Assignment

On
Ratio Analysis of Singer
Bangladesh Limited
Submitted by
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SBL, a multi product financial Institution, We have analyzed on
ratio of SBL, on the basis of that, on the common size analysis,
we have compared the companys 4 years performance (!!4"!#$,
and that is not so very %ood position& 'hou%h the earnin% per
show and dividend per shares reset is %ood, but the debt ratio,
total asset turnover ratio, fi(ed asset turnover ratio current ratio,
)S*, net profitability mar%in ratio, return on asset, return on
common e+uity are not in %ood position&
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OBJECTIVE OF THE STUDY
'o ,now about a companys past present and future position&
'o understand and compare a companys internal position to
ma,e necessary aid&
Limitation of te St!"#
-nalysis based on company (SBL$ annual report (!!4"!#$&
We cant %et the current -nnual .eport of SBL (!!/$&
So!$ces
SBL -nnual .eport !!#,!!0,!!1,!!4&
)ha,a Stoc, 2(chan%e&
SBL 3ain *ffice&
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Com%an# P$ofi&e
Com%an# 'ame(
SI452. B-45L-)2S6 LI3I'2) (SBL$
Co$%o$ate Histo$#.
7 8ear of 2stablishment of9 Incorporation :;#;
7 <ommencement of Leasin% Business :;/#
7 2stablishment of Branch in the main port city,
<hitta%on% :;;:
7 Listed on the )ha,a Stoc, 2(chan%e :;;=
7 Licensed by Ban%ladesh Ban, for
deposit ta,in% :;;1
His )ision
'o be the most admired and respected family company in the country&
His mission
*ur mission is to improve the +uality of life of people by providin% comforts
and conveniences at affordable prices&
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Comm!ni*e Ana&#sis+ Time Se$ies Ana&#sis
'his analysis we can evaluates performance of the internal
pro%ress year to year& 6ere we have analyzed of the year !!#,
!!0, !!1, and !!4&
SBL
'>"in million
SI 4ame of the .atio !!# !!0 !!1 !!4
:
?rofit 3ar%in"
?rofitability .atio
&/0@ 4&1/@ &/=@ 1&0/@
.eturn on -sset"
?rofitability .atio
4&44@ 0&1:@ =&:!@ #&:#@
=
.eturn on 2+uity"
?rofitability .atio
#&;@ =1&4@ &#0@ 4&4:@
4 .eceivable 'urnover"
-sset Atilization
0&#0 0&0/ #&/! /&:0
1
-vera%e <ollection
?eriod"-sset Atilization
1=&/ 1=&/0 40&:# 44&:1
0 Inventory 'urnover"
-sset Atilization
&14 &1= &#= &14
#
Bi(ed -sset 'urnover
.atio" -sset Atilization
:!&/# /&=0 :!&= :!&0#1
/ 'otal -sset 'urnover
.atio" -sset Atilization
:&11 :&4 :&!;4 :&=1=
;
<urrent .atio" Li+uidity
.atio
:&: :&= :&4: :&00
:! Cuic, .atio" Li+uidity
.atio
!&1: !&14 !&/ !&0#
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::
)ebt& .atio" )ebt
Atilization ratio
/=&#4@ /:&0@ /0&=/@ /:&/1@
: 'ime Interest 2arned"
)ebt Atilization ratio&
:&#; &!/ 4&:# :=&41#
:=
Bi(ed <har%e <overa%e"
)ebt Atilization ratio
:&#; &!/ 4&:0 :=&40
:4
2arnin% ?er Share(2?S$ 0:&0 #!&:/ ;&:= 4#&#1
:1 )ividend ?er
Share()?S$
=1&!! =1&!! =!&!! /!&!!
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P$ofit ,a$gin -atio
4et profitability mar%in ratio measures the percenta%e of each
sales money remainin% after all costs and e(penses, includin%
interest, ta(es and preferred stoc, dividends, have been deducted&
It is calculates as this formulaD
4et ?rofit
?rofit 3ar%in .atio E
Sales
'he analyses of 1 years of SBL are, as followsD
!!# !!0 !!1 !!4
&/0@ 4&1/@ &/=@ 1&0/@
Inte$%$etation
In !!# the net profit mar%in ratio was &/0@ which is lower then
!!0 and !!4 where the ratios were 4&1/@ and 1&0/@ and this as
not better performance of the firm&
-ecommen"ation
<ompany should increase their 2BI' to ,eep increasin% net profit&
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-et!$n on Asset
.eturn on asset, often called the return on investment& It measures
the overall effectiveness of mana%ement in %eneratin% profits with
its available assets& We can %et this ratio by this formula,
4et Income
.*- E
'otal -ssets
6i%her rate of this ratio indicates the hi%her9 better position of a
firm& *ur analysis of the firm SBL areD
!!# !!0 !!1 !!4
4&44@ 0&1:@ =&:!@ #&:#@
Inte$%$etation
In !!4 the ratio was #&:#@ which was hi%her then !!1, !!0
and !!# where the ratios were =&:!@,0&1:@ and 4&44@ and
these indicates the poor position then !!4&
-ecommen"ation
'he position of the firm is very bad accordin% to this ratio so it
should need to increase its 4et income as soon as possible to
improve or increase the company situation&
-et!$n on Stoc.o&"e$s E/!it#
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'he ratio of net income to common e+uity measures the return on
common e+uity or the rate of return on stoc,holders investment,
4et Income
.eturn on e+uity E
'otal stoc,holders e+uity
If the present return on e+uity is more then past ratios that
indicates the better position to the present then past& *ur analysis
of .*2 of SBL are %iven below
!!# !!0 !!1 !!4
#&;@ =1&4@ &#0@ 4&4:@
Inte$%$etation
In !!4 the return on common e+uity of SBL was 4&4:@ which
is hi%her then !!1 where the ratio was &#0@& 'he best position
of the ratio was in !!4 where the ratio was 4&4:@ and in !!0
and !!# ratio were =1&4@ and #&;@&
-ecommen"ation
<ompany should increase its 4et Income a%ainst of Stoc,holders
e+uity to improve the situation of this company&
-ecei)a0&es t!$no)e$
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'he receivables turnover indicates the number of times on the
avera%e that receivables turnover each year& .eceivables turnover
is calculated followsD
<redit sales
.eceivables turnover E
.eceivables
Te $atio of $ecei)a0&es t!$no)e$ of tis fi$m is gi)en 0e&ow(
Inte$%$etation(
In !!4 the debt ratio of the SBL was /&:0 which is hi%her then
!!1, where the ratio was#&/!& But this is hi%her then !!0, !!#
where the ratios were 0&0/F 0&#0&
-ecommen"ation
<ompany must increase the ratio by decreasin% total liabilities or
increasin% total asset for achievin% better position&
A)e$age co&&ection %e$io" 1DSO2
-vera%e collection period also called )ays sales outstandin%
()S*$, is used evaluate the firms ability to collect its credit sales
in a timely manner& )S* is calculated as followsD
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!!# !!0 !!1 !!4
0&#0 0&0/ #&/! /&:0
.eceivables
-vera%e collection period E
-vera%e daily credit sales
Te $atio of A)e$age co&&ection %e$io" of tis fi$m is gi)en
0e&ow(
-ecommen"ation(
In !!4 the )S* of SBL was 44&:1 days which was increased&
But this also too much time to collect -9.& In !!1, !!0, !!#
the time was 40&:#, 1=&/0 and 1=&/&
Inte$%$etation(
3uch should aware about this fact that they should try to decrease
the time period to collect money from -9. to %et a %ood position&
In)ento$# t!$no)e$(
'his ratio indicates the efficiency of the firms in sellin% product&
'he inventory turnover ratio is defined as followsD
<ost of %oods sold
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!!# !!0 !!1 !!4
1=&/ 1=&/0 40&:# 44&:1
Inventory turnover E
Inventory
Te $atio of in)ento$# t!$no)e$ of tis fi$m is gi)en 0e&owD
!!# !!0 !!1 !!4
&14 &1= &#= &14
Inte$%$etation(
In !!4 the inventory turnover ratio of the SBL was &14 which is
very close to one another& -nd here in !!1, !!0, !!# the ratio
was &#=, &1= and &14&
-ecommen"ation
<ompany must increase the ratio by decreasin% total liabilities or
increasin% total asset in better position&
Fi3e" Asset T!$no)e$
'he fi(ed asset turnover ration measures how effectively the firm
uses its plant and e+uipment to help %enerate sales& It is the ration
of sales to fi(ed assts&
Sales
Bi(ed -ssets 'urnover .atio E
Bi(ed -ssets
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If the present fi(ed asset turnover ratio is %reater than past ratio
that would be better for a company& *ur analyses of SBL for fi(ed
asset turnover ratio of 4ears are
!!# !!0 !!1 !!4
:!&/# /&=0 :!&= :!&0#1
Inte$%$etation
In !!4, fi(ed asset turnover ratio was :!&0#1which was less then
!!#, where the ratio was:!&/#& We can also see in !!1 F !!0s
ratio were :!&= F/&=0&
-ecommen"ation
By this analysis we can understand that sales position is %ood
accordin% to its fi(ed asset which indicates that companys
effective uses the fi(ed assets& So to improve this salutation
company should increase it sales by usin% its fi(ed assets most
effectively&
Tota& Asset T!$no)e$
'he total -sset turnover ratio measures how effectively the firm
uses its total assets to help %enerate sales& It is the ratio of sales to
total assets&
Sales
'otal asset turnoverD
'otal assets
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If the present total assets turnover ratio is hi%her then previous it
would be better for the companys present performance& *ur
analysis of this ratio of SBL of 4 ears is,
!!# !!0 !!1 !!4
:&11 :&4 :&!;4 :&=1=
Inte$%$etation
In !!4 the total asset turnover was :&=1=which is lower then
!!# where the ratio was :&11 But there are lower performance
in!!1, !!0 where the ratio were :&!;4, :&4&
-ecommen"ation
By the analysis we can say that, company must increase their
sales&
C!$$ent -atio
'he <urrent ration measures then ability firms to meet its short"
tern obli%ations& It is e(pressed as followsD
<urrent assets
<urrent .atioD
<urrent liabilities
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<urrent -sset includes cash, account receivable and inventories&
-nd current liabilities consist of all payables, current maturities of
lon% tern debt, accrued e(penses& It the current liabilities are
risin% fast than current -ssets, the <. will fall and when <. is
increased this post year, the present performance of the company
will be better then post performance& 6ere is the 4years <. of
SBLD
!!# !!0 !!1 !!4
:&: :&= :&4: :&00

Inte$%$etation(
In !!# the <. of SBL was tell which was lower than !!4 when
the ratio :&:which is worst position durin% 4 years& !!4 are the
sure which was considered as %ood performance&
-ecommen"ation(
By the analysis of 4 years <. of SBL& We can find that the
company hasnt done well over the year and to improve the
situation it should %raphically enlar%e <. by increasin% <- or
decreasin% <L&
4!ic. $atio(
'he +uic, ratio or acid test ratio is calculated by deductin%
inventories from current assets and dividin% the result by current
liabilities& 'he +uic, ratio is a variation of the current ratio& 'he
+uic, ratio or acid test ratio is calculated as followsD
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<urrent assets"Inventory
Cuic, ratio E
<urrent liabilities
Te $atio of 4!ic. $atio f tis fi$m is gi)en 0e&ow(
Inte$%$etation(
In !!4 the debt ratio of the SBL was !&0#which is hi%her then
!!#, where the ratio was!&1:& But this is lower then !!1, !!0,
where the ratios were !&/, !&14&
-ecommen"ation
<ompany must decrease the ratio by decreasin% total liabilities or
increasin% total asset in better position&
De0t -atio
'he debt ratio measures the proportion of total assets financed by
the firms creditors& Its formulaD
'otal Liabilities
)ebt .atio
'otal -ssets
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!!# !!0 !!1 !!4
!&1: !&14 !&/ !&0#
'otal debt includes both <L and LLB tern debt, creditors prefer
low debt ratios because the lower the ratio the %reater the cushion
a%ainst creditors losses in the event of li+uidation& *ur analysis of
this ratio of SBL for 4 years is %iven belowD
!!# !!0 !!1 !!4
/=&#4@ /:&0@ /0&=/@ /:&/1@
Inte$%$etation(
In !!4 the debt ratio of the SBL was /:&/0 which is lower then
!!#, where the ratio was /=&#4& But this is lower then !!1
where the ratios /0&=/@
-ecommen"ation(
<ompany must decrease the ratio by decreasin% total liabilities or
increasin% total asset in better position&
Time Inte$est Ea$ne" -atio
'he time interest earned ratio, measures the firms ability to ma,e
contractual interest payment, Sometimes it also called as interest
covera%e ratio, the formula of this ratio isD
2arnin% before interest ta,es
'ime interest earned .atio E
Interest <har%es
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'his ratio measures the e(tent to which operatin% income can
decline before the form is unable to meet its annual interest costs&
If the present ratio is hi%her then post then it would better for the
firm& But the company has to pay ta( fewer for lower time interest
earned& *ur analyses of this SBL are,
!!# !!0 !!1 !!4
:&#; &!/ 4&:# :=&40
Inte$%$etation
In !!4 the time interest earned ratio was :=&40 which were
hi%her then !!#, where the ratio was :&#;& In !!0 thou%h ratio
was &!/ which was lower than !!1&
-ecommen"ation
By the analysis of 4 years ratio we can say that, if the company
wishes to decrease its ta(ation, the company should increase their
2BI'&
Fi3e" ca$ge co)e$age
Bi(ed char%e covera%e measures the firms ability to meet all
fi(ed obli%ations rather then interest payment alone, on the
assumption that failure to meet any financial obli%ation will
endan%er the position of the firm& 'he formula of this ratio isD
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Income before fi(ed char%e and ta(es
Bi(ed char%e covera%e E
Bi(ed char%e
Te $atio of fi3e" ca$ge co)e$age of tis fi$m is gi)en 0e&ow(
Inte$%$etation(
In !!4 the time interest earned ratio was :=&40 which were
hi%her then !!#, where the ratio was :&#;& In !!0 thou%h ratio
was &!/ which was lower than !!1&
-ecommen"ation(
By the analysis of 4 years ratio we can say that, if the company
wishes to decrease its ta(ation, the company should increase their
2BI'&
Ea$ning Pe$ sa$e 1EPS2
2?S represents the amount canned on behalf of each outstandin%
share of common stoc, not the amount of earnin%s actually
distributed to share holders& 2?S is calculated as follows&
2-' (earnin% after ta($
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!!# !!0 !!1 !!4
:&#; &!/ 4&:0 :=&40
2arnin% ?er Share E
4umber of shares
Te $atio of EPS of tis fi$m is gi)en 0e&ow(
!!# !!0 !!1 !!4
0:&0 #!&:/ ;&:= 4#&#1
Inte$%$etation(
In !!# the earnin% per share of SBL was 0:&0@ which is lower
than !!0, where the ratio was #!&:/@& But the ratio of !!1 was
;&:@ which is lower than !!4 where the ratio was 4#&#1@&
-ecommen"ation(
2?S is closely watched by then investin% public and is considered
an important indictor of corporate 2?S success and by the above
analysis we can see the %ood position of the firm&
Di)i"en" Pe$ Sa$e 1DPS2
)?S represent the amount of cash actually distributed to each
shareholder& It is calculated by
<ash )ividend
)?S E
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4umber of Share
6ere is the dividend per share of the SBL,
!!# !!0 !!1 !!4
=1&!! =1&!! =!&!! /!&!!
Inte$%$etation(
'he ratio of dividend per share of !!#, !!0, !!1 and !!4 are
=1@, =1@, =!@and /!@& Which are same over years and it
decreases 1!@ in !!1&It rises 1@in !!0&
-ecommen"ation(
.atio rate was by this analysis we can see the increasin% and this
should be encoura%e to be attract the shareholder&
Fina& -ecommen"ation
'he 2?S and )?S of the SBL were in %ood position but the firm
must should be were of its increasin% liabilities& -nd it also try to
utilize its assets by effective uses& In other hands the time period
of re+uired account receivable collectin% which should be
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decreased& -nd to increase the total asset turnover the firm should
increase its sales and to increase its net income, it should increase
its 2B' company must should were of these fact to reach in the
better position&
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