[All ratios {written in red} taken from summit power, if want more inf0.

See summit power [Interpretation not done of all {red}in bellow} [see in bellow ]{send me final report ..tonmoy }
FINANCIAL PERFORMANCE ANALYSIS:

1] Liquidity Ratios:
Liquidity ratios attempt to measure a company's ability to pay off its short-term debt obligations. The analysis of these ratios is done by comparing a company's most liquid assets (those easily convertible to cash) to its short-term liabilities. So the liquidity ratios show the relationships between the firm s current assets to it s current liabilities. a. Current Ratio: !urrent ratio measures the number of dollars of current assets for each dollar of current liabilities. "t helps to estimate the capacity of the firm to meet its maturing obligations#

Current Ratio=(Current Assets/Current Liabilities) Current Ratio

Square Prime 2007 1.27 1.0 2008 1.21 1.0! 2009 1.35 1.07

Interpretation: "t is seen that for $rime Te%tiles Ltd.# there is a gradual decrease in current ratio from &.'( in year )''* to &.'* in the year )''+.The !urrent ratio decreases because current asset over the last three years decreases gradually followed by gradual increases in current liabilities. The decrease in current ratio tells us that the $rime Te%tiles is degrading year by year but in comparison to them# Square Te%tiles is in a better financial position. "n case of Square Te%tiles# current ratio increases from &.)* in the year )''* to &.,- in the year )''+ with a downfall in the year )''( with a current ratio of &.)*. The standard deviation for current ratio is ).&. /n an average over the last three years# current ratio for Square Te%tiles is &.)( times than whereas current ratio for $rime Te%tiles on an average is &.'*. So both the company s are standing at the same line and needs to better off their position. 0ut since $rime Te%tile s ration is gradually decreasing# it needs to overcome it# whereas Square Te%tiles is in the upward position. This may have happened due the reduction of the number of 1ebtor s and due to an increase in the number of creditors of Square Te%tiles# which has helped it to be in a better position# though $rime Te%tiles is not very far behind. b. Qui k Ratio: The quic2 ratio or the acid-test ratio is a liquidity indicator that further refines the current ratio by measuring the amount of the most liquid current assets there are to cover current liabilities. The quic2 ratio e%cludes inventory and other current assets# which are more difficult to turn into cash.

C!rrent A""et # In$entorie"% & C!rrent Liabilitie"

2007 0."2 0.!! 2008 0.7! 0.#" 2009 0."! 0.3"

Square Prime

Interpretation:
"n case of Square Te%tiles# there is a gradual increase in quic2 ratio from '.+) times in year )''* to '.+3 times in the year )''+# with a downfall of '.*3 in the year )''(. The increase in quic2 ratio is because the company s current asset e%cluding the inventories are increasing gradually even though there is a gradual decrease in liabilities from year )''* to year )''+. The increase in quic2 ratio is quite favorable for the company. 4ote that# even if the inventory level is highest in )''( compared to )''* and )''+# the difference between current asset and inventory is increasing gradually along with decrease in current liabilities for which quic2 ratio shows a gradual increase. This tells that Square Te%tiles is able to meet its financial obligations out of current liquid assets. "n case of $rime Te%tiles# quic2 ratio decreases from '.33 in the year )''* to '.5+ in the year )''( and to '.,+ in )''+. The benchmar2 for quic2 ratio is &.&. "n comparison to $rime Te%tiles# 6uic2 ratio is better for Square Te%tiles# which is on average '.(((a little less than the benchmar2) whereas $rime Te%tiles has a quic2 ratio of about '.-& over the last three years. This tells us that $rime Te%tiles has lots of wor2 in progress# or unsold products which have caused its inventory to be high. . !et "orkin# Capital: 7or2ing !apital measures the percentage of total assets that is invested in current assets. "t helps to analy8e capital intensity as well as corporate liquidity. 47! 9C!rrent A""et& 'otal A""et 7or2ing !apital :atio
Square Prime 2007 ##!$"23$#12 55$7!3$1#0 2008 5"3$7" $ 5# !1$"22$2" 2009 35$ 51$#21 57$501$ 53

Interpretation:
;rom the analysis done# Square Te%tiles is in a much better position to pay off it short time liabilities in comparison to $rime Te%tiles which is falling much behind. This might have occurred because a larger amount of the total assets is used to cover the current assets. Sufficient wor2ing capital provides assurance to short-term creditors that they will be paid by the company as soon as possible.

2] Productivity Ratios/ asset management ratio:

a. Fixed Asset Turnover% &i'e( Assets )urno*er=Sales/+et &i'e( Assets The fi%ed asset turnover means how much of sales have been generated by using the fi%ed assets.

Square Prime

2007 1.!2 0."!

2008 1.2" 1.00

2009 1.70 0.50

$nterpretation: "n the year )''+# T< & worth of fi%ed asset of Square Te%tiles can
generate a sale of T< &.*'. The ;i%ed =sset Turnover :atio for Square Te%tiles shows an increase from &.3) in the year )''* to &.*' in the year )''+ with a downfall of &.)+ in )''(. ;i%ed =sset Turnover ratio decreased from )''* to )''( due to the rapid decrease in sales in lac2 of generating net fi%ed asset but from )''( to )''+ fi%ed asset turnover ratio increased due to the rapid increase in sales for generating net fi%ed asset. "n the year )''+ T< & worth of fi%ed asset of $rime Te%tiles can generate a sale of T< '.-'. There has been an increase from '.+3 to &.'' from )''* to )''( but a downfall of '.-' in )''+. This may have happened because of the rapid decrease in sales in lac2 of generating net fi%ed assets. The data analysis hence indicates that Square te%tiles has a better position in terms of ;i%ed =sset Turnover.

b. %otal Asset %urno&er: The total asset turnover(T=T/) illustrates how much of sales have been generated from the total assets used. Total =sset Turnover evaluates the efficiency of managing all of the company's assets. 'otal A""et t!rno$er: Sale" & 'otal A""et
2007 0.!" 0.!7 2008 0.53 0.!0 2009 0.70 0.37

Square Prime

"nterpretation. "n the year )''+# every T< & worth of asset is generating T< '.*' worth of
sales in case of Square Te%tiles. The Total =sset Turnover increases from '.3+ in year )''* to '.*' in the year )''+ but falls slightly to '.-, in the year )''(. This is because> sales were high in the year )''+ in comparison to )''* and )''(# the increase in sales accompanied by a upgrade in total asset has caused the total asset turnover to improve drastically in )''+ from )''(. 7hereas# $rime Te%tile s Total asset turnover decreases from '.3* in year )''* to '.3' in the year )''( and falls drastically . The decrease in total sales followed by decrease in total asset has caused negligible change in turnover. The data analysis shows that Square Te%tiles has a better total asset turnover than $rime Te%tiles.

. $n&entor' %urno&er Ratio : The ratio is regarded as a test of ?fficiency and indicates the rapidity with which company can move its merchandise. In$entor( '!rno$er: Co"t of )ood" "old& In$entor(
2007 107.55 71." 2008 17 .73 1# .30 2009 102.73 177.!0

Square Prime

Interpretation: There is a gradual decrease in inventory turnover from &'*.-- times in the year )''*
to &').*, times in the year )''+ in case of Square Te%tiles. This indicates that cost of goods sold has decreased gradually and number of inventory in the warehouse has increased in )''+. Square Te%tiles has not sold and stoc2ed its inventory more which is unfavorable. $rime Te%tile s inventory turnover increases from *&.+( times to &**.3' times in the year )''* to )''+. The reason behind this is increase in cost of goods sold from )''* to )''+. The data analysis shows that $rime Te%tiles has a better inventory turnover than Square Te%tiles.

d.

(a's Sales )utstandin# The 1ays Sales /utstanding ratio shows both the average time it ta2es to turn the receivables into cash i.e. how much time it ta2es to collect money from collectors and the age# in terms of days# of a company's accounts receivable. This ratio is of particular importance to credit and collection associates. *a(" Sale" O!t"tandin): Re+ei$able"& Ann!al Sale"&,-.%
2007 117.!7 72.3 2008 202.0! 7 .03 2009 15 .2! 57.57

Square Prime

Interpretation: The days sale outstanding for Square Te%tiles increases gradually
from &&*.3* days in the year )''* to &-(.)3 days in the year )''+ which is a very bad sign. This tells us that Square Te%tiles has worsen its credit sales collection over the last three years. @owever# $rime Te%tile s 1ays Sales /utstanding shows a steady decrease from *).,( days in the year )''* to -*.-* days in )''+# which is favorable for $rime Te%tiles. "t shows that $rime Te%tiles is able to collect its receivables more effectively than that of Square Te%tiles.

e. A&era#e Colle tion *eriod f. A&era#e *a'ment *eriod

{missin#} {missin#} { not essential }

3] Leverage/ (ebt +ana#ement Ratios

a. %otal (ebt to %otal Asset: %,e debt-to-asset ratio tells us how much of the total assets are financed by the overall liability of the company. *ebt to A""et Ratio: 'otal Liabilit(& 'otal A""et

Square Prime

2007 ##.7", 53.25,

2008 # ."5, 5!.3",

2009 #3.37, 3#."1,

"nterpretation. The debt to asset ratio for Square Te%tiles shows a slight decrease from 55.*+A
in the year )''* to 5,.,*A in the year )''+. /n the other hand# in case of $rime Te%tiles# debt to asset ratio falls gradually from -,.)-A in the year )''* to ,5.+&A in the year )''+. "n the year )''+# Square Te%tile s 5,.,*A of total asset were financed by debt i.e. for every T< & of asset# T< '.5, were financed by debt. /n the other hand# in the year )''+# $rime Te%tile s ,5.+&A of total asset were financed by debt i.e. for every T< & of asset# T< '.,- were financed by debt. @ence# $rime Te%tiles with lower debt to asset ratio is in a favorable position than Square Te%tiles from the view point of creditors# because lower the debt ratio# the greater the cushion against creditor s losses in the event of ban2ruptcy.

b. (ebt-./uit' Ratio . The debt-to-equity ratio is a leverage ratio that compares a company's total liabilities to its total shareholders' equity. This is a measurement of how much suppliers# lenders# creditors and obligors have committed to the company versus what the shareholders have committed.

*ebt to E/!it(: 'otal *ebt & S0are0older1" E/!it(

Square Prime

2007 1.11, 113."2,

2008 "5."1, 12".32,

2009 7!.5 , 53.!3,

"nterpretation. "n case of Square Te%tiles# 1ebt to ?quity ratio decreases from (&.&&A
in the year )''* to *3.-(A in the year )''+. This is because debt is decreasing gradually year by year and lower debts are financed by increasing equity. $rime Te%tile s debt to equity ratio decreases gradually from &&,.+)A in the year )''* to -,.3,A in the year )''+. This is because increasing debts are financed by increasing equity. The data analysis suggests that $rime Te%tiles has a lower debt to equity ratio compared to Square Te%tiles which is quite favorable for $rime Te%tiles.

C. 'i2e" Intere"t Earned: .arnin#s before $nterest and $n ome %a0es 1 $nterest C,ar#es

23 *rofitabilit' Ratios
a 3ro"" Profit Mar)in: 3ro"" Profit Mar)in: Gross Profit Mar in
Square Prime 2005 22.72, 10.22, 200 22.13, ".!2, 2007 22."3, 10.12, 2008 15.1 , 11. 2, 2009 13.7#, 12. 2,

4Sales - Cost of 5oods sold6 1sales

b.

!et *rofit +ar#in

Net Profit Mar)in: Net in+o2e & Sale"

Square Prime 2007 13. 7, 3.35, 2008 7.75, #.50, 2009 !.71, 2."5,

c.

Return on Asset

Ret!rn on A""et: Net In+o2e & 'otal A""et !eturn on Asset

Square Prime 2007 ".!3, 2.2#, 2008 #.07, 2.70, 2009 #.73, 1.0",

d.

Return on ./uit'

Ret!rn On E/!it(: Net In+o2e & 'otal Co22on E/!it( !eturn on "#uity
Square Prime 2007 17.##, #.7", 2008 7." , !.20, 2009 .3!, 1.!7,

73 Sto k +arket Ratios a.

0oo2 Balue per Share. 4oo5 $al!e per S0are: S0are 0older1" e/!it( & N!2ber of "0are"

b. *i$idend Pa(o!t Ratio Yield:

Pa(o!t Ratio" 6 *i$idend per "0are & Earnin) per S0are

C . .arnin#s *er S,are Earnin)" per S0are: Net In+o2e & Co22on S0are O!t"tandin)

d.

+arket to 8ook 9alue +arket *ri e per S,are 1 8ook 9alue per S,are

Mar5et to 4oo5 7al!e Ratio:

e. *ri e to .arnin#s Ratio

Pri+e Earnin)" Ratio: Mar5et Pri+e per S0are & Earnin)" per S0are Pri$e% "arnin s !atio
Square Prime 2007 17.10 3. ! 2008 2#. # !.5" 2009 30.23 1 .5

:. Pri$e to &as' Flow !atio Pri$e to &as' Flow !atio

Square Prime 2007 12.33 3.7# 2008 15.#3 !.#5 2009 17.2" 17."!

#. (u-*ont ./uation

R-. = (+//Sales) ' (Sales/)A) ' ()A/.quit0

,. market &alue ratio .

Square Prime

Mar(et to )oo( !atio

2007 2." 0.1 2008 1." 0.#1 2009 2.52 0.31

,. Pri$e to &as' Flow !atio

i..0tended (u-*ont ./uation *. Pri$e%+ales !atio

Square Prime

2007 2.37 0.13

2008 1."2 0.30

2009 2.03 0.55

{,- missin }
APPENDIX
Finan+ial Anal("i" of (ear 899:

:=T"/ ;ormula for

calculation
;i/uidit'
!urrent ratio

Sqrure (Target prime(!ompetin !ompany) g !ompany)

!/CC?4T
$oorDgood

!urrent =ssetsD!urrent Liabilities (!urrent =ssets"nventories)D!urrent Liabilities !urrent =ssetD Total =sset !ost of goods sold D "nventories

6uic2 ratio

$oorDgood

7or2ing !apital ratio

Asset +ana#ement

$oorDgood

$oorDgood

"nventory turnover ratio The days sales outstanding ;i%ed asset turnover ratio Total asset turnover ratio :eceivable Turnover (ebt +ana#emen t 1ebt ratio

:eceivablesD(=nnual 1ays salesD,3-) SaleDnet fi%ed asset

E E

$oorDgood

$oorDgood

SaleD Total =sset

$oorDgood

SaleD=ccount :eceivable Total debtDTotal =sset

$oorDgood

Low ris2

payout
Times"nterest?arned (T"?) ratio
1ebt-?quity :atio

?0"TD"nterest charge

@igh(Food)D Low(less ris2y)

Total debtDTotal equity

A !ash flow from operationD Total debt

Low(less ris2y)

!ash ;low to 1ebt :atio

$oorDgood

[All ratios {written in red} ta(en from summit power. if want more inf/. +ee 00summit power00}