The document provides a financial analysis of ACI Formulations Limited, highlighting its liquidity, activity, financial leverage, and profitability ratios for the years 2012 and 2013. Key findings include a slight decrease in the current ratio but improvements in the quick ratio, while activity ratios showed a decline in total asset turnover despite better performance in inventory turnover and average collection period. Profitability ratios revealed mixed results, with an increase in gross profit margin but decreases in net profit margin, return on assets, and return on equity for 2013.

1. FINANCIAL
ANALYSIS OF
ACI
FORMULATIONS
LIMITED

2. COMPANY OVERVIEW
 ACI Formulations Limited (ACI FL) is a subsidiary of
ACI limited
 ACI FL was started its business 1995 as a private limited
company.
 Located at Gazipur.
 The principle activities of the company are
manufacturing and marketing of a number of
agrochemical and consumer products.
 The company became a publicity listed company with
Dhaka Stock Exchange and Chittagong Stock Exchange
Limited.

3. RATIO ANALYSIS

4. LIQUIDITY RATIOS
 Liquidity ratios shows a firm’s ability to cover its
current liabilities with its current assets.

5. CURRENT RATIO
 Current ratio of ACI Formulations indicates that in the year of 2012 it
was 1.5 but in the year of 2013, it decreases to 1.49. Here change of the
ratio is -0.67%. It is a very little change. The reason behind this change is
the current asset of the company increases 3.91% and current liability
increases 4.11%.
1.484
1.486
1.488
1.49
1.492
1.494
1.496
1.498
1.5
2012
2013
1.5
1.49
Current Ratio
Current Ratio

6. QUICK RATIO
 Quick ratio of ACI Formulations indicates that in the year of 2012 it was .87 and
year of 2013 it increases to .98. Here change of the ratio is 12.64%. The reason
behind this change is the cash increases by 49.36%, Inter-company receivables
increases by 125.46%, Advance income tax increases by 97.21%; Advances, deposits,
prepayments increases by 5.97%, Other receivables increases by 100%, Trade
receivables increases by 23.47%. Here in 2013 inventories decreases by -14.27% and
current liabilities increases 4.11%.
0.8
0.9
1
2012
2013
0.87
0.98
Quick Ratio
Quick Ratio

7. LIQUIDITY RATIOS
Ratios 2012 2013
Current ratio 1.50 1.49
Quick ratio .87 .98
Here current ratio is almost same in both of the
year. But the quick ratio is getting stronger in
2013.So, we can say the overall performance of
liquidity ratios are good for the company.

8. PRESENTER 2
MD. SHOHANUZZAMAN

9. ACTIVITY RATIOS
 Indicates quality of receivable and how successful
the firm is in its collections.

10. TOTAL ASSET TURNOVER
 Total asset turnover of ACI Formulations indicates that in the year of
2012 it was .91 and year of 2013 it decreases to .81. Here change of the
ratio is 10.99%. The reason behind this change in 2013 revenue decreases
by -9.32% and total assets increases by 1.77%.
0.91
0.81
0.76
0.78
0.8
0.82
0.84
0.86
0.88
0.9
0.92
2012 2013
Total Asset Turnover
Total Asset Turnover

11. INVENTORY TURNOVER
 Inventory turnover of ACI Formulation indicates that in the year
of 2012 it was 2.95 and year 2013 it increase to 3.06. Here change of
the ratio is 3.73%. The reason behind this change in 2013 COGS
decreases by -10.92%. On the other hand, inventory decreases by -
14.27%.
2.85
2.9
2.95
3
3.05
3.1
2012
2013
2.95
3.06
Inventory Turnover
Inventory Turnover

12. AVERAGE COLLECTION PERIOD
 Average collection period of ACI Formulations indicates
that in year 2012 it was 83 days and year 2013 it decreases to
71 days. Here change of the ratio is 14.20%. The reason
behind this change in 2013 annual net credit sales decreases
by -0.09% and accounts receivables decreases by -22.29%.
65
70
75
80
85
2012
2013
83
71
Average Collection period (in days)
Average Collection period ( in days)

13. ACTIVITY RATIOS
Ratios 2012 2013
Total Asset Turnover 0.91 0.81
Inventory Turnover 2.95 3.06
Average Collection Period 83 days 71 days
•In 2013 total asset turnover decreases because net sales
decreases in 2013.
•In 2013 Inventory turnover decreases and average collection
period decreases.
So, here total asset turnover performance is not good but the
other two ratios performance is good because in 2013
inventories and accounts receivables decreases.

14. PRESENTER 3
MD. RASHIDUL ISLAM

15. FINANCIAL LEVERAGE RATIOS
 Shows the extent to which the firms is financed by
debt.

16. DEBT TO EQUTY
 Debt to equity of ACI Formulations indicates that in the year
of 2012 it was 66% and year 2013 it increases to 68%. Here
change of the ratio is 3.03%. The reason behind this change
in 2013 total debt increases by 2.97% an accounts
receivables decreases by -22.29%.
65
65.5
66
66.5
67
67.5
68
2012
2013
66
68
Debt to Equity
Percentage(%)

17. TIME INTEREST EARNED
 Time interest earned of ACI Formulations indicates that in the of
year 2012 it was 3.14 and year of 2013 it increases to 3.78%. Here
change of the ratio is 20.38%. The reason behind this change in
2013 operating profit decreases by -19.94% and interest expenses
decreases by -33.29%.
3.14
3.78
0
0.5
1
1.5
2
2.5
3
3.5
4
2012 2013
Time Inertest Earned
Time interest Earned

18. FINANCIAL LEVERAGE RATIOS
ratios 2012 2013
Debt to Equity 66% 68%
Time Interest Earned 3.14 3.78
Here, both the ratios are increased in 2013. So, the
company’s ability to financed by debt is increasing.

19. PROFITABILITY RATIOS
 Indicates the firm’s profitability after taking account
of all expenses and income taxes.

20. GROSS PROFIT MARGIN
 Gross Profit Margin of ACI Formulations indicates that in
the year of 2012 it was 24% and year of 2013 it increases to
25%. Here change of the ratio is 4.17%. The reason behind
this change in 2013 gross profit decreases by -4.15% and net
sales decreases by -9.32%.
23.4
23.6
23.8
24
24.2
24.4
24.6
24.8
25
2012
2013
24
25
Gross Profit Margin
Percentage(%)

21. PRESENTER 4
ZANNATUL FERDOUS

22. NET PROFIT MARGIN
 Net Profit Margin of ACI Formulations indicates that in the
year of 2012 it was 5.81% and year of 2013 it increases to
5.52%. Here change of the ratio is 4.99%. The reason behind
this change in 2013 net profit after tax decreases by -13.82%
and net sales decreases by -9.32%.
5.3
5.4
5.5
5.6
5.7
5.8
5.9
2012
2013
5.81
5.52
Net Profit Margin
Percentage(%)

23. RETURN ON ASSETS
 Return on assets of ACI Formulations indicates that in the
of year 2012 it was 5.26% and year of 2013 it increases to
4.46%. Here change of the ratio is 15.21%. The reason
behind this change in 2013 net profit after tax decreases by -
13.82% and total assets increases by 1.77%.
4
4.2
4.4
4.6
4.8
5
5.2
5.4
2012
2013
5.26
4.46
Return On Assets
Percentage(%)

24. RETURN ON EQUITY
 Return on equity of ACI Formulations indicates that in the
year 2012 it was 8.75% and year of 2013 it decreases to 7.47%.
Here change of the ratio is 14.63%. The reason behind this
change in 2013 net profit after tax decreases by -13.82% and
shareholder’s equity increases by 0.98%.
8.75
7.47
6.5
7
7.5
8
8.5
9
2012 2013
Return On Equity
Percentage(%)

25. PROFITABILITY RATIOS
Ratios 2012 2013
Gross Profit Margin 24% 25%
Net Profit Margin 5.81% 5.52%
Return on Assets 5.26% 4.46%
Return on Equity 8.75% 7.47%
Here in 2013 gross profit margin increases but the
other three ratios net profit after tax decreases. In
2013 the other 3 ratios goes down. So we can say
that the over all performance of profitability ratios are
not good.

26. PRICE EARNING RATIO
 Return on equity of ACI Formulations indicates that in the
year of 2012 it was 47.44% and year of 2013 it increases to
55.05%. Here change of the ratio is 16.04%.The reason behind
this change in 2013 earning per share decreases by -13.81%.
42
44
46
48
50
52
54
56
2012
2013
47.44
55.05
Price Earning Ratio
Price Earning Ratio

27. PRESENTER 5
MASHRURA RAHMAN

28. PRICE EARNINGS RATIO
BETWEEN ACI FORMULATIONS AND INDUSTRY
AVERAGE
 Here, ACI Formulation PE ratio is 55.05 and
Industry average is 24.24. So, Industry average PE
ratio is much lower than ACI Formulation.
0
10
20
30
40
50
60
ACI Formulation
Industry Average
55.05
24.24
Price Earnings Ratio
Price Earnings Ratio

29. REQUIRED RATE OF RETURN

30. REQIRED RATE OF RETURN
Required rate of return
Here,
Ri = required rate of return
Rf = risk free rate, which is 0.11
βi = firm’s beta, which is 0.79
Rm - Rf= market risk premium, which is 0.084
So, Ri = Rf + βi (Rm - Rf)
= 0.11 + 0.79 (.084)
= 17.64%

31. RECOMMENDATION

32. RECOMMENDATION
If we compare the PE ratio between ACI
Formulations and Industry average then we can
see that the industry average is 24.24 and ACI
Formulation is 55.05. So, The company PE ratio
is more higher than the industry average. So, the
investor should not buy the stock.

33. INDEX ANALYSIS FOR INCOME STATEMENT
Particulars Indexed (%)
Total non Current assets 99.07
Total Current Assets 103.90
Total Assets 101.77
Total Equity 100.09
Total current liabilities 104.10
Total equity and liabilities 101.77

34. INDEX ANALYSIS FOR BALANCE SHEET
Particulars Indexed (%)
Revenue 90.76
Cost of sales 89.07
Gross Profit 96.85
Total Comprehensive Income 86.17
Earnings Per Share(EPS) Basic
Earnings per share(par value tk.
10)
86.18

35. COMMON SIZE ANALYSIS FOR INCOME STATEMENT
Particulars Common size (%)
Total non Current assets 43.03
Total Current Assets 56.97
Total Assets 100
Total Equity 59.67
Total liabilities 40.33
Total equity and liabilities 100

36. COMMON SIZE ANALYSIS FOR BALANCE SHEET
Particulars Common size (%)
Revenue 100
Cost of sales 75.02
Gross Profit 24.98
Total Comprehensive Income 5.52
Earnings Per Share(EPS) Basic
Earnings per share(par value tk. 10) 0.0000001226

37. THANK YOU