Ratio Analysis of Power Grid Bd

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Ratio Analysis:
Liquidity(Times):
| 2008| 2007| 2006|
Current Ratio| 4.11| 3.65| 2.95|
Quick Ratio| 3.92| 3.44| 2.73|
NWC to Asset Ratio| 0.17| 0.15| 0.13|
Cash Ratio| 3.23| 2.70| 2.03|
NWC to Sales Ratio| 1.71| 1.43| 1.04|
NWC($)| 9215702577.00| 7220848206.00| 5205523576.00|
Average Daily Cash Expenses| 7537175.82| 7160555.21| 6768509.99| Interval Measure(in days)| 1270.94| 1029.86| 798.11|

Interpretation:
* According to current ratio from year 2006 to 2008, the current asset of the company has been increasing over current liability. * Quick ratio is increasing which indicates the monetary current asset or cash is increasing than current liabilities and this may indicate the good performance of the company. * NWC to Asset ratio is increasing which shows that NWC also increasing. * Cash ratio is increasing which specify that available of cash in company also increasing. By analyzing above Liquidity ratios, we can easily assume that the company is performing well, however the company launched in 2006 at the stock market in Bangladesh and we can understand that this company is situating in growth stage. Debt Management Ratios(Times)

| 2008| 2007| 2006|
Debt ratio | 0.77| 0.77| 0.80|
Long term debt ratio | 0.71| 0.72| 0.73|
Long term debt to debt ratio | 0.93| 0.93| 0.92|
Debt equity ratio | 3.27| 3.42| 3.97|
LT Debt-Equity Ratio| 3.04| 3.16| 3.64|
TIE Ratio| 2.58| 2.09| 1.47|
Basic Earning Power(BEP)| 0.05| 0.05| 0.06|
Cash Coverage Ratio| 2.58| 2.09| 1.47|
Equity Multiplier| 4.27| 4.42| 4.97|

Interpretation:
* Debt ratio of the company is decreasing which indicate that the debt of the company is decreasing means Company is paying off the debt on time or regularly or company did not take more debt. * Long-term debt ratio is decreasing very slowly, because the maturity of long-term debt is very high. * Cash coverage ratio is increasing which specify that company has enough to pay off the debt in those respective years. According to above analysis, the Debt Management Ratios show that company is managing the debt very well and it indicates company is performing well in their growth stage.

Asset-Management Ratios(Times/Year)
| 2008| 2007| 2006|
Total Asset Turnover Ratio| 0.11| 0.11| 0.13|
Total asset turnover period | 3404.06| 3137.76| 2739.71| Inventory Turnover Ratio | 9.49| 8.82| 8.61|
Daily sales (Days)| 15004565.13| 14021163.03| 13949042.06| Receivable turnover ratio | 5.16| 4.31| 3.56|
Capital intensity ratio | 0.40| 0.49| 0.62|

Interpretation:
* In the Asset Management Ratios, Total Asset Turnover Ratio is decreasing very gradually but Total Asset Turnover Period is increasing, and it indicates good performance. * Inventory Turnover Ratio is increasing; due to the company is not tangible good manufacturing company, so this ratio may not indicate anything significant performance. * Daily sales increasing means good performance in sales. * Receivable turnover ratio is increasing which indicates that company turnover their receivables at a good rate. From above data and analysis, we can understand that this company is performing well in Asset Management also in the respective years.

Profitability / Efficiency Ratio(%)
| 2008| 2007| 2006|
Profit margin | 31.34| 24.84| 12.35|
ROA| 3.10| 2.64| 1.53|
ROE | 13.21| 11.66| 7.61|
Payout Ratio| 58.12| 72.66| 0.00|
Plow Back Ratio| 57.12| 71.66| 1.00|
Sustainable rate of growth (g*)| 754.81| 835.21| 7.61|

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Interpretation:
* ROA is increasing, but two things can be happened, one is net income is increasing and another one is Asset is decreasing. However, from above ratios we can understand neither asset is decreasing nor Net Income is increasing only, but the both are changing. * ROE is increasing and shows that Net...
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