Ratio & Comparative Analysis of MI & Heidelberg Cement Industry

Ratio Analyses & Forecasting
HEIDELBERGCEMENT BANGLADESH LIMITED | M.I CEMENT FACTORY LIMITED

A TERM PAPER ON RATIO ANALYSIS AND
FORECASTING OF TWO COMPANIES OF CEMENT
INDUSTRY
HEIDELBERGCEMENT BANGLADESH LTD.
&
M.I. CEMENT FACTORY LTD.
Submitted to:
Dr. Sujit R. Saha
Professor, Ex-Director (Training), BIBM
Department Of Business Administration,
East West University
Submitted by:
Shahriar Jahangir Yean 2016-2-91-020
Md. Touhidur Rahman 2016-2-91-009
Md Tahosin Alam 2016-3-95-093
Md. Minhazul Abedin 2017-1-95-061
Date of submission: 17th June, 2017

June 15, 2017
To,
Dr. Sujit R. Saha
Professor
Department of Business Administration
East West University
SUB: SUBMITTING REPORT ON FINANCIAL MANAGEMENT TERM PAPER.
Dear Sir,
With due respect and humble submission, we would like to submit our term paper on “Ratio analysis
and Forecasting of two companies of cement industry”. We found this term paper very interesting and
enjoyable. It was assigned on us as a requirement for this course. We are very much optimistic that this
term paper will enrich our practical knowledge.
We have tried our best to enclose all the related information. This term paper will definitely give us an
exceptional experience that will be useful in the future on practical ground. We shall remain ever
grateful to you for rendering us the opportunity of working on such an interesting field. If you need any
clarification regarding this term paper, we will be available for this.
Sincerely yours Signatures
Shahriar Jahangir Yean
Md. Touhidur Rahman
Mohammed Tahosin Alam
Md. Minhazul Abedin

Acknowledgement
The term paper “Ratio analysis and Forecasting of two companies of cement industry” is an
excellent opportunity for us to have knowledge in various problems and future prospects
of finance sector. The preparation of this term paper consists of cooperation of a small
number of individuals.
At the very beginning, all praises for almighty Allah for enabling us to complete this term
paper with good and sound health. Then, we would like to take this opportunity to
express my gratitude to our honorable instructor, Dr. Sujit R. Saha (Professor, East West
University) for giving us the chance to work on “Ratio analysis and Forecasting of two
companies of cement industry”. Without his valuable instruction, it would not have been
possible to come this far.
We are thankful to all of those who were involved and helped us directly and indirectly in
preparing this term paper.
Finally, we would like to thank our team members for their numerous support in both
financially and mentally which help us lot to finish our term paper successfully.

Table of Contents
Executive summary ......................................................................................................................................1
Objective of the study:..................................................................................................................................2
Data collection method: ...........................................................................................................................2
Limitation of the study:.............................................................................................................................2
An Introduction to Cement Industry.............................................................................................................3
HEIDELBERG CEMENT BANGLADESH LIMITED..........................................................................................5
M. I. CEMENT FACTORY LIMITED..............................................................................................................6
Ratio Analysis ...............................................................................................................................................7
A. LIQUIDITY RATIOS.............................................................................................................................7
(a) Current Ratio.............................................................................................................................7
1. Trend Analysis – ........................................................................................................................7
2. Cross Section Analysis...............................................................................................................8
(b) Quick Ratio................................................................................................................................9
1. Trend Analysis...........................................................................................................................9
2. Cross Section Analysis.............................................................................................................10
Liquidity Segment Analysis .................................................................................................................11
B. ASSET MANAGEMENT INDEX ANALYSIS........................................................................................12
(a) Inventory turnover ratio .........................................................................................................12
1. Trend analysis .........................................................................................................................12
2. Cross section analysis..............................................................................................................13
(b) Daily sales outstanding ...........................................................................................................14
1. Trend analysis .........................................................................................................................14
(c) Fixed assets turnover..................................................................................................................16
1. Trend analysis .........................................................................................................................16
(d) Total asset turnover................................................................................................................18
1. Trend analysis .........................................................................................................................18
Segment comment..............................................................................................................................20
C. DEBT MANAGEMENT SEGMENT ....................................................................................................21
(a) Debt Ratio ...............................................................................................................................21

1. Trend analysis .........................................................................................................................21
D. PROFITABILITY INDEX ANALYSES...................................................................................................23
(a) Net Profit Margin ....................................................................................................................23
1. Trend analysis .........................................................................................................................24
(b) Operating Profit Margin..........................................................................................................27
1. Trend analysis .........................................................................................................................27
(c) Return on Assets (ROA)...............................................................................................................30
1. Trend analysis .........................................................................................................................30
2. Cross section analysis..................................................................................................................31
(d) Return on Equity (ROE) ...........................................................................................................32
1. Trend Analysis.........................................................................................................................32
Segment analysis.................................................................................................................................35
E. Market value ratios........................................................................................................................36
EPS & P/E Ratio ...................................................................................................................................36
1. Trend Analysis.........................................................................................................................36
Market value Segment Analysis..........................................................................................................38
Ratio analysis at a glance........................................................................................................................39
DuPont Analysis......................................................................................................................................40
Heidelberg Company...........................................................................................................................40
M.I. Cement ........................................................................................................................................42
Financial Forecasting & Adjusted Statements...........................................................................................44
Projected Ratio Values Based on above Statements..............................................................................49
Adjusting Statements..............................................................................................................................50
Findings and Recommendation .................................................................................................................54
(a) Findings ...........................................................................................................................................54
(b) Recommendation............................................................................................................................55

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Executive summary
Ratio analyses term paper on two vast cement manufacturing firms namely, HeidelbergCement
Bangladesh Limited and M.I. Cement factory Ltd in the limelight of financial health evaluation.
In these view of segmented analyses on 4 fixed arenas such as Liquidity, Asset management,
Debt management, and Profitability. On the basis of numerical and analytical presentation, have
been showcased descriptions with the sense to provide market forecast of mentioned two firms.
In other way, we have the objective to present an evaluation statement that serves only brief
recommendation in internal and external picture of Heidelberg and MI cement. In the 1st phase
of Ratio Index, liquidity portion formulated Current Ratio on an average 1.73 X for MI and 2.4 X
for Heidelberg. In quick ratio is 2.0 X on average for Heidelberg and 1.64 X for MI respectively
and we can infer lower to moderate management of Liquidity in both the firms. At the 2nd phase,
Asset management relativity inventory turnover is 7.8 X and 11.16 X for Heidelberg and MI
respectively on an average valuation. DSO is 33 days and 47 days on an average of Heidelberg
and MI respectively. In this view Heidelberg collection period is much better than MI. On other
two factors of ratio especially fixed asset turnover showed average above 2.0 X level and total
asset turnover moderately below 1.0 X. However, both the firm’s management of resources
showed moderate maneuver. On third phase, debt management functions MI averagely above
48% dependency on leverage and Heidelberg showed 36% on leverages correspondingly. On the
last phase, profitability index in break down net profit margin is 13% (Heidelberg) and 8.67%
(MI) on an average accordingly. ROA of Heidelberg showed above 12% returns and MI for
above 5.5% returns on an average. The condition is plausibly worst for MI than Heidelberg.
Heidelberg maintains quite stable returns in equity (20% average). On the other hand, MI is in
zigzag manner to returns their investors. Apart from that both the corporation showcased
aspiration to build up values in different portfolio mechanism. But our analytical limitation binds
in certain financial formulation with external views as like Economic, political, socio-cultural
and suppliers’ point of view. However, this report of ratio analyses will envisage management
policies and internal structural certainties proficiently.

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Objective of the study:
Many students who are completing this term paper would probably mention that the primary objective
of their study is to fulfill the course requirement. But from our position we can assure you that our
primary objective is to gain analytical and research knowledge regarding analyzing and forecasting for
a particular company.
Data collection method:
Main Sources:
1. Extensive analysis on subjected topic.
2. Discussion with co members.
3. Data collection through internet.
Limitation of the study:
There is a saying “There is no unmixed blessing on earth”. In case of making this report this proverb
was proved again. Here are the samples of problems we face during the making of term paper:
 The major obstacle that we faced during our study was lack of data.
 As this term paper is new for us. That’s why; we faced problems almost in every step of
making report.
 Date of submission was another big mental stress for us.
But after seeing the final report we forget all the limitations. We are optimistic that our term paper
will satisfy everyone.

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An Introduction to Cement Industry
Cement Industry relatively a fast-growing industry, is developing in pace with increasing building
and construction activities. Bangladesh cement industry is the 40th largest market in the world.
Cement has long been used as a bonding agent to unite particles or to cause one surface to adhere to
another. The most common form of cement, Portland cement, is a powder obtained from burning
together a mixture of crushed limestone and clay and obtained clinker, which then grinded and
added with 5% gypsum or fly ash. The cement when mixed with water and sand or gravel, turns
into mortar or concrete. Now (2017) the amount of cement annually consumed in the country is
about 20 million tonne, which is internally produced. Cement consumption rose almost three times
higher in last ten years. The demand forecast for cement suggest expansion at a rate of 8% percent
as the major construction projects like Padma multipurpose bridge, elevated expressway and other
road and building projects are under implementation plans in the near future. Real Estate
companies and individuals are important consumers of cement and during insignificant government
project financing they remain the main consumers in the country. Bangladesh has become a surplus
cement producing country and now exports part of its produced cement to neighboring eastern
Indian states and to Myanmar. Per capita cement consumption in 1999 in the country was only 22
kg per year which reached over 105 kg in 2016. Still the per capita cement consumption in
Bangladesh is fairly low compared to India (217 kg), Srilanka (310 kg), China (1700 kg), Malaysia
(570 kg) and Thailand (475 kg).
Historically, Bangladesh did not depend much on cement. It also did not have enough natural
resources for manufacturing it. The base materials traditionally used in house building and other
construction required little use of cement. Gradual substitution of traditional building structures or
pattern by modern high-rise ones has pushed up the use of cement. But as the economy continued
to remain agro based, construction sectors had not been able to gain momentum and as the
infrastructure development was selective, cement remained a product of low demand. A faster
growth in demand for cement has been observed only since mid 1980s, specially with
implementation of large infrastructure projects, increased pace of urbanization, construction of
apartment buildings and multistoried shopping complexes in urban areas, and in the moneyed rural
people for modern houses.

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Private local enterprises dominate the current cement production (60%) of the country while
multinational cement manufacturing companies like Lafarge, Holcim, Cemex, Heidelberg account
for 40% market share. Clinker is mainly imported from China, Thailand, Malaysia, Philippines,
Indonesia and India and used as raw material for cement manufacturing by the companies in
Bangladesh. Among the local cement manufacturing companies Shah Cement, Akij Cement,
Fresh, Crown, Seven Circle, Bashundhara, Aramit, Royal etc. are the major ones. The
manufacturing of cement is based on both locally available raw materials and imported clinker. The
mills that produce cement from imported clinker are located mainly around Dhaka, Chittagong and
Mongla. There are 125 cement companies registered with the relevant government agencies but
around 45 companies are in operation in 2016. These mills produced about 25 million tonnes
cement per annum. A 50-kg bag of cement sells at Tk. 360-400. Some small manufacturing plants
in northern and southern parts of the country had already been shut down in the last few years, as
those lost out their competitiveness to big market players. Local raw material based cement
production depends on limestone deposits that lie in St. Martins Island, Joupurhat and Sylhet areas.
The deposit in Sylhet supported the production of cement in the Chattak and Ayeenpur cement
factories in the 1960-1990s. These plants shut their operation due to their supply shortages of
limestone and also due to their inability to stand with their market competitors.

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HEIDELBERG CEMENT BANGLADESH LIMITED
Heidelberg Cement Bangladesh Ltd. is one of the group companies of Heidelberg Cement
Group, founded in Germany in 1873, with its core products being cement, ready-mixed concrete,
aggregates and related activities, is one of the leading producers of building materials worldwide.
The group employs around 43,000 people in more than 50 countries.
Heidelberg Cement Bangladesh Limited meets 13% of the Bangladesh demand for cement from
two plants located at Dhaka & Chittagong.
Heidelberg Cement Bangladesh Limited employs 260 people across the country. The company
with 1.5 million tones annual cement production has become a major force in the Bangladesh
Cement industry over the last eight years
Through acquisition of Chittagong Cement Clinker Grinding Company Ltd., it has brought
together regional manufacturing whose history stretches back to the very beginning of
commercial cement production in Bangladesh. In Bangladesh, Heidelberg group is one of the
largest foreign investors having an investment of 100 million US$ with more than 260
employees working round the clock to materialize the mission of this great global company. By
satisfying the needs and aspirations of its customers, employees, shareholders and the wider
community, the company is able to maintain its position of strength as a sustainable cement
provider without compromising commitment to long term stability and environmental
responsibility.
M. I. CEMENT FACTORY LIMITED
M. I. Cement Factory Ltd. is a public limited company and one of the leading manufacturers of
cement in Bangladesh. On December 31, 1994 it started its journey with the commitment for
providing high quality cement to the country. Its brand “Crown Cement” has own renown both at
home and abroad.
Initially the plant was installed with a capacity of producing 600tpd (ton per day) of Portland
cement. With the passing of time the demand of Crown Cement increased day by day. Therefore

6 | P a g e
the sponsors expanded the project thrice. By dint of quality Crown Cement soon gained
acceptability both at home and abroad which raised the necessity for expanding the plant from
initial 600tpd (ton per day), 800tpd 2nd unit in 2002, 1400tpd 3rd unit in 2006 and 3000tpd 4th
unit in 2011 thereby raising the total production capacity to 5800tpd i.e. 1.740 million metric ton
per annum.
The company has been listed in Dhaka Stock Exchange and Chittagong Stock Exchange in 2011.
Its high growth agenda have been highly appreciated by the shareholders, and have won
investors trust. Its backward and forward integration endeavors have given new dimensions to its
growth platform. With this end in view, the associate industrial units’ viz., Crown Polymer
Bagging Ltd., Crown Power Generation Ltd., Crown Mariners Ltd., Crown Transportation &
Logistics Ltd., Crown Cement Concrete & Building Materials Ltd. have been set up and are
already in operation. The company has also acquired a handy max size ocean going ship to
facilitate transportation of raw materials from abroad. It is hopefully expected that these new
growth platforms will facilitate creation of new dimensions and frontiers to the mother company
M. I. Cement Factory Limited.
Crown Cement pioneered in export of cement in 2003 and paved the way for earning hard-
earned foreign currency. Recently Crown Cement Achieved the National Export Trophy (Gold)
twice for attaining the top most place among the cement exporters in Bangladesh.
The factory possesses well communications facility both through water and road. It is located as
West Mukterpur, Munshigonj on the bank of the river Dhaleswari. It is connected by a metallic
road (Dhaka-Munshigonj Highway) linked with the whole country.

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Ratio Analysis
A. LIQUIDITY RATIOS
(a) Current Ratio
Ratios Formulas
2015 2014 2013
HEIDELBERG M.I. HEIDELBERG M.I. HEIDELBERG M.I.
Current
Ratio
1.96 X 1.46X 2.33 X 1.66X 2.91 X 2.23X
1. Trend Analysis –
Heidelberg -2013 -
Here in 2013, we see that Heidelberg's current ratio was 2.91. It is a little bit low. This means the
liability or bank loans were too much in respect to the current assets of Heildelberg in 2013.
Heidelberg -2014 -
In 2014, Heidelberg Company's current ratio becomes 2.33. Here, the current ratio shows that the
liabilities become greater in compare to year-2013. This indicates that company took many
loans.
Heidelberg -2015 -
In the year 2015, Heidelberg took more loans the current ratio shows. The current ratio was 1.96.
This shows, the company was facing problems day day. Their current liabilities rose rapidly than
their current assets.
M.I. Cement-2013 -
In 2013, MI company had current ratio of 2.23. This means the current asset to current liability
ratio was 2.23.

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M.I. Cement-2014 -
In 2014, MI company had current ratio of 1.66. In this year, MI company's current ratio was less
than the previous year. That means the company took more loan in 2014 than 2013.
M.I. Cement-2015 -
In 2015, the current ratio of MI company was 1.46. It is less than the previous year. That means
the company took much loan in 2015 than 2014. This means the company would face hard
situation, if they want to pay their obligations.
2. Cross Section Analysis
As per the current ratios from the years 2013,2014 & 2015; we have got that, Heildelberg had
greater current ratios than MI company. So, Heildelberg's liquidity was stronger than MI cement
company.
0
0.5
1
1.5
2
2.5
3
3.5
2013 2014 2015
MI
Heidelberg

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(b) Quick Ratio
Ratios Formulas
2015 2014 2013
Quick
Ratio
1.65 X 1.32X 1.96X 1.54X 2.46X 2.06X
1. Trend Analysis
Heidelberg -2013 -
Here in 2013, we see that Heidelberg's quick ratio was 2.46. This means Heidelberg Company
had low inventory. The inventory management of Heildelberg was good in 2013.
Heidelberg -2014 -
In 2014, Heidelberg Company’s quick ratio becomes 1.96. Here, this ratio shows that the
inventory were greater than the last year. It indicates that company had excess materials stock in
2014.
Heidelberg -2015 -
In the year 2015, Heidelberg's quick ratio was 1.65 . The ratio was even less than the last year. That
means Heidelberg company had lots of inventory in 2015. That's why the quick ratio was high. So,
day by day, Heidelberg's inventory were increasing.
M.I. Cement-2013 -
In 2013, MI company had quick ratio of 2.06. This means the quick ratio was quite high. That
means MI company were in good condition in inventory management.
M.I. Cement-2014 -
In 2014, MI company had quick ratio of 1.54. In this year, MI company's quick ratio was less
than the previous year. That means the company's inventory were increased than 2013.

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M.I. Cement-2015 -
In 2015, the quick ratio of MI company was 1.32. It is less than the last 2 years. That means the
company had excess stocks of unused materials than the stocks of last 2 years. This means, MI
company had highest inventories in 2015. This year was not good for them.In 2015, MI company
So, MI company's inventory were increasing every year.
2. Cross Section Analysis
According to the 3 year's values of quick ratio in between the companies Heidelberg & MI
Cement, we have found that, the quick test ratios of MI company were higher than Heidelberg
company. That means MI company had more current assets & less inventories. MI company
were more efficient than Heidelberg company in inventory management.
0
0.5
1
1.5
2
2.5
3
2013 2014 2015
MI
Heidelberg

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Liquidity Segment Analysis
We have done the computations for liquidity ratios. Now we will see individual company's
liquidity positions.
Heidelberg -
Heidelberg's current ratios were good & its quick ratios were also good. Heidelberg had more
current assets which are easily liquidable. Also, they had fewer inventories, which we can say
fairly good too. So, Heildelberg's liquidity position was fairly good in different years.
M.I. Cement -
MI cement company's current ratios were satisfactory. But it's quick ratios weren't good enough.
MI cement had less liabilities compared to it's assets. But it had much inventories. So, we can
say MI cement's Liquidity position was not so good. Its liquidity management was satisfactory.
Maybe in future the company will suffer for it's liquidity condition.

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B. ASSET MANAGEMENT INDEX ANALYSIS
Asset management ratios
2015 2014 2013
Inventory Turnover 8.08 X 9.49 X 8.28 X 10.76 X 6.98 X 13.24 X
Daily Sales Outstanding 35 Days 53 Days 34 Days 53 Days 31 Days 35 Days
Fixed Asset Turnover 2.93 X 1.97 X 2.82 X 2.03 X 2.70 X 1.67 X
Total Asset Turnover 1.07 X 0.68 X 1.03 X 0.70 X 0.93 X 0.70 X
(a) Inventory turnover ratio
1. Trend analysis
Trend analysis means comparison of performance of a company in a particular area over the
years. Here the comparison is done within the company. It is intra company comparison.
Trend analysis of Heidelberg Company and M.I. Company is given below from best
understanding.
Heidelberg Company
Inventory turnover ratio indicates the times of rolling of inventory in a particular year.
Heidelberg is maintaining a good inventory turnover in its stock. In 2013, the turnover was 6.98
6.98%
8.28% 8.08%
6.00%
6.50%
7.00%
7.50%
8.00%
8.50%
2012
2012.5
2013
2013.5
2014
2014.5
2015
2015.5
1 2 3
Percentages
YerarRange
Inventory turnover of Heidelberg Company
Year percentage

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times. In 2014, it increased in 8.28 times and in next year it became slightly lower and it was
8.08 times. It means, Heidelberg has managed its inventory to increase sales.
M.I. Company
Inventory turnover ratio indicates the times of rolling of inventory in a particular year. M.I.
Company is inefficient in managing its inventory. In 2013, the rolling of inventory was 13.24
times. But in 2014, it reduced and became 10.76 times. And in final year, it reduced more and
became 9.49 times. So, it clearly indicates that the frequency of sales is decreasing day by day
which is reflected in inventory turnover ratio.
2. Cross section analysis
Cross section analysis means comparison of performance between two companies in a particular
area over the years. It is inter Company comparison. Cross section analysis of Heidelberg
Company and M.I. Company is given below from best understanding.
13.24%
10.76%
9.49%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
2012
2012.5
2013
2013.5
2014
2014.5
2015
2015.5
1 2 3
Percentages
YearRange
Inventory turnvoer of M.I. Company
Year percentage

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Inventory turnover ratio
If we look at the figures of two companies it will seem that M.I. Company has done better than
Heidelberg in inventory turnover. Because M.I. Company has a better value than Heidelberg. But
if we look at the flow of inventory turnover, we will understand that actually performance of
M.I. Company is getting worse day by day than Heidelberg. Because the rolling of inventory of
M.I. Company is going down day by day whereas Heidelberg is improving day by day. So, it is
clear that Heidelberg is more efficient in inventory turnover than M.I. Company. The figures of
M.I. Company are 13.24 times – 10.76 times – 9.49 times. And the figures of Heidelberg are
6.98 times – 8.28 times – 8.08 times.
(b) Daily sales outstanding
1. Trend analysis
Heidelberg Company
0.00%
5.00%
10.00%
15.00%
2013 2014 2015
Percentagerange
Year range
Cross section analysis of Inventory Turnover ratio
Heidelberg M.I
2013
2014
201531 days
34 days
35 days
1 2 3
DaysRange
Daily Sales outstanding of Heidelberg Company
Year Time period

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From the point of dispatching the goods to customers till getting the payment the whole time is
called daily sales outstanding. In case of daily sales outstanding, Heidelberg is deteriorating its
performance day by day. From 2013 to 2015, year by year the credit collection period is
increasing. At first year, it was 31 days and in last year 35 days.
M.I. Company
From the point of dispatching the goods to customers till getting the payment the whole time is
called daily sales outstanding. M.I. Company is failed to collect its credits from customers. At
the beginning year they used to take 35 days to collect the credits from customers. On the next
year, it increased and became 53 days which was 18 days more than previous year. And it
remained same till final year. So, it shows that M.I. Company is inefficient in collecting their
credit amount from its customers.
2013
2014
2015
35 days
53 days
53 days
1 2 3
DaysRange
Daily Sales Outstanding of M.I. Company
Year Time period

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In case of daily sales outstanding both companies are doing bad gradually. But still Heidelberg is
better than M.I. Company. Because their maximum credit collection time is 35 days whereas
M.I. Company is taking 53 days to collect credits from customers. It means Heidelberg is more
efficient in collecting credits than M.I. Company. Actually it is the reflection of inventory
turnover performance of two companies.
(c) Fixed assets turnover
1. Trend analysis
Heidelberg Company
Fixed assets turnover ratio indicates how much sales can be generated by utilizing fixed assets of
a company. Heidelberg is good at maintaining its fixed assets. In 2013, from every 1 taka of
fixed assets, Heidelberg has generated sales of 2.70 taka. On next year, it increased in 2.82 taka.
And in final year, the sales reached at 2.93 taka. So, we can say Heidelberg is efficient in
managing its fixed assets.
2.55
2.6
2.65
2.7
2.75
2.8
2.85
2.9
2.95
2013 2014 2015
Timerange
Year range
Fixed Assets Turnover of Heidelberg company
Times

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M.I. Company
Fixed asset turnover ratio indicates how much sales can be generated by utilizing fixed assets of
a company. Again M.I. Company is not good at maintaining its fixed assets. In 2013, the
company used to generate 1.67 taka of sales from every 1 taka of fixed assets. On the next year,
it increased in 2.03 taka which is a good sign. But in 2015, again the generation of sales reduced
and become 1.97 taka. So, it is clear, M.I. Company is not stable in maintaining their fixed assets
at a constant rate.
Again in net fixed assets turnover, Heidelberg is far better than M.I. Company. Heidelberg is
generating at least 2.70 taka of sales from every 1 taka of their net fixed assets whereas M.I.
0
0.5
1
1.5
2
2.5
2013 2014 2015
Timerange
Year range
Fixed Assets Turnover M.I. Company
Times
2.7 2.82 2.93
1.67
2.03 1.97
0
1
2
3
4
2013 2014 2015
Timerange
Year range
Cross section analysis of Fixed assets turnover
Heidelberg M.I

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Company is generating maximum 1.97 taka of sales from its per taka of net fixed assets. It
clearly shows the efficiency of Heidelberg Company and inefficiency of M.I. Company.
(d) Total asset turnover
1. Trend analysis
Heidelberg Company
Total assets turnover ratio indicates how much sales can be generated by utilizing total assets of
a company. Just like fixed assets Heidelberg is good in managing its total assets. In 2013,
Heidelberg used to generate sales of 0.93 taka from every 1 taka of total assets. On next year, it
increased in 1.03 taka. And in 2015, it became slightly higher and it was 1.07 taka. So, day by
day, Heidelberg is becoming efficient in managing its total assets turnover.
M.I. Company
0.93
1.03
1.07
2013 2014 2015
TIMERANGE
YEAR RANGE
TOTAL ASSETS TURNOVER OF HEIDELBERG
COMPANY
0.67
0.68
0.69
0.7
0.71
2013 2014 2015
TimeRange
Year range
Total assets turnover of M.I. Company
times

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Total assets turnover ratio indicates how much sales can be generated by utilizing total assets of
a company. M.I. Company is average in maintaining their total assets turnover. Because there is
no high fluctuation in maintaining total assets. At the beginning year, they used to generate 0.70
taka of sales from every 1 taka of total assets. And in final year, it reduced and became 0.68 taka.
It means, M.I. Company is anyhow managing their total assets in an average manner.
As Heidelberg is good at maintaining its stock, efficient in collecting credits and improving in
maintaining its net fixed assets; so, these will have an impact in maintaining its total assets
turnover as well. In comparing with M.I. Company, Heidelberg is doing better. Though M.I.
Company is maintaining an average performance in total assets turnover. But still it is lower than
Heidelberg. The maximum generation of sales of M.I. Company is 0.70 taka and Heidelberg is
1.07 taka from per taka of total assets of the company.
So, to sum up we can say Heidelberg is performing better than M.I. Company in managing its
assets. It is the efficiency of Heidelberg which will have an impact in making profit for the
company.
0.93
1.03 1.07
0.7 0.7 0.68
0
0.2
0.4
0.6
0.8
1
1.2
2013 2014 2015
Timerange
Year range
Cross section analysis of Total assets turnover
Heidelberg M.I

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Segment comment
Heidelberg Company
From the above ratios it is seen that Heidelberg is managing its stock in a good manner. But
unfortunately they are failing to collect their credits quickly from their customers. The company
is showing its charisma in utilizing both fixed assets and total assets. So, in a word Heidelberg is
efficient in asset management ratios.
M.I. Company
From the above trend analysis, we can say, M.I. Company is inefficient in asset management
ratios. This is because, from inventory turnover till total assets turnover; in every case year by
year M.I. Company is deteriorating its performance. And it will have a significant impact on
profitability of the company.

21 | P a g e
C. DEBT MANAGEMENT SEGMENT
(a) Debt Ratio
Debt ratio = Total Liabilities/Total Assets
Year 2015 2014 2013
Company Heidelberg
M.I.
Cement
Heidelberg
M.I.
Cement
Heidelberg
M.I.
Cement
Debt
Ratio
41% 51.3% 36% 50% 30% 42.82%
1. Trend analysis
Heidelberg Cement Company
Heidelberg company’s Debt ratio in 2015 is 41%, in 2014 is 36% and in 2013 is 30%, which
means that its creditors have increased their investment in the company over the years. So the
management must be conscious about their debt management policy so that, it will never go up
on its industry average.
M.I Cement Company
M.I company’s Debt ratio in 2015 is 51.3%, in 2014 is 50% and in 2013 is 42.82%, which also
means that it’s creditors have increased their investment in the company over the years. So the
management must be grow their attention about their debt management policy so that, it will
never go up on it’s industry average.

22 | P a g e
Heidelberg &M.I Cement Company
In 2013, Heidelberg debt ratio is 30% where M.I debt ratio is 42.82% and also in 2014 & 2015
the M.I company’s debt ratio is more high than Heidelberg company. So, M.I company is more
dependent on their creditor’s investment than Heidelberg company and M.I companies debt
management policy is much poor than Heidelberg company.
0
10
20
30
40
50
60
2013 2014 2015
Heidelberg
MI

23 | P a g e
D. PROFITABILITY INDEX ANALYSES
Profitability Ratios 2015 2014 2013
H MI H MI H MI
Net Profit Margin 13% 7.85% 11% 8.43% 15% 9.74%
Operating Profit Margin 16% 11.91% 12% 12% 17% 12%
Return on Assets 14% 5.38% 12% 5.94% 14% 6.80%
Return on Equity 24% 11.50% 18% 16.37% 20% 12.38%
Earnings Per Share (EPS) TK 24.81 TK 4.37 TK 20.88 TK 4.54 TK 26.09 TK 4.48
P/E Ratio 22.66 X 9 X 23.92 X 20.64 X 14.62 X 20.92 X
(a) Net Profit Margin
The study of the profitability analysis defines the valuation of using resources that grows wealth
for firm and its stakeholders. Here cement industries in Bangladesh context we can find some
gradual and steady sluggish growth in our analysis. In other words profitability is the optimal
objectives of firm, other things remain constant in the economy as a whole. From our analytical
or numerical point of view, have explored relative ratios which dignify the health of a business
segments proficiently. However, M.I. Cement factory and Heidelberg cement both have listed
and jointly affiliated in Dhaka Stock Exchange (DSE) and Chittagong Stock Exchange (CSE)
respectively. We would discuss DSEX and CSE index based view in some later discussions here
we are looking forward to analyzing the first spell the Net Profit Margin.

24 | P a g e
1. Trend analysis
Heidelberg
Net Profit Margin analyzes the profit after taxes and interest payment or net earnings available to
shareholders after deducting all kinds of operating and non-operating expenses from revenue or
sales. The representation is in percentile such as 10%. In the view of trend over the Heidelberg
group from 2013 to 2015 quite sloped in “V-shape”. In the year, 2013 NPM was 15% or we can
say using Tk 100 resources generate or beget Tk 115 after excluding all operation and non
operation costs. In other words it TK 15 goes to shareholders. The net working capital of
Heidelberg was Tk 7492 million, in percentile it is 70% of total assets. During 2013 using Tk
7492 million generated Tk 1474.07 million net profits. Onwards, in the year 2014 and 2015 the
net profit margins are 11% and 13% respectively. On the graphical view it is almost 4%
downward that might occur for economic and political downturn. If we DSO value of 2014 and
2015 these are 34 and 35 days respectively, whereas it was 31 days during 2013. As we can
transition from 2013 to 2014 it creates a little vertex and took an up during 2015. As we have
limitation of data that availability is in Historical form then it is bit of hypothetical come on a
straight forward remark. Apart from that, Net Working Capital (NWC) on 2014 and 2015 was Tk
6524 million and Tk 5778 million correspondingly. In percentile, these were 64% and 59% of
total assets accordingly. From these propositions, net profits from 2013 to 2015 are 1474, 1179
and 1401 millions. We can outlook a lower to moderate trend of using resources to capture
wealth.
15%
11%
13%
0%
5%
10%
15%
20%
2013 2014 2015
NPM (HEIDELBERG)
HEIDELBERG

25 | P a g e
MI
Net profitability of M.I. cement factory showed a downward trend if we see the view of graph
above. During 2013, MI earned 9.74% net profit by using its resources. NWC was Tk 5595
million or in percentile 57%. By using capital of Tk 57 earnings is tk 9.74. As the fiscal years
passed profit goes sluggish. In year of 2014 and 2015 net profit margins are 8.43% and 7.85%
respectively. In real figure valuation of revenues are respectively 6829 million, 7990 mil, and
8264 mil from 2013 to 2015. We depict the revenue was growing in proper steps but operation
and other expenses augmented rapidly eaten up earnings. So, MI need focus more extensively on
its non operating expenses and squeeze operational expenses. I f we look at DSO from 2013 to
2015, these are 35, 53 and 53 days. That means, gradually the collection of credit sales shrunken.
Other factors such as interest or lease payments might have a discussion on Asset Management
Ratios.
9.74%
8.43%
7.85%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2013 2014 2015
NPM (M.I.)
M.I.

26 | P a g e
In cross section analyses generally match firm value with industry averages but here we will
signify correlation of Net profit margin on two separate firms (MI versus Heidelberg). Though it
is visible on the graph that MI is bit of below in percentile points from Heidelberg but in real
valuation strength and weaknesses are far beyond the comparison. Below have showcase the real
values in million of Net Profit.
Years
Net Profits (Taka
Million)
Heidelberg MI
2013 1474 665.37
2014 1179 674.39
2015 1402 648.85
The magnitude of gap is above 800% (average) but both have been sustaining in the market with
limited market shares. The core difference is multinational and national. Heidelberg working in
Bangladesh as multinational business franchise and MI is private Bangladeshi manufacturing
firm. MI has dependency over interest loans but Heidelberg does not consist of such things. So,
somewhat it looks irrelevant or correlation may be weighted one sided or biased if we only
taking account the percentile values of Net Profit Margin but market share and prosperity is
much higher Heidelberg in terms of profitability. In addition, need to consider the portfolio of
15%
11%
13%
9.74%
8.43% 7.85%
0%
2%
4%
6%
8%
10%
12%
14%
16%
2013 2014 2015
NPM(percent)
Net Profit Margin
HEIDELBERG
M.I.
YEARS

27 | P a g e
assets, investment, and economic variable to obtain sustainable decisions. Apart from that, if we
could comprehend Mother Company of Heidelberg including import and export, and goodwill
then had a possibility to get a proper judgment. In these view, the market trade values may
forecast the optimal valuations and Heidelberg solvency is much more proficient than MI
cement.
(b) Operating Profit Margin
Operating profit defines the gross earnings after deducting operating expenses such as selling
and administrative expenses. In ratio analysis operating profit margin signify operating profit
divided by Revenue or Sales in percent. Operating Profit Margin (OPM) increases means as well
as management in firm’s internal and external costs but that should be a significantly distributed.
Suppose, to increase profit manager has stopped marketing fund at some specific area and
marketers left visiting that area frequently. As a result real sales may dwindle and market goes to
the competitors. So, the management of operational cost sometimes tough to shrink but if system
allows then it generate supplementary wealth for firm.
1. Trend analysis
HEIDELBERG
In the view of Heidelberg’s OPM line chart it took a “V-Shape” which indicates up to down and
again grown up. During 2013 OPM was 17% in other words Tk 1664 millions. Tk. 667 million
17%
12%
16%
0%
5%
10%
15%
20%
2013 2014 2015
(Operating Profit Margin)
HEIDELBERG

28 | P a g e
used in selling and administrative expenses. As the 1st
period of historical data it is in good track
but when proceed to 2014 it falls towards 12%. Almost 5% lost from previous year. In real figure
valuation we can see sales grows Tk 10504 million (6% growth from previous year 2013) but
operating figure stood Tk 724.9 million which is 9% growth from previous period. It defines
Heidelberg need to give more emphasize on operating expenses. Let progress to 2015, it shows
4% growth (OPM 16%). If we see the break down again sales is Tk 10.48 million which is bit of
lower than 2014. After deducting COGS (tk 7948 million), operating expense stood Tk. 851.6
million (18% growth). In this view, we can infer prices of raw material or processing costs might
inflated that induced lower growth in 2014 but 2015 it brought back to the track. An overall trend
value is in average stable to moderate.
MI
There is no shape or zigzag line for MI Cement Factory; it took a straight line for operating profit
margin. The scale is stuck at 12%. If we put our eyes on figures chart below:
YEARS Taka (Million)
Sales COGS Operating
Expenses
2013 6829.70 5731.17 278.96
2014 7990.64 6731.73 300.03
2015 8264.24 6850.55 421.98
12% 12% 12%
0%
2%
4%
6%
8%
10%
12%
14%
2013 2014 2015
Operating Profit Margin
M.I.

29 | P a g e
On the basis of table above operating expenses grows 8% and 41% in 2014 and 2015
respectively. With the concurrence of cost figures operating profits manages a consistency that
kept OPM at 12% stake. In this view, we can conclude need to put more emphasize on
processing & transformational expenditure units of operating expenses on internal and external
terms.
In the view of cross section analysis, the magnitude though lower for MI cement factory in terms
of revenue or profitability but in percentile values it is flat 12% and Heidelberg pertain (12-17)%
values. Below have represented the table of operating profits for both Heidelberg and MI
cement:
Year Operating Profits (Taka in
Millions)
Heidelberg MI
2013 1664.8 819.56
2014 1307 958.87
2015 1702.4 991.71
From the above view, we can find different level of identification for analyzing two firms. MI
cement is almost average 700% lower value generator than Heidelberg. We can infer that in
cross section analysis between two organizations only based on percentile figure could be a
17%
12%
16%
12% 12% 12%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
2013 2014 2015
HEIDELBERG
M.I.
Operating Profit Margin (Cross Section)

30 | P a g e
blunder for analyst. In this view, we can conclude, market share and external environments
(economic, socio-cultural) leads the different prospect for every firm. Performance of MI is far
below than average than Heidelberg and had shown a good prospect in the year 2015 as
difference shrinks a little bit. To capture market MI need to establish aggressive policy in sales
and marketing.
(c) Return on Assets (ROA)
Return on Assets (ROA) defines the how much wealth a firm is generated by using its total
assets. Assets contain capitals, tangible and intangibles entities in exploration goodwill, cash, and
plant & equipment etcetera. The ratio value showcase on percentile figure dividing net income
by total assets. In below texts we will define ratio values of ROA in terms of trend for MI and
Heidelberg and cross section analysis.
1. Trend analysis
Heidelberg
During 2013, Heidelberg fixed 14% returns on assets or we can explore by using Tk 100
resources it generated Tk 14. Total asset figure was Tk 10722 million and net income available
to common stockholders was Tk 1474 million as mention in net profit margin ratio. In proceed
2014 took a downward trend and took 12% returns to assets. And this is the angle of “V”. On
next year it took 14% return of Assets. In real figure Tk 1401.98 million over total assets of Tk
9771 million. If we see the growth of asset then it places (5%) downward in 2014 from 2013 and
14%
12%
14%
11%
12%
13%
14%
15%
2013 2014 2015
ROA (HEIDELBERG)
HEIDELBERG

31 | P a g e
(4%) dwindle in 2015 from 2014. The average rate for ROA is 13.33%. At this point the rate of
return is moderately stable.
MI
As depicted on the graph the trend of ROA for MI is bit of downward from 2013-15. The peak
moment was in 2013 at the rate 6.80%. As we have previously mentioned Net Profit for 2013
was Tk 665.36 million and total asset was Tk 9783.39 million. There is a very good chance when
assets level is robustly larger then some portion may falls in idle. There is a good chance to have
that on MI asset management. However, rate falls as it proceeds from one period to another. On
the basis of statement of financial position growth of asset is 16% in 2014 and 6% in 2015. There
might have augmented values in market trades of shares or purchasing new and asset
management portion have discussed that. On this point of view rate is lower in terms of assets
level.
6.80%
5.94%
5.38%
0.00%
2.00%
4.00%
6.00%
8.00%
2013 2014 2015
ROA (M.I.)
M.I.
14%
12%
14%
6.80%
5.94% 5.38%
0%
5%
10%
15%
2013 2014 2015
ROA (Cross Section)
HEIDELBERG
M.I.

32 | P a g e
It is very sophisticated to analyze these two firms simultaneously as market share, profitability,
and resources contain massive difference. Not only in real figures but also the percentile values
Heidelberg hold excellent position which is majestic in real comparisons of leverage, market
price, capital asset management views. There is higher possibility that Heidelberg did not go
through in leverage position due to external threat such as political, regulation, legal, market
share, competitors and suppliers. The average ROA for Heidelberg is 13.33% and 6.04% for MI.
As the limitation of industry average data, we conclude here Heidelberg Cement possess super
power on market over MI. Other than that the performance of utilization of assets is quite stable
for MI than Heidelberg. MI should go through painstaking procedures in leverage and capital
management function to build up its position.
(d) Return on Equity (ROE)
Shareholders are the owner of a firm and what a firm earns by using its complete resources are
belongs to shareholders. The wealth of the firm is a part of owners if other things remain
constant. Management and board of directors decide retain earnings and actual cash flow to
stockholders. However, Return on Equity (ROE) measures how well a firm used the capital
invested by shareholders such as preferred or ordinary. In this portion of profitability analyses
we will see the performances of MI Cement Factory and Heidelberg Cement.
1. Trend Analysis
20%
18%
24%
0%
5%
10%
15%
20%
25%
30%
2013 2014 2015
ROE (HEIDELBERG)
HEIDELBERG

33 | P a g e
Heidelberg
Heidelberg Cement maintains a steady position on the rate of return to its common shareholders
on the basis of graphical presentation above. During 2013, ROE was 20% that means investing
Tk 100 Company earn Tk 120; here Tk 20 is profit after deducting all sources. If we point out
values of common shareholders are: Tk 7491 million, Tk 6524 million and Tk 5778.8 million for
2013, 14 and 15 respectively. In percentile view, during 2014 equity value falls by 13% and re-
falls 12% in 2015 due to change in trading prices in stock exchanges. In this circumstances, ROE
is quite good position in terms of Equity valuation figures. This is a very good prospect or
assurance to investors to that their money is not just going away. The performance augments the
confidence in stock market and trust of ordinary shareholders.
MI
As we can see above it represent a inverse “V Shape” for common shareholders. During the year
2014 it showed 4% point growth from 2013 (12.38%). 2014 was the peak @ 16.37%. To
maintain proficient returns to investors MI needs to augment its net profit figures over the level
of common equity. If we point out values of common shareholders are: Tk 5373.99 million, Tk
4119.90 million and Tk 5662.64 million for 2013, 14 and 15 respectively. In percentile view,
during 2014 equity value falls by 23% and regain 37% in 2015 due to change in trading prices in
stock exchanges. At conclusion, we can infer that ROE of MI cement is bit of poor management
of investors’ cash flow.
12.38%
16.37%
11.50%
0.00%
5.00%
10.00%
15.00%
20.00%
2013 2014 2015
ROE (MI)
M.I.

34 | P a g e
As mentioned previously several times, though it is tough to correlate two firms based on real
figures of assets, liability and profitability the main focus point comes when percentile
calculation is formulated. One is earning Tk 10 by using Tk 100 and the other one is earning Tk
20 by using Tk 100. This inference is highly sophisticated when allocation of resources
magnificently differs from one another. However, from the graphical point of view Heidelberg
showcase a good return on equity and the average return is 20.67 means highly moderate. On the
other hand, MI has a pre zigzag curve with average return is 13.42% and conclude a below
moderate utilization of Equity values. To capture proper returns MI cement need to formulate
policy of revenue target, investment management functions. Only focusing operational values or
dependency is tough in today’s portfolio based capitalism.
12.38% 16.37% 11.50%
20%
18%
24%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
2013 2014 2015
ROE (Cross Section)
M.I.
HEIDELBERG

35 | P a g e
Segment analysis
The profitability index analysis broadcast how shiny the proliferated wealth of a firm achieves by
using resources. Net profit margin of Heidelberg reflects “V-shaped” and MI cement is bit of
downward. Based equity unit value Heidelberg persist a steady growth and MI needs to foster
cost management maneuver to overcome downward trend as figurative discussion is reflected on
graph prominently. Operating profit margin of MI cement stuck on 12% rate but Heidelberg
much better in terms of percentile values and reality management of assets. Table on that part
showcase the reality but both contains lower to moderate status. ROA of MI is in sluggish trend
but asset class is gorgeously topper for both corporations. Heidelberg cement maintains some
steady returns to assets. The relationship between MI and Heidelberg showed inverse
relationship in terms of ROE measurement. Heidelberg’s common shareholders’ value falls
sharply 12% on average periods but rate is in good prospectus. At the ending period showed
above the moderate condition. MI showed an inverse “V” curve that dignify not in steady return
track. Position is lower to moderate in terms of ROE. Overall profitability for MI is lower to
moderate and Heidelberg is moderate from different class of utilizing resources view.

36 | P a g e
E. Market value ratios
Ratios Formulas
2015 2014 2013
HEIDELBER
G
M.I.
HEIDELBER
G
M.I.
HEIDELBER
G
M.I.
Earning
Par Share
(EPS)
TK 24.81 TK 4.37 TK 20.88 TK 4.54 TK 26.09 TK 4.48
P/E Ratio 22.66 X 9 X 23.92 X 20.64X 14.62 X 20.92X
EPS & P/E Ratio
1. Trend Analysis
Heidelberg-2013 -
The EPS was 26.09 tk, for what, price/earnings(PE) ratio became 14.62 times. This means that in
2013, Heidelberg had average P/E ratio. It is average value. The investors would have to think
twice before they invest in Heidelberg company's share.
Heidelberg-2014 -
The P/E ratio of 2014 was 23.92 times, which has a high growth from the last year. So, investors
would feel curious to invest in Heidelberg company.
Heidelberg-2015 -
In 2015, Heidelberg had P/E ratio of 22.66 times, which was like the amount in 2015.
That means, investors would like to invest more in Heidelberg company as it's future seemed
good. So, we can say that heidelberg company looks prospectus according to it's 3 years's P/E
ratio.

37 | P a g e
M.I. Cement-2013 -
The price/earnings(PE) ratio was 20.92 times for I company in the year 2013. This means that in 2013,
MI had good P/E ratio. The investors would like to invest in MI cement.
M.I. Cement -2014 -
The P/E ratio of 2014 was 20.64 times, which was almost similar to the last year. So, investors would like
to invest in MI Cement Company.
M.I. Cement-2015 -
In 2015, MI had P/E ratio of 9 times, which was so much less than the last 2 years.
That means, investors would think twice to invest in MI in 2015. This year the condition wasn't
good.
So, we can say that M.I. Cement Company looks prospectus in 2013 & 2014.
But in 2015 MI was in risky position for the investors.
0
5
10
15
20
25
30
2013 2014 2015
MI
Heidelberg

38 | P a g e
According to last 3 years, P/E ratios of Heidelberg & MI Cement Ltd company, we can see that
Heidelberg was very good. They were very prospective in their growth. They grow year to year.
Investors would likely to invest more in Heidelberg company.
But MI Company was prospective from 2013 to 2014. But from 2014 to 2015, M.I. Cement
Company had de-growth. So, investors would try not to invest more in M.I. cement Company.
Market value Segment Analysis
Heidelberg -
According to the P/E ratios, investors were very excited about Heidelberg's common stock as the
growth of the company was too good. There were no chances of bankruptcy for Heidelberg.
M.I. Cement -
According to the ratios, M.I. Cement Company's prospect was too bad. That's why investors
weren't excited about the shares of MI cement Company. The company was forwarding to
bankruptcy.

39 | P a g e
Ratio analysis at a glance
Ratios Formulas
2015 2014 2013
Current Ratio 1.96 X 1.46 X 2.33 X 1.66 X 2.91 X 2.23 X
Quick Ratio
1.65 X 1.32 X 1.96 X 1.54 X 2.46 X 2.06 X
Inventory Turnover 8.08 X 9.49 X 8.28 X 10.76 X 6.98 X 13.24 X
Daily Sales Outstanding 35 Days 53 Days 34 Days 53 Days 31 Days 35 Days
Fixed Asset Turnover 2.93 X 1.97 X 2.82 X 2.03 X 2.70 X 1.67 X
Total Asset Turnover 1.07 X 0.68 X 1.03 X 0.70 X 0.93 X 0.70 X
Debt Ratio 41% 51.3% 36% 50% 30% 42.82%
Net Profit Margin 13% 7.85% 11% 8.43% 15% 9.74%
Operating Profit Margin 16% 12% 12% 12% 17% 12%
Return on Assets 14% 5.38% 12% 5.94% 14% 6.80%
Return on Equity 24% 11.50% 18% 16.37% 20% 12.38%
Earnings Per Share (EPS) TK 24.81 TK 4.37 TK 20.88 TK 4.54 TK 26.09 TK 4.48
P/E Ratio 22.66 X 9 X 23.92 X 20.64 X 14.62 X 20.92 X

40 | P a g e
DuPont Analysis
Heidelberg Company
Dupont analysis is used to attain greater detail by dissecting a single ratio into two or more
related ratios. It gives an inner view or skeleton view of the activities of an organization.
ROA:
In 2013 Heidelberg’s net profit margin was 15% and total asset turnover was 0.93 times. But
from Dupont equation the value we get is 13%. If we analyze the equation, we can see that if we
deduct sales from both net profit margin and total assets turnover equation what remains is net
profit and total assets. So, if Heidelberg can increase their net profit by reducing costs or
increasing sales Dupont value will go up. At the same, if Heidelberg can reduce the amount of
debts, their total asset value will go up and ultimately the Dupont Value will go up. Now if we
look at the Heidelberg’s trend of Dupont, we can see Heidelberg is average in maintaining its
Dupont analysis. It means Heidelberg is average in maintaining in reducing costs or increasing
sales or reducing debts. In 2013, the value was 13.75%. On next year, the value went down and it
was 11.60%. But in final year, again the value rose up and became 14.35%. This scenario clearly
indicates that Heidelberg is very much sensible in their Dupont analysis. At the beginning they
made the calculation. They observed the flow of their work policy. Whenever they realized that
they need to improve their net profit margin policy or cost reduction policy or debt maintenance
policy, they took the appropriate decision. That’s why, may be in 2014 their Dupont value was
13.75%
11.60%
14.35%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
2012
2012.5
2013
2013.5
2014
2014.5
2015
2015.5
1 2 3
Percentagerange
Yearrange
ROA (Dupont Analysis) of Heidelberg Company
Year
Times

41 | P a g e
lower. But in 2015, the value went up which was even higher than the first year. This analysis
also indicates one more thing. If Heidelberg keeps reducing their cost or makes more per unit
profit it will lead the company to greater profitability.
ROE:
According to DuPont analysis, ROE is affected by three things: operating efficiency, which is
measured by profit margin; asset use efficiency, which is measured by total asset turnover; and
financial leverage, which is measured by the equity multiplier. In here, ROA is multiplied by
equity multiplier. The value of ROE will go up if net profit margin increases. Heidelberg is
efficient in handling their debt amount. Because, in 2013, the ROE value was 19.68%. On next
year, it became 21.49%. And in final year, the value rose to 24.26%. It shows, year by year, the
profit portion of shareholders’ is increasing. Because If Heidelberg can make profit from its debt
amount, then profit portion of shareholders will go up as except the interest charge, the whole
amount will go to shareholders hand. As the ROE value is going up gradually, we can say
Heidelberg is efficient in maintaining profit margin, asset turnover and financial leverage.
Moreover, for Heidelberg it will be wise to focus more on profit making ability to increase ROE,
ultimately shareholders profit portion.
19.68%
21.49%
24.26%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
2012
2012.5
2013
2013.5
2014
2014.5
2015
2015.5
1 2 3
Percentagerange
Yearrange
ROE (DuPont analysis) of Heidelberg Company
Year Times

42 | P a g e
M.I. Cement
Ratios Formulas 2015 2014 2013
M.I. M.I. M.I.
Return on Assets Net Profit Margin* Total Asset Turnover 5.38% 5.94% 6.80%
Return on Equity ROA*Equity multiplier 11.50% 16.37% 12.38%
Graph for ROA
Graph for ROE
0
2
4
6
8
10
12
14
16
2013 2014 2015
MI
Heidelburg
0
5
10
15
20
25
30
2013 2014 2015
MI
Heidelburg

43 | P a g e
MI-2013
In 2013, MI cement made 9.74%, on each doller of sales and assets were turned over 0.7 times
during 2013. The company returned 6.8 % on it's assets. The ROA of 6.8% all goes to common
shareholders. The ROE was 12.38%, which was greater than ROA. We have multiplide the
ROA with the equity multiplier.
MI-2014
In the year 2014, MI cement made 8.43%, on each doller of sales and assets were turned over
0.7 times. The company returned 5.94 % on it's assets. The ROA of 5.94% all goes to common
shareholders. The ROE was 16.37%, which was greater than ROA. We have multiplide the
ROA with the equity multiplier.
MI-2015
In the year 2015, MI cement made 7.85%, on each doller of sales and assets were turned over
0.68 times. The company returned 5.38 % on it's assets. The ROA of 5.38% all goes to common
shareholders. The ROE was 11.5%, which was greater than ROA. We have multiplide the ROA
with the equity multiplier. The DuPont analysis shows that MI cement's ROE is satisfactory. But
after increasing in 2014, it had gone down in 2015. MI Cement Company Limited can use the
DuPont analysis to improve their performances, like increasing the profit margin. They can
reduce the price & increase the volume of sales. Or, they can check with production, marketing,
sales, engineering & operation section, where they can reduce the prices & increase the profit
margin. Also they can check with financial staffs, about the asset investments to improve the
asset management ratio.

44 | P a g e
Financial Forecasting & Adjusted Statements

45 | P a g e
MI Cement Factory Limited
Statement of Financial Position (Projected)
As at 30 June 2016
ASSETS Taka
(Millions)
Calculated value
(for 3 years)
Simple Moving
Average
Non-current assets 4134.50 12403.49 4134.50
Property, plant and equipment 4071.08 12213.24 4071.08
Capital work in progress 63.42 190.26 63.42
Investment in associate companies 63.53 190.59 63.53
Current Assets 6865.99 20597.98 6865.99
Investment in shares 112.68 338.04 112.68
Inventories 593.84 1781.53 593.84
Trade Receivables 1002.25 3006.75 1002.25
Current account with sister concerns 830.86 2492.57 830.86
Other receivables 73.55 220.64 73.55
Advances, deposits and prepayments 314.96 944.88 314.96
Advance Income Tax 739.32 2217.95 739.32
Cash and cash equivalents 3198.51 9595.52 3198.51
TOTAL ASSETS 11064.03 33192.09 11064.03
EQUITY AND LIABILITIES
Shareholders' equity 5716.38 17149.14 5716.38
Share capital 1485.00 4455 1485.00
Share premium 2956.56 8869.68 2956.56
Retained earnings 1056.29 3168.86 1056.29
Revaluation reserve 218.53 655.59 218.53
LIABILITIES
Non current liabilities 1270.12 3810.37 1270.12
long term borrowing net off current
maturity
941.61 2824.83 941.61
Liabilities for gratuity 39.32 117.95 39.32
Deferred tax liability 289.20 867.6 289.20
Current liabilities and provisions 4077.52 12232.56 4077.52
trade payables 123.66 370.99 123.66
Other payables 116.72 350.17 116.72
Current portion of long term borrowings 534.02 1602.05 534.02
Short term loan 2924.00 8772 2924.00
Provision for tax liabilities 309.31 927.94 309.31
Liabilities for WPPF 43.77 131.31 43.77
Payable to IPO applicants 12.81 38.42 12.81
Unclaimed dividend 13.20 39.61 13.20
TOTAL LIABILITIES 5347.65 16042.95 5347.65
TOTAL EQUITY AND LIABILITIES 11064.03 33192.09 11064.03
Net Asset Value per Share 38.49 115.48 38.49

46 | P a g e
Statement of Comprehensive Income (Projected)
For the year ended 30 June 2016
Taka (million) Calculated value
(for 3 years)
Simple Moving
Average
Revenue 7694.86 23084.57 7694.86
Cost of sales -6437.82 19313.45 6437.82
Gross profit 1257.04 3771.12 1257.04
Other operating income 27.64 82.92 27.64
Administrative expenses -127.79 -383.38 -127.79
Selling and distribution expenses -242.13 -726.4 -242.13
Operating profit 914.74 2744.23 914.74
Non-operating income 22.04 66.11 22.04
Financial income/(expenses) -41.03 -123.09 -41.03
Share of profit from associates 23.48 70.44 23.48
Profit before WPPF & income tax 919.24 2757.71 919.24
Workers' profit participation fund (WPPF) -43.77 -131.31 -43.77
Profit before income tax 875.46 2626.38 875.46
Income Tax Expenses:
Current Tax -144.20 -432.59 -144.20
Deferred tax -68.39 -205.18 -68.39
Net profit after tax for the projection
year
662.86 1988.59 662.86

47 | P a g e
HeidelbergCement Bangladesh Limited
Statement of Financial Position (Projected)
As at 31st December 2016
Taka (Million) Calculated Value
(for 3 years)
Simple moving
average
Assets
Non current assets
Property, plant equipment 3568.33 10705 3568.33
Intangible assets 0.41 1.243 0.41
Total non-current assets 3655.94 10967.83 3655.94
Current Assets 0.00
Inventories 1034.92 3104.75 1034.92
Trade and other receivables 961.58 2884.75 961.58
Advances, deposits and
prepayments
91.90 275.71 91.90
Cash & cashequivalents 4468.18 13404.54 4468.18
Total current assets 6556.25 19668.76 6556.25
Total assets 10222.20 30666.59 10222.20
Equity & Liabilities
Capital & Reserves
Share capital 565.03 1695.09 565.03
Capital reserves 605.65 1816.95 605.65
General reserve 15.00 45 15.00
Dividend equalization fund 8.60 25.8 8.60
6598.14 19794.42 6598.14
Non-current liabilities
Suppliers' credit blocked 2.56 7.68 2.56
Quasi equity loan 122.63 367.89 122.63
ADP loan 12.69 38.07 12.69
Retirement benefit obligations
(gratuity)
102.97 308.9 102.97
Total non current liabilities 844.34 2533.03 844.34
Current liabilities
Trade and other payables 2453.99 7361.96 2453.99
Provision for other liabilities &
charges
97.85 293.54 97.85
Provision for income tax 101.50 304.49 101.50
Total current liabilities 2779.71 8339.13 2779.71
Total liabilities 3624.06 10872.17 3624.06
Total equity and liabilities 10222.20 30666.6 10222.20

48 | P a g e
Statement of Comprehensive Income (Projected)
For the year ended 31st December 2016
Taka (million) Calculated Value
(for 3 years)
Simple moving
average
Sales 10315.40 30946.21 10315.40
Cost of goods sold -8029.62 -24088.86 -8029.62
Gross profit 2285.78 6857.34 2285.78
Warehouse, distribution and selling
expenses
-286.09 -858.26 -286.09
Non-operating (expenses)/income -5.92 -17.76 -5.92
Net finance income 404.84 1214.53 404.84
Contribution to workers' participation
fund
-97.85 -293.55 -97.85
Profit before tax 1859.17 5577.51 1859.17
Income tax expense -507.30 -1521.89 -507.30
Current year -484.00 -1452 -484.00
Prior year -12.02 -36.06 -12.02
Deferred tax income /(expenses) -11.28 -33.83 -11.28
Profit for the year 1351.87 4055.6 1351.87
Other comprehensive income - - -
Total comprehensive income 1351.87 4055.6 1351.87
Above have represented projected statements namely financial position and statement of
comprehensive income for Heidelberg and MI cement. We have applied here Simple moving
average method. Suppose, profit for a company last three period Tk 100, 200, and 150. The
projected value for the new period is (100+200+150)/3 equal to Tk 150. So, company has the
target to grow their profit above tk 150.

49 | P a g e
Projected Ratio Values Based on above Statements
Ratios (Projected) Heidelberg
(X)
MI (X)
Current Ratio 2.36 1.68
Quick Ratio 1.99 1.54
Inventory Turnover 7.76 10.84
Daily Sales Outstanding 33.56 46.89
Fixed Asset Turnover 2.89 1.89
Total Asset Turnover 1.01 0.70
Debt Ratio 35% 48%
Net Profit Margin 13% 9%
Operating Profit Margin 15% 12%
Return on Assets 13% 6%
Return on Equity 21% 12%
Earnings Per Share (EPS) 23.93 4.46
P/E Ratio 23.53 20.99

50 | P a g e
Adjusting Statements
MI Cement Factory Limited
Statement of Adjusted Financial Position (5% Inflated from Projection)
As at 30 June 2016
ASSETS Taka
(Millions) 5%
Inflated
Taka (Million) –
Projected
Adjusted amount
Taka (million)
Non-current assets 4341.22 4134.50 206.72
Property, plant and equipment 4274.63 4071.08 203.55
Investment in associate companies 66.71 63.53 3.18
Current Assets 7209.29 6865.99 343.30
Investment in shares 118.31 112.68 5.63
Inventories 623.54 593.84 29.69
Trade Receivables 1052.36 1002.25 50.11
Current account with sister concerns 872.40 830.86 41.54
Other receivables 77.22 73.55 3.68
Advance Income Tax 776.28 739.32 36.97
Cash and cash equivalents 3358.43 3198.51 159.93
TOTAL ASSETS 11617.23 11064.03 553.20
EQUITY AND LIABILITIES
Shareholders' equity 6002.20 5716.38 285.82
Share capital 1559.25 1485.00 74.25
Share premium 3104.39 2956.56 147.83
Revaluation reserve 229.46 218.53 10.93
LIABILITIES
Non current liabilities 1333.63 1270.12 63.51
long term borrowing net off current maturity 988.69 941.61 47.08
Liabilities for gratuity 41.28 39.32 1.97
Current liabilities and provisions 4281.40 4077.52 203.88
trade payables 129.85 123.66 6.18
Other payables 122.56 116.72 5.84
Current portion of long term borrowings 560.72 534.02 26.70
Short term loan 3070.20 2924.00 146.20
Provision for tax liabilities 324.78 309.31 15.47
Liabilities for WPPF 45.96 43.77 2.19
Payable to IPO applicants 13.45 12.81 0.64
TOTAL LIABILITIES 5615.03 5347.65 267.38
TOTAL EQUITY AND LIABILITIES 11617.23 11064.03 553.20
Net Asset Value per Share 40.42 38.49 1.92

51 | P a g e
Adjusted Statement of Comprehensive Income (5% inflated from projection)
For the year ended 30 June 2016
Taka
(Millions) 5%
Inflated
Taka (Million) –
Projected
Adjusted amount
Taka (million)
Revenue 8079.60 7694.86 384.74
Cost of sales 6759.71 -6437.82 321.89
Gross profit 1319.89 1257.04 62.85
Selling and distribution expenses -254.24 -242.13 -12.11
Non-operating income 23.14 22.04 1.10
Financial income/(expenses) -43.08 -41.03 -2.05
Share of profit from associates 24.65 23.48 1.17
Profit before WPPF & income tax 965.20 919.24 45.96
Workers' profit participation fund (WPPF) -45.96 -43.77 -2.19
Profit before income tax 919.23 875.46 43.77
Income Tax Expenses:
Current Tax -151.41 -144.20 -7.21
Deferred tax -71.81 -68.39 -3.42
Net profit after tax for the year 696.01 662.86 33.14

52 | P a g e
HeidelbergCement Bangladesh Limited
Statement of Adjusted Financial Position (5% Inflated from projection)
As at 31st December 2016
Taka (Millions) 5%
Inflated
Taka (Million) –
Projected
Adjusted amount
Taka (million)
Assets
Non current assets
Property, plant equipment 3746.75 3568.33 178.42
Intangible assets 0.44 0.41 0.02
Total non-current assets 3838.74 3655.94 182.80
Current Assets
Inventories 1086.66 1034.92 51.75
Trade and other receivables 1009.66 961.58 48.08
Cash & cashequivalents 4691.59 4468.18 223.41
Total current assets 6884.07 6556.25 327.81
Total assets 10733.31 10222.20 511.11
Equity & Liabilities
Capital & Reserves
Share capital 593.28 565.03 28.25
Capital reserves 635.93 605.65 30.28
General reserve 15.75 15.00 0.75
Dividend equalization fund 9.03 8.60 0.43
6928.05 6598.14 329.91
Non-current liabilities
Suppliers' credit blocked 2.69 2.56 0.13
Quasi equity loan 128.76 122.63 6.13
ADP loan 13.32 12.69 0.63
Retirement benefit obligations
(gratuity)
108.12 102.97 5.15
Total non current liabilities 886.56 844.34 42.22
Current liabilities
Trade and other payables 2576.69 2453.99 122.70
Provision for other liabilities &
charges
102.74 97.85 4.89
Provision for income tax 106.57 101.50 5.07
Total current liabilities 2918.70 2779.71 138.99
Total liabilities 3805.26 3624.06 181.20
Total equity and liabilities 10733.31 10222.20 511.11

53 | P a g e
Adjusted Statement of Comprehensive Income (5% inflated from projection)
For the year ended 31st December 2016
Taka (Millions)
5% Inflated
Taka (Million) –
Projected
Adjusted
amount Taka
(million)
Sales 10831.17 10315.40 515.77
Cost of goods sold -8431.10 -8029.62 -401.48
Gross profit 2400.07 2285.78 114.29
Warehouse, distribution and selling
expenses
-300.39 -286.09 -14.30
Non-operating (expenses)/income -6.22 -5.92 -0.30
Net finance income 425.09 404.84 20.24
Contribution to workers' participation
fund
-102.74 -97.85 -4.89
Profit before tax 1952.13 1859.17 92.96
Income tax expense -532.66 -507.30 -25.36
Current year -508.20 -484.00 -24.20
Prior year -12.62 -12.02 -0.60
Deferred tax income /(expenses) -11.84 -11.28 -0.56
Profit for the year 1419.46 1351.87 67.59
Other comprehensive income - -
Total comprehensive income 1419.46 1351.87 67.59

54 | P a g e
Findings and Recommendation
(a) Findings
 We have seen that Heidelberg Company’s current liabilities were increasing day by day.
They continuously with short term credits. On the other hand, the scenario of MI Cement
Company is drastic. They have much current liabilities than their current assets. Also MI
Company’s leverages were so much that, they failed to manage their assets.
 Inventories, that means the unused stocks of MI Company was growing higher not only
that both the company’s inventory peaking upper. But the condition of MI Company’s
inventory management was too poor. Day by day MI Company’s inventory were
increasing, where, Heidelberg was doing good from the year 2014 to 2015.
 Heidelberg Company’s DSO was increasing day by day. But it was not as high as MI
cement. MI Cement Company took average 47 days to collect the credit amounts from
buyers. It is alarming for MI cement to manage internal cash flow.
 In the field of Debt management MI cement has almost 50% dependency on leverage but
in terms of that sales are not growing that level.
 Operating profit of MI cement stuck at 12% that means have some backlogs or inventory
management functions have failure to augment enough revenue.
 Very poor management of resources visible in MI cement internal investment portfolio
functions as below 10% returns on assets.
 Earnings per share of MI have vastly differed from Heidelberg as poor valuation in
profitability.

55 | P a g e
(b) Recommendation
 As Heidelberg a German based cement manufacturing firm they need not depends on
long term leverages but should focus mostly on short term cash flows.
 MI cement needs to strategic focus on credit collection procedure for maintaining short
term cash flows and growth in profitability.
 MI cement has prospect in market as their export is growing majestically but need to
correlate sales and inventory management much more proficiently.
 Dependency on long term loans are growing for MI cement but utilization of that amount
in different portfolio is generally important. Interest payment may keep upward pressure
in future for MI.
 MI cement and Heidelberg both have elementary pressure in cost management functions
as growth is running arithmetic order. Need to follow strategic cost management practice
adequately to face-off external threats.
 Investment portfolio for both the organization need to diversify in value generating
criterion as ordinary shareholders focus on growth of a firm and required fruitful returns
on their investments.
 MI requires capturing feasible market promptly with multi-dimensional marketing tools
and tactics and main focus point must be wealth generation for stakeholders.

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