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1 1.0 Introduction In our country agricultural marketing companies are doing very well in business.

So many competitors are in this sector. Lots of new companies entered this market. From all of them, we choose them in order to know the company%s position in the !gricultural marketing industry. 1.1 &b'ectives ( )o integrate the financial concepts by applying financial*statement analysis of agricultural marketing company. ( )o ac+uire practical knowledge about the difficulties and limitations of the techni+ues applied ran !gricultural marketing "o. ltd. for our report. #e have collected the financial statements and analy$ed

( )o perform a ratio analysis to 'udge the economic environment and profitability of the company and compare the ratios with one year to another year. 1., Scope )he study will provide the scopes of knowing the followinga. )he total concept of analy$ing financial statement.

b. /ecent performance level of the /!0 !gricultural marketing "o. Ltd. and !pe1 Foods Ltd. in food industries. 1.2 Limitations #e are very happy because we made our report within some limitations and have overcome it almost. )o prepare this report we faced some barriers. #hen we prepared this report all necessary data was not available. For this reason, we assumed some of the data to complete the report at some degree. &n the other hand, when we went to collect the financial statements but we were unable to find our needed statement*books from the company, we had to collect it from other source. Finally, one limitation was our shortage of knowledge which was reduced to make this report a better one. 1.3 Source of 4ata #e collected the annual report and take financial statements of ran !gricultural marketing "o. ltd and !pe1 Foods Ltd as a secondary data basis.

2 1.5 6ethodology !s a rule, we had to follow a particular method for collecting data to complete the report accurately. !t first we made common si$e Income Statement and 7alance Sheet on a e1cel sheet. )hen we analy$ed the Income Statement and the 7alance Sheet data, using the common si$ing and inde1ing method. Finally, we have computed ratios of four years and analy$ed based on the data availability in the financial statement.

8.0 7rief 9istory of the "ompany


PRAN started its operation in 1:;1 as a processors fruit and vegetable in 7angladesh. &ver the years, the company has not only grown in stature but also contributed significantly to the overall socio*economic development of the country. PRAN is currently one of the most admired food < beverages brand among the millions of people of 7angladesh and other == countries of the world where PRAN roducts are regularly being e1ported. !ll the PRAN products are produced as per international standards maintaining highest level of +uality at every stages of its production process. PRAN takes a comprehensive approach to all kinds of agro processed food products, considering all of the ways their lives can be enriched through ensuring hygienic and +uality food products. #ith 9!"" compliance to ensure best +uality products reach to the consumers, PRAN places great importance on hygienic manufacturing processes. )his encompasses everything from choosing +uality materials to the use of storage facilities and careful monitoring of products using electronic sorting. Skilled and e1perienced personnel select finished products which are then e1amined in a laboratory to verify their +uality and to check for residual substances both before and after the production process. Furthermore, company%s computer systems offer continuous monitoring of all manufacturing process to ensure the highest levels of +uality. 2.1 Mission Statement overty and hunger are curses our aim- to generate employment and earn dignity and self*respect for our compatriots through profitable enterprises. 2.2 Key Product: PRAN is currently producing more than 800 food products under 10 different categories i.e. >uices, 4rinks, 6ineral #ater, 7akery, "arbonated beverages, Snacks, "ulinary, "onfectionery, 7iscuits < 4airy. )he company has adopted IS& :001 as a guiding principle of its management system. )he company is complaint to 9!"" < certified with 9!L!L which ensures only the best +uality products are reaches to the consumers table across the ?lobe.

3.0 indin!s and inancia" Statement Ana"ysis /atio analysis of !gricultural 6arketing "o.Ltd @ /!0..

Ratio ana"ysis o# A!ricu"tura" Mar$etin! %o.&td 'PRAN(. '200)*2011(


+tems Pro#ita-i"ity Ratio ?ross rofit 6argin /eturn on !sset /eturn on B+uity &perating rofit 6argin 0et rofit 6argin 81.;0A ,.;;A 11.,,A 2.80A ,.25A 88.,0A ,.::A 11.2=A 2.23A ,.58A 88.20A 2.00A 11.10A 2.,1A ,.51A 88.=0A ,.;:A 10.2;A ,.:3A ,.53A 2011 2010 200, 200)

Asset .ti"i/ation Ratio Inventory )urnover )otal !sset )urnover Fi1ed !sset )urnover average inventory turnover 8.33 1.18 ,.15 12, 8.,1 1.1 8.;3 13; 8.18 1.11 ,.,5 1=8 1.;; 1.0= ,.:2 1:2

&i0uidity Ratio "urrent /atio Cuick /atio cash flow from oparation ratio 1e-t .ti"i/ation Ratio 4ebt /atio 53.==A 53.20A 5,.:1A 53.,,A 1.8; 1.8; 0.8; 1.,2 1.,2 0., 1.2 1.2 0.22 1.2, 1.2, 0.,,

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4ebt*B+uity /atio 1.:8 1.;= 1.== 1.5:

Mar$et 2a"ue Ratios

7ook value er Share Barning er Share 4ividend er Share 4ividend ayout /atio /etaintion ratio

301.55)D 35.;5)k 8:.12)D 31.83A 2;.=3A

2=3.10)D 32.2:)k 8;.3:)D 38.2=A 2=.3,A

22:.:3)D 2:.:5)k 8=.0,)D 32.10A 23.:0A

28;.,:)D 22.:2)k 83.53)D 3=.0=A 28.:,A

!ccording to our report, our main ob'ective is to compute ratios of A!ricu"tura" mar$etin! co."td 'Pran( and compare the ratios in different years. !lso we want to find out whether the company is stable or not. From the financial statements, we can find out our re+uirements. In below we give our finding and analysis in basis of company%s financial statements.

3.1 Pro#ita-i"ity Ratios:


rofitability is the net result of a number of policies and decisions. It shows the combined effects of li+uidity management, asset management and debt management of operating results.

?ross profit margin

3ross 4ro#it mar!in gives the profit per dollar of sales and is calculated by dividing the net profit by the sales. )he more percentage of this ratio indicating the company is more able to make profit. From the calculation of gross profit margin in last four years we can find that in 8011 the gross profit margin is 81.;0A and in 800; is 88.=0A. It shows a downward trend. 7ut 8011 the !gricultural marketing co.ltd @ ran. has earned more profit. )his ratio shows the efficiency of the company to manage its business operations to earn profits and its ability to pay for its fi1ed costs, like interest and other operating e1penses. So, in 8011 the !gricultural marketing co.ltd @ ran. has earned more profit.

Return on Asset:

Return on Asset is an indicator of how profitable a company is relative to it is total assets. )he higher the /&! shows better the company is earning money by doing less investment. )his is an important ratio for companies deciding whether or not to initiate a new pro'ect. )he basis of this ratio is that if a company is going to start a pro'ect they e1pect to earn a return on it, /&! is the return they would receive. Simply put, if /&! is above the rate that the company borrows at then the pro'ect should be accepted, if not then it is re'ected. /&! of !gricultural marketing co.ltd @pran. is increasing trends which are a good sign for the companyE in 800: the /&! of @pran. is 2.00A that indicating the profitability of the company. Return on 50uity:

Return on e0uity is calculated by dividing the net income available to common stockholders by the common e+uity. )he more return on e+uity means the company is able to pay off more dividend to it is share holders. )he higher the ratio percentage, the more efficient management is in utili$ing its e+uity base and the better return is to investors. )he /&B of investment. 64eratin! Pro#it Mar!in: ran is very high in 8010 @11.2=A. compare to previous years. So the shareholders got better return on their

64eratin! 4ro#it mar!in:. For ran operating profit margin has been increased from 800; to 8010 gradually and in 8010 the highest operating profit margin was 2.23A. )hat represents that ran generated attractive income from the operation of business. 7y comparing earnings before interest and ta1es @B7I). to sales, operating profit margins show how successful a companyFs management has been at generating income from the operation of the business. Net Pro#it Mar!in Net Pro#it Mar!in: "ompanies with high net profit margins have a bigger cushion to protect themselves during the hard times. "ompanies with low profit margins can get wiped out in a downturn. !nd companies with profit margins reflecting a competitive advantage is able to improve their market share during the hard times * leaving them even better positioned when things improve again.

In 800; the net profit margin of ran is ,.53A. It is good for the company. )hough it was decreased from 800: to 8011 by ,.51 and ,.25 compare to 800; .

3.2 Asset Mana!ement Ratio:


It measures how effectively the firm is managing it is assets. )his ratio may e1plain why one firm can turn over it is asset more rapidly than another. +n7entory turno7er: ! low turnover implies poor sales and therefore e1cess inventory. ! high ratio implies either strong sales or ineffective buying. 9igh inventory levels are unhealthy because they represent an investment with a rate of return of $ero. It also opens the company up to trouble should prices begin to fall.

Note: Ratios data has been taken from the common size balance sheet and Income statement shown at a endi! a"e#18$1%

+n7entory 8urno7er measures the number of times, on average the inventory is sold during the period. It is calculated by dividing the cost of goods sold by the inventory. In 8011 the inventory turnover ratio of ran was higher and year 800; is lower than other four years. 8ota" Asset 8urno7er: )otal asset turnover measures a firmFs efficiency at using its assets in generating sales or revenue * the higher the number the better. It also indicates pricing strategy of companies with low profit margins tend to have high asset turnover, while those with high profit margins have low asset turnover.

8ota" asset turno7er- From 800; to 800: significantly increase the total asset turnover. but decrease in 8010. In year 8011 pran has its highest total asset turnover.

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i9ed asset turno7er: )he fi1ed asset turnover ratio measures how efficiently the firm uses its plant and e+uipment to help generate sales. It is calculated by dividing the sales by the net fi1ed asset.

From the above graph we can see that in 800; !grecultureal markating co.ltd @pran. fi1ed asset turnover ratio was increasing 800; and in 800: to8010 it shows a decreasing trand but in 8011 it again increase . ran is using fi1ed assets so efficiently as the other members of its industry. A7era!e in7entory turno7er: It shows how many day need a company utili$e or how many days after company repurchase its inventory.

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In average inventory turnover year 800; to 8011signifecantly decrease.It means the performance of manufacturing of the company ran increase day by day .

3.3 &i0uidity Ratio


! ratio analysis that provides a +uick easy to use measure of li+uidity by relating the amount of cash and other current assets to the firm%s current obligations. %urrent Ratio: "urrent ratio is an inde1 of the firm%s financial stability. It is also an inde1 of technical solvency and an inde1 of the strength of working capital :uic$ Ratio: Cuick ratio helps to know the e1act current ratio of a particular company after deducting inventory from it is current asset. It means the companyFs ability to meet day*to*day operating e1penses and satisfy short term obligation.

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9ere current ratio and +uick ratio are same. 7ecause all the current asset are +uick asset. !gricultural marketing co.ltd @pran. current ratio increased in 800; by 1.2, and 7ut significantly decrease in 800: to 8011 .

3.; 1e-t mana!ement ratio:


1e-t to tota" asset ratio: )he debt ratio measures the percentage of the firm%s asset financed by creditors. It is calculated by dividing the total liabilities by the total assets. ! debt ratio of greater than 1 indicates that a company has more debt than assetsE meanwhile, a debt ratio of less than 1 indicates that a company has more assets than debt. Gsed in con'unction with other measures of financial health, the debt ratio can help investors determine a companyFs level of risk.

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)he debt ratio of ran is 53.==A in 8011, which means that is creditors have supplied slightly more than half of the firm%s total financing. 1e-t to 50uity ratio ! high debtHe+uity ratio generally means that a company has been aggressive in financing its growth with debt. )his can result in volatile earnings as a result of the additional interest e1pense.

In 8011, the debt to e+uity ratio of pran was 1.:8 times.

3.< Mar$et 2a"ue Ratios:


6arket value ratios relate the firm%s stock price to it is earnings and book value per share. )his ratio gives management an indication of what investors think of the company%s future prospects based on it is past performance. =oo$ 2a"ue Per S>are "ommon stockholdersF e+uity determined on a per*share basis. 7ook value per share is calculated by subtracting liabilities and the par value of any outstanding preferred stock from assets and dividing the remainder by the number of outstanding shares of stock. It is also called book value. 7ook value is most useful when evaluating firms with li+uid assets @banks, financial institutions. or hard assets. In general though, a company that is a viable and growing business will be worth more than its book value due to its ability to generate earnings and growth.

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ran%s 7ook Ialue increase gradually which is good for the company. 5arnin! Per S>are: )he portion of a companyFs profit allocated to each outstanding share of common stock. Barnings per share serve as an indicator of a companyFs profitability.

)he earning per share of pran 35.;5. )hat means company got earn 35.;5)k per share in year 8011. 1i7idend Per S>are 4ividend per share @4 S.- In last four years the company gained highest 4 S in 8011 )aka 8:.12. )hat means the growth was sustained. 4ividends are a form of profit distribution to the shareholder. 9aving a growing dividend per share can be a sign that the companyFs management believes that the growth can be sustained.

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1i7idend Payout Ratio: )he payout ratio provides an idea of how well earnings support the dividend payments. 6ore mature companies tend to have a higher payout ratio.

In 8011 the company gained lowest dividend payout ratio was 31.83A. )hat means in 8011 the earning of company was slightly less or company rise its retention ratio. )he highest payout ratio in year 800; was 3=.0=A.

;.0 %onc"usion:
!gricultural marketing company ltd. /!0 is a well*established and leading company of the country. )he four years financial data and ratio analysis show a growing trend of the company. )he net profit after ta1 indicates the company%s e1cellent performance in operation, turnover, management and competitive business statically. Finally, it is to be clear that our analysis about !gricultural marketing co. Ltd @ /!0. shows that the company is performing well comparing to the industry and as the investors% e1pectation is to earn more money over their investment, !6"L@ /!0.. is playing an important role to set the investors on it.

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<.0 Re#erences
1. http-HHwww.dsebd.orgH 8. ?erald I. #hiteE !shwinpaul ". SondhiE 4ov FriedE )he !nalysis and Gse of Financial StatementE Bdition )hirdE #iley ,. Scott 7esley, Bugene F. 7righam, Bssential of 6anagerial FinanceE Bdition, )homson 9igher Bducation, 8010*8011. 2. !gricultural marketing co. Ltd @pran., @800;*8011. !nnual /eports.

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5.0 A44endi9

%ommon Si/e -a"ance S>eet o# PRAN A!ricu"tura" Mar$etin! %o. &td.

+tems 50uity Share "apital S>are 4remium ?eneral /eserve and Surplus roposed dividend S>are @o"ders 50uity &ia-i"ities Long*term liabilities %urrent &ia-i"ities 4effered )a1 liability 8ota" "ia-i"ities 8ota" "ia-i"ities C 6Dners e0uity Assets "urrent !ssets StocksHInventory )rade 4ebtorsH !H" /eceivables Ad7ance de4osit %as> C cas> e0u: 8ota" %urrent Asset i9ed Assets 8ota" Asset

%ommon Si/e =a"ance S>eet 6# S0uare 8e9ti"e Mi""s &imited or t>e ?ear 5nded 200)*2011 Jear 8011 Jear 8010 Jear 800: Jear 800; ;0000000 20000000 8353,10,: 82;00000 ;0133103, ;0000000 20000000 8,50;,,:1 82000000 3)00)33,1 ;0000000 20000000 815=55:80 8,800000 3<,,AA,20 ;0000000 20000000 800,12,50 88200000 3;2B1;3A0

130=00000 <,1BA);)3 8;;5;,15 BB133AB,, 11B2AAB)3)

1:88,8=10 <1A;B1B;A 85;:3,,, B113,3,), 10,1;BB3)0

1,;:;=803 ;BA;233;B 8881,215 A3BA23,A) ,,B<,0)))

:82;;;25 ;A,3B;3;1 1;50;::0 <)0;B21BB ,231)A<3B

312==21;= 335:51,2 13110581: ,385350: B<A);21;, 213;835;; 11B2AAB)3)

2:1=3==;0 218;8,55 1,18,11=8 8;:=:=58 A,32<10)0 2882,8100 10,1;BB3)0

2;122:;,3 ,=8;2,;0 10;=3;2;8 20:5;;83 AA);A1<22 ,8:18:,55 ,,B<,0)))

2;2800123 22828:00 18;522=,; 151=,05: AB32A0)<2 82::835;3 ,231)A<3B

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%ommon Si/e +ncome Statement o# PRAN A!ricu"tura" %o. &td.


+ncome Statement #or t>e year ended 200)*2011 Items Jear 8011 Jear 8010 Jear 800: Jear 800;

Sales /evenue "ost of ?oods Sold ?ross rofit &perating < Finance B1penses &perating rofit &ther income #orker welfare fund B7I) Income )a1 B!)H 0et Income

1,15,233=5 @108:30,8=;. 2)A);22,) @88;=;88,5. <)0A00A2 201B0A @8:0,00,. <<3<))1, @:;5;528. ;<;,01BB

1803133,,; @:,35;130:. 2A,;B3)2, @81,:==:,0. <<;,<),, ,1A<00 @8;80580. <3<,1BB, @:::;033. ;3<,3B2;

110553:;25 @;3;;21521. 2;B)1)20< @1:=383:80. <02,22)< *** @8312512. ;BBBBAB1 @=;0=;5;. 3,,A,)03

:;323280; @=51,,8:85. 22;1212)2 @1;,18::;:. ;0,,12,3 *** @802:353. 3),;1B2) @8::1==0. 3<,;,,<)

1%

Ratio ana"ysis o# PRAN A!ricu"tura" Mar$etin! %o. &td. #or t>e year ended 200) E 2011
Ratio ana"ysis o# A!ricu"tura" mar$etin! co."td '4ran(. '200B*2011(
+tems Pro#ita-i"ity Ratio ?ross rofit 6argin /eturn on !sset /eturn on B+uity &perating rofit 6argin 0et rofit 6argin 81.;0A ,.;;A 11.,,A 2.80A ,.25A 88.,0A ,.::A 11.2=A 2.23A ,.58A 88.20A 2.00A 11.10A 2.,1A ,.51A 88.=0A ,.;:A 10.2;A ,.:3A ,.53A 2011 2010 200, 200)

Asset .ti"i/ation Ratio !ccount /eceivable )urnover 4S& Inventory )urnover )otal !sset )urnover Fi1ed !sset )urnover average inventory turnover &i0uidity Ratio "urrent /atio Cuick /atio cash flow from oparation ratio 1e-t .ti"i/ation Ratio 4ebt /atio 53.==A 53.20A 5,.:1A 53.,,A 1.8; 1.8; 0.8; 1.,2 1.,2 0., 1.2 1.2 0.22 1.2, 1.2, 0.,, 8.33 1.18 ,.15 12, 8.,1 1.1 8.;3 13; 8.18 1.11 ,.,5 1=8 1.;; 1.0= ,.:2 1:2

2&
4ebt*B+uity /atio 1.:8 1.;= 1.== 1.5:

Mar$et 2a"ue Ratios

7ook value er Share Barning er Share 4ividend er Share 4ividend ayout /atio /etaintion ratio

301.55)D 35.;5)k 8:.12)D 31.83A 2;.=3A

2=3.10)D 32.2:)k 8;.3:)D 38.2=A 2=.3,A

22:.:3)D 2:.:5)k 8=.0,)D 32.10A 23.:0A

28;.,:)D 22.:2)k 83.53)D 3=.0=A 28.:,A