Importance of textile industry

According to the ECONOMIST intelligence report of Pakistan the following

observations have been made: Despite Government efforts to diversify exports and
widen the industrial base, the industrial sector remains dominated by the Textile sector
by having 426 mills. Textile Sector still represents 46% of total manufacturing and
provides 62% of Pakistans Export receipts. Employment level is 40% of the total labor
workforce. The textile industry contributes 11% of the total GDP. Some of you may not
know that APTMA was founded in 1952 and since then has been the foremost
association concerning the textile business in Pakistan. The strong performance
stemmed from two factors:

a. Increase in import quotas especially by U.S.A, EU and TURKEY

b. Textile industry has invested over US$1.5 billions in new technologies and
modernization in the last 3 years.
Efficiency and the innovation in textile is the only hope to get the country out of
economic problems.

Present status of Pakistan Textile engineering sector

The Pakistan Textile Engineering Sector is underdeveloped and under utilized. Mostly it
caters in the form of spares, components for modernization and machines used in
cottage or small scale industries.
A cursory look at the structure of Pakistan Textile Industry shows that most of them are
cottage industry, small/medium industrial units and little large integrated state of art
units. The number of units which fall under each category varies from sub-sector to sub-
sector. Similarly the Textile Engineering Units also vary from small, medium and large in
size. The Textile Engineering Industry comprises approximately 80% small work shops,
15% medium engineering Units and 5% large Engineering Units. It will not be out place
to mention that the large engineering units are in Public Sector. The small and medium
Engineering Units work on reverse Engineering principles, only few work according to
Engineering Drawings and still fewer have Testing or Quality Control facilities.
On the basis of initial survey of Textile Engineering Units (Not complete yet),
approximately 500 units are engaged all over Pakistan, employing approximately 50000
work force which is mostly skilled. Even under the present conditions and without any
support, Pakistan Textile Engineering Industry is providing import substitution worth
around one billion US dollars. This sector also exports to small and medium Textile
Units in Bangladesh, Iran, Sri Lanka, etc.
The Textile Engineering Sector is throttled through taxes on raw material, import of
components, electronic and electrical parts.

Assistance of present institutions

To encourage the local textile industry an access to the modern practices in the
specialized areas of manufacturing processes, productivity enhancement and quality
control, an institutional mechanism should be set up which provides the industry an
adequate and industry-friendly assistance from such organizations as MIRDC, PITAC,
CTL and PSI, etc.

Need for training institutions

Diploma Level Courses on the pattern of Pak-Swiss Training Centre in Karachi should
also be opened in the Textile Institutions in Faisalabad and Karachi and more such
courses should be introduced in the Polytechnics in areas like Multan, Hyderabad,
Lahore and Gujranwala.

Pakistan s textile industry has been investing for the last five years in modernization and
the improvement of the production base. During this period the sector has invested over
US$ 5.0 billion in modernization and higher value addition. Break up of investment is
given as under.

Sectoral Shares in Total Investment in the Sector

1 Spinning 46%
2 Weaving 24 %
3 Textile Processing 12%
4 Knitwear & Garments 5%
5 Made-Ups 8%
6 Synthetic Textile 5%

This investment has resulted in the following capacity improvements:

Unit 1999-00 2004-05 % Change

Capacity (Spindles) 000 8,477 11,300 33%
Consumption of000 Kg 1,970,356 3171,123 61%
Raw
Cotton 000 Kg 1,566,348 2,680,900 71%
MMF 000 Kg 404,008 490,223 21%
Production of CottonBales 9,745,447 14,339,852 47%
Production of Yarn 000 Kg 1,678,536 2,063,565 23%
Production of Cloth Mill sq 4,987 6,833 37%
Textile Exports 000 US$ 5,156,572 9,030,153 75%

Future opportunities
Our main competitors in primary textile products with the advantage of large
engineering sector in this region are China and India. The only country in this region
without strong engineering base is Pakistan and our dependence upon outside
Engineering Industry keeps our cost of production higher with low engineering skills.

Looking into the future a strong competition from China and India for these market
requirements can be used to involve them to start assembly plants under their guidance
and cooperation.
Some progress in the direction has led to the development of a Task Force in the
Ministry of Industries and Textile Engineering is growingly lucrative for investors, local
and foreigners.

Pakistan s textile industry has been investing for the last five years in modernization and
the improvement of the production base. During this period the sector has invested over
US$ 5.0 billion in modernization and higher value addition. Break up of investment is
given as under.

Future Perspective

In order to accelerate the growth of this sector, the Ministry of Textile Industry has been
set up specifically to address issues of supply chain management and value addition.
Since its creation, the Ministry has taken a number of proactive measures for the
promotion of the textile industry. These include:
i. Reactivation of the Federal Textile Board to take decisions involving strategy for the
development of textile industry.

ii. Policy support in shifting towards value addition.

iii. Establishment of Textile City and Garments Cities in the main industrial hubs of the
country i.e. Karachi, Lahore & Faisalabad. At present one Textile City at Karachi and
three Garment Cities (at Karachi, Lahore and Faisalabad) are being established.

iv. Import duty on raw material, sub-components and components used in the local
manufacturing of textile plants and machinery for export sector, has been reduced to
zero%.

v. Import duty, on ginning presses has been reduced to 5%.

vi. The Program was started in 2005-06 and will be continued during 2006-07 season
also. For this purpose total Rs.70 million shall be paid as premium to the growers for
production of 100,000 clean cotton bales. Federal and Provincial Governments (Punjab
& Sindh) each will pay 50% share of the premium. Federal Govt. s share is Rs.35 ml
and Punjab Govt. will pay Rs.24.5 ml and Sindh Rs.10.5 ml (Total Rs.35 ml) for this
year. The Prime Minister has approved the continuation of this program up to 2008-09
with production of 300,000 clean cotton bales in 2007-08 and 600,000 bales in 2008-09.

vii. High Volume Instrumentation is another component towards achieving better

international quality.

viii. Turn over tax has been reduced to 1 % on retailers of specified textile fabrics and
articles of apparel including readymade garments or fashion wear. The 15% Sales Tax
levied earlier on retailers has been reduced to 2%. Both these taxes will be their final
tax liability.

ix. To improve the human resource base and to improve labor productivity, provision of
Rs. 96 million from EDF has been made for providing skills development to the work
force in the garment sector. Accordingly, Stitching Machines Operators Training (SMOT)
Scheme was initiated which is successfully running in a number of industrial
establishments.
x. An initiative of launching of first ever business to business (B2B) web/based portal for
providing market access to Pakistani textile products.

xi. A Cotton Ginning Research & Training Institute is being set up at Multan. Funds to
the tune of Rs.28 million have been approved by the EDF Board of Administrators.

xii. Continuous supply of natural gas to the textile units during the winter months to
ensure uninterrupted supply of power to the industrial units.

xiii. Research & development activity is being augmented by engaging expatriate

consultants to benchmark our industrial practices vis-a-vis major international
competitors. Two foreign consultants M/S Werner and Gherzi are conducting studies for
the improvement of the textile sector. This is assumed that it would help in working out
better policies to reduce the cost of doing business and in improving the textile exports.

AHMAD HASSAN TEXTILE MILLS

INTRODUCTION

The Company was incorporated in Pakistan on 03 December, 1989 as a Public Limited

Company under the companies ordinance 1984. Its shares are quoted on all Stock
Exchange in Pakistan. It is principally engaged in the manufacture and sale of yarn and
fabric. The registered office of the company is situated in Multan. The Mills is located at
District Muzaffargarh.

The company during the last period had installed 15480 spindles making a total
installed capacity of 33120 spindles, which started trial production from May 01,2005 in
the last period and commercial production has started from August 01,2005 during the
current year.

Capital ExpansionVis-A-Vis Financing

Besides the import of 5280 spindles with back process in 2 nd Spinning unit, extension in
the waving unit is also underway. The civil work for expansion in spinning unit, have
almost been completed and erection of machinery is to star soon.
Current Performance

Financial Indicators 2006 2005

(Rupees in Million)

Turnover 2,054.61 1,390.82

Net Sales 2,032.59 1,305.25

Operating Profit 150.38 100.36

Profit before Tax 28.77 60.21

Profit/Loss after Tax (6.48) 52.76

The gross profit margin for the year is 9.58% while in last year it was in last year it was
10.65%, the profit before tax is Rs.28.70 million, again 60.20 million in the last period,
decreased by 31.50 million, while profit/ loss after tax for the year is Rs.(6.47) million
against Rs.52.76 million in the last period.

The main reason for net loss of Rs. (6.47) million is because of increase in depreciation
from Rs.49 million to Rs. 100 million given a net impact of Rs.51 million. Finance cost is
also increased from 40 million to Rs121 million which has adversely affected the profits
of the company. The main reason for this is increase in KIBOR Rates along with Bank
Spread.

Finally a deferred taxation has entirely changed the profitability of the company, before provisioning for
deferred tax the net profit after tax of the company was Rs. 17.117 million, but to give a true and fair
view to the shareholders of the company the provision for deferred tax that is Rs. 23.594 million has
been made in the books of accounts due to which a loss of Rs. 6.47 million arose.

HORIZONTAL ANALYSIS OF
BALANCE SHEET 2004
Change in Change
2004 2003
Component Rs. in %
Total Assets 1,063,690,810 909,559,563 154,131,247 16.95%
Current Assets 426,957,148 270,781,207 156,175,941 57.68%
Store, spares and loose tools 31,987,765 25,006,193 6,981,572 27.92%
Stock in trade 228,585,000 130,982,000 97,603,000 74.52%
Trade debts 97,410,860 62,447,795 34,963,065 55.99%
Loans and advance 68,732,706 51,750,175 16,982,531 33%
trade deposit& ST prepayment
Other receivables
Cash & bank balance 240,817 595,044 (354,227) -60%
Fixed Assets 632,701,837 634,710,921 (2,009,084) 0%
Property plant & equipment 584,693,890 631,605,309 (46,911,419) -7%
Capital work in progress 48,007,947 3,105,612 44,902,335 1446%
LT security deposit/ Buss Int. 4,031,825 4,067,435 (35,610) -1%
Current Liabilities 501,552,154 324,305,414 177,246,740 55%
Current portion of LT Liabilities 72,683,059 50,615,911 22,067,148 44%
Short term finances 339,693,157 141,029,681 198,663,476 141%
Trade and other payable 58,671,899 93,374,119 (34,702,220) -37%
Taxation 27,289,165 21,590,000 5,699,165 26%
Workers welfare fund 809,816 809,816 - 0%
Dividends 2,405,058 16,885,887 (14,480,829) -86%
Long Term Liabilities 250,631,515 306,758,853 (56,127,338) -18%
Long term financing 131,232,140 153,090,092 (21,857,952) -14%
LT loan from related parties - 12,500,000 (12,500,000) -100%
Liab. against assets lease 84,756,722 107,748,874 (22,992,152) -21%
Deferred liabilities 34,642,653 33,419,887 1,222,766 4%
Stock Holder Equity 311,507,141 278,495,296 33,011,845 12%

HORIZONTAL ANALYSIS OF
INCOME STATEMENT 2004
Change In Change
2,004 2003
Component Rs In %
Sale 1,823,718,770 1,207,816,685 615,902,085 51%
Cost of Sale 1,726,374,666 1,092,472,246 633,902,420 58%
Gross Profit 97,344,104 115,344,439 (18,000,335) -16%
Operating Expenses 46,798,722 36,877,732 9,920,990 27%
Selling 26,095,501 22,790,907 3,304,594 14%
Administrative 19,800,505 14,086,825 5,713,680 41%
Other Operating Expense 902,716 - 902,716 #VALUE!
Other Income 1,129,412 4,640,058 (3,510,646) -76%
Profit from Operation 51,674,794 83,106,765 (31,431,971) -38%
Finance Cost 35,980,962 38,947,303 (2,966,341) -8%
Profit before taxation 15,693,832 41,437,062 (25,743,230) -62%
Provision for taxation 5,461,827 27,398,945 (21,937,118) -80%
Profit after taxation 10,232,005 14,038,117 (3,806,112) -27%

HORIZONTAL ANALYSIS OF
BALANCE SHEET 2005
Change In Change
Component 2005 2004 Rs In %
Total Assets 1,592,438,206 1,063,690,810 528,747,396 49.71%
Current Assets 625,661,697 426,957,148 198,704,549 46.54%
Store, spares and loose tools 40,783,767 31,987,765 8,796,002 27.50%
Stock in trade 374,080,584 228,585,000 145,495,584 63.65%
Trade debts 96,304,997 97,410,860 (1,105,863) -1.14%
Loans and advance 100,714,224 48,467,650 52,246,574 107.80%
trade deposit &ST prepayments 474,623 15,108,097 (14,633,474) -96.86%
Other receivables 12,733,708 5,156,959 7,576,749 146.92%
Cash & bank balance 569,795 240,817 328,978 136.61%
Fixed Assets 962,194,012 632,701,837 329,492,175 52.08%
Property plant & equipment 576,781,430 584,693,890 (7,912,460) -1.35%
Capital work in progress 385,412,582 48,007,947 337,404,635 702.81%
LT security deposit/ Buss Int. 4,582,497 4,031,825 550,672 13.66%
Current Liabilities 701,783,266 501,552,154 200,231,112 39.92%
Trade and other payable 78,258,878 56,575,906 21,682,972 38.33%
Interest/markup on loans 23,901,096 4,501,051 19,400,045 431.01%
Short term borrowing 470,653,091 339,693,157 130,959,934 38.55%
Current portion of LT financing 79,711,948 51,239,152 28,472,796 55.57%
Liab. against assets lease 21,307,548 21,443,907 (136,359) -0.64%
Provision for taxation 27,140,889 27,289,165 (148,276) -0.54%
Workers welfare fund 809,816 809,816 - 0.00%
Long Term Liabilities 526,378,896 250,631,515 275,747,381 110.02%
Long term financing 235,233,758 131,232,140 104,001,618 79.25%
LT loan from related parties 25,000,000 - 25,000,000
Liab against assets lease 69,714,624 84,756,722 (15,042,098) -17.75%
Long term morabaha 160,000,000 - 160,000,000
Deferred liabilities 36,430,514 34,642,653 1,787,861 5.16%
Stock Holder Equity 364,276,044 311,507,141 52,768,903 16.94%

HORIZENTAL ANALYSIS OF
INCOME STATEMENT 2005
Change
Component 2,005 2,004 Change in Rs
in %
Sale 1,300,434,240 1,823,718,770 (523,284,530) -28.69%
Cost of Sale 1,161,427,873 1,726,374,666 (564,946,793) -32.72%
Gross Profit 139,006,367 97,344,104 41,662,263 42.80%
Operating Expenses 39,269,540 46,798,722 (7,529,182) -16.09%
Selling 21,549,110 26,095,501 (4,546,391) -17.42%
Administrative 14,518,498 19,800,505 (5,282,007) -26.68%
Other Operating Expense 3,201,932 902,716 2,299,216 254.70%
Other Income 631,604 1,129,412 (497,808) -44.08%
Profit from Operation 100,368,431 51,674,794 48,693,637 94.23%
Finance Cost 40,156,890 35,980,962 4,175,928 11.61%
Profit before taxation 60,211,541 15,693,832 44,517,709 283.66%
Provision for taxation 7,442,637 5,461,827 1,980,810 36.27%
Profit after taxation 52,768,904 10,232,005 42,536,899 415.72%
HORIZENTAL ANALYSIS OF
BALANCE SHEET 2006
Change InChange
Component 2,006 2,005 Rs In %
1,662,378,71 1,592,438,20
Total Assets 8 6 69,940,512 4%
Current Assets 660,214,515 625,661,697 34,552,818 6%
Store,spares and loose tools 38,155,698 40,783,767 (2,628,069) -6%
Stock in trade 432,458,900 374,080,584 58,378,316 16%
Trade debts 111,900,493 96,304,997 15,595,496 16%
(41,028,235
Loans and advance 59,685,989 100,714,224 ) -41%
trade deposit&ST prepament - 474,623 (474,623) -100%
Other receiveables 9,598,390 12,733,708 (3,135,318) -25%
Cash & bank balance 8,415,045 569,795 7,845,250 1377%
1,002,164,20
Fixed Assets 3 962,194,012
39,970,191 4%
Property plant & equipment 997,581,706 576,781,430
420,800,276 73%
Capital work in progress - 385,412,582
- 0%
LT security deposit/ Buss Int 4,582,497 4,582,497- 0%
Current Liabilities 776,728,182 701,783,266
74,944,916 11%
(11,302,981
Trade and other payable 66,955,897 78,258,878 ) -14%
Interest/markup on loans 30,693,215 23,901,096 6,792,119 28%
Short term borrowing 520,801,224 470,653,091 50,148,133 11%
Current portion of LT financing 117,026,792 79,711,948 37,314,844 47%
Liab against assest lease 29,599,718 21,307,548 8,292,170 39%
(15,489,553
Provision for taxation 11,651,336 27,140,889 ) -57%
Workers welfare fund - 809,816 - 0%
(11,056,951
Long Term Liabilities 515,321,945 526,378,896 ) -2%
(44,836,672
Long term financing 190,397,086 235,233,758 ) -19%
LT loan from ralated parties 25,000,000 25,000,000 - 0%
Liab against assest lease 107,969,382 69,714,624 38,254,758 55%
(26,666,666
Long term morabaha 133,333,334 160,000,000 ) -17%
Deffered liabilities 58,622,143 36,430,514 22,191,629 61%
Stock Holder Equity 370,328,591 364,276,044 6,052,547 2%
HORIZENTAL ANALYSIS OF
INCOME STATEMENT 2006
Change In Change
Component 2006 2005
Rs In %
Sale 2,032,595,077 1,305,251,112 727,343,965 56%
Cost of Sale 1,833,874,238 1,166,244,745 667,629,493 57%
Gross Profit 198,720,839 139,006,367 59,714,472 43%
Operating Expenses 51,190,454 39,269,540 11,920,914 30%
Selling 31,037,642 21,549,110 9,488,532 44%
Administrative 18,480,550 14,518,498 3,962,052 27%
Other Operating Expense 1,672,262 3,201,932 (1,529,670) -48%
Other Income 2,858,266 631,604 2,226,662 353%
Profit from Operation 150,388,651 100,368,431 50,020,220 50%
Finance Cost 121,619,474 40,156,890 81,462,584 203%
Profit before taxation 28,769,177 60,211,541 (31,442,364) -52%
Provision for taxation 35,245,546 7,442,637 27,802,909 374%
Profit/loss after taxation (6,476,369) 52,768,904 (59,245,273) -112%

VERTICLE
ANALYSIS OF
INCOME
STATEMENT
Component 2,006 % 2,005 % 2,004 %
Sale 2,032,595,077 100.0% 1,300,434,240 100.0% 1,823,718,770 100.0%
Cost of Sale 1,833,874,238 90.2% 1,161,427,873 89.3% 1,726,374,666 94.7%
Gross Profit 198,720,839 9.8% 139,006,367 10.7% 97,344,104 5.3%
Operating 51,190,454 2.5% 39,269,540 3.0% 46,798,722 2.6%
Expenses
Selling 31,037,642 1.5% 21,549,110 1.7% 26,095,501 1.4%
Administrative 18,480,550 0.9% 14,518,498 1.1% 19,800,505 1.1%
Other Operating
1,672,262 0.1% 3,201,932 0.2% 902,716 0.0%
Exp.
Other Income 2,858,266 0.1% 631,604 0.0% 1,129,412 0.1%
Profit from
150,388,651 7.4% 100,368,431 7.7% 51,674,794 2.8%
Operation
Finance Cost 121,619,474 6.0% 40,156,890 3.1% 35,980,962 2.0%
Profit before
28,769,177 1.4% 60,211,541 4.6% 15,693,832 0.9%
taxation
Provision for
35,245,546 1.7% 7,442,637 0.6% 5,461,827 0.3%
taxation
Profit after taxation (6,476,369) -0.3% 52,768,904 4.1% 10,232,005 0.6%
VERTICLE
ANALYSIS
OF
BALANCE
SHEET
Component 2006 % 2005 % 2004 % 2003 %
Total 1,662,378, 100.00 1,592,438, 100.00 1,063,690, 100.00 909,559,5 100.00
Assets 718 % 206 % 810 % 63 %
Current 660,214,51 39.72 625,661,69 39.29 426,957,14 40.14 270,781,2 29.77
Assets 5 % 7 % 8 % 07 %
Store,spares
and loose 25,006,19
tools 38,155,698 2.30% 40,783,767 2.56% 31,987,765 3.01% 3 2.75%
Stock in432,458,90 26.01 374,080,58 23.49 228,585,00 21.49 130,982,0 14.40
trade 0 % 4 % 0 % 00 %
111,900,49 62,447,79
Trade debts 3 6.73% 96,304,997 6.05% 97,410,860 9.16% 5 6.87%
Loans and 100,714,22 51,750,17
advance 59,685,989 3.59% 4 6.32% 48,467,650 4.56% 5 5.69%
trade - 474,623 0.03% 15,108,097 1.42%
deposit&ST
prepament
Other
receiveables 9,598,390 0.58% 12,733,708 0.80% 5,156,959 0.48%
Cash &
bank
balance 8,415,045 0.51% 569,795 0.04% 240,817 0.02% 595,044 0.07%
Fixed 1,002,164, 60.28 962,194,01 60.42 632,701,83 59.48 634,710,9 69.78
Assets 203 % 2 % 7 % 21 %
Property
plant &997,581,70 60.01 576,781,43 36.22 584,693,89 54.97 631,605,3 69.44
equipment 6 % 0 % 0 % 09 %
Capital work 385,412,58 24.20
in progress - 0.00% 2 % 48,007,947 4.51% 3,105,612 0.34%
LT security
deposit 4,582,497 0.28% 4,582,497 0.29% 4,031,825 0.38% 4,067,435 0.45%
Current 776,728,18 46.72 701,783,26 44.07 501,552,15 47.15 324,305,4 35.66
Liabilities 2 % 6 % 4 % 14 %
Trade and
other 93,374,11 10.27
payable 66,955,897 4.03% 78,258,878 4.91% 56,575,906 5.32% 9 %
Interest/mar
kup on loans30,693,215 1.85% 23,901,096 1.50% 4,501,051 0.42% - -
Short term520,801,22 31.33 470,653,09 29.56 339,693,15 31.94 141,029,6 15.51
borrowing 4 % 1 % 7 % 81 %
Current
portion of LT117,026,79 50,615,91
financing 2 7.04% 79,711,948 5.01% 51,239,152 4.82% 1 5.56%
Liab against
assest lease 29,599,718 1.78% 21,307,548 1.34% 21,443,907 2.02% - -
Provision for 21,590,00
taxation 11,651,336 0.70% 27,140,889 1.70% 27,289,165 2.57% 0 2.37%
Workers
welfare fund - 0.00% 809,816 0.05% 809,816 0.08% 809,816 0.09%
Long Term515,321,94 31.00 526,378,89 33.05 250,631,51 23.56 306,458,8 33.69
Liabilities 5 % 6 % 5 % 52 %
Long term190,397,08 11.45 235,233,75 14.77 131,232,14 12.34 153,090,0 16.83
financing 6 % 8 % 0 % 92 %
LT loan from
ralated 12,500,00
parties 25,000,000 1.50% 25,000,000 1.57% - 0.00% 0 1.37%
Liab against107,969,38 107,748,8 11.85
assest lease 2 6.49% 69,714,624 4.38% 84,756,722 7.97% 74 %
Long term133,333,33 160,000,00 10.05
morabaha 4 8.02% 0 % - 0.00% - -
Deffered 33,419,88
liabilities 58,622,143 3.53% 36,430,514 2.29% 34,642,653 3.26% 7 3.67%
Stock
Holder 370,328,59 22.28 364,276,04 22.88 311,507,14 29.29 278,495,2 30.62
Equity 1 % 4 % 1 % 96 %

SHORT TERM DEBT PAYING ABILITY

Net working Capital

Net Working Capital = Current assets Current Liabilities

2006 = 660214515 776728182 = -116513667

2005 = 625661697-701783266 = -76121569

2004 = 426957148-501552154 = -74595006

Current Ratio

Current Ratio = Current assets Current Liabilities

2006 = 660214515 / 776728182 = 0.85:1

2005 = 625661697 / 701783266 = 0.89:1

2004 = 426957148 / 501552154 =0 .85:1

Quick Ratio

Quick Ratio = Current Assets Inventory Current Liabilities

2006 = 660214515 470614598 776728182 = 0.244:1

2005 = 625661697 414864351701783266 = 0.30:1

2004 = 426957148260572765 501552154 = 0.33:1

Cash Ratio

Cash Ratio = Cash + Marketable Securities Current Liabilities

2006 = 8415045 + 0 776728182 = 0.011: 1

2005 = 569795 + 0 701783266 = 0.00081:1

2004 = 240817 + 0 501552154 = 0.00048:1

Cash Ratio = Total Cash Total Asset x 100

2006 = 8415045 1662378718 x 100 = .51%

2005 = 569795 1592438206 x 100 = 0.035%

2004 = 240817 1063690810 x 100 = 0.023%

Inventory Turnover

Inventory Turnover = C.G.S. Inventory

2006 = 1833874238 432458900 = 4.2 times a year

2005 = 1161427873 374080584 = 3.1 times a year

2004 = 1726374666 228585000 = 7.6 times a year

Average age of inventory

Average age of inventory = No of days in a year Inventory turnover

2006 = 360 4.2 = 86 days

2005 = 360 3.1 = 116.12 days

2004 = 360 7.5 = 48 days

Average Collection Period

Average Collection Period = A / Receivable Net Sales / Day

2006 = 111900493 5646097.4 =19.82 days

2005 = 96304997 3612317.3 =26.66 days

2004 = 97410860 5065885.4 =19.23 days

A/R Turn over

A/R Turn over = No. of working days ACP

2006 = 360 19.82 = 18.16 times in a year

2005 = 360 26.67 = 13.50 times in a year

2004 = 360 19.23 = 18.72 times in a year

Operating Cycle

Operating Cycle = A. A. I. + A.C.P.

2006 = 86 + 19.82 = 105.82 days

2005 = 116 + 26.67 = 142.79 days

2004 = 48 + 19.23 = 67.23 days

LONG TERM DEBT PAYING ABILITY

Time Interest Earned Ratio

Time Interest Earned Ratio = EBIT (Interest Exp + Capitalize Int. Exp)

2006 = 150388651 (121619474+0) =1.23

2005 = 100368431 (40156890 + 10643527) =1.98

2004 = 52577510 (35980962 + 0) =1.46

Time interest Earned Ratio (Cash Basis) = (EBIT +Dep.) (Int. +cap. I)

2006 = (150388651 + 99573098) (121619474 + 0) =2.1

2005 = (100368431 + 47629899) (40156890 + 10643527) =2.9

2004 = (52577510 + 66267690) (35980962 + 0) =3.3

Fixed Charges Coverage Ratio

Fixed Charges Coverage Ratio = EBIT (Interest+Cap.Int+Principle repayment)

2006 = 150388651 (121619474 + 0 + 79711948) =0.75

2005 =100368431 (40156890 + 10643527 + 51239152) = 0.98

2004 =52577510 (35980962 + 0 + 50615911) =0.61

Fixed Charges Coverage Ratio (Cash Basis) = (EBIT+Dep.) (I+ Cap.Int,+Prin.repay)

2006 = (150388651 + 99573098) (121619474 + 0 + 79711948) =1.24

2005 = (100368431+ 47629899) (40156890 + 10643527 + 51239152) =1.45

2004 = (52577510 + 66267690) (35980962 + 0 + 50615911) =1.37

Debt Ratio

Debt Ratio = Total Liabilities Total Assets

2006 = 12920501271662378718 = 0.78

2005 = 12281621621592438206 = 0.77

2004 = 752183669 1063690810 = 0.71

Debt Equity Ratio

Debt Equity Ratio = Total Liabilities Stock Holders Equity

2006 = 1292050127 370328591 = 3.5

2005 = 1228162162 36427044 = 3.4

2004 = 752183669 311507141 = 2.4

Total Capitalization Ratio

Total Capitalization Ratio = LTL (LTL + total Equity)

2006 = 515321945 (515321945 + 370328951) = 0.58

2005 = 526378896 (526378896 + 364276044) = 0.59

2004 = 250631515 (250631515 + 311507141) = 0.45

PROFITABILITY RATIO

Net Profit Margin Ratio

Net Profit Margin = NPAT Net Sales *100

2006 = (6476369) 2032595077 = -0.32%

2005 = 52768904 1300434240 = 4%

2004 = 10232005 1823718770 = 0.56%

Total Asset Turn over

Total Asset Turn over = Net Sales Total Assets

2006 = 2032595077 1662378718 = 1.22

2005 = 1300434240 1592438206 = 0.82

2004 = 1823718770 1063690810 = 1.71

Return on Assets

Return on Assets = NPAT Total Assets *100

2006 = (6476369) 1662378718 = -0.39%

2005 = 52768904 1592438206 = 3.3%

2004 = 10232005 1063690810 = 0.96%

Return on Operating Assets

Return on Operating Assets = Operating Profit Operating Assets

2006 = 150388651 1657796221 = 0.1

2005 = 100368431 1202443127 = 0.1

2004 = 51674794 1011651038 = 0.05

Operating Profit Margin

Operating Profit Margin = Operating Profit Net Sales*100

2006 = 150388651 2032595077 = 7.4%

2005 = 100368431 1300434240 = 7.7%

2004 = 51674794 1823718770 = 2.8%

Operating Asset Turn over

Operating Asset Turn over = Net Sales Operating Assets

2006 = 2032595077 1657796221 = 1.23

2005 = 1300434240 1202443127 = 1.08

2004 = 1823718770 1011651038 = 1.80

Return on Total Asset Variation

Return on Total Asset Variation = (NPAT + Interest) Total Asset

2006 = (-6476369 + 121619474) 1662378718 = 0.069

2005 = (52768904 + 40156890) 1592438206 = 0.058

2004 = (10232005 + 35980962) 1063690810 = 0.044

Return on Common Stock Equity

Return on Common Stock Equity = NPAT T.C.S. Equity

2006 = (6476369) 370328591 = - 0.017

2005 = 52768904 364276044 = 0.15

2004 = 10232005 311507141 = 0.033

ANALYSIS FOR EQUITY INVESTOR

Degree of Operating Leverage

Degree of Operating Leverage = EBIT EBT

2006 = 150388651 28769177 = 5.2

2005 = 100368431 60211541 = 1.7

2004 = 52577510 15693832 = 3.4

Earning Per Share

Earning per share = NPAT No. of outstanding common stock

2006 = (6476369) 12528912 = (0.52)

2005 = 52768904 12528912 = 4.21

2004 = 10232005 11524103 = 0.89

Dividend Payout Ratio

Dividend Payout Ratio = Dividend per Share EPS *100

2006 = 0 (0.52) = 0

2005 = 1.25 4.21 = 30%

2004 = 0 0.89 = 0

Plow Back Ratio

Plow Back Ratio = 1 Dividend pay out ratio

2006 = 1 0 = 100%

2005 = 1 30% = 70%

2004 = 1 0 = 100%

CASH FLOW RATIOS

Cash Flow from Operation (Current Maturity of LTL + ST Bank Borrowing)

2006 = 182229859 (79711948 + 520801224) = 0.30

2005 = (34514699) (51239152 + 470653091) = (0.06)

2004 = (72158260) (50615911 +339693157) = (0.18)

Cash Flow from Operation Total Debts

2006 = 182229859 1292050127= 0.14

2005 = (34514699) 1228162162= (0.02)

2004 = (72158260) 752183669= (0.09)

CF on Per Share Basis = CFO No. of outstanding common stock

2006 = 182229859 12528912 = 14.54

2005 = (34514699) 12528912= (2.75)

2004 = (72158260) 11524103 = (6.26)

Dividend per Share CF on Per share basis

2006 = 0 14.54 = 0

2005 = 1.25 (2.75) = (0.45)

2004 = 0 (6.26) = 0

Introduction of the Company:

Mahmood Group is vertically based on integrated industries and started business in

1935, by setting up a tanning unit. Since then, the group has grown immensely in the
fields of cotton ginning, spinning and weaving.

Objectives:

'Farm to Fabric' is the objective of the company. Being vertically integrated, the group
possesses its own vast cotton farms in the area of Multan, a region of Punjab. The
cotton ginning, seed oil extraction, spinning and weaving units are located at strategic
places for efficient and harmonious working of the various production units.

Current Performance:

The only group which starts from cotton farming to ginning, spinning and weaving,
which gives it a distinction over the entire textile industry of Pakistan.

Certified by ISO, Supima, Lycra and Oko-tex.

Employees = 11,000.

Turnover = US$ 215 million.

Exports ratio = 90%.

Employee Turnover = 10%.

Responsible Corporate Citizenship

Core Values:

The group is always open for strategic alliances & long term relationships (Core
Concept and basic idea). We believe in passing on the benefit of less cost to our buyers
instead of increasing our own overheads, however there is no compromise on quality or
machinery

Future Plans:

In an era of trade globalization, our vision is excellence in terms of quality with satisfied
internal and external valued customers. The objective is to achieve continuous
improvement in quality through professional management, state-of-the-art equipment,
and highly motivated workforce.

We at Mahmood Group are demonstrating sustained growth over the period of last 3
decades with reasonably good return on investment which have been utilized to give
high quality products to our valued customers at least possible prices.

Vision Statement
To be recognized internationally and locally as dynamic, quality conscious and ever
progressive Textile Product manufacturer in the textile Industry of Pakistan.

Mission Statement

Mahmood Group is committed to:

Be ethical in its practices.

Excel through continuous improvement by adopting most modernized technology in

production.

Operate through professional Team work.

Retain our position as leading and innovative in the Textile Industry.

Achieve Excellence in the quality of our product.

Be a part of countrys economic development and social Prosperity

HORIZONTAL ANALYSIS OF
BALANCE SHEET 2006
Change In Change
Component 2,006 2,005 Rs In %
Total Assets 3,191,311,845 2,621,373,158 569,938,687 22%
Current Assets 1,386,908,396 1,260,569,339 126,339,057 10%
Store, spares and loose tools 97,176,451 65,443,171 31,733,280 48%
Stock in trade 939,875,596 854,404,570 85,471,026 10%
Trade debts 69,394,339 44,812,703 24,581,636 55%
Short term Investments 138,494,733 169,036,865 (30,542,132) -18%
Loans and advance 74,394,137 25,952,751 48,441,386 187%
trade deposits &ST prepayments 1,949,959 1,550,875 (474,623) -31%
Other receivables 12,085,980 18,696,131 (6,610,151) -35%
Sales Tax Refundable 45,952,942 70,986,096 (25,033,154) -35%
Cash & bank balance 7,584,259 9,686,177 (2,101,918) -22%
Non Current Assets 1,804,403,449 1,360,803,819 443,599,630 33%
Property plant & equipment 1,665,827,350 1,182,801,694 483,025,656 41%
Investment Property - 14,058 (14,058) -100%
Long Term Investment 134,804,956 176,807,382 (42,002,426) -24%
LT security deposit/ Buss Int 3,771,143 1,180,685 2,590,458 219%
Current Liabilities 1,055,824,886 887,924,344 167,900,542 19%
Trade and other payable 197,499,162 231,241,520 (33,742,358) -15%
Interest/markup on loans 13,793,090 15,995,363 (2,202,273) -14%
Short term borrowing 768,552,579 584,313,022 184,239,557 32%
Current portion of LT Liabilities 74,679,405 53,108,029 21,571,376 41%
Provision for taxation 1,300,650 3,266,410 (1,965,760) -60%
Long Term Liabilities 2,135,486,959 1,733,448,814 402,038,145 23%
Long term financing 550,618,900 366,446,223 184,172,677 50%
Deferred liabilities 33,043,700 18,638,048 14,405,652 77%
Stock Holder Equity 1,551,824,359 1,348,364,543 203,459,816 15%
HORIZENTAL ANALYSIS OF
BALANCE SHEET 2005
Change In
Component 2005 2004 Change In Rs %
2,591,371,77 1,557,101,06
Total Assets 6 8 1,034,270,708 66.42%
1,260,569,33
Current Assets 9 696,002,889 564,566,450 81.12%
Store, spares and loose tools 65,443,171 53,646,568 11,796,603 21.99%
Stock in trade 854,404,570 388,966,000 465,438,570 119.66%
Trade debts 44,812,703 67,760,129 (22,947,426) -33.87%
Shot term Investment 169,036,865 - 169,036,865 #DIV/0!
Loans and advance 25,952,751 124,777,074 (98,824,323) -79.20%
trade deposit 1,550,875 1,246,920 303,955 24.38%
Other receivables 89,682,227 43,556,248 46,125,979 105.90%
Cash & bank balance 9,686,177 16,049,950 (6,363,773) -39.65%
1,182,801,69
Non Current Assets 4 712,445,091 470,356,603 66.02%
Property plant & equipment 738,093,535 701,075,042 37,018,493 5.28%
Capital work in progress 444,708,159 11,370,049 433,338,110 3811.22%
Investment Property 14,058 14,058 - 0.00%
Long Term Investment 146,806,000 146,806,000 - 0.00%
LT security deposit/ Buss Int 1,180,685 1,833,030 (652,345) -35.59%
Current Liabilities 887,924,344 307,176,894 580,747,450 189.06%
Trade and other payable 231,241,520 142,417,526 88,823,994 62.37%
Interest/markup on loans 15,995,363 1,411,284 14,584,079 1033.39%
Short term borrowing 584,313,022 134,520,221 449,792,801 334.37%
Current portion of LT Liabilities 53,108,029 26,536,600 26,571,429 100.13%
Provision for taxation 3,266,410 2,291,263 975,147 42.56%
1,703,447,43 1,249,924,17
Long Term Liabilities 2 4 453,523,258 36.28%
Long term financing 366,446,223 39,804,847 326,641,376 820.61%
Deferred liabilities 18,638,048 17,741,861 896,187 5.05%
1,318,363,16 1,192,377,46
Stock Holder Equity 1 6 125,985,695 10.57%
HORIZENTAL ANALYSIS OF
BALANCE SHEET 2004
Change inChange
Component 2004 2003 Rs in %
Total Assets 1,557,101,068 1,471,031,066 86,070,002 5.85%
Current Assets 696,002,889 594,686,601 101,316,288 17.04%
Store,spares and loose tools 53,646,568 55,484,417 (1,837,849) -3.31%
Stock in trade 388,966,000 220,730,167 168,235,833 76.22%
Trade debts 67,760,129 48,589,001 19,171,128 39.46%
Advances & Other receiveables 169,580,242 97,068,120 72,512,122 75%
Cash & bank balance 16,049,950 172,814,896 (156,764,946) -91%
Non Current Assets 632,701,837 634,710,921 (2,009,084) 0%
Property plant & equipment 701,089,100 708,267,837 (7,178,737) -1%
Capital work in progress 11,370,049 19,626,598 (8,256,549) -42%
Long Term Investments 146,806,000 146,806,000 - 0%
Long Term Deposits 1,833,030 1,644,030 189,000 11%

Current Liabilities 307,176,894 248,196,110 58,980,784 24%

Current portion of LT Liabilities 26,536,600 75,310,394 (48,773,794) -65%
Short term finances 134,520,221 297,885 134,222,336 45058%
Trade and other payable 143,335,977 130,515,086 12,820,891 10%
Provision for Taxation 2,291,263 1,745,999 545,264 31%
Dividends 492,833 40,326,746 (39,833,913) -99%
Long Term Liabilities 1,249,924,174 1,206,228,956 43,695,218 4%
Long term financing 39,804,847 66,341,447 (26,536,600) -40%
IQRA Surcharge P/A - 1,713,574 (1,713,574) -100%
Deffered liabilities 17,741,861 1,845,111 15,896,750 862%
Stock Holder Equity 1,192,377,466 1,136,328,824 56,048,642 5%
HORIZENTAL ANALYSIS OF
INCOME STATEMENT 2006
Change In Change
Component 2006 2005 Rs In %
3,839,168,82 2,878,130,06
Sale 0 6 961,038,754 33%
3,435,116,79 2,487,727,79
Cost of Sale 1 9 947,388,992 38%
Gross Profit 404,052,029 390,402,267 13,649,762 3%
Other Opening Income 42,969,100 8,286,375 34,682,725 419%
Distribution Cost 98,500,306 88,692,539 9,807,767 11%
Administrative 46,198,337 28,621,516 17,576,821 61%
Other Operating Expense 22,201,896 36,433,230 (14,231,334) -39%
Finance Cost 127,242,498 57,811,012 69,431,486 120%
Share of Profits of Associates 24,803,574 22,861,217 1,942,357 8%
Profit before taxation 177,681,666 209,991,562 (32,309,896) -15%
Provision for taxation 67,553,744 36,209,675 31,344,069 87%
Profit/loss after taxation 110,127,922 173,781,887 (63,653,965) -37%
HORIZENTAL ANALYSIS OF
INCOME STATEMENT 2005
Change
Component 2,005 2,004 Change in Rs in %
Sale 2,878,130,066 3,909,712,718 (1,031,582,652) -26.39%
Cost of Sale 2,487,727,799 3,652,569,264 (1,164,841,465) -31.89%
Gross Profit 390,402,267 257,143,454 133,258,813 51.82%
Operating Expenses 153,747,285 133,279,278 20,468,007 15.36%
Selling 88,692,539 95,151,804 (6,459,265) -6.79%
Administrative 28,621,516 32,247,865 (3,626,349) -11.25%
Other Operating Expense 36,433,230 5,879,609 30,553,621 519.65%
Other Income 8,286,375 8,326,372 (39,997) -0.48%
Profit from Operation 244,941,357 132,190,548 112,750,809 85.29%
Finance Cost 57,811,012 34,420,914 23,390,098 67.95%
Profit before taxation 187,130,345 97,769,634 89,360,711 91.40%
Provision for taxation 36,209,675 41,720,992 (5,511,317) -13.21%
Profit after taxation 150,920,670 56,048,642 94,872,028 169.27%
HORIZENTAL ANALYSIS OF
INCOME STATEMENT 2004
Component 2,004 2003 Change In Change In
Rs %
Sale 3,908,678,975 3,172,585,332 736,093,643 23%
Cost of Sale 3,652,569,264 2,776,538,726 876,030,538 32%
Gross Profit 256,109,711 396,046,606 (139,936,895) -35%
Admin & Selling Exp 127,399,669 119,630,035 7,769,634 6%
Operating Profit 128,710,042 276,416,571 (147,706,529) -53%
Other Income 9,360,115 9,411,990 (51,875) -1%
Finance Cost 34,420,914 50,075,475 (15,654,561) -31%
Misc Charges 5,879,609 14,079,928 (8,200,319) -58%
Profit before taxation 97,769,634 221,673,158 (123,903,524) -56%
Provision for taxation 41,720,992 28,683,088 13,037,904 45%
Profit after taxation 56,048,642 192,990,070 (136,941,428) -71%

VERTICLE
ANALYSIS OF
BALANCE SHEET
Component 2006 % 2005 % 2004 %
Total Assets 3,191,311,845 100 2,621,373,15 100 % 1,557,101,06 100.00%
% 8 8
Current Assets 1,386,908,39 43% 1,260,569,33 48 % 696,002,889 44.70%
6 9
Store, spares and 97,176,451 3% 65,443,171 2% 53,646,568 3.45%
loose tools
Stock in trade 939,875,596 29% 854,404,570 32% 388,966,000 24.98%
Trade debts 69,394,339 2% 44,812,703 1% 67,760,129 4.35%
Short term
Investments 138,494,733 4% 169,036,865 6% - 0.00%
Loans and advance 74,394,137 2% 25,952,751 1% 0.00%
trade deposit &ST 0.06
prepayments 1,949,959 % 1,550,875 0.06% 0.00%
0.38
Other receivables 12,085,980 % 18,696,131 0.71% 0.00%
Total Loans,
advances, Deposits
& other R/A 88,430,076 2% 46,199,757 1.76% 169,580,242 10.89%
Sales Tax
Refundable 45,952,942 1% 70,986,096 2.71% - 0.00%
Cash & bank 0.24
balance 7,584,259 % 9,686,177 0.37% 16,049,950 1.03%
Non Current 1,804,403,44 1,360,803,81 51.91
Assets 9 56 % 9 % 632,701,837 40.63%
Property plant & 1,665,827,35 1,182,801,69 45.12
equipment 0 52 % 4 % 701,089,100 45.03%
0.00
Investment Property - % 14,058 0.00% - 0.00%
Long Term
Investment 134,804,956 4 % 176,807,382 6.74% 146,806,000 9.43%
LT security deposit/ 0.12
Buss Int 3,771,143 % 1,180,685 0.05% 1,833,030 0.12%
Capitan Work in 0.00
Progress - % - 0.00% 11,370,049 0.73%
1,055,824,88 33.87
Current Liabilities 6 33% 887,924,344 % 307,176,894 19.73%
Trade and other
payable 197,499,162 6% 231,241,520 8.82% 143,335,977 9.21%
Interest/markup on 0.43
loans 13,793,090 % 15,995,363 0.61% - 0.00%
Short term768,552,579 24% 584,313,022 22.29 134,520,221 8.64%
borrowing %
Current portion of
LT Liabilities 74,679,405 2% 53,108,029 2.03% 26,536,600 1.70%
Provision for 0.04
taxation 1,300,650 % 3,266,410 0.12% 2,291,263 0.15%
0.00
Dividends - % - 0.00% 492,833 0.03%
Long Term 2,135,486,95 1,733,448,81 66.13 1,249,924,17
Liabilities 9 66 % 4 % 4 80.27%
13.98
Long term financing 550,618,900 17 % 366,446,223 % 39,804,847 2.56%
Deferred liabilities 33,043,700 1 % 18,638,048 0.71% 17,741,861 1.14%
1,551,824,35 1,348,364,54 51.44 1,192,377,46
Stock Holder Equity 9 48 % 3 % 6 76.58%
VERTICLE
ANALYSIS OF
INCOME
STATEMENT
Component 2,006 % 2,005 % 2,004 %
Sale 3,839,168,82 100.0 2,878,130,06 100.0 3,908,678,97 100.0%
0 % 6 % 5
Cost of Sale 3,435,116,79 89.5% 2,487,727,79 86.4% 3,652,569,26 93.4%
1 9 4
Gross Profit 404,052,029 10.5% 390,402,267 13.6% 256,109,711 6.6%
Other Opening
Income 42,969,100 1.1% 8,286,375 0.3% 9,360,115 0.2%
Distribution Cost 98,500,306 2.6% 88,692,539 3.1%
Administrative 46,198,337 1.2% 28,621,516 1.0%
Other Operating
Expense 22,201,896 0.6% 36,433,230 1.3%
Total Administrative
& Selling Exp 166,900,539 4.3% 153,747,285 6.2% 127,399,669 3.3%
Finance Cost 127,242,498 3.3% 57,811,012 2.0% 34,420,914 0.9%
Share of Profits of
Associates 24,803,574 0.6% 22,861,217 0.8% - 0.0%
Misc Cost - 0.0% - 5,879,609 0.2%
Profit before taxation 177,681,666 4.6% 209,991,562 7.3% 97,769,634 2.5%
Provision for taxation 67,553,744 1.8% 36,209,675 1.3% 41,720,992 1.1%
Profit/loss after
taxation 110,127,922 2.9% 173,781,887 6.0% 56,048,642 1.4%

SHORT TERM DEBT PAYING ABILITY

Net working Capital

Net Working Capital = Current Assets Current Liabilities

2006 = 1,386,908,396-1,055,824,886 = 331083510

2005 = 1,260,569,339 - 887,924,344 = 372644995

2004 = 696002889 - 307176894 = 388825995

Current Ratio

Current Ratio = Current assets Current Liabilities

2006 = 1,386,908,396 / 1,055,824,886 = 1.31:1

2005 = 1,260,569,339 / 887,924,344 = 1.41:1

2004 = 696002889 / 307176894 = 2.26:1

Quick Ratio

Quick Ratio = Current Assets Inventory Current Liabilities

2006 = 1,386,908,396 1,037,052,047 1,055,824,886 = 0.33:1

2005 = 1,260,569,339 919847741 887,924,344 = 0.38:1

2004 = 696002889 442612568 307176894 = 0.82:1

Cash Ratio
Cash Ratio = Cash + Marketable Securities Current Liabilities

2006 = 7,584,259 + 138494733 1,055,824,886 = 0.13: 1

2005 = 9,686,177 + 169036865 887,924,344 = 0.20: 1

2004 = 16049950 + 0 307176894 = 0.05: 1

Cash Ratio = Total Cash Total Asset x 100

2006 = 146078992 3,191,311,845 x 100 = 4.57%

2005 = 178732042 2,621,373,158 x 100 = 6.81%

2004 = 16049950 1,557,101,068 x 100 = 1.03%

Inventory Turnover

Inventory Turnover = C.G.S. Inventory

2006 = 3,435,116,791 939875596 = 3.65 times a year

2005 = 2,487,727,799 854404570 = 2.91 times a year

2004 = 3,652,569,264 388966000 = 9.39 times a year

Average age of inventory

Average age of inventory = No of days in a year Inventory turnover

2006 = 360 3.65 = 98.63 days

2005 = 360 2.91 = 123.71 days

2004 = 360 9.39 = 38.33 days

Average Collection Period

Average Collection Period = A / Receivable Net Sales / Day

2006 = 69,394,339 3,839,168,820 /360 =6.50 days

2005 = 44,812,703 2,878,130,066 /360 =5.60 days

2004 = 67,760,129 3,908,678,975 /360 =6.24 days

A/R Turn over

A/R Turn over = No. of working days ACP

2006 = 360 6.50 = 55.38 times in a year

2005 = 360 5.60 = 64.28 times in a year

2004 = 360 6.24 = 57.69 times in a year

Operating Cycle

Operating Cycle = A. A. I. + A.C.P.

2006 = 98.63 + 6.50 = 105.13 days

2005 = 123.71 + 5.60= 129.31 days

2004 = 38.339 + 6.24= 44.57 days

LONG TERM DEBT PAYING ABILITY

Times Interest Earned Ratio

Times Interest Earned Ratio = EBIT (Interest Exp + Capitalize Int. Exp)

2006 = 304,924,164 (127,242,498 + 0) = 2.39

2005 = 267,802,574 (57,811,012 +0) = 4.63

2004 = 132,190,548 (34,420,914 +0) = 3.84

Times interest Earned Ratio (Cash Basis) = (EBIT +Non cash Exp) (Int. +cap. I)
2006 = (304,924,164 + 111864934) 127,242,498 = 3.27

2005 = (267, 802,574 + 60976697) 57,811,012 = 5.68

2004 = (132,190,548 + 79038564) 34,420,914 = 6.13

Fixed Charges Coverage Ratio

Fixed Charges Coverage Ratio = EBIT (Interest+Cap.Int+Principle Repayment)

2006 =304,924,164 (127,242,498 + 0 + 53108029) = 1.69

2005 =267,802,574 (57,811,012 + 0 + 26536600) = 3.17

2004 =132,190,548 (34,420,914 +0+ 75310394) = 1.20

Fixed Charges Coverage Ratio (Cash Basis) = (EBIT+Non.cash

Exp) (I+Cap.Int+Prin.repay)

2006 = (304,924,164 + 111864934) (127,242,498 +0+ 53108029) =2.31

2005 = (267,802,574 + 60976697) (57,811,012+ 0+26536600) =3.89

2004 = (132,190,548 + 79038564) (34,420,914+ 0+ 75310394) = 1.92

Debt Ratio

Debt Ratio = Total Liabilities Total Assets

2006 = 1,639,487,486 3,191,311,845 = 0.51

2005 = 1,273,008,615 2,621,373,158 = 0.49

2004 = 364,723,602 1,557,101,068 = 0.23

Debt Equity Ratio

Debt Equity Ratio = Total Liabilities Stock Holders Equity

2006 = 1,639,487,486 1,551,824,359 = 1.05

2005 = 1,273,008,615 1,348,364,543 = 0.944

2004 = 364,723,602 1,192,377,466 = 0.305

Total Capitalization Ratio

Total Capitalization Ratio = LTL (LTL + Total Equity)

2006 = 583662600 (583662600+ 1,551,824,359) = 0.27

2005 = 385084271 (385084271+ 1,348,364,543) = 0.22

2004 = 57,546,708 (57,546,708 + 1,192,377,466) = 0.05

PROFITABILITY RATIO

Net Profit Margin Ratio

Net Profit Margin = NPAT Net Sales x100

2006 = 110,127,922 3,839,168,820 = 2.86%

2005 = 173,781,887 2,878,130,066 = 6.03%

2004 = 56,048,642 3,908,678,975 = 1.43%

Total Asset Turn over

Total Asset Turn over = Net Sales Total Assets

2006 = 3,839,168,820 3,191,311,845 = 1.20

2005 = 2,878,130,066 2,621,373,158 = 1.09

2004 = 3,908,678,975 1,557,101,068 = 2.51

Return on Assets

Return on Assets = NPAT Total Assets *100

2006 = 110,127,922 3,191,311,845 = 3.45%

2005 = 173,781,887 2,621,373,158 = 6.62%

2004 = 56,048,642 1,557,101,068 = 3.59%

Return on Operating Assets

Return on Operating Assets = Operating Profit Operating Assets

2006 = 259353386 3,052,735,746 = 8.49%

2005 = 273088212 2,443,371,033 = 11.17%

2004 = 128,710,042 1,397,091,989 = 9.21%

Operating Profit Margin

Operating Profit Margin = Operating Profit Net Sales x 100

2006 = 259353386 3,839,168,820 = 6.75%

2005 = 273088212 2,878,130,066 = 9.48%

2004 = 128,710,042 3,908,678,975 = 3.29%

Operating Asset Turn over

Operating Asset Turn over = Net Sales Operating Assets

2006 = 3,839,168,820 3,052,735,746 = 1.25

2005 = 2,878,130,066 2,443,371,033 = 1.17

2004 = 3,908,678,975 1,397,091,989 = 2.79

Return on Total Asset Variation

Return on Total Asset Variation = (NPAT + Interest) Total Asset

2006 = (110,127,922 + 127,242,498) 3,191,311,845 = 0.074

2005 = (173,781,887 + 57,811,012) 2,621,373,158 = 0.088

2004 = (56,048,642 + 34,420,914) 1,557,101,068 = 0.058

Return on Common Stock Equity

Return on Common Stock Equity = NPAT T.C.S. Equity

2006 = 110,127,922 1,551,824,359 = 0.07

2005 = 173,781,887 1,348,364,543 = 0.12

2004 = 56,048,642 1,192,377,466 = 0.04

ANALYSIS FOR EQUITY INVESTOR

Degree of Operating Leverage

Degree of Operating Leverage = EBIT EBT

2006 = 304,924,164 177,681,666 = 1.71

2005 = 267, 802,574 209,991,562 = 1.25

2004 = 132,190,548 97,769,634 = 1.35

Earning Per Share

Earning per share = NPAT No. of outstanding common stock

2006 = 110,127,922 9984989 = 11.03

2005 = 173,781,887 9973989 = 17.42

2004 = 56,048,642 9973989 = 5.62

Dividend Payout Ratio

Dividend Payout Ratio = Dividend per Share EPS *100

2006 = 4 11.03 x 100 = 36.26 %

2005 = 4 17.42 x 100 = 22.96 %

2004 = 2.5 5.62 x 100 = 44.48 %

Plow Back Ratio

Plow Back Ratio = 1 Dividend Pay Out Ratio

2006 = 1 36.26% = 63.73%

2005 = 1 22.96% = 77.03%

2004 = 1 44.48% = 55.51%

CASH FLOW RATIOS

Cash Flow from Operation (Current Maturity of LTL + ST Bank Borrowing)

2006 = 187908173 ( 53,108,029 + 768,552,579) = 0.22

2005 = (4182517) ( 26,536,600 + 584,313,022) = (0.006)

2004 = (76736059) (75,310,394 + 134,520,221) = (0.36)

Cash Flow from Operation Total Debts

2006 = 187908173 1639487486= 0.11

2005 = (4182517) 1273008615= (0.003)

2004 = (76736059) 364723602 = (0.21)

CF on Per Share Basis = CFO No. of outstanding common stock

2006 = 187908173 9984989 = 18.81

2005 = (4182517) 9973989 = (0.41)

2004 = (76736059) 9973989 = (7.61)

Dividend per Share CF on Per share basis

2006 = 4 2.70 =1.48

2005 = 4 (0.09) = (44.44)

2004 = 2.5 (1.13) = (2.21)

References: http://www.ahtml.com.pk/

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