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Singer Bangladesh Limited
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OBJECTIVE OF THE STUDY
Sources
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Company Profile
Company Name:
SINGER BANGLADESH LIMITED (SBL)
Corporate History.
# Year of Establishment of/ Incorporation 1979
# Commencement of Leasing Business 1987
# Establishment of Branch in the main port city,
Chittagong 1991
# Listed on the Dhaka Stock Exchange 1993
# Licensed by Bangladesh Bank for
deposit taking 1995
His vision
To be the most admired and respected family company in the country.
His mission
Our mission is to improve the quality of life of people by providing comforts
and conveniences at affordable prices.
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Communize Analysis/ Time Series Analysis
This analysis we can evaluates performance of the internal
progress year to year. Here we have analyzed of the year 2007,
2006, 2005, and 2004.
SBL
TK-in million
SI Name of the Ratio 2007 2006 2005 2004
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11 Debt. Ratio- Debt 83.74% 81.62% 86.38% 81.85%
Utilization ratio
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Profit Margin Ratio
Net Profit
Profit Margin Ratio =
Sales
Interpretation
In 2007 the net profit margin ratio was 2.86% which is lower then
2006 and 2004 where the ratios were 4.58% and 5.68% and this as
not better performance of the firm.
Recommendation
Company should increase their EBIT to keep increasing net profit.
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Return on Asset
Net Income
ROA =
Total Assets
Interpretation
In 2004 the ratio was 7.17% which was higher then 2005, 2006
and 2007 where the ratios were 3.10%,6.51% and 4.44% and
these indicates the poor position then 2004.
Recommendation
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The ratio of net income to common equity measures the return on
common equity or the rate of return on stockholders investment,
Net Income
Return on equity =
Total stockholders equity
Interpretation
Recommendation
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The receivables turnover indicates the number of times on the
average that receivables turnover each year. Receivables turnover
is calculated follows:
Credit sales
Receivables turnover =
Receivables
Interpretation:
In 2004 the debt ratio of the SBL was 8.16 which is higher then
2005, where the ratio was7.80. But this is higher then 2006, 2007
where the ratios were 6.68& 6.76.
Recommendation
Company must increase the ratio by decreasing total liabilities or
increasing total asset for achieving better position.
Average collection period (DSO)
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Receivables
Average collection period =
Average daily credit sales
Recommendation:
In 2004 the DSO of SBL was 44.15 days which was increased.
But this also too much time to collect A/R. In 2005, 2006, 2007
the time was 46.17, 53.86 and 53.28.
Interpretation:
Much should aware about this fact that they should try to decrease
the time period to collect money from A/R to get a good position.
Inventory turnover:
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Inventory turnover =
Inventory
The ratio of inventory turnover of this firm is given below:
Interpretation:
In 2004 the inventory turnover ratio of the SBL was 2.54 which is
very close to one another. And here in 2005, 2006, 2007 the ratio
was 2.73, 2.53 and 2.54.
Recommendation
Company must increase the ratio by decreasing total liabilities or
increasing total asset in better position.
The fixed asset turnover ration measures how effectively the firm
uses its plant and equipment to help generate sales. It is the ration
of sales to fixed assts.
Sales
Fixed Assets Turnover Ratio =
Fixed Assets
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If the present fixed asset turnover ratio is greater than past ratio
that would be better for a company. Our analyses of SBL for fixed
asset turnover ratio of 4ears are
Interpretation
In 2004, fixed asset turnover ratio was 10.675which was less then
2007, where the ratio was10.87. We can also see in 2005 & 2006’s
ratio were 10.23 &8.36.
Recommendation
The total Asset turnover ratio measures how effectively the firm
uses its total assets to help generate sales. It is the ratio of sales to
total assets.
Sales
Total asset turnover:
Total assets
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If the present total assets turnover ratio is higher then previous it
would be better for the company’s present performance. Our
analysis of this ratio of SBL of 4 ears is,
Interpretation
Recommendation
Current Ratio
The Current ration measures then ability firm’s to meet its short-
tern obligations. It is expressed as follows:
Current assets
Current Ratio:
Current liabilities
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Current Asset includes cash, account receivable and inventories.
And current liabilities consist of all payables, current maturities of
long tern debt, accrued expenses. It the current liabilities are
rising fast than current Assets, the CR will fall and when CR is
increased this post year, the present performance of the company
will be better then post performance. Here is the 4years CR of
SBL:
2007 2006 2005 2004
1.21 1.23 1.41 1.66
Interpretation:
In 2007 the CR of SBL was tell which was lower than 2004 when
the ratio 1.21which is worst position during 4 years. 2004 are the
sure which was considered as good performance.
Recommendation:
By the analysis of 4 years CR of SBL. We can find that the
company hasn’t done well over the year and to improve the
situation it should graphically enlarge CR by increasing CA or
decreasing CL.
Quick ratio:
The quick ratio or acid test ratio is calculated by deducting
inventories from current assets and dividing the result by current
liabilities. The quick ratio is a variation of the current ratio. The
quick ratio or acid test ratio is calculated as follows:
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Current assets-Inventory
Quick ratio =
Current liabilities
Interpretation:
In 2004 the debt ratio of the SBL was 0.67which is higher then
2007, where the ratio was0.51. But this is lower then 2005, 2006,
where the ratios were 0.82, 0.54.
Recommendation
Debt Ratio
Total Liabilities
Debt Ratio
Total Assets
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Total debt includes both CL and LLB tern debt, creditors prefer
low debt ratios because the lower the ratio the greater the cushion
against creditors losses in the event of liquidation. Our analysis of
this ratio of SBL for 4 years is given below:
Interpretation:
In 2004 the debt ratio of the SBL was 81.86 which is lower then
2007, where the ratio was 83.74. But this is lower then 2005
where the ratios 86.38%
Recommendation:
Company must decrease the ratio by decreasing total liabilities or
increasing total asset in better position.
The time interest earned ratio, measures the firm’s ability to make
contractual interest payment, Sometimes it also called as interest
coverage ratio, the formula of this ratio is:
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This ratio measures the extent to which operating income can
decline before the form is unable to meet its annual interest costs.
If the present ratio is higher then post then it would better for the
firm. But the company has to pay tax fewer for lower time interest
earned. Our analyses of this SBL are,
Interpretation
In 2004 the time interest earned ratio was 13.46 which were
higher then 2007, where the ratio was 1.79. In 2006 though ratio
was 2.08 which was lower than 2005.
Recommendation
By the analysis of 4 years ratio we can say that, if the company
wishes to decrease its taxation, the company should increase their
EBIT.
Fixed charge coverage
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Income before fixed charge and taxes
Fixed charge coverage =
Fixed charge
Interpretation:
In 2004 the time interest earned ratio was 13.46 which were
higher then 2007, where the ratio was 1.79. In 2006 though ratio
was 2.08 which was lower than 2005.
Recommendation:
By the analysis of 4 years ratio we can say that, if the company
wishes to decrease its taxation, the company should increase their
EBIT.
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Earning Per Share =
Number of shares
Interpretation:
In 2007 the earning per share of SBL was 61.26% which is lower
than 2006, where the ratio was 70.18%. But the ratio of 2005 was
29.1% which is lower than 2004 where the ratio was 47.75%.
Recommendation:
EPS is closely watched by then investing public and is considered
an important indictor of corporate EPS success and by the above
analysis we can see the good position of the firm.
Cash Dividend
DPS =
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Number of Share
Interpretation:
The ratio of dividend per share of 2007, 2006, 2005 and 2004 are
35%, 35%, 30%and 80%. Which are same over 2 years and it
decreases 50% in 2005.It rises 5%in 2006.
Recommendation:
Ratio rate was by this analysis we can see the increasing and this
should be encourage to be attract the shareholder.
Final Recommendation
The EPS and DPS of the SBL were in good position but the firm
must should be were of its increasing liabilities. And it also try to
utilize it’s assets by effective uses. In other hands the time period
of required account receivable collecting which should be
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decreased. And to increase the total asset turnover the firm should
increase its sales and to increase its net income, it should increase
its EBT company must should were of these fact to reach in the
better position.
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