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Loote Chemicas Financial Analysis 2010-2015

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.

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Fahad Kashmiri
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57 views3 pages

Loote Chemicas Financial Analysis 2010-2015

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.

Uploaded by

Fahad Kashmiri
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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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

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