Project on Gulistan Textile Mills

ACKNOWLEDGMENT All the appreciation and gratitude is for the ecclesiastic Allah who is the most merciful and beneficial. He is the however one who break up(p)owed us intimacy and wisdom and made us cap equal of doing the ambitious tasks. We give thanks the all- indicatorful for all those capabilities that He granted us to complete this project. second we be actually thankful to our teacher Prof. Aitzaz Khursid who contriveed twenty-four hours and night with us for this project. He helped us at each and every step and guided us in every difficult bunk. We argon thankful to the otherwise teachers as well whose support and guidance was an as perform for the completion of this project.We would like to thank our p bents and family members as well beca exploitation up they provided us the monetary and moral support in doing this project. And last of all whatever we bring forth done, it is just beca mapping of the coordination and coope proportionn of all the conference members. They worked hard researched by dint of distinct sources. Table Of Contents Industry profile.. . .. 4 Comp each Profile. .. 6 mickle Statement. . 8 Mission Statement. .. 9 chap Analysis . .. . . . 11 * policy-making Forces * Economical Forces * Social Forces * proficient Forces Porters Model 13 Opport building blockies & Threats. . . 15 EFE intercellular substance. . .. 17 lively Success Factor.. . . 18 Competitive Profile Matrix.. . .. 19 Strategic Internal scrutinise Of Dep blindments.. 21 * foodstuffing * finance * Accounting * MIS * HR Organizations forces & asthenicnesses.. . 7 IFE ground substance 38 SWOT Matrix 39 grand Term Non-Financial Objectives40 Long Term Financial Objectives41 Findings41 * EFE * CPM * IFE SPACE Matrix. 43 BCG Matrix.. 46 IE Matrix.. 48 Grand Strategy Matrix. .. 50 QSPM52 decisiveness. 56 Learning57INDUSTRY PROFILE The cloth and app bel assiduity is often clock clock considered the back turn out of the Islamic Rereality o f Pakistans economy. In that south Asiatic re unrestricted which sh bes borders with China to the north, India to the east, and Iran and Afghanistan to the west, as well as the Arabian sea to the southwest cotton plant do cloths and app bel historically were the focus of the sedulousness, brinyly because of the fully gr admit amount of cotton grown in the country. In fact, Pakistan currently ranks fourth p device among world cotton producers and third among world cotton consumers having produced 9. trillion 480-pound bales and consumed 11. 8 million 480-pound bales in the 2010/2011 food grocerying season. Pakistani fabric manufacturers recently stick out diversified their intersection purposeings to admit artificial yarns, fabrics and appargonl as the pixilatedness of purpose of shifts in global demand for cotton-blend app bel. opposite recent economic factors, much(prenominal)(prenominal) as the end of cloth quotas in 2005, give up caused Pakistans materia l assiduity to continue to adapt in an effort to re important globally war-ridden. The republics framework and app atomic follow 18l manufacture in 2011 consisted f ginning, spinning, man-made fiber, weaving, finishing, appargonl, terry towel, tarpaulin and undersidevas, and knitwear machinery sectors. The textile and app arl diligence as a self-coloured employed well-nigh 40 percent of add to forceher industrial workers and accounted for 46 percent of tot up manufacturing. There were 1,221 ginning social units, featuring an instal guide capacity of 20 million bales of cotton. The spinning sector comprised 408 spinning units, with an installed capacity of 157,143 rotors and 50 complicated units, with an installed capacity of 10. 1 million spindles.The countrys 10 man-made fiber units had an installed capacity of 660,000 tons. The Pakistani governments Board of enthronization reported 124 large and 425 teeny-weeny weaving units, with a bestow intersection capacity of 4. 4 billion squ ar meters of fabric. With regard to finished textile wides, the countrys 5,000 apparel units featured an installed capacity of 450,000 sewing machines, essay organizers reported. The installed capacity for Pakistani knitwear manufacturers numbered 12,000 machines. Tarpaulin and canvas take capacity number carbon million square meters, while installed capacity of terry towels total 7,500 looms.While the Pakistani manufacturing sector as a whole in 2011 accounted for approximately 25 percent of the countrys lookd pull in domestic output (GDP) of US$395. 2 billion on a purchasing-power-parity derriere, the textile intentnesss diverse crossing offerings accounted for 11 percent of the countrys GDP, as reported in the aforementioned IGATEX Pakistan report. In addition, approximately 60 to 70 percent of total exportations came from the carrefourion of cotton textiles and apparel, which are considered Pakistans largest industries.The Business Recorder, a Karach i-based financial unseasonedbornspaper, reported in June 2011 that the textile industrys apprise addition accounted for much than than 9 percent of the GDP, and that the industry had a merchandise grapple of approximately 30 percent in world yarn shell out and 8 percent in cotton cloth. With the recent decline in textile exports and a record-setting trade shortage that reached to a greater extent than $2. 1 billion in the first two months of 2012, Pakistans textile industry currently is confronting new economic challenges.Including the spinning, weaving, value-added apparel and be and home textile sectors had begun to downsize its workforce. A hike in wager place in July 2011 by the countrys central bank led to ontogenesiss in export refinancing, long- confines commercial and industrial credit, and, ultimately, rising production address. Further much, exporters are facing steep expense challenger from manufacturers in China, India and Bangladesh. phoner PROFILE Gu listan gathering of Companies began with the establishment of Gulistan cloth mill about in 1966.Gulistan free radical of Companies since then the sort has expanded substantially to bugger off one of the largest textile groups in Pakistan with over 6000 employees Gulistan collection of Companies main focus of this carefully designed expansion has been to add stability to patronage obligations and win customer trust in product grapheme, reliability and fencence. This approach towards progress and out fruit is discernible in Gulistan Groups enormous victory in all of its undertakings to date. Gulistan Group of Companies an annual disturbance of US$140 million. Gulistan Group of Companies all units are listed comp every(prenominal).Gulistan Group of Companies head offices are in Lahore Karachi. Gulistan Group of Companies has * 11 spinning mill around producing 60,000 tons of yarn per annum. * 2 woven fabric mills producing 16. 5 million meters of fabric per annum. * 4 Power generation plants producing 21 megawatts of electricity. * Gulistan Group of Companies are manufacturing (Yarn, Fabrics, Apparel, Cotton Clothes, * Towels, Bed wear, knitwear, Raw Cotton, etc) Yarn Gulistans 9 spinning mills with 215,000 spindles and 4,200 rotors produce 70,000 tons per family of cotton mix yarns from 4/1 to 120/1 as well as up to 10-plied yarns.This is complemented by a yarn dyeing plant with a capacity of 3,000 tons per year of a wide variety of hodgepodge and dyed yarns. Gulistan Group has one of the largest and most versatile spinning apparatus in Pakistan. Fabrics The state of art weaving unit with its 255 air blue jet and projectile looms sustain a capacity of weaving 36 million linear meters of extravagantly fictitious character greige fabric in widths ranging from 40 inches to receipts inches and thread counts as advanced as 600 in single, Apparel Gulistan has set up a 500 stitching machines woven apparel unit ensuring aesthetics, elegance a nd fineness.Gulistan is producing 8000 trousers per twenty-four hour full stop with its latest state of the art machinelike setup, production preparedness systems and design mechanism. Home fabric Home Textile products are the latest addition to the groups product range. A manual fabrication facility is being setup and exports take for already begun of top tone of voice yarn dyed sheet sets into the United States. sight Statement * To become a complete and comprised textile conglomerate. * To become an institution that de stretch forthrs extra value through and through superior product timberland and professionally principled counseling. To stay abreast of scientific advancements to reach the ever-changing and challenging requirements of our customers. All of us at Gulistan are lodgeted to delivering to a greater extent to our customers all over the globe. We seek growth through state of the art technological innovations and continuous mitigatement in our operation s. Analysis basalally Vision teaching is the answer of the question that what do we deficiency to become? And it is a really important component of the organization. If the organization wants to formulate any scheme move in vision is the key component required for that.Lets collapse the vision statement of Gulistan point by point. * Conglomerate means A group of diverse companies under general ownership and run as a single organization so its clear that they want to take over the whole textile industry under their own companionship. This glows a clear message to the contests that they want to compete. This statement motivates the employees because they made it clear what they want to become. * The organization promises to deliver quality product and good oversight so this is their emulous advantage because the quality and the anxiety guard the difference.This statement sends the clear message to the customers or the target grocery terminus that quality and vigilance is their core competence. * As we all know that this is the fourth dimension of globalization. The customer demands and inescapably are more challenging than the previous times so technological advancements are necessary for the organization. Its a good thing to include in vision statement because it shows the strength of the organization that they opened their room attack for technological advancements to fulfill their other vision components. The major portion of the tax applyd by Gulistan is from their exports so they withal covered the global prospective by stating that they are committed to deliver more for their customers all over the globe. This likewise covers that they are targeting the customers not only from Pakistan nevertheless all over the globe. * As the core rule of vision that it should be broader so they stated in their vision that they allow for seek through state of the art technological innovation and continuous amelioratement in their operations.Thi s shows the broader vision of the organization that they are not stereo type and they always open their arms for improvements. This is a really a good vision statement which covers all aspects like Industry, customers, core competence, militantness, product and employees. Mission Statement Commitment towards excellence, to our customers, to society is the infrastructure that we engender built upon from it we drive our strength. Gulistan has held the traditional values of honesty, integrity and consignment in utmost esteem. The structure of each of our employment units is designed to integrate experience with technological advancement.With the effort and expertise put in by the 10,000-members of Gulistan family, our state of the art units are producing world-class yarns, fabrics, made-ups, apparel and household products for our topical anaesthetic global customers. Our plans are geared towards expanding our global presence providing quality products and underdeveloped relatio nships while at the same time serving the community we live in. Analysis Mission statement must view 9 underlying components lets see that how gulistan is fulfilling those 9 agency components and I as well as mellowlighted them supra. nodes topical anesthetic anesthetic anaesthetic anesthetic and global customers. * yields Yarns, fabrics, made-ups, apparel and household products. * food marketsInternational & Global commercializes * engineering To integrate experience with technological advancement. * Concern for survival, growth and clams profit income enlargement of global presence. * Philosophy Traditional values of honesty, integrity and commitment in juicy esteem. * Self Concept Providing quality products and developing relationships. * Concern for public image Commitment towards excellence, to our customers, to society. Concern for employees The effort and expertise put in by the 10,000-members of Gulistan family. This is a really a good & comprehensive mission statement which covers nine basic components of mission statement like customers, products, markets, engine room, line for survival & growth, philosophy, self concept, concern for public image & concern for employees. PEST compendium Political * Rules and regulations by the government for the collection of taxes create mend on the organization. * Rules and regulations oblige by the government on import and export effect the organization. assorted types of export duties by government besides realized organization to monish from export their product. * Day to day changing in political situation in Pakistan had a incompetent b low-down on organization. * Organizations are disapprove to expand their business collect to diverges in political situation. Economic * Economic modify of our country is very bad so it has a vast wedge on industrial sector. * Due to bad economic condition industries are suffering from low gain. * Due to swelling profit of industries is reduci ng because it impact on industries to increment in prices of products. forged economic condition results in to reducing number of industries in a country and to unemployment. Social * Unemployment is increasing day by day overdue to electricity shut downs in our country. * military capability of the people on work is not improving due to low salaries are given to them in response to their work. Technological * Volatile technologies are entryed day by day which has a great impact on organizations to march in market. * loyal internet browsing eliminates gap between importers and exporters. * Modern customized bundle stifles forgiving effort and it tends to save time and money of owner. Advertising agencies tiller it blue-blooded to access their customers at home at any time on national and multinational level. * Innovation in technology increases efficiency of organizations to compete in the market and to increase productivity. Conclusion Technology has a great impact o n the industry. Due to technology, they face new challenges, which check their abilities and improve performance. Gulistan adapts latest ways of technology & is successfully doing their business. PORTERS feign 1. Threats of new entrants The threat of new entrants in the retail industry keeping in view the brands that we build chosen is low.As the scope of the textile business, Gulistan is providing a vast category of products under one roof. The new entrants face slightly(prenominal) barriers which primarily includes the mettlesome costs involved in starting this business. Secondly the product offered by them is highly variediated product which alike discourages new entrants. With such established brands it becomes very difficult for the new entrants to make a locate in the market or capture market cover. third the cost involved in having an exclusive distri entirelyion is very high which to a fault serves as a barrier to entry. 2. Threats of patronagesWe are analyzing th e threat of substitute can be classified into the future(a) category of * topical anesthetic grocery store * International Market The threat of substitute is medium to low in topical anaesthetic market. pack might switch brands if they think due to any reason the brand is not providing satisfaction. But on the other make people who are brand loyal would not think of any substitute. But in the supranational market the threat of substitutes is clean high because other industries competition. 3. Rivalry among breathing crocked The rivalry among the textile industry is high, some(prenominal) in the topical anaesthetic anaesthetic anaesthetic market and for the transnational market.In crusade of the local market the number of competitors is very large and all moves are competitive. legal age of them are even located in the same areas are challenging each others positions, taking gross revenue from each other. The world-wide market is also on the competitive moves. L aunch of new product by any brand impacts the other brands like the recent launch of Gulistan impacted the gross revenue of other exports international brands too. 4. Bargaining power of suppliers The bargain power of suppliers is high in retail industry as the suppliers can supply to any fast they want.In international local market some industries drive multiple suppliers and therefore endure great impact on the gross revenue of the business. The products at these stores are differentiated and therefore the switching costs involved are very high. Alongside the substitutes in case of suppliers is also not viable as brand equity is also very important. 5. Bargaining power of buyers The dicker power of buyers is high in the international market alone in case of local markets it is low. The reason for the high bargaining power in local market is * Plentiful flick suppliers harvest-tide not differentiated * Access to substitutable products * Plentiful options for consumers. O n the other hand in case of the international market the bargaining power of buyers is low because * Less alternatives * Differentiated product * Changing supplier costs high to the seller Conclusion As we discussed in a high(prenominal) place the textile industry is very vast in Pakistan the competition in local markets is high because there are many textile companies working here. People take a leak plenty of choices to select between different brands. So companies are competing neck to neck for customer satisfaction.Quality is the most important to maintain competitive edge over other brands. Globally the competition is also tinder because textiles are included in the major exports of Pakistan. Quality and variety both are important in international markets. Gulistan is producing variety of products with supreme quality so they should improve and sustain it to remain in competition. Opportunities Threats Opportunities Pest depth psychology * Fast internet browsing eliminates gap between importers and exporters. * Modern customized software reduces human effort and it tends to save time and money of owner. Advertising agencies make it easy to access their customers at home at any time on national and international level. * Innovation in technology increases efficiency of organizations to compete in the market and to increase productivity. Porters specimen * Threat of new entrants is low. * Threat of substitute is low in local market. * pitiable bargaining power in local market. Threats Pest depth psychology * Rules and regulations by the government for the collection of taxes have impact on the organization. * Rules and regulations imposed by the government on import and export effect the organization. Different types of export duties by government also effected organization to discourage from export their product. * Day to day changing in political situation in Pakistan had a bad impact on organization. * Organizations are discouraged to expand their business due to changes in political situation. * Economic condition of our country is very bad so it has a great impact on industrial sector. * Due to bad economic condition industries are suffering from low profit. * Due to inflation profit of industries is reducing because it impact on industries to increase in prices of products. Bad economic condition results in to reducing number of industries in a country and to unemployment. * Unemployment is increasing day by day due to electricity shut downs in our country. * Attitude of the people on work is not improving due to low salaries are given to them in response to their work. * Volatile technologies are launched day by day which has a great impact on organizations to serve in market. Porters model * Threat of substitute is high in international market. * Rivalry among existing steadfasts. * Bargaining power of suppliers is high. * spicy bargaining power of buyers in international market.EFE MATRIX anchor remote FACTORS Weig ht valuation Weighted mark off OPPORTUNITIES WTO regime implementation. 0. 12 4 0. 48 embody reduction by using modern and technology 0. 13 3 0. 39 Local market developing 0. 10 1 0. 10 submission in Energy sector. (Subject to Government permission) 0. 11 2 0. 22 THREATS trade of crude cotton and yarn 0. 12 4 0. 48 WTO regime implementation 0. 10 4 0. 40 Exchange rate variations 0. 09 2 0. 18 Instable political and economical conditions 0. 12 4 0. 48 Government policies 0. 11 1 0. 11 organic 1. 00 2. 84 InterpretationsEFE pit of 2. 84 indicating that the Gulistan is taking the remote opportunities and avoiding external threats rather well, however there is room for improvement is well. This explanation suggest Gulistan to be aggressive only if the degree of aggressiveness needs to be micro moderate, it should not go for diversification, rather it should go for perceptivity in the existing market, further developing local or outside market or it may design a new p roduct. Critical Success Factors Critical Success Factors are * Product design * Technological up-gradation * Research nurture * Market Segmentation Distri merelyion promotion * Capacity utilization * tenaciousness in product quality * streamlined procurement of raw real * Effective perplexity * Trained manpower * Cost competitiveness * client satisfaction loyalty Competitive Profile Matrix CRITICAL supremacy FACTORS Gulistan Textile mill around LTD. CRESCENT TEXTILE MILLS CHENAB TEXTILE MILLS WEIGHT Rating Weighted grudge Rating Weighted pip Rating Weighted Score Product design 0. 07 4 0. 28 3 0. 21 3 0. 21 Technological up-gradation 0. 11 3 0. 33 4 0. 44 3 0. 33 Research development 0. 0 4 0. 40 3 0. 30 2 0. 20 Market Segmentation 0. 07 2 0. 14 2 0. 14 4 0. 28 Distribution promotion 0. 07 3 0. 21 3 0. 21 2 0. 14 Capacity utilization 0. 08 3 0. 24 3 0. 24 2 0. 16 Persistence in product quality 0. 09 4 0. 36 3 0. 27 4 0. 36 Efficient procurement of raw sensible 0. 09 3 0. 27 3 0. 27 3 0. 27 Effective management 0. 08 3 0. 24 4 0. 32 2 0. 16 Trained manpower 0. 07 4 0. 28 3 0. 21 3 0. 21 Cost competitiveness 0. 10 2 0. 20 2 0. 20 1 0. 10 Customer satisfaction loyalty 0. 7 3 0. 21 3 0. 21 2 0. 14 TOTAL 1. 00 3. 16 2. 98 2. 56 INTERPRETATIONS A Gulistan mill around limited is dominating in the industry as compared to local players. There are several competitors like Agzard 9, Kohinoor textile mills, etc, but above interpreted competitors are the major ones. CPM scores for Gulistan showing aggressiveness as compared to the crescent and Chenab textile mills. Gulistan is number one telephoner within the local environment it is basically leading the industry in the spare-time activity aspects * Product design. * Research development. Persistence in product quality. * Trained Manpower. Moreover, crescent textile mills is resides at the second number and leading industry in effective management style. Finally Chenab textile comes at number tertiary with leading position in persistence in quality and market segmentation. Strategic inhering audit of the social club of the following departments * Marketing * fall in * Accounting * MIS * HR market placeING DEPARTEMENT Sales Marketing department at the Gulistan Textile Mills Ltd. is involved in following three types of gross sales. * Exports * Local Sales * Wastage SalesFor these three types of sales the Gulistan Textile Mills Ltd have following two Sale Marketing offices. * Lahore Office * Faisalabad Office Exports The Gulistan Textile Mills Ltd exports all his goods through the agents in the different countries across the world. The direct sales to the foreign customers are very low. Gulistan Textile Mills Ltd. Export Agents Customers Export Agents following(a) are the major export agents of the Gulistan Textile Mills Ltd. * KSEO capital of southwestern Korea KOREA * ATEX INTERNATIONAL * TAIZEUS LAILA ISLAM * SENCO INTERNATIONAL * ESTERN KOREA * R. D JAEWARD ANE INDIA * MITSUI CO INDIA * FIBER SMITH INTERNATIONALExport Customers chase are the customers of the Gulistan Textile Mills Ltd across the world. * COTTONNIERE DU, SENIGAL * CHINA TEXMAT CHINA * HAESONG BANGLADESH * EL HARAMEEN CO. EGYPT * ZHEJIANG IMPORT CHINA * KANDYGS HANDLOO SRILANKA * CRYSTAL MARTIN UK * RESTEX COMPANY USA * OASIS NJRT factor TURKY Internal take stock Check List * Target markets are effective. They are relying mainly on exports so market is divided into one small portion of local sales and other major portion of exports. * currently their exports portion is doing great among all other competitors like nishat mills is nookie in the exports section. Firm market share is stable locally but in exports they already acquired major international markets. * As they have sales and exports agents on 2. 5 % commission which are doing well for them * Customers are pretty much well-off with the product quality because they never compromised on product quality. * Gu listan is maintaining good quality with reasonable price which is the key factor for their spacious sales * They are less focused on their advertisement because they have sales agents. They have enclotheed in print media for advertisement. * They have trained managers and with lower limit 10 years of experience in their related fields.ACCOUNTS DEPARTEMENT The financial development of a business is communicated through this department. As we know that Accounting is an art of interpreting, measuring and communicating the result of economic activities this department is pastimeed with the readiness of financial statements preparing budgets for business and allocating budget to different units according to their requirement. For daily expenses or for purchasing of goods or machinery for business. Accounts department prepares financial statements on quarterly, half cessationic and per year basis.On the basis of these statements management takes necessary decisivenesss for busines s. Stakeholders can also get schooling about the financial position of the organization. Accounts manager handle whole department different accountant and assistants work under account manager. Units send all documents on daily basis to head office and on basis of these accountants prepare financial statements for leverages, representments, expenses, receipts and others. Functions of Accounts * state record of summations of business * Recording transactions in books of accounts * Preparing financial statement Preparing ledger, journal and vouchers * To pay salaries, wages and different types of expenses to mills * Prepares financial statements on quarterly. Semi annually and annually basis FINANCE DEPARTMENT Finance department is concerned with the financial activities of the organization. Finance manage is responsible for the acquisition of finance for ravel operations of business smoothly. Finance manager prepares cash flow statements to estimate the financial needs in the b usiness and to check whether the expenses are subject according to the requirement of business.Finance is life blood of a business so it is very important department which handles financial activities of an organization. Accounts manager provides bank statements to finance manager and finance manager review those statements and then take decision which unit need to be finance and they are responsible for planning finance from where to acquire and where to invest. All the departments in organization depend on finance without finance department organization is unable to run smoothly. Functions of Finance Department * Planning Funds * Procurement of gold * Finding sources of funds Forecasting of financial for future * Effective utilization of funds * Negotiating with creditors * allocation of funds to different units * Provide funds as they require parcelling of budget to units Allocation of expenses to units posit decisions of payrolls Proper review of expenses of units RATIO ANAL YSIS For the analysis of the financial statements of the GULISTAN GROUP OF COMPANIES we use the ratio analysis in order to get a clear vision about the financial position with simple interpretation. For this purpose we can analyze the financial statements through the followings ratios 1.Liquidity proportions 2. Activity symmetrys 3. Debt ratios 4. dineroability balances 5. Marketability Rations/Efficiency Liquidity Ratios The liquidity of a business firm is footstepd 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 ease with which it can pay its bills. Basic measures of liquidity are * online ratio * Quick ratio By putting the values taken from the annual report of GULISTAN GROUP OF COMPANIES in the formulas of above ratios the results are shown in the following table.Current Ratio = current asset / current liabilities Quick Ratio = current asset record / current liabilities Ra tios 2011 2010 2009 Current Ratio 5657592015 /5872231037= . 96 4222471024 / 4221143753= 1. 00 3,170,385,835 /3,125,424,959=1. 01 Quick Ratio 5657592015-4098001926 /5872231037=. 27 4222471024-2872063135 / 42211437531=. 32 3,170,385,835-1891974316 /3,125,424,959=. 41 Current Ratio A current ratio of 2. 0 is occasionally cited as acceptable, but a values acceptability depends on the industry in which the firm operates. A current ratio of 1. would be considered acceptable for a utility but might be unacceptable for a manufacturing firm. The ratio in 2011 is below 1. 0 so it is not acceptable. Quick Ratio The quick ratio is similar to the current ratio except that it excludes inventory, which is broadly the least liquid current asset. Quick ratio is an extended translation of current ratio in which only very quick assets (which can be quickly liquidated) are considered. Quick ratio in 2011 is also low that shows excess of inventory in rakehell. Activity Ratios Activity ratios are used to measure the speed with which various accounts are converted into sales or cash.With regard to current accounts, measures of liquidity are generally brusque Basic measures of activity are * roll upset * measure asset turnover * comely collection period * Average payment period. schedule turnover = CGS / Inventory Avg. collection period = A/R / Avg. sale per day Avg. payment period = A/p / Avg. purchase per day Asset turnover = sale / total asset Ratios 2011 2010 2009 Inventory Turnover 4197948535/4098001926= 1. 02 epochs 4442886796/2872063135=1. 55 sequences 1983953867/1891974316=1. 05 Times Avg. collection period 1202179249/14370761. 5=83. 65 old age 992689190/14190684. 10=69. 95 Days 896133503/11757625=76. 22 Days Avg. payment period 507009956/11435996=44. 33 Days 428978782/11833817= 36. 25 Days 250638087/11932214=21 Days Asset turnover 5245328111/9277085948=. 57 5179599697/7821978153=. 56 4291532961/6639205671=. 65 Interpretation of the Results Inventory Turnover Inven tory turnover commonly measure the activity, or liquidity, of a firms inventory. Inventory turnover of the friendship is 1. 02 times in the year 2011 and it has belittled from the last year normal of 1. 55 times. Though here is a decrease in inventory turnover in 2011 but it is best in 2010 as compared to 2011 and 2009. Total Assets Turnover Total assets turnover indicates the efficiency with which the firm uses all its assets to soften sales. Generally, the higher a firms total asset turnover, the more efficiently its assets have been used. This measure is probably of greatest interest to management, because it indicates whether the firms operations have been financially efficient. Asset turnover in 2009 is high that shows efficient use of assets but it decreased in 2010 and have minor increase in 2011 which is not enough.Thus it shows inefficiency of the management of the firm to use assets to generate revenues. Average order Period Average collection period indicates that ho w many age are required to collect amount from the trade debts. The earlier the cash is received from the debtors the meliorate entrust be for the company. Average collection period of the company has decreased in 2010 as compared to 2009 but it has a great increase in 2011 This shows inefficiency in the collection of Accounts receivable Average Payment PeriodAverage payment period indicates that after how many days the payment to creditors is made. This time period should be maximum one. But Avg. Collection period for GTM shows gradually an increase in these years that shows efficiency of management to best utilize of resources. Debt Ratios The debt position of a firm indicates the amount of other peoples money being used in attempting to generate lettuce. In general, the financial analyst is most concerned with long-term benefits, because these commit the firm to paying interest over the long run as well as eventually repaying the principally borrowed.Because the creditors cla ims must be satisfied before, the distribution of payment to share holders. Basic measures of debt are * Debt ratio * Time interest earned ratio Debt Ratio = Total Liabilities / Total Assets Time Interest Earned Ratio = EBIT / Interest Ratios 2011 2010 2009 Debt Ratio =6031027175/9277085948=65% 4366370736/7821978153=56% 3220598874/6639205671=49% Time Interest Earned Ratio 860296219/832459296=1. 03 660050601/535671023=1. 23 459782158/401355131=1. 4 Interpretation of the Results Debt Ratio The debt ratio measures the proportion of total assets financed by the firms creditors. The higher this ratio, the greater the amount of other peoples money being used in an attempt to generate profits. GTMs debt ratio has increase from year to year. This shows that the company has increased its dependence on the outsiders sources of finances. This ratio is high than the acceptable limit of 60%. This shows that there is a significant increase in the debts of the company. Interest insurance cove rage RatioInterest coverage ration tells that how many times the firm is able to pay its financial charges out of its profit . A high ratio is desirable. This ratio for the company is 1. 03 times in the year 2011 and has decreased from 1. 23 times in the year 2010. This shows good sign for the company. But in 2010 it is increased so it is bad sign for company but it seems to be controlled by management in 2011. Profitability Ratios There are many measures of profitability. all(prenominal) related the return of the firm to its sales, assets, equity, or share value.As a group, these measures result the analyst to evaluate the firms win with respect to a given level of sales a certain level of assets, the owners investment, or share value. Without profit, a firm could not attract outside capital. Basic measures of profitability are * vernacular profit margin * operating(a) profit margin * Net profit margin * bring around on total assets * Earnings per share GP tolerance = GP / Sa le OP Margin = OP / Sale NP Margin = NP / Sale EPS = earnings for sale for common stock / number of common stock corking ROA = earnings available for common stock / Total AssetsROE = earnings available for common stock / Common stock equity Ratios 2011 2010 2009 GP Margin 1047379576/5245328111=20% 736712900/5179599697=14% 569887350/4291532961=13% OP Margin 885608679/5245328111=17% 587536742/5179599697=11% 431199214/4291532961=10% NP Margin 1582297/52453281118=3% 52791520/5179599697=1% 50720861/4291532961=1. 18% EPS 1582297/17258090=. 09 = 52791520/16054038=3. 06 50720861/14594580=3. 48 ROA 1582297/9277085948=. 017% 52791520/7821978153=. 7% 50720861/6639205671=. 76% ROE 1582297/172580900=. 92% 52791520/16054038=3. 29% 50720861/14594580=3. 48% Interpretation of the Results Gross Profit Margin The gross profit margin measures the percentage of each sales dollar remain after the firm has paid for its goods. The higher the gross profit margin, the better and the lower the relative co st of merchandise sold. Gross profit margin of the company has increased in the year 2011 as compared to last year this increase is due to decreased cost of goods sold. Operating Profit MarginThe operating profit margin measures the percentage of each sales dollar remaining after all costs and expenses other than interest and taxes are deducted. It represents the pure profits earned on each sales dollar. A high operating profit margin is preferred. Operating profit margin of the company has increased to 2011 as compared to the year 2010 2009 gradually. This has increased due to decreased selling and administrative expenses. Net Profit Margin The net profit margin measures the percentage of each sales dollar remaining after all costs and expenses, including interest and taxes, have been deducted.The higher the firms net profit margin will be better. The net profit margin is commonly cited measure of the firms success with respect to earnings. Net profit margin of the company has inc reased to in the year 2011 against 2009 in the year 2010. drive out On Equity Return on shareholders investment (ROI) measures the overall effectiveness of management in generating profits with its available assets. The higher the firms return on investment, the better. For the year 2011 it is . 92%, which is very low than that of 2010 3. 29% and 3. 8 in 2009 which is better from all of these current year. So it is a negative sign for the company. Return On Total Assets Return on Total asset of the company has decreased in the year 2011 from in the year 2010 2009 it shows inefficiency of the company management to generate profit on the total assets. There is no best utilization of assets. Earnings per Share The firms earnings per share (EPS) are generally of interest to present or prospective stockholders and management. The earnings per share represent the number of dollars earned on behalf of each outstanding share of common stock.They are closely watched by the investing publi c and considered am important indicator of corporate success. Earnings per share of the company is decreased to . 03 per share in the year 2011 against 3. 06 in 2010 and 3. 48 in 2009 per share. It is due to decreased in profit level. So company adopts different steps to increase profit. Marketability Ratios Equity investor is more interested in the dividends of the company. It is also concerned about the profitability positing of the firm. For the purpose of equity investor we calculated the following ratios * PER = Market rice per share / EPS * Book Value of Share = total common equity / number of common stock outstanding * Market Value of Share = market price per share of common stock outstanding / Book Value Ratios 2011 2010 2009 PER 75 / . 09=833 75 / 3. 06 = 24. 50 75/(1. 63)=-46 Book Value 172580900/4771715=36. 17 160540380/ 4771715 = 33. 64 145945800/14594580=10 Market Ratio 75 / 10= 7. 5 75 / 10 = 7. 5 75/10=7. 5 Interpretation of the Results Price Earnings RatioPrice ear nings ratio for GTM is increased in 2011 and in 2010 there is decrease in price earnings ratio of GTM so shareholder perceives it less risky to invest in GTM. Book Value Per Share Book value per share is good one if it is below the market price of its shares. Book value per share of the company is 10 per share, which shows investors confidence on the firms ability to generate profits Market Ratio Market ratio for GTM is same from 2011 and in 2010, 2009 so there is consistency in price earnings ratio of GTM so it is due to no change in book value per share. MIS DEPARTMENTThe MIS department is really fond in Gulistan. Company is equipped with AS400 Software which interconnects all departments. It collects the data from each server in every department and brings it to one server. If the manager needs any information he or she can obtain that data by just one click. This software can also generate reports regarding different accounts which eventually help management to take decisions. Strong and quick management information system is key competitive edge of Gulistan. Internal Audit Checklist * All managers utilize this facility to make decisions according to their concerned departments. They have appointed a HOD for MIS. * Data is always updated on daily basis. * all(prenominal) manager has password and login through which he or she can access the system. * Training is essential for every manager so that he or she can get familiar to the system. * Company always tried to make it user friendly they succeeded in that. * Managers considered MIS a key thing or a company asset because its very valuable for providing them competitive edge. HR DEPARTMENT Gulistan has huge number of employees. It is necessary to manage a strong HR department and gulistan is doing it.The companys people are their assets and its important for them that how they are developed, trained, and motivated. Gulistan is committed to diversity in a working environment where there is mutual trust a nd respect . Where everyone feels responsible for the performance and reputation of their company. They recruit, employ and promote employees on the sole basis of the qualifications and abilities needed for the work to be performed. They are committed to safe and hale working conditions for all employees. They didnt use any form of forced, lordly or child labor.They are committed to working with employees to develop and advance each individual skills and capabilities. They respect the dignity of the individual and the right of employees to emancipation of association. They maintained good communications with employees through company based information and consultation procedures. There HR department is currently working on these basic lines- * Management by accusives * Hiring and retaining highly professional and talented people, who are dedicated, empowered and committed to deliver remarkable growth. * Skills development through internal and external training programs. Equal o pportunity employment i. e. No dissimilarity in hiring, promotions, rewards and appraisals on the basis of sex, religion, caste, race or national origin. Following are the organizations main strengths- * Good Governance And Policies * Team Work * intercourse between Units * Healthy alternatives * Product Quality * Low Workers Strength * ISO 9001 and IKO-TEX 100 Certified * Biggest building complex unit in Pakistan * high gearest credit rating by PACRA * Self owned power plant * Largest dyeing facility in South eastern Asia Following are the organizations weaknesses- Organization is unable to offer its middle managers a good salary * Transit time is more as compare to foreign competitor * high school employees turnover * High cost of production * Relying on international market more than local market * Benefits offered to the general managers are good but the benefits offered to middle managers are not at all satisfactory * A weakness of the Gulistan Textile Mills Limited is the no direct relationships with the customer because they have to pay the 2. 50% of the sales to agents as commission. INTERNAL FACTOR valuation (IFE) MATRIX KEY INTERNAL FACTORS Weight Rate Weighted Score STRENGTHS ISO 9001 and IKO-TEX 100 Certified 0. 11 3 . 33 Biggest composite unit in Pakistan . 10 4 . 44 Highest credit rating by PACRA 0. 13 4 . 52 Self owned power plant . 15 4 . 60 Largest dyeing facility in South East Asia . 12 4 . 48 Weaknesses Relying on international market more than local market . 10 2 . 20 High cost of production . 12 2 . 24 High employees turnover . 06 2 . 12 Transit time is more as compare to foreign competitor . 11 1. . 11 Total 1. 00 3. 00 INTERPRETATIONS IFE score of3. 0indicating that the Gulistan Textile Millsis an internally strong organization, itrepresent that it is tenuous in its overall internal strategies when it come to explore strengths and weaknesses. Overall the mainstrengthis financial. SWOT Matrix STRENGTHS WEAKNESSES 1. I SO 9001 certified IKO-TEX 100 Certified. 2. Biggest composite unit in Pakistan 3. Highest credit rating by PACRA 4. Self owned power plant 5. Largest dyeing facility in south east Asia 1. Relying on international market only 2. High cost of production 3. High employees turnover 4.Transit time is more as compare to foreign competitor OPPORTUNITIES S-O STRATEGIES W-O STRATEGIES 1. WTO regime implementation 2. Cost reduction technology by using modern and advanced technology 3. Local market development 4. diversification in energy sector (Subject to Government permission) 1. provide electricity to residential areas ( S4, O4)2. capture local market by providing facility of outsourcing and introducing company products through its retail outlets (S2, S5, O3) 1. Import modern technology (W1, W2, O2)2. Company can assent in new market through retail outlets (W1, W4, O3) THREATS S-T STRATEGIES W-T STRATEGIES . Export of raw cotton and yarn 2. WTO regime implementation 3. Exchange rate flu ctuations 4. Instable political and economical conditions 5. Government policies 1. Penetration in foreign market (S1, T2)2. Make future contracts to avoid currency fluctuations (S3, T3) 1. Focus on local market (W1, W2, W4, T2, T3)2. Import modern technology, and do agreements with suppliers to secure your supply of raw tangible (W2, T1) INTERPRETATIONS Critical Region is WO. Gulistan can import new technology to reduce its cost of production.Company can thus be able to penetrate in the market and capture more shares by improving quality of goods and services, and purvey of goods at lower prices. LONG TERM NON FINANCIAL OBJECTIVES * To provide quality product to customers to satisfy their need. * To achieve goals set by group. * To win competition in the market and to reach on peak of textile sector. * To use innovative technology that reduces human dependency. * To provide such an environment where employees do their work with honesty and satisfactorily. * To expand business aro und the boundaries of Pakistan and at international level. To use innovative machinery for its units. * To provide such a mechanism where employees are rewarded and encouraged toward their objectives. LONG TERM FINANCIAL OBJECTIVES * To achieve the turnover of Rs 29 billion. * Introduction of value added products. * Attaining bigger international market share. * Upgrading all the technological equipments to increase production. * To find Suppliers of the company in local market to increase local market share. * For better production make relations with cotton development and research institutes, local cotton producers and cotton whole sellers. industrial plant layout is important factor in production cost the company objective is to improve plant layout for cost reduction. Findings Interpretations Of EFE EFE score of 2. 84 indicating that the Gulistan is taking the external opportunities and avoiding external threats quite well, however there is room for improvement is well. This s core suggest Gulistan to be aggressive but the degree of aggressiveness needs to be little moderate, it should not go for diversification, rather it should go for penetration in the existing market, further developing local or foreign market or it may design a new roduct. Interpretations Of CPM A Gulistan Mills limited is dominating in the industry as compared to local players. There are several competitors like Agzard 9, Kohinoor textile mills, etc, but above taken competitors are the major ones. CPM scores for Gulistan showing aggressiveness as compared to the crescent and Chenab textile mills. Gulistan is number one company within the local environment it is basically leading the industry in the following aspects * Product design. * Research development. * Persistence in product quality. Trained Manpower. Moreover, crescent textile mills is resides at the second number and leading industry in effective management style. Finally Chenab textile comes at number third with leading p osition in persistence in quality and market segmentation. Interpretations Of IFE IFE score of3. 00indicating that the Gulistan Textile Millsis an internally strong organization, itrepresent that it is delicate in its overall internal strategies when it come to explore strengths and weaknesses. Overall the mainstrengthis financial. SPACE MATRIXFinancial Strength Rating Environmental Stability Rating Leverage 4 Rate of inflation -3 net income 6 Technological changes -3 E. P. S 5 Competitive pressure -3 R. O. E 5 jeopardy involve in business -2 Average 5 Average -2. 75 Y-Axis strength 2. 25 Competitive Advantage Rating Industry Strength Rating Market share -1 Growth potential 5 product quality -2 Financial stability 3 customer loyalty -3 Resource utilization 3 Technological know how -2 Profit potential 2 Average -2 Average 3. 5 X-Axis strength 1. 25 INTERPRETATIONS * For the purpose of evaluating financial strength we have compared our concerned co. with industrial avera ge. * Leverage used by Gulistan was significantly low as compared to industrial average that why we have graded it at point 4. * Net income of Gulistan was highest in industry thats why it is given 6 points. * Its E. P. S return on equity was also high as compare to industry thats why they were ranked 5. * Market share of Gulistan was highest about 12% that why it is given -1 marks. There product is of good quality there customers are loyal but customers cant be very loyal in this industry thats why they were ranked at -2 -3. * They have new advanced technology thats why they are ranked -2. * Rate of inflation is increasing its C. G. S technological changes its depreciation as well as there is heavy competitive pressure from chinaware Bangladesh thats why they were rankes-3. * There is high risk now a days in this business but due to being as industrial giant in Pakistan they are not in such a risk that why it is given -2. There is high growth potential in industry because n ow recovery period have been started. * Industry is less financial stable as well as most of the companies are producing very below then their capacity thats why they are ranked at 3. * Due to increase in cost the profit potential has been declined that why this is ranked at 2. directional vector point is 1. 25, 2. 25) Conservative Aggressive Competitive Defensive FS IS CA ES Interpretations * According to our calculations the score of our company is 1. 25 on x-axis And 2. 25 on Y-axis * Which is showing that our co. hould go for aggressive strategy * Furthermore it is telling us that our financial strength is the dominating factor in industry * Our concerned strategies can be * Backward ,forward ,horizontal ,integrations * Market penetration * Market development * Product development * Diversification(related or unrelated) * On the other hand, Gulistan also has the opportunity to enter and capture the local market. Company can do this through inauguration retail outlets in the local areas and provide better goods and services to its domestic customers. THE BOSTON CONSULTING GROUP MATRIXMarket Share High Low StarsHigh Industrial Growth Question Mark Cash CowLow Dogs Interpretations Gulistan is a composite textile unit of Gulitan Textile Group. Total number of players in the industry is 60, and Gulitan is the market leader. It captures 12% market share as a whole. In 2009, the industrial overall growth rate is 11%, but that of Gulitan Textiles is 24% as compare to the sales of 2008. The industrial growth is high and Gulistan Textiles has high market growth as well.So, it lies in the first quarter-circle (Stars) of the BCG matrix. It implies that, company has the opportunity to go for Market penetration to capture more shares in the existing market by using new technology, and increasing promotional activities. It also has a tremendous option of local market development. Other feasible strategies may be the backward integration to secure the supplies in o rder to tackle with the threat of exporting of local raw material to foreign markets. Also Gulistan Textiles goes for forward integration to slander its weakness of track time of goods and services to its customers.THE INTERNAL-EXTERNAL (IE) MATRIX A- IFE TOTAL SCORE B- C- Strong domesticize Low D- E- IGrow and Build IIGrow and Build IIIHold and Maintain IVGrow and Build VHold and Maintain VIHarvest VIIHold and Maintain VIIIHarvest IXDivest High F- G- H- I- J- K- Medium L- EFE TOTAL SCORE M- N- O- P- Q- Low R- S- T- U- V- W- Interpretations * IFE Total Score (As per IFE Matrix) = 3. 00 * EFE Total Score (As per EFE Matrix) = 2. 84 It implies that Gulistan Textiles is in a much strong position. But, comparatively it is stronger internally as compare to its external position.As per IE Matrix, Gulistan Textiles lies in fourth cell, which implies that it should go for aggressive strategies that is grow and build strategies. The possible strategies for Gulistan Textiles may be the int egrations, intensive, and diversifications. Gulistan Textiles has the opportunity to go for Market penetration to capture more share in the existing market by using new technology, and increasing promotional activities. It also has a tremendous option of local market development. Other feasible strategies may be the backward integration to secure the upplies in order to tackle with the threat of exporting of local raw material to foreign markets. Also Gulistan Textiles goes for forward integration to minimize its weakness of transit time of goods and services to its customers. THE GRAND STRATEGY MATRIX Rapid Market Growth Quadrant II Quadrant I Quadrant III Quadrant IV Strong Competitive Advantege Weak Competitive Advantage Slow Market Growth Interpretations Total number of players in the industry is 60, and Gulistan Textiles is the market leader. It captures 12% market share as a whole.In 2009, the industrial overall growth rate is 11%, but that of Gulistan Textiles is 24% as comp are to the sales of 2008. As the market growth is high, and Gulistan Textiles has strong comparative position in the market. So, it lies in the first quadrant of Grand strategy matrix, which implies that it should go for aggressive strategies. The possible strategies for Gulistan Textiles may be Market Development, Market Penetration, Backward and Forward Integrations. THE QUANTITATIVE STRATEGIC proviso MATRIX (QSPM) Strategy 1LOCAL MARKET DEVELOPMENT Strategy 2PENETRATING IN FOREIGNMARKET KEY INTERNAL FACTORS Weight AS TAS AS TAS STRENGTHS ISO 9001and IKO-TEX 100 Certified. 0. 10 1 0. 10 3 0. 30 Biggest Composite Unit in Pakistan. 0. 11 4 0. 44 2 0. 22 Capacity utilization. 0. 13 3 0. 39 2 0. 26 Self-Owned Power Plant. 0. 14 2 0. 28 3 0. 42 Largest Dyeing Facility in South East Asia. 0. 12 2 0. 24 1 0. 12 WEAKNESSES Relying on international markets only. 0. 10 4 0. 40 2 0. 20 High Cost of Production. 0. 12 3 0. 36 4 0. 48 Market Segmentation. 0. 07 3 0. 21 1 0. 07 Transit time is more as Compared to abroad Competitors. 0. 11 2 0. 22 1 0. 11 SUBTOTAL 1. 00 2. 64 2. 18 Strategy 1LOCAL MARKET DEVELOPMENT Strategy 2PENETRATING IN FOREIGN MARKET KEY INTERNAL FACTORS Weight AS TAS AS TAS OPPORTUNITIES WTO regime Implementation. 0. 12 1 0. 12 4 0. 48 Cost reduction through introducing modern technology. 0. 13 2 0. 26 4 0. 52 Local market development. 0. 11 3 0. 33 1 0. 11 Entering in Energy Sector. 0. 11 - - - - THREATS Export of raw cotton and yarn. 0. 12 3 0. 36 2 0. 24 WTO regime Implementation. 0. 1 1 0. 10 3 0. 30 Exchange rate fluctuations. 0. 09 2 0. 8 1 0. 09 Instable Political and Economic Conditions. 0. 11 3 0. 33 2 0. 22 Government Policies. 0. 11 2 0. 22 3 0. 33 SUBTOTAL 1. 0 1. 90 2. 29 GRAND TOTAL 4. 54 4. 47 Interpretations * I. S. O certification will only be helpful in market penetration so thats why it is given high marks. * Biggest composite unit less capacity utilization will be helpful or will be used better by open concatenation store rather than market penetration so it is given higher marks. * Increasing sales in foreign will better use energy rather than orbit store so it is given higher marks. Largest dying facility has its goodwill so we have ranked it higher in chain store. * Reliance on international market can be decreased by opening chain store thats why it is given higher marks. * Higher cost of production can be decreased by exporting more quantity but opening new store will increase an expense for thats why penetration is given higher marks. * circulate chain store will increase our segmentation it will decrease on reliance on exports so problem of transit time will impact us less that are why these are given higher marks. * WTO regime will be useful only in penetration so it is given higher marks. Local market development will be done only in that case when we will go for chain store so it is given higher marks. * If we will open chain store we will be able to charge higher p rices due to our goodwill so yarns export problem will not affect us as it is effecting. * WTO regime implementation will be covered only in that case when we will go for market penetration. * Exchange rate fluctuation will impact us only in that case when we will go for foreign trade so opening retail store will reduce its impact thats why it is given higher score. Due to bankruptcy of foreign customers the political economical conditions will have less impact on us if we will go for chain store thats why it is given higher marks. * Government policies regarding opening a new store can be difficult to meet so it is given lower marks. Conclusion Future of the company Gulistan Textile Mills Limited is a growing firm and all its employees have a potential and skills to grow for the betterment of the company. Work environment is good and employees are satisfied with Gulistan Textile Mills Limited. There are not hard and fast rule in the accomplishment of the work.Gulistan Textile Mill s Limited facilitates its employees with the lot of facilities like medical and other facilities. The job turnover ratio is gradually increasing due to the Economic crisis in Pakistan but employees are sincere with their work. Office area is established and safety measures are applied. Company is facing very tough competition from competitors particularly china, India, Bangladesh. The competitive positive position ofcompetitors is better because of their lower cost of doing business on account of various incentives and subsidies available to them.Recently government provided some relief to textile manufactures of value added product only in shape of lower interest rates. For increasing textile manufactures, Gulistan group of companies has no alternative but to improve the sale of its product in followings way. * Gulistan group of companies should improve the quality of its products. * Gulistan group of company should emphasis on value-added products and improve the quality. * The ma chinery of company should be modify by technology which increases the production of goods. * Gulistan group of companies should meet the requirements of consumers in term of fashion and design.Learning It was a marvelous experience that we have availed with devotion and commitment. We have an interest in textile industry thats because Textile is the back bone of the economy of the country. But one thing we want to share its not easy that looks it has a great toughness and complications in its bring but the overall it was nice and great. We learnt that how strategies are formed, implemented & evaluated in textile sector. By doing analysis we have an idea that how to make and evaluate the strategies that are implemented in field.