Analysis of Financial Progress of Cement Industry in Pakistan Using Altman’s Z-score

Abstract

Cement is vital component in construction activities. Cement industry plays vital role in the country’s infrastructure development, Pakistan cement industry is existed before split of sub-continent, in 1972, Pakistan cement industry was nationalized. The secondary data was collected and used the financial statements from 2010 to 2015 provided by the state bank of Pakistan, Altman’s z-score modeling was contemplated as one of the best model for forecasting corporate financial health of the cement business. In this research findings demonstrate one angle clear and loud that inventory, debtors and creditors management policy of industry play substantial part in profitability. With the passage of time and arrival of china Pakistan economic corridor (CPEC) this sector is now flourishing, from the year 2014 to 2015, 48% cement companies lies in safe zone, 28% in grey zone and also 25% in distress zone. Investment in this sector may provide high return for the investors.

Keywords: Cement manufacturer, Financial performance, Ratios, Z-Score