Attock Project Final (1) .Docfg

Financial Analysis of Attock Cement Pakistan Ltd.
A Project On
Analysis of Financial statements of
Attock Cement Pakistan
Limited
Submitted to:
Sir Arif Malik
Submitted by:
Qamar Iqbal khan
REG NO: (3712)
MBA 2o A
1
Preface
As the world is growing rapidly, the businesses are

also moving to become the huge one. And by that
result, more and more people want to become a
master in these businesses. The main purpose in
the finance field is to know how the financial
analysis is done. We all know that finance is the
blood of any business and without it no business
can run. Financial analysis of a company is very
difficult and the most important task and by doing
this I am able to know the whole financial position
and financial structure of the company.
Simply by looking at how much cash a company
has does not provide enough information. The
financial statements need to be analyzed to
measure a company’s performance and to
compare it with other firm’s in the same industry.
The resulting information is intended to be useful
to owners, potential investors, creditors, analysts,
and others as the analysis evaluates the past
performance, future potential and financial position
of the firm.
This report is an analysis of financial statements of
ATTOCK CEMENT PAKISTAN Ltd. This report has been
prepared with an objective to develop analytical
skills required to interpret the information (explicit
as well as implicit) provided by the financial
2
statements and to measure the company’s

performance during the past few years. The
financial statements are analyzed using traditional
evaluation techniques such as horizontal analysis,
vertical analysis and trend analysis. Ratios are an
important tool in analyzing the financial statements
& the company’s profitability, solvency & liquidity.
Sincere attempts have been made to make this
report error free but if any errors and omissions are
found then I apologize for that.
3
Acknowledgement
In the name of “Allah”, the most

beneficent and merciful who
gave us strength and knowledge
to complete this report. This
report is a part of our course
“Financial Statement Analysis”.
This has proved to be a great
experience. We would like to
express our gratitude to our
Finance teacher Sir. ARIF MALIK
who gave us this opportunity to
fulfill this report. We would also
like to thank our colleagues who
participated in a focus group
session. They gave us many
4
helpful comments which helped

us a lot in preparing our report.
Table of Contents
.................................................................................................................................................... 1
Preface........................................................................................................................................ 2
Acknowledgement ....................................................................................................................... 4
............................................................................................................................................... 5
Table of Contents........................................................................................................................ 5
Overview of income statement.....................................................................................................7
Overview of Balance sheet..........................................................................................................7
Liquidity Position with Graphical Presentation..............................................................................8
Liquidity Position...................................................................................................................... 8
Liquidity Ratios......................................................................................................................... 9
............................................................................................................................................... 15
Activity Ratios......................................................................................................................... 15
Operating Cycle...................................................................................................................... 16
Debt Ratios............................................................................................................................ 16
Profitability Ratios................................................................................................................... 17
Profitability - Financial Year 2002 to Financial Year 2008 ..................................................19
Profitability Ratios................................................................................................................... 19
Assets Utilization.................................................................................................................... 21
Assets Utilization.................................................................................................................... 23
Return on Investment............................................................................................................. 26
Return on total equity.......................................................................................................... 26
Investment Ratios................................................................................................................... 27
Long Term Debt Paying Ability...............................................................................................33
DuPont Analysis ........................................................................................................................ 36
Annexure................................................................................................................................... 37
Summarized Income Statement.............................................................................................37
5
Summarized Balance Sheet...................................................................................................41

Horizontal Analysis of Income Statements.............................................................................42
Vertical Analysis of Income Statements.................................................................................42
Horizontal Analysis of Balance Sheet.....................................................................................43
Vertical analysis of balance sheet..........................................................................................44
.............................................................................................................................................. 47
6
Introduction:
Attock Cement Pakistan Limited (ACPL) was incorporated in 1981 as a public
limited company and has been listed on the Karachi Stock Exchange since June 2002.
The Attock Cement project was a Pak Saudi venture and after completion, it started
commercial production on June1, 1988.
Overview of income statement
Overview of Income statement 2008 2007 2006 2005 2004

Sales 12,445,996 6,419,625 7,955,665 5,279,560 3,882,756
- - - -
Cost of sales -10,530,723
4,387,640 3,992,822 3,330,769 2,497,262
Gross profit 1,915,273 2,031,985 3,962,843 1,948,791 1,385,494
Administrative expenses -111,658 -104,169 -121,953 -76,480 -68,645
Selling and distribution expenses -561,465 -65,122 -34,352 -60,905 -38,560
Other operating expenses -581,913 (139,721 -191,850 -93,786 -61,735
Other operating income 847,344 479,420 294,114 707,692 128,462
Profit from operations 1,507,581 2,202,393 3,908,802 2,425,312 1,345,016
Finance cost -1,749,837 -467,759 -450,696 -304,041 -224,601
Share of loss of associated companies -8,674 -14,163 -9,573
Profit\ Loss before tax -250,930 1,720,471 3,448,533 2,121,271 1,120,415
-
Taxation 197,700 -98,000 -439,193 -325,922
1,030,078
Profit\ Loss for the year -53,230 1,622,471 2,418,455 1,682,078 794,493
Basic earnings per share Rupees -0.21 6.43 10.37 9.12 4.31
Diluted earnings per share 6.43 9.14 7.82 3.78
Overview of Balance sheet
Overview of Balance sheet 2008 2007 2006 2005 2004

Capital and Reserve
30528440 33923185 19268200 9317998 6317055
Non-current Liabilities 10250352 10430917 9020740 5642649 3020575

Current Liabilities 12899306 7390229 6015436 3055858 2376989
Assets
Non-current Assets 33835927 32529377 24394481 13819736 8833476
Current Assets 19842171 19214954 9909895 4196769 2881143
7
Liquidity Position with Graphical Presentation

Liquidity Position
Liquidity Position 2008 2007 2006 2005 2004
Current Ratio 1.54 2.60 1.65 1.37 1.21
Acid Test Ratio 1.22 2.33 1.44 0.96 0.64
Cash Ratio 1.18 2.31 1.43 0.94 0.62
2.5
2 current ratio
1.5 acid test ratio
1 cash ratio
0.5
0
2008 2007 2006 2005 2004
The liquidity position of deteriorated during the first nine months of FY'09. This was due to a
40% decrease in current assets and a 14% increase in current liabilities if the company. The
current liabilities of the company increased due to 14% rise in trade payables, 61% increase in
accrued markup and around 7% increase in short term borrowing by the company.
On the other hand, current assets of the company declined due to decrease in investments from
Rs 15 billion at the end of FY08 to Rs 7 billion at the end of March FY09. Also the cash and
bank balance of the company decreased by 22%. Thus, decrease in current assets and a
corresponding increase in current liabilities resulted in a less favorable liquidity position as
compared to that in FY08.
's liquidity stance had been strengthening since FY04 and in FY07 its liquidity position was the
most favorable. The increase in current assets had brought about this change. There was a
98% increase in short term investments. Furthermore, the cash and bank balances had also
risen considerably.
In FY08 the current assets of the company declined slightly but a 63% rise in current liabilities
caused a decrease in the liquidity of the company. Investments constitute nearly 79% of the
company's total current assets and they declined by 11% in FY08. The investments decreased
further from Rs 15 billion at year-end FY08 to Rs 10.9 billion by end of 1Q09.
8
Liquidity Ratios
1. Days, Sales in Receivables = Gross Receivables/Net Sales/365
Days, Sales in
Year Calculation in (Rupees,000)
Receivables
2008 463446/12464347/365 13.57days
2007 144245/6419625/365 8.20
2006 74165/7955665/365 3.40
2005 76238/5279560/365 5.27
2004 52622/3882756/365 4.95
14
12
10
8
6 Day sales Rec
4
2
0
2004 2006 2008
2. Account Receivables Turnover =Net Sales /Average Gross Receivables
Account Receivables
Turnover
2008 12464347/30384550 41.02times
2007 6419625/109205 58.78
2006 7955665/75201.50 105.79
2005 5279560/64430 81.44
2004 3882756/52622 73.78
120
100
80
60
ARTO
40
20
0
2004 2005 2006 2007 2008
9
3. Account Receivables turnover in days =Average Gross Receivables/Net Sales/365
Account Receivables
Year Calculation in (Rupees’000)
turnover in days
2008 30384.50/12464347/365 8.89days
2007 109205/6419625/365 6.20
2006 75201.50/7955665/365 3.45
2005 64430/5279560/365 4.45
2004 52622/3882756/365 4.95
10
4 ARTO.Days
0
2004 2006 2008
4. Days Sales in Inventory =Ending Inventory/Cost of Goods sold /365
Year Calculation (Rupees’000) Days Sales in Inventory

2008 1300325/10528046/365 45.08 days
2007 295140/4387640/365 24.55 days
2006 226286/3992822/365 20.68 days
2005 100994/3330769/365 11.07 days
2004 298538/2497262/365 43.63 days
50
40
30
20 DSI
10
0
2004 2005 2006 2007 2008
10
4. Inventory turnover = Cost of Goods sold/Average Inventory
Year Calculation (Rupees’000) Inventory turnover

2008 10528046/797732.5 13.19times
2007 4387640/260713 16.83
2006 3992822/163640 24.40
2005 3330769/199766 16.67
2004 2497262/298538 8.36
25
20
15
10 ITO
0
2004 2005 2006 2007 2008
5. Inventory Turnover in Days =Average inventory /cost of goods sold /365
Year Calculation (Rupees’000) Inventory turnover in days

2008 797732.5/10528046/365 27.66 days
2007 260713/4387640/365 21.69
2006 163640/3992822/365 14.96
2005 199766/3330769/365 21.89
2004 298538/2497262/365 43.63
50
40
30
20 ITO.Days
10
0
2004 2005 2006 2007 2008
11
07. Operating cycle = Account Receivables turnover in days + inventory turnover in days
Year Calculation O.C

2008 8.89+27.66 36.55 days
2007 6.20+21.69 27.89
2006 3.45+14.96 18.41
2005 4.45+21.89 26.34
2004 4.95+43.63 48.58
50
40
30
20 O.C
10
0
2004 2005 2006 2007 2008
08. Working Capital = Current Assets – Current Liabilities (Amount in Rupees’000)
Years Current assets Current Liabilities W.C

2008 19842171 12899306 6942865
2007 19214954 7390229 11824725
2006 9909895 6015436 3894459
2005 4196769 3055858 1140911
2004 2881143 2376989 504154
12000000
10000000
8000000
6000000
W.C
4000000
2000000
0
2004 2005 2006 2007 2008
12
09. Current Ratio= Current Assets/Current Liabilities

Year Calculation in (Rupees’000) Current Ratio
2008 19842171/12899306 1.54:1
2007 19214954/7390229 2.60:1
2006 9909895/6015436 1.65:1
2005 4196769/3055858 1.37:1
2004 2881143/2376989 1.21:1
3
2.5
2
1.5
C.R
1
0.5
0
2004 2005 2006 2007 2008
10. Quick Ratio= (Cash Equivalent + Marketable Securities+ Net Receivables)/Current

Liabilities
Year Calculation in (Rupees’000) Quick Ratio

2008 (244080+15082605+463446)/12899306 1.22:1
2007 (116173+16933790+144245)/7390229 2.33:1
2006 (7235749+502387+969891)/8429327 1.44:1
2005 (6931615+67244)/6344831 0.96:1
2004 (5078613+5503)/4524698 0.64:1
2.5
1.5
1 Quick Ratio
0.5
0
2004 2006 2008
13
11. Cash Ratio =Cash Equivalent +Marketable Securities /Current liabilities
Year Calculation in (Rupees’000) Cash Ratio

2008 (244080+185082605)/12899306 1.18
2007 (116173+16933790)/7390229 2.31
2006 (77167+8543763)/6015436 1.43
2005 5279560/822532.50 6.42
2004 3882756/504154 7.70
8
7
6
5
4
East
3
2
1
0
2004 2005 2006 2007 2008
12. Sales to Working Capital = Sales/Average Working Capital
Year Calculation in (Rupees’000) Sales to Working Capital

2008 12464347/9383795 1.33times
2007 6419625/7859592 0.82
2006 7955665/2517685 3.17
2005 5279560/82253.20 6.42
2004 3882756/504154 7.70
s
14
120
100
80
DSR
60
ARTO
40
ARTO Days
20
0
2004 2006 2008
Activity Ratios
Activity Ratios 2008 2007 2006 2005 2004

Days Sales in
13.57 days 8.20 days 3.40 days 5.27 days 4.95 days
Receivables
Account
58.78 73.78
Receivables 41.02 times 105.79 times 81.94 times
times times
Turnover
Account
Receivables 8.89 days 6.20 days 3.45 days 4.45 days 4.94 days
Turnover in Days
120
100
days sales in
80 receivables
A/R turnover
60
Activity
2008
40 A/R turnover in days Ratio
20
15
0
2008 2007 2006 2005 2004
Inventory
Turnover in 27.66 days 21.69 days 14.96 days 21.89 days 43.63 days
days
Inventory
13.19 times 16.83 times 24.40 times 16.67 times 8.36 times
Turnover
Days Sales
45.08 days 24.55 days 20.68 days 11.07 days 43.63 days
in Inventory
Operating Cycle
Activity
2008 2007 2006 2005 2004
Ratio
Operating
36.55days 27.89 days 18.41 days 26.34 days 48.58 days
Cycle
60
50
40
30 operating cycle
20
10
0
2008 2007 2006 2005 2004
Debt Ratios
Debt Ratios 2008 2007 2006 2005 2004

Debt to Tangible net worth 77 52 78 93 85
Debt To Equity Ratio 76 53 78 93 85
16
Debt Ratio 43 34 44 48 46
250
200
150 debt to tangible networth

debt/equity ratio
100
debt ratio
50
0
2008 2007 2006 2005 2004
The debt management ratios of showed a positive trend during FY07. The debt to asset and
equity ratios as well as the long-term debt ratio all receded during the period and this reflected a
reduction in the company's dependence on debt financing. However, during FY08 the debt
ratios of the company rose because the total debt increased in FY08 mainly due to a 63%
increase in the current liabilities which form 55% of the total debt.
Long term debt however decreased. The long term debt to equity increased because of a
decline in the equity base due to fall in reserves. The TIE ratio continued to fall in FY08 against
a positive trend that prevailed before FY07. The reason is substantial rise in finance charges
due to high interest rates in the economy.
Also the operating income in FY08 decreased, thus reducing the extent to which operating
income can decline before the firm is rendered unable to meet its interest costs. Due to the
losses that ACPL experienced in FY08 and the decrease in profitability during July-March FY09,
its Earning per Share (EPS) and Price to Earning (P/E) Ratio have been negative. During July-
May 2009 the share price averaged around Rs 31.1.
This shows that the dismal profits of the company have started reflecting in the low investor
confidence and falling share price. The average share price of had hovered around Rs
100/share except during the fourth quarter of FY08 when share price fell well below the
average. The management did not recommend any dividend for FY08 due to the dismal
profitability situation in the period.
Profitability Ratios
Profitability Ratios 2008 2007 2006 2005 2004

Gross Profit Margin 15 32 49 37 36
Operating Profit Margin 12 34 49 46 35
17
Net Profit Margin 7.84 25 31 31 20
140
120
gross profit margin
100
80 operating income
60 magin
40 net profit margin
20
0
2008 2007 2006 2005 2004
After experiencing declining profitability during FY08, the cement sector came back strongly to
post a growth of 167% in earnings during first quarter (July-September) of fiscal year 2009. The
cement sector posted profit after taxation of Rs 1.3 billion in first quarter of FY09 as compared
to Rs 500 million in the corresponding period of a year earlier.
This growth was mainly due to higher local retention prices and depreciation of the rupee
against the dollar that resulted in an increase of rupee-based export sales. The net sales of the
cement sector in the period July-March FY09 was 58% higher than the net sales generated
during the corresponding period of FY08. It is believed that the profits of cement companies
increased due to an arrangement among them to keep prices high in the local market.
However, higher sales revenue could not be translated into an increase in profits during the
period. Increased costs of sales, operating expenses and finance expenses caused the
profitability of to remain low during July-March FY09. The cost of sales of the company
increased by 30% during the period and resulted in a gross profit of Rs 3,733 million.
The furnace oil/coal costs for the period July-March FY09 was Rs 5,258.6 million as compared
to Rs 3,095.7 million during the corresponding period of FY08. The electricity and gas costs
were lower, however, the cost of raw material and packing material consumed increased by
12%. The administration expenses increased by 31% while the selling & distribution expenses
increased drastically by 456% (from Rs 246 million in July-March FY08 to Rs 1,370 million in
July-March FY09).
Selling expenses may have increased due to higher transportation costs involved with exports
and higher fuel costs. Also, the finance costs increased substantially by 77% as interest rates
rose owing to tight monetary policy and liquidity crunch in the market.
These rising costs greatly hampered the profitability of the company and resulted in a profit after
taxation of Rs 321 million in the period July-March FY09, which is 34% lower than the profit (Rs
487 million) during July-March FY08. Therefore, the earning per share (EPS) of the company
declined from Rs 1.92 in July-March FY08 to Rs 1.27.
18
Profitability - Financial Year 2002 to Financial Year 2008
The profitability ratios of the company have shown a declining trend since after FY05. The gross
profit margin increased in FY06 only to fall in FY07 and FY08. The profit margin of the company
has decreased continuously along with return on assets (ROA) and return on equity (ROE).
The profit after taxation had declined by 33% in FY07 due to lower net retention prices caused
by a supply overhang in the overall industry. Also the problem of rising input costs had begun in
FY07. This rise in cost of production and raw material have continued into FY08 and further
aggravated, causing the declining trend of the profitability of.
Despite a strong growth in cement dispatches, the cement sector experienced declining
profitability during FY08. The profitability of the sector fell by 73.6% to Rs 562 million till March
2008 from Rs 2,133 million in the corresponding period of FY07. Although the sales volume of
the cement companies increased, the net sales revenue did not increase to an equal extent due
to decrease in net retention prices in the sector.
Over the years all cement manufacturers undertook huge capacity expansion plans. This
created a situation of excess supply in the market. Companies resorted to price wars leading to
a fall in prices and reduced the profit margins for the companies. The average cement price
during the period July-March FY08 was Rs 128.3 per bag as compared to Rs 133.6 per bag in
the same period in FY07.
Similar was the case with. Increased production facilitated higher sales volume which in turn
translated into almost doubling of sales revenue in FY08. The company had earned the highest
sales revenue of Rs 12.445 billion in FY08. However, despite this, the gross profit of in FY08
(amounting to Rs 1.9 billion) was around 6% lower than the gross profit posted in FY07 (Rs 2.0
billion).
The reason for lower gross profit was a 140% increase in the cost of sales during the fiscal year.
Major input costs increased and dampened the profitability of ACPL and resulted in a loss after
taxation of Rs 53.230 million in FY08 against a profit after taxation of Rs 1.622 billion in FY07.
The cement manufacturers in the industry were faced with rising fuel and power costs during
FY08.
The cost of production for the cement companies went up due to rise in the prices of imported
coal. The cement companies in Pakistan have shifted from oil to coal or gas during the past few
years. Coal is now used as a basic fuel by all cement manufacturers. Pakistan has huge
reserves of coal, but cement companies are compelled to import it, as local coal has high
sulphur content.
Crude oil prices shot up during FY08 and had its impact on prices of coal and natural gas. The
rise in the costs of international coal prices has been one of the biggest reasons behind the
dampening of gross margins of cement companies during FY08. There was a nearly 50% rise in
the coal prices in FY0
Along with the hike in the international coal prices, the depreciation of the rupee against the
dollar also added to the cost of importing coal. Finance charges rose due to higher interest
rates, long term finances, short term borrowing and inclusion of workers' profit participation fund
in FY08.
Profitability Ratios
1. Net Profit Margin= Net Income before minority share of Earnings and Non
Recurring Items /Net Sales
19
Year Calculation in (Rupees’ 000) Net Profit Margin

2008 97753/12464347 7.84%
2007 1636634/6419625 25
2006 2428028/7955665 31
2005 1682078/5279560 31
2004 794493/3882756 20
35
30
25
20
15 NPM
10
5
0
2004 2005 2006 2007 2008
2. Total Asset Turnover = Net Sales/Average total Assets
Year Calculation in (Rupees’ 000) Total Assets Turnover

2008 12464347/52711214.50 24 Times
2007 6419625/43024353.50 15
2006 7955665/10723490.50 74
2005 5279560/14865562 35
2004 3882756/11714619 33
80
70
60
50
40
Asset TO
30
20
10
0
2004 2005 2006 2007 2008
3. Return on Assets =Net Income before minority shares of earning and nonrecurring
items /Average total Assets
Year Calculation in (Rupees’ 000) Return on Assets

2008 97753/52711214.50 18.5%
2007 1636634/43024353.50 3.8
20
2006 2428028/10723490.50 23
2005 1682078/14865562 11
2004 794493/11714619 6.8
25
20
15
10 ROA
0
2004 2005 2006 2007 2008
4. Operating income Margin = Operating Income/Net Sales
Operating Income
Year Calculation in (Rupees’ 000)
Margin
2008 1513505/12464347 12%
2007 2202393/6419625 34
2006 3908802/7955665 49
2005 2425312/5279560 46
2004 1345016/3882756 35
50
40
30
20 OIM
10
0
2004 2005 2006 2007 2008
Assets Utilization
Asset Utilization 2008 2007 2006 2005 2004

Sales to Fixed Assets 54 43 108 80 62
Return on Operating
24 33 10 13 11
Assets
Operating Asset
20 9.6 20 28 33
turnover
21
Return on Assets 18.5 3.8 23 11 6.60
250
sales to fixed assets
200
return on operating
150 assets
operating assets
100 turnover
return on assets
50
0 total asset turnover

2008 2007 2006 2005 2004
The performance of in terms of asset management was weak during FY07. During the year, the
inventory turnover (days) of the company more than doubled compared to FY06 when the
management of inventory seemed most efficient (evident from the lowest inventory turnover in
days). This could be traced back to lower sales revenue for the period, coupled with a higher
stock of inventory.
At the same time, the average time taken by the company to recover cash from sales also
increased. The increase in inventory turnover in days and Days sales outstanding (DSO)
prolonged the operating cycle of the company in FY07.
However, in FY08 the asset management of ACPL improved as the inventory turnover rate
increased because the company earned sales revenue more in proportion to the increase in
inventory. Thus the days to convert inventory into sales became less (from approx. 100 days in
FY07 to 79 days in FY08).
Although the days to convert sales into cash (DSO) increased slightly, the substantial decrease
in ITO (days) led to the shortening of the operating cycle in FY08. The days sales outstanding
was higher because the trade debt increased substantially (by 153%) during FY08 as against
sales.
Besides this the sales to equity and total asset turnover of the company which had a declining
trend till FY07 increased in FY08. The sales to equity ratio had been decreasing because of an
increase in the paid up capital. But the trend was reversed in FY08 because the paid up capital
remained same while the reserves fell, causing a decrease in the equity base of the company.
Also higher growth in sales increased the sales/equity ratio. Total asset turnover also improved
because the management of the company's assets was effective in generating higher sales
revenue. The company's performance in the area has improved as full-scale production from
the newly inaugurated Khairpur plant has augmented the sales.
22
Assets Utilization
1. Operating Asset Turnover =Net Sales /Average Operating Assets
Operating
Asset turnover
2008 12464347/5367098-(6592332+524176+15082605+427832) 0.20times
2007 6419625/51744331-(8174474+196913+16933790+229315) 0.096times
2006 7955665/34304376-(4482213+335810+152465+8543763) 0.20times
2005 5279560/18016505-(2610634+271428+2769134+121486) 0.28times
2004 3882756/11714619-(1387681+25021+1386816+120329) 0.33times
0.35
0.3
0.25
0.2
0.15 OP.ASSET TO
0.1
0.05
0
2004 2006 2008
2. Return on Operating Assets = operating income/Net sales

Return on Operating
Assets
2008 1513505/63120379 24%
2007 22023 9 3/ 66879875 3.3
2006 3908802/38854201 10
2005 2425312/18567919 13
2004 13455016/11859104 11
23
25
20
15
10 R on OP. A
0
2004 2006 2008
3. Sales to Fixed Assets =Net Sales /Average Net fixed Assets(Exclude construction
in progress)
Calculation in (Rupees’ 000) Sales to Fixed Assets
Year
2008 12464347/(24231112+22250927)/2 54%
2007 6419625/(7816781++22250927)/2 43
2006 7955665/(7816781+6954499)/2 108
2005 5279560/(6954499+6294666)/2 80
2004 3882756/6294666 62
120
100
80
60 sales/Fix
40 Assets
20
0
2004 2005 2006 2007 2008
4. 8.Return on Investment =Net Income before minority share of earning and non
recurring items + (Interest expense)*(1-tax rate)
Year Calculation in (Rupees’ 000) Return on Investment

2008 97753+1766298*0.65/42566447 2.92%
2007 1636634+468173*0.65/3632152 5.34
2006 2428028+450696*0.65/21624793.50 12.58
2005 1682078+304041*0.65/12149138.50 15.47
2004 794493+224601*0.65/9337630 10.07
24
16
14
12
10
8
ROI
6
4
2
0
2004 2005 2006 2007 2008
5. 9.Return on total equity =Net Income before nonrecurring items-Dividend on

redeemable preferred stock/Average total equity
Year Calculation in (Rupees’ 000) Return on total equity

2008 97753/(30528440+33923185)/2 0.30%
2007 1636634/(33923185+19268200)/2 0.37
2006 2428028/(19268200+9317998)/2 0.17
2005 1682078/(9317998+6317055)/2 0.22
2004 794493/6317055 0.13
0.4
0.35
0.3
0.25
0.2
R on T. Eq
0.15
0.1
0.05
0
2004 2005 2006 2007 2008
6. 11.Gross profit margin=Gross profit/Net sales
Year Calculation in (Rupees’ 000) Gross profit margin

2008 1936301/12464347 15.53%
2007 2031985/6419625 31.65
2006 3962843/7955665 49.81
2005 1948791/5279560 36.91
2004 1385494/3882756 35.68
25
50
40
30
20 East
10
0
2004 2005 2006 2007 2008
Return on Investment
Return on total equity
Return
2008 2007 2006 2005 2004
Ratios
Return on
2.92 5.34 12.58 15.47 10.07
Investment
Return on
0.30 0.37 17 22 13
Total Equity
25
20
15
Return on investment
10 Return on total equity
0
2008 2007 2006 2005 2004
One of the most important profitability metrics is return on equity [or ROE for short]. Return on
equity reveals how much profit a company earned in comparison to the total amount of
shareholder equity found on the balance sheet. If you think back to lesson three, you will
remember that shareholder equity is equal to total assets minus total liabilities. It's what the
shareholders "own". Shareholder equity is a creation of accounting that represents the assets
created by the retained earnings of the business and the paid-in capital of the owners. The
26
return on Equity has decreased drastically and there is quite a hell of decrement in ROE, which
is not very much encouraging for the investors in shares.
Investment Ratios
• Degree of financial leverage

• Earning per common shares
• Price earning ratio
Investment ratios 2008 2007 2006 2005 2004

Degree of financial leverage
15.48 1.27 1.13 1.14 1.20
Earning per common shares
0.017 0.60 0.10 0.76 0.35
Price earning ratio
258.08 4.81 3.38 3.96 8.19
100%
80% Price earning ratio
60%
Earning per
common shares
40%
Degree of financial
20% leverage
0%
2008 2007 2006 2005 2004
A leverage ratio summarizing the affect a particular amount of financial leverage has on a
company's earnings per share (EPS). Financial leverage involves using fixed costs to finance
the firm, and will include higher expenses before interest and taxes (EBIT). The higher the
degree of financial leverage, the more volatile EPS will be, all other things remaining the same.
Most likely, the firm under evaluation will be trying to optimize EPS, and this ratio can be used to
help determine the most appropriate level of financial leverage to use to achieve that goal.
The company’s ratio ha increased dramatically in the year 2008 by 15 times. So there is quite a
margin for company to get leveraged.
27
The portion of a company's profit allocated to each outstanding share of common

stock. Earnings per share serve as an indicator of a company's profitability.
Earnings per share are generally considered to be the single most important variable in
determining a share's price. It is also a major component used to calculate the price-to-earnings
valuation ratio. The EPS of company is fluctuating but in current year it has decreed drastically
which is not a good sign for share holders. An important aspect of EPS that's often ignored is
the capital that is required to generate the earnings (net income) in the calculation. Two
companies could generate the same EPS number, but one could do so with less equity
(investment) - that company would be more efficient at using its capital to generate income and,
all other things being equal would be a "better" company. Investors also need to be aware of
earnings manipulation that will affect the quality of the earnings number. It is important not to
rely on any one financial measure, but to use it in conjunction with statement analysis and other
measures.
A valuation ratio of a company's current share price compared to its per-share earnings is Price
Earning ratio. In general, a high P/E suggests that investors are expecting higher
earnings growth in the future compared to companies with a lower P/E. However, the P/E ratio
doesn't tell us the whole story by itself. It's usually more useful to compare the P/E ratios of
one company to other companies in the same industry, to the market in general or against the
company's own historical P/E. It would not be useful for investors using the P/E ratio as a basis
for their investment to compare the P/E of a technology company (high P/E) to a utility company
(low P/E) as each industry has much different growth prospects.
The P/E is sometimes referred to as the "multiple", because it shows how much investors are
willing to pay per dollar of earnings. It is important that investors note an important problem that
arises with the P/E measure, and to avoid basing a decision on this measure alone. The
denominator (earnings) is based on an accounting measure of earnings that is susceptible to
forms of manipulation, making the quality of the P/E only as good as the quality of the
underlying earnings number.
Investment Ratios
• Dividend payout ratio
• Dividend yield ratio
• Book value per share
Investment ratios 2008 2007 2006 2005 2004

Dividend payout ratio
19.83 23.62 48.31 28.37 27.74
Dividend yield ratio
7.68 4.90 14.23 7.17 3.38
Book value per share
18.74 20.87 16.62 7.80 5.29
28
60
50
40 Dividend payout ratio
30 Dividend yield ratio
20 Book value per share
10
0
2008 2007 2006 2005 2004
Indicates the proportion of earnings that are used to pay dividends to shareholders.
A reduction in dividends paid is looked poorly upon by investors, and the stock price usually
depreciates as investors seek other dividend paying stocks
.
A stable dividend payout ratio indicates a solid dividend policy by the company's board of
directors. The situation of ATTOCK CEMENT Pakistan. Ltd. Shows increment in 2006 but from
there is consistent decrement in this ratio by more than two times so company is trying to build
there retained earnings instead of giving dividend.
During bull markets the stock price is more likely to trade significantly higher than book value,
and in a bear market the two values may be close to equal. The dividend yield or the dividend-
price ratio on a company stock is the company's annual dividend payments divided by its
market cap, or the dividend per share divided by the price per share. It is often expressed as a
percentage. There is quite fluctuations in this ratio which shows there is lack of stability in the
company policy towards this section.
Now if we look at the book value per share, as we know that somewhat similar to the earnings per share,
but it relates the stockholder's equity to the number of shares outstanding, giving the shares a
raw value. Comparing the market value to the book value can indicate whether or not the stock
in overvalued or undervalued. During bull markets the stock price is more likely to trade
significantly higher than book value, and in a bear market the two values may be close to equal.
Investment Ratios
1. Degree of financial Leverage=EBIT/Earnings before tax
Degree of financial
leverage
2008 1513505/175273+8674-86194 15.48%
2007 2202807/1720471+14163 1.27
2006 3908802/3448533+9573 1.13
2005 2425312/2121271 1.14
2004 1345016/1120415 1.20
29
16
14
12
10
8
DFL
6
4
2
0
2004 2005 2006 2007 2008
2. 2.Earnings per common share=Net income-preferred dividend/Weighted Average

no. of common share outstanding
Earnings per common

share
2008 25685/252485315 0.017%
2007 1622471-103324/252485315 0.60
2006 2418455-73772/2332578650 0.10
2005 1682078-329/219744584 0.76
2004 794493-20049/219744584 0.35
0.8
0.7
0.6
0.5
0.4
EPS
0.3
0.2
0.1
0
2004 2005 2006 2007 2008
3. Price/Earning ratio=Market price per share/Diluted earning per share

Year Calculation in (Rupees’ 000) Price/Earning ratio
2008 30.97/0.12 258.08
2007 30.97/6.43 4.81
2006 30.97/9.14 3.38
2005 30.97/7.82 3.96
2004 30.97/3.78 8.19
4. Percentage of Retained earning=Net income-All dividend/Net income

Percentage of retained
Earning
30
2008 25685-379093/25685 -13.76

2007 1622471-344743/1622471 0.79
2006 2418455-275478/2418455 0.88
2005 1682078-250705/1682078 0.85
2004 794493-138374/794493 0.83
2
0
-2
-4
-6 % earnings
-8 ret.
-10
-12
-14
2004 2006 2008
5. Dividend payout=Dividend per common share/Diluted earning per share

Year Calculation in (Rupees’ 000) Dividend payout
2008 (379093000/158934068)/0.12 19.83
2007 (344743-103324/158934068)/6.43 23.62
2006 (275478-73772/112835676)/9.14 48.31
2005 (250705-329/112835676)/7.82 28.37
2004 (13874-20049/112835676)/3.78 27.74
50
40
30
20 Div P/O
10
0
2004 2005 2006 2007 2008
6. Dividend yield= Dividend per common share/Market price per common share
Year Calculation in (Rupees’ 000) Dividend yield
31
2008 (379093000/158934068)/30.97 7.68%

2007 (344743-103324/158934068)/30.97 4.90
2006 (275478-73772/112835676)/30.97 14.23
2005 (250705-329/112835676)/30.97 7.17
2004 (13874-20049/112835676)/30.97 3.38
16
14
12
10
8
Div Yield
6
4
2
0
2004 2005 2006 2007 2008
7. Book value per share=Total stockholders equity-preferred stock equity/Number of

common share outstanding
Year Calculation in (Rupees’ 000) Book value per share

2008 30528440-746071/158934068 18.74%
2007 33923185-746071/158934068 20.87
2006 19268200-515580/112835676 16.62
2005 9317998-515580/112835676 7.80
2004 6317055-347949/112835676 5.29
25
20
15
10 B.V/Share
0
2004 2005 2006 2007 2008
32
Long Term Debt Paying Ability

1. Times Interest Earned =Recurring Earning, Excluding Interest Expenses, Tax expense,
Equity Earnings and Minority Earnings / Interest Expense,
Including Capitalized Interest
Year Calculation in (Rupees’000) Times Interest Earned

2008 1513505/1766298 8.56times
2007 2202393/467759 4.71
2006 3908802/(450696+620534) 3.65
2005 2425312/(304041+75437) 6.39
2004 1345016/(224601+2945) 52.94
60
50
40
30
T.I.E
20
10
0
2004 2005 2006 2007 2008
2. Fixed Charge Coverage= Recurring Earnings, excluding Interest Expense, Tax expense
Equity earnings and minority earnings + interest portion of
Rentals/Interest expense including Capitalized interest +
Interest portion of rentals
Year Calculation in (Rupees’000 ) Fixed Charge coverage

2008 153505+8194330/1766298+8194330 0.84times
2007 2202393+3942972/467759+3942972 1.39times
2006 3908802+2613695/4500616+620534+2613695 0.84times
2005 2425312+960620/304041+75437+960620 2.53times
2004 13450+1360677/22460+2945+1360677 1.95times
33
3
2.5
2
1.5
FCC
1
0.5
0
2004 2005 2006 2007 2008
3. Debt Ratio =Total Liabilities/Total Assets
Year Calculation in (Rupees’000 ) Fixed Charge coverage

2008 23149658/53678098 43%
2007 17821146/51744331 34%
2006 15036176/34304376 44%
2005 8698507/9317998 93%
2004 5397564/6317055 85%
100
80
60
40 Debt ratio
20
0
2004 2005 2006 2007 2008
4. Debt Equity Ratio=Total Liabilities/Shareholder’s Equity

Year Calculation in (Rupees’000) Debt Equity Ratio
2008 23149658/30528440 76%
2007 17821146/33923185 53
2006 15036176/19268200 78
2005 8698507/9317998 93
2004 5397564/6317055 85
34
100
80
60
40 Debt/Eq
20
0
2004 2005 2006 2007 2008
35
DuPont Analysis
DuPont Return on Assets=Net profit margin*Total assets turnover
Dupont Return on
Assets
2008 7.84*0.24 1.88
2007 0.25*0.15 3.75
2006 0.31*0.74 22.94
2005 0.31*0.35 10.85
2004 0.20*0.33 6.60s
DuPont return on Assets has a decreasing trend. In 2008 net profit of co decrease due to high
cost of goods sold. Co does not utilize its assets properly in 2008. In 2007 trend of this ratio is
good. But in last 3 years it also has increasing trend.
25
20
15
10 Dupont ROA
0
2004 2006 2008
36
Annexure
Summarized Income Statement
Summarized Income 2007
2008 2006 2005 2004
Statement Rs.
Rs. Rs. Rs. Rs.
In’000
In’000 in’000 In’000 In 000
Sales Net
Local Sales 14732445 8887306 10348119 6730756 5392393
Export Sales 2741111 511826 607817 641351 305191
Less.
Excise Duty 2729046 1679829 1509449 1141756 990124
Special Excised Duty 99556
Sales tax 1929858 1159214 1349755 877924 766497
Commission to stockiest 250749 140464 141067 72867 58207
Sales Net 12464347 6419625 7955665 5279560 3882756
-.Cost of Sales
Raw and Packing material 1368488 580717 464080 374287 330535
used 480352 293929 230854 185914 161919
Salaries and Wages 1644759 605335 470625 322979 217911
Electricity and Gas 4597486 1902567 2114667 1493514 1123716
Furnace oil 764204 383159 388113 357762 338970
Stores and Spares used 98530 22913 18233 9997 9637
Repair and maintenance 43904 21840 20542 23642 42235
Insurance 1354192 469367 341940 330100 317155
Deprecation on property
plant and Equipment 3331 13108 13203 11311 6923
Deprecation on assets
subjects to finance lease 83731 45349 43678 31652 30284
Royalty 25962 15373 16884 10450 5909
Excise Duty 15541 7159 6980 5724 5881
Vehicle Running 5389 1784 1774 1831 1374
Postage Telephone ,Telegram 3480 945 1492 1581 1276
Printing and Stationery 1499 499 884 548 507
Legal and Professional 9639 6227 4678 3930 3179
Charges 6982 4113 3879 3091 6150
Estate Development 5753 3396 5680 4139 4573
Rent, Rates and taxes 2079 9449 7651 4896 6742
Freight Charges 10534013 4387229 4155837 3177348 2614113
Other Expenses 142686 161989 50205 210983 88603
- 50462 - - -
Opening W.I.P (118292) (142686) (161989) (50205) (210983)
Transfer from Trail run 10558407 4456994 4044053 3338126 2491733
Closing W.I.P 107804 5058 19468 38616 44145
Cost of Goods Manufactured
Opening stock of finished 39300 - - -
goods (118863) (69728) (5058) (19468) (38616)
Transfer from Trail run (11059) (25370) 14410 19148 5529
Closing Stock of finished 19302 43984 65641 26505 -
Page 37
goods 10528046 4387640 3992822 3330769 2497262

1936301 2031985 3962843 1948791 1385494
-)Own consumption
Capitalized 57150 48958 40950 31056 27342
Cost of Goods Sold 2985 2678 2684 2566 3125
Gross Profit 1620 1324 1210 1243 1461
-) Administrative Expenses 1685 1277 3147 3099 1992
Salaries Wages 11956 9027 7261 9742 12425
Electricity
Repair and Maintenance 126 1571 1213 4945 1382
Insurance
Deprecation on property 3545 5353 4066 2678 1752
Deprecation on assets 2210 1897 4983 1913 1256
subjects to finance lease 3522 3369 6394 1365 2471
Vehicle Running 6783 6104 10377 2410 2448
Postage Telephone ,Telegram 176 2699 2561 872 439
Legal and Professional 9004 8491 6975 6177 5944
Charges 1982 2966 3458 1855 937
Traveling and conveyance 3424 2937 17304 1926 360
Rent, Rates and taxes - - - 735 704
Entertainment 110745 104169 121953 76480 68645
School expenses
Fees and subscription
Other Expenses
Auditors Remuneration 35431 29727 23997 17474 14616
Total Administrative 875 670 443 345 383
Expenses 299 884 225 121 40
Selling and Distribution 497 235 172 1397 306
Expense 1342 1132 324 895 900
Salaries Wages
Electricity - - - - 88
Repair and Maintenance 1940 1603 1225 814 765
Insurance 1235 1361 855 855 944
Deprecation on property 1553 1094 891 913 643
Deprecation on leased 3720 1406 1561 1045 1432
property 296 189 294 398 358
Vehicle Running 3395 2643 1569 1919 2213
Postage Telephone ,Telegram
Rent, Rates and taxes 492219 19637 - - -
Traveling and conveyance
Entertainment 2595 2179 1501 2419 1805
Advertisement and Sales 562970 65122 34352 60905 38560
Promotion
Freight Charges-local
Freight and Handling - 93145 182006 83058 60829
Charges-Export
Other Expenses 9734 - - - -
Total Selling and Distribution 5000 11050 9844 4530 -
Expenses - 35112 - - -
Other Operating Expenses 580953 414 - - -
Workers’ profit participation - - - - 206
fund
Page 38
Book Value of Asset written - - - 6198 -

off
Donation 595687 139721 191850 93786 61735
Worker welfare fund
Exchange loss
Loss on Disposal of Property
Plant and Equipment 727 1659 363 582 535
Loss on Sale and Lease back 128 182 181 276 290
transactions - - - 543173 -
Total Other Operating
Expenses
Other Operating Income 820303 465656 265763 152284 34460
Income from Financial Assets 143 118 120 26 85730
Income on Bank Deposits 821301 467615 266427 696341 121015
Interest on Loan to
Employees
Gain on derecognizing of
investment 1592 1634 2847 2002 1980
Dividend Income From 4488 4490 3567 3207 -
-Related Parties
-Others 10394 4170 7609 2911 3827
Total Income from financial 6973 1208 4562 2002 1351
Assets 1858 303 2116 729 289
Income from non financial
assets - - 6986 - -
Rental Income - - - 500 -
Profit on sales of property 846606 479420 294114 707692 128462
plant and assets 1513505 2202393 3908802 2425312 1345016
Scrap Sales
Mark up on loans 186267 141701
Provisions and unclaimed 1040737 323183 305027 329 20049
balances returned back - 28281 35351 42655 35351
Exchange gain - - - 35351 12341
Others
Total other operating income - - - 42655
Profit from operations - - - - 37
Finance Cost 499413 103324 73772 - -
Long term finances 584 6564 12543 12439 9860
- Long term loans 522 98 101 83 90
- Preferred dividend
- Non participatory 205308 - - - -
redeemable capital
- Finance under markup - - 17229 7804 -
- Provident fund -
-Short term borrowings 4165 1813 1679 1405 871
-Finance lease 15569 4496 4994 6860 4235
workers profit participation (1766298) 468173 450696 304041 224601
fund 86194 - -
Loss on derivative financial
instruments (8674) (14163) (9573) - -
Loss on Foreign currency
forward (175273) 1720471 3448533 2121271 1120415
Guarantee commission
Bank charges
Total finance Cost 108214 33000 40500 40000 28700
Excess of Acquire Interest in (309167) 312435 1027000 464000 297000
Page 39
the net assets of acquire

Share of loss of Associated
company
Profit before Taxation
-)Taxation
(5)
For the year - (32422) 193 10222
-
- current (247435) (5000) (65000) (10000)
(200958)
- Deferred 98000 1030078 439193 325922
Prior Year
-Current
-Deferred
Total taxation
Net Income 25685 1622471 2418455 1682078 794493
Page 40
Summarized Balance Sheet

Summarized Balance Sheet 2008 2007 2006 2005 2004
Equity and Liabilities
Capital and Reserves
Authorized Capital 2500000
-950000000@ ordinary share10 9500000 9500000 2500000 2500000 50000
-50000000@ preference 500000 500000 500000 500000 300000
share10 10000000 10000000 3000000 3000000 1676306
2535412 2535412 1843937 1843937
Issued subscribed and paid up -
capital - - 8351 -
Share deposit money 27634722 29630084 15085354 7196568 4389088
Reserves 32399 1757689 2330558 277493 251661
Un-appropriated profit 30528440 33923185 19268200 9317998 6317055
Total capital and Reserve
Non Current Liabilities 8871051 8686447 7372468 4899225 2730573
Long term finance 393 1141 28886 131985 83487
Liabilities against subject to
finance lease 73890 79467 33814 28674 30365
Long term deposits 54018 39862 26572 45765 38150
Retirement and other benefits 1251000 1624000 1559000 537000 138000
Deferred Taxation 10250352 10430917 9020740 5642649 3020575
Total Non-Current liabilities
Current Liabilities 1450074 1027274 1406869 1154426 493968
Trade and other payables 391610 342612 340757 960620 1360677
Accrued markup 8194330 3942972 2613695 - -
Short term borrowing 2828202 2042281 1619025 599674 487254
Current portion of non-current
liabilities - - - 306048 -
Derivative foreign currency
forward options 35090 35090 35090 35090 35090
Provision for taxation 12899306 7390229 6015436 3055858 2376989
Total Current liabilities 53678098 51744331 34304376 18016505 11714619
Total Liabilities
Assets
Non-Current Assets 24224273 22117551 7521723 6637237 6128083
Property plant and equipment 6839 133376 295058 317262 166583
Assets subject to finance lease 2488307 1907063 11759677 3983175 1126108
Capital work in progress 6592332 8174474 4482213 2610634 1387681
Investments 524176 196913 335810 271428 25021
Long term loans, advances and
deposits 33835927 32529377 24394481 13819736 8833476
Total Non-Current Assets
Current Assets 2323883 1496291 836049 1035081 938847
Stores spares and loose tools 1300325 295140 226286 100994 298538
Stock in trade 463446 144245 74165 76238 52622
Trade debts 15082605 16933790 8543763 2769134 1386816
Investments 427832 229315 152465 121486 120329
Advances, deposits,
prepayments and other 244080 116173 77167 93836 83991
Receivables 19842171 19214954 9909895 4196769 2881143
Cash and bank balance 53678098 51744331 34304376 18016505 11714619
Total Current Assets
Total
Page 41
Horizontal Analysis of Income Statements
2008 2007 2006 2005 2004

Net sales 321.01 % 165.34 % 204.89 % 135.97 100 %
Cost of sale (421.58) (175.7) (159.89) (133.38) 100
Gross profit 139.75 146.66 286.02 140.66 100
administrative
(61.33) (151.75) (177.66) (111.41) 100
expense
selling &dist.
(145.98) (168.88) (89.09) (157.95) 100
expenses
other operating
(964.90) (226.32) (310.76) (151.29) -100
expense
other Operating
659.03 373.20 228.95 550.89 100
income
profit from operation 112.53 163.74 290.61 180.32 100
finance cost (786.41) (208.26) (200.66) (1345.25) 100
share of loss of
- - - - 100
associated company
income before taxes 15.64 153.56 307.79 189.33 100
Provision for taxation (61.66) (30.06) (316.05) (134.75) 100
Net profit 3.23 204.21 304.40 211.72 100
Horizontal analysis of income statement shows that net sales of the Co has increasing
trend. But on the other hand Cost of goods sold jump quickly. This is not a good trend. Cost
of goods sold of the Co increases due to expensive raw materials. Gross profit of the co
decreases from last years due to high cost of goods sold. Administrative and selling
expense of the Co has decreasing trend. Other operating expenses of the Company are
increasing quickly. Company is also increasing trend in other operating income. Profit from
operations also decreases. Co also has high finance cost from last years. Income before
taxes has decreasing trend due to high cost of goods sold and finance cost. Net profit of the
Company is Very small as compare to last years.
Vertical Analysis of Income

Statements
2008 2007 2006 2005 2004

Net sales 100% 100% 100% 100% 100 %
Cost of sale (84.46%) (68.35%) (50.18%) (63.09%) (64.32%)
Gross profit 15.35 31.64 49.81 36.91 35.68
administrative expense (0.88) (1.62) (1.53) (1.45) (1.77)
selling &dist. expenses (4.52) (1.01) (0.43) (1.15) (0.99)
other operating expense (4.78) (2.17) (2.41) (1.78) (1.59)
Page 42
other Operating 6.79 7.47 3.70 13.40 3.37

income
profit from operation 12.14 34.31 49.13 45.94 34.64
finance cost (14.17) (7.28) (5.66) (5.76) (5.78)
Excess of acquires 0.69
interest in the net assets - - - -
of acquire
share of loss of (0.66) (0.22) (0.12)
associated company
income before taxes 1.41 26.80 43.34 40.18 28.86
Provision for taxation (1.61) (1.53) (12.95) (8.32) (8.39)
Net profit 20.20 25.27 30.40 31.86 20.46
In vertical analysis of income statement shows that has high cost of goods sold from last
years. Gross Profit of the Co has decreasing trend. This is decrease due to high cost of
goods sold. Operative expense of the co has minimum portion in the income statement.
Profit from operations also has decreasing trend. Share of loss of associated co also
increases Income before taxes also decreases from last years. Provision for income taxes
also has decreasing trend.
Horizontal Analysis of Balance

Sheet
Assets 2008 2007 2006 2005 2004
issued subscribed &
151.25 151.25 110.00 110.00 100
paid up capital
reserves 629.62 675.08 343.70 163.96 100
accumulated profit
12.87 698.43 926.07 110.26 100
total
Total - 537.01 305.02 147.51 100
non-current Liabilities
long term finance 324.88 318.12 269.99 179.42 100
liabilities against
assets subject to 0.47 1.36 34.50 158.09 100
lease finance
long-term deposits 243.34 261.71
retirement and other
141.59 104.40 69.65 119.96 100
benefit
deferred taxation 906.52 1176.81 1129.71 389.13 100
current liabilities
trade and other
293.56 207.96 284.81 233.70 100
payables
accrued mark up 28.78 25.18 25.03 70.60 100

current portion of
580.43 419.14 332.27 123.07 100
long term liabilities
provision for taxes 100 100 100 100 100
Page 43
total 542.67 310.91 25.47 128.56 100

assets
non-current assets
property plant &
395.29 360.92 122.74 108.31 100
equipment
assets subject to
4.10 80.06 177.12 190.45 100
finance lease
capital work in
220.96 169.35 1044.28 353.71 100
progress
investment 475.06 589.07 323 188.13 100
long-term loans
2094.94 99 1342.11 1084.80 100
&deposits
current assets 100 115.7 116.10 121.51 123
stores spares and loose
247.53 159.37 89.05 110.25 100
tools
stock in trade 435.56 98.86 75.79 33.83 100
trade debts 880.71 274.11 140.94 144.88 100
investment 1087.57 11221.05 616.07 199.67 100
advanced deposits 355.55 190.57 126.71 100.96 100
cash and bank balance 290.60 138.32 91.88 111.72 100
Liabilities and owner equity of the balance sheet shows that issued and paid up capital of
the company is increasing. And reserves of the co also jump 343% to 675% in the year of
2006 to 2007. Accumulated profits of the co have decreasing trend. And it is dangerous for
the co.
Non current liabilities of the co increases from 2004 to 2007 but there is a decline in 2008.
Current liabilities of the co also have increasing trend.
This horizontal analysis of balance sheet shows that Fixed Assets of the Co increase from
last years. It means Co have much productive assets. It shows a good trend of fixed assets.
On other side trend of assets subjects to finance lease going to decrease. Co also have
asset that are work in progress but trend of these assets also going to decrease. Co also
invests in long term investment and this asset also has increasing trend from 2004 to 2008.
Co also has long term deposits and these also have increasing trend.
Current Assets of the Co also have increasing trend. Trade debts of the Co also have
increasing trend and its debts are not in a good position. Short term investments of the co
also increase and Co use its idle cash in good manners.
.
Vertical analysis of balance

sheet
Assets 2008 2007 2006 2005 2004
issued subscribed &
4.72% 4.89% 5.37% 10.23% 14.31%
paid up capital
reserves 51.48 57.26 43.97 39.94 37.47
accumulated profit
0.06 3.39 6.79 1.54 2.15
total
Page 44
Total 56.26 65.55 56.16 51.72 53.92

Non-current
Liabilities
long term finance 16.52 16.79 2.49 27.19 23.31
liabilities against
assets subject to 0.000732 0.0022 0.084 0.73 0.71
lease finance
Long term deposits 0.13 0.15 0.098 0.16 0.26
retirement and other
0.10 0.077 0.077 0.25 0.32
benefit
deferred taxation 2.33 3.14 4.54 2.98 1.18
Total 19.09 20.16 26.29 31.32 25.78
Current liabilities
Trade & other
2.70 1.98 4.10 6.41 4.22
payables
accrued mark up 0.73 0.66 0.99 5.33 11.61
Short term borrowing 15.26 7.62 7.62

secured
current portion of 5.27 3.95 4.72 3.33 4.16
long term liabilities
provision for taxes 0.06 0.068 0.10 0.19 0.29
total 24.03 14.28 17.54 16.96 20.29
assets
non-current assets
property plant & 45.13 42.74 21.92 36.83 52.31
equipment
assets subject to 0.012 0.26 0.86 1.76 1.42
finance lease
capital work in 4.63 3.68 34.28 22.11 9.61
progress
investment 12.28 15.79 13.06 14.49 11.85
long-term loans 0.97 0.38 0.97 1.51 0.21
&deposits
Total 63.03 62.86 71.11 76.71 75.41
Current liabilities
stores spares and 4.32 2.89 2.44 5.75 8.01
loose tools
stock in trade 2.42 0.57 0.66 0.56 2.55
trade debts 0.86 0.27 0.22 0.42 0.45
investment 28.09 32.72 24.90 15.37 11.84
advanced deposits 0.79 0.44 0.44 0.67 1.03
cash and bank 0.45 0.22 0.22 0.52 0.72
balance
Total 36.26 37.13 28.88 23.29 24.59
Vertical Analysis of the balance sheets shows that in 2008 that Equity portion of Co have
large portion of equity .And there is minimum portion of non current liabilities. And it shows
a good trend. Co finances his assets through equity and pay minimum amount of interest.
Page 45
Current liabilities of the co increase from last years. On current assets co do not pay
interest. Co pays his obligation timely and there is no chance of insolvency.
On the other side of balance sheet are assets of the Co. Co have more productive assets.
Analysis show that Company Finance minimum assets at lease. Current assets of the Co
slightly decrease from last year.
Page 46
Conclusion:
Trend Analysis of the company shows
that the company’s performance is
decreasing with the passage of time as
profitability, ROA and ROE are decreasing
every year. Company is getting more
leveraged which is increasing the risk of
insolvency. Company recovers its trade
debts in almost 2 to 3 which shows that
company has a good credit policy. Cross
sectional Analysis shows that company is
in the better position than its competitors.
Political and economic issues has a
great impact on the performance of whole
industry e.g. increase in demand of
energy and oil have increased the prices
of inputs which resulted a great increase
in cost of production
Page 47

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Financial Analysis of Attock Cement Pakistan Ltd.

As the world is growing rapidly, the businesses are

statements and to measure the company’s

In the name of “Allah”, the most

helpful comments which helped

Summarized Balance Sheet...................................................................................................41

Overview of income statement

Overview of Income statement 2008 2007 2006 2005 2004

Overview of Balance sheet

Overview of Balance sheet 2008 2007 2006 2005 2004

Non-current Liabilities 10250352 10430917 9020740 5642649 3020575

Liquidity Position with Graphical Presentation

2. Account Receivables Turnover =Net Sales /Average Gross Receivables

3. Account Receivables turnover in days =Average Gross Receivables/Net Sales/365

4. Days Sales in Inventory =Ending Inventory/Cost of Goods sold /365

Year Calculation (Rupees’000) Days Sales in Inventory

4. Inventory turnover = Cost of Goods sold/Average Inventory

Year Calculation (Rupees’000) Inventory turnover

5. Inventory Turnover in Days =Average inventory /cost of goods sold /365

Year Calculation (Rupees’000) Inventory turnover in days

Year Calculation O.C

08. Working Capital = Current Assets – Current Liabilities (Amount in Rupees’000)

Years Current assets Current Liabilities W.C

09. Current Ratio= Current Assets/Current Liabilities

10. Quick Ratio= (Cash Equivalent + Marketable Securities+ Net Receivables)/Current

Year Calculation in (Rupees’000) Quick Ratio

11. Cash Ratio =Cash Equivalent +Marketable Securities /Current liabilities

Year Calculation in (Rupees’000) Cash Ratio

12. Sales to Working Capital = Sales/Average Working Capital

Year Calculation in (Rupees’000) Sales to Working Capital

Activity Ratios 2008 2007 2006 2005 2004

Debt Ratios 2008 2007 2006 2005 2004

150 debt to tangible networth

Profitability Ratios 2008 2007 2006 2005 2004

Net Profit Margin 7.84 25 31 31 20

Profitability - Financial Year 2002 to Financial Year 2008

Year Calculation in (Rupees’ 000) Net Profit Margin

2. Total Asset Turnover = Net Sales/Average total Assets

Year Calculation in (Rupees’ 000) Total Assets Turnover

Year Calculation in (Rupees’ 000) Return on Assets

4. Operating income Margin = Operating Income/Net Sales

Asset Utilization 2008 2007 2006 2005 2004

Return on Assets 18.5 3.8 23 11 6.60

0 total asset turnover

2. Return on Operating Assets = operating income/Net sales

Year Calculation in (Rupees’ 000) Return on Investment

5. 9.Return on total equity =Net Income before nonrecurring items-Dividend on

Year Calculation in (Rupees’ 000) Return on total equity

6. 11.Gross profit margin=Gross profit/Net sales

Year Calculation in (Rupees’ 000) Gross profit margin

• Degree of financial leverage

Investment ratios 2008 2007 2006 2005 2004

80% Price earning ratio

The portion of a company's profit allocated to each outstanding share of common

Investment ratios 2008 2007 2006 2005 2004

2. 2.Earnings per common share=Net income-preferred dividend/Weighted Average

Earnings per common

3. Price/Earning ratio=Market price per share/Diluted earning per share

4. Percentage of Retained earning=Net income-All dividend/Net income

2008 25685-379093/25685 -13.76

5. Dividend payout=Dividend per common share/Diluted earning per share

Year Calculation in (Rupees’ 000) Dividend yield

2008 (379093000/158934068)/30.97 7.68%