DEWAN CEMENT

INDUSTRY RATIO
ANALYSIS
PRESENTATION BY: MUHAMMAD USAMA
24078
INTRODUCTION

• Dewan Cement Ltd. (DCL) is an ISO 9001:2008 certified company, and a name of trust in the production of
high-quality cement. DCL has a capacity of more than 2,880,000 tons per annum from two separate
manufacturing units, comprising of Pakland Cement Ltd., and Saadi Cement Ltd.

Pakland Cement Ltd. was established in 1981 at Deh Dhando in District Malir, Karachi, 44 kilometers off the
National Highway, encompassing an area of 150 acres. Within one year, an integrated plant with an initial
capacity of 300,000 TPA was up and running and it was fully operational by 1985, producing superior Ordinary
Portland Cement. In 1987, Sulphate Resisting Pakland, a pioneer product in the private sector, was introduced.
Supported by the latest technology and intensive machinery, the market size of the product rose in a short span of
time, resulting in a clinker production capacity of up to 750,000 TPA. Subsequently, Pakland Blast Furnace Slag
Cement was included in the company’s fold. The company is listed on the Karachi and Lahore Stock Exchange
PLANT AND PRODUCTION

The two units are Located at:

• Deh Dhando, district Malir, Karachi, 44th km of National Highway (formerly Pakland
Cement Ltd. with 5,700 TPD production capacity).

• Kamilpur, near Hattar in Khyber Pakhtunkhwa (formerly Saadi Cement Ltd. with 3,800
TPD production capacity).
PLANT AND PRODUCTS
DUO-PONT ANALYSIS
RATIO 2018 2017

Profit Margin 10.923 10.159

Assets T.O. 46.774 42.475

Equity Multiplier 2.642 3.077

Return on Equity 13.497 13.275

COMMENTS ON DUO-PONT

• Profit margin decreases which indicates a increase in CoGS, the reasons might be inefficient use of
Labor and Capital.
• Assets T.O. decreases which means that there is a decrease in Total Assets. Lower ratios mean that the
company isn't using its assets efficiently and most likely have management or production problems.
• A higher equity multiplier number indicates that the debt portion of total assets is increasing which
translates to more financial leverage for the company
• ROE falls which indicates the company ability to generate Profits also decreases. This Factor can also
be indicated through decrease in Assets Turnover.
FINANCIAL RATIOS
RATIOS FORMULA 2017 2018

Inventory turnover COGS/Avg inventory 14.8 times 13.71 times

Inventory turnover days (Avg inventory/COGS) 365 days 25 days 27 days

Payables turnover COGS/Avg payables 6.02 times 6.49 times

Payables turnover days (Avg payables/COGS) 365 days 61 days 56 days

Receivables turnover Sales/Avg receivables 52.37times 45.88times

Receivables turnover days (Avg receivables/sales) 365 days 7 days 8 days

Debt to assets ratio Total Debt/Total Assets 0.28: 1 0.25: 1

Working capital turnover Sales/Working capital -5.74 -6.78

Interest coverage EBIT/Interest expense 62.38 58.26

LTD to equity ratio LTD/Equity 0.34: 1 0.30: 1

Net profit margin (Net Income/Sales) 100 10% 7%

COMMENTS

• Inventory turnover
Inventory turnover decreases which means that Dewan cement is holding more stock and the DSO increases which
also indicates that The duration to convert inventory into sales is Less Frequent. Since Inventory turnover has
decreased by 1.10% which indicates weak sales and overstocking. 
• Accounts Payable Ratio

Accounts payable increases which means that Dewan Cement is paying off Short term debts more frequently as days
in payable decreases from 5 days. 
• Debt to Assets Ratio: 
Lower Debt to assets Ratio Indicates that company is stable with Lower proportion of liabilities. More Over
Operational risk is lower.
COMMENTS CONT.

• Receivable Turnover:
This indicates that Sales has increased from a greater proportion and Total Assets have decreased by 6.6%. So, there is a
decrease in A/R Turnover. 
• Working Capital Ratio:
Negative Working capital Indicates that current liabilities have exceed the current assets. It means that company has Massive
Depreciation and Amortization. 
• Interest Coverage Ratio:

Interest coverage Ratio Increased which means that There is a Less debt burden on firm. 
• LTD to Equity 
Decrease in LTD to equity Ratio Indicates that company is less risky financially.
THANK
YOU!!!!!