Tahsin Raisa (22204016)

Part-2: Horizontal and Vertical analysis of Crown Cement PLC

Horizontal analysis

Horizontal analysis looks at financial data throughout various time periods to find trends and
changes in the performance of an organization across time frame lines.

The financial performance of Crown Cement PLC is compared between 2020 and 2021 using the
horizontal analysis. The analysis will display the percentage change in each financial item over
the determined period.

Formula:
Percentage Change = [(Current Year (2021) - BaseYear (2020)) / Base Year (2020)] × 100

According to the annual report of 2020 and 2021:

These tables represent horizontal analysis for Crown Cement PLC for the years 2020 and 2021.
The calculations indicate significant changes in several key areas, providing insights into the
company's financial health and performance.

Statement of financial position (Horizontal Analysis)

2021 2020 Increase/Decrea Percentage
Particulars (BDT) (BDT) se (BDT) Change (%)
Non-Current Assets
Property, plant, and equipment 7,505,811 6,915,719
(PPE), net ,507 ,747 590,091,760 8.53%
314,929,5 310,934,0
Right-of-use asset (RoU), net 76 58 3,995,518 1.29%
442,339,5 785,093,2
Capital work in progress 80 20 -342,753,640 -43.64%
36,825,33 31,742,58
Intangible asset 2 4 5,082,748 16.01%
8,299,905 8,043,489
Total Non-Current Assets ,995 ,608 256,416,387 3.19%
Investment in Associate and 281,256,3 331,045,0
Subsidiaries 72 29 -49,788,657 -15.04%
Current Assets
44,723,35 61,080,71
Investment in shares 3 3 -16,357,360 -26.78%
1,768,067 1,687,722
Inventories ,235 ,887 80,344,348 4.76%
3,927,759 2,802,789
Trade and other receivables ,329 ,682 1,124,969,647 40.13%
11,031,55 319,259,3
Intercompany receivables 5 75 -308,227,820 -96.55%
425,972,8 2,842,919
Advances, deposits, prepayments 16 ,010 -2,416,946,194 -85.03%
2,445,513 730,976,7
Advance income tax ,518 84 1,714,536,734 234.56%
1,508,859 169,999,4
Short-term investment - FDRs ,370 55 1,338,859,915 787.27%
371,748,9 169,999,4
Cash and cash equivalents 53 55 201,749,498 118.63%
10,503,67 8,614,747
Total Current Assets 6,128 ,906 1,888,928,222 21.92%
19,084,83 16,989,28
Total Assets 8,495 2,543 2,095,555,952 12.33%
Equity & Liabilities
Shareholders' Equity
1,485,000 1,485,000
Share capital ,000 ,000 - 0.00%
2,956,560 2,956,560
Share premium ,000 ,000 - 0.00%
1,854,089 2,583,725
Retained earnings ,572 ,705 -729,636,133 -28.24%
591,466,1 798,804,1
Revaluation reserve 42 34 -207,337,992 -25.96%
6,887,115 7,824,089
Total Equity ,714 ,839 -936,974,125 -11.98%
Non-Current Liabilities
 198,049,3 221,073,9
Employee benefits - Gratuity Scheme 50 19 -23,024,569 -10.41%
Long-term borrowing (net of current 821,295,2 140,575,9
portion) 23 75 680,719,248 484.32%
51,060,10 21,343,84
Lease obligation 8 5 29,716,263 139.22%
707,575,2 616,606,4
Deferred tax liability 64 07 90,968,857 14.75%
1,777,979 999,600,1
Total Non-Current Liabilities ,946 46 778,379,800 77.88%
Current Liabilities
8,793,832 5,922,894
Short-term loan ,714 ,599 2,870,938,115 48.46%
Long-term borrowing (current 598,179,8 754,285,9
portion) 55 79 -156,106,124 -20.69%
289,642,8 296,732,9
Lease obligation (current portion) 06 09 -7,090,103 -2.39%
527,995,9 684,148,6
Trade and other payables 90 33 -156,152,643 -22.82%
62,679,64
Intercompany payables 3- 62,679,643 N/A
108,699,3 374,816,8
Provision for tax liabilities 53 15 -266,117,462 -71.01%
12,836,98 50,219,31
Provision for WPPF 7 1 -37,382,324 -74.45%
25,875,48 12,850,75
Payable to IPO applicants 8 3 13,024,735 101.35%
10,419,74 69,643,55
Unclaimed dividend 2,836 9 50,219,311 38.13%
10,419,74 8,165,592
Total Current Liabilities 2,836 ,558 2,254,150,278 27.61%
12,197,72 9,165,192
Total Liabilities 2,782 ,704 3,032,530,078 33.09%
Total Equity & Liabilities 19,084,83 16,989,28 2,095,555,952 12.33%
 8,495 2,543
Net Asset Value per Share (NAV) 46.38 52.69 -6.31 -11.97%

Examining the balance sheet of the company and comparing its financial records for the years
2020 and 2021 reveals some interesting trends.

Non Current Assets: Property, Plant, and Equipment (PPE) non-current assets rose BDT 590.09
million (8.53%). The primary causes of this were new expenses spent on assets like machinery
and buildings. The Right-of- Use (RoU) assets rose BDT 3.99 million, or 1.29%, over last
month. This shows the rented assets' stability. Recording a 43.64% drop in the Capital Work in
Progress (COPI), the total came to BDT 342.75million. This could point to a slowing down in
the rate of newly proposed capital projects or completion of some current ones. The BDT 5.08
million (16.01%) rise in the value of intangible assets most likely results from the acquisition of
software, patents, and brands. The rise in total non-current assets of BDT 256.42 million (3.19%)
points to mostly moderate long-term investment growth. Moreover, investing in companies and
subsidiaries dropped BDT 49.79 million, or 15.04 percent referring to the sale of subsidiary
stakes or a fall in the shares of linked companies.

Current Assets: The value of the shares dropped to BDT 16.36 million (-26.78%) maybe from
the sale of equity stakes . Moreover, the BDT 80.34 million (4.76%) rise in inventory could point
to extra stock kept in case sales rise or volume decreases. A large BDT 1.12 billion (40.13%)
increase in trade and other receivables means either a drop in revenue collection or a rise in
credit sales. Intercompany Receivables dropped BDT 308.23 million (96.55%), maybe indicating
faster payment of intercompany transactions. Furthermore, better cash management brought
down deposits, advances, and prepayments by BDT 2.42 billion (-85.03%).
BDT 1.71 billion ( 234.56%) saw a rise in advance income tax. Increased expected tax
obligations or more tax prepayment could have been the causes of this rise. With a notable
increase of BDT 1.34 billion (787.27%), fixed savings and other short-term investments show
that people are better in handling their money. As its cash and cash equivalents climbed BDT
201.75 million (118.63%), the company grew more liquid. The fact that the overall current assets
grew by BDT 1.89 billion (21.92%) suggests improved control of working capital and liquidity
levels.
The company’s total assets climbed BDT 2.09 billion (12.33%), suggesting a constant rise in
asset base.

Equity: The Share Capital and Share Premium still show that no further shares have been issued
or capital structure changes have been done. Either more dividend payments or lower earnings
could have caused a BDT 729.64 million (-28.24%) drop in net retained earnings. The
Revaluation Reserves also dropped BDT 207.34 million (-25.96%), most likely in line with
changing asset values. As such, Total Equity dropped BDT 936.97 million (11.98%). Given this
shows a drop in shareholder equity, this should raise some worry.

Non-Current Liabilities: The employee benefits (gratuity) debt dropped by BDT 23.02 million
(-10.41%). This shows a drop in staff-related debt. Rising Long-Term Borrowings by BDT
680.72 million (484.32%) show that the country is depending more and more on debt funding.
Long-term leasing agreements grew in number, which raised asset obligations by BDT 29.72
million (139.22%), most likely owing to changes to the tax code and bookkeeping practices, the
amount of unpaid taxes climbed by BDT 90.97 million (14.75%). The main reason for the BDT
778.38 million (77.88%) rise in total Non-Current Liabilities was a notable rise in long-term
debt.

Current Liabilities: The rise in Short-Term Loans of BDT 2.87 billion (48.46%) shows that the
company depends mostly on short-term debt to run. The better current debt management helped
the Long-Term Borrowing (Current Portion) drop by BDT 156.11 million (20.69%). The Trade
and Other Payables category's BDT 156.15 million (-22.82%) dropped, signifying better control
of supplier payments. With a BDT of 62.68 million, Intercompany Payables—that is, newly
acquired linked company obligations—were first recorded in 2021. The allowance for tax
liabilities dropped BDT 266.12 million, or -71.01%. Early tax payments most certainly had a part
in this. The rise in short-term and intercompany loans accounted mostly for the BDT 2.25 billion
(27.61%) rise in total current liabilities.
Total Liabilities have risen by BDT 3.03 billion (33.9%), signifying a debt growth. This debt
originates with both long-term and short-term borrowing.

Lastly, from BDT 52.69 in 2020 to BDT 46.38 in 2021, the Net Asset Value (NAV) per share
dropped by 6.31 BDT (11.97%), therefore lowering the value of owners' shares.

Although the company's total assets grew, its equity dropped. This was mostly caused by
declining revaluation reserves and kept earnings. The rise in current and non-current obligations
suggests that individuals are leaning more and more on debt, which if improperly controlled
could be dangerous. Although more cash on hand is a benefit, should debt keep rising and net
asset value per share drop, the company might have financial problems down the road.
Maintaining stability could call for better study of income-generating and dividend-paying
strategies.

Statement of Profit or Loss and Other Comprehensive Income (Horizontal Analysis)

2021 2020 Increase/Decrea Percentage

Particulars (BDT) (BDT) se (BDT) Change (%)
13,876,21 16,315,31
Revenue 1,430 5,422 -2,439,103,992 -14.95%
-12,267,9 -14,059,5
Cost of sales 70,393 39,138 1,791,568,745 -12.74%
1,608,241 2,255,776
Gross profit ,037 ,284 -647,535,247 -28.71%
-22,012,1 72,361,55
Other operating income/(expense) 66 2 -94,373,718 -130.39%
-252,038, -229,377,
Administrative expenses 375 829 -22,660,546 9.88%
-534,608, -547,661,
Selling and distribution expenses 700 405 13,052,705 -2.38%
799,581,7 1,551,098
Operating profit 96 ,602 -751,516,806 -48.45%
36,578,10 12,395,69
Non-operating income and expenses 3 2 24,182,411 195.08%
Finance cost -992,407, -561,409, -430,998,427 76.77%
 650 223
110,913,5 52,520,46
Financial income 21 9 58,393,052 111.17%
Net profit/(loss) before WPPF & -844,916, 1,054,605
income tax 025 ,540 -1,899,521,565 -180.11%
Workers' profit participation fund -45,334,2 -50,219,3
(WPPF) 30 11 4,885,081 -9.73%
-890,250, 1,004,386
Net profit/(loss) before tax 255 ,229 -1,894,636,484 -188.64%
17,114,04 49,788,65
Income tax expense 5 7 -32,674,612 -65.63%
-28,220,1 71,164,12
Deferred tax income/(expense) 85 5 -99,384,310 -139.66%
-94,370,1 859,221,5
Net profit/(loss) after tax for the year 85 49 -953,591,734 -111.00%
-104,233, 859,221,5
Other comprehensive income 088 49 -963,454,637 -112.13%
Earnings per share (EPS) -0.89 5.79 -6.68 -115.37%
The Statement of Profit or Loss and Other Comprehensive Income for 2021 reveals many major
modifications over the horizontal analysis for 2020:

Between 2020 and 2021 revenue fell BDT 2.44 billion (-14.95%). This significant drop points to
declining sales brought on by operational, financial, or demand issues. Although the cost of sales
ffell by BDT 1.79 billion (-12.74%), not sufficient to offset income loss. Gross profit margin of
Crown Cement PLC dropped. Moreover, Total Income Gross profit fell BDT 647.54 million
(-28.71%). The company battled to turn a profit as expenses did not match declining revenues.
Other Operating Income/Expense dropped BDT 94.37 million (-130.39%). This negative trend
indicates either unanticipated expenses or lost money from other operations performed by the
business. Administrative expenses increased by BDT 22.66 million (9.89%), despite a drop in
income, suggesting operational costs that would point to possible overhead management
inefficiencies. Selling and Distribution Costs dropped by BDT 13.05 million (-2.38%). Operating
profit dropped by BDT 751.52 million (-48.45%) from year before. Reduced gross profit and
increased administrative expenses in this fall affects the profitability. Though it grew really well,
non-operational income fell short of operational profit by BDT 24.18 million (195.08%).
Furthermore, the BDT 431 million (76.77%) rise in the company's financial expenses points to
higher borrowing or interest rates. This limited profitability. Perhaps in response to better deposit
or investment returns, financial income doubled to BDT 58.39 million (111.17%) from the
previous year. Rising loan costs, however, surpassed this. Tax and Net Profit/(Loss) Before
WPPF saw a profit of BDT 1.05 billion in 2020 however 2021 was a deficit of BDT 844.92
million. This loss swing points to problems both financially and logistically. Worker Profit
Participation Fund WPPF is based on profitability, so the allocation dropped by BDT 4.89
million (-9.73%), so lowering earnings. The company's pre-tax loss in 2021 was BDT 890.25
million following a profit in 2020 of BDT 1.0 billion. This is a main sign of business collapse.
Lowering of taxable profits or losses could help to explain the BDT 32.67 million (-65.63%)
income tax expenditure drop. Deferred and income tax expenses Increased the loss by BDT
99.38 million (-139.66%) reversing deferred tax income from BDT 71.16 million in 2020 to
BDT 28.22 million in 2021. From 2020's BDT 859.22 million profit to 2021's BDT 94.37
million loss, a BDT 953.59 million (-111.00%) reduction results. This change from profit to loss
exposes the financial issues of the business. This section's other comprehensive income showed a
BDT 104.23 million loss in 2021, compared to a BDT 859.22 million profit in 2020, suggesting a
similar shareholder value decline. From BDT 5.79 in 2020 to BDT 0.89 in 2021, earnings per
share dropped significantly, losing BDT 6.68 (-115.37%), The significant decline in EPS reveals
how negatively shareholder profitability suffers.

Overall, The company suffered in 2021 with a sharp decline in operating profit, gross profit, and
income. High financing costs and declining sales generated the year-over-year net loss even with
growing non-operational and financial income. The sharply declining profitability and earnings
per share point to financial difficulties for the company. To rebuild, it has to control expenses,
increase output, and maybe reduce debt.

The financial performance of Crown Cement PLC is compared between 2022 and 2023 using the
horizontal analysis. The analysis will display the percentage change in each financial item over
the determined period.

According to the annual report of 2022 and 2023:

These tables represent horizontal analysis for Crown Cement PLC for the years 2022 and 2023.
The calculations indicate significant changes in several key areas, providing insights into the
company's financial health and performance.

Statement of Financial Position (Horizontal Analysis)

Particulars 2022 (BDT) 2023 (BDT) Change (BDT) % Change

Non Current Assets
Property, plant, and equipment 6,383,937,488 6,283,448,197 -100,489,291 -1.57%
Right-of-use asset 17,566,965 132,914,149 115,347,184 656.42%
Capital work in progress 1,658,172,074 5,026,852,994 3,368,680,920 203.10%
Intangible asset 26,659,836 21,577,088 -5,082,748 -19.07%
Investment in associates 384,281,664 424,996,020 40,714,356 10.60%
Total Non-current assets 8,470,618,027 11,889,788,447 3,419,170,420 40.38%
Current Assets
Investment in shares 65,993,317 61,608,327 -4,384,990 -6.64%
Inventories 1,630,861,109 2,188,559,289 557,698,180 34.19%
Trade and other receivables 2,411,091,817 2,667,830,940 256,739,123 10.65%
Advances, deposits, prepayments 248,266,519 1,244,006,334 995,739,815 401.26%
Advance income tax 3,134,685,182 3,298,624,691 163,939,509 5.23%
Short-term investment in FDR 1,703,117,104 606,259,847 -1,096,857,257 -64.41%
Cash and cash equivalents 222,653,961 893,903,481 671,249,520 301.53%
Total current assets 9,416,669,008 10,960,792,910 1,544,123,902 16.39%
TOTAL ASSETS 17,887,287,035 22,850,581,357 4,963,294,322 27.75%

Equity and Liabilities

Share capital 1,485,000,000 1,485,000,000 - 0.00%
Share premium 2,956,560,000 2,956,560,000 - 0.00%
Revaluation reserve 780,920,938 752,632,066 -28,288,872 -3.62%
Retained earnings 2,080,535,163 2,560,517,275 479,982,112 23.07%
Total equity 7,303,016,101 7,754,709,341 451,693,240 6.18%
Loans and borrowings 48,663,186 1,165,644,814 1,116,981,628 2295.29%
Employee benefits 255,124,771 287,332,790 32,208,019 12.62%
Lease liabilities - 100,651,027 100,651,027 N/A
Deferred tax liabilities 582,286,747 565,421,181 -16,865,566 -2.90%
Non-current liabilities 886,074,705 2,119,049,813 1,232,975,108 139.15%
Loans and borrowings 6,865,990,300 9,348,366,829 2,482,376,529 36.14%
Lease liabilities 21,343,845 34,944,228 13,600,383 63.73%
Trade and other payables 1,864,291,984 1,679,250,049 -185,041,935 -9.93%
Current tax liabilities 814,612,448 1,865,888,338 1,051,275,890 129.06%
Unclaimed dividend 131,957,652 48,372,760 -83,584,892 -63.35%
Total current liabilities 9,698,196,229 12,976,822,204 3,278,625,975 33.81%
Total liabilities 10,584,270,934 15,095,872,017 4,511,601,083 42.62%
TOTAL EQUITY AND LIABILITIES 17,887,287,035 22,850,581,357 4,963,294,322 27.75%
Crown Cement PLC’s finances changed notably between 2022 and 2023:

Total assets grew by 27.75%, mostly as long-term investments greatly expanded. The number of
right-of- use assets increased by 656%, while the number of capital projects under progress grew
by 200%. In contrast, cash struck by almost 300% while short-term investments like FDRs
dropped by 64%. A 23% rise in retained earnings generated a small rise in equity, at 6.18%. The
company maintained more of its income this year. The debt load grew shockingly by 42.62%. A
sudden increase in borrowing and lending set most of the developments in motion. Long-term
debt increased above 2,200%. This suggests that the company acquired a lot of debt largely for
long-term needs. People already pay significantly more taxes—more than twice as much. Along
with short-term loans and taxes payable, current expenses grew along with roughly 34%
increase. Trade payables, however, dropped a modest yet almost 10%.

Ultimately, the company increased its assets and retained more of its income during the year, but
it also acquired a lot more debt.

Statement of Profit or Loss and Other Comprehensive Income (Horizontal Analysis)

Particulars 2022-2023 2021-2022 Change % Change

 (BDT) (BDT) (BDT)
5,043,943,35
Revenue 24,183,479,554 19,139,536,196 8 26.36%
-20,418,664,02 -17,547,740,10 -2,870,923,9
Cost of sales 7 9 18 16.36%
2,173,019,44
Gross profit 3,764,815,527 1,591,796,087 0 136.53%
Income from mother vessel 93,690,295 42,118,538 51,571,757 122.43%
Administrative expenses -271,147,546 -260,154,554 -10,992,992 4.22%
Selling and distribution exp. -581,699,874 -506,395,377 -75,304,497 14.87%
2,138,293,70
Operating profit 3,005,658,403 867,364,694 9 246.58%
Non-operating income 6,818,923 17,246,496 -10,427,573 -60.45%
-591,430,27
Finance cost -1,372,945,712 -781,515,441 1 75.68%
Finance income 38,528,919 29,903,161 8,625,758 28.85%
-593,232,08
Net finance expenses -1,327,597,870 -734,365,784 6 80.80%
1,545,061,62
Profit before contribution to WPPF 1,678,060,533 132,998,910 3 1161.64%
Contribution to WPPF -79,907,644 -6,333,281 -73,574,363 1161.64%
1,471,487,25
Profit before income tax 1,598,152,888 126,665,629 9 1162.10%
Share of profit from associates 40,214,356 54,736,605 -14,522,249 -26.53%
1,456,965,01
Profit before income tax 1,638,367,245 181,402,234 1 802.92%
-617,253,17
Income tax expenses -1,027,921,043 -410,667,868 5 150.31%
Profit for the period 610,446,201 -229,265,634 839,711,835 -366.20%
Other comprehensive income -2,916,852 - -2,916,852 N/A
Total comprehensive income 607,529,349 -229,265,634 836,794,983 -364.98%
Between 2022 and 2023, Crown Cement PLC’s finances much improved:

Revenue growth shown by a 26.36% rise in revenue despite a 16.36% rise in the cost of sales.
Consequently, the net profit grew by 136.53%, more than doubled, proving that the company was
benefiting more from its major operations. Operations brought an amazing 246.58% rise in
income. Though marketing and distribution expenses of 14.87% and operational costs of 4.22%,
increased sales and a 122.43% gain in mother vessel operations revenue were the main factors of
this. A rise in finance charges of 75.68% caused net finance costs to rise dramatically, by
80.80%. Still, the great operational performance balances these higher costs. The company's
profit before taxes increased by over 800%, indicating a significant increase in revenue over the
previous year. Through a rise in income tax expenses of 150.31%—more than twice as
much—the company generated a good profit of BDT 610 million instead of losing BDT 229
million in the previous year. The company's whole income also clearly increased from a deficit
to a comfortable profit. This suggests the Crown Cement PLC is starting to bounce back and that
its finances are becoming better.

Ultimately, the business made a profit by sharply increasing sales and earnings even if financing
and taxes cost more.
 Vertical Analysis

On the other hand, vertical analysis shows every aspect of a financial statement as a percentage
of the whole. For instance, the statement of financial position reports all asset items as a
percentage of the total assets. Additionally, each item in the income statement is represented as a
percentage of the total income.

Both the Statement of Financial Position and the Statement of Profit or Loss for 2020 and 2021
will reflect every line item as a percentage of the total based on this analysis.

Formula:
Percentage of Base Figure = (Item Value / Base Figure) × 100

According to the annual report of 2020 2021:

These tables represent vertical analysis for Crown Cement PLC for the years 2020 and 2021. The
calculations indicate significant changes in several key areas, providing insights into the
company's financial health and performance.

Statement of Financial Position (Vertical Analysis)

Particulars 2021 (%) 2020 (%)
Assets
Property, plant, and equipment (PPE), net 39.32% 40.69%
Right-of-use asset (RoU), net 1.65% 1.83%
Capital work in progress 2.32% 4.62%
Intangible asset 0.19% 0.19%
Total Non-Current Assets 43.48% 47.33%
Investment in associate and subsidiary
companies 1.47% 1.95%
Current Assets
Investment in shares 0.23% 0.36%
Inventories 9.27% 9.93%
Trade and other receivables 20.57% 16.49%
Intercompany receivables 0.06% 1.88%
Advances, deposits, prepayments 2.23% 16.73%
Advance income tax 12.81% 4.30%
Short-term investment - FDRs 7.91% 4.30%
Cash and cash equivalents 1.95% 2.18%
Total Current Assets 55.05% 50.70%
Total Assets 100.00% 100.00%
Equity & Liabilities
Shareholders' Equity
Share capital 7.78% 8.74%
Share premium 15.49% 17.40%
Retained earnings 9.71% 15.21%
Revaluation reserve 3.10% 4.70%
Total Equity 36.08% 46.05%
Non-Current Liabilities
Employee benefits - Gratuity Scheme 1.04% 1.30%
Long-term borrowing (net of current portion) 4.30% 0.83%
Lease obligation 0.27% 0.13%
Deferred tax liability 3.71% 3.63%
Total Non-Current Liabilities 9.32% 5.89%
Current Liabilities
Short-term loan 46.08% 34.85%
Long-term borrowing (current portion) 3.13% 4.44%
Lease obligation (current portion) 1.52% 1.75%
Trade and other payables 2.77% 4.03%
Intercompany payables 0.33% 0.00%
Provision for tax liabilities 0.57% 2.21%
Provision for WPPF 0.07% 0.30%
Payable to IPO applicants 0.14% 0.08%
Unclaimed dividend 54.59% 48.06%
Total Current Liabilities 63.80% 48.06%
Total Liabilities 63.80% 53.95%
Total Equity & Liabilities 100.00% 100.00%
Net Asset Value per Share (NAV) 46.38 52.69

Examining the situations for 2020 and 2021 shows notable swings:

From 40.69% of total assets in 2020 to 39.32% in 2021, the percentage of property, plant, and
equipment (PPE) investment dropped. This shows a degree of consistency, although with a small
change away from tangible assets. The capital work under progress dropped noticeably,
suggesting that the company either stopped funding some projects or cut new budgets. Rising
trade receivables from 16.49% to 20.57% point to more client debt to the company. This could
be due to either the longer lead times for returns or the higher credit sales. More assets allocated
toward short-term investments and advance income tax suggests that the business is improving
cash flow and getting ready for next tax payments. Rising borrowing needs and lower levels of
savings indicate possible financial challenges for the company as seen by the drop in owner's
equity from 46.05% of total assets in 2020 to 36.08% in 2021. The significant rise in long-term
borrowing points to the company leaning more and more on debt as a long-term source of
finance. From 34.85% to 46.08% the significant rise in current liabilities—especially short-term
loans—indicates that the business might be depending more and more on short-term debt to run
its operations. Neglect of the company to pay these debts could point to a possible danger.
Early-year payments could help to explain part of the drop in provisions for tax obligations.
From BDT 52.69 in 2020 to BDT 46.38 in 2021 the Net Asset Value (NAV) per share dropped.
The primary cause of this decline was the increase in loans and the decrease in retained earnings,
resulting in a reduction in shareholder value. The company depends so much on debt, especially
short-term loans, so there is more possibility for financial risks if not properly regulated. Despite
the improvement in liquidity brought about by higher cash and short-term investments, the drop
in shareholder ownership and net asset value per share points to financial challenges for the
company. Future stability in the future years depends mostly on better debt management and
higher income.

Statement of Profit or Loss and Other Comprehensive Income (Vertical Analysis)

Particulars 2021 (%) 2020 (%)
Revenue 100.00% 100.00%
Cost of sales 88.42% 86.18%
Gross profit 11.58% 13.82%
Other operating income/(expense) -0.16% 0.44%
Administrative expenses -1.82% -1.41%
Selling and distribution expenses -3.85% -3.36%
Operating profit 5.76% 9.49%
Non-operating income and expenses 0.26% 0.08%
Finance cost -7.15% -3.44%
Financial income 0.80% 0.32%
Net profit/(loss) before WPPF & income tax -6.09% 6.46%
Workers' profit participation fund (WPPF) -0.33% -0.31%
Net profit/(loss) before tax -6.42% 6.16%
Income tax expense 0.12% 0.31%
Deferred tax income/(expense) -0.20% 0.44%
Net profit/(loss) after tax for the year -0.68% 5.36%
Other comprehensive income -0.75% 5.36%
Earnings per share (EPS) -0.01% 0.04%
Examining the company's 2020 and 2021 financial results highlights several important trends:

Cost of sales rose from 86.18% in 2020 to 88.42% in 2021. The company's main activities are
less profitable due to more manufacturing expenses. From 13.82% to 11.58% this lowered the
gross profit margin. This indicates the company is losing money. Operating profit of the
company fell from 9.49% in 2020 to 5.76% of revenue in 2021. This indicates that Crown
cement plc is losing profitability as rising administrative and selling expenses overwhelm it.
Administrative expenses climbed from 1.41% to 1.82% of income; selling and distribution costs
jumped from 3.36% to 3.85%. The company's bottom line suffers from more operations,
marketing, and managerial expenses. One significant shift was the explosive increase in finance
expenses from 3.44% to 7.15% of income. Higher debt or interest rates most likely explain this
increase that compromises the company's financial situation. Financial performance dropped for
the company. Its 2020 net profit before tax was 6.16%, but its 2021 loss was -6.42%. The
business recorded a net loss of -0.68% of revenue after taxes, down from 5.36% in 2020.

Overall, rising administrative, financial, and manufacturing expenses have hurt the company's
profitability. Rising finance costs brought on by growing debt dependency are affecting profits.
From earning money in 2020 to losing money in 2021, the company requires improved debt
management and expenditure control to fix its situation.

According to the annual report of 2022 and 2023:

These tables represent vertical analysis for Crown Cement PLC for the years 2022 and 2023. The
calculations indicate significant changes in several key areas, providing insights into the
company's financial health and performance.

Statement of Financial Position (Vertical Analysis)

Particulars 2023 (BDT) % of total assets and liabilities

Non Current Assets
Property, plant, and equipment 6,283,448,197 27.50%
Right-of-use asset 132,914,149 0.58%
Capital work in progress 5,026,852,994 22.00%
Intangible asset 21,577,088 0.09%
Investment in associates 424,996,020 1.86%
Total Non-current assets 11,889,788,447 52.02%
Current Assets
Investment in shares 61,608,327 0.27%
Inventories 2,188,559,289 9.58%
Trade and other receivables 2,667,830,940 11.68%
Advances, deposits, prepayments 1,244,006,334 5.44%
Advance income tax 3,298,624,691 14.43%
Short-term investment in FDR 606,259,847 2.65%
Cash and cash equivalents 893,903,481 3.91%
Total current assets 10,960,792,910 47.98%
TOTAL ASSETS 22,850,581,357 100.00%

Equity and Liabilities

Share capital 1,485,000,000 6.50%
Share premium 2,956,560,000 12.94%
Revaluation reserve 752,632,066 3.29%
Retained earnings 2,560,517,275 11.21%
Total equity 7,754,709,341 33.95%
Loans and borrowings 1,165,644,814 5.10%
Employee benefits 287,332,790 1.26%
Lease liabilities 100,651,027 0.44%
Deferred tax liabilities 565,421,181 2.47%
Non-current liabilities 2,119,049,813 9.27%
Loans and borrowings 9,348,366,829 40.90%
Lease liabilities 34,944,228 0.15%
Trade and other payables 1,679,250,049 7.35%
Current tax liabilities 1,865,888,338 8.16%
Unclaimed dividend 48,372,760 0.21%
Total current liabilities 12,976,822,204 56.78%
Total liabilities 15,095,872,017 66.05%
TOTAL EQUITY AND LIABILITIES 22,850,581,357 100.00%
Most of the company's assets are Long-Term Investments property, plant, and equipment (PPE)
and continuous projects. Of these assets, almost half (52%) are used over an extensive length of
time. It shows a great dedication to real estate for upcoming expansion. Short-term assets call for
advance income tax, trade receivables, and stocks. These three products account for around 48%
of the short-term assets of the organization. This suggests that the company has enough money
on hand to pay its continuous running costs. With a relatively strong cash base for the company,
the percentage of shareholder equity to total assets is about 34%. A substantial amount of this is
retained earnings, which show the company's long history of generating and keeping onto
revenues. Non-current liabilities, which show the company has little long-term debt, account for
somewhat more than 9% of total liabilities. Given current liabilities making roughly 57% of total
debt, the corporation mostly relies on short-term borrowing. This is largely the outcome of loans
and borrowings; so, short-term debt indicates that operational capital comes mostly from here.

Given its large debt load—that is, 66% of its assets—debt represents a lever for the corporation.
Well-managed debt could produce possible reward as well as higher risk.

Statement of Profit or Loss and Other Comprehensive Income (Vertical analysis)

2022-2023
Particulars (BDT) % of Total Revenue
Revenue 24,183,479,554 100.00%
Cost of sales -20,418,664,027 84.42%
Gross profit 3,764,815,527 15.58%
Income from mother vessel 93,690,295 0.39%
Administrative expenses -271,147,546 1.12%
Selling and distribution exp. -581,699,874 2.41%
Operating profit 3,005,658,403 12.43%
Non-operating income 6,818,923 0.03%
Finance cost -1,372,945,712 5.68%
Finance income 38,528,919 0.16%
Net finance expenses -1,327,597,870 5.49%
Profit before contribution to WPPF 1,678,060,533 6.94%
Contribution to WPPF -79,907,644 0.33%
Profit before income tax 1,598,152,888 6.61%
Share of profit from associates 40,214,356 0.17%
Profit before income tax 1,638,367,245 6.77%
Income tax expenses -1,027,921,043 4.25%
Profit for the period 610,446,201 2.52%
Other comprehensive income -2,916,852 -0.01%
Total comprehensive income 607,529,349 2.51%

The manufacturing sector accounted for 84.42% of the company's total sales, or 15.58% of its
total sales. These numbers reveal that although the company's operations produce a good profit,
its manufacturing costs are somewhat high.Crown Cement PLC is clearly controlling its
overhead expenses since administrative and marketing charges only make 3.53 percent of the
whole income. Operating profit is the portion of income retained by the corporation after
deducting production and operating costs. These results show how effectively operations were
run overall.Interest and other financial outlays account for 5.68 percent of the company's income.
This degree of debt suggests that obligations are influencing income. After subtracting all of its
taxes and expenses, the corporation maintains 2.52% of its revenues as profit. This number
shows that the business is lucrative, hence it is positive even if it is not especially high.Though
they don't greatly affect the end result, little changes are done to non-operational parts. Crown
Cement PLC usually makes a profit even if borrowing is somewhat expensive. Cutting these
costs could boost the company's earnings.