Financial Statement Analysis Of Aci Ltd. 1l3a3z

1.1 Origin of the report: The report is originated to make a study on the Annual financial report analysis of ACI Limited as a part of the fulfillment of BBA Program of Barisal University. As a part of BBA Program this report is assigned to me by my honorable teacher Tandra Mondal.

1.2 Objective of the report: The purpose of this report is to analyze ACI Limited’s financial strength and its Share performance in DSE to describe its core financial strength.

1.3

METHODOLOGY

0F

THE

REPORT:

Data

regarding

the

organization profile collected in the following ways:  Carefully observation of various side of ACI Company Limited.  Discussion with group .  Online information.

Data collection method: 

Some data collected by group discussion with group



. Most of the data collected from internet.



Some data collected by observing report and presentation relates with this topics

1.4 Sources of Data: Secondary Data were used to complete this study. Sources of the secondary data were:    

Website of ACI Limited Website of Dhaka stock exchange (DSE) Annual report (2010-2014) Magazine of ACI Limited.

2.1

Introduction

:

Financial

statement

analysis (or

financial

analysis) is the process of reviewing and analyzing a company's financial statements to make better economic decisions. These statements include the income statement, balance sheet, statement of cash flows, and a statement of changes in equity. Financial statement analysis is a method or process involving specific techniques for evaluating risks, performance, financial

health,

and

future

prospects

of

an

organization.

.

These

stakeholders have different interests and apply a variety of different techniques to meet their needs. For example, equity investors are interested in the long-term earnings power of the organization and perhaps the sustainability and growth of dividend payments. Creditors want to ensure the interest and principal is paid on the organizations debt securities (e.g., bonds) when due. Common methods of financial statement analysis include fundamental analysis, DuPont analysis, horizontal and vertical analysis and the use of financial ratios. Historical information combined with a series of assumptions and adjustments to the financial information may be used to project future performance. The Chartered Financial Analyst designation is available for professional financial analysts.

2.2 s of the financial statement analysis: There are a number of s of financial statement analysis. It is used by a variety of 1. Stakeholders.

2.Such as credit and equity investors. 3.She government. 4.The public. 5. Decision-makers within the organization. 6. The managing committee. 7. The regulatory authorities. Financial statement analysis is an exceptionally powerful tool for a variety of s of financial statements, each having different objectives in learning about the financial circumstances of the entity.

2.3 Types of financial statement:

The 3 types of financial

statement given below:

CR e o t n dna ied n n ees e nd d s eEi n da c r Bno mi a n l aeg ns c esS t a t Se mh e ne tt

C o C n R o d e n e t d na e si n en e ds d e B d E a a i l n a r n c n oi c n m e g se S h S s e t a e t t e m e n t

2.4 Tools of Financial statement analysis: We use various tools to evaluate the significance of financial statement data. Three commonly used tools are as follows:

  

Horizontal analysis: Evaluate a series of financial statement data over period of time. Vertical analysis: Evaluates financial statement data by expressing each item in a financial statement as percentage of base amount. Ratio analysis: Expresses the relationship among selected items of financial statement data.

2.5 Example of three types financial statement in Horizontal analysis method: Horizontal analysis also called trend analysis, is a technique for evaluating a series of financial data over a period of time. Its purpose is to determine the increase or decrease that has taken place. This change may be expressed as either amount or percentage. Here is a example:

 Condensed Balance sheet:

Quality Department Store Inc. Condensed Balance sheet December 31 Inc rease or decrease during 2011 2011 Amount

2010 percent

Assets Current assets

1, 020, 000

9, 45, 000

75, 000

Plant assets

800, 000

6, 32, 000

167, 500

Intangible assets

15, 000

Total assets

17, 500

1, 835, 000 15.0%

7.9% 26.5%

(2,500) 1, 595, 000

(14.3%)

2, 40, 000

Liabilities Current liability 13.7%

3, 44, 500

303, 000

Long-term liabilities 4, 87, 500 500) (1.9%)

497,000

Total liabilities

800,000

8,32,00 4.0%

41, 500 (9, 32,000

Stockholder’s Equity Common stocks

275, 400 2.0%

Retained Earnings Total stockholder’s

2, 7000

727, 600 38.6%

525, 000

5,400 202, 600

Equity

1, 003, 000 26.2%

795,000

208,000

Total Liabilities and Stockholder’s equity 1, 835, 000 15.0%

1, 595,000

240,000

 Condensed income statement: Quality Department Store Inc. Condensed Income statements For the years Ended December 31

Inc rease or decrease during 2011 2011 Amount

Sales revenue 12.0% Sales returns

2010 percent

2, 195, 0001, 960,000 1, 23,000

(25,000)

1, 837, 000

2, 60, 000

14.2%

1, 281, 000

1, 140, 000

141, 000

12.4%

816,000

6, 97 000

119,000

12.4%

Net sales

98,000

2, 35,000

2, 097, 000

(20.3%)

Cost of goods sold Gross profit

Selling expenses 253,000

211, 500 41, 500

19.6%

. Expenses 104, 000

108, 500 (4,500)

(4.1%)

Total operating Expenses

3, 57,000

3, 20, 000

37, 000

11.6% Income from operation 82, 000

459, 000 21.8%

3, 77, 000

Other revenues Interest (18.2%)

9,000

11,000

(2, 000)

40, 500

(4, 500)

Income before tax 4, 32, 000

347, 500

84, 500

24.3%

Income tax expense 168, 200

139, 000

29,200

21.0%

55,300

26.5%

Other expenses Interest expense (11.1%)

Net Income

36, 000

263, 800

208, 500

 Retained Earnings statement: Quality Department Store Inc.

Condensed Income statements For the years Ended December 31

Particulars Retained earnings, jan.1 Add: Net Income Deduct: Dividends Retained earnings, Dec, 31

Increase or (Decrease) During 20111 2011 2010 525, 000 376, 500 263, 800 208, 500 788, 800 585, 000 61, 200 60, 000 727, 600 525, 000

Amount 148, 500 55, 300 203, 800 1, 200 202, 600

Percent 39.4% 26.5% 2.0% 38.6%

Horizontal analysis of changes from period to period is relatively straightforward is quite useful. But, complications can occur in making the computations. If van item has no value in a base year or preceding year but does have a value in the next year, we can not compute a percentage change. Similarly, if a negative amount appears in the base or preceding period and a positive amount exists the following year, no percentage change can be computed.

2.6 Example of three types financial statement in vertical analysis method: Vertical analysis also called common- size analysis, is a technique that expresses each financial statement item as a percentage of base amount. On a balance sheet, we might say that current assets are 22% of total assets- total assets being the base amount. Or on an Income statement, we might say that selling expenses are 16% of net sales- net sales being the base amount. The condensed balance sheet of quality department store Inc. in horizontal method is given below:

 Condensed Balance sheet

Quality Department Store Inc. Condensed Balance sheet December 31 Particulars

2011 Amount

Assets Current assets Plant assets Intangible assets Total assets

Liabilities Current liabilities Long-term liabilities Total liabilities Stockholders’ equity Common stock Retained earnings Total stockholders’s equity Total liabilities and stockholders’ equity

1, 02, 0000 800, 000 15, 000 1, 835, 000

percent

2010 Amount Percent

55.6% 43.6% 0.8% 100.0%

945, 000 632, 500 17, 500 1,595,000

59.2% 39.7% 1.1% 100.0%

18.8% 26.5% 45.3%

303, 000 497,000 800, 000

19.0% 31.2% 50.2%

275, 400 727, 600

15.0% 26.5%

270, 000 525,000

16.9% 31.9%

1, 003, 000

45.3%

795,000

49.8%

1,835,000

100.0%

1,595,000

100.0%

344, 500 487, 500 832, 000

 Condensed income statement

Quality Department Store Inc. Condensed Income statements For the years Ended December 31

December 31 Particulars

2011 Amount

Sales revenue Sales returns and allowance Net sales Cost of goods sold Gross profit Selling expenses . Expenses Total operating expenses Income from operations Other revenues Interest Other expenses Interest expense Income before

percent

2010 Amount Percent

2, 195, 000

104.7%

1, 960, 000

106.7%

98, 2, 097, 1, 281, 816, 253, 104,

000 000 000 000 000 000

4.7% 100.0% 61.1% 38.9% 12.0% 5.0%

6.7% 100.0% 62.1% 37.9% 11.5% 5.9 %

357,000

17.0%

123, 000 1, 837, 000 1, 140, 000 697, 000 211, 500 108, 500

459,000

21.9%

9,000

0.4%

36,000 432, 000 168, 200 263, 8000

1.7% 20.6% 8.0% 12.6%

320, 000

17.4 % 20.5 %

377,000 11,00 0

0.6 %

taxes Income tax expense Net income

2.2 % 18.9 % 7.5 % 11.4 %

40,50 0 3, 47, 500 139,00 0 208, 500

Condensed Income Statements (in thousands)

Particulars Net sales Cost of goods sold Gross profit Selling and istrative expenses Income from operations Other expenses and revenues Net income

Quality Department Store Inc. Dollars Percent 2, 097 100.0% 1,281 61.1% 816 38.9%

357

17.0%

459

21.9%

Macy’s Inc Dollars 26, 405, 000 15, 738, 000 10, 667, 000

Percent 100.0% 59.6% 40.4%

31.3% 9.1%

8, 256, 000 195 264

9.3% 12.6%

2, 411, 000

4.4% 4.7%

1, 155, 000 1, 256, 000 From the above discussion it can be easily said that financial statement is so much important for a company. From the analysis of financial statement of a

company we can get a clear picture of that company easily. Besides for take important sometime authority needs some important information which can be easily find from financial statement analysis. Every company should take proper steps to analysis its financial statement. Because from the financial statement analysis authority can take steps which is need for the company to make it developed. So it can also said that if any company does not do its financial analysis properly they will fall in a great trouble because the can not take right decision because of lacking information. For the development of a company the analysis of financial statement is so much important. In a word there is no option of financial statement analysis if we a want a clear picture of a company within a glimpse. If the company does not analysis the financial statement properly the can not be developed and the company will face losses day by day. So every company should take proper step to do financial statement analysis at any cost and authority should maintain it strictly .

3.1 Introduction ACI Bangladesh Manufacturers Limited was a subsidiary of world renowned multinational ACI Plc and was a listed public limited company under Dhaka Stock Exchange. 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 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. :

ACI was so named in 1992. But the history of ACI dates back to 1926, when Imperial Chemical Industries (ICI) was incorporated in the United Kingdom as four companies namely Novel Industries Limited, British Dyestarts Corporation, Brunner Mond and Company Limited and United Alkali Company merged. Since then ICI plc has been operating worldwide as a multinational company. In the year of formation ICI started operation in the Indian subcontinent in the name of ICI (India) limited. After separation of the India and Pakistan in 1947, the Karachi office of ICI (India) Limited renamed to be ICI (Pakistan) Limited.

3.2 Mission: ACI’s 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. To fulfill the mission of this company all of the member of this organization are working hard.

3.3 Vision: 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

3.4 Values Quality

Customer Focus

Fairness Transparency Continuous Improvement Innovation

3.5 Strategic Business Unit: ACI has diversified into four major strategic business divisions which include Health Care, Consumer Brands, Agribusinesses and Retail Chain.  Strategic Business Units:  Pharmaceutical  Consumer Brands  Agribusiness 

Animal Health



Crop care & Public health



Fertilizer



Crops

 Subsidiaries: ACI Formulations Ltd. ACI Agrochemicals Apex Leathercrafts Limited ACI Salt Limited ACI Pure Flour Limited

3.6 Organogram:

 t Ventures: ACI Godrej Agrovet Private Limited Tetley ACI (Bangladesh) Limited Asian Consumer Care (Pvt.) Limited

4.1 Financial Ratios: Financial ratios are useful indicators of a firm's performance and financial situation. Most of the ratios can be calculated from information provided in the financial statements. Objectives of Financial Ratio Analysis:

   

To To To To

analyze the financial statements of ACI Ltd. calculate the different types of financial ratios of the company. know the financial condition of the company. know the company’s financial development for last five years.

For calculating different types of ratios for the project work, the following formulae were used:

Liquidity Ratios: 1. Current Ratio

CURRENT ASSETS CURRENT LIABILITIES

It’s a measures a company’s ability to meet short term obligations with short term assets, a useful indicator of cash flow in the near future. A social enterprise needs to ensure that it can pay its salaries, bills and expenses on time. Failure to pay loans on time may limit your future access to credit and therefore your ability to leverage operations and growth. The one problem with the current ratio is that it does not take into the timing of cash flows 2. Quick Ratio (Acid-Test Ratio) =

QUICK ASSETS CURRENT LIABILITIES A more stringent liquidity test that indicates if a firm has enough short-term assets (without selling inventory) to cover its immediate liabilities. This is often referred to as the “acid test” because it only looks at the company’s most liquid assets only (excludes inventory) that can be quickly converted to cash). A ratio of 1:1 means that a company can pay its bills without having to sell inventory. 3. Working Capital = Current Asset – Current Liabilities Working Capital is a measure of both a company's efficiency and its short-term financial health.

Activity Ratios: 1. Inventory Turnover Ratio = REVENUE or SLAES INVENTORY It is the calculation the number of times inventory is turning over into sales during the year or how many days it takes to sell inventory. This is a good indication of production and purchasing efficiency. A high ratio indicates inventory is selling quickly and that little unused inventory is being stored (or could also mean inventory shortage). If the ratio is low, it suggests overstocking, obsolete inventory or selling issues. 2. Total Asset Turnover Ratio = REVENUE or SALES TOTAL ASSETS

Total Asset Turnover Ratio is the company's total revenue, the invoice, cash payments and other revenues. Total Asset Turnover Ratio represents the value of goods and services provided to customers during a specified time period - usually one year. How efficiently a business generates sales on each currency of assets. An increasing ratio indicates a company is using its assets more productively.

Profitability Ratios: 1. Net Profit Ratio =

NET PROFIT SALES or REVENUE A ratio of profitability calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every currency of sales a company actually keeps in earnings. Profit margin is very useful when comparing companies in similar industries. A higher profit margin indicates a more profitable company that has better control over its costs compared to its competitors. This ratio measures your ability to cover all operating costs including indirect costs. . 2. Return on Equity = NET INCOME COMMON FOR STOCKHOLDERS STOCKHOLDERS EQUITY The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders have invested. This is one of the most important ratios to investors. How does this return compare to less risky investments like bonds 2. Return on Assets (ROA) = NET INCOME TOTAL ASSETS It’s a measurement of the ability of a company to turn the assets into profit. This is a very useful measure of comparison within an industry. A low ratio compared to industry may mean that your competitors have found a way to operate more efficiently. After tax interest expense can be added back to numerator since ROA measures profitability on all assets whether or not they are financed by equity or debt. 3. Earnings per Share (EPS) =

NET INCOME TOTAL NO. OF COMMON STOCK OUTSTANDING

The portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serve as an indicator of a company's profitability

RATIO ANALYSIS Financial ratios can be classified into three types. Those are: A) Liquidity ratio B) Solvency ratio C) Profitability ratio LIQUIDITY RATIOS: These ratios actually show the relationship of a firm’s cash and other current assets to its current liabilities. Three ratios are discussed under Liquidity ratios. They are: 1. Current ratio: This ratio indicates the extent to which current liabilities are covered by those assets expected to be converted to cash in the near future. Current assets normally include cash, marketable securities, s receivables, and inventories. Current liabilities consist of s payable, short-term notes payable, current maturities of long-term debt, accrued taxes, and other accrued expenses. Current Ratio = Current Assets/Current Liabilities. Following table shows the current ratios of ACI Formulations Limited in different years. Current ratio

2010

2011

2012

2013

2014

1.92:1

1.83:1

2.05:1

2.47:1

2.74:1

Analysis: We can see that in 2010 the current assets were 1.92 times than the current liabilities. A minimum decrease is seen in 2011 but then 2012 to 2013; the ratio has kept increasing and resulted at 2.74 times in 2014. We can say that the capability of paying current liabilities through current assets is increasing. 2. Quick/ Acid Test ratio: This ratio indicates the firm’s liquidity position as well. It actually refers to the extent to which current liabilities are covered by those assets except inventories. Quick Ratio = (Current Assets-Inventories)Current Liabilities. Following table shows the Quick/ acid test ratios of ACI Formulations Limited in different years:

Acid test ratio

2010

2011

2012

2013

2014

1.52:1

1.33:1

1.51:1

1.92:1

2.15:1

Analysis: We can see that in 2010 the quick assets were 1.52 times than the current liabilities. A minimum decrease is seen in 2011 &2012 but then 2013& 2014; the ratio has kept rapidly increasing and resulted at 2.15 times in 2014. We can say that the capability of paying current liabilities through quick assets is increasing.

3. Inventory Turnover Ratio: Inventory turnover measures the number of times, on average, the inventory is sold during the period. Its purpose is to measure the liquidity of the inventory.

Inventory Turnover = Cost of goods sold / Average inventory. Following table shows the inventory turnover ratios of ACI Formulations Limited in different years: 2010 Inventory turnover ratio 6.45times

2011

2012

2013

2014

5.04time s

4.55times

4.27times

4.2time s

Analysis:

Analysis shows a gradual declination of Inventory Turnover Ratio over the first year. In 2010 the ratio was 6.45 times, and then it rapidly decreased to 5.04 times in the following year and dropped further to 4.55 times in the year 2012, 4.27 times in 2013 and 4.2 times in 2014.

7

6

5

4

Current ratio Acid test ratio

3

Inventory turnover ratio

2

1

0 2010

2011

2012



2013

2014

Chart of liquidity ratios

Solvency ratio: Solvency ratios measure the ability of a company to survive over a long period of time. Debt to total assets: The debt to total assets ratio measures the percentage of the total assets that creditors provide. Debt to total assets ratio = Total debt / Total assets Debt to total assets

2010

2011

2012

2013

2014

26.95%

26.014%

24.45%

22.26%

21.24%

Analysis: The analysis shows a gradual decreasing of debt to total assets ratio all over the years. In 2010 the ratio was 26.95% and then it rapidly decreased to 26.014% in the following year and further decreased to 24.45% in the year 2012, 22.26% in 2013 and 21.24% in 2014.

30.00% 25.00% 20.00% 15.00%

Debt. To total asset

10.00% 5.00% 0.00% 2010

2011

2012



2013

2014

Chart of solvency ratios

Profitability ratios: Profitability is the net result of a number of policies and decisions. Profitability ratios show the combined effects of liquidity, asset management and debt on operating results. There are three important profitability ratios that we are going to analyze: 1. Profit Margin 2. Asset turn over 3. Return on Asset 1. Profit margin: Profit margin is a measure of the percentage of each dollar of sales that results in net income. Profit margin = Net income / Net sales Profit margin

2010

2011

2012

2013

2014

11%

10%

9%

8%

7%

Analysis: The analysis shows decreasing in its profit margin ratio from 2010 to 2014 rapidly. So we can say that our business is a high volume business. 2.Asset turnover: Asset turnover measures how efficiently a company uses its assets to generate sales.

Asset turnover = Net sales / Average assets Asset turn over 2010 1.56 times

2011 1.52 times

2012 1.47 times

2013 1.35 times

2014 1.29 times

Analysis: The analysis shows decreasing in its assets turnover ratio from 2010 to 2014 rapidly. In 2010 the ratio was 1.56 times and then it rapidly decreased to 1.52 times in the following year and further decreased to 1.47 times in the year 2012, 1.35 times in 2013 and 1.29 times in 2014.

3.Return on assets: Return on assets indicates the measurement of profitability. Return on assets = Net income / Average assets Return on assets

2010 17%

2011 15%

2012 12%

2013 10%

2014 8%

Analysis: The analysis shows decreasing in its return on assets ratio from 2010 to 2014 rapidly. In 2010 the ratio was 17% and then it rapidly decreased to 15% in the following year and further decreased to 12% in the year 2012, 10% in 2013 and 8% in 2014.

160% 140% 120% 100% Profit margin

80%

Return on assets Asset turn over

60% 40% 20% 0% 2010

2011

2012

2013

2014

4.2 Horizontal Analysis:

The Horizontal Analysis of Income Statement Chart

250 200 150 100 50 0 -50

2010 2011 2012 2013 2014

net sales COGS Gross profit operating expense operating income net profit before tax income tax net profit

-100

The Horizontal Analysis of Income Statement Net sales of 2010 were 539554916; increased 31.44% in 2011, 40.57% in 2012, 45.50% in 2013 and 47.23% in 2014.

COGS are increased 19.18% in 2011, 29.72% in 2012, 36.07% in 2013 and 38.20% in 2014 than base year amount 444958348.

Gross profit was 94596568 in 2011; the amount increased 2010-2012 but decreased in 2014.

Net profit before Tax was 37013276 in 2010.the amount increased 183.20% in 2011, 180.18% in 2012, 148.95% in 2013 and 138.40% in 2014.

Net profit after Tax was 26834625. It increased 194% in 2011, decreased 180.18% in 2012, 130% in 2013 and 122.45% in 2014.

The Horizontal Analysis of Balance Sheet

200

150

100

current asset total non-current asset current liablities total shareholder eqity total eqity and liablity

50

0 2011

2012

2013

2014

-50

The Horizontal Analysis of Balance Sheet

change in percentage rate of the company total current assets increases 82.45% in 2011, 83.58% in 2012 From the horizontal analysis of the balance sheet of ACI Formulation limited, we can see the, 107.65% in 2011 and 151.10% in 2014 on base amount 258593052 of 2011.

Total non-current assets increases 36.46% in 2011, 67.15% in 2012, 70.05% in 2013 and 68.84 in 2014 on base amount 284284230 of 2010.

Current liabilities of 2010 are 260265756.but it decrease 5.82% in 2011, 0.06 % in 2012, & increased 0.56% in 2013 and 0.88% in 2014.

Total shareholders’ equity increased 135.17% in 2011, 161.77% in 2012, 175.21% in 2013 and 196.75% in 2014 when base amount was 28261152 in 2010.

Total assets and liabilities of 2010 was 542877382, increased 67.58% in 2011, 84.18% in 2012 and 97.17 % in 2013 and 117.23% in 2014.

4.3 Vertical Analysis

The Vertical Analysis of Balance Sheet

80

70

60

50 current asset investment

40

current liablities share captial total share holder equity

30

20

10

0 2010

2011

2012

2013

2014

Vertical Analysis of Balance Sheet

The vertical analysis of ACI Formulation limited shows all components as a percentage of total assets or total asset or total liability and equity amount. Let total asset base amount 100%. Current assets increase 47.63% in 2011, 51.86% in 2012, 47.48% in 2013, 50.12% in 2014, and 55.06% in 2015. On the same way property plant asset increase 52.36%, 42.64%, 41.40%, 42.12%, and 37.60% for respective year.

Then total equity and liability base amount 100%. Current liabilities increase 47.09%, 26.95%, 26.01%, 24.45% and 22.26% for the respective years.

On the same way total share holders’ equity increase 52.06%, 73.05%, 73.99%, 72.67% and 71.11% for the respective years.

Vertical analysis of income statement

The vertical analysis of ACI Company shows all the components as a percentage of total assets or total liabilities and equity amount. Let total asset is base amount (100%).

Current asset increase 47.63% in 2010, 51.86% in 2011, 47.48 % in 2012, 50.12% in 2013, and 55.06% in 2014.

At the same way, property plant asset increase 52.36 %, 42.64%, 41.40%, 42.12% and 37.60 % for the respective year.

Current liabilities increase 47.9%, 26.95%, 26.01%, 24.45 % and 22.26 % for the years respectively.

Total share holder equity increase 52.06%, 73.05%, 73.99%, 72 .67% and 71.11% for the years respectively.

ACI Limited Horizontal Analysis of Share Holder’s Equity Statement Increase or decrease in % Particular s Share capital on the beginning of the period Tax holiday reserve Revaluati on reserve Retained earnings Equity at the end of the period

2010

2011

2012

2013

2014

445280000

534336000

498456320

658301950

724132140

18245470

18245470

18245470

18245470

2011

2012

2013

2014

0%

0%

0%

0%

18245470 (4.99)% (3.12)% (5)%

95679250 105398985

664603705

90895288 98310787

739787545

62604130 98459385

777765305

59473923 102625070

838646413

57243652

(0.04 )% 32.30 %

6.72%

0.15%

42.30

11.31%

5.13%

7.83% 11.54 %

135776820

935398081

In the horizontal analysis of ACI Company’s share holder’s equity statements we can see tax holiday reserve o% is same for the years 2011, 2012, 2013, &2014. Revaluation reserve decrease 4.99%, 3.12%, 5% & 0.04% for the respective years. Retained earnings increase 6.72 %, 0.15 %, 42.30% & 32.30 % for the year 2011, 2012, 2013, 2014 respectively Now total shareholder equity increases 11.31% , 5.13% , 7.83% , and 11.54% for the years respectively 2011 , 2012 , 2013 , and 2014

5.1 Recommendations: After analyzing all the ratios and parameters of the share performance following recommendations for ACI Limited can be offered: ACI Limited is maintaining a healthy financial condition they should invest more in new business with its working capital to obtain more financial liquidity in the future. They should decrease the no. of days in Days Sales Outstanding (DSO) to collect its receivables more quickly to convert its sales into cash. So that they can reinvest in the business operation and generate more sales. ACI Limited is enjoying financial leverage but they need to have a proper management to minimize the financial risk associated with the company. Though ACI Limited is in profitable situation but they need to concentrate to increase the Net Profit Ratio and Return on Asset Ratio, which will ultimately increase the EPS. The performance of the securities is very smooth in the market. They should provide risk to compensate the risk offered by the securities. Offering risk in the bearish market may encourage more investors to invest in the securities of ACI Limited.

5.2 Conclusion: ACI Limited is a well reputed corporate in Bangladesh. They are operating their business from 1992 with the stated values and have earned the respect of the stakeholders. The company is operating in a smooth way in of financial activities. They have sustained their business by good management of the assets and providing wealth to the stockholders. Financial analysis is necessary to know about a business and the performance of its share. All analysis reveals the financial strength of ACI

Limited. ACI limited have immense opportunity to expand its business in future and contribute more in the economy of Bangladesh.

To accomplish this project necessary references have given below: References of personal Interview: 1. . Md. Habibur Rahman, Gereral Manager, Marketing, CC & PH, 26th July 2015 2. Dr. Zahidul Islam, Marketing Manager , CC & PH, 27th July 2015 3. Anwarul Haque, Brand Manager, Flora, 28th July 2015 4. Md. Mahamood Rassul, Corporate s Manager, 29th July 2015 5. Mohammad Kabir Hossain, Asst. Manager, Finance dept., 30th July 2015 6. Kaiser Rajib Sherpa, Assistant Manager, HR, 29th July 2015 7. Sheikh Salamot Ullah, Product Executive, CC & PH, 02nd August 2015 References of Books:  Jones, P. Charles, Introduction to Financial Management, Richard D. Irwin, Inc. 1992.  Jones, P. Charles (2010). Investments Principles and Concepts (11th ed.). John Wiley & Sons, Inc, New Delhi  Advance Chemical Industries Limited, Annual Report 2010  Advance Chemical Industries Limited, Annual Report 2011  Advance Chemical Industries Limited, Annual Report 2012  Advance Chemical Industries Limited, Annual Report 2013  Advance Chemical Industries Limited, Annual Report 2014 References of Website:  Dhaka Stock Exchange, viewed from 04 August 2015- 05 August 2015, http://www.dse.com.bd/  ACI Limited, viewed from 02 July 2015- 05 July 2015, http://www.aci-bd.com  Investopedia - Educating the world about finance, viewed from 07 August 2015- 15 August 2015, http://www.investopedia.com/