4. Objectives
General Objective:
•To analyze the financial statements of Al Amin Refrigeration & Engineering Works with the key
focus of its overall financial performance
Specific Objectives:
•To know the current financial position of Al Amin Refrigeration & Engineering Works
•To know the five years financial performance of AREW by calculating and analyzing different
types of ratio.
•To know the financial trend of AREW focusing the five years financial performance.
•To give some recommendation for the development of Al Amin Refrigeration & Engineering
Works
5. Theoretical Aspects
Financial performance analysis:
• Financial performance analysis of a company is very important to get an overall view
about an organization. It generally consists of interpretation of balance sheet and
interpretation of income statement. By using these two sources one can perform the ratio
analysis and trend analysis which are the major tools for analyzing the financial
performance of a company.
Balance sheet:
• In financial accounting, a balance sheet or statement of financial position is a summary of
the financial balances of a sole proprietorship, a business partnership or a company.
Assets, liabilities and ownership equity are listed as of a specific date, such as the end of
its financial year.
Income statement:
• Income statement also referred as profit and loss statement, earnings statement, operating
statement or statement of operations is a company's financial statement that indicates how
the revenue is transformed into the net income.
6. Continued
• Groups of Financial Ratios
Financial ratios can be divided into four basic groups
or categories:
1. Liquidity ratios
2. Activity ratios
3. Debt ratios &
4. Profitability ratios
7. Ratio and Trend Analysis
• Common Size Asset
• Common Size Liabilities and Capital
• Common Size Share Holder Equity
• Current Ratio
• Net Working Capital
• Cost Income Ratio
• Total Asset Turnovers
• Investment to Deposit ratio
• Net Profit Margins
• Returns on Asset
• Returns on Equity
• Earnings per Share
• Debt Ratio
8. Findings
a) CURRENT RATIO
b) NET WORKING CAPITAL
c) COST INCOME RATIO
d) TOTAL ASSET TURNOVER RATIO
e) INVESTMENT TO DEPOSIT RATIO
f) NET PROFIT MARGIN
g) RETURN ON ASSETS
h) RETURN ON EQUITY
i) EARNINGS-PER SHARE
j) DEBT RATIO
k) PRICE EARNINGS RATIO
9. Recommendations
a) Current ratio
b) Cost income ratio
c) total asset turnover
d) Investment to deposit ratio
e) net profit margin
f) return on assets
g) Price/Earnings ratio
h) Return on equity
i) Debt ratios
j) Earnings-per share
10. Conclusion
• Al Amin Refrigeration & Engineering Works(AREW) is setting new standards in
the companying arena in the time of turbulent economic conditions. As part of the
long term financial reform and modernization plan of the government, the
company had been converted into a public limited company. Company is a
financial intermediary that collects money as deposit from idle section i.e.
household by providing interest against deposit and mobilize this money into
productive sector i.e. industry, agriculture, manufacturing from by collecting
interest against loan. The difference between interest expense and interest gain is
the company’s main profit.
