steel industry.ppt

7/24/2019 steel industry.ppt

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Analysis Of The

Financial

Performance

A Study

On BSRMSteels Limited 1


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Performance

Assignment on Financial Performance:

Prepared for:

Shajedul AlamSenior Lecturer

Department of Business

Administration

East West University

Prepared by

a!mul Mishu"

Id:142051013

Mamun Ahmed

Id:133051012

2

BSRM!e "ltimate Steel


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Bsrm steels limited

BSRMSteels Limited

3

BSRM!e "ltimate Steel


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Acknowledgement 4

At t!e #ery outset$ %e %ould li&e to e'press our sincere (ratefulness to t!e Almi(!ty

Alla!$ t!e most merciful and )eneficiary for empo%erin( us to accomplis! t!e

dissertation %it!in sc!eduled time*+e are !i(!ly inde)ted to our course instructor#

Shajedul Alam* ,e allo%ed us to encroac! upon !is precious time ri(!t from t!e

#ery )e(innin( of t!is paper %or& till t!e completion* ,is e'pert (uidance$

affectionate encoura(ement and critical su((estion pro#ided us necessary insi(!t intot!e pro)lem and pa#ed t!e %ay for t!e meanin(ful endin( of t!is assi(nment %or& in

a s!ort duration* +it!out !is constant super#ision and #alua)le ad#ices a su((estion

from time to time$ %e %ould not )e a)le to complete t!e %!ole t!in( in a ri(!t

manner*+e %ould li&e to t!an& all t!ose %!o contri)uted t!rou(! t!eir comments and

su((estions to prepare t!e term paper in a compre!ensi#e manner*


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Execti!e "mm ry

#

-#ery corporation !as many and #aried uses for t!e standardi.ed records and reports of its financial acti#ities*

/inancial performance is t!e most important t!in( for a pu)lic or pri#ate limited company* It is t!e &ey tool for

attractin( in#estors to%ards t!e company* In t!is study %e !a#e analy.ed a)out t!e o#erall financial

performance t!rou(! ratio analysis of BS steels limited* +e !a#e finis!ed t!is %or& as muc! efficiently as

%e could*In t!is report %e !a#e %or&ed on Statement of ompre!ensi#e Income income statement or tradin(and profit and loss account$ o%ners e6uity statement and Statement of /inancial 7osition )alance s!eet of

BS steels limited * !e data needed %ere collected from t!e annual reports of t!e BS steels o#er last 3

years$ t!e %e)site of t!e company and t!e %e)site of t!e D!a&a stoc& e'c!an(e* +e also too& !elp from t!e

class lectures and t!e /inancial Accountin( te't )oo& %!ile preparin( t!e t!eory part of t!e assi(nment and

%!ile ta&in( t!e decision a)out t!e financial performance of t!e BS steels limited*+e !a#e (o t!rou(! t!e

study )y analy.in( t!e follo%in( t!in(s of t!e company o#er last t!ree years data:

7rofita)ility ratio

Li6uidity ratio

-fficiency ratio

Based on t!ese data %e !a#e %or&ed on t!e financial performance of t!e BS steels limited *

/inally %e !a#e some recommendations for t!e company to do t!eir )usiness %ell furt!er* In t!is %ay$ %e !a#e

prepared our study in a %ell manner and as rele#ant and relia)le as possi)le*


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$%R&'U(%$&$%R&'U(%$& $

/inancial ana(ement is t!at acti#ity is concerned %it! t!e plannin( and controllin( of t!efirms financial resources* !ou(! it %as a )ranc! of economics till 1890 as a separate or

discipline it is of recent ori(in* /inancial mana(ement is concerned %it! t!e duties of finance

mana(er in a )usiness firm* ,e performs suc! as )ud(etin($ financial forecastin($ cas!

mana(ement$ credit administration$ in#estment analysis and fund procurement* !e recent trend

to%ards (lo)ali.ation of )usiness acti#ity !as created ne% demands and opportunities in

mana(erial finance* /inancial statements are prepared and presented for e'ternal users ofaccountin( information* As t!ese statements are used )y in#estors and financial analysts to

e'amine t!e firms performance in order to ma&e in#estment decisions*


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O!er!iew of Pro%ectO!er!iew of Pro%ect &

!e topic of t!is proect is /inancial 7erformance Analysis at BS steels* /inancial

7erformance Analysis constitutes approac! to ud(e t!e effecti#eness of t!e financial

function of t!e firm* /inance is needed to promote or esta)lis! t!e )usiness$ ac6uires

fi'ed assets$ ma&e in#esti(ations$ de#elop product$ meetin( day to day affairs of t!e

company$ encoura(e mana(er to ma&e pro(ress and create #alue* !e proect %or&

durin( t!e period of study e6uips t!e youn(sters %it! necessary e'perience anden!ances t!e learner %it! ade6uate to t!e real field* It ena)les t!e learner to meet t!e

c!allen(es of a )usiness %orld*


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'


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O!er!iew of B"() "teels *

!e BS )e(an t!e first re;rollin( mills to emer(e in t!e t!en -ast Ben(al in

1952*S!ares of BS Steels limited$t!e fla(s!ip company of BS (roup %as listed

%it! t!e countrys premier )ourses DS- ltd and se ltd as on 18 anuary 2009*BS

!as )een reco(ni.ed as t!e )est )rand of Ban(lades! in t!e Steel ate(ory at t!e Best

Brand A%ard Ban(lades! 2011 < 2013 ceremony$ or(ani.ed )y Ban(lades! Brand

/orum* BS Steels Limited is a !i(! (rade steel manufacturin( company and only

producer of -/ tested ductile rod in Ban(lades!* -/ -lon(ation at a'imum

/orce is t!e parameter of measurin( of ductility of steel %!ic! !as ta&en t!e countrys

construction sector to a ne% era* BS is t!e mar&et leader in t!e steel industry* =et

sales for 2013 %ere >01$935 %it! #alue in a&a 3$>22*90 crore*


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BSRM )isionBSRM )ision 1+

+e at BS (roup aspire to***

aintain our leaders!ip position in t!e steel industry )y producin( t!e )est 6uality

steel products$ continuously en!ancin( customer satisfaction and )ecomin( a relia)le

)usiness partner of our customers and suppliers* Be an employer of c!oice$ %it! focuson nurturin( talent and de#elopin( future leaders of t!e or(ani.ation* 7rotect t!e

interest of our s!are!olders t!rou(! sustaina)le (ro%t! and #alue creation* 7reser#e

t!e trust of all our sta&e!olders )y adoptin( et!ical )usiness practices* Support t!e

society t!rou(! orporate Social esponsi)ility initiati#es*


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11


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,O(PO(ATE OB-E,T./E" 12


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P(O0,T" A0 )A(ET" 13

SL*=O

=ame O/ 7roducts

Si.emm

1*

Xtreme500W

8, 10, 12, 14, 16,

20, 22, 25, 28,

29, 32 & 40 mm

2*

Grade 400

BS Steels Limited is a !i(! (rade steel manufacturin( company and only producer of -/ tested ductile rod in

Ban(lades!* -/ -lon(ation at a'imum /orce is t!e parameter of measurin( of ductility of steel %!ic! !as ta&en t!e

countrys construction sector to a ne% era* 7roducts of BS Steels are:

BS is t!e mar&et leader in t!e steel industry* =et sales for 2013 %ere >01$935 %it! #alue in a&a 3$>22*90 crore*


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0ATA AA5"." A0 .TE(P(ETAT.O 1#

Ratio Analysisatio Analysis is a po%erful tool of /inancial Analysis* !e relations!ip )et%een

t%o accountin( fi(ures$ e'pressed mat!ematically is &no%n as /inancial atio* A ratio is used

as an inde' or yardstic& for e#aluatin( t!e financial position and performance o a firm* atio

Analysis !i(!li(!ts t!e li6uidity$ sol#ency$ profita)ility$ capital (earin( etc* !e tec!ni6ue

ser#es as a tool for assessin( t!e current and lon( term financial soundness of a )usiness* It is

also used to analy.e #arious aspects of operatin( efficiency and le#el of profita)ility* atio

%as used for t!e time in 1919 )y a ?erman Sc!olar*

Definition :;

@atio is simply a means of !i(!li(!tin( in arit!metical terms of

relations!ip )et%een fi(ures dra%n from financial statements*


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1$

*ear (urrent Asset

+%a"a,

(urrent -ia.ilities

+ %a"a,

(urrent Ratio

/011 1>$552$520$058 1$>3$310$91 0*93

/01/ 14$931$429$134 1>$18$>04$488 0*92

/012 15$31>$94$598 15$829$54>$41 0*9

13(urrent Ratio 4 (urrent Assets 5 (urrent lia.ilities

$%ERPRE%A%$&: 6

!e current ratio of BS steels is

sli(!tly lo%er t!e standard ratio of 2:1 in almost

all t!e years* !e !i(!est ratio is 0*9 %!ic! %ere

in t!e year 2013 and t!e lo%est ratio is 0*92 %!ic!%as in t!e year 2011*

-$7U$'$%* RA%$&S-$7U$'$%* RA%$&S


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1&

/37uic" ratio 4 7uic" assets 5 (urrent lia.ilities*EAR 7uic" Assets (urrent -ia.iliies 7uic" Ratio

/011 1009959091 1>331091 0*5

/01/ 0>922521 1>18>04488 0*44

/012 9>3194052 1582954>41 0*>1

$%ERPRE%A%$&: 6

!e 6uic& ratio of BS steels

s!o%s not satisfactory le#el )ecause it is less

t!an t!e standard le#el accepted le#el of 1:1*

!e ratio !ad increased in t!e year 2013 %it! a

ratio of 0*>1 and t!e lo%est ratio %as in t!e

year 2012 %it! a ratio of 0*44**


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1'

138ross Profit Ratio 4 8ross Profit 9 100 5 Sales*EAR 8ross Profit et Sales 8ross Profit Ratio

/011 1$914$54$91 31$234$10$32 >*13C

/01/ 1$888$439$411 38$253$4>4$>5 4*94C

/012 3$250$148$580 3>$229$050$933 8*9C

$%ERPRE%A%$&: 6

BS steels !as reasona)le (ross

mar(in to co#er all operatin( e'penses and)uildin( up of results* /rom t!e analysis it is

clear t!at$ ?ross 7rofit atio is !i(!est in t!e

year 2013 %it! a ratio of 8*9C and lo%est in

t!e year 2012 %it! a ratio of 4*94C*

!e a)o#e (i#en (rap!

s!o%s an up and do%n trend from 2011 to

2013$ )ut t!e ratio considera)ly decreased in

t!e year 2012*

PR&F$%AB$-$%* RA%$&S


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1*

/3et Profit Ratio 4 et Profit 9 100 5 Sales

*EAR et Profit Sales et Profit Ratio

/011 839$205$050 31$234$10$32 2*>9C

/01/ 8>5$331$03> 38$253$4>4$>5 2*2>C

/012 1$19>$113$81 3>$229$050$933 3*30C

$%ERPRE%A%$&: 6

=et 7rofit is calculated after

deductin( non;operatin( e'penses from

operatin( profit and addin( non;operatin(

income to suc! profit* ,i(!er t!e ratio$ t!e

)etter it is$ )ecause it (i#es efficiency to t!e

concern* =et 7rofit is at its !i(!est in t!e year

2013 %it! a ratio of 3*30C and lo%est in t!e

year 2012 %it! a ratio of 2*2>C* !e a)o#e

fi(ure s!o%s an increasin( and decreasin(

trend from 2011 to 2013$ *


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2+

23Mar" u +8ross Profit ; 100,5 (ost of 8oods Sold

*EAR 8ross Profit (ost &f 8oods Sold Mar" U

/011 1$914$54$91 29$320$135$35> >*52C

/01/ 1$888$439$411 3>$3>5$025$24> 5*19C

/012 3$250$148$580 32$98$902$353 9*85C

$%ERPRE%A%$&:

ar& up is at its !i(!est in t!e year 2013 %it! a

ratio of 9*85C and lo%est in t!e year 2012 %it!a ratio of 5*19C* !e a)o#e fi(ure s!o%s an

increasin( and decreasin( trend from 2011 to

2013*


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=3Return on caital invested4 +et rofit > 100,5&?ner@s (aital*EAR et Profit &?ner@s (aital Return &n (aital

invested

/011 839$205$050 2$94$081$000 28*22C

/01/ 8>5$331$03> 5$540$>54$000 15*>2C

/012 1$19>$113$81 >$41$895$000 18*>4C

$%ERPRE%A%$&: In a)o#e t!e

(rap!$t!ere is a up and do%n trend o#er t!e

years* In 2011 t!e company (ot t!e !i(!estreturn on capital in#ested and lo%est in

2012*O#erall )etter position /or BS


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Efficiency (atio 23

Stoc" turnover 4 (ost of goods sold 5 Average stoc"

*ear (ost of 8ood sold Average Stoc" Stoc" %urnover

/011 29$320$135$35> 255448121 11imes

/01/ 3>$3>5$025$24> 4253>195 8*54 imes

/012 32$98$902$353 59924403 5*52 imes

$%ERPRE%A%$&: One of t!e most

Important atio $ t!e !i(!est stoc& turno#er in

2011 and lo%est in 2013$t!ere are do%n%ard

trend in stoc& turno#er o#er t!e years*


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24


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2#


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2$

BSRM Steels -imited

Statement of /inancial 7osition

As at 31 Decem)er 2012


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2&

BSRM Steels -imited

Statement of ompre!ensi#e Income /or t!e year

ended 31stDecem)er 2012


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F.0.6" 2'

!e current ratio of t!e firm t!ou(! not an ideal one 2:1$ )ecause t!e company did not attain

t!e satisfactory ratio in any year * !e current ratio s!o%s a satisfactory position in meetin(

s!ort term o)li(ation * Fuic& ratio is not satisfactoryG BS can not attain t!e satisfactory le#el

of 1:1 almost all t!e years* 6uic& ratio is #ery !i(! durin( t!e year 2013*In ?ross;profit ratio

!i(!er t!e ratio$ t!e )etter it is* !e company can ac!ie#e a !i(! ratio of 8*9C durin( t!e year

2013*)ut %e can see t!at t!e ratio is increasin( in year to year * =et profit ratio e'plains per a&a

profit (eneratin( capacity of sales* !e amount of net profit and #olume of sales increased year

)y year )ut t!e ratio s!o%n an up%ard and do%n%ard trend * eturn on employed is not

satisfactory$need to increase t!e e6uity in#estment * Stoc& turno#er is satisfactory


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(E,O))E0AT.O 2*

!e company s!ould concentrate on t!e lon(;term sol#ency of t!e )usiness* ompany s!ould

ma&e effecti#e measures to reduce t!e total de) t*!e mar&et condition s!ould )e properlyanaly.ed )efore procurement of material* Li6uid and lon( term sol#ency is satisfactory and t!e

company s!ould try to &eep more li6uid assets* Lo% rate of (ross profit is due to t!e increase in

t!e operatin( e'pense* !e company s!ould (i#e more focus on (eneral financial stren(t!*!e

company s!ould pay more attention to%ards t!e (ross profit ratio and net profit ratio )ecause

)ot! of t!ese are s!o%in( a up%ard and do%n%ard trend*eturn on capital -mployed ratio is

satisfactory* !e company s!ould (i#e more attention to attain a !i(!er ratio t!at %ill increaset!e profita)ility* -fficiency ratio s!o%s a mi'ed trend so t!e company s!ould ta&e t!e necessary

steps to meet t!e !i(!er ratio**


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,O,".O 3+

BS is an epitome of industrial success in t!e customer of Ban(lades!* /rom a #ery modest

)e(innin( t!e company !as reac!ed its present status of (lory* As a Bar rollin($Steel ma&in(

manufacturin($ and processin( unit$ t!e companys a)ility to sustain a steady and time )oundsupply sc!edule coupled %it! its constant stri#in( for e'cellence !as (i#en it t!at e'tra ed(e o#er

all its competitors in t!e field* !e com)ined effort of t!e mana(ement and %or&ers !as ensured

t!at t!e company ne#er lost its course* oday t!e firm is %ell &no%n for its consistent

performance and t!e 6uality of its products and %or& force* In Ban(lades! t!at is notorious for its

militant trade unionism BS !as succeeded in maintainin( a peaceful industrial climate*

!e companys %or&in( capital position s!o%s a positi#e trend %!ic! s!o%s (ood or satisfactorye'istences in current period* But %e can see t!at t!e amount of sales is increasin( at a !ealt!y

rate$ )ut t!e amount of net profit after depreciation and ta' (oin( in a decreasin( trend* !is is

mainly due to t!e increase in t!e cost of (oods sold and increase in t!e manufacturin( and la)our

cost* +e can also see t!at an increase in t!e amount of s!are capital from >8*0 in 2013 to >*90

in 2012$ t!is %ill !elp to ma&e more and more fund flo%in( to%ards t!e fi'ed assts and ot!er

manufacturin( facilities*


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steel industry.ppt

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