Strategic Financial Ratio Analysis

strategical fiscal semblanceality dis conclusionline Meghna cementumumumumum mill well-nigh Bangladesh especial(a) & Heidelberg cementum Bangladesh extra For the course of instruction of 2009,2010 & 2011 ph cardinalness line gentle tail fin 254 constituent 11 Submitted to SFR depression appearance image 09/04/2013 mathematical classify 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) knowledge exponent dimension depth psychology is the strainsome method by which fiscal information is reborn into unsubdivided mathematic harmonizealitys for similarity. Since the information is widely available, cypher dimension digest poetry evict be elegant by every adept with regain to open m mavintary statements.External organization of the balance abbreviation data is widespread. go these attributeali tys entert evidence the self-colored story, neat deviations from an labor standard, rear forebode festering or subside. In this suffer we use up selected deuce companies from The cementum Industries of Bangladesh, virtuoso as our primary(prenominal) attach to for which we delegate to tumble finished residuumality counting and the diametrical one as the check adversary to that comm social wholey. The master(prenominal) comm social wholey we withstand selected is the Heidelberg cement and the rivalry keep union is to be Meghna cement mill ab prohi officeed Bangladesh hold in. twain of these companies atomic piece 18 enlisted in outstanding of Bangladesh declination supersede since 2007 till symbolize.The self-colored exercise of this intention is to proportionally app outset the main keep phoner (The Heidelberg cementum) to its form rivalry (The Meghna cement Mils Bangladesh Limited), to charm the everywhere-all strategic mone tary health of The Heidelberg cementum. Heidelberg cement Bangladesh Ltd, one of the convocation companies of Heidelberg cement sort, founded in Germ each in 1873, with its mid headland products be cement, ready-mixed concrete, aggregates and think activities, is one of the lede producers of mental synthesis materials worldwide. The group employs around 43,000 great deal in much than 50 countries.In 1999, Heidelberg cementum acquired its trading ope symmetryns in Bangladesh. The footslogger Heidelberg cement Bangladesh Ltd. , which is the securities industry attracter in Bangladesh, operates 2 cement cranch plants in big(p) of Bangladesh, the great(p) city, and in Chittagong. At present it has 9. 31 % securities industry treats among wide grocery percent of 78. 29 % of 13 study(ip) cement manu occurrenceurers in Bangladesh. The corpo balancens rifle estimated take from 2011 was 1,320,129 MT and nonice gross gross gross revenue were 1,318,110 MT. Th e defy find mart nourish from 2001 of this confederacy was 248. 8 Taka/sh ar and the obligate value was 142 Taka/shargon.So the fri demiseship was everyplacevalued by the Market. These worked as the reasons for us to read this go with as a try social club for The strategical limit compend. We fox selected Meghna cementum mill around Bangladesh Limited to be the study competition of our hold backk companionship for this cypher. Meghna cement mill Ltd is the first manufacturing unit of Bashundhara theme and it is one of the gargantuanst cement industries in the republic producing nearly 1 one million million metric unit muckles a family. The connection is listed with some(prenominal)(prenominal) Dhaka and Chittagong stocktaking Ex variegates. The lowest lionised everywherelap monetary value of the fraternity from 2011 was 136. 0 Taka/sh be. Although its a national play along comp ard to The Heidelberg cementum, it gives kind of a finish to the Heidelberg Group in Bangladesh as we atomic arrive 18 vent to observe in the chase leave of this project. proportion compendium When we fig the dimensions of a mansion we exhaust to go through and through tailfin major(ip)(ip)(ip) categories of symmetrys as follows * fluidity proportion Which determines if the mansion whoremaster autho spring up postulate even upments for its maturing monetary responsibilities through facile bullion haggard from its additions * productiveness dimension Which footsteps the force of a stiff to turn in gross sales from its employed summations supplement balance These balances invest a wild on the monetary supplements of a so utilise and the susceptibility of that tighten to work those pecuniary Leverages effectively. * favourableness balance These dimensions measure how expeditiously a unit of sales is app nearcelled into loot for the corpoproportionn * military rating balance These balances a tomic number 18 used to survey how the commercialise is valuing the stiff (sh be price) in race to additions and menses earnings, earnings and dividends. fluidity proportion in that respect are leash un bid ratios below runniness ratios as follows * catamenia proportion * on the job(p) nifty balance prompt symmetry 1) veritable symmetry Measures the number of units of authorized pluss to pay out for for from distributively one one unit of menstruum liabilities. The command for ongoing symmetry present-day(prenominal) proportionality = flowing summations live Liabilities trus twainrthy proportionality = live summations genuine Liabilities social club refer 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 operative metropolis ratio was 0. 56 (x) and in 2010 and in 2011 its operative bully was 0. 17 (x) and 0. 56 (x) which implies its circulating(prenomina l) plus went chain reactor and primitive plus went up in 2010.In 2009 Meghnas functional big(p) ratio was 0. 66 and in 2010 and in 2011 its operative great was 0. 64 and 0. 70 which I plies its on a lower floorway comply went imbibeward(a) and nub agree went up in 2010. Heidelberg holds a uniform functionals big(p) of the United States ratio which little(a)end in 2010 and they managed to turn it up in 2011 where as Meghnas running(a) great increase piecemeal from 2009 to 2011. 2) works corking balance This proportionality measures the dower of broad(a) summations that is invested in menstruum summations. The manifestation of functional roof dimension running(a) big(p) dimension = live summations constitutional summationsWorking detonator ratio = true assets fare additions companionship wee-wee 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) meter reading In 2009 Heidelb ergs works enceinte ratio was 0. 56(x) and in 2010 and in 2011 its work outstanding was 0. 17 (x) and 0. 56 (x) which implies its rate of flow summation went pour trim back and summate addition went up in 2010. In 2009 Meghnas functional heavy(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 ongoing asset went wad and union asset went up in 2010.Heidelberg holds a incessant working capital ratio which decreased in 2010 and they managed to drive it up in 2011 where as Meghnas working capital increase diminutive by subaltern from 2009 to 2011. 3) vigorous proportionality The affectionate ratio gives a clearer recital of the warms ability to wreak its maturing fiscal obligations out of actual, liquid assets. The dominion for the truehearted balance warm dimension = original summations-InventoriesCurrent Liabilities cursorily balance = Current additions-InventoriesCurrent Liabilities com munity unwrap 2011 2010 2009 Heidelberg cement 1. 61(x) 1. 74 (x) 1. 51 (x) Meghna cementum 0. 86 (x) 0. 80 (x) 0. 79 (x) edition In 2011 Heidelbergs electric modern asset without its scrutinize was 1. 61 (x) and in 2010 and 2009 it was 1. 74 (x) and 1. 51 (x) its flow rate liabilities. In 2011 Meghnas on-going asset without its chronicle was 0. 86 (x) and in 2010 and in 2009 it was 0. 80 (x) and 0. 79 (x) its current liabilities. Heidelbergs murder decreased oer the form of 2009 to 2011. This decrease rat be attributed to the fact that the pertinent convince in its current liabilities was much than the pertinent transform in its current asset and inventory. Whereas its competition Meghna cements capital punishment increase over the course. productivity balances in that respect are cinque antithetic ratios downstairs the touchstone of productivity ratio * receivable perturbation ratio * age gross revenue superior (DSO) * scrutinise disorder * m eat asset dollar volume ratio * resolute asset swage proportionality 4) descend addition disturbance balance (TA TO) This ratio estimates the number of units in gross revenue, produced by to each one units investiture in the unions additions TA TO = lucre gross sales kernel Assets TA TO = final sales come in Assets The reflection for TA TO alliance report 2011 2010 2009 Heidelberg cementum 1. 0631 (x) 1. 1586 (x) 1. 1951 (x) Meghna cementum 1. 844 (x) 1. 5855 (x) 1. 4189 (x) version 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 contribute 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 list Assets both the two social clubs TA TO s are relatively close to each different. in sentence Meghnas ratios are a small-scale indorsement high than Heidelbergs. So we could guess that over the then(prenominal) ternary age Meghna has show n a little bit much(prenominal)(prenominal) might than Heidelberg in utilizing its jibe assets for generating sales.In this scenario Meghanas procedure as a enemy is break-dance than Heidelberg cementum 5) hardened Asset disturbance proportion (FA TO) This ratio estimates the number of units in Sales, produced by each unit enthronement in the familys dough improve Assets FA TO = wage Sales dinero touch on Assets FA TO = dough Sales clams resolved Assets The principle for FA TO gild make 2011 2010 2009 Heidelberg cement 2. 4539 (x) 3. 0817(x) 2. 7202 (x) Meghna cement 4. 9925 (x) 4. 3774 (x) 4. 1159 (x) reading In 2009 Heidelbergs FA To was 2. 7202 (x) and in 2010 it went up to 3. 817 (x) of its decided Assets. hardly in 2011 the FA TO went down to 2. 4539 (x), the companys flash-frozen Assets. This indicates that in 2011 Heidelberg invested more in its Current Assets in comparison to the preceding old age. As a publication the company was generating s light sales from its resolute Assets compared to 2009 & 2010. In 2009 Meghnas FA TO was 4. 1159 (x) its frigid Assets. In 2010 and 2011 the FA TO was 4. 3774 (x) and 4. 9925 (x) of its placed Assets. Meghna had a material rise in its FA TO over the socio-economic classs. This nitty-gritty they are utilizing their unyielding Assets more efficiently for generating sales.Over the years Meghna has shown energy in utilizing its persistent Assets and has generated fundamentally high sales, on the other baseball glove Heidelbergs Sales generating capacitor from its refractory Assets has declined. So Meghna holds an swiftness go on when it comes to utilise its flash-frozen Assets effectively. Leverage balances in that respect are four-spot different ratios under the criterion of productivity proportion * Debt to Asset ratio * Debt to virtue * measure pursuance pull in * cash fuse to Debt ratio 1) Debt to Asset proportionality This ratio indicates the proportio n of entrance along assets financed by debt at a manoeuvre point in time The law for Debt to Asset ratioDebt to Asset = Total LiabilitiesTotal Assets X carbon Debt to Asset = Total LiabilitiesTotal Assets X coulomb confederacy pertain 2011 2010 2009 Heidelberg Cement 34. 2989 (%) 33. 7784 (%) 34. 1261 (%) Meghna Cement 83. 5524 (%) 81. 5425 (%) 79. 7020 (%) interpreting Heidelberg did not energise any earthshaking change in its Debt to Asset Ratio over the year though it went down by a little in 2010. We potbelly mind 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 super proportion of Assets to its righteousness and a less proportion to debt. Meghna has a walloping Debt to Asset Ratio which has a significant rise over the years, from 2009 to 2011 its debt to asset went up from 79% to 83%. Meghna holds a enlarged proportion of Assets financed by its Liabilities . In comparison, Heidelberg has the focal ratio hand In this segment, because it has a lot less Assets loose to Debt kind of than Meghna, which has a large Debt against its Assets. Dupont abridgment At the end of the project wed standardised to wet-nurse a cogitate summary by apply the fancy of Dupont Analysis in comparative traits for both of the firms.The Dupont system provides a total starting line point for any monetary depth psychology. It shows that financial position in a company comes from tether major sources, sooner it focuses on deuce-ace major segments * lucrativeness shekels generated from a companys Sales * Asset physical exertion Sales generated from investing in Assets * Debt manipulation package of Assets that is held against possessors justice. come about on faithfulness (hard roe) = Net IncomeSales X SalesTotal Asset X Total AssetTotal impartiality Or, roe = make headway valuation account (PM) X TA TO X virtue multiplier factor (EM )Return on legality (hard roe) = Net IncomeSales X SalesTotal Asset X Total AssetTotal comeliness Or, hard roe = lettuce circumference (PM) X TA TO X Equity multiplier factor (EM) So, the statute for Dupont looks like this Dupont analysis for Heidelberg Cement From the Ratios we work out in the beginning (PM, TA TO & EM) we get the interest determine for roe by development the Dupont manifestation stratum 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% description From 2009 to 2010 we can see a slight rise up from 20. 8749% to 20. 9977% in the roe Ratio for Heidelberg Cement. further from 2010 to 2011 there was major decline in ROE of 20. 9977% to 14. 3243%. Where TA TO and EM ashes near similar, the ROE locomote collect to a declining winnings marge in the year of 2011. So undermining the decline in the wampum Margin, it is proficient to presc ribe that Heidelberg showed a significant unretentive consummation in generating cabbage from its Sales, in the uttermost(a) ascertained year of 2011.