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8/9/2019 assigment # 2a
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Shaheed Zulfikar Ali Bhutto Institute of
Sciences & Technology
Introduction to Business Finance
Assignment # 3
Submitted to
Syed Farhan Sheikh
Submitted by
Salma Omer
0926115
MBA D 2 A
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D.G.Khan Cement Company Limited
Financial Statement Analysis
Sr.No.
Ratios Formulas Computationfor
Year 2009
Computationfor
Year 2008
Results ofYear 2009
Results ofYear 2008
1. Current Ratio Total Current
Asset/Total
CurrentLiabilities
13287592000
/
15834799000
19202591000
/
12054718000
0.8391 x 1.59295 x
2. Quick Ratio Cash +
Govt.Security
Receivables /
Total CurrentLiability
(243842000 +
908100000 ) /
15834799000
( 226372000
+ 782358000)
/
12054718000
0.07274 x 0.083679 x
3. Net Worth Total Assets
Total Liabilities
42723041000
-
21531599000
51992934000
-
21912677000
Rs.
21191442000
Rs.
30080257000
3. Leverage
Ratio
Total Liabilities
/ Net Worth
21531599000
/21191442000
21912677000
/30080257000
1.01605 x 0.72847 x
4. Gross Margin
Ratio
Gross Profit /
Net Sales
5679730000 /
18038209000
1915273000 /
12445996000
0.31487 x 0.15388 x
5. Net Profit
Margin Ratio
Net Profit / Net
Sales
525581000 /
18038209000
(53230000) /
12445996000
0.029137 x ( 0.004276 ) x
6. Inventory
Turn OverRatio
Cost of Good
Sold /Inventory
12358479000
/ 899836000
10530723000
/ 445856000
13.73414 x 23.6191 x
7. AccountsReceivable
Turn Over
Ratio
Net CreditSales / 365
Days
908100000 /365
782358000 /365
2487945.2054x
2143446.5753x
8. Return On
Investment(ROI)
Net Profit / Net
Worth
525581000 /
21191442000
(53230000) /
30080257000
0.02480 x (0.001769) x
9.
Return on
Assets (ROA)
Net Profit /
Total Asset
525581000 /
42723041000
(53230000) /
51992934000
0.01230 x (0.001023) x
Kohat Cement Company Limited
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Financial Statement Analysis
Sr.
No.
Ratios Formulas Computation
for
Year 2009
Computation
for
Year 2008
Results of
Year 2009
Results of
Year 2008
1. Current Ratio Total Current
Asset/TotalCurrent
Liabilities
1645675393 /
2946392234
1332629006 /
2016497901
0.5585 x 0.6608 x
2. Quick Ratio Cash +
Govt.SecurityReceivables /
Total Current
Liability
( 34371413 +
612373810 ) /2946392234
( 36994967 +
406020470 ) /2016497901
0.2195 x 0.2196 x
3. Net Worth Total Assets
Total Liabilities
8624894242 -
6353347077
7623920500 -
5294791353
Rs.
2271547165
Rs.
2329129147
4. Leverage
Ratio
Total Liabilities
/ Net Worth
6353347077 /
2271547165
5294791353 /
2329129147
2.7969 x 2.2732 x
5. Gross Margin
Ratio
Gross Profit /
Net Sales
804559290 /
3395580759
87401851 /
1371791931
0.2369 x 0.0637 x
6. Net Profit
Margin Ratio
Net Profit / Net
Sales
27092698 /
3395580759
(222439366) /
1371791931
0.00797 x (0.16215) x
7. Inventory
Turn Over
Ratio
Cost of Good
Sold /
Inventory
2591021469 /
139293693
1284390080 /
174317806
18.6011 x 7.3680 x
8. Accounts
ReceivableTurn Over
Ratio
Net Credit
Sales / 365Days
612373810 /
365
406020470 /
365
1677736.4657
x
1112384.8493
x
9. Return On
Investment(ROI)
Net Profit / Net
Worth
27092698 /
2271547165
(222439366) /
2329129147
0.0119 x 0.0955 x
10.Return onAssets (ROA)
Net Profit /Total Asset
27092698 /8624894242
(222439366) /7623920500
0.00314 x 0.02917 x
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D.G. Khan Cement Company Limited
Comparison of Ratios for the Year 2008 & 2009
Financial Statement Analysis
1. Current Ratio
Current ratio = Total Current Assets Total Current Liabilities
Interpretation Current Ratio:
Current ratio of DGKhan Cement in 2009 is less than that in 2008. This means that
either total current assets have decreases in 2009 or the total current liabilities haveincreased from 2008 to 2009. decreased current ratio is not a good sign for any
company as current assets cant meet currents liabilities.
2. Quick Ratio
Quick Ratio = (Cash + Govt. Securities + Receivables) Total Current Liabilities
1. Current Ratio
0.8391
1.59295
00.2
0.4
0.6
0.8
11.2
1.41.6
1.8
1
2009
2008
Year
DGKC
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Interpretation Quick Ratio:
Quick ratio of D.G.Khan Cement in 2009 is less than that in 2008. This means thateither total liquid assets have decreases in 2009 or the total current liabilities have
increased from 2008 to 2009. Decreased current ratio is not a good sign for any
company as their liquid assets cant meet currents liabilities.
3. Net Worth
Net Worth = Total Assets Total Liabilities
Interpretation Net Worth :
Net Worth of D.G.Khan Cement in 2009 is less than that in 2008. After going thoughthe values we find that total Liabilities have decreased in 2009 but assets also have
decreased considerably. Decreased net worth is not a good sign for any company.
2. Quick Ratio
2009, 0.07274
2008, 0.083679
0.066
0.068
0.07
0.072
0.074
0.076
0.078
0.080.082
0.084
0.086
1
2009
2008
Year
DGKC
3. Net Worth
2009,
21191442000
2008,
30080257000
0
5000000000
10000000000
15000000000
20000000000
25000000000
30000000000
35000000000
1 2
2009
2008
Year
Rs.
DGKC
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4. Leverage Ratio
Leverage Ratio = Total Liabilities Net Worth
Interpretation Leverage Ratio:
Leverage ratio of D.G.Khan Cement in 2009 is more than that in 2008. having a
smaller value of leverage ratio is good for any company. So an increased leverage
ratio in 2009 is not a good sign for DQ Khan Cement Company. This shows the
extent that debt is used in a company's capital structure
5. Gross Margin Ratio
Gross Margin Ratio = Gross Profit / Net sales
Interpretation Gross Margin Ratio:
Gross Margin ratio of D.G.Khan Cement in 2009 is more than that in 2008. In this
case Gross profit has increased considerably in one year. This is a good sign for
4. Leverage Ratio
2009, 1.01605
2008, 0.72847
0
0.2
0.4
0.6
0.8
1
1.2
1 2
2009
2008
Year
DGKC
5. Gross Margin Ratio
2009, 0.31487 2008, 0.15388
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
1
2009
2008
Year
x
DGKC
Year
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D.G.Khan Cement Company. Having more gross margin ratio means it was more
profitable.
6. Net Profit Margin Ratio
Net Profit Margin Ratio = Net Profit / Net Sales
Interpretation of Net Profit Margin Ratio:
Net Profit Margin ratio of D.G.Khan Cement in 2009 is more than that in 2008. In
this case net profit has increased considerably in one year. This is a good sign for
D.G.Khan Cement Company. Having more net profit margin ratio means it was moreprofitable.
7. Inventory Turnover Ratio
Inventory Turnover Ratio = Cost of Goods Sold / Inventory
6. Net Profit Margin Ratio
2009, 0.029137
2008, -0.004276-0.01
-0.005
00.005
0.01
0.015
0.02
0.025
0.03
0.035
1
2009
2008
Year
x
DGKC
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Interpretation of Inventory Turnover Ratio:
Inventory Turnover ratio of D.G.Khan Cement in 2009 is less than that in 2008. In
this case net profit has increased considerably in one year. A higher value of
inventory ratio means that the company is efficiently managing and selling itsinventory. If a company has a low inventory turnover ratio, then there is a risk they
are holding old inventory which will be difficult to sell. This is not a good sign for
D.G.Khan Cement Company.
8. Accounts Receivable Turnover Ratio
Accounts Receivable Turnover Ratio = Net Credit Sales / 365 (days)
Interpretation of Accounts Receivable Turnover Ratio:
If accounts Receivable Turnover Ratio is high then this means customers are paying theirbills in time and this is a good sign for any org. so in 2009 Accounts Receivable TurnoverRatio has increased.
9. ROI (Return on Investment)
ROI = Net Profit / Net Worth
Year
Rs.
DGKC
DGKC
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Interpretation of ROI:
ROI has increased in 2009 this means the company is utilizing its equity investmentefficiently.
10. ROA (Return on Assets)
ROA = Net Profit / Total Assets
Interpretation of ROA:
The higher the return on assets ratio, the more efficiently the company is using its assetbase to generate sales. Since DG Khan Cement has a higher ROA in 2009 it is a good
sign.
Kohat Cement Company Limited
Financial Statement Analysis
COMPARISON OF RATIOS FOR THE YEAR 2008 & 2009
1. Current Ratio
Current ratio = Total Current Assets Total Current Liabilities
Kohat Cement
DGKC
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Interpretation Current Ratio:
Current ratio of Kohat Cement in 2009 is less than that in 2008. This means that
either total current assets have decreases in 2009 or the total current liabilities have
increased from 2008 to 2009. decreased current ratio is not a good sign for any
company as current assets cant meet currents liabilities.
2. Quick Ratio
Quick Ratio = (Cash + Govt. Securities + Receivables) Total Current Liabilities
Interpretation Quick Ratio:
Quick ratio of Kohat Cement in 2009 is less than that in 2008. This means that either
total liquid assets have decreases in 2009 or the total current liabilities have increased
from 2008 to 2009. Decreased current ratio is not a good sign for any company as
their liquid assets cant meet currents liabilities.
1. Current Ratio
0.5585
0.6608
0.5
0.52
0.54
0.56
0.58
0.6
0.620.64
0.66
0.68
1
2009
2008
Year
Kohat Cement
2. Quick Ratio
0.2195
0.2196
0.21944
0.21946
0.21948
0.2195
0.21952
0.21954
0.21956
0.21958
0.2196
0.21962
1
2009
2008
Year
Kohat Cement
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3. Net Worth
Net Worth = Total Assets Total Liabilities
Interpretation Net Worth :
Net Worth of Kohat Cement in 2009 is less than that in 2008. After going though thevalues we find that total Liabilities have decreased in 2009 but assets also have
decreased considerably. Decreased net worth is not a good sign for any company.
4. Leverage Ratio
Leverage Ratio = Total Liabilities Net Worth
Interpretation Leverage Ratio:
Leverage ratio of Kohat Cement in 2009 is more than that in 2008. Having a smaller
value of leverage ratio is good for any company. So an increased leverage ratio in
3. Net Worth
2271547165
2329129147
2240000000
2250000000
2260000000
2270000000
2280000000
2290000000
2300000000
2310000000
2320000000
2330000000
2340000000
1
2009
2008
Year
Kohat Cement
4. Leverage Ratio
2.7969
2.2732
0
0.5
1
1.5
2
2.5
3
1
2009
2008
Year
Kohat Cement
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2009 is not a good sign for Kohat Cement Company. This shows the extent that debt
is used in a company's capital structure
5. Gross Margin Ratio
Gross Margin Ratio = Gross Profit / Net sales
Interpretation Gross Margin Ratio:
Gross Margin ratio of Kohat Cement in 2009 is more than that in 2008. In this caseGross profit has increased considerably in one year. This is a good sign for Kohat
Cement Company. Having more gross margin ratio means it was more profitable.
6. Net Profit Margin Ratio
Net Profit Margin Ratio = Net Profit / Net Sales
Interpretation of Net Profit Margin Ratio:
5. Gross Margin Ratio0.2369
0.0637
0
0.05
0.1
0.15
0.2
0.25
1
2009
2008
Year
Kohat Cement
6. Net Profit Margin Ratio0.00797
-0.16215-0.18
-0.16
-0.14
-0.12
-0.1
-0.08
-0.06
-0.04
-0.02
00.02
1
2009
2008
Year
Kohat Cement
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Net Profit Margin ratio of Kohat Cement in 2009 is more than that in 2008. In this
case net profit has increased considerably in one year. This is a good sign for Kohat
Cement Company. Having more net profit margin ratio means it was more profitable.
7. Inventory Turnover Ratio
Inventory Turnover Ratio = Cost of Goods Sold / Inventory
Interpretation of Inventory Turnover Ratio:
Inventory Turnover ratio of Kohat Cement in 2009 is more than that in 2008. A
higher value of inventory ratio means that the company is efficiently managing andselling its inventory. If a company has a low inventory turnover ratio, then there is a
risk they are holding old inventory which will be difficult to sell. This is a good sign
for Kohat Cement Company.
8. Accounts Receivable Turnover Ratio
Accounts Receivable Turnover Ratio = Net Credit Sales / 365 (days)
7. Inventory Turnover Ratio
18.6011
7.368
0
2
4
68
10
12
14
16
18
20
1
2009
2008
Year
Kohat Cement
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Interpretation of Accounts Receivable Turnover Ratio:
If accounts Receivable Turnover Ratio is high then this means customers are paying their
bills in time and this is a good sign for any org. so in 2009 Accounts Receivable Turnover
Ratio has increased.
9. ROI (Return on Investment)
ROI = Net Profit / Net Worth
Interpretation of ROI:
ROI has decreased in 2009 this means the company is not utilizing its equity investment
efficiently.
10. ROA (Return on Assets)
8. Accounts Receivable TurnoverRatio
1677736.466
1112384.849
0200000
400000
600000
800000
1000000
12000001400000
1600000
1800000
1
2009
2008
Year
Kohat Cement
9. ROI (Return on Investment)
0.0119
0.0955
0
0.02
0.04
0.06
0.08
0.1
0.12
1
2009
2008
Year
Kohat Cement
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ROA = Net Profit / Total Assets
Interpretation of ROA:
The higher the return on assets ratio, the more efficiently the company is using its asset
base to generate sales. Since Kohat Cement has a lower ROA in 2009 it is not a good
sign.
Kohat Cement Company Limited
&D.G. Khan Cement Company Limited
Comparison of Ratios for the Year 2008
1. Current Ratio
Current ratio = Total Current Assets Total Current Liabilities
10. ROA
0.00314
0.02917
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
1
2009
2008
Year
Kohat Cement
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Interpretation Current Ratio:
Current ratio of DG Khan Cement is more than that of Kohat Cement in 2008. Lower
current ratio is not a good sign for Kohat Cement as D.G. Khan Cement has highercurrent ratio. This means D.G. Khan Cements current assets can meet currents
liabilities efficiently than Kohat cement can.
2. Quick Ratio
Quick Ratio = (Cash + Govt. Securities + Receivables) Total Current Liabilities
Interpretation Quick Ratio:
Quick ratio of DGKC is less than that of Kohat Cement in 2008. Lower Quick ratio isnot a good sign for D.G. Khan Cement. This means Kohat Cements liquid assets can
meet currents liabilities efficiently than D.G. Khan Cement can.
1. Current Ratio
0.6608
1.59295
00.2
0.4
0.6
0.8
11.2
1.4
1.6
1.8
1
Kohat Cement
Company Limited
D.G.Khan Cement
Company Limited
Year 2008
2. Quick Ratio0.2196
0.083679
0
0.05
0.1
0.15
0.2
0.25
1
Kohat CementCompany Limited
D.G.Khan CementCompany Limited
Year 2008
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3. Net Worth
Net Worth = Total Assets Total Liabilities
Interpretation Net Worth :
Net Worth of D.G.Khan Cement is greater than that of Kohat Cement in 2008.
Decreased net worth is not a good sign for any company. So D.G. Khan Cement is
more reliable in terms of net worth than Kohat cement.
4. Leverage Ratio
Leverage Ratio = Total Liabilities Net Worth
Interpretation Leverage Ratio:
Leverage ratio of D.G.Khan Cement is less than that of kohat cement in 2008. Having
a smaller value of leverage ratio is good for any company. So an increased leverage
3. Net Worth
2329129147
30080257000
0
5000000000
10000000000
15000000000
20000000000
25000000000
30000000000
35000000000
1
Kohat CementCompany Limited
D.G.Khan CementCompany Limited
Year 2008
Rs.
4. Leverage Ratio
2.2732
0.72847
0
0.5
1
1.5
2
2.5
1
Kohat CementCompany Limited
D.G.Khan CementCompany Limited
Year 2008
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ratio is not a good sign for Kohat cement Company. So D.G. Khan Cement is more
reliable in terms of Leverage Ratio than Kohat cement.
5. Gross Margin Ratio
Gross Margin Ratio = Gross Profit / Net sales
Interpretation Gross Margin Ratio:
Gross Margin ratio of D.G.Khan Cement is more than that of Kohat cement in 2008.
This is a good sign for D.G.Khan Cement Company. Having more gross margin ratiomeans it was more profitable. So D.G. Khan Cement is more reliable in terms of
Gross Margin Ratio than Kohat cement.
6. Net Profit Margin Ratio
Net Profit Margin Ratio = Net Profit / Net Sales
5. Gross Margin Ratio
0.0637
0.15388
00.02
0.04
0.06
0.080.1
0.12
0.14
0.16
0.18
1
Kohat CementCompany Limited
D.G.Khan CementCompany Limited
Year 2008
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Interpretation of Net Profit Margin Ratio:
Net Profit Margin ratio of D.G.Khan Cement in 2009 is more than that of Kohat
Cement in 2008. This is a good sign for D.G.Khan Cement Company. Having morenet profit margin ratio means it was more profitable. So D.G. Khan Cement is more
reliable in terms of Net Profit Margin Ratio than Kohat cement.
7. Inventory Turnover Ratio
Inventory Turnover Ratio = Cost of Goods Sold / Inventory
Interpretation of Inventory Turnover Ratio:
Inventory Turnover ratio of D.G.Khan Cement is more than that of Kohat cement in
2008. A higher value of inventory ratio means that the company is efficiently
6. Net Profit Margin Ratio
-0.16215
-0.004276
-0.18
-0.16
-0.14
-0.12
-0.1
-0.08
-0.06
-0.04
-0.02
0
1
Kohat Cement
Company Limited
D.G.Khan CementCompany Limited
Year 2008
7. Inventory Turnover Ratio
7.368
23.6191
0
510
15
20
25
1
Kohat Cement
Company Limited
D.G.Khan Cement
Company Limited
Year 2008
8/9/2019 assigment # 2a
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managing and selling its inventory. If a company has a low inventory turnover ratio,
then there is a risk they are holding old inventory which will be difficult to sell. So
D.G. Khan Cement is more reliable in terms of Inventory Turnover Ratio than Kohatcement.
8. Accounts Receivable Turnover Ratio
Accounts Receivable Turnover Ratio = Net Credit Sales / 365 (days)
Interpretation of Accounts Receivable Turnover Ratio:If accounts Receivable Turnover Ratio is high then this means customers are paying
their bills in time and this is a good sign for any org. So D.G. Khan Cement is more
reliable in terms of Accounts Receivable Turnover Ratio than Kohat cement.
9. ROI (Return on Investment)
ROI = Net Profit / Net Worth
8. Accounts Receivable TurnoverRatio
1112384.849
2143446.575
0
500000
1000000
1500000
2000000
2500000
1
Kohat Cement
Company Limited
D.G.Khan Cement
Company Limited
Year 2008
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Interpretation of ROI:
ROI has increased this means the company is utilizing its equity investment
efficiently. So D.G. Khan Cement is more reliable in terms of ROI than Kohatcement.
10. ROA (Return on Assets)
ROA = Net Profit / Total Assets
Interpretation of ROA:
The higher the return on assets ratio, the more efficiently the company is using its
asset base to generate sales. So D.G. Khan Cement is more reliable in terms of ROA
than Kohat cement.
9. ROI
0.0955
-0.001769-0.02
0
0.02
0.04
0.06
0.08
0.1
0.12
1
Kohat Cement
Company Limited
D.G.Khan Cement
Company Limited
Year 2008
10. ROA
0.02917
-0.001023-0.005
00.005
0.01
0.015
0.02
0.025
0.03
0.035
1
Kohat Cement
Company Limited
D.G.Khan Cement
Company Limited
Year 2008
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Kohat Cement Company Limited
&
D.G.Khan Cement Company Limited
Financial Statement Analysis
COMPARISON OF RATIOS FOR THE YEAR 2009
1. Current Ratio
Current ratio = Total Current Assets Total Current Liabilities
Interpretation Current Ratio:
Current ratio of DG Khan Cement is more than that of Kohat Cement in 2009. Lower
current ratio is not a good sign for Kohat Cement as D.G. Khan Cement has higher
current ratio. This means D.G. Khan Cements current assets can meet currentsliabilities efficiently than Kohat cement can.
2. Quick Ratio
Quick Ratio = (Cash + Govt. Securities + Receivables) Total Current Liabilities
1. Current Ratio
0.5585
0.8391
00.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
Kohat CementCompany Limited
D.G.Khan CementCompany Limited
Year 2009
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Interpretation Quick Ratio:
Quick ratio of DG Khan Cement is less than that of Kohat Cement in 2009. This
means D.G. Khan Cements liquid assets can meet currents liabilities less efficientlythan Kohat cement can.
3. Net Worth
Net Worth = Total Assets Total Liabilities
Interpretation Net Worth :
2. Quick Ratio
0.2195
0.07274
0
0.05
0.1
0.15
0.2
0.25
1
Kohat CementCompany Limited
D.G.Khan CementCompany Limited
Year 2009
3. Net Worth
2271547165
21191442000
0
5000000000
10000000000
15000000000
20000000000
25000000000
1
Kohat CementCompany Limited
D.G.Khan CementCompany Limited
Year 2009
Rs.
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Net Worth of D.G.Khan Cement is greater than that of Kohat Cement in 2009.
Decreased net worth is not a good sign for any company. So D.G. Khan Cement ismore reliable in terms of net worth than Kohat cement.
4. Leverage Ratio
Leverage Ratio = Total Liabilities Net Worth
Interpretation Leverage Ratio:
Leverage ratio of D.G.Khan Cement is less than that of kohat cement in 2009. Having
a smaller value of leverage ratio is good for any company. So an increased leverage
ratio is not a good sign for Kohat cement Company. So D.G. Khan Cement is morereliable in terms of Leverage Ratio than Kohat cement.
5. Gross Margin Ratio
Gross Margin Ratio = Gross Profit / Net sales
4. Leverage Ratio
2.7969
1.01605
0
0.5
1
1.5
2
2.5
3
1
Kohat Cement
Company Limited
D.G.Khan Cement
Company Limited
Year 2009
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Interpretation Gross Margin Ratio:
Gross Margin ratio of D.G.Khan Cement is more than that of Kohat cement in 2009.
This is a good sign for D.G.Khan Cement Company. Having more gross margin ratio
means it was more profitable. So D.G. Khan Cement is more reliable in terms of
Gross Margin Ratio than Kohat cement.
6. Net Profit Margin Ratio
Net Profit Margin Ratio = Net Profit / Net Sales
Interpretation of Net Profit Margin Ratio:
Net Profit Margin ratio of D.G.Khan Cement is more than that of Kohat Cement in
2009. This is a good sign for D.G.Khan Cement Company. Having more net profit
5. Gross Margin Ratio
0.2369
0.31487
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
1
Kohat CementCompany Limited
D.G.Khan CementCompany Limited
Year 2009
6. Net Profit Margin Ratio
0.00797
0.029137
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
1
Kohat Cement
Company Limited
D.G.Khan Cement
Company Limited
Year 2009
8/9/2019 assigment # 2a
26/28
margin ratio means it was more profitable. So D.G. Khan Cement is more reliable in
terms of Net Profit Margin Ratio than Kohat cement.
7. Inventory Turnover Ratio
Inventory Turnover Ratio = Cost of Goods Sold / Inventory
Inventory Turnover ratio of D.G.Khan Cement is less than that of Kohat cement in2008. A higher value of inventory ratio means that the company is efficiently
managing and selling its inventory. If a company has a low inventory turnover ratio,
then there is a risk they are holding old inventory which will be difficult to sell. SoKohat Cement is more reliable in terms of Inventory Turnover Ratio than D.G. Khan
cement.
8. Accounts Receivable Turnover Ratio
Accounts Receivable Turnover Ratio = Net Credit Sales / 365 (days)
7. Inventory Turnover Ratio
18.6011
13.73414
0
2
4
68
10
12
14
16
18
20
1
Kohat CementCompany Limited
D.G.Khan Cement
Company Limited
Year 2009
8/9/2019 assigment # 2a
27/28
Interpretation of Accounts Receivable Turnover Ratio:
If accounts Receivable Turnover Ratio is high then this means customers are paying
their bills in time and this is a good sign for any org. So D.G. Khan Cement is morereliable in terms of Accounts Receivable Turnover Ratio than Kohat cement.
9. ROI (Return on Investment)
ROI = Net Profit / Net Worth
Interpretation of ROI:
ROI has increased this means the company is utilizing its equity investmentefficiently. So D.G. Khan Cement is more reliable in terms of ROI than Kohat
cement.
8. Accounts Receivable TurnoverRatio
1677736.466
2487945.205
0
500000
1000000
1500000
2000000
2500000
3000000
1
Kohat CementCompany Limited
D.G.Khan CementCompany Limited
Year 2009
9. ROI
0.0119
0.0248
0
0.005
0.01
0.015
0.02
0.025
0.03
1
Kohat Cement
Company Limited
D.G.Khan Cement
Company Limited
Year 2009
8/9/2019 assigment # 2a
28/28
10. ROA (Return on Assets)
ROA = Net Profit / Total Assets
Interpretation of ROA:
The higher the return on assets ratio, the more efficiently the company is using its assetbase to generate sales. So D.G. Khan Cement is more reliable in terms of ROA than
Kohat cement
10. ROA
0.00314
0.0123
0
0.002
0.004
0.006
0.008
0.01
0.012
0.014
1
Kohat Cement
Company Limited
D.G.Khan Cement
Company Limited
Year 2009