



































Contents


Asian Finance & Banking Review 

Vol. 1, No. 1; 2017 

ISSN 2576-1161   E-ISSN 2576-1188 

Published by Centre for Research on Islamic Banking & Finance and Business 

 

 

93 

 

Financial Statement Analysis of Beximco Synthetics Limited 

 

K. M. Anwarul Islam1 

 

1Department of Business Administration, The Millennium University, Dhaka, Bangladesh 
 

Correspondence: Department of Business Administration, The Millennium University, Dhaka, Bangladesh, 

E-mail: ai419bankingdu@gmail.com 

 

Received: October 04, 2017          Accepted: October 18, 2017      Online Published: October 30, 2017   

 

Abstract 

This paper deals with the Financial Statement analysis of Beximco Synthetics Ltd. to get a practical view of how 

analysis is done using financial statements. We have taken the four year’s (2010-2013) financial statements of 

the company to complete the whole analysis. In ratio analysis we calculated various ratios such as Internal 

Liquidity Ratios, Operating Efficiency Ratios, and Ratios for Risk Analysis and Operating Profitability Ratios 

etc. At first the financial statements were reformulated to get pure views of the trends regarding different items 

of the statements. 

 

Keywords: Financial Statement Analysis, BSL, Ratio Analysis, DUPONT Analysis. 

 

1. Introduction 

The study of financial statements helps investment decisions by revealing information on the financial 

statements that is relevant to the decisions. The objective of the assessment is to determine the financial health 

of the company based on financial statements. To better financial statement analysis, much empirical accounting 

research has attempted to identify and measure value-relevant accounting qualities. Assumption is made in this 

study that market pricing acts as a suitable standard to compare firms' values and so serves as a reference for the 

accounting information. Accounting qualities are correlated with stock prices, therefore they might be seen as 

value-relevant. Several preceding 'information content' publications are the likes of Ball and Brown (1968) and 

their successors, and together, they demonstrate that accounting earnings and some of its constituents 

encapsulate market information. 

 

2. Literature Review 

Feroz, Kim, and Raab (2003) Ratio analysis is frequently used to assess the efficiency of a business. Another 

important reason why ratios are so widely accepted is that they are rather simple to calculate. Additionally, their 

interpretation is a source of confusion, particularly when two or more ratios send opposing messages. A last 

criticism of ratio analysis is that it is subjective because it is the analyst's job to choose ratios to evaluate the 

overall performance of a company.  

Damitio, Schmidgall, and Dennington (1995) A few different ways exist for analyzing the Statement of 



An Empirical Research on Shinepukur Holdings Ltd: Strategy, Accounting, Ratio, Sensitivity and 

Prospective Analysis 

 K. M. Anwarul Islam 

 

94 

Cash Flows. The most common is the preparation of comparative statements of cash flows, while a less common 

technique is the use of ratio analysis. This article analyzes the financial accounts of a fictitious hotel, the 

Example Inn, using these financial statement analysis methods.  

Standard-Setters (2002) An investigation of whether the manner financial reporting is done is affected by 

country cultures is performed by the writers. Three groups of professional accountants from the same large 

multinational accounting firm is used to carry out an experiment where the same financial information about 

two fake companies is presented to three separate sets of accountants, who hail from three different nations. 

Because the accounting regulations governing warranties are the same in every country, the accountants 

calculate warranty expenses for warranties (returned products). When investigating which figures may be 

considered "average," the authors discover that the estimations in the three nations vary greatly. 

 Gross leverage is the total liabilities of a business versus its equity. Many liabilities, like debt issued by 

banks or government agencies, are created through finance; however, other liabilities, such payables to 

suppliers, customers, and workers, result from doing business. In healthy capital markets, liabilities are often 

traded as price takers. However, since the input and output markets are imperfect compared to the capital 

markets, firms are able to add value in their operations. Operating liabilities, which originate in day-to-day 

business operations, have certain characteristics that bear similarity to those of liabilities created by external 

sources. 

3. Analysis of Data 

For ratio analysis, we have chosen Beximco Synthetics Limited. Here we have taken 4 years of data and our first 

calendar year of data is 2010. 

Our Findings 

By using the provided Ratio Analysis Template, we have found the following ratios: 

Ratio Year 

2010 2011 2012 2013 

Current Ratio 1.09 1.30 1.18 1.31 

Quick Ratio 0.30 0.42 0.36 0.37 

Inventory Turnover 1.07 1.06 0.98 1.07 

Average Collection Period 24.47 51.41 55.57 46.88 

Fixed Asset Turnover 1.38 1.47 1.68 2.07 

Total Asset Turnover 0.57 0.55 0.55 0.62 

Debt Ratio 0.61 0.57 0.57 0.54 

Debt to Equity 0.19 0.21 0.00 0.00 

Times Interest Earned 2.32 2.09 2.04 2.16 

Gross Profit Margin 21.90% 18.48% 16.29% 13.33% 

Operating Profit Margin 19.37% 15.94% 13.73% 10.96% 

Net Profit Margin 10.50% 6.36% 3.69% 3.44% 

Return on Total Assets (ROA) 6.02% 3.51% 2.03% 2.14% 

Return on Equity (ROE) 15.26% 8.17% 4.72% 4.57% 

Earnings Per Share (EPS) TK 28.37 TK 16.54 TK 9.48 TK 9.22 

Price/Earnings Ratio 6.11 8.17 10.55 8.73 



An Empirical Research on Shinepukur Holdings Ltd: Strategy, Accounting, Ratio, Sensitivity and 

Prospective Analysis 

 K. M. Anwarul Islam 

 

95 

 And we have found the following results for DUPONT Analysis: 

Ratio 
Year 

2010 2011 2012 2013 

Net profit AT/Sales 10.50% 6.36% 3.69% 3.44% 

Sales/Total Assets 57.36% 55.20% 54.93% 62.13% 

ROA 6.02% 3.51% 2.03% 2.14% 

Net profit AT/Total Assets 6.02% 3.51% 2.03% 2.14% 

Total Assets/Stockholders Equity 253.40% 232.81% 232.64% 213.87% 

ROE 15.26% 8.17% 4.72% 4.57% 

 

Interpretation of Ratios 

 Current Ratio 

Current Ratio shows the ability to meet future short term financial obligation. Here we have the following 

current ratios of Beximco Synthetics: 

 

Year 2010 2011 2012 2013 

Current Ratio 1.09 1.30 1.18 1.31 

 

As in all the years’ current ratio is more than 1.00, it indicates good payment ability of the company. If it would 

be more than or equal to 2, then it would have more payment capacity. 

 Quick Ratio 

It indicates the speed of payment of a company. Here we have the following ratios:  

 

Year 2010 2011 2012 2013 

Quick Ratio 0.30 0.42 0.36 0.37 

 

From the above data, we find that the ratios of the company are being increased year to year on an average. As it 

is below 1.00, we conclude that the Company is not in a satisfactory position in cash payment. 

 Inventory Turnover 

This ratio indicates the liquidity position of a company. Here we have the following inventory turnovers over the 

4 years. 

 

Year 2010 2011 2012 2013 

Inventory Turnover 1.07 1.06 0.98 1.07 

 

In 2010 and 2013, the company was in better position during the considered 4 years. 

 

 



An Empirical Research on Shinepukur Holdings Ltd: Strategy, Accounting, Ratio, Sensitivity and 

Prospective Analysis 

 K. M. Anwarul Islam 

 

96 

 Average Collection Period 

Year 2010 2011 2012 2013 

Average Collection Period 24.47 51.41 55.57 46.88 

 

In 2012, the company’s average collection period is 55.57 days. It is the worst collection efficiency of the 

company. Again, the company is in good position in collection in 2010 while its period is only 24.47 days. 

 Fixed Asset Turnover 

It reflects the utilization of the fixed asset. Over the years, the turnovers are as follows: 

Year 2010 2011 2012 2013 

Fixed Asset Turnover 1.38 1.47 1.68 2.07 

 

The company’s turnover is being increased year to year. Its growth rate is pretty good. The company had 

turnover 2.07 in 2013. It indicates that the company’s fixed asset turnover is more than double of its fixed asset 

utilization capacity. 

 

 Total Asset Turnover 

This turnover ratio indicates the effectiveness of a firm’s use of its total asset base. The findings are: 

Year 2010 2011 2012 2013 

Total Asset Turnover 0.57 0.55 0.55 0.62 

 

The highest turnover is in 2013 that is 0.62. It is the highest turnover among the calculated years. It explains that 

the company is doing well year to year. 

 

 Debt Ratio 

Year 2010 2011 2012 2013 

Debt Ratio 0.61 0.57 0.57 0.54 

 

The Debt Ratio of the company is being decreased year to year. It is a good sign for the company as it lowers the 

financial risk as well as bankruptcy costs. 

 

 Debt-Equity Ratio 

The debt-equity ratios of the company for the last 4 accounting years have is given below in table: 

Year 2010 2011 2012 2013 

Debt to Equity 0.19 0.21 0.00 0.00 

To have a clear understanding of these ratios, we present these in the following bar chart diagram: 



An Empirical Research on Shinepukur Holdings Ltd: Strategy, Accounting, Ratio, Sensitivity and 

Prospective Analysis 

 K. M. Anwarul Islam 

 

97 

 

In year 2012 and 2013, there was no debt of Beximco Synthetics. But in previous two years the company had 

19% and 21% respectively. It is good news for the common shareholders of the company. 

 Times Interest Earned 

Year 2010 2011 2012 2013 

Times Interest Earned 2.32 2.09 2.04 2.16 

 

 Gross Profit Margin 

It is an indication of the extent to which revenue exceed direct cost associated with sells. It measures the rate of 

profit on sales. 

Year 2010 2011 2012 2013 

Gross profit margin 21.90% 18.48% 16.29% 13.33% 

 

The company is in bad position in 2013 comparing to year 2010 as its gross profit margin has decreased to a 

great extent. It may have happened for increasing costs or decreasing of sales of the company. 

 Operating Profit Margin 

It measures the rate of profit on sales after operating expenses. 

Year 2010 2011 2012 2013 

Operating profit margin 19.37% 15.94% 13.73% 10.96% 

 

From the data we see that the company’s profit margin is being lowered year to year. Hence the company’s 

operating efficiency is being decreased as well. It may have happened because of increasing cost of goods sold, 

or increasing operating costs, or decreasing sales volume. 

 

 

 

 



An Empirical Research on Shinepukur Holdings Ltd: Strategy, Accounting, Ratio, Sensitivity and 

Prospective Analysis 

 K. M. Anwarul Islam 

 

98 

a 

 Net Profit Margin 

The data are as follows: 

Year 2010 2011 2012 2013 

Net profit margin 10.50% 6.36% 3.69% 3.44% 

As gross profit margin and operating profit margin has decreased, this margin has decreased as well year to year. 

It tells us that the net income on net sales is being decreased. It is an indication of lower operating profitability 

of the company. 

 Return on Total Assets 

It tells us how much profit a company is able to generate for each TK of the assets invested. 

Year 2010 2011 2012 2013 

Return on Total Assets 

(ROA) 

6.02% 3.51% 2.03% 2.14% 

The company’s return on assets is lowest in 2013, 2.14% and highest in 2010, 6.02%. Its growth rate is negative. 

So it’s not a good situation for the company for their invested assets. It may have resulted because of increasing 

of invested assets but not increasing of sales volume in the same rate. 

 Return on Equity 

It is a comprehensive indicator of company’s performance because it provides and indicates how well managers 

are implying the funds invested by the firm’s shareholders to generate returns. The data of this ratio is given 

below: 

Year 2010 2011 2012 2013 

Return on Equity (ROE) 15.26% 8.17% 4.72% 4.57% 

Generally it is a good sign if it is 10-14%. But in 2013 and during the previous years, this rate is being 

decreased. 

 Earnings per Share 

It is the ratio that point out rate of earnings on each share. 

Year 2010 2011 2012 2013 

Earnings per Share (EPS) TK 28.37 TK 16.54 TK 9.48 TK 9.22 

To have a better understanding, we have presented the above data in graph: 

 



An Empirical Research on Shinepukur Holdings Ltd: Strategy, Accounting, Ratio, Sensitivity and 

Prospective Analysis 

 K. M. Anwarul Islam 

 

99 

Here we find that EPS of Beximco Synthetics has been decreasing year to year. It is not a good sign for the 

company as well as company shareholders. In the year 2013, the company issued more 150,000 common shares. 

As a result, EPS decreased more in year   2013. 

 Price Earnings Ratio (EPS) 

Year 2010 2011 2012 2013 

Price/Earnings ratio 6.11 8.17 10.55 8.73 

Although price is decreasing year to year in Dhaka Stock Exchange, the amount of Price Earnings Ratio did not 

decrease. Besides, the EPS of the company has been decreasing as well. But the rate of decreasing of EPS was a 

little bit lower than Price growth. So the ratio has increased over the years. 

 

The share price of Beximco Synthetics in DSE on 31 December in respective years was as follows: 

Year 2010 2011 2012 2013 

Share Price TK 173.26 TK 135.07 TK 103.18 TK 80.50 

 

DUPONT Analysis 

 Net profit AT/Sales 

Year 2010 2011 2012 2013 

Net profit AT/Sales 10.50% 6.36% 3.69% 3.44% 

The trend of net profit growth is decreasing. It is because the volume of cost of goods sold is increasing year to 

year. We have found that operating expense has not increased by this time rather it has decreased. So cost of 

goods sold is responsible for this decreasing growth. 

 

 Sales/Total Assets 

Year 2010 2011 2012 2013 

Sales/Total Assets 57.36% 55.20% 54.93% 62.13% 

 

We find that the ratio is highest in 2013. It has increased by 7.19% from year 2012. It is due to the decrease of 

total assets in 2013. 

 Return on Total Assets 

Year 2010 2011 2012 2013 

ROA 6.02% 3.51% 2.03% 2.14% 

Here the ROA has increased by 0.11% in 2013 because of increase in sales and decrease in total assets. 

 Total Assets/ Stockholders Equity 

Year 2010 2011 2012 2013 

Total Assets / Stockholders 

Equity 

253.40% 232.81% 232.64% 213.87% 

Here the percentage change of total assets in the first 3 years was less than the percentage change of 

stockholders equity. So the ratios have decreased over the years. In last year, 2003, the total assets have 

decreased but the stockholders equity has increased as well. So there is a significant decrease in this year. 



An Empirical Research on Shinepukur Holdings Ltd: Strategy, Accounting, Ratio, Sensitivity and 

Prospective Analysis 

 K. M. Anwarul Islam 

 

100 

 Return on Equity (ROE) 

Year 2000 2001 2002 2003 

ROE 15.26% 8.17% 4.72% 4.57% 

 

As the net income of the company over the years has decreased, but the stockholders equity has increased over 

the years, so the ROE of the company has decreased to a great extent over the years. In year 2012 and 2013, the 

percentage change is less comparing to previous years. It is because in 2013, the stockholders equity has 

increased. 

 

4. Conclusion 

The company was in bad position in 2013 comparing to year 2010 as its gross profit margin has decreased to a 

great extent. It may have happened for increasing costs or decreasing of sales of the company. The company’s 

profit margin is being lowered year to year. Hence the company’s operating efficiency is being decreased as 

well. It may have happened because of increasing cost of goods sold, or increasing operating costs, or 

decreasing sales volume. As gross profit margin and operating profit margin has decreased, this margin has 

decreased as well year to year. It tells us that the net income on net sales is being decreased. It is an indication of 

lower operating profitability of the company. The company’s return on assets is lowest in 2013, 2.14% and 

highest in 2010, 6.02%. Its growth rate is negative. So it’s not a good situation for the company for their 

invested assets. It may have resulted because of increasing of invested assets but not increasing of sales volume 

in the same rate. Generally it is a good sign if ROE is 10- 14%. But in 2003 and during the previous years, this 

rate is being decreased. Although price is decreasing year to year in Dhaka Stock Exchange, the amount of Price 

Earnings Ratio did not decrease. Besides, the EPS of the company has been decreasing as well. But the rate of 

decreasing of EPS was a little bit lower than Price growth. So the ratio has increased over the years. 

 

References  

Ball, R. & P. Brown. (1968). An empirical evaluation of accounting income numbers, Journal of Accounting 

Research, Autumn, 159-178 

Damitio, J., Schmidgall, R. S., & Dennington, L. J. (1995). Financial statement analysis. Bottomline, 10(6), 

10-23. 

Feroz, E. H., Kim, S., & Raab, R. L. (2003). Financial statement analysis: A data envelopment analysis 

approach, Journal of the operational Research Society, 54(1), 48-58. 

Nissim, D., & Penman, S. H. (2003). Financial statement analysis of leverage and how it informs about 

profitability and price-to-book ratios. Review of Accounting Studies, 8(4), 531- 560 

Standard-Setters, A. (2002). Financial statement analysis. The CFA Digest. 

 

Copyrights  

Copyright for this article is retained by the author(s), with first publication rights granted to the journal. 


