Masters of Business Administration (M.B.

A)
Fall 2020
Financial Management (FIN514.3)

LECTURER: ABDULLAH AL MASUD

Financial Ratio Analysis of
Group Member:
1. Yesmin Akter Anny
ID: 2020210004122

2. Sumon Kumar Saha

ID: 2020210004066

3. Md. Mehedi Hasan

ID:2020210002003

4. Sumit Kumar Ghose

ID :2020210004030
 Financial Ratio Analysis
Including 2018-19 Industry Average and Evaluation
Sector: Textile

Base Company:
 Square Textile Ltd.

Peer Company:
 Apex Spinning & Knitting Mills Ltd.
 Aman Cotton Fibrous Limited
 Alltex Industries Ltd.
 SQUARETEXT (Square Textile Ltd.) Ratios Analysis (2016-17 to 2018-19), Including 2018-19 Industry Average and
Evaluation

Evaluation
Industry Cross
Year Time-
Average Sectiona
series
Ratio Formula l
Overall
2016-
17 to
2016-17 2017-18 2018-19 2018-19 2018-19
2018-
19

Liquidity

Current Assets
Current Ratio: 2.04 1.13 1.16 1.72 Ok Good Ok
Current Liabilities

Quick (acid-test) Ratio: Current Assets-Inventory 1.29 0.59 0.60 0.82 Ok Good Ok
Current Liabilities

Activity

Inventory Turnover: Cost of goods sold 3.55 2.69 2.56 8.07 Poor Poor Poor
Inventory
Average Collection Period: (in
Accounts receivable 90.84 145.46 133.54 225.82 Ok Ok Ok
days) Average sales per day
Average Payment Period: (in
Accounts payable 6.13 8.42 3.29 61.42 Poor Good Poor
days) Average purchases per day

Total Assets Turnover: Sales 0.76 0.68 0.69 0.95 Good Good Good
Total Assets
Debt

Debt Ratio: Total Liabilities 27.9% 42.9% 44.2% 25.0% OK OK Ok

Total Assets

Times Interests Earned Ratio: Earnings before interest and taxes 11.8 5.2 2.7 2.1 Poor OK OK
Interest

Profitability

Gross Profit Margin: Gross profits 10.2% 10.5% 10.7% 9.5% OK Good Good
Sales

Operating Profit Margin: Operating Profit 7.1% 7.0% 7.8% 11.2% Good Ok OK
Sales

Net Profit Margin: Earnings available for common stockholders 5.2% 5.9% 4.4% 6.0% OK OK OK
Sales

Earnings Per Share (EPS): Earnings available for common stockholders 3.30 Good OK OK
2.06৳ 1.90৳ 2.00৳
Number of shares of common stock outstanding

Return on Total Assets (ROA): Earnings available for common stockholders 4.0% 4.0% 3.0% 1.2% Poor Good Good
Total Assets

Return on Common Equity (ROE): Earnings available for common stockholders 5.4% 7.0% 5.5% 19.9% Poor Poor Poor
Common stock equity
 Particulars 2016-17 2017-18 2018-19

Current Assets: 5340902540 4430793000 6396837000

Current Liabilities: 2612186553 3910867000 5494425000

Cost of goods sold: 6969942417 5695595000 7944893000

Inventory: 1963904495 2117499335 3108769448

Accounts receivable: 1931002020 2537386382 3254869758

Average sales per day: 21257203 17444178 24373271

Accounts payable : 117079071 131402995 71576651

Average purchases per day: 19095733 15604370 21766830

Sales : 7758879164 6367125000 8896244091

Total Assets: 10182157362 9425480000 12954548000

Total Liabilities: 2836971704 4039447000 5730126000

Earnings before interest and taxes (EBIT): 551426058 444187000 697849423

Interest: 46801822 86090000 254158000

Gross profits: 788936747 671530000 951351000

Operating Profit: 551426058 444187000 697849423

Earnings available for common stockholders: 406621325 375718096 394504000

Number of shares of common stock
197252000 197252000 197252000
outstanding:
Common stock equity: 7498757447 5386034000 7224422000
 Calculation of Industry Average and Ratio Analysis of Peer Companies (2018-19)

Aman Cotton Apex Spinning & knitting

Industry Average Alltex Industries LTD
Ratio Firbrous LTD Mill LTD

2018-19 2018-19 2018-19 2018-19

Liquidity

Current Ratio: 1.72 3.16 1.11 0.88

0.82 1.14 0.91 0.41

Quick (acid-test) Ratio:

Activity

Inventory Turnover: 8.07 0.73 17.04 6.43

225.82 365.00 61.46 251

Average Collection Period: (in days)

61.42 6.90 83.06 94.31

Average Payment Period: (in days)

0.95 0.23 2.49 0.14

Total Assets Turnover:
Debt

Debt Ratio: 25.0% 1% 70.30% 3.77%

2.1 3.72 0.8 1.72

Times Interests Earned Ratio:

Profitability

9.5% 0.26% 0.08% 28.10%

Gross Profit Margin:

11.2% 0.22% 0.02% 33.30%

Operating Profit Margin:

6.0% 0.12% 0.40% 17.60%

Net Profit Margin:

3.30 1.9448 1.88 6.09

Earnings Per Share (EPS):

1.2% 0.05% 1.10% 2.50%

Return on Total Assets (ROA):

19.9% 0.04% 3.40% 56.30%

Return on Common Equity (ROE):

Aman Cotton Fibrous LTD

Ratios Analysis-(2016-17 to 2018-19)

Year
Ratio Formula

2016-17 2017-18 2018-19

Liquidity
Current Assets
Current Ratio: 4.104831592 2.594652179 3.163671291
Current Liabilities
 
Current Assets-Inventory
Quick (acid-test) Ratio: 0.928451281 0.344604675 1.141474946
Current Liabilities
        
Activity

Cost of goods sold

Inventory Turnover: 1.316511988 1.231014738 0.730934249
Inventory

Accounts receivable
Average Collection Period: 177.5848123 365 365
Average sales per day

Accounts payable
Average Payment Period: 0.906197009 2.799414353 6.901442237
Average purchases per day

Sales
Total Assets Turnover: 0.399794555 0.347822205 0.228089522
Total Assets

Debt

Total Liabilities
Debt Ratio: 1 1 100
Total Assets

Earnings before interest and taxes

Times Interests Earned Ratio: 175.3153805 5031.484314 3.719184831
Interest

Profitability

Gross profits
Gross Profit Margin: 0.255179334 0.247922081 25.50500088
Sales

Operating Profit
Operating Profit Margin: 0.231839637 0.227708149 21.93698991
Sales

Earnings available for common stockholders

Net Profit Margin: 0.034896607 0.056285074 12.16577251
Sales

Earnings available for common stockholders

Earnings Per Share (EPS): 0.7565 1.132692038 1.944830463
Number of shares of common stock outstanding

Earnings available for common stockholders

Return on Total Assets (ROA): 0.013951473 0.019577199 0.045433389
Total Assets

Earnings available for common stockholders

Return on Common Equity (ROE): 0.019339625 0.026756917 0.036084986
Common stock equity
 Particulars 2017-18 2018-19 2019-20

Current Assets: 4,337,893,105 2,854,217,154 3,612,483,079

Current Liabilities: 1,056,777,363 1,100,038,447 1,141,864,229

Cost of goods sold: 1,291,717,191 1,210,797,259 952,706,577

Inventory: 981,166,296 983,576,574 1,303,409,409

Accounts receivable: 843,778,786 839,831,316 574,722,918

Average sales per day: 4,751,413 2,300,908 1,574,583

Accounts payable : 3,206,987 9,286,365 18,013,834

Average purchases per day: 3,538,951 3,317,253 2,610,155

Sales : 1,734,266,045 1,609,935,925 1,278,886,621

Total Assets: 4,337,893,105 4,628,617,447 5,606,950,335

Total Liabilities: 4,337,893,105 4,628,617,447 5,606,950,335

Earnings before interest and taxes (EBIT): 32,778,892 302,960,765 254,742,757

Interest: 186,971 60,213 68,494,245

Gross profits: 442,548,854 399,138,665 326,180,044

Operating Profit: 402,071,611 366,595,529 280,549,229

Earnings available for common stockholders: 60,520,000 90,615,363 155,586,437

 Number of shares of common stock outstanding: 80,000,000 80,000,000 80,000,000

Common stock equity: 3,129,326,452 3,386,614,445 4,311,666,884

APEXSPINN (Apex Spinning & Knitting Mills Ltd.)

Ratios Analysis (2016-17 to 2018-19)

Year
Ratio Formula
2016-17 2017-18 2018-19

Liquidity

Current Assets
Current Ratio: 1.15 1.13 1.11
Current Liabilities

Current Assets-Inventory
Quick (acid-test) Ratio: 0.96 0.91 0.91
Current Liabilities

Activity

Cost of goods sold

Inventory Turnover: 16.13 15.2 17.04
Inventory

Accounts receivable
Average Collection Period: (in days) 49.54 44.36 61.46
Average sales per day

Accounts payable
Average Payment Period: (in days) 87.30 86.68 83.06
Average purchases per day
 Sales
Total Assets Turnover: 2.36 2.42 2.49
Total Assets

Debt

Total Liabilities
Debt Ratio: 69.8% 66.6% 70.3%
Total Assets

Earnings before interest and taxes

Times Interests Earned Ratio: 0.5 0.5 0.8
Interest

Profitability

Gross profits
Gross Profit Margin: 0.079 0.076 0.079
Sales

Operating Profit
Operating Profit Margin: 0.013 0.013 0.016
Sales

Earnings available for common stockholders

Net Profit Margin: 0.5% 0.5% 0.4%
Sales

Earnings available for common stockholders

Earnings Per Share (EPS): 1.91৳ 2.08৳ 1.88৳
Number of shares of common stock outstanding

Earnings available for common stockholders

Return on Total Assets (ROA): 1.1% 1.3% 1.1%
Total Assets

Earnings available for common stockholders

Return on Common Equity (ROE): 3.7% 3.9% 3.4%
Common stock equity
 Particular 2016-17 2017-18 2018-19

Current Assets: 1,183,939,212 994,046,480 1,103,917,016

Current Liabilities: 1,461,496,134 878,212,396 996,404,437

Cost of goods sold: 3,115,547,624 2,960,224,094 3,344,121,021

Inventory: 193,149,524 194,630,209 196,249,430

Accounts receivable: 4,596,288,25 3,895,944,39 6,118,519,49

Average sales per day: 9,277,437 8,782,347 9,955,242

Accounts payable : 745,163,504 703,008,415 761,041,964

Average purchases per day: 8535747 8110203 9161975

Sales : 3,386,264,682 3,205,556,644 3,633,663,481

Total Assets: 1,434,568,790 1,325,340,111 1,461,943,892

Total Liabilities: 1,001,457,938 882,050,663 1,027,440,111

Earnings before interest and taxes (EBIT): 46,950,228 62,411,316

47,270,272
Interest: 90,785,599 86,915,185 80,631,580

Gross profits: 270,717,058 245,332,550 289,542,460

Operating Profit: 44,719,190 43,165,582 57,101,206

Earnings available for common stockholders: 16,077,724 17,444,849 15,763,947

Number of shares of common stock outstanding: 8,400,000 8,400,000 8,400,000

Common stock equity: 434,056,023 443,289,448 460,485,954

 Financial Ratio Analysis
Alltex Industries Limited
Year
Ratio Formula
2018-19

Liquidity

Current Assets
Current Ratio: 0.88
Current Liabilities

Current Assets-Inventory
Quick (acid-test) Ratio: 0.41
Current Liabilities

Activity

Cost of goods sold

Inventory Turnover: 6.43
Inventory

Accounts receivable
Average Collection Period: 251
Average sales per day

Accounts payable
Average Payment Period: 94.31
Average purchases per day

Sales
Total Assets Turnover: 0.14
Total Assets

Debt

Total Liabilities
Debt Ratio: 3.77%
Total Assets

Times Interests Earned Ratio: Earnings before interest and taxes 1.72
 Interest

Profitability

Gross profits
Gross Profit Margin: 28.10%
Sales

Operating Profit
Operating Profit Margin: 33.30%
Sales

Earnings available for common stockholders

Net Profit Margin: 17.60%
Sales

Earnings available for common stockholders

Earnings Per Share (EPS): 6.09
Number of shares of common stock outstanding

Earnings available for common stockholders

Return on Total Assets (ROA): 2.50%
Total Assets

Earnings available for common stockholders

Return on Common Equity (ROE): 56.30%
Common stock equity
 Particular 2018-19

Current Assets: 1053860984

Current Liabilities: 1200380483

Cost of goods sold: 359131009

Inventory: 55849107

Accounts receivable: 334659512

Average sales per day: 1333768

Accounts payable : 5567844

Average purchases per day: 59035.23

Sales : 486825490

Total Assets: 3395585919

Total Liabilities: 2721174531

Earnings before interest and taxes (EBIT): 385868149

Interest: 223318183

Gross profits: 136887174

Operating Profit: 162497570

Earnings available for common stockholders: 85747927

Number of shares of common stock outstanding: 55968000

Common stock equity: 1,520,794,04