ACC Limited

In 1936, eleven cement companies got merged and became ACC Limited ( The Associated
Cement Companies Limited), ACC is one of India's leading manufacturers of cement
and ready-mix concrete with 17 cement factories, 75 ready mix concrete plants with
the production Capacity of the firm is 33.5 Million tones (1 Million equals to 10 lakhs)
yearly, over 6,700 employees, a vast distribution network of 50,000+ dealers &
retailers and a countrywide spread of sales offices,

The management control of company was taken over by Swiss cement major Lafarge Holcim in
2004, back in 2013 ACC and Ambuja cement both the firms were getting into merge but the
process got stoped, Lafarge Holcim has holding in both the frim ACC and Ambuja.

For over eight decades, ACC has earned the country's trust and goodwill through its
valued product portfolio, ethical business practices and governance, focus on
sustainable development, and its contributions to society.

PRODUCTS: -

Gold range

Silver range

Bulk cement

Construction Chemicals

Ready mix concrete

Digital & customer solution

(Analysis)

Income statement: -

Common size:
1. Profitability: - In the year 2019, the Net profit has reduced by 10%
compare to FY 2018 , in FY 2018 the PAT has increased because
firm has reversed its provision in PBT of Rs 500.63 in FY 2018 and
adjusted TAX, the effect was made in contingent liabilities which
was made from 2006 to 2016, their was case between firm and
income tax going in court, (frim was exporting goods from
himachal plant on export and on yearly basis firm gets excise
incentive from govt and as per income tax frim has to pay tax on
 the excise incentive so the case was in the court and firm started
to made provision for the same YOY, as the results getting in the
favour of the firm, at last frim revered the provision in PBT, so the
PAT in FY 2018 is at higher side)
2. Performance: - Revenue has been increased by 6% in current year YOY
increase seen in Topline but the profits are decreased due to increase in
purchase of traded goods compare to YOY
3. Efficiency: - Utilization of resources has fall in current year which results
to decrease in efficiency in the company.

Comparative:
1. Profitability: - In the year 2019, the profit has reduced by 10% due to
increase in total expense by 4%; under expenses major impact has been
created by purchase of traded goods and tax adjusted in FY 2018 of rs
500.63
2. Performance: - Revenue has been increased by 6% in current year but
overall profits has been decreased.
3. Efficiency: - The total expenses are increased by 4% majorly because of
purchases which has increased to 307% in current year. Efficiency has
decreased due to increase in operating cost and interest expenditure.

Trend:
1. Profitability: - There is an increasing trend seen in the operating profit of
the Firm, the profitability of the company is into increasing trend YOY
from last four years but in current year 2019 the profit has been decreased
because, frim has increase in purchase of traded stock and tax adjusted in
FY 2018 of 500.63
2. Performance: - There is an increasing trend in the revenue in last five years
but as the total expenses is in increasing trend it is affecting the
performance which is results to break the increasing trend of profitability.
3. Efficiency: - Utilisation of resources was in good trend in last four years
but the trend was not followed in the current year.

Balance sheet:
1. Net worth: Net worth of the firm is at very good state the reason behind
increase in networth, As every year the net profit of firm is positive so
ultimately the net profit is carried forward into reserves and surplus and
hence, the net worth of the firm is into increasing trend year by year.
2. Capital structure: firm has taken high debts compare to its equity available
in the frim, also debt has been increasing in the firm YOY.
3. Working capital: Firm has good liquidity and cash portion in its current
asset this shows firm is in a state to tackle its current liabilities, proportion
of inventories are increasing YOY hence the quality of working capital is
on lower side.

Short term ratios: -

(liquidity ratio):
1. Current ratio – (Current assets/Current liabilities) = 1.35X which means
Company has good ability to meet its short-term obligations.
2. Quick ratio – (Quick assets/Current liabilities) = 0.94X which is decent and
but this shows there is low liquidity in the frim.
3. Working capital - (Current assets – Current liabilities) =27.65CR, Firm do
not have any working capital Gap, its current assets are in a condition to
tackle current liabilities.
4. Quality of working capital – Overall financially firm sounds good, it does
not have any working capital gap as of now to take any borrowing or loan
and advances.

(Efficiency ratio):
5. Debtors turnover ratio – Debtors days of the firm has decrease compare to
last year 2018 to 2019 which is good sign, firm is receiving credit within 15
days after the sale of products.
6. Inventory turnover ratio: - YOY inventory days has decrease compare to last
year, decrease in inventory days means firm is using his inventory to
convert into FG compare to last year.
7. Creditor turnover ratio: - The creditors turnover days has decreased which
means that the firm will have to pay its creditors early compare to previous
year.
8. Operating cycle days: The major impact on operating cycle has been created
 by creditors as the number of days to pay cash has been decline but also the
decline in debtors turnover days will release the cash from debtors which
henceforth will increase our cash and cash equivalent.

Long term ratios: -

1. Interest coverage ratio – Firm has decent interest coverage ratio which
means the company is more capable to meet its interest obligations from
operating earnings.
2. Fixed coverage ratio - Firm has good capacity to pay its fixed expenses,
firm only has fixed expense of interest.
3. Debt service coverage - DSCR is at 2.19X, firm has good earning to meet
its debt obligation.
4. Debt ratio - Debt ratio shows up how much the total Fixed assets of firm
are finance with debts, As the debt ratio reflects firm is in highly leverage
5. long term debt to equity- Firm is highly leverage it has high obligations
that its equity, YOY the debt is increasing,

PROFITABILITY RATIOS
1. Net Profit Margin - It is reduced to 8.68% in 2019 compare to FY 2018, the
decrease in exceptional because tax adjusted in FY 2018 of 500.63, if this
adjustment was not done then the NP will be in increasing trend YOY
Total Asset Turnover - It explains how well the assets are utilized. Here, our
total asset turnover has decreased by1.38% compare to last year . The same
affect can also be seen in the ratio return on asset.
Return on Asset - It has decreased in 2019, If we see the trend of expenses in
the income statement it clearly states that it is increasing YOY which is majorly
because of the changes in inventory in last two years so this ratio indicates that
the company is not making enough income from the utilization of its asset.
Operating Income Margin - It has shown an increase in 2019. Majorly
because of increase in the revenue, frim has good operating income left after
deduction of fixed cost and variable cost.
Operating Asset Turnover – please write by your own.
DuPont on Operating Assets -
DuPont on Return on Total Asset -
Sales to Fixed Asset - It has shown a increase in 2019 by 6.43% compared to
2018. This explains that company is utilizing its fixed assets properly, and thus
is able to generate revenue for the company.
Return on Investment – ROI has decrease compare to 11.93 in FY2019 from
14.43 in FY2018, because PAT has decrease in FY 2019. In FY 2018 ROI is
higher because firm has not paid its tax dues in FY 2019 so the PAT is at higher
side in FY 2018
Return on Total Equity - It has decreased in 2019 by 1.87%, although the
average total equity has shown increasing trend but profit is decreased.
Return on Common Equity - .
Gross Profit Margin - It has decreased to 82% majorly because of the purchase
of traded goods which gives less margin to the company compare to the goods
or products which they produce and sell.
INVESTORS RATIO
Degree of Financial Leverage - It explains the company taking risk to fund
itself through debt. Here, it has decreased to 1.04 in 2019compare to last year
which means that a company is not incurring excessive debt to finance its
assets.
EPS - It explains how much each share of equity could earn profit in the
specified period. It has decrease to 73.35 in 2019 compared to 2018 because of
decrease in the net income of the company which shows a signal to investors
that a company is in trouble, which can lead to a decline in the stock price
PE Ratio - It explains that higher the ratio, higher the risk to invest in the
company but with high returns expected. Here, the PE ratio has decreased to
20.03 in 2019 which explains that the risk has been reduced but at the same time
EPS and MPS has also reduced.
Percentage of Earnings Retained - It has increased to 81% in FY2019.This
shows that the company is in the growth stage as our profits were increasing
YOY but the profits are decreased in the current year which further can affect
the retention ratio.
Dividend Pay-out - A consistent trend in this ratio is usually more important
than a high or low ratio if we see the trend of last five year we can see that it
was consistent for two year than it increased and now for last two year the trend
is consistent but low, compare to previous years.
Dividend Yield - It has increased to0.97% in 2019 which means the company
will pay its investors large dividend but at the same time if the ratio increases
the risk for the investors will also increases.
Book Value per Share - It is used as a valuation technique to value
fundamental price of the share. It is increased to 614 in 2019 from 561 in 2018.
So higher book value means the shares have more liquidation value.