financial analysis of fauji cement ltd
DESCRIPTION
contact:0333-6836340TRANSCRIPT
Fauji Cement Company Limited
INTERNATIONAL ISLAMIC UNIVERSITY ISLAMABAD
Group Members:
Muhammad Farooq (0333-8636340)Muhammad Khalil Hussain (0333-9835303)Muhammad AhsanMBA 19 (B)
GRADUATE SCHOOL OF BUSINESSINTERNATIONAL ISLAMIC UNIVERSITY
ISLAMABAD
Fouji Cement Company Ltd.The company was constructed on 23-11-1992 It is established by Fauji Foundation Its ordinary shares are 951,300,813 Its preference shares are 48,699,187Competitors: Lucky Cement, DGK, Maple Leaf,Attock Cement &
Askari Cement
Major Share Holders
Fauji Foundation 31.66%
Fauji Fertilizers 12.64%
UBL 15.72%
General Public 13.45%
Other JS companies 12.26%
INDUSTRY (2008)Domestic dispatches=22,395,522TonsExports(Tons) = 7,716,620 TonsTotal Dispatches= 30,112,142TonsCapacity Utilization= 81.04%
GROWTHDomestic despaches=6.47%Exports(Tons) = 142.02%Total Dispatches= 24.31%Capacity Utilization= 1.21%
FAUJI CEMENT(2008)Domestic dispatches=899,405TonsExports(Tons) = 278,095 TonsTotal Dispatches= 1,177,500TonsCapacity Utilization= 101.03%
GROWTHDomestic dispatches=6.39%Exports(Tons) = 82.63%Total Dispatches= 3.01%%Capacity Utilization= 3.01%
Qualitative Analysis
FCCL has earned profit after tax of Rs.414 million in 2008 but it has contributed towards national exchequer for Rs. 1,268 million in the form of taxes, & duties.
FCCL has earned USD 13.804 million through export%age share in export is 4%%age market share of FCCL is 6%Production level is 100.83% (Capacity= 1,165,500
M.Tones, Actual 1,174,722 M.Tons)FCCL is ISO 9001-2000 and 14001-2004 certifiedFuture outlook: New Plant of 7,200 tpd clinker in
parallel to the existing plantRefuse Derived Fuel Plant (RDF): cost 300 million,
capacity 12 tons per hourEarning Per Share is Rs. 0.85 per share and market
price per share is Rs. 16.06
Cost of Sales of Cement Industry
COST HEAD %AGE OF COST OF SALES
Cost of Raw material 10%
Cost of fuel 41%
Cost of power 18%
Cost of packing 9%
Other costs 22%
Raw Material: Lime Stone (Calcium Carbonate)75 to 80%, Clay15-20%, Iron ore, & Gypsum
Raw Material
Crusher stacker & Reclaimer
Roller Press
Grinding Mill
Lime Stone 80%, Clay 20%, Iron Ore
Rotary Kiln (1200-1450C)
Clinker Cooling
Clinker (120C)
Clinker Storage
Roller Process
Add Gypsum
Cement Mill
Storage Silo
Packing Unit
Bulk/Paper/ Hope Bags
Dispatch To Consumer
Manufacturing Process:
Analysis of Financial Statements
LIQUIDITY RATIOS:PROFITABILITY RATIO:ACTIVITY RATIO:LEVERAGE RATIOS:
LIQUIDITY RATIOS:CURRENT RATIO: Current Assets/Current Liabilities
Year 2008 2007 2006 2005 2004
Ratio 2.16 1.35 1.25 0.97 1.54
Quick Ratio:Year 2008 2007 2006 2005 2004
Ratio 2.06 1.23 1.13 0.93 1.38
CASH RATIO:
Year 2008 2007 2006 2005 2004
Ratio 1.54 0.29 0.67 0.50 0.53
PROFITABILITY RATIO:
Year 2008 2007 2006 2005 2004
Ratio 18.56% 31.52% 51.12% 38.01% 32.26%
GROSS PROFIT MARGIN
OPERATING PROFIT MARGIN Year 2008 2007 2006 2005 2004
Ratio 16.96% 28.74% 47.64% 34.75% 31.49%
NET PROFIT MARGIN Year 2008 2007 2006 2005 2004
Ratio 11.66% 18.66% 28.08% 17.94% 13.68%
RETURN ON ASSETS:
Year 2008 2007 2006 2005 2004
Ratio 4.83% 15.55% 32.95% 15.89% 12.23%
Year 2008 2007 2006 2005 2004
Ratio 6.30% 11.22% 11.71% 5.73% 1.92%
FINANCIAL CHARGE:
RETURN ON EQUITY:
Year 2008 2007 2006 2005 2004
Ratio 4.45% 17.30% 36.67% 20.84% 16.20%
THREE STEP DUPONT:
ROE=(NET PROFIT MARGIN) X (ASSET TURNOVER) X (EQUITY MULTIPLIER)ROE=(NET INCOME/SALES) X (SALES/ASSETS) X (ASSETS/ SHAREHOLDERS EQUITY)
ROE= 0.04 0.17 0.37 0.21 0.16
ACTIVITY RATIOS:
Year 2008 2007 2006 2005 2004
Ratio 0.28 0.54 0.69 0.46 0.039
ASSET TURNOVER RATIO:
AVERAGE SALES PER DAY= NET SALES / 365 DAYS
9,714.80 9,488.45 11,742.84 7,794.91 6,291.04
ACCOUNT RECIEVABLE TURNOVER:
Year 2008 2007 2006 2005 2004
35.57 90.51 5.99 5.91 11.7
A/R Turnover
35.57
90.51
5.99 5.91 11.7020406080100
2008 2007 2006 2005 2004
INVENTORY TURNOVER:Year 2008 2007 2006 2005 2004
Ratio 12.55 12.94 14.44 31.53 25.25
FIXED ASSET TURNOVER:Year 2008 2007 2006 2005 2004
Ratio 0.5 0.79 0.94 0.61 0.49
LEVERAGE RATIOS:
Year 2008 2007 2006 2005 2004
Ratio 0.25 0.42 0.47 0.61 0.67
DEBT RATIO:
DEBT/ EQUITY RATIO:
Debt/Equity Ratio
0.340.71 0.89
1.542.05
00.51
1.52
2.5
2008 2007 2006 2005 2004
Year 2008 2007 2006 2005 2004
Ratio 0.34 0.71 0.89 1.54 2.05
TIE RATIO:Year 2008 2007 2006 2005 2004
Ratio 4.23 4.93 7.88 5.1 10.36
Z- Score Model of Fauji Cement Company Limited
Z = 0.012x1 + 0.014x2 + 0.033x3 + 0.006x4 + 0.999x5
2,008 2,007 2,006 2,005 2,004
0.320 0.574 0.722 0.467 0.397
X1 = working capital/total assets
X2 = retained earnings/total assets
X3 = EBIT/total assets
X5 = sales/total assets
X4 = Market value of equity/book value of total debt