Usmania Glass Final

Financial Analysis of Usmania Financial Analysis of Usmania Glass Sheet Factory LimitedGlass Sheet Factory Limited

Financial Analysis of Usmania Financial Analysis of Usmania Glass Sheet Factory LimitedGlass Sheet Factory Limited

PresentersPresenters

Faisal MahmudFaisal Mahmud Roll # 01Roll # 01

Tanvir B. AnwarTanvir B. Anwar Roll # 02Roll # 02

Monwar HussainMonwar Hussain Roll # 55Roll # 55

Ahmed Minhazul ArefinAhmed Minhazul Arefin Roll # 59Roll # 59

Md. Parvez HossainMd. Parvez Hossain Roll Roll # 64# 64

ContentsContents

• Current Financial Standings Current Financial Standings • Leverage RatiosLeverage Ratios• Liquidity RatiosLiquidity Ratios• Efficiency RatiosEfficiency Ratios• Profitability RatiosProfitability Ratios• Market-value RatiosMarket-value Ratios• Dupont AnalysisDupont Analysis• EFREFR• Take-AwaysTake-Aways

Current Financial StandingsCurrent Financial Standings

• Started production in Started production in 1960.1960.• Located in Located in Kalurghat Industrial Area, Kalurghat Industrial Area,

Chittagong.Chittagong.• 51%51% share is held by Government. share is held by Government.• Produces Produces Glass SheetGlass Sheet..• Financial statement prepared by Financial statement prepared by Hawlader Hawlader

Yunus & Co.Yunus & Co.• Estimated Net Worth: Around Estimated Net Worth: Around 665 million taka665 million taka

last financial year.last financial year.• Market price of stock Market price of stock 1622 taka.1622 taka.• Dividend paid last year Dividend paid last year 30,625,000 taka.30,625,000 taka.

Leverage RatiosLeverage Ratios

• Debt RatioDebt Ratio• Debt Ratio (Including Short Term)Debt Ratio (Including Short Term)• Debt-Equity RatioDebt-Equity Ratio• Times-Interest EarnedTimes-Interest Earned

Debt RatioDebt Ratio

Debt Ratio= (Long-term debt + value of leases) / (Long-term debt + value Debt Ratio= (Long-term debt + value of leases) / (Long-term debt + value of leases + equity)of leases + equity)

YearYear Long-term debt Long-term debt + value of + value of

leasesleases

Long-term debt Long-term debt + value of + value of

leases + equityleases + equity

Debt RatioDebt Ratio

2004-20052004-2005 306,242,353.0306,242,353.000

665,536,580.0665,536,580.000 0.460.46

2003-20042003-2004 300,773,240.0300,773,240.000

638,807,487.0638,807,487.000 0.470.47

2002-20032002-2003 298,913,820.0298,913,820.000

619,330,695.0619,330,695.000 0.480.48

Debt Ratio (including short term)Debt Ratio (including short term)

Debt ratio (including short term debt) = (Long-term debt + value of leases Debt ratio (including short term debt) = (Long-term debt + value of leases + short-term debt) / (Long-term debt + value of leases + short-term debt + short-term debt) / (Long-term debt + value of leases + short-term debt

+ equity)+ equity)

YearYear Long-term debt Long-term debt + value of + value of

leases + short-leases + short-term debtterm debt

Long-term debt Long-term debt + value of + value of

leases + short-leases + short-term debt + term debt +

equityequity

RatioRatio

2004-20052004-2005 358,553,034.0358,553,034.000

717,847,261.0717,847,261.00 0 0.500.50

2003-20042003-2004 369,234,326.0369,234,326.000

707,268,573.0707,268,573.00 0 0.520.52

2002-20032002-2003 350,054,654.0350,054,654.000

670,471,529.0670,471,529.000 0.520.52

Debt-Equity RatioDebt-Equity Ratio

Debt-equity ratio = (Long-term debt + value of leases) / EquityDebt-equity ratio = (Long-term debt + value of leases) / Equity

YearYear Long-term Long-term debt + value debt + value

of leasesof leases

EquityEquity Debt-equityDebt-equityratioratio

2004-20052004-2005 306,242,353.0306,242,353.000

359,294,227.0359,294,227.000 0.850.85

2003-20042003-2004 300,773,240.0300,773,240.000

338,034,247.0338,034,247.000 0.890.89

2002-20032002-2003 298,913,820.0298,913,820.000

320,416,875.0320,416,875.000 0.930.93

Times-Interest Earned RatioTimes-Interest Earned Ratio

Times-interest earned = (EBIT + depreciation) / InterestTimes-interest earned = (EBIT + depreciation) / Interest

YearYear EBIT + EBIT + depreciation depreciation

Interest Interest Times-Times-interest-interest-

earned Ratioearned Ratio

2004-20052004-2005 79,183,823.0079,183,823.00 4,926,120.004,926,120.00 16.0716.07

2003-20042003-2004 92,931,328.0092,931,328.00 6,944,370.006,944,370.00 13.3813.38

2002-20032002-2003 83,544,366.0083,544,366.00 7,811,369.007,811,369.00 10.7010.70

Liquidity RatiosLiquidity Ratios

• Net Working Capital to Total AssetsNet Working Capital to Total Assets• Current RatioCurrent Ratio• Quick RatioQuick Ratio• Cash RatioCash Ratio• Interval MeasureInterval Measure

Net Working Capital to Total Net Working Capital to Total Assets Assets

Net working capital to total assets = Current assets-current liabilities / Net working capital to total assets = Current assets-current liabilities / Total assetsTotal assets

YearYear Current assets-Current assets-current current

liabilitiesliabilities

Total assetsTotal assets Net working Net working capital to total capital to total

assetsassets

2004-20052004-2005293,628,650.00293,628,650.00

717,847,261.0717,847,261.000 0.410.41

2003-20042003-2004279,377,556.00279,377,556.00

707,268,573.0707,268,573.000 0.400.40

2002-20032002-2003241,590,241.00241,590,241.00

670,471,529.0670,471,529.000 0.360.36

Current Ratio Current Ratio

Current ratio = Current assets / Current liabilitiesCurrent ratio = Current assets / Current liabilities

YearYear Current assetsCurrent assets Current Current liabilitiesliabilities

Current ratioCurrent ratio

2004-20052004-2005 345,939,331.00345,939,331.00 52,310,681.0052,310,681.00 6.616.61

2003-20042003-2004 347,838,642.00347,838,642.00 68,461,086.0068,461,086.00 5.085.08

2002-20032002-2003 292,731,075.00292,731,075.00 51,140,834.0051,140,834.00 5.725.72

Quick RatioQuick Ratio

Quick ratio = (Cash + short-term securities + receivables) / Current Quick ratio = (Cash + short-term securities + receivables) / Current liabilitiesliabilities

YearYear Cash + short-Cash + short-term securities term securities + receivables+ receivables

Current Current liabilitiesliabilities

Quick ratioQuick ratio

2004-20052004-2005 287,020,270.00287,020,270.00 52,310,681.0052,310,681.00 5.495.49

2003-20042003-2004 258,768,940.00258,768,940.00 68,461,086.0068,461,086.00 3.783.78

2002-20032002-2003 204,038,390.00204,038,390.00 51,140,834.0051,140,834.00 3.993.99

Cash Ratio Cash Ratio

Cash ratio = (Cash + short-term securities) / Current liabilitiesCash ratio = (Cash + short-term securities) / Current liabilities

YearYear Cash + short-Cash + short-term term

securitiessecuritiesCurrent Current

liabilitiesliabilities

Cash ratioCash ratio

2004-20052004-2005 281,526,783.0281,526,783.000 52,310,681.0052,310,681.00 5.385.38

2003-20042003-2004 241,139,594.0241,139,594.000 68,461,086.0068,461,086.00 3.523.52

2002-20032002-2003 203,715,708.0203,715,708.000 51,140,834.0051,140,834.00 3.983.98

Interval Measure RatioInterval Measure Ratio

Interval measure = (Cash + short-term securities + receivables) / (Costs Interval measure = (Cash + short-term securities + receivables) / (Costs from operations/365)from operations/365)

YearYear Cash + short-Cash + short-term term

securities + securities + receivablesreceivables

Costs from Costs from operations/36operations/36

55

Interval Interval measuremeasure

2004-20052004-2005 287,020,270.0287,020,270.000 425,842.20425,842.20 674.01674.01

2003-20042003-2004 258,768,940.0258,768,940.000 440,605.38440,605.38 587.30587.30

2002-20032002-2003 204,038,390.0204,038,390.000 433,066.99433,066.99 471.15471.15

Efficiency RatiosEfficiency Ratios

• Sales to Asset RatioSales to Asset Ratio• Sales to Net Working CapitalSales to Net Working Capital• Days in InventoryDays in Inventory• Inventory TurnoverInventory Turnover• Average Collection PeriodAverage Collection Period• Receivables TurnoverReceivables Turnover

Sales to Assets Ratio Sales to Assets Ratio

Sales to assets ratio = Sales / Average total assetsSales to assets ratio = Sales / Average total assets

YearYear SalesSales Avg. total Avg. total assetsassets

Sales to Sales to assets ratioassets ratio

2004-20052004-2005 196,572,581.0196,572,581.000

712,557,917.0712,557,917.000 0.280.28

2003-20042003-2004 223,725,790.0223,725,790.000

688,870,051.0688,870,051.000 0.320.32

2002-20032002-2003 217,077,653.0217,077,653.000

670,471,529.0670,471,529.000 0.320.32

Sales to Net Working Capital Sales to Net Working Capital

Sales to net working capital = Sales / Average net working capitalSales to net working capital = Sales / Average net working capital

YearYear SalesSales Avg. net Avg. net working working capitalcapital

Sales to net Sales to net working working

capitalcapital

2004-20052004-2005 196,572,581.0196,572,581.000

286,503,103.0286,503,103.000 0.690.69

2003-20042003-2004 223,725,790.0223,725,790.000

260,483,898.5260,483,898.500 0.860.86

2002-20032002-2003 217,077,653.0217,077,653.000

241,590,241.0241,590,241.000 0.900.90

Days in Inventory Days in Inventory

Days in inventory = Average inventory / (Cost of goods sold/365)Days in inventory = Average inventory / (Cost of goods sold/365)

YearYear Avg. Avg. inventoryinventory

COGS/365COGS/365 Days in Days in inventoryinventory

2004-20052004-2005 62,367,381.5062,367,381.50 393,211.05393,211.05 158.61158.61

2003-20042003-2004 74,457,702.0074,457,702.00 406,337.04406,337.04 183.24183.24

2002-20032002-2003 73,378,900.0073,378,900.00 425,728.38425,728.38 172.36172.36

Inventory Turnover Inventory Turnover

Inventory turnover = Cost of goods sold / Average inventory Inventory turnover = Cost of goods sold / Average inventory

YearYear COGSCOGS Avg. Avg. inventoryinventory

Inventory Inventory turnoverturnover

2004-20052004-2005 143,522,035.0143,522,035.000 62,367,381.5062,367,381.50 2.302.30

2003-20042003-2004 148,313,019.0148,313,019.000 74,457,702.0074,457,702.00 1.991.99

2002-20032002-2003 155,390,860.0155,390,860.000 73,378,900.0073,378,900.00 2.122.12

Average Collection PeriodAverage Collection Period

Average collection period (days)= Average receivables / (Sales/365)Average collection period (days)= Average receivables / (Sales/365)

YearYear Avg. Avg. receivablesreceivables

Sales/365Sales/365 Average Average collection collection

period period

2004-20052004-2005 95,029.5095,029.50 538,555.02538,555.02 0.180.18

2003-20042003-2004 101,239.00101,239.00 612,947.37612,947.37 0.170.17

2002-20032002-2003 107,205.00107,205.00 594,733.30594,733.30 0.180.18

Receivables Turnover Receivables Turnover

Receivables turnover = Sales / Average receivablesReceivables turnover = Sales / Average receivables

YearYear SalesSales Avg. Avg. receivablesreceivables

Receivables Receivables turnoverturnover

2004-20052004-2005 196,572,581.0196,572,581.000 95,029.5095,029.50 2,068.542,068.54

2003-20042003-2004 223,725,790.0223,725,790.000 101,239.00101,239.00 2,209.882,209.88

2002-20032002-2003 217,077,653.0217,077,653.000 107,205.00107,205.00 2,024.882,024.88

Profitability RatiosProfitability Ratios

• Net Profit Margin Ratio Net Profit Margin Ratio • Return on Assets Ratio Return on Assets Ratio • Return on Equity RatioReturn on Equity Ratio• Payout Ratio Payout Ratio

Net Profit Margin RatioNet Profit Margin Ratio

Net profit margin ratio = Net Profit Before Tax / Net SalesNet profit margin ratio = Net Profit Before Tax / Net Sales

YearYear EBIT-taxEBIT-tax SalesSales Net profit Net profit marginmargin

2004-20052004-2005 50,800,230.0050,800,230.00 196,572,581.0196,572,581.000

0.260.26

2003-20042003-2004 71,051,000.0071,051,000.00 223,725,790.0223,725,790.000

0.320.32

2002-20032002-2003 64,174,738.0064,174,738.00 217,077,653.0217,077,653.000

0.300.30

Return on Assets RatioReturn on Assets Ratio

Return on Assets = Net Profit Before Tax / Total Assets Return on Assets = Net Profit Before Tax / Total Assets

YearYear EBIT-taxEBIT-tax Average total Average total assetsassets

Return on Return on assetasset(ROA)(ROA)

2004-20052004-2005 50,800,230.0050,800,230.00 712,557,917.0712,557,917.000

0.070.07

2003-20042003-2004 71,051,000.0071,051,000.00 688,870,051.0688,870,051.000

0.100.10

2002-20032002-2003 64,174,738.0064,174,738.00 670,471,529.0670,471,529.000

0.100.10

Return on Equity RatioReturn on Equity Ratio

Return on equity = Net Income / Shareholders’ equityReturn on equity = Net Income / Shareholders’ equity

YearYear Earnings Earnings available foravailable for

common common stockholdersstockholders

Average Average equityequity

Return onReturn onequity (ROE)equity (ROE)

2004-20052004-2005 45,368,043.0045,368,043.00 348,664,237.0348,664,237.000 0.130.13

2003-20042003-2004 64,086,333.0064,086,333.00 329,225,561.0329,225,561.000 0.190.19

2002-20032002-2003 56,363,369.0056,363,369.00 320,416,875.0320,416,875.000 0.180.18

Payout Ratio Payout Ratio

Payout ratio = Dividends Per Share / EPSPayout ratio = Dividends Per Share / EPS

YearYear Dividend per Dividend per shareshare

Earnings per Earnings per shareshare

Payout ratioPayout ratio

2004-20052004-2005 70.0070.00 104.82104.82 0.670.67

2003-20042003-2004 50.0050.00 183.10183.10 0.270.27

2002-20032002-2003 60.0060.00 161.04161.04 0.370.37

Market-value RatioMarket-value Ratio

• Price-earnings RatioPrice-earnings Ratio• Dividend YieldDividend Yield• Market to Book RatioMarket to Book Ratio

Price-earnings Ratio Price-earnings Ratio

Price-earnings ratio = Stock price / Earnings per sharePrice-earnings ratio = Stock price / Earnings per share

YearYear Stock priceStock price Earnings per Earnings per shareshare

Price-Price-earnings earnings

ratioratio

2004-20052004-2005 1,622.001,622.00 104.82104.82 15.4715.47

2003-20042003-2004 1,355.001,355.00 183.10183.10 7.407.40

2002-20032002-2003 782.00782.00 161.04161.04 4.864.86

Dividend YieldDividend Yield

Dividend yield = Dividend per share / Stock priceDividend yield = Dividend per share / Stock price

YearYear Dividend per Dividend per shareshare

Stock priceStock price Dividend Dividend yieldyield

2004-20052004-2005 70.0070.00 1,622.001,622.00 0.040.04

2003-20042003-2004 50.0050.00 1,355.001,355.00 0.040.04

2002-20032002-2003 60.0060.00 782.00782.00 0.080.08

Market to Book Ratio Market to Book Ratio

Market to book ratio = Stock price / Book value per shareMarket to book ratio = Stock price / Book value per share

YearYear Stock priceStock price Book value Book value per shareper share

Market to Market to book ratiobook ratio

2004-20052004-2005 1,622.001,622.00 633.17633.17 2.562.56

2003-20042003-2004 1,355.001,355.00 536.98536.98 2.522.52

2002-20032002-2003 782.00782.00 543.52543.52 1.441.44

Dupont SystemDupont System

ROA = (EBIT – tax) / assets = sales/assets * (EBIT-tax)/salesROA = (EBIT – tax) / assets = sales/assets * (EBIT-tax)/sales

YearYear Sales/assetsSales/assets (EBIT-tax)/sales(EBIT-tax)/sales ROAROA

2004-2004-20052005

0.27 0.27 0.260.26 0.070.07

2003-2003-20042004

0.320.32 0.320.32 0.100.10

2002-2002-20032003

0.320.32 0.300.30 0.100.10


ROA

0.1

0.07

0.1

0

0.02

0.04

0.06

0.08

0.1

0.12

2002-2003 2003-2004 2004-2005


ROE = (EBIT – tax – interest) / equity = assets/equity * sales/assets * (EBIT-ROE = (EBIT – tax – interest) / equity = assets/equity * sales/assets * (EBIT-tax)/sales * (EBIT-tax-interest)/(EBIT-tax)tax)/sales * (EBIT-tax-interest)/(EBIT-tax)

YearYear assetsassets//

equityequity

salessales//

assetassetss

(EBIT-tax) (EBIT-tax) /sales/sales

(EBIT-tax-(EBIT-tax-interest)/interest)/(EBIT-tax)(EBIT-tax)

ROEROE

2004-2004-20052005

2.002.00 0.270.27 0.260.26 0.900.90 0.130.13

2003-2003-20042004

2.092.09 0.320.32 0.320.32 0.900.90 0.190.19

2002-2002-20032003

2.092.09 0.320.32 0.300.30 0.880.88 0.180.18


ROE

0.18

0.13

0.19

0

0.05

0.1

0.15

0.2

2002-2003 2003-2004 2004-2005

External fund requirementExternal fund requirement

EFR = [(A / S) * Δ Sales] - [(L / S) * Δ Sales] - (Forecasted Sales * Net profit EFR = [(A / S) * Δ Sales] - [(L / S) * Δ Sales] - (Forecasted Sales * Net profit margin * Retention Rate)margin * Retention Rate)

External External fund fund requirment requirment

A/SA/S change in change in salessales

L/SL/S Forecasted Forecasted sales (3 yrs sales (3 yrs

avg.)avg.)

Net Net profit profit

marginmargin

RetentionRetentionRateRate

--41,299,422.341,299,422.3

33

0.320.32 15,886,093.15,886,093.6767

0.100.10 215,275,453.5215,275,453.500

0.230.23 0.890.89

Take-AwaysTake-Aways

• Usmania Glass Factory is the only Usmania Glass Factory is the only public public enlisted glass sheet companyenlisted glass sheet company, 51% share , 51% share of which is held by government.of which is held by government.

• Leverage RatiosLeverage Ratios: debt is still more than : debt is still more than 50%50% of the total capital Employed, but it is of the total capital Employed, but it is decliningdeclining every year. every year.

• Last year it has earned Last year it has earned 16 times more16 times more than than interest paid.interest paid.

• Liquidity Ratios:Liquidity Ratios: the company has the company has high high liquidityliquidity, e.g. 6 to 1 current ratio and almost , e.g. 6 to 1 current ratio and almost 6 to 1 quick ratio.6 to 1 quick ratio.

Take-Aways (continued)Take-Aways (continued)

• They hold They hold enough liquid assetsenough liquid assets to meet the to meet the expenses for almost expenses for almost two yearstwo years. .

• Efficiency Ratios:Efficiency Ratios: Increasing investment in Increasing investment in assets but lesser cash generated by it due to assets but lesser cash generated by it due to decreasing sales.decreasing sales.

• Inventory management is good.Inventory management is good.• Profitability has Profitability has fluctuatedfluctuated a bit in last three a bit in last three

years.years.• The dividend payout ratio is on The dividend payout ratio is on increaseincrease. . • Market Value Ratios:Market Value Ratios: High investors’ High investors’

confidence of the growth prospect reflected in confidence of the growth prospect reflected in the high share price despite not so high dividend.the high share price despite not so high dividend.

Thank YouThank You

ContentsContents

• Current Financial Standings Current Financial Standings • Leverage RatiosLeverage Ratios• Liquidity RatiosLiquidity Ratios• Efficiency RatiosEfficiency Ratios• Profitability RatiosProfitability Ratios• Market-value RatiosMarket-value Ratios• Dupont AnalysisDupont Analysis• EFREFR• Take-Take-AwaysAways

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Usmania Glass Final