This document analyzes the financial ratios of Legacy Footwear Limited from 2010-2014. It finds that the company's performance was satisfactory in terms of fixed asset turnover, debt ratio, net profit margin, return on assets, return on equity, and market-to-book ratio. However, its current ratio, quick ratio, inventory turnover, days sales outstanding, total asset turnover, and price-to-earnings ratio need improvement over the years. In conclusion, the company needs to better utilize its current assets, reduce inventory levels, improve collection of receivables, and increase total asset utilization and share price.

1. CORPORATE
FINANCE
Presentation

2. Prepared for
Md. Iftekharul Islam
Bhuiya
Lecturer
Department of
Business
Administration
WORLD
UNIVERSITY OF
BANGLADESH

3. Submitted By:
Rubel Ahmed
WUB01/13/42/2536
Sheikh Sadia
WUB01/13/42/2539
Sujan Chandra kor
WUB01/13/42/2551
S.M.Saifur Rahman
WUB01/13/42/2552
Bidhan Biswas Shawan
WUB01/13/42/2563

4. Topic name
Financial Statements(Ratio)
Analysis

5. Current Ratio = Current Assets / Current Liabilities
Year 2010 2011 2012 2013 2014
LFL 23.76 33.83 38.75 37.48 34.79
0
5
10
15
20
25
30
35
40
45
2010 2011 2012 2013 2014
Current Ratio
Current Ratio
Over the years, current Ratio of Legacy Footwear Limited
poor excess. It indicates that corporation can’t use properly
current asset. The corporation needs to decrease
current assets.

6. Quick Ratio= (Current Assets - Inventories)/ Current Liabilities
Year 2010 2011 2012 2013 2014
LFL 14.27 19.72 23.53 22.44 21.85
0
5
10
15
20
25
2010 2011 2012 2013 2014
Quick Ratio
Quick Ratio
Quick Ratio of Legacy Footwear Limited bad position because
it was above the standard of current ratio which is 1: 1 or 1
time.. The corporation should try to decrease its current
assets over the year

7. Inventory Turnover Ratio =Sales/Inventories
Year 2010 2011 2012 2013 2014
LFL 1.73 1.66 1.56 1.32 1.5
0
0.5
1
1.5
2
2010 2011 2012 2013 2014
Inventory Turnover Ratio
Inventory Turnover Ratio
Inventory turnover ratio of Legacy Footwear Limited
improved. This organization should increase its sales
and decrease its unused inventories.

8. Days Sales Outstanding = Account Receivable/Average Sales Per
Day
Year 2010 2011 2012 2013 2014
Days Sales Outstanding 249.49 253.67 308.68 349.81 350.73
0
50
100
150
200
250
300
350
400
2010 2011 2012 2013 2014
Days Sales Outstanding
Days Sales Outstanding
Days Sales Outstanding of Legacy Footwear Limited
demoted. It indicates that organization should collect its
account receivable on times over the period.

9. Fixed Assets Turnover = Sales /Fixed Assets
Year 2010 2011 2012 2013 2014
LFL 0.59 0.83 0.77 0.81 0.83
0
0.2
0.4
0.6
0.8
1
2010 2011 2012 2013 2014
Fixed Assets Turnover Ratio
Fixed Assets Turnover
Ratio
Fixed Assets Turnover of Legacy Footwear Limited
increased over the period. This corporation should increase
its rate and utilize its net fixed assets.

10. Total Assets Turnover = Sales/Total Assets
Year 2010 2011 2012 2013 2014
LFL 0.31 0.37 0.34 0.32 0.31
0.28
0.3
0.32
0.34
0.36
0.38
2010 2011 2012 2013 2014
Total Assets Turnover Ratio
Total Assets Turnover
Ratio
Total Assets Turnover Ratio of Legacy Footwear Limited
has been showing a falling trend from (2010). This
corporation should increase its rate and utilize its total
assets.

11. Debt Ratio = Total Liabilities /Total Assets
Year 2010 2011 2012 2013 2014
LFL 45.79% 48.90% 50.33% 51.82% 43.70%
38.00%
40.00%
42.00%
44.00%
46.00%
48.00%
50.00%
52.00%
54.00%
2010 2011 2012 2013 2014
Debt Ratio
Debt Ratio
Debt Ratio of Legacy Footwear Limited decreased.
Organization should try to increase its assets and
decrease its liabilities to improve its debt ratio.

12. Net Profit Margin = Net Profit /Sales
Year 2010 2011 2012 2013 2014
LFL 9.19% 8.94% 4.94% 5.07% 4.73%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
2010 2011 2012 2013 2014
Net Profit Margin
Net Profit Margin
Net Profit Margin of Legacy Footwear Limited
improved. Organization should try to increase its sales
and decrease expenses.

13. Return on Total Assets = Net Income /Total Assets
Year 2010 2011 2012 2013 2014
LFL 2.88% 3.33% 1.66% 1.61% 1.49%
0.00%
1.00%
2.00%
3.00%
4.00%
2010 2011 2012 2013 2014
Return on Total Assets
Return on Total Assets
Return on Total Assets of Legacy Footwear Limited has
been descending trend from 2010. Organization needs
to utilize its assets properly.

14. Return on Common Equity = Net Income/Common
Equity
Year 2010 2011 2012 2013 2014
LFL 5.82% 7.30% 3.65% 3.56% 2.81%
0.00%
2.00%
4.00%
6.00%
8.00%
2010 2011 2012 2013 2014
Return on Common Equity
Return on Common Equity
Return on Common Equity of Legacy Footwear
Limited falling trend. Organization should try to
increase its sales and decrease expenses.

15. Price/Earnings Ratio = Price Per Share / Earnings Per
ShareYear 2010 2011 2012 2013 2104
LFL 52.62 32.6 33.49 69.35 49.64
0
10
20
30
40
50
60
70
80
2010 2011 2012 2013 2104
Price Earning
Price Earning
Price/Earnings Ratio of Legacy Footwear Limited
was the highest in 2013. It was decrease in 2014. It
indicates that investor’s confidence with LFL’s share
decreased over the year.

16. Market/Book Ratio = Market Price Per Share /Book Value Per Share
Year 2010 2011 2012 2013 2014
LFL 3.06 2.38 1.22 2.47 1.4
0
0.5
1
1.5
2
2.5
3
3.5
2010 2011 2012 2013 2014
Market Book
Market Book
Market/Book Ratio of Legacy Footwear Limited improved.
Management of the organization needs to take steps to
improve corporation share price in the capital market .

17. Legacy Footwear Limited
Performance of LFL is
satisfactory in terms of-
Fixed assets,
Debt ratio,
Net profit margin,
Return on total asset
(ROA),
Return on common
equity,
Market/Book ratio.
Performance of LFL is
dissatisfactory in terms
of-
Current ratio,
Quick ratio,
Inventory turnover ratio,
Day’s sales
outstanding,
Total assets,
Price/Earning ratio