IBF Report on Power Cement

BY: - SEEMA KHAN (22181)

Group Members :
Yuman Amir
Zara Ahmad
Zahra Gul
To: - MA’AM MISBAH IQBAL
Course: - IBF
Date: 12/16/2019
S# TABLE OF CONTENTS PAGE NO.

1 PAKISTAN ECONOMIC SURVEY 2016 to 2019 2-7

2 PAKISTAN CEMENT INDUSTRY ANALYSIS 7-8

3 POWER CEMENT PROFILE 9

4 BALANCE SHEET 10

5 BALANCE SHEET TREND ANALYSIS & COMMON SIZE 11

6 INCOME STATEMENT 14
INCOME STATEMENT TREND ANALYSIS & COMMON SIZE
7 15

8 ACTIVITY RATIOS ANALYSIS 16-20

9 LIQUIDITY RATIOS ANALYSIS 20-21

10 SOLVENCY RATIOS ANALYSIS 21-24

11 PROFITABILITY RATIO ANALYSIS 24-28

12 VALUATION RATIOS ANALYSIS 28-34

13 CONCLUSION 34

1
 INTRODUCTION:-
This study examines the Impact of Pakistan economic growth and development from past 3
years. Available literature review shows both negative and positive impacts of development.
Including various cross-country thinks about has appeared positive relationship between trade
openness and financial development. The changing global condition in fund, HR, innovation,
legislative issues, financial matters, and social conditions has made open doors for the
entrepreneur’s ventures to extend their worldwide organizations at a lot quicker pace. Its
effect on system will be significant, yet additionally uncertain. Common clash and
psychological warfare utilizing weapons of mass demolition are among the new dangers that
can puzzle customary apparatuses of system. Echinococcus multilocularis, the reason for
human alveolar echinococcosis, has been accounted for in a few new nations both in
conclusive hosts due to globalization. By analyzing Pakistan’s per capita income, performance
of economy, sector contribution in GDP, real GDP growth.
Pakistan’s economy continues to perform impressively and its economic fundamentals have
gained further traction in the fiscal year 2016-17. After the elections of 2013 when the
previous government came into power it particularly focused on the revival of the economy
and within a short period of time it achieved considerable gains in restoring economic stability.
Pakistan likewise endeavored to incorporate its economy in the worldwide economy through
changing its speculation and exchange routine inside the structure of the IMF and the World
Bank. A survey of writing demonstrates that in spite of the fact that various cross-country
examines have appeared positive relationship between trade openness and monetary
development. As being
an agriculture country
they mainly focused in
this sector and
introduced more job
opportunities.
Throughout the most
recent four decades,
the structure of
Pakistan's GDP has
experienced extensive
change as the offer of
administrations division in GDP has expanded. The legislature stayed submitted in giving
business well-disposed condition so as to attract foreign investment interest in the nation,
China-Pakistan Economic Corridor (CPEC) is an achievement in such manner. In 2017-18,
services sector kept up the development force.
2
Above graph is just an overview of Pakistan economic growth in different sectors over a
decade. During FY 2018, GDP development of 5.79 percent is shared between the services and
commodity producing (agriculture and industry) segments of the economy. The two segments
(agriculture & industry) of item creating segments have appeared in contributing in by and
large economic growth. Out of the commodity producing sector, agribusiness division shared
0.73 percentage focuses to by and large GDP development when contrasted with 0.41
percentage focuses a year ago, while industrial sector contributed 1.21 rate focuses in FY 2018
when contrasted with 1.14 percentage purposes of a year ago. Amid FY 2018, services sector
contributed 3.85 percent guides analyzed toward 3.83 percentage focuses.

“PAKISTAN ECONOMIC SURVEY

GDP GROWTH: -
When the previous government came in to power in 2013 since then from there very first year
the increase in GDP of Pakistan was recorded until 2017. Inflation rate remained 4.09% while
the volume of Pakistan’s economy surpassed $300 billion.
During their tenure and by the end of 2015 a massive jump in Pakistan’s agriculture sector was
recorded, which was 0.3% in 2015-2016 to 3.5% in 2016-2017.Moreover Growth of forestry is
7.17 percent due to high timber production reported by Khyber Pakhtunkhwa (KPK).
The services sector has also recorded an increase in growth as it finished at 5.98% in 2016-
2017 compared to last year’s figures which enabled it to stand at 5.70%. The increased caused
by the following reasons:
I. Revenues from telecom sector reached an estimated Rs 235.5 billion.
II. E commercial launch of 3G and 4G Long Term Evolution (LTE) services opened new
opportunities for revenue generation for the mobile operators.
The broadband penetration jumped from 3.7 million to 52 million

E agriculture, industrial and service sectors of Pakistan grew by 3.8percent. Economy

continued to benefit from growth oriented initiatives, including higher development spending,
low inflation, vigilant monetary policy, and CPEC related investment thus providing impetus for
economic recovery.
Industrial growth was at the best phase if compared to the past 10 years and it was increased
by the rate of 5.80% till 2016, However it declined to 5.0% in 2017 due to unstable political
situation of the country.
3
 Investment and Savings Total investment was reached to the level of Rs. 5026 billion as
compared to the Rs 4526 billion previous years. Investment to GDP ratio was reached to 15.78
percent in FY 2017. Fixed investment was increased to Rs 4517 billion as compared to Rs. 4061
billion previous years. National savings were 13.1 percent of GDP in FY2017 against 14.3
percent last year. Domestic savings were recorded at 7.5 percent of GDP in outgoing fiscal year
as compared to 8.2 percent of GDP last year.
Per capita income is one of the most useful and accurate measures of the well-being of
countries around the world. It is a vital economic indicator that also points out to the
economic development that has taken place in a country.
As per the Economic Survey of Pakistan, the per capita income has seen a growth of 6.4% in
FY2017 as compared to last year when the figure stood a 1.1%. Foreign Direct Investment
Pakistan also registered a growth in FDI for this year.
According to the Economic Survey of Pakistan, a 12.75% growth was registered in FDI as
compared to last year. Currently, Pakistan’s FDI stands at Rs. 1.733 billion whereas last year it
stood at $1.537 billion. Major FDI inflows Major FDI inflows during the period under review
were from China ($ 744.4 Million), Netherland ($478.6 Million), France ($171.0 Million), Turkey
($137.7 Million), US ($103.2 Million), U.A.E ($ 48.4 Million), UK ($47.6 Million), Italy ($ 47.4
Million), Japan ($ 42.1 Million) and Germany ($ 40.5 Million).
Fiscal deficit decreases to 4.2 percent the fiscal deficit of Pakistan has also registered a
decrease. From 2015-16 when it was 4.6 percent; the fiscal deficit has been brought down to
4.2 percent. As can be seen, the fiscal deficit has been decreasing ever since 2012-2013 when
it was at a staggering 8.2 percent.
Overall the economic year of Pakistan 2016-2017 was pretty good; many growths were
recorded in different industries and sectors. Other sectors like wise manufacturing grew by
6.24 percent, which is highest in 11 years of economic history
Financial year (FY) that During FY 2018, GDP development of 5.79 percent is shared between
the services and commodity; the two segments (agriculture & industry) of item creating
segments have appeared in contributing in by and large economic growth. Out of the
commodity producing sector, agribusiness division shared 0.73 percentage focuses to by and
large GDP development when contrasted with 0.41% focuses a year ago, while industrial
sector contributed 1.21 rate focuses in FY 2018 when contrasted with 1.14 percentage
purposes of a year ago. Amid FY 2018, services sector contributed 3.85 percent guides
analyzed toward 3.83 percentage focuses a year ago.

4
 Amid FY2018, per capita pay expanded by 0.5 percent to $1,641. According to PBS
(Pakistan Bureau of Statistics), per capita pay amid 2016-17 is Rs. 162,230 ($1,641) in view of
provisional figures of Population Census 2017 held in March 2017 207,774,520. The amended
arrangement of per capita salary will be accumulated after conclusion of sixth Housing and
Population Census.
During the fiscal year of 2017-2018 the change in exports can be seen by the increase 12.0
percent while imports have slowed down to 16.6 percent as compared to 48 percent at the
start of current financial year.
The following trend was fade out due to Government supportive initiatives towards lowering
the imports of luxury items in order control the monetary supply of money. The government’s
vision is
focused on
the

diversification of exports to include new products/services and partners, increased

involvement in global value chains, increasing foreign direct investment greater revenue
collection, transparency in trade transactions and expanded participation of small and
medium-sized enterprises in international trade. SBP has prepared a comprehensive ‘Policy for
Promotion of SME Financing’ which was launched by Prime Minister of Pakistan on December
22, 2017. The policy will enhance the share of SME financing in total private sector credit from
8.8 percent as of December 2017.
Growth and Investments: -
The growth momentum remained above 5 percent for the last two years in a row and reached
5.79 percent in FY2018 which is 13 years high on account of a strong performance in
agriculture, industry and services sectors which grew by 3.81 percent, 5.80 percent and 6.43
percent, respectively.
1. Agriculture: -Agriculture sector recorded a remarkable growth of 3.81 percent and
exceeded its targeted growth of 3.5 percent and also last year’s growth 2.07 percent.

5
 2. Manufacturing and Mining: -During July-February FY 2018, the Large Scale
Manufacturing (LSM) registered a growth of 6.24 percent as compared to 4.40 percent
in the same period last year. On Year on Year (YoY), LSM recorded a growth of 5.52
percent in February 2018 compared to 9.47 percent in February 2017.

INFLATION: - During current fiscal year FY 2018, CPI increased to 4.6 percent which was the
highest since the start of current fiscal year FY 2018, in January 2018 it was came down to 4.4
percent and in March 2018, it fell eight month low at 3.2 percent on account of subdued food
prices which offset the impact of rise of petroleum prices.

Pakistan’s political and economic management history, fiscal year 2018-19 represents a break
from the past. People of Pakistan voted into power a new party – Pakistan Tehreek-i-Insaaf
(PTI) – mainly as it was seen to provide a transparent, more efficient government with a more
egalitarian development agenda. However so far they are badly failed to do so. The present
government inherited a weakening economy. The fiscal deficit was high, the current account
deficit was also at the highest level in country’s economic history, debt liabilities had risen to a
level where servicing of the debt took a sizeable portion of the federal government’s budget,
and foreign exchange reserves had depleted to a level that was insufficient to finance even
two months of imports. This instability was a result of structural weaknesses in the economy.
Some proofs of weak governance are being seen by various sectors of the economy. However
the new elected government faces formidable macroeconomic challenges. The foremost
challenge to the economy is the rising aggregate demand without corresponding resources to
support it, leading to rising fiscal and external account deficits.
Few good aspects are also taken place like wise as a short-term measure to get a breathing
space; the current government secured $ 9.2 billion from friendly countries to build up buffers
and to ensure timely repayment of previous loans.
The outgone fiscal year 2018-19 witnessed a muted growth of 3.29 percent against the
ambitious target of 6.2 percent. The target was based upon sectorial growth projections as
previous government have forecasted due to do good establishment policies, for agriculture,
industry, and services at 3.8 percent, 7.6 percent and 6.5 percent respectively. The actual
sectorial growth turned out to be 0.85 percent for agriculture, 1.4 percent for industry and 4.7
percent for services. Some of the major crops witnessed negative growth as production of
cotton, rice and sugarcane declined by 17.5 percent, 3.3 percent and 19.4 percent
respectively. The crops showing positive growth include wheat and maize which

6
 Grew at the rate of 0.5 percent and 6.9 percent respectively. Other crops have shown
growth of 1.95 percent
Growth and Investment: -
The provisional GDP growth rate for FY2019 is estimated at 3.29 percent. Various departments
have grown accordingly as explained below. However it is yet being confirmed that Pakistan
economy is facing a hard times. Though if we compare to the first year of Nawaz Government
with the first year of Imran’s Government the huge difference would be seen in terms of
success.
1. Agriculture: -The provisional agriculture sector growth is estimated at 0.85 percent. The
crops sector has witnessed negative growth of 4.4 percent during FY2019 mainly due to
negative growth (-6.6 percent) of important crops. Moreover Production of cotton and
sugarcane the two very important cash crops were also declined.
2. Industry: - During FY2019, the provisional growth in industrial sector has been
estimated at only 1.40 percent mainly due to decline by 2.06 percent in large scale
manufacturing sector and by 1.96 percent in mining and quarrying sector. The decline
was faced because many companies have been shut down and the FDI (foreign Direct
Investment) was also effected due to bad governance.
3. Investment: -The provisional estimates of Gross Fixed Capital Formation (GFCF) for the
year FY2019 stands at Rs.5340.0 billion with a growth of 1.9 percent. In private sector,
the GFCF is estimated at Rs.3796.1 billion during FY2019 against Rs.3564.0 billion in
FY2018 with an increase of 6.5 percent, while in Public Sector GFCF posted a growth of
9.8 percent as it is estimated at Rs.345.3 billion during FY2019 against Rs.314.6 billion
during FY2018.

Industry Analysis:-
The cement industry is important for the economy. Besides making a direct contribution of 7.5
percent to large-scale manufacturing, the industry influences growth in the allied segments
(e.g., steel; chemicals, wood etc). At present, there are 24 manufacturing units operating in
the country with a total installed annual capacity of 49.4 million tons.1 The industry operates
in two separate zones - North and South - with Northern Zone representing around 80 percent
of the total production capacity and sales.2 The manufacturers in the South Zone have more
room for revenue diversification as they can tap a number of export markets (via sea).3 The
export potential for manufacturers in the Northern Zone, however, is limited to Afghanistan
and India only. The cement industry is experiencing a bulk transformation, as a number of
cement industrialist are planning capacity expansions. There are 24 manufacturing units

7
 operating in the country with a total installed annual capacity of 49.4 million tons.
About 3 million tons capacity has already been added during fiscal year 2018. It is predicted
that in aggregate terms, the cement sector production capacity will increase by about 50
percent in the next couple of years. The SBP estimated that additional capacity would result in
the imports of machinery of around about Rs 178 billion over next few years. In the cement
industry, cost of machinery imports comes around 70 percent of total cost of the project.
Cement industry in Pakistan grew by 13.84% to 45.89 million tons during the fiscal year ended
June 30, 2018 in comparison to 40.32 million tons during last year. While local sales volume
registered a growth of 15.42% to 41.15 million tons during the current fiscal year in
comparison to 35.65 million tons last year; export sales volume registered an increase of
1.77% to 4.75 million tons during the current fiscal year under review as compared to 4.66
million tons last year. The industry fared better owing to higher infrastructure demand and
real estate construction activities. Sufficient capacities in the South zone are also expected to
support export growth. The domestic demand in South Zone, where your Company is situated,
stood at 7.18 million tons, i.e., a growth of 10.26% over the prior year. Concurrently, the
export demand increased to 1.66 million tons, as against 1.51 million tons in the prior year, an
increase of 10.03%. As a result, the South Zone closed at a total dispatch of 8.84 million tons.
In contrast, the North Zone’s domestic demand in the current year grew by 16.57% and export
demand for the same year declined by 2.20%. As a result, the net growth of North Zone was
recorded at 14.74%.
Some of the companies in cement industry of Pakistan are: ATTOCK CEMENT (PAKISTAN)
LIMITED,  BESTWAY CEMENT LIMITED, D.G. KHAN CEMENT COMPANY LIMITED, DEWAN CEMENT
LIMITED, FAUJI CEMENT COMPANY LIMITED,  FLYING CEMENT COMPANY LIMITED, LUCKY CEMENT
LIMITED,  PIONEER CEMENT LIMITED,  POWER CEMENT LIMITED and etc..

COMPANY PROFILE

8
 Power Cement Limited was established as
Private Limited Company on 01st December, 1981
and was converted into Public Limited Company on
09 July 1987 and is listed on Karachi and Lahore
Stock Exchange. The Company was formerly known as
Al Abbas Cement Industries Limited. Power
Cement Limited and its principal activity is manufacturing, sell and marketing of
cement. The registered office of the Company is situated at 23, Arif Habib Center,
M. T. Khan Road, Karachi and its undertaking is situated at DehKaloKohar,
Nooriabad Industrial Estate, District Dadu (Sindh).
Power Cement Limited manufactures, markets, and sells cement under the Power
Cement, Black Bull Cement, Blue Star Cement, and Estate Cement brand names in
Pakistan. Its product portfolio includes ordinary Portland cement, Sulphate
resistant cement, and Portland blast furnace slag cement. Power Cement Limited
also exports its products.

9
 Statement of Financial Position
  2018 2017 2016 2015 2014
ASSETS

Non-Current Assets          

Property, plant and equipment 19,843,344 5,248,476 4,444,992 4,422,961 4,402,670

Intangible assets 1,077 8,977 8,982 413 -
Investments 13,124 13,220 - - -
Long term deposits 19,635 19,635 19,635 19,635 19,635
  19,877,180 5,290,308 4,473,609 4,443,009 4,422,305
Current Assets          
Stores, spares and loose tools 1,067,082 999,837 693,578 562,409 642,543
Stock-in-trade 301,909 224,731 165,221 284,975 177,302
Trade debts 456,212 331,301 271,667 259,722 143,038
Advances and other receivables 1,088,526 364,524 295,812 96,306 141,603
Trade deposits and prepayments 10,305 7,824 9,005 7,256 7,818
Tax refunds due from government 510,501 359,770 319,103 287,265 245,730
Short term investments 84,000 220,500 - - -
Cash and bank balances 1,121,591 3,588,319 14,983 47,267 5,476
  4,640,126 6,096,806 1,769,369 1,545,200 1,363,510
           
Total Assets 24,517,306 11,387,114 6,242,978 5,988,209 5,785,815

EQUITY AND LIABILITIES 2018  2017  2016  2015  2014

SHARE CAPITAL AND RESERVES        
Authorized share capital        
1,200,000,000 (30 Jun 2017:          
1,200,000,000)
Ordinary shares of Rs. 10/- each 12,000,00 12,000,00 4,000,00 4,000,00 4,000,00
0 0 0 0 0
           
Issued, subscribed and paid-up capital  
1,063,414,434 (30 Jun 2017: 365,689,968)          
Ordinary shares of Rs. 10/- each 10,634,14 3,656,90 3,656,90 3,656,90 3,656,90
4 0 0 0 0
Premium / (Discount) on issuance of 750,7 (914 (914, (914, (914,22
shares 750,714 (914,225) 14 ,225) 225) 225) 5)
Advance against right issue - 6,049,05 - 80,00 80,00
7 0 0
Accumulated loss (85,79 (397,49 (394,56 (960,50 (1,394,13
6) 1) 5) 5) 3)
  11,299,06 8,394,24 2,348,11 1,862,17 1,428,54
2 1 0 0 2
LIABILITIES    
NON-CURRENT LIABILITIES          
Long-term financing 9,460,00 110,00 360,00 360,00 923,80
0 0 0 0 5

10
 Deferred accrued mark-up - - 151,03 545,39 -
2 7
Loans from related parties-unsecured - - 908,89 1,169,05 1,172,99
2 5 0
Deferred taxation 441,40 444,26 483,47 205,21 27,98
3 1 5 4 5
Staff retirement benefits 78,78 57,38 46,34 39,55 33,16
2 9 1 9 4
  9,980,18 1,949,74 2,319,22 2,157,944
5 611,650 0 5
CURRENT LIABILITIES          
Loan from previous sponsors 73 73 73 73 73
5 5 5 5 5
Trade and other payables 1,844,80 784,35 723,16 608,01 935,44
1 6 0 9 1
Unclaimed Dividend 12 12 - - -
6 6
Accrued mark-up 249,50 11,21 5,32 15,65 13,01
7 4 9 5 9
Short-term financing 1,032,89 1,107,66 708,75 687,29 544,18
0 9 0 7 2
Current portion of long term financing 110,00 250,00 - 250,00 705,95
0 0 0 2
Current portion of deferred accrued - 227,12 507,15 245,10 -
markup 3 4 8
  3,238,05 2,381,22 1,945,12 1,806,81 2,199,32
9 3 8 4 9
           
TOTAL EQUITY AND LIABILITIES 24,517,30 11,387,11 6,242,97 5,988,20 5,785,81
6 4 8 9 5

Balance Sheet (Trend Analysis)

  2018 2017 2016 2015 2014
ASSETS    
Non-Current Assets    
Property, plant and equipment 351% 19% 1% 0% 0%
Intangible assets 0% 0% 0% 0% 0%
Investments 0% 0% 0% 0% 0%
Long term deposits 0% 0% 0% 0% 0%
  349% 20% 1% 0% 0%
Current Assets    
Stores, spares and loose tools 66% 56% 8% -12% 0%
Stock-in-trade 70% 27% -7% 61% 0%
Trade debts 219% 132% 90% 82% 0%
Advances and other receivables 669% 157% 109% -32% 0%
Trade deposits and 32% 0% 15% -7% 0%
prepayments
Tax refunds due from 108% 46% 30% 17% 0%
government
Short term investments 0% 0% 0% 0% 0%

11
 Cash and bank 20382% 65428% 174% 763% 0%
balances
  240% 347% 30% 13% 0%
     
Total Assets 324% 97% 8% 3% 0%

Balance Sheet (Trend Analysis)

 
 
EQUITY AND LIABILITIES          
SHARE CAPITAL AND RESERVES    
Authorized share capital    
1,200,000,000 (30 Jun 2017: 1,200,000,000)    
Ordinary shares of Rs. 10/- each 200% 200% 0% 0% 0%
     
Issued, subscribed and paid-up capital    
1,063,414,434 (30 Jun 2017: 365,689,968)    
Ordinary shares of Rs. 10/- each 191% 0% 0% 0% 0%
Premium / (Discount) on issuance of shares 750,714 -182% 0% 0% 0% 0%
(914,225)
Advance against right issue 0% 7461% 0% 0% 0%
Accumulated loss -94% -71% -72% -31% 0%
  691% 488% 64% 30% 0%
LIABILITIES    
NON-CURRENT LIABILITIES    
Long-term financing 924% -88% -61% -61% 0%
Deferred accrued mark-up 0% 0% 0% 0% 0%
Loans from related parties-unsecured 0% 0% -23% 0% 0%
Deferred taxation 1477% 1487% 1628% 633% 0%
Staff retirement benefits 138% 73% 40% 19% 0%
  362% -72% -10% 7% 0%
CURRENT LIABILITIES    
Loan from previous sponsors 0% 0% 0% 0% 0%
Trade and other payables 97% -16% -23% -35% 0%
Unclaimed Dividend 0% 0% 0% 0% 0%
Accrued mark-up 1816% -14% -59% 20% 0%
Short-term financing 90% 104% 30% 26% 0%
Current portion of long term financing -84% -65% 0% -65% 0%
Current portion of deferred accrued markup 0% 0% 0% 0% 0%
  47% 8% -12% -18% 0%
     
TOTAL EQUITY AND LIABILITIES 324% 97% 8% 3% 0%

Balance Sheet (common size)

  2018 2017 2016 2015 2014

12
 ASSETS    
Non-Current Assets    
Property, plant and equipment 81% 46% 71% 74% 76%
Intangible assets 0% 0% 0% 0%  
Investments 0% 0%  
Long term deposits 0% 0% 0% 0% 0%
  81% 46% 72% 74% 76%
Current Assets    
Stores, spares and loose tools 4% 9% 11% 9% 11%
Stock-in-trade 1% 2% 3% 5% 3%
Trade debts 2% 3% 4% 4% 2%
Advances and other receivables 4% 3% 5% 2% 2%
Trade deposits and prepayments 0% 0% 0% 0% 0%
Tax refunds due from 2% 3% 5% 5% 4%
government
Short term investments 0% 2%  
Cash and bank balances 5% 32% 0% 1% 0%
  19% 54% 28% 26% 24%
     
Total Assets 100% 100% 100% 100% 100%

EQUITY AND LIABILITIES BALANCE SHEET COMMON SIZE

SHARE CAPITAL AND RESERVES    
Authorized share capital    
1,200,000,000 (30 Jun 2017: 1,200,000,000)    
Ordinary shares of Rs. 10/- each 49% 105% 64% 67% 69%
     
Issued, subscribed and paid-up capital    
1,063,414,434 (30 Jun 2017: 365,689,968)    
Ordinary shares of Rs. 10/- each 43% 32% 59% 61% 63%
Premium / (Discount) on issuance of shares 750,714 3% -8% -15% -15% -16%
(914,225)
Advance against right issue   53% 1% 1%
Accumulated loss 0% -3% -6% -16% -24%
  46% 74% 38% 31% 25%
LIABILITIES    
NON-CURRENT LIABILITIES    
Long-term financing 39% 1% 6% 6% 16%
Deferred accrued mark-up - - 2% 9%  
Loans from related parties-unsecured - - 15% 20% 20%
Deferred taxation 2% 4% 8% 3% 0%
Staff retirement benefits 0% 1% 1% 1% 1%
  41% 5% 31% 39% 37%
CURRENT LIABILITIES    
Loan from previous sponsors 0% 0% 0% 0% 0%
Trade and other payables 8% 7% 12% 10% 16%

13
 Unclaimed Dividend 0% 0%  
Accrued mark-up 1% 0% 0% 0% 0%
Short-term financing 4% 10% 11% 11% 9%
Current portion of long term financing 0% 2% 4% 12%
Current portion of deferred accrued markup - 2% 8% 4%  
  13% 21% 31% 30% 38%
     
TOTAL EQUITY AND LIABILITIES 100% 100% 100% 100% 100%

Income Statement
  2018 2017 2016 2015 2014
Sales - net 4,343,240 4,480,623 4,144,455 3,831,069 3,496,103
Cost of sales (3,668,172) (3,500,092) (3,197,480) (2,859,929) (3,151,266)
Gross Profit 675,068 980,531 946,975 971,140 344,837
       
Selling and distribution (115,806) (106,154) (106,504) (181,597) (260,489)
cost
Administrative cost (131,708) (76,366) (59,528) (58,981) (68,882)
Other income 1,676 5,968 3,021 1,991 8,763
Other operating expenses (71,210) 4,124 (70,104) (64,779) (18,008)
  (317,048) (172,428) (233,115) (303,366) (338,616)
       
Operating profit/EBIT 358,020 808,103 713,860 667,774 6,221
       
Finance income 112,359 5,345 333,792 309,253 230,836
Finance costs (121,601) (248,273) (282,880) (361,022) (377,328)
Finance costs - net (9,242) (242,928) 50,912 (51,769) (146,492)
       
Profit before 348,778 565,175 764,772 616,005 (140,271)
taxation/EBT
Taxation (28,871) (98,382) (278,381) (182,172) 66,362
       
Profit after taxation/EAT 319,907 466,793 486,391 433,833 (73,909)

Income Statement (Trend Analysis)

  2018 2017 2016 2015 2014
Sales - net 24% 28% 19% 10% 0%
Cost of sales 16% 11% 1% -9% 0%
     
Gross Profit 96% 184% 175% 182% 0%
     
Selling and distribution cost -56% -59% -59% -30% 0%
Administrative cost 91% 11% -14% -14% 0%
Other income -81% -32% -66% -77% 0%

14
 Other operating expenses 295% -123% 289% 260% 0%
  -6% -49% -31% -10% 0%
Operating profit/EBIT 5655% 12890% 11375% 10634% 0%
Finance income -51% -98% 45% 34% 0%
Finance costs -68% -34% -25% -4% 0%
Finance costs - net -94% 66% -135% -65% 0%
Profit before taxation/EBT -349% -503% -645% -539% 0%
Taxation -144% -248% -519% -375% 0%
Profit after taxation/EAT -533% -732% -758% -687% 0%

Income Statement (common size)

  2018 2017 2016 2015 2014
Sales - net 100% 100% 100% 100% 100%
Cost of sales -84% -78% -77% -75% -90%
     
Gross Profit 16% 22% 23% 25% 10%
     
Selling and distribution -3% -2% -3% -5% -7%
cost
Administrative cost -3% -2% -1% -2% -2%
Other income 0% 0% 0% 0% 0%
Other operating expenses -2% 0% -2% -2% -1%
  -7% -4% -2% -8% -10%
     
Operating profit/EBIT 8% 18% 17% 17% 0%
     
Finance income 3% 0% 8% 8% 7%
Finance costs -3% -6% -7% -9% -11%
Finance costs - net 0% -5% 1% -1% -4%
     
Profit before 8% 13% 18% 16% -4%
taxation/EBT
Taxation -1% -2% -7% -5% 2%
  -1%  
Profit after taxation/EAT 7% 10% 12% 11% -2%

15
Analysis of Ratios

ACTVITIY RATIOS        
  2018 2017 2016 2015
         
Average Receivables 621862.5 467134.5 401528 331241
Average net Fixed Assets 25167488 9763917 8916618 8865314
         
         
Inventory Turnover 14.39 19.94 25.08 13.44
Days of Inventory on hand 25.36 18.30 14.55 27.16
Receivable Turnover 6.98 9.59 10.32 11.56
Days of Sales Outstanding 38.34  26.99  35.36 36
Net Working Capital 2.01 8.86 18.17 15.97
Fixed Asset Turnover 0.17 0.46 0.46 0.43
Total Asset Turnover 1.30 4.10 7.79 7.24
         

INVENTORY TURNOVER:
The analysis shows that from 2015 to 2018, the inventory turnover trend of power cement has
fluctuated between 5 to 6 times a years. In 2018 Power cement converts its inventory into cost of goods sold
on an average of 6.4 times a year. In 2018 inventory turnover decreased from 19.94 to 14.39. During the year
2017, the inventory turnover has decreased from 25.08 times a year in 2016 to 19.94 times a year. The
analysis shows that the reason for this decrease is the 16% increase in cost of goods sold from last year. The
increase in COGS occurred due to increase in during the fiscal year 2017-18 under review, the increase in cost
of sales was mainly attributable to increase in coal, packing material and fuel prices.

INVENTORY TURNOVER
  2019 2018 2017 2016 2015

Fauji Cement 3.7 4.25 5.34

Attock Cement 4.54 4.19 4.59
Power Cement 6.4 14.4 19.9
Lucky Cement 3.145 3.22 3.05

16
  
Average 4.45 6.5 8.2

The analysis shows that the industry average has fluctuated between 8 to 4 times a years, thus power
cement is managing its operations well because the company’s turnover is greater than the industry.

DAYS OF INVENTORY ON HAND:

The analysis shows that from 2015 to 2018, the inventory turnover in day’s trend of power cement
takes an 25 days to convert its inventory into cost of goods sold. The year 2018 shows an increase in the days
it takes power cement to convert its inventory into COGS. In the year 2018, the company takes almost 25 days
to convert its inventory into COGS, which is due to the same reasons as stated above i.e. increase in cost of
goods sold from last year. If we compare it with previous years we can observe a continue increase in days.
The increase in COGS occurred due to increase in coal price and packing materials and fuel price used by
power cement. Also exchange rate is continually increasing.

DAYS OF INVENTORY ON HAND

  2019 2018 2017 2016 2015

Fauji Cement 98 86 68
Attock Cement 80 87 79.5
Power Cement 57 25 18
Lucky Cement 116 113 120

Average 87.75 77.75 71.375

The analysis of the industry shows that power cement is managing its operations well since the industry
takes more days to convert its inventory into COGS.

RECEIVABLE TURNOVER:
The analysis shows that power cement has a decreasing trend for recovering its trade debts. In the
year 2016 and 2017, the receivable turnover revolved around 10 to 9 times. In the year 2018, the receivable
turn over dropped to 6 times because of the company’s increase in the average collection period. A decline in
the receivable turnover normally implies a lower liquidity for the company. While the company liquidity is at
good position. In the year 2017 and 2018, power cement has also increased its short-term borrowings to 104%
and 90% compared to previous years, on which the company will also pay interest. Hence, this also
contributed in the lower liquidity.

RECEIVABLE TURNOVER
  2019 2018 2017 2016 2015

Fauji Cement 18.7 14.05 12.4

Attock Cement 27.6 37.05 75.26
Power Cement - 6.9 9.6
Lucky Cement 0 0 0

17
 Average 15.43 19.33 24.315

The industry analysis shows that the industry collects its receivables on an average of 15 to 84 times a year
whereas power cement collects its receivables on an average of 6 to 9 times a year. The difference is due to
power cement’s credit policy.

DAYS OF SALES OUTSTANDING:

The analysis shows that power cement shows an increasing trend for recovering its trade debts from
2017 to 2018. Which implies that the company has not a strict credit policy? In the year 2017, Power cement
Pakistan average collection period is very long it should be strict to some extent. A lenient credit policy shows
that company sales will be higher. I.e. higher profits followed by lower liquidity. However, power cement has
enough liquidity which is now decreasing as current ratio of 2018 is 1.4 which was 2.6 in previous year.

DAYS OF SALES OUTSTANDING

  2019 2018 2017 2016 2015

Fauji Cement 19.5 26 29

Attock Cement 13 9.85 4.85
Power Cement 36.6 38 27
Lucky Cement

Average 17.3 24.6 20.3

The industry analysis shows that power cement has no strict credit policy because on an average the
industry takes around 17 to 20 days to recover the credit whereas power cement offers an average
collection period of 36 days to recover its debt.

NET WORKING CAPITAL:

The analysis of Power Cement Net Working Capital from the year 2015 to 2018 shows fluctuations over
years. But as compared to 2017 total current assets in 2018 has be decreased. Still company current assets are
higher than current liabilities. Over the years net working capital has been decreased from 15 to 2.From 2015-
2018, the net working capital of the company has declined also the company’s followed by the increase in
revenue but still it is not enough to indicate that the company is efficiently utilizing its net working capital.

NET WORKING CAPITAL

  2019 2018 2017 2016 2015

Fauji Cement 10.5 8.4 7.4

Attock Cement -21.8 -8.8 17.6
Power Cement -0.36 2.01 8.86
Lucky Cement 25.8 3.32 2.14

18
 Average 3.5 1.23 9

The industry analysis reveals that the average net working capital of the industry has been 3 to 9throughout
the past five years. This reflects that the company is not efficiently investing the extensive loans it has taken
because the company’s liabilities have exceeded its assets as shown by the negative net working capital in
the last five years.

FIXED ASSET TURNOVER

The analysis reflects an decreasing trend of fixed asset turnover over the period of five years. With Re.1
worth of investment in fixed assets, the company has generated an average revenue of Rs. 0.17 during the
year 2018. The lower ratio of fixed asset turnover is not good for the company because it is higher it
contributes in maximizing the revenue of the company. Power cement would further expect this ratio to
increase in the coming years because the investment in fixed assets leads to increased benefits in the future
and not in the current year. Also they have installed new software’s such as ERP that will help them to
improve their processes further. For the past 5 years, power cement one of the major investment in fixed
assets include purchase of property, plant & equipment along with long-term loans.

FIXED ASSET TURNOVER

  2019 2018 2017 2016 2015

Fauji Cement 0.9 0.95 0.93

Attock Cement 1.06 0.89 1.19
Power Cement - 0.2 0.5
Lucky Cement 1.37 1.7 1.73

Average 1.11 0.9 1.09

The industry analysis shows that power cement is lagging behind the industry because the industry had an
average fixed asset turnover of Rs.1 against Re.1 worth of investment during the same years.

TOTAL ASSET TURNOVER:

The turnover from the total assets of power cement has also shown an decreasing trend from 2015 to
2018. The decreasing trend suggests that the company is not has managing its assets efficiently, in order to
increase its sales. The total asset turnover has fluctuated between Rs. 7.2 to 1.3 against Re. 1 investment.

TOTAL ASSET TURNOVER

  2019 2018 2017 2016 2015

Fauji Cement 0.72 0.745 0.715

Attock Cement 0.77 0.7 0.8
Power Cement 1.45 1.3 4.1
Lucky Cement 0.57 0.65 0.67

Average 0.88 0.85 1.57

19
 The industry analysis shows that power cement’s total asset turnover was higher than that of
industry. Particularly in the year 2016 & 2017, it had been more than the industry average. This reflects the
fact that the company had managed its total assets efficiently in the last five years.

LIQUIDITY RATIOS        
  2018 2017 2016 2015
Advances less Prepayments        
         
Current Ratio 1.4 2.6 0.9 0.86
Quick Ratio 1.3 2.5 0.8 0.7
Cash Ratio 0.37 0.00 0.01 0.02
         

CURRENT RATIO:
The current ratio of power cement has shown a declining trend between the years 2017 to 2018
because the company’s current liabilities have increased by 47% while current assets have been decreased by
240%.
The decline prominently occurred because the company’s current liabilities have kept increasing during the
past 5 years. The company’s short-term borrowings have shown a hefty increase of 90% from the year 2017 to
2018. The analysis shows that on an average, the company has 1.4 Rs. to pay off 1Rupee worth of liability,
which is not bad but if we compare it with year 2017 it shows that it has decreased over the year.

CURRENT RATIOS
  2019 2018 2017 2016 2015

Fauji 1.51276910 1.48830 2.12163 1.51167

Cement 5 6 8
Attock 0.9 0.87 0.5 0
Cement
Power 0.7 1.4 2.6 0.9
Cement
Lucky 1.08475575 1.89798 2.64168 2.37510
Cement 1 1 8 5

Average 1.05 1.41407 1.96583 1.19669  

2 2 4

The analysis of the industry shows that from the year 2016 to 2018, on an average, the industry had Rs.1.5
worth of assets to pays off its Re.1 worth of liability. In light of the above analysis, we can analyze that
power cement’s current assets were managed well as they were enough to pay off the company’s current
liabilities.

QUICK RATIO:

20
 The analysis of the quick ratio from year 2015 to 2018 shows that the liquidity of the company
has gone down but the difference is not huge. But it shows that company has enough liquid assets. The
declining quick ratio trend over a year suggests that on an average, the company has 1.34Rs. Worth of current
assets to pay off 1Re. worth of its current liabilities. The reason is their current assets have been decreased
over a year.
QUICK
RATIOS
  2019 2018 2017 2016 2015
Fauji Cement 0.10941 0.14943 0.41505 0.800742
5 6 8
Attock 0 0 0.02 0
Cement
Power 0.6 1.3 2.5 0.8
Cement
Lucky 0.61005 1.32089 2.01491 1.7717667
Cement 1 3 4

Average 0.33886 0.69258 1.23749 0.8431271  

6 2 3 8

The industry analysis shows that the industry’s quick ratio was lower than that of power cement. This
reveals that power cement had a lower proportion of non-liquid current assets than it requires the company
to align with industry’s level of quick ratio.

CASH RATIO:
The analysis of the cash ratio of power cement shows that the company’s liquidity position is
improving. Because between the years 2015 to 2018, the company current ratio has increased from 0.0 to 0.3.
But still it need to be improved .Currently company has an average of 0.3 Rs. to pay off 1 Re. of its current
liabilities. As stated above, the current and quick ratio was comparatively higher than the cash ratio. This
situation suggests that power cement has a very high ratio of least liquid assets, which is not desirable for a
company, as it would not enable it to pay off its current liabilities.

CASH
RATIO
  2019 2018 2017 2016 2015
Fauji Cement 0.10737349 0.12486 0.19405 0.60269
7 1 3 2
Attock 0.5 0.3 0.16 0
Cement
Power 0 0.37 0 0.01
Cement
Lucky 0.54314501 1.21376 1.92474 1.64022
Cement 5 6 3 7

Average 0.28762962 0.50215 0.56969 0.56323  

8 7 9

21
The industry analysis shows that the industry’s cash ratio was higher than that of power cement.

SOLVENCY RATIOS        
  2018 2017 2016 2015
Debt-to-asset 54% 26% 62% 68.90%
Debt-to-capital 48% 15% 31% 41%
Debt-to-equity 0.68 0.15 0.33 0.50
Financial leverage 1.95 1.52 2.82 3.44
Interest Coverage 3.87 3.28 3.70 12.9
         
Total debt + Equity 21901952 9861910 3416860 3159467
Total debt 10602890 1467669 1068750 1297297
Average Total Asset 30210863 14508603 9237083 8881116.5
Average Total Equity 15496183 9568296 3279195 2576441
         

DEBT-TO-ASSET RATIO:
Over the years from 2015 to 2018, the debt-to-asset ratio of power cement has shown a fluctuating
trend i.e. the company’s assets have become more equity financed than debt financed as in 2016 debt to asset
ratio was 68.9% and currently in 2018 it is 54%.But if we compare it with previous year 2017 it shows that debt
to asset ratio has been increased. From the year 2015 to 2017, the ratio kept declining but in the year 2018,
the ratio increased to 54% from 26% in 2017. The company increased its long-term liability to 924% followed
by a 90% in short-term borrowings (compared to the previous years). The Company has embarked upon a
brown-field expansion of its production facilities at its Existing site by adding a new line of 7,700 tons per day
(2.5 million tons per annum), taking the Total capacity to around 3.4 million tons per annum. The expansion
project is environmentally friendly and will meet IFC and World Bank standards. After successful
commissioning of this Project, power Cement Company is poised to become the second-largest, and one of
the most Cost-efficient, cement producers in the South Region. In this way they will decrease their cost.

Due to the above-mentioned reasons, power cement debt-to-asset ratio showed a considerable increase in
the year 2018 i.e. 54% of the company’s assets are now financed through its interest bearing liabilities.

DEBT TO ASSET RATIO

  2019 2018 2017 2016 2015
Fauji Cement 6% 9% 6% 14%
Attock Cement 25% 23% 17%
Power Cement 69% 54% 26% 62%
Lucky Cement 4424% 3429% 4837% 3029%

Average 1131% 879% 1222% 1035%  

22
The industry analysis shows that power cement’s debt-to-asset ratio is lower than the industry, the fact that
company takes a higher proportion of debt than the desired industry average. As the company uses more of
interest bearing liabilities to finance its operations

DEBT-TO-CAPITAL RATIO:
The analysis of power cement from the year 2015 to 2018 shows an increasing trend of the company’s
debt-to-capital ratio. Between the years 2015 to 2018, the ratio fluctuated between 15% and 48% but in the
year 2017 and 2018 respectively. Higher debt-to-capital ratio is risky for power cement as the proportion of
interest bearing liabilities is greater in the company’s total source of financing. The analysis shows that in the
year 2018, the percentage of interest bearing liability of power cement has increased.

DEBT TO CAPITAL RATIO

  2019 2018 2017 2016 2015
Fauji Cement 7% 12% 8% 18%
Attock Cement 30% 29% 23%
Power Cement 48% 15% 31%
Lucky Cement 3% 0% 0% 0%

Average 13% 22% 11% 16%  

The analysis of the industry shows that the debt-to-capital ratio of power cement is considerably higher
than the industry average. Where the industry average has fluctuated between 13 to 16 percent.

DEBT-TO-EQUITY RATIO:
The analysis of the debt-to-equity ratio of power cement shows that the company has higher ratio of
debt against equity. During the past five years, the company has increased its borrowing which in turn has
increased its fixed cost. The analysis shows that the highest debt-to-equity ratio was in 2018. Since the
company has more proportion of debt than equity therefore, it is debt financed.

DEBT TO EQUITY RATIO

  2019 2018 2017 2016 201
5
Fauji Cement 0.08 0.13 0.09 0.22
Attock Cement 0.43 0.40 0.30
Power Cement 0.68 0.15 0.33 0.50
Lucky Cement 0.03 0.00 0.00 0.00
0.54 1.21 0.54 0.55
Average 0.18 0.3025 0.135 0.18333333  

The industry analysis reveals that power cement’s debt-to-equity ratio has been higher than the industry’s
in the last five years, for the same reasons stated above. The company thus needs to reduce the amount of
its interest bearing liabilities to stand at par with the industry.

23
FINANCIAL LEVERAGE RATIO:
The analysis shows that the financial leverage ratio of power cement was decreasing from 2016 to
2017 then in 2018 it increased. This shows that a higher proportion of company’s assets were financed
through equity against its interest bearing liabilities.

FINANCIAL LEVERAGE RATIO

  2019 2018 2017 2016 2015
Fauji Cement 140% 141% 150% 159%
Attock Cement 170% 179% 157%
Power Cement 195% 152% 282%
Lucky Cement 3% 0% 0% 0%

Average 104% 129% 115% 147%  

Compared to the industry, power cement’s said ratio has been higher showing that higher proportion of
company’s assets were financed through equity against its interest bearing liabilities.

INTEREST COVERAGE RATIO:

The analysis of power cement interest coverage ratio shows an increasing trend from the year 2015 to
2018. The interest coverage ratio prominently increased in the year 2016 and 2017 showing that the company
had enough EBIT i.e. 358020 Rs. in 2018 to pay off its interest expense. The analysis of the above debt ratios
have also showed that power cement debt has increased by a high margin. However, the Earnings before
Interest & Tax of the company has also displayed an increasing trend showing that the company has enough
amount to pay off its debt because the debt is managed well but from 2 years (2016 to 2018) EBIT is
continuously de reusing.

INTEREST COVERAGE
  2019 2018 2017 2016 201
5
Fauji Cement 0% 0% 0% 0%
Attock Cement 2104% 3808% 9724%
Power Cement -164% 387% 328% 370%
Lucky Cement 3% 0% 0% 0%

Average 486% 1049% 2513% 123%  

The industry analysis shows that the interest coverage ratio of power cement has been considerably lower
than that of the industry. The company still has enough to pay off its debt.

PROFITABILITY RATIOS        

24
   2018 2017 2016 2015
Gross Profit Margin 16% 22% 23% 25.35%
Operating Profit Margin 10% 18% 19% 17%
Pretax Margin 8% 13% 18% 16%
Net Profit Margin 7% 10% 12% 11.32%
Operating ROA 1% 6% 8% 8%
ROA 1% 4% 8% 7.24%
Return on Total Capital 2% 9% 18% 15.97%
ROE 3% 6% 21% 23.30%
         

GROSS PROFIT MARGIN:

In the last five years from 2015 to 2017, the gross profit margin of power cement has increased but at
a very low rate i.e. on an average of 1.5% every year. After 2017 it started decreasing and in 2018 it dropped
to 16% from 22% in previous year. It is due to the reason that cost of goods sold is consuming a greater part of
the revenue generated. It means that 16% is power cement’s gross profit margin while 84% has been spent
on cost of good solds.The reason for the increased amount of COGS is that a large chunk of money is spent on
purchase of coal and price of coal has increased also exchange price is constantly increasing. Packing is also
included in this cost.

Gross Profit Margin

  2019 2018 2017 2016 2015
Fauji Cement 26% 24% 22% 46%
Attock Cement 23% 29% 39% 0%
Power Cement 4% 16% 22% 23%
Lucky Cement 21% 25% 35% 39%

Average 18% 23% 29% 27%  

The industry analysis shows that in the year 2017, power cement’s gross profit margin was higher than the
industry’s but it declined in the following years. The reason for this decline is the company’s increasing
COGS. The increased COGS thus eat up a huge chunk of revenue, leaving little to the company’s gross profit.

OPERATING PROFIT MARGIN:

The analysis shows an decreasing trend in operating profit margin of power cement. The analysis
further reveals the fact that the company’s operating expenses have been increasing over the past five years
(2015-2018). The percentage of operating profit has fluctuated on an average of 16% from 2015 to 2018.It
means that only 6% is spent on operating expenses while 84% is spent on cost of goods sold and only 10% is
operating profit margin of the company. To reduce this cost of goods sold the company should use alternative
ways.

Operating Profit
  2019 2018 2017 2016 2015
Fauji Cement 23% 21% 19% 43%
Attock Cement 14% 21% 31% 0%

25
 Power 3% 10% 18% 19%
Cement
Lucky Cement 13% 19% 27% 30%

Average 13% 18% 24% 23%  

The industry analysis reveals that power cement’s operating profit margin was lower than the industry’s in
past 5 years. However, in the following years the operating profit margin has been considerably lower than
the industry’s. One of the reasons for the lower operating profit margin could be the company’s increasing
COGS.

PRETAX MARGIN:
The analysis of the pretax margin of power cement shows an increasing trend from 2015 to 2018.
Earnings before tax kept decreasing during these years even though there was no considerable increase in the
other income as well. One of the reasons for the decrease in EBT is increasing of cost of goods sold.
The EBT has still not increased by a considerable margin because COGS is consuming a greater part of the
revenue generated by power cement
PRETAX MARGIN
  2019 2018 2017 2016 2015
Fauji Cement 22% 20% 19% 39%
Attock 11.60% 18.90% 30.10% 0%
Cement
Power 0% 8% 13% 18%
Cement
Lucky Cement 18% 22% 30% 33%

Average 13% 17% 23% 22%  

NET PROFIT MARGIN:

The analysis of the net profit margin of power cement has shown decrease over two years (2017 and
2018).The net profit of the company has decreased but by a smaller percentage. The analysis shows that the
significant reason for this small decreased are the large amount of COGS of the company. Similarly, the
company has taken a large amount of long term loan that is increasing finance cost.

Net Profit Margin

  2019 2018 2017 2016 2015
Fauji Cement 14% 16% 13% 27%
Attock Cement 10% 26.70% 20.60% 0%
Power Cement 15% 7% 10% 12%
Lucky Cement 16% 18% 22% 23%

Average 14% 17% 16% 15%  

26
 The industry analysis reveals that the net profit margin of power cement has been considerably
lower than the industry. The reason for this is the same as above i.e. a large increase in COGS of the
company.

OPERATING ROA:
The analysis of the operating ROA of power cement from the year 2015 to 2018 shows decline trend. In
2018 it implies that with every 1Rupee. Invested in total assets, the company has generated 1% operating
profit every year. The ratio moved from 8% in 2015 to 1% in 2018 because the company’s operating profit kept
declining during this period.

Operating
ROA
  2019 2018 2017 2016 2015
Fauji Cement 16% 16% 14% 59%
Attock 10.70% 14.80% 40.80% 0%
Cement
Power 0% 1% 6% 8%
Cement
Lucky Cement 3% 3% 2% #DIV/0!

Average 7% 8% 16% #DIV/0!  

The industry analysis reveals that operating ROA of power cement has been lower than the industry. Even
though the company has witnessed an increasing trend in operating ROA but it is still less than the
industries. This implies the fact that the company generates less amount of operating profit with every Re.1
worth of investment in total assets, leading to lower operating ROA than the industry

RETURN ON ASSETS (ROA):

The ROA of power cement also shows a decline over 5 years. This decrease shows that company is not
investing in assets or other than assets... In the year 2015 7.24% and in 2018 it has been dropped to 1
The company should focus on investments in total assets as it will increase its operating profit.
ROA
  2019 2018 2017 2016 2015
Fauji Cement 10% 12% 9% 37%
Attock 8% 18% 17% 0%
Cement
Power 1% 1% 4% 8%
Cement
Lucky Cement 9% 12% 15% #DIV/0!

Average 7% 11% 11% #DIV/0!  

The industry analysis reveals that ROA of power cement has been lower than the industry, from the year
2016 to 2018. Even though the company has witnessed an increasing trend in ROA but it is still less than the
industries. This implies the fact that the company generates less amount of net profit with every Re.1 worth
of investment in total assets, leading to lower ROA than the industry.

27
RETURN ON TOTAL CAPITAL:
The analysis of the return on total capital shows decline from 2015 to 2018. In 2015 return on capital
was 15% while in 2018 it dropped to 2%. The company is not able to utilize its capital properly. The fact is that
the company increased its debt during this period but the debt but still the profit has not been generated.
The analysis further shows that the company utilized its capital in the purchase of plants, inventory and in
deposits.
Return on Capital
  2019 2018 2017 2016 2015
Fauji Cement 20% 18% 18% 35%
Attock Cement 13% 16% 29% 0%
Power Cement -4% 2% 9% 18%
Lucky Cement 12.90% 17.50% 23.50% 26.50%

Average 10% 13% 20% 20%  

RETURN ON EQUITY (ROE):

The analysis of the ROE has shown a decline trend from 2015 to 2018. In 2015 it was 23% and then in
2018 it dropped to 3%... It implies that the company net income is decreasing over years. Also they are not
investing equity in profitable channels, which has resulted in the decreased return on equity.

ROE
  2019 2018 2017 2016 2015
Fauji Cement 14% 17% 14% 58%
Attock 13% 33% 27% 0%
Cement
Power 5% 3% 6% 21%
Cement
Lucky Cement 12% 15% 18% #DIV/0!

Average 11% 17% 16% #DIV/0!  

The industry analysis shows that during the years 2016-2018, ROE of power cement had been considerably
lower than the industry average. This shows that the company is not properly utilizes its equity capital,
which in turn results in its lower return on equity of power cement than the industry.

VALUATION RATIOS        
  2018 2017 2016 2015
Market price per share 8.72 13.43 10.73 8.85
Sales per share        
BV per share 11 23 6 5.09
         
P/E 32.45 11.09 7.43 5.72
P/CF 109.00 1.82 -5.59 -5.05

28
 P/S 2.39 1.16 0.87 0.65
P/BV 0.92 0.62 1.54 1.33
Dividend Declared 0 0 0 0
         
         
         
         
Basic EPS 0.30 1.28 1.33 1.19
Cash flow per share 0.08 7.39 -1.92 -1.75
Dividend per share 0 0 0 0
Dividend payout ratio 0% 0% 0% 0%
Retention rate 100% 100% 100% 100%
Sustainable growth rate 3% 6% 21% 23.300%
EBITDA per share 33.32 2.15 6.24 6.13
         
         

P/E RATIO:
The P/E ratio of power cement has shown an increase trend from the year 2015 to 2018. Keeping in
view the analysis of the above ratios, we can conclude that the company’s performance is not better relative
to its past trends.
P/E
  2019 2018 2017 2016 201
5
Fauji Cement 74.8174128 79.7625 121.443 107.974
6 5 8
Attock 6.85 6.14 19.97
Cement
Power 32.45 11.09 7.43 5.72
Cement
Lucky Cement 13.0863131 11.2380 9.99055 10.4171
9 7 3 9
Total 94.75 129.59 162.49 125.82
Average 31.5845753 32.3976 40.6235 41.9406  
3 6 1 6

The P/E ratio industry analysis reveals that power cement’s P/E ratio was considerably lower than the
industry’s from the year 2016 to 2018.

P/CF RATIO:
The analysis of the P/CF ratio shows a considerable change as compared to the P/E ratios of the same
years i.e. 2015 to 2018. However, in the year 2018 the P/CF ratio increased to 109 from 1, 8 .The analysis
shows a decrease in the amount of cash the company generated relative to its stock price from the year 2015
to 2018. In the year 2018, the amount of cash the company generated relative to its stock price increased
despite the decrease in the cash generated from operations because the market price of share also decreased
to 8.7 in the year 2018

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 P/CF
  2019 2018 2017 2016 201
5
Fauji Cement 3.70149 5.08264 5.61164 5.71705824
3 8 4
Attock 10.1 13.6 23.7
Cement
Power 0.01 0.00 0.01 -
Cement 5.05
Lucky Cement 757.900 756.967 765.913 766.043918
5 5 5
Total 771.70 775.66 795.22 771.77
Average 257.234 193.916 198.805 257.256115  
8

The P/CF ratio industry analysis reveals that power cement’s P/CF ratio was considerably lower than the
industry’s from the year 2016 to 2018. This shows that the amount of cash the company generated relative
to its stock price during these years was less compared to the amount of cash the industry generated
relative to its stock price.

P/S RATIO:
The P/S ratio of power cement has shown an increasing trend from 0 to 2.3 in year 2017 to 2018. The
analysis shows that with each passing year, the company is paying more for each unit of sales. In the year
2018, this ratio increased to 2.3 reflecting that the company is paying 2.3 Rs against 1Re. per 1Re. of the
company’s sales.

P/S
  2019 2018 2017 2016 201
5
Fauji Cement 1.12778861 1.43453 1.55389 2.89118
1 5 8
Attock 0.7 1.6 4.1
Cement
Power 2.39 1.16 0.87 0.65
Cement
Lucky Cement 192.171526 191.404 209.433 227.428
1 4 3
Total 194.00 196.83 216.25 231.19
Average 64.6664382 49.2071 54.0618 77.0631  
5 1 7

The industry analysis of P/S ratio shows that during the years 2016 & 2018, the P/S ratio of power cement
was lower than that of industry. However, it increased in the following years showing that the company is
paying more for each unit of sales than the industry.

P/BV RATIO:
The P/BV ratio has shown an increasing trend from 2017 to 2018.while in year 2017 it was decreasing
from 1.5 to 0.6. The analysis shows that the market value of the assets of power cement is higher against their

30
 book value. Hence, investors would expect higher returns in the future. This expectation for higher
returns will result in increased investment in the stocks of power cement.

P/BV
  2019 2018 2017 2016 2015
Fauji Cement 10.11428 13.35076 16.12496 31.4481691
Attock 0.9 1.8 5
Cement
Power 0.92 0.62 1.54 1.33
Cement
Lucky Cement 14.55486 15.87168 17.14453 19.4520852
Total 25.57 31.94 38.89 52.44
Average 8.523049 7.985609 9.722375 17.4800848  

The industry analysis shows that P/BV of the assets of power cement had been much lower than the
industry’s. Particularly in the year 2018.

BASIC EPS:
The analysis of the EPS ratio of power cement shows an decreasing trend from the year 2015 to 2018.
The reason for this decline is the company’s decline in profit. During the past five years, the basic EPS ratio has
constantly decreasing
The higher EPS ratio implies that it is a beneficial scenario for the company while lower EPS is not good for the
company financial position also it is less attractive for shareholders.

BASIC EPS
  2019 2018 2017 2016 201
5
Fauji Cement 0.22722 0.27581 0.18938 0.38897968
9 9
Attock 10.36 21.9 15.2
Cement
Power Cement 0.30 1.28 1.33 1.19
Lucky Cement 3.24398 3.77181 4.23417 4.00284036
3 1
Total 13.83 26.25 20.90 5.72
Average 4.61040 6.56190 5.22589 1.90727335  
1 7

The industry analysis reveals that only in the year 2016 to 2018 the power cement basic esp. is lower than
that of industry.
This shows that the company offers lower returns to its shareholders because the company’s EACS has
decreased over this period as revealed by the analysis of the company.

CASHFLOW PER SHARE:

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 The analysis of the cash flow per share ratio of power cement has shown a decreasing trend
from the year 2015 to 2018. However, in the year 2017 it was improving but then in 2018 it dropped again
from 7 (2017) to 0.08(2018).
The decrease in cash flow implies a decrease in the amount of cash the company generates. Not only has this
but the company’s liquidity also reduced due to the decrease in cash flow per share in the year 2018. The
analysis show that the company’s cash flow generated from operating activities has reduced primarily because
of the decrease in cash flow from operations.

CASHFLOW PER SHARE

  2019 2018 2017 2016 201
5
Fauji Cement 4.59274178 4.32845 4.09862 7.34643
1 3 6
Attock 7.02 9.9 12.8
Cement
Power 0.08 7.39 -1.92 -
Cement 1.75
Lucky Cement 0.56012626 0.55999 0.55228 0.54435
2 8 2 5
Total 12.17 14.87 24.84 5.97
Average 4.05762268 3.71711 6.21022 1.99026  
1 3 6 4

The industry analysis shows that from the year 2016 to 2017, power cement’s cash flow per share continued
to be higher than the industry average. This implies the fact that the company’s liquidity was higher than
the overall trend prevailing in the industry.

DIVIDEND PER SHARE:

The analysis of the dividend per share declared over the period of five years from 2016 to 2018 by
power cement shows that from past 5 years the company is not declaring any dividend. As share holders want
both dividends also growth so company should not retain all the profit.

DIVIDEND PER SHARE

  2019 2018 2017 2016 201
5
Fauji Cement 0.75 1 0.9 1
Attock 4 8 13.5
Cement
Power - - -
Cement
Lucky Cement - - - -
Total 1.00
5 9 14
Average 0.33333333  
1.58 2.25 3.60

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 The industry analysis reveals that the DPS of power cement had been lower than the industry average
throughout the years 2016-2018. This shows that the company does not distributes its earnings among its
shareholders.

DIVIDEND PAYOUT RATIO:

The dividend payout ratio is 0 from past 5 years. Keeping in mind the obligations of the Company exists
long-term loans, as well as its plans
For a major expansion, the Board has decided not to declare any dividend or bonus share issue
For the year ended June 30, 2018.

DIVIDEND PAYOUT RATIO

  2019 2018 2017 2016 201
5
Fauji Cement 37% 40% 48% 26%
Attock Cement 40.00% 40.00% 90.00%
Power Cement 0% 0% 0% 0%
Lucky Cement 200% 212% 283% 400%
Total 277% 292% 421% 426%
Average 92% 73% 105% 142%  

The industry analysis shows that on an average, the DPO ratio of power cement had been lower than the
industry’s. This reveals the fact that the industry distributes a huge chunk of its earnings to the shareholders
in the form of dividends and retains a very small amount of its earnings while for expansions and other
purposes power cement is retaining all of the profit.
RETENTION RATE:
The retention rate of power cement showed that from past 5 years the company is retaining for future
expansion and growth and is not giving or declaring any dividends.
RETENTION RATE
  2019 2018 2017 2016 2015
Fauji Cement 63% 60% 52% 74%
Attock Cement 60.00% 60.00% 10.00%
Power Cement 100% 100% 100% 100
%
Lucky Cement -100% -112% -183% -300%
Total 23% 108% -21% -126%
Average 8% 27% -5% -42%  

The industry analysis reveals that during the years 2015-2018, power cement retention rate had been higher
than the said rate of the industry. As the company is retaining almost all of the profit and is not declaring
any dividend. So it is higher than the industry’s retention rate.

SUSTAINABLE GROWTH RATE:

33
 The sustainable growth rate of power cement has shown a decreasing trend. The reason is that
power cement is increasing its total debt constantly. From year 2015 to 2018 it has been decreased from 23%
to 3% the reason is that in 2015 the company did not has any long term loan.

SUSTAINABLE GROWTH RATE

  2019 2018 2017 2016 2015
Fauji Cement 9% 10% 7% 43%
Attock Cement 8.00% 19.80% 2.70%
Power Cement 75% 11% 0% 0.000
%
Lucky Cement -12% -16% -34% #DIV/0!
Total 5% 88% -13% 43%
Average 2% 22% -3% 14%  

The industry analysis reveals that the sustainable growth rate of power cement is very low compared to the
said rate of industry.

EBITDA PER SHARE:

The analysis shows that the EBITDA per share of power cement has constantly increased over the
period of five years i.e. from 2015 to 2018. This implies that the company’s earnings before deduction of
interest, tax, depreciation & amortization are increasing. Hence, the company’s financial performance is good
enough.
EBIDTA PER SHARE
  2019 2018 2017 2016 201
5
Fauji Cement 4.37667368 4.10417 3.91284 7.02413
5 3 3
Attock 19.1 19.6 24.5
Cement
Power 33.32 2.15 6.24 6.13
Cement
Lucky Cement 28788.3138 35665.6 44393.0 44125.2
6 2 3 3
Total 28811.79 35722.6 44423.6 44138.5
4 0 0
Average 9603.93017 8930.66 11105.9 14712.8  
8 3

As compare to industry average power cement is below the industry average.

Conclusion
The above analysis of power cement’s financial ratios reveals that over the years the company has not offered
returns to its shareholders. The company has shown an increasing trend in its net sales till 2017 but in 2018
net sales also net profit has been declined. The main reasons include the higher coal price and other cost of
goods sold that is consuming 84% of its profit. Currently power cement is finding alternative ways to reduce its
cost.

34
 The above analysis also shows that the company’s basic earnings per share have displayed an decreasing
trend over the years. To conclude, the company’s financial position has remained stable during the years
2016-2017.But in 2018 it is facing many problems. That company should focus on.

35