“Ratio Analysis”

Course Title: Introduction to Financial Management

Course Code: FIN 254
Section: 16
Semester: Spring 2018

Prepared For
Mahjabeen Ahmed (Mjd)
Lecturer
Department of Account and Finance
School of Business and Economics

Submitted By
Group Members:
SL. Name ID
1 Shadman Sakib 1711784630
2 Abdul Ahad Pieash 1711294630
3 Dewan Sakib Zawad 1631352030

1|Page
LETTER OF TRANSMITTAL

23th April, 2018

Mahjabeen Ahmed
Faculty Member,
School of Business and Economics
North South University, Dhaka-1213
Subject: Letter of Transmittal
Dear Faculty,
We have completed the report as per a requirement for the FIN 254 course. We have worked
with utmost enthusiasm; since the experience has augmented and assisted us to integrate our
knowledge about elucidation and execution of the approaches that have been taught so far in the
course.

We hope that this paper will satisfy your expectations and quality of work that you are looking
for. Hopefully, we were able to integrate all the necessary learning from the coursework in
making this Report and fulfilling the requirements.

Sincerely,

Your Students

Shadman Sakib Abdul Ahad Pieash Dewan Sakib Zawad

2|Page
 Table of Content

SL no. Contents Page Numbers

1.0 Introduction 4

2.0 Combined Analysis of Ratio & 5-26

Interpretation

3.0 Recommendation 27

4.0 Conclusion 27

5.0 References 28

3|Page
1.0 Introduction

Our project is all about the basic analysis of stock listed company. We select two companies from
Dhaka Stock Exchange to complete this project. From the balance sheet and income statement of
those companies we try to analyzing the performance of those companies share. We have collected
their Annual Report from year 2013 to 2016. As the annual report of 2017 isn’t published yet that
is why we worked on 2013-2016.

We have Selected:

Apex Spinning & Knitting Mills Ltd.: The Apex Spinning and Knitting Mills Limited is a Public
Limited Company registered under the companies Act, 1913. The company was incorporated in
Bangladesh on 25-11-1990.The company owns and operates a 100% export and the Factory is
located at Chandora, P.S: Kaliakoir, Dist: Gazipur. The production capacity for the current year is
16.8 million pieces whereas the actual production was 14.45million pieces.

&

Delta Spinning Ltd.: “Delta spinners limited” was incorporated as a Private Limited Company
in the name of “Delta Millers Limited” on 23rd July, 1979.It was converted into a Public Limited
Company on 14th March, 1991.The name of the company was changed to “delta Spinners
Limited” on 7th March 2004.The nature and principal business activities of the company
throughout the year were concentrated on the manufacturing of the year and marketing the same
during the year under review. Nature of the business activities of its subsidiary company “Delta
Ceramics Ltd” would be to manufacture various kinds of ceramics wares. The production of
Cotton Yarn for the current year is 4.471 million kg and the capacity of utilization is 91%.

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2.0 Combined Analysis of Ratios:

1. Liquidity Ratios: Liquidity ratio measures a company’s ability to pay its debt obligation
and its margin of safety.

A) Current Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 1.172976608 1.126102321 1.144652642 1.131897651
& Knitting
Mills Ltd.
Delta Spinners 1.751367437 2.935009118 2.055515516 1.821384814
Ltd.

Interpretation: The standard ratio is 2:1 for this ratio which means the firms need to
have 2 dollars of asset for 1-dollar liability. Apex’s average ratio is below standard none
of the years has satisfied the standard but on the other hand Delta spinner’s ratio is
better than Apex because in 2014-2015 and 2015-2016 the ratios are satisfactory. So, it
can be said that Delta’s current ratio is better than apex.

3.5
3 2.935009118
2.5
Current Rario

2 2.055515516
1.751367437 1.821384814
1.5
1.172976608 1.126102321 1.144652642 1.131897651
1
0.5
0
2013 2014 2015 2016
Years

Apex Delta

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 B) Quick Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 0.899709752 0.925890172 0.964216631 0.91027675
& Knitting
Mills Ltd.
Delta Spinners 0.741007395 1.72899864 1.108427389 0.90964208
Ltd.

Interpretation: Quick ratio standard value is 1:1 apex ratios are less than the
standard value which is risky but Delta’s 2013 and 2016 ratio is little risky but not
more than apex.
Quick ratio is calculated by deducting the inventory from the current asset and
divided by current liabilities. It is also known as the acid test formula.

2 1.72899864
QUICK RATIO

1.5
0.741007395 1.108427389
1 0.899709752 0.9258902 0.90964208
0.964217
0.5 0.910277

0 Delta
2013 Apex
2014
2015
2016

2013 2014 2015 2016

Apex 0.899709752 0.9258902 0.964217 0.910277
Delta 0.741007395 1.72899864 1.108427389 0.90964208

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 2. Activity Ratio: Activity indicates about the efficiency of the firm by this ratio an
investor can have an idea about how much efficient a firm is to run their business.

A) Account Receivable Turnover Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017
Name
Apex Spinning 7.248309557 4.745752226 4.174051727 8.227932237
& Knitting
Mills Ltd.
Delta Spinners 3.62208725 2.766477818 2.92779411 2.553025767
Ltd.

Interpretation: Accounts receivable turnover is the number of times per year that a
business collects its average accounts receivable. The ratio is intended to evaluate the ability of a
company to efficiently issue credit to its customers and collect funds from them in a timely
manner. In the table we can see that Apex is more efficient in collecting A/R over the years than
Delta. So, it can be said that apex is in better position.

9
8 8.227932237
7 7.248309557
6
A/R Turnover

5 4.745752226
4 4.174051727
3.62208725
3 2.766477818 2.92779411
2.553025767
2
1
0
2013 2014 2015 2016
Apex 7.248309557 4.745752226 4.174051727 8.227932237
Delta 3.62208725 2.766477818 2.92779411 2.553025767
Years

Apex Delta

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 B) Average Collection Period:
Company’s 2013-2014 2014-2015 2015-2016 2016-2017
Name
Apex Spinning 50.35656895 76.91088423 87.44501119 44.36108484
& Knitting
Mills Ltd.
Delta Spinners 100.7706261 131.9367167 124.6672363 142.9676131
Ltd.

Interpretation: Average Collection period indicates how much day does a company
needs to collect its receivables. For finding the result the A/R ratio is divided by 365.
In the table Apex is more capable than Delta because Delta needs more time to collect
the money from the customer where Apex takes less time. So here Apex’s ratios are
better than Delta.

160
142.9676131
140 131.9367167
124.6672363
120
Avg Collection Period

100.7706261
100 87.44501119
76.91088423
80

60 50.35656895
44.36108484
40

20

0
2013 2014 2015 2016
Apex 50.35656895 76.91088423 87.44501119 44.36108484
Delta 100.7706261 131.9367167 124.6672363 142.9676131
Years

Apex Delta

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 C) Accounts Payable Turnover Ratio:
Company’s 2013-2014 2014-2015 2015-2016 2016-2017
Name
Apex Spinning 3.615666058 3.276587996 2.642300125 4.222055316
& Knitting
Mills Ltd.
Delta Spinners 644.0364924 223.7386867 92.9701195 92.91429814
Ltd.

Interpretation: The accounts payable turnover ratio is a short-

term liquidity measure used to quantify the rate at which a company pays off its
suppliers. Accounts payable turnover ratio is calculated by taking the total purchases
made from suppliers, or cost of sales, and dividing it by the average accounts
payable amount during the same period. In the table we can see that Delta can pay
off their suppliers quicker than Apex. So, it can be said that Delta is more efficient
than Apex.

Apex Delta

700 644.0364924

600
A/P TURNOVER RATION

500

400

300 223.7386867
200
92.9701195 92.91429814
100
3.615666058 3.276587996 2.642300125 4.222055316
0
2013 2014 2015 2016
Apex 3.615666058 3.276587996 2.642300125 4.222055316
Delta 644.0364924 223.7386867 92.9701195 92.91429814
YEARS

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 D) Average payment period:
Company’s 2013-2014 2014-2015 2015-2016 2016-2017
Name
Apex Spinning 100.9495883 111.3963673 138.1372224 86.45078585
& Knitting
Mills Ltd.
Delta Spinners 0.566738072 1.631367402 3.925912673 3.928351258
Ltd.

Interpretation: Average payment period indicates how many days a company needs to pay their
suppliers money. In the table we can see that Apex takes more time than Delta which means
Delta has more cash than Apex to pay off its debt. So, we can say that Delta is in better position.

160
138.1372224
140

120 111.3963673
100.9495883
Avg Payment Period

100 86.45078585

80

60

40

20
0.566738072 1.631367402 3.925912673 3.928351258
0
2013 2014 2015 2016
Apex 100.9495883 111.3963673 138.1372224 86.45078585
Delta 0.566738072 1.631367402 3.925912673 3.928351258
Years

Apex Delta

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 E) Inventory Turnover Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 11.68808726 14.40929963 13.25117861 15.16125489
& Knitting
Mills Ltd.
Delta Spinners 1.493031609 1.255546804 1.094471946 1.068857898
Ltd.

Interpretation: Inventory turnover is a ratio showing how many times a company's inventory is
sold and replaced over a period of time. The days in the period can then be divided by
the inventory turnover formula to calculate the days it takes to sell the inventory on hand. It is
calculated as sales divided by average inventory. The company with a higher inventory turnover
is better here in the table Apex’s Inventory turnover is higher than Delta Spinners over the years.
So, we can say that Apex’s is in Better position.

Apex Delta

16 15.16125489
14.40929963
14 13.25117861

11.68808726
12
INVENTORY TURNOVER

10

1.493031609 1.255546804
2 1.094471946 1.068857898

0
2013 2014 2015 2016
Apex 11.68808726 14.40929963 13.25117861 15.16125489
Delta 1.493031609 1.255546804 1.094471946 1.068857898
YEARS

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 F) Average age of Inventory:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 31.22837799 25.33086336 27.54471967 24.07452436
& Knitting
Mills Ltd.
Delta Spinners 244.4690371 290.7099908 333.4941579 341.4859924
Ltd.

Interpretation: The average age of inventory is the average number of days it takes for a firm
to selloff inventory. A high ratio indicates that a firm is not properly managing its inventory from
the table we can say that Apex is in better position because its ratios are very less than Delta’s
ratio where Delta is not in a good position because of having high age of inventory.

400

333.4941579 341.4859924
350
290.7099908
300
Avg Age of Inventory

244.4690371
250

200

150

100

50 31.22837799 25.33086336 27.54471967 24.07452436

0
2013 2014 2015 2016
Apex 31.22837799 25.33086336 27.54471967 24.07452436
Delta 244.4690371 290.7099908 333.4941579 341.4859924
Years

Apex Delta

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 G) Total Asset Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 2.210488386 2.175584603 1.80811598 2.418667179
& Knitting
Mills Ltd.
Delta Spinners 0.561956972 0.377811023 0.302192048 0.29730306
Ltd.

Interpretation: The asset turnover ratio is an efficiency ratio that measures a company's ability to
generate sales from its assets by comparing net sales with average total assets. In other words,
this ratio shows how efficiently a company can use its assets to generate sales. From the table we
can say that Apex is more efficient than Delta.

2.418667179
2.5
2.210488386 2.175584603

2
Total Asset Turnover

1.80811598

1.5

0.561956972
0.5 0.377811023
0.302192048 0.29730306

0
2013 2014 2015 2016
Apex 2.210488386 2.175584603 1.80811598 2.418667179
Delta 0.561956972 0.377811023 0.302192048 0.29730306
Years

Apex Delta

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 H) Fixed Asset Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 8.511845027 10.13223813 9.174759475 9.675877663
& Knitting
Mills Ltd.
Delta Spinners 1.239966049 1.00356663 0.621424953 0.566312965
Ltd.

Interpretation: The fixed-asset turnover ratio is, in general, used by analysts to measure operating
performance. It is a ratio of net sales to fixed assets. This ratio specifically measures how able a
company is to generate net sales from fixed-asset investments, namely property, plant and
equipment, net of depreciation. In a general sense, a higher fixed-asset turnover ratio indicates
that a company has more effectively utilized investment in fixed assets to generate revenue.
From the table we can say that Apex is better in this position than Delta over the years.

12 10.13223813
9.17475975 9.675877663
10 8.511845027
Fixed Asset Ratio

8
6
4
1.239966049 1.00356663
2 0.621424953 0.566312965
0
2013 2014 2015 2016
Apex 8.511845027 10.13223813 9.17475975 9.675877663
Delta 1.239966049 1.00356663 0.621424953 0.566312965
Years

Apex Delta

3. Leverage Ratio: A leverage ratio is any one of several financial measurements that
look at how much capital comes in the form of debt (loans) or assesses the ability of a
company to meet its financial obligations. The leverage ratio is important given that
companies rely on a mixture of equity and debt to finance their operations and knowing
the amount of debt held by a company is useful in evaluating whether it can pay its
debts off as they come due.

14 | P a g e
 A) Debt Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 0.632205145 0.69425354 0.699582926 0.578945619
& Knitting
Mills Ltd.
Delta Spinners 0.577856266 0.387530744 0.398686681 0.397635564
Ltd.

Interpretation: The debt ratio compares a company's total debt to its total assets. This provides
creditors and investors with a general idea as to the amount of leverage being used by a
company. The lower the percentage, the less leverage a company is using and the stronger its
equity position. From the table we can say that Delta’s ratios are better than Apex’s Ratios.

Apex Delta

0.8
0.69425354 0.699582926
0.7 0.632205145
0.577856266 0.578945619
0.6
0.5
DEBT RATIO

0.387530744 0.398686681 0.397635564

0.4
0.3
0.2
0.1
0
2013 2014 2015 2016
Apex 0.632205145 0.69425354 0.699582926 0.578945619
Delta 0.577856266 0.387530744 0.398686681 0.397635564
YEARS

B) Debt to Equity Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 1.733925227 2.283000931 2.344905386 1.767743911
& Knitting
Mills Ltd.
Delta Spinners 1.368861406 0.632735016 0.663026527 0.66012457
Ltd.

15 | P a g e
 Interpretation: The debt-equity ratio is another leverage ratio that compares a company's
total liabilities to its total shareholders' equity. This is a measurement of the percentage of
the company’s balance sheet that is financed by suppliers, lenders, creditors and obligors
versus what the shareholders have committed.
In this case both firms are in good position.

Apex Delta

2.5 2.283000931 2.344905386

2 1.733925227 1.767743911
DEBT TO EQUITY RATIO

1.368861406
1.5

1
0.632735016 0.663026527 0.66012457

0.5

0
2013 2014 2015 2016
Apex 1.733925227 2.283000931 2.344905386 1.767743911
Delta 1.368861406 0.632735016 0.663026527 0.66012457
YEARS

C) Times Interest Earned Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 0.595509103 0.562686855 0.704440097 0.543866667
& Knitting
Mills Ltd.
Delta Spinners 0.892809563 0.714362181 0.549435396 0.705362308
Ltd.

Interpretation: The times interest earned ratio measures the ability of an organization to
pay its debt obligations. The ratio is commonly used by lenders to ascertain whether a
prospective borrower can afford to take on any additional debt. A higher times interest
earned ratio is favorable because it means the company presents less of a risk to investors
and creditors in terms of solvency. Companies that have a times interest earned ratio of less
than 2.5 are considered a much higher risk for bankruptcy or default and therefore,
financial unstable. Here we can see Both of the company are in a risky position but Apex
is in more risky position than Delta.

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 Apex Delta

1 0.892809563

TIMES INTEREST EARNED RATIO

0.9
0.8 0.714362181 0.704440097 0.705362308
0.7 0.595509103 0.562686855 0.549435396 0.543866667
0.6
0.5
0.4
0.3
0.2
0.1
0
2013 2014 2015 2016
Apex 0.595509103 0.562686855 0.704440097 0.543866667
Delta 0.892809563 0.714362181 0.549435396 0.705362308
YEARS

4. Profitability Ratio: Profitability ratios are a class of financial metrics that are used to
assess a business's ability to generate earnings compared to its expenses and other relevant
cost incurred during a specific period of time. For most of these ratios, having a higher
value relative to a competitor's ratio or relative to the same ratio from a previous period
indicates that the company is doing well.

A) Gross Profit Margin Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 8.277672779 7.398240841 9.547939579 10.56350075
& Knitting
Mills Ltd.
Delta Spinners 16.19102206 14.85513794 14.27446661 14.51243299
Ltd.

Interpretation: Gross profit margin is calculated by subtracting cost of goods sold (COGS)
from total revenue and dividing that number by total revenue. The top number in the
equation, known as gross profit or gross margin, is the total revenue minus the direct costs
of producing that good or service. A high gross profit margin is one of the best indicators
that a company is in good financial health. It is the ratio of gross profit in a given period to
revenue, and it is used as a measure of profitability. A high gross profit margin
indicates your company is efficient in the manufacturing and distribution processes. So, we
can say that Delta is better than Apex over the years.

17 | P a g e
 Apex Delta

18 16.19102206
16 14.85513794 14.51243299
GROSS PROFIT MARGIN RATIO 14.27446661
14
12 10.56350075
9.547939579
10 8.277672779
7.398240841
8
6
4
2
0
2013 2014 2015 2016
Apex 8.277672779 7.398240841 9.547939579 10.56350075
Delta 16.19102206 14.85513794 14.27446661 14.51243299
YEARS

B) Net Profit Margin Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 0.736036442 0.628661164 0.911205026 0.897348049
& Knitting
Mills Ltd.
Delta Spinners 3.906560061 5.349132453 4.358222008 4.057024796
Ltd.

Interpretation: Net profit margin is the ratio of net profits to revenues for a company or
business segment. Typically expressed as a percentage, net profit margins show how much
of each dollar collected by a company as revenue translates into profit. If a company has a
net profit margin of 20 percent, it means the company makes 20 cents of profit for each
dollar of sales. A high net profit margin means a company is able to control its costs that
buy goods and services at prices significantly higher than it costs to produce or provide
them. From the table we can say that Delta’s net profit margin is better than Apex.

18 | P a g e
 Apex Delta

6 5.349132453

NET PROFIT MARGIN RATIO 5 4.358222008

3.906560061 4.057024796
4

2
0.736036442 0.911205026 0.897348049
0.628661164
1

0
2013 2014 2015 2016
Apex 0.736036442 0.628661164 0.911205026 0.897348049
Delta 3.906560061 5.349132453 4.358222008 4.057024796
YEARS

C) ROA Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 1.627000007 1.367705549 1.647564368 2.170386285
& Knitting
Mills Ltd.
Delta Spinners 2.195318662 2.020961204 1.317020036 1.206165887
Ltd.

Interpretation: Return on assets (ROA) is a financial ratio that shows the percentage of
profit a company earns in relation to its overall resources. It is commonly defined as net
income divided by total assets. Net income is derived from the income statement of the
company and is the profit after taxes. The higher the ROA ratio is better the management
is Delta was better in 2013-2014 and 2014-2015 than Apex but Apex improved in last 2
years so I would say Apex is better than Delta.

19 | P a g e
 Apex Delta

2.5 2.195318662 2.170386285

2.020961204
2 1.627000007 1.647564368
1.367705549 1.317020036
ROA RATIO
1.5 1.206165887

1
0.5
0
2013 2014 2015 2016
Apex 1.627000007 1.367705549 1.647564368 2.170386285
Delta 2.195318662 2.020961204 1.317020036 1.206165887
YEARS

D) ROE Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 4.462311606 4.49759758 5.522408307 6.627025084
& Knitting
Mills Ltd.
Delta Spinners 5.200405652 3.299694124 2.190239257 2.002385625
Ltd.

Interpretation: The return on equity ratio or ROE is a profitability ratio that measures the
ability of a firm to generate profits from its shareholders investments in the company. In
other words, the return on equity ratio shows how much profit each dollar of common
stockholders' equity generates. A business that has a high return on equity is more likely
to be one that is capable of generating cash internally. From the table we can say Apex is
better than Delta in this case.

Apex Delta
6.627025084
7 5.522408307
6 5.200405652
4.462311606 4.49759758
5
ROE RATIO

4 3.299694124
3 2.190239257 2.002385625
2
1
0
2013 2014 2015 2016
Apex 4.462311606 4.49759758 5.522408307 6.627025084
Delta 5.200405652 3.299694124 2.190239257 2.002385625
YEARS

20 | P a g e
 1. Market Ratio: Market value ratios are used to evaluate the current share price of a
publicly-held company's stock. These ratios are employed by current and potential
investors to determine whether a company's shares are over-priced or underpriced.

A) EPS Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 2.200833333 2.237619048 2.762380952 3.424404762
& Knitting
Mills Ltd.
Delta Spinners 0.429506729 0.47671244 0.309045213 0.288848188
Ltd.

Interpretation: Earnings per share ratio (EPS ratio) is computed by the following formula:
The numerator is the net income available for common stockholders' (net income less
preferred dividend) and the denominator is the average number of shares of common stock
outstanding during the year. A company with high earnings per share ratio is capable of
generating a significant dividend for investors, or it may plow the funds back into its
business for more growth. Apex is better over the years than Delta.

Apex Delta

4
3.424404762
3.5
3 2.762380952

2.5 2.200833333 2.237619048

EPS RATIO

2
1.5
1
0.429506729 0.47671244
0.309045213 0.288848188
0.5
0
2013 2014 2015 2016
Apex 2.200833333 2.237619048 2.762380952 3.424404762
Delta 0.429506729 0.47671244 0.309045213 0.288848188
YEARS

21 | P a g e
 B) P/E Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 25.44490723 43.20217067 25.01827271 27.0791587
& Knitting
Mills Ltd.
Delta Spinners 43.4219041 40.38073774 46.75691258 31.15823599
Ltd.

Interpretation: PE ratio is one of the most widely used tools for stock selection. It is
calculated by dividing the current market price of the stock by its earning per share
(EPS). It shows the sum of money you are ready to pay for each Dollar worth of the
earnings of the company. From the table we can say Delta’s Average is better than Apex.

Apex Delta

50 46.75691258
43.4219041 43.20217067
45 40.38073774
40
35 31.15823599
30 27.0791587
25.44490723
P/E RATIO

25.01827271
25
20
15
10
5
0
2013 2014 2015 2016
Apex 25.44490723 43.20217067 25.01827271 27.0791587
Delta 43.4219041 40.38073774 46.75691258 31.15823599
YEARS

C) Dividend Per Share:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 1.8 2 2 2.2
& Knitting
Mills Ltd.
Delta Spinners 0.171337812 0.303030303 0.211099112 0
Ltd.

22 | P a g e
 Interpretation: Dividend per share (DPS) is the sum of declared dividends issued by a
company for every ordinary share outstanding. The figure is calculated by dividing the
total dividends paid out by a business, including interim dividends, over a period of time
by the number of outstanding ordinary shares issued. Apex is providing more dividends
per share than Delta which will attract the investors to invest.

Apex Delta

2.5 2.2
2 2
2 1.8
DIVIDEND PER SHARE

1.5

0.5 0.303030303 0.211099112

0.171337812
0
0
2013 2014 2015 2016
Apex 1.8 2 2 2.2
Delta 0.171337812 0.303030303 0.211099112 0
YEARS

D) Dividend Yield Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 3.2142857 2.0688942 2.8939372 2.3724792
& Knitting
Mills Ltd.
Delta Spinners 0.9187014 1.5741834 1.4608935 0
Ltd.

Interpretation: The dividend yield or dividend-price ratio of a share is the dividend per
share, divided by the price per share. It is also a company's total annual dividend payments
divided by its market capitalization, assuming the number of shares is constant. It is often
expressed as a percentage. From the table we can say Apex is providing much more
dividends than Delta which is good for the investors. So Apex is better than Delta over the
years.

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 Apex Delta

3 2.8

DIVIDEND YIELD RATIO 2.5

1.5

0.5
0.032142857
0.009187014 0.020688942
0.015741834 0.028939372
0.014608935 0.023724792
0
2013 2014 2015 2016
Apex 0.032142857 0.020688942 0.028939372 0.023724792
Delta 0.009187014 0.015741834 0.014608935 2.8
YEARS

E) Dividend Payout:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 0.817872018 0.893807193 0.724013101 0.642447419
& Knitting
Mills Ltd.
Delta Spinners 0.398917644 0.635666867 0.683068701 0
Ltd.

Interpretation: The dividend payout ratio is the amount of dividends paid to stockholders
relative to the amount of total net income of a company. The amount that is not paid out
in dividends to stockholders is held by the company for growth. The amount that is kept
by the company is called retained earnings. Higher ratio is good in the sense of investors.
So, Apex is in better position than Delta.

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 Apex Delta
2.8
3

DIVIDEND PAYOUT 2.5

1.5
0.817872018 0.893807193
1 0.635666867 0.724013101
0.683068701 0.642447419
0.398917644
0.5

0
2013 2014 2015 2016
Apex 0.817872018 0.893807193 0.724013101 0.642447419
Delta 0.398917644 0.635666867 0.683068701 2.8
YEARS

F) Book Value Per Share of Common Stock:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 49.32047619 49.75142857 50.02130952 51.67333333
& Knitting
Mills Ltd.
Delta Spinners 8.259100496 14.44717061 14.11011203 14.42520282
Ltd.

Interpretation: The book value per share formula is used to calculate the per share
value of a company based on its equity available to common shareholders. The term
"book value" is a company's assets minus its liabilities and is sometimes referred to as
stockholder's equity, owner's equity, shareholder's equity, or simply equity.

Apex Delta

60 49.32047619 49.75142857 50.02130952 51.67333333

BOOK V PAR SHARE RATIO

50
40
30
20
10 0.066073223 0.066073223 0.066073223 0.066073223
0
2013 2014 2015 2016
Apex 49.32047619 49.75142857 50.02130952 51.67333333
Delta 0.066073223 0.066073223 0.066073223 0.066073223
YEARS

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 G) M/B Ratio:

Company’s 2013-2014 2014-2015 2015-2016 2016-2017

Name
Apex Spinning 1.125628141 1.943115578 1.337526611 1.757248437
& Knitting
Mills Ltd.
Delta Spinners 0.684152605 1.211453744 0.931056701 0.623700624
Ltd.

Interpretation: The book-to-market ratio is used to find the value of a company by comparing the
book value of a firm to its market value. Book value is calculated by looking at the firm's
historical cost, or accounting value. Ratio below 1 is preferable which means the investors will
invest money in the company. From the table we can say that Delta is in good position than
Apex.

Apex Delta

2.5

1.943115578
2 1.757248437

1.5 1.337526611
M/B RATIO

1.211453744
1.125628141
0.931056701
1
0.684152605 0.623700624

0.5

0
2013 2014 2015 2016
Apex 1.125628141 1.943115578 1.337526611 1.757248437
Delta 0.684152605 1.211453744 0.931056701 0.623700624
YEARS

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3.0 Recommendation:

According to the calculation of Apex Spinning & knitting Mills ltd and Delta Spinners Mills
ltd ratios we can see that in most of the cases Apex was in a leading position. In recent
times Apex was more productive and profitable than Delta and Apex is paying more
dividends and earning more and have a better profit margin than Delta so it can be said
easily that investors should invest in Apex because they are more efficient than Delta. I will
recommend to invest in Apex Spinning & Knitting Mills Ltd,

4.0 Conclusion:

Based on the ratio of Apex spinning and knitting mills limited and Delta Spinners Mills Ltd
investors should choose the Apex’s share. Because apex could be profitable company and
less risky compare to Delta Spinners Mills Ltd. To earn more money easily can be possible
by Apex. Apex is also very much dependent on debt than R.N so it deducts the amount of tax
and shareholders can be earning more from apex. Even apex business operations are also
good. Their sells are huge so the inventory turnover rate is high and it’s a good sign for
company.
Apex should improve in earning profit. In 2014 and 2015 their profit became low. So, in this
sector they should improve. Liquidity also should maintain. Apex should concern about their
debt. Though it’s a tax-deductible cost but it should be in a reasonable range.

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5.0 References:

1) http://lankabd.com/
2) http://lankabd.com/dse/stock-market/APEXSPINN/apex-spinning-&-knitting-mills-limited/stock-
price?stockId=164
3) http://lankabd.com/dse/stock-market/DELTASPINN/delta-spinners-limited/stock-
price?stockId=168
4) http://www.delta-spinners.com/
5) http://www.apexknitting.com/

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