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Fin 201

Business Finance

Ratio analysis of Apex Footwear Limited


Peer Group: Bata Shoe Company Ltd

From the year 2011-2015


Assignment on
Ratio analysis of Apex Footwear Limited
Peer Group: Bata Shoe Company Ltd

Prepared for
Urmi Dash

Lecturer

Department of Business Administration

East West University

Prepared by

Name ID
Md. Saiful Islam shuvo 2025-2-10-030
M. Nawshed Talukder 2015-2-10-98
Nadia Jahan 2015-1-10-133
Mahadi hasan 2015-2-10-121
Md. Anisur Rahman 2014-2-10-168

Section 7
Department of Business Administration
East West University (EWU)
Apex Footwear Limited

Apex Footwear Limited is the leading manufacturer and exporter of leather footwear from
Bangladesh to major shoe retailers in Europe, North America and Japan. It has started its
business in Bangladesh in 1990 from 4th January.In November 1993 it has listed on Dhaka Stock
Exchange. The local retail wing was established in 1997, with the vision of presenting the
Bangladeshi consumers with the opportunity to experience quality leather footwear designed
according to the latest market trends and technology from Europe. At the same time its product
range is tailored to deliver value for money for different price segments in the local market. It is
a public limited company. It has capacity to produce around 15,000 Pairs of shoe daily. In 2006
the name of the company changed to Apex Adelchi Footwear Limited and in 2013 the name
changed back to Apex Footwear Limited. Apex currently has over 210 retail outlets throughout
the country in addition to over 300 authorized retail sales distributors (RSDs) to ensure
nationwide coverage of its footwear. Through Apex4u.com, the company aims to make their
products available to the growing digital enthusiasts of the country, who prefer to save their
transportation time, search and buy products online. Apex is committed to deliver the same level
of service to its online customers that they have achieved through its retail channel. Through all
its activities, AFL is committed to productivity and quality to attain its objective of being a
leading footwear manufacturer of Asia through its mission of “Honest Growth”.

Vision

 Honest Growth

Mission

 To ensure sustainable growth


 To be a vendor of choice for our customers
 To create value for our shareholders
 To be proactively compliant with
 Global best practices & standards
 To be a responsible corporate citizen
Bata Shoe Company Ltd

The Bata Shoe Organization was founded in 1894 by Czech businessman Tomas Bata in the city
of Zlin, what was then Czechoslovakia.Since its founding, Bata has been at the forefront of
innovation; not only in the production and design of new styles, but in the creation of business
models that permit a quick response to the ever-changing wants and needs of our customers. As a
result, Bata enjoys a long history as a leading manufacturer and retailer of quality footwear, and
proudly serves some one million customers each dayIn Bangladesh. Bata started its operation in
1962. Currently Bata Shoe Company (Bangladesh) Limited operates two manufacturing facilities
– one in Tongi and the other in Dhamrai with a production capacity of 160,000 pairs of shoes
daily. Annual shoe sales currently stand about 30 million pairs.For over 13 decades, Bata has
been on the leading edge of footwear design. Today, professionals in Bata’s Shoe Innovation
Centers around the world continue the tradition of innovation as they dedicate themselves to
discovering new shoe materials, developing modern shoe technologies, and creating fresh
footwear that marries style with comfort.

Vision

 To make great shoes accessible to everyone

Mission

 To help people look and feel good.

 To be the customer's destination of choice.

 To attract and retain the best people.

 To remain the most respected Footwear Company.

Ratio Analysis

Profitability ratio:

Return on Common Equity (ROE)


The return on equity ratio or ROE is a profitability ratio that measures the ability of a firm to
generate profits from its shareholders investments in the company. In other words, the return on
equity ratio shows the return on the stockholders’ investment.

Return on Equity = Net Income ÷ Common Equity

Return on Equity (ROE) Ratio


2011 2012 2013 2014 2015
APEX 12.56% 11.32% 10.64% 7.70% 1.99%
BATA 37.19% 36.24% 36.03% 27.25% 28.05%

2011; 37.19% 2012; 36.24% 2013; 36.03%

2015; 28.05%
2014; 27.25%

APEX
BATA

2011; 12.56%
2012; 11.32% 2013; 10.64%
2014; 7.70%

2015; 1.99%

ROE measures theextent to which how much a company generated net income by using their
total share holders’ equity. In 2011 the ROE of Apex shoe was 12.56% that’s means Apex was
generated 12.56 taka net income by using their 100 taka share holder equity. From 2011- 2014
the ROE of Apex shoe was decreasing trend and from 2011-2013 the ROE of BATA shoe almost
stable. In 2014 the ROE of BATA shoe too much decreasing because of lower net income
generation. On the other hand from 2014-2015 the ROE of APEX shoe abnormally decreasing,
the reason behind the abnormal decreasing may be lower net income generation.
The overall ROE of BATA shoe is higher than Apex shoe.

Return on Total Asset (ROA)


ROA gives an idea as to how efficient management is at using its assets to generate earnings.
Calculated by dividing a company's annual earnings by its total assets, ROA is displayed as a
percentage. Sometimes this is referred to as "return on investment".

Return on Total Asset = Net income ÷ Total Asset

Return on Asset (ROA) Ratio


2011 2012 2013 2014 2015
APEX 3.64% 3.17% 2.77% 1.66% 0.41%
BATA 16.37% 16.88% 17.64% 14.30% 15.88%

2013; 17.64%
2012; 16.88% 2015; 15.88%
2011; 16.37%
2014; 14.30%

APEX
BATA

2011; 3.64% 2012; 3.17% 2013; 2.77%


2014; 1.66%

2015; 0.41%

ROA Ratio measures the extent to which how much net income a company is generated by using
their total assets. In 2011 the ROA of Apex shoe was 3.64% that means this company was
generated 3.64 taka net income by using their 100 taka total asset. From 2011-2014 the ROA of
Apex shoe was slowly decreasing trend and from 2011-2013 the ROA of BATA shoe almost
stable. In 2014 the ROA of BATA shoe decreasing because of lower net income generation. From
2014-2015 the ROA of Apex shoe was decreasing abnormally because of lower net income
generation.
The overall ROA of BATA shoe is higher than Apex shoe.

Gross Profit Margin (GPM) Ratio


Gross Profit Margin (GPM) Ratiois the percentage of revenue remaining after all cost of goods
sold has been deducted from a company's sales.

Gross Profit Margin = Gross profit ÷ Sales

Gross Profit Margin (GPM) Ratio


2011 2012 2013 2014 2015
APEX 14.31% 15.87% 15.68% 15.85% 16.76%
BATA 35.52% 36.10% 38.35% 38.77% 40.23%

2015; 40.23%
2013; 38.35% 2014; 38.77%
2011; 35.52% 2012; 36.10%

APEX
BATA
2015; 16.76%
2012; 15.87% 2013; 15.68% 2014; 15.85%
2011; 14.31%

GPM Ratio measure the extent to which how much gross profit a company generated from it
sales. In 2011 the GPM of Apex shoe was 14.31% that means this company was generated 14.3a
taka gross profit from its 100 taka sales. From 2011-2015 the GPM Ratio BATA and Apex was
increasing trend and there is no abnormal situation. The overall GPM ratio of BATA shoe is
higher than Apex shoe.

Net Profit Margin (NPM)

Net profit margin is the percentage of revenue remaining after all operating expenses, interest,
taxes and preferred stock dividends (but not common stock dividends) have been deducted from
a company's total revenue.
Net Profit Margin = Net Profit ÷ Sales

Net Income Margin (NPM) Ratio


2011 2012 2013 2014 2015
APEX 2.75% 2.66% 2.43% 1.77% 0.46%
BATA 8.73% 9.10% 10.32% 8.67% 9.76%

2013; 10.32%
2015; 9.76%
2012; 9.10%
2014; 8.67%
2011; 8.73%

APEX
BATA

2011; 2.75% 2012; 2.66% 2013; 2.43%


2014; 1.77%

2015; 0.46%

NPM measure the extent to which how much net profit a company generated from it sales. In
2011 the NPM of Apex shoe was 2.75% that means this company was generated 2.75 taka from
its 100 taka sales. From 2011-2014 the NPM of Apex slowly decreasing and from 2011-2013 the
NPM of BATA shoe was increasing trend. In 2014 the NPM of BATA shoe decreasing because of
lower net profit generation. On the other hand from 2014-2015 the NPM of Apex shoe was
decreasing abnormally. The reason behind the abnormal NPM may be lower profit generation.
The overall NPM of BATA shoe is higher than Apex shoe.

Liquidity Ratio:

Current Ratio
The current ratio is a liquidity ratio that measures a firm's ability to pay off its short-term
liabilities with its current assets.

Current Ratio = Current Assets ÷ Current Liabilities

Current Ratio
2011 2012 2013 2014 2015
APEX 1.12 1.20 1.19 1.17 1.08
BATA 1.47 1.49 1.62 1.71 1.95

2015; 1.95
2013; 1.62
2011; 1.47 2012; 1.49
2014; 1.71
2013; 1.19 2014; 1.17 APEX
BATA
2012; 1.20 2015; 1.08
2011; 1.12

Current ratio measures the extent to which a business has current assets to pay off its current
liabilities. In 2011 the current ratio of Bata was 1.47 times that means Bata had 1.47tk current
assets to pay off its 1tk current liability. In 2011 the current ratio of Apex was 1.12 times that
means Apex had 1.12tk current assets to pay off its 1tk current liability.From2011 to 2014 the
liquidity of Bata was increasing where the liquidity of Apex was in between increase and
decrease slightly. From 2014 to 2015 the liquidity of Bata was increased to 1.95 and the liquidity
of Apex was decreased to 1.08.

However, all the current ratios were below standard (2:1). So, the overall liquidity position of
both companies was below standard.

QuickRatio
The quick ratio is a financial ratio used to gauge a company's liquidity. The quick ratio is also
known as the acid test ratio. The quick ratio compares the total amount of cash + marketable
securities + accounts receivable to the amount of current liabilities.

Quick Ratio =Current Assets – Inventories


Current Liabilities

Quick Ratio
2011 2012 2013 2014 2015
APEX 0.52 0.53 0.48 0.42 0.35
BATA 0.51 0.54 0.63 0.71 0.87

2015; 0.87

2014; 0.71

2013; 0.63
2012; 0.54
2011; 0.51
2013; 0.48 APEX
2011; 0.52 2012; 0.53 2014; 0.42 BATA

2015; 0.35

Quick ratio measures the extent to which a business has current assets excluding inventory to pay
off its current liabilities. In 2011 the current ratio of Bata was 0.51 times that means Bata had
0.51tk current asset to pay off its 1tk current liability. In 2011 the current ratio of Apex was 0.52
times that means Apex had 0.52tk current asset to pay off its 1tk current liability.From2012 to
2015 the liquidity of Bata was increasing well from 0.54 to 0.87 where the liquidity of Apex was
decreasing from 0.53 to 0.35.

Risk Ratio:
Times-Interest-Earned (TIE) Ratio

Times interest earned (TIE) or interest coverage ratio is a measure of a company's ability to
honor its debt payments. It may be calculated as either EBIT or EBIT divided by the total interest
payable. Interest Charges = traditionally "charges" refers to interest expense found on the income
statement.

Times-Interest-Earned Ratio = Earnings Before Interest and Taxes ÷ Interest Expenses

TIE measures the extent to which a firm’s earnings before interest and taxes can decline before
these earnings are unable to cover annual interest cost.

Times Interest Earning (TIE) Ratio


2011 2012 2013 2014 2015
APEX 1.78 1.67 1.84 1.58 1.27
BATA 40.10 226.47 199.52 214.62 289.67

2015; 289.67

2012; 226.47
2013; 199.52 2014; 214.62
APEX
BATA

2011; 40.10

2011; 1.78 2012; 1.67 2013; 1.84 2014; 1.58 2015; 1.27

TIE ratio measures the extent to which a business has enough EBIT to pay off its interest
expense. In 2011 the TIE of Apex was 1.78 times that means Apex had 1.78 taka EBIT to pay its
1 taka interest expense. In 2011 the TIE ratio of Bata was 40.10 times that means Bata had 40.10
taka EBIT to pay 1 taka interest expense. The TIE ratio of Bata is increasing because of higher
EBIT generation in comparison to Apex. From 2011 to 2012 TIE ratio of Bata increased
abnormally to 226.47 times. The reason behind the abnormal TIE ratio of Bata may be the higher
EBIT generation to pay its lower interest expenses. From 2013 to 2015 the TIE ratio of Apex is
almost stable but the TIE ratio of Bata is increasing. So the overall risk condition of Apex is
stable and Bata is fluctuating.

So Bata has better ability to pay its interest of loans.

Debt Ratio

Debt/Equity Ratio is a debt ratio used to measure a company's financial leverage, calculated by
dividing a company's total liabilities by its stockholders' equity. The D/E ratio indicates how
much debt a company is using to finance its assets relative to the amount of value represented in
shareholders' equity.

Debt Ratio = Total Liabilities ÷ Total assets

Debt Ratio
2011 2012 2013 2014 2015
APEX 71% 72% 74% 78% 80%
BATA 56% 53% 51% 48% 43%

2014; 78% 2015; 80%


2012; 72% 2013; 74%
2011; 71%

2011; 56%
2012; 53% APEX
2013; 51%
2014; 48% 2015;
BATA 43%
Debt ratio measures the extent to which how much a company has taken loan to finance its total
asset. In 2011 the debt ratio of Apex was 71% that means Apex had 71 taka loan to finance its
100 taka asset.In 2011 the debt ratio of Bata was 56% that means Bata had 56 taka loan to
finance its 100 taka total asset. The debt ratio of Apex is increasing because of high amount of
total liabilities than Bata. From 2012 to 2015 the debt ratio of Apex was increasing. But the
scenario was totally opposite in Bata. From 2012 to 2015 debt ratio of Bata was declining, so
overall risk condition of Apex was increasing and the percentage of Bata’s assets financed by
creditors was decreasing. So Bata is less dependent on the creditors for its financing of assets.

Efficiency Ratio:

Account Receivable Turnover (ART) Ratio


Accounts receivable turnover is an efficiency ratio that measures how much a company is
efficient in managing its accounts receivable. The formula of ART is

Accounts receivable turnover = Sales ÷ Accounts receivable

Accounts Receivable (ART) Ratio


2011 2012 2013 2014 2015
APEX 9.96 12.30 11.35 8.85 8.04
BATA 34.88 26.70 18.09 17.73 9.40
2011; 34.88

2012; 26.70

2013; 18.09 APEX


2014; 17.73 BATA
2012; 12.30 2013; 11.35
2015; 9.40
2015; 8.04
2011; 9.96 2014; 8.85

ART ratio measures the extent to which a business is efficient in managing accounts receivable.
In 2011 the ART ratio of Apex shoe was 9.96 taka that means in comparison to 9.96 taka sales
Apex shoe had 1 taka accounts receivable. From 2011 to 2103 the ART ratio of Apex shoe was
increasing but in 2014 and 2015 the ART ratio was decreasing because of the high accounts
receivable generating. From 2011 to 2012 the ART ratio of Apex shoe was increased but the ART
ratio of Bata shoe was decreased. The overall situation of Bata shoe was decreasing. In
comparison to Apex shoe the ART ratio of Bata shoe was continuously decreasing because of the
high accounts receivable generating. The overall situation of Apex shoe was quite stable and the
overall situation of Bata shoe was decreasing and Apex shoe is less efficient than Bata shoe.

Inventory Turnover Ratio

The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is
managed by comparing cost of goods sold with average inventory for a period. This measures
how many times average inventory is "turned" or sold during a period. In other words, it
measures how many times a company sold its total average inventory dollar amount during the
year.

Inventory Turnover Ratio = Cost of Goods Sold ÷ Inventory

Inventory Turnover Ratio


2011 2012 2013 2014 2015
APEX 2.88 2.44 2.09 1.54 1.38
BATA 2.44 2.50 2.24 2.29 2.25
2011; 2.88
2012;
2012; 2.50
2.44
2013; 2.24 2014; 2.29
2013; 2.09 2015; 2.25
2011; 2.44
APEX
2014; 1.54
BATA
2015; 1.38

Inventory turnover ratio measures the extent to which hoe much a business is efficient in
managing its inventory. In 2011 the inventory turnover ratio of Apex shoe was 2.88 times that
means out off 2.88 taka COGS inventory was only 1 taka. From 2011 to 2012 the efficiency of
Apex shoe was decreased but the efficiency of Bata shoe was increased and from 2013 to 2014
the efficiency of Apex shoe was decreased but the efficiency of Bata shoe was increased. The
overall situation of both companies was fluctuating and Apex shoe is less efficient than Bata
shoe.

Fixed Asset Turnover (FAT) Ratio

Fixed asset turnover ratio compares the sales revenue a company to its fixed assets. This ratio
tells us how effectively and efficiently a company is using its fixed assets to generate revenues.
This ratio indicates the productivity of fixed assets in generating revenues. If a company has a
high fixed asset turnover ratio, it shows that the company is efficient at managing its fixed
assets. Fixed assets are important because they usually represent the largest component of total
assets.

Fixed Assets Turnover Ratios = Sales ÷ Net Fixed Assets

Fixed Assets Turnover (FAT) Ratio


2011 2012 2013 2014 2015
APEX 5.03 4.62 5.08 4.75 4.17
BATA 7.79 7.28 7.53 6.76 7.36
2011; 7.79
2012; 7.28 2013; 7.53
2014; 6.76 2015; 7.36

2011; 5.03 2013; 5.08


2012; 4.62 2014; 4.75
APEX
2015;
BATA 4.17

Fixed asset turnover ratio measures the extent to which how much sales are generated by using
fixed asset. In 2011 the FAT ratio was 5.03 times that means by using 1 taka fixed asset Apex
shoe generated 5.03 taka sales. From 2014 to 2015 the efficiency of Apex shoe was decreased
because of lower sales generation but the efficiency of Bata shoe was increased higher sales
generation. From 2014 to 2015 the efficiency of Apex shoe was decreased because of lower sales
generation but the efficiency of Bata shoe was increased because of higher sales generation. The
overall situation of both companies was fluctuating and Apex shoe is less efficient than Bata
shoe.

Total Asset Turnover (TAT) Ratio

Asset turnover is a financial ratio that measures the efficiency of a company's use of its assets in
generating sales revenue or sales income to the company. Companies with low profit margins
tend to have high asset turnover, while those with high profit margins have low asset turnover.

Total asset turnover ratio measures the extent to which a business is maintaining less total asset.

Total Asset Turnover = Sales ÷ Total Assets

Total Asset Turnover (TAT) Ratio


2011 2012 2013 2014 2015
APEX 1.32 1.19 1.14 0.94 0.88
BATA 1.87 1.86 1.71 1.65 1.63
2013; 1.71
2011; 1.87 2012; 1.86 2014; 1.65
2015; 1.63

2013; 1.14
2011; 1.32
2012; 1.19 2014; 0.94 APEX
BATA 0.88
2015;

TAT ratio measures the extent to which how much sales are generated by using total asset. In
2011 the TAT ratio of Apex shoe was 1.32 times that means by using 1 taka total asset Apex shoe
generated 1.32 taka sales. The overall efficiency of both companies was in decreasing trend
because of high amount of total asset. So, Apex shoe is less efficient than Bata shoe.

Accounts Payable Turnover (APT) Ratio

Accounts receivable turnover is an efficiency ratio that a company is efficient in managing its
accounts receivable. It also shows how effectively inventory is managed by comparing cost of
goods sold with average inventory for a period.

Accounts payable turnover ratio = Cost of Goods Sold ÷ Accounts Payable

Accounts Payable (APT) Ratio


2011 2012 2013 2014 2015
APEX 5.35 5.37 5.60 6.41 8.97
BATA 10.47 13.34 10.54 9.40 11.83
2012; 13.34
2015; 11.83
2013; 10.54
2011; 10.47
2014; 9.40
2015; 8.97
APEX
BATA
2013; 5.60 2014; 6.41

2011; 5.35 2012; 5.37

APT ratio measures the extent to which how much a business is efficient in managing its
accounts payable. In 2011 the APT ratio of Apex shoe was 5.35 times that means out off 5.35
taka COGS accounts payable was only 1 taka. From 2012 to 2013 the efficiency of Apex shoe
was low because of high COGS but the efficiency of Bata shoe was high because of high
accounts payable. From 2013 to 2014 the efficiency of Apex was low because of lower accounts
payable and the efficiency of Bata shoe was high because of high accounts payable. The overall
efficiency of Apex shoe was in decreasing trend but the overall efficiency of Bata shoe was
fluctuating and the Apex shoe was less efficient than Bata shoe.

Price/Earnings Ratio (P/E)

The price-earnings ratio (P/E Ratio) is the ratio for valuing a company that measures its current
share price relative to its per-share earnings. P/E measure the extent to which an investor is
willing to pay market price to earn companies EPS.

Price to earnings ratio = Market Price Per Share ÷ EPS

Price to Earning (PE) Ratio


2011 2012 2013 2014 2015
APEX 12.74 10.05 17.45 24.57 74.63
BATA 14.10 10.91 11.61 22.88 21.67
2015; 74.63

APEX
BATA

2014;
2014; 24.57
22.88 2015; 21.67
2013; 17.45
2011;
2011; 14.10
12.74 2012;
2012; 10.91
10.05 2013; 11.61

P/E ratio measures the extent to which an investor is willing to pay market price to earn
companies EPS. In 2011 the P/E of Bata was 14.10times that means investors were willing to
pay 14.10tk to earn 1tk EPS. From 2012 to 2015 P/E of Bata had been increased from 10.05 to
21.67 times an investor should buy the share as the growth opportunity is well.

In 2012 the P/E of Apex was 12.74times, that means investors were willing to pay12.74tkto earn
1tk EPS. From 2012 to 2014 P/E of Apex had been increased to 22.88from 10.91 times but in
2015 it was hugely increased to 74.63 times. As the growth opportunity is high so investors
should buy this share. If we compare the ratios, we can say that Apex is in a better position.

DuPont Analysis
DuPont analysis is represented in mathematical form by the following calculation:

ROE = Net Profit Margin× Total Asset Turnover × Equity Multiplier.

DuPont analysis breaks ROE into its constituent components to determine which of these
components is most responsible for changes in ROE.

APEX SHOE
DuPont Analysis
NPM TAT EM ROE
2014 0.0177 0.9380 4.6340 8%
2015 0.0046 0.8815 4.8993 2%
Most responsible factor to decrease of ROE of APEX
NPM TAT EM
2015 -73.97% -6.02% 5.73%

Axis Title

In 2014 to 2015 ROE of APEX decrease in 8% to 2% .The responsible factors behind the
decrease of ROE are Net profit margin, Total Asset turnover & Equity multiplier. In 2014 to
2015 percentage changes of Net profit margin is (73.97%), total asset turnover is (6.02%)
&equity multiplier is 5.73%. So the most responsible factor for decreasing ROE is Net profit
margin that means APEX could not able to earning profit.

BATA SHOE
DuPont Analysis
NPM TAT EM ROE
27
2014 0.08675 1.64829 1.90594 %
28
2015 0.09759 1.62755 1.76613 %

Most responsible factor to increase of ROE of BATA


NPM TAT EM
2015 12.50% -1.26% -7.34%

Axis Title

In 2014 to 2015 ROE of BATA is increase in 27% to 28%. The responsible factors behind the
increase of ROE are Net profit margin, Equity multiplier & total asset turnover. In 2014 to 2015
percentage changes of Net profit margin is 12.50%, equity multiplier is (7.34%) & total asset
turnover is (1.26%) So the most responsible factor for increasing ROE is Net profit margin. So
the overall performance of BATA is good.

Appendix and recommendations:

Income Statement of Apex


Year Year Year Year Year
Particulars 2011 2012 2013 2014 2015
Sales 9,499,256,667 9,748,378,905 10,940,035,731 11,463,903,330 11,348,848,158

Less: Cost of Goods Sold 8,139,592,270 8,201,767,621 9,224,697,113 9,646,779,450 9,446,476,343


Gross Profit 1,359,664,397 1,546,611,284 1,715,338,618 1,817,123,880 1,902,371,815

Marketing and administration 607,992,149 705,922,537 851,923,439 955,464,245 1,183,561,097


Audit fee 1,136,000 846,625 300,000 350,000 350,000
Professional fee - 0 1,330,000 1,164,650 1,666,096

Less: Total operating expenses 609,128,149 706,769,162 853,553,439 956,978,895 1,185,577,193


EBIT 750,536,248 839,842,122 861,785,179 860,144,985 716,794,622
Interest 422,058,353 501,850,469 469,123,106 543,869,291 564,595,223
Other income 534,116 1,070,936 6,444,599 2,462,876 2,584,442

Profit before WPPF and tax 329,012,011 339,062,589 399,106,672 318,738,570 154,783,841
Contribution to WPPF 15,667,239 16,145,838 19,005,080 15,178,027 7,370,659
EBT 313,344,772 322,916,751 380,101,592 303,560,543 147,413,182
TAX 52,333,579 64,061,802 114,468,410 100,465,807 95,072,541
Net Income 261,011,193 258,854,949 265,633,182 203,094,736 52,340,641

Number of share holders 11,250,000 11,250,000 11,250,000 11,250,000 11,250,000


Market price 295.60 231.25 412.10 443.49 347.20
EPS 23.20 23.01 23.61 18.05 4.65

Balance Sheet of APEX


Year Year Year Year Year
Particulars 2011 2012 2013 2014 2015
Inventories 2,828,333,227 3,361,715,040 4,410,456,834 6,271,221,533 6,835,049,107
Accounts receivable 953,496,096 792,733,240 963,826,558 1,295,107,098 1,411,780,886
Advances, deposits and prepayments 1,298,835,570 1,713,564,145 1,853,793,815 2,050,160,116 1,799,682,373
Cash and cash equivalents 211,730,599 189,157,350 192,479,034 192,884,592 103,541,606
Current Assets 5,292,395,492 6,057,169,775 7,420,556,241 9,809,373,339 10,150,053,972
Property, plant and equipment 1,627,833,721 1620121707 1609554112 2346668818 2413983453
Capital work in process 258,242,310 489411866 542859415 63753252 308778699
Investment in CDBL 1,569,450 1569450 1569450 1569450 1569450
Fixed Assets 1,887,645,481 2,111,103,023 2,153,982,977 2,411,991,520 2,724,331,602
Total Assets 7,180,040,973 8,168,272,798 9,574,539,218 12,221,364,859 12,874,385,574
Short term loan 2,772,159,543 2,838,843,591 4,010,329,345 6,017,134,872 7,412,869,956

Obligation under long term loan 112,104,235 264,147,937 149,934,688 343,667,673 278,070,255
Accounts Payables 1,520,591,753 1,525,925,393 1,647,034,869 1,503,823,633 1,053,696,908
Accrued expenses 106,491,394 168,369,156 166,170,537 171,865,656 239,956,055
Interest payables - - 12,438,427 3,632,149 5,195,456
Provision for taxation 194,868,807 258,930,609 268,409,056 360,810,764 418,297,572
Unclaimed dividend 3,324,149 4,613,375 6,459,957 11,604,937 12,822,504

Total Current Liabilities 4,709,539,881 5,060,830,061 6,260,776,879 8,412,539,684 9,420,908,706


Long term loan 249,584,086 628,575,158 605,401,531 940,305,381 562,974,607
Retirement benefit obligation gratuity 142,416,034 192,136,658 212,246,705 231,185,955 262,702,780
Total Long Term Liabilities 392,000,120 820,711,816 817,648,236 1,171,491,336 825,677,387
Total Liabilities 5,101,540,001 5,881,541,877 7,078,425,115 9,584,031,020 10,246,586,093
Share capital 112,500,000 112,500,000 112,500,000 112,500,000 112,500,000
Share premium 68,804,919 68,804,919 68,804,919 68,804,919 68,804,919

Dividend equalization fund 33,750,000 33,750,000 33,750,000 33,750,000 22,500,000


Revaluation surplus 1,091,423,710 1,091,423,710 1,091,423,710 1,091,423,710 1,091,423,710
Retained earnings 772,022,343 980,252,292 1,189,635,474 1,330,855,210 1,332,570,852
Total Shareholder's Equity 2,078,500,972 2,286,730,921 2,496,114,103 2,637,333,839 2,627,799,481
Total Equity and Liabilities 7,180,040,973 8,168,272,798 9,574,539,218 12,221,364,859 12,874,385,574
AFN TRUE TRUE TRUE TRUE TRUE

INCOME STATEMENT of BataCompany (Bangladesh) Limited


Year Year Year Year Year
Particulars 2011 2012 2013 2014 2015
Sales 6,647,846,013 7,384,505,735 7,878,975,170 8,076,995,037 8,522,801,619
Less: Cost of Goods
Sold 4,286,593,663 4,718,506,064 4,857,762,141 4,945,486,549 5,094,404,901
Gross Profit 2,361,252,350 2,665,999,671 3,021,213,029 3,131,508,488 3,428,396,718
Exchange gain/ loss -2517182 (4,130,083) 4,351,351 6,886,918 5,239,590
Other income 21,210,803 26,776,981 18,424,860 20,221,586 8,259,742

Administrative, selling
and distribution
expenses (1,529,417,293) (1,683,027,051) (1,837,320,706) (2,096,017,729) (2,195,830,942)
Total operating
expenses: (1,510,723,672) (1,660,380,153) (1,814,544,495) (2,068,909,225) (2,182,331,610)
EBIT 850,528,678 1,005,619,518 1,206,668,534 1,062,599,263 1,246,065,108
Finance income 6,071,420 21,335,940 13,361,966 13,846,600 28,842,956
Less: Interest 21,210,569 4,440,402 6,047,801 4,951,020 4,301,610
Profit before WPPF and
tax 835,389,529 1,022,515,056 1,213,982,699 1,071,494,843 1,270,606,454
Contribution to WPPF 41,769,476 51,125,753 60,699,135 53,574,742 63,529,923
EBT 793,620,053 971,389,303 1,153,283,564 1,017,920,101 1,207,076,531
TAX 213,003,000 299,473,000 340,200,000 317,250,000 375,324,000
Net Income 580,617,053 671,916,303 813,083,564 700,670,101 831,752,531

Number of shares 13,680,892 13,679,078 13,679,064 13,679,619 13,680,140


Market price 598.50 535.70 690 1172.10 1317.70
EPS 42.44 49.12 59.44 51.22 60.8

Balance Sheet of BataCompany (Bangladesh) Limited


Particulars
Year Year Year Year Year
2011 2012 2013 2014 2015
Inventories 1,756,397,259 1,888,784,523 2,167,843,253 2,159,099,409 2,266,352,009
Accounts receivable 190,610,122 276,562,580 435,657,233 455,472,117 906,907,928
Advances, deposits and
prepayments 443,022,574 566,731,442 702,987,654 798,868,138 554,607,909
Cash and cash equivalents 302,767,543 233,459,170 257,439,710 292,396,800 351,378,131
2,965,537,71 3,563,927,85 3,705,836,46 4,079,245,97
Total Current Assets 2,692,797,498 5 0 4 7
Property, plant and equipment 731,871,393 880,326,133 932,544,605 998,104,774 1,049,379,561
Capital work in process 38,251,715 2,059,472 0 59,367,881 0
Investment in subsidiary 19,970,000 0 0 0 0
Prepayment of rent 63,835,963 132,100,000 113,965,000 136,911,904 106,368,047
Deferred tax assets - 0 0 0 1,600,000
1,014,485,60 1,046,509,60 1,194,384,55 1,157,347,60
Total fixed assets 853,929,071 5 5 9 8

Total assets 3,546,726,569 3,980,023,320 4,610,437,455 4,900,221,023 5,236,593,585


353,751,43 460,953,22 526,075,94 430,751,62
Accounts Payables 409,263,569 8 2 8 5

Creditors for expenses 300,735,251 420,194,568 443,624,893 346,800,443 467,139,166

Creditors for other finance 230,638,433 241,388,294 273,340,269 262,185,527 312,235,403


385,280,47 375,921,78 382,765,94 410,874,94
Accrued expenses 346,740,381 7 4 4 1
530,956,88 586,559,13 579,559,13 75,879,18
Provision for tax 483,230,866 9 0 0 7

Unclaimed dividend 62,839,163 58,333,411 64,347,270 68,717,138 397,115,839


1,989,905,07 2,204,746,56 2,166,104,13 2,093,996,16
Total Current Liabilities 1,833,447,663 7 8 0 1
123,817,66 134,506,74 162,343,00 177,589,00
Deferred liability 150,704,000 4 4 0 0
12,300,00 14,500,00 750,00
Deferred tax liability 1,500,000 0 0 0 -
136,117,66 149,006,74 163,093,00 177,589,00
Total Long Term Liabilities 152,204,000 4 4 0 0
2,126,022,74 2,353,753,31 2,329,197,13 2,271,585,16
Total Liabilities 1,985,651,663 1 2 0 1
Share capital 136800000 136800000 136800000 136800000 136800000
1,717,200,57 2,119,884,14 2,434,223,89 2,828,208,42
Reserve and surplus 1,424,274,906 9 3 3 4
1,854,000,57 2,256,684,14 2,571,023,89 2,965,008,42
Total Shareholder's Equity 1,561,074,906 9 3 3 4
3,980,023,32 4,610,437,45 4,900,221,02 5,236,593,58
Total Equity and Liabilities 3,546,726,569 0 5 3 5
AFN TRUE TRUE TRUE TRUE TRUE

Findings:

Apex Shoe
Ratio
Analysis
2011 2012 2013 2014 2015
Liquidity Current
Ratio Ratio 1.12 1.20 1.19 1.17 1.08
(Times) Quick
Ratio 0.52 0.53 0.48 0.42 0.35
Profitability ROE
Ratio 12.56% 11.32% 10.64% 7.70% 1.99%
ROA
3.64% 3.17% 2.77% 1.66% 0.41%
GPM 14.31% 15.87% 15.68% 15.85% 16.76%
NPM
2.75% 2.66% 2.43% 1.77% 0.46%

Risk Ratio TIE


1.78 1.67 1.84 1.58 1.27
DEBT
71% 72% 74% 78% 80%

Efficiency ART 9.96 12.3 11.35 8.85 8.04


Ratio
IT 2.88 2.44 2.09 1.54 1.38
FAT 5.03 4.62 5.08 4.75 4.17
TAT 1.32 1.19 1.14 0.94 0.88
APT 5.35 5.37 5.60 6.41 8.97
Market
Performanc
e Ratio P/E
12.74 10.05 17.45 24.57 74.63

Bata shoe
Ratio
Analysis
2011 2012 2013 2014 2015
Liquidity Ratio (Times) Current Ratio
1.47 1.49 1.62 1.71 1.95
Quick Ratio
0.51 0.54 0.63 0.71 0.87

Profitability Ratio ROE


37.19% 36.24% 36.03% 27.25% 28.05%
ROA 16.37% 16.88% 17.64% 14.30% 15.88%
GPM 35.52% 36.10% 38.35% 38.77% 40.23%
NPM
8.73% 9.10% 10.32% 8.67% 9.76%

Risk Ratio TIE


40.1 226.47 199.52 214.62 289.67
DEBT
56% 53% 51% 48% 43%

Efficiency Ratio ART 34.88 26.70 18.09 17.73 9.40


IT 2.44 2.50 2.24 2.29 2.25
FAT 7.79 7.28 7.53 6.76 7.36
TAT 1.87 1.86 1.71 1.65 1.63
APT 10.47 13.34 10.54 9.40 11.83
Market
Performanc
P/E
e Ratio 14.10 10.91 11.61 22.88 21.67

Better Option for Investment:

1. Liquidity Ratio: The overall liquidity ratio of Apex Shoe was lower than the liquidity
ratio of Bata Shoe. Apex’s quick ratio and current ratio indicates their lower ability to
pay back to their creditors.
2. Profitability Ratio: The position of profitability ratio of Apex Shoe was below than the
Bata Shoe. We can say that it is riskier to invest in Apex while investing in Bata is wise.
3. Risk Ratio:
a) The times interest earned ratio also shows the weaker position of Apex. But Bata’s
TIE ratio is also very much higher.
b) Apex’s debt ratio is which means Apex has a lot of liabilities comparing to its
total assets. Apex depends a lot to its creditors for financing its assets. On the
other hand, Bata holds a decent figure of debt ratio.
4. Efficiency Ratio:
a) The accounts receivable turnover ratio, total asset turnover ratio and fixed asset
turnover ratio for Apex were lower than Bata.
b) The inventory turnover ratio of Apex in the beginning was higher than Bata but
gradually it was decreasing from 2012 to 2015. And the inventory turnover ratio of
Bata was almost stable from 2012 to 2015.
c) The overall accounts payable ratio of Apex was in better position than Bata because
the bargaining power of Apex was better than the Bata.
5. Market Performance Ratio: The price to earnings ratio of Apex was better than the
Bata because the growth rate of Apex was higher than the Bata.