Ratio Analysis of Aramit Cement
Executive Summary
Here in this term paper we try to analyze the financial statement of assigned company, which is Aramit Cement Limited (ACL). At first we gathered information from the firm’s financial statement. We collected the data from year 2004 to 2008. However within this five year period we calculated the profitability analysis, liquidity analysis, activity ratio, debt management ratio and market book ratio. We also calculated the ratio analysis of Confidence Cement Limited (CCL); we tried to compare between ACL and CCL. From our analysis we can say that the liquidity position, capital structure, profitability position and EPS (earning Per Share) of the Confidence Cement Limited is much better than the Aramit Cement Limited. From the perspective of some activity ratio analysis Aramit Cement Limited is much better than Confidence Cement Limited. From the common size balance sheet and income statement we can have a more insight about what is going on in the firms operations. We also create the balance sheet based on the market value gathered from the secondary sources. From this we tried to find the amount by which the firm is whether ACL is over-valuated or under-valuated. However we also calculated cash flow statement to have a better insight. And found that ACL’s share is highly over-valuated. And from the cash flow we see the poor performance in terms of operating cash flow generation, which indicate poor working capital management.
1. Chapter One: Introduction and Methodology
Aramit Cement Limited is our selected company for analysis, which is a cement company. According to our term paper requirement we tried to find out the financial position of the company by comparing it with another cement company, which is Confidence cement Limited. At first we find out the book value of Aramit Cement Limited.
Book Value of Aramit Cement Limited (ACL) [pic] [pic] From the book value we can see that Aramit Cement Limited
Here in this term paper we try to analyze the financial statement of assigned company, which is Aramit Cement Limited (ACL). At first we gathered information from the firm’s financial statement. We collected the data from year 2004 to 2008. However within this five year period we calculated the profitability analysis, liquidity analysis, activity ratio, debt management ratio and market book ratio. We also calculated the ratio analysis of Confidence Cement Limited (CCL); we tried to compare between ACL and CCL. From our analysis we can say that the liquidity position, capital structure, profitability position and EPS (earning Per Share) of the Confidence Cement Limited is much better than the Aramit Cement Limited. From the perspective of some activity ratio analysis Aramit Cement Limited is much better than Confidence Cement Limited. From the common size balance sheet and income statement we can have a more insight about what is going on in the firms operations. We also create the balance sheet based on the market value gathered from the secondary sources. From this we tried to find the amount by which the firm is whether ACL is over-valuated or under-valuated. However we also calculated cash flow statement to have a better insight. And found that ACL’s share is highly over-valuated. And from the cash flow we see the poor performance in terms of operating cash flow generation, which indicate poor working capital management.
1. Chapter One: Introduction and Methodology
Aramit Cement Limited is our selected company for analysis, which is a cement company. According to our term paper requirement we tried to find out the financial position of the company by comparing it with another cement company, which is Confidence cement Limited. At first we find out the book value of Aramit Cement Limited.
Book Value of Aramit Cement Limited (ACL) [pic] [pic] From the book value we can see that Aramit Cement Limited
References: • Peter S. Rose & Sylvia C. Hudgins, “Bank Management & Financial Services”, Sixth Edition, McGraw-Hill, New York, 2005 • Scott Besely& Eugene F • Aramit Cement Limited Annual Reports (FY 2004 to FY 2008) • Confidence Cement Limited Annual Reports (FY 2004 to FY 2008)