Report on

Ratio Analysis Apex Weaving & Finishing Mills Ltd. Course Code Fin ( 201)

Submitted By:
Md: Noman Khan Id# 081200106 Eastern University

Submitted To:
Rajib Lochan Das Lecturer Bachelor Of business Administrative Submission Date: 28/August/2012

Eastern University

28/August/2012 Rajib Losan Das Lecturer Department : Bachelor of Business Administration

Subject: Submission of the report on Ratio Analysis Dear Sir, With humble submission we want to thank you for assigning us the pragmatic report on Ration Analysis. We have really enjoyed various steps preparing the report. We have made strong Group works and have also collected different data from Apex Weaving & Finishing Mills Ltd. Annual report 2010&2011. We think this report enriched our practical knowledge on Business Math. There may be some unwilling mistakes. We think the mistakes in the report will be kindly excused. With thanks & best regards, Sincerely yours, Md.Noman Khan ID: (081200106) BBA (15thBatch)

 Executive Summary A ratio is a way of comparing two or more quantities.Analysing any companys current Ration, quick ratio, Debt-Equity ratio, Gross Margin percentage, Net Profit Margin, Operating Profit Margin, Depreciation Expense to Operating expense ratio, Inventory Turnover, Times Interest Earned is Ration analysis. Ratio analysis is used to judge the financial success of an Economic entity. One popular ratio is the current ratio which is current assets divided by Current liabilities. This provides an idea of whether the entity can pay forthcoming bills. A ratio of less than one is a dangerous signal in that current bills are greater than current assets such as cash. This report is based on the rules of Business Mathematics. It carries a minimum marks. This report will help us to upgrade our grades we get in our exams. It also enrich our Knowledge about ratio analyzing of companies.

Acknowledgement I would like to acknowledge Mr. Rajib Losan Das Bachelor of Business Administrative For this supervision and valuable guidance. During the Preparation of this report we have collected many important information from various books and articles. I would also like to acknowledge those authors.

 History Apex Weaving and Finishing Mills Ltd. is a Public Limited Company established in 1993. AWFML started commercial production in the year 1996 and is awfully integrated textile mill dedicated to producing top quality Home furnishing for export to the European and North America market. It is a 100% Export oriented composite textile mill providing in-house design facility, wide-width Weaving, Printing, Dyeing, Finishing and Stitching unit from within a single compound. The current production capacity is 120,000 meters (printed & dyed) of 100% cotton & poly cotton blends per day. AWFML is one of the largest Public Limited Companies in the country listed on its Stock Exchanges and authorized capital of BDT 750,000,000/-. The paid up capital of the Company is BDT 350,000,000/-, which consists of BDT 100/-each. Apex is also one of the best recognized corporate names in the country, known for its strong financial performance and modern entrepreneurship. The impressive list of it's customers is testament to the company's productive efficiency, strict adherence to Eco Friendly to the company's productive efficiency, strict adherence to Eco Friendly Total Quality Management and compliance with Good Manufacturing Practice, according to the criteria set by reputed buyers.

Company Overview The Company is a publicly quoted firm engaged in the ownership and operation of weaving mills in Bangladesh. It conducts its business from its registered head office located in Dhaka 1000, Bangladesh. It was incorporated in the year 1993. The companys business operation is primarily involved in the operation of a weaving mill producing household linen, including sheeting, shirting, and suiting. It also produces screen print, curtain, industrial and technical fabric and all sorts of textile produce. The companys internal operation is under the supervision and management of its Managing Director Equal Hassan Manhood. It is publicly traded on the Dhaka Stock Exchange under the ticker symbol APEXWEAV

 Business Summary The Company Is Owns And Operates Weaving Mills In Bangladesh.

Description And History The Company Owns And Operates Weaving Mills In Bangladesh & Established In 27 October 1993 And Listed In The Dhaka And Chittagong Stock Exchange. The Company Is 100% Export Oriented Home Textile Industry To Produce Printed Bed Sheet, Screen Print, Curtain, Industrial & Technical Fabric And All Sorts Of Textile Product.

Introduction The study and interpretation of the relationships between various financial variables, by investors or lenders. An integral aspect of fundamental analysis involves performing what many would call ratio analysis. This involves calculating a number of different industry standard ratios and comparing them to various benchmarks. The benchmarks can be the ratios of other competitors, industry average ratios, or industry rules-of-thumb. Theres no set procedure for performing ratio analysis because it all depends on the type of company youre analyzing certain industries have industry specific ratios. Regardless, this article will give you an overview of some of the standard ratios and what they may tell us about a company. Ill group ratios into four categories used to evaluate the different facets of a companys performance and overall condition: liquidity, operating performance, leverage, and equity valuation. The Current Ratio is the perhaps best-known measure of a companys liquidity. The Quick Ratio is a more stringent measure of a companys short-term liquidity position. Inventory Turnover measures how efficient the firm is in processing inventory and inventory management. It measures how lean the firm runs with respect to inventory and how quickly it can sell its inventory. The Debt-to-Total Capital Ratio measures the degree to which the firm has been financed by debt.

The Interest Coverage Ratio can help to determine the firms ability to repay its debt obligations. Another way of measuring whether a company will be able to meet upcoming debt obligations is to use the Cash Flow to Interest-Bearing Debt Ratio. Countless ratios exist, and this list is by no means exhaustive. Ive tried to identify the most widely used and what are in my opinion, the most relevant ratios in the industry. Ratio analysis works best as a supplement to other stock analyses. Remember, you have to make comparisons among companies in a particular industry, or to historical averages. Performing ratio analysis correctly will take time, a lot of time, but when it comes to investing your money, you should always be willing to spend time to make an informed decision. Objective & Methology Our Objective is to find the different kind of ratio of Apex weaving & Finishing Mills Ltd. Formulas are given below: a) Current Ratio = b) Quick Ratio = Current Assets Current Liabilities Current Assets-Inventory or Stock Current Liabilities Total Debt Total Equity

c) Debt-Equity Ratio =

d) Gross Margin = e) Net Profit Margin =

Gross margin x 100 Net Sales Net profir after tax x100 Net sales Operating Profit x 100 Net sales Depreciation Expense Total Operating Expense

f) Operating Profit Margin =

g) Depreciation Expense to operating Expense Ratio = h) Inventory turnover = Cost of goods sold Average inventory or stock

) Current Ratio :

Year Result . b) Quick Ratio ; Year Result Year Result . d) Gross Margin: Year Result e) Net Profit : Year Result

2010 0.835:1

2011 0.906:1

2010 0.487 : 1 2010 1.462: 1

2011 0.473: 1 2011 1.610: 1

c) Debt- Equity Ratio:

2010 0.0915 2010 0.0300

2011 0.0927 2011 0.0307

f) Operating Profit Margin : Year Result . g) Depreciation Expense to Operating Expense Ratio: Year Result Year Result 2010 8.99:1 2010 4.636 2011 0.015: 1 2011 3.727 2010 3.72 % 2011 3.79 %

h) Inventory Turnover:

Findings:

 Comment: In the year 2011 current ratio has been increased. Comment: In the year 2011 Quick ratio decreased. Comment: In the year of 2011 Time Interest Earned decreased Comment: In the year 2011 debt equity ratio increased. Comment: In the year 2011 debt equity ratio increased Comment: In the year 2011 Net Profit increased. Comment: In the year 2011 Operating Profit Margin increased Comment: In the year of 2011 Inventory turnover decreased.

Conclusion & Recommendation: Ratios are just one number divided by another and as such really dont mean much. The trick is in the way ratios are analyzed and used by the decision maker. A good strategy is to compare the ratios to some sort of benchmark, such as industry averages or to what a company has done in the past, or both. Once ratios are calculated, an analyst needs some benchmarks to find out where the company stands at that particular point. Useful benchmarks are industry comparisons and company trends. It may be useful to compare a company to certain industry averages to get a feel for how the company is performing. In that case it is necessary to obtain industry performance measures. One of the ways in which financial statements can be put to work is through ratio analysis. Ratios are simply one number divided by another; as such they may or not be meaningful. In finance, ratios are usually two financial statement items that may be related to one another and may provide the prudent user a good deal of information. Of the myriad of ratios that could be generated, some will be more meaningful than others. Generally ratios are divided into four areas of classification that provide different kinds of information: liquidity, turnover, profitability and debt

 References: 1) Keiso, kimmel, Accounting Principles, 8th Edition. 2) www.google.com Appendix 2010 a) Current Ratio = 622506903 / 727271267 = 0.835: 1 b) Quick Ratio = 354288520 / 727271267 = 0.4871: 1 c) Debt-Equity Ratio =511705905 / 350000000 = 1.462: 1 d) Gross Margin = 165515792 / 1808017202 = 0.091 e) Net Profit = 54418834 / 1080172002 = 0.030098 f) Operating Profit Margin = 67223266 / 10808017202 x 100 = 3.718 % g) Dep. expense to Operating expense Ratio = 883986 / 982526 = 8.993:1 h) Inventory Turnover = 1642501410 / 354288520 = 40636 times

2011 a) Current Ratio = 781357357 /861743601 =0.906: 1 b) Quick Ratio = 407872802 / 861743601 =0.4733: 1 c) Debt-Equity Ratio = 563715651 / 350000000 = 1.611: 1 d) Gross Margin = 178411895 / 1922638295 = 0.092795 e) Net Profit = 59061927 / 1922638295 = 0.030719 f) Operating Profit Margin =72958907 / 1922638295 x 100 = 3.79 % g) Dep. expense to Operating expense Ratio = 1610024 / 10542988 = 0.053: 1 h) Inventory Turnover = 1744226400 / 407872802 = 3.728 times