1. Name- Md. Mahfuzur Rahman (Shahin)
ID- 1020611
Subject- Fin460
RATIO ANALYSIS ON BEXIMCO LMT.
1. Current ratio : current asset/current liabilities
Current ratio of 2009 : (11,526,373,536/ 4,835,836,508 )= 2.38 times
Current ratio of 2010 : (22,659,992,465/10,387,333,054)=2.18 times
Current ratio of 2011 : (45,339,106,305/24,458,447,194)= 1.85 times
Current ratio shows a firmโs ability to cover its current liabilities with its current assets. The current
ratio had shown a healthy improvement in 2009 & it was more liquidity position. But in 2011 shows
lower current ratio which means the firm has lower ability to pay its bills.
2. Acid test ratio : (current asset โ inventories)/current liabilities
Acid test of 2009 : (11,526,373,536- 3,440,843,696) / 4,835,836,508 = 1.67 times
Acid test of 2010 : (22,659,992,465-4,406,964,821) / 10,387,333,054 = 1.76 times
Acid test of 2011 : (45,339,106,305-5,787,165,141) / 24,458,447,194 = 1.62 times
Acid- test ratio shows a firmโs ability to meet current liabilities with its most liquid assets. Those result
of acid test more likely to same. In 2010 acid test ratio was increasing by 1.76 times which is
decreased by 1.62times in 2011.
3. Average collection period :Account receivable / daily credit sales
Average collection period on 2009 : 1,467,635,347/( 5,327,783,716/365) = 100.55 days
Average collection period on 2010 : 11,686,784,943 /(18,980,964,619/365) = 224.73 days
Average collection period on 2011 : 22,301,349,217 / (29,339,932,714/365) =277.44 days
It indicates the ability of collecting money from account receivable. At present, company
does collect money from the account receivable in 277.44days. Whereas in 2010 collected
money in only 224.73 days. So the company loose to liquidity to collect its money.
4. Account receivable turnover: credit sales / account receivable
Account receivable turnover in 2009 : 5,327,783,716 / 1,467,635,347 = 3.63 times
Account receivable turnover in 2010 : 18,980,964,619 / 11,686,784,943 = 1.62 times
Account receivable turnover in 2011 : 29,339,932,714 / 22,301,349,217 = 1.32 times
It has showed lower trend since the company gains 1.32 times account receivable turnover
in 2011 which is lower than 2010 & 2009.
2. 5. Inventory turnover : cost of goods sold / Inventory
Inventory turnover in 2009 : 1,358,255,528 / 3,440,843,696 = 0.39 times
Inventory turnover in 2010 : 10,715,521,890 / 4,406,964,821 = 2.43 times
Inventory turnover in 2011 : 16,260,877,280 / 5,787,165,141 = 2.81 times
It has showed upward trend since the company gains 2.81 times inventory turnover which is
Batter than 2009 & 2010.
6. Operating income return on investment : operating income / total asset
Operating income return on investment in 2009:(3,434,984,523/16,987,753,707) =20.22%
Operating income return on investment in 2010:(7,363,524,698/30,569,775,387)=24.09%
Operating income return on investment in 2011:(8,007,975,587/75,118,793,488) =10.66%
Measures overall effectiveness in generating profits with available assets, earning power
of investment capital. In 2010 showed generating profits was upward trend since the
company able to get 24.09% return on investment but it was decreased more the next
year.
7. Operating Profit margin : operating income / Sales
Operating Profit margin in 2009 : (3,434,984,523/5,327,783,716) = 64.47%
Operating Profit margin in 2010 : (7,363,524,698/18,980,964,619) = 38.79%
Operating Profit margin in 2011: (8,007,975,587/29,339,932,714) = 27.29%
In spite of increased sales, company has not met the adequate profit margin. It indicates that
company has increased its operating expense in 2011 . For this reason company get decreased
operating profit margin.
8. Total asset turnover : Sales / total asset
Total asset turnover in 2009 : (5,327,783,716/16,987,753,707) = .31 times
Total asset turnover in 2010 : (18,980,964,619/30,569,775,387) = .62 times
Total asset turnover in 2011 : (29,339,932,714/75,118,793,488) = .39 times
In 2010, the company had 0.62 times Turnover ratios but in 2011 has decreased 0.39 times. It
indicates company moving downward in term of sales.
