Ans to the question no.

Alhaj Textile Mills Limited

The presentation of the equity and liability section (2013 & 2014):

The equity and liability contains a great deal of useful information about an organization. These
sections are the part of balance sheet of a company. Alhaj Textile Mills Limited prepare their
balance sheet by followings the IFRS-7 obligations. Their balance sheet of the company has been
prepared by flow the international accounting standards (IAS-1) adopted by the institute of
(ICAB). IFRS identifies certain minimum items that should be presented on the balance sheet.
Below there are discloser of equity and liability in 2012 to 2013:-

Equity:-
In equity section company need to show all the things related with equity. They show the
share capital Reserve and surplus, tax holding reserve and retain earning amount in equity
section. They also need to show if, the company has any preferred share, stock surplus,
treasury stock and if there any diluted shares. They disclose all the things in note (10, 11
and 12 for 2013 and 2014). In note number 10 they show the reserve and surplus, in note
number 11 they disclose tax holding reserve and in note number 12 they disclose retain
earning. There is an increase of share capital and retained earnings in 2014. But all others
things remain same.

Liabilities:-
In liability Section Company show all the long term and short term Liability that,
Company has to pay in future. The company also needs to show provisions and
contingent liabilities in disclosure if there is any possibility (ias-37). But if the possibility
is remote then they do not need to disclose anything. In Alhaj Textile Mills liability
section there is no contingent liability. In long term liability part they have long term loan
fund and deferred tax in 2013 and 2014. In short term liability part there are increase of
all the items except securities and deposit. In. All the details are given in note number (14
to 23). They disclose deferred tax in note number 32 for 2014.

Page 1 of 6
 Ans to the question no. 2

Solvency Analysis

Alhaj Textile Millls Limited

2013
1. Debt to Asset ratio = Total Liabilities / Total Assets
= 213357348 / 381231164
= 0.56
2. Long term debt to Asset ratio = Long Term Debt / Total Assets
= 153973542 / 381231164
= 0.40
3. Debt to equity ratio = Total Liabilities / Shareholders' Equity
= 213357348 / 167873916
= 1.27
4. Financial leverage ratio = Total Assets / Shareholders Equity
=381231164 /167873916
= 2.27

Alhaj Textile Millls Limited

2014
1. Debt to Asset ratio = Total Liabilities / Total Assets
= 297381626 / 345957606
= 0.86
2. Long term debt to Asset ratio = Long Term Debt / Total Assets
= 153973543 / 345957606
= 0.44
3. Debt to equity ratio = Total Debt / Total Equity

Page 2 of 6
 = 297381626 / 188830369
= 1.57
4. Financial leverage ratio = Total Assets / Shareholders Equity
=345957606 / 188830369
= 1.83

Ans to the question no. 3

Profitability Analysis

Alhaj Textile Millls Limited

2013

A. Return on total capital = (Net income - Dividends) / (Debt + Equity)

= (22544370 0 ) / (213357348 + 167873916)

= 0.0591

B. Return on equity = Net Income / Shareholder's Equity

= 22544370 / 167873916
= 0.1342

Alhaj Textile Millls Limited

2014

A. Return on total capital = (Net income - Dividends) / (Debt + Equity)

= (21359682 0) / (297381626 + 188830369)

= 0.043

Page 3 of 6
 B. Return on equity = Net Income / Shareholders Equity
= 21359682 / 188830369
= 0.11

Ans to the question no. 4

Ratio Analysis

Alhaj Textile Millls Limited

2013

1. Basic earnings per share = (Net income Preferred dividends) / Weighted average
number of common shares outstanding

= (22544371 - 0) / 12665377
= 1.79
2.Diluted earnings per share = (Net income Preferred dividends + Interest) / (Weighted average
number of common shares outstanding + potentially diluted common shares)
= (22544371 - 0 + 0) / (12665377 + 0)
= 1.77
3. Book value per share = (Stockholders Equity - Preferred Stock) / Number of shares
outstanding
= (167873916 - 0) / 12665377
= 13.25
4. Price to earnings ratio = Market Value per Share / Earnings per Share
= / 1.78
=
5. Dividends per share (DPS) = Dividends / Number of shares
= 0 / 12665377

Page 4 of 6
 =
6. Dividend payout ratio = Dividends / Net Income
= / 22544371
=

Alhaj Textile Millls Limited

2014

1. Basic earnings per share = (Net income Preferred dividends) / Weighted average
number of common shares outstanding

= (21359682- 0) / 12714096
= 1.68
2. Diluted earnings per share = (Net income Preferred dividends + Interest) / (Weighted
average number of common shares outstanding + potentially diluted common shares)

= (21359682- 0 + 0) / (12714096 + 0)
= 1.68
3. Book value per share = (Stockholders Equity - Preferred Stock) / Number of shares
outstanding

= (188830369 - 0) / 12714096
= 14.85
4. Price to earnings ratio = Market Value per Share / Earnings per Share

= / 1.68
=
5. Dividends per share (DPS) = Dividends / Number of shares

=0 / 12714096
=

Page 5 of 6
 6. Dividend payout ratio = Dividends / Net Income

= 0 / 21359682
=

Ans to the question no. 5

Comments on Stock Options, Right shares & Bonus of all companies

Alhaj Textile Millls Limited

Company was not declares any cash dividend during 2013 and 2014, but company
issues 25383680 bonus share in 2014 and 9230430 bonus share in 2013. They did not
mentioned clearly about any stock option but the directors, CEO, CS ,CFO hold
4366021 shares in 2014 that is 34.16% of total stock and 3439211 shares in 2014 that
is 33.87% of total stock. They did not issue any bonus share in 2013 & 2014.

Ans to the question no. 6

Final Comments on Analysis

After observing the Equity and liability section of companies, we can see that in companies there
are no diluted shares. In balance sheet we can see that company reducing total asset in 2014 and
also the company much relay on both long term and short term debt that is significantly
increased in 2014. In the equity Section Company increasing share capital in 2014 and also
reduces net asset value per share mention in (note 24).

Page 6 of 6