Scribd
Upload
372 views14 pages

Dewan Cement Analysis Report

Dewan Cement is an ISO certified cement producer with a total annual capacity of over 2.88 million tons from two plants. A financial analysis of Dewan Cement from 2017-2018 found that inventory turnover and profit margins decreased slightly, while debt ratios and interest coverage improved, indicating somewhat weaker sales performance but a stronger financial position. Horizontal and vertical analysis of the financial statements showed changes in accounts over time and the composition of accounts respectively.

Uploaded by

Muhammad Usama Mahmood
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
372 views14 pages

Dewan Cement Analysis Report

Dewan Cement is an ISO certified cement producer with a total annual capacity of over 2.88 million tons from two plants. A financial analysis of Dewan Cement from 2017-2018 found that inventory turnover and profit margins decreased slightly, while debt ratios and interest coverage improved, indicating somewhat weaker sales performance but a stronger financial position. Horizontal and vertical analysis of the financial statements showed changes in accounts over time and the composition of accounts respectively.

Uploaded by

Muhammad Usama Mahmood
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 14

MUHAMMAD

USAMA
24078

DEWAN CEMENT
ANALYSIS REPORT
Submitted to: Ma’am Tehseen Valjee
Contents
Introduction:...............................................................................................................................................2
Plant and Production:.................................................................................................................................2
FINANCIAL RATIOS......................................................................................................................................3
Comments on Financial Ratios:..................................................................................................................4
Horizontal Analysis.....................................................................................................................................5
Vertical Analysis..........................................................................................................................................6
DUO-PONT ANALYSIS..................................................................................................................................7
Statement of Financial Position..................................................................................................................8
Statement of Profit or Loss.........................................................................................................................9
Statement of Comprehensive Income......................................................................................................10
Statement of Cash Flows..........................................................................................................................11
Introduction:
Dewan Cement Ltd. (DCL) is an ISO 9001:2008 certified company, and a name of trust in the
production of high-quality cement. DCL has a capacity of more than 2,880,000 tons per annum
from two separate manufacturing units, comprising of Pakland Cement Ltd., and Saadi Cement
Ltd.

Pakland Cement Ltd. was established in 1981 at Deh Dhando in District Malir, Karachi, 44
kilometers off the National Highway, encompassing an area of 150 acres. Within one year, an
integrated plant with an initial capacity of 300,000 TPA was up and running and it was fully
operational by 1985, producing superior Ordinary Portland Cement. In 1987, Sulphate Resisting
Pakland, a pioneer product in the private sector, was introduced. Supported by the latest
technology and intensive machinery, the market size of the product rose in a short span of time,
resulting in a clinker production capacity of up to 750,000 TPA. Subsequently, Pakland Blast
Furnace Slag Cement was included in the company’s fold. The company is listed on the Karachi
and Lahore Stock Exchange

Plant and Production:


The two units are Located
at:

o Deh
Dhando, district Malir,
Karachi, 44th km of
National Highway
(formerly Pakland
Cement Ltd. with 5,700 TPD production capacity).

o Kamilpur, near Hattar in Khyber


Pakhtunkhwa (formerly Saadi Cement Ltd. with 3,800
TPD production capacity).
FINANCIAL RATIOS

RATIOS FORMULA 2017 2018

Inventory turnover COGS/Avg inventory 14.8 times 13.71 times

Inventory turnover days (Avg inventory/COGS) 365 days 25 days 27 days

Payables turnover COGS/Avg payables 6.02 times 6.49 times

Payables turnover days (Avg payables/COGS) 365 days 61 days 56 days

Receivables turnover Sales/Avg receivables 52.37times 45.88times

Receivables turnover days (Avg receivables/sales) 365 days 7 days 8 days

Debt to assets ratio Total Debt/Total Assets 0.28: 1 0.25: 1

Working capital turnover Sales/Working capital -5.74 -6.78

Interest coverage EBIT/Interest expense 62.38 58.26

LTD to equity ratio LTD/Equity 0.34: 1 0.30: 1

Net profit margin (Net Income/Sales) 100 10% 7%


Comments on Financial Ratios:

 Inventory turnover

Inventory turnover decreases which means that Dewan cement is holding more stock and the
DSO increases which also indicates that The duration to convert inventory into sales is Less
Frequent. Since Inventory turnover has decreased by 1.10% which indicates weak sales and
overstocking.

 Accounts Payable Ratio

Accounts payable increases which means that Dewan Cement is paying off Short term debts
more frequently as days in payable decreases from 5 days.

 Debt to Assets Ratio:

Lower Debt to assets Ratio Indicates that company is stable with Lower proportion of liabilities.
More Over Operational risk is lower.

 Receivable Turnover:

This indicates that Sales has increased from a greater proportion and Total Assets have
decreased by 6.6%. So, there is a decrease in A/R Turnover.

 Working Capital Ratio:

Negative Working capital Indicates that current liabilities have exceed the current assets. It
means that company has Massive Depreciation and Amortization.

 Interest Coverage Ratio:

Interest coverage Ratio Increased which means that There is a Less debt burden on firm.

 LTD to Equity

Decrease in LTD to equity Ratio Indicates that company is less risky financially.
Horizontal Analysis
Vertical Analysis
DUO-PONT ANALYSIS

RATIO 2017 2018


Profit Margin 10.923 10.159
Assets T.O. 46.774 42.475
Equity Multiplier 2.642 3.077
Return on Equity 13.497 13.275

Comments:
 Profit margin decreases which indicates a increase in CoGS, the reasons might be
inefficient use of Labor and Capital.
 Assets T.O. decreases which means that there is a decrease in Total Assets.
Lower ratios mean that the company isn't using its assets efficiently and most likely
have management or production problems.
 A higher equity multiplier number indicates that the debt portion of total assets
is increasing which translates to more financial leverage for the company
 ROE falls which indicates the company ability to generate Profits also decreases. This
Factor can also be indicated through decrease in Assets Turnover.
Statement of Financial Position
Statement of Profit or Loss
Statement of Comprehensive Income
Statement of Cash Flows

You might also like

pFad - Phonifier reborn

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.

Note: This service is not intended for secure transactions such as banking, social media, email, or purchasing. Use at your own risk. We assume no liability whatsoever for broken pages.


Alternative Proxies:

Alternative Proxy

pFad Proxy

pFad v3 Proxy

pFad v4 Proxy