Fauji Cement Company

Limited
INTERNATIONAL ISLAMIC UNIVERSITY ISLAMABAD
 Group Members:

Muhammad Farooq (0333-8636340)

Muhammad Khalil Hussain (0333-9835303)
Muhammad Ahsan
MBA 19 (B)

GRADUATE SCHOOL OF BUSINESS

INTERNATIONAL ISLAMIC UNIVERSITY ISLAMABAD
 Fouji Cement Company
Ltd.
 The company was constructed on 23-11-1992
 It is established by Fauji Foundation
 Its ordinary shares are 951,300,813
 Its preference shares are 48,699,187
 Competitors: Lucky Cement, DGK, Maple Leaf,Attock Cement &
Askari Cement
Major Share Holders

Fauji Foundation 31.66%

Fauji Fertilizers 12.64%
UBL 15.72%
General Public 13.45%
Other JS companies 12.26%
 Qualitative Analysis
INDUSTRY (2008)
 Domestic dispatches=22,395,522Tons  Domestic dispatches=899,405Tons
 Exports(Tons) = 7,716,620 Tons
 Total Dispatches= 30,112,142Tons
 Capacity Utilization= 81.04%
GROWTH
 Domestic despaches=6.47%
 Exports(Tons) = 142.02%
 Total Dispatches= 24.31%
 Capacity Utilization= 1.21%
FAUJI CEMENT(2008)
 Exports(Tons) = 278,095 Tons
 Total Dispatches= 1,177,500Tons
 Capacity Utilization= 101.03%
GROWTH
 Domestic dispatches=6.39%
 Exports(Tons) = 82.63%
 Total Dispatches= 3.01%%
 Capacity Utilization= 3.01%
FCCL has earned profit after tax of Rs.414 million in
2008 but it has contributed towards national
exchequer for Rs. 1,268 million in the form of taxes, &
duties.
FCCL has earned USD 13.804 million through export
%age share in export is 4%
%age market share of FCCL is 6%
Production level is 100.83% (Capacity= 1,165,500
M.Tones, Actual 1,174,722 M.Tons)
FCCL is ISO 9001-2000 and 14001-2004 certified
Future outlook: New Plant of 7,200 tpd clinker in
parallel to the existing plant
Refuse Derived Fuel Plant (RDF): cost 300 million,
capacity 12 tons per hour
Earning Per Share is Rs. 0.85 per share and market
price per share is Rs. 16.06
 Cost of Sales of Cement
Industry
COST HEAD %AGE OF COST OF SALES
Cost of Raw material 10%
Cost of fuel 41%
Cost of power 18%
Cost of packing 9%
Other costs 22%

Raw Material: Lime Stone (Calcium Carbonate)75 to 80%, Clay15-20%,

Iron ore, & Gypsum
Manufacturing Process:
Crusher
Raw stacker & Roller Grinding
Material Reclaimer
Press Mill
Lime Stone 80%, Clay 20%, Iron Ore

Rotary Kiln Clinker Clinker Clinker Roller

(1200-1450C) Cooling
(120C) Storage Process

Add Cement Storage Packing

Gypsum Mill Silo Unit
Bulk/Paper/ Hope
Bags

Dispatch To Consumer
Analysis of Financial
Statements
LIQUIDITY RATIOS:
PROFITABILITY RATIO:
ACTIVITY RATIO:
LEVERAGE RATIOS:
LIQUIDITY RATIOS:
CURRENT RATIO: Current Assets/Current
Liabilities

Year 2008 2007 2006 2005 2004

Ratio 2.16 1.35 1.25 0.97 1.54
Quick Ratio:
Year 2008 2007 2006 2005 2004

Ratio 2.06 1.23 1.13 0.93 1.38

CASH RATIO:

Year 2008 2007 2006 2005 2004

Ratio 1.54 0.29 0.67 0.50 0.53
PROFITABILITY RATIO:
GROSS PROFIT MARGIN

Year 2008 2007 2006 2005 2004

Ratio 18.56% 31.52% 51.12% 38.01% 32.26%
OPERATING PROFIT MARGIN
Year 2008 2007 2006 2005 2004
Ratio 16.96% 28.74% 47.64% 34.75% 31.49%
NET PROFIT MARGIN
Year 2008 2007 2006 2005 2004
Ratio 11.66% 18.66% 28.08% 17.94% 13.68%
RETURN ON ASSETS:
Year 2008 2007 2006 2005 2004
Ratio 4.83% 15.55% 32.95% 15.89% 12.23%

FINANCIAL CHARGE:
Year 2008 2007 2006 2005 2004
Ratio 6.30% 11.22% 11.71% 5.73% 1.92%
RETURN ON EQUITY:

Year 2008 2007 2006 2005 2004

Ratio 4.45% 17.30% 36.67% 20.84% 16.20%
 THREE STEP DUPONT:
ROE=(NET PROFIT MARGIN) X (ASSET TURNOVER) X (EQUITY MULTIPLIER)
ROE=(NET INCOME/SALES) X (SALES/ASSETS) X (ASSETS/ SHAREHOLDERS EQUITY)

ROE= 0.04 0.17 0.37 0.21 0.16

ACTIVITY RATIOS:
ASSET TURNOVER RATIO:

Year 2008 2007 2006 2005 2004

Ratio 0.28 0.54 0.69 0.46 0.039
AVERAGE SALES PER DAY= NET SALES /
365 DAYS
9,714.80 9,488.45 11,742.84 7,794.91 6,291.04
 ACCOUNT RECIEVABLE
TURNOVER:

Year 2008 2007 2006 2005 2004

35.57 90.51 5.99 5.91 11.7

A/R Turnover

100
90.51
80
60
40 35.57
20
5.99 5.91 11.7
0
2008 2007 2006 2005 2004
INVENTORY TURNOVER:
Year 2008 2007 2006 2005 2004
Ratio 12.55 12.94 14.44 31.53 25.25
FIXED ASSET TURNOVER:
Year 2008 2007 2006 2005 2004
Ratio 0.5 0.79 0.94 0.61 0.49
LEVERAGE RATIOS:
DEBT RATIO:
Year 2008 2007 2006 2005 2004
Ratio 0.25 0.42 0.47 0.61 0.67
DEBT/ EQUITY RATIO:
Year 2008 2007 2006 2005 2004
Ratio 0.34 0.71 0.89 1.54 2.05

Debt/Equity Ratio

2.5
2 2.05
1.5 1.54
1 0.89
0.71
0.5 0.34
0
2008 2007 2006 2005 2004
TIE RATIO:
Year 2008 2007 2006 2005 2004
Ratio 4.23 4.93 7.88 5.1 10.36
Z- Score Model of Fauji Cement Company Limited

Z = 0.012x1 + 0.014x2 + 0.033x3 + 0.006x4 + 0.999x5

X1 = working capital/total assets

X2 = retained earnings/total assets
X3 = EBIT/total assets
X4 = Market value of equity/book
value of total debt
X5 = sales/total assets

2,008 2,007 2,006 2,005 2,004

0.320 0.574 0.722 0.467 0.397