1.

1 Introduction:
A tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the economy to judge the performance of the company. Ratio analysis is predominately used by proponents of fundamental analysis. While conducting the study, sources were explored for information and data. But hardly any updated data could be found. In the absence of updated information or data dependence on data has been inevitable. However, whenever possible, primary data has been used. Data were also collected by interviewing the responsible officers and from some documents & statements printed by Crown Cement Limited.

1.2 Source of date

Here is where the investors get the data they require for ratio analysis:

Financial Statements: The financial data published by the company and its competitors is the prime source of information for ratio analysis. Best Practices Reports: There are a wide range of consulting firms that collate and publish data about various companies. This data is used for operational benchmarking and can also be used for financial data analysis. Market: The data generated by all the activity on the stock exchange is also important from ratio analysis point of view. There is a whole class of ratios where the stock price is compared with earnings, cash flow and such other metrics to check if it is fairly priced.

1.3 Methodology of the study

Study Design: The study was fully a Statistical in nature. The study was conducted using the analytical method. To know the in-depth information, the topic was discussed with the expert professional related to company for several times and review of record of Crown Cement Ltd and other related and secondary information. The Purpose was to get an idea about

the whole activities of international division. Statistical data and other relevant information were gathered from secondary sources including several journal and booklets. PRIMARY DATA: The primary data are those which are collected a fresh and for the first time, and thus happened to be original in character. SECONDARY DATA: The secondary data include the information from the company annual reports which include financial statement like balance sheet and income statements and such other information from text books of financial management, journals and magazine has also been collected

1.4 Objective of Project Report:

Ratios are worked out to analysis the following aspects of an enterprise: a. Solvency: Company success or failures are depending on their solvency. Solvency include are: 1. Long term: How to company efficiently perform for long time. 2. Short term: How to company efficiently perform for short time. 3. Immediate: How to company immediately take step in financial crisis. b. Profitability: Profitability is the main objective of all business. Company survives or not depends on their profitability. c. Operational Efficiency: If company operate their activity efficiently they will gain their goal immediately. d. Credit standing: How easy to company arraigned their loan and advance. e. Effective utilization of resources: Company success depends on proper utilization of resources.

1.5 Rational of the study

Practical assignment is the systematic process for gathering, recording and analyzing of the data about the subject that a student to learn on the program project. The aim of this assignment is to connect practical knowledge with theoretical knowledge. Now the world is a competitive world. So every body has to be expert in both practical knowledge and theoretical knowledge. This assignment is related to analyze the financial statement of a company. As a MBA student I think that, this assignment is helps to take future investment decision in any company.

1.6 Limitation of Ratio Analysis

1. 2. 3. 4. 5. 6. 7. 8. Comparison not possible if different firms adopt different accounting policies. Ratio analysis becomes less effective due to price level changes. Ratio may be misleading in the absence of absolute data. Limited use of a single data. Lack of proper standards. False accounting data gives false ratio. Ratios alone are not adequate for proper conclusions. Effect of personal ability and bias of the analyst.

2.1 Company History:

M.I. Cement Factory Ltd. Is a public limited company and one of the leading manufacturers of cement in Bangladesh. On Dec 31, 1994 it started its journey with the commitment for providing high quality cement o the country. Its brand Crown Cement has won renown both at home and abroad. Initially the plant was installed with capacity of producing 600 tpd (ton per day) of Portland cement. With the passing of time the demand of Crown Cement increased day by day. In 2011 thereby raising the total production capacity to 5800 tpd i.c. 1740 million metric ton per annum.

2.2 Vision:
Our vision is to make a contribution to the nation by creating opportunities in the arena of industrial growth and development of Bangladesh and to provide a solid foundation for societys future.

2.3 Mission:
As a modern cement company, we manufacture cement (Brand name: Crown Cement) to meet the needs of clients through innovative products & services that create value for all our stakeholders.

2.4 Ratio Analysis

1. Profitability Ratios:
Particular 1) Gross Profit=
Gross Profit 100 Net Sales

2011-12 =

2010-11
Tk 768,256,755 = Tk 4,022,271,065

Tk 750,616,368 = 19.10% Tk 5,657,601,485

Net profit after tax 100 2) Net Profit = Net sales

=13% =

= Tk 4,022,271,063

Tk 435,935,820

Tk 559,465,867 =10.83% Tk 5,657,601,485

=9.88%

3) Return on Assets=
Net profit 100 Average Total Asset

=
Tk 559,465,867 Tk 9,925,183,783

= Tk 7,004,458,502 = 6.22%
Tk 435,935,820

Tk 435,935,820

4) Return on Equity =
Net profit 100 Average total equity

= 5.64% =
Tk 559,465,867 Tk 5,437,959,570

= Tk 5,028,493,703 =8.66%

=10.28%

2. Liquidity or Short term solvency ratio:

1) Working capital= CA-CL =(5,759,451,2432,514,255,947)
Current Asset 2) Current Ratio= Current Liabilities

=(4,752,218,5771,269,177,277) =3,383,041,300 =
Tk 4,752,218,577 Tk1,269,177,277

=3,245,195,296 =
Tk 5,759,451,253 Tk 2,514,255,947

3) Quick Ratio =
(CA - Inventory - prepayment) Current Liabilities

=2.29 =
Tk 4,324,545,321 Tk 2,514,255,947

=3.47 =
Tk 3,566,882,352 Tk1,369,177,277

= 1.72

= 2.60

3. Asset management or Activity ratio

1) Asset Turnover= Average Total Asset

Net sales

= Tk 9,915,183783 =0.57

Tk 5,567,601485

=
Tk 4,022,271,065 Tk 7,004,458,502

2) Inventory Turnover Ratio=

=0.57 =

Cost of Goods Sold Average Ending Inventory

Tk 4,906,985,117 Tk 442,126,977

Tk 3,254,014,308 Tk 587,645,695

=11.09Times

=5.53 Times

4. Financial Structure of Capitalization Ratio

1) Debt/Equity Ratio = Equity
Debt

=
Tk 4,477,224,213 Tk 5,437,959,570

=
Tk1,975,964,794 Tk 5,028,433,703

2) Debt/Total Asset Ratio =

Debt 100 Total Assets

=82.33% =
Tk 4,477,224,213 Tk 9,915,183,783

= 39.29% =
Tk1,975,964,794 Tk 7,004,458,502

Equity 100 3) Equity Ratio= Total Asset

=45.15% =
Tk 5,437,959,570 Tk 9,915,183,783

=28.21% =
Tk 5,028,493,703 Tk 7,004,458,502

= 54.84%

= 71.78%

5. Market Test Ratio

1) Earnings Per Share =
Net profit After Tax Number of issued Share

= 1,35,000,000 =4.14 = 1,35,000,000 =1.07 =

Tk1.07 Tk 4.14 Tk 82 Tk 4.14

Tk 559,465,867

= 1,35,000,000 = 3.23

Tk 435,935,820

2) Dividends Per Share =

Divident Number of issued Share

Tk145,639,269

3) Dividend Payout= Earning per Share 100 4) Price Earning Ratio =

Market Price Per Share Earning per Share

Divident per Share

= 26.05% = =
Tk100 Tk 3.23

=19.80

=30.95

2.5 Summary of the findings

1. ROE in 2012 is 5.64% and in 2011 is 6.22%.ROE in 2012 decries because expenses increase in 2012. 2. EPS in 2012 is 4.14 and in 2011 is 3.23. EPS increase in 2012. 3. Risk of business is being reduced by the significant repayment of loan in 2012 4. Although company production increase in 2012 but profit are not increase.

2.6 Conclusion & Recommendation

1) The company should reduce their cost. 2) The production growth in the business 3) The strong forecast for the industry (ie general prospects looking good and world demand for medicine remaining strong), 4) The sales growth in this business, 5) Acceptable ratios as they are quite close to the industry averages, 6) Good cash flows from operating activities and 7) Favorable ROE, although it has increased, it is still better than the industry average ROE.

Bibliography: Annual report of M I Cement LTD Financial statement of M I Cement LTD

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 Dhaka stock exchange .com

Appendix:

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