Bisco Misr is an Egyptian food manufacturing company established in 1957. The audit report analyzes the company's performance over 2012-2013. It found that liquidity, profitability, and returns improved from 2012 to 2013. The current ratio and acid-test ratio increased, indicating better management of operating cycles. Operating income return on investment increased from 19.7% to 26.8%, showing more income generated from assets. Most ratios related to receivables, inventory, assets, and profits improved from 2012 to 2013, demonstrating more efficient use of resources and increased effectiveness of the company's management.

1. Bisco Misr
Audit Report 2012 / 2013

2. 1
• Introduction
2
• Liquidity
3
• Operating Profitability
4
• Financing Decisions
5
• Return on Equity
6
• General conclusion about the co. performance in the 2 years

3. INTRODUCTION AND HISTORY

4. About Bisco Misr :
• The Egyptian company for foods , Bisco Misr , an egyptian joint stock
company
• Established by virtue of a presidential decree issued January 1957
• Was privatized in the late 90’s
• The company’s purpose is manufacturing food stuff; Pies, Biscuits,
Bread …etc
• It provides schools, companies ,other entities and local and foreign
markets of the same products.
• The Company undertakes its own importation transactions and
participating with local and foreign entitles in the same business ,
helping the company achieving it’s purpose in Egypt or abroad .
• By 2010, new activities were added as a long term plan to improve
and upgrade the company’s financial position and stability, such as :
1. Real state investment
2. Developing Infrastructure
3. Providing Residential and Touristic Services

5. 1- FIRM LIQUIDITY
HOW LIQUID IS THE FIRM ?
1- Current Ratio
2- Acid–Test Ratio
3- Average Collection Period
4- Accounts Receivable Turn Over
5- Inventory Turn Over

6. 2013 2012
AMOUNT
%
Inventories 40146891 39239498 907393 2.30%
Trade receivable 11600203 7258755 4341448 59.80%
Suppliers -advance payment 150002 293130 143128)) 48.40%
Debtors & other debit balance 6318578 4967272 1351306 27.20%
Cash at banks & on hands 64003401 37582085 26421316 70.30%
Current assets 122219075 89610740 32608335 36.38%
Loans installments due in one year 11000002 3666666 7333336 2.00%
Suppliers 41985463 44445353 2459890)) 0.055%
Trade receivables-advance payments 625645 1008694 383049 0.379%
Due to related parties 134364 678100 543736 0.8%
Creditors and other credit balances 21087899 34958712 13870813 0.396%
Dividends payable 188515 188515 0 0
Provisions 1974402 1758240 (216162) 0.122%
Current liabilities 76996290 86704280 9707990 0.112%
Horizontal Analysis for Data Ratio

7. Vertical Analysis for Data Ratio
2013 2012 % of total % of total
Inventories 40146891 39239498 13.20% 14.30%
Trade receivable 11600203 7258755 3.80% 2.65%
Suppliers -advance payment 150002 293130 0.05% 0.1%
Debtors & other debit balance 6318578 4967272 2.00% 1.80%
Cash at banks & on hands 64003401 37582085 21.10% 13.70%
Current assets 122219075 89610740 40.30% 32.8%
Loans installements due in one year 3666666 11000002 4.23% 14.29%
Suppliers 44445353 41985463 51.26% 54.53%
Trade receivables-advance payments 1008694 625645 1.16% 0.81%
Due to related parties 678100 134364 0.78% 0.17%
Creditors and other credit balances 34958712 21087899 40.32% 27.39%
Dividends payable 188515 188515 0.22% 0.25%
Provisions 1974402 1758240 2.28% 2.28%
Current liabilities 86704280 76996290 100 100

8. Current ratio : Current Assets
Current Liabilities
20122013Current ratio
89,610,740
=
76,996,290
122,219,075
=
86,704,280
Current Assets
Current Liabilities
1.164 times1.410 timesRatio
Comment :
There is a reasonable increase in the Current Ratio from 2012 to 2013.
Good sign of the efficiency of the company’s operating cycle.
1

9. 20122013Acid-test ratio
89,610,740 – 39,239,498
=
76,996,290
122,219,075 – 40,146,891
=
86,704,280
Current Assets -
Inventory
Current Liabilities
0.654 times0.947 timesRatio
ACID-TEST RATIO : Current Assets - Inventory
Current Liabilities
Comment:
By excluding inventories, there was also an increase observed in the ratios from
2012 to 2013. An indication of the improvement of the company’s financial
position.
2

10. Horizontal Analysis for Data Ratio

11. Average collection period:
20132012Average collection
period
11,600,203
(480,347,869/365)
7,258,755
(420,588,653/365)
A/R
Daily credit sales
=8.81 Days=6.29 DaysRatio
Comment :
From 2012 to 2013 number of days increased and this means that the A/R
collection took longer time in 2013 and it seems that the company’s
management intentionally extend longer credit terms as we see the amount of
A/R increased.
Accounts Receivables
Daily Credit Sales
3

12. Accounts Receivable Turnover : Credit Sales
Accounts Receivable
20132012A/R Turnover
480,347,869
=
11,600,203
420,588,653
7,258,755
Credit Sales
Account Receivable
41.4 Times / Year57.94 Times / YearRatio
Comment :
It decreased from 2012 to 2013, so Bisco-Misr was slower in
collecting its receivables in 2013 than in 2012 the reason for that reduction might
be occurred because of company’s management .
4

13. 20132012Inventory Turnover
314,009,024
=
40,146,891
287,120,405
=
39,239,498
Cost Of Goods Sold
Inventory
7.82 Times / Year7.32 Times / YearRatio
Inventory Turnover : Cost of Goods Sold
Inventory
Comment :
There is a slight increase in 2013 this means that Bisco-Misr was trying to
manage its inventory better and increase the times of turning over its inventory,
the higher this ratio is, the more efficiently the company was managing its
inventory and the liquidity in the company would be better.
5

14. Days sales in inventory:
20132012Days sales in inventory
365
7.82
365
7.32
365 Days
Inventory Turnover
= 46.66 Days= 49.88 DaysRatio
Comment :
In 2013 the number of days reduced this means that the company could convert
its inventory into cash more quickly in 2013 than 2012 and this is a good
indication for the company’s liquidity by the time.
365
Inventory Turnover
6

15. 2- OPERATING PROFITABILITY
IS THE MANAGEMENT GENERATING ADEQUATE OPERATING
PROFITS ON THE FIRM’S ASSETS ?
1- Operating Income Return on Investment
2- Operating Profit Margin
3- Total Asset Turn Over
4- Accounts Receivable Turn Over
5- Inventory Turn Over
6- Fixed Assets Turn Over

16. 20132012Operating income
return on investment
81,308,739
303,320,008
53,964,615
273,324,978
Operating income
Total assets
26.8%
19.7%Ratio
Comment :
the company in 2013 is earning much more return on investment than in 2012, So
management is generating significantly more income in 2013 on 1EGP assets
than in 2012.
We separated the operating income return on investment , OIROI into two
important pieces to know the reason that the company earned in 2013 much more
return on the firm's assets than 2012.
OIROI
(Operating Income Return On investment) :
Operating income
total assets
1

17. Total Assets Turnover : Sales
Total Assets
20132012Total assets turn over
480,347,869
303,320,008
420,588,653
=
273,324,978
Sales
Total assets
1.6 times1.5 timesRatio
Comment :
the company in 2013 generated 1.6 EGP from every 1 EGP of assets in
comparable with 2012 generated 1.5 EGP from every 1 EGP of assets , so the
company use the assets more efficient in 2013 than in 2012 which was reflected on
OIROI
2

18. Operating Profit Margin = Operating Income
Sales
20132012Operating profit
margin
81,308,739
480,347,869
53,964,615
420,588,653
= operating income
Sales
16.9%12.8%Ratio
Comment :
Operating profit margin in 2013 is much more 2012 .
From the income statement we found that one of the main driving force of the
operating profit margin is
Total sales ( number of units sold times sales price per unit ) in 2013 is more than
2012 so, management is effective in managing this forces.
as they keep costs & expenses in the line relative to sales
3

19. Account Receivable Turn Over : NET SALES
ACCOUNT RECEIVABLES
20132012Ratio Turn Over
480,347,869
=
11,600,203
420,588,653
=
7,258,755
Credit Sales
Accounts Receivable
57.94 Times / Year41.4 Times / YearRatio
= 6.29
days
365
= 8.8
days
365Average Collection
Period of Accounts
Receivable
57.9441.4
Comment :
Account Receivables Turn Over reflects how many times average trade receivables are recorded and collected
during the accounting period .
2012: We can say that in year 2012 Account Receivable turn over is 41.4 times per year . Where the average
collection period is 8.8 days .
2013 : we can say that the Turn over of accounts receivable is higher than in year 2012 , where it turns over
57.94 times /year . From this we conclude that 2013 is a much profitable year than 2012. as it takes only 6.29
days to collect their receivables.
4

20. 20132012Inventory Turn Over
314,009,024
=
40,146,891
287,120,405
=
39,239,498
Cost Of Goods Sold
Inventory
7.8 Times / Year7.1317 Times / YearRatio
=46.8
Days
365
= 51
Days
365(1 year)Average Amount of Days
to Sell Inventroy =
365 / Inventory Turn
Over
7.87.1317
Inventory Turn Over : COST OF GOODS SOLD
INVENTORY
Comment :
Inventory Turn Over reflects how many times average inventory has been sold during an accounting
period .
Year 2013 :Here we can see that BISCO MISR turns over inventories about 7.8 times per every 1
year .
Year 2012 : BISCO MISR turns over 1.733times per every 1 year of Inventory.
We conclude that in year 2013 BISCO MISR WAS MORE PROFITABLE THAN IN YEAR 2012 .
5

21. Fixed Assets Turn Over: SALES
NET FIXED ASSETS
20132012Fixed Assets Turn Over
314,009,024
=
181,100,933
420,588,653
=
183,714,238
Sales
Net Fixed Assets
2.289 Times / Year1.733 Times / YearRatio
Comment :
Fixed Assets Turn Over measures the company’s ability to generate net
sales from fixed assets .
2012: the Ratio of Fixed Asset turn Over is 1.733 times/year
2013:The ratio shows that Fixed Assets Turn Over is higher than 2012
We conclude that 2013 has been more profitable in generating sales
using it’s Fixed Assets .
6

22. 0
10
20
30
40
50
60
70
2012 2013
Account
Receivable
Turn over
Inventroy
Turn Over
Fixed Assets
Turn Over

23. 3- FINANCING DECISIONS NADA
1- Debit Ratio
2- Times Interest Earned

24. Horizontal Analysis for Ratio Data
%Variance
Increase /
(decrease)
20122013
(1)(2613305)183714238181100933Non Current Assets
363260833589610740122219075Current Assets
1129995030273324978303320008Total Assets
1397079907699629086704280Current Liabilities
(3)(748713)2744435426695641Noncurrent Liabilities
98959277104440644113399921Total Liabilities

25. Debit Ratio : Total Debits
Total Assets
20122013Ratio Components
7699629086704280Current liabilities
2744435426695641Non Current Liabilities
104440644113399921Total Debts
89610740122219075Current Assets
183714238181100933Non Current Assets
273324978303320008Total Assets
0.380.37Debit Ratio
Biscomisr debit ratio for the 2 years was less than 1 indicating that the company had more
assets than debts providing a stable financing leverage and no risks of operations. where
company can handle obligations and had an advantage of obtaining new loans if acquired.
For year 2013, the assets were financed 37% through debts while for 2012 38 % of only 1
% improvement between the 2 years.

26. Horizontal Analysis for Ratio Data
%
Variance
Inc/ Dec20122013
3377979823664393146237other operating Revenue
114932518(45709711)(50642229)Selling and disturbing expense
41367705(34697476)(36065181)General and administrative expense
2167000(317000)(384000)board of directors Remuneration
(5)(60925)(1145885)(1084933)other operating expenses
51273441245396461581308739Operating Income
(40)(904195)(2251203)(1347008)Interest Expense
62470116259921Finance Income
51213043864143136762735753Net Income

27. Vertical Analysis for Ratio Data
% of the total
2012
% of the total
2013
20122013
4423664393146237other operating Revenue
862(45709711)(50642229)Selling and disturbing expense
6444(34697476)(36065181)General and administrative expense
0.60.5(317000)(384000)board of directors Remuneration
21(1145885)(1084933)other operating expenses
130%130%5396461581308739Operating Income
360%8%(2251203)(1347008)Interest Expense
62470116259921Finance Income
4143136762735753Net Income

28. Times of Interest Earned : Operating Income
Interest Expense
20122013Ratio Components
5396461581308739Operating Income
29111472251203Interest Expense
18.54 times36.12 timesT.I.E
In year 2013 Biscomisr showed an interest coverage ratio of 36.12times by around 17.58 times
than in year 2012 of 18.54times which is really double the number of times.
Showing that the company proceed a better financial leverage in 2013 than in 2012 to pay its
interests on its debts ,which would encouraged creditors to invest more and for the company had
more funds for its operations.

29. 4- RETURN ON EQUITY

30. Horizontal Analysis for Ratio Data
%Variance
Inc/Dec
20122013
2532870597133468248166338845Gross profit
51273441245396461581308739Operating income
16010012906247011625991finance income
(17)(7675649)4627534983599700net profit before income tax
51%213043864143136762735753total net profit for the year
009200000092000000Issued and capital paid
920715682241355424485122Reserves
(18)(2340201)1303941310699212Retained earnings
512130436641431367627357533Net profit
12%21035753168884334189920087Total equity

31. Vertical Analysis for Ratio Data
% of total
2012
% of total
2013
20122013
322265133468248166338845Gross profit
1301305396461581308739Operating income
1536247011625991finance income
11113324627534983599700net profit before income tax
4143136762735753total net profit for the year
009200000092000000Issued and capital paid
13132241355424485122Reserves
861303941310699212Retained earnings
25%33%4143136762735753Net profit
168884334189920087Total equity

32. Return on Equity : Net Income
Common Equity
20122013Ratio Components
4143136762735753Net Income
158257967189920087Common Equity
0.26
26 %
0.33
33 %
R.O.E
In 2013 the company was more efficient in generating income from the shareholder’s
investments by 33% recording an improvement of 7% more than in year 2012 which
showed 26%.
In 2013 the management showed a progress using the equity investments in funding
operations and growing the company than in 2012 indicating an improvement.

33. FINAL CONCLUSION

34. 2013 2012
Firm Lquidity
1-Current Ratio 1.410 times 1.164 times
2-Acid Test Ratio 0.947 times 0.654 times
3-Average Collection Period 8.81 days 6.29 days
4-Accounts Receivable Turn Over 41.4 times / year 57.94 times / year
5-Inventory Turn Over 7.82 times / year 7.32 times / year
6-Days Sales In Inventory 46.66 days 49.88 days
Operating Profitabilty
1- Operating Income Return on
Investment
26.80% 19.70%
2-Operating Profit Margin 16.90% 12.80%
3-Total Assets Turn Over 1.6 times 1.5 times
4-Inventory Turn Over 7.82 times / year 7.32 times / year
5-Fixed Assets Turn Over 2.289 times / year 1.733 times / year
6-Account Receivable Turn Over 6.29 days 8.8 days
Financing Decisions
1-Debit Ratio 0.37 0.38
2-Times Interest Earned 36.12 times 18.54 times
Return On Equity
1-Return On Equity 33% 26%