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Internship Report
On
Askari Cement Nizampur
Group No 01
Submitted To:
Mr Faheem A Khan
Submitted By:
Table of Contents
S.No
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
Description
Dedication
Acknowledgement
Executive Summary
History
Objectives
Overview of Firm
Organizational Structure
Finance Department Structure
Operations Of Finance Department
Functions Of Finance Department
Financial Ratios
Liquidity Ratios
Leverage Ratios
Activity Ratios
Profitability Ratios
Graphical Representation
SWOT Analysis
Internship Experience
Shortfalls of Finance Department
Conclusion and Recommendations
Reference And Source
Annexes
Page
No
3
4
5
6
7
8
10
13
14
15
21
21
24
26
30
33
38
41
44
45
46
46
DEDICATION
I dedicated this work to my parents who are most valuable for us
in this world. Teachers and all those friends who help me to
accomplish this task.
ACKNOWLEDGEMENT
Executive Summary
The internship report has been prepared on the Finance
department of Army Welfare Trust Nizampur Cement Plant in
order to comply with the necessary requirement of COMSATS
for obtaining the MBA Degree.
Specific
consideration
is
given
to
the
Finance
History
The plant
Construction of the Plant was started in 1993. Its first line of the
capacity of 2000 tonnes per day was complete and it started
provide
employment
opportunities
for
retired
Business Volume
Revenues generated from the sale of cement are as detailed below,
Year
Revenues
2005
426,952,442
2,608,190,052
2006
306,815,143
3,666,840,794
Profile of Employees
The total number of employees in AWTNCP is as detailed below,
Officers / Executives
99
Workers
305
Total:
404
Management Grades
Executive Grades
Officers Grade
Workers Grades
Product Lines
The sole production item of the factory is Ordinary Portland / Grey Cement.
10
11
Project
(Cement)
Technical
Managing Director
&
Audit
AWT
Secretariat
Department
Marketing Department
Administration
(HO)
Director (Industries)
AWT
Department.
Finance Department
Human
Resource
Director Project
(Cement)
Department
AWTNCP
of Marketing Department.
Managers
Factory Site Dept.
Managers
Asst. Managers
Asst. Managers
Junior Officers
Junior Officers
12
Factory Site
Factory management has been categorized in the following
departments,
General
Manager
(Works)
Crusher
Production
Administration
Kiln
Packing plant
Mechanical
Dispatch
Electrical
Factory Location
Nizampur Cement Plant is located in Village Kahi / Nizampur,
Dist. Nowshera about 22km South-West of Khairabad on right
bank of the River Indus.
Marketing Operations
AWTNCP is selling its production under the brand name of
Askari Cement.
13
14
Manager (Finance)
Factory Site
Assistant Managers
Sectional Head
Assistant Manager
Junior Officers
Payments Section
Assistants / Cashier
Ledgers Section
Cashier
Computer Section
15
planning
and
formulation
of
financial
highlighting
performance
of
the
16
17
18
site
finance
department
comprised
of
following
departments,
Payment Section
Making payments to the site contractors and
suppliers.
Cash handling
19
20
Mobilization of Funds
Customers deposit payments against the cement booking orders
through out Pakistan in the nominated bank branches of
Askari Commercial Bank Ltd.
Muslim Commercial Bank Ltd.
Allied Bank Ltd.
21
Sources of Funds
One source of funds is the sale of cement produced by the
company. AWT head office (sponsors) also provides financial
assistance to meet the companys short and long-term
obligations.
Allocation of Funds
Annual budget is prepared in the light of marketing department
forecasts about the demand of cement in the market and
forecasted price of cement in the market. Then department wise
budget was prepared in the light of available forecasts and
history data. BOD approves the budget. This forms the basis for
22
FINANCIAL RATIOS
Ratio Analysis is an excellent method for determining the overall
financial condition of company. It puts the information from a
financial statement into perspective, helping to spot financial
patterns that may threaten the health of the company. Ratios are
also very useful for making comparisons between companies
relevant to the same industry. The analysis of financial
statements can provide reasonable insight into a firm's state of
affairs. But the statements have inherent limitations, which
require care and prudence in their uses.
23
LIQUIDITY RATIOS
Current Ratio
Current ration measures the extent of which a firm can meet its
short-term obligations.
Year
Current Assets
Current Liabilities
Current Ratio
2005
1007472323
953140550
1.05
2006
1478502838
1.45
1018808100
Analysis
The current ratio is a measure of liquidity. It helps us to answer
the question: If a business had to pay off all its current liabilities
tomorrow, would it have enough current assets to make the
payments and avoid insolvency? if the current ratio is less than
1, it is in danger of failure. If the ratio is high, perhaps above 2,
the business has more than enough current assets. And these
surplus funds can be used to improve efficiency. Ideal current
ratio for any business entity is 2:1 just enough to be getting on
with. AWTNCP is improving its current ratio as compared to
previous year and aimed to cross the ideal limit of 2:1. Reason is
24
Year
Quick Ratio
2005
1007472323701763862
953140550
0.32
2006
1478502838118367890
1018808100
1.33
Analysis
Quick ratio measures the extent to which a firm can meet its
short-term obligations without relying upon the sale of its
inventories. The optimal quick ratio is 1 or higher. AWTNCP
quick ratio is improving year by year, again for the reason that
company is clearing its current liabilities as much as possible.
And its current assets also increased.
25
Year
Working Capital
Current Assets Current Liabilities
2005
1478502838 1018808100
459,694,738
2006
1007472323 953140550
54,331,773
Analysis
Company faced difficult times in past year in terms of working
capital availability. Year 2006 more working capital gives the
company a good signal towards having good times in future.
LEVERAGE RATIOS
Debt to Equity Ratio
It shows the ratio of funds provided by creditors versus by
owners. A high debt to equity ratio could indicate that the
company may be over-leveraged, and should look for ways to
reduce its debt.
Debt to Equity Ratio = Total Debts / Total Equity
26
Year
Equity
2005
1288611069 / 1789929171
0.71
2006
936799414 / 2191486153
0.42
Analysis
Company is facing heavy net losses in past years due to
financial expenses, low cement sales and high input costs. In
order to give cover to these losses debts are taken to keep the
company operational and to avoid insolvency. Time Company is
clearing its debt and debt to equity ratio is decreasing year to
year.
Debt to Total Assets Ratio
It shows the ratio of total funds that are provided by creditors.
Year
2005
1,288,611,069 / 10,722,697,173
0.120
27
0.084
2006
936,799,414 / 11,027,731,763
Analysis
In Year 2005 debt are 12% of total assets now in 2006 debt to
asset ratio is 8.4% which shows the decreased of 3.6% as
compared to previous year ratio due to yearly payment of debt to
borrower.
ACTIVITY RATIOS
Total Assets Turnover Ratio
Year
2005
Sales
Total Assets
2,608,190,052
10,722,697,173
Total Assets
Turnover Ratio
0.24
28
2006
3,666,840,794
11,027,731,763
0.33
Analysis
This ratio tells us whether a firm is generating a sufficient volume
of business for the size of its asset investment. The higher the
ratio, the more efficiently the Company is utilizing its assets to
generate sales. Companys asset turnover ratio shows increased
as compared to previous year 2005 ratio because sales are
increased due to increasing demand in the market. And company
used efficiently its asset to generate sales.
Year
Net Sales
Accounts Receivables
2005
Receivable Turnover
Ratio
96.41
2608190052
29
27052056
2006
3666840794
25148010
145.81
Analysis
This number indicates how quickly customers are paying your
business. The greater the number of times receivables turn over
during the year, the shorter the time between sales and cash
collection. This high ratio is because of cement is mostly sold
against Cash / Advance payment.
Year
2005
Sales
Net Fixed Assets
2608190052
9715224850
0.26
2006
Turnover Ratio
0.38
3666840794
30
9549228925
Analysis
The net fixed turnover ratio reflects the firms utilization of fixed
assets. In 2005 net fixed asset turnover ratio is 26% now in
current year it is 38%. 12% increase in net fixed asset turnover
indicates that company utilizes its fixed asset well as compared
to previous year.
31
Sales
Total Equity
Equity Turnover
2005
2,608,190,052
1,789,929,171
1.45
2006
3,666,840,794
2,191,486,153
1.67
Year
Ratio
Analysis
It is useful to examine the turnover for alternative capital
components. The difference between this ratio and total asset
turnover is that it excludes current liabilities and long term debt.
Equity turnover ratio also increased because sales of current
period increased which directly affect the equity turnover ratio.
PROFITABILITY RATIOS
Net Profit Margin
It measures Aftertax profits per Rupee of sales
Net Profit Margin = Earning After Interest & Taxes / Net Sale
32
EAIT
Net Sales
Year
2005
426952442
2608190052
0.16
2006
306815143
3666840794
0.08
Analysis:Although current year sales is higher than previous year but net
profit margin after tax is low as compared to 2005. Reason of
33
Year
GP
Net Sales
2005
776821137
2608190052
2006
1622646450
3666840794
0.30
0.44
34
Analysis
Gross profit ratio is increased to .44 because sales of current
year are higher due to the growth of market and this indicates
that marketing department is working good to capture the
potential of market.
Operating Profit
Net Sales
Operating Profit
2005
728340649
2608190052
0.28
2006
678965956
3666840794
0.19
Year
margin
Analysis
35
36
Current Ratio:-
Quick Ratio:-
37
38
39
40
41
SWOT Analysis
INTRODUCTION
During the internship in Askari Cement I, have found out
some problems and weaknesses in the firm, which can be
solved with little efforts which will improve the efficiency of the
firm and will enable it to achieve its targets.
42
Strengths
Strong Brand Name.
Adoption of new technological plan.
Experienced Upper level management.
Good distribution Channel.
43
Quality Product.
Weaknesses
Lack of Job satisfaction.
Lack of Human Resource department functions.
Lack of skilled labor.
Management Issues
Absence of pure computerized work
Opportunities
Increasing demand of cement in market.
Coal as substitute of furnace oil.
44
Threats
Entrance of potential competitors.
Low price substitute in market.
Low profit due to higher CGS
Increase in furnace oil prices
Internship Experience
How I got Internship?
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46
Cost & Budgeting Section:In this section I learn how to make budget and how to allocate
budget provision on work order cases. At the end of month make
cost of production report.
Cashier
Here I learn how to maintain cash book. And made cheque for
salary and allowances
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9 am start of work
10.30 Tea Time
1 pm to 2 pm Launch & Prayer break
4 pm End of work
Friday Timing
9am to 12 pm
Outcomes of Internship
I understand how to manage practical life.
Gain ability to make decisions.
How to manage himself with organization culture
Increase knowledge and skills.
How to deal with peoples in working environment.
Every one provides me guidance.
Its make me punctual and hard worker.
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49
50
Annexes
The following Annexes have been enclosed with the report:Annexure #
Description
51
i.
Copy
of
Internship
Certificate
from
GM
(Finance), NCP.
52