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Welcome to our PresentationOn
Cross sectional analysis
Bextex Ltd and Prime Textile Ltd.
Company overview of Beximco Textile.
VisionUse “Innovation” & “Speed” as prime drivers, rather than cotton & cheap labor.
Mission
BEXTEX Ltd. is a full service vendor with strong vertically integrated
production facilities as well as creative & analytical capabilities which
clearly set us apart from most other South Asian vendors.
Cross sectional analysisBetween
Prime textile & Bextex Ltd.
Liquidity Ratio
Current Ratio
Current ratio for bextex in 2009
= Current assets/Current liabilities= 7230982538/7906937639= 0.91:1
Current ratio for prime in 2009 = Current assets/Current liabilities= 1044816449/982894151
= 1.063:1
0.8
0.85
0.9
0.95
1
1.05
1.1
Current ratio
Prime
Bextex
Quick Ratio
Quick ratio for bextex in 2009
= (Current asset-inv)/Current liability= (7230982538-2733063864)/7906937639
= 0.57:1
Quick ratio for prime in 2009
= (Current asset-inv)/Current liability= (1044816449-565487208)/982894151= 0.487:1
0.44
0.46
0.48
0.5
0.52
0.54
0.56
0.58
Quick Patio
Prime
Bextex
Activity Ratio
Inventory Turnover
Inventory turnover ratio for Bextex in 2009= cost of goods sold / inventory= 3090184887/2733063864= 1.13 times
Inventory turnover ratio for prime in 2009
= cost of goods sold / inventory= 1391832663/565487208= 2.46 times
0
0.5
1
1.5
2
2.5
3
Inventory turnover ratio
Prime
Bextex
Average collection period
Average collection period for bextex in 2009= AR /Average sales per day= 3765912622 / (4760237289/365 days)= 3765912622/13041746= 289 days
Average collection period for prime in 2009
= AR /Average sales per day= 337442913/ (1578386314/365 days)
= 79days
0
50
100
150
200
250
300
350
Average collection period
Prime
Bextex
Total Asset turnover
Total Asset turnover for bextex in 2009
= sales / total asset= 4760237189 / 19086298350= 0.25 times
Total Asset turnover for prime in 2009
= sales / total asset= 1578386314/2624139237= 0.601 times
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Total asset turnover
Prime
Bextex
Debt Ratio
The debt ratio for bextex in 2009
Debt ratio = total liabilities/ total assets= (1475056051/2624139237)*100= 56.2%
The debt ratio for prime in 2009
Debt ratio = total liabilities/ total assets= (15733786518 / 19086298354)*100= 82%
Debt ratio
Bextex
56%
44% Debt Capital
Equity Capital
Prime Textile
82%
18%
Debt Capital
Equity Capital
Debt to Equity Ratio
The capital structure of prime in 2009 D/E ratio = total liabilities/ total equity= (15733786518 / 1149083186)= 1.28:1
The capital structure of bextex in 2009 D/E ratio = total liabilities/ total equity= (15733786518 / 3352511840)= 4.69:1
Bextex
56%
44%debt capital
equity capital
Prime Textile
82%
18%
debt capital
equity capital
Time Interest Earned Ratio
Time Interest Earned Ratio of prime in 2009 = EBIT / Interest= 86918644 /37493611= 2.318 times
Time Interest Earned Ratio of bextex in 2009 = EBIT / Interest= 692000803/ 1300656669= 0.53
0
0.5
1
1.5
2
2.5
Time interest earn ratio
Prime
Bextex
Profitability Ratio
Gross profit marginGross profit margin
Gross profit margin of prime in 2009 = (sales – cogs) / sales= Gross profit/sales =186553651 /1578386314= 11.8%
Gross profit margin of bextex in 2009
= (sales – cogs) / sales= 1670052302 / 4760237189= 35%
0.00%5.00%
10.00%15.00%20.00%25.00%30.00%35.00%40.00%
Gross profit margin
Prime
Bextex
Operating profit marginOperating profit margin
Operating profits margin of prime in 2009 Operating profit margin= operating profit / sales= 86918644/1578386314= 5.51%
Operating profits margin of bextex in 2009 Operating profit margin= operating profit / sales= 692000803/ 4760237189= 14.54%
Net profit marginNet profit margin
The net profit margin of prime in 2009 Net profit margin = EACS / Sales= 71090507 / 1578386314= 4.5%
The net profit margin of bextex in 2009
Net profit margin = EACS / Sales= (608655866) / 4760237189= (0.13)
-1.00%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
Net profit margin
Prime
Bextex
Earnings Per ShareEarnings Per Share
EPS of Prime Textile in 2009 EPS = EACS/ no. of common stock= 21.89 taka
EPS of bextex in 2009 EPS = EACS/ no. of common stock= (3.23) taka
Prime
Bextex-5
0
5
10
15
20
25
EPS
Prime
Bextex
Return on EquityReturn on Equity
ROE of Prime Textile in 2009 ROE = EACS / Common stock equity= 71090507 / 1147201594= 6.19%
ROE of Bextex in 2009 ROE = EACS / Common stock equity= (608655866) / 3352511836= (19%)
ROE
6.19%
-19%
-25.00%
-20.00%
-15.00%
-10.00%
-5.00%
0.00%
5.00%
10.00%
1Prime tex
Bex tex
Return on Total Assets (ROA)
ROA of Prime Textile in 2009 ROA = EACS / Total asset= 71090507 / 2624139237= 2.71%
ROA of bextex in 2009 ROA = EACS / Total asset= (608655866) / 19086298354= (0.03)
-4.00%
-3.00%
-2.00%
-1.00%
0.00%
1.00%
2.00%
3.00%
Return on assetPrime
Bextex
Findings
The debt capital of Prime Textile possesses higher risk.
The higher interest payment also affects the return on total assets
of Bextex.
Earnings per share of Bextex (3.23) is less than the Prime Textile
21.89 because their net profit hugely decline from operating profit
because of higher interest payment.
Recommendations
The Prime Textile should increase their debt capital slightly more than
50% in order to reduce the chance of hostile takeover from another
company.
The debt capital of Bextex should be slightly declined to reduce the
financial distress cost.
The debt capital should be declined to reduce the interest payment
that adversely affect in profitability ratio of Bextex.
Thank You All