presented by:saurabh jain fms, govt. engineering college,
TRANSCRIPT
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PRESENTED BY:-
SAURABH JAIN
FMS, GOVT. ENGINEERINGCOLLEGE, AJMER
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To analyse the financial performance of
Shree Cement Ltd. through ratioanalysis and its comparison with the other
key cement players
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Ticker : SHR
Country : INDIA
Major Industry : Construction
Sub Industry: : Cement Producers
Employees: : 1,982
BSE code : 500287
NSE Symbol : SHREECEM
Market Cap: : 41,405,783,774
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Golden Peacock Award National Energy Conservation Award
Greentech Award , 2009 Excellence in water management
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Multiple Brand
Strategy
Efficient team
Exceptional
execution
Excessive
dependance
Marketing mix
not proper
Location Advantage
Initiatives
Government Policy
Threats of new entrants
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8.34 5.28
54.8174.74
165.91
0
20
40
6080
100
120
140
160
180
Rs.
Mar '05 Mar '06 Mar '07 Mar '08 Mar '09
years
Earning per shar
Current ratio
0.88
2.71
2.28
0
0.5
1
1.5
2
2.5
3
1 2 3
years
r a t i
years
Dividend Pay- out rati
Mar '07,
13.46
Mar '08,
12.52
Mar '06,
107.92
Mar '05,
54.66
Mar '09,
6.02
Mar '05
Mar '06
Mar '07
Mar '08
Mar '09
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0.518410616
0.794174001
1.135443159
0
0.2
0.4
0.6
0.8
1
1.2
ratio
1
years
Inventory turnover raio
Operating Profit Ratio
26.87 28.69 34.14
0
5
10
15
20
25
30
35
40
2005-2006 2006-2007 2007-2008
Years
O P R
( I n
Operating Profit
Ratio
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R e t u rn o n N e t W
2 4 .
9 . 6
3 6 .
0
5
1 0
1 5
2 0
2 5
3 0
3 5
4 0
2 0 0 5 - 2 0 0 62 0 0 5 - 2 0 0 72 0 0 5 - 2 0 0 8
Y e
R O N W
( I n %
) R e t u rn o n N e t
% )
9
1 3 . 4
0
2
4
6
8
1 0
1 2
1 4
R a t i o i
2 0 0 7 2 0 0 8
Y e a
N e t P ro f it R a t io
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An increase in EPS is pointing towards favourable conditions to invest inthis company.
A decrease in the dividend pay out ratio suggests that the company is
distributing a lower portion of its earnings in the form of dividends and sowill be financially stronger and is likely to expand and grow at a faster rate.
A high current ratio in 2008 (2.28) is good from the creditor’s point of view
but extremely high current ratio is not good from the management point of view.
In such a case (1) more funds of the firm would be employed in unproductive useswhich don not fetch any return (2) it is an indicator of a firm’s poor investment
policy
A high inventory turnover/stock velocity indicates efficient management
of inventory because more frequently the stocks are sold, the lesser amount of money is required to finance the inventory.
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The higher value of debtors turnover shows that the Shree is becoming
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• .
The operating profit ratio of the Shree Cement Ltd. is continuously
increasing in the successive years and thus we can say that this company hasbeen able not only to increase its sales but also been able to cut down its
operating expenses
A high return on equity indicates that the Shree is spending wisely and is
likely profitable.High returns on equity lead to higher stock prices.
The Net Profit ratio has increased in magnitude by 4.43 from 2007 to 2008.
This ratio not only reveals the recovery of the cost and expenses from the
revenue of the period but also leave a margin of reasonable compensation to the
owners for providing capital at their risk.
Book value per share has increased from 130.48 in 2007 to 193.13 in 2008
which is indicative of higher resources of the company. This company is a
potential bonus candidate in the long run
The higher value of debtors turnover shows that the Shree is becoming
more efficient in the management of debtors
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