Professional Documents
Culture Documents
Mr. Hamza
Mukhtar
Presented By:
Qamar Shahzad
Sultan Rubbani
Financial Statements Analysis
Analysis could be performed in three ways,
Economic Analysis
Industry Analysis
Firm Analysis
1.Economic Analysis
Economic indicators:
GDP growth
Inflation
Imports $2.72 bn
Inflation
The inflation rate in the economy in financial
year 2008 is 10.3 percent that is very high as
compared to the last year 7.8 percent.
Low Demand
products.
High international commodity prices
metal, copper,etc.)
Oil prices changes
Inflationary pressures by stimulating the
demand.
Higher interest rates.
High international commodity prices (e.g steel,
wheat etc.)
Prevailing inflation rates
INFLATION RATE
20
15
2005-06H
10 2006-07H
2007-08H
5
0
CPI Food Group Non Food
Group
Affect on Industry and Firm
GDP growth decreased the growth of per
capita cement consumption from 22.2% in
FY07 to 2.9% in FY08.
Pakistan’s Cement sector is correlated to GDP
growth.
In the past years, Pakistan’s cement sector
witnessed a robust growth due to the country’s
strong economic growth.
However, in FY08, lower GDP growth has
affected the construction activity in the
country and thus affected the demand for
cement in local market.
Sales volume achieved during the first quarter
was 749,492 mt of grey cement, 18,664 mt
white cement.(FY08-373,830..FY07-15003)
Despite these high sales volume, the company
suffered losses.
Reasons of losses
Higher production costs.
Due to inflationary spiral afflicting our
economy.
Huge input cost of coal.
Rapid depreciation in exchange rate and
mounting interest rate.
Which adversely affected operating margins of
company.
Industry
Analysis
Learning Objective in Industry
Analysis
To determine the opportunities and threats that exists for
firms within a competitive environment.
Suppliers
Buyers
Substitute Products
Rivalry
Definition of
Industry
The people or companies engaged in a
particular kind of commercial
enterprise; "each industry has its own
trade publications"
Oil manufacturer
Ghee manufacturer
Soap industry
Foreign buyers
Major Products
Caustic Soda
Bleaching Powder
Liquid Chlorine
Agri. Chemicals
Hydcloric Acid
Ammonium Chloride
Chemical Product Development
Idea Generation
Technology search
Evaluation
Market development
Licensing and negotiating
Team efforts
Changing chemical industry
Decline of Multinationals
Flexibility in productions
Government Regulations
Economic Situations
Attract New Firm in Industry
Government Rules & Regulations
Differentiation
Cost Leadership
Focus
Elements of Cost
Direct Material
Direct Labor
Flow of Funds
Risks
Balance Sheet
SHARE CAPITAL AND 2006 2005
RESERVE
Authorized share capital 300,000,000 300,000,000
Cont.
Current Assets 2006 2005
Stores, spares and loose tools 210,104,864 182,406,368
2006
2005
Cash from operations/Current
Liabilities 0.03 0.623
Cont.
Current Assets 2006 (%) 2005 (%)
Stores, spares and loose tools 3.91 5.04