Ratios

Current Ratio Quick Ratio Cash Ratio Working Capital Debt Ratio Debt to Equity Ratio Time Interest Earned Account Receivable Turnover Average Collection Period Inventory Turnover Fixed Assets Turnover Total Assets Turnover Gross Profit Margin Operating Profit Margin Net Profit Margin Return on Assets Return on Equity Earning per Share

2006
0.85 0.374 0.021 (67,126,687) 0.714 2.49 2.195 times

Industry Result
2 1.5 1.25 5,500,000 0.7 0.10 20 times Worse Worse Worse Worse Average Worse Worse Good Good Worse Worse Worse Worse Worse Worse Worse Worse 0.86 1.48

Short Term Solvency Ratios

Long Term Solvency Ratios/Stability Ratios

Assets Utilization Ratios
48.71 times 7.5 days 3.54 days 0.701 times 0.737 times 15.1% 9.4% 0.89% 0.6% 1.45% 14 times 25 days 21 days 10 times 6 times 30% 25% 20% 18% 12%

Profitability Ratios

Dividend per Share

Ratios
Current Ratio Quick Ratio Cash Ratio Working Capital Debt Ratio Debt to Equity Ratio Time Interest Earned Account Receivable Turnover Average Collection Period Inventory Turnover Fixed Assets Turnover Total Assets Turnover Gross Profit Margin Operating Profit Margin Net Profit Margin Return on Assets Return on Equity

2006
0.853 0.236 0.021 (67,126,687) 0.714 2.494 2.195 times

2005
1.082 0.550 0.014 17,219,191 0.502 1.011 1.043 times

2004 Result
0.777 0.341 0.004 (65,722,452) 0.637 1.759 1.743 times Average Average Worse Average Average Average Average Good Good Average Average Good Worse Worse Worse Worse Worse

Short Term Solvency Ratios

Long Term Solvency Ratios/Stability Ratios

Assets Utilization Ratios
48.71 times 7.5 days 3.54 days 0.701 times 0.737 times 15.1% 9.4% 0.89% 0.6% 1.4% 58.13 times 6.27 days 10.8 days 1.233 times 1.202 times 15.8% 10.8% 6.3% 7.6% 15.3% 174.8 times 2.1 days 7.49 days 1.219 times 1.341 times 12.1% 7.3% 3.5% 4.7% 13.0%

Profitability Ratios

Recommendations
The company has an average position that in 2004 it is in worse condition but in 2005 again it become in stable position but again it gone to worse condition in 2006. The recommendations which can help this company are as follows:
♦ As the short term solvency ratios of this company are in worse condition so the company should payoff his liabilities so that it is in position to maintain its current ratio, quick ratio, cash ratio and its working capital. ♦ The company should payoff his Liabilities to maintain its Debt Ratio and Debt to Equity Ratio and it should maintain its sales so that it can increase its Time Interest Earned. ♦ To maintain the inventory turnover the company should increase its sales so that it can maintain its Inventory Turnover, and it should also increase its net sales by offering discount to its customer to maintain its Fixed and Total Assets Turnover. ♦ The company should increase its net sales to maintain its Gross Profit Margin, Operating Profit Margin and Net Profit Margin, it should increase its sales to get more profit so that it is able to maintain its Return On Assets and Return on Equity.

Cross Sectional Graphical Representation
2004 2005 2006

By seeing overall results of 2004, 2005 and 2006, in cross sectional analysis, company performance is better in 2005 then 2004 and 2006.

Time Series Graphical Representation
50 40 30 20 10 0 2004 2005 2006

By seeing overall results of 2004, 2005 and 2006, in time series analysis, company performance is better in 2005 then 2004 and 2006.

About a company;
The company which is being selected for this report is

Kohinoor Sugar Mills Ltd.
FAROOQ AHMED is a company secretary. Its registered office is in 29 – G, GULBERG – II, LAHORE and mills are in JAUHARABAD, DISTRICT KHUSHAB. STATEMENT OF ETHICS AND BUSINESS PRACTICE Code of ethics is a pre-requisite for all directors and employees of Kohinoor Sugar Mills Limited. We endeavor to have fully groomed employees committed to carry out honestly activities assigned to them. Our aim is to have high standard of excellence for the products and for all those involved with our Company. VISION STATEMENT To become a market leader in the Industry setting out high quality standards for the Company and others to follow. MISSION STATEMENT To produce/manufacture quality sugar and molasses by maintaining a high standard of efficiency and staying competitive to ensure customer satisfaction and to provide a comfortable level of return to all stakeholders.

Financial statement analysis:
It is a set of four related accounting reports which shows the position and results of operations of an entity during a particular period of time. It includes; • • • • Income statement Balance sheet Statement of cash flows Statement of retained earning

Types of Analysis;
1. Cross sectional analysis 2. Time series analysis

Cross sectional analysis:
Financial results of the firm are compared with the result of industry.

Time series analysis:
Evaluation of the firm financial performance over time (using financial ratio analysis) is known as Time series analysis. We do this analysis to; • Know the strengths and weakness • Know the historical performance • Know the current financial position of firm