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Presentation on
Performance Analysis of a DSE Listed Company: A Case
on SPL

PRESENTED BY:
Jyoti Ferdous
Roll No. : 1003006
Reg. No. : 02921

COMPANY OVERVIEW

Summit

power

limited

(SPL)

sponsored

by

summit group, is the first independent power

producer (IPP) in Bangladesh in private sector
providing power to national grid. SPL was
incorporated in Bangladesh on March 30, 1997
as a Private Limited Company. On the June, 2004
the company was converted to public limited
company under the companies Act 1994.

RATIO ANALYSIS
Financial ratio analysis is the calculation and comparison
of ratios which are derived from the information in a
company's financial statements. A financial ratio can
give a financial analyst an excellent picture of a
company's situation and the trends that are developing.

Leverage Ratios.
Liquidity Ratios .
Capital Structure Analysis Ratio.
Profitability Ratios.
Solvency Ratios.
Capital Market Analysis Ratios.

Liquidity ratio:

Current Ratio= (Current Asset/Current Liability)

The current ratio of SPL in 2010 is 9.70 times and in 2011 is 2.09
times.
Acid test ratio= cash+ short term invest+ receivable/current liabilities
The Acid-Test ratio of SPL in 2010 is 5.94 times and in 2011 is 0.91
times.
New working capital ratio=(current asset- current liabilities)
In 2010 the new working capital ratio is 2,125,726,981 and in 2011 is
978,125,414

Leverage Ratio:
Debt

to total asset ratio=(total asset-total equity)/total asset

Result:

Debt to total assets ratio of SPL in 2010 is 0.20 and in 2011 is 0.05 which is
greater than the previous year 2010.

Efficiency Ratios:
Receivables

Turnover=(Net credit sales/ Average net receivables)

Accounts receivables turnover ratio of SPL in 2010 is 0.98 times and in 2011 is 1.21
times, which is greater than the previous year 2010.
Average

collection period=(Average accounts Receivable/Average daily net credit

sales*)
Average collection period is 360 in 2010 and 2011.
Inventory
Inventory

Turnover=(Cost of goods sold/ inventory)

turnover ratio of SPL in 2010 is 4.02 times and in 2011 is 2.4 times, which is lower
than the previous year 2010

 Average

sales period=(360/ inventory turnover)

The average selling time of inventories in 2010 is 89.55/90 days
and in 2011 is 150 days.

Capital Market Analysis Ratios:

Price

earning = market price per share/ earning per share

The price earnings ratio of SPL is 15.03 in 2011 and 43.32 times in
2010. The ideal company average of price-earnings ratio is 13
times.

Dividend

yield ratio= dividend per share/market price per share

Dividend yield ratio of SPL in 2011 is 0.42 and in 2010 it was 0.34.

Dividend payout ratio=(cash dividend/ Net income)

Dividend payout ratio of SPL in 2011 is .04% and in 2010 it was 1%.

Capital Structure Analysis Ratios:

The debt to equity ratio=(Total long-term liabilities/ total stockholders equity)

Debt to total equity ratio of SPL in 2010 is 0.02 times and in 2011 is 0.15 times which
is greater than the previous year 2010.

The interest coverage ratio=(Earning before interest and tax/ interest expenses)

The interest coverage ratio of SPL is 31.52 times in 2011 and in 2010 it was
3.40 times.

Retention rate=net income-dividends/net income

Here the company has a retention rate in 2011 is 0.99 times and in 2010 it was 0.98
times.

Vertical analysis

A method of financial statement analysis in

which each entry for each of the three
major categories of accounts (assets,
liabilities and equities) in a balance sheet is
represented as a proportion of the total
account.

Income

statement.
Balance sheet.

Vertical analysis of balance

sheet

It is seen that property, plant and equipment has decreased

to 35% of total assets in 2011 from 49% in 2010. And
investments have also decreased to 15% in 2011 from 19%
in 2010.
Inventories are 4% of the total assets in 2011 which were
3% of the total assets in 2010. There is an increase in 2011.
Trade receivables are 2% of the total assets in 2011 and
2010. Its means that company made same cash transaction
in 2011.
Total current asset is 17% of total asset in 2011 and 31% in
2010. So the current asset is decreased by 14%.

Vertical analysis of income

statement

In 2011 cost of revenue is 50% of the revenue which was

approximately 48% in 2010. It means that there is an increase in cost
of revenue in 2011 than in 2010.
Profit is 50% of the revenue in 2011 and 52% in 2010. It means than
profit is decreased by 2% in 2011 in comparison to 2010.
Other income is 60% of the revenue both in 2011 and 0% in 2011. So
other income is increase in 2011.
Finance cost is 3% of the revenue in 2011 which was 10% in 2010.
Finance income is 9% of the revenue in 2011 and 6% in 2010. It means
that there is a decrease in finance expense.
Income before income tax is 103% in 2011 and 35% in 2010 and after
income tax is 99% of the revenue in 2011 and 35% in 2010. It is seen
that there is an increase in income for the year.

Financial highlights of SPL

Findings

Under Liquidity ratios SPL companies Current ratio, Quick ratio, Net working capital ratio is
in 2010- 9.70, 5.94, 2,125,726,981 and in 2011- 2.09, 0.91, 978,125,414 respectively.
Under Profitability ratios companies Return on asset, Return on equity, Profit margin ratio and
EPS is in 2010- 9.07%, 7.83%, 75%, 0.20 times and in 2011- 14.16%, 18.36%, 164.34%, 3.30
times respectively.
Under Leverage ratio companies Debt to total asset ratio is in 2010- 0.05 and in 2011- 0.20
respectively
Under Efficiency ratios of SPL companies receivable turnover, Average collection period,
Inventory turnover, Average sales period is in 2010- 0.98 times, 360days, 4.02 times, 89.55
days and in 2011- 1.21 times, 360 days, 2.4 times, 150 days respectively.
Under Capital Structure Analysis ratios companies the debt to equity ratio, the interest
coverage ratio, Retention rate ratio is in 2010- 0.02 times, 3.40 times, 0.98 times and in 20110.15 times, 31.52 times and 0.99 times respectively.
Under capital market analysis ratio Price earnings ratio, Dividend yield ratio and dividend
payout ratio is in 2010- 43.32 times, 0.34 times, 1% and in 2011- 15.03 times, 0.42 times and .
4% respectively.

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