Compare of Cococolla and Pepsi Companies Financial Statements

Comp In our country fabric companies argon doing very well business. So many competitors be in this sector. Lots of new companies entered this market. From all of them we select two cement club for our report. We collect their fiscal statement & group A break them at heart troika methods & deoxyadenosine monophosphate we spot their comparative advantage. 1. 1 Origin This is the report comes from our FIN-245 subject. The course instructor Ms. Tarana Majid orally authorized the occupation of preparing the report to a group of student. She gave this report to learn the way to die the financial statements.To follow the syllabus of our subject so we have to do some relevant analyze based on our report. Thats why this topic comes forward. 1. 2 Scope We worked on Ashraf fabric mill about ltd. & adenosine monophosphate Saiham cloth mills ltd for our report. 1. 3 Limitat ionWe are very happy because we make our report at heart some limitations and overcome it almost. For prepa re this report we go about some barrier. When we prepared this report all necessary entropy is non available. For this we assume some of the data to complete the report. On the other pass on when we go to collect the financial statement we were unable to found our requisite statement books.Finally, i limitation was on shortage of k directlyledge that was reduced to make this report a better one. 1. 4 Sour ce of DataFor our report we collect data for finding & axerophthol compend. At first we collected the annual report &type A take financial statements of two companies. We also collected some data from the inter plunder. 1. 5 Methodol ogy As a rule, we had to follow a particular method for collecting data to complete the report accurately. At first we make Income Statement, Balance carpenters plane & adenine Cash Flow on a excel tab. Than we analysis the Income Statement & adenylic acid the Balance Sheet victimisation the common size of it & antiophthalmic factor index ing method.Finally we used the eleven financial proportions for our proportion analysis. 2 2. 0 Brief History of fraternity Saiham material Ltd. Late Syed Sayeed Uddin Ahmed & adenosine monophosphate Begum Hamida Banu, in remembrance of whom, Saiham Textile Mills Limited has derived the name of the caller-out would have been proud to know how well their offspring have managed and protracted the organization. Saiham Textile Mills was set up in Noyapara, Hobiganj district in the social class 1982 with an annual capacity of 7. 5 m yards of finished cloth. It was fitted out(p) with modern and sophisticated machineries from Japan.Initially it was a weaving, dyeing printing and finishing plant. Saiham Textile claims to be the pioneer in introducing the concept of modern fabrics in Bangladesh. They were one of the first cloth mills to start international standard polyester fabric, TC fabric, synthetic and Georgette sarees with cross border. The mother political party of the present conglomerate is now comprised of different industrial concerns. The entrepreneurship of Saiham, consists of five directors, all from the same family. Although a company run and managed by sexual relations, the standard and strength of the steering does not compromise on its quality.Ashraf Textile mills Ltd. Ashraf fabric mills ltd is one of the some other company which is run and managed by relatives, the standard and efficiency of the management does not compromise on its quality. Addressed Ashraf Textile Mills Ltd. New DOSH, Mohakhali capital of Bangladesh 1212 Ph 9887051-53 Fax 9887033 3 3 . 0 Findings & compendium According to our report subject our main objective is identifying the difference surrounded by two companies financial statement. Also we want to find out which company is more stable & which is not stable.From the financial statement we mickle find out our requirements. In below we give our finding & analysis in basis of companys financial stateme nt. 3. 1 Analyze of Income Statement, Balance Sheet between two companiess In below we are going to discuss about the two companies proportion sheet, Income Statement & Cash flow comparison in a briefly 3. 1. 1 Balance Sheet Comparison Assets From the residuum sheet of the both companies we stick out identify that Ashraf framework had504,741,251 tk total summations in 2005 scarce on the other hand Saiham cloth had only425,320,371 tk total asset in 2003-2004.Next form Ashraf textile companies total asset was decreased and Saiham textile companys total assets improver and in 2007 Ashraf textile reached in167,726,578 tk whereas in 2005-2006 Saiham textiles total asset436,650,516 tk. For the total asset volume we can give tongue to that Saiham textile has more powerful quite a than Ashraf textile. Liability The total liability we precept that Ashraf textile had623,823,012 tk liabilities in 2005 & Saiham textile had152,581,718tk only in 2003-2004. Both companies liabi lities were also increase in neighboring form. But distinctly we can comments that Ashraf textile had least liability than the Saiham textile.How ever Saiham textile had the more Net asset than the Ashraf textile. share holders equity we can easily understand that Saiham textile had the more equity and it was 818,663,635 tk for 2004-06 & Ashraf textile had -1,123,244,182. So we can theorize that Saiham textile had the more investment in the market. 4 3. 1. 2 Income Statement Comparison From our income statement we can identify that Saiham textile has a hit 74,932,529tk in 2004 &52,001,246 tk in 2005 &57,295,427 tk in 2006. From this we can submit that the do good is decreasing by next two years.And this shows that sale for Saiham textile decreasing during the next two year. On the other hand Ashraf textile is in a detriment of-62,609,854 tk in 2005 & -122,738,787 tk in 2006 &-14,064,257 tk in 2007. They continue their business in loss where Saiham textile doin g their business with lucrativeness. 3. 1. 3 Analyzing Common Sizing & Indexing In common size analysis we express the motley components of a balance sheet as per centum of the total assets of the company. In addition this can be done for the income statement, save here items are releted to net sales.In Ashraf textile balance sheets over the three year span the percentage of veritable assets increased. On the other hand Saiham textile contemporary assets fluctuated. We percolate that Ashraf textile line receivable showed a relative diccreased from 2005 to 2007. Saiham textile account receivable flactuated from 2003-04 to 2005-2006. On the liability & equity portion of the balance sheets, Ashraf textile total debt of the company decline on a relative basis from 2005 to 2007. but Saiham textile total debt diccreased in 2004-2005 & increased in 2005-2006.The common size income statement show the stark(a) profit/loss margin from year to year. We take hold of that Ashra f textile operating expenses increase year to year & in 2007 increases sharply. whereas Saiham textile operating expenses diccreased in 2004-2005 & increase again in 2005-2006. In 2005-2007 Ashraf textiles net profit had negetive percentage, whereas Saiham textiles net profit increased. In indexes analysis all financial statement items are one C%. In 2006 & 2007 Ashraf textile ac acknowledgmented assets indexed is 91. 53 & 9. 95 whereas Saiham textile current assets s indexed is 116. 26 & 100. 3 in 2004-2005 & 2005-2006. The indexed income statements give much the same picture as the common size income statements namely, fluctuating behavior. In Ashraf textile income statement total gross loss indexed are 100, 196. 037491 & 22. 46332822 in 2005 , 2006 & 2007. Whereas Saiham textiles gross profit are 100, 69. 3974 & 76. 4626 in 2003-04, 2004-05 & 2005-2006. 5 4. 0 pecuniary Statement Analysis by ratio For the performance beat of Ashraf textile & Saiham textile mills Ltd. In below we are going to analysis about the two companies financial statement using ratio analysis.We used 11 methods to analyze the ratio. Here are belongs 4. 1 Liquidity symmetry i) authentic symmetry Current assets divided up by current liabilities. It shows a unfluctuatings ability to even off its current liabilities with its current assets. In below there is the graphical record of the two textile companys current ratio 0 0. 2 0. 4 ratio year current ratio(Ashraf textile) Series10. 32332 0. 13204 0. 16733 2005 2006 2007 01 2 ratio year current ratio(Saiham textile) Series11. 044 0. 764 0. 982 2003- 2004- 2005- From the graph we can see that Ashraf textile current ratio is 0. 32 times in 2005 and 0. 67 times in 2007. Here we see that current ratio has been decreased and go down in slight than 1. On the other hand Saiham textile current ratio is 1. 044 in 2003-04 & next two year stay remain but it also be below the 1 and from the Ashraf textile . In the last year for both company we suggested that the current liabilities cannot be covered if existing current asset are liquated at their book values. 6 ii)Quick proportion Current assets less inventories divided by current liabilities. It shows a bulletproofs ability to attain current liabilities with its most liquid assets. 0 0. 05 0. 1 0. 15 0. 2 ratio ye arQuick ratio(Ashraf textile) Series10. 197173 0. 069725 0. 138913 2005 2006 2007 0 0. 1 0. 2 0. 3 0. 4 ratio year Quick ratio(Saiham textile) Series10. 2643053 0. 15642413 0. 38213114 2003-2004 2004-2005 2005-2006 From the graph we can easily identify that in 2006 Ashraf textile & Saiham textile energetic ratio is decreased dramatically. We conjecture that in the last year of the both companys quick ratio increased. But Saiham textile has good position than the Ashraf textile. 4. 2 Financial Leverage debt ratio i)Debt-To-Equity Ratios that show the extent to which the home is financed by debt. 100 Ratio yearDebt to Equity(Ashraf textile) Series1-5. 239 -2. 17 -1. 253 2005 2006 2007 0 0. 51 Ratio year Debt to Equity(Saiham textile) Series10. 559443 0. 887395 0. 59995 2003- 2004- 2005- If we count the year 2007 of Ashraf textile, the ratio is -1. 253 that creditors are providing for each tk 1. In the case of Saiham textile in 2005- 2006 the ratio is 0. 599 that creditors are providing. So we can say that Ashraf textile is in a better position than the Saiham textile. 7 ii) Debt-To-Total Asset Ratio The debt to total asset ratio is derived by dividing a firms total debt by its total assets. 0246 ratio ear Sebt to Assets (Ashraf textile) Series11. 235926 1. 854987 4. 95805 2005 2006 2007 0 0. 2 0. 4 0. 6 ratio year Debt to Assets(Saiham textile) Series10. 358745 0. 470169 0. 374981 2003- 2004- 2005- From the graph we can sympathize that Ashraf textile ratio is more than Saiham textile in their last three year. We know that the high the debt to assets ratio, the greater the financial risk the overthrow the ratio, the lower the risk. So Ashraf textile has more risk than the Saiham textile. 4. 3 Coverage Ratio i) Interest Coverage Ratio Ratio earning before interest and taxes divided by interest charges.It indicates a firms ability to cover interest charges. It is also called times interest earned. 0 0. 51 1. 5 2 2. 5 3 ratio year Interest coverage(Ashraf textile) Series1 Series11. 7272998 2. 7067618 0. 3935626 2005 2006 2007 012345 ratio year Interest coverage(Saiham textile) Series14. 3453871 3. 1634257 2. 5946142 2003- 2004- 2005- This ratio serves as one measure of the firms ability to meet its interest payments and thus avoid bankruptcy. The higher the ratio the greater company could cover its interest payment without difficulty.So analyze after the two graphs we can said that Saiham textile has more interest coverage than the Ashraf textile Cement. Ashraf textile ratio is fluctuated highly in 2007. 8 4. 4 Activity Ratio i) Receivable Turnover the receivable overt hrow ratio provides insight into the equality of the firms receivables and how to successful the firm is in is collections. This ratio is cipher by dividing receivables into annual net credit sales. 0 20 40 60 80 100 cxx 140 years year Receivable turnover(Ashraf textile) Series1 101 6 one hundred twenty-five 2005 2006 2007 0 10 20 30 40 50 Day Ye ar Receivable turnover (Saiham textile)Series1 14 6 42 2003-2004 2004-2005 2005-2006 From the graph we can say that Ashraf textile stock their receivable money from the buyers within 101 days in 2005, 6 days in 2006 & 125 days in 2007. On the other, Saiham textile received within 14 day in 2003-2004, 6 day in 2004-2005 and 42 days in 2005-2006. Eventually we can say that Saiham textile was received money within short time rather than the Ashraf textile. ii) PAYABLE derangement There may be occasions when a firm wants to study in own promptness of payment to suppliers or that of a electric potential credit customer.This ratio is cal culated by dividing purchase into total A/C payable. 0 50000 100000 150000 200000 250000 300000 350000 four hundred000 Days year Payable turnover(Ashraf textile) Series1 138 276 360420 2005 2006 2007 05 10 15 20 25 30 35 Days year Payable turnover(Saiham textile) Series1 35 10 15 2003-2004 2004-2005 2005-2006 From the graph we can say that Ashraf textile paid their payable money to the sales within 138 days in 2005, 276 days in 2006 & 360420 days in 2007. On the other, Saiham textile paid within 35 day in 2003-2004, 10 day in 2004-2005 and 15 days in 2005-2006.Eventually we can say that Saiham textile was paid money within short time rather than the Ashraf textile. 9 iii) INVENTORY ACTIVITY To help determine how effectively the firm is managing muniment and also to gain an indication of the liquidity of inventory. This ratio is calculated by dividing inventory into COGS. 0 100 200 300 400 Days year Inventory Activity(Ashraf textile) Series1 60 53 369 2005 2006 2007 0 50 100 150 200 250 Days year Inventory Activity(Saiham textile) S eries1 170 225 176 2003-2004 2004-2005 2005- 2006 The figures tell us how many days, on average, before inventory is turned into accounts receivable through sales.Here we see that Ashraf textile was faster than Saiham textile in case of inventory activity. iv) TOTAL ASSET TURNOVER The blood of net sales to total assets is known as the total asset turnover, or capital turnover. 0 0. 1 0. 2 0. 3 0. 4 0. 5 0. 6 0. 7 ratio year Total asset turnover(Ashraf textile) Series10. 6780095 0. 4476056 0. 05087134 2005 2006 2007 0 0. 1 0. 2 0. 3 0. 4 0. 5 0. 6 0. 7 0. 8 ratio year Total Asset turnover(Saiham textile) Series10. 77632571 0. 56348701 0. 5969018 2003-2004 2004-2005 2005-2006 The median(a) total asset turnover for the industry is 1. 66.For this ratio analysis we saw that Ashraf textile & Saiham textile both are less effectual than the industry in this regard. On the other hand Saiham textile is in a better position than the Ashraf textile. 10 4. 5 favorableness Ratio i) PROFITABILITY RATIO IN RELATION TO SALES The ratio we take aim is the gross profit margin or simply gross profit divided by net sales. 0 0. 51 1. 5 2 2. 5 3 3. 5 4 ratio year positiveness in ratio to sales(Ashraf textile) Series12. 1829524 2. 6889593973. 648320722 2005 2006 2007 1. 74 1. 75 1. 76 1. 77 1. 78 1. 79 1. 8 1. 81 1. 82 1. 83 ratio year favourableness in relation to ales(Saiham textile) S eries11. 773060426 1. 820902862 1. 780171958 2003- 2004 2004- 2005 2005- 2006 It is a measure of the efficiency of the firms operations, as well as an indication of how products are priced. From the above graphs we saw that Ashraf textile has relatively more effective at producing and selling products above cost.ii)PROFITABILITY RATIO IN RELATION TO INVESTMENT this profitability ratio relates profits to investment. One of those measures is the rate of return on investment, or return on asset. -2 -1. 5 -1 0. 50 ratio year Profitability i n relation to investment(Ashraf textile) S eries1-0. 35798631 -0. 507839396 -1. 707107588 2005 2006 2007 0 0. 005 0. 01 0. 015 0. 02 0. 025 ratio year Profitability in relation to investment(Saiham textile) Series10. 023235772 0. 018004789 0. 023118956 2003- 2004 2004- 2005 2005- 2006 The standard ratio compares for this is nearly 8%. From our analysis we found that Saiham textile ratio simply fluctuates. Their percentage is not so good. On the other handAshraf textile had negative percentage from 2005- 2007. 11 5. 0Conclusion We look the analysis of Ashraf textile & Saiham textile mills ltd. We see that the liquidity position is nit good both of the company.Comparatively Saiham textile better than Ashraf textile mills ltd. Ashraf textile mills ltd. should change the credit policy & seemly use of its assets. The profitability ratio of Ashraf textile mills ltd. Good than the Saiham textile mills ltd. The company should avoid the use of debt otherwise company would be fall int o bankruptcy. 12 6.Bibliography i) Annual report- -Ashraf textile mills ltd. For the year of 2005, 2006 & 2007. -Saiham textile mills ltd. For the year of 2003- 2004, 2004-2005 & 2005-2006. ii) Fundamental of financial management (Twelfth edition) -James C. Van Horne & John M