Вы находитесь на странице: 1из 39

Abstract:

The report at hand manifests an in-depth analysis of the Financial


Performance Analysis and valuation of Marico Bangladesh Limited. Marico
Bangladesh Limited is a company that caters to the fast moving consumer
goods (FMCG) segment of the market of Bangladesh. The company produces
products such as hair oil, edible oil and soaps. The purpose of this report was
to scrutinize the Financial Performance Analysis and valuation of the
company and justify whether profitability is sufficient enough to determine
the performance of a company. This report comprises of a literature review
which projects the perceptions of different authors about the different ratios
used to analyses the Financial Performance Analysis and valuation followed
by the analysis of the Financial Performance Analysis and valuation using
financial ratios and ends with a brief conclusion and recommendation.

Table of Contents
Page
1.0 Introduction

1.1Background of the company


1
1.2 Rationale of the study
2
2.0 Literature Review

2.1 Financial Statement (Ratio) Analysis


3
2.1.1 Liquidity Ratio
4
2.1.2 Asset Management Ratio
5
2.1.3 Debt Management Ratio
7
2.1.4 Profitability Ratio

2.1.5 Market Value Ratio


9
3.0 Data Analysis
10
3.1 Financial Statement (Ratio) Analysis of
Marico Bangladesh Limited
10
3.1.1 Liquidity Ratios

10

3.1.2 Asset Management Ratios


13
2

3.1.3 Debt-Management Ratio


16
3.1.4 Profitability Ratios
17
3.1.5 Market Value Ratios
22
4.0 Conclusion

23

5.0 Recommendation

24

6.0 List of References

25

7.0 Bibliography

26

Appendix

27

List of Figures:
Pages
Fig.1 Types of Financial Ratios
3
Fig.2 Current Ratio Comparison
10
Fig.3 Quick ratio Comparison

12

Fig.4 Inventory Turnover Ratio Comparison


13
Fig.5 Fixed Asset Turnover Comparison
14
Fig.6 Total Asset Turnover Comparison
15
Fig.7 Debt Ratio Comparison

16

Fig.8 Gross Margin Ratio Comparison


17
Fig.9 Net Margin Ratio Comparison

19
3

Fig.10 Return on Equity Comparison


20
Fig.11 Return on Asset Comparison

21

Fig.12 Perception of Different Users of Financial Performance Analysis and


valuation
23

1.0

Introduction

The main goal of all business organization is profit maximization, however in


order to pursue this goal the organizations need capital which can be raised
through debt or equity. The financial institutions are benefited from providing
loans and similarly shareholders are benefited through shares. In order to
decide whether to invest in an organization or not Financial Performance
Analysis and valuation are very useful and to get a transparent and in-depth
view of an organizations financial position financial ratio analysis is a very
useful tool. Beasley and Brigham (2008) suggested that financial statement
analysis may be used to help predict the firms financial position in the future
and to determine expected earnings and dividends. Bull (2007) further
stated that financial ratio analysis help managers to analyses control and
improve organizations operations. Credit analysts can use it to determine the
ability of an organization to pay its debts and security analysts can use it to
analyses an organizations ability to pay interests on its bonds.

1.1 Background of the company


Marico Bangladesh Limited (MBL) is the subsidiary of Marico Limited, India
(Marico). MBLs Products in Pure Coconut oil, Edible Oil, Hair care and Skin
Care reach out to more than 500,000 outlets in Bangladesh. MBL touches the
lives of 1 out of every 3 Bangladeshi through its portfolio of brands such as
Parachute, Saffola, Hair Code, Aromatic, Camelia and Beliphool to name a
few, most of which enjoy leadership positions (No. 1 in coconut oil segment),
with

significant

market

shares

in

respective

categories.

MBL

was

incorporated in the year 1999 and holds a leadership position in the fast
moving consumer goods (FMCG) space in Bangladesh. MBL recorded a
turnover of Tk. 5,358 Million (USD 73.4 Million) in 12 months ended on 30th
September, 2010 and Tk. 2,846 Million (USD 39 Million) in 6 months ended
on 31st March, 2011 (Maricobd.com, 2012).
1

1.2 Rationale of the study


Marico Bangladesh Limited (MBL) has recorder high turnover in both 2010
and 2011, although it started its operations in 1999 and was in enlisted in
Dhaka stock exchange and Chittagong stock exchange in 2009. The main
objective of this study is to determine the financial position of this
organization. Bangladesh Brand forum had judged Parachute coconut oil the
best brand in Bangladesh in 2011 (The Daily Star, 2012). The main rationale
of this study is to determine all aspects of this organization in terms of
efficiency, debt management, liquidity and profitability and to understand
whether high turnover is sufficient enough to project a strong financial
position of an organization. High turnover is always a positive sign but
financial ratios can also help to ascertain possible areas of improvement.

2.0

Literature Review

2.1 Financial Statement (Ratio) Analysis


According to Gibson (2010) investors and other external users of financial
information will often need to measure the performance and financial health
of an organization. This is done in order to evaluate the success of the
business, determine any weaknesses of the business, compare current and
past

performance,

standards.

and

Financially

compare

stable

current

organizations

performance
are

with

desirable,

industry

because

financially stable business is one that successfully ensures its ability to


generate income for investors and retain or increase value.

n
q
ua
n
d

i
i

ay

R
R a
t a
t o
o

Fi

s
s

i
i

g.1) Types of Financial Ratios


There are many different methods that can be used alone or together to help
investors assess the financial stability of an organization. One of the most
common methods is financial ratio analysis. The basic ratios include five
3

categories: profitability ratios, liquidity ratios, debt ratios, asset management


ratios and market- value ratios (Siddiqui, 2006).
Ratio analysis involves the methods of calculating and interpreting financial
ratio in order to access the firms performance and status. The basic inputs
to ratio analysis are the firms income statement and balance sheet for the
periods to be examined (Peterson and Fabozzi, 2012).
2.1.1 Liquidity Ratio:
Brigham and Houston (2009) stated that liquidity ratios measure the
organizations ability to meet short-term obligations. These include the
current ratio and the quick ratio. This analysis that provides a quick, easy
method to measure of liquidity by relating the amount of cash and other
current assets to the firms current obligations. These include the current
ratio and the quick ratio.
Current Ratio:
According to Megginson and Smart (2008) the current ratio is calculated by
taking the total amount of current assets and dividing it by the total amount
of current liabilities. This ratio indicates the extent to which current liabilities
are covered by those assets expected to be converted to cash in the near
future. Current assets normally include cash, marketable securities, accounts
receivables, and inventories. Current liabilities consist of accounts payable,
short-term notes payable, current maturities of long-term debt, accrued
taxes, and other accrued expenses (principally wages). The formula used to
calculate this ratio is:
Current Ratio = Current Assets Current Liabilities
Current ratio shows a firms ability to cover its current liabilities with its
current assets. In Pharmacy a current ratio of at least 2 is considered

necessary to ensure that the firm has sufficient liquid resource to meet its
short term needs if sales should suddenly drop or expenses increases.

Quick Ratio:
The quick ratio is calculated by taking the total amount of current assets and
deducting the inventory and dividing it by the total amount of current
liabilities. This ratio indicates the firms liquidity position as well. It actually
refers to the extent to which current liabilities are covered by those assets
except inventories. The formula used to calculate this ratio is:
Quick Ratio = (Current Assets Inventory) Current Liabilities
Quick ratio provides a better indication of the firms relative liquidity by
eliminating inventory, the least liquid of all current Assets (Baker and Powell,
2009).
2.1.2 Asset Management Ratio:
Measures how effectively the firm is managing its assets. These ratios are
designed to answer the following question whether the total amount of each
type of asset as reported on the balance sheet seem reasonable, too high, or
too low on view of current and projected sales level (Lasher, 2010).
Below are discussed four types of asset management ratio:

1. Inventory Turnover Ratio


2. The Days sales Outstanding
3. Fixed Asset Turnover Ratio
4. Total Asset Turnover Ratio

Inventory Turnover Ratio (IT):


The inventory turnover ratio is calculated by taking the total cost of goods
sold and dividing it by total inventory. The ratio is regarded as a test of
efficiency and indicates the rapidity with which the company is able to move
its merchandise. The formula used to calculate this ratio is:
Inventory Turnover = Cost of Goods Sold Inventory
Inventory Turnover indicates the effectiveness of the inventory management
practices of the firm (Bagad, 2008).
Day sales outstanding (DSO):
Lee (2006) stated that the average collection period ratio is calculated by
taking the total accounts receivable and dividing it by the average credit
sales per day, which is the annual credit sales divided by 365. The Days
Sales Outstanding ratio shows both the average time it takes to turn the
receivables into cash and the age, in terms of days, of a company's accounts
receivable. The formula used to calculate this ratio is:
6

Day sales Outstanding = (Accounts Receivable Average Daily Sales) x 365


This ratio is of particular importance to credit and collection associates.
Receivable turnover indicates the quality of receivable and how successful
the firm is in its collections.
Fixed Asset Turnover Ratio (FAT):
The total asset turnover ratio is calculated by taking total sales and dividing
it by fixed assets. The fixed asset turnover ratio measures the effectiveness
in generating net sales revenue from investments in net property, plant, and
equipment back into the company. The formula used to calculate this ratio is:
Fixed Asser Turnover = Sales Net Fixed Assets
It evaluates only the investments. Receivable Turnover indicates the quality
of receivable and how successful the firm is in its collections (Mayo, 2007).
Total Assets Turnover Ratio (TAT):
The Total Assets Turnover is similar to fixed asset turnover since both
measures a company's effectiveness in generating sales revenue from
investments back into the company. Total asset turnover evaluates the
efficiency of managing all of the company's assets. The formula used to
calculate this ratio is:
Total Asset Turnover = Sales Total Assets
Total asset turnover indicates how well a company has used its fixed and
current assets to generate sales (Gibson, 2010).
2.1.3 Debt Management Ratio:
According to Baker and Powel (2009) debt management ratios reveal 1) The extent to which the firm is financed with debt and

2) The likelihood of defaulting on its debt obligations. These ratios include:


Debt Ratio:
Debt to Total Asset shows the percentage of the firms assets that are
supported by debt financing. The formula used to calculate this ratio is:
Debt Ratio = Total Liabilities Total Assets
The debt ratio generally called the debt to total asset ratio, measures the
percentage of funds provided by the creditors (Bagad, 2008).

2.1.4 Profitability Ratios: According to Brigham and Daves (2009)


profitability is the net result of a number of policies and decisions. These
ratios provide information about the way the firm is operating. Profitability
ratios show the combined effects of liquidity, asset management and debt on
operating results. There are four important profitability ratios that we are
going to analyze:
1. Net Profit Margin
2. Gross profit Margin
3. Return on Asset.
4. Return on Equity
Net Profit Margin on sales gives us the net profit that the business is earning
per dollar of sales. The formula used to calculate this ratio is:
Net Profit Margin = Net Profit Sales
8

Gross Profit Margin on sales gives us the gross profit that the business is
earning per dollar of sales. The formula used to calculate this ratio is:
Gross Profit Margin = Gross Profit Sales

Return on Equity (ROE):


Return on Equity measures the amount of net income earned by utilizing
each dollar of total common equity. It is the most important of the Bottom
line ratio. This can compute the amount which the shareholders are going to
get for their shares. The formula used to calculate this ratio is:
Return on Equity = Net income available to common stockholders
Common Equity
ROE measures the return on the owners investment in the firm (Megginson
and Smart, 2008).

Return on Total Assets (ROA):


Return of total asset measures the amount of net income earned by utilizing
each dollar of total assets. The formula used to calculate this ratio is:
Return on Total Assets = Net Income Total Assets
ROA means Return on Assets which reflects how well a manager has used all
available funds to generate profits including both equity & debt (Besley and
Brigham, 2008).

2.1.5 Market Value Ratio:

Mayo (2007) stated that these ratios relate the firms stock price to its
earnings and book value per share. They give management an indication of
what investors think of the companys future prospects based on its past
performance.
Price/ Earnings (P/E):
Price earnings ratio shows how much the investors are willing to pay per
dollar of reported profits. To compute the P/E ratio, we need to know the
firms earnings per share (EPS) (Baker and Powel, 2009)
The formula used to calculate this ratio is:
Price/Earning ratio = Market price per share Earnings per share

3.0

Data Analysis

3.1Financial

Statement

(Ratio)

Analysis

of

Marico

Bangladesh

Limited1:
3.1.1 Liquidity Ratios
Current Ratio:

1
10

Current Ratio (Times)


2.4
2.3
2.2
2.1
2
1.9
1.8
Current Ratio (Times)

Fig.2) Current Ratio Comparison


In general if current ratio is greater than its industry average then it is good
for the company. Current ratio shows a firms ability to cover its current
liabilities with its current assets. From the analysis, we can see that in 2012
the current ratio is 2.39 times of the Marico Bangladesh Ltd whereas the
Industry average is 2.01 times. It indicates that company current ratio is in a
stronger position and the company has sufficient cash liquidity to meet its
short-term liquidity. This shows that Marico Bangladeshs current assets are
rising faster than current liabilities. A higher current ratio is preferable.

11

Exhibit 1.1A (Source: Marico Bangladesh Annual Report 2012)

Exhibit 1.1B (Source: Marico Bangladesh Annual Report


2012)

Exhibit 1.1C (Source: Marico Bangladesh Annual Report


2012)
Further analysis of the financial statement indicates that Marico Bangladesh
decreased its current assets such as fixed deposits and investments (Exhibit
1.1A) reduced its short terms finances (Exhibit 1.1B) in proper proportion,
thus reducing current liabilities for which their performance of 2012 is better

12

than 2011. They also have a surplus of financial assets over financial
liabilities (Exhibit 1.1C)

Quick Ratio:

Quick Ratio (Times)


2.5
2
1.5
1
0.5
0

Quick Ratio (Times)

Fig.3) Quick Ratio Comparison


In general, higher quick ratio is preferable than lower ratio. From the data
above, the industrys average quick ratio is 0.9 times whereas the Maricos
quick ratio is 1.26 times.

Exhibit 1.2 (Source: Marico Bangladesh Annual Report 2012)


The comparison between the years 2011 and 2012 reveals that their quick
ratio has substantially decreased during the year. An in-depth analysis into
the financial statement shows that inventory has increased substantially
13

(Exhibit 1.2) and in contrast to the current ratio, there is an overall reduction
in the quick ratio. So it indicates that if the quick ratio is lower that means
the industrys profit margin was not so high that they can make some
investments paying off the liabilities that could result in an increase in assets
and decrease in liabilities to make the liquidity position far better.

3.1.2 Asset Management Ratios


Inventory Turnover Ratio:

Inventory Turnover Ratio (Times)


8
6
4
2
0
Inventory Turnover
Ratio (Times)

Fig.4) Inventory Turnover Comparison


In general higher turnover ratio is better than lower. Inventory Turnover
indicates the effectiveness of the inventory management practices of the
firm.

Exhibit 1.3(Source: Marico Bangladesh Annual Report 2012)

14

From the analysis, it has clearly shows that Marico has relatively lower
inventory turnover ratio than industry. It indicates that the inventory level is
higher that may point to overstocking or deficiencies in the product line or
marketing effort. High inventory levels are unhealthy because they represent
an investment with a zero rate of return in addition to the increased cost
associated with maintaining those inventories. It also opens the company up
to trouble should prices begin to fall. The comparison with the past years
projects a significant reduction in this ratio. However further analysis shows
that they have increased levels of inventory (Exhibit 1.2) with increased cost
of sales (Exhibit 1.3) which in turn decreases the overall ratio. An assumption
can be suggested, that increase prices in the commodities of Bangladesh
especially raw materials may be the cause of this increase.
Day Sales Outstanding:
The Financial Performance Analysis and valuation indicate that Marico
Bangladesh Limited have no debtors for which this ratio does not apply to
them.
Fixed Asset Turnover:

Fixed Asset Turnover


25
20
15
10
5
0

Fixed Asset Turnover

Fig.5) Fixed Asset Turnover Comparison


15

The fixed asset turnover ratio indicates how efficiently the fixed assets are
used to generate sales. In contrast to the performance of the previous year it
can be seen that the fixed asset turnover ratio of Marico Bangladesh Limited
has reduced.

Exhibit 1.4(Source: Marico Bangladesh Annual Report 2012)


A deeper analysis of the Financial Performance Analysis and valuation shows
that the company has purchased many fixed assets in 2012 (Exhibit 1.4) and
there also has been substantial addition during the year. In contrast to the
industry average the figures seem appropriate but it must increase its
revenue to increase this ratio.
Total Asset Turnover:

Total Asset Turnover


1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0

Total Asset Turnover

16

Fig.6) Total Asset Turnover Comparison

The total asset turnover ratio shows how efficiently the total assets of a
company are used to generate sales. The data above shows that the total
asset turnover of Marico Bangladesh is above the industry average. However
a further insight at the financial reports and the other ratios clearly indicates
that the increase of the new fixed assets (Exhibit 1.4) has increased this
ratio, which shows that their total assets have not been efficient enough to
generate enough sales.

3.1.3 Debt-Management Ratio

Debt Ratio:

17

Debt Ratio
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0

Debt Ratio

Fig.7) Debt Ratio Comparison

The debt ratio of Marico Bangladesh is 0.38, which suggests that 38 percent
of their total assets are their total liabilities. In contrast to their previous
years ratio of 0.46, this is a very positive sign for the company. Their ratio is
also better than the industry average which is also good for the overall
image of the company as this attribute increases the shareholders
confidence.

3.1.4 Profitability Ratios


Gross Margin Ratio:
18

Gross Margin Ratio (%)


30
25
20
15
10
5
0

Gross Margin Ratio (%)

Fig.8) Gross Margin Ratio Comparison

The ratio above indicates the percentage of gross margin to sales. It is


evident that the gross margin ratio of Marico Bangladesh Limited has
reasonably decreased over the years. This ratio may be better than the
industry average but with comparison between the years it is a bad
indication. The company has increased its revenue over the years but
unfortunately it has not been able to cope up with the costs (Exhibit 1.3) for
which this ratio has been decreasing.

Exhibit 1.5A (Source: Marico Bangladesh Annual Report 2012)

19

Exhibit 1.5B (Source: Marico Bangladesh Annual Report 2012)

Exhibit 1.5C (Source: Marico Bangladesh Annual Report 2012)


Further analysis reveals that that the revenue has decreased in comparison
to the previous year and the cost of sales has increased (Exhibit 1.3 and
1.5A). In order to get a transparent view, a deeper analysis reveals that in
their product segments there has been substantial reduction in their soap
and edible oil division (Exhibit 1.5B), though there has been an increase in
some of their segments. Their cost of sales has increased mainly due to
salary and wages, loading charges and factory rent (Exhibit 1.5C).
Net Margin Ratio:

20

Net Margin Ratio (%)


14
12
10
8
6
4
2
0
Net Margin Ratio (%)

Fig.9) Net Margin Ratio Comparison


The net margin ratio of Marico Bangladesh has drastically reduced and it
comparatively lower than the industry average. In contrast to the gross
margin ratio, this usually comprises of further non-manufacturing expenses
such as distribution and administration expense.

Exhibit 1.6A (Source: Marico Bangladesh Annual Report 2012)

Exhibit 1.6B (Source: Marico Bangladesh Annual Report 2012)


This ratio has decreased mainly due to the increase in distribution expenses
such as business promotion expenses and market research expenses which

21

was not a part of Marico Bangladesh during the previous year (Exhibit 1.6A
and 1.6B).

Return on Equity (ROE):

Return on Equity (%)


35
30
25
20
15
10
5
0

Return on Equity (%)

Fig.10) Return on Equity Comparison

In general return on equity is the rate of return on the share holder equity.
Higher return on Equity is better than lower and vice versa. From the
analysis, it shows that Maricos has higher return on equity than industry.
However in contrast to the previous year the ROE has drastically decreased
and the possible cause of this occurrence is the lower net income of 2012.

Return on Asset (ROA):


22

Return on Asset (%)


25
20
15
10
5
0

Return on Asset (%)

Fig.11) Return on Asset Comparison

In general return on asset shows the overall investment earned by the firm.
Higher return on asset is better for the company than lower.
From the analysis, we can assume that Marico is in a good position because
it is significantly higher than industry. It indicates that the companys assets
are being utilized at a fair efficiency. Higher return on asset shows that
company lower than average use of debt and lower return on asset shows
results from the companys higher-than-average use of debt. In contrast to
the previous years the ratio is relatively lower which is caused by the
increase in assets which increases the non-current assets in turn decreasing
the overall ratio with the decreased net income acting as a catalyst.

3.1.5 Market Value Ratios


23

Price/Earning Ratio:

Exhibit 1.7 (Source: Marico Bangladesh Annual Report


2012)

The Price/Earning ratio generally denotes the amount investors are willing to
pay per dollar of reported profits. The P/E ratio of Marico Bangladesh is BDT
22.6, which is good. Although the earnings per share have decreased in
contrast to the previous year (Exhibit 1.7), based on the other ratios it can be
assumed that the ratios will improve over the next years.

4.0

:Conclusion
24

The data analysis reveals some valuable findings pertinent to the


Financial Performance Analysis and valuation of Marico Bangladesh
Limited. It can be observed that overall the ratios may have declined to
some extent but they can surely be improved. The liquidity ratios have
decreased in general but the current ratio has improved due to decrease
in current assets. The efficiency ratios have decreased as well due to the
increase in fixed assets and the profitability ratios has declined overall
due to increased expenditures in the plant and distribution expenses.
Hence is can be stated that high turnover does not generally indicate a
good financial position.

Users

Perception

Basis of Judgment

Investors

Good

EPS, Price/Earning Ratio

Credit Analysts

Good

Current

Ratio,

Debt

Ratio
Managers

Improvement Required

Profitability Ratios

Fig.12) Perception of Different Users of Financial Performance Analysis and


valuation

An analysis from different view points shows that from the view of an
investor the performance is good based on the Earnings per share (EPS),
from the view point of the credit analysts, the performance is also reasonable
based on their current ratio, but from the view point of a manager, there are
some areas for improvement. Although this company has won praises and
received awards and recorded high turnovers, it can be said that only high

25

turnover does not signify that a company is performing well. There is always
scope for improvement.

5.0

Recommendation

Marico Bangladesh Limited must control costs and increase their efficiency.
The distribution expenses must be decreased and some of their product lines
must be scrutinized for improvement. They should spend more efficiently in
their marketing in order to increase their customer base. They should focus
more on the products which have a declining market. Their products
compete in a highly competitive market and hence a slight loss of market
share can cause massive damages to their Financial Performance Analysis
and valuation. In order to cope up in the FMCG segment of the market Marico
must spend more on their marketing and promotion activities.

26

6.0 List of References


Books:

Bagad, V.S. (2008) Management and Finance. Technical Publications.


Baker, H.K. and Powell, G. (2009) Understanding Financial
Management: A Practical Guide. John Wiley and Sons.
Besley, S. and Brigham, E.F. (2008) Essentials of Managerial Finance.
14th Edition. Thompson Higher Education.
Brigham, E.F. and Daves, P.R. (2009) Intermediate Financial
Management. 10th Edition. Cengage Learning.
Brigham, E.F. and Houston, J.F. (2009) Fundamentals of Financial
Management. 12th Edition. Cengage Learning.
Bull, R. (2007) Financial Ratios: How to use financial ratios to maximize
value and success for your business. Elsevier.
Gibson, C.H. (2010) Financial Reporting and Analysis: Using Financial
Accounting Information. 12th Edition. Cengage Learning.
Lasher, W.R. (2010) Practical Financial Management. 6th Edition.
Cengage Learning.
Lee, C.F. (2006) Encyclopedia of Finance. Springer.
Mayo, H.B. (2007) Investments: An Introduction. 9th Edition. Cengage
Learning.
Megginson, W.L. and Smart, S.B. (2008) Introduction to Corporate
Finance. 2nd Edition. Cengage Learning.
Peterson, P.P. and Fabozzi, F.J. (2012) Analysis of Financial Performance
Analysis and valuastion . 2nd Edition. John Wiley and Sons.
Siddiqui, S.A. (2006) Managerial Economics and Financial Analysis. New
Age International.

Websites:

27

(2012) 28 top brands win accolades, The Daily Star, 15 July 2012, [URL:
http://www.bangladeshnews24.com/thedailystar/2012/07/15/28-topbrands-win-accolades-7186.htm] (accessed: 20 November 2012)

(2012) Industry Comparison of Marico Bangladesh Limited, [URL:


http://investing.businessweek.com/research/stocks/financials/ratios.asp
?ticker=MBL:BD] (accessed: 2nd November 2012)
7.0 Bibliography

Books:

Bagad, V.S. (2008) Management and Finance. Technical Publications.


Baker, H.K. and Powell, G. (2009) Understanding Financial
Management: A Practical Guide. John Wiley and Sons.
Besley, S. and Brigham, E.F. (2008) Essentials of Managerial Finance.
14th Edition. Thompson Higher Education.
Brigham, E.F. and Daves, P.R. (2009) Intermediate Financial
Management. 10th Edition. Cengage Learning.
Brigham, E.F. and Houston, J.F. (2009) Fundamentals of Financial
Management. 12th Edition. Cengage Learning.
Bull, R. (2007) Financial Ratios: How to use financial ratios to maximize
value and success for your business. Elsevier.
Gibson, C.H. (2010) Financial Reporting and Analysis: Using Financial
Accounting Information. 12th Edition. Cengage Learning.
Lasher, W.R. (2010) Practical Financial Management. 6th Edition.
Cengage Learning.
Lee, C.F. (2006) Encyclopedia of Finance. Springer.
Mayo, H.B. (2007) Investments: An Introduction. 9th Edition. Cengage
Learning.
Megginson, W.L. and Smart, S.B. (2008) Introduction to Corporate
Finance. 2nd Edition. Cengage Learning.
Peterson, P.P. and Fabozzi, F.J. (2012) Analysis of Financial Performance
Analysis and valuastion . 2nd Edition. John Wiley and Sons.
Siddiqui, S.A. (2006) Managerial Economics and Financial Analysis. New
Age International.

Websites:
28

(2012) 28 top brands win accolades, The Daily Star, 15 July 2012, [URL:
http://www.bangladeshnews24.com/thedailystar/2012/07/15/28-topbrands-win-accolades-7186.htm] (accessed: 20 November 2012)

(2012) Industry Comparison of Marico Bangladesh Limited, [URL:


http://investing.businessweek.com/research/stocks/financials/ratios.asp
?ticker=MBL:BD] (accessed: 2nd November 2012)

Appendix
Appendix -A

29

(Source: Marico Bangladesh Annual Report 2012)

30

(Source: Marico Bangladesh Annual Report 2012)

31

Appendix B

(Source: Marico Bangladesh Annual Report 2012)

32

Appendix - C
Calculations:

3,772,368,319
1,580,629,566

Current Ratio =
=

Quick Ratio

2.39 Times

3,772,368,3191,777,938,918
1,580,629,566

=
=

1.26 Times

4,357,734,462
1,777,938,918

Inventory Turnover =
=

3.07 Times

Fixed Asset Turnover2012 =


=

6,036,260,121
430,263,163

14

Fixed Asset Turnover2011 =

6,124,079,239
278,328,750

= 22

Total Asset Turnover2012 =

6,036,260,121
4,202,631,482

33

= 1.44
Total Asset Turnover2011 =

6,124,079,239
4,613,066,124

= 1.3
Debt Ratio2012 =

1,599,437,266
4,202,631,482

= 0.38
Debt Ratio2011 =

2,150,468,795
4,613,066,124

= 0.46
1,498,505,659
6,036,260,121

Gross Margin Ratio =

= 0.2483 or 24.83%
Net Margin Ratio =

535,619,787
6,036,260,121

= 0.087 or 8.87%
Return on Asset =

535,619,787
4,202,631,482

= 0.1215 or 12.15%
Return on Equity2012 =

535,619,787
2,603,194,216

= 0.2057 or 20.6%
Return on Equity2011 =

770,628,693
2,462,597,329

= 0.312 or 31.2%

34

Price/Earning Ratio =

384.30
17

= 22.6

35