Calculati Calculation

2017 2018
ons s
Financial Ratios Formulae Solutio Solutio Comment
(2017) (2018)
n n
Nmillion Nmillion
LIQUIDITY RATIOS

𝐶𝑢𝑟𝑟𝑒𝑛 𝐴𝑠𝑠𝑒𝑡 12324 17283

Current Ratio 1.72 1.50 -14% Poor
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠 7166 11554
5808 4641
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡 − 𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑖𝑒𝑠
Quick Ratio 7166 11554 0.81 0.40 -45% Poor
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
FINACIAL LEVERAGE RATIO
𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡 10237 14259
Debt-equity Ratio 14412 333487 0.71 0.04 -84% Okay
𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦
4591 8012
𝐸𝐵𝐼𝑇
Times interest Earned Ratio 388 420 11.83 19.08 61% Good
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
8794 15604
𝐸𝐵𝐼𝑇𝐷𝐴
EBITDA ratio 1075 2451 4.91 4.10 -17% Fair
𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡
10237 14259
𝑇𝑜𝑡𝑎𝑙 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
Total Debt Ratio 24649 347746 42% 4% -90% Good
𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
PROFITABILTY RATIO
2918 5864
𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
Return on Asset 24649 347746 12% 2% -86% Poor
𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
2918 5864
𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒 14412 333487
Return on Equity Poor
𝑇𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦 20% 2% -91%

2918 5864
19588 31722
𝑁𝑒𝑡 𝑖𝑛𝑐𝑜𝑚𝑒
Profit Margin Good
𝑆𝑎𝑙𝑒𝑠
15% 18% 24%

ASSET MANAGEMENT
𝐶𝑜𝑠𝑡 𝑜𝑓 𝑔𝑜𝑜𝑑𝑠 𝑠𝑜𝑙𝑑 118440 17511
Inventory Turnover 388 420 1.82 1.39 -24% Fair
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦
365 𝑑𝑎𝑦𝑠 365 365
Day's Sales in Inventory 1.82 1.39 200.87 263.51 31% Poor
𝐼𝑛𝑣𝑒𝑛𝑡𝑜𝑟𝑦 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟
19588 31722
𝑆𝑎𝑙𝑒𝑠
Receivables turnover 2674 4044 7.33 7.84 7% Ok
𝐴𝑐𝑐𝑜𝑢𝑛𝑡 𝑟𝑒𝑐𝑒𝑖𝑣𝑎𝑏𝑙𝑒
365 365
365 𝑑𝑎𝑦𝑠
Day's Sales in receivables 7.33 7.84 49.83 46.53 -7% Good
𝑅𝑒𝑐𝑒𝑖𝑐𝑎𝑏𝑙𝑒𝑠 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟
19588 31722
𝑆𝑎𝑙𝑒𝑠
Total Asset Turnover 24649 347746 0.79 0.09 -89% Poor
𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡
MARKET VALUE RATIO
𝑃𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 9.50 19.95
Price-earnings ratio 2.57 0.44 3.70 45.34 1127% Good
𝑒𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒
𝑃𝑟𝑖𝑐𝑒 𝑝𝑒𝑟 𝑠ℎ𝑎𝑟𝑒 9.50 19.95
Price-Sales ratio 17.26 2.38 0.55 8.38 1423% Good
𝑆𝑎𝑙𝑒𝑠 𝑝𝑒𝑟 𝑆ℎ𝑎𝑟𝑒
 2017 2018 CHANGE
ASSETS N000 N000 N000
NON-CURRENT ASSETS
Property, plant and equipment 12324586 219573208 207,248,622
lntangible assets 580 110890671 110,890,091
12325166 330463879 318,138,713

CURRENT ASSETS
lnventories 6515835 12642312 6,126,477
Trade and other receivables 2674011 4044361 1,370,350
Cash and cash equivalents 3133664 595904 (2,537,760)
12323510 17282577 4,959,067
TOTAL ASSETS 24648676 347746456 323,097,780

EQUITY AND LIABILITIES

EQUlTY
Share capital 628339 6571751 5,943,412
Share premium 3513606 312352806 308,839,200
Retained earnings 10173691 14334165 4,160,474
Other reserves 96571 228966 132,395
14412207 333487688 319,075,481
LIABILITIES
[Link] LIABI LITI ES
Deferred tax liabilities 1356432 1288054 (68,378)
Long term borrowings 414500 118287 (296,213)
Deferred revenue 31988 5701 (26,287)
Employee benefit liability 1239949 1255236 15,287
Provisions 27646 37246 9,600
3070515 2704524 (365,991)
CURRENT LIABILITIES
Trade and other payables 6100584 8861084 2,760,500
lncome tax payables 667171 2257725 1,590,554
Short term borrowings 355989 409149 53,160
Deferred revenue 42210 26287 (15,923)
7165954 11554244 4,388,290
Total Liabilities 10236469 14258768 4,022,299
TOTAL EQUITY AND LIABILITIES 24648676 347746456 323,097,780
SOURCE OF CASH N’000

Increase in Share capital 5,943,412

Increase in Share premium 308,839,200
Increase in Retained earnings 4,160,474
Increase in Other reserves 132,395
Increase in Employee benefit liability 15,287
Increase in Provisions 9,600
Increase in Trade and other payables 2,760,500
Increase in lncome tax payables 1,590,554
Increase in Short term borrowings 53,160
323,504,582

USE OF CASH

Increase in Property, plant and equipment -207,248,622

Increase in lntangible assets -110,890,091

Increase in lnventories -6,126,477

Increase in Trade and other receivables -1,370,350
Decrease in Deferred tax liabilities -68,379

Decrease in Long term borrowings -296,213

Decrease in Deferred revenue -26,287

Decrease in Deferred revenue -15,923

-326,042,342

NET CASH BALANCE (2,537,760)

 2017 2018 CHANGE
ASSETS N’000 N’000 N’.000
NON-CURRENT ASSETS
Property, plant and equipment 50.00% 63.14% 13.14%
lntangible assets 0.00% 31.89% 31.89%
50.00% 95.03% 45.03%

CURRENT ASSETS
lnventories 26.43% 3.64% -22.80%
Trade and other receivables 10.85% 1.16% -9.69%
Cash and cash equivalents 12.71% 0.17% -12.54%
50.00% 4.97% -45.03%
TOTAL ASSETS 100.00% 100.00% 0.00%

EQUITY AND LIABILITIES

EQUlTY
Share capital 2.55% 1.89% -0.66%
Share premium 14.25% 89.82% 75.57%
Retained earnings 41.27% 4.12% -37.15%
Other reserves 0.39% 0.07% -0.33%
58.47% 95.90% 37.43%
LIABILITIES
[Link] LIABI LITI ES
Deferred tax liabilities 5.50% 0.37% -5.13%
Long term borrowings 1.68% 0.03% -1.65%
Deferred revenue 0.13% 0.00% -0.13%
Employee benefit liability 5.03% 0.36% -4.67%
Provisions 0.11% 0.01% -0.10%
12.46% 0.78% -11.68%
CURRENT LIABILITIES
Trade and other payables 24.75% 2.55% -22.20%
lncome tax payables 2.71% 0.65% -2.06%
Short term borrowings 1.44% 0.12% -1.33%
Deferred revenue 0.17% 0.01% -0.16%
29.07% 3.32% -25.75%
Total Liabilities 41.53% 4.10% -37.43%
TOTAL EQUITY AND LIABILITIES 100.00% 100.00% 0.00%
 SOKOTO CEMENT PLC
SUMMARY OF STANDARDIZED STATEMENT OF FINANCIAL POSITION
(ASSETS, EQUITY AND LIABILITIES)
ASSETS, EQUITY AND COMMON-SIZE COMMON- COMBINED
BASE COMMON-
LIABILITIES ASSETS, EQUITY YEAR ASSETS, SIZE AND
N IN THOUSANDS AND LIABILITIES EQUITY AND BASE YEAR
LIABILITIES ASSETS,
EQUITY AND
LIABILITIES
ASSETS 2017 2018 2017 2018
NON-
CURRENT
ASSETS
Property, plant
and equipment 12324586 219573208 50.00% 63.14% 17.82 1.26
lntangible
assets 580 110890671 0.00% 31.89% 191190.81 13551.83
12325166 330463879 50.00% 95.03% 26.81 1.90

CURRENT
ASSETS
lnventories 6515835 12642312 26.43% 3.64% 1.94 0.14
Trade and other
receivables 2674011 4044361 10.85% 1.16% 1.51 0.11
Cash and cash
equivalents 3133664 595904 12.71% 0.17% 0.19 0.01
12323510 17282577 50.00% 4.97% 1.40 0.10
TOTAL ASSETS 24648676 347746456 100.00% 100.00% 14.11 1.00

EQUITY AND
LIABILITIES
EQUlTY
Share capital 628339 6571751 2.55% 1.89% 10.46 0.74
Share premium 3513606 312352806 14.25% 89.82% 88.90 6.30
Retained
earnings 10173691 14334165 41.27% 4.12% 1.41 0.10
Other reserves 96571 228966 0.39% 0.07% 2.37 0.17
14412207 333487688 58.47% 95.90% 23.14 1.64
[Link]
LIABI LITI ES
Deferred tax
liabilities 1356432 1288054 5.50% 0.37% 0.95 0.07
Long term
borrowings 414500 118287 1.68% 0.03% 0.29 0.02
Deferred
revenue 31988 5701 0.13% 0.00% 0.18 0.01
Employee
benefit liability 1239949 1255236 5.03% 0.36% 1.01 0.07
Provisions 27646 37246 0.11% 0.01% 1.35 0.10
3070515 2704524 12.46% 0.78% 0.88 0.06
CURRENT
LIABILITIES
Trade and other
payables 6100584 8861084 24.75% 2.55% 1.45 0.10
lncome tax
payables 667171 2257725 2.71% 0.65% 3.38 0.24
Short term
borrowings 355989 409149 1.44% 0.12% 1.15 0.08
Deferred
revenue 42210 26287 0.17% 0.01% 0.62 0.04
7165954 11554244 29.07% 3.32% 1.61 0.11
Total
Liabilities 10236469 14258768 41.53% 4.10% 1.39 0.10
TOTAL
EQUITY AND
LIABILITIES 24648676 347746456 100.00% 100.00% 14.11 1.00
 BAYERO UNIVERSITY KANO
DANGOTE BUSINESS SCHOOL

MBA 8307

FINANCIAL AND SECURITIES ANALYSIS

FINANCIAL RATIO ANALYSIS OF SOKOTO CEMENT PLC

BY

NASIR SADIQ YAHAYA

DBS/18/MBA/00270

COURSE FACILITATOR
PROF. BALA ADO KOFAR MATA

JUNE 2019
TREND ANALYSIS OF SOKOTO CEMENT FOR THE PERIOD OF FIVE YEARS USING THE RETURN ON
EQUITY RATIO

RETURN ON EQUITY
30%

24%
25%
22%

20%
17%

15%

10% 8%

4%
5%

0%
2014 2015 2016 2017 2018
RETURN ON EQUITY 8% 4% 24% 22% 17%