Current Ratio:

Current Assets
Current Assets =
Current Liabilities

Textile Companies: 2018 2019

30,06,2018 78,08,12,968
46,25,34,191 52,72,33,253

Al Haj Textiles Ltd 2.55 times 1.48 times

Tosrifa Industries Ltd 0.9720 times 0.80 times

Current Ratio
3

2.5

1.5

0.5

0
2018 2019

Toshrifa Industries Al Haj Textiles

Quick Ratio:
Current Assets−Inventory
Quick Ratio =
Current Liabilities

Textile Companies: 2018 2019

46,25,34,191−147,858,246 78,08,12,968−286,484,100
18,15,35,553 52,72,33,253

Al Haj Textiles Ltd 1.73:1 times 0.93:1 times

Tosrifa Industries Ltd 0.5493 times 0.46750 times

Quick Ratio
2
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2018 2019

Tosrifa Industries Ltd Al Haj Textiles Ltd

Cross-Sectional Analysis:
Through the variation of quick ratios of Al Haj Textile Mills Limited, it can be said that the
company had experienced a continuing growth from 1.48 to 2.55 in 2018 to 2019
This statistics gives an essence that the company might be experiencing revenue growth, they
might be in an ease of collecting their accounts quickly.
Recommendation:
According to the data of quick ratio, Al Haj Textile Mills Limited is performing better
thanTosrifa Textile Mills Limited. So Tosrifa Textile Mills Limited should increase their
operating income, reduce their debts and make a rapid move in collecting or paying its
accounts.

Debt Ratio:

Total debt
Debt ratio =
Total asset

Textile Companies: 2018 2019

328637376 674037180
579628196 883189544

Al Haj Textiles ltd 56.7% 76.3%

Tosrifa Industries Ltd 0.341 or 34.1% 0.362 or 36.2%

Debt ratio
90.00%

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
2018 2019

Tosrifa Industries Ltd Al Haj Textiles ltd

Cross-Sectional Analysis:
According to the statistics, Al Haj Textile Mills Limited had a debt ratio ranging from
56.7%to 76.3% over the years.This shows that they had used a greater amount of credits to
generate profits. Whereas Tosrifa Industries Ltd had used a lesser amount of credit to generate
profits for the company.
Recommendation:
In order to reduce the debt ratio, both the companies can increase their payments towards debt
if they have sufficient cash, avoid taking more short- and long-term loans, and increase the
revenue which will lead to a rise in total assets.

Inventory Turnover:
Cost of goods sold
Inventory turnover=
Inventory

Textile Companies: 2018 2019

242,449,292 94,430,908
147,858,246 286,484,100

Al Haj Textiles ltd 1.64 times 0.32 times

Tosrifa Industries Ltd 3.01388 times 3.57861 times

 Inventory turnover
4

3.5

2.5

1.5

0.5

0
2018 2019

Tosrifa Industries Ltd Al Haj Textiles ltd

Cross-Sectional Analysis:
According to the statistics,Al Hj;s inventory turnover had gradually decreased.A fall in
inventory could possibly indicate that the company was inefficient in terms of selling their inThe
drastic fall of inventory turnover was due to the low volume of sales.
Recommendation:
Al Haj Textile Mills Limited should create a demand for their inventory, reduce costs and
appraise business pricing strategy.Al Haj Textile Mills Limited should create a demand for their
inventory, reduce costs and appraise business pricing strategy.

Total Asset Turnover:

sales
Total Asset Turnover=
Total assets

Textile Companies: 2018 2019

259,844,692 944,30,908
579,628,196 883,189,544

Al Haj Textiles Ltd 0.45 times 0.12 times

Tosrifa Industries Ltd 0.3466 times 0.45207 times

 Total Asset Turnover
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0
2018 2019

Tosrifa Industries Ltd Al Haj Textiles Ltd

Cross-Sectional Analysis:
The Statistics above shows that the total asset turnover of Al Haj Textile Mills Limited by
2019 is not much considerable since it had declined from 0.45 to 0.12. It could be analyzed
that the sales of the company is low or the company was not being able to utilize their total
assets to generate revenue.
Recommendation:
According to the trend graph of total asset turnover, H.R. Textile Mills Limited had utilized
their assets.Properly and in order to maintain a growth in total asset turnover, they should
continue to use their asset appropriately. On the other hand, Al Haj Textile Mills Limited
should increase their sales or utilize their total assets appropriately in order to boost their total
asset turnover.

Average age of Inventory:

365
Average age of Inventory=
inventory turnover

Textile Companies: 2018 2019

 365 365
1.64 0.32

Al Haj Textiles Ltd 222.57 days 1140.63 days

Tosrifa Industries Ltd 121.106 days 101.9949 days

Average age of Inventory

1200

1000

800

600

400

200

0
2018 2019

Tosrifa Industries Ltd Al Haj Textiles Ltd

Cross-Sectional Analysis:
As per the statistics, the 2018data shows that the company took over almost 223 days to sell
their inventories and convert it into cash. In contrast, H.R. Textile Mills Limited maintains a
better average age of inventory which is moderately less than Al Haj Textile Mills Limited.
Recommendation:
In terms of average age of inventory, Tosrifa. Textile Mills Limited is ahead of Al Haj Textile
Mills Limited. So to reduce the average age of inventory of Al Haj Textile Mills Limited, they
should promote their product and make it known to every possible consumer and should also
forecast.
Average Collection Period:
365
Average Collection Period=
Receivable Turnover

2018 2019
Textile Companies:

23,25,677 258,714.8164
711,903.2658 94430908

Al Haj Textiles Ltd 3.27 days 2.74 days

Tosrifa Industries Ltd 20.8687 days 73.23 days

80

70

60

50

40

30

20

10

0
2018 2019

Tosrifa Industries Ltd Al Haj Textiles Ltd

Cross-Sectional Analysis:
On the basis of the statistics above, the average collection period of Al Haj Textile Mills
Limited had slightly decreased in 2019 ranging from 3.27 to 2.7 days. But in comparison, Al
Haj Textile Mills Limited was doing way better than Tosrifa Industries Ltd. Company A’s
average of 38 days means accounts are often overdue.
Recommendations: However a lowercould indicate a ratio that Al Hajj doesn’t have
sufficient amount of funds on their reserve.Thus they sould more focus on keeping a proper
balance on their cash flows.

Average payment period:

365
Average payment period=
Payable Turnover

Textile Companies: 2018 2019

365 365
❑ ❑
Al Haj Textiles Ltd 150.32 144.4

Tosrifa Industries Ltd 80.032 days 99.3958 days

Chart TitlAverage payment period

160

140

120

100

80

60

40

20

0
2018 2019

Tosrifa Industries Ltd Al Haj Textiles Ltd

Cross-Sectional Analysis:
As per the information, Al Haj Textile Mills Limited had a small collection period which
indicates that they had a better cash flow and financial solvency. So, in order to hold the
consistency, they must take corrective measures.
Recommendations:
However, stricter collection requirements can end up turning some customers away, sending
them to look for companies with the same goods or services and more lenient payment rules or
better payment options.

Times interest Earned ratio:

EBIT
Times interest earned ratio=
Interest

Textile Companies: 2018 2019

19550684 23531670
15618590 11627428

Al Haj Textiles Ltd 1.25 times 2.02 times

Tosrifa Industries Ltd 3.954 times 1.522 times

Times interest earned ratio

4.5

3.5

2.5

1.5

0.5

0
2018 2019

Tosrifa Industries Ltd Al Haj Textiles Ltd

Cross-Sectional Analysis:
It means that they didn’t have any interest from debt before. The reason why Al Haj Textile
Limited did not have to pay interest is explained in the annual statement of the company
attached.
Higher the Times Interest Earned ratio, the better it is. Even though there weren’t any ratios
before 2018 for Al Haj, still it had the higher amount. So, Al Haj is doing comparatively better.
Recommendations:
However a ratio could means that fewer earnings are available to meet the interest,
The lower the average collection period, the better as it provides cash in the company,thus
shall continue to maintain such caliber ahead.