Impact of Financial Crisis on the Textile Industry of Pakistan: a Case Study of Fateh Textile Industry

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Australian Journal of Basic and Applied Sciences, 5(10): 1435-1443, 2011 ISSN 1991-8178

Impact Of Financial Crisis On The Textile Industry Of Pakistan: A Case Study Of Fateh Textile Industry 1

Dr. Zahid Ali Channar, 2Dr. Nanik Ram


Assistant Professor, Department of Management Sciences, Faculty of Commerce, Economics and Management Sciences, Isra University, Hyderabad, Sindh, Pakistan. 2 Assistant professor Department of economics, University of Sindh, Jamshoro pakistan. Abstract: After the great depression of 1930s, financial crisis of 2007-09 were most serious. Due to these financial crises large financial crisis collapsed, key businesses failed & wealth of consumer has been lost. Pakistan can not be the exceptional case in this regard. The key industry of Pakistan – textile industry suffered huge financial losses in that period. This study is conducted to assess the impact of financial crisis on the textile sector of Pakistan. For this purpose a case study of Fateh Textile industry is carried out. Data was collected from the internal sources-fateh textile industry’s records-as well as from external sources-Pakistan Economic Survey. Data was analyzed through vertical analysis i.e. Common size balance sheet analyses, Common size Income statement analysis, and through ratios Liquidity Ratios, Asset Management Ratios, Debt Management Ratios and Profitability Ratios. Common size income statement analysis and profitability measuring ratios confirmed that Fateh textile industry earned higher profits before the financial crisis & financial crisis deteriorated the earning capacity of this industry. Common size balance sheet analyses showed that after financial crisis Fateh textile industry was lowly leveraged, which deprived the owners of high rate of return. Debt management ratio analyses proved that creditors provided lesser amount in financing after financial crisis as compared to before crisis. Liquidity ratio proved that debt retiring ability of fateh...
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