Professional Documents
Culture Documents
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
Page 2 of 6
= 297381626 / 188830369
= 1.57
4. Financial leverage ratio = Total Assets / Shareholders Equity
=345957606 / 188830369
= 1.83
Profitability Analysis
= 0.0591
= 0.043
Page 3 of 6
B. Return on equity = Net Income / Shareholders Equity
= 21359682 / 188830369
= 0.11
Ratio Analysis
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
=
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
=
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