Return On Total asset (ROA);

Return on total assets is calculated on the basis of this formula;

Earnings available for common stockholders

Return ON total assets= ---------------------------------------------------------------- x 100
Total assets

Azgard Nine Limited Year ended 30 Year ended 30 Year ended 30 Year ended 30
June 2019 June 2018 June 2017 June 2016
Return on total assets PKR PKR PKR PKR
1.3% 1.0% (0.7%) (4.5%)

Return On Total Assets Time Series Analysis;

It measures the overall effectiveness of management in generating profits with its available
assets.in 2016 our return on total assets is (4.5%) it mean the business in unambiguously
unprofitable (loss making) for as long as the negative return on assets persists. The assets can be
financed by either equity, debt or some combination of both. So in 2017 our company although
unprofitable but as compare with previous year its much better because of its assets financing
options, and in 2018 our most of the assets are financed by some external source due to our
external source we are gradually improved and in current year we are financed our most of the
assets by another means so we are improving day by day.

Return On Total assets cross sectional analysis;

For comparsion purpose we have data of Kohee Noor whose is working in the same
environment with our company (Azgard Nine),

Year ended 30 June Year ended 30 Year ended 30 Year ended 30

2019 June 2018 June 2017 June 2016
Return on total assets PKR PKR PKR PKR
Azgard Nine 1.3% 1.0% (0.7%) (4.5%)

Koh e Noor

As we observe that our competitor in 2019 is 1.9% and we are in return on total assets of our
company is 1.3% it mean we are less finance our assets than our competitor as we see in 2018
and 207 and 2016 our competitor is either has finance most of the assets due to his return on
assets higher than us .
Return On Total Equity;
It measure with the help of following formula;

Earnings available for common stockholders

Return On Total Equity = ---------------------------------------------------------- x 100
Common stock equity

Azgard Nine Limited Year ended 30 Year ended 30 Year ended 30 Year ended 30
June 2019 June 2018 June 2017 June 2016
Return on total Equity 28.7% 45.9% -58.7% -230.6%

Return On Total Equity Times Series Analysis;

Return on equity measures net income less preferred dividends against total stockholder’s
equity. In this scenario we see that our company in 2019 and 2018 has return on equity is 28.7%
and 45.9% respectively.It mean either company issue more share to general public or profit is
low from previous year and if we talk about 2017 and 2016 in these year company own share
holding is much decrease than may we company use to prevail its operation at financing from
financial institutions.

Return On Total Equity Cross sectional analysis;

Year ended 30 Year ended 30 Year ended 30 Year ended 30

June 2016 June 2017 June 2018 June 2019
Azgard Nine -230.7 -58.7% 45.9% 28.7%
KOOH e Noor

Khoo e Noor return on equity is low because of they retain major amount of profit in the form of
reserve as we see our return on equity is too high because we are focus on the short term
company goal and if we see our competitor they are focus on the long term goal they are much
better approach than us. No doubt we current satisfy the investor and gain benefit by share price
rise but in future may be this situation cannot sustain.
 Liquidity Ratios
The liquidity ratios are some of the most widely used ratios, perhaps next to profitability ratios.
They are especially important to creditors. These ratios measure a firm’s ability to meet its short-
term obligations.

The level of liquidity needed varies from industry to industry. Our Textile sector industries are
more cash-intensive than others., so the liquidity ratios of companies in this type of industries
are not comparable to each other. It is also important to note a company’s trend in liquidity ratios
over time. In this section we have basically discuss here two ratios,

Current Ratio;

The current ratio is calculated with the help of formula is as under;

Current asset
Current Ratio = ------------------------------------------- x 100
Current liability

Here we have calculated is ratio of Azgard Nine;

Azgard Nine Limited Year ended 30 Year ended 30 Year ended 30 Year ended 30
June 2019 June 2018 June 2017 June 2016
Current Ratio 0.42 0.34 0.30 0.29

Current Ratio Time Series analysis;

Azgard Nine is working in the textile sector his current ratio mean current assets against its
current liabilities. The current ratio indicates if the company can pay off its short-term liabilities
in an emergency by liquidating its current assets. Current assets are found at the top of the
balance sheet and include line items such as cash and cash equivalents, accounts receivable and
inventory, among others. If we talk about the standard we can say that to meet the payment
against his current liability company has to maintain it on “>2”it mean company has to pay his
debt has 2 times power but in the case of Azgard Nine our current ratio in 2016 is just 0.29 It
shows that company has to sale out fixed assets in case if not in use to make its in safe position
on next year there is not so much difference in 2017 and in 2018 improvement seen in current
ratio but too below from safety level and in current year 2019 it is just 0.42 .these result indicate
that company current ratio is much poor either company has to issue the share to generate the
cash to meet is current liability or to sell the fixed asset to improve this current ratio.

Current Ratio Cross Sectional Analysis;

The data of AzardNine & Kooh e Noor is as under,

Year ended 30 Year ended 30 Year ended 30 Year ended 30

June 2016 June 2017 June 2018 June 2019
Azgard Nine Limited 0.29 0.30 0.34 0.42

Kooh e Noor
Limited

Kooh_-e-Noor is also working in the textile sector as a competitor of Azgard Nine in the
same environment if we see the current ratio of Kooh-e-Noor on yearly basis we see that his
current ratio is much better than us if see the industry average of Kooh—e-Noor of these four
year it is about “0.82” and our current ratio average is about to near “0. 34” so we have to
focus on this ratio because we are too away from industry average.

Quick Ratio;

Quick ratio is also known as asset test ratio.The quick ratio is a liquidity ratio that is more
stringent than the current ratio. This ratio compares the cash, short-term marketable securities
and accounts receivable to current liabilities. it is calculated by using such formula;

Current assets –inventory

Quick Ratio = --------------------------------------------------------- x 100
Current Liability
 Quick Assets Year ended 30 Year ended 30 Year ended 30 Year ended 30
June 2019 June 2018 June 2017 June 2016

Azgard Nine Limited 29% 20% 18.60% 17.61%

Quick Ratio of Azgard Limited on time series analysis;

Quick assets ratio of Azgard from 2016 to 2019 gradually increase decrease of quick asset
mainly has two reason either company takes loan from short term source and his decrease in sale
is also be a factor to be consider. In 2018 the ratio is 20% and in 2019 the ratio increase with the
45% gap but if we talk about the overall situation we see that his short term pay off ability to
pay off the his current liability is so poor at least make this ratio at “1” then the company pay off
his short term debts is in safe position.

Quick Ratio of Azgard Nine & Kooh e Noor cross sectional analysis;

The data related to this ratio is as under;

Quick Assets Year ended 30 Year ended 30 Year ended 30 Year ended 30
June 2019 June 2018 June 2017 June 2016
Azgard Nine 29% 20% 19% 18%
Kooh e Noor 65% 56% 53% 51%

Kooh e Noor Limited has this ratio is much better than as because they takes long term loan and
put effort to promote his sale if we talk about the averages of four year of kooh-e-Noor it would
be appox 56% and if we talk about our company average it is just 22% it mean we are too low
from industry average we have to improve at least at industry average to carry on our daily
routine task of quick assets management.
Solvency Ratio;

Solvency ratios measure a company’s ability to meet its longer-term obligations. Analysis of
solvency ratios provides insight on a company’s capital structure as well as the level of financial
leverage a firm is using. Some solvency ratios allow investors to see whether a firm has adequate
cash flows to consistently pay interest payments and other fixed charges. If a company does not
have enough cash flows, the firm is most likely overburdened with debt and bondholders may
force the company into default

Debt Ratio;

This ratio is calculated under such formula;

Total Liability
Debt Ratio= ------------------------------------ x 100
Total Assets

The result of previous four year of Azgard limited as shown below,

Azgard Nine Limited Year ended Year ended Year ended Year ended
30 June 2019 30 June 2018 30 June 2017 30 June 2016

Debt Ratio 95 :% 104 % 99 % 107 %

Time Series Analysis of Azgard Nine ;

This ratio basically shows that how much company finances its assets on long term liability. In
2019 results shows that company finance is 95% assets on long term finance and only 5% is
finance on owner equity and if it compare with previous year this ratio is better in this year
almost 9% decrease in this year and from 2016 and 2019 almost 11% decrease in this year.

Cross Sectional analysis of Azgard Nine;

Here we have some calculation regarding our competitor (Kooh e Noor),

Azgard Nine Limited Year ended Year ended Year ended Year ended
30 June 2019 30 June 2018 30 June 2017 30 June 2016
Debt Ratio 95 % 104 % 99 % 107 %