FINANCIAL ANALYSIS PROJECT
Financial statement analysis: Marico Bangladesh Limited and ACI Formulation Limited
The objective of this project is to link theory with applications in the real world by requiring students to analyze financial statements of actual companies listed in either the DSE or CSE.
This project provides the opportunity to use corporate financial statements of actual companies for the purpose of analyzing the financial condition and trend indicators from the viewpoints of a potential investor, lending institution (bank), and the company’s top management.
Developed by Sadek Jake Alam
Marico Bangladesh limited (MBL:Dhaka) and ACI Formulation Ltd (ACIF:Dhaka) are both listed under the category “Pharmaceuticals and Chemicals” in the Dhaka Stock Exchange. Marico Bangladesh Limited (MBL) holds a leadership position in the FMCG space. MBL recorded a turnover of Tk. 5,358 Million ( USD 73.4 Million) in 12 months ended on 30th September, 2010 and Tk. 2,846 Million ( USD 39 Million) in 6 months ended on 31st March, 2011. MBL is the subsidiary of the Indian multinational company, Marico Limited, India.
ACI Formulation Limited (ACIF: Dhaka) is a subsidiary of the Bangladeshi conglomerate ACI limited. ACI FL manufactures majority of the products of ACI Strategic Business Limited except for the pharmaceutical Division. The factory is equipped with the state of the art facilities for product formulations and process innovation. The product range manufactured at ACI FL include Crop Protection Chemicals like Insecticides, herbicides and fungicides in granular, powder and liquid, mosquito pesticides in the forms of aerosols, vaporizers and coils house hold chemicals like toilet cleaners and hand wash.
3. Write a report that comments on the 3 -year trend for each of the relevant ratios and compare the two companies on the following (Please refer to Exhibit 1.0) for the ratios to be included in your three year computations (please use the most current years: 2008, 2009 and 2010): a) Investment opportunity from the viewpoint of a potential investor (emphasize profitability and financial leverage measures) b) Credit worthiness, from the viewpoint of a major bank to which the company has applied for a large loan (emphasize debt equity ratio, liquidity ratios, and refer to the company’s ability to generate cash flows from operations). c) Asset management, from the viewpoint of a critical board of directors (refer to activity measures).
4. Within each section of the report, incorporate a table that shows the relevant computational data and ratios for each of the three years in three adjacent columns, and shows the two companies in two successive rows. e.g. Current ratio: What is this ratio about, provide the formula, tabulate relevant financial data to compute the ratio, interpret the results: For example: Current ratio = Total Current Assets/ Total Current Liabilities
This computation must be followed by appropriate graphs and interpretations.
5. You are encouraged to use additional ratios that you find in the text or the web sites. Include graphs for trends as appropriate. Industry average information is not required but is desirable to be included if available to strengthen your analysis and interpretation of the companies. Be sure to include your interpretation for each financial ratio(s) computed. Please remember: Computations are not enough. You need to interpret the meaning of the ratios and other analyses. 6. Supplement your own financial analysis with relevant comments, graphs, and other data obtained from internet sources, such as www.investing.businessweek.com, www.dse.com.bd, etc. However, do not use information published by the companies themselves, since that information is likely to be biased and is not objective. 7. There is no requirement as to the number of pages; however, the project is expected to include company profiles, computations, analysis,...
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