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TO My Beloved parents

&
To
All My Teachers
ACKNOWLEDGEMENT

First of all, I thank Almighty


Allah, who has given me the
courage to write this analysis
report. I also thank my
respectable teacher Mr.
Zeeshan Mahmood for his
generous initiation, co-operation
and coordination and the way he
showed his concerns from the
very beginning till the end. This
was his undirected attention and
continuous interest that made it
easier for us to work. Thank you,
sir; indeed we owe you a great
deal. This work provided me a
golden opportunity to learn .In
this report I’ve tried to relate
every thing that I thought was
necessary. Though, it’s a bit
difficult to say anything about
the perfection of the effort that I
have made but let us hope that
it finds its place somewhere to
meet the required and expected
criterion.
Company Introduction

The

Kohinoor Maple Leaf is a reputable and leading manufacturer of


textiles and cement. KMLG comprises of Kohinoor Textile Mills
Limited (KTML) and Maple Leaf Cement Factory Limited
(MLCF). Both companies are incorporated in Pakistan and are
listed on three stock exchanges if the country.Maple Leaf Cement
is the third largest cement factory in Pakistan. It was setup in 1956
as a joint collaboration between the West Pakistan Industrial
Development Corporation and the government of Canada. It is
strategically located at Daudkhel (District Mianwali), which is an
area rich in raw materials required for the production of cement.
Kohinoor acquired the ownership and management of maple Leaf
Cement under the privatization policy of the government of
Pakistan in 1992. Presently Kohinoor Textile Mills is the holding
company for Maple Leaf Cement.
Mission Statement

“The Maple Leaf Cement Factory


limited stated mission is to
achieve and then remain as the
most progressive and profitable
company in Pakistan in terms of
industry standards and
stakeholders interests.
The company shall achieve its
mission through a continuous
process of having sourced and
implemented the best leading
edge technology, industry best
practice, human resource and by
conducting its business
professionally and efficiently
with
responsibility to all its
stakeholders and community.”
BALANCE SHEET
EQUITY AND LIABILITIES 2006 2,007 2,008 2,009

SHARE CAPITAL AND RESERVES RUPEE IN THOUSAND


Authorized capital 5,000,000 5,000,000 7,000,000
Issued, subscribed and paid- up capital 4,264,108 4,264,108 4,264,108
Reserves 4,457,328 4,644,355 4,127,277
(547,57 (1,673,58
271,601
(Accumulated loss) / unappropriated profit 4) 4)
7,555,70
8,993,037 8,360,889 6,717,801
TOTAL EQUITY 4

NON-CURRENT LIABILITIES
Loans from related parties 250,000 35,224 0

Long term loans and finances 8,576,657 241,539 826,614


Redeemable capital 0 8,000,000 7,200,000
Syndicated term finances 0 1,000,000 0

Liabilities against assets subject to finance lease 268,040 957,434 862,214

Lease finance advances and accrued interest thereon 679,676 0


Long term deposits 2,702 2,582 2,580
Deferred taxation 897,183 154,741 69,755
Employees' compensated absences 13,192 16,688 18,990
10,687,4 10,408,2 8,980,1
TOTAL LONG TERM LIABILITIES 50 08 53

CURRENT LIABILITIES
Current portion of :
- long term loans and finances 1,792,519 0 128,889
- syndicated term finances 0 1,080,000 1,500,000
- redeemable capital 0 0 800,000
- liabilities against assets subject to finance lease 13,858 188,011 302,609
Short term finances 797,585 3,369,738 4,382,322

Trade and other payables 719,311 2,495,559 2,353,027


Accrued profit and interest / mark-up 378,675 194,568 441,194
Dividends 54,539 54,588 54843
2,649,51 3,756,4 7,382,4 9,962,8
TOTAL CURRENT LIABILITIES 9 87 64 84
14,443,9 17,790,6 18,943,0
TOTAL LIABILITIES 37 72 37
CONTINGENCIES AND COMMITMENTS
19,144,8 23,436,9 26,151,5 25,660,8
TOTAL LIABILITIES & EQUITY 98 74 61 38

ASSETS

NON-CURRENT ASSETS
Property, plant and equipment 19,330,866 20,081,448 20,381,478
Intangible assets 4,578 15,082 7,332
Loans to employees 6,373 6,121 5,666

Deposits and prepayments 43,200 54,014 51,485


16,480,4
19,385,017 20,156,665 20,445,961
TOTAL FIXED ASSET 36
CURRENT ASSETS

INCOME STATEMENT
2,014,580
Stores, spares and loose tools 3,325,744 2,936,194
Stock-in-trade 200,946 369,709 433,952 650,914
Trade debts 163,459 194,587 743,366 682,244
2007 2,008 2,009
Fair value derivative financial instruments 242,226 365,748 0
Loans and advances RUPEE IN THOUSAND85,544 82,814 78,254
Sales 3,711,081 7,815,829 15,251,374
short term Investments 944,669 734,859 406,563
Cost of sales 3,401,188 6,491,999 10,296,865
Deposits and short term prepayments 15,373 54,532 143,306
Gross profit 309,893 1,323,830 4,954,509
Accrued profit 402 763 983
Administrative expenses 67,291 121,236 151,584
Sales tax, customs and excise duty 37,742 57,769 16,797
Distribution cost fund trust 69,021 834,849 2,339,833
Due from gratuity 8,539 9,768 8,184
receivables
Other operating expenses 18,371 24,838 1,198 42,251
21,780 29,448
Taxation
Total - net
exp 154,683 980,92314,029 2,533,668
44,907 162,058
Cash and bank balances 155,210 342,907
123,359 2,420,841
118,894 99,932
TOTAL
Other CURRENT
operating ASSET
income 43,224 2,664,46105,656
4,051,957 61,749
5,994,896
5,214,877
198,434 2448,563 2,482,590
incom from operation
Finance cost (interest exp) 338,453 1,812,807 3,400,241
TOTAL ASSETS (140,0 19,144,8 23,436,974
(1,364,2 26,151,561
(917,651) 25,660,838
Loss before taxation 19) 98 44)
Taxation
(9,4
44,815 64,321
Current 77)
(172,5 (732,9
998
Deferred 89) 24)
(182,066) (688,109) 65,319
(676,1
42,047 (982,970)
(Loss) / profit after taxation 35)
CASH FLOW STATEMENT
Cash flow from operating activities 2007 2,008 2,009
RUPEE IN THOUSAND
(140,01 (1,364,24 (917,65
Loss for the year - before taxation 9) 4) 1)
Adjustments for non-cash charges and other items:
439,2 865,5 1,047,68
Depreciation 54 46 5
2,1 5,9 7,7
Amortization 91 77 50
(5,90 (7 (3,00
Gain on disposal of operating fixed assets - net 5) 25) 2)
6,9 7,1 6,0
Employees' compensated absences 79 37 46
338,4 1,812,8 3,400,24
Finance cost 53 07 1
2,2
0
Provision for obsolete stores and spares 73 -
(1,29 (5,0 (10,06
Profit on bank deposits 4) 46) 9)
(43,40 4,3
0
Investment income - net 3) 39
(6,09 (12,02 (11,71
Dividend income 4) 1) 7)
Cash inflow from operating activities before working 635,8 1,266,0 3,523,62
capital changes 38 28 2
(Increase) / decrease in current assets
(168,92 (1,311,16 389,55
Stores, spares and loose tools 7) 4) 0
(168,76 (64,24 (216,96
Stock-in-trade 3) 3) 2)
(31,12 (548,77 61,1
Trade debts 8) 9) 22
213,6 2,8 4,5
Loans and advances 26 73 60
(8,05 (39,15 (74,01
Deposits and short term prepayments 9) 9) 4)
(3,13 (20,02 40,9
Sales tax, customs and excise duty 1) 7) 72
(8,53 (1,2 1,5
Due from gratuity fund trust 9) 29) 84
8,2 (20,58 (7,66
Other receivables 54 2) 8)
(32,86 1,776,2 (142,53
Increase / (decrease) in trade and other payables 1) 48 2)
(199,52 (226,06 56,6
8) 2) 12
436,3 1,039,9 3,580,23
Cash inflow from operating activities - before taxation 10 66 4
(36,38 (75,69 (181,47
Taxes paid 0) 3) 2)
(4,03 (3,6 (3,74
Compensated absences paid 7) 41) 4)
395,8 960,6 3,395,01
Net cash inflow from operating activities - after taxation 93 32 8

Cash flow from investing activities


(3,690,93 (1,634,40
Fixed capital expenditure 7) 3)
8,4 2,5
Sale proceeds of operating fixed assets 58 19
8
Loans to employees 41 109
(200,00 173,5
Investments 0) 51
(27,27 (10,81
Deposits and prepayments 7) 4)
1,4 4,6
Profit on bank deposits received 51 85
6,0 12,0
Dividend income 94 21
43,4
0
Investment income - net 03
(3,901,37 (1,408,92
Net cash outflow from investing activities 0) 9)

Cash flow from financing activities


744,5
0
Proceeds from issue of ordinary shares 27
184,1
0
Share premium on issue of ordinary shares - net 83
(41,65
0
Term finance certificates redeemed 0)
250,0 (214,77
Loans from related parties 00 6)
1,961,69 (10,127,63
Long term loans and finances 8 7)
8,000,0
0
Redeemable capital 00
2,080,0
0
Syndicated term finances - net 00
(2 (1
Long term deposits from stockists - net 75) 20)
870,7 183,8
Lease finances - net 21 71
(149,57 2,572,1
Short term finances - net 5) 53
(238,89 (1,996,91
Finance cost paid 0) 4)
(1 (
Ordinary dividend paid 28) 14)
(52,71 (52,73
Preference dividend paid 3) 1)
3,527,89 443,8
Net cash inflow from financing activities 8 32
22,4 (4,4
Net (decrease) / increase in cash and cash equivalents 21 65)
100,9 123,3
Cash and cash equivalents - at the beginning of the year 38 59
123,3 118,8
Cash and cash equivalents - at the end of the year 59 94

ADDITIONAL INFORMATION
FINANCE COST (interest exp) 2007 2008 2009
Mark-up / interest / profit on:
loans from related parties 0 10,529 2,445

long term loans and finances 240,149 260,399 0


redeemable capital 0 502,217 1,311,908

syndicated term finances 0 162,149 268,357


liabilities against assets subject to finance lease 0 82,853 94,603
short term finances 87,140 231,791 559,270
Total interest Exp 327,289 1,239,409 2,234,138

2007 2008 2009


market price per share 20.2 3.95 3.79
preference dividend 52,931 52,994 53,310
372,263,35 372,263,35
outstanding shares 6 6 372,263,356
Loss per share - basic (0.03) (1.96) (2.78)
preferred Stock Equity 541,474 541,474 541,474

VERTICAL ANALYSIS

2007 2008 2009


BALANCE SHEET
TOTAL EQUITY 38% 32% 26%
TOTAL LONG TERM LIABILITIES 46% 40% 35%
TOTAL CURRENT LIABILITIES 16% 28% 39%
TOTAL LIABILITIES 62% 68% 74%
TOTAL LIABILITIES & EQUITY 100% 100% 100%

TOTAL FIXED ASSET 83% 77% 80%


TOTAL CURRENT ASSET 17% 23% 20%
TOTAL ASSETS 100% 100% 100%

INCOME STATEMENT
Sales 100% 100% 100%
Cost of sales 91.65% 83.06% 67.51%
Gross profit 8.35% 16.94% 32.49%
Administrative expenses 1.81% 1.55% 0.99%
Distribution cost 1.86% 10.68% 15.34%
Other operating expenses 0.50% 0.32% 0.28%
Other operating income 1.16% 1.35% 0.40%
income from operation 5.35% 5.74% 16.28%
Finance cost (interest exp) 9.12% 23.19% 22.29%
Loss before taxation -3.77% -17.45% -6.02%
Taxation
Current -0.26% 0.57% 0.42%
Deferred -4.65% -9.38% 0.01%
(Loss) / profit after taxation 1.13% -8.65% -6.45%

Balance Sheet:
• The portion of total equity has decreased immensely in total liabilities and equity over
the past three years.
• The non-current liabilities of the company decrease over the last three year in total
equity and liability portion which is a positive signal.
• Current liabilities have increased in three years which is not good for the company.
• The fixed assets decreased in 2008 materially but in 2009 these increase but still less
than 2007.
• Current assets have increased in 2008 but in 2009 they decrease but not less than
2007.

Profit and Loss Statements:


• The cost of goods sold of the company decreased over the period in terms of sales
which is good and indicate that the gross profit of the company increase in that period.
• The distribution cost of the company increase materially and affect the profitability of
the company significantly.
• The share of finance cost as percentage of net sales has increased substantially in
2008 but in 2009 it decrease but still higher than the 2007.
• Loss after taxation has increased very much as percentage of net sales in 2008 and in
2009 it decrease but still loss occur.

Summary:
The over all performance of the company in terms of the company decrease much in 2008
and in 2009 it slightly improves but still in loss and the major reason of loss is higher
distribution and financial cost of the company which affect the company performance.

HORIZANTAL ANALYSIS
2007 2008 2009
BALANCE SHEET
TOTAL EQUITY 100% 93% 75%
TOTAL LONG TERM LIABILITIES 100% 97% 84%
TOTAL CURRENT LIABILITIES 100% 197% 265%
TOTAL LIABILITIES 100% 123% 131%
TOTAL LIABILITIES & EQUITY 100% 112% 109%

TOTAL FIXED ASSET 100% 104% 105%


TOTAL CURRENT ASSET 100% 148% 129%
TOTAL ASSETS 100% 112% 109%

INCOME STATEMENT
Sales 100% 211% 411%
Cost of sales 100% 191% 303%
Gross profit 100% 427% 1599%
Administrative expenses 100% 180% 225%
Distribution cost 100% 1210% 3390%
Other operating expenses 100% 135% 230%
Other operating income 100% 244% 143%
incom from operation 100% 226% 1251%
Finance cost (interest exp) 100% 536% 1005%
Loss before taxation 100% 974% 655%
Taxation
Current 100% -473% -679%
Deferred 100% 425% -1%
(Loss) / profit after taxation 100% -1608% -2338%

Balance Sheet:
• Total equity decreased materially from 2007 to 2009 which is not a good symptom for
the company.
• Non current liabilities decrease in 2008 and 2009 which would be a positive.
• Current liabilities increased materially in 2008 and 2009 that is a negative signal.
• Overall liabilities of the company increase over the period of time which is not good.
• Fixed assets increased slightly in 2008 and 2009 as compared to 2007.
• Current assets increased materially in 2008 but decreased in 2009, but still greater
than 2007
• Over all assets increased in 2008 but decreased in 2009 but these are still greater than
base year.

Profit and Loss Account:


• Net sales increased in huge amount in 2008 and 2009.
• The cost of goods sold also increased in the relative period but it is increase less than
the sales which show that the gross profit of the company increased materially.
• Selling and admin expenses increased.
• The distribution cost increased significantly and affect the overall profitability of the
company.
• The increase in other operating expense and income was also very substantial.
• Finance cost increased with multiple effects which decrease the net profit of the
company.
• The profit of the company decreased in the period and become loss in the subsequent
period and this loss is also significant

Summary:
The over all profitability and performance of the company reduce over the period of three
years which is a negative signal.
RATIOS ANALYSIS
2007 2008 2009

Liquidity Ratios
Days' Sales In Receivables (in days) 19.138 34.715 16.328
Account Receivable Turnover (in times) 20.730 16.666 21.396
Account Receivable Turnover in days 17.608 21.901 17.059
Days Sales in Inventory 39.675 24.398 23.073
Inventory Turnover 11.920 16.156 18.983
Inventory Turnover in Days 30.620 22.592 19.228
Operting Cycle 48.228 44.493 36.287
14,9 295,4 (1,387,56 (4,748,00
Working Capital IN THOUSAND 43 70 8) 7)
1.0 0.8 0.5
current Ratio 79 12 23
0.4 0.2 0.1
Acid-Test Ratio 40 95 49
0.2 0.1 0.0
cash ratio 84 16 51
23.9 (14.3 (4.9
sale to working capital ratio 11 13) 71)

Long-Term Debt-Paying Ability


0.6 0.3 1.1
Times Interest Earned ratio 06 62 11
Fixed Charge Coverage ratio 0.612 0.393 1.106
Debt Ratio 61.629% 68.029% 73.821%
Debt to Equity Ratio 160.612% 212.784% 281.983%
debt to tangible Net worth Ratio 160.694% 213.169% 282.291%

Profitability ratio
Net profit Margin 1.133% -8.651% -6.445%
Gross Profit Margin 8.350% 16.938% 32.486%
Operating Income Margin 5.347% 5.739% 16.278%
Total Asset Turnover (times) 0.174 0.315 0.589
Return on Assets 0.197% -2.727% -3.794%
Sales to Fixed Assets (Times) 0.207 0.395 0.751
Return on Investment 1.735% 2.272% 4.830%
Return on Total Equity 0. 5% -7.8% -13%

INVESTOR RATIOS
(1.4 (0.3 (2.7
Degree of Financial Leverage 17) 29) 05)
(0.00002 (0.0019 (0.00278
Earnings per common share 9) 59) 4)
operating Cash Flow Per Share 0.000921 0.002438 0.008977
(673.3 (2. (1.
price/Earning Ratio 3) 02) 36)
(0.2 1.0 1.0
Percentage of Earnings Retained 97) 81 56
book Value Per Share 0.0227 0.0210 0.0166

CASH FLOW RATIOS


Operating Cash flow/current maturities of long term debt 0.219 0.758 1.243
0.0 0.0 0.1
Operating cash flow/Total Debt 27 54 79
Operating Cash Flow Per Share 0.00106 0.00258 0.00912
Operating Cash Flow To Cash Dividend 7.259 17.598 61.904

Ratio:
A ratio expresses the mathematical relationship between one quantity and another.

Ratio Analysis:
Ratio analysis expresses the relationship among pieces of selected financial statement data, in
a percentage, a rate, or a simple proportion.

Liquidity Ratios:
Measures of the company’s short-term ability to pay its maturing obligations. The short-term
liquidity is more important then long-term liquidity. The higher the value of the ratio,
the larger the margin of safety that the company possesses to cover short-term
debts. Liquidity ratios consist of the current ratio, the quick ratio, days sales in inventory,
inventory turnover, operating cycle and working capital operating cash flow ratio, day’s sales
in receivables, accounts receivable turnover, etc... if a firm fails to meet such current
obligations due to lack of good liquidity position its goodwill in the market is likely to be
affected beyond repair.

• Day’s sales in receivables increase in 2008 materially which is not good and it is due
to increase in account receivables but in 2009 decreased materially which would be a
positive.(Figure 1.1)
• Accounts receivable turnover, times per year, decreased materially in 2008 but in
2009 increased materially which would be a positive sign.
(Figure 1.1)

• Account receivable turnover, days increase significantly in 2008 which is not good
but in 2009 decreased slightly which is normal. (Figure 1.1)
• Day’s sales in inventory decreased which is a positive sign for the company.
• Inventory turnover times per year increased which is a Positive sign with respect to
liquidity. (Figure 1.2)
• Inventory turnover in days Decreased which is a positive sign.
Operating cycle days improved moderately. This would be a positive sign.(Figure
1.3)

(Figure 1.2)

(Figure 1.3)

• Working Capital decreased materially which is very harm for the company and show
the negative sign.
• Current Ratio Decreased materially this would be a negative from a liquidity view.
(Figure 1.4)
• Acid-test Ratio decrease with a higher speed then current this is show that there is a
huge amount of inventory exist in the company’s balance sheet. (Figure 1.4)
• Cash Ratio also decreased significantly this would be a negative sign. (Figure 1.4)
• Sale to working capital ratio times per year decrease which is a positive sign with
respect to liquidity.

(Figure 1.4)

Summary:
The overall company’s short-term ability to pay the obligations is very weak and not so much
good. Company’s collections system is not good and company’s working capital also in
negative which is very dangerous. Current position of the company is very poor and the
creditors will the give attention to give loan to this company. It looks in near future company
will not able to pay its short term obligations.

Long-term Debt Paying Ability:


Long-term solvency ratios indicate a firm’s ability to meet the fixed interest and costs and
repayment schedules associated with its long-term borrowings. These ratios are also used to
analyze the capital structure of the company. They indicate the pattern of financing, whether
long-term requirements have been met out of long-term funds or not.

• Times interest earned materially decreased in 2008 which is very bad but in 2009 it
significantly increased which is very good and positive sign. (Figure 2.1)
• Fixed charge coverage considerably decreased in 2008 near to half than 2007 but in
2009 it increased materially which is very good. (Figure 2.1)
(Figure 2.1)

• Debt Ratio worse moderately with the passage of time. It is very bad. Company takes
debt more than their equity which is not in the favor of the company. (Figure 2.2)
• Debt to equity ratio is worse over the period of time which is worse for company.
This means that company is financing from debt and not from equity. This means that
company has to pay a large amount of its income as interest to its creditors.(Figure
2.2)
• Debt to tangible net worth ratio also increased which is bad signal for company.

(Figure 2.2)

Summary:
The overall Long-term debt paying ability of the company is very poor. The company has
borrowed a large amount of loans on long tem basis and is not able to utilize it in a right way.
The income statement view of long-term debt paying ability is now in 2009 is good which
show that the company have ability to pay the interest expense but the balance sheet view of
the ability is not good because company borrow so much debt.

Profitability:

Profitability ratios are employed by management in order to assess how efficiently they carry
on business operations. Profitability is the main base for liquidity as well as solvency.
Creditors, banks and financial institutions are interested in profitability ratios since they
indicate liquidity or capacity of the business to meet interest obligations and regular and
improved profits to enhance the long-term solvency position of the business. Owners are
interested in profitability for they indicate the growth of and also the rate of return on their
investments. Generally profitability ratios are calculated either in relation to sales or in
relation to investment.

• Net profit margin shows that how much income is generated from sale Net profit
Margin decreased and goes negative in 2008, 2009 which appears to be very bad. If
we look at the gross or operating income margin it is positive and increased which is
good it mean the financial cost of the company is too much large due to this the net
profit margin goes to negative and show bad signal to stakeholders. (Figure 3.1)
• Gross profit margin improved substantially and appears to be very good. It means
the company’s sales increased at higher rate than cost of sales. (Figure 3.1)
• Operating income margin near about stable in 2008 but in 2009 increased but not at
a higher speed than gross profit this is due to the distribution cost. The distribution
cost of the company is too much that why the operating income margin increased but
not at higher rate. (Figure 3.1)

(Figure 3.1)

• Total asset turnover in times is very low. Although it has increased in 2009 but still
it is very low. At least it should be equal to one.
• Return on asset decreased over the period of time that would be bad signal.
• Sales to fixed asset improved slightly and appear to be normal because it is less than 1
which is not good. (Figure 3.2)
• Return on investment increased moderately over the period of time because it is
taken on earning before interest less tax. It shows that company is earning profit but
due to financial cost the net profit is negative. (Figure 3.2)
• Return on total equity measures the return on both common and preferred stock.
Return has worse and is bad. (Figure 3.2)
(Figure 3.2)

Summary:
The Overall profitability performance of the company is not so good. The cost of sales is
good of the company; there is no control on selling and admin expenses and that why the
distribution cost of this company is very high which one reason of bad condition. And the
other major factor of this poor situation is increase in financial charges. The gross and
operating profit of the company is sufficient but the net profit of the company is in negative
which is due to majorly financial and distribution Cost Company has earned profits but due to
high financial costs that profit is turned into loss.

Investor Ratios
• Financial leverage is in negative in all three years. Which would be a negative sign
that shows company is not able to utilize its long term debt as it should be used and
bearing the negative effect of leverage. (Figure 4.1)
• Earnings per common share decreased badly which is very poor for the company. It
means company bearing loss on each share which not attracts the investors.
• Operating cash flow per share is very low in all 3years but in positive in 2008 it is
decreased but in 2009 is increased but remains less than 1 which is not an attractive
point form investor point of view.
• Price/earning ratio is also negative. The market price of the shares has decreased
substantially in last three years. It is negative sign.
• Percentage of earnings retained is negative in 2007 but in preceding year it is
positive which show that the company pay dividend in less amount and retained in
much amount. Company policy is to invest most of the part of their earning.
Book value per share is very low and decreased moderately. (Figure 4.2)
(Figure 4.1)

(Figure 4.2)

Summary:
The Overall circumstances for investors are not excellent. Company is in loss, market price is
decreasing, no dividend for shareholders, these are all the results of company’s poor
performance. The major reason for this unfavorable scene is the bad performance of the
company. The company going to decline and if the improvement not made it will be insolvent
in near future.

Cash flow ratios


Operating cash flow /current maturities of long-term debt is very low in 2007 but in
preceding years it improve and continuous make improvement which show that firm’s ability
to meet its current maturities of debt is now good.
Operating cash flow/Total Debt ratio is very low but positive and on the progress
stage and make progress in the subsequent years which is good sign. This ratio
indicates a firm’s ability to cover total debt with the yearly operating cash flow.
Higher ratio is beneficial. (Figure 5.1)
• Operating Cash flow per share is very low which is not good.
(Figure 5.1)

Summary:
The overall position of the company in terms of cash flows is satisfactory because these ratios
are in positive figure but the problem is that they are very low ratio which is not good for
company.

Overall Summary:

If I analyze the overall performance of the company. The company has not performed
excellent in last three years. In 2007 the company’s conditions was quite better because it is
in profits but in subsequent years the company face not only losses but huge losses and the
main reasons for these losses are the high financial cost, high distribution cost, investment in
fixed assets and that’s why the working capital of that company goes into negative numbers.
The other reasons may be company’s reliance on debt, poor policies, increase in cost due to
load shedding, political conditions, financial crisis of the world etc.

Comparison with Competitor


Competitor Attock CEMENTS Pakistan Limited:
I selected Attock cements for ratio comparison.

Attock Cement Pakistan Limited (ACPL) is a public limited company, listed on the Karachi
Stock Exchange since June 2002. Main business of the company is manufacturing and sales
of cement. ACPL, is part of the Pharaon Group, which in addition to investment in cement
industry has diversified stakes in Pakistan mainly in the oil and gas sector, power and real
estate sector.

Attoc
Mapeal
k
Liquidity Ratios 2009 2009
Days' Sales In Receivables (in days) 16.328 3.15
Account Receivable Turnover (in times) 21.396 1.6
Days Sales in Inventory 23.073 38.6
Inventory Turnover in Days 19.228 9.4
Operating Cycle 19.228 11
(4,748,00 16267
Working Capital IN THOUSAND 7) 85
current Ratio 0.523 2.43
Acid-Test Ratio 0.149 1.9
Long-Term Debt-Paying
Ability
Times Interest Earned ratio 1.111 17.6
Fixed Charge Coverage ratio 1.106 17.6
Debt Ratio 73.821% 31.47
281.983
45.93
Debt to Equity Ratio %
282.291
45.93
debt to tangible Net worth Ratio %
Profitability ratio
Net profit Margin -6.445% 17.54
Gross Profit Margin 32.486% 31.83
Operating Income Margin 16.278% 24.77
Total Asset Turnover (times) 0.589 1.22
Return on Assets -3.794% 21.39
Sales to Fixed Assets 0.751 2.05
Return on Total Equity -13% 31.24
INVESTOR RATIOS
Degree of Financial Leverage (2.705) 1.06
Percentage of Earnings Retained 1.056 92.27

LIQUIDITY
• The position of days’ sales in receivables area is good for Attock Company and
Attock Company appears to be ahead of maple. (Figure 6.1)
• The account receivable turnover in times is better of Maple Company than Attock
Company. High account receivable turnover means company is good in receiving the
debt and the sale of the company move in fast cycle.
(Figure 6.1)

• Day’s sale in inventory, Maple Company appears to be ahead of Attock Company.


• Inventory Turnover in days: the attock company is good in this case because the days
in attock company is less than the maple company which is a good signal. (Figure
6.2)

(Figure 6.2)

• Operating cycle of maple company is poor than attock company it means that the
maple company is operating poor than attock company. (Figure 6.3)
• There is huge difference between the working capitals of both the companies. The
working capital of Maple Company is in negative and in millions but the position of
attock company is good in this case.

(Figure 6.3)
• In current ratio area attock company to be ahead of maple company. (Figure 6.4)
• The acid test ratio of Attock Company is in above 1 which is good signal but the acid
test ration of maple is in point which shows the weak liquidity position. The effect of
inventory is greater in Maple Company than attock because the difference between
current and acid test ratio is greater in Maple Company. (Figure 6.4)

(Figure 6.4)

Summary:
The liquidity condition of both the companies is on average but the position of Attock
Company is better than the maple company. This is good signal for the attock company’s
stake holders.

Long-term Debt Paying Ability:


• Times interest earned ratio of Attock Company is higher than the maple which is
good. It shows that the attock company has more potential to cover its interest
expenses. (Figure 7.1)
• Fixed charge coverage ratio of Attock Company also high which is good to cover all
the fixed routine charges of the company. (Figure 7.1)

(Figure 7.1)

• Debt ratio shows that the capital structure of the company in the case of
Maple Company the debt ratio is high which is not good for the company
because company use the external equity in great portion than internal
equity. In Attock Company it is low which is good but Attock Company can
get more loans. (Figure 7.2)
• Debt to Equity ratio is show too much negative sign in case of maple
company because it is too much high which is very harm full for the
company but in the case of attock company it is good. (Figure 7.2)

(Figure 7.2)

Summary:
The long-term debt paying ability of Attock Company is good than the maple
company. All the ratio of long-term debt paying ability of Attock Company is
better than the maple company.

Profitability Raios:
• In Net margin ratio case Attock Company is better than the maple
company because the ratio is negative in Maple Company and in Attock
Company it is good. It is due to the financial cost of the maple company.
The financial cost of the maple company is too much high. (Figure 8.2)
• Gross margin ratio of Maple Company is good than Attock Company which
shows that the cost control system of Maple Company is better but if we
look at the net ratio maple ratio is in negative which is due to distribution
and financial cost of the maple company.(Figure 8.2)
• Operating profit ratio of attock company is good it indicate that the
problem exist in the operating expense of the maple company because
the gross ratio is good but in the operating ratio of the maple is
satisfactory. (Figure 8.2)
(Figure 8.1)
• The total asset turnover of the both the company in positive but the
turnover of the attock company is better than Maple Company. (Figure 8.1)
• The return of asset and equity of Attock Company is larger than Maple
Company.

(Figure 8.2)

Summary:
The overall profitability of Attock Company is better than Maple Company. So
attock company profitability ratios appear to be materially better than the
profitability of Maple Company.

Investor Ratios
• The degree of financial leverage of attock is better than Maple Company.
(Figure 9.1)
• The percentage of retained earning of attock is larger than maple. (Figure
9.2)
(Figure 9.1)

(Figure 9.2)

Summary:
The investor analysis appears to be much better for Attock Company than for Maple
Company. It indicates that the investors have many chance of grow in Attock Company.

Overall summary:
If we compare both the companies overall position. We can conclude that the attock company
is performing better than the maple company. The maple company have sufficient funds but
the proper utilization is not attained that why the company of maple is in loss. Other major
reasons are the higher financial and distribution cost of maple company which is not good for
the company if the official not give their proper attention to the problems of the company it is
certain that in near future the maple company will be declared insolvent.