ULAB School of Business

Bachelor of Business Administration (B.B.A.)

Term Paper on

ACI Limited
Submitted to:
Md. Mohibul Islam
Lecturer,
ULAB School of Business

Date of Submission:18th August, 2014.

Submitted By:
Md.Aqib-An-Nafi 133011065

Md.Ashikur Rahman 133011185

Md.Rezaul Hasan 133011166

Raihana Akter Faria 133011004

Labone Akter Lubna 133011127

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Executive Summary
We made financial and technical analysis of ACI Limited on the years of 2012 and 2011
financial records and based on this. We tried to execute our objectives for this report. Through
our analysis, we hope investors and creditors will get complete picture of the years 2012 and
2011 and analysis to Liquidity Ratios, Activity Ratios, Debt Ratios and Profitability Ratio. We
hope this analysis give a fulfill knowledge to internal and external people who are related with
ACI Limited.

Thought this report we hope to achieve a better understanding the years of 2012 and 2011
financial performance based on different types of ratio analysis. Our aim to find out the different
between these two years financial performance, and make an arguable conclusion which will
help user and ACI Limited to understand its present performance for further growth. Our
concern to make a reasonable analysis between years of 2011 and 2012 performance based on
its years of 2011 and 2012 financial record though analysis of short term Liquidity Ratios,
Activity Ratios, Debt Ratios and Profitability Ratio. This analysis will give a wide knowledge to
internal and external people who are related with ACI Limited particularly investor and
creditors of ACI Limited.

Background of the Report

This papers main concern is to provide valuable information to its investors and creditors so
that they can understand the performance of this corporation for their potential decision. For
better information this report will answer few questions of an investor like.

1. Liquidity of ACI Limited Through CR and QR.

2. Activity of ACI Limited. Through IT, ACP, APP, TAT and FAT.

3. Debt of ACI Limited. Through DR and TIER.

4. Profitability of ACI Limited. Through NPM, EPS, ROA and ROE.

5. All those calculation will answer what would be earning from invested money, the
current strength and weaknesses and even the future opportunities and threats of the
company.
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 6. Whether they have the ability to provide financial rewards sufficient to attract and retain
financing or not?

Moreover, this study will answer short-term creditors question like

1. Whether ACI Limited. has the ability to meet its short-term obligations or not?

Furthermore, we also believe this study will answer a long-term creditors question through
analyzing debt and profitability ratio which will assure the ability of ACI Limited to produce
future revenues and congregate long-term requirement.

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Findings
1. Liquidity analysis:

From liquidity calculation, we can say the Current Ratio of ACI Limited of the year
2011 is higher than the year of 2012 but the Quick Ratio of the year of 2011 is lower
than the year of 2012. This happened due to its current liabilities have increased than
its previous year but kept more inventory than its previous year. In 2012, The Net
Working Capital is lower than the year of 2011 because of the lower investment of
cash and the falling of current assets.

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2. Activity Analysis:

From the valuation of Activity ratio, we get that the Inventory Turnover and the
Average Collection Period of ACI Limited. Inventory Turnover is lower
in2012compared with the year of 2011. This is because, the Net Sales Revenue is
lower than to previous year. Average Collection Period is higher in 2012 compared
with the year of 2011. That means Work-in-process cost is lower than previous year.

On the other hand , the Total Asset Turnover and the Fixed Asset Turnover are in
lower position in 2012, measure up to the year of 2011. However, we can see the vice
versa situation on the Average Payment Period only. It is the only Activity Ratio,
where the Ratio of 2012 is higher than the year of 2011.

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 3. Debt Analysis:

From our calculation in appendix (5) on Debt, Debt-Equity and Time Interest Earned
Ratio, It is fair enough to say that previous years debt, debt-equity and time interest
earned ratio is higher than the previous year. which is not suitable for a company. For
this reason, we can easily say that the firm is on risk because of its higher debt and
higher interest expense.

4. Probability Analysis:

From the calculation of appendix (6), we can state that both Gross and Operating Profit
Margin,Net Profit Margin, Return on Total Assets, Return on equity, Earnings per Share, Price
Earning Ratio is lower on current year than its previous year. The companys sales and profits
have increased but not in a weigh againstits expenses. Equity of company is decrease on current

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year than its previous year. We also analysis that earning from share is decrease on current year
than its previous year.

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** Note: Calculations of the entire ratio have been appended.

Recommendations
For sound and absolute judgment we need to analyze so many things which are closely related
with the company like economic growth of the organization, to reduce production cost, new
equipment for efficiency, new law to protect that particular industry and so on, not only financial
statement. However, we can get an idea through analyzing financial statement which will help us
to get picture of the organization of its present and past economic even financial status and
performance which may help to make further decision. Even if we get insufficient information to
analyze ACI Limited financial performance based on its financial statement, other than we tried
our best to make a comparative study for user as they can take decision about ACI Limited. In
below we made our own comment what also vary person to persons judgment, financial
condition and time difference.

Liquidity Ratios: In Liquidity Ratios we analyzed that happened due to its current
liabilities have increased than its previous year but kept more inventory than its previous year. In

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2012, The Net Working Capital is lower than the year of 2011 because of the lower investment of
cash and the falling of current assets.

Activity Ratios: In Activity Ratios we analyzed that Inventory Turnover is lower

in2012compared with the year of 2011. This is because, the Net Sales Revenue is lower than to
previous year. Average Collection Period is higher in 2012 compared with the year of 2011. That
means Work-in-process cost is lower than previous year.

On the other hand , the Total Asset Turnover and the Fixed Asset Turnover are in lower position
in 2012, measure up to the year of 2011. However, we can see the vice versa situation on the
Average Payment Period only. It is the only Activity Ratio, where the Ratio of 2012 is higher
than the year of 2011.

Debt Ratios: In Debt Ratios we analyzed that Debt, Debt-Equity and Time Interest Earned
Ratio, It is fair enough to say that previous years debt, debt-equity and time interest earned ratio
is higher than the previous year. which is not suitable for a company. For this reason, we can
easily say that the firm is on risk because of its higher debt and higher interest expense.

Profitability Ratios: In a Profitability Ratios we can state that both Gross and Operating
Profit Margin,Net Profit Margin, Return on Total Assets, Return on equity, Earnings per Share,
Price Earning Ratio is lower on current year than its previous year. The companys sales and
profits have increased but not in a weigh againstits expenses. Equity of company is decrease on
current year than its previous year. We also analysis that earning from share is decrease on
current year than its previous year.

N.B.:All of our entire ratio calculations are appended.

Appendix:
1.ACI Limited.

Statement of Financial Position

As at December 31st,2012

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Assets Notes 2012 2011
Property, plant and equipment 2,975,419,918 2,545,580,924
At cost / revaluation -402,190,536 -214,159,844
Accumulated depreciation 2,573,229,381 2,331,421,080
Capital work-in-progress 889,671,313 611,541,022
3,462,900,694 2,942,962,102
Intangible assets 1,297,337 1,816,269
Long-term investments 1,407,597,771 1,197,263,603
Non-current assets 4,871,795,802 4,142,041,974

Inventories 2,128,984,396 1,770,481,777

Trade receivables 1,292,368,456 1,131,611,820
Other receivables 107,406,234 138,454,704
Advances, deposits and prepayments 460,184,564 522,847,653
Advance income tax 150,489,441 122,788,615
Inter-company receivables 4,033,776,402 3,045,084,692
Cash and cash equivalents 161,461,711 223,659,923
Current assets 8,334,671,204 6,954,929,184
Total assets 13,206,467,006 11,096,971,158

Equity
Share capital 237,738,330 197,147,560
Share premium 321,892,801 298,788,486
Capital reserve 1,671,386 1,671,386
Revaluation surplus 894,621,959 895,636,955
Available-for-sale reserve 140,860,042 237,767,126
Retained earnings 3,484,501,642 3,136,486,047
Total equity 5,081,286,160 4,767,497,560

Liabilities
Long-term liabilities 917,187,439 888,406,400
Deferred tax liabilities 106,310,663 125,011,848
Non-current liabilities 1,023,498,102 1,013,418,248

Bank overdrafts 1,374,097,512 905,029,397

Short-term loan from banks 3,856,614,632 2,487,707,979
Long-term loan - current portion 313,862,328 256,410,862
Trade payables 318,773,624 221,220,224
Other payables 856,449,976 939,541,226
Inter-company payables 172,929,856 289,071,143
Obligation under finance lease - current portion 761,582 652,878
Current tax liability 208,193,234 216,421,641
Current liabilities 7,101,682,744 5,316,055,351

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Total liabilities 8,125,180,846 6,329,473,598
Total equity and liabilities 13,206,467,006 11,096,971,158
2.ACI Pharmaceuticals Limited

Statement Of Comprehensive Income

As at December 31st,2012.

Revenue 9,680,061,562 8,513,841,846

Cost of sales -6,089,878,323 -5,317,279,883
Gross profit 3,590,183,239 3,196,561,963
Administrative, selling and distribution expenses -2,670,135,457 -2,193,597,248
Operating profit 920,047,782 1,002,964,716
Other income 137,921,467 64,175,086
1,057,969,249 1,067,139,802
Financing costs -282,555,490 -126,842,315
775,413,759 940,297,487
Provision for contribution to WPPF -38,770,688 -47,014,874
Profit before income tax 736,643,071 893,282,612
Income tax expenses
Current tax expense -199,460,929 -194,212,347
Deferred tax expense 7,933,731 -17,941,192
-191,527,198 -212,153,539
Net profit after tax for the year 545,115,873 681,129,073
Earnings per share
Basic earnings per share 22.94 28.83
Diluted earnings per share 22.79 28.54

Number of Shares used to compute EPS 15,798,000

Price of Per share 40

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 1. Liquidity Ratios:

Current Ratio
2012 2011
1.17 1.31

Quick Ratio Net Working Capital

2012 2011
2012 2011
8,334,671,203.70 6,954,929,183.67
1,232,988,460.00 1,638,873,833.00

2. Activity Ratios:

Inventory Turnover
2012 2011
-2.86 -3.00

Average Collection Period

2012 2011
48.06 42.08

Average Payment Period

2012 2011
0.07 0.05

Total Asset Turnover

2012 2011
0.73 0.77

Fixed Asset Turnover

2012 2011
1.99 2.06

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 3. Debt Ratios:

Debt Ratio
2012 2011
0.62 0.57

Debt-Equity Ratio
2012 2011
1.32 1.30

Time Interest Earned

Ratio
2012 2011
58.24 3.45

4. Profitability Ratios:

Gross Profit Margin

2012 2011
0.37 0.38

Operating Profit Margin

2012 2011
0.10 0.12

Net Profit Margin

2012 2011
0.06 0.08

Earnings Per Share

2012 2011
58.24 68.44

Return On Assets
2012 2011
0.04 0.06
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Return On Equity
2012 2011
2.29 3.45