internship report by wasim ghaffar

University of Agriculture, Faisalabad. Page 1


An internship report on

NATIONAL BANK OF PAKISTAN


TOPIC:

FINANCIAL STATEMENT ANALYSIS OF COMMERCIAL & SMEs CLIENTS.

SUBMITTED BY:

WASIM GHAFFAR

REG. No.

2011-ag-1492

DEGREE:

MBA (3.5 YEARS)

SPECIALIZATION:

BANKING & FINANCE

DEPARTMENT OF BUSINESS ADMINISTRATION AND SCIENCES

UNIVERSITY OF AGRICULTUR, FAISALABAD

OCTOBER, 2014.


Dedication

At first dedicating this work to Almighty ALLAH, without his mercy and sympathy I was not

able to accomplish this work Almighty ALLAH gave me power and confidence to done my

internship and also HOLY PROPHET HAZARAT MUHAMMAD (Peace be upon him) who is a

light for humanity. I also dedicate this work to my lovely parents and also dedicating this work

to our honourable instructor of Finance, branch manager & operational manager who help me a

lot to do my work accurately and guide me in my every difficulty.


Acknowledgement:

All praise to Allah, the most merciful, kind and beneficent, and the source of all knowledge,

wisdom within and beyond my comprehension. He is the only God, which can help us in

every field of life. All respect and possible tributes goes to my Holy Prophet Mohammad

(SAW), who is forever guidance and knowledge for all human beings on this earth.

Heart full thanks for Madam SAHAR MUNIR Assistance professor of Finance in IBMS in UAF, for special arrangement of our internship in NBP. Without her co-operation it was not possible for me to complete my Internship &MBA Program.

I am very grateful to Mr MASOOD BUTT (Branch Manager of NBP, Jinnah Colony, Faisalabad) . He guided and helped me through timely suggestions, valuable advices and specially the sympathetic attitude, which always inspired me for hard work.

I am proud to say that I am very grateful to my family whose kind prayers and cooperation

helped us at every step of my work. Special thanks go to my parents for their cooperation for

the sake of my knowledge.

I am really very thankful to Mr UMAR ASGHAR Operational Manager & Mr Usman Arshad Credit officer of National Bank Jinnah colony Branch for their cooperative attitude

during the completion of my project work. He helped and supported me during gathering and

analysing information. I am really very thankful to Mr Umair Abbasi for his cooperative attitude during the completion of my project work. He helped and supported us during

gathering and analysing information.


Executive summary:

To interrupt my skills and educational knowledge of Finance I done my internship in

National Bank of Pakistan Jinnah Colony Branch Faisalabad, and to know how I will work

In financial institutions and among various types of people have different attitude.

The objective of this Internship was to analysis the Financial Statement Analysis of

Commercial and SMEs Clients and to find out problems regarding the theoretical concepts

with practical experience working in an organization during the internship and study the

system of National Bank of Pakistan.

This report is based on internship in National Bank of Pakistan Jinnah Colony Branch. It is a

famous and reputed bank of Pakistan. National Bank of Pakistan maintains first position in

banking sector in Pakistan.

This report contains the Financial Statements Analysis of Small & medium Enterprises, and

corporate. I have performed the Financial Statement Analysis 2 commercial SME (Asif

Trader, Asia Hoisary) and 2 SMEs clients thats way I have chosen Shaki Rice Mill & Shaheen Cool Store, I have performed the different kind of ratios like Liquid Ratio,

Profitability Ratio, Activity Ratio& Debt Ratio.

In Liquidity Analysis I performed the Current Ratio, Cash Ratio, Quick Ratio, and Working

Capital Ratio. In Profitability Analysis I performed the Goss profit Margin, Operating Profit

Margin, Net profit margin, Return on Assets, Return on Equity and Sales to fixed Assets.

In Activity Ratios, I performed the Debtor Turnover Ratio, Debtor Turnover in Days, Stock

Turnover Ratio, and Stock Turnover in Days, Operating Cycle & Working Capital turnover

Ratio.

In Solvency Analysis I performed the Debt Ratio and Debit to Equity Ratio.

I have also showed the Results of all Ratios in charts and also given the Interpretation of all

charts. At the end of this report I wrote the conclusion & references related to data for that

report.


TABLE OF CONTENTS:

Lesson No. Title / Topic Page No.

1. Title page 2

a. Name of the organization 2

b. Name of the Internee, Student ID 3

c. Submission date of the internship report 3

d. Name of the University 3

2. Dedication 4

3. Acknowledgement 5

4 Executive summary 6

5 Table of contents 7-8

6 Brief history National Bank of Pakistan 9

7. Brief history National Bank Jinnah Colony Branch. 10

8. Introduction of Asif Trader 11

a. Balance sheet of Asif Trader 11

b. Income statement of Asif Trader 12

c. Liquidity Analysis (Current, Liquid, Cash, Working Capital) 13

d. Profitability Analysis (Goss profit Margin, Operating Profit Margin,

Net profit margin, Return on Assets, Return on Equity and Sales to

fixed Assets)

16

e. Activity Analysis (Debtor Turnover , Debtor Turnover in Days, Stock Turnover , Stock Turnover in Days, Operating Cycle &

Working Capital turnover ).

21

f. Solvency Analysis (Debt and Debit to Equity Ratio). 25

9. Introduction of Yousaf Asia Hosiery 27

a. Balance sheet of Yousaf Asia Hoisery 27

b. Income statement of Yousaf Asia Hosiery 28

c. Liquidity analysis (Current, Liquid, Cash, Working Capital) 29

d. Profitability analysis (Goss profit Margin, Operating Profit Margin,


31


fixed Assets)

e Activity analysis (Debtor Turnover , Debtor Turnover in Days, Stock Turnover , Stock Turnover in Days, Operating Cycle &

Working Capital turnover).

36

f Solvency analysis (Debt and Debit to Equity Ratio). 41

10 Introduction of Shaheen Cold Store 43

a Balance sheet of Shaheen Cold Store 43

b Income statement of Shaheen Cold Store 44

c. Liquidity analysis (Current, Liquid, Cash, Working Capital) 45

d Profitability analysis (Goss profit Margin, Operating Profit Margin,


fixed Assets)

47

e Activity analysis (Debtor Turnover Ratio, Debtor Turnover in Days, Stock Turnover Ratio, Stock Turnover in Days, Operating Cycle &

Working Capital turnover Ratio).

53

f Solvency analysis (Debt Ratio and Debit to Equity Ratio. 58

11 Introduction of Sukhi Sultan Rice Mill 60

a Balance sheet of Sukhi Sultan Rice Mill 60

b Income statement of Sukhi Sutan Rice Mill 61

c Liquidity analysis (Current, Liquid, Cash, Working Capital) 62

d Profitability analysis (Goss profit Margin, Operating Profit Margin,


fixed Assets)

64

e Activity analysis Debtor Turnover Ratio, Debtor Turnover in Days, Stock Turnover Ratio, Stock Turnover in Days, Operating Cycle &

Working Capital turnover Ratio.

70

f Solvency analysis (Debt Ratio and Debit to Equity Ratio. 73

12 Conclusion 76

13 References 76


BRIEF HOSTORY OF NATIONAL BANK:

The National Bank of Pakistan was established as a semi-public commercial bank on November 29,

1949. NBP transacts all types of banking. The National Bank of Pakistan is also fully authorized to act

as the agent of the State Bank of Pakistan (SBP) where it has no offices. The head office of the bank

is situated at Karachi. Since the formation of bank in 1949, it has been a commercial bank of the

country. The bank is also acting as sole agent to the Government for trade wide the other countries

and for the Govt. Treasury with SBP.

It has office at all the major financial centres of the including at pride places like 100 wall streets,

New York and United National Plaza. Its international net-work includes branches at Bahrain, Cairo,

Paris, Frankfurt, Hong Kong, London, Washington D.C. and offshore banking unit at export

processing zone Karachi and representative offices functioning at Beijing and Seoul.

The bank provides all the banking facilities to the peoples of Pakistan through it are over 1287

branches operating even at Northern Areas. NBP is the pioneer to introduce and implement surprised

Ruler Credit Program with easy terms and conditions. This program was so beneficial to help the poor

farmers of the nation. The NBP also took played the first step in introduction of Profit & Loss Sharing

System (PLS) which helps the economy towards Islamization.

NBP has diversified its business portfolio and is today a major lead player in the debt equity market,

corporate investment banking, retail and consumer banking, agricultural financing, treasury services

and is showing growing interest in promoting and developing the country's small and medium

enterprises and at the same time fulfilling its social responsibilities.

Vision:

To be recognized as a leader and a brand synonymous with trust, highest standards of service quality,

international best practices and social responsibility

Mission:

NBP will aspire to the values that make NBP truly the Nations Bank, by:

Institutionalizing a merit and performance culture

Creating a distinctive brand identity by providing the highest standards of services.

Adopting the best international management practices.

Maximizing stakeholders value.

Discharging our responsibility as a good corporate citizen of Pakistan and in countries where

we operate.


BREIF HISTORY OF NATIONAL BANK JINNAH COLONY BRANCH:

National Bank of Pakistan, Jinnah Colony Branch, Faisalabad is located at main Ideal Bakery

Road Jinnah Colony Faisalabad. State Bank of Pakistan issued the Bank to open its Branch at

the said business location in 1989. The Branch consists of three main departments as follows:

1) Operation Department

2) Cash Department

3) Credit Department

All the departments are monitored by the Branch Manager, Mr Masood Butt (AVP). 12

employees are working in this branch. Functions of three departments are described

hereunder:

1) Operation Department:

Operational Department is monitored by the Operational Manager of the Branch, Mr Umar

Asghar Qureshi (AVP).

The tasks which are performing in operation department are clearing, pensions, transfer of

payments, Payment Order, Demand Draft. These all tasks are performed by Mam. Somera

Saleem.

2) Cash Department:

Cash Department is controlled by Mr Delawer (SHC/OGII). He is head cashier in this branch

along with two other cashiers. They are performing Cash related tasks like Cash Receipt &

Payments, Chelan submission, Property Tax, Income Tax, Utility Bills, Passport Fee etc. Mr

Umair Abbasi (OG.II), Mrs Sumera Saleem (OG.III) & Mr Nadeem Badsha (OG.II) are

performing their duties in General banking department like passing of cheques, keying of

voucher in Banks software and account opening procedures.

3) Credit Department:

Credit Department is one of the main departments in this branch. Most of the

income/business is routed through the credit department. This department is managed by Mr

Usman Arshad (OG.II). He is credit officer of the branch .The tasks which are performed by

Credit officer are processing and controlling, monitoring and management of the loans &

advances. The department generates profit for the branch & take the safety measures for the

protection of bad debts.

Mr Usman is also deals with following tasks:

Small & Medium Enterprise Lending

Commercial and Corporate Lending

Agriculture Finance & Consumer Finance


MS ASIF TRADER

INTRODUCTION:

Asif Trader located at main road Sursayyed Town, Faisalabad. This business is started by Mr Asif in

1989. The main product which is made by Asif Trader is tin Packs for different beverages companies.

Asif Trader is also making the tin Box for Banaspati Gee.

Asif Traders

Balance Sheet

As On June 30, 2014-12 2014 2013 2012 2014 2013 2012 Rupees Rupees Rupees Rupees Rupees Rupees Share

Capital Fixed Assets

29,216

32,462

36,069

Capital

3,665,361

3,063,759

2,549,475

Add Profit

999,186

901,602

814,284

4,664,547

3,965,361

3,363,759 Less

Drawings

300,000

300,000

300,000

Net Capital

4,364,547

3,665,361

3,063,759 Current

Liabilities Current

Assets

Stock & Store

3,312,230

2,783,387

2,094,347

Creditors

112,224

109,074

106,012 Trade

Debtors

1,392,662

1,215,320

1,033,504

Liabilities

638,454

339,081

339,081

Advances &

Payment

99,476

86,809

73,822

Accrued

Expenses

7,652

8,012

8,390 Cash & Bank

Balance

289,293

3,550

279,500

758,330

456,167

453,483

5,093,661

4,089,066

3,481,173 Total

Liabilities

5,122,877

4,121,528

3,517,242 Total Assets

5,122,877

4,121,528

3,517,242


Asif Traders

Income Statement

For The Year Ended June 30, 2014 -12

2014 2013 2012

Rupees Rupees Rupees

Sales 7,233,468 6,563,350 5,955,312

Less Cost Of Goods Sold 5,795,454 5,258,556

4,771,396

Gross Profit 1,438,013 1,304,794

1,183,916 Operating Expenses

Administrative 245,938 223,154

202,481

Selling 131,758 119,551

108,476

377,696 342,705

310,957

Operating Profit 1,060,318 962,089

872,959

Financial Charges 47,035 47,035

45,735

1,013,283 915,054

827,224

Depreciation 3,246 3,607

4,008

Profit / (Loss) Before Taxation 1,010,037 911,447

823,217

Provision for Taxation 10,850 9,845

8,933

Net Profit(Loss) 999,186 901,602

814,284


ANANLYSIS OF ASIF TRADER (Rs. 000)

LIQUIDITY ANALYSIS:

CURRENT RATIO = Current Assets/ Current liabilities

2014 = 5093/758 = 7:1

2013 = 4089/456 = 9:1

Interpretation:

Current ratio indicate the amount of current assets available for repayment of current liabilities that s

way the current ratio of Asif Trader is 7 : 1 in 2014 and 9 : 1 in 2013 . It is not a good situation it will

be good if it is 2 : 1 in every year. The current ratio of Asif trader is very high. It means the current

assets are lying idle.

QUICK RATIO = (Current assets- Prepaid - Inventory) / Current Liabilities

2014 = (5093-99-3312)/758 = 2:1

2013 = (4089-86-2783)/456 = 2.6:1

0

1

2

3

4

5

6

7

8

9

10

2013 2014

Current Assets Ratio

Current Assets Ratio


Interpretation:

Quick ratio is the measure of instant debt paying ability of the business. In the case of Asif Trader the

quick ratio is 2.6 in 2013 and 2 in 2014. It is positive trend. This ratio shows that the receivable of

Asif trader are very low or less. And this ratio also shows that Asif Trader has good debt paying

ability.

CASH RATIO = Cash / Current Liabilities

2014 = 289 /758 = 0.3:1

2013 = 3 /456 = 0.006:1

0

0.5

1

1.5

2

2.5

3

2013 2014

Quick Ratio

Quick Ratio

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

2013 2014

Cash Ratio

Cash Ratio


Interpretation:

The cash ratio indicates the immediate liquidity of the firm. It indicates the firm term solvency

position. High ratio indicates that the firm is not using its cash to its best advantage & low ratio shows

that the firm is not using its cash to its best advantage. In the case of Asif Trader, the cash ratio is 0.3

in 2014 & 0.006 in 2013. Its means that the cash ratio is high in 2014 than in 2013. So the firm is not

using its cash to its best advantage in 2014 than 2013.

WORKING CAPITAL RATIO = Current Assets Current Liabilities

2014 = 5093 - 458 = 4635

2013 = 4089 - 456 = 3633

Interpretation:

Working capital ratio shows the short term solvency of the business in the case of Asif Trader the

working capital is increasing from 3633 in 2013 to 4635 in 2014. It is a good ratio it means that Asif

Trader the less chances of short term solvency.

`

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

2013 2014

Working Capital Ratio



PROFITABILITY ANALYSIS:

GROSS PROFIT MARGIN = (Gross profit / Net sale) * 100

2014 = (1438 / 7233) * 100 = 19.8%

2013 = (1304 / 6363) * 100 = 20%

Interpretation:

Gross Profit Margin shows that what is the profit is earned by the business after deducting the cost

incurred on the production of goods and Expenses incurred on the finished goods? It has a great

impact on sale price and profit. In the case of Asia Trader the Gross profit is decreasing from 20% in

2013 to 19.98% in 2014. it is negative trend. It is decreased due to increase in cost of good.

OPERATING PROFIT MARGIN = (Operating Profit / Net sale) * 100

2014 = (1060 / 7233) * 100 = 14.6%

2013 = (962 / 6563) * 100 = 14.6%

19.7

19.75

19.8

19.85

19.9

19.95

20

20.05

2013 2014

Gross Profit Margin

Gross Profit Margin


Interpretation:

Operating Profit margin measures the profit after deducting the Operating cost incurred on the

production of goods. In the case of Asif Trader the Operating Profit Margin is moderate. It is

same14.6% in 2013 to 2014.

NET PROFIT MARGIN = (Net Profit / Net sale) * 100

2014 = (999 / 7233) * 100 = 13%

2013 = (901 /6563) * 100 = 13.7

0

2

4

6

8

10

12

14

16

2013 2014

Operating Profit Ratio


12.6

12.8

13

13.2

13.4

13.6

13.8

2013 2014

Net Profit Margin

Net Profit Margin


Interpretation:

Net Profit Margin is measure the net income in rupees is generated by each rupee of Sale. But in the

case of Asif trader the Net Profit Margin is decreased from 13.7%in 2013 to 13%in 2014 due to

increase in Cost of Goods & decreased in Gross Profit Margin.

TOTAL ASSETS TURNOVER RATIO = Net sale / Average total Assets

2014 = 7233 / 4621 = 1.5 times

2013 = 6563/ 3819 = 1.7 times

Average Total Assets = (Opening Assets + Closing Assets) / 2

2014 = (4121 + 5122) /2 = 1621

2013 = (3517 + 4121) / 2 = 3819

Interpretation:

Total Assets turnover ratio measures the activity of assets and the ability of assets of the firm to

generate sale through the use of assets. In the Case of Asif Trader the Total Assets turnover ratio is

decreasing from 1.5 Times in 2013 to 1.7 time in 2014 . it is a moderate trend. It means that the use of

assets to generate sale is decreased in 2014 than 2013.

RETURN ON ASSETS = EBIT/ Average Total Assets

2014 = 1010/ 1421 = 0.71 times

2013 = 911/ 3819 = 0.23 times

1.4

1.45

1.5

1.55

1.6

1.65

1.7

1.75

2013 2014

Total Assets Turnover Ratio

Total Assets TurnoverRatio


Interpretation:

Return on Assets measures the firms ability to utilization its assets to create profit .but in the case of

Asif Trader the Return on Assets is increasing from 0.2 in 2013 to 0.7 in 2014. It is good trend .it

means the assets of the firm has good ability to increase the profit

SALES TO FIXED ASSETS = Net Sale / Average Fixed Assets

2014 = 7233 / 30.5 = 237.7 times

2013 = 6563/ 34 = 193 times

Average Fixed Assets = (Opening Assets + Closing Assets) /2

2014 = (32+29)/2 = 30.5

2013 = (36+ 32)/2 = 34

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

2013 2014

Return on Equity

Return on Equity

0

50

100

150

200

250

2013 2014

Sales to Fixed Assets

Sales to Fixed Assets


Interpretation:

Sale to fixed Assets Ratio measures the ability of the firm fixed assets to increase the sale of the firm.

In the case of Asif Trader the Sale to Fixed Assets ratio is Increased from 193 times in 2013 to237

time in 2014. It means that the Asif trader firm Fixed assets having a good ability to increase the sale

in 2014 than 2013.

RETURN ON EQUITY = EBIT / Average Total Equity

2014 = 1010/ 3364 = 36 %

2013 = 911/ 2806 = 32 %

Average Total Equity = (Opening Equity + Closing Equity) / 2

2014 = (3063+ 3665) / 2 = 3364

2013 = (2549 +3063) /2 = 2806

Interpretation:

The Return on Equity measures the return on stock of the shareholders of firm. In the case of Asif

Trader the return on equity is increased from 32% in 2013 to 36% in 2014.it means that the Asif

Trader firm earned 4% more profit in 2014 than 2013.

0.3

0.31

0.32

0.33

0.34

0.35

0.36

0.37

2013 2014

Return on Equity

Return on Equity


ACTIVITY ANAYSIS:

STOCK TURNOVER RATIO = Cost of goods sold / Average Stock

2014 = 5795/3047 = 1.9 times

2013 = 4959/2439 = 2 times

CGS = Sale Gross profit

2014 = 7233- 1438 = 5795

2013 = 6563 1304 = 4959

Average Stocks = (Opening stock + Closing Stock) /2

2014 = (3312 + 2783)/ 2 = 3047

2013 = (2094 + 2783) / 2 = 243

Interpretation:

Inventory Turnover Ratio evaluate the efficiency with which a firm is able to manage its inventory .in

the case of asif Tarder the inventory turnover ratio decreasing from 2 time in 2013 to 1.9 time in 2014

.it is moderate situation.

INVENTORY TURNOVER IN DAYS = Days of Year/ Inventory turn over ratio

2014 = 365/ 1.9 = 182 days

1.84

1.86

1.88

1.9

1.92

1.94

1.96

1.98

2

2.02

2013 2014

Stock Turn over Ratio



2013 = 365 / 2 = 183 days

Interpretation:

Inventory Turnover in days signifies the number of days on an average the inventory is disposed off

during the year.in The Case of Asif Trader the time is decreasing in 183 days in 2013 to 182 days in

2014 .it shows the inefficency of the firm.

DEBTORS TURNOVER RATIO = Net Credit Sale / Average Debtors

2014 = 7233/ 1303 = 5.5 times

2013 = 6563/ 1124 = 5.8 time

Average Debtors = (Opening Debtors + Closing Debtors) /2

2014 = (1215 + 1392) /2 = 1303

181.4

181.6

181.8

182

182.2

182.4

182.6

182.8

183

2013 2014

Inventory Turn over in Days

Inventory Turn over inDays


2013 = (1033+ 1215) / 2 = 1124

Interpretation:

Debtor Turnover Ratio indicates the speed with which a company collect its debts from debtors. In the

case of Asif Trader the Debtor Turnover Ratio is increasing from 1124 times in 2013 to 1303 times in

2014.it mean in 2014 the firm collect its debt promptly than in 2013.

DEBTORS TURNOVER IN DAYS = Days of Year / Debtors turn over ratio

2014 = 365/ 5.5 = 65 days

2013 = 365/ 5.8 = 63 days

62

62.5

63

63.5

64

64.5

65

65.5

2013 2014

Debtors Turnover in Days

Debtors Turnover inDays

5.3

5.4

5.5

5.6

5.7

5.8

5.9

2013 2014

Debtor Turnover Ratio



Interpretation:

Debtors Turnover in days signifies the number of days in which the debt us collected by the firm from

debtors .in the case of Asif Traders the term of collection is increasing from 63 days in 2013 to 65

days in 2014.it is a good situation & best for the company.

OPERATING CYCLE = Inventory turn over in days + Debtors Turnover in Days

2014 = 182 days + 65 Days = 247 days

2013 = 183 days + 63 days = 246 days

Interpretation:

Operating Cycle show that how much time is required I by the firm in which the inventory converted

into cash ? in the case of Asif trader the Operating cycleis increasing from246 days in 2013 to 247

daysin 2014 . it is unfaverable for the firm. Because the time of operating is more in 2014 than 2013.

WORKING CAPITAL TURNOVER RATIO = Cost of goods sold / Average Working Capital

2014 = 5795/4134 = 1.4 times

2013 = 4959/ 3330 = 1.4 times

Average Working Capital = (Opening working Capital+ Closing Working Capital)/ 2

2014 = (3633+4635) / 2 = 413

2013 = (3028+ 3633) / 2 = 3330

245.4

245.6

245.8

246

246.2

246.4

246.6

246.8

247

2013 2014

Operating Cycle

Operating Cycle


Interpretation:

Working Capital Turnover Ratio measures the number of times the working capital is turnover OR the

efficiency at which the working capital is being used by the firm in a year .In the case of Asif Traders

the working capital ratio is increase from 3033 times in 2013 to 4134 times in 2014 . it is favourable

for the firm. It means that working capital is efficiently used by the firm in 2014 than in 2013.

.

SOLVENCY ANALYSIS:

DEBT RATIO = Total Liabilities /Total Assets

2014 = 758 / 5122 = 15%

2013 = 456/4089 = 11%

0

2

4

6

8

10

12

14

16

2013 2014

Working Capital Turnover Ratio

Working CapitalTurnover Ratio

0

2

4

6

8

10

12

14

16

2013 2014

Debt Ratio

Debt Ratio


Interpretation:

The Debt Ratio indicates the firm long term debt-paying ability. It also indicates the percentage of

assets financed by creditors. Low percentage of this ratio is best for the company. In the case of Asif

Trader the Debt Ratio is 11% in 2013 and in 15% in 2014. It means that in 2013 the cash ratio is low

than 2014 which is best for the firm. This shows that the assets are less financed by creditors in 2013

than 2014.

DEBT TO EQUITY RATIO = Total Liabilities/ Shareholder Equity

2014 = 758 /3665 = 20%

2013 = 456 / 3063 = 15%

Interpretation:

Debt to Equity Ratio measures that how much creditors are protected in case of firm insolvency? Low

ratio is best for the company. In the case of Asif Traders the ratio in high from 15% in 2013 to 20% in

2014.It means that creditors are less protected in 2014 than in 2013.

0

5

10

15

20

25

2013 2014

Debt to Equity Ratio



Yousaf Asia Hosiery

INTRODUCTION:

Yousaf Asia Hosiery located at main Jinnah colony gate road, Faisalabad. Mr Yousaf is the owner of

this business. He was started that business in 1982. Yousaf Asia Hosiery Manufactures the

Underwear, Undershirts, and Socks. This firm sale that products in local market as well as export

these products at small level means one or two container per month.

M/S Yousaf Asia Hoisery

Balance Sheet

As On June 30, 2014. 2014 2013 2012 2014 2013 2012 Rupees Rupees Rupees Rupees Rupees Rupees Share

Capital Fixed

Assets 4,869,373 4,965,970 5,073,300

Capital

22,832,47

6

21,696,42

3

20,042,36

2 Add

Profit

3,951,257

3,536,053

3,154,060

26,783,73

3

25,232,47

6

23,196,42

3 Less

Drawings

2,600,000

2,400,000

1,500,000

24,183,73

3

22,832,47

6

21,696,42

3 Current

Liabilitie

s Current

Asset

Creditors Stock &

Store

14,447,48

5

13,051,02

6 11,789,54

4

Liabilities

1,267,718

1,232,134

1,197,549 Trade

Debtors

7,106,812

7,106,812 6,754,69 Short

Term

Loans

1,928,071

1,928,071

1,946,662

Advance

s

507,629

507,629 482,455 Accrued

Expenses

158,078

165,527

173,327 Cash &

Bank

606,301

526,771 914,292

Total C.L.

3,353,867

3,325,732

3,317,538

Total C.A.

22,668,22

21,192,23 19,940,66

. . . . . . Total

liabilities

27,537,60

26,158,20

25,013,96 Total

Assets

27,537,60

26,158,20 25,013,96


Yousaf Asia Hoisery

Income Statement

For The Year Ended June 30, 2014 -12.

2014 2013 2012


Sales

71,281,402

64,677,798

58,685,962

Less Cost of Goods Sold 62,691,993

56,884,124

51,614,303

Gross Profit

8,589,409

7,793,675

7,071,658

Operating Expenses

Administrative

2,138,442

1,940,334

1,760,579

Selling

1,532,550

1,390,573

1,261,748

3,670,992

3,330,907

3,022,327

Operating Profit

4,918,417

4,462,768

4,049,331

Financial Charges

318,132

318,132

321,199

4,600,285

4,144,636

3,728,132

Depreciation

96,597

107,330

119,256

Profit / (Loss) Before Taxation

4,503,688

4,037,306

3,608,877

Provision for Taxation

552,431

501,253

454,816

Net Profit (Loss) 3,951,257

3,536,053

3,154,060


Yousaf Asia Hosiery (Rs 000)

LIQUIDITY ANALYSIS:


2014 = 22668/3353 = 6.7:1

2013 = 21192/3325 = 6.3:1

Interpretation:


way the current ratio of Yousaf Asia Hosiery is 6 : 7 in 2014 and 6 : 3 in 2013 . it is a moderate

situation it will be good if it is 2 : 1 in every year.

QUICK RATIO = (Current assets - Prepaid - Inventory)/Current Liabilities

2014 = (22668-507-14447)/3353 = 2.3:1

2013 = (21192-507-13051)/3325 = 2.2:1

6.1

6.2

6.3

6.4

6.5

6.6

6.7

6.8

2013 2014

Current Ratio

Current Ratio


Interpretation:

Quick ratio is the measure of instant debt paying ability of the business. In the case of Yousaf Asia

Hosiery the quick ratio is 2.2 in 2013 and 2.3 in 2014. It is positive trend. This ratio also shows that

Yousaf Asia Hosiery has good debt paying ability.


2014 = 606 /3353 = 0.1:1

2013 = 526/3325 = 0.1:1

Interpretation:



2.14

2.16

2.18

2.2

2.22

2.24

2.26

2.28

2.3

2.32

2013 2014

Quick Ratio

Quick Ratio

0

0.02

0.04

0.06

0.08

0.1

0.12

2013 2014

Cash Ratio

Cash Ratio


that the firm is not using its cash to its best advantage. In the case of Yousaf Asia Hosiery, the cash

ratio is 0.1 in 2014 & 0.1 in 2013. Its means that the cash ratio has moderate trend in 2013 &2014.


2014 = 22668 - 3353 = 19315

2013 = 21192 - 3325 = 17867

Interpretation:

Working capital ratio shows the short term solvency of the business. In the case of Yousaf Asia

Hosiery the working from 18767 in 2013 and 19315 in 2014. It is a good ratio it means that Yousaf

Asia Hosiery has the less chances of short term solvency.

PROFITBILITY ANALYSIS:


2014 = (8589 / 71281) * 100 = 12%

2013 = (4462 / 64677) * 100 = 6.8%

17000

17500

18000

18500

19000

19500

2013 2014




Interpretation:


incurred on the production of goods and Expenses incurred on the finished goods? it has a great

impact on sale price and profit . In the case of Yousaf Asia Hosiery the Gross profit is decreasing

from 6.8% in 2013 to 12% in 2014. it is a positive trend. It is increase due to decrease in cost of good.


2014 = (4918 / 71281) * 100 = 6.8%

2013 = (7793 /64677) * 100 = 12%

0

2

4

6

8

10

12

14

2013 2014

Gross Profit Margin

Gross Profit Margin

0

2

4

6

8

10

12

14

2013 2014




Interpretation:


production of goods. In the case of Yousaf Asia Hosiery the Operating Profit Margin is decrease from

12% in 2013 to 6.8 % in 2014. This ratio is decrease due to increase in operating cost.


2014 = (3951 / 72281) * 100 = 5.5%

2013 = (3536 /64677) * 100 = 5.4%

Interpretation:


case of Yousaf Asia Hosiery the Net Profit Margin is increased from 5.4% in 2013 to 5.5% in 2014

due to decreased in Cost of Goods & increased in Gross Profit Margin.


2014 = 71281 / 24364 = 2.9 times

2013 = 64677/ 25585 = 2.5 times

Average Total Assets = (Opening Assets + Closing Assets) / 2

2014 = (21192+ 27537) /2 = 24364

2013 = (25013 + 26158) / 2 = 25585

5.34

5.36

5.38

5.4

5.42

5.44

5.46

5.48

5.5

5.52

2013 2014

Net Profit Margin

Net Profit Margin


Interpretation:


generate sale through the use of assets. In the Case of Yousaf Asia Hosiery .The Total Assets turnover

ratio is increasing from 2.5 Times in 2013 to 2.9 time in 2014. It is a positive trend. It means that the

use of assets to generate sale is increased in 2014 than 2013.

RETURN ON AEESTS = EBIT/ Average Total Assets

2014 = 4563/ 24364 = 0.18times

2013 = 4037/ 25585 = 0.15times

2.3

2.4

2.5

2.6

2.7

2.8

2.9

3

2013 2014



0.135

0.14

0.145

0.15

0.155

0.16

0.165

0.17

0.175

0.18

0.185

2013 2014

Return on Equity

Return on Equity


Interpretation:


Yousaf Asia Hosiery the Return on Assets is increasing from 0.15 in 2013 to 0.18 in 2014. It is good

trend .it means the assets of the firm has good ability to increase the profit

SALE TO FIXED ASSETS = Net Sale / Average Fixed Assets

2014 = 71281 / 4917 = 14.47 times

2013 = 64677/ 5019 = 12.8 times

Average Fixed Assets = (Opening Assets + Closing Assets) /2

2014 = (4965+4869)/ 2 = 4917

2013 = (5073+ 4965)/ 2 = 5019

Interpretation:


In the case of Yousaf Asia Hosiery the Sale to Fixed Assets ratio is increased from 12.8 times in 2013

to 14.47 time in 2014. It means that the Yousaf Asia firm Fixed assets having a good ability to

increase the sale in 2014 than in 2013.


2014 = 4563/ 22264 = 0.2 times

12

12.5

13

13.5

14

14.5

15

2013 2014

Sales to fixed Assets

Sales to fixed Assets


2013 = 4037/ 20869 = 0.19 times


2014 = (22832 + 21696) / 2 = 22264

2013 = (20042 +21696) /2 = 20869

Interpretation:

The Return on Equity measures the return on stock of the shareholders of firm. In the case of Yousaf

Asia Hosiery the return on equity is increased from 0.19% in 2013 to 0.2% in 2014.it means that the

Yousaf Asia firm earning the more profit in 2014 than 2013.

ACTIVITY ANALYSIS:


2014 = 62692/13749 = 4.5 times

2013 = 56874/12420 = 4.5 times


2014 = 71281- 8589 = 62692

2013 = 64667 - 7793 = 56874


0

0.05

0.1

0.15

0.2

0.25

2013 2014

Return on Equity

Return on Equity


2014 = (13051 + 14447)/ 2 = 13749

2013 = (11789 + 13051) / 2 = 12420

Interpretation:


the case of Yousaf Asia Hoisary the inventory turnover ratio is same decreasing from 2013 to 2014 .it

is moderate situation.


2014 = 365/ 5 = 73days

2013 = 365 / 5 = 73 days

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

2013 2014



0

10

20

30

40

50

60

70

80

2013 2014

Inventory Turnover In Days

Inventory Turnover InDays


Interpretation:


during the year.in The Case of Yousaf Asia Hoisary the Inventory Turnover in days are same in 2013

to 2014 .it shows that 27 days are require to dispoed off the inventory for 2013 & 2014.

DEBTORS TURNOVER RATIO = Net Credit Sale / Average Debtors

2014 = 71128/ 10078 = 7 times

2013 = 64677/ 6930 = 9 times


2014 = (13051 + 7106) /2 = 10078

2013 = (6754+ 7106) / 2 = 6930

Interpretation:


case of Yousaf Asia Hosiery the Debtor Turnover Ratio is decreasing from 9 times in 2013 to 7 times

in 2014.it mean in 2014 the firm collecting its debt slowly than in 2013.


2014 = 365/ 7 = 52 days

2013 = 365/ 9 = 39 days

0

1

2

3

4

5

6

7

8

9

10

2013 2014




Interpretation:

Debtors Turnover in days signifies the number of days in which the debt is collected by the firm from

debtors .in the case of Yousaf Asia Hosiery the term of collection of debt is increasing from 39 days

in 2013 to 52 days in 2014. it is a good situation & best for the company.

.OPERATING CYCLE = Inventory turn over in days + Debtors Turnover in Days

2014 = 73 days + 52 Days = 125days

2013 = 73 days + 39 days = 112 days

Intrepretation:

Operating Cycle shows that how much time is required by the firm in which the inventory converted

into cash ? in the case of Yousaf Asia Hoisary the Operating cycle is increasing from 112 days in

0

10

20

30

40

50

60

2013 2014

Debtors Turn over In Days

Debtors Turn over InDays

105

110

115

120

125

130

2013 2014

Operating Cycle

Operating Cycle


2013 to 125 daysin 2014 . it is unfaverable for the firm. Because the time of operating cycle is more

in 2014 than in 2013.

WORKING CAPITAL TURNOVER RATIO = Cost of goods sold /Average Working Capital

2014 = 62692/18591 = 3.4 times

2013 = 56874/ 17867 = 3.2 times


2014 = (17867 + 19315) / 2 = 18591

2013 = (16623+ 17867) / 2 = 17245

Interpretation:


efficiency at which the working capital is being used by the firm in a year .In the case of Yousaf Asia

Hosiery the working capital ratio is increase from 3.2 times in 2013 to 3.4 times in 2014 . it is

favourable for the firm. It means that working capital is efficiently used by the firm in 2014 than in

2013.

3.1

3.15

3.2

3.25

3.3

3.35

3.4

3.45

2013 2014




SOLVENCY ANAYSIS:

DEBT RATIO = Total liabilities/Total Assets

2014 = 3353 / 27537 = 12%

2013 = 3325/ 26158 = 13%

11.4

11.6

11.8

12

12.2

12.4

12.6

12.8

13

13.2

2013 2014

Debt Ratio

Debt Ratio

Interpretation:


assets financed by creditors. Low percentage of this ratio is best for the company. In the case of

Yousaf Asia Hoiesy. The Debt Ratio is 12% 2014. It means that in 2013 the cash ratio is low than

2014 which is best for the firm. This shows that the assets are less financed by creditors in 2013 than

2014.


2014 = 3353/24183 = 13.8%

2013 = 3325/22832 = 14.5%


`

Interpretation:

Debt to Equity Ratio measures that how much creditors are protected in case of firm insolvency?

Lower this ratio is the best for the company. In the case of Yousaf Asia hosiery the ratio is 14.5% in

2013 & 13.8% in 2014.It means that creditors are more protected in 2014 than in 2013.

13.4

13.6

13.8

14

14.2

14.4

14.6

2013 2014




MS SHAHEEN COLD STORE TRADER

INTRODUCTION:

Shaheen Cold Store Located at vegetable & fruit market near Saddar By Pass, Faisalabad. It is also

part a Anjum Textile (pvt) limited. Mr. Raja Ashraf opens it in 1998. This store provides the storage

facility the whole seller & retailer to store their fruit.

M/S SHAHEEN COLD STORE

Balance Sheet

As On June 30, 2013.

2014 2013 2012 2014 2013 2012 Rupees Rupees Rupees Rupees Rupees Rupees Share

Capital Fixed

Assets

7,124,931

7,530,772

7,961,400

Capital

18,782,971

18,300,000

17,400,000

Add Profit

3,511,667

3,482,971

2,825,633

22,294,638

21,782,971

20,225,633 Less

Drawings

3,200,000

3,000,000

1,925,633

19,094,638

18,782,971

18,300,000

- Current

Liabilities Current

Assets Creditors

& Other Stock &

Store

20,441,488

18,975,762

18,527,399

Liabilities

930,687

832,978

745,528 Trade

Debtors

1,232,596

1,147,412

1,120,520

Borrowing

9,932,377

9,971,154

8,933,967 Advances

557,776

540,481

523,722 Accrued

Expenses

680,612

602,311

533,019 Cash &

Bank

1,281,522

1,994,987

379,473

Total C.L.

11,543,676

11,406,444

10,212,514 Total C.L.

23,513,383

22,658,643

20,551,114

. . . . . . Total liabilities

30,638,313

30,189,415

28,512,514 Total Assets

30,638,313

30,189,415

28,512,514


SHAHEEN COLD STORE

Income Statement

For The Year Ended June 30, 2014 - 12.

2014 2013 2012


Sales 53,196,948 51,943,804

50,720,180

Less Direct Expenditures 45,164,209 44,100,290

41,844,149

Gross Profit 8,032,739 7,843,514 8,876,031

Operating Expenses

Administrative 1,978,926 1,932,310

3,677,213

Selling 824,553 805,129

443,802

2,803,479 2,737,438

4,121,015

Operating Profit 5,229,260 5,106,076

4,755,016

Financial Charges 1,035,128 922,369

1,278,762

4,194,132 4,183,707 3,476,254

Depreciation 405,841 430,628

473,100

Profit / (Loss) Before Taxation 3,788,291 3,753,079

3,003,154

Provision for Taxation 276,624 270,108 177,521

Net Profit (Loss) 3,511,667 3,482,971

2,825,633


MS SHAHEEN COLD STORE TRADER ( Rs 000)

LIQUIDITY ANALYSIS:


2014 = 23513/11543 = 2:1

2013 = 20393/10266 = 1.9:1

Interpretation:


way the current ratio of Shaheen Trader is 2 : 1 in 2014 and 1.9 : 1 in 2013 . It is a good situation in

both years. It means that current assets are used properly.


2014 = (23513-557-20441)/11543 = 0.2:1

2013 = (20393-486-17078)/11406 = 0.2:1

1.84

1.86

1.88

1.9

1.92

1.94

1.96

1.98

2

2.02

2013 2014

Current Ratio

Current Ratio


Interpretation:

Quick ratio is the measure of instant debt paying ability of the business. In the case of Shaheen Trader

the quick ratio is 0.2 in 2013 in 2014. It is bad situation. This ratio also shows that Asif Trader has not

a good debt paying ability.


2014 = 1281 /11543 = 0.17:1

2013 = 1795 /10266 = 0.11:1

0

0.05

0.1

0.15

0.2

0.25

2013 2014

Quick Ratio

Quick Ratio

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

0.16

0.18

2013 2014

Cash Ratio

Cash Ratio


Interpretation:



that the firm is not using its cash to its best advantage. In the case of Asif Trader, the cash ratio is 0.17

in 2014 & 0.11 in 2013. Its means that the cash ratio is high in 2014 than 2013. So the firm is not

using its cash to its best advantage in 2014 than 2013.


2014 = 23513 - 11543 = 11970

2013 = 20393 - 10266 = 10127

Interpretation:

Working capital ratio shows the short term solvency of the business. In the case of Shaheen trader the

working capital is increasing from Rs. 10127 in 2013 to Rs. 11970 in 2014. It is a good ratio it means

that Shaheen trader the less chances of short term solvency.



2014 = (8032/ 53196) * 100 = 15%

2013 = (7058 / 46748) * 100 = 15%

0

2000

4000

6000

8000

10000

12000

2013 2014




Interpretation:


incurred on the production of goods and Expenses incurred on the finished goods? It has a great

impact on sale price and profit. In the case of Shaheen Trader the Gross profit is same 20% in 2013 &

in 2014. it is moderate situation. It is same due to constant increase in cost of good.


2014 = (5229 / 53196) * 100 = 9.8%

2013 = (4596 / 46748) * 100 = 9.7%

0

2

4

6

8

10

12

14

16

2013 2014

Gross profit Margin

Gross profit Margin

9.64

9.66

9.68

9.7

9.72

9.74

9.76

9.78

9.8

9.82

2013 2014

Operating Profit Margin

Operating ProfitMargin


Interpretation:


production of goods. In the case of Shaheen Trader the Operating Profit Margin has a decreasing

trend. It is9.7% in 2013 & 9.8% in 2014.Oprating Profit Increased in 2014 due to decreased in

operating expenses in 2014.


2014 = (3511 / 53196) * 100 = 6.6%

2013 = (3404 / 46748) * 100 = 7.2%

Interpretation:


case of Shaheen trader the Net Profit Margin is decreased from 7.2% in 2013 to 6.6%in 2014 due to

increased in finance cost and tax.

6.3

6.4

6.5

6.6

6.7

6.8

6.9

7

7.1

7.2

7.3

2013 2014

Net Profit Margin

Net Profit Margin



2014 = 53196 / 28905 = 1.8 times

2013 = 46748/ 27129 = 1.7 times

Average Total Assets = (Opening Total Assets + Closing Total Assets) / 2

2014 = (27171 + 30638) /2 = 28905

2013 = (27086 + 27171) / 2 = 27129

Interpretation:


generate sale through the use of assets. In the Case of Shaheen trader the Total Assets turnover ratio is

increased from 1.7 times in 2013 to 1.8 time in 2014. It is a positive trend. It means that the use of

assets to generate sale is increased in 2014 than 2013.


2014 = 3788/ 28905 = 0.13 times

2013 = 3378/ 27129 = 0.12 times

1.64

1.66

1.68

1.7

1.72

1.74

1.76

1.78

1.8

1.82

2013 2014




Interpretation:


Shaheen Trader the Return on Assets is increasing from 0.12 time in 2013 to 0.13 time in 2014. It is

good trend .it means the assets of the firm has good ability to increase the profit.

SALE TO FIXED AEESTS = Net Sale / Average Fixed Assets

2014 = 53196 / 6950 = 7.6 times

2013 = 46748/ 7170 = 6.5 times

Average Fixed Assets = (Opening Total Assets + Closing Total Assets) /2

2014 = (6777 +7124)/2 = 6950

2013 = (7563 + 6777)/2 = 7170

0.114

0.116

0.118

0.12

0.122

0.124

0.126

0.128

0.13

0.132

2013 2014

Return on Assets

Return on Assets


Interpretation:


In the case of shaheen Trader the Sale to Fixed Assets ratio is decreased from 7.6 times in 2013 to 6.5

time in 2014. It means that the Shaheen trader firm Fixed assets not having a good ability to increase

the sale in 2014 than 2013.


2014 = 3788/ 17999 = 21%

2013 = 3378/ 17144 = 19%


2014 = (16904+19094) / 2 = 17999

2013 = (17385 + 16904) /2 = 1714

5.5

6

6.5

7

7.5

8

2013 2014

Sale To Fixed Assets

Sale To Fixed Assets


Interpretation:

The Return on Equity measures the return on stock of the shareholders of firm. In the case of Shaheen

Trader the return on equity is increased from 19% in 2013 to 21% in 2014.It means that the Shaheen

Trader firm earned 2% more profit in 2014 than in 2013.

ACTIVITY ANALYSIS:


2014 = 45194/18760 = 2.4 times

2013 = 39690/17339 = 2.2 times


2014 = 53196 - 8032 = 45164

2013 = 46748 - 7058 = 39690


2014 = (17078 + 20441)/ 2 = 18760

2013 = (17600 + 17078) / 2 = 17339

0.18

0.185

0.19

0.195

0.2

0.205

0.21

0.215

2013 2014

Return On Equity

Return On Equity


Interpretation:


the case of Shaheen Tarder the inventory turnover ratio increasing from 2.2 time in 2013 to 2.4 time

in 2014 .it is a positive situation.It means that the firm efficiently managed its inventory in 2014 than

in 2013


2014 = 365/ 2.4 = 152 days

2013 = 365 / 2.2 = 165 days

2.1

2.15

2.2

2.25

2.3

2.35

2.4

2.45

2013 2014

Stock Turnover Ratio

Stock Turnover Ratio


Interpretation:


during the year. In The case of ShaheenTrader the time is increasing in 165 days in 2013 to 152 days

in 2014 .it shows the efficency of the firm.

DEBTOR TURNOVER RATIO = Net Credit Sale / Average Debtors

2014 = 53196/ 1133 = 47 times

2013 = 46748/ 1049 = 44 times


2014 = (1033 + 1232) /2 = 1133

2013 = (1064 + 1033) / 2 = 1049

145

150

155

160

165

170

2013 2014

Inventory Turnover in Days

Inventory Turnover inDays


Interpretation:


case of Shaheen Trader the Debtor Turnover Ratio is increasing from 44 times in 2013 to 44 times in

2014.it mean in 2014 the firm collect its debt promptly than in 2013.


2014 = 365/ 47 = 7.7 days

2013 = 365/ 44 = 8.2 days

42.5

43

43.5

44

44.5

45

45.5

46

46.5

47

47.5

2013 2014



74

75

76

77

78

79

80

81

82

83

2013 2014

Debtor Turnover in Days

Debtor Turnover inDays


Interpretation:

Debtors Turnover in days signifies the number of days in which the debt us collected by the firm from

debtors .in the case of Shaheen Traders the term of collection is increasing from 8.2 days in 2013 to

7.7 days in 2014.it is a good situation & best for the company.

OPERATING CYCLE = Inventory turn over in days + Debtors Turnover in Days

2014 = 152 days + 7.7 Days = 160 days

2013 = 165 days + 8.2 days = 173 days

Intrepretation:

Operating Cycle show that how much time is required I by the firm in which the inventory converted

into cash ? in the case of Shaheen trader the Operating cycleis increasing from 173 days in 2013 to

160 daysin 2014 . it is faverable for the firm. Because the time of operating is less in 2014 than 2013.

WORKING CAPITAL TURNOVER RATIO = Cost of goods sold/Average Working Capital

2014 = 45164/11048 = 4 times

2013 = 39690/ 9974 = 3.9 times


2014 = (10127 +11970) / 2 = 11048

150

155

160

165

170

175

2013 2014

Operating Cycle

Operating Cycle


2013 = (9822+ 10127) / 2 = 9974

Interpretation:


efficiency at which the working capital is being used by the firm in a year .In the case of Shaheen

Traders the working capital ratio is increase from 3.9 times in 2013 to 4 times in 2014. It is

favourable for the firm. It means that working capital is efficiently used by the firm in 2014 than in

2013.

SOLVENCY ANAYSIS:

DEBT RATIO = Total Liabilities/Total Assets

2014 = 11543 / 30638 = 37.6%

2013 = 11406/ 30189 = 37.8%

3.84

3.86

3.88

3.9

3.92

3.94

3.96

3.98

4

4.02

2013 2014



37.5

37.55

37.6

37.65

37.7

37.75

37.8

37.85

2013 2014

Debt Ratio

Debt Ratio


Interpretation:


assets financed by creditors. Low percentage of this ratio is best for the company. In the case of

Shaheen Cold Store the Debt Ratio is 37.8% in 2013 and in 37.6% in 2014. It means that in 2013 the

cash ratio is low than 2014 which is best for the firm. This shows that the assets are less financed by

creditors in 2013 than 2014.


2014 = 11543/ 19094 = 60.4 %

2013 = 11046 /18782 = 59 %

Interpretation:

Debt to Equity Ratio measures that how much creditors are protected in case of firm insolvency? Low

ratio is best for the firm In the case of Shaheen Traders the ratio in high from 58% in 2013 to 60.4 %

in 2014.It means that creditors are less protected in 2014 than in 2013.

56.5

57

57.5

58

58.5

59

59.5

60

60.5

61

2013 2014

Debt To Equity Ratio

Debt To Equity Ratio


SAKHI SULTAN RICE MILL.

INTRODUCTION:

Sakhi Sultan Rice Mill located at samindary road Faisalabad. It was came into existence in1986.It is a

part of Ittehad Group of industry. It purchases the fresh rice from former. After cleaning & polishing,

the rice is packed into bags. This mill sale the rice in Pakistan & also export the rice.

M/S Sakhi Sultan Rice Mills

Balance Sheet

As On June 30, 2014-12

2014 2013 2012 2014 2013 2012 Rupees Rupees Rupees Rupees Rupees Rupees Share

Capital Fixed

Assets

42,277,196

38,682,780

46,758,704 `

Capital

59,002,817

49,803,665

56,550,817

Add Profit

7,639,132

4,088,152

2,910,848

66,641,949

53,891,817

59,462,665 Less

Drawing

(5,000,000)

(3,740,000)

3,800,000

Net Capital

61,641,949

50,152,817

55,662,665 Current

Liabilities Current

Assets Creditors &

Other Stock &

Store

33,913,183

20,644,387

19,136,300

Liabilities

18,025,800

14,891,827

14,450,749 Trade

Debtors

14,113,804

7,089,604

5,552,171

Short Term

Borrowing

10,105,000

- Advances

5,582,061

3,799,684

4,044,794

Accrued

Expenses

8,422,215

7,496,073

7,355,821

Cash,

Bank

Balance

2,308,720

2,324,262

1,978,266

36,553,014

22,387,900

21,806,569

55,917,768

33,857,937

30,710,531 Total

Liabilities

98,194,964

72,540,717

77,470,235 Total

Assets

98,194,964

72,540,717

77,470,235


Sakhi Sultan Rice Mills

Income Statement

For The Year Ended June 30, 2014 -12.

2014 2013 2012


Sales 148,353,872 78,812,995

69,133,428

Less Cost Of Goods Sold 129,067,869 68,567,418 53,782,157

Gross Profit 19,286,003 10,245,752

2,719,023

Operating Expenses

Administrative 2,759,382 1,465,614

1,119,701

Selling 1,780,246 1,298,654

690,395

4,539,628 2,411,268

1,811,096

Operating Profit 14,746,375 7833484

7,212,175

Financial Charges 2,725,916 -

-

12,020,459 7,833,484

7,212,175

Depreciation 3,231,584 3,153,924

4,065,109

Profit / (Loss) Before Taxation 8,788,875 4,679,560 3,147,066

Provision for Taxation 1,149,743 590,409

236,218 Net

Profit 7,639,132 4,090,152

2,911,848


ANANLYSIS OF SAKHI SULTAN RICE MILL (Rs. 000)

LIQUIDITY ANALYSIS:


2014 = 55917/36535 = 1.5:1

2013 = 33857/22387 = 1.5:1

Interpretation:

Current ratio indicate the amount of current assets available for repayment of current liabilities that is

way the current ratio of Sakhi Sultan Rice Mill is same 1.5 : 1 in 2014 and in 2013. It is a good

situation. It means that the current assets are used & work properly.


2014 = 55917-5582-33913/36553 = 0.44:1

2013 = 33857-3799-20644/22387 = 0.42:1

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

2013 2014

Current Ratio

Current Ratio


Interpretation:

Quick ratio is the measure of instant debt paying ability of the business. In the case of Sakhi Sultan

Rice Mill the quick ratio is 0.42 in 2013 and 0.44 in 2014. It is positive trend. This ratio shows that

the receivable of Sakhi Sultan Rice Mill are very low or less and this ratio also shows that Sakhi

Sultan Rice Mill has good debt paying ability.


2014 = 2308 /36553 = 0.06:1

2013 = 2324 /22387 = 0.1:1

0.41

0.415

0.42

0.425

0.43

0.435

0.44

0.445

2013 2014

Quick Ratio

Quick Ratio

0

0.02

0.04

0.06

0.08

0.1

0.12

2013 2014

Cash Ratio

Cash Ratio


Interpretation:



that the firm is using its cash to its best advantage. In the case of Sakhi Sultan Rice Mill, the cash ratio

is 0.06 in 2014 & 0.1 in 2013. The cash ratio is low .Its means that the firm is using its cash to its best

advantage in 2014.


2014 = 55917 - 36553 = 19354

2013 = 33857 - 22387 = 11470

Interpretation:

Working capital ratio shows the short term solvency of the business. In the case of Sakhi Sultan Rice

Mill the working capital is increasing from 11470 in 2013 to 19354 in 2014. It is a good ratio it means

that Sakhi Sultan Rice Mill the less chances of short term solvency.



2014 = (19286 / 148353) * 100 = 13%

2013 = (10245 / 78813) * 100 = 12.5%

`

0

5000

10000

15000

20000

25000

2013 2014




Interpretation:


incurred on the production of goods and expenses incurred on the finished goods? it has a great

impact on sale price and profit . in the case of Sakhi Sultan Rice Mill the Gross profit is increasing

from 12.5% in 2013 to 13% in 2014 . it is positive trend. It is increased due to decrease in cost of

good.


2014 = (14746 / 148353) * 100 = 10%

2013 = (7833 / 78813) * 100 = 9.8%

12.2

12.3

12.4

12.5

12.6

12.7

12.8

12.9

13

13.1

2013 2014

Gross Profit Ratio

Gross Profit Ratio

9.7

9.75

9.8

9.85

9.9

9.95

10

10.05

2013 2014




Interpretation:


production of goods. In the case of Sakhi Sultan Rice Mill the Operating Profit Margin is increase due

to decreased in operating expenses. It is 9.8% in 2013 &10% in 2014.


2014 = (7639 / 148353) * 100 = 5.14%

2013 = (4090 /78813) * 100 = 5.18%

Interpretation:


case of Sakhi Sultan Rice Mill the Net Profit Margin is Decreased from 15.8% in 2013 to 15.4%in

2014 due to increase in Cost of Goods & decreased in Gross Profit Margin.


2014 = 148353 / 85367 = 1.7 times

2013 = 78813/ 75005 = 1 times

Average Total Assets = (Opening Total Assets + Closing Total Assets) / 2

2014 = (72540 + 98194) /2 = 85367

2013 = (77470 + 72540) / 2 = 75005

5.12

5.13

5.14

5.15

5.16

5.17

5.18

5.19

2013 2014

Net Profit Ratio

Net Profit Ratio


Interpretation:


generate sale through the use of assets. In the Case of Sakhi Sultan Rice Mill the Total Assets

turnover ratio is increasing from 1 times in 2013 to 1.7 time in 2014. It is a positive trend. It means

that the use of assets to generate sale is increased in 2014 than in 2013.


2014 = 8788/ 85367 = 0.1 times

2013 = 4679/ 75005 = 0.06 times

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2013 2014



0

0.02

0.04

0.06

0.08

0.1

0.12

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