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

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

1

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 textile


References: AFTAB, A., KHAN And MEHREEN KHAN, 2010. Pakistan Textile industry facing new challenges. Research Journal of International Studies - Issue 14: 341-370. ALEESHA, MOHAMMADALLY, BOOLAKY, INDRANARAIN, RAMLAL., 2010. The Impact of the global financial crisis on the Mauritian financial services sector. International Research Symposium in Service Management ISSN 1694-0938, pp: 24-27. EUGENE, F., BRIGHAM, C. LOUIS, GAPENSKI. 1977. Financial Management Theory and Practice, 7th ed., the Dryden Press, New York, pp: 47-90. IDREES, KHAWAJA, TAHIR, MAHMOOD, USMAN, QADIR. 2010. Social impact of global recession on Pakistan. Pakistan Economic and Social Review, 48(2): 261-278. KEVIN, S., 2006. Portfolio Management, 2nd Ed, Prentice Hall of India, New Delhi, pp: 55-110. 1442 Aust. J. Basic & Appl. Sci., 5(10): 1435-1443, 2011 KHAN, M,Y., P.K. JAIN. 1994. Financial Management Text And Problems, 2 ed, Tata McGraw- Hill Publishing Company Limited, New Delhi, pp: 79-160. MUHAMMAD USMAN. 2010. Global financial crisis: its impact on developing countries abd lessons for Pakistan. IPRI Journal X, 1: 93-118. MUHAMMAD, ATHER, AKHLAQ, AHMAD. 2009. Swot Analysis of textile industry of Pakistan. Pakistan Textile Journal, 53(4): 34-78. MUHAMMAD, SHAHZAD, IQBAL, FAIZ, MOHAMMAD, SHAIKH, BABAR, MEHMOOD, KAMRAN, SHAFIQ. 2010 Development of textile industrial cluster in Pakistan.Published by Canadian Center of Science and Education, 6(11): 123-140. PRASANNA, CHANDRA. 2006. Financial Manangent Theory and Practice, 6th ed, Tata McGraw- Hill Publishing Company Limited, New Delhi, pp: 73-109. VAQAR, AHMED, CATHAL, OL, DONOGHUE. 2010. Global economic crisis and poverty in Pakistan. International Journal of Micro Stimulation., 3(1): 127-129. WILLIAM, A., AMPONSAH, VICTOR, OFORI, BOADUMAY. 2002. Crisis in the U.S textile and apparel industry: is it caused by trade agreements and Asian currency meltdowns? Research Report presented during the International Agricultural Trade Research Consortium General Membership Meeting, Tucson, Arizona, December 14-16, 2001. www.articlesbase.com (2010) Financial crisis (Accessed on 25-03-2011) 1443
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