(Research And Analysis Project)
* An analysis of the financial situation
Fauji Cement Company Limited
Registration No: 0961113
1.1Topic selection and its context 03
1.2Reasons for selection of the topic03
1.3Aims and objectives of the report04
3.1The Cement Sector06
3.2 Company profile06
3.4SWOT Analysis 15
3.5Porter’s Five Force Model 17
4.4Porter’s Five Forces Model19
Appendix ‘A’ – Ratios 20
Appendix ‘B’ – Balance Sheet21
Appendix ‘C’ – Profit and Loss Account 22
Appendix ‘D’ – Questionnaire and response23
Appendix ‘E’ – Graphs25
Appendix ‘F’ – References and Bibliography27
1.1 Topic chosen and its context:
The topic I have selected out of twenty two options available for the Research and Analysis Project is “An analysis of the financial situation of your choice of an organization” thus organization I have opted for is “Fauji Cement Company Limited”(FCCL).
I carried out my analysis in the context of financial as well as non financial analytical techniques as described below:
a) Ratio Analysis: A study of the relationships between financial variables. (http://financial-dictionary.thefreedictionary.com)
Ratios are used to assess business financial position and performance.
b) SWOT Analysis: It is a critical assessment of the strengths and weaknesses, opportunities and threats affecting an organization to establish its condition before the long term plan are prepared. (BPP’s 2007)
c) Porter’s five force analysis:
It will help in identifying the sources of competition in an industry or sector. Five forces analysis focuses on five key areas: the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry. (Student Accountant, 2001)
1.2 Reasons for selection of this topic:
There was not only a single reason for my choice regarding selection of this topic I primarily got motivated due to: * ACCA studies and my professional carrier as a trainee student in Chartered Accountant’s firm had developed strong inclination towards analytical reviews of financial results and their interpretation. * This rich topic provided me an opportunity to apply my learnt knowledge and practical exposure skills in a real time situation. * As there is a close relationship exists between my ACCA final level studies and this topic I am sure that this will further unwrap many new horizons of professional development for me. * Cement industry is one of the core industries, which plays a vital role in the growth of a nation. Economic activity is a key driver of cement demand so analysis in this sector would give me an idea of growth of Pakistan’s economy as a whole.
1.3 Aims and objectives:
Financial statement analysis applies analytical tools and techniques to general purpose financial statements and related data to derive estimates and inferences useful in business decision. * (Leopold A. Bernstein and John J. Wild)
So the aims and objectives of this research project are:
* To articulate current financial position of FCCL in the context of overall performance and standing of Cement sector of country and one of its competitor Maple Leaf Cement Company Limited (MLCFL). * Have short analysis of cement sector.
* By using Ratio analysis evaluation of :
a. Operating performance and profitability ratios which are key indicators of performance.