Financial Management Report DG.khan Cement Final

Financial Analysis of D.G Khan Cement Company Ltd.

DEDICATIONS

Dedication is a devotion to whom we

love ,who are benefactors , who prays

for us and who made us capable of

doing all these under this head , there

are two Personalities which are our

Parents , our Teachers. So we have

devoted our report to our beloved

PARENTS AND beloved TEACHERS.

National University Of Modern Languages Page 0


Sr. No List of Content Page No.

1 Preface 2

2 Acknowledgement 3

3 Introduction of DG Cement Factory 4-5

4 Balance Sheet 6-7

5 Income Statement 8-9

6 Cash Flow Statement 9-11

7 Horizontal Analysis of Balance Sheet 11-18

8 Vertical Analysis of Balance Sheet 18-26

9 Horizontal Analysis of Income Statement 27-34

10 Vertical Analysis of Income Statement 35-42

11 Horizontal Analysis of Cash Flow Statement 42-47

12 Vertical Analysis of Cash Flow Statement 47-53

13 Ratio’s Analysis 53-73

14 Univariate Model 74-75

15 Multivariate Model 76-77

16 Conclusion 78



Preface

As the world is growing rapidly, the businesses are also moving to

become the huge one. And by that result, more and more people want to

become a master in these businesses. The main purpose in the finance

field is to know how the financial analysis is done. We all know that

finance is the blood of any business and without it no business can run.

Financial analysis of a company is very difficult and the most important

task and by doing this I am able to know the whole financial position and

financial structure of the company.

Simply by looking at how much cash a company has does not provide

enough information. The financial statements need to be analyzed to

measure a company’s performance and to compare it with other firm’s in

the same industry. The resulting information is intended to be useful to

owners, potential investors, creditors, analysts, and others as the

analysis evaluates the past performance, future potential and financial

position of the firm.

This report is an analysis of financial statements of D.G. Khan Cement

Company Ltd. This report has been prepared with an objective to develop

analytical skills required to interpret the information (explicit as well as

implicit) provided by the financial statements and to measure the

company’s performance during the past few years. The financial

statements are analyzed using traditional evaluation techniques such as

horizontal analysis, vertical analysis and trend analysis. Ratios are an

important tool in analyzing the financial statements & the company’s

profitability, solvency & liquidity. Sincere attempts have been made to

make this report error free but if any errors and omissions are found then

we apologize for that.



Acknowledgement

In the name of “Allah”, the most beneficent and merciful who

gave us Strength and knowledge to complete this report. This

has proved to be a great experience.

I would like to express our gratitude to our Finance teacher

Mr.Nadeem Ahmad who gave us this opportunity to fulfill

this report.



DG KHAN CEMENT FACTORY

INTRODUCTION

DG Khan Cement Company Limited (DGKC) is producer and seller of ordinary Portland and

sulphate-resistant cement. The company is a unit of Nishat group, which is a leading and

diversified business group with a strong presence in three most important sectors of

Pakistan: textiles, cement and financial services.

The group also has considerable stake in insurance, power generation, paper products and

aviation sectors. It is listed on all the three stock exchanges of the country. DGKC was

established in 1978 under the management control of State Cement Corporation of Pakistan

Limited (SCCP).

The company started its commercial production on April 1986 with 2000 tons per day (TPD)

clinker based on dry process technology. In 1992, the company was acquired by the Nishat

Group under the privatization programme of the government. Since its privatization, DGKC

has undergone intensive capacity expansion. As a result, it is presently the second largest

cement producer of the sector. The company had a total installed capacity of 37,156,750

metric tons as at June 2008. DGKC had a market share of 13% in the local cement industry

during the first nine months of 2009.

DGKC has two plants at Dera Ghazi Khan and a new Greenfield cement plant at Khairpur

village, which was started in FY04 and began commercial production in June 2007. The

plant has a capacity of 2.1mtpa. Commencement of production at the new plant and

effective and efficient operations by the management led to 70% and 66% increase in the

volume of clinker and cement production respectively. The company has its own power



generation plant along with WAPDA supply. A dual-fuel power generation plant at Khairpur

cement plant also started its commercial operations successfully in 2008.

BRANDS (PRODUCTS)

Two different products are produced at DGKCC namely Ordinary Portland cement and

Sulphate Resistant Cement. These products are marketed through two different brands:

D.G Brands & Elephant brand ordinary Portland Cement.(It is also called the OPC and its

demands is about 9% because it is commonly used .

D.G brand Sulphate Resistant cement ( it is also called the SRC and its demand is about

8% because it is only used in standing the foundation .Its main works is to finish the pours

produced while standing the foundation and make building more strong.



D.G cement company limited

Balance sheet

2005 2006 2007 2008 2009

Asset Rs. Rs. Rs. Rs. Rs.

Current Asset

Store, spare and loose tools 1,035,081 836,049 1,496,291 2,299,250 2,935,880

Stock -in-trade 100,994 226,286 295,140 445,856 899,836

Trade debts 76,238 74,165 144,245 366,173 513,966

investments 2,769,134 8,543,763 16,933,790 15,082,582 7,785,968

advance, deposits,

prepayment and other

receviables 121,486 152,465 229,315 782,358 908,100

Cash and bank balances 93,836 77,167 116,173 226,372 243,842

Total current asset 4,196,769 9,909,895 19,214,954 19,202,591 13,287,592

Non current assets

Property, plant and equipment 6,637,237 7,521,723 22,117,551 22,977,894 24,345,793

Asset subject to finance lease 317,262 295,058 133,376 5,135 0

Capital work in progress 3,983,175 11,759,677 1,907,063 2,488,307 1,750,208

Investments 2,610,634 4,482,213 8,174,474 6,795,961 3,172,508

Long term loans, advances

and deposits 271,428 335,810 196,913 523,046 166,940

Total non current asset 13,819,736 24,394,481 32,529,377 32,790,343 29,435,449



Total asset 18,016,505 34,304,376 51,744,331 51,992,934 42,723,041

Equity and liabilities

Current liabilities

finance under mark up

arrangement secured 960,620 0 0 0 0

Creditor , accured and other

liabilities 1,154,426 0 0 0 0

Derivative forgeign currency

forward option 306,048 0 0 0 0

Trade and other payables 0 1,406,869 1,027,274 1,370,336 1,435,420

Accured markup 0 340,757 342,612 364,664 531,772

Short term borrowing -

secured 0 2,613,695 3,942,972 7,597,020 9,068,575

Current portion of non- current

liabilities 599,674 1,619,025 2,042,281 2,687,608 4,763,942

Provision for taxation 35,090 35,090 35,090 35,090 35,090

Total Current liabilities 3,055,858 6,015,436 7,390,229 12,054,718 15,834,799

Non Current Liabilities

Long term finances 4,899,225 7,372,468 8,686,447 8,411,051 4,375,837

liabilities against assets

subject to finance lease 131,985 28,886 1,141 0 0

Long term deposits 28,674 33,814 79,467 73,890 73,765

Retirement and other benefits 45,765 26,572 39,862 54,018 78,622

Deferred taxation 537,000 1,559,000 1,624,000 1,319,000 1,441,576

Total non Current liabilities 5,642,649 9,020,740 10,430,917 9,857,959 5,969,800

Capital and Liabilities

Authorised capital 3,000,000 3,000,000 10,000,000 10,000,000 10,000,000

Issued , subscribed and paid

up capital 1,843,937 1,843,937 2,535,412 2,535,412 3,042,494

Reserves 7,196,568 15,085,354 29,630,084 27,595,698 17,401,220

Accumulated Profit / (loss) 277,493 2,330,558 1,757,689 (50,853) 474,728



Share deposit money 8,351

Total Capital and liabilities 9,317,998 19,268,200 33,923,185 30,080,257 20,918,442

Total Equity and

Capital 18,016,505 34,304,376 51,744,331 51,992,934 42,723,041

D.G Cement

Income Statement

2005 2006 2007 2008 2009

sales net 5279560 7,955,665 6419625 12445996 18038209

cost of sales

raw and paking materialcunsumed 374287 464,080 580717 1381169 1527430

salaries,wages,and other benefits 185914 230,854 293929 478790 641408

electricity and gas 322979 470,625 605335 1644759 1427631

furnace oil /coal 1493514 2,114,667 1902567 4595975 6603908

stores and spare consumed 357762 388,113 383159 761950 879772

repair and mentainence 9997 18,233 22913 98482 131911

insurance 23642 20,542 21840 43082 45573

depriciation on property plant and

equipment 330100 341,940 469367 1346428 1354851

other expense 79153 106,783 105402 183637 196081

C.G.S 3177348 4,155,837 4387229 10534272 12808565

opening work in process 210983 50,205 161989 142686 118292

closing workin process (50,205) (161,989) (142,686) (118,292) (387,444)

0 160778 (111,784) 69765 24394 269152

cost ofgoods manufavtured 3338126 4,044,053 4456994 10558666 12539413

opening stock offinishedgoods 38616 19,468 5058 69728 78369

closing stock of finished goods (19,468) (5,058) (69,728) (78,369) (249,916)

0 19148 14,410 25370 8641 171547

LESS:own cunsumption capitalised 26505 65,641 43984 19302 9387

cost of sales 3330769 3,992,822 4387640 10530723 12358479

grossprofit 1948791 3,962,843 2031985 1915273 5679730



administrative expense (76,480) 121,953 (104,169) (111,658) (141,852)

selling and distribution expense (60,905) 34,352 (65,122) (561,465) (1,871,517)

other operating expense (93,786) 191,850 (139,721) (581,913) (795,854)

other operating income 707692 294,114 479420 847344 770137

impairment on inestment (257,386)

profit from operations 2425312 3,908,802 2202393 1507581 3383258

finance cost (304,041) (450,696) (467,759) (1,749,837) (2,606,358)

shares of loss of assoiated co. (9,573) (14,163) (8,674)

profit/loss before tax 2121271 3,448,533 1720471 (250,930) 776900

taxation (439,193)

(1,030,078

) (98,000) 197700 (251,319)

profit /loss for year 1682078 2,418,455 1622471 (53,230) 525319

earning/lossper share 9.12 10.37 6.43 0.21 1.96

DG.Cement.

Cash flow statement.

Years.

2005 2006 2007 2008 2009

Cash flow from operating

activities.

Rs. Rs. Rs. Rs. Rs.

Cash generated from

operations. 2,768,564 4,474,518 997,019 1,263,660 3,829,987

Finance cost paid. (239,581) (250,029) (466,185) (1,727,177) (2,439,250)

Retirement and other benefits

paid. (1,724) (7,573) (43,067) (5,054) (6,934)

Tax paid. (40,809) (31,604) (57,759) (135,780) (235,684)

Net(decrease)/increase in long

term deposits. (1,691) 5,140 45,653 (5,577) (125)

Net cash from operating

activities.2,484,759 4,190,452 475,661 (609,928) 1,147,994



Cash flow from investing

activities.

Purchase of equipment, plant

and property. (3,705,612) (9,005,201) (5,095,269) (2,698,370) (1,995,630)

Purchase of investment. (193,543) (167,039) (320,955) (188,339) (38,878)

Sale proceeds of investment. 13,000 90

Net(increase)/decrease of long

term loan,advances and

deposits. (246,407) (64,382) 138,897 (325,502) 356,106

Sale proceeds of property,plant

and equipment. 4,337 13,030 18,608 26,655 4,076

Dividend received. 157,005 265,882 465,779 820,435 707,242

Interest received. 5,094 3,681 8,333 42,205

Net cash used in investing

activities.(3,984,220) (8,939,616) (4,789,169) (2,356,788) (924,879)

Cash flow from financing

activities.

Proceeds from issuance of

share capital.

1,602,666 1,014,164

Share capital deposit money

received. 8,351

Repayment of non

particepatory redeemable

capital (199,920)

Proceeds from long term loans. 2,900,000 4,000,000 3,332,548 3,000,000 300,000

Repayment of long term loans. (471,429) (556,883) (1,481,302) (3,178,083) (2,989,690)

Repayment of finance lease

liabilities. (68,583) (96,570) (85,932) (19,957) (1,141)



Dividend paid. (250,705) (275,478) (344,743) (379,093) (533)

Net cash from/(used in)

financing activities.1,909,363 3,079,420 3,023,237 (577,133) (1,677,200)

Net increase/(decrease) in

cash and cash equivalent. 409,902 (1,669,744) (1,290,271) (3,543,849) (1,454,085)

Cash and cash equivalent at

the beginning of the year. (1,276,686) (866,784) (2,536,528) (3,826,799) (7,370,648)

Cash and cash equivalent at

the end of the year.

(866,784) (2,536,528) (3,826,799) (7,370,648) (8,824,733)

D.G cement

Balance Sheet

Horizontal Analysis

2005 2006 2007 2008 2009

Current Assets % % % % %

Store, spare and loose tools 100 81 145 222 284

Stock -in-trade 100 224 292 441 891

Trade debts 100 97 189 480 674

investments 100 309 612 545 281



advance, deposits, prepayment and other

receivables 100 126 189 644 747

Cash and bank balances 100 82 124 241 260

Total current asset 100 236 458 458 317

Non current assets

Property, plant and equipment 100 113 333 346 367

Asset subject to finance lease 100 93 42 2 0

Capital work in progress 100 295 48 62 44

Investments 100 172 313 260 122

Long term loans, advances and deposits 100 124 73 193 62

Total non current asset 100 177 235 237 213

Total asset 100 190 287 289 237


Current liabilities

finance under mark up arrangement secured 100 0 0 0 0

Creditor , accrued and other liabilities 100 0 0 0 0

Derivative foreign currency forward option 100 0 0 0 0

Trade and other payables 0

Accrued markup 0

Short term borrowing - secured 0

Current portion of non- current liabilities 100 270 341 448 794

Provision for taxation 100 100 100 100 100



Total Current liabilities 100 197 242 394 518


Long term finances 100 150 177 172 89

liabilities against assets subject to finance

lease 100 22 1 0 0

Long term deposits 100 118 277 258 257

Retirement and other benefits 100 58 87 118 172

Deferred taxation 100 290 302 246 268

Total non Current liabilities 100 160 185 175 106

Capital and Equity

Authorized capital 100 100 333 333 333

Issued , subscribed and paid up capital 100 100 137 137 165

Reserves 100 210 412 383 242

Accumulated Profit / (loss) 100 840 633 -18 171

Share deposit money

Total Capital and Equity 100 207 364 323 224

Total Equity and Liabilities 100 190 287 289 237

D.G cement

Balance Sheet

Horizontal Analysis

Current Assets:

Store, spare and loose tools:



Since the computed value of Stores, Spares and loose tools under Horizontal Analysis

taking year 2005 as a base decrease in 2006. However it shows a continuous increase

over the years till year 2009. So, the overall tendency of Stores, Spares and loose tools in

the last five years is increasing

Stock -in-trade:

Since the computed value of Stock-in-trade under Horizontal Analysis taking year 2005 as a

base has been increased significantly over the years till year 2009. So, the overall tendency

of Stock-in-trade in the last five years is increasing.

Trade debts:

Since the computed value of trade debts under Horizontal Analysis taking year 2005 as a

base shows a decrease in year 2006 but it is significantly increased in year 2007 to 2009.

The overall tendency of trade debts in the last five years is increasing.

Investments:

Since the computed value of Investments under Horizontal Analysis taking year 2005 as a

base is showing a significant increase till year 2009. The overall tendency of Investments in

the last five years is increasing.

Advance, deposits, prepayment and other receivables:

Since the computed value of Advances, deposits, prepayments and other receivables under

Horizontal Analysis taking year 2005 as a base is showing an increasing trend till year 2009,

The overall tendency of Advances, deposits, prepayments and other receivables in the last

five years is increasing.

Cash and bank balances:

Since the computed value of Cash and bank balances under Horizontal Analysis taking year

2005 as a base is decrease in year 2006. However, it is showing a continuous increase over

the years till year 2009 .The overall tendency of Cash and bank balances in the last five

years is increasing.



Total current asset:

Since the computed value of Cash and bank balances under Horizontal Analysis taking year

2005 as a base is showing a continuous increase over the years till year 2009 .The overall

tendency of Cash and bank balances in the last five years is increasing.

Non current assets:

Property, plant and equipment:

Since the computed value of Property, plant and equipment under Horizontal Analysis taking

year 2005 as a base, tends to continuous increase over the years till year 2009.. The overall

tendency of Property, plant and equipment in the last five years is increasing.

Asset subject to finance lease:

Since the computed value of Assets subject to finance lease under Horizontal Analysis

taking year 2005 as a base, has been significantly decreased over the years till 2008.There

is no account in year 2009. The overall tendency of Assets subject to finance lease in the

last five years is decreasing.

Capital work in progress:

Since the computed value of Capital work in process under Horizontal Analysis taking year

2005 as a base is increasing in year 2006. However, it is showing decrease till 2009.The

overall tendency of Capital work in process in the last five years is fluctuating.

Investments:

Since the computed value of Investments under Horizontal Analysis taking year 2005 as a

base is showing continuous increase till year 2009. The overall tendency of Investments in


Long term loans, advances and deposits:



Since the computed value of Long term loans and deposits under Horizontal Analysis taking

year 2005 as a base is increasing in year 2006. However, it decreases in year 2007. Long

term loans and deposits tends to increase in year 2008 . Moreover, Long term loans and

deposits show a decrease in year 2009. The overall tendency of Long term loans and

deposits in the last five years is fluctuating.

Total non current asset:

Since the computed value of Total non current assets under Horizontal Analysis taking year

2005 as a base, is showing a continuous increase in year 2007 to 2009. The overall

tendency of Total non current assets in the last five years is increasing.

Total asset:

Since the computed value of Total assets under Horizontal Analysis taking year 2005 as a

base, is showing a continuous increase in year 2007 to 2009. The overall tendency of Total

assets in the last five years is increasing.

Equity and liabilities:

Current liabilities:

Current portion of non- current liabilities:

Since the computed value of Current portion of non-current liabilities under Horizontal

Analysis taking year 2005 as base is showing significant increase over the years till

2009.The overall tendency of the Current portion of non-current liabilities in the last five


Provision for taxation:



Since the computed value of Provision for taxation under Horizontal Analysis taking year

2005 as base is same over the years till 2009.The overall tendency of the Provision for

taxation in the last five years is same.

Total Current liabilities:

Since the computed value of total current liabilities under Horizontal Analysis taking year

2005 as base is showing significant increase over the years till 2009.The overall tendency of

the total current liabilities in the last five years is increasing.

Non Current Liabilities:

Long term finances:

Since the computed value of long term finances under Horizontal Analysis taking year 2005

as base is showing a continuous increase till year 2008.Moreover, long term finances has

been significantly decreased in year 2009.The overall tendency of the long term finances in

the last five years is fluctuating.

Liabilities against assets subject to finance lease:

Since the computed value of Liabilities against assets subject to finance lease under

Horizontal Analysis taking year 2005 as base is showing an in significant decrease in the

year 2007. Then there is no account for Liabilities against assets subject to finance lease.

The overall tendency of the long term finances in the last five years is decreasing.

Long term deposits:

Since the computed value of long term deposits under Horizontal Analysis taking year 2005

as base is showing an increase in the year 2007 then it decreased in year 2008.Moreover,

long term deposits show a slightly decrease in year 2009.The overall tendency of the long

term deposits in the last five years is fluctuating.

Retirement and other benefits:

Since the computed value of Retirements and other benefits under Horizontal Analysis

taking year 2005 as base is decreasing in 2006 to 2007. However, it is showing an



increasing trend over the years till year 2009.The overall tendency of the Retirements and

other benefits in the last five years is fluctuating.

Deferred taxation:

Since the computed value of Deferred taxation under Horizontal Analysis taking year 2005

as base is showing an increasing trend till year 2009.The overall tendency of the Deferred

taxation in the last five years is increasing.

Total non-current liabilities:

Since the computed value of Total non-current liabilities under Horizontal Analysis taking

year 2005 as base is showing a significant increase over the years till year 2009. The overall

tendency of the Total non-current liabilities in the last five years is increasing.

Capital and Equity:

Authorized capital:

Since the computed value of Authorized capital under Horizontal Analysis taking year 2005

as a base, is same over the years till year 2009.

Issued, subscribed and paid up capital:

Since the computed value Issued, subscribed and paid up capital under Horizontal Analysis

taking year 2005 as a base showing an increase in year 2007 and same in year 2008, but it

tends to increase in year 2009.. The overall tendency of Issued, subscribed and paid up

capital in the last five years is increasing.

Reserves: Since the computed value Reserves under Horizontal Analysis taking year

2005 as a base is showing a significant increase till year 2009. . The overall tendency of

Reserves in the last five years is increasing.

Accumulated Profit / (loss):

100 840 633 -18 171

Total Capital and Equity:



Since the computed value of total capital and equity under Horizontal Analysis taking year

2005 is showing a continuous increase in year 2006 to 2009.The overall tendency of total

capital and Equity in the last five years is increasing.

Total Equity and Liabilities:

Since the computed value of total liabilities and equity under Horizontal Analysis taking year

2005 is showing a continuous increase in year 2006 to 2009.The overall tendency of total

Equity and liabilities in the last five years is increasing.

D.G cement.

Balance Sheet.

Vertical analysis.

Asset 2005 2006 2007 2008 2009

Percent % % % % %

Current Asset

Store, spare and loose tools 5.7 2.4 3 4.4 7

Stock -in-trade 0.6 0.7 0.6 0.9 2.1

Trade debts 0.4 0.2 0.3 0.7 1.2

investments 15.4 25 33 29 18.2

advance, deposits, prepayment and other

receviables

0.7 0.4 0.4 2 2.1

Cash and bank balances 0.5 0.2 0.2 0.4 0.6

Total current asset 23.3 28.9 37.1 37 31

Non current assets

Property, plant and equipment 36.8 22 42.7 44.2 57



Asset subject to finance lease 1.8 0.9 0.3 0.01 0

Capital work in progress 22.1 34.3 3.7 5 4

Investments 14.5 13.1 15.8 13 7.00E+00

Long term loans, advances and deposits 1.5 1 0.4 1 0.4

Total non current asset 76.7 71.1 63 63 69

Total asset 100 100 100 100 100


Current liabilities

finance under mark up arrangement secured 5.3 0 0 0 0

Creditor , accured and other liabilities 6.4 0 0 0 0

Derivative forgeign currency forward option 1.7 0 0 0 0

Trade and other payables 0 4.1 2 3 3.4

Accured markup 0 1 0.7 1 1.2

Short term borrowing - secured 0 8 8 15 21

Current portion of non- current liabilities 3.3 5 4 5 11

Provision for taxation 0.2 0.1 0.1 0.1 0.1

Total Current liabilities 17 18 14.3 23 37


Long term finances 27.2 21.5 16.8 16 10

liabilities against assets subject to finance

lease

0.7 0.1 0.002 0 0

Long term deposits 0.2 0.1 0.2 0.1 0.2

Retirement and other benefits 0.3 0.1 0.1 0.1 0.2



Deferred taxation 3 5 3 3 3.4

Total non Current liabilities 31.3 26.3 20.2 19 14

Capital and Equity

Authorised capital

Issued , subscribed and paid up capital 10.2 5.4 5 5 7.1

Reserves 40 44 57.3 53 40.7

Accumulated Profit / (loss) 1.5 7 3.4 -0.1 1.11

Share deposit money 0.02 0 0 0

Total Capital and Equity 51.7 56.2 65.6 58 49

Total Equity and Liabilities 100 100 100 100 100

D.G cement

Balance Sheet Vertical analysis

Current Assets:

Stores, spares and loose tools:

Since the computed value of Stores, Spares and loose tools under vertical Analysis taking

total assets as base shows a decrease in year 2006 and there is slightly increase in year



2007. However, Stores, Spares and loose tools shows a continuous increase till year 2009.

The overall tendency of Stores, Spares and loose tools in the last five years is fluctuating.

Stock-in-trade:

Since the computed value of stock-in-trade under vertical Analysis taking total assets as

base shows a slightly increase in year 2006 and tend to decrease in year 2007. However,

stock-in-trade shows a continuous increase till year 2009. The overall tendency of stock-in-

trade in the last five years is fluctuating.

Trade debts:

Since the computed value of trade debts under vertical Analysis taking total assets as base

shows a decrease in year 2006 and there is slightly increase in year 2007. However, trade

debts show a continuous increase till year 2009. The overall tendency of trade debts in the

last five years is fluctuating.

Investments:

Since the computed value of Investments under vertical Analysis taking total assets as base

shows a continuous increase in year 2006 to 2009. The overall tendency of Investments in


Advances, deposits, prepayments and other receivables:

Since the computed value of Advances, deposits, prepayments and other receivables under

vertical Analysis taking total assets as base show a decrease in year 2006 to 2007.

However, Advances, deposits, prepayments and other receivables tend to continuous

increase in year 2008 to 2009. The overall tendency of Advances, deposits, prepayments

and other receivables in the last five years is fluctuating.

Cash and bank balances:

Since the computed value of Cash and bank balances under vertical Analysis taking total

assets as base show a decrease in year 2006 to 2007. However, Cash and bank balances

tend to continuous increase in year 2008 to 2009. The overall tendency of Cash and bank

balances in the last five years is fluctuating.

Total current assets:



Since the computed value of Total current assets under vertical Analysis taking total assets

as base has show an continuous increase in year 2006 to 2009. The overall tendency of

Total current assets in the last five years is increasing.

Non Current Assets:

Property, plant and equipment:

Since the computed value of Property, plant and equipment under vertical Analysis taking

total assets as base shows a decrease in year 2006.However, Property, plant and

equipment is showing a significantly increase till year 2009. The overall tendency of

Property, plant and equipment in the last five years is fluctuating.

Assets subject to finance lease:

Since the computed value of Assets subject to finance lease under vertical Analysis taking

total assets as base is showing a continuous decrease over the years till 2008.There is no

account in year 2009 the overall tendency of Assets subject to finance lease in the last five

years is decreasing.

Capital work in progress:

Since the computed value of Capital work in process under vertical Analysis taking total

assets as base is showing an increase in year 2006.However, Capital work in process

tends to a significantly decrease in year 2007 . Moreover, It shows an increase in year 2008

then decrease in year 2009.The overall tendency of Capital work in process in the last five

years is fluctuating.

Investments:

Since the computed value of Investments under vertical Analysis taking total assets as base

is showing a decrease in year 2006.However, Investments tends to increase in year 2007.

Moreover, Investments are decreasing in year 2008 to 2009. The overall tendency of

Investments in the last five years is fluctuating

Long term loans and deposits:



Since the computed value of Long term loans and deposits under vertical Analysis taking

total assets as base tends to decrease in year 2006 to 2009. The overall tendency of Long

term loans and deposits in the last five years is fluctuating.

Total non current assets:

Since the computed value of Total non current assets under vertical Analysis taking total

assets as base tends to decrease in year 2006 to 2008.However, Total non current assets

show an increase in year 2009. The overall tendency of Total non current assets in the last

five years is fluctuating.

Total Assets:

Since the computed value of Total assets under vertical Analysis taking total assets as base

is same over the years till 2009.The overall tendency of Total assets in the last five years is

same.


Current Liabilities:

Trade and other payables:

Since the computed value of trade and other payables under vertical Analysis taking total

liabilities and equity as base is showing increase in year 2006. However, the trade and other

payables volume has decrease in year to year 2007. Moreover, the value of trade and other

payables increase in 2008 to 2009. The overall tendency of the trade and other payables in


Accrued markup:

Since the computed value of accrued markup under vertical Analysis taking total liabilities

and equity as base is increasing in year 2006 to 2009. The overall tendency of accrued

markup in the last five years is increasing.

Short term borrowing – secured: Since the computed value of accrued markup under

vertical Analysis taking total liabilities and equity as base is showing an increasing trend in



year 2006 to year 2009. The overall tendency of accrued markup in the last five years is

increasing.

Current portion of non - current liabilities:

Since the computed value of current portion of non-current liabilities under vertical Analysis

taking total liabilities and equity as base is showing increase in year 2006. However, current

portion of non-current liabilities has decreased in year 2007 and increased 2008 to 2009.

The overall tendency of current portion of non-current liabilities in the last five years is

fluctuating.

Provision for taxation:

Since the computed value of provision for taxation liabilities under vertical Analysis taking

total liabilities and equity as base is show decrease in year 2006 and constant till 2009. The

overall tendency of provision for taxation in the last five years is fluctuating.

Total current liabilities:

Since the computed value of total current liabilities under vertical Analysis taking total

liabilities and equity as base is show an increase in year 2006 and decreased in

2007.However it increased in 2008 to 2009. The overall tendency of total current liabilities in



Long term finances:

Since the computed value of non current liabilities under vertical Analysis taking total

liabilities and equity as base shows a continuous decrease till 2009. The overall tendency of

total current liabilities in the last five years is decreasing

Liabilities against assets subject to finance lease:

Since the computed value of liabilities against assets subject to finance lease under vertical

Analysis taking total liabilities and equity as base is show decrease in year 2006 & year 2007

and there is no account for liabilities against assets subject to finance lease in 2008 to

2009.The overall tendency of liabilities against assets subject to finance lease in the last five

years is fluctuating



Long term deposits: Since the computed value of long term deposits under vertical Analysis

taking total liabilities and equity as base is show decrease in year 2006 & increase in year

2007 and decreased in year 2008 and then tends to increase in year 2009. The overall

tendency of long term deposits in the last five years is fluctuating.

Retirement and other benefits:

Since the computed value of retirement and other benefits under vertical Analysis taking

total liabilities and equity as base is showing decrease in year 2006. However, retirement

and other benefits volume are constant till year 2008 and the slightly increased in 2009. The

overall tendency of retirement and other benefits in the last five years is fluctuating.

Deferred taxation:

Since the computed value of deferred taxation under vertical Analysis taking total liabilities

and equity as base is showing increase in year 2006. However, deferred taxation volume

decreased in year 2007 to 2008 and then tends to increase in 2009. The overall tendency of

deferred taxation in the last five years is fluctuating.

Total non current liabilities:

Since the computed value of total non current liabilities under vertical Analysis taking total

liabilities and equity as base is show a continuous decrease till year 2009. The overall

tendency of total non current liabilities in the last five years is decreasing.

Capital and Equity

Authorized capital:

Issued, subscribed and paid up capital:

Since the computed value Issued, subscribed and paid up capital under vertical Analysis

taking total liabilities and equity as base has been decrease in year 2006 and has decreased



slightly, since year 2007 to 2008. However Issued subscribed and paid up capital show an

increase in year 2009. The overall tendency of Issued, subscribed and paid up capital in the

last five years is fluctuating

Reserves:

Since the computed value Reserves under vertical Analysis taking total liabilities and equity

as base has been increased since 2006 to 2007 and then tends to decrease in year 2008 to

2009. The overall tendency of Reserves in the last five years is fluctuating.

Accumulated Profit / (loss): 1.5 7 3.4 -0.1 1.11

Total Equity:

Since the computed value of total equity under vertical Analysis taking total liabilities and

equity as base shows an increase in year 2006 to 2007 and it decreased in year 2008 to

2009.The overall tendency of of total equity in the last five years is fluctuating.

Total equity and liabilities:

Since the computed value of total liabilities and equity under vertical Analysis taking total

liabilities and equity as base is same over the years till 2009.

D.G Cement

Income Statement Horizontal Analysis

Description2005 2006 2007 2008 2009

% % % % %



Sales Net 100 150.69 121.59 235.74 341.66

Cost Of Sales 0 0.00 0.00 0.00 0.00

Raw and Packing Material consumed 100 123.99 155.15 369.01 408.09

Salaries , Wages, and Other Benefits 100 124.17 158.10 257.53 345.00

Electricity and Gas 100 145.71 187.42 509.25 442.02

Furnace Oil /Coal 100 141.59 127.39 307.73 442.17

Stores and Spare Consumed 100 108.48 107.10 212.98 245.91

Repair and Maintenance 100 182.38 229.20 985.12 1319.51

Insurance 100 86.89 92.38 182.23 192.76

Depreciation On Property Plant and Equipment 100 103.59 142.19 407.88 410.44

Other Expense 100 134.91 133.16 232.00 247.72

Cost of Good Sold 100 130.80 138.08 331.54 403.12

Opening Work In Process 100 23.80 76.78 67.63 56.07

Closing Work in Process 100 322.66 284.21 235.62 771.72

Total 100 -69.53 43.39 15.17 167.41

Cost Of goods Manufactured 100 121.15 133.52 316.31 375.64

Opening Stock Of finished goods 100 50.41 13.10 180.57 202.94

Closing Stock Of Finished Goods 100 25.98 358.17 402.55 1283.73

Total 100 75.26 132.49 45.13 895.90

Less: Own Consumption Capitalized 0 0.00 0.00 72.82 35.42

Cost Of Sales 100 119.88 131.73 316.16 371.04

Gross Profit 100 203.35 104.27 98.28 291.45



Administrative Expense 100 -159.46 136.20 146.00 185.48

Selling and Distribution Expense 100 -56.40 106.92 921.87 3072.85

Other Operating Expense 100 -204.56 148.98 620.47 848.59

Other Operating Income 100 41.56 67.74 119.73 108.82

Impairment On Investment 0 0.00 0.00 0.00 0.00

Profit Operations 100 161.17 90.81 62.16 139.50

Finance Cost 100 148.24 153.85 575.53 857.24

Shares of Loss of Associated Co. 0 0.00 0.00 0.00 0.00

Profit/Loss Before Tax 100 162.57 81.11 -11.83 36.62

Taxation 100 234.54 22.31 -45.01 57.22

Profit /Loss For Year 100 143.78 96.46 -3.16 31.23

Earning/Loss per Share 100 113.71 70.50 2.30 21.49

DG Cement

Horizontal analysis of Income statement As a base year 2005.

Interpretation for Accounts:



Sales:

Since the computed value of sales under Horizontal Analysis taking year 2005 as base is

showing increasing trend till year 2009 .Moreover, the value of sales increase in year 2009 is

quite significant. The overall tendency of the sales in the last five years is increasing.

Cost of Sales:

Raw Materials:

Since the computed value of Raw Material under Horizontal Analysis taking year 2005 as

base is showing increasing (Significantly) trend till year 2009.. Moreover, the value of

increase in Raw Material in year 2009 is quite significant. The overall tendency of the Raw

Material in the last five years is increasing.

Salaries and Wages:

Since the computed value of Salaries and Wages under Horizontal Analysis taking year

2005 as base is showing increasing (Significantly) trend till year 2009.. Moreover, the value

of increase in Salaries and Wages in year 2008 and 2009 is quite significant. The overall

tendency of the Salaries and Wages in the last five years is increasing.

Electricity cost

Since the computed value of electricity under Horizontal Analysis taking year 2005 as base

is showing increasing (Significantly) trend till year 2009. However, the electricity volume has

shown significant increasing in years 2008. The overall tendency of the electricity in the last


Furnace oil cost

Since the computed value of furnace oil under Horizontal Analysis taking year 2005 as base

is showing increasing {Significantly) in year 2006. However, the cost has shown decreasing



trend in years 2007. Moreover, the value of increase in year 2008 and 2009 is quite

significant. The overall tendency of the sales in the last five years is increasing.

Store and spare consume:

Since the computed value of store and spare consume under Horizontal Analysis taking year

2005 as base is showing increasing (Significantly) trend in year 2006 to 2009. Moreover, the

value of increase in sales in year 2008 and 2009 is quite significant. The overall tendency of

the store and spare consume in the last five years is increasing.

Repair and maintenance cost:

Since the computed value of repair and maintenance cost under Horizontal Analysis taking

year 2005 as base is showing increasing (Significantly) trend till year 2009.. Moreover, the

value of increase in year 2009 is quite significant. The overall tendency of the repairing and

maintenance cost in the last five years is increasing.

Furnace Oil /Coal:

Since the computed value of Furnace oil/coal under Horizontal Analysis taking year 2005 as

base is showing increasing trend till year 2009. Moreover, the value of increase in year 2009

is quite significant. The overall tendency of the repairing and maintenance cost in the last


Insurance:

Since the computed value of insurance under Horizontal Analysis taking year 2005 as base

is showing decreasing (Significantly) trend in year 2006 and 2007. However, the sales

volume has shown increasing trend years subsequent to year 2009. Moreover, the value of

increase in insurance in year 2009 is quite significant. The overall tendency of the

insurances in the last two years is increasing.

Depreciation on Property, Plant and Equipment:



Since the computed value of depriciati0n on property, plant and equipment under Horizontal

Analysis taking year 2005 as base is showing increasing (Significantly) trend till 2009 . The

overall tendency of the depreciation on lease asset in the last five years is increasing.

Other expenses:

Since the computed value of other expenses under Horizontal Analysis taking year 2005 as

base is showing increasing (Significantly) trend till year 2009.. Moreover, the value is

increase in year 2009 is quite significant. The overall tendency of the other expenses in the

last five years is increasing.

Opening work in process:

Since the computed value of opening work in process under Horizontal Analysis taking year

2005 as base is showing continuous decrease till 2009. Overall trend of volume is

decreasing.

Closing work in process:

Since the computed value of closing work in process under Horizontal Analysis taking year

2005 as base is showing increasing (Significantly) trend till year 2009. Moreover, the value

of increase in sales in year 2009 is quite significant. The overall tendency of the closing work

in process in the last five years is increasing.

Cost of goods Manufactured:

Since the computed value of cost of goods manufactured charges under Horizontal Analysis

taking year 2005 as base is showing increasing (Significantly) trend till year 2009. Moreover,

the value is increase in year 2009 is quite significant.

Cost of Good Sold:

From the above computation hence it is observed that the value of cost of good sold is

increasing by 130.10%, 130.08%, 331.54%, and 403.12% in year 2006,2007,2008,2009

respectively as compared to the base year 2005.

Opening finished goods:



Since the computed value of opening finished goods under Horizontal Analysis taking year

2005 as base is showing decreasing (Significantly) trend till year 2007. However, the sales

volume has shown increasing trend years subsequent to year 2009. Moreover, the value of

increase in opening finished goods in year 2009is quite significant. The overall tendency of

the opening finished goods in the last two years is increasing.

Closing finished goods:

Since the computed value of closing finished goods under Horizontal Analysis taking year

2005 as base is showing decreasing (Significantly) trend in year 2006. However, the closing

stock of finished goods has shown increasing trend years subsequent to year 2009.

Moreover, the value of increase in year 2009 is quite significant. The overall tendency of the

closing finished goods in the last three years is increasing.

Cost of goods sold:

Since the computed value of CGS under Horizontal Analysis taking year 2005 as base is

showing increasing (Significantly) trend till year 2009. Moreover, the value of increase in

CGS in year 2009 is quite significant. The overall tendency of the CGS in the last five years

is increasing.

Gross profit:

Since the computed value of gross profit under Horizontal Analysis taking year 2005 as base

is showing increasing (Significantly) trend in year 2006, 2007 and 2009. However, the gross

profit volume has shown decreasing trend in year 2008. Moreover, the value of increase in

gross profit in year 2009 is quite significant. The overall tendency of the gross profit is

increasing

Operating expenses:

Administrative expenses:

Since the computed value of administrative expenses under Horizontal Analysis taking year

2005 as base is decreasing in year 2006. However, the administrative expenses volume has

shown increasing trend till year 2009. Moreover, the value of administrative expenses

increase in year 2009 is quite significant. The overall tendency of administrative the in the




Selling and distribution expense:

Since the computed value of selling and distribution expense under Horizontal

Analysis .taking year 2005 as base is showing decreasing (Significantly) trend in year 2006.

However, the volume of selling and distribution has shown increase trend years subsequent

to year 2009. Moreover, the value of increase in selling and distribution in year 2009 is quite

significant. The overall tendency of the selling and distribution in the last five years is

increasing.

Other Operating Expense:

Since the computed value of other operating expenses under Horizontal Analysis taking

year 2005 as a base is showing increasing trend till 2009. The overall tendency of other

operating expenses in last five year is increasing.

Other Operating Income:

Since the computed value of other operating Income under Horizontal Analysis taking year

2005 as base is showing decreasing (Significantly) trend in year 2006 and 2007. However,

the volume of selling and distribution has shown increase trend years subsequent to year

2009. Moreover, the value of other operating income is increase in year 2008 is quite

significant. The overall tendency of the operating income in the last five years is fluctuation.

Impairment on Investment:

Since the computed value of impairment on investment under Horizontal Analysis taking

year 2005 as base is showing decreasing (Significantly) trend in year 2007 and 2008.

However, the volume of impairment on investment has shown increasing trend years 2006

and 2009. The overall tendency of the impairment on investment in the last five years is

fluctuation.

Total finance cost:

Since the computed value of total finance cost under Horizontal Analysis taking year 2005 as

base is showing increasing (Significantly) trend till year 2009. However, the overall tendency

of the total finance cost in the last five years is increasing.

PROFIT BEFOFE TAXATION:



Since the computed value of profit before taxation under Horizontal Analysis taking year

2005 as base is showing increasing (Significantly) in year 2006. However, the volume has

shown decreasing trend in years subsequent to year 2009. The overall tendency of profit

before taxation the in the last three years is decreasing.

TAXATION:

Since the computed value of taxation under Horizontal Analysis taking year 2005 as base

is increase in year 2006 and decreasing trend till 2009. The overall tendency of taxation the

in the last three years is decreasing.

PROFIT FOR THE YEAR:

Since the computed value of profit for the year under Horizontal Analysis taking year 2005

as base is showing increasing (Significantly) in year 2006. However, the volume has shown

decreasing trend in years subsequent to year 2009. The overall tendency of profit for the

year is decreasing.

Earning/Loss per Share:

Since the computed value of earning/loss per share for the year under Horizontal Analysis

taking year 2005 as base is showing increasing (Significantly) in year 2006. However, the

volume has shown decreasing trend in years subsequent to year 2009. The overall tendency

of earning/loss per share for the last three year is decreasing.

D.G Cement



Income Statement Vertical Analysis Taking sales as base

Description2005 2006 2007 2008 2009

% % % % %

Sales Net 100.00 100.00 100.00 100.00 100.00

Cost Of Sales - - - - -

Raw and Packing Material Consumed 7.09 5.83 9.05 11.10 8.47

Salaries, Wages, and Other Benefits 3.52 2.90 4.58 3.85 3.56

Electricity and Gas 6.12 5.92 9.43 13.22 7.91

Furnace Oil /Coal 28.29 26.58 29.64 36.93 36.61

Stores and Spare Consumed 6.78 4.88 5.97 6.12 4.88

Repair and Maintenance 0.19 0.23 0.36 0.79 0.73

Insurance 0.45 0.26 0.34 0.35 0.25

Depreciation On Property Plant and

Equipment6.25 4.30 7.31 10.82 7.51

Other Expense 1.50 1.34 1.64 1.48 1.09

Cost of good sale 60.18 52.24 68.34 84.64 71.01

Opening Work In Process 4.00 0.63 2.52 1.15 0.66

Closing Work-In Process (0.95) (2.04) (2.22) (0.95) (2.15)

0 3.05 (1.41) 1.09 0.20 1.49

Cost Of Goods Manufactured 63.23 50.83 69.43 84.84 69.52

Opening Stock Of Finished Goods 0.73 0.24 0.08 - 0.43

Closing Stock Of Finished Goods (0.37) (0.06) (1.09) (0.63) (1.39)

0 0.36 0.18 0.40 0.07 0.95



LESS: Own Consumption Capitalized 0.50 0.83 0.69 0.16 0.05

Cost Of Sales 63.09 50.19 68.35 84.61 68.51

Gross Profit 36.91 49.81 31.65 15.39 31.49

Administrative Expense (1.45) 1.53 (1.62) (0.90) (0.79)

Selling and Distribution Expense (1.15) 0.43 (1.01) (4.51) (10.38)

Other Operating Expense (1.78) 2.41 (2.18) (4.68) (4.41)

Other Operating Income 13.40 3.70 7.47 6.81 4.27

Impairment On Investment - - - - (1.43)

Profit From Operations 45.94 49.13 34.31 12.11 18.76

Finance Cost (5.76) (5.67) (7.29) (14.06) (14.45)

Shares Of Loss Of Associated Co. - (0.12) (0.22) (0.07) -

Profit/Loss Before Tax 40.18 43.35 26.80 (2.02) 4.31

Taxation (8.32) - (1.53) 1.59 (1.39)

Profit /Loss For Year 31.86 30.40 25.27 100.00 2.91

Earning/Loss Per Share 0.00 0.00 0.00 0.00 0.00

VERTICLE ANALYSIS



SALES:

Since the computed value of sales under vertical Analysis taking net sales as base is

showing similar trend over the years.

Cost of Sales

Raw Materials:

Since the computed value of Raw Material under vertical Analysis taking net sales as base is

showing decrease in 2006 However, there is significant increase in Raw Materials in 2007,

2008 & 2009. The overall tendency of the Raw Material in the last five years is fluctuating.

Salaries and Wages:

Since the computed value of Salaries and Wages under vertical Analysis taking net sales as

base is showing decrease trend in 2006. However, the Salaries and Wages volume has

shown increasing trend in year 2007 & 2008. Moreover, the value of Salaries and Wages

decrease in year 2009. The overall tendency of the Salaries and Wages in the last five years

is fluctuating.

Electricity cost

Since the computed value of electricity under vertical Analysis taking net sales as base is

showing a decrease in year 2006. However, the electricity volume has shown increase in

years 2007 to 2008.While it decrease in 2009.The overall tendency of the electricity in the


Furnace oil cost

Since the computed value of furnace oil under vertical Analysis taking net sales as base is

showing a decrease in year 2006. However, the electricity volume has shown a continuous

increase in years 2007 to 2008, but it shows a slightly decrease in year 2009.The overall

tendency of the sales in the last five years is fluctuating.

Store and spare consume:



Since the computed value of store and spare consume under vertical Analysis taking net

sales as base is showing a decrease in year 2006. However, the store and spare consume

has shown a continuous increase in years 2007 to 2008, but it shows a decrease in year

2009.The overall tendency of the store and spare consume in the last five years is

fluctuating.

Repair and maintenance cost:

Since the computed value of repair and maintenance cost under vertical Analysis taking net

sales as base is showing an increase in year 2006 to 2009. The overall tendency of the

repairing and maintenance cost in the last five years is increasing.

Insurance:

Since the computed value of insurance under vertical Analysis taking net sales as base is

showing decrease in year 2006. However, the Insurance tends to increase in year2007 and

it also shows a slightly increase in year 2008. Moreover, the value of insurance in year 2009

is decreased. The overall tendency of the insurances in the last five years is fluctuating.

Depreciation on leased assets:

Since the computed value of depriciati0n on lease asset under vertical Analysis taking net

sales as base is showing a decrease in year 2006, but the depreciation on lease asset

volume has shown a slightly increase in year 2007. Moreover, the value of Depreciation on

leased assets has shown a continuous increase in years 2008 to 2009. The overall tendency

of the depreciation on lease asset in the last five years is fluctuating.

Other expenses:

Since the computed value of other expenses under vertical Analysis taking net sales as base

is showing a decrease in year 2006. Then the value of other expenses shows an increase in

year 2007. However, it shows a continuous decrease in the years 2008 to 2009. The overall

tendency of the other expenses in the last five years is fluctuating.

Opening work in process:



Since the computed value of opening work in process under vertical Analysis taking net

sales base is showing a decrease in year 2006 to 2009. The overall tendency of Opening

work in process in the last five years is decreasing.

Closing work in process:

Since the computed value of closing work in process under vertical Analysis taking net sales

as base is showing an increase in the years 2006 to 2007. Then the value of closing work in

process tends to decrease in year 2008. However, it shows an increase in year 2009.The

overall tendency of the closing work in process in the last five years is fluctuating.

Cost of goods Manufactured:

Since the computed value of cost of goods manufactured charges under vertical Analysis

taking net sales as base is showing a decrease in year 2006.Then the value of cost of goods

manufactured is showing an increasing trend in year 2007 to 2009. The overall tendency of

the cost of goods manufactured in the last five years is fluctuating.

Opening finished goods:

Since the computed value of opening finished goods under vertical Analysis taking net

Sales as base are showing a decreasing trend in years 2006 to 2009. The overall

Tendency of the opening finished goods in the last five years is decreasing.

Closing finished goods:

Since the computed value of closing finished goods under vertical Analysis taking net sales

as base is showing a decrease in year 2006. However, the closing stock of finished goods

has shown an increase in year 2007, but it tends to decrease in year 2008.Moreover, the

value closing stock of finished goods is increased in year 2009. The overall tendency of the

closing stock of finished goods in the last five years is fluctuating.

Overhead Cost:

Since the computed value of overhead cost under vertical Analysis taking net sales as base

is showing decrease (Significantly) trend in year 2006. However, the overhead cost has

shown increasing trend years subsequent to year 2008. Moreover, the value of over head



cost decrease in year 2009 is quite significant. The overall tendency of the sales in the last

five years is fluctuating

Cost of goods sold:

Since the computed value of cost of goods sold under vertical Analysis taking net sales as

base is showing decrease in year 2006. However, the cost of goods sold volume has shown

increasing trend in year 2007 to year 2009. The overall tendency of the cost of goods sold in


Gross Profit:

Since the computed value of gross profit under vertical Analysis taking net sales as base is

showing increase in year 2006. However, the gross profit has shown decreasing trend in

year 2007 & 2009. The overall tendency of the gross profit in the last five years is fluctuating.

Administrative Expense:

Since the computed value of Administrative Expense under vertical Analysis taking net sales

as base is showing increase in year 2006 & 2007. However, the Administrative Expense has

shown decreasing trend in year 2008 & 2009. The overall tendency of the administrative

expense in the last five years is fluctuating

Selling and distribution expenses:

Since the computed value of Selling and distribution expenses under vertical Analysis taking

net sales as base is showing decrease in year 2006 and 2007. Moreover, the value of

Selling and distribution expenses has significant increase in year 2008 & 2009. The overall

tendency of the Selling and distribution expenses in the last five years is fluctuating.

OTHER OPERATING EXPENSE:

Since the computed value of OTHER OPERATING Expense under vertical Analysis taking

net sales as base is showing increase in year 2006. However, the OTHER OPERATING

EXPENSE has shown slightly decrease trend in year 2007. Moreover, the value of OTHER

OPERATING EXPENSE has increase in year 2008 but a slightly decrease in year 2009. The

overall tendency of the other operating expense in the last five years is fluctuating.



OTHER OPERATING INCOME:

Since the computed value of other operating income under vertical Analysis taking net sales

as base is showing significantly decrease in year 2006. However, the other operating income

has shown increasing trend in year 2007. Moreover, the value of other operating income has

decrease in year 2008 & 2009. The overall tendency of the other operating income in the


Impairment on investment:

Taking net sales as a base year there is no expense on impairment on investment in any

year except in year 2009

Profit from operations:

Since the computed value of profit from operations under vertical Analysis taking net sales

as base is showing decrease in year2006 to 2009. The overall tendency of the profit from

operations in the last five years is decreasing.

Finance Cost:

Since the computed value of finance cost under vertical Analysis taking net sales as base is

showing slightly decrease in year 2006. However, the finance cost has shown continuous

increase till 2009. The overall tendency of the finance cost in the last three years is

increasing.

Share of loss of associated companies:

Since the computed value of share of loss of associated companies under vertical Analysis taking

net sales as base is showing increase in year 2006 & 2007. However, the share of loss of associated

companies has shown decrease in 2008. The overall tendency of the share of loss of associated

companies in the last five years is fluctuating.

Profit/loss before tax:

Since the computed value of profit/ loss before tax under vertical Analysis taking net sales as base

is showing increase in year 2006. However, it has shown decreasing trend in 2007 to 2009. The

overall tendency of profit/ loss before tax in the last five years is fluctuating.



Taxation:

Since the computed value of taxation under vertical Analysis taking net sales as base is

showing negatively decreasing in year 2006 & 2007. However, the taxation has shown

positive increase in 2008 and negatively decreases in 2009. The overall tendency of the

taxation in the last five years is fluctuating.

Profit for the year:

Since the computed value of profit for the year under vertical Analysis taking net sales as

base is show decreasing in year 2006 & 2007. However, the profit for the year has shown

increase in 2008. Moreover it show decrease in 2009. The overall tendency of the profit for

the year in the last five years is fluctuating.

DG cement.

Cash Flow statement.

Horizontal Analysis.

Years.

2005 2006 2007 2008 2009

% % % % %

Cash flow from operating activities.

Cash generated from operations. 100 161.6 36.01 45.64 138.34

Finance cost paid. 100 104.3 194.58 720.9 1018.1

Retirement and other benefits paid. 100 439.2 2498.0 293.1 402.20

Tax paid. 100 77.44 141.53 332.7 577.53

Net(decrease)/increase in long term deposits. 100 -303.9 -2699.7 329.8 7.39

Net cash from operating activities. 100 168.6 19.14 -24.55 46.20

Cash flow from investing activities.

Purchase of equipment, plant and property. 100 243.0 137.50 72.82 53.85

Purchase of investment. 100 86.31 165.83 97.31 20.09

Sale proceeds of investment. 100



Net(increase)/decrease of long term loan,advances and

deposits. 10026.13 -56.37 132.1 -144.52

Sale proceeds of property,plant and equipment. 100 300.4 429.05 614.6 93.98

Dividend received. 100 169.3 296.67 522.5 450.46

Interest received. 100

Net cash used in investing activities. 100 224.3 120.20 59.15 23.21

Cash flow from financing activities.

Proceeds from issuance of share capital. 100

Share capital deposit money received. 100 0

Repayment of non particepatory redeemable capital 100 137.9 0 0 0

Proceeds from long term loans. 100 118.1 114.92 103.4 10.34

Repayment of long term loans. 100 140.8 314.22 674.1 634.18

Repayment of finance lease liabilities. 100 109.8 125.30 29.10 1.66

Dividend paid. 100 137.51 151.2 0.21

Net cash from/(used in) financing activities. 100 161.2 158.34 -30.23 -87.84

Net increase/(decrease) in cash and cash equivalent. 100 -407.3 -314.78 -864.5 -354.74

Cash and cash equivalent at the beginning of the year. 100 67.89 198.68 299.7 577.33

Cash and cash equivalent at the end of the year. 100 292.6 441.49 850.3 1018.1



DG Cement,

Horizontal analysis of cash flow statement:

Cash flow from operating activates

Cash flow from operation:

Since the computed value of cash flow from operation under Horizontal Analysis taking year

2005 as base is showing increasing trend in year 2006. However, the cash flow from

operation volume has shown decreasing trend in years subsequent to year 2007 and 2008.

Moreover, the value of cash flows from operation is increase in year 2009. The overall

tendency of the cash flow from operation in the last five years is flu

Finance cost paid:

Since the computed value of finance cost paid under Horizontal Analysis taking year 2005 as

base is showing increasing trend up till 2009. So, the over all tendency of finance cost paid

is increasing.

Retirement and other benefits paid:

Since the computed value of retirement and other benefits paid under Horizontal Analysis

taking year 2005 as base has shown increasing trend in years subsequent to year 2009.

Moreover, the value of increase in taxes paid in year 2006 is quite significant. The overall

tendency of the taxes paid in the last five years is increasing.

Taxes paid:

Since the computed value of taxes paid under Horizontal Analysis taking year 2005 as base

is showing decreasing trend in year 2006. However, the cash flow from operation volume

has shown increasing trend in years subsequent to year 2009. Moreover, the value of

increase in taxes paid in year 2009 is quite significant. The overall tendency of the taxes

paid in the last five years is increasing.



Net cash from operating activities:

Since the computed value of net cash flow from operating activities under Horizontal

Analysis taking year 2005 as base is showing decreasing trend till year 2007. However, the

net cash flow from operating activities volume has shown increasing trend in years

subsequent to year 2008. Moreover, the value of decrease in net cash flows from operating

activities in year 2009. The overall tendency of the net cash flow from operating activities in


Cash flows from investing activities:

Purchase of property, plant and equipment:

Since the computed value of Purchase of property, plant and equipment under Horizontal

Analysis taking year 2005 as base is showing increasing (Significantly) trend in year 2007.

However, the purchase of property, plant and equipment volume has shown decreasing

trend in years subsequent to year 2009. Moreover, the value of increase in purchase of

property, plant and equipment in year 2006 is quite significant. The overall tendency of the

purchase of property, plant and equipment in the last five years is decreasing.

Purchase of investments:

Since the computed value of purchase of investment under Horizontal Analysis taking year

2005 as base is showing decreasing trend till year 2006. However, the purchase of

investment volume has shown increasing trend in years subsequent to year 2007. Moreover,

the value of decrease in purchase of investment activities to year 2009 is quite significant.

The overall tendency of the purchase of investment in the last five years is fluctuating.

Net (increase)/decrease of long term loan, advances and deposits:

Since the computed value of net long term loan, advances and deposits under Horizontal

Analysis taking year 2005 as base is showing decreasing trend till 2007.. Moreover, the

value of net long term loan, advances and deposits is increase year 2008. It again

decreases in 2009. The overall tendency of the finance cost in the last five years is

fluctuating.



Sale proceeds of property, plant and equipment:

Since the computed value of sale proceeds of property, plant and equipment under

Horizontal Analysis taking year 2005 as base is showing increasing trend till year 2008.

Moreover, the value of sale proceeds of property, plant and equipment is decrease in year

2009. The overall tendency of the finance cost in the last five years is fluctuating.

Dividend received:

Since the computed value of dividend received under Horizontal Analysis taking year 2005

as base is showing increasing trend till year 2009. Moreover, the value of increase in finance

cost in year 2009 is quite significant. The overall tendency of the finance cost in the last five


Precedes from long term loans:

Since the computed value of proceed from long term loans under Horizontal Analysis taking

year 2005 as base is showing increasing trend till year 2008. Moreover, the value of proceed

from long term loans is decrease in year 2009. The overall tendency of the finance cost in


Repayment of long term loans:

Since the computed value of repayment of long term loans under Horizontal Analysis taking

year 2005 as base is showing increasing trend till year 2009. Moreover, the value of

repayment of long term loans increase in year 2008 is quite significant. The overall tendency

of the finance cost in the last five years is increasing.

Repayment of finance lease liabilities:

Since the computed value of repayment of finance lease liabilities under Horizontal Analysis

taking year 2005 as base is showing increasing trend till year 2007. However, the value of

repayment of finance lease liabilities decrease till 2009. The overall tendency of the finance

cost in the last five years is fluctuating.



Dividend paid:

From the above computation hence it can be observed that the value of dividend paid is

increases 137.5094234%, 151.2107856% afterward it decrease 0.212600467% as compared to

the base year 2005.

Net increase/ (decrease) in cash and cash equivalent:

Since the computed value of net cash and cash equivalent under Horizontal Analysis taking

year 2005 as base is showing decreasing trend till year 2009. The overall tendency of the

finance cost in the last five years is decreasing.

Cash and cash equivalent at the beginning of the year:

Since the computed value of cash and cash equivalent under Horizontal Analysis taking year

2005 as base is showing increasing trend till year 2009. Moreover, the value of increase in

finance cost in year 2009 is quite significant. The overall tendency of the finance cost in the


DG. Cement.

Cash flow statement.

Vertical analysis.

Years.

2005 2006 2007 2008 2009

Cash flow from operating activities. % % % % %

Cash generated from operations. -319 -176 -26 -17 -43.4

Finance cost paid. 27.64 9.86 12.18 23.4 27.6

Retirement and other benefits paid. 0.20 0.30 1.13 0.07 0.08

Tax paid. 4.71 1.25 1.51 1.84 2.67

Net(decrease)/increase in long term deposits. 0.20 -0.20 -1.19 0.08 0.00

Net cash from operating activities. -286 -165 -12 8.28 -13.0



Cash flow from investing activities.

Purchase of equipment, plant and property. 427.5 355.0 133.1 36.6 22.6

Purchase of investment. 22.33 6.59 8.39 2.56 0.44

Sale proceeds of investment. 0.00 -0.51 0.00 0.00 0.00

Net(increase)/decrease of long term loan,advances and

deposits.28.43 2.54 -3.63 4.42 -4.04

Sale proceeds of property,plant and equipment. -0.50 -0.51 -0.49 -0.36 -0.05

Dividend received.

-

18.11

-

10.48-12.1 -11.1 -8.01

Interest received. 0.00 -0.20 -0.10 -0.11 -0.48

Net cash used in investing activities. 459 352 125 31 10

Cash flow from financing activities.

Proceeds from issuance of share capital. 0 0 -41.8 0 -11.4

Share capital deposit money received. 0 -0.33 0.00 0 0.00

Repayment of non particepatory redeemable capital 23.06 0.00 0.00 0 0.00

Proceeds from long term loans. -334 -157 -87.0 -40.7 -3.40

Repayment of long term loans. 54.39 21.95 38.7 43.1 33.8

Repayment of finance lease liabilities. 7.91 3.81 2.25 0.27 0.01

Dividend paid. 28.92 10.86 9.01 5.14 0.01

Net cash from/(used in) financing activities. -220 -121 -79.0 7.83 19.0

Net increase/(decrease) in cash and cash equivalent. -47.2 65.83 33.72 48.08 16.48

Cash and cash equivalent at the beginning of the year. 147.2 34.17 66.28 51.92 83.52

Cash and cash equivalent at the end of the year. 100 100 100 100 100



DG. Cement.

Cash flow statement vertical analysis Years 2005 to2009

Cash flow from operating activities

Cash flows from operations:

Since the computed value of Cash flows from operations under vertical Analysis taking Net

cash as base shows a significant decrease in year 2006 and also in 2007, and also it shows

an increasing trend in year 2008 and 2009. The overall tendency of Cash flows from

operations in the last five years shows fluctuating.

Finance cost paid:

Since the computed value of Finance cost paid under vertical Analysis taking Net cash as

base is showing an decrease in year 2006 again increase in 2007 subsequent years till

2009. The overall tendency of Finance cost paid in the last five years is fluctuating.

Retirement and other benefits paid:

Since the computed value of Retirement and other benefits under vertical Analysis taking

Net cash as base are slightly increased in year 2006.It also shows an decreasing trend in

year 2007.Then it tends to increase in 2008.However, it tends to increase in a little bit trend.

The overall tendency of Retirement and other benefits in the last five years is fluctuating.

Taxes paid:

Since the computed value of taxes paid under vertical Analysis taking Net cash as base are

decreased in years 2006,then it shows an increasing trend till 2009. The overall tendency

of taxes paid in the last five years is fluctuating.

Net (decrease)/increase in long term deposits:

Since the computed value of Net (decrease)/increase in long term deposits under vertical

Analysis taking Net cash as base shows a slightly increase in year 2005. It also shows a

decreasing trend in year 2006 to 2007. Then it tends to increased in year 2009. The overall

tendency of Net (decrease)/increase in long term in the last five years are fluctuating



Net cash from operating activities:

Since the computed value of Net cash from operating activities under vertical Analysis taking

Net cash as base, shows a significant decreasing trend in 2005 to 2007. Then it show

increasing in year 2008. However, it shows decrease in year 2009. The overall tendency of

Net cash from operating activities in the last five years is fluctuating.

Cash flows from investing activities

Purchase of property, plant and equipment:

Since the computed value of Purchase of Property, Plant and Equipment under vertical

Analysis taking Net cash as base, shows a increasing trend in 2005 to 2007. Then it shows a

significant decrease trend in year 2008 to 2009. The overall tendency of Purchase of

Property, Plant and Equipment in the last five years is fluctuating.

Purchase of investments:

Since the computed value of Purchase of Investment under vertical Analysis taking Net cash

as base, shows a significant decrease in year 2006 and then tends to increase in

2007.However, it tends to decrease in year 2008 to 2009.The overall tendency of Purchase

of Investment in the last five years is fluctuating.

Sale proceeds of investments:

Since the computed value of Sale proceeds of investments under vertical Analysis taking

Net cash as base, shows a decrease in year 2006 .As there is no account of Sale proceeds

of investments in year 2008 to 2009.The overall tendency of Sale proceeds of investments in

the last five years is decreasing.

Net (increase)/decrease in long term loans and deposits:

Since the computed value of Net (increase)/decrease in long term loans and deposits under

vertical Analysis taking Net cash as base, shows a significant decrease in year 2006 and

then tends to decrease in year 2007 while increase in year 2008.Moreover, it shows a

decrease in year 2009.The overall tendency of Net (increase)/decrease in long term loans

and deposits in the last five years is fluctuating.



Sales proceeds of property, plant and equipment:

Since the computed value of Sales proceeds of property, plant and equipment under vertical

Analysis taking Net cash as base, shows a continuous decrease in year 2006 to 2009.The

overall tendency of Sales proceeds of property, plant and equipment in the last five years is

fluctuating.

Dividend received:

Since the computed value of Dividend received under vertical Analysis taking Net cash as

base, shows a continuous decrease in year 2006 to 2009.The overall tendency of Dividend

received in the last five years is decreasing.

Interest received:

Since the computed value of Interest received under vertical Analysis taking Net cash as

base, as there is no account of Interest received in year 2005 but it sows a decrease in year

2007 to 2009.The overall tendency of Interest received in the last five years is decreasing.

Net cash used in investing activities:

Since the computed value of Net cash used in investing activities under vertical Analysis

taking Net cash as base is showing a significant decrease in subsequent years till

2009.So,the overall tendency of Interest received in the last five years is decreasing.

Cash flows from financing activities

Repayment of non-participatory redeemable capital:

As there is no account of Repayment of non-participatory redeemable capital except year

2005.So there is no interpretation.

Proceeds from issuance of share capital:

Since the computed value of Proceeds from issuance of share capital under vertical

Analysis taking Net cash as base, has no account in years 2005 to 2006, but it has the

account in years2007&2009. It shows a decreasing trend. The overall tendency of Interest

received in the last five years is decreasing.



Share capital deposit money received:

As there is no account of share capital deposit money received, so there is no interpretation

for it.

Proceeds from long term loans:

Since the computed value of Proceeds from long term loans under vertical Analysis taking

Net cash as base is showing a significant decrease over the years till 2009.So, the overall

tendency of Proceeds from long term loans received in the last five years is decreasing;


Since the computed value of Repayment of long term loans under vertical Analysis taking

Net cash as base is showing a decrease in year 2006.It tends to increase in year 2007 and

2008. Then it shows decrease in year 2009.The overall tendency of Repayment of long term

loans received in the last five years is fluctuating

Repayment of finance lease liabilities:

Since the computed value of Repayment of finance lease liabilities under vertical Analysis

taking Net cash as base is showing a continuous decrease over the years till year 2009. The

overall tendency of Repayment of finance lease liabilities received in the last five years is

decreasing.

Dividend paid:

Since the computed value of Dividend paid under vertical Analysis taking Net cash as base

is showing a continuous decrease over the years till year 2009. The overall tendency of

Dividend paid received in the last five years is decreasing.

Net cash from/ (used in) financing activities:

Since the computed value of Net cash from/ (used in) financing activities under vertical

Analysis taking Net cash as base is showing a significant decrease in the years 2006 and

2007. Then it tends to increase in years 2008 and 2009.The overall tendency of Net cash

from/ (used in) financing activities received in the last five years is fluctuating.



Net increase/ (decrease) in cash and cash equivalents:

Since the computed value of Net increase/ (decrease) in cash equivalents under vertical

Analysis taking Net cash as base is showing an increase in the year 2006. Then it

decreased in year 2007.It tends to increase in year 2008. Then it is decreased in year

2009.The overall tendency of Net increase/(decrease) in cash equivalents received in the


Cash and cash equivalents at the beginning of year:

Since the computed value of Cash and cash equivalents at the beginning of the year under

vertical Analysis taking Net cash as base is showing a significant decrease in the year 2006.

Then it is increased in year 2007.it shows a decrease in year 2008. Moreover it tends to

increase in year 2009.The overall tendency of Cash and cash equivalents at the beginning of

the year received in the last five years is fluctuating.

Cash and cash equivalents at the end of year:

Since the computed value of Cash and cash equivalents at the end of the year under vertical

Analysis taking Net cash as base is same over the years till 2009. The overall tendency of

Cash and cash equivalents at the end of the year received in the last five years is constant.


Since the computed value of Proceeds from long term loans under vertical Analysis taking

Net cash as base is showing a significant decrease over the years till 2009.So, the overall

tendency of Interest received in the last five years is decreasing.

1. Current Ratio’s

1. Current Ratio's

Formula. Current Ratio=Current Assets/current liabilities

ItemsYears

2005 2006 2007 2008 2009

Current ratio. 1.373352 1.647411 2.6000485 1.5929523 0.8391387



C urrent ratio.

0

0.5

1

1.5

2

2.5

3

2005 2006 2007 2008 2009

C urrent ratio.

Interpretation:

The current ratio is the ratio of total current assets and total current liabilities. The

current ratio of a firm measures its short-term solvency, i.e. its ability to meet short-

term obligations. As a measure of short term/current financial liquidity, it indicates the

rupees of current assets available for each rupee of current liability / obligation. The

higher the current ratio, the large the amount of rupees available per rupee of current

liability, the more the firm’s ability to meet current obligations and the greater the

safety of funds of short term creditors. The standard for current ratio is 2:1.As shown

above this ratio is more then one for first two years which is satisfactory. This ratio

was 1.3733 in 2005 and increase to 1.647 in 2006 and 2.600 in 2007 but in 2008 it is

decreased by1.592and in 2009 the ratio decreases to 0.839 which shows

Company’s ability to meet short-term obligations has reduced.



Quick ratio:

2. Quick Ratio's

Formula. Quick Ratio= {current assets-(inventory + prepaid expenses)} /current liabilities.

ItemYears

2005 2006 2007 2008 2009

Quick Ratio 0.94 1.47 2.32 1.35 0.58

Quic k R atio

0

0.5

1

1.5

2

2.5

2005 2006 2007 2008 2009

Quic kR atio

Interpretation:

The term current asset refers to the assets which can be converted into cash

immediately. Thus, the quick ratio = current assets–(inventory + prepaid

expense)/current liabilities. This ratio is used to check that how much inventory is

unsold and includes in current assets. Because current assets may include inventory

in large amount which would increase the current assets. from the above

computation it is observed that the value of quick ratio is 0.94 in year 2005 while it

has increased in the next two years by 1.47 and 2.32 in years 2006 and 2007

respectively.whlie it is observed that it has again decreased to 1.35 and 0.58 in year

2008 and 2009 respectively.



Net working Capital:

3. Net working capital.

Formula Net working capital=current assets-current liabilities.

ItemYears

2005 2006 2007 2008 2009

Net working

Capital. 1,140,911 3,894,459 11,824,725 7,147,873 -2,547,207

Net working c apital.

-5000000

0

5000000

10000000

15000000

2005 2006 2007 2008 2009

Net workingc apital.

Interpretation:

Working capital indicates the short run solvency position of the business. As from the

above computation it is observed that the net working capital is 1140911 in year

2005 while it has increased by 3894459, 11824725 in years 2006 and 2007

respectively. while it has decreased by 7147873 in year 2008 and it has shown a

negative trend in year 2009.which shows that the company’s current liabilities has

increased and it reflect that the company is unable to fulfill it financial requirements.



Solvency ratios:

Debt Ratio:

4. Debt Ratios

Formula. Debts ratio= Total liabilities / Total Assets.

ItemsYears.

2005 2006 2007 2008 2009

Debts Ratio. 0.48280768 0.4383166 0.3444077 0.4214549 0.51037095

Debts R atio.

0

0.1

0.2

0.3

0.4

0.5

0.6

2005 2006 2007 2008 2009

Debts R atio.

Interpretation:

Debit ratio is calculated to check the total asset financed by the firm

creditors. It helps to determine how well creditors are protected in case of

insolvency. This ratio shows relation between total assets and total liabilities. From

the above computation hence it is observed that This ratio has shown a decreasing

trend in year 2006 and 2007 when compared to year 2005 while it has shown an

increasing trend in years 2008 and 2009.



Debt equity Ratio:

5. Debt-equity ratios

Formula Debt-equity ratio=Long term debt/total capitalization.

Items.Years.

2005 2006 2007 2008 2009

Debt-equity ratio. 0.37716611 0.3188787 0.2351737 0.24683023 0.2220227

Debt-equity ratio.

0

0.1

0.2

0.3

0.4

2005 2006 2007 2008 2009

Debt-equity ratio.

Interpretation:

The debt equity ratio indicates the relationship between the long-term

funds provided by creditors and those provided by the firm’s owners. The standard

debt equity ratio is 60:40. From the above graph hence it is observed that the value

of debt equity ratio shows a decreasing trend in years 2006,2007,2008,2009.



Time interest earned ratio:

6. Time-interest -earned ratio.

Formula Time-interest -earned ratio=EBIT / Interest

Items.

Years.

2005 2006 2007 2008 2009

Time-interest-earned

ratio 7.97692416 8.6728127 4.7083926 0.8615551 1.29807878

T ime-interes t-earned ratio

0

2

4

6

8

10

2005 2006 2007 2008 2009

Time-interes t-earned ratio

Interpretation:

This ratio is calculated to know about long- term solvency position of the business.

This ratio indicates the company’s ability to pay interest. From the above

computation it is observed that the ratio has shown an increasing trend in year 2005

and 2006 while it has decreased in year 2007 and 2008 which shows that the

company has not utilized its capital efficiently. While it has again shown an

increasing trend in year 2009.



Activity Ratios:

Account receivable turn over ratio:

7. Accounts Receivable turnover

FormulaAccounts Receivable turnover=Annual sale/Average account

receivable

Item.

Years.

2005 2006 2007 2008 2009

A/R. turnover. 69.25103 107.2698 44.505009 33.9893875 35.0961134

A/R .turnover.

0

50

100

150

2005 2006 2007 2008 2009

A/R .turnover.

Interpretation:

This ratio shows the proportion of sales to receivable. It means that how many times

in a year our receivables are collected. It shows the management of the company

that how much they are efficient to collect the receivables. From the above graph it is

observed that the ratio has increased in 2005 and 2006 while it has shown a

decreasing trend in the next three years which reflect that the company’s

management was unable to collect the receivables in the last three years.



Average collection period:

8. Average collection period.

Formula.Average collection period=No. of days in a year/Account Receivable

turnover.

Items.Years.

2005 2006 2007 2008 2009

Avg. collection

period

5.2

0 3.36

8.0

9

10.5

9

10.2

6

Avg . c ollec tion period

0

5

10

15

2005 2006 2007 2008 2009

Avg. c ollec tion period

Interpretation:

This ratio indicates that in how many days’ receivables are collected. The smaller the

answer is the better it is for the firm. So, from the above computation it is observed

that the average collection period is less in first two years which is good for the firm

but it has shown increasing trend in the next three years in 2007, 2008, 2009

respectively. This shows that collection management is inefficient.



Accounts payable turnover:

12. Account Payable turnover.

Formula. Account Payable turnover=Annual credit Purchase or CGS/ Avg.Account payable.

Item.Years.

2005 2006 2007 2008 2009

Account payable

turnover 0 2.84 4.27 7.68 8.61

Ac c ount payable turnover

0

5

10

2005 2006 2007 2008 2009

Ac c ountpayableturnover

Interpretation:

This ratio shows the portion of credit purchase to the accounts payable. It means

that how many times we have paid our creditors in one year. So from the above

computation it can be observed that it shows an increasing trend in five years. This

tells that the firm is improving its position.



Average payment Period:

13. Average Payment period.

Formula.Average Payment period=No. of days in a year/Account payable

turnover

Items.Years.

2005 2006 2007 2008 2009

Average Payment

period. 0 126.85 84.29 46.85 41.81

Interpretation:

Average payment period tells that after how many days the firm pays its

creditors.The greater the answer is the better it is for the firm .thus from the above

computation it can be observed that average payment period is 0 in year 2005.while

it has increased in year 2006 up to 126 days but again it has shown a decreasing

trend in the next three years. Which shows that the firm is .



Inventory turnover:

9. Inventory turnover.

Formula. Inventory turnover=CGS/Average inventory

Item.Years.

2005 2006 2007 2008 2009

Inventory

Turnover.

2.9

3 3.76 2.45 3.84 3.22

Inventory T urnover.

0

1

2

3

4

5

2005 2006 2007 2008 2009

InventoryTurnover.

Interpretation:

This ratio reveals the number of times finished stock is turned over

during a given accounting period. In other words this ratio indicates that how many

times in a year inventory can be converted into sales. High inventory turnover ratio is

better than a low ratio. According to graph above this ratio has increased from 2005

to 2006 but a slight decrease in 2007. In 2008 it has increased but in 2009 it has

decreased again.



Average age of inventory:

10. Average age of inventory.

Formula. Average age of inventory=No. of days in year/Inventory turnover.

Items.Years.

2005 2006 2007 2008 2009

Avg. age of

inventory.

122.7

9

95.7

8

146.9

8

93.8

4

111.7

3

Interpretation:

This ratio shows us that for how many days the inventory remains

with the company after its conversion from raw material and work in process to

finished goods. The lower the days the higher the performance is for the firm. So,

from the above graph it can be observed that in 2005 inventory turnover in days is


Avg.age of Inventory.

0

50

100

150

200

2005

2006

2007

2008

2009

Avg.ageofinventory.


122.79 than it decreased in 2006 to 95.78 and increased in 2007 up to 146.98 and in

2008 it has again decreased to 93.84while it has again increased to 111.73.

Total Asset turnover:

11. Total Asset Turnover.

Formula. Total Asset Turnover=Annual sales/Average total assets.

Total Asset

turnover. 0.2930402 0.231914 0.1240643 0.2393786 0.42221267

T otal As s et turnover.

00.10.20.30.40.5

TotalAs s etturnover.



Gross Profit Margin:

14. Gross profit margin

Formula Gross profit margin=Gross profit/sales*100

Gross profit

margin 36.91199645 49.81158709 31.65270557 15.38866797 31.48721694

G ros s profit marg in

0

10

20

30

40

50

60

2005 2006 2007 2008 2009

G ros s profitmargin

Interpretation:

This ratio indicates the efficiency of operations and firm pricing policies. It reflects the firm’s

efficiency with which a firm produces its products.

The ratio tends to rise whenever cost of goods sold decreases and gross profit rise and vice versa or

when sales increases.

The gross profit ratio of the company is increasing from 2005 to 2006 while it has decreased in 2007,

2008 but has again increased in 2009. This shows that the company’s sales are increasing and also

company is reducing its cost of sales which ultimately increases the gross profit of the company.



While in the last two years the company’s cost of sale has increased due to which its gross profit

margin has decreased.

Operating profit margin:

15. Operating profit margin

Formula. Operating profit margin=operating profit /sales*100

Operating profit

margin 45.93776754 49.13231012 34.30719084 12.11297995 18.75606386

Operating profit marg in

0

10

20

30

40

50

60

2005 2006 2007 2008 2009

Operating profitmargin

Interpretation:

This ratio indicates the firm’s profitability after taking account of all its operating expenses. The ratio

tends to increase whenever operating expenses fall and operating income rise and fall when

operating profit decrease or sales increases.

The operating profit ratio of the company is showing a mix trend. It is increasing till year 2006, than

there is a decline in the year 2007 and 2008. After that, ratio is depicting an increasing trend in 2009.

The reason for decline in the year 2007 and 2008 is a rapid increase in the administrative and selling

expenses.



Net Profit margin:

16.Net Profit margin

Formula. Net profit margin=net profit /sales*100

Net profit margin 31.86019 30.39916 25.27361 0.42769 2.912257

Net profit marg in.

-5

0

5

10

15

20

25

30

35

2005 2006 2007 2008 2009

Netprofitmargin.

Interpretation

This ratio indicates the firm’s profitability after taking account of all interest expenses and income

taxes etc. of the firm. The ratio tends to increase when net profit rises and decreased when net

profit decrease or sales increase at higher rate than net profit.

The range of ratio has shown a decreasing trend in last five years.

The reason for decrease is that the net profit was decreased in that year. The reason for this decline

in net profit is the addition of new expense namely, other operating expenses in the income

statement of the company. Although provision for taxation was reduced but finance cost of the



company had increased with the greater proportion, causing net profit to decline and hence reduced

net profit ratio.

Earning Per Share:

17. Earning Per Share

Formula.

Earning per share Earning available for common share holder/No of

common share outstanding

Earning Per

Share 9.12 10.37 6.43 (0.21) 1.96

E P S

-2

0

2

4

6

8

10

12

2005 2006 2007 2008 2009

EPS

Interpretation:

The ratio tends to increase when earning available to common stock holders

increase and falls when paid up capital increase or earning decreases. It has

increased in 2006 as compared to 2005 but decreased in 2007 t0 2008 which is not

good for the company. and it has again increased in 2009.



Price-Earning Ratio:

18. Price-Earning Ratio

Formula Price-Earning Ratio=Market Price Per Share/Earning Per Share

ItemsYears

2005 2006 2007 2008 2009

Market Price Per Share 59.65 121.4 13.31

Earning Per Share

9.12

10.37

6.43 (0.21)

1.96

Price-Earning Ratio

6.54

11.71 - -

6.79

P ric e-E arning R atio

-

2.00

4.00

6.00

8.00

10.00

12.00

14.00

2005 2006 2007 2008 2009

P ric e-E arningR atio



Earning Yield Ratio:

19. Earning Yield Ratio

Formula Earning Yield Ratio=Earning Per Share/Market Price Per Share

ItemYears

2005 2006 2007 2008 2009

Earning Per Share

9.12

10.37

6.43 (0.21)

1.96

Market Price Per Share 59.65 121.4 13.31

Earning Yeild Ratio

0.15

0.09

0.15

E arning Yeild R atio

-0.02

0.040.06

0.080.10

0.120.14

0.160.18

2005 2006 2007 2008 2009

E arning Y eildR atio



Dividend Payout Ratio:

Dividend Payout Ratio

Formula Dividend Payout Ratio=Dividend Per Share/Earning Per Share

Item Years

2005 2006 2007 2008 2009

Dividend Per Share 1.5 1.5 1.5

Earning Per Share 9.12 10.37 6.43 (0.21) 1.96



Univariate Model

D.G Cement

Univariate Model

ItemYears

2005 2006 2007 2008 2009

Cash flow/Total Debt 28.57 27.87 2.67 (2.78) 5.26

Net Income/Total Asset 9.34

7.05

3.14 (0.10)

1.23

Total debt/Total Asset 48.28 43.83 34.44 42.15 51.04





Multivariate Model

Z Score=.012X1+.014X2+.033X3+.006X4+.010X5

Years2005 2006 2007 2008 2009

X1=Working Capital/Total Assets 6.33 11.35 22.85 13.75 -5.96

X2=Retained Earning/Total Assets 1.54 6.79 3.40 -0.10 1.11

X3=Earning Before Interest and Taxes/Total Assets 13.46 11.39 4.26 2.90 7.92

X4=Market Value of Equity/Book Value of Total Debts 642.73 371.82 431.36 350.82 423.07

X5=Sales/Total Assets 29.30 23.19 12.41 23.94 42.22

X1 0.0760 0.1362 0.2742 0.164973 -0.07155

X2 0.0216 0.0951 0.0476 -0.0014 0.0156

X3 0.4442 0.3760 0.1405 0.0957 0.261329



X4 3.8563976 2.230946 2.588173 2.10491 2.538412

X5 0.293 0.232 0.124 0.239 0.422

Z Score=.012X1+.014X2+.033X3+.006X4+.010X5 4.6912 3.0702 3.1745 2.6036 3.1660

Interpretation:

Formula

Z= 0.012(x1) +0.014(x2) +0.033(x3) +0.006(x4) +.099(x5)

Criteria

Clear Non bankrupt score is: Z>2.99

Bankrupt score is: Z<2

Gray area is: Z between 2 and 2.99

The result of the Z score model of five years is as follows:



The result shows that firm is not Falling in Bankruptcy region in any year for the last

five years so the company has strong Bankruptcy over the last five years.



Conclusion

In the comparison of the company’s ratios with the industry’s ratios

we have concluded that company’s liquidity ratios are good from

2005 to 2007 but in 2008 -09 it is weak and activity ratios are

consistent with the industry’s ratios but company’s financial and

profitability ratios are decreasing which shows the firms operations

and earnings are not good as compare to industry.

In short we can say that company has not improved all those ratios

with a higher percentage that a company should improve in relation

to the industry’s ratios. This thing shows the firms better operations

and managerial skills are not good for future prospects. This also

shows company’s weak footings on which the firm is competing with

others and losing its market share every year.


Date post:	14-Oct-2014
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Financial Management Report DG.khan Cement Final

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