Name: M.

Samiullah

Roll #: F20-22833

Date: 16th Nov 2020

Section: BBA 1-A

Assignment #: 03

MANAGEMENT SCIENCES

Submitted To: Mr. Hassan Javed

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 DECLARATION
I hereby declare that this report titled “The Ratio Analysis of Maple Leaf Cement Factory”
submitted by me to the Department of Management Sciences, National University Of Modern
Languages, Rawalpindi, is a bona fide work undertaken by me and it is not submitted to any
other university or institution for the award of any degree diploma/certificate or published
any time before.

______________

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Date of Submission:

Abstract

The purpose of this assignment is to analyze the calculations and most important to do the
analysis of financial ratios of the Maple Leaf Cement Factory (MLCF) of the last two years
(2014, 2015). Financial ratios leave a very important effect on the financial health of
businesses. To evaluate the financial performance of the company ratios can be used as a
measure or yardstick to check the performance over the number of year or times. In this
assignment, 11 types of ratios like profitability ratios, liquidity ratios, gearing ratios, activity
ratios, growth ratios, volatility ratios, financing ratios, coverage ratios, market ratios and
distress prediction model are calculated and then analysis are done on each of the group
separately.

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Acknowledgement

In the Name of Allah, The Most Gracious, The Most Merciful.

Praise be to God, the Cherisher and Sustainer of the worlds. All thanks to Almighty Allah,
The Lord of all that exist, who bestowed me with His greatest blessing i.e. knowledge and
Wisdom to accomplish my task successfully. Thousands of salutations and benedictions to
the Holy prophet Hazrat Muhammad (PBUH) the chosen-through by whom grace the sacred
Quran was descended from the Highest.

Our special thanks to our Project Supervisor Mr. Hassan Javed, Faculty of Department of
Management Sciences. Without his help and guidance, completion of this work would not
have been possible.

We are also thankful to our family specially our parent’s immense support and prayers on
each and every step of our life and without them, we are nothing at all. We are thankful to our
seniors and colleagues for their valuable cooperation.

GOD bless all for always being there to cheer and to guide.

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 Table of Contents
CHAPTER # 01: INTRODUCTION.....................................................................................................1
1.1 Introduction...........................................................................................................................1
1.1.1 Company Information....................................................................................................1
1.1.1.1 Board of Directors..................................................................................................1
1.1.1.2 Audit Committee....................................................................................................1
1.1.1.3 Human Resources & Remuneration Company.......................................................2
1.1.1.4 Auditors.................................................................................................................2
1.1.1.5 Legal Advisors.......................................................................................................2
1.2 Vision Statement....................................................................................................................2
1.3 Mission Statement.................................................................................................................2
1.4 Core Values...........................................................................................................................2
1.5 Organizational Hierarchal Chart............................................................................................3
1.6 Company Financial Highlights..............................................................................................4
1.7 Geographical Presence...........................................................................................................5
CHAPTER # 02: PROFITABILITY ISSUES.......................................................................................6
2.1 Profitability Ratios.................................................................................................................6
2.1.1 Gross Profit Margin.......................................................................................................6
2.1.2 Operating Profit Margin.................................................................................................6
2.1.3 Net Profit Margin...........................................................................................................6
2.1.4 Return on Assets............................................................................................................6
2.1.5 Return on Equity............................................................................................................6
2.1.6 Return on Capital Employed..........................................................................................6
2.2 Analysis.................................................................................................................................7
CHAPTER # 03: LIQUIDITY RATIOS...............................................................................................8
3.1 Liquidity Ratios.....................................................................................................................8
3.1.1 Current Ratio.................................................................................................................8
3.1.2 Quick Ratio....................................................................................................................8
3.1.3 Cash Ratio......................................................................................................................8
3.1.4 Working Capital Ratio...................................................................................................8
3.2 Analysis.................................................................................................................................8
CHAPTER # 04: GEARING RATIOS..................................................................................................9
4.1 Gearing Ratios.......................................................................................................................9
4.1.1 Debt-To-Equity Ratio....................................................................................................9

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 4.1.2 Debt-To-Asset Ratio......................................................................................................9
4.2 Analysis.................................................................................................................................9
CHAPTER # 05: MARKET RATIOS.................................................................................................10
5.1 Market Ratios.......................................................................................................................10
5.1.1 Dividend Yield Ratio...................................................................................................10
5.1.2 Dividend Payout Ratio.................................................................................................10
5.1.3 Retention Ratio............................................................................................................10
5.1.4 Interest Rate Yield.......................................................................................................10
5.2 Analysis...............................................................................................................................10
CHAPTER # 06: CONCLUSION.......................................................................................................11
6.1 Conclusion...........................................................................................................................11

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 List of Tables
Table 1: GP Margin...............................................................................................................................6
Table 2: OP Margin...............................................................................................................................6
Table 3: NP Margin...............................................................................................................................6
Table 4: ROA........................................................................................................................................6
Table 5: ROE.........................................................................................................................................6
Table 6: ROCE......................................................................................................................................6
Table 7: Current Ratio...........................................................................................................................8
Table 8: Quick Ratio..............................................................................................................................8
Table 9: Cash Ratio...............................................................................................................................8
Table 10: Working Capital Ratio...........................................................................................................8
Table 11: Debt-To-Equity Ratio............................................................................................................9
Table 12: Debt-To-Asset Ratio..............................................................................................................9
Table 13: Dividend Yield Ratio...........................................................................................................10
Table 14: Dividend Payout Ratio.........................................................................................................10
Table 15: Retention Ratio....................................................................................................................10
Table 16: Interest Rate Yield Ratio.....................................................................................................10

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 List of Figures
Figure 1: Hierarchal Chart.....................................................................................................................3
Figure 2: Financial Highlights...............................................................................................................4
Figure 3: Geographical Presence...........................................................................................................5

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 CHAPTER # 01: INTRODUCTION

1.1 Introduction

1.1.1 Company Information

1.1.1.1 Board of Directors

 Mr. Tariq Sayeed Saigol (Chairman)

 Mr. Sayeed Tariq Saigol (Chief Executive)
 Mr. Taufique Sayeed Saigol
 Mr. Waleed Tariq Saigol
 Mr. Danial Taufique Saigol
 Syed Mohsin Raza Naqvi
 Mr. Zamiruddin Azar
 Mr. Karim Hati

1.1.1.2 Audit Committee

 Mr. Zamiruddin Azar (Chairman)

 Mr. Waleed Tariq Saigol
 Mr. Danial Taufique Saigol
 Mr. Karim Hatim Member

1.1.1.3 Human Resources & Remuneration Company

 Mr. Waleed Tariq Saigol (Chairman)

 Mr. Zamiruddin Azar
 Mr. Danial Taufique Saigol

1.1.1.4 Auditors

KPMG Taseer Hadi & Co. (Chartered Accountants)

1.1.1.5 Legal Advisors

Mr. Shahid Ismail (Advocate High Court)

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1.2 Vision Statement
The Maple Leaf Cement Factory stated vision is to achieve and then remain as the most
progressive and profitable Company in Pakistan in terms of industry standards and
stakeholders’ interest.

1.3 Mission Statement

The Company shall achieve its vision through a continuous process of having sourced and
implemented the best leading-edge technology, industry best practice, and human resource
and by conducting its business professionally and efficiently with the responsibility to all its
stakeholders and community.

1.4 Core Values

Maple Leaf Cement is committed to be an ethical and a responsible member of the business
communities in which it operates. The Company always endeavors to ensure that highest
standards of honesty, integrity and ethics are maintained.

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1.5 Organizational Hierarchal Chart

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Figure 1: Hierarchal Chart

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1.6 Company Financial Highlights

Figure 2: Financial Highlights

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1.7 Geographical Presence

Figure 3: Geographical Presence

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 CHAPTER # 02: PROFITABILITY ISSUES

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2.1 Profitability Ratios
It tells us about the financial performance of a company

2.1.1 Gross Profit Margin

2014 2015
34.39 36.18%

Table 1: GP Margin

2.1.2 Operating Profit Margin

2014 2015
37.65% 37.91%

Table 2: OP Margin

2.1.3 Net Profit Margin

2014 2015
14.92% 16.67%

Table 3: NP Margin

2.1.4 Return on Assets

2014 2015
8.86% 11.06%

Table 4: ROA

2.1.5 Return on Equity

2014 2015
29.03% 26.75%

Table 5: ROE

2.1.6 Return on Capital Employed

2014 2015
16.47% 20.87%

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 Table 6: ROCE

2.2 Analysis
These ratios showing the operational efficiency of the Company as the margins are better
than last year. EBITDA margin to sales is higher and profits are higher which reflects better
performance owing to higher sales volume and lower cost.

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 CHAPTER # 03: LIQUIDITY RATIOS

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3.1 Liquidity Ratios
It tells us about the ability of a company to pay it short term debt obligations

3.1.1 Current Ratio

2014 2015
1.00 0.91

Table 7: Current Ratio

3.1.2 Quick Ratio

2014 2015
0.31 0.25

Table 8: Quick Ratio

3.1.3 Cash Ratio

2014 2015
0.03 0.03

Table 9: Cash Ratio

3.1.4 Working Capital Ratio

2014 2015
0.002 -0.08

Table 10: Working Capital Ratio

3.2 Analysis
Better operational results should have boosted these ratios but the impact was mitigated due
to an increase in current liabilities owing to current portion of debts. However, despite the
increase in current liabilities the ratios have remained stable and not too much declined which
again indicate better performance of the Company. However, working capital ratio has gone
to negative side that means company needs to employee more capital in business.

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 CHAPTER # 04: GEARING RATIOS

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4.1 Gearing Ratios
It tells us about the financial structure of a company

4.1.1 Debt-To-Equity Ratio

2014 2015
48:52 27:73

Table 11: Debt-To-Equity Ratio

4.1.2 Debt-To-Asset Ratio

2014 2015
76% 26%

Table 12: Debt-To-Asset Ratio

4.2 Analysis
These ratios shows that company is relying more on its equity financing as compared to last
year which means that company is in good financial position in this year. The debt to asset
ratio has declined in this year which means that company is facing some problems on their
assets side in balance sheet.

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 CHAPTER # 05: MARKET RATIOS

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5.1 Market Ratios
It tells us that how the investors value a company?

5.1.1 Dividend Yield Ratio

2014 2015
- 3%

Table 13: Dividend Yield Ratio

5.1.2 Dividend Payout Ratio

2014 2015
- 31%

Table 14: Dividend Payout Ratio

5.1.3 Retention Ratio

2014 2015
- 0.69

Table 15: Retention Ratio

5.1.4 Interest Rate Yield

2014 2015
- -

Table 16: Interest Rate Yield Ratio

5.2 Analysis
These ratios showing that as compared to the previous year company, is in good financial
health because of its dividend yield ratio. Dividend payout ratio is also increased in this
because in previous year, company was in this position to pay out the dividend. So both of
these ratio has also putt the impact on retention ratio.

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 CHAPTER # 06: CONCLUSION

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6.1 Conclusion
At the end we can conclude that if we look on the ratios of company then the profitability of
firm is greater as compared to the last year. Liquidity of firm has decreased but still the
company is in stable financial position. Activity ratios are also showing a positive impact on
the performance of company but growth ratio has gone on decreasing in terms of total assets
and fixed assets. In market ratio dividend yield & payout ratios are also giving positive
signals about the financial health of company. Financing ratios are showing that company in
this year, has less dependence on debt and more on equity. Valuation ratio also showing the
good financial position of company in term s of P/E ratio and market to book ratio. The Z
score was more in previous year but now less in this year.

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