Presented To:

Mr. Hamza Mukhtar

Presented By:
 Faheem Anwar
 Usman Butt
 Financial Statements
Analysis
We will done our analysis in three Steps:

Economic Analysis

Industry Analysis

Firm Analysis
 Common size analysis
 Vertical analysis
 Horizontal analysis
 Economic Analysis

 Internal Affairs & foreign trade

 Inflation
 GDP Growth
 Credit Rating
 Unemployment
 Export High Duties
 Smuggling of Foreign Exchange
Internal Affairs and Foreign
Exchange
 Political instability
 Electricity Breakdown
 Sui Gas
 Devalue Of Rupee
 Inflation

 Inability to reduce prices of petroleum

products.

 international commodity prices

 Inflation
Item 2005-06 2006-07 2007-08

CPI 7.9 7.8 10.3

Food Group 6.9 10.4 15.0
Non Food 8.6 6.0 7.5
Group

INFLATION RATE

20

15
2005-06H
10 2006-07H
2007-08H
5

0
CPI Food Group Non Food
Group
 Real GDP Growth
Current 2008 Projected 2008
5.8% 7.5%
GDP
This deficiency is due to:

 Agriculture products such as cotton, sugarcane, and wheat falling below target put
some 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 21749
AGRICULTURE PRODUCTION

70000
60000 Series 1
Series 2
50000
Series 3
40000
Series 4
30000
Series 5
20000
Series 6
10000 Series 7
0
2005 2006 2007 2008
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

200
150
100 Series1
50
0
beginning boom ending of
of year period year
price
Credit Ranking

 Previous Ranking ccc-

 Current Ranking ccc+
Although the current credit ranking of
Pakistan is ccc+ but it will be reviewed in
January
Export High Duties
High custom
High Tariff
 Unemployment
Unemployment is a central problem because
when 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 and
family lives.

Unemployment in rural areas is higher then the

unemployment in urban areas due to industries.
Mostly industries are established in urban areas.
That’s why the unemployment rate in urban
Smuggling of Foreign
Exchange
 Withdraw Investment
 Economic Indicators

 Leading Indicators

 Other economic indicators

 Leading Indicators

variables that may indicate where the economy

will be in the next 3 to 6 months.
 Work Week
 Unemployment claims
 Order for consumer goods
 Slower deliveries
 Plant and equipment orders
 Stock prices
Industry
Analysis
Industry Analysis

 Ill use of Loans

 Unavailability of cheap labor
 Machinery imported but not used
2004-05 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
MTM
Introduction of Firm

 We are leaders in creating, developing and

manufacturing of knitted apparel products right
from basic to highly fashioned garments thus
responding to emerging trends in the industry. We
translate conceptual ideas of our customers into
reality and shape them through our technical bent
and professional acumen. The team here strongly
believes that Customer satisfaction is the essence of
business today. MTM has the technology with
expertise,
products with knowledge and most importantly
the right mindset to achieve total
customer satisfaction.
Firm Analysis
 Balance Sheet
SHARE CAPITAL AND 2008 2007 2006
RESERVE
Authorized share capital 1,000,000 1,000,000 1,000,000

Issued subscribed and paid up 900000 900000

capital 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 4891 5639 7700

back off operating fixed assed

Cont.
 NON CURRENT LIABILITES 2008 2007 2006

Long Term financing 1769245 265989 297933

219851 276138 387515
Liability against subject to finance
lease
Defferred liability for gratuity 107789 90180 76082

2096885 632307 761530

Total
CURRENT LIABILITIES
Trade and other payables 906159 674138 748578
Accrued Mark-up 84911 77642 64189
Short term finances 2621724 3684328 2912069
Current portion of long term 254874 220115 256596
liabilities
Provision for taxation 74257 57243 104518
Total 3941925 4713466 4085950
Cont.
 Total Liabilities 6038810 5345773 4847480

CONTENGIES AND - -
COMMITEMENTS

TOTAL LIABILITES AND SHARE 8234421 7326132 6433616

HOLDER’S EQUITY
 Assets Side

Non Current Assets 2008 2007 2006

Property, Plant & Equipment 3025599 2808261 2130740

Long term advances 6004 6733 7466

Long Term Security Deposits 16338 23918 23972

Total 3047941 2838912 2162178

Cont.
 Current Assets 2008 2007 2006
Stores, spares and loose tools 366850 286203 277923

Stock in trade 1838707 1813977 1891260

Trade Debts 1933875 1611302 1414949

Loans and advances 165391 130095 115283

Trade deposits and short term 166415 109201 145438

prepayments
Other Receivables 577987 460874 367351

Cash and bank balances 137255 75568 59234

ToTal Assets 8234421 7326132 6433616

Cont.
 Profit & Loss Account
2008 2007 2006
Sales 7884785 6017735 4899190
Less: Cost of goods sold 6428798 4963190 4000910

Gross profit 1455987 1054545 898280

Add: Other operating income 8700 6887 2778
Total 1464687 1061432 901058

Distribution cost (348281) (289470) (245922)

Administrative expenses (1395770) (132967) (123812)
Other operating expenses (29855) (31586) (13766)
(538964) (439539) (335266)
Finance cost

Profit before Taxation 408010 167870 182292

 2008 2007 2006

Profit Before Taxation 408010 167870 182292

74257 57243 52329
Less: provision for taxation
Profit After Taxation 333753 110627 129963

Earnings Per Share-Basic 11.13 3.69 4.33

 Local & Export Sale

150%

100% Export
50% Local

0%
2008 2007
 profit & loss graph

400,000
350,000
300,000
250,000
200,000 Series1
150,000
100,000
50,000
-
2008 2007 2006
 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 the
major change in the current assets (cash) and
trade Receivables and inventory is also
increased.
 Cash Ratio
Cash from operations/Current Liabilities
2008 2007
0.0348:1 .0160:1
The ratio is increasing due to increase in cash
and decrease in current liabilities.
ANALYSIS OF PROFITABILITY

Profitability can be analyzed by using different

ratios:

Gross profit Margin Ratio 2008 2007

Gross Profit/Sales 18.4% 17.52%

The ratio of Gross profit is increasing due to the

following reasons:

Increase in sales :
Fluctuation in Dollar:
Net Margin Ratio 2008 2007
Net profit/Sales 4.23% 1.84%

The increase in net margin ratio is due to

increase in sales and ultimately high profits.
 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
2008 2007
Net 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
ABILITY

Debt To Equity 2008 2007

3.33:1 3.35:1
The company long term debt paying ability decrease in 2008
because the ratio represents that company are using more debt as
compared to its equity. And this also shows that company has to
pay more outside the firm as compared to the inside of the firm
Asset management Ratio
Ratios 2008 2007
Average collection 4.44 3-97
period
Avg R/a TOR in 81days 91days
days
Operating Cycle 183 days 225days
Inventory T.over 3.52 2.68
Ratio

Inventory T.over in 102 days 134 days

days
Long Term debt ratio
Ratios 2008 2009
Debt to total 0.73:1 0.72:1
asset ratio
Capitalization .054:1 0.28:1
Ratio
Time interest 1.91 1.51
Earned Ratio
Common Size Analysis
 Balance Sheet
SHARE CAPITAL AND 2008(%) 2006 (%) 2005(%)
RESERVE
Authorized share capital _ _ _

Issued subscribed and paid up 11.41 14.96 18.37

capital
Reserve 11.56 11.55 12.58

Total Equity 22.97 26.51 30.95

Surplus on revaluation of operation 4.81 6.31 1.26

of fixed asset
Deferred income on sale and lease 0.06 0.09 0.03
back of operating fixed assets

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

Long Term financing 22.44 4.42 6.08

Liability against subject to 2.79 4.59 7.91
finance lease
Deferred liability for gratuity 1.37 1.50 1.55

26.59 10.51 15.54

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

Trade and other payables 11.49 11.20 15.28

Accured Mark-up 1.08 1.29 1.31
Short term financing 33.25 61.22 59.44
Current Portion of long term liabilities 3.23 3.66 5.24
Portion for Taxation
.094 .96 2.13

Total 49.99 78.33 83.40

Total Liability 76.59 88.83 98.94
CONTENGIES AND - - -
COMMITEMENTS
TOTAL LIABILITES AND 104.43 121.74 146.71
SHARE HOLDER’S EQUITY
 Assets Side

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.
 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 2.11 1.81 2.97

prepayments
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 104.43 121.74 131.32

Cont.
 Profit & Loss A/C
2008 2006 2005
(%) (%) (%)
Sales 100 100 100
Less: Cost of goods sold 81.53 82.43 81.66

Gross profit 18.47 17.52 18.34

Distribution cost 4.42 4.81 5.02

Administrative expenses 1.77 2.21 2.53
Other operating expenses 0.38 0.52 0.28
Total expenses 6.57 7.54 7.83
Profit before other incomes 11.90 9.98 10.51
Other operating income 0.11 0.11 0.06
Profit from Operation 12.01 10.09 10.56
Finance cost 6.84 7.30 6.84
 2008(%) 2006 (%) 2005 (%)

Profit Before Taxation 5.17 2.79 3.72

Less: provision for taxation 0.94 0.95 1.07

Profit After Taxation 4.23 1.84 2.65

Index Analysis
 Balance Sheet
SHARE CAPITAL AND 2008(%) 2007 (%) 2006
RESERVE
(Base
Year)
Authorized share capital - - -

Issued subscribed and paid up 0 0 100

capital
Reserve 48 13 100

Total 512 512.01 100

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

Long Term financing 494 -11 100

Liability against subject to -43 -29 100
finance lease
Deferred liability for Gratuity 42 19 100
175 -17 100
Total
 CURRENT LIABILITES 2008 (%) 2007(%) 2006(%)

Trade and other payables 21 -10 100

Accured Mark-up 32 21 100
Short term financing -10 27 100
Current Portion of long term liability -1 -14 100
Taxation
-29 -45 100

Total -4 15 100
Total liability 25 10 100

TOTAL LIABILITES AND 15 2 100

SHARE HOLDER’S EQUITY
 Assets Side
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

 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 term 14 -25 100

prepayments
Other Receivables 57 25 100

Cash and bank balances 132 28 100

Total 21 5 100

Total Assets 28 14 100

 Profit & Loss A/C
2008(%) 2007(%) 2006(base
year)
Sales 61 23 100
Less: Cost of goods sold 61 24 100

Gross profit 62 17 100

Add: Other operating income 213 148 100

Distribution cost 42 18 100

Administrative expenses 13 7 100
Other operating expenses 113 129 100
Finance cost 61 31 100

Profit before Taxation 124 -8 100

 2008(%) 2007(%) 2006(base
year)

Profit Before Taxation 124 -8 100

Less: provision for taxation 42 9 100

Profit After Taxation 157 -15 100

Thank You Very
Much