Professional Documents
Culture Documents
2
FINANCIAL STATEMENT ANALYSIS
Presented To:
Mr. Hamza Mukhtar
Presented By:
NAMRA IQBAL
I-D # 2005-AG-4166
AYESHA ANEES
I-D # 2005-AG-4190
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OVERVIEW OF THE PRESENTATION
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OVERVIEW OF THE PRESENTATION
1. Economic Analysis
2. Industry Analysis
3. Firm Analysis
• Common size analysis
• Vertical analysis
• Horizontal analysis
• Ratios Analysis
• Peer Group Analysis
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OVERVIEW OF THE ECONOMY
OF PAKISTAN
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ECONOMIC OVERVIEW OF
PAKISTAN
MONETORY POLICY
FISCAL POLICY
INFLATION
UNEMPLOYMENT
GROWTH AND INVESTMENT
AGRICULTURE SECTOR
MANUFACTURING
MONEY AND CREDIT
EXTERNAL DEBT AND LIABILITIES
EDUCATION
ENERGY
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MONETORY POLICY
IT IS A MEASURE USED BY THE SBP TO MANAGE AND
CONTROL THE ECONOMIC AND FINANCIAL SECTOR OF THE
COUNTRY.
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INFLATION
Inflation is the general rise in the prices of all the commodities. There are
three major types of inflation.
The food inflation is estimated at 15.0 percent and non-food 6.8 percent,
against 10.2 percent and 6.2 percent in the corresponding period of last
year. 11
INFLATION
The Wholesale Price Index (WPI) during July-April, 2007-08 have
increased by 13.7 percent, as against 6.9 percent of last year.
The Sensitive Price Indicator (SPI) has recorded an increase of 14.1 percent
during July-April, 2007- 08, as against 11.1 percent of last year.
The increase in inflation rate during the current year 2007-08 is attributable
to the increase in food price inflation which has been due to increase in
prices of wheat, edible oil, rice, pulses, milk, poultry, meat, fresh
vegetables
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UNEMPLOYMENT
Unemployment is a central problem because when unemployment
is high, resources are wasted and people's incomes are depressed;
during such periods, economic distress also spills over to affect
people's emotions and family lives.
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CAUSES OF UNEMPLOYMENT
Agriculture sectors is not absorbing them due
to adaptation of mechanical industries.
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GROWTH AND INVESTMENT
Pakistan’s economy has grown at an average rate of almost 6.6 percent per annum
during the last five years. Real GDP grew by 5.8 percent in 2007-08 as against 6.8
percent last year and growth target of 7.2%. The economy has shown great
resilience against internal and external shocks of extraordinary nature during the out
going fiscal year.
Agriculture sector showed dismal performance and grew by 1.5 percent as against
3.7 percent last year and target of 4.8 percent.
Pakistan’s per capita real GDP has risen at a faster pace in real terms during the last
six years (4.5% per annum on average in rupee terms) leading to a rise in average
income of the people.
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GROWTH AND INVESTMENT
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MANUFACTURING
Overall manufacturing posted a growth of 5.4 percent during the
first nine months of the current fiscal year against the target of
10.9 percent and 8.1 percent of last year.
Large-scale manufacturing, accounting for 70.0 percent of overall
manufacturing registered a growth of 4.8 percent in the current
fiscal year
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MONEY AND CREDIT
Overall developments in the money and credit sector during the fiscal year
2007-08 have been satisfactory.
The Islamic Financial Industry has grown substantially and its assets has
reached to a level of Rs.200 billion.
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EXTERNAL DEBT & LIABILITIES
External debt and liabilities (EDL) at the end of March FY08 were
US$ 45.9 billion. The net addition of $ 5.4 billion represents a 13.3
percent increase over the stock at the end of FY07.
The overall literacy rate (10 years & above) was 45 percent in 2001
which has increased to 55 percent in 2006-07, indicating a 10 percentage
points increase over period of only six years.
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ENERGY
Natural Gas
1. The average production of natural gas per day stood at 3,966 million cubic
feet during the year.
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TEXTILE INDUSTRY OUT LOOK
The textile industry is one of the most important sectors of Pakistan. It
contributes significantly to the country’s GDP, exports as well as
employment. It is, in fact, the backbone of the Pakistani economy.
The textile industry of Pakistan has a total established spinning capacity
of 1550 million kgs of yarn, weaving capacity of 4368 million square
metres of fabric and finishing capacity of 4000 million square metres.
The industry has a total of 1221 units engaged in ginning and 442 units
engaged in spinning. There are around 124 large units that undertake
weaving and 425 small units.
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TEXTILE INDUSTRY OUT LOOK
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CONTRIBUTION TO EXPORTS
According to recent figures:
the Pakistan textile industry contributes more than 60% to the
country’s total exports, which amounts to around 5.2 billion US
dollars.
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SWOT ANALYSIS OF TEXTILE
INDUSTRY
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SWOT ANALYSIS OF TEXTILE
INDUSTRY
STRENGHTS:
It is an Independent & Self-Reliant industry.
Demand Driven Industry (more than 2000 units for textiles
alone).
Strong presence in local market as well As in international
markets.
Availability of Low Cost and Skilled Manpower provides
competitive advantage to industry
Availability of large varieties of cotton fiber and has a fast
growing synthetic fiber industry.
Pakistan has great advantage in Spinning Sector and has a presence
in all process of operation and value chain.
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SWOT ANALYSIS OF TEXTILE INDUSTRY
Weaknesses:
Obsolete technology machinery and equipment used for
manufacturing.
Availability of raw material and inconsistent raw material prices
Unskilled labor for modern equipments
Absence of research and development culture
Lack of synergies between Govt. support institutions and practical
market.
Pakistan Textile Industry is highly Fragmented Industry.
Industry is highly dependent on Cotton.
Lower Productivity in various segments.
Lack of Trade Membership, which restrict to tap other potential
market.
Lacking to generate Economies of Scale.
Higher Indirect Taxes and Interest Rates.
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SWOT ANALYSIS OF TEXTILE INDUSTRY
Weakness:
There is Declining in Mill Segment.
Lack of Technological Development that affect the productivity
and other activities in whole value chain.
Infrastructure Bottlenecks and Efficiency such as, Transaction
Time at Ports and transportation Time.
Unfavorable labor Laws.
Lack of standardization and quality control
Non-sophisticated marketing sense. (branding & grading)
Political instability in the country.
Limited access to information (availability of finance,
technological know how & Govt. regulations)
Energy costs
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SWOT ANALYSIS OF TEXTILE INDUSTRY
Opportunities:
Import substitution. Pakistan imports machinery worth
approximately US $ 600 million annually for textiles only.
Large, Potential Domestic and International Market.
Product development and Diversification to cater global
needs.
Elimination of Quota Restriction leads to greater Market
Development.
Market is gradually shifting towards Branded Readymade
Garment.
Free trade agreements like SAFTA and Pakistan’s recent
attempt to get included in ASEAN.
Research and development and reverse engineering
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SWOT ANALYSIS OF TEXTILE INDUSTRY
Threats:
Competition from countries like India & China, which have more advanced
engineering technology base.
Lagging in technology, hence producing substandard goods that hamper
consumer perception about local engineering products.
Non-organized manufacturing and vendor base and unhealthy competition.
Uncertainty in inputs cost
Continuous Quality Improvement is need of the hour as there are different
demand patterns all over the world.
Elimination of Quota system will lead to fluctuations in Export Demand
Threat for Traditional Market for Power loom and Handloom Products and
forcing them for product diversification.
Geographical Disadvantages.
International labor and Environmental Laws.
To make balance between price and quality.
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THE CRESCENT TEXTILE MILLS
LIMITED
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THE CRESCENT TEXTILE MILLS LIMITED
HISTORICAL BACKGROUND:
The CTM was formed in may 01, 1950 and , MR. HAJI MUHAMMAD
SHAFI was appointed as the 1st chief executive who served the company
in this position till he breathed his last in 1978.
The main architect of the Crestex business expansion its Chief Executive,
Mr. Muhammad Anwar, who took over this position after the death of his
father. He has led the company from the front. It was he who not only
managed to win awards for the company on account of highest sales of
yarn and cloth in 1987-88, 1993-94 and 1994-95 but also has the
distinction of recognition as "The Businessman of the Year" from the
Pakistan Federation of Chambers of Commerce and Industry. Crestex has
also been awarded the “President of Pakistan Export Trophy” for three
consecutive years in the mid nineties. 36
THE CRESCENT TEXTILE MILLS LIMITED
Progressive approach and prudent management policies of Mr. Nasir
Shafi, Deputy Chief Executive enabled the company to become the 1st
composite textile company of Pakistan which received ISO 9002
certification on July 07, 1997.
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THE CRESCENT TEXTILE MILLS LIMITED
Current Scenario:
o The Crescent Textile Mills Limited (The Company) is a public limited
company incorporated in Pakistan Under the Companies Ordinance 1984.
The registered office of the Company is located at 40-A, Off: Zafar Ali Road,
Gulberg-V, Lahore.
o Its shares are quoted on all the Stock Exchanges in Pakistan. The Company is
engaged in business of textile manufacturing comprising of spinning,
combing, weaving, dyeing, bleaching, printing, stitching, buying, selling and
otherwise dealing in yarn, cloth and other goods and fabrics made from raw
cotton and synthetic fiber(s).
o The company also operates a cold storage and a power generation house.
o In June 1995, the company also signed a joint venture agreement with
Greenwood Mills Inc., USA and set up a composite denim garment
manufacturing unit at Bahuman, District Hafizabad under the name and style
of Crescent Greenwood Ltd, (now called Crescent Bahuman Limited), the first
& largest of its kind in Asia.
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THE CRESCENT TEXTILE MILLS LIMITED
Current Scenario:
o CTM has 119,728 spindles, 288 MJS (Murata Jet Spinning) drums, 1,568
spindles for Doubling & Twisting.
o The spinning capacity in 20s count based on 3 shifts per day is 42 million
kgs/yr.
o The company has 168 Air jet Looms to convert its own yarn into customer
specific cloth.
o Fabric weaving capacity in 50 picks based on 3 shifts per day is 65 million
sq. meters/yr.
o The company has the capacity to process/finish nearly 4,000,000/month
and 133,000 meters of cloth per day.
o Crestex is capable of converting 17 Million Meters of fabric into made-
ups annually.
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CERTIFICATES
The CTM has been awarded by the following
certificates:
1. ISO 9001
2. ISO 14001
3. OEKO-TEX 100
4. ORGANIC EXCHANGE OE; 100
5. GLOBAL ORGANIC TEXTILE STANDARD; GOTS
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POLICIES
CTM has adopted the following policies:
Provide consistent quality products and services with on time
delivery to achieve and enhance customer satisfaction level.
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SWOT ANALYSIS
Strength
Weakness
Opportunities
Threats
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SWOT ANALYSIS
STRENGHTS:
Vertical integration
Best corporate report award 2007
IT provides requisite leverage to the company to boost
its performance.
Better quality ( ISO 9001,ISO 14001 etc).
Availability of Low Cost and Skilled Manpower
provides competitive advantage to the company.
Strong and intellectual management.
CTM has large and diversified segments that provide
wide variety of products.
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SWOT ANALYSIS
WEAKNESSES:
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SWOT ANALYSIS
OPPORTUNITIES:
Abandoning of textile manufacturing operations in developed countries.
Emerging Retail Industry and Malls provide huge opportunities for the
Apparel, Handicraft ETC.
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SWOT ANALYSIS
Threats:
High cotton prices due an expected crop shortfall for FY2009
Gas load shedding might increase energy cost
Consistent increase in utilities cost
Increase in minimum wage rates
Lack of funds through export refinance finances from bank .
Political instability
Poor fiscal as well as monitory policies.
WTO rules & regulations
International labor and Environmental Laws.
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FINANCIAL ANALYSIS OF C.T.M
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FINANCIAL ANALYSIS OF C.T.M
Ratio Analysis
Common size/ vertical Analysis
Index / Horizontal Analysis
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RATIO ANALYSIS
Profitability Ratio
Activity Ratio
Liquidity Ratio
Interest Coverage Ratio
Leverages Ratio
RATIO ANALYSIS
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Common size/ vertical Analysis
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Index / Horizontal Analysis
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DECISIONS
Lenders
Investors
Manager
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LENDERS
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INVESTORS
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MANAGER
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THANKS YOU ALOT
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