INTRODUCTION

Maple leaf Cement factory limited

Maple Leaf Cement Factory Limited is a Pakistan-based company. The principal activity of the Company is production and sale of cement. The Company is a subsidiary of Kohinoor Textile Mills Limited. The company owns and operates two production lines for grey cement and one production line for white cement. Its plants are located at Daudkhel District Mianwali. The Company supplies its products to domestic market and overseas markets

Vision Statement
The Maple Leaf Cement stated vision is to achieve and then remain as the most progressive and profitable Company in Pakistan in terms of industry standards and stakeholders interest.

Mission Statement
The Company shall achieve its mission through a continuous process of having sourced, developed, implemented and managed the best leading edge technology, industry best practice, human resource and by conducting its business professionaly and efficiently with responsibility to all its stakeholders and community.

Competitors
Major competitors of Maple leaf cement are: Askari cement limited D.G. Khan cement limited Lucky cement limited Pioneer cement limited Fauji cement limited Cherat cement limited Attock Cement limited Dandot cement limited Bestway cement limited

CONSOLIDATED BALANCE SHEET 2012 EQUITY AND LIABILITIES

SHARE CAPITAL AND RESERVES Authorised share capital Issued, subscribed and paid up capital Reserves Accumulated loss Total Share capital & Reserve Share deposit of money SURPLUS ON REVALUATION OF PROPERTY, PLANT AND EQUIPMENT NON - CURRENT LIABILITIES Long term loans from banking company Redeemable capital Syndicated term finance Liabilities against assets subject to finance lease Long term deposits Deferred liabilities deferred taxation employees compensated absences Total non- Current Liabilities CURRENT LIABILITIES Trade and other payables Current profit/ markup Short term borrowings 7,000,000 5,803,458 3,575,531 (6,355,664) 3,023,325 7,000,000 4,264,108 4,180,433 (4,310,393) 4,134,148 1,000,000

2011

5,548,120

2,557,185 7,983,000 1,497,000 464,366 5,569 2,223,962 19,149 14,750,231

1,100,808 8,289,800 1,498,200 700,743 2,739 19,629 11,611,919

4,115,909 791,161 4,084,666

3,498,766 921,812 4,060,838

Current portion of: long term loans from banking company redeemable capital syndicated term finance liabilities against assets subject to finance lease Total Current liabilities Total liabilities

448,473 306,800 1,200 620,161 10,368,370 33,690,046

480,231 6,800 1,200 379,198 9,348,845 26,094,912

ASSETS
NON - CURRENT ASSETS

Property, plant and equipment Intangible assets Long term loans to employees secured Deposits and prepayments Total non- current Assets CURRENT ASSETS Stores, spare parts and loose tools Stock-in-trade Trade debts Loans and advances Investments Deposits and short term prepayments Accrued profit Refunds receivable from government Other receivables Income tax (net of provisions) Cash and bank balances Total current Assets

28,203,393 17,591 2,531 52,036 28,275,551

21,035,368 1,774 3,293 51,573 21,092,008

3,032,946 539,084 560,103 145,061 404,863 121,896 890 16,797 98,152 206,382 288,321 5,414,495

2,407,410 504,718 751,400 266,642 472,338 121,824 656 16,797 91,178 296,506 73,435 5,002,904

Total Assets

33,690,046

26,094,912

Income statement
2012 2011

Sales - net Cost of sales Gross profit Distribution cost Administrative expenses Other operating expenses Operating Income

13,073,218 10,898,059 2,175,159 1,646,632 230,828 162,394 135,305

13,630,511 10,691,883 2,938,628 3,152,889 194,221 158,641 (567,123)

Other operating income Profit / (loss) from operations Finance cost

71,240 206,545 (2,166,409)

57,031 (510,092) (2,059,476)

Loss before taxation

(1,959,864)

(2,569,568)

Taxation Loss after taxation

(188,125) (1,771,739)

(14,447) (2,555,121)

Ratios Analysis

Lenders and creditors point of view

LIQUIDITY RATIOS: Current Ratio: Formula: Current Assets / Current Liabilties

In 2011 Mapple leafs current ratio was 0.535. but in 2012 it again dropped to 0.522. this shows it recent year maple leafs Rs.1 of Current liabilities supported only 0.522 Current assets. Quick Ratio: Formula: (Current assets Inventory) / Current liabilities

In 2007 Maple Leafs Quick ratio was 0.224 but decreased to 0.177 in 2012. These values show that for last 2 years company wasnt striving hard enough to maintain its quick ratio or we can say the ability of meeting short term liabilities with most liquid assets.

FINANCIAL LEVARAGE RATIOS: Debt to Equity: Formula: Total debt /Share holders equity In 2011 maple leafs debt to equity ratio was 2.173 but it decreased in 2012 1.562.These values shows that company have taken debt more than equity. Debt to Asset : Formula : Total Debt /Total Assets In 2011 maple leafs debt to asset ratio was 0.427 and in 2011it was decreased by 0.397. this shows that currently company has Rs.1 of assets to support 0.397 of debt. Debt to Captalization: Formula : Long term debt/ Total capitalization In 2011 maple leafs debt to capitalization was to 0.260 in 2011 0.260 was maintained. Cuurently company has the same ability of capitalization to support long term debt.

Debt services ratios Interest coverage Ratio: Formula: EBIT/Interest Expense In 2011 maple leafs interest coverage ratio was 0.247 and in 2011 it was decreased to 0.095. this shows the worst scenario that company has less earning to cover even the finance cost of the company.

FINANCIAL LEVARAGE RATIOS: Debt to Equity: Formula: Total debt /Share holders equity In 2011 maple leafs debt to equity ratio was 2.173 but it decreased in 2012 1.562.These values shows that company have taken debt more than equity. Debt to Asset : Formula : Total Debt /Total Assets In 2011 maple leafs debt to asset ratio was 0.427 and in 2011it was decreased by 0.397. this shows that currently company has Rs.1 of assets to support 0.397 of debt. Debt to Captalization: Formula : Long term debt/ Total capitalization In 2011 maple leafs debt to capitalization was to 0.260 in 2011 0.260 was maintained. Cuurently company has the same ability of capitalization to support long term debt.

Debt services ratios Interest coverage Ratio: Formula: EBIT/Interest Expense In 2011 maple leafs interest coverage ratio was 0.247 and in 2011 it was decreased to 0.095. this shows the worst scenario that company has less earning to cover even the finance cost of the company.

Management point of view Operational analysis

Gross Margin: Formula: Gross profit/Sales From 2011 2012 the values are 0.215, 0.166 these values shows the decrease of gross profit margin in the last year. Net profit margin: Formula: net profit /net sales From 2011-2012 the values are -0.187, -0.135 these values reflect the worst situation as net profit margin is negative due to loss and is increasing.

Profitibility
RETURN ON ASSETS: Formula : Net income/ total assets From 2010-2012 the values are -0.097 , -0.052. this scenario shows that rs.1 of assets are bearing loss of 0.052 in 2011.

Resource management

ASSET TURNOVER: Formula: Net sales/ Total Assets

In 2011 0.522 and in 2011 it was decreased to 0.388. current asset turnover shows that Rs.1 of the assets are supporting Rs.0.388 of sales.

Receivable Turnover: Formula: Annual net credit sales/receivables In 2011 maple leafs receivable turnover ratio was 2.89 and in 2011 it was increased to 3.20. above values represent that this company is improving its recovering in last 2 years. Receivables turnover in days: It is calculated as (days in a year)/( receivable turnover). This ratio tells number of days between credit sales and collection day. This ratio is moving in accordance with receivables turnover. In 2011 recieveables turnover in days was 126.23 and in 2012 it became 113.7. Inventory Turnover: Formula : Cost of goods sold /inventory

In 2011 inventory turnover was 3.671 and in 2012 it was decreased to 3.050. This means maple leafs stock piling its inventory as most of inventory is not sold out according to given CGS. Inventory turnover in days: It is calculated as days in a year/ inventory turnover. It measures the days between inventories being turned into accounts receivable through sales. In 2011 inventory turnover in days were 99.4 days n it increased in 2012 to 119.6 days. Payables Turnover: Formula: Annual credit purchases/accounts payable

In 2011 maple leafs payables turnover ratio was 2.904 and in in 2011 it was decreased to 2.799. the calculations reflect that company is not paying out its payables for credits purchases on time. Payable turnover in days: It is calculated as days in year/ payables turnover. It is moving in accordance with the payables payable turnover. In 2011 maple leafs payables turnover was 125 days and in 2012 it became 130.3 days.

OPERATING CYCLE VERSUS CASH CYCLE: Operating Cycle: Formula: inventory turnover in days + receivable turnover in days Operating cycle: Operating cycle is calculated as sum of receivables turnover in days and inventory turnover in days. It shows the time period between commitment of cash when purchases are made for inventory and finally it turns into collection of receivables through sales i.e. time period between manufacturing a product and collection of cash. Operating cycle of Maple leaf is fluctuating and moving as inventory and receivables turnover increase and decrease year to year. Operating cycle show great lag in 2008 when it increased to 176.75 days due to combined effect of increment in both receivables turnover in days and inventory turnover in days. Cash cycle: It is calculated as operating cycle less payable turnover in days and reflects actual outlay of cash from purchases until collection of cash resulting from sales. For Maple Leaf Corporation, cash cycle has become negative due to increasing accounts payable year after year. The reason can be firm is prompt in cash collection but they are delaying payments to their suppliers and creditors due to strong market position and committing cash in expansion projects. But this decision of postponing payables is not good as firm has to manage its receivables and payables effectively to gain trust of stake holders.