Okay, I can help you with that!

This response will provide the meaning and importance of ratio

analysis, followed by the calculation and significance of eight selected ratios for Marico
Bangladesh Limited for the years ended March 31, 2024, and March 31, 2023, based on the
financial statements you provided.

Ratio Analysis for Marico Bangladesh Limited

Here's a breakdown to help with your project:

Meaning of Ratio Analysis

Ratio analysis is a quantitative method of gaining insights into a company's liquidity, operational
efficiency, solvency, and profitability by studying its financial statements like the balance sheet
and income statement. It involves calculating financial ratios by comparing two or more financial
data points. These ratios help in simplifying complex financial information into understandable
numbers, enabling easier comparison and interpretation of a company's performance over time
and against its peers.

Importance/Purpose/Utility of Accounting Ratios

Accounting ratios are vital tools for financial analysis and serve multiple purposes:
1.​ Assessing Performance: Ratios help in evaluating the company's operational and
financial performance. For instance, profitability ratios indicate how well a company is
generating profits from its operations, while efficiency ratios show how effectively it is
utilizing its assets.
2.​ Facilitating Comparison: Ratios allow for intra-firm comparison (comparing current
performance with past periods) and inter-firm comparison (comparing performance
against other companies in the same industry). This helps in identifying strengths,
weaknesses, and areas for improvement.
3.​ Aiding in Decision Making: Various stakeholders use ratio analysis for decision-making.
Investors use it to assess the financial health and potential returns before investing.
Creditors use it to evaluate creditworthiness before lending. Management uses it for
internal control, planning, and making strategic decisions.
4.​ Simplifying Financial Statements: Ratios summarize complex accounting data into
simple, concise figures. This makes financial information more understandable and
usable for individuals who may not have a deep understanding of accounting intricacies.

Financial Ratios for Marico Bangladesh Limited

Below are the calculations and significance for eight selected financial ratios for Marico
Bangladesh Limited, covering two ratios from each category: Liquidity, Solvency, Profitability,
and Activity.
(Please note: As per your instructions, you would typically place the formula, calculation, and
significance on the right-side page and a diagram of the ratio on the left-side page for your
project. I will provide the textual content for the right-side page for each ratio.)
1. Current Ratio (Liquidity Ratio)

●​ Formula: Current Assets / Current Liabilities

●​ Purpose: This ratio measures a company's ability to meet its short-term obligations (due
within one year) with its short-term assets. A higher ratio generally indicates better
short-term financial health.
●​ Calculation of Components:
Component 2024 (BDT) 2023 (BDT)
Total Current Assets 15,014,016,359 9,970,367,693
Total Current Liabilities 8,521,132,170 7,976,578,619
●​ Calculation of Ratio:
○​ For the year ended March 31, 2024: \text{Current Ratio} =
\frac{15,014,016,359}{8,521,132,170} = 1.76
○​ For the year ended March 31, 2023: \text{Current Ratio} =
\frac{9,970,367,693}{7,976,578,619} = 1.25
●​ Significance: Marico Bangladesh Limited's current ratio improved from 1.25 in 2023 to
1.76 in 2024. This indicates an enhanced ability to cover its short-term liabilities with its
short-term assets in 2024 compared to 2023. A ratio above 1 is generally considered
acceptable, suggesting the company has more current assets than current liabilities. The
increase shows improved liquidity.

2. Liquid Ratio (Acid-Test or Quick Ratio) (Liquidity Ratio)

●​ Formula: (Current Assets - Inventories - Prepaid Expenses) / Current Liabilities

(Assuming "Advances, deposits and prepayments (Current)" are considered prepaid
expenses for this calculation)
●​ Purpose: This ratio is a more stringent measure of liquidity than the current ratio. It
assesses the company's ability to meet its immediate liabilities using its most liquid assets
(quick assets), excluding less liquid items like inventories and prepaid expenses.
●​ Calculation of Components:
Component 2024 (BDT) 2023 (BDT)
Total Current Assets 15,014,016,359 9,970,367,693
Inventories 3,351,467,544 2,528,550,222
Advances, deposits & 756,713,830 1,028,621,890
prepayments (Current)
Quick Assets 10,905,834,985 6,413,195,581
Total Current Liabilities 8,521,132,170 7,976,578,619
(Quick Assets = Total Current
Assets - Inventories -
Advances, deposits &
prepayments (Current))
●​ Calculation of Ratio:
○​ For the year ended March 31, 2024: \text{Liquid Ratio} = \frac{15,014,016,359 -
3,351,467,544 - 756,713,830}{8,521,132,170} =
\frac{10,905,834,985}{8,521,132,170} = 1.28
○​ For the year ended March 31, 2023: \text{Liquid Ratio} = \frac{9,970,367,693 -
2,528,550,222 - 1,028,621,890}{7,976,578,619} =
 \frac{6,413,195,581}{7,976,578,619} = 0.80
●​ Significance: The liquid ratio for Marico Bangladesh Limited increased significantly from
0.80 in 2023 to 1.28 in 2024. A liquid ratio of 1:1 is often considered ideal. The
improvement to 1.28 suggests a stronger ability to meet immediate obligations without
relying on the sale of inventory. This reflects a healthier short-term solvency position in
2024.

3. Debt Equity Ratio (Solvency Ratio)

●​ Formula: Total Liabilities / Total Equity

●​ Purpose: This ratio indicates the relative proportion of financing provided by creditors
(debt) versus shareholders (equity). It measures the company's financial leverage and
long-term solvency. A lower ratio generally suggests lower risk.
●​ Calculation of Components:
Component 2024 (BDT) 2023 (BDT)
Total Liabilities 8,696,742,468 8,049,659,448
Total Equity 8,210,067,522 3,586,315,643
●​ Calculation of Ratio:
○​ For the year ended March 31, 2024: \text{Debt Equity Ratio} =
\frac{8,696,742,468}{8,210,067,522} = 1.06
○​ For the year ended March 31, 2023: \text{Debt Equity Ratio} =
\frac{8,049,659,448}{3,586,315,643} = 2.24
●​ Significance: Marico Bangladesh Limited's debt-equity ratio decreased substantially from
2.24 in 2023 to 1.06 in 2024. This indicates a significant reduction in the company's
reliance on debt financing relative to equity. The lower ratio in 2024 suggests improved
long-term financial stability and a stronger equity position, reducing the risk for creditors.
This change is largely due to a substantial increase in total equity in 2024, primarily from
higher retained earnings.

4. Debt to Capital Employed Ratio (Solvency Ratio)

●​ Formula: Long-Term Liabilities / (Total Equity + Long-Term Liabilities) (Here, Capital

Employed = Total Equity + Long-Term Liabilities)
●​ Purpose: This ratio measures the proportion of a company's long-term capital (equity plus
long-term debt) that is financed by long-term debt. It provides insight into the company's
long-term financial leverage and risk.
●​ Calculation of Components:
Component 2024 (BDT) 2023 (BDT)
Total Non-Current Liabilities 175,610,298 73,080,829
(Long-Term Liabilities)
Total Equity 8,210,067,522 3,586,315,643
Capital Employed (Equity + 8,385,677,820 3,659,396,472
LTL)
●​ Calculation of Ratio:
○​ For the year ended March 31, 2024: \text{Debt to Capital Employed Ratio} =
\frac{175,610,298}{8,210,067,522 + 175,610,298} =
\frac{175,610,298}{8,385,677,820} = 0.021
 ○​ For the year ended March 31, 2023: \text{Debt to Capital Employed Ratio} =
\frac{73,080,829}{3,586,315,643 + 73,080,829} = \frac{73,080,829}{3,659,396,472}
= 0.020
●​ Significance: The debt to capital employed ratio remained very low and stable, at 0.020
in 2023 and 0.021 in 2024. This indicates that only a very small portion of the company's
long-term capital base is financed by long-term debt. Such a low ratio suggests a
conservative financial structure with minimal reliance on long-term borrowings, implying
strong long-term solvency and low financial risk from long-term debt.

5. Net Profit Ratio (Profitability Ratio)

●​ Formula: (Net Profit After Tax / Revenue) * 100

●​ Purpose: This ratio measures the percentage of revenue that remains as net profit after
all operating expenses, interest, and taxes have been deducted. It reflects the company's
overall profitability from its operations.
●​ Calculation of Components:
Component 2024 (BDT) 2023 (BDT)
Net Profit After Tax 4,606,317,831 3,872,412,009
Revenue 14,524,182,830 14,135,741,140
●​ Calculation of Ratio:
○​ For the year ended March 31, 2024: \text{Net Profit Ratio} = \left(
\frac{4,606,317,831}{14,524,182,830} \right) * 100 = 31.71\%
○​ For the year ended March 31, 2023: \text{Net Profit Ratio} = \left(
\frac{3,872,412,009}{14,135,741,140} \right) * 100 = 27.39\%
●​ Significance: Marico Bangladesh Limited's net profit ratio improved from 27.39% in 2023
to 31.71% in 2024. This indicates that the company was more efficient in converting its
revenue into actual profit in 2024 compared to the previous year. The increase suggests
better cost management, improved operational efficiency, or favorable market conditions
leading to higher profitability per unit of revenue.

6. Return on Investment (using Return on Assets - ROA) (Profitability Ratio)

●​ Formula: (Net Profit After Tax / Total Assets) * 100

●​ Purpose: This ratio measures how efficiently a company is using its assets to generate
profit. A higher ROA indicates more efficient asset utilization.
●​ Calculation of Components:
Component 2024 (BDT) 2023 (BDT)
Net Profit After Tax 4,606,317,831 3,872,412,009
Total Assets 16,906,809,990 11,635,975,091
●​ Calculation of Ratio:
○​ For the year ended March 31, 2024: \text{Return on Assets} = \left(
\frac{4,606,317,831}{16,906,809,990} \right) * 100 = 27.24\%
○​ For the year ended March 31, 2023: \text{Return on Assets} = \left(
\frac{3,872,412,009}{11,635,975,091} \right) * 100 = 33.28\%
●​ Significance: The Return on Assets for Marico Bangladesh Limited decreased from
33.28% in 2023 to 27.24% in 2024. While the net profit increased in 2024, total assets
increased more significantly. This suggests that the efficiency in utilizing assets to
 generate profit slightly declined in 2024 compared to 2023. A higher increase in the asset
base (denominator) than in net profit (numerator) led to this reduction. However, an ROA
of 27.24% still indicates a strong ability to generate profit from its assets.

7. Inventory Turnover Ratio (Activity Ratio)

●​ Formula: Cost of Sales / Average Inventory (Average Inventory = (Opening Inventory +

Closing Inventory) / 2)
●​ Purpose: This ratio measures how many times a company sells and replaces its
inventory over a period. A higher ratio generally indicates efficient inventory management
and strong sales.
●​ Calculation of Components:
Component 2024 (BDT) 2023 (BDT)
Cost of Sales 6,099,250,601 6,811,203,460
Opening Inventory (Closing of 2,528,550,222 2,332,427,872
prior year)
Closing Inventory 3,351,467,544 2,528,550,222
Average Inventory 2,940,008,883 2,430,489,047
●​ Calculation of Ratio:
○​ For the year ended March 31, 2024: \text{Average Inventory} =
\frac{2,528,550,222 + 3,351,467,544}{2} = 2,940,008,883 \text{Inventory Turnover
Ratio} = \frac{6,099,250,601}{2,940,008,883} = 2.07 \text{ times}
○​ For the year ended March 31, 2023: \text{Average Inventory} =
\frac{2,332,427,872 + 2,528,550,222}{2} = 2,430,489,047 \text{Inventory Turnover
Ratio} = \frac{6,811,203,460}{2,430,489,047} = 2.80 \text{ times}
●​ Significance: Marico Bangladesh Limited's inventory turnover ratio decreased from 2.80
times in 2023 to 2.07 times in 2024. This indicates that the company sold and replenished
its inventory less frequently in 2024 compared to 2023. A lower turnover might suggest
slower sales or an increase in inventory holdings. While the cost of sales decreased in
2024, average inventory increased, contributing to the lower turnover.

8. Fixed Assets Turnover Ratio (Activity Ratio)

●​ Formula: Revenue / Average Net Fixed Assets (Average Net Fixed Assets = (Opening
Net Fixed Assets + Closing Net Fixed Assets) / 2; using Property, Plant & Equipment
(Net) as Net Fixed Assets)
●​ Purpose: This ratio measures how efficiently a company is utilizing its fixed assets (like
property, plant, and equipment) to generate revenue. A higher ratio implies better
utilization of fixed assets.
●​ Calculation of Components:
Component 2024 (BDT) 2023 (BDT)
Revenue 14,524,182,830 14,135,741,140
Opening Net Fixed Assets 1,304,594,243 981,096,486
(PPE - Closing of prior year)
Closing Net Fixed Assets 1,414,648,907 1,304,594,243
(PPE)
Average Net Fixed Assets 1,359,621,575 1,142,845,364.5
 ●​ Calculation of Ratio:
○​ For the year ended March 31, 2024: \text{Average Net Fixed Assets} =
\frac{1,304,594,243 + 1,414,648,907}{2} = 1,359,621,575 \text{Fixed Assets
Turnover Ratio} = \frac{14,524,182,830}{1,359,621,575} = 10.68 \text{ times}
○​ For the year ended March 31, 2023: \text{Average Net Fixed Assets} =
\frac{981,096,486 + 1,304,594,243}{2} = 1,142,845,364.5 \text{Fixed Assets
Turnover Ratio} = \frac{14,135,741,140}{1,142,845,364.5} = 12.37 \text{ times}
●​ Significance: The fixed assets turnover ratio for Marico Bangladesh Limited decreased
from 12.37 times in 2023 to 10.68 times in 2024. This suggests that the company
generated less revenue for every unit of investment in fixed assets in 2024 compared to
2023. While revenue increased slightly in 2024, the average investment in net fixed
assets also increased, leading to a lower turnover. A lower ratio might indicate
underutilization of fixed assets or recent investments in fixed assets that are yet to
generate optimal revenue.
For the diagrammatic representation (graphs) for each ratio on the left-side page of your project,
you can consider using simple bar graphs comparing the two years (2024 vs. 2023) for each
ratio. This will provide a clear visual comparison of the performance trends.
Okay, here is the Comparative Statement of Ratios for Marico Bangladesh Limited:

Comparative Statement of Ratios: Marico Bangladesh Limited

S.No. Name of Ratio 2022-23 2023-24
1. Current Ratio 1.25 1.76
2. Liquid Ratio (Acid-Test 0.80 1.28
Ratio)
3. Debt Equity Ratio 2.24 1.06
4. Debt to Capital 0.020 0.021
Employed Ratio
5. Net Profit Ratio 27.39% 31.71%
6. Return on Investment 33.28% 27.24%
(ROA)
7. Inventory Turnover 2.80 times 2.07 times
Ratio
8. Fixed Assets Turnover 12.37 times 10.68 times
Ratio
Note on Data Sources for Derived Ratios:
●​ The ratios for 2022-23 are derived from data presented in the financial statements for the
year ended March 31, 2023 (primarily from Marico 22 23.pdf, specifically pages showing
Statement of Financial Position and Statement of Profit or Loss).
●​ The ratios for 2023-24 are derived from data presented in the financial statements for the
year ended March 31, 2024 (primarily from Marico 23 24.pdf, specifically pages showing
Statement of Financial Position and Statement of Profit or Loss).
●​ Ratios requiring average balances for 2023-24 (Inventory Turnover, Fixed Assets
Turnover) use closing balances from March 31, 2023 as opening balances for the
2023-24 period.
●​ Ratios requiring average balances for 2022-23 (Inventory Turnover, Fixed Assets
Turnover) use closing balances from March 31, 2022 as opening balances for the
2022-23 period.
Okay, here's a shorter version of the analysis report for Marico Bangladesh Limited:

Concise Analysis Report: Marico Bangladesh Limited (2022-23 vs.

2023-24)
This report summarizes the financial performance of Marico Bangladesh Limited by comparing
key ratios for 2022-23 (ended March 31, 2023) and 2023-24 (ended March 31, 2024).
1. Liquidity Marico's liquidity position significantly strengthened in 2023-24.
●​ The Current Ratio improved from 1.25 to 1.76, indicating a better ability to cover
short-term debts.
●​ The Liquid Ratio rose from 0.80 to 1.28, showing enhanced capacity to meet immediate
obligations without relying on inventory sales.
2. Solvency The company's long-term solvency also saw considerable improvement.
●​ The Debt Equity Ratio decreased substantially from 2.24 to 1.06, reflecting a much lower
reliance on debt and a stronger equity base.
●​ The Debt to Capital Employed Ratio remained very low and stable (0.020 to 0.021),
underscoring a conservative approach to long-term debt.
3. Profitability Profitability trends were mixed.
●​ The Net Profit Ratio improved from 27.39% to 31.71%, indicating better efficiency in
converting revenue into net profit.
●​ However, Return on Assets (ROA) declined from 33.28% to 27.24%, as the asset base
grew more rapidly than net profit.
4. Activity/Efficiency Operational efficiency in asset management saw a decline.
●​ Inventory Turnover Ratio fell from 2.80 to 2.07 times, suggesting slower inventory
movement.
●​ Fixed Assets Turnover Ratio decreased from 12.37 to 10.68 times, indicating less
revenue generated per unit of fixed assets.
Summary and Conclusion In 2023-24, Marico Bangladesh Limited demonstrated enhanced
financial health, particularly in its liquidity and solvency. The net profit margin also improved.
However, declining efficiency in inventory and fixed asset management, along with a lower
Return on Assets, are areas requiring attention to ensure sustained overall performance.