Ratio Analysis.

The Textile
industry in
Pakistan is
the
largest manufacturing
industry in Pakistan.
It
has
traditionally, after agriculture, been the only industry that has generated huge employment for both
skilled and unskilled labor. The textile industry continues to be the second largest employment
generating sector in Pakistan. Pakistan is the 8th largest exporter of textile products in Asia. This
sector contributes 8.5% to the GDP and provides employment to about 15 million people or roughly
30% of the 49 million workforce of the country. Pakistan is the 4th largest producer of cotton with the
third largest spinning capacity in Asia after China and India, and contributes 5% to the global
spinning capacity.[1] At present, there are 1,221 ginning units, 442 spinning units, 124 large spinning
units and 425 small units which produce product of textile
The Textile Industry is dominated by Punjab. 3% of United States imports regarding clothing and
other form of textiles is covered by Pakistan. [2] Textile exports in 1999 were $5.2 billion and rose to
become $10.5 billion by 2007. Textile exports managed to increase at a very decent growth of 16%
in 2006. In the period July 2007 June 2008, textile exports were US$10.62 billion. Textile exports
share in total export of Pakistan has declined from 67% in 1997 to 55% in 2008, as exports of other
textile sectors grew.[citation needed] The major reason of decline of textile export of Pakistan is the Govt
unhealthy policies. Sui Northern Gas Pipelines Ltd. (SNGPL) notified the textile mills to reduce the
supply of gas for five months. Head of All Pakistan Textile Mills Association of Enterprises Anis-ulHaq has expressed concern about the decision: "Now is the time to the textile industry out of a threeyear downturn. The demand for textile products is growing, and if we are not able to fulfill our current
orders, we will lose international buyers. "Monthly loss the textile industry because of interruptions in
gas supply could reach about U.S. $1 billion, or 4 $5 billion for the fiscal year ending June 20 next
year The archaeological surveys and studies have found that the people of Harappan
civilization knew weaving and the spinning of cotton four thousand years ago. Pakistan Exports to:
China is Cotton: $1.9 billion USA is other textiles, worn clothing: $1.3 billion Germany are other
textiles, worn clothing: $236.1 million, Clothing (not knit or crochet): $210.2 million France are other
textiles, worn clothing: $123.9 million, clothing (not knit or crochet): $80.3 million UK are Other
textiles, worn clothing: $473.2 million, Knit or crochet clothing: $301.3 million, Clothing (not knit or
crochet): $247.6 million, Cotton: $96.1 million Other countries like Itlay, Russia, Spain, Brazil,
Canada, India, Mexico, Australia, South Korea and Netherland. Among these Chine is the second
largest buyer of Pakistani textiles.Nowadays textile sector of Pakistan is facing industrial crises due
to worldwide policies and govt policies as well the export of three quarter of current year 2016
reduces ud$:831 million and 8.15% from last year, only finished goods export increases with 4.20%
and towel export rose up with minor change of .20% of total export. otherwise all other sector
including cotton, spinning, weaving and knitting sector are going downward from previous year. The
major problem of this declining is the huge reduction of cotton production in the current year due to
crop disease. The production of last year was 14.86 million bales which are reducing this year and
reached at 11.7 million bales.But Know govt in involve to reforms the industry and looking forward
the sowing position of cotton.
Financial statement and ratio analysis:

Financial ratios are a popular way for users of financial statements to
develop insights into the financial performance of companies. By controlling
for the effect of firm size on the level of performance, ratios enable financial
statement users to examine how a firm has performed relative to its peers
and relative to its own historical performance. A firms ratios can differ from
its peers or its own historical performance because it has selected a different
product market strategy, because its management team has become more
effective at implementing its strategy, or because it has selected a different
financial strategy. Sometimes firms can appear to perform differently
because they have selected different accounting methods for reporting the
same underlying economic events. For this reason, a pioneer to effective
financial ratio analysis is the development of a clear understanding of how a
firms accounting decisions compare with those of its competitors,or with its
own
decisions
in
prior
years.
In assessing the significance of various financial data, managers often
engage
in
ratio analysis, the process of determining and evaluating financial ratios. A
financial ratio is a relationship that indicates something about a company's
activities, such as the ratio between the company's current assets and
current
liabilities or between its accounts receivable and its annual sales. The basic
source for these ratios is the company's financial statements that contain
figures.
Industrial average ratio :

Current
ratio
Textile
1.50
industry
.
Quick
ratio
Debt
quity
0.62
1.48
to Sales to Profit
inventory margin
6.05
1.64
Log of asset:
Gul Ahmed textile
7.396954728
NISHAT textile
8.004922949
LOG OF SALE:
GUL
AHMED NISHAT TEXTILE
TEXTILE
7.523158133
7.70907972
Gul Ahmed textile industry

History:
FOUNDER :: Haji Ali Mohammad
HEAD- QUARTERS :: Karachi Pakistan
PRODUCT :: Fabrics , Bedding Yarn ,
Apparel , Accessories
REVENUE :: US$ 300 Million (2011)
EMPLOYEES :: 7000
DIVISIONS :: IDEAS by GUL AHMED
SITE :: www.gulahmed.com
The Gul Ahmed Group began trading in textiles in the early
20th century.
In 1953, entered the field of manufacturing under the

name Gul Ahmed Textile Mills Limited, and was
incorporated as a privately limited company.
In 1972, listed on the Karachi Stock Exchange. Since
then, the company has made rapid progress and is currently
one of the leading composite textile houses in the world.
Incorporated in 1953 in Pakistan as a private limited
company,
Converted into public limited company in 1955
Listed on Karachi and Lahore Stock Exchanges in 1970 and
1971 respectively. The Companys registered office is situated at
Plot No. 82, Main National Highway, Landhi, Ka
{GUL Ahmed
limited}
textile
mills
Profitability ratio
1: Net profit margin
Net income
items/net sales
2015
2014
1.8
3.74
before
interest
2013
2.35
and
2012
(0.96)
non-controlling
2011
4.70
NET PROFIT MARGIN

Series 1
4.7
3.74
2.35
2011
-0.96
2012
2013
1.8
2014
2015
Total asset turnover:

Net sales/avg total asset
2015
3.46
2014
3.83
2013
4.08
2012
3.53
2011
3.84
Series 1
Series 1
4.08
3.84
3.83
3.53
2011
2012
3.46
2013
2014
2015
Return on asset:
2015
6.28
Net income /avg total asset

2014
2013
2012
2011
14.35
9.60
(3.40)
18.07
Series 1
18.7
14.35
9.6
6.28
2011
-3.4
2012
2013
2014
2015
Operating income margin:

2015
6.34
Operating income/net sales

2014
2013
2012
8.05
7.00
5.51
2011
10.35
Series 1
10.35
7
8.05
6.34
5.51
2011
2012
2013
2014
2015
Operating asset turnover:

Net sales/avg operating asset
2015
3.40
2014
3.62
2013
4.32
2012
3.70
2011
3.59
Chart Title
Series 3
4.32
3.59
2011
3.7
2012
3.62
2013
2014
3.4
2015
Gross profit margin:

2015
18
Gross profit/net sales

2014
2013
2012
18
15
13.9
2011
18.19
Chart Title
Series 3
18.1
18
13.9
2011
2012
18
15
2013
2014
2015
Return on total equity:

Net income/avg total equity
2015
2014
2013
4.37
10.21
7.18
2012
(2.62)
2011
14.39
12
10
8
10.21
6
4
4.37
4.3
2
0
Category 1
Category 2
-2.61
Category 3
Category 4
-2
-4
Column1
Return on asset
Net income/avg total asset
2015
6.28
2014
14.35
2013
9.60
2012
(3.40)
2011
18.07
Chart Title
Column1
18.07
14.35
9.6
6.28
2011
-3.4
2012
2013
2014
2015
Sales to fixed asset

Net sales/avg net fixed asset
2015
2014
2013
2012
3.86
4.30
4.33
3.69
2011
3.97
Return on common equity:

Net income/avg common equity
2015
2014
2013
2012
2011
3.86
4.30
4.33
3.69
3.97
Chart Title
Series 3
4.33
4.3
3.97
3.86
3.69
2011
2012
2013
Interpretation
2014
2015
of
ratio
GP ratio increased to 18.27% in FY 2015 as compared to 16.12% in FY

2010, indicating achievement of manufacturing efficiencies. Net profit
to
sales
ratio and EBITDA margin to sales have decreased by 25.22% and
22.19% over six years due to increase in cost of doing business and
investments
on
distribution infrastructure of the Company. EBITDA margin to sales and
return on equity have gone down in FY 2015. This is discussed in detail
within
the Directors Report.
Liquidity ratio
Current ratio:
Current asset/current lability
2015
2014
2013
2012
1.05
1.06
1.05
0.99
2011
1.03
Chart Title
Column1
1.05
1.06
1.05
1.03
0.99
2011
2012
2013
2014
2015
Quick ratio:
Current
liability
asset-inventory/
2015
0.25
2013
0.27
2014
0.20
2012
0.23
current
2011
0.19
Chart Title
Column2
27
23
20
19
0.25
2011
2012
2013
2014
2015
Cash to current liability:

Cash equiliets+mkt seq/ current liability
2015
2014
2013
2012
2011
13
9
20
20
16
Chart Title
Column1
Column2
2
25
20
20
16
9
2011
2012
2013
2014
2015
Sales to working capital:

Sales/avg working capital
(time)
2015
44.09
2014
37.08
2013
45.34
2012
-256.2
Liquidity
2011
60.2
Ratios:
Efficient fund management has resulted in the improvement of

the current ratio from 0.97 in FY 2010 to 1.05 in FY 2015.
ACTIVITY RATIO FOR

TEXTILE MILLS LIMITED
Annual report 2011
GULAHMED
Days sale in receivable=Gross receivable/net sale

per day
=1923045000/69684931
=27.59 Days
A/R turnover=Net sale/average gross receivable
=25435465/961522
=2.63 Time
A/R turnover in days=average gross receivable/net sale
per day
=961522/69686
=13.79 Days
Days sale in inventory=ending inventory/cost of goods
sold per day
=6216882/57010
=109.04 Days
Inventory turnover=cost of goods sold/average
inventory
=20808843/7650309
=2.72 Time
Inventory turnover in days=avrg inventory/CGS per day
=7650309/57010
=134 Days
0perating cycle=A/R turnover in days+ inventory
turnover over in days
=13.79+134
=147 Days
Annual report 2012

per day
=1730756000/68668493
=25.20 Days
=25063294/865378
=28 Time
per day
=865378/68666
=12.6 Days
sold per day
=4945923/58959
=83.88 Days
inventory
=21520222/8902809
=2.41 Time
=8902809/58959
=151 Days
=12.16+151
=163 Days
Annual report 20113

per day
=2573268/82856
=31 Days
=30242719/1286634
=23 Time
Anover in days=average gross receivable/net sale per
day
=1286634/82856
=15.52 Days
sold per day
=2457304/69840
=35.18 Days
inventory
=22451882/7483960
=3 Time
=7483960/69840
=107 Days
=15
=122 Days
Annual report 2014

Days sale in receivable=Gross receivable/net sale per day
=4687518/90445
=51.82 Days
=33012724/2343759
=14.08 Times
per day
=2343759/90445
=25.91 Days
sold per day
=8658343/74073
=116 Days
inventory
=27036675/10728839
=2.52 Times
=10728839/74073
=144.84 days
=25.91+144.84
=170.75 Days
Annual report 2015

=3678668/91382
=40 Days
=33354784/1839334
=18.13 Times
per day
=1839334/91382
=20.12 days
sold per day
=8970687/74686
=120 Days
inventory
=27260395/11600168
=2.35 Time
=11600168/74686
=155 .31 Days
=20.12+155.31
=175.43 Days
Activity ratio interpretation

Inventory turnover days have increased by 7.16% from last year
due to high anticipated demand. Debtors turnover in days shows
decreasing
trend
over the past six years showing better recovery performance.
Creditors turnover in days has increased is in line with the

Companys
fund
management
policy.
Fixed asset turnover ratio has shown an improvement. It has
increased from 3.21 in FY 2010 to 3.69 in FY 2015 depicting the
effective
use
of
fixed
assets to generate sales.
Market ratio
Gul Ahmed Textile Mills limited;
Market
Ratio
F.L=
EBIT/EBT
2015
2014
2013
2012
2011
2117616000
/783327000
= 2.7 Times
604943000/
228522772
= 2.647
2658827000/
1495977000
= 1.77 Times
123500000/1
82818218
= 6.75
2068648000
/841128000
= 2.45 Times
702078000
/152348515
= 4.60
1374046000
/(1417000)
=
(240364000)
/126957079
= (1.89)
2635435000/
1537454000
= 1.72 Times
1196457000/
634785000
= 1.88
%
R/E
ratio=
R.E/N.I
Dividend
P/O ratio =
Div/N.I
261943000/
604943000
= 0.43
343000000/
604943000
= 56.60 %
1154000000/
1235000000
= 0.934
81000000/
1235000000
= 6.56 %
702078000/
702078000
=1
0/
702078000
=0%
0/
(240364000)
=0%
1196457000/
1196457000
=1
0/
1196457000
=0%
Dividend
yield
=
dividend
per share/
Mkt
price
per share
1.50/49.05
= 0.03
1.50/64.01
= 0.02
0/23.74
=0
0/21.11
=0
0/51.73
=0
Book value
per share =
T.S.H.E-p.s
Equity/# of
share c.s
7169472000
-0/
228522772
=31.37 RS.
66599030000/ 182818218
=36.42 RS.
5616834000
-0/
152348515
=36.86 RS.
4472509000
-0/
126957096
=35.22 RS.
47128730000/ 634785000
=74.24 RS.
EPS=
N.I/ # of c.s
outstandin
g
-1
Interpretation of market ratio:

The Company posted earnings per share of Rs. 2.65 per share in
FY 2015 as compared to Rs. 2.22 per share in FY 2010. Price
earning
ratio
increased
to 18.53 times in FY 2015 from 8.34 times in FY 2010 as a result
of increase in market price to Rs. 49.05 per share at the end of
current
year
from
Rs. 18.53 per share at the end of FY 2010.
Nishat textile mills

limited
History:
Nishat Group is one of the leading and most diversified
business groups in South East Asia with fixed/ current assets of
over Rs.300 billion (US$ 5 billion), it ranks amongst the top five
business houses of Pakistan. The group has strong presence in
three most important business sectors of the region namely
Textiles, Cement and Financial Services. In addition, the Group
also has reasonable market share in Insurance (Adamjee and
Security
General),
Power
Generation,
Paper
products ( Nishat Shoaiba Paper
Mills)
and
Aviation
( Phonix Aviation). It also has the distinction of being one of
the largest players in each sector. The Group has a remarkable
position in the market as good as any multinationals operating
locally in terms of its quality of products, services and
management skills. Nishat Mills Limited, the flagship company
of the group was established in 1951. Its annual turnover for
the year is over Rs.17 billion (US$ 283 million). NML with the
production facility of 270,000 spindles, 740 looms and dyeing &
printing capacity of 7 million meters (7.65 million yards)

makes Nishat the largest composite textile set up in Pakistan.
(profitability ratio)
Net profit margin
Profit after tax/net sales
2015
2014
2013
2012
7.64
10.12
11.15
7.85
2011
9.97
Chart Title
Column1
11.15
9.97
10.12
7.85
2011
2012
7.64
2013
2014
2015
Interpretation:
Net profit margin ratio decreased to 7.64 in 2015 as compare to
9.97 in 2011. It show ratio decreases by 2.33. that shows the
decrease co. profit.
Total asset turnover

Netsales/avg total asset
2015
2014
2013
2012
0.51
0.61
0.76
0.811
Interpretation:
2011
0.96
Total asset turnover is 0.51 in 2015 where is this ratio is 0.96 in

2011. There is fluctuation in each year. Due to decrease in sales.
Return on asset
Net income/avg total asset
2015
2014
2013
2012
4.0
6.20
8.5
6.37
2011
1.040
Chart Title
Column1
8.5
6.37
6.2
4
1.04
2011
2012
2013
2014
2015
Interpretation:
Return on operating asset
Net sales/avg operating asset
2015
2014
2013
2012
2011
1.04
1.04
1.21
1.29
1.48
Chart Title
Column2
1.48
2011
1.29
2012
1.21
2013
1.04
2014
Sales to fixed asset

Net sales/avg net fixed asset
2015
2014
2013
2012
2.16
2.82
3.5
3.25
1.04
2015
2011
3.86
Chart Title
Column1
3.86
3.25
3.5
2.82
2.16
2011
2012
2013
2014
2015
Return on asset
Net income/ avg total asset
2015
2014
2013
2012
2011
4.0
6.20
8.5
6.3
9.6
Chart Title
Column1
8.5
6.3
6.2
4.3
2011
2012
2013
2014
return on total equity

net income/ avg total quity
2015
2014
2013
2012
5.5
8.64
12.09
9.64
2015
2011
14.50
Chart Title
Column1
12.09
9.64
8.64
5.5
2011
2012
2013
2014
2015
Return on common equity:

Net income before non
common equity
2015
2014
2013
2012
1.5
2.14
2.27
1.3
contr/
avg
2011
1.88
Chart Title
Column1
2.14
2.27
1.88
1.5
1.3
2011
2012
2013
2014
2015
Gross profit margin:

Gross profit/ net sales
2015
11.77
2014
14.44
itability
of
financial
year
profitability
of
2014. Profitabili
2013
17.25
2012
15.11
2011
16.15
the
Company
has
decreased
during
ended
30
June
2015
as
compared
to
corresponding
last
year
ended
30
the
the
June
Liquidity ratio
Current ratio:
2015
2014
1.26
1.33
2013
1.49
2012
1.3
2011
1.20
Chart Title
Column1
1.3
1.2
2011
2012
1.49
2013
1.33
2014
1.26
2015
Quick ratio:
2015
0.65
2014
0.70
Cash to liability:
2015
2014
_
0.27
2013
0.81
2012
0.6
2011
0.5
2013
0.41
2012
0.4
2011
0.23
Sales to networking capital:

2015
8.35
2014
2013
2012
2011
7.5
5.9
9.5
15.56
Chart Title
Column1
Series 3
15.56
9.5
5.9
2011
2012
2013
7.5
2014
8.35
2015
Chart Title
Column1
16.15
2011
15.11
2012
17.25
2013
14.44
2014
11.77
2015
ACTIVITY RATIO FOR NISHAT MILLS

LIMITED
Activity ratio (Asset management ratios) is helpful in
quantifying the time taken by a firm to convert its noncash assets into cash assets.
For year ended June 30, 2011
=3489070/133055
=26.57 Days
=48565144/1744535
=27.14 Time
per day
=1744535/133055
=13.11 Days
sold per day
=2623460/111558
=23.51 Days
Inventory turnover=cost of goods sold/average inventory
=40718697/7952870
=5.12 Times
=7952870/111558
=71.28 Days
=9.23+71.28
=80 days
For year ended June 30, 2012

per day
=3489070000/44924101000/365
=28.34 DAYS
A/R
turnover=Net
sale/average
gross
receivable
=44924101000/1744535000
=25.75 Time
A/R turnover in days=average gross receivable/net
sale per day
=1744535000/123079728.7
=14.17 Days

sold per day
=9695133/104479.20
=92.79 Days
inventory
=38134910/9879510.36
=3.86 Times
=9879510.36/104479.2
=94.55days
=14+46.39=61 Days
Annual report 2014

=2764813/176559
=15.65 Days
=64444091/1382406
=46.61
per day
=1382406/176559
=7.82
sold per day
=2907268/155014
Inventory
inventory
=18.75 Days
turnover=cost of
goods
sold/average
=56580317/14397027
=3.93 Time
=14397027/155014
=92.87 Days
=7.82+92.87
=100 Days
Annual report 2015

per day
=5943968/140212
=21.49 Days
=51177577/2971984
=17.22 Time
per day
=2971984/140212
=21.91 Days
sold per day
=10350193/123708.29
=83.67 days

inventory
=45153529/11548217
=3.91 time
=11548217/123708.29
=93.35 Days
=21.91+93.35
=115.26
Market
limited
ratio
by
nishat
mills
Leverage Ratio= EBIT/ Earning before tax

Year 2015 (PRs. in Thousands)
EBIT= 6,134,698
Earning before tax= 4,389,925

Leverage Ratio= 6,134,698/ 4,389,925
= 1.39
Earnings per share =Earnings available for common stock/ #of
common stock outstanding
= 3911925000 / 351,599,848
= 11.3%
% of retained earnings= Net income Dividends/ Net income
= 3911925000-1582199316/3911925000
=59.55%
Dividend payout Ratio= Dividend/ Net income
= 1400449/ 3911925
= 40.44%
Dividend Yield = Dividend per share/ Market price per share
= 4.50/114.23
= 3.99%
Book value per share = Total stockholders equity/ # of common
stock outstanding
= 76,142,823,000/ 351,599,848
= 216.56
Price earnings Ratio = Market price per share/ EPS
= 114.23/11.3
=10.10%
EBIT= 7,585,434
Profit before tax = 5,975,552
=7,585,434/5,975,552
= 1.26.%
= 5,512,552,000/ 351,599,848
=15.68
=5,512,552,000-1406399392/5512552000
=74.48%
= 1406399392/5512552000
= 25.51%
= 4.00/ 111.92
= 3.57%
stock outstanding
= 68,589,176,000/ 351,599,848
= Rs. 195.07
= 111.92/ 15.68
= 7.13
EBIT= 5,842,110
Profit after tax = 3,528,567
= 5,842,110/ 3,528,567
= 1.6%
= 3,528,567,000/ 351,599,848
= 10.03
= 3,528,567,000- 1230599468/
3,528,567,000
=65.12%
= 1230599468/ 3,528,567,000
=34.87%
= 3.5/47.58
= 7.35%
stock outstanding
= 37,762,749,000/ 351,599,848
= 107.40
= 47.58/ 10.03
= 4.74
EBIT= 7,012,960
Profit before tax= 4,843,912
= 7,012,960/ 4,843,912
= 1.4%
= 4,843,912,000 / 351,599,848
= 13.77
= 4,843,912,000 1160279498/
4,843,912,000
= 76.04
= 23.95%
= 3.30/ 50.34
= 6.55
stock outstanding
= 35,393,959,000/ 351,599,848
= 100.66
= 50.34/13.77
=3.65
Trend analysis:
Horizontal analysis (also known as trend analysis) is a financial

statement analysis technique that shows changes in the amounts
of corresponding financial statement items over a period of time.
It is a useful tool to evaluate the trend situations.
The statements for two or more periods are used in horizontal
analysis. The earliest period is usually used as the base period
and the items on the statements for all later periods are
compared with items on the statements of the base period. The
changes are generally shown both in dollars and percentage.
Dollar and percentage changes are computed by using the
following formulas:
Horizontal analysis of Gul AHMED TEXTILE :
BALANCE SHEET
2015
2014
change
%
total equity
716947 665990 7.65129
2
3
8
total
non 280202 261167 7.28843
current liablity
2
2
4
total
current 149718 150056 liability
53
32
0.22511
total equity and 249433 242772 2.74389
liablity
47
07
1
TOTAL
NON
CURRENT ASSET
TOTAL CURRNT
ASSET
TOTAL ASSET
921504
7
157283
00
249433
47
838130
3
158959
04
242772
07
9.94766
6
1.05438
2.74389
1
HORIZONTAL ANALYSISPROFIT AND LOSS A/C

2015
2014
% change
Sales
33355
33013
1.0359555
gross profit
6094
5976
1.9745649
operating profit
2118
2659
-20.345995
profit before tax
783
1496
-47.660428
profit after tax
605
1235
-51.012146
HORIZONTAL ANALYSIS OF NISHAT TEXTIL

Column1
2015
2014
Column4
property.
24357269
22964388
6.06539569
long term inv
51960454
44771715
16.0564298
other .non current
631833
537482
17.5542623
store .spare
1335763
1316479
1.46481638
stock in trade
10350193
12752495
-18.837898
short term inv
2189860
3227560
-32.151223
other.current
10314628
11478458
-10.139254
total asset
101140000
97048577
4.21585058
shareholder equity
76142823
68589176
11.0128849
long term finance
5582220
6431304
-13.202361
deffered tax.
247462
474878
-47.889353
short term borrowing
11524143
14468124
-20.348049
current portion of ..
1783250
1595652
11.7568242
other current liab
5860102
5489443
6.75221512
total equity and lab
101140000
97048577
4.21585058
current asset
non current liability
current liability
Interpretation:
Profitability of the company has decreased during the

financial year ended 30 june 2015 as compared to
previous year. Which is due to the
1. Appreciation of the pak rupees against US dollars
2. Low demand of textile product
3. Bearish trend in international market prices
4. Increase
depreciation
expenses
due
to
commissioning of new project.
5. Increase wages of worker from 10000 to 12000 per
month
6. Increase in finance cost in order to the finance the
new project
RECOMMENDATION:
When we talk about issues and evaluate them, we see that these
are not new; they have been in existence since a very long time
and relate to fundamentals of the textile business The time now is
to address questions like why our Industry is vulnerable to these
cyclical downturns, why can't we sustain growth and economic
performance on a sustainable basis. We need to chalk down a
strategy to diagnose and solve issues with a long-term
perspective to meet the challenging tasks of the textile sector.
Furthermore, APTMA being the largest and well organized
institution has the ultimate
responsibility to help facilitate an environment and socioeconomic climate necessary for the positive performance and
viability of member mills. The need of the hour for APTMA is to
address these issues.
The gas tariffs for textiles units should be freezed at the current
level for
at least next 3-5 years.Coal based power generation to be
explored on a priority basis, utilizing the abundant availability of
coal reserves.
The import of electricity is an option even for short/medium term,
to meet the high growth rates of demand in the country. Thermal
efficiency of WAPDA and other Public Sector Units be enhanced to

at least 60% to 70% so the ultimate savings can be passed on in
the form of lower KWH price to the Industry. Unchecked increase
in the prices of utilities should be discouraged. Maximum facilities
should be provided to the industries using their own alternate
energy generating plants. Adequate arrangements are needed to
avoid energy losses due to negligence.
HUMAN RESOURCE DEVELOPMENT

Development of Human Resource be considered as an asset for
the sector because lesser number of skilled and trained
employees are more beneficial for a company rather than number
of un-skilled and illiterate workers. Following measures should be
adopted to enhance the productivity of the company as well its
employees:
Focus on education, training andskill development.
Respect for human Rights, gender balance, and eradication
of child, bonded
labour and promote dignity of labour.
Harmonized labour management relations.
Productivity and development based work culture.
Vocational training outside all industrial estates
SMEs Promotion
Our country is developing country and we should establish small

and medium enterprises (SME) Instead of large scale because we
have less finance to run large scale industry .It will also benefit
the local people.
Labor Intensive Industries

Our Country should establish labor intensive industries instead of
capital intensive industries because we have cheap labor and we
have shortage of capital.
Industrial Cities & Zones
Government should establish maximum industrial cities and zones

where every facility should be provided to industrialists easily and
at low rates. Tax free zones and tax holidays would be a good
suggestion.
Offer Peaceful Environment

Government should maintain law and order in country so that
security of life and property will be given to business and they will
feel comfortable and will be ready to invest in country. Industrial
activity cannot flourish in an atmosphere of disturbances
and fear.

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The Textile

Financial statement and ratio analysis:

Industrial average ratio :

Gul Ahmed textile industry

In 1953, entered the field of manufacturing under the

NET PROFIT MARGIN

Total asset turnover:

Net income /avg total asset

Operating income margin:

Operating income/net sales

Operating asset turnover:

Gross profit margin:

Gross profit/net sales

Return on total equity:

Sales to fixed asset

Return on common equity:

GP ratio increased to 18.27% in FY 2015 as compared to 16.12% in FY

Cash to current liability:

Sales to working capital:

Efficient fund management has resulted in the improvement of

ACTIVITY RATIO FOR

Days sale in receivable=Gross receivable/net sale

Annual report 2012

Annual report 20113

Days sale in receivable=Gross receivable/net sale

Annual report 2014

Annual report 2015

Activity ratio interpretation

Creditors turnover in days has increased is in line with the

Interpretation of market ratio:

Nishat textile mills

printing capacity of 7 million meters (7.65 million yards)

Total asset turnover

Total asset turnover is 0.51 in 2015 where is this ratio is 0.96 in

Sales to fixed asset

return on total equity

Return on common equity:

Gross profit margin:

Sales to networking capital:

ACTIVITY RATIO FOR NISHAT MILLS

For year ended June 30, 2012

Days sale in inventory=ending inventory/cost of goods

Annual report 2014

Annual report 2015

Inventory turnover=cost of goods sold/average

Leverage Ratio= EBIT/ Earning before tax

Earning before tax= 4,389,925

Horizontal analysis (also known as trend analysis) is a financial

HORIZONTAL ANALYSISPROFIT AND LOSS A/C

profit before tax

profit after tax

HORIZONTAL ANALYSIS OF NISHAT TEXTIL

long term inv

other .non current

short term inv

long term finance

short term borrowing

other current liab

total equity and lab

non current liability

Profitability of the company has decreased during the

efficiency of WAPDA and other Public Sector Units be enhanced to

HUMAN RESOURCE DEVELOPMENT

Our country is developing country and we should establish small