IUBAT - International University of Business Agriculture and Technology

Report on
Bata Shoe Company (Bangladesh) Limited

Submitted by:
Abu Naeem Mahmud Tuhin
ID: 18102152
Course Name: Advanced Financial Accounting
Course Code: ACC 406
Section: A
Program: BBA

Submitted to:
Arif Ahsan
Assistant professor
College of Business Administration (CBA)

Date of submission: 19/04/2021

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 Table of Contents

About Bata Shoe............................................................................................................................3

Vision..............................................................................................................................................3
Mission............................................................................................................................................3
Reason for selecting Bata Shoe Company...................................................................................4
Objective of this Report:...............................................................................................................4
Basic Information:.........................................................................................................................4
Market Information: April 16, 2021............................................................................................5
Net Income /Net Loss of last 4 years............................................................................................5
Dividend Announce method:........................................................................................................6
Earnings per share last 5 year:.....................................................................................................6
Growth rate:...................................................................................................................................7
Ratio Analysis:...............................................................................................................................8
Net Profit Margin Ratio:...........................................................................................................8
Current Ratio.............................................................................................................................9
Price-to-Earnings Ratio...........................................................................................................11
The Debtors Turnover Ratio:.................................................................................................11
Conclusion:...................................................................................................................................12
Reference:.....................................................................................................................................13

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 Bata Shoe
Company

About Bata Shoe

The Bata Shoe Organization was founded in 1894 by Czech businessman Tomas Bata in the city
of Zlin. Today the Bata Shoe Organization is a sprawling geo-centric company encompassing
operations in more than 70 countries around the world. It serves over 1 million customers per
day, employs more than 30,000 people, operates more than 5,000 international retail outlets,
manages retail presence in over 70 countries and runs 27 production facilities across 20
countries.

Vision

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 To make great shoes accessible to everyone

Mission
 To help people look and feel good.

 To be the customer's destination of choice.

 To attract and retain the best people.

 To remain the most respected Footwear Company

Reason for selecting Bata Shoe Company

Bata Shoe Company is a well-known company in Bangladesh.  Bata Shoe Company is a public
limited company.  The Bata Shoe Company is “A” categories company in stock market. This
company announce regular dividend.  It is Tannery industry. Bata shoe company established in
1854. I have visited this company in 2020. Since its inception, Bata Shoe Company
(Bangladesh) Ltd. has strived towards one goal customer satisfaction. That’s why I choose
this company.

Objective of this Report:

1. To know about Bata shoe company

2. To know the company mission and vision
3. To know about the dividend % announce and which dividend they announced.
4. To identify net income or loss of last 4 year.
5. To identify stock price , pain in capital, EPS etc.
6. To know about the company financial performance.

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Basic Information:

Industry: Tannery Industries

Share category: A
EPS: 36.11
Total No. of Outstanding Securities 13,680,000

Face/par Value = 10.0 tk

Paid -up Capital = 136.80 million

Market Information: April 16, 2021

Last trading price 693.20 tk Day’s Range 693.20-693.20 tk

Opening Price 693.20 tk 52 weeks moving range 693.20-755.00 tk

Change 0% Total No. of Outstanding 13,680,000

Securities
Adjusted Trading 693.20 tk Market capitalization 948,297,600 tk
price

Net Income /Net Loss of last 4 years:

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 Year Tk

2016
1,043,018,006
2017
1,126,391,881
2018
995,729,511
2019
554,541,459

Dividend Announce method:

Year Rate of dividend Form of Dividend

2019 125% Cash

2018 345% Cash

2017 335% Cash

2016 330% Cash

2015 320% Cash

Earnings per share last 5 year:

Year

2019 36.11

2018 72.79

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 2017 82.34

2016 76.24

2015 60.80

Here we can see that in 2019 EPS is 36.11 which is lower than 2015, 2016, 2017 and 2018
which is not a good indicator for the company.

Growth rate:

Year Net Sales Net Income Dividend (per Share)

2016 8,784,553,317 1,043,018,006 76.24
2017 9,040,558,355 1,126,391,881 82.34
2018 9,521,394,148 995,729,511 72.89
2019 8,573,497,561 554,541,459 36.11

Growth Rate = (Final value - Initial value)/ Initial value

For 2019

Growth Rate in Net Sales Net Income Dividend (per Share)

-0.09% -44% -50%

For 2018
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 Growth Rate
in Net Sales Net Income Dividend (per Share)
0.05% -11.00% -11%

For 2017
 
Growth Rate
in Net Sales Net Income Dividend (per Share)
0.03% 0.08% 0.08%

Here we can see that in 2019 net sales increase 9% but their net income is 44% less. It’s
create a bad impact on dividend announcement % also, which is 50% less than 2018.

Ratio Analysis:

Net Profit Margin Ratio: Net Profit Margin (also known as “Profit Margin” or “Net Profit
Margin Ratio”) is a financial ratio used to calculate the percentage of profit a company produces
from its total revenue. It measures the amount of net profit a company obtains per dollar of
revenue gained. The net profit margin is equal to net profit (also known as net income) divided
by total revenue, expressed as a percentage.

Formula: Net Profit Margin = (Net Profit/Net Sales) x 100

For 2017

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Net Profit Margin= (1,126,391,881/9,040,558,355)*100=12.49%

For 2018

Net Profit Margin= (995,729,511/9,521,394,148)*100 =10.03%

For 2019

Net Profit Margin= (554,541,459/8,573,497,561)*100 =6.47%

14%
Net Profit Margin Ratio
12%

10%

8%

6%

4%

2%

0%
2017 2018 2019

Net Profit Margin Ratio

Comment: In the year 2017 Net Profit Margin was 12% which is better than 2019 and 2018.In
the year 2019 net profit margin was 6.47%. The higher the net profit margin is better for the
company. In 2019 and 2018 their net sales was lower than 2017 and may be other expenses was
high for that net profit was low. So Bata Shoe Company should decrease the operational and
non-operational expenses to get higher profit margin in 2020.

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Current Ratio: Current ratio is a liquidity ratio which measures a company's ability to pay its
current liabilities with cash generated from its current assets. It is calculated by dividing current
assets by current liabilities.

Formula: Current Ratio =Current Assets/ Current Liabilities

For 2019

Current Ratio= (6,213,961,203/ 2,650,101,609) = 2.34

For 2018

Current Ratio= (7,517,113,217/ 3,732,078,883) =2.01

For 2017

Current Ratio= (6,534,801,034/ 3,246,479,151) =2.01

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 Current Ratio
4

3.5

2.5

1.5

0.5

0
2017 2018 2019

Current Ratio

Comment: In the year 2019 “Current Ratio” is better than 2018 and 2017. The more current
ratio result is better for Bata Shoe or any organizations because after paying all liabilities. A
company can run their business better if they have current ratio result more than 2.

Price-to-Earnings Ratio: The price-to-earnings ratio (P/E ratio) is the ratio for valuing a
company that measures its current share price relative to its per-share earnings (EPS). The price-to-
earnings ratio is also sometimes known as the price multiple or the earnings multiple. P/E ratios are
used by investors and analysts to determine the relative value of a company's shares in an apples-to-
apples comparison. It can also be used to compare a company against its own historical record or to
compare aggregate markets against one another or over time

Formula: P/E Ratio=Market value per share/Earnings per share.

For 2019 P/E Ratio = 705/36.11

=19.52

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It is a popular ratio that gives investors a better sense of the value of the company.

The Debtors Turnover Ratio: The Debtors Turnover Ratio also called as Receivables
Turnover Ratio shows how quickly the credit sales are converted into the cash. This ratio
measures the efficiency of a firm in managing and collecting the credit issued to the customers.

Formula: Net Credit sales / Average Accounts Receivable

For 2019

The Debtors Turnover= 8,573,497,561/ (1,295,320,602 +2,015,228,017/2)

=8,573,497,561/1655274310

=5.17

For 2018

The Debtors Turnover= 9,521,394,148/ (2,015,228,017+ 1,244,323,483/2)

=9,521,394,148/1629775750

=5.84

Comment: Receivables Turnover Ratio is one of the efficiency ratios and measures the number
of times receivables are collected, on average, during the fiscal year. Bata Company’s accounts
receivable turnover ratio is decreasing gradually. In year 2018 the ratio was 5.84 next year it
reached to 5.17. We can interpret the ratio to mean that Company Bata collected its receivables
5.84 times on average in 2018. In other words, the company converted its receivables to cash
5.84 times that year which was better than 2019.

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 Debtors Turnover Ratio
6

5.8

5.6

5.4

5.2

4.8
2018 2019

Debtors Turnover Ratio

Conclusion: From this report we can understand that Bata Shoe company ltd financial
condition is not very good. This company financial condition going worse day by day from 2017.
Their dividend announcement percentage also decrease in 2019, which is not good for the
company. They should decrease their operating and non-operating cost to make more profit in
future. Growth Rate, Ratio Analysis, Horizontal Analysis Income Statement, Horizontal
Analysis Balance Sheet and Horizontal Analysis Cash flow Statement are attached in the
Microsoft Excel File.

Reference:

1. Dsebd.org. 2020. Display Company Information | Dhaka Stock Exchange. [online] Available at:
<https://www.dsebd.org/displayCompany.php?name=BATASHOE> [Accessed 1 April 2021]

2. about us. (2020, September 10). Batabd. 

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 https://www.batabd.com/pages/about-us

3. Hayes, A., & Boyle, J. M. (2021, 03 18). Guide to Dividend Investing. Retrieved from
Investopedia.com: https://www.investopedia.com/terms/d/dividend.asp

4. Investopedia. 2021. Net Profit Margin. [online] Available at:

<https://www.investopedia.com/terms/n/net_margin.asp> [Accessed 15 April 2021].

https://www.investopedia.com/terms/p/price-earningsratio.asp

https://www.investopedia.com/terms/e/eps.asp

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