2

A comparison of relationship among account balances. The term accounting ratio is used to describe significant relationship between figures shown on a balance sheet, profit and loss account or in any other part of accounting organization. For the performance measurement of Ashraf textile & Saiham textile mills Ltd. In below we are going to analysis about the two companies financial statement using ratio analysis. Here are belongs

4 2.16

2
0

1.35

0.97

1.54

2009 2008

Shiham Asheaf Textile Mills Textile Mills Ltd. Ltd.

3 2 1 0

2.06 1.23 1.38 0.93

2009 2008

Shiham Textile Mills Ltd.

Asheaf Textile Mills Ltd.

Debt/equity ratio =
Total liabilities/ shareholders 'equity

1.71
1.34

2.54 3.05

Shiham Textile Mills Ltd. Asheaf Textile Mills Ltd.

Account receivable turn over= Net sales / average account receivables

177.08
200 100 0

131.69 26.53

51.27

2009 2008

Shiham Textile Mills Ltd.

Asheaf Textile Mills Ltd.

Inventory turn over = Cost of good / average inventory

150 100 50 0 70.21 63.86

61.46

79.34

2008 2009

Shiham Textile Mills Ltd.

Asheaf Textile Mills Ltd.

Total asset turn over = Net sales / Average total assets

0.39

0.28

0.46

0.54

Shiham Textile Mills Ltd. Asheaf Textile Mills Ltd.

Gross profit margin =

Grossprofit / Netsales

Ashraf Textile Mills Ltd Saiham Textile Mills Ltd

38.01%

32.26%

18.56% 20.00%

31.52% 40.00% 60.00% 80.00%

2009 2008

0.00%

Net profit margin =

Netincone / Netsales

Ashraf Textile Mills Ltd

17.94%

13.68%

Saiham Textile Mills Ltd

0%

11.66%

18.66%

2009 2008
100%

20%

40%

60%

80%

Saiham Textile Mills Ltd & Ashraf Textile Mills Ltd Which are profitable companies, but both
of the companies need to increase their liquidity and asset management position. On the other hand they should pay their liabilities as soon as they can, and increase its owners equity than its liabilities. Cost and expenses should be reduced so the company can generate more profit. Company should sale their shares on the high market rates and pay more dividend to their investors.

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