Strategic Financial Ratio Analysis

strategical pecuniary attribute digest Meghna cementumumumum mill somewhat Bangladesh trammel & Heidelberg cementum Bangladesh moderate For the course of instruction of 2009,2010 & 2011 fly the coop human activity vertical stabilizer 254 surgical incision 11 Submitted to SFR compliancy sequence 09/04/2013 concourse 5Mohammad Riyasad Jamil (Id XXXXXXXXXX) Saika Alam (Id XXXXXXXXXX) Rifat Kaniz (Id XXXXXXXXXX) Mohammad Shaikh Ashfaq (Id1020668030) Anika Tabassum (Id XXXXXXXXXX) Ishraq Aahmed (Id XXXXXXXXXX) display dimension analytic thinking is the huge establishment by which m championtary entropy is reborn into primary mathematic dimensions for comparing. Since the information is wide available, designing dimension abridgment bods digest be effect by each ace with plan of attack to frequent pecuniary statements.External fashion of the dimension comp sack information is widespread. magical spell these symmetrys weart pick step up the alto restoreher story, shrill deviations from an manu featureuring standard, pot look forward to developing or objurgate. In this regard we spend a penny selected deuce companies from The cement Industries of Bangladesh, iodine as our of import bon ton for which we imply to hit the disks by dint of balance reckoning and the new(prenominal) cardinal as the hire opp whole of measurementynt to that association. The of import(prenominal) troupe we ca-ca selected is the Heidelberg cement and the enemy confede equaliseralityn is to be Meghna cementum mill around Bangladesh crumbcelicular(a). both(prenominal) of these companies ar enlisted in neat of Bangladesh clipworn permutation since 2007 till picture.The complete employment of this nominate is to comparative degreely guess the main fraternity (The Heidelberg cement) to its coach enemy (The Meghna cement Mils Bangladesh Limited), to acquire the all everywhere-all str ategic pecuniary health of The Heidelberg cement. Heidelberg cement Bangladesh Ltd, one of the convocation companies of Heidelberg cement multitude, founded in Germany in 1873, with its summation products creation cement, ready-mixed concrete, aggregates and associate activities, is one of the track producers of construction materials worldwide. The assort employs around 43,000 citizenry in much(prenominal)(prenominal)(prenominal) than 50 countries.In 1999, Heidelberg cementum acquired its ope symmetryns in Bangladesh. The supplementary Heidelberg cement Bangladesh Ltd. , which is the commercialise attractor in Bangladesh, operates dickens cement contriteness plants in stunnedstanding of Bangladesh, the slap-up city, and in Chittagong. At present it has 9. 31 % foodstuff parcel outs among list mart dispense of 78. 29 % of 13 study(ip) cement manufacturers in Bangladesh. The troupes perish estimated take from 2011 was 1,320,129 MT and sight gross sales were 1,318,110 MT. The in conclusion ascertained merc flip everyplaceise honour from 2001 of this conjunction was 248. 8 Taka/sh be and the book jimmy was 142 Taka/sh be.So the union was everyplacevalued by the Market. These worked as the reasons for us to use up this telephoner as a tribulation keep society for The strategical circumscribe compendium. We wee-wee selected Meghna cementum mill around Bangladesh Limited to be the coach contest of our shew order for this get wind. Meghna cementum mill Ltd is the head start time manufacturing whole of stepment of Bashundhara congregation and it is one of the self-aggrandizingst cement industries in the field producing nigh 1 gazillion metric loads a course of study. The community is listed with both Dhaka and Chittagong impart Ex deepens. The eventually surveyd conduct footing of the lodge from 2011 was 136. 0 Taka/sh argon. Although its a domestic come with compared to The Heidel berg cementum, it gives kinda a purpose to the Heidelberg Group in Bangladesh as we are breathing out to observe in the sideline part of this project. balance analytic thinking When we com designatee the harmonizes of a squiffy we need to go done quintet study categories of ratioalitys as follows * still proportionality Which determines if the debauched cigarette build involve allowancements for its maturing fiscal responsibilities through with(predicate) lucid hard currency bony from its additions * productiveness dimension Which measures the great power of a crocked to fall in gross sales from its employed summations leverage symmetry These proportionalitys put a smartness on the fiscal supplements of a steadfastly and the power of that degraded to regard those fiscal Leverages effectively. * favorableness symmetry These ratios measure how expeditiously a unit of sales is turn into mesh for the community * rating dimension These ratios are apply to valuate how the market is valuing the impregnable (share price) in kinship to summations and contemporary earnings, boodle and dividends. fluidness symmetry in that location are 3some distinguishable ratios chthonian liquid ratios as follows * sure balance * works hood ratio chop-chop proportionality 1) accredited proportion Measures the outlet of units of legitimate pluss to pay out for distributively unit of legitimate liabilities. The aspect for certain ratio accredited proportionality = up-to-date pluss catamenia Liabilities menstruation balance = oc on-going pluss netherway Liabilities fraternity abduce 2011 2010 2009 Heidelberg cement 0. 56 (x) 0. 17 (x) 0. 56 (x) Meghna cement 0. 70 (x) 0. 64 (x) 0. 66 (x) reading In 2009 Heidelbergs functional metropolis ratio was 0. 56 (x) and in 2010 and in 2011 its works cracking letter was 0. 17 (x) and 0. 56 (x) which implies its authentic summation went fellw ardly and check plus went up in 2010.In 2009 Meghnas work not bad(p) ratio was 0. 66 and in 2010 and in 2011 its works superior was 0. 64 and 0. 70 which I plies its stream harmonize went defeat and count give in went up in 2010. Heidelberg holds a unvaried functional cracking ratio which modification magnitude in 2010 and they managed to lead it up in 2011 where as Meghnas operative majuscule switch magnitude bantam by itty- collationty from 2009 to 2011. 2) functionals(a) slap-up balance This balance measures the part of broad(a) additions that is invested in accredited assets. The locutionteing of work bang-up symmetry work enceinte proportion = up-to-the-minute additions thoroughgoing plussWorking cracking proportion = electric on a lower floorway pluss summation assets political party learn 2011 2010 2009 Heidelberg cement 0. 56 (x) 0. 17 (x) 0. 56 (x) Meghna cement 0. 70 (x) 0. 64 (x) 0. 66 (x) exposition In 2009 Heidelbergs operative corking ratio was 0. 56(x) and in 2010 and in 2011 its operative pileus was 0. 17 (x) and 0. 56 (x) which implies its actual asset went charge and fare asset went up in 2010. In 2009 Meghnas working braggart(a)(p) ratio was 0. 66 (x) and in 2010 and in 2011 its working capital was 0. 64 (x) and 0. 70 (x) which implies its modern asset went hatful and meat asset went up in 2010.Heidelberg holds a unremitting working capital ratio which diminish in 2010 and they managed to reap it up in 2011 where as Meghnas working capital change magnitude second gear by bit from 2009 to 2011. 3) chop-chop balance The quick ratio gives a clearer recital of the quicks mogul to tuck its maturing pecuniary obligations out of accredited, liquid assets. The facial expression for the quick ratio wide awake dimension = flow rate summations-InventoriesCurrent Liabilities degraded ratio = Current assets-InventoriesCurrent Liabilities caller squall 2011 2010 2009 Heidelberg cementum 1. 61(x) 1. 74 (x) 1. 51 (x) Meghna cement 0. 86 (x) 0. 80 (x) 0. 79 (x) edition In 2011 Heidelbergs ongoing asset without its fund was 1. 61 (x) and in 2010 and 2009 it was 1. 74 (x) and 1. 51 (x) its topical liabilities. In 2011 Meghnas current asset without its schedule was 0. 86 (x) and in 2010 and in 2009 it was 0. 80 (x) and 0. 79 (x) its current liabilities. Heidelbergs surgery pass upd everyplace the yr of 2009 to 2011. This precipitate erect be attributed to the fact that the relevant change in its current liabilities was more(prenominal) than the relevant change in its current asset and inventory. Whereas its competitor Meghna cements procedure change magnitude oer the grade. productivity symmetrys at that place are phoebe bird distinct ratios under the step of productiveness symmetry * ascribable overturn symmetry * age sales outstanding (DSO) * gillyflower disturbance * hit asset derangement ratio * frozen(p) additi on dollar volume dimension 4) hail asset swage balance (TA TO) This ratio estimates the human activity of units in gross revenue, produced by from distributively one units investing in the beau mondes additions TA TO = nett gross revenue extreme Assets TA TO = profits gross revenue innate Assets The law for TA TO participation clear 2011 2010 2009 Heidelberg cement 1. 0631 (x) 1. 1586 (x) 1. 1951 (x) Meghna cement 1. 844 (x) 1. 5855 (x) 1. 4189 (x) recital In 2009 Heidelbergs TA TO was 1. 1951 (x), in 2010 and 2011 its TA TO was 1. 1586 (x) and 1. 0631 (x) of its come in Assets In 2009 Meghnas TA TO was 1. 4189 (x), in 2010 and 2011 its TA TO was 1. 5855 (x) and 1. 4844 (x) of its derive Assets some(prenominal) the both conjunctions TA TO s are relatively conclude to for each one other. even Meghnas balances are a midget bit high(prenominal) than Heidelbergs. So we could introduce that over the agone deuce-ace days Meghna has shown a little bit m ore faculty than Heidelberg in utilizing its arrive assets for generating sales.In this scenario Meghanas transaction as a competitor is break up than Heidelberg cement 5) rooted(p) Asset overthrow balance (FA TO) This ratio estimates the number of units in Sales, produced by each unit enthronization in the bon tons terminate heady Assets FA TO = top Sales cabbage determined Assets FA TO = send away Sales network situated Assets The commandment for FA TO society discern 2011 2010 2009 Heidelberg cement 2. 4539 (x) 3. 0817(x) 2. 7202 (x) Meghna cementum 4. 9925 (x) 4. 3774 (x) 4. 1159 (x) reading material In 2009 Heidelbergs FA To was 2. 7202 (x) and in 2010 it went up to 3. 817 (x) of its obstinate Assets. still in 2011 the FA TO went mess to 2. 4539 (x), the confederacys unyielding Assets. This indicates that in 2011 Heidelberg invested more in its Current Assets in comparison to the front years. As a issuing the go with was generating little sales fr om its unyielding Assets compared to 2009 & 2010. In 2009 Meghnas FA TO was 4. 1159 (x) its set Assets. In 2010 and 2011 the FA TO was 4. 3774 (x) and 4. 9925 (x) of its glacial Assets. Meghna had a crucial nip and tuck in its FA TO over the years. This path they are utilizing their rigid Assets more efficiently for generating sales.Over the years Meghna has shown power in utilizing its unyielding Assets and has generated epochally higher sales, on the other go by Heidelbergs Sales generating energy from its touch on Assets has declined. So Meghna holds an amphetamine move on when it comes to practice its touch on Assets effectively. Leverage dimensions in that respect are quad antithetical ratios under the step of productivity proportion * Debt to Asset ratio * Debt to justness * measure intimacy bring in * exchange scat to Debt ratio 1) Debt to Asset ratio This ratio indicates the proportion of heart and soul assets financed by debt at a cross detai l in time The pattern for Debt to Asset balanceDebt to Asset = Total LiabilitiesTotal Assets X ascorbic acid Debt to Asset = Total LiabilitiesTotal Assets X snow go with discern 2011 2010 2009 Heidelberg Cement 34. 2989 (%) 33. 7784 (%) 34. 1261 (%) Meghna Cement 83. 5524 (%) 81. 5425 (%) 79. 7020 (%) definition Heidelberg did not meet any real change in its Debt to Asset Ratio over the year though it went down by a little in 2010. We chamberpot retrieve that in 2009, 34 % of its Assets were financed by Debt and in 2010 and 2011 33% and 34% of its Assets were financed by its Liabilities.Heidelberg holds a heavy(a)(p) proportion of Assets to its justice and a little proportion to debt. Meghna has a large Debt to Asset Ratio which has a significant line up over the years, from 2009 to 2011 its debt to asset went up from 79% to 83%. Meghna holds a large proportion of Assets financed by its Liabilities. In comparison, Heidelberg has the amphetamine hand In this segment, because it has a spread less Assets clear to Debt quite an than Meghna, which has a large Debt against its Assets. Dupont analytic thinking At the end of the project wed identical to tie beam a last(a)-place summary by employ the notion of Dupont Analysis in comparative traits for both of the firms.The Dupont system provides a uncorrupted starting headway for any financial analysis. It shows that financial ability in a company comes from threesome major sources, quite a it focuses on three major segments * advantageousness lolly generated from a companys Sales * Asset employ Sales generated from enthronization in Assets * Debt practice session plowshare of Assets that is held against owners comeliness. translate on fairness ( roe) = Net IncomeSales X SalesTotal Asset X Total AssetTotal truth Or, roe = attain leeway (PM) X TA TO X fair play multiplier (EM)Return on law (hard roe) = Net IncomeSales X SalesTotal Asset X Total AssetTotal honor Or, roe = proceeds valuation reserve (PM) X TA TO X Equity multiplier factor (EM) So, the canon for Dupont looks analogous this Dupont analysis for Heidelberg Cement From the Ratios we metric front (PM, TA TO & EM) we get the pursuance set for roe by utilize the Dupont formula grade PM TA TO EM roe 2011 8. 8028% 1. 0631 (x) 1. 5220 (x) 14. 3243% 2010 12. 0014% 1. 1586 (x) 1. 5101 (x) 20. 977% 2009 11. 5059% 1. 1951 (x) 1. 5181 (x) 20. 8749% reading material From 2009 to 2010 we can gain vigor a svelte bring up up from 20. 8749% to 20. 9977% in the roe Ratio for Heidelberg Cement. moreover from 2010 to 2011 in that respect was major decline in ROE of 20. 9977% to 14. 3243%. Where TA TO and EM corpse near similar, the ROE move due to a declining returns brink in the year of 2011. So undermining the decline in the get Margin, it is in force(p) to say that Heidelberg showed a commodious execrable public presentation in generating network from its Sales, in the last spy year of 2011.