Letter of Transmittal

September 10, 2020

To

Naznin Sultana Chaity

Assistant Professor,
School of Business Department,
Ahsanullah University of Science & Technology

Subject: An Application for submission of term final report on – “ Ratio analysis and findings
of SINGER Bangladesh Ltd

Dear Madam,

I am, the students of BBA 2nd year 2nd semester section C of School of Business Department,
Ahsanullah University of Science &Technology. I have prepared the final report for the purpose
of Ratio analysis and findings of SINGER Bangladesh Ltd.

I therefore pray and hope that you would be kind enough to grant our report.

Yours Sincerely,

…………………………..
Md: Hasebur Rahman
Id: 18.01.02.092
Section: C
School of Business Department, Ahsanullah university of Science and Technology
Acknowledgement

First of all, for preparing my report, I would like to thanks almighty Allah.
I would like to acknowledge Naznin Sultana Chaity, Assistant professor, School of Business,
Ahsanullah University of Science and Technology for this supervision and valuable guidance.
During the preparation of this report I have collected many important information from Dhaka
stock exchange. I would also like to acknowledge those “Financial Performance Analysis of
SINGER Bangladesh Ltd 2016 to 2017.

Executive summary

A ratio is a way of comparing two or more quantities. Analyzing any company’s Liquidity ratio -
Current ratio, Quick ratio; Activity ratio, Debt ratio, Profitability ratio, Market ratio. Ratio
analysis, and so is used to judge the financial success of an economic entity.

One popular ratio is the current ratio which is current assets divided by current liabilities. This
provides an idea of whether the entity can pay forthcoming bills. A ratio of less than one is a
dangerous signal in that current bills are greater than current assets such as cash.

Another important ratio is Debt-to-equity ratio is a financial ratio indicating the relative
proportion of entity’s equity and debt used to finance an entity’s assets.

This report is based on the rules of Business Mathematics. It carries a minimum marks. This
report will help us to upgrade our grades we get in our exams. It also enrich our knowledge
about ratio analyzing of companies.

For preparing this report I have divided several parts

In chapter 1 I include Objective of the study, objectives, data sources, methodology, sample and
sample size, limitation.

In chapter 2 I include history of the company, mission and vision.

In chapter 3 I include analysis and findings.

In chapter 4 I include recommendation and conclusions.

Part-1
Introduction

Ratio analysis is a numerical attempt to analyze the performance and financial position of a
business. By converting absolute numbers into ratios, we can compare between one firm and
another, or between several periods of one company. Indeed, ratio analysis, which is the
interpretation of ratios, cannot be meaningfully achieved without some form of comparison.
Ratio analysis expresses the relationship among selected items of financial statement of data. A
ratio expresses the mathematical relationship between one quantity and another. The
relationship is expressed in terms of a percentage, a rate or a simple proportion. For analysis of
the primary financial statements, ratio can be used to evaluate liquidity, profitability and
solvency.

Ratio Analysis enables the business owner/manager to spot trends in a business and to
compare its performance and condition with the average performance of similar businesses in
the same industry. In order to do this, a firm can compare its ratios with those of businesses
similar to the company as well as compare its own ratios for several successive years, watching
especially for any unfavorable trends that may be alarming. Ratio analysis may provide the all-
important early warning indications that allow the firm to solve its business problems before
there is any sort of destruction. Ratio can provide clues to underlying conditions that may not
be apparent from individual financial statement component.

1.1 Origin of the report:

This report Prepared as academic requirement of the course (Financial Management) of

Ahsanullah University of Science and Technology. This is assigned by Naznin Sultana Chaity,
Course Instructor, school of Business Department.

1.2 Objective of the report:

The main objective of the study is developing the knowledge in practical level and find out the
reality in the practical life.

 To about the Company.

 To know about the particular Industry.
 To know about Company’s financial Condition.

1.3 Scope of the report:

This report is being conducted to know the attitude toward the company’s finance from
different point of view.

1.4 Methodology:
 Data sources
For preparing the report we have use different sources of data sample and analyze the data
and using. So, the data sources are:

Secondary sources of data

 Internet
 Searching web site
 Books
 Annual report of the company
 Dhaka stock exchange

1.5 Limitations:
During the study of the report we have faced following problems:-

Time is not enough for such an extensive study.

Information relating to the survey is very sensitive that is why secondary data have been used
in some extent.

Sometimes it is difficult to understand a few accounting and financial terms which could
otherwise be incorporated sufficiently in preparing the report.

I have to be aware that ratio analysis is widely used as a performance indicator, but it does have
its limitations too. For instance, accounts show only the monetary aspects of the business. They
do not show management or staff strengths or weaknesses. So ratio analysis ignores this aspect
of the performance as well.

PART 2
2.1 History of SINGER Bangladesh ltd.
The SINGER saga began in 1851, when Sir Isaac Merritt Singer with US$ 40 in the borrowed
capital began to manufacture and sell a machine to automate and assist in the making of
clothing. This revolutionary product was the first offering from the newly formed I.M. Singer &
Company, which has now evolved into the world leader in the manufacturing and distribution
of sewing related products. The SINGER brand name is now famous around the globe.

In 1876, SINGER became the first multinational industrial company as it began manufacturing
sewing machines in Glasgow, Scotland. By 1880, world sales had reached 250,000 units.
Additional factories were established in New Jersey, and one of the best-known emblems- the
RED S Girl Trademark-was developed.

The first electric machine was introduced in 1889 and by the turn of the century, annual sales
had reached US$1.35 million. A separate subsidiary, the Singer Sewing Machine Company, was
established to handle sales and distribution in the western hemisphere. In 1908, The singer
Building at 149 Broadway in New York was opened and became theheadquarter of Singer for
the next 54 years. It was the tallest building and the first skyscraper in the world at that time.

Capitalizing on its famous brand name, its hire-purchase plan and its vast network of retail
outlets and other distribution points around the world, Singer introduced electronics, home
appliances, and other consumer durables especially in the Asia Pacific Rim, Latin America, and
the Caribbean. Today Singer is a household name throughout the world for a wide range of
products for the home.

The presence of SINGER in Bangladesh dates back to the British Colonial era when the country
was a part of the Indian sub-continent. The first operation of Singer in Bangladesh began more
than 100 years ago, i.e. in the year 1905. Later two sales centers were set up in Dhaka and in
Chittagong. After the partition of the sub-continent in 1947, Singer in East Pakistan operated as
a branch of Singer Pakistan. With the emergence of Bangladesh on December 16, 1971, the East
Pakistan Branch Office was elevated to a Country Office. A change in the investment policy in
1979 created new business opportunities and Singer registered as an operating company.
In1983 the company was listed with Dhaka Stock Exchange (OSE) and in 2001, it was also listed
with the Chittagong Stock Exchange.
2.2 COMPANY AT A GLANCE:

 380 retail outlets

 486 Dealers
 1384 members
 Turnover- 11,059.1 millions.

2.3 PRODUCT LINE

Today, the product mix of SINGER consists of the following items:
Air conditioner Air cooler
Computer DVD/ Blue Ray Player

Electric Kettle Home Appliances

Freezer Refrigerator
Furniture Gas Burner
Iron Kitchen Appliances
LED/LCD TV Microwave Oven
Rice Cooker Sewing Machine
Smart Phone Washing Machine

Water Heat Water Purifier

 

2.4 COMPANY OVERALL HIGHLIGHTS:

SHAREHOLDER’S EQUITY  2,184.5 TAKA IN MILLION

FORWARD P/E RATIO 19.3
EPS 9.8
AUDITED P/E RATIO 20.0
TRADING CURRENCY BD TAKA
MARKET CATEGORY A
MARKET LOT 1
CFI CODE ESVUFR
CREDIT RATING “AAA”
AGM DATE MAY 2016
NUMBER OF SHAREHOLDER 11,788

 
2.5 OBJECTIVES OF SINGER BANGLADESH

 Its objectives as specified by the company are to be the market leader in product range
and market segment and providing consumers with the best service & shopping
experience in the country. Providing consumers with products of latest technology,
developing employees to achieve their real potential, providing shareholders with
steady asset growth & return on investment above the industry norms are also the
objectives of the company. Grow revenue &profits at a rate above the industry norm is
also an objective.

 To be the market leader in the product range and market segment

 Providing consumers with the best service and shopping experience in the
country
 Developing employees to achieve their real potential
 Providing shareholders with steady asset growth and return on investment
above the industry norm
 Grow revenue and profits at a rate above the industry norm
 Part -3
3.1 Current ratio

Current Ratio = Current assets/current liabilities

YEAR Current Ratio

2016 1.77
2017 1.63

Current ratio
1.8

1.77
1.75

1.7

1.65

1.63
1.6

1.55
2016 2017

Current ratio

2016
2017

48%
52%

Explanation:

2016 to 2017 C.R decrease

 3.2 Quick Ratio

Quick Ratio = current ratio –inventory/current liabilities

Year Quick Ratio

2016 0.84
2017 0.75

Quick ratio
0.86

0.84
0.84
0.82

0.8

0.78

0.76

0.74 0.75

0.72

0.7
2016 2017

Series 1

Quick ratio

2016
2017
47%
53%

Explanation

2016 to 2017 Q.R decrease

 3.3 cash ratio

Cash ratio = cash + cash equivalents/ total current liabilities

Year Cash Ratio

2016 0.06
2017 0.07

Cash ratio
0.07

0.07

0.07

0.07

0.06

0.06

0.06

0.06

0.06

0.05
2016 2017

Series 1

cash ratio

2016
46% 2017

54%

Explanation: 2016 to 2017 Cash Ration increase

3.4 Interest coverage Ratio

Interest coverage ratio = EBIT/ Interest expense

Year I.C.R
2016 87.53%
2017 89.91%

i .C.R
90.50%

90.00%

89.50%

89.00%

88.50%

88.00%

87.50%

87.00%

86.50%

86.00%
2016 2017

Series 1

i.c.r

2016
2017
51% 49%

Explanation

2016 to 2017 I.C.R increasing

 3.5 Debt to Equity Ratio

Debt ratio = total liabilities/total assets

Year Debt Ratio
2016 0.8753
2017 0.8991

Series 1
0.91

0.9

0.9

0.89

0.89

0.88

0.88

0.87

0.87

0.86
2016 2017

Series 1

Sales

2016
2017
51% 49%

Explanation
2016 to 2017 D.E.R increasing
 3.6 price to book value ratio

P.B.V.R = stock price per share/book value per share

Year P.B.V.R
2016 11.23
2017 10.40

11.4

11.2

11

10.8

10.6

10.4

10.2

10

9.8
2016 2017

Series 1

47% 2016
53% 2017

EXPLANATION
 2016 to 2017 P.B.V.R decrease

3.7 Cash flow Ratio

Cash flow ratio = operating cash flow/ current liabilities

Year C.F.R
2016 7.75
2017 9.69

C.F.R
12

10
9.69
8
7.75

0
2016 2017

Series 1

Sales

2016
44% 2017

56%

Explanation
 2016 to 2017 C.F.R Increase

3.8 Earning per share Ratio

EPS = Net income/average outstanding common share

Year E.P.S
2016 61.50
2017 66.50
E.P.S
67

66

65

64

63

62

61

60

59
2016 2017

Series 1

E.P.S

2016
2016
48%
52%
 Explanation
2016 to 2017 E.P.S Increase
3.9 Gross Margin Profit Ratio

G.M.P = Gross margin / net sales

Year G.M.P
2016 7.06%
2017 7.79%

G.M.P
8.00%

7.80%

7.60%

7.40%

7.20%

7.00%

6.80%

6.60%
2016 2017

Series 1

G.M.P

2016
2017
48%
52%

Explanation
 2016 to 2017 G.M.P Increase
3.9 Profit margin Ratio

P.M.R = Net income / Net Sales

Year P.M.R
2016 5.86%
2017 6.05%

p.m.r
6.10%

6.05%

6.00%

5.95%

5.90%

5.85%

5.80%

5.75%
2016 2017

Series 1

P.M.R

2016
2017
51% 49%

Explanation
 2016 to 2017 P.M.R Increase

3.10 Return on Assets Ratio

ROA = Net Income / Total Assets

Year R.O.A
2016 0.0487
2017 0.0551

R.O.E
0.06

0.05

0.04

0.03

0.02

0.01

0
2016 2017

Series 1

R.O.E

2016
2017
47%
53%

Explanation
2016 to 2017 R.O.E Increase
 3.11 Return on Equity ratio

R.O.E = Net Income / shareholder’s Equity

Year R.O.E
2016 0.4498
2017 0.4556

R.O.E
0.46

0.46

0.45

0.45

0.45

0.45

0.45
2016 2017

Series 1

R.O.E

2016
2017
50% 50%

Explanation
2016 to 2017 R.O.E Increase
3.12 Assets Turn Over Ratio

A.T.O = Net Sales / Average total Assets

A.T.O
2

1.95

1.9

1.85

1.8

1.75

1.7

1.65
2016 2017

Series 1

A.T.O

2016
2017
47%
53%

Explanation
 2016 to 2017 A.T.O Increase

3.13 Working Capital Ratio

Working Capital = Current Assets / current liabilities

Year Working Capital
2016 1.55
2017 3.29

W.C.R
3.5

2.5

1.5

0.5

0
2016 2017

Series 1

W.C.R

32%
2016
2017

68%
 Explanation
2016 to 2017 W.C.R Increase

3.14 Compound Annual Growth Rate Ratio

C.A.G.R = Ending investment Value / Beginning investment Value

Year C.A.G.R
2016 0.0489
2017 0.0828

C.A.G.R
0.09

0.08

0.07

0.06

0.05

0.04

0.03

0.02

0.01

0
2016 2107

Series 1

C.A.G.R

37%
2016
2017

63%
Explanation
2016 to 2017 C.A.G.R Increase

Part – 4
Conclusion and Recommendation

4.1 Recommendation

Year Net Income Sales Total Equity EPS(tak

a in
Assets
million )
2016 713,947,539 8,844,133,053 5,700,118,993 1,947,030,527 7.1
2017 771,865,769 10,967,038,473 6,6679,275,360 2,184,546,456 10.1

4.2 Major Findings

 Liquidity ratios analyze the ability is good SBL to pay off both their long-term liabilities as
they become current liabilities. The cash levels of SBL and the ability to turn other assets
into cash to pay off liabilities and other current obligations is better position.

 Solvency ratios, also called leverage ratios, SBL not so very good ability to sustain
operations indefinitely by comparing debt levels with equity, assets, and earnings. SBL
to pay off its, solvency ratios focuses more on the long-term sustainability of instead of
the current liability payments.

 Market value ratios are used to evaluate the current share price of a publicly-held
company's stock. SBL with a high dividend yield pay their investor’s. SBL also providing
better earnings to shareholder’s per share.
 Profitability ratio analysis is a good way to Measure Company’s performance. SBL is a
strong ability to transform money from sales into profits, and returns, showing the
ability of a company to generate returns for its shareholder.
  Efficiency ratios also called activity ratios measure how well companies utilize their
assets to generate income. SBL improve the company as well as outside investors and
creditors looking at the operations of profitability of the company.

Conclusion

Today, Singer Bangladesh Ltd. is a large, diversified company with unmatched presence
throughout Bangladesh. It remains a member of the worldwide Singer family. Working on
analyzing the financial status of singer Bangladesh limited I focused majorly on the expressing
the ratio results & also made du Pont analysis for further improvement of the study on that
report. After analyzing the liquidity ratios of singer Bangladesh I realized that the company is in
a very good situation as they have enough amount of liquid assets to support their short term
liabilities as I have found the current ratio, quick ratio & cash ratio result above the industry
standard. The receivables of the company has certainly increased which is almost double than
previous year & that is a sign of good business but converting those receivables are taking some
more time than previous which is matter of concern for the company. The company has
certainly extended the cash value payment time period from 3 months to 6 months that’s why
the cash they were receiving early they are getting those cash 3 months later. The company has
made an enormous amount of profit last year as they stated in the financial statement & I also
found it from analyzing the profitability ratios. Sales has increased a lot that’s why their gross
margin increased & since they have established factory here in Bangladesh transportation cost
has reduced a lot which is increasing the efficiency of the company. The cash ratio shows that
the company has enough money to meet up with its short term liabilities daily which indicates
as strong position of the company in the electronics industry. Since the interest coverage ratio
of the SBL is more than 1 it’s showing another good sign for the company. But since the
company has extended its cash conversion period its hire sale increased almost in an alarming
rate to maintain a big receivables will be greater challenge for the company. A growing EPS of
the company is attracting the shareholder to invest more money in the company’s share.
Moreover the company is providing a constant dividend to the shareholders to keep them
happy & motivate them to invest more in the company. Since the hire sales as well as the cash
sale of the company is increasing at an alarming rate the gross profit as well as the profit
margin of the company is also increasing & whenever the company earns profit at the year-end
it distribute it as a profit bonus to all the employees at a same rate to all the employees.

Reference
https://singerbd.com/
https://singerbd.com/investors-relations
https://www.wsj.com/market-data/quotes/BD/XDHA/SINGERBD/financials
https://www.dsebd.org/