Course: Financial Accounting PAF-KIET

1. FINANCIAL ACCOUNTING
2012
RATIO ANALYSIS
Attock Cement
Shahzeb Pirzada
5701
Submitted to,
Arsalan Hashmi

2. 2 | P a g e
ATTOCK CEMENT
PROFILE
Attock Cement Pakistan Limited (ACPL) is a public limited company, listed on the Karachi Stock
Exchange since June 2002. Main business of the company is manufacturing and sales of cement.
ACPL is part of the Pharaon Group, which in addition to investment in cement industry has
diversified stakes in Pakistan mainly in the oil and gas sector, power and real estate sector.
CORPORATE PROFILE
ACPL is a member of Pharaon Group of Companies operating in Pakistan. ACPL's project was
conceived in 1981. The project is a Pak-Saudi venture and has involved an initial capital outlay
of around Rs.1.5 billion with a foreign exchange component of around US$ 45 million. ACPL's
manufacturing plant is located in Tehsil Hub, District Lasbela, Balauchistan, at a distance of
about 45 kilometers north west of Karachi. ACPL has attained ISO 9001:2000 and ISO 14000
certifications from Lloyds Register Quality Assurance (LRQA) in 2002 and 2006. ACPL is making
substantial contribution to the country's economy and deposited over Rs.2, 646 million (US$
31.5 million) in the form of Excise Duty, Sales Tax, Royalty and Income Tax during the year
2008-2009.
The Plant's original capacity was 2000 TPD of Clinker and it was the first plant in the country to
be based on the latest SUSPENSION, PRE-HEATER/PRE-CALCINATION, dry process technology
which results in substantial savings in fuel and energy costs besides balanced plant operations.
With continuous growth in cement demand both in local and regional markets, the company
put up another line of 3,300 TPD of clinker in 2006-2007 at a total investment of US $ 61
million. With this additional line the total clinker capacity of the company has reached
1,710,000 MT of clinker per annum.
“The cement manufactured and being marketed under the “FALCON” brand is of the highest
standard and truly the market leader.”
GROUP PROFILE

3. 3 | P a g e
Pharaon Group's sponsor is Dr. Ghaith R. Pharaon, International Investor and Industrialist who,
apart from his financial and trading interests in other parts of the world, has substantial
investments in Pakistan over the past several years through Pharaon group of companies in the
Cement, Oil and Gas sectors. A competent, motivated and commited team of highly skilled and
experienced professionals manages Pharaon Group Companies. Following is the overview of
the group companies headed by the Pharaon group:
Products:
The main product of the Company is ORDINARY PORTLAND CEMENT (OPC) but in addition to
this ACPL also produces SULPHATE RESISTANT CEMENT (SRC) and PORTLAND BLAST FURNACE
CEMENT (PBFC), which sells under the registered brand name of “FALCON CEMENT” in the
market. The SRC is special cement, which is resistant to attack of sulphate salts, which are
present in the soil in the coastal and other saline areas. The PBFC is also mildly resistant to
sulphate attack, but their important characteristic is low heat of hydration. It is used where
massive concrete is involved.

4. 4 | P a g e
Vision:
To be the leading organization, continuously providing high quality cement, excelling in every
aspect of its business and to remain the market leader in the cement industry.
Mission:
To be a premier and reputable cement manufacturing company dedicated to become industry
leader by producing quality products, providing excellent services, enhancing customer
satisfaction and maximizing shareholder's value through professionalism and dedicated team
work.
CORPORATE SOCIAL RESPONSIBILITY
The Company continued to strongly support the uplift of the local community, as they are an
integral part of it. Basic education facilities, medical treatment and availability of clean drinking
water to the masses are the few top priorities of the Company. Presently, we are successfully
running a school in Sakran where children of workers and nearby villages are getting free
education. Moreover, with the cooperation of local administration, we are planning to upgrade
the existing school in Hub, having all required facilities. Sensing the dire need for availability of
medical facilities for the deserving, the Company regularly arranges free medical camps for the
locality where treatment and medication is provided free of cost. During the year three medical
camps were arranged where nearby villagers and Company workers' families were given free
treatment. Additionally, the Company embarked upon and awareness program me on Hepatitis
‘B' & ‘C' for the local residents of nearby Goths. The Company provides transport in emergency
and financial help to the downtrodden nearby villagers on a regular basis.

5. The Company currently operates a Primary level school that imparts education to children of
both plant employees and also those from neighboring villages.
The Company has also signed a Memorandum of Understanding with The Citizen Foundation
(TCF) a non-profit organization for the construction of TCF primary and secondary school
located near to factory premises, which is close proximity to the surrounding villages. The total
cost of this project would be around Rs. 40 million. This school would comprise of 2 units
primary portion and 2 units secondary portion. The structure of the primary school bu
been completed and the progress of the project is on track as per the schedule. The school
would commence its academic activities from April 2010. With the completion of this school at
least 1000 children of this area will get quality education
CALCULATION FORMULAE:
1) Account Receivable Turnover:
2) Working Capital:
3) Current Ratios:
The Company currently operates a Primary level school that imparts education to children of
both plant employees and also those from neighboring villages.
The Company has also signed a Memorandum of Understanding with The Citizen Foundation
profit organization for the construction of TCF primary and secondary school
ctory premises, which is close proximity to the surrounding villages. The total
cost of this project would be around Rs. 40 million. This school would comprise of 2 units
primary portion and 2 units secondary portion. The structure of the primary school bu
been completed and the progress of the project is on track as per the schedule. The school
would commence its academic activities from April 2010. With the completion of this school at
least 1000 children of this area will get quality education free of cost.
CALCULATION FORMULAE:
Account Receivable Turnover:
5 | P a g e
The Company currently operates a Primary level school that imparts education to children of
The Company has also signed a Memorandum of Understanding with The Citizen Foundation
profit organization for the construction of TCF primary and secondary school
ctory premises, which is close proximity to the surrounding villages. The total
cost of this project would be around Rs. 40 million. This school would comprise of 2 units
primary portion and 2 units secondary portion. The structure of the primary school building has
been completed and the progress of the project is on track as per the schedule. The school
would commence its academic activities from April 2010. With the completion of this school at-

6. 4) Quick Ratio:
5) Return Of Equity:
6 | P a g e

7. 7 | P a g e
ATTOCK CEMENT
Year
2004
Year
2005
Year
2006
Year
2007
Year
2008
18 Sales 3731994 5351341 4614728 14120847 16608413
19 Cost of Sales 3210524 4810589 4104409 12776676 15044640
20 Operating Expenses 232161 253205 279191 -445270 -580830
21 Interest Expenses 86967 300830 183130 -68050 -269337
22 Other Expenses 121386 173293 102501 -63399 -60772
23 Other Income 29127 44306 61843 171513 150681
24 Taxes 83085 32446 23845 -308509 -249924
25 Net Income 126998 -109824 -16505 630456 553591
1 Cash 78975 146292 100579 1432363 919623
2 Inventory 1012679 725690 1051835 1567530 1580925
3 Receivable 32047 29200 26200 343704 283552
4 Other Current Assets 801123 1161318 1111784 822314 1580686
5 Total Current Assets[ Sum of 1+2+3+4] 1924824 2062500 2290398 4165911 4364786
6 Fixed Assets 1468575 1903739 1718818 1925417 3671859
7 Total Assets [Sum of 5+6] 3393399 3966239 4009216 6091328 8036645
8 Account Payables 708207 754365 701231 2347211 2770966
9 Current Maturity of Long Term Liabilities 122950 255801 246422 231981 465829
10 Other Current Liabilities 637671 1373166 1301899 304366 155275
11 Total Current liabilities [Sum of 8+9+10] 1468828 2383332 2249552 2883558 3392070
12 Long Term Liabilities 629274 470563 537496 1129537 1668754
13 Number of Shares 750000 750000 750000 400000
14 Share Capital 597713 597713 597713 255460 411291
15 Retained Earnings 697584 514631 624455 1822773 2564530
16 Total Book Equity [Sum of 14+15] 1295297 1112344 1222168 2078233 2975821
17 Total Liabilities + Owners' Equity [Sum of 11+12+16] 3393399 3966239 4009216 6091328 8036645
ATTOCK CEMENT RATIOS
26 Quick Ratio 0.62 5.6 0.55 0.82 0.7
27 Current Ratio 1.31 0.86 1.018 1.44 1.29

8. 8 | P a g e
28 Working Capital 455996 -320832 1759664 1282353 972716
29 Net Cash Flows From Operations
30 Account Receivable Turnover 116.45 183.26 176.13 41.08 58.57
31 Inventory Turnover 0.3 6.62 3.9 8.15 9.51
32 Free Cash Flows
33 Debt / Equity 0.61 0.17 0.69 2.11 2.36
34 Times Interest Earned
35 Gross Margin 0.139 0.1 0.11 0.095 0.094
36 Operating Margin 0.062 0.047 0.06 0.031 0.034
37 Net Margin 0.034 -0.02 -0.0035 0.044 0.033
38 Earnings Per Share
39 Return on Assets
40 Return on Equity 1.018 7.6 7.1 3.3 4.7
RATIOS
CURRENT RATIO OF ATTOCK CEMENT IS INCREASING THAT CURRENT ASSETS OF COMPANY IS
INCREASING WHEREAS CURRENT LIABILITIES ARE DECREASING.
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1 2 3 4 5
Current Ratio
Current Ratio

9. 9 | P a g e
WORKING CAPITAL SHOWS THE EXCESS CURRENT ASSETS OVER CURRENT LIABILTIES AND
ACCORDING TO RATIO THE ASSETS ARE IN EXCESS OVER LIABILITIES.
THE DEBT/EQUITY RATIO IS INDICATING THAT ATTOCK CEMENT HAVE MORE EQUITY AS
COMPARE TO DEBTS.
-500000
0
500000
1000000
1500000
2000000
1 2 3 4 5
Working Capital
Working Capital
0
0.5
1
1.5
2
2.5
1 2 3 4 5
Debt / Equity
Debt / Equity

10. 10 | P a g e
ACCOUNT RECEIVABLE TURNOVER WAS HIGHER IN 2OO4-06 THEN IT WAS DECREASED IN 2007
AND 2008.
INVENTORY TURNOVER IS INCREASING IN ATTOCK CEMENT SHOWING THAT COMPANY SELLINQ
QUANTITY IS INCREASING PER YEAR EXCLUDING YEAR 2006.
0
20
40
60
80
100
120
140
160
180
200
1 2 3 4 5
Account Receivable Turnover
Account Receivable
Turnover
0
1
2
3
4
5
6
7
8
9
10
1 2 3 4 5
Inventory Turnover
Inventory Turnover