Bata Shoe Company

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Ratio Analysis On Bata & Apex

Submitted by funwithsabbir on July 1, 2011

* Category: Business and Economics
* Words: 5922 | Pages: 24
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1. Introduction

2. Financial Analysis

3. DuPont Calculation

4. Conclusion

5. Appendix

6. Notes on Analysis


Purpose- The purpose of this project is to fully analysis the financial data of the companies. In addition, to compare their Liquidity, Asset management, Debt, profitability, and market value ratio. This would enable us to conclude upon whom is in a better position. In addition, in this project we will look at the DuPont value, which will help us to see weather the company is fully utilizing its Total asset turnover, Equity multiplier, and profit margin all together.

Target Company- A leading manufacturer and exporter of leather footwear from Bangladesh to major shoe retailers in Western Europe, North America and Japan. The company has revenues of USD 42 million in 2006. AAFL pioneered the export of value added finished products export in the leather sector of Bangladesh and is also involved in the local footwear retail business with the second largest shoe retail network in the country. AAFL has equity, technical and marketing participation from La Nuova Adelchi one of the largest footwear manufacturers of Italy. Apex-Adelchi Footwear Limited, the leading footwear manufacturer of Bangladesh. It was enlisted in Bangladesh share market in 1993, and it has a Market category of A.

Competing company- Bata Bangladesh is affiliated to the Bata Shoe Organization, the world's largest footwear manufacturing and marketing organization. Started operation in Bangladesh in 1962, Incorporation in Bangladesh in 1972. Currently, Bata Bangladesh operates two manufacturing plant Tongi and Dhamrai, Bata Bangladesh is producing around 110,000 pairs of shoes daily. It has a modern tannery with the latest technological facilities torocess 5 million square feet of leather yearly. It was enlisted in Bangladesh share market in 1985, and it has a Market category of A.

Financial ANALYSIS

Financial ratios are useful indicators of a firm's performance and financial situation. Financial ratios can be used to analyze trends and to compare the firm's financials to those of other firms. Financial ratios can be classified according to the information they provide. The following types of ratios frequently are used: 1. Liquidity ratios

2. Asset management ratios
3. Debt management ratios
4. Profitability ratios
5. Market value ratios

Liquidity ratios are the first ones to come in the picture. These ratios actually show the relationship of a firm’s cash and other current assets to its current liabilities. Two ratios are discussed under Liquidity ratios. They are: 1. Current ratio

2. Quick/ Acid Test ratio.
3. Working capital Ratio

1. Current ratio- This ratio indicates the extent to which current liability are covered by those asset expected to be converted to cash in the near future. This ratio is calculated by dividing current asset by current liability.

Current ratio= Current Asset Current liability

The table below shows the Current ratio of both BATA Shoe and APEX Adelchi form year 2006-08.

Current ratio

|Year |2006 |2007 |2008 | |Company name | | | | |Apex...
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