Proeject Finance Ratio

A Project of
Accounting & Finance
(Ratio Analysis of Firm’s Profitability;
EVIDENCES FROM TEXTILE SECTOR OF
PAKISTAN)
Submitted to:
Prof. Ahsan Ahmad
Preston University
(Lahore Campus)
Submitted by:
Abdul Majid
(MBA-Evening)
Registration: 1632-215015

In the name of the Lord Life Creating,
The wise one speech creating within the tongue,
The Lord, the giver, hand seizing
Merciful, sin forgiving, excuse accepting.
(Iranian Poet)

RATIO ANALYSIS OF FIRM’S
PROFITABILITY: EVIDENCES FROM TEXTILE SECTOR OF
PAKISTAN
Introduction:-
• Textile is a term that comes from “texere” which is a Latin word, which means “to weave”.
Textile Industry is the largest sector of Pakistan. Pakistan textile industry is the 8th
ranked industry of
Asia. The textile sector employs 40 percent of the industrial sector’s work force, which provides
livelihood to more than 10 million families. According to the International Cotton Advisory
Committee, Pakistan is the fourth largest producer of cotton and the third largest consumer of
cotton in the world. In addition, Pakistan is the world’s second largest cotton yarn exporter and third
largest cotton cloth manufacturer and exporter. Pakistan is unique as it has a self-reliant production
chain from cotton growing to ginning, spinning, weaving, processing and finishing and from fabrics
to home textiles and apparel; all have links in the textile and clothing value chains which have been
developed by Pakistan’s own industry.
The textiles sector occupies a pivotal position in Pakistan’s economy, accounting for 8 percent of
GDP with a significant potential for growth. It has the most intensive backward and forward linkages
within the wider economic chain compared to any other sector, linking agriculture from industry to
exports.
The textile industry contributes approximately 46 percent to the total output or 8.5 percent of the
country GDP.
• A cloth, especially one manufactured by weaving or knitting; a fabric.
• The textile industry is often considered the backbone of the Islamic Republic of Pakistan’s
economy.
• Pakistan’s economy relies heavily on its cotton and textile sectors.
• Leading producers of cotton include USA, China, India, Pakistan, Uzbekistan and turkey.
Both Punjab and Sindh are the major cotton growing provinces, whereas N.W.F.P is not known for
growing cotton production.
The cotton-processing and textile industries make up almost half of the country’s manufacturing
base, while cotton is Pakistan’s principal industrial crop, supplying critical income to rural
households. Altogether, the cotton-textile sectors account for 11 percent of GDP and 60 percent of
export receipts.
• Importer of Pakistan fabric are USA, EU, Gulf region, UK, Hong Kong, Japan, Korea, Saudi
Arabia, Italy, Turkey, Germany, Norway, France, Canada, Sweden, Australia, etc.
• The textile industry is primarily concerned with the production of yarn, and cloth and the
subsequent design or manufacture of clothing and their distribution.

Financial Statements:-
By doing the financial statement analysis, it will help the analyst to understand
the performance of any company. The analysis of financial statement is a study of establishing
meaningful relationship between various financial facts and figure given in financial statement. The
basic financial statement included balance sheet and income statement which is the indicating
device of profitability and financial soundness of business concern. Simple and valuable elements
have been dissected by complex figure that given in financial statement. In addition, significant
relationships are established between the elements of the same dissection. Establishing
relationships and interpretation thereof to understand the working and financial position of a firm is
called analysis of financial statement. Thus, analysis of financial statement is the procedure of
establishing and identifying the financial weakness and strengths of the company.
Meaning of Ratio Analysis: -
Ratio analysis has been view as a primary technique of the analysis of
financial statement from various aspects of business. (Brigham & Houston, 2004 p. 95) state” Ratio
Analysis involves comparisons. A company’s ratios are compared with those of other firms in the
same industry, that is, to industry average figures.” Ratio refers to the relationship expressed in
mathematical term among a set of numeral and two individual links with each other in logical way. It
is based on the assumptions that single figure may not tell us any useful information but when
expressed relative to another figure, it will definitely give us some meaningful information. Since
ratio is a mathematical relationship between two or above accounting figures, it can be expressed in
as a pure ratio, as a rate of times or as a percentage. The relationship between two and above
accounting figures or group is called financial ratio.
Ratio Analysis: -
There are two steps that ratio analysis needs to be follow. First, the calculation of
ratio has to be done. Second, the ratio has to compare with predetermined standards.
Predetermined standards can be the average ratio of industry or the same firm past ratio. When
interpreting specific firm, the calculated ratio has to compare with the predetermined standard
otherwise the analyst cannot attain any effective conclusion. There are cross section analysis, time
series analysis and combined analysis three types of different way in comparison the ratio. In cross
section analysis, it helps the analyst find out how the particular firm has performed associated with
the firm’s competitor by using the ratio of the firm to compare with the ratio of other firms in same
industry or more firm’s financial ratio at the same time. In addition, the firm also can undercover the
major operational inefficiencies by comparing the firm’s performance to compare with the top
performance of the industry. Time series analysis helps the firms to measure whether the firm is

near to the long-term goals or not by comparing the present performance with the past
performance of the firm.
Companies’ introduction
1. Nishat
Nishat Mills Limited (“the Company”) is the most modern and largest vertically
integrated textile Company in Pakistan.
The Company commenced its business as a partnership firm in 1951 and was incorporated as a
private limited
Company in 1959. Later it was listed on the Karachi, Lahore and Islamabad Stock Exchanges on 27
November 1961,
11 March 1989 and 10 August 1992 respectively. The Company’s production facilities comprise of
spinning,
Weaving, printing, dyeing, home textile and garment stitching and power generation.
Overall, the Company has 32 manufacturing units each specializing in a specific product range
located in Faisalabad, Sheikhupura, Ferozewatwan and Lahore. A major portion of the Company’s
earnings is export based. Over the the years, the Company has achieved significant geographical
diversification in its export sales mix.
The Company has a very broad base of customers for its products outside Pakistan. It has a long
working relationship with the top brands of the world such as J.K.N. International, Levis, Next,
Pincroft Dyeing, Ocean Garments, Gap, Carreman, Tommy Hilfiger, Tommy Bahamas, Crate & Barrel,
Laura Ashley, American Living, Chaps, Hugo Boss, Revman and John Lewis.
Nishat Mills Limited is also called the flagship company of the Nishat Group. Nishat Group (“the
Group”) is a leading business entity in South Asia. Its net worth makes it the largest business house
of Pakistan. The Group has grown from a cotton export house into the premier business group of the
country. Highly diversified, the Group has a presence in all the major sectors including Textiles,
Cement, Banking, Insurance, Power Generation, Hotel Business, Agriculture, Dairy, Real Estate,
Aviation and Paper Products. Showcasing its varied expertise and acumen in every facet of its
operations, the group companies hold the distinction of being among the leading players in each
sector.
2. Sapphire
1. Sapphire Group is a Pakistani industrial conglomerate largely focused on the textile
industry. Based in Lahore, it is a vertically integrated textile group, manufacturing cotton
yarn, fabric, and finished garments. Its products are exported to over 35 destinations around
the globe, and the Group employs more than 16,000 people.
In 2012, the Group had a turnover of over US $800 million, with an asset base of over US $500
million. It has the spinning capacity of 350,000 spindles, with a production capacity of 65,000 kg of
yarn per month from 6/s to 120/s, Knits dyeing and finishing and apparels unit has a capacity of
knitting 500 tons of greige fabric and 300 tons of dyed and finished fabric and producing 430,000
garments per month.
The Group has also diversified into the power generation and dairy sectors. Sapphire
Electric Company is a 234 Megawatt combined cycle plant in Muridke. Sapphire Dairies
Private Limited operates a large mechanized dairy farm based on 100 acres near

Manga, Lahore, with a herd size of 3000 and a target of 10,000 milking cows (300,000
liters per day) by 2020.
3. Gull Ahmad
The Gull Ahmed Group is a Pakistani company that includes Gull Ahmed Textile Mills, Gull Ahmed
Energy and Habib Metropolitan Bank. More recently, a chain of retail outlets has been operating
under the name "Ideas by Gull Ahmed". The group's other concerns go by the name of Swiss tex
Chemicals (Private) Limited, which is a large chemical distribution company that has the sole rights
for supplying Ciba Specialty Chemicals in Pakistan. The group has invested
in outsourcing information technology with Arwen Technologies.[2]
The Gull Ahmed Group began trading in textiles in the early 20th century. In 1953, the group decided
to enter the field of manufacturing under the name Gull Ahmed Textile Mills Limited, and was
incorporated as a privately limited company. In 1972, it was 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.
4. Kohinoor
Kohinoor Mills Limited’s vision is to achieve and then remain as the most
progressive and profitable textile organization in Pakistan. Incorporated in 1987 as a small weaving
mill, today Kohinoor Mills broadly undertakes three major businesses, weaving, dyeing and power
generation. It has, and continues to develop, a portfolio
of businesses that are major players within their respective industries. Bringing together outstanding
knowledge of customer needs with leading edge technology platforms your Company undertakes to
provide superior products to its customers. With an annual turnover of over Rs. 8.5 billion, today
Kohinoor Mills Limited employs about 1,700 employees. It aims to create superior value for
Kohinoor’s customers and stakeholders without compromising its commitment to safety,
environment and health for the communities in which it operates. Its products range is from greige
fabric to processed fabric.
5. Nagina
Nagina Group is a public corporation based in Pakistan that manufactures a wide
variety of textile products. Founded in 1972 by Inam Ellahi Shaikh and Ashan Ellahi Shaikh, it
was listed by Forbes magazine as the best-performing company with less than US$1 billion in
revenue in 2003.
The Nagina Group began as a single company, Nagina Mills Limited, established by Shaikh
Inam Ellahi and Ashan Ellahi Shaikh in 1967. Focusing on the production of cotton yarn, it
grew with the acquisition of tanneries, factories that produced shoes and ice, and Pakistan's
largest jute mill. These assets were lost, however, when East Pakistan separated from the
Pakistani Federation to become Bangladesh in 1971.
The company reformed in 1971 as the Nagina Group, consolidating its assets under a
single umbrella organization. The group currently manages Nagina Cotton Mills Limited, Ellcot
Spinning Mills Limited, and Prosperity Weaving Mills Limited. Together, the facilities hold
approximately 100,000 modern spindles, and produce forty-eight million pounds of carded
and combed yarn annually.

Nagina Group also operates three private power plants to provide electricity for its mills. The
installed capacity of its generators is 30.57 Megawatts. Excess energy is sold to other
industrial facilities in the area.
FORBES Global included the company in their year 2003 list of "Best under a billion 200"
Nagina Group is active in the spinning, weaving, energy, real estate, and trading.

Literature Review
Data related to the Textile Sector was meticulously collected. Sources of data
include books, newspapers, journals, economic magazines, research reports of various industries
annual reports and internet. A wide range of research reports on the Textile sector of the economy
have been examined. Research papers and articles from different leading institutions of the country
have been thoroughly studied.
Many studies attempt to investigate the relationship between ratio analysis level and firms
profitability. Few studies however, investigate the impact of ratio analysis on firms’ performance.
The purpose of the study is to identify the factors that affect the Performance of the Textile
Industries in Pakistan from ratio analysis. For this research we have selected some Textile Industries
like Nishat, Sapphire, Gull Ahmad, Nagina, Gadoon, and Kohinoor Industry.
Pakistan Textile industry contributes more than 50 percent to the Countries total export But, now
this time the industries are facing great decline in its growth rate. The reason of this decline is Global
recession, internal security, cost of Production, Energy crisis and declining the value of Pakistani
currency. Due to this the marketer cannot travel abroad for effectively marketing their Products
With an in-depth investigation it was found that if Govt. of Pakistan take some serious action the
Pakistan textile industry can back again on the winning track hurdles, like Govt. should Provide
subsidiary to the textile industry, Reduce the sale taxes, Provide electricity on low rates etc.
Purchasing the new Machinery or enhance the Quality of Existing Machinery and introducing the
new technology can useful for the expansion of Textile industries and the quality of Products which
is very important for the modern era.
Definitions of Ratios
1. Gross Profit Ratio
The gross margin ratio is also known as the gross profit margin or the gross
profit percentage. The gross margin ratio is computed by dividing the company's gross
profit value by its net sales value.
2. Operating Profit Ratio
Operating margin is a margin ratio used to measure a company's pricing
strategy and operating efficiency. Operating margin is a measurement of what proportion of a
company's revenue is left over after paying for variable costs of production such as wages, raw
materials, etc
3. Return on assets
ROA is a financial ratio that shows the percentage of profit a company earns
in relation to its overall resources. It is commonly defined as net income divided by
total assets. Net income is derived from the income statement of the company and is the
profit after taxes.
4. Return on sales
ROS often called the operating profit margin, is a financial ratio that calculates
how efficiently a company is at generating profits from its revenue. In other words, it

measures a company's performance by analyzing what percentage of total company revenues
are actually converted into company profits
5. Equity Ratio
The Equity Ratio is a good indicator of the level of leverage used by a company.
The Equity Ratio measures the proportion of the total assets that are financed by
stockholders, as opposed to creditors.
6. Debt/Equity Ratio
Debt/Equity Ratio is a debt ratio used to measure a company's financial
leverage, calculated by dividing a company's total liabilities by its stockholders' equity. The
D/E ratio indicates how much debt a company is using to finance its assets relative to the
amount of value represented in shareholders' equity.
7. Debt Ratio
The debt ratio is defined as the ratio of total – long-term and short-term – debt to
total assets, expressed as a decimal or percentage. It can be interpreted as the proportion of
a company's assets that are financed by debt.
8. Working Capital Ratio
The working capital ratio is the same as the current ratio. It is the
relative proportion of an entity's current assets to its current liabilities, and is intended to
show the ability of a business to pay for its current liabilities with its current assets.
9. Current Ratio
The Current Ratio is a good indicator for current assets and liabilities ups &
down to understand. To calculate it we divide current asset to current liabilities.
10.Total Asset Turnover Ratio
This ratio shows us the asset impacts on our net sales. We
calculate it to divide net sales on total assets.
11.Earnings Per Share
It means to say that how much companies share have gain during the
financial year. So, we can calculate it through equity value divide to no.
of share.
12.Dividend per Share
It means that how much dividend value received by per share. So,
declared dividend divided by no of issued share will be dividend per share.

0
10
20
30
40
50
60
70
80
90
Nishat Sapphire Gull Ahmad Gadoon Kohinoor Nagina
Gross Profit Ratio %
2015 2014 2013 2012 2011
RATIO ANALYSIS
 PROFITABILITY RATIO
Gross Profit Ratio
Gross Profit / Net Sales x 100
2015 2014 2013 2012 2011
Nishat "000" 6024138/51177517 7863774/54444091 9044485/52426030 6789191/44924101 7846447/48565144
% 11.77 14.44 17.25 15.11 16.16
Sapphire "000" 2668647/23322851 2788029/25411301 4204862/25283151 2773397/21490830 3417774/22937176
% 11.44 10.97 16.63 12.91 14.90
Gull Ahmad "000" 6094/33354 5976049/33012724 4699252/30201588 3485734/24918480 4626622/25435465
% 18.27 18.10 15.56 13.99 18.19
Gadoon "000" 1129822/23003447 1932166/20066084 2267266/18673753 1151732/13570317 2810035/15638487
% 4.91 9.63 12.14 8.49 17.97
Kohinoor "000" 1298817/7906020 1045169/7772431 1378313/8451770 918874/6261867 (94543)/5210209
% 16.43 13.45 16.31 14.67 -1.81
Nagina "000" 291991/4588787 594188/5709483 654755/4858425 432739/4025287 689244/4991956
% 6.36 10.41 13.48 10.75 13.81

0
10
20
30
40
50
60
70
80
Operating Profit %
2015 2014 2013 2012 2011
Operating Profit Ratio
Operating Profit / Net Sales x 100
2015 2014 2013 2012 2011
Nishat "000" 6134698/51177577 7585434/54444091 7974434/52426030 5842110/44924101 7012960/48565144
% 11.99 13.93 15.21 13.00 14.44
Sapphire "000" 1830159/23322851 1969130/25411301 3030120/25283151 1843347/21490830 2586086/22937176
% 7.85 7.75 11.98 8.58 11.27
Gull Ahmad "000" 2117616/33354784 2658827/33012724 2068648/30201588 1374046/24918480 2635435/25435465
% 6.35 8.05 6.85 5.51 10.36
Gadoon "000" 701200/23003447 1478787/20066084 1694085/18673753 950070/13570317 2317403/15638487
% 3.05 7.37 9.07 7.00 14.82
Kohinoor "000" 767443/7906020 432699/7772431 1592634/8451770 1037102/6261867 (592621)/5210209
% 9.71 5.57 18.84 16.56 -11.37
Nagina "000" 150504/4588787 445410/5709483 504445/4858425 329153/4025287 559844/4991956
% 3.28 7.80 10.38 8.18 11.21

Return on Sale
Net Income / Sales x 100
2015 2014 2013 2012 2011
Nishat "000" 3911925/51177577 5512552/54444091 5846853/52426030 3528567/44924101 4843912/48565144
% 7.64 10.13 11.15 7.85 9.97
Sapphire "000" 1009589/23322851 966037/25411301 2136467/25283151 1073678/21490830 1607405/22937176
% 4.33 3.80 8.45 5.00 7.01
Gull Ahmad "000" 604943/33354784 1234798/33012724 702078/30201588 (240364)/24918480 1196457/25435465
% 1.81 3.74 2.32 -0.96 4.70
Gadoon "000" (392334)/23003447 580799/20066084 1134825/18673753 648813/13570317 2156255/15638487
% -1.71 2.89 6.08 4.78 13.79
Kohinoor "000" 122977/7906020 106629/7772431 1008666/8451770 629488/6261867 (1258880)/5210209
% 1.56 1.37 11.93 10.05 -24.16
Nagina "000" 54298/4588787 297570/5709483 352202/4858425 146404/4025287 352101/4991956
% 1.18 5.21 7.25 3.64 7.05
-30.00
-25.00
-20.00
-15.00
-10.00
-5.00
0.00
5.00
10.00
15.00
20.00
Return on Sale
2015 2014 2013 2012 2011

-10
0
10
20
30
40
50
60
70
Return on Asset Ratio
2015 2014 2013 2012 2011
Return on Assets
Net Income / Total Assets x 100
2015 2014 2013 2012 2011
Nishat "000" 3911925/101140000 5512552/97048577 5846853/80634594 3528567/56626383 4843912/54088904
% 3.87 5.68 7.25 6.23 8.96
Sapphire "000" 1009589/28087804 966037/22050550 2136467/18842128 1073678/14056506 1607405/14393189
% 3.59 4.38 11.34 7.64 11.17
Gull Ahmad
"000" 604943/24943347 1234798/24277207 702078/21188930 (240364)/17718758 1196457/20404679
% 2.43 5.09 3.31 -1.36 5.86
Gadoon "000" (392334)/20548845 580799/16105422 1134825/13763802 648813/10278818 2156255/10997898
% -1.91 3.61 8.24 6.31 19.61
Kohinoor "000" 122977/6276660 106629/5987082 1008666/5860064 629488/5823301 (1258880)/5787152
% 1.96 1.78 17.21 10.81 -21.75
Nagina "000" 54298/2377522 297570/2366450 352202/2153101 146404/1852201 352101/2237347
% 2.28 12.57 16.36 7.90 15.74

Return on Stoke Holder's Equity
Net Income / Total Equity x 100
2015 2014 2013 2012 2011
Nishat "000" 3911925/76142823 5512552/68589176 5846853/58917035 3528567/37762749 4843912/35393959
% 5.14 8.04 9.92 9.34 13.69
Sapphire "000" 1009589/14370171 966037/13340615 2136467/11411812 1073678/8327121 1607405/7520937
% 7.03 7.24 18.72 12.89 21.37
Gull Ahmad
"000" 604943/7169472 1234798/6659903 702078/5428502 (240364)/4472509 1196457/4712873
% 8.44 18.54 12.93 -5.37 25.39
Gadoon "000" (392334)/6817519 580799/6499577 1134825/6167884 648813/5208840 2156255/4794402
% -5.75 8.94 18.40 12.46 44.97
Kohinoor "000" 122977/1983489 106629/1543982 1008666/1306892 629488/284873 (1258880/589334)
% 6.20 6.91 77.18 220.97 213.61
Nagina "000" 54298/1384686 297570/1407542 352202/1219222 146404/972811 352101/903057
% 3.92 21.14 28.89 15.05 38.99
-50.00
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
2015 2014 2013 2012 2011
Return on Equity

 LIQUIDITY RATIO
Current Ratio
Current Assets / Current Liabilities
2015 2014 2013 2012 2011
Nishat "000" 24190444/19167495 28774992/21553219 27204560/18068412 19847671/15126751 18441959/15322349
1.26 1.34 1.51 1.31 1.20
Sapphire "000" 9207109/7800847 8324019/5944456 9203715/6188485 6402105/4454624 7139510/5633272
1.18 1.40 1.49 1.44 1.27
Gull Ahmad
"000" 15728300/14971853 8381303/15005632 13921865/13255764 10754152/6964606 13616576/13194546
1.05 0.56 1.05 1.54 1.03
Gadoon "000" 10496486/12734414 8717727/8910484 7002605/7049549 5380582/4673192 4194133/5828677
0.82 0.98 0.99 1.15 0.72
Kohinoor "000" 2325650/2206791 2444826/2047454 2402673/1804023 2243136/2115791 2413794/6345402
1.05 1.19 1.33 1.06 0.38
Nagina "000" 1350263/502913 1347836/506375 1175587/518189 949107/566725 1332945/1005055
2.68 2.66 2.27 1.67 1.33
0
0.5
1
1.5
2
2.5
3
Current Ratio
2015 2014 2013 2012 2011

Net Working Capital Ratio
Net Sales / Current Assets - Current Liabilities
2015 2014 2013 2012 2011
Nishat "000"
24190444-
19167495
28774992-
21553219
27204560-
18068412
19847671-
15126751
18441959-
15322349
NWC 5,022,949 7,221,773 9,136,148 4,720,920 3,119,610
Sales / NWC 51177577/5022949 54444091/7221773 52426030/9136148 44924101/4720920 48565144/3119610
NWC Ratio 10.19 7.54 5.74 9.52 15.57
Sapphire "000" 9207109-7800847 8324019-5944456 9203715-6188485 6402105-4454624 7139510-5633272
NWC 1,406,262 2,379,563 3,015,230 1,947,481 1,506,238
Sales /NWC 23322851/1406262 25411301/2379563 25283151/3015230 21490830/1947481 22937176/1506238
NWC Ratio 16.58 10.68 8.39 11.04 15.23
Gull Ahmad
"000"
15728300-
14971853 8381303-15005632
13921865-
13255764 10754152-6964606
13616576-
13194546
NWC 756,447 -6,624,329 666,101 3,789,546 422,030
Sales /NWC 33354784/756447
33012724/-
6624329 30201588/666101 24918480/3789546 25435465/422030
NWC Ratio 44.09 -4.98 45.34 6.58 60.27
Gadoon "000"
10496486-
12734414 8717727-8910484 7002605-7049549 5380582-4673192 4194133-5828677
NWC -2,237,928 -192,757 -46,944 707,390 -1,634,544
Sales /NWC
23003447/-
2237928 20066084/-192757 18673753/-46944 13570317/707390
15638487/-
1634544
NWC Ratio -10.28 -104.10 -397.79 19.18 -9.57
Kohinoor "000" 2325650-2206791 2444826-2047454 2402673-1804023 2243136-2115791 2413794-6345402
NWC 118,859 397,372 598,650 127,345 -3,931,608
Sales /NWC 7906020/118859 7772431/397372 8451770/598650 6261867/127345 5210209/-3931608
NWC Ratio 66.52 19.56 14.12 49.17 -1.33
Nagina "000" 1350263-502913 1347836-506375 1175587-518189 949107-566725 1332945-1005055
NWC 847,350 841,461 657,398 382,382 327,890
Sales /NWC 4588787/847350 5709483/841461 4858425/657398 4025287/382382 4991956/327890
NWC Ratio 5.42 6.79 7.39 10.53 15.22
-600.00
-400.00
-200.00
0.00
200.00
Net Working Capital Ratio
2015 2014 2013 2012 2011

Total Assets Turnover Ratio
Net Sales / Total Assets
2015 2014 2013 2012 2011
Nishat "000" 51177577/101140000 54444091/97048577 52426030/80634594 44924101/56626383 48565144/54088904
0.51 0.56 0.65 0.79 0.90
Sapphire "000" 23322851/28087804 25411301/22050550 25283151/18842128 21490830/14056506 22937176/14393189
0.83 1.15 1.34 1.53 1.59
Gull Ahmad
"000" 33354784/24943340 33012724/24277207 30201588/21188930 24918480/17718758 25435465/20404679
1.34 1.36 1.43 1.41 1.25
Gadoon "000" 23003447/20548845 20066084/16105422 18673753/13763802 13570317/10278818 15638487/10997898
1.12 1.25 1.36 1.32 1.42
Kohinoor "000" 7906020/6276660 7772431/5987082 8451770/5860064 6261867/5823301 5210209/5787152
1.26 1.30 1.44 1.08 0.90
Nagina "000" 4588787/2377522 5709483/2366450 4858425/2185275 4025287/1852201 4991956/2237347
1.93 2.41 2.22 2.17 2.23
0
0.5
1
1.5
2
2.5
3
Total Asset Turnver Ratio
2015 2014 2013 2012 2011

 LEAVERAGE RATIO
Debt Ratio
Total Liabilities / Total Assets
2015 2014 2013 2012 2011
Nishat "000" 24997177/101140000 28459401/97048577 21717559/80634594 18863634/56626383 18694945/54088904
0.25 0.29 0.27 0.33 0.35
Sapphire "000" 13717633/28087804 8709935/22050550 7430316/18842128 5729385/14056506 6872252/14393189
0.49 0.39 0.39 0.41 0.48
Gull Ahmad
"000" 17773875/24943340 17617304/24277207 15760428/21188930 13246249/17718758 15691806/20404679
0.71 0.73 0.74 0.75 0.77
Gadoon "000" 13731326/20548845 9605845/16105422 7595918/13763802 5069978/10278818 6203496/10997898
0.67 0.60 0.55 0.49 0.56
Kohinoor "000" 4293170/6276660 4443100/5987082 4553171/5860064 5538428/5823301 6376486/5787152
0.68 0.74 0.78 0.95 1.10
Nagina "000" 992835/2377522 958907/2366450 933879/2185275 879390/1852201 1334290/2237347
0.42 0.41 0.43 0.47 0.60
0.00
0.20
0.40
0.60
0.80
1.00
1.20
Debt Ratio
2015 2014 2013 2012 2011

Equity Ratio
Total Equity / Total Assets
2015 2014 2013 2012 2011
Nishat "000" 76142823/101140000 68589176/97048577 58917035/80634594 37762749/56626383 35393959/54088904
0.75 0.71 0.73 0.67 0.65
Sapphire "000" 14370171/28087804 13340615/22050550 11411812/18842128 8327121/14056506 7520937/14393189
0.51 0.61 0.61 0.59 0.52
Gull Ahmad
"000" 7169472/24943347 6659903/24277207 5428502/21188930 4472509/17718758 4712873/20404679
0.29 0.27 0.26 0.25 0.23
Gadoon "000" 6817519/20548845 6499577/16105422 6167884/13763802 5208840/10278818 4794402/10997898
0.33 0.40 0.45 0.51 0.44
Kohinoor "000" 1983489/6276660 1543982/5987082 1306892/5860064 284873/5823301 (589334)/5787152
0.32 0.26 0.22 0.05 -0.10
Nagina "000" 1384686/2377522 1407542/2366450 1219222/2185275 972811/1852201 903057/2237347
0.58 0.59 0.56 0.53 0.40
-0.20
-0.10
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
Equity Ratio
2015
2014
2013
2012
2011

 VALUATION & GROWTH RATIO
Earnings per Share Rs.
2015 11.13 51.49 2.65 (14.59) 2.42 4.96
2014 15.68 48.97 5.40 24.78 2.09 27.18
2013 16.63 106.65 3.21 48.42 19.81 31.99
2012 10.04 53.46 (1.12) 27.68 12.36 13.37
2011 13.78 80.04 5.57 92.00 (27.42) 32.16
Dividend per share Rs.
2015 4.50 20.00 1.50 0.00 - 3.50
2014 4.00 20.00 1.50 5.00 - 7.00
2013 4.00 21.00 0.00 12.50 - 10.0
2012 3.50 15.00 0.00 7.50 - 5.00
2011 3.30 15.00 0.00 10.00 - 7.00
-40
-20
0
20
40
60
80
100
120
Earning Per Share
2015 2014 2013 2012 2011
0
20
40
60
80
100
Dividend Per Share
2015 2014 2013 2012 2011

Interpretation of Ratios Analysis
First of all I have collected all type of data from annual report of analyzed
organizations. Sources of data include books, newspapers, journals, economic magazines, research
reports of various industries annual reports and internet. A wide range of research reports on the
Textile sector of the economy have been examined. Research papers and articles from different
leading institutions of the country have been thoroughly studied.
Many studies attempt to investigate the relationship between ratio analysis level and firms
profitability.
Then, I have calculated profitability ratios from annual reports of last five years of Nishat Group,
Sapphire Group, Gull Ahmad, Gadoon Textile, Kohinoor and Nagina Group.
Then data collect from last five years annual reports balance sheets and profit and loss accounts.

Horizontal Analysis
Nishat Group
Balance Sheet
All Amounts in thousand
For Year 2015 2014 2013 2012 2011 2010
Liabilities
Equity 76,142,823 68,589,176 58,917,035 37,762,749 35,393,959 31,376,313
Non-Current Liabilities 5,829,682 6,906,182 3,649,147 3,736,883 3,372,596 4,237,586
Current Liabilities 19,167,495 21,553,219 18,068,412 15,126,751 15,322,349 10,568,415
Total Liabilities 101,140,000 97,048,577 80,634,594 56,626,383 54,088,904 46,182,314
Assets
Non-Current Asset 76,949,556 68,273,585 53,430,034 36,778,712 35,646,945 34,449,386
Current Assets 24,190,444 28,774,992 27,204,560 19,847,671 18,441,959 11,732,928
Total Assets 101,140,000 97,048,577 80,634,594 56,626,383 54,088,904 46,182,314
Horizontal Analysis of Balance Sheet
All Results in %
For Year 2015 2014 2013 2012 2011 2010
Liabilities
Equity 243 219 188 120 113 100%
Non-Current Liabilities 138 163 86 88 80 100%
Current Liabilities 181 204 171 143 145 100%
Total Liabilities 169 192 147 127 126 100%
Assets
Non-Current Asset 223 198 155 107 103 100%
Current Asset 206 245 232 169 157 100%
Total Asset 219 210 175 123 117 100%

Sapphire Group
Balance Sheet
For Year 2015 2014 2013 2012 2011 2010
Liabilities
Equity 14,370,171,153 13,340,615,177 11,411,812,025 8,327,121,318 7,520,937,235 5,992,070,938
Non-Current Liabilities 5,916,786,387 2,765,478,891 1,241,830,157 1,274,761,035 1,238,980,020 904,899,294
Current Liabilities 7,800,847,121 5,944,456,219 6,188,485,990 4,454,624,352 5,633,272,583 4,682,996,154
Total Liabilities 28,087,804,661 22,050,550,287 18,842,128,172 14,056,506,705 14,393,189,838 11,579,966,386
Assets
Non-Current Asset 18,880,695,250 13,726,530,636 9,638,413,043 7,654,401,183 7,253,679,537 6,454,265,721
Current Assets 9,207,109,411 8,324,019,651 9,203,715,129 6,402,105,522 7,139,510,301 5,125,700,665
Total Assets 28,087,804,661 22,050,550,287 18,842,128,172 14,056,506,705 14,393,189,838 11,579,966,386
All Results in %
For Year 2015 2014 2013 2012 2011 2010
Liabilities
Equity 240 223 190 139 126 100%
Total Liabilities 100%
Assets
Current Asset 180 162 180 125 139 100%
Total Asset 243 190 163 121 124 100%

Gull Ahmad
Balance Sheet (Rs. 000)
For Year 2015 2014 2013 2012 2011 2010
Liabilities
Equity 7,169,472 6,659,903 5,428,502 4,472,509 4,712,873 3,595,765
Current Liabilities 14,971,853 15,005,632 13,255,764 10,851,954 13,194,546 8,574,679
Total Liabilities 24,943,347 24,277,207 21,188,930 17,718,758 20,404,679 14,599,691
Assets
Non-Current Asset 9,215,047 15,895,904 7,267,065 6,964,606 6,788,103 6,249,091
Current Assets 15,728,300 8,381,303 13,921,865 10,754,152 13,616,576 8,350,600
Total Assets 24,943,347 24,277,207 21,188,930 17,718,758 20,404,679 14,599,691
All Results in %
For Year 2015 2014 2013 2012 2011 2010
Liabilities
Equity 199 185 151 124 131 100%
Total Liabilities 100%
Assets
Current Asset 188 100 167 129 163 100%
Total Asset 171 166 145 121 140 100%

Gadoon
Balance Sheet (Rs. 000)
For Year 2015 2014 2013 2012 2011 2010
Liabilities
Equity 6,817,519 6,499,577 6,167,884 5,208,840 4,794,402 2,802,209,693
Non-Current Liabilities 996,912 695,361 546,369 396,786 374,819 916,020,595
Current Liabilities 12,734,414 8,910,484 7,049,549 4,673,192 5,828,677 2,827,803,765
Total Liabilities 20,548,845 16,105,422 13,763,802 10,278,818 10,997,898 6,546,034,053
Assets
Non-Current Asset 10,052,359 7,387,695 6,761,197 4,898,236 6,803,765 2,804,357,812
Current Assets 10,496,486 8,717,727 7,002,605 5,380,582 4,194,133 3,741,676,511
Total Assets 20,548,845 16,105,422 13,763,802 10,278,818 10,997,898 6,546,034,323
All Results in %
For Year 2015 2014 2013 2012 2011 2010
Liabilities
Equity 0.24 0.23 0.22 0.19 0.17 100%
Non-Current Liabilities 0.11 0.08 0.06 0.04 0.04 100%
Current Liabilities 0.45 0.32 0.25 0.17 0.21 100%
Total Liabilities 0.31 0.25 0.21 0.16 0.17 100%
Assets
Non-Current Asset 0.36 0.26 0.24 0.17 0.24 100%
Current Asset 0.28 0.23 0.19 0.14 0.11 100%
Total Asset 0.31 0.25 0.21 0.16 0.17 100%

Kohinoor Textile
Balance Sheet
For Year 2015 2014 2013 2012 2011 2010
Liabilities
Equity 1,983,489,641 1,543,982,654 1,306,892,943 284,873,254 -589,334,282 935,665,146
Non-Current Liabilities 2,086,378,586 2,395,645,613 2,749,148,373 3,422,637,034 31,084,682 438,910,677
Current Liabilities 2,206,791,807 2,047,454,417 1,804,023,472 2,115,791,184 6,345,402,112 7,317,407,733
Assets
Non-Current Asset 3,951,009,847 3,542,255,861 3,457,391,695 3,580,165,363 3,373,357,937 5,491,985,554
Current Assets 2,325,650,187 2,444,826,823 2,402,673,093 2,243,136,109 2,413,794,575 3,199,998,002
Total Assets 6,276,660,034 5,987,082,684 5,860,064,788 5,823,301,472 5,787,152,512 8,691,983,556
All Results in %
For Year 2015 2014 2013 2012 2011 2010
Liabilities
Equity 211.99 165.01 139.68 30.45 -62.99 100%
Assets
Current Asset 72.68 76.40 75.08 70.10 75.43 100%
Total Asset 72.21 68.88 67.42 67.00 66.58 100%

Nagina Group
Balance Sheet
For Year 2015 2014 2013 2012 2011 2010
Liabilities
Equity 1,384,686,918 1,407,542,692 1,219,222,581 972,811,602 903,057,405 662,240,339
Current Liabilities 502,913,143 506,375,067 518,189,819 566,725,768 1,005,055,593 333,442,981
Assets
Non-Current Asset 1,027,259,006 1,018,613,429 1,009,687,244 903,094,332 904,402,681 754,338,200
Current Assets 1,350,263,173 1,347,836,573 1,175,587,806 949,107,612 1,332,945,148 501,502,367
Total Assets 2,377,522,179 2,366,450,002 2,185,275,050 1,852,201,944 2,237,347,829 1,255,840,567
All Results in %
For Year 2015 2014 2013 2012 2011 2010
Liabilities
Equity 209.09 212.54 184.11 146.90 136.36 100%
Assets
Current Asset 269.24 268.76 234.41 189.25 265.79 100%
Total Asset 189.32 188.44 174.01 147.49 178.16 100%

VERTICAL ANALYSIS
Nishat Group
Income Statement
All Amount in "000"
For year 2015 2014 2013 2012 2011
Sales 51,177,577 54,444,091 52,426,030 44,924,101 48,565,144
Less: C.G.S. 45,153,439 46,580,317 43,381,545 38,134,910 40,718,697
Gross Profit 6,024,138 7,863,774 9,044,485 6,789,191 7,846,447
Less: Selling Expense 3,894,095 3,931,381 3,809,153 3,630,766 3,278,472
Rem. Balance 2,130,043 3,932,393 5,235,332 3,158,425 4,567,975
Add: Other Income 4,004,655 3,653,041 2,739,102 2,683,685 2,444,985
Operating Profit 6,134,698 7,585,434 7,974,434 5,842,110 7,012,960
Less: Finance Cost 1,744,773 1,609,882 1,617,581 1,760,543 1,601,048
Profit Before Tax 4,389,925 5,975,552 6,356,853 4,081,567 5,411,912
Less: Taxation Cost 478,000 463,000 510,000 553,000 568,000
Profit After Tax 3,911,925 5,512,552 5,846,853 3,528,567 4,843,912
Vertical Analysis
All Results in %
For year 2015 2014 2013 2012 2011
Sales 100% 100% 100% 100% 100%
Cost of Goods Sold 88.23 85.56 82.75 84.89 83.84
Gross Profit 11.77 14.44 17.25 15.11 16.16
Selling Expense 7.61 7.22 7.27 8.08 6.75
Rem. Balance 4.16 7.22 9.99 7.03 9.41
Other Income 7.83 6.71 5.22 5.97 5.03
Profit Before Tax 8.58 10.98 12.13 9.09 11.14
Taxation Cost 0.93 0.85 0.97 1.23 1.17
Profit After Tax 7.64 10.13 11.15 7.85 9.97

Sapphire Group
Income Statement
Rupees
For year 2015 2014 2013 2012 2011
Sales 23,322,851,055 25,411,301,753 25,283,151,486 21,490,830,237 22,937,176,131
Less: C.G.S. 20,654,203,272 22,623,272,169 21,078,288,927 18,717,432,281 19,519,401,987
Gross Profit 2,668,647,783 2,788,029,584 4,204,862,559 2,773,397,956 3,417,774,144
Less: Selling
Expense 1,457,644,716 1,342,701,607 1,569,183,023 1,337,898,858 1,283,348,913
Rem. Balance 1,211,003,067 1,445,327,977 2,635,679,536 1,435,499,098 2,134,425,231
Add: Other Income 619,156,155 523,802,513 394,441,259 407,848,389 451,661,230
Operating Profit 1,830,159,222 1,969,130,490 3,030,120,795 1,843,347,487 2,586,086,461
Profit Before Tax 1,157,814,936 1,253,361,767 2,365,969,151 1,129,942,224 1,774,035,028
Less: Taxation Cost 148,225,036 287,324,745 229,501,664 56,263,512 166,629,959
Profit After Tax 1,009,589,900 966,037,022 2,136,467,487 1,073,678,712 1,607,405,069
Vertical Analysis
All Results in %
For year 2015 2014 2013 2012 2011
Sales 100% 100% 100% 100% 100%
Gross Profit 11.44 10.97 16.63 12.91 14.90
Selling Expense 6.25 5.28 6.21 6.23 5.60
Rem. Balance 5.19 5.69 10.42 6.68 9.31
Other Income 2.65 2.06 1.56 1.90 1.97
Taxation Cost 0.64 1.13 0.91 0.26 0.73
Profit After Tax 4.33 3.80 8.45 5.00 7.01

Gull Ahmad
Income Statement
Rupees in "000"
For year 2015 2014 2013 2012 2011
Sales 33,354,784 33,012,724 30,201,588 24,918,480 25,435,465
Less: C.G.S. 27,260,395 27,036,675 25,502,336 21,432,746 20,808,843
Gross Profit 6,094,389 5,976,049 4,699,252 3,485,734 4,626,622
Rem. Balance 1,774,521 2,423,272 2,030,090 1,207,429 2,610,504
Add: Other Income 343,095 235,555 38,558 166,617 24,931
Profit Before Tax 783,327 1,495,977 841,128 -1,417 1,537,454
Profit After Tax 604,943 1,234,798 702,078 -240,364 1,196,457
Vertical Analysis
All Results in %
For year 2015 2014 2013 2012 2011
Sales 100% 100% 100% 100% 100%
Gross Profit 18.27 18.10 15.56 13.99 18.19
Selling Expense 12.95 10.76 8.84 9.14 7.93
Rem. Balance 5.32 7.34 6.72 4.85 10.26
Other Income 1.03 0.71 0.13 0.67 0.10
Finance Cost 4.00 3.52 4.06 5.52 4.32
Profit Before Tax 2.35 4.53 2.79 -0.01 6.04
Taxation Cost 0.53 0.79 0.46 0.96 1.34
Profit After Tax 1.81 3.74 2.32 -0.96 4.70

Gadoon
Income Statement
Rupees in "000"
For year 2015 2014 2013 2012 2011
Sales 23,003,447 20,066,084 18,673,753 13,570,317 15,638,487
Less: C.G.S. 21,873,625 18,133,918 16,406,487 12,418,585 12,828,452
Gross Profit 1,129,822 1,932,166 2,267,266 1,151,732 2,810,035
Less: Selling Expense 619,002 607,534 646,352 468,428 596,267
Rem. Balance 510,820 1,324,632 1,620,914 683,304 2,213,768
Add: Other Income 190,380 154,155 73,171 266,766 103,635
Operating Profit 701,200 1,478,787 1,694,085 950,070 2,317,403
Less: Finance Cost 791,481 739,638 434,061 295,604 147,806
Profit Before Tax -90,281 739,149 1,260,024 654,466 2,169,597
Profit After Tax -392,334 580,799 1,134,825 648,813 2,156,255
Vertical Analysis
All Results in %
For year 2015 2014 2013 2012 2011
Sales 100% 100% 100% 100% 100%
Gross Profit 4.91 9.63 12.14 8.49 17.97
Selling Expense 2.69 3.03 3.46 3.45 3.81
Rem. Balance 2.22 6.60 8.68 5.04 14.16
Other Income 0.83 0.77 0.39 1.97 0.66
Finance Cost 3.44 3.69 2.32 2.18 0.95
Profit Before Tax -0.39 3.68 6.75 4.82 13.87
Taxation Cost 1.31 0.79 0.67 0.04 0.09
Profit After Tax -1.71 2.89 6.08 4.78 13.79

Nagina
Income Statement
Rupees
For year 2015 2014 2013 2012 2011
Sales 4,588,787,945 5,709,483,886 4,858,425,674 4,025,287,140 4,991,956,237
Less: C.G.S. 4,296,796,234 5,115,295,745 4,203,670,231 3,592,547,529 4,302,711,516
Gross Profit 291,991,711 594,188,141 654,755,443 432,739,611 689,244,721
Rem. Balance 142,048,976 437,614,051 500,031,769 316,336,859 549,591,113
Add: Other Income 8,455,985 7,796,164 4,413,394 12,816,920 10,253,272
Profit Before Tax 90,206,355 361,435,205 422,249,025 200,010,243 421,921,400
Less: Taxation Cost 35,907,627 63,864,520 70,046,059 53,606,046 69,820,334
Profit After Tax 54,298,728 297,570,685 352,202,966 146,404,197 352,101,066
Vertical Analysis
All Results in %
For year 2015 2014 2013 2012 2011
Sales 100% 100% 100% 100% 100%
Gross Profit 6.36 10.41 13.48 10.75 13.81
Selling Expense 3.27 2.74 3.18 2.89 2.80
Rem. Balance 3.10 7.66 10.29 7.86 11.01
Other Income 0.18 0.14 0.09 0.32 0.21
Finance Cost 1.31 1.47 1.69 3.21 2.76
Taxation Cost 0.78 1.12 1.44 1.33 1.40
Profit After Tax 1.18 5.21 7.25 3.64 7.05

Kohinoor
Income Statement
Rupees
For year 2015 2014 2013 2012 2011
Sales 7,906,020,841 7,772,431,497 8,451,770,781 6,261,867,722 5,210,209,429
Less: C.G.S. 6,607,203,773 6,727,262,092 7,073,457,332 5,342,992,987 5,304,752,999
Gross Profit 1,298,817,068 1,045,169,405 1,378,313,449 918,874,735 -94,543,570
Rem. Balance 581,439,813 308,932,603 387,589,417 192,623,229 -783,462,983
Add: Other Income 186,003,744 123,766,595 1,205,045,128 844,479,690 190,841,424
Operating Profit 767,443,557 432,699,198 1,592,634,545 1,037,102,919 -592,621,559
Profit Before Tax 239,323,170 54,089,429 1,087,211,849 689,070,687 -1,215,276,966
Less: Taxation Cost 116,346,078 -52,540,332 78,545,167 59,582,169 43,603,916
Profit After Tax 122,977,092 106,629,761 1,008,666,682 629,488,518 -1,258,880,882
Vertical Analysis
All Results in %
For year 2015 2014 2013 2012 2011
Sales 100% 100% 100% 100% 100%
Gross Profit 16.43 13.45 16.31 14.67 -1.81
Selling Expense 9.07 9.47 11.72 11.60 13.22
Rem. Balance 7.35 3.97 4.59 3.08 -15.04
Other Income 2.35 1.59 14.26 13.49 3.66
Finance Cost 6.68 4.87 5.98 5.56 11.95
Profit Before Tax 3.03 0.70 12.86 11.00 -23.32
Taxation Cost 1.47 -0.68 0.93 0.95 0.84
Profit After Tax 1.56 1.37 11.93 10.05 -24.16
Conclusion
From above working we have realize that our 50% of employment depend on Pakistan textile
sector. Our whole manufactured fabric export to foreign countries major, USA, UK, EU, CA, Gulf etc. .
We have analyzed ratios of six main textile industries of Pakistan. We can take a review about
organization growth through ratios analysis and horizontal & vertical analysis of Balance sheets and profit
and loss accounts. According to my observation Nishat and Sapphire group are better in textile sector of
Pakistan.
Their working performance is better than over all Pakistan textile sector because they use their personal
power energy sources like, Electric power plants. Their profitability’s are high from all over textile units.
These pay a vital role in textile sector of Pakistan.
Their asset and equity turnover also rise due to their shareholders attractiveness for profitability.

Proeject Finance Ratio

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