FIN254 Project Final Abc

Contents
Executive Summary................................................................................................................................. 2
Introduction ............................................................................................................................................ 2
Time Series Analysis ................................................................................................................................ 3
Crown Cement .................................................................................................................................... 3
Premier Cement .................................................................................................................................. 4
Cross Sectional Analysis .......................................................................................................................... 5
Comparison ............................................................................................................................................. 9
Conclusion, Recommendation .............................................................................................................. 19
Appendix: .............................................................................................................................................. 20
Calculations for 2014-2015 ............................................................................................................... 20
References: ........................................................................................................................................... 36
1
Executive Summary
This report of the course Introduction to Financial Management comprises of ratio analysis on two
companies, Crown Cement and Premier Cement of Bangladesh. The analysis includes time series
analysis as well as cross sectional analysis and a detailed comparison of the ratios presented for each
company with graphical analysis. The time series analysis of each of the companies was analyzed
over a period of four years. The cross sectional data compared the two companies’ data in a given
period of time. The companies were assessed based on 5 different criteria that are liquidity, leverage,
activity, profitability and market position. After assessing with over twenty ratio analyzing tools, we
gave the verdict on each of the respective sections. Finally a more summarized conclusion is given in
the conclusion section.
Introduction
This is a report assessing the financial condition of two cement manufacturing companies over four
year period for the course Introduction to Financial Management. The report is based upon the ratio
analysis learned throughout the course of FIN 254. The report consists of cross sectional and time
series data analysis of the companies as well as a detailed comparison section. The two companies
selected for the report are Crown Cement and Premier Cement. Throughout this report, we’ve
assessed their financial states based on different criteria. Firstly, we did a time series analysis. Then
the companies’ numerical data were compared with each other through cross sectional analysis.
Furthermore, all the information presented in the Time-Series and Cross-Sectional Analysis were
presented and compared thoroughly in the comparison section. The analysis was done by forming a
side-by-side tabulated format for better understanding. The tools used to analyze the financial states of
the companies are ratio analysis tools
2
Time Series Analysis
Crown Cement
Ratio 2014-2015 2015-2016 2016-2017 2017-2018
Liquidity
Current ratio 1.45 1.29 1.21 1.15
Quick (acid test) ratio 1.32 1.16 1.09 1.04
Activity
Inventory turnover 9.5 9.22 7.99 10.4
Average age of Inventory 38.42 days 39.5 days 45.7 days 35.2 days
Average collection period 51.6 days 43.1 days 62.3 days 69.6 days
Average payment period 7.48 days 20.79 days 12.04 days 7.52 days
Total asset turnover 0.69 0.63 0.53 0.637
Debt
Debt ratio 0.51 0.52 0.6 0.64
Debt to equity ratio 1.05 1.1 1.52 1.77
Times interest earned ratio 2.12 2.62 2.97 1.45
Profitability
Gross profit margin 17.10% 18.40% 17.06% 13.09%
Operating profit margin 11.90% 13.26% 11.76% 7.97%
Net profit margin 7.85% 8.25% 7% 2.51%
Earnings per share (EPS) 4.37/share 5.01/share 4.45/share 2.13/share
Return on total assets (ROA) 5.37% 5.20% 4.50% 1.60%
Return on equity (ROE) 11.04% 11.06% 13.09% 4.43%
Market
Price/earnings ratio (P/E) 17.35% 14.95% 20.97% 38.08%
Market/book ratio (M/B) 1.91 1.66 1.95 1.6
3
Premier Cement
Ratio 2014-2015 2015-2016 2016-2017 2017-2018
Liquidity
Current ratio 1.02 1.34 0.94 0.78
Quick (acid test) ratio 0.73 1.12 0.77 0.72
Activity
Inventory turnover 6.09 7.98 8.63 17.31
Average age of Inventory 59.9 days 45.77 days 42.31 days 21.1 days
Average collection period 61.5 days 72.1 days 86.8 days 87.3 days
Average payment period 15.97 days 28.87 days 21.4 days 38.63 days
Total asset turnover 0.8 0.943 0.89 0.75
Debt
Debt ratio 0.62 0.57 0.61 0.68
Debt to equity ratio 1.64 1.32 1.54 2.17
Times interest earned ratio 2.34 4.29 4.01 2.46
Profitability
Gross profit margin 15.4% 21.68% 16.41% 14.70%
Operating profit margin 11.2% 14.68% 9.46% 9.67%
Net profit margin 5.25% 9.92% 5.29% 4.08%
Earnings per share (EPS) 3.55/share 5.99/share 4.66/share 3.89/share
Return on total assets (ROA) 4.50% 7.09% 4.73% 3.04%
Return on equity (ROE) 11.89% 16.47% 12.03% 9.70%
Market
Price/earnings ratio (P/E) 14.08% 15.19% 19.5% 19.92%
Market/book ratio (M/B) 1.82 3.06 3.21 2.72
4
Cross Sectional Analysis
2014-2015
Ratio Crown Cement Premier Cement
Liquidity
Current ratio 1.45 1.02
Quick (acid test) ratio 1.32 0.73
Activity
Inventory turnover 9.5 6.09
Average age of Inventory 38.42 days 59.9 days
Average collection period 51.6 days 61.5 days
Average payment period 16.4 days 15.97 days
Total asset turnover 0.69 0.8
Debt
Debt ratio 0.51 0.62
Debt to equity ratio 2.05 1.64
Times interest earned ratio 0.687 2.34
Profitability
Gross profit margin 17.10% 15.4%
Operating profit margin 11.90% 11.2%
Net profit margin 7.85% 5.25%
Earnings per share (EPS) 4.37/share 3.55/share
Return on total assets (ROA) 5.37% 4.50%
Return on equity (ROE) 11.04% 11.89%
Market
Price/earnings ratio (P/E) 17.35% 14.08%
Market/book ratio (M/B) 1.91 1.82
5
2015-2016
Liquidity
Activity
Debt
Profitability
Market
6
2016-2017
Liquidity
Activity
Debt
Debt ratio 0.6 0.61
Profitability
Net profit margin 7% 5.29%
Market
7
2017-2018
Liquidity
Activity
Debt
Profitability
Market
8
Comparison
Current Ratio:
Throughout the four years, Crown cement
Current Ratio
has maintained a Current Ratio of over 1:1. 2
1.5 1.34
Although it is a bit lower than the industry
1.45 1.02 0.94
1 1.29 1.21 0.78
average (2:1), the company will not face 1.15
0.5
any major liquidity issues. Since the ratio 0
2014 2015 2016 2017
is over 1:1, it means that for every TK1
Crown Cement Premiere Cement
worth of short-term liability, Crown
Cement has over Tk1 worth of Current Assets. Thus, the company can pay off its short-term liabilities
with its current assets quite easily.
On the other hand, although Premier Cement had a relatively positive current ratio figure in
2014 and 2015, even that was reduced to a problematic figure of 0.94 and 0.78 respectively. This
means that Premier Cement will have a hard time paying off its short-term debts compared to Crown
Cement.
Quick Ratio:
Quick ratio is a more “immediate” format Quick Ratio (Acid Test)
of checking the liquidity of a business as it 1.5
1.12
omits the inventory calculation of a 1.32
1 1.162
0.73 1.09 0.77 1.0430.72
business and shows the direct cash
0.5
equivalency of a company.
0
Crown Cement had a healthy quick ratio 2014-2015 2015-2016 2016-2017 2017-2018

of 1.32 in 2014, but there was a gradual
9
decline in the recent years to 1.04, which means inventory levels have been rising, which could prove
challenging for Crown Cement when trying to acquire immediate cash flow.
Premier Cement had an unhealthy Acid Test Ratio of only 0.73, meaning their current assets were less
than current liabilities when stock of inventory was considered. The values moved up in recent years
and then fell to 0.72 in 2017 which means it’s worse than it was in the previous years and it is
definitely worse than Crown Cement.
Inventory Turnover:
Inventory turnover represents how
Inventory Turnover
quickly a firm is able to sell its 20 17.31
products. When compared, the higher 15
Days
the number the quicker the firm is 10 7.98 8.63

9.5 6.09 10.4
9.22
able to sell. 7.99
5
Over the four years, the 0

2014-2015 2015-2016 2016-2017 2017-2018
inventory turnover had fluctuated for
Crown Cement. It decreased from 9.5
to 7.99 from 2014 to 2016 then increased to 10.4. It is observed that in the year 2017-2018, Crown
cement was able to sell its goods quickly compared to rest of the years. On the other hand, Premier
Cement had an improving inventory turnover ratio. Their ratio went from 5.3 in 2014-2015 to 17.31 in
2017-2018. This means that as time progressed, they were able to sell more quickly.
While comparing both companies, according to the calculations, during the initial two years,
Crown Cement was able to sell more quickly than Premier Cement. But from 2016-2017 onwards,
Premier cement was able to sell its goods faster.
Average age of Inventory

80
59.9
Average age of Inventory: 60
45.77 42.31
Days
40 45.7
38.42 39.5 21.1
35.2
20
0 10
2014-2015 2015-2016 2016-2017 2017-2018

Average age of inventory signifies how long an inventory is kept in a business until it is sold and
replaced. The lower the number, the better, as the firm can get rid of its inventory quickly.
Crown Cement’s age of inventory ranged between 38.4 days in 2014 to 35.2 days in 2017, however, it
did go up slightly in 2016.
Whereas, Premier Cement had a very high age of inventory of 59.9 days in 2014 but have surprisingly
reduced it to 21.1 in 2017, which is lower than Crown Cement.
Average Collection Period:

Average Collection Period calculates the
Average collection period
average amount of time it takes to collect
100 86.8 87.3
the Accounts Receivables. When 80 72.1
61.5
60 69.6
Days
compared, the lower the number the 62.3

40 51.6
43.1
quicker the firm is able to collect its 20
receivables. 0
2014-2015 2015-2016 2016-2017 2017-2018
As the graph shows in 2014-2015, Crown Crown Cement Premiere Cement
Cement took an average of 51.6 days to collect an account receivable. On the following years, it took
them longer to collect their receivables from the customers.
On the contrary, Premier cement had a higher number of days to collect back their credit than Crown
Cement.
Since both the company is in the cement manufacturing industry, it is normal to have a greater
number of average collection period because most of the time they offer credit to customers for one to
two months.
11
Average Payment Period:
The Average Payment Period shows the
Average payment period
average amount of days a firm takes to
50
38.63
pay off its accounts payables. Normally, 40
28.87
30
Days
21.4
the higher the number, the more time the 20 15.97
20.79
business gets to arrange the money for its 10 16.4
12.04 7.52
0
payables. 2014-2015 2015-2016 2016-2017 2017-2018

According to the graphs, Crown
Cement took an average of 16.4 days to pay back its suppliers in 2014-2015. Whereas the number fell
to 7.52 days in 2017-2018 which means that the business gets only one week to pay back its payables.
When compared with average collection period, Crown Cement takes almost 70 days to collect its
receivables and only 7 days to pay back the payables in 2017-2018. this might deteriorate the
company’s cash flows.
On the other hand, Premier Cement had a much higher payment period i.e. the business got
more time to pay off its payables. in 2014-2015, the business had 50.5 days to pay for their credit
compared to only 16 days for Crown Cement. Although the payment period has declined to 38 days in
2017-2018, the company’s collection period is close. In 2017-2018, Premier Cement took
approximately 87 days to collect its debts and 39 days to pay off their own credits. This might not
affect much on their cash flows as much as it will for Crown Cement since the collection and payment
periods are comparatively close.
12
Total Asset Turnover:
This ratio indicates the amount of sales a firm
Total Asset Turnover
generates through the usage of the value of its 0.943
1 0.89
0.8 0.75
assets. A higher value would necessarily mean 0.8
0.6 0.69
that a firm is successfully able to turn more of 0.63 0.637
0.4 0.53
its assets usage to net sales. 0.2
0
Crown Cement has a marginally lower value of 2014-2015 2015-2016 2016-2017 2017-2018

total asset turnover ranging from 0.69 in 2014
to 0.637 in 2017.
On the other hand, Premier Cement has a much higher value in all four years and 0.75 in 2017,
making it higher than Crown Cement.
Debt Ratio:
The Debt Ratio measures the proportion of
Debt ratio
total assets financed by the firm’s Creditors.
0.8 0.68
0.62 0.61
0.57
The higher this ratio, the greater the amount of 0.6
0.6 0.64
other people’s money being used to generate 0.4 0.51 0.52
0.2
money.
0
2014-2015 2015-2016 2016-2017 2017-2018
As the Chart shows, both the companies have a
debt ratio of more than 50%. This means that
more than half of the firm’s total assets are financed through Creditors. In 2014-2015, the Debt Ratio
for Crown Cement was 51% which later increased to 64% in 2017-2018. Similarly, Premier Cement
had a higher Debt ratio of 62% in 2014-2015 and 68% in 2017-2018 respectively. Higher debt ratio
could raise concerns for the company’s shareholders as it shows that the company will pay off its
debts before providing dividends and thus higher debts means higher interests needs to be paid and
less dividends for shareholders.
13
Debt to Equity Ratio:
Simply put, debt to equity ratio indicates the
Debt to equity ratio
proportion of shareholders’ equity to debt 2.5 2.17
used to finance a company’s assets. A higher 2 1.64

2.05 1.54
1.5 1.32 1.77
value would mean that a company has more 1.52
1
1.1
debt than shareholders’ equity. 0.5
0
Although in 2014 Crown Cement had a 2014-2015 2015-2016 2016-2017 2017-2018
Crown Cement Premier Cement

slightly higher value of debt to equity ratio of
2.05, it dropped to 1.1 in 2015 and gradually rose to 1.77 in 2017, making it slightly unhealthy for the
business.
Meanwhile, although Premier Cement has had a steady rate of debt to equity, it has increased over the
past two years to 2.17 in 2017, making it quite bad for the company.
Gross Profit Margin:

The Gross Profit Margin for both the companies
Gross profit margin
was quite close. The GP margin has fluctuated 25.00% 21.68%
20.00% 15.40% 16.41%
for both the companies for the past four years. 14.70%
15.00% 18.40%
17.10% 17.06%
The GP margin for crown cement fell from 10.00% 13.09%
17.8% in 2014-2015 to 13.09% in 2017-2018. 5.00%
0.00%
Similarly, the GP Margin for Premier Cement 2014-2015 2015-2016 2016-2017 2017-2018
fell form 15.4% in 2014-2015 to 14.7% in 2017- Crown Cement Premiere Cement
2018. The fall in GP Margin could be due to increased cost of sales or lower revenue for both the
companies.
14
Operating Profit Margin:
The Operating Profit Margin was almost the same
for both the companies throughout the four years. Operating profit margin
20.00%
The Profit Margin for Crown Cement was 11.9%
15.00%
13.26%
in 2014-2015 which fell to 7.97% during 2017- 11.90% 14.68% 11.76%
10.00%
11.20% 7.97%
2018. This might be a concern for some 9.46% 9.67%
5.00%
shareholders. 0.00%
2014-2015 2015-2016 2016-2017 2017-2018
Likewise, Premier Cement also saw a fall in their Crown Cement Premiere Cement
Operating Profit margin. In 2014-2015, the Company had a Operating Profit of 11.2% which fell to
9.67% in 2017-2018. This downward trend in operating profit could be due to increased operating
expenses for both the companies.
Net Profit Margin:

The Net Profit Margin is one of the most important
ratios that shareholders see to make decisions

Net profit margin
12.00%
about investments. Higher Net Profit Margin 10.00% 9.92%
8.00% 7.85% 8.25%
means higher return for the shareholders. 7%
6.00%
5.25% 5.25%
4.00% 4.08%
The two company’s NP Margin also fell during the 2.00% 2.51%
0.00%
four year period. In 2014-2015, Crown Cement 2014-2015 2015-2016 2016-2017 2017-2018
had a NP Margin of 7.85% which fell to only Crown Cement Premiere Cement
2.51% in 2017-2018.
On the other hand, Premier Cement started with a lower NP Margin of 5.25% in 2014-2015 which
slightly fell to 4.08% in 2017-2018. Since both the companies had a falling NP Margin, it can be
15
assumed that the cement manufacturing industry has not been profitable in recent years. The fall in
NP Margin could also be due to the fall in Operating and Gross Profit Margin for both companies.
Earnings per Share:

As the name suggests, earnings per share is the
Earnings per share (EPS)
amount of money an investor will earn from the
7 5.99
purchase of one equivalent share in a company. 6 5.01
4.37 4.66
4.45
5 3.89
In BD Tk/=
3.55
Higher value would necessarily mean a higher 4
3 2.13
return. 2
1
Crown Cement has been experiencing a declining 0
2014-2015 2015-2016 2016-2017 2017-2018
EPS since 2015 and are at an all-time low of 2.13 Crown Cement Premiere Cement
in 2017, within the past four years.
Premier Cement was slightly lower than Crown Cement in terms of EPS in 2014, and has made a
recovery, as well as a relatively stronger position in a declining industrial situation, as suggested
through the recent trends in changes of profitability of the cement industry. Currently, it has a higher
EPS at 3.89 per share compared to 2.13 of Crown Cement.
Return on Total Assets (ROA):

Return on assets suggests how efficiently or
Return on total assets (ROA)
effectively a company is earning its profits 8.00% 7.09%
5.37% 5.20%
through the usage of its assets. A higher 6.00% 4.50% 4.73%
4.50%
4.00% 3.04%
percentage would mean that the company is
1.60%
earning higher amounts of profits given the 2.00%
0.00%
amount of assets it has in its disposal.
2014-2015 2015-2016 2016-2017 2017-2018
16
Crown Cement has faced a declining ROA since 2014, and are at a staggering low value of 1.60%
only.
Meanwhile, Premier Cement has also faced a decrease in the ROA, but less aggressively compared to
Crown, and currently are nearly double the return that Crown Cement have, at 3.04%.
Return on Equity (ROE):

Return on Equity refers to the percentage of
Return on equity (ROE)
earnings that a company earns from the
20.00%
investment of share capital in the company. A 16.47%
15.00%
13.09%
12.03%
11.89% 11.06%
higher percentage means that the company has 10.00%11.04% 9.70%
efficiently used the investment to acquire 5.00% 4.43%
greater return. 0.00%

2014-2015 2015-2016 2016-2017 2017-2018

Crown Cement has experienced a steady ROE
from 2014 to 2016, but a significant drop in 2017 to nearly half of what it was before, at 4.43%.
Furthermore, Premier Cement has had a better ROE compared to Crown for a while, and are at a
strong 9.70%, making this also higher than Crown’s.
Market/Book Ratio (M/B):

The marker/book ratio shows how the investors
Market/book ratio (M/B)
view the firm’s performance. During 2014-2015
4 3.21
3.06
2.72
the M/B Ratio for Crown Cement was 1.91. this 3
1.91
1.82 1.95
1.66 1.69
means that during that period investors were 2
1
paying Tk.1.91 for each Tk.1 of book value of
0
Crown Cement stock. The value later fell to 1.69 in 2014-2015 2015-2016 2016-2017 2017-2018
17
2017-2018 which means investors are paying less than what they used to earlier.
On the other hand, Premier Cement had an improving M/B Ratio. The value went from 1.82 to 2.72 in
just four years. This shows that the investors are willing to pay more than double the book value of
the stock of Premier Cement.
Price Earning Ratio (PER)

40
The P/E Ratio measures the amount
35
that investors are willing to pay for
30
each Taka of firm’s earnings. Higher
25
the P/E Ratio, the more confident are
20 Crown Cement
the investors of future performance of Premier Cement
15
the company.
10
The P/E Ratio of Crown Cement 5
skyrocketed from 17.35 to 38.08 from 0

2014-2015 2015-2016 2016-2017 2017-2018
2014-2015 to 2017-2018 respectively.
This shows that the company has been able to gain Investors’ confidence and create a
positive impression about the company in the market.
Premier Cement has also experienced a rise in P/E Ratio but not as much as Crown Cement.
The P/E Ratio went from 14.08 to 19.92 during the four years.
18
Conclusion, Recommendation
Except for a given few situations, Crown Cement has recently experienced a downturn in its
performance compared to Premier Cement. Although their liquidity and debt ratios are much stronger,
they have been lacking in performance in their profitability scenarios, and underperforming Premier
in nearly every ratio, in every year. Their return on assets, equity and earnings, as well as net profit
margin, per share has experienced a steep fall in the recent years, making it reluctant for investors to
want to invest in the company.
Meanwhile, Premier Cement has been performing better than Crown in many situations, making it the
clear better choice for investors, especially including the fact that Premier’s earnings per share is
higher than that of Crown, in the recent years. Although the company is going through slight liquidity
and debt issues, it will be able to turn around those problems through increased investments and
reduction of inventory.
Therefore, we would formally like to recommend investors to purchase Premier Cement, instead of
Crown Cement, through the research we have done and a future expectation of Premier outperforming
Crown Cement in terms of both profitability as well as market share situation.
19
Appendix:
Calculations for 2014-2015

Crown Cement
Liquidity Ratios Formula Calculations Answer
Current Ratio Current Asset 7754595168

───────── ───────── = 1.45:1
LIQUIDITY Current Liability 5343980909
RATIOS
Current Asset –Inventory 7754595168 – 722240942

────────────── ────────────────── =1.32:1
Liquidity Ratio Current Liability 5343980909
Inventory Turnover Cost of Sales 6850549283

─────────── ───────── =9.49
Inventory 722240942
Average Age of 365 365

Inventory ──────────── ───── =38.48
Inventory Turnover 9.49
Average Payment Accounts Payable 126122045

ACTIVITY Period ─────────── ─────────── =7.48 days
RATIOS Average Purchase/Day (6152142497/365)
Average Collection Accounts Receivable 1169678553

Period ──────────── ─────────── =51.6days
Average Sales/Day (8264240985/365)
Total Asset Sales 8264240985

Turnover ──────── ───────── =0.69
Total Asset 12061702982
Debt Ratio Total Liabilities 6182373334

──────────── ─────────── =51%
Total Assets 12061702982
Debt to Equity Ratio Total Liabilities 6182373334

───────────── ────────── =0.105
Common Stock Equity 58793239648
20
Earnings Before Tax & 984673291
Times Interest Earned Interest ──────────────── =2.52 times
───────────── (389630596)
Interest
Gross Profit Margin Gross Profit 1413691702

──────── ─────────── ×100 =17.1%
Sales 8264240985
Operating Profit 984673291

Operating Profit Margin ────────── ─────────── ×100 =11.9%
Sales 8264240985
Net profit 648850994

Net Profit Margin ──────── ────────── ×100 =7.85%
Sales 8264240985
Profitability
Ratio Earnings Per Share Earnings Available for
(EPS) Common Stock Holders 648850994
────────────── ──────── =4.37/share
Total Number of Shares 148,500,000
Earnings Available for

Common Stock Holders 648850994 =5.37%
Return on Total Asset ───────────── ─────────

Common Stock Holders 315,612,768 =11.04%
Return on Equity ────────────── ──────────
Common Stock Equity 7,124,354,456
21
Market Price / Share 75.8
Price/Earnings Ratio ───────────── ────── =17.35
Earnings / Share 4.37
Market Ratio
Market/Book Ratio Common Stock Equity 5879329648
─────────────── ───────── =39.59
Number of shares of 148,500,000
common stock outstanding
PREMIER CEMENT

───────── ───────── =1.02:1
Current Liability 3549233141
Current Asset –Inventory 3602877481-990529590

────────────── ────────────────── =0.73:1
LIQUIDITY
RATIOS Cost of Sales 6033283166
Inventory Turnover ─────────── ───────── =6.09
Inventory 990529590

Inventory ──────────── ───── =59.9

ACTIVITY Period ─────────── ─────────── =15.97
RATIOS Average Purchase/Day (4694564312/365) days

Period ──────────── ─────────── =61.5 days
22
Turnover ──────── ────────── =0.86

──────────── ─────────── =0.62

Debt Ratio ───────────── ───────── =1.64
Earnings Before Tax &

Times Interest Earned Interest 799803548
───────────── ───────── =2.34
Interest 342527207

──────── ─────────── ×100 =15.4%
Sales 7133420289

Operating Profit Margin ────────── ────────── ×100 =11.2%
Sales 7133420289

Net Profit Margin ──────── ───────── ×100 =5.25%
Sales 7133420289
Profitability
Ratio
Earnings Per Share Earnings Available for 374214171
(EPS) Common Stock Holders ──────── =3.55/share
────────────── 105,450,000
Total Number of Shares

Common Stock Holders 374214171
Return on Total Asset ───────────── ───────── =4.50%
Earnings Available for 374214171

Common Stock Holders ────────── =11.89%
Return on Equity ────────────── 3147359273
Common Stock Equity
23
Market Ratio
─────────────── ───────── =30.12
Number of shares of 104500000

Crown Cement

───────── ───────── = 1.29:1
RATIOS

────────────── ───────────────── =1.162:1

─────────── ───────── =9.22
Inventory 797868489

Inventory ──────────── ───── =39.5

ACTIVITY Period ─────────── ─────────── =20.79
24
Period ──────────── ─────────── =43.1days

Turnover ──────── ───────── =0.63

──────────── ─────────── =52.5%

───────────── ────────── =1.10
Earnings Before Tax & 1196135443

Times Interest Earned Interest ──────────────── =2.62
───────────── 457411326
Interest

──────── ─────────── ×100 =18.40%
Sales 9016548629

Sales 9016548629

Sales 9016548629
Profitability
Ratio Earnings Per Share Earnings Available for 744247825
(EPS) Common Stock Holders
────────────── ──────── =5.01/share
Total Number of Shares 148500000

Earnings Available for 744247825

Common Stock Holders ────────── =11.06%
Return on Equity ────────────── 6724823855
Common Stock Equity
25
Market Price / Share
74.9 =14.95
Price/Earnings Ratio ───────────── ──────
Market Ratio
─────────────── ───────── =45.2
PREMIER CEMENT

───────── ───────── =1.34:1
RATIOS

────────────── ────────────────── =1.12:1
Cost of Sales 6583235529

Inventory 825535471

Inventory ──────────── ───── =45.77

ACTIVITY Period ─────────── ─────────── =28.87
26
Period ──────────── ─────────── =72.1days

Turnover ──────── ────────── =0.943

──────────── ─────────── =0.57

Debt Ratio ───────────── ───────── =1.32

Times Interest Earned Interest 1232652629
───────────── ───────── =4.29
Interest 287440455

──────── ─────────── ×100 =21.68%
Sales 8405992543

Sales 8405992543

Net Profit Margin ──────── ───────── ×100 =9.92 %
Sales 8405992543
Profitability
────────────── ──────── =5.99/share

27
Common Stock Holders 632068456 =16.47 %
Return on Equity ────────────── ──────────

Market Ratio
─────────────── ───────── =36.40
Crown Cement

───────── ────────── =1.21:1
RATIOS
Current Asset –Inventory (10138764676-980360894)

────────────── ───────────────── =1.09:1

─────────── ───────────── =7.99
Inventory 980360894

Inventory ──────────── ───── =45.68

ACTIVITY Period ─────────── ────────── =12.04days
RATIOS Average Purchase/Day 19435178.69
28
Period ──────────── ───────── =62.3days
Average Sales/Day 25862520.61

Turnover ──────── ─────────── =0.53

──────────── ───────── =0.603

───────────── ────────── =1.10

Times Interest Earned Interest 1296338450 =2.97 times
───────────── ────────
Interest 436454746

──────── ──────── X100 =17.1%
Sales 9439820021
Operating Profit
Operating Profit Margin ────────── 1109776984 =11.75%
Sales ─────────── ×100
9439820021
Profitability
Ratio Net profit 661079097
Net Profit Margin ──────── ────────×100 =7.0%
Sales 1109776984
Earnings Per Share Earnings Available for

────────────── ───────── =4.45/share
Total Number of Shares 148500000
Profitability
Ratio Earnings Available for
29
Return on Equity ────────────── ───────────
Premier Cement

───────── ───────── =0.94:1
RATIOS

────────────── ────────────────── =0.77:1
Cost of Sales 7757675988

Inventory Turnover ─────────── ─────────── =8.63
Inventory 899312614

Inventory ──────────── ───── =42.31
Average Payment Accounts Payable 661,152,352

ACTIVITY Period ─────────── ─────────── = 21.4 days
RATIOS Average Purchase/Day (5,928,205,601/365)

Period ──────────── ──────── =86.8 days
Average Sales/Day (9280420526/365))

Turnover ──────── ──────── =0.89
30
──────────── ─────────── =0.61

Debt Ratio ───────────── ────────── =1.55

Times Interest Earned Interest 972,019,688
───────────── ───────── =4.01
Interest 395,287,871

──────── ────────── =16.4%
Sales 9280420526

Sales 9280420526

Sales 9280420526
Profitability
Ratio
Earnings Per Share Earnings Available for 490965931
(EPS) Common Stock Holders ──────── =4.66/share
────────────── 105,450,000
Total Number of Shares


Return on Equity ────────────── ──────────

31
Market Ratio
Market/Book Ratio Common Stock Equity 4,227,242,114
─────────────── ───────── =28.47
Crown Cement (2017-2018)
Current Ratio Current Asset 11,304,321,269

───────── ───────── = 1.15:1
LIQUIDITY Current Liability 9,829,557,849
RATIOS
Current Asset –Inventory 11,304,321,269 –

────────────── 1,052,792,176 =1.043:1
Liquidity Ratio Current Liability ──────────────────
─
9,829,557,849
Inventory Turnover Cost of Sales 10,915,891,226

─────────── ───────── =10.37
Inventory 1,052,792,176

Inventory ──────────── ───── =35.2

ACTIVITY Period ─────────── ─────────── =7.52 days
RATIOS Average Purchase/Day (9,384,755,108/365)
Average Collection Accounts Receivable 2,395,121,071

Period ──────────── ─────────── =69.6 days

Turnover ──────── ───────── =0.637
32
Debt Ratio Total Liabilities 12,589,557,659
──────────── ─────────── =64%
Total Assets 19,713,912,115
Debt Ratio
Debt to Equity Ratio Total Liabilities 12,589,557,659
───────────── ────────── =1.77
Earnings Before Tax & (410,224,857+725,338,688

Times Interest Earned Interest +195,795,104) =1.45 times
───────────── ────────────────
Interest (725,338,688+195,795,104)
Gross Profit Margin Gross Profit 1,643,420,373

──────── ─────────── ×100 =13.09%
Sales 12,559,311,599
Profitability
Ratio Operating Profit 1,001,289,845
Sales 12,559,311,599
Net profit 315,612,768

Sales 12,599,311,599
Earnings Per Share Earnings Available for

(EPS) Common Stock Holders 315,612,768
────────────── ──────── =2.13/share

Total Asset 19,713,912,115

Return on Equity ────────────── ──────────
33
Market Ratio
─────────────── ───────── =47.98
PREMIER CEMENT (2017-2018)
Current Ratio Current Asset 6,658,342,049

───────── ───────── =0.78:1
LIQUIDITY Current Liability 8,557,798,754
RATIOS
Current Asset –Inventory 6,658,342,049-495,177,438

────────────── ────────────────── =0.72:1
Liquidity Ratio Current Liability 8,557,798,754
Cost of Sales 8,570,910,412

Inventory 495,177,438

Inventory ──────────── ───── =21.1

ACTIVITY Period ─────────── ─────────── = 40.71
RATIOS Average Purchase/Day (5,928,205,601/365) days
Average Collection Accounts Receivable 2,404,625,585

Period ──────────── ─────────── =87.3 days
Average Sales/Day (10,049,865,124/365)
Total Asset Sales 10,049,865,124

Turnover ──────── ────────── =0.75
Total Asset 13,467,994,951
34
Debt Ratio Total Liabilities 9,190,752,837
──────────── ─────────── =0.68
Total Assets 13,467,994,951
Debt to Equity Ratio Total Liabilities 9,190,752,837

Debt Ratio ───────────── ────────── =2.17

Times Interest Earned Interest 972,019,688
───────────── ───────── =2.46
Interest 395,287,871
Gross Profit Margin Gross Profit 1,478,954,712

──────── ─────────── ×100 =14.7%
Sales 10,049,865,124
Operating Profit 972,019,688

Sales 10,049,865,124
Net profit 410,251,180

Sales 10,049,865,124
Profitability
(EPS) Common Stock Holders 410,251,180
────────────── ──────── =3.89/share

Common Stock Holders 410,251,180
Total Asset 13,467,994,951

Return on Equity ────────────── ──────────

35
Market Ratio
Market/Book Ratio Common Stock Equity 4,227,242,114
─────────────── ───────── =28.47
References:
All the data for the calculations were taken from the Annual Report of the two Companies and Lanka
Bangla Financial Portal
 Annual Report : Year 2014-2015 Crown Cement ( Pg. 52- Pg. 86)
 Annual Report : Year 2014-2015 Premier Cement ( Pg. 91- Pg. 123)
 https://lankabd.com/Home/PriceFile?dateinp=
36

FIN254 Project Final Abc

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Contents

the conclusion section.

the companies are ratio analysis tools

Ratio 2014-2015 2015-2016 2016-2017 2017-2018

Ratio 2014-2015 2015-2016 2016-2017 2017-2018

with its current assets quite easily.

Crown Cement Premiere Cement

definitely worse than Crown Cement.

the number the quicker the firm is 10 7.98 8.63

Over the four years, the 0

Premier cement was able to sell its goods faster.

Average age of Inventory

Crown Cement Premiere Cement

did go up slightly in 2016.

reduced it to 21.1 in 2017, which is lower than Crown Cement.

Average Collection Period:

compared, the lower the number the 62.3

As the graph shows in 2014-2015, Crown Crown Cement Premiere Cement

them longer to collect their receivables from the customers.

Crown Cement Premiere Cement

company’s cash flows.

periods are comparatively close.

Crown Cement Premiere Cement

making it higher than Crown Cement.

less dividends for shareholders.

used to finance a company’s assets. A higher 2 1.64

Crown Cement Premier Cement

Gross Profit Margin:

expenses for both the companies.

Net Profit Margin:

ratios that shareholders see to make decisions

Earnings per Share:

in 2017, within the past four years.

recovery, as well as a relatively stronger position in a declining industrial situation, as suggested

EPS at 3.89 per share compared to 2.13 of Crown Cement.

Return on Total Assets (ROA):

Crown Cement Premiere Cement

Return on Equity (ROE):

efficiently used the investment to acquire 5.00% 4.43%

greater return. 0.00%

Crown Cement Premiere Cement

strong 9.70%, making this also higher than Crown’s.

Market/Book Ratio (M/B):

Crown Cement Premiere Cement

the stock of Premier Cement.

Price Earning Ratio (PER)

The P/E Ratio of Crown Cement 5

skyrocketed from 17.35 to 38.08 from 0

positive impression about the company in the market.

want to invest in the company.

Crown Cement in terms of both profitability as well as market share situation.

Calculations for 2014-2015

Current Ratio Current Asset 7754595168

Current Asset –Inventory 7754595168 – 722240942

Inventory Turnover Cost of Sales 6850549283

Average Age of 365 365

Average Payment Accounts Payable 126122045

Average Collection Accounts Receivable 1169678553

Total Asset Sales 8264240985

Debt Ratio Total Liabilities 6182373334

Debt to Equity Ratio Total Liabilities 6182373334

Gross Profit Margin Gross Profit 1413691702

Operating Profit 984673291