BRITISH AMERICAN TOBACCO

BANGLADESH COMPANY LIMITED

RATIO ANALYSIS
FOR THE YEAR OF 2005, 2006 & 2007

(A) Short term solvency:

1. Current ratio
Current assets
Current liabilities

2005
2,617,226
3,551,899
= 0.74 times

2006
3,442,595
3,934,134
= 0.88 times

2007
4,341,659
4,020,005
= 1.08 times

Current ratio is 0.74 times in 2005 which increases to 0.88 times in 2006 and goes to 1.08
times in 2007. This data shows the increasing trend, which is good for the company.

2. Quick / Acid test ratio

Current assets-Inventory
Current liabilities

2005
2,617,2261,85,1176
3551899
= 0.22 times

2006
3,442,5952,105,538
3,934,134
= 0.34 times

2007
4,341,6592,244,977
4,020,005
= 0.52 times

Quick / Acid test ratio is 0.22 times in 2005 which rises to 0.34 times in 2006 and goes to
0.52 times in 2007. This data shows the increasing trend, which is good for the company.

3. Cash ratio
Cash
Current liabilities

2005
244,718
3,551,899
= 0.07 times

2006
606,135
3,934,134
= 0.15 times

2007
917,703
4,020,005
= 0.23

Cash ratio is 0.07 times in 2005 which increases to 0.15 times in 2006 and goes to 0.23
times in 2007. This data shows the increasing trend, which is good for the company.

4. Interval measure
Current assets
Average daily operating
costs

2005
2,617,226
23772.85
= 110 days

2006
3,442,595
27,982
= 123.03 days

2007
4,341,659
29127.3
= 149 days

Interval measure is 110 days in 2005 which increases to 123.03 days in 2006 and goes to
149 days in 2007. This data shows the increasing trend, which is good for the company.

(B) Long term solvency:

1. Total debt ratio

Total assets-Total equity
Total assets

2005
6,935,0832,542,533
6935083
= 0.63 times

2006
7,548,0182,724,116
7,548,018
= 0.64 times

2007
4,755,047
8,039,823
= 0.59 times

Total debt ratio is 0.63 time in 2005 which is rises to 0.64 times in 2006 and goes to 0.59
times in 2007. This data shows the fluctuating trend, which is average for the company.

2. Long term debt ratio

Long term debt
Long term debt + Total
equity

2005
840,651
840,651+2,542,533
= 0.25 times

2006
889,768
889,768+2,724,116
= 0.25 times

2007
735,042
735,042+3,284,776
= 0.12 times

Long term debt ratio is 0.25 times in 2005 which remains to 0.25 times in 2006 and goes
to 0.12 times in 2007. This data shows the decreasing trend, which is good for the
company.

3. Time interest earned ratio

2005
583,788
133,045
= 4.39 times

EBIT
Interest

2006
811,917
160,504
= 5.06 times

2007
1,301,996
45,573
= 28.57 times

Time interest earned ratio is 4.39 times in 2005 which increases to 5.06 times in 2006 and
goes to 28.57 times in 2007. This data shows the increasing trend, which is good for the
company.

4. Cash coverage ratio

EBIT + Depreciation
Interest

2005
583,788+41,864
133,045
= 4.70 times

2006
811,917+82,589
160,504
= 5.57 times

2007
1,301,996+117,795
45,573
= 31.15 times

Cash coverage ratio is 4.70 times in 2005 which increases to 5.57 times in 2006 and goes
to 31.15 times in 2007. This data shows the increasing trend, which is good for the
company.

(C) Asset management/turnover:

1. Inventory turnover
Cost of goods sold
Inventory

2005
8,676,726
1,851,176
= 4.69 times

2006
10,213,464
2,105,538
= 4.85 times

2007
8,388,786+2,242,677
2,242,977
= 4.74 times

Inventory turnover is 4.69 times in 2005 which increases to 4.85 times in 2006 and goes
to 4.74 times in 2007. This data shows the fluctuating trend, which is average for the
company.

2. Days sales in inventory

2005
365
4.69
= 77.83 days

365 days
Inventory turnover

2006
365
4.85
= 75.26 days

2007
365
4.74
= 77 days

Days sale in inventory is 77.83 days in 2005 which decreases to 75.26 days in 2006 and
goes to 77 days in 2007. This data shows the fluctuating trend, which is average for the
company.

3. Receivables turnover
Sales
Accounts receivables

2005
29,508,675
402,443
= 73.32 times

2006
34,994,149
547,728
= 36.89 times

2007
37,869,293
288,084
= 131.45 times

Receivables turnover is 73.32 times in 2005 which decreases to 36.89 days in 2006 and
goes to 131.45 times in 2007. This data shows the fluctuating trend, which is average for
the company.

4. Days sales in receivable

365 days
Receivables turnover

2005
365
73.32
= 4.98 days

2006
365
36.89
= 9.89 days

2007
365
131.45
= 2.78 days

Days sale in receivables is 4.98 days in 2005 which increases to 9.89 days in 2006 and
goes to 2.78 days in 2007. This data shows the fluctuating trend, which is average for the
company.

5. NWC turnover

Sales
NWC

2005
29,508,675
934,673
= 31.57 times

2006
34,994,149
491,539
= 71.19 times

2007
37,869,293
321,654
= 117.73 times

NWC turnover is 31.57 times in 2005 which increases to 71.19 times in 2006 and goes to
117.73 times in 2007. This data shows the increasing trend, which is good for the
company.

6. Fixed asset turnover

Sales
Net fixed asset

2005
29,508,675
4,317,857
= 6.83 times

2006
34,994,149
4,105,423
= 8.52 times

2007
37,869,293
3,698,164
= 10.24 times

Fixed asset turnover is 6.83 times in 2005 which increases to 8.52 times in 2006 and goes
to 10.24 times in 2007. This data shows the increasing trend, which is good for the
company.

7. Total asset turnover

Sales
Total assets

2005
29,508,675
6,935,083
= 4.25 times

2006
34,994,149
4,929,911
= 3.92 times

2007
37,869,293
8,039,823
= 4.71 times

Total asset turnover is 4.25 times in 2005 which decreases to 3.92 times in 2006 and goes
to 4.71 times in 2007. This data shows the fluctuating trend, which is average for the
company.

(D) Profitability measures/ratios:

1. Profit margin
Net income
Sales

2005
232,882
29,508,675
=0.0079*100
=0.79%

2006
361,583
34,994,149
= 0.01*100
= 1%

2007
798,971
37,869,293
= 0.021*100
= 2.1%

Profit margin is 0.79% in 2005 which increases to 1% in 2006 and goes to 2.1% in 2007.
This data shows the increasing trend, which is good for the company.

2. Return on Asset (ROA)

Net income
Total assets

2005
232,882
6,935,083
= 0.03
= 3%

2006
361,583
8,929,911
= 0.04
= 4%

2007
798,971
8,039,823
= 0.099
= 9.9%

Return on asset (ROA) is 3% in 2005 which increases to 4% in 2006 and goes to 9.9% in
2007. This data shows the increasing trend, which is good for the company.

3. Return on Equity (ROE)

Net income
Total equity

2005
232,882
2,542,533
= 0.09
= 9%

2006
361,583
2,724,116
= 0.13
= 13%

2007
798,971
3,284,776
= 0.243
= 24.3%

Return on equity (ROE) is 9% in 2005 which increases to 13% in 2006 and goes to
24.3% in 2007. This data shows the increasing trend, which is good for the company

(E) Market value ratios:

1. Earning Per Share (EPS)

Net income
Shares outstanding

2005
232,882
60,000
= 3.88 times

2006
361,583
60,000
= 6.03 times

2007
798,971
60,000
= 13.32 times

Earning per Share (EPS) is 3.88 times in 2005 which increases to 6.03 times in 2006 and
goes to 13.32 times in 2007. This data shows the increasing trend, which is good for the
company.

2. Price Earnings Ratio

2005

2006

Price Per Share

Earning Per Share

2007
193.70
13.32
= 14.54 times

In 2007, the companys shares are selling 14.54 times of earnings.

3. Market-to-book ratio
2005

2006

Market value per share

Book value per share

In 2007, the companys shares are selling 19.37 times than its book value.

2007
193.70
10
= 19.37 times