Project on financial and ratio

analysis of ANWAR GALVANIZING

and BD LAMPS

Submitted To:
SHAHZADA M. IMRAN
Sr. lecturer
School of business and economics (SBE)
North South University

Submitted By:
Abdullah Al Noman
Id: 1510941030
Sec-01
Fin254

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Executive summary:
A ratio analysis is a quantitative analysis of information contained in a
companys financial statements. Ratio analysis is based on line items
in financial statements like the balance sheet, income statement and cash
flow statement; the ratios of one item or a combination of items - to
another item or combination are then calculated. Ratio analysis is used to
evaluate

various aspects

of

companys operating

and financial

performance such as its efficiency, liquidity, profitability and solvency. The

trend of these ratios over time is studied to check whether they are
improving or deteriorating. Ratios are also compared across different
companies in the same sector to see how they stack up, and to get an idea
of comparative valuations. Ratio analysis is a cornerstone of fundamental
analysis.
Here I do the ratio analysis of ANWAR GALVANIZING and BD LAMPS.1st
of all in the findings part I calculate the liquidity, profitability, solvency,
turnover, and market share ratio. All the finding comes from the analysis of
balance sheet, the income statement and changes in equity statements for
both companys for last 5 years of data
After the analysis there have discussion about the companys condition in
the market and what they have to do for improvement and a suggestion for
the investors for choosing the best company for make their investment.

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Table of content:

Page

Liquidity ratio:
Current Ratio:

01

Quick Ratio: . 02

Long term solvency ratio:

Total Debt ratio: . 03
Times interest earned ratio: . .03

Assets management/Turnover ratio:

Receivable Turnover: 04
Days Sales Outstanding: 05
Inventory turnover: 05
Days inventory outstanding: .. 06
Total assets Turnover: 07

Profitability Ratio:
Gross profit Margin: .. .08
Operating profit margin: 09
Return on assets: .. 09
Return on equity: ... 09

Market value ratio:

Earnings per share(EPS): . 10
Recommendation: .. 11
FINDINGS:
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LIQUIDITY RATIO:
Current Ratio:
Name/Year
ANWARGAV
BD LAMPS
Industry Avg

2014
1.34
1.26
1.30

2013
1.27
1.30
1.28

2012
1.30
1.28
1.29

2011
1.27
1.58
1.425

2010

Compan

1.07
1.79
1.43

y avg
1
1
1

2
1.8
1.6
1.4
1.2
Anwar galv

BD lamps

0.8

industry avg

0.6
0.4
0.2
0
2014

2013

2012

2011

2010

Interpretation (Anwar galv): The current ratio of anwar galvanizing Ltd. is

almost stable. In 2014 companys current assets is 1.34 times higher than current
liabilities.
Interpretation (Bd lamps): current ratio of Bd lamps is decreasing for recent past
year. Its comes down 1.26 in 2014 from 1.79 in 2010. But still its current assets is
1.30 times higher than current liabilities

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 Quick Ratio:
Name/Year

2014

2013

2012

2011

2010

Company
avg
0

Anwar
0.45
0.41
0.55
0.41
0.30
Galv
0.76
0.79
0.76
1.13
1.39
BD Lamps
1
Industry
0.605
0.6
0.655
0.77
0.845
0.5
Avg
Interpretation (Anwar galv): current ratio except inventories or quick ration of anwar
galvanizing is almost stable in a lower rate. Its below than the minimum standard. Company will
face problem for future debt increase case.
Interpretation (Bd lamps): quick ratio of bd lamps saw that , In the year 2014, the companys
current assets except inventory were 0.76 times higher than the current liabilities. But its a bad
sign for company. Company will face problem due to increase the debt for recent future.
Evaluation with Industry average: current ratio of anwar galvanizing and bd lamps for the last
five years are almost stable. Comparing anwar galvanizing, debt paying power is littlie higher
than bd lamps. For the industry average anwer galvanizing is higher in 2014. In quick ratio, both
of them are in risky position as they are below from the minimum debt paying power.
Both of companies need more concern about their liquidity. They will face problem in recent
future to paying debt if they fail to maintain the standard liquidity percentage.

Long term solvency ratio:

Total Debt ratio:

Name/year
Anwargalv
Bd lamps
Indus. avg

2014
0.40
0.51
0.46

2013
0.43
0.49
0.46

2012
0.37
0.54
0.46

2011
0.37
0.40
0.36

2010
0.51
0.27
0.39

Com. avg.
0
0
0

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Interpretation (Anwar galv): In the year 2014, 40% of the total assets were financed by
others money. Its decrease from the previous year.
Interpretation (Bd lamps): In the year 2014, 51% of the total assets were financed by
others money. That is upper from the industry average.

Times interest earned ratio:

Name/year
Anwargav
Bd lamps
Indus. avg

2014
176.08
4.20
90.14

2013
355.87
0.39
178.13

2012
770.23
-0.53
384.85

2011
11.67
12.26
11.97

2010
1.05
12.11
6.58

Com. avg
263
6
134.5

Interpretation (Anwar galv): ): In the year 2014, a companys EBIT was 176.08 times
higher than the interest expense. Its decrease from the 2013 & 2012 TIE. But comparing with
2011 and 2010 TIE position its have a massive increase.

Interpretation (Bd lamps): ): In the year 2014, a companys EBIT was 4.20 times higher
than the interest expense. Its increase from the recent 2 past years.

Evaluation with industry average: In debt ratio anwer galvanizing is in a suitable

possible because of their other finance is lower than the industry average and they were able to
decrease the rate from previus year
In times interest earning the anwar galvanizing is in superior position in the market. Its TIE is so
high from the industry average. On the other hand bd lamps is in the problem in this area.

Assets management/Turnover ratio:

Receivable Turnover:
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Name/year

2014

2013

2012

2011

2010

Company
avg

Anwargav
Bd lamps
Indus. avg

30.52
5.03
17.6

21.95
4.23
13.3

18.82
3.60
11.2

28.47
2.59
15.6

17.05
5.28
11.1

23
4
13.5

35
30
25
20

Anwar galv
Bd lamps

15

Industry average

10
5
0
2014

2013

2012

2011

2010

Interpretation (Anwar galv): The collection of receivable of Anwar galvanizing is

increasing. This is a good sign for the company. Its increase 17.25, in 2010 to 30.52 in 2014.
The company average is 23.

Interpretation (Bd lamps): The receivable turnover of BD lamps company is decreasing .

company average collection number is too low. Its far below than the industry average. For
company operation success its need to improve here.

Days Sales Outstanding:

Name/year

2014

2013

2012

2011

2010

Company
avg
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19.71
18.32
13.22
42.83
20
87.90
91.62
155.79
138.36
108
53.81
27.49
84.51
45.29
64
Interpretation (Anwar galv): Anwar Galvanizing Ltd. collection of receivable in 2014
Anwargalv
Bd lamps
Indus. avg

7.01
67.88
37.44

was 7.01. Its decrease than the 2010 which was 42.83. its a good sign for the company.

Interpretation (Bd lamps): BD lamps collection of receivable is decrease too. But its much
higher than the industry average.

Inventory turnover:
Name/year
Anwargalv
Bd lamps
Indus. avg

2014
2.00
4.38
3.2

2013
1.97
3.56
2.7

2012
1.68
3.62
2.8

2011
1.97
4.19
3.1

2010
0.95
9.68
5.9

Com. avg
2
5
3.5

Interpretation (Anwar galv): In the year 2014, the company sold out and restocked their
inventory for 2 times. Its increase consistently the last 5 years.

Interpretation (Bd lamps): In the year 2014, the company sold out and restocked their
inventory for 4.38 times. That was incrase than the last 2years.

Days inventory outstanding:

Name/year
Anwargav
Bd lamps
Indus. avg

2014
206.43
109.20
157.82

2013
214.35
134.27
174.31

2012
257.35
129.29
193.32

2011
208.36
111.98
160.17

2010
498.79
49.27
274.03

Com. avg
277
107
192

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900
800
700
600
500

Industry AVG
Bd lamps

400

Anwar galv

300
200
100
0
2014

2013

2012

2011

2010

Interpretation (Anwar galv): ): In the year 2014, on an average inventories were held by
the company for 206.43 days. In 2010 it was 498.79. it saw that company perform good
comparatively recent year

Interpretation (Bd lamps): ): In the year 2014, on an average inventories were held by the
company for 109.2 days. That is good position from the industry average.

Total assets Turnover:

Name/year
Anwargalv
Bd lamps
Ind. avg

2014
0.73
0.98
0.86

2013
0.64
0.82
0.73

2012
0.50
0.70
0.35

2011
0.71
0.47
0.59

2010
0.37
0.82
0.60

Comp. avg
1
1
1

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Interpretation (Anwar galv): In the year 2014 Anwar galbanizing Ltds total assets
turnover was 0.73, that is means, using 1tk of total asset the company generated sales of 70
paisa. Its increase than the 2013 and 2012.

Interpretation (Bd lamps): In the year 2014 Bd lams Ltds total assets turnover was 0.98,
that is means, using 1tk of total asset the company generated sales of 98 paisa. Its increase than
the 2013 and 2012.

Evaluation with the industry average: The collection of receivable turnover for anwar
galvanizing is increasing last 5years. It is much higher than the industry average. on the other
hand bd lamps condition is bad in this sector. So we can say anwar galvanizing is more
acceptable an successful.
In days sales outstanding both company are able to decease the collection days. But we saw than
anwar galvanizing did this more effectively in the industry average.
In inventory turnover both are successful as they increase it. In that case bd lamps is in a good
position because of they are in higher position than the industry average.
In days inventory outstanding both of the companys were able to decrease the days. Bd lamps is
in suitable position as they are more effective in the industry.
In earnings agonist the total assets both are successful and Bd lams are in good position because
of they earn more than the industry average.

Profitability Ratio:
Gross profit Margin:

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Name/year
Anwargalv
Bd lamps
Ind. avg

2014
11.42
23.68
17.55

2013
13.38
23.66
18.52

2012
2011
2010
Comp. avg
15.80
11.02
23.01
15
21.91
22.27
23.49
23
18.86
16.65
23.24
19
Interpretation (Anwar galv): In the year2014, for each 100tk sales, the company
generated gross profit of 11.42tk. its decrease from year 2013 and 2012 and from the companies
5 years average.

Interpretation (Bd lamps): In the year2014, for each 100tk sales, the company generated
gross profit of 23.68tk.its upper from the industry average and they are in good position in the
market.

Operating profit margin:

Name/year
Anwargalv
Bd lamps
Indu. avg

2014
6.89
3.42
5.16

2013
10.11
0.79
6.5

2012
13.33
-1.71
5.9

2011
9.64
10.90
10.1

2010
17.03
15.01
16.02

Comp. avg
11
6
8.5

Interpretation (Anwar galv): In the year 2014, for 100tk of sales the company generated
operating profit of 6.89tk.

Interpretation (Bd lamps): In the year 2014, for 100tk of sales the company generated
operating profit of 3.42tk.

Return on assets:
Name/year
Anwargal
v
Bd lamps
Ind. avg

2014

2013

2012

22011

2010

3.65

3.64

3.95

4.08

0.09

1.59
2.62

-0.93
1.36

-3.70
0.13

3.42
3.75

4.05
2.07

Com. avg
3
1
2

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Interpretation (Anwar galv): In the year 2014, for every 100tk of investment in the total
asset the company generated net profit of 3.65tk.

Interpretation (Bd lamps): In the year 2014, for every 100tk of investment in the total
asset the company generated net profit of 1.59tk.

Return on equity:
Name/year
Anwargalv
Bd lamps
Ind. avg

2014
6.11
3.22
4.67

2013
6.39
-1.83
2.28

2012
6.30
-8.10
-0.9

2011
6.47
5.72
6.1

2010
0.18
5.51
2.9

Com. avg
5
1
3

Interpretation (Anwar galv): In the year 2014, for every 100tk of common stock equity,
the company generated net profit of 6.11tk.

Interpretation (Bd lamps): In the year 2014, for every 100tk common stock equity, the
company generated net profit of 3.22tk.

Evaluation with industrial average: In gross profit perspective bd lamp is in

good position . they produce more profit than the industry average.
In operation profit, anwar galvanizing is in good position as they produce more
profit than the industry average.
Return on assets, anwar galvanizing is in good position as they produce more profit
than the industry average.
Overall in this profitability anwar galvanizing is more effective in their business.

Market value ratio:

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Earnings per share(EPS):

Name/year
Anwar
galv
Bd lamps
Indu. avg

2014

2013

2012

2011

2010

0.50

0.52

0.51

0.52

0.13

2.12
1.5

-1.16
-0.32

-5.31
-2.9

6.54
3.6

8.57
4.4

Com. avg
0
2
1

15

10

Industry avrg
BD lamps

0
2014

Anwar galv
2013

2012

2011

2010

-5

-10

Interpretation (Anwar galv): In the year 2014, for each common stock outstanding, the
company generated net profit of 0.5tk

Interpretation (Bd lamps): In the year 2014, for each common stock outstanding, the
company generated net profit of 2.12tk.

Evaluation with industry average: in 2014 bd lamps is in good position according to

EPS. They earning higher than the industry average and their company average for the last 5
years was also high than the others. But in 2013 &2012 they losses magnificent amount of lose
and EPS was very much low. Except this they are the leader in the market for earnings per share.

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RECOMMENDATION:
Findings from this two companies(Anwar galvanizing and bd lamps) we can say that Anwer
galvanizing is in suitable position in yhe market . anwer galvanizing is in top position in
liquidity ratio, long term solvency ratio and most importantly profitability ratio. Their earning
per share is low than the industry. They have to concern about this and work on it. Bd lamps EPS
is in a good position which can able to give them a good position in the future market. Both of
the company is almost same in their activities and they are affected by the share market issue in
our country which created anarchy in our whole country and every industry. They are improving
now days and trying their level best to recover it and operate the market successfully

Conclusion:
These are the analysis of two companies from the engineering sectors. All the ratio are discussed
here and the recommendation part also included. Both of the companies need lot of improvement
for attracting the people for buing their share and for business success . we can find the details
analysis from this ratio analysis part.

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