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On Company Analysis

( Saiham Textiles Mills Ltd. & Apex Spinning & Knitting Mills Ltd.)

Course Code: FIN 404 Course Title: Investment Analysis Semester:Fall

Prepared For: Monjurul Alam Majumder Course Teacher DBA,MIU

Prepared By: Md.Abdullah Al Mamun

Manarat International University


Department Of Business Administration Date of Submission:

Purpose of this assignment:

1. To use financial statements to evaluate and compare Saiham Textile & Appex Spinnings.. -Financial performance -Financial position. 2. To apply analytical tools and techniques to financial statements to obtain useful information to aid decision making.

Financial Ratio Analysis: Financial Ratios can be classified into 5 main categories:-Profitability Ratios -Liquidity ratios -Activity Ratios -Capitalization Ratios -Financial Leverage Ratio

Liquidity ratio of Saiham Textile: Appex Spinning:

Liquidity ratio of

Current Ratio

Current Ratio

= = 1.14

= = 1.13

From this ratio we see Saiham Textile has better ability to meet its current liabilities with its current assets than Appex Spinning.

Liquidity ratio of Saiham Textile: Appex Spinning:


Acid-test Ratio

Liquidity ratio of

Acid-test Ratio

= =

= = .044 = 0.78

From quick ratio we see Appex Spinning has better ability to meet current liabilities with its most liquid assets than Saiham Textile.

Financial Leverage ratio of Saiham Textile: Appex Spinning:


Debt to equity Ratio=

Financial Leverage ratio of

Debt to equity Ratio=

= = 1.03

= = 1.11

From this ratio we see Appex Spinning has more debt utilization in their company than Saiham Textile.

Financial Leverage ratio of Saiham Textile: Appex Spinning:

Financial Leverage ratio of

Debt to Total Asset Ratio

Debt to Total Asset Ratio

= =

=0.51 =1.10 Saiham Textile has .51% total debt from their firms assets, on the other side Appex Spinning has 1.10% total debt from their firms assets. From this we see Appex Spinning has good debt utilization in their company.

Financial Leverage ratio of Saiham Textile: of Appex Spinning:

Financial Leverage ratio

Total Capitalization

Total Capitalization

= 0.94

= 1.11

Appeex Spinning has more debt utilization than Saiham Textile.

Activity ratio of Saiham Textile: Appex Spinning:

Activity ratio of

Receivable Turnover

Receivable Turnover

= 4.27

= 6.74

Appex Spinning is more successful in receivable collection period than Saiham textile. Because Appex spinning 6.74 times collect their receivables & Saiham Textile 4.27 times collect their receivables in a year.

Activity ratio of Saiham Textile: Appex Spinning:


Average Collection period=

Activity ratio of

Average Collection period=

= = 85.5

= =54.2

Activity ratio of Saiham Textile: Appex Spinning:


Inventory Turnover=

Activity ratio of

Inventory Turnover =

=1.80

= 9.56

Appex spinning 9.56 times turn their raw matarials into finished goods.On the other side Saiham textile 1.80 times turn their raw matarials into finished goods. From this we see that Appex Spinning is in a better position.

Activity ratio of Saiham Textile: of Appex Spinning Total Asset Turnover=

Activity ratio

Total Asset Turnover=

=0.72

=4.0

Appex Spinning 4.0 times utilize their assets to generate their sales. On the other side Saiham Textile 0.72 times utilize their assets to generate their sales. From this we can say that Appex Spinning is in a good position.

Profitability ratio of Saiham Textile: Appex Spinning: Gross profit Margin=

Profitability ratio of

Gross profit Margin=

=0.19

=0.096

Saiham Textile is more efficient in operating their firms & making pricing policies.Because Saiham textile has 0.19 gross profit margin.On the other side Appex Spinning has 0.096 gross profit.So Saiham textile is in a good position.

Profitability ratio of Saiham Textile: Appex Spinning: Net profit Margin=

Profitability ratio of

Net profit Margin=

=0.061

=0.0087

Appex spinning is in a weak position than Saiham textile.Because they have only 0.0087 net profit margin on the other side Saiham textile have 0.061 net profit margin.

Profitability ratio of Saiham Textile: Appex Spinning:

Profitability ratio of

ROI=

ROI=

= =0.044

= =0.035

Appes spinning has a poor return on investment.Because they have only 0.035 ROI on the other side Saiham textile has 0.044 ROI.

Profitability ratio of Saiham Textile: Appex Spinning:

Profitability ratio of

ROE=

ROE

=0.089

=0.035

Appex spinning has a poor return on equity.From the comparison of Appex spinning, Saiham Textiles shareholders are more profitable.

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