Project: Confidence Cement and Aramit Cement

PROJECT
Confidence Cement and Aramit Cement

Project on Confidence Cement and Aramit Cement
Submitted To,
Bushra Ferdous Khan
Submitted by,
Name ID
Md. Faisal Hannan Chy 1510250030
Arham Rifatul Tiash 1430194030
Mostafa Asif 1510048030
Ashraful Quyum Chowdhury 1210790030
1|Page
Table of Contents
Pages
Executive summary 3
1. Introduction 4
2. Objectives 5
3. Analysis and Findings 6-36
4. Conclusion 37-
List of Tables
Pages
1. Confidence Cement Horizontal analysis. 6
2. Aramit Cement Horizontal analysis. 6-8
3. Confidence Cement vertical analysis. 9
4. Aramit Cement vertical analysis. 10-11
5. Confidence Cement ratio analysis. 37
6. Aramit Cement ratio analysis. 38
List of Graphs
Pages
1. Confidence Cement Horizontal analysis. 7
2. Aramit Cement Horizontal analysis. 8
3. Confidence Cement vertical analysis. 10
4. Aramit Cement vertical analysis. 11
5. Ratio Analysis 12-36
2|Page
Executive summary: Confidence Cement Ltd. and Aramit Cement Ltd. are
two well-known company in Cement industry. Confidence cement limited (ccl) is
the first private sector cement manufacturing company in Bangladesh established
in early 90’s with having 480000 M/T annual production capacity at Chittagong.
Aramit earned countrywide huge reputation by producing quality building
materials since its establishment in 1963. On the other hand, Aramit has been
playing its role and fulfilling its responsibilities as one of the largest national
industrial group which is growing constantly in the field of building materials by
providing aramit roofing sheets and allied products. To find the better among this
two companies and the one which is more profitable to invest, some analysis must
be done on both of the companies. Horizontal analysis, vertical analysis and ratio
analysis will give us a clear picture of their market position. Details about both the
companies can be denoted through this analysis. All this analysis will help us to
conclude, which company holds a better market position and profitable to invest.
3|Page
PROJECT ON
CONFIDENCE CEMENT AND ARAMIT CEMENT
1. Introduction- Confidence cement limited (ccl) is the first private sector
cement manufacturing company in Bangladesh established in early 90’s with
having 480000 M/T annual production capacity at Chittagong,16 km away from
Chittagong port ,besides Dhaka-Chittagong highway CCL is the 1 st ISO-9002
certified cement manufacturing in Bangladesh. It has a unique management system
in quality Assurance, Marketing, Sales, and Procurements. It manufactures
ordinary Portland cement. It is one of the best cement manufacturing company in
Bangladesh, and has gained this position through continuous development and by
producing high & consistent quality cement to meet all customers requirement at
all time. In the fiscal year 2010-2011 the company claims to have generated a
comprehensive income of 242 million BDT/= and distributed 40% of the profit to
its shareholders as dividend. Confidence cement claims to be a member of the
Bangladesh Cement Manufactures Association.
Aramit cement limited was incorporated on 19th august 1995 as a public limited
company by shares and established with technical collaboration of a Chinese
company for producing ordinary Portland cement from the very beginning of its
commercial production that started on 10 th November 1999.The company also
achieved ISO-9002 certificate. Company’s products carrying brand name Camel
has already become highly popular among the consumers .They are also exporting
a considerable quantity of OPC-43N grade cement and Portland slag Cement for
the last few years .Existing capacity of the planet is 700 metric tons per day which
is going to be enhanced by 1000metric tons per day production capacity through
setting up of another expansion unit for which erection works have been started
4|Page
2. Objective
A comparison between Confidence Cement and Aramit Cement by calculating
 Horizontal analysis
 Vertical analysis
 Ratio analysis
 Liquidity ratios
 Activity ratios
 Debt ratios
 Profitability ratios
 Market ratios
of these two companies.
5|Page
3. Analysis and findings-
3.1 Horizontal Analysis:
Confidence Cement:
Year 2010 2011 2012 2013 2014
Cash 40555831 59512296 43105373 10807011 68115966
Inventory 414494683 324812473 360255810 233412271 396303714
Accounts 25121601 33599795 50113216 7293363 90529372

Receivable
Net Plant and 15529553322 1878167582 1895072261 2009477427 1935796338
Equipment
Intangibles 129857842 231615420 445863355 583170584 739051832
Total assets 2169583275 2527707566 2794410015 3007080916 3229796222
Year 2010 2011 2012 2013 2014

Cash 100% 146.74 106.29 266.51 167.96
Inventory 100% 178.36 86.91 56.31 95.61
Accounts 100 133.75 199.48 290.32 360.36

Receivable
Net Plant and 100 120.43 121.51 128.85 124.12
Equipment
Intangibles 100 178.36 343.35 449.08 569.12
Total assets 100 116.50 128.79 138.60 148.87
6|Page
Confi dence Cement horizontal analysis
2014 167.96 95.61 360.36 124.12 569.12 148.87
2013 266.51 56.31 290.32 128.85 449.08 138.6
2012 106.29 86.91 199.48 121.51 343.35 128.79
2011 146.74 178.36 133.75 120.43 178.36 116.5
2010 100 100 100 100 100 100
Aramit Cement:
Year 2010 2011 2012 2013 2014
Cash 23,841,194 12,886,766 20,615,126 87,393,627 24,856,089
Inventory 138,466,161 122,510,866 140,770,770 136,921,094 204,429,637
Accounts 8,954,375 3,546,955 3,546,955 33,898,228 264,666,044

Receivable
Net Plant and 122,804,177 121,226,566 102,827,859 106,744,298 90,293,232
Equipment
Intangibles 1247194 299,142,030 257,463,625 880,011 3,059,191
Total assets 295313101 559,353,183 525224335 365,837,258 587,304,193
7|Page
Year 2010 2011 2012 2013 2014
Cash 100% 54.05% 86.47% 366.56% 104.26%
Inventory 100% 88.48 101.66 98.89 147.64%
Accounts 100% 39.61% 39.1% 378.57% 2955.72%

Receivable
Net Plant and 100% 98.72 83.73 86.92 73.53
Equipment
Intangibles 100% 235.20 263.43 70.56 245.29
Total assets 100% 189.41 177.85 123.88 198.88%
Aramit cement horaizontal analysis
2014 104.26 147.64 295.72 73.53 245.29 198.88
2013 366.56 98.89 378.57 86.92 70.56 123.88
2012 86.47 101.66 39.1 83.73 263.43 177.85
2011 54.05 88.48 39.61 98.72 235.2 189.41
2010 100 100 100 100 100 100
8|Page
3.2 Vertical Analysis:
Confidence Cement:
Year 2010 2011 2012 2013 2014
Cash 40555831 59512296 43105373 10807011 68115966
Inventory 414494683 324812473 360255810 233412271 396303714
Accounts 25121601 33599795 50113216 7293363 90529372

Receivable
Net Plant and 15529553322 1878167582 1895072261 2009477427 1935796338
Equipment
Intangibles 129857842 231615420 445863355 583170584 739051832
Total assets 2169583275 2527707566 2794410015 3007080916 3229796222
Year 2010 2011 2012 2013 2014

Cash 2 2 1 3 2
Inventory 19 19 13 8 12
Accounts 1 1 2 2 3
Receivable
Net Plant and 72 72 68 67 60
Equipment
Intangibles 6 6 16 20 23
Total assets 100 100 100 100 100
9|Page
Confi dence cement verti cal analysis
2 0 1 4 2 12 3 60 23 100
2013 3 8 2 67 20 100
2 0 1 2 1 13 2 68 16 100
2011 2 19 1 72 6 100
2010 2 19 1 72 6 100
Aramit Cement:
Year 2010 2011 2012 2013 2014
Cash 23,841,194 12,886,766 20,615,126 87,393,627 24,856,089
Inventory 138,466,161 122,510,866 140,770,770 136,921,094 204,429,637
Accounts 8,954,375 3,546,955 3,546,955 33,898,228 264,666,044

Receivable
Net Plant and 122,804,177 121,226,566 102,827,859 106,744,298 90,293,232
Equipment
Intangibles 1247194 299,142,030 257,463,625 880,011 3,059,191
Total assets 295313101 559,353,183 525224335 365,837,258 587,304,193
10 | P a g e
Year 2010 2011 2012 2013 2014
Cash 8% 2% 4% 24% 4%
Inventory 47% 22% 27% 37% 35%
Accounts 3% 6% 1% 9% 45%
Receivable
Net Plant and 41.5% 22% 19% 29% 15%
Equipment
Intangibles .5% 53.4% 49% 1% 1%
Total assets 100% 100% 100% 100% 100%
aramit cement verti cal analysis
2014 4 35 45 15 1 100
2013 24 37 9 29 1 100
2012 4 27 1 19 49 100
2011 2 22 6 22 53.4 100
2010 8 47 3 41.5 0.5 100
11 | P a g e
3.3 Ratio analysis:
3.3.1 Liquidity ratio: There are two section of liquidity ratio-
 Current ratio: Current assets / Current liabilities
CONFIDENCE CEMENT-
2010: Current ratio = 844,932,866 / 621,256,569
= 1.3600
2011: Current ratio = 1,131,359,647 / 915,339,475
= 1.2360
2012: Current ratio = 1,544,843,374 / 1,191,946,366
= 1.2961
2013: Current ratio = 1760,8864,50 / 1247,623029
= 1.4114
2014: Current ratio = 2443,434,324 / 1758,186,496
= 1.3898
ARAMIT CEMENT-
2010: Current ratio = 572,339,972 / 786,215,396
= 0.7279
2011: Current ratio = 717,500,149 / 1,040,589,226
= 0.6895
2012: Current ratio = 881,339,136 / 1,287,111,195
= 0.6847
2013: Current ratio = 862,608,806 / 1,294,389,123
= 0.6664
2014: Current ratio = 1,040,809,655 / 1,134,899,259
= 0.9171
12 | P a g e
Current Ratio


1.36
1.41 1.39 
1.3
1.24 

0.92 
0.73

0.69 0.68 0.67 




2010 2011 2012 2013 2014

Confidence Cement Aramit Cement 

Quick Ratio: (Current assets – Inventory) / Current liabilities
CONFIDENCE CEMENT-
2010: Quick Ratio = (844,932,866 – 302,359,748) / 621,256,569
= 0.8733
2011: Quick Ratio = (1,131,359,647 – 324,812,473) / 915,339,475
= 0.8811
2012: Quick Ratio = (1,544,843,374 – 360,255,810) / 1,191,946,366
= 0.9938
2013: Quick Ratio = (1,760,886,450 – 233,412,271) / 1,247,623,029
= 1.2243
2014: Quick Ratio = (2,443,434,324 –1,396,303,714) / 1,758,186,496
= 0.5956
ARAMIT CEMENT-
2010: Quick Ratio = (572,339,972 – 138,466,161) / 786,215,396
= 0.5518
13 | P a g e
2011: Quick Ratio = (717,500,149 – 122510886) / 1,040,589,226
= 0.5718
2012: Quick Ratio = (881,339,136 – 140,770,770) / 1,287,111,195
= 0.5753
2013: Quick Ratio = (862,608,806 – 136,921,094) / 1,294,389,123
= 0.5606
2014: Quick Ratio = (1,040,809,655 – 204,429,632) / 1,134,899,259
= 0.7369
Quick ratio
3.3.2
1.22
0.99
0.87 0.88
0.74
0.57 0.58 0.56 0.6

0.55
2010 2011 2012 2013 2014
Confidence Cement Aramit Cement
Activity Ratio: There are four section of activity ratio.

 Inventory Turnover ratio: Cost of goods sold / Inventory
CONFIDENCE CEMENT-
2010: Inventory Turnover ratio = 1482260805 / 414494683
= 3.5760
= 5.9306
14 | P a g e
= 7.5232
= 11.8468
= 7.6420
ARAMIT CEMENT-
= 5.1163
= 6.4501
= 6.3046
= 4.9406
= 2.3198
Inventory Turnover ratio
11.85
7.52 7.64
6.45 6.3
5.93
5.12 4.94
3.58
2.32
2010 2011 2012 2013 2014

15 | P a g e
 Average collection period: Accounts receivable / Average sales per day
CONFIDENCE CEMENT-
2010: Average collection period = 25121601 / 4709373
= 5.3343
= 5.4723
= 5.5903
= 7.6468
= 2.0614
ARAMIT CEMENT-
= 1.4108
= 1.3235
= 1.1747
= 1.4192
= 3.7258
16 | P a g e
Average Collection Period ratio


7.65 


5.59
5.33 5.47 

3.73 

2.06 
1.41 1.32 1.42
1.17 

2010 2011 2012 2013 2014


Average payment period: Accounts payable / Average purchases per day
CONFIDENCE CEMENT-
2010: Average payment period = 12297855 / (39900759 / 365)
= 112.5
= 126.53
= 139.15
= 148.3
= 143.98
ARAMIT CEMENT-
= 167.24
2011: Average payment period = 9589101 / (18076094 /365)
17 | P a g e
= 193.62
= 171.84
= 189.26
= 209.12
Average Payment Period ratio



209.12 
193.62 189.26 
167.24 171.84 
139.15
148.3 143.98 
112.5
126.53 





2010 2011 2012 2013 2014


Total assets turnover: Sales / Total assets
CONFIDENCE CEMENT-
2010: Total assets turnover = 1718921397 / 3233338953
= 0.5316
= 0.6000
= 0.8012
18 | P a g e
= 0.7589
= 0.7182
ARAMIT CEMENT-
= 0.9348
= 0.7662
= 0.7142
= 1.0117
= 0.3336
Total Assets Turnover ratio
1.01
0.93
0.8
0.77 0.76
0.71 0.72
0.6
0.53
0.33
2010 2011 2012 2013 2014
Confidence Cemnet Aramit Cement
19 | P a g e
3.3.3 Debt Ratios: There are three section of liquidity ratio-
 Debt ratio: Total liabilities / Total assets
CONFIDENCE CEMENT-
2010: Debt ratio = 630013742 / 3233338959
= 0.1948
2011: Debt ratio = 1219591619 / 3734534286
= 0.3266
2012: Debt ratio = 1589950913 / 4083976310
= 0.3893
2013: Debt ratio = 1657627497 / 4857102041
= 0.3413
2014: Debt ratio = 2163207944 / 5061452990
= 0.4274
ARAMIT CEMENT-
2010: Debt ratio = 849424880 / 981625298
= 0.8653
2011: Debt ratio = 1095107018 / 1276680666
= 0.8578
2012: Debt ratio = 1311642843 / 1452929072
= 0.8501
2013: Debt ratio = 221671139 / 861301052
= 0.2574
2014: Debt ratio = 192612454 / 1869616263
= 0.1030
20 | P a g e
Debt ratio


0.87 0.86 0.85 




0.43
0.39 
0.34
0.33 
0.26
0.19 
0.1 

2010 2011 2012 2013 2014

Confidence cement Aramit Cement 

Time interest earned ratio: EBIT / Interest
CONFIDENCE CEMENT-
2010: Time interest earned ratio = 163630511 / 17469116
= 9.3668
= 7.0781
= 8.3328
= 6.6776
= 5.3677
ARAMIT CEMENT-
= 27.3890
21 | P a g e
= 21.3529
= 25.4522
= 5.9983
= 5.9749
Time Interest Earned ratio


27.39

25.45 

21.35




9.37
8.33 6 5.97 
7.08 6.68
5.37



2010 2011 2012 2013 2014


Fixed payment/charge coverage ratio: (EBIT + Fixed charged before taxes) /
(Fixed charged before taxes + Interest)
CONFIDENCE CEMENT-
2010: Fixed payment/charge coverage ratio = (295759030+163630511) /
(295759030+17469116) = 1.4666
(253181737+31107252) = 1.6650
(388371187+46063394) = 1.7775
22 | P a g e
(506376748+64475500) = 1.7542
(371070094+82797503) = 1.7955
ARAMIT CEMENT-
(110260277+6204689) = 3.3985
(725566830+6478041) = 1.1826
(70379269+6410449) = 3.0412
(54078352+23339660) = 2.5069
(15707893+17146641) = 3.5960
Fixed Payment/Charge Coverage ratio

3.3.4
3.6
3.4
3.04
2.51
1.78 1.75 1.8

1.67
1.47
1.18
2010 2011 2012 2013 2014
Profitability ratio: There are six section of liquidity ratio-

 Gross profit margin: Gross profit (Sales – COGS) / Sales
23 | P a g e
CONFIDENCE CEMENT-
2010: Gross profit margin = 236660592 / 1718921397
= 0.1376
= 0.1403
= 0.1716
= 0.2057
= 0.1817
ARAMIT CEMENT-
= 0.2280
= 0.1922
= 0.1947
= 0.2237
= 0.2397
24 | P a g e
Gross Profit Margin



0.24
0.23 0.22 
0.19 0.19
0.21 
0.17
0.18 
0.14 0.14 





2010 2011 2012 2013 2014


Operating profit margin: Operating profit / Sales
CONFIDENCE CEMENT-
2010: Operating profit margin = 163630511 / 1718921397
= 0.0952
= 0.0983
= 0.1173
= 0.1422
= 0.1220
ARAMIT CEMENT-
= 0.1843
25 | P a g e
= 0.1506
= 0.1480
= 0.1607
= 0.1642
Operating Profit Margin ratio


0.18

0.16

0.16
0.15 0.15 
0.14

0.12
0.12 
0.1 0.1 





2010 2011 2012 2013 2014

Confidence Cement Aramit cement 

Net profit margin: Earnings available for common stockholders / Sales
CONFIDENCE CEMENT-
2010: Net profit margin = 20739846 / 1718921397
= 0.0120
= 0.0317
= 0.0203
26 | P a g e
= 0.0231
= 0.0340
ARAMIT CEMENT-
= 0.0153
= 0.0157
= 0.0153
= 0.0194
= 0.0543
Net Profit Margin ratio

0.05
0.03
0.03
0.02
0.02 0.02
0.02 0.02 0.02
0.01
2010 2011 2012 2013 2014
27 | P a g e
 Earnings per share: Earnings available for common stockholders / Numbers
of share of common stock outstanding
CONFIDENCE CEMENT-
2010: Earnings per share = 20739846 / 2806474
= 7.39
= 5.29
= 6.23
= 8.09
= 5.32
ARAMIT CEMENT-
= 56.68
2011: Earnings per share = 15400000 /4666666
= 3.30
= 3.03
= 2.56
= 0.51
28 | P a g e
Earnings Per share ratio

56.68 








5.29 6.23
8.09
5.32 
3.3
2.39 3.03 2.56
0.51 
2010 2011 2012 2013 2014


Return on total assets: Earnings available for common stockholders / Total
assets
CONFIDENCE CEMENT-
2010: Return on total assets = 20739846 / 32333380953
= 0.0064
2011: Return on total assets =70922779 / 3734534286
= 0.0189
= 0.0162
= 0.0175
= 0.0244
ARAMIT CEMENT-
= 0.0143
29 | P a g e
= 0.0120
= 0.0109
= 0.0196
= 0.0181
Return On Total Assets ratio




0.02

0.02 
0.02
0.02
0.02 0.02 
0.01 
0.01
0.01


0.01 


2010 2011 2012 2013 2014


Return on Common Equity: Earnings available for common stockholders /
Common Stock equity
CONFIDENCE CEMENT-
2010: Return on Common Equity = 20739846 / 2603325211
= 0.0079
30 | P a g e
= 0.0282
= 0.0266
= 0.0346
= 0.0427
ARAMIT CEMENT-
= 0.1059
= 0.0848
= 0.0732
= 0.0617
= 0.0646
Return on Common Equity ratio
0.11
0.08
0.07
0.06 0.06
0.04
0.03
0.03 0.03
310.01
|Page
2010 2011 2012 2013 2014

3.3.5 Market ratio: There are two section of liquidity ratio-
 Price Earnings ratio: Market price per share of common stock / Earnings per
share
CONFIDENCE CEMENT-
2010: Price Earnings ratio = 195.835 / 7.39
= 26.5
= 32.2
= 22.8
= 17.1
= 16.78
ARAMIT CEMENT
= 1.666
= 3.572
= 4.488
= 6.335
= 34.274
32 | P a g e
Price Earnings ratio


34.27 
32.2

26.5 
22.8 

17.1 16.78 


6.34
3.57 4.49 
1.67 
2010 2011 2012 2013 2014


Market Book ratio: Market price per share of common stock / Book value per
share of common stock
CONFIDENCE CEMENT-
2010: Market Book ratio = 195.835 / 927.614
= 0.211
= 0.908
= 0.6062
= 0.4688
= 0.9012
ARAMIT CEMENT-
= 0.1764
33 | P a g e
= 0.3030
= 0.3287
= 0.391
= 2.213
Market Book ratio
2.21
0.91 0.9
0.61
0.47
0.33 0.39
0.3
0.21
0.18
2010 2011 2012 2013 2014
34 | P a g e
4. CONCLUTION-
4.1 Recommendation:
Confidence Cement ratio analysis-
2010 2011 2012 2013 2014
Current 1.36 1.236 1.2961 1.4114 1.3898
Quick 0.8733 0.8811 0.9938 1.2243 0.5956
Inventory 3.576 5.9306 7.5232 11.8468 7.642
turnover
Average 5.3343 5.4723 5.5903 7.6468 2.0614
collection
period
Average 112.5 126.53 139.15 148.3 143.98
payment period
Total asset 0.5316 0.6 0.8012 0.7589 0.7182
turnover
Debt 0.1948 0.3266 0.3893 0.3413 0.4272
Time interest 9.3668 7.0781 8.3328 6.6776 5.3677
earned
Fixed 1.4666 1.665 1.7775 1.7542 1.7955
payment/charge
coverage
Gross profit 0.1376 0.1403 0.1716 0.2058 0.1817
margin
Operating 0.0952 0.0983 0.1173 0.1422 0.122
profit margin
Net profit 0.012 0.317 0.023 0.0231 0.034
margin
EPS 2.39 5.29 6.23 8.09 5.32
ROA 0.0064 0.0189 0.0162 0.0175 0.0244
35 | P a g e
ROE 0.0079 0.0282 0.0266 0.0346 0.0427
P/E 26.5 32.2 22.8 17.1 16.78
M/B 0.211 0.908 0.6062 0.4688 0.9012
Aramit Cement ratio analysis-

2010 2011 2012 2013 2014
Current 0.7279 0.6895 0.6847 0.6664 0.9171
Quick 0.5518 0.5718 0.5753 0.5606 0.7369
Inventory 5.1163 6.4501 6.3046 4.9406 2.3198
turnover
Average 1.4108 1.3235 1.1747 1.4192 3.7258
collection
period
Average 167.24 193.62 171.84 189.26 209.12
payment period
Total asset 0.9348 0.7662 0.7142 1.0117 0.3336
turnover
Debt 0.8653 0.8578 0.8501 0.2574 0.103
Time interest 27.389 21.3529 25.4522 5.9983 5.9749
earned
Fixed 3.3985 1.1826 3.0412 2.5069 3.596
payment/charg
e coverage
Gross profit 0.228 0.1922 0.1947 0.2237 0.2397
margin
Operating 0.1843 0.1506 0.148 0.1607 0.1642
profit margin
Net profit 0.0153 0.0157 0.0153 0.0194 0.0543
margin
EPS 56.68 3.3 3.03 2.56 0.51
ROA 0.0143 0.012 0.0109 0.0196 0.0181
ROE 0.1059 0.0848 0.0732 0.0617 0.0646
P/E 1.666 3.572 4.488 6.335 34.274
M/B 0.1754 0.303 0.3287 0.391 2.213
36 | P a g e
 The Current Ratio of Confidence cement is higher than Aramit cement.
Here, Aramit would be better as the lower the current ratio the more
predictable the firm is.
 The Quick Ratio of Confidence cement is better than Aramit cement so
Aramit would be better the lower the ratio the better inventories can be
turned into cash.
 Inventory Turnover Ratio of Aramit is higher than Confidence cement that
means Aramit cement’s goods are more easily sold.
 Average Collection Period of Confidence Cement is higher than Aramit so
Aramit would take less time to collect its accounts receivable.
 Average payment period of Aramit is higher than Confidence Cement
which means Confidence cement will have a higher credit rating because it
pays it’s bills more in time.
 Total Asset Turnover of Aramit is higher than Confidence Cement which
means Aramit turns over its assets higher than Confidence Cement.
 Time Interest Earned ratio of Aramit Cement is higher than Confidence
Cement that means Aramit is better able to able the interest obligation.
 Fixed Payment Coverage ratio of Aramit is higher than confidence. The
higher the value of Fixed Payment Coverage the better.
 Gross Profit Margin and Operating Profit Margin of Aramit cement is
higher than Aramit.
 Earnings per Share of Confidence Cement is higher than Aramit cement.
That means the amount earned during the on behalf of each outstanding
share of common stock is higher for Confidence Cement.
 Returns On Total Asset of Confidence Cement is higher than Aramit
Cement which means Confidence Cement earns more on each 1Bdt
investment of common stockholders asset investment.
After evaluating all the data it seems investing on Aramit Cement would be more
37 | P a g e
Profitable than investing in Confidence Cement. So, Aramit Cement is the
recommendation.
4.2 Limitations of Analysis Offers:

 Historical. All of the information used in ratio analysis is derived from
actual historical results. This does not mean that the same results will carry
forward into the future. However, you can use ratio analysis on pro forma
information and compare it to historical results for consistency.
 Historical versus current cost. The information on the income statement is
stated in current costs (or close to it), whereas some elements of the balance
sheet may be stated at historical cost (which could vary substantially from
current costs). This disparity can result in unusual ratio results.
 Inflation. If the rate of inflation has changed in any of the periods under
review, this can mean that the numbers are not comparable across periods.
For example, if the inflation rate was 100% in one year, sales would appear
to have doubled over the preceding year, when in fact sales did not change at
all.
 Aggregation. The information in a financial statement line item that you are
using for a ratio analysis may have been aggregated differently in the past,
so that running the ratio analysis on a trend line does not compare the same
information through the entire trend period.
 Accounting policies. Different companies may have different policies for
recording the same accounting transaction. This means that comparing the
ratio results of different companies may be like comparing apples and
oranges. For example, one company might use accelerated depreciation
38 | P a g e
while another company uses straight-line depreciation, or one company
records a sale at gross while the other company does so at net.
 Business conditions. You need to place ratio analysis in the context of the
general business environment. For example, 60 days of sales outstanding
might be considered poor in a period of rapidly growing sales, but might be
excellent during an economic contraction when customers are in severe
financial condition and unable to pay their bills.
4.3 Scope of Improving the Analysis in Future:
39 | P a g e
Reference:
[ CITATION Toh11 \l 1033 ]
Works Cited
http://www.confidencecement.com/php_files/contents/contents.php?cmd=contents&cms_view=yr.
January-December 2010-2014.
Toha Anwar Rouf. Annual report 2010 of Confidence Cement Ltd. 29 05 2011. 30 11 2015.
<http://www.confidencecement.com/php_files/contents/contents.php?
cmd=contents&cms_view=yr>.
[ CITATION Rah12 \l 1033 ]
Works Cited
Rahaman Mostafa Alam. Annual report 2011 of Confidence Cement Ltd. 28 05 2012. 30 11 2015.
Works Cited
40 | P a g e
Works Cited
Works Cited
41 | P a g e

Project: Confidence Cement and Aramit Cement

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Confidence Cement and Aramit Cement

A comparison between Confidence Cement and Aramit Cement by calculating

Inventory 414494683 324812473 360255810 233412271 396303714

Accounts 25121601 33599795 50113216 7293363 90529372

Total assets 2169583275 2527707566 2794410015 3007080916 3229796222

Year 2010 2011 2012 2013 2014

Inventory 100% 178.36 86.91 56.31 95.61

Accounts 100 133.75 199.48 290.32 360.36

Total assets 100 116.50 128.79 138.60 148.87

2014 167.96 95.61 360.36 124.12 569.12 148.87

2013 266.51 56.31 290.32 128.85 449.08 138.6

2012 106.29 86.91 199.48 121.51 343.35 128.79

2011 146.74 178.36 133.75 120.43 178.36 116.5

2010 100 100 100 100 100 100

Inventory 138,466,161 122,510,866 140,770,770 136,921,094 204,429,637

Accounts 8,954,375 3,546,955 3,546,955 33,898,228 264,666,044

Total assets 295313101 559,353,183 525224335 365,837,258 587,304,193

Inventory 100% 88.48 101.66 98.89 147.64%

Accounts 100% 39.61% 39.1% 378.57% 2955.72%

Total assets 100% 189.41 177.85 123.88 198.88%

Aramit cement horaizontal analysis

2014 104.26 147.64 295.72 73.53 245.29 198.88

2013 366.56 98.89 378.57 86.92 70.56 123.88

2012 86.47 101.66 39.1 83.73 263.43 177.85

2011 54.05 88.48 39.61 98.72 235.2 189.41

2010 100 100 100 100 100 100

Inventory 414494683 324812473 360255810 233412271 396303714

Accounts 25121601 33599795 50113216 7293363 90529372

Total assets 2169583275 2527707566 2794410015 3007080916 3229796222

Year 2010 2011 2012 2013 2014

Total assets 100 100 100 100 100

Inventory 138,466,161 122,510,866 140,770,770 136,921,094 204,429,637

Accounts 8,954,375 3,546,955 3,546,955 33,898,228 264,666,044

Total assets 295313101 559,353,183 525224335 365,837,258 587,304,193

Inventory 47% 22% 27% 37% 35%

Total assets 100% 100% 100% 100% 100%

aramit cement verti cal analysis

2011 2 22 6 22 53.4 100

2010 8 47 3 41.5 0.5 100

0.57 0.58 0.56 0.6

2010 2011 2012 2013 2014

Confidence Cement Aramit Cement

Activity Ratio: There are four section of activity ratio.

Inventory Turnover ratio

2010 2011 2012 2013 2014

Confidence Cement Aramit Cement

Average Payment Period ratio

Total Assets Turnover ratio

2010 2011 2012 2013 2014

Confidence Cemnet Aramit Cement

Time Interest Earned ratio

Fixed Payment/Charge Coverage ratio

1.78 1.75 1.8

2010 2011 2012 2013 2014

Confidence Cement Aramit Cement

Profitability ratio: There are six section of liquidity ratio-

Operating Profit Margin ratio

Net Profit Margin ratio

2010 2011 2012 2013 2014

Confidence Cement Aramit Cement

Return On Total Assets ratio