The Islamia University of Bahawalpur

1
 REPORT
ON
ANALYSIS OF FINANCIAL STATEMENTS

COLONY MILLS LTD

2
3
The amount of knowledge in the world had been
doubled every ten years in last century , and in turn of
21st century , it will be doubling every five years. This
report actually includes the complete knowledge of
analysis of financial statements. The company which is
selected by us for that purpose is Colony Textile Mills.

This report actually a part of our MBA program, because

it is actually related to practical knowledge, which will
give us an experience of analysis of financial
statements. We tried our best to prepare that report
with the hope that we shall take our department to a
new height, where it is rated as the best in all spheres
of education sectors and everyone concerned feels
proud of being its integral parts.

MUHAMMAD IRFAN

4
 At first, I am very thankful to Almighty Allah, who make us
sensible and gives us the ability to seek knowledge. After that,
I am thankful to Prof. Dr. Bilal .A. Khan , Vice chancellor of
Islamia University Bahawalpur , who tried his best to promote
the concept of practical knowledge in the department of
management sciences.
After that , I am very thankful to Ma’m Sobia Tehreem ,
because due to her strong efforts , we became able to complete
that analysis of the financial statements of colony textile mills .
Ma’m Sobia Tehreem actually provided us a platform , which
will give us confidence , courage and capability in the current
era of rapid changes.

5
 Table of contents
Page
Sr.
Description numb
No
er
1. Table of Annexure
2. Executive summary
3. Overview of Industry
4. Introduction of Company
5. Summarized Income Statement
5.1 Summarized Balance Sheet
6. Statement of Cash Flow
7. Ratio Analysis
7.1 Classification of Ratios
7.2 Liquidity Ratio
7.3 Leverage Ratios
7.4 Profitability Ratio
7.5 Du-Pont Analysis
8. Bankruptcy model
9. SWOT Analysis
10. Suggestions and Recommendation

6
 Table of annexure
Page
Sr. No Description
number
1. Income Statement
2. Summarized Income Statement
3. Summarized Income Statement(Trend analysis)
4. Summarized Income Statement(Horizontal analysis)
5. Balance Sheet
6. Summarized Balance Sheet
7. Summarized Balance Sheet(Trend analysis)
8. Summarized Balance Sheet(Horizontal analysis)

7
To excel in delivering highest standards
quality yarn to customers in the local and
international markets as per their
customized needs.

8
A growth oriented company to provide
quality yarn to customers and expand sales
through good governance, explore new
markets, quality control by developing a
team for sustainable and equitable growth
with a concept of ”one window solution”

9
10
 EXECUTIVE SUMMARY
Prior to the detail description we are starting the
summary of our report. To review the executive summary the
basic purpose is to give the clear idea about what report
actually contains and efforts made behind the completion of
report.
It was assigned us to analyze the
Financial Statement of the manufacturing Companies. We
choose a well reputed company COLONY MILLS LTD. In this
report we have to point out different factors that are necessary
to make any investment decision. We start work in different
phases that are recasting, trend analysis and ratios. We also
take market views about COLONY MILLS Limited. . By working at
this company we find so many useful insights about
manufacturing sector.
Manufacturing Industry sector has a
good impact economy of Pakistan. This is most growing industry
of Pakistan. This sector contributes a major portion to our
export and also the total Gross Domestic Product (GDP). This
sector gives great employment to our population.
Company is planning to diversify its business so
to have more benefits to its stakeholders.
SWOT analysis is also a part of this report. This
shows company’s strengths, weaknesses, opportunities and
threats.

11
12
 INTRODUCTION OF COLONY MILLS
Colony Mills Limited is a Pakistan-based company. The
Company is principally engaged in the manufacturing and sal
of yarn. It offers a variety of yarn including carded and
combed, slab and core yarn, single and double yarn, made
from 100% cotton and synthetic material, catering to the
needs of knitting and weaving consumers in domestic and
international markets.
The Colony Group is one of Pakistan's oldest and
the most revered business groups. The Group has grown
phenomenally and has become a leading player in all the
sectors in which it operates. The Group has set up different
companies whose activities span various sectors like Textiles,
Sugar and Distillery.

HISTORY OF COLONY MILLS

The Colony Group was founded in 1986 with a focus on
providing high net worth families and individuals with intelligent
wealth management and investment guidance. Since its
founding, the firm has grown substantially, attracting corporate
and institutional clients.

Recognizing the importance and success of its

investment management capabilities, The Colony Group
established Colony Investment Management as a separate
division, through which it has built an experienced, talented

13
team of Chartered Financial Analysts and other investment
professionals dedicated to delivering out performance over full
market cycles. Our proprietary, research-intensive approach is
implemented through a defined, systematic, and repeatable
investment process.

OFFICERS AND DIRECTORS

Fareed M.
Shiekh > Chairman of the Board, Chief Executive

Mehboob
Ahmad > Chief Financial Officer

Waqar Ibn
Zahoor
Company Secretary
Bandey >

Najeeb Ullah
Khan > Head - Internal Audit

M. Akram
Qureshi > Director

Muhammad
Farooq > Director

Syed Arif
Hussain > Director

Muhammad Director

14
Azam Barki >

Malik Sohail Director

Ahmed >

ADDRESS.
Ismail Aiwan-e-Science Bldg 205, Ferozepur Road
Lahore, 54600
Pakistan.

15
 Products of colony mills.
Textile
Sugar.

COLONY TEXTILE MILLS LIMITED.

Established as a textile manufacturing unit on 24th August, 1946, Colony
Mills Limited is engaged in the production and manufacturing of different
types of yarns of various counts. The company has a healthy portfolio of
income generating assets that crossed total revenues of 7.0 billion
rupees in the year ending June 2008.

Product Range
100% cotton carded and combed yarns, lycra/spandex core spun and
slub yarns

100% polyester and 100% viscose yarns along with various blends,
polyester viscose yarn, and yarns of polyester cotton and polyester
viscose blends in the range of 6 to 80 Ne (Number English) Counts.

Future Ventures
A state-of-the-art Open-End Spinning production facility is under
construction. It will be the first of its kind facility in the country, with
2,880 rotors capable of producing 15,000 Metric Tons of yarn
annually, including slub yarns.

16
Colony Sugar Mills Limited
In a continued bid to diversify its portfolio, the Colony Group
recently acquired two sugar plants in Phalia and Mian Chanu:

Colony Sugar Mills Limited (Mian

Channu)
Operations
Conversion of Sugarcane into refined sugar

Crushing Capacity
4,500 Metric Tons per day of Sugarcane

Projected Annual Turnover

Over Rs. 1.00 Billion or US$ 15 Million

Colony Sugar Mills Limited (Phalia)

Operations
Conversion of Sugarcane into refined sugar
Production of Ethanol from the refined sugar waste

Crushing Capacity
7,500 Metric Tons per day of Sugarcane

Distillery Plant Capacity

125,000 liters per day of Ethanol.

17
 SOCIAL RESPONSIBILITY OF COMPANY.
At COLONY, we believe in business with integrity and social
responsibility. One of our main corporate objectives is to pursue
ethical growth in business.
 Effective Waste Management Systems at all the production
plants.
 Awarded Oeko-Tex Standard-100 as recognition for our
continued attention for environmental concerns
Our policies are not restricted to environment only; therefore, we
are engaged in a continuous effort to reduce under age employment
from our production facilities.

INTERNAL STRUCTURE/COMMITIES
OF COLONY MILLS LIMITED
The different comities of colony mills are as follows.

Audit Committee.
This is the most effective and prime committee of the board,it
has the ital role in the compliance of the internal controls so as
to safeguard he interests of company through monitoring of
internal audit functions and risk management policies.

Executive Committee.
This committee is responsible for setting overall corporate
objectives and strategies, Identification of opportunities

18
,monitoring the business strategies and plans and there after
the successful implementations of those plans.

Human resource committee.

This committee determines the compensation package for all
cadres of the company s employee. The committee is also
responsible to create and maintain conductive working
environment that instill trust & ensure respect, fair treatment
and development opportunity.

Technical Committee.
The technical committee acts in an advisory capacity to the
CEO, Provides recommendations relating to technical affairs to
the company, formulation of technical policies required under
the code of corporate governance.

Finance committee.
The role of finance committee is to review and recommend the
financial targets, annual and quarterly budgets, approval of
expenditures for amounts with in its limits, investment of the surplus
funds of the company and financial policies.

Corporate Governance.

19
The management ensured that all requirements of the code of
corporate governance were compiled with the statement of
compliance with best practices of code of corporate governance
is annexed.

Acknowledgment.
Our team of workers, supervisors and managers is greatly
appreciated for their commitment, dedication and consistent
hard work.

20
 COLONY MILLS LTD
INCOME STATEMENT
AS ON 30,june, 200__

Colony mills limited

Summarized Balance Sheet
As On 30,june,200___
2005 2006 2007 2008
Rs.(000) Rs.(000) Rs.(000) Rs.(000)
ASSETS
CURRENT
ASSETS
Cash & Bank Balance 65352792 4419673 4414338 32066725
Short Term Investment 146685782 812209813 433627562 466030145
Trade Debts 192852005 166085822 305086776 331929726
Loans & Advances 126920420
Short Term Deposits 479330738
Other Receivable 12082974 174612533 504451730 793984464
Stores & Spares 29631906 64802911 73473064 120827747
Tax Refunds due from
11560127 42140864 83795404 122130069
Government
Stock in Trade
Raw Material 610612647 869248471 1092423524 1606823241
Working in
71558000 80378369 89887439 87496286
Process
Finish Goods 308959531 284348296 210140198 265973244
Assets held for disposal 318422562 484322562
Real etate property held for
491215801
trading
Total Current Assets 2055546922 2816669314 3281622597 4318477448

FIXED ASSETS
Work in Progress 415822597 281606595 267457672 1284218441
Plant & Machinery at cost 2829766453 2565266237 3946861781 4705633505
Less: Depreciation 471957286 471957286 775926523 926890172
2357809167 2093308951 3170935258 3778743333
Other 471957286 2578278895 2385825526 2463964046
Total Fix Assets 3245589050 4953194441 5824218456 7526925820

Long Term Security Deposit 16716122 2451716 18576122 787243175

Long Term Investment 3133116 18111122 4525998 18576123

Total Assets 5320985210 7790426593 9128943173 12651222566

LIABILITIES & EQUITY

21
 CURRENT LIABILITIES

Trade & Other Payables

Creditor 55732274 203703650 557745562 1965521987
Bills Payable 721273762 155321385 606225694
Advance
7709133 27891258 2211614 19486443
Payments
Other 87102659 85230590 95733842 113093543
Total Trade & other
871817828 472146883 1261916712 2098101973
Payables
Accured Interest & Mark Up 68832214 88489407 96132098 167589397
Short Term Borrowing 799537736 1866403904 1592203909 2264788587
Tax 64786639 48290819 28999380 35907313
Current Portion of Non Current
208404027 291884397 262529592 539916788
Liabilities
Provision against contingent
31417382
liabilities
Total Current Liabilities 2013378444 2798632792 3241781691 5106304058

NON CURRENT LIABILITIES

Loan from related parities 45454920
Liabilities against asset 12099318 44019429 74154515 132569317
Long term financing 1089550531 1974621760 2415894313 4179440783
other 912529335 340051740 248050727 326557758
2059634104 2358692929 2738099555 4638567858
STOCK HOLDER
EQUITY
Issued Capital 250000000 2441763000 2441763000 2441763000
Capital Reserve 157738584 191337872 707298927 464587650
unappreciated profit 338622672

Total Equity 746361256 2633100872 3149061927 2906350650

Surplus on Fix Asset 501611406

Total Liabilities & Equity 5320985210 7790426593 9128943173 12651222566

22
23
 RATIO ANALYSIS
Ratio analysis is a widely used tool of financial analysis. It
is defined as the systematic use of ratio to interpret the
financial statements so that the strengths and weaknesses of a
firm, as well as its historical performance and current financial
condition can be determined.

A complete ratio analysis shows a whole snap of the whole

activities of the company during the year. A ratio becomes
meaning full when compared with other standard and the ratio
of the other years. So for this purpose we have calculated the
ratio of COLONY MILLS and compare it with the previous year
and brief them according to our knowledge.

PURPOSES:
The recommendation of ratio analysis depends
upon the stake holder’s position and relation to the company for
which the analysis is done. The following paragraph briefly
explains the purpose of ratio analysis stage by stage.

MANAGEMENT:
Would like to know the operational efficiency
during the year and would think of such ratios as return on
investment, turnover of fixed assets and net profit to sales etc.

24
CREDITORS:
Would like to know the ability of the company to
meet its current obligations and, therefore, would think of
current and liquid ratios, turnover of receivables, coverage of
interest by the level of earnings, etc

INVESTORS:
Will be interested in such ratios as earnings per
share, book value per share and dividends per share etc.

25
 CLASSIFICATION OF RATIOS
Ratios may be classified in a number of ways keeping in view
the particular purpose. To achieve the above purposes
effectively ratios may be classified as:
1. Liquidity ratios:
 Working Capital
 Current Ratio
 Account Receivable Turnover
 Accounts Receivable Turnover in days
 Inventory Turnover
 Inventory Turnover in day
 Sales to Working Capital
 Operating Cycle
 Acid -Test Ratio
2. Leverage /Solvency Ratios.
 Debt ratio
 Debt Equity Ratio
 Time Interest Earned Ratio
 Fixed Coverage Ratio
3. Profitability ratios.
 Gross Profit Margin
 Operating Profit Margin
 Net Profit Margin

26
 Total Asset Turnover
 Return on Assets
 Operating Asset Turnover
 Return on Operating Assets
 Sales to Fixed Assets
 Return on Total Equity
 Return On investment

27
28
CURRENT
RATIO=CURRENTASSETS/CURRENT LIABILITIES
2005 2006 2007 2008
205554692 281666931 431847744
3281622597
CUURRENT ASSETS 2 4 8
201337844 279863279 510630405
3241781691
CURRENT LIABILITIES 4 2 8
1.02094413 1.0064447 1.01228981 0.8457149
CURRENT RATIO 9 62 8 04
QUICK ACID RATIO=QUICK ASSETS/CURRENT
LIABILITIES
106441674 158269417 235818467
1889171436
QUICK ASSETS 4 8 7
201337844 279863279 510630405
3241781691
CURRENT LIABILITIES 4 2 8
0.52867196 0.5655240 0.58275714 0.4618183
QUICK RATIO 8 6 3 03
WORKING CAPITAL=CURRENT ASSETS-CURRENT
LIABILITIES
205554692 281666931 431847744
3281622597
CUURRENT ASSETS 2 4 8
201337844 279863279 510630405
3241781691
CURRENT LIABILITIES 4 2 8
-78782661
42168478 18036522 39840906
WORKING CAPITAL 0
CASH RATIO=CASH+MRK SECURITIES/CURRENT
LIABILITIES
CASH 65352792 4419673 4414338 32066725
MRK SECURITIES 146685782 812209813 1336742 466030145
201337844 279863279 510630405
3241781691
CURRENT LIABILITIES 4 2 8
0.10531481 0.2917958 0.00177404 0.0975454
CASH RATIO 3 68 9 78
A/R TURNOVER=ANNUAL CREDIT SALES/AVG A/R
334940675 205588069 702072954
578505405
ANNUAL CREDIT SALES 2 4 2
AVG A/R 150073976 239850875 575118430 979371758
22.3183715 8.5714954 1.00588917 7.1686052
A/R TURNOVER 2 93 8 66
AVG COLLECTION PERIOD=360/A/R TURNOVER
22.3183715 8.5714954 7.1686052
1.00588918
A/R TURNOVER 2 9 7
16.1302091 41.999672 357.892307 50.218973
AVG COLLECTION PERIOD 3 1 8 77
INVENTORY TURNOVER=CGS/AVG INVENTORY
297926922 177610450 602650480
5046353813
CGS 0 3 7
111255265 167637196
990382399 1313213149
AVG INVENTORY 7 6
3.00820089 1.5964228 3.84275303 3.5949687
INVENTORY TURNOVER 6 68 4 36
AVG OF INVENTORY=360/INVENTORY TURNOVER
3.00820089 1.5964228
3.84275303 3.5949687
INVENTORY TURNOVER 6 7
119.672858 225.50416 93.6828355 100.13995
AVG OF INVENTORY 4 11 1 39
SALES TO WORKING CAPITAL=SALES/WORKING
CAPITAL
334940675 205588069 702072954
5784505405
SALES 2 4 2
-78782661
42168478 18036522 39840906
WORKING CAPITAL 0

29
 79.4291591 113.98431 -8.9115161
145.190107
SALES TO WORKING CAPITAL 9 99 29
OPERATING CYCLE=A/R Turnover in days + Inventory
Turnover in days
16.1302091 41.999672 357.892307 50.218973
A/R Turnover in days 3 1 8 77
119.672858 225.50416 93.6828355 100.13995
Inventory Turnover in days 4 11 1 39
135.803067 267.50383 451.575143 150.35892
OPERATING CYCLE 5 32 3 77

30
  Current Ratio: Current Ratio =

2005 2006 2007 2008

1.02094413 1.006444 1.01228981 0.845714
9 76 8 9

CURRENT RATIO

1.2

0.8

0.6
TIMES

0.4

0.2

0
2005 2006 2007 2008
YEARS

INTERPRETATION:

The current ratio is the ratio of total current assets and total
current liabilities. The current ratio of a firm measures its short-
term solvency, i.e. its ability to meet short-term obligations. As
a measure of short term/current financial liquidity, it indicates
the rupees of current assets available for each rupee of current
liability / obligation. The higher the current ratio, the large the
amount of rupees available per rupee of current liability, the
more the firm’s ability to meet current obligations and the
greater the safety of funds of short term creditors .And in
Colony Textile mills ltd the current ratio is decreasing from 2005
to 2008.it shows that co has poor short term debt paying ability.

31
  Acid -Test Ratio

Acid -Test Ratio=

2005 2006 2007 2008

0.52867196 0.565524 0.58275714 0.461818
8 06 3 3

QUICK ACID RATIO

0.7
0.6
0.5
0.4
TIMES

0.3
0.2
0.1
0
2005 2006 2007 2008
YEARS

INTERPRETATION:
The term quick assets refers to current assets which can be
converted into cash immediately or at a short notice without
dimension of value. Thus, the quick assets = current assets
-inventory. This ratio is used to check that how much inventory
is unsold and includes in current assets. Because current assets
may include inventory in large amount which would increase
the current assets. This ratio shows a minor increase from 2005
to 2006 and 2007, but in 2008 it decreases.

32
 Working capital:

Working Capital =Current Assets –Current Liabilities

2005 2006 2007 2008

1803652 7878266
42168478 2 39840906 10

working capital

200000000

-200000000 2005 2006 2007 2008

-400000000
Rs

-600000000

-800000000

-1000000000
years

INTERPRETATION:
Working capital indicates the short run solvency position of the
business. As shown above the net working capital decreases
from 2005 to 2006 but improves in 2007, but goes – tive in
2008 which gives a warning to company.

33
 CASH RATIO :

CASH RATIO= CASH+MRK SECURITIES/CURRENT LIABILITIES

2005 2006 2007 2008

0.10531481 0.291795 0.00177404 0.097545
3 87 9 48
CASH RATIO

0.35

0.3

0.25

0.2
TIMES

0.15

0.1

0.05

0
2005 2006 2007 2008
YEARS

INTERPRETATION:
Cash ratio indicates that how much mot liquid assets a
company have to fulfill its current liabilities. Increasing trend is
favorable and vive versa. In Colony textile this ratio increases
from year 2005 to 2006 but it’s a minor increase and in 2007 it
shows a minor decrease and it increases in 2008.

34
 Accounts Receivable Turnover:

Account Receivable Turnover =

2005 2006 2007 2008

22.3183715 8.571495 1.00588917 7.168605
2 49 8 27

A/R TURNOVER

25

20

15
#REF!
TIMES

10

0
2005 2006 2007 2008
YEARS

INTERPRETATION:
This ratio shows the proportion of sales to receivable. It means
that how many times in a year our receivables are collected. It
shows the credit management and collection management
ability that how much they are efficient to collect the
receivables. There is a decrease in A/R Turnover from year 2005
to 2007 but in 2008 it improves and increases.

35
 Accounts Receivable Turnover in days:
Accounts Receivable Turnover in days =

2005 2006 2007 2008

16.1302091 41.99967 357.892307 50.21897
3 21 8 38

AVG COLLECTION PERIOD

400
350
300
250
DAYS

200 #REF!
150
100
50
0
2005 2006 2007 2008
YEARS

INTERPRETATION:
This ratio indicates that how many days’ receivables are
collected. It shows credit collection management ability that
how much they capable to get receivables. In Colony Textile in
increases from 2005 to 2007 but it decreases in 2008.

36
 Inventory Turnover:

Inventory Turnover =

2005 2006 2007 2008

3.00820089 1.596422 3.84275303 3.594968
6 87 4 74

INVENTORY TURNOVER

3
TIMES

0
2005 2006 2007 2008
YEARS

INTERPRETATION:
This ratio reveals the number of times finished stock is turned
over during a given accounting period. In other words this ratio

37
indicates that how many times in a year inventory can be
converted into sales. High inventory turnover ratio is better
than a low ratio. A high ratio implies good inventory
management. In Colony textile inv turnover decreases from
year 2005 to 2006 but in 2007 it improves and in 2008 there is
a minor decrease in inv turnover.

38
 Inventory Turnover in days:

 Inventory Turnover in days =

2005 2006 2007 2008

119.672858 225.5041 93.6828355 100.1399
4 61 1 54

AVG OF INVENTORY

250

200

150
DAYS

100

50

0
2005 2006 2007 2008
YEARS

INTERPRETATION:
This ratio shows us that for how many days the inventory
remains with the company after its conversion from raw
material and work in process to finished goods. The lower the
ratio better it is. This is calculated by dividing the 365 by

39
inventory turnover. The standard of day inventory in stock is
that lower the days the higher the performance. In Colony
textile the inventory turnover in days first increases from 2005
to 2006 but it decreases in 2007, and in 2008 it again shows an
increase.

40
 Sales to working Capital :
:
sales
Sales to working Capital = WorkingCapital

2005 2006 2007 2008

79.4291591 113.9843 8.911516
9 2 145.190107 1

sales to working capital

200

100
times

-100 2005 2006 2007 2008

years

INTEPRETATION:
Sales to working give an indication of the turnover in working
capital per year. A low working capital turnover ratio indicates
an unprofitable use of working capital. In other words sales are
not adequate in relation to the available working capital. In
Colony textile this ratio shows a rapid increasing trend from
year 2005 to 2007 but shows a sharp decrease in 2008 even it
goes to –tive.

41
 Operating Cycle:

Operating Cycle = A/R Turnover in days + Inventory

Turnover in days

2005 2006 2007 2008

135.803067 267.5038 451.575143 150.3589
5 33 3 28

operating cycle

600
400
times

200
0
2005 2006 2007 2008
years

INTEPETATION:
The operating cycle represents the period of time elapsing
between the acquisition of goods and the final sash realization
resulting from sales and sub sequent collections. The operating
cycle should be helpful when comparing a firm from period to
period. In the company this ratio first shows increase from 2005
to 2007 but it decreases in 2008.

42
 Current Ratio:

Current Ratio =

2005 2006 2007 2008

1.02094413 1.006444 1.01228981 0.845714
9 76 8 9

CURRENT RATIO

1.2

0.8
TIMES

0.6

0.4

0.2

0
2005 2006 2007 2008
YEARS

INTERPRETATION:
The current ratio is the ratio of total current assets and total
current liabilities. The current ratio of a firm measures its short-
term solvency, i.e. its ability to meet short-term obligations. As
a measure of short term/current financial liquidity, it indicates
the rupees of current assets available for each rupee of current
liability / obligation. The higher the current ratio, the large the
amount of rupees available per rupee of current liability, the
more the firm’s ability to meet current obligations and the
greater the safety of funds of short term creditors .And in
Colony Textile mills ltd the current ratio is decreasing from 2005
to 2008.it shows that co has poor short term debt paying ability.

43
  Acid -Test Ratio

Acid -Test Ratio=

2005 2006 2007 2008

0.52867196 0.565524 0.58275714 0.461818
8 06 3 3

QUICK ACID RATIO

0.7
0.6
0.5
0.4
TIMES

0.3
0.2
0.1
0
2005 2006 2007 2008
YEARS

INTEPETATION:
The term quick assets refers to current assets which can be
converted into cash immediately or at a short notice without
dimension of value. Thus, the quick assets = current assets
-inventory. This ratio is used to check that how much inventory
is unsold and includes in current assets. Because current assets
may include inventory in large amount which would increase
the current assets. This ratio shows a minor increase from 2005
to 2006 and 2007, but in 2008 it decreases.

44
 Working capital:

Working Capital =Current Assets –Current Liabilities

2005 2006 2007 2008

1803652 7878266
42168478 2 39840906 10

working capital

200000000

0
2005 2006 2007 2008
-200000000

-400000000
Rs

-600000000

-800000000

-1000000000
years

INTERPRETATION:
Working capital indicates the short run solvency position of the
business. As shown above the net working capital decreases
from 2005 to 2006 but improves in 2007, but goes – tive in
2008 which gives a warning to company.

45
 CASH RATIO :

CASH RATIO= CASH+MRK SECURITIES/CURRENT LIABILITIES

2005 2006 2007 2008

0.10531481 0.291795 0.00177404 0.097545
3 87 9 48

CASH RATIO

0.35

0.3

0.25

0.2
TIMES

0.15

0.1

0.05

0
2005 2006 2007 2008
YEARS

INTERPRETATION:
Cash ratio indicates that how much mot liquid assets a
company have to fulfill its current liabilities. Increasing trend is
favorable and vive versa. In Colony textile this ratio increases
from year 2005 to 2006 but it’s a minor increase and in 2007 it
shows a minor decrease and it increases in 2008.

46
 Accounts Receivable Turnover:

Account Receivable Turnover =

2005 2006 2007 2008

22.3183715 8.571495 1.00588917 7.168605
2 49 8 27

A/R TURNOVER

25

20

15
#REF!
TIMES

10

0
2005 2006 2007 2008
YEARS

INTERPRETATION:

47
This ratio shows the proportion of sales to receivable. It means
that how many times in a year our receivables are collected. It
shows the credit management and collection management
ability that how much they are efficient to collect the
receivables. There is a decrease in A/R Turnover from year 2005
to 2007 but in 2008 it improves and increases.

48
 Accounts Receivable Turnover in days:
Accounts Receivable Turnover in days =

2005 2006 2007 2008

16.1302091 41.99967 357.892307 50.21897
3 21 8 38

AVG COLLECTION PERIOD

400
350
300
250
DAYS

200 #REF!
150
100
50
0
2005 2006 2007 2008
YEARS

INTERPRETATION:
This ratio indicates that how many days’ receivables are
collected. It shows credit collection management ability that
how much they capable to get receivables. In Colony Textile in
increases from 2005 to 2007 but it decreases in 2008.

49
 Inventory Turnover:
Inventory Turnover =

2005 2006 2007 2008

3.00820089 1.596422 3.84275303 3.594968
6 87 4 74

INVENTORY TURNOVER

3
TIMES

0
2005 2006 2007 2008
YEARS

INTERPRETATION:
This ratio reveals the number of times finished stock is turned
over during a given accounting period. In other words this ratio

50
indicates that how many times in a year inventory can be
converted into sales. High inventory turnover ratio is better
than a low ratio. A high ratio implies good inventory
management. In Colony textile inv turnover decreases from
year 2005 to 2006 but in 2007 it improves and in 2008 there is
a minor decrease in inv turnover.

51
 Inventory Turnover in days:

Inventory Turnover in days =

2005 2006 2007 2008

119.672858 225.5041 93.6828355 100.1399
4 61 1 54

AVG OF INVENTORY

250

200

150
DAYS

100

50

0
2005 2006 2007 2008
YEARS

INTERPRETATION:
This ratio shows us that for how many days the inventory
remains with the company after its conversion from raw
material and work in process to finished goods. The lower the
ratio better it is. This is calculated by dividing the 365 by

52
inventory turnover. The standard of day inventory in stock is
that lower the days the higher the performance. In Colony
textile the inventory turnover in days first increases from 2005
to 2006 but it decreases in 2007, and in 2008 it again shows an
increase.

53
 Sales to working Capital :
sales
Sales to working Capital = WorkingCapital

2005 2006 2007 2008

79.4291591 113.9843 8.911516
9 2 145.190107 1

SALES TO WORKING CAPITAL

200
150
TIMES

100
50
0
-50 2005 2006 2007 2008
YEARS

INTEPRPETATION:
Sales to working give an indication of the turnover in working
capital per year. A low working capital turnover ratio indicates
an unprofitable use of working capital. In other words sales are
not adequate in relation to the available working capital. In
Colony textile this ratio shows a rapid increasing trend from
year 2005 to 2007 but shows a sharp decrease in 2008 even it
goes to –tive.

54
 Operating Cycle:
Operating Cycle = A/R Turnover in days + Inventory

Turnover in days

2005 2006 2007 2008

135.803067 267.5038 451.575143 150.3589
5 33 3 28

operating cycle

500
400
300
times

200
100
0
2005 2006 2007 2008
years

INTEPETATION:

55
The operating cycle represents the period of time elapsing
between the acquisition of goods and the final sash realization
resulting from sales and sub sequent collections. The operating
cycle should be helpful when comparing a firm from period to
period. In the company this ratio first shows increase from 2005
to 2007 but it decreases in 2008.

56
57
Debt ratio=Total liabilities/Total 2 2 2 2
assets 005 006 007 008
515732572 597988124 974487191
Total liabilities 4073012548 1 6 6
779042659 912894317 126512225
Total assets 5320958210 3 3 66
0.662008 0.655046 0.7702711
Debt ratio 0.765465991 127 387 63

Debt to equity ratio=Total liabilities/Shareholder's

equity
515732572 597988124 974487191
Total liabilities 4073012548 1 6 6
263310087 314906192 290635065
Shareholder's equity 746361256 2 7 0
1.958651 1.898940 3.3529580
Debt to Equity ratio 5.457159673 025 505 87

Debt to tangible net worth ratio=T.liabilities/O.E-

Intangible assets
515732572 597988124 974487191
Total liabilities 4073012548 1 6 6
263310087 314906192 290635065
Shareholder's equity 746361256 2 7 0
Intangible assets 0 0 0 0
1.958651 1.898940 3.3529580
Debt to tangible net worth ratio 5.457159673 025 505 87

current debt to net worth

ratio=current liabilities/O.E
279863279 324178169 510630405
Current liabilities 2013378444 2 1 8
263310087 314906192 290635065
Shareholder's equity 746361256 2 7 0
1.062865 1.029443 1.7569470
Current debt to net worth ratio 2.697592389 772 614 01

Total capitilization ratio=LTD/LTD+equity

235869292 273809955 463856785
LTD 2059634104 9 5 8
263310087 314906192 290635065
Equity 746361256 2 7 0
0.472514 0.465096 0.6147936
Total capitalization ratio 0.734011942 095 73 33
Fixed asset to equity ratio=Fixed asset/Shareholder's equity
495319444 582421845 752692582
Fixed assets 3245589050 1 6 0
263310087 314906192 290635065
Shareholder's equity 746361256 2 7 0
1.881125 1.849509 2.5898202
Fixed asset to equity ratio 4.348549746 973 026 68

Time interest earned ratio=EBIT/Interest

EBIT 2646676555 212720950 530687771 674774732
Interest 129235123 178660925 371807572 491568948
1.190640 1.427318 1.3726960
Time interest earned ratio 20.47954529 595 352 07

FIXED CHARGE COVERAGE RATIO

EBIT 2646676555 212720950 530687771 674774732
Lease Pmt 23443822 18219485 34889562 36416568
Tax rate 40% 40% 40% 40%

58
Principle 0 0 0 0
intrest 129235123 178660925 371807572 491568948
Preferred dividened 0 0 0 0
0.703799 0.834395 0.8081941
Fixed charge coverage ratio 10.49307897 129 848 02
T.ASSET TURNOVER RATIO=NET
SALES/T.ASSETS
205588069 578450540 702072954
net sales 3349406752 4 5 2
779042659 912894317 126512225
total assets 5320985210 3 3 66
0.2638983 0.6336445
TOTAL ASSET TURNOVER RATIO 0.629471164 46 85 0.55494475

59
 Debt Ratio:

Debt Ratio =

2005 2006 2007 2008

0.6620081 0.6550463 0.770271
0.765465991 27 87 16

debt ratio

0.8
0.75
times

0.7
0.65
0.6
0.55
2005 2006 2007 2008
years

INTERPRETATION:
Debit ratio is calculated to check the total asset financed by the

firm creditors. This ratio shows relation between total assets

and total liabilities. In Colony textile this ratio shows a minor

decrease from 2005 to 2006, and in 2007 it also decreases, but

in 2008 it improves or increases.

60
  Debt To Equity Ratio:

long term liabilties

Debt Equity Ratio =
Equity
2005 2006 2007 2008
1.9586510 1.8989405 3.352958
5.457159673 25 05 09

debt to equity ratio

6
4
times

2
0
2005 2006 2007 2008
years

INTERPRETATION:
The debt equity ratio indicates the relationship between the
long-term funds provided by creditors and those provided by
the firm’s owners. The standard debt equity ratio is 60:40. The
lower the debt equity ratio that is preferable. This ratio
decreases from year 2005 to 2007 but it improves/increases in
2008.

61
 Debt to tangible net worth ratio
Debt to tangible net worth ratio=Total liabilities/Shareholder's equity-
Intangible assets

2005 2006 2007 2008

1.9586510 1.8989405 3.352958
5.457159673 25 05 09

debt to tangible net worth

6
4
times

2
0
2005 2006 2007 2008
years

INTERPRETATION:
This ratio tells that how much the equity portion contributes to
total liabilities. In Colony textile it decreases from 2005 to 2007,
but further it does not decrease but shows an increase in 2008.

62
 current debt to net worth ratio

Current debt to net worth ratio=current liabilities/shareholder's equity

2005 2006 2007 2008

1.0628657 1.0294436
2.697592389 72 14 1.756947

current debt to net worth ratio

3
2
times

1
0
2005 2006 2007 2008
years

INTERPRETATION:
This ratio shows that how much contribution of shareholder’s
equity is in the current portion of liabilities. In this company it
shows a gradual decrease from year 2005 to 2007 but it
improves in minor in 2008.

63
 Total capitalization ratio

Total capitalization ratio=LTD/LTD+equity

2005 2006 2007 2008

0.4725140 0.465096 0.614793
0.734011942 95 73 63

total capitalization ratio

0.8
0.6
times

0.4
0.2
0
2005 2006 2007 2008
years

INTERPRETATION:
LTD represents a company’s huge investment so through this
ratio we check that whether company’s capital is capable of
paying the interest on long term debts. In Colony textile shows
a decrease from 2005 to 2006 and in 2007 it minor decreases
and in 2008 it improves/increases.

64
 Fixed asset to equity ratio
Fixed asset to equity ratio=Fixed asset/Shareholder's equity

2005 2006 2007 2008

1.8811259 1.8495090 2.589820
4.348549746 73 26 27

fixed asset to equity ratio

6
4
times

2
0
2005 2006 2007 2008
years

INTERPRETATION:
It shows that in fixed assets how much contributed or owned by
the shareholders equity and remaining by creditors. And in
Colony textile this ratio decreases from year 2005 to 2007, but
a minor increase also comes in 2008.

65
  Time Interest Earned Ratio:

Time interest Earned Ratio =

2005 2006 2007 2008

1.1906405 1.4273183 1.372696
20.47954529 95 52 01

time interest earned ratio

30
20
times

10
0
2005 2006 2007 2008
years

INTERPRETATION:
This ratio measures the firm’s ability to make contractual
payments this ratio is also calculated to know about long- term
solvency position of the business. This ratio indicates the
company’s ability to pay interest this company this ratio shows
a rapid decrease from 2005 to 2006 and a minor increase in
2007, and in 2008 it also decreases.

66
 FIXED CHARGE COVERAGE RATIO
FIXED CHARGE COVERAGE RATIO=EBIT+Lease Pmt/Interest+Lease Pmt+
(Principle+Preferrd dividend)*(1/1-T)

2005 2006 2007 2008

0.7037991 0.8343958 0.808194
10.49307897 29 48 1

fixed charge coverage ratio

15
10
times

5
0
2005 2006 2007 2008
years

INTERPRETATION:
This ratio shows a major decrease in 2006 but it improves in
2007, and in 2008 it again decreases.

67
  Total Assets Turnover ratio:

NetSales
Total Assets Turnover Ratio =
TotalAssets

2005 2006 2007 2008

0.2638983 0.6336445 0.554944
0.629471164 46 85 75

total asset turnover ratio

0.8
0.6
times

0.4
0.2
0
2005 2006 2007 2008
years

INTERPRETATION:
This ratio is based on the relationship between the sales and
assets of a firm indicate that how much is contributed by assets
towards our sales. The higher the turnover ratio, the more
efficient the management and utilization of the assets while low
turnover ratios are indicate of under utilization of available
resources and presence of idle capacity. If turn over increases it
means that assets are properly used to generate sales and
company’s position is very good. In Colony textile ratio
decreases from year 2005 to 2006 but improves in 2007 and
also shows decreases in 2008.

68
69
 2005 2006 2007 2008
Financial leverage= EBIT/EBT
EBIT 310183157 291991853 830067779 854941799
EBT 180948234 119330928 458269207 363372851
Financial 1.71420936 2.44690842 1.81131039 2.3527949
leverage 3 4 6 2
EPS=net income-Preferred dividened/No.of C/S Outstanding

Net
106792352 104917000 513886773 281497826
income
Preferred
0 0 0 0
dividened
weighted C/S
10410959 135653589 244176300 245000000
average outstanding
10.2576863 0.77341853 2.10457269 1.1489707
EPS 5 4 2 2

Note There is no dilutive effect on the basic EPS of a company.

Price earning Market price per

ratio= share/EPS

Market price per

12 13 12 14
share
EPS 10.25786 0.7734185 2.1045727 1.1489707
1.16983464 16.8084937 5.70187002
12.184819
P/E ratio 4 2 8
% of earning retained=Net income-all divideneds/net
income

Net income 106792352 104917000 513886773 281497826

All divideneds 106792352 104917000 513886773 281497826
% earning
0 0 0 0
retained
Dividened payout ratio= Dividened per
share/EPS

Dividened per
10.26 0.77 2.1045727 1.1489707
share
Earning per
10.26 0.77 2.1045727 1.1489707
share
Dividened payout
1 1 1 1
ratio
Dividened Yield=Dividened per share/ Market price of share

Dividened per
10.26 0.77 2.1045727 1.1489707
share
Market price of
12 13 12 14
share
0.05923076 0.17538105 0.0820693
0.855
Dividened yield 9 8 4
Book value=Total
shareholder's equity-
Preferred equity
Total NO.of common stock
outstanding

Total shareholder's 263310087 314906192 290635065

746361256
equity 2 7 0
Preferred
0 0 0 0
equity
common stock
10410959 135653589 244176300 245000000
outstanding
71.6899620 19.4104770 12.8966731 11.862655
9 2 3 7

70
71
72
 FINANCIAL LEVERAGE

Financial leverage= EBIT/EBT:

2005 2006 2007 2008
1.714209 2.446908 1.81131 2.352795

financial leverage

2
Times

0
1 2 3 4
Years

INERPETATION:
This ratio tells that how much change comes in EBIT due to
change in net income, as the interest increases or decreases he
financial leverage increases and decreases with the same
aspect. from year 2005 to 2006 this ratio increases but in 2007
it shows a decrease and it 2008 again improves.

73
 EARNING PER SHARE

EPS=net income-Preferred dividend / No. of

common stock Outstanding

2005 2006 2007 2008

10.257 0.773 2.104
6 4 5 1.148

EPS

15

10
Rs.

0
2005 2006 2007 2008
Years

INERPETATION:
IT tells that what a single share earns, it is a mandatory
/compulsory part of I/S. this ratio is in a good position in 2005
but it goes to much down in 2006 and in 2007 it improves but
again shows a decreasing trend in 2008.

74
  PRICE EARNING RATIO:

Price earning ratio= Market price per share/EPS:

2005 2006 2007 2008

1.169 16.808 5.701 12.184
8 4 8 8

Price earning ratio

20
15
Rs.

10
5
0
2005 2006 2007 2008
Years

INERPETATION:
THIS ratio basically tells about the increase or decrease in the
market prices for good sign the market prices should increases
from EPS this ratio first shows an increasing trend from year
2005 to 2006 but in 2007 it goes down and in 2008 it increases.

75
76
  Profitability ratios

Gross Profit Ratio = *100

Years 2005 2006 2007 2008

.Gross 11.05083 13.60858 12.7608419 14.1612738
profit 8 1 4 3
margin

gross profit margin

15
10
%

5
0
Years 2005 2006 2007 2008
Years

INTERPRETATION:
The gross profit ratio indicates the proportion of gross profit to
sales. Gross profit is calculated by deducting the cost of good
sold from sales. Higher the ratio, the better it is, and the lower
the relative cost of merchandise sold and better would be the
company’s position. A low ratio indicates unfavorable trends in
the form of reduction in selling prices or increase in cost of
production this ratio increases from year 2005 to 2006 but a
minor decrease appeared in 2007 and in 2008 it also increases.

77
  Operating Profit Ratio

Operating Profit Ratio = *100

Years 2005 2006 2007 2008

Operating
7.90192635 10.3469501 9.17429812 9.61117684
Income
9 2 7 4
margin.

operating profit margin

15
10
%

5
0
Years 2005 2006 2007 2008
Years

INTERPRETATION:
This ratio measures the percentage of profit earned on sale
after deducting operating expenses from the Gross Profit. This
ratio indicates that how efficiently the expenses are being
controlled by management. The higher the margin the lower
would be the operating expenses and better would be
management ability to control expenses this ratio increases from
year 2005 to 2006 and in 2007 it decreases but recovered or increased in
2008.

78
  Net profit Ratio = *100

Years 2005 2006 2007 2008

Net profit 3.18839603 5.10326305 6.96081736 4.00952385
margin 3 9 4 8

Net profit margin

8
6
4
%

2
0
Years 2005 2006 2007 2008
Years

Interpretation:
The net profit margin shows the net % age of sales after
payment of interest and taxes from operating profit this ratio
increases from year 2005 to year 2006 and also increases in
2007 but in 2008 it decreases.

79
 Net ⋅ Sales
Total Asset Turnover = Total ⋅ Assets

Years 2005 2006 2007 2008

Total Assets
62.9471163 26.3898346 63.3644584 55.4944750
turnover
7 2 6 1
Ratio

Total asset turnover ratio

80
60
40
%

20
0
Years 2005 2006 2007 2008
Years

INTERPRETATION:
Total asset turnover measures the activity of the assets and the
ability of the firm to generate sales through the use of sales
there is a decreasing trend from year 2005 to 2006 but in 2007
it increases and in 2008 it again shows a decreasing position.

80
Return on Assets = *100

Years 2005 2006 2007 2008

2.00700336 1.34674268 4.41071472 2.22506421
ROA
1 2 8 5

ROI

3
%

0
Years 2005 2006 2007 2008
Years

INTERPRETATION:
The purpose of this ratio is to calculate the return that the
business is providing on total assets. This is important from
owner’s point of view that what the business is earning on its
assets, how their funds are being utilized. This ratio also
provides an indicator of overall effectiveness of management in
generating profit with the available assets .If utilization of
assets is productive the return would be high and position
would be good this ratio from 2005 to 2006 decreases but in
2007 it improves and in 2008 it again shows a decrease.

81
 Net ⋅ Sales
 Operating Assets Turnover =
Average ⋅ Operating ⋅ Assets

Years 2005 2006 2007 2008

Operating
103.198732 67.489324 126.19572 11.885292
Assets
2 8 7 3
Turnover

Operating assets turnover

150
100
%

50
0
2005 2006 2007 2008
Years

INTERPRETATION:
This ratio measures the ability of operating assets to generate
sales .If this ratio is high then it is in favor of company. It shows
the effective use of assets. It goes down in 2006 but increment
comes in 2007 but in 2008 it again goes down.

82
 Operating Income
Return on Operating Assets = Average Operating Assets

Years 2005 2006 2007 2008

Return on
8.15468782 6.98308677 11.5775722 11.4232387
operating
2 6 2 2
assets

Return on operating assets

15
10
%

5
0
2005 2006 2007 2008
Years

INTERPRETATION:
This ratio gives the operating efficiency of management. This
ratio indicated how Operating assets are utilized. In other words
how much assets are used in operating activities. High Return
on Operating Asset ratio shows the efficient use of operating
assets. This ratio shows a minor decrease in 2006 but improves
in 2007 and in 2008 it again shows a minor decrease.

83
 Net ⋅ Sales
 Sales to Fixed Assets=
Average ⋅ Net ⋅ Fixed ⋅ Assets

Years 2005 2006 2007 2008

Sales to fixed
103.20 67.49 126.20 118.85
assets ratio

Sales ti fixed asset ratio

150
100
%

50
0
2005 2006 2007 2008
Years

INTERPRETATION:
This ratio measures the firm’s ability to make productive use of
its fixed assets to generate sales. High ratio is favorable for the
Company than that of low ratio this ratio goes down from year
2005 to 2006 but increase comes in 2007 and in 2008 it also
shows a minor decrease.

84
  Return on Investment = Net income /
LTD+Equity

Years 2005 2006 2007 2008

Return on 3.80586 0.442840 6.83948
3.730959
Investment 3 2 7

ROI

8
6
4
%

2
0
Years 2005 2006 2007 2008
YEARS

INTERPRETATION
The net profit margin ignores the utilization of assets and the
total asset turnover ratio ignores profitability on sales. The
return on investment ratio or earning power resolve these short
come. Return investment measures the overall effectiveness In
generating profits with available assets. It shows a decrease
from year 2005 to 2006 but in 2007 it shows a good position
and improves but in 2008 it again goes down.

85
86
 Du-Pont Analysis
RETUN ON EQUITY = (Net Profit Margin ×Total Asset Turnover) × (Financial
Leverage Multiplier)

We need following ratios to calculate the Return on Equity.

Net Pr ofitAfterTax
Net Profit Ratio =
NetSales

Years 2005 2006 2007 2008

Net profit 3.18839603 5.10326305 6.96081736 4.00952385
margin 3 9 4 8

Net ⋅ Sales
Total Asset Turnover = Total ⋅ Assets

Years 2005 2006 2007 2008

Total Assets
62.9471163 26.3898346 63.3644584 55.4944750
turnover
7 2 6 1
Ratio

87
 Total Assets
Financial leverage Multiplier =
Equity

Years 2005 2006 2007 2008

Financial
7.12923556 2.95865102 2.89894050 4.35295808
leverage
4 5 5 5
Multiplier

RETURN ON EQUITY= (Net Profit Margin ×Total Asset Turnover) × (Financial

Leverage Multiplier)

Years 2005 2006 2007 2008

1430.8 398.454 1278.63 968.5611
4 2 1

ROE

2000
1500
1000
%

500
0
2005 2006 2007 2008
Years

88
 DU PONT ANALYSIS:
One of the easiest way to calculate whether a company is in asset re-creator
or cash consumer is to look at the Return On Equity (ROE). The Du Pont
Analysis is a way that breaks down ROE into three parts.

• Profit Margin
• Asset Turnover
• Equity Multiplier

DUPONT MODEL:

Sales
-CGS Earning for
-Operating expenses common Net profit
-Interest expenses share holder/ margin
-Taxes sales (ROA)
Preferred Dividend Return on
Asset
(ROE)
Return
on
Current Asset Total Assets/
Total asset Equity
Fixed asset Sales turnover *

Total Total
Current liability liability asset/ Financial
Long term + Common leverage
Liability shareholder stock multiplier
Equity equity

89
But the main analysis in it we focused on ROE and interpretation is
also based on this. The value of return on equity is given below:

RETURN ON EQUITY:

years 2004 2005 2006 2007 2008

values 34 27 9 0.3 0.7

Return on total equity

40 34
30 27

20
9
10
0.3 0.7
0
2004 2005 2006 2007 2008
years

Interpretation:
Dupont analysis is used to evaluate the firm effectiveness. The ROE
is decreased since 2004 to 2008 but there is a great decrease in
2006 the main reason of this decreasing trend is that in 2005 the
company face the bank kruptacy and its efficiency tremendously
decreased. In this analysis we see that firm’s working is not effective
and they never use its asset effectively and their liabilities increased
more as compared to assets.

90
91
 Cash Flow / Total Debt

Years 2005 2006 2007 2008

0.0 0.0018
Cash Flow / Total Debt 3 7 0.00161 0.00691

Net Income / Total Debt

Years 2005 2006 2007 2008

Net Income / Total Debt 0.05 0.044 0.147 0.060

Total Debt / Total Assets

Years 2005 2006 2007 2008

Total Debt / Total Assets 0.387 0.3027 0.299 0.366

92
 Multivariate Model

Z= X1+X2+X3+X4+X5
Where
X1= Working Capital / Total Assets

Years 2005 2006 2007 2008

Working Capital / Total
Assets 0.72 0.231 0.436 -6.22

X2= Retained Earning / Total Assets

Years 2005 2006 2007 2008

Retained Earning / Total
Assets 0.2964 0.3779 0.3494 0.2297

X3= EBIT /Total Assets

Years 2005 2006 2007 2008

EBIT /Total Assets 0.0497 0.0273 0.0581 0.053

X4= Market value of equity / book value of Total Debt

Years 2005 2006 2007 2008

Market value of equity / X5=Sales
book value of Total Debt 0.362 1.11 1.15 0.626 / Total
Assets
Years 2005 2006 2007 2008
Sales / Total Assets 0.629 0.263 0.633 0.55

93
 Z – Score
2005 2006 2007 2008

X₁×.012 0.00864 0.002772 0.005232 -0.07464

X₂×.014 0.00415 0.005291 0.004892 0.003216

X₃×.033 0.00164 0.000901 0.001917 0.001749

X₄×.006 0.002172 0.00666 0.0069 0.003756

X₅×.01 0.00629 0.00263 0.00633 0.0055

Z 0.018742 0.018254 0.025271 -0.06042

The formula for Z score is

Z= 0.012*x1+0.014*x2+0.033*x3+0.006*x4+0.010*x5
Z=0.018742
Standard:
If the ‘Z’ is 2.675 that company is at cut off point. If it is greater
than 2.675 than the position of the company is strong and if it is
less than 2.675 that the position of the company is weak.

94
95
 SWOT ANALYSIS:
Each organization existing in the market analyzed though external
and internal environment has some Strengths, Weaknesses,
Opportunities and Threats called SWOT analysis. SWOT analysis
gives the overall competitive position of industry. The basic purpose
of this analysis is to identify the current strategies of the
organization and its potentials of competing in the competitive
market and capability of dealing with those changes, which are
taking place in the business environment sharply.

It gives the scenario regarding weaknesses and threats to the

company and offers the company that these should be eliminated or
reduced at least as compared to other competitors.

96
 STRENGTHS:
 Colony mills have a very stable yarn market with good brand

image in the eyes of customers.

 colony has a strong dealer ship network and a large sales force to
cater to its needs
 Certified by ISO.
 WIDE production range.
 Top player of TEXTILE business with max. Production capacity.
 Having a strong good will.
 Significant contribution towards the economic development of
the country.
 Excellent environmental & working conditions.
 Safety measures of international standards are exercised.
 Sales growth is very high.
 Export sales especially show a tremendous boost as it increased

from RS 744 MILLION last year to 2.40 BILLION.

 Company maintained its position against its competitors very
successfully.
 Company has strong resources to get the raw material.

97
 WEAKNESSES:

 H u g e v o l u m e o f p ro d u c t i o n w h i c h m a y b e d i f f i c u l t t o
h a n d l e i n f u t u re .
 M o n e t a r y s e n s i t i v e n e s s t o f o re i g n exc h a n g e m a r ke t .
 I t h a s b e c o m e m o re c h a l l e n g i n g f o r t h e c o m p a n y t o
m a i n t a i n c o m p e t i t i v e e d g e d u e t o W T O re g i m e .
 L i m i t a t i o n s i n m e e t i n g u p t h e d e m a n d o f t ex t i l e .
To o m u c h c e n t r a l i z a t i o n b u re a u c r a t i c c o n t ro l e f f e c t s
timely decision making.
 N o t s t ro n g m a r ke t i n g o r a d v e r t i s e m e n t .
 C o m p a n y c a n n o t c o n v er t a c c o u n t re c e i v a b l e s i n t o c a s h
q u i c k l y. M o s t l y s a l e s a re o n c re d i t b a s i s .
 L a c k o f l o n g t erm p l a n n i n g .

 Colony mills has no proper framework and policy for the

recruitment of employees which result inefficiency. All the
Directors and audit committee of the Company are close relative
of the Chief Executive

 Le n g t h y p ro c e d u re s i n d o c u m e n t a t i o n s .

98
 OPPORTUNITIES:

 A gas plant is establishing to overcome the shortage of electricity.

 Yarn and sugar is exported.
 I m p ro v e m e n t i n t h e q u a l i t y o f t ex t i l e a n d s u g a r.
 Expansion of plants to meet the demand m o re
efficiently.
 Trying to get opportunities for joint ventures with other
international companies.
 Expanding the business for globalization.
 Having two sugar producing plants .
 . Delegation of authority so that decisions can be
m a d e a t t h e s p o t w i t h o u t a n y d e l a y.
 M a y d i v e r s i fy t h e b u s i n e s s i n a l l i e d s er v i c e s . m a y b e
cost l e a d er s by cutting down the unnecessary
ex p e n d i t u re s .
 Adding the new and fresh staff in the company to encourage the
work.
 After textile and sugar now moving towards paper making
industry.
 Company is focused on reducing cost to maintain and enhance its
local as well as its global position.

99
 THREATS:

 Wa t e r c r i s i s i s g o n e u p i n t h e c o u n t r y w h i c h m a y
re s u l t i n t h e s e r i o u s p ro b l e m o f l o w g ro w t h i n c o t t o n ,
y a rn a n d s u g a r c a n e .
 A f re e t r a d e p o l i c y o f WT O i s a m a j o r t h re a t t o t h e
c o m p a n y.
 M a i n t a i n i n g i t s l e a d e r s h i p i n f u t u re a ft e r
i m p l e m e n t a t i o n o f f re e t r a d e z o n e s .
 T h re a t o f e n t r y o f n ew c o m p e t i t o r s .
 A trade free policy can be the threat of the company as new entry
is easy.
 T h re a t o f w a t e r a n d g a s c r i s i s i n i t h i g h c o n s u m p t i o n
p o t e n t i a l m a r ke t .
 N o w a d a y s e l e c t r i c i t y s h o r t a g e i s t h e b i g t h re a t t h a t
c a n b e res u l t e d i n t h e l o w p ro d u c t i o n .
 Due to political instability the bad condition of stock exchange is a
threat of company that results in low share prices.
 Due to high trade tariff export and cotton and yarn can be low..

100
 Suggestions and Recommendations.

 Jobs should be assigned according to their caliber to develop their

interest in work, output and to enhance the efficiency of workers.
It is also observed that in some cases more than one department
maintains the same record. This is done all of over staffing and
unbalanced distribution of work, which results in de-motivation of
the employee and decrease in efficiency.
 In colony mills there is lot of documentation and lengthy
procedure of paper work involved, which results in wastage of
time and deficiency so each system should be computerized
through intranet work.
 C o m p a n y m u s t t a ke i n i t i a t i v e s t e p s t o m a i n t a i n t h e
h u g e o rd e r s .
 Wo r ke r s must be trained to follow the safety rules.
Management should take necessary action to implement the
safety rules in the organization.
 J o b v a r i e t y m u s t b e a d d e d t o c h a n g e t h e a t m o s p h ere ,

t o d e v e l o p t h e i n t ere s t t o e m p l o y e e s a n d t o i n c re a s e
t h e i r p e r f o rm a n c e. . So proper analysis should be done and
explore those employees who can do better work in the
organization.
 People working in one section or department from years are still
with the same knowledge and style of doing job. There should be
proper career planning of employee that not only sharpens the

101
 skills of the employee & improve its efficiency but also results in
better and improved output for the organization.
 Proper advertisement must be planned to increase the sales, to
stay in touch with customers.
 There should be delegation of authority up to certain extent
that enables manager to take timely decisions at the spot with
confidence. Involvement of top management and reaching at the
final decisions is time consuming and some times result in heavy
losses.
 C o l o n y m i l l s m u s t a d o p t t h e n e w t e c h n o l o g y.
 Pro m o t i o n c a m p a i g n s a n d s a l e s p ro m o t i o n s m u s t b e
f o r s u g a r m i l l s a l s o.

102
 CONCLUSION
We financially analyzed the four years annual reports of Colony Textile
limited, by making following analysis

 Short term liquidity analysis

 Long term liquidity analysis
 Profitability analysis
 Investor’s analysis
 Du Pont analysis

 Bankruptcy models

 By analyzed its short term liquidity, we concluded that the short

term liquidity position of this company is going down with the

passage of time. Besides this, company short term ratios are
less as compare to benchmark ratios. So as a short term
creditor, we cannot make the decision to give short term loan to
colony textile mills limited.

 Company’s long term debt paying ability is also going down .It

means that company has no ability to pay its long term debts.
So as a long term creditor, we cannot make the decision to give
long term loan to colony textile mills limited.

 Profitability ratios are improving day by day. Although this

increase is not so much high, but increase in profitability ratios

103
 tells us that company is earning good profits and utilizing its
assets in an excellent way. So as an investor ,we can take
decision to invest in colony textile mills limited.

 After that we make the investor’s analysis in investor’s analysis

degree of financial leverage is improving. It means that risk in
the business is increasing. But when risk is increasing return will
also go to increase. Because where there is risk, there is return.

After that we observed that the earning per share of colony textile
mills limited is going to improve day by day, and that is a positive
sign. So we conclude that as an investor, we make investment in
colony textile mills limited.

104
105
 COLONY MILLS LIMITED
SUMMARIZED INCOME STATEMENT
VERTICAL ANALYSIS
AS ON
2005 2006 2007 2008
Rs.(00 Rs.(00 Rs.(00 Rs.(00
0) 0) 0) 0)

Sales 100% 100% 100% 100%

Cost of Good
Sold
Raw Material 63.45 68.80 66.82 67.67
Salary Wages 7.22 7.11 5.67 4.96
FOH 18.21 16.05 13.63 13.96
Total Manufacurring Cost 88.87 91.96 86.12 86.60
Less Excees Closing Cost W.I.P -0.04 1.79 0.16 0.03

Cost of Goods
88.83 90.18 85.96 86.63
Manufactured
Others -0.12 -3.78 1.28 -0.80

Cost of Goods
88.95 86.39 87.24 85.84
Sold

Gross Profit 11.05 13.61 12.76 14.16

Less Operating Expenses

Distrubtion
Cost

Product
0.10 0.17 0.11 0.15
Transport
Salary & Wages 0.04 0.05 0.05 0.05
Export Sales Expenses 1.56 1.40 2.05 3.01
Others 0.19 0.54 0.14 0.33
Total Distrubtion Cost 1.88 2.16 2.35 3.54

Administrative
Expences

Salaries &
0.58 0.59 0.63 0.40
Benefits
Repair & Maintances 0.08 0.14 0.09 0.11
Others 0.27 0.37 0.52 0.50

106
 Total Adminstrative 100.0 100.0 100.0
100.00
Expenses 0 0 0

Others Operating
0.34 0.00 0.00 0.00
Expenses

Operating Profit (EBIT) 7.90 10.35 9.17 9.61

Less Finance Cost

Intrest on Long Term Loan 1.78 0.13 3.07 1.67
Intrest on Short Term Loan 1.50 4.19 1.87 5.16
Bank Charges & Other Finance
0.08 0.37 0.36 1.65
Cost

Other Expenses 0.49 4.01 1.14 -1.48

Other Income 1.36 4.15 5.18 2.57

EBT 5.40 5.80 7.92 5.18
Tax 2.21 0.70 0.96 1.17
Net Profit 3.19 5.10 6.96 4.01

107
 COLONY MILLS LIMITED
SUMMARIZED INCOME STATEMENT
HORIZONTAL ANALYSIS
AS ON

2005 2006 2007 2008

RS.(00
RS.(000) RS.(000) RS.(000)
0)

100.0 61.3804 172.702 209.611

Sales 0 43 39 14
Cost of Good
Sold
Raw Material 100.00 66.56 181.89 223.58
Salary Wages 100.00 60.48 135.61 144.15
FOH 100.00 54.12 129.33 160.76
Total
Manufacurring 100.00 63.52 167.36 204.26
Cost
Less Excees Closing Cost (3028.98
100.00 (783.78) (197.09)
W.I.P )

Cost of Goods
100.00 62.31 167.11 204.42
Manufactured
(1895.03
100.00 1987.02 1425.79
Others )

Cost of Goods
100.00 59.62 169.38 202.28
Sold

Gross Profit 100.00 75.59 199.43 268.61

Less Operating
Expenses

Distrubtion
Cost

Product
100.00 108.58 185.31 320.21
Transport
Salary & Wages 100.00 75.61 216.80 287.07
Export Sales
100.00 55.37 228.11 405.39
Expenses
100.0
174.18 125.61 365.42
Others 0
Total 100.00 70.48 215.37 394.42

108
 Distrubtion
Cost
Administrative
Expences

Salaries &
100.00 62.47 187.79 143.82
Benefits
Repair &
100.00 107.43 187.57 295.37
Maintances
Others 100.00 85.02 337.37 389.00
Total Adminstrative
100.00 72.95 231.16 228.20
Expenses

Others Operating
100.00 0.00 0.00 0.00
Expenses

Operating
100.00 80.37 200.51 254.95
Profit (EBIT)

Less Finance
Cost
Intrest on Long Term Loan 100.00 4.32 297.04 196.08
Intrest on Short Term Loan 100.00 171.02 214.65 719.36
Bank Charges & Other
100.00 275.11 742.82 4182.24
Finance Cost

Other Expenses 100.00 502.18 400.85 (631.54)

Other Income 100.00 187.34 657.77 395.91

EBT 100.00 65.95 253.26 200.83
Tax 100.00 19.44 75.00 110.45
Net
100.00 98.24 377.04 263.59
Profit

109
 COLONY MILLS LIMITED
SUMMARIZED BALANCE SHEET
VERTICAL ANALYSIS
AS ON
2005 2006 2007 2008
Rs.(0 Rs.(0 Rs.(0 Rs.(0
00) 00) 00) 0
ASSET
S
CURRENT
ASSETS
Cash & Bank
1.23 0.06 0.05 0.25
Balance
Short Term
2.76 10.43 4.75 3.68
Investment
Trade
3.62 2.13 3.34 2.62
Debts
Loans &
2.39 0.00 0.00 0.00
Advances
Short Term
9.01 0.00 0.00 0.00
Deposits
Other Receivable 0.23 2.24 5.53 6.28
Stores & Spares 0.56 0.83 0.80 0.96
Tax Refunds due from
0.22 0.54 0.92 0.97
Government
Stock in Trade 0.00 0.00 0.00 0.00
Raw Material 11.48 11.16 11.97 12.70
Working in
1.34 1.03 0.98 0.69
Process
Finish Goods 5.81 3.65 2.30 2.10
Assets held for disposal 0.00 4.09 5.31 0.00
Real etate property held
0.00 0.00 0.00 3.88
for trading
Total Current
38.63 36.16 35.95 34.13
Assets
0.00 0.00 0.00 0.00
FIXED ASSETS 0.00 0.00 0.00 0.00
Work in Progress 7.81 3.61 2.93 10.15
Plant &
53.18 32.93 43.23 37.20
Machinery
Less:
8.87 6.06 8.50 7.33
Depreciation
44.31 26.87 34.73 29.87
Other 8.87 33.10 26.13 19.48
Total Fix Assets 61.00 63.58 63.80 59.50
0.00 0.00 0.00 0.00

110
 Long Term Security
0.31 0.03 0.20 6.22
Deposit
Long Term
0.06 0.23 0.05 0.15
Investment
0.00 0.00 0.00 0.00
0.00 0.00 0.00 0.00
100.0 100.0 100.0 100.0
Total Assets 0 0 0 0

LIABILITIES &
EQUITY

CURRENT
LIABILITIES

Trade & Other

Payables
Credito
1.05 2.61 6.11 15.54
r
Bills Payable 13.56 1.99 6.64 0.00
Advance
0.14 0.36 0.02 0.15
Payments
Other 1.64 1.09 1.05 0.89
Total Trade & other
16.38 6.06 13.82 16.58
Payables
Accured Interest & Mark Up 1.29 1.14 1.05 1.32
Short Term
15.03 23.96 17.44 17.90
Borrowing
Tax 1.22 0.62 0.32 0.28
Current Portion of Non Current
3.92 3.75 2.88 4.27
Liabilities
Provision against contingent
0.00 0.40 0.00 0.00
liabilities
Total Current
37.84 35.92 35.51 40.36
Liabilities
0.00 0.00 0.00 0.00
NON CURRENT
0.00 0.00 0.00 0.00
LIABILITIES
Loan from
0.85 0.00 0.00 0.00
related parities
Liabilities
0.23 0.57 0.81 1.05
against asset
Long term
20.48 25.35 26.46 33.04
financing
other 17.15 4.36 2.72 2.58
38.71 30.28 29.99 36.66
STOCK HOLDER
EQUITY
Issued Capital 4.70 31.34 26.75 19.30
Capital Reserve 2.96 2.46 7.75 3.67
unapproriated
6.36 0.00 0.00 0.00
profit
0.00 0.00 0.00 0.00

111
 0.00 0.00 0.00 0.00
Total Equity 14.03 33.80 34.50 22.97
Surplus on Fix
9.43 0.00 0.00 0.00
Asset
0.00 0.00 0.00 0.00
Total Liabilities & 100.0 100.0 100.0 100.0
Equity 0 0 0 0

112
 COLONY MILLS LIMITED
SUMMARIZED BALANCE SHEET
HORIZONTAL ANALYSIS
AS ON
2005 2006 2007 2008
Rs.(0 Rs.(00 Rs.(00 Rs.(00
00) 0) 0) 0
ASSETS
CURRENT ASSETS
100.0
6.76 6.75 49.07
Cash & Bank Balance 0
100.0
553.71 295.62 317.71
Short Term Investment 0
100.0
86.12 158.20 172.12
Trade Debts 0
Loans & 100.0
0.00 0.00 0.00
Advances 0
Short Term 100.0
0.00 0.00 0.00
Deposits 0
Other 100.0 1445.1 4174.9 6571.1
Receivable 0 1 0 0
100.0
218.69 247.95 407.76
Stores & Spares 0
100.0 1056.4
364.54 724.87
Tax Refunds due from Government 0 8
Stock in Trade
100.0
142.36 178.91 263.15
Raw Material 0
Working in 100.0
112.33 125.61 122.27
Process 0
100.0
92.03 68.02 86.09
Finish Goods 0
Assets held for disposal
Real etate property held for trading
Total Current 100.0
137.03 159.65 210.09
Assets 0

FIXED ASSETS
100.0
67.72 64.32 308.84
Work in Progress 0
Plant & 100.0
90.65 139.48 166.29
Machinery 0
Less: 100.0
100.00 164.41 196.39
Depreciation 0
100.0
88.78 134.49 160.27
0
Other 100.0 546.29 505.52 522.07

113
 0
100.0
152.61 179.45 231.91
Total Fix Assets 0

Long Term Security 100.0 4709.4

14.67 111.13
Deposit 0 8
100.0
578.05 144.46 592.90
Long Term Investment 0

100.0
146.41 171.56 237.76
Total Assets 0

LIABILITIES & EQUITY

CURRENT
LIABILITIES

Trade & Other Payables

Credito 100.0 1000.7 3526.7
365.50
r 0 6 2
100.0
21.53 84.05 0.00
Bills Payable 0
Advance 100.0
361.80 28.69 252.77
Payments 0
100.0
97.85 109.91 129.84
Other 0
Total Trade & other 100.0
54.16 144.75 240.66
Payables 0
100.0
128.56 139.66 243.48
Accured Interest & Mark Up 0
100.0
233.44 199.14 283.26
Short Term Borrowing 0
100.0
74.54 44.76 55.42
Tax 0
Current Portion of Non Current 100.0
140.06 125.97 259.07
Liabilities 0
Provision against contingent
liabilities
100.0
139.00 161.01 253.62
Total Current Liabilities 0

NON CURRENT
LIABILITIES
100.0
0.00 0.00 0.00
Loan from related parities 0
100.0 1095.6
363.82 612.88
Liabilities against asset 0 8
Long term 100.0
181.23 221.73 383.59
financing 0
100.0
37.26 27.18 35.79
other 0
100.0 114.52 132.94 225.21

114
 0
STOCK HOLDER EQUITY
100.0
976.71 976.71 976.71
Issued Capital 0
100.0
121.30 448.40 294.53
Capital Reserve 0
unapproriated 100.0
0.00 0.00 0.00
profit 0

100.0
352.79 421.92 389.40
Total Equity 0
100.0
0.00 0.00 0.00
Surplus on Fix Asset 0

Total Liabilities & 100.0

146.41 171.56 237.76
Equity 0

115
 PROFITABILITY RATIOS.

Years 2005 2006 2007 2008

12.7608419
.G.P.M 11.050838 13.608581 14.16127383
4

Years 2005 2006 2007 2008

7.90192635 10.3469501 9.17429812
O.I.M 9.611176844
9 2 7

Years 2005 2006 2007 2008

Net profit 3.18839603 5.10326305 6.96081736
4.009523858
margin 3 9 4

Years 2005 2006 2007 2008

26.3898346 63.3644584
T.A.T.R 62.94711637 55.49447501
2 6

Years 2005 2006 2007 2008

2.00700336 1.34674268 4.41071472
ROA 2.225064215
1 2 8

Years 2005 2006 2007 2008

8.15468782 6.98308677 11.5775722
R.O.A 11.42323872
2 6 2

116
 Years 2005 2006 2007 2008
Operating
103.198732
Assets 67.4893248 126.195727 11.8852923
2
Turnover

Years 2005 2006 2007 2008

Sales to
fixed assets 103.20 67.49 126.20 118.85
ratio

Years 2005 2006 2007 2008

Return on
3.805863 0.4428402 6.839487 3.730959
Investment

117
 SHORT TERM DEBT PAYING ABILITY.
2005 2006 2007 2008
205554692 28166693 328162259 43184774
CUURRENT ASSETS 2 14 7 48
201337844 27986327 324178169 51063040
CURRENT LIABILITIES 4 92 1 58
1.0209441 1.0064447 1.01228981
0.8457149
CURRENT RATIO 39 6 8

106441674 15826941 188917143 23581846

QUICK ASSETS 4 78 6 77
201337844 27986327 324178169 51063040
CURRENT LIABILITIES 4 92 1 58
0.5286719 0.5655240 0.58275714
0.4618183
QUICK RATIO 68 6 3

205554692 28166693 328162259 43184774

CUURRENT ASSETS 2 14 7 48
201337844 27986327 324178169 51063040
CURRENT LIABILITIES 4 92 1 58
-78782661
42168478 18036522 39840906
WORKING CAPITAL 0

CASH 65352792 4419673 4414338 32066725

81220981 46603014
146685782 1336742
MRK SECURITIES 3 5
201337844 27986327 324178169 51063040
CURRENT LIABILITIES 4 92 1 58
0.1053148 0.2917958 0.00177404 0.0975454
CASH RATIO 13 7 9 8

334940675 20558806 70207295

578505405
ANNUAL CREDIT SALES 2 94 42
23985087 97937175
150073976 575118430
AVG A/R 5 8
22.318371 8.5714954 1.00588917 7.1686052
A/R TURNOVER 52 9 8 7

22.318371 8.571495 7.168605

1.00588918
A/R TURNOVER 52 49 27
16.130209 41.99967 357.892307 50.21897
AVG COLLECTION PERIOD 13 21 8 38

118
 297926922 17761045 504635381 60265048
CGS 0 03 3 07
11125526 131321314 16763719
990382399
AVG INVENTORY 57 9 66
3.0082008 1.5964228 3.84275303 3.5949687
INVENTORY TURNOVER 96 7 4 4

3.0082008 1.596422 3.594968

3.84275303
INVENTORY TURNOVER 96 87 7
119.67285 225.5041 93.6828355 100.1399
AVG OF INVENTORY 84 61 1 54

334940675 20558806 578450540 70207295

SALES 2 94 5 42
-78782661
42168478 18036522 39840906
WORKING CAPITAL 0
79.429159 -8.911516
113.98432 145.190107
SALES TO WORKING CAPITAL 19 1

16.130209 41.99967 357.892307 50.21897

A/R Turnover in days 13 21 8 38
119.67285 225.5041 93.6828355 100.1399
Inventory Turnover in days 84 61 1 54
135.80306 267.5038 451.575143 150.3589
OPERATING CYCLE 75 33 3 28

119
 LONG TERM DEBT PAYING ABILITY.
Total 407301254 515732572 597988124 97448719
liabilities 8 1 6 16
Total 532095821 779042659 912894317 1.2651E+
assets 0 3 3 10
0.765465 0.662008 0.655046 0.770271
Debt ratio 991 127 387 16

Total 407301254 515732572 597988124 97448719

liabilities 8 1 6 16
Shareholder' 263310087 314906192 29063506
746361256
s equity 2 7 50
Debt to
5.457159 1.958651 1.898940 3.352958
Equity
673 025 505 09
ratio

Total 407301254 515732572 597988124 97448719

liabilities 8 1 6 16
Shareholder' 263310087 314906192 29063506
746361256
s equity 2 7 50
Intangible
0 0 0 0
assets
DEBT TO
TENGIBLE 5.457159 1.958651 1.898940 3.352958
NET WORTH 673 025 505 09
RATIO

Current 201337844 279863279 324178169 51063040

liabilities 4 2 1 58
Shareholder' 263310087 314906192 29063506
746361256
s equity 2 7 50
Current
2.697592 1.062865 1.029443
debt to net 1.756947
389 772 614
worth ratio

205963410 235869292 273809955 46385678

LTD 4 9 5 58
263310087 314906192 29063506
746361256
Equity 2 7 50

120
Total
0.734011 0.472514 0.465096 0.614793
capitalizati
94 09 73 63
on ratio

324558905 495319444 582421845 75269258

Fixed assets 0 1 6 20
Shareholder' 263310087 314906192 29063506
746361256
s equity 2 7 50
Fixed asset
4.348549 1.881125 1.849509 2.589820
to equity
746 973 026 27
ratio

264667655 67477473
212720950 530687771
EBIT 5 2
49156894
129235123 178660925 371807572
Interest 8
Time
interest 20.47954 1.190640 1.427318 1.372696
earned 529 595 352 01
ratio

264667655 6747747
212720950 530687771
EBIT 5 32
3641656
23443822 18219485 34889562
Lease Pmt 8
Tax rate 40% 40% 40% 40%
Principle 0 0 0 0
4915689
129235123 178660925 371807572
intrest 48
Preferred
0 0 0 0
dividened
Fixed
charge 10.49307 0.703799 0.834395 0.80819
coverage 897 129 848 41
ratio

121
 Investor’s Analysis
2005 2006 2007 2008
Financial leverage= EBIT/EBT
85494179
310183157 291991853 830067779
EBIT 9
36337285
180948234 119330928 458269207
EBT 1
Financial 1.7142093 2.4469084 1.8113103 2.3527949
leverage 63 24 96 2
EPS=net income-Preferred dividened/No.of C/S
Outstanding

Net 28149782
106792352 104917000 513886773
income 6
Preferred
0 0 0 0
dividened
weighted C/S 24500000
10410959 135653589 244176300
average outstanding 0
10.257686 0.7734185 2.1045726 1.1489707
EPS 35 34 92 2

Note There is no dilutive effect on the basic EPS of a company.

Price
earning Market price per
ratio= share/EPS

Market price per

12 13 12 14
share
EPS 10.25786 0.7734185 2.1045727 1.1489707
1.1698346 16.808493 5.7018700
12.184819
P/E ratio 44 72 28
% of earning retained=Net income-all divideneds/net
income

28149782
106792352 104917000 513886773
Net income 6
28149782
106792352 104917000 513886773
All divideneds 6
% earning
0 0 0 0
retained
Dividened payout ratio= Dividened per
share/EPS

Dividened per
10.26 0.77 2.1045727 1.1489707
share
Earning per
10.26 0.77 2.1045727 1.1489707
share
Dividened payout
1 1 1 1
ratio
Dividened Yield=Dividened per share/ Market price of
share

Dividened per
10.26 0.77 2.1045727 1.1489707
share
Market price of
12 13 12 14
share
Dividened 0.0592307 0.1753810 0.0820693
0.855
yield 69 58 4

122
Book
value=Total
shareholder
's equity-
Preferred
equity

Total NO.of common stock

outstanding

Total shareholder's 263310087 314906192 29063506

746361256
equity 2 7 50
Preferred
0 0 0 0
equity
common stock 24500000
10410959 135653589 244176300
outstanding 0
71.689962 19.410477 12.896673 11.862655
09 02 13 7

123