Some of the major Ratio Analysis for the Cement Industry

1. Presented By:Group:2
Aditiya Choudary
Ankit Ranjan
Kumar Rahul
Prashant Jaiswal
Rohitha Reddy

2. HISTORY
 ACC Limited is India’s foremost cement manufacturer with a
countrywide network of factories and marketing offices.
 Established in 1936, ACC has been a pioneer and trend-setter
in cement and concrete technology.
 Among the first companies in India to include commitment to
environment protection as a corporate objective. ACC is the
most preferred cement brand name in India.
 ACC is now part of the worldwide Holcim Group.

3. KEY DEMAND DRIVERS
 INFRASTRUCTURE
• Construction linked sector account for 8.3% of 12th plan spend
~850bn.
• Infrastructure development - Roads, Ports, Power, etc
 COMMERCIAL / INDUSTRIAL
• High growth in retail, commercial and institutional sector in urban
and semi-urban areas
• High growth in industry segment
 HOUSING
• Populaltion growth and rising percapita income
• Mass urbanization of ~250 Million people over next ~20 years
• Thrust by Govt. on Rural / low cost / mass housing.

5. CORPORATE GOVERNANCE
 ACC had systems in place for effective strategic planning and
processes, risk management, human resources development
and succession planning
 The Company’s core values are based on integrity, respect for
the law and strict compliance thereof, emphasis on product
quality and a caring spirit.
 The Shareholders-Investors Grievance Committee was formed
way back in 1962 and the Compensation Committee was
convened since 1993.

6.  It is the continuous endeavour of the Board of Directors to
achieve the highest standards of Corporate Governance
through the adoption of a strategic planning process.
 The Annual Reports, press releases and other communication
have always made full disclosures on various facets of
importance to the stakeholders, particularly with regard to
information relating to financial matters.
 As part of their pledge to support the effort to help reduce the
carbon footprint of our Country,They have circulated an appeal
to their shareholders by agreeing to receive documents such as
Annual Reports and other related details by electronic mail
instead of physical copy.

7. LIQUIDITY RATIOS
 CURRENT RATIO : It is a measure of liquidity calculated by
dividing current assets by current liabilities.
Current Ratio = Current Assets/Current Liabilities
 QUICK RATIO/ACID-TEST RATIO : It is the ratio between quick
current assets and current liabilities.
Quick Ratio =Quick Assets/Current Liabilities
 DEBTORS TURN OVER RATIO : It is determined by dividing the
net credit sales by average debtors outstanding during the year.
Debtors Turn Over ratio=Net Credit Sales/Average debtors

8. LIQUIDITY RATIOS
 CREDITORS TURN OVER RATIO : It is a ratio between net
credit purchases and the average amount of creditors
outstanding during the year.
Creditors Turn Over Ratio=Net Credit Purchases/Average
Creditors

9. SOLVENCY RATIOS
 DEBT –EQUITY RATIO : It measures the ratio of long-term
or total debt to shareholder equity.
Debt –Equity Ratio=Long Term Debt/Shareholder’s Equity
OR
Debt –Equity Ratio=Total Debt/Shareholder’s Equity
 DEBT TO TOTAL CAPITAL RATIO :It indicates the extent to
which assets are financed by owners fund .
Debt To Total Capital Ratio=Long-Term Debt/Permanent
Capital
OR
Debt To Total Capital Ratio=Total Debt/Total Assets

10. SOLVENCY RATIOS
 PROPRIETARY RATIO : It indicates the extent to which
assets are financed by owners fund.
Proprietary ratio=(Proprietor’s Funds/Total Assets)*100
 DIVIDEND COVERAGE RATIO : The ratio is the ratio of net
profits after taxes(EAT) and the amount of preference
dividend.
Dividend Coverage=EAT/Preference Dividend
 FIXED CHARGE COVERAGE RATIO :It measures the
firm’s ability to meet all fixed payment obligations.
Fixed Charge Coverage Ratio =
EBIT+LeasePayment/Interest+Lease payments+(Preference
Dividend+Instalment of Principal)/(1-t)

11. SOLVENCY RATIOS
 DEBT-SERVICE COVERAGE RATIO(DSCR):It is the ability
of a firm to make the contractual payments required on a
scheduled basis over the life of the debt.
DSCR= n (EAT+Interest+Depriciation+OA/ Instalment)
t 1

12. PROFITABILITY RATIOS
 GROSS PROFIT RATIO: By comparing Gross Profit
percentage to Net Sales we can arrive at the Gross Profit
Ratio.
Gross Profit Ratio = (Gross Profit / Net Sales ) x 100
Alternatively:
Gross Profit Ratio = [ (Sales – Cost of goods sold)/ Net Sales]
x 100.
 NET PROFIT RATIO: It is expressed as:
( Net Profit / Net Sales ) x 100
 RETURN ON ASSETS:It is expressed as:
(Net Profit after Taxes / Total Assets)

13. PROFITABILITY RATIOS
 RETURN ON CAPITAL EMPLOYED:
( Net Profit before Interest & Tax / Average Capital
Employed) x 100
(Average Capital Employed is the average of the equity
share capital and long term funds provided by the owners
and the creditors of the firm at the beginning and end of the
accounting period.)
 RETURN ON EQUITY CAPITAL(ROE):
(Net Profit after Taxes / Tangible Net Worth)
 PRICE EARNING RATIO:
(Market Price Per Equity Share/Earning Per Share)

14. PROFITABILITY RATIOS
 EARNING PER SHARE:
(Net profit after Taxes and Preference Dividend/ No. of
Equity Shares)
 CASH EARNING PER SHARE:
(Net profit available to equity owners+ Depreciation
+Amortisation+ Non cash expense / Number of equity
shares outstanding)

15. EFFICIENCY RATIOS
 INVENTORY TURNOVER RATION:
(Cost of goods sold/Average inventory)
Where: Average inventory=(Opening stock +Closing stock)/2
 ASSET TURNOVER RATIO:
(Net sales/Tangible Assets)
 FIXED ASSET TURNOVER RATIO:
(Net sales/Fixed Assets)
 CURRENTASSET TURNOVER RATIO:
(Net Sales/Current Assets)

16. EFFICIENCY RATIOS
 WORKING CAPITAL TURNOVER RATIO:
(Cost of goods sold/Net Working capital)
Where:
(Net Working Capital=Current Assets-Current Liabilities)

17. HIGH & LOW PRICES

18. CONCLUSION
 The finding of the survey is enough proof to show that ACC
cements ranks high in quality, composition etc., It is observed
that ACC cement has a maintained better product image
among the person who have used it and are using it.
 But in a competitive field one should not satisfy himself with
present performance. In order to maintain higher competitive
efficiency there should be continuous product planning and
market improvement.
 ACC cement producer and their dealers may consider the
preference analysis report and suggestions for achieving
higher standards of marketing performance in the future.