ASSIGNMENT

ON
FINANCIAL RATIO ANALYSIS

Prepared For:
Shanila Taneem (SnT)
FIN 254
SECTION 9

Prepared By:

Introduction:
Padma Cement Limited
Padma Cement Limited was incorporated as a private limited company in 1998 under Companies
Act 1994. Subsequently the company was converted into public limited company with an
authorized capital of Tk. 300 million divided into 30 million ordinary shares of Tk.10 each with
a view to float its share to the public for an amount of Tk. 138 million. Present paid-up capital of
the Company is Tk. 138 million. After the completion of the IPO the total paid up capital will be
Tk. 276 million.The Padma Cement Limited (PCL) is one of the latest Portland Cement
Manufacturer in Bangladesh. The company is located at Baghabari ghat, Shajadpur, Sirajgonj, on
a land measuring 6.11 acres which has a good communication facility.

Lafarge Surma Limited

Lafarge Surma Cement Limited was incorporated on 11 November 1997 as a private limited
company in Bangladesh under the Companies Act 1994. The Company has subsequently been
converted into a public limited company on 20 January 2003 and went for Initial Public Offering
of shares in November 2003 which was fully subscribed and issued. The shares have been listed
and are being traded in Dhaka and Chittagong Stock Exchanges. Presently the Company has two
subsidiaries in India. The main objectives of the subsidiaries are to support the holding company.
The subsidiaries are Lum Mawshun Minerals Private Limited and Lafarge Umiam Mining
Private Limited.

Modern Cement Limited

Modern Cement Limited has started their mission in cement industry on01 october 2000 as a
public limited company in Bangladesh under the Companies Act 1994. They are one of the
leading cement company in Bangladesh. Their manufacturing plant is situated in gazaria of
Munshiganj district.On the payroll of the company,there werw 18 officers,57 staff and wokers.

Current Ratio: Current Assets/Current Liabilities

2007
Padma
Modern
Lafarge
Industry Average

57443734/160551025
49579758/117211996
1478984/5547407
(0.358+0.423+0.267)/3

0.358 x
0.423x
0.267x
0.349x

Interpretation:
Industry Average in 2007 is 0.349. Comparing to industry average padma and moderns current ratio are
standing over average rate. Lafarge is in below average industry rate. Lafarge is doing bad.
2008
Padma
Modern
Lafarge
Industry Average

36257201/114784626
58272544/133762450
2444556/7063824
(0.316+0.436+0.346)/3

0.316x
0.436x
0.346x
0.366x

Interpretation:
Industry Average in 2008 is .366 which is greater than 2007. Comparing to 2007 padmas current ratio
falls down. Moderns and Lafargs ratio rises up. Lafarge and Padma current ratio is in below industry
average.
2009
Padma
Modern
Lafarge
Industry Average

38450370/131295834
49579758/117211996
1478984/5547407
(0.293+0.423+0.267)/3

0.293x
0.423x
0.267x
0.328x

Interpretation:
Industry average in 2009 is 0.328 which is less than previous years. Comparing to 2008 all the companies
current ratio falls down. Lafarge and Padmas current ratio are in below industry average.

Current Ratio
2007
0.36
0.42
0.27
0.35

Padma
Modern
Lafarge
Industry Average

2008
0.32
0.44
0.35
0.37

0.50
0.45
0.40
0.35
0.30
0.25
0.20
0.15
0.10
0.05
0.00

2009
0.29
0.42
0.27
0.33

2007
2008
2009

Padma

Modern

Lafarge

Industry
Average

Inventory Turnover: Sales/Inventories

2007
Padma
Modern
Lafarge
Industry Average

95823187/35724807
22359190/7044542
2399876/593909
(2.68+3.17+4.05)/3

2.68x
3.17x
4.05x
3.3x

Interpretation:
Industry average in 2007 is 3.3. Padma and Moderns inventory turnover is in below industry average.
Lafarge has 4.05 industry average, they are doing well in the market.

2008
Padma
Modern
Lafarge
Industry Average

92675330/23741560
20814311/4457026
6211938/1006384
(3.90+4.67+6.17)/3

3.90x
4.67x
6.17x
4.91

Interpretation:
Compare to 2007 in 2008 industry average rises in 3.3 to 4.91 and except Lafarge, Padma and moderns
inventory turnover is in below industry average, they are not doing well.

2009
Padma
Modern
Lafarge
Industry Average

51301186/26762164
10622883/2207099
7543725/1198739
(1.91+4.81+6.29)/3

1.91x
4.81x
6.29x
4.34x

Interpretation:
In 2009 Industry average is 4.34. padma has 1.91 which is very poor in this sector. Lafarge and moderns
have inventory turnover is greater than industry average.

Inventory Turnover
2007
2.68
3.17
4.05
3.30

Padma
Modern
Lafarge
Industry Average

2008
3.90
4.67
6.17
4.91

2009
1.91
4.81
6.29
4.34

7.00
6.00
5.00
4.00

2007

3.00

2008

2.00

2009

1.00
0.00
Padma

Modern

Lafarge

Industry
Average

Days Sales Outstanding (DSO): Receivable/(Annual Sales/365)

2007
Padma
Modern
Lafarge
Industry Average

4601678/(95823187/365)
32080688/(22290416/365)
56455/(2399876/365)
(17.5+25.5+8.6)/3

17.5 Days
25.5 Days
8.6 Days
17.2 Days

Interpretation:
Industry average in 2007 is 17.2. Where padma and modern is above industry average but Lafarge is in
below industry average.

2008
Padma
Modern
Lafarge
Industry Average

1467319/(92675330/365)
5193915/(20814311/365)
640649/(6211938/365)
(5.78+29.08+37.60)/3

5.78 Days
29.08 Days
37.60 Days
24.15 Days

Interpretation:
DSOs 2008 industry average is 24.15 days. Modern and Lafarge is in above industry average but Padma
is in below industry average.
2009
Padma
Modern
Lafarge
Industry Average

305698/(51301186/365)
3527262/(10622704/365)
388088/(7543725/365)
(2.18+29.04+18.8)/3

2.18 Days
29.04 Days
18.8 Days
16.67 Days

Interpretation:
Industry average in 2009 is 16.67. Modern and Lafarge is in above industry average where as Padma is
in below industry average which is very poor in DSO.

Days Sales Outstanding (DSO):

2007
Padma
Modern
Lafarge
Industry
Average

2008

2009

17.5
25.5
8.6

5.78
29.08
37.6

2.18
29.04
18.8

17.2

24.15

16.67

0.6
0.5
0.4
0.3
0.2

2007

0.1

2008
2009

0
-0.1
-0.2
-0.3
-0.4

Padma

Modern

Lafarge

Industry
Average

Fixed Asset Turnover Ratio: Sales/Net Fixed Asset

2007
Padma
Modern
Lafarge
Industry Average

95823187/222546157
22359190/193427426
2399876/15716123
(0.430+0.116+0.153)/3

0.430x
0.116x
0.153x
0.233x

Interpretation:
Industry average in 2007s Fixed Asset Turnover Ratio is .0233. Modern and Lafarge has 0.116 and 0.153
respectively. Padma is in a good condition in the industry.
2008
Padma
Modern
Lafarge
Industry Average

92675330/219136093
20814311/193427426
6211938/15194283
(0.422+0.108+0.409)/3

0.422x
0.108x
0.409x
0.313x

Interpretation:
In 2008 fixed asset has industry average of 0.313. Padma and Lafarge are in a good condition where as
Mordern is in far below from industry average.
2009
Padma
Modern
Lafarge
Industry Average

51301186/216593141
10622883/181159670
7543725/14694043
(0.240+0.059+0.513)/3

0.240x
0.059x
0.513x
0.271x

Interpretation:
In 2009 fixed asset turnover has industry average of 0.217. Here Lafarge is far away from modern and
padma. And Lafarge is in very high position from industry average.

Fixed Asset Turnover Ratio:

2007
Padma
Modern
Lafarge
Industry
Average

2008

2009

0.43
0.116
0.153

0.422
0.108
0.409

0.24
0.059
0.513

0.233

0.313

0.271

0.6
0.5
0.4
0.3
0.2

2007

0.1

2008

2009

-0.1
-0.2
-0.3
-0.4

Padma

Modern

Lafarge

Industry
Average

Total Asset Turnover: Sales/Total Asset

2007
Padma
Modern
Lafarge
Industry Average

95823187/(222546157+57443734)
22359190/256255991
2399876/17195107
(0.341+0.0873+0.140)/3

0.341x
0.0873x
0.140x
0.189x

Interpretation:
Industry Average in 2007 is 0.189. Padmas turnover is above industry average and the other two
companies are below industry average. In asset turnover padma is in the best position the other two will
need time to recover.
2008
Padma
Modern
Lafarge
Industry Average

92675330/(222546157+36257201)
20814311/251699970
6211938/17638839
(0.036+0.827+0.352)/3

0.036x
0.827x
0.352x
0.405x

Interpretation:
In this year only moderns turnover is above industry average. Padma and moderns turnover ratio are
below industry average.
Total asset turnover
2009
Padma
Modern
Lafarge
Industry Average

51301186/(218792753+38450370)
10622883/237046579
7543725/17012631
(0.199+0.045+0.440)/3

0.199x
0.045x
0.440x
0.228x

Interpretation:
In 2009 lafarges turnover ratio is above industry average this companys ratio has rises to 0.440. padma
and moderns ratio is below industry average.

Total Asset Turnover:

2007
Padma
Modern
Lafarge
Industry
Average

2008

2009

0.341
0.0873
0.14

0.036
0.827
0.352

0.199
0.045
0.44

0.189

0.405

0.228

0.6
0.5
0.4
0.3
0.2

2007

0.1

2008

2009

-0.1
-0.2
-0.3
-0.4

Padma

Modern

Lafarge

Industry
Average

Debt Ratio: Total Debt/Total Assets

2007
Padma
Modern
Lafarge
Industry Average

71395316/279989891
113359336/256255991
8993721/17195107
(0.255+0.442+0.520)/3

25.5%
44.2%
52.0%
40.6%

Interpretation:
In 2007 among all of them Padma is doing well cause it has the lowest percentage in debt ratio. Lafarge
and modern has higher debt ratio than industry average.

2008
Padma
Modern
Lafarge
Industry Average

1467319/258803358
125747614/251699970
8122543/17195107
(56.71+49.9+47.2)/3

56.71%
49.9%
47.2%
51.27%

Interpretation:
In 2008 padmas debt ratio is higher than industry average now it is in risky position. Modern and Lafarge
have lower debt ratio.

2009
Padma
Modern
Lafarge
Industry Average

154378650/257243123
17474852/237046579
7971337/17012631
(60.1+07.4+47.0)/3

60.1%
07.4%
47.0%
38.17%

Interpretation:
Modern is in very good position where Lafarge and padmas debt ratio are above industry average.

Debt Ratio:

Padma
Modern
Lafarge
Industry
Average

2007
25.5
44.2
52

2008
56.71
49.9
47.2

2009
60.1
7.4
47

40.6

51.27

38.17

0.6
0.5
0.4
0.3
0.2

2007

0.1

2008

2009

-0.1
-0.2
-0.3
-0.4

Padma

Modern

Lafarge

Industry
Average

Times Interest Earned (TIE): EBIT/Interest Expense

2007
Padma
Modern
Lafarge
Industry Average

(6097923)/24733336
(11747721)/11333606
(95971)/1103467
[(0.247)+(1.037)+(0.087)]/3

(0.247)x
(1.037)x
(0.087)x
(0.457)x

Interpretation:
In 2007 lafarge and padmas TIE ratio is lower than industry average it is in risky position. Only modern
has greater TIE ratio than industry average.

2008
Padma
Modern
Lafarge
Industry Average

(4035439)/35605118
(16521223)/14388277
2062507/1104464
[(0.11)+(1.15)+1.87]/3

(0.11)x
(1.15)x
1.87x
0.203x

Interpretation:
In this year Lafarge TIE ratio is in good position. Lafarge and Moderns Tie ratio is above industry
average they are in risk.

2009
Padma
Modern
Lafarge
Industry Average

(3507847)/257243123
(20419924)/8218207
1939962/906794
[(0.02)+(2.49)+2.14]/3

(0.02)x
(2.49)x
2.14x
(0.123x)

Interpretation:
In this year likely 2007 and 2008 lafarge is doing good. There ratio is rising day by day. Other companies
are worst.

Times Interest Earned (TIE):

Padma
Modern
Lafarge
Industry
Average

2007
0.247
1.037
0.087

2008
0.11
1.15
1.87

2009
0.02
2.49
2.14

0.457

0.203

0.123

0.6
0.5
0.4
0.3
0.2

2007

0.1

2008

2009

-0.1
-0.2
-0.3
-0.4

Padma

Modern

Lafarge

Industry
Average

Profit Margin on Sales: Net Income/Sales

2007
Padma
Modern
Lafarge
Industry Average

(43171682)/95823187
(34179005)/22359190
(855383)/2399876
[(45.2)+(152.9)+(35.6)]/3

(45.2) %
(152.9) %
(35.6) %
(77.9)%

Interpretation:
Padma and Lafarge is in good position. Modern has poor profit margin ratio than industry average.

2008
Padma
Modern
Lafarge
Industry Average

39694607/92675230
(55285480)/20814311
635195/6211938
[0.102+(2.66)+0.431]/3

0.431%
(2.66) %
0.102%
(0.709)%

Interpretation:
Modern is in a bad position Lafarge and Padma has profit margin ratio above than industry average.

2009
Padma
Modern
Lafarge
Industry Average

(40234944)/51301186
(75705404)/10622883
582925/7543725
[(0.784)+(0.741)+0.08]/3

(0.784) %
(0.741) %
0.08%
(0.482)%

Interpretation:
In 2009 padma falls down in profit margin ratio as well as modern. Only Lafarge is doing well in profit
margin ratio.

Profit Margin on Sales:

2007
Padma
Modern
Lafarge
Industry
Average

2008

2009

-45.2
-152.9
-35.6

0.431
-2.66
0.102

-0.784
-0.741
0.08

-77.9

-70.90%

-0.482

0.6
0.5
0.4
0.3
0.2

2007

0.1

2008

2009

-0.1
-0.2
-0.3
-0.4

Padma

Modern

Lafarge

Industry
Average

Return On Total Assets (ROA): Net Income/Total Assets

2007
Padma
Modern
Lafarge
Industry Average

(43171682)/279989899
(34179005)/22359190
(855383)/17195107
[(15.0)+(15.3)+(4.0)]/3

(15) %
(15.3) %
(4.00) %
(11.43)%

Interpretation:
Lafarge has greater ratio than industry average of ROA. Padma and Modern are doing poor.

2008
Padma
Modern
Lafarge
Industry Average

(39694607)/2508803358
(55285480)/251699970
635195/17638839
[(15.2)+ (22.0)+ 3.6]/3

(15.2) %
(22.0) %
3.6%
(11.2)%

Interpretation:
In 2008 again Lafarge has done well Padma and Modern has ROA ratio below industry average.

2009
Padma
Modern
Lafarge
Industry Average

(40234944)/22703784
(75705404)/237046579
582925/17012631
[(1.77)+(13.9)+3.4]/3

Interpretation:
Padma and Lafarge doing well only modern has Roa ratio less than industry average.

(1.77) %
(13.9) %
3.4%
(4.09)%

Return On Total Assets (ROA):

2007
-15
-15.3
-4

2008
2009
-11.2
-1.77
-2.66
-13.9
0.102
3.4
-11.43% 7090.00% 409.00%

Padma
Modern
Lafarge
Industry
Average

0.6
0.5
0.4
0.3
0.2

2007

0.1

2008
2009

0
-0.1
-0.2
-0.3
-0.4

Padma

Modern

Lafarge

Industry
Average

Return On Common Equity (ROE): Net Income/Common Equity

2007
Padma
Modern
Lafarge
Industry Average

(431716822)/55518750
(75705404)/97517596
(855383)/3534891
[(0.78)+(0.76)+(0.24)]/3

(78.0) %
(76.0) %
(24.0) %
(59.3)%

Interpretation:
Padma and modern is poor compare to the industry average where as Lafarge quiet ok in industry
average.

2008
Padma
Modern
Lafarge
Industry Average

(39694607)/158241435
(55285480)/117937520
635195/4170086
[(0.251) +(0.469) +0.152]/3

(25.1) %
(46.9) %
15.2 %
(29.1) %

Interpretation:
Lafarge doing well, padma is ok only modern has ROE ratio is very less than industry average.

2009
Padma
Modern
Lafarge
Industry Average

(40234944)/227037849
(75705404)/97517596
582925/4753011
[(0.177) +(0.78) +0.123]/3

(17.7) %
(78.0) %
12.3 %
(27.8) %

Interpretation:
Lafarge has greater ratio than industry average of ROE. Padma and Modern are doing poor.

Return On Common Equity (ROE):

2007
-78
-76
-24
5930.00%

Padma
Modern
Lafarge
Industry
Average

2008
-25.1
-46.9
15.2

2009
-27.8
12.3
-78

-29.1

-17.7

0.6
0.5
0.4
0.3
0.2

2007

0.1

2008

2009

-0.1
-0.2
-0.3
-0.4

Padma

Modern

Lafarge

Industry
Average

Price/Earnings (P/E): Price Per Share/ Earnings Per Share

2007
Padma
Modern
Lafarge
Industry Average

10/1.44
10/.730
100/(14.73)
[6.94+13.7+(6.79)]/3

6.94 x
13.7 x
(6.79) x
4.61 x

Interpretation:
Lafarge is in lower position than industry average, where as padma and modern are higher in P/E.

2008
Padma
Modern
Lafarge
Industry Average

10/1.44
10/(0.954)
100/10.94
[6.94+(10.48)+ 9.14]/3

6.94 x
(10.48) x
9.14 x
1.87 x

Interpretation:
In 2008 Modern is in a poor condition and the other two companies are in a healthy position.

2009
Padma
Modern
Lafarge
Industry Average

10/1.46
10/1.179
100/10.04
(6.85+8.48+9.96)/3

Interpretation:
In 2009 padma falls down in P/E Lafarge and Modern are doing well in P/E.

6.85 x
8.48 x
9.96 x
8.43 x

Price/Earnings (P/E):

2007
Padma
Modern
Lafarge
Industry
Average

2008

2009

6.94 6.94 x
13.7
-10.48
-6.79
9.14

8.43
9.96
8.48

4.61

6.85

1.87

0.6
0.5
0.4
0.3
0.2

2007

0.1

2008
2009

0
-0.1
-0.2
-0.3
-0.4

Padma

Modern

Lafarge

Industry
Average

Book Value Per Share (BVPS): Common Equity/Common Shares Outstanding

2007
Padma
Modern
Lafarge
Industry Average

55518750/276000000
139043995/173223000
3534891/5806868
(0.20+0.80+0.61)/3

0.20 Tk.
0.80 Tk
0.61 Tk.
0.54 Tk

Interpretation:
Padma is lower than the industry average but Modern and Lafarge are doing well.

2008
Padma
Modern
Lafarge
Industry Average

15824143/276000000
117937520/173223000
4170086/5806868
(0.057+0.681+0.72)/3

0.057 Tk.
0.681 Tk.
0.72 Tk.
0.486 Tk

Interpretation:
In 2008 Padma decreased more than 2007 but other two are in a good position.

2009
Padma
Modern
Lafarge
Industry Average

22703784/276000000
97517596/173223000
4753011/5806868
(0.08+0.56+0.82)/3

0.08 Tk.
0.56 Tk.
0.82 Tk.
0.49 Tk

Interpretation:
In 2009 Padma is in previous position that means below industry average , where as Modern and Lafarge
are doing well.

Book Value Per Share (BVPS):

2007
Padma
Modern
Lafarge
Industry
Average

2008

2009

0.2
0.8
0.61

0.057
0.681
0.72

0.08
0.56
0.82

0.54

0.486

0.49

0.6
0.5
0.4
0.3
0.2

2007

0.1

2008

2009

-0.1
-0.2
-0.3
-0.4

Padma

Modern

Lafarge

Industry
Average

Cash Flow Per Share (CFPS): (Net Income + Depreciation +

Amortization)/Common Shares Outstanding

2008
Delta Life Insurance
Pragati Life Insurance

[(34179005+14121907)/173223000
(855383+24377+10893)/5806868

0.116 Tk.
0.470 Tk.

[(39694607)+341006]/276000000
(635195+27943+9232)/5806868

0.146 Tk.
0.116 Tk.

[(40234944)+260203]/276000000
[(75705404)+14820120]/173223000

0.145 Tk.
0.352 Tk.

Interpretation:

2009
Delta Life Insurance
Pragati Life Insurance

Interpretation:

2010
Delta Life Insurance
Pragati Life Insurance

Interpretation:

Conclusion
After looking at a glance in this sector of Cement Industry where we have analysis on Padma
Cement Limited, Lafarge Surma Limited and Modern Cement Limited we came to a conclusion
that this is a very potential grown up industry where few company are doing well and the other
companies are trying to develop and make profit in the coming future. Basically most of the
companies are concentrating on expansion but very few companies like Lafarge Surma are
taking profit.