1

Term paper on

Ratio Analysis of Meghna Cement

Mills Ltd. (MCML) & Confidence
Cement Ltd. (CCL)

Date of Submission: December 22, 2009

SUBMITTED TO

Mr. Asaduzzaman Arman

Lecturer
Department of Accounting
School of Business
UITS, Chittagong

SUBMITTED BY

A. F. M. NAHID PARVEZ
ID: 09535013
Batch 32 (RMBA)
Member of Group 3

Course Title
Financial Accounting
Course code: 505
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Group Members
Group No: 3

Name ID
Kazi Ahsanul Hoque 09535029
Riton Nondi 09535036
Shakil Mahmud morshed 09535021
A.F.M. Nahid Parvez 09535013
Md. Mazharul Islam 09535028

Letter of Transmittal
 3

Date: 22nd December, 2009

Mr. Asaduzzaman Arman

Lecturer
Department of Accounting
School of Business
University of Information Technology & Science
Chittagong.

Subject: Submission of Term Paper on Ratio Analysis of Meghna

Cement Mills Ltd. (MCML) & Confidence Cement Ltd. (CCL).

Dear Sir,

Here we are submitting our Term Paper on “Ratio Analysis of Meghna

Cement Mills Ltd. (MCML) & Confidence Cement Ltd. (CCL)”
prescribed by you in your course “Financial Accounting”. For this
Purpose, we have gone through internet, company annual report, articles
and class lecture sheets for the relevant information of the assigned topic.

Please call me for any further information at your convenient time and
place.

Yours truly,

Group: 03
Semester-I
Masters of Business Administration
University of Information Technology & Science

Acknowledgement
 4

At first we desire to express our deepest sense of gratitude of almighty

Allah.

With profound regard we gratefully acknowledge our respected course

teacher Mr. Asaduzzaman Arman Lecturer, School of Business Studies
for his generous help and day to day suggestion preparing the term
paper.

We like to give thanks especially to our rest of teacher, friends, class mate
and many individuals for their enthusiastic encouragements and helps
during the preparation of this Term Paper by sharing ideas regarding this
subject and for their assistance in typing and proof reading this
manuscript.

Table of Contents

Chapter–1
Page
1. Introduction
 5

► 1.01 Executive Summary ...............................………...……....

…………... 06
► 1.02 Objective of the Study ……....….…………….............................
…. 07

Chapter – 2

2. Description
► 2.01 Company Profile (Meghna Cement Mills Ltd.) ……........
…......09-10
► 2.02 Profit &
Loss ....................................................................................... 11
► 2.03 Balance Sheet ……...……………
…. ............................................... 12
► 2.04 Ratio Analysis
…........................................................................... 13-14
► 2.05 Company Profile (Confidence Cement Ltd.) …………................
15
► 2.06 Profit & Loss ….
………………............................................................. 16
► 2.07 Balance Sheet ……...
……................................................................. 17
► 2.08 Ratio Analysis
……........................................................................ 18-19

Chapter – 3

3.01 Summary ………………………………………............................................

… 20

4.01 References ………………………………….............................................

….. 20
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Executive Summary

This report is an assigned job as a partial fulfillment of course requirement

by honorable Course teacher Mr. Asaduzzaman Arman Lecturer,
School of Business, University of Information Technology &
Science, Chittagong. It is the optimum aggregated outcome of 5 pupils’
about “Ratio Analysis of Meghna Cement Mills Ltd. (MCML) &
Confidence Cement Ltd. (CCL)”. The goal of this report is to explore
the Ratio Analysis of Meghna Cement Mills Ltd. (MCML) & Confidence
Cement Ltd. (CCL).

Cement is a basic material for building and civil engineering construction.

Output from the cement industry is directly related to the state of the
construction business in general and therefore tracks the overall
economic situation closely. After mining, grinding and homogenization of
raw materials, the first step in cement manufacture is calcinations of
calcium carbonate followed by burning the resulting calcium oxide
together with silica, alumina and ferrous oxide at high temperatures to
form clinker. The clinker is then ground or milled together with gypsum
and other constituents to produce cement.

Bangladesh is an attractive market for cement factories, owing to its

large and concentrated population, low penetration of cement factory.
This paper presents the status and prospects of the Ratio Analysis of
Meghna Cement Mills Ltd. (MCML) & Confidence Cement Ltd. (CCL).
 7

Objective of the Study

As a business expectative in future, we should have to gather

experience beside our survey. We should not concern our lesson only in
classroom but to implement it in practical life that will help us in our
future life. A clear objective help in preparation of well decorated report
in which other take the right type of decision .So, we identifying
objectives is very much important. Our purpose of preparing the report
is:

• To know the Ratio Analysis of Meghna Cement Mills Ltd. (MCML)

& Confidence Cement Ltd. (CCL). Infrastructure in Bangladesh.
 8

INTRODUCTION
Cement sector is the largest increase sector in Bangladesh. There are 70+
cement factories in Bangladesh and daily production capacity is 16.687
Million MT (as of August 02, 2006). It is increasing day-by-by.
 9

COMPANY PROFILE
MEGHNA CEMENT MILLS LTD. (MCML)
COMPANY BRIEF
The Meghna Cement Mills Limited (MCML) was the first undertaking
Bashundhara Group in the manufacturing sector. This enterprise produces
world-class cement and as testimony to this, stands the fact that the
concern has been awarded the ISO-9001 certification for sustained quality
control effort. The company markets its cement under the registered
trademark of “King Brand”.

CORPORATE DIRECTORY
BOARD OF DIRECTORS
Mr. Ahmed Akbar Sobhan Managing Director
Mrs. Afroza Begum Director
Mr. Sadat Sobhan Director
Mr. Shafiat Sobhan Director
Mr. Sayem Sobhan Director
Mr. Mahaboob Morshed Hassan Director
Mr. Md. Minhaz Zia Nominated by
SABINCO
Mr. Md. Habibur Rahman Nominated by ICB
Lt. Col. (Rtd.) Manish Dewan Independent
Director

COMPANY SECRETARY
Mr. Md. Khalequzzaman
BANKERS
Janata Bank
Janata Bhaban Corporate Branch
110, Motijheel C/A, Dhaka.
IFIC Bank Ltd.
Dhanmondi Branch Ltd.
Social Investment Bank Ltd.
Principle Branch
Dilkusha C/A, Dhaka.
AUDITORS
M/S Syful Shamsul Alam & Co.
 10

15, Dilkusha C/A (6th Floor)

Dhaka-1000.

YEAR OF INCORPORATION
March 1992
YEAR OF COMMERCIAL PRODUCTION
January 1996

YEAR OF LISTING
Dhaka Stock Exchange : 1995
Chittagong Stock Exchange : 1996
BUSINESS LINES
Cement Manufacturing
AUTHORIZED CAPITAL
Tk. 400,000,000.00
PAID-UP CAPITAL
Tk. 225,004,000.00
CORPORATE OFFICE
Bashudhara City
13/Ka/1, Panthapath, Dhaka.
FACTORY
Mongla Port I/A, Mongla, Bagerhat.
 11

MEGHNA CEMENT MILLS LTD. (MCML)

PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED DECEMBER 31, 2007.

PARTICULARS 2007 (TK) 2006 (TK)

Sales – Net 2,824,358,6 3,367,396,
89 868
Less : Cost of Goods Sold 2,480,693,3 3,075,067,
567
91
Gross Profit 343,665,29 292,329,3
8 01
Less: Other Expenses : 65,286,718 55,719,095
Administrative Overhead 47,083,157 34,705,020
Selling and Distribution Overhead 18,203,561 21,014,075

Trading Profit 178,378,58 236,610,2

0 06
Less : Financial Expenses 99,849,906 120,127,99
6
Operating Profit Before Other Income 178,528,67 116,482,2
4 10
Add : Non Operating Income 1,033,855 663,917
Total Profit 179,562,529 117,146,12
7
Deferred Expenses Write-Off (4,700,129) (4,700,129)
Profit/Loss on Sale of Fixed Assets 155,606 ------
Profit during the year before W.P.P.F. 175,018,00 112,445,9
6 98
Provision for W.P.P.F. (8,334,191) (6,082,369)
Net Profit before Income Tax 166,683,81 106,363,6
5 29
Provision for Income Tax (18,502,79 (1,266,92
2) 2)
Current Tax (16,885,532) (1,266,922)
Deferred Tax (Current Year) (1,617,260)
Net Profit after Income Tax (148,181,0 105,096,7
23) 07
Tax Holiday Reserve (41,657,922) (48,658,95
4)
Profit after Tax Holiday Reserve 106,523,10 56,437,75
1 3
Earning Per Share (Basic) 65.86 46.71
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MEGHNA CEMENT MILLS LTD. (MCML)

BALANCE SHEET
AS AT 31ST DECEMBER, 2007.

PARTICULARS 2007 (TK) 2006 (TK)

ASSETS:
NON CURRENT ASSETS: 1,307,816, 1,378,737,
629 392
Fixed Assets at Cost Less Acc. 1,252,093,3 1,318,304,0
Dep. 79 13
Deferred Revenue Expenditure 55,733,250 60,433,379

Current Assets: 1,564,372, 1,001,283,

223 610
Stores and Spares 65,207,744 63,302,067
Stock-in-Trade 884,801,364 490,771,594
Trade Debtors 240,164,354 255,117,098
Adv, Deposits & Prepayments 290,731,537 104,737,236
Cash and Bank Balances 83,467,224 87,355,615

Total Assets 2,872,188, 2,380,021,

002
852
EQUITY & LIABILITIES:
Shareholders Fund 619,228,95 527,298,93
8 5
Share Capital 225,004,000 225,004,000
General & Loan Redemption Reserve 166,000,000 166,000,000
Tax Holiday Reserve 170,825,416 185,418,494
Retained Earnings 57,399,542 (49,123,559)
Non-Current Liabilities 833,152,26 787,868,67
9 4
Long Term Loan 619,319,928 582,261,549
Gratuity Payable 18,553,846 11,945,890
Deferred Tax Liability 195,278,495 193,661,235
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Current Liabilities 1,419,807, 1,064,853,

625 393
Cash Credit Account 616,684,231 604,881,809
Loan Against Trust Receipt 490,432,655 276,415,369
Payable for Sundry Express 32,272,466 17,268,943
Payable for Goods Supplied 91,098,968 92,905,664
Payable for Other Finance 90754714 55,671,032
Advance Received against Sales 98,564,591 17,710,576

Total Equity & Liabilities 2,872,188, 2,380,021,

002
852

MEGHNA CEMENT MILLS LTD. (MCML)

RATIO ANALYSIS FOR THE YEAR 31ST DECEMBER, 2007.
CurrentAsset
1. Current Ratio =
CurrentLiabilities
156,43,72,223
= 141,98,07,625
= 1.1 : 1.
Quick Asset
2. Quick Ratio =
CurrentLiabilities
=
156,43,72,223 −5,63,73,121 −29,07,31,237
141,98,07,625
= 0.85 : 1.
GrossProfit
3. Gross Profit Ratio = ×100
Net Sales
34,36,65,298
= ×100
282,43,58,689
= 12.16%.
NetProfit beforetax
4. Net Profit Ratio = ×100
Net Sales
16,66,83,815
= ×100
282,43,58,689
= 5.90%.
Cost of Goods Sold
5. Inventory Turnover Ratio = Average Inventory
 14

248,06,93,391
= 5,80,53,806 +5,63,73,121

248,06,93,391
= 5,72,13,463.5

= 43.35 times
Debt
6. Debt to Asset Ratio =
Asset
225,29,59,894
= 2872,21,88,852 −5,57,33,250

225,29,59,894
= 281,64,55,602

= 0.79 : 1.

Net Profit
7. Return on Capital Employed = ×100
Capital Employed

16,66,83,815
= ×100
123,85,48,886

= 13.45%.
NetProfit
8. Return on Asset = × 100
TotalAsset- FicticiousAsset
16,66,83,815
= ×100
281,64,55,602

= 5.91%.
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COMPANY PROFILE
CONFIDENCE CEMENT LIMITED (CCL)
COMPANY BRIEF
Confidence Cement Limited (CCL) is the first private sector cement
manufacturing company in Bangladesh established in early 90’s with
having 4,80,000 MT annual production capacity at Chittagong 16 K.M.
away from Chittagong port, beside Dhaka Chittagong highway. CCL is the
first ISO-9002 certified cement in Bangladesh.
CORPORATE DIRECTORY
BOARD OF DIRECTORS
Engr. Rezaul Karim Chairman & Managing
Director
Mr. Rupam Kishore Barua Director
Mr. Shah Md. Hasan Director
Mrs. Runu Anwar Director
Mr. Imran Karim Director
Mr. Abdul Gaffar Dubash Independent Director

COMPANY SECRETARY
Mr. Newaz Md. Iqbal Yousuf

BANKERS
AB Bank Limited
Prime Bank Limited
Standard Chartered Bank
IFIC Bank Limited
Mercantile Bank Limited
United Commercial Bank Limited
AUDITORS
Rahman Mostafa Alam & Co.
Chartered Accountants

REGISTERED OFFICE
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Isphani Bulding (3rd Floor)

Sk. Mujib Road, Agrabad C/A,
Chittagong.
LIASON OFFICE
Ispahani Building (6th Floor)
14-15 Motijheel C/A, Dhaka.

FACTORY
Madambibirhat, Bhatiary,
Sitakuda, Chittagong.

CONFIDENCE CEMENT LIMITED (CCL)

PROFIT & LOSS ACCOUNT
FOR THE YEAR ENDED DECEMBER 31, 2007.

PARTICULARS 2007 (TK) 2006 (TK)

Sales – Net 1,102,415,70 950,502,498
5
Less : Cost of Goods Sold 972,743,302 844,444,070
Gross Profit 129,672,40 106,058,42
3 8
Less: Expenses :
Administrative 25,165,031 21,341,906
Selling and Distribution 8,873,003 7,723,865
34,038,034 29,065,771

Trading Profit 95,634,369 76,992,657

Less : Financial Charges 19,968,848 17,559,894
Operating Profit Before Other 75,665,521 59,432,763
Income
Add : Other Income 7,057,856 6,179,916
Operating Profit before income tax 82,723,377 65,612,679
and W.P.P.F.
Less: Contribution to worker’s profit 3,939,208 3,280,634
participation fund (@ 5%)
Net Profit before Tax 78,784,169 62,332,045
Less: Provision for Income Tax
Current Year 23,600,000 18,700,000
Deferred Tax 2,500,000 2,500,000
26,100,000 21,200,000
Net Profit after Tax 52,684,169 41,132,045
Inappropriate profit brought 1,509,510 1,377,465
forward
Profit Available for appropriation 54,193,679 42,509,510
Appropriation
Less: Proposed Dividend 28,500,000 28,500,000
Transferred to dividend equalization fund 20,000,000 12,500,000
 17

48,500,000 41,000,000

Inappropriate profit for the year

transferred to statement changes in 5,693,679 1,509,510
shareholder’s equity
Earning Per Share 27.73 21.65

CONFIDENCE CEMENT LIMITED (CCL)

BALANCE SHEET
AS AT 31ST DECEMBER, 2007.

PARTICULARS 2007 (TK) 2006 (TK)

SOURCE OF FUNDS
Shareholder’s Fund
Share Capital 190,000,000 190,000,000
Share Premium 220,192,749 220,192,749
Reserves 240,862,754 220,862,754
Proposed Dividend 285,500,000 18,500,000
Profit & Loss Account 5,693,679 1,509,510
685,249,18 661,065,01
2 3

Long term Loan-Secured 1,040,702 10,501,799

686,289,88 671,566,81
4 2

APPLICATION OF FUNDS
Fixed Assets
Operating Fixed Assets at cost 854,102,988 845,234,939
Less: Depreciation 332,006,031 298,273,434
Net Operating Fixed Assets 522,096,957 546,961,505
Investment at cost 41,325,000 31,325,000
Pre-production expenses-Unit 2 1,462,733 2,047,826
Total 564,884,69 580,334,33
0 1
Current Assets:
Stores and Spares 67,723,218 64,283,578
Stock of raw and packing materials 171,733,169 104,771,563
Book Debts 117,827,687 140,737,743
Adv, Deposits & Prepayments 133,963,331 69,277,082
 18

Other Receivables 13,282,969 4,238,262

Cash and Cash Equivalents 30,777,487 41,629,728
Total 535,307,86 424,937,95
1 6
Current Liabilities and Provisions:
Creditors and accruals 97,073,198 61,807,398
Secured short term loans 258,329,469 238,698,077
Current portion of long term loans 12,000,000 12,000,000
Provision for taxation 46,500,000 21,200,000
Total 413,902,66 333,705,47
7 5

NET CURRENT ASSETS 121,405,19 91,232,481

4
CAPITAL EMPLOYED 686,289,88 671,566,81
4 2

CONFIDENCE CEMENT LIMITED (CCL)

RATIO ANALYSIS FOR THE YEAR 31ST DECEMBER, 2007.

Current Asset
1. Current Ratio =
CurrentLiabilities
5,35,07,861
= 41,39,02,667

= 1.29 : 1.
Quick Asset
2. Quick Ratio =
CurrentLiabilities
5,35,07,861 −12,73,30,174
= 41,39,02,667

= 0.71 : 1.
GrossProfit
3. Gross Profit Ratio = ×100
Net Sales
12,96,72,403
= ×100
110,24,15,705

= 11.76%.
NetProfit beforetax
4. Net Profit Ratio = ×100
Net Sales
7,87,84,169
= ×100
110,24,15,705

= 7.14%.
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Dividend
5. Dividend Payout Ratio = × 100
Profitavailablefor Shareholder
2,85,00,000
= ×100
5,41,93,679

= 52.58%.
Dividend
6. Dividend per Share = No of ordinary Shares

2,85,00,000
= 19,00,000

= 15 per share.

Debt
7. Debt to Asset Ratio =
Asset
41,39,02,667 +10,40,702
= 56,48,84,690 +53,53,07,861

41,49,43,369
= 110,01,92,551

= 0.37 : 1.
Net Profit
8. Return on Capital Employed = ×100
Capital Employed

7,87,84,169
= ×100
68,62,89,884

= 11.47%.
NetProfit
9. Return on Asset = × 100
TotalAsset- FicticiousAsset
7,87,84,169
= ×100
110,01,92,551

= 7.16%.
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SUMMARIZE:
Cement is the latest edition in the list of export commodities in
Bangladesh. Our country started exporting cement from January, 2003. In
this context local investors look the inutility for setting up cement
factories and starts producing cement in 1992. The production in 8 private
factories stood 34 lakh ton in 1997. So, far, about 100 factories got Govt.
approval of which 56 factories are production with a production capacity
of 1.30 crore MT against about domestic demand of 60 lakh tons in a year.

REFERENCES
[1] Meghna Cement Mills Company Ltd. official website.
[2] Confidence Cement Ltd. official website.
[3] Class lecture sheet of Ratio Analysis.
[4] Anual Report from Chittagong Stock Exchange.
[5] Basic Accounting by Monjur Morshed.
[6] www.cementbd.blogspot.com