Pr esented By

Muham mad Zuhai r

Al taf

MBC- 08- 36
 Presentation
Of
Analysis of Financial
Statements
On
D.G.Khan Cement
Company LTD
Vertical analysis of Balance
Sheet
Vertical analysis of Balance Sheet
Horizontal Analysis of Balance
Sheet
Horizontal Analysis of Balance Sheet
 Vertical Analysis of Income
Statement
Vertical Analysis of Income statement
Horizontal Analysis of Income
Statement
Horizontal Analysis of Income Statement
Profibility
Profibility

60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
-10.00% 1 2 3 4

Gross Profit Margin Profit Margin on Sales

Return on Assets Return on Equity

huge capacity expansion plans took place in

2008
excess supply in the market resorted to
price wars
highest sales revenue of Rs 12.445 billion
in FY08
the gross profit in FY08 was around 6%
lower than 07
 Profibility

Profibility 60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
-10.00% 1 2 3 4

Gross Profit Margin Profit Margin on Sales

Return on Assets Return on Equity

140% increase in the cost of sales

Major input costs increased resulted in a loss
after taxation of Rs 53.230 million in FY08
rising fuel and power prices
cost of production went up due rise in prices of
imported coal
local coal has high sulphur content
hike in the international coal prices , the
depreciation in rupee, higher interest rates
 Liquidity
Current Ratio
Liquidity
3
2
1
0
1 2 3 4

strengthening since the past few

years and in FY07, its liquidity
position was most favorable because
of increase in current asset
 Liquidity

Liquidity Cash ratio

0.04
0.03
0.02
0.01
0
1 2 3 4

In FY08 63% rise in current liabilities

caused a decrease in the liquidity of
the company
 Asset
Asset Management

120
Management 100
ITO (Days)
80
60
Days Sales
40 Outstanding
20 Operating
Cycle
0
1 2 3 4

asset management was weak during FY07

ITO doubled compared to FY06 from 48 to 100
days and DSO from 3 to 10 compared to FY08
In FY08, the asset management of DGKC
improved because the company earned more
revenue in proportion to the increase in inventory
DSO increased slightly because the trade debt
receivables
 Asset management

Asset 0.6

Management
Sales/Equity
0.4

0.2 Total Asset

Turnover
0
1 2 3 4

sales to equity and total asset

turnover declining trend till FY07
increased in FY08
Higher growth in sales increased the
sales/equity ratio
effective management of the
company's assets
 Debt Debt Management

Management 100 Debt To Asset

80
Debt /Equity
60
40
Long term
20 debt to equity
0 Times Interest
1 2 3 4 Earned

positive trend till FY07 and least in FY07 reflected

a reduction in the company's dependence on debt
financing
In FY08 the debt ratios of the company rose
because due to increase in the current liabilities
which is almost doubled and is 55% of the total
debt
Long-term debt to equity increased because of a
decline in the equity base due to fall in reserves
 Debt Debt Management

Management 100 Debt To Asset

80
Debt /Equity
60
40
Long term
20 debt to equity
0 Times Interest
1 2 3 4 Earned

TIE ratio continued to fall in FY08 due to

substantial rise in finance charges & high interest
operating income in FY08 decreased because the
operating expenses increased a lot
Due to the losses the company incurred in FY08,
management did not recommend any dividend
 Future Outlook
In the budget FY09, CED increased Rs 900 per
ton from current Rs 750 per ton GST by 1%.
Public Sector Development Program (PSDP)
budget of Rs 550 billion is cut
Cement consumption is correlated to GDP growth
In budget, an allocation of Rs. 75bn construction
and improvement of dams and water reservoirs &
Rs. 37bn. allocated for roads and highways
Exports so far shown a strong growth
exporting cement to Afghanistan
growing opportunities in the Middle East
effects of global recession may impact
Indian market has been closed as India banned
import of cement because of escalating tensions
 Future Outlook
manufacturers are compelled to import
coal due to high sulphur content in local
coal because of corrosion
the coal & gas prices has risen
The company's largest Vertical Cement
Grinding Mill at DG Khan site to start
commercial production in FY09
Increased production generate higher
sales
 Future Outlook
cost of production and operating
expenses will be critical
a project of power generation from
waste about 10.4MW
negotiations with equipment
suppliers are underway
use municipal solid waste
resolve the environmental issues &
save huge foreign exchange