financial statement analysis MSC textile

financial statement analysis MSC textile

SPREED SHEET MSC TEXTILE MILLS (PVT) LTD

Stock in trade / Inventory 426,533,640 490,121,810 729,804,251

Investment & Other Receivable 91,461,447 90,081,103 118,959,116

Total Current Assets 768,153,468 964,705,125 1,419,098,670 Current Liabilities

Short term financing 545,915,376 685,922,921 848,873,173

Other liabilities 52,508,217 62,181,176 316,735,546

Total Current Liabilities 748,083,801 963,936,789 1,418,777,721

Fixed Assets & Investments

Plant & Machinery 156,029,632 165,805,937 364,890,295 Office Equipment (Fur & Fix) 1,386,759 1,248,083 1,123,275 Capital Work in Progress 1,972,924 1,215,980 64,154,333 Long Term Investment 45,921,466 48,739,846 60,882,666

Total Fixed Assets 502,760,058 545,478,407 1,004,020,775 Capital Employed 522,739,725 546,246,743 1,004,341,724

Less: Long term debt 139,599,950 121,732,073 432,555,670

Net Worth 383,139,775 424,514,670 571,768,054

General Reserve 150,049,334 165,000,000 190,000,000 Unappropriated Profit 123,090,441 149,514,670 271,786,054 Share Capital / Issued Capital 110,000,000 110,000,000 110,000,000

Share Holder Interest 383,139,775 424,514,670 571,768,054

Less: Cost of good sold 1,448,059,673 1,287,641,679 1,181,477,655

Gross Profit 248,039,124 259,675,185 385,388,357

Less: Operating expense 110,066,356 108,594,850 130,555,059

Operating Profit 137,972,768 151,080,335 254,833,298

138,043,855 151,150,548 254,883,567

Less Financial & Other Charges

Net profit before taxes 35,901,608 35,412,572 129,761,354

Net profit after taxes 20,310,604 21,026,356 117,338,480 Operating Cash Flow 199,837,544 10,005,579 27,313,703

COMMON SIZE ANALYSIS MSC TEXTILE MILLS (PVT) LTD

Current Assets Audited % Audited % Audited %

Cash & Bank 6.48 10.23 6.39 Stock in trade / Inventory 33.09 32.47 30.11

Investment & Other Receivable 7.09 5.96 4.9

Current Liabilities

Total Current Liabilities 58.04 63.86 58.55

Fixed Assets & Investments

Office Equipment (Fur & Fix) 0.1 0.08 0.04

Share Capital / Issued Capital 8.53 7.28 4.53

Share Holder Interest 29.72 28.12 23.59

Less Financial & Other Charges

INDEX ANALYSIS MSC TEXTILE MILLS (PVT) LTD

Current Assets % % %

Investment & Other Receivable 100 98.49 130.06

Current Liabilities

Total Current Liabilities 100 123.88 182.34

Fixed Assets & Investments

Office Equipment (Fur & Fix) 100 89.99 81

Share Holder Interest 100 110.79 149.23

Less Financial & Other Charges

Net profit after taxes 100 103.73 577.72

Comments on Common Size

Analysis

The Common Size analysis of assets side of balance sheet shows that percentage of current assets in relation with total assets first increase but

in last year it decreases In fixed assets it increases But in deposits and advances has been decline three-year relation with the total of assets.

The liabilities side shows that current liabilities in percentage in relation with total assets has also decrease so company must be careful to control current liabilities, other items of liabilities are also declining over three Years in relation with the percentage of total assets.

The income statement analysis shows that gross profit is increasing but operating profit is declining The overall net profit increasing over two years and also grows in third year

Comments on Index Analysis

Index analysis of balance sheet shows that by taking 2003 as base year the total liabilities and shareholder’s equity has been increased over the next two years, and same like as the case with assets which also increased over the next two years.

From the income statement point of view gross profit has also increased over the next two years as compared with the base year The same is the case with operating profit and ultimately net profit.

Table of Contents

• Preface

• Spread Sheet

• Trend Analysis

• Graphical representation of ratio

• Comments on Trend analysis

• Common Size Analysis

• Comments on common size analysis

• Index Size Analysis

• Comments on index analysis

Title:

Financial Statement Analysis of “ MSC Textile mills (Pvt.) Ltd.”

Objectives:

• To furnish information for making investment and credit decision.

• To identify performance to aid decision-making.

• Identify that how much a firm financial by external debt.

• Measure the performance of the assets.

• To know firm profitability and its market value.

Benefits:

• Use financial information’s to improve managerial decision.

• We will evaluate the financial condition and performance of a firm over the year.

• Ratio can tell a comparison between assets and liabilities.

• Analyze whether a company invest more or not.

• To see the relationship between cash flows and accounting profit.

Sources:

• Financial Management By “van Horn”

• Managerial finance By “Lawrence j Gitman”

• Annual report of “MSC Textile Mills (pvt) Ltd”.

Trend Analysis MSC Textile Mills (pvt) Ltd

Liquidity Ratio:

Debt Ratio:

Total Debt to Total Assets 0.10:1 0.12:1 0.14:1

Long Term Debt to Total Assets 0.01:1 0.08:1 0.17:1

Total Capitalization Ratio 1.09:1 1.36:1 1.45:1

Total Debt to Total Equity 63.35%: 37.65% 51.05%: 48.95% 52.05%: 47.95% Long Term Debt to Total Equity 36.70%: 64.30% 45.75%: 55.25% 47.03%: 52.07%

Coverage Ratio:

Financial Charges Coverage Ratio1.70 Times 1.97 Times 2.96 Times

Assets Efficiency Ratio:

Receivable Turnover Ratio 2.36 Times 2.42 Times 3.14 Times Inventory Turnover Ratio 4.79 Times 2.80 Times 1.95 Times Payable Turnover Ratio 0.63 Times 0.41 Times 0.63 Times Total Assets Turnover Ratio 0.01 Times 0.01 Times 0.04 Times Payable Turnover in Days 571 Days 878 Days 571 Days

Inventory Turnover in Days 75 Days 128 Days 184 Days

Receivable Turnover in Days 152 Days 148 Days 114 Days

Profitability Ratio:

Liquidty Ratio

0

1

2

3

4

Years

N.W.Capital Ratio Cash Ratio Quick Ratio Current Ratio

Debt Ratio

0

0.5

1

1.5

2

Years

Total Capitalization Ratio

Long Term Debt

to Total Assets Total Debt to Total Assets

Total Debt to Total Equity Ratio

0% 50% 100%

2003

2004

2005

Total Debt Ratio Total Equity Ratio

Long term Debt to Total Equity Ratio

0% 50% 100%

2003

2004

2005

Long term Debt Ratio Total Equity Ratio

Coverage Ratio

0

1

2

3

4

Years

Coverage Ratio

Assets Effciency Ratio

0

5

10

Years

Total Assets Turnover Ratio Payable Turnover Ratio Inventory Turnover Ratio Receivable Turnover Ratio

Assets Efficiency Ratio

0

1000

2000

3000

Years

Cash Cycle Operating Cycle Receivable Turnover in Days Inventory Turnover in Days Payable Turnover in Days

Profatibality Ratio

0.00%

20.00%

40.00%

60.00%

Years

ROE ROA / ROI

Net Profit Margin Operating Profit Margin

Gross Profit Margin

Aggregate Performance

The company in a position to meet every challenges regarding to current assets and current liabilities The company has sufficient funds to meet its current and long-term debts

The company cash cycle is also stable during the required time periods and in position to invest in relevant aspects in which company create greater profit and market share.

Company financial coverage is also better and company enjoys better investment and more good financial position Company’s profit is also stable during the required time period Company gets sufficient returnon investment and assets.

Comments on Trend Analysis

As can be seen, the current ratio and acid test ratio has been increased over year by year but the company needs more improvement in order to get financial stability.

The firm cash ratio increased over three years, which tells that company has enough cash to meet current obligations so, company has to over come it.

Company’s debt ratio tells us that over three Years Company become capable of receiving less financing from outside.

The company activity ratio shows that company’s assets are efficiently utilized and company is trading its assets very carefully and finally the profitability of a company is increasing quickly over three years and company get sufficient returns on investment.