COURSE TITLE

FIANACIAL ACCOUNTING

PRO1ECT TITLE
FINANCIAL ANALYSIS OF
FAUJI CEMENT PRIVATE LTD.

SUBMITTED TO
SAMIA KHALID

SUBMITTED BY
MAHNOOR FAROOQ 35
IQRA SAQIB 59
FARIA IRAM 31
INSTITUTE OF ADMINISTRATIVE SCIENCES
(4
TH
SEMESTER)
UNIVERSITY OF THE PUN1AB
^CKNO\LLlCL!LN1

Praise and glory be to Allah who gave us the opportunity to conduct this
comprehensive study. Without His help we were nothing. We have tried our
level best to put all our efforts in applying our knowledge, understanding
and information regarding our topic. This study has been accomplished
with the support and encouragement of our amiable teacher MISS. SAMIA
KHALID. We really are thankful to her for providing us necessary guidance.

We hope you will find this project report informative and in accordance with
the requirements.

MAHNOOR FAROOO
ORA 8AOB
FARA RAM






COMPANY`S VISION



'TO MAINTAIN AS A ROLE MODEL
CEMENT
MANUFACTURING COMPANY FULLY
AWARE OF GENERALLY
ACCEPTED PRINCIPLES OF CORPORATE
SOCIAL
RESPONSIBILITIES ENGAGED IN NATION
BUILDING
THROUGH MOST EFFICIENT
UTILISATION OF RESOURCES AND
OPTIMALLY BENEFITING ALL STAKE
HOLDERS WHILE
ENJOYING PUBLIC RESPECT AND
GOODWILL.









COMPANY`S MISSION



'WHILE MAINTAINING ITS LEADING
POSITION IN
QUALITY OF CEMENT AND THROUGH
GREATER MARKET
OUTREACH WILL BUILD UP AND
IMPROVE ITS VALUE
ADDITION WITH A VIEW TO ENSURING
OPTIMUM RETURNS
TO THE SHAREHOLDERS.



AUJI CEMENT PRIVATE LIMITED
Horizontal Analysis
alance Sheet
ncrease or (Decrease) ncrease or (Decrease)
During 2007 During 2008
2006 2007 2008 Amount Percent Amount Percent
Rupees in thousands

Current LiabiIities
Trade & Other
Payables 421074 468447 493210 47373 1123032 24763 328619
Accrued Markup 59771 48330 33186 11441 191414 13144 313346
Short Term
Finances 236353 375510 1378365 139137 3887676 1002833 2670648
Current Portion Of
Long Term Liabilities 550000 550000 550000 0 0 0 0
TotaI Current
IiabiIities 1267198 1442287 2454761 17S089 S098S89 1012474 701992

Non-current
IiabiIities
ASSETS
Current Assets
Stores,Spare parts
& loose tools 490,887 468,769 907,591 22118 430372 438822 9361137
Stock-in-Trade 145090 183,309 230,089 38219 2634138 46780 2331973
Trade Debts 25475 19558 26927 3917 232267 7369 3767768
Advances, deposits,
payments and other
recieveables 70399 858758 345567 788339 1119844 313191 397397
Cash & ank
alances 847590 423133 3783909 424437 300781 3360776 79426
TotaI Current
Assets 1579441 1953527 5294083 74146 268S61 40SS6 171001
Non-curent Assets
Long term advance 9000 8100 7200 900 10 900 111111
long term deposits 46611 46611 46611 0 0 0 0
Property, plant and
equipment 4563115 4392450 7106599 170663 37401 2714149 6179123
Total
non current assets 4618726 4447161 7160410 171363 37146 2713249 3068012
TotaI assets 6198107 6400688 124S449 202S81 267S 60S80S 94S80S
Long Term Finances 1425000 875000 325000 330000 383963 330000 628371
deffered liab-
compensated
absences 7912 8277 9168 363 4613246 891 1076477
deffered tax liability 215381 339918 363154 124337 3782172 23236 6833766
retention money
payable 0 0 18129 0 0 18129 0
TotaI non
current IiabiIities 164829 12219S 71S4S1 42S098 28848 S07744 41S097
totaI IiabiIities 291S491 266S482 170212 2S0009 8S7S19 S0470 189S79
Lqu|ty
shares caplLal 4194422 4194422 7419887 0 0 3223463 7689891
Reserves 911806 439216 1864094 432390 496367 1404878 3039297
TotaI equity 282616 7S206 928981 4S2S90 178748 SS4877S 148SS4

@ta| ||ab|||t|es and
equ|ty 6198107 6400688 124S419 202S81 2684 60SS0S 94S7S8S


INTERPERTATION O HORIZONTAL ANALYSIS O
BALANCE SHEET:
There is a major increase in total assets of the company mainly due to the property,
plant and equipment head and by the stores, spare parts and loose tools.
Whereas the liabilities have also increased highly due to retention money payable,
which was nill in the previous years.and also by the short term finance and long term
liabilities.
Total equity has also seen a major increase due to reserves and capital's heads.








AUJI CEMENT PRIVATE LIMITED
Horizontal Analysis
Profit & Loss Account

ncrease or
(Decrease)
ncrease or
(Decrease)
during 2007 during 2008
2006 2007 2008 Amount Percent Amount Percent
Rupees in thousands
ales 3683433 4780036 4749217 903419 138936 30819 064474
lessgov levles 1397317 1316733 1203313 0 0 113438 861498
net sa|es 4286138 3463283 3343902 822833 191980 82619 2383369

lesscosL of sales 2093027 2371788 2887790 276761 1321038 316002 2173382
grss pr|t 2191111 1091493 638112 1099616 301833 433383 397034

oLher operaLlng
lncome 43324 73833 107374 30311 7042317 33739 4369313
dlsLrlbulLlon cosL 31693 40643 33383 8930 2823789 12738 3133963
admlnlsLraLlve
expense 66629 71302 76493 4673 7013463 3193 7283106
oLher operaLlng
expense 94127 38098 34290 36029 38277 23808 40979
flnance cosL 264297 207103 146934 37192 216393 60131 290437

net pr|t bere
taxat|n 1777687 788180 434364 989307 336626 333616 423274

1axaLlon 373932 141837 40966 432093 732842 100891 711216

net pr|t ater
taxat|n 1203733 646323 413398 337412 463069 232723 360073


INTERPRETATION O HORIZONTAL ANALYSIS O PROIT
AND LOSS ACCOUNT:
Although the net sales is increasing from the previous year, but the gross profit is
smaller than year 2007. And the net income is also decreasing mainly because of
increase in cost of goods sold, distribution cost and administrative expenses.This
situation is not good for the company, because it is going into losses. Company should
take necessary measurements to cover this loss.

AUJI CEMENT PRIVATE LIMITED
Horizontal Analysis
alance Sheet
ncrease or (Decrease) ncrease or (Decrease)
During 2007 During 2008
2006 2007 2008 Amount Percent Amount Percent
Rupees in thousands
are
cap|ta|
ordlnary 3707430 3707430 6932893 0 0 3223463 8700002

preference 486992 486992 486992 0 0 0 0

cap|ta|
reserve
share
premlum 0 0 1833709 0 0 1833709 0
hedglng
reserve 0 0 84364 0 0 84364 0

revenue
reserve

accumulaLed
loss 911806 439216 33979 432390 496367 403237 882434
@@ 282616 3733206 9283981 432390 1378748 3348773 1483334

VERTICAL ANALYSIS

ASSETS
Current Assets
Stores,Spare parts & loose tools 490,887 8 468,769 24 907,591 7
Stock-in-Trade 145090 2.340876 183,309 3 230,089 2
Trade Debts 25475 0.411013 19558 0.305561 26927 0.216203
Advances, deposits, payments and
other recieveables 70399 1.135815 858758 13.41665 345567 2.774637
Cash & ank alances 847590 13.67498 423133 6.610742 3783909 30.38188
TotaI Current Assets 1579381 25.48167 1953527 30.52058 5294083 42.50741
Non-curent Assets
Long term advance 9000 0.145206 8100 0.126549 7200 0.05781
long term deposits 46611 0.75202 46611 0.728219 46611 0.37425
Property, plant and equipment 4563115 73.62111 4392450 68.62465 7106599 57.06052
Total non current
assets 4618726 74.51833 4447161 69.47942 7160410 57.49259
TotaI assets 6198107 100 6400688 100 124S449 100
Current LiabiIities
Trade & Other Payables 421074 5.249174 468447 6.400319 493210 3.960192
Accrued Markup 59771 0.745115 48330 0.660325 33186 0.266464
Short Term Finances 236353 2.946413 375510 5.130535 1378365 11.06748
Current Portion Of Long Term
Liabilities 550000 6.856386 550000 7.514565 550000 4.416183
TotaI Current IiabiIities 1267198 15.79709 1442287 19.70574 2454761 19.71032
AUJI CEMENT PRIVATE LIMITED
'0rtical Analysis
alance Sheet

2006 2007 2008
Amount Percent Amount Percent Amount Percent
Rupees in thousands

Non-current IiabiIities
Long Term Finances 1425000 17.76427 875000 11.95499 325000 2.609563
deffered liab-compensated absences 7912 0.098632 8277 0.113087 9168 0.073614
deffered tax liability 215381 2.684973 339918 4.644247 363154 2.915918
retention money payable 0 0 0 0 18129 0.145565
TotaI non current IiabiIities 164829 20S4788 12219S 167122 71S4S1 S74466
totaI IiabiIities 291S491 64497 266S482 641807 170212 2S4S498
Lqu|ty
shares caplLal 4194422 3228832 4194422 3730774 7419887 3937742
Reserves 911806 1136672 439216 6274197 1864094 149676
TotaI equity S106228 66SS0 46S68 6S819 9283981 74S4S02

@ta| ||ab|||t|es and equ|ty 8021719 100 719120 100 124S419 100


INTERPRETATION O VERTICAL ANALYSIS O BALANCE
SHEET:
Total assets are increasing and so is the case with equity. The increase in equity is due
to increase in liabilities and its shares capital and reserves heads.











AUJI CEMENT PRIVATE LIMITED
'0rtical Analysis
Profit & Loss Account

2006 2007 2008
Amount Percent Amount Percent Amount Percent
Rupees in thousands
ales 3683433 1326008 4780036 1380204 4749217 1339334
lessgov levles 1316733 307212 1316733 3802037 1203313 3393337
net sa|es 428618 100 4628 100 S4S902 100

lesscosL of sales 2093027 4887913 2371788 6848381 2887790 8144021
grss pr|t 2191111 3112087 1091493 3131619 638112 1833979

oLher operaLlng lncome 43324 1010793 73833 2131937 107374 3033736
dlsLrlbuLlLlon cosL 31693 0739477 40643 1173397 33383 1303484
admlnlsLraLlve expense 66629 1334323 71302 2038798 76493 2137279
oLher operaLlng expense 94127 219608 38098 1677341 34290 0967032
flnance cosL 264297 616632 207103 398002 146934 4144333

net pr|t bere taxat|n 1777687 4147326 788180 2273817 434364 1281942

1axaLlon 373932 1339089 141837 4096027 40966 1133303

net pr|t ater taxat|n 1203733 2808437 646323 1866213 413398 1166411

INTERPRETATION O VERTICAL ANALYSIS O PROIT AND LOSS
ACCOUNT:
We can see from the analysis above that the cost of goods sold has increased and so is
the admin expense and distribution cost so there is a decline in net income.
AUJI CEMENT PRIVATE LIMITED
'0rtical Analysis
Statement of equity

2006 2007 2008
Amount Percent Amount Percent Amount Percent
Rupees in thousands
are cap|ta|
ordlnary 3707430 1129413 3707430 9923637 6932893 7467389
preference 486992 1483348 486992 1303789 486992 3243308

cap|ta| reserve
share premlum 0 0 0 0 1833709 1973132
hedglng reserve 0 0 0 0 84364 0908703

revenue reserve
accumulaLed loss 911806 2777681 439216 1229426 33979 0381421

@@ 282616 100 3733206 100 9283981 100








RATO ANALY88:
LOUDTY RATO8:
1_ CURRENT RATO:

CURRENT RATO= Current assets
Current liabilities

FOR 2007 FOR 2008

=1953527 =5294083
1442287 2454761

=1.354 times =2.16 times

INTERPRETATION:

Current ratio is the measure that how much assets are available to cover current
liabilities. The company had a greater average in 2007, so co had a better ratio to
cover its liabilities in 2008.


2_ ACD TE8T RATO:

ACD TEST RATO= Cash+short term investments
Current liabilities

FOR 2007 FOR 2008

=(2084+19558)+423133 =(26927+7179)+3783909
1442287 2454761

=0.308 times =0.875 times



INTERPRETATION:

Comparing the acid test ratios of these two years we can conclude that the short
term liquidity in current year has been improved than te previous year.


3_ RECEVABLE TURNOVER:

Receivable turnover= net credit sales
Avg net receivables

FOR 2007 FOR 2008

= 3463283 = 3545902
(28311+21642)/2 (21642+34106)/2

=1.38 times =1.27 times

INTERPRETATION:

n year 2007 the receivable turnover was greater than year 208 that means
company was speedy in converting its receivables into sales in the previous year.

4_ NVENTORY TURNOVER:

nventory turnover= cost of goods sold
Avg inventories

FOR 2007 FOR 2008

= 2371788 = 2887790
(183309+145090)/2 (230089+183309)/2

=14.4 times =13.9 times

INTERPRETATION

Comparing the two values company had a better sale of inventory during a
specific period. So, the company should take necessary measurements to make
the turnover better.
!ROFTABLTY RATO8:

5_ !ROFT MARGN:

PROFT MARGN=Net income
Net sales

FOR 2007 FOR 2008

=646323 =413598
3463283 3545902

=0.186 times =0.116 times

INTERPRETATION

Profit margin of the two years is concluding the fact that for every dollar of sales
the profit earned in 2007 was greater than 2008.

_ A88ET TURNOVER:

ASSET TURNOVER=Net sales
Avg assets

FOR 2007 FOR 2008

=3463283 =3545902
(6400688+6198107)/2 (6400688+12454493)/2

=0.54 times =0.37 times

INTERPRETATION:

From the above two ratios we can conclude that in 2008 the assets are taking
more time to generate sales than 2007, that is not beneficial for the company.


_ RETURN ON A88ET:

RETURN ON ASSET=Net ncome
Avg assets

FOR 2007 FOR 2008

=646323 =413598
(6400688+6198107)/2 (6400688+12454493)/2

=0.102 times =0.042 times

INTERPRETATION

From the above ratios, we can interpreted that in 2007 we were earning a greater
percentage of income per each dollar of assets than in 2008.

_ RETURN ON COMMON 8HE:

RETURN ON COMMON SHE=Net income
Avg common SHE

FOR 2007 FOR 2008

=646323 =413598
(3282617+3735206)/2 (9283981+3735206)/2

=0.184 times =0.0635 times

INTERPRETATION:

As it is clear from the ratios above that year 2007 had a better percentage of
income earned on each dollar of share than 2008.

_ EARNNG !ER 8HARE:

EARNNG PER SHARE=Net income
Weighted avg CS outstanding

FOR 2007 FOR 2008

=1.73 times =0.85 times

INTERPRETATION:

n 2008 net income earned on each dollar of common stock, was greater than
that of 2007. That means company's net income earned on common stock has
decreased.

10_ !RCE EARNNG RATO:

PRCE EARNNG RATO= market price per share
E!8

FOR 2007 FOR 2008

=20.09 =16.06
1.73 0.85

=11.61 times =18.89

INTERPRETATION:

The price earning ratio of the company has increased, in spite of the fact that
company is getting into loss that means the investors assessment of the
company should not be really affected.

11_ !AYOUT RATO:

PAYOUT RATO=Cash dividends
Net income

FOR 2007 FOR 2008

=8361 =0
646323

=0.0129 times


INTERPRETATION:

Payout ratio for 2007 is 0.0129 and for 2008 the company gave no dividend. That
interprets that the company payout ratio was improved compared to 2008.


8OLVENCY RATO:

12_ DEBT TO TOTAL A88ET RATO:

DET TO TOTAL ASSET RATO= total debt
Total asset

FOR 2007 FOR 2008

=2665482 =3170212
6400688 12454493

=0.416 times =0.2545 times

INTERPRETATION:

The debt to total asset ratio indicates the company's degree of leverage.
t is higher for 2007, the higher the percentage of this ratio the higher the risk
that the company may be unable to meet its maturing obligations. ut in this case
the ratio is higher where the income is greater, so dosent make much difference.

13_ TME8 NTERE8T EARNED:

TMES NTEREST EARNED=income before income taxes n interest expense
nterest expense

FOR 2007 FOR 2008

=995285 =601518
207105 146954

=4.805 times =4.093 times

INTERPRETATION:

The time interest earned ratio indicate the company's ability to meet interest
payments as they come due, so in 2007 company had a better ratio than 2008's.
that means the company should make necessary measurements to cover the
interest payments.