Too many assets compared to current liabilities hence the company is not efficiently using its current assets specifically its accounts receivables. This trend is due to increasing total assets both current and non-current of the company and decreasing total debt, current and non-current liabilities, over the years which has led to an overall decrease in the debt ratio.
The average receivables and credit sales, both have increased but credit sales have increased more as compared to average receivables. It is the portion of a company's profit allocated to each outstanding share of common stock.
This increasing trend is due to the continuous rise in profit after taxation of lucky cement. It increased steadily till and then it had a sharp rise in The big sub-story alongside this is that exports have fallen by half to 4.
However, one news story could potentially sum up its decline for the wider public. In addition the local Public Sector Development Programme PSDP is also having an effect and demographic pressures, such as a housing shortage, are also expected to support the construction market.
Thanks to location advantages of being in the South, it is not surprising that Lucky accounts for more than one-thirds of the total cement exports from Pakistan, and caters to the Asian, Middle Eastern and African markets.
Inventory turnover ratio has decreased in the initial years but then increased in and Given the higher proportion of exports to the southern market this change has likely hit the industry in south harder despite overall depatches there rising.
It has been declining every year and this trend is due to decreasing total debt, both current and non-current liabilities, and increasing total equity over the years which has led to a sharp decline in the ratio.
This again points out that the company is planning a project and requires finance for it. Profit after tax increased by Cost of sales rose by 4.
The quick ratio shows the firms ability to re-pay its current liabilities after what is usually the least liquid asset of the current asset is subtracted.
The cycle is much better than the competitor On the other hand, ROE showed a better increase to the ratio as it increased from 4. One potential price for all of this growth is currently being illustrated in the ongoing legal wrangles about the use of water by cement plants near the Katas Raj Temples.
DPO has been falling till 13 except in 11 which means the company is trying to reduce the payback time to its suppliers. This was driven mainly by an increase in export sales, increase in transportation prices and particularly the increase in sea freights, which accounted for nearly 50 percent of total export expenses in FY DPO measures the number of days it takes for the company to pay its suppliers, on average, during a fiscal year.
The trend is the same as other profitability ratios with an overall increase of 4. The reason is clear from the financial statements which show that the cash balance in that year reduced significantly The company has a lower payable turnover ratio as compared to competitors which isnt a good sign because it would mean comparatively its paying later to its payable which signals a cash problem which the company might be facing and if not resolved it could harm the companys relations with suppliers.
Secondly, the price earning multiple showed a huge decline in FY09, but a sharp rise in 1Q This is because of an increase in the DSI ratio specifically as the DSO has remained almost the same so this would mean that the operating cycle has become a bit longer because it takes longer to convert the inventory into sales.
Profitability-wise, the company had performed well with most of its ratios showing an upward trend in FY It indicates stability and low chances of bankruptcy mainly based on equity The debt ratio of lucky cement is low compared to industry ratios which is a good indicator.
Fluctuations in the ratio can be explained by instability in average receivables and credit sales. This is further indicative of the fact that creditors trust the company and it has a credible reputation. Despite rising cost of inputs, Lucky seems to have managed its cost of sales well as the gross margins went up to The [above information] is general in nature and has not been prepared for any specific decision making process.
It is the calculation of how much are investors willing to pay per dollar of book value. Project) * An analysis of the financial situation Of Fauji Cement Company Limited Word Count: (4,) Presented by: Registration No: March CONTENTS Page 1.
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