The document analyzes the financial performance of J.K. Cement Limited from 2011-2015 using ratio analysis. Key findings include that the company's profits increased 61% in 2014-15 due to increased sales volumes. Working capital is well managed at 31.54% of current assets. Liquidity needs some improvement as current ratios are below ideal levels. Efficiency ratios show improved inventory and debtors' turnover. Overall, the analysis finds that while financial performance is satisfactory, there is still scope for further improvement in liquidity, efficiency, and profitability.

1. “A STUDY ON FINANCIAL ANALYSIS OF
J.K.CEMENT LIMITED.”
Presented by:-
Tanya
(MBA)

2. 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 firm’s position and performance.
 Consist of various ratios.

3. BASIC FOUNDATIONOF J.K.CEMENTLTD
 TYPE : Cement industry
 FOUNDED : 1888
 FOUNDER : Lala Juggilal Singhana & Lala Kamlapat Singhania
 HEADQUATERS : New Delhi, India
 PRODUCTS : Cement, Tyre , Paper , Software
 REVENUE : 15,692 Lac’s (as per FY 2015)

4. INTRODUCTION
 J. K. Cement Ltd. is one of the largest cement manufacturers in India.
 J.K. Cement Ltd is an affiliate of the multi-disciplinary industrial
conglomerate J.K. Organisation which was founded by Lala Kamlapat
Singhania.
 J.K. Cement Ltd. has formed a wholly owned subsidiary namely J.K.
Cement (Fujairah) FZC , UAE.
 The company has two manufacturing facilities located at Nimbahera
and Mangrol in the state of Rajasthan.
 The Company is the second largest manufacturer of white cement in
India, with an annual capacity of 600,000 tonnes in India.
 J.K.Cement started its commercial production in May 1975 in its first
plant Nimbahera in Rajasthan.

5. MISSON
• To deliver superior value to customers, shareholders, employees &
society at large.
VISION
• Customerization , Employee empowerment
• Quality consistency
• Product range & Cost competitiveness
Mission & Vision

6. Objectives of the study
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 effectiveness of working capital management
practices of the firm
To get aware with the procedure and problems of the finance
department.

7. Research methodology
Type of research
Analytical Research
Data collection technique
Ratio analysis
Working capital analysis
Company’s Performance indicators
Sample size
Financial Statements of J.K. Cement ltd of 2011 to 2015
Type of data & data collection
Secondary data- Text book , Websites, Annual reports
Statistical tools used
Charts , Trends and Tables

8. SWOT
STRENGTH
• Quality in
products and
services
•Convinient price
•Customer loyalty
•Strong market
presence
OPPORTUNITY
•Global expansion:
New geographical
areas
•Increasing online
sales
THREATS
•Intense
Competition
•Slow market
Growth
•Cultural barriers
•economy
WEAKNESS
•Low global
presence
•Brand image : Weak
reputation

9. Financial analysis

10. B
A
L
A
N
C
E
S
H
E
E
T

11. Management of Working Capital at J.K. Cement:-
PARTICULARS 31-03-15 31-03-14
Amt (in lacs.) Amt (in lacs.)
Current assets
Inventories 50978.54 54195.48
Trade Receivables 13940.46 11170.68
Cash & Cash equivalents. 40770.57 34755.29
Other Current Assets 954.01 1422.61
Current Investments 3050.00 4650.00
Loans & Advances
Short term loans &advances 28454.29 23081.95
Gross working capital 138147.87 129276.01
Less- Current Liabilities
Trade Payables 22925.76 24672.66
Other current liabilities 40268.95 36305.44
Provisions 4766.56 3452.49
Working Capital 70186.60 64845.42
Less – Borrowings 26335.28 19850.33
(Short term cash credits)
Net Working capital 43851.32 44995.09

12. Particulars 2014-15(IN LACS.) 2013-14(IN LACS.)
Total current assets 138147.87 129276.01
Total current liabilities 94296.55 84280.92
Net Working capital 43851.32 44995.09
Particulars 2014-15(IN LACS.) 2013-14(IN LACS.)
Gross Working Capital 138147.87 129276.01
Working Capital 70186.60 64845.42
Net Working Capital 43851.32 44995.09
Interpretation
From above we can see that the Company has 43851.32 lacs working
capital which is 31.54% of its current assets which more than the ideal
value of 25% .So Company has excess of working capital the which is
good for the company ,which means company can easily be able to meet
out its current obligations.

13. Financial Review (` in lacs)
YEAR 2014-15 2013-14 Growth
(%)
Net Sales 3,33,731 2,78,154 20%
EBIDTA 45,524 37,491 21%
PBT 15,915 13,627 17%
PAT 15,692 9,703 61%
EPS( Rs.) 22.44 13.88 61%
2014-15
2013-14
Interpretation :-
The renewed performance of the company can be attributed to additional
volumes and contribution from all its individual plants and products. The
Financial Year 2014-15 has been a successful year as the Company has
added Grey Cement capacity of 3 MnTPA and White Cement capacity of 0.6
MnTPA of its subsidiary J.K. Cement Works (Fujairah) FZC, UAE.
Company’sperformance

14. LIQUIDITY RATIOS
2015 2014 2013 2012 2011
Current
Ratios 0.83 0.89 0.88 1.03 1.00
Quick Ratios 0.78 0.73 0.75 0.83 0.77
Ratio analysis
•The ideal current ratio is 2:1 but here it is 0.83 in FY2015 and it has
decreased too from last year. But it is considered somewhat
satisfactory from organizational point of view. But still company
should look forward towards liquidity.
•The quick ratio has improved this year from last year, but there are
also chances of further improvement in liquidity position.

15. Solvency Ratios
Debt- Equity Ratio 1.47 1.42 0.78 0.84 0.98
Interest Coverage
Ratio 1.73 1.89 3.44 3.03 1.64
•The debt-equity ratio has increased thus the aggressiveness of the
company in financing its growth with debt has increased.
•The capability of company in covering the interest from capital
earnings has reduced from last year , but the ideal ICR is considered to
be 1.5 thus the company is still in satisfactory position.

16. EFFICIENCY RATIOS
2015 2014 2013 2012 2011
Inventory
turnover
ratios
7.59 5.16 6.31 7.02 6.52
Debtors
turnover
Ratios
26.67 24.64 29.27 25.25 29.37
Asset
Turnover
Ratios
0.84 0.82 1.07 0.99 0.86
• Inventory is being used effectively & effeciently for generating sales in
FY2015 as compared to last years.
• As the debtor turnover ratio has increased as in FY2015 from last year it is
clear that the company has improved its credit collection policy, but still there
are chances of further improvements.
• Fixed assets has been used effectively in FY2015 than FY2014 but in
previous years the use of fixed assets were more efficient.

17. PROFITABILITY RATIOS
2015 2014 2013 2012 2011
Operating Profit Margin % 13.59 13.40 19.23 20.28 13.26
Gross Profit Margin % 9.51 8.61 14.82 15.35 7.87
Net Profit Margin % 4.68 3.47 8.02 6.96 3.05
Return On Capital Employed % 9.30 7.74 18.39 18.48 8.60
• The OP margin has increased from last year and thus it reveals better operational
profitability & managerial effeciency but the company can find ways to further
increase OP margin.
• The GP margin has increased in FY2015 than FY2014 thus it ensures adequate
coverage effeciency of operating expenses in 2015
•The NP margin has increased to that of last year thus the overall profitability of the
firm has increased in 2015.
• Return of capital employed has also improved & thus reveals that the investment
made by the shareholders & creditors has been effeciently being used in the
business in this FY2015 than FY2014.

18. Findings
 The Financial results of the company has improved from last year.
 Company has excess of working capital the which is good for the company.
 The liquidity position of the concern needs attention as liquidity ratios are not that
much satisfactory.
 There is improvement in turnover & effeciency ratios in 2015 , but there are
chances for further improvement.
 The turnover ratios reveals that the operational effeciency of the business
concern is good.
 The overall performance of the concern is better as compared to the last year.
 The overall financial position of the company is satisfactory.

19. 1. The profit of the company has improved from last year but for further more
improvement company has to take alternative actions such as :
• Increase in procurement of coal
• Control in expenses like administrative etc
2. The firm should maintain proper liquid funds like cash and bank balances in
order to improve its liquidity position.
3. It should enhance its employee’s effeciency , more training needed to its
employees in order to increase its production capacity.
4. The firm must reduce the stock by increasing sales.
5. The firm should check on the manufacturing process of the plant.
Suggestions & Recommendations

20. Conclusion
1. Company has Rs 43851.32 Lac working capital which is 31.54% of
current assets. Working capital should be 25% of current assets. So
Company has excess of working capital the which is good for the
company, which means company can easily be able to meet out its current
obligations.
2. J.K. Cement Ltd. has 25.83% current assets of total assets this is fine
percentage of current assets. But the company still needs to increase its
current assets.
3. Liquidity analysis shows that the company has solvent enough to meet
its all obligations. Current ratio is little bit less from the satisfactory level .
4. Company has managed their receivables properly as FY 2015 debtors
turnover ratio is 26.67 times which is 24.6% In the PY2014.

21. Limitations
 The accuracy of financial information largely depends on how
accurately financial statements are prepared. if their preparation is
wrong, the information obtained from their analysis will also be wrong,
which may mislead the user in making decisions.
 Some financials statements are prepared by using historical financial
data therefore, the information derived from such statements may not be
effective in corporate planning, if the previous situation does not prevail.
 Here financial statement analysis provides only quantitative
information about the company financial affairs. however it fails to
provide qualitative information such as management labour relation,
customer satisfaction & management’s skills and so on which are equally
important for decision making.

22. Bibliography
 J.K. Cement: India’s premier Cement Company. (n.d.). Retrieved May 5,
2015, from
http://www.jkcement.com/
 J.K. Cement Key Financial Ratios, J. K. Cement Financial Statement &
Accounts(n.d.). Retrieved June 1, 2015, from
http://www.moneycontrol.com/financials/jkcement/ratios/JKC03#JKC03
 Cement industry in India. (n.d.). Retrieved June 2, 2015, from
http://www.ibef.org/industry/cement-india.aspx
Kothari C.R ,Research Methodology (Methods and Techniques)
Published by New Age International (P) ltd., Publishers – Second Revised
Edition: 2004, (page no. 2,3)
Accounting CPE & Books - Accounting Tools. (n.d.). Retrieved June 9, 2015,
from
http://www.accountingtools.com/