Attock Project Final[1].Docfg

8/14/2019 Attock Project Final[1].Docfg

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Financial Analysis of Attock Cement Pakistan Ltd.

A Project OnAnalysis of Financial statements of

Attock Cement Pakistan

Limited

Submitted to:Sir Arif Malik

Submitted by:Qamar Iqbal khan

REG NO: (3712)MBA 2o A

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Preface

As the world is growing rapidly, the businesses arealso moving to become the huge one. And by thatresult, more and more people want to become amaster in these businesses. The main purpose inthe finance field is to know how the financialanalysis is done. We all know that finance is theblood of any business and without it no businesscan run. Financial analysis of a company is verydifficult and the most important task and by doingthis I am able to know the whole financial positionand financial structure of the company.Simply by looking at how much cash a companyhas does not provide enough information. Thefinancial statements need to be analyzed to

measure a companys performance and tocompare it with other firms in the same industry.The resulting information is intended to be usefulto owners, potential investors, creditors, analysts,and others as the analysis evaluates the pastperformance, future potential and financial positionof the firm.

This report is an analysis of financial statements ofATTOCK CEMENT PAKISTAN Ltd.This report has beenprepared with an objective to develop analyticalskills required to interpret the information (explicitas well as implicit) provided by the financial

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statements and to measure the companysperformance during the past few years. Thefinancial statements are analyzed using traditional

evaluation techniques such as horizontal analysis,vertical analysis and trend analysis. Ratios are animportant tool in analyzing the financial statements& the companys profitability, solvency & liquidity.Sincere attempts have been made to make thisreport error free but if any errors and omissions arefound then I apologize for that.

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Acknowledgement

In the name of Allah, the mostbeneficent and merciful who

gave us strength and knowledgeto complete this report. Thisreport is a part of our courseFinancial Statement Analysis.This has proved to be a great

experience. We would like toexpress our gratitude to ourFinance teacher Sir. ARIF MALIKwho gave us this opportunity tofulfill this report. We would alsolike to thank our colleagues whoparticipated in a focus groupsession. They gave us many

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helpful comments which helpedus a lot in preparing our report.

Table of Contents....................................................................................................................................................1Preface........................................................................................................................................ 2

Acknowledgement .......................................................................................................................4............................................................................................................................................... 5

Table of Contents........................................................................................................................ 5Overview of income statement.....................................................................................................7Overview of Balance sheet..........................................................................................................7

Liquidity Position with Graphical Presentation..............................................................................8Liquidity Position...................................................................................................................... 8Liquidity Ratios......................................................................................................................... 9............................................................................................................................................... 15Activity Ratios.........................................................................................................................15Operating Cycle......................................................................................................................16Debt Ratios............................................................................................................................ 16Profitability Ratios...................................................................................................................17

Profitability - Financial Year 2002 to Financial Year 2008 ..................................................19Profitability Ratios...................................................................................................................19

Assets Utilization.................................................................................................................... 21Assets Utilization.................................................................................................................... 23

Return on Investment............................................................................................................. 26Return on total equity..........................................................................................................26

Investment Ratios...................................................................................................................27Investment Ratios...................................................................................................................28Investment Ratios...................................................................................................................29Long Term Debt Paying Ability...............................................................................................33

DuPont Analysis ........................................................................................................................36Annexure................................................................................................................................... 37

Summarized Income Statement.............................................................................................37

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Summarized Balance Sheet................................................................................................... 41Horizontal Analysis of Income Statements.............................................................................42Vertical Analysis of Income Statements.................................................................................42Horizontal Analysis of Balance Sheet..................................................................................... 43Vertical analysis of balance sheet..........................................................................................44.............................................................................................................................................. 47

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Introduction:

Attock Cement Pakistan Limited (ACPL) was incorporated in 1981 as a public

limited company and has been listed on the Karachi Stock Exchange since June 2002.

The Attock Cement project was a Pak Saudi venture and after completion, it started

commercial production on June1, 1988.

Overview of income statement

Overview of Income statement 2008 2007 2006 2005 2004

Sales 12,445,996 6,419,625 7,955,665 5,279,560 3,882,756

Cost of sales -10,530,723-

4,387,640-

3,992,822-

3,330,769-

2,497,262

Gross profit 1,915,273 2,031,985 3,962,843 1,948,791 1,385,494

Administrative expenses -111,658 -104,169 -121,953 -76,480 -68,645

Selling and distribution expenses -561,465 -65,122 -34,352 -60,905 -38,560

Other operating expenses -581,913 (139,721 -191,850 -93,786 -61,735

Other operating income 847,344 479,420 294,114 707,692 128,462

Profit from operations 1,507,581 2,202,393 3,908,802 2,425,312 1,345,016

Finance cost -1,749,837 -467,759 -450,696 -304,041 -224,601

Share of loss of associated companies -8,674 -14,163 -9,573

Profit\ Loss before tax -250,930 1,720,471 3,448,533 2,121,271 1,120,415

Taxation 197,700 -98,000-

1,030,078-439,193 -325,922

Profit\ Loss for the year -53,230 1,622,471 2,418,455 1,682,078 794,493

Basic earnings per share Rupees -0.21 6.43 10.37 9.12 4.31Diluted earnings per share 6.43 9.14 7.82 3.78

Overview of Balance sheet

Overview of Balance sheet 2008 2007 2006 2005 2004

Capital and Reserve30528440 33923185 19268200 9317998 6317055

Non-current Liabilities 10250352 10430917 9020740 5642649 3020575

Current Liabilities 12899306 7390229 6015436 3055858 2376989

Assets

Non-current Assets 33835927 32529377 24394481 13819736 8833476

Current Assets 19842171 19214954 9909895 4196769 2881143

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Liquidity Position with Graphical Presentation

Liquidity Position

Liquidity Position 2008 2007 2006 2005 2004Current Ratio 1.54 2.60 1.65 1.37 1.21Acid Test Ratio 1.22 2.33 1.44 0.96 0.64

Cash Ratio 1.18 2.31 1.43 0.94 0.62

0

0.5

1

1.5

2

2.5

3

2008 2007 2006 2005 2004

current ratio

acid test ratio

cash ratio

The liquidity position of deteriorated during the first nine months of FY'09. This was due to a40% decrease in current assets and a 14% increase in current liabilities if the company. Thecurrent liabilities of the company increased due to 14% rise in trade payables, 61% increase inaccrued markup and around 7% increase in short term borrowing by the company.

On the other hand, current assets of the company declined due to decrease in investments fromRs 15 billion at the end of FY08 to Rs 7 billion at the end of March FY09. Also the cash andbank balance of the company decreased by 22%. Thus, decrease in current assets and acorresponding increase in current liabilities resulted in a less favorable liquidity position ascompared to that in FY08.'s liquidity stance had been strengthening since FY04 and in FY07 its liquidity position was themost favorable. The increase in current assets had brought about this change. There was a98% increase in short term investments. Furthermore, the cash and bank balances had alsorisen considerably.In FY08 the current assets of the company declined slightly but a 63% rise in current liabilitiescaused a decrease in the liquidity of the company. Investments constitute nearly 79% of thecompany's total current assets and they declined by 11% in FY08. The investments decreased

further from Rs 15 billion at year-end FY08 to Rs 10.9 billion by end of 1Q09.

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Liquidity Ratios

1. Days, Sales in Receivables = Gross Receivables/Net Sales/365

Year Calculation in (Rupees,000)

Days, Sales in

Receivables2008 463446/12464347/365 13.57days2007 144245/6419625/365 8.202006 74165/7955665/365 3.40

2005 76238/5279560/365 5.27

2004 52622/3882756/365 4.95

0

2

4

6

8

10

12

14

2004 2006 2008

Day sales Rec

2. Account Receivables Turnover =Net Sales /Average Gross Receivables

Year Calculation in (Rupees,000)Account Receivables

Turnover

2008 12464347/30384550 41.02times2007 6419625/109205 58.782006 7955665/75201.50 105.792005 5279560/64430 81.44

2004 3882756/52622 73.78

0

20

40

60

80

100

120

2004 2005 2006 2007 2008

ARTO

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3. Account Receivables turnover in days =Average Gross Receivables/Net Sales/365

Year Calculation in (Rupees000)Account Receivables

turnover in days

2008 30384.50/12464347/365 8.89days

2007 109205/6419625/365 6.202006 75201.50/7955665/365 3.452005 64430/5279560/365 4.45

2004 52622/3882756/365 4.95

0

2

4

6

8

10

2004 2006 2008

ARTO.Days

4. Days Sales in Inventory =Ending Inventory/Cost of Goods sold /365

Year Calculation (Rupees000) Days Sales in Inventory

2008 1300325/10528046/365 45.08 days2007 295140/4387640/365 24.55 days

2006 226286/3992822/365 20.68 days2005 100994/3330769/365 11.07 days

2004 298538/2497262/365 43.63 days

0

10

20

30

40

50

2004 2005 2006 2007 2008

DSI

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4. Inventory turnover = Cost of Goods sold/Average Inventory

Year Calculation (Rupees000) Inventory turnover

2008 10528046/797732.5 13.19times2007 4387640/260713 16.832006 3992822/163640 24.40

2005 3330769/199766 16.672004 2497262/298538 8.36

0

5

10

15

20

25

2004 2005 2006 2007 2008

ITO

5. Inventory Turnover in Days =Average inventory /cost of goods sold /365

Year Calculation (Rupees000) Inventory turnover in days

2008 797732.5/10528046/365 27.66 days2007 260713/4387640/365 21.692006 163640/3992822/365 14.962005 199766/3330769/365 21.89

2004 298538/2497262/365 43.63

0

10

20

30

40

50

2004 2005 2006 2007 2008

ITO.Days

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07. Operating cycle = Account Receivables turnover in days + inventory turnover in days

Year Calculation O.C

2008 8.89+27.66 36.55 days

2007 6.20+21.69 27.89

2006 3.45+14.96 18.412005 4.45+21.89 26.34

2004 4.95+43.63 48.58

0

10

20

30

40

50

2004 2005 2006 2007 2008

O.C

08. Working Capital = Current Assets Current Liabilities (Amount in Rupees000)

Years Current assets Current Liabilities W.C

2008 19842171 12899306 69428652007 19214954 7390229 11824725

2006 9909895 6015436 3894459

2005 4196769 3055858 11409112004 2881143 2376989 504154

0

2000000

4000000

6000000

8000000

10000000

12000000

2004 2005 2006 2007 2008

W.C

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09. Current Ratio= Current Assets/Current Liabilities

Year Calculation in (Rupees000) Current Ratio

2008 19842171/12899306 1.54:12007 19214954/7390229 2.60:12006 9909895/6015436 1.65:1

2005 4196769/3055858 1.37:12004 2881143/2376989 1.21:1

0

0.5

1

1.5

2

2.5

3

2004 2005 2006 2007 2008

C.R

10. Quick Ratio= (Cash Equivalent + Marketable Securities+ Net Receivables)/CurrentLiabilities

Year Calculation in (Rupees000) Quick Ratio

2008 (244080+15082605+463446)/12899306 1.22:12007 (116173+16933790+144245)/7390229 2.33:1

2006 (7235749+502387+969891)/8429327 1.44:12005 (6931615+67244)/6344831 0.96:1

2004 (5078613+5503)/4524698 0.64:1

0

0.5

1

1.5

2

2.5

2004 2006 2008

Quick Ratio

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11. Cash Ratio =Cash Equivalent +Marketable Securities /Current liabilities

Year Calculation in (Rupees000) Cash Ratio2008 (244080+185082605)/12899306 1.182007 (116173+16933790)/7390229 2.312006 (77167+8543763)/6015436 1.432005 5279560/822532.50 6.42

2004 3882756/504154 7.70

0

1

2

3

4

5

6

7

8

2004 2005 2006 2007 2008

East

12. Sales to Working Capital = Sales/Average Working Capital

Year Calculation in (Rupees000) Sales to Working Capital

2008 12464347/9383795 1.33times2007 6419625/7859592 0.822006 7955665/2517685 3.172005 5279560/82253.20 6.42

2004 3882756/504154 7.70

s

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0

20

40

60

80

100

120

2004 2006 2008

DSR

ARTO

ARTO Days

Activity Ratios

Activity Ratios 2008 2007 2006 2005 2004

Days Sales inReceivables

13.57 days 8.20 days 3.40 days 5.27 days 4.95 days

Account

ReceivablesTurnover

41.02 times

58.78

times 105.79 times 81.94 times

73.78

times

AccountReceivablesTurnover in Days


ActivityRatio

150

20

40

60

80

100

120

2008 2007 2006 2005 2004

days sales in

receivables

A/R turnover

A/R turnover in days


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InventoryTurnover indays


InventoryTurnover

13.19 times 16.83 times 24.40 times 16.67 times 8.36 times

Days Salesin Inventory


Operating Cycle

ActivityRatio

2008 2007 2006 2005 2004

OperatingCycle 36.55days 27.89 days 18.41 days 26.34 days 48.58 days

0

10

20

30

40

50

60

2008 2007 2006 2005 2004

operating cycle

Debt Ratios

Debt Ratios 2008 2007 2006 2005 2004

Debt to Tangible net worth 77 52 78 93 85

Debt To Equity Ratio 76 53 78 93 85

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Debt Ratio 43 34 44 48 46

0

50

100

150

200

250

2008 2007 2006 2005 2004

debt to tangible networth

debt/equity ratio

debt ratio

The debt management ratios of showed a positive trend during FY07. The debt to asset andequity ratios as well as the long-term debt ratio all receded during the period and this reflected areduction in the company's dependence on debt financing. However, during FY08 the debtratios of the company rose because the total debt increased in FY08 mainly due to a 63%increase in the current liabilities which form 55% of the total debt.

Long term debt however decreased. The long term debt to equity increased because of adecline in the equity base due to fall in reserves. The TIE ratio continued to fall in FY08 againsta positive trend that prevailed before FY07. The reason is substantial rise in finance chargesdue to high interest rates in the economy.

Also the operating income in FY08 decreased, thus reducing the extent to which operatingincome can decline before the firm is rendered unable to meet its interest costs. Due to thelosses that ACPL experienced in FY08 and the decrease in profitability during July-March FY09,its Earning per Share (EPS) and Price to Earning (P/E) Ratio have been negative. During July-May 2009 the share price averaged around Rs 31.1.This shows that the dismal profits of the company have started reflecting in the low investorconfidence and falling share price. The average share price of had hovered around Rs100/share except during the fourth quarter of FY08 when share price fell well below theaverage. The management did not recommend any dividend for FY08 due to the dismalprofitability situation in the period.

Profitability Ratios

Profitability Ratios 2008 2007 2006 2005 2004

Gross Profit Margin 15 32 49 37 36

Operating Profit Margin 12 34 49 46 35

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Net Profit Margin 7.84 25 31 31 20

0

20

40

60

80

100

120

140

2008 2007 2006 2005 2004

gross profit margin

operating income

magin

net profit margin

After experiencing declining profitability during FY08, the cement sector came back strongly topost a growth of 167% in earnings during first quarter (July-September) of fiscal year 2009. Thecement sector posted profit after taxation of Rs 1.3 billion in first quarter of FY09 as comparedto Rs 500 million in the corresponding period of a year earlier.This growth was mainly due to higher local retention prices and depreciation of the rupeeagainst the dollar that resulted in an increase of rupee-based export sales. The net sales of thecement sector in the period July-March FY09 was 58% higher than the net sales generatedduring the corresponding period of FY08. It is believed that the profits of cement companies

increased due to an arrangement among them to keep prices high in the local market.However, higher sales revenue could not be translated into an increase in profits during theperiod. Increased costs of sales, operating expenses and finance expenses caused theprofitability of to remain low during July-March FY09. The cost of sales of the companyincreased by 30% during the period and resulted in a gross profit of Rs 3,733 million.The furnace oil/coal costs for the period July-March FY09 was Rs 5,258.6 million as comparedto Rs 3,095.7 million during the corresponding period of FY08. The electricity and gas costswere lower, however, the cost of raw material and packing material consumed increased by12%. The administration expenses increased by 31% while the selling & distribution expensesincreased drastically by 456% (from Rs 246 million in July-March FY08 to Rs 1,370 million inJuly-March FY09).Selling expenses may have increased due to higher transportation costs involved with exports

and higher fuel costs. Also, the finance costs increased substantially by 77% as interest ratesrose owing to tight monetary policy and liquidity crunch in the market.These rising costs greatly hampered the profitability of the company and resulted in a profit aftertaxation of Rs 321 million in the period July-March FY09, which is 34% lower than the profit (Rs487 million) during July-March FY08. Therefore, the earning per share (EPS) of the companydeclined from Rs 1.92 in July-March FY08 to Rs 1.27.

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Profitability - Financial Year 2002 to Financial Year 2008

The profitability ratios of the company have shown a declining trend since after FY05. The grossprofit margin increased in FY06 only to fall in FY07 and FY08. The profit margin of the companyhas decreased continuously along with return on assets (ROA) and return on equity (ROE).

The profit after taxation had declined by 33% in FY07 due to lower net retention prices causedby a supply overhang in the overall industry. Also the problem of rising input costs had begun inFY07. This rise in cost of production and raw material have continued into FY08 and furtheraggravated, causing the declining trend of the profitability of.Despite a strong growth in cement dispatches, the cement sector experienced decliningprofitability during FY08. The profitability of the sector fell by 73.6% to Rs 562 million till March2008 from Rs 2,133 million in the corresponding period of FY07. Although the sales volume ofthe cement companies increased, the net sales revenue did not increase to an equal extent dueto decrease in net retention prices in the sector.Over the years all cement manufacturers undertook huge capacity expansion plans. Thiscreated a situation of excess supply in the market. Companies resorted to price wars leading toa fall in prices and reduced the profit margins for the companies. The average cement price

during the period July-March FY08 was Rs 128.3 per bag as compared to Rs 133.6 per bag inthe same period in FY07.Similar was the case with. Increased production facilitated higher sales volume which in turntranslated into almost doubling of sales revenue in FY08. The company had earned the highestsales revenue of Rs 12.445 billion in FY08. However, despite this, the gross profit of in FY08(amounting to Rs 1.9 billion) was around 6% lower than the gross profit posted in FY07 (Rs 2.0billion).The reason for lower gross profit was a 140% increase in the cost of sales during the fiscal year.Major input costs increased and dampened the profitability of ACPL and resulted in a loss aftertaxation of Rs 53.230 million in FY08 against a profit after taxation of Rs 1.622 billion in FY07.The cement manufacturers in the industry were faced with rising fuel and power costs duringFY08.The cost of production for the cement companies went up due to rise in the prices of importedcoal. The cement companies in Pakistan have shifted from oil to coal or gas during the past fewyears. Coal is now used as a basic fuel by all cement manufacturers. Pakistan has hugereserves of coal, but cement companies are compelled to import it, as local coal has highsulphur content.Crude oil prices shot up during FY08 and had its impact on prices of coal and natural gas. Therise in the costs of international coal prices has been one of the biggest reasons behind thedampening of gross margins of cement companies during FY08. There was a nearly 50% rise inthe coal prices in FY0

Along with the hike in the international coal prices, the depreciation of the rupee against thedollar also added to the cost of importing coal. Finance charges rose due to higher interestrates, long term finances, short term borrowing and inclusion of workers' profit participation fundin FY08.

Profitability Ratios

1. Net Profit Margin= Net Income before minority share of Earnings and NonRecurring Items /Net Sales

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Year Calculation in (Rupees 000) Net Profit Margin

2008 97753/12464347 7.84%2007 1636634/6419625 252006 2428028/7955665 312005 1682078/5279560 31

2004 794493/3882756 20

0

5

10

15

20

25

30

35

2004 2005 2006 2007 2008

NPM

2. Total Asset Turnover = Net Sales/Average total Assets

Year Calculation in (Rupees 000) Total Assets Turnover

2008 12464347/52711214.50 24 Times2007 6419625/43024353.50 152006 7955665/10723490.50 74

2005 5279560/14865562 35

2004 3882756/11714619 33

0

10

20

30

40

50

60

70

80

2004 2005 2006 2007 2008

Asset TO

3. Return on Assets =Net Income before minority shares of earning and nonrecurringitems /Average total Assets

Year Calculation in (Rupees 000) Return on Assets

2008 97753/52711214.50 18.5%2007 1636634/43024353.50 3.8

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2006 2428028/10723490.50 23

2005 1682078/14865562 11

2004 794493/11714619 6.8

0

5

10

15

20

25

2004 2005 2006 2007 2008

ROA

4. Operating income Margin = Operating Income/Net Sales

Year Calculation in (Rupees 000) Operating IncomeMargin

2008 1513505/12464347 12%2007 2202393/6419625 342006 3908802/7955665 49

2005 2425312/5279560 46

2004 1345016/3882756 35

0

10

20

30

40

50

2004 2005 2006 2007 2008

OIM

Assets Utilization

Asset Utilization 2008 2007 2006 2005 2004

Sales to Fixed Assets 54 43 108 80 62Return on OperatingAssets

24 33 10 13 11

Operating Assetturnover

20 9.6 20 28 33

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Return on Assets 18.5 3.8 23 11 6.60

0

50

100

150

200

250

2008 2007 2006 2005 2004

sales to fixed assets

return on operating

assets

operating assets

turnover

return on assets

total asset turnover

The performance of in terms of asset management was weak during FY07. During the year, theinventory turnover (days) of the company more than doubled compared to FY06 when themanagement of inventory seemed most efficient (evident from the lowest inventory turnover indays). This could be traced back to lower sales revenue for the period, coupled with a higherstock of inventory.

At the same time, the average time taken by the company to recover cash from sales alsoincreased. The increase in inventory turnover in days and Days sales outstanding (DSO)prolonged the operating cycle of the company in FY07.

However, in FY08 the asset management of ACPL improved as the inventory turnover rateincreased because the company earned sales revenue more in proportion to the increase ininventory. Thus the days to convert inventory into sales became less (from approx. 100 days inFY07 to 79 days in FY08).

Although the days to convert sales into cash (DSO) increased slightly, the substantial decreasein ITO (days) led to the shortening of the operating cycle in FY08. The days sales outstandingwas higher because the trade debt increased substantially (by 153%) during FY08 as againstsales.Besides this the sales to equity and total asset turnover of the company which had a decliningtrend till FY07 increased in FY08. The sales to equity ratio had been decreasing because of an

increase in the paid up capital. But the trend was reversed in FY08 because the paid up capitalremained same while the reserves fell, causing a decrease in the equity base of the company.

Also higher growth in sales increased the sales/equity ratio. Total asset turnover also improvedbecause the management of the company's assets was effective in generating higher salesrevenue. The company's performance in the area has improved as full-scale production fromthe newly inaugurated Khairpur plant has augmented the sales.

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Assets Utilization

1. Operating Asset Turnover=Net Sales /Average Operating Assets

Year Calculation in (Rupees 000) OperatingAsset turnover

2008 12464347/5367098-(6592332+524176+15082605+427832) 0.20times2007 6419625/51744331-(8174474+196913+16933790+229315) 0.096times2006 7955665/34304376-(4482213+335810+152465+8543763) 0.20times2005 5279560/18016505-(2610634+271428+2769134+121486) 0.28times

2004 3882756/11714619-(1387681+25021+1386816+120329) 0.33times

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

2004 2006 2008

OP.ASSET TO

2. Return on Operating Assets = operating income/Net sales

Year Calculation in (Rupees 000)Return on Operating

Assets2008 1513505/63120379 24%2007 22023 9 3/ 66879875 3.3

2006 3908802/38854201 10

2005 2425312/18567919 13

2004 13455016/11859104 11

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0

5

10

15

20

25

2004 2006 2008

R on OP. A

3. Sales to Fixed Assets =Net Sales /Average Net fixed Assets(Exclude constructionin progress)

YearCalculation in (Rupees 000) Sales to Fixed Assets

2008 12464347/(24231112+22250927)/2 54%2007 6419625/(7816781++22250927)/2 432006 7955665/(7816781+6954499)/2 1082005 5279560/(6954499+6294666)/2 80

2004 3882756/6294666 62

0

20

40

60

80

100

120

2004 2005 2006 2007 2008

sales/Fix

Assets

4. 8.Return on Investment =Net Income before minority share of earning and nonrecurring items + (Interest expense)*(1-tax rate)

Year Calculation in (Rupees 000) Return on Investment

2008 97753+1766298*0.65/42566447 2.92%2007 1636634+468173*0.65/3632152 5.342006 2428028+450696*0.65/21624793.50 12.582005 1682078+304041*0.65/12149138.50 15.47

2004 794493+224601*0.65/9337630 10.07

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0

2

46

8

10

12

14

16

2004 2005 2006 2007 2008

ROI

5. 9.Return on total equity =Net Income before nonrecurring items-Dividend onredeemable preferred stock/Average total equity

Year Calculation in (Rupees 000) Return on total equity

2008 97753/(30528440+33923185)/2 0.30%2007 1636634/(33923185+19268200)/2 0.372006 2428028/(19268200+9317998)/2 0.172005 1682078/(9317998+6317055)/2 0.22

2004 794493/6317055 0.13

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

2004 2005 2006 2007 2008

R on T. Eq

6. 11.Gross profit margin=Gross profit/Net sales

Year Calculation in (Rupees 000) Gross profit margin

2008 1936301/12464347 15.53%2007 2031985/6419625 31.652006 3962843/7955665 49.812005 1948791/5279560 36.91

2004 1385494/3882756 35.68

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0

10

20

30

40

50

2004 2005 2006 2007 2008

East

Return on Investment

Return on total equity

ReturnRatios

2008 2007 2006 2005 2004

Return onInvestment

2.92 5.34 12.58 15.47 10.07

Return onTotal Equity

0.30 0.37 17 22 13

0

5

10

15

20

25

2008 2007 2006 2005 2004

Return on investment

Return on total equity

One of the most important profitability metrics is return on equity [or ROE for short]. Return onequity reveals how much profit a company earned in comparison to the total amount ofshareholder equity found on the balance sheet. If you think back to lesson three, you willremember that shareholder equity is equal to total assets minus total liabilities. It's what theshareholders "own". Shareholder equity is a creation of accounting that represents the assetscreated by the retained earnings of the business and the paid-in capital of the owners. The

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return on Equity has decreased drastically and there is quite a hell of decrement in ROE, whichis not very much encouraging for the investors in shares.

Investment Ratios

Degree of financial leverage

Earning per common shares

Price earning ratio

Investment ratios2008 2007 2006 2005 2004

Degree of financial leverage15.48 1.27 1.13 1.14 1.20

Earning per common shares0.017 0.60 0.10 0.76 0.35

Price earning ratio258.08 4.81 3.38 3.96 8.19

0%

20%

40%

60%

80%

100%

2008 2007 2006 2005 2004

Price earning ratio

Earning per

common shares

Degree of financialleverage

A leverage ratio summarizing the affect a particular amount of financial leverage has on acompany's earnings per share (EPS). Financial leverage involves using fixed costs to financethe firm, and will include higher expenses before interest and taxes (EBIT). The higher thedegree of financial leverage, the more volatile EPS will be, all other things remaining the same.Most likely, the firm under evaluation will be trying to optimize EPS, and this ratio can be used tohelp determine the most appropriate level of financial leverage to use to achieve that goal.The companys ratio ha increased dramatically in the year 2008 by 15 times. So there is quite amargin for company to get leveraged.

27


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0

10

20

30

40

50

60

2008 2007 2006 2005 2004

Dividend payout ratio

Dividend yield ratio

Book value per share

Indicates the proportion of earnings that are used to pay dividends to shareholders.A reduction in dividends paid is looked poorly upon by investors, and the stock price usuallydepreciates as investors seek other dividend paying stocks.

A stable dividend payout ratio indicates a solid dividend policy by the company's board of

directors. The situation of ATTOCK CEMENT Pakistan. Ltd. Shows increment in 2006 but fromthere is consistent decrement in this ratio by more than two times so company is trying to buildthere retained earnings instead of giving dividend.During bull markets the stock price is more likely to trade significantly higher than book value,and in a bear market the two values may be close to equal.The dividend yield or the dividend-price ratio on a company stock is the company's annual dividend payments divided by itsmarket cap, or the dividend per share divided by the price per share. It is often expressed as apercentage. There is quite fluctuations in this ratio which shows there is lack of stability in thecompany policy towards this section.Now if we look at the book value per share, as we know that somewhat similar to the earnings per share,but it relates the stockholder's equity to the number of shares outstanding, giving the shares araw value. Comparing the market value to the book value can indicate whether or not the stock

in overvalued or undervalued. During bull markets the stock price is more likely to tradesignificantly higher than book value, and in a bear market the two values may be close to equal.

Investment Ratios

1. Degree of financial Leverage=EBIT/Earnings before tax

Year Calculation in (Rupees 000)Degree of financial

leverage

2008 1513505/175273+8674-86194 15.48%2007 2202807/1720471+14163 1.272006 3908802/3448533+9573 1.132005 2425312/2121271 1.14

2004 1345016/1120415 1.20

29


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0

2

46

8

10

12

14

16

2004 2005 2006 2007 2008

DFL

2. 2.Earnings per common share=Net income-preferred dividend/Weighted Averageno. of common share outstanding

Year Calculation in (Rupees 000)Earnings per common

share

2008 25685/252485315 0.017%2007 1622471-103324/252485315 0.602006 2418455-73772/2332578650 0.102005 1682078-329/219744584 0.76

2004 794493-20049/219744584 0.35

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

2004 2005 2006 2007 2008

EPS

3. Price/Earning ratio=Market price per share/Diluted earning per share

Year Calculation in (Rupees 000) Price/Earning ratio

2008 30.97/0.12 258.082007 30.97/6.43 4.812006 30.97/9.14 3.382005 30.97/7.82 3.96

2004 30.97/3.78 8.19

4. Percentage of Retained earning=Net income-All dividend/Net income

Year Calculation in (Rupees 000)Percentage of retained

Earning

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2008 25685-379093/25685 -13.762007 1622471-344743/1622471 0.792006 2418455-275478/2418455 0.882005 1682078-250705/1682078 0.85

2004 794493-138374/794493 0.83

-14

-12

-10

-8

-6

-4

-2

0

2

2004 2006 2008

% earnings

ret.

5. Dividend payout=Dividend per common share/Diluted earning per share

Year Calculation in (Rupees 000) Dividend payout

2008 (379093000/158934068)/0.12 19.832007 (344743-103324/158934068)/6.43 23.62

2006 (275478-73772/112835676)/9.14 48.312005 (250705-329/112835676)/7.82 28.37

2004 (13874-20049/112835676)/3.78 27.74

0

10

20

30

40

50

2004 2005 2006 2007 2008

Div P/O

6. Dividend yield= Dividend per common share/Market price per common share

Year Calculation in (Rupees 000) Dividend yield

31


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2008 (379093000/158934068)/30.97 7.68%2007 (344743-103324/158934068)/30.97 4.902006 (275478-73772/112835676)/30.97 14.232005 (250705-329/112835676)/30.97 7.17

2004 (13874-20049/112835676)/30.97 3.38

0

2

4

6

8

10

12

14

16

2004 2005 2006 2007 2008

Div Yield

7. Book value per share=Total stockholders equity-preferred stock equity/Number ofcommon share outstanding

Year Calculation in (Rupees 000) Book value per share

2008 30528440-746071/158934068 18.74%

2007 33923185-746071/158934068 20.872006 19268200-515580/112835676 16.622005 9317998-515580/112835676 7.80

2004 6317055-347949/112835676 5.29

0

5

10

15

20

25

2004 2005 2006 2007 2008

B.V/Share

32


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0

0.5

1

1.5

2

2.5

3

2004 2005 2006 2007 2008

FCC

3. Debt Ratio =Total Liabilities/Total Assets

Year Calculation in (Rupees000 ) Fixed Charge coverage

2008 23149658/53678098 43%2007 17821146/51744331 34%2006 15036176/34304376 44%

2005 8698507/9317998 93%2004 5397564/6317055 85%

0

20

40

60

80

100

2004 2005 2006 2007 2008

Debt ratio

4. Debt Equity Ratio=Total Liabilities/Shareholders Equity

Year Calculation in (Rupees000) Debt Equity Ratio

2008 23149658/30528440 76%2007 17821146/33923185 532006 15036176/19268200 782005 8698507/9317998 93

2004 5397564/6317055 85

34


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0

20

40

60

80

100

2004 2005 2006 2007 2008

Debt/Eq

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DuPont Analysis

DuPont Return on Assets=Net profit margin*Total assets turnover

Year Calculation in (Rupees,000)Dupont Return on

Assets

2008 7.84*0.24 1.88

2007 0.25*0.15 3.75

2006 0.31*0.74 22.94

2005 0.31*0.35 10.852004 0.20*0.33 6.60s

DuPont return on Assets has a decreasing trend. In 2008 net profit of co decrease due to highcost of goods sold. Co does not utilize its assets properly in 2008. In 2007 trend of this ratio isgood. But in last 3 years it also has increasing trend.

0

5

10

15

20

25

2004 2006 2008

Dupont ROA

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Annexure

Summarized Income Statement

Summarized IncomeStatement

2008Rs.In000

2007Rs.In000

2006Rs.in000

2005Rs.In000

2004Rs.In 000

Sales NetLocal SalesExport SalesLess.Excise DutySpecial Excised Duty

Sales taxCommission to stockiestSales Net-.Cost of SalesRaw and Packing materialusedSalaries and WagesElectricity and GasFurnace oilStores and Spares usedRepair and maintenanceInsuranceDeprecation on property

plant and EquipmentDeprecation on assetssubjects to finance leaseRoyaltyExcise DutyVehicle RunningPostage Telephone ,TelegramPrinting and StationeryLegal and ProfessionalChargesEstate DevelopmentRent, Rates and taxesFreight ChargesOther Expenses

Opening W.I.PTransfer from Trail runClosing W.I.PCost of Goods ManufacturedOpening stock of finishedgoodsTransfer from Trail runClosing Stock of finished

147324452741111

272904699556

192985825074912464347

1368488480352

1644759459748676420498530

439041354192

3331

837312596215541538934801499963969825753207910534013142686

-(118292)10558407107804

(118863)(11059)19302

8887306511826

1679829

1159214140464

6419625

580717293929605335

190256738315922913

21840469367

13108

45349153737159178494549962274113339694494387229161989

50462(142686)44569945058

39300(69728)(25370)43984

10348119607817

1509449

1349755141067

7955665

46408023085447062521146673881131823320542341940

13203

43678168846980177414928844678387956807651415583750205

-(161989)404405319468

-(5058)1441065641

6730756641351

1141756

87792472867

5279560

3742871859143229791493514357762999723642330100

11311

316521045057241831158154839303091413948963177348210983-

(50205)333812638616

-(19468)1914826505

5392393305191

990124

76649758207

3882756

3305351619192179111123716338970963742235317155

6923

3028459095881137412765073179615045736742261411388603

-(210983)249173344145

-(38616)5529

-

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goods

-)Own consumptionCapitalizedCost of Goods SoldGross Profit

-) Administrative ExpensesSalaries WagesElectricityRepair and MaintenanceInsuranceDeprecation on propertyplant and EquipmentDeprecation on assetssubjects to finance leaseVehicle RunningPostage Telephone ,TelegramPrinting and StationeryLegal and ProfessionalCharges

Traveling and conveyanceRent, Rates and taxesEntertainmentSchool expensesFees and subscriptionOther ExpensesAuditors RemunerationTotal Administrative

ExpensesSelling and DistributionExpenseSalaries WagesElectricity

Repair and MaintenanceInsuranceDeprecation on propertyplant and EquipmentDeprecation on leasedpropertyVehicle RunningPostage Telephone ,TelegramPrinting and StationeryRent, Rates and taxesTraveling and conveyanceEntertainmentAdvertisement and Sales

PromotionFreight Charges-localFreight and HandlingCharges-ExportOther ExpensesTotal Selling and DistributionExpensesOther Operating ExpensesWorkers profit participationfund

105280461936301

5715029851620

168511956

126

35453441221035226783176113690041982

3424-

110745

354318752994971342

-

194012351553343837202963395

14135492219

2595562970

-

97345000

-580953

-

43876402031985

4895826781324

12779027

1571

535327381897336961042699278084912966

2937-

104169

297276708842351132

-

160313611094231214061892643

5019637

217965122

93145

-1105035112414-

39928223962843

4095026841210

31477261

1213

4066609349836394103772561327769753458

17304-

121953

23997443225172324

-

1225855891127215612941569

23-

150134352

182006

-9844

---

33307691948791

3105625661243

30999742

4945

2678310319131365241087279561771855

192673576480

174743451211397895

-

81485591398110453981919

31239-

241960905

83058

-4530

---

24972621385494

2734231251461

199212425

1382

175238411256247124484397665944937

36070468645

1461638340306900

88

76594464349514323582213

13572-

180538560

60829

----

206

Page 38


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Book Value of Asset writtenoffDonationWorker welfare fundExchange lossLoss on Disposal of Property

Plant and EquipmentLoss on Sale and Lease backtransactionsTotal Other OperatingExpensesOther Operating IncomeIncome from Financial AssetsIncome on Bank DepositsInterest on Loan toEmployeesGain on derecognizing ofinvestmentDividend Income From-Related Parties

-OthersTotal Income from financialAssetsIncome from non financialassetsRental IncomeProfit on sales of propertyplant and assetsScrap SalesMark up on loansProvisions and unclaimedbalances returned backExchange gain

OthersTotal other operating incomeProfit from operationsFinance CostLong term finances- Long term loans- Preferred dividend- Non participatory

redeemable capital- Finance under markup- Provident fund-Short term borrowings-Finance lease

workers profit participationfundLoss on derivative financialinstrumentsLoss on Foreign currencyforwardGuarantee commissionBank chargesTotal finance CostExcess of Acquire Interest in

-

595687

727128-

820303143821301

15924488

1039469731858

--

8466061513505

1040737--

--499413

584522

205308

-

416515569

(1766298)86194

(8674)

(175273)

108214(309167)

-

139721

1659182-

465656118467615

16344490

41701208303

--

4794202202393

32318328281-

--

103324656498-

-

18134496

468173-

(14163)

1720471

33000312435

-

191850

363181-

265763120266427

28473567

760945622116

6986-

2941143908802

30502735351-

--73772

12543101

-

17229

16794994

450696

(9573)

3448533

405001027000

6198

93786

582276543173

15228426696341

20023207

29112002729

-5007076922425312

1862673294265535351

42655--

1243983

-

7804

14056860

304041

-

2121271

40000464000

-

61735

535290-

3446085730121015

1980-

38271351289

--

1284621345016

141701200493535112341

37-

986090

-

--

8714235

224601-

-

1120415

28700297000

Page 39


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the net assets of acquireShare of loss of AssociatedcompanyProfit before Taxation-)TaxationFor the year

-current

- DeferredPrior Year-Current-DeferredTotal taxation

(5)-

(200958)

-

(247435)98000

(32422)

(5000)1030078

193

(65000)439193

10222

(10000)325922

Net Income 25685 1622471 2418455 1682078 794493

Page 40


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Summarized Balance SheetSummarized Balance Sheet 2008 2007 2006 2005 2004

Equity and LiabilitiesCapital and Reserves

Authorized Capital-950000000@ ordinary share10-50000000@ preferenceshare10

Issued subscribed and paid upcapitalShare deposit moneyReservesUn-appropriated profitTotal capital and ReserveNon Current LiabilitiesLong term finance

Liabilities against subject tofinance leaseLong term depositsRetirement and other benefitsDeferred TaxationTotal Non-Current liabilitiesCurrent LiabilitiesTrade and other payables

Accrued markupShort term borrowingCurrent portion of non-currentliabilitiesDerivative foreign currencyforward options

Provision for taxationTotal Current liabilitiesTotal Liabilities

AssetsNon-Current AssetsProperty plant and equipment

Assets subject to finance leaseCapital work in progressInvestmentsLong term loans, advances anddepositsTotal Non-Current AssetsCurrent Assets

Stores spares and loose toolsStock in tradeTrade debtsInvestments

Advances, deposits,prepayments and otherReceivablesCash and bank balanceTotal Current AssetsTotal

9500000500000100000002535412

-276347223239930528440

8871051393

7389054018125100010250352

145007439161081943302828202

-

35090

1289930653678098

24224273683924883076592332524176

33835927

2323883

130032546344615082605427832

2440801984217153678098

9500000500000100000002535412

-29630084175768933923185

86864471141

7946739862162400010430917

102727434261239429722042281

-

35090

739022951744331

2211755113337619070638174474196913

32529377

1496291

29514014424516933790229315

1161731921495451744331

250000050000030000001843937

835115085354233055819268200

737246828886

338142657215590009020740

140686934075726136951619025

-

35090

601543634304376

7521723295058117596774482213335810

24394481

836049

226286741658543763152465

77167990989534304376

250000050000030000001843937

-71965682774939317998

4899225131985

28674457655370005642649

1154426960620

-599674

306048

35090

305585818016505

663723731726239831752610634271428

13819736

1035081

100994762382769134121486

93836419676918016505

2500000500003000001676306

-

43890882516616317055

273057383487

30365381501380003020575

4939681360677

-487254

-

35090237698911714619

61280831665831126108138768125021

8833476

938847

298538526221386816120329

83991288114311714619

Page 41


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Horizontal Analysis of Income Statements

2008 2007 2006 2005 2004Net sales 321.01 % 165.34 % 204.89 % 135.97 100 %Cost of sale (421.58) (175.7) (159.89) (133.38) 100Gross profit 139.75 146.66 286.02 140.66 100administrativeexpense

(61.33) (151.75) (177.66) (111.41) 100

selling &dist.expenses

(145.98) (168.88) (89.09) (157.95) 100

other operatingexpense

(964.90) (226.32) (310.76) (151.29) -100

other Operatingincome

659.03 373.20 228.95 550.89 100

profit from operation 112.53 163.74 290.61 180.32 100finance cost (786.41) (208.26) (200.66) (1345.25) 100share of loss ofassociated company

- - - - 100

income before taxes 15.64 153.56 307.79 189.33 100Provision for taxation (61.66) (30.06) (316.05) (134.75) 100Net profit 3.23 204.21 304.40 211.72 100

Horizontal analysis of income statement shows that net sales of the Co has increasingtrend. But on the other hand Cost of goods sold jump quickly. This is not a good trend. Costof goods sold of the Co increases due to expensive raw materials. Gross profit of the codecreases from last years due to high cost of goods sold. Administrative and selling

expense of the Co has decreasing trend. Other operating expenses of the Company areincreasing quickly. Company is also increasing trend in other operating income. Profit fromoperations also decreases. Co also has high finance cost from last years. Income beforetaxes has decreasing trend due to high cost of goods sold and finance cost. Net profit of theCompany is Very small as compare to last years.

Vertical Analysis of IncomeStatements

2008 2007 2006 2005 2004Net sales 100% 100% 100% 100% 100 %

Cost of sale (84.46%) (68.35%) (50.18%) (63.09%) (64.32%)Gross profit 15.35 31.64 49.81 36.91 35.68

administrative expense (0.88) (1.62) (1.53) (1.45) (1.77)selling &dist. expenses (4.52) (1.01) (0.43) (1.15) (0.99)

other operating expense (4.78) (2.17) (2.41) (1.78) (1.59)

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other Operatingincome

6.79 7.47 3.70 13.40 3.37

profit from operation 12.14 34.31 49.13 45.94 34.64finance cost (14.17) (7.28) (5.66) (5.76) (5.78)

Excess of acquiresinterest in the net assets

of acquire

0.69- - - -

share of loss ofassociated company

(0.66) (0.22) (0.12)

income before taxes 1.41 26.80 43.34 40.18 28.86Provision for taxation (1.61) (1.53) (12.95) (8.32) (8.39)

Net profit 20.20 25.27 30.40 31.86 20.46

In vertical analysis of income statement shows that has high cost of goods sold from lastyears. Gross Profit of the Co has decreasing trend. This is decrease due to high cost ofgoods sold. Operative expense of the co has minimum portion in the income statement.Profit from operations also has decreasing trend. Share of loss of associated co alsoincreases Income before taxes also decreases from last years. Provision for income taxes

also has decreasing trend.

Horizontal Analysis of BalanceSheet

Assets 2008 2007 2006 2005 2004issued subscribed &paid up capital

151.25 151.25 110.00 110.00 100

reserves 629.62 675.08 343.70 163.96 100

accumulated profittotal

12.87 698.43 926.07 110.26 100

Total - 537.01 305.02 147.51 100

non-current Liabilities

long term finance 324.88 318.12 269.99 179.42 100

liabilities againstassets subject tolease finance

0.47 1.36 34.50 158.09 100

long-term deposits 243.34 261.71

retirement and otherbenefit

141.59 104.40 69.65 119.96 100

deferred taxation 906.52 1176.81 1129.71 389.13 100current liabilities

trade and otherpayables

293.56 207.96 284.81 233.70 100

accrued mark up 28.78 25.18 25.03 70.60 100

current portion oflong term liabilities

580.43 419.14 332.27 123.07 100

provision for taxes 100 100 100 100 100

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total 542.67 310.91 25.47 128.56 100

assetsnon-current assets

property plant &equipment

395.29 360.92 122.74 108.31 100

assets subject tofinance lease 4.10 80.06 177.12 190.45 100capital work inprogress

220.96 169.35 1044.28 353.71 100

investment 475.06 589.07 323 188.13 100

long-term loans&deposits

2094.94 99 1342.11 1084.80 100

current assets 100 115.7 116.10 121.51 123

stores spares and loosetools

247.53 159.37 89.05 110.25 100

stock in trade 435.56 98.86 75.79 33.83 100

trade debts 880.71 274.11 140.94 144.88 100

investment 1087.57 11221.05 616.07 199.67 100advanced deposits 355.55 190.57 126.71 100.96 100

cash and bank balance 290.60 138.32 91.88 111.72 100

Liabilities and owner equity of the balance sheet shows that issued and paid up capital ofthe company is increasing. And reserves of the co also jump 343% to 675% in the year of2006 to 2007. Accumulated profits of the co have decreasing trend. And it is dangerous forthe co.Non current liabilities of the co increases from 2004 to 2007 but there is a decline in 2008.Current liabilities of the co also have increasing trend.This horizontal analysis of balance sheet shows that Fixed Assets of the Co increase fromlast years. It means Co have much productive assets. It shows a good trend of fixed assets.

On other side trend of assets subjects to finance lease going to decrease. Co also haveasset that are work in progress but trend of these assets also going to decrease. Co alsoinvests in long term investment and this asset also has increasing trend from 2004 to 2008.Co also has long term deposits and these also have increasing trend.Current Assets of the Co also have increasing trend. Trade debts of the Co also haveincreasing trend and its debts are not in a good position. Short term investments of the coalso increase and Co use its idle cash in good manners..

Vertical analysis of balance

sheetAssets 2008 2007 2006 2005 2004issued subscribed &paid up capital

4.72% 4.89% 5.37% 10.23% 14.31%

reserves 51.48 57.26 43.97 39.94 37.47accumulated profittotal

0.06 3.39 6.79 1.54 2.15

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Total 56.26 65.55 56.16 51.72 53.92Non-currentLiabilitieslong term finance 16.52 16.79 2.49 27.19 23.31liabilities againstassets subject to

lease finance

0.000732 0.0022 0.084 0.73 0.71

Long term deposits 0.13 0.15 0.098 0.16 0.26retirement and otherbenefit

0.10 0.077 0.077 0.25 0.32

deferred taxation 2.33 3.14 4.54 2.98 1.18Total 19.09 20.16 26.29 31.32 25.78Current liabilitiesTrade & otherpayables

2.70 1.98 4.10 6.41 4.22

accrued mark up 0.73 0.66 0.99 5.33 11.61

Short term borrowing

secured

15.26 7.62 7.62

current portion oflong term liabilities

5.27 3.95 4.72 3.33 4.16

provision for taxes 0.06 0.068 0.10 0.19 0.29total 24.03 14.28 17.54 16.96 20.29

assetsnon-current assets

property plant &equipment

45.13 42.74 21.92 36.83 52.31

assets subject tofinance lease

0.012 0.26 0.86 1.76 1.42

capital work in

progress

4.63 3.68 34.28 22.11 9.61

investment 12.28 15.79 13.06 14.49 11.85long-term loans

&deposits0.97 0.38 0.97 1.51 0.21

Total 63.03 62.86 71.11 76.71 75.41Current liabilities

stores spares andloose tools

4.32 2.89 2.44 5.75 8.01

stock in trade 2.42 0.57 0.66 0.56 2.55trade debts 0.86 0.27 0.22 0.42 0.45investment 28.09 32.72 24.90 15.37 11.84

advanced deposits 0.79 0.44 0.44 0.67 1.03cash and bank

balance0.45 0.22 0.22 0.52 0.72

Total 36.26 37.13 28.88 23.29 24.59

Vertical Analysis of the balance sheets shows that in 2008 that Equity portion of Co havelarge portion of equity .And there is minimum portion of non current liabilities. And it showsa good trend. Co finances his assets through equity and pay minimum amount of interest.

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Current liabilities of the co increase from last years. On current assets co do not payinterest. Co pays his obligation timely and there is no chance of insolvency.On the other side of balance sheet are assets of the Co. Co have more productive assets.

Analysis show that Company Finance minimum assets at lease. Current assets of the Coslightly decrease from last year.

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Conclusion:

Trend Analysis of the company shows

that the companys performance is

decreasing with the passage of time as

profitability, ROA and ROE are decreasing

every year. Company is getting more

leveraged which is increasing the risk of

insolvency. Company recovers its trade

debts in almost 2 to 3 which shows that

company has a good credit policy. Cross

sectional Analysis shows that company is

in the better position than its competitors.

Political and economic issues has a

great impact on the performance of wholeindustry e.g. increase in demand ofenergy and oil have increased the pricesof inputs which resulted a great increase

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