An Analysis of Financial Situation of Fauji Cement Company Ltd

Topics: Financial statements, Financial ratio, Portland cement Pages: 20 (5301 words) Published: September 25, 2010

(Research And Analysis Project)

* An analysis of the financial situation
Fauji Cement Company Limited

Word Count:


Presented by:

Registration No: 0961113
March 2008



1.1Topic selection and its context 03
1.2Reasons for selection of the topic03
1.3Aims and objectives of the report04

2.1Primary data05
2.2Secondary data05

3.1The Cement Sector06
3.2 Company profile06
3.3Ratio Analysis07
3.4SWOT Analysis 15
3.5Porter’s Five Force Model 17

4.1Cement Industry18
4.2Financial Performance18
4.3SWOT Analysis19
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. (
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.


References: (BPP’s 2007)
c) Porter’s five force analysis:
(Student Accountant, 2001)

(BPP’S 20074)
* The purpose of the SWOT analysis is to conduct a general and quick examination of a business’s current position so that it can identify preferred and likely directions in future
(Dave Hall, Rob Jones, Carlo Raffo, 1999)

(Digest of Industrial Sector in Pakistan JULY 2004)
There are currently 29 cement production units in the country with total installed cement production capacity of 36.841 million tones p.a
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