Name: Samia Binte Nasir Tuptup

ID:19-39851-1

Course: Financial Management (D)

Program: BBA

ACI Limited

ACI was established as the subsidiary of Imperial Chemical Industries (ICI) in the then
East Pakistan in 1968. After independence the company has been incorporated in
Bangladesh on the 24th of January 1973 as ICI Bangladesh Manufacturers Limited and
also as Public Limited Company. This Company also obtained listing with Dhaka Stock
Exchange on 28 December, 1976 and its first trading of shares took place on 9 March,
1994. Later on, 5 May, 1992, ICI plc divested 70% of its shareholding to local
management. Subsequently the company was registered in the name of Advanced
Chemical Industries Limited. Listing with Chittagong Stock Exchange was made on 22
October 1995. Mr. M. Anis Ad Dowla, Chairman and Dr. Arif Dowla, managing directorAdvanced
Chemical Industries (ACI) Limited, being one of the largest conglomerates in Bangladesh with a
multinational heritage operates across the country through its four diversified strategic business
units. ‘ACI Pharmaceuticals’ is dedicated to improve the health of people of Bangladesh through
introduction of innovative and reliable Pharmaceuticals products.

‘ACI Consumer Brands’ is adding value to the daily life of consumers through its Toiletries,
Home care, Hygiene, Electrical, Electronics, Mobile, Salt, Flour, Foods, Rice, Tea, Edible Oil,
Paints and International businesses. ‘ACI Agribusinesses’ is the largest integrator in Bangladesh
in Agriculture, Livestock, Fisheries, Farm Mechanization, Infrastructure Development Services
and Motorcycles. ‘ACI Retail Chain’ is the largest retail chain in the country operating through
its 129 SHWAPNO outlets across the country by touching the lives of over 40,000 households
each day. The company contributed Taka 3,770 million to the National Exchequer during FY
2018-2019 in the form of corporate tax, custom duty and value added tax
FINANCIAL ANALYSIS

Financial analysis (also referred to as financial statement analysis or accounting

analysis or Analysis of finance) refers to an assessment of the viability, stability, and profitability
of a business, sub-business or project. It is performed by professionals who prepare reports
using ratios and other techniques, that make use of information taken from financial
statements and other reports. These reports are usually presented to top management as one
of their bases in making business decisions.

PROFITABILITY RATIOS

Profitability Ratios measure the overall earnings performance of an institution and its efficiency
in utilizing assets, liabilities and equity. Profitability ratios show a company's overall efficiency
and performance.

Current Ratio (CR)

Current Ratio is a relevant and useful measure of liquidity and short term (within the year) debt
paying of company. The ratio is mainly used to give an idea of the company’s ability to pay back
its short-term liabilities (debt and payables) with its short-term assets (cash, inventory,
receivables). Current ratio below 1 shows critical liquidity and ratio higher than 2.5 might
indicate existence of idle or underutilized resources in the company.

The formula is-

Current Ratio (CR) = Current Assets / Current Liabilities

Current Ratio
Year Current Assets Current Liabilities Ratio
2016 6,113 5,183 1.18
2017 6,793 5,741 1.18
 2018 6,149 5,030 1.22
2019 6,250 5,153 1.22
2020 5,731 5,904 0.97

Table: Current ratios of ACI Limited in different years.

Current Ratio
1.4

1.2

0.8 Total

0.6

0.4

0.2

0
2016 2017 2018 2019 2020

Figure: Graph shows the change of Current ratio.

Interpretation: The above graph shows that, in 2016 the current ratio of ACI limited was
1.18 it means ACI limited has 1.18 taka of current assets against 1 taka of current liabilities. It
indicates ACI limited had the ability to pay off its current liabilities with its current assets. In
2017 the current ratio was 1.18 which means ACI limited investment in current assets same in
2016. In 2018 the current ratio was 1.22 which was a little better than 2017 which means in 2018
ACI limited invested more in short term assets. Then in 2019 it was same in 2018
DEBT MANAGEMENT RATIOS
Debt management ratios measure the extent to which a firm is using debt financing, or financial
leverage, and the degree of safety afforded to creditors. Debt Management ratios help to evaluate
a company's long-term solvency measuring the extent to which the company is using long-term
debt.

Debt Ratio

The ratio of total debt to total assets, generally called the debt ratio, measures the percentage of
funds provided by the creditors. The lower the ratio, the greater the protection afforded creditors.
The formula for calculating debt ratio is –

Debt Ratio = Total Debt / Total Asset

Debt Ratio
Year Total Debt Total Asset Ratio
2016 10,970 23,770 46.15%
2017 11,180 23,755 47.06%
2018 11,708 22,543 51.93%
2019 10,970 21,515 50.98%
2020 7,910 27,265 29.01%

Table: The Debt ratios of ACI Limited. in different years

 Debt ratio
0.6

0.5

0.4
Total
0.3

0.2

0.1

0
2016 2017 2018 2019 2020

Figure: Graph shows the change of Debt ratio.

Interpretation: The above graph shows that from the year 2016 to 2017 the ratios were
46.15% and 47.06 % it’s higher than 2016. As we can see the average for total debt to asset ratio
is 51.93%, so we can say that the ACI Limited have lower debt to asset ratio which means this
company has lower probability of default in deposits if any investment defaults

Return on Equity (ROE)

Return on equity measures a bank’s profitability which calculates how much net profit that bank
may generates with the money that shareholders have invested as equity. The Formula is-

Return on Equity (ROE) = Net Profit after Taxation / Equity

Return on Equity
Year Net Profit Equity Ratio
201
(502) 1613 -31.12%
6
201 (464) 1371 -33.84%
 7
201
46 1398 3.29%
8
201
131 1451 9.02%
9
202
466 2278 20.45%
0

Table: The Return on Equity of ACI Limited. in different years

ROE
0.3

0.2

0.1
Total
0
2016 2017 2018 2019 2020
-0.1

-0.2

-0.3

-0.4

Figure: Graph shows the change of return on equity ratio

Interpretation: ROE is very popular ratio toward the shareholders of any Company. After
doing the analysis from ACI limited financial statements it is shows in the years 2016 to 2019,
the return from 100 taka invested by the shareholders was respectively -31.12%, -33.84%,
3.29%, and 9.02%. The higher the percentage is the better for the company as well as for
shareholders it also means that the company is efficient in generating income on new investment.
ACI limited had lower ROE in 2016 and 2017 after 2018 their ROE increased. In 2019 ACI
limited ROE also increased. The higher the percentage is the better for the company as well as
for shareholders it also means that the company is efficient in generating income on new
investment.

Return on Assets (ROA)

The Return on Assets of a company determines its ability to utilize the assets employed in that
company efficiently and effectively to earn a good return. The formula is-

Return on Assets (ROA) = Net Profit after Taxation / Assets

Return on Asset
Year Net Profit Total Asset Ratio
2016 (502) 23770 -2.11%
2017 (464) 23755 -1.95%
2018 46 22543 0.20%
2019 131 21515 0.61%
2020 466 27265 1.70%

ROA
0.02
0.02
0.01
0
Total
0
2016 2017 2018 2019 2020
-0.01
-0.01
-0.02
-0.02
-0.03

Figure: Graph shows the change of Return on Total Assets ratio.

Interpretation: Ratio Analysis for the Return on Assets of ACI Limited shows in years 2016,
2017, 2018 and 2019 the average return from 100 taka invested is assets is respectively -2.11%,
-1.95%, 0.20% and 0.61%. The higher the percentage is the better for the bank’s asset growth
Net Profit Margin Ratio

Net Profit Margin tells us the net profit that the business is earning per taka of sales. It measures
how much out of every taka of sales a company actually keeps in earnings. The formula is- .

Net Profit Margin Ratio = Net Profit / Sales

Net Profit Margin Ratio

Year Net Profit Sales Ratio
2016 (502) 58734 -0.80%
2017 (373) 59678 -0.62%
2018 46 59925 0.07%
2019 131 60535 0.21%
2020 466 62455 0.74%

Table: The Net Profit Margin of ACI LTD. in different years

Net Profit Margin

0.01
0.01
0.01
0
0 Total
0
2016 2017 2018 2019 2020
0
0
-0.01
-0.01
-0.01

Figure: Graph shows the change of Net Profit Margin ratio.

Interpretation: Profit margin is displayed as a percentage; 0.21% profit margin, for example,
means the company has a net income of Tk 0.0021 for Tk. 1 of sales. A higher profit margin
indicates a more profitable company that has better control over its costs compared to its
competitors. The main reason that the profit margin declined is high cost. For ACI Limited the
net profit margin is very low especially for 2016, 2017 and 2019 also.

MARKET VALUE RATIOS

Market value ratio is a set of ratio that relates the firm’s stock price to its earnings and book
value per share.

Earnings per Share (EPS)

The portion of a company's profit allocated to each outstanding share of common stock.
Earnings per Share are a widely used measure of profitability. The formula is-

Earnings per Share (EPS) = Net Profit / Common Equity Shares Outstanding

Earnings per Share

Yea
Net Profit Common Equity Share EPS BDT
r
2016 (502) 475 -1.06
2017 (373) 479 -0.78
2018 46 479 0.10
2019 131 479 0.27
2020 466 479 0.97

Table: The Earnings per Share (EPS) of ACI LTD. in different years.
 EPS
1.5

0.5
Total
0
2016 2017 2018 2019 2020
-0.5

-1

-1.5

Figure: Graph shows the change of Earnings per Share (EPS) ratio.

Interpretation: EPS of ACI Limited has been increasing rate over the years. This is good news
because this will help to attract the investors and thus the company can collect more money from stock
market. In 2016 EPS was -1.06 then 2017 EPS was -0.78 and the year 2018 EPS was 0.10. The last year
EPS was 0.27

Recommendation: Based on the above ratio analysis the overall condition of this company
is very poor investing will be very risky

Income statement
Fiscal year is March-February. All 2020 2019 2018 2017 2016
values USD Millions.
Sales/Revenue 62,455 60,535 59,925 59,678 58,734

Sales Growth 3.17% 1.02% 0.41% 1.61% -

Consolidated Net Income 466 131 46 (373) (502)

Net Income 466 131 46 (373) (502)

Net Income Growth 255.76% 183.15% 112.40% 25.67% -

Net Income Available to Common 466 131 46 (373) (502)

EPS (Basic) 0.97 0.27 0.10 (0.78) (1.06)

EPS (Basic) Growth 255.72% 183.33% 112.40% 26.27% -

Diluted Shares Outstanding 479 479 479 479 475

Balance sheet

Assets
Fiscal year is March-February. All values 2020 2019 2018 2017 2016
USD Millions.
Miscellaneous Current Assets 106 24 38 112 88

Total Current Assets 5,731 6,250 6,149 6,793 6,113

Net Property, Plant & Equipment 15,079 9,861 10,770 11,512 11,846

Tangible Other Assets 489 522 414 575 527

Total Assets 27,265 21,515 22,543 23,755 23,770

Assets - Total - Growth 26.73 - - - -

% 4.56% 5.10% 0.06%
 Liabilities & Shareholders' Equity
All values USD Millions. 2020 2019 2018 2017 2016
ST Debt & Current Portion LT 785 149 168 319 335
Debt
Total Current Liabilities 5,904 5,153 5,030 5,741 5,183

Current Ratio 0.97 1.21 1.22 1.18 1.18

Quick Ratio 0.23 0.37 0.34 0.41 0.33

Deferred Income - 45 59 - -

Total Liabilities 24,987 20,064 21,145 22,384 22,157

Total Liabilities / Total Assets 91.64 93.26% 93.80% 94.23 93.21%

% %
Common Equity (Total) 2,278 1,451 1,398 1,371 1,613

Common Stock Par/Carry 3 3 3 - -

Value
Treasury Stock (26) (26) - - -

Common Equity / Total Assets 8.36% 6.74% 6.20% 5.77% 6.79%

Total Shareholders' Equity 2,278 1,451 1,398 1,371 1,613

Total Shareholders' Equity / 8.36% 6.74% 6.20% 5.77% 6.79%

Total Assets
Total Equity 2,278 1,451 1,398 1,371 1,613

Liabilities & Shareholders' 27,265 21,515 22,543 23,755 23,770

Equity