Introduction:

Pakistan Stock Exchange:

Pakistan Stock Exchange was established on September 18, 1947
and was formally incorporated on March 10, 1949, under the
Karachi Stock Exchange. In October 1970, the second stock exchange
was established in Lahore to meet the stock trading needs of the
provincial metropolis. In October 1989, Islamabad stock exchange
was established to cater to the investors of northern parts of the country.
As, the three exchanges had separate management, trading interfaces, and indices and had no
mutualized structure, the Stock Exchanges Act was promulgated by the government of Pakistan
which ultimately resulted in the three exchanges integrating their operations effective January 11,
2016, under the new name “Pakistan Stock Exchange limited. (PSX)”

Sapphire Textile Mills Limited:

Sapphire Textile Mills Limited was incorporated in Pakistan on 11
March 1969 as a public limited company under the Companies Act,
1913 (now the Companies Act, 2017). The Company is principally
engaged in the manufacturing and sale of yarn, fabrics, home
textile products, finishing, stitching and printing of fabrics.

Vision Statement:
To be one of the premier textile Company recognized for leadership in technology, flexibility,
responsiveness, and quality. Our customers will share in our success through innovative manufacturing,
certifiable quality, exceptional services, and creative alliances. Structured to maintain in-depth
competence and knowledge about our business, our customer and worldwide markets. Our workforce
will be the most efficient in industry through multiple skill learning and the fostering of framework and
security of the safest work environment possible recognized as excellent citizen in the local and regional
community through our financial and human resources support and our senility to the environment.

Mission Statement:
Our mission is to be recognized as premier supplier to the markets we serve by providing quality yarns,
fabric, and other textile products to satisfy the needs of our customer. Our mission will be accomplished
through excellence in customer service, sales and manufacturing supported by teamwork of all
associates. We will continue our tradition of honesty, fairness, and integrity in relationship with our
customers, associates, shareholders, community and stakeholders.
 Analysis of Financial Statement:
Income Statement Analysis: (Rupees in '000)
Statement of Profit or Loss 2022 2021 2020 2019 2018
Net Sales 61,373,384 38,470,987 34,030,186 34,252,752 28,896,327
Cost of sales 49,514,316 32,120,873 29,195,495 28,847,019 25,360,087
Gross profit 11,859,068 6,350,113 4,834,691 5,405,733 3,536,240
Distribution cost 2,371,130 1,232,187 1,049,687 1,084,078 1,011,944
Administrative expenses 695,101 472,454 447,255 428,052 413,538
Other operating expenses 683,706 401,133 192,873 347,189 118,970
Other operating income 3,007,581 1,097,563 721,187 1,485,021 1,348,444
Profit from operations 11,116,712 5,341,902 3,866,062 5,031,435 3,340,232
Finance cost 2,659,056 1,582,533 2,556,977 2,085,427 1,391,491
Profit before taxation 8,457,656 3,759,369 1,309,085 2,946,008 1,948,741
Provision for taxation 1,442,104 496,434 129,996 386,568 353,682
Profit after taxation 7,015,552 3,262,935 1,179,089 2,559,440 1,595,059

Percentages
Vertical Analysis 2022 2021 2020 2019 2018
Net Sales 100% 100% 100% 100% 100%
Cost of sales 81% 83% 86% 84% 88%
Gross profit 19% 17% 14% 16% 12%
Distribution cost 4% 3% 3% 3% 4%
Administrative expenses 1% 1% 1% 1% 1%
Other operating expenses 1% 1% 1% 1% 0%
Other operating income 5% 3% 2% 4% 5%
Profit from operations 18% 14% 11% 15% 12%
Finance cost 4% 4% 8% 6% 5%
Profit before taxation 14% 10% 4% 9% 7%
Provision for taxation 2% 1% 0% 1% 1%
Profit after taxation 11% 8% 3% 7% 6%

Percentages
Horizontal Analysis 2022 2021 2020 2019 2018
Net Sales 59.53 13.05 -0.65 18.54 12.95
Cost of sales 54.15 10.02 1.21 13.75 10.71
Gross profit 86.75 31.34 (10.56) 52.87 32.06
Distribution cost 92.43 17.39 (3.17) 7.13 9.31
Administrative expenses 47.13 5.63 4.49 3.51 14.78
Other operating expenses 70.44 107.98 (44.45) 191.83 (67.38)
Other operating income 174.02 52.19 (51.44) 10.13 (53.78)
Profit from operations 108.10 38.17 (23.16) 50.63 (15.32)
Finance cost 68.03 (38.11) 22.61 49.87 43.61
Profit before taxation 124.98 187.18 (55.56) 51.17 (34.50)
Provision for taxation 190.49 281.88 (66.37) 9.30 39.46
Profit after taxation 115.01 176.73 (53.93) 60.46 (41.40)

Interpretation:

Balance Sheet:
Statement of Financial 2022 2021 2020 2019 2018
Position
Total Equity 26,109,673 21,018,586 16,476,548 16,382,080 16,022,255
Total non-current liabilities 15,861,348 14,658,569 15,034,790 12,766,693 13,336,334
Total current liabilities 28,671,603 16,121,258 16,121,258 14,414,170 12,971,562
Total equity and liabilities 70,642,625 51,798,413 44,446,280 43,562,943 42,330,151

Total non-current assets 33,837,979 29,207,483 26,963,596 27,107,861 26,982,905

Total current assets 36,804,645 22,590,929 17,482,684 1 16,455,082 15,347,246
Total assets 70,642,625 51,798,412 44,446,280 43,562,943 42,330,151

Horizontal Analysis:

Horizontal Analysis 2022 2021 2020 2019 2018

Total Equity 24.22 27.57 0.58 2.25 (5.72)
Total non-current liabilities 8.21 (2.50) 17.77 (4.27) (2.87)
Total current liabilities 77.85 24.63 (10.26) 11.12 10.96
Total equity and liabilities 36.38 16.54 2.03 2.91 (0.20)

Total non-current assets 15.85 8.32 (0.53) 0.46 (5.33)

Total current assets 62.92 29.22 6.24 7.22 10.30
Total assets 36.38 16.54 2.03 2.91 (0.20)

Vertical Analysis:

Vertical Analysis 2022 2021 2020 2019 2018

Total Equity 36.96 40.58 37.07 37.61 37.85
Total non-current liabilities 22.45 28.30 33.83 29.31 31.51
Total current liabilities 40.59 31.12 36.27 33.09 30.64
Total equity and liabilities 100.00 100.00 100.00 100.00 100.00

Total non-current assets 47.90 56.39 60.67 62.23 63.74

Total current assets 52.10 43.61 1 39.33 37.77 36.26
Total assets 100.00 100.00 100.00 100.00 100.00
Interpretation:

Cash Flow Statement

2022 2021 2020 2019 2018
Operating activities (5,826) 20 19 1,791 1,186
Investing activities (4,219) (1,814) (701) (2,185) (1,155)
Financing activities 10,061 1,835 610 436 (47)
Cash and cash equivalents at 99 75 34 97 55
the end of the year

Interpretation:

Ratio Analysis:
2022 2021 2020 2019 2018
Liquidity Ratios:
Current ratio 1.28 1.40 1.35 1.14 1.18 Times
Quick/acid test 0.48 0.60 0.66 0.62 0.76 Times
ratio
Turnover Ratio:
Inventory turn over 132.80 123.84 102.47 81.96 78.41 Days
Inventory turnover 2.68 2.83 3.38 4.20 4.37 Time
ratio
Debtor turnover 18.49 17.75 19.42 24.87 31.90 Days
Debtors’ turnover 19.73 20.57 18.79 14.68 11.44 Time
ratio
Creditors turnover 14.12 16.22 13.35 10.93 12.07 Days
Creditors turnover 25.85 22.50 27.35 33.38 30.24 Times
ratio
Fixed assets 3.54 2.76 2.66 2.86 2.63 Time
turnover ratio
Total assets 1.00 0.80 0.77 0.80 0.68 Time
turnover ratio
Operating cycle 135.68 125.37 108.56 96.89 96.24 Days
Profitability Ratios:
Gross Profit to 19.32 16.51 14.21 15.78 12.24 %
sales
EBITDA to sales 20.54 17.24 15.06 18.07 15.36 %
 Net Profit to sales 11.43 8.48 3.46 7.47 5.52 %
Return on equity 26.87 15.52 7.16 15.62 9.96 %
Return on capital 16.71 9.15 3.74 8.78 5.43 %
employed
Capital Structure
ratios:
Financial leverage 1.35 1.20 1.43 1.36 1.33 Time
ratio
Weighted average 7.55 6.26 9.34 8.56 5.84 %
cost of debt
Debt to equity ratio 0.66 0.79 0.88 0.87 0.87 Time
Interest cover ratio 4.18 3.37 1.51 2.41 2.40 Time
Market ratios:
Earnings per share 323.45 150.44 55.03 121.31 75.60 Rs. Per
share
Price-earnings ratio 3.41 5.80 14.83 11.62 15.13 Time
Price-to-book ratio 0.92 0.90 1.07 1.82 1.51 Time
Dividend yield 0.9070 1.72 - 1.84 1.40 %
Cash dividend per 10.00 15.00 - 26.00 16.00 Rs. Per
share share
Dividend payout 3.0917 9.97 - 21.43 21.16 %
ratio
Dividend cover 32,345 10.03 - 4.67 4.73 Time
ratio
Breakup value per 1,203.23 969.05 759.64 776.49 759.44 Rs. Per
share share
Market value per 1102.5 872.50 816.18 1,409.96 1,143.80 Rs. Per
share at the end of share
the year
Share Price - High 1300.75 1,144.32 1,440.00 1,410.98 2,144.80 Rs. Per
during the year share
Share Price - Low 786.00 730.00 612.00 932.31 1,035.94 Rs. Per
during the yea share
EBITDA 12,609 6,631 5,125 6,191 4,439 Rs. In
Million

Liquidity Ratios:
Current ratio
Quick/acid test ratio
Turnover Ratio:
Inventory turn over
Inventory turnover ratio
Debtor turnover
Debtors’ turnover ratio
Creditors turnover
Creditors turnover ratio
Fixed assets turnover ratio
Total assets turnover ratio
Operating cycle
Profitability Ratios:
Gross Profit to sales
EBITDA to sales
Net Profit to sales
Return on equity
Return on capital employed
Capital Structure ratios:
Financial leverage ratio
Weighted average cost of debt
Debt to equity ratio
Interest cover ratio
Market ratios:
Earnings per share
Price-earnings ratio
Price-to-book ratio
Dividend yield
Cash dividend per share
Dividend payout ratio
Dividend cover ratio
Breakup value per share
Market value per share at the end of the year
Share Price - High during the year
Share Price - Low during the yea
EBITDA

Nishat Mill Limited:

Nishat Mills Limited is a public limited Company incorporated in
Pakistan under the Companies Act, 1913 (Now Companies Act, 2017)
and listed on Pakistan Stock Exchange Limited. The Company is
engaged in the business of textile manufacturing and of spinning,
combing, weaving, bleaching, dyeing, printing, stitching, apparel,
buying, selling and otherwise dealing in yarn, linen, cloth and other
goods and fabrics made from raw cotton, synthetic fibre and cloth, and
to generate, accumulate, distribute, supply and sell electricity.

Vision Statement:
To be and remain industry lead by safeguarding stakeholders’ interest, serving community and playing a
meaningful role in the economy of Pakistan.

Mission Statement:
To increase financial returns by pursuing sustainable business, producing the best quality products and
providing excellent customer services while adopting best practices.

Analysis of Financial Statement:

Income Statement:
Statement of Profit or Loss 2022 2021 2020 2019 2018
Revenue 115,768,065 71,431,010 60,904,096 63,499,029 53,729,124
Gross Profit 17,335,571 9,317,855 7,276,126 7,656,601 5,550,446
EBITDA 18,358,269 11,137,991 8,719,892 11,211,441 8,395,775
Other Income 5,571,415 3,750,188 3,032,390 5,158,380 4,102,639
Profit Before Tax 12,907,285 7,070,502 4,479,284 6,897,048 4,957,127
Profit After Tax 10,311,674 5,922,470 3,506,284 5,859,048 4,097,127

Vertical Analysis:
Vertical Analysis 2022 2021 2020 2019 2018
Revenue 100% 100% 100% 100% 100%
Gross Profit 15% 13% 12% 12% 10%
EBITDA 16% 16% 14% 18% 16%
 Other Income 5% 5% 5% 8% 8%
Profit Before Tax 11% 10% 7% 11% 9%
Profit After Tax 9% 8% 6% 9% 8%

Horizontal Analysis:
Horizontal Analysis 2022 2021 2020 2019 2018
Revenue 62.07% 17.28% -4.09% 18.18% 9.10%
Gross Profit 86.05% 28.06% -4.97% 37.95% 3.17%
EBITDA 64.83% 27.73% -22.22% 33.54% 1.98%
Other Income 48.56% 23.67% -41.21% 25.73% -3.69%
Profit Before Tax 82.55% 57.85% -35.06% 39.13% -1.26%
Profit After Tax 74.11% 68.91% -40.16% 43.00% -3.88%

Interpretation:

Balance Sheet:
Statement of Financial Position 2022 2021 2020 2019 2018
Non-Current Assets

Property, Plant and Equipment 39,766,323 35,926,594 31,292,722 28,968,219 28,180,049

Long Term Investments 35,720,224 48,620,695 37,979,074 34,930,333 44,757,279

Other Non-Current Assets 1,044,696 1,104,867 865,591 849,580 756,020

Current Assets

Stores, Spares and Loose Tools 3,999,710 2,605,602 2,256,569 3,102,988 1,714,031

Stock in Trade 31,826,616 17,972,691 20,753,543 17,008,459 12,243,652

Short Term Investments - - - - 2,581,520

Other Current Assets 25,177,008 24,881,925 17,513,415 15,685,813 12,503,482

Total Assets 137,534,577 131,112,000 110,660,914 100,545,392 102,736,033

Shareholders' Equity 79,200,943 85,747,779 71,427,860 66,615,270 75,713,145

Non-Current liabilities

Long Term Financing 12,284,112 11,577,915 9,222,781 5,259,927 5,190,839

Deferred Liabilities 2,191,059 1,055,992 302,672 215,440 571,833

Current Liabilities
Short Term Borrowings 26,730,048 18,718,262 19,329,768 17,982,262 12,507,590

Current Portion of Non-Current Liabilities 4,302,449 4,206,123 703,032 1,784,470 2,144,900

Other Current Liabilities 12,825,966 9,806,303 9,674,801 8,688,023 6,607,726

Total Equity and Liabilities 137,534,577 131112000 110,660,914 100,545,392 102,736,033

HORIZONTAL ANALYSIS
Statement of Financial Position 2022 2021 2020 2019 2018
Non-Current Assets

Property, Plant and Equipment 10.69 14.81 8.02 2.80 (2.72)

Long Term Investments (26.53) 28.02 8.73 (21.96) 28.13
Other Non-Current Assets (5.45) 27.64 1.88 12.38 (11.01)
Current Assets

Stores, Spares and Loose Tools 53.50 15.47 (27.28) 81.03 (44.76)
Stock in Trade 77.08 (13.40) 22.02 38.92 (28.01)
Short Term Investments

Other Current Assets 1.19 42.07 11.65 25.45 (20.29)

Total Assets 4.90 18.48 10.06 (2.13) 2.18
Shareholders' Equity (7.63) 20.05 7.22 (12.02) 13.66
Non-Current liabilities

Long Term Financing 6.10 25.54 75.34 1.33 (1.31)

Deferred Liabilities 107.49 248.89 40.49 (62.32) 165.43
Current Liabilities

Short Term Borrowings 42.80 (3.16) 7.49 43.77 (30.44)

Current Portion of Non-Current Liabilities 2.29 498.28 (60.60) (16.80) 20.20
Other Current Liabilities 30.79 1.36 11.36 31.48 (23.94)
Total Equity and Liabilities 4.90 18.48 10.06 (2.13) 2.18

VERTICAL ANALYSIS
Statement of Financial Position 2022 2021 2020 2019 2018
Non-Current Assets

Property, Plant and Equipment 28.91 27.40 28.28 28.81 27.43

Long Term Investments 25.97 37.08 34.32 34.74 43.57
Other Non-Current Assets 0.76 0.84 0.78 0.84 0.74
Current Assets

Stores, Spares and Loose Tools 2.91 1.99 2.04 3.09 1.67
Stock in Trade 23.14 13.71 18.75 16.92 11.92
Short Term Investments 20.64
Other Current Assets 18.31 18.98 15.83 15.60 12.17
Total Assets 100.00 100.00 100.00 100.00 100.00
Shareholders' Equity 57.59 65.40 64.55 66.25 73.70
Non-Current liabilities

Long Term Financing 8.93 8.83 8.33 5.23 5.05

Deferred Liabilities 1.59 0.81 0.27 0.21 0.56
 Current Liabilities

Short Term Borrowings 19.44 14.28 17.47 17.88 12.17

Current Portion of Non-Current Liabilities 3.13 3.21 0.64 1.77 2.09
Other Current Liabilities 9.33 7.48 8.74 8.64 6.43
Total Equity and Liabilities 100.00 100.00 100.00 100.00 100.00

Interpretation:

Cash Flow Statement:

Cash Flow Statement 2022 2021 2020 2019 2018
Cash Flow from Operating
Activities (10,669,883) 5,722,435 1,560,005 905,102 2,153,808
Cash Flow from Investing
Activities (1,787,869) (3,378,461) (4,828,502) (3,957,796) 1,851,315
Cash Flow from Financing
Activities 7,277,134 2,800,130 2,820,113 3,524,492 (3,944,241)
Changes in Cash &Cash
Equivalents (5,180,618) 5,144,104 (448,384) 471,798 60,882
Cash and Cash Equivalents at
Year End 91,727 5,272,345 128,241 576,625 104,827

Interpretation:

Ratio Analysis:
2022 2021 2020 2019 2018
Liquidity Ratios
Current Ratio 1.39 1.39 1.36 1.26 1.37
Quick Ratio 0.57 0.76 0.59 0.55 0.71
Cash to Current 0 0.16 0 0.02 0 Times
Liabilities
Cash Flows -0.09 0.08 0.03 0.01 0.04 Times
from Operations
to Sales
Activity /
Turnover Ratios
Inventory 3.95 3.21 2.84 3.82 3.86 Times
Turnover Ratio
No. of Days in 92.41 113.71 128.87 95.55 94.56 Days
Inventory
Debtors 13.69 13.19 13.54 14.53 17.12 Times
Turnover Ratio
No. of Days in 26.66 27.67 27.03 25.12 21.32 Days
Receivables
Creditors 6.08 3.75 3.49 4.39 4.46 Times
Turnover Ratio
No. of Days in 60.03 97.33 104.87 83.14 81.84 Days
Creditors
Operating Cycle 59.04 44.05 51.03 37.53 34.04 Days
Total Assets 0.84 0.54 0.55 0.63 0.52 Times
Turnover Ratio
Market Ratios
Earning per
Share 29.33 16.84 9.97 16.66 11.65 Times
Price Earning
Ratio 2.52 5.54 7.82 5.60 12.10 %
Dividend Yield
Ratio 5.41 4.29 5.13 4.29 3.37 %
Dividend Payout
Ratio 13.64 23.75 40.12 24.01 40.77 Times
Dividend Cover
Ratio 7.33 4.21 2.49 4.17 2.45 Rs.
Dividend Per
Share 4.00 4.00 4.00 4.00 4.75 Rs.
Break-up Value 225.26 243.88 203.15 189.46 215.34 %
Proposed
Dividend Market
value per share 40.00 40.00 40.00 40.00 47.50 Times
Market value
per share
Closing 73.91 93.30 78.01 93.34 140.92 Rs
High 101.20 124.89 119.75 153.73 171.56 Rs
Low 68.50 79.73 53.00 91.69 130.03 Rs
Capital
Structure Ratios
Financial
Leverage Ratio 53.09 38.83 40.96 37.57 26.21 %
Weighted
Average Cost of
Debt 5.73 3.93 5.54 7.44 4.75 %
 Debt to Equity
Ratio 15.51 13.50 12.91 7.90 6.86 %
Interest Cover
Ratio 6.97 6.75 3.98 5.13 5.99 Times
Gearing Ratio 34.68 27.97 29.06 27.31 20.77 %

Liquidity Ratios:
Current Ratio
Quick Ratio
Cash to Current Liabilities
Cash Flows from Operations to Sales
Activity / Turnover Ratios:
Inventory Turnover Ratio
No. of Days in Inventory
Debtors Turnover Ratio
No. of Days in Receivables
Creditors Turnover Ratio
No. of Days in Creditors
Operating Cycle
Total Assets Turnover Ratio
Market Ratios:
Earnings per Share
Price Earnings Ratio
Dividend Yield Ratio
Dividend Payout Ratio
Dividend Cover Ratio
Dividend Per Share
Break-up Value
Proposed Dividend Market value per share
Capital Structure Ratios
Financial Leverage Ratio
Weighted Average Cost of Debt
Debt to Equity Ratio
Interest Cover Ratio
Gearing Ratio