In the name of Allah most merciful and beneficent I rise in degree of rank whom so ev

er I pleased; and my every pressure of knowledge is one, most knowing . (Al-Quran

) I am very thankful to ALLAH Almighty who gave me the opportunity, courag e and
confidence to explore more knowledge to complete this report and for His ( ALLA
H) blessings that have brightened every part of my life, and my parents whos e p
rayers always supported me in every task of my life. While working on this re po
rt, I was guided by my experience, knowledge and interest in this report. Beyo n
d of all the material available I am very thankful to my respected and honorabl
e resource person Mr. Azhar Farooq for giving me such knowledge about the subj ect
that makes this report a very motivating. This becomes possible only due to his
very unique style of conveying the knowledge and through his motivational be ha
vior I am able to complete this complex task. Besides this I would like to thank
other officials who showed their kind concern towards the completion of this re
port.
S/N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
DESCRIPTION PAGE NO. Acknowledgement 01 Executive Summary 03 Introduction 04 Bri
ef History Of The Company 05 Nature Of The Organization 06 Unique Feature Of The
Company 07 Business Volume 08 Organizational Structure 09 Departments Student W
orked More Application Of Class Room Learning Internees Learning In Organization
Financial Analysis 25 SWOT Analysis 37 PEST Analysis 42 Suggestions For The Orga
nization Conclusion 46 References 47
12 23 24
45

EXECUTIVE SUMMARY The Fatima Enterprises Ltd (FEL) is one of the largest and wel
l reputed organiza tions in Textile industry and is working under the supervisio
n of Mian Sheikh Ni shat Ahmad. Fatima Enterprises Ltd was incorporated in 13 No
v, 1976, as a public limited company nationalized but with the great effort of S
heikh Fazal Rehman i t was repurchased form the Govt. Fatima Enterprises Limited
has taken ISO 9001 a s a first step towards total quality management and its im
plementation has been executed in all plants. Currently the spinning unit has be
en installed the capac ity of 40,000 spindles. Fatima Enterprises Ltd is produci
ng three type of yarn; Cotton Yarn, PC Yarn an d Woolen Yarn. The main departmen
ts of Fatima Enterprises Ltd are as follows. Purchase Department Accounts Depart
ment Finance Department Marketing Department Export Department Sales Tax Departm
ent Fatima Enterprises exports its products in the following countries; Bahrain,
Dubai, Hong Kong, United States of America, Turkey, Spain, Korea, Italy and Sin
gapore etc. They export the Cotton Yarn, PC Yarn and Woolen Yarn to the above me
ntioned countries. There future plan is to maintain a stable level of pr ofit by
increasing value to the customers and modernizing the equipments.
1.
INTRODUCTION TEXTILE INDUSTRY IN PAKISTAN: Over the years, Pakistan is said to be the single crop economy i.e. cotton and t
extile that claims the lions share in terms of the contribution in the national
economy of Pakistan. Despite efforts to bring in diversification in countrys o ve
rall economic get-up, the textile sector continues to be the most important se g
ment of the national economy. Its share in the economy, in term of GDP, exports
, employment, foreign exchange earnings, investment and revenue generation altog
ether placed the textile industry as the single largest determinant of the econ
o mic growth of the country. Increase in the cotton production and expansion of
textile industry has been impressive in Pakistan since 1947. Cotton bales increa
se from 1.1 million bales in 1947 to ten million bales by 2000. Number of mills
increased from 3 to 600 and spindles from about 177,000 to 805 million similarly
looms and finishin g units increased but not in the same proportion. It employs
50% of industrial l abor force and earns 65% foreign exchange of total exports.
Pakistans textile i ndustry experts feel that Pakistan has fairly large size tex
tile industry and 60 -70% of machines need replacement for the economic and qual
ity production of pro ducts for a highly competitive market. But unfortunately i
t does not have any fa cility for manufacturing of textile machinery of balancin
g modernization and rep lacement in the textile mills which need to think about
joint ventures for the p roduction of complete spinning units with china, Italy
and production of shuttle less looms with Korea, Taiwan and Italy. The first tex
tile commission, which was constituted by the first material law go vernment in
1960 had, inter-alia, recommended that an economic size textile unit

should preferably have 25,000 spindles and 500 looms. No new mill with only 12,
500 spindles and without looms should be sanctioned. However, no need was paid t
o the advice by the sanctioning authorities with the result that an excess capa
c ity had tented to build up in the spinning sector. In 1992, a foreign consulta
nt form was hired by the government to look into the stagnating conditions in th
e local textile industry. One of the observations of the foreign consultant was P
akistan has failed to make real progress in the int ernational market and is bei
ng over taken by many of the neighboring competitor countries. The spinning sect
or, traditionally the core of the industry, is alrea dy in the crisis with many
spindles lying idle and mills being forced to close. Worse still, this sector wi
ll be hit by the projected decline of its major marke ts in Japan and Hong Kong
in the coming years. Cotton textile industry has been premier industry in Pakista
n and a majo r source of export earning and employment. It also helps in value a
ddition to th e manufacturing sector of the economy. During the six years betwee
n 1993 and 199 8, production of yarn (in quantity terms) registered a steady ann
ual growth rate of 302% in Bangladesh and 405% in India. On the contrary, Pakist
an registered a growth rate of 101% per annum in yarn production although it ran
ked third after China and India in the global yarn production during the same si
x years. The rise in export of value-added products from Pakistan was another po
i nt of encouragement for the textile sector. The export of value-added products
rose to 57.4% from 53.9% last year-a clear sign that we are moving in the right
direction, said the Chairman of all Pakistan textile mills association. Pakistans
textile sector is getting rid of old impediments and gearing itself up for the n
ew opportunities in the new trade regime . BRIEF HISTORYOF THE COMPANY
The Fatima Enterprises Ltd (FEL) is one of the largest and well reputed organiza
tions in Textile industry and is working under the supervision of Mian Sheikh N
i shat Ahmad. Fatima Enterprises Ltd was nationalized in 1972 but with the great
e ffort of Sheikh Fazal Rehman it was repurchased form the Govt. and incorporat
e d in 13 Nov, 1976, as a public limited company. Fatima Enterprises Ltd has tak
en ISO 9001 in 1998 as a first step towards total quality management and its imp
le mentation has been executed in all plants. Currently the spinning unit has be
en installed the capacity of 60,000 spindles. At initial stage, when the company
was taken over, it was very small company, ha ving authorized capital of 700000
shares @ Rs. 10 each in 1977 with issued capit al of 50000 shares @ Rs 10 each.
But now, it has gotten progress and reached at top level. At present, Fatima En
terprises Ltd. is well known enterprise, having authorized capital of 25000000 s
hares @ Rs 10 each and issued and subscribed cap ital of 14231052 shares @ Rs. 1
0 each. Since well before the1950s, Fatima Enterprises has graduated from raw c
otton ginning to spinning and finally into weaving. They now operate 3 ginning f
actories, 2 Spinning Units and 1 weaving Unit. Fatima Enterprises has built a r
eputation of excellence in quality and commitment to leadership since its establ
ishment. In just a matter of a few year s they have established their selves as
one of the leading manufacturers and exp orters of superior quality cotton yarns
in Pakistan. As manufacturers of A gra de knitting/weaving cotton yarn, Fatima we
ather it is a dream to be the best or commitment of company with textile sector
Fatima did achieve its deserving statu s where it stood up as one of the major e
xporter of Pakistan. It got its place-p aved ways for further developments with
ever improving quality and never looked back. YES it did it!!!!!!!

 NATURE OF THE ORGANIZATION There are two types of the business Manufacturing Bus
iness Merchandising Business Fatima Enterprises Limited is a manufacturing conce
rn firm which is prod ucing cotton yarn, woolen yarn and PC yarn which is export
ed to different countr ies. Fatima Enterprises Limited is manufacturing products
in Okara, Multan, Muz zafar Ghar and Rahim Yar Khan. Cotton yarn is producing i
n Okara and Woolen and PC Yarn is producing in Muzzafar Ghar. UNIQUE FEATURES OF
THE COMPANY: One of the leading manufacturers and exporters of superior quality cotto n yarns
in Pakistan. Fatima Enterprises has built a reputation of excellence in quality
and c ommitment to leadership in the year 1991. Over the years they have built
a reputation of being one of the leading manufactures and exporters of A grade kni
tting/weaving cotton yarn while maint aining USTER top 5% results from Pakistan.
Their present spinning unit, located in the industrial city of Muzaffar Garh, c
omprises of 36,000 operational spindles and they hope to expand by progre ssing
towards spinning in the near future. Strict Quality Management has helped them i
n making their final products superior and competitive granting them the edge ne
eded to compete in global mar kets. Fatima Enterprises received ISO certificatio
n in 1998. All the units ever growing enterprise are ISO certified. They also ha
ve started workout for ISO 14000 Social Program. They have Cotton testing equip.
HVI Spectrum for fiber length, cotton fi neness, color grading, trash etc. They
have Yarn testing equip. Uster Tester 3 & 4 for checking irregulari ty, imperfec
tion & hairiness of yarn etc.. BUSINESS VOLUME: The Fatima Enterprises Ltd (FEL) is one of the largest organizations in Textile
industry at initial stage, when the company was taken over, it was very small co
mpany. At present, Fatima Enterprises Ltd. Is well known enterprise sub scribed
capital of 14231052 shares @ Rs. 10 each? Having authorized capital of 2 5000000
shares @ Rs 10 each and issued and subscribed capital of 14231052 shares @ Rs.
10 each. They now operate 3 ginning factories, 2 Spinning Units and 1 weaving Un
it. 1) Fatima Textile Unit #2 Okara 2) Solvent Plant Extraction Plant 487-A Veha
ri Road Multan 3) Fatima Textile Unit #1 Muzaffar Garh, 4) Ginning Section &oil
Mill Bahawalpur Road Multan 5) Ghee Unit#1 Nasir Abad Bahawalpur Road Multan 6)
Ginning Section & oil mill Industrial Area Raheem Yar Khan 7) Ginning Section &o
il Mill Dera Budoo Bwp road Multan 8) Fatima Sugar Mill Muzafar Garh At present
they are one of the leading manufacturers and exporters of su perior quality cot
ton yarns in Pakistan. Fatima Enterprises exports its products

in Bahrain, Dubai, Hong Kong, United States of America, Turkey, Spain, Korea, I
taly, and Singapore etc. They export the Cotton Yarn, PC Yarn and Woolen Yarn to
the above mentioned countries. There future plan is to maintain a stable level
of profit by increasing value to the customers and modernizing the equipments.
2.
ORGANIZATIONAL CHART
3.
ORGANIZATION UNITS
4.
DEPARTMENTAL STRUCTURE

5.
INTRODUCTION OF THE DEPARTMENT
During my internship mostly I have worked in the following departments. Finance
Department
This is the major department of the company. This is located in Fatima E nterpri
ses Ltd head office Multan. It prepares different kinds of financial repo rts an
d gives information to management for decision making purpose. Finance departmen
t prepares the Income Statement, Balance Sheet, Trial Balance, Cash Flow, Produc
tion report for the whole month, stock taking report, yield com parison report e
tc. these all reports are useful for the management to make prod uction plan, fi
nancing decision and other important matters. The head of this de partment is Fi
nance Manager. Objectives: Following are the main objective of finance departmen
t: To prepare monthly and half yearly reports To keep the record of inventory an
d stock To maintain a liquid position To maintain adequate cash to run the opera
tions of business To reconcile the bank statements To make payments to the suppl
iers To deal with sale tax and income tax departments Preparation of bank paymen
t and bank receipt vouchers Prepare profit and loss accounts and Balance sheet K
eep record for the payments of salaries
COMPONENTS OF FINANCE DEPARTMENT: Finance department are consists on the followi
ng sections: Payable, Contraction Bank negotiation and reconciliation Store cost
ing Excise PAYABLE, CONTRACTION: In this section usually payable is paid to the
supplier of all goods including s tationary, maintenance goods, cement etc. Paya
ble is made according to the contr act and instruction of the CFO.

BANK NEGOTIATION AND RECONCILIATION: This section starts working when documents
reach from bank to head office. Docum ents are recorded in documents receipt reg
ister and in bank register. A report i s given to the CFO on daily basis about t
he customer and payment date. He makes decision either to grant discount to him
or not. STORE COSTING: Goods receipt note, the store costing section receives th
e related bills. They a re checked against purchase order and Performa invoice i
n terms of quantity, spe cification, price etc. After this, a bank payment vouch
er is prepared and sent t o this section, which issue the checks to the related
parties and posts in the l edger. EXCISE: Excise section deals with the outgoing
products for issuance of Gate pass. This working of excise section starts after
sale, when loading program is received fr om export sale and local sale process
ing. According to this program Gate pass is prepared and issued to the go-down k
eeper. After issuing a Gate pass, its detai ls are recorded in the register and
then sale invoice is prepared in which actua l value and sale tax value is menti
oned.

Export Department
Export means the exchange of goods or products from inside country to any foreig
n country with any currency equal to the value of product or goods. There is th
e demand of Fatima Enterprises finished products all over the world. They try to
meet the demands of the world. They also try to compete with Quality and on tim
e delivery in any environment according to its respondents. Fatima Enterprises e
x ports its products in the following countries; Bahrain, Dubai, Hong Kong, Unit
ed States of America, Turkey, Spain, Korea, Italy and Singapore etc. They export
the Cotton Yarn, PC Yarn and Woolen Yarn to the above mentioned coun tries. INT
RODUCTION: Export section has an important value for any type of business. This
sec tion helps to earn maximum for its owner. The company has the manager of exp
ort and import. The Import/export manager Dr. Nafees Iqbal is an asset of Fatima
ent erprises limited. He performs his duty in different manners than others. Th
ere i s a one assistant working under the import/export manager. They perform al
l the activities of import and export with the help of top management. Export Fu
nctions: The following are the main functions, which an export department perfor
ms: To build good relationship with the buyers. Co-ordination with the buyers an
d the production department. Getting orders from the buyers and try to fulfill t
hem in time. Improve the quality of the product with the interaction of buyer an
d the production department. Prepare and arrange the documents of export. Prepar
e the documents for the taxation and excise purpose. Objectives: Following are t
he objectives of export section: To survive in the world market. To earn foreign
exchange for the development of the country.

Increase the export to obtaining the optimum profit. Export for the growth of th
e company as well as the country. To avail the opportunities the foreign market.
Export documents contain the following things: Exporting of any commodity in th
e foreign market was very complex and risky in t he past. But now the export doc
umentation provides the security from different r isks. When the goods are expor
ted, a number of documents are to be prepared. Contract Bill of Exchange Invoice
Packing list Bill of lading Copy of Letter of Credit Transportation documents B
ill of Lading: Bill of Lading is also the important document in export. Fatima E
nterprises load s the products from Port of Karachi. This document also includes
the shipper/exp orter address, Consignee (to the order of bank), port of loadin
g, also port of d ischarge or place of delivery, container #, detail of product,
origin of country , purpose of export and gross weight etc.
Copy of Letter of Credit: Letter of Credit defined as in simple words THE TRUST O
F PERSON ON OTHER PERSON The copy of Later of Credit is the most important in the d
ocument of Export. L etter of Credit is the guarantee for Exporter from Importer
through bank. Import er opens the Letter of Credit in the bank and pays negotia
ble amount for this se rvice provided by the bank. The Importer pays the negotia
ble amount to bank betw een 2% to 4%. He also gives the sum of money to Broker w
hich is also negotiable. They deal with any party through band to bank. The impo
rter opens the L/C by giving the terms and conditions which are suitable for him
/her. Now the Exporter sends some amendments to Importer through bank. A mendmen
t is the change from Exporter in the terms and conditions showed by the I mporte
r. Some time the Importer accepts the terms and conditions according to th e Exp
orter. In Fatima Enterprises all the work of Import and Export is properly done.
They h ave well established department separate from other sections. Types of l
etter of credit: Confirmed or unconfirmed Fixed or Unfixed or Revolving Clean or
Documentary Revocable or Irrevocable

PURCHASE DEPARTMENT
When any demand is raised at the mills, it is signed by the purchase committee.
Similarly head office demand is signed by the head of the department and these a
re sent to the purchase committee for approval. After approval, these are sent
t o the purchase office where these demands are classified in to local and out s
ta

tion demands. The outstations demands include out of Multan or out of Pakistan.
The demands ou t of Pakistan are sent to the head office. Big items such as tin
plates, chemica ls are purchased by calling tenders and the lower tender is acce
pted. Other pur chases like oil, cotton seeds and chemicals are purchased by col
lecting the rate s from different brokers and other related agencies and then co
ncerned item is p urchased. When selling party is approved purchase order is sen
t to that party. When goods are received at factory, delivery challan book entry
is made. Two copies are sen t to the store in charge at mills. Most of the good
s from local markets and out station are purchased on credit basis. REJECTION OF
PURCHASES: All the items purchased are sent to the perspective departments and
are checked by the head of the departments e.g. chemicals, Oils being demanded b
y the produc tion department. Then chief chemist checks those chemicals. If the
item is up to standard then it is accepted by preparing the quality repor t and
sent to the commercial department. Similarly all the cash purchases are su bject
to the approval of quality. If goods like chemicals are out of standard then re
jection report is made by the checking department and sent to the purchase depar
tment.
Purchase Procedure
CASH PURCHASES: Some goods are purchased on cash basis for the mill needed. In t
his case bill is received after making the cash payments and bill is stamped as
"CASH PAID". These purchases include office stationary equipments, and some time
repairing it ems. BOOKS & REGISTERS WORKING: Separate ledgers are maintained fo
r recording all sales and purchases items. Store spare parts. Electric goods. Ge
neral goods. Packing materials. Individual party ledger. The following informati
on is recorded in above registers: The date, name of items and department. Demand
number. Date of purchase. Name of party. Quantity of items. Rates of purchase i
tems.

 ACCOUNT DEPARTMENT Fatima enterprises has separate account department under the
control of chief Ac countant who is responsible for the financial affairs of the
organization and to keep control on all inflows and outflows of cash and funds.
Similarly he is res ponsible for tax affairs of the corporate affairs which are
handed by the secret ary of the company, Mr.Iqbal. His main assignment is to ha
ndle the shareholder a nd the Board of Director s meetings. He also prepares the
Agenda and papers of t he meeting after this he prepares the minutes of the mee
tings of the Board of Di rectors. Accounts Department: Chief Accountant. Account
ant. Assistant Accountant. Computer Operator. Objectives: To provide a permanent
a systematic record of the business transactions. The periodically results as t
o profit and loss should be ready and accur ate. To keep the financial data up t
o date so that it can be ready to show th e higher management whenever demanded.
To provide the media between production and marketing. It is useful for the fut
ure planning. To enable the trader to compare the different items such as sales,
purch ase, opening stock and closing stock of one period with similar items of
proceed ing periods. It is useful for preparing arithmetical accuracy of the tra
nsaction. To provide most reliable information about business. To provide correc
tness of the assets and liabilities. FUNCTIONS OF ACCOUNTS DEPARTMENT: The major
functions of accounts department are as under: Maintaining the record of the acc
ount receivable. Record of payments by bank. Record of payments by cash. Ma
ning the record of raw material purchased. Maintaining the record of sale of Yar
n, waste etc Record of store purchases. Record of insurance. Record of the expen
ses i.e., manufacturing and marketing. Record of wages and salaries. Preparation
of financial statements.
VOUCHERS: The major vouchers which
ed Journal Voucher. Cash Payment
cher. BOOKS: The following are the
: Cash Book. General Ledger.

are prepared in the Fatima Enterprises: Adjust

Voucher. Cash Receipt Voucher. Bank Payment Vou
Books, which are maintained by the Enterprise
General Journal.


Local Customer Ledger. Bank Book.
CASH BOOK: In Cash Book all cash transaction are entered. This book has two side
s: Payment Side. Receipt Side.
BANK BOOK: Most of the business is carried out through banks. So this book is ma
intained to record all the transaction occurred in the bank against the mill. It
shows the inflows and outflows of the cash at the bank, in sub ledgers the post
ing is made daily. I can see the bank balance of any bank with which I have an a
ccount from the bank book at any time because separate sheets have been allocate
d for separ ate banks. GENERAL JOURNAL: All kind of daily transactions occurred
at the mill are recorded in this book an d then transactions are transferred to
their concerning ledgers against concerni ng accounts. GENERAL LEDGER: Following
are to be maintained in the general ledger: Allied Bank limited Hussain Agahi. M
uslim Commercial Bank Hussain Agahi. National Bank of Pakistan Mumtazabad. Cash
Receipt. Sonahri Bank Ltd. Predential Commercial Bank Ltd. Askari Commercial Ban
k Ltd. Platinum Bank Ltd. Yarn sale Waste sale Local sale parties Sales tax Expo
rt sale Yarn stock Cash payments Profit & Loss Account. From disposal of assets.
Profit & Loss Account. From disposal of stores. Financial Charges. 6. APPLICATI
ON OF CLASS ROOM LEARNING: During my 8 weeks internship in Fatima Enterprises Limited I have seen t he appl
ication of class room learning in the organization. I have discussed fou r manag
ement functions Planning, Organizing, Leading and controlling in the clas s room
. In Fatima Enterprises Limited I have seen how management practically do these
functions in the organization how they plan their activities, established strate
gies to achieve those goals how tasks are grouped how they motivate peopl es to
communicate them to achieve their goals. How they evaluate the preference of the
employees in the organization. I have discussed First Line Manager, Midd le Man
ager and Top Manager in the class room. I have seen them in Fatima Enterp rises
Limited how they work in the organization. Organization culture always affect pe
ople working in the organization I have practically how the culture of the organ
ization affect people in the organi zation. Environment always affects the perfo
rmance of the organization I have s

een how the external and internal environment of the organization affect on its
performance. It is always difficult to take decision in uncertain and complex en
vironment. Currently due to the uncertain environment of the Pakistan Top of Fa
tima Enterprises Limited are facing difficulties to take the right decision. I
have discusses in the class room how organization go global and I have seen it i
n Fatima Enterprises Limited because I have worked in import and Export Departm
e nt of Fatima Enterprises Limited. I have discussed Management by Objectives in
Fatima Enterprises Limited decision are made at Top level. First line Manager,
M iddle Manager and employees are not invited to participate in making plans to
ac hieve the goals. In international Finance I have discusses how trading is don
e between th e parties at international level and which certain documents are re
quired to do these trading safely means to hedge the different types of risks wh
ich types of contracts and documents are used. Fatima Enterprises Limited is doi
ng the impor t and export in textile sector so I have practically seen how they
use certain d ocument like Letter of Credit, Bill of lading, payment Draft, Acce
ptance Draft, Bill of Exchange, Air way Bill etc. in their business to hedge the
risk how the organization used open account in international trading how govern
ment institute are providing help to different organization to increase the expo
rt of the coun try. In the accounts department I have seen how different types o
f vouchers, Ledger, Trail Balance, Income Statement, and Balance Sheets are prep
ared which I have st udied in the Financial Accounting. How the calculation of m
arkup on Bank loan i s done and how the bank reconciliation is prepared in the o
rganization I have se en all these in Fatima Enterprises Limited during my inter
nship. 7. INTERNEE LEARNT IN THE ORGANIZATION
During my 8 weeks internship I have worked in different departments of Fatima En
terprises Limited there I learnt how to work in a team to achieve the goal of t
h e organization how to behave in different situation how to follow the culture
of the organization. In the Accounts department I have learnt how to prepare Pur
c hase Vouchers, Sales Vouchers, Journal Vouchers, Bank payment Vouchers, Bank R
ec eipt Vouchers, Ledgers and Trail Balance in Visual Basic software. In the Fin
ance Department I have learnt how to prepare Bank Reconciliation of an organizat
ion and calculation of markup on Bank Loan. In the Sales Tax Departme nt I have
learnt how to calculate and claim the refund on the Sales Tax through the softwa
re of Refund Claim Preparation System on Invoices and how to submit ta x through
online by using the web site of www.fbr.gov. In the Export Department I have le
arnt how to use different types of documents t o hedge the risk in international
trading, how to open Letter of Credit, Open Ac count to do the trading at inter
national level and how to deal with the Brokers, Carriers, Middle man and Differ
ent parties at international level to do the tra ding. In the Purchase Departmen
t I have learnt how to deal with the different types of sellers to purchase the
Raw Material for the production of the product and how to set the payment condit
ions to the creditors and how to make the payments avai lable at time.
8.
FINANCIAL ANALYSIS
The figures in financial statements, do not tell the whole truth. To obtain mean
ingful information relationship between relevant figures must be examined. For

instance: Relationships which help to find the liquidity of the business. Relati
onship which reflect the effectiveness of the financial policies a dopted and th
e potential fund raising ability. Relationships which help to evaluate the effec
tiveness of operational po licies. To achieve the aim, I undertake Ratio Analysi
s. Ratios provide the means of sho wing the relationship which exists between fi
gures on the Balance Sheets and Inc ome Statements. The analysis is undertaken t
o assess important characteristics of business like liquidity, solvency and prof
itability. A study on these aspect s enables drawing conclusions as to financial
requirements and capabilities of b usiness units. Ratios may be classified in a
number of ways to suit any particular purp ose. Different kinds of ratios are s
elected for different types of situations. Liquidity Ratio Activity Ratio Solven
cy Ratio Profitability Ratio
Liquidity Ratio Liquidity ratios are used to measure a firms ability & solvency o
f the firm to meet short-term obligations. They compare short-term obligations t
o shor t-term resources available to meet these obligations. It consists of two
ratios Current & Quick ratio. Years CR QR 2004 0.99 0.47 2005 0.96 0.34 2006 1 0
.54 2007 0.9 0.36 2008 0.89 0.27
Current ratio signifies the ability of a firm to cover its current liabi lities
with its current assets. Only in 2006 current ratio of the firm was 1 oth erwise
it is less than 1 which shows that Fatima Enterprises Limited does not ha s suf
ficient cash to pay its short term obligations. The Quick ratio signifies t he a
bility of a company to meet its current liabilities out of its current asset s.
The quick assets figure includes all current assets except inventories and pr ep
ayments. The purpose of excluding the inventories is to visualize

whether the company is capable of meeting its liabilities quickly because the in
ventories take much time to be converted into cash. The quick ratio of Fatima E
n terprises Limited also showing that firm is not able to pay its short term obl
ig ations quickly because only in 2006 it was 0.54 otherwise it is less than 0.5
4 which shows Fatima Enterprises L imited un ability pay its short term debts. N
et Working Capital Ratio Net working Capital measures the financial position of
the firm, weather it is able to pay back other expenses after paying back its cu
rrent liabilities . It is measured as current assets - current liabilities.
Years NWC
2004 -2216
2005 2006 -87987 24482
2007 2008 -382935 -625555
It is clear from the table and graph of the net working capital that only in yea
r 2006 the firm has positive net working capital. In year 2006 the firm paid hu
g e amount of interest expenses due to which it suffered from loss but its net w
or king capital in year 2006 was positive. In year 2008 Fatima Enterprises Limit
ed has deficit of more than 600000 from net working capital. From net working ca
pit al I can conclude that Fatima Enterprises Limited is not performing well fro
m la st five years because although in year 2006 Fatima Enterprises Limited had
positive net working capital but it was not enough to pa y its other expenses as
well as long term obligations. Activity Ratio Activity ratios are also known as
Efficiency Ratios or Turnover Ratios o r Asset Management Ratios. They relate b
asically to how efficiently a firm is us ing its assets. Years FAT TAT IT 2004 4
.48 1.87 5.65 2005 2.18 0.96 2.44 2006 1.9 0.77 2.6 2007 2.02 0.92 2.61 2008 2.2
7 0.9 1.94
The fixed assets turnover ratio measures the efficiency of long term investment.
It is also known as long term (investment) activity ratio. It reflects the le v
el of the sales generated by investment in productive capacity. The level and tr
end of this ratio are affected by characteristics of its components.

From my analysis I have concluded that fixed assets turnover of Fatima Enterpris
es Limited is decreasing continuously it means the firm is not using its fixed
a ssets efficiently to generate profit and unable to pay back its long term obli
ga tion at time. Total assets turnover is used to find the relation ship of net
sa les to total assets it is also known as capital turnover ratio. Total assets
tu rnover of Fatima Enterprises Limited is also decreasing and inventory turnove
r h as decreased from 5.65 to 1.94 which shows the performance of Fatima Enterpr
ises Limited is decreasing from previous five years. Solvency Analysis Leverage
ratio signifies how much debt a company has created against its equity. In fact
the creditors and the lenders are very much concerned about this. Debt r atio is
very much important for the creditors point of view. Total debt include s both c
urrent liabilities and long term debt. Years D.R D/E 2004 85 57 2005 77 63.3 200
6 85 117.2 2007 88 149.3 2008 88 170.5
Debt ratio measures the percentage of funds provided by the creditors. Creditors
prefer low debt ratios because lower the ratio the greater the chances that the
creditors will not bear the losses in the event of liquidation. Stock holders o
n the other hand may want more leverage because it magnifies expected earnings.
Debt ratio of Fatima Enterprises Limited is very high which is not a goo d sign
for the company because debts ratio is showing that firm is depending upo n the
debts. Long term debt paying ability of the company basically gives the indica
tion that the company in the long run will be able to fulfill the financial as w
ell as other obligations that are accrued on that. It usually shows the trend a
n d direction of operations that the companys management is responsible for. Also
tells about the capital structure of the organization. Debt ratio and debts to
equity ratio of Fatima Enterprises Limited is showing that firm is unable to us
e optimal capital structure because debt ratio of Fatima Enterprises Limited are
very high and also debt to equity ratio of Fatima Enterprises Limited is increa
sing continuously which shows that firm is depending upon debts and also not us
i ng these debts efficiently which is increasing the burden of Fatima Enterprise
s Limited.

Interest Coverage Ratio Interest Coverage Ratio measure the protection available
to creditors as the expend to which earning available for interest cover intere
st expenses. Years TIER 2004 233 2005 183 2006 75 2007 106 2008 109
Time interest earning ratio of Fatima Enterprises Limited shows that in 2006 it
was able to pay its interest expenses to its creditors on time because i ts liqu
idity position was good to pay its short term obligations but in 2007,200 8 the
efficiency of the firm to pay its interest expenses on its loan to its cre ditor
s has decreased again. Only in year2006 the firm paid its interest expenses in 7
5 days although the liquidity position of Fatima Enterprises Limited in previous
two years was not allowing the Fatima Enterprises Limited to pay interest expen
ses in that yea r but Fatima Enterprises Limited paid its interest expenses in 2
006 on time due to that the firm suffered from loss in 2006. From previous two y
ears the performance of the firm was not good due to that the firm was not payin
g its interest expenses to its creditors on time which was in creasing pressure
from the creditors on the firm and the good will of the firm w as also affected
by non payment of interest expenses so Fatima Enterprises Limit ed was compelled
to pay its interest expenses to the creditors in year 2006 in a difficult perio
d. Due to that Fatima Enterprises Limited suffered from loss in that year. Profi
tability Ratio Profitability ratios show the combined effect of liquidity, asset
manage ment & debt on operating results Profitability Ratios are used to check
the firm s efficiency in generating profits. These ratios analyze the profitabili
ty from different dimensions and tell that whether the firm is meeting its expen
ses suc h as interest and other costs and moreover its generating some profit ou
t of it. How effectively, the firm is utilizing its assets. Years GP OP NP 2004
6.68 4.72 2.82 2005 7.54 6.17 2.68 2006 6.47 4.81 -0.89 2007 7.98 6.68 0.45 2008
9.65 8.32 1.52
A companys net profit must be sufficient enough to meet the requirements of app r
opriations and the disbursement of a handsome amount as dividend. Net profit o f
Fatima Enterprises Limited is decreasing continuously in 2006 Fatima Enterpris
es Limited has suffered from net loss but in 2008 it has improved its performanc
e. Operating profit of Fatima Enterprises Limited is fluctuating frequently

in previous five years because in 2006 the firms operating profit was at the l ow
est level so the firm suffered from loss in 2006 but it has improve a lot in n e
xt two years. Gross profit of Fatima Enterprises Limited decreased only in year
2006 b ecause the over all position of the firm was not good in that year but in
later year it has improve its performance and growth of the firm. Return on Ass
ets & Return on Equity Ratio The return on assets compares income with total ass
ets. Years ROE ROA 2004 23.5 3.5 2005 9.8 1.2 2006 -19 -1.39 2007 1.84 0.001 200
8 14.6 0.008
Return on assets can be interpreted in two ways. First it measures management a
bility and efficiency in using the firm assets to generate profit. Second it re
ports the total return accruing to all providers of capital independent of the s
ource of capital. Return on equity compares net profit after taxes to the equit
y that shar e holders have invested in the firm. This ratio tells us the earning
power on t he shareholders book value investment and it frequently used in comp
aring two or more firms in the industry a high return on equity reflects the fir
m acceptance of strong investment and effe ctive expenses management. If the fir
m has chosen to employees a level of debts that is high by industry standards a
high ROE might simply be the result of ass uming excessive financial risk. Earni
ng Per Share Earning per Share means how much a firm is earning against each sha
re wh ich is invested by the shareholders in the firm. Common shareholders are d
irect ly consult with the earning per share of the firm. Years EPS 2004 6.68 200
5 3.08 2006 -5.05 2007 0.5 2008 4.52
Earning per Share is commonly used to measure the performance of any firm. It i
s used to compare operating performance of the firm. It shows that how much a f
irm is earning against each share which is directly related to the shareholders
of the firm because they received dividend on their investment in the firm. Pre
ferred stockholders are not affected by the earning per share of the firm becaus
e they received a fixed percentage of profit regardless of per share profit. Co
mmon stockholders are directly affected by the earning per share of the firm be
c ause they share profit as well as the loss of the firm. Earning per Share of F
a tima Enterprises Limited has decreased till 2006 but after that it has improve
i ts performance. In 2006 Fatima Enterprises Limited suffered from loss due to
th at its earning per share in that year was negative. Horizontal Analysis

From horizontal analysis of the Fatima Enterprises Limited I have conclu ded tha
t over all performance of the firm from previous five years is not very g ood. A
lthough after suffering from loss in 2006 the firm has improved its perfo rmance
but it is unable to maintain its growth at the standard level. Cost of s ale of
the firm has increased continuously, operating profit has decreased, and firm i
s using high debts due to that the interest expenses of the firm to pay th e cre
ditors are high. Fatima Enterprises Limited is not using its assets efficiently
because f rom my analysis I have concluded that Fatima Enterprises Limited is un
able to ge nerate enough profit from its fixed assets to pay back its long term
liability. The performance of the fixed is not up to standard thats why firm is f
acing di fficulties from previous five years. From my analysis I have concluded
that although the firm is getting net profit after suffering from loss in year 2
006 but this profit is not sufficient to pay the enough amount of dividend to it
s common shareholders and to pay back the loans to its creditors which is affect
ing the over all performance of the fi rm as well as the good will of the firm i
n the textile industries. Currently the restriction on the export of textile pro
ducts from the gov ernment has affected the performance of Fatima Enterprises Li
mited because it no rmally depends upon its exports but due to the restriction f
rom the government i t is unable to export its products. From the local sale of
its product Fatima E nterprises Limited is unable to produce enough profit to ma
intain its growth in the textile industries. Vertical Analysis Vertical analysis
are very vital for measuring the performance of different indu stries or differ
ent firms in an industry because in the vertical analysis the pe rcentage are ca
lculated with respect to sale in income statement and total asset s in balance s
heet which eliminate the problem of size of the firms in an indust ry in differe
nt industries. That is why vertical analysis is commonly used for measuring the
performance of any company. From vertical of Fatima Enterprises Limited I have c
oncluded that the pe rformance of Fatima Enterprises Limited is not good from pr
evious five years. I n the vertical analysis I have calculated the values of all
items of Balance She et and income Statement in percentage with respect to the
sales and total assets . From these calculations I come to know that the cost of
sale has increased mo re than the percentage increase in sale. Fatima Enterpris
es Limited is depending upon high debts due to that it h as to pay more interest
expenses to the creditors which is reducing the percenta ge of profit of the fi
rm. Fatima Enterprises Limited is unable to receive its r eceivable on time due
to which it faces shortage of cash time by time and unable to pay back to its cr
editors on time. It means its average collection period a s well as the average
payment period of the firm are not good. On the basis of my conclusion I can say
that the overall performance of Fatima Enterprises Limit ed is not good from pr
evious five years. Conclusion: From Ratio Analysis, Horizontal and Vertical Anal
ysis I have concluded t hat the overall performance of Fatima Enterprises Limite
d is not good. Although Fatima Enterprises Limited after suffering from loss in
year 2006 has improved its performance but it will take time to get back its gro
wth on track. Cost of sale of a company has increased which has reduced the gros
s prof it of the firm. Fatima Enterprises Limited is unable to use its fixed ass
ets ef ficiently due to that it is unable to generate enough profit from its fix
ed asse ts to pay back its long term liability. Fatima Enterprises Limited is mo
stly de pending upon high debts which is not a good sign because it has to pay h
igh amou nt of interest to the creditors on its loan. Liquidity and profitabilit
y analysis shows that firm is unable to pay ba ck its current liability from per
vious five years. Dividend paid by the firm to

its shareholders is not so much attractive to attract the new investors. In ye a

r 2006 the shareholders have to bear net loss of the firm. Although the firm is
improving its performance but it will ta ke time to get back its lost image. Rec
ommendations: Liquidity of the firm is weak due to the availability of cash to t
he fir m to pay back its short term obligation which should be improved. Account
Receivable are not received on time which mean average collectio n period shoul
d be improved. Fatima Enterprises Limited is unable to generate enough profit fr
om its fixed assets which means either the fixed assets are out dated or the wor
kers ar e not skilled to use these assets. Inventory turnover of the firm is ver
y low which shows its sales is not good which should be improved Fatima Enterpri
ses Limited is using high debts on which it has to pay hi gh amount of interest
and it is also discouraging for the new investors. Fatima Enterprises Limited sh
ould use optimal capital structure it means they should be balance between debts
and equity finances Gross profit of the firm can be improved by reducing the co
st of goods s old Fatima Enterprises Limited should do its operation efficiently
to increa se its operating profit Net profit of the firm can be increasing by r
educing the interest expens es, Cost of goods sold and Tax
STRENGTHS There are following strengths of Fatima Enterprises Fatima enterprises
limited is the old company and has goodwill in the ma rket. The installed capac
ity of the textile units is enough and they also exte nding its capacity by inst
alling 40,000 spindles in the Textile Unit II in Okara District. Approximately a
ll the oil of Fatima Enterprises is sold to army of Pakis tan. Due to one custom
er they save a lot of expenses in respect of Marketing and Promotion. There is q
ualified and professional staff in all the departments. Environment is very frie
ndly in the Fatima Enterprises, which creates th e sense of responsibility among
the employees. Employees have the easy access to the Chief Executive in case of
any pro blem. The weaving unit of the company started its production at the end
of Aug ust. FEL has modem machinery to check the quality of yarn.

WEAKNESSES Machinery is very old in textile as well as in the ghee units. Due to
th is reason the efficiency of Fatima Enterprises in the production department
is v ery poor. Employees of Fatima enterprises limited are not satisfied to thei
r salar ies. The salary package is not competent so, the employees seek towards
the good offer in any other organization. Fatima enterprises limited has most of
the units in the urban areas as o ne unit is situated on Vehari road, Mumtazaba
d Multan. So, there are no tax holi days or any concession in the tax. Even the
manager has not free hand in the simple nature matter facing by the organization
or the employee of organization. Production cost is very high due to the old ma
chinery. So, the profit is very low due to high cost of goods. Centralization of
authority is the major weakness; the Chief Executive o f the company is all in
all of the organization, even in the simple nature of ma tter the chief executiv
e takes decision. There is no participation of employees in decision making for
the better ment of the organization. The staff is very short than needed, especi
ally in the Import and Export section. No proper human resource management.
OPPORTUNITIES Fatima Enterprises Limited can establish its own weaving departmen
t to c apture local and foreign market as well. They can boost up their exports
and can increase their profitability, be cause they have the potential to do som
e thing. They can install the new units in the tax holiday areas and can earn ma
x imum in production. Raw material is easily available in home country due to th
e export restr ictions of government and due to good crop of cotton. They are fi
nancially sound companies in Pakistan, So, they can get the d ifferent advantage
s from the trust of banks in the matter of Import of the oil, tallow and chemica
ls etc. Due to the trust of banks on the Fatima group they can install the new u
nits with the help of banks. The markup on loans of banks is very low, so they
can avail this opportu nities. Fatima Enterprises Ltd. is ISO-9001& 9002 certifi
ed company so it has a chance to increase its exports all over the world. There
will be an increase in its market in year 2005 after launch of fre e trade by WT
O. THREATS High cost of production is also the threat of Fatima enterprises limi
ted . Foreign investment in textile sector in Sri Lanka, Bangladesh and India is
a danger in future for FEL. An increase in the Chinas textile products is a dang
er for FEL.

Trading of quota as a commodity has been a great hurdle for exports. Due to shut
down of electricity the production of Fatima enterprises lim ited is much distu
rbed. High competition in the international markets is also the threat for the F
atima enterprises.

PEST ANALYSIS
PEST Analysis is very important that an organization considers its environ ment
before beginning the marketing process. In fact, environmental analysis sho uld
be continuous and feed all aspects of planning. The organization s marketing env
ironment is made up of: 1. The internal environment e.g. staff (or internal cust
omers), office tech nology, wages and finance, etc. 2. The micro-environment e.g
. my external customers, agents and distributor s, suppliers, my competitors, et
c. 3. The macro-environment e.g. Political (and legal) forces, Economic forces ,
Sociocultural forces, and Technological forces. These are known as PEST factor
s.
Political Factors:

The political factor has a huge influence upon the regulation of busines ses, an
d the spending poIr of consumers and other businesses. I must consider is sues s
uch a 1. How stable is the political environment? 2. Will government policy infl
uence laws that regulate or tax ymy business? 3. What is the government s positi
on on marketing ethics? 4. What is the government s policy on the economy? 5. Do
es the government have a view on culture and religion? 6. Is the government invo
lved in trading agreements such as EU, NAFTA, ASEA N, or others?
Economic Factors: 1. Marketers need to consider the state of a trading economy i
n the short a nd long-terms. 2. This is especially true when planning for intern
ational marketing. You need to look at: 3. Interest rates. 4. The level of infla
tion Employment level per capita. 5. Long-term prospects for the economy Gross D
omestic Product (GDP) per cap ita, and so on. Socio cultural Factors: The social
and cultural influences on business vary from country to coun try. It is very i
mportant that such factors are considered. Factors include: 1. What is the domin
ant religion? 2. What are attitudes to foreign products and services? 3. Does la
nguage impact upon the diffusion of products onto markets? 4. How much time do c
onsumers have for leisure? 5. What are the roles of men and women within society
? 6. How long are the population living? Are the older generations Ialthy? 7. Do
the population have a strong/Iak opinion on green issues? Technological Factors
: Technology is vital for competitive advantage, and is a major driver of global
ization. Consider the following points: 1. Does technology allow for products an
d services to be made more cheaply and to a better standard of quality? 2. Do th
e technologies offer consumers and businesses more innovative produ cts and serv
ices such as Internet banking, new generation mobile telephones, etc ? 3. How is
distribution changed by new technologies e.g. books via the Inter net, flight t
ickets, auctions, etc? 4. Does technology offer companies a new way to communica
te with consumers e.g. banners, Customer Relationship Management (CRM), etc? SUG
GESTION FOR THE ORGANIZATION:

After doing internship in Fatima Enterprises Limited as a manager I will suggest

Decision should not be centralized, to achieve the goals and plans manag ement
should be involved in decision making Ditterent types of incentive should be giv
en to the employees to make th em efficient Promotion of the product should be d
one at local as well as internationa l level Team work should be encmyaged A pro
per training programe should be introduced to make the employees sk illed accord
ing to the needs Cost of sale should be reduced to increase the profit Fatima En
terprises Limited using high amount of debts which should be re duced to reduce
the interest expenses Fatima Enterprises Limited is using out dated machineries
which are not efficient in the production of the product New technology should b
e introduced Due to the current poIr crises Fatima Enterprises Limited is unable
to f ulfill the orders of the customers, so it need its own poIr plant Governme
nt has restricted the export of the textile products due to that Fatima Enterpri
ses Limited is facing problems to maintain its growth at interna tional level so
it should be discussed with the Government Fatima Enterprises Limited is not fo
cusing at local level, it can genera te profit from local market by promoting th
eir products at local level Fatima Enterprises Limited mostly do the transcation
on credit sale and unable to collect receivable at time which the cause of shor
tage of cash. So th e cash transcation should be done Average collection period
should be reduced because Account Receivable a re not collected in time Dividend
should be given in time to attract the new shareholders CONCLUSION: The Fatima Enterprises Ltd (FEL) is one of the largest and well reputed organiza
tions in Textile industry. Fatima Enterprises exports its products in th e follo
wing countries; Bahrain, Dubai, Hong Kong, United States of America, Turk ey, Sp
ain, Korea, Italy and Singapore etc. They export the Cotton Yarn, PC Yarn and Wo
olen Yarn to the above mentioned countries. One of the leading manufacture rs an
d exporters of superior quality cotton yarns in Pakistan. Strict Quality Ma nage
ment has helped them in making their final products superior and competitive gra
nting them the edge needed to compete in global markets over the years they have
built a reputation of being one of the leading manufactures and exporters o f A g
rade knitting/weaving cotton yarn. The overall performance of Fatima Enterprises
Limited is not good from previous five years.