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    Gul Ahmed

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    NABEEL UR RAHMAN
    Gul Ahmed is a Pakistani textile company formed in 1953 with operations in textiles, energy, and banking. It has over 500,000 spindles and 300 weaving machines. The document analyzes Gul Ahmed's ratio analysis for 2018 compared to prior years and competitors. Key highlights include improved liquidity, inventory turnover, and profitability ratios resulting in higher earnings per share and returns. Overall, the ratio analysis indicates Gul Ahmed has strengthened its financial position through higher sales volumes, operational efficiencies, and debt repayments.

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    Gul Ahmed

    Uploaded by

    NABEEL UR RAHMAN
    57 views20 pages
    Gul Ahmed is a Pakistani textile company formed in 1953 with operations in textiles, energy, and banking. It has over 500,000 spindles and 300 weaving machines. The document analyzes Gul Ahmed's ratio analysis for 2018 compared to prior years and competitors. Key highlights include improved liquidity, inventory turnover, and profitability ratios resulting in higher earnings per share and returns. Overall, the ratio analysis indicates Gul Ahmed has strengthened its financial position through higher sales volumes, operational efficiencies, and debt repayments.

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    GUL AHMED

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    Gul Ahmed is a Pakistani textile company formed in 1953 with operations in textiles, energy, and banking. It has over 500,000 spindles and 300 weaving machines. The document analyzes Gul Ahmed's ratio analysis for 2018 compared to prior years and competitors. Key highlights include improved liquidity, inventory turnover, and profitability ratios resulting in higher earnings per share and returns. Overall, the ratio analysis indicates Gul Ahmed has strengthened its financial position through higher sales volumes, operational efficiencies, and debt repayments.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    57 views20 pages

    Gul Ahmed

    Uploaded by

    NABEEL UR RAHMAN
    Gul Ahmed is a Pakistani textile company formed in 1953 with operations in textiles, energy, and banking. It has over 500,000 spindles and 300 weaving machines. The document analyzes Gul Ahmed's ratio analysis for 2018 compared to prior years and competitors. Key highlights include improved liquidity, inventory turnover, and profitability ratios resulting in higher earnings per share and returns. Overall, the ratio analysis indicates Gul Ahmed has strengthened its financial position through higher sales volumes, operational efficiencies, and debt repayments.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 20

    GUL AHMED

    RATIO ANALYSIS
    • NABEEL UR RAHMAN
    • MIR YOUSUF
    • MUNEEB AHMED
    • ZOHAIB NADEEM
    • FAISAL NAZIR
    INTRODUCTION
    • Formed in 1953 listed in 1970
    • Formed by Gul ahmed group founder Haji Ali Muhammad
    • Capacity of 51840 spindles 300 state of the weaving machines
    • Make everything from yarn to finish products
    • Have our own power plant
    KEY FACTORS TO BE CONSIDERED
    • Textile giant and also strong presence in retail business
    • Entered in retail by launching ideas brand
    • Excessive chain of more than 40 retail stores
    • Main three businesss Gul ahmed textile Gul ahmed energy and Habib metro
    politan bank
    RATIO ANALYSIS

    Liquidity 2018 2017 2016 Sapphire Nishat


    ratios Textile Mills Textile Mills
    2018 2018
    Current ratio 1.14 1.11 1.08 1.18 1.37

    Quick ratio 0.4 0.37 0.26 0.76 0.71


    Liquidity ratios analysis
    1. Long term borrowing 1.27 billion under state bank financing to textile sector
    2. Golden opportunity because of low interest rates
    3. Opportunity buying of inventory and enhanced operational spinning.
    4. Deferred liabilities and staff retirement benefits have reduced by 73%
    5. Repayments of loans have decreased by 3%
    ACTIVITY RATIOS

    Activity 2018 2017 2016 Sapphire Nishat Textile


    ratios Textile Mills Mills
    2018 2018
    Inventory 2.52 2.5 1.99 5.28 3.86
    Turnover
    Inventory 145 146 184 112 94.5
    turnover days
    Avg collection 10.44 14.04 15.09 9.8 21.32
    Period
    Activity Ratios

    Activity ratios 2018 2017 2016 Sapphire Nishat Textile


    Textile Mills Mills
    2018 2018
    Avg Collection 35 26 24 20.1 21.32
    period days
    Avg payment 3.26 4.41 3.38 3.91 4.23
    period
    Avg payment 107 84 120 95 81.84
    period days
    Total assets 1.05 1.09 1.00 0.68 0.52
    turnover
    Activity ratios analysis
    • Inventory turnover ratio has improved during the year because of higher
    turnover and efficiency in supply chain.
    • Debtors’ turnover has decreased due to higher yarn sales volume in local market
    with higher credit period and strategic non-discounting of export bills.
    • Creditors’ turnover ratio has increased as the Company had negotiated better
    credit terms from suppliers rather than relying on short term borrowings
    • Total assets has slightly decreased because of disposal but higher profits have
    maintained that.
    Financial Leverage Ratios

    Financial 2018 2017 2016 Sapphire Nishat Textile


    leverage ratios Textile Mills Mills
    2018 2018
    Debt ratio 0.35 0.40 0.36 0.62 0.28

    Debt equity 0.55 0.65 0.53 0.80 0.06 (6.8%)

    Interest earned 3.36 1.92 2.47 8.57 5.99


    ratio
    Financial leverage ratios analysis
    • Long-term loans were obtained but repayments during the year have ensured
    that the debt ratio has been sustained.
    • Higher earning has also improved debt equity ratio
    • Due to lower debt level and higher profitability, the interest coverage ratio
    • has increased to 3.36 from 1.92 last year
    Market ratios

    Market ratios 2018 2017 2016 Sapphire Nishat Textile


    Textile Mills Mills
    2018 2018
    Earning per 5.82 2.5 3.92 16.01 11.65
    share
    Price earning 7.38 16.36 9.23 14.93 6.24
    ratio
    Market ratios analysis
    • Earnings per share had increased to Rs. 5.82 from Rs. 2.50 (restated) in the
    current year due to higher profitability.
    • Price earnings ratio decreased to 7.38 times from 16.36 times which is a
    combined result of higher earnings per share and improvement in market price
    of the shares
    Profitability Ratios
    Profitability 2018 2017 2016 Sapphire Nishtat
    ratios Textile Mills Textile Mills
    2018 2018
    GP ratio 20.99% 17.99% 22.64% 12.24% 16.03%

    Operation 11.37% 8.16% 10.44% 6.74% 15.63%


    profit margin
    Net profit 4.55% 2.04% 3.54% 5.52% 8.60%
    margin
    ROE 17.63% 8.34% 14.37% 9.96% 7.31%

    ROCE 17.45% 10.52% 18.97% 7.19% 6.10%


    Profitability ratio analysis
    • Prior investment in inventory and operational efficiencies has provided with
    massive increase in profits
    • Cost of raw materials and energy has increased but the company has still
    managed to generate good numbers.
    • Increase in vast amount of sales numbers has increased selling and distribution
    expenses
    • Increased profitability has helped in impressive ROE and ROCE ratios
    Gul Ahmed

    Sapphire Textile

    Nishat Textile
    Share Price
    Questions

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