- Home
- Internship Report
- Financial Statements Analysis of Berger Paints Bangladesh Ltd
Financial Statements Analysis of Berger Paints Bangladesh Ltd
- By Hosney Mobarak
- Published 6 September 2009
- Internship Report
-
Rating:
Findings & Recommendations
Liquidity:
The cash flow analysis reveals that BPBL has been enjoying good cash flow position. Its operating cash flow stood as tk.363.1 million, tk.58.17 million, tk.309.55 million, tk.268.97 million & tk.315.523 million in the year 2006 to 2002 respectively. The cash downturn in the year 2005 is due to increase in cash paid to suppliers & employees.
The liquidity position of BPBL is acceptable. Its current ratio stood as 1.62 times, 1.57 tines, 1.6 times, 1.76 times & 1.85 times in the 2006 to 2002 year respectively. In 2006 current asset decreased 9.25% & current liabilities decreased 7.14%. As a result except 2006 current ratio decreased from year 2006 to 2002.The quick ratio stood at 77.17%, 99.57%, 109.485%, 131.49% & 142.91% in the year 2006 to 2002 respectively. So BPBL quick ratio for the year 2006 & 2005 is bellow 1 that does not comprise standard value. .Also the ratio for the year 2004, 2003, 2002 shows reducing trend like 1.42, 1.31, and 1.09.
The required time to sales inventories in the last year is around 23 days which was 57 days in the year 2002. Its efficiency in the collection periods of receivables is increasing in 2006 due to well channel of distributions. BPBL average collection period is 30.65 days, 35.81 days, 42.11 days, 44.62 days & 43.19 days in the year 2006 to 2002.
Financial Solvency & Flexibility:
The solvency dimension of BPBL is strong. The company has no long term debt Its interest coverage ratio stood at 40.66 times, 19.24 times, 102.04 times, 93.96 times & 142.04 times in the year 2006 to 2002. The operational cash flow stood at tk.363.1 million, tk.58.17 million, tk.309.55 million, tk.268.97 million & tk.315.523 million in the year 2006 to 2002 respectively. Its operating cash flow stood at 21%, 14.785, 33.88%, 21.33% & 12.57% of total debt during the same period.
BPBL total debt to equity ratio stood at 4.24, 4.43, 6.21, 4.19 & 3.55 times in the year 2006 to 20025. In the year 2003 its debt to equity ratio was higher than others but in the recent year it is satisfactory level. The market value per share of tk10 is almost tk.350 in the recent year.
Performance:
The operating performance of BPBL is good although its profitability parameters are in decreasing trend. Its sales revenue stood at tk.2872.4 million, tk.2221.12 million, tk.1737.63 million, tk.1465.26 million & tk.1307.67 million in the year 2006 to 2002 respectively on an accepting limit.
The gross profit margin of BPBL is around 32.85% in 2006 which is lower than previous four years but it is acceptable due to increase of raw materials price & giving higher discount. BPBL total asset turnover stood at 2.20 times, 1.59 times, 1.47 times, 1.21 times & 1.13 times in the year 2006 to 2002 shows an increasing trend of turnover.
Not same line of business:
Compare to other industries not same line of business, BPBL current ratio and net profit margin is moderate but its debtors turnover and total asset turnover is well than others. BPBL quick ratio is not satisfactory than others which is lower than 1. In the case of Return on Assets (ROA), BPBL continues to be the fore-runner among six companies. It has the highest ROA 34.21% which gives an indication of efficient use of assets and earn handsome on assets. Berger’s Price Earnings Ratio is roughly the same like ACI, Square Pharma and Beximco Pharma.
Same line of business:
Compare to same line of business, BPBL current ratio is moderate but quick ratio is low. BPBL debt equity shows primarily relying on non-interest bearing liabilities such as accounts payable & accrued interest to finance the operations. Its gross profit margin is moderate level like 30% but its net profit is low. Although other paint industries have the profit margin near BPBL. So, Berger attempts to preserve its brand imafe and distribute its products through full service retailers and provide Home-Decor service.
Berger is second highest Return on capital generator which provides an indication of employing the funds invested by the firms shareholders. Also Berger has the highest return on assets in comparision with Asian Paints, Kansai Paints, Orica Limited, AB Wilh Baker Company and Sherwin-Williams company.
Conclusion
Berger Paints Bangladesh Limited claims that they control 65% of local paint market because with its strong distribution network, Berger ha reached almost every corner of Bangladesh. The nationwide dealer network, supported by seven sales depots strategically located at Dhaka, Chittagong, Khulna, Bogra, Rajshahi, Comilla and Sylet has enabled them to strategically cater to all parts of the country. Berger also provides customer support connecting customers to technology through specialized Home Decor service giving free technical advice on surface preparation, color consultancy, special color schemes etc. To bolster customer satisfaction, Berger launched Illusion-the first designer paint solution.
By analyzing it can be said with certainty that if Berger can maintain the quality of paints and coatings, it will be able to preserve the position of marker leader. The near competitor of Berger is far away from it. Berger is showing an upward trend in every aspect of financial statements. Moreover, Berger has a little amount of bank borrowing which gives its investors the great dependability upon the company.
Berger’s profit after tax has a clear indication of its financial viability. Berger is also contributing a lot in the national economy by paying a huge value added tax (VAT). Berger Paints Bangladesh Limited won the ICAB national Award as best published Accounts and reports in the manufacturing category in the year 2005 and 2006. With the support of the country’s eminent artists and the enthusiastic participation of young neophytes, Berger gives Berger Young Painters’ Competition Award.
Bibliography
Annual Report of AB Wilh Baker(2006)
Annual Report of Advanced Chemical Industries (2005,2006)
Annual Report of Asian Paints (2006)
Annual Report of Berger Paints Bangladesh Limited (2002,2003,2004,2005,2006)
Annual Report of Beximco Pharmaceuticals Bangladesh Limited(2005,2006)
Annual Report of GlaxoSmithkline Bangladesh Limited(2005,2006)
Annual Report of Kansai Paints(2006)
Annual Report of Orica Limited(2006)
Annual Report of Square Pharmaceutical Bangladesh Limited(2005,2006)
Annual Report of Singer Bangladesh Limited(2005,2006)
Annual Report of Sherwin-Williams(2006)
Business Analysis and Valuation, 2nd Edition, by Krishna G. Palepu, Paul M. Healy and Victor L. Bernard
Financial Reporting, Financial Statement Analysis, and Valuation: A Strategic Perspective by Clyde P. Stickney, Paul Brown , James M. Wahlen
Financial Statement Analysis: A Practitioner's Guide by Martin Fridson, Fernando Alvarez, Martin S. Fridson
The Interpretation of Financial Statements (Hardcover), by Benjamin Graham, Spencer B. Meredith.
www.aci-bd.com
www.asianpaints.com
www.becker-acroma.com
www.beximco-pharma.com
http://www.bergerbd.com
www.gsk.com/worldwide/bd
www.kansai.co.jp
www.orica.com
www.sherwin-williams.co
www.singerbd.com
Liquidity:
The cash flow analysis reveals that BPBL has been enjoying good cash flow position. Its operating cash flow stood as tk.363.1 million, tk.58.17 million, tk.309.55 million, tk.268.97 million & tk.315.523 million in the year 2006 to 2002 respectively. The cash downturn in the year 2005 is due to increase in cash paid to suppliers & employees.
The liquidity position of BPBL is acceptable. Its current ratio stood as 1.62 times, 1.57 tines, 1.6 times, 1.76 times & 1.85 times in the 2006 to 2002 year respectively. In 2006 current asset decreased 9.25% & current liabilities decreased 7.14%. As a result except 2006 current ratio decreased from year 2006 to 2002.The quick ratio stood at 77.17%, 99.57%, 109.485%, 131.49% & 142.91% in the year 2006 to 2002 respectively. So BPBL quick ratio for the year 2006 & 2005 is bellow 1 that does not comprise standard value. .Also the ratio for the year 2004, 2003, 2002 shows reducing trend like 1.42, 1.31, and 1.09.
The required time to sales inventories in the last year is around 23 days which was 57 days in the year 2002. Its efficiency in the collection periods of receivables is increasing in 2006 due to well channel of distributions. BPBL average collection period is 30.65 days, 35.81 days, 42.11 days, 44.62 days & 43.19 days in the year 2006 to 2002.
Financial Solvency & Flexibility:
The solvency dimension of BPBL is strong. The company has no long term debt Its interest coverage ratio stood at 40.66 times, 19.24 times, 102.04 times, 93.96 times & 142.04 times in the year 2006 to 2002. The operational cash flow stood at tk.363.1 million, tk.58.17 million, tk.309.55 million, tk.268.97 million & tk.315.523 million in the year 2006 to 2002 respectively. Its operating cash flow stood at 21%, 14.785, 33.88%, 21.33% & 12.57% of total debt during the same period.
BPBL total debt to equity ratio stood at 4.24, 4.43, 6.21, 4.19 & 3.55 times in the year 2006 to 20025. In the year 2003 its debt to equity ratio was higher than others but in the recent year it is satisfactory level. The market value per share of tk10 is almost tk.350 in the recent year.
Performance:
The operating performance of BPBL is good although its profitability parameters are in decreasing trend. Its sales revenue stood at tk.2872.4 million, tk.2221.12 million, tk.1737.63 million, tk.1465.26 million & tk.1307.67 million in the year 2006 to 2002 respectively on an accepting limit.
The gross profit margin of BPBL is around 32.85% in 2006 which is lower than previous four years but it is acceptable due to increase of raw materials price & giving higher discount. BPBL total asset turnover stood at 2.20 times, 1.59 times, 1.47 times, 1.21 times & 1.13 times in the year 2006 to 2002 shows an increasing trend of turnover.
Not same line of business:
Compare to other industries not same line of business, BPBL current ratio and net profit margin is moderate but its debtors turnover and total asset turnover is well than others. BPBL quick ratio is not satisfactory than others which is lower than 1. In the case of Return on Assets (ROA), BPBL continues to be the fore-runner among six companies. It has the highest ROA 34.21% which gives an indication of efficient use of assets and earn handsome on assets. Berger’s Price Earnings Ratio is roughly the same like ACI, Square Pharma and Beximco Pharma.
Same line of business:
Compare to same line of business, BPBL current ratio is moderate but quick ratio is low. BPBL debt equity shows primarily relying on non-interest bearing liabilities such as accounts payable & accrued interest to finance the operations. Its gross profit margin is moderate level like 30% but its net profit is low. Although other paint industries have the profit margin near BPBL. So, Berger attempts to preserve its brand imafe and distribute its products through full service retailers and provide Home-Decor service.
Berger is second highest Return on capital generator which provides an indication of employing the funds invested by the firms shareholders. Also Berger has the highest return on assets in comparision with Asian Paints, Kansai Paints, Orica Limited, AB Wilh Baker Company and Sherwin-Williams company.
Conclusion
Berger Paints Bangladesh Limited claims that they control 65% of local paint market because with its strong distribution network, Berger ha reached almost every corner of Bangladesh. The nationwide dealer network, supported by seven sales depots strategically located at Dhaka, Chittagong, Khulna, Bogra, Rajshahi, Comilla and Sylet has enabled them to strategically cater to all parts of the country. Berger also provides customer support connecting customers to technology through specialized Home Decor service giving free technical advice on surface preparation, color consultancy, special color schemes etc. To bolster customer satisfaction, Berger launched Illusion-the first designer paint solution.
By analyzing it can be said with certainty that if Berger can maintain the quality of paints and coatings, it will be able to preserve the position of marker leader. The near competitor of Berger is far away from it. Berger is showing an upward trend in every aspect of financial statements. Moreover, Berger has a little amount of bank borrowing which gives its investors the great dependability upon the company.
Berger’s profit after tax has a clear indication of its financial viability. Berger is also contributing a lot in the national economy by paying a huge value added tax (VAT). Berger Paints Bangladesh Limited won the ICAB national Award as best published Accounts and reports in the manufacturing category in the year 2005 and 2006. With the support of the country’s eminent artists and the enthusiastic participation of young neophytes, Berger gives Berger Young Painters’ Competition Award.
Bibliography
Annual Report of AB Wilh Baker(2006)
Annual Report of Advanced Chemical Industries (2005,2006)
Annual Report of Asian Paints (2006)
Annual Report of Berger Paints Bangladesh Limited (2002,2003,2004,2005,2006)
Annual Report of Beximco Pharmaceuticals Bangladesh Limited(2005,2006)
Annual Report of GlaxoSmithkline Bangladesh Limited(2005,2006)
Annual Report of Kansai Paints(2006)
Annual Report of Orica Limited(2006)
Annual Report of Square Pharmaceutical Bangladesh Limited(2005,2006)
Annual Report of Singer Bangladesh Limited(2005,2006)
Annual Report of Sherwin-Williams(2006)
Business Analysis and Valuation, 2nd Edition, by Krishna G. Palepu, Paul M. Healy and Victor L. Bernard
Financial Reporting, Financial Statement Analysis, and Valuation: A Strategic Perspective by Clyde P. Stickney, Paul Brown , James M. Wahlen
Financial Statement Analysis: A Practitioner's Guide by Martin Fridson, Fernando Alvarez, Martin S. Fridson
The Interpretation of Financial Statements (Hardcover), by Benjamin Graham, Spencer B. Meredith.
www.aci-bd.com
www.asianpaints.com
www.becker-acroma.com
www.beximco-pharma.com
http://www.bergerbd.com
www.gsk.com/worldwide/bd
www.kansai.co.jp
www.orica.com
www.sherwin-williams.co
www.singerbd.com
Spread The Word
Related Articles
7 Responses to "Financial Statements Analysis of Berger Paints Bangladesh Ltd" 
Author/Admin)|
said this on 27 Nov 2011 9:13:21 AM CDT
xcelant....it is very much helpful for any student......thanks u for this report.........
|
|
said this on 04 Oct 2010 6:20:13 AM CDT
hey man, which university did u study?
|
|
said this on 09 Dec 2011 8:09:17 PM CDT
Introduction is ok but Financial analysis needs more updated data and analysis of other ratio. The decision should be expected on better mgt on working cap mgt, resource mgt, suggested on automation,
|
|
said this on 15 Apr 2012 2:15:54 PM CDT
>* Hey buddy i do not know you but i am very much thankful to you .... :) *
|