rananjay 1

8/21/2019 RANANJAY 1

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Chapter 1

Introduction

1.1Overview- Ratios

1.2Companies for Analysis

1.3Objective !cope of

Researc" !tudy

1.#$imitation of !tudy

1.%Researc" &et"odolo'y


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omparative analysis is an important tool of analy(in' and evaluatin' t"e

performance and prospects of a firm. )"e analysis and interpretation of financial

statements is used to determine t"e financial position and results of operations a well.*inancial statements are prepared primarily for decision-ma+in'. )"ey play a dominant

role in settin' t"e framewor+ of mana'erial decisions. ,ut t"e information provided in

t"e financial statements is not an end in itself as no meanin'ful conclusions can be

drawn from t"ese statements alone.

C

owever t"e information provided in t"e financial statements is of immense use in

ma+in' decisions t"rou'" analysis and interpretation of financial statements. *inancial

analysis is /t"e process of identifyin' t"e financial stren't"s and wea+nesses of t"e firm

by properly establis"in' relations"ip between t"e items of t"e balance s"eet and t"e

profit and loss account.0

1.1 Ratios

)"e most prevalent met"od of comparative analysis is t"rou'" ratio analysis. )"e ratio

analysis can be for a sin'le year or it may etend to more t"an one year. )"e ratios can

also be compared wit" similar ratios of ot"ers concerns to ma+e a comparative study.

*irst all ratios will be wor+ed out for eac" year and eac" set of comparable

items.

)"e ratios wor+ed out will be put in t"e contet of a trend over several years.

)"ey will be compared wit" similar companies standard ratios.

i. *or t"e year concerned and

ii. Over a period of time.


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Types of Ratio

1. Liquidity Ratio

i). Current Ratio

)"e ratio is wor+ed out by dividin' t"e current assets of t"e concern by its currentliabilities. Current ratios indicate t"e relation between current assets and current

liabilities. Current liabilities represent t"e immediate financial obli'ations of t"e

company. Current assets are t"e sources of repayment of current liabilities. )"erefore

t"e ratio measures t"e capacity of t"e company to meet financial obli'ation as and

w"en t"ey arise. )etboo+s claim a ratio of 1.% to 2 is ideal bit in practice t"is is rarely

ac"ieved. )"is ratio is also +nown as wor+in' capital ratio.

ii). Acid Test Ratio

4uic+ assets represent current assets ecludin' stoc+ and prepaid epenses. !toc+ is

ecluded because it is not immediately reali(able in cas". 5repaid epenses are

ecluded because t"ey cannot be reali(ed in cas". A minimum of 16 1 is epected w"ic"

Figure 1 Functional Classification


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indicates t"at t"e concern can fully meet its financial obli'ations. )"is also called as

$i7uid ratio or 4uic+ ratio.

2. Activity Ratios

i). Debtors Turnover Ratio

)"e ratio obtained s"ould be compared wit" t"at of ot"er similar units. If t"e ratio of t"e

company bein' studied is 'reater 8say 19 wee+s as a'ainst : wee+s for t"e industry; it

indicates t"at t"e company is allowin' lon'er t"an t"e usual credit periods. )"is may be

justified in t"e case of new companies or eistin' companies enterin' into new ventures

ii). Creditors Turnover Ratio

)"is ratio s"ows "ow fre7uently company is payin' to its creditor.


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i). Debt#$quity Ratio

Also +nown as eternal - Internal e7uity ratio is calculated to measure t"e relative

claims of outsiders a'ainst t"e firm0s assets. )"is ratio indicates t"e relations"ip

between t"e eternal e7uities or t"e e7uities or t"e outsider0s funds and t"e internal

e7uities or t"e s"are"older0s funds.

ii). nterest Coverage Ratio

i'"er t"e ratio better is t"e covera'e. )"e firm may not fail on its commitments to pay

interest even if profits fall substantially.

%. &rofitability Ratios

i). 'ross &rofit Ratio

A comparison wit" t"e standard ratio for t"e industry will reveal a picture of t"e

profitability of t"e concern. Also t"e ratio may be wor+ed out for a few years and

compared to verify if a steady ratio is maintained.

ii). (et &rofit Ratio

)"is ratio serves a similar purpose as and is used in conjunction wit" t"e 'ross profit

ratio.

iii). Return on Assets

)"is ratio measures t"e profits of t"e concern as a percenta'e of t"e total assets. *or

t"e purpose of t"is ratio t"e operatin' profit is calculated by addin' bac+ to net profit6

81; Interest paid on t"e lon' term borrowin's and debentures 82; Abnormal and non-

recurrin' losses 83; Intan'ible assets written off. !imilarly from t"e net profit abnormal

and non-recurrin' 'ains are deducted. )"e idea is to 'et profit 'enerated out of total

investments made.

iv). $arning &oer


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=arnin' power is a measure of business performance w"ic" is not affected by interest

c"ar'es and ta burden. It abstracts away t"e effect of capital structure and ta factor

and focuses on operatin' performance. ence it is eminently suited for inter-firm

comparison. *urt"er it is internally consistent. )"e numerator represents a measure of

pre-ta earnin's belon'in' to all sources of finance and t"e denominator represents

total financin'.

v). Return on Capital $*ployed

ROC= is t"e post-ta version of earnin' power. It considers t"e effect of taation but

not t"e capital structure. It is internally consistent. Its merit is t"at it is defined in suc" a

way t"at it can be compared directly wit" t"e post-ta wei'"ted avera'e cost of capital

of t"e firm.

vi). Return on $quity

)"e return on e7uity measures t"e profitability of e7uity funds invested in t"e firm. It is

re'arded as a very important measure because it reflects t"e productivity of t"e

owners"ip capital employed in t"e firm.

+. ,aluation Ratios

>aluation ratios indicate "ow t"e e7uity stoc+ of t"e company is assessed in t"e capital

mar+et. !ince t"e mar+et value of e7uity reflects t"e combined influence of ris+ and

return valuation ratios are t"e most compre"ensive measures of a firm0s performance.

i). &rice $arnings Ratio

)"e 5= Ratio is a summary measure w"ic" primarily reflects t"e followin' factors6'rowt" prospects ris+-c"aracteristics s"are"older orientation corporate ima'e and

de'ree of li7uidity.

ii). $,#$-DTA Ratio


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=> is t"e sum of t"e mar+et value of e7uity and t"e mar+et value of debt. )"e mar+et

value of e7uity is simply t"e number of outstandin' e7uity s"ares times t"e price per

s"are. As far as debt is concerned if it is in t"e form of loans its mar+et value "as to be

imputed. ?enerally a rupee of loan is deemed to "ave a rupee of mar+et value.

=>-=,I@)A is supposed to reflect profitability 'rowt" ris+ li7uidity and corporate

ima'e.

1.2 Co*panies for Co*parative Analysis

,ein' a mana'ement trainee of 5rism Cement $td it is a comparative analysis of 5rism

Cement $td wit" AB5== Cement $td. ,efore 'oin' on deep "ere is company profile in

brief.

1.2.i. &ris* Ce*ent Ltd

5rism Cement $td. Is an I!O 99162999 certified professionally mana'ed company

promoted by t"e Rajan Ra"eja ?roup. )"e company operates one of t"e lar'est sin'le

+iln cement plants in t"e country at !atna &ad"ya 5rades". )"e company "as also a

pac+in' unit at Alla"abad


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5rism "as successfully establis"ed a "i'" brand preference amon'st its customer

t"rou'" its ecellent 7uality products and transparent policy. 5rism "as truly ta+en

cement production to 'lobal standards.

Revie of operation and future outloo

5roduction of clin+er and cement re'istered a 'rowt" of %.#%E and .29E

respectively.

!ales of cement and clin+er increased from 2:.3 $a+" tones durin' t"e year

299:-9F to 39.:# la+" tones durin' t"e year 299F-9G an increase of 13.FGE.

Revenues increased by 1%.#2E to Rs. 191.F% Crores durin' t"e year under

review from Rs. GG3.#G Crores durin' t"e previous year.

5A) for t"e year ended une 39 299G at Rs. 2#1.:3 Crores was "i'"er by Rs.

#G.G: Crores re'isterin' a increase of 2%E

5ower consumption down by %.F%E to :G.9G unit0s +s" per ton cement.

1.2.ii. /A0&$$ Ce*ent Ltd

.H. Cement is an affiliate of t"e .H. Or'ani(ation w"ic" was founded by $ala

Hamlapat !in'"ania. )"e .H. Or'ani(ation is an association of industrial and

commercial companies and "as operations in a broad number of industries.

AB5== cement operations commenced commercial production in &ay 1F% at its first

plant at Dimba"era in t"e state of Rajast"an. At Dimba"era it started wit" a sin'le +iln

wit" a production capacity of 9.3 million tons. AB5== Cement $td added a second +iln

in 1F wit" production capacity of 9.#2 million tons and a t"ird +iln in 1G2 wit" a

production capacity of 9.#2 million tons. )"ey added a precalciner wit" a capacity of 9.#

million tons in 1GG w"ic" increased t"eir capacity at Dimba"era to 1.%# million tons.

@urin' t"e years 1G t"rou'" 2993 it continued to implement modifications to eac" of

t"eir +ilns w"ic" increased t"eir a''re'ate capacity at Dimba"era to 2.G million tons as

of !eptember 39 299%.


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AB5== commissioned a second 'rey cement plant at &an'rol plant in 2991 wit" a

production capacity of 9.F% million tons. As of !eptember 39 299% it "ad an a''re'ate

production capacity of 3.%% million tons per annum of 'rey cement. AB5== w"ite

cement plant was completed in 1G# wit" a capacity of %9999 tons. )"eir continuin'

modifications to t"e plant "ave increased its production capacity to 399999 tons as of

!eptember 39 299%.

)oday . H. Cement $td. is one of t"e lar'est cement manufacturers in Dort"ern India.

)"ey are also t"e second lar'est w"ite cement manufacturer in India by production

capacity. "ile t"e 'rey cement is primarily sold in t"e nort"ern India mar+et t"e w"ite

cement enjoys demand in t"e eport mar+et includin' countries li+e !out" Africa

Di'eria !in'apore ,a"rain ,an'lades" !ri $an+a Henya )an(ania


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1.". bective 3 4cope of 4tudy

)"e study deals in brief to evaluate and analy(e various aspects of company0s financial

position li7uidity position and lon' term solvency position so as to present a clear

picture of performance. )"is study is only based on Annual reports of company by

comparin' t"e ratios of last % years. A study li+e t"is will "elp t"e or'ani(ation to ma+e

decisions based on t"e current performance. )"is study also 'roomed me as I

interacted wit" more industry people and also 'ave me a 'ood industry eposure. )"e

study will also "elp 5rism Cement $td to increase its efficiency by findin' out its

!tron'est ea+est points. )"is study focus on comparative analysis ratio analysis

of 5rism cement $td wit" AB5== Cement $td. &ain objective of t"is researc" are as

follows-

)o find out t"e company solvency position in lon' term t"at w"ic"

company is more solvent and able to pay its lon' term liabilities in time.

)o find out debt-e7uity mi in capital structure of company its financial

levera'e its eternal and internal liability etc. )"is will "elp to find out t"at

w"ic" company is optin' optimum capital structure as per nature of itsbusiness.

)o find out t"e profitability position of t"e company t"eir ?5 &ar'in D5

mar'in =arnin' 5ower etc.

)o find out t"e s"ort term solvency position of company i.e. $i7uidity

current ratio wor+in' capital ratio etc. )"is will "elp to find out t"e ability

of firm to meet its current liabilities and perform day to day operation.

)o find out t"e benefits provided by company to its s"are"olders =arnin'

per s"are @ividend @eclared corporate social responsibilities etc.


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1.%. Li*itation of t5e 4tudy6

$imitations are difficulty faced or can be face w"ile doin' study. )"ese can be

normal limitation li+e- bud'et constraints time constraint w"ic" are common for

every project. ,ecause time and money are always limited and we cannot spend in

"u'e amount. !o t"is is first constraint to finis" study in time and wit"in bud'et.

Apart from t"ese limitations ot"er are- )ec"nical $imitation. )"ese limitations are

related wit" constraint of tool or met"od used for analysis. As t"is is project is totally

based on secondary data. !o t"e main limitation w"ic" can be faced are6

!tudy is only based on annual report of company w"ic" is not sufficient to

compare performance efficiency of company.

Information available in annual report is also altered w"ic" is not so accurate.


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1.+. Researc5 7et5odology

Type of Data6 # )"ere are two types of data6 5rimary @ata and !econdary @ata.5rimary data are t"ose data w"ic" are collected first time to meet t"e objective of

researc" only. !econdary data is data w"ic" "as been already used for any ot"er

purpose and can be used for t"is researc". As t"is study is based on financial

statements of companies means !econdary @ata.

7et5od of Data collection6 #*or collectin' secondary data Annual report of company

will use as well as financial reports available on various stoc+ mar+et websites.

Data Analysis 3 nterpretation6 #Collected data will we present wit" t"e "elp of-

o )able- )o represent data in tabular form. It is easy to analyse data and

ma+e some conclusion

o ,ar 'rap"-


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Chapter 2

5rism Cement $td

AB5== Cement $td

2.1.9 5rism Cement $td

2.1.1 Company >ision &ission

2.1.2 *eatures

2.1.3 Corporate !ocial Responsibility

2.1.# Current 5erformance

2.2.9 AB5== Cement $td

2.2.1 5lants

2.2.2 Corporate !ocial Responsibility


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rism Cement $td and AB5== Cement $td bot" are player of cement industry.

,ot" t"e companies are tar'etin' Dort"ern re'ion of our country. Alt"ou'"

AB5== cement is major player as compare to 5rism Cement $td because it is

operatin' from last 3# years on t"e ot"er "and 5rism Cement $td is operatin' from only

1% years. ,ut 5rism "as performed very well and ac"ieved milestones in very less time.

*or t"is researc" study we are considerin' t"e performance of last four financial years

of bot" t"e company. ,efore analy(in' t"eir performance let0s see t"e company

important aspects in deep.

5

2.1.8 &ris* Ce*ent Ltd

5rism Cement $td. Is an I!O 99162999 certified professionally mana'ed company

promoted by t"e Rajan Ra"eja ?roup. )"e company operates one of t"e lar'est sin'le

+iln cement plants in t"e country at !atna &ad"ya 5rades". )"e company "as also a

pac+in' unit at Alla"abad


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2.1.1 ,ision 3 7ission

,ision

JTo be acknowledged as a leading player in the industry with the highest level ofintegrity.

7ission6#

!tate of t"e art cement plants

)ransparent dealin's wit" all sta+e"olders

Committed to t"e principles of 'ood corporate 'overnance

2.1.2. Features

)"e entire cement manufacturin' process at all prism cement plant represents

t"e latest relevant state-of-t"e-art tec"nolo'y.

Our all plant e7uipment are supplied by &! *.$. !midt" Co. @enmar+ and its

subsidiaries >entomatic Hrupp Industries $td. A,, !eimens and Crompton

?reaves.

Computeri(ed minin' activities usin' t"ree dimensional ima'in' for optimum

blendin' of raw material.

)"e vertical roller press mill for efficient 'rindin' of raw meal.

!i sta'e low pressure drop pre-"eater for lower power consumption.

Online computeri(ed 7uality control by -ray spectrometer to ensure raw meal

control and consistency from raw meal to final product cement.

*u((y lo'ic control for +iln and cement mill to ensure instantaneous corrective

response t"rou'" computer based control system.


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A Combination of roller press and ball mill for improved finis" 'rindin' of cement

4uality 'rindin' t"rou'" closed circuit 'rindin' system

5ollution control system e.'. =!5 and ba' filters for all plant buildin' to meet

strin'ent pollution control re7uirement.

2.1." Corporate 4ocial Responsibility

*or prism corporate social responsibility is not just a pro'ram but it is t"e way business

is done every day. )"e company "as always been conscious of its social obli'ation and

"as initiated welfare pro'rammes for t"e benefit of its employees and villa'ers livin'

near t"e plant by providin' t"e basic facilities and a better way of livin' ri'"t from its

inception.

,esides providin' emer'ency and basic medical facilities to its employees and

contractors and t"eir families at t"e plan a mobile medical van provides free medical

aid to t"e villa'ers and t"eir families.

Operations of a cement plant "ave in"erent potential to emit dust and 'ases t"at mayaffect air 7uality ne'atively. At prism t"e installation of pollution control e7uipment of

international standard are in place to improve air 7uality at and around t"e operations.

ater mana'ement and water 7uality remain t"e +ey focus areas of t"e mana'ement.

)"e 7uality of bot" surface and 'round ware is monitored re'ularly to ensure t"at t"e

minin' and plant operations do not pollutes t"e water resources of t"e communities

livin' around t"e minin' and plant area.

In reco'nition of t"e above t"e company was awarded t"e ener'y conservation award

by t"e 'overnment of India ministry of power for t"e year 299:. )"e company was also

awarded t"e 1st pri(e for environment mana'ement by t"e 'overnment of &ad"ya

5rades" ministry of environment announced in 299F.


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2.1.% Current &erfor*ance

5rism cement posted a profit after ta 85A); of Rs. 2.#2 billion for t"e year ended une

39 299G as a'ainst Rs. 1.3 billion for t"e previous year ended une 39 299F

re'isterin' a 'rowt" of 2%E.

!ales 'rew 1%E from Rs. G.G3 billion to Rs. 19.2 billion in t"e same period crossin' t"e

Rs. 19 billion mar+ for t"e first time. )"e company is debt-free and "as li7uid investment

of over Rs. 2.%1 billion as on une 39 299G.

)"e si'nificant 'rowt" in net profits is driven by increase in sales volume. Improve

reali(ations and reduced finance c"ar'es despite increase in input costs. ,lended

cement contributed to GFE of sales t"e company said in a release.

)"e company caters mainly to mar+ets of eastern


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2.2.1 &lants

AB5== Cement manufactures 'rey cement in two facilities located at Dimba"era and

&an'rol in t"e state of Rajast"an in Dort"ern India. "ite cement is produced at our

facility at ?otan in t"e state of Rajast"an. Our plants "ave obtained many accolades

and reco'nition t"e most notewort"y bein' 6 I!O-99162999 4&! and I!O-1#9916299#

=&! for t"e 'rey cement facility at Dimba"era and I!O-99162999 4&! I!O-

1#99161G =&! O!A!-1G9916299% Occupational ealt" and !afety for t"e w"ite

cement facility at ?otan. )"e construction of our first most modern dry cement plant

be'an in 1F9 in Dimba"era in Rajast"an.

)"e followin' table s"ows a brea+down of production of t"e Dimba"era &an'rol and

?otan cement facilities for t"e periods indicated

2.2.2 Corporate 4ocial Responsibility

AB5== Cements "as performed various activities to build its ima'e as well as fulfill its

corporate social responsibility. !ome important ones are as follows.

Concrete Road wit" proper draina'e system at ?otan villa'e

!ponsors"ip of annual =ye camps at ?otan

!treet $i'"t for ?otan villa'e )ree plantation alon' t"e road leadin' to ?otan

Or'ani(in' !ocial event for residents of $ocal area

*undin' )ec"nical support for Infrastructure projects of $ocal

Community

)ube ell K to provide drin+in' water for villa'ers

)emple 8Renovation of two old temples;

@"arams"ala 8Inn; at ?otan >illa'e

*ree education to t"e wards of Har'il war "eroes *ree bus service for students of nearby villa'es

,uildin' for 'irls sc"ool at ?otan villa'e


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Chapter 3

5erformance Analysis

of 5rism Cement $td

wit" AB5== Cement

$d

3.1 ,alance !"eet of

Companies

3.2 5$ of Companies

3.3 Ratio Analysis

Interpretation


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inancial statements are an important source of information for evaluatin' t"e

performance and prospects of a firm. If properly analy(ed and interpreted financial

statements can provide valuable insi'"ts into a firm0s performance. *inancial statementanalysis may be done for a variety of purposes w"ic" may ran'e from a simple analysis

of t"e s"ort-term li7uidity position of t"e firm to a compre"ensive assessment of t"e

stren't"s and wea+nesses of t"e firm in various areas.

*

".1 -alance 45eet of Co*panies

)"e balance s"eet s"ows t"e financial condition of a business at a 'iven point of time.

As per t"e Companies Act t"e balance s"eet of a company s"all be in eit"er t"e

account form or t"e report form. )able 3.1 s"ows balance s"eet of 5rism Cement $td

)able 3.2 s"ows balance s"eet of AB5== Cement $td.

".2 &3L of Co*panies

5rofit $oss account also +nown as income statement of a company depicts all t"e

information re'ardin' Income and ependiture of company. )able 3.3 s"ows 5$ of

5rism Cement $td and )able 3.# s"ows 5$ of AB5== Cement $td.


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&ris* Ce*ent Ltd 9-alance 45eet)

Accounting &eriod 9Rs. n Lacs)

288+#8: 288:#8; 288;#8< 288s Fund

Capital 2G.2% 2G.2% 2G.2% 2G.2%Reserve !urplus -##.9 112.F 31.%2 3:3.#9

2%3.3% #11.22 :1F.FF ::1.:%

Loan Fund

!ecured $oan 199.2F 9.99 9.99 9.99


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nvest*ent 9.99 1%1.


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/A0&$$ Ce*ent Ltd 9-alance 45eet)

Accounting &eriod 9Rs. n Lacs)

288+#8: 288:#8; 288;#8< 288s Fund

Capital :.3 :.3 :.3 :.3Reserve !urplus :9#.3% F%9.1G G3.#1 111:.13

:F#.2F G29.11 19%3.3#11G:.9

:

Loan Fund

!ecured $oan ##3.1# #2.# 3G2.F #3:.G:


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=+%.


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Table ".2 -alance 45eet of /A0&$$ Ce*ent Ltd

&ris* Ce*ent &3L

299%-9: 299:-9F 299F-9G 299G-9

nco*e

?ross !ales :FG.1G GG3.#G 191.F%

F21.#

1

$ess6 =cise @uty 19:.## 11:.:G 1#3.39 #.1F

Det !ales %F1.F# F::.G9 GF:.#%:2F.2

#

Ot"er Income -1.GF #.:2 1%.2 .3

Total %:.GF FF1.#2 G2.3F:3F.1

F

$!penditure

&anufacturin' =penses 391.%# 313.: 3G2.% 32F.%F

5ersonal =pense 1.#9 23.GG 3%.#3 2F.#2

!ellin' Administration and ot"er epenses .9 #29.G# G.1 #3:.F% 121.%9 %3.GG 192.3%#%F.3

#

&rofit before finance c5arge 3 Depreciation 1#.93 33#.:F 3%2.#1F.G

3

Interest Ot"er C"ar'es 1G.G# %.G9 3.21 3.2%

$ease Rental :.%9 2%.3# 9.G1 :.:1 9.:2 3.G3 9.2 3.%#


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&rofit -efore Depreciation 123.: 32G.9: 3#G.::1F:.2

@epreciation 39.F3 31.GF 31.3 2#.31

Amorti(ation of deferred epenses 2.31 33.9# 2.13 3#.99 9.99 31.3 9.99 2#.31

&rofit -efore Ta! 9.:% 2#.9: 31:.F3

1%1.

G5rovision for )a

Current )a .9: 3#.13 G9.#1 :1.2#

*rin'e ,enefit )a 9.33 9.2 9.#9 9.%1

@eferred )a 1.1G 2G.%F ::.GF 191.2 -%.F1 F%.19 -:.99 %%.F%

&rofit After Ta! :2.9G 12.FF 2#1.:3 :.23

!urplus@eficit ,rou'"t *orward -19:.G -##.9 112.F31.%

2

$ess6 )ransitional adjustment for A!-1% 9.99 9.99 9.1G 9.99

A*ount Available for appropriation -##.9 1#F.GF 3%#.#2#1%.F

%

Appropriations

5roposed @ividend 9.99 2.G3 9.99 1#.2

?eneral Reserve 9.99 9.99 9.99 %.99

)a on 5roposed @ividend 9.99 %.9F 9.99 2.%3

Interim @ividend 9.99 9.99 2.G3 2.G3

)a on Interim @ividend 9.99 9.99 9.99 3#.9 %.9F 3#.9 %.9F %F.3%

-alance Carried To -alance 45eet -##.9 112.F 31.%23%G.#

9


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Do. Of =7uity !"are 2.G3 2.G3 2.G3 2.G3

$arning &er 45are 2.9G :.#: G.19 3.23

Table "." &3L of &ris* Ce*ent Ltd

/A0&$$ Ce*ent &3L

299%-9: 299:-9F 299F-9G 299G-9

nco*e

?ross !ales 119G.:G 1%2.:F 1G12.G% 1GF:.#%

$ess6 =cise @uty 1:F.%1 1G#.: 21G.3# 219.%

!ales )a :F.#F 23#.G 111.3F 2:.33 13:.2: 3%#.% 1:G.:F 3F.:2

Det !ales GF3.F9 1233.33 1#%G.2% 1#:.G#

Ot"er Income .3G 19.: F.G: F.1

Total GG3.9G 12##.93 1#::.11 1%9#.F%

$!penditure

&anufacturin' =penses #%%.1F %3%.G% :9#.1: :%.32

5rovision for =mployee #1.29 #G.G# :F.:# G3.FG


28/55

!ellin' Administration and ot"er epenses 2#%.31 31.#G 3F9.G9 #2.F3

Interest %G.1F 3#.F2 3%.GG #%.%3

Total F.G% 3G.G 19FG.#F 121G.3:

&rofit -efore Depreciation G3.23 39%.1# 3GF.:# 2G:.3G

@epreciation #3.#1 #%.% %3.G1 :%.19

$ess6 )ransfer for Revaluation Reserve 12.3 31.92 12.F 33.1: 12.F# #1.9F 12.:G %2.#2

&rofit -efore Ta! %2.21 2F1.G 3#:.%F 233.:

5rovision for )a

*rin'e ,enefit )a 1.%9 2.99 2.19 1.F

Current )a #.3# :.G# F1.%9 %%.:G

@eferred )a 13.G9 1.:# 21.%2 3.3F F.G9 G1.#9 33.F 1.:2

&rofit After Ta! 32.%F 1FG.:2 2:%.1F 1#2.3#

,alance *rom 5revious year :.33 :.# %:.2 31.1G

A*ount Available for appropriation 3G.9 1G%.%: 322.9 1F3.%3

Appropriations


29/55

?eneral Reserve 29.99 199.99 1%9.99 199.99

5roposed @ividend 19.# 2#.#F 3#.: 2#.#F

Corporate @ividend )a 1.#F 31.: #.1: 12G.:# %.# 19.1 #.1: 12G.:3

-alance Carried To -alance 45eet :.# %:.2 1 31.1G ##.G

Do. Of =7uity !"are %.12 :. :. :.

$arning &er 45are :.3: 2%.%# 3F.2 29.3:

Table ".% &3L of /A0&$$ Ce*ents Ltd


30/55

"." Ratio Analysis 3 nterpretation

Liquidity Ratio

1. Current Ratio6

Current RatioL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement 2.:% 2.#G 2.31 2.G

5rism Cement 1.91 9.G3 1.19 1.9%

nterpretation6 ere AB5== Cement $td current ratio is more t"an 2 in all cases. As

standard for current ratio is 261 so AB5== Cement is performin' well by maintainin'

proper current assets to meet its current liability. ,ut on t"e ot"er "and t"is also s"ows

t"at company "as lot of bloc+ed fund w"ic" is not properly utili(ed t"is is not a 'ood

si'n for company. On contrary 5rism Cement $td "as its current ratio is similar to 1 in all

# years. )"is is also not 'ood for company "ealt" because company0s current liabilities

are e7ual to current assets. !o company s"ould invest more on current assets for

payin' all its current liabilities in time wit"out fail.

2. Acid )est Ratio6

Current Assets

Current Liabilities

Quick Assets .

Current Liabilities


31/55

Acid )est RatioL

nterpretation6 ere a'ain AB5== Cement $td. is s"owin' more li7uidity because its

cas" position is very "i'". )"is s"ows more bloc+ed fund of AB5== Cement $td. On

t"e contrary 5rism Cement $i7uidity position is not 'ood because 5rism "as maintained

very low cas" balance and its major part of current assets is of Inventory.

3. or+in' Capital to total Assets Ratio

or+in' Capital to )otal Assets RatioL

299%-9: 299:-9F 299F-9G 299G-9

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement 2.21 1.: 1.1 2.#%

5rism Cement 9.%9 9.3# 9.# 9.%F

Working Capital

Total Assets


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AB5== Cement 9.2# 9.29 9.21 9.2

5rism Cement 9.99 -9.9% 9.92 9.91

nterpretation6 or+in' Capital to )otal Assets ratio for AB5== Cement $td is

consistent for every year but for 5rism Cement $td. it is very fluctuatin'. ,ecause in

299%-9: it or+in' Capital was very low t"at0s w"y its C)A Ratio is 9.992 in 299%-9:.

In 299:-9F its wor+in' capital came to ne'ative and in 299F-9G and 299G-9 it is near to

9.92 and 9.91 respectively.

#. Retained =arnin's to )otal Assets Ratio

Retained =arnin's to )otal Assets Ratio L

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement 9.#: 9.#G 9.%: 9.%%

5rism Cement -9.1 9.29 9.#3 9.#3H

Retained EarningsTotal Assets


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Debt

Equity

nterpretation6 Retained =arnin's to )otal Assets is a measure of reinvestment of

earnin'. AB5== Cement $td is maintainin' ratio of 9.#: to 9.%: in respective years.

,ut for 5rism Cement $td. it is in ne'ative in 299%-9: but become positive in 299:-9F

299F-9G and 299G-9 respectively.

Leverage Ratio

1. @ebt-=7uity Ratio6

@ebt-=7uity RatioL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement 9.G: 9.:G 9.#G 9.#G

5rism Cement 9.#3 9.99 9.99 9.99

nterpretation6 ere bot" companies are in 'ood position because t"eir debt-e7uity

ratio is less t"an 1. In 299%-9: AB5== Cement $td ratios was 9.G: w"ic" is now

decrease to 9.#G. it means company "as redeemed its debt and enjoyin' its reserves

!urplus for furt"er financin'. On t"e contrary 5rism Cement $td. "as redeemed all its

debt in 299:-9F and usin' its e7uity reserves for furt"er investment.


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Earnings Before nterest ! Ta"nterest

#arket $alue of Equity

Total Debt

2. Interest Covera'e Ratio

Interest Covera'e RatioL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement 1.9 G.G3 19.:: :.1#

5rism Cement %.G1 %1.F9 .:F #F.F:

nterpretation6ere in 299%-9: interest covera'e Ratio of was very low for AB5==

Cement as well as 5rism Cement $td because t"ey "ave to pay more interest due to

more debt in capital structure. *rom net years t"eir interest covera'e ratio is increased

because of lesser debt fund. *or 5rism it is almost 199 times in 299F-9G because its

debt is totally near to (ero so t"eir interest amount is very less. )"at is 'ood for

company because t"eir fied liabilities can easily met by its earnin'.

3. &ar+et >alue of =7uity )otal @ebt

&ar+et >alue of =7uity to )otal @ebtL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement 1.%3 1.G1 2.23 9.#

5rism Cement F.F2 9.99 9.99 9.99


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Cost of goods soldA%erage n%entory

A%erage n%entory

Cost of &oods 'old( )*+

nterpretation6 &ar+et >alue of =7uity to )otal @ebt ratio is measure of $evera'e of

company. *or AB5== Cement $td it is constant i.e. 1.%3 in 299%-9: 1.G1 in 299:-9F

2.23 in 299F-9G and 9.# in 299G-9. *or 5rism Cement $td. it is very "i'" because

5rism finance mainly from e7uity financin'. In 299:-9F it "as redeemed all its debt so

debt portion become Mero. )"at0s w"y in 299%-9: it is F.F2 but from 299:-9F to 299G-9

it came to infinite because denominator becomes (ero.

Turnover Ratio

1. Inventory )urnover Ratio6

Inventory )urnover RatiosL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement 1#.F3 1%.FF 1:.1% 1#.F

5rism Cement 21.% 12.92 11.:2 G.:3

Inventory )urnover 5eriod 8In days; L

299%-9: 299:-9F 299F-9G 299G-9AB5== Cement 2#.FG 23.1# 22.:9 2#.3G

5rism Cement 1:.:3 39.3F 31.#2 31.GG


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Credit sales during ,earA%erage Balance of Debtors

nterpretation6 Inventory )urnover Ratio is 'ood for bot" companies. *or AB5==

Cement $td. it is consistent and almost same for all # financial year. ,ut for 5rism

Cement $td. it is decreasin' in conse7uent years. Alt"ou'" "i'"er t"e ratio t"e more

efficient mana'ement of inventories and vice versa. owever t"is may not always true.

A "i'" inventory turnover may be caused by a low level of inventory w"ic" may result in

fre7uent stoc+ outs and loss of sales and customer 'oodwill.

2. @ebtor )urnover Ratio

@ebtor )urnover RatioL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement 2%.9G 2G.2% 39.3: 3#.93

5rism Cement FG.% G#.:# 2%2.22 3F1.1%


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-et 'ales

i"ed Assets

nterpretation6 ere a'ain bot" companies are s"owin' 'ood performance because

"i'"er t"e debtor turnover ratio is 'ood for company. *or AB5== Cement $td it "as

ran'es from 2% to 3# times in all four years. It means AB5== Cement ltd. "as adopted

consistent credit policy for its debtor. On t"e contrary for 5rism cement $td. it is very

ri'id policy. )"ey do not provide credit facility for its customers. )"eir most of sale is

cas" sale. )"at0s w"y its debtor turnover ratio is continuously raisin'.

#. *ied Assets )urnover Ratio

*ied Assets )urnover RatioL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement 9.F 1.3% 1.#% 1.39

5rism Cement 3.2G 2.1: 2.3% 1.:1


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-et 'ales

Total Assets

&ross /rofit-et 'ales

( 011

nterpretation6 ere *ied Assets )urnover Ratio is i'"er for 5rism Cement $td. t"is

indicates a "i'" de'ree of efficiency in asset utili(ation. On t"e ot"er "and it is very low

for AB5== Cement $td. in 299%-9: but increases in successive years.

%. )otal Assets )urnover Ratio

)otal Assets )urnover RatioL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement 9.:: 9.G9 9.G2 9.F#

5rism Cement 2.3G 1.3: 1.1 9.F#

nterpretation6 )otal assets )urnover Ratio is same as *ied Assets )urnover ratio.

Only difference is t"at it considers t"e total asset instead of fied assets. ere a'ain

total Assets )urnover Ratio is 'ood for 5rism Cement $td. in Initial Bear but it is

s"owin' a decreasin' trend. On t"e ot"er "and it is very low for AB5== Cement $td.

s"owin' inefficient employment of assets.

&rofitability Ratio

1. ?ross 5rofit &ar'in


39/55

-et /rofit

-et 'ales( 011

?ross 5rofit &ar'inL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement #3E %3E %#E %9E

5rism Cement ##E %:E %2E #3E

nterpretation6 ,ot" t"e companies are maintainin' consistent ?ross 5rofit &ar'in.

AB5== Cement $td and 5rism Cement $td bot" are maintainin' almost %9 E ?ross

5rofit in its total sales. In nuts"ell we can say t"at 5rism cement $td is 'ettin' more

mar'in of ?5 as compare to AB5== Cement $td. ,ut from 299F-9G onward AB5==

Cement is more efficient in its manufacturin' epenses and start 'ettin' more ?5

&ar'in as compare to 5rism Cement $td.

2. Det 5rofit &ar'in

Det 5rofit &ar'inL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement #E 1#E 1GE 19E

5rism Cement 11E 2%E 2GE 1%E


40/55

/rofit after Ta"A%erage Total Assets

( 011

nterpretation6 ere bot" companies are 'ettin' lesser Det 5rofit &ar'in as compare to

?5 &ar'in. It s"ows t"at Cement Industries "ave lot of administrative epenses

because of w"ic" its net profit mar'in is decreases. In 299%-9: AB5== Cement $td

was 'ettin' only #E of sales as Det 5rofit. Its net profit increases to 1#E 1GE and 19E

in successive financial year. *or 5rism cement $td. it is 1#E in 299%-9: and increases

to 2%E 2GE and 1%E respectively in successive years. ere a'ain 5rism Cement $td.

is performin' better t"an AB5== Cement $td.

3. Return on Assets

Return on AssetsL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement 2E 12E 1%E FE

5rism Cement 13E 3#E 33E 11E


41/55

/rofit before interest ! Ta"A%erage Total Assets

( 011

/rofit before interest after Ta"A%erage Total Assets

( 011

nterpretation6 Return on assets means return on total investment made in current

assets as well as fied assets. *or AB5== Cement it is very low in 299%-9: i.e. 2E. It

increases to 12E 1%E and t"en FE in respective years. *or 5rism cement $td. it is

13E in 299%-9: and increases to 3#E 33E and 11E in respective years.

#. =arnin' 5ower

=arnin' 5owerL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement GE 29E 22E 1#E

5rism Cement 23E %3E #3E 1GE

nterpretation6 A'ain in =arnin' 5ower also 5rism Cement $td is performin' better

t"en AB5== Cement $td. =arnin' 5ower Ratio is s"owin' increasin' trend in 299:-9F

and 299F-9G but in 299G-9 a'ain it decreases for bot" company.

%. Return on Capital =mployed

Return on Capital =mployedL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement FE 1#E 1FE E5rism Cement 3#E 3%E 33E 12E


42/55

Equity EarningsA%erage Equity

( 011

nterpretation6 *or AB5== Cement $td. in 299%-9: Return on capital =mployed is FE

and increases to 1#E 1FE and E respectively. *or 5rism Cement $td. it is 3#E 3%E

33E and 12E in respective Bear.

:. Return on =7uity

Return on =7uityL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement :E 2#E 2GE 13E

5rism Cement 2%E %GE #FE 1%E


43/55

=arnin' Available for =7uity !"are"olderDumber of Outstandin' !"are

nterpretation6 A'ain in Return for e7uity s"are "older 5rism Cement $td is 'ivin'

'ood return to its s"are"older i.e. 2%E in 299%-9: %GE in 299:-9F #FE in 299F-9G

and 1%E in 299G-9. *or AB5== Cement $td. it is :E in 299%-9: 2#E in 299:-9F

2GE in 299F-9G and 13E in 299G-9 respectively.

$arnings &er 45are

=5!L

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement :.3: 2%.%# 3F.2 29.3:

5rism Cement 2.9G :.#: G.19 3.23

nterpretation6 In case of =5! AB5== Cement is 'ivin' 'ood return as compare to

5rism Cement $td. In 299%-9: AB5== Cement0s =5! is :.3: 2%.%# in 299:-9F 3F.2

in 299F-9G and 29.3: in 299G-9. *or 5rism Cement $td. it is 2.9G in 299%-9F :.#: in

299:-9F G.19 in 299F-9G and 3.23 in 299G-9 respectively.

,aluation Ratio


44/55

#arket /rice per s2are

Earnings per '2are

Enterprise $alue .Earnings before interest3 ta"es3 depreciation and a4orti5ation

1. 5rice =arnin's Ratio

5rice =arnin's RatioL

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement 2F.3% %.:: #.39 1.%

5rism Cement 13.#3 :.:F #.1% F.9%

nterpretation6 i'" 5rice-=arnin's Ratio s"ow 'ood mar+et return for e7uity

s"are"older. In 299%-9: 5= Ratio for AB5== Cement is 2F.3% times. It s"ows t"at

investor see 'ood 'rowt" prospect in future. ,ut from net year onward its 5= Ratio is

decreased s"arply. It is %.:: in 299:-9F #.39 in 299F-9G and 1.% in 299G-9. *or

5rism Cement $td. it is 13.#3 in 299%-9: :.:F in 299:-9F #.1% in 299F-9G and F.9% in

299G-9 respectively.

2. =>-=,I@)A Ratio

=>-=,I@)A RatioL

299%-9: 299:-9F 299F-9G 299G-9


45/55

AB5== Cement .%G #.#% 3.FG 2.##

5rism Cement :.F1 3.GG 2.G% 3.FG

nterpretation6 =>-=,I@)A is also a tool to reflect profitability. In 299%-9: AB5==

Cement $td was s"owin' =>-=,I@)A ratio of .%G times w"ic" was 'ood indicator for

company. ,ut for net year0s t"is ratio decreases to #.#% in 299:-9F 3.FG in 299F-9G

and 2.## in 299G-9. *or 5rism Cement $td it is :.F1 times in 299%-9: 3.GG in 299:-9F

2.G% in 299F-9G and 3.FG in 299G-9.

-anruptcy Forecasting

Alt*an @#4core

M L 1.2 N1 1.# N2 3.3 N3 9.: N# 1.9 N%

"ere N1L or+in' Capital to )otal Assets Ratio

N2 L Retained =arnin's to )otal Assets

N3L =,I) to )otal Assets

N#L &ar+et >alue of =7uity to ,oo+ >alue of @ebt

N%L !ales to )otal Assets

299%-9: 299:-9F 299F-9G 299G-9

AB5== Cement 2.FF 3.#: 3.1 2.:9

5rism Cement F.%9 3.33 3.2% 1.%


46/55

nterpretation6 ere AB5== Cement $td is s"owin' very "ealt"y firm because its ratio

is more t"an 2. in all years. *or 5rism Cement $td it is more t"an AB5== Cement$td but in 'rap" it is s"owin' decreasin' trend because its debt is (ero so its mar+et

value of e7uity to boo+ value of debt become (ero. Ot"erwise 5rism is very sound

company and it doesn0t s"ow any ban+ruptcy


47/55

Chapter 4

*indin' !u''estion

and Conclusion

1.1*indin'1.2Conclusion

1.3!u''estion


48/55

%.1 Finding

Ratio Co*pany 288+#8:

288:#8;

288;#8< 288


49/55

$td5rism Cement

$td.

3#E 3%E 33E 12E

Return on $quity AB5== Cement

$td

:E 2#E 2GE 13E

5rism Cement

$td.

2%E %GE #FE 1%E

Asset 7anage*ent

Rationventory Turnover AB5== Cement

$td

1#.F3 1%.FF 1:.1% 1#.F

5rism Cement

$td.

21.% 12.92 11.:2 G.:3

Debtors Turnover AB5== Cement

$td

2%.9G 2G.2% 39.3: 3#.93

5rism Cement

$td.

FG.% G#.:# 2%2.22 3F1.1%

Fi!ed Assets turnover AB5== Cement

$td

9.F 1.3% 1.#% 1.39

5rism Cement

$td.

3.2G 2.1: 2.3% 1.:1

Total Assets Turnover AB5== Cement

$td

9.:: 9.G9 9.G2 9.F#

5rism Cement

$td.

2.3G 1.3: 1.1 9.F#

C To Total Assets AB5== Cement

$td

9.2# 9.29 9.21 9.2

5rism Cement

$td.

9.99 -9.9% 9.92 9.91

R$ to Total Assets AB5== Cement

$td

9.#: 9.#G 9.%: 9.%%

5rism Cement -9.1 9.29 9.#3 9.#3


50/55

$td.

Liquidity RatioCurrent Ratio AB5== Cement

$td

2.:% 2.#G 2.31 2.G

5rism Cement

$td.

1.91 9.G3 1.19 1.9%

Acid Test Ratio AB5== Cement

$td

2.21 1.: 1.1 2.#%

5rism Cement

$td.

9.%9 9.3# 9.# 9.%F

Debt 7anage*ent

RatioDebt#$quity Ratio AB5== Cement

$td

9.G: 9.:G 9.#G 9.#G

5rism Cement

$td.

9.#3 9.99 9.99 9.99

nterest Coverage ratio AB5== Cement

$td

1.9 G.G3 19.:: :.1#

5rism Cement

$td.

%.G1 %1.F9 .:F #F.F:

,aluation Ratio

&$ Ratio AB5== Cement

$td

2F.3% %.:: #.39 1.%

5rism Cement

$td.

13.#3 :.:F #.1% F.9%

$,#$-DTA Ratio AB5== Cement

$td

.%G #.#% 3.FG 2.##

5rism Cement

$td.

:.F1 3.GG 2.G% 3.FG


51/55

$arnings &er 45are AB5== Cement

$td

:.3: 2%.%# 3F.2 29.3:

5rism Cement

$td.

2.9G :.#: G.19 3.23

1. ,ot" t"e companies use e7uity as source of finance. AB5== Cement $td is

usin' approimately #9E debt in its capital structure but 5rism Cement $td is not

usin' any debt in last t"ree year. In 299%-9: it was usin' some part of debt but

after t"is year t"ey redeemed all debt and relay on e7uity financin' only.

2. Alt"ou'" Cement Industry is manly based on $and and &ac"inery. It means its

major application of fund in on lon' term basis. )"at0s w"y investment on current

assets on prism cement ltd is very low because t"eir policy is to maintain low

cas" balance. On t"e ot"er "and AB5== Cement ltd is maintainin' lar'e cas"

balance. )"is is 'ood because t"ey can meet t"eir current liabilities very easily

but t"is is also leadin' to idle fund w"ic" in unproductive.

3. In 299%-9: AB5== Cement ltd interest covera'e ratio was very low but after t"is

mana'ement "as performed very well and able to maintain 'ood return. !o t"at

t"ey can easily cover its interest. On t"e ot"er "and 5rism is performin' very well

and t"ey are able to cover t"eir interest more t"an %9 times. )"is is because t"ey

are not usin' debt financin' so t"eir interest liability is very low and t"ey can

cover t"is very easily.

#. 5rism Cement $td "as maintained very ri'id debtor or Receivable 5olicy. )"ey

do not ma+e any sales on credit. )"at0s w"y t"eir debtor turnover ratio is very

"i'". On t"e ot"er "and AB5== Cement ltd is usin' liberal policy and providin'

credit period of 12 K 1% days.

%. ,ot" t"e companies are maintainin' 'ood ?5 &ar'in but if we see Det 5rofit

t"en t"ey are 'ettin' very less net profit. )"is s"ows t"at t"e cement industry

"ave lot of administrative sellin' @istribution epenses. )"is lead to very less


52/55

net profit for bot" companies. If we compare bot" companies t"en 5rism

performance is better t"an AB5== Cement $td.

:. 5= Ratio of bot" companies are very fluctuatin' due to fluctuation in &ar+et. In

299%-9: &5! of bot" companies was very "i'" but after t"at t"ere is slowdown

in cement industry w"ic" leads to less &5! for bot" companies. )"is lead to low

5= Ratio for bot" firms.

F. AB5== Cement is also a"ead on wor+in' capital mana'ement. ,ecause t"ey

are maintainin' sufficient amount of current assets to ma+e its C positive. ,ut

for 5rism cement $td C was in ne'ative in 299:-9F t"is s"ow poor

mana'ement of wor+in' capital.

G. If we see ban+ruptcy prediction t"en bot" companies are performin' very well.

)"ere is no si'n of ban+ruptcy for bot" companies. Atman M-score s"ows t"at

bot" t"e companies are very "ealt"y in its operation.


53/55

%.2 Conclusion

Alt"ou'" 5roduction capacity of 5rism Cement $td. is less t"en AB5== Cement $tdbut still performance of 5rism Cement is very 'ood. 5erformance of prism Cement $td.

is easily analy(ed by t"e ratio mentioned follows.

1. or+in' capital positions of bot" t"e companies are not 'ood. One is maintainin'

over current assets and ot"er one is under current assets. ,ot" t"e condition are

not 'ood for company. !o in current assets bot" company fail to mana'e it.

2. As cement industry re7uire more investment on fied assets t"at0s w"y t"ey rely

more on e7uity financin'. Alt"ou'" AB5== Cement $td. is usin' #96:9 debt

e7uity mi but prism is debt free. )"ere is scope of usin' debt as source of

finance to increase t"e levera'e of company.

3. 5rism is maintainin' very ri'id debtor policy because of w"ic" its debtor turnover

ratio is very "i'". On t"e ot"er "and AB5== cement $td. is optin' liberal policy

to increase its sales.

#. AB5== Cement $td "as issued lower e7uity as compare to 5rism Cement $td.

t"at0s w"y its =arnin's 5er !"are is very "i'" as compare to 5rism Cement $td.

%. 5= Ratio of AB5== Cement $td. is "i'" as compare to 5rism Cement $td.

w"ic" s"ows 'ood future prospects 'ood return for investors. ,ut from 299:-9F

its &5! start fallin' due to certain news in mar+et about cement industry. )"is

also affects t"e mar+et price of 5rism Cement $td.

:. 5rism cement $td is also providin' 'ood return to e7uity s"are "older as

compare to AB5== Cement $td.


54/55

%." 4uggestion 3 Reco**endation

1. 5rism cement $td s"ould mana'e its wor+in' capital properly to maintain itsli7uidity position. !ince its current assets is very low a'ainst current liability w"ic"

lead to lower or ne'ative wor+in' capital as well as current ratio. !imilarly

AB5== Cement $td is maintainin' "u'e cas" balance w"ic" is symptom of

idleunproductive fund.

2. *or 5rism Cement $td t"ere is scope of raisin' fund from debt financin'. )"is

will increase financial levera'e for a company. It will also reduce ta burden and

increase =5! for s"are"older.

3. 5rism Cement $td also liberali(ed its debtor policy to increase its sales. If credit

period for customer will increase t"en ultimately sales will increase.

#. ,ot" company "ave "u'e administrative and ot"er epenses t"is reduces its net

profit. !o company try to minimi(e its administrative epenses to en"ance its

sales.


55/55

-ibliograp5y

1. Annual Report of 5rism Cement $td. AB5== Cement $td.

2. www.AB5==cement.com

3. www.money.rediff.com

#. www.%paisa.com

%. www.wi+ipedia.com

:. !"arma ?upta &ana'ement Accountin'

rananjay 1

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