1.

1 Origin of the report: The report is originated to make a study on

the Annual financial report analysis of ACI Limited as a part of the fulfillment
of BBA Program of Barisal University. As a part of BBA Program this report is
assigned to me by my honorable teacher Tandra Mondal.

1.2 Objective of the report: The purpose of this report is to analyze

ACI Limiteds financial strength and its Share performance in DSE to describe
its core financial strength.

1.3

METHODOLOGY

0F

THE

REPORT:

Data

regarding

the

organization profile collected in the following ways:

Carefully observation of various side of ACI Company Limited.
Discussion with group members.
Online information.

Data collection method:

Some data collected by group discussion with group

members.
Most of the data collected from internet.

Some data collected by observing report and presentation

relates with this topics

1.4 Sources of Data: Secondary Data were used to complete this study.
Sources of the secondary data were:

Website of ACI Limited

Website of Dhaka stock exchange (DSE)
Annual report (2010-2014)
Magazine of ACI Limited.

2.1

Introduction

Financial

statement

analysis (or

financial

analysis) is the process of reviewing and analyzing a company's financial

statements to make better economic decisions. These statements include
the income statement, balance sheet, statement of cash flows, and a
statement of changes in equity. Financial statement analysis is a method or
process involving specific techniques for evaluating risks, performance,
financial

health,

and

future

prospects

of

an

organization.

These

stakeholders have different interests and apply a variety of different

techniques to meet their needs. For example, equity investors are interested
in the long-term earnings power of the organization and perhaps the
sustainability and growth of dividend payments. Creditors want to ensure the
interest and principal is paid on the organizations debt securities (e.g.,
bonds) when due.
Common methods of financial statement analysis include fundamental
analysis, DuPont analysis, horizontal and vertical analysis and the use of
financial ratios. Historical information combined with a series of assumptions
and adjustments to the financial information may be used to project future
performance. The Chartered Financial Analyst designation is available for
professional financial analysts.

2.2 Users of the financial statement analysis: There are a

number of users of financial statement analysis. It is used by a variety of
1. Stakeholders.

2.Such as credit and equity investors.

3.She government.
4.The public.
5. Decision-makers within the organization.
6. The managing committee.
7. The regulatory authorities.
Financial statement analysis is an exceptionally powerful tool for a variety of
users of financial statements, each having different objectives in learning
about the financial circumstances of the entity.

2.3 Types of financial statement:

The 3 types of financial

statement given below:

CR e o t n
dna ied n n
ees e nd d s
eEi n da c r
Bno mi a n l
aeg ns c
esS t a t
Se mh
e ne tt

C o C n R o d e n e t d na e si n en e ds d e B d E a a i l n a r n c n oi c n m e g se S h S s e t a e t t e m e n t

2.4 Tools of Financial statement analysis: We use various tools

to evaluate the significance of financial statement data. Three commonly
used tools are as follows:

Horizontal analysis: Evaluate a series of financial statement data

over period of time.
Vertical analysis: Evaluates financial statement data by expressing
each item in a financial statement as percentage of base amount.
Ratio analysis: Expresses the relationship among selected items of
financial statement data.

2.5 Example of three types financial statement in

Horizontal analysis method: Horizontal analysis also called trend
analysis, is a technique for evaluating a series of financial data over a
period of time. Its purpose is to determine the increase or decrease that has
taken place. This change may be expressed as either amount or percentage.
Here is a example:

Condensed Balance sheet:

Quality Department Store Inc.

Condensed Balance sheet
December 31
Inc
rease or decrease
during 2011
2011
Amount

2010
percent

Assets
Current assets

1, 020, 000

9, 45, 000

75, 000

Plant assets

800, 000

6, 32, 000

167, 500

Intangible assets

15, 000

Total assets

17, 500

1, 835, 000
15.0%

7.9%
26.5%

(2,500)
1, 595, 000

(14.3%)

2, 40, 000

Liabilities
Current liability
13.7%

3, 44, 500

303, 000

Long-term liabilities 4, 87, 500

500)
(1.9%)

497,000

Total liabilities

800,000

8,32,00
4.0%

41, 500
(9,
32,000

Stockholders Equity
Common stocks

275, 400
2.0%

Retained Earnings
Total stockholders

2, 7000

727, 600
38.6%

525, 000

5,400
202, 600

Equity

1, 003, 000
26.2%

795,000

208,000

Total Liabilities and

Stockholders equity 1, 835, 000
15.0%

1, 595,000

240,000

Condensed income statement:

Quality Department Store Inc.
Condensed Income statements
For the years Ended December 31

Inc
rease or decrease
during 2011
2011
Amount

Sales revenue
12.0%
Sales returns

2010
percent

2, 195, 0001, 960,000

1, 23,000

(25,000)

1, 837, 000

2, 60, 000

14.2%

1, 281, 000

1, 140, 000

141, 000

12.4%

816,000

6, 97 000

119,000

12.4%

Net sales

98,000

2, 35,000

2, 097, 000

(20.3%)

Cost of goods
sold
Gross profit

Selling expenses 253,000

211, 500
41, 500

19.6%

Admin. Expenses 104, 000

108, 500
(4,500)

(4.1%)

Total operating
Expenses

3, 57,000

3, 20, 000

37, 000

11.6%
Income from
operation
82, 000

459, 000
21.8%

3, 77, 000

Other revenues
Interest
(18.2%)

9,000

11,000

(2, 000)

40, 500

(4, 500)

Income before tax 4, 32, 000

347, 500

84, 500

24.3%

Income tax expense 168, 200

139, 000

29,200

21.0%

55,300

26.5%

Other expenses
Interest expense
(11.1%)

Net Income

36, 000

263, 800

208, 500

Retained Earnings statement:

Quality Department Store Inc.

Condensed Income statements

For the years Ended December 31

Particulars
Retained earnings,
jan.1
Add: Net Income
Deduct: Dividends
Retained earnings,
Dec, 31

Increase or (Decrease)
During 20111
2011
2010
525, 000
376, 500
263, 800
208, 500
788, 800
585, 000
61, 200
60, 000
727, 600
525, 000

Amount
148, 500
55, 300
203, 800
1, 200
202, 600

Percent
39.4%
26.5%
2.0%
38.6%

Horizontal analysis of changes from period to period is relatively

straightforward is quite useful. But, complications can occur in making the
computations. If van item has no value in a base year or preceding year but
does have a value in the next year, we can not compute a percentage
change. Similarly, if a negative amount appears in the base or preceding
period and a positive amount exists the following year, no percentage
change can be computed.

2.6 Example of three types financial statement in vertical

analysis method: Vertical analysis also called common- size analysis, is
a technique that expresses each financial statement item as a percentage of
base amount. On a balance sheet, we might say that current assets are 22%
of total assets- total assets being the base amount. Or on an Income
statement, we might say that selling expenses are 16% of net sales- net
sales being the base amount. The condensed balance sheet of quality
department store Inc. in horizontal method is given below:

 Condensed Balance sheet

Quality Department Store Inc.

Condensed Balance sheet
December 31
Particulars

2011
Amount

Assets
Current assets
Plant assets
Intangible assets
Total assets

Liabilities
Current liabilities
Long-term
liabilities
Total liabilities
Stockholders
equity
Common stock
Retained
earnings
Total
stockholderss
equity
Total liabilities
and stockholders
equity

1, 02, 0000
800, 000
15, 000
1, 835, 000

percent

2010
Amount
Percent

55.6%
43.6%
0.8%
100.0%

945, 000
632, 500
17, 500
1,595,000

59.2%
39.7%
1.1%
100.0%

18.8%
26.5%
45.3%

303, 000
497,000
800, 000

19.0%
31.2%
50.2%

275, 400
727, 600

15.0%
26.5%

270, 000
525,000

16.9%
31.9%

1, 003, 000

45.3%

795,000

49.8%

1,835,000

100.0%

1,595,000

100.0%

344, 500
487, 500
832, 000

 Condensed income statement

Quality Department Store Inc.

Condensed Income statements
For the years Ended December 31

December 31
Particulars

2011
Amount

Sales revenue
Sales returns and
allowance
Net sales
Cost of goods
sold
Gross profit
Selling expenses
Admin. Expenses
Total operating
expenses
Income from
operations
Other revenues
Interest
Other expenses
Interest
expense
Income before

percent

2010
Amount
Percent

2, 195, 000

104.7%

1, 960, 000

106.7%

98,
2, 097,
1, 281,
816,
253,
104,

000
000
000
000
000
000

4.7%
100.0%
61.1%
38.9%
12.0%
5.0%

6.7%
100.0%
62.1%
37.9%
11.5%
5.9
%

357,000

17.0%

123, 000
1, 837, 000
1, 140, 000
697,
000
211,
500
108,
500

459,000

21.9%

9,000

0.4%

36,000
432, 000
168, 200
263, 8000

1.7%
20.6%
8.0%
12.6%

320,
000

17.4
%
20.5
%

377,000
11,00
0

0.6
%

taxes
Income tax
expense
Net income

2.2
%
18.9
%
7.5
%
11.4
%

40,50
0
3, 47,
500
139,00
0
208,
500

Condensed Income Statements

(in thousands)

Particulars
Net sales
Cost of goods sold
Gross profit
Selling and
administrative
expenses
Income from
operations
Other expenses
and revenues
Net income

Quality Department
Store Inc.
Dollars
Percent
2, 097
100.0%
1,281
61.1%
816
38.9%

357

17.0%

459

21.9%

Macys Inc
Dollars
26, 405,
000
15, 738,
000
10, 667,
000

Percent
100.0%
59.6%
40.4%

31.3%
9.1%

8, 256, 000
195
264

9.3%
12.6%

2, 411, 000

4.4%
4.7%

1, 155, 000
1, 256, 000
From the above discussion it can be easily said that financial statement is so
much important for a company. From the analysis of financial statement of a

company we can get a clear picture of that company easily. Besides for take
important sometime authority needs some important information which can
be easily find from financial statement analysis. Every company should take
proper steps to analysis its financial statement. Because from the financial
statement analysis authority can take steps which is need for the company
to make it developed. So it can also said that if any company does not do its
financial analysis properly they will fall in a great trouble because the can not
take right decision because of lacking information. For the development of a
company the analysis of financial statement is so much important. In a word
there is no option of financial statement analysis if we a want a clear picture
of a company within a glimpse. If the company does not analysis the
financial statement properly the can not be developed and the company will
face losses day by day. So every company should take proper step to do
financial statement analysis at any cost and authority should maintain it
strictly .

3.1
Introduction
ACI
Bangladesh Manufacturers Limited was a subsidiary of world renowned
multinational ACI Plc and was a listed public limited company under Dhaka
Stock Exchange. ACI's mission is to achieve business excellence through
quality by understanding, accepting, meeting and exceeding customer
expectations. ACI follows International Standards on Quality Management
System to ensure consistent quality of products and services to achieve
customer satisfaction. ACI also meets all national regulatory requirements
relating to its current businesses and ensures that current Good
Manufacturing Practices as recommended by World Health Organization is
followed properly. ACI has been accepted as a Founding Member of the
Community of Global Growth Companies by the World Economic Forum which
is the most prestigious business networking organization.
:

ACI was so named in 1992. But the history of ACI dates back to 1926, when
Imperial Chemical Industries (ICI) was incorporated in the United Kingdom as
four companies namely Novel Industries Limited, British Dyestarts
Corporation, Brunner Mond and Company Limited and United Alkali Company
merged. Since then ICI plc has been operating worldwide as a multinational
company.
In the year of formation ICI started operation in the Indian subcontinent in
the name of ICI (India) limited. After separation of the India and Pakistan in
1947, the Karachi office of ICI (India) Limited renamed to be ICI (Pakistan)
Limited.

3.2 Mission: ACIs mission is to enrich the quality of life of people through
responsible application of knowledge, skills and technology. ACI is committed
to the pursuit of excellence through world-class products, innovative
processes and empowered employees to provide the highest level of
satisfaction to its customers. To fulfill the mission of this company all of the
member of this organization are working hard.

3.3 Vision:
Endeavor to attain a position of leadership in each category of its businesses.

Attain a high level of productivity in all its operations through effective and efficient use of
resources, adoption of appropriate technology and alignment with our core competencies.
Develop its employees by encouraging empowerment and rewarding innovation.
Promote an environment for learning and personal growth of its employees.
Provide products and services of high and consistent quality, ensuring value for money to its
customers.

Encourage and assist in the qualitative improvement of the services of its suppliers and
distributors.
Establish harmonious relationship with the community and promote greater environmental
responsibility within its sphere of influence

3.4 Values
Quality

Customer Focus

Fairness
Transparency
Continuous Improvement
Innovation

3.5 Strategic Business Unit:

ACI has diversified into four major strategic business divisions which include
Health Care, Consumer Brands, Agribusinesses and Retail Chain.
Strategic Business Units:
Pharmaceutical
Consumer Brands
Agribusiness

Animal Health

Crop care & Public health

Fertilizer

Crops

Subsidiaries:
ACI Formulations Ltd.
ACI Agrochemicals
Apex Leathercrafts Limited
ACI Salt Limited
ACI Pure Flour Limited

3.6 Organogram:

Joint Ventures:
ACI Godrej Agrovet Private Limited
Tetley ACI (Bangladesh) Limited
Asian Consumer Care (Pvt.) Limited

4.1 Financial Ratios: Financial ratios are useful indicators of a firm's

performance and financial situation. Most of the ratios can be calculated
from information provided in the financial statements.
Objectives of Financial Ratio Analysis:

To
To
To
To

analyze the financial statements of ACI Ltd.

calculate the different types of financial ratios of the company.
know the financial condition of the company.
know the companys financial development for last five years.

For calculating different types of ratios for the project work, the following
formulae were used:

Liquidity Ratios:
1. Current Ratio

CURRENT ASSETS
CURRENT LIABILITIES

Its a measures a companys ability to meet short term obligations with short
term assets, a useful indicator of cash flow in the near future. A social
enterprise needs to ensure that it can pay its salaries, bills and expenses on
time. Failure to pay loans on time may limit your future access to credit and
therefore your ability to leverage operations and growth. The one problem
with the current ratio is that it does not take into account the timing of cash
flows
2. Quick Ratio (Acid-Test Ratio) =

QUICK ASSETS
CURRENT LIABILITIES
A more stringent liquidity test that indicates if a firm has enough short-term assets (without
selling inventory) to cover its immediate liabilities. This is often referred to as the acid test
because it only looks at the companys most liquid assets only (excludes inventory) that can be
quickly converted to cash). A ratio of 1:1 means that a company can pay its bills without having
to sell inventory.
3. Working Capital = Current Asset Current Liabilities
Working Capital is a measure of both a company's efficiency and its short-term financial health.

Activity Ratios:
1. Inventory Turnover Ratio = REVENUE or SLAES
INVENTORY
It is the calculation the number of times inventory is turning over into sales during the year or
how many days it takes to sell inventory. This is a good indication of production and purchasing
efficiency. A high ratio indicates inventory is selling quickly and that little unused inventory is
being stored (or could also mean inventory shortage). If the ratio is low, it suggests overstocking,
obsolete inventory or selling issues.
2. Total Asset Turnover Ratio = REVENUE or SALES
TOTAL ASSETS

Total Asset Turnover Ratio is the company's total revenue, the invoice, cash
payments and other revenues. Total Asset Turnover Ratio represents the
value of goods and services provided to customers during a specified time
period - usually one year. How efficiently a business generates sales on each
currency of assets. An increasing ratio indicates a company is using its
assets more productively.

Profitability Ratios:
1. Net Profit Ratio =

NET PROFIT
SALES or REVENUE
A ratio of profitability calculated as net income divided by revenues, or net
profits divided by sales. It measures how much out of every currency of sales
a company actually keeps in earnings. Profit margin is very useful when
comparing companies in similar industries. A higher profit margin indicates a
more profitable company that has better control over its costs compared to
its competitors. This ratio measures your ability to cover all operating costs
including indirect costs.
. 2. Return on Equity = NET INCOME COMMON FOR STOCKHOLDERS
STOCKHOLDERS EQUITY
The amount of net income returned as a percentage of shareholders equity.
Return on equity measures a corporation's profitability by revealing how
much profit a company generates with the money shareholders have
invested. This is one of the most important ratios to investors. How does this
return compare to less risky investments like bonds
2. Return on Assets (ROA) = NET INCOME
TOTAL ASSETS
Its a measurement of the ability of a company to turn the assets into profit.
This is a very useful measure of comparison within an industry. A low ratio
compared to industry may mean that your competitors have found a way to
operate more efficiently. After tax interest expense can be added back to
numerator since ROA measures profitability on all assets whether or not they
are financed by equity or debt.
3. Earnings per Share (EPS) =

NET INCOME
TOTAL NO. OF COMMON STOCK OUTSTANDING

The portion of a company's profit allocated to each outstanding share of

common stock. Earnings per share serve as an indicator of a company's
profitability

RATIO ANALYSIS
Financial ratios can be classified into three types. Those are:
A) Liquidity ratio B) Solvency ratio C) Profitability ratio
LIQUIDITY RATIOS:
These ratios actually show the relationship of a firms cash and other current assets to its current
liabilities. Three ratios are discussed under Liquidity ratios. They are:
1. Current ratio: This ratio indicates the extent to which current liabilities are covered by those
assets expected to be converted to cash in the near future. Current assets normally include cash,
marketable securities, accounts receivables, and inventories. Current liabilities consist of
accounts payable, short-term notes payable, current maturities of long-term debt, accrued taxes,
and other accrued expenses.
Current Ratio = Current Assets/Current Liabilities. Following table shows the current ratios of
ACI Formulations Limited in different years.
Current
ratio

2010

2011

2012

2013

2014

1.92:1

1.83:1

2.05:1

2.47:1

2.74:1

Analysis:
We can see that in 2010 the current assets were 1.92 times than the current liabilities. A minimum
decrease is seen in 2011 but then 2012 to 2013; the ratio has kept increasing and resulted at 2.74
times in 2014. We can say that the capability of paying current liabilities through current assets is
increasing.
2. Quick/ Acid Test ratio: This ratio indicates the firms liquidity position as well. It actually
refers to the extent to which current liabilities are covered by those assets except inventories.
Quick Ratio = (Current Assets-Inventories)Current Liabilities. Following table shows the Quick/
acid test ratios of ACI Formulations Limited in different years:

Acid test
ratio

2010

2011

2012

2013

2014

1.52:1

1.33:1

1.51:1

1.92:1

2.15:1

Analysis:
We can see that in 2010 the quick assets were 1.52 times than the current liabilities. A minimum
decrease is seen in 2011 &2012 but then 2013& 2014; the ratio has kept rapidly increasing and
resulted at 2.15 times in 2014. We can say that the capability of paying current liabilities through
quick assets is increasing.

3. Inventory Turnover Ratio: Inventory turnover measures the number of times, on average,
the inventory is sold during the period. Its purpose is to measure the liquidity of the inventory.

Inventory Turnover = Cost of goods sold / Average inventory. Following table shows the
inventory turnover ratios of ACI Formulations Limited in different years:
2010
Inventory
turnover ratio 6.45times

2011

2012

2013

2014

5.04time
s

4.55times

4.27times

4.2time
s

Analysis:

Analysis shows a gradual declination of Inventory Turnover Ratio over the first year. In 2010
the ratio was 6.45 times, and then it rapidly decreased to 5.04 times in the following year and
dropped further to 4.55 times in the year 2012, 4.27 times in 2013 and 4.2 times in 2014.

Current ratio
Acid test ratio

Inventory turnover ratio

0
2010

2011

2012

2013

2014

Chart of liquidity ratios

Solvency ratio:
Solvency ratios measure the ability of a company to survive over a long
period of time.
Debt to total assets: The debt to total assets ratio measures the
percentage of the total assets that creditors provide.
Debt to total assets ratio = Total debt / Total assets
Debt to
total
assets

2010

2011

2012

2013

2014

26.95%

26.014%

24.45%

22.26%

21.24%

Analysis: The analysis shows a gradual decreasing of debt to total assets ratio all over the years.
In 2010 the ratio was 26.95% and then it rapidly decreased to 26.014% in the following year and
further decreased to 24.45% in the year 2012, 22.26% in 2013 and 21.24% in 2014.

30.00%
25.00%
20.00%
15.00%

Debt. To total asset

10.00%
5.00%
0.00%
2010

2011

2012

2013

2014

Chart of solvency ratios

Profitability ratios:
Profitability is the net result of a number of policies and decisions. Profitability ratios show the
combined effects of liquidity, asset management and debt on operating results.
There are three important profitability ratios that we are going to analyze:
1. Profit Margin 2. Asset turn over 3. Return on Asset
1. Profit margin: Profit margin is a measure of the percentage of each
dollar of sales that results in net income.
Profit margin = Net income / Net sales
Profit margin

2010

2011

2012

2013

2014

11%

10%

9%

8%

7%

Analysis: The analysis shows decreasing in its profit margin ratio from 2010 to 2014 rapidly.
So we can say that our business is a high volume business.
2.Asset turnover: Asset turnover measures how efficiently a company uses
its assets to generate sales.

Asset turnover = Net sales / Average assets

Asset turn over 2010
1.56
times

2011
1.52
times

2012
1.47
times

2013
1.35
times

2014
1.29
times

Analysis: The analysis shows decreasing in its assets turnover ratio from 2010 to 2014 rapidly.
In 2010 the ratio was 1.56 times and then it rapidly decreased to 1.52 times in the following year
and further decreased to 1.47 times in the year 2012, 1.35 times in 2013 and 1.29 times in 2014.

3.Return on assets: Return on assets indicates the measurement of

profitability.
Return on assets = Net income / Average assets
Return on
assets

2010
17%

2011
15%

2012
12%

2013
10%

2014
8%

Analysis: The analysis shows decreasing in its return on assets ratio from 2010 to 2014 rapidly.
In 2010 the ratio was 17% and then it rapidly decreased to 15% in the following year and further
decreased to 12% in the year 2012, 10% in 2013 and 8% in 2014.

160%
140%
120%
100%
Profit margin

80%

Return on assets
Asset turn over

60%
40%
20%
0%
2010

2011

2012

2013

2014

4.2 Horizontal Analysis:

The Horizontal Analysis of Income

Statement Chart

250
200
150
100
50
0
-50

2010 2011 2012 2013 2014

net sales
COGS
Gross profit
operating
expense
operating
income
net profit before
tax
income tax
net profit

-100

The Horizontal Analysis of

Income Statement
Net sales of 2010 were 539554916; increased 31.44% in 2011, 40.57% in 2012, 45.50% in 2013
and 47.23% in 2014.

COGS are increased 19.18% in 2011, 29.72% in 2012, 36.07% in 2013 and 38.20% in 2014 than
base year amount 444958348.

Gross profit was 94596568 in 2011; the amount increased 2010-2012 but decreased in 2014.

Net profit before Tax was 37013276 in 2010.the amount increased 183.20% in 2011, 180.18% in
2012, 148.95% in 2013 and 138.40% in 2014.

Net profit after Tax was 26834625. It increased 194% in 2011, decreased 180.18% in 2012,
130% in 2013 and 122.45% in 2014.

The Horizontal Analysis of Balance Sheet

200

150

100

current asset
total non-current asset
current liablities
total shareholder eqity
total eqity and liablity

50

0
2011

2012

2013

2014

-50

The Horizontal Analysis of

Balance Sheet

change in percentage rate of the company total current assets increases 82.45% in 2011, 83.58%
in 2012 From the horizontal analysis of the balance sheet of ACI Formulation limited, we can see
the, 107.65% in 2011 and 151.10% in 2014 on base amount 258593052 of 2011.

Total non-current assets increases 36.46% in 2011, 67.15% in 2012, 70.05% in 2013 and 68.84 in
2014 on base amount 284284230 of 2010.

Current liabilities of 2010 are 260265756.but it decrease 5.82% in 2011, 0.06 % in 2012, &
increased 0.56% in 2013 and 0.88% in 2014.

Total shareholders equity increased 135.17% in 2011, 161.77% in 2012, 175.21% in 2013 and
196.75% in 2014 when base amount was 28261152 in 2010.

Total assets and liabilities of 2010 was 542877382, increased 67.58% in 2011, 84.18% in 2012
and 97.17 % in 2013 and 117.23% in 2014.

4.3 Vertical Analysis

The Vertical Analysis of Balance Sheet

80

70

60

50
current asset
investment

40

current liablities
share captial
total share holder equity

30

20

10

0
2010

2011

2012

2013

2014

Vertical Analysis of Balance Sheet

The vertical analysis of ACI Formulation limited shows all components as a percentage of total
assets or total asset or total liability and equity amount. Let total asset base amount 100%.
Current assets increase 47.63% in 2011, 51.86% in 2012, 47.48% in 2013, 50.12% in 2014, and
55.06% in 2015. On the same way property plant asset increase 52.36%, 42.64%, 41.40%,
42.12%, and 37.60% for respective year.

Then total equity and liability base amount 100%. Current liabilities increase 47.09%, 26.95%,
26.01%, 24.45% and 22.26% for the respective years.

On the same way total share holders equity increase 52.06%, 73.05%, 73.99%, 72.67% and
71.11% for the respective years.

Vertical analysis of income statement

The vertical analysis of ACI Company shows all the components as a percentage of total assets
or total liabilities and equity amount. Let total asset is base amount (100%).

Current asset increase 47.63% in 2010, 51.86% in 2011, 47.48 % in 2012, 50.12% in 2013, and
55.06% in 2014.

At the same way, property plant asset increase 52.36 %, 42.64%, 41.40%, 42.12% and 37.60 %
for the respective year.

Current liabilities increase 47.9%, 26.95%, 26.01%, 24.45 % and 22.26 % for the years
respectively.

Total share holder equity increase 52.06%, 73.05%, 73.99%, 72 .67% and 71.11% for the years
respectively.

ACI Limited
Horizontal Analysis of
Share Holders Equity Statement
Increase or decrease in %
Particular
s
Share
capital on
the
beginning
of the
period
Tax
holiday
reserve
Revaluati
on reserve
Retained
earnings
Equity at
the end of
the period

2010

2011

2012

2013

2014

445280000

534336000

498456320

658301950

724132140

18245470

18245470

18245470

18245470

2011

2012

2013

2014

0%

0%

0%

0%

18245470
(4.99)% (3.12)% (5)%

95679250
105398985

664603705

90895288
98310787

739787545

62604130
98459385

777765305

59473923
102625070

838646413

57243652

(0.04
)%
32.30
%

6.72%

0.15%

42.30

11.31%

5.13%

7.83% 11.54
%

135776820

935398081

In the horizontal analysis of ACI Companys share holders equity statements we can see tax
holiday reserve o% is same for the years 2011, 2012, 2013, &2014.
Revaluation reserve decrease 4.99%, 3.12%, 5% & 0.04% for the respective years.
Retained earnings increase 6.72 %, 0.15 %, 42.30% & 32.30 % for the year 2011, 2012, 2013,
2014 respectively
Now total shareholder equity increases 11.31% , 5.13% , 7.83% , and 11.54% for the years
respectively 2011 , 2012 , 2013 , and 2014

5.1 Recommendations:
After analyzing all the ratios and parameters of the share performance
following recommendations for ACI Limited can be offered:
ACI Limited is maintaining a healthy financial condition they should
invest more in new business with its working capital to obtain more
financial liquidity in the future.
They should decrease the no. of days in Days Sales Outstanding (DSO)
to collect its receivables more quickly to convert its sales into cash. So
that they can reinvest in the business operation and generate more
sales.
ACI Limited is enjoying financial leverage but they need to have a
proper management to minimize the financial risk associated with the
company.
Though ACI Limited is in profitable situation but they need to
concentrate to increase the Net Profit Ratio and Return on Asset Ratio,
which will ultimately increase the EPS.
The performance of the securities is very smooth in the market. They
should provide risk premium to compensate the risk offered by the
securities. Offering risk premium in the bearish market may encourage
more investors to invest in the securities of ACI Limited.

5.2 Conclusion:
ACI Limited is a well reputed corporate in Bangladesh. They are operating
their business from 1992 with the stated values and have earned the respect
of the stakeholders. The company is operating in a smooth way in terms of
financial activities. They have sustained their business by good management
of the assets and providing wealth to the stockholders.
Financial analysis is necessary to know about a business and the
performance of its share. All analysis reveals the financial strength of ACI

Limited. ACI limited have immense opportunity to expand its business in

future and contribute more in the economy of Bangladesh.

To accomplish this project necessary references have given below:

References of personal Interview:
1. . Md. Habibur Rahman, Gereral Manager, Marketing, CC & PH, 26th July
2015
2. Dr. Zahidul Islam, Marketing Manager , CC & PH, 27th July 2015
3. Anwarul Haque, Brand Manager, Flora, 28th July 2015
4. Md. Mahamood Rassul, Corporate Accounts Manager, 29th July 2015
5. Mohammad Kabir Hossain, Asst. Manager, Finance dept., 30th July
2015
6. Kaiser Rajib Sherpa, Assistant Manager, HR, 29th July 2015
7. Sheikh Salamot Ullah, Product Executive, CC & PH, 02nd August 2015
References of Books:
Jones, P. Charles, Introduction to Financial Management, Richard D. Irwin, Inc. 1992.
Jones, P. Charles (2010). Investments Principles and Concepts (11th ed.). John Wiley &
Sons, Inc, New Delhi
Advance Chemical Industries Limited, Annual Report 2010
Advance Chemical Industries Limited, Annual Report 2011
Advance Chemical Industries Limited, Annual Report 2012
Advance Chemical Industries Limited, Annual Report 2013
Advance Chemical Industries Limited, Annual Report 2014
References of Website:
Dhaka Stock Exchange, viewed from 04 August 2015- 05 August 2015,
http://www.dse.com.bd/
ACI Limited, viewed from 02 July 2015- 05 July 2015, http://www.aci-bd.com
Investopedia - Educating the world about finance, viewed from 07 August
2015- 15 August 2015, http://www.investopedia.com/