Prepare for

BUS 635.2
Summer 2017
Dr. Ali Ashraf
North South University

Prepared by
Nazmus Sakib- 1621734660
Md. Kamrul Hasan- 1621104660
Samin Yeaser Khan-1621315660
Anika Tabassum- 1621364660

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 Letter of Transmittal

August 2nd , 2017

Dr. Ali Ashraf
Course Instructor
North South University
Subject: Request to Accept the Report

Dearest Sir,
It is a great pleasure for us to submit our project on Analysing and Interpretation on
BDLAMPS company .We have prepared this paper as a project of Course titled as:
Managerial Finance, course code: BUS 635. We have learned a lot while gathering the
information to prepare this report.

In preparing this report, we have tried our level best and worked with most sincerity to
gather information and make it as well structured as possible. We will be obliged, if you
kindly accept this report. We are ready to make you clear regarding any confusion or further
clarification from this report.

Sincerely yours,
Nazmus Sakib- 1621734660
Md. Kamrul Hasan - 1621104660
Samin Yeaser Khan- 1621315660
Anika Tabassum- 1621364660

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 Acknowledgement

It’s difficult for me to thank all of those marvelous people who have contributed something
of them to this report. There are of course some very special people who cannot go without
mention.

At first, I express my gratitude and indebtedness to our respected faculty, Dr. Ali Ashraf for
his continuous guidance, important advice, encouragement and suggestion during the
preparation of the report. I thank him for sparing his valuable time to read the report.

Then, I express my sincere gratitude to A.K.M. Moinuddin chief financial officer in BD

Lamp Company for his guidance, constants supervision and constructive suggestions.
Without his help this report might not have been a comprehensive one. I also like to thank
Latifur Rahman chief executive officer. Without his help, we couldn’t have prepared this
report to be so informative. We have bothered him so many times in connection with my
works, both during and after normal working hours.

Finally I am grateful to all the cooperative staffs of BD Lamps.

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 Table of Contents

Topics Page
Numbers
Introduction- Company Background 5
Common Size Ratio Statements—Vertical and 6-12
Horizontal

Ratio Analysis & DUPONT 13-23

Findings & Suggestions 24

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Introduction:

Bangladesh Lamps Limited (BLL) was incorporated in 1960 as a subsidiary of

PHILIPS, Holland. In March 1993, PHILIPS sold its entire shares to
TRANSCOM. Presently, Bangladesh Lamps Limited manufactures Electric
Bulbs, CFL, Tube lights & other lighting products under Transtec Brand in its
ISO certified production facility located in Dhaka and markets them through its
countrywide distribution network.

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Balance Sheet
Assets 2011 20 12 2013 2014 2015
Property, Plant and Equipment 172,652,507.00 178,226,377.00 163,421,982.00 133,788,230.00 126,333,274.00
Fixed Asset Under
Construction 21,772,610.00 14,910,305.00 630,000.00 487,920.00
Intangible Assets 1,931,170.00 1,476,946.00 1,025,222.00 600,998.00 176,774.00
Investments:
At Cost 38,819,973.00 38,819,973.00 55,346,673.00 55,346,673.00 55,346,673.00
Fair Value adjustment 459,581,557.00 300,111,790.00 305,912,432.00 330,756,187.00 364,774,914.00
498,401,530.00 338,931,763.00 361,259,105.00 386,102,860.00 420,121,587.00
Loans and deposits 2,988,119.00 3,524,603.00 3,340,953.00 4,294,242.00 5,298,163.00
Total non- current assets 697,745,936.00 537,069,994.00 529,047,262.00 524,786,330.00 551,929,798.00
Inventory 196,460,713.00 331,047,582.00 248,351,772.00 288,302,789.00 345,043,563.00
Trade and other Debtors 290,908,139.00 239,346,818.00 248,436,940.00 218,557,686.00 179,600,980.00
Advances, Deposits and
prepayments 6,398,739.00 7,905,032.00 6,570,224.00 7,864,892.00 8,023,827.00
Advance income Tax 76,281,135.00 100,658,776.00 123,360,941.00 149,615,412.00 181,756,982.00
Cash and cash equivalents 109,402,003.00 128,578,755.00 2,715,841.00 59,806,653.00 114,702,132.00
Total Current assets 679,450,729.00 807,536,963.00 629,435,718.00 724,147,432.00 829,127,484.00
Total Assets 1,377,196,665.00 1,344,606,957.00 1,158,482,980.00 1,248,933,762.00 1,381,057,282.00
Equity
share Capital 72,081,600.00 93,706,080.00 93,706,080.00 93,706,080.00 93,706,080.00
Reserves and surplus 751,769,868.00 520,878,659.00 497,113,514.00 523,102,057.00 569,238,120.00
total Equity 823,851,468.00 614,584,739.00 590,819,594.00 616,808,137.00 662,944,200.00
Liabilities
Long Term Loan 76,526,791.00 50,063,367.00 28,441,377.00 7,783,803.00
Deferred Liability- Gratuity
payable 27,778,985.00 30,883,202.00 44,898,845.00 45,217,818.00 47,756,030.00
Deferred tax liability 20,183,484.00 18,181,680.00 10,247,909.00 5,129,676.00 3,468,341.00
Total non-current Liabilities 124,489,260.00 99,128,249.00 83,588,131.00 58,131,297.00 51,224,371.00
Current portion of long term
loan 33,401,187.00 32,109,911.00 20,651,574.00 20,651,574.00 7,789,803.00
short term finance 192,372,774.00 353,936,022.00 250,421,311.00 253,589,940.00 318,913,518.00
trade and other creditors 71,380,260.00 98,251,774.00 75,002,648.00 148,827,606.00 162,302,919.00
Accrued Liabilities 8,062,457.00 7,436,463.00 12,486,967.00 10,709,918.00
other liabilities 19,113,727.00 19,793,016.00 9,576,627.00 9,678,311.00 54,196,494.00
Provision OF royalty 18,886,000.00 28,962,617.00 19,924,830.00 19,967,136.00
Provision for tax 85,636,532.00 90,404,166.00 96,641,298.00 111,051,763.00 123,685,977.00
Total current Liabilities and
provisions 428,852,937.00 630,893,969.00 484,705,255.00 574,476,248.00 666,888,711.00
Total Liabilities 553,342,197.00 730,022,218.00 568,293,386.00 632,607,545.00 718,113,082.00
Total Equity and Liabilities 1,377,193,665.00 1,344,606,957.00 1,159,112,980.00 1,249,415,682.00 1,381,057,282.00

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Income Statement
2011 2012 2013 2014 2015
Revenue 681,573793 953,526,835 103,612462 1,175149437 1,262861174
Cost of Goods Sold 511,624381 744,635,527 787,521,310 896,905,876 963,562,735
Gross Profit 169,949412 208,891,308 244,091,152 278,243,561 299,298,439
Other income 1,133,276 14,340,139 14,874,206 19,896,587 23,078,772
Operating expenses 106,987449 239,580,703 250,792,246 257,930,877 271,992,389
Profit from operation 64,095,239 16,349,256 8,173,112 40,209,271 50,384,822
Finance Expense 40,039,712 62,432,153 38,357,215 21,764,997 16,563,253
Finance Income 33,977,308 31,744,277 17,662,993 12,192,874 10,101,434
Net finance expense 6,062,404 30,687,876 20,694,222 9,572,123.00 6,461,819.00
Profit before Contribution to WPPF 58,032,835 47,037,132 12,521,110 30,637,148 43,923,003
Contribution to WPPF 3,249,183 ------ ------ 1,458,912.00 2,091,572.00
Profit before income tax 54,783,652 47,037,132 12,521,110 29,178,236 41,831,431
income tax expenses 17,838,919 2,759,830 1,696,639 9,292,232.00 10,972,879
Net profit for the year 36,944,733 49,796,962 10,824,471 19,886,004 30,858,552
other comprehensive income/ LOSS
changes in fair value of available for sale
financial assets 318,803549 159,469767 5,800,642 24,843,755 34,018,727

Total Comprehensive income 281858816 209266,729 5,023,829 44,729,759 64,877,279.00

earnings Per Share ( per value tk 10 each) 5.03 5.31 1.16 2.12 3.29

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Cash Flow
2011 2012 2013 2014 2015
CASH FLOW OPERATAION
EXPENSES
Collection from Customers 793,538,337.00 1,175,124,067.00 1,214,762,478.00 1,276,582,065.00 1,387,675,459.00
Payment to suppliers 421,957,718.00 725,440,140.00 572,217,347.00 746,738,019.00 877,090,257.00
Payment to employees 72,636,633.00 97,084,774.00 104,061,955.00 125,123,761.00 143,087,480.00
payment for services received 138,897,941.00 232,919,024.00 270,313,910.00 150,719,946.00 203,683,557.00
VA and SD paid 164,208,448.00 161,505,055.00 155,595,088.00 127,981,911.00 101,233,306.00
Contribution to WPPF 4,082,161.00 3,249,183.00 ------------------ ------------------- 1,458,912.00
Contribution to provident fund 1,360,890.00 1,633,456.00 2,252,646.00 2,344,313.00 2,729,331.00
payment of royalty 9,202,510.00 --------------- 18,885,999.00 10,076,618.00 -----------------

Cash Generated from operation 18,807,964.00 46,707,565.00 91,435,533.00 113,597,497.00 58,392,616.00

Rent Received 10,653,000.00 13,090,000.00 ------------- ------------ ------------
Cost Recovery ------------- --------------- 6,548,667.00 5,148,662.00 4,186,998.00
Collection from sale of scrap and others 1,162,266.00 3,037,006.00 3,005,263.00 4,273,083.00 4,660,657.00
Interest Paid 11,947,918.00 32,401,002.00 20,694,222.00 9,572,122.00 6,461,820.00
Income tax paid 27,836,524.00 24,377,641.00 22,702,165.00 26,254,471.00 32,141,570.00
Net cash generated from/ (used to)
operating activities 46,777,140.00 87,359,202.00 57,593,076.00 87,192,649.00 28,636,881.00
CASH Flows from investing
activities
Payment for investment in Shares -------------- --------------- 16,526,700.00 ------------ --------------
Proceeds from premium Receipt back of
Investment 2,847,250.00 ----------- -------------- ------------ --------------
Dividend Received 5,879,514.00 1,713,183.00 5,320,276.00 10,474,842.00 14,231,117.00
Proceeds from sale of property plant and
equipment 26,740.00 708,400.00 -------------- 253,641.00 -------------
Payment for acquisition of property plant
and equipment 94,133,935.00 29,552,351.00 6,768,569.00 5,702,519.00 14,889,237.00
Payment for acquisition of intangible
assets 2,121,134.00 ------------- ------------- --------------- --------------
Net cash inflows/outflows from
investing activities 87,501,565.00 27,130,768.00 17,974,993.00 5,025,964.00 658,120.00
Cash flows from financing activities
Receipt of Long term Loan 71,888,082.00 --------- ------------ ----------- -----------
Dividend Paid 13,591,615.00 144,826.00 28,885,959.00 17,644,856.00 17,755,286.00
Repayment of long term loan 16,506,442.00 27,751,700.00 33,080,327.00 20,651,574.00 20,651,574.00
Net cash inflows/outflows from
Financing activities 41,790,025.00 27,896,526.00 61,966,286.00 38,296,430.00 38,406,860.00
Net Cash inflows/outflows for the year
a+b+c 92,488,680.00 142,386,496.00 22,348,203.00 53,922,183.00 10,428,099.00
Opening cash and cash equivalents 9,511,909.00 82,970,771.00 225,357,267.00 247,705,470.00 193,783,287.00
Closing cash and cash equivalents 82,976,771.00 225,357,267.00 247,705,470.00 193,783,287.00 204,211,386.00

Closing Cash and Cash equivalents

Cash and Cash equivalents 109,402,003.00 128,578,755.00 2,715,841.00 59,806,653.00 114,702,132.00
Short term finance used for cash
management purpose 192,372,774.00 353,936,002.00 250,421,311.00 253,589,940.00 318,913,518.00
82,970,771.00 225,357,267.00 247,705,470.00 193,783,287.00 204,211,386.00

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Horizontal analysis on Balance Sheet
Assets 2012 2013 2014 2015
Property, Plant and Equipment -3.23% 8.31% 18.13% 5.57%
Fixed Asset Under Construction 31.52% 95.77% 22.55% 100.00%
Intangible Assets 23.52% 30.59% 41.38% 70.59%
Investments
At Cost 0.00% -42.57% 0.00% 0.00%
Fair Value adjustment 34.70% -1.93% -8.12% -10.29%
32.00% -6.59% -6.88% -8.81%
Loans and deposits -17.95% 5.21% -28.53% -23.38%
Total non- current assets 23.03% 1.49% 0.81% -5.17%

Inventory -68.51% 24.98% -16.09% -19.68%

Trade and other debtors 17.72% -3.80% 12.03% 17.82%
Advances, Deposits and
prepayments -23.54% 16.89% -19.71% -2.02%
Advance income Tax -31.96% -22.55% -21.28% -21.48%
Cash and cash equivalents -17.53% 97.89% -2102.14% -91.79%
Total Current assets -18.85% 22.05% -15.05% -14.50%
Total Assets 2.37% 13.84% -7.81% -10.58%
Equity
Share Capital -30.00% 0.00% 0.00% 0.00%
Reserves and surplus 30.71% 4.56% -5.23% -8.82%
Total Equity 25.40% 3.87% -4.40% -7.48%
Liabilities
Long Term Loan 34.58% 43.19% 72.63%
Deferred Liability-Gratuity
payable -11.17% -45.38% -0.71% -5.61%
differed tax liability 9.92% 43.64% 49.94% 32.39%
total non-current Liabilities 20.37% 15.68% 30.46% 11.88%
Current portion of long term loan 3.87% 35.68% 0.00% 62.28%
short term finance -83.98% 29.25% -1.27% -25.76%
trade and other creditors -37.65% 23.66% -98.43% -9.05%
Accrued Liabilities 7.76% -67.92% 14.23%
other liabilities -3.55% 51.62% -1.06% -459.98%
Provision OF royalty -53.35% 31.21% -0.21%
Provision for tax -5.57% -6.90% -14.91% -11.38%
Total current Liabilities and
provisions -47.11% 23.17% -18.52% -16.09%
Total Liabilities -31.93% 22.15% -11.32% -13.52%
Total Equity and Liabilities 2.37% 13.80% -7.79% -10.54%

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Horizontal analysis on Income Statement
2012 2013 2014 2015
Revenue -39.90% -8.19% -13.91% -7.46%
Cost of Goods Sold -45.54% -5.76% -13.89% -7.43%
GROSS Profit -22.91% -16.85% -13.99% -7.57%
Other income -1165.37% -3.72% -33.77% -15.99%
operating expenses -123.93% -4.68% -2.85% -5.45%
Profit from operation 125.51% 149.99% -391.97% -25.31%
Finance Expense -55.93% 38.56% 43.26% 23.90%
Finance Income 6.57% 44.36% 30.97% 17.15%
Net finance expense -406.20% 32.57% 53.74% 32.49%
Profit before Contribution to WPPF 181.05% 73.38% 344.68% -43.37%
Contribution to WPPF 100.00% -43.37%
Profit before income tax 185.86% 73.38% 333.03% -43.37%
income tax expenses 84.53% 161.48% 647.68% -18.09%
Net profit for the year 234.79% 78.26% 283.71% -55.18%
Other comprehensive income
changes in fair value of available for
sale financial assets 49.98% 103.64% -328.29% -36.93%
Total Comprehensive income 25.75% 97.60% 990.35% -45.04%
earnings Per Share ( per value tk 10
each) 205.57% 78.15% 282.76% -55.19%

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Vertical analysis Balance Sheet
Assets 2012 2013 2014 2015
Property, Plant and Equipment 100.00% 100.00% 100.00% 100.00%
Fixed Asset Under Construction 8.37% 0.00%
Capital Works in Progress 0.00% 0.39% 0.36%
Intangible Assets 0.83% 0.63% 0.45% 0.14%
Investments:
At Cost 21.78% 33.87% 41.37% 43.81%
Fair Value adjustment 168.39% 187.19% 247.22% 288.74%
190.17% 221.06% 288.59% 332.55%
Loans and deposits 1.98% 2.04% 3.21% 4.19%
Total non- current assets 301.34% 324.12% 392.62% 436.88%
Inventory 185.75% 151.97% 215.49% 273.12%
Trade and other debtors 134.29% 152.02% 163.36% 142.16%
Advances, Deposits and prepayments 4.44% 4.02% 5.88% 6.35%
Advance income Tax 56.48% 75.49% 111.83% 143.87%
Cash and cash equivalents 72.14% 1.66% 44.70% 90.79%
Total Current assets 453.10% 385.16% 541.26% 656.30%
Total Assets 754.44% 709.28% 933.88% 1093.19%
Equity
share Capital 52.58% 57.34% 70.04% 74.17%
Reserves and surplus 292.26% 304.19% 390.99% 450.58%
total Equity 344.83% 361.53% 461.03% 524.76%

Long Term Loan 28.09% 17.40% 5.82%

Deferred Liability- Gratuity payable 17.33% 27.47% 33.80% 37.80%
deferred tax liability 10.20% 6.27% 3.83% 2.75%
Total Non-current Liabilities 55.62% 51.15% 43.45% 40.55%
Current portion of long term loan 18.02% 12.64% 15.44% 6.17%
short term finance 198.59% 153.24% 189.55% 252.44%
trade and other creditors 55.13% 45.90% 111.24% 128.47%
Accrued Liabilities 4.17% 7.64% 8.01%
other liabilities 11.11% 5.86% 7.23% 42.90%
Provision OF royalty 16.25% 12.19% 14.92%
Provision for tax 50.72% 59.14% 83.01% 97.90%
Total current Liabilities and
provisions 353.98% 296.60% 429.39% 527.88%
Total Liabilities 409.60% 347.75% 472.84% 568.43%
Total Equity and Liabilities 754.44% 709.28% 933.88% 1093.19%

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Vertical analysis on Income statement
2012 2013 2014 2015
Revenue 100.00% 100.00% 100.00% 100.00%
Cost of Goods Sold 78.09% 76.34% 76.32% 76.30%
Gross Profit 21.91% 23.66% 23.68% 23.70%
Other income 1.50% 1.44% 1.69% 1.83%
operating expenses 25.13% 24.31% 21.95% 21.54%
Profit from operation -1.71% 0.79% 3.42% 3.99%
Finance Expense 6.55% 3.72% 1.85% 1.31%
Finance Income 3.33% 1.71% 1.04% 0.80%
Net finance expense 3.22% 2.01% 0.81% 0.51%
Profit before Contribution to WPPF 4.93% 1.21% -2.61% -3.48%
Contribution to WPPF 0.00% 0.00% -0.12% -0.17%
Profit before income tax 4.93% 1.21% -2.48% -3.31%
income tax expenses -0.29% 0.16% -0.79% -0.87%
Net profit for the year 5.22% 1.05% -1.69% -2.44%
Other comprehensive income
changes in fair value of available for sale financial
assets -16.72% 0.56% 2.11% 2.69%
Total Comprehensive income 21.95% 0.49% -3.81% -5.14%
earnings Per Share ( per value tk 10 each) 0.00% 0.00% 0.00% 0.00%

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RATIOS
2012 2013 2014 2015
Solvency Ratios:
Current ratio: 1.28 1.30 1.26 1.24
Quick Ratio: 0.76 0.79 0.76 0.73
cash ratio 2.42 3.02 2.66 2.56
Turnover ratio
receivable ratio 4.45 6.61 13.26
inventory turnover 2.25 3.17 3.11 2.79
payable turnover 0.12 0.12 0.31
average receivable collection period 449.83 429.80 396.50 401.07
average inventory processing period 162.27 115.11 117.33 130.70
average payment period 48.85 66.38 61.16 59.55
Cash conversion cycle 256.50 279.70 209.94 199.53
operating efficiency
Total Asset Turnover 0.71 0.89 0.94 0.91
Net Fixed Asset Turnover 1.78 1.95 2.24 2.29
Equity Turnover 0.46 0.51 0.49 0.48
Operating profitably
gross profit 21.91% 23.66% 23.68% 23.70%
operating margin 4.93% 1.21% -2.48% -3.31%
net profit margin 5.22% 1.05% -1.69% -2.44%
return on total capital -0.45% 0.29% -1.51% -1.66%
return on total equity 7.65% 2.12% -4.73% -6.31%
ROE DuPont analysis
profit margin 5.22% 1.05% -1.69% -2.44%
Asset turnover 0.74 0.80 0.92 0.98
Financial Leverage 2.19 1.96 2.02 2.08
ROE 7.65% 2.12% -4.73% -6.31%
Financial risk ratios
Debt to equity ratio 0.16 0.14 0.09 0.08
debt ratio 0.54 0.49 0.51 0.52
interest coverage ratio 17.04 7.38 3.14 3.81

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 Analysis of Ratio
Liquidity ratios:

LIQUIDITY Ratios
3.5

3.02
3

2.66

2.56
2.42

2.5

2
1.28

1.26
1.5

1.24
1.3

0.79
0.76

0.76
1

0.73
0.5

0
2012 2013 2014 2015

Current Ratio Quick Ratio Cash Ratio

1. Current Ratio: According to the chart in 2013, we can see that the highest current ratio which is 1.3x and
2015 depicts the lowest current ratio which is 1.24x. But the year 2012 shows that the ratio is 1.28x. It is
slightly lower than average ratio. The trend of the last 4 years are looking marginal and it can be said that the
ratios have not improved well for the last few years.

2. Quick Ratio: From this perspective, the company should have the ability to pay its liabilities through its
most liquid assets. The table shows that in 2012 the quick ratio was 0.76x and 2015 it is 0.73x. If we see the
chart above we can identify that the quick ratio has fluctuated but it is more or less close to a range of 0.73
to 0.79 which is not very significant.

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3. Cash Ratio: In the chart, we may see that in 2013 the cash ratio was 3.02 then the next year it dropped to
2.66. At the end of the year 2015 it is 2.56. The trend shows it is gradually decreasing. So, we can say that
the company is facing some troubles to maintain their cash ratios which is not a good sign for the company.

Turnover ratios:

25 24.8

20

15 13.26

10
6.61
4.45
5 3.17 3.11 2.79
2.25
0.12 0.12 0.11 0.64

0
2012 2013 2014 2015

Receivable Turnover Payable Turnover Inventory Turnover

4. Receivable Turnover: It tells us how quickly a company collects cash. The highest receivable turnover
is 24.8 in 2015 and the lowest is in 2012, which is 4.45. It is gradually increasing from the beginning year to
the end year. As higher the receivable ratios, the efficiency is also high on collecting money but it can also
mean stringent cash collection policies may hurting sales.

5. Payable Turnover: Payable turnover ratio tell us about how quickly a company pays suppliers. A high
number means the company is paying suppliers quickly and is possibly not making use of credit facilities.
Low number may mean the company is facing trouble making payments on time and a sign of liquidity
issues. In 2012 the ratio was 0.12. On the other hand. In 2015 it has the highest ratio which is 0.64 and
lowest is 0.11 in 2014. As the ratios are low, it can be said that during first 3 years company was paying
early but in 2015 the payments are being delayed which is good.

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6. Inventory Turnover: It tells us how many times per period entire inventory was sold. Measures the
ability of a company to sell its inventory. According to this pyramid chart, company’s inventory turnover
ratio increased in 2013 than 2012. It slightly decreased in 2014 and also dropped in 2015 to 2.79. As the
trend is downward, we may say that the inventory selling is getting low which will affect the revenue.

7. Average Receivable Collection Period:

Average recievable Collection Period

460
449.83
450
440
429.8
430
420
410 401.07 Average recievable Collection
396.5 Period
400
390
380
370
360
2012 2013 2014 2015

In the beginning year 2012 it has the top receivable collection period which is bad for any company. Then
it’s dropped into 396.5 in 2014. Then its start rising again in 2015. Because of their higher ratio its shows
that this company’s collection period is not efficient.

8. Average inventory processing period:

Average Inventory Processing Period

180 162.27
160
130.7
140 117.33
115.11
120
100
80
60
40
20
0
2012 2013 2014 2015

Average Inventory Processing Period

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At the beginning the rate was high and that was 162.27. Generally the company started to improve this rate
and gradually the rate has fall down which means that the company begins to improve. Now the rate is
117.33 at 2014 and 103.7 is on 2015.

9. Average payment period:

70
AVERAGE PAYMENT PERIOD
66.38
59.55
60
48.85
50

40

30

20

10 61.16

0
2012 2013 2014 2015
Average Payment Period

Average payment period is 48.85 in 2012 and it’s dropped 1.16 in 2014. It reached highest in 69.55.
Company’s payment period ratio shows that this company may maintain their average standard cause it
fluctuating frequently from 2012 to 2015. As much as pay late it’s good for a company because they can
hold their liquidity.

10. Cash Conversion cycle:

Cash Conversion Cycle

256.5 279.5
300
209.9
200 199.5
100
Cash Conversion Cycle
0
2012
2013
2014
2015

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Cash conversion cycle measures the time between cash paid to suppliers and cash collected from customers.
In 2012, it has the highest cash conversion cycle which is 256.5 days and its gradually increasing into 279.5
days in 2013. But in 2014 it decreased to 209.9 days and 199.5 days in 2015. It means that company has
improved their cash conversion cycle efficiently.

Operating efficiency:

Operating Efficiency

0.48
2015 2.29
0.91

0.49
2014 2.24
0.94

0.51
2013 1.95
0.79

0.46
2012 1.78
0.71

0 0.5 1 1.5 2 2.5

Equity Turnover Fixed Asset Turnover Total Asset Turnover

11. Total asset Turnover: This ratio tell us how efficiently does a company generate revenue from total
assets. Here we can see that BD lamps Company’s total asset turnover ratio has a upward trend which is a
good sign. It was 0.71 in 2012 and then jumped each year slowly to 0.91 in 2015. This tells us that the
company is generating more revenues from assets and also tells us about the efficient use of assets.

12. Fixed asset turnover: This ratio tell us how efficiently does a company generate revenue from total
fixed assets A high ratio indicates better utilisation of fixed asset. A low ratio indicates underutilization of
fixed assets. We can see from the chart that each year it is growing which is a good sign for the company as
the fixed assets are getting more utilized each year.

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13. Equity turnover: Equity turnover ratio indicates the efficient shareholders equity use. It was 0.46 in
2012. Then it rises in 2013 to 0.51 which is the highest among the 4 years trend. During 2014 and 2015 we
see a decreasing trend and it is not a good sign as it means equities are not properly utilized.

Operating profitability ratios:

14. Gross profit margin:

Gross Profit Margin

10%

17% 2012
2013
52% 2014
2015
21%

The
Gross profit margin tells us about the sales and costs. The higher the ratios, the higher the sales and lower
costs. Gross Profit was higher in 2012 but then it’s decreasing from 2013 which is a bad sign as decreasing
gross profit means sales are low but costs are high.

15. Operating profit margin:

Operating Profit Margin

-3.31
4.93

-2.48
1.21

2012 2013 2014 2015

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Operating profit is gross profit minus operating cost. The higher the operating profit margin the better. From
this chart we can see that in 2012 the profit margin is good but in the coming 3 years it has fallen and it is a
warning sign as it shows that the costs are more than the profit.

16. Net profit margin:

Net Profit Margin

-22%

50%
-16%

10%

2012 2013 2014 2015

Net profit margin tells us that how much the firm’s ability to pay taxes. In the year 2012 the net profit
margin was 5% while the other 3 years the margin was negative which comes to the point that the company
is running in losses. It is an alarming sign for the company and they need to sort things out or they may face
bankruptcy.

17. Return on total capital: The table shows that in the year 2013 as compared to the other years is higher,
but in 2015 the ratio was slightly decrease than other years.

18. Return on total Equity: Return on equity measure how efficiently a firm can use the money from
shareholder to generate profits and grow the company. In 2012 the company has ratio 7.65, so this indicates
that the company is using its investor funds efficiently compared to the other years. On the other hand in
2015 the company has ratio -6.31, so this indicates that the company is using less investor funds than other
year.

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 -6.31
2015
-1.66

-4.73
2014
-1.51

2.12
2013
0.29

7.65
2012
-0.45

-8 -6 -4 -2 0 2 4 6 8 10
Return on Equity Return on Capital

ROE DuPont analysis:

19. Profit margin:

Profit Margin

2015
-22%
2012

2013
2012
50% 2014
2014 2015
-16%

2013
-10%

In 2012 the profit margin was 5 percent, but in 2013 it became negative and it continued to be negative in
2015 also. This shows that the company is not profitable.

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20. Asset turnover:

Asset Turnover
1.2

0.75
1 0.7

0.61
0.8 0.58

0.6

0.4

0.2

0
2012 2013 2014 2015

Here we can clearly see that the company is using its assets well and it is a good sign as the efficient use of
assets is increasing. So, it can be said that the sales are generating more from total assets.

21. Financial leverage:

FINANCIAL LEVERAGE

2.19 1.96 2.03 2.08

2012 2013 2014 2015

Financial leverage ratio is Average total asset against average total equity. It measures the amount of assets
per unit of equity. Here we can see the trend that the financial leverage ratio decreased in 2013 but again
gone up in 2014 and 2015 which is means the company is more leveraged.

22. ROE:
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 ROE

2015 2012
-30% 37% 2012 2013

2014 2015
2014 2013
-23% 10%

Return on equity measure how efficiently a firm can use the money from shareholder to generate profits and
grow the company. In 2012 the company has ratio 7.65, so this indicates that the company is using its
investor funds efficiently compared to the other years. On the other hand in 2015 the company has ratio -
6.31, so this indicates that the company is using less investor funds than other year.

Financial risk ratios:

Financial Risk Ratio

18 17.04
16

14

12

10

8 7.38

6
3.81
4 3.14
2
0.16 0.54 0.14 0.49 0.09 0.51 0.08 0.52
0
2012 2013 2014 2015

Debt. To Equity Ratio Debt. Ratio Interest Coverage Ratio

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23. Debt. To equity ratio: At the first of year the rate was pretty high but After going times the company
takes it under control and the ratio are generally 0.14 to 0.08.This indicates that the company is improving
by paying to its creditors and investors.

24. Debt. Ratio: The ratio shows the company’s ability to cover its debts through its total asstes.The ratio
was 0.54 at 2012 then 2013 it went down but the ratios were become high and it were 0.51 to0.54.This ratio
needs to be low.

25. Interest coverage ratio: The standard of this ratio is 1.5 but at the ratio of is company is 17.04 in 2012
but after then the rate is generally goes down. It means that the company is improving. In the last analysis
year 2015 the ratio is 3.81.it is quite slowing gown and the company become efficient to tackle debt.

Findings:

 Most of the ratios are declining

 Asset utilization is going down

 The operations are not well managed

 The cash collection period is very bad

 The profitability of the company is really worrying

Suggestions:

 One of the strategy will be cost cutting as the expenses are keep rising with each passing year.

 They have to utilize their resources well

 Operations need to be managed efficiently

 Proper measure should be taken to improve cash conversion cycle

Reference:

www.bll.com.bd/annual-reports/
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