University of Management and Technology

Submitted to: Dr Ramla Sadiq

Subject: Corporate finance
Company: Gul Ahmed
Submitted By:
 Acknowledgement:
Glory to the All-Powerful, All-Meekest and Most-Meaning Allah. He is the origin of all
wisdom and knowledge that surpasses human comprehension. We bear witness that
God alone is the one who provides for us in every way. In addition, we respect and
venerate our prophet Muhammad, who has throughout history advised and taught
all people.
We also wish to express our gratitude to everyone who assisted us in finishing my
project and this report. We want to express our gratitude to the members of our
group for their diligence, devotion, and passion to this project. As a group, we would
like to express our gratitude to Miss Dr. Ramla Sadiq for inspiring us to take on new
projects and assisting us in contributing to the development of the country.
 Case Study:

Background of Gul Ahmed Textiles:

Gul Ahmed's tale is the story of textiles in the subcontinent. By the early 1900s, the group was engaged
in textile trade. In 1953, the group ventured into the manufacturing sector by founding Gul Ahmed
Textile Mills Ltd, which is now a well-known brand. Since becoming public on the Karachi Stock Exchange
in 1970, the company has expanded quickly and occupied a prominent place in the textile industry.
With 300 cutting-edge weaving machines, an installed capacity of over 51,840 spindles, and the most
advanced yarn dyeing, processing, and stitching units, Gul Ahmed is a composite unit that produces
everything from cotton yarn to finished goods. Gul Ahmed owns a power plant with backup power
sources, gas and steam turbines, and engines.

What makes this company interesting?

Ideas by Gul Ahmed offers a range of fashion lines, such as prêt wear, polo shirts, unstitched cloth (for
both sexes), formal and semi-formal wear for men, and a broad selection of casual and formal wear for
ladies. Many new styles have been created by Gul Ahmed throughout the years, such as the elegant
G.pret clothing, Chairman Latha (for men), Chantilly Chiffon, digital-print kurtis, accessories (shoes and
purses), home items (bedding, cushions, and bath items), and much more. Our designs have a rich
heritage and are both timeless and stylishly modern. Our unique style and adherence to ethical business
practices have made Gul Ahmed one of the top apparel brands in Asia. Gul Ahmed offers quality clothes
at an affordable price.

In order to spread the message that beauty is universal, we at Gul Ahmed take inspiration from the
various global arena and combine it under one roof. We always try to push the boundaries of what can
be done in terms of weaving, printing, stitching, and decorations. For us, the fabric is more than just
fabric; it is cherished and treated with the care and devotion that it merits, much like an artist does with
his canvas. At Gul Ahmed, we recognize the importance of style and fashion in your lives, which is why
we work hard to provide it right to your door. The motto of Gul Ahmed has always been to deliver
exceptional quality and service.

Macro Dynamics:

 Economic Conditions: Macrodynamics covers broader economic variables that impact

economic growth, such GDP growth, inflation rates, and exchange rates. Economic downturns or
volatility may have an influence on consumer purchasing patterns, which might affect Ideas by
Gul Ahmed sales and revenues.
  Regulatory Environment: Laws and policies of the national and international governments may
have a substantial impact on GulAhmed's ideas and actions. Trade agreements, labor laws, tax
laws, and environmental regulations are examples of this.

Micro Dynamics:

 Internal Operations: • Ideas by Gul Ahmed direct control is exercised over components of
microdynamics, such as cost control, supply chain effectiveness, and product quality. Managing
these factors well is essential to preserving competitiveness and optimizing profits.

 Customer Relationships: • Gul Ahmed must comprehend client preferences and market
trends in order to properly adapt its goods and marketing strategies. Building close relationships
with customers via creative product creation and excellent customer service may boost sales
and brand loyalty.

Meso Dynamics:

 Industry Competitiveness: The factors known as mesodynamics are those that influence how
well a certain market or industry performs. This covers the potential for new competitors,
suppliers' negotiating strength, and rivalry from other textile producers. To be competitive,
Ideas by Gul Ahmed must continuously evaluate the business environment and adjust its
approach.

Corporate finance issues:

Net Profit Margin:

In contrast, the net profit margin for FY23 is the lowest out of the last five years. GATM's
financial performance in FY23 was similar to that of other Pakistani companies. Massive price
hikes for cotton have been brought about by high discount rates, the depreciation of the
Pakistani rupee, supply chain disruptions, catastrophic flood damage to cotton farms, and
energy shortages. Secondly, the expense of conducting business went up. energy costs.
Furthermore, consumer austerity and the crisis had an impact on the demand side. Other
revenue proved to be a lifesaver in spite of all these obstacles, increasing at a rate of 22.57%
YoY, mostly because of net foreign exchange gains from GATM's record-breaking export sales in
FY22.
Recent Performance:

The textile product maker Gul Ahmed Textile Mills Limited (GATM) revealed a sharp decline in earnings
for the fiscal year 2022–2023, which was mostly caused by excessive financing and sales expenses.
The firm reported a profit after tax of Rs4.88 billion in a consolidated statement that was made available
to the Pakistan Stock Exchange (PSX) on Tuesday. This is a fall of more than 50% from the Rs9.85 billion
earned during the same period last year.
As a result, GATM's profits per share fell to Rs6.62 in FY23 from Rs13.3 in the same time the previous
year.
The textile producer reported a 14% increase in overall sales from Rs121.81 billion in the SPLY to
Rs138.93 billion. But even with increased sales, the company's profit margin dropped to 20%.

Current Ratio Analysis:

While Ideas by Gul Ahmed's FY23 current ratio of 1.11 suggests that the firm has a healthy liquidity
position, more analysis and comparison are required to accurately evaluate the company's financial
condition and liquidity management.

Quick ratio:

Ideas by Gul Ahmed's fast ratio of 0.47 suggests that the liquidity situation may be weaker and that
further research and attention to potential problems with liquidity may be necessary.

Cash Ratio:

Ideas by Gul Ahmed's cash ratio of 0.01 suggests that its financial position could be precarious; in order
to resolve any possible liquidity difficulties, further investigation and management focus would be
needed. Even though a cash ratio less than one can point to possible liquidity issues, more investigation
into the makeup of current assets and liabilities is required. Gul Ahmed should assess the quality and
liquidity of its other current assets to make sure they can be quickly turned into cash in the event that
urgent obligations arise.

Return on assets:
Return on assets (ROA), a financial measurement, gauges how lucrative a company may be while
employing its assets. This amount is calculated by dividing net income by the average total assets. Ideas
by Gul Ahmed generates about Rs. 11.42 in profit for each rupee of the company's assets, based on its
ROA of 11.42%. A profitability and efficiency indicator called return on assets (ROA) demonstrates how
well a company uses its resources to turn a profit. In this case, Ideas by Gul Ahmed is making a
reasonable amount of money, with a return on assets (ROA) of 11.42%.

Return on Equity:

Ideas by Gul Ahmed's ROE of 10.46 indicates that the company makes around 10.46 in profit for each
rupee that shareholders put in equity. A common belief is that return on equity (ROE), which calculates
the rate of return on capital contributed by investors in a company, is a key sign of management's
capacity to generate a profit using the funds of shareholders. As seen by its ROE of 10.46%, Ideas by Gul
Ahmed is now generating a decent return on shareholders' equity.

Key players and their role in decision making:

It is crucial to use sound judgment while making ethical judgments and to avoid taking any activities that
could even slightly seem wrong. If you're not sure if a certain activity complies with the Code's rules,
think about:
1. Does it adhere to the Code?

2. Is it morally right?

3. Is it allowed?

4. How comfortable would I be with this being made public?

If any of these questions have a "No" response, don't do the action. When in doubt, consult the
following sources for advice:

1. Management

2. The Legal Division

3. The Department of Human Resources

4. Secretary of the Company

Board of Directors (BoD):

The Board of Directors at Nishat Linen is a group of shareholders chosen to supervise management and
strategic direction. The board approves big decisions, establishes business strategy, and oversees
performance. Meetings are held regularly throughout the year, with extra sessions arranged for specific
problems. The board ensures the company's long-term performance and is managed in the best
interests of stakeholders and shareholders.

Name/Title Current Board Membership

1.Mohomed Bashir Chairman Gul Ahmed Textile Mills Ltd.

2.Mohammed Zaki Bashir Chief Executive Officer & Executive Director

Gul Ahmed Textile Mills Ltd.

3.Zain BashirVice Chairman Gul Ahmed Textile Mills Ltd.

4.Mohomed Bashir Chairman

5.Mohammed Zaki Bashir Chief Executive Officer & Executive Director

Executive Management:

Executive management is made up of chief financial officers (CFOs), chief operating officers (COOs), chief
executive officers (CEOs), and other senior executives. Executive management is responsible for
managing day-to-day operations, making important financial and operational decisions, and promoting
the strategic direction set by the board of directors. Executive management holds regular meetings to
talk about objectives, output, and issues related to operations. Meetings might take place in the
corporate headquarters of GATML or somewhere else. Executive management directs the company's
strategy's execution and makes sure it is in line with corporate goals in addition to supervising divisions
including finance, operations, marketing, and human resources. Executive management performs
market research, analyzes data, and confers with department heads to make well-informed judgments.

Managers and Department Heads:

Department heads and managers are in charge of several different functional areas, such as human
resources, marketing, sales, and operations. They are in charge of resource management, departmental
project execution, and daily decision-making that advances departmental objectives. Supervisors and
department leaders convene often to talk about objectives, evaluate performance, and schedule tasks.
Departments or meeting spaces with specific designations may be used for meetings. The company's
strategy must be carried out by managers and department heads in order to guarantee that
departmental goals are in line with the company's main aims. They study data, engage with other
departments, and get input from team members in order to make choices that meet departmental and
corporate objectives.

Employees:

Regardless of status or function, all employees take part in decision-making within their
purview. Employees do tasks, offer feedback, and implement choices made by managers
and department heads. Employees engage in decision-making when called upon, like in
team meetings, project planning sessions, or performance evaluations. One can decide in
teams, alone at their workstation, or cooperatively with colleagues. Workers provide their
expertise, abilities, and skills to achieve company objectives and foster success.
Employees engage with managers, supervisors, and other stakeholders, gather pertinent
information, and carry out duties in accordance with their designated roles.
Here are a few possible fixes based on the case study of Ideas by Gul Ahmed that was
supplied.

Foreign Exchange Risk Management:

Manage foreign exchange risk by using hedging strategies to lessen the effects of
exchange rate changes. Diversify your sources of supply or look for local alternatives to
lessen your reliance on imported commodities.

Cost management:
Look for methods to reduce expenses in the manufacturing, distribution, and marketing processes. To
guarantee stable raw material costs, bargain with suppliers.

Debt management:

Examine and simplify the company's debt agreements to ensure possible repayments. Keep an eye on
the economy and adjust your debt management strategies as necessary.
Enhance Financial Performance:

Look into diversification tactics to lessen the impact of downturns in specific sectors of the economy. Put
a focus on innovation and market trends to align products with consumer desires.

Liquidity management:

To handle any possible liquidity difficulties, thoroughly review existing assets and liabilities. Take steps
to improve the quick ratio and cash flow.

Return on Equity and Assets:

Make the most use of your assets to increase your return on assets (ROA). Examine strategies to
increase return on equity (ROE) and give investors more returns.

Decision-Making Structure:

Encourage top management, the board of directors, and department heads to work together and
communicate. Promote making decisions based on facts at all organizational levels.