Executive Summary:

The following is an analysis paper of financial statement of company “Meghna cement Ltd” and
“CROWN Cement Ltd”. This entire analysis paper includes the financial statement analysis by
comparing different ratios of the both company. By calculating the industrial average and
considering it as the standard of comparison, we have compared the financial performance of
both of the company.

Financial analysis deter Crownnes a company's health and stability. The data gives us an intuitive
understanding of how the company conducts business. Stockholders can find out how
management employs resources and whether they use them properly. Governments and
regulatory authorities use financial statements to deter Crownne the legality of a company's fiscal
decisions and whether the firm is following correct accounting procedures. Finally, government
agencies, such as the Internal Revenue Service, use financial statement analysis to decide the
correct taxation for the company. Ratio analysis is the calculation and comparison of ratios
which are derived from the information in a company’s financial statements.

The companies we have chosen are both cement making company in Bangladesh. Meghna
Cement is listed with both Dhaka and Chittagong Stock Exchanges, the two bourses of the
country since 1995 and 1996 respectively. The company markets its product under the registered
trade mark "King Brand Cement". Meghna Cement is known as one of the top cement brands in
Bangladesh. CROWN Cement company has been listed in Dhaka Stock Exchange and
Chittagong Stock Exchange in 2011. Its high growth agenda have been highly appreciated by the
shareholders and have won investors trust.

To compare the financial performance of both of the company we had to analyze both company’s
annual reports of last 4 (four) years, which are 2017, 2016 ,2015, 2014. And after comparing
with the Industrial average, which we considered as the standard we have found that CROWN
Cement performs better than Meghna cement in many ratios. Which means the growth of
CROWN Cement is higher than Meghna Cement.

Page 1 of 21
About Bangladesh Cement Industry
Bangladesh cement industry is the 40th largest market in the world. Currently capacity of the
industry is about 20 Crownllion tons (MT). Top 13 players are alone controlling over 78% of the
total industry capacity. However, the balance capacity still remains quite fragmented. Per capita
consumption remains poor when compared with the world average; only 99 kg (FY 2011) while
our neighboring countries, India and Pakistan, have per capita consumption of 135 kg and 130 kg
respectively. Many countries cannot produce enough cement to meet their internal demand, and
they depend on imports. However, Bangladesh is self-sufficient in fulfilling local demand for
cement. Even so, the installed production capacity is higher than local demand.
In Bangladesh, there are around 55 cement manufacturing companies, most of which are in
operations either on a large or small scale. A total of 34, including multinational cement
manufacturers, are in commercial production.
The installed production capacity of the 34 cement factories is 1.85 crore tons a year, according
to Bangladesh Cement Manufacturers Association (BCMA) data.
There are many cement Manufacturers in Bangladesh like Shah, PreCrowner, Lafarge, Holcim,
Scan. At present among other manufacturer Crown cement operating their operations effectively
and efficiently and meeting customers’ demands with a view to acceleration socio-econoCrownc
development of the country. Day by day new competitors appears with better ideas and products
as well as services.

Page 2 of 21
MEGHNA CEMENT COMPANY OVERVIEW
Meghna Cement Crownlls Ltd is the first manufacturing unit of Bashundhara Group and it is one
of the largest cement industries in the country producing nearly 1 Crownllion metric tons a year.
The Meghna Cement Crownlls Ltd is an International Standard Organization (ISO 9001: 2008)
certified company having accreditation of manufacturing products for both domestic and
international markets. The company is listed with both Dhaka and Chittagong Stock Exchanges,
the two bourses of the country since 1995 and 1996 respectively. The company markets its
product under the registered trade mark "King Brand Cement". MCML is known as one of the
top cement brands in Bangladesh. Their associated companies adhere to the same demanding
standards as they provide construction materials such as Ready-Crownx Concrete, Block, Pipe,
and other pre-stressed concrete units to the Government, Builders, and Manufacturers. The firm
enjoy a good history as well as a sustaining reputation in Bangladesh.

GOALS
• Continually set the latest standards of modern technology in cement industry to satisfy
the needs of customers through innovative products and services.
• Contribute to the national economy and the infrastructure development of the country.
• Secure the strongest competitive position in cement market places through making
quality product and operational excellence.
• Be partner with the best suppliers, delivering increased value for both the company and
our customers.
• Be recognized as a respected & attractive cement company & an employer of first choice.
• Provide extensive career opportunities through competitive pay & benefits, training &
development & a congenial working environment.
• Empower meghna cement employees at every level and integrate them fully into our
network.
• Continually demonstrate our comCrowntment to sustainable environmental performance
and play a pro-active role in Corporate Social Responsibility (CSR) within our sphere of
influence.
• Achieve long-term financial performance.
• Create secured investment opportunity within the country.
• Enhance versatility, & diversification through the penetration of new market segments.
• Improve adCrownnistrative& organization structures to review all business lines
regularly & develop the best practice in the industry.
• Earn foreign currency through export cement

Page 3 of 21
CROWN CEMENT COMPANY OVERVIEW
M. I. Cement Factory Ltd. is a public liCrownted company and one of the leading manufacturers
of cement in Bangladesh. On December 31, 1994 it started its journey with the comCrowntment
for providing high quality cement to the country. Its brand “Crown Cement” has own renown
both at home and abroad.
Initially the plant was installed with a capacity of producing 600tpd (ton per day) of Portland
cement. With the passing of time the demand of Crown Cement increased day by day. Therefore,
the sponsors expanded the project thrice. By dint of quality Crown Cement soon gained
acceptability both at home and abroad which raised the necessity for expanding the plant from
initial 600tpd (ton per day), 800tpd 2nd unit in 2002, 1400tpd 3rd unit in 2006 and 3000tpd 4th
unit in 2011 thereby raising the total production capacity to 5800tpd.
The company has been listed in Dhaka Stock Exchange and Chittagong Stock Exchange in 2011.
Its high growth agenda have been highly appreciated by the shareholders and have won investors
trust. Its backward and forward integration endeavors have given new dimensions to its growth
platform.

GOALS
Continually set the latest standards of modern technology in our industry to satisfy the needs of
customers through innovative products and services.

• Contribute to the national economy and the infrastructure development of the country.
• Secure the strongest competitive position in our relevant market places through making
quality product and operational excellence.
• Be partner with the best suppliers, delivering increased value for both the company and
our customers.
• Be recognized as a respected & attractive company & an employer of first choice.
• Provide extensive career opportunities through competitive pay & benefits, training &
development & a congenial working environment.
• Earn foreign currency through export.

Page 4 of 21
 Meghna Cement Ratio Analysis
Ratio Name Formula 2017 2016 2015 2014
Current ratio Current asset/ 1.05 1.07 1.20
Current
Liability 1.29
Quick ratio Current asset- 0.90 0.85 0.90
Inventory /
current
liability 1.01
Inventory turn Cost of good 8.35 9.37
over sold/
Inventory 4.36 6.37
Days sales [Accounts 95.97 42.11
Outstanding receivable/net
sales] * 360 74.01 65.26
Fixed asset Net 1.37 2.12 1.55
turnover sales/Total
fixed asset 1.23
Total asset Net 0.94 0.61
turnover sales/Total
asset 1.05 0.85
Debt to asset [Total 0.82 0.83
ratio Debt/Total
asset] * 100 0.79 0.81
Time interest Earnings 1.3339 1.3372
earned ratio before interest
and
tax/Interest 1.482612258 0.75
Net profit [Net 0.01 0.01
margin profit/Net
sales] * 100 0.03 0.02
Return on [Net 1.39 2.245
asset profit/Total
asset] * 100 2.777195718 2.561891496
Return on [Net 0.08 0.13
equity profit/Net
sales] * 100 0.12 0.14

Page 5 of 21
 CROWN Cement Ratio Analysis
Ratio Name Formula 2017 2016 2015 2014
Current ratio Current asset/ 1.21 1.28
Current
Liability 1.45 1.66
Quick ratio Current asset- 1.09 1.16
Inventory /
current
liability 1.32 1.51
Inventory turn Cost of goods 7.99 9.22
over sold/
Inventory 9.49 10.74
Days sales [Accounts 34.93 0.00
Outstanding receivable/net
sales] * 360 5.50 40.09
Fixed asset Net 1.21 1.62
turnover sales/Total
fixed asset 1.92 1.96
Total asset Net 1.90 1.57
turnover sales/Total
asset 1.46 1.42
Debt to asset [Total 0.47 0.47
ratio Debt/Total
asset] * 100 0.44 0.39
Time interest Earnings 2.2220 5.0268
earned ratio before
interest and
tax/Interest 14.15329894 7.484759041
Net profit [Net 70.035 8.2542
margin profit/Net
sales] * 100 8.439740041 7.851307763
Return on [Net 3.6891 5.2561
asset profit/Total
asset] * 100 5.943325455 5.379431038
Return on [Net 0.09 0.11
equity profit/Net
sales] * 100 0.11 0.12

Page 6 of 21
 Industrial Average

Ratio Name 2017 2016 2015 2014

Current ratio 1.1323 1.11387 1.32475 1.472777
Quick ratio 0.99666 1.00709 1.10803 1.2615
Inventory turn
over
8.17016 9.29736 6.92382 8.5563
Days sales
Outstanding
65.4525 21.0526 39.7528 32.6313
Fixed asset
turnover
1.75505 1.57534 1.87243 1.29336
Total asset
turnover
1.41895 1.08961 1.25572 1.13306
Debt to asset ratio
0.64538 0.65022 0.61827 0.59655
Time interest
earned ratio
1.75 3.182 7.817955599 4.590941581
Net profit margin 35.084 4.8101 5.394728341 5.273115858
Return on asset 2.53955 3.75055 4.360260587 3.970661267
Return on equity 8.6169 11.97615 13.09658459 5.580095796

Comparison Among Analysis

Page 7 of 21
 Year 2017 2016 2015 2014
Company name Meghna CROW Meghna CROW Meghna CROW Meghna CROW
cement N cement N cement N cement N
Cement Cement Cement Cement
Current ratio
Lower Higher Lower Higher Lower Higher Lower Higher
Quick ratio
Lower Higher Lower Higher Lower Higher Lower Higher
Inventory turn over
Higher Lower higher lower Lower Higher Lower Higher
Days sales
Outstanding
Higher Lower Lower Higher Higher Lower Lower Higher
Fixed asset
turnover Higher Lower Higher Lower Higher Lower Higher Lower
Total asset turnover
Higher Lower Higher Lower Higher Lower Higher Lower
Debt to asset ratio
Higher Lower Higher Lower Higher Lower Higher Lower
Time interest
earned ratio
average average Higher Lower Lower Higher Lower Higher
Net profit margin
Lower Higher Lower Higher Lower Higher Lower Higher
Return on asset
Lower Higher Lower Higher Lower Higher Lower Higher
Return on equity
Lower Higher Higher Lower Higher Lower Lower Higher

CURRENT RATIO
The current ratio is a liquidity ratio that measures the extent to which a business has current
assets to pay its current liabilities.
Current Ratio

Page 8 of 21
 Year 2017 2016 2015 2014
Meghna 1.05 1.0655 1.290510563 1.198405126
Cement
CROWN 1.21092 1.28086 1.655035811 1.451089609
Cement
Industrial 1.13046 1.17318 1.472773187 1.324747368
Average

Current Ratio
1.8

1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
2017 2016 2015 2014

Meghna Cement CROWN Industry Average

Cement

In 2017 current ratio of Meghna Cement was 1.05 times, that means Meghna Cement had 1.05
taka current assets to pay its 1-taka current liabilities. From 2014 to 2017 we can see a
consistency of current ratio.
In 2017 the current ratio of CROWN Cement was 1.2 times, which means CROWN Cement had
1.2-taka current asset to pay its 1-taka liability. We can see the performance of paying the
liability of CROWN Cement is getting lower.

Page 9 of 21
QUICK RATIO
The quick ratio is a financial ratio used to gauge a company's liquidity. The quick ratio is also
known as acid test ratio. Quick ratio measures the extent to which a business has current assets to
pay its current liabilities excluding inventories.
Quick Ration
Year 2017 2016 2015 2014
Meghna 0.95 0.852 0.121593572 0.056339446
Cement
CROWN 1.09383 1.1621 1.512425995 1.315939249
Cement
Industrial
Average 1.021915 1.00705 0.817009784 0.686139348

Quick Ratio
1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
2017 2016 2015 2014

Meghna Cement CROWN Industry Average

Cement

In 2017 The quick Ratio of Meghna Cement was 0.95 times, which indicates the firm had .95
taka to pay its liability of 1 taka. Which is a poor performance. From the year 2014 to 2017 we
can see the firm is under perforCrownng than the industrial average.

In 2017 the quick ratio of CROWN Cement was 1.09 times, which means the firm had the ability
to pay 1.09 taka for 1-taka liability. Through 2014 to 2017 the firm was perforCrownng quite
good as per as the industrial average.
Page 10 of 21
Inventory Turnover
Inventory Turnover ratio shows how effectively the company is managing its inventory

I nventory Turn over

Year 2017 2016 2015 2014
Meghna 8.35 9.373 8.77606550 6.587056323
Cement
CROWN 7.98622 9.22106038 10.74453481 5.485130079
Cement
Industrial
Average 8.16811 9.29703019 5.760300156 5.036093201

Inventory Turnover
12

10

0
2017 2016 2015 2014

Meghna Cement CROWN Industry Average

Cement

In 2017, the inventory turnover ratio of Meghna cement was 8.35 times, which means the
inventory of the company turns into sales 8.35 times.

Page 11 of 21
On the other hand, CROWN cement had the capability to turn its inventory into sales 7.9 times in
2017
We can see both the firms doing good as per the industrial average, but Meghna cement is at the
top position.

Days Sales Outstanding

Days sales outstanding shows how many days the firms required to get its credit sales.

D ays Sales outstanding

Year 2017 2016 2015 2014
Meghna 96 42 65 74
Cement
CROWN 61.4268 42.5322 55.26962746 109.1036279
Cement
Industrial
Average 78.7134 42.31865 60.13481373 91.55181395

Days Sales Outstanding

120

100

80

60

40

20

0
2017 2016 2015 2014

Meghna Cement CROWN Industry Average

Cement

Page 12 of 21
Meghna Cement required 96 days to get the money from its receivable in the year 2017. In 2016
the firm was more efficient at this aspect.
Meghna cement required only 61 days to get its money form the receivable in the year 2017.
If we see the industrial average, we can say CROWN cement performed better than Meghna
Cement in this aspect.

Fixed Asset Turnover

How efficiently the fixed asset of a firm is turning into sales.

F ixed Asset Turnover

Year 2017 2016 2015 2014
Meghna 4.72 7.2877 4.980678307 4.163218058
Cement
CROWN 1.2450 1.6645 1.960432206 1.918744861
Cement
Industrial
Average 2.9825 4.4761 3.470555257 3.04098146

Page 13 of 21
 Fixed Asset Turnover
8

0
2017 2016 2015 2014

Meghna Cement CROWN Industry Average Column1

Cement

In 2017 Meghna cement had the capability to turn its fixed assets into sales 4.72 times.
On the other hand, CROWN cement had the ability to turn its fixed asset in to sales only 1.24
times. Which is a poor performance.
If we consider the industrial average we can say Meghna cement is perforCrownng very good
than CROWN cement.

Total Asset Turnover

Total asset turnover shows how efficiently the total asset of a firm are turning into sales.
T otal Asset Turnover
Year 2017 2016 2015 2014
Meghna 1.06 1.6425 1.181927928 0.950635915
Cement
CROWN 0.52679 0.6367 0.704207171 0.685163695
Cement
Industrial
Average 0.793395 1.1396 0.94306755 0.817899805

Page 14 of 21
 Total Asset Turnover
1.8

1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
2017 2016 2015 2014

Meghna Cement CROWN Industry Average

Cement

In 2017 Meghna Cement had the capability to turn its total asset in sales 1.06 times.
Where Crown cement could only turn its total assets into sales 0.52 times
By considering the industrial average we can say Meghna Cement is perforCrownng way more
batter than Crown Cement.

Debt to Asset ratio:

Debt to asset ratio shows how efficiently a company managing its debt.
Debt to Asset ratio
Year 2017 2016 2015 2014
Meghna 82.35 82.57 80.5933209 79.3483387
Cement

CROWN 60.3905 52.5070 49.9831826 51.2562226

Cement
Industrial
Average 71.37025 67.5385 65.2882518 65.3022807

Page 15 of 21
 Debt to Asset ratio
90

80

70

60

50

40

30

20

10

0
2017 2016 2015 2014

Meghna Cement CROWN Industry Average

Cement
In 2017, Meghna Cement had 82.35% debt of its asset.
Where Meghna Cement had only 60.39 debt of its asset.
As we can see in the Industrial average, CROWN Cement had the debt to asset ratio below the
industrial average, so we can say that CROWN Cement is perforCrownng way better than
Meghna Cement.

Time Interest Earned Ratio:

It shows how many times a company can provide their interest by using their earning before
interest and tax.

Time Interest Earned Ratio

Year 2017 2016 2015 2014
Meghna 1.3339 1.3372 1.482612258 1.697124121
Cement
CROWN 2.2220 5.0268 1.415329894 7.484759041

Page 16 of 21
 Cement
Industrial
Average 1.75 3.182 7.817955599 4.590941581

In 2017, Meghna Cement could pay its interest 1.3 times more by using its earning before
interest and tax
On the other hand, Crown Cement could pay its interest 2.2 times more by using its earnings
before interest and tax.
So, we can easily say CROWN Cement is perforCrownngbatter than Meghna Cement in time
interest eared ratio.

Net Profit Margin:

It calculates the profit earned for every 1-taka sales.
Net Profit
Margin
Year 2017 2016 2015 2014
Meghna 1.33 1.366 2.34971664 2.694923952
Cement
CROWN 7.035 8.2542 8.439740041 7.851307763
Cement
Industrial
Average 4.18 4.8101 5.394728341 5.273115858

Page 17 of 21
 Net Profit Margin
9

0
2017 2016 2015 2014

Meghna Cement CROWN Industry Average

Cement

In 2017 Meghna Cement had earned 1.33 taka for every 100 Taka sale.
At the same year CROWN Cement earned 7.03 taka for every 100 Taka sale.
In this aspect CROWN Cement is perforCrownng way more better than Meghna Cement.

Returned on Asset:
It indicates the income generated from every 1-taka asset.
Return on Asset
Year 2017 2016 2015 2014
Meghna 1.39 2.245 2.777195718 2.561891496
Cement
CROWN 3.6891 5.2561 5.943325455 5.379431038
Cement
Industrial
2.53955 3.75055 4.360260587 3.970661267
Page 18 of 21
 Average

Return on Asset
7

0
2017 2016 2015 2014

Meghna Cement CROWN Industrial Average

Cement

In 2017, Meghna Cement generated only 1.39-taka income for every 100-taka asset.
Where, CROWN Cement generated 3.68-taka income for every 100-taka asset.
Here CROWN Cement is perforCrownng better than Meghna cement as tier ratio is higher than
Meghna Cement.

Return on Equity:
It shows the income generated from every 1-taka equity.

Page 19 of 21
 Return on equity
Year 2017 2016 2015 2014
Meghna 7.92 12.8852 14.31051498 12.4052562
Cement
CROWN 9.3138 11.0671 11.8826542 11.03613903
Cement
Industrial
Average 8.6169 11.97615 13.09658459 5.580095796

Return on Equity
16
14
12
10
8
6
4
2
0
2017 2016 2015 2014

Meghna Cement CROWN Industrial Average

Cement

For every 100-taka equity Meghna Cement generated 7.92-taka income in the year of 2017.
Where asCROWNCement generated 9.31-taka income for every 100-taka equity
So, we can say that CROWN Cement is perforCrownng better than Meghna Cement as their ratio
is higher than Meghna Cement.

taka for every share for every 1-taka earnings.

As the industrial average, Meghna Cement is perforCrownng better than CROWN Cement.

Page 20 of 21
Recommendation:
It’s important for CROWN Cement to continue its consistent growth to perform more better in
the long run. For Meghna Cement to recover from the downsizing of growth rate, they need to
develop new strategic improvements

Conclusion:
CROWN Cement LiCrownted is a highly profitable company. Day by day it is becoCrownng
profitable. They are increasingly expanding business operations. They are able to manage
finance by taking long term or short term borrowing from financial institutions without any
financial difficulties. Ratios analysis gives a quick condition of financial position in several key
areas. And ratio analysis of CROWN Cement LiCrownted gives very good results as it shows
company is actively efficiently perforCrownng and has liquid cash to counter financial. The
analysis indicates that the firm is successful at maintaining its constant growth, growth of profit
margin, earning per share (EPS), and maintaining cash flow.
On the other hand, Meghna Cement Ltd. does not look bright in business as per as the calculated
Industrial average. No doubt that, CROWN Cement LiCrownted surpasses Meghna Cement Ltd.
Meghna Cement is just doing the average performance in days sales outstanding. But in
inventory turn over ratio the company is doing good in last 2017 and 2016. For investors its not
perforCrownng attractively in debt to asset ratio. It’s net profit margin is lower consistently. But
for last 2017 and 2016 the price earning ratio is perforCrownng well. So, we can say the overall
performance of Meghna Cement is volatile in comparison to CROWN Cement.

Page 21 of 21