Internship Report by Wasim Ghaffar

University of Agriculture, Faisalabad.
Page 1
An internship report on
NATIONAL BANK OF PAKISTAN
Page 2
TOPIC:
FINANCIAL STATEMENT ANALYSIS OF COMMERCIAL & SMEs CLIENTS.
SUBMITTED BY:
WASIM GHAFFAR
REG. No.
2011-ag-1492
DEGREE:
MBA (3.5 YEARS)
SPECIALIZATION:
BANKING & FINANCE
DEPARTMENT OF BUSINESS ADMINISTRATION AND SCIENCES

UNIVERSITY OF AGRICULTUR, FAISALABAD
OCTOBER, 2014.
Page 3
Dedication
At first dedicating this work to Almighty ALLAH, without his mercy and sympathy I was not
able to accomplish this work Almighty ALLAH gave me power and confidence to done my
internship and also HOLY PROPHET HAZARAT MUHAMMAD (Peace be upon him) who is a
light for humanity. I also dedicate this work to my lovely parents and also dedicating this work
to our honourable instructor of Finance, branch manager & operational manager who help me a
lot to do my work accurately and guide me in my every difficulty.
Page 4
Acknowledgement:
All praise to Allah, the most merciful, kind and beneficent, and the source of all knowledge,
wisdom within and beyond my comprehension. He is the only God, which can help us in
every field of life. All respect and possible tributes goes to my Holy Prophet Mohammad
(SAW), who is forever guidance and knowledge for all human beings on this earth.
Heart full thanks for Madam SAHAR MUNIR Assistance professor of Finance in IBMS in
UAF, for special arrangement of our internship in NBP. Without her co-operation it was not
possible for me to complete my Internship &MBA Program.
I am very grateful to Mr MASOOD BUTT (Branch Manager of NBP, Jinnah Colony,
Faisalabad) . He guided and helped me through timely suggestions, valuable advices and
specially the sympathetic attitude, which always inspired me for hard work.
I am proud to say that I am very grateful to my family whose kind prayers and cooperation
helped us at every step of my work. Special thanks go to my parents for their cooperation for
the sake of my knowledge.
I am really very thankful to Mr UMAR ASGHAR Operational Manager & Mr Usman
Arshad Credit officer of National Bank Jinnah colony Branch for their cooperative attitude
during the completion of my project work. He helped and supported me during gathering and
analysing information. I am really very thankful to Mr Umair Abbasi for his cooperative
attitude during the completion of my project work. He helped and supported us during
gathering and analysing information.
Page 5
Executive summary:
To interrupt my skills and educational knowledge of Finance I done my internship in
National Bank of Pakistan Jinnah Colony Branch Faisalabad, and to know how I will work
In financial institutions and among various types of people have different attitude.
The objective of this Internship was to analysis the Financial Statement Analysis of
Commercial and SMEs Clients and to find out problems regarding the theoretical concepts
with practical experience working in an organization during the internship and study the
system of National Bank of Pakistan.
This report is based on internship in National Bank of Pakistan Jinnah Colony Branch. It is a
famous and reputed bank of Pakistan. National Bank of Pakistan maintains first position in
banking sector in Pakistan.
This report contains the Financial Statements Analysis of Small & medium Enterprises, and
corporate. I have performed the Financial Statement Analysis 2 commercial SME (Asif
Trader, Asia Hoisary) and 2 SMEs clients thats way I have chosen Shaki Rice Mill &
Shaheen Cool Store, I have performed the different kind of ratios like Liquid Ratio,
Profitability Ratio, Activity Ratio& Debt Ratio.
In Liquidity Analysis I performed the Current Ratio, Cash Ratio, Quick Ratio, and Working
Capital Ratio. In Profitability Analysis I performed the Goss profit Margin, Operating Profit
Margin, Net profit margin, Return on Assets, Return on Equity and Sales to fixed Assets.
In Activity Ratios, I performed the Debtor Turnover Ratio, Debtor Turnover in Days, Stock
Turnover Ratio, and Stock Turnover in Days, Operating Cycle & Working Capital turnover
Ratio.
In Solvency Analysis I performed the Debt Ratio and Debit to Equity Ratio.
I have also showed the Results of all Ratios in charts and also given the Interpretation of all
charts. At the end of this report I wrote the conclusion & references related to data for that
report.
Page 6
TABLE OF CONTENTS:
Lesson No.
Title / Topic
Page No.
1.
Title page
a.
Name of the organization
b.
Name of the Internee, Student ID
c.
Submission date of the internship report
d.
Name of the University
2.
Dedication
3.
Acknowledgement
Executive summary
Table of contents
Brief history National Bank of Pakistan
7.
Brief history National Bank Jinnah Colony Branch.
10
8.
Introduction of Asif Trader
11
a.
Balance sheet of Asif Trader
11
b.
Income statement of Asif Trader
12
c.
Liquidity Analysis (Current, Liquid, Cash, Working Capital)
13
d.
Profitability Analysis (Goss profit Margin, Operating Profit Margin,

Net profit margin, Return on Assets, Return on Equity and Sales to
fixed Assets)
16
e.
21
f.
Activity Analysis (Debtor Turnover , Debtor Turnover in Days,

Stock Turnover , Stock Turnover in Days, Operating Cycle &
Working Capital turnover ).
Solvency Analysis (Debt and Debit to Equity Ratio).
9.
Introduction of Yousaf Asia Hosiery
27
a.
Balance sheet of Yousaf Asia Hoisery
27
b.
Income statement of Yousaf Asia Hosiery
28
c.
Liquidity analysis (Current, Liquid, Cash, Working Capital)
29
d.
Profitability analysis (Goss profit Margin, Operating Profit Margin,

31
7-8
25
Page 7
fixed Assets)
e
Activity analysis (Debtor Turnover , Debtor Turnover in Days,

Stock Turnover , Stock Turnover in Days, Operating Cycle &
Working Capital turnover).
Solvency analysis (Debt and Debit to Equity Ratio).
36
10
Introduction of Shaheen Cold Store
43
Balance sheet of Shaheen Cold Store
43
Income statement of Shaheen Cold Store
44
c.
45

fixed Assets)
47
Activity analysis (Debtor Turnover Ratio, Debtor Turnover in Days, 53

Stock Turnover Ratio, Stock Turnover in Days, Operating Cycle &
Working Capital turnover Ratio).
Solvency analysis (Debt Ratio and Debit to Equity Ratio.
58
41
11
Introduction of Sukhi Sultan Rice Mill
60
Balance sheet of Sukhi Sultan Rice Mill
60
Income statement of Sukhi Sutan Rice Mill
61
62

fixed Assets)
64
Activity analysis Debtor Turnover Ratio, Debtor Turnover in Days,

Stock Turnover Ratio, Stock Turnover in Days, Operating Cycle &
Working Capital turnover Ratio.
Solvency analysis (Debt Ratio and Debit to Equity Ratio.
70
12
Conclusion
76
13
References
76
73
Page 8
BRIEF HOSTORY OF NATIONAL BANK:

The National Bank of Pakistan was established as a semi-public commercial bank on November 29,
1949. NBP transacts all types of banking. The National Bank of Pakistan is also fully authorized to act
as the agent of the State Bank of Pakistan (SBP) where it has no offices. The head office of the bank
is situated at Karachi. Since the formation of bank in 1949, it has been a commercial bank of the
country. The bank is also acting as sole agent to the Government for trade wide the other countries
and for the Govt. Treasury with SBP.
It has office at all the major financial centres of the including at pride places like 100 wall streets,
New York and United National Plaza. Its international net-work includes branches at Bahrain, Cairo,
Paris, Frankfurt, Hong Kong, London, Washington D.C. and offshore banking unit at export
processing zone Karachi and representative offices functioning at Beijing and Seoul.
The bank provides all the banking facilities to the peoples of Pakistan through it are over 1287
branches operating even at Northern Areas. NBP is the pioneer to introduce and implement surprised
Ruler Credit Program with easy terms and conditions. This program was so beneficial to help the poor
farmers of the nation. The NBP also took played the first step in introduction of Profit & Loss Sharing
System (PLS) which helps the economy towards Islamization.
NBP has diversified its business portfolio and is today a major lead player in the debt equity market,
corporate investment banking, retail and consumer banking, agricultural financing, treasury services
and is showing growing interest in promoting and developing the country's small and medium
enterprises and at the same time fulfilling its social responsibilities.
Vision:
To be recognized as a leader and a brand synonymous with trust, highest standards of service quality,
international best practices and social responsibility
Mission:
NBP will aspire to the values that make NBP truly the Nations Bank, by:
Institutionalizing a merit and performance culture

Creating a distinctive brand identity by providing the highest standards of services.
Adopting the best international management practices.
Maximizing stakeholders value.
Discharging our responsibility as a good corporate citizen of Pakistan and in countries where
we operate.
Page 9
BREIF HISTORY OF NATIONAL BANK JINNAH COLONY BRANCH:

National Bank of Pakistan, Jinnah Colony Branch, Faisalabad is located at main Ideal Bakery
Road Jinnah Colony Faisalabad. State Bank of Pakistan issued the Bank to open its Branch at
the said business location in 1989. The Branch consists of three main departments as follows:
1) Operation Department
2) Cash Department
3) Credit Department
All the departments are monitored by the Branch Manager, Mr Masood Butt (AVP). 12
employees are working in this branch. Functions of three departments are described
hereunder:
1) Operation Department:
Operational Department is monitored by the Operational Manager of the Branch, Mr Umar
Asghar Qureshi (AVP).
The tasks which are performing in operation department are clearing, pensions, transfer of
payments, Payment Order, Demand Draft. These all tasks are performed by Mam. Somera
Saleem.
2) Cash Department:
Cash Department is controlled by Mr Delawer (SHC/OGII). He is head cashier in this branch

along with two other cashiers. They are performing Cash related tasks like Cash Receipt &
Payments, Chelan submission, Property Tax, Income Tax, Utility Bills, Passport Fee etc. Mr
Umair Abbasi (OG.II), Mrs Sumera Saleem (OG.III) & Mr Nadeem Badsha (OG.II) are
performing their duties in General banking department like passing of cheques, keying of
voucher in Banks software and account opening procedures.
3) Credit Department:
Credit Department is one of the main departments in this branch. Most of the
income/business is routed through the credit department. This department is managed by Mr
Usman Arshad (OG.II). He is credit officer of the branch .The tasks which are performed by
Credit officer are processing and controlling, monitoring and management of the loans &
advances. The department generates profit for the branch & take the safety measures for the
protection of bad debts.
Mr Usman is also deals with following tasks:
Small & Medium Enterprise Lending

Commercial and Corporate Lending
Agriculture Finance & Consumer Finance
Page 10
MS ASIF TRADER
INTRODUCTION:
Asif Trader located at main road Sursayyed Town, Faisalabad. This business is started by Mr Asif in
1989. The main product which is made by Asif Trader is tin Packs for different beverages companies.
Asif Trader is also making the tin Box for Banaspati Gee.
Asif Traders
Balance Sheet
As On June 30, 2014-12
2014
Rupees
2013
Rupees
2012
Rupees
Share
Capital
2014
Rupees
3,665,361
3,063,759
2,549,475
Add Profit
999,186
901,602
814,284
4,664,547
3,965,361
3,363,759
Less
Drawings
300,000
300,000
300,000
Net Capital
4,364,547
3,665,361
3,063,759
Current
Liabilities
2012
Rupees
29,216
32,462
36,069
Stock & Store
3,312,230
2,783,387
2,094,347
Fixed Assets
Capital
2013
Rupees
Current
Assets
Creditors
112,224
109,074
106,012
Trade
Debtors
1,392,662
1,215,320
1,033,504
Liabilities
638,454
339,081
339,081
Advances &
Payment
99,476
86,809
73,822
Accrued
Expenses
7,652
8,012
8,390
Cash & Bank

Balance
289,293
3,550
279,500
758,330
456,167
453,483
5,093,661
4,089,066
3,481,173
5,122,877
4,121,528
3,517,242
5,122,877
4,121,528
3,517,242
Total
Liabilities
Total Assets
Page 11
Asif Traders
Income Statement
For The Year Ended June 30, 2014 -12
2014
2013
2012
Rupees
Rupees
Rupees
Sales
7,233,468
6,563,350
5,955,312
Less Cost Of Goods Sold
5,795,454
5,258,556
4,771,396
Gross Profit
1,438,013
1,304,794
1,183,916
Administrative
245,938
223,154
202,481
Selling
131,758
119,551
108,476
377,696
342,705
310,957
1,060,318
962,089
872,959
47,035
47,035
1,013,283
915,054
3,246
3,607
1,010,037
911,447
10,850
9,845
999,186
901,602
Operating Expenses
Operating Profit
Financial Charges
Depreciation
Profit / (Loss) Before Taxation
Provision for Taxation
Net Profit(Loss)
45,735
827,224
4,008
823,217
8,933
814,284
Page 12
ANANLYSIS OF ASIF TRADER (Rs. 000)
LIQUIDITY ANALYSIS:
CURRENT RATIO
= Current Assets/ Current liabilities
2014
= 5093/758
= 7:1
2013
= 4089/456
= 9:1
Current Assets Ratio

10
9
8
7
6
5
4
3
2
1
0
Current Assets Ratio
2013
2014
Interpretation:
Current ratio indicate the amount of current assets available for repayment of current liabilities that s
way the current ratio of Asif Trader is 7 : 1 in 2014 and 9 : 1 in 2013 . It is not a good situation it will
be good if it is 2 : 1 in every year. The current ratio of Asif trader is very high. It means the current
assets are lying idle.
QUICK RATIO
(Current assets- Prepaid - Inventory) / Current Liabilities
2014 =
(5093-99-3312)/758
2:1
2013 =
(4089-86-2783)/456
2.6:1
Page 13
Quick Ratio
3
2.5
2
1.5
Quick Ratio
1
0.5
0
2013
2014
Interpretation:
Quick ratio is the measure of instant debt paying ability of the business. In the case of Asif Trader the
quick ratio is 2.6 in 2013 and 2 in 2014. It is positive trend. This ratio shows that the receivable of
Asif trader are very low or less. And this ratio also shows that Asif Trader has good debt paying
ability.
CASH RATIO
Cash / Current Liabilities
2014
289 /758
= 0.3:1
2013
3 /456
= 0.006:1
Cash Ratio
0.35
0.3
0.25
0.2
Cash Ratio
0.15
0.1
0.05
0
2013
2014
Page 14
Interpretation:
The cash ratio indicates the immediate liquidity of the firm. It indicates the firm term solvency
position. High ratio indicates that the firm is not using its cash to its best advantage & low ratio shows
that the firm is not using its cash to its best advantage. In the case of Asif Trader, the cash ratio is 0.3
in 2014 & 0.006 in 2013. Its means that the cash ratio is high in 2014 than in 2013. So the firm is not
using its cash to its best advantage in 2014 than 2013.
= Current Assets Current Liabilities
WORKING CAPITAL RATIO

2014
5093
458
4635
2013
4089
456
3633
Working Capital Ratio

5000
4500
4000
3500
3000
2500
2000
1500
1000
500
0
2013
2014
Interpretation:
Working capital ratio shows the short term solvency of the business in the case of Asif Trader the
working capital is increasing from 3633 in 2013 to 4635 in 2014. It is a good ratio it means that Asif
Trader the less chances of short term solvency.
`
Page 15
PROFITABILITY ANALYSIS:
GROSS PROFIT MARGIN
(Gross profit / Net sale) * 100
2014
(1438 / 7233) * 100
= 19.8%
2013
(1304 / 6363) * 100
= 20%
Gross Profit Margin

20.05
20
19.95
19.9
Gross Profit Margin
19.85
19.8
19.75
19.7
2013
2014
Interpretation:
Gross Profit Margin shows that what is the profit is earned by the business after deducting the cost
incurred on the production of goods and Expenses incurred on the finished goods? It has a great
impact on sale price and profit. In the case of Asia Trader the Gross profit is decreasing from 20% in
2013 to 19.98% in 2014. it is negative trend. It is decreased due to increase in cost of good.
OPERATING PROFIT MARGIN =
(Operating Profit / Net sale) * 100
2014 =
(1060 / 7233) * 100
= 14.6%
2013 =
(962 / 6563) * 100
= 14.6%
Page 16
Operating Profit Ratio

16
14
12
10
8
6
4
2
0
2013
2014
Interpretation:
Operating Profit margin measures the profit after deducting the Operating cost incurred on the
production of goods. In the case of Asif Trader the Operating Profit Margin is moderate. It is
same14.6% in 2013 to 2014.
NET PROFIT MARGIN
(Net Profit / Net sale) * 100
2014 =
(999 / 7233) * 100 = 13%
2013 =
(901 /6563) * 100
= 13.7
Net Profit Margin

13.8
13.6
13.4
13.2
Net Profit Margin
13
12.8
12.6
2013
2014
Page 17
Interpretation:
Net Profit Margin is measure the net income in rupees is generated by each rupee of Sale. But in the
case of Asif trader the Net Profit Margin is decreased from 13.7%in 2013 to 13%in 2014 due to
increase in Cost of Goods & decreased in Gross Profit Margin.
TOTAL ASSETS TURNOVER RATIO = Net sale / Average total Assets

2014 = 7233 / 4621 = 1.5 times
2013 = 6563/ 3819
= 1.7 times
Average Total Assets = (Opening Assets + Closing Assets) / 2

2014
(4121 + 5122) /2 =
1621
2013
(3517 + 4121) / 2 =
3819
Total Assets Turnover Ratio

1.75
1.7
1.65
1.6
Total Assets Turnover
Ratio
1.55
1.5
1.45
1.4
2013
2014
Interpretation:
Total Assets turnover ratio measures the activity of assets and the ability of assets of the firm to
generate sale through the use of assets. In the Case of Asif Trader the Total Assets turnover ratio is
decreasing from 1.5 Times in 2013 to 1.7 time in 2014 . it is a moderate trend. It means that the use of
assets to generate sale is decreased in 2014 than 2013.
RETURN ON ASSETS
EBIT/ Average Total Assets
2014
1010/ 1421
0.71 times
2013
911/ 3819
0.23 times
Page 18
Return on Equity
0.8
0.7
0.6
0.5
0.4
Return on Equity
0.3
0.2
0.1
0
2013
2014
Interpretation:
Return on Assets measures the firms ability to utilization its assets to create profit .but in the case of
Asif Trader the Return on Assets is increasing from 0.2 in 2013 to 0.7 in 2014. It is good trend .it
means the assets of the firm has good ability to increase the profit
SALES TO FIXED ASSETS =
Net Sale / Average Fixed Assets
2014
7233 / 30.5
237.7 times
2013
6563/ 34
193
times
Average Fixed Assets = (Opening Assets + Closing Assets) /2

2014
= (32+29)/2
30.5
2013
= (36+ 32)/2
34
Sales to Fixed Assets

250
200
150
100
50
0
2013
2014
Page 19
Interpretation:
Sale to fixed Assets Ratio measures the ability of the firm fixed assets to increase the sale of the firm.
In the case of Asif Trader the Sale to Fixed Assets ratio is Increased from 193 times in 2013 to237
time in 2014. It means that the Asif trader firm Fixed assets having a good ability to increase the sale
in 2014 than 2013.
RETURN ON EQUITY =
EBIT / Average Total Equity
2014
1010/ 3364
= 36 %
2013
911/ 2806
= 32 %
Average Total Equity
(Opening Equity + Closing Equity) / 2
2014
(3063+ 3665) / 2 = 3364
2013
(2549 +3063) /2
= 2806
Return on Equity
0.37
0.36
0.35
0.34
Return on Equity
0.33
0.32
0.31
0.3
2013
2014
Interpretation:
The Return on Equity measures the return on stock of the shareholders of firm. In the case of Asif
Trader the return on equity is increased from 32% in 2013 to 36% in 2014.it means that the Asif
Trader firm earned 4% more profit in 2014 than 2013.
Page 20
ACTIVITY ANAYSIS:
STOCK TURNOVER RATIO = Cost of goods sold / Average Stock

2014
= 5795/3047
1.9 times
2013
= 4959/2439
2 times
CGS
2014
= 7233- 1438
2013
= 6563 1304 = 4959
Average Stocks
Sale Gross profit

= 5795
(Opening stock + Closing Stock) /2
2014
= (3312 + 2783)/ 2
3047
2013
= (2094 + 2783) / 2
243
Stock Turn over Ratio

2.02
2
1.98
1.96
1.94
1.92
1.9
1.88
1.86
1.84
2013
2014
Interpretation:
Inventory Turnover Ratio evaluate the efficiency with which a firm is able to manage its inventory .in
the case of asif Tarder the inventory turnover ratio decreasing from 2 time in 2013 to 1.9 time in 2014
.it is moderate situation.
INVENTORY TURNOVER IN DAYS = Days of Year/ Inventory turn over ratio
2014 = 365/ 1.9
182 days
Page 21
2013 = 365 / 2
183 days
Inventory Turn over in Days

183
182.8
182.6
182.4
Inventory Turn over in

Days
182.2
182
181.8
181.6
181.4
2013
2014
Interpretation:
Inventory Turnover in days signifies the number of days on an average the inventory is disposed off
during the year.in The Case of Asif Trader the time is decreasing in 183 days in 2013 to 182 days in
2014 .it shows the inefficency of the firm.
DEBTORS TURNOVER RATIO
Net Credit Sale / Average Debtors
2014
7233/ 1303
5.5 times
2013
6563/ 1124
5.8 time
Average Debtors
2014
=
=
(Opening Debtors + Closing Debtors) /2

(1215 + 1392) /2 = 1303
Page 22
2013
(1033+ 1215) / 2
= 1124
Debtor Turnover Ratio

5.9
5.8
5.7
5.6
5.5
5.4
5.3
2013
2014
Interpretation:
Debtor Turnover Ratio indicates the speed with which a company collect its debts from debtors. In the
case of Asif Trader the Debtor Turnover Ratio is increasing from 1124 times in 2013 to 1303 times in
2014.it mean in 2014 the firm collect its debt promptly than in 2013.
DEBTORS TURNOVER IN DAYS
Days of Year / Debtors turn over ratio
2014 =
365/ 5.5
65 days
2013 =
365/ 5.8
63 days
Debtors Turnover in Days

65.5
65
64.5
64
Debtors Turnover in
Days
63.5
63
62.5
62
2013
2014
Page 23
Interpretation:
Debtors Turnover in days signifies the number of days in which the debt us collected by the firm from
debtors .in the case of Asif Traders the term of collection is increasing from 63 days in 2013 to 65
days in 2014.it is a good situation & best for the company.
OPERATING CYCLE =
Inventory turn over in days + Debtors Turnover in Days
2014 =
182 days + 65 Days
247 days
2013 =
183 days + 63 days
246 days
Operating Cycle
247
246.8
246.6
246.4
Operating Cycle
246.2
246
245.8
245.6
245.4
2013
2014
Interpretation:
Operating Cycle show that how much time is required I by the firm in which the inventory converted
into cash ? in the case of Asif trader the Operating cycleis increasing from246 days in 2013 to 247
daysin 2014 . it is unfaverable for the firm. Because the time of operating is more in 2014 than 2013.
WORKING CAPITAL TURNOVER RATIO = Cost of goods sold / Average Working Capital
2014 =
5795/4134
1.4 times
2013 =
4959/ 3330 =
1.4 times
Average Working Capital = (Opening working Capital+ Closing Working Capital)/ 2

2014 =
(3633+4635) / 2
= 413
2013 =
(3028+ 3633) / 2
= 3330
Page 24
Working Capital Turnover Ratio

16
14
12
10
8
Working Capital
Turnover Ratio
6
4
2
0
2013
2014
Interpretation:
Working Capital Turnover Ratio measures the number of times the working capital is turnover OR the
efficiency at which the working capital is being used by the firm in a year .In the case of Asif Traders
the working capital ratio is increase from 3033 times in 2013 to 4134 times in 2014 . it is favourable
for the firm. It means that working capital is efficiently used by the firm in 2014 than in 2013.
.
SOLVENCY ANALYSIS:
DEBT RATIO
Total Liabilities /Total Assets
2014
758 / 5122 =
15%
2013
456/4089
11%
Debt Ratio
16
14
12
10
8
Debt Ratio
6
4
2
0
2013
2014
Page 25
Interpretation:
The Debt Ratio indicates the firm long term debt-paying ability. It also indicates the percentage of
assets financed by creditors. Low percentage of this ratio is best for the company. In the case of Asif
Trader the Debt Ratio is 11% in 2013 and in 15% in 2014. It means that in 2013 the cash ratio is low
than 2014 which is best for the firm. This shows that the assets are less financed by creditors in 2013
than 2014.
DEBT TO EQUITY RATIO
Total Liabilities/ Shareholder Equity
2014
758 /3665
20%
2013
456 / 3063
15%
Debt to Equity Ratio

25
20
15
10
5
0
2013
2014
Interpretation:
Debt to Equity Ratio measures that how much creditors are protected in case of firm insolvency? Low
ratio is best for the company. In the case of Asif Traders the ratio in high from 15% in 2013 to 20% in
2014.It means that creditors are less protected in 2014 than in 2013.
Page 26
Yousaf Asia Hosiery
INTRODUCTION:
Yousaf Asia Hosiery located at main Jinnah colony gate road, Faisalabad. Mr Yousaf is the owner of
this business. He was started that business in 1982. Yousaf Asia Hosiery Manufactures the
Underwear, Undershirts, and Socks. This firm sale that products in local market as well as export
these products at small level means one or two container per month.
M/S Yousaf Asia Hoisery
Balance Sheet
2014
Rupees
2013
Rupees
Share
Capital
Capital
Add
Profit
Less
Drawings
As On June 30, 2014.

2012
Rupees
Fixed
Assets
22,832,47
6
21,696,42
3
20,042,36
2
3,951,257
3,536,053
3,154,060
26,783,73
3
25,232,47
6
23,196,42
3
2,600,000
2,400,000
1,500,000
24,183,73
3
22,832,47
6
21,696,42
3
Current
Liabilitie
s
Total
liabilities
2013
Rupees
2012
Rupees
4,869,373
4,965,970
5,073,300
14,447,48
5
13,051,02
6
11,789,54
4
7,106,812
7,106,812
6,754,69
507,629
507,629
482,455
606,301
526,771
914,292
22,668,22
.
21,192,23
.
19,940,66
.
27,537,60
26,158,20
25,013,96
Current
Asset
Creditors
Liabilities
Short
Term
Loans
Accrued
Expenses
Total
C.L.
2014
Rupees
1,267,718
1,232,134
1,197,549
1,928,071
1,928,071
1,946,662
158,078
165,527
173,327
3,353,867
.
3,325,732
.
3,317,538
.
27,537,60
26,158,20
25,013,96
Stock &
Store
Trade
Debtors
Advance
s
Cash &
Bank
Total
C.A.
Total
Assets
Page 27
Yousaf Asia Hoisery

Income Statement
For The Year Ended June 30, 2014 -12.
2014
2013
2012
Rupees
Rupees
Rupees
Sales
71,281,402
64,677,798
58,685,962
Less Cost of Goods Sold
62,691,993
56,884,124
51,614,303
Gross Profit
8,589,409
7,793,675
7,071,658
Administrative
2,138,442
1,940,334
1,760,579
Selling
1,532,550
1,390,573
1,261,748
3,670,992
3,330,907
3,022,327
4,918,417
4,462,768
4,049,331
318,132
318,132
321,199
4,600,285
4,144,636
3,728,132
96,597
107,330
119,256
4,503,688
4,037,306
3,608,877
552,431
501,253
454,816
3,951,257
3,536,053
3,154,060
Operating Expenses
Operating Profit
Financial Charges
Depreciation

Net Profit (Loss)
Page 28
Yousaf Asia Hosiery (Rs 000)
LIQUIDITY ANALYSIS:
CURRENT RATIO
= Current Assets/ Current liabilities
2014
22668/3353
= 6.7:1
2013
21192/3325
= 6.3:1
Current Ratio
6.8
6.7
6.6
6.5
Current Ratio
6.4
6.3
6.2
6.1
2013
2014
Interpretation:
way the current ratio of Yousaf Asia Hosiery is 6 : 7 in 2014 and 6 : 3 in 2013 . it is a moderate
situation it will be good if it is 2 : 1 in every year.
QUICK RATIO
(Current assets - Prepaid - Inventory)/Current Liabilities
2014
(22668-507-14447)/3353
2.3:1
2013
(21192-507-13051)/3325
2.2:1
Page 29
Quick Ratio
2.32
2.3
2.28
2.26
2.24
Quick Ratio
2.22
2.2
2.18
2.16
2.14
2013
2014
Interpretation:
Quick ratio is the measure of instant debt paying ability of the business. In the case of Yousaf Asia
Hosiery the quick ratio is 2.2 in 2013 and 2.3 in 2014. It is positive trend. This ratio also shows that
Yousaf Asia Hosiery has good debt paying ability.
CASH RATIO
2014
606 /3353
0.1:1
2013
526/3325
0.1:1
Cash Ratio
0.12
0.1
0.08
0.06
Cash Ratio
0.04
0.02
0
2013
2014
Interpretation:
Page 30
that the firm is not using its cash to its best advantage. In the case of Yousaf Asia Hosiery, the cash
ratio is 0.1 in 2014 & 0.1 in 2013. Its means that the cash ratio has moderate trend in 2013 &2014.

2014
= 22668 - 3353
2013 = 21192 - 3325
19315
17867

19500
19000
18500
18000
17500
17000
2013
2014
Interpretation:
Working capital ratio shows the short term solvency of the business. In the case of Yousaf Asia
Hosiery the working from 18767 in 2013 and 19315 in 2014. It is a good ratio it means that Yousaf
Asia Hosiery has the less chances of short term solvency.
PROFITBILITY ANALYSIS:
GROSS PROFIT MARGIN
2014 =
(8589 / 71281) * 100
= 12%
2013 =
(4462 / 64677) * 100
= 6.8%
Page 31
Gross Profit Margin

14
12
10
8
Gross Profit Margin
6
4
2
0
2013
2014
Interpretation:
incurred on the production of goods and Expenses incurred on the finished goods? it has a great
impact on sale price and profit . In the case of Yousaf Asia Hosiery the Gross profit is decreasing
from 6.8% in 2013 to 12% in 2014. it is a positive trend. It is increase due to decrease in cost of good.
OPERATING PROFIT MARGIN
= (Operating Profit / Net sale) * 100
2014
= (4918 / 71281) * 100
= 6.8%
2013
= 12%
(7793 /64677) * 100

14
12
10
8
6
4
2
0
2013
2014
Page 32
Interpretation:
production of goods. In the case of Yousaf Asia Hosiery the Operating Profit Margin is decrease from
12% in 2013 to 6.8 % in 2014. This ratio is decrease due to increase in operating cost.
NET PROFIT MARGIN
2014 =
(3951 / 72281) * 100 =
5.5%
2013 =
(3536 /64677) * 100
5.4%
Net Profit Margin

5.52
5.5
5.48
5.46
5.44
Net Profit Margin
5.42
5.4
5.38
5.36
5.34
2013
2014
Interpretation:
case of Yousaf Asia Hosiery the Net Profit Margin is increased from 5.4% in 2013 to 5.5% in 2014
due to decreased in Cost of Goods & increased in Gross Profit Margin.
TOTAL ASSETS TURNOVER RATIO
= Net sale / Average total Assets
2014
= 71281 / 24364
2.9 times
2013
= 64677/ 25585
2.5 times
Average Total Assets =
(Opening Assets + Closing Assets) / 2
2014
(21192+ 27537) /2 =
24364
2013
(25013 + 26158) / 2 =
25585
Page 33

3
2.9
2.8
2.7
Ratio
2.6
2.5
2.4
2.3
2013
2014
Interpretation:
generate sale through the use of assets. In the Case of Yousaf Asia Hosiery .The Total Assets turnover
ratio is increasing from 2.5 Times in 2013 to 2.9 time in 2014. It is a positive trend. It means that the
use of assets to generate sale is increased in 2014 than 2013.
RETURN ON AEESTS
2014
4563/ 24364
0.18times
2013
4037/ 25585
0.15times
Return on Equity
0.185
0.18
0.175
0.17
0.165
0.16
0.155
0.15
0.145
0.14
0.135
Return on Equity
2013
2014
Page 34
Interpretation:
Yousaf Asia Hosiery the Return on Assets is increasing from 0.15 in 2013 to 0.18 in 2014. It is good
trend .it means the assets of the firm has good ability to increase the profit
SALE TO FIXED ASSETS
2014
71281 / 4917
14.47 times
2013
64677/ 5019
12.8 times
Average Fixed Assets
= (Opening Assets + Closing Assets) /2
2014
= (4965+4869)/ 2
4917
2013
(5073+ 4965)/ 2 =
5019
Sales to fixed Assets

15
14.5
14
13.5
Sales to fixed Assets
13
12.5
12
2013
2014
Interpretation:
In the case of Yousaf Asia Hosiery the Sale to Fixed Assets ratio is increased from 12.8 times in 2013
to 14.47 time in 2014. It means that the Yousaf Asia firm Fixed assets having a good ability to
increase the sale in 2014 than in 2013.
RETURN ON EQUITY
2014
=
=

4563/ 22264
0.2 times
Page 35
2013
4037/ 20869
0.19 times
2014
(22832 + 21696) / 2 =
2013
(20042 +21696) /2
22264
= 20869
Return on Equity
0.25
0.2
0.15
Return on Equity
0.1
0.05
0
2013
2014
Interpretation:
The Return on Equity measures the return on stock of the shareholders of firm. In the case of Yousaf
Asia Hosiery the return on equity is increased from 0.19% in 2013 to 0.2% in 2014.it means that the
Yousaf Asia firm earning the more profit in 2014 than 2013.
ACTIVITY ANALYSIS:
STOCK TURNOVER RATIO
Cost of goods sold / Average Stock
2014
62692/13749
4.5 times
2013
56874/12420
4.5 times
CGS
Sale Gross profit
2014
71281- 8589
2013
64667 - 7793
Average Stocks
= 62692
= 56874

Page 36
2014
= (13051 + 14447)/ 2
13749
2013
= (11789 + 13051) / 2
12420

5
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
2013
2014
Interpretation:
the case of Yousaf Asia Hoisary the inventory turnover ratio is same decreasing from 2013 to 2014 .it
is moderate situation.
INVENTORY TURNOVER IN DAYS
Days of Year/ Inventory turn over ratio
2014
= 365/ 5
73days
2013
= 365 / 5
73 days
Inventory Turnover In Days

80
70
60
50
40
30
20
10
0
Inventory Turnover In
Days
2013
2014
Page 37
Interpretation:
during the year.in The Case of Yousaf Asia Hoisary the Inventory Turnover in days are same in 2013
to 2014 .it shows that 27 days are require to dispoed off the inventory for 2013 & 2014.
DEBTORS TURNOVER RATIO
2014 =
71128/ 10078
7 times
2013 =
64677/ 6930
9 times
Average Debtors
2014 =
(13051 + 7106) /2
10078
2013 =
(6754+ 7106) / 2
6930

10
9
8
7
6
5
4
3
2
1
0
2013
2014
Interpretation:
case of Yousaf Asia Hosiery the Debtor Turnover Ratio is decreasing from 9 times in 2013 to 7 times
in 2014.it mean in 2014 the firm collecting its debt slowly than in 2013.
2014
365/ 7
52 days
2013
365/ 9
39 days
Page 38
Debtors Turn over In Days

60
50
40
30
Debtors Turn over In

Days
20
10
0
2013
2014
Interpretation:
Debtors Turnover in days signifies the number of days in which the debt is collected by the firm from
debtors .in the case of Yousaf Asia Hosiery the term of collection of debt is increasing from 39 days
in 2013 to 52 days in 2014. it is a good situation & best for the company.
.OPERATING CYCLE
2014
73 days + 52 Days
125days
2013
73 days + 39 days
112 days
Operating Cycle
130
125
120
Operating Cycle
115
110
105
2013
2014
Intrepretation:
Operating Cycle shows that how much time is required by the firm in which the inventory converted
into cash ? in the case of Yousaf Asia Hoisary the Operating cycle is increasing from 112 days in
Page 39
2013 to 125 daysin 2014 . it is unfaverable for the firm. Because the time of operating cycle is more
in 2014 than in 2013.
WORKING CAPITAL TURNOVER RATIO
Average Working Capital
= Cost of goods sold /Average Working Capital
2014
62692/18591
3.4 times
2013
56874/ 17867
3.2 times
= (Opening working Capital+ Closing Working Capital)/ 2

2014
= (17867 + 19315) / 2
18591
2013
= (16623+ 17867) / 2
17245

3.45
3.4
3.35
3.3
Working Capital
Turnover Ratio
3.25
3.2
3.15
3.1
2013
2014
Interpretation:
efficiency at which the working capital is being used by the firm in a year .In the case of Yousaf Asia
Hosiery the working capital ratio is increase from 3.2 times in 2013 to 3.4 times in 2014 . it is
favourable for the firm. It means that working capital is efficiently used by the firm in 2014 than in
2013.
Page 40
SOLVENCY ANAYSIS:
DEBT RATIO
Total liabilities/Total Assets
2014
3353 / 27537
12%
2013
3325/ 26158
13%
Debt Ratio
13.2
13
12.8
12.6
12.4
12.2
12
11.8
11.6
11.4
Debt Ratio
2013
2014
Interpretation:
assets financed by creditors. Low percentage of this ratio is best for the company. In the case of
Yousaf Asia Hoiesy. The Debt Ratio is 12% 2014. It means that in 2013 the cash ratio is low than
2014 which is best for the firm. This shows that the assets are less financed by creditors in 2013 than
2014.
2014
3353/24183
13.8%
2013
3325/22832
14.5%
Page 41

14.6
14.4
14.2
14
13.8
13.6
13.4
2013
2014
Interpretation:
Debt to Equity Ratio measures that how much creditors are protected in case of firm insolvency?
Lower this ratio is the best for the company. In the case of Yousaf Asia hosiery the ratio is 14.5% in
2013 & 13.8% in 2014.It means that creditors are more protected in 2014 than in 2013.
Page 42
MS SHAHEEN COLD STORE TRADER
INTRODUCTION:
Shaheen Cold Store Located at vegetable & fruit market near Saddar By Pass, Faisalabad. It is also
part a Anjum Textile (pvt) limited. Mr. Raja Ashraf opens it in 1998. This store provides the storage
facility the whole seller & retailer to store their fruit.
M/S SHAHEEN COLD STORE

Balance Sheet
As On June 30, 2013.
2014
Rupees
2013
Rupees
2012
Rupees
Share
Capital
Fixed
Assets
Capital
18,782,971
18,300,000
17,400,000
Add Profit
3,511,667
3,482,971
2,825,633
22,294,638
21,782,971
20,225,633
3,200,000
3,000,000
1,925,633
19,094,638
18,782,971
18,300,000
Less
Drawings
2014
Rupees
2013
Rupees
2012
Rupees
7,124,931
7,530,772
7,961,400
20,441,488
18,975,762
18,527,399
1,232,596
1,147,412
1,120,520
557,776
540,481
523,722
1,281,522
1,994,987
379,473
23,513,383
22,658,643
20,551,114
30,638,313
30,189,415
28,512,514
Current
Liabilities
Creditors
& Other
Current
Assets
Stock &
Store
Trade
Debtors
Liabilities
930,687
832,978
745,528
Borrowing
Accrued
Expenses
9,932,377
9,971,154
8,933,967
680,612
602,311
533,019
Advances
Cash &
Bank
Total C.L.
11,543,676
11,406,444
10,212,514
Total C.L.
30,638,313
30,189,415
28,512,514
Total
liabilities
Total
Assets
Page 43
SHAHEEN COLD STORE

Income Statement
For The Year Ended June 30, 2014 - 12.
2014
2013
2012
Rupees
Rupees
Rupees
Sales
53,196,948
51,943,804
50,720,180
Less Direct Expenditures
45,164,209
44,100,290
41,844,149
8,032,739
7,843,514
8,876,031
1,978,926
1,932,310
3,677,213
824,553
805,129
2,803,479
2,737,438
4,121,015
5,229,260
5,106,076
4,755,016
1,035,128
922,369
1,278,762
4,194,132
4,183,707
3,476,254
405,841
430,628
3,788,291
3,753,079
276,624
270,108
3,511,667
3,482,971
Gross Profit
Operating Expenses
Administrative
Selling
Operating Profit
Financial Charges
Depreciation
Net Profit (Loss)
443,802
473,100
3,003,154
177,521
2,825,633
Page 44
MS SHAHEEN COLD STORE TRADER ( Rs 000)
LIQUIDITY ANALYSIS:
CURRENT RATIO
Current Assets/ Current liabilities
2014 =
23513/11543
2:1
2013 =
20393/10266
1.9:1
Current Ratio
2.02
2
1.98
1.96
1.94
Current Ratio
1.92
1.9
1.88
1.86
1.84
2013
2014
Interpretation:
way the current ratio of Shaheen Trader is 2 : 1 in 2014 and 1.9 : 1 in 2013 . It is a good situation in
both years. It means that current assets are used properly.
QUICK RATIO
2014
(23513-557-20441)/11543
0.2:1
2013
(20393-486-17078)/11406
0.2:1
Page 45
Quick Ratio
0.25
0.2
0.15
Quick Ratio
0.1
0.05
0
2013
2014
Interpretation:
Quick ratio is the measure of instant debt paying ability of the business. In the case of Shaheen Trader
the quick ratio is 0.2 in 2013 in 2014. It is bad situation. This ratio also shows that Asif Trader has not
a good debt paying ability.
CASH RATIO
2014
1281 /11543
0.17:1
2013
1795 /10266
0.11:1
Cash Ratio
0.18
0.16
0.14
0.12
0.1
Cash Ratio
0.08
0.06
0.04
0.02
0
2013
2014
Page 46
Interpretation:
that the firm is not using its cash to its best advantage. In the case of Asif Trader, the cash ratio is 0.17
in 2014 & 0.11 in 2013. Its means that the cash ratio is high in 2014 than 2013. So the firm is not
using its cash to its best advantage in 2014 than 2013.

2014
= 23513
11543
11970
2013
= 20393 -
10266
10127

12000
10000
8000
6000
4000
2000
0
2013
2014
Interpretation:
Working capital ratio shows the short term solvency of the business. In the case of Shaheen trader the
working capital is increasing from Rs. 10127 in 2013 to Rs. 11970 in 2014. It is a good ratio it means
that Shaheen trader the less chances of short term solvency.
GROSS PROFIT MARGIN
2014
(8032/ 53196) * 100
= 15%
2013
(7058 / 46748) * 100
= 15%
Page 47
Gross profit Margin

16
14
12
10
8
Gross profit Margin
6
4
2
0
2013
2014
Interpretation:
incurred on the production of goods and Expenses incurred on the finished goods? It has a great
impact on sale price and profit. In the case of Shaheen Trader the Gross profit is same 20% in 2013 &
in 2014. it is moderate situation. It is same due to constant increase in cost of good.
2014 =
(5229 / 53196) * 100
9.8%
2013 =
(4596 / 46748) * 100
9.7%
Operating Profit Margin

9.82
9.8
9.78
9.76
9.74
Operating Profit
Margin
9.72
9.7
9.68
9.66
9.64
2013
2014
Page 48
Interpretation:
production of goods. In the case of Shaheen Trader the Operating Profit Margin has a decreasing
trend. It is9.7% in 2013 & 9.8% in 2014.Oprating Profit Increased in 2014 due to decreased in
operating expenses in 2014.
NET PROFIT MARGIN
2014
(3511 / 53196) * 100
6.6%
2013
(3404 / 46748) * 100
7.2%
Net Profit Margin

7.3
7.2
7.1
7
6.9
6.8
6.7
6.6
6.5
6.4
6.3
Net Profit Margin
2013
2014
Interpretation:
case of Shaheen trader the Net Profit Margin is decreased from 7.2% in 2013 to 6.6%in 2014 due to
increased in finance cost and tax.
Page 49
Net sale / Average total Assets
2014
53196 / 28905
1.8 times
2013
46748/ 27129
1.7 times
Average Total Assets
(Opening Total Assets + Closing Total Assets) / 2
2014
(27171 + 30638) /2
28905
2013
(27086 + 27171) / 2 =
27129

1.82
1.8
1.78
1.76
1.74

Ratio
1.72
1.7
1.68
1.66
1.64
2013
2014
Interpretation:
generate sale through the use of assets. In the Case of Shaheen trader the Total Assets turnover ratio is
increased from 1.7 times in 2013 to 1.8 time in 2014. It is a positive trend. It means that the use of
assets to generate sale is increased in 2014 than 2013.
RETURN ON ASSETS
2014
3788/ 28905
0.13 times
2013
3378/ 27129
0.12 times
Page 50
Return on Assets
0.132
0.13
0.128
0.126
0.124
Return on Assets
0.122
0.12
0.118
0.116
0.114
2013
2014
Interpretation:
Shaheen Trader the Return on Assets is increasing from 0.12 time in 2013 to 0.13 time in 2014. It is
good trend .it means the assets of the firm has good ability to increase the profit.
SALE TO FIXED AEESTS
2014
53196 / 6950
7.6 times
2013
46748/ 7170
6.5 times
(Opening Total Assets + Closing Total Assets) /2
2014
(6777 +7124)/2
6950
2013
(7563 + 6777)/2
7170
Page 51
Sale To Fixed Assets

8
7.5
7
Sale To Fixed Assets
6.5
6
5.5
2013
2014
Interpretation:
In the case of shaheen Trader the Sale to Fixed Assets ratio is decreased from 7.6 times in 2013 to 6.5
time in 2014. It means that the Shaheen trader firm Fixed assets not having a good ability to increase
the sale in 2014 than 2013.
RETURN ON EQUITY
2014
3788/ 17999
21%
2013
3378/ 17144
19%
2014
(16904+19094) / 2 =
2013
(17385 + 16904) /2 = 1714
17999
Page 52
Return On Equity
0.215
0.21
0.205
0.2
Return On Equity
0.195
0.19
0.185
0.18
2013
2014
Interpretation:
The Return on Equity measures the return on stock of the shareholders of firm. In the case of Shaheen
Trader the return on equity is increased from 19% in 2013 to 21% in 2014.It means that the Shaheen
Trader firm earned 2% more profit in 2014 than in 2013.
ACTIVITY ANALYSIS:
STOCK TURNOVER RATIO =
2014 =
45194/18760
2.4 times
2013 =
39690/17339
2.2 times
CGS
Sale Gross profit
2014
53196 - 8032
45164
2013 =
46748 - 7058
39690
Average Stocks
2014
(17078 + 20441)/ 2
= 18760
2013
(17600 + 17078) / 2
= 17339
Page 53
Stock Turnover Ratio

2.45
2.4
2.35
2.3
2.25
2.2
2.15
2.1
2013
2014
Interpretation:
the case of Shaheen Tarder the inventory turnover ratio increasing from 2.2 time in 2013 to 2.4 time
in 2014 .it is a positive situation.It means that the firm efficiently managed its inventory in 2014 than
in 2013
Days of Year/ Inventory turn over ratio
2014
365/ 2.4
152 days
2013
365 / 2.2
165 days
Page 54
Inventory Turnover in Days

170
165
160
Inventory Turnover in
Days
155
150
145
2013
2014
Interpretation:
during the year. In The case of ShaheenTrader the time is increasing in 165 days in 2013 to 152 days
in 2014 .it shows the efficency of the firm.
DEBTOR TURNOVER RATIO
2014 =
53196/ 1133
= 47 times
2013 =
46748/ 1049
= 44 times
Average Debtors
2014
(1033 + 1232) /2 = 1133
2013
(1064 + 1033) / 2 = 1049
Page 55

47.5
47
46.5
46
45.5
45
44.5
44
43.5
43
42.5
2013
2014
Interpretation:
case of Shaheen Trader the Debtor Turnover Ratio is increasing from 44 times in 2013 to 44 times in
2014.it mean in 2014 the firm collect its debt promptly than in 2013.
2014
365/ 47
7.7 days
2013
365/ 44
8.2 days
Debtor Turnover in Days

83
82
81
80
79
Debtor Turnover in
Days
78
77
76
75
74
2013
2014
Page 56
Interpretation:
debtors .in the case of Shaheen Traders the term of collection is increasing from 8.2 days in 2013 to
7.7 days in 2014.it is a good situation & best for the company.
OPERATING CYCLE
2014
152 days + 7.7 Days
160 days
2013
165 days + 8.2 days
173 days
Operating Cycle
175
170
165
Operating Cycle
160
155
150
2013
2014
Intrepretation:
into cash ? in the case of Shaheen trader the Operating cycleis increasing from 173 days in 2013 to
160 daysin 2014 . it is faverable for the firm. Because the time of operating is less in 2014 than 2013.
= Cost of goods sold/Average Working Capital
2014 =
45164/11048
4 times
2013 =
39690/ 9974
3.9 times

2014 =
(10127 +11970) / 2 = 11048
Page 57
2013 =
(9822+ 10127) / 2
= 9974

4.02
4
3.98
3.96
3.94
Working Capital
Turnover Ratio
3.92
3.9
3.88
3.86
3.84
2013
2014
Interpretation:
efficiency at which the working capital is being used by the firm in a year .In the case of Shaheen
Traders the working capital ratio is increase from 3.9 times in 2013 to 4 times in 2014. It is
2013.
SOLVENCY ANAYSIS:
DEBT RATIO
Total Liabilities/Total Assets
2014
11543 / 30638
37.6%
2013
11406/ 30189
37.8%
37.85
Debt Ratio
37.8
37.75
37.7
37.65
37.6
Debt Ratio
37.55
37.5
2013
2014
Page 58
Interpretation:
assets financed by creditors. Low percentage of this ratio is best for the company. In the case of
Shaheen Cold Store the Debt Ratio is 37.8% in 2013 and in 37.6% in 2014. It means that in 2013 the
cash ratio is low than 2014 which is best for the firm. This shows that the assets are less financed by
creditors in 2013 than 2014.
2014
11543/ 19094
60.4 %
2013
11046 /18782
59 %
Debt To Equity Ratio

61
60.5
60
59.5
59
Debt To Equity Ratio
58.5
58
57.5
57
56.5
2013
2014
Interpretation:
ratio is best for the firm In the case of Shaheen Traders the ratio in high from 58% in 2013 to 60.4 %
in 2014.It means that creditors are less protected in 2014 than in 2013.
Page 59
SAKHI SULTAN RICE MILL.
INTRODUCTION:
Sakhi Sultan Rice Mill located at samindary road Faisalabad. It was came into existence in1986.It is a
part of Ittehad Group of industry. It purchases the fresh rice from former. After cleaning & polishing,
the rice is packed into bags. This mill sale the rice in Pakistan & also export the rice.
M/S Sakhi Sultan Rice Mills

Balance Sheet
As On June 30, 2014-12
2014
Rupees
2013
Rupees
2012
Rupees
Share
Capital
Fixed
Assets
2014
Rupees
2013
Rupees
2012
Rupees
42,277,196
38,682,780
46,758,704
33,913,183
20,644,387
19,136,300
14,113,804
7,089,604
5,552,171
`
Capital
59,002,817
49,803,665
56,550,817
Add Profit
7,639,132
4,088,152
2,910,848
66,641,949
53,891,817
59,462,665
(5,000,000)
(3,740,000)
3,800,000
Net Capital
Current
Liabilities
Creditors &
Other
61,641,949
50,152,817
55,662,665
Liabilities
18,025,800
14,891,827
Short Term
Borrowing
10,105,000
Advances
5,582,061
3,799,684
4,044,794
8,422,215
7,496,073
7,355,821
Cash,
Bank
Balance
2,308,720
2,324,262
1,978,266
36,553,014
22,387,900
21,806,569
55,917,768
33,857,937
30,710,531
98,194,964
72,540,717
77,470,235
Less
Drawing
Accrued
Expenses
Total
Liabilities
98,194,964
72,540,717
14,450,749
77,470,235
Current
Assets
Stock &
Store
Trade
Debtors
Total
Assets
Page 60
Sakhi Sultan Rice Mills

Income Statement
For The Year Ended June 30, 2014 -12.
2014
2013
2012
Rupees
Rupees
Rupees
Sales
148,353,872
78,812,995
69,133,428
Less Cost Of Goods Sold
129,067,869
68,567,418
53,782,157
19,286,003
10,245,752
2,719,023
Administrative
2,759,382
1,465,614
1,119,701
Selling
1,780,246
1,298,654
690,395
4,539,628
2,411,268
1,811,096
Gross Profit
Operating Expenses
Operating Profit
Financial Charges
Depreciation
Net
Profit
14,746,375
2,725,916
7833484
7,212,175
-
12,020,459
7,833,484
7,212,175
3,231,584
3,153,924
4,065,109
8,788,875
4,679,560
3,147,066
1,149,743
590,409
7,639,132
4,090,152
236,218
2,911,848
Page 61
ANANLYSIS OF SAKHI SULTAN RICE MILL (Rs. 000)
LIQUIDITY ANALYSIS:
CURRENT RATIO
Current Assets/ Current liabilities
2014
55917/36535
= 1.5:1
2013
33857/22387
= 1.5:1
Current Ratio
1.6
1.4
1.2
1
0.8
Current Ratio
0.6
0.4
0.2
0
2013
2014
Interpretation:
Current ratio indicate the amount of current assets available for repayment of current liabilities that is
way the current ratio of Sakhi Sultan Rice Mill is same 1.5 : 1 in 2014 and in 2013. It is a good
situation. It means that the current assets are used & work properly.
QUICK RATIO
2014
55917-5582-33913/36553
= 0.44:1
2013
33857-3799-20644/22387
0.42:1
Page 62
Quick Ratio
0.445
0.44
0.435
0.43
Quick Ratio
0.425
0.42
0.415
0.41
2013
2014
Interpretation:
Quick ratio is the measure of instant debt paying ability of the business. In the case of Sakhi Sultan
Rice Mill the quick ratio is 0.42 in 2013 and 0.44 in 2014. It is positive trend. This ratio shows that
the receivable of Sakhi Sultan Rice Mill are very low or less and this ratio also shows that Sakhi
Sultan Rice Mill has good debt paying ability.
CASH RATIO
2014
2308 /36553
0.06:1
2013
2324 /22387
0.1:1
Cash Ratio
0.12
0.1
0.08
0.06
Cash Ratio
0.04
0.02
0
2013
2014
Page 63
Interpretation:
that the firm is using its cash to its best advantage. In the case of Sakhi Sultan Rice Mill, the cash ratio
is 0.06 in 2014 & 0.1 in 2013. The cash ratio is low .Its means that the firm is using its cash to its best
advantage in 2014.
Current Assets Current Liabilities
2014
55917 -
36553 =
19354
2013
33857 -
22387 =
11470

25000
20000
15000
10000
5000
0
2013
2014
Interpretation:
Working capital ratio shows the short term solvency of the business. In the case of Sakhi Sultan Rice
Mill the working capital is increasing from 11470 in 2013 to 19354 in 2014. It is a good ratio it means
that Sakhi Sultan Rice Mill the less chances of short term solvency.
GROSS PROFIT MARGIN
2014
(19286 / 148353) * 100
13%
2013
(10245 / 78813) * 100
12.5%
Page 64
Gross Profit Ratio

13.1
13
12.9
12.8
12.7
Gross Profit Ratio
12.6
12.5
12.4
12.3
12.2
2013
2014
Interpretation:
incurred on the production of goods and expenses incurred on the finished goods? it has a great
impact on sale price and profit . in the case of Sakhi Sultan Rice Mill the Gross profit is increasing
from 12.5% in 2013 to 13% in 2014 . it is positive trend. It is increased due to decrease in cost of
good.
2014
(14746 / 148353) * 100
10%
2013
(7833 / 78813) * 100
9.8%

10.05
10
9.95
9.9
9.85
9.8
9.75
9.7
2013
2014
Page 65
Interpretation:
production of goods. In the case of Sakhi Sultan Rice Mill the Operating Profit Margin is increase due
to decreased in operating expenses. It is 9.8% in 2013 &10% in 2014.
NET PROFIT MARGIN
2014
(7639 / 148353) * 100
5.14%
2013
(4090 /78813) * 100
5.18%
Net Profit Ratio

5.19
5.18
5.17
5.16
Net Profit Ratio
5.15
5.14
5.13
5.12
2013
2014
Interpretation:
case of Sakhi Sultan Rice Mill the Net Profit Margin is Decreased from 15.8% in 2013 to 15.4%in
2014 due to increase in Cost of Goods & decreased in Gross Profit Margin.
Net sale / Average total Assets
2014
148353 / 85367
1.7 times
2013
78813/ 75005
1 times
Average Total Assets
= (Opening Total Assets + Closing Total Assets) / 2
2014
(72540 + 98194) /2
85367
2013
(77470 + 72540) / 2
75005
Page 66

1.8
1.6
1.4
1.2
1

Ratio
0.8
0.6
0.4
0.2
0
2013
2014
Interpretation:
generate sale through the use of assets. In the Case of Sakhi Sultan Rice Mill the Total Assets
turnover ratio is increasing from 1 times in 2013 to 1.7 time in 2014. It is a positive trend. It means
that the use of assets to generate sale is increased in 2014 than in 2013.
RETURN ON ASSETS
2014
8788/ 85367
0.1 times
2013
4679/ 75005
0.06 times
Return on Assets
0.12
0.1
0.08
0.06
Return on Assets
0.04
0.02
0
2013
2014
Page 67
Interpretation:
Sakhi SultanRice Mill the Return on Assets is increasing from 0.06 in 2013 to 0.1 in 2014. It is good
trend .it means the assets of the firm has good ability to increase the profit.
SALE TO FIXED ASSETS
2014
148353 / 40480 =
3.6 time
2013
78813/ 42720
1.9 time
(Opening Fixed Assets + Closing Fixed Assets) /2
2014
(38682+42277)/2
= 40480
2013
(46758 + 38682)/2
= 42720

4
3.5
3
2.5
2
1.5
1
0.5
0
2013
2014
Interpretation:
In the case of Sakhi Sultan Rice Mill the Sale to Fixed Assets ratio is increased from 1.9 times in 2013
to 3.6 time in 2014. It means that the Sakhi Sultan Rice Mill fixed assets having a very good ability to
increase the sale in 2014 than in 2013.
Page 68
RETURN ON EQUITY
2014
8788/55896
15%
2013
4679/52907
18%
2014
(50152+ 61641) / 2
= 55896
2013
(55662 +50152) /2
= 52907
Return on Equity
18.5
18
17.5
17
16.5
16
15.5
15
14.5
14
13.5
Return on Equity
2013
2014
Interpretation:
The Return on Equity measures the return on stock of the shareholders of firm. In the case of Sakhi
Sultan Rice Mill the return on equity is decreased from 18% in 2013 to 15% in 2014.It means that the
Sakhi Sultan Rice Mill faces 3% more loss in 2014 than 2013.
Page 69
ACTIVITY ANALYSIS:
STOCK TURNOVER RATIO
2014
129067/27288
4 times
2013
68568/ 19900
3.4 times
CGS
Sale Gross profit
2014
148353 - 19286
= 129067
2013
78813 10245
= 68568
Average Stocks
2014
(20664 + 33913)/ 2 = 27288
2013
(19136 + 20664) / 2 =
19900

4.1
4
3.9
3.8
3.7
3.6
3.5
3.4
3.3
3.2
3.1
2013
2014
Interpretation:
Inventory Turnover Ratio evaluate the efficiency with which a firm is able to manage its inventory .In
the case of Sakhi Sultan Rice Mill the inventory turnover ratio increasing from 3.4 time in 2013 to 4
time in 2014 .it is positive situation. It means that the mill is efficiently managing its inventory.

2014
=
=
Days of Year/ Inventory turnover ratio

365/ 4
91 days
Page 70
2013
365 / 3.4
114 days
Stock Turnover In Days

150
100
Stock Turnover In Days
50
0
2013
2014
Interpretation:
during the year. In The Case of Sakhi Sultan Rice Mill the time is decreasing in 91 days in 2013 to
114 days in 2014 .it shows the inefficiency of the firm.
DEBTOR TURNOVER RATIO
2014
148353/ 10601
13.9 times
2013
78813/ 6320
12.4 times
Average Debtors
2014
(7089 + 14113) /2 = 10601
2013
(5552+ 7089) / 2
= 6320
Debtors Tunover Ratio

14.5
14
13.5
13
Debtors Tunover Ratio
12.5
12
11.5
2013
2014
Page 71
Interpretation:
case of Sakhi Sultan Rice Mill the Debtor Turnover Ratio is increasing from 12.4 times in 2013 to
13.9 times in 2014.it mean in 2014 the firm collecting its debt promptly than in 2013.
Days of Year / Debtors turnover ratio
2014
365/ 13.9 =
26 days
2013
365/ 12.4 =
29 days
Detors Turnover In Days

29.5
29
28.5
28
27.5
27
26.5
26
25.5
25
24.5
Detors Turnover In
Days
2013
2014
Interpretation:
debtors .In the case of Sakhi Sultan Rice Mill the term of collection is decreasing from 29 days in
2013 to 26 days in 2014.It is a bad situation & not best for the company.
OPERATING CYCLE
Inventory turnover in days + Debtors Turnover in Days
2014
91 days + 26 Days
117 days
2013
114 days + 29 days
143 days
Page 72
Operating Cycle
160
140
120
100
80
Operating Cycle
60
40
20
0
2013
2014
Interpretation:
into cash? In the case of Sakhi Sultan Rice Mill the Operating cycle is increasing from 143days in
2013 to 117days in 2014. It is favourable for the firm. Because the time of operating cycle is less in
2014 than 2013.
= Cost of goods sold / Average Working Capital
2014 = 129067/15412
8.3 times
2013 = 68567/ 10187
6.7 times

2014 = (11470 +19354) / 2
= 15412
2013 = (8904+ 11470) / 2
= 10187
Page 73

9
8
7
6
5
Working Capital
Turnover Ratio
4
3
2
1
0
2013
2014
Interpretation:
efficiency at which the working capital is being used by the firm in a year .In the case of Sakhi Sultan
Rice Mill the working capital ratio is increase from 6.7 times in 2013 to 8.3 times in 2014 . It is
2013.
SOLVENCY ANALYSIS:
DEBT RATIO
Total liabilities/Total Assets
2014
36553 / 98194
37%
2013
22387 /72540
30%
Debt Ratio
40
35
30
25
20
Debt Ratio
15
10
5
0
2013
2014
Page 74
Interpretation:
assets financed by creditors. Low percentage of this ratio is best for the company. In the case of Sakhi
Sultan Rice Mill the Debt Ratio is 30% in 2013 and in 37% in 2014. It means that in 2013 the cash
ratio is low than 2014 which is not best for the firm. This shows that the assets are more financed by
creditors in 2013 than 2014.
2014
36553 /61641
59%
2013
22387 /50152
44.5%

70
60
50
40
30
20
10
0
2013
2014
Interpretation:
ratio is best for the firm. In the case of Sakhi Sultan Rice Mill the ratio in high from 52% in 2013 to
59% in 2014. The ratio is high in 2014.It means that creditors are less protected in 2014 than in 2013.
Page 75
CONCLUSION:
Financial statement analysis is very important for firms. With the help of this analysis firms can check
that either they are going toward positive trend or not. What are their solvency positions? What are
Industry trends? What is the strategy of other firms in industry or competitors? It is very important
documents for all the stakeholder of the firms. With the help of financial statement analysis firm can
check their profitability, turnover, liquidity position. At the end I want to say that, financial statement
analysis is only a method through which firms can check their performance.
REFERENCES:
www.nbp.com.pk
www.sbp.com.pk
www.vustudents.ning.com
Page 76

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University of Agriculture, Faisalabad.

NATIONAL BANK OF PAKISTAN

University of Agriculture, Faisalabad.

DEPARTMENT OF BUSINESS ADMINISTRATION AND SCIENCES

University of Agriculture, Faisalabad.

University of Agriculture, Faisalabad.

University of Agriculture, Faisalabad.

University of Agriculture, Faisalabad.

Name of the organization

Name of the Internee, Student ID

Submission date of the internship report

Name of the University

Brief history National Bank of Pakistan

Brief history National Bank Jinnah Colony Branch.

Introduction of Asif Trader

Balance sheet of Asif Trader

Income statement of Asif Trader

Liquidity Analysis (Current, Liquid, Cash, Working Capital)

Profitability Analysis (Goss profit Margin, Operating Profit Margin,

Activity Analysis (Debtor Turnover , Debtor Turnover in Days,

Introduction of Yousaf Asia Hosiery

Balance sheet of Yousaf Asia Hoisery

Income statement of Yousaf Asia Hosiery

Liquidity analysis (Current, Liquid, Cash, Working Capital)

Profitability analysis (Goss profit Margin, Operating Profit Margin,

University of Agriculture, Faisalabad.

Activity analysis (Debtor Turnover , Debtor Turnover in Days,

Introduction of Shaheen Cold Store

Balance sheet of Shaheen Cold Store

Income statement of Shaheen Cold Store

Liquidity analysis (Current, Liquid, Cash, Working Capital)

Profitability analysis (Goss profit Margin, Operating Profit Margin,

Activity analysis (Debtor Turnover Ratio, Debtor Turnover in Days, 53

Introduction of Sukhi Sultan Rice Mill

Balance sheet of Sukhi Sultan Rice Mill

Income statement of Sukhi Sutan Rice Mill

Liquidity analysis (Current, Liquid, Cash, Working Capital)

Profitability analysis (Goss profit Margin, Operating Profit Margin,

Activity analysis Debtor Turnover Ratio, Debtor Turnover in Days,

University of Agriculture, Faisalabad.

BRIEF HOSTORY OF NATIONAL BANK:

Institutionalizing a merit and performance culture

University of Agriculture, Faisalabad.

BREIF HISTORY OF NATIONAL BANK JINNAH COLONY BRANCH:

Cash Department is controlled by Mr Delawer (SHC/OGII). He is head cashier in this branch

Small & Medium Enterprise Lending

University of Agriculture, Faisalabad.

Stock & Store

Cash & Bank

University of Agriculture, Faisalabad.

Less Cost Of Goods Sold

University of Agriculture, Faisalabad.

ANANLYSIS OF ASIF TRADER (Rs. 000)

= Current Assets/ Current liabilities

Current Assets Ratio

Current Assets Ratio

(Current assets- Prepaid - Inventory) / Current Liabilities

University of Agriculture, Faisalabad.

Cash / Current Liabilities

University of Agriculture, Faisalabad.

= Current Assets Current Liabilities

WORKING CAPITAL RATIO

Working Capital Ratio

Working Capital Ratio