GOHER ALI MBO-FA13-008

MOHAMMAD ADIL MBO-FA13-

014
UMM-E-FARWAH MBO-FA13-020
MATEEN BUTT MBO-FA13-022
ZAHID KHALIL MBO-FA13-023
Group Members
Liquidity Ratio of MTL
Liquidity is a companys ability to
meet its maturing short term
obligations. Liquidity is essential to
conducting business activity,
particularly in times of adversity. The
Liquidity Ratio of Millat Tractor
Limited is given below:

Liquidity Ratio
Net Working Capital
Current Assets = 8732156 (Rs. in thousands)
Current Liabilities = 5331414 (Rs. in thousands)
Net Working capital of MTL = Current Assets
Current Liabilities
= 8732156 5331414
= 3400742 (Rs. in thousands)

The net working capital in 2012 was 3939598 (Rs. in
thousands) that shows in 2013 there is a decline in its
net working capital.


Liquidity Ratio
Current ratio
Current Ratio of MTL = Current Assets / Current
Liabilities
= 8732156 / 5331414
= 1.64

The current ratio of MTL shows that its current
assets are 1.63 times of its shot term liabilities,
which means that Current assets of MTL are 1.63
times can be converted into cash to pay its short
term obligations. The current ratio of MTL in 2012
was 1.77

Liquidity Ratio
Quick Ratio
Quick Assets = Cash + short term investment +
Accounts Receivables
Quick Assets of MTL = 2087580 + 551871 +
974158
= 3613609 (Rs. In thousands)
Quick Ratio of MTL = Quick Assets / Current
Liabilities
= 3613609 / 5331414
= 0.68
The quick ratio of MTL shows that its quick
assets are not enough to pay its short term
liabilities and this show less liquidity of the firm.
The Quick ratio in 2012 was 0.69

0.7
33
4.5
2
0.3
18
1
5.5
27
7
1.5
30
11
0.8
0.3
22
1
3.4
6
24
Current Assets of MTL in Percentage
2012 2013
2013
2012
Accumulated Compensated
absences
Trade and other Payables
Mark up accrued on short term
Borrowings
1.15
98.8
0.04
1.08
98.8
0.02
Current Liabilities of MTL in Percentage
2013 2012