NORTH SOUTH UNIVERSITY

Group Project
FIN 440 Section: 02
Submitted to:
Mirza M Ferdous
Submitted by:
Name ID
Sazzadul karim chowdhury 1621595630

Fariha Tabassum Chowdhury 1811323630

Anika Farzana Chowdhury 1822130630

Rehana kabir 1821446630

Mashfica Tazreen 1831850630

Shafayet Ahmed 1911652630
Shahathat Hosan Shanto 1911108630

Date of Submission:
17/04/2021

Introduction:
Marico Bangladesh Limited is a beauty brand in Bangladesh. It is among the top 3 of the FMCG MNC
companies. It has 790,000 outlets in the country and has impacted the lives of 1 in 2 Bangladeshis. Marico has
products in various segments such as hair nourishment, edible oil and male grooming. The brand has been
regarded as the top 10 most trusted brands for the past decade. In 2011, Marico received the title of "Best
Brand" by Bangladesh Brand Forum and Nielsen. Marico’s main objective is to create industry-leading value
with brands and products that consumers would prefer. The company makes active effort conserving resources,
protecting the environment, and improving social conditions for those who need it most. The company has
strengthened its portfolio, most notably through its Hair Oil products. The company continued to diversify its
portfolio with a wide variety of products.

The company’s motto is to “Make A Difference”. The Marico Innovation Foundation has enabled social
organizations to significantly scale up operations to increase their social impact. They use innovation because
they want to have an impact in the lives of people. 18,000 unemployed youths were given training by the NGO
Yuva Parivartan, to provide them with a bright future. The Marico Innovation Foundation believed that by
empowering Yuva Parivartan to scale up its operations, it could have an impact on many more. Using its Social
Acceleration Programme, innovative thinking and patented processes, the lives of 100,000 youths was changed
within a year.

They see social responsibility as a moral and ethical duty rather than an obligation. They truly “Make a
difference” using their initiatives that enhance the lives in their immediate neighbourhoods and programs that
have a significant impact on the economy.

Marico stands out unique because of the level of impact they have on the lives of the people of Bangladesh. The
company is making a significant difference to our society and our economy. It

stands out from others as rather than just focusing on portfolio diversity and profits, it also thinks about the
environment and its consumers.

Sales Growth:
 year sales growth

2015-2016 7065895334

2016-2017 6916109929 -2.17%

2017-2018 7814663479 11.50%

2018-2019 8768160138 10.87%

2019-2020 9795911357 10.49%

Average= 7.67%

Sales growth rate: 10.17%

Justification: In the near future, Marico's revenue growth has been estimated at 10,17% per annum after
2020.We have used several techniques to calculate the sales growth rate. First of all, we have calculated the
growth of the company for each of the year from 2016-2020 using the following formula,
new−old
new
We have made an average of these 4 years sales growth rate. The average was 7.67%

Percentage of Sales (POS):

 Calculatio
Sales
Cash Cash/Sales = 0.2591891343 Cash
Inventory Inventory/Sales = 0.1666105649 Inventory

Pro-Forma:
 pro forma

sales forecast 10,792,155,540

partial pro forma calculations

Cash (Cash%)(Sales Forecast) =463,162,407
Inventory (Inventory%)(Sales Forecast) = 16.6%(10,792,155,540) =1791497820
Costs (Costs%)(Sales Forecast) = 51510396
AP 3007529583

Balance Sheet
Assets 2020 2021 Liabilities and Owners' Equity 2020 2021
Current Assets     Current Liabilities    
Cash 420,407,014 463,162,407 Accounts Payable 2,711,929,259 3007529583
Accounts Receivable 601,458,728 662,627,080 employee benefit obligation 6,516,576 6,516,576
other financial assets 1,423,654,628 1,568,440,303 current tax liabilities 605,442,847 605,442,847
assets held for sale 35,865,465 35,865,465 lease liabilities 42,836,393 42,836,393
Inventory 1,632,102,325 1,791,497,820 Total Current Liabilities 3,366,725,075 3,662,325,399
Total Current Assets 4,113,488,160 4,521,593,075 Long-Term Liabilities    
      Long-Term Debt 253,589,979 253,589,979
Fixed Assets     Total Long-Term Liabilities 253,589,979 253,589,979
Net Fixed Assests 894,507,126 985,478,500 Owners' Equity    
    share capital 315,000,000 315,000,000
share premium 252,000,000 252,000,000
    Retained Earnings 820,680,232 820,680,232
      Total Owners' Equity 1,387,680,232 1,387,680,232
Total Assets 5,007,995,286 5,507,071,575 Total Liab. and Owners' Equity 5,007,995,286 5,303,595,610

Income Statement
  2020 2021
Sales 9,795,911,357 10,792,155,540
Cost of Goods Sold 4,124,374,537 4,518,561,614
Taxable Income 3,572,083,739 3935364655
Taxes 925,845,292 2,797,208,002.00
Net Income 193,245,424 212,898,483.00
dividends - -

Addition to Retained Earning- -

EFN = 5507071575 – 5303595610 = 203475965

 Current Ratio

Current ratio = Current assets /Current liabilities

1.35
1.32

1.3

1.25
1.25

1.2

1.15
1.13

1.1

1.05

2018 2019 2020

Interpretation: The Company has been maintaining the current ratio more than 1.0 which
reflects a healthy liability state. Considering 2018, 2019 and 2020 the ratio has been downward
sloping because of other payables.

Debt Ratio

Debt Ratio = Total Debt / Total Asset

73%
0.72 0.72
72%

71%

70%

69%

68%
0.67
67%

66%

65%

64%

2018 2019 2020

Interpretation: In 2018 debt ratio was 67% but 2019 and 2020 reached to 72%. It shows that,
the company is slightly deteriorating its asset to cover the debt. The company increased in last
year which is not good sign at all.

Earning Per Share

Earning Per Share = Net Income / Shares Outstanding

90
84.01
80

70
64.23
60
52.15
50

40

30

20

10

2018 (TK) 2019 (TK) 2020 (TK)

 Interpretation: EPS ratio represents the income against each share. Here considering year 2018
the company’s EPS ratio was 52.15 ,2019 was 64.23 and 2020 was 84.01so it shows god position
and their investment was worthy for their company.

Profit Margin

Profit Margin = Net Income / Sales

300

264.62
250

202.34
200

164.26
150

100

50

2018 2019 2020

Interpretation: From the graph we can see that, the company is not generating good profit at
all. Because the graph is not upward sloping.

Debt Equity Ratio

Debt Equity Ratio = Total Liability / Total Equity

3

2.6
2.5
2.5

1.98
2

1.5

0.5

2018 2019 2020

Decision for budgeting:

• As revenues rise, all assets will rise as well.
• We expected that only the revaluation reserve and non-controlling interest would rise as revenues increased
in the equity section. The amount of common stock and surplus would remain constant.
• Businesses will use LTD as a plug vector for EFN, causing long-term debt to shift.

• With the exception of short-term borrowing, all existing liabilities would rise as a result of the transaction.

The company has a positive EFN for the forecasted years. This means that in order to finance its revenue
growth, the business would need to raise funds from outside sources. In this case, we'll assume that the
company is generating sales by using the asset's fuII power. To fit the balance sheet gap, we thought the
company would use Long Term Debt as the plug component. This is due to the fact that financing LTD is less
expensive than issuing new stock. The company's interest cost will rise over the year due to the increase in
LTD.