Holcim Analysis

Topics: Revenue, Generally Accepted Accounting Principles, Asset Pages: 9 (1832 words) Published: August 25, 2013
Holcim
As one of international company that concentrate of cement manufacturing, Holcim growing as the past 5 years. Author tries to summarize what factor that takes a part in the Holcim business growing. Focusing on the financial report from 2007-2011, there are some critical factors that can be analyze. Statement of Income of Holcim Group 2007-2011

 |  | 2011| 2010| 2009| 2008| 2007|
Statement of income|  |  |  |  |  |  |
Net sales| Million CHF| 20744| 21653| 21132| 25157| 27052| Gross profit| Million CHF| 8528| 9274| 9060| 11041| 12979| Operating EBITDA| Million CHF| 3958| 4513| 4630| 5333| 6930| Operating EBITDA margin| %| 19.1| 20.8| 21.9| 21.2| 25.6| EBITDA| Million CHF| 4264| 4988| 5229| 5708| 8468|

Operating profit| Million CHF| 1933| 2619| 2781| 3360| 5024| Operating profit margin| %| 9.3| 12.1| 13.2| 13.4| 18.6| Depreciation, amortization and impairment| Million CHF| 2367| 1934| 1858| 1985| 1919| EBIT| Million CHF| 2235| 3054| 3371| 3723| 6549|

Income taxes| Million CHF| 449| 615| 623| 663| 1201| Tax rate| %| 40| 28| 24| 23| 21|

As the following years starting from 2007 the net sales in 2011 indicates the lowest achievement. With this data, we can state that the selling movement is suffering until the current year. This can be the low of buying power of Holcim product or the limitation Holcim can create the product. The tax also increases dramatically in the past 5 years. Statement of Cash Flow of Holcim Group 2007-2011

Statement of cash flows|  | 2011 | 2010 | 2009 | 2008 | 2007 | Cash flow from operating activities| Million CHF| 2753| 3659| 3888| 3703| 5323| Cash flow margin| %| 13.3| 16.9| 18.4| 14.7| 19.7|

Investments in property, plant and equipment for maintenance Million CHF|  | 752| 410| 376| 1104| 1043| Investments in property, plant and equipment for expansion| Million CHF| 886| 1182| 1929| 3287| 2245| Purchase (Disposal) of financial assets, intangible and other |  |  |  |  |  |  | assets and businesses net| Million CHF| 154| -230| 2125| 747| -50|

As the following years Cash flow activities also decreasing which means operation in terms of cash oriented is decrease. Although the selling out and cash flow activities is decreases, Holcim seems likely to investing in property, plant, and equipment.

Statement of Financial Position of Holcim Group 2007-2011
As the following financial position of Holcim Grop from 2007-2011, it can be seen that the total asset is decreasing each years and the total liabilitites also decrease except in 2009.

Holcim Group 2007-2011 Analysis
1. ROE (Return on Equity) = Net Income / Avg Shareholders Equity

ROE from 2007-2011 are decreasing because of the Net Income from 2007-2011 also decreasing (See Appendix 2). From the fact above it can be seen that the most efficient year is 2007, and as the time goes the efficiency of the company is decreasing.

2. ROA (Return on Assets)={Net Income + [Interest Expense
(1-Tax Rate)]} / Average Total Assets

ROA represent how efficient management is at using its assets to generate earnings. Higher ROA means earning more money on less investment. It can be seen that the highest ROA from 2007-2011 is 9.4% in 2007. The ROA start decreasing from 2008-2011. It shows that Holcim from each year is getting less efficient in managing their assets.

3. CEL= Net Income/{Net Income+[Interest Expense
(Cmn Equity Leverage) (1-Tax Rate)]}

Common equity leverage represent that the shareholders of HOLCIM receiving a large portion of the total return generated by the company. 2007 is the higher CEL compare to the other years, which is 1.035. in 2007, the shareholders earn the highest portion of total return that generated by the company. it is because of either the company not using leverage or using...
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