FINANCIAL STATEMENT ANALYSIS

Saiham Cottons Ltd.

Presented by Group 7
 Group -7

Name ID Merit Unit

Md. Shakib Hossen OSL-FR-8 977 C
Zemima Najnin OSL-SK-13 1019 C
Sumaiya Khatun OSL-SK-17 1044 C
Mashfiq Ahmed OSL-ZR-21 1061 C
Fardin Helal OSL-FR-54 454 D

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Table of Contents

TOPIC PAGE
LETTER OF TRANSMITTAL 3
COMPANY OVERVIEW 4
INTRODUCTION 5
HORIZONTAL ANALYSIS 6
VERTICAL ANALYSIS 12
RATIO ANALYSIS 16
RECOMMENDATION
CONCLUSION
APPENDIX

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Letter of Transmittal
Date: 23-4-19
To: Farhana Rahaman, Lecturer Department of Organization
Strategy and Leadership, DU.
Subject: Submission of assignment on Financial Statement
analysis.

Dear Madam,
Here is the assignment that we assigned as per your request. The
assignment has been completed by the knowledge we have
gathered from the course “Accounting Fundamentals ".

We are thankful to those persons who provided us important

information and gave us valuable advices. We would be happy if
you read the report carefully and we will be trying to answer all
the question that you have about thin assignment.

We have tried our best to complete this assignment correctly

and meaningfully. However, if you need any assistance in
interpreting this assignment please contact us without any kind
of hesitation.

Thanking you.
Yours obediently
Group – 7
3
 Company Overview

Saiham Cotton Mills Ltd. operates as an industrial spinning plant

in Bangladesh. It manufactures auto coned electronically clear
cotton carded and combed grey yarns for export market. The
company was formerly known as saiham Spinning Mills Ltd. and
changed its name to saiham Cotton Mills Ltd.
In April 2003, saiham Cotton Mills Ltd. was incorporated and
headquartered in Dhaka, Bangladesh.

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 Introduction
In this assignment we have analysis the financial statements of
saiham Cotton miles Ltd. Here we have analysis the financial
statements from the year 2014- 2018. The objective of this
analysis is to have a good idea about the elements of financial
statement. We have collected all the necessary information from
the official website of Saiham Cotton Mills Ltd. We have also
taken the help of our “Accounting Fundamentals " book.

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Horizontal Analysis

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 Balance Sheet

Particulars 2014 2015 2016 2017 2018

Total Non-Current 100% 100.96% 101.63% 101.45% 92.92%

Asset
Total Current Asset 100% 105.68% 121.62% 137.33% 185.3%
Total Asset 100% 102.56% 108.40% 113.61% 124.21%
Total Shareholder
Equity 100% 101.87% 101.92% 102.63% 101.83%
Total Non-Current
Liabilities 100% 141.61% 125.81% 118.86% 100.25%
Total Current
Liabilities 100% 90.38% 118.44% 139.39% 189.15%
Total Liabilities 100% 103.85% 120.38% 134.00% 165.79%
Total Equity and
Liabilities 100% 102.56% 108.40% 113.61% 124.79%

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 Assets

Particulars 2014 2015 2016 2017 2018

Non-current
Assets:
Property, plant and
equipment 100% 102.47% 109.13% 11.86% 114.56%
Investment 100% 97.83% 90.86% 73.76% 48.16%

Current Assets:
Trade and other
receivables 100% 75.19% 80.15% 116.5% 106.94%
Inventories 100% 160.16% 162.80% 192% 349.63%
Advance, deposits
and pre-payments 100% 111.32% 108.60% 124.10% 146.82%
Cash and cash
equivalents 100% 98.38% 134.58% 66.56% 62.91%

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 Shareholder’s Equity

Particulars 2014 2015 2016 2017 2018

Share Capital 100% 100% 110% 110% 110%

Share Premium 100% 100% 100% 100% 100%
Tax Holiday -
Reserve 100% 100% 100% 100%
Revaluation
Surplus 100% 93.92% 88.27% 82.20% 77.36%
General Reserve 100% 100% 100% 100% 100%
Retained earnings 100% 116.33% 92.84% 104.76% 134.97%
AFS Reserve - - - 100% 6.13%

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 Liabilities

Particulars 2014 2015 2016 2017 2018

(base)
Non-current
Liabilities:
Deferred tax liabilities 100% 113.58% 114.50% 127.94% 137.17%
Term Loan 100% 153.32% 135.80% 115.10% 84.83%

Current Liabilities:
Short Term Loan 100% 419.87% 497.87% 719.27% 872.82%
Term Loan Current 100% 125.41% 149% 204.61% 160.78%
Maturity
Trade creditors 100% 4.77% 14.20% 3.40% 44.28%
Liabilities against - 100% 80.10% - -
capital machinery
Income tax provision 100% 63.57% 53.34% 28.52% 7.16%
Payable and accruals 100% 136.88% 148.03% 158.60% 236.45%

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 Income Statement

Particulars 2014 2015 2016 2017 2018

(base)
Turnover 100% 144.95% 132.17% 159% 155.78%
Cost of goods sold 100% 153.62% 152.52% 170.5% 165.47%
Gross Profit 100% 98.18% 95.93% 96.70% 103.50%
Administrative and
marketing expenses 100% 152.24% 160.44% 173.25% 167.67%
Financial expenses 100% 84.31% 91.72% 99.22% 99.71%
Operating Profit 100% 91.76% 43.22% 74.98% 87.82%
Non-operating income 100% 108.83% 108.02% 50.23% 44.28%
Other income - - - 100% 80.5%
Operating Profit before
WPPF & WWF 100% 98.61% 69.22% 79.08% 81.61%
Expenses for WPPF & 100% 164.7% 115.61% 80.18% 136.30%
WWF
Profit before Tax 100% 96.67% 67.86% 77.51% 80%
Provision for Tax 100% 104.65% 62.24% 71.74% 83.36%
Current Tax 100% 61.99% 54.62% 36.40% 51.58%
Deferred Tax 100% 573.3% 145.85% 460% 436.46%
Net Profit after Tax 100% 94.68% 69.27% 78.95% 79.17%
Other Comprehensive
Income/(Loss) 100% 9.88% 444.1% 391.67% 47.97%
Adjustment for
unrealized loss/(gain) on 100% 226.06% 71.04% 288.17% 156.21%
marketable securities
Deferred tax adjustment - - 100% 378.38% 402.36%
Total Comprehensive
Income for the year 100% 86.17% 17.74% 74.96% 72.29%
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Vertical Analysis

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  Balance Sheet

Particulars 2014 2015 2016 2017 2018

Assets
Non-current asset 66.13% 65.095% 61.99% 59.05% 49.45%
Current Asset 33.87% 34.91% 38.01% 40.95% 50.54%
Total Assets 100% 100% 100% 100% 100%

Liability
Non-current Liability 26.28% 35.84% 27.48% 23.32% 15.89%
Current Liability 73.72% 64.16% 72.52% 76.69% 84.11%
Total Liability 100% 100% 100% 100% 100%

Shareholder’s Equity
Share Capital 40.89% 40.14% 44.11% 43.82% 44.17%
Share Premium 22.72% 22.31% 22.29% 22.14% 22.31%
Tax Holiday Reserve 2.9% 2.9% 2.9% 2.9% 0.00%
Revaluation Surplus 14.62% 13.48% 12.53% 11.72% 11.12%
General Reserve 1.8% 1.7% 1.70% 1.70% 0.00%
Retained earnings 16.88% 19.27% 16.19% 17% 22.37%
AFS Reserve 0.00% 0.00% 0.07% 0.03% 0.02%
Total Share Equity 100% 100% 100% 100% 100%

Total Liability 36.06% 35.01% 38.87% 41.28% 46.71%

Total Share Equity 66.54% 64.99% 61.13% 58.72% 53.29%
Equity and Liability 100% 100% 100% 100% 100%

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  Assets

Particulars 2015 2016 2017 2018

Non-current Assets:
Property, plant and
equipment 68.42% 72.29% 76.3% 83.1%
Investment 31.58% 27.71% 23.7% 16.79%
Total Non-current
Assets 100% 100% 100% 100%

Current Assets:
Trade and other
receivables 39.20% 31.27% 46.73% 31.78%
Inventories 50.75% 62.52% 46.82% 63.18%
Advance, deposits and
pre-payments 3.45% 3.37% 2.96% 2.6%
Cash and cash
equivalents 6.60% 2.84% 3.49% 2.44%
Total Current Assets 100% 100% 100% 100%

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  Liabilities

Particulars 2015 2016 2017 2018

Non-current
Liabilities:
Deferred tax liabilities 23.63% 27.3% 31.72% 40.32%
Term Loan 76.37% 72.7% 68.28% 59.68%
Total Non-current
Liabilities 100% 100% 100% 100%

Current Liabilities:
Short Term Loan 31.48% 62.19% 81.38% 72.77%
Term Loan Current
Maturity 13.42% 12.16% 14.19% 8.22%
Trade creditors 50.63% 20.25% 1.72% 16.45%
Liabilities against
capital machinery 1.81%
Income tax provision 1.63% 1.12% 0.47% 0.09%
Payable and accruals 2.84% 2.47% 2.24% 2.47%
Total Current
Liabilities 100% 100% 100% 100%

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 Ratio Analysis
Particulars 2018 2017 2016 2015

Debt to Equity Ratio (%) 0.87% 0.70% 0.61% 0.55%

Current Ratio (%) 1.28% 1.29% 1.33% 1.54%
Gross Profit/Sales (%) 10.39% 9.51% 9.04% 10.59%
Operating Profit/sales (%) 4.62% 3.87% 2.68% 5.19%
Profit after Tax/Sales (%) 5.41% 5.29% 5.58% 6.96%
Return on Asset (%) 3.16% 3.35% 3.20% 4.70%
Return on Equity (%) 5.29% 5.27% 4.70% 6.61%
Acid Test (%) 62% 104% 121% 150%
Account Receivables 2.76 3.49 3.36 3.27
Turnover/Year
Inventory Turnover/Year 0.30 2.42 2.23 1.67

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