INTERNSHIP REPORT

ON
PUNJANAD TEXTILE MILLS LTD.
Submitted by:

Muhammad Ahmad

Submission Date:

Program: B.B.A (Hons)

Session 2013-2017
Institute of management sciences

BahaudinZakariya University,

Multan

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 Dedication

To my Allah, Who is almighty, The Creator of the world and who gave me power to study the world has
in it.

To my beloved parents who encouraged me well and taught me the lesson to learn till the end of my life.

To my most respectable teachers at all the stages of my study who every time showed me the right
direction, developed my personality to be a good and always useful citizen of this country and the society
where I live.

To the respectable staff of the company who supported me fully to complete my every task effectively
and efficiently.

To my beloved friends who always support me and help me in every stage of my life.

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 Acknowledgment

All the honors and glories are for my Allah who blessed me the power of determination, belief and power
of the ability to complete my work.

I am so thankful to my Beloved and most respectable parents and my teachers who believe me and
encouraged me to be at this position.

And I am especially thankful to Mr. Imtiaz Ahmad (Finance manager) who guided me fully.

I am also thankful to my friends and staff of Punjnad Textile mills.

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 Executive Summary

As per requirement to complete B.B.A (Hons) program in IMS BZU Multan I completed my internship at
Punjnad Textiles Limited. This is a six week orientation in which I was able to be prepared to understand
the different ways of doing business effectively and efficiently practically.

During my internship period, I am sharing my experiences what I have seen and what I have work done.
In my internship report I have mentioned The Textile Industry of Pakistan. I have mentioned the Vision
and Mission Statements of PTL. Then I have written the SWOT analysis about the company in detail.

Along with I worked in Finance and Accounts department of the organization. And I have done the ratio
analysis in detail.

I tried my best to write in detail what I have observed and learnt from my internship experience.

And this is my asset for future carrier.

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Contents
Dedication ..................................................................................................................................................... 4
Acknowledgment .......................................................................................................................................... 5
Executive Summary ...................................................................................................................................... 6
Introduction ................................................................................................................................................... 9
The textile industry: .............................................................................................................................. 9
History of the organization ................................................................................................................... 9
Competitors ........................................................................................................................................... 9
Mission statements ........................................................................................................................ 9
Vision statements ........................................................................................................................ 10
Our Moto..................................................................................................................................... 10
Policy of the Organization .................................................................................................................. 10
Quality policy: ............................................................................................................................ 10
Visions of Textile Industry ......................................................................................................... 10
Low road scenario: ...................................................................................................................... 10
Do-Able Scenario: ...................................................................................................................... 11
High Road Scenario .................................................................................................................... 11
Organizational Structure ..................................................................................................................... 11
Introduction of all departments ................................................................................................... 12
Reflective Journals .............................................................................................................................. 20
Functions of Finance Department ............................................................................................... 25
Ratio Analysis ..................................................................................................................................... 25
Gross profit Ratio:....................................................................................................................... 26
Operating Profit Ratio: ................................................................................................................ 26
Net profit Ratio: .......................................................................................................................... 27
Operating Ratio: .......................................................................................................................... 28
Stock Turnover Ratio: ................................................................................................................. 28
Balance Sheet Ratios........................................................................................................................... 29
Working Capital .......................................................................................................................... 30
Current Ratio:.............................................................................................................................. 30
Quick Ratio: ................................................................................................................................ 31
Absolute Liquid Ratio: ................................................................................................................ 32

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 Combined or Mixed Ratios: ........................................................................................................ 32
Return on Assets: ........................................................................................................................ 32
Return on Equity: ........................................................................................................................ 33
Earnings Per share: ..................................................................................................................... 34
Inventory turnover: ..................................................................................................................... 34
Vertical Analysis of Income Statement....................................................................................... 35
Horizontal Analysis of income statement ................................................................................... 36
Horizontal Analysis of Balance Sheet......................................................................................... 37
Vertical Analysis on Balance Sheet ............................................................................................ 38
PEST Analysis ............................................................................................................................ 41
SWOT Analysis .......................................................................................................................... 42
Conclusion and Recommendation .............................................................................................................. 47
If I Were the Manager ................................................................................................................................. 48

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 Introduction

The textile industry:

Some previous years Pakistan is said to be the economy like cotton and Textile due to being a farming
nation. That has a most noteworthy offer in the economy of the nation.

Efforts are being done to bring the revolutionized changes in the overall economy of the country and to
lift the textile sectors that is the most important part in the economy of the Pakistan.

History of the organization

PTL was incorporated as private limited company in 8th of February 1952 as private limited company.
And is located at MumtazabadVehari road Multan. Company basically produces yarn from raw cotton.
Company situated in Multan having 12000 spindles.

Competitors

The company has a lot of competitors in all over Pakistan especially in Multan and Faisalabad. But
company considers main competitors;

● Al Hamad Textile Mills Multan.

● Colony Textile Mills Multan.
● Hussain Group of Industries.

Mission statements

To provide the best services and products to our valuable customers and to satisfy our valuable
shareholders.

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Vision statements

To be a most earning and successful company in terms of products, quality and finance.

Our Moto

Honesty, fair dealing, buyer satisfaction and reliability.

Policy of the Organization

Quality policy:

“PTL the manufacturer of cotton and poly cotton fabric are committed to provide best quality of products
to their valued customers at competitive price and as per agreed time schedule. Our vision is associated
with the concept of continual improvement at all levels”.

Visions of Textile Industry

An innovation driven open market and energetic sector is:

 Internationally Cohesiveness
 Competitive Globally
 Exploit the opportunities, fully equipped shaped by MFA that enables Pakistan Economy among
the top ten textile exporting countries all over the Asia and also worldwide textile companies.

Low road scenario:

This situation represents only where historic rates of growth in the textile were recorded and also
maintained.

The analysis shows that there was a six percent growth rate was recorded per annum.

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Do-Able Scenario:

An envisioned increment in unit cost of yarn made ups an endeavor to keep up an exceptional increment
in offer in the individual market. Penetration in non-quota market was suggested along with increase in
blended yarn and fiber. Over all export growthinthis scenariowasestimatedas12percent per year.

High Road Scenario

The decided situation not just embraced the dress part as the train of the material fare development rate
likewise proposed varieties in the items that grips most elevated potential. Yet in addition relinquished for
instance sportswear, mechanical articles of clothing, ladies wear and so forth alongside expanding the
item portfolio and man-made pieces of clothing.

Organizational Structure

Hierarchy:

Director
Miss IffatAmeen

Director
Ameer Hussain Khan CEO Director
DawoodSaqlain Dr. Sabiha Nasir

Director
Dr. Wajiha Jan

CEO
DawoodSaqlain

General Manager
Shouakt Ali Khan

No of Marketing
employees: Manager Finance Manager HR Manager
Munawar Din Awan Imtiaz Ahmad Rao Aqeel Ahmad 11
Company has total 115 employees.

Main office:

Main office of the company is situated at MumtazabadVehari Road Multan.

Introduction of all departments

Company have four main departments;

1. Commercial Department
2. Export Department
3. Financial Department
4. Marketing Department

Commercial Department:

The commercial department is handled by Mr. Ameer Hussain Khan, who is the one of the directors of
the company. This department plays a vital role in the company. This department has two further sections;

1. Purchase department
2. Sales department
1. Purchase Department:

It is further divided in to two more sections

a) Purchase of cotton department

b) Purchase of store’s department
Purchase of cotton department:

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Cotton is main raw material in the textile industry.

It is seasonal crop that’s why it requires huge investment in advance and good decision-making abilities.
from mills daily stock position is received.

Purchase process

Following are the steps for purchase of raw material:

1) Visit of selectors
2) Selection of the sample
3) Testing the Sample
4) The Decision
5) The agreement
2. Store Purchase Department

Miss Iffat Ameen is the leader of this office. Also, she is one of the chiefs of the organization. The setup
of this office is;

 Director
 Purchase officer
 Asst. Purchase officer
 Purchase clerk

This office is in charge of the buy of following division:

a) Spare Parts
b) General store i.e. stationary, packing material, oil and lubricants.
c) Building material
This department prepares the following documents:

1) Demand requisition
2) Order form
3) Good receiving note

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Sales Department

This division is a standout amongst the most essential in any business. All work is improved the situation
moving. In this way, moving is essential character in each business. The structure of offers office is
under:

 Director
 Local sales manager Export sales manager
 Commercial assistantExport assistant

PTL is moving its item in neighborhood and in addition in worldwide market. Along these lines, this
office is isolated in to two areas.
A. Local sales department
B. Export department
Local sales department

Before all else PTL sold its real part to neighborhood market and afterward bit by bit entered in universal
market.

Procedure:

The activities performed by this department are in following:

a. Mainly director receives a phone call.

b. Executive assesses the ability to satisfy the request by counseling the everyday stock report
from the factory.
c. Director gives instruction to local sales manager that transfer the information on local sales
contract slip.
d. Prior to issuing/sending the agreement slip, deals supervisor checks the deal furthest
reaches of gathering and examine the issue with chief.
e. Deals office makes three duplicates of conveyance arrange marked by executive.
f. Unique duplicate is dispatched to the gathering and keeps one duplicate for record and one
for record area.

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Export Department

PTL began its deals from nearby market of multan and now real offer of the produce is sent out. The fare
offers of the organization went up to 52.08% in 1995 from 5.26% in 1990. Specialist Sabiha Nasir whom
is the chief of the organization heads this office. The structure of this division is under:Manager

Supervisor

Export associate

Typist

Finance Department

This department is the back bone of the company.

This department is made up of two departments:

 Accounts department
 Audit Department

Accounts Department:

This department is answerable for all accounting process of the company vis-à-vis the recording of the
operation, planning the accounting system, making of financial statement and computer submission to the
accounting process.

Plan of Internship

 I started my internship in PTL from 20th August 2018 to 9th September 2018.
 Being a finance student; I have worked in finance department.
 To be there and work there was a pleasant experience for me.
 I gained a lot of professional experience and professional environment.
 It is situated in main office MumtazbadVehari Road Multan.

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  There are manager’s offices. Mostly important decisions and meetings are held there. Also, the
production area is there. So, controlling, managing and reporting is much easier for the managers
as well as for employees also.

Marketing Department

The tasks performed by this department are discussed below.

Main purpose of this department is to make marketing strategies and to satisfy the customers.

Marketing Strategies

Past years have been hard for this industry as contention is consistently and edge of benefits are getting to
be bring down step by step. Our adversaries in Asia have come up bigly with lower costs coming about
because of lower overhead, less expensive and better uncookedsupplies and hardware.

Nations like China, India, Indonesia and Bangladesh assumed a functioning job in the texture showcase.

Enhancement in quality and creation ability is the primary region of concern.

Markets of yarn and dark texture was enhanced to expand the client's base and decrease the reliance on
the Far East.

In this exertion business with Malaysia, Korea, Taiwan, UK and South America was started if there
should be an occurrence of yarns.

The turning unit is extended with the expansion of number of shafts in last tear to expand the limit of
generation.

PTL has always refreshing its apparatus supplanting old one with new ones, prompting better efficiencies
and better-quality items.

Deserting the customary method for working together and our adventure toward greatness it has
continually growing its client's base and investigated the distinctive markets far and wide.

Keeping in view the interest of market PTL is sought after its methodology of significant worth expansion
and decreasing the reliance on dim yarn and dark texture.

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Having premonition to survey that in coming years esteem expansion will be the thing of things to come,
PTL moved in the direction of the accomplishments of its objectives of future expanding capacity in
esteem expansion.

We are investigating the open doors in alternate markets where PTL has a next to no development.

Multan is the star market of the PTL. The standard is coming in the following year and we have begun to
be arranged inside and also outside condition. Bedding is the majority of home material business.

PTL is refreshing its apparatus to provide food the necessities of the extending market.

PTL is likewise bookkeeping the issues of social responsibility genuinely. Numerous huge organizations
from abroad have visited the organization which can be turned in the joint endeavors.

The open doors are boundless, we should audit and investigate them completely to connect with the ideal
individuals in long run. What's more, in short run we are building a little measure of standard, which will
give us acknowledgment as a provider of sheet material. These classifications are best presented with new
item and advancement.

On the best it has grown more straightforward and closer relationship with its shoppers.

PTL has committed new staff with crisp vitality for the creating market. They have emphatically broken
the ground and we have extremely solid confidence that it will give us more volumes in not so distant
future.

PTL has given its staff better workplace and offices which can expand the profitability and proficiency.

Process of marketing

● Review of costing quotation to customer

● Check Greige
● Cost per delivery
● Receiving of approval
● Receiving of strike sample
● Greige booking
● Completion of processing of yarn
● Dispatching for approval of shipment sample

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 ● Approved sample of shipment
● Dispatching of shipment

Training Program

Learning:

It was a great ordeal that I have profited with devotion and duty. I have an concern in material
industry that is on the grounds that it is the huge help of the economy of the nation. In any case, one
thing o need to share it is difficult that looks, it has durability and confusion in its procedure, however
by and large it was pleasant and incredible. I need to share my getting the hang of with respect to my
temporary job that I have learnt by working in different divisions. First, I met Mr. Toshifumi the sales
representative of Kanai from Japan. I just discussed the financial strategies.
And I discussed about customer satisfaction. And at last I discussed about some marketing strategies with
him.
● In spinning department, I learned about yarn manufacturing, yarn specifications and the process
of cotton to yarn.
● I discovered that each issue is tackled by a deliberate way, as from root to the issue.
● I additionally played out a few assignments in the turning office, similar to how to ascertain
number of casings in the explicit request and how long are required for an explicit request
consummation.
● I found out about the showcasing method and the required archives and managing clients and
how the record is spared.
● Amid my temporary position I found out about the esteem that just clients starts things out. The
fulfillment of client is our thought process.
● The quality control as well inception in the textile department should be parallel.
● I learnt how the order is been pasted in the record and what documents are required.
● I learnt about some HR policies, hiring, firing, job description.
● I learnt that how an employee is hired, what criteria is required. How tasks are assigned to them.
How to control them.
● I learnt how an effective interview is been taken.
● I learnt how to record the daily transactions and how to interpret and how to report them in a
meaningful way.
● I learnt how to deal with customers, and some tricks and tactics to satisfy and motivate them.

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 ● I learnt how to motivate employees so that needed efficiency could be achieved.
Tasks Performed

I have performed many tasks during my internship.

Some of them are narrated below.

● I was given an errand to record some old budgetary information in Excel sheet. The information
was about a few clients and neighborhood merchants. The information contained the essential
data about the clients like names, address, names of undertakings, and so on. Is was in manually
written shape I simply glued all information in the delicate frame. And afterward I spared that
report in the PC of the organization.
● I was given an assignment to take the request in the neighborhood advertise I just met the old
clients of the organization. What's more, took their requests and spared them in the delicate
shape and I introduced it to my temporary job organizer.
● I was given a task to meet some new customers and brief them about the product and to
convince them to place an order in the local market.
● I was given another task for recovery from the customers. I was given some details of those
customers like names amount, phone numbers, address, etc. I just collected the cheques and
hard cash and gave them payment receipts. After the collection I represented all amount and
cheques to the internship coordinator.
● I was given a task to audit some files containing the information about customers and
information about cash inflows and outflows. I created a complete report and handed over to
the finance manager.
● I was given a task to purchase the lubricants from the market, I learnt the procedure of
purchasing of the company and payment procedure.
● I was given the task to estimate the life of machinery, with the help of my coordinator I learnt
how to estimate the life and the production estimation of machinery.
● I was given the task to advertise the product in the market. I was given some flexes which I
handed over in the market.
● I was given the task to solve the conflicts of labor. I tried my best to take an active part in the
problem solving.
● I tried to listen them very carefully. After that I was able to give some suggestions to the
manager. I learnt how to solve the problem efficiently and effectively.

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 ● On the earth hour day, I was given the task to make sure that lights and machinery must be
turned off to save energy.
● I was given a task to address the labor for safety measurements while working with heavy
machinery. I gave a comprehensive lecture on safety.
● I was given a task to prepare a presentation on air pollution and noise pollution. I prepared a
comprehensive presentation with the help of my colleagues and delivered successfully and
effectively.
● I was the member of inspection team for 3 days, I learnt a lot how to identify the problem and
how to identify the quality issues. Also, I learnt how to solve or overcome the problems and to
identify where and why those problems are occurring.
● I was given a task with the help of my colleagues to motivate employees and to increase their
involvement in their work. So that company could get the expected outcomes.

Reflective Journals

In this topic I am sharing my experiences during my internship.

The events and the learning which I observed and took part are discussed below. The experiences I am
sharing are on weekly bases.

Reflection#1

Date: 20th of August to 26th of August.

Internship Activity Description

Interviewing the Finance Manager (My Internship coordinator)

Summary:

The finance manager Mr. Imtiaz Ahmad Durrani is a give-it-to-you straight type of person. And I
expected him that he must be honest to my questions. I met him in his office after lunch. First, I discussed
the financial position of the company. He was confident about his policies which he opted to lead his
company to the top. He said he is leading this company as finance manager for last ten years. As he joined
company was not on a good position but till now company growth is about 2 times as compared to that
time. He also said he is satisfied that company is going in the right direction. In reply of my question he
said that he is satisfied with his team and he can rely on his team, he is satisfied with the efficiency of his
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team. In reply of my question he said that he is satisfied with his job he loves to be there that’s why he is
been there for ten years. And he wants to retire with this company. He said he is loyal with this company,
he stood with this company in worst times as well as in good times. In all ups and do8wns he made a
strong stand with this company. As the part of the company he relates his success with the success the
company. He believes in merit, discipline and consistency. These three rules are the key of his success
over this time. And he wants to be practiced by his team members. At the end I learnt that by honesty and
consistency you can turn your failure to the great success.

Reflection#2

Date: 27th of August to 02nd of September

Description:

An Administrator State of Mind

Summary:

Despite the fact that, the temporary job was not for entire year, I have seen a ton of changes in myself. I
am understanding that I am begun thinking increasingly like a head. Toward the begin I realized that I
know nothing about the acts of the authority. I don't have the foggiest idea about the kinds of the
administrations and along these lines I can't convey the type of pioneer I need to be. To begin with, to
comprehend my identity, as a pioneer I needed to see a great deal of self-reflection and impression of
genuine the pioneers. I pondered about my past encounters as a pioneer. Firstly recall came in to my mind
that I was the Class Representative in the school. I contemplated the problems I looked and also the solid
and powerless focuses as a pioneer. I realized that one of my solid point was that I had the ability to
characterize my thoughts and targets to a significant number of the general population. I had the expertise
to have every one of the individuals to be on the board with applying my thoughts. I additionally recollect
my blemishes. For instance, I continuallyanxious with looking for part's help and ensuring I was very
much enjoyed. I don't know how to agent assignments and would not demonstrate different individuals
that they had initiative capacities.

Furthermore, I saw pioneers in the organization. I asked myself "what brands anindividual a not too bad
pioneer", and "what arrangements they use with their workforce". In one example I asked, "for what
reason do my partners don't regard their pioneers". I think every one of these inquiries were essential
understanding what characteristics I needed to concur as pioneer later on? In any case, now that I have
great comprehension of being a pioneer, I feel certain that I have the right stuff expected to emphatically

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affect on the workers. My gaining from temporary position this week was, that it is essential to watch
pioneers that are critical and ones that are not all that powerful to comprehend characters that I need to
concur.

Reflection#3

Date: 3rd of September to 9th of September.

Description:

“Communication” is the key.

Summary:

As a future supervisor, I am always watching my present circumstance for bearing. I reflected week after
week about characteristics I would and would not have any desire to receive as amanager. I have seen that
individuals in every case nearly say that chairman are not compelling communicators. I have been worked
here in this organization under the authority of supervisors. I would state that every one of the
administrators are successful and decent. Precisely, they were great at ensuring the representatives had
their very own plans of work. In any case, they were not fruitful at conveying their desires on the staff and
for the organization. While I really trust that they did the monster they would, they be able to were not
constantly viable communicators. I think the greatest issue with poor correspondence is recognition.

Individuals acknowledge that other individuals realize what they are considering. Poor correspondence
depends on the desires and presumptions. As a pioneer, it is vital to make personnel and staff individuals
mindful everything being equal. While it might be a dull assignment to clear up the headings,
arrangements and strategies, it is fundamental and intensely impacts the atmosphere of the organization.
My learning is that absence of correspondence can cause staff individuals to wind up furious, bothered
and unfertile.

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 Reflection#4

Date: 10th of September to 16th of September.

Description:

Hiring and Screening

Summary:

Amid temporary job I found out about the employing procedure. This procedure was extremely open
since I am more often than not on various side of employing process. The majority of my encounters with
HR are from the perspective of another representative. This week I figured out how to screen the cases for
business. First the human asset chief and I sat down and made an exceed expectations spreadsheet of the
encounters to search for in the application. Next we arranged the applications as indicated by their
encounters. For instance a few competitors met six out of the six assigned six prerequisites while other
meet just two of the six necessities.

We chose to welcome the hopefuls which have scored six. I suspected that it was an intriguing that HRM
director made the inquiries for the competitors. I felt that those inquiries originated from the human asset
division. In any case, it was intriguing to realize that those inquiries were planned by the HR supervisor
himself. Anyway it was a brilliant ordeal conceptualizing inquiries by the HR supervisor. I have the
benefit of contributing in the meetings for an official side position. It was an awesome affair of seeing the
many qualified candidates confronting the issue of just having the capacity to pick a candidate. My
learning was that competitors must be impeccable in the paper (continue) yet may not be a decent
counterpart for work face to face (the meeting).

Reflection#5

Date: 17th of September to 23rd of September.

Description:

Other UnforgettableKnow-hows

Summary:

A portion of the all the more energizing things I got encounter were classified "presentation units". These
modules are intended to offer understudies to offer chance to see numerous parts of the organization and
not simply the region in which the understudies worked. Through these introduction modules I got visit to
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the generation region, go to obstruction and move over test,etc. see the auxiliary improvement lab (where
they have huge amounts of fascinating tests continuing for approval). These were energizing and
exceptionally hands-on. Preceding this entry level position I have no clue about the size of exercises
associated with generation.

Reflection#6

Date: 24th of September to 30th of September.

Description:

Overall Positive and Negative Lessons Learned

Summary:

While at PTL I picked up worked involvement, rehearsed with exceed expectations was indicating such a
large number of parts of the material business. I likewise made companions with an incredible gathering
of assistants from different divisions.

Obviously I was now and again was pining to go home Detroit isn't at all like the up. Despite the fact that
I was not hoping to work in a cubical, it was not as terrible as I expected in light of the fact that there
were numerous individuals around is still have dimension of mystery. Now and again there were calms in
my work, which can be built as either a decent or awful thing yet, everything leveled out. I cherished
dimension of trust my different administrators put resources into me. My director gave me delicate hours
(ordinarily I worked from 8:30 to 5:30) with the goal that I assert required a half day on Friday I was
allowed to take it, and he treated me like a genuine representative which I really esteemed.

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 Functions of Finance Department

Accounts Department ‘Functions:

A. To record all the occurring transactions is the main function of this department.
B. To design all the accounting policies of the organization is also the function of this
department.
C. To maintain the books of accounts of the organization.
D. To prepare the financial statements and to offer them to the shareholders.
By studying the functions of finance department it is concluded that the duty of this
department is to record and maintain the whole accounting activities running in the
organization. Director controls all the financial activities. The respectable director Mr. Imtiaz
Ahmad is leading this department.

Ratio Analysis

The ratio analysis of financial statements means to determine and present the connection of items in those
financial statements. This analysis however does not provise100 percent correct information but still it is
useful. This is statistical measure gives us the connection between two or more accounting figures.

We must be very careful while the calculation of these ratios and also during interpreting them.

There are many ratios, which can any analyst use but the types he must use should be depend upon the
purpose and situations, for which he is doing the analysis. For example the auditor must be well informed
and the ability to perform his obligations honestly and in a right direction. He should be informed about
the turnover of the receivables, liquid ratios, current ratios and level of earnings etc.

This process is to know the financial weaknesses and strengths of the organization by properly
determining and establishing the connection between income statement and balance sheet of the
organization.

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The advantages of ratio analysis:

1. Ratio analysis provides the complete financial statement in accessing the aspects of any
responsibility with respect to financial position, profitability and efficiency in processes.
2. It provides us a chance of comparison between the other firms and helps to take some effective
steps which can be good for organization.
3. Trend analysis helps managers in forecasting and planning in various ways by the use of ratios.
4. For investor it helps in decision making process either he should make investment or not and also
provides help for financial institutions.

Gross profit Ratio:

This ratio is of great importance in analysis of the trading results of the business. Gross profit ratio is
the ratio between gross profits to net sales expressed in %age. Also tells us ability of sales to generate
earning before any cost of business except cost of goods sold.

Formula:

Gross Profit* 100 / Net Sales

Years 2015 2016 2017

GP 117959467/567456516 115740768/675546817 151697958/967195516

ratio

20.7% 17.1% 15.68%

Results show that company’s G.P ratio is declining such following factors could show this trend

1. Cost of buying inventory has increased.

2. Selling price declined.
3. Theft is accruing. Sales could not be recorded.

Operating Profit Ratio:

It shows the percentage of profit earned on each sales dollar before and taxes. A high operating profit
margin is preferred. It takes into consideration trading results and operating expenses.
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Formula:

Operating profit *100 / net sales

Year 2015 2016 2017

Operating 91757430/567456516 92341811/675546817 115375165/976195516

profit

16.2% 13.7% 11.8%

Results shows that ratios are declining. It means sales are not generating enough profit. May be increase
in credit sales.

Net profit Ratio:

The yarn stick in the hands of management to measure the overall profitability. Profit ratio calculates the
%age of each sale of the dollar lasting after whole expenses, having all taxes be deducted. The higher the
margin of net profit is better for company position.

Formula:

Net profit (after taxes) *100/ Sales

Year 2015 2016 2017

Net 68867734/567456516 59090666/675546817 54475607/976195516

profit

12.1% 8.7% 5.6%

This ratio shows the profit generated by each Rs. of sales.

Results shows that in 2016 each percent of sales generated 8.7% profit, but it was less in 2017 and it was
5.6% company was in loss as compared to last year. But in 2015 it was highest 12.1%.

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Operating Ratio:

This Ratio demonstrates the expense of Company sold in addition to working costs and isolating by net
deals. It is commonly communicated in rate it gauges the expense of products activity per dollar deals.
This proportion demonstrates the operational effectiveness of the organization. Lower working proportion
demonstrates the high benefit and the other way around. A working proportion between 75% to 80% is
commonly viewed as standard.

Formula:

(CGS + operating expenses) *100 / Net Sales

Year 2015 2016 2017

Operating 449497049/567456516 583205006/675546817 851820351/967195516

ratio

79.2% 86.3% 88.0%

This ratio tells how much actually company is earning, before paying dividends. In 2017 company is
growing by almost two percent and it is good sign for its financial position.

Stock Turnover Ratio:

Each firm should keep up certain dimension of stock of completed merchandise to have the capacity to
meet the need of the business. This dimension of stock nor be too high nor too low. A too high stock
means higher conveying cost and higher danger of stock getting to be out of date though too low stock
means, the less of the business possibilities, in this way it is basic to keep adequate stock in business.

It is known as stock turnover it is the connection between the expense of merchandise sold amid a specific
period and cost of normal stock amid that period. It is expressed in number of times.

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Formula:

CGS/ Avg Inventory

OR

Net Sales/ Inventory

Year 2015 2016 2017

Stock 567456516/307178090 675546817/277762716 967195516/331178257

turnover
ratio

1.84 2.43 2.92

Company is showing a negative trend because of remarkable increase and it can cause the increase in
goods holding cost, which is not a good sign for the company.

Balance Sheet Ratios

This ratio tells us the correlation between two balance sheet items for example the ratio of current assets
to the current liabilities or the ratio of the proprietor’s fund to fixed assets. Both these are the portion of
the balance sheet items.

 Quick Ratio
 Absolute Liquid Ratio
 Current Ratio

29
Working Capital

Formula:

W.C = Current Assets- Current Liabilities

Year 2015 2016 2017

W.C 366672002-235624471 335482937-338653345 535726893-526884418

Total 131047531 (3170408) 8842475

In 2016 the result is negative which shows currents assets are less than liabilities and it has negative
effect on company’s credibility. But in 2017 it is positive which a positive sign is.

In 2015 also, it is positive and the highest value. But overall is maintain a healthy ratio.

Current Ratio:

This proportion tangle be characterized as the connection between the present resources and the
present liabilities. This proportion be otherwise called working capital proportion. Current proportion
is the best of dissolvability or it is the best of brief budgetary quality. In the event that the present
proportion is higher than it implies the present resources are more liberated from obligation
guarantees by lenders and the loan bosses feel themselves progressively fulfilled.

It demonstrates the liquidity of the firm or transitory monetary position of the organization. The
standard for this proportion is 2:1 it is determined by current resources partitioned by aggregate of the
liabilities.

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 Formula:

Current Assets/ Current Liabilities

Year 2015 2016 2017

Current 366672002/235624471 842062800/338653345 1522456205/526884418

ratio

1.55 2.48 2.89

This ratio shows the portion of liabilities in the current assets. Company has slight increase in ratio
overall company position is good. As company can satisfy its current debts easily.

Quick Ratio:

It can also be said as the acid test ratio or liquidity ratio. It is the ratio of the liquid assets to current
liabilities. The true liquidity assets to current liabilities. The true liquidity asset refers to the ability of
the firm to pay its temporary liabilities as and when they convert payable, the standard for this ratio is
1:1:2.

Formula:

Liquid assets/ Current Liabilities

Year 2015 2016 2017

Quick 366672002/235624471 335482937/338653345 535726893/526884418

ratio

1.55 1.00 1.01

This ratio shows the portion of current debts in liquid assets. Company’s liquidity is decreasing which
shows a negative trend. Company’s ability is gradually decreasing which can distract the investors.
Company’s paying ability is decreasing.

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Absolute Liquid Ratio:

It is the ratio of the absolute liquid ratio to current liabilities. Absolute liquid assets are cash in hand,
cash in bank and marketable securities.

The standard is 0.5:1.00.

Formula:

Absolute liquid assets/ current liabilities

Year 2015 2016 2017

Cash 1090018/235624471 870027/338653345 1038018/526884418

ratio

0.004 0.002 0.002

Company’s ratio is less than standard amount. Which shows that company’s position is not good, and
it is declining. Company’s position is very poor in this ratio.

Combined or Mixed Ratios:

This relationship shows that the exhibition between the profit and loss account and balance sheet items.
The important ratios are;

A. Return on assets
B. Return on equity
C. Earnings per share

Return on Assets:

It shows the return of the total investment with the borrowed money or invested by the owner in the
business. It is obtained by net profit on total assets.

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Formula:

Net profit (after taxes)/ total assets

Year 2015 2016 2017

Return 68867734/1111587458 59090666/842062800 54475607/1522456205

on assets

0.062 0.070 0.035

This ratio shows that how much part the company’s assets are generating income. In 2016 organization
has great increment in the proportion which is great however in 2017 it is diminishing with incredible
distinction which is disturbing circumstance for the organization.

Return on Equity:

This is the measure of the return on assets on ordinary capital of the company. It is indicated for every
hundred rupees of a capital invested in the firm how many rupees are lost or produced in this year. If it is
increasing than the previous year than it is good.

It may be obtained by dividing the net profit on the sum total of ordinary capital reserve and profit.

Formula:

(Net profit (after taxes) – preferred dividend) / Equity shares capital

Year 2015 2016 2017

Return 59296006/150000000 46908345/200000000 106534577/250000000

on
equity

0.39 0.23 0.42

This ratio tells about return to common stockholders. In 2017 it was more than 2016 it attracts investors.

But as compared to 2015, 2016 is declining which is not a good situation.

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Earnings Per share:

It is the good measure of productivity when compare the earning per share with other companies. EPS is
the small variation of the return on equity capital.

Formula:

(Net profit (after taxes)-preferred dividends)/ No of equity shares

Year 2015 2016 2017

EPS 59296006/15000000 46908345/25000000 106534577/25000000

3.95 1.87 4.26

This ratio shows that company is more profitable than last year.

Company earned more profit on each share.

In 2016 company is presenting descending trend but increasing in next year, overall company is in good
position.

Inventory turnover:

Formula:

CGS/inventory

Year 2015 2016 2017

Inventory 449497049/307178090 559806049/277762716 815497558/331178257

turnover

1.46 2.015 2.46

This ratio shows that in 2016 company’s each inventory was moved 2 times but in 2017 it was almost 3
times this shows company’s good position. As compared to 2015 it is increasing almost twice which is a
good sign.

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Vertical Analysis of Income Statement

2015 2016 2017

Net Sales 100% 100% 100%

CGS 77.9 82.8 83.5

G. P 20.4 17.1 15.5

Operatingexp

Admin 0.1 0.26 0.69

Selling 0.03 3.19 3.0

Total O.P Exp 0.13 3.45 3.69

Operatin G. profit 15.9 13.6 11.8

Profit before tax 12.7 9.5 6.5

Profit after tax 11.94 8.7 5.5

Sales tax 8.18 0.76 0.9

Net income 22.2 15.69 16.4

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Horizontal Analysis of income statement

2015 2016 2017

Net sales 100% 119% 172%

CGS 100% 124 181

G. P 100% 98 128

Operating Exp

Admin 100% 31.5 119

Selling 100% 105 143

Total 100.6 39.5

Operating Profit 100% 38.1 69.5

Profit before tax 100% 353.7 353.2

Profit after tax 100% 439 404

Selling tax 100% 109 205

Net income 100% 82.7 125

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Horizontal Analysis of Balance Sheet

Asset Portion:

2017 2016 2015(base year)

Property and assets

Operating fixed assets 94.5 99.5 100%

Capital work in process 99653 89.9 100

Deferred cost 91.1 112.6 100

Current Assets

Stores and spare parts 127 943 100

Stock in trade 107 90.4 100

Trade debtors 206 142 100

unsecured

Other assets 423 77 100

Cash and bank balance 95.2 79.8 100

Total assets 146 91.5 100

Liability and capital Portion

2015 2016 2017

Share capital and reserves

Authorized capital 100% 20 30

Issuedsubscribed, paid up capital 100 133 166

Un appropriate profit 100 70 106

37
 Long term loans 100 124 372

Loan from directors 100 100 100

Deferred liability for gratuity 100 147 80.9

Current Liabilities

Current portion of long term loans 100 150 142

Short term finance 100 197 303

Other liabilities 100 52.1 117

Taxation 100 322 92.6

Total 100 75.7 136

Vertical Analysis on Balance Sheet

Assets Portion:

2015 2016 2017

Property and assets

Operating fixed assets 44.5 30.7 58.5

Capital work in process 12 33.4 10.2

Deferred cost 1.51 0.67 1.5

Current assets

Stores and spare parts 8.0 0.8 1.12

Stock in trade 27.6 21.75 13.3

Trade debtors 2.63 1.62 2.04

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Other assets 3.52 10.9 3.5

Cash and bank balance 0.09 0.07 9.10

Total 100% 100% 100%

Capital and liabilities portion

2015 2016 2017

Shared capital and reserves

Authorized capital 8.9 19.7 23.7

Issuedsubscribed, paid up capital 13.4 16.4 23.7

Un appropriate profit 13.5 10.5 12.5

Long term loans 39.8 36.3 19.6

Loan from directors 2.69 1.97 3.5

Deferred liability for gratuity 0.14 0.08 0.276

Current Liabilities

Current portion of long term loans 4.1 4.3 8.19

Short term finance 10.1 24.5 26.5

Other liabilities 5.94 5.09 4.09

Taxation 0.9 0.63 1.42

Total 100% 100% 100%

39
Vertical Analysis of balance sheet

● The contribution of fixed assets to total assets is decreasing in 2015 and then increasing in 2017
overall it is good sign.
● Contribution of total non-current assets is decreasing, and it is not a good sign.
● Total current liabilities are first increasing in 2016 and then great increase in 2017 which is
alarming situation.
● Total current assets are not satisfactorily increasing.
● PTL has not satisfactorily increasing equity which shows that company is not attracting the
investors.

Horizontal Analysis of Balance Sheet

● The contribution of non-current assets is showing dramatically great increase in 2016 and 2017.
● Contribution of current assets are also increasing with heavy margin, it is good sign.
● PTL is having good profit ratio but not satisfactorily.
● PTL has a good portion of long term assets.
● Operating profit ratio is almost 100% which is excellent.
● Total assets are good in 2016 but great increase in 2017.
● Total liabilities are less in 2016 but great increase in 2017.
● Liability portion is not good for company’s health.

Vertical analysis of income statement

● Cost of sales part is higher but not good increase in the gross profit. It is decreasing.
● The reason of this decrease is the increasing cost of raw materials.
● Operating expenses are low in both years.
● Operating profit is decreasing
● Also, overall income is getting low gradually due to high taxes and high cost of raw material
another reason could be low profit margin due to competition.

Horizontal Analysis of Income statement

40
 ● Revenues are increasing in a good portion.
● But cost of sales in also increasing.
● Gross profit is increasing that is good sign.
● Expenses are increasing as compared to last years, not a good sign for company.
● But at the end overall trend of net income is good, increasing with a good margin.
● Company is paying high taxes.
● Also cost of raw material is increasing.

PEST Analysis

It is a strategic planning method to reduce the threats.

Firm will gain a valuable result by this analysis.

The benefits of this investigation including more financially savvy, further comprehension of business,
sharpness to dangers and a strategy to misuse the chances.

Political Factors:

Political factors have always an impact on textile industry.

Govt imposes cost policies and fixes the price of cotton price.

Imposes sales taxes. Imposes the labor laws.

And Govt is playing active part in last years.

Economic factors:

Company is facing a strong economic competition as major player include Fateh textiles, Gull Ahmad,
Chenab mills and more companies.

Social factors:

The social structure of Pakistan is closely tied.

The trend is now changing as general public is getting educated and goals oriented.

Technological factors:

41
Innovation is indispensable for upper hand and is a noteworthy drive for material industry.

Major mechanical changes are found in this industry, apparatus is getting present step by step and it is
essential for convenient generation.

SWOT Analysis

PTL managers continuously evaluate missions and goals and after that they survey inside and outer
circumstance to perceive components that impact the association's practices. To decide such components
SWOT investigation is finished. This examination causes chief to distinguish the association's qualities
shortcoming possibilities and weights.

Strengths

➢ Updated machinery
Mill have latest machinery, which is been imported to encounter international quality standards.

ISO 9002 certified

Company has got ISO 9002 certificate which insures quality standards according to Pakistan
ordinance.

➢ Strong financial resources

Company has strong financial resources. In last year’s company earned attractive profit clearly it is
invested in stock market.

 Strong image in market

Organization has powerful image in the market. Buyers can buy same products from competitors at
little price but due to strong image they are buying only from PTL.

➢ Recognized management
PTL has recognized management. Management is very competent. They know how to gratify the
customer. They arehigh qualified mostly they are M.Comers, MBA’S and IT specialists.

➢ Products innovation ability

Management has the abilities of product innovation.
➢ Strong relations
42
 PTL employees are very social and well-organized and they have associations with the other investors
which is a big economicaladvantage in the market.

 Strong security system

PTL has great security system. There are many security cameras which capture each and every
movement.

 High quality product

PTL is utilizing most recent innovation like they have a la mode hardware by which the estimation of
items delivered is high.

 Wonderful market position

Being an old material organization in Pakistan Company has great position in the psyche of the clients.
Furthermore, individuals are faithful with the organization.

 Satisfactory financial resources

Proprietors of the organization is one of the most extravagant individual in Pakistan and have a wide
interests in different organizations that is the reason organization has solid money related position.

Weaknesses

➢ Centralized administration
Management of PTL is centralized.

A wide range of choices are made on the best dimension. Because of incorporated assignment of
intensity troughs have no expert to decide. It is said that when specialist is decentralized it can settle
on preferable choices over the best supervisors. A few experts must be exchanged to center chiefs. At
that point the seniors can control the colleagues.

➢ High cost of manufacture

Cost of production is increased due to material labor wages, high cost of power and production fixtures.
➢ No interested staff
Staff is not properly motivated due to less offered incentives and less wages by the company.

➢ Less advertising activities

Company has less advertising activities in the media.

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➢ Old staff
Company have old staff. They are experienced, but they have less skills in computers. And they have
strong relations with top management so it difficult to replace them.

➢ Less discipline
There is less discipline particularly in finance department. Files are scattered here and there. Mostly
employees come late from lunch break. Many pages are wasted due lack of experience to use
Photo copy machine.

Small international market share

 In spite of the fact that organization has wide national market yet it has low piece of the pie in the
worldwide market because of solid contenders like china, India and Bangladesh.
 Patheticappearance in international market

Because of other dedicated textile countries like china Bangladesh etc? International images very weak
these counties are providing the cheap products in the market.

 Less advertising activities

Advertising and promotional cost of the PTL Company is very low it can take advantage of more turn
overs.

 Lack of welfares and award for the employees

Some facilities that other providing their employees like transport and, medical fee are not providing to
their employees because of which the efficiency of the employees decreases.

Opportunities

➢ Potential in Market

44
➢ Organization have high potential in market because of popularity of clients. Generally execution of
the organization is better, so the potential is kept up because of solid relations with clients. The
potential is likewise better because of good relational abilities of promoting staff. Loads of
individuals know the notoriety of the organization's offer cited in the share trading system.
➢ Entering new market
Company have a lot of openings entering in new market due to strong competition among competitors.
Company purchases cotton at low price at this edge.
New product line
Company have decided to add weaving because company have earned a lot, so they want to expand
the activities.

➢ Faster market growth

No doubt there is a lot of increase in growth as compare to last records. Most of the investors invested in
this company. All this is due to skilled mangers and labor. Mostly employees are local, so this is
another edge in the environment for their good relations with customers.

 Organizationcanhiremore well educated and experienced persons

Company can take advantage by hiring more skilled persons, can hire young persons, fresh and
energetic staff for the betterment.
 Organization can expand and more product lines
Company is not dealing currently in the knit wear they can expand their product line by
producing the knitwear. Thus the production cost will decrease. Also company has good repute in
the market.

45
 Threats

➢ Political instability
In Pakistan mostly Govt remains instable and their policies change after short span of time. This can
disturb the whole process of the organization.

➢ Economic unpredictability
The economy is also instable due inflation, and no one can say that what will happen other moment, and
values also vary; this can affect the costs and profitability of the company due to changing prices of
cotton.

➢ Tough competition
No doubt there are a lot of companies in textile business. That is why PTL has many competitors due to
this price of yarn remains low also profitability is affected.

➢ Adverse govt policies

The policies of Govt of Pakistan affect the operations of PTL and decisions of Govt are time taking and
very slow that’s why operations are badly affected.

 Buyer needs, demand variations

Because of examinationplan and products of PTL is just reasonable in the globally they are not
fulfilling the demands of the customers.

➢ Technology
The technology is most important in production environment the client demands fast distribution. Due
to old machinery and slow process of delivery customer cannot be satisfied fully.

 Globally Economic Unpredictability

Due to of monetary unsteadiness PTL is been influenced a ton. Expulsion framework which is expanding
on everyday premise on the planet can make numerous troubles for the organization and any weakness in
the world like 9/11 may influence likewise the general fare.

46
Conclusion and Recommendation

As the textile companies are in crisis but PTL performed very well in is condition. The roads are still open
for more improvement. I expect that suggestion given by me will not be positive for management, but
workers will do their job efficiently.

1. There is brought together specialist, executive takes every one of the choices just, and even
directors for their sake can't take choices on the grounds that the appointment of power makes
duties. On the off chance that the supervisor will assign some specialist, the chiefs would feel
themselves dependable, so they work genuine by this executive will invest their imperative
energy for shaping arrangements and will look for open doors for development this will help in
making certainty among laborers.
2. I might want to indorse that chiefs ought to build up a few approaches for advancement of
compelling specialists. As there isn't any arrangement for advancement of such laborers.
3. There is requirement for verification any idea for supplemental classes for the representatives. On
the off chance that the proprietors might want to make a few courses of action for the preparation
of their workers. By this efficiency will increment.
4. The principles build up the expense of merchandise is 70% to 80% of the aggregate expense of
products yet we see the expense of products of PTL is 90%. That is the reason it is vital there
must a different office for cost control.
5. There is no legitimate path for gaging workers and subsequently there is no additional advantage
for the effective representatives.
6. There is smooth rate of increment for every one of the representatives. What's more, this level
rate is additionally slight this is refinement discontent among the representatives. This rate ought
to be annulled, and augmentation should be given dependent on effectiveness and execution.

47
If I Were the Manager

The things during my internship observed in a way that might have been improved to a certain level were
not up to the mark. These points are discussed below;

Social Interaction Activities

The personnel were not provided with any kind of social activities where employees from different
departments can make interactions with each other. In this way their working collaboration to
achieve the organization strategic goals might have been helped a lot. So I as a manager would be
creating such kind of activities like, employees achievement award ceremony, coffee meetings,
etc. the core purpose of this activity is to make employees not to feel that they are not the working
robots rather to provide them recreational activities.

Assigning Tasks That Will Stretch Employees:

When my employees begin take on more tasks and demonstrate that they are skilled, I will give them task
that will expand their skill set and help them to make more possession of their wok. For example
I can give them the role playing of the manger that will give them the chance to think out of the
box, facing new issues that a manager will face. So they will learn to tackle the things in a decent
way.

Let People Make Mistakes:

In the greater part of the associations individuals are requested entirely not to do any missteps, and
they are disapproved of this message over and over that they feel reluctant to settle on their own
choices since they probably won't do it appropriately. That is wind up making the representatives
increasingly dependent on the director. This makes them less successful and foolishly depletes an
imperative offer of the chief's time. With the goal for individuals to have an independent perspective,
they have to learn, so as to learn fairly they have to commit errors. So I will confide in them and give
them a sensible edge of blunders. I will state that being a decent chief does not being an
accommodating person. In the event that any of the laborer keeps over pass the line or neglecting to
meet the chances, I will utilize a criticism sand which or peaceful correspondence to exact the
condition. In the event that that comes up short, I will fire them.

That’s all from my side.

48