ratio analysis for three consecutive years i.e.: FY2012-FY2014.

1. Ratio analysis of DG Khan Company limited is done
through these financial statements given on their
websites.
http://www.dgcement.com/financial-reports/2011-12%20Annual%20Report.pdf
http://www.dgcement.com/financial-reports/2012-13%20Annual%20Report.pdf
http://www.dgcement.com/financial-reports/2013-14%20Annual%20Report.pdf

2. Ratio
Analysis
DG Khan Cement Factory
Current assets/current liabilities
Current
Ratio
FY12 FY13 FY14
18,265,583,000/
11205943,000
=1.63 times
25,789,989,000/
9,307,593,000
=2.77 times
32,068,626,000/
5,940,563,000
=5.40 times
FY12
FY13
FY14
FY12 FY13 FY14
Current Ratio 1.63 2.77 5.4
Current Ratio

3. Ratio
Analysis
DG Khan Cement Factory
Current asset-Inventories-prepayments/ Current liabilities
Acid
Test
Ratio
FY12 FY13 FY14
17,310,935,188/
11,205,943,000
=1.54:1
24,128,262,435/
9,307,593,000
=2.59:1
30,719,879,540/
5,940,563,000
=5.17:1
0
2
4
6
FY12 FY13 FY14
1.54
2.59
5.17
Acid test Ratio

4. Ratio
Analysis
DG Khan Cement Factory
current assets- current liabilities
Working
Capital
FY12 FY13 FY14
18,265,583,000-
11,205,943,000
= Rs. 7,059,640,000
25,789,989,000-
9,307,593,000
= Rs. 16,482,396,000
32,068,626,000-
5,940,563,000
= Rs. 26,128,063,000
0
20,000,000
40,000,000
FY12
FY13
FY14
FY12 FY13 FY14
Working Capital 7,059,640 16,482,396 26,128,063
Working Capital

5. Ratio
Analysis
DG Khan Cement Factory
EBIT/annual interest earned
Times
interest
Earned
FY12 FY13 FY14
5,723,250,000/
1,670,784,000
=3.42 times
8,090,737,000/
994,879,000
=8.1 times
8,460,256,000/
608,859,000
=13.8 times
3.42
8.1
13.8
0
5
10
15
FY12 FY13 FY14
Times interest earned

6. Ratio
Analysis
DG Khan Cement Factory
total liabilities/total assets*100
Debt
Ratio
FY12 FY13 FY14
17,785,673,000/
50,685,198,000
=35%
15,569,921,000/
63,526,719,000
=24%
11,765,534,000/
73,282,069,000
=16%

7. Ratio
Analysis
DG Khan Cement Factory
total debt/total equity
Debt/
Equity
Ratio
FY12 FY13 FY14
17,785,673,000/
32,899,525,000
=0.54 times.
15,569,921,000/
47,956,798,000
=0.32 times.
11,765,534,000/
61,516,535,000
=0.19 times.
FY12
FY13
FY14
0.54
0.32
0.19
Debt to equity ratio

8. Ratio
Analysis
DG Khan Cement Factory
Net profit*100/sales
Net
Profit
Margin
FY12 FY13 FY14
4,108,118,000/
22,949,853,000
=17.9%
5,502,169,000/
24,915,924,000
=22.08%
5,965,498,000/
26,542,509,000
=22.47%
17.9
22.08 22.47
0
10
20
30
2012 2013 2014
Net Profit Margin

9. Ratio
Analysis
DG Khan Cement Factory
Gross profit*100/net sales
Gross
Profit
Margin
FY12 FY13 FY14
7,506,755,000/
22,949,853,000
=32.71%
9,326,007,000/
24,915,924,000
=37.43%
9,257,568,000/
26,542,509,000
=34.87%
32.71
37.43
34.87
30
35
40
2012 2013 2014
Gross Profit Margin

10. Ratio
Analysis
DG Khan Cement Factory
net income/average total assets*100
Return
on
Assets
FY12 FY13 FY14
4,108,118,000/
50,194,214,000
=8.18%
5,502,169,000/
57,105,959,000
=9.63%
5,965,498,000/
68,404,394,000
=8.72%
7.00%
8.00%
9.00%
10.00%
FY12 FY13 FY14
Return on Asset

11. Ratio
Analysis
DG Khan Cement Factory
operating income/net sales*100
Operati
ng
Income
Margin
FY12 FY13 FY14
5,723,250,000/
22,949,853,000
= 24.93%
8,090,737,000/
24,915,924,000
=32.47%
8,460,256,000/
26,542,509,000
=31.87%
24.93
32.47
31.87
0
5
10
15
20
25
30
FY12 FY13 FY14
Operating income Margin

12. Ratio
Analysis
DG Khan Cement Factory
net income/ total equity*100
Return
on
Equity
FY12 FY13 FY14
4,108,118,000/
32,899,525,000
=12.4%
5,502,169,000/
47,956,798,000
=11.4%
5,965,498,000/
61,516,535,000
=9.6%
0.00%
5.00%
10.00%
15.00%
FY12 FY13 FY14
Return on equity

13. Ratio
Analysis
DG Khan Cement Factory
net sales / average total assets
Asset
Turnove
r Ratio
FY12 FY13 FY14
22,949,853,000/
50,194,214,000
=0.45 times.
24,915,924,000/
57,105,959,000
=0.43 times.
26,542,509,000/
68,404,394,000
=0.38 times.
0.3
0.35
0.4
0.45
FY12 FY13 FY14
Asset
turnover
ratio

14. Ratio
Analysis
DG Khan Cement Factory
operating cash flow/current liabilities
Operati
ng Cash
Flow
Ratio
FY12 FY13 FY14
4,011,634,000/
11,205,943,000
=0.35 times.
6,685,968,000/
9,307,593,000
=0.71 times.
ratio=8,724,257,000/
5,940,563,000
=1.46 times.
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
FY12 FY13 FY14
Operating cash
flow ratio
0.35 0.71 1.46

15. Ratio
Analysis
DG Khan Cement Factory
total dividend paid/ total no. of shares
Dividen
d per
Share
FY12 FY13 FY14
657,179,000/
438,119,118
= Rs. 1.5
1,314,357,000/
438,119,118
= Rs. 3.00
1,533,417,000/
438,119,118
= Rs. 3.5
0
0.5
1
1.5
2
2.5
3
3.5
4
FY12 FY13 FY14
Dividend per
share

16. Ratio
Analysis
DG Khan Cement Factory
net income/no. of shares
Earning
per
Share
FY12 FY13 FY14
4,108,118,000/
438,119,118
=Rs. 9.38
5,502,169,000/
438,119,118
= Rs. 12.56
5,965,498,000/
438,119,118
= Rs. 13.62
9.38
12.56
13.62
0
2
4
6
8
10
12
14
16
FY12 FY13 FY14
EPS

17.  From the whole comprehensive analysis of company I have
concluded that the factory has growing potential. They can also
pay back its debt obligations easily, though their current assets are
not highly dependent on its stock in trade.
 Although high current ratio may be due to high receivables which
indicates poor working capital management and therefore
company is open to risk of bad debts.
 As Pakistani market is going to be very exhaustive and rigorous, to
hang on as market leader they should restructure its policies
regarding price, place, workforce management and development.
 Profit margin ratios are the indicators that the company is making
high return from its sales after reimbursement of expenses.
Decreasing debt equity ratio is also a good indicator for success of
company.
 DG Khan Cement factory has a high share in government tax
payment. The company is executing well from financial
perspective. Company’s distribution channels are very effective.
But the most important factor that must be highlighted is the
utilization of assets, DG Khan Cement Factory is not making the
most of its assets that it actually can.

18.  By best utilizing its assets DG Khan Cement factory can easily
generate revenues. Due to fine quality their prices are higher than
the competitors, by modifying their prices accordingly, they will
surely gain local and international market share. Through paying
attention to pull strategy no one can stop them from becoming
sound firm.
 Top management can play a role of milestone by applying up to date
marketing strategies and put emphasis on promotional tools. With
extra-ordinary care of decision making power they can actually
control overhead cost effectively and with consistency.
 The shareholders and employees if given proper attention this will
result in increasing their loyalty with the organization. Employee’s
performance appraisal and their rotation in different jobs will
increase productivity and satisfaction with the job.
 The most important factor is high current ratio that doesn’t always
promise high liquidity although they have tied up too much of its
finance in current asset, after in depth analysis I will suggest them
to reinvest.
 Through special emphasis on utilizing assets and funds from
shareholder effectively, they can generate higher returns.

19. By:
SAMIA KHAN
MSBA.