FIN619 final project finance of Virtual university has been prepared to complete MBA degree requirement and activity ratios analysis have be done on Kohat cement.Lucky cement and Attock cement for the year 2011,2012 and 2013.
FIN619 FINAL PROJECT ACTIVITY RATIS ANALYSIS OF KOHAT CEMENT, LUCKY CEMENT, ATTOCK CEMENT FOR THE YEAR 2011,2012 and 2013
Executive Summary
The analysis has been conducted on activity ratios analysis of Kohat, Attock and Lucky cement for the year 2011, 2012, and 2013. Activity ratio are very concern to measures how firms efficiently converts its assets into sales. Activity ratio analysis always helps company shareholders to dig out the ability, efficiency to convert assets in consciousness of cash. The primary objectives of this research were to determine and examine the reason why company I able to manage its assets effectively and why company is not able.
Analysis over mentioned companies has been completed with the help of secondary data by exploring company’s official websites. This study has achieved all the objectives and ratio result about three companies has been displayed in both tabulation and graphic form. For better understanding this study has done some interpretation as well under each table and graph.
According to activity ratios analysis, the accounts receivable turnover ratio of Kohat cement is better than Lucky and Attock cement Kohat cement is able to receiving quickly debt from the consumers. The result of average collection period of Lucky cement is good than Kohat and Attock cement therefore result also lies that Lucky cement has http://qundeel.com/ strong account receivable than Kohat and Attock cement. The accounts Payable turnover ratio of Lucky cement in year 2013 is good than Kohat and Attock cement. Inventory turnover ratio of Lucky cement is high as compare to Attock and Kohat cement.
In fact Activity ratio analysis indicates as operating ratio or management ratio as well, it means measure the efficiency which a current business by uses its own assets like inventories, accounts receivable and fixed assets. The common use of activity ratio are the average collection period, inventory turnover, fixed assets turnover and total asset turnover.
The basic aim of this analysis is to compare the ratio analysis of selected companies and dig out which company is using its inventory or raw material efficiently.
A company invests funds for its operational activities in assets like sort term and long term to increase its sales and profit. So the success or failure depends upon proper utilization of assets, if these assets are properly utilized and managed then the company able to increase its sales and profit too, hence activity ratio are calculated to evaluate how efficiently and effectively the company utilizing its assets.
Kohat Cement
Kohat Cement Company Limited (incorporated in 1980) is an ISO 9001-2008 certified company, listed on Stock Exchanges of Pakistan and engaged in manufacturing of Grey and White Cements. Quality of our products is better than approved British and Pakistan Standards. The plant is located in Kohat about 60 kilometers from Peshawar.
Attock Cement
ACPL is a member of Pharaon Group of Companies operating in Pakistan. ACPL’s projects was conceived in 1981. The projects is a Pak-Saudi venture and has involved an initial capital outlay of around Rs. 1.5 billion with a foreign exchange component of around US$ 45 million. ACPL’s manufacturing plant is located in Tehsil Hub, District Lasbela, Baluchistan, at a distance of about 45 kilometers north west of Karachi.
ACPL has attained ISO 9001:2000 and ISO 14000 certifications from Lloyds Register Quality Assurance (LRQA) in 2002 and 2006.ACPL is making substantial contribution to the country’s economy and deposited over Rs.2,600 Million (US$ 30 Million) to the national and provincial exchequer in the form of Excise Duty, Sales Tax, Special Excise Duty, Royalty and Income Tax during the year 2010 – 2011
Lucky Cement
Lucky Cement Limited (LCL) is Pakistan’s largest producer and leading exporter of quality cement with the production capacity of 7.75 million tons per annum. The company is listed on Karachi, Lahore, Islamabad and London Stock Exchanges.
Over the years, the Company has grown substantially and is expanding its business operations with production facilities at strategic locations in Karachi to cater to the Southern regions, Pezu and Khyber Pakhtunkha to furnish the Northern areas of the country. Lucky Cement is Pakistan’s first company to export sizeable quantities of loose cement being the only cement manufacturer to have its own loading and storage terminal at Karachi Port.
Lucky Cement is an ISO 9001:2008 and 14001:2004 certified company and also possesses many other international certifications including Bureau of Indian Standards, Sri Lankan Standard Institute, Standards Organization of Nigeria, Kenya Bureau of Standards and South African Bureau of Standards.
ACCOUNTS RECEIVABLE TURNOVER
| Company |
2011
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2012
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2013
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Kohat Cement
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Lucky Cement
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Attock Cement
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As per above calculation in table of account receivable ratios of Kohat cement , Luck cement and Attock cement for the year 2011,2012,2013. The Kohat cement ratio for the year 2011, 2012, and 2013 is 373.59, 1092.24, and 1321.46 times respectively. Luck cement ratio for the years 2011, 2012, 2013 is 37.16, 39.86, 27.81 time respectively. http://qundeel.com/And the Attock cement ratio for the years 2011, 2012, 2013 are 161.18, 88.20, 42.64 time respectively. From the above information we conclude that the ratio of Kohat cement is high with respect to other companies. This ratio has been calculated to see the efficiency of firm’s credit policies and also highlight the level of investment in receivable required to maintain the firm sales level. Therefore Kohat ratio for the last three years is representing that this company is receiving quickly debt from the consumers than other two companies.
Average Collection Period
| Company |
2011
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2012
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2013
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Kohat Cement
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Lucky Cement
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Attock Cement
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As per above calculation in table average collection period ratio of three companies Kohat cement Lucky cement and Attock Cement for the year 2011, 2012, and 2013. The Kohat cement ratio for the year 2011, 2012,and 2013 is 0.97 days, 0.33 days and 0.27 days respectively. The lucky cement for the year 2011, 2012, http://qundeel.com/and 2013 is 9.82 days, 9.15 days and 13.12 days respectively and Attock cement for the year is 2.26 days, 4.13 days, 8.56 days respectively. Above analysis tells us the average collection period of Lucky cement is high with respect to other two companies Kohat and Attock cement. The recorded ratio result also lies that Lucky cement is implementing very restrict policy for giving credit convenience to their customer’s because as per analysis Lucky cement has strong account receivable then other two companies.
Get Complete Project of Activity ratio analysis on mentioned companies through email. Project include working sheet (excel) with complete three years of ratio analysis.
Get Complete Project of Activity ratio analysis on mentioned companies through email. Project include working sheet (excel) with complete three years of ratio analysis.
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