Project

FLYING CEMENT COMPANY

[ Ratio, Index, Trend, Common size analysis & Graphical representation ]

Submitted to:
Beloved Sir Usman Akmal

Submitted by:
Talha Nawaz Ahmed Sheikh, #796
Subject:
Financial Management
 Flying Cement
Table of Contents
Company Profile..................................................................................................................3
About:..............................................................................................................................3
Our Vision:......................................................................................................................3
Our Mission:....................................................................................................................3
Quality Policy:.................................................................................................................3
Ratio Analysis of company report (2014/2015/2016).........................................................4
Short term solvency ratios/liquidity ratios:......................................................................4
Current Ratio:..............................................................................................................4
Quick Ratio:.................................................................................................................4
Cash Ratio:...................................................................................................................5
Long Term Solvency Ratios/Leverage Ratios.................................................................5
Total Debt Ratio:.........................................................................................................5
Debt to Equity Ratio:...................................................................................................5
Equity Multiplier:........................................................................................................6
Interest Coverage Ratio:..............................................................................................6
Cash Coverage Ratio:..................................................................................................7
Asset Management Turnover Ratios...............................................................................7
Inventory Turnover Ratio:...........................................................................................7
Receivable Turnover Ratio:.........................................................................................8
Payable Turnover Ratio:..............................................................................................8
Macro Level Ratios..........................................................................................................9
Total Asset Turnover Ratio.........................................................................................9
Capital intensity Ratio:................................................................................................9
Profitability Ratios.........................................................................................................10
Gross Profit Margin:..................................................................................................10
Net Profit Margin:......................................................................................................10
Return on Assets:.......................................................................................................11
Return on Equity:.......................................................................................................11
Earning per share:......................................................................................................11
Book value per share:................................................................................................12
Index Analysis...................................................................................................................12
COMMON SIZE ANALYSIS...........................................................................................14
GRAPHICAL REPRESENTATIONS..............................................................................17
Company Profile
About:

Flying Cement Company is an integral part of Flying Group of Indus/tries,

which was founded in 1979 and since then it is extending its services to general public.
The company started its commercial production in January 2005 and produced &
marketed ordinary Portland Cement.

Our Vision:
“To be a premier quality cement manufacturing unit engaged in nation
building through the most efficient utilization of resources”

Our Mission:

“Successfully deliver quality cement by using innovative practices with the

ultimate goal of increasing the satisfaction of our customers”.
“To minimize the cost of production by using state-of-the-art technology and utilizing our
experience in increasing profits for our shareholders”.

Quality Policy:

The quality policy of the cement is monitored through the chemical laboratories located
at the site installed with latest instrumental analysis techniques directly linked through
PLC to control the process of manufacturing automatically keeping lowest variation
brand from the required values/parameters laid by the British Standards BS-12-1991.

Flying Cement Company is committed to produce high quality Ordinary Portland Cement
(OPC) as per International and British Standards to achieve customers' satisfaction.

The company is committed to abide by all applicable legal and regulatory requirements
and shall strive for continual improvements including prevention of pollution by
establishing and monitoring of its Quality and Environmental objectives.

The Chairman and Management are committed to communicate and maintain this policy
at all levels of the company, and achieve continual improvement through teamwork.
Below is the ratio analysis of flying cement for the year 2014-2015.

Ratio Analysis of company report (2014/2015/2016)

Short term solvency ratios/liquidity ratios:

Current Ratio:

Current Ratio = Current Assets = 0.57

(2016) Current Liabilities

Current Ratio = Current assets = 0.52

(2015) Current liabilities

Current Ratio = Current assets = 0.49

(2014) Current liabilities
Analysis:
The current ratio of the company has increase in 2016 as compared to 2015 by
0.05 points and has increased as compare to 2014 by 1.08 Points. The current ratio of the
company shows that liquidity position of the company is not very bad. The company
wants to increase its current assets.

Quick Ratio:

Quick Ratio = Current assets-Inventory = 0.45

(2016) Current Liabilities

Quick Ratio = Current assets-Inventory = 0.29

(2015) Current liabilities

Quick Ratio = Current assets-Inventory = 0.25

(2014) Current liabilities

Analysis:
 The Quick ratio of the company has increased in 2016 as compared to 2015 and
2014 because current liabilities is greater in 2016 as compare to 2015 and 2014. So
company needs to work on its current liability.

Cash Ratio:

Cash Ratio = Cash = 0.02

(2016) Current liabilities

Cash Ratio = Cash = 0.01

(2015) Current liabilities

Cash Ratio = Cash = 0.002

(2014) Current liabilities

Analysis
The cash ratio of the company has increased in 2016 as compared to 2015 and
2014 because the cash has increased quite significantly in 2016.

Long Term Solvency Ratios/Leverage Ratios

Total Debt Ratio:

Total Debt Ratio = Total Assets-Total Equity = 0.43

(2016) Total Assets

Total Debt Ratio = Total Assets-Total Equity = 0.42

(2015) Total Assets

Total Debt Ratio = Total Assets-Total Equity = 0.45

(2014) Total Assets

Analysis:
The total debt ratio of the company has increased in 2016 as compare to 2015
and decrease as compared to 2014 so it can be infer that the company is more relaying on
it own financing with comparison to last year so now it has less pressure of creditors.

Debt to Equity Ratio:

Debt to Equity Ratio = Total Debt = 0.76

 (2016) Total Equity

Debt to Equity Ratio = Total Debt = 0.75

(2015) Total Equity

Debt to Equity Ratio = Total Debt = 0.814

(2014) Total Equity

Analysis:
The debt to equity ratio of the company has decreased in 2016 as compared to
2015 and 2014 which means that company is now less relaying on others money so this
shows that company is now using their own money which helps company’s profit earning
or earning per share ratio.

Equity Multiplier:

Equity Multiplier = Total Assets = 1.76

(2016) Total Equity

Equity Multiplier = Total Assets = 1.77

(2015) Total Equity

Equity Multiplier = Total Assets = 1.81

(2014) Total Equity

Analysis:
The Equity Multiplier of the company has decreased in 2016 as compared to
2015 and 2014.The company has decreased it equity multiplier but was not able to
manage it functions properly therefore it is earning loss.

Interest Coverage Ratio:

Interest Coverage Ratio = Earnings before interest and tax = 27.88

(2016) Interest

Interest Coverage Ratio = Earning before interest & tax = 83.18

(2015) Interest
Interest Coverage Ratio = Earning before interest & tax = 4.61
(2014) Interest
Analysis:
The Interest Coverage ratio of the company has increased in 2016 as compared
to 2015 and 2014. In 2016 company’s profit before interest and tax is increased so that
they are able to pay so much as them before. The one cause of this increase is the
decrease in their expenses.

Cash Coverage Ratio:

Cash coverage ratio = EBIT+Depreciation = 59.40

(2016) Interest

Cash Coverage rat= EBIT+ Depreciation = 71.95

(2015) Interest
Cash Coverage Ratio = EBIT +Depreciation = 67.70
(2014) Interest
Analysis:
The Cash Coverage ratio of the company has increased in 2016 as compared to
2015 and 2014. The reason for this increase is the increase in cash ratio.

Asset Management Turnover Ratios

Inventory Turnover Ratio:

Inventory turnover ratio = Cost of goods Sold = 10.58

(2016) Inventory

Inventory Turnover Ratio = Cost of Goods Sold = 5.29

(2015) Inventory

Inventory Turnover Ratio = Cost of Goods Sold = 5.43

(2014) Inventory

Day’s sales in Inventory = 365 = 34.496

(2016) Inventory turnover ratio

Days sales in Inventory = 365 = 68.876

(2015) Inventory T/o Ratio

Days sales in Inventory = 365 = 67.106

(2014) Inventory T/o Ratio
Analysis:
The Inventory Turnover Ratio of the company has increased in 2016 as
compared to 2015 and 2014, so now company is more quickly converting its inventory
into sales. Its production and sale performance is increased in 2016. Firstly they were
converting the inventory 74 times and 82 times in 2014 and 2015 but now they are
converting it 291 times in a year 2016.

Receivable Turnover Ratio:

Receivable Turnover ratio = Sales = 5.17

(2016) Accounts Receivable

Receivable Turnover Ratio = Sales = 7.71

(2015) Account receivable

Receivable Turnover Ratio = Sales = 10.61

(2014) Account receivable

Days sales in receivable = 365 = 70.18

(2016) Receivable turnover Ration

Days sales in Receivable = 365 = 48.72

(2015) Receivable T/o Ratio

Days sales in Receivable = 365 = 35.34

(2014) Receivable T/o Ratio

Analysis:
The Receivable Turnover Ratio of the company has decreased in 2016 as
compared to 2015 and 2014 this is why the company debt to equity ratio is increased
because increase in debts borrowing and then increase in credit sale which is not a good
thing for company because now company is taking more time to recover its debts as
compared previous year. Now outsiders are using company’s finances not the company.

Payable Turnover Ratio:1

1
Payable turnover ratio = Cost of goods sold = 1.441
(2016) Accounts Payable

Payable Turnover Ratio = Cost of goods Sold = 1.333

(2015) Account Payable

Payable Turnover Ratio = Cost of goods Sold = 1.5072

(2014) Account Payable

Day’s sales in Payable = 365 = 253.125

(2016) Payable turnover ratio

Days sales in Payable = 365 = 273.74

(2015) Payable T/o Ratio

Days sales in Payable = 365 = 242.15

(2014) Payable T/o Ratio

Analysis:
The Payable Turnover Ratio of the company has decreased in 2016 as
compared to 2015 and has increased as compare to 2014. This is because company wants
to increase its creditability. So this shows the weakness of the company increase in
receivable turnover and decrease in payable turnover.

Macro Level Ratios

Total Asset Turnover Ratio

Total Asset Turnover ratio = Sales = 0.39

(2016) Total Assets

Total Asset Turnover Ratio = Sales = 0.36

(2015) Total Assets

Total Asset Turnover Ratio = Sales = 0.34

(2014) Total Assets
Analysis:
Now assets are less battery used by the company in 2016 as compare to 2015 and 2014.
So that the turnover is decreased.
Capital intensity Ratio:

Capital intensity Ratio = Total Assets = 2.55

(2016) Sales

Capital intensity Ratio = Total Assets = 2.73

(2015) Sales

Capital intensity Ratio = Total Assets = 2.912

(2014) Sales

Analysis:
The capital intensity ratio is increased in 2016 as compare to 2015 and 2014. So it
signifies that now more assets are required to generate the sale if one rupees.

Profitability Ratios

Gross Profit Margin:

Gross Profit Margin = Gross Profit *100 = 0.06

(2016) Sales

Gross Profit Margin = Gross Profit *100 = 0.05

(2015) Sales

Gross Profit Margin = Gross Profit *100 = 0.05

(2014) Sales

Analysis:
The Gross Profit Margin of the company in increased in 2016 as compare to
2015 and 2014 because Sales increased with more value than the cost of goods sold.

Net Profit Margin:

Net Profit margin = Net Profit *100 = 0.05

(2016) Sales

Net Profit Margin = Net Profit *100 = 0.05

(2015) Sales
Net Profit Margin = Net Profit *100 = 0.04
(2014) Sales

Analysis:
The net Profit Margin of the company has decreased in 2016 as compared to
2015 and has increased as compare to 2014 because ADMN and selling expenses has
been increased.

Return on Assets:

Return on Assets = Net profit *100 = 0.02

(2016) Total Assets

Return on Assets = Net Profit *100 = 0.02

(2015) Total Assets

Return on Assets = Net Profit *100 = 0.01

(2014) Total Assets

Analysis:
The Return on Assets of the company has decreased in 2016 as compared to
2015 and has increased as compare to 2014 because now they are using their assets
efficiently and cost of finance is increased.

Return on Equity:

Return on Equity = Net profit *100 = 0.04

(2016) Total Equity

Return on Equity = Net Profit *100 = 0.034

(2015) Total Equity

Return on Equity = Net Profit *100 = 0.03

(2014) Total Equity

Analysis:
The Return on Assets of the company has decreased in 2016 as compared to
2015 and 2014 because finance cost is increased. Debt to equity ratio is also increased.

Earning per share:

 Earnings per share = Net Profit = 7.86
(2016) No. of shares outstanding

Earnings per share = Net Profit = 5.84

(2015) No. of shares outstanding

Earnings per share (2014) = Net profit = 5.01

No. of Shares outstanding
Analysis

The return on equity is also effect on earnings per share. This increases in 2016.

Book value per share:

Book value per share = Total Equity = 178.81

(2016) No. of shares outstanding

Book value per share = Total Equity = 171.34

(2015) No. of shares outstanding

Book value per share = total equity = 165.49

(2014) No of shares outstanding
Analysis
This shows that the company book value is increasing in 2016 as compare to
2015 and 2014 because the reserve kept by the company is increasing.

Index Analysis

INCOME STATEMENT

INCOME
STATEMEN
T                
   
  2016 2015 2014 2015 2016
247577792 222279781 206456979 111.381
Sales 7 6 1 107.664 2
- - -
230906345 210318511 195859153 107.382 109.788
Cost of goods sold 0 3 5 5 9
112.865 139.378
Gross Profit 166714477 119612703 105978256 3 6
   
   
Operating expenses  
Distribution expenses -5199911 -4788441 -3577763 133.839 108.593
135.556 104.092
Administrative expenses -26394127 -25356493 -18705521 2 2
104.100
Other Expenses -15252023 -14651219 -12079497 121.29 7
- - -
46,846,061 44796153 -34362781 130.362 104.576
119,868,41 104.469 160.216
Operating profit 6 74816550 71615475 8 4
   
6.19730
Finance cost -2915487 -1417342 -22870285 8 205.701
112.066 68.1724
Other income before taxes 78381977 114976074 102596695 1 2
195,334,90 103.694
  6 188375282 151341885 124.47 6
- 139.732 69.6983
Taxtation 49,653,438 -71240471 -50983546 3 6
   
145,681,46 116.716 124.370
Profit after taxation 8 117134811 100358339 6 8

BALANCE SHEET

INDEX INDEX
2015 2016
   
98.65728694 102.2926995
100 44.48852396
 98.66792296 101.8286342
   
109.5810576 151.8121318
110.2151425 54.98650673
124.1786352 17.59245182
141.8540508 166.4378778
669.7206495 190.490966
121.6590216 113.7139945
101.4834746 103.5735124
   
   
   
100 100
100 100
-278.7920539 262.7997973
108.6234559 109.5124222
98.03401943 97.94669138
103.5343398 104.2494027
   
   
42.74439087 137.2301835
   
100 103.8445746
104.3281548 101.1575592
72.33362012 112.2562002
   
121.3452472 101.5575981
10.61441506 253.003712
105.6407264 141.9390297
   
100 0
310.2224783 103.6945524
114.190268 103.2743288
95.63223646 106.2864343
   
101.4834746 103.5735124
 COMMON SIZE ANALYSIS

BALANCE SHEET

Analysis Analysis Analysis

2016 2015 2014
83.58753107 84.63413545 87.0586087
0.294215439 0.684961508 0.695122738
83.88174651 85.31909696 87.75373143

4.325987691 2.95139614 2.733300278

3.453235475 6.504572641 5.989255359
0.017706164 0.10424298 0.085191304
7.58790189 4.721915834 3.378094762
0.733422269 0.398775449 0.060426863
16.11825349 14.68090304 12.24626857
100 100 100

31.64770693 32.77864166 33.2649045

27.8499821 28.84520466 29.27311596
4.541869786 1.790021954 -0.651588326
32.39185188 30.63522662 28.62152764
24.19188605 25.58165646 26.4817805
56.58373793 56.21688307 55.10330814

5.762848446 4.34946919 10.32648348

0.213706521 0.21314869 0.216310697

9.401035209 9.625560801 9.363103923
15.37759018 14.18817868 19.9058981

25.33913071 25.84211144 21.61227838

0.427868421 0.175158834 1.674677974
1.74621111 1.274217659 1.224073706
 0.303563132 0.308066414
0.525461658 0.5248483 0.171694293
28.0386719 28.11989937 24.99079077
43.41626207 42.30807805 44.89668887

100 100 100

INCOME STATEMENT

Analysis
2016 2015 2014
100 100 100
-
-93.26617807 94.61882218 -94.86681165
6.733821931 5.381177817 5.133188351
   
   
   
-
-0.210031398 0.215424046 -0.173293391
-
-1.066094285 1.140746712 -0.906025124
-
-0.616049721 0.659134128 -0.585085428
-1.892175404 2.015304886 -1.664403943
4.841646526 3.365872931 3.468784408
   
-
-0.117760441 0.063763874 -1.107750636
3.165953462 5.172583542 4.969398247
7.889839548 8.474692599 7.330432018
-
-2.005569137 3.204991047 -2.469451322
    
5.884270411 5.269701552 4.860980696
   
4.48344E-08 4.81375E-08 4.16552E-08
3.35248E-08 3.01422E-08 2.76087E-08

GRAPHICAL REPRESENTATIONS

Gross Profit
 GP

2014

2015

2016

0 20000000 40000000 60000000 80000000 100000000 120000000 140000000 160000000 180000000

Operating Expenses
 OP

2014

2015

2016

0 5000000 10000000 15000000 20000000 25000000

Net profit

Net Profit

2014

2015

2016

0 2 4 6 8 10 12 14 16

Balance Sheet
 BALANCE SHEET

2014

2015

2016

0 2000000000 4000000000 6000000000 8000000000 10000000000

Total Asset Total Liabilities Total Equity

Income Statement

Net Income

1 2 3
 Gross Profit

2016 2015 2014

INCOME STATEMENT

Net Income

Gross Profit

2016 2015 2014