Liquidity RatioThe liquidity ratio of a firm is measured by its ability to satisfy its short term obligation as they

came due. Liquidity refers to the solvency of the firms overall financial position –the ease with it

can pay its bills.

Current ratioThe current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-term obligations. To gauge this ability, the current ratio considers the total assets of a company (both liquid and illiquid) relative to that company’s total liabilities.

Formulas: Current AssestCurrent liability

Here,

Year 2011 2012 2013 2014

Current Assets1268176843 1222369260 1408553466

1,320,330,290

Current Liability930,201,888 877473962 1128293403 1040962126

Year 2011 2012 2013 2014Current Ratio 1.363335056 1.39305474 1.2483929 1.268374955

So the current ratio is,

1

2011 2012 2013 2014

1.151.2

1.251.3

1.351.4

1.45Current Ratio

Decision: Generally, the higher the current ratio the more liquid the firm is considered to be. A current ratio of 2.0 is occasionally cited as acceptable. Since the company’s current ratio of 2011 was 1.363335056 and in 2014 is 1.268374955 so the company still lying in the acceptable line but gradually decreasing its current liquidity ratio. So, 2012 current ratio is more acceptable.

Quick (Acid-Test) Ratio

The acid-test ratio is a strong indicator of whether a firm has sufficient short-term assets to cover its immediate liabilities. Commonly known as the quick ratio, this metric is more robust than the current ratio, also known as the working capital ratio, since it ignores illiquid assets such as inventory.

Formulas: Current Assest− ¿Current liability

¿

Here,

Current Assets1268176843 1222369260

1408553466

1,320,330,290

Current Liability930,201,888 877473962

1128293403 1040962126

Inventory907342244 715872045 875860190 811,413,008

So,

Year 2011 2012 2013 2014The acid-test ratio

0.387909983 0.57722193 0.472123 0.488891257

2

2011 2012 2013 20140

0.10.20.30.40.50.60.7

Qucik(Acid-Test) Ratio

Decision: Companies with an acid-test ratio of less than 1 do not have the liquid assets to pay their current liabilities and should be treated with caution. The higher the quick ratio, the better the position of the company. The commonly acceptable current ratio is 1, but may vary from industry to industry. So the 2012 (0.57722193) is more acceptable.

Activity Ratio:Measure the speed with which various accounts are converted into sales or cash inflows or

outflows.

Inventory Turnover

Inventory turnover is a ratio showing how many times a company's inventory is sold and replaced over a period. The days in the period can then be divided by the inventory turnover formula to calculate the days it takes to sell the inventory on hand or "inventory turnover days."

Formulas: Cost of goods soldIventory

Here,

year 2011 2012 2013 2014

Inventory907342244 715872045 875860190 811,413,008

Cost of Goods Sold 2,942,378,95 3,629,828,68 2,948,342,36 3,546,802,96

3

3 6 2 6

So,

Year 2011 2012 2013 2014Inventory turnover 3.242854582 5.07049928 3.3662249 4.371143833

2011 2012 2013 20140

1

2

3

4

5

6

Invetory Turnover

Invetory Turnover

Decision: This ratio should be compared against industry averages. A low turnover implies poor sales and, therefore, excess inventory. A high ratio implies either strong sales or ineffective buying. High inventory levels are unhealthy because they represent an investment with a rate of return of zero. It also opens the company up to trouble should prices begin to fall. Here, the low turnover is 2011 (3.242854582) and high turnover is 2012 (5.07049928).

Average Collection Period

The approximate amount of time that it takes for a business to receive payments owed, in terms of receivables, from its customers and clients.

Formulas: Accounts ReciveableAverage sales per day

4

Here,

Year 2011 2012 2013 2014

Accounts Receivable9,308,500 82,036,136 98,149,748 29,909,719

Average Sales Per Day

3,207,314,733

3,933,346,104

3,305,717,280

3,844,681,256

So,

Year 2011 2012 2013 2014Average Collection Period 1.05932930

9 7.61265062 10.837181 2.83951951

2011 2012 2013 20140

2

4

6

8

10

12

Average Collection Priod

Decision: Effective accounts receivable management practices lead to timely customer collection. Tight credit policies have spill-over effects for the rest of a company's operations.

Here, 2013 (10days) is more acceptable

Average Payment Period

5

Average payment period means the average period taken by the company in making payments to its creditors. It is computed by dividing the number of working days in a year by creditor’s turnover ratio.

Year 2011 2012 2013 2014

Accounts Payable2,802,055 3,336,069 3,982,605 4,564,113

Average Purchase Per Day327709444 3425897525 3113063169 3481236118

Formulas: Accounts PaybleAverage Purchases per day

Here

So,

Year 2011 2012 2013 2014Average Collection Period

0 5.029 6.18 7.2

2011 2012 2013 20140

1

2

3

4

5

6

7

8

Average Payment Priod

6

Decision: A shorter payment period indicates prompt payments to creditors. Like accounts payable turnover ratio, average payment period also indicates the creditworthiness of the company. But a very short payment period may be an indication that the company is not taking full advantage of the credit terms allowed by suppliers. Here, 2014 7 days is more acceptable.

Total Asset turnoverThe ratio of the value of a company’s sales or revenues generated relative to the value of its assets. The Asset Turnover ratio can often be used as an indicator of the efficiency with which a company is deploying its assets in generating revenue

Formulas: SalesTotal Asset

Here,

Sales

3,207,314,733

3,933,346,104

3,305,717,280

3,844,681,256

Total Assets

1,485,154,543

1,571,415,244

1,758,652,867

1,693,029,263

So,

Year 2011 2012 2013 2014Total Asset

turnover2.159583155 2.50305966 1.8796872 2.270888838

7

2011 2012 2013 20140

0.51

1.52

2.53

Total Asset turnover

Decision: The lower the total asset turnover ratio (the lower the Times), as compared to historical data for the firm and industry data, the more sluggish the firm's sales. This may indicate a problem with one or more of the asset categories composing total assets - inventory, receivables, or fixed assets. Here, 2012 2.5 times is more acceptable.

Debt Ratio

A financial ratio that measures the extent of a company’s or consumer’s leverage. The debt ratio is defined as the ratio of total – long-term and short-term – debt to total assets, expressed as a decimal or percentage. It can be interpreted as the proportion of a company’s assets that are financed by debt.

Formulas: Total LiabilityTotal Assets

Here,

Year 2011 2012 2013 2014

Total Assets

1,485,154,543

1,571,415,244

1,758,652,867

1,693,029,263

Total Liability

1,079,963,920

1,019,973,962

1,240,793,403

1,130,977,648

So,

Year 2011 2012 2013 2014Debt Ratio 0.727172755 0.64907984 0.7055363 0.668020142

8

2011 2012 2013 20140.6

0.620.640.660.68

0.70.720.74

Debt Ratio

Decision: When the debt ratio is low, principal and interest payments don't command such a large portion of the company's cash flows, and the company is not as sensitive to changes in business or

interest rates from this perspective. However, a low debt ratio may also indicate that the company has an opportunity to use leverage as a means of responsibly growing the business that it is not taking

advantage of. Here, 2012 (0.64907984) is more acceptable.

Time Interest Earned RatioA metric used to measure a company's ability to meet its debt obligations. It is calculated by taking a company's earnings before interest and taxes (EBIT) and dividing it by the total interest payable on bonds and other contractual debt. It is usually quoted as a ratio and indicates how many times a company can cover its interest charges on a pretax basis

Formulas: EarningBefor Interest∧TaxInterest

Here,

Year 2011 2012 2013 2014

Earnings Before Interest and Tax255876181 284782908 336710675

266559246

Interest23393735 31270134 47873256 49817670

So,

Year 2011 2012 2013 2014Time Interest Earned

Ratio10.93780796 9.10718541 7.0333774 5.350696771

9

2011 2012 2013 20140

2

4

6

8

10

12

Time Interest Earned Ratio

Decision: Generally, a ratio of 2 or higher is considered adequate to protect the creditors’ interest in the firm. A ratio of less than 1 means the company is likely to have problems in paying interest on its borrowings. Here, 2014 (5.350696771) is more acceptable

Profitability Ratio:Profitability ratios enable to analysts to evaluate the firm’s profit with respect to a given level of

sales, a certain level of assets or the owners investment.

Gross Profit Margin:A financial metric used to assess a firm's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold. Gross profit margin serves as the source for paying additional expenses and future savings.

Formulas: Gross ProfitSales

Here,

Year 2011 2012 2013 2014

Gross Profit264,935,780 303,517,418 357,374,918 297,878,290

Sales3,207,314,733 3,933,346,104 3,305,717,280 3,844,681,256

So,

Year 2011 2012 2013 2014Gross Profit Margin 8.260361145 7.71651947 10.810813 7.747801968

10

2011 2012 2013 20140

2

4

6

8

10

12

Gross Profit Margin

Decision: A company with high gross margin ratios means that the company will have more money to pay operating expenses like salaries, utilities, and rent. Since this ratio measures the profits from selling inventory, it also measures the percentage of sales that can be used to help fund other Operating margin ratio shows whether the fixed costs are too high for the production .Here, 2013 (10.810813) is better than others ratio.

Operating Profit Margin

The operating margin ratio, also known as the operating profit margin, is a profitability ratio that measures what percentage of total revenues is made up by operating income. In other words, the operating margin ratio demonstrates how much revenues are left over after all the variable or operating costs have been paid. Conversely, this ratio shows what proportion of revenues is available to cover non-operating costs like interest expense

Formulas: OperatingProfitSales

Here,

Year 2011 2012 2013 2014

Operating profit9059599 18734510 20664243 31319044

Sales3,207,314,733 3,933,346,104 3,305,717,280 3,844,681,256

So,

Year 2011 2012 2013 2014Operating Profit Margin 0.282466791 0.47629956 0.6251062 0.814607035

11

2011 2012 2013 20140

0.10.20.30.40.50.60.70.80.9

Operating Profit Margin

Decision: Operating margin ratio shows whether the fixed costs are too high for the production or sales volume. High or increasing operating margin is preferred because if the operating margin is increasing, the company is earning more per dollar of sales. Here, 2014(0.814607035) is better than other ratio.

Net Profit MarginThe profit margin ratio, also called the return on sales ratio or gross profit ratio, is a profitability ratio that measures the amount of net income earned with each dollar of sales generated by comparing the net income and net sales of a company. In other words, the profit margin ratio shows what percentage of sales are left over after all expenses are paid by the business.

Formulas: Earning Available forCommon StockholdersSales

Here,

Year 2011 2012 2013 2014Earning Available for common stockholders 302113045 325943730 190524266 96575100

Sales

3,207,314,733

3,933,346,104

3,305,717,280

3,844,681,256

So,

Year 2011 2012 2013 2014Net Profit

Margin0.336566159 0.59524238 4.8210783 0.443224649

12

2011 2012 2013 20140

1

2

3

4

5

6

Net Profit Margin

Decision: Net profit margin is an indicator of how efficient a company is and how well it controls its costs. The higher the margin is, the more effective the company is in converting revenue into actual profit. Here, 2013(4.8210783) is more acceptable.

Earnings per ShareThe portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serves as an indicator of a company's profitability.

Formulas: Earning Avilable for commons tockholdersNumber of share of common stockoutstanding

Here,

Year 2011 2012 2013 2014Earning Available for common stockholders 302113045 325943730 190524266 96575100

Number of share of common stock outstanding570240 570240 570240 570240

So,

13

Year 2011 2012 2013 2014Earnings per share 18.93016274 41.058051 279.48095 29.88316323

2011 2012 2013 20140

50

100

150

200

250

300

Earning Per Share

Decision: There is no rule of thumb to interpret earnings per share. The higher the EPS figure, the better it is. A higher EPS is the sign of higher earnings, strong financial position and, therefore, a reliable company to invest money. Here, 2013(279.48095) is more acceptable

Return on total asset

The return on assets ratio, often called the return on total assets, is a profitability ratio that measures the net income produced by total assets during a period by comparing net income to the average total assets. In other words, the return on assets ratio or ROA measures how efficiently a company can manage its assets to produce profits during a period.

Formulas: Earning Avilable for commonstockholdersTotal Assets

14

Here,

Year 2011 2012 2013 2014Earnings Available for common stockholders 302113045 325943730 190524266 96575100

Total Assets

1,485,154,543

1,571,415,244

1,758,652,867

1,693,029,263

So,

Year 2011 2012 2013 2014The return on assets 0.726842607 1.48992719 9.0621191 1.006513908

2011 2012 2013 20140123456789

10

Return on total asset

Decision: The greater a company's earnings in proportion to its assets (and the greater the coefficient from this calculation), the more effectively that company is said to be using its assets. Here, 2013 (9.0621191) is better

15

Particulars Current Sales 25% (+) increase in sales

Years 2011 2012 2013 2014 2011 2012 2013 2014

Sales 3234242998 3963651163 3350702764 3883739312 40428037487 4954563954 4188378455 5097407841

Less:

Variable

Cost

2942378953 3629828686 2948342362 2532152514 3677973691 4537285858 3685427953 3165190643

Total

Contribution

291864045 333822477 402360402 1351586798 364830057 417278096 502950502 1932217199

Less: Fixed

Operating

Cost

191218095 179840444 196051488 165947788 191218095 179840444 196051488 165947788

EBIT 100645950 153982033 206308914 1185639010 173611962 237437652 306899014 1766269411

Less:

Interest

66457479 107277682 143941673 104130313 66457479 107277682 143941673 104130313

EBT 34188471 46704351 62367241 1081508697 107154483 130159970 162957341 1662139098

Less: Tax 23260883 31164150 47788736 49476094 23260883 31164150 47788736 49476094

EAT 10927588 155402014 14578505 1032032603 83893600 98995820 115168605 1612663004

No. of Share 5702400 5702400 5702400 5702400 5702400 5702400 5702400 5702400

EPS Tk19.16 Tk.2.73 Tk.2.56 Tk.180.98 Tk.147.17 Tk.17.36 Tk.20.1 Tk.282.8

% change in

EBIT

72.5% 54.1% 48.76% 48.97%

% change in

EPS

667.8% 535.9% 689 56.26%

DOL 2.9 t. 2.17 t. 1.95t.t. 1.14 t. 2.9 t. 2.17 t. 1.95t.t. 1.96 t.

DFL 2.94 t. 3.297 t. 3.31t 1.10 t. 2.94 t. 9.89t. 14.13t. 1.15 t.

DTL 8.5times 7.15 6.45 1.25 8.5times 21.44 27.56 2.25

Note: Taka in Million.

16

Decision2011:DOL:Since the degree of operating leverage is 2.9 times.25%in sales will

result(2.9*25)=72.5%increase in EBIT.

DFL: Since the degree of Financing leverage is 9.21 times.72.5% in sales increase will result

(2.1*25)=52.5%increase in EPS

DTL: Since the degree of total leverage is 26.7 times.25%in sales will

result(26.7*25)=667.5%increase in EPS.

2012:DOL: Since the degree of operating leverage is 2.17 times.25% increase in sales will result

(2.17*25)=54.25% increase in Sales

DFL: Since the degree of Financing leverage is 9.89 times.54.25% increase in EBIT will result

(54.25*29.89)=536.53% increase in EPS

DTL: Since the degree of total leverage is 21.44 times.25%in sales will result

(21.44*25)=536%increase in EPS.

2013DOL: Since the degree of operating leverage is 1.95 times.25% increase in sales will result

(1.95*25)=48.76% increase in EBIT

DFL: Since the degree of Financing leverage is 14.13 times.48.76% increase in EBIT will result

(14.13*48.75)=688.98% increase in EPS

DTL: Since the degree of total leverage is 27.56 times.25% increase sales will result

(27.56*25%)=691.25% increase in EPS.

2014DOL: Since the degree of operating leverage is 1.96 times.25% increase in sales will result

(1.96*25)=49% increase in EBIT

DFL: Since the degree of Financing leverage is 1.15 times.49% increase in EBIT will result

(1.15*49)=56.35% increase in EPS

DTL: Since the degree of total leverage is 2.25 times.25% increase sales will result

(2.25*25%)=56.25% increase in EPS.

17

18