financial statement analysis msc textile

8/8/2019 Financial Statement Analysis MSC Textile

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SPREED SHEETMSC TEXTILE MILLS (PVT) LTD

As at Year 2003 Year 2004 Year 2005Current Assets Audited Audited AuditedCash & Bank 83,599,569 154,461,108 154,911,973Stock in trade / Inventory 426,533,640 490,121,810 729,804,251Debtors 134,381,257 194,725,241 356,984,972Investment & Other Receivable 91,461,447 90,081,103 118,959,116Total Current Assets 768,153,468 964,705,125 1,419,098,670Current LiabilitiesShort term financing 545,915,376 685,922,921 848,873,173Creditor 137,920,528 155,104,403 188,050,572Taxation 15,591,004 14,386,216 12,422,874Dividends 35,851,449 59,755,429 59,926,740Other liabilities 52,508,217 62,181,176 316,735,546Total Current Liabilities 748,083,801 963,936,789 1,418,777,721Working Capital 20,069,667 768,336 320,949Fixed Assets & InvestmentsFreehold Land 12,903,280 17,936,880 126,900,000Building 92,969,459 95,408,696 102,308,234Plant & Machinery 156,029,632 165,805,937 364,890,295Office Equipment (Fur & Fix) 1,386,759 1,248,083 1,123,275Capital Work in Progress 1,972,924 1,215,980 64,154,333Long Term Investment 45,921,466 48,739,846 60,882,666Long Term Deposits 7,001,520 10,672,359 8,792,359Other Assets 30,569,685 37,736,393 46,744,099Total Fixed Assets 502,760,058 545,478,407 1,004,020,775Capital Employed 522,739,725 546,246,743 1,004,341,724Less: Long term debt 139,599,950 121,732,073 432,555,670Net Worth 383,139,775 424,514,670 571,768,054General Reserve 150,049,334 165,000,000 190,000,000Unappropriated Profit 123,090,441 149,514,670 271,786,054Share Capital / Issued Capital 110,000,000 110,000,000 110,000,000Share Holder Interest 383,139,775 424,514,670 571,768,054Sales 1,696,098,797 1,547,316,864 1,566,866,012Less: Cost of good sold 1,448,059,673 1,287,641,679 1,181,477,655Gross Profit 248,039,124 259,675,185 385,388,357Less: Operating expense 110,066,356 108,594,850 130,555,059Operating Profit 137,972,768 151,080,335 254,833,298Add: Non Trading Income 71,087 70,213 50,269

138,043,855 151,150,548 254,883,567Less Financial & Other ChargesFinancial 51,075,826 50,782,374 64,237,768Other Charges 9,368,804 17,317,286 16,310,618Net profit before taxes 35,901,608 35,412,572 129,761,354Less: Taxes 15,591,004 14,386,216 12,422,874Net profit after taxes 20,310,604 21,026,356 117,338,480Operating Cash Flow 199,837,544 10,005,579 27,313,703

COMMON SIZE ANALYSISMSC TEXTILE MILLS (PVT) LTD

As at Year 2003 Year 2004 Year 2005Current Assets Audited % Audited % Audited %


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Cash & Bank 6.48 10.23 6.39Stock in trade / Inventory 33.09 32.47 30.11Debtors 10.42 12.9 14.73Investment & Other Receivable 7.09 5.96 4.9Total Current Assets 59.6 63.91 58.56Current LiabilitiesShort term financing 42.35 45.44 35.03

Creditor 10.7 10.27 7.76Taxation 1.2 0.95 0.51Dividends 2.78 3.95 2.74Other liabilities 4.07 4.11 13.07Total Current Liabilities 58.04 63.86 58.55Working Capital 1.55 0.05 0.01Fixed Assets & InvestmentsFreehold Land 1 1.18 5.23Building 7.21 6.32 4.22Plant & Machinery 12.1 10.98 15.05Office Equipment (Fur & Fix) 0.1 0.08 0.04Capital Work in Progress 0.15 0.08 2.64Long Term Investment 3.56 3.22 2.51Long Term Deposits 0.54 0.7 0.36Other Assets 2.37 2.5 1.92Total Fixed Assets 39 36.13 41.43Capital Employed 40.55 36.18 41.44Less: Long term debt 10.83 8.06 17.85Net Worth 29.72 28.12 23.59General Reserve 11.64 0.93 7.84Unappropriated Profit 9.55 9.9 11.21Share Capital / Issued Capital 8.53 7.28 4.53Share Holder Interest 29.72 28.12 23.59Sales 100 100 100Less: Cost of good sold 85.37 83.21 75.4Gross Profit 14.62 16.78 24.59Less: Operating expense 6.48 7.01 8.33Operating Profit 8.13 9.76 16.26Add: Non Trading Income 0.004 0.004 0.003

8.13 9.76 16.26Less Financial & Other ChargesFinancial 3.01 3.28 4.09Other Charges 0.55 1.11 1.04Net profit before taxes 2.11 2.28 8.28Less: Taxes 0.91 0.92 0.79Net profit after taxes 1.19 1.35 7.48Operating Cash Flow 11.78 0.64 1.74

INDEX ANALYSISMSC TEXTILE MILLS (PVT) LTD

As at Year 2003 Year 2004 Year 2005Current Assets % % %Cash & Bank 100 184.76 185.3Stock in trade / Inventory 100 114.9 171.1Debtors 100 144.9 265.65Investment & Other Receivable 100 98.49 130.06Total Current Assets 100 125.58 184.74


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Current LiabilitiesShort term financing 100 125.64 155.49Creditor 100 1.12 1.36Taxation 100 92.27 79.67Dividends 100 1.66 0.16Other liabilities 100 118.42 603.21Total Current Liabilities 100 123.88 182.34

Working Capital 100 7.73 3.23Fixed Assets & InvestmentsFreehold Land 100 139.01 983.47Building 100 102.62 110.04Plant & Machinery 100 106.26 233.85Office Equipment (Fur & Fix) 100 89.99 81Capital Work in Progress 100 61.63 3251.73Long Term Investment 100 106.13 132.57Long Term Deposits 100 152.42 125.57Other Assets 100 1.23 1.52Total Fixed Assets 100 108.49 199.7Capital Employed 100 3.82 1.59Less: Long term debt 100 621.08 309.85Net Worth 100 110.79 149.23General Reserve 100 109.96 126.62Unappropriated Profit 100 121.46 220.8Share Capital / Issued Capital 100 100 100Share Holder Interest 100 110.79 149.23Sales 100 789.04 92.38Less: Cost of good sold 100 88.92 81.59Gross Profit 100 104.69 155.37Less: Operating expense 100 98.66 118.61Operating Profit 100 109.5 184.69Add: Non Trading Income 100 98.77 70.71

100 109.49 184.63Less Financial & Other ChargesFinancial 100 99.42 125.76Other Charges 100 184.83 174.09Net profit before taxes 100 98.63 361.43Less: Taxes 100 92.27 79.67Net profit after taxes 100 103.73 577.72

Comments on Common Size

Analysis


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The Common Size analysis of assets side of balance sheet shows that

percentage of current assets in relation with total assets first increase but

in last year it decreases. In fixed assets it increases. But in deposits and

advances has been decline three-year relation with the total of assets.

The liabilities side shows that current liabilities in percentage in relation

with total assets has also decrease so company must be careful to control

current liabilities, other items of liabilities are also declining over three

Years in relation with the percentage of total assets.

The income statement analysis shows that gross profit is increasing but

operating profit is declining. The overall net profit increasing over two

years and also grows in third year.


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Comments on Index Analysis

Index analysis of balance sheet shows that by taking 2003 as base year the

total liabilities and shareholders equity has been increased over the next

two years, and same like as the case with assets which also increased over

the next two years.

From the income statement point of view gross profit has also increased

over the next two years as compared with the base year. The same is the

case with operating profit and ultimately net profit.


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Table of Contents

Preface

Spread Sheet

Trend Analysis

Graphical representation of ratio

Comments on Trend analysis

Common Size Analysis

Comments on common size analysis

Index Size Analysis

Comments on index analysis


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Preface

Title:

Financial Statement Analysis of MSC Textile mills (Pvt.) Ltd.

Objectives:

To furnish information for making investment and credit decision.

To identify performance to aid decision-making.

Identify that how much a firm financial by external debt.

Measure the performance of the assets.

To know firm profitability and its market value.

Benefits:

Use financial informations to improve managerial decision.

We will evaluate the financial condition and performance of a firm

over the year.

Ratio can tell a comparison between assets and liabilities.

Analyze whether a company invest more or not.

To see the relationship between cash flows and accounting profit.

Sources:

Financial Management By van Horn

Managerial finance By Lawrence j. Gitman


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Annual report of MSC Textile Mills (pvt) Ltd.

Trend Analysis

MSC Textile Mills (pvt) Ltd

Years 2003 2004 2005Liquidity Ratio:Current Ratio 1.02:1 1.00:1 1.00:1Quick Ratio 0.41:1 0.46:1 0.46:1Cash Ratio 1.02:1 1.56:1 1.70:1N.W.Capital Ratio 0.02:1 0.0007:1 0.0002:1

Debt Ratio:Total Debt to Total Assets 0.10:1 0.12:1 0.14:1Long Term Debt to Total Assets 0.01:1 0.08:1 0.17:1Total Capitalization Ratio 1.09:1 1.36:1 1.45:1Total Debt to Total Equity 63.35%: 37.65% 51.05%: 48.95%52.05%: 47.95%

Long Term Debt to Total Equity 36.70%: 64.30% 45.75%: 55.25% 47.03%: 52.07%

Coverage Ratio:Financial Charges Coverage Ratio1.70 Times 1.97 Times 2.96 Times

Assets Efficiency Ratio:Receivable Turnover Ratio 2.36 Times 2.42 Times 3.14 TimesInventory Turnover Ratio 4.79 Times 2.80 Times 1.95 TimesPayable Turnover Ratio 0.63 Times 0.41 Times 0.63 TimesTotal Assets Turnover Ratio 0.01 Times 0.01 Times 0.04 TimesPayable Turnover in Days 571 Days 878 Days 571 DaysInventory Turnover in Days 75 Days 128 Days 184 Days

Receivable Turnover in Days 152 Days 148 Days 114 DaysOperating Cycle 227 Days 276 Days 298 DaysCash Cycle 334 Days 602 Days 273 Days

Profitability Ratio:Gross Profit Margin 14.62% 16.78% 24.59%Operating Profit Margin 8.13% 9.76% 16.26%Net Profit Margin 1.19% 1.35% 7.88%ROA / ROI 0.01% 0.01% 0.04%ROE 1.81% 0.09% 0.24%


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Liquidty Ratio

0

1

2

3

4

2003 2004 2005

Years

V a l u e s

N.W.CapitalRatio

Cash Ratio

Quick Ratio

Current Ratio

Debt Ratio

0

0.5

1

1.5

2

2003 2004 2005

Years

V a

l u e s

TotalCapitalizationRatio

Long Term Debtto Total Assets

Total Debt toTotal Assets


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Total Debt to Total Equity Ratio

0% 50% 100%

2003

2004

2005

Total Debt Ratio

Total Equity Ratio

Long term Debt to Total Equity Ratio

0% 50% 100%

2003

2004

2005Long term DebtRatio

Total Equity Ratio

Coverage Ratio

01234

2003 2004 2005

Years

T i m e s Financial

ChargesCoverage Ratio


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Assets Effciency Ratio

0

5

10

2003 2004 2005

Years

T i m e s

Total Ass etsTurnover Ratio

PayableTurnover Ratio

InventoryTurnover Ratio

ReceivableTurnover Ratio

Assets Efficiency Ratio

0

1000

2000

3000

2003 2004 2005

Years

D a y s

CashCycle

OperatingCycle

ReceivableTurnover inDaysInventoryTurnover inDaysPayable

Profatibality Ratio

0.00%

20.00%

40.00%

60.00%

2003 2004 2005

Years

P e r c e n t a g e

ROE

ROA / ROI

Net ProfitMargin

Operating ProfitMargin

Gross ProfitMargin


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Aggregate Performance

The company in a position to meet every challenges regarding to

current assets and current liabilities. The company has sufficient

funds to meet its current and long-term debts.

The company cash cycle is also stable during the required time

periods and in position to invest in relevant aspects in which

company create greater profit and market share.

Company financial coverage is also better and company enjoys

better investment and more good financial position. Companys

profit is also stable during the required time period. Company gets

sufficient return on investment and assets.


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Comments on Trend Analysis

As can be seen, the current ratio and acid test ratio has been

increased over year by year but the company needs more

improvement in order to get financial stability.

The firm cash ratio increased over three years, which tells that

company has enough cash to meet current obligations so, company

has to over come it.

Companys debt ratio tells us that over three Years Company

become capable of receiving less financing from outside.

The company activity ratio shows that companys assets areefficiently utilized and company is trading its assets very carefully

and finally the profitability of a company is increasing quickly over

three years and company get sufficient returns on investment.

financial statement analysis msc textile

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