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National University of Modern Languages Sector H-9 ISLAMABAD Department of Management Science

Afs Project

Kohinoor Sugar mill ltd

5/12/11

SUBMITTED TO: Madam iram qazi SUBMITTED BY: Adeel Azher

If u want to download this project then call me at 03458014643 or send me a text 1

If u want to download this project then call me at 03458014643 or send me a text

**Kohinoor Sugar Mills Limited
**

Introduction

Kohinoor Sugar Mills Limited is one of the first Sugar Factories established in Pakistan since the country’s independence. A Saigol Family project, KSML is a public limited company, listed on the Karachi and Lahore Stock Exchanges. Kohinoor Sugar Mills is located in Jauharabad, District Khushab in the Punjab province. The plant has the capacity of crushing over 5,000 Metric Tons of Cane per Day (TCD). The Factory produces over 40,000 tons of sugar every year.

**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”

If u want to download this project then call me at 03458014643 or send me a text 2

If u want to download this project then call me at 03458014643 or send me a text

MISSION STATEMENT

To produce/manufacture quality sugar and molasses by maintaining a high standard of efficiency and staying competitive to ensure customer satisfaction

Ratio Analysis

Now we shall find out the ratios of the Kohinoor Sugar Mills Limited to check the condition of the firm. We will find out the Following Ratio Balance Sheet Liquidity Ratio Leverage ratio Income Statements Profitability Ratio Coverage Ratio Efficiency Ratio Market Value Ratio

Liquidity Ratio

Those ratios which shows how quickly a firm meets its short term obligations. Current liability Following are the liquidity Ratio • Current Ratio • Quick Ratio • Cash Ratio

Current Ratio

The current ratio is obtained by dividing the current assets by current liabilities. Current assets normally includes: cash, marketable securities, account receivable and inventories.

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If u want to download this project then call me at 03458014643 or send me a text

Formula

**The formula of current ratio is:
**

Current ratio = Current assets / Current liabilities Computation

Years 2005 2006 Current Assets 227,173,249 390,666,841 Current Liabilities 209,954,058 457,793,528 Current Ratio 1.08 0.85

Analysis

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If u want to download this project then call me at 03458014643 or send me a text

The firm current ratio is in poor condition so it means that they need financing to cover up their current obligations.

Quick Ratio. The quick ratio can be calculated by deducting the inventories and prepayments from the current assets and then dividing the remainder by current liabilities. Inventories are typically the least liquid of the firm current assets hence they are the current assets on which losses are most likely to occur in a bankruptcy.

Formula

The formula of Quick ratio is: Quick ratio= Current assets-inventories-prepayments / Current liabilities 2005Quick Asset= 227,173,249- 90,623,529- 66,437,296=70,112,424 2006Quick Asset= 390,666,841-84,466,516-218,956,788=87,243,537

Computation

Years 2005 2006 Quick Assets 70,112,424 87,243,537 Current Liabilities 209,954,058 457,793,528 Quick Ratio 0.33 0.19

Analysis We can see that in 2005 we have current rati of 0.33 that means we have 0.33 quick assets to pay a 1 current liability. But in 2006 it decrease from 0.33 to 0.19 which show the performance of company is bad. Cash Ratio

If u want to download this project then call me at 03458014643 or send me a text 5

If u want to download this project then call me at 03458014643 or send me a text The cash ratio gives the information about the coverage of the current liabilities through cash which is the liquid. It should be 1: 1 as this is considered as satisfactory. The liquidity is calculated by adding cash and marketable securities. The Cash Ratio of Kohinoor Sugar Mills Limited is:

Formula

The formula of working capital is:

**Cash Ratio = (Cash + Marketable Securities) / Current liabilities Computation
**

Years 2005 2006 Cash + MKT Securities 2,909,458+3,839,179=6,748,637 9,553,415+369,790=9,923,205 Current Liabilities 209,954,058 457,793,528 Cash Ratio 0.032 0.022

ANALYSIS

The cash ratio tells us about the covering of short term obligation with cash and cash equivalent it should the firm quick availability of the cash and cash equivalent. This shows firm quick liquidity.

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If u want to download this project then call me at 03458014643 or send me a text

LEVERAGE RATIO Those ratios which show extend to which it is financed by Debt. Following are the leverage ratio • debt to equity • Total debt to total asset • Total debt ratio

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If u want to download this project then call me at 03458014643 or send me a text

Debt to equity

This ratio asses the extent to which the firm is using borrowed money. This measures how much effective the firm is in usage of the debt. This ratio tells the amount of debt taken against each rupee of equity. The debt to equity ratio of Kohinoor Sugar Mills Limited is:

**Formula The formula of is: Debt to equity = total debt / equity Computation
**

Years 2005 2006 Long Term Debt 165,098,022 468,940,245 Shareholders' Equity 94,867,800 94,867,800 Debt to Equity 1.74 4.94

**Total debt to total asset
**

The total debt to total asset generally called debt ratio, measures the percentage of the funds provided by creditors. The creditors prefer low percentage because it provides greater cushion to the creditors losses in the event of the liquidation. The total debt to total assets of Kohinoor Sugar Mills Limited is: Formula The formula of is: Total debt to total asset = total debt / total asset Total debt= Current liabilities + LT Debt Computation

Years 2005 2006 Total Debt 375,052,080 626,733,773 Total Assets 911,218,836 1,307,811,430 Debt to Total Assets 41.16% 47.92%

Analysis

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If u want to download this project then call me at 03458014643 or send me a text

The debt ratio is increase in 2006 by 6 percent that means we have more assets to pay off the debt. Total debt ratio

This ratio tells about how much firm’s capital is financed by the debt. It should be low because of the risk factor that effect on the firm’s reputation. It should be maximum of 50% or less. The total debt to total capitalization ratio of Kohinoor Sugar Mills Limited is:

**Formula The formula of is: Total debt ratio = total debt / total debt + Equity Computation
**

Years 2005 2006 Current liabilities + LT Debt 375,052,080 626,733,773 Total Debt + Total Equity 478,256,327 729,938,020 Debt Ratio 78.42% 85.86%

Analysis That means for paying the debt we have 78% owner equity and we have a 22% liabilities. And in 2006 we have 85 % are owner equity and 15 percent debt.

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If u want to download this project then call me at 03458014643 or send me a text

Profitability ratios

Profitability is the net result of the number of policies and decisions. The ratios examined thus far provide useful clues as tot the effectiveness of the firms operations. The profitability ratios are: • • • • • Net profit margin Gross profit margin Operating profit Margin Basic earning power Return on total assets

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If u want to download this project then call me at 03458014643 or send me a text

**Net Profit Margin
**

Net profit margin is calculated by divided EAT by sales. it is the percentage of sales which is the profit. It should be high as it means that the cost of incurring production is low. The Kohinoor Sugar Mills Limited net profit margin is: Formula The formula of ratio is: Net profit margin = net profit after taxes / net sales Computation If u want to download this project then call me at 03458014643 or send me a text 11

If u want to download this project then call me at 03458014643 or send me a text

Years 2005 2006

Net Profit After Taxes 54,081,708 8,141,611

Net Sales 852,372,071 913,370,379

Net Profit Margin 6.34% 0.89%

ANALYSIS

This ratio tells us the percentage of sales that is the profits this ration also provide information about the profitability of the firm. The more the net profit margin the more is the profitability of the firm. In case of Kohinoor sugar the firm has maximum profit which means that the firm profitability is good. Gross Profit Margin The gross profit margin is calculated by dividing gross profit by sales. This the percentage of sales which is the gross profit as percentage of sales. The difference of this percentage from 100% gives the percentage of cost of goods sold.

**Formula The formula of ratio is: Gross profit margin = Gross profit / net sales Computation
**

Years 2005 2006 Gross Profit 135,201,515 137,641,270 Net Sales 852,372,071 913,370,379 Gross Profit Margin 15.86% 15.07%

Analysis

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If u want to download this project then call me at 03458014643 or send me a text

This ratio tells us about the percentage of gross profit from the sales this also shows the profitability of the firm after the cost of sales the difference between the gross profit margin and the sale is the percentage of the cost of sales. in case of the Kohinoor sugar the gross profit margin is good. Operating Profit Margin The operating profit margin is calculated by dividing operating profit by sales. This the percentage of sales which is the operating profit as percentage of sales. The difference of this percentage from 100% gives the percentage of cost of goods sold and operating expenses incurred. Formula The formula of ratio is: Operating profit margin = Operating profit / net sales

Computation

Years 2005 2006 Operating Profit 92,832,293 86,517,309 Net Sales 852,372,071 913,370,379 Operating Profit Margin 10.89% 9.47%

Analysis This ratio tells us about the operating profitability of the company. This ratio gives the percentage of sales that is the operating profit. The difference between the operating margin and the gross profit

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If u want to download this project then call me at 03458014643 or send me a text

margin is the percentage of the operating expenses. In Kohinoor sugar the operating profit is negative in second year. Return on total assets

The ratio of net income to total assets measures the return on total assets. This shows that how much of the profit is due to assets or how much is the profit on assets. It should be high in manufacturing oriented firm. The Kohinoor Sugar Mills Limited return on assets Formula The formula of ratio is: Return on asset = net profit after taxes / Total assets Computation

Years 2005 2006 Net Profit After Taxes 54,081,708 8,141,611 Total Assets 911,218,836 1,307,811,430 Return on Total Assets 5.94% 0.62%

Analysis

This ratio tells us about the return that would the total capital employed generate in the firm. The total capital includes the all form of debt and equity. This ratio gives us the return on the total capital employed. In case of the Kohinoor sugar in early year it generate the negative return but by time the return become positive.

**Basic earning power
**

The basic earning power ratio is calculated by dividing earning before interest and taxes this ratio shows the raw earning power of the firm assets before the influence of taxes and leverages. If u want to download this project then call me at 03458014643 or send me a text 14

If u want to download this project then call me at 03458014643 or send me a text The Kohinoor Sugar Mills Limited basic earning power is: Formula The formula of ratio is: Basic earning Power = EBIT / Total assets Computation

Years 2005 2006 EBIT/Operating Profit 92,832,293 86,517,309 Total Assets 911,218,836 1,307,811,430 Basic Earning Power 10.19% 6.62%

The basic earning power ratio is calculated by dividing earning before interest and taxes this ratio shows the raw earning power of the firm assets before the influence of taxes and leverages. The Kohinoor Sugar Mills Limited basic earning power is: Formula The formula of ratio is: Basic earning Power = EBIT / Total assets Computation

Years 2005 2006 EBIT/Operating Profit 92,832,293 86,517,309 Total Assets 911,218,836 1,307,811,430 Basic Earning Power 10.19% 6.62%

Efficiency Ratio or turnover Ratio That ratio which show how efficiently a company is using its assets following are some efficiency Ratio. • Receivable turnover • Payable turnover • Inventory Turnover Receivable turnover

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If u want to download this project then call me at 03458014643 or send me a text The receivable turnover is defined as the sales divided by receivables. This ratio shows how many times in a year the receivable received by the customer it shows how much the firm is efficient tin collecting the account receivables. The Kohinoor receivable turnover is: Formula The formula of receivable turnover is: Receivable Turnover = Sales / Receivables Computation

Years 2005 2006 Sales 852,372,071 913,370,379 Receivables 39,003,866 44,906,524 Receivable Turnover (Times) 22 20

**Average collection period
**

It is also called average collection period it is calculated by dividing the number of days in year by receivable turnover. This ratio shows after sales how many days after which the account receivable are received. The Kohinoor Sugar Mills Limited days sales outstanding are:

**Formula The formula of receivable turnover is: Receivable Turnover in days = 365 / Receivables turnover Computation
**

Years 2005 2006 Days in Year 360 360 Receivable Turnover 22 20 Receivable Turnover (Days) 16 18

**Inventory turnover ratio
**

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If u want to download this project then call me at 03458014643 or send me a text The inventory turnover ratio is defined as CGS divided by the inventories. This ratio shows that in a year how many times the inventory turn in to the sales. This shows that how much firm is efficient in managing and recycling inventory in a year either it is a lot of inventory without circulating or not. The Kohinoor Sugar Mills Limited the inventory turnover ratio is: Formula The formula of inventory turnover is: Inventory Turnover = cost of good sold / inventory Computation

Years 2005 2006 Cost of Sales 717,170,556 775,729,109 Inventories 157,966,407 230,242,065 Inventory Turnover (times) 4.54 3.37

**Inventory turnover days
**

The inventory turnover days is defined as the number of days in year divided by inventory turnover. This shows that after how many days the inventory is converted in to cash or sales. The Kohinoor Sugar Mills Limited inventory turnover in days is:

**Formula The formula of inventory turnover in days is: Inventory Turnover in days = 365 / inventory turnover Computation
**

Years 2005 2006 Days in Year 360 360 Inventory Turnover 4.54 3.37 Inventory Turnover (Days) 79 107

If u want to download this project then call me at 03458014643 or send me a text 17

If u want to download this project then call me at 03458014643 or send me a text The payable turnover means in a year how many time they pay the credits of their purchases which means after credit purchases how many times a year they pay the credits. The Kohinoor Sugar Mills Limited payable turnover is: Formula The formula of ratio is: Payable Turnover = Purchases / Account payable Computation

Years 2005 2006 Cost of Sales 717,170,556 775,729,109 Account Payable 39,612,353 39,916,147 Payable Turnover 18.10 19.43

**Average collection period
**

The payable turnover in days means after credit purchases how many days after which the credit are paid this shows the firm ability to manage and release debts. It should be greater then the receivable turnover in days. The Kohinoor Sugar Mills Limited payable turnover in days is:

**Formula The formula of ratio is: Payable Turnover in days = 365 / payable turnover Computation
**

Years 2005 2006 Days in Year 360 360 Payable Turnover 17.97 10.58 Payable Turnover (Days) 20 34

If u want to download this project then call me at 03458014643 or send me a text 18

If u want to download this project then call me at 03458014643 or send me a text

If u want to download this project then call me at 03458014643 or send me a text 19

National University of Modern Languages
Sector H-9 ISLAMABAD
Department of Management Science
Afs Project
Kohinoor Sugar mill ltd
5/12/11
SUBMITTED TO: Madam iram qazi
SUBMITTED BY...

National University of Modern Languages

Sector H-9 ISLAMABAD

Department of Management Science

Afs Project

Kohinoor Sugar mill ltd

5/12/11

SUBMITTED TO: Madam iram qazi

SUBMITTED BY: Adeel Azher

Kohinoor Sugar Mills Limited

Introduction

Kohinoor Sugar Mills Limited is one of the first Sugar Factories established in Pakistan since the country’s independence. A Saigol Family project, KSML is a public limited company, listed on the Karachi and Lahore Stock Exchanges. Kohinoor Sugar Mills is located in Jauharabad, District Khushab in the Punjab province. The plant has the capacity of crushing over 5,000 Metric Tons of Cane per Day (TCD). The Factory produces over 40,000 tons of sugar every year.

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

Ratio Analysis

Now we shall find out the ratios of the Kohinoor Sugar Mills Limited to check the condition of the firm. We will find out the the performance of company is bad.

Cash Ratio

The cash ratio gives the information about the coverage of the current liabilities through cash which is the liquid. It should be 1: 1 as this is considered as satisfactory. The liquidity is calculated by adding cash and marketable securities.

The Cash Ratio of Kohinoor Sugar Mills Limited is:

Formula

The formula of working capital is:

Cash Ratio = (Cash + Marketable Securities) / Current liabilities

Computation

Years Cash + MKT Securities Current Liabilities Cash Rati

Sector H-9 ISLAMABAD

Department of Management Science

Afs Project

Kohinoor Sugar mill ltd

5/12/11

SUBMITTED TO: Madam iram qazi

SUBMITTED BY: Adeel Azher

Kohinoor Sugar Mills Limited

Introduction

Kohinoor Sugar Mills Limited is one of the first Sugar Factories established in Pakistan since the country’s independence. A Saigol Family project, KSML is a public limited company, listed on the Karachi and Lahore Stock Exchanges. Kohinoor Sugar Mills is located in Jauharabad, District Khushab in the Punjab province. The plant has the capacity of crushing over 5,000 Metric Tons of Cane per Day (TCD). The Factory produces over 40,000 tons of sugar every year.

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

Ratio Analysis

Now we shall find out the ratios of the Kohinoor Sugar Mills Limited to check the condition of the firm. We will find out the the performance of company is bad.

Cash Ratio

The cash ratio gives the information about the coverage of the current liabilities through cash which is the liquid. It should be 1: 1 as this is considered as satisfactory. The liquidity is calculated by adding cash and marketable securities.

The Cash Ratio of Kohinoor Sugar Mills Limited is:

Formula

The formula of working capital is:

Cash Ratio = (Cash + Marketable Securities) / Current liabilities

Computation

Years Cash + MKT Securities Current Liabilities Cash Rati

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