Accounting Report

Report
On
Financial Statement Analysis
“Bata Shoe Company (Bangladesh) Limited”
1
JAGANNATH UNIVERSITY
Report on
“Financial Analysis of Bata Shoe Company (Bangladesh) Limited”
Course Name: Financial Accounting

Course Code: FIN-2105
2nd Year, 1st Semester
Submitted to:
Farzana Nasreen
Assistant Professor
Department of Finance
Jagannath University, Dhaka
Submitted by:
Group No.: 18
Group Name: Concept Squad
Name Student ID
Md. Alif B200203042
Rabeya Sultana Ripte B200203066
MD. Miraj Hossain B200203083
MD. Taijul Islam B200203087
Mahfuja Mim B200203106
15 Batch
Jagannath University, Dhaka
Submission Date: May 18, 2023
Letter of Transmittal
2
Date: submission date
Farzana Nasreen
Assistant Professor
Jagannath University
Subject: To submit a report on “Financial Analysis of Bata Shoe Company

(Bangladesh) Limited”
Dear sir,
It is indeed a great pleasure for us that we have completed our report on “Financial
Analysis of Bata Shoe Company (Bangladesh) Limited “We tried our level best to
give an overview on this topic. We have gathered much information from different
sources.
In the time of preparing this report, we have followed your all instructions. We will
be pleased to clarify any kind of discrepancy may arise. Again, we want to thank
you for allowing us to conduct this research.
Sincerely,
Md. Alif
On behalf of
Group-18
BBA 2nd Year,1st Semester, 15th batch
Jagannath University
3
Acknowledgement
First, we want to thanks the almighty for giving us the capacity to complete this
report within a fixed time. We are very indebted to our course teacher Farzana
Nasreen mam for assigning us such an interesting topic which is name as
“Financial Analysis of Bata Shoe Company (Bangladesh)
Limited”. We also express our sincere gratitude to our respected course teacher for
his important suggestions and guidelines, which was helpful for us in completing
this report.
4
Executive Summary
The purpose of this study is to perform financial analysis of Bata Shoe Company
(Bangladesh) Limited for the five years 2017-21. Ratios regarding profitability,
liquidity, efficiency and solvency are calculated and interpreted. Due to lack of
data regarding industry average financial ratios for footwear industry in
Bangladesh, Bata’s ratios are only compared with its previous years
ratios. Horizontal analysis of income statement and balance sheet items are done
for five years. Vertical analysis of income statement and balance sheet items are
done for five years. This report provides an overview of strengths and weaknesses
of “Bata shoe company (Bangladesh) Ltd.” based on some analysis and
calculations. The publicly available data is presented in a comprehensive and
easily accessible format. The report also contains the company’s profile. The report
also includes financial information, ratio analysis, opinions, current financial
position, horizontal and vertical analysis, latest strengths or weakness and steps
should be taken for the company. This report provides relevant news,
achievements, corporate history, background. The report also enables direct
comparison to be made between “Bata shoe company (Bangladesh)” and its
competitors.
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Table Contents
Executive Summary...................................................................................................................................5
Title fly and Title Page..............................................................................................................................6
Introduction...............................................................................................................................................7
Objective of the study............................................................................................................................7
Methodology of the Study.........................................................................................................................8
Limitation of the study..........................................................................................................................8
Company Profile........................................................................................................................................8
Horizontal Analysis of Balance Sheet of Bata Company Ltd...............................................................10
Vertical analysis of Balance Sheet of Bata Company Ltd....................................................................14
Horizontal Analysis of Income Statement of Bata Shoe Company Ltd...............................................18
Vertical analysis of Income Statement of Bata Shoe Company Ltd....................................................22
Liquidity Ratios.......................................................................................................................................26
1.Current Ratio:..................................................................................................................................26
2.Acid Test Ratio.................................................................................................................................29
Efficiency Ratio........................................................................................................................................32
1.Accounts Receivables Turnover......................................................................................................32
2.Inventory Turnover..........................................................................................................................35
3.Asset Turnover..................................................................................................................................38
Profitability Ratio....................................................................................................................................41
1. Profit Margin Ratio.........................................................................................................................41
2. Return on Asset................................................................................................................................16
3. Return on Equity.............................................................................................................................19
4. Earnings per Share............................................................................................................................4
5. Price Earnings Ratio........................................................................................................................10
6. Payout Ratio.....................................................................................................................................13
Solvency Ratio.........................................................................................................................................16
1. Debt to Asset Ratio..........................................................................................................................16
2. Time Interested Earned Ratio........................................................................................................19
Conclusion................................................................................................................................................22
References................................................................................................................................................23
6
Title fly and Title Page
Report on “Financial Analysis of Bata Shoe Company (Bangladesh) Limited”
Picture: A showroom of Bata Shoe Company (Bangladesh) Limited.
Source: Vasesi, A.G. (2023) Apparel News, Textile News, Fashion News & Trends, Apparel
Resources. Available at: https://apparelresources.com/ (Accessed: 11 May 2023).
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Introduction
With the passing of time, shoes have become an integral part of daily lives. Shoes have passed
on from being an item of luxury to an item of necessity. In Bangladesh when we think about
shoes, the first name comes into our mind is ‘Bata’. Bata is the market leader in footwear
industry of Bangladesh. To measure its progress toward reaching company goals, financial
analysis is important. Because, financial analysis involves examining historical data to gain
information about the financial health of a company. So, a clear perception regarding overall
business finance function can be achieved through such analysis. This study attempts to
undertake some in depth financial analysis of Bata Bangladesh Ltd. and infer conclusive
statements.
Objective of the study
General Objective:
The general objective of this study is-
• To perform financial analysis of Bata Shoe Company (Bangladesh) Limited
Specific Objective:
The specific objectives of this study are
• To perform ratio analysis of Bata Shoe Company (Bangladesh) Limited of last five years.
• To perform horizontal analysis of Bata Shoe Company (Bangladesh) Limited for last five years.
• To perform vertical analysis of Bata Shoe Company (Bangladesh) Limited of last five years.
8
Methodology of the Study
To do this study, secondary data has been used. Data has been collected from annual reports of
Bata Shoe company ltd from year 2017-21. As it is a quantitative report, data has been tabulated,
analyzed and interpreted with the help of different financial ratios. Firstly, Horizontal and
vertical analysis of income statement and Balance sheet is done for five years. Then Ratio
analysis is done for five years
Limitation of the study
The report faced some problems during its preparation, which has limited the purpose of the
report. The limitations are
• Due to unavailability of industry average financial ratios for footwear industry in Bangladesh,
Bata’s ratios couldn’t be compared to those ratios. So instead of comparing to industry average
ratios, Bata’s ratios are compared to its previous years ratios.
• It is very difficult to relate theoretical concepts to current world circumstances without
enough practical experience.
Company Profile
Name Bata shoe company (Bangladesh) Limited

Basic Operation It is a Bangladesh-based company engaged in the manufacturing and marketing
of leather, rubber, plastic, canvas footwear, hosiery and accessories items.
History Bata was established in 1894. It started its operation in Bangladesh in1962.
Vision 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.
Values Bata’s products have to make its customers look good and feel great. It becomes
customer’s choice by offering a personal shopping experience to create long
standing customer relationships. Therefore, at Bata the below five values are
integral parts of way of working:
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• Serve with passion
• Be bold
• Count on me
• Improving lives
• Exceed customer expectations
Board of Directors • Mr. Rajeev Gopalakrishnan (Chairman)
• Mr. Shaibal Sinha (Director)
• Mr. Chitpan Kanhasiri (Managing Director)
• Mr. K. M. Rezaul Hasanat (Director)
• Ms. Rupali H. Chowdhury (Director)
Products For women and men, it offers closed shoes, flipflops and thongs, sandals,
accessories, outdoor and sports shoes. For kids, it offers casual shoes and school
shoes. It offers a range of accessories which include ladies' bag, belts, eye gear,
wallet, shoe shiner and socks.
Target Market Bata offers products for people of all ages and classes
Brands The Company's brands include Bata, Bubble gummers, Comfit, Marie
Claire, NorthStar, Patapata, Power, Sandak, B.First, Scholl, Weinbrenner etc.
Franchisee In Bangladesh, Bata is lone franchisee of some internationally renowned brands

like Adidas, Nike, Hush Puppies, and Skechers.
Manufacturing plants Company's manufacturing plants are located at Tongi and Dhamrai. Bata’s
production capacity is 160,000 pairs of shoes daily
Focus of Domestic This segment is engaged in manufacturing and marketing of leather,
Segment rubber, plastic and canvas footwear, hosiery and accessories in domestic market.
Focus of This segment is engaged in manufacturing and exporting products in

International international market.
Segment
Position in Domestic Bata Bangladesh holds the No. 1 position in the footwear section as the leading
Footwear Industry Shoe brand in the market.
10
Horizontal Analysis of Balance Sheet of Bata Company Ltd
Bata Shoe Company Ltd.

Condensed Balance Sheet
December 31(In Million TK)
Horizontal Analysis
Increase or decrease in
2018
Assets 2018 2017 Amount Percent
Current Assets 7,517৳ 6,535৳ 982 15.03%
Plant assets (Net) 1,312 1,255 57 4.54%
Total Assets 8,829৳ 7,790৳ 1,039 13.34%
Liabilities
Current Liabilities 3,732৳ 3,246৳ 486 14.97%
Long term liabilities 348 319 29 9.09%
Total Liabilities 4,080৳ 3,565৳ 515 14.45%
Stockholders’ Equity
Common Stock Par 137 137 0 0%
Retained Earnings 4,501 3,977 524 13.18%
Revaluation Reserves 61 61 0 0%
Other Appropriated 1 1 0 0%
Reserves
Unappropriated 49 49 0 0%
Reserves
Total Stockholders’ 4,749 4,225 524 12.40%
Equity
Total Liabilities and 8,829৳ 7,790৳ 1,039 13.34%
11
Horizontal analysis
2019
Current Assets 6,214 ৳ 7,517 ৳ (1,303) (17.33%)
Plant assets (Net) 2,899 1,312 1,587 120.96%
Total Assets 9,113 ৳ 8,829 ৳ 284 3.22%
Liabilities
Current Liabilities 2,650 ৳ 3,732 ৳ (1,082) (28.10%)
Long term liabilities 1,474 348 1,126 323.56%
Total Liabilities 4,124 ৳ 4,080 ৳ 44 1.08%
Retained Earnings 4,741 4,501 240 5.33%
Reserves
Reserves
Total Stockholders’ 4,989 ৳ 4,749 240 5.05%
Equity
Total Liabilities and 9,113 ৳ 8,829 ৳ 284 3.22%
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Horizontal analysis
2020
Current Assets 3,732 ৳ 6,214 ৳ (2,482) (39.94%)
Plant assets (Net) 2,902 2,899 13 0.45%
Total Assets 6,634 ৳ 9,113 ৳ (2,479) (27.20%)
Liabilities
Current Liabilities 1,850 2,650 ৳ (800) (30.19%)
Long term liabilities 1,089 1,474 (385) (26.12%)
Total Liabilities 2,939 ৳ 4,124 ৳ (1,185) (28.73%)
Retained Earnings 3,447 4,741 (1,294) (27.29%)
Reserves
Reserves
Total Stockholders’ 3,695 4,989 (1,294) (25.93%)
Equity
Total Liabilities and 6,634 ৳ 9,113 ৳ (2,479) (27.20%)
13
Horizontal analysis
2021
Current Assets 3,657 ৳ 3,732 ৳ (75) (2.01%)
Plant assets (Net) 2,783 2,902 (119) (4.10%)
Total Assets 6,440 ৳ 6,634 ৳ (194) (2.92%)
Liabilities
Current Liabilities 1,925 1,850 75 4.05%
Long term liabilities 1,063 1,089 (26) (2.39)
Total Liabilities 2,988 ৳ 2,939 ৳ 49 1.67%
Common Stock Par 137 ৳ 137 ৳ 0 0%
Retained Earnings 3,204 3,447 (243) (7.05%)
Reserves
Reserves
Total Stockholders’ 3,452 3,695 (243) (6.58%)
Equity
Total Liabilities and 6,440 ৳ 6,634 ৳ (194) (2.92%)
14
Vertical analysis of Balance Sheet of Bata Company Ltd

Vertical Analysis
2018 2017
Assets Amount percentage Amount percentage
Current Assets 7,517 ৳ 85.1% 6,535৳ 83.9%
Plant assets (Net) 1,312 14.9% 1,255 16.1%
Total Assets 8,829 100.0% 7,790৳ 100.0%

Liabilities
Current Liabilities 3,732 ৳ 42.3% 3,246৳ 41.7%
Long term liabilities 348 3.9% 319 4.1%
Total Liabilities 4,080 ৳ 46.2% 3,565৳ 45.8%
Common Stock Par 137 1.6% 137 1.8%
Retained Earnings 4,501 50.1% 3,977 51.1%
Revaluation Reserves 61 0.7% 61 0.8%
Other Appropriated 1 0.01% 1 0.1%
Reserves
Unappropriated 49 0.6% 49 0.6%
Reserves
Total Stockholders’ 4,749 53.8% 4,225 54.2%
Equity
Total Liabilities and 8,829 ৳ 100.0% 7,790৳ 100.0%
15
vertical analysis
2019 2018
Current Assets 6,214 ৳ 68.2% 7,517 ৳ 85.1%
Plant assets (Net) 2,899 31.8% 1,312 14.9%
Total Assets 9,113 ৳ 100.0% 8,829 100.0%

Liabilities
Current Liabilities 2,650 ৳ 29.1% 3,732 ৳ 42.3%
Long term liabilities 1,474 16.2% 348 3.9%
Total Liabilities 4,124 ৳ 45.3% 4,080 ৳ 46.2%
Reserves
Reserves
Total Stockholders’ 4,989 ৳ 54.7% 4,749 53.8%
Equity
Total Liabilities and 9,113 ৳ 100.0% 8,829 ৳ 100.0%
16
Vertical analysis
2020 2019
Current Assets 3,732 ৳ 56.3% 6,214 ৳ 68.2%
Plant assets (Net) 2,902 43.7% 2,899 31.8%
Total Assets 6,634 ৳ 100.0% 9,113 ৳ 100.0%

Liabilities
Current Liabilities 1,850 27.9% 2,650 ৳ 29.1%
Long term liabilities 1,089 16.4% 1,474 16.2%
Reserves
Reserves
Total Stockholders’ 3,695 55.7% 4,989 ৳ 54.7%
Equity

17
Vertical analysis
2021 2020
Current Assets 3,657 ৳ 56.9% 3,732 ৳ 56.3%
Plant assets (Net) 2,783 43.2% 2,902 43.7%
Total Assets 6,440 ৳ 100.0% 6,634 ৳ 100.0%
Liabilities
Current Liabilities 1,925 29.9% 1,850 27.9%
Long term liabilities 1,063 16.5% 1,089 16.4%
Common Stock Par 137 ৳ 2.1% 137 2.1%
Reserves
Reserves
Total Stockholders’ 3,452 53.6% 3,695 55.7%
Equity
Horizontal Analysis of Income Statement of Bata Shoe Company Ltd.
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Condensed Income Statement
Increase or (Decrease) during
Particulars 2018 2017 2018
Amount Percentage
Sales/Revenue 9521 9041 480 5.31%
Cost of Goods Sold (COGS) incl. D&A 5503 5191 312 6.01%
COGS excluding D&A 5353 5041 312 6.19%
Depreciation & Amortization Expense 150 151 -1 -0.66%
Depreciation 150 151 -1 -0.66%

Gross Income 4019 3849 170 4.42%
SG&A Expense 2621 2262 359 15.87%
Other SG&A 2621 2262 359 15.87%
EBIT 1397 1587 -190 -11.97%
Unusual Expense - - - -
Non-Operating Income/Expense -8 -13 5 -38.46%
Non-Operating Interest Income 25 21 4 19.05%
Interest Expense 8 7 1 14.29%
Gross Interest Expense 8 7 1 14.29%
Pretax Income 1406 1588 -182 -11.46%
Income Tax 411 442 -31 -7.01%
Income Tax - Current Domestic 450 447 3 0.67%
Income Tax - Deferred Domestic -39 -5 -34 680.00%
Consolidated Net Income 994 1146 -152 -13.26%
Net Income 994 1146 -152 -13.26%
Horizontal Analysis

Horizontal Analysis
Particulars 2019 2018 Increase or (Decrease) during 2019

Amount Percentage 19
Sales/Revenue 8573 9521 -948 -9.96%
Cost of Goods Sold (COGS) 5443 5503 -60 -1.09%
incl. D&A
Horizontal Analysis
20
Particulars 2020 2019 Increase or (Decrease) during
2020
Amount Percentage
Sales/Revenue 5085 8573 -3488 -40.69%
Cost of Goods Sold (COGS) incl. 4494 5443 -949 -17.44%
D&A
COGS excluding D&A 3755 4757 -1002 -21.06%
Depreciation & Amortization 740 687 53 7.71%
Expense
Depreciation 740 687 53 7.71%
Gross Income 590 3130 -2540 -81.15%
SG&A Expense 2006 2134 -128 -6.00%
Other SG&A 2006 2134 -128 -6.00%
EBIT - 997 0 0
Unusual Expense 5 - - -
Non-Operating Income/Expense -22 -39 17 -43.59%
Interest Expense 170 177 -7 -3.95%
Gross Interest Expense 170 177 -7 -3.95%
Pretax Income -1594 792 -2386 -301.26%
Income Tax -269 298 -567 -190.27%
Income Tax - Current Domestic 57 345 -288 -83.48%
Income Tax - Deferred Domestic -326 -47 -279 593.62%
Consolidated Net Income -1325 494 -1819 -368.22%
Net Income -1325 494 -1819 -368.22%

Horizontal Analysis
21
Particulars 2021 2020 Increase or (Decrease) during
2021
Amount Percentage
Sales/Revenue 7745 5085 2660 52.31%
Cost of Goods Sold (COGS) incl. D&A 5597 4494 1103 24.54%
COGS excluding D&A 4895 3755 1140 30.36%
Depreciation & Amortization Expense 702 740 -38 -5.14%
Depreciation 702 740 -38 -5.14%
Gross Income 2148 590 1558 264.07%
SG&A Expense 1966 2006 -40 -1.99%
Other SG&A 1966 2006 -40 -1.99%
EBIT 182 - 182 -
Unusual Expense 0 5 -5 -100.00%
Non-Operating Income/Expense 6 -22 28 -127.27%
Interest Expense 160 170 -10 -5.88%
Gross Interest Expense 160 170 -10 -5.88%
Pretax Income 48 -1594 1642 -103.01%
Income Tax 117 -269 386 -143.49%
Income Tax - Current Domestic 125 57 68 119.30%
Income Tax - Deferred Domestic -8 -326 318 -97.55%
Consolidated Net Income -68 -1325 1257 -94.87%
Net Income -68 -1325 1257 -94.87%
Vertical analysis of Income Statement of Bata Shoe Company Ltd.

22
Vertical Analysis of Income Statement
Particulars 2018 2017
Amount Percent Amount Percent

Sales/Revenue 9521 100.00% 9041 100.00%
Cost of Goods Sold (COGS) incl. D&A 5503 57.80% 5191 57.42%
COGS excluding D&A 5353 56.22% 5041 55.76%
Depreciation & Amortization Expense 150 1.58% 151 1.67%
Depreciation 150 1.58% 151 1.67%
Gross Income 4019 42.21% 3849 42.57%
SG&A Expense 2621 27.53% 2262 25.02%
Other SG&A 2621 27.53% 2262 25.02%
EBIT 1397 14.67% 1587 17.55%
Non-Operating Income/Expense -8 -0.08% -13 -0.14%
Non-Operating Interest Income 25 0.26% 21 0.23%
Interest Expense 8 0.08% 7 0.08%
Gross Interest Expense 8 0.08% 7 0.08%
Pretax Income 1406 14.77% 1588 17.56%
Income Tax 411 4.32% 442 4.89%
Income Tax - Current Domestic 450 4.73% 447 4.94%
Income Tax - Deferred Domestic -39 -0.41% -5 -0.06%
Consolidated Net Income 994 10.44% 1146 12.68%
Net Income 994 10.44% 1146 12.68%
23

Sales/Revenue 8573 100.00% 9521 100.00%
Depreciation 687 8.01% 150 1.58%
Gross Income 3130 36.51% 4019 42.21%
SG&A Expense 2134 24.89% 2621 27.53%
Other SG&A 2134 24.89% 2621 27.53%
EBIT 997 11.63% 1397 14.67%
Pretax Income 792 9.24% 1406 14.77%
Income Tax 298 3.48% 411 4.32%
Consolidated Net Income 494 5.76% 994 10.44%
Net Income 494 5.76% 994 10.44%
24

Sales/Revenue 5085 100.00% 8573 100.00%
Depreciation 740 14.55% 687 8.01%
Gross Income 590 11.60% 3130 36.51%
SG&A Expense 2006 39.45% 2134 24.89%
Other SG&A 2006 39.45% 2134 24.89%
EBIT - #VALUE! 997 11.63%
Unusual Expense 5 0.10% - -
Pretax Income -1594 -31.35% 792 9.24%
Income Tax -269 -5.29% 298 3.48%
Consolidated Net Income -1325 -26.06% 494 5.76%
Net Income -1325 -26.06% 494 5.76%
25

Sales/Revenue 7745 100.00% 5085 100.00%
Depreciation 702 9.06% 740 14.55%
Gross Income 2148 27.73% 590 11.60%
SG&A Expense 1966 25.38% 2006 39.45%
Other SG&A 1966 25.38% 2006 39.45%
EBIT 182 2.35% - #VALUE!
Unusual Expense 0 0.00% 5 0.10%
Non-Operating Income/Expense 6 0.08% -22 -0.43%
Pretax Income 48 0.62% -1594 -31.35%
Income Tax 117 1.51% -269 -5.29%
Consolidated Net Income -68 -0.88% -1325 -26.06%
Net Income -68 -0.88% -1325 -26.06%
Liquidity Ratios
1.Current Ratio:
The current ratio, also known as the working capital ratio, measures the capability of a business to meet
its short-term obligations that are due within a year. The ratio considers the weight of total current
26 assets
versus total current liabilities.
Current ratio
2018 2017 Change in Current ratio from
2017 to 2018:
Current ratio = Current ratio =
= times = 2.01 times No Change
Comment
Therefore, Bata Sho company (Bangladesh)Ltd. In 2017 collected its current ratio is 2.01 and 2018 is
also same. There has no change.

2018 to 2019:
= times = 2.01 times Increase 0.33 times.
Comment
Bata Company's current ratio increased by approximately 0.33 times from 2018 to 2019. Specifically,
the current ratio increased from 2.01 in 2018 to 2.34 in 2019.
This increase in current ratio is generally a positive sign for the company as it indicates that the
company has improved its ability to meet its short-term financial obligations. With a current ratio of
2.34, Bata Company is in a better position to pay its current liabilities using its current assets. However,
it's important to note that the current ratio alone does not provide a complete picture of a company's
financial health. Other financial ratios and metrics, such as debt-to-equity ratio, operating cash flow,
and profitability ratios, should also be considered to fully assess the company's financial performance.
Current ratio

2019 to 2020:
Decrease 0.32 times. 27
= times = times
Comment
The current ratio is a measure of a company's ability to pay its short-term obligations using its current
assets. A higher current ratio is generally considered better as it indicates that a company is more capable
of meeting its short-term financial obligations. In the case of Bata company, the current ratio decreased
from 2.34 in 2019 to 2.02 in 2020. This decrease of 0.32 times indicates that the company's ability to meet
its short-term financial obligations decreased during that period. A declining current ratio could be a cause
for concern, as it may indicate that the company's liquidity position is weakening. However, it is important
to note that the current ratio is just one financial ratio, and it should be analyzed in conjunction with other
financial metrics to gain a complete understanding of the company's financial health. Therefore, further
analysis is required to determine whether the decrease in Bata's current ratio is a sign of financial distress
or if it is a normal fluctuation due to the nature of the company's business or economic conditions.

2020 to 2021:
=times = times Decrease 0.12 times.
Comment
The current ratio is a measure of a company's ability to pay its short-term obligations using its current
assets. A higher current ratio is generally considered better as it indicates that a company is more capable
of meeting its short-term financial obligations. In the case of Bata company, the current ratio decreased
from 2.02 in 2020 to 1.90 in 2020. This decrease of 0.12 times indicates that the company's ability to meet
its short-term financial obligations decreased during that period. A declining current ratio could be a cause
for concern, as it may indicate that the company's liquidity position is weakening. However, it is important
to note that the current ratio is just one financial ratio, and it should be analyzed in conjunction with other
financial metrics to gain a complete understanding of the company's financial health. Therefore, further
analysis is required to determine whether the decrease in Bata's current ratio is a sign of financial distress
or if it is a normal fluctuation due to the nature of the company's business or economic conditions
Current Ratio of Bata Shoe Company Ltd from 2017 to 2021:
28
Year Ratio
2017 2.01
2018 2.01 Current Ratio
2019 2.34
2.5 2.34
2.01 2.01 2.02
2020 2.02 2
1.9
1.5
2021 1.90
1
0.5
0
2017 2018 2019 2020 2021
The current ratio is a financial ratio that measures a company's ability to pay its short-term
liabilities using its current assets. A current ratio of 2.0 or higher is generally considered to be a
good indicator that a company has enough current assets to cover its current liabilities. Based on
the information provided, Bata companies had a current ratio of 2.01 in both 2017 and 2018,
which is a good sign that the company had enough current assets to cover its current liabilities
during those years. In 2019, the current ratio improved to 2.34, indicating that the company had
even more current assets relative to its current liabilities. However, in 2020 and 2021, the current
ratio declined to 2.02 and 1.90, respectively. While a current ratio of 2.0 is still considered to be
relatively healthy, the downward trend over the past two years may suggest that the company's
ability to pay its short-term liabilities using its current assets has weakened. Overall, the trend in
Bata companies' current ratio suggests that while the company had a strong ability to cover its
short-term liabilities in the past, there may be some cause for concern regarding its current
financial health. Further analysis of the company's financial statements and other factors would
be needed to fully assess its financial health.
29
2.Acid Test Ratio
The acid-test Ratio, shows if a company has, or can get, enough cash to pay its immediate liabilities,
such as short-term debt.
Acid-Test Ratio =
2018 2017 Change in Acid test ratio

from 2017 to 2018:
Acid-Test Ratio = Acid-Test Ratio =
=1.00 =0.95 increase 0.05
Comment
For 2017, Bata Shoe Company’s Acid Test Ratio is 0.95. It means the company has 0.95 times
quick assets over current liabilities. For 2018, Acid test ratio is 1.00. It means the company has
1.00 times quick assets over current liabilities.
As acid test ratio is less than 1 for both years, the company is not able to fully pay off its current
liabilities with quick assets in the short run. From the upper table we can say that, in 2018 the
company’s short-term repayment capacity has increased by 0.05 from 2017, which indicates the
weakness of the company. It is not a good sign for the company.

Acid-Test Ratio = Acid-TestRatio= from 2018 to 2019:
=1.08 =1.00
Increase .08
Comment
For 2018, Bata shoe company has an acid test ratio of 1.00. It means the company has 1.00
times quick assets over current liabilities. For 2019, Its acid test ratio is 1.08. It means the
company has 1.08 times quick assets over current liabilities.
liabilities with quick assets in the short run. Which is a negative side for the company. From the
analysis of these two years, we see the company’s ability to pay short term debt in 2019 has
increased a little, then 2018.that is 0.08
30
Acid-Test Ratio =
2020 2019 Change in Acid test

Acid-Test Ratio = ratio from 2019 to 2020:
=0.43 Acid-Test Ratio = =
=1.08 Decrease 0.65
=0.16:1
comment
For 2019, Bata shoe company has an acid test ratio of 1.08. It means the company has 1.08 times
quick assets over current liabilities. For 2020, Its acid test ratio is 0.43. It means the company has
0.43 times quick assets over current liabilities.
liabilities with quick assets in the short run. As we can see acid test ratio of the bata company has
decreased from 1.08 to 0.43 which is very less for the company to current liabilities. This is not good at
all for the company.

from 2020 to 2021:
Acid-Test Ratio ==0.45 Acid-Test Ratio ==0.43
Increase 0.02
Comment
For 2020, Bata shoe company has an acid test ratio of 0.43. It means the company has 0.43
times quick assets over current liabilities. For 2021, Its acid test ratio is 0.45. It means the
company has 0.45 times quick assets over current liabilities.
liabilities with quick assets in the short run. As we can see acid test ratio of the bata company has
increased from 0.43 to 0.45 which is a positive sign for the company.
31
Acid Test Ratio of Bata shoe company from 2017 to 2021:
Year Acid test Ratio

2017 0.95
2018 1.00
2019 1.08
2020 0.43
2021 0.45
Acid test Ratio

1.2
1.08
1
1 0.95
0.8
0.6
0.43 0.45
0.4
0.2
0
2017 2018 2019 2020 2021
From the analysis of 5 years (2017-1021) acid test ratio of the Bata shoe company we find that,
since 2017 to 2021 the company’s acid test ratio is less than 1. It means the company do not have
enough liquid assets to pay their current liabilities should be treated with caution. We also find
that the acid test ratio of the company is very much lower which means the company’s current
assets are highly dependent on inventory.
32
Efficiency Ratio
1.Accounts Receivables Turnover
An accounting measure used to quantify how efficiently a company is in collecting
receivables from its clients.
Accounts Receivable Turnover
2018 2017 Change in Accounts

Receivable Turnover from
Accounts Receivable Turnover Accounts Receivable Turnover = 2017 to 2018:
= = 7.15 times
= 4.67 times Decrease 2.48 times.
Comment
Therefore, Bata Shoe Co. (Bangladesh) Ltd. In 2017 collected its average accounts receivable
approximately 7.15 times over the fiscal year ended December 31, 2017
approximately 4.67 times over the fiscal year ended December 31, 2018.
Findings: Compare to 2017 to 2018 accounts receivable turnover is decrease. So, we can say that
this is bad sign. The accounts receivable turnover ratio is used in business accounting to quantify
how well companies are managing the credit that they extend to their customers by evaluating
how long it takes to collect the outstanding debt throughout the accounting period.
2019 2018 Change in Accounts

Accounts Receivable Turnover Accounts Receivable Turnover Receivable Turnover from
= 2018 to 2019:
=
= 6.48 times
= 2.01 times Increase 4.47 times.
Comment
Findings: Compare to 2018 to 2019 accounts receivable turnover is increase. This is good sign.
The accounts receivable turnover ratio is used in business accounting to quantify how well
companies are managing the credit that they extend to their customers by evaluating how long it
takes to collect the outstanding debt throughout the accounting period.
33
Accounts Receivable Turnover
Change in Accounts
2020 2019 Receivable Turnover from
2019 to 2020:
Accounts Receivable Turnover = Accounts Receivable Turnover = Increase 15.25
= 21.73 = 6.48 times
times
Comment
Findings: Compare to 2019 to 2020 accounts receivable turnover is increase. This is good sign. The
accounts receivable turnover ratio is used in business accounting to quantify how well companies are
managing the credit that they extend to their customers by evaluating how long it takes to collect the
outstanding debt throughout the accounting period.
2020
2021 Change in Accounts
Receivable Turnover from
Accounts Receivable Turnover =
Accounts Receivable Turnover = 2020 to 2021:
= 21.73 times
= 131.27 times
Increase 109.54 times.
Comment
Findings: Compare to 2017 to 2018 accounts receivable turnover is increase. This is good sign. The
accounts receivable turnover ratio is used in business accounting to quantify how well companies are
managing the credit that they extend to their customers by evaluating how long it takes to collect the
outstanding debt throughout the accounting period.
34
Accounts Receivables turnover of Bata Shoe Company from
2017 to 2021:
Year Ratio
2017 7.15 Accounts Receivable Turnover
2018 4.67 150 131.27
2019 6.48 100
2020 21.73 50 21.73
7.15 4.67 6.48
2021 131.27 0
2017 2018 2019 2020 2021
35
2.Inventory Turnover
Inventory turnover is a financial ratio showing how many times a company turned over its inventory
relative to its cost of goods sold (COGS) in a given period.
Inventory Turnover
2018 2017 Change in Inventory

turnover from 2017 to 2018:
Inventory turnover = Inventory turnover =
= 1.519 = 1.664 Decrease 0.145
Comment
Comparing the inventory turnover ratio of 2017 and 2018, we can see that the ratio decreased from
1.664 to 1.519. This means that the company sold its inventory less frequently in 2018 compared to
2017.

= 1.527 = 1.519 Increase 0.008
Comment
Comparing the inventory turnover ratio of 2018 and 2019, we can see that the ratio increased from
1.519 to 1.527. This means that the company sold its inventory slightly more frequently in 2019
compared to 2018.
While the increase is small, it is still a positive trend as it indicates that the company is managing its
inventory more efficiently or experiencing an increase in demand for its products.
36
Inventory Turnover

= 1.432 = 1.527 Decrease 0.095
Comment
The inventory turnover for 2019 was 1.527, while for 2020, it decreased to 1.432.
Comparing the two years, the decrease in the inventory turnover ratio from 2019 to 2020 may
indicate that Bata Company experienced a slower rate of inventory turnover during that period.

= 1.960 = 1.432 Increase 0.528
Comment
In 2020, the inventory turnover ratio was 1.432. This indicates that Bata Company sold and replaced its
inventory approximately 1.432 times during that year.
In 2021, the inventory turnover ratio increased to 1.960. This indicates an improvement in Bata Company's
inventory management efficiency compared to the previous year. The higher turnover ratio suggests that the
company was able to sell and replace its inventory more frequently in 2021.
Overall, the increase in the inventory turnover ratio from 2020 to 2021 suggests that Bata Company has
been more effective in managing its inventory.
37
Inventory Turnover Ratio of Bata Shoe Company from
2017 to 2021:
Year Ratio
Inventory Turnover Ratio
2017 1.664
2018 1.519 2.5
1.96
2019 1.527 2 1.664 1.519 1.527 1.432
1.5
2020 1.432
1
2021 1.960 0.5
0
2017 2018 2019 2020 2021
Looking at the inventory turnover ratio for the past five years (2017-2021), we can see that
there has been some variation in the ratio. In 2017, the ratio was 1.664, which means that the
company sold its inventory 1.664 times during the year. This was followed by a decrease in the
inventory turnover ratio in 2018, where the ratio was 1.519. This decrease could indicate that
the company sold its inventory less frequently, which could be due to various reasons, such as
overproduction, poor inventory management, or declining demand. The inventory turnover
ratio increased slightly in 2019 to 1.527, but it was still lower than the ratio in 2017. In 2020,
the ratio decreased further to 1.432, which could indicate that the company experienced lower
demand for its products or faced challenges in managing its inventory effectively due to the
COVID-19 pandemic. However, in 2021, the inventory turnover ratio increased significantly to
1.960,
which could indicate that the company has been able to improve its inventory management
processes, reduce carrying costs, or experience increased demand for its products.
Overall, the inventory turnover ratio can provide insights into a company's inventory
management efficiency and sales performance. However, it's important to investigate the
reasons behind changes in the ratio to determine if they are due to sustainable improvements
or short-term factors.
38
3.Asset Turnover
The asset turnover ratio measures the efficiency of a company's assets in generating revenue or sales
Asset turnover
2018 2017 Change in Asset turnover from

2017 to 2018:
Asset turnover = Asset turnover =
= = Decrease 0.01 times.
Comment
In 2017 the asset turnover is 1.16% that means how many sales were generated from every dollar of
company assets. In 2018 the ratio is decreasing 0.01% that means the sales is decreasing in less portion
according to total asset.

2018 to 2019:
= = Decrease 0.19 times.
Comment
According to 2018 to 2019 the asset turnover is decreasing also 0.19% which indicate a great decreasing
net sale of this company.
39
Asset turnover

2019 t0 2020:
= = D+ecrease 0.31 times.
Comment
Looking at the data, we can see a decline in Bata Company's asset turnover ratio from 2019 to 2020. In
2019, the ratio was 0.96, indicating that the company generated approximately 96% of its total assets'
value in sales revenue. However, in 2020, the ratio dropped to 0.65, implying that the company generated
only about 65% of its assets' value in sales revenue.

2020 to 2021:
= = Increase 0.53 times
Comment
In 2020, Bata Company had an asset turnover ratio of 0.65. This suggests that the company generated sales
revenue equivalent to only 65% of its total assets. A lower asset turnover ratio can be an indication of
inefficiency in asset utilization, which could be caused by factors such as decreased sales volume or an
increased asset base.
However, in 2021, Bata Company's asset turnover ratio improved significantly to 1.18. This indicates that
the company generated sales revenue equivalent to 118% of its assets during that year. This increase
suggests that the company became more efficient in utilizing its assets to generate sales.
40
Asset Turnover Ratio of Bata Shoe Company Ltd. from 2017 to 2021:
Asset Turnover
Year Asset Turnover
2017 1.16
1.4
1.16 1.15 1.18
2018 1.15 1.2
0.96
1
2019 0.96 0.8 0.65
0.6
2020 0.65 0.4
0.2
0
2021 1.18 2017 2018 2019 2020 2021
Bata Company's asset turnover ratio has fluctuated over the years. In 2017 and 2018, the ratio
was relatively stable at around 1.15, indicating that the company was generating sales revenue
roughly equal to its assets during those years.
In 2019, the asset turnover ratio decreased to 0.96, suggesting a decline in the company's
efficiency in generating sales from its assets. This could be due to various factors such as lower
sales volume, increased asset base, or changes in the company's operations.
The asset turnover ratio further dropped in 2020 to 0.65, indicating a significant decrease in the
company's ability to generate sales from its assets. A sharp decline in this ratio could signal
potential issues with the company's operations, asset management, or market conditions.
However, in 2021, the asset turnover ratio rebounded to 1.18, surpassing the previous years'
ratios. This increase suggests an improvement in the company's efficiency in generating sales
from its assets, potentially through better utilization of resources or increased sales volume.
41
Profitability Ratio
1. Profit Margin Ratio
The net profit margin ratio shows the percentage of sales revenue a company keeps after covering all
Profit
of its costs including interest and Margin
taxes. It isRatio
one of of
fiveBata Shoe Company
calculations Ltd profitability.
used to measure
profit margin ratio =
2018 2017 Change in profit margin ratio

from 2017 to 2018:
profit margin ratio = profit margin ratio =
= times = .426 times
Comment
Based on the information provided, we can see that Bata company's profit margin ratio increased slightly
from 0.422 in 2017 to 0.426 in 2018. This indicates that the company was able to generate more profit
for each dollar of sales in 2018 compared to the previous year. However, it's difficult to draw any
definitive conclusions about the financial health of the company based on this information alone. It's
important to look at other financial metrics and factors that could be influencing the company's
profitability, such as changes in revenue, expenses, and market conditions. Additionally, it would be
helpful to compare Bata's profit margin ratio to that of its competitors and industry benchmarks to get a
better sense of how the company is performing relative to its peers.

from 2018 to 2019:
= times = times
Comments
Based on the information provided, it seems that Bata shoe company's profit margin ratio has decreased
from 2018 to 2019. A higher profit margin ratio indicates that the company is earning more profit
relative to its revenue. A decrease in the profit margin ratio could indicate that the company is
experiencing lower profitability, which could be due to various reasons such as increased expenses,
lower revenue, or increased competition. However, without additional information, it is difficult to
determine the exact cause of the decrease in Bata's profit margin ratio.
Therefore, Bata shoe company should investigate the reasons behind the decrease in their profit margin
42
ratio and take appropriate steps to improve their profitability.
profit margin ratio =

from 2019 to 2020:
= times = times
Comment
Based on the information provided, we can see that Bata shoe company's profit margin ratio
decreased from 0.365 in 2019 to 0.116 in 2020. A profit margin ratio of 0.365 indicates that for
every dollar of sales, the company earned a profit of 36.5 cents in 2019, while a profit margin
ratio of 0.116 indicates that for every dollar of sales, the company earned a profit of 11.6 cents in
2020.A decrease in profit margin ratio means that the company's profitability has declined. This
could be due to various factors such as increased costs, decreased sales, or changes in market
conditions. Without more information on the specific circumstances surrounding the change in
profit margin ratio, it is difficult to make a definitive comment on Bata shoe company's situation.
However, a decrease in profit margin ratio is generally seen as a negative sign, as it indicates that
the company is less profitable than before. It may be necessary for the company to re-evaluate its
business strategy and take measures to improve profitability in the future.

from 2020 to 2021:
= times = times
Comment
Based on the information provided, we can see that Bata shoe company's profit margin ratio
increased from 0.116 in 2020 to 0.277 in 2021. A profit margin ratio of 0.116 indicates that for
every dollar of sales, the company earned a profit of 11.6 cents in 2020, while a profit margin
ratio of 0.277 indicates that for every dollar of sales, the company earned a profit of 27.7 cents in
2021.An increase in profit margin ratio is generally seen as a positive sign, as it indicates that the
43
company's profitability has improved. This improvement could be due to various factors such as
cost-cutting measures, increased sales, or changes in market conditions. However, without more
information on the specific circumstances surrounding the change in profit margin ratio, it is
difficult to make a definitive comment on Bata shoe company's situation. Nonetheless, an
increase in profit margin ratio is a good indication that the company's financial health has
improved compared to the previous year. Overall, it is important for companies to maintain a
healthy profit margin ratio in order to ensure long-term sustainability and growth. A strong profit
margin ratio can indicate that the company is efficiently managing its costs and generating
enough revenue to cover its expenses, which can be a positive sign for investors and other
stakeholders.
Profit Margin Ratio of Bata

Shoe Company Ltd from 2017 Profit Margin Ratio to
2021:
Year Ratio 0.5 0.426 0.422
0.4 0.365
2017 0.426 times 0.277
0.3 The
2018 0.422 times. 0.2 0.116
0.1
2019 0.365 times.
0
2017 2018 2019 2020 2021
2020 0.116 times.
2021 0.277 times. profit margin ratio of Bata companies shows the
percentage of profit earned by the company relative to
its revenue. A higher profit margin ratio indicates that
the company is generating more profit per dollar of
revenue. Based on the given data, we can see that Bata
companies' profit margin ratio was consistently high in 2017 and 2018, but then it started to
decrease in 2019 and 2020. This suggests that the company may have been facing challenges in
generating profit during those years, possibly due to factors such as increased competition, rising
costs, or economic downturns. However, in 2021, the profit margin ratio increased compared to
2020, which could be a positive sign for the company. It is important to note that the increase in
the profit margin ratio from 2020 to 2021 may be due to a variety of factors, such as cost-cutting
measures, increased sales, or changes in the company's product mix. Overall, while the
downward trend in profit margin ratio from 2017 to 2020 is a cause for concern, the increase in
2021 is a positive sign for Bata companies. Further analysis is needed to determine the
underlying reasons for these trends and to evaluate the long-term sustainability of the company's
profitability.
44
Return on assets is a profitability ratio that provides how much profit a company can
generate from its assets.
Return on Assets =
2018 2017 Change in Return on Assets

from 2017 to 2018:
Return on Assets = Return on Assets =
= 11.96% = 15.98% Decrease 4.02%
Comment
Bata Shoe Co. (Bangladesh) Ltd in 2017 returned 0.1598 for each $1 invested. Most industries consider a
5% to 10% return good. So, we can say that the performance has been good this year.
Findings: The declining ROA ratio in 2017 to 2018 for Bata Shoe Co. (Bangladesh) Ltd. is a bad sign of
liquidity for the company
though a good ROA ratio lies near about 5% to 10%. So, it is very vulnerable for the company.
Bata Shoe Co. (Bangladesh) Ltd returned 0.1196 for each $1 invested. Most industries consider a 5% to
10% return good.

from 2018 to 2019:
= 5.51% = 11.96% Decrease 6.45%
45
Findings: The declining ROA ratio in 2018 to 2019 for Bata Shoe Co. (Bangladesh) Ltd. This is a bad
sign of liquidity for the company though a good ROA ratio lies near about 5% to 10%. So, it is very
2. Return
vulnerable oncompany.
for the Asset
Return on assets is a profitability ratio that provides how much profit a company can
generate from its assets.
Return on Assets =

from 2017 to 2018:
= 11.96% = 15.98% Decrease 4.02%
Comment
Findings: The declining ROA ratio in 2017 to 2018 for Bata Shoe Co. (Bangladesh) Ltd. is a bad sign of
liquidity for the company
though a good ROA ratio lies near about 5% to 10%. So, it is very vulnerable for the company.
Bata Shoe Co. (Bangladesh) Ltd returned 0.1196 for each $1 invested. Most industries consider a 5% to
10% return good.

from 2018 to 2019:
= 5.51% = 11.96% Decrease 6.45%
Comment
Findings: The declining ROA ratio in 2018 to 2019 for Bata Shoe Co. (Bangladesh) Ltd. This is a bad
sign of liquidity for the company though a good ROA ratio lies near about 5% to 10%. So, it is very
vulnerable for the company.
16
Return on Assets =
2020 2019 Change in Return on

Assets from 2019 to 2020:
= (16.83%) = 5.51% loss
Comment
Bata Shoe Co. (Bangladesh) Ltd in 2020 returned -0.1683 for each $1 invested. Most industries consider a
5% to 10% return good. So, we can say that the performance has been very bad this year because of corona
pandemic.
Findings: The declining ROA ratio in 2019 to 2020 for Bata Shoe Co. (Bangladesh) Ltd. This is a bad sign
of liquidity for the company though a good ROA ratio lies near about 5% to 10%. So, it is very vulnerable
for the company.
2021 2020 Change in Return on

Assets from 2020 to 2021:
Return on Assets = = Return on Assets =
= (1.04%) = (16.83%) loss
Comment
5% to 10% return good. So, we can say that the performance has been very bad this year because of
corona pandemic.
5% to 10% return good. So, we can say that the performance has been bad this year because of corona
pandemic.
Findings: The increase but less percentage ROA ratio for Bata Shoe Co. (Bangladesh) Ltd. This is a bad
sign of liquidity for the company through a good ROA ratio lies near about 5% to 10%. So, it is very
vulnerable for the company.
13
Return on Assets of Bata Shoe Company From 2017 to 2021:
Year Ratio
Return on Assets
2017 15.95%
2018 11.96% 20.00%
15.00% 15.98%
10.00% 11.96%
2019 5.51% 5.00% 5.51%
0.00% -1.04%
2020 (16.83%) -5.00% 2017 2018 2019 2020 2021
-10.00%
2021 (1.04%) -15.00% -16.83%
-20.00%
Looking at the ROA percentages for Bata company from 2017 to 2021, we can observe the
following:
In 2017, Bata had a ROA of 15.95%, indicating that it was able to generate a significant return
on its assets. This suggests that the company was efficient in utilizing its assets to generate
profits.
In 2018, the ROA decreased to 11.96%. While still a relatively healthy figure, it indicates a slight
decline in the company's ability to generate profits compared to the previous year.
In 2019, the ROA further declined to 5.51%. This suggests that Bata's profitability decreased
significantly, indicating potential challenges in utilizing its assets effectively to generate profits.
The year 2020 saw a negative ROA of -16.83%. This indicates that Bata incurred losses during
that year, which could be attributed to various factors such as economic downturns, operational
inefficiencies, or exceptional circumstances.
In 2021, the negative trend continued with a ROA of -1.04%. Although the company managed to
improve from the previous year, it still indicates that Bata's assets were not effectively generating
profits.
Overall, the ROA trend for Bata company shows a decline in profitability and a struggle in
effectively utilizing assets to generate returns in recent years
14
3. Return on Equity
The Return on Equity ratio essentially measures the rate of return that the owners of common stock of a company re
Return on Equity
2018 2017 Change in Return on Equity

from 2017 to 2018:
Return on Equity = Asset turnover ratio =
= 22.15% = 29.45% Increase 7.3%
Comment
A ROE of 29.45% in 2017 suggests that Bata Company generated a profit of 29.45% for every dollar of
shareholders' equity invested during that year. This is generally considered a healthy and favorable ROE,
indicating that Bata Company effectively utilized its shareholders' investments to generate profits.
On the other hand, a ROE of 22.15% in 2018 indicates a slight decline in profitability compared to the previous
year. While still a respectable ROE, the decrease suggests that Bata Company was slightly less efficient in
generating profits relative to shareholders' equity during that year.
2019 2018 Change in Return on Equity from

2018 to 2019:
Asset turnover ratio = Asset turnover ratio =
= 10.14% = 22.15% Decrease 12.01%
Comment
Return on Equity is a profitability ratio that measure the ability of a firm to generate profit from its
stockholder’s investment in the company. Return on Equity of Bata Shoes company is decrease from 2018
to 2019 that is negative sign for the company.
19
Return on Equity
2020 2019 Change in Return on Equity from

2019 t0 2020:
= (30.51%) = 10.14% Decrease to (20.37)
Comment
A ROE of 10.14% in 2019 suggests that Bata Company generated a profit of 10.14% for every dollar of
shareholders' equity invested during that year. A (30.51%) ROE indicates that Bata Company experienced
a negative return on equity in 2020. This implies that, during that year, the company had a net loss or its
net income was insufficient to cover the shareholder equity. A negative ROE is generally considered
unfavorable as it suggests poor financial performance and inefficiency in utilizing shareholders'
investments.
2021 2020 Change in Return on Equity

from 2020 to 2021:
= (1.9%) = (30.51%)
Comment
In 2020, the ROE was -30.51%. A negative ROE implies that the company had a net loss for the year. This
could be a cause for concern as it indicates that the company's net income was insufficient to generate a
positive return for shareholders. It suggests that the company's profitability was significantly impacted,
possibly due to various factors such as increased expenses, declining revenues, or poor financial
management.
In 2021, the ROE improved to -1.9%. Although the ROE remained negative, the improvement from the
previous year suggests some progress in the company's profitability. However, a negative ROE still
indicates that the company did not generate sufficient earnings to provide a positive return for its
shareholders.
20
Return on Equity of Bata Shoe Company Ltd. from 2017 to 2021:
Year Ratio
2017 29.45%
2018 22.15% Return on Equity
2019 10.14%
40.00%
2020 (30.51% 30.00% 29.45%
20.00% 22.15%
2021 (1.9%) 10.00% 10.14%
0.00% 0.00% -1.90%
2017 2018 2019 2020 2021
-10.00%
Looking at the trend in Bata Company's ROE figures, we can observe the following:
2017 and 2018: During these years, Bata Company demonstrated a relatively high ROE,
indicating that it was efficiently utilizing its shareholders' equity and generating significant
returns.
2019: The ROE declined in 2019 but still remained positive at 10.14%. Although the decrease
suggests a slight reduction in profitability compared to the previous years, the company was still
generating returns for its shareholders.
2020 and 2021: These two years saw a significant decline in ROE, with negative values
indicating that Bata Company was not generating profits sufficient to cover the shareholders'
equity. A negative ROE is generally a cause for concern as it implies that the company is not
effectively utilizing its resources to generate profits.
The declining trend in ROE from 2019 to 2021 raises questions about Bata Company's
profitability and the efficiency of its operations during this period.
21
4. Earnings per Share
The earnings per share ratio (EPS ratio) measures the amount of a company's net income
that is theoretically available for payment to the holders of its common stock.
Earnings per Share (EPS)
2018 2017 Change in Earnings per Share

from 2017 to 2018:
Earnings per Share = Earnings per Share =
= = Decrease 11.1
Comment
According to 2017 to 2018 Eps of the company is decreasing is 11.10 that’s mean the less likely it is to
distribute some of its profits to its shareholders as dividends.

from 2018 to 2019:
= = Decrease 36.49
Comment
In 2018 the EPS ratio is 72.55 % and we saw in 2019 the ratio decreasing and came into 36.06 % which is very
low eps for a company.
4
3. Earnings per Share (EPS)

from 2019 to 2020:
= Decrease to loss
Comment
In 2019 the eps are very low but in 2020 here we saw a negative effect which indicate the company
facing a huge loss.

from 2020 to 2021:
Earnings per share = Earnings per Share =
= Decrease to Loss
Comment
In 2020 company face a huge loss because of pandemic situation but in 2021 still they face a loss and a
negative effect but the loss is too low according to 2020.
5
Earnings per Share of Bata Shoe Company Ltd. from 2017 to 2021:
Year Ratio
2017 83.65 Earning Per Share
2018 72.55
2019 36.06 100
50 83.65 72.55 36.06
2020 (96.72) 0
-4.96
2017 2018 2019 2020 2021
-50
2021 (4.96)
-100
-96.72
-150
Earnings per share (EPS) is a measure of a company's profitability, calculated by dividing

quarterly or annual income (minus dividends) by the number of outstanding stock shares.
Compare to 2017, 2018,2019,2020 and 2021 we can see that among 2017, 2018 and 2019 the
earning per share is decreasing gradually and 2020 to 2021 is shows a negative impact. A
negative EPS can indicate that a company spending more than it’s earning and losing money.
6
5. Price Earnings Ratio
The Price Earnings Ratio (P/E Ratio) is the relationship between a company’s stock price and
earnings per share (EPS). It is a popular ratio that gives investors a better sense of the value of the
company. The P/E ratio shows the expectations of the market and is the price you must pay per unit of
current earnings
Price Earnings Ratio =
2018 2017 Changes in Price Earnings

Ratio from 2017 to 2018:
Price Earnings Ratio = Price Earnings Ratio =
= 0.16 Times
= 0.19 Times Increase 0.03 times
Comment
In 2017 the price earnings ratio of Bata Shoe company Ltd is 0.16. It means that the company’s stock
price was trading at 0.16 of its earnings per share. In other words, investors are willing to pay 0.16 tk.
A P/E ratio of 0.16 is relatively low and we can say that BATA company’s stock was undervalued
compared to its earnings in 2017.
In 2018 we can see the ratio increased by 0.03 times to 0.19 times. It means in 2018 the company was
generating more earnings per share relative to its stock price than in 2017.

= 0.38 Times = 0.19 Times
Increase 0.19 times
Comment
It's important to note that a P/E ratio below 1 (as in this case) typically indicates a negative or extremely
low net income, which can occur when a company incurs losses or has minimal profits.
It appears that Bata Company had an exceptionally low P/E ratio in both 2018 and 2019. This suggests
that the market's perception of the company's earnings potential was negative during these years.
Investors were likely not willing to pay a significant premium for Bata Company's earnings, possibly
due to concerns about its financial performance or other factors.
10
Price Earnings Ratio =

= (0.14) Times = 0.38 Times
Comment
In 2019 With a P/E Ratio of 0.38, it suggests that the market valued Bata Company's earnings relatively low
compared to its stock price. A low P/E Ratio could indicate undervaluation, but it's important to consider other
factors to assess the company's financial health.
In 2020 The negative P/E Ratio of (0.14) is uncommon and indicates that Bata Company reported negative
earnings during that period. A negative P/E Ratio suggests that investors are not willing to pay a premium for the
company's earnings or that there might be significant challenges or uncertainties affecting the company's financial
performance.

= (2.76) Times = (0.14) Times
Comment
In 2020 the P/E ratio is (0.14) and in 2021 the ratio is (2.76) which indicates the company’s loss.
A negative P/E ratio is uncommon and usually indicates that the company has negative earnings
or losses. In the case of Bata Company, the negative P/E ratios suggest that the company's
earnings were negative during these periods, which raises concerns about its profitability.
11
Price Earnings Ratio of Bata Shoe Company Ltd. from 2017 to 2021:
Year Ratio
Price Earning Ratio
2017 0.16 times
2018 0.19 times

1
0.5 0.16 0.19 0.38
2019 0.38 times 0 -0.14
-0.5 2017 2018 2019 2020 2021
2020 (0.14) times -1
-1.5
-2
2021 (2.76) times -2.5
-3 -2.76
In 2017 P/E ratio of 0.16.A P/E ratio of 0.16 indicates that the market valued Bata's earnings
relatively low compared to the stock price. It suggests that investors were not willing to pay a
premium for Bata's earnings during that period.
In 2018 P/E ratio of 0.19. Similarly, to 2017, the P/E ratio of 0.19 suggests that the market still
considered Bata's earnings as relatively low compared to the stock price. This could be due to
various factors affecting the company's performance or market sentiment at the time.
In 2019 P/E ratio of 0.38. The P/E ratio increased to 0.38 in 2019, indicating a slightly higher
valuation of Bata's earnings compared to the previous years. It suggests a potential increase in
investor confidence or improved market conditions for the company.
In 2020 P/E ratio of (0.14). A negative P/E ratio of -0.14 is unusual and indicates that the
company's earnings were negative during that year. This could be due to losses or extraordinary
expenses that impacted Bata's profitability. A negative P/E ratio is generally not considered a
good sign for investors.
In 2021 P/E ratio of (2.76). Another negative P/E ratio of -2.76 suggests that Bata's earnings
were significantly negative in 2021. This could indicate ongoing challenges or a decline in the
company's financial performance.
12
6. Payout Ratio
The payout ratio is a financial metric showing the proportion of earnings a company pays its
shareholders in the form of dividends, expressed as a percentage of the company's total
earnings.
payout ratio
2018 2017 Change in payout ratio from 2017

to 2018:
Payout Ratio = Payout Ratio =
= = 39.62%
Comment
In 2017 payout ratio is 39.62% and in 2018 this ratio is decreasing and came into 19.22% that means the
company is reinvesting the bulk of its earnings into expanding operations.
2019 2018 Change in payout ratio from 2018

to 2019:
= =
Comment
According to 2018 to 2019 the company payout ratio is increasing 75.11% that means a company is
distributing a larger portion of its earnings as dividends to shareholders. This could be a positive sign for
income-seeking investors who rely on regular dividend payments for their investment income.
13
payout ratio
2020 2019 Change in payout ratio from

2019 to 2020:
= =
Comment
Here in 2019 the ratio is 94.33% but because of covid situation the company face a net loss and in 2020
the company shows a negative portion it indicates means that a company is not paying any dividends to
its shareholders or if they give dividend, they give this from it retain earnings.
2021 2020 Change in payout ratio from

2020 to 2021:
= =
OverallComment
Findings
In according to 2020 to 2021 the company have negative payout ratio but its portion is very low rather
than previous year. That’s mean company is trying to minimize their net loss and overcome from the bad
situation.
14
Payout Ratio of Bata Shoe Company from 2017 to 2021:
Year Ratio
Payout ratio
2017 39.62%
2018 19.22% 120.00%

100.00% 94.33%
2019 94.33% 80.00%
60.00%
40.00%
2020 (12.83%) 20.00%
39.62%
0.00% 19.22% -12.83% -2.51%
2017 2018 2019 2020 2021
2021 (2.51%) -20.00%
The payout ratio shows the proportion of earnings a company pays its shareholders in the form of
dividends, compare to 2017, 2018,2019,2020 and 2021 we can see that 2017,2018,2019 the
payout ratio was positive impact on BATA company and 2020 and 2021 was negative ratio. It’s
meant the company face net loss this year because of pandemic situation in the world.
15
Solvency Ratio
1. Debt to Asset Ratio
The debt-to-asset ratio shows how much of a business is owned by creditors compared with how much of the
company’s assets are owned by shareholders.
Debt to Asset Ratio =
2018 2017 Change in Debt to asset ratio

from 2017 to 2018:
Debt To Asset Ratio = Debt To Asset Ratio =
=46.21% = 45.76% Increase 0.45%
Comment
In 2017 the ratio is 45.76%. It means out of the total assets 45.76%. was financed by lending money and
other 54.24% by owner’s investment. In 2018 the ratio increased to 46.21%. It means out of total assets
46.21% was financed by lending money and other 53.79% by owners’ investment. As we can see the ratio
has increased it means the company has increased its debt capital for collecting assets.
2019 2018 Change in Debt to asset ratio

from 2018 to 2019:
Decrease 0.96%
= 45.25%
=46.21%
Comment
In 2018 the ratio is 46.21%. It means out of the total assets 46.21% was financed by lending money and
other 53.79% by owner’s investment. In 2019 the ratio decreased to 45.25%. It means out of total assets
45.25% was financed by lending money and other 54.75% by owners’ investment. From these two years
analysis we can see the company decrease its debt capital 0.45%.
16
Debt to Asset Ratio =
2020 2019 Change in Debt to asset ratio from

2019 to 2020:
Decrease 0.95%
= 44.30% = 45.25%
Comment
In 2019 the ratio is 45.25%. It means out of the total assets 45.25% was financed by lending money and other
54.75% by owner’s investment. In 2020 the ratio decreased to 44.30%. It means out of total assets 44.30% was
financed by lending money and other 54.75% by owners’ investment. In 2020 the company collects more of its
assets by equity capital rather than debt capital.
2021 2020 Change in Debt to asset ratio from

2020 to 2021:
= 44.30%
Increase 2.1%
= 46.40%
Comment
In 2020 the ratio is 44.30%. It means out of the total assets 44.30% was financed by lending money and other
55.7% by owner’s investment. In 2021 the ratio Increased to 46.40%. It means out of total assets 46.40% was
financed by lending money and other 53.6% by owners’ investment.
17
Debt to Asset Ratio of Bata Shoe Company from 2017 to 2021:
Year Ratio
2017 45.76% Debt to Asset Ratio
2018 46.21%
47.00% 46.40%
46.21%
2019 45.25% 46.00% 45.76%
45.25%
45.00% 44.30%
2020 44.30%
44.00%
2021 46.40% 43.00%
2017 2018 2019 2020 2021
From the analysis of 5 years Debt to asset ratio of Bata Shoe company ltd from 2017 to 2021 we
find the upper table and the grape. In the table we can see in 2017 the ratio of debt to asset is
45.76%. In 2018 the company increased its debt capital by 0.45%. That’s why the ratio increased
to 46.21%. In 2019 the debt to asset ratio is 45.25%. In 2020 the ratio 44.30% and in 2021 the
ratio 46.40%. we know that the ratio represents the proportion of the company’s assets that are
financed by interest bearing liabilities often called funded debt. From the analysis we can say Bata
Shoe company ltd kept their debt capital less than 50% of total assets. Which means the company
focuses more on equity financing as more than half of total financing is done by equity financing.
Debt-asset ratio of 5 years indicates that the company is in favorable position in terms of potential
risk of debt load.
18
2. Time Interested Earned Ratio
The times interest earned (TIE) ratio is a measure of a company's ability to meet its debt obligations based
on its current income.
Times interest Earned Ratio =
2018 2017 Change in Times interest

Times interest earned ratio Times interest earned ratio earned (TIE) ratio from
= = 2017 to 2018:
= 176.62 =227.85
Comment
In 2017, the time interest earned ratio was 227.85. This indicates that Bata Company had a strong ability to
cover its interest expenses during that period. A ratio of this magnitude suggests that the company generated
a significant amount of earnings relative to its interest obligations, which is generally viewed positively by
investors and creditors. In 2018, the time interest earned ratio decreased to 176.62. Although it is still a
relatively high ratio, the decline suggests a slightly reduced ability to cover interest expenses compared to the
previous year. It could be indicative of various factors, such as increased interest expenses or a decline in
earnings.

Times interest earned ratio Times interest earned ratio earned (TIE) ratio from 2018
= = to 2019:
= 176.62
= 5.74
Comment
In 2018, Bata had a time interest earned ratio of 176.62. This is an exceptionally high ratio, suggesting that
Bata's earnings were significantly more than sufficient to cover its interest expenses. It indicates a strong
financial position and a low risk of defaulting on its interest payments.
In 2019, the time interest earned ratio dropped significantly to 5.74. This decline indicates a decreased ability
of Bata to cover its interest expenses. A ratio of 5.74 still indicates that Bata's earnings were able to cover its
interest obligations, but it suggests a higher level of risk compared to the previous year. 19
Times interest Earned Ratio =

Times interest earned ratio Times interest earned ratio= earned (TIE) ratio from
= 2019 to 2020:
= (8.37) = 5.74
Comment
In 2019-time interest earned ratio of 5.74 indicates that Bata had sufficient operating income to cover its interest
expenses nearly six times over. This suggests that Bata had a comfortable margin of safety and a strong ability to
meet its interest obligations. In 2020-time interest earned ratio of -8.37 implies that Bata's operating income was
insufficient to cover its interest expenses during this period. A negative ratio indicates that the company's interest
expenses exceeded its operating income, which can be a cause for concern. It suggests that Bata faced financial
difficulties or had a significant decline in profitability during 2020.

Times interest earned ratio Times interest earned Ratio earned (TIE) ratio from 2020 to
= = 2021:
= (8.37)
= 1.306
Comment
In 2020, the ratio is -8.37. This negative value indicates that Bata's earnings were insufficient to cover its
interest expenses during that period. A negative ratio implies that the company experienced a net loss or
had extremely low profits, making it difficult to meet its interest obligations. This could be a cause for
concern as it suggests financial strain.
In 2021, the ratio improves to 1.306. This positive value indicates that Bata's earnings were able to cover
its interest payments during that year. Although the ratio is above 1, it is still relatively low, suggesting
that Bata's earnings may have only marginally exceeded its interest expenses. While an improvement
20
from the previous year, the company should aim for a higher ratio to ensure better financial stability.
Times Interest Earned Ratio of Bata Shoe Company Ltd from 2017 to 2021:
tIME INTEREST EARNED RATIO

Year Ratio 250 227.85
200
2017 227.85 176.62
150
100
2018 176.62 50
0 5.74 -8.37 1.306
-50 2017 2018 2019 2020 2021
2019 5.74
2020 (8.37)
2021 1.306
Looking at the time interest earned ratios for Bata company from 2017 to 2021, we can observe
the following trends:
In 2017, the company had a strong time interest earned ratio of 227.85, indicating that it had
ample earnings to cover its interest expenses. This is generally considered a very positive sign, as
it suggests a high level of financial stability.
The ratio decreased in 2018 to 176.62, but it still remained relatively high, indicating that the
company's earnings were still comfortably covering its interest payments.
There was a significant decline in the ratio in 2019 to 5.74. This suggests a notable reduction in
the company's ability to cover its interest expenses with its earnings. A sharp decline in the ratio
may indicate financial difficulties or a decrease in profitability.
The ratio further deteriorated in 2020 to -8.37, indicating that the company's earnings were not
sufficient to cover its interest obligations. A negative ratio implies that the company incurred
more interest expenses than it earned in that year. This is a concerning sign, as it suggests a
potential risk of default on interest payments.
In 2021, the ratio improved slightly to 1.306. While this indicates a better situation compared to
2020, the ratio is still relatively low. It suggests that the company's earnings are just enough to
cover its interest expenses, but with little margin for financial flexibility.
Overall, the trend of decreasing time interest earned ratios from 2017 to 2020 raises concerns
about Bata company's financial health and its ability to meet its interest obligations. The slight
21
improvement in 2021 is a positive sign, but it's important for the company to continue improving
its profitability and managing its debt effectively to ensure long-term sustainability.
Conclusion
“BATA shoe Company (Bangladesh) Limited” prepares financial statements every year and
apply analytical tools to analyze the condition. Applying tools like ratio analysis, the company
found out its performance like liquidity, efficiency, solvency, profitability. Through ratios, the
organization has found out its strength and weakness. Beside this, analysis also exposes its
different strategy taken in different time. This analysis also helps the organization to make
decisions and adopt any new strategy or any change if it is required.
Financial statement analysis involves the evaluation and interpretation of a company's financial
statements to gain insights into its financial performance, position, and prospects. It is a crucial
tool for investors, creditors, and other stakeholders to assess the financial health and viability of
a business.
After conducting a comprehensive financial statement analysis, several conclusions can be

drawn:
1. Profitability: The analysis allows us to assess the company's profitability by examining key
indicators such as gross profit margin, operating profit margin, and net profit margin. It helps
determine if the company is generating sufficient profits from its operations.
2. Liquidity: The analysis provides insights into the company's liquidity position by examining
its current ratio, quick ratio, and cash conversion cycle. This helps determine if the company has
sufficient short-term assets to cover its short-term liabilities.
3. Solvency: The analysis helps assess the company's solvency and long-term financial stability
by examining metrics such as debt-to-equity ratio, interest coverage ratio, and debt ratio. It
indicates the company's ability to meet its long-term obligations.
4. Efficiency: Financial statement analysis allows us to evaluate the company's efficiency in

managing its assets and liabilities. Metrics such as inventory turnover, accounts receivable
22
turnover, and accounts payable turnover provide insights into the company's operational
efficiency.
5. Growth prospects: By analyzing trends in revenue, earnings, and other key financial
indicators, it is possible to assess the company's growth prospects. This includes evaluating
factors such as market share, product innovation, expansion plans, and industry outlook.
6. Overall financial health: Financial statement analysis provides an overall assessment of the
company's financial health and performance. It helps identify strengths, weaknesses,
opportunities, and threats, enabling stakeholders to make informed decisions.
It is important to note that financial statement analysis should not be viewed in isolation but as
part of a broader assessment that includes qualitative factors, industry analysis, and
macroeconomic conditions. Additionally, the conclusions drawn from financial statement
analysis are subject to inherent limitations and should be used as a tool for decision-making
rather than absolute judgments.
References
 Weygandt, J.J., Kieso, D.E. and Kimmel, P.D. (2018) Accounting principles. Hoboken,
NJ, New york: J. Wiley & Sons.
 Bata, C. (2018) Surprisingly bata, batabd. Available at: https://www.batabd.com/

(Accessed: 11 May 2023).
 Vasesi, A.G. (2023) Apparel News, Textile News, Fashion News & Trends, Apparel Resources.
Available at: https://apparelresources.com/ (Accessed: 11 May 2023).
23
 The Wall Street Journal, U. (2017) Breaking news, business, Financial & Economic
News, World News and Video, The Wall Street Journal. Available at:
https://www.wsj.com/?mod=nav_top_section (Accessed: 11 May 2023).
24

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Report

Financial Statement Analysis

“Bata Shoe Company (Bangladesh) Limited”

Course Name: Financial Accounting

Subject: To submit a report on “Financial Analysis of Bata Shoe Company

Report on “Financial Analysis of Bata Shoe Company (Bangladesh) Limited”

Picture: A showroom of Bata Shoe Company (Bangladesh) Limited.

Objective of the study

Limitation of the study

Name Bata shoe company (Bangladesh) Limited

Franchisee In Bangladesh, Bata is lone franchisee of some internationally renowned brands

Focus of This segment is engaged in manufacturing and exporting products in

Bata Shoe Company Ltd.

Bata Shoe Company Ltd.

Bata Shoe Company Ltd.

Total Assets 8,829 100.0% 7,790৳ 100.0%

Total Assets 9,113 ৳ 100.0% 8,829 100.0%

Bata Shoe Company Ltd.

Total Assets 6,634 ৳ 100.0% 9,113 ৳ 100.0%

Bata Shoe Company Ltd.

Total Assets 6,440 ৳ 100.0% 6,634 ৳ 100.0%

Horizontal Analysis of Income Statement of Bata Shoe Company Ltd.

Bata Shoe Company Ltd.

Depreciation 150 151 -1 -0.66%

Bata Shoe Company Ltd.

Particulars 2019 2018 Increase or (Decrease) during 2019

Bata Shoe Company Ltd.

Vertical analysis of Income Statement of Bata Shoe Company Ltd.

Bata Shoe Company Ltd.

Particulars 2018 2017

Amount Percent Amount Percent

Bata Shoe Company Ltd.

Particulars 2019 2018

Amount Percent Amount Percent

Particulars 2020 2019

Amount Percent Amount Percent

Bata Shoe Company Ltd.

Amount Percent Amount Percent

2019 2018 Change in Current ratio from

2020 2019 Change in Current ratio from

2021 2020 Change in Current ratio from

Current Ratio of Bata Shoe Company Ltd from 2017 to 2021:

2018 2017 Change in Acid test ratio

2019 2018 Change in Acid test ratio

2020 2019 Change in Acid test

2021 2020 Change in Acid test ratio

Year Acid test Ratio

Acid test Ratio

Accounts Receivable Turnover

2018 2017 Change in Accounts

2019 2018 Change in Accounts

2018 2017 Change in Inventory

2019 2018 Change in Inventory

2020 2019 Change in Inventory

2021 2020 Change in Inventory

2018 2017 Change in Asset turnover from

2019 2018 Change in Asset turnover from

2020 2019 Change in Asset turnover from

2021 2020 Change in Asset turnover from

profit margin ratio =

2018 2017 Change in profit margin ratio

2019 2018 Change in profit margin ratio

2020 2019 Change in profit margin ratio