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COMMON SIZE STATEMENT OF KOHAT CEMENT

Year 2004 -2005

Accounts 2004 2005


Value in
ASSETS: Value in Rupees % Rupees %
FIXED ASSETS:
Property plant and equipment 603,032,810 47.33 581,007,037 35.17
capital work in progress 178,169,534 13.98 488,802,983 29.59
store & spares held for capital 124,267,150 9.75 50,070,412 3.03
expenditure
long term loans & advances 2,943,180 0.23 4,639,073 0.28
long term deposits 14,952,130 1.17 16,756,490 1.01
staff retirement benefits 1,097,189 0.09 -
Total fixed assets 924,461,993 72.55 1,141,275,995 69.08
CURRENT ASSETS:
Store, spares &loose tools 87,617,242 6.88 86,217,074 5.22
stock in trade 15,100,336 1.19 22,336,658 1.35
trade debtors 25,986,269 2.04 23,799,056 1.45
advances, deposits, prepayments 52,744,640 4.14 89,192,508 5.4
and other receivables
cash and bank balances 168,099,514 13.2 289,066,136 17.5
Total current assets 349,548,001 27.45 510,611,432 30.92
TOTAL ASSETS 100 100

Neelam Faiza Page 1


Year 2006-2007

Accounts 2006 2007


Value in Value in
ASSETS: Rupees % Rupees %
FIXED ASSETS:
Property, plant and equipment:
operating fixed assets 1,095,105,981 35.6 1,023,528,041 17.45
capital work in progress 984,287,376 32 4,234,731,837 72.21
long term loans &advances 49,565,634 1.61 45,731,201 0.78
long term deposits 4,969,240 0.16 3,879,440 0.07
Total fixed assets 2,133,928,231 69.37 5,307,870,519 90.51
CURRENT ASSETS:
Store, spares &loose tools 117,594,905 3.82 157,436,002 2.69
stock in trade 87,869,995 2.86 125,147,740 2.13
trade debtors 21,642,079 0.7 21,381,453 0.36
advances, deposits, prepayments 51,589,010 1.68 120,072,947 2.05
and other receivables
Short term investment 6,600,000 0.22 -
cash and bank balances 656,886,230 21.35 132,401,943 2.26
Total current assets 942,182,219 30.63 556,440,085 9.49
TOTAL ASSETS 100 100

Neelam Faiza Page 2


COMMON SIZE STATEMENT OF D.G KHAN CEMENT

Year 2004-2005

2005
2004 Value in Rs.
Value in Rs
FIXED ASSETS
Property, plant & equip 6128083 52.31 6637237 36.84
Assets subject to finance 166583 1.42 317262 1.76
lease
Capital w.i.p. 1126108 9.61 3983175 22.11
Investment 1387681 11.84 2610634 14.49
Long term loan, advances 25021 0.21 271428 1.51
and deposits
Total 8833476 75.2 13819736 76.71
CURRENT ASSETS
Stores, spares & loose 938847 8.01 1035081 5.75
tools
Stock-in-trade 298538 2.55 100994 0.56
Trade debts 52622 0.45 76238 0.42
Investment 1386816 11.84 2769134 15.37
Advance, deposits, prepay
& other receivable. 120329 1.03 121486 0.67
Cash and bank balance 83991 0.72 93836 0.52
Total 2881143 24.6 4196769 23.29
TOTAL 11714619 100 18016505 100

Neelam Faiza Page 3


Year 2006-2007

2006 2007

VALUE IN RS. VALUE IN


Rs.
FIXED ASSETS
Property, plant & equip 7521723 21.93 22117551 42.74
Assets subject to finance 295058 0.86 133376 0.26
lease
Capital w.i.p. 11759677 34.28 1907063 3.69
Investment 4482213 13.07 8174474 15.80
Long term loan, advances 335810 0.98 196913 0.38
and deposits
Total 24394481 71.11 32529377 62.61
CURRENT ASSETS
Stores, spares & loose tools 836049 2.44 1496291 2.89
Stock-in-trade 226286 0.66 295140 0.57
Trade debts 74165 0.22 144245 0.58
Investment 8543763 24.91 16933790 32.73
Advance, 152465 0.44 229315 0.44
deposits,prepayment &
other receivable
Cash and bank balance 77167 0.22 116173 0.22
Total 9909895 28.89 19214954 37.39
TOTAL 34304376 100 51744331 100

Neelam Faiza Page 4


COMMON SIZE STATEMENT OF LIABILITIES AND EQUITY OF
KOHAT CEMENT

Accounts 2004 2005


LIABILITIES Value in Rupees % Value in Rupees %
SHARE CAPITAL AND RESERVES
25.8239
Issue, subscribed &paid-up capital 329,000,010 7 439,500,020 26.60651
12.7251
reserves 162,120,028 8 162,120,028 9.814444
unappropriated profits 204,110,962 16.02114 426,112,279 25.79604
54.5702
695,231,000 9 1,081,732,345 65.48606
NON CURRENT LIABILITIES
10.4432
Long term finances- secured 133,048,330 7 81,648,330 4.942837
4.41771
liabilities against assets subject to 56,282,172 8 35,461,448 2.14677
finance lease
0.14490
long term security deposits 1,846,056 1 2,132,500 0.129098
8.28796
deferred liabilities 105,589,559 9 104,240,120 6.310502
23.2938
Total non current liabilities 296,766,117 6 223,482,398 13.52921
CURRENT LIABILITIES
10.9830
Trade and other payables 139,925,047 4 147,709,665 8.942067
markup payable on secured loans 1,414,512 0.111028 1,655,264 0.100207
4.59004
Short term finances 58,477,626 5 52,582,288 3.183234
current portion of long term liabilities:
3.24173
long term finances 41,300,000 3 53,800,000 3.256952
liabilities against assets subject to 26,949,946 2.115364 30,297,282 1.834141
finance lease
0.95322
provision for taxation 12,144,144 2 58,943,432 3.568325
0.14141
unclaimed dividends 1,801,602 2 1,648,753 0.099812
22.1358
Total current liabilities 282,012,877 4 346,636,684 20.98474

Neelam Faiza Page 5


TOTAL LIABILITIES & EQUITY 1,274,009,994 100 1,651,851,427 100

YEAR 2006-2007

Accounts 2006 2007


LIABILITIES Value in Rupees % Value in Rupees %
SHARE CAPITAL AND RESERVES
Issue, subscribed &paidup capital 925,312,540 30.0806 1,017,843,800 17.35658
reserves 389,397,905 12.65878 396,306,773 6.757943
unappropriated profits 969,229,248 31.50827 925,505,570 15.782
2,283,939,693 74.24765 2,339,656,143 39.89652
NON CURRENT LIABILITIES
Long term finances- secured 237,500,000 7.720789 2,703,308,354 46.09763
liabilities against assets subject to 2,358,098 0.076658 -
finance lease
long term security deposits and 5,451,100 0.177208 106,808,320 1.821328
retention money
deferred liabilities 161,267,836 5.242589 158,739,583 2.706875
Total non current liabilities 406,577,034 13.21724 2,968,856,257 50.62584
CURRENT LIABILITIES
Trade and other payables 215,249,060 6.997443 178,982,959 3.052072
markup payable on secured loans 1,973,686 0.064162 12,260,606 0.209072
Short term finances - secured 57,397,506 1.865912 146,434,421 2.497044
current portion of long term liabilities:
long term finances 44,148,330 1.4352 218,120,218 3.719452
liabilities against assets subject to 34,064,784 1.107398 -
finance lease
provision for taxation 32,760,357 1.064993 -
Total current liabilities 385,593,723 12.53511 555,798,204 9.477639
TOTAL LIABILITIES & EQUITY 3,076,110,450 100 5,864,310,604 100

Neelam Faiza Page 6


COMMON SIZE STATEMENT OF LIABILITIES AND EQUIY OF
D.G KHAN CEMENT

Year 2004-2005

Neelam Faiza Page 7


2004 2005
VALUE IN Rs. VALUE IN
Rs.
CAPITAL AND RESERVE
Issued, subscribed & paid-up 1676306 14.31 1843937
capital 10.23471
Reserves 4389088 37.45 7196568 39.94431
Unappropraited profit 251661 2.15 277493 1.540215
Total 6317055 53.91 9317998 51.72
NON-CURRENT
LIABILITIES
Long term finances 2730573 23.31 4899225 27.19298
Liab. Against assets 83487 0.71 131985 0.732578
Long term deposits 30365 0.26 28674 0.159154
Retirement and other benefits 38150 0.33 45765 0.254017
Deferred taxation 138000 1.18 537000 2.9806
Total 3020575 25.79 5642649 31.32
CURRENT LIABILITIES
Current portion for long term 487254 4.16 599674
liab. 3.32847
Finance under markup- secured 1360677 11.62 960620 5.331889
Derivation foreign currency - 306048 1.698709
Creditors, acc.& other liabilities 493968 4.22 1154426 6.407602
Provision for taxation 35090 0.30 35090 0.194766
Total 2376989 20.3 3055858 16.96
TOTAL LIABILITIES & 11714619 100 18116505
EQUITY 100

YEAR 2006-2007

Neelam Faiza Page 8


2006 2007
VALUE IN Rs. VALUE IN Rs.
CAPITAL AND RESERVE
Issued,subscribed & paidup
capital 1843937 5.375224 2535412 4.899884
Shared deposit money 8351 0.024344
Reserves 15085354 43.97501 29630084 57.26247
Unappropraited profit 2330558 6.793763 1757689 3.396873
Total 19268200 56.17 33923185 65.56
NON-CURRENT
LIABILITIES
Long term finances 7372468 21.49133 8686447 16.78724
Liab. Against assets 28886 0.084205 1141 0.002205
Long term deposite 33814 0.098571 79467 0.153576
Retirement and other benefits 26572 0.07746 39862 0.077036
Deferred taxation 1559000 4.54461 1624000 3.138508
Total non current liabilities 9020740 26.30 10430917 20.16
CURRENT LIABILITIES
Trade & other payable 1406869 4.101136 1027274 1.985288
Accrued mark up 340757 0.993334 342612 0.662125
Short term borrowing 2613695 7.61913 3942972 7.620104
Current portion 1619025 4.719587 2042281 3.946869
Provision for taxation 35090 0.10229 35090 0.067814
Total current liabilities 6015436 17.53 7390229 14.28
TOTAL 34304376 100 51744331 100

Neelam Faiza Page 9


TREND ANALYSIS OF INCOME STATEMENT OF KOHAT
CEMENT COMPANY

ACCOUNTS 2007 2006 2005 Base in 2004 Rs.


Sales 111.15 166.484 122.717 1,397,871,078
Cost of good sold 134.148 124.962 166.498 902,333,594
Gross profit 690.271 242.093 134.041 495,537,484
Distribution cost 157.957 131.195 105.655 11,839,810
Adm. & general expenses 141.401 116.809 111.413 32,771,011
Operating profit 61.701 254.11 136.431 450,926,663
Other operating expenses 21.389 199.971 112.452 35,722,154
Other operating income 1701.544 429.894 205.406 4,444,478
Profit from operation 82.5 260.58 139.202 419,648,987
Finance cost 1151.275 221.939 95.23 24,374,892
Profit before taxation 16.593 262.963 141.914 395,274,095
Taxation 16.353 243.193 169.999 102,616,840
Profit after taxation 16.677 269.895 132.062 292,657,255

ACCOUNTS 2007 2006 2005 Base 2004 in Rs.


Sales 1.65 2.05 1.36 3882756
Cost of sales 1.76 1.60 1.33 2497262
Gross profit 1.47 2.86 1.41 1385494
Adm. Expenses 1.52 1.78 1.11 68645
Selling and dist. expenses 1.69 0.91 1.58 38560
Operating profit 1.46 2.98 1.42 1278289
Other operating expenses 2.26 3.11 1.52 61735
Other operating income 3.73 2.29 5.51 128462
Profit from operation 1.64 2.91 1.80 1345016
Neelam
Finance cost Faiza 2.15 2.05 1.35 Page 10
224601
Profit before tax 1.54 3.08 1.89 1120415
Taxation 0.30 3.16 1.35 325922
Profit for the year 2.04 3.04 2.12 794493
D.G KHAN CEMENT COMPANY

TREND ANALYSIS OF BALANCE SHEET OF KOHAT CEMENT

Accounts 2007 2006 2005 Base in 2004


Rs.
FIXED ASSETS
Property, plant and 1.6973 1.8160 0.9635 603,032,810
equipment
Capital work in progress 23.7680 5.5244 2.7435 178,169,534
stores and spares held for
expenditure - - 0.4029 124,267,150
Long term loans and 15.5380 16.8408 1.5762 2,943,180
advances
Long term deposits 0.2595 0.3323 1.1207 14,952,130
CURRENT ASSETS
Stores, spares and loose 1.7969 1.3421 0.9840 87,617,242
tools
Stock in trade 8.2877 5.8191 1.4792 15,100,336

Trade debt 0.8228 0.8328 0.9158 25,986,269

Advances, deposits, 2.2765 0.9781 1.6910


prepayments and other 52,744,640
receivables
Cash and bank balances 0.7876 3.9077 4.2448 168,099,514
SHARES CAPITAL &
RESERVES
Issued, subscribed and paid 3.0938 2.8125 1.5000
up capital 329,000,010
Reserves 2.4445 2.4019 1.0000 162,120,028

Unappropriated profits 4.5343 4.7485 2.0877 204,110,962


FIXED LIABILITIES
Long term finances - 20.3182 1.7851 .06137 133,048,330
secured
Liabilities against assets
subject to finance lease - 0.0419 0.6301 56,282,172
Long term security deposits 1.2330 2.9528 1.1552 1,846,056

Neelam Faiza Page 11


CURRENT LIABILITIES
Trade and other payables 1.2791 1.5383 1.0556 139,925,047
Mark up payables on 8.6677 1.3953 1.1702 1,414,512
secured loans
Short term finances 2.5041 0.9815 0.8992 58,477,626
Long term finances 5.2814 1.0690 1.3027 41,300,000
Provision for taxation - 2.6976 4.8537 12,144,144

TREND ANALYSIS OF D.G.KHAN CEMENT OF BALANCE SHEET

ACCOUNTS 2007 2006 2005 BASE 2004 IN


Rs
FIXED ASSETS
Property, plant & equip. 3.61 1.23 1.08 6128083
Assets subject to finance 0.80 1.77 1.90 166583
lease
Capital work in progress 1.69 10.44 3.54 1126108
Investments 5.89 3.23 1.88 1387681
Long term loan & 7.87 13.42 10.85 25021
deposits
CURRENT ASSETS
Stores, spares & loose 1.59 0.89 1.10 938847
tool
Stock-in-trade 0.99 0.76 0.34 298538
Trade debts 2.74 1.41 1.45 52622
Investment 12.21 6.16 1.996 1386816
Advance, deposits, 1.91 1.27 1.01
prepayment & other 120329
receivable
Cash and bank balance 1.38 0.92 1.12 83991
CAPITAL AND
RESERVE
Issued, subscribed & paid 1.51 1.10 1.10 1676306
up capital
Reserves 6.75 3.44 1.64 4389088
Un appropriated profit 6.98 9.26.1.10 251661
NON-CURRENT
LIABILITIES
Long term finances 3.18 2.70 1.06 2730573
Liab. Against assets 0.01 0.35 1.58 83487
Long term deposite 2.62 1.11 0.94 30365
Retirement and other 1.04 0.70 1.20 38150
benefits

Neelam Faiza Page 12


Deferred taxation 11.77 11.30 3.89 138000
CURRENT
LIABILITIES
Current portion for long 4.19 3.32 1.23 487254
term liab.
Provision for taxation 1 1 1 35090

KOHAT CEMENT COMPANY LIMITED


REFORMULATED BALANCE SHEET
AS ON 30 JUNE 2007

FINANCIAL ASSETS: Amount in Rs.

Advances and deposits 15,740,787


Short term investment 6,600,000
Long term loans and advances 49,565,634
Long term deposits 4,969,240
Total financial assets 76,875,661
FINANCIAL LIABILITIES:

Long term finances 237,500,000


Liab. Against assets subject 2,358,098
to financial lease
Short term finances secured 57,397,506
Long term finances 44,148,330
Liab. against assets subject 34,064,784
To finance lease
Mark up payable on secured loans 1,973,686
Total financial liabilities 377,442,404

OPERATING ASSETS:

Property, plant and equipment 2,079,393,357


Stores, spares and loose tools 117,594,905
Stock in trade 87,869,995
Advances, deposits and 35,848,223
Other receivables
Trade debt 21,642,079
Cash and bank balances 656,886,230
Total operating assets 2,999,234,789

OPERATING LIABILITIES:

Neelam Faiza Page 13


Long term security deposits 5,451,100
And retention money
Deferred liabilities 161,267,836
Trade and other payables 215,249,060
Provision for taxation 32,760,357
Total operating liabilities 414,728,353

NFO = 300,566,743 CSE = 2,283,939,693 NOA = 2,584,506,436


D.G. KHAN CEMENT COMPANY LIMITED
REFORMULATED BALANCE SHEET
AS AT JUNE 30, 2007

FINANCIAL ASSETS: Amount in Rs.

Advance, deposits, prepayment & others 18693


receivable
Investment 8174474
Long term loan, advances and deposits 196913
Investment 16933790
Total Financial Assets 25323870

FINANCIAL LIABILITIES
Long term finance 8686447
Liabilities against assets finance lease 1141
Short term borrowing-secured 3942972
Total Financial Liabilities 12630560

OPERATING ASSETS
Property, plant and equipment
Assets subject to finance lease 22117551
Capital work in progress 133376
Trade debts 144245
Stores, spares and loose tools 1496291
Stock in trade 295140
Advance, deposits, prepayment & others 210622
receivable
Cash 116173
Total operating assets 26420461

OPERATING LIABILITIES
Long term deposits 79467
Retirement and other benefits 39862
Deferred taxation 1624000

Neelam Faiza Page 14


Trade and other payables 1027274
Accrued markup 342612
Current portion of fixed liabilities 2042281
Provision for taxation 35090
Total operating liabilities 5190586
(NFA) = 12693310 Net operating assets (NOA) = 21229875 (CSE) = 3392318
KOHAT CEMENT COMPANY LIMITED
REFORMULATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2007

Neelam Faiza Page 15


PARTICULARS DEBIT CREDIT

Net sales 1553733256

Cost of sales 1210466340

Gross profit 343266916

Distribution cost 18701815

Administrative and general expenses 46338529

Other operating expenses 7640715

Other operating income 75624748

Operating income before interest and tax 346210605

Tax as reported 213216408

Tax on financial expenses 98217719 114998689

Operating income after tax 231211916

Interest expense 280622053


Interest income ----

Net interest expense 280622053


Tax on net interest
98217719 182404334
Comprehensive income
48807582

D.G. KHAN CEMENT COMPANY LIMITED


REFORMULATED INCOME STATEMENT
For the year ended June 30, 2007

Neelam Faiza Page 16


PARTICULARS DEBIT CREDIT

Net sales 6419625

Cost of sales 4387640

Gross profit 2031985

Administrative expenses 104169

Selling and dist. Expenses 65122

Other operating expenses 139307

Other operating income 479420

Operating income before interest and tax 2202807

Tax as reported 167167

Tax on financial expenses 18580

148587

Operating income after tax 2054220

Interest expense 468173

Interest income 3681

Net interest expense 464492


Tax on net interest 18580
Share of loss of associated companies 14163 431749
Comprehensive income
1622 471

ACTIVITY ANALYSIS OF KOHAT CEMENT COMPANY

 Inventory turnover = CGS / Average Inventory

Neelam Faiza Page 17


= 1,210,466,340 / 106,508,867.5
= 11.3649

Average no. of days inventory in stock = 365/ inventory turnover


= 365/ 11.3649
= 32 days
Kohat Cement Company kept its inventory 32 days in this year.

 Receivable turnover = sales/ average receivables


= 1,553,733,256/ 85830978.5
= 18.1022
Company made a sale of 18.10 rupees by investing 1 rupee in receivables.

Average no. of days receivables outstanding = 365/ receivables turnover


= 365/ 18.1022
= 20 days
Kohat Cement Company recovered its receivables in 20 days in this year.

 Payable turnover = purchases/ average account payable


= 1,247,744,085/ 197,116,010
= 6.3300
For 1 rupee, payable company has made purchases of 6.33 rupees in this year.

Average no. of days payable outstanding = 365/ payable turnover


= 365/ 6.3300
= 58 days
Company had 58 days to use others assets in this year.

 Working capital turnover = sales / average working capital


= 1,553,733,256/ 278,615,188.5
= 5.58

Neelam Faiza Page 18


Company made a sale of 5.58 rupees by investing 1 rupee in working capital in this year.

 Fixed asset turnover = sales / average fixed assets


= 1,553,733,256 / 3,720,899,375
= 0.410
Company invested 1 rupee in capital investment and its sales has increased by 0.410
rupee in this year.

 Total asset turnover = sales / average total assets


= 1,553,733,256 / 4,470,210,527
= 0.348
Company made a sale of 0.348 rupee by investing 1 rupee in total assets in this year.

ACTIVITY ANALYSIS OF D.G KHAN CEMENT COMPANY


 Inventory turn over = Cost of good sold/ average inventory

Neelam Faiza Page 19


= 4387640/ 260713
= 16.83
Average inventory = (inventory of current year + inventory of previous year)/2
= (295140+226286)/2
= 260713
Average numbers of days inventory in stock = 365/inventory turnover
= 365/16.83
= 21.69= 22
 Receivable turn over = Sales/Average receivable
= 6419625/190890
= 33.63
Average receivable = (account receivable of current year +account receivable of
previous year)/2
= (229315+152465)/2
Average numbers of days receivable outstanding= 365/receivable turnover
= 365/33.63
= 10.85 =11
 Payable turnover ratio (PTO) = purchases / average account payable
= 4457720 / 1217072
= 3.66
Purchases = cost of sales + change in inventory
= 4387640 + (144245 – 74165)
= 4457720
average account payable = (payable of current year + payable of previous year) / 2
= (1027274 + 1406869) / 2
= 1217072
Average numbers of days payable outstanding = 365 / PTO
= 365 / 3.66
= 99.73 = 100
 Working capital turnover ratio = Sales/ average working capital
= 6419625/ 7859592

Neelam Faiza Page 20


= 0.82
Average working capital= (working capital of current year +working capital of
previous year)/2
= (3894459 + 11824725)/2
=7859592
2006 working capital = current assets – current liabilities
= 9909895-6015436
= 3894459
2007 working capital= 12214954 – 7390229
=11824725

 Fixed assets turnover ratio= Sales /average fixed assets


= 6419625/ 28461929
= 0.23
Average fixed assets= (current fixed assets + previous year fixed assets)/2
= (32529377 + 24394481)/2
= 28461929
 Total assets turnover ratio= Sales / average total assets
= 6419625/43024353.5
=0.15
Average total assets = (total assets of current year + total assets of previous year)/2
= (51744331+34304376)/2
= 43024353.5

LIQUIDITY ANALYSIS OF KOHAT CEMENT COMPANY

Neelam Faiza Page 21


 Current ratio = current assets / current liabilities
= 556,440,085 / 555,798,204
= 1.001
Company have 1.001 rupee of current assets against 1 rupee of liability in this year.

 Quick ratio = cash + marketable securities + account receivables / current


liabilities
= 132,401,943 + 0 + 120,072,947 / 555,798,204
= 0.4543
Company have 0.4543 rupee of assets that can be quickly liquidated against 1 rupee of
current liability in this year.

 Cash ratio = cash + marketable securities / current liabilities


= 132,401,943 + 0 / 555,798,204
= 0.2382
Company have 0.2382 rupee of quick assets against 1 rupee of current liability in this
year.
LIQUIDITY ANALYSIS OF D.G KHAN CEMENT COMPANY

 Current ratio = Current assets / Current liabilities


= 19214954 / 7390229
= 2.60
 Quick ratio = [cash + marketable security + account receivable] / Current
liabilities
= [116173 + 0 + 229315] / 7390229
= 0.047
 Cash ratio = [cash + marketable security] / Current liabilities
= [116173 + 0] / 7390229
= 0.016
LONG TERM DEBT AND SOLVENCY ANALYSIS OF
KOHAT CEMENT COMPANY
Neelam Faiza Page 22
 Debt to total capital = total debt / total capital
= 3,524,654,461 / 5,864,310,604
= 0.601
Company has 0.601 rupee debt against 1 rupee capital for operation in this year.

 Debt to equity = total debt / total equity


= 3,524,654,461 / 2,339,656,143
= 1.506
Company has 1 rupee of equity against 1.506 rupee debt. Risk of return is high as equity
is less than the debt.

LONG TERM DEBT AND SOLVENCY ANALYSIS OF


D.G KHAN CEMENT COMPANY

 Debt total capital = total debt / total capital


= 17821146 / 51744331
= 0.34
Total debt = current + long term liabilities
Total capital = liabilities + equity

 Debt to equity = total debt / total equity


= 17821146 / 33923185
= 0.53

INTEREST COVERAGE RATIO OF KOHAT CEMENT COMPANY

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 Time interest earned = EBIT / interest expense
= 346,210,605 / 280,622,053
= 1.234
EBIT of Kohat Cement Company is higher than the interest expense. Company can get
loan easily if it has greater ratio of time interest earned.

 Capital expenditure ratio = cash from operation / capital expenditure


= 249,492,301 / 3,173,942,288
= 0.0786
As CER <1 that is why, company will arrange cash from other sources.

 CFO to debt = CFO / total debt


= 249,492,301 / 3,524,654,461
= 0.0708
Company generated 0.0708 rupee cash from operation against 1 rupee debt in this year.

INTEREST COVERAGE RATIO OF D.G KHAN CEMENT


COMPANY
 Time interest earned = earning before interest and tax (EBIT) / interest expense
= 2202807 / 468173
= 4.71

 Capital expenditure ratio = cash from operation / capital expenditure


=997019 / 8134896
= 1.23
Capital expenditure = fixed assets of current year – fixed assets of previous year

 Cash from operation to debt = cash from operation / total debt


= 997019 / 8434146 = 0.056
PROFITABILITY ANALYSIS OF KOHAT CEMENT COMPANY

Neelam Faiza Page 24


RETURN ON SALES
 Gross margin = gross profit / sales
= 343,266,916 / 1,553,733,256
= 0.221 = 22.1 %
Company earned 22.1% gross margin in this year.

 Operating margin = operating income / sales


= 278,226,572 / 1,553,733,256
= 0.1791 = 17.91 %
Company earned 17.91% operating margin in this year

 Margin before interest and tax = EBIT / Sales


= 346,210,605 / 1,553,733,256
= 0.223 = 22.3 %
Company’s earning was 22.3 % before paying interest and taxes in this year.

 Pretax margin = EBT / sales


= 65,588,552 / 1,553,733,256
= 0.042 = 4.2 %
Company’s earning has reduced to 4.2 % after paying taxes in this year.

 Overall margin = net income / sales


= 48,807,582 / 1,553,733,256
= 0.0314 = 3.14 %
Company’s overall margin was 3.14 % in this year.

RETURN ON INVESTMENT
 Return on assets (before tax) = EBIT / average total assets
= 346,210,605 / 4,470,210,527
= 0.0774 = 7.74 %
Company earned 7.74 % profit on assets in this year.
Neelam Faiza Page 25
 Return on assets (after tax) = net income + after tax interest cost / average total
assets
= 48,807,582 + (1-0.35) 280,622,053 / 4,470,210,527
= 231,211,916.5 / 4,470,210,527
= 0.0517 = 5.17 %
Company earned 5.17 % profit on assets after paying tax in this year.

 Return on total capital (before tax) = EBIT / average (total debt + stockholder’s
equity)
= 346,210,605 / 4,470,210,527
= 0.0774 = 7.74 %
Company earned 7.74 % profit on total capital in this year.

 Return on total capital (after tax) = net income + after tax interest cost / average
(total
Debt + stockholder’s equity)
= 48,807,582 + (1- 0.35) 280,622,053 / 4,470,210,527
= 231,211,916.5 / 4,470,210,527
= 0.0517 = 5.17 %
Company earned 5.17 % profit on total capital after paying tax in this year.

 Return on equity = net income / average stockholder’s equity


= 48,807,582 / 2,311,797,918
= 0.0209 = 2.09 %
Company earned 2.09 % profit on total equity in this year.

 Return on assets = total asset turnover x return on sales


= 0.348 x 0.0314
= 0.011
PROFITABILITY ANALYSIS OF D.G KHAN CEMENT COMPANY
Neelam Faiza Page 26
RETURN ON SALES
 Gross margin = gross profit / sales
= 2031985 / 6419625
= 0.32 or 32%

 Operating margin = operating income / sales


= 1862694 / 6419625
= 0.29 or 29%

 Margin before interest and tax = EBIT / Sales


= 2202807 / 6419625
= 0.34 or 34%

 Pre Tax Margin = earning before tax (EBT) / sales


= 1720471 / 6419625
= 0.27 or 27%

 The overall profit margin = net income (N.I) / Sales


= 1622471 / 6419625
= 0.25 or 25%

Neelam Faiza Page 27


RETURN ON ASSETS
 Return on assets = [net income + after tax interest cost] / average total assets
= 1622471 + 449446] / 43024354
= 0.048 or 4.8%
After tax interest cost = 1 – tax rate
= 1 – 0.04
= 0.96
= 0.96 x 468173
= 449446
 Return on assets before tax = EBIT / average total assets
= 2202807 / 43024354
= 0.051 or 5.1%

 Return on total capital before interest an tax = EBIT / average (total debt +
equity)
= 2202807 / 43024354
= 0.051 or 5.1%

 Return on total capital = [net income + after tax interest expense] / average ( total
debt
= [1622471 + 449446] / 43024354
= 0.048

 Return on equity = net income / average stock equity


= 1622471 / 26595693
= 0.061 or 6.1%

Neelam Faiza Page 28


ANALYSIS OF PROFITABILITY AND GROWTH OF
KOHAT CEMENT COMPANY

 ROCE = RNOA + [FLEV (RNOA – NBC)]


RNOA = OI / Average NOA
= 278,226,572 / 3,968,531,203
= 0.0701
NBC = Interest expense / average NFO
= 280,622,053 / 1,656,733,285
= 0.1694
FLEV = Average NFO / Average CSE
= 1,656,733,285 / 2,311,797,918
= 0.7166
 ROCE = 0.0701 + [0.7166 (0.0701-0.1694)]
= 0.0701 + [0.7166 x -0.0993]
= - 0.0011 = - 0.11%
 ROCE = PM x ATO + [FLEV (RNOA- NBC)]
Profit margin = OI / Sales
= 278,226,572/ 1,553,733,256
= 0.1791 = 17.91 %
Asset turn over = sales / average NOA
= 1,553,733,256 / 3,968,531,203
= 0.3915 = 39.15 %
 ROCE = 0.1791 x 0.3915 + [0.7166 (0.0701- 0.1694)]
= 0.0701 + [0.7166(-0.0993)]
= 0.0701-0.0712
= -0.0011
 OLLEV = OL / NOA
= 456,791,468 / 5,352,555,969
= 0.0831 = 8.31 %

Neelam Faiza Page 29


 Financial leverage effect = operating income / net income
= 278,226,572 / 48,807,582
= 5.7005

ANALYSIS OF PROFITABILITY AND GROWTH OF D.G KHAN


CEMENT COMPANY
 Return on common equity(ROCE) = ROA + debt / equity (ROA – return on net
financial assets)
= 0.10 + (-0.30)[(0.10 – (-0.058)]
=0.10 – 0.0474
= 0.0526
ROA= O.I. / average net operating assets
= 1862694 / (21229875 + 15919344) / 2
= 0.10
Return on net financial assets (RNFA) = NFI / [1/2(net financial assets of current
year +net financial assets of previous year)]
RNFA = -464492 / 0.5(12693310 + 3348856)
= -0.058
Financial leverage = debt / equity = NFO / CSE
= - 8021083 / 26595692
= -0.30
 Financial leverage effect = O.I. / N.I
= 1862694 / 1622471
= 1.15

Neelam Faiza Page 30


BUSINESS ACTIVITIES OF KOHAT CEMENT COMPANY

 Dividends = earning – change in CSE


= 48,807,582 – 55,716,450
= Rs. -6,908,868

 C- I = d + NFE – change in NFO


= -6,908,868 + 280622053 – 2,712,333,083
= Rs. -2,438,619,898

BUSINESS ACTIVITIES OF D.G KHAN CEMENT COMPANY

 Dividend (d)= earning – change in common stock equity


= 1622471 – (33923185 – 19268200)
= 1622471 – 14654985
= -13032514

 C-I = d – NFI + change in NFA


= - 13032514 – (-464492) + 3348856
= - 9219166

Neelam Faiza Page 31