Professional Documents
Culture Documents
Sugar Mill
Submitted to: Miss Asiya Sherazi
Student ID # 9290
Student ID # 9290
Ratio Analysis of Sugar mills in comparison with Sugar Industry Averages of
Pakistan.
1. Current Ratio
Current ratio of Mehran sugar mill from year 2006 to 2008 were 0.89, 0.64 , 0.83 while
the industry average is 0.87.we can clearly analyze that in the current year and in the
year preceding the previous year the company is performing nearly to the industry
averages which is good sign but in the year 2007 the firm current ratio was 0.64 which is
not up to the industry average this is merely because current asset was procure up to
the level of industry and company pay off the long term liabilities which were long term.
2. Quick Ratio
Companies quick ration in 2006 to 2008 were 0.46, 0.27, 0.21 respectively while
industry average is 0.46. Which suggest despite the fact of having good current ratio
company is maintaining more of merchandize inventory than the industry which is not a
good sign.
6. Operating Cycle
Industry average is 98.75 days while the company averages from 2006 to 2008 were
156.64, 141.56, 143.51 days respectively. Company operating cycle is very high as
compared to the industry because of fast collection from customers and taking more
time in converting its finished goods to revenue the company should work on it because
it would certainly affect its cash cycle. And company is also having less cycle each year.
7. Cash Cycle
Industry average is 19.89 days while the company averages from 2006 to 2008 were
30.64, 15.56 and 17.51 days respectively. Company cash cycle is good as compared to
the industry because of fast collection from customers and taking more time in paying
off to creditors which means that company will be having enough cash to pay off its
liabilities on time and company should do that because it is not paying off its debt on
time.
8.