Market ratios are used to calculate the response of the investors for buying / owning the shares of the company and the costs associated with the issuing of these shares. These ratios mainly relate to the calculation of return on investment for the shareholders. These ratios are used to find the relationship between the return and value of the investment in the shares of the company.
Market ratio analyses have been carried out by using both horizontal analysis and cross-sectional analysis for the three companies over a period of three years.
Our study found that Attock Cement Pakistan Limited has shown the best performance over these three years under observation as compared to Cherat Cement Company Limited and Dewan Cement Limited.
This study also highlights the poor conditions of the companies in this industry and also alarms of the overall decline in the cement industry.
Based on this study, we can see that the year 2009 was the better of the three years under observation for all the three companies under study.
Table of Contents
1. Introduction
1.1 Financial period under consideration for analysis
1.2 Objectives
1.3 Significance
2. Data processing and analysis
2.1 Data collection sources
2.2 Data processing and analysis tools
3. Data analysis
Market ratios
• Dividend per share
• Earning per share
• Price \ Earning ratio
• Percentage of earnings retained
• Dividend payout
• Dividend yield
• Book value per share
Trend analysis
4. Conclusion and recommendations
4.1 Conclusion
4.2 Recommendations
Objectives and Topics
The primary objective of this research is to evaluate and compare the financial performance of three major companies in the Pakistani cement industry—Attock Cement Pakistan Limited (ACPL), Cherat Cement Limited (CHCC), and Dewan Cement Limited (DCL)—through a comprehensive market ratio analysis for the financial years 2008, 2009, and 2010.
- Analysis of market ratios to assess company financial strength and shareholder returns.
- Application of horizontal and cross-sectional analysis methods over a three-year period.
- Evaluation of dividend policies and retention rates within the cement manufacturing sector.
- Assessment of the impact of financial performance on market position and investment attractiveness.
- Formulation of strategic recommendations for companies facing competitive or operational challenges.
Excerpt from the Book
• Earning per share
EPS is thought of as a very important factor in determining the worth of the share. Earning per share tells us how much earning is allocated to each share. There are two types of EPS; one is called the basic EPS and the other one is called the diluted or fully diluted EPS. The difference is that in diluted EPS, all the factors are accounted for which would make the earnings lesser because of payments to be made. This process is called dilution.
EPS is an important figure to be used in the calculation of price earning ratio, as we shall see in the subsequent paragraphs.
It is one of the profitability ratios. It is used by investors to see how profitable an investment would be for the amount of money invested.
In our study we can see that ACPL has the highest EPS compared to CHCC and DCL. In fact, DCL has had losses per share and even CHCC posted loss in the most recent year.
In the case of ACPL the earnings increased to Pak Rupees 17.24 per share in year 2009 as compared to year 2008 (Pak Rupees 6.03 per share), however, in year 2010 these decreased to Pak Rupees 11.74 per share.
In the case of CHCC the earnings increased to Pak Rupees 1.67 per share in the year 2009 from Pak Rupees 0.11 per share in 2008, however, in year 2010 there were losses of Pak Rupees 0.14 per share.
In the case of DCL the losses were reduced to Pak Rupees 0.46 per share in the year 2009 from loss per share of Pak Rupees 1.39 in year 2008, however, in year 2010 we see the loss increasing to 1.74 per share.
Summary of Chapters
1) Introduction: Provides an overview of market ratio analysis, defining the scope, objectives, and significance of comparing financial performance within the cement manufacturing industry.
2) Data processing and analysis: Outlines the primary and secondary sources of financial data and the analytical tools used for processing the information.
3) Data analysis: Details the calculation and interpretation of specific market ratios, including dividend, earning, price/earning, and book value metrics, alongside a comprehensive trend analysis.
4) Conclusion and recommendations: Synthesizes the findings to evaluate whether research objectives were met and provides strategic suggestions for company improvement.
Keywords
Market Ratio Analysis, Attock Cement Pakistan Limited, Cherat Cement Limited, Dewan Cement Limited, Investment Performance, Financial Statements, Dividend Policy, Earnings Per Share, Price Earning Ratio, Book Value, Cement Industry, Pakistan Stock Exchange, Profitability, Shareholders, Trend Analysis
Frequently Asked Questions
What is the core focus of this research paper?
The research focuses on the market ratio analysis of three specific Pakistani cement companies—ACPL, CHCC, and DCL—to determine their financial health and investment attractiveness between 2008 and 2010.
Which specific financial metrics are examined in the study?
The study examines several key ratios, including Dividend per Share, Earning per Share (EPS), Price/Earning ratio, Percentage of earnings retained, Dividend payout, Dividend yield, and Book value per share.
What is the primary objective of this analysis?
The primary objective is to assist prospective investors and management by interpreting financial data to identify which company maintains the most stable market position and provides the best returns.
What methodology is employed to analyze the company data?
The research uses both horizontal and cross-sectional analysis, utilizing annual audited financial statements obtained from the Karachi Stock Exchange and official company portals.
What does the main body of the research cover?
The main body is divided into chapters covering the introduction, data processing methodology, a detailed breakdown of financial ratios with visual representations, and a concluding trend analysis.
Which keywords best describe this publication?
The key themes are market ratio analysis, corporate profitability, investment safety margins, shareholder returns, and the economic assessment of the Pakistani cement industry.
How did Attock Cement Pakistan Limited (ACPL) perform compared to the other companies?
ACPL demonstrated superior performance throughout the study period, being the only company among the three to report consistent profits and maintain a regular dividend payout.
What does the study conclude regarding the overall state of the cement industry?
The study highlights a general decline in the industry during the observation period, noting that most analyzed companies faced significant challenges and downward trends in their market performance.
Why are the dividend payout ratios for Dewan Cement Limited (DCL) marked as zero?
The ratio is zero because DCL recorded consistent losses throughout the years 2008, 2009, and 2010, rendering it unable to declare dividends to its shareholders.
What is the final recommendation provided by the author for struggling companies?
The author recommends that struggling firms like DCL and CHCC urgently investigate their operational and marketing strategies and potentially hire professional consultants to restore profitability.
- Arbeit zitieren
- Mohammad Athar (Autor:in), 2012, Market Ratio Analyses of Attock Cement Limited, Cherat Cement Limited and Dewan Cement Limited for Financial years 2008, 2009 and 2010, München, GRIN Verlag, https://www.grin.com/document/286345
