FINANCIAL ANALYSIS

BRITISH AMERICAN TOBACCO BANGLADESH COMPANY

BRITISH AMERICAN TOBACCO BANGLADESH COMPANY LTD.

SUBMITTED TO

Md. Safiullah Lecturer Department of BBA

SUBMITTED BY

An Image of Bangla Sec: C 20th Batch

Something new

01. Md. Kamruz Zaman Didar 02. Farhad Alam 03. Md.Jahidul Islam 04. Saiful Islam 05. Abu Tareq

ID: 082-11-342 ID: 082-11-345 ID: 082-11-347 ID: 082-11-351 ID: 082-11-355

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BRITISH AMERICAN TABACCAO

British American Tobacco has been in business for more than 100 years, trading through the turbulence of wars, revolutions and nationalizations as well as all the controversy surrounding smoking. The company's current form has its origins in 1902, when the United Kingdom's Imperial Tobacco Company and the American Tobacco Company of the USA agreed to form a joint venture, the British-American Tobacco Company Ltd.The parent companies agreed not to trade in each other's domestic territory and to assign trademarks, export businesses and overseas subsidiaries to the joint venture. James 'Buck' Duke became its chairman. The British American Tobacco business thus began life in countries as diverse as Canada, China, Germany, South Africa, New Zealand and Australia, but not in the United Kingdom or USA. In 1911 the American Tobacco Company sold its share of the company. Imperial Tobacco gradually reduced its shareholding, but it was not until 1980 that it divested its remaining interests in the company. In 1976 the group companies were reorganized under a new holding company, B.A.T Industries. In 1994 BAT acquired its former parent, American Tobacco Company (though reorganized after anti-trust proceedings). This brought the Lucky Strike and Pall Mall brands into BAT's portfolio. In 1999 it acquired Rothmans International, which included a share in a factory in Burma. This made it the target of criticism from human rights groups. It sold its share of the factory on 6 November 2003 after an "exceptional request" from the British government. In 2003, BAT acquired Ente Tabacchi Italiani (ETI) S.p.A, Italy's state tobacco company. The important acquisition would elevate BAT to the number two position in Italy, the second largest tobacco market in the European Union. In 2008 BAT acquired Turkey's state-owned cigarette maker Tekel. In July 2008, BAT acquired the cigarette and snus operations of the Scandinavian Tobacco Company.

Type Founded Headquarters Key people Industry Products Revenue Operating Income Net income Employees

Public 1902 City of Westminster, London, United Kingdom Jan du Plessis, Chairman Paul Adams, Chief Executive Tobacco Tobacco 33,921,000,000 (2008) 3,572,000,000 (2008) 2,659,000,000 (2008) 53,000 (2008)

STRA

VISION
Our vision is to achieve leadership of the global tobacco industry in order to create shareholder value. Quantitatively, we seek volume leadership among our international competitors. Qualitatively, we aim to lead

our industry as the preferred partner of key stakeholders and in demonstrating responsibility. Our strategy to deliver our vision is based on Growth, Productivity, Responsibility and building A Winning Organization Growth Prod
Responsibilit

STRATEGY
In the early 1990s, we decided to grow our business by focusing solely on tobacco - a decision which regularized and transformed the Group. In 1995, we set ourselves the credible, if challenging, vision of regaining leadership of the global tobacco industry and established a strategy to get there.In this section, we summarize the key elements of our strategy which we believe enable us to continue building a sustainable business in tobacco.

GROWTH

To increase our volume and value share of the global tobacco market through organic growth and mergers and acquisitions (M&A).

PRODUCTIVITY
To effectively and efficiently deploy our global resources to increase profits and generate funds to reinvest in our business.

RESPONSIBILITY
To continue balancing our commercial objectives with the expectations of a broad range of stakeholders, thus ensuring a sustainable business.

WINNING ORGANIZATION
To ensure we have the right people and the right work environment to deliver our vision.

PRODUCTS DETAILS OF THE COMPANY

The company manufactures and markets major international cigarette brands like Benson & Hedges, jhon players gold leaf, pall mall and viceroy which are complemented by local brands. International Brands include Dunhill, Kent, Lucky Strike, Pall Mall, Vogue, Rothmans, Peter Stuyvesant, Benson & Hedges, Winfield, John Player, State Express 555, KOOL, and Viceroy. However, British American Tobacco does not necessarily own the rights to all of these brands in every nation they are marketed. Local brands owned by British American Tobacco include, Belmont (Chile and Venezuela), Jockey Club (Argentina), Stradbroke (Australia), Souza Cruz (Brazil), du Maurier (Canada), Wills (India), Sweet Afton, Major (Ireland), Boots, Alas (Mexico), Gold Leaf (Pakistan), Yava Gold (Russia), Courtleigh (South Africa), Parisienne (Switzerland), Craven A (Vietnam and Jamaica) as well as BAT snus, Holiday, Freedom and Park Drive (New Zealand) Royals (UK)

PERFORMANCE OF THE COMPANY

Particulars Net profit Dividend per share Dividend Amount EPS Net turnover

2008 000tk 1668778 24 1440000 27.80 14030386

2007 000tk 798971 7 420000 13.32 11933459

2006 000tk 361583 3 180000 6.03

2005 000tk 232882 3 180000 3.88

COST OF CAPITAL
British American Tobacco Bangladesh company ltd is our assigned company. After analyzing this company we found that it is an unlevered company. That means is company has no debt. In The capital structure, we know it is divided in to two parts such as Equity capital Debt capital This company is based on equity capital that means 100% equity. It has some short-run debt but no long term debt. So we can say that its a unlevered company.

RATIO ANALYSIS
Liquidity Ratios: Current Ratio Acid-test (quick) Ratio Receivables Turnover Inventory Turnover Profitability Ratios: Profit Margin Asset Turnover

 Returns on Assets Return on common Stockholders equity Market Value: EPS Price-earning ratio Payout ratio

LIQUIDITY RATIOS
Current Assets Current Liabilities 6525529 4822260

Current Ratio =
=

1.35:1

Acid-test (quick) Ratio

Cash+ Short-run investment+ Receivables Current Liabilities 3806443 4822260

.79:1

Receivables Turnover

Net Credit Sales Avg. Net Receivables 6999361

571446

12.25 times

In 2008 Receivables turnover is 12.25 times in 2007 it was 12.61 times

Inventory Turnover =
=

Cost of good sold Avg. Inventory 8999361 2482031.5

3.63 times

In 2008 Inventory turnover is 3.63 times in 2007 it was 3.38 times

PROFITABILITY RATIOS

Profit Margin =
=

Net Income Net Sales 1668778 14030386

100 100

12%

In 2008 Profit Margin is 12% in 2007 it was 6.69%

= Assets Turnover =

Net Sales Avg. Assets 14030386 9014077.5

1.56 Times

In 2008 Assets turnover is 1.56 times in 2007 it was 1.32 times

= Returns on Assets =

Net Income Avg. Assets 1668778 9014077.5

100 100

18.51%

In 2008 Return on Assets is 18.51%.

MARKET VALUE

EPS=
=

Net Income Total no. of Share 1668778 60000

27.81

In 2008 EPS is 27.81 per share in 2007 it was 13.32 per share.

Price Earning Ratio=

=

Market price per share EPS 260 27.81

9.35 times

Payout Ratio =
=

Cash Dividend Net income 1440000 1668778

100 100

86%

RECOMMENDATION
British American tobacco Bangladesh company ltd. Our assigned organization. The world most leading tobacco company. After Ratio Analysis we can see that in short the company doing very well than previous years. Current ratio of companys 1.35:1, that is not too bad. The standard value of acid-test ratio is 1:1. But in 2008 it is 79:1, which is not good. Receivables turnover ratio is 12.25 times, it takes only one month which is better one. Inventory turnover, Profit Margin, Assets turnover, return on assets also better in 2008 than 2007. Earning per share (EPS) is 27.81 in 2008 and which was 13.32 in 2007. So finally we can say that BATBC doing very well in 2008 than 2007.

CONCLUSION
British American tobacco is one of the most leading tobacco companies in the world. They doing their business in Bangladesh very well as named British American tobacco Bangladesh company ltd. We analysis this leading company and we got it a very well performed company. We analysis 2007 and 2008 performance of this company, we see that its doing well in 2008 than 2007.