Description of the company:

Kohinoor chemical company (Bangladesh)Limited (KCCL)established in 1956. Most of the

products of KCCL are known by the legendary brand name Tibet. They are the pioneer amongst
the soap cosmetics and toiletries manufacturing industries of Bangladesh. The management of
KCCL subsequently completed an arduous BMRE program with the technical collaboration of a
reputed industrial conglomerate of Europe. This enabled the enterprise to become a repositioned
cosmetics and toiletries manufacturing company with the most advanced technology. It is a
Public Limited company listed with both bourses of Bangladesh the Dhaka stock Exchange and
the Chittagong stock Exchange. kohinoor chemicals is under Pharmaceuticals & Chemical
industry. Their authorized capital is 500000000 and paid up capital 50000000, first quarter
ended on September 30, 2013 earnings per share is 3.06 which is better than previous quarter. As
for the financial ratio analysis investors can be attracted by the outcome.

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Ratio analysis of Kohinoor chemical:

Liquidity ratio:
Name of the ratio

Year 2013

Year 2012

Current ratio

1.157

1.07

Acid test/ Quick ratio

0.36

0.36

Current ratio
1.2
1.15

Current ratio

1.1
1.05
1
2012

2013

Comments: To meet current debts with current assets in 2013 is better

Quick ratio
0.4
0.3

Quick ratio

0.2
0.1
0
2012

2013

Comments: To meet current debts with most liquid current assets both are same.

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Activity ratio:
Activity ratio

Year 2013

Year 2012

Total asset turnover

1.63

1.60

Inventory turnover

2.45

2.53

Average collection period

35

39

Total asset turnover

1.64
Total asset turnover

1.62
1.6
1.58
2012

2013

Comments: In 2013 assets is more utilize to gernerate sales.

Inventory turnover
2.55
Inventory turnover

2.5
2.45
2.4
2012

2013

Comments: In 2012 inventory management is more effective than 2013.

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Average collection period

40
38

Average collection period

36
34
32
2012

2013

Comments: In 2013 average number of days that receivables are outstanding.

Debt ratio:
Debt ratio

Year 2013

Year 2012

Debt to equity ratio

11.83

36.48

Times interest earned

3.39

2.69

Debt to equity ratio

40
30

Debt to equity ratio

20
10
0
2012

2013

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Comments: In 2013 lower debt financing is used relative to equity financing.

Times interest earned

4
3

Times interest earned

2
1
0
2012

2013

Comments: Ability to cover interest charges in 2013 is more than 2012.

Profitability ratio:
Profitability ratio

Year 2013

Year 2012

Gross profit margin

0.173

0.171

Net profit margin

0.03

0.02

Return on assets

0.06

0.04

Return on equity

0.72

1.61

Gross profit margin

0.17
0.17
0.17
0.17
0.17
2012

Gross profit margin

2013

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Comments: In 2012 to 2013 efficiency of operation and their pricing policies is slightly
improved.

Net profit margin

0.04
0.03
0.02
0.01
0
2012

Net profit margin

2013

Comments: Net income per taka sales is improving in 2013.

Return on assets
0.08
0.06
0.04
0.02
0
2012

Return on assets

2013

Comments: Overall effectiveness in generating profits with available assets in 2013 is better
than 2012.

Return on equity
2
1.5

Return on equity

1
0.5
0
2012

2013

Comments: In 2013 shareholders earning power in investment is poor to compare 2012.

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Price /Earnings Ratio:

The P/E ratio is defined as:
Market price per share
P/E ratio =
Annual earnings per share
Here Kohinoor chemicals company EPS is 14.33 and trading per share is 240.027 so P/E ratio of
Kohinoor chemical is
240.027
P/E ratio =
14.33
= 16.749
As kohinoor chemicals is under Pharmaceuticals & Chemical industry so total industry average
is 22.94
Comments: P/E ratio is lower than the industry average.

Capital Asset Pricing Model:

CAPM = .11+. 0.347427252809(.084)
=0.13918
Required rate of return = 13.91%
Here, the risk free return is 11%.The market risk premium has averaged 8.4% historically .The
beta for Khoninoor chemical is 0. 347427252809
So the required rate of return for Khoninoor chemical is 13.91% by using the Capital Asset
Pricing Model.

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Recommendation:
To buy a share from the stock market general investor considering so many things such as
company EPS, market price per share, dividend policy, their management policy, market leader
e.t.c. From our perspective view a investor should buy the stock of kohinoor chemicals because
of their quarterly EPS is showing better, improve excellent technical innovation, dividend policy
is quite good and their financial ratio shows improving from their previous year.

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Common size Analysis and Index Analysis for Kohinoor Chemicals co. for three
years:

Kohinoor chemicals common size balance sheet:

Regular (taka)
Assets

2011

2012

Common-size%
2013

2011

2012

3.89

2.95

4.06

17.03

17.46

15.67

50.59

52.49

54.95

4.52

6.05

5.87

79.80

78.94

80.56

23.15

20.29

18.73

0.8

0.7

0.7

100.00

100.00

100.00

Cash & cash

equivalent

5,52,94,206

46278712

67803136

A/c Receivable

242159733

273612941

261429525

Inventories

719482437

Other current
assets

64242630

Total current
assets

1135002006

Net fixed assets 329222419

Other long term 11907332
assets

822577553
94768269
1237237475
318027242
11907332

1422308757 1567172049

2013

916667980
97949859
1343850500
312419606
11907332
1668177438

Total assets

Regular (taka)
Liability +
Equity

2011

2012

Common-size%
2013

2011

2012

2013

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Short term loan 289402996

264702374

454594521

A/c payable

856226463

696243817

Dividend
Payable
Total current
liabilities

746415110
15598681

10101461

1051416787 1133430298
378284588

378348503

20.35

16.90

27.25

52.48

54.64

41.74

1.09

0.6

0.6

73.92

72.32

69.60

26.60

24.14

22.61

4.02

3.65

4.32

100

100

100

10229602
1161067940
377178925

Long term debt

57143605

57143605

72143605

Equity
Total liability+
Equity

1422308757 1567172049

1668177438

Kohinoor chemicals common size income statement:

Regular (taka)
2011
Net sales

1850615117

2012

Common-size%
2013

2507492148

2718967831

1534341235 2077908804

2248343275

COGS
Gross profit

316273882

429583308

470624556

Operating
Expense

221573165

292425973

290921012

94700717

137157335

36606505
55415369

EBT

51030878
83598462

2012

2013

100

100

100

82.91

82.87

82.69

17.09

17.13

17.31

11.97

11.66

10.69

11.38

10.98

10.30

1.98

2.04

1.95

9.40

8.94

8.35

179703545

EBIT
Interest
Expense

2011

52947364
125457775

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53670799

67380095

93127750

9.39

8.93

7.15

EAT

Kohinoor chemicals indexed balance sheet:

Regular (taka)
Assets

2011

2012

Indexed %
2013

2011

2012

2013

100

83.70

122.62

100

112.99

107.96

100

114.33

127.41

100

147.52

152.47

100

109.01

118.40

100

96.60

94.90

100

100

100

100.00

110.19

117.29

Cash & cash

equivalent

5,52,94,206

46278712

67803136

A/c Receivable

242159733

273612941

261429525

Inventories

719482437

Other current
assets

64242630

Total current
assets

1135002006

Net fixed assets 329222419

Other long term 11907332
assets

822577553
94768269
1237237475
318027242
11907332

1422308757 1567172049

916667980
97949859
1343850500
312419606
11907332
1668177438

Total assets

Regular (taka)
Liability +
Equity

2011

2012

Indexed %
2013

2011

2012

100

91.46

157

100

114.71

93.28

64.76

65.57

Short term loan 289402996

264702374

454594521

A/c payable

856226463

696243817

Dividend
Payable

746415110
15598681

10101461

2013

10229602
100

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Total current
liabilities

1051416787 1133430298
378284588

378348503

1161067940

57143605

1422308757 1567172049

110.43

100

100.02

99.71

100

100

126.25

100

110.19

117.29

72143605

Equity
Total liability+
Equity

107.80

377178925

Long term debt

57143605

100

1668177438

Kohinoor chemicals indexed income statements:

Regular (taka)
2011
Net sales

1850615117

2012

Indexed %
2013

2507492148

2718967831

1534341235 2077908804

2248343275

COGS
Gross profit

316273882

429583308

470624556

Operating
Expense

221573165

292425973

290921012

94700717

137157335

36606505
55415369

51030878
83598462
67380095

2013

100

135.50

146.92

100

135.43

146.53

100

135.83

148.80

100

131.98

100

144.83

189.76

100

139.40

144.64

100

150.86

131.30

52947364
125457775

EBT
53670799

2012

179703545

EBIT
Interest
Expense

2011

93127750

100

125.54

226.40
173.51

EAT

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Sources of information:
1. www.dse .org
2. www.kohinoor chemicals.com
3. Text book
4. Slide
5. Class lecture

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