Financial Ratio Analysis of

Hwa Well Textiles (BD) PLC.

A five-year performance review (2019–2024)
Presented by: Group E

Tanzia Afrin Marzia Md. Abu Zubaer Nahid Md Shah Jahan Md. Tanzimul Kabir
ID - 250713801 ID - 250714498 ID: 250715151 ID- 250714451

Mohammad Nadim Asadullah Al Galib Siam Md Sakhawat Hosen

ID: 250714191 ID: 250715254 ID: 250715058
 Company Profile:
Hwa Well Textiles (BD) PLC was incorporated on 8 May 2002,
with registration no. C-45767, under the name Hwa Well Textiles
(BD) Limited, as a private limited company in Bangladesh. It was
subsequently converted into a public limited company on 30
December 2011. The company offered its shares to the public
through an Initial Public Offering (IPO) in 2014

Nature of Business:
Hwa Well Textiles (BD) PLC is a 100% export-oriented textile
industry specializing in the production and sale of a wide range
of knitted, dyed, and finished fleece fabrics, including polyester,
cotton, CVC, mélange, CD, and laminated/bonded fleece
materials.
Source of Data
• official financial statements
Time Frame of Data

• The analysis covers the years 2019–2024.

Tools of Analysis
• The financial ratios analyzed include:
- Liquidity Ratios
- Profitability Ratios
- Leverage Ratios
- Asset Management Ratios
- Market Value Measures
SL Analysis Ratio Method Presented By
Current Ratio Current Assets/Current Liabilities
1 Md. Abu Zubaer Nahid
Liquidity Ratio
2 Quick Ratio (Current Assets - Inventory)/Current Liabilities Md. Abu Zubaer Nahid
Liquidity Ratio
Cash Ratio Cash/Current Liabilities
3 Md. Abu Zubaer Nahid
Liquidity Ratio
Total debt ratio (Total Assets - Total Equity)/Total Assets
4 Tanzia Afrin Marzia
Financial Leverage Ratio
Long term debt ratio Long-term debt/(Total debt + total equity)
5 Tanzia Afrin Marzia
Financial Leverage Ratio
Times interest earned EBIT/Interest
6 Md Shah Jahan
Financial Leverage Ratio
Cash coverage (EBIT + depreciation)/Interest
7 Md Shah Jahan
Financial Leverage Ratio
8 Inventory turnover COGS/Inventory Mohammad Nadim
Asset Management Ratios
9 Day sales in inventory 365/Inventory turnover Mohammad Nadim
Asset Management Ratios
10 Receivable turnover Sales/Accounts Receivable Mohammad Nadim
Asset Management Ratios

11 Days sales in receivables 365/Receivables turnover Asadullah Al Galib Siam

Asset Management Ratios
12 Fixed assets turnover Sales/Net Fixed Assets Asadullah Al Galib Siam
Asset Management Ratios
13 Total assets turnover Sales/Total Assets Asadullah Al Galib Siam
Asset Management Ratios
14 Profitability Ratios Profit margin Net income/ Sales Md Sakhawat Hosen

15 Profitability Ratios Return on assets (ROA) Net income/Total assets Md Sakhawat Hosen

16 Profitability Ratios Return on equity (ROE) Net income/Total equity

Md. Tanzimul Kabir
17 Profitability Ratios
Price-to-Earnings (P/E) Price per Share/ Earnings per Share (EPS) Md. Tanzimul Kabir
 Financial Statement Data
Item 2019 2020 2021 2022 2023 2024
Current Assets 1,153,037,284 1,075,159,918 1,333,454,133 1,511,681,167 1,875,499,295 1,937,604,164
Current Liabilities 240,529,635 118,193,181 268,844,746 295,602,429 445,774,107 458,477,316
Inventory 1,983,185 196,270,370 187,898,770 222,713,949 19,112,418 46,833,141
Cash 385,256,156 433,753,255 672,891,682 656,425,407 1,289,893,523 1,078,578,332
Total Assets 1,895,217,013 1,982,707,150 2,100,505,704 2,287,752,194 2,631,280,712 2,675,707,314
Total Equity 1,673,154,835 1,709,231,770 1,767,287,756 1,923,162,325 2,116,886,996 2,156,525,088
-
Long Term Debt - - - - -

EBIT 173,748,518 161,495,488 205,918,400 302,934,543 389,792,465 203,809,691

Interest 189,109 2,879 - -

851,758 69,933
Depreciation 72,097,678 60,058,093 63,965,025 56,940,455 54,630,907 48,669,082
COGS 1,164,985,083 1,053,324,389 1,204,102,878 1,678,713,592 1,690,377,152 1,383,182,785
Average Inventory - 99,126,778 192,084,570 205,306,360 120,913,184 32,972,780
Sales 1,361,799,432 1,225,957,206 1,413,809,615 1,977,700,457 1,552,497,480 2,015,054,678
Accounts Receivables 231,309,846 17,761,004 147,611,684 260,345,416 347,953,115 36,412,685
Net Fixed Assets 792,672,241 819,819,206 730,746,824 739,711,236 693,081,389 667,872,271
Inventory Turnover - 10.63 6.27 8.18 13.98 41.95
Average A/R - 124,535,425 82,686,344 203,978,550 304,149,266 192,182,900
A/R Turnover - 9.85 17.10 9.70 5.10 10.48
Net Income 141,804,631 129,632,471 168,575,969 254,429,782 332,451,308 178,489,411

Outstanding Shares 56,000,000 56,000,000 56,000,000 56,000,000 56,000,000 56,000,000

Price per Share (BDT) 32.40 41.40 49.30 45.00 42.10 34.80

EPS 2.31 3.01 4.54 5.95 3.19

 1. Current Ratio =
Current Assets / Current Liabilities

Ratio 2019 2020 2021 2022 2023 2024

Current
4.79 9.10 4.96 5.11 4.21 4.22
Ratio

• Peaked in 2020 (9.10) due to a sharp drop in liabilities, then stabilized

around 4–5.
• Consistently above 4, indicating excessive liquidity. A ratio >2 is healthy,
but values this high suggest underutilized assets.
 2. Quick Ratio =
(Current Assets - Inventory) / Current Liabilities

Ratio 2019 2020 2021 2022 2023 2024

Quick
4.79 7.45 4.31 4.37 4.17 4.12
Ratio

• Mirrors the Current Ratio, excluding inventory. 2020’s 7.45 highlights strong
liquidity without inventory reliance.
• Ratios >4 signify the company can cover liabilities 4x over without selling
inventory. Overly conservative.
 3. Cash Ratio =
Cash / Current Liabilities

Ratio 2019 2020 2021 2022 2023 2024

Cash
1.60 3.67 2.50 2.22 2.89 2.35
Ratio

Highest in 2023 (2.89), dipped slightly in 2024 (2.35).

Cash alone covers liabilities 2–3x. A ratio >0.5 is safe; this
indicates missed investment opportunities.
 Liquidity Ratio
8.5
6.5
4.5
2.5
0.5
2019 2020 2021 2022 2023 2024
Current Ra- 4.79 9.1 4.96 5.11 4.21 4.22
tio
Quick Ratio 4.79 7.45 4.31 4.37 4.17 4.12
Cash Ratio 1.6 3.67 2.5 2.22 2.89 2.35
 4. Total Debt Ratio =
(Total Assets - Total Equity) / Total Assets

Ratio 2019 2020 2021 2022 2023 2024

Total
Debt 11.73% 13.80% 15.86% 15.95% 19.54% 19.40%
Ratio

Rises from 11.73% (2019) to 19.40% (2024), indicating increasing

reliance on short-term liabilities (Current Liabilities).
The company uses no long-term debt, so all debt is short-term. A
ratio <40% is generally safe, but the upward trend warrants
 5. Long Term Debt Ratio =
Long-Term Debt / (Total Debt + Total
Equity)

Ratio 2019 2020 2021 2022 2023 2024

Long
Term
0% 0% 0% 0% 0% 0%
Debt
Ratio

All Years: 0% because Long-Term Debt

= 0. The company is debt-free in long-
term obligations.
 [Link] Interest Earned (TIE)
= EBIT / Interest
Year EBIT (BDT) Interest (BDT) TIE
2019 173,748,518 189,109 919.3
2020 161,495,488 2,879 56,076.4
2021 205,918,400 851,758 241.9
2022 302,934,543 69,933 4,331.9
2023 389,792,465 0 N/A
2024 203,809,691 0 N/A

•2019–2020: Exceptionally high TIE due to minimal interest

expenses.
•2021–2022: Declined but still strong coverage (e.g., 4,331.9 in
2022).
•2023–2024: No interest obligations, rendering TIE irrelevant
(N/A).
•Strategic Debt Reduction: Elimination of interest expenses by
2023 indicates a shift to a debt-free structure, reducing
 [Link] Coverage Ratio =
(EBIT + Depreciation) / Interest
Year EBIT (BDT) Depreciation (BDT) Interest Cash Coverage
(BDT)
2019 173,748,518 72,097,678 189,109 1,300.6
2020 161,495,488 60,058,093 2,879 76,923.3
2021 205,918,400 63,965,025 851,758 317.3
2022 302,934,543 56,940,455 69,933 5,142.3
2023 389,792,465 54,630,907 0 N/A
2024 203,809,691 48,669,082 0 N/A

• 2019–2020: Massive coverage ratios due to negligible interest costs.

• 2021–2022: High but declining ratios as interest expenses rose.
• 2023–2024: N/A as interest expenses were eliminated. EBIT
Volatility: Fluctuations in EBIT (e.g., 389M in 2023 vs. 204M in 2024)
highlight the need for earnings stability.
• Liquidity Strength: Pre-2023 ratios reflect strong liquidity to cover
interest obligations multiple times over.
 8. Inventory Turnover
COGS/ Average Inventory

Year COGS (BDT) Average Inventory (BDT) Inventory Turnover

2019 1,164,985,083 N/A N/A

2020 1,053,320,000 99,126,800 10.63
2021 1,204,100,000 192,085,000 6.27
2022 1,678,710,000 205,306,000 8.18
2023 1,690,380,000 120,913,000 13.98
2024 1,383,180,000 32,972,800 41.95

 2024 has the highest turnover (41.95),

indicating rapid inventory sales.
 2021 dip (6.27) suggests slower inventory
movement, possibly due to overstocking.
 8. Inventory Turnover
COGS/ Average Inventory

Inventory Turnover
2024 41.95

2023 13.98

2022 8.18

2021 6.27

2020 10.63

2019
0

0 5 10 15 20 25 30 35 40 45
 [Link] Sales in Inventory=
365 / Inventory Turnover

Year Inventory Turnover Days Sales in Inventory

2019 N/A N/A
2020 10.63 34.3 days
2021 6.27 58.2 days
2022 8.18 44.6 days
2023 13.98 26.1 days
2024 41.95 8.7 days

 Efficiency improved drastically by 2024 (8.7 days to sell

inventory).
 2021’s 58.2 days signals potential overstocking or demand
issues.
 [Link] Sales in Inventory=
365 / Inventory Turnover
70

60 58.2

50
44.6
41.95
40
34.3

30
26.1

20
13.98
10.63
10 8.18 8.7
6.27

0
2019 2020 2021 2022 2023 2024

INVENTORY TURNOVER DAYS

 [Link] Turnover=Sales/
Average Accounts Receivable

Year Sales (BDT) Average A/R (BDT) Receivable Turnover

2019 1,361,799,432 N/A N/A
2020 1,225,960,000 124,535,000 9.85
2021 1,413,810,000 82,686,300 17.10
2022 1,977,700,000 203,979,000 9.70
2023 1,552,500,000 304,149,000 5.10
2024 2,015,050,000 192,183,000 10.48

21 had the best turnover (17.10), indicating efficient collectio

23 drop (5.10) suggests slower collections or relaxed credit t
 [Link] Turnover=Sales/
Average Accounts Receivable

Receivable Turnover

2024 10.48

2023 5.1

2022 9.7

2021 17.1

2020 9.85

2019
0

0 2 4 6 8 10 12 14 16 18
 [Link] Sales in Receivables=
365/ Receivable Turnover
Year Receivable Turnover Days Sales in Receivables
2019 N/A N/A
2020 9.85 37.1 days
2021 17.10 21.3 days
2022 9.70 37.6 days
2023 5.10 71.6 days
2024 10.48 34.8 days

 2023’s 71.6 days highlights collection

inefficiencies.
 2021’s 21.3 days reflects strong receivables
management.
 [Link] Sales in Receivables=
365/ Receivable Turnover
80
71.6
70

60

50

40 37.1 37.6
34.8

30
21.3
20 17.1
9.85 9.7 10.48
10
5.1

0
2019 2020 2021 2022 2023 2024

Receivable Turnover DAYS

 12. Fixed Assets Turnover=
Sales/ Net Fixed Assets

Net Fixed Assets Fixed Assets

Year Sales (BDT)
(BDT) Turnover
2019 1,361,799,432 792,672,241 1.72
2020 1,225,960,000 819,819,000 1.50
2021 1,413,810,000 730,747,000 1.93
2022 1,977,700,000 739,711,000 2.67
2023 1,552,500,000 693,081,000 2.24
2024 2,015,050,000 667,872,000 3.02

• 2024 turnover (3.02) shows optimal use of fixed assets to

generate sales.
 2020 dip (1.50) indicates underutilization of fixed assets.
 [Link] Assets Turnover=
Sales/Total Assets

Total Assets
Year Sales (BDT) Total Assets (BDT)
Turnover
2019 1,361,799,432 1,895,217,013 0.72
2020 1,225,960,000 1,982,710,000 0.62
2021 1,413,810,000 2,100,510,000 0.67
2022 1,977,700,000 2,287,750,000 0.86
2023 1,552,500,000 2,631,280,000 0.59
2024 2,015,050,000 2,675,710,000 0.75

•2022 had the highest turnover (0.86), indicating efficient

asset use.
•2023 drop (0.59) suggests assets grew faster than sales.
 14. Profit Margin=
Net Income​/ Sales

Year Net Income (BDT) Sales (BDT) Profit Margin

2019 141,804,631 1,361,799,432 10.41%
2020 129,632,000 1,225,960,000 10.57%
2021 168,576,000 1,413,810,000 11.93%
2022 254,430,000 1,977,700,000 12.87%
2023 332,451,000 1,552,500,000 21.42%
2024 178,489,000 2,015,050,000 8.86%

•2023 peak (21.42%) indicates exceptional cost control or high-

margin sales.
•2024 decline (8.86%) signals rising costs or pricing pressures.
15. Return on assets (ROA)=
Net Income/Total Assets​

Net Income Total Assets

Year ROA
(BDT) (BDT)
2019 141,804,631 1,895,217,013 7.48%
2020 129,632,000 1,982,710,000 6.54%
2021 168,576,000 2,100,510,000 8.03%
2022 254,430,000 2,287,750,000 11.12%
2023 332,451,000 2,631,280,000 12.64%
2024 178,489,000 2,675,710,000 6.67%

•2023’s 12.64% ROA reflects peak asset efficiency.

•2024 drop (6.67%) aligns with lower profit margins.
 16. Return on Equity (ROE)=
Net Income/ Total Equity​

Net Income Total Equity

Year ROE
(BDT) (BDT)
2019 141,804,631 1,673,154,835 8.48%
2020 129,632,000 1,709,230,000 7.58%
2021 168,576,000 1,767,290,000 9.54%
2022 254,430,000 1,923,160,000 13.23%
2023 332,451,000 2,116,890,000 15.70%
2024 178,489,000 2,156,530,000 8.28%

•2023’s 15.70% ROE shows strong returns for

shareholders.
•2024 decline (8.28%) mirrors reduced profitability.
 17. Price-to-Earnings (P/E) Ratio=
Price per Share/ Earnings per Share (EPS)
Price per
Year Share EPS (BDT) P/E Ratio
(BDT)
2019 32.40 2.53 12.81
2020 41.40 2.31 17.91
2021 49.30 3.01 16.37
2022 45.00 4.54 9.91
2023 42.10 5.95 7.08
2024 34.80 3.19 10.91

• The company's P/E ratio has fluctuated significantly, peaking at 17.91 in 2020 and dropping to a low of 7.08 in 2023,
• The P/E ratio increased in 2020 to 17.91 could reflect market optimism or expectations of high growth, but this might have
been unsustainable as the ratio fell sharply in the following years.
• The increase in P/E ratio to 10.91 in 2024 suggests a recovery in investor confidence, possibly due to improved earnings or
market sentiment.
• The company might be undervalued based on its low P/E ratio in recent years, particularly in 2023. I
• Investors could see this as a buying opportunity, but the fluctuating P/E ratios highlight the need for deeper analysis of the
company’s growth prospects and market factors.
Ratio Category Key Trends Critical Insights Recommendations

Reallocate idle cash to

Current/Quick Ratios
Excessive liquidity; cash growth/dividends;
Liquidity >4; Cash Ratio dipped in
reserves underutilized. maintain liquidity
2024.
buffers.

Total Debt Ratio

Rising short-term Introduce strategic
↗19.4%; No long-term
liabilities; debt-free long-term debt;
Financial Leverage debt; TIE/Cash
structure limits growth monitor short-term
Coverage N/A post-
leverage. liability growth.
2022.

Inventory Turnover Inconsistent Tighten credit policies;

Asset ↗41.95 (2024); receivables; strong fixed sustain 2024’s
Management Receivable Turnover asset utilization (3.02 in inventory/fixed asset
volatile (5.1–17.1). 2024). efficiency.

Profit Margin ↘8.86% 2024 profitability drop Audit costs; optimize

Profitability (2024); ROA/ROE fell due to cost pressures or pricing/operational
sharply. pricing issues. efficiency.
Strategic Priorities
[Link] Optimization: Use excess cash (e.g., 2024: 1.08B BDT) for
growth or dividends.
[Link] Efficiency: Reduce Days Sales in Receivables (71.6 days
in 2023) via stricter credit terms.
[Link] Strategy: Balance short-term liabilities with long-term debt to
reduce refinancing risks.
[Link] Control: Address 2024’s margin decline through operational
audits.
[Link] Utilization: Maintain 2024’s inventory turnover (41.95) and
fixed asset efficiency (3.02).

The company demonstrates strong

liquidity and improved asset efficiency but faces
challenges in profitability
sustainability and receivables management.
Strategic focus on cost control, debt
restructuring, and cash optimization will enhance
returns while maintaining stability.