FINANCIAL

REPORTING
ANALYSIS
Presented by: Ramila Anwar
Introduction of Nishat
■ Textile sector Contribute 8.5% in GDP of Pakistan
■ Established in 1951
■ One of the modern and largest textile firm of Pakistan
■ Production facility consist of spinning, weaving, processing,
stitching and power generation.
■ Focus on providing quality products and expansion of is buyer
base
■ Possess long working relationships with international brands
■ Major competitors Crescent mills, Chenab Mills and Arzoo Mills
Introduction of Crescent
■ Establish in 1950, headquartered in Faisalabad
■ Production facility consists of spinning, weaving, processing,
power generation and cold storage
■ Engage in supreme quality yarn, fabrics, textile and
garments
■ Major exports hosted by North America, Europe and Japan
■ It has number of social responsibility initiatives
■ Major competitors are Nishat Mills, Bhanero and Kohinoor
Mills
 Vertical Analysis of Balance Sheet
Nishat Textile Mills Limited Crescent Textile Mills Limited
Equities and Liabilities 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
Total 73% 71% 75% 77% 75% 23% 26% 28% 33% 35%
Surplus on revalution of operating fixed assets - net of deferred income
0% tax 0% 0% 0% 0% 18% 19% 18% 16% 20%
Total Non-Current Liabilities 5% 7% 6% 5% 5% 2% 1% 1% 4% 6%
Total Currend Liabilities 22% 22% 19% 18% 20% 57% 54% 53% 48% 40%
Total Liabilities 27% 29% 25% 23% 25% 59% 55% 54% 51% 46%
Contigencies and commitments 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Total Equity and Liabilities 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
Assets
Total Non-Current Assets 66% 70% 76% 76% 75% 59% 59% 56% 57% 64%
Total Current Assets 34% 30% 24% 24% 25% 41% 41% 44% 43% 36%
Total Assets 100% 100% 100% 100% 100% 100% 100% 100% 100% 100%
 Verticle Analysis of Income Statement
Nishat Textile Mills Limited
Crescent Textile Mills Limited
2013 2014 2015 2016 20172013 2014 2015 2016 2017
Sales 100% 100% 100% 100% 100%100% 100% 100% 100% 100%
Cost of Sales -83% -86% -88% -87% -89% -89% -89% -87% -87% -91%
Gross Profit 17% 14% 12% 13% 11% 11% 11% 13% 13% 9%
Distribution cost -5% -5% -5% -4% -5% -5% -5% -5% -6% -6%
Administrative expenses -2% -2% -2% -2% -2% -1% -2% -2% -3% -3%
Other expenses -1% -1% -1% -1% 0% 0% -1% -1% 0% 0%
10% 7% 4% 6% 3% 4% 4% 5% 4% 0%
Other income 5% 7% 8% 8% 9% 2% 3% 2% 4% 3%
Profit from Operations 15% 14% 12% 14% 12% 6% 7% 6% 7% 3%
Finance cost -3% -3% -3% -2% -2% -4% -4% -4% -3% -3%
Share of profit / (loss) from associate 0% 0% 0% 1% 0%
Reversal of carrying amount of investment in associate 0% 0% 0% -1% 0%
Profit / (loss) Before Taxation 12% 11% 9% 12% 10% 2% 3% 3% 3% 1%
Taxtation -1% -1% -1% -2% -2% -1% -1% -1% -1% 0%
Profit / (loss) After Taxation 11% 10% 8% 10% 9% 1% 2% 2% 2% 1%
 Horizontal Analysis of Balance Sheet
Nishat Textile Mills Limited Crescent Textile Mills Limited
Equities and Liabilities 2013-14 2014-15 2015-16 2016-17 2013-14 2014-15 2015-16 2016-17
Total Equity 16% 11% 8% 8% 9% 12% 32% 38%
Surplus on revalution of operating fixed assets - net of deferred income
0%tax 0% 0% 0% 0% 0% -3% 61%
Total Non-Current Liabilities 89% -16% -16% 23% -57% 17% 251% 111%
Total Currend Liabilities 19% -11% 2% 22% -9% 1% 1% 9%
Total Liabilities 31% -12% -2% 23% -11% 2% 6% 16%
Contigencies and commitments #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Total Equity and Liabilities 20% 4% 5% 11% -4% 4% 11% 31%
Assets
Total Non-Current Assets 28% 13% 5% 10% -5% 0% 13% 47%
Total Current Assets 6% -16% 7% 17% -3% 10% 9% 9%
Total Assets 20% 4% 5% 11% -4% 4% 11% 31%
 Horizontal Analysis of Income Statement
Nishat Textile Mills Limited Crescent Textile Mills Limited
2013-14 2014-15 2015-16 2016-17 2013-14 2014-15 2015-16 2016-17
Sales 4% -6% -6% 3% -6% -5% -11% 3%
Cost of Sales 7% -3% -8% 5% -6% -6% -10% 7%
Gross Profit -13% -23% 4% -14% -8% 10% -11% -27%
Distribution cost 1% -5% -12% 11% -11% 6% -2% 2%
Administrative expenses 19% 7% -1% 3% 5% 20% 21% 6%
Other expenses -16% 6% -13% -35% 259% -6% -58% -61%
-25% -46% 26% -38% -16% 13% -30% -95%
Other income 33% 10% 2% 4% 75% -46% 95% -7%
Profit from Operations -5% -19% 10% -12% 8% -12% 2% -52%
Finance cost 0% 8% -40% -13% -19% -9% -16% -20%
Share of profit / (loss) from associate -261% -157% 120% -100%
Reversal of carrying amount of investment in associate #DIV/0! #DIV/0! #DIV/0! -100%
Profit / (loss) Before Taxation -6% -27% 30% -12% 39% 5% -4% -77%
Taxtation -9% 3% 68% -5% -23% 32% -30% -133%
Profit / (loss) After Taxation -6% -29% 26% -13% 114% -7% 13% -55%
 Forecasting of Balance Sheet
Nishat Textile Mills Limited Crescent Textile Mills Limited
Equities and Liabilities 2017 2018 2020 2017 2018 2020
Total Equity 88762796 98512304.11 121483940.4 6280186 7744642.36 11807944
Surplus on revalution of operating fixed assets - net of deferred income- tax - - 3575108 10040494.6 4845744.06
Total Non-Current Liabilities 6028921 7528750.103 11801219.53 1063514 2255011.17 10139372.9
Total Currend Liabilities 23934194 26217196.81 31525557.73 7195749 7317826.69 7609848.23
Total Liabilities 29963115 33745946.91 43326777.26 8259263 9572837.86 17749221.1
Contigencies and commitments 4125820.882 73226311.64 #DIV/0! #DIV/0!
Total Equity and Liabilities 118725911 136384071.9 238037029.3 18114557 27357974.8 34402909.2
Assets
Total Non-Current Assets 88532128 100953598.6 131421678.2 11670448 13502218.1 18175250
Total Current Assets 30193783 35430473.36 106615351.1 6444109 13855756.7 16227659.2
Total Assets 118725911 136384071.9 238037029.3 18114557 27357974.8 34402909.2
 Forecasting of Income Statement
Nishat Textile Mills Limited Crescent Textile Mills Limited
2017 2018 2020 2017 2018 2020
Sales 49247657 48538503 47150684 10872762 10359189 9403673
Cost of Sales -43867819 -44069884 -44476810 -9900768 -9503088 -8755007
Gross Profit 5379838 4468620 2673874 971994 856101 648666
Distribution cost -2367862 -2337328 -2277436 -643674 -634793 -617396
Administrative expenses -1128721 -1207227 -1380998 -299804 -338083 -429928
Other expenses -207507 -177654 -130214 -10169 -13572 -24174
1675748 746412 -1114773 18347 -130347 -422833
Other income 4259666 4784427 6035855 349609 451436 752704
Profit from Operations 5935414 5530839 4921081 367956 321090 329871
Finance cost -915072 -812883 -641465 -286816 -240367 -168817
Share of profit / (loss) from associate 0 0
Reversal of carrying amount of investment in associate 0 0
Profit / (loss) Before Taxation 5020342 4717956 4279616 81140 80723 161054
Taxtation -758000 -864727 -1125378 32199 19780 7465
Profit / (loss) After Taxation 4262342 3853229 3154238 113339 100503 168519
Quick Ratio
Cash Ratio
Net Working Capital
Current Asset to Total Asset
Debt Ratio
Equity Ratio
Debt to Equity Ratio
Account Receivable Turnover
Account Receivable Turnover in Days
Inventory Turnover
Inventory Turnover in Days
Operating Cycle
Operating Asset Turnover
Total Asset Turnover
Return on Assets
Return on Investment
Return on Equity
Sales to Fixed Asset
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Time Interest Earned
Degree of Financial Leverage
Percentage of Retained Earnings
Earning Per Share
Price/Earning Ratio
Dividend Pay-out Ratio
OPERATING CASH FLOW PER SHARE
OPERATING CASH FLOW/CASH
DIVIDEND
Conclusion
■ Analysis showed that both firm were good from rest of the industry.
■ Both were focusing on increased equity financing
■ Nishat was comparatively with better financial health.
■ As a whole, activity, profitability, market and other ratios ranked
Nishat higher.
■ Hurdles to growth of textile unveiled by this analysis ranged from;
– poor energy supply
– increased fuel & energy price
– FATF sanction
– Political unrest and so on
 Way Forward:
■ Increased R&D investment
■ Re-engineering of production facilities through state-of-the-art
technology
■ Reining CGS
■ Minimizing energy wastages
■ Proper energy distribution by government authorities
■ Control over inflation to strengthen local sales