HISTORY OF BALANCE SHEET ANALYSIS
Submiited to :
Ms. Maha ejaz
Muhammad Ismail Khan
Saadia Usman Sheikh
TABLE OF CONTENTS
* Introduction of the company
* Income statement – cc2
* Balance sheet – cc3
* Cash flow statement -cc4
* Common income statement-cc6
* Common size balance sheet-cc7
* Per share results-cc9
* Short term liquidity ratios-cc10
* Common size of current assets and current liabilities-cc11 * Common size statement of cash flows-cc15
* Analysis of Cash flow ratios-cc17
* Analysis of Capital Structure-cc18
* Common size Analysis of capital structure –cc19
* Capital structure and solvency ratios-cc20
* Return on invested capital-cc21
* Asset utilization ratios-cc22
* Analysis of profit margin ratios-cc23
* Analysis of Discretionary Expenditures cc25
* Market measures-cc26
Introduction to the company
Maple Leaf Cement is a part of Kohinoor Maple Leaf Group (KMLG). The Group comprises of companies, which are ranked amongst the top companies in the cement and textile sector. Maple Leaf Cement Factory Limited (MLCFL) is one of the pioneers of cement industry in Pakistan. MLCFL owns and operates three production lines for grey and three production lines for white cement. The plants are located at Daudkhel District Mianwali. Total annual clinker capacity of Grey Cement is 2.84 million tons while capacity of white cement is 180,000 tons.
Maple leaf cement factory is a public limited company and its shares are traded on the Karachi Stock exchange. The Company is part of KPMLG and was privatized in the year 1992. Owned by the Saigols, the factory is one of the largest producers of cement in Pakistan. The company however has not been able to maintain profitability and the figures show that the company has struggled badly in many areas. The company faces stiff competition however from huge competitors such as DG Khan Cement. The profits are constantly decreasing basically due to increasing operating expenses. The company has not been able to reduce costs although sales are INCREASING but still the company has not been able to improve profits with the increase in sales.
The Income Statement measures a company’s financial performance between the balance sheet dates and hence reflects a period of time. It shows revenue, expenses, gains and losses of a company over a period of time. Above table shows the consolidated income statement for the years 2004 to 2008 of Maple Leaf Cement Factory Limited. The sales have dropped in the year 2007 but with the increase in production the sales have increased. The production has increased as new machinery is being purchased in the corresponding year. Following the increase in sales, the gross profit has increased. The net profit though has seen a downward trend. This is due to the fact that the operating expenses have increased which include depreciation due to buying of new machinery. The finance cost also plays a vital role in decreasing the overall profitability for the company.
CC 3 BALANCE SHEET
Balance Sheet represents the financial position of each year. Balance sheet lists assets, which are the things the company own.
The balance sheet for Maple Leaf above shows that the current assets for the company are rising more significantly due to trade in debts and stock in trade. In the shareholder’s equity section the shareowner’s equity has decreased after an increase in the year 2007. This is not a good sign for the company.
Cash is the primary source of...