An assignment On Corporate reporting Course code 7101Prepared for Tanzina Haque FCMA Associate professor Department of Accounting & Information Systems University of Dhaka Course Code: 7102 Course Name: corporate reporting Prepared by: Sharif Mohammad Zihad ID 17032, serial 16 Section A Department of Accounting &information Systems University of Dhaka Date of submission, September 17, 2015 Letter of TransmittalSeptember 17, 2015 To Tanzina Haque, FCMA Associate professor Department of Accounting & Information Systems University of Dhaka Subject: Submission of report. Dear Ma’am | am very much grateful to you for presenting herewith the report, as a part of fulfillment of the completion of corporate reporting course. It is really an enormous prospect for me to congregate information and grasp the subject matter in an appropriate way. | have tried my best to fulfill the requirements of this report. | am not anticipating that my analysis will assist you to get a complete knowledge of the selected companies rather a snapshot of the same. But you will find this report praiseworthy as | have put my best effort and labor on it. | am highly obliged to you for your valuable guidance for accomplishing this report. | shall be pleased to answer any sort of query if you think necessary. Yours obediently, Sharif Mohammad Zihad ID 17032 Serial 16 Section A Department of Accounting & information systems University of DhakaExecutive summary For the purpose of the accomplishing the report | have chosen the textile industry as the data necessary to accomplishment of the report was accessible to me. As per the instruction | have chosen the AL HAj textile, ASHRAF textile and the BEXIMCO textile and my analysis will shade focus on the year 2009, 2010,2011, 2012. Taking decision on the financial numbers published on the statutory financial report may not be sufficient but we know that the report is accompanied by some inherent limitations so for the assignment purpose our concentration will be on the published annual report. Selecting from a set of portfolio requires a well knowledge and informed decision making capability as a financial instructor or an analyst | will concentrate on only giving a scrupulous indicationContents OVENIOW sc osssessssnenetnnentesnentsnnsnnsansntsnuninnnistnnentsnnsetsaesetnnesssese 6 Objectives of the report... 6 Main objective. 6 Methodology. 7 DeSIgM. se secsnentssesetsneseennnntsensstsenentnnintisiseseninnsaneetseesetveeesee 7 Sample selection method...... 7 Time horizon... secesneneesntneenntneeenenese 7 The schedule of my activity regarding the report... eT Information source. - 8 Analytical tools to De USEG....scscsssesesnnenesnnsntsnesetsnnninnentesanisetnneeneess 8 Limitations of the report... 9 A brief synopsis of the company information.....ssscssssesnnentssnunetsseenatvntenneee 10 The analysis part..... 10 Ratio analysis 10 Common size analySis..sccsssesesnnentsnnnetsnnsntnnnetsiaennentvesees eevee Trend, scenario, cross sectional analySis......sscsesessenesesnnennssenneeneneess 2 The findings of the analySiS....s.scscsnestsnnetnsetsnnennnensneeesenetstnneeseee LS The reasons why | select a particular set of the portfolio and the justifications for the SELECIOM reseesnientenentsneneesntnnesetsennnintaeinnintsnnsstseeentseneetntsets 13 End MOt@..sescssnesstsnestisnentsnnnensinsetnnntinnstsnnietsnnnetsinesenees eevee Overview The report is accomplished from the part of a financial analyst based on the historical information of the AL HAJ textile, ASHRAF textile and the BEXIMCOtextile and my analysis will shade focus on the year 2009, 2010, 2011, and 2012. Providing analysis requires a lot of calculation and a number of considerations beyond the company's financial numbers. We generally use the ratios for the purpose of the evaluation of the financial condition and the evaluation of the financial performance, these things are important for giving some indication to the financial factors though the information of these are usually in historical in nature they are useful for most of the cases. Objectives of the report Main objective Main objective of this report is to fulfill the requirements of course requirement. Besides fulfilling the course requirements, this report intends to cover a snap shot of corporate performance of the selected companies. Other objectives ‘ To have an over view of the company; + To Apply Theoretical knowledge; + To know how the selected company operates; 4 To know what are important for the evaluation of the financial situation; ‘To know mode of application of the theoretical knowledge; + To know reporting and compliance status of the selected company; ‘ To give suggestion to the investor; “To make an analysis of the financial numbers; Methodology “Methodology” implies more than simply the methods you intend to use to collect data. It is often necessary to include a consideration of the concepts and theories which underlie the methods. There are four main aspects of the research methodology: design, sampling, data collection, the data analysis. If inappropriate methodology is used, or ifappropriate methodology is used poorly, the results of a study could be misleading Design Research design specifies what group(s) for which data will be collected, to which group(s) and when the intervention will occur, and when the data will collected from each group. The strength of a design, and the possible biases inherent in a design, depend on the type of questions being addressed in the research Sample selection method Sometimes a study involves the entire population of interest, but more often it involves only a small portion of the students, employees, families, schools, communities, or other “units of analysis.” Sampling serves three purposes: * It reduces the costs and time required to do the research; * It often improves the quality of information by allowing more intensive data collection than would otherwise be possible; and, * it reduces the burden on respondents For this report | mainly designed my sample based on my opportunity of access to the data to be used in the report in other word the sampling process can be told as “convenient Sampling’. Time horizon My report cavers 4 year data of the AL HAj textile, ASHRAF textile and the BEXIMCO textile and my analysis will shade focus on the year 2009, 2010,2011, 2012 The schedule of my activity regarding the report Data collection is the process of gathering and measuring information on variables of interest, in an established systematic fashion that enables one to answer stated research question hypotheses, and evaluate outcomes.Day Day Day Day Day Day 13 3-6 3-10 11-15 | 15-20 | 20-25 Collection OF Analysis Of Data Submission Of Final Report Information source Different types of questions require different sources of information. Information sources may be observations, people, speeches, documents, pictures, organizations, websites, etc. They may be primary sources, secondary sources, and tertiary sources and so on For the purpose of the report | mainly depended on the data that is available in the financial statements of the selected company. The financial statements were collected from the DSE and the WWW, and the websites of the company. Analytical tools to be used An analytical technique (analytical method) is a procedure or a method for the analysis of some problem, status or a fact. Analytical techniques are usually time-limited and task-limited. They are used once to solve a specific issue. Opposed to management methods that affect management of the organization in a longer term. In practice there are used a lot of quite simple analytical techniques that managers and analysts use during normal work. Often without naming it sornehow. For such techniques, it is often enough just a system of “paper- pencil,” or general office equipment. They are based primarily on the experience of the person who uses them. There are also a number of specialized analytical techniques, which are overwhelmingly based on some mathematical model or which require certain equipment or tools. | will useboth a mix of the qualitative and the quantitative tool but mu focus will be on the quantitative technique Limitations of the report Almost everything is subject to limitations so do my report. Time was too short for the accomplishment of the report, The quality of the report was not too much rich, The authority did not disclose some sensitive information for keeping the organization confidential necessary for the analysis. In their website the banks provide barely some information necessary for the execution of the project. Obviously the lack of the analyzing tool vvy v vA brief synopsis of the company information Annual Total Gross Name report Paid-Up Assets Net Sales Profit Net profit CFFOA Alhal 407889227 108606245 72690707. 11949252 textile 2009 699275100 00 7 51 41 233165.32 Alhal 388700270 32796061 17721835. 17563863. textile 2010 _7692026.00 00 2 28 06 4943989.41 Alhaj 336739257 151395747 31647412. 32406741. textile 2011 —_7692026.00 00 60 36 45 92484102.73 Alhal 343859593 335775380 13232493. 15336272. textile 2012 923043100 50 22 70 05 21251098.14 136915132 1000000.0 74540992. 93443876. - Ashraf 2009 10500000.00 00 ° 00 (00 62952272.00 86946332. 1140000.0 19733743. 560969274 Ashraf 2010 10500000.00 00 ° 00 00 -257292.61 64572252. 1400125.0 18673068. 3274706.0 Ashraf 2011 10500000.00 00 ° 00 0 -20806.53 69573251. 1200542.0 Ashraf 2012 10500000.00 00 0 16782.00 1245.00 147.32 5508282.0 3882244.0 408486972.0 Beximeo 2009 + 95500000.00 ° 0 533374.00 260634.00 ° 6605934.0 4445402.0 249387547.0 Beximeo 2010 +—-95500000.00 0 0 886759.00 564769.00 0 974059930.0 7225737.0 5247749.0 1070758.0 Beximeo 2011 0 ° ° 0 620178 1445558414 1168871920. 585057867.0 Beximeo 2012 00 6153122 5431438 980853.00 581038.00 ° The analysis part Ratio analysis Ratio analysis is @ useful management tool that will improve your understanding of financial results and trends over time, and provide key indicators of organizational performance, Managers will use ratio analysis to pinpoint strengths and weaknesses from which strategies and initiatives can be formed, Funders may use ratio analysis to measure your results against other organizations or make judgments concerning management effectiveness and mission impact. 2009 = -0,11002 -0.66931 0.266264 -1.70881 0.029295 2010 - 5.35548 5.40365 0.008437 -2.28339 0.045186 2011 0.096237 0.214053 0.209038 0.449593 4.213031 _textil alhal 2012 0.0446 0.045674 0.039409 0.97649 1.66149 textile The above calculated ratio gives all perspective that the company is to some extent unpredictable in nature as the trend in the ratio does not maintain any trend to the Both ROA and the profit margin and the GP margin as well as the ROE which indicate the nature of the company as an unpredictable one which cause the company a not to be a good one to invest. Ashri 2003, -0,68249 93.4439 -74.541 0.007304 -8.89942 Ashraf 2010 6.451903 492.0783 -17.3103 0.013112 _53.42565 Ashraf 2011 0.05071 -2.33887-13.3367 0.021683 -0.31188 Ashraf 2012 «1,79-05 0.001037 0.013979 0.017256 0.000119 The company is also performing better than the previous one which is a good sign the main problem is that the company calculated ratio is not giving a smooth indication of increasing or the decreasing of the ratio. That is the trend is not in the favor of the analyst which is causing a problem for the analyst. The situation is leaving the company more vulnerable in terms of the forecasting the future return. B 2009 047317 0.067135 0.137388 04801 0.002729 2010 0.085494 0.127046 0.199478 0.672941 0.005914 2011 0.085829 0.11818 0.204041 0.726258 0.000637 2012 0.09443 0.106977 0.180588 0.882713 0.000497 The company seems the better of the previous two that is the company is performing in a more predictable in nature year on year the company’s ratio in terms of the ROA, ROE, profit margin and gross profit margin is increasing in a smooth way that is the company is less vulnerable. As the company apparently seems a good choice for the investor.Common size analysis DEFINITION of ‘Common Size Financial Statement’ a company financial statement that displays all items as percentages of a common base figure. This type of financial statement allows for easy analysis between companies or between time periods of a company. ST Jone fom —— = Trend, scenario, cross sectional analysis Trend Analysis’ an aspect of technical analysis that tries to predict the future movement of a stock based on past data. Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future. 1194925 ‘ahs 2009 407% "1086062 textile 2 46 7269070 8 Alhaj 2010 3887002 0.95295 3279606 0.03019 0.24379 textile 70 35 1 72. 1772183 78 5 176305 2 1.46987 13 3 ome | amstrepor 02 ‘comer ne ‘Ag teste 2008, 202529535) )pase__| a s10023621|Ba80 | 0.930503 bose 0.26626007 bse 768056 ase “ansjtewie 2010 1045106135 devease_| 5385479413|derease | -sarsee7as|secease | 0006437365 decrease | -22655856|serease, ‘Aaj tetie zon (0096236698 increase | 0.214053182|increace | 0:209037657 increase 10.4495838 increase | 421302067) increase Ee eacla "pr pam fom our femme Jameel fo vat 08, 1682098676 asa 93483676 Base _-74 540002 se 0007303795 fase__|_s95n65| ease m0 16451902698 jnrease_| __492.0783105)increase_|17,31030088ncrense | 0.033113536 increne _| 3.425645 nreose_ vat ao 0080713627 decease | —2anseetse7|decene —_|-12336724B4lincease | 0.073683075 increase | 014066 secreose | m2 ‘.79sag605 incense | 0.001037032| decease | 0.012978586 crease | 0.017255796|decreaze | 000013857|ircreaze Name eaten roe Gomert proftmegn —Canmert Geman esetunover Crmert ce exmeo, 7008 oerae7siaee | 067i 34esA) ease | 9137300067 bese 0,704903243|tase__| 00027291580 bears 10 ‘oeseatist incase | _0.127048653|ingease | 0199877796lncrease | 0672340723 decrease | 000581381 lncrease | exes, 2 (0.0582003 incense | 0118379624) deveaxe _|_020308138|ircrease | 0.725257958 ncease | con0E3EE0|secease leesmco 20120) aonszsvayiacease | o10c7eea|incese | oxorscnerlrese | ogezri2sso lene | aoossralenresse2oll 3367392) 01a6632 «1513957461627 3164741 2) a2a0e7a 2 7 a 48 34 2 178578 1 1esso8 64 05 2012 2498595 1.02114 3357753 2.21786 1323249 0.41812 1593627 0.47324 34 5 20 53 4 23 2 3 ° 0 ° ° ‘Ashraf —-2009-=«(1 369151 11000000 1 : 1 : 1 32 7434099 9264307 2 6 ‘Ashraf —-2010-~=«8694633—«0.63503 1140000 ~—~«L Ia = 0.26473 5609692 5 2 al 1973374 68 74 6.00327 a 49 Ashraf 20116457225 0.74266 1400125 1.22817 = 0.94625, - - 2 73 ‘98 1867306 ‘07 3274706 0.00583, 8 76 ‘Ashraf —-2012~—*6987325.—-L.07744-12008420.8s745——«16782 22a - 1 al 34 0.00088 0.00038 7 02 ° ° ° ° Bexime 20095508282 13882248 1593374 1 260634 1 Bexime 2010 6605934 119927 4445402 114505 986759 166254 564769 2.16690 o 3 99 64 45 Bexime 2011.-«7225737—«+1.09382.5247749.«1.1806@ 1070752 «12074920178 «1.09810 ° 52 92 Gt Bt Bexime 20126152122 0.85155 5421438 1.03500 980853 091603 581028 0.93688 ° 63 34 61 a1 "Scenario Analysis’ The process of estimating the expected value of a portfolio after a given period of time, assuming specific changes in the values of the portfolio's securities or key factors that would affect security values, such as changes in the interest rate Cross-Sectional Ratio Analysis is method of analysis that compares a firm's ratios with some chosen industry benchmark. The benchmark usually chosen is the average ratio value for all firms in an industry for the time period under study. For the purpose of the report the above stated two types of analysis is not suitable and the data required is not sufficient. The findings of the analysis After the end of the analysis with the financial number of the selected three it is found that the Beximco textile is the best of the three which is providing the better profit margin and performing in a predictable way that is in one word the company is best one in the portfolio as per my calculation using the number published in the financial statements. Form the selected company the Beximco textile is in a distinct position in terms of investing in it.The reasons why | select a particular set of the portfolio and the justifications for the selection My suggestion to the investor is to invest in the Beximco Textile as the ROA, The ROE the net profit margin and the gross profit margin is better than the other two and in relation to the other financial indicators that is the asset and the capital is also greater than the other two which is casing the company a more stable one. As an analyst these things is making the company a better one to be investingEnd note A number of factors is to be taken in to account at the time of the financial analysis and the evaluation of the financial position and performance of any company. Evaluating the strength and the opportunity is the precondition of success of the company’ financial statement forecast. A number of things to be taken into account at the time of the evaluation and taking the investment decision. Contemplating on that issue will decide whether the investor taking decision is going to be better off or going to lose the invested money.References 1 DiPiazza, S. and Eccles, R. (2002). Building public trust. New York: John Wiley & Sons. Brockett, A. and Rezaee, Z. (2012). Corporate sustainability. Hoboken, N.J Wiley. Hawkins, D. (1977). Corporate financial reporting. Homewood, Ill.: R.D. Irwin. Villiers, C. (2006). Corporate reporting and company law. Cambridge, UK: Cambridge University Press. Brownlee, E., Ferris, K. and Haskins, M. (2001). Corporate financial reporting. Boston, Mass.: Irwin/McGraw-Hill.