Scribd Logo
Upload

Welcome to Scribd!

  • 31 views

    Loote CHEMICAS

    Uploaded by

    Fahad Kashmiri
    This document contains financial data for Loote CHEMICAS from 2006 to 2010. It shows trends in the company's market share, P/E ratio, earnings per share, sales, assets, growth rates, share price, debt ratios, cash flows, and various risk measures. An analysis notes that as the chemical industry is mature, the company should adopt a high dividend policy to provide shareholder returns. It also uses a moderate amount of debt to reduce its cost of capital. While the company has managed to reduce business risk over time as measured by coefficients of variation, its sales growth continues to be volatile, suggesting an area for improvement.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd

    Loote CHEMICAS

    Uploaded by

    Fahad Kashmiri
    31 views3 pages
    This document contains financial data for Loote CHEMICAS from 2006 to 2010. It shows trends in the company's market share, P/E ratio, earnings per share, sales, assets, growth rates, share price, debt ratios, cash flows, and various risk measures. An analysis notes that as the chemical industry is mature, the company should adopt a high dividend policy to provide shareholder returns. It also uses a moderate amount of debt to reduce its cost of capital. While the company has managed to reduce business risk over time as measured by coefficients of variation, its sales growth continues to be volatile, suggesting an area for improvement.

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document contains financial data for Loote CHEMICAS from 2006 to 2010. It shows trends in the company's market share, P/E ratio, earnings per share, sales, assets, growth rates, share price, debt ratios, cash flows, and various risk measures. An analysis notes that as the chemical industry is mature, the company should adopt a high dividend policy to provide shareholder returns. It also uses a moderate amount of debt to reduce its cost of capital. While the company has managed to reduce business risk over time as measured by coefficients of variation, its sales growth continues to be volatile, suggesting an area for improvement.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    31 views3 pages

    Loote CHEMICAS

    Uploaded by

    Fahad Kashmiri
    This document contains financial data for Loote CHEMICAS from 2006 to 2010. It shows trends in the company's market share, P/E ratio, earnings per share, sales, assets, growth rates, share price, debt ratios, cash flows, and various risk measures. An analysis notes that as the chemical industry is mature, the company should adopt a high dividend policy to provide shareholder returns. It also uses a moderate amount of debt to reduce its cost of capital. While the company has managed to reduce business risk over time as measured by coefficients of variation, its sales growth continues to be volatile, suggesting an area for improvement.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 3

    Loote CHEMICAS

    Years 2010 2009 2008 2007 2006


    Market Share (%) 0.46 0.49 0.42 0.49 0.39
    P/E 6.23 6.33 9.89 9.86 7.37
    Cost of equity 15.994
    Eps 5.62 5.72 3.78 4.66 3.58
    sales 588.5 582 429.8 413.6 307.6
    Growth in Sales (%) 1.11684 35.4118 3.91683 34.4603 0
    Assets 442 415.8 372 347.1 251.1
    Growth in Assets(%) 6.301106 11.77419 7.173725 38.23178 0
    Dividend Payout ratio 0.8 0.7 0.79 0.54 0
    Share price 35 36.25 37.38 46 26.38
    Beta 0.499
    Debt to equity Ratio 0.089633 0.094662 0.122289 0.148711 0.214552
    Debt to equity Difference -369.7 -344.3 -291.4 -257.6 -168.4
    Business Risk
    S.D of Sales 119.9943
    Mean Of sales 464.3
    C.V of Sales 0.258441
    EBIT 586.6471 599.4947 401.7806 489.3816 381.6668
    S.D of EBIT 101.0356
    Mean Of EBIT 365.6
    C.V Of EBIT 0.276356

    CFO 137.0 120.0 94.0 110.0 77.0 37.0

    CFI (66.0) (13.0) (22.0) (49.0) (3.0) (0.6)

    NET 71.0 107.0 72.0 61.0 74.0 36.4


    S.D Of CFS 22.80546
    Mean Of Cfs 70.2
    C.V Of CFS 0.3
    unlevered beta 0.455848
    Analysis
     Dividends Policy:
     As the Chemical Industry is in the early maturity so company
    should adopt high dividend policy.
     It is because it future prospective of growth of company is low at
    this stage
     so in order to meet the share holder return which is combination
    future growth plus dividend pay out company pay high dividend.

     Use Debt as their major source of finance

     As Industry is entry in the maturity stage, so company should


    introduce the debt.
     This is because the debt is cheaper sorce of finance and company
    introduce it in order to obtain optimal capital structure which
    reduces the wacc.
     From the company analysis a little portion of debt is introduce by
    the company.
     Company is reducing the portion of debt over the years.

     Reduce Business Risk


     As the Company is in the maturity stage , so its business risk should
    be low
     As the C.V of Sales, Ebit, Cfs show that its business risk is low

     Make efforts to improve sales


     As the company is in the maturity stage the company sales growth
    should be less volatility.
     The data show that there is high volatility in the sales of company

    You might also like