Suraj Cotton Mills Ltd

Suraj Cotton Mills Ltd maintains a conservative capital structure with a debt-to-equity ratio of 0.35, indicating limited leverage relative to its equity base of PKR 13.5 billion. The company holds total assets of PKR 24.3 billion against total liabilities of PKR 10.7 billion, resulting in a current ratio of 2.06, which suggests adequate short-term liquidity to cover immediate obligations. However, the risk assessment flags medium liquidity risk, and the company reports negative net cash after subtracting total debt, implying that while current assets exceed current liabilities, the overall balance sheet carries significant long-term debt obligations of PKR 4.8 billion.

Profitability metrics show a return on equity (ROE) of 6.36% and a return on assets (ROA) of 3.54% for the latest period. The company generated PKR 27.4 billion in revenue, with a gross profit of PKR 2.3 billion and operating income of PKR 2.2 billion, leading to a net income of PKR 1.1 billion. Without cohort median data for direct comparison, these returns must be evaluated against general industry standards for textile manufacturing, where capital intensity often moderates ROA. The gross margin of approximately 8.3% reflects the cost structure inherent in its operations.

Free cash flow surged 2,028.4% year-over-year to PKR 762.6 million, demonstrating exceptional cash generation capability.

Cash conversion ratio of 3.97 ranks as best-in-class, significantly outperforming the cohort median of 1.19.

Debt-to-equity ratio of 0.35 is below the cohort median of 0.38, reflecting a conservative leverage profile.

The company faces medium liquidity and credit risks, which could constrain financial flexibility and increase borrowing costs.