GROUP 20

PREMIER CEMENT MILLS LTD

FINANCIAL ANALYSIS

MEASURING OVERALL PROFITABILITY OF

PCML

Formul
a
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15

1. Return on
Equity
(ROE)

2. Return on
Assets
(ROA)

3. Operating
ROA

18.07%
29.32%
09.19%
15.51%
15.40%
12.03%

9.43%
14.57%
3.43%
5.88%
5.19%
4.05%

14.05%
17.88%
5.63%
10.01%
8.43%
7.74%

MEASURING OVERALL PROFITABILITY OF

PCML
Measuring Overall Profitability

ROE

29.32%

ROA
Operating
ROA

18.07%

17.88%
14.05%

15.51%

14.57%

9.43%

9.19%
5.63%
3.43%

2009-10

2010-11

2011-12

15.40%
10.01%

12.03%
8.43%

5.88%

5.19%

2012-13

2013-14

7.74%
4.05%

2014-15

Interpretation:
Overall profitability ratio of PCML are fluctuating over the year as we can see ROE ratio
is 18.07% in the year 2009-10 but it decrease to 7.78% in year 2014-15. ROA and
Operating ROA are also fluctuating over the year like ROE.

ASSESSING OPERATING MANAGEMENT OF PCML

1. Gross
Profit
Margin

2. NOPAT
Margin

21.67%
18.09%
12.56%
17.98%
17.19%
15.30%

11.46%
19.02%
7.09%
10.52%
9.80%
8.65%

3. EBITDA
Margin

4. Net
Income
Margin

21.99%
17.00%
14.92%
20.89%
17.87%
15.59%

9.51%
17.57%
4.94%
7.78%
6.75%
5.05%

Formula
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15

ASSESSING OPERATING MANAGEMENT OF

PCML
Assessing Operating Management of pcml

25.00%
21.67% 21.99%
20.00%

20.89%
19.02%
18.09%
17.57%
17.00%

17.98%

15.30% 15.59%

12.56%

11.46%

10.52%

9.51%

9.80%
7.78%

7.09%

8.65%
6.75%
5.05%

4.94%

5.00%

0.00%

17.87%

14.92%

15.00%

10.00%

17.19%

2009-10

2010-11

Gross Profit Margin

2011-12
NOPAT Margin

2012-13

EBITDA Margin

2013-14

Net Income Margin

2014-15

ASSESSING OPERATING MANAGEMENT OF

PCML
Interpretation:
Gross profit, NOPAT, EBITDA & Net income margin are the key ratio for
assessing operating management of PCML. This ratio shows
fluctuating over the year. In 2009-10 Gross profit margin and EBITDA
margin are 21.67% & 21.99% respectively but it decrease to 15.30%
& 15.59% respectively while shows ups and down in middle year.
Similar trends are also shown by NOPAT & Net income margin.

WORKING CAPITAL MANAGEMENT OF PCML

1. Operating
Working Capital
to Sales Ratio

2. Operating
Working Capital
Turnover

3. Account
Receivable
Turnover

29.60%
47.53%
42.15%
28.60%
42.41%
43.23%

3.38
2.10
2.37
3.50
2.36
2.31

5.40
7.00
6.62
6.06
5.70
5.82

Formul
a
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15

WORKING CAPITAL MANAGEMENT OF PCML

47.53%

50.00%

42.15%

42.41%

43.23%

2013-14

2014-15

40.00%
30.00%

29.60%

28.60%

Operating
Working Capital
to Sales Ratio

20.00%
10.00%
0.00%

8
7
6
5
4
3
2
1
0

2009-10

2010-11

2011-12

2012-13

6.62

5.4
3.5

3.38

2009-10

2.1

2.37

2010-11

2011-12

2012-13

6.83

6.67

6.06

2013-14

3.06

2014-15

Operating
Working
Capital
Turnover

WORKING CAPITAL MANAGEMENT OF PCML

4. Inventory Turnover

5. Account Payable
Turnover

6.81
4.07
7.15
6.67
4.87
5.26

15.88
17.05
13.65
6.46
22.33
19.61

Formula
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15

WORKING CAPITAL MANAGEMENT PCML

Working Capital Management
25
22.33
19.61

20
17.05

15.88
15

13.65

10
7.15

6.81
4.07

6.67 6.46

2009-10

2010-11

2011-12

Inventory Turnover

2012-13

4.87

5.26

2013-14

2014-15

Account Payable Turnover

WORKING CAPITAL MANAGEMENT OF PCML

6. Days
Receivables

7. Days Inventory

8. Days Payables

66.64
51.41
54.34
59.36
63.13
61.83

52.86
88.39
50.32
54.01
73.93
68.43

22.68
21.12
26.37
55.69
16.12
18.36

Formula
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15

WORKING CAPITAL MANAGEMENT PCML

Working Capital Management
100
88.39

90
80
70
60

73.93
66.64
52.86

50

54.34
50.32

51.41

59.36
54.0155.69

63.13

68.43
61.83

40
30

22.68

20

26.37

21.12

16.12

18.36

10
0

2009-10

2010-11

2011-12

Days Receivables

2012-13

Days Inventory

2013-14

Days Payables

2014-15

WORKING CAPITAL MANAGEMENT OF PCML

Interpretation
Company's operating working capital to sale ratio is 29.60% in year
2009-10 and increase to 43.23% in year 2014-15.
Company operating capital turnover and inventory turnover increases
over the year while company's account receivable turnover and
account payable turnover decreasing over the year.
PCMLs days receivable & days payable ratio are improving over the
year as number of days reduce from 66.64 and 22.68 days in year
2009-10 to 61.83 and 18.36 days in year 2014-15 respectively. Its
shows company's efficiency to collect account receivable and clear
account payable. Meanwhile days inventory shows fluctuation over
the year.

LONG TERM ASSET MANAGEMENT OF PCML

1. Net Long Term Asset
Turnover

2. PP&E Turnover

1.93
1.70
1.20
1.31
1.35

3.48
1.95
2.10
1.25
1.38

1.46

1.38

Formula
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15

LONG TERM ASSET MANAGEMENT OF PCML

4
3.5
3
2.5
2
1.5
1
0.5
0

Long Term Asset Management

3.48

1.93

2009-10

1.7

2.1

1.95

2010-11

1.2

1.31 1.25

1.35 1.38

1.46 1.38

2011-12

2012-13

2013-14

2014-15

Net Long Term Asset Turnover

PP&E Turnover

Interpretation:
Company's Net-long term asset turnover and PP&E turnover ratio are
decreasing over the year. Net-long term asset turnover and PP&E
turnover ratio in 2009-10 was 1.93 and 3.48 respectively and its fall
down to 1.46 and 1.38 in year 2014-15 respectively.

CURRENT LIABILITY & SHORT TERM

LIQUIDITY OF PCML

Formul
a
200910
201011
201112
2012-

1. Current
Ratio

2. Quick Ratio

3. Cash
Ratio

4. Operating
Cash flow
Ratio

1.03

0.48

0.07

0.07

1.02

0.30

0.04

-0.14

0.69

0.23

0.04

0.11

CURRENT LIABILITY & SHORT TERM

LIQUIDITY OF PCML
Current Liability & Short Term Liquidity

1.2
1.03

1.02

1
0.87
0.8

0.77

0.75

0.69

0.6
0.48
0.4

0.34

0.3
0.23

0.21

0.2
0.070.07
0
-0.2

2009-10

0.32

0.29

0.11
0.04

0.04

2010-11

2011-12

0.09

2012-13

0.030.01

2013-14

-0.14

Current Ratio

Quick Ratio

Cash Ratio

Operating Cash flow Ratio

0.03

0.08

2014-15

CURRENT LIABILITY & SHORT TERM

LIQUIDITY OF PCML
Interpretation
Company's liquidity analysis can be done through current ratio, quick
ratio, cash ratio and operating cash flow ratio. Company's current ratio
in 2009-10 was 1.03 and it fall down to 0.69 in 2011-12. But it again
raise to 0.87 in year 2014-15.
Quick ratio and Cash ratio are fluctuating as it shows ups and down
trends over the year.
Company's Operating cash flow ratio increase to 0.08 from 0.07 over the
year.

DEBT & LONG TERM SOLVENCY OF PCML

Formul
a
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15

1. Liabilities
to Equity
Ratio

2. Debt to
Equity Ratio

0.92
1.01
1.68
1.64
1.97
1.97

0.61
0.82
1.40
1.22
1.69
1.71

3. Net Debt to Equity

Ratio

0.55
0.77
1.34
1.10
1.65
1.66

DEBT & LONG TERM SOLVENCY OF PCML

Debt & Long Term Solvency
2.5
1.97

2
1.68
1.5

1.69 1.65

1.64
1.4

1.34

1.22

1.01

0.92

1.97
1.71 1.66

1.1

0.82 0.77
0.61 0.55

0.5

2009-10

2010-11

Liabilities to Equity Ratio

2011-12

2012-13

Debt to Equity Ratio

2013-14
Net Debt to Equity Ratio

2014-15

DEBT & LONG TERM SOLVENCY OF PCML

Formul
a
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15

4. Debt to Capital Ratio

5. Net Debt to Net Capital

Ratio

0.38
0.45
0.58
0.55
0.63
0.63

0.35
0.44
0.57
0.52
0.62
0.62

DEBT & LONG TERM SOLVENCY OF PCML

Debt & Long Term Solvency
0.7
0.58 0.57

0.6
0.5
0.4

0.55

0.63 0.62

0.63 0.62

2013-14

2014-15

0.52

0.45 0.44
0.38

0.35

0.3
0.2
0.1
0

2009-10

2010-11

2011-12

Debt to Capital Ratio

2012-13

Net Debt to Net Capital Ratio

DEBT & LONG TERM SOLVENCY OF PCML

6. Interest
Coverage(Earning Basis)

7. Interest
Coverage(Cash Flow
Basis)

6.82
11.45
3.84
3.54
3.00
2.05

4.84
4.46
6.40
5.65
4.20
4.21

Formula
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15

DEBT & LONG TERM SOLVENCY OF PCML

Debt & Long Term Solvency
14
11.45

12
10
8
6

6.82

6.4
4.84

4.46

3.84

5.65
3.54

3
2.05

2
0

4.21

4.2

2009-10

2010-11

2011-12

Interest Coverage(Earning Basis)

2012-13

2013-14

Interest Coverage(Cash Flow Basis)

2014-15

DEBT & LONG TERM SOLVENCY OF PCML

Interpretation
Liabilities to equity ratio, Debt to equity ratio and Net debt to equity
ratio of PCML are increasing over the year. In 2009-10 these ratio are
0.92, 0.61 and 0.55 respectively but in 2014-15 its increased to
1.97,1.17 and 1.66 respectively.
In 2009-10 company's debt to capital ratio and net debt to capital
ratio were 0.38 and 0.35 respectively. It increases to 0.63 and 0.62
respectively in 2014-15.
Interest coverage ( earning basis ) and interest coverage ( Cash flow
basis) both shows fluctuation over the year.

ASSESSING SUSTAINABLE GROWTH RATE OF

PCML
1. Sustainable Growth
Rate

2. Dividend Payout Ratio

16.97%
29.32%
9.19%
15.51%
3.96%
2.69%

6.10%
0.00%
0.00%
0.00%
74.28%
77.61%

Formula
2009-10
2010-11
2011-12
2012-13
2013-14
2014-15

ASSESSING SUSTAINABLE GROWTH RATE OF

PCML
Assessing Sustainable Growth Rate
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%

74.28%

16.97%
6.10%

2009-10

29.32%
9.19%
0.00%
2010-11

0.00%
2011-12

Sustainable Growth Rate

15.51%
0.00%
2012-13

3.96%

2013-14

77.61%

2.69%

2014-15

Dividend Payout Ratio

Interpretation:
Company sustainable growth continuously falling down. PCML provide
divided in last two years. In 2010-11 to 2012-13 they didnt provide
any dividend so that these years dividend payout ratio is 0% for PCML.
In year 2009-10 PCMLs sustainable growth rate was 16.97% but it drop
to 2.69% in 2014-15. Last two years sustainable growth shows lower
percentage because of dividend payout ratio as company provide