3. 3
DECLARATION
We hereby declare that this project report entitled “Ration analysis of Nishat and Crescent
mills” is written by us and is our own effort and that no part has been copied and taken from any
other source.
Submit by Signature with Date
Aroona arif
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4. 4
DEDICATION
We hereby dedicate that this project report entitled “RATIO ANALYSIS OF
NISHAT AND CRESCENT MILLS” to our parents..
ACKNOWLEDGEMENT
This project document is submitted at University of Central Punjab, Faisalabad Campus. We
have read the report and confirm that this report meets the minimum requirements for the degree
of Associate degree program in IT (ADP-IT).
The project is completed through a lot of efforts and hard-work. However, it would not have been
possible without the kind support and help of our teacher and the institute. It would like to extend
our sincere thanks to them. It is highly indebted to the University Of Central Punjab for their
guidance and constant supervision as well as for providing necessary information regarding the
project and also for their support in completing the project. We would like to express my gratitude
towards my parents and our project in-charge “SIR Toheed Alam” for his co-operation and
encouragement which help us in completion of this project.
It would like to express our special gratitude and thanks for giving us such attention and time. Our
thanks and appreciations also go to our team members in developing the project and people who
have willingly helped me out with their abilities.
5. 5
Table of Content
Contents
I. Nishat Mills LTD ..........................................................................................................................7
II. Organizational structure..............................................................................................................8
i. Our Vision...............................................................................................................................9
ii. Our Mission.............................................................................................................................9
iii. Strategic Objectives.................................................................................................................9
III. Crescent Mills LTD.................................................................................................................10
i. VISION..................................................................................................................................12
ii. CORE VALUES........................................................................................................................12
V. Financial Statements of Nishat Mills Limited...............................................................................13
i. Balance Sheet:.......................................................................................................................13
ii. Income Statement.................................................................................................................14
VI. Financial statements of Crescent Mills Limited........................................................................15
i. Balance Sheet & Income Statement........................................................................................15
VII. Ratios...................................................................................................................................15
i. Current Ratio.........................................................................................................................16
ii. Quick Ratio............................................................................................................................17
iii. Inventory Turnover................................................................................................................18
iv. Inventory Period....................................................................................................................19
v. Receivable Turnover..............................................................................................................20
vi. Receivable Period..................................................................................................................20
vii. Payable Turnover.....................................................................Error! Bookmark not defined.
viii. Payable Period.........................................................................Error! Bookmark not defined.
ix. Gross Profit Margin................................................................................................................21
x. Net Profit....................................................................................Error! Bookmark not defined.
xi. Return on Assets ...................................................................................................................23
xii. Assets Turnover.................................................................................................................24
xiii. Earning Power.........................................................................Error! Bookmark not defined.
xiv. Debt to Equity ...................................................................................................................26
xv. Long Term to Capitalization................................................................................................27
6. 6
VIII. Suggestions for Crescent........................................................................................................28
IX. Suggestion forNishat.............................................................................................................28
X. Comparison of Both...................................................................................................................29
9. 9
i. Our Vision
To transform the Company into a modern and dynamic yarn, cloth and processed cloth and
finished product manufacturing Company that is fully equipped to play a meaningful role on
sustainable basis in the economy of Pakistan.
ii. Our Mission
To provide quality products to customers and explore new markets to promote/expand sales of
the Company through good governance and foster a sound and dynamic team, so as to achieve
optimum prices of products of the Company for sustainable and equitable growth and prosperity
of the Company.
iii. Strategic Objectives
• To enhance the profitability of the Company;
• To increase the overall efficiency and productivity of the Company;
• To become the market leader by outshining the competitors and be an innovative Company by
introducing new ideas;
• To expand sales to the global marketplace by anticipating customer needs and develop and
maintain strong customer base;
• To monitor and improve internal processes to achieve efficiencies, improve organizational
structure and ensure the best use of available resources;
• To follow the latest technology trends and their implementation in the Company to enhance the
overall productivity of the Company.
• To develop and promote the reputation and image of the Company for its stakeholders in specific
and non-stakeholders in general;
• To promote awareness and best practices about environmental sustainability and social
responsibility
12. 12
i. VISION
To be the preferred choice of customers through innovative products and solutions and be a
leading contributor to the economy by enhancing value for stakeholders.
ii. CORE VALUES
Our core values are at the heart of our business because they define who we are, how we work,
what we believe in what we stand for. Our core values set out how we act and how we expect to
be treated as part of The Crescent Textile Mills Limited.
16. 16
i. Current Ratio
Nishat 2016 2015 2014
Current Assets Current Liability 25850830
19553041
24190444
19167495
28774992
21553219
Result 1.32 1.26 1.33
Crescent 2016 2015 2014
Current assets Current liability 5923
6606
5343
6571
4944
6491
Result 0.89 0.81 0.76
Interpretation
Its shows how much current assets to cover 1 current liability.
Nishat mills limited have 1.3 assets to cover 1 liability in 2014 and 2015 have 1.2 and 2016 have
1.3 assets to cover 1 liability.
On the other hand Crescent mills doesn’t cover their liabilities, in 2014 have 0.78, 2015 have 0.81,
2016 have 0.89
Current ratio of Nishat mills limited is better as compares to Crescent in all year of 2014, 2015
2016
17. 17
ii. Quick Ratio
Nishat 2016 2015 2014
Current assets – inventory Current
liability
1651294
19553041
13840248
19167495
16022497
21553219
Results 0.084 0.72 0.74
Crescent 2016 2015 2014
Current assets – inventory Current
liability
4287
6606
4005
6571
3454
6491
Result 0.64 0.60 0.53
Interpretation
Overall quick ratio of all years are not good for both companies.
Because the quick ratio is always greater than 1 but with comparison of both, Nishat mills limited
is better as compared to crescent in 2014 2015 and 2016
Because the quick ratio of Nishat in 2016 0.84, 2015 is 0.722 and 2014 ratio is 0.743
And Crescent in 2016 0.64, 2015 0.60 & 2014 0.53
18. 18
iii. Inventory Turnover
Nishat 2016 2015 2014
CGS Inventory 41734871
9933736
45153439
10350193
46580317
12752495
Result (times) 4.20 4.36 3.65
Crescent 2016 2015 2014
CGS Inventory 9239
1636
10322
1338
11054
1490
Result (times) 5.64 7.71 7.41
Interpretation
In one year, how many time inventories sold?
Nishat in 2016 sold 4 times inventory, in 2015 sold 4 times inventory and Nishat 2014 sold 3 times
inventory in one year.
Crescent in 2016 5 sold times inventory, in 2015 sold 7 times inventory and Nishat 2014 sold 7
times inventory in one year.
Its mean Nishat manage its inventory. Damage cost is less, balance between the demand and
supply. Nishat makes goods according to customer demand.
So, this show that Crescent has better inventory turnover than Nishat
19. 19
iv. Inventory Period
Nishat 2016 2015 2014
365/inventory turnover 9933736
41734871
10350193
45153439
12752495
46580317
Result (days) 83.95 80.3 98.55
Crescent 2016 2015 2014
365/inventory turnover 1636
9239
1338
10322
1490
11054
Result (days) 64.63 47.31 49.19
Interpretation
Measures the average number of days inventory in held by the company.
Nishat shows good result. Nishat in 2016 held 83.95, 2015 held 80 days inventory and 2014 held
98 days inventory in one year.
Crescent in 2016 held 64, in 2015 held 47 & in 2014 49
Its mean Nishat manage its inventory than Crescent. Damage cost is less, balance between the
demand and supply. Nishat makes goods according to customer demand.
20. 20
v. Receivable Turnover
Nishat 2016 2015 2014
Sales Receivables 47999179
12582368
51200223
10314628
54444091
11478458
Result (times) 3.81 4.96 4.74
vi. Days sales in Receivable
Nishat 2016 2015 2014
Receivables Sales * 365 12582368
47999179
*356
10314628
51200223
*365
11478458
54444091
*365
Result (days) 95.6 73.5 76.9
Interpretation
There is no comparison of receivables between both companies because Nishat doesn’t show their
payable and Crescent doesn’t show their receivables in their balance sheet.
21. 21
vii. Gross Profit Margin
Nishat 2016 2015 2014
GP Sales * 100 6264308
47999179
6046784
51200223
7863774
54444091
Result (%) 13.0 11.8 14.4
Crescent 2016 2015 2014
GP Sales * 100 1340
10579
1457
11779
1357
12411
Result (%) 12.6 12.3 10.9
Interpretation
Shows that what portion of each sales dollar is available to meet the companies’ expenses and
generate profit.
After calculating GP of both companies ,we analysis that in 2016 & 2014 Nishat is showing good
position as it’s higher than Nishat 2015 as compare to Crescent.
In GP ratio Company has control over its CGS & good inventory management.
22. 22
viii. Return on net sales
Nishat 2016 2015 2014
Net Profit Sales * 100 4923038
47999179
3911925
51200223
5512552
54444091
Result 10.2 7.6 10.1
Crescent 2016 2015 2014
Net Profit Sales * 100 251
10579
220
11779
239
12411
Result 2.37 1.86 1.92
Interpretation
Percent of each sales dollar earned as net income
There is a great difference in a result of both companies
Nishat in 2016 10.2, 2015 7.6, 2014 10.1
On the other hand Crescent in 2016 2.37, 2015 1.86, 2014 1.92
Nishat has in better position than Crescent according to the result of Net Profit
23. 23
ix. Return on Assets
Nishat 2016 2015 2014
Net Profit total assets *100 4932038
10659929
3911925
101140000
5512552
97048577
Result 46.2 3.86 5.6
Crescent 2016 2015 2014
Net Profit total assets * 100 251
13875
220
12453
239
11983
Result 1.80 1.76 1.99
Interpretation
It 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.
Nishat is better than Crescent in all years
24. 24
x. Assets Turnover
Nishat 2016 2015 2014
Sales total assets 47999179
106599219
51200223
101140000
54444091
97048577
Result (times) 0.45 0.50 0.56
Crescent 2016 2015 2014
Sales total assets 10579
13875
11779
12453
12411
11983
Result (times) 0.76 0.94 1.03
Interpretation
• Measures the amount of net sales generated for each average dollar of total assets invested.
• There is a great difference between the both companies.
• Crescent is performing well as compared with Nishat. Like Nishat 2014 sold 0.56 times
total assets in one year and Crescent in 2014 sold 1.03 times total assets in one year. 2014
• Crescent properly utilize its assets, company received payments in time and also not hold
inventory.
• This show that Crescent properly manages its land, building and machinery
25. 25
xi. Debt ratio
Nishat 2016 2015 2014
Total liabilities/total assets 24,444,073
106,599,219
24997177
101,140,000
28459401
97,048577
Result 0.22 0.24 0.29
Crescent 2016 2015 2014
Total liabilities/total assets 13461
13875
11952
12453
11622
11983
Result 0.97 0.95 0.96
Interpretation
Shows portion of assets financed with debt. The higher the ratio, the higher the risk
Nishat is better than Crescent in all years
26. 26
xii. Debt to Equity
Nishat 2016 2015 2014
Total liability Equity 1065999219
82155155
101140000
76142823
97048577
68589176
Result 12.9 1.32 1.41
Crescent 2016 2015 2014
Total liability Equity 13875
4552
12453
3448
11983
3078
Result 3.04 3.61 3.89
Interpretation
Nishat Company is showing good result in 2014, 2015 & 2016 as compare to
Crescent
Nishat: in 2016 has 1.2, 2015 has 1.3 & 2014 has 1.4
Crescent:in 2016 has 3, 2015 has 3.6 & 2014 has 3.8
Which means that Nishat company is not having relying on its
27. 27
xiii. Long Term to Capitalization
Nishat 2016 2015 2014
L.T.L equity + L.T.L 4891023
82155155 +
4891023
5829682
76142823 +
58296682
6906182
68589176 +
6906182
Result 0.056 0.043 0.092
Crescent 2016 2015 2014
L.T.L equity + L.T.L 2811
4552 +
2811
2678
3448 +
2678
2371
3078 + 2371
Result 0.38 0.48 0.43
Interpretation
It showing the financial leverage of a firm, calculated by dividing long-term debt by
the amount of capital available
Nishat: in 2016 has 0.5, 2015 has 0.4 & 2014 has 0.9
Crescent:in 2016 has 0.3, 2015 has 0.4, & 2014 has 0.4
It means that Nishat shows good result in all years
28. 28
VIII. Suggestions for Crescent
Crescent have to strong its working capital. Company should not hold
inventory. Company should improve its inventory management. Company
should improve the credit policy/ collection policy.
Crescent should improve its sale management. Company should properly
utilize cash in profitable projects.
Crescent company should have balance between the demand and supply.
Company should made goods according to customer demand. Company
should improves its sale management and also known good customer
knowledge.
IX. Suggestion for Nishat
Nishat mills limited should properly utilize its assets.
Company should not hold inventory for long time and also properly manage
its land, building and machinery because these investments used in profitable
projects, in return they generate profit for the company.
Nishat mills limited should manage its inventory becausedamage costoccurs.
Company should have balance between the demand and supply.
29. 29
X. Comparison of Both
This Industry If Political Stability in Our Country So Our Export Increases
and Business Opportunities Increases Day By Day and Govt.
Revenues Increase and Unemployment Low and Develop Country Give
Different Business Opportunities Terrorism & Corruption Its Increases Day
By Day in Our Country.
In Karachi And Rawalpindi Cities Faces Very Hard And Sewer Condition
Due To Terrorism So The Business Condition Is Very Bad Day By Day And
Business Shutdown And Crises Level High And Poorly Level Increase Due
To These Factors .
In This People Purchasing Power Low and Textile faces A Lot of Problems
Political Situation it’s Not Satisfactory Due To Rapid Changes in the Govt.
And Every Govt. Set Its Own Trade Policies, Rules And Laws And Different
Tax Policies So In This Govt.
Hough Textile Sector Is Still Zero Rated For The Purposes Of Sales Tax On
Exports Yet The Tax On Domestic Supply And Income Tax Contribute
Greatly To Government Revenues.
Diversification Of Economy Development In Textile Sector Has Helped In
Diversifying Economy By Reducing Dependence On Mere Production And
Export Of Raw Material.
It Also Instilled Diversification By Stimulating Collateral Industrial
Development.
It Is Also A Source Of Foreign Exchange Earnings. SOCIAL, CULTURE,
DEMOGRAPHIS & ENVIRONMENTAL FORCES Nishat Mills Ltd. Is A
Large Organization And According To Its Claims of Social Responsibility It
Provides Its Employees With Good Attitude To Work And Leisure And A
Safe Work Environment.
