fsa of mtm

8/8/2019 FSA of MTM

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Financial statement analysis of Financial statement analysis of

MTMMTM

Presented to:

SIR HAMZA MUKHTAR.Presented by:

y Muhammad Aamir (2006-ag-3498)

y

Zahid Farid (2008-ag-153)

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Brief IntroductionBrief Introduction

Founded 1994

Founder M.Nazir Ahmad

Key people Mr.shahid Nazir &Mr Muhammad Nawaz Tishna

Industry Textile

Products Fabric, yarn,

loungewear,activewear,sleepwear,athletic,sportswear,et

c etc

Registered office West canal road, Faisalabad

Area served World wide

Web site www.masoodtextile.com

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DIVISONS OF MTMDIVISONS OF MTM

y Spinning

y Knitting

y Fabric Dying Mills MTM Divisions

y Processing

y Laundry

y Cutting

y Stitching

y Finishing Apparel Division

y Packing

y Shipping

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PLANT CAPACITYPLANT CAPACITY

Capacity(000) Machines

Spinning: production at normal capacity

converted to 20s count based on 3 shifts per day

4762 kgs 91

Knitting: production at normal capacity converted

to 30s count based on 3 shifts per day

19216 kgs 272

Dyeing/Finishing:production at normal

capacity on reactive dyeing basis at 3shifts per day

11880 kgs -

Garments:production at normal capacity

converted on normal garments capacity based onsingle shift per day

2253 dzn 3059 including cutting

stitching and othermachines

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CEO

GM

SENIOR MANAGERS

MANAGERS

PRODUCTION

MANAGERDEPUTY MANAGER

Q.A.MANAGERSASSISTANT MANAGERS

FINANCE MANAGERSR.OFFICERS UNIT

MANAGERS

INVENTORY

MANAGER

SUPERVISORS

MGT.TRAINEESPPC MANAGER

HR MANAGER

MERCHANDISING

MARKETING MANAGER

HIERARCHHIERARCH

YY

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Swot analysisSwot analysisStrength: Vertically integrated.

High quality products.

Back Track System.

Weakness:

Rely on foreign customers. Communicational gap among different departments.

Opportunity:

To Capture Global Market

Can introduce its own label in domestic as well in international market.

Full potential of entertaining the local market.

Threats:

Tough competitors just like China & India.

Change of government policies

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Economy analysisEconomy analysis

Inflation

Discount rate

Exchange rates parity

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Economy analysisEconomy analysis

Inflation

rates and changes in inflation has been studied and compared theeffects in different ways

effect of such inflation on CGS & Sales price.

Low product demand customer will move towards other courtiers.

competitors will improve and grows up.( India man to machine ratio goes

down)to cop up the inflation cost quality have to sacrifice.

Govt. while to control inflation tightened the monetary policy. by last 3years.

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Exchange rate

y Foreign currency rate plays an important role while the foreign incomeconverted into national currency

y if any firm or industry is dealing with international market then it has to

face the day to day change in currency rates.

y higher the $ price higher the cost of import of raw material or payment of foreign debts.

y Today $ price is trading at peak Rs.84.10.(07-12-2009)

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Discount rate

y Discount rate has been studied and observed through out the

analysis during different time periods because it has positiverelation with cost of financing

y Effect of discount rates during periods are observed according tothe borrowing in short

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y GDP growth.y Textile sector's contribution to total GDP is 8.5%.

Real GDP growth rate

4.50%

5.50%6.10%

6.60%6.60%

5.30%

2.70%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

6.00%

7.00%

2 0 0 3

2 0 0 4

2 0 0 5

2 0 0 6

2 0 0 7

2 0 0 8

2 0 0 9

GDP

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Rules and regulations.

y Govt. to discourage the export of yarn has imposed the 5%duty

y Due to export cotton/40kg price high Rs.4708(04-12-09)y rebate on export is 2.5%

y compensation on R&D is 6% to encourage the export.

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Competition

There is very low competition for MTM in Pakistanalthough in eastern group as India and somehow

china. China has closed its spinning sector (yarn making)&India is going to close till end2010..

So they will be new yarn importer customer of

Pakistan

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FIRM ANALYSISFIRM ANALYSIS

SponsorsAllied bank, MCB, Habib Bank, HB ag Zurich, UBL

,PICIC Major sponsor bank is HBL

Net Worth (2008)=Total assets ²Total liabilities

=Rs82,34,421,000-60,38,810,000

=Rs.21,95,611,000

Family based business

Political family background

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BALANCE SHEET 2008 2007 2006

AT 30 JUNE 2006,2007,2008

(RUPEES IN THOUSAND)

EQUITY AND LIABILITY

SHARE CAPITAL AND RESERVES

Authorized capital.

40,000,000 ordinary shares of rupees 10 each 400,000 400,000 400,000

60,000,000 preference shares of rupees 10 each 600,000 600,000 600,000

1,000,000 1,000,000 1,000,000

issued, subscribed and paid up capital 900,000 900,000 900,000

reserves 911,300 695,300 616,469

TOTAL EQUITY 1,811,300 1,595,300 1,516,469

surplus on revaluation of operating fixed assets 379,420 379,420 61,967deffered income on sale and lease back of operating fixed assets 4,891 5,639 7,700

NON-CURRENT LIABILITIES

Long term financing 1,769,245 265,989 297,933

liabilities against assets subject to finance lease. 219,851 276,138 387,515

deffered liability for gratuity. 107,789 90,180 76,082

2,096,885 632,307 761,350

CURRENT LIABILITIES

Trade and other payable 906,159 674,138 748,578

accrued mark-up 84,911 77,642 64,189

short term finance 2,621,724 3,684,328 2,912,069

current portion of long term liabilities 254,874 220,115 256,596

provision for taxation 74,257 57,243 104,518

3,941,925 4,713,466 4,085,950

total liabilities 3,941,925 4,713,466 4,847,480

CONTINGINCIES AND COMMITMENTSTOTAL EQUITY AND LIABILITIE 8,234,421 7,326,132 6,433,616

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ASSETS

NON CURRENT ASSETS

Property, plant and equipment 3,025,599 2,808,261 2,130,740

long term advances 6,004 6,733 7,466

long term security deposits 16,338 23,918 23,972

3,047,941 2,838,912 2,162,178CURRENT ASSETS

Stores and spare parts 366,850 286,203 277,923

stock in trade 1,838,707 1,813,977 1,891,260

trade debts 1,933,875 1,611,302 1,414,949

loans and advances 165,391 130,095 115,283

short term deposits and prepayments 166,415 109,201 145,438

other receivables 577,987 460,874 367,351

cash and bank balances 137,255 75,568 59,234

5,186,480 4,487,220 4,271,438

8,234,421 7,326,132 6,433,616

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PROFIT AND LOSS ACCOUNT 2008 2007 2006

FOR THE YEAR ENDEDAT 30 JUNE 2006,2007,2008

(RUPEES IN THOUSAND)

Sa 7,884,785 5, 50,366 4,899, 90

Co of Goo So 6,428,798 4,963, 90 4,000,910

GROSS PROFIT 1,455,987 987,176 898,280

DISTRIBUTION AND SELLING COSTS 348,281 222,101 245,922

ADMINISTRATIVE AND GENERAL EXPENSES 139,577 132,967 123,812

OTHER OPERATING EXPENSES 29,855 31,586 13,766

517,713 600,522 514,780

OTHER OPERATING INCOME 8,700 6,887 2,778

OPERATING PROFIT 946,974 607,409 517,558

FINANCE COST 538,964 416,657 335,266

PROFIT BEFORE TAXATION 408,010 190,752 182,292

PROVISION FOR TAXATION 74,257 57,243 52,329

PROFIT AFT R TAX 333,753 133,509 129,963

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Net Worth of the companyNet Worth of the company

Net Worth (2008)=Total assets ²Total

liabilities

=Rs82,34,421,000-60,38,810,000

=Rs.21,95,611,000

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ANALYSIS OF BALANCE SHEET ITEMS

2,008 2,007 2,008 2,007 2,006

100 100 4.86 5.46 6.22

100 100 7.29 8.19 9.33

100 100

100 100 10.93 12.28 13.99

131 113 11.07 9.49 9.58

114 105 22.00 21.78 23.57

100 612 4.61 5.18 0.96

87 73 0.06 0.08 0.12

665 89 21.49 3.63 4.63

80 71 2.67 3.77 6.02

120 119 1.31 1.23 1.18

332 83 25.46 8.63 11.83

134 90 11.00 9.20 11.64

109 121 1.03 1.06 1.00

71 127 31.84 50.29 45.26

116 86 3.10 3.00 3.99

130 55 0.90 0.78 1.62

84 115 47.87 64.34 63.51

84 97 47.87 64.34 75.35

112 114 100.00 100.00 100.00

COMMON SIZEINDEX ANALYSISBALANCE SHEET

AT 30 JUNE 2006 2007 2008

(RUPEES INTHOUSAND)

EQUITY AND LIABILITY

SHARE CAPITAL AND RESERVES

Authorized capital.

40,000,000 ordinary shares of rupees 10 each

60,000,000 preference shares of rupees 10 each

issued, subscribed and paid up capital

reserves

TOTAL EQUITY

surplus on revaluation of operating fixed assets

deffered income on sale and lease back of operating fixed assets

NON-CURRENT LIABILITIES

Long term financing

liabilities against assets subject to finance lease.

deffered liability for gratuity.

CURRENT LIABILITIES

Trade and other payable

accrued mark-up

short term finance

current portion of long term liabilities

provision for taxation

total liabilities

CONTINGINCIES AND COMMITMENTS

TOTAL EQUITY AND LIABILITIES

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108 132 36.74 38.33 33.12

89 90 0.07 0.09 0.12

68 100 0.20 0.33 0.37

107 131 37.01 38.75 33.61

128 103 4.46 4.81 4.32

101 96 22.33 24.76 29.40

120 114 23.49 21.99 21.99

127 113 2.01 1.78 1.79

152 75 2.02 1.49 2.26

125 125 7.02 6.29 5.71

182 128 1.67 1.03 0.92

116 105 62.99 61.25 66.39

100.00 100.00 100.00

ASSETS

NON CURRENT ASSETS

Property, plant and equipment

long term advances

long term security deposits

CURRENT ASSETS

tores and spare parts

stock in trade

trade debts

loans and advances

short term deposits and prepayments

other receivables

cash and bank balances

TOTAL ASSETS

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132.51 121.46 100.00 100.00 100.00

129.53 124.05 81.53 83.41 81.66

147.49 109.90 18.47 16.59 18.34

156.81 90.31 4.42 3.73 5.02

104.97 107.39 1.77 2.23 2.53

94.52 229.45 0.38 0.53 0.28

86.21 116.66 6.57 10.09 10.51

126.32 247.91 0.11 0.12 0.06

155.90 117.36 12.01 10.21 10.56

129.35 124.28 6.84 7.00 6.84

213.90 104.64 5.17 3.21 3.72

129.72 109.39 0.94 0.96 1.07

249.99 102.73 4.23 2.24 2.65

250.11 102.77 0.00 0.00 0.00

278.28 110.91 0.00 0.00 0.00

Sales

Cost of Goods Sold

GROSS PROFIT

DISTRIBUTION AND SELLING COSTS

ADMINISTRATIVE AND GENERAL EXPENSES

OTHER OPERATING EXPENSES

OTHER OPERATING INCOME

OPERATING PROFIT

FINANCE COST

PROFIT BEFORE TAXATION

PROVISION FOR TAXATION

PROFIT AFTER TAX

EARNING PER SHARE-BASIC

DILUTED

ANALYSIS OF INCOME STATEMENT ITEMS

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CASH FLO W STATEMENTCASH FLO W STATEMENT

2007 2008

Cash Flow from Operating Activities

694008 (989328)

Cash Flow from Investing Activities(553642) (407817)

Cash Flow from Financing Activities(124032) 1458832

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LIQUID RATIOSRANA

TEXTILE

MASOO

D

AHSA

N

OLYMPI

A

Current Ratio RATIO 1.65 3.93 1.36 1.43

Quick Ratio Or Acid Test Ratio RATIO .74 1.27 .59 .69

LEVERAGE RATIOS

Debt To Total Assets Ratio RATIO .48 .52 .46

Debt To Equity Ratio RATIO 35.67 83.93 25.61 63.69

ACTIVITY RATIOS

Receivable Turnover Ratio RATIO 2.34 3.92 3.54 3.87

Receivable Turnover In Days/(Average Collection Period) DAYS 75 63 95 88

Inventory Turnover Ratio (IT) TIME 3.24 4.24 3.10 2.66

Inventory Turnover In Days (ITD) DAYS 85 96 69 57

(Time Interest EarnedCOVERAGE RATIOS

Ratio)RATIO 53.57 93.38 65.78 48.75

PROFITABILITY RATIOS

(IN TERM OF SALES)

PROFITABILITY

RATIOS

)TERM OF SALES(IN

Gross Profit Margin % Age 2.48 3.31 2.10 2.23

Net Profit Margin % Age 1.28 1.74 1.18 1.63

PROFITABILITY RATIOS

(IN TERM OF INVESTMENT)

Return On Assets % Age 1.75 4.35 1.65 1.69

Return On Equity (ROE) % Age 1.02 1.74 1.36 1.65

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Financial Analysis (Ratios)Financial Analysis (Ratios)

Liquidity ratios: 2008 2007 2006

Current ratio=C.A/C.L

1.32 0.95 1.05

Acid test ratio=(C.A-Inventory)/C.L

0.85 0.57 0.58

Sale to working capital ratio=sales/(C.A-C.L)

6.33 -26.3 26.41

cash ratio0.03 0.02 0.01

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Profitability ratios: 2008 2007 2006

Gross profit margin=G.P/Sales*100

18.47 16.59 18.34

Net profit margin=N.P/Sales*100

4.23 2.24 2.65

r eturn on equity18.43 8.37 8.57

Return on assets=N.P/T.A*100

4.05 1.82 2.02

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Activity ratios: 2008 2007 2006

fix assets turnover 2.60 2.09 2.26

Total assets turnover 0.95 0.82 0.77

Account receivable turnover 3.80 3.08 2.74

A\R turnover in days 94.4 116.8 131.4

Inventory turnover 3.52 2.67 2.15

Inventory turnover in days 102.27 134.83 167.26

fsa of mtm

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