Ratio Analysis of Financal Statements Essay Sample

The Company has been set up with the primary aim of bring forthing and selling ordinary Portland cement. The finest quality of cement is available for all types of clients whether for dike. canals. industrial constructions. main roads. commercial or residential demands utilizing latest province of the art dry procedure cement fabrication procedure.

A longtime leader in the cement fabrication industry. Fauji Cement Company. headquartered in Islamabad. operates a cement works at Jhang Bahtar. Tehsil Fateh Jang. District Attock in the state of Punjab. The Company has a strong and longstanding tradition of service. dependability. and quality that reaches back more than 11 old ages. Sponsored by Fauji Foundation. the Company was incorporated in Rawalpindi in 1992.

The cement works operating in the Fauji Cement is one of the most efficient and best maintained in the Country and has an one-year production capacity of 1. 165 million dozenss of cement. The quality Portland cement produced at this works is the best in the Country and is preferred in the building of main roads. Bridgess. commercial and industrial composites. residential places. and a myriad of other constructions. cardinal to Pakistan’s economic verve and quality of life.

Liquidity Ratios:

Current Ratio

The current ratio shows company’s fiscal strength that in order to pay debts that come due during the current twelvemonth. how many dollars in assets are likely to be converted to hard currency within one twelvemonth. We can happen the current ratio by spliting the entire current assets by the entire current liabilities.

1. Quick Ratio
The Quick Test Ratio/Acid Test or Liquidity Ratio is the most inordinate and hard trial of a company’s fiscal strength and liquidness. It shows the liquidness of a concern.

Assetss Management Ratios:
1. Entire assets Turnover Ratio
Asset turnover is calculated to mensurate a company’s efficiency in utilizing its assets. It calculates the entire gross revenues for every rupee of assets a company owns. The higher the figure. the better the company’s efficiency is.

2. Inventory turnover ratio
Before puting in a company. it is better to do an informed determination about how much the stock list on the balance sheet is truly deserving.

3. Dayss Gross saless Outstanding
The DSO or receivable turnover is a great fiscal ratio to larn when you are analysing a concern or a stock because its better faster a company collects its histories receivables. The Oklahoman clients pay their measures the Oklahoman a company can set the hard currency in the bank. pay down debt. or get down doing new merchandises. There is besides a smaller opportunity of losing money to delinquent histories.

4. Fixed assets Turnover Ratio
The fixed-asset turnover ratio calculates a company’s ability to bring forth net gross revenues from fixed-asset investings – specifically belongings. works and equipment ( PP & A ; E ) – cyberspace of depreciation. A higher fixed-asset turnover ratio shows that the company has been more effectual in utilizing the investing in fixed assets to bring forth grosss.

Debt Management Ratios:
1. Debt Ratio
Debt ratio calculates that how much per centum of a company’s assets are financed by the debt. If the ratio is less than 0. 5. most of the company’s assets are financed through equity. If the ratio is greater than 0. 5. most of the company’s.

2. Times- interest-earned ( TIE ) ratio
Timess Interest Earned or Interest Coverage is a great tool when mensurating a company’s ability to run into its debt duties. When the involvement coverage ratio is smaller than 1. the company is non bring forthing adequate hard currency from its operations EBIT to run into its involvement duties. The Company would so hold to either usage hard currency on manus to do up the difference or borrow financess.

Profitability Ratios:
1. Net income Margin on Gross saless
Net income border on gross revenues tells the net income per rupee of gross revenues.

2. Basic Gaining Power ( BEP )
The basic gaining power ratio ( or BEP ratio ) compares net incomes apart from the influence of revenue enhancements or fiscal purchase. to the assets of the company.

3. Return on Entire assets
Tax return on assets is a utile step for comparing viing companies in the same industry. Return on assets gives an indicant of the capital strength of the company. which will depend on the industry ;
companies that require big initial investings will by and large hold lower return on assets.

4. Return on Common Equity
ROE measures the rate of return on the ownership involvement ( shareholders’ equity ) of the common stock proprietors. It measures a firm’s efficiency at bring forthing net incomes from every unit of shareholders’ equity ( besides known as net assets or assets minus liabilities ) . ROE shows how good a company uses investing financess to bring forth net incomes growing. Market Value Ratios:

1. Price/Earnings ratio
P/E ratio is a step of the monetary value paid for a portion comparative to the one-year net income or net income earned by the house per portion. It is used for rating: a higher P/E ratio means that investors are paying more for each unit of net income. so the stock is more expensive compared to one with lower P/E ratio.

2. Price/Cash Flow Per portion
P/C ratio is a ratio used to compare a company’s market value to its hard currency flow. In theory. the lower a stock’s price/cash flow ratio is. the better value that stock is.

3. Market/Book Ratio
Market-to-Book Ratio is the ratio of the current portion monetary value to the book value per portion. It measures how much a company worthy at present. in comparing with the sum of capital invested by current and past stockholders into it.

Attock cement
Company’s profile:
Attock Cement Pakistan Limited ( ACPL ) is a public limited company. listed on the Karachi Stock Exchange since June 2002. Main concern of the Company is Manufacturing and Gross saless of Cement. ACPL. is portion of the Pharaon Group. which in add-on to investing in Cement industry has diversified bets in Pakistan chiefly in the Oil and Gas Sector. The Attock Cement undertaking was conceived and the company was incorporated in 1981. the works eventually commenced commercial production on June 1. 1988. The undertaking is a Pak Saudi joint venture and involved initial capital spending of around Rs 1. 5 billion with foreign exchange constituent of around US $ 45 million. This made it one of the largest endeavors in the private sector. Pharaon Commercial Investment Company Limited holds 84. 06 % of sum paid up portion capital whereas the general public holds a sum of 15. 94 % portions. ACPL’s Cement works was designed by Uzinexportimport ( UEI ) of Romania. all equipments. and ancillaries and steel constructions was supplied by UEI and Limestone crusher and wadding works was manufactured by O & A ; K and Havor and Boecker of Germany. Thus it is with a sense of pride that Attock Cement claims innovator position in conveying the Pre-calcination / Pre-heating dry procedure engineering to Pakistan.

Bestway cement

Bestway Cement Limited is portion of the Bestway Group of the United Kingdom. The Group has a good diversified portfolio incorporating within its creases cement fabrication. planetary banking. sweeping hard currency & A ; carry concern. a twine of retail mercantile establishments. existent estate investing. cultural nutrient and drink import and distribution and milling of rice. Recently the group has embarked upon a big power coevals undertaking in Pakistan therefore farther diversifying its operations and gross base.

Bestway is U. K’s second largest hard currency and carry operator in footings of turnover with group one-year turnover in surplus of US Dollars 3. 6 billion and net incomes in surplus of US Dollars 135 million ; the 2nd largest cement manufacturer in Pakistan and joint proprietor of Pakistan’s third largest bank. United Bank Limited. Its rice milling installations are one of the largest of its sort in the state. The group is the largest abroad Pakistani investor with investings in surplus of US Dollars 1 billion and a planetary work force of over 22. 000 people spread over four continents.

Dadabhoy Cement

Dadabhoy Cement Industries Limited ( DCIL ) went into commercial production in 1986. The production. nevertheless. was non equal to run into the turning demand for cement. The direction. hence. decided to travel for aptimization and heighten the works capacity from the initial 1. 500 metric tons per twenty-four hours ( TPD ) to 1. 800 TPD. Further optimisation Plan of the Company is in procedure for which drawings and other proficient know-how have been acquired from universe renowned company for sweetening of capacity. ab initio up to 2. 800 metric metric tons per twenty-four hours in the first Phase. which will farther be enhanced to 4. 000 metric metric tons per twenty-four hours in the 2nd Phase. Dadabhoy Cement went public in late 1991 and therefore increased its capital from Rupees 300 to 600 million. DCIL in one of the innovators in presenting slag cement in Pakistan. The part of Dadabhoy Cement is rather important. This first indigenously designed and fabricated cement works is to the full functional and bring forthing in surplus of half a million metric tons of cement yearly. DCIL is a premier illustration of the huge love and devotedness the Dadabhoys have for the state and of their bold entrepreneurship.

M. H. Dadabhoy Group is besides the Pioneer in presenting Coal engineering for cement and other procedure industries. Bing Pioneer in coal engineering in cement Industry. DCIL is besides playing their function in reassigning engineering to other similar ventures. Soon DCIL is running on 100 % use of coal. Management is earnestly sing to utilize 100 % local coal

Lucky Cement
Yunus Brothers Group is one of the largest export house of Pakistan that has grown up unusually over the last 50 old ages. The YB Group is engaged in diversified fabric fabrication activities dwelling of Spinning. Weaving. Processing. Finishing and Stitching. The Group besides owns one of the largest cement fabrication works and the 2nd largest narration fabrication capacity in the Country. Besides fabrication. the Group is besides engaged in International Trading of assorted trade goods. The Group consists of the undermentioned Companies. with an one-year turnover of over Rs. 27 Billion or US $ 450 Million during twelvemonth 2004~2005 out of which exports amounted to US $ 300 Million. Maple Leaf Cement

Maple Leaf Cement is the 3rd largest cement mill in Pakistan. It was set up in 1956 as a joint coaction between the West Pakistan Industrial Development Corporation and the authorities of Canada. It is strategically located at Daudkhel ( District Mianwali ) in Northern Pakistan. which is an country rich in natural stuffs required for the production of cement. Kohinoor acquired the ownership and direction of Maple Leaf Cement under the denationalization policy of the authorities of Pakistan in 1992. Presently Kohinoor Textile Mills is the keeping company for Maple Leaf cement.