners too. If a small business has outside investors who have put their own money into the company, the primary owner certainly has to show profitability to those equity investors.The Gul hmad started trading in textiles in the early

7 1900s. With all its know-how and experience, the group decided to enter the field of manufacturing and Gul Ahmed Textile Mills Ltd. was incorporated as a private limited company, in the year 1953. In 1972 it was subsequently listed on the Karachi Stock Exchange. Since then the company has been making rapid progress and is one of the best composite textile houses in the world. The mill is presently a composite unit with an installed capacity of 130,296 spindles, 223 wide width air jet looms, and a state of the art processing and finishing unit
Kohinoor Textile Mills Limited 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.

1.3 OBJECTIVES:We I will carry out this Project to know the profitability of the selected companies. This Project by analyzing:Profit Earning Capacity The project will analyze the ability of selected companies to earn profit over a period of time and make a comparison between these companies to know which of these are better in making profit for a period of time. Resource Management

We I will try to analyze the selected companies efficiency in managing their resource for earning profit i.e. Human Resource, Market Resources and Financial Resource etc. Reasons of Profitability We I will carry through this project to find out the reasons for generating profit over the years for selected companies and there capabilities of generating it for the future and how they are managing their expenses to be profitable And If in any year, any of the three selected companies is facing loss, then to Reasons of Loss We I will try to analyze the selected companies the reasons of loss and try to figure out the all the aspects of that by previous and present data of the company.

1.4 SIGNIFICANCE This study will help the:Investor/Shareholder


The basic aim of any investment is to earn a profit large enough to justify investments that have been made. So we I say a company has competitive advantage when its profitability the return on the capital invested in the enterprise is greater than the average profitability for all firms in its industry. This analysis will help the investors/shareholder of the companies to know the competitive advantage of their company to others

Suppliers

The study will improve the financial facts of the firms. The process of the analysis profitability ratios of well known textile companies is very important for the suppliers. Suppliers are keen to know that their landing to the firm is beneficial for them or not? The project is relevant to suppliers. Lenders This study will provide the profitability analysis of the three major textile groups and this would be very useful for the lenders as they always need to know that to whom the are lending whether they are making profit or not and it is also very helpful to set future lending limits or expansion for a particular company CHAPTER 2 : PROJECT PROCEEDINGS:

2.1 PROFITABILITY RATIOS Profitability ratios measure the earning ability of a firm these include: Net Profit Margin Return on Assets DuPont Return on Assets Operating Income Margin Operating Assets Turnover Return on Operating Assets Sales to Fixed Assets Return on Total Equity Gross Profit Margin

2.2 TREND ANALYSIS

10 Trend analysis studies the financial history of a firm for comparison. It is the comparative analysis of a company's financial ratios over time. This helps to detect problems or observe good management. Ratios are plotted on graph to see whether the ratios are falling, rising, or remaining relatively constant. Companies Analyze Nishat Textile Mills Kohinoor Textile Mills Limited Gul Ahmed Textile Mills Limited

Profitability Ratios
Profitability ratios measure the earning ability of a firm. These include:

Gross Profit Ratio Net Profit Ratio Expenses Ratio Return on Assets Operating Income Margin Operating Assets Turnover Return on Operating Assets Sales to Fixed Assets Return on Investment (ROI)

11 Return on Total Equity Gross Profit Margin

Trend Analysis of these banks Summary Conclusion Recommendations & Limitations:

2.3 INTERPRETATIONS Interpretations regarding ratios will be given in final project . 2.4 CONCLUSION Conclusion will be drawn according to the analysis 2.5 RECOMMENDATION Recommendation in the light of conclusion will be made in the final project

CHAPTER 3: METHODOLGY 3.1 DATA COLLECTION SOURCE Data shall be obtained from various published financial reports, articles, magazines etc. The financial data of the companies can be obtainobtained from its website i.ewebsite i.e. www.nishatmillsltd.com http://www.kmlg.com/kmlg/financialreport.php?fid=4 http://www.gulahmed.com/html/sec_1024/annual.php www.nishatmillsltd.com.

12 www.allawasaya.com http://www.jatml.com/ Past and present fincilfinancial data is available on these websites

3.3 2 DATA PROCESSING & ANALYSIS For data processing, analysis and interpretation, throughout the project, will be use financial calculation, charts, tabulation etc. For this functions, the software package Microsoft office 2003 (Word, Excel) will be used for compute the different ratios and analysis.

Bibliography

Websites www.google.com www.nishatmillsltd.com www.kmlg.com www.gulahmed.com www.wikipedia.com Books Wood, Frank & Sangster, Alan(Ninth Edition) Business Accounting 1 Swami, Grue (8th Edition). Financial Services Ghani,M.A Advanced Accounting

13 Handouts of Financial statement analysis (VU) FIN -621 Sohail afazal and M.Arif Advance Accounting