Umar Apparel private Ltd.

Session

Submitted to: Sir.Omer Sharif Submitted By:

Faiza Andleeb Numera Ali Maryam Nisar Hira Amjad Khalid Farooq DEGREE M.com 3rd 2009-ag-857 2009-ag-952 2009-ag-1273 2009-ag-1274 2009-ag-725

Table of Content

Umar Apparel private Ltd.

SERIAL NO.

SUBJECTS EXECUTIVE SUMMARY

PAGE No.

1 1.1 1.2 1.3 1.4 2 2.1 2.2 3 3.1 4 4.1 4.2 4.3 4.4 4.5 5 6 7

COMPANY INTRODUCTION INCORPORATION /COMMENCEMENT BUSINESS OPERATIONS SOWT ANALYSIS RESOURSES FIRM ANALYSIS COMMON SIZE ANALYSIS RATIO ANALYSIS PERFORMA STATMENT.
BASIS OF ANALYSIS.

PRACTICES OF FIRM ACQUASATION OF CAPITAL FINANCIAL FORCASTING INVESTMENT AVENUES WORKING CAPITAL MANAGEMENT DIVIDEND POLICY EVELUATION VISIT REPORT CONCLUSIONS

Umar Apparel private Ltd.

EXECUTIVE SUMMARY We accept the project of finance and select Umar Apparel private Ltd. The motive of accepting the MTM was to have an exposure of textile sector and potential to avail a sound and promising career. We devoted our time to learn about Umar Apparel , which will be beneficial to us if we join textile sector. In this visits, The object of this report that we have placed is to express what we observed and what are the necessary measures that can help to capitalize the strengths to overcome weakness and remove the threats. Umar Apperal is one of the largest knitted garment manufacturers of Pakistan. The company is 100% export oriented. U.S.A. and Europe are major markets of Umar Apperal . It is a quality conscious company. The company is ISO 9002 certified. Companys mission statement is,

To be the worlds Best Apparel Company.

1 Introduction of Company
The company was initially established in 1990 by Mr. Sajjad Nazir in Pakistan. Later on, as an expansion project, Umer Apparels was established in Pakistan nearly two

Umar Apparel private Ltd.

decades ago to accommodate the growth of orders to the Worldwide and European countries. The company has been running successfully since its inception, currently we have the strength of more than 2000 people consisting of, a team of highly professional and efficient management, workers in our manufacturing unit. Umer Apparels has a state of the apparels manufacturing setup; it is equipped with most modern and advanced technologies. This combination with our highly experienced management has enabled the company to become one of the best apparel manufacturers and suppliers in the region. Strict quality controls are followed through out the entire process, from the selection of raw materials, to the production and delivery of the garments. Complete customer satisfaction is our prime objective. At Umer Apparels, every garment we sell is of the highest quality, simply because we care, and simply because it has your name on it. Our products are designed to reflect the pride we have in our company. Thus we place meticulous attention to every single detail of the garment and assert a great deal of care in every aspect of the manufacturing process. We want you to "feel good" and be proud when wearing one of our "Umer Apparels" with your company logo embroidered or printed on it. We value the opportunity to work with you and guarantee to provide; cutting-edge technology, on time delivery, superb customer service and outstanding quality. Umer Apparels has customers all over the world, a global variety of garments in a variety of fabrics and colors. You can also customizing your own garments utilizing our unmatched service, and much, much more

Umer Apparels has never hesitated in adapting the latest manufacturing technologies. The engineering and sampling department is equipped with latest, Gerber Garment Technology (GGT) Accumark, designing, grading and marking system.Garments designed at Umer Apparels are engineered to perfection. Being the backbone of the entire manufacturing facility the pattern making and sampling department at Umer Apparels take great pride in creating unmatchable quality garments.

Vision Statement A leading producer of textile products by producing the highest quality of products ad services to its customers. To strive for excellence through commitment, integrity, honesty and team work.

Umar Apparel private Ltd.

Highly ethical company and be repeated corporate citizen to continue playing due role in the social and environmental sectors of the company. To develop and extremely motivated and professional trained work force, witch would drive growth through innovation and renovation. Sustained growth in earning in real terms. Mission Statement: Our mission is to be a dynamic, profitable and growth oriented Company by providing good return on investment to its shareholders And investors, quality products to its customers, a secured and Friendly environment at workplace to its employees and to project Pakistans image in the international market.

COMPANY INTRODUCTION

CHAIRMAN/CEO: DIRECTORS: : : : : : DIRECTOR FINANCE: CHIEF FINANCIAL OFFICER:

MR. SHAHID NAZIR CH. MUHAMMAD AMIN CH. MUNIR AHMAD MR. FAZAL ELAHI MR. NASEER AHMASHAH MR. MUHAMMADARSHAD MR. MUAMMAD NAWAZ MR. MUHAMMADFAROOQ MR. BINYAMIN

Umar Apparel private Ltd.

COMPANY SECRETARY: AUDITORS: COMNPANY MR. ABDUL BARIHAQQANI M/S RIAZ AHMAD
CHARTERED ACCOUNTANTS 10-B, Saint Mary Park, Main Boulevard, Gulberg III, Lahore-54660. Tel: 042-5718137-39-26 Fax: 5714340 E-mail: racolhr@brain.net.pk sarfrazm@brain.net.pk

RATING OF SBP
Riaz Ahmed & Co.is at A11 no.by SBP

BANKERS:

HABIB BANK LIMITED UNITED BANK LIMITED MCB LIMITED THE BANK OF PUNJAB HABIB BANK A.G. ZURICH

REGISTERED OFFICE:

UNIVERSAL HOUSE, WEST CANAL ROAD, FAROOQABAD, FAISALABAD.

MILLS:

32-K.M SHEIKUPURA ROAD, FAISALABAD.

2 Business operations Business operations of Umar Apperal Limited include following areas

Umar Apparel private Ltd.

Products Yarn Knitted Fabric Garments (1) Yarn:

Umar Apperal Limited produces high quality yarn according to the demand of the market. 80 to 90% yarn is exported rest of the yarn is used is in Umar Apperal Limited . Single knit Flat knit Strippers Textures Double knit Jacquards

(2) Knitted Fabric: One of the largest Fabric facility in Pakistan having the capability to produce all kinds of knitted fabrics in 100% cotton & blends. Following are types of fabric Jersey Pique Inter Lock Rib Waffle Min Thermal o Fleece Garments: Umar Apperal Limited is a leading apparel company in Garments Pakistan having expertise & machinery capable of transforming customer ideas into superior quality garments, which are taken as the most famous brands in the world. These includes the

Umar Apparel private Ltd.

Loungewear Sportswear Activewear Sleepwear Athletic Countries of Export: Umar Apperal Limited is making a good effort to increase the market share. Today company is exporting its products to many countries like, o USA. o Hong Kong o Japan o Germany o Thailand

o Malaysia

Customer profile
Umar Apperal Limited has also proud of work with world best Labels like

JC Penney (Stafford, Arizona, St. Johns Bay) War Naco (Chaps Ralph Lauren, Calvin Klein) Indus (Vantage, Champs, Tom Taller)

Vanity fair Lee, Wrangler Perry Ellis Levis

Departments;

Umar Apparel private Ltd.

1. Merchandising 2. Production Planning & Control (PPC) 3. Industrial engineering 4. production i. Cutting ii. Stitching iii. Finishing iv. Clipping v. Packing vi. Shipment 2. Quality assurance 3. Quality control 4. Human Resource 5. Information Technology 6. Procurement 7. Finance 8. Forwarding 9. Stores 10. Marketing 11. Transportation 12. Compliance 13. Washing

Management Hierarchy in MTM Top Management

Chief Executive Officer

Umar Apparel private Ltd.

General Manager

Middle Management
Manager

Senior Officer

Deputy Manager

Assistant Manager

Officer

Lower Level Management

Supervisor

Helpers

Foreman

Operators

Umar Apparel private Ltd.

1.3 Swot analysis

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. Once key issues have been identified, they feed into marketing objectives

Umar Apparel private Ltd.

SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors.

STRENGTHS
1. ISO 9002 Certification. 2. WRAP Certified 3. Vertically integrated. 4. High quality products. 5. Excellent market image in the local and international market. 6. Highly qualified management. 7. Adequate financial resources. 8. Competitive advantage. 9. Adopting information technology. 10. Recruitment on merit. 11. Loyal customers. 12. Skilled Labor. 13. Broad and motivational vision.

WEAKNESSES
1. Increased employee turnover 2. Centralized management system 3. High cost of production. 4. Low production capacity. 5. De-motivated Staff. 6. Non-Corporative culture. 7. Insufficient benefits for the employees. 8. Stereotype machinery for processing. 9. Communicational gap among different departments. 10. High percentage of debts

Umar Apparel private Ltd.

14. Back Track System

OPPORTUNITIES

THREATS

1. Can expand its division such as entering in weaving sector also. 2. Can introduce its own label in domestic as well in international market 3. Can capture new market segment. 4. Full potential entertaining the local market. of

1.

Entry of new competitors just like China & India or local companies Kamal Spinning Mills Fsd.

2. Buyer need and demand changes. 3. Political instability. 4. Changing geopolitical situation. 5. Change of government policies. 6. Low price offered by competitor 7. Globalization. 8. Increase in inflation

5. Can reduce the cost by proper utilization of resources. 6. End of quota restrictions by the end of year 2004. 7. Can hire well-educated and experienced staff.

Umar Apparel private Ltd.

1.4 RESOURCES PHYSICAL RESOURCE Umar Apperal Limited is leaders in creating, developing and manufacturing of knitted apparel products right from basic to highly fashioned garments thus responding to emerging trends in the industry. They have spinning, knitting, and processing and apparel divisions. In this apparel division they have these sections. Umar Apperal Limited. is the largest vertical integrated setup in Pakistan in knitwear industry. We have our own Spinning, Knitting, Dyeing, Processing, cutting and sewing facilities. Our capacities are as follows: - 300 yarn bags per day - Plus 50 Ton fabric production per day - 5 Million Pieces Cutting Capacity per month - 4.50 to 5 Million Pieces export per month

Cutting:
Cutting units working under the supervision of skilled unit managers, these cutting units are well equipped with latest machinery including Gerber Plotter, Spreader etc.
Machine Quantity

Gerber cutter Max. Cutable height 7.2cm, Max Cutable width 68 Max. Cutable height 7.2cm, Max Cutable width 78 Max. Cutable height 7.2cm, Max Cutable width 94 3 1 1

Umar Apparel private Ltd.

Band knife Model-EC-700N 220V 50/60 Hz Knife size 3500mm Model-EC-900N 220V 50/60 Hz Knife size 3860mm Gerber spreader Max.Load 100 kg, Max width 70Max. roller 65cm. Gerber Tublar Spreader Max.Load 100 kg, Max width 38 Synchron Spreader 101 Max.Load 100 kg, Max width 96Max.roller 65cm. Synchron Spreader 55B Max.Load 100 kg, Max width 70Max. roller 50cm. Tesan Spreader Max.Load 50 kg, Max width 38
Bierrebi Total Machines

2 2

22

Stitching: With over 1,749 stitching machines, manned with the most skilled and expert operators, Masood is capable of producing about 120,000 dozens per month versatile garments ranging from basic to high fashion, mens, womens and kids with maximum flexibility in size and color assortments. Stitching Units Apparel Apparel III Apparel IV Apparel II Warehouse Quantity 1168 188 289 227

Umar Apparel private Ltd.

Falcon Falcon-2 Leopard Lion Panther Zain Godown Total Machines 341 161 155 220 286 1 3036

Finishing:
Our Finishing Capacity in kg : 66,000 / Day : 2,046,000 / Month : 22,552,000 / Year lbs : 145,502 / 24Hrs : 4,510,562 / Month : 54,126,744 / Year

HUMAN RESOURCES

Umar Apparel private Ltd.

No. of Employees

2005 2006 2007 2008 2009 2010

2 COMPREHENSIVE ANALYSIS OF FINANCIAL STATEMENT

The financial analysis of the company presents us the true picture of the company and its performance regarding the utilization of resources, worth and its profitability.

Usually there are three types of financial analysis in which one analysis the financial statements of the company mostly Balance Sheet Analysis and Income Statement Analysis. Following are the three types of analysis:

Umar Apparel private Ltd.

2.1 Common size analysis (a)Horizontal analysis (b)Vertical analysis 2.2 Ratio Analyses

Umar Apperal Limited

PROFIT AND LOSS ACCOUNT

Horizontal analysis
Notes
SALES 22 0 87.9 COST OF SALES 23 9 81.0 GROSS PROFIT DISTRIBUTION COST ADMINISTRATIVE EXPENSES OTHER OPERATING EXPENSES 24 25 26 0 140.1 7 56.9 4 216.0 3 122.1 0 58.3 2 63.7 OTHER OPERATING INCOME PROFIT FROM OPERATIONS 27 0 58.3 7 10.4 FINANCE COST PROFIT BEFORE TAXATION PROVISION FOR TAXATION PROFIT AFTER TAXATION 29 28 5 121.6 7 93.2 9 127.9 8 75.6 EARNINGS PER SHARE - BASIC 30 5 55.2 - DILUTED 30 3 6) 1 (10.4 0 4 17.6 0 100.0 2 35.3 0 100.0 3 32.5 0 100.0 6 34.8 0 100.0 1 33.5 0 100.0 0 34.1 0 100.0 4 31.0 0 100.0 2 34.1 0 100.0 7 61.5 0 100.0 7 138.0 0 100.0 3 14.6 0 100.0 7 73.7 0 100.0 8 43.8 0 100.0 2010% 86.7 3 37.6 0 100.0 2009% 38.8 0 100.0 2008% 100.0

Umar Apparel private Ltd.

Umar Apperal Limited

PROFIT AND LOSS ACCOUNT VERTICAL ANAYSIS

DSECRIPTION SALES COST OF SALES GROSS PROFIT DISTRIBUTION COST ADMINISTRATIVE EXPENSES OTHER OPERATING EXPENSES

2010 % 100 82.10 17.90 5.68 1.49 0.64 7.81 10.09 0.10 10.19 4.04 6.14 0.98 5.17

2009 % 100 80.86 19.14 5.53 1.46 0.65 7.64 11.50 0.10 11.60 6.58 5.03 0.90 4.13

2008% 100 81.53 18.47 4.42 1.77 0.38 6.57 11.90 0.11 12.01 6.84 5.17 0.94 4.23

OTHER OPERATING INCOME PROFIT FROM OPERATIONS FINANCE COST PROFIT BEFORE TAXATION PROVISION FOR TAXATION PROFIT AFTER TAXATION

Sales Sale of the company increases 86% as compared to last two years the increase in sale is due to increase in export sales that are result of better management of operations Cost of goods sold

Umar Apparel private Ltd.

in 2010 cost of goods sold is 82.10 % of total sale and as compared to previous years is is increased from 37.68% to 87.99% this increase in cogs is due to increase in production and increasing cost of raw material Gross profit In 2010 gross profit margin is 17% of sale that is less than previous year % as compared to previous year gross profit increased from 43.87 % to81% that shows although prices of raw material increases but companys gross profit increase over year due to increase in sales Distribution Expenses Distribution expenses of the company in 2010 is 5.68% of sale that is more than last two years as compared to last years distribution expenses increase from 73.73% to140.17% this increase in expenses is due to more expenses on advertisement and distribution of more stock Administrative expenses In 2010 administrative expenses are 1.49% of sale and as compared to last years it increase froms14.67% to56.94% this huge increase is due to increase in workers and administrative services to meet current requirements of production Other operating expenses Other operating expenses are 0.64% of sale in 2010 that is less than previous year % but as compared to last years operating expenses increase from 138.07 % to 216.03% this increase is due to increase in capacity of company Other operating income Other operating income as a percentage of sale remains same as compared to last year sale percentage in comparison of last years income it increases from 31% to 63.70% Profit from operations Profit from operations of the company as a percentage of sale as compared to last year % due to high cost of operations to meet more production as compared to previous years profits it increases from34.1% to 58.3 % Finance cost Finance cost of company as a % of sale decrease as compared to last year from 6.58% to 4.04% and also decrease over the year from 33.56% t0 10.45 % this decrease is due to acquisition of mark up free loans Profit before taxation Profit before taxation of company increases over the year from 34.83% to 121.67 % the major increase is due to decrease in finance cost as a percentage of sale it increase from 5.03% to 6.14 % Profit after taxation Companies net profit is 5.17 % of total sale that is more than last years % companys net profit as compared to last years increases from 35.34% to 127.98% The overall analysis of companys profitability shows company is growing over year the major cost are of increasing raw material cost

Umar Apparel private Ltd.

Umar Apperal Limited Balance Sheet Horizontal analysis

EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES Authorized share capital 65 000 000 (2009: 65 000 000 ) ordinary shares of Rupees 10 each 60 000 000 (2009: 60 000 000 ) preference shares of Rupees 10 each 62.5 62.5 100 Note s 2010% 2009% 2008%

Issued, subscribed and paid up share capital Reserves Total equity Surplus on revaluation of operating fixed assets Deferred income on sale and lease back of operating fixed assets NON-CURRENT LIABILITIES Long term financing Liabilities against assets subject to finance lease Deferred liability for gratuity

3 4

26.9 136.2 81.9 -

35.9 18.1

100 100 100 100

(92.8) 5 6 7 (17.3) (46.3) 72.5 (15.7)

(48.6) (5.4) (41.7) 38.0 (7.0)

100 100 100 100 100

CURRENT LIABILITIES Trade and other payables Accrued mark-up Short term borrowings Current portion of non-current liabilities Provision for taxation TOTAL LIABILITIES CONTINGENCIES AND COMMITMENTS TOTAL EQUITY AND LIABILITIES 12 49.3 16.8 100 8 9 10 11 101.1 61.4 64.8 69.5 93.3 73.9 42.8 32.6 132.0 25.3 45.0 32.5 30.7 17.6 100 100 100 100 100 100 100

Umar Apparel private Ltd.

ASSETS

Nots NON-CURRENT ASSETS Property, plant and equipment Long term advances Long term security deposits 13 14

2010%

2009%

2008%

30.31 (46.90) (45.88) 29.74

4.10 (19.79) (25.07) 3.89

100 100 100 100

CURRENT ASSETS Stores, spare parts and loose tools Stock in trade Trade debts Loans and advances Short term deposits and prepayments Other receivables Cash and bank balances TOTAL ASSETS 15 16 17 18 19 20 21 32.15 51.70 82.99 23.98 49.08 2.84 251.23 60.85 49.34 17.88 (6.03) 65.36 (11.65) 8.58 (22.28) 133.89 24.46 16.85 100 100 100 100 100 100 100 100 100

Umar Apperal Limited

Balance Sheet Account Vertical analysis DESCRIPTION EQUITY AND LIABILITIES SHARE CAPITAL AND RESERVES 2010% 2009% 2008%

Umar Apparel private Ltd.

Authorized share capital 65 000 000 (30 June 2008: 40 000 000 ) ordinary shares of Rupees 10 each 60 000 000 (30 June 2008: 60 000 000 ) preference shares of Rupees 10 each

5.29

6.76

4.86

4.88 10.16 9.28 17.51 26.79 3.09

6.24 12.99 9.35 12.87 22.23 3.94

7.29 12.14 10.93 11.07 22.00 4.61

Issued, subscribed and paid up share capital Reserves Total equity Surplus on revaluation of operating fixed assets Deferred income on sale and lease back of operating fixed assets NON-CURRENT LIABILITIES Long term financing Liabilities against assets subject to finance lease Deferred liability for gratuity

0.00

0.03

0.06

11.90 0.96 1.51 14.37

17.39 1.33 1.55 20.26

21.49 2.67 1.31 25.46

CURRENT LIABILITIES Trade and other payables Accrued mark-up Short term borrowings Current portion of non-current liabilities Provision for taxation TOTAL LIABILITIES CONTINGENCIES AND COMMITMENTS TOTAL EQUITY AND LIABILITIES 100 100 100 14.82 1.11 35.13 3.51 1.17 55.75 70.12 12.49 2.05 34.14 3.84 1.02 53.54 73.81 11.00 1.03 31.84 3.10 0.90 47.87 73.34

Umar Apperal Limited

Balance Sheet Account Vertical analysis

Umar Apparel private Ltd.

DESCRIPTION 2010% 2009% 2008%

Umar Apparel private Ltd.

ASSETS NON-CURRENT ASSETS 32.0 Property, plant and equipment 6 3 32.7 4 36.7

0.0 Long term advances 3 5

0.0 7

0.0

0.0 Long term security deposits 7 32.1 6 CURRENT ASSETS 3.9 Stores, spare parts and loose tools Stock in trade Trade debts Loans and advances Short term deposits and prepayments Other receivables Cash and bank balances 4 22.6 8 28.7 8 1.6 7 2.0 2 4.8 3 3.9 2 67.8 4 9 4 7 8 2 4 6 9 1 3

0.1 0 32.9 1

0.2 37.0

4.4 6 17.9 3 33.2 9 1.5 1 1.8 2 4.6 2 3.3 7 67.0 9

4.4 22.3 23.4 2.0 2.0 7.0 1.6 62.9

TOTAL ASSETS

100

100

100

Equity Total equity of company increases over year from 18.1% to 81.9% the increase in equity is through increase in the reserves of the company from its profit Equity as a percentage of total equity and liability increases over the year from 22.23% to 26.79% this increase is due to increase in reserves that is 17.51% over the year but issued capital decrease from 9.35% to 9.28% reserves are 136.2% increase over year Noncurrent liabilities Liabilities of the company decrease over the year from 7% to 15.7% major decrease is due to decrease in the long term financing 17.3% and liabilities against asset

Umar Apparel private Ltd.

subject to finance lease 46.3% percentage of noncurrent liabilities as a percentage of total liabilities and equity decrease over year from 20.26% to 14.37 % Current liabilities Current liabilities of the company increase over the year from 30.7% to73.9% this major increase is due to increase in payables and short term borrowing .current liabilities as a percentage of total equity and libilites increases over from 53.54% to 55.75% these are more than half of total amount. Noncurrent assets Noncurrent assets of the company increases over year from 3.89% to 29.74% this increase is due to increase in plant ,property and equipment that is 4.10% to 30.31% other noncurrent assets decreases over year as a percentage of total assets noncurrent assets decreases over year from 32.91% to 32.16 % this shows companys major investment in expanding ist plant Current assets Current assets of the company in 2010 increases from 24.46% to 60.85% the major increase in current assets is due to increase in trade debts stock cash current asserts contribution in total assets increases from 67.09% to 67.84% this shows company is non risk taking firm and do not go for long term investments

Umar Apperal Limited

CASH FLOW STATEMENT HORIZONTAL ANALYSIS
2010 CASH FLOWS FROM OPERATING ACTIVITIES 2009 (Rupees in Thousand) 632,821 2008 (981,74 8)

837,370

CASH FLOWS FROM INVESTING ACTIVITIES

(966,607)

(370,513)

(415,39 7)

CASH FLOWS FROM FINANCING ACTIVITIES

290,285

(78,537)

1,458,8 32

NET INCREASE IN CASH AND CASH EQUIVALENTS

161048

183771

61687

Interpretation Analysis of cash flow shows that over the year companys cash generated from operations increases and this cash is utlize in fixed assets cash flow from financing activity increases as compared to last year it is mainly from short term borrowing and equity company generating its finance from debts

Umar Apparel private Ltd. Ratio analysis.

Ratio analysis is very useful approach to keep the management, shareholder and creditors in making various decisions about company.
Types of ratios Some of the different types of ratios that can be calculated from data in the financial statements and used to evaluate a business include:

Liquidity ratios Activity ratios Coverage ratios Profitability ratios Solvency ratios

No. Descriptions Liquidity ratio 1. Current Ratio% 2. Acid Test Ratio 3. Cash Ratio% 4. 5. 6. 7. 8. 9. 10 11. 12. 13 14. 15 16. Working Capital(In Thousands) Activity Ratio Days Sales In Receiveables(days) A/R Turnover(Times) A/R Turnover In Days(Times) Days Sales In Inventroy(Days) Inventory Turnover(Times) Inventory Turnover In Days. (Days) Operating Cycle(Days) Net sale/fixed asset Cash Cycle(Days) Labor Cost % Coverage Ratios

2010 122 0.81 7.303

2009 125 0.92 6.23

2008 132 0.85 3.48

1487135 1303484 1244555 87 4.37 84 85 5.35 68 152 0.96 118 13.33 107 4.27 85 71 4.96 74 159 1.14 127 12.92 90 4.08 89 104 3.5 104 193 0.96 142 12.19

Umar Apparel private Ltd.

17. Time Interest Earned(Times) Profitability Ratios 19. Net Profit Margin% 20. T.A Turnover(Times) 21. Fixed Asset Turnover 22. 23. 24. 25. 26. 27. 28. Ratio(Times) Earning Per Share Return On Asset% Dupont Return On Assets% Operating Income Margin% Operating Asset Turnover Return On Operating Assets Dupont Return On Operating Asset 30. Return On Total Equity% 31. Return On Common Equity% 24.27 13.98 19.22 13.22 14.41 36.40 2.52 1.76 1.76

5.17 1.32 4.15 30.09 6.94 6.82 10.19 1.34 15.4 13.65

4.13 1.23 3.55 19.17 5.06 5.08 11.60 1.33 13.7 15.43

4.23 0.96 2.61 17.92 4.05 4.06 12.01 1.15 13.8 13.81

Relationship Between Profitability Ratios 32. Return on Total Assets Variation% 33. G.P Margin% Solvency ratios 17.90 19.14 18.47 12.37 13.12 10.60

34. Solvency Ratio% 35. Debt Ratio% 36. Debt/Equity Ratio% 37. Debt To Tangible Net Worth% Interpretation Liquidity ratio:

4.11 70.12

9.86 73.81

9.27 73.34

261.75 188

332

133

333 148

The liquidity ratio measured by the current assets over current liabilities. The company performance to meet their current obligation forms their current assets. The company has decreasing trend in current ratio in 2010 as compared to 2008 due to increase in trade payable and short term liabilities.

Umar Apparel private Ltd.

The quick ratios /acid test ratio of the company continuously decrease due to increase in stock trade with is unfavorable trend. The liquidity of a business firm is measured by its ability to satisfy its short-term obligations as they come due. Liquidity refers to the solvency of the firms overall financial position. The company is good liquidity position as compared to previous year 2008, because in 2010, the company has sufficient net working capital. Cash ratio also shows that company is in a position to meet its short-term obligation.

Activity ratio. Inventory turnover ratio is increasing, which shows the high speed of inventory converting into cost of goods sold. The days to sell the average inventory are decreasing. The receivable turnover rate is also increasing. Days to collect average accounts receivable are decreasing as compared to previous years. All activity Fixed assets utilization ratio shows the net sale in relation to fixed assets. Ratio shows the decreasing trend in 2010 as compared to 2009 which shows that company not utilizing its fixed assets properly ratios show favorable trends. Coverage ratio The interest coverage ratio shows the increasing trend to meet the financial charges. Because company repay loans so its annual interest expenses is decreasing as compared to their profitability.

Profitability ratio.

Umar Apparel private Ltd.

Profitability analysis shows that company gross profit increase and then decrease from 2008 to 2010. There is decrease in operating income in 2010 as compared to 2009 and 2008 while there is continuously increase in distribution and admin expenses. So companys overall performance is satisfactory because net profit continuously increase due to increase in operating income and decrease in financial cost. Profitability ratios shows an increasing trend this shows increase in profitability Solvency ratio. The solvency analysis has to do with testing the organization ability to meet the liabilities and remain solvent. The solvency of Masood textile shows that the organization total liabilities are greater than the equity of the company however the assets of the company are greater than the liabilities which describe that in the long run the firm is quite solvent. Debt to equity ratio shows the favorable trend in 2010 as compared to 2009 which shows the liabilities are decreasing in relation to current and fixed assets of the company.

PROJECTED STATEMENT FOR 2011

Umar Apparel private Ltd.

Umar Apperal Limited BALANCE SHEET FOR THE YEAR 2011

Umar Apparel private Ltd.

Assets
S Cash Receivables Prepayments Loan sources Trade debts Stock in trade stock and spares Total current assets 0perating fixed assets Property plant &equipment Long term advances Long term deposits Total long term assets 496828 0 3680 11040 498300 0 552031 736041 368020 239213 441624 9 349619 7 552031 103597 82 Trade payables Accrued markup Short term borrowings Current portion in noncurrent assets Provision for taxation 2011 R RS 220812 4 165609 533630 0 552031 165609 LIABILITIES 2011

Total current liabilities Long term liabilities Long term finance Liabilities against asset subject to finance leas Defferd liability for gratuity Total long term liabilities

842767 3

216580 7 88614 241652 249607 3 114166 7 379420 600000 229794 9 153427 82

equity Surplus on revaluation of fixed assets Reserves Retained earnings TOTAL ASSETS 153427 82 TOTAL LIABILITIES & EQUITY

Basis of projected statement

Increase in Sal 25% =18401037 Net profit margin 5% = 920051 Dividend 19% = 174810 Retained earnings Net income= 920051

Umar Apparel private Ltd.

Less dividend = Add retained earnings AFN 834030 174810 745241 1552708 2297949

All afn is ful filled by long term finance

4 corporate Practices
Following is an analysis of corporate practices 4.1 Acquisition of capital In routine practices company acquire capital from 5 sources share capital that include ordinary and preferred shares . reserves of the company that include genral reserves for working capital need and capital reserves for meeting specific functions long term loans for meeting long term need and short term loans for working capital need but sometimes company use long term loans to meat working capital needs company also go for financial lease 4.2 capital budgeting in routine practices company use all four techniques for analysis but give preference to pay back period .all these techniques mostly used for paper work in real scenario company do not go for proper analysis for capital budgeting plans they just invest in those projects where they see potential of growth 4.3 Financial forecasting While preparing forecasting Company use previous year averages, trends and also consider orders in hand for the next year their capacity of production .they also consider economic conditions in market availability of resources 4.4 Investment avenues Umar Apperal Limited dont go for any long term and short term investment 4.5 Working capital/Inventory management system The requirement of working capital and inventory increase over the time due to increase in sales and increase in prices company meat its working capital requirement from short term loans and soma time from long term loans company manage its inventory according to orders company has well established internally linked inventory management system 4.6 Dividend policy In last two years Umar Apperal Limited declare dividend @15% the company consider following matters while deciding dividend amount Attraction of new share holders To maintain existing share holders To maintain market value of share Future investment As the company is debt based and mostly fulfill financial requirement through debts so companys main focus is on maintenance of existing share holders and market value of share

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5 Evaluation
According to our evaluation we give following suggestions and recommendations for Umar Apperal Limited SUGGESTIONS & RECOMMENDATIONS

There is no doubt Umar Apperal Limited is very organized textile mills. Still there is always room for improvements and following are some measures we suggest for improving the performance of the company. i) Decisions making should be decentralized. Middle and lower level management should have participation in decision making. ii) iii) iv) v) vi) vii) Company should have separate organized marketing department. Company should introduce products with its own brand name. Company should capture Middle East markets. Company should start its own Apparel Stores Chain. Promotions, increments and other benefits should be performance based in the company. The company should build a dispensary for workers in the premises. viii) Company shouldnt depend upon large customers it should also try to capture small ones. ix) x) Company should try to develop over all thinking in employees, not only departmental thinking. Company should try to create interdepartmental coordination and harmony.

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xi) xii) Company should try to control wastage of fabric. It reduces cost of production. Company should try to enhance its customer portfolio by increasing marketing efforts.

6 Visit report
We conducted two visits of Umar apparel division at Sargodha road Faisalabad during our visit we conduct interview of Mr. shahid naveed and discuss issues related to our project and get useful information

7 CONCLUSION:
Umar Apperal is a big name in knitted garments. Its working environment is simply the best in Faisalabad. The company has fully equipped cutting, stitching and packing units. Its quality assurance system is one of the best in Pakistan. It wins Best supplier awards 200102 from JC Penny the World Wide stores chain. The companys infrastructure is good. Offices are fully furnished. The company is centrally air-conditioned. The company is working in Papers less environment. Computerized bar coding and back tracking system are there. Company has good warehousing capacity for fabrics and garments. Customer portfolio of the company is very broad. World leaders in Apparel are working with . Umar Apperal Company has no separate marketing department. CEO and Marketing Manager of the company perform marketing functions individually. Company is engaged in merchandising and its merchandising department is very efficient for taking orders and fulfilling them accordingly. Companys decision making is centralized. All major decisions are made by higher management and implemented by lower management. Now Company is giving preference to its personals separate personnel department is established and a ladies wing is also incorporated. Financially the company is performing well. Its sales are increasing and its profits are rapidly growing.

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Simply we can say that Umar Apparel Division is performing well.