Analysis of Financial Statements (2)

8/3/2019 Analysis of Financial Statements (2)

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Shahid Ashtraf

MBA 3rd B

QAU


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Objectives of study The objective of my study is know about that how the

financial statements are analyzed in a professionalmanner.


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Why I have chosen CBL

The largest vertically integrated denim manufacturing

facility in Southeast AsiaWell know and branded company

Easy accessibility of information


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Crescent Bahuman Ltd. originally setup as a joint venture

between The Crescent Textile Mills, Pakistan and Greenwood

Mills Inc. The plant is located in Tahsil Pindi Bhattian ,District

Hafizabad.

Core business consist of exporting fabrics and jeans wear to

European, Australian, US and Pacific Region. Through the use

of high-tech equipment and modern techniques , company is able

to coop up the latest trends without compromising on quality.

Company Information


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Designed as a vertical jeans wear facility, it commenced commercial

production in June 1995. The plant is situated on 550 acres with 165

committed to commercial activates and manufacturing facilities of 1

million square feet. The facility is one of the first single site operations

to include processing of raw cotton through finished jean wear. It also

has a wastewater treatment plant and a power generation plant within

the compound.

Crescent Bahuman, the largest vertically integrated denim

manufacturing facility in Southeast Asia


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The Crescent Textile Mills Limited is a Pakistan-based company. The Company

is engaged in the business of textile manufacturing comprising of spinning,

combing, weaving, dyeing, bleaching, printing, stitching, buying, selling and

dealing in yarn, cloth and other goods, and fabrics made from raw cotton and

synthetic fibers. It also operates a cold storage unit. The Company operates in

two segments: textile and cold storage. The textile segment comprises of

spinning, combing, weaving, dyeing, bleaching, printing, stitching, buying,

selling and dealing in yarn. The Cold storage segment provides storage facilities

to the farmers


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Organizational StructureThey have their own power plant that gives them ability to control and

maintain an uninterrupted power supply

Designed as a vertical jeans wear facility, it commenced commercial

production in June 1995. The plant is situated on 550 acres with 165

committed to commercial activates and manufacturing facilities of 1

million square feet. The facility is one of the first single site operations to

include processing of raw cotton through finished jean wear. It also has a

wastewater treatment plant and a power generation plant within the

compound.


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Products of CBLProducts and Services:

Jeans

Shirt

Upper of jeans

T- Shirts on demand

Levis

Express


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There is a chain of command that extends

from upper organization levels to the lowest

levels and clarifies who reports to whom.

The orders move from upward to downward

and suggestions move downward to upward.


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Ratio Analysis

Liquidity ratio

Activity ratio

Profitability ratio

Leverage ratio


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Liquidity RatiosLiquidity ratios:

Years 2006 2007 2008 2009 2010

Current Ratio 0.83 0.82 0.74 0.70 0.70

Quick Ratio 0.44 0.52 0.48 0.51 0.50

Cash ratio 0.01 0.00 0.00 0.00 0.00

Net working capital -500404 -688087 -1420691 -1720013 -1807785


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Activity Ratio

Years 2006 2007 2008 2009 2010

Inventory Turnover 3.8529168 4.4013333 5.4113714 8.2323575 7.7298851

inventory turnover in Days 94.733424 82.929416 67.450555 44.337239 47.219331

Account receivable turnover 4.9587219 4.5547265 4.1362547 4.1955706 4.2107763

Account receivable turnover in

days 73.607676 80.136536 88.244083 86.99651 86.682353

Total assets turnover 0.70 0.56 0.80 0.99 0.99

Fixed assets turnover 2.31 1.29 2.06 2.57 2.73


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Years 2,006 2,007 2,008 2,009 2,010

Gross profit margin 10.54 9.24 9.57 14.65 13.41

Net profit margin -1.15 1.53 -0.36 1.67 3.17

Return on

Investment

-0.80 0.86 -0.29 1.66 3.14

Return on paid up capital -14.02 19.63 -6.32 36.38 70.04

Operating profit

margin

6.84 10.15 5.89 8.27 8.10

Per tax margin -0.34 2.04 -0.13 2.22 4.27

Earning/loss per share -1.4 1.78 -0.63 3.64 7

Profitability Ratio


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Leverage Ratio

Debt to Equity 0.40 0.36 0.35 0.33 0.20

Debt to total asset 0.14 0.14 0.13 0.12 0.08


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Horizontal Analysis Income Statement

Years 2006 2007 2008 2009 2010

Sales - net 100% 115.22161 175.177355 216.16152 218.43108

Cost of goods sold 100% 116.903037 177.077153 206.22776 211.4283

Gross profit 100% 100.952742 159.055345 300.46102 277.85785

Distribution and selling expenses 100% 112.192106 116.946926 189.78943 227.24058

Administration expenses 100% 85.6841849 91.5696154 120.65419 130.44986

Operating expense 100% 941.959521 1664.08217 3788.984 1378.2298

other operating income 100% 289.064524 43.1592867 117.079 84.436013

profit from operation 100% 171.061364 151.062835 261.56351 258.79243

Finance cost 100% 130.09777 171.776109 228.58247 150.23252

share loss of associated

profit/loss before tax 100% -688.06698 65.893067 -1401.398 -2723.214

Provision for taxation 100% 73.2525 49.7375 148.745 297.0525

profit/loss for year 100% -153.99509 54.5598036 -313.96 -604.4721

Horizontal Analysis of Income Statement


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Vertical Analysis of Income StatementYears 2,006 2,007 2,008 2,009 2,010

Sales - net

Cost of goods sold 89.46 90.76 90.43 85.35 86.59

Gross profit 10.54 9.24 9.57 14.65 13.41

Distribution and selling expenses 4.16 4.05 2.78 3.65 4.33

Administration expenses 3.14 2.30 1.62 1.83 1.93

Operating expense 1.89 17.67 19.82 23.89 9.40

other operating income 3.46 8.68 2.46 2.34 1.95

profit from operation 7.64 11.18 6.52 9.69 9.35

Finance cost 68.09 87.74 73.53 51.80 36.81

share loss of associated 1.02 1.54 1.10

profit/loss before tax -0.34 2.04 -0.13 2.22 4.27

Provision for taxation 0.90 0.56 0.25 0.65 1.26

profit/loss for year -10.88 16.59 -3.73 11.36 23.66


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Vertical Analysis Of Balance Sheet

Years 2006 2007 2,008 2,009

Stores and spares 2.69 1.98 1.98 1.61

Stock in trade 13.50 9.54 11.43 8.69

Trade debts 14.06 12.27 19.41 23.69

Loans and advances 1.01 0.75 0.66 2.21

Short term deposits and prepayments 1.09 0.05 0.01 0.01

Balance with statury authorities 0.76 0.60 0

Interest accrued 0.04 0.07 0.09 0.20Other receivables 0.29 0.70 0.53 0.57

Short term investments 0 4.86 2.13 0.60

Sales tax recoverable 1.19 0.26 0.51 0.00

Cash and bank balances 0.57 0.07 0.08 0.18

Non-Current Asset

Property, plant and equipment 30.18 43.38 38.94 38.67Investment in an associate 4.94 4.73

Long term investments 16.17 10.93 5.26 2.11

Long term loans and advances 19.13 14.55 15.04 16.75

Long term deposits and prepayments 0.08 0.03 0.03 0.02

Deferred tax - asset 0 0 0.06 0.19

Total Asset 100% 100% 100% 100%


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Horizontal Analysis of Balance Sheet

Years 2006 2007 2,008 2,009 2010

Stores and spares 100% 105.942022 105.79012 80.8976444 97.503389

Stock in trade 100% 101.617439 126.821744 75.8004246 111.34907

Trade debts 100% 125.441546 167.416806 121.65127 100.68504

Loans and advances 100% 107.355116 93.1163093 333.818542 93.881459

Short term deposits and prepayments 100% 6.84954324 29.087168 91.4469453 418.84669

Interest accrued 100% 2.78469425 1.33543721 2.17418275 0

Other receivables 100% 3.41855355 0.80853502 1.06994228 1.7678528

Sales tax recoverable 100% 0.3203173 2.04396374 0 0

Cash and bank balances 100% 0.18153808 1.16388323 2.20846944 0.8673076

Non-Current Asset

Property, plant and equipment 100% 2.06637854 0.95024935 0.98964307 0.9518921

Long term investments 100% 0.97137121 0.50953211 0.39926379 1.1198598

Long term loans and advances 100% 1.09317176 1.09438922 1.11007882 1.0643586

Long term deposits and prepayments 100% 0.59259938 1.09984544 0.62310287 1.2751466

Total Asset 100% 1.43738198 1.05860009 0.9966975 1.0159731


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Analysis of Financial Statements (2)

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