Trend Analysis

Ratio analysis indicates a companys current financial position; however, this analysis does not tell us whether the company is in a better or a worse financial position than it was in previous year. To determine the direction in which the firm is headed, we must analyze the trends in ratios. By examining the paths taken in the past, trend analysis provides information about whether the firms financial position is more likely to improve or deteriorate in the future. A simple approach to trend analysis is to construct graphs containing the companys past and present data.

Trend Analysis of Meghna Cement Mills Ltd. for the periods 2007-2011

Assets Part for Trend Analysis

ASSET Asset represents the firms investments. Assets are subdivided into current and longterm or fixed assets to reflect the ease of liquidating each asset. Non-Current Assets

Non-current (Also called Fixed assets) include land, buildings, equipment and technologies, and vehicles that are used in connection with the business.
Year 2007 Property, plant and 1,2 equipment 52,083,3 79 2008 1,1 71,823,4 23 2009 2010 2011 1,2 21,277,7 10 1,3 1,096,828,0 05,602,4 28 58

Here, we can see an irregular trend.

Year Total Non-Current Assets

2007 1,30 7,816,629

2008 1,22 2,856,544

2009

2010

2011 1,22 1,277,710

1 1,30 ,096,828,028 5,602,458

The trend analysis of total non-current asset shows an irregular trend.

Current Assets Current assets are items that can be liquidated and thus converted into cash within one year. As depicted by the bar graph below, we can observe that the current assets of HSBC has grown quite steadily and continuously over the years.

Year Inventories

2007 9 50,009,10 8

2008 6 07,442,16 3

2009 839,260,219

2010 7 56,944,18 8

2011 79 8,290,626

The trend analysis of inventories results an irregular trend.

Year Cash and bank balances

2007 83,467,22 4

2008 79,977,09 5

2009 153,252,252

2010 62,526,73 1

2011 93,382,75 8

Here, we can find an irregular trend.

Year Advance, deposits and prepayments

2007 2 90,731,53 7

2008 6 98,546,60 9

2009 893,689,327

2010 1,05 2,598,449

2011 1,20 0,376,960

The trend analysis of Advance, deposits and prepayments shows an upward trend.

Year Total Current Assets

2007 1,56 4,372,223

2008 1,69 3,743,225

2009

2010

2011 2,88 6,387,943

2 2,30 ,172,916,224 5,163,660

The trend analysis of Total Current Assets presents an upward trend.

Year Total Assets

2007 2,87 2,188,852

2008 2,91 6,599,769

2009 3,269,744, 252

2010 3,61 0,766,118

2011 4,10 7,665,653

We see an upward trend in the trend analysis of Total Assets.

Liabilities Part for Trend Analysis

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This includes all debts and obligations owed by the business to outside creditors or vendors that are payable within one year.
Non-Current Liabilities

Non-current or Long-term liabilities are liabilities with a future benefit over one year, such as notes payable that mature longer than one year. In accounting, the long-term liabilities are shown on the right wing of the balance-sheet representing the sources of funds, which are generally bounded in form of capital assets. Also long-term liabilities are a way to show that you have to pay something off in a time period longer than one year.

Year Long-term Debt

2007

2008

2009

2010

2011

61 9,319,928

936,655, 246

743,561,80 7

789,361, 205

7 79,338,1 88

Here, we can find an irregular trend.

Year Total Non-Current Liabilities

2007 833,152, 269

2008 1,15 7,073,249

2009 964,903,10 0

2010 1,02 3,934,047

2011 1,01 3,312,325

The trend analysis of Total Non-current Liabilities presents an irregular trend.

Current Liabilities

Current liabilities are a company's debts or obligations that are to be repaid or performed within one year. Often referred to as short-term debt, short-term liabilities or current debt, they appear on the right side of the company's balance sheet. A short-term liability makes it easier to manage the financial affairs of a company, as it is a great indicator of the overall financial stability of the organization.

Year Short-term Bank Loan

2007 1,10 7,116,886

2008 8 09,477,0 80

2009 1,271,266,2 96

2010 1,25 6,183,509

2011 1,82 7,443,072

In this analysis, we can identify an upward trend.

Year Advance Received Against Sales

2007

2008

2009

2010

2011

98,564,5 91

53,667,7 68

42,755,939

86,249,6 73

28,439,1 98

The ananlysis of Advance Received Against Sales presents us with an irregular trend.

Year Total Current Liabilities

2007 1,419 ,807,625

2008 1,184 ,666,380

2009 1, 678,078,121

2010 1,915 ,455,122

2011 2,418 ,739,807

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In this analysis, we can identify an upward trend.

Year Total Liabilities

2007 2,25 2,959,894

2008 2,341 ,739,629

2009 2,642,981,2 21

2010 2,93 9,389,169

2011 3,43 2,052,132

The trend analysis of Total Liabilities shows an upward trend.

Equities Part for Trend Analysis

Sometimes this is referred to as stockholders equity. Owners equity is made up of the initial investment in the business as well as any retained earnings that are reinvested in the business.

Year

2007

2008

2009

2010

2011 11

Retained Earnings 57,399,54 2 80,531,92 4 132,434,815

2 07,154,24 9

21 1,390,821

The trend analysis of Retained Earnings exhibits an upward trend.

Year Total Equities

2007 61 9,228,958

2008 57 4,860,140

2009 626,763,031

2010 67 1,376,949

2011 67 5,613,521

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The trend analysis of Total Equities exhibits an upward trend.

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Trend Percentage Analysis of Meghna Cement Mills Ltd. for the periods 2007-2011
Property, plant and equipment Year (%) 100 94 88 88 88 2007 2008 2009 2010 2011

Total Non-Current Assets Year (%) 100 94 84 99.83 93 2007 2008 2009 2010 2011

Inventories Year (%) 100 64 88 80 84 2007 2008 2009 2010 2011

Cash and bank balances Year (%) 100 96 184 75 112 2007 2008 2009 2010 2011

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Advance, deposits and prepayments Year (%) 100 240 307 362 413 2007 2008 2009 2010 2011

Total Current Assets Year (%) 100 108 139 147 185 2007 2008 2009 2010 2011

Total Assets Year (%) 100 102 114 126 143 2007 2008 2009 2010 2011

Long-term Debt Year (%) 100 151 120 127 126 2007 2008 2009 2010 2011

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Total Non-Current Liabilities Year (%) 100 139 116 123 122 2007 2008 2009 2010 2011

Short-term Bank Loan Year (%) 100 73 115 113 165 2007 2008 2009 2010 2011

Advance Received Against Sales Year (%) 100 54 43 88 29 2007 2008 2009 2010 2011

Total Current Liabilities Year (%) 100 83 118 135 170 2007 2008 2009 2010 2011

Total Liabilities Year 2007 2008 2009 2010 2011 16

(%) 100 104 117 130 152

Retained Earnings Year (%) 100 140 231 361 368 2007 2008 2009 2010 2011

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