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DEDICATION
ACKNOWLEDGE
My report will remain incomplete if I do not mention the efforts of those people who helped me in completing this work. First of all I will thank to Madam Tanzeela who gave me opportunity to work in such a prestigious project. All my friends who help me in completing this project
At last, I would like to thank all those persons who helped me in completing this report.
CONTENTS
S.NO
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Particulars
Object of the Project Methodology Balance sheet Profit &loss account Common size analysis Index analysis Ratio analysis Graphical presentation Comments Liquidity ratio Activity ratio Profitability ratio Leverage ratio Coverage ratio
Page No.
5 5 6 7 8-9 10 - 11 12 13 - 23 24 24 24 25 25 26
Making a thorough analysis of the company s financial statements over the last 3 years by using ratio analysis, common size analysis and index analysis.
Evaluating the financial condition (using ratios) of Ibrahim Fibers Limited on the basis of Annual Reports for the five consecutive financial years from 2009 to 2011
METHODOLOGY
As the report is related with business, it is a business research. Hence the report has been prepared based on a research process. The process is shown below
1. STATISTICAL TECHNIQUE
To analyze quantitative data we have used different statistical tools like charts and graphs with trend analysis for making comments on ratio analysis.
2. NATURE OF DATA
MY research is based on secondary data. Secondary data was collected in the form of Balance Sheet and Income Statement from Annual Reports of Ibrahim Fibers Limited for the period 2009 to 2011.
2011
8,828,907,710 11,092,969 13,769,491,023 20,540,808 3,573,063 832,525,351 2,676,081,437 162,236,487 863,787,917 8,052,309 537,943,429 155,378,775 2,240,815,548 30,110,426,826
2010
2009
7,190,413,467 7,817,013,285 14,005,376 8,927,930 14,318,835,540 13,572,873,559 0 25,182,879 3,735,923 3,746,923 722,603,343 696,901,126
Current Assets
Stores, spare parts and loose tools Stock in trade Trade debts Loans and advances Prepayments Other receivables Cash and bank balances Non current assets held for sale
2,909,687,606 2,355,115,641 162,983,366 138,789,546 692,073,405 702,856,751 6,835,414 6,636,260 433,033,358 1,106,222,684 169,514,922 72,753,720 0 364,846,339 27,016,931,023 26,478,657,340 1,190,623,805 179,909,644 1,569,438,291 1,686,208,334 150,000,000 461,282,445 4,325,000,000 0 1,814,476,909 401,887,210 3,105,069,950 1,157,521,457 2,765,133,372 253,542,922 1,497,561,488 1,481,916,666 300,000,000 94,430,370 6,011,208,334 150,000,000 1,741,441,544 312,579,575 3,105,069,950 1,150,373,350
Current Liabilities
Trade and other payables Markup / interest payables Short term bank borrowings Current portion of: Long term financing Long term mudarbaha Provision for taxation income tax 3,001,543,155 154,623,130 703,649,354 1,783,333,334 0 644,189,393 2,541,666,666 0 1,980,013,457 525,355,864 3,105,069,950
Non-current Liabilities
Long term financing Long term mudarbaha
Deferred liabilities:
Deferred taxation Staff retirement gratuity
1,164,673,343
Revenue reserves
14,506,318,180 10,975,512,978
30,110,435,826 Profit and loss Account 2011 37,300,680,078 34,177,382,738 3,123,297,340 152,781,541 577,500,576 113,699,275 828,974,533 1,450,341,415 199,696,578 1,650,037,993 3,224,500,000 4,874,537,993 722,718,801 4,151,819,192 27,016,931,023
7,615,399,769 26,478,657,340
Net sales Cost of goods sold Gross profit Selling and distribution expenses Administrative expenses Other operating expenses Finance cost operating income Other incomes Share of profit of associate net Profit before taxation Provision for taxation Profit for the year
2010 27,123,868,602 24,374,579,289 2,749,289,313 158,860,859 501,916,251 113,546,299 1,262,092,608 712,873,296 201,242,257 914,115,553 2,979,689,000 3,893,804,553 533,691,344 3,360,113,209
2009 22,059,606,789 19,748,550,789 2,311,056,000 126,674,952 423,594,936 24,977,054 1,387,287,978 348,521,080 77,089,140 425,610,220 1,500,542,000 1,926,152,220 300,773,643 1,625,378,577
2010
2009
Current Assets
Stores, spare parts and loose tools Stock in trade Trade debts Loans and advances Prepayments Other receivables Cash and bank balances Non current assets held for sale
Current Liabilities
Trade and other payables Markup / interest payables Short term bank borrowings Current portion of: Long term financing Long term mudarbaha Provision for taxation income tax 9.97 0.51 2.34 0.00 5.92 0.00 2.14 0.00 8.44 0.00 0.00 6.58 1.74 0.00 10.31
Non-current Liabilities
Long term financing Long term mudarbaha
Deferred liabilities:
Deferred taxation Staff retirement gratuity
Index Analysis
2011 Non Current Assets
Property, plant and equipment Intangible Assets Investment in associate Long term loans Long term deposits 112.94 79.21 101.45 95.64 119.46 91.97 99.54 124.81 117.80 124.23 91.66 91.98 63.75 105.50 100.29 103.69 80.94 85.16 101.56 97.09 255.46 42.92 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 0.00 113.72 102.03 43.06 70.96 104.80 113.79 50.00 488.49 71.95 0.00 104.19 128.57 100.00 100.62 144.12 102.03 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
2010
2009
Current Assets
Stores, spare parts and loose tools Stock in trade Trade debts Loans and advances Prepayments Other receivables Cash and bank balances Non current assets held for sale
Current Liabilities
Trade and other payables Markup / interest payables Short term bank borrowings Current portion of: Long term financing Long term mudarbaha Provision for taxation income tax 108.55 60.98 46.99 120.34 0.00 682.18 42.28 0.00 113.70 168.07 100.00 101.24 190.49 113.72
Non-current Liabilities
Long term financing Long term mudarbaha
Deferred liabilities:
Deferred taxation Staff retirement gratuity
2011
1.19 0.07 0.02
2010
1.04 0.13 0.01
2009
0.79 0.34 0.03
Activity Ratio
Account Receivable Turnover in Time Inventory Turnover in Time Account Receivable Turnover in Days inventory Turnover in Days 247.82 12.77 1.45 28.19 0.81 8.37 2.49 3.08 4.94 60.37 37.64 60.40 2.99 179.76 9.26 2.00 38.88 1.00 10.14 1.40 1.41 2.50 77.30 43.60 77.34 1.72 135.35 6.79 2.66 53.04 1.20 10.48 0.57 0.47 1.05 123.06 55.17 123.20 1.31
Profitability Raito
Total Asset Turnover in time Gross Profit Margin Net profit Margin Return on asset/investment Return on Equity
Leverage Ratio
Debt-to-Equity Ratio Total debt-to-total asset Ratio Debt-to-tangible Net worth ratio
Coverage Ratio
Time interest Earned in Time
0.00
operating income
200.00
0.00
450.00
300.00
150.00
100.00
0.00
LIQUIDITY RATIO
1.40
1.20
1.00
0.80 CURRENT RATIO LIQUID RATIO CASH RATIO 0.60 Current Ratio Liquid Ratio Cash Ratio 0.40
0.20
ACTIVITY RATIO
300.00 250.00 200.00 A/R &INVENTORY 150.00 TURNOVER 100.00 50.00 0.00 2011 2010 YEAR 2009 Account Receivable Turnover in Time Inventory Turnover in Time
ACTIVITY RATIO
60.00
50.00
40.00
20.00
10.00
0.00 2011 INVENTORY TURNOVER IN DAYS 2010 A/T TURNOVER IN DAYS 2009
PROFITABILITY RATIO
12.00
10.00
6.00
4.00
2.00
0.00 2011 2010 YEAR GROSS PROFIT MARGIN RETURN ON ASSETS NET PROFIT MARGIN RETURN ON EQUITY 2009
LEVERAGE RATIO
140.00 120.00 100.00 80.00 60.00 40.00 20.00 0.00 2011 2010 YEAR 2009
3.00
2.50
2.00
1.50
1.00
0.50
COMMENTS
LIQUIDITY RATIOS
Ratios that show the relationship of a firm s cash and other current assets to its current liabilities. We have calculated two liquidity ratios such as current ratio and quick ratio.
Current Ratio:
Current Ratio is a measurement of short term liquidity. The result shows how much current asset the organization is holding for every taka in current liabilities. Current ratio increase from year (FY) 2009 to 2011 Comparing with previous year the current Ratio of Ibrahim Fibers Limited (IFL) is in good position. That means IFL has a better liquidity position in terms of current ratio compared to previous years.
Quick Ratio:
Quick ratio is a more severe measure of liquidity which measures a company s ability to pay off its short term liability without relying on inventory sale. From FY 2009to 2011 quick ratio has decreased gradually. The reason behind the fall of the quick ratio is the pill up of inventory. This may bring benefit for the company if there is inflation in the next year. More over in the next year company expecting drastically growth in sales which could be back up by the piled up inventories.
ACTIVITY RATIOS
A set of ratios that measures how effectively a firm is managing its assets i.e. using its assets to generate sales. Account receivable turnover Inventory turnover, inventory turnover in days total asset turnover ratio.
Return on asset
It provides an idea of the overall return on investment earned by the firm. Investors always expect high return on investment but from the graph we can see that there upward trend in ratio and in FY 2009
Return on equity
The Return on equity ratio is a measure of profitability. In last 3 year from 2009 to 2011 it has shown the increasing trend which mean share holders are getting more return on their investment and the profitability of the company in increasing
Debt-to-total asset
Debt to total fund ratio represent the long term solvency of the company, if the company can pay its debts in the long run. In last 3 years it was almost the same 2009 then it decline during 2009 to 2011 which mean company position in long run have improved, company s ability to pay it debts in long term has improved.
Coverage ratio
Time interest earned ratio:
An extension of times interest earned ratio, also indicates a firms long term debts paying ability from the income statement view. During last 3 years from stars improving, from 2009 to 2011 it increase from 1.11 to 1.7 in 2011. This means company has improved its fixed interest charged ratio.