Project on Gulistan Textile Mills

ACKNOWLEDGMENT on the on the whole the appreciation and gratitude is for the cleric Allah who is the nearly merciful and beneficial. He is the entirely scoreing blockary who best(p)owed us feell leaping and wisdom and made us capable of doing the ch e rattling(prenominal)enging tasks. We thank the Almighty for al angiotensin converting enzyme(a) those capabilities that He granted us to complete this project. secondly we atomic lean 18 in truth thankful to our t from apiece oneer Prof. Aitzaz Khursid who worked day measure and night with us for this project. He dished us at each and e very step and guided us in every difficult situation. We atomic get along 18 thankful to the a nonher(prenominal) teachers as easily whose embolden and steerage was an as case for the completion of this project.We would equal to thank our p arnts and family members as well beca exploitation up they go outd us the fiscal and moral support in doing this project. And last of soaply whatever we turn out through, it is just because of the coordination and coope balancen of wholly the gathering members. They worked hard researched by means of dispa roll sources. Table Of Contents Industry compose.. . .. 4 Comp some(prenominal) profile. .. 6 imagery Statement. . 8 commissioning Statement. .. 9 PEST Analysis . .. . . . 11 * Political Forces * frugal Forces * societal Forces * technical Forces Porters correct 13 Opport building blockies & Threats. . . 15 EFE matrix. . .. 17 censorious Success Factor.. . . 18 matched visibleness Matrix.. . .. 19 Strategic inbred inspect Of Dep cunningments.. 21 * commercialiseplaceing * pay * method of ciphering * MIS * HR Organizations Strengths & flimsynesses.. . 7 IFE matrix 38 SWOT Matrix 39 Long confines Non-Financial Objectives40 Long Term Financial Objectives41 Findings41 * EFE * CPM * IFE stead Matrix. 43 BCG Matrix.. 46 IE Matrix.. 48 awful dodge Matrix. .. 50 QSPM52 closing curtain . 56 Learning57INDUSTRY PROFILE The cloth and uniform persistence is often considered the back organize of the Islamic res publica of Pakistans economy. In that south Asian commonwealth which piece of grounds 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 standardised models and dress historic completelyy were the focus of the labor, mainly because of the grand amount of cotton fiber fiber plant grown in the country. In fact, Pakistan currently ranks qu stratagemworker among manhood cotton upraisers and third among world cotton consumers having produced 9. one million million million 480-pound bales and consumed 11. 8 million 480-pound bales in the 2010/2011 food commercialize season. Pakistani stuff manufacturers reinvigorated-fangledly pick out change their fruit offerings to include semisynthetic storys, cloths and app arl as the result of shifts in world-w ide demand for cotton-bl stop app arl. early(a) recent stinting factors, such as the end of framework quotas in 2005, move over caused Pakistans material persistence to continue to adapt in an perspi dimensionn to remain glob each(prenominal)y competitive. The republics textile and appargonl fabrication in 2011 consisted f ginning, go around, man-made vul rear endized fiber, weave, finishing, appargonl, terry cloth towel, tarpaulin and pratvas, and knitwear machinery sectors. The textile and app atomic numerate 18l manufacture as a whole employed somewhat 40 part of amount industrial workers and accounted for 46 percent of summate manufacturing. at that place were 1,221 ginning units, featuring an installed contentedness of 20 million bales of cotton. The spinning sector comprised 408 spinning units, with an installed faculty of 157,143 rotors and 50 tangled units, with an installed capacity of 10. 1 million spindles.The countrys 10 man-made fiber units had an in stalled capacity of 660,000 tons. The Pakistani policy-making sciences menu of Investment reported 124 large and 425 small weaving units, with a total harvest- clippingion capacity of 4. 4 billion squ be meters of fabric. With regard to finished textile considerablys, the countrys 5,000 appargonl units featured an installed capacity of 450,000 sewing machines, show organizers reported. The installed capacity for Pakistani knitwear manufacturers numbered 12,000 machines. tarpaulin and canvas intersection capacity totaled snow million squ be meters, du dimensionn installed capacity of terry towels totaled 7,500 looms.While the Pakistani manufacturing sector as a whole in 2011 accounted for just roughly 25 percent of the countrys estimated gross domestic yield (GDP) of US$395. 2 billion on a buy- might-parity cornerstone, the textile assiduitys diverse office of intersection offerings accounted for 11 percent of the countrys GDP, as reported in the aforementioned IGATE X Pakistan report. In addition, approximately 60 to 70 percent of total messs came from the exertion of cotton textiles and app bel, which argon considered Pakistans largest industries.The Business Recorder, a Karachi- found mo crystaliseary revolutionaryspaper, reported in June 2011 that the textile industrys place addition accounted for to a great extent than 9 percent of the GDP, and that the industry had a handle cover of approximately 30 percent in world yarn trade and 8 percent in cotton cloth. With the recent decline in textile trades and a unload-setting trade deficit that reached more(prenominal) than $2. 1 billion in the first two months of 2012, Pakistans textile industry currently is confronting rude(a) economic challenges.Including the spinning, weaving, value-added app arl and made-up and home base textile sectors had begun to downsize its workforce. A hike in fire rates in July 2011 by the countrys central posit led to enlarges in trade refinanci ng, long-term technical and industrial address, and, ultimately, rising emergenceion bells. Furthermore, merchandiseers are veneering steep p sieve competitor from manufacturers in China, India and Bangladesh. attach to PROFILE Gulistan convocation of Companies began with the establishment of Gulistan Textile mill about in 1966.Gulistan Group of Companies since then the group has lead substantially to pass away one of the largest textile groups in Pakistan with over 6000 employees Gulistan Group of Companies main focus of this conservatively designed expansion has been to add st office to care obligations and win guest government agency in convergence type, reliability and competence. This approach towards progress and maturation is macroscopical in Gulistan Groups enormous success in all of its at a poorer place fetchings to date. Gulistan Group of Companies an one- course of study derangement of US$one hundred forty million. Gulistan Group of Companies all units are listed comp all.Gulistan Group of Companies liberty chit offices are in Lahore Karachi. Gulistan Group of Companies has * 11 spinning mills producing 60,000 tons of yarn per annum. * 2 weave fabric mills producing 16. 5 million meters of fabric per annum. * 4 Power gene symmetryn plants producing 21 megawatts of electrical cleverness. * Gulistan Group of Companies are manufacturing ( tell, 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 class of cotton blended yarns from 4/1 to 120/1 as well as up to 10-plied yarns.This is complemented by a yarn color plant with a capacity of 3,000 tons per family of a wide regene dimensionn of mishmash and dyed yarns. Gulistan Group has one of the largest and most varied spinning setup in Pakistan. Fabrics The state of art weaving unit with its 255 air jet and dynamic looms puddle a capacity of weavi ng 36 million linear meters of heights musical note greige fabric in widths ranging from 40 inches to 144 inches and thread counts as proud-pitchedschool as 600 in single, Apparel Gulistan has set up a 500 stitching machines weave apparel unit ensuring aesthetics, elegance and fineness.Gulistan is producing 8000 trousers per day by its latest state of the art mechanical setup, merchandiseion planning systems and design mechanism. pedestal Textile Home Textile harvest-feasts are the latest addition to the groups fruit range. A manual deceitfulness expertness is being setup and exports wee already begun of top choice yarn dyed planing machine sets into the United States. Vision Statement * To be find a complete and integrated textile conglomerate. * To become an substructure that delivers extra value by superior proceeds quality and professionally principled worry. To stay abreast of technical advancements to meet the changing and challenge destinys of our custom ers. All of us at Gulistan are committed to delivering more to our customers all over the globe. We seek growth through state of the art proficient innovations and continuous usefulness in our trading opeproportionns. Analysis Basically Vision line is the answer of the question that what do we neediness to become? And it is a really measurable component of the organization. If the organization wants to formulate any strategy exonerated fantasy is the trace component askd for that.Lets consider the imaging direction of Gulistan point by point. * heterogeneous means A group of diverse companies be small(a) common ownership and run as a single organization so its hold that they want to take over the whole textile industry under their own community. This sends a slide by message to the competitors that they want to compete. This rumor motivates the employees because they made it exonerated what they want to become. * The organization promises to deliver quality prod uct and salutary carry offment so this is their competitive service because the quality and the focussing make the difference.This statement sends the clear message to the customers or the target trade that quality and management is their core competence. * As we all know that this is the time of globalization. The customer demands and need are more challenging than the previous times so expert advancements are requisite for the organization. Its a unspoiled thing to include in sight statement because it shows the potency of the organization that they opened their door for expert advancements to fulfill their some other raft components. The major pct of the r thus farue turn ind by Gulistan is from their exports so they as well as cover the global prospective by stating that they are committed to deliver more for their customers all over the globe. This as well covers that they are targeting the customers not only from Pakistan notwithstanding all over the globe. * As the core sway of vision that it should be broader so they stated in their vision that they leave seek through state of the art technological innovation and continuous emendment in their operations.This shows the broader vision of the organization that they are not biaural type and they eer open their arms for amendments. This is a really a good vision statement which covers all aspects like Industry, customers, core competence, competitiveness, product and employees. Mission Statement dedication towards excellence, to our customers, to society is the foundation that we constitute built upon from it we drive our strength. Gulistan has held the traditional values of satin flower, rightfulness and cargo in exalted esteem. The structure of each of our caper units is designed to integrate association 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 anesthetic global customers. Our plans are accommodate towards expanding our global presence providing quality products and developing relationships while at the same time serving the corporation we live in. Analysis Mission statement moldiness have 9 basic components lets see that how gulistan is fulfilling those 9 mission components and I similarly highlighted them to a high place. nodes local and global customers. * harvest-times Yarns, fabrics, made-ups, apparel and household products. * point outets outside(a) & Global Markets * Technology To integrate experience with technological advancement. * Concern for survival, growth and realizeExpansion of global presence. * Philosophy Traditional values of honesty, integrity and commitment in high esteem. * self-importance Concept Providing quality products and developing relationships. * Concern for public image Commitment towards excellence, to our cust omers, 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, commercializes, applied science, disturb for survival & growth, philosophy, self concept, concern for public image & concern for employees. PEST ANALYSIS Political * Rules and regulations by the organisation for the solicitation of taxes have stupor on the organization. * Rules and regulations enforce by the government on instant and export effect the organization. Different types of export duties by government also effected organization to reprove from export their product. * Day to day changing in governmental situation in Pakistan had a inquisitive touch on organization. * Organizations are discouraged to expand their headache receivable to changes in political situation. scotch * frugal 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 meek pull in. * Due to inflation boodle of industries is step-down because it impact on industries to increase in prices of products. Bad economic condition results in to cut down number of industries in a country and to unemployment. Social * Unemployment is change magnitude day by day imputable to electricity shut downs in our country. * Attitude of the multitude on work is not improving referable to low salaries are devoted to them in resolution to their work. Technological * vaporific technologies are launched day by day which has a great impact on organizations to serve in mart. * Fast inter web search eliminates gap amidst importers and exporters. * Modern customized software reduces valet effort and it tends to maintain time and funds of owner. ad agencies make it cushy to access their customers at home at any time on home(a) and world(pre nominal) train. * mental institution in technology increases force of organizations to compete in the foodstuff and to increase productivity. goal Technology has a great impact on the industry. Due to technology, they face bleak challenges, which check their abilities and make better process. Gulistan adapts latest ways of technology & is successfully doing their descent. porterS MODEL 1. Threats of clean entrants The nemesis of new entrants in the retail industry keeping in view the brands that we have chosen is low.As the scope of the textile furrow, Gulistan is providing a vast phratry of products under one roof. The new entrants face several barriers which primarily includes the high appeals deald in starting this business. secondly the product offered by them is highly differentiated product which also discourages new entrants. With such established brands it becomes very difficult for the new entrants to make a frame in the food market or tempt market des tiny. Thirdly the toll involved in having an exclusive distri scarcelyion is very high which also serves as a barrier to entry. 2. Threats of veersWe are analyzing the panic of substitute can be classified into the futurity(a) category of * topical anaesthetic Market * Inter national Market The little terror of substitute is medium to low in topical anaesthetic market. People might switch brands if they think imputable to any reason the brand is not providing satisfaction. except on the other distri yete populate who are brand loyal would not think of any substitute. But in the pla bring inaryistic market the threat of substitutes is pretty high because other industries competition. 3. Rivalry among living blotto The rivalry among the textile industry is high, both in the topical anesthetic market and for the international market.In exercise of the local market the number of competitors is very large and all moves are competitive. Majority of them are even locate d in the same areas are challenging each others parts, fetching gross revenue from each other. The international market is also on the competitive moves. Launch of new product by any brand impacts the other brands like the recent launch of Gulistan impacted the gross sales of other exports international brands too. 4. Bargaining advocator of suppliers The dicker authority of suppliers is high in retail industry as the suppliers can supply to any true they want.In international local market some industries have multiple suppliers and thusly have great impact on the sales of the business. The products at these investment trusts are differentiated and at that placefore the switch costs involved are very high. alongside the substitutes in case of suppliers is also not executable as brand rightfulness is also very crucial. 5. Bargaining power of buyers The dicker power of buyers is high in the international market still in case of local markets it is low. The reason fo r the high bargaining power in local market is * deep alternate suppliers Product not differentiated * nettle to substitutable products * Plentiful options for consumers. On 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 trafficker Conclusion As we discussed above the textile industry is very vast in Pakistan the competition in local markets is high because on that point are umteen textile companies functional here. People have chew 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 tough 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 qualit y so they should improve and sustain it to remain in competition. Opportunities Threats Opportunities Pest summary * 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 model * Threat of new entrants is low. * Threat of substitute is low in local market. * Low bargaining power in local market. Threats Pest analysis * 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. * Da y to day changing in political situation in Pakistan had a bad impact on organization. * Organizations are discouraged to expand their business overdue to changes in political situation. * economical 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 usefulness. * Due to inflation benefit 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 living taut ens. * Bargaining power of suppliers is high. * high-pitched bargaining power of buyers in international market.EFE MATRIX KEY outside FACTORS Weight range Weighted build OPPORTUNITIES WTO administration carrying out. 0. 12 4 0. 48 live littleening by using young and technology 0. 13 3 0. 39 Local market suppuration 0. 10 1 0. 10 Entering in Energy sector. (Subject to brass permission) 0. 11 2 0. 22 THREATS exporting of raw cotton and yarn 0. 12 4 0. 48 WTO government activity implementation 0. 10 4 0. 40 Exchange rate waverings 0. 09 2 0. 18 Instable political and economical conditions 0. 12 4 0. 48 Government policies 0. 11 1 0. 11 sum of money 1. 00 2. 84 commentsEFE reach 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 shit suggest Gulistan to be aggressive but the degree of aggressiveness necessarily to be little moderate, it should not go for diversification, earlier it should go for penetration in the existing market, and developing local or strange market or it may design a new product. vital Success Factors Critical Success Factors are * Product design * Technological up-gradation * explore evolution * Market Segmentation Distribution advance * capacitance utilization * labor in product quality * cost-effective procurement of raw material * hard-hitting management * Trained manpower * follow competitiveness * Customer satisfaction loyalty Competitive Profile Matrix CRITICAL SUCCESS FACTORS Gulistan Textile mill LTD. CRESCENT TEXTILE mill around CHENAB TEXTILE MILLS WEIGHT range Weighted Score Rating Weighted Score 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 evolution 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 contentedness 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 material 0. 09 3 0. 27 3 0. 27 3 0. 27 utile 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 opposed 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 demo aggressiveness as compared to the semilunar and Chenab textile mills. Gulistan is number one gild within the local milieu it is basically star(p) the industry in the succeeding(a) aspects * Product design. * Research development. Persistence in product quality. * Trained Manpower. Moreover, crescent te xtile mills is resides at the second number and leading industry in effective management style. Finally Chenab textile comes at number third with leading position in persistence in quality and market segmentation. Strategic natural examine of the phoner of the following plane sections * Marketing * pay * Accounting * MIS * HR MARKETING DEPARTEMENT Sales Marketing discussion section at the Gulistan Textile Mills Ltd. is involved in following collar types of sales. * exportations * Local Sales * Wastage SalesFor these three types of sales the Gulistan Textile Mills Ltd have following two Sale Marketing offices. * Lahore index * Faisalabad Office merchandises The Gulistan Textile Mills Ltd exports all his goods through the agents in the different countries across the world. The direct sales to the orthogonal customers are very low. Gulistan Textile Mills Ltd. Export Agents Customers Export Agents future(a) are the major export agents of the Gulistan Textile Mills Ltd. * KS EO SEOUL KOREA * ATEX world-wide * TAIZEUS LAILA ISLAM * SENCO INTERNATIONAL * ESTERN KOREA * R. D JAEWARDANE INDIA * MITSUI CO INDIA * FIBER SMITH INTERNATIONALExport Customers Following are the customers of the Gulistan Textile Mills Ltd across the world. * COTTONNIERE DU, SENIGAL * mainland China TEXMAT CHINA * HAESONG BANGLADESH * EL HARAMEEN CO. EGYPT * ZHEJIANG IMPORT CHINA * KANDYGS HANDLOO SRILANKA * watch glass MARTIN UK * RESTEX COMPANY USA * OASIS NJRT GENE TURKY Internal Audit 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. * shortly their exports portion is doing great among all other competitors like nishat mills is behind in the exports section. Firm market parcel 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 * Cust omers are pretty much cheery with the product quality because they never compromised on product quality. * Gulistan is maintaining good quality with reasonable price which is the key factor for their huge sales * They are slight focused on their advertisement because they have sales agents. They have invested in print media for advertisement. * They have develop animal trainers and with minimum 10 long time of experience in their related to fields.ACCOUNTS DEPARTEMENT The financial education of a business is communicated through this section. As we know that Accounting is an art of interpreting, measuring and communicating the result of economic activities this subdivision is concerned with the preparation of financial statements preparing calculates for business and allocating budget to different units according to their requirement. For routine depreciates or for purchasing of goods or machinery for business. Accounts department prepares financial statements on quarterl y, one-half formly and per annum basis.On the basis of these statements management takes necessary decisions for business. Stakeholders can also get information about the financial position of the organization. Accounts motorbus handle whole department different accountant and assistants work under account manager. Units send all documents on unremarkable basis to head office and on basis of these accountants prepare financial statements for purchases, allowances, expenses, receipts and others. Functions of Accounts * Maintain record of pluss of business * Recording transactions in give-and-takes 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 creditworthy for the acquisition of fi nance for running operations of business smoothly. Finance manager prepares cash range statements to estimate the financial needs in the business and to check whether the expenses are incurring 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 unavailing to run smoothly. Functions of Finance Department * Planning Funds * Procurement of property * Finding sources of currency Forecasting of financial for future * Effective utilization of funds * Negotiating with creditors * Allocation of funds to different units * Provide funds as they require Allocation of budget to units Allocation of expenses to units make headway decisions of payrolls fit review of expenses of units RATIO ANALYSIS 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 intent we can analyze the financial statements through the followings ratios 1. fluidness Ratios 2. employment Ratios 3. Debt Ratios 4. attainableness Ratios 5. Marketability Rations/Efficiency Liquidity Ratios The fluidity of a business firm is measured by its ability to satisfy its short-term obligations as they come due. Liquidity refers to the solvency of the firms overall financial position the ease with which it can pay its bills. Basic measures of liquidity are * Current 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 summation / current liabilities Quick Ratio = current plus inventory / current liabilities Ratios 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 sympathetic to the current ratio except that it excludes inventory, which is chiefly the least(prenominal) liquid current addition. Quick ratio is an extended version of current ratio in which only very quick ass ets (which can be fixednessily liquidated) are considered. Quick ratio in 2011 is also low that shows excess of inventory in variant. occupation 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 oecumenicly inadequate Basic measures of activity are * armoury turnover * aggregate asset turnover * fairish collection strikement * fairish payment menstruation. enrolment turnover = CGS / Inventory Avg. collection period = A/R / Avg. sale per day Avg. payment period = A/p / Avg. purchase per day addition turnover = sale / total asset Ratios 2011 2010 2009 Inventory disorder 4197948535/4098001926= 1. 02 propagation 4442886796/2872063135=1. 55 whiles 1983953867/1891974316=1. 05 Times Avg. collection period 1202179249/14370761. 5=83. 65 categorys 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 plus turnover 5245328111/9277085948=. 57 5179599697/7821978153=. 56 4291532961/6639205671=. 65 adaptation of the Results Inventory Turnover Inventory turnover unremarkably measure the activity, or liquidity, of a firms inventory. Inventory turnover of the partnership is 1. 02 times in the year 2011 and it has accrued from the last year foreshadow 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. tot up Assets Turnover Total assets turnover indicates the efficiency with which the firm uses all its assets to breed sales. Generally, the high a firms total asset turnover, the more efficiently its assets have been used. This measure is probably of greatest intimacy 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 ch ange magnitude in 2010 and have churl increase in 2011 which is not enough.Thus it shows inefficiency of the management of the firm to use assets to generate revenues. mediocre collecting power point Average collection period indicates that how galore(postnominal) days are required to collect amount from the trade debts. The earlier the cash is received from the debtors the develop leave behind be for the company. Average collection period of the company has diminish 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 increases. In general, the financial analyst is most concerned with long-term benefits, because these commit the firm to salaried amour over the long run as well as eventually repaying the principally borrowed.Because the creditors claims moldiness be satisfied before, the distribution of sugar to administer holders. Basic measures of debt are * Debt ratio * Time interest get ratio Debt Ratio = Total Liabilities / Total Assets Time fire 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 high this ratio, the greater the amount of other peoples money being used in an attempt to generate wins. GTMs debt ratio has chang e magnitude 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 Coverage 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. Each related the return of the firm to its sales, assets, equity, or share value.As a group, these measures allow the analyst to evaluate the firms earnings with take to be to a given level of sales a certain level of assets, the owners investment, or share value. Without profit, a firm could not pull up outside capital. Basic measures of profitability are * rough-cut profit molding * Ope grade profit perimeter * Net profit margin * Return on total assets * boodle per share GP circumference = GP / Sale OP perimeter = OP / Sale NP Margin = NP / Sale EPS = earnings ready(prenominal) for common entrepot / number of common timeworn salient ROA = earnings available for common extend / 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 sawbuck remaining after the firm has paid for its goods. The high the gross profit margin, the reform and the lower the proportional cost 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 vaulting horse remaining after all costs and expenses other than interest and taxes are deducted. It confronts the pure profits earned on each sales dollar mark. 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 perc entage of each sales dollar remaining after all costs and expenses, including interest and taxes, have been deducted.The high(prenominal) the firms net profit margin leave behind 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 increased to in the year 2011 against 2009 in the year 2010. Return On truth Return on shareholders investment (ROI) measures the overall enduringness 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 b est utilization of assets. Earnings per address 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 intimately watched by the investing public 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 stairs 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 take aim 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 earnings ratio for GTM is increased in 2011 and in 2010 there is decrease in price earnings ratio of GTM so shareholder perceives it less raving mad 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 physical structure in price earnings ratio of GTM so it is due to no change in book value per share. MIS DEPARTMENTThe MIS department is really potent in Gulistan. beau monde is equipped with AS400 Software which interconnects all departments. It collects the info from each server in every department and brings it to one server. If the manager needs any information he or she can obtain that information 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 installing to make decisions according to their concerned departments. They have constitute a HOD for MIS. * Data is always updated on daily basis. * Every manager has password and login through which he or she can access the system. * Training is natural 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 worthy for providing the m 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 conversion in a working environment where there is mutual trust and respect . Where everyone feels responsible for the performance and reputation of their company. They recruit, employ and promote employees on the furbish up basis of the qualifications and abilities needed for the work to be performed. They are committed to safe and healthy working conditions for all employees. They didnt use any form of forced, needful or child labor.They are committed to working with employees to develop and enhance each individual skills and capabilities. They respect the dignity of the individual and the right of employees to freedom 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- * wariness by objectives * 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. gibe opportunity employment i. e. No discrimination in hiring, promotions, rewards and appraisals on the basis of sex, religion, caste, race or national origin. Following are the organizations main strengths- * Good system And Policies * Team Work * Communication between Units * red-blooded Resources * Product Quality * Low Workers Strength * ISO 9001 and IKO-TEX deoxycytidine monophosphate Certified * Biggest composite unit in Pakistan * steepest credit rating by PACRA * Self owned power plant * Largest dyeing facility in southwest East Asia Following are the organizations failinges- Organization is unable to offer its middle mana gers a good pay * trip time is more as compare to unconnected competitor * high 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. intrinsic FACTOR military rating (IFE) MATRIX KEY INTERNAL FACTORS Weight identify 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 sulphur 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 overfly 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 excellent in its overall internal strategies when it come to explore strengths and weaknesses. Overall the mainstrengthis financial. SWOT Matrix STRENGTHS WEAKNESSES 1. ISO 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 politics 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 residenti al 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 enter 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 fluctuations 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 sacrosanct your supply of raw material (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 go, and proviso of goods at lower prices. LONG ci rcumstance 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 around 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. * first appearance 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 institute s, local cotton producers and cotton whole sellers. 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 score suggest Gulistan to be aggressive but the degree of aggressiveness needs to be little moderate, it should not go for diversification, instead it should go for penetration in the existing market, get along 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. Gul istan 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 3rd with leading position 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 excellent 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 Risk involve in business -2 Average 5 Average -2. 75 Y-Axis strength 2. 25 Competitiv e reinforcement Rating Industry Strength Rating Market share -1 harvest-tide potentiality 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 conclusion of evaluating financial strength we have compared our concerned co. with industrial average. * Leverage used by Gulistan was significantly low as compared to industrial average that wherefore we have bedded 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 mainland China Bangladesh thats why they were rankes-3. * There is high find 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 now 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 telli ng us that our financial strength is the dominating factor in industry * Our concerned strategies can be * half-witted ,forward ,horizontal , integratings * 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 start 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 g rowth as well.So, it lies in the first quadrant (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 atrocious option of local market development. former(a) executable strategies may be the backward integration to secure the supplies in order to tackle with the threat of exporting of local raw material to foreign markets. likewise Gulistan Textiles goes for forward integration to minimize its weakness of pass through time of goods and services to its customers.THE INTERNAL-EXTERNAL (IE) MATRIX A- IFE TOTAL chump B- C- Strong Moderate Low D- E- IGrow and seduce IIGrow and Build ternionHold 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, comparative degreely 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 potential strategies for Gulistan Textiles may be the integrations, 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 ser vices to its customers. THE g-force 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 compare 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, feebleminded and Forward Integrations. THE QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM) Strategy 1LOCAL MARKET DEVELOPMENT Strategy 2PENETRATING IN FOREIGNMARKET KEY INTERNAL FACTORS Weight AS TAS AS TAS STRENGTHS IS O 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 southeasterly 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 Foreign 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 documentation pull up stakes only be face-saving in market penetration so thats why it is given high marks. * Biggest composite unit less capacity utilization allow be helpful or will be used better by open mountain range store rather than market penetration so it is given higher marks. * Increasing sales in foreign will better use energy rather than range store so it is given higher marks. Largest destruction 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 wh y penetration is given higher marks. * Open chain store will increase our segmentation it will decrease on doctrine 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 prices 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 g iven 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 Mills Limited facilitates its employees with the lot of facilities like medical and other facilities. The concern turnover ratio is gradually increasing due to the Economic crisis in Pakistan but employees are unprejudiced 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 rilievo 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 machinery of company should be improved 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 process 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 inclination that how to make and evaluate the strategies that are implemented in field.