Butt Final FSA

8/14/2019 Butt Final FSA

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Presented To:

Mr. Hamza Mukhtar

Presented By:

Faheem Anwar

Usman Butt


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Financial Statements

AnalysisWe will done our analysis in three Steps:

Economic Analysis

Industry Analysis

Firm Analysis Common size analysis

Vertical analysis

Horizontal analysis


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Economic Analysis

Internal Affairs & foreign trade

Inflation

GDP Growth

Credit Rating

Unemployment

Export High Duties Smuggling of Foreign Exchange


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Internal Affairs and Foreign

Exchange Political instability

Electricity Breakdown

Sui Gas

Devalue Of Rupee


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Inflation

Inability to reduce prices of petroleumproducts.

international commodity prices


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Inflation

Item 2005-06 2006-07 2007-08

CPI 7.9 7.8 10.3

Food Group 6.9 10.4 15.0

Non FoodGroup

8.6 6.0 7.5

INFLATION RATE

0

5

10

15

20

CPI Food Group Non FoodGroup

2005-06H

2006-07H

2007-08H


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Real GDP Growth

Current 2008 Projected 20085.8% 7.5%

GDP

This deficiency is due to:

Agriculture products such as cotton, sugarcane, and wheat falling below target putsome negative downstream effects on textile and sugar industries.

2005 2006 20007 2008

Cotton 14625 13019 12856 11655

Sugarcane 47244 44666 54742 63920

Wheat 12612 21277 23295 21749AGRICULTURE PRODUCTION

0

10000

20000

30000

40000

50000

60000

70000

2005 2006 2007 2008

Series1

Series2

Series3

Series4

Series5

Series6

Series7


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Impact of high energy cost. ( electricity, Sui

Gas )

Unpredicted rise in oil prices during 2008.

Beginning of year Boom Period price Ending of year$50 per barrel $147 per barrel $37 per BRL

Oil Prices

0

50

100

150200

beginning

of year

boom

period

price

ending of

year

Series1


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Credit Ranking

Previous Ranking ccc-

Current Ranking ccc+

Although the current credit ranking ofPakistan is ccc+ but it will be reviewed inJanuary

Export High DutiesHigh custom

High Tariff


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Unemployment

Unemployment is a central problem becausewhen unemployment is high, resources are

wasted and people's incomes are depressed;

during such periods, economic distress also

spills over to affect people's emotions andfamily lives.

Unemployment in rural areas is higher then theunemployment in urban areas due to industries.Mostly industries are established in urban areas.

Thats why the unemployment rate in urban


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Smuggling of Foreign

Exchange Withdraw Investment


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Economic Indicators

Leading Indicators

Other economic indicators


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Leading Indicators

variables that may indicate where the economywill be in the next 3 to 6 months.

Work Week

Unemployment claims

Order for consumer goods

Slower deliveries

Plant and equipment orders

Stock prices


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Industry

Analysis


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Industry Analysis

Ill use of Loans

Unavailability of cheap labor

Machinery imported but not used2004-05 05-06 06-07 07-08

928.6m 771.5 m 503m 281.6m

Credit purchase by Importers

High inflation increases the product prices

Fluctuation of cotton prices


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MTM


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Introduction of Firm

We are leaders in creating, developing andmanufacturing of knitted apparel products rightfrom basic to highly fashioned garments thusresponding to emerging trends in the industry. We

translate conceptual ideas of our customers intoreality and shape them through our technical bentand professional acumen. The team here stronglybelieves that Customer satisfaction is the essence ofbusiness today. MTM has the technology with

expertise,products with knowledge and most importantlythe right mindset to achieve totalcustomer satisfaction.


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Firm Analysis


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SHARE CAPITAL ANDRESERVE 2008 2007 2006

Authorized share capital 1,000,000 1,000,000 1,000,000

Issued subscribed and paid up

capital

900000 900000

0,000

Reserve 911300 695300 616469

Total Equity 1811300 1595300 1516469

Surplus on Revaluation of Assets 379420 379420 61967

Deferred income on sale and lease

back off operating fixed assed

4891 5639 7700

Balance Sheet

Cont.


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NON CURRENT LIABILITES 2008 2007 2006

Long Term financing

Liability against subject to finance

lease

Defferred liability for gratuity

1769245

219851

107789

265989

276138

90180

297933

387515

76082

Total 2096885 632307 761530

CURRENT LIABILITIES

Trade and other payables

Accrued Mark-up

Short term finances

Current portion of long term

liabilities

Provision for taxation

906159

84911

2621724

254874

74257

674138

77642

3684328

220115

57243

748578

64189

2912069

256596

104518

Total 3941925 4713466 4085950Cont.


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Total Liabilities 6038810 5345773 4847480

CONTENGIES AND

COMMITEMENTS- -

TOTAL LIABILITES AND SHARE

HOLDERS EQUITY

8234421 7326132 6433616


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Non Current Assets 2008 2007 2006Property, Plant & Equipment 3025599 2808261 2130740

Long term advances 6004 6733 7466

Long Term Security Deposits 16338 23918 23972

Total 3047941 2838912 2162178

Assets Side

Cont.

C t A t 2008 2007 2006


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Current Assets 2008 2007 2006

Stores, spares and loose tools 366850 286203 277923

Stock in trade1838707 1813977 1891260

Trade Debts 1933875 1611302 1414949

Loans and advances 165391 130095 115283

Trade deposits and short term

prepayments

166415 109201 145438

Other Receivables 577987 460874 367351

Cash and bank balances 137255 75568 59234

ToTal Assets 8234421 7326132 6433616

Cont.


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Profit & Loss Account2008 2007 2006

Sales

Less: Cost of goods sold

7884785

6428798

6017735

4963190

4899190

4000910

Gross profit

Add: Other operating income

Total

1455987

8700

1464687

1054545

6887

1061432

898280

2778

901058

Distribution cost

Administrative expenses

Other operating expenses

Finance cost

(348281)

(1395770)

(29855)

(538964)

(289470)

(132967)

(31586)

(439539)

(245922)

(123812)

(13766)

(335266)

Profit before Taxation 408010 167870 182292


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2008 2007 2006

Profit Before Taxation

Less:provision for taxation

408010

74257

167870

57243

182292

52329

Profit After Taxation 333753

-

110627 129963

Earnings Per Share-Basic 11.13 3.69 4.33


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Local & Export Sale

0%

50%

100%

150%

2008 2007

Export

Local


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profit & loss graph

-

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2008 2007 2006

Series1


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Liquidity Ratios

Ratios 2008 2007

Current Ratio 1.3:1 0.9:1

The increase in ratio is resulting due to the

increase in different current assets.i.e themajor change in the current assets (cash) andtrade Receivables and inventory is alsoincreased.


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Cash Ratio

Cash from operations/Current Liabilities

2008 20070.0348:1 .0160:1

The ratio is increasing due to increase in cash

and decrease in current liabilities.

ANALYSIS OF PROFITABILITY


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ANALYSIS OF PROFITABILITY

Profitability can be analyzed by using differentratios:

Gross profit Margin Ratio 2008 2007

Gross Profit/Sales 18.4% 17.52%

The ratio of Gross profit is increasing due to thefollowing reasons:

Increase in sales :Fluctuation in Dollar:


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Net Margin Ratio 2008 2007Net profit/Sales 4.23% 1.84%

The increase in net margin ratio is due toincrease in sales and ultimately high profits.

Operating Margin 2008 2007


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Operating Margin 2008 2007

Operating Profit/Sale 12%

10.09%

One reason of increasing in the ratio of operating

profit is already discussed that sales are

increasing.

Other reason is that in other expenses provision

for doubtful debts is not done.

Assets Turnover Rati0


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Assets Turnover Rati0

2008 2007Net Sales/Average Total Assets 1.0 % o.43%

The main reason in increasing the ratio is an

increase in the value of sales .

LONG TERM DEBT PAYING


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LONG TERM DEBT PAYING

ABILITY

Debt To Equity 2008 20073.33:1 3.35:1

The company long term debt paying ability decrease in 2008because the ratio represents that company are using more debt ascompared to its equity. And this also shows that company has topay more outside the firm as compared to the inside of the firm


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Asset management Ratio

Ratios 2008 2007

Average collectionperiod

4.44 3-97

Avg R/a TOR in

days

81days 91days

Operating Cycle 183 days 225days

Inventory T.overRatio

3.52 2.68

Inventory T.over indays

102 days 134 days


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Long Term debt ratio

Ratios 2008 2009

Debt to totalasset ratio

0.73:1 0.72:1

Capitalization

Ratio

.054:1 0.28:1

Time interestEarned Ratio

1.91 1.51


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Common Size Analysis


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SHARE CAPITAL AND

RESERVE 2008(%) 2006 (%) 2005(%)Authorized share capital _ _ _


capital

11.41 14.96 18.37

Reserve 11.56 11.55 12.58

Total Equity 22.97 26.51 30.95

Surplus on revaluation of operationof fixed asset

4.81 6.31 1.26

Deferred income on sale and lease

back of operating fixed assets

0.06 0.09 0.03

Balance Sheet

Cont.


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NON CURRENT LIABILITES 2008(%) 2007 (%) 2006

(%)

Long Term financing

Liability against subject to

finance lease

Deferred liability for gratuity

22.44

2.79

1.37

4.42

4.59

1.50

6.08

7.91

1.55

Total 26.59 10.51 15.54


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CURRENT LIABILITES 2008(%) 2007 (%) 2006 (%)


Accured Mark-up

Short term financing

Current Portion of long term liabilities

Portion for Taxation

11.49

1.08

33.25

3.23

.094

11.20

1.29

61.22

3.66

.96

15.28

1.31

59.44

5.24

2.13

Total 49.99 78.33 83.40

Total Liability 76.59 88.83 98.94

CONTENGIES ANDCOMMITEMENTS

- - -

TOTAL LIABILITES AND

SHARE HOLDERS EQUITY

104.43 121.74 146.71


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Non Current Assets 2008

(%)

2006 (%) 2005

(%)

Property, Plant & Equipment 38.37 46.67 43.49

Long Term Loans and Advances 0.08 0.11 0.15

Long Term Deposits 0.21 0.40 0.49

Total 38.66 47.18 44.13

Cont.

Assets Side


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Current Assets 2008

(%)

2006

(%)

2005 (%)

Stores, spares and loose tools 4.65 4.76 5.67

Stock in trade 23.32 30.14 38.60

Trade Debts 24.53 26.78 28.88

Loans and advances 2.10 2.16 2.35

Trade deposits and short term

prepayments

2.11 1.81 2.97

Other Receivables 7.33 7.66 7.50

Cash and bank balances 1.74 1.26 1.21

Total Current Assets 65.78 74.54 87.19

Total Assets 104.43 121.74 131.32Cont.


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2008

(%)

2006

(%)

2005

(%)Sales


100

81.53

100

82.43

100

81.66

Gross profit 18.47 17.52 18.34

Distribution cost


Other operating expenses

Total expenses

Profit before other incomes

Other operating income

Profit from Operation

Finance cost

4.42

1.77

0.38

6.57

11.90

0.11

12.01

6.84

4.81

2.21

0.52

7.54

9.98

0.11

10.09

7.30

5.02

2.53

0.28

7.83

10.51

0.06

10.56

6.84

Profit & Loss A/C


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2008(%) 2006 (%) 2005 (%)



5.17

0.94

2.79

0.95

3.72

1.07

Profit After Taxation 4.23 1.84 2.65


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Index Analysis


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SHARE CAPITAL AND

RESERVE2008(%) 2007 (%) 2006

(Base

Year)

Authorized share capital - - -


capital

0 0 100

Reserve 48 13 100

Total 512 512.01 100

Balance Sheet


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NON CURRENT LIABILITES 2008(%) 2007 (%) 2006

Long Term financing

Liability against subject to

finance lease

Deferred liability for Gratuity

494

-43

42

-11

-29

19

100

100

100

Total 175 -17 100


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CURRENT LIABILITES 2008 (%) 2007(%) 2006(%)


Accured Mark-up

Short term financing

Current Portion of long term liability

Taxation

21

32

-10

-1

-29

-10

21

27

-14

-45

100

100

100

100

100

Total -4 15 100

Total liability 25 10 100

TOTAL LIABILITES AND

SHARE HOLDERS EQUITY

15 2 100


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Non Current Assets 2008 (%) 2007

(%)

2006(bas

e year)

Property, Plant & Equipment 42 32 100

Long Term Loans and Advances -20 -10 100

Long Term security deposits 99.54-32 0 100

Total 41140.63 31 100

Assets Side


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Current Assets 2008(%) 2007(%) 2006(%)

Stores, spares and loose tools 32 3 100

Stock in trade -3 -4 100

Trade Debts 37 14 100

Loans and advances 43 13 100

Trade deposits and short termprepayments

14 -25 100

Other Receivables 57 25 100

Cash and bank balances 132 28 100

Total 21 5 100

Total Assets 28 14 100


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2008(%) 2007(%) 2006(base

year)

Sales


61

61

23

24

100

100

Gross profit

Add: Other operating income

62

213

17

148

100

100

Distribution cost


Other operating expensesFinance cost

42

13

11361

18

7

12931

100

100

100100

Profit before Taxation 124 -8 100

Profit & Loss A/C


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2008(%) 2007(%) 2006(base

year)



124

42

-8

9

100

100

Profit After Taxation 157 -15 100


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Thank You Very

Much

Butt Final FSA

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