RATIO ANALYSIS-

TEXTILE INDUSTRY

Presented by:
Aleena Inayat
Hassan Hanif
Haseeb Abid Kiani
M. Naeem Riaz
Presentation layout
 Introduction of textile sector
 Introduction of companies
 Ahmad Hassan Textile Mills
 Bhanero Textile Mills
 Nishat Mills Limited
 Ratio Analysis
 Comparison of the companies
 Conclusion
Textile sector of Pakistan
 4th largest cotton producer in the world
 8th largest exporter of textile products
 Contribution to GDP- 8.5%
 Employment to 15 million people- 30% of the
workforce
 Annual volume of world textile trade growing at
2.5%- Pakistan's share less than one percent
Textile sector of Pakistan
 Growth from 2005 to 2007
 Decline in 2008- global financial and economic
meltdown
 Government’s vision for textile industry 2005-2010
 Whole of textile sector is included in list of value added
industries
 5% custom duty on imported machinery if not
manufactured locally
 Tax relief: Initial Depreciation allowance (IDA) at 50%
of machinery & equipment cost
Textile sector of Pakistan
 Export plan 2006-13
 Increase exports to $24.36 billion
Introduction of companies- Ahmad Hassan Textile
Mills

 Mission statement
 To achieve & sustain good reputation in international
market by manufacturing quality products.
 Management of timely deliveries & quality assurance.
 Ensure a consistent quality & timely deliveries &
shipments, by carrying all the time cotton yarn stock of
90-180 days production
Introduction of companies- Ahmad Hassan Textile
Mills

 Incorporated in 1989
 Products
 Cotton fabrics
 Cotton yarn
 Textile all sorts
 Main business type- exporter
 Major importers of its yarn
 America
 Hong Kong
 Sri Lanka
Introduction of companies- Bhanero Textile Mills

 Vision statement
 A Premier Quality Company, Providing Quality
Products and Maintaining an Excellent Level of
Ethical and Professional Standards
 Mission statement
 To become a leading manufacturer of textile products
in the International & local markets and to explore new
era to Achieve the highest level of success
Introduction of companies- Bhanero Textile Mills

 Umar group of companies established in 1982

 Bhanero textile mills
 Faisal spinning mills ltd
 Blessed textiles ltd
 Products
 Cotton yarn
 High and medium end cotton products
Introduction of companies- Bhanero Textile Mills

 State of the art equipment

 Diverse product range
 Weak R&D facilities
 Small international market share
 Weak brand name
Introduction of companies- Nishat Mills Limited

 Vision statement
 To transform the Company into a modern and dynamic yarn,
cloth and processed cloth and finished product manufacturing
Company that is fully equipped to play a meaningful role on
sustainable basis in the economy of Pakistan
 Mission statement
 To provide quality products to customers and explore new
markets to promote/expand sales of the Company through good
governance and foster a sound and dynamic team, so as to
achieve optimum prices of products of the Company for
sustainable and equitable growth and prosperity of the Company
Introduction of companies- Nishat Mills Limited

 Flagship Company established in 1951

 At par with multinationals operating locally
 Products
 Cotton fabrics
 Cotton yarn
 Textile all sorts
 Ahmad Hassan Textile Mills
Days’ sales in receivables
  2006 2007 2008 2009 2010
Days’ sales in 20.20 19.51 23.20 31.79 21.72
receivables

Except for in 2009 where trade debts rose significantly as compared

to increase in net sales the ratio has been fairly consistent.

Days’ sales in receivables

35

30

25

20 Days’ sales in receivables

15

10

0
2006 2007 2008 2009 2010
Accounts Receivable turnover
  2006 2007 2008 2009 2010
Accounts 17.63 19.08 18.18 13.654 15.41
receivable
turnover

The ratio indicates a poor ability of the company to manage

its receivable which improved only slightly after 2009.

Accounts receivable turnover

25

20
Accounts receivable
15
turnover
10

0
2006 2007 2008 2009 2010
Accounts Receivable turnover in days

  2006 2007 2008 2009 2010

Accounts receivable 20.69 19.15 20.07 26.73 23.68
turnover in days

days’ sales in receivable the ratio is significantly

higher in 2009 due to an increase in trade debts.

30
Accounts receivable turnover in days
25

20
Accounts receivable
15 turnover in days
10

0
2006 2007 2008 2009 2010
Days’ sales in inventory

  2006 2007 2008 2009 2010

Days’ sales in 86.07 78.99 90.50 104.53 75.70
inventory

The ratio has been consistent until it started rising after 2008 and in
2009 because of increase in inventory the ratio was the highest
after which the sales improved and the ratio started improving.

Days’ sales in inventory

120

100

80
Days’ sales in inventory
60

40

20

0
2006 2007 2008 2009 2010
Inventory turnover
  2006 2007 2008 2009 2010
Inventory 4.55 4.59 4.66 3.78 4.56
turnover

The ratio is fairly consistent except for in 2009

due to increase in the average inventory.

Inventory turnover
5
4.5
4
3.5
3 Inventory turnover
2.5
2
1.5
1
0.5
0
2006 2007 2008 2009 2010
Inventory turnover in days
  2006 2007 2008 2009 2010
Inventory 80.26 79.57 78.33 96.50 80.03
turnover in
days

The ratio increased in 2009 due to disproportionate

increase in inventory as compared to net sales.

Inventory turnover in days

120

100

80
Inventory turnover in days
60

40

20

0
2006 2007 2008 2009 2010
Operating cycle

  2006 2007 2008 2009 2010

Operating 100.95 98.72 98.4 123.23 103.98
cycle

The operating cycle increased in 2009 due to increase

in inventory turnover in days.

Operating cycle
140

120

100

80 Operating cycle

60

40

20

0
2006 2007 2008 2009 2010
 Current ratio
  2006 2007 2008 2009 2010

Current ratio 0.85 0.82 0.67 0.76 0.73

The firm’s current ratio is already indicating that its current liabilities are greater than
current assets and to make matter worst the ratio is deteriorating from 2006 to 2010.
 Acid-test ratio
  2006 2007 2008 2009 2010

Acid-test ratio 0.16 0.17 0.14 0.18 0.16

Uses current assets to indicate the short term debt paying ability. In 2009 due to increase in
trade debts the company’s acid-test ratio increased.
 Cash ratio
  2006 2007 2008 2009 2010

Cash ratio 0.011 0.026 0.0075 0.001 0.00087

The fluctuations in the cash ratio are due to changes in the short- term
investments held for sale by the company.
 Debt ratio
  2006 2007 2008 2009 2010

Debt ratio 0.78 0.80 0.71 0.74 0.703

Debt ratio indicates the firm’s long-term debt paying ability. On

average over 70% of the company’s assets are financed by its creditors
indicating a poor debt paying ability.
 Debt/Equity ratio
  2006 2007 2008 2009 2010
Debt/equity 3.5 4.02 7.19 8.49 6.73
ratio

This ratio helps determine how well creditors are protected in case of insolvency. An
increase in the ratio till 2009 indicates that the creditors are well protected.

 Net income margin

  2006 2007 2008 2009 2010
Net income 1.42% 0.13% -0.041% -1.93% 1.7%
margin

The company was doing very poorly because of lower sales and higher
administrative and other expenses but sales soared and the company gained profit to
increase its net profit margin in 2010.
Total Asset Turnover
  2006 2007 2008 2009 2010
Total asset 1.25 1.22 0.89 0.093 1.17
turnover

It indicates the activity of assets and the ability of the company to

generate sales through the use of its assets. The drastic decrease in 2009
is a result of not enough sales for the company for the year and the
company ending up in loss.
Total asset turnover
1.4

1.2

0.8 Total asset turnover

0.6

0.4

0.2

0
2006 2007 2008 2009 2010
Return on Assets

  2006 2007 2008 2009 2010

Return on -0.40% 0.174% -3.02% -2.189% 2.03%
assets

Due to the fact the company reported losses in the year 2008 and 2009
the company’s return on assets was negative. After 2009 its sales
increased and so did the return on assets.

Return on assets
3

1
Return on assets
0
2006 2007 2008 2009 2010
-1

-2

-3

-4
 Operating income margin
  2006 2007 2008 2009 2010
Operating income 7.4% 6.205% 3.31% 8.913% 8.38
margin

This ratio includes only the income from the main line of operations of the
business. The company was not doing well in 2008 because of lower sales and
greater expenses.
Operating asset turnover
  2006 2007 2008 2009 2010
Operating 2.074 0.195 1.27 1.379 1.88
asset turnover

The decrease in 2007 was due to increase in the operating assets but a decrease
in operating income for the year.
 Return on operating assets
  2006 2007 2008 2009 2010

Return on 15.34% 12.10% 12.19% 12.29% 15.7%

operating assets
It is an indicative of how much return you are receiving on your operating
assets. It shows and increase towards an end due to increase in sales and
subsequently the operating income.
 Return on total equity
  2006 2007 2008 2009 2010
Return on 1.76% 0.84% -30.7% -23.61% 23.03%
total equity

Due to the fact that the company reported loss in 2008 and 2009 the return
on total equity for the two year was negative after improving in 2010 when
the company’s operations improved.
 Gross profit margin
  2006 2007 2008 2009 2010
Gross profit 9.77 0.084 8.05% 12.14 12.39
margin

Conforming to the industry standards because of changes in the process of

textile products the gross profit margin increased after 2007. In 2007 the
significant decrease was due to increase in cost of sales.
 Earnings per Share
  2006 2007 2008 2009 2010
Earnings per -0.48 0.21 -6.03 -4.43 4.07
Share

This reflects the company’s report of loss in the year 2008 and 2009.
Bhanero Textile Mills

 Days’ sales in receivables

  2006 2007 2008 2009 2010
Days’ sales in 24.76 39.26 44.39 43.34 30.17
receivables

The ratio has increased from 2006 to 2009 after decreasing in 2010. This
can be attributed to the increased number of sales on credit out of which a
large portion could not be recovered.
 Accounts Receivable turnover
  2006 2007 2008 2009 2010
Accounts 15.59 12.58 8.67 8.67 11.27
receivable
turnover

 The overall trend here is negative because the company’s position in 2006 was
fairly stronger after which it started deteriorating because the company increased its
credit sales to boost the overall sales and thus the accounts receivable turnover
decreased till 2009.
 Accounts Receivable turnover in days
  2006 2007 2008 2009 2010
Accounts receivable 23.40 29.01 42.07 42.08 32.38
turnover in days

Similar to days’ sales in receivables this ratio is deteriorating till 2008

after which it reaches stability in 2009 before it starts improving. This can
be attributed to a better credit policy on behalf of the company that
increases sales as well as improves receivable collectability
 Days’ sales in inventory
  2006 2007 2008 2009 2010
Days’ sales in 96.38 100.54 114.44 88.85 89.09
inventory

It took a hit in 2008 but recovered strongly 2009 onwards.

 Inventory turnover
  2006 2007 2008 2009 2010
Inventory 3.26 4.25 3.41 3.73 4.45
turnover

The overall trend for this ratio is positive with a minor setback in 2008 which
was overcome. Overall the company performed close to the market leader.

 Inventory turnover in days

  2006 2007 2008 2009 2010
Inventory 111.91 85.88 107.10 97.86 81.98
turnover in days

The company has been showing positive trends suggesting a better and
effective way of managing its inventory.
 Operating cycle
  2006 2007 2008 2009 2010
Operating 135.31 114.89 149.17 139.94 114.36
cycle

Except for the time period between 2007 and 2008 the operating cycle of the
company is becoming shorter and conforming with the industry standards.

 Current ratio

  2006 2007 2008 2009 2010

Current ratio 0.85 0.93 0.96 1.02 1.07

It is increasing from 2006 to 2010 indicating that the company is increasing

its ability to pay its current liabilities using current assets.
  Acid-test ratio
  2006 2007 2008 2009 2010
Acid-test ratio 0.19 0.29 0.27 0.35 0.30

The company is able to effectively manage its receivables and increase its
cash equivalents. However, there is a slight decrease in the year 2010.

 Cash ratio
  2006 2007 2008 2009 2010

Cash ratio 0.02 0.04 0.01 0.02 0.03

The ratio is the highest in 2007 and lowest in 2008 where the firm’s cash
reserves depleted after it started improving its position thereafter.
 Debt ratio
  2006 2007 2008 2009 2010
Debt ratio 0.38 0.72 0.71 0.66 0.53

The ratio shows an increase in 2007 which was due to increased short term
borrowings secured after which the company developed its assets compared
to its liabilities and the position started getting better.
 Debt/Equity ratio
  2006 2007 2008 2009 2010

Debt/Equity 1.57 2.88 2.65 2.09 1.20

With the exception of 2007 the creditors of the company

are fairly protected and the firm’s debt paying ability is
strengthening.
  Net income margin
  2006 2007 2008 2009 2010
Net income 6.49% 5.27% 2.87% 2.63% 9.02%
margin

The company’s margin was decreasing till 2009 because of the increased
finance costs after which in 2010 its sales soared and net income margin
reached 9.02%.

 Total Asset Turnover

  2006 2007 2008 2009 2010
Total asset 0.98 1.08 1.02 1.16 1.50
turnover

The company has improved its ability to utilize its total asset to produce net
income 2006 onwards with only a slight and insignificant decrease in 2008.
 Return on Assets
  2006 2007 2008 2009 2010
Return on 5.06% 3.81% 1.88% 2.48% 13.37%
assets

Return on assets was deteriorating until 2008 after which it increased

slightly in 2009 and significantly in 2010 due to increased number of
sales.
 Operating income margin
  2006 2007 2008 2009 2010
Operating 13.39% 10.78% 9.23% 10.29% 13.91%
income
margin

The operating income margin is fairly stable but declining from 2006 to
2008 after which it started increasing.
 Operating asset turnover
  2006 2007 2008 2009 2010
Operating 0.77 1.71 1.81 2.12 2.87
asset turnover
The ratio has increased significantly from 2006 to 2010 indicating an
increased ability of the company to utilizing its operating assets for its
core line of business.
 Return on operating assets

  2006 2007 2008 2009 2010

Return on 10.34% 18.75%

With the exception of 2008 where the16.72% 21.84%
net sales were 39.97%
comparatively lower
operating assets
the return on operating assets showed a positive trend.
• Return on total equity
  2006 2007 2008 2009 2010
Return on 20.3% 15.56% 7.25% 8.54% 35.37%
total equity
It declined from 20% in 2006 to 7% in 2008 after which it increased
slightly and then soared to 35% which was the highest of the three
companies in consideration.
• Gross profit margin

  2006 2007 2008 2009 2010

Gross profit 15.8% 13.53% 11.78% 13.12% 17.69%
margin

The gross profit margin decreased but not as significantly as it rose after
2008. The changes were due to increase in the prices of the textile
products.
 Earnings per Share
  2006 2007 2008 2009 2010
Earnings per 45.86 41.26 21.30 26.96 140.61
share

The most the earning per share the more attractive it becomes for the
investor. As the company performed tremendously in 2010 the earnings
per share also increased dramatically.

Earnings per share

160

140

120

100
Earnings per share
80

60

40

20

0
2006 2007 2008 2009 2010
Ratio analysis- Nishat Mills
 Days’ sales in receivables
2006 2007 2008 2009 2010

Days’ sales in 31.882 days 24.53 days 32.186 days 24.82 days 32.01 days
receivables

Days’ sales in receivables

35

30

25

20 Days’ sales in receivables

15

10

0
2006 2007 2008 2009 2010
 Accounts receivable turnover
2006 2007 2008 2009 2010

Accounts 12.16 times 13.27 times 13.50 times 14.09 times 14.34 times
receivable
turnover

Accounts receivable turnover

15
14.5
14
13.5 Accounts receivable
turnover
13
12.5
12
11.5
11
2006 2007 2008 2009 2010
 Accounts receivable turnover in days
2006 2007 2008 2009 2010

Accounts 30.01 days 27.49 days 27.03 days 25.90 days 25.40 days
receivable
turnover in
days

Accounts receivable turnover in days

31
30
29
28 Accounts receivable
turnover in days
27
26
25
24
23
2006 2007 2008 2009 2010
 Days’ sales in inventory
2006 2007 2008 2009 2010

Days’ sales in 80 days 79.09 days 91.89 days 76.53 days 86.56 days
inventory

Days’ sales in inventory

100
90
80
70
60 Days’ sales in inventory
50
40
30
20
10
0
2006 2007 2008 2009 2010
 Inventory turnover
2006 2007 2008 2009 2010

Inventory 4.64 times 4.69 times 4.52 times 4.73 times 5.03 times
turnover

Inventory turnover
5.1
5
4.9
4.8
4.7 Inventory turnover

4.6
4.5
4.4
4.3
4.2
2006 2007 2008 2009 2010
 Inventory turnover in days
2006 2007 2008 2009 2010

Inventory 78.59 days 77.78 days 80.732 days 77.19 days 72.51 days
turnover in
days

Inventory turnover in days

82

80

78
Inventory turnover in
76 days
74

72

70

68
2006 2007 2008 2009 2010
 Operating cycle
2006 2007 2008 2009 2010

Operating 108.6 days 105.27 days 107.73 days 103.09 days 97.91 days
cycle

Operating cycle
110
108
106
104
102 Operating cycle

100
98
96
94
92
2006 2007 2008 2009 2010
 Current ratio
2006 2007 2008 2009 2010

Current ratio 1.38 1.74 1.19 0.86 1.11

Current ratio
2
1.8
1.6
1.4
1.2 Current ratio
1
0.8
0.6
0.4
0.2
0
2006 2007 2008 2009 2010
 Acid-test ratio
2006 2007 2008 2009 2010

Acid-test ratio 1.35 1.22 0.76 0.33 0.42

Acid-test ratio
1.6
1.4
1.2
1
Acid-test ratio
0.8
0.6
0.4
0.2
0
2006 2007 2008 2009 2010
 Cash ratio
2006 2007 2008 2009 2010

Cash ratio 0.624 1.07 0.61 0.16 0.16

Cash ratio
1.2

0.8
Cash ratio
0.6

0.4

0.2

0
2006 2007 2008 2009 2010
 Debt ratio
2006 2007 2008 2009 2010

Debt ratio 0.32 0.24 0.51 0.39 0.32

Debt ratio
0.6

0.5

0.4
Debt ratio
0.3

0.2

0.1

0
2006 2007 2008 2009 2010
 Debt/equity ratio
2006 2007 2008 2009 2010

Debt/equity 0.48 0.31 0.51 0.63 0.47

ratio

Debt/equity ratio
0.7

0.6

0.5

0.4 Debt/equity ratio

0.3

0.2

0.1

0
2006 2007 2008 2009 2010
 Net income margin
2006 2007 2008 2009 2010

Net income 10.7% 10.59% 6.94% 6.54% 10.42%

margin

Net income margin

12.00%

10.00%

8.00%
Net income margin
6.00%

4.00%

2.00%

0.00%
2006 2007 2008 2009 2010
 Total asset turnover
2006 2007 2008 2009 2010
Total 0.61 0.49 0.50 0.67 0.81
asset
turnover

Total asset turnover

0.9
0.8
0.7
0.6
0.5 Total asset turnover

0.4
0.3
0.2
0.1
0
2006 2007 2008 2009 2010
 Return on assets
2006 2007 2008 2009 2010

Return on 6.15% 4.78% 3.31% 3.53% 7.51%

assets

Return on assets
8.00%
7.00%
6.00%
5.00%
Return on assets
4.00%
3.00%
2.00%
1.00%
0.00%
2006 2007 2008 2009 2010
 Operating income margin
2006 2007 2008 2009 2010

Operating 12.1% 12.03% 11.65% 12.60% 13.99%

income
margin

Operating income margin

16.00%
14.00%
12.00%
10.00%
Operating income margin
8.00%
6.00%
4.00%
2.00%
0.00%
2006 2007 2008 2009 2010
 Operating asset turnover
2006 2007 2008 2009 2010

Operating 1.67 1.62 1.82 2.10 2.74

asset turnover

Operating asset turnover

3

2.5

2
Operating asset turnover
1.5

0.5

0
2006 2007 2008 2009 2010
 Return on operating assets
2006 2007 2008 2009 2010

Return on 20.1% 19.50% 21.14% 26.54% 38.31%

operating
assets

Return on operating assets

45.00%
40.00%
35.00%
30.00%
25.00% Return on operating assets

20.00%
15.00%
10.00%
5.00%
0.00%
2006 2007 2008 2009 2010
 Return on total equity
2006 2007 2008 2009 2010

Return on 9.63% 6.62% 4.64% 5.53% 11.50%

total equity

Return on total equity

14.00%

12.00%

10.00%

8.00% Return on total equity

6.00%

4.00%

2.00%

0.00%
2006 2007 2008 2009 2010
 Gross profit margin
2006 2007 2008 2009 2010

Gross profit 16.54% 16.56% 15.41% 18.23% 18.96%

margin

Gross profit margin

20.00%
18.00%
16.00%
14.00%
12.00% Gross profit margin
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2006 2007 2008 2009 2010
 Earning per share
2006 2007 2008 2009 2010

Earnings per 10.22 7.58 36.86 6.23 10.50

share

Earning per share

40
35
30
25
Earning per share
20
15
10
5
0
2006 2007 2008 2009 2010
Trends within industry
2006 2007 2008 2009 2010
Days’ sales in
Days’ sales Nishat 31.882 24.53 32.186 24.82 32.01
receivables in
receivables Ahmad 20.20 19.51 23.20 31.79 21.72
Hassan
Bhanero 24.76 39.26 44.39 43.34 30.17

50
45
40
35
Days’ sales in receivables
30 Nishat
25 Days’ sales in receivables
Ahmad Hassan
20
Days’ sales in receivables
15 Bhanero
10
5
0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Accounts
Accounts Nishat 12.16 13.27 13.50 14.09 14.34
receivable receivable
turnover in turnover Ahmad 17.63 19.08 18.18 13.654 15.41
Hassan
days Bhanero 15.59 12.58 8.67 8.67 11.27

25

20

Accounts receivable
15 turnover Nishat
Accounts receivable
turnover Ahmad Hassan
10
Accounts receivable
turnover Bhanero
5

0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Accounts
Accounts Nishat 30.01 27.49 27.03 25.90 25.40
receivable Receivable
turnover in turnover in Ahmad 20.69 19.15 20.07 26.73 23.68
days Hassan
days Bhanero 23.40 29.01 42.07 42.08 32.38

45

40

35

30 Accounts Receivable
turnover in days Nishat
25
Accounts Receivable
20 turnover in days Ahmad
Hassan
15 Accounts Receivable
turnover in days Bhanero
10

0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Days’ sales in
Days’ sales Nishat 80.0 79.09 91.89 76.53 86.56
inventory in inventory
Ahmad 86.07 78.99 90.50 104.53 75.70
Hassan
Bhanero 96.38 100.54 114.44 88.85 89.09

140

120

100
Days’ sales in inventory
80 Nishat
Days’ sales in inventory
60 Ahmad Hassan
Days’ sales in inventory
40 Bhanero

20

0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Inventory 
Inventory Nishat 4.64 times 4.69 times 4.52 times 4.73 times 5.03 times
turnover turnover
Ahmad 4.55 4.59 4.66 3.78 4.56
Hassan
Bhanero 3.26 4.25 3.41 3.73 4.45

4
Inventory turnover Nishat
3 Inventory turnover
Ahmad Hassan
Inventory turnover
2 Bhanero

0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Inventory
Inventory Nishat 78.59 77.78 80.732 77.19 72.51
turnover in turnover in
days days Ahmad 80.26 79.57 78.33 96.50 80.03
Hassan
Bhanero 111.91 85.88 107.10 97.86 81.98

120

100

80
Inventory turnover in
days Nishat
60 Inventory turnover in
days Ahmad Hassan
40 Inventory turnover in
days Bhanero

20

0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Operating
Operating Nishat 108.6 105.27 107.73 103.09 97.91
cycle cycle
Ahmad 100.95 98.72 98.4 123.23 103.98
Hassan
Bhanero 135.31 114.89 149.17 139.94 114.36

160

140

120

100
Operating cycle Nishat
80 Operating cycle Ahmad
Hassan
60 Operating cycle Bhanero
40

20

0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Current ratio
Current Nishat 1.38 1.74 1.19 0.86 1.11
ratio
Ahmad 0.85 0.82 0.67 0.76 0.73
Hassan
Bhanero 0.85 0.93 0.96 1.02 1.07

2
1.8
1.6
1.4
1.2 Current ratio Nishat
1 Current ratio Ahmad
Hassan
0.8
Current ratio Bhanero
0.6
0.4
0.2
0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Acid-test ratio
Acid-test Nishat 1.35 1.22 0.76 0.33 0.42
ratio
Ahmad 0.16 0.17 0.14 0.18 0.16
Hassan
Bhanero 0.19 0.29 0.27 0.35 0.30

1.6

1.4

1.2

1
Acid-test ratio Nishat
0.8 Acid-test ratio Ahmad
Hassan
0.6 Acid-test ratio Bhanero
0.4

0.2

0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Cash ratio
Cash ratio Nishat 0.624 1.07 0.61 0.16 0.16

Ahmad 0.011 0.026 0.0075 0.001 0.00087

Hassan
Bhanero 0.02 0.04 0.01 0.02 0.03

1.2

0.8

Cash ratio Nishat

0.6
Cash ratio Ahmad Hassan
Cash ratio Bhanero
0.4

0.2

0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Debt ratio
Debt ratio Nishat 0.32 0.24 0.51 0.39 0.32

Ahmad 0.78 0.80 0.71 0.74 0.703

Hassan
Bhanero 0.38 0.72 0.71 0.66 0.53

0.9

0.8

0.7

0.6

0.5 Debt ratio Nishat

0.4 Debt ratio Ahmad Hassan
Debt ratio Bhanero
0.3

0.2

0.1

0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
debt/equity
Debt/Equity Nishat 0.48 0.31 0.51 0.63 0.47
ratio ratio
Ahmad 3.5 4.02 7.19 8.49 6.73
Hassan
Bhanero 1.57 2.88 2.65 2.09 1.20

5 Debt/Equity ratio Nishat

Debt/Equity ratio Ahmad
4 Hassan
3 Debt/Equity ratio Bhanero

0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Net income
Net income Nishat 10.7% 10.59% 6.94% 6.54% 10.42%
margin margin
Ahmad 1.42% 0.13% -0.041% -1.93% 1.7%
Hassan
Bhanero 6.49% 5.27% 2.87% 2.63% 9.02%

12.00%

10.00%

8.00%

6.00% Net income margin Nishat

Net income margin Ahmad
4.00%
Hassan
2.00% Net income margin Bhanero

0.00%
2006 2007 2008 2009 2010
-2.00%

-4.00%
 2006 2007 2008 2009 2010
Total asset
Total Asset Nishat 0.61 0.49 0.50 0.67 0.81
turnover Turnover
Ahmad 1.25 1.22 0.89 0.093 1.17
Hassan
Bhanero 0.98 1.08 1.02 1.16 1.50

1.6

1.4

1.2

1 Total Asset Turnover

Nishat
0.8 Total Asset Turnover
Ahmad Hassan
0.6 Total Asset Turnover
Bhanero
0.4

0.2

0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Return on
Return on Nishat 6.15% 4.78% 3.31% 3.53% 7.51%
assets Assets
Ahmad -0.40% 0.174% -3.02% -2.189% 2.03%
Hassan
Bhanero 5.06% 3.81% 1.88% 2.48% 13.37%

16.00%
14.00%
12.00%
10.00%
8.00% Return on Assets Nishat
Return on Assets Ahmad
6.00%
Hassan
4.00% Return on Assets Bhanero
2.00%
0.00%
2006 2007 2008 2009 2010
-2.00%
-4.00%
 2006 2007 2008 2009 2010
Operating
Operating Nishat 12.1% 12.03% 11.65% 12.60% 13.99%
income income
margin margin Ahmad 7.4% 6.205% 3.31% 8.913% 8.38%
Hassan
Bhanero 13.39% 10.78% 9.23% 10.29% 13.91%

16.00%

14.00%

12.00%

10.00% Operating income margin

Nishat
8.00% Operating income margin
Ahmad Hassan
6.00% Operating income margin
Bhanero
4.00%

2.00%

0.00%
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Operating
Operating Nishat 1.67 1.62 1.82 2.10 2.74
asset turnover asset
turnover Ahmad 2.074 0.195 1.27 1.379 1.88
Hassan
Bhanero 0.77 1.71 1.81 2.12 2.87

3.5

2.5
Operating asset turnover
2 Nishat
Operating asset turnover
1.5 Ahmad Hassan
Operating asset turnover
1 Bhanero

0.5

0
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Return on
Return on Nishat 20.1% 19.50% 21.14% 26.54% 38.31%
operating operating
assets assets Ahmad 15.34% 12.10% 12.19% 12.29% 15.7%
Hassan
Bhanero 10.34% 18.75% 16.72% 21.84% 39.97%

45.00%

40.00%

35.00%

30.00%
Return on operating assets
25.00% Nishat
Return on operating assets
20.00% Ahmad Hassan
15.00% Return on operating assets
Bhanero
10.00%

5.00%

0.00%
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Return on
Return on Nishat 9.63% 6.62% 4.64% 5.53% 11.50%
total equity total equity
Ahmad 1.76% 0.84% -30.7% -23.61% 23.03%
Hassan
Bhanero 20.3% 15.56% 7.25% 8.54% 35.37%

40.00%

30.00%

20.00%
Return on total equity
10.00% Nishat
Return on total equity
0.00%
Ahmad Hassan
2006 2007 2008 2009 2010
-10.00% Return on total equity
Bhanero
-20.00%

-30.00%

-40.00%
 2006 2007 2008 2009 2010
Gross profit
Gross profit Nishat 16.54% 16.56% 15.41% 18.23% 18.96%
margin margin
Ahmad 9.77 0.084 8.05% 12.14 12.39
Hassan
Bhanero 15.8% 13.53% 11.78% 13.12% 17.69%

20.00%
18.00%
16.00%
14.00%
12.00% Gross profit margin Nishat
10.00% Gross profit margin
Ahmad Hassan
8.00% Gross profit margin
6.00% Bhanero

4.00%
2.00%
0.00%
2006 2007 2008 2009 2010
 2006 2007 2008 2009 2010
Earnings per
Earnings per Nishat 10.22 7.58 36.86 6.23 10.50
share Share
Ahmad -0.48 0.21 -6.03 -4.43 4.07
Hassan
Bhanero 45.86 41.26 21.30 26.96 140.61

160

140

120

100
Earnings per Share Nishat
80 Earnings per Share Ahmad
Hassan
60 Earnings per Share
Bhanero
40

20

0
2006 2007 2008 2009 2010
-20
conclusion
 Set backs for textile sector
 Government abolished R&D programs
 Implementation of 18% Value Added Tax
 Decline in machinery imports due to enhanced
interests on loans
 Global financial and economic crisis- 2008
 Increased competition in international market
 Depreciation of rupee
 Short fall of power supply