Ratio Analysis of Financal Statements

Topics: Financial ratio, Financial ratios, Portland cement Pages: 8 (1827 words) Published: January 29, 2013
Ratio analysis of financial statements


For the purpose of ratio analysis of financial statements , we have choosed 6 cement industries i.e.

➢ Lucky cement

➢ Fauji cement

➢ Bestway cement

➢ Dadabhoy cement

➢ Maple leaf cement

➢ Attock cement

We have calculated following categories of ratios:

1. Liquidity ratios

2. Asset management ratios

3. Debt management ratios

4. Profitability ratios

5. Market value ratios


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Fauji cement

Company’s profile:

The Company has been set up with the primary objective of producing and selling ordinary portland cement. The finest quality of cement is available for all types of customers whether for dams, canals, industrial structures, highways, commercial or residential needs using latest state of the art dry process cement manufacturing process.

A longtime leader in the cement manufacturing industry, Fauji Cement Company, headquartered in Islamabad, operates a cement plant at Jhang Bahtar, Tehsil Fateh Jang, District Attock in the province of Punjab. The Company has a strong and longstanding tradition of service, reliability, and quality that reaches back more than 11 years. Sponsored by Fauji Foundation, the Company was incorporated in Rawalpindi in 1992.

The cement plant operating in the Fauji Cement is one of the most efficient and best maintained in the Country and has an annual production capacity of 1.165 million tons of cement. The quality portland cement produced at this plant is the best in the Country and is preferred in the construction of highways, bridges, commercial and industrial complexes, residential homes, and a myriad of other structures, fundamental to Pakistan's economic vitality and quality of life.

Liquidity Ratios:

Current Ratio

The current ratio shows company's financial strength that in order to pay debts that come due during the current year, how many dollars in assets are likely to be converted to cash within one year. We can find the current ratio by dividing the total current assets by the total current liabilities.

1. Quick Ratio
The Quick Test Ratio/Acid Test or Liquidity Ratio is the most excessive and difficult test of a company's financial strength and liquidity. It shows the liquidity of a business.

Assets Management Ratios:
1. Total assets Turnover Ratio
Asset turnover is calculated to measure a company's efficiency in using its assets. It calculates the total sales for every rupee of assets a company owns. The higher the number, the better the company’s efficiency...
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