Cement industry is indeed a highly important segment of industrial sector that plays a pivotal role in the socio-economic development. The Association of Builders and Developers (ABAD) has issued a statement warning of the dangers of recent cement price rises. The Balochistan Times newspaper has reported that the association called the rises disproportionate given the local availability of raw materials.

Keeping in view, the stance of ABAD and the attached financial statements of a cement company, answer the following.

Question No. 1 Evaluating a firms financial performance requires multidimensional analysis and cannot be confined to the Accounting information only. Explain with respect to your analysis of the attached financial statements.

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020 2020 (Rupees '000) 2019 (Rupees '000) 2 EQUITY Share capital and reserves Share capital Capital reserves Revenue reserves 5,962,528 8,217,695 40,472,977 54,653,200 5,962,528 7,504,621 44,138,769 57,605,918 LIABILITIES Non-current liabilities Long term financing Deferred tax liability - net Employee benefit obligations 11,542,250 9,907,879 27,915 21,478,044 10,617,491 24,890 10,642,381 Current liabilities Trade and other payables Short-term borrowings Current portion of long term financing Current portion of long term musharaka Unclaimed dividend 7,654,365 10,710,748 272,171 8,059,754 10,835,368 3,375,360 2,249,733 213,797 24,734,012 37,967 18,675,251 Total liabilities 40,153,295 35,376,393 Total equity and liabilities 94,806,495 92,982,311 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020 2020 (Rupees '000) 2019 (Rupees '000) ASSETS Non-current assets Property, plant and equipment Intangible assets and goodwill Investment property Long term investments Long term deposits 55,789,469 7,710,293 266,075 13,687,830 118,418 77,572,085 57,242,086 7,794,154 262,349 12,512,039 118,038 77,928,666 Current assets Stores, spare parts and loose tools Stock in trade Trade debts Advances Deposits and prepayments Other receivables Advance tax - net Cash and bank balances 7,010,155 2,291,473 1,727,790 175,924 24,457 841,700 4,815,220 347,691 17,234,410 5,511,210 2,689,443 2,101,856 407,771 26,862 641,090 3,212,501 462,912 15,053,645 Total assets 94,806,495 92,982,311 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020 2020 (Rupees '000) 2019 (Rupees '000) 2 EQUITY Share capital and reserves Share capital Capital reserves Revenue reserves 5,962,528 8,217,695 40,472,977 54,653,200 5,962,528 7,504,621 44,138,769 57,605,918 LIABILITIES Non-current liabilities Long term financing Deferred tax liability - net Employee benefit obligations 11,542,250 9,907,879 27,915 21,478,044 10,617,491 24,890 10,642,381 Current liabilities Trade and other payables Short-term borrowings Current portion of long term financing Current portion of long term musharaka Unclaimed dividend 7,654,365 10,710,748 272,171 8,059,754 10,835,368 3,375,360 2,249,733 213,797 24,734,012 37,967 18,675,251 Total liabilities 40,153,295 35,376,393 Total equity and liabilities 94,806,495 92,982,311 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020 2020 (Rupees '000) 2019 (Rupees '000) ASSETS Non-current assets Property, plant and equipment Intangible assets and goodwill Investment property Long term investments Long term deposits 55,789,469 7,710,293 266,075 13,687,830 118,418 77,572,085 57,242,086 7,794,154 262,349 12,512,039 118,038 77,928,666 Current assets Stores, spare parts and loose tools Stock in trade Trade debts Advances Deposits and prepayments Other receivables Advance tax - net Cash and bank balances 7,010,155 2,291,473 1,727,790 175,924 24,457 841,700 4,815,220 347,691 17,234,410 5,511,210 2,689,443 2,101,856 407,771 26,862 641,090 3,212,501 462,912 15,053,645 Total assets 94,806,495 92,982,311