Financial Report On Pioneer Cement

COMPARITIVE ANALYSIS OF FINANCIAL STATEMENTS
TABLE OF CONTENTS
TABLE OF CONTENTS......................................................................................................................................1
ACKNOWLEDGEMENT.....................................................................................................................................3
EXECUTIVE SUMMARY...................................................................................................................................3
PIONEER CEMENT LIMITED..........................................................................................................................5
BRIEF HISTORY ...............................................................................................................................................5
PHILOSOPHY:...............................................................................................................................................5
INCORPORATION:........................................................................................................................................5
PAID-UP CAPITAL/EQUITY............................................................................................................................5
VISION AND MISSION ....................................................................................................................................6
CORPORATE INFORMATION ........................................................................................................................6
COMPANY’S PROFILE.....................................................................................................................................7
.............................................................................................................................................................................7
DATA AND METHODOLOGY..........................................................................................................................7
DATA .................................................................................................................................................................8
METHODOLOGY..............................................................................................................................................8
RATIO ANALYSIS:.......................................................................................................................................8
DEFINITION OF ACCOUNTING RATIOS:.................................................................................................8
ADVANTAGES OF RATIOS ANALYSIS: ..................................................................................................8
LIMITATIONS OF RATIOS ANALYSIS:....................................................................................................9
TOOLS OF ANALYSIS........................................................................................................................................9
5.1. PERCENTAGE ANALYSIS:.....................................................................................................................10
FINANCIAL ANALYSIS....................................................................................................................................10
6.1. PERCENTAGE ANALYSIS......................................................................................................................11
6.1.1. HORIZONTAL ANALYSIS:..............................................................................................................11
6.1.2. VERTICAL ANALYSIS:....................................................................................................................17
6.6. VERTICAL ANALYSIS OF BALANCE SHEET....................................................................................21
6.6.1. ANALYSIS:.........................................................................................................................................24
6.1.3. TREND ANALYSIS...........................................................................................................................26
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National University of Computer and Emerging Sciences
7. RATIO ANALYSIS.........................................................................................................................................32
7.1. LIQUIDITY RATIOS.................................................................................................................................32
7.1.1. CURRENT RATIO:.............................................................................................................................32
7.1.2. QUICK RATIO:...................................................................................................................................35
7.1.3. TURNOVER/ACTIVITY RATIOS:...................................................................................................37
7.1.4. DEBTORS TURNOVER RATIO OR RECEIVABLES TURNOVER RATIO:................................39
7.1.5. TOTAL ASSETS TURNOVER RATIO:............................................................................................41
7.1.6. FIXED ASSETS TURNOVER RATIO:.............................................................................................43
7.2. PROFITABLITY RATIOS:.......................................................................................................................45
7.2.1. GROSS PROFIT (GP) RATIO:...........................................................................................................45
7.2.2. OPERATING PROFIT RATIO:..........................................................................................................47
7.2.3. RETURN ON ASSETS:......................................................................................................................50
7.2.4. RETURN ON EQUITY (ROE) RATIO:.............................................................................................51
7.2.5. DEBT RATIOS:...................................................................................................................................53
7.2.6. DEBT SERVICE RATIO OR INTEREST COVERAGE RATIO:.....................................................54
8. GENERAL RATIO ANALYSIS....................................................................................................................57
8.1. PROFITABILITY ANALYSIS:.................................................................................................................57
8.2. LIQUIDITY ANALYSIS:..........................................................................................................................57
8.3. DEBT ANALYSIS:....................................................................................................................................58
8.4. ASSETS:.....................................................................................................................................................58
9. COMPANY ANALYSIS.................................................................................................................................59
10. CONCLUSION..............................................................................................................................................60
11. FUTURE OUTLOOK...................................................................................................................................61
12. BIBLIOGRAPHY..........................................................................................................................................62
13. WORK LOAD MATRIX..............................................................................................................................62
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ACKNOWLEDGEMENT
In the name of “Allah”, the most beneficent and merciful who gave us strength
and knowledge to complete this report. This report is a part of our course
“Financial Accounting”. This has proved to be a great experience. This report
is a combine effort of Abu-Bakar Butt, Mariyum Javaid Sandhu, Shawana
Javaid Sandhu and Sareena Khan.
We would like to express our gratitude to Mr.Shehzad Moin who gave us

opportunity to complete this report. We would also like to thank our colleagues
who gave us many helpful comments which helped us a lot in preparing our
report.
EXECUTIVE SUMMARY
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Dec 01st, 2009
Mr.Shehzad Moin
Course Instructor, Financial Accounting
Fast University
Lahore.
Sir:
We herewith present our “Major Assignment” authorized by you as a
requirement for this course. In this report, we have tried to provide analysis of
financial statements of Pioneer Cement Ltd, Kohat Cement Ltd, Cherat
Cement Ltd.
We hope we have covered all that was required for the report. If there be any
clarification demanded, we would appreciate a call from you to our group
members.
Sincerely,
Abu- Bakar Butt
Mariyum Javaid Sandhu
Shawana Javaid Sandhu
Sareena Khan
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PIONEER CEMENT LIMITED
BRIEF HISTORY
PHILOSOPHY:
The Management of Pioneer Cement Limited is committed to maintaining this quality policy at all
levels of the company. For this, as well as to achieve our corporate objectives, we all shall work as a
team and pursue continuous improvement.
INCORPORATION:
Pioneer Cement Limited (PCL) was incorporated in Pakistan as a public company limited by shares on
February 09, 1986. Its shares are quoted on all stock exchanges in Pakistan. The principal activity of
the Company is manufacturing and sale of cement.
PAID-UP CAPITAL/EQUITY
Paid up Capital 199.5 million shares of Rs. 1,995

10/= each
Shareholders’ Equity 2,401
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VISION AND MISSION

Pioneer Cement Limited is committed to make sustained efforts towards optimum utilization of its
resources through good corporate governance for serving the interests of all its stakeholders.
CORPORATE INFORMATION
Company Name PIONEER CEMENT

COMPANY LIMITED.
Legal Status Public Limited Company
7th Floor, Lakson Square

Building
No.3, Sarwar Shaved Road,
Head Office Karachi, Pakistan.
Telephone (021) 5685052-55
Fax (021) 5685051

Email:
pioneer@pioneercement.com
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COMPANY’S PROFILE
BOARD OF DIRECTORS CHIEF FINANCIAL OFFICER

Mr. Muhammad Saleem
Chairman
Mr. Manzoor Hayat Noon COMPANY SECRETARY
Syed Anwar Ali
Managing Director & CEO
Mr. Javed Ali Khan CHIEF INTERNAL AUDITOR
Mr. Muhammad Zafar Qidwai
Directors
Mr. Aly Khan STATUTORY AUDITORS
Mr. Nadir Rahman Ford Rhodes Sidat Hyder & Co.
Mr. William Gordon Rodgers
Mr. Wajahat A. Baqai (NBP) COST AUDITORS
Mr. Rafique Dawood (FDIB) Siddiqui & Co.
Mr. Cevdet DAL
Mr. Etrat Hussain Rizvi LEGAL ADVISORS
Mr. Saleem Shahzada Hassan & Hassan
Sayeed & Sayeed
AUDIT COMMITTEE
BANKS
Chairman The Bank of Punjab
Mr. Rafique Dawood (FDIB) National Bank of Pakistan
Bank Islami Pakistan Limited
Members Meezan Bank Limited
Mr. Aly Khan The Royal Bank of Scotland
Mr. William Gordon Rodgers Askari Commercial Bank Limited
Mr. Etrat Hussain Rizvi Bank Al-Habib Limited
Mr. Wajahat A. Baqai (NBP) Habib Bank Limited
United Bank Limited
DATA AND METHODOLOGY
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DATA
We have chosen three cement industries for their comparative financial analysis. We have collected the annual
reports of our respective companies for five years (2004-2008) .The companies are as follows:
• Pioneer Cement Ltd.
• Kohat Cement Ltd.
• Cherath Cement Ltd.
Our main company is Pioneer Cement Ltd; whereas the other two Kohat Cement Ltd. Company and Cherath
Cement Ltd are its competitors. We have analyzed the income statement and balance sheet of these three
companies by making relative data which is useful for evaluating the results.
METHODOLOGY
RATIO ANALYSIS:
Ratio simply means one number expressed in term of another. A ratio is a statistical yardstick by means of
which relationship between two or various figures can be compared or measured. The term accounting ratio is
used to describe significant relationship between figures shown on a balance sheet, profit and loss account or in
any other part of accounting organization. Accounting ratio thus shows the relationship between the accounting
data.
DEFINITION OF ACCOUNTING RATIOS:

The term "accounting ratios" is used to describe significant relationship between figures shown on a balance
sheet, in a profit and loss account, in a budgetary control system or in any other part of accounting organization.
Accounting ratios thus shows the relationship between accounting data. Ratios can be found out by dividing one
number by another number. Ratios show how one number is related to another. It may be expressed in the form
of co-efficient, percentage, proportion, or rate.
ADVANTAGES OF RATIOS ANALYSIS:

Ratio analysis is an important and age-old technique of financial analysis. The following are some of the
advantages of ratio analysis:
1) SIMPLIFIES FINANCIAL STATEMENTS: It simplifies the comprehension of financial

statements. Ratios tell the whole story of changes in the financial condition of the business.
2) FACILITATES INTER-FIRM COMPARISON: It provides data for inter-firm comparison.
Ratios highlight the factors associated with successful and unsuccessful firm. They also reveal strong
firms and weak firms, overvalued and undervalued firms.
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3) HELPS IN PLANNING: It helps in planning and forecasting. Ratios can assist management, in its
basic functions of forecasting. Planning, co-ordination, control and communications.
4) MAKES INTER-FIRM COMPARISON POSSIBLE: Ratios analysis also makes possible
comparison of the performance of different divisions of the firm. The ratios are helpful in deciding
about their efficiency or otherwise in the past and likely performance in the future.
5) HELP IN INVESTMENT DECISIONS: It helps in investment decisions in the case of investors
and lending decisions in the case of bankers etc
LIMITATIONS OF RATIOS ANALYSIS:

The ratios analysis is one of the most powerful tools of financial management. Though ratios are simple to
calculate and easy to understand, they suffer from serious limitations.
1) LIMITATIONS OF FINANCIAL STATEMENTS: Ratios are based only on the information

which has been recorded in the financial statements. Financial statements themselves are subject to
several limitations. Thus ratios derived, there from, are also subject to those limitations. For
example, non-financial changes though important for the business are not relevant by the financial
statements. Financial statements are affected to a very great extent by accounting conventions and
concepts. Personal judgment plays a great part in determining the figures for financial statements.
2) COMPARATIVE STUDY REQUIRED: Ratios are useful in judging the efficiency of the business
only when they are compared with past results of the business. However, such a comparison only
provide glimpse of the past performance and forecasts for future may not prove correct since several
other factors like market conditions, management policies, etc. may affect the future operations.
3) RATIOS ALONE ARE NOT ADEQUATE: Ratios are only indicators; they cannot be taken as
final regarding good or bad financial position of the business. Other things have also to be seen.
4) PROBLEMS OF PRICE LEVEL CHANGES: A change in price level can affect the validity of
ratios calculated for different time periods. In such a case the ratio analysis may not clearly indicate
the trend in solvency and profitability of the company. The financial statements, therefore, be
adjusted keeping in view the price level changes if a meaningful comparison is to be made through
accounting ratios.
TOOLS OF ANALYSIS
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5.1. PERCENTAGE ANALYSIS:
5.2. RATIO ANALYSIS:
FINANCIAL ANALYSIS
Accounting ratios attempt to highlight the relationships between significant items in the
accounts of a firm. Financial ratios are the analyst’s microscope; they allow them to get a better
view of the firm’s financial health than just looking at the raw financial statements.
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6.1. PERCENTAGE ANALYSIS

6.1.1. HORIZONTAL ANALYSIS:
Horizontal analysis is also known as index analysis. It is a comparison of a company’s financial
condition and performance made across time.
1) INCOME STATEMENT:
Income statement is also named profit and loss account or income and expenditure account or
statement of operations and encompasses all sources of revenue, gain and losses and expenses
for a particular period, grouped into various headings as per charts of accounts of a company. In
other words, it summarizes the results of operations for an accounting period. The net income is
closed by transfer to balance sheet after paying the dividends and appropriations. Sometimes an
appropriation is made to general reserve and still some portion is left as retained earnings.
2) BALANCE SHEET:
The purpose o balance sheet is to reflect financial position of an entity on a particular date. The
balance sheet consists of assets, which are the property of the entity, the liabilities, which are
the debts payable to outside investors or suppliers of goods and services, and the shareholder’s
equity, which represents owners’ interest in the entity. At any given date, assets must be equal
to the contributions of the creditors and owners.
6.1.1.1. FIVE YEARS HORIZONTAL ANALYSIS OF INCOME

STATEMENT
PIONEER CEMENT COMPANY LIMITED
FIVE YEAR POSITION OF INCOME SATEMENT
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For the year ended June 30 2008 2007 2006 2005 2004
Net Sales 55% 2% 50% 55% 40%
Cost of goods sold 54% 52% 34% 47% 31%
Gross Profit 61% -74% 83% 74% 73%
Administrative And Selling expenses 293% 25% -15% 55% 19%
Operating Operating/Loss -124% -84% 107% 80% 91%
Other operating expenses 1997% -88% 13% 123% -5%
Other operating income 162% -84% 162% -65% 19%
Profit/loss from operations -189% -84% 120% 45% 84%
Financial & Other Voluntary separation 13% -286% 63% 3% 28%

scheme charges
Profit/loss before taxation 211% -120% 137% 65% 56%
Taxation 333% -135% 316% -133% -44%
Profit/loss after taxation 92% -114% 104% -22% 87%
6.1.1.1. ANALYSIS:
Sales of the Company has shown increasing trend and has increased up to 40% in 2004,55% in
2005 and 50% in 2006 and 2% in 2007 and 55% in 2008 and respective from previous years
Cost of sales has also shown an increasing trend. In 2004 it is 31%, 2005 it increased 47%, in
2006 in increased 34%, 52% increase in 2007 and 54% in 2008 from respective years cost of
sale increase more than increase in sales which result there is loss in 2007. The major reason
of this increase in cost was the plant shutdown due to irregular power supply of WAPDA
and increase in prices of diesel and empty bags.
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Gross profit of the company has also shown a increasing trend in from 2004 to 2005 up to 2006
respectively and then decrease and got loss in 2007 and then gross profit increase 61% in 2008
company cost of sale increases but sale decrease, in 2007 gross profit decreases -74% and it was
61% in 2008.Selling and distribution expenses also increases in 2008 as 293% and 25% in 2007
respectively. This decrease in gross profit was due to the increase in cost of goods sold and
also administrative and selling expenses which cause company got loss.
Operating profit showing increasing trend from 2004 to 2006 as 91%, 80% and 107%
respectively and then it decrease in 2007 and 2008 as -84% and -124% which show big loss in
the year of 2008.
Finance cost Decrease in 2007 as 286% and increased in 2008 as 13% which is not at higher
side but it is at higher side in 2004 to 2006 as 63% for expansion of new grey and white cement
plants. There is a great increase in 2008 which cause the loss of the company. Profit before tax
shows decrease in 2007 as 120% and increase in 2008 as 211% and company got loss in 2008.
Profit after tax decreased in 2007 by 114% and it was increase 92% in 2008. Company
management tries to expand its operations so it needs more finds that were got from short and
long term financing. Due to economic crises and dispute with unionized permanent workers,
company faces losses. Company is good for long term benefits, because it had declared
bonus shares for last five years. It had a great capacity to produce cement and they are
improving technology. They had implemented Enterprise Resource Planning software to
increase the efficiency and for better management planning.
6.1.1.2. HORIZONTAL ANALYSIS OF BALANCE SHEET

BALANCE SHEET
BALANCE SHEET
As at June 30 2008 2007 2006 2005 2004
EQUITY AND LIABILITIES
SHARE CAPITAL AND RESERVE
Authorized Share Capital 0% 0% 0% 0% 0%
Issue Subscribed & Paid Up Capital 18% 5% 5% 62% 26%

Reserves -22% -43% 847% -118% -28%
10% -10% 43% 197% -2%
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Surplus on Revaluation of fixed assets-net of 290% -5% -4% - -

tax
NON-CURRENT LIABILITIES
Redeemable capital - - -100% -8% 9.61%
Long term financing-secured 6% -83% - - 10.44%
Long term loans-secured -26% 27% -8% 3% -
Long term Musharaka finance -100% - - - -
Liabilities against assets subject to finance -51% 7% 65% 2780% 4.41%
lease
Long term deposits -65% -7% -15% 187% 0.145%
Long term creditor-unsecured -30% -26% - - -
Deferred liabilities -10% 17% -12% -21% 8.28%
Deferred tax liabilities - -100% 122% - -
-25% -3% 12% 9% 32.8%
CURRENT LIABILITIES
Creditors against expansion project -90% -5% -39% -
Trade and other payables 120% 7% 27% 251% 10.98%
Interest/ Mark up accrued 54% 70% -44% -25% 0.11%
Short term Murabah-secured -73% - - -
Short term Musharaka secured - - - -
Short term finances - - - - 4.90%
Short term borrowings - - -100% - -
Current maturity of redeemable capital - - -100% 93% -
Current maturity of long term loan - -100% -36% -64% 3.24%
Current portion of long term loan - -100% - -
Current portion of liabilities against assets 39% 761% 919% 112% 2.11%
subject to finance lease
Current portion of deferred liability -100% -99% - - - -
Sales tax payable - -100% 62% 340% -
49% 43% 41% 158% 21.34%
22% 2% 22% 61% 11.46%
ASSETS
NON CURRENT ASSETS

FIXED CAPITAL EXPENDITURE
Property, plant and equipment 27% -2% 20% 74% 52.31%
Long term loans -11% 43% -25% 13% 0.10%
Long term deposits -15% 28% 169% 55% 0.105%
Deferred tax assets - - - -100% -
27% -2% 21% 66% 52.52%
CURRENT ASSETS
Stock in trade -54% 55% 70% 12% 2.55%
Store, spare and loose tools 3% 11% 31% 13% 8.01%
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Assets held for disposal -100% - - - -

Trade Debts 35% 138% -34% -23%
Loan & advances 156% 80% -78% 939% 0.21%
Deposits & prepayments -59% -33% -16% -32% 1.03%
Other receivables 8471% -87% -73% 22% -
Current portion of long term deposits 838% - - - -
Sales tax net -100% - - - -
Taxation-net - -100% -11% -8% -
Cash & bank balance -54% 325% 310% -53% 0.72%
-19% 56% 34% 17% 12.52%
22% 2% 22% 61% 23.83%
6.1.1.2.1. ANALYSIS:
1) NON-CURRENT ASSETS:
As we can see from the horizontal balance sheet analysis of five years, the total non-current
assets have shown increasing trend. In 2004 it is 52.52%, 2005 it is 66% than it increase 21%
in 2006, 21% in 2006 and then it decrease in 2007 by 2% and then again increase in 2008 by
27% as compare to 2007. This shows heavy investment in fixed assets by the management.
Operating fixed assets showed increasing trend in from 2004 to 2006 by 74%, 20% respectively
it decreases 2% in 2007 and then again increase in 2008 from 2007 by 27%. Long term loans
showing mix trend it increased by 13% in 2005 and then it decreased 25% in 2006 and
increased by 43% in year 2007 and decrease 11% respectively. Lon-term deposit has shown an
increasing trend from 2005 to 2007 by 55%, 169% and 28% from respective years, and it
decrease in 2008 by 15% from 2007. Deferred tax assets just in 2005 than no more 2006, 2007,
2008 so it decrease almost 100%
2) CURRENT ASSETS:
Store, spare and tools has shown increasing trend from 2004 to 2008 by 13%, 31%, 11%,and
3% from their respective years, which shows that company is in good position as liquidity
point of view. Stock in trade shows increasing trend from 2005 to 2007 by 12% in 2005, 70%
in 2006, 55% in 2007 and decrease 54% in 2008.This higher inventory is indication of weak
inventory management. Trade debts has shown decreasing trend in 2005 from 2004 by 23%
and then decrease by 34% from 2005 an it increased by 138% in 2007 which is at higher side
and then it increase by 35% in 2008 from 2007.Receivable management is inefficient in 2007
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and 2008 by showing increasing trend as compare it with 2005 and 2006.Loan and advances
shown increasing trend in 2005 in huge amount it increase 939% from 2004 which means
company made advances and loans to the employees in huge amounts than it decrease in 2006
by 78% and in 2007 again increase by 80% and also increase in 2008 by 156%.deposits and
prepayment showing decreasing trend from 2005 to 2008 by 32%, 16%, 33% and 59% by
respective years. Other receivables also showing decreasing trend from 2006 to 2008 just
increased in 2005 from 2004 by 22%. Cash and bank balance first decreased in 2005 by 53%
from 2004 than it showing increasing trend from 2006 to 2007 by 310% and 325% from
respective years and then again it decreased in 2008 54% from 2007.
Over all current assets showing increasing from 2004 to 2007 by 17%, 34% and 56% from
respective years and it decrease in 2008 by 19% from 2007 which means current assets are
decreased in 2008.
3) EQUITY AND LIABILITIES:

Share capital show an increasing trend it increases in 2004 by 42% ,2005 in 62% and 5% in
2006 and 2007 respectively and 18% in 2008 which means that issued subscribed and paid
up capital increased throughout all the years. Reserves have decreased in year 2005 by
118% and increased in 2006 by 847%, after that it decreased in next two years in 2007 and
2008 by 43% and 22% respectively which shows that company has utilized all its reserves for
expansion of project. Due to expansion of project company has not sufficient reserves and
company has not paid any dividend after 2004.
4) NON-CURRENT LIABILITIES:
Non-current liabilities have also shown an increasing trend from 2004 to 2006 by 32.8%, 9%
and 12% and decreased in 2007 and 2008 by 3% and 25% from respective years. Capital
showing decreasing trend in 2005 and 2006 by 8% and 100%. Long term loans secured increase
by 3% in 2005 and then it decreased 8% in 2006 it again increased in 2007 by 27% and
decreased in 2008 by 26%. Liabilities against assets subject to finance lease increased from
2005 to 2007 by 2870%, 65% and 7% respectively and it decreased by 51% in 2008 from 2007.
Long term deposits increased 187% in 2005 and then it decreased in 2006 to 2008 by 15%, 7%
and 65% from respective years. Deferred liabilities decreased in 2005 and 2006 by 21% and
12% and increased 17% in 2007 and decreased 10% in 2008 from respective years.
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5) CURRENT LIABILITIES:
Total current liabilities have also shown an increasing trend. This is also in line with increase
in current assets of the company. Short term financing is taken to meet the working capital
requirements. Company is meeting its obligation on regular basis which is evident from an
increase in the current portion of long term debts under current liabilities head of the
balance sheet.
Trade payables decreased in 2005 by 251% which is at higher side and increased 27%, 7%, and
120% in 2006, 2007 and 2008 where as 10.98% in 2004 which is unfavorable for the company.
Interest and mark up accrued decrease in 2005 by 25% and 44% in 2006 and increase in 2007
and 2008 by 40% and 54% respectively. Sales tax payable increase 340% in 2005 from 2004
which is huge change in 2006 it also increases 62% from 2005 and decrease 100% in 2007.
Finally, size of the company has increased during the last five years. More investment is
made in capital assets. Company is in expansion phase since the base year. Investment in
new expansion project and technology is being made in order to keep pace with changing
business environment.
6.1.2. VERTICAL ANALYSIS:

“An analysis of percentage financial statements where all balance sheet items are divided by
total assets and all income statement items are divided by net sales or revenue”
The expression of individual financial statement item as percentages of total helps the analyst
spot trends with respect to the relative importance of these items over time.
1) INCOME STATEMENT:
Similar method as applied for balance sheet is also applicable to income statement. The various
items of income statement are related as percentage to sales. For example, items like, cost of
17
goods sold. Operating expenses, gross profit, taxation etc. are reduced to percentages by
treating the sales as 100 %. These ratios are also called vertical ratios and mix percentages.
2) BALANCE SHEET:
Vertical analysis is also called common size analysis. The common size balance sheet is also
called 100% balance sheet. The total of assets is the base figures representing 100%. Every item
of the balance sheet is related vertically to reflect the vertical mix against the total. The analysis
represents internal composition of assets and liabilities. The common size balance sheet
analysis reveals the sources of capital and all other sources and the application of sources to
assets of the company.
6.1.2.1 VERTICAL ANALYSIS OF INCOME STATEMENT
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Vertical Analysis of Pioneer Cement Company Limited

2.11.1
Five Year Position Of Income Statement
For the year ended June 30 2008 2007 2006 2005 2004
Sales- Net -2697% -3349% 455% 616% 312%
Cost of goods sold -2412% -3009% 273% 413% 221%
Gross Profit -285% -340% 182% 203% 91%
Administrative And Selling expenses -309% -151% 17% 40% 20%
Operating Operating/Loss 24% -189% 165% 162% 71%

Other operating expenses 83% 8% -9% -16% -5%
Other operating income -17% -13% 11% 8% 19%
Profit/loss from operations 89% -194% 167% 155% 84%
Financial & Other 230% 391% 29% 36% 28%

Voluntary separation scheme charges
Profit/loss before taxation 319% 197% 138% 119% 56%
Taxation 219% 97% 38% 19% -44%
Profit/loss after taxation 100% 100% 100% 100% 100%
As we can see from the vertical income statement the sales revenue increased from 2004 to
2006 by 312%, 6165 and 455% respectively and decreased by 3349% and 2697% in 2007 and
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2008 respectively. Cost of sales also increased in 2004 by 221% in 2005 by 413% and in 2006
by 273% and in next two years it decrease in 2007 by 3009% and in 2008 by 2412%. Gross
profit increase in 2004 by 91% 203% increase in 2005, 182% increase in 2006 and in 2007 and
2008 it decreased 340% and 285% respectively.
Administrative and Selling expense also increase in 2004 to 2006 by 20%, 40% and 17%
respectively and it decreases in 2007 by 151% and in 2008 by 309% from respective years.
Other operating expense decreases from 2004 to 2006 by 5% in 2004, 16% in 2005 and 9% in
2006; it increased in 2007 by 8% from 2006 and increase in 2008 by 83% from 2007. Other
operating income increased from 2004 to 2006 by 19%, 8% and 11% and decreased in 2007 by
13% and 17% in 2008. Financial and other voluntary separation charges showing increasing
trend all five years it increased by 28% in 2004 36% in 2005, 29% in 2006, 391% in 2007 and
230% in 2008 from their respective years. .Profit before taxation has increased by 56% in 2004
119% in 2005, 138% in 2006, 197% in 2007 and 219% in 2008.
Profit after taxation the company recorded loss in 2007 and in 2008 from their respective years.
Finally the company is improving with the passage of time. Although the profits are not
very adequate but the management is very confident that they are working hard and the
company will prosper in coming years as most of the capital work has been completed.
6.6. VERTICAL ANALYSIS OF BALANCE SHEET
VERTICAL ANALYSIS
VERTICAL ANALYSIS FOR PAST FIVE YEARS OF PIONEER CEMENT
FOR LAST FIVE YEARS
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BALANCE SHEET BALANCE SHEET
As at June 30 2008 2007 2006 2005 2004
Issue Subscribed & Paid Up Capital 19% 20% 19% 22% 22%
Reserves 3% 5% 8% 1% -10%
22% 24% 28% 24% 13%
Surplus on Revaluation of fixed assets- 26% 7% 9% 15% 0%
net of tax
Redeemable capital 0% 0% 0% 2% 4%
Long term financing-secured 1% 1% 5% 0% 0%
Long term loans-secured 16% 27% 22% 29% 45%
Long term Musharaka finance 0% 1% 1% 1% 0%
Liabilities against assets subject to 2% 6% 5% 4% 0%
finance lease
Long term deposits 0% 0% 0% 0% 0%
Long term creditor-unsecured 0% 0% 0% 0% 0%
Deferred liabilities 9% 12% 10% 14% 29%

Deferred tax liabilities 0% 0% 5% 3% 0%
28% 46% 49% 53% 78%
CURRENT LIABILITIES
Creditors against expansion project 0% 3% 4% 7% 0%
Trade and other payables 8% 5% 4% 4% 2%

Interest/ Mark up accrued 1% 1% 1% 1% 2%
Short term Murabah-secured 0% 1% 0% 0% 0%
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Short term Musharaka secured 0% 0% 0% 0% 0%

Short term finances 3% 0% 0% 0% 0%
Short term borrowings 0% 0% 0% 0% 0%
Current maturity of redeemable capital 0% 0% 0% 0% 0%
Current maturity of long term loan 0% 0% 0% 1% 4%
Current portion of long term loan 0% 0% 4% 0% 0%
Current portion of liabilities against 15% 13% 2% 0% 0%

assets subject to finance lease
Current portion of deferred liability 0% 0% 2% 0% 0%
Sales tax payable 0% 0% 0% 0% 0%
29% 23% 17% 14% 9%

105% 100% 102% 106% 100%
ASSETS
NON CURRENT ASSETS

Property, plant and equipment 91% 87% 91% 93% 86%
23
Long term loans 0% 0% 0% 0% 0%

Long term deposits 1% 1% 1% 1% 1%
Deferred tax assets 0% 0% 0% 0% 5%

92% 89% 93% 93% 91%
CURRENT ASSETS
Stock in trade 1% 2% 1% 1% 1%
Store, spare and loose tools 4% 5% 4% 4% 6%
Assets held for disposal 0% 0% 0% 0% 0%
Trade Debts 0% 0% 0% 0% 1%
Loan & advances 1% 0% 0% 1% 0%
Deposits & prepayments 0% 0% 0% 0% 0%

Other receivables 0% 0% 0% 0% 0%
Current portion of long term deposits 0% 0% 0% 0% 0%
Sales tax net 0% 0% 0% 0% 0%
Taxation-net 0% 0% 0% 0% 0%
Cash & bank balance 1% 4% 1% 0% 1%
8% 11% 7% 7% 9%
100% 100% 100% 100% 100%
6.6.1. ANALYSIS:
6.6.1.1. NON-CURRENT ASSETS:
As we can see from the vertical balance sheet of the company total fixed assets are constant
in relation to total assets with little variations. The management is more focusing on
24
working capital management than on fixed asset in last two years as shown by the vertical
balance sheet.
Property, plant and equipment have shown an increasing trend it increased in 2004 by 86% in
2005 by 93% in 2006 by 91% 87% in 2007 and 91% in 2008.
6.6.1.2. CURRENT ASSETS:
Total current assets have shown an increasing trend over the last five year period. Stores and
spares decreased in year 2008, 2005 and 2006 by 4% and increased in 2004 by 6% and 2007 by
5%.
Stock in trade has shown an increasing with a same sequence at the rate of 1% all the years
except 2007 which is 2%. Stock in trade is about 1% of the total current assets in 2004, 2005,
2006 and 2008 and it was 2% of total assets in 2007. Stores and spares have the largest portion
than stock of the total current assets.
Trade debts 1% of total assets in 2004 and then no other year has significant effect on total
current Asset affected by trade debts. Cash and bank balance were 1% in 2005, 1% in 2006 and
2008 and 4% in 2007. This trend shows that more funds are tied in receivable, inventories
and in stores & spares.
6.6.1.3. EQUITY AND LIABILITIES:
Issued Subscribed and paid up capital showing mix trend in increase 22% in 2004 and 2005
contribute in total liabilities and then it decrease in 2006 by 19% contribution and in 2007 by
20% and in 2008 19% in total liabilities. Currently company is not paying dividends to
shareholders. Reserves also decreased in 2004 by 10% and no major contribution in total
liabilities in coming years.
6.6.1.4. NON-CURRENT LIABILITIES:
Total long-term liabilities of the company have shown decreasing trend in relation to total
liabilities. It contributes in total liabilities by 78% in 2004, 53% in 2005, 49% in 2006, 46% in
2007 and 28% in 2008.
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6.6.1.5. CURRENT LIABILITIES:
Current liabilities have shown an increasing trend during the last five years from 2004 to 2008
as shown in the vertical balance sheet of the company they contribute in total liabilities by 9%
in 2004, 14% in 2005, 17% in 2006, 23% in 2007 and 29% in 2008 which is maximum and
company got loss in 2007 and 2008. Trade and other payables have shown an increasing trend
with a marginal increase in last five years. Trade and other payables increase in 2008 by 8% and
2007 by 5% than their respective years, in 2006 and 2005 they were 4% and 2%in 2004.
6.1.3. TREND ANALYSIS

Trend Analysis is a comparative analysis of a company's financial ratios over time.
SIGNIFICANCE:
It is an aspect of technical analysis that tries to predict the future movement of a stock based on past data. Trend
analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the
future.
BALANCE SHEET
26
BALANCE SHEET
As at June 30 2008 2007 2006 2005 2004
Issue Subscribed & Paid Up Capital 209% 177.9% 170.3% 162.1% 100%
Reserves -75.8% -97.3% -170.4% -17.9% 100%
422.8% 384.5% 425.9% 297.3% 100%
Surplus on Revaluation of fixed assets-net of 0% 0% 0% 0% 0%

tax
Redeemable capital 0% 0% 0% 92.1% 100%
Long term financing-secured 0% 39.1% 231.6% 0% 0%
Long term loans-secured 89.02% 0% 0% 0% 0%
Long term Musharaka finance 0% 0% 0% 0% 0%
Liabilities against assets subject to finance 2493.6% 5102.5% 165.3% 2880.07% 100%
lease
Long term deposits 79.4% 226.1% 242.5% 286.5% 100%
Long term creditor-unsecured 0% 0% 0% 0% 0%
Deferred liabilities 73.2% 81.7% 69.8% 78.87% 100%
Deferred tax liabilities 0% 0% 0% 0% 0%
87.8% 108.01% 121.9% 109.01% 100%
CURRENT LIABILITIES
Creditors against expansion project 0% 0% 0% 0% 0%
Trade and other payables 1046.2% 476.1% 446.5% 351.04% 100%
Interest/ Mark up accrued 109.7% 71.38% 41.9% 75% 100%
Short term Murabah-secured 0% 0% 0% 0% 0%
Short term Musharaka secured 0% 0% 0% 0% 0%
Short term finances 0% 0% 0% 0% 100%
Short term borrowings 0% 0% 0% 0% 0%
Current maturity of redeemable capital 0% 0% 0% 192.9% 0%
Current maturity of long term loan 0% 0% 0% 35.6% 100
%
Current portion of long term loan 0% 0% 0% 0% 0%
Current portion of liabilities against assets 0% 0% 2158.4% 211.9% 100
subject to finance lease %
Current portion of deferred liability 0% 0% 0% 0% 0%
Sales tax payable 0% 0% 710.9% 440.2% 0%
779.8% 521.9% 287.1% 130.7% 100%
- - 364.9% 258.3% 100%
ASSETS
27
NON CURRENT ASSETS

Property, plant and equipment 261.6% 205.3% 210.1% 174.5% 100%
Long term loans 107.7% 121.7% 75.37% 112.8% 100%
Long term deposits 456.5% 343.4% 268.6% 155.4% 100%
Deferred tax assets - - - - -
249.6% 197.03% 121.2% 165.6% 100%
CURRENT ASSETS
Stock in trade 135.2% 295.8% 170.3% 111.8% 100%
Store, spare and loose tools 167.6% 163.4% 130.9% 112.6% 100%
Assets held for disposal - - - - -
Trade Debts 162.3% 120% 50.5% 76.7% 100%
Loan & advances 1062.1% 414.9% 230.3% 1038.6% 100%
Deposits & prepayments 15.9% 38.8% 57.8% 68.4% 100%
Other receivables 366.1% 4.27% 65.5% 121.8% 100
%
Current portion of long term deposits - - - - -
Sales tax net - - - - -
Taxation-net 80.8% 0% 82.16% 92.3% 100%
Cash & bank balance 372.4% 817.4% 192.4% 46.9% 100%
199.3% 244.6% 156.4% 117.1% 100%
244.9% 201.4% 196.6% 161.1% 100%
6.1.3.1. ANALYSIS:
6.1.3.1.1. NON-CURRENT ASSETS:
As we can see from the balance sheet of the company total fixed assets are constant in relation
to total assets with little deviations. The management is more focusing on fixed asset in past
years. As property, plant and equipment have shown an increasing trend.
6.1.3.1.2. CURRENT ASSETS:

Total current assets have shown an increasing trend over the last five year period. Stores and
spares increased consistently over the years. Stock in trade has shown an increasing with a same
28
sequence. Loans and advances have the largest portion than stock of the total current assets.
This trend shows that more funds are needed.
6.1.3.1.2. EQUITY AND LIABILITIES:
Issued Subscribed and paid up capital showing mix trend in increase that there is increase in
2005 andin2006 where as there is a decrease in 2007 and in increase in 2008 in total liabilities
as currently company is not paying dividends to shareholders
6.1.3.1.3. NON-CURRENT LIABILITIES:
Total long-term liabilities of the company have shown decreasing trend in relation to total
liabilities.
6.1.3.1.4. CURRENT LIABILITIES:

Current liabilities have shown an substantially mix trend during the last five years from 2004 to
2008 as shown in the balance sheet of the company they contribute in total liabilities.
6.1.3.2. INCOME STATEMENT
FIVE YEAR POSITION OF INCOME STATEMENT
For the year ended June 2008 2007 2006 2005 2004
30
Gross Turnover 337.4% 237.3% 212.0% 142.9% 100%
Excise Duty 288.8% 238.6% 210.9% 115.6% 100%
Sales Tax 261.8% 218.9% 192.2% 125.03% 100%
29
Commission 226.2% 227.1% 104.8% 98.18% 100%

275.9% 23.78% 169.5% 118.78% 100%
Net turnover 367% 236.7% 232.5% 154.6% 100%
Cost of sales 463.6% 300.5% 197.1% 146.57% 100%
Gross Profit 132.8% 82.3% 318.2% 174.08% 100%
Distribution Cost 1649.1% 192.7% 138.8% 241.90% 100%
Administrative And Selling 155.2% 149.8% 127.6% 112.69% 100%
expenses
- - 131.2% 155.03% 100%
Other operating income-net 39% 14.8% 90.63% 34.63% 100%
- - 313.65% 149.5% 100%
Finance Cost 351.8% 311.5% 167.7% 102.8% 100%
Other Charges 639.3% 30.49% 25.12% 222.8% 100%
- - 181.55% 122.7% 100%
Profit before taxation -240.9% -77.4% 391.6% 165.3% 100%
Taxation -211.7% -48.8% -138.18% -33.23% 100%
Profit after taxation -42.41% 22.03% 159.3% 78.27% 100%
As we can see from the income statement the gross turnover has increased from 2004 to 2008 as excise duty and
sales tax has increased in these years where as there is a 1%decrease in commission in 2008.There is a
substantial increase in net turnover as trend of cost of sales has increased. There was a increase in 2005 and
2006 in gross profit then company start facing losses in 2007 and 2008 because there distribution cost and
administrative expenses increases which was due to the flaw in the management of the company. The finance
cost and other charges have also increased which assist the losses of the company. Finally the company is
improving with the passage of time. Although the profits are not very adequate but the management is very
confident that they are working hard and the company will prosper in coming years as most of the capital work
has been completed.
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31
7. RATIO ANALYSIS
7.1. LIQUIDITY RATIOS
Liquidity ratios are the ratios for testing short term solvency or financial position of a business. These are
designed to test the ability of the business to meet its short term obligation promptly, a class of financial metrics
that IS used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher
the value of the ratio, the larger the margin of safety that the company possesses to cover its short-term debts
7.1.1. CURRENT RATIO:
Current ratio may be defined as the relationship between current assets and current liabilities. This ratio is also
known as "working capital ratio". It is a measure of general liquidity and is most widely used to make the
analysis for short term financial position or liquidity of a firm. It is calculated by dividing the total of the current
assets by total of the current liabilities.
7.1.1.1. COMPONENTS:
The two basic components of this ratio are current assets and current liabilities. Current assets include cash and
those assets which can be easily converted into cash within a short period of time, generally, one year, such as
marketable securities or readily realizable investments, bills receivables, sundry debtors, (excluding bad debts
or provisions), inventories, work in progress, etc. Prepaid paid expenses should also be included in current
assets because they represent payments made in advance which will not have to be paid in near future. Current
liabilities are those obligations which are payable within a short period of tie generally one year and include
outstanding expenses, bills payable, sundry creditors, bank overdraft, accrued expenses, short term advances,
income tax payable, dividend payable, etc. However, sometimes a controversy arises that whether overdraft
should be regarded as current liability or not. Often an arrangement with a bank may be regarded as permanent
and therefore, it may be treated as long term liability. At the same time the fact remains that the overdraft
facility may be cancelled at any time. Accordingly, because of this reason and the need for conversion in
interpreting a situation, it seems advisable to include overdrafts in current liabilities.
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7.1.1.2. LIMITATIONS OF CURRENT RATIO:
This ratio is measure of liquidity and should be used very carefully because it suffers from many limitations. It
is, therefore, suggested that it should not be used as the sole index of short term solvency
1. It is crude ratio because it measures only the quantity and not the quality of the current assets.
2. Even if the ratio is favorable, the firm may be in financial trouble, because of more stock and work
in process which is not easily convertible into cash, and, therefore firm may have less cash to pay off
current liabilities.
3. Valuation of current assets and window dressing is another problem. This ratio can be very easily
manipulated by overvaluing the current assets. An equal increase in both current assets and current
liabilities would decrease the ratio and similarly equal decrease in current assets and current
liabilities would increase current ratio.
7.1.1.3. SIGNIFICANCE:
This ratio is a general and quick measure of liquidity of a firm. It represents the margin of safety or cushion
available to the creditors. It is an index of the firm’s financial stability. It is also an index of technical solvency
and an index of the strength of working capital.
A relatively high current ratio is an indication that the firm is liquid and has the ability to pay its current
obligations in time and when they become due. On the other hand, a relatively low current ratio represents that
the liquidity position of the firm is not good and the firm shall not be able to pay its current liabilities in time
without facing difficulties. An increase in the current ratio represents improvement in the liquidity position of
the firm while a decrease in the current ratio represents that there has been deterioration in the liquidity position
of the firm. A ratio equal to or near 2: 1 is considered as a standard or normal or satisfactory. The idea of having
double current assets as compared to current liabilities is to provide for the delays and losses in the realization
of current assets. However, the rule of 2:1 should not be blindly used while making interpretation of the ratio.
Firms having less than 2 : 1 ratio may be having a better liquidity than even firms having more than 2 : 1 ratio.
This is because of the reason that current ratio measures the quantity of the current assets and not the quality of
the current assets. If a firm's current assets include debtors which are not recoverable or stocks which are slow-
moving or obsolete, the current ratio may be high but it does not represent a good liquidity position.
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Current Ratio.
CURRENT RATIO
Formula Current Assets/Current Liabilities
Years 2008 2007 2006 2005 2004
Pioneer Cement 0.26 0.48 0.56 0.92 1.03
Cherat Cement 1.07 2.28 2.45 3.07 2.47
Kohat Cement 0.66 1.00 2.56 1.47 1.24
7.1.1.4. ANALYSIS:
Current Ratio clears the extent to which the claim of short term creditors can be met by assets that are to
become cash within a year. The best standard ratio is 2:1 so, the Pioneer Cement has current ratio below
standard. There is a decrease in 2004 to 2008. Current Ratio of Kohat Cement is more than Pioneer and Cherat
cement.
Current ratio shows that how many times current assets are available to meet its current liabilities. Pioneer
cement current ratio shows decreasing trend and it has less than 1:1 but only in 2004 it is more than 1:1. Cherat
cement also shows decreasing trend in current ratio. Kohat cement current ratio shows increasing trend in 2004,
2005 and in 2006 but decreases in 2007 and 2008 which shows that it has less current assets or current liabilities
increases.
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7.1.2. QUICK RATIO:

Liquid ratio is also termed as "Liquidity Ratio”,” Acid Test Ratio" or "Quick Ratio". It is the ratio of liquid
assets to current liabilities. The true liquidity refers to the ability of a firm to pay its short term obligations as
and when they become due
The two components of liquid ratio (acid test ratio or quick ratio) are liquid assets and liquid liabilities. Liquid
assets normally include cash, bank, sundry debtors, bills receivable and marketable securities or temporary
investments. In other words they are current assets minus inventories (stock) and prepaid expenses. Inventories
cannot be termed as liquid assets because it cannot be converted into cash immediately without a loss of value.
In the same manner, prepaid expenses are also excluded from the list of liquid assets because they are not
expected to be converted into cash. Similarly, Liquid liabilities means current liabilities i.e., sundry creditors,
bills payable, outstanding expenses, short term advances, income tax payable, dividends payable, and bank
overdraft (only if payable on demand). Some time bank overdraft is not included in current liabilities, on the
argument that bank overdraft is generally permanent way of financing and is not subject to be called on
demand. In such cases overdraft will be excluded from current liabilities
The quick ratio/acid test ratio is very useful in measuring the liquidity position of a firm. It measures the firm's
capacity to pay off current obligations immediately and is more rigorous test of liquidity than the current ratio.
It is used as a complementary ratio to the current ratio. Liquid ratio is more rigorous test of liquidity than the
current ratio because it eliminates inventories and prepaid expenses as a part of current assets. Usually a high
liquid ratio an indication that the firm is liquid and has the ability to meet its current or liquid liabilities in time
and on the other hand a low liquidity ratio represents that the firm's liquidity position is not good. As a
convention, generally, a quick ratio of "one to one" (1:1) is considered to be satisfactory.
Although liquidity ratio is more rigorous test of liquidity than the current ratio, yet it should be used cautiously
and 1:1 standard should not be used blindly. A liquid ratio of 1:1 does not necessarily mean satisfactory
liquidity position of the firm if all the debtors cannot be realized and cash is needed immediately to meet the
current obligations. In the same manner, a low liquid ratio does not necessarily mean a bad liquidity position as
inventories are not absolutely non-liquid. Hence, a firm having a high liquidity ratio may not have a satisfactory
liquidity position if it has slow-paying debtors. On the other hand, a firm having a low liquid ratio may have a
good liquidity position if it has a fast moving inventory. Though this ratio is definitely an improvement over
current ratio, the interpretation of this ratio also suffers from the same limitations as of current ratio
35
QUICK RATIO
Formula Current Asset-stock/current liabilities
Years 2008 2007 2006 2005 2004
Pioneer Cement 0.24 0.41 0.47 0.81 0.9
Cherat cement 0.94 2.07 2.17 2.88 2.25
Kohat Cement 0.57 0.78 2.34 1.41 1.18
7.1.2.3. ANALYSIS:
The acid test ratio is also below standard due to heavy short term borrowings. Pioneer acid test ratio decreased
in year 2005, 2006, 2007 and in 2008. The quick ratio of Kohat cement shows that sufficient liquid asset is
available to discharge and settle its current obligation. The rise in current liabilities is due to the expansion of
project and short and long term financing. Pioneer Cement liquidity is less than standard. Kohat and Cherat
cement liquidity is on considerable point. Kohat cement liquid ratio is more than pioneer and Cherat which
shows that it has more liquidity. Cherat liquidity position is considerable because it is near to 1 which shows
that it has liquid assets to meet its current liabilities. Pioneer position is not at considerable point. It shows
decreasing trend and less than 1:1.
36
7.1.3. TURNOVER/ACTIVITY RATIOS:

Activity ratios are measures of how well assets are used. Activity ratios -- which are, for the most part, turnover
ratios can be used to evaluate the benefits produced by specific assets, such as inventory or accounts receivable.
Or they can be use to evaluate the benefits produced by all a company's assets collectively.
These measures help us gauge how effectively the company is at putting its investment to work. A company
will invest in assets – e.g., inventory or plant and equipment – and then use these assets to generate revenues.
The greater the turnover, the more effectively the company is at producing a benefit from its investment in
assets
7.1.3.1. INVENTORY DAYS:
The number of day’s inventory is also known as average inventory period and inventory holding period. A high
number of days inventory indicates that there is a lack of demand for the product being sold. A low days
inventory ratio (inventory holding period) may indicate that the company is not keeping enough stock on hand
to meet demands.
The number of day’s inventory and inventory turnover ratios are included in the financial statement ratio
analysis spreadsheets highlighted in the left column, which provide formulas, definitions, calculation, charts and
explanations of each ratio.
Inventory Days INVENTORY DAYS
Formula Inventory Days = Inventory / Cost of Sales*365
Years 2008 2007 2006 2005 2004
Pioneer Cement 6 20 19 15 20
Cherat Cement 24 40 21 23 6.67
Kohat Cement 49 38 28 8 6
37
7.1.3.2. ANALYSIS:
Pioneer inventory days decreased in 2005 as compare to 2004 and increased in 2006 and in 2007 and show
decreasing in 2008 which shows that management is efficient for managing inventory period.
The above diagram shows that in 2004 and 2005 Kohat cement has less inventory days required to convert stock
in sale which shows that Kohat management is efficient but it decreases with the passage of times and Pioneer
trend is opposite to Kohat. It was low in beginning and it increases in 2008, but Cherat Cement shows mixed
trend.
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7.1.4. DEBTORS TURNOVER RATIO OR RECEIVABLES TURNOVER

RATIO:
Debtor’s turnover ratio indicates the velocity of debt collection of a firm. In simple words it indicates the
number of times average debtors (receivable) are turned over during a year.
7.1.4.1. SIGNIFICANCE OF THE RATIO:
This ratio indicates the number of times the debtors are turned over a year. The higher the value of debtors,
turnover the more efficient is the management of debtors or more liquid the debtors are. Similarly, low debtors
turnover ratio implies inefficient management of debtors or less liquid debtors. It is the reliable measure of the
time of cash flow from credit sales. There is no rule of thumb which may be used as a norm to interpret the ratio
as it may be different from firm to firm.
Debtor days. DEBTOR DAYS
Formula Trade debtors/Credit sales*365
Years 2008 2007 2006 2005 2004
Pioneer Cement 3 3 1 3 7
Cherat Cement 35 19 10 8 9
Kohat Cement 4 5 3 5 7
39
7.1.4.2. ANALYSIS:
Graph shows that Pioneer cement has good debtor management to receive the debt or collect the receivables and
shows positive trend and debtor’s collection period is less than creditor’s period. Kohat position is also
considerable but Cherat management has more time to collect their receivables whish shows inefficient debtor
management and in 2008 it is at highest point which indicates unfavorable situation regarding to debtor
collection period.
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7.1.5. TOTAL ASSETS TURNOVER RATIO:

The total assets turnover ratio measures the use of all assets in terms of sales, by comparing sales with net total
assets. This interactive tutorial walks you through the calculations as well as where on the financial statements
to find the numbers.
Total Asset Turnover

TOTAL ASSET TURNOVER
Formula Sales/ Total Assets
Years 2008 2007 2006 2005 2004
Pioneer Cement 0.46 0.36 0.37 0.30 0.31
Cherat Cement 0.68 0.74 0.67 0.74 0.95
Kohat Cement 0.18 0.26 0.76 1.04 1.10
41
7.1.5.1. ANALYSIS:
In the above graph we can see that total asset turnover ratio of Pioneer cement company showing mix trend in
the year 2008 total asset total asset turnover ratio is at highest level and as it compare it with Cherat and Kohat
cement it is better in the last two year 2007,2008 so we can say it is using its assets for generating the revenue in
a better way than Kohat and Cherat cement in 2004,2005 and 2006 Kohat cement total asset turnover ratio at
top so they use much of it for generating revenue.
But pioneer overall situation regarding to total asset turnover ratio is better than other two competitors.
42
7.1.6. FIXED ASSETS TURNOVER RATIO:

Fixed assets turnover ratio is also known as sales to fixed assets ratio. This ratio measures the efficiency and
profit earning capacity of the concern. Higher the ratio, greater is the intensive utilization of fixed assets. Lower
ratio means under-utilization of fixed assets
Fixed Asset Turnover Ratio

FIXED ASSETS TURNOVER RATIO
Formula Cost of sales / Fixed Assets
Years 2008 2007 2006 2005 2004
Pioneer Cement 0.51 0.42 0.41 0.32 0.36
Cherat Cement 0.39 0.2 0.35 0.51 0.61
Kohat Cement 1.46 1.52 2.12 2.95 2.32
43
7.1.6.1. ANALYSIS:
It shows the utilization of fixed assets, Pioneer increasing the utilization of its fixed assets but it has lower times
than Kohat cement which has more utilization of fixed assets and at highest level in 2005. Cherat Cement shows
the mixed trend and has less utilization than Kohat and Pioneer cement.
44
7.2. PROFITABLITY RATIOS:

Profitability ratios (also referred to as profit margin ratios) compare components of income with sales. They
give us an idea of what makes up a company's income and are usually expressed as a portion of each dollar of
sales. The profit margin ratios we discuss here differ only by the numerator. It's in the numerator that we reflect
and thus evaluate performance for different aspects of the business: The gross profit margin is the ratio of gross
income or profit to sales. This ratio indicates how much of every dollar of sales is left after costs of goods sold.
7.2.1. GROSS PROFIT (GP) RATIO:

Gross profit ratio (GP ratio) is the ratio of gross profit to net sales expressed as a percentage. It expresses the
relationship between gross profit and sales.
The basic components of the calculation of gross profit ratio are gross profit and net sales. Net sales means sales
minus sales returns. Gross profit would be the difference between net sales and cost of goods sold. Cost of
goods sold in the case of a trading concern would be equal to opening stock plus purchases, minus closing stock
plus all direct expenses relating to purchases. In the case of manufacturing concern, it would be equal to the
sum of the cost of raw materials, wages, direct expenses and all manufacturing expenses. In other words,
generally the expenses charged to profit and loss account or operating expenses are excluded from the
calculation of cost of goods sold.
Gross profit ratio may be indicated to what extent the selling prices of goods per unit may be reduced without
incurring losses on operations. It reflects efficiency with which a firm produces its products. As the gross profit
is found by deducting cost of goods sold from net sales, higher the gross profit better it is. There is no standard
GP ratio for evaluation. It may vary from business to business. However, the gross profit earned should be
sufficient to recover all operating expenses and to build up reserves after paying all fixed interest charges and
dividends.
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GROSS PROFIT TO SALES

Gross profit to Sales:
Formula Gross profit/Sales*100
Years 2008 2007 2006 2005 2004
Pioneer Cement 10.58% 10.16% 40.00% 32.91% 29.23%
Cherat Cement 5.95% 14.41% 40.68% 35.67% 34.33%
Kohat Cement 6.35% 22.09% 51.55% 38.72% 35.45%
7.2.1.3Analysis:
Gross profit of Pioneer cement company increasing in 2004 to 2006 but decrease in 2007 to 2008. Due to
inflation and economic instability in Pakistan and irregular power supply of WAPDA in 2007 and 2008. Gross
Profit ratio of three competitors show increasing trend in 2004 to 2006 due to good economic and financial
situation of world and good market situation in Pakistan. Kohat position is more considerable up to 2006 but
shows decreasing trend in 2007 and 2008, and Cherat Cement also has same situation.
46
7.2.2. OPERATING PROFIT RATIO:

Operating ratio is the ratio of cost of goods sold plus operating expenses to net sales. It is generally expressed in
percentage. It measures the cost of operations per dollar of sales. This is closely related to the ratio of operating
profit to net sales.
The two basic components for the calculation of operating ratio are operating cost (cost of goods sold plus
operating expenses) and net sales. Operating expenses normally include (a) administrative and office expenses
and (b) selling and distribution expenses. Financial charges such as interest, provision for taxation etc. are
generally excluded from operating expenses.
Operating ratio shows the operational efficiency of the business. Lower operating ratio shows higher operating
profit and vice versa. An operating ratio ranging between 75% and 80% is generally considered as standard for
manufacturing concerns. This ratio is considered to be a yardstick of operating efficiency but it should be used
cautiously because it may be affected by a number of uncontrollable factors beyond the control of the firm.
Moreover, in some firms, non-operating expenses from a substantial part of the total expenses and in such cases
operating ratio may give misleading results
47
OPERATING PROFIT RATIO
Formula Operating Profit Margin = Operating profit /Sale*100
Years 2008 2007 2006 2005 2004
Pioneer Cement -3.13% 5.79% 36.74% 25.16% 26.89%
Cherat Cement 4.38% 4.18% 34.14% 29.57% 32.31%
Kohat Cement 1.57% 17.91% 49.24% 35.86% 32.25%
48
7.2.2.3. ANALYSIS:
Pioneer cement company operating profit increasing in 2004 to 2006 and decreasing in 2007 and 2008 and in
2008 they suffer loss by 3.13% due to increase in prices of coal, diesel and empty bag in 2007-2008 Operating
profit of all three organization show increasing trend in 2004, 2005, and 2006 but decreases in 2007 and
2008due to increase in operating expenses.
49
7.2.3. RETURN ON ASSETS:

Where asset turnover tells an investor the total sales for each $1 of assets, return on assets tells an investor how
much profit a company generated for each $1 in assets. The return on assets figure is also a sure-fire way to
gauge the asset intensity of a business. Companies such as telecommunication providers, car manufacturers, and
railroads are very asset-intensive, meaning they require big, expensive machinery or equipment to generate a
profit. Advertising agencies and software companies, on the other hand, are generally very asset-light.
RETURN ON ASSETS
Return on Assets:
Formula Net Income / Total Assets*100
Years 2008 2007 2006 2005 2004
Pioneer Cement -1.72% -1.10% 8.00% 4.80% 9.90%
Cherat Cement 0.23% 5.21% 14.88% 15.99% 19.50%
Kohat Cement -2.92% 0.83% 25.68% 23.40% 22.97%
7.2.3.1. ANALYSIS:
This ratio measures the return of total investment of the business. Pioneer cement company show mix trend in
2004 it is at maximum point than decrease in 2005 and again increase in 2006 and then become negative in
2007 and 2008. Kohat cement company return on asset is much better than Cherat and pioneer it decreases in
2004 to 2006 and then decrease in 2007 and becomes negative in 2008, it is at highest point in 2006, Cherat also
increase in 2004 to 2005 and then it little decrease in 2006 and at goes down in 2007 and becomes negative in
2008.
50
7.2.4. RETURN ON EQUITY (ROE) RATIO:

In real sense, ordinarily shareholders are the real owners of the company. They assume the highest risk in the
company. (Preference share holders have a preference over ordinary shareholders in the payment of dividend as
well as capital. Preference share holders get a fixed rate of dividend irrespective of the quantum of profits of the
company). The rate of dividends varies with the availability of profits in case of ordinary shares only. Thus
ordinary shareholders are more interested in the profitability of a company and the performance of a company
should be judged on the basis of return on equity capital of the company. Return on equity capital which is the
relationship between profits of a company and its equity, can be calculated as follows.
Equity share capital should be the total called-up value of equity shares. As the profit used for the calculations
are the final profits available to equity shareholders as dividend, therefore the preference dividend and taxes are
deducted in order to arrive at such profits.
This ratio is more meaningful to the equity shareholders who are interested to know profits earned by the
company and those profits which can be made available to pay dividends to them. Interpretation of the ratio is
similar to the interpretation of return on shareholder's investments and higher the ratio better is.
RETURN ON EQUITY RATIO (ROE)
Formula [(Net profit after tax − Preference dividend) / Equity share capital] × 100
Years 2008 2007 2006 2005 2004
Pioneer Cement -7.80% -4.46% 29.11% 20.48% 77.81%
Cherat Cement 1.08% 29.77% 54.70% 77.04% 80.08%
Kohat Cement -9.55% 2.09% 34.58% 35.73% 42.09%
51
7.2.4.3. ANALYSIS:
In 2004 Pioneer cement company return on equity ratio is at highest point and better, in 2005 it decreases and in
2006 it is better than 2005 but in 2007 and 2008 it goes down and become negative. Kohat Cement Company
also shows decreasing trend it is highest point in 2004 and then decrease in 2005 to 2007 and it becomes
negative in 2008. Cherat cement company return on equity ratio has mix trend in 2004 it is at lower side and
then it increase in 2005 and it decrease in 2006 and it goes down and become negative in 2007 and 2008.
52
7.2.5. DEBT RATIOS:
A company can finance its assets either with equity or debt. Financing through debt involves risk because debt
legally obligates the company to pay interest and to repay the principal as promised. Equity financing does not
obligate the company to pay anything -- dividends are paid at the discretion of the board of directors. There is
always some risk, which we refer to as business risk, inherent in any operating segment of a business. Financial
leverage ratios are used to assess how much financial risk the company has taken on. There are two types of
financial leverage ratios: component percentages and coverage ratios. Component percentages compare a
company's debt with either its total capital (debt plus equity) or its equity capital. Coverage ratios reflect a
company's ability to satisfy fixed obligations, such as interest, principal repayment, or lease payments.
7.2.5.1. Debt to Equity Ratio:
Debt-to-Equity ratio indicates the relationship between the external equities or outsiders funds and the internal
equities or shareholders funds. It is also known as external internal equity ratio. It is determined to ascertain
soundness of the long term financial policies of the company.
DEBT TO EQUITY RATIO:
Total Long Term Debts / Shareholders Funds

Formula
Years 2008 2007 2006 2005 2004
Pioneer Cement 31:69 52:48 48:52 52:48 86:14
Cherat Cement 13:20 39:50 1:9:50 1:51:100 37:50
Kohat Cement 67:33 55:45 10:90 10:90 22:78
53
7.2.5.2. ANALYSIS:
Pioneer cement debt to equity ratio is higher point in 2004 and after that it has improved its situation in next
coming years and decreases, but Kohat shows increasing trend from 2004 to 2008 which shows that they
increasing their debts for expansion of project and their short and long term debts increased. Cherat
computation of the ratio brings to life the fact that Cherat cement has not been able to feed its financing through
equity as its ratios are considerable higher than the favorable“ 1 or less”. The initial year shows that there was
less dependency of debt but there has been a visible increase in the ratio ever since, the last year shows a
phenomenal increase and highly unfavorable. The firm must by all means try and reduce its portions as the
dependency on debt causes the firm to lose its control and will over the organization as it is then driven to feed
the debt.
7.2.6. DEBT SERVICE RATIO OR INTEREST COVERAGE RATIO:
54
Interest coverage ratio is also known as debt service ratio or debt service coverage ratio. This ratio relates the
fixed interest charges to the income earned by the business. It indicates whether the business has earned
sufficient profits to pay periodically the interest charges.
7.2.6.1. SIGNIFICANCE OF DEBT SERVICE RATIO:
The interest coverage ratio is very important from the lender's point of view. It indicates the number of times
interest is covered by the profits available to pay interest charges.
INTEREST COVERAGE RATIO
Formula Net Profit Before Interest and Tax / Fixed Interest Charges]
Years 2008 2007 2006 2005 2004
Pioneer cement 0.39 0.31 5.73 4.26 3.03
Cherat 0.30 4.27 9.94 21.10 30.96
Kohat Cement -4.71 1.23 20.21 25.17 17.22
55
7.2.6.2. ANALYSIS:
Interest Cover Ratio shows that how many times interest is earned by the company. Pioneer cement company
shows increasing trend from 2004 to 2006 which indicates positive sign and beneficial for the company and it
has availability of the funds to pay interest expense. In 2007 and 2008 it goes down which means it is not good
sign for the company to pay the interest expense. Kohat Cement Company and Cherat Cement is in better
position to Cherat and pioneer cement, In year 2005 Kohat Cement earned 17.22 times interest which is higher
among all year and easy to pay the interest expense. In 2007 and 2008 Interest cover ration of all the company is
not very healthy and it shows that the financial costs are very high and earnings are very low. Management must
look into the matter and should improve this ratio. Cherat cement was able to very comfortably cover this cost
in the early years but by its growth the inabilities started to show although revenues are rising but the interest
charges to be paid by the enterprise are also rising as the revenues are only resulting due to the rising financing
through debt. The debt, especially the short term financing, needs to be curtailed as they will not result in Cherat
Cement’s well being.
56
8. GENERAL RATIO ANALYSIS

8.1. PROFITABILITY ANALYSIS:
According to the scenario, the cement sector is experiencing strong growth in cement dispatches, but at the
same time, is facing decline in profitability during 2008. Although the sales volume in the sector increased, the
net sales revenue did not increase as much due to decrease in net retention. Over the years all cement
manufacturers undertook huge capacity expansion plans which have now created a situation of excess supply in
the local market. Companies resorted to price wars and this led to a fall in prices. As per the industry trend of
declining profitability, Pioneer Cement also posted an overall loss of 179 million in 2008. The Profitability
ratios of Pioneer Cement indicate that Pioneer, like many other companies in the cement sector, has been
plagued by lower earnings. The gross profit margin fell drastically in 2007 and fell slightly in 2008 as well.
Pioneer's rising operating expenses and finance costs have led negative net profit margin. Similarly return on
assets and return on equity have also fallen. The prices of imported coal had shot up during the last fiscal year
and caused a major rise in the cost of production. Crude oil prices had also seen an extraordinary rise last fiscal
year. As fuel costs are the largest portion of production costs of the Pioneer Cement, the price increase had
deeply hit the profitability of the company in 2008. For Pioneer Cement, the prices of packaging material went
up and formed 14% to total production costs. Fuel and electricity costs form 60% of the cost of sales and higher
electricity tariffs and fuel costs affected the earnings of the company in 2008.The cost of production went up
due to rise in the prices of imported coal. Company had an impact of Rs 149 million on earnings due to
devaluation of rupee against the US dollar and Japanese yen in the form of exchange losses. Financial cost also
increased due to higher interest rates in the economy. The profitability ratios indicate that Pioneer Cement, like
many other companies in the cement sector, has been weighed down by lower earnings. Pioneer's rising
operating expenses and financial costs have led to negative impact on the net profit margins. Similarly, return
on assets and return on equity have also fallen.
8.2. LIQUIDITY ANALYSIS:

The liquidity position of the company has been weakening over the years, due to substantial rise in the current
liabilities. Pioneer felt a liquidity crunch, like many other companies in the cement sector due to the price war
and losses caused by that in 2008. The current liabilities of Pioneer have also increased to Rs 2.987 billion
during 2008, backed mainly by increased short-term borrowings by the company. To solve the liquidity
problem, Pioneer has initiated a process of restructuring its debt by issuing Sukuk of Rs 2.5 billion in 2008.
This will help the company to liquidate its excessive current liabilities. It will also help to control company's
finance costs. Also, Pioneer will issue shares to the National Bank of Pakistan due to its inability to pay its
loans. This restructuring would give a breather to the company whose current ratio was steadily moving
downhill.
During 2008, the composition of current assets changed such that the most liquid assets: cash and bank balances
constituted 18%, trade debts 5% and inventory 9% of total current assets. Stores, spares and tools are highly
illiquid assets and they form a major portion of the company's current assets. Industry’s position, though not
ideal, is at least much better than the Pioneer Cement. In fact, it is the only company in the cement sector, which
has the liquidity ratio of below 0.5.
57
8.3. DEBT ANALYSIS:

The debt to assets ratio depicts how Pioneer Cement financed. Each year, the company is being increasingly
financed by equity rather than debt. In 2004, debt financed 87% of assets while in 2008 debt only contributed to
56% of the total assets. The company's debt to asset ratio has not fluctuated much because over the years
because assets and liabilities have grown more or less in the same proportions.
The debt to equity ratio fell during 2005 and 2006 indicating that the company was financing its growth by
equity. In 2005, the equity of the company rose by 197% while liabilities increased only by 11%. In 2007 the
equity fell as the reserves fell owing to the loss made during that fiscal year. This caused a slight increase in
Debt to Equity ratio in 2007. In 2008 the debt to equity ratio has declined owing largely to a fall in the debt. The
company is trying to restructure its financing composition in favor of equity by issuing Sukuk financing and
convertible loan into equity. This will reduce the current liabilities in the future. In the wake of rising interest
rates in the economy, this strategy will prove to be beneficial for Pioneer in the future. The average price/share
fell during 2007 to Rs 31.78 and in 2008, it remained around Rs 31.84. The share prices declined due to the
losses incurred during both the fiscal years.
8.4. ASSETS:
The asset management of the company seems to be quite effective during 2008 as the operating cycle of Pioneer
decreased to 9 days from 23 days in 2007. The operating cycle, however, has reduced due to faster sales
turnover while days to collect trade debt remained the same in 2008. The days to sell the average inventory
were 19 days in 2007 whereas in 2008 it took the company only 6 days to sell its inventory.
58
9. COMPANY ANALYSIS
Pioneer cement limited fulfills all its targets of supplies in the market and also expands its production with the
needs of market. In these days company is in its growth stage. Now the company has three production lines
including one line for white cement produce and also for grey cement. The growth in demand of cement in
Asia, India and Middle East, particularly supply deficit in India and China has geared up export opportunities
for Cement Industry of Pakistan. Supply deficit in India has resulted in significant demand for Pakistani Cement
due to India's geographic proximity with Pakistan. Bureau of Indian standards have approved Pioneer Cement
for import to India. This demand will also be supported by closing down of some cement units in Europe due to
their strict laws governing pollution control and other environment hazards. Being one of the big cement units
of Pakistan and due to its high quality Pioneer Cement is the prime of choice of the International buyers all over
the world. Pioneer Cement is committed to provide high quality cement to its international customers and is
being exported to Afghanistan, India, Middle East, Europe and Africa. Pioneer Cement conveniently meets all
the International standards including American, British, and Indian and European standards. Pioneer cement is
an ISO 9001-2000 and ISO 14001-2004 certified company and follows all rules and regulations of the
government. Company’s social performance is also good. It has good cooperation with community and the
environment. Company has a good relation with their workers and also trying for their welfare.
59
10. CONCLUSION
The company underwent many expansion plans due to which its capacity was increased to 2350 tons per day in
2005 and in 2006 a new production line of 4300 tons per day clinker capacity started production. Its shares are
quoted on all the three stock exchanges of the country. It is a part of the Noon group, which holds the majority
stake of 60% in the company, followed by a leading brokerage house, First National Equity Limited (FNE) 9%
shareholding. Financial institutions, insurance companies and the general public, hold the rest of the
shareholding. Pioneer is involved in the manufacturing and marketing of cement. Its products include ordinary
Portland cement, suitable for concrete construction and sulphate resistant cement, ideal for construction in or
near sea. Thus, the company's sulphate resistant cement is highly preferred in important projects such as the
Thai Greater Canal project. PIOC's products are sold under the brand name of 'Pioneer Cement' and it was the
winner of "Brand of the Year Awards 2006" in cement sector in the national category.
Pioneer Cement is ISO 9001:2000 QMS and ISO: 14001:2004 certified. It meets local as well as international
quality standards. Pioneer Cement produces and sells used coal and cement domestically and internationally.
The cement sector had shown an impressive growth of 24.3% in the cement dispatches during 2008, owing to a
strong demand in the local market and supply deficits in the regional markets. The major boost had come from
the export sales (a growth of 142%) while local cement dispatches grew nominally by 6.5%.exports showed a
growth of 59.5% and export market share rose from 21.5% in 2008 to 34.1% .
However, there is no reflective true performance of Cherat against its competitors; EPS remained above the
industry average. Lower value of outstanding number of shares rather than a high net income is mainly
responsible for the mentioned trend. The same argument holds true for the higher than average book value per
share as well. It has a declining trend. This again can be attributed to shareholder pattern of the company. The
outlook for local demand growth for Cherat remains positive as a number of mega housing projects are in their
initial stages whereas the government has also started a lot of infrastructure developments projects and might
even go for mega water reservoir projects in the future. This would keep the demand upbeat. Earthquake
reconstruction in the Northern Areas further strengthens the demand growth.
Whereas for the Kohat Cement Company, by going forward, with additional capacities coming on line, the
gross margins are likely to decline. However, they are expected to sustain at a reasonable level, allowing a
comfortable profitability and cash flow levels for the industry, even at low capacity utilization levels. As Kohat
Cement Company is going under sustainable capacity expansion, relative to its existing size, its market share in
the production sharing arrangement is expected to increase, signifying ability to achieve higher sales volumes
even at low capacity utilization. They should increase the overall profitability of the company as compare to its
competitors.
60
11. FUTURE OUTLOOK

Cement dispatches are expected to continue growing in the future as the demand for cement may increase in
response to construction activities in the private sector. Despite this, the local cement dispatches may be
depressed due to slowdown in the economy-led construction activities in the country and also due to inflation.
But exports are expected to maintain their strong growth and support the total cement dispatches. Pioneer
Cement is expected to have increased exports as it has received orders from new buyers such as Russia, Central
Asia, Madagascar and Nigeria. In the budget 2009 the central excise duty on cement was increased to Rs 900
per ton from current Rs 750 per ton Expenses are expected to increase for cement manufacturers due to the hike
in coal prices and higher interest rates in our economy.
This will negatively impact the gross margins of the cement sector. During the past, our cement manufacturers
shifted production from oil to coal or gas. Pakistan has huge reserves of coal but manufacturers need to import
coal due to high sulphur content. Coal prices more than doubled during 2008 with average coal prices being
around US $176/ton during the fiscal year. Rising coal prices coupled with a depreciating rupee will increase
the cost of production for the cement companies and hit their gross margins hard. From a wider perspective, the
cement consumption in the domestic market is expected to fall because of the shocking economic situation in
the country.
The company's lavish expenditure on the social benefit when all the profitability ratios are below the industry
average is not a good decision at all. The good asset and debt management is the key to success in future. The
current owners will also have to think about increasing the free float of the company, as there is a lot of room
for equity in the capital structure. This will have a positive effect on the net profit of the company, as the
interest costs will reduce a lot. The stock market recovery should boost this decision. The liquidity position
should also be improving in the nest year owing to the dependency of the company in short term borrowings.
The impediments in the good future income are of course the power shortages and the fluctuating oil prices but
these factors are faced by the industry as a whole. But the local demand will of course pick up due to the
construction work in Swat and NWFP. The reduction in the prices of coal will also be also helpful in reducing
the costs of the company. However, there is hope for cement sector on the international front. Presently,
Pakistan is exporting to Afghanistan and India. Regional shortage of cement has presented a favorable
opportunity for our cement manufacturers.
61
12. BIBLIOGRAPHY
REFERENCE & SOURCES USED
• Pioneer Cement company limited website (www.pioneercement.com)

• Pioneer Cement company Annual Reports
• Kohat Cement company Annual Reports.
• Cherat Cement Company Annual Reports
• Kohat Cement Company website (www.kohatcement.com)
• Kohat Cement Company Financial Reports.
• All Pakistan cement manufacturing Association. www.apcma.com
• Financial Management by (BPB)
• Financial Reporting by (BPB)
• Karachi stock exchange site
• www.investopedia.com
• www.brecorder.com Business Recorder
• www.accountingformanagment.com
13. WORK LOAD MATRIX

Abu-Bakar Butt (08-0382) 100%
Mariyum Javaid Sandhu (08-0382) 100%
Shawna Javaid Sandhu (08-0430) 100%
Sareena Khan (08-0528) 100%
62

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COMPARITIVE ANALYSIS OF FINANCIAL STATEMENTS

We would like to express our gratitude to Mr.Shehzad Moin who gave us

Dec 01st, 2009

PIONEER CEMENT LIMITED

Paid up Capital 199.5 million shares of Rs. 1,995

Shareholders’ Equity 2,401

VISION AND MISSION

Company Name PIONEER CEMENT

Legal Status Public Limited Company

7th Floor, Lakson Square

No.3, Sarwar Shaved Road,

Head Office Karachi, Pakistan.

Telephone (021) 5685052-55

Fax (021) 5685051

BOARD OF DIRECTORS CHIEF FINANCIAL OFFICER

DATA AND METHODOLOGY

DEFINITION OF ACCOUNTING RATIOS:

ADVANTAGES OF RATIOS ANALYSIS:

1) SIMPLIFIES FINANCIAL STATEMENTS: It simplifies the comprehension of financial

LIMITATIONS OF RATIOS ANALYSIS:

1) LIMITATIONS OF FINANCIAL STATEMENTS: Ratios are based only on the information

5.1. PERCENTAGE ANALYSIS:

5.2. RATIO ANALYSIS:

6.1. PERCENTAGE ANALYSIS

6.1.1.1. FIVE YEARS HORIZONTAL ANALYSIS OF INCOME

PIONEER CEMENT COMPANY LIMITED

FIVE YEAR POSITION OF INCOME SATEMENT

Net Sales 55% 2% 50% 55% 40%

Cost of goods sold 54% 52% 34% 47% 31%

Gross Profit 61% -74% 83% 74% 73%

Administrative And Selling expenses 293% 25% -15% 55% 19%

Operating Operating/Loss -124% -84% 107% 80% 91%

Other operating expenses 1997% -88% 13% 123% -5%

Other operating income 162% -84% 162% -65% 19%

Profit/loss from operations -189% -84% 120% 45% 84%

Financial & Other Voluntary separation 13% -286% 63% 3% 28%

Profit/loss before taxation 211% -120% 137% 65% 56%

Taxation 333% -135% 316% -133% -44%

Profit/loss after taxation 92% -114% 104% -22% 87%

6.1.1.2. HORIZONTAL ANALYSIS OF BALANCE SHEET

Issue Subscribed & Paid Up Capital 18% 5% 5% 62% 26%

Surplus on Revaluation of fixed assets-net of 290% -5% -4% - -

NON CURRENT ASSETS

Assets held for disposal -100% - - - -

3) EQUITY AND LIABILITIES:

6.1.2. VERTICAL ANALYSIS:

6.1.2.1 VERTICAL ANALYSIS OF INCOME STATEMENT

Vertical Analysis of Pioneer Cement Company Limited

Five Year Position Of Income Statement

Sales- Net -2697% -3349% 455% 616% 312%

Cost of goods sold -2412% -3009% 273% 413% 221%

Gross Profit -285% -340% 182% 203% 91%

Administrative And Selling expenses -309% -151% 17% 40% 20%

Operating Operating/Loss 24% -189% 165% 162% 71%

Other operating income -17% -13% 11% 8% 19%

Profit/loss from operations 89% -194% 167% 155% 84%

Financial & Other 230% 391% 29% 36% 28%

Profit/loss before taxation 319% 197% 138% 119% 56%

Taxation 219% 97% 38% 19% -44%

Profit/loss after taxation 100% 100% 100% 100% 100%

6.6. VERTICAL ANALYSIS OF BALANCE SHEET

PIONEER CEMENT COMPANY LIMITED

Authorized Share Capital 0% 0% 0% 0% 0%