29901165 comparative analysis of prism cement ltd with jk cement ltd

8/13/2019 29901165 Comparative Analysis of Prism Cement Ltd With JK Cement Ltd

1/57

Chapter 1Introduction

1.1 Overview- Ratios

1.2 Companies for Analysis

1.3 Objective !cope of

Researc" !tudy

1.# $imitation of !tudy

1.% Researc" &et"odolo'y


2/57

omparative analysis is an important tool of analy(in' and evaluatin' t"e

performance and prospects of a firm. )"e analysis and interpretation of

financial statements is used to determine t"e financial position and results ofoperations a well. *inancial statements are prepared primarily for decision-

ma+in'. )"ey play a dominant role in settin' t"e framewor+ of mana'erial

decisions. ,ut t"e information provided in t"e financial statements is not an

end in itself as no meanin'ful conclusions can be drawn from t"ese

statements alone.

C

owever t"e information provided in t"e financial statements is of immense

use in ma+in' decisions t"rou'" analysis and interpretation of financialstatements. *inancial analysis is /t"e process of identifyin' t"e financial

stren't"s and wea+nesses of t"e firm by properly establis"in' relations"ip

between t"e items of t"e balance s"eet and t"e profit and loss account.0

1.1 Ratios

)"e most prevalent met"od of comparative analysis is t"rou'" ratio analysis.

)"e ratio analysis can be for a sin'le year or it may e tend to more t"an oneyear. )"e ratios can also be compared wit" similar ratios of ot"ers concerns

to ma+e a comparative study.

*irst all ratios will be wor+ed out for eac" year and eac" set of

comparable items. )"e ratios wor+ed out will be put in t"e conte t of a trend over

several years. )"ey will be compared wit" similar companies standard ratios.

i. *or t"e year concerned and

ii. Over a period of time.

2


3/57

Types of Ratio

1. Liquidity Ratio

i). Current Ratio

)"e ratio is wor+ed out by dividin' t"e current assets of t"e concern by itscurrent liabilities. Current ratios indicate t"e relation between current assets

and current liabilities. Current liabilities represent t"e immediate financial

obli'ations of t"e company. Current assets are t"e sources of repayment of

current liabilities. )"erefore t"e ratio measures t"e capacity of t"e company

to meet financial obli'ation as and w"en t"ey arise. )e tboo+s claim a ratio

of 1.% to 2 is ideal bit in practice t"is is rarely ac"ieved. )"is ratio is also

+nown as wor+in' capital ratio.

ii). Acid Test Ratio

4uic+ assets represent current assets e cludin' stoc+ and prepaid e penses.

!toc+ is e cluded because it is not immediately reali(able in cas". 5repaid

3

Figure 1 Functional Classification


4/57

e penses are e cluded because t"ey cannot be reali(ed in cas". A minimum

of 16 1 is e pected w"ic" indicates t"at t"e concern can fully meet its

financial obli'ations. )"is also called as $i7uid ratio or 4uic+ ratio.

2. Activity Ratios

i). De tors Turnover Ratio

)"e ratio obtained s"ould be compared wit" t"at of ot"er similar units. If t"e

ratio of t"e company bein' studied is 'reater 8say 19 wee+s as a'ainst :

wee+s for t"e industry; it indicates t"at t"e company is allowin' lon'er t"an

t"e usual credit periods. )"is may be justified in t"e case of new companies

or e istin' companies enterin' into new ventures

ii). Creditors Turnover Ratio

)"is ratio s"ows "ow fre7uently company is payin' to its creditor.


5/57

assets. )"us wit" t"e "elp of t"is ratio it is possible to identify suc"

underlined or unutili(ed assets and arran'e for t"eir disposal.

#. Leverage Ratio

i). De t$%quity Ratio

Also +nown as e ternal - Internal e7uity ratio is calculated to measure t"e

relative claims of outsiders a'ainst t"e firm0s assets. )"is ratio indicates t"e

relations"ip between t"e e ternal e7uities or t"e e7uities or t"e outsider0s

funds and t"e internal e7uities or t"e s"are"older0s funds.

ii). !nterest Coverage Ratio

i'"er t"e ratio better is t"e covera'e. )"e firm may not fail on its

commitments to pay interest even if profits fall substantially.

&. 'rofita ility Ratios

i). (ross 'rofit Ratio

A comparison wit" t"e standard ratio for t"e industry will reveal a picture of

t"e profitability of t"e concern. Also t"e ratio may be wor+ed out for a few

years and compared to verify if a steady ratio is maintained.

ii). et 'rofit Ratio

)"is ratio serves a similar purpose as and is used in conjunction wit" t"e

'ross profit ratio.

iii). Return on Assets

)"is ratio measures t"e profits of t"e concern as a percenta'e of t"e total

assets. *or t"e purpose of t"is ratio t"e operatin' profit is calculated by

addin' bac+ to net profit6 81; Interest paid on t"e lon' term borrowin's and

%


6/57

debentures 82; Abnormal and non-recurrin' losses 83; Intan'ible assets

written off. !imilarly from t"e net profit abnormal and non-recurrin' 'ains

are deducted. )"e idea is to 'et profit 'enerated out of total investments

made.

iv). %arning 'o*er

=arnin' power is a measure of business performance w"ic" is not affected by

interest c"ar'es and ta burden. It abstracts away t"e effect of capital

structure and ta factor and focuses on operatin' performance. ence it is

eminently suited for inter-firm comparison. *urt"er it is internally consistent.

)"e numerator represents a measure of pre-ta earnin's belon'in' to all

sources of finance and t"e denominator represents total financin'.

v). Return on Capital %+ployed

ROC= is t"e post-ta version of earnin' power. It considers t"e effect of

ta ation but not t"e capital structure. It is internally consistent. Its merit is

t"at it is defined in suc" a way t"at it can be compared directly wit" t"e

post-ta wei'"ted avera'e cost of capital of t"e firm.

vi). Return on %quity

)"e return on e7uity measures t"e profitability of e7uity funds invested in

t"e firm. It is re'arded as a very important measure because it reflects t"e

productivity of t"e owners"ip capital employed in t"e firm.

,. -aluation Ratios

>aluation ratios indicate "ow t"e e7uity stoc+ of t"e company is assessed in

t"e capital mar+et. !ince t"e mar+et value of e7uity reflects t"e combined

influence of ris+ and return valuation ratios are t"e most compre"ensive

measures of a firm0s performance.

:


7/57

i). 'rice %arnings Ratio

)"e 5= Ratio is a summary measure w"ic" primarily reflects t"e followin'

factors6 'rowt" prospects ris+-c"aracteristics s"are"older orientation

corporate ima'e and de'ree of li7uidity.

ii). %-$% !DTA Ratio

=> is t"e sum of t"e mar+et value of e7uity and t"e mar+et value of debt.

)"e mar+et value of e7uity is simply t"e number of outstandin' e7uity

s"ares times t"e price per s"are. As far as debt is concerned if it is in t"e

form of loans its mar+et value "as to be imputed. ?enerally a rupee of loan

is deemed to "ave a rupee of mar+et value.

=>-=,I@)A is supposed to reflect profitability 'rowt" ris+ li7uidity and

corporate ima'e.

1.2 Co+panies for Co+parative Analysis

,ein' a mana'ement trainee of 5rism Cement $td it is a comparative

analysis of 5rism Cement $td wit" B Cement $td. ,efore 'oin' on deep "ere

is company profile in brief.

1.2.i. 'ris+ Ce+ent Ltd

5rism Cement $td. Is an I!O 99162999 certified professionally mana'ed

company promoted by t"e Rajan Ra"eja ?roup. )"e company operates one

of t"e lar'est sin'le +iln cement plants in t"e country at !atna &ad"ya

5rades". )"e company "as also a pac+in' unit at Alla"abad


8/57

)"e company primarily caters to t"e demand in t"e Eort"ern Re'ion mainly

in t"e state of


9/57

.B. Cement is an affiliate of t"e .B. Or'ani(ation w"ic" was founded by $ala

Bamlapat !in'"ania. )"e .B. Or'ani(ation is an association of industrial and

commercial companies and "as operations in a broad number of industries.

B cement operations commenced commercial production in &ay 1 D% at itsfirst plant at Eimba"era in t"e state of Rajast"an. At Eimba"era it started

wit" a sin'le +iln wit" a production capacity of 9.3 million tons. B Cement

$td added a second +iln in 1 D wit" production capacity of 9.#2 million tons

and a t"ird +iln in 1 G2 wit" a production capacity of 9.#2 million tons. )"ey

added a precalciner wit" a capacity of 9.# million tons in 1 GG w"ic"

increased t"eir capacity at Eimba"era to 1.%# million tons. @urin' t"e years

1 G t"rou'" 2993 it continued to implement modifications to eac" of t"eir+ilns w"ic" increased t"eir a''re'ate capacity at Eimba"era to 2.G million

tons as of !eptember 39 299%.

B commissioned a second 'rey cement plant at &an'rol plant in 2991 wit"

a production capacity of 9.D% million tons. As of !eptember 39 299% it "ad

an a''re'ate production capacity of 3.%% million tons per annum of 'rey

cement. B w"ite cement plant was completed in 1 G# wit" a capacity of

%9 999 tons. )"eir continuin' modifications to t"e plant "ave increased itsproduction capacity to 399 999 tons as of !eptember 39 299%.

)oday . B. Cement $td. is one of t"e lar'est cement manufacturers in

Eort"ern India. )"ey are also t"e second lar'est w"ite cement manufacturer

in India by production capacity. H"ile t"e 'rey cement is primarily sold in t"e

nort"ern India mar+et t"e w"ite cement enjoys demand in t"e e port

mar+et includin' countries li+e !out" Africa Ei'eria !in'apore ,a"rain

,an'lades" !ri $an+a Benya )an(ania


10/57


11/57

)o find out t"e profitability position of t"e company t"eir ?5

&ar'in E5 mar'in =arnin' 5ower etc.

)o find out t"e s"ort term solvency position of company i.e.

$i7uidity current ratio wor+in' capital ratio etc. )"is will "elp tofind out t"e ability of firm to meet its current liabilities and

perform day to day operation.

)o find out t"e benefits provided by company to its s"are"olders

=arnin' per s"are @ividend @eclared corporate social

responsibilities etc.

1.&. Li+itation of the 5tudy6

$imitations are difficulty faced or can be face w"ile doin' study. )"ese

can be normal limitation li+e- bud'et constraints time constraint w"ic"

are common for every project. ,ecause time and money are always

limited and we cannot spend in "u'e amount. !o t"is is first constraint to

finis" study in time and wit"in bud'et.

Apart from t"ese limitations ot"er are- )ec"nical $imitation. )"ese

limitations are related wit" constraint of tool or met"od used for analysis.

As t"is is project is totally based on secondary data. !o t"e main

limitation w"ic" can be faced are6

!tudy is only based on annual report of company w"ic" is not

sufficient to compare performance efficiency of company.

Information available in annual report is also altered w"ic" is not so

accurate.

1.,. Research 7ethodology

11


12/57

Type of Data6 $ )"ere are two types of data6 5rimary @ata and !econdary

@ata. 5rimary data are t"ose data w"ic" are collected first time to meet t"e

objective of researc" only. !econdary data is data w"ic" "as been already

used for any ot"er purpose and can be used for t"is researc". As t"is study is

based on financial statements of companies means !econdary @ata.

7ethod of Data collection6 $ *or collectin' secondary data Annual report

of company will use as well as financial reports available on various stoc+

mar+et websites.

Data Analysis 4 !nterpretation6 $ Collected data will we present wit" t"e

"elp of-

o )able- )o represent data in tabular form. It is easy to

analyse data and ma+e some conclusion

o ,ar 'rap"-


13/57

13

Chapter 25rism Cement $td

B Cement $td

2.1.9 5rism Cement $td

2.1.1 Company >ision &ission

2.1.2 *eatures

2.1.3 Corporate !ocial

Responsibility

2.1.# Current 5erformance

2.2.9 B Cement $td

2.2.1 5lants

2.2.2 Corporate !ocial

Responsibility


14/57

rism Cement $td and B Cement $td bot" are player of cement industry.

,ot" t"e companies are tar'etin' Eort"ern re'ion of our country.

Alt"ou'" B cement is major player as compare to 5rism Cement $td because

it is operatin' from last 3# years on t"e ot"er "and 5rism Cement $td is

operatin' from only 1% years. ,ut 5rism "as performed very well and

ac"ieved milestones in very less time. *or t"is researc" study we are

considerin' t"e performance of last four financial years of bot" t"e company.

,efore analy(in' t"eir performance let0s see t"e company important aspects

in deep.

5

2.1.8 'ris+ Ce+ent Ltd

5rism Cement $td. Is an I!O 99162999 certified professionally mana'ed

company promoted by t"e Rajan Ra"eja ?roup. )"e company operates one

of t"e lar'est sin'le +iln cement plants in t"e country at !atna &ad"ya

5rades". )"e company "as also a pac+in' unit at Alla"abad


15/57

To be acknowledged as a leading player in the industry with the highest

level of integrity.

7ission6$

!tate of t"e art cement plants

)ransparent dealin's wit" all sta+e"olders

Committed to t"e principles of 'ood corporate 'overnance

2.1.2. Features

)"e entire cement manufacturin' process at all prism cement plantrepresents t"e latest relevant state-of-t"e-art tec"nolo'y.

Our all plant e7uipment are supplied by & ! *.$. !midt" Co.

@enmar+ and its subsidiaries >entomatic Brupp Industries $td. A,,

!eimens and Crompton ?reaves.

Computeri(ed minin' activities usin' t"ree dimensional ima'in' for

optimum blendin' of raw material.

)"e vertical roller press mill for efficient 'rindin' of raw meal.

!i sta'e low pressure drop pre-"eater for lower power consumption.

Online computeri(ed 7uality control by -ray spectrometer to ensure

raw meal control and consistency from raw meal to final product

cement.

*u((y lo'ic control for +iln and cement mill to ensure instantaneous

corrective response t"rou'" computer based control system.

A Combination of roller press and ball mill for improved finis" 'rindin'

of cement

1%


16/57

4uality 'rindin' t"rou'" closed circuit 'rindin' system

5ollution control system e.'. =!5 and ba' filters for all plant buildin' to

meet strin'ent pollution control re7uirement.

All electronic pac+ers eac" capable of pac+in' accurately 129 &) of

finis"ed cement per "our.

Automatic truc+ loader eac" capable of loadin' 1% &) of cement in 19

minutes.

Ha'on loaders eac" capable of loadin' one full ra+e in % "ours.

)otal self reliance in power re7uirement t"rou'" @? sets

2.1.# Corporate 5ocial Responsi ility

*or prism corporate social responsibility is not just a pro'ram but it is t"e

way business is done every day. )"e company "as always been conscious of

its social obli'ation and "as initiated welfare pro'rammes for t"e benefit of

its employees and villa'ers livin' near t"e plant by providin' t"e basic

facilities and a better way of livin' ri'"t from its inception.

,esides providin' emer'ency and basic medical facilities to its employees

and contractors and t"eir families at t"e plan a mobile medical van provides

free medical aid to t"e villa'ers and t"eir families.

Operations of a cement plant "ave in"erent potential to emit dust and 'ases

t"at may affect air 7uality ne'atively. At prism t"e installation of pollution

control e7uipment of international standard are in place to improve air7uality at and around t"e operations.

Hater mana'ement and water 7uality remain t"e +ey focus areas of t"e

mana'ement. )"e 7uality of bot" surface and 'round ware is monitored

1:


17/57

re'ularly to ensure t"at t"e minin' and plant operations do not pollutes t"e

water resources of t"e communities livin' around t"e minin' and plant area.

In reco'nition of t"e above t"e company was awarded t"e ener'y

conservation award by t"e 'overnment of India ministry of power for t"eyear 299:. )"e company was also awarded t"e 1 st pri(e for environment

mana'ement by t"e 'overnment of &ad"ya 5rades" ministry of

environment announced in 299D.

2.1.& Current 'erfor+ance

5rism cement posted a profit after ta 85A); of Rs. 2.#2 billion for t"e year

ended une 39 299G as a'ainst Rs. 1. 3 billion for t"e previous year ended une 39 299D re'isterin' a 'rowt" of 2%F.

!ales 'rew 1%F from Rs. G.G3 billion to Rs. 19.2 billion in t"e same period

crossin' t"e Rs. 19 billion mar+ for t"e first time. )"e company is debt-free

and "as li7uid investment of over Rs. 2.%1 billion as on une 39 299G.

)"e si'nificant 'rowt" in net profits is driven by increase in sales volume.

Improve reali(ations and reduced finance c"ar'es despite increase in input

costs. ,lended cement contributed to GDF of sales t"e company said in a

release.

)"e company caters mainly to mar+ets of eastern


18/57

B Cement $imited en'a'es in t"e manufacture and trade of cement and

related products primarily in India. It produces 'rey and w"ite cement as

well as w"ite cement based Hall 5utty and B Hater 5roof cement. )"e

company0s 'rey cement consists of ordinary 5ortland cement 8O5C; and

5ortland po((olana cement 855C;. It mar+ets O5C products under t"e brand

names .B. Cement and !arvas"a+timan 55C products under .B. !uper and

w"ite cement products under .B. H"ite and Camel. )"e company also

involves in t"e 'eneration of electricity t"rou'" its waste "eat recovery

plant. B Cement $imited e ports w"ite cement to !out" Africa Ei'eria

!in'apore ,a"rain ,an'lades" !ri $an+a Benya )an(ania t"e


19/57

!ponsors"ip of annual =ye camps at ?otan !treet $i'"t for ?otan villa'e )ree plantation alon' t"e road leadin' to ?otan Or'ani(in' !ocial event for residents of $ocal area *undin' )ec"nical support for Infrastructure projects of $ocal

Community )ube Hell J to provide drin+in' water for villa'ers )emple 8Renovation of two old temples; @"arams"ala 8Inn; at ?otan >illa'e *ree education to t"e wards of Bar'il war "eroes *ree bus service for students of nearby villa'es ,uildin' for 'irls sc"ool at ?otan villa'e

1


20/57

29

Chapter #5erformance

Analysis of 5rism

Cement $td wit" B

Cement $d

3.1 ,alance !"eet of

Companies

3.2 5 $ of Companies

3.3 Ratio Analysis

Interpretation


21/57

inancial statements are an important source of information for

evaluatin' t"e performance and prospects of a firm. If properly analy(ed

and interpreted financial statements can provide valuable insi'"ts into afirm0s performance. *inancial statement analysis may be done for a variety

of purposes w"ic" may ran'e from a simple analysis of t"e s"ort-term

li7uidity position of t"e firm to a compre"ensive assessment of t"e stren't"s

and wea+nesses of t"e firm in various areas.

*

#.1 alance 5heet of Co+panies

)"e balance s"eet s"ows t"e financial condition of a business at a 'iven

point of time. As per t"e Companies Act t"e balance s"eet of a company

s"all be in eit"er t"e account form or t"e report form. )able 3.1 s"ows

balance s"eet of 5rism Cement $td )able 3.2 s"ows balance s"eet of B

Cement $td.

#.2 '4L of Co+panies

5rofit $oss account also +nown as income statement of a company depicts

all t"e information re'ardin' Income and e penditure of company. )able 3.3

s"ows 5 $ of 5rism Cement $td and )able 3.# s"ows 5 $ of B Cement $td.

21


22/57

'ris+ Ce+ent Ltd 9 alance 5heet) Accounting 'eriod 9Rs. !n Lacs)

288,$8: 288:$8; 288;$8< 288s Fund

Capital 2 G.2% 2 G.2% 2 G.2% 2 G.2%Reserve !urplus -##. 9 112. D 31 .%2 3:3.#9

2%3.3% #11.22 :1D.DD ::1.:%

Loan Fund

!ecured $oan 199.2D 9.99 9.99 9.99


23/57

#,:.&

:2.=

&&8#.&

alue of =7uity to )otal @ebt ratio is measure of

$evera'e of company. *or B Cement $td it is constant i.e. 1.%3 in 299%-9:

1.G1 in 299:-9D 2.23 in 299D-9G and 9.# in 299G-9 . *or 5rism Cement $td.

it is very "i'" because 5rism finance mainly from e7uity financin'. In 299:-

9D it "as redeemed all its debt so debt portion become Lero. )"at0s w"y in

299%-9: it is D.D2 but from 299:-9D to 299G-9 it came to infinite because

denominator becomes (ero.

Turnover Ratio

1. Inventory )urnover Ratio6

Inventory )urnover RatiosK

299%-9: 299:-9D 299D-9G 299G-9 B Cement 1#.D3 1%.DD 1:.1% 1#. D5rism Cement 21. % 12.92 11.:2 G.:3

Inventory )urnover 5eriod 8In da ys; K

299%-9: 299:-9D 299D-9G 299G-9 B Cement 2#.DG 23.1# 22.:9 2#.3G5rism Cement 1:.:3 39.3D 31.#2 31.GG

:


37/57

Credit sales during ,ear A%erage Balance of Debtors

!nterpretation6 Inventory )urnover Ratio is 'ood for bot" companies. *or B

Cement $td. it is consistent and almost same for all # financial year. ,ut for

5rism Cement $td. it is decreasin' in conse7uent years. Alt"ou'" "i'"er t"e

ratio t"e more efficient mana'ement of inventories and vice versa.

owever t"is may not always true. A "i'" inventory turnover may be caused

by a low level of inventory w"ic" may result in fre7uent stoc+ outs and loss

of sales and customer 'oodwill.

2. @ebtor )urnover Ratio

@ebtor )urnover RatioK

D


38/57


39/57

-et 'alesTotal Assets

!nterpretation6 ere *i ed Assets )urnover Ratio is i'"er for 5rism

Cement $td. t"is indicates a "i'" de'ree of efficiency in asset utili(ation. On

t"e ot"er "and it is very low for B Cement $td. in 299%-9: but increases insuccessive years.

%. )otal Assets )urnover Ratio

)otal Assets )urnover RatioK

299%-9: 299:-9D 299D-9G 299G-9 B Cement 9.:: 9.G9 9.G2 9.D#5rism Cement 2.3G 1.3: 1.1 9.D#

!nterpretation6 )otal assets )urnover Ratio is same as *i ed Assets

)urnover ratio. Only difference is t"at it considers t"e total asset instead of


40/57

&ross /rofit -et 'ales

( 011

-et /rofit -et 'ales

( 011

fi ed assets. ere a'ain total Assets )urnover Ratio is 'ood for 5rism Cement

$td. in Initial Mear but it is s"owin' a decreasin' trend. On t"e ot"er "and it

is very low for B Cement $td. s"owin' inefficient employment of assets.

'rofita ility Ratio

1. ?ross 5rofit &ar'in

?ross 5rofit &ar'inK

299%-9: 299:-9D 299D-9G 299G-9 B Cement #3F %3F %#F %9F5rism Cement ##F %:F %2F #3F

!nterpretation6 ,ot" t"e companies are maintainin' consistent ?ross 5rofit

&ar'in. B Cement $td and 5rism Cement $td bot" are maintainin' almost %9

F ?ross 5rofit in its total sales. In nuts"ell we can say t"at 5rism cement $td

is 'ettin' more mar'in of ?5 as compare to B Cement $td. ,ut from 299D-9G

onward B Cement is more efficient in its manufacturin' e penses and start

'ettin' more ?5 &ar'in as compare to 5rism Cement $td.

2. Eet 5rofit &ar'in

19


41/57

/rofit after Ta"A%erage Total Assets

( 011

Eet 5rofit &ar'inK

299%-9: 299:-9D 299D-9G 299G-9 B Cement #F 1#F 1GF 19F5rism Cement 11F 2%F 2GF 1%F

!nterpretation6 ere bot" companies are 'ettin' lesser Eet 5rofit &ar'in as

compare to ?5 &ar'in. It s"ows t"at Cement Industries "ave lot of

administrative e penses because of w"ic" its net profit mar'in is decreases.

In 299%-9: B Cement $td was 'ettin' only #F of sales as Eet 5rofit. Its net

profit increases to 1#F 1GF and 19F in successive financial year. *or 5rismcement $td. it is 1#F in 299%-9: and increases to 2%F 2GF and 1%F

respectively in successive years. ere a'ain 5rism Cement $td. is performin'

better t"an B Cement $td.

3. Return on Assets

Return on AssetsK

299%-9: 299:-9D 299D-9G 299G-9 B Cement 2F 12F 1%F DF5rism Cement 13F 3#F 33F 11F

11


42/57

/rofit before interest ! Ta"A%erage Total Assets

( 011

/rofit before interest after Ta"A%erage Total Assets

( 011

!nterpretation6 Return on assets means return on total investment made in

current assets as well as fi ed assets. *or B Cement it is very low in 299%-9:

i.e. 2F. It increases to 12F 1%F and t"en DF in respective years. *or 5rism

cement $td. it is 13F in 299%-9: and increases to 3#F 33F and 11F in

respective years.

#. =arnin' 5ower

=arnin' 5owerK

299%-9: 299:-9D 299D-9G 299G-9 B Cement GF 29F 22F 1#F5rism Cement 23F %3F #3F 1GF

!nterpretation6 A'ain in =arnin' 5ower also 5rism Cement $td is performin'

better t"en B Cement $td. =arnin' 5ower Ratio is s"owin' increasin' trend

in 299:-9D and 299D-9G but in 299G-9 a'ain it decreases for bot" company.

%. Return on Capital =mployed

12


43/57

Equity EarningsA%erage Equity

( 011

Return on Capital =mployedK

299%-9: 299:-9D 299D-9G 299G-9 B Cement DF 1#F 1DF F5rism Cement 3#F 3%F 33F 12F

!nterpretation6 *or B Cement $td. in 299%-9: Return on capital =mployed

is DF and increases to 1#F 1DF and F respectively. *or 5rism Cement

$td. it is 3#F 3%F 33F and 12F in respective Mear.

:. Return on =7uity

Return on =7ui tyK

299%-9: 299:-9D 299D-9G 299G-9 B Cement :F 2#F 2GF 13F5rism Cement 2%F %GF #DF 1%F

13


44/57

=arnin' Available for =7uity !"are"olderEumber of Outstandin' !"are

!nterpretation6 A'ain in Return for e7uity s"are "older 5rism Cement $td

is 'ivin' 'ood return to its s"are"older i.e. 2%F in 299%-9: %GF in 299:-9D

#DF in 299D-9G and 1%F in 299G-9 . *or B Cement $td. it is :F in 299%-9:

2#F in 299:-9D 2GF in 299D-9G and 13F in 299G-9 respectively.

%arnings 'er 5hare

=5!K

299%-9: 299:-9D 299D-9G 299G-9 B Cement :.3: 2%.%# 3D. 2 29.3:5rism Cement 2.9G :.#: G.19 3.23

1#


45/57

#arket /rice per s2areEarnings per '2are

!nterpretation6 In case of =5! B Cement is 'ivin' 'ood return as compare

to 5rism Cement $td. In 299%-9: B Cement0s =5! is :.3: 2%.%# in 299:-9D

3D. 2 in 299D-9G and 29.3: in 299G-9 . *or 5rism Cement $td. it is 2.9G in299%-9D :.#: in 299:-9D G.19 in 299D-9G and 3.23 in 299G-9 respectively.

-aluation Ratio

1. 5rice =arnin's Ratio

5rice =arnin's Ra tioK

299%-9: 299:-9D 299D-9G 299G-9 B Cement 2D.3% %.:: #.39 1. %

5rism Cement 13.#3 :.:D #.1% D.9%

!nterpretation6 i'" 5rice-=arnin's Ratio s"ow 'ood mar+et return for

e7uity s"are"older. In 299%-9: 5= Ratio for B Cement is 2D.3% times. It

s"ows t"at investor see 'ood 'rowt" prospect in future. ,ut from ne t year

1%


46/57

Enterprise $alue .Earnings before interest3 ta"es3 depreciation and a4orti5ation

onward its 5= Ratio is decreased s"arply. It is %.:: in 299:-9D #.39 in 299D-

9G and 1. % in 299G-9 . *or 5rism Cement $td. it is 13.#3 in 299%-9: :.:D in

299:-9D #.1% in 299D-9G and D.9% in 299G-9 respectively.

2. =>-=,I@)A Ratio

=>-=,I@)A Ra tioK

299%-9: 299:-9D 299D-9G 299G-9 B Cement .%G #.#% 3.DG 2.##5rism Cement :.D1 3.GG 2.G% 3.DG

!nterpretation6 =>-=,I@)A is also a tool to reflect profitability. In 299%-9: BCement $td was s"owin' =>-=,I@)A ratio of .%G times w"ic" was 'ood

indicator for company. ,ut for ne t year0s t"is ratio decreases to #.#% in

299:-9D 3.DG in 299D-9G and 2.## in 299G-9 . *or 5rism Cement $td it is

:.D1 times in 299%-9: 3.GG in 299:-9D 2.G% in 299D-9G and 3.DG in 299G-

9 .

an/ruptcy Forecasting

Alt+an @$5core

L K 1.2 N 1 1.# N 2 3.3 N 3 9.: N # 1.9 N %

H"ere N 1 K Hor+in' Capital to )otal Assets Ratio

1:


47/57

N2 K Retained =arnin's to )otal Assets

N3 K =,I) to )otal Assets

N# K &ar+et >alue of =7uity to ,oo+ >alue of @ebt

N% K !ales to )otal Assets

299%-9: 299:-9D 299D-9G 299G-9

B Cement 2.DD 3.#: 3. 1 2.:9

5rism Cement D.%9 3.33 3.2% 1. %

!nterpretation6 ere B Cement $td is s"owin' very "ealt"y firm becauseits ratio is more t"an 2. in all years. *or 5rism Cement $td it is more t"an

B Cement $td but in 'rap" it is s"owin' decreasin' trend because its debt is

(ero so its mar+et value of e7uity to boo+ value of debt become (ero.

Ot"erwise 5rism is very sound company and it doesn0t s"ow any ban+ruptcy

1D


48/57

1G

Chapter &*indin' !u''estion

and Conclusion

1.1 *indin'1.2 Conclusion

1.3 !u''estion


49/57

&.1 Finding

Ratio Co+pany 288,$8:

288:$8;

288;$8

29901165 comparative analysis of prism cement ltd with jk cement ltd

Documents