Crescent
Textile Mills Limited
Security
Analysis
2
Hafsa
Ahmed
Saiqa Abbasi
Rohma
Group Members Faizan
Awais
• Textile company formed in 1950 by Mr.
Muhammad Shafi
• Public Limited Company
• It had the highest sale of Yarn, clothes, and
INTRODUCTIO Home Textile in 1987-1995, 2008.
N
Vision
To be the favored selection of clients
through creative items and
arrangements and be a main
supporter of the economy by
improving an incentive for partners.
Pr o d u c t i o n
• We a v i n g a n d S p i n n i n g
• Dyeing and Printing
• Sewing
Major • H o m e Te x t i l e a n d M e n ’ s S u i t i n g
Departments Services
• Basic Services
• Fi n a n c e
• M a r ke t i n g
• Engineering
5
Products
Financial
Analysis
Should the stock be held, sold or bought?
4
Sustainable Growth
01
Rate
5%
Forecaste 02 Depreciation
Excessive Credit Periods are granted
d 03 FUNDS
Shortage of funds for purchasing new machines.
Assumpti 04 FACTORY SPACE
ons
Insufficient factory space.
DEBT
Company is indebted.
HOW DO WE
ANALYZE THE
SITUATION ?
CASHFLOW COMMON SIZE
FINANCIAL RATIOS
STATEMENT STATEMENT
FINANCIAL RATIOS 6
GROSS PROFIT
DSO
RATIO
The gross profit ratio is almost The DSO is higher than industry but its affect on
company depends upon the policy of industry.
same with the industry.
RETURN ON
ITR
EQUITY
The company’s ROE is greater than The ITR is less than that of industry and its
affect depends on the strategies and situations.
that of industry’s.
RETURN ON
QUICK RATIO
ASSETS
Anandam has higher ROA than that It is lower which is not beneficial
of industry. for company.
SWOT ANALYSIS OF FINANCIAL
RATIOS 7
STRENGTHS WEAKNESSES
1. Return on Equity
2. Return on Assets
3. Gross Profit Margin
S W 1.Current Ratio
2. Quick Ratio
3. Net Profit Ratio
OPPORTUNITIES THREATS
1. Days Sales Outstanding
2. Inventory Turnover Ratio
O T 1. If market ratios decrease.
CASHFLOW STATEMENT 8
INVESTING FINANCING
FLOW OF CASH
ACTIVITIES ACTIVITIES
Inflow of cash is The company The trend here
higher then invests quite a lot shows that the
outflow of cash. in the assets as company is doing
the amount has good with
increased in the improving then the
previous year. previous year.
COMMON SIZE STATEMENT:
INCOME STATEMENT
2012-13 2013-14 2014-15
Sales
Cash
credit 10% 10% 10%
90% 90% 90%
Total sales
100% 100% 100%
Cost of goods
sold 62% 59% 60%
Gross profit
38% 41% 40%
Operating
expense
General
administration&
4% 9% 12.5%
selling expense
Deprecation
Interest expense
5% 8% 8%
3% 3% 4%
Profit before
tax(PBT) 26% 20% 15%
Tax @30%
8% 6% 5%
Profit after tax
(PAT) 18% 14% 11%
BALANCE SHEET
2012-13 2013-14. 2014-15
Fixed assets 74% 45% 52%
Current assets
Cash and cash 2% 2% 1%
equivalent
A/C receivables 12% 27% 23%
Inventories 13% 27% 25%
Total assets 100% 100% 100%
Equity and
liabilities
47% 28% 22%
Equity share 14% 19% 21%
Reserve surplus 29% 22% 27%
Long-term 10% 31% 30%
borrowing
Current liabilities
10
9
8
7
6
5
4
3
2 2
4
6
9
3
7
1
8
THE DECISION
YES
90
8
7
6
5
4
3
2
1 2
4
6
9
3
7
1
8
The loan should be given to
ANANDAM COMPANY.
SUGGESTIONS 12
4 COLUMNS
CREDIT TIME PERIODS PROPER FACTORY
It should limitize the credit time Shift the factory to a proper and
periods so that they get paid on suitable place to increase the
time. production.
SHORT TERM
MANAGEMENT
INVESTMENTS
Do short term investments to Hire professional marketers,
increase the market credibility.. statisticians and accounting
experts..
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13
THANK YOU.
