Analysis of all ratios

1. Sec: F
NAME ID
SAHA,MRIDUL 16-31558-1
ARPAN,ARITROKANU 16-31885-1
HOSSAIN,SHAIKAT 16-31268-1
HOSSAIN,SHARFARAJ 16-31132-1

3. 1. Currentratio= Currentassets/Currentliabilities
=20189582323/22115406199
=0.912 or 91.2%
Analyze of Current Ratio
Current ratio matches current assets with current liabilities and tells us whether the current assets are
enough to settle current liabilities. A higher current ratio is always more favorable than a lower current
ratio because it shows the company can more easily make current debts. A current ratio of 1 or more
meansthat currentassetsare more than currentliabilitiesandthe companyshouldnotface anyliquidity
problem.A current ratio below1 meansthat current liabilitiesare more than current assets,whichmay
indicate liquidity problems. In general, so higher current ratio is better.
So inthisACICompanytheircurrentratiois0.912 whichislessthancurrentassetand currentliabilitiesis
high which is bad for the company.
2. Quickratio= Currentassets-Inventory/Currentliability
=20189582323-8402056153/22115406199
=0.53 or 53%
Analyze of Quick Ratio
The acidtestratiomeasurestheliquidityof acompanybyshowingitsabilitytopayoffitscurrentliabilities
withquickassets.If afirmhasenoughquickassetstocoveritstotal currentliabilities,the firmwillbe able
to pay off itsobligationswithouthavingtosell off anylong-termorcapital assets.Higherquickratiosare
more favorable for companies because it shows there are more quick assets than current liabilities.
According to Quick ratio of this company, it’s indicate that for every one taka of ACI company’s current
liabilities, the firm has 0.53tk. Of very liquid assets to cover those immediate obligations.
3. Inventoryturnoverratio=Costof goodssold/Inventory
=33732551537/8402056153
=4.01 times
Analyze of Inventory Turnover ratio

4. Inventoryturnoverisameasure of howefficientlyacompanycancontrol itsmerchandise.Thisshowsthe
companydoesnotoverspendbybuyingtoomuchinventoryandwastesresourcesbystoringnon-salable
inventory. It also shows that the company can effectively sell the inventory it buys. The measurement
shows how easily a company can turn its inventory into cash. In this case ACI company turnover is 4.01
and italsoimpliesthatitwouldtake 4yearsto sell hisentire inventory.inotherwords,ACIdoesnothave
very good inventory control.
4. Receivableturnoverratio=Sales/Accountreceivable
=12031222250/5899207927
=2.039 times
Analyze of Receivable Turnover Ratio
The receivables turnover ratio measures a business ability to efficientlycollect its receivables. Higher
ratios mean that companies are collecting their receivables more frequently throughout the year. If a
company can collect cash from customer sooner, it will be able to use that cash to pay bills and other
obligations sooner.
As ACI Company’s receivable turnover is 2.039 this means that ACI Company collects their receivables
2.039 times in a year.
5. Total assetturnoverratio=Sales/Total assets
=12031222250/36069556176
=0.33 times
Analyze of total asset turnover ratio
Thisratiomeasureshowefficientlyafirmusesitsassetstogenerate sales,soahigherratioisalwaysmore
favorable.Higherturnoverratiosmeanthe companyisusingitsassetsmoreefficiently.Lowerratiosmean
that the company isn't using its assets efficiently and most likely have management or production
problems.
As total asset turnover ratio is 0.33 this means that for one taka investment in assets, ACI Company
generates 33 taka sales.
6. Debtto equityratio=Total debt/Total equity
=4108261376/22115406199

5. =0.185 or 18.5%
Analyze of Debt to Equity Ratio
A lower debt to equity ratio usually implies a more financially stable business. Companies with a higher
debt to equity ratio are considered more risky to creditors and investors than companies with a lower
ratio.
As this company’s debt to equity ratio is 18.5% so it is more risky to creditors. So for ACI Company it is
bad.
7. Netprofitmarginratio= Netprofit/Sales
=3106689881/12031222250
=0.258 or 25.8%
Analyze of Net Profit Margin Ratio
The profit margin ratio shows what percentage of sales are left over after all expenses are paid by the
business.Inthiscase the Netprofitmarginratiois25.8%. So thatwas a good NPMratio inACICompany.
8. Returnon asset=Netincome/Total assets
=3106689881/36069556176
= 0.0861 or 8.61%
Analyze of Returnon Asset
The return on assets ratio measures how effectively a company can earn a return on its investment in
assets. In other words, ROA shows how efficientlya company can convert the money used to purchase
assets into net income or profits.
According to this ratio their return on asset is 8.61%. In other words, for one taka that ACI Company
invested in assets during the year produced 8.61 taka of net income.
9. Returnon equity=Netincome/Shareholder’sequity
=3106689881/9845888601
=0.315 or 31.5%

6. Analyze of Returnon Equity
Returnon equitymeasureshowefficientlyafirmcan use the moneyfromshareholderstogenerate
profitsandgrow the company.ROE isa profitabilityratiofromthe investor'spointof view—notthe
company.In otherwords,thisratiocalculateshow muchmoneyismade basedon the investors'
investmentinthe company,notthe company's investmentinassetsorsomethingelse.And
shareholder’ssaw31.5% returnon theirinvestment.ThisratioismostlikelyhighforACICompany.This
couldindicate thatACIis a growingcompany.