This document analyzes the financial statements of Gul Ahmed Textile Mills Ltd, a leading textile company in Pakistan, for the years 2014 and 2015. It calculates various financial ratios to evaluate the company's liquidity, profitability, activity, leverage, and market value. Key findings are that the company's current and quick ratios decreased slightly from 2014 to 2015, indicating weaker liquidity, while debt ratios increased, signaling rising financial risk. Earnings per share also declined over this period.

1. A B D U L K A R E E M
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A F S …
Analysis Of
Gul Ahmed Textile Mills Ltd ..

2. Reasons
 To know about textile industry
 Famous Pakistani brand in textile industry
To be aware about this industry's role in Pakistan
economy

3. Objectives
To understand, analyze and interpret the concepts of
financial statement analysis into practical work.
To enhance our analytical skills with respect to financial
statements
To know the financial position of Gul Ahmed Textile
Mills Ltd for past two years

4. Statutory Requirement’s
 International Financial Reporting Standards (IFRS)
 International Accounting Standards Board (IASB) as are
notified under the Companies Ordinance, 1984, provisions
of and directives issued under the Companies Ordinance,
1984.
 Directives issued by the SECP differ with the
requirements of IFRS, the requirements of the Companies
Ordinance, 1984 or the directives issued by the SECP
shall prevail .

5. Standards which Company Follows
 IAS 8 - Accounting Policies, Changes in Accounting
Estimates and Errors (IAS 8). Accordingly, the
Company has presented balance sheet as at the
beginning of the earliest comparative period i.e.,
January 01, 2012, and related notes in accordance with
requirement of IAS 1 “Presentation of Financial
Statements (Revised)”.
 IFRS 13 – Fair Value Measurement
 IAS 19 – Employee Benefits – (Amendment) - Defined
Benefit Plans: Employee Contributions Improvements
to Accounting Standards Issued by the IASB

6. Standards which Company Follows
 IAS 39 - Recognition and Measurement” at the time of purchase of
financial assets and re-evaluates this classification on a regular basis. The
financial assets of the Company are categorized as follows:
 At fair value through profit or loss
 Loans and receivables
 Held to maturity
 Available for sale

7. Standards which Company Follows
 IFRS 10 – Consolidated Financial Statements
 IFRS 11 – Joint Arrangements
 IFRS 12 – Disclosure of Interests in Other Entities

8. Standards which Company Follows
 IFRS 13 Fair Value Measurement - Scope of paragraph 52
(portfolio exception)
 IAS16 Property, Plant and Equipment and
 IAS 38 Intangible Assets – Revaluation method –
proportionate restatement of accumulated depreciation /
amortisation
 IAS 24 Related Party Disclosures - Key management
personnel
 IAS 40 Investment Property - Interrelationship between
IFRS 3 and IAS 40 (ancillary services)

9. Introduction
 Pak Suzuki Motor Company is a Pakistani affiliate of
Japanese automaker Suzuki.
 It is the Pakistani assembler and distributor Company of
cars manufactured by Suzuki.
 Most vehicles are produced and sold by Pak suzuki
including the Mehran ,Bolan, Ravi , Cultus and Swift.
 No vehicle assembled by Pak suzuki offers airbags to
date.

10.  Gul Ahmed is one of the leading textile set-ups in
Asia offering fine woven fabric products which
represent a delightful blend of old traditions of every
corner of the world.

11. History
 The firm was founded in September 1982 .
 There was a joint venture between the govt: of Pakistan
and Suzuki Motor Japan.
 Suzuki originally owned 25% of the stock, and have
gradually increased their holding; they now own
73.09%.
 Pak-Suzuki was a joint venture between the semi
governmental Pakistan Automobile Corporation
(PACO),

12. Continue…
 Pak Suzuki is the market leader in Pakistan Automobile
Market by having more than 60%(December, 2011) of
market share
 It also provide other services like Suzuki Finance and
Suzuki Insurance, Pak Suzuki also deals in Pak Suzuki
Certified Used Cars.
 Cars built by Suzuki Pakistan often lack essential features
which are standard in other cars, such as airbags and rear
seat belts.
 the end of 2012 Suzuki Mehrans have been equipped with
EFI .

13. Different Models
 Suzuki FX:
 Production was discontinued and Suzuki Mehran
was launched as a replacement in 1989
 Suzuki Mehran: ( Maruti 800 in India and Nepal),
 1989 to date, renamed Mehran in 1992.
 Pakistan is the only country where it remains in production to date.
 It was discontinued in the European and Japanese markets in 1988.
 The Mehran received a basic EfI Engine in July 2012.

14. Continue…
 Suzuki Alto: (2000 to 2012).
 The engine was same as the locally manufactured Suzuki
Potohar .
 Fuel ignition system was a more modern As Suzuki
potohar .
 Alto has stopped as of June 16, 2012.
 Suzuki Cultus : (2000 to date).
 Suzuki Cultus was launched in 2000 as a successor to
the popular Suzuki Khyber.

15. Continue…
 Suzuki Swift: (2010 to date)
 Swift has been launched by Pak Suzuki in 2010 after
being retired in all other countries.
 It uses the same engine which liana has.

16. Model range in 2 Wheels
 Suzuki Sprinter ECO:
 110cc Basic features bike with EURO 2 engine technology.
 Suzuki Sprinter Standard:
 Upgrade model of Sprinter ECO.
 Suzuki Raider:
 110cc bike with EURO 2 engine technology. Production started
in the 4th Quarter of 2012.

17. Continue…
 Suzuki GD-110:
 110cc bike with EURO 2 engine technology. Currently being
imported from China.
 Suzuki GD-110S:
 110cc bike with EURO 2 engine technology with electric start
system. Currently being imported from China in CKD form.
(Deluxe Model of GD-110) Self Start and Alloy RIM. This is basic
difference between 110 and 110S.
 Suzuki GS-150:
 150cc Bike. Most powerful engined bike manufactured locally with
electric start system.It is one of the most selling bike in Pakistan.

18. Auditors’ Opinion
Year Opinion Auditing firm Date
2014 Qualified Kreston Hyder
Bhimji & Co.
Sept 27, 2014
2015 Unqualified Kreston Hyder
Bhimji & Co.
Sept 22, 2015

20. RATIO ANALYSIS
 Liquidity Ratios
 Profitability ratios
 Activity Ratios
 Leverage Ratios
 Market value ratios

21. Liquidity Ratios
2014 2015
Current Ratio 1.06 1.05
Quick Ratio 0.20 0.24
Net working capital Rs/-890,272,000 Rs/-756,447,000

22. Interpretation of liquidity ratio
 Current ratio
 Current ratio in 2015(1.05:2) is slightly decrease from 2014(1.06:2) this
change is occur due to decrease in current asset included (Stores, spare parts
and loose tools, Stock-in- trade ,Loans and advances) in 2015 similiarily
small decrease in current liabilities .
 Current ratio in both year is still away from the ideal current ratio (2:1).
that means companies liquidity position is not good .

25. Interpretation of liquidity ratio
 Working Capital
 Working Capital shows the ability of the firm to meet its current
liabilities from its current assets. Working capital in 2014
(890,272,000) slightly high as compared to 2015(756,447,000)
working capital because current asset in 2015 but current liabilities are
not decrease in the same portion as current asset due to this working
capital are decrease in 2015

26. Quick Ratio
 Quick ratio of the company is slightly increase in
2015(o.24:1) as compared to 2014(0.20:1) this is
because inventory in 2014 current asset cover a large
portion so amount of current asset decrease largely
there fore quick ratio decrease in 2014.
 Quick ratio in 2015 is increase because both current
asset and current liabilities are decrease but current
asset are decrease very small as compare to liabilities
so quick ratio are increase.

28. Activity Ratios
2014 2015
Inventory Turnover
Inventory turnover
days
A/R Turnover
A/R Turnover in days
A/P Turnover
A/P Turnover in days

29. 2014 2015
Debt to Assets Ratio
Debt on Equity Ratio

30. Market Value Ratios
2014 2015
Earning per share
Reason for Decrease in EPS