INTRODUCTION

Mr. Nazir Ahmed was the founder, established Masood Textile mills limited in 1984 and now Mr. Shahid Nazir is the chief executive. The Masood textile mill is established under the company ordinance 1984. Textile industry today is the backbone of economy of Pakistan and provides the largest number, i.e. about 40% of total industrial jobs and very vast industrial service opportunities. It has always been the pillar of Pakistans economy contributing substantially to Govt. revenues. The companys apparel division, which is producing high quality garments, is situated at Sargodha road, near singed cinema, Faisalabad. But its registered office has shifted to Canal road Faisalabad. The company has latest equipment and machinery to serve globally. The company has modern computerized networking system. All the Accounting and Finance relating work is carried out through computers. The company has capability in fabric, ginning, spinning, knitting, laundry and apparel manufacturing.

PROFITABILTY RATIOS:
The profitability ratio measures the income and operation success or overall performance of the company for a particular period of time.
PROFITABILITY TO SALES: Gross Profit Ratio is the ratio of gross profit to net sales i.e. sales less sales returns. The ratio reflects the margin of profit that a concern is able to earn on its trading and manufacturing activity.

Calculation of Gross Profit ratio with diagram:

Gross Profit Ratio = Gross Profit/Net Sales x 100

2007 17.52395 2008 18.46578 2009 19.13694 2010 17.90197

Gross Profit ratio

19.5

19

18.5

18

gross profit ratio

17.5

17

16.5 2007 2008 2009 2010

Interpretation:
The comparison of 4 years shows a bell shaped graph. The larger the gap in Sales and cost of goods sold, the greater is the scope for absorbing various expenses on administration, maintenance, arranging finance, selling and distribution and leaving net profit for the proprietors or shareholders.

Operating Profit Ratio is calculated by dividing the operating net

profit by sales. This ratio helps in determining the ability of the management in running the business.
Calculation of Operating Profit ratio with diagram: Operating Profit Ratio = Operating Profit/Net Sales x 100
2007 10.50409 2008 12.27845 2009 12.14712 2010 10.73181

Operating Profit ratio

Interpretation:
The ratio was highest in previous years and then shows a decreasing trend because of increasing expenses of administration, selling or distribution.

12.5 12 11.5 11 10.5 10 9.5 2007 2008 2009 2010 operating profit ratio