SINGER BANGLADESH LIMITED (SBL)

Introduction
SBL, a multi product financial Institution, We have analyzed on ratio of SBL, on the basis of
that, on the common size analysis, we have compared the companys 4 years performance (200407), and that is not so very good position. Though the earning per show and dividend per shares
reset is good, but the debt ratio, total asset turnover ratio, fixed asset turnover ratio current ratio,
DSO, net profitability margin ratio, return on asset, return on common equity are not in good
position.
OBJECTIVE OF THE STUDY

To know about a companys past present and future position.

To understand and compare a companys internal position to make necessary aid.

Limitation of the Study

Analysis based on company (SBL) annual report (2004-07).

We cant get the current Annual Report of SBL (2008).

Sources

SBL Annual Report 2007,2006,2005,2004.

Dhaka Stock Exchange.

SBL Main Office.

Company Profile
Company Name:
SINGER BANGLADESH LIMITED (SBL)
Corporate History.
# Year of Establishment of/ Incorporation
# Commencement of Leasing Business

1979
1987

# Establishment of Branch in the main port city,

Chittagong
# Listed on the Dhaka Stock Exchange

1991
1993

# Licensed by Bangladesh Bank for deposit taking

1995

His vision
To be the most admired and respected family company in the country.
His mission
Our mission is to improve the quality of life of people by providing comforts and conveniences
at affordable prices.
Communize Analysis/ Time Series Analysis
This analysis we can evaluates performance of the internal progress year to year. Here we have
analyzed of the year 2007, 2006, 2005, and 2004.
SBL
TK-in million
SI
1
2
3
4
5
6
7
8
9
10
11
12

Name of the Ratio

Profit Margin- Profitability
Ratio
Return on Asset- Profitability
Ratio
Return on Equity- Profitability
Ratio
Receivable Turnover- Asset
Utilization
Average Collection PeriodAsset Utilization
Inventory Turnover- Asset
Utilization
Fixed Asset Turnover RatioAsset Utilization
Total Asset Turnover RatioAsset Utilization
Current Ratio- Liquidity Ratio
Quick Ratio- Liquidity Ratio
Debt. Ratio- Debt Utilization
ratio
Time Interest Earned- Debt
Utilization ratio.

2007
2.86%

2006
4.58%

2005
2.83%

2004
5.68%

4.44%

6.51%

3.10%

7.17%

27.29%

35.42%

22.76%

42.41%

6.76

6.68

7.80

8.16

53.28

53.86

46.17

44.15

2.54

2.53

2.73

2.54

10.87

8.36

10.23

10.675

1.55

1.42

1.094

1.353

1.21
0.51
83.74%

1.23
0.54
81.62%

1.41
0.82
86.38%

1.66
0.67
81.85%

1.79

2.08

4.17

13.457

13
14
15

Fixed Charge Coverage- Debt 1.79

Utilization ratio
Earnings Per Share(EPS)
61.26
Dividend Per Share(DPS)
35.00

2.08

4.16

13.46

70.18
35.00

29.13
30.00

47.75
80.0

Graphically we can see below scenario :

Profit Margin Ratio

Net profitability margin ratio measures the percentage of each sales money remaining after all
costs and expenses, including interest, taxes and preferred stock dividends, have been deducted.
The analyses of 5 years of SBL are, as follows:
Year
2007
2.86%

Year
2006
4.58%

Year
2005
2.83%

Year
2004
5.68%

Interpretation
In 2007 the net profit margin ratio was 2.86% which is lower then 2006 and 2004 where the
ratios were 4.58% and 5.68% and this as not better performance of the firm.
Recommendation
Company should increase their EBIT to keep increasing net profit.
Return on Asset
Return on asset, often called the return on investment. It measures the overall effectiveness of
management in generating profits with its available assets.
Higher rate of this ratio indicates the higher/ better position of a firm. Our analysis of the firm
SBL are:
Year
2007
4.44%

Year
2006
6.51%

Year
2005
3.10%

Year
2004
7.17%

Interpretation
In 2004 the ratio was 7.17% which was higher then 2005, 2006 and 2007 where the ratios were
3.10%,6.51% and 4.44% and these indicates the poor position then 2004.
Recommendation
The position of the firm is very bad according to this ratio so it should need to increase its Net
income as soon as possible to improve or increase the company situation.
Return on Stockholders Equity
The ratio of net income to common equity measures the return on common equity or the rate of
return on stockholders investment,
If the present return on equity is more then past ratios that indicates the better position to the
present then past. Our analysis of ROE of SBL are given below
Year

Year

Year

Year

2007
2006
2005
2004
27.29% 35.42% 22.76% 42.41%

Interpretation
In 2004 the return on common equity of SBL was 42.41% which is higher then 2005 where the
ratio was 22.76%. The best position of the ratio was in 2004 where the ratio was 42.41% and in
2006 and 2007 ratio were 35.42% and 27.29%.
Recommendation
Company should increase its Net Income against of Stockholders equity to improve the situation
of this company.

Receivables turnover
The receivables turnover indicates the number of times on the average that receivables turnover
each year.
The ratio of receivables turnover of this firm is given below:
2007
6.76

2006
6.68

2005
7.80

2004
8.16

Interpretation:
In 2004 the debt ratio of the SBL was 8.16 which is higher then 2005, where the ratio was7.80.
But this is higher then 2006, 2007 where the ratios were 6.68& 6.76.
Recommendation
Company must increase the ratio by decreasing total liabilities or increasing total asset for
achieving better position.
Average collection period (DSO)
Average collection period also called Days sales outstanding (DSO), is used evaluate the firms
ability to collect its credit sales in a timely manner.
The ratio of Average collection period of this firm is given below:
2007
53.28

2006
53.86

2005
46.17

2004
44.15

Recommendation:

In 2004 the DSO of SBL was 44.15 days

which was increased. But this also too much time to collect A/R. In 2005, 2006, 2007 the time
was 46.17, 53.86 and 53.28.
Interpretation:
Much should aware about this fact that they should try to decrease the time period to collect
money from A/R to get a good position.
Inventory turnover:
This ratio indicates the efficiency of the firms in selling product.
The ratio of inventory turnover of this firm is given below:

2007

2006

2005

2004

2.54

2.53

2.73

2.54

Interpretation:
In 2004 the inventory turnover ratio of the SBL was 2.54 which is very close to one another. And
here in 2005, 2006, 2007 the ratio was 2.73, 2.53 and 2.54.
Recommendation
Company must increase the ratio by decreasing total liabilities or increasing total asset in better
position.
Fixed Asset Turnover
The fixed asset turnover ration measures how effectively the firm uses its plant and equipment to
help generate sales. It is the ration of sales to fixed assts.
If the present fixed asset turnover ratio is greater than past ratio that would be better for a
company. Our analyses of SBL for fixed asset turnover ratio of 4ears are
2007
10.87

2006
8.36

2005
10.23

2004
10.675

Interpretation
In 2004, fixed asset turnover ratio was 10.675which was less then 2007, where the ratio
was10.87. We can also see in 2005 & 2006s ratio were 10.23 &8.36.
Recommendation
By this analysis we can understand that sales position is good according to its fixed asset which
indicates that companys effective uses the fixed assets. So to improve this salutation company
should increase it sales by using its fixed assets most effectively.
Total Asset Turnover
The total Asset turnover ratio measures how effectively the firm uses its total assets to help
generate sales. It is the ratio of sales to total assets.
If the present total assets turnover ratio is higher then previous it would be better for the
companys present performance. Our analysis of this ratio of SBL of 4 ears is,
2007
1.55

2006
1.42

2005
1.094

2004
1.353

Interpretation
In 2004 the total asset turnover was 1.353which is lower then 2007 where the ratio was 1.55
But there are lower performance in2005, 2006 where the ratio were 1.094, 1.42.
Recommendation
By the analysis we can say that, company must increase their sales.
Current Ratio
The Current ration measures then ability firms to meet its short-tern obligations.
Current Asset includes cash, account receivable and inventories. And current liabilities consist of
all payables, current maturities of long tern debt, accrued expenses. It the current liabilities are
rising fast than current Assets, the CR will fall and when CR is increased this post year, the
present performance of the company will be better then post performance. Here is the 4years CR
of SBL:
2007
1.21

2006
1.23

2005
1.41

2004
1.66

Interpretation:
In 2007 the CR of SBL was tell which was lower than 2004 when the ratio 1.21which is worst
position during 4 years. 2004 are the sure which was considered as good performance.
Recommendation:
By the analysis of 4 years CR of SBL. We can find that the company hasnt done well over the
year and to improve the situation it should graphically enlarge CR by increasing CA or
decreasing CL.
Quick ratio:
The quick ratio or acid test ratio is calculated by deducting inventories from current assets and
dividing the result by current liabilities. The quick ratio is a variation of the current ratio.
The ratio of Quick ratio f this firm is given below:
2007
0.51

2006
0.54

2005
0.82

2004
0.67

Interpretation:

In 2004 the debt ratio of the SBL was

0.67which is higher then 2007, where the ratio was0.51. But this is lower then 2005, 2006, where
the ratios were 0.82, 0.54.

Recommendation
Company must decrease the ratio by decreasing total liabilities or increasing total asset in better
position.
Debt Ratio
The debt ratio measures the proportion of total assets financed by the firms creditors.
Total debt includes both CL and LLB tern debt, creditors prefer low debt ratios because the lower
the ratio the greater the cushion against creditors losses in the event of liquidation. Our analysis
of this ratio of SBL for 4 years is given below:
2007
83.74%

2006
81.62%

2005
86.38%

2004
81.85%

Interpretation:
In 2004 the debt ratio of the SBL was 81.86 which is lower then 2007, where the ratio was 83.74.
But this is lower then 2005 where the ratios 86.38%
Recommendation:
Company must decrease the ratio by decreasing total liabilities or increasing total asset in better
position.
Time Interest Earned Ratio
The time interest earned ratio, measures the firms ability to make contractual interest payment,
Sometimes it also called as interest coverage ratio.
This ratio measures the extent to which operating income can decline before the form is unable
to meet its annual interest costs. If the present ratio is higher then post then it would better for the
firm. But the company has to pay tax fewer for lower time interest earned. Our analyses of this
SBL are,
2007
1.79

2006
2.08

2005
4.17

2004
13.46

Interpretation
In 2004 the time interest earned ratio was 13.46 which were higher then 2007, where the ratio
was 1.79. In 2006 though ratio was 2.08 which was lower than 2005.
Recommendation

By the analysis of 4 years ratio we can say that, if the company wishes to decrease its taxation,
the company should increase their EBIT.
Fixed charge coverage
Fixed charge coverage measures the firms ability to meet all fixed obligations rather then
interest payment alone, on the assumption that failure to meet any financial obligation will
endanger the position of the firm.
The ratio of fixed charge coverage of this firm is given below:
2007
1.79

2006
2.08

2005
4.16

2004
13.46

Interpretation:

In 2004 the time interest earned ratio

was 13.46 which were higher then 2007, where the ratio was 1.79. In 2006 though ratio was 2.08
which was lower than 2005.
Recommendation:
By the analysis of 4 years ratio we can say that, if the company wishes to decrease its taxation,
the company should increase their EBIT.
Earning Per share (EPS)
EPS represents the amount canned on behalf of each outstanding share of common stock not the
amount of earnings actually distributed to share holders.
The ratio of EPS of this firm is given below:

2007
61.26

2006
70.18

2005
29.13

2004
47.75

Interpretation:
In 2007 the earning per share of SBL was 61.26% which is lower than 2006, where the ratio was
70.18%. But the ratio of 2005 was 29.1% which is lower than 2004 where the ratio was 47.75%.
Recommendation:
EPS is closely watched by then investing public and is considered an important indictor of
corporate EPS success and by the above analysis we can see the good position of the firm.
Dividend Per Share (DPS)
DPS represent the amount of cash actually distributed to each shareholder.

Here is the dividend per share of the SBL,

2007
35.00

2006
35.00

2005
30.00

2004
80.00

Interpretation:
The ratio of dividend per share of 2007, 2006, 2005 and 2004 are 35%, 35%, 30%and 80%.
Which are same over 2 years and it decreases 50% in 2005.It rises 5%in 2006.
Recommendation:
Ratio rate was by this analysis we can see the increasing and this should be encourage to be
attract the shareholder.
Final Recommendation
The EPS and DPS of the SBL were in good position but the firm must should be were of its
increasing liabilities. And it also try to utilize its assets by effective uses. In other hands the time
period of required account receivable collecting which should be decreased. And to increase the
total asset turnover the firm should increase its sales and to increase its net income, it should
increase its EBT company must should were of these fact to reach in the better position.