BESTWAY CEMENT

LIMITED
Company Introduction:
It is a private Company, Founded by Sir Anwar Pervez. Its first plant was established in 1995 in
Hattar KPK with an initial investment of US $120 million, Plant’s initial capacity was 0.99
million tons per annum. This was enhanced to 1.17 million tons per annum at a Cost of 10
million US Dollars in 2002. It expanded its operations by setting up a plant of 1.8 million tons
per annum in Chakwal Punjab

Vision:
“To Produce High Quality Cement At The Lowest Cost”

Mission:
“Consistently produce high quality cement. Consistently maintain a high standard of customer
service. Continue to set aside adequate funds from net profits for fulfilling its various social
responsibilities particularly in the field of education and health.”

VALUES
 Customer Focus: We are passionate about meeting customer needs.
 Communication: We believe in open, honest and frequent communication.
 Teamwork: We work together for the benefit of the team and business.
 Delivering Results: We are focused on achieving business objectives.
 Integrity: We can be relied upon to act with honesty and integrity.
 Leadership: We encourage and inspire people to be the best they can be.
RATIO ANALYSIS:
Here are the results of ratios that are calculated to interpret the
financial statements of the company over past 5 years. Working of these ratios is on a separate
excel file that is also attached.
(Below here graphs of all ratios and their interpretation are given to
clearly understand the financial position of BESTWAY CEMENT)

LIQUIDITY:

Days sales in receivables

12
10
10 9
7

2014 2015 2016 2017 2018

It shows how much days a firm takes to collect its receivable. Days are increasing which means
company is taking more days to collect receivables which is bad for company

Account receivables tunover

101.0

45.6 44.9
39.1
32.6

2014 2015 2016 2017 2018

It shows how Many times a firm can collect its receivable. Turnover times is decreasing which
means company is collecting receivables less times during the year which is bad for company
 Account receivables tunover
in days
11
9
8 8

2014 2015 2016 2017 2018

It shows how much days a firm takes to collect its receivable. Turnover days are increasing
which means company is collecting receivables in more days during the year which is bad for
company

Days sales in inventory

50
47
44
40

22

2014 2015 2016 2017 2018

It shows how many days firm is taking to convert its inventory into sales. Days are decreased a
little so it means company is taking more days to convert inventory into sales, this is bad for
company
 Inventory Turnover

11.8 11.8

9.1 8.6 8.6

2014 2015 2016 2017 2018

It shows how many times firm is converting its inventory into sales during a year. It is decreased
in past years which means company is selling its inventory less times during the year, this is bad
for company.

Inventory Turnover In Days

43 42
40

31 31

2014 2015 2016 2017 2018

it shows how many days firm is taking to convert its inventory into sales. It is increased in past
years which means company is taking more days to sell its inventory during the year, this is bad
for company.
 Operating Cycle
53
51
44
39 40

2014 2015 2016 2017 2018

it shows how much time a company is taking in converting its inventory to sales and then
collecting receivables. It increased so this is bad for company.

Working capital

2030197 2008245
785050
-523521
2014 2015 2016 2017 2018

-7249383

It compares current assets to current liabilities of a firm. Current assets are less than current
liabilities 2 times in last 5 years, this is a bad indicator for company.
 Current Ratio
1.2 1.1
1.1
1.0
0.7

2014 2015 2016 2017 2018

It shows the ratio of current assets towards current liabilities. Current assets are less than current
liabilities 2 times in last 5 years, this is a bad indicator for company, because company is unable
to pay its current liabilities from its current assets

Acid-Test ratio
0.3

0.2
0.2

0.1
0.1

2014 2015 2016 2017 2018

It shows the ratio of liquid assets of a firm againstt its current liabilities. Liquid assets of
company are much less than current liabilities, so it is liquidity problem for company
 Cash Ratio
0.3

0.2

0.1

0.0 0.0
2014 2015 2016 2017 2018

It shows the ratio of most liquid current assets(almost cash) toward current liabilities Most liquid
assets of company are much less than current liabilities so it is liquidity problem for company, so
company will be unable to pay its current liabilities in case of defaultation

Sales To Working Capital

250.0

60.7
28.9 25.6
-20.2
2014 2015 2016 2017 2018

It shows how much sales a firm is generating from its working capital. This ratio is decreasing
which means that company is generating less sales from its working capital this is bad for
company
LONG-TERM DEBT PAYING ABILITY:

Debt Ratio
0.5
0.5 0.4
0.4
0.3

2014 2015 2016 2017 2018

This ratio shows value of total liabilities against 1 unit of total assets, it shows a random trend,
but as a whole total liabilities are much less that total assets.

Debt To Equity Ratio

1.2

0.9
0.8
0.7

0.4

2014 2015 2016 2017 2018

This ratio shows value of total liabilities against 1 unit of equity, results show that liabilities are
almost equal to total assets so its satisfying
 Time Interest Earn
10.2
8.3
7.1
5.5
4.5

2014 2015 2016 2017 2018

This shows the ability of firm to pay its debts it is increasing so it is good for the firm

Cash Basis Times Interest

Earned
1.7

1.6 1.6
1.5
1.5

2014 2015 2016 2017 2018

It shows the percentage of net profit that firm is generating from its net sales. It is decreasing so
its not good for the firm

PROFITABILITY:
 Net Profit Margin
30% 29%

26% 26%
25%

2014 2015 2016 2017 2018

It shows the percentage of net profit that firm is generating from its net sales. It is decreasing so
its not good for the firm

Total Asset Turnover

0.7
0.6
0.6 0.6
0.5

2014 2015 2016 2017 2018

It shows the amount of sales generated by firm on the basis of total assets. It is decreased a little
bit but its still satisfactory
 Return On Assets

21%

16% 17%
15% 15%

2014 2015 2016 2017 2018

It shows the percentage of profit that firm is generating against its total assets. It is decreasing so
its not good for the firm

Operating Income Margin

14%
12%
10%
9%
7%

2014 2015 2016 2017 2018

It shows the percentage of operating income that firm is generating from its net sales. It is
decreasing so its not good for the firm
 Dupont Analysis

21%

16% 17%
15% 15%

2014 2015 2016 2017 2018

It shows the amount of sales generated by firm on the basis of total assets. It is decreasing so it is
not good for the company

Sales to Fixed Assets

1.2
1.0 1.1 1.0
1.0

2014 2015 2016 2017 2018

It shows the amount of sales generated by firm on the basis of fixed assets. It shows a balanced
trend over past 5 years, so it is good for firm.
 Return On Total Equity
33%
30% 30% 30%
26%

2014 2015 2016 2017 2018

It shows the percentage of net income that firm is generating against its total equity. It is
decreasing so its not good for the firm

Gross Profit Margin

46%
44%
39% 39%
36%

2014 2015 2016 2017 2018

It shows the percentage of gross profit that firm is generating from its net sales. It is decreasing
so its not good for the firm
 Return On Common Equity
152%
132% 131%
107%
95%

2014 2015 2016 2017 2018

It shows the percentage of net profit that firm is generating against common equity. It is
decreasing so its not good for the firm

Return On Investment
9% 9%

7% 7%

5%

2014 2015 2016 2017 2018

It shows the percentage of return that firm is generating against total liabilities and equity. It
increased in start but then decreased so its not good for the firm
FOR INVESTOR:

Degree of financial leverage

10.2
8.3
7.1
5.5
4.5

2014 2015 2016 2017 2018

It shows that how many times a company can pay its interest expenses from its EBIT. It is
increasing so it’s a good sign for firm.

EPS

9.6 9.5
8.6
7.0
6.2

2014 2015 2016 2017 2018

It shows how much an investor is earning against his one share. It is increasing so it is good for
firm and investor also
 P/E ratio
11.0

8.3 8.6
7.1
5.9

2014 2015 2016 2017 2018

It shows how much an investor can invest in order to earn 1 ruppee from firm. This is increasing
but decreased by a higher percentage in last year so it’s a good sign for investors

% Of RE
62%

48% 46%
43%
39%

2014 2015 2016 2017 2018

it shows how much percentage of net income a firm is saving after paying its dividends, it show
a random trend but the percentage is of saving is not satisfactory.
 Dividend Payout
0.6 0.6
0.5 0.5

0.4

2014 2015 2016 2017 2018

it shows the percentage of net income that firm is paying to its investors, it also shows random
trend but it is good for investors because firm is paying them almost half of its earnings.

Dividend yield
9%
9%

7%

5% 5%

2014 2015 2016 2017 2018

it shows the percentage of dividend that firm is paying against market price of shares it decreased
but then again it increased so it is a good trend for investors.
 Book Value per share

38.6
34.6
30.4
26.4
20.7

2014 2015 2016 2017 2018

it shows the book value of shares of equity for which investors have invested, it is increasing so
it is a good sign for investors.