The trend analysis of Lafarge’s P&.L statement shows that the increase in the company’s sales has been stable over the years with a hike in sales by about 17% in 2005. The cost of sales has also been rising with the increase in sales and they have finally mounted by about 17% during the last financial year. It reflects that the percentage change in sales is almost same as the percentage change in the cost of sales, however, a reduction in depreciation account by 4.1% has magnified the company’s gross profit by 22% in 2005. The SG&.A has expanded drastically during the year 2005 i.e., by 13% (1.2% in 2004). However, due to a substantial increase in gross profit, the company managed to display a rise in the operating income by about 32%. The company has had a substantial decline in the interest payable for two years, however, it seems to have rebuilt during 2005. The company’s pre-tax income had declined by almost 3% in 2004, which recovered surprisingly with an increase of 36% in 2005 as compared to the year 2003. With a 50% increase in net income, the company’s retained earnings have flourished by 54% while the dividend distributed has increased by 41%. Thus, an analysis of profit and loss suggests that the company has risen up from the decline that took place in its financial performance in 2004.
EBITDA refers to the Earnings Before Interest, Taxation, Depreciation, and Amortization. Therefore this analysis takes into account all the major costs and expenses other than the items mentioned above. The EBITDA margins presented in the above graph reflect a segregated view of the company’s earnings in terms of the group as a whole and its subsidiaries (on the basis of products). The group’s EBITDA margin represents a stable and subtle rise in the company’s earnings, which is a sum up of its subsidiaries. Cement and A&.C are also having a stable uplift in earnings, while Gypsum products section is showing remarkable growth in terms of EBITDA. .