A STUDY ON FINANCIAL & PERFORMANCE ANALYSIS OF ACC LIMITED.

Presented by: Vignesh C J 8uta45

HISTORY:
YEAR HAPPENINGS

16th century

Romans was the first to use cement .

1760

John Smeaton was first to develop best composition of hydraulic cement.

1824

Joseph Aspdin was granted a patent (no. 5022) for Portland cement.

YEAR
1904

HAPPENING
First cement factory was started in Chennai. Manufacture of Portland cement on large scale started by Indian Cement Co.Ltd.

1914

1924

10 cement factories in India with total production of 5.81 lakh tones PA.
Incorporation of The Associated Cement Companies Limited on August 1, 1936. 17 Factories in India with total capacity of 26.15 lakh tones PA. After partition 18 factories remained in India of total capacity 21.15 lakh tones.

1936

1939

1947

ABOUT INDUSTRY
The Indian cement industry is the second largest market after China.

Cement industry plays an important role in the process of development

of an economy.

The infrastructural development of a country depends considerably on

the growth of cement industry.

Cement is used as binding material along with bricks, stones, iron and

steel in the construction building, bridges, roads, etc..

ABOUT COMPANY
India's foremost manufacturer of cement and concrete.

spread throughout the country with 14 modern cement factories,

more than 30 Ready mix concrete plants, 20 sales offices, and several zonal offices. Every factory has pollution control equipment and devices. Company has won several prizes and certificates of merits for environmental measures undertaken at its various plants and

mines.
As the largest cement producer in India, it is one of the biggest customers of the Indian Railways.

OBJECTIVE OF THE STUDY

To compute the financial position of the ACC Ltd., To analyze the profitability and solvency position of the firm. To analyze the efficiency of the firm through ratios. To suggest ways and means to improve the present condition. To examine the over all performance of the company.

To study the future prospect of Indian Cement Industry.

FINANCIAL ANALYSIS
The primary objective is to judge profits and financial soundness of the company. The financial analysis are the mirrors, which reflect the financial positions and operating strength or weakness of the concern Better understanding of a firms position and performance. Consist of various ratios.

RATIOS USED
CURRENT RATIO
The companys ability to meet current obligations, the current assets must be sufficient to pay current liabilities.

Current assets Current liability

*100

QUICK RATIO
Quick assets are those assets, which are readily convertible into cash. They include cash and bank balances, bills receivable, debtors, short-term investments.

current Assets - Inventories

Current Liability

Cont
CASH RATIO Trade investment or marketable securities are equivalent of cash; they may be included in the computation of cash ratio. Cash + Marketable Securities Current Liabilities

NETWORKING CAPITAL RATIO The difference between current assets and current

liabilities excluding short-term bank borrowing. The larger NWC has the greater ability to meet its current obligations. Net Working Capital Net Assets

Cont
DEBTORS TURNOVER RATIO The liquidity position of the firm depends on the quality of

debtors largely.
Sales Debtors

DEBTORS COLLECTION PERIOD The ratio indicates the extent to which the debts have been collected in time. It gives the average debt collection period Debtors Sales x 360

Cont
NET ASSETS TURNOVER RATIO Net assets include Net Fixed Assets (NFA) and Net Current Asset (NCA) that is Current Assets (CA) minus Current Liabilities (CL).

Sales
Net assets

CURRENT ASSETS TURNOVER RATIO The firm may wish to know its efficiency of utilizing fixed assets and

current assets separately.

Sales Current assets

Cont
WORKING CAPITAL TURNOVER RATIO The ratio indicates the relationship between the sales and working capital and this ratio shows whether the working capital has been efficiency or not. Sales Network capital

INVENTORY TURNOVER RATIO The efficiency of the firm in producing and selling its product.

Cost of goods sold Average Inventory

Cont
FIXED ASSETS TURNOVER RATIO

Indicates whether the investments in fixed assets have been judicious

or not. Firms efficiency of utilizing fixed assets. Sales Net fixed assets

GROSS PROFIT RATIO

The difference between sales and the manufacturing cost of goods sold. Gross profit Sales

x 100

Cont
NET PROFIT RATIO Obtained when operating expenses, interest and taxes are

subtracted from the gross profit. Net profit Sales

x 100

STOCK TO CURRENT ASSETS RATIO This ratio establishes the relationship between stock and current assets. This shows low much of current assets are occupied by the stock. Stock Current Assets

Cont
SUNDRY DEBTORES TO TURNOVER RATIO The relationship between sundry debtors and current assets. Higher ratio indicates the high contribution of sundry debtors towards current

assets of the firm.

Sundry debtors Current Assets

RETURN ON CAPITAL EMPLOYED This ratio is also called Return on Investment. It measures the sufficiency or profit in relation to Capital Employed. Net Profit Capital Employed *100

Cont
RETURN ON SHAREHOLDERS FUND Determines the profitability from the Shareholders point of view.

Net Profit (After Interest & Tax)

Shareholders Fund

RETURN ON CAPITAL TURNOVER RATIO Calculate the rate of return on common equity, and is a measure of how well a company uses its stockholders equity to generate revenue. Sales Capital Employed

Cont
DEBT EQUITY RATIO Indicates what is the proportion of fixed interest bearing capital taken by the company, as compared to the equity shareholders capital.

Total debt Equity

*100

CAPITAL EMPLOYED TO NET WORK RATIO shows funds contributed by lenders and owners Capital Employed (CE) Net Worth (NW)

Cont
EQUITY RATIO
The ratio of proprietors funds to total funds is an important ratio for determining long-term solvency of a firm. The total asset on the other hand denotes total resources of the concern Shareholders fund Total Assets

RATIO OF FIXED ASSETS TO PROPRIETORS FUND The ratio establishes the relationship between the fixed assets and

shareholders funds i.e. the share capital plus reserves, surplus and
retained earnings. Fixed Assets Shareholders fund

Cont
RATIO OF CURRENT ASSETS TO PROPRIETORS FUND The ratio indicates the extent to which proprietors funds are invested in current assets.

Current Assets Shareholders funds

RATIO ANALYSIS OF ACC CEMENTS

YEARS
PARTICULARS

2003-2004
1.24

2004-2005
1.22

2005-2006
1.27

2006-2007
1.16

2007-2008
1.31

2008-2009
1.07

CURRENT RATIO

QUICK RATIO

0.76

0.75

0.66

0.67

0.91

0.72

CASH RATIO NETWORKING CAPITAL RATIO DEBTORS TURNOVER RATIO DEBTORS COLLECTION PERIOD NETASSETS TURNOVER RATIO

.69

.66

.57

.68

.95

.76

.06

.05

.06

.05

.11

.03

19.17

18.01

20.48

21.45

27.12

24.22

18.78

20.89

18.58

22.38

13.27

14.86

1.24

1.08

1.15

.89

1.33

1.41

Cont
YEARS
PARTICULARS FIXED ASSETS TURNOVER RATIO CURRENT ASSETS TURNOVER RATIO WORKING CAPITAL TURNOVER RATIO

2003-2004
1.47 3.92

2004-2005
1.38 3.24

2005-2006
1.56 3.21

2006-2007
1.10 2.25

2007-2008
1.99 2.89

2008-2009
2.11 3.18

19.91

20.08

20.39

16.76

12.11

48.48

INVENTORY
TURNOVER RATIO GROSS PROFIT RATIO NET PROFIT RATIO STOCK TO CURRENT ASSETS RATIO

8.93

7.28

5.88

4.27

7.49

6.79

11.57

16

18

19.78

19

29

2.98

6.09

9.70

16.99

20.92

20.53

.39

.37

.45

.42

.31

.33

Cont
YEARS
PARTICULARS

2003-2004
.09 1.12

2004-2005
.15 .91

2005-2006
.23

2006-2007
.25 .71

2007-2008
.39 1.07

2008-2009
.37 1.0

RETURN ON SHAREHOLDE RS FUND

CAPITAL TURNOVER RATIO DEBT EQUITY RATIO CAPITAL EMPLOYED TO NET WORK RATIO

.94

.66

.63

.64

.77

.49

.50

2.69

2.28

2.14

1.69

1.39

1.19

EQUITY RATIO FIXED ASSETS TO PROPRIETORS FUND CURRENT ASSETS TO PROPRIETORS FUND

.38

.44

.47

.59

.72

.84

2.20

1.75

1.57

1.36

.93

.80

.83

.75

.76

.67

.64

.53

CHART SHOWING THE RATIO ANALYSIS

Cont

Cont
50 45

40

2003-2004 2004-2005 2005-2006

35

30 2006-2007 25 2007-2008 2008-2009

20

15

10

0 CURRENT RATIO DEBTORS TURNOVER RATIO DEBTORS COLLECTION PERIOD NETASSETS TURNOVER RATIO WORKING CAPITAL TURNOVER RATIO INVENTORY TURNOVER RATIO GROSS PROFIT RATIO

FINDINGS
Current Ratio shows an average ratio of 1.21which is less than the ideal ratio is 2:1. Cash Ratio shows as average greater than its ideal ratio that is 0.5. Debtors Turnover Ratio shows the amount of credit sales has been increased, collection period is derived as 18 days. In the calculation of Working capital Turnover Ratio there is an adequacy of fund except the year 2007-2008. Gross profit ratio is fluctuating during the period of study. The companys Net Profit Margin has declined. Capital Employed in the concern has been efficiently utilized

CONCLUSION
The company should maintain quick ratio of 1:1. The Debt/Equity ratio is satisfactory during the period of study. Company is efficiently utilizing its Fixed Assets and Current Assets in generating sales Inventory Turnover ratio implies that the Inventory has been utilized efficiently.

THANK YOU !!!