Introduction to Finance

Umer group of companies

Textile company
Table of Contents
Fundamentals of Finance.....................................................................................................1

Introduction..........................................................................................................................5

Vision...............................................................................................................................6

Mission............................................................................................................................6

Business performance review..............................................................................................6

Profit Analysis.................................................................................................................7

FINANCE COST.............................................................................................................8

EARNINGS PER SHARE...............................................................................................8

Ratio Analysis of Umer group of companies......................................................................9

Ratio Analysis..................................................................................................................9

Calculation of Ratios.........................................................................................................13

Liquidity Ratios.............................................................................................................13

Current Ratio.............................................................................................................13

Quick Ratio................................................................................................................13

Asset Management Ratio...............................................................................................13

Receivable Activities.................................................................................................13

Day Sale Outstanding................................................................................................14

Payable turnover in days............................................................................................14

Inventory Turnover in days.......................................................................................14

Fixed Asset Turnover................................................................................................15

Total Asset Turnover.................................................................................................15

Profitability Ratio..........................................................................................................15

Net Profit Margin on Sales........................................................................................15

 Gross Profit Margin...................................................................................................16

Return on investment.................................................................................................16

Return on Equity........................................................................................................16

Debt Management Ratios..............................................................................................17

Debt to Equity Ratio..................................................................................................17

Debt to total assets ratio.............................................................................................17

Market Value Ratios......................................................................................................17

Earnings per share Pre-Tax........................................................................................17

Earnings per share post-tax........................................................................................18

Price to Earnings ratio...............................................................................................18

Market to Book ratio..................................................................................................18

Market Value per share..............................................................................................19

Coverage Ratios.............................................................................................................19

TIE or Interest Coverage ratio...................................................................................19

Analysis and interpretation of Company’s Ratios.............................................................20

Liquidity Ratios:..........................................................................................................20

Current Ratio:................................................................................................................20

Quick Ratio:...................................................................................................................21

Asset Management Ratio...................................................................................................23

Receivable activities......................................................................................................23

Days Sale Outstanding...................................................................................................24

Payable Turnover in days..............................................................................................25

Inventory Turnover in days...........................................................................................26

Fixed Asset Turnover....................................................................................................27

 Total Asset Turnover.....................................................................................................28

Profitability Ratios.............................................................................................................29

Net Profit Margin on sales.............................................................................................29

Gross Profit Margin.......................................................................................................30

Return on Investment.....................................................................................................31

Return on equity............................................................................................................32

Debt management Ratios...................................................................................................33

Debt to equity ratio........................................................................................................33

Debt to total assets ratio.................................................................................................34

Market Value Ratios..........................................................................................................35

Earnings per share..........................................................................................................35

Price Earnings ratio........................................................................................................36

Market Value per share..................................................................................................38

Coverage Ratios.................................................................................................................39

Interest Coverage Ratio.................................................................................................39

Conclusion.........................................................................................................................40
Introduction of the company
Umer Group Profile and History
Umer Group has an experience of over 32 years in the textile market and has
gained a remarkable market share in local and export market. The textile group
comprises of three companies: Bhanero Textile Mills Ltd., Faisal Spinning Mills
Ltd, and Blessed Textiles Ltd., all three operating both spinning and weaving
facilities. Umer Group has a total of five spinning mills with an installed capacity
of over 187,009 spindles supported by the latest European and Japanese
machinery. The group has three weaving mills featuring more than 588 air jet
weaving machines. The greige fabric produced is used for sheeting, home textile
and apparel. The weaving mills produce over 6 million meters of fabric per month.
Firhaj Footwear (Pvt.) Ltd. is a subsidiary company of Umer Group, it was
established and incorporated in 1989, since then it has been engaged in designing,
manufacturing and marketing of shoes within and out of the country. Firhaj
Footwear has the manufacturing capacity of over 2.1 million Pairs per annum. The
plant is based on latest footwear technology and equipped with most modern fully
automatic Italian footwear machinery. Firhaj has the manufacturing and marketing
license for HUSH PUPPIES and distribution license of CATERPILLAR,
MERRELL and GEOX footwear in pakistan, which it retails throughout Pakistan.
Umer Group of companies has further diversified its business activities by
venturing in to the construction business, it has established one of Lahore most
prestigious business center and shopping mall known as city towers. Umer Farms
(Pvt.) Ltd. is yet another venture of Umer Group of Companies. This state of art
endeavor has the privilege of being one of the most modern dairy setups in
pakistan. The farm hosts 1,500 Holstein Friesian cows imported from Australia,
which are likely to be doubled in coming years. Umer Farms are engaged in the
production and supply of high quality milk to it's clients and with the combination
of modern equipment/technique, world class expertise and high quality imported
cows, ..

The head office of the umer group is in Karachi and the managing of their mills is
being managed in Lahore office and the manufacturing and production units and
mills are in Shiekhupoora-Faisalabad road
And their production is about IS ON 219600 SPINDLES and their per month
production of the fabric is 7500 yarn per month with the 577 airjet looms
producing over 700,000 griege fabric per month on the weaving side and with the
high quality and german based machinery of processing, printing, dying and the
futuristic approach which led them to the worldwide standards representing
Pakistan in the TOP names of textile sector and companies

Umer group not just in the business of textile but also in dairy,leather garments
producing about 10,000 leather jackets and garments in a month

Umer group also have the most heavy generation of electricity which give the
34MW of electricity on their plant and extending their offices in a good covered
area all over the Pakistan

Vision of the company and CEO

Mr. Mohammad Salim, an executive director of Bhanero Textile Mills
Limited and a visionary leader of Umer Group of Companies. Under his
guidance and leadership the Group transformed from a sole entity
established in 1982 into a country’s leading Group comprising of
diversified venture like, footwear, real estate, dairy farm, power
generation and sugar. Besides, commercial endeavors he actively
participates in several social and welfare activities across the country.
Mr. Salim was awarded by the certification from the Institute of
Chartered Accountants of Pakistan on completion of his Director
Training program in April, 2016. Mr. Salim’s incessant missionary zeal
and leadership renders significant role towards the progression of the
Group.

A premier quality company providing quality products by maintaining

an excellent level of ethical & professional standards and providing
value to our stakeholders, society and our nation.

Mission
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.

Business performance review

Chairman Review Report for the year ended June 30, 2023 required
under the provisions of section 192(4) of Companies Act, 2017 on
overall performance and effectiveness of the board of Bhanero Textile
Mills Limited (“BTML”) in achieving its objectives. The report depict
governance standards set by board and the executive management
along with the effectiveness of internal control and risk management
procedures applied in achieving the corporate objectives. The fiscal
year ending in June 2023 didn’t portray a conducive economic
environment for the country and textile and garment exports had
experienced various challenges. The value of textile and garment
exports from Pakistan decreased by 14.63 per cent in fiscal 2022-23
(July-June) where it fetched $16.501 billion in exchequer from textile
and apparel exports as compared to $19.329 billion in corresponding
period. The global economic slowdown had adversely affected textile
exports of Pakistan. The higher cost of energy and borrowing have
increased the cost of manufacturing thus, adversely impacting business
competitiveness. The industrial sector need to take immediate steps to
switch towards cheaper alternatives in order stay competitive in global
environment. The role of governing board is significant in existing
scenario faced by the country since it’s a crucial driver to measure the
company’s performance. The corporate governance deployed at BTML
serves as the foundation to make decisions that take into account a
variety of contexts, including the economic, social, regulatory, and
market environments. At BTML, the corporate governance standards
are established on ethical conduct and commercial principles, with the
purpose of providing long-term value and sustainability for all
stakeholders. The BTML corporate board members constantly balance
the interests of the board, management, investors, shareholders, and
stakeholders and carry out their tasks and responsibilities with
complete transparency and responsibility. The BTML assures to follow
best practices for corporate governance standards and encourage a
diverse approach to board composition by having the members with it
a range of expertise, perspectives and knowledge that adequately
reflect the broader concerns of various stakeholders, shareholders and
local communities.

Profit analysis

Chart Title
20,000,000,000
18,000,000,000
16,000,000,000
14,000,000,000
12,000,000,000
10,000,000,000
8,000,000,000
6,000,000,000
4,000,000,000
2,000,000,000
0
gross sales 21 gross sales 22 gross sales 23

Series 1 Series 2 Series 3

 Chart Title
4,500,000,000

4,000,000,000

3,500,000,000

3,000,000,000

2,500,000,000

2,000,000,000

1,500,000,000

1,000,000,000

500,000,000

0
gross profit 21 gross profit 22 gross profir 23

Series 1 Series 2 Series 3

the sales increased by the 21 to 23 and the gross profit were in peak in
22 but little bit declined in 23FY due to the current economic situation
and in today date the umer group enjoy a annual turnover over 300
million USDbut the company is not In a loss and handling the business
very effeminately
Earning per share
The EPS statistic is significant because investors and analysts use it to
evaluate corporate performance, forecast future earnings, and
estimate the worth of the company's shares. The greater the EPS, the
more profitable the company is thought to be, and the more earnings
available for distribution to shareholders. On the other hand investors
use the breakup value to analyses a company's financial stability. There
EPS and BVS of share is PKR 468.11 (Year 2022: PKR 919.38) and PKR
3,578.50 (Year 2022: PKR 3,101.96) respectively during the current year
ending June 30, 2023.

Ratio analysis of umer group

This enables the firm to spot the trends in a business and to compare
its performance and condition with the average performance of a
similar business in the same industry; it helps to estimate the strengths
and weaknesses of a company. A ratio analysis is a quantitative analysis
of information contained in a company’s operating and financial
performance such as its efficiency, liquidity; profitability and solvency
ratio analysis do hold great importance for each and every organization
a ratio analysis evaluates the health and performance of a company by
using the current year data as well as historical data from the previous
year.
Why ratio analysis?
Financial ratios are a great way to quickly assess a company’s
health before digging deeper into its financial statements. Price-
earnings ratios can provide insights into valuation, while debt-
coverage ratios can tell investors about potential liquidity risks.

In this report we will do ratio of Asset utilization, profitability ratio,

liquidity ratio and payable turnovers and other ratios
Annual report of 2022
Annual report of 2023
Calculation of ratios
Liquidity ratio
 Current ratio
a b a/b
Year Current asset Current Current
PKR liablities pkr ratio pkr
2021 6,372,300,096 1,082,598,119 5.86
2022 8,726,406,251 2,022,942,096 4.313
2023 17,009,354,789 9,717,083,258 1.750

Quick ratio
a b a/b
Year CA-inventory Current Quick
liabilities ratio
21 3,712,891,25 1,082,598,119 3.429
8
22 3,624,492,68 2,022,942,096 1.791
8
23 4,711,126,83 9,717,083,258 0.484
2
Asset utilization ratio
Recievable turnover
A B a/b
Year Sales(cr) Receivables Receivable
turnover
21 12,158,113,068 6,234,227 1950.21
22 12,252,509.050 28,945,773 423.291
23 18,545,108,053 88,419,626 2019.73

Average collection period

a b a/b
Year Receivables Sales / 365 Avrg
collection
period
21 6,234,227 12,158,113,068 0.18 days
22 28,945,773 12,252,509.050 0.86 days
23 88,419,626 18,545,108,053 1.74 days
 Inventory turnover
a b a/b
Year sales Inventory Inventory
turnover
21 12,158,113,068 2,659,408,838 4.571
22 12,252,509.050 5,101,913,563 2.401
23 18,545,108,053 12,298,227,957 1.507

Fixed asset turnover

a b a/b
Year sales Fixed asset
Fixed
asset
turnover
21 12,158,113,068 2,911,960,35 4.17
0
22 12,252,509.050 6,777,100,44 1.80
4
23 18,545,108,053 9,170,687,06 2.02
 8

Total asset turnover

a b a/b
Year sale Total asset Total
asset
turnover
21 12,158,113,068 9,493,346,160 1.280

22 12,252,509.050 15,545,102,811 0.788

23 18,545,108,053 26,223,693,726 0.707

Profitability ratio
Profit margin
a b a/b *100
Year Net income sales
21 1,850,706,20 12,158,113,068 15.2%
 3
22 2,758,154,51 12,252,509.050 22.51%
8
23 1,404,340,70 18,545,108,053 7.57%
0

Return on asset
a b a/b*100
Year Net income Total asset ROA
21 1,850,706,203 9,493,346,160 19.49%
22 2,758,154,518 15,545,102,811 17.74%
23 1,404,340,700 26,223,693,726 5.23%

Return on equity
a b a/b*100
Year Net income Stakeholders ROE
equity
21 1,850,706,203 6,763,063,770 27.36%
22 2,758,154,518 9,305,893,956 29.63%
23 1,404,340,700 10,735,485,699 13.08%
Debt utilization ratios
Debt to total asset
a b a/b*100
Year Total debt Total assetDebt to
asset
21 2,730,282,390 9,493,346,160 28.75%
22 6,239,208,855 15,545,102,811 40.13%
23 15,488,208,027 26,223,693,726 59.06%

Time interest earned

a b a/b
Year Income Interest
before int /
tax
 21 2,255,059,76 94,080,942 23.9 times
6
22 3,321,097,20 137,883,096 24.08
5 times
23 2,526,749,82 745,266,273 3.39 times
9

Payable turnover
a b (a/b)*365
Year Trade payable Annual Turnover
purchases
21 861,950,312 6,799,374,424 58 days
22 1,579,460,996 12,576,516,384 46 days
23 1,600,083,189 18,646,766,286 31 days

Analysis and interpretation of Company’s Ratios

Current Ratio:
The current ratio is a financial ratio that shows the proportion of a company’s current assets to its
current liabilities

Current ratio pkr

2021: 5.86
 2022: 4.313
2023: 1.750
If your current ratio is high then it means company is capable of paying its debt because it shows
company have enough cash and in 2021 it was in increase but in decline in 2023 which means company
may find difficult in having more cash to pay its debts external or internal