ADVANCED FINANCIAL MANAGEMENT

FINAL PROJECT
COMPANY: LUCKY CEMENT

GROUP MEMBERS
EMAAN DAWOOD (F20BA109)

MARYAM ZAKA (F20BA110)

ZARMEEN ABRAR (F20BA124)

KINZA IQBAL (F20BB006)

SUBMITTED TO: DR HIRA AFTAB

LIQUIDITY RATIOS
CURRENT RATIO

Current Ratio Of Base Year (2017) = 4.48

2018
As compare to the base year (2017) the company's current ratio is 2.82 which means the
company is not paying its immediate debt and its current assets are not liquidated as well.

2019
As compare to the base year (2017) the company's current ratio is 1.42 which means the
company is not paying its immediate debt and its current assets are not liquidated as well.

2020
As compare to the base year (2017) the company's current ratio is 0.98 which means the
company is not paying its immediate debt and its current assets are not liquidated as well.

2021
As compare to the base year (2017) the company's current ratio is 1.34 which means the
company is not paying its immediate debt and its current assets are not liquidated as well.

QUICK RATIO

Quick Ratio Of Base Year (2017) = 3.91

2018
As compare to base year (2017) the company's quick ratio is 2.31 which means the company
has not sufficient liquid assets to meet its short term obligations without relying on the sale of
inventories.

2019
As compare to base year (2017) the company's quick ratio is 1.42 which means the company
has not sufficient liquid assets to meet its short term obligations without relying on the sale of
inventories.
2020
As compare to base year (2017) the company's quick ratio is 0.75 which means the company
has not sufficient liquid assets to meet its short term obligations without relying on the sale of
inventories.

2021
As compare to base year (2017) the company's quick ratio is 0.99 which means the company
has not sufficient liquid assets to meet its short term obligations without relying on the sale of
inventories.

ASSET MANAGEMENT RATIOS

INVENTORY TURNOVER RATIO

Inventory Turnover Ratio Of Base Year (2017) = 7.75

2018
As compared to base year (2017) the company's inventory turnover ratio is 6.11 which means
the company is holding too much inventory and its sales are weak. The company has poor
inventory management policies and procedures.

2019
As compared to base year (2017) the company's inventory turnover ratio is 7.05 which means
the company is holding too much inventory and its sales are weak. The company has poor
inventory management policies and procedures.

2020
As compared to base year (2017) the company's inventory turnover ratio is 6.42 which means
the company is holding too much inventory and its sales are weak. The company has poor
inventory management policies and procedures.

2021
As compared to base year (2017) the company's inventory turnover ratio is 5.98 which means
the company is holding too much inventory and its sales are weak. The company has poor
inventory management policies and procedures.

DAYS SALES OUTSTANDING

Days Sales Outstanding Of Base Year (2017) = 9.87

2018
As compare to base year (2017) the company's days sales outstanding is 10.07 which means the
company is taking longer time to collect its receivables from customer which results in a cash
flow problem.

2019
As compare to base year (2017) the company's days sales outstanding is 16.19 which means the
company is taking longer time to collect its receivables from customer which results in a cash
flow problem.

2020
As compare to base year (2017) the company's days sales outstanding is 31.99 which means the
company is taking longer time to collect its receivables from customer which results in a cash
flow problem.

2021
As compare to base year (2017) the company's days sales outstanding is 21.40 which means the
company is taking longer time to collect its receivables from customer which results in a cash
flow problem.

FIXED ASSET TURNOVER RATIO

Fixed Asset Turnover Ratio Of Base Year (2017) = 1.22

2018
As compare to base year (2017) the company's fixed asset turnover ratio is 1.16 which means a
company is over-invested in fixed assets. The company has not effectively used its fixed asset to
generate sales.

2019
As compare to base year (2017) the company's fixed asset turnover ratio is 0.84 which means a
company is over-invested in fixed assets. The company has not effectively used its fixed asset to
generate sales.

2020
As compare to base year (2017) the company's fixed asset turnover ratio is 0.69 which means a
company is over-invested in fixed assets. The company has not effectively used its fixed asset to
generate sales.
2021
As compare to base year (2017) the company's fixed asset turnover ratio is 1.01 which means a
company is over-invested in fixed assets. The company has not effectively used its fixed asset to
generate sales.

TOTAL ASSET TURNOVER RATIO

Total Asset Turnover Ratio Of Base Year (2017) = 0.47

2018
As compare to base year (2017) the company's total asset turnover ratio is 0.44 which means
the company has not effectively used its total assets to generate desired revenue.

2019
As compare to base year (2017) the company's total asset turnover ratio is 0.38 which means
the company has not effectively used its total assets to generate desired revenue.

2020
As compare to base year (2017) the company's total asset turnover ratio is 0.31 which means
the company has not effectively used its total assets to generate desired revenue.

2021
As compare to base year (2017) the company's total asset turnover ratio is 0.40 which means
the company has not effectively used its total assets to generate desired revenue.

DEBT MANAGEMENT RATIOS

DEBT RATIO

Debt Ratio of Base Year (2017) = 0.18

2018
As compare to base year (2017) the company's debt ratio is 0.21 which means most of the
company's assets are financed through debt.

2019
As compare to base year (2017) the company's debt ratio is 0.25 which means most of the
company's assets are financed through debt.
2020
As compare to base year (2017) the company's debt ratio is 0.27 which means most of the
company's assets are financed through debt.

2021
As compare to base year (2017) the company's debt ratio is 0.28 which means most of the
company's assets are financed through debt.

PROFITABILITY RATIOS
OPERATING MARGIN

Operating Margin Of Base Year (2017) = 0.41

2018
As compare to base year (2017) the company's operating margin is 0.29 which means the
company’s operating cost is too high and it is not generating enough operating income from its
sales.

2019
As compare to base year (2017) the company's operating margin is 0.21 which means the
company’s operating cost is too and it is not generating enough operating income from its
sales.

2020
As compare to base year (2017) the company's operating margin is 0.03 which means the
company’s operating cost is too high and it is not generating enough operating income from its
sales.

2021
As compare to base year (2017) the company's operating margin is 0.20 which means the
company’s operating cost is too and it is not generating enough operating income from its
sales.
PROFIT MARGIN

Profit Margin of Base Year (2017) = 0.30

2018
As compare to base year (2017) the company's profit margin is 0.25 which means that profit
margin ratio is negatively impacted by high use of operating cost and debt.

2019
As compare to base year (2017) the company's profit margin is 022 which means that profit
margin ratio is negatively impacted by high use of operating cost and debt.

2020
As compare to base year (2017) the company's profit margin is 0.08 which means that profit
margin ratio is negatively impacted by high use of operating cost and debt.

2021
As compare to base year (2017) the company's profit margin is 0.22 which means that profit
margin ratio is negatively impacted by high use of operating cost and debt.

BASIC EARNING POWER RATIO

Basic Earning Power ratio Of Base Year (2017) = 0.19

2018
As compare to base year (2017) the company's basic earning power ratio is 0.13 which means
the company is not generating income from its assets effectively.

2019
As compare to base year (2017) the company's basic earning power ratio is 0.08 which means
the company is not generating income from its assets effectively.

2020
As compare to base year (2017) the company's basic earning power ratio is 0.01 which means
the company is not generating income from its assets effectively.
2021
As compare to base year (2017) the company's basic earning power ratio is 0.08 which means
the company is not generating income from its assets effectively.

RETURN ON TOTAL ASSETS

Return on Total Assets Of Base Year (2017) = 0.14

2018
As compare to base year (2017) the company's return on total assets is 0.11 which means the
company might have made poor capital investment decisions and is not generating enough
profit to justify the cost of purchasing those assets.

2019
As compare to base year (2017) the company's return on total assets is 0.08 which means the
company might have made poor capital investment decisions and is not generating enough
profit to justify the cost of purchasing those assets.

2020
As compare to base year (2017) the company's return on total assets is 0.03 which means the
company might have made poor capital investment decisions and is not generating enough
profit to justify the cost of purchasing those assets.

2021
As compare to base year (2017) the company's return on total assets is 0.09 which means the
company might have made poor capital investment decisions and is not generating enough
profit to justify the cost of purchasing those assets.

RETURN ON COMMON EQUITY

Return On Common Equity of Base Year (2017) = 0.17

2018
As compare to base year (2017) the company's return on common equity is 0.14 which means
the company has not efficiently uses its shareholder’s equity to generate income.

2019
As compare to base year (2017) the company's return on common equity is 0.11 which means
the company has not efficiently uses its shareholder’s equity to generate income.
2020
As compare to base year (2017) the company's return on common equity is 0.04 which means
the company has not efficiently uses its shareholder’s equity to generate income.

2021
As compare to base year (2017) the company's return on common equity is 0.12 which means
the company has not efficiently uses its shareholder’s equity to generate income.