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					Financial Analysis of Usmania Glass Sheet Factory Limited

Financial Analysis of Usmania Glass Sheet Factory Limited
Presenters Faisal Mahmud Tanvir B. Anwar Monwar Hussain Ahmed Minhazul Arefin Md. Parvez Hossain Roll # 01 Roll # 02 Roll # 55 Roll # 59 Roll # 64

Contents
• • • • • • • • • Current Financial Standings Leverage Ratios Liquidity Ratios Efficiency Ratios Profitability Ratios Market-value Ratios Dupont Analysis EFR Take-Aways

Current Financial Standings
• • • • • Started production in 1960. Located in Kalurghat Industrial Area, Chittagong. 51% share is held by Government. Produces Glass Sheet. Financial statement prepared by Hawlader Yunus & Co. • Estimated Net Worth: Around 665 million taka last financial year. • Market price of stock 1622 taka. • Dividend paid last year 30,625,000 taka.

Leverage Ratios
• • • • Debt Ratio Debt Ratio (Including Short Term) Debt-Equity Ratio Times-Interest Earned

Debt Ratio
Debt Ratio= (Long-term debt + value of leases) / (Long-term debt + value of leases + equity)

Year

Long-term debt + value of leases 306,242,353.0 300,773,240.0 0 0 298,913,820.0 0

Long-term debt + value of leases + equity 665,536,580.0 0 638,807,487.0 0 619,330,695.0 0

Debt Ratio

2004-2005 2003-2004 2002-2003

0.46 0.47 0.48

Debt Ratio (including short term)
Debt ratio (including short term debt) = (Long-term debt + value of leases + short-term debt) / (Long-term debt + value of leases + short-term debt + equity) Year Long-term debt + value of leases + shortterm debt Long-term debt + value of leases + shortterm debt + equity 358,553,034.0 717,847,261.0 0 0 369,234,326.0 707,268,573.0 0 350,054,654.0 0 0 670,471,529.0 0 Ratio

2004-2005 2003-2004 2002-2003

0.50 0.52 0.52

Debt-Equity Ratio
Debt-equity ratio = (Long-term debt + value of leases) / Equity

Year

Long-term debt + value of leases 306,242,353.0 0 300,773,240.0 0 298,913,820.0 0

Equity 359,294,227.0 0 338,034,247.0 0 320,416,875.0 0

Debt-equity ratio 0.85 0.89 0.93

2004-2005 2003-2004 2002-2003

Times-Interest Earned Ratio
Times-interest earned = (EBIT + depreciation) / Interest

Year

EBIT + depreciation 79,183,823.00 92,931,328.00 83,544,366.00

Interest

Timesinterestearned Ratio 16.07 13.38 10.70

2004-2005 2003-2004 2002-2003

4,926,120.00 6,944,370.00 7,811,369.00

Liquidity Ratios
• • • • • Net Working Capital to Total Assets Current Ratio Quick Ratio Cash Ratio Interval Measure

Net Working Capital to Total Assets
Net working capital to total assets = Current assets-current liabilities / Total assets

Year

Current assetscurrent liabilities 293,628,650.00 279,377,556.00 241,590,241.00

Total assets 717,847,261.0 0 707,268,573.0 0 670,471,529.0 0

Net working capital to total assets 0.41 0.40 0.36

2004-2005 2003-2004 2002-2003

Current Ratio
Current ratio = Current assets / Current liabilities

Year 2004-2005 2003-2004 2002-2003

Current assets 345,939,331.00 347,838,642.00 292,731,075.00

Current liabilities 52,310,681.00 68,461,086.00 51,140,834.00

Current ratio 6.61 5.08 5.72

Quick Ratio
Quick ratio = (Cash + short-term securities + receivables) / Current liabilities

Year

Cash + shortterm securities + receivables 287,020,270.00 258,768,940.00 204,038,390.00

Current liabilities 52,310,681.00 68,461,086.00 51,140,834.00

Quick ratio

2004-2005 2003-2004 2002-2003

5.49 3.78 3.99

Cash Ratio
Cash ratio = (Cash + short-term securities) / Current liabilities

Year 2004-2005 2003-2004 2002-2003

Cash + shortterm securities 281,526,783.0 0 241,139,594.0 0 203,715,708.0 0

Current liabilities 52,310,681.00 68,461,086.00 51,140,834.00

Cash ratio 5.38 3.52 3.98

Interval Measure Ratio
Interval measure = (Cash + short-term securities + receivables) / (Costs from operations/365) Cash + shortterm Costs from securities + operations/36 receivables 5 287,020,270.0 0 258,768,940.0 0 204,038,390.0 0 425,842.20 440,605.38 433,066.99

Year

Interval measure 674.01 587.30 471.15

2004-2005 2003-2004 2002-2003

Efficiency Ratios
• • • • • • Sales to Asset Ratio Sales to Net Working Capital Days in Inventory Inventory Turnover Average Collection Period Receivables Turnover

Sales to Assets Ratio
Sales to assets ratio = Sales / Average total assets

Year 2004-2005 2003-2004 2002-2003

Sales 196,572,581.0 0 223,725,790.0 0 217,077,653.0 0

Avg. total assets 712,557,917.0 0 688,870,051.0 0 670,471,529.0 0

Sales to assets ratio 0.28 0.32 0.32

Sales to Net Working Capital
Sales to net working capital = Sales / Average net working capital

Year

Sales 196,572,581.0 0 223,725,790.0 0 217,077,653.0 0

2004-2005 2003-2004 2002-2003

Avg. net working capital 286,503,103.0 0 260,483,898.5 0 241,590,241.0 0

Sales to net working capital 0.69 0.86 0.90

Days in Inventory
Days in inventory = Average inventory / (Cost of goods sold/365)

Year 2004-2005 2003-2004 2002-2003

Avg. inventory 62,367,381.50 74,457,702.00 73,378,900.00

COGS/365 393,211.05 406,337.04 425,728.38

Days in inventory 158.61 183.24 172.36

Inventory Turnover
Inventory turnover = Cost of goods sold / Average inventory

Year 2004-2005 2003-2004 2002-2003

COGS 143,522,035.0 0 148,313,019.0 0 155,390,860.0 0

Avg. inventory 62,367,381.50 74,457,702.00 73,378,900.00

Inventory turnover 2.30 1.99 2.12

Average Collection Period
Average collection period (days)= Average receivables / (Sales/365)

Year

Avg. receivables 95,029.50 101,239.00 107,205.00

Sales/365

Average collection period 0.18 0.17 0.18

2004-2005 2003-2004 2002-2003

538,555.02 612,947.37 594,733.30

Receivables Turnover
Receivables turnover = Sales / Average receivables

Year 2004-2005 2003-2004 2002-2003

Sales 196,572,581.0 0 223,725,790.0 0 217,077,653.0 0

Avg. receivables 95,029.50 101,239.00 107,205.00

Receivables turnover 2,068.54 2,209.88 2,024.88

Profitability Ratios
• • • • Net Profit Margin Ratio Return on Assets Ratio Return on Equity Ratio Payout Ratio

Net Profit Margin Ratio
Net profit margin ratio = Net Profit Before Tax / Net Sales

Year 2004-2005 2003-2004 2002-2003

EBIT-tax 50,800,230.00 71,051,000.00 64,174,738.00

Sales 196,572,581.0 0 223,725,790.0 0 217,077,653.0 0

Net profit margin 0.26 0.32 0.30

Return on Assets Ratio
Return on Assets = Net Profit Before Tax / Total Assets

Year

EBIT-tax

Average total assets 712,557,917.0 0 688,870,051.0 0 670,471,529.0 0

Return on asset (ROA) 0.07 0.10 0.10

2004-2005 2003-2004 2002-2003

50,800,230.00 71,051,000.00 64,174,738.00

Return on Equity Ratio
Return on equity = Net Income / Shareholders’ equity

Year

Earnings available for common stockholders 45,368,043.00 64,086,333.00 56,363,369.00

Average equity 348,664,237.0 0 329,225,561.0 0 320,416,875.0 0

Return on equity (ROE)

2004-2005 2003-2004 2002-2003

0.13 0.19 0.18

Payout Ratio
Payout ratio = Dividends Per Share / EPS

Year 2004-2005 2003-2004 2002-2003

Dividend per share 70.00 50.00 60.00

Earnings per share 104.82 183.10 161.04

Payout ratio 0.67 0.27 0.37

Market-value Ratio
• • • Price-earnings Ratio Dividend Yield Market to Book Ratio

Price-earnings Ratio
Price-earnings ratio = Stock price / Earnings per share

Year 2004-2005 2003-2004 2002-2003

Stock price 1,622.00 1,355.00 782.00

Earnings per share 104.82 183.10 161.04

Priceearnings ratio 15.47 7.40 4.86

Dividend Yield
Dividend yield = Dividend per share / Stock price

Year 2004-2005 2003-2004 2002-2003

Dividend per share 70.00 50.00 60.00

Stock price 1,622.00 1,355.00 782.00

Dividend yield 0.04 0.04 0.08

Market to Book Ratio
Market to book ratio = Stock price / Book value per share

Year 2004-2005 2003-2004 2002-2003

Stock price 1,622.00 1,355.00 782.00

Book value per share 633.17 536.98 543.52

Market to book ratio 2.56 2.52 1.44

Dupont System
ROA = (EBIT – tax) / assets = sales/assets * (EBIT-tax)/sales

Year 20042005 20032004 20022003

Sales/assets 0.27 0.32 0.32

(EBIT-tax)/sales 0.26 0.32 0.30

ROA 0.07 0.10 0.10

Dupont System
ROA
0.12 0.1 0.08 0.06 0.04 0.02 0 2002-2003 2003-2004 2004-2005 0.1 0.1 0.07

Dupont System
ROE = (EBIT – tax – interest) / equity = assets/equity * sales/assets * (EBITtax)/sales * (EBIT-tax-interest)/(EBIT-tax)

Year

assets /equit y 2.00 2.09 2.09

sales /asse ts 0.27 0.32 0.32

(EBIT-tax) /sales 0.26 0.32 0.30

(EBIT-taxinterest)/ (EBIT-tax)

ROE

20042005 20032004 20022003

0.90 0.13 0.90 0.19 0.88 0.18

Dupont System
ROE
0.2 0.15 0.1 0.05 0 2002-2003 2003-2004 2004-2005 0.18 0.19 0.13

External fund requirement
EFR = [(A / S) * Δ Sales] - [(L / S) * Δ Sales] - (Forecasted Sales * Net profit margin * Retention Rate)

External fund requirment
-41,299,422. 33

A/S

change in sales
15,886,093. 67

L/S

Forecasted sales (3 yrs avg.)
215,275,453.5 0

Net profit margin
0.23

Retention Rate
0.89

0.32

0.10

Take-Aways
• Usmania Glass Factory is the only public enlisted glass sheet company, 51% share of which is held by government. • Leverage Ratios: debt is still more than 50% of the total capital Employed, but it is declining every year. • Last year it has earned 16 times more than interest paid. • Liquidity Ratios: the company has high liquidity, e.g. 6 to 1 current ratio and almost 6 to 1 quick ratio.

Take-Aways (continued)
• They hold enough liquid assets to meet the expenses for almost two years. • Efficiency Ratios: Increasing investment in assets but lesser cash generated by it due to decreasing sales. • Inventory management is good. • Profitability has fluctuated a bit in last three years. • The dividend payout ratio is on increase. • Market Value Ratios: High investors’ confidence of the growth prospect reflected in the high share price despite not so high dividend.

Thank You

Contents
• • • • • • • • • Current Financial Standings Leverage Ratios Liquidity Ratios Efficiency Ratios Profitability Ratios Market-value Ratios Dupont Analysis EFR Take-Aways


				
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