Analysis of Balance Sheet and Profit and Loss Account

4309 Words Jul 29th, 2011 18 Pages
Analysis of balance sheet and profit and loss account

The whole industry that we have developed considers three companies. Confidence, Lafarge surma and the other one is Heidelberg cement. Considering the four year balance sheet and income statement we have got the account for the whole industry. In the horizontal and vertical analysis of the balance sheet we can get the picture of the overall industry. The company Heidelberg cement is increasing its Current Asset account not in terms of receivables and inventories but in terms of prepayment of taxes and cash balances. Confidence cement was initially holding a negative balance in terms of raw materials which eventually left out with negative balance with the packaging and other related
…show more content…
Confidence cement has pick up from that place as the year passed by. Therefore the company is now capable of forcing new strategy against its competitors.
If we compare Heidelberg with any other company in the industry it can be clearly state that Heidelberg is much more stable than any other company in the industry. The company can get its debt holders pay the return they want and able to finance any kind of project or research and development work. They have the capacity to cover up the financial expense as the industry goes up.
Lafarge surma cement has an opposite trend compare to the industry. It is hard to forecast about their operation in this industry while Heidelberg and confidence is doing better than the industry. They would be going through very tough situation regarding their capital expenditure along with the coverage of the financial expenses.

While putting the industry in the picture we can conclude that the individual companies are doing better than the industry in the current position. Industry has a lower strength to support the overall company overview. The industry it self has a lower income to support the financial expense of the cement industry. Therefore we can conclude that Heidelberg and confidence is doing a better job than Lafarge surma cement.
Ratio analysis

Financial ratios quantify many aspects of a business and are an integral part of financial statement analysis. Financial ratios are
Open Document