Md.

Ziaul Haque
ID :15-01-52-017
Sumit Chakraborty
ID :15-01-51-035
MBA:702

A ASSIGNMENT ON
Analysis of the financial statements
of ACI Limited

AA

Ahsanullah University of Science and Technology

Assignment Topic
On
Analysis of the financial statements of ACI Limited.

Submitted To:
Dr. Mohammad Tareq
Assistant Professor
Department of Accounting Information System
University of Dhaka

Submitted By:
NAME

ID

Md.Ziaul Haque

15-01-52-017

Sumit Chakraborty

15-01-51-035

Introduction:
ACI's mission is to achieve business excellence through quality by
understanding, accepting, meeting and exceeding customer expectations.
ACI follows International Standards on Quality Management System to ensure
consistent quality of products and services to achieve customer satisfaction.
ACI also meets all national regulatory requirements relating to its current
businesses and ensures that current Good Manufacturing Practices (cGMP) as
recommended by World Health Organization is followed properly. ACI has
been accepted as a Founding Member of the Community of Global Growth
Companies by the World Economic Forum which is the most prestigious
business networking organization.

Mission:
ACIs mission is to enrich the quality of life of people through responsible
application of knowledge, skills and technology. ACI is committed to the
pursuit of excellence through world-class products, innovative processes and
empowered employees to provide the highest level of satisfaction to its
customers.

Vision:
To realize the mission ACI will:

Endeavor to attain a position of leadership in each category of its businesses.

Attain a high level of productivity in all its operations through effective and efficient use
of resources, adoption of appropriate technology and alignment with our core
competencies.

Develop its employees by encouraging empowerment and rewarding innovation.

Promote an environment for learning and personal growth of its employees.

Provide products and services of high and consistent quality, ensuring value for money to
its customers.

Encourage and assist in the qualitative improvement of the services of its suppliers and
distributors.

Establish harmonious relationship with the community and promote greater

environmental responsibility within its sphere of influence.

Values:
1.Quality.
2. Customer focus.
3.Fairness.
4.Transparency.
5.Continuous improvement.
6.Innovation.

Business Units:
1.Pharmaceuticals.
ACI carries the legacy of ICI- world renowned British Multinational in providing the people of
Bangladesh with quality medicines and healthcare products. Its state-of-the art pharmaceutical
plant represents Bangladesh's quest for a truly world class manufacturing facility. ACI's rich
heritage leads to innovative and higher value added formulations.
The comprehensive product range of ACI pharmaceuticals include products from all major
therapeutic classes and in various dosage forms like tablet, capsule, dry powder, liquid, cream,
gel, ointment, ophthalmic and injectable. ACI Pharma also has state of the art plant on Novel
Drug Delivery System (NDDS). It produces world class Modified Release drug and medicine to
cater the requirement of pharmaceutical manufacturer of domestic and international market.
It exports high quality pharmaceuticals to a good number of countries of Asia, Africa & South
America.

2 .Consumer Brands and Commodity Products.

The Consumer Brands Division boasts in having an unequivocal presence in consumers' heart
with the market leading brands like ACI Aerosol, ACI Mosquito Coil, Savlon. These are the
persistent performers in keeping the household clean and free from germs and harmful insects.
The necessity of pure food in the minds of Bangladeshi consumers especially in the commodity
food business has pushed ACI to fill up the market gap by producing commodity products such
as Salt, Flour and Spices. Now the customers of Bangladesh are ensured with 100% pure Salt,
Spices products and Wheat products under the brand name of "ACI Pure".
ACI also represents the world renowned product range of Colgate, Nivea, Tetley, Godrej &
Dabur in Bangladesh through distribution and forming joint ventures.

3.Agribusiness.
ACI Agribusiness is the largest integrator in Bangladesh in Agriculture, Livestock and Fisheries
and deals with Crop Protection, Seed, Fertilizer, Agrimachineries, and Animal Health products.
These businesses have glorified presence in Bangladesh.
CC & PH supplies crop protection chemicals, Seed supplies Hybrid Rice, vegetable and Maize
seeds, Fertilizer Supplies Micronutrient and Foiler fertilizer, Agrimachineries supplies Tractors,
Power Tiller and Harvester and Animal Health supplies high quality Nutritional, Veterinary and
Poultry medicines and vaccines.
ACI Agribusiness is having strong partnership with national and international R & D companies,
universities and research institutions. Before introducing any product, it is elaborately tested in

the laboratory and farmers field.

ACI provides solution to the farmers through a large team of scientists & skilled professionals.
1.
Ratio

2012

2013

2014

ROE

11.06%

14.26%

15.53%

ROA

4.48%

5.50%

6.29%

Gross Profit Margin

37%

39.85%

41.97%

Net Profit Margin

5.63%

7.15%

7.71%

Current Ratio

1.17

1.17

1.18

Acid Test Ratio

0.87

0.85

0.83

Asset Turnover Ratio

0.79

0.77

0.81

Inventory Turnover (Days)

132.97 days

140.79 days

Debt to Equity

116.85
days
109%

100%

96%

Equity Ratio

2.60

2.58

2.35

EPS

6.26 Tk

7.29 Tk

7.54 Tk

1.60 Tk

1.37 Tk

1.32 Tk

PER

2(a). Advance Chemical Industries (ACI).

(i). Profitability Analysis.
1. ROE : Return on Equity is higher the better. In ACI company ROE is
gradually improvement 2012 to 2014. 2012 ROE is 11.06%,2013 ROE is
14.26%,2014 ROE is 15.53%.
2. ROA : Return on Asset is higher the better.In ACI company ROA is
gradually improvement 2012 to 2014.2012 ROA is 4.48%,2013 is
5.50%,2014 is 6.29%.
3. Gross profit Margin : The higher the better.In ACI company Gross Profit
Margin is improving 2012 to 2014. 2012 Gross Profit is 37%,2013 is
39.85%,2014 is 41.97%.
4. Net Profit Margin : The higher the better. In ACI company Net profit
Margin is improving 2012 to 2014. 2012 Net Profit Margin is 5.63%,2013 is
7.15%,2014 is 7.71%.
(ii). Liquidity Ratio.
1. Current Ratio : The standard is 1.5. Higher than this mean`s more
liquidity for the company but indicate`s unprofitable investment of current
asset lower than this indicates liquidity problem.In ACI company current
Ratio is almost constant in 2012 to 2014. 2012 current ratio is 1.17,2013 is
1.17,2014 is 1.18.
2. Acid Test Ratio : The standard is 0.8. Higher than this mean`s more
liquidity for the company but indicate`s unprofitable investment of current
asset,lower than this indicate`s liquidity problem. In ACI company Acid test
ratio is above the standard. So, ACI company Acid Test ratio is much better
than current ratio. ACI company Acid Test ratio is almost same in 2012 to
2014. 2012 Acid Test ratio is 0.87,2013 is 0.85,2014 is 0.83.
(iii). Efficiency Ratio.
1.Asset Turnover Ratio : Asset turnover is higher the better. In analysis of
asset turnover ACI company decide how many time`s of sale of total asset. In
ACI company asset turnover ratio is almost same in 2012 to 2014. In 2012
Asset Turnover is 0.79,2013 is 0.77,2014 is 0.81.
2. Day`s Inventory : Day`s inventory is lower the better.In analysis of day`s
inventory ACI company decide how many day`s company sell the inventory.
In ACI company day`s inventory ratio is gradually improving year to year in

2012 to 2014. In 2012 day`s inventory is 116.85 day`s,2013 is 132.97

day`s,2014 is 140.79 day`s.
(iv). Solvency/Gearing Ratio.
1.Debt to Equity : The standard is 100%.Higher than this benchmark
indicate higher dependence of debt.Too much high may indicate financial
risk.In ACI company debt to equity ratio is flactuating 2012 to 2014. In 2012
debt to equity ratio is 109%,2013 is 100% and 2014 is 96%.
2. Equity Ratio : The standard is 2.Higher than this benchmark indicate
higher dependence of debt.Too much high may indicate financial risk.In ACI
company Equity ratio is too much high in benchmark level.In 2012 Equity
Ratio is 2.60,2013 is 2.58 and 2014 is 2.35.
2(b). Company X.
(i). Profitability Analysis.
1. Gross Profit Margin : The higer the better.In company X Gross Profit
margin is flactuating 2012 to 2014.2012 Gross Profit is 83.3%,2013 is
78.1%,2014 is 85%.
2. Net Profit Margin : The higher the better. In company X Net Profit
Margin is flactuating 2012 to 2014.2012 Net profit is 29.5%,2013 is
28.8%,2014 is 30%.
(ii). Liquidity Ratio.
1.Current Ratio : The standard is 1.5. Higher this mean`s more liquidity for
the company but indicate`s unprofitable investment of current asset lower
than this indicate`s liquidity problem. In Company X current ratio is upper
the standard. So,Company X have some unprofitable investment of current
asset.Company X Current ratio gradually improving year to year.2012
Current Ratio is 4.1,2013 Current Ratio is 4.3,2014 Current Ratio is 4.4.
2. Acid Test Ratio : The standard is 0.8.Higher than this mean`s more
liquidity for the company but indicate`s unprofitable investment of current
asset,lower than this indicate`s liquidity problem. In company X Acid Test
ratio is above the standard.2012 Acid test ratio is 3.3,2013 is 2.6,2014 is 3.0.
(iii). Efficiency Ratio .
1.Asset Turnover Ratio : Asset Turnover is higher the better. In analysis of
Asset Turnover Company X decide how many time`s of sale of total asset. In
company X Asset Turnover ratio is flactuating 2012 to 2014.In 2012 Asset
Turnover is 3.5,2013 Asset turnover is 3.3,2014 Asset Turnover is 3.7.

2. Day`s Inventory : Day`s inventory is lower the better.In company X

day`s inventory ratio is gradually improving year to year in 2012 to 2014.In
2012 day`s inventory is 36 day`s,2013 day`s inventory is 43 day`s,2014
day`s inventoty is 45 day`s.
(iv). Solvency/Graring Ratio.
1.Debt to Equity : In company X debt to equity ratio is below the
standard.In 2012 debt to equity ratio is 95%,2013 is 89%,2014 is 92%.
2. Equity Ratio : In company X equity ratio is too much high in benchmark
level.In 2012 equity ratio is 2.5,2013 is 2.6 and 2014 is 2.4.

2(C). Dupont Analysis. ACI Company.

Show the link among profitabity,asset efficiency and capital structure of an
organization.
1. ROE=Net Profit Margin X Asset Turnover X Equity Ratio.
=Net profit/Sale`s X Sale`s/Total Asset X Total Asset/Equity
=Net Profit/Average common shareholder`s Equity.
ROE ACI(2012)=54,51,15,873/(5,08,12,6,160+4,76,74,97,560)/2 X100
=11.06%
ROE ACI(2013)=76,41,87,906/(5,63,72,52,251+5,08,12,86,160)/2 X100
=14.26%
ROE ACI(2014)=950713609/(660668555402+5637252251)/2 X100
=15.53%.
2. ROA=Net profit Margin X Asset Turnover.
=Net Profit/Sale`s X Sale`s/Total Asset
=Net Profit/Total Asset
ROA ACI(2012) =545115873/(13206467006+11096971158)/2 X100
=4.48%.
ROA ACI (2013) = 764187906/(14557255461+13206467006)/2 X100
=5.50%.
ROA ACI (2014) =950713609/(15526192783+14693912974)/2 X100

=6.29%.

3.As a short-term creditor for either ACI or company X.We providing credit
to ACI limited.When providing short-term credit we will analysis current ratio
and Acid test ratio.Here ACI company current ration is 2012-1.17,20131.17,2014-1.18 and Acid test is 2012-0.87,2013-0.85,2014-0.83.Company X
current ratio is 2012-4.1,2013-4.3,2014-4.4 and Acid test ratio is 20123.3,2012-3.3,2014-3.0.standard current ratio is 1.5.ACI company current ratio
is nearest to standard but company-X current ration is upper the
standard.Higher than this mean`s more liquidity for the company but
indicate`s unprofitable investment of current asset.Standard Acid test ratio is
0.80.ACI company Acid Test ratio is nearest to standard but company Acid
Test ratio is upper the standard.So,we providing short term loan to ACI
company.
4. Buying share either ACI and company X we prefer company X
because,buying bond is deretmined to EPS Ratio.Company X EPS ratio is
much higher than ACI.
5.Buying share either ACI and company X.We prefer ACI because,buying
share determine to debt to equity ratio.The standard is debt to equity ratio is
100%.ACI company debt to equity ratio is nearest to standard.2012 is
109%,2013 is 100% and 2014 is 96%.In company-X debt to equity ratio is
below the standard 2012 is 95%,2013 is 89% and 2014 is 92%.