5.

1 Liquidity ratios

2010

2009

Current Ratio(times)
2.97 3 2.5 Current ratio 2 1.5 1 0.5 0 2010 2009 2010 2009 2.46

Explanation: From the graph and calculation we find that the company is not in good position in 2010 compared to year 2009 to pay off its short term debt. That means company has less liquid (current) asset in 2010 than in 2009.It is a negative image of the company.

2010

2009

Quick ratio(times)
2.5 2 Quick ratio 1.5 1 0.5 0 2010 2009 1.67 2010 2009 2.23

Explanation: From the graph and calculation we find that the company is not in good position in 2010 compared to year 2009 to pay off its short term debt. That means company has less liquid (current) asset in 2010 than in 2009.It is a negative image of the company. It is because the company has more inventories in 2010 than 2009 which is more difficult to convert into cash.

5.2 Asset utilization ratio

2010

2009

Receivable turnover(times)
Receivable turnover 8 7.5 7.01 7 6.5 2010 2009 7.9

2010 2009

Explanation: From the graph and calculation we find that the company is in good position in 2010 compared to year 2009 to collect its receivables. It suggests that in 2010 company collect it receivables faster than 2009. In 2010 it seems that company extends its credits and collection of accounts receivable is efficient than 2009.

2010

2009

Average collection period(Days)

52 Average collection period 50 48 46 44 42 2010 2009 45.55 2010 2009 51.32

Explanation: From the graph and calculation we find that the company is in good position in 2010 compared to year 2009 to collect its receivables at first as possible. It suggests that in 2010 company collect it receivables faster than 2009. In 2010 it seems that company extends its daily credit sales and it is clearly found the time period to collect receivables is less than the year 2009.As a result the company avails more cash.

2010

2009

trade creditor payment period(days)

trade creditor payment period 35 30 25 20 15 10 5 0 2010 2009 2010 2009 23.97 30.31

Explanation: From the graph and calculation we find that the company takes less time to pay its trade creditors (account payable). It signifies that in 2010 company has cash and that cash is used to pay off debt but in 2009 company utilizes its cash more in different sectors rather than paying off its creditors.

2010

2009

inventory turnover(times)
3.6 inventory turnover 3.4 3.2 3 2.8 2.6 2010 2009 3.01 2010 2009 3.5

Explanation: From the graph and calculation we find that the company has more inventories relative to sales in 2009 than in 2010. This is a negative image because a high level of inventory means poor sales. High inventory levels are unhealthy because they represent an investment with a rate of return of zero. In 2010 the company generates more sales relative to inventory. So the company improves significantly in 2010 than 2009.

2010

2009

fixed asset turnover(times)

0.44 Fixed asset turnover 0.42 0.4 0.3754 0.38 0.36 0.34 2010 2009 2010 2009 0.4291

Explanation: From the graph and calculation we find that the company is utilizing its fixed assets (property, plant and equipment) more effectively in 2010 than in 2009 for generating sales revenue.

2010

2009

total asset turnover(times)

0.35 total asset turnover 0.3 0.25 0.2 0.15 0.1 0.05 0 2010 2009 2010 2009 0.3037 0.2447

Explanation: From the graph and calculation we find that the company is utilizing its total assets more effectively in 2010 than in 2009 for generating sales revenue. It is a significant improvement for the company for asset utilization.

5.3 Profitability ratios

2010

2009

profit margin(%)
20.00% Profit margin 15.00% 10.00% 5.00% 0.00% 2010 2009 16.20% 12.80% 2010 2009

Explanation: From the graph and calculation we find that the company has earned significant profit in 2010 than in 2009.It clearly identifies that the company has a good earning capacity and it is increasing year after year.

2010

2009-25,24

gross profit margin(%)

48.88% 49.00% gross profit margin 48.50% 48.00% 47.50% 47.00% 46.50% 46.00% 2010 2009 47.28% 2010 2009

Explanation: From the graph and calculation we find that the company has used raw materials, labor and manufacturing-related fixed assets to generate profits more effectively in 2010 than in 2009.

Capital=total asset-current liabilities ( ( ) )

2010

2009-25,24

return on capital employed(%)

retun on capital employed 6.00% 5.00% 4.00% 3.00% 2.00% 1.00% 0.00% 2010 2009 3.55% 2010 2009 5.57%

Explanation: From the graph and calculation we find that the company has used its capital very effectively for generating revenue in 2010 than in 2009.

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2010

2009

net profit ratio(%)

20.97% 21.00% net profit ratio 20.00% 19.00% 17.81% 18.00% 17.00% 16.00% 2010 2009 2010 2009

Explanation: From the graph and calculation we find that the company has earned more profit in 2010 than in 2009.

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2010

2009

return on asset(%)
4.92% 5.00% return on asset 4.00% 3.00% 2.00% 1.00% 0.00% 2010 2009 3.14% 2010 2009

Explanation: From the graph and calculation we find that the company has used its assets very effectively for generating revenue in 2010 than in 2009.

2010

2009

12

return in equity(%)
6.58% 6.60% 6.40% return in equity 6.20% 6.00% 5.80% 5.60% 5.40% 5.20% 2010 2009 5.73% 2010 2009

Explanation: From the graph and calculation we find that the shareholders have earned more in 2010 than in 2009 by investing in the company. The company is utilizing its equity more effectively in 2010 and brings more return to the investors.

5.4 Debt utilization ratio

2010

2009

13

Debt to total asset(%)

50.00% Debt to total asset 40.00% 30.00% 20.00% 10.00% 0.00% 2010 2009 25.25% 2010 2009 45.27%

Explanation: From the graph and calculation we find that the company has less debt in 2010 than in 2009. It is a very positive factor for a company. The company is less dependent on leverage in 2010 and more dependent on leverage in 2009. The company has better equity position and less risk in 2010 and more risk in 2009 compared to the year 2009.

2010

2009

times interest earned(times)

5 times interest earned 4 3 2 1 0 2010 2009 3.21 2010 2009

4.03

Explanation: From the graph and calculation we find that the company has paid less interest to its shareholders in 2010 because it suffers from more debt expenses relative to the year 2009.So that in 2010 shareholders did not get enough interest because the company was burdened by debt expenses.

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Income before fixed charges and taxes=operating profit+ lease payments (77 page) Income before fixed charges and taxes (2010) =1,635,780,192+13,376,677=1,649,156,869 Income before fixed charges and taxes (2009) =1,001,282,411+15,881,544=1,017,163,955 Fixed charges=lease payments +interest Fixed charges (2010) =13,376,677+508,432,384=521,809,061 Fixed charges (2009) =15,881,544+248,370,850=264,252,394

2010

2009

Fixed charge coverage(times)

4 Fixed charge coverage 3.5 3 2.5 2 1.5 1 0.5 0 2010 2009 2010 2009 3.16 3.84

Explanation: From the graph and calculation we find that in 2010 the companys ability to satisfy fixed financing expenses, such as interest and leases was less than in 2009. This is obviously a negative picture for the company because financial obligation may endanger the position of the firm in the industry.

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5.5 Investment Ratio

2010 n/a

2009 n/a

2010

2009

dividend cover(times)
6 5.8 dividend cover 5.6 5.4 5.2 5 4.8 4.6 4.4 2010 2009 4.9 2010 2009 5.83

Explanation: From the graph and calculation we find that in 2010 the company paid more dividend than in 2009.This investment ratio shows the number of times that ordinary dividend could be paid out of current earnings. This judges companys financial strengths in terms of paying out profits as dividend rather than retaining internally. So we find that company earns more profit in 2010 than in 2009 and paid more dividends relatively compared to 2009.

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2010

2009

P/E ratio
50 40 P/E ratio 30 20 10 0 2010 2009 26.13 2010 2009 44.51

Explanation: PriceEarning ratio is an important investment ratio, which shows the degree that investors are willing to pay per taka of reported profit. We find that in 2010 the p/e ratio is comparatively low than 2009, that means in 2010 the company had earned low profit and so that ordinary shareholders did not earn enough. It also depicts that in 2010 the company was not financially solvent than in 2009.

2010 2009

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Earnings per share(taka)

6 Earnings per share 5 4 3 2 1 0 2010 2009 3.5 2010 2009 5.17

Explanation: By analyzing the graph it is clear that in 2010 ordinary shareholders earned more per share than in 2009. So 2010 was a good year for ordinary shareholders point of view. So company performed well in paying dividend to ordinary shareholders in 2010 relative to 2009. It signifies that company is improving day by day in case of shareholders wealth maximization plan.

2010

2009

0.33

capital gearing ratio

1 capital gearing ratio 0.8 0.6 0.4 0.2 0 2010 2009 0.33 2010 2009

0.82

Explanation: By analyzing the graph it is clear that in 2009 the company was in more debt position relative to 2010. It means that company utilized its creditors fund rather than owners fund in 2009. In 2010 company reduced its debt and increased its owners fund. It is obviously a satisfactory factor for investors.

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