Financial Performance Analysis of Metro Spinning LTD

FINANCIAL PERFORMANCE
Analysis of METRO
SPINNING Limited
PRESENTED BY
KHONDOKAR KAIF NOOR HASSAN
ID-133
METRO SPINNIG
LIMITED
Metro Spinning Limited is one of the pioneers in the spinning industry in
Bangladesh which was established in 9th May 1993 which has produced
excellent quality yarn over the years for both the local garments industries and as
well as the export market.
It has created an excellent reputation for itself in the market for its quality of
product and services provided to its customer over the 25 years it has been in
the textile industry.
Financial performance analysis is the process of evaluating a
company's financial statements to assess its financial health
Financial and performance
Performance
Analysis Purpose: To assess a company's financial health and performance
Method: Use of financial ratios and metrics to measure profitability,

liquidity, efficiency, and solvency
Audience: Investors, lenders, and other stakeholders

NO. RATIO FORMULA 2022 2021 2020 2019 2018 STANDARD
Current Assets /
1 Current Ratio Current Liabilities 1.57 1.56 1.32 1.32 1.23 2 or more
(Current Assets -
Inventory) / 1 or more
2 Quick Ratio 0.82 0.90 0.69 0.66 0.71
Current Liabilities
(Cash and Cash

Equivalents) /
3 Cash Ratio 0.03 0.04 0.01 0.0120 0.0016 1 or more
Current Liabilities
Net Cash Provided

by Operating
Operating Cash
4 Activities / Total -0.04 0.05 0.06 0.21 0.04 1 or more
Flow Ratio
Current Liabilities
Total Long-Term
Debt /
Debt to Equity 0.55 0.27 0.78 0.78 0.92
5 Shareholders' 2 or less
Ratio times times times times times
Equity
Total Long-Term
6 Debt Ratio Debt / Total Assets 0.027 0.030 0.073 0.082 0.072 2 or less
Shareholders'
Equity / Total
7 Equity Ratio 0.58 0.56 0.48 0.48 0.45 2 or more
Assets
Interest
Operating Profit /
Coverage
8 Financial Expenses 1.47 0.78 0.05 0.11 0.13 2 or more
Ratio
Gross Profit Gross Profit / 10% to 20% or

9 Turnover 20.42 16.08 16.42 14.14 15.11
Margin more
Operating Profit Operating Profit /

10 Turnover 9.81 5.92 0.64 1.04 1.28 20% or more
Margin
Net Profit before 10% to 20% or

Net Profit
11 Tax / Turnover 10.40 7.06 0.93 1.87 1.37 more
Margin
CapEx to Sales Capital Ex/ Sales

12 -0.02 0.06 -0.01 -0.02 -0.02 3-5%
Ratio
Cost of Sales /
Cost of Sales
13 Sales 79.585 83.918 83.581 85.862 84.894 70-80%
Ratio
Net Profit before

Return on
14 Tax / Total Assets 4.76% 0.082 0.33% 0.85% 0.58% 5% or higher
Assets
Net Profit before

Return on Tax / Shareholders' 15% or higher
15 8.37% 6.20% 0.69% 1.82% 1.3%
Equity Equity
Earnings Before
Return on Interest and Taxes
(EBIT) / 15% or higher
16 Capital 0.066 0.044 0.004 0.008 0.010
Employed (Shareholders'
Equity + Total Debt
Basic Earning Operating Income/Total

17 0.043 0.029 0.002 0.005 0.005 5% or higher
Power Assets
Cost of Sales /
Inventory
18 Average Inventory 1.88 1.79 1.353 1.785 1.858 4 to 6 times or more
Turnover
365 days /
Inventory 60 to 90 days or
Inventory Turnover
19 Turnover in 194.14 203.91 269.77 204.48 196.44 lower
Ratio
Days
Turnover /
Accounts 6 to 10 times or
Accounts
20 Receivable 2.732 2.456 1.427 2.056 1.805 more
Receivable
Turnover
365/ Accounts
Average 30 to 60 days or
Receivable
21 Collection 133.603 148.631 255.721 177.543 202.209 less
Turnover Ratio
Period
Accounts Cost of Sales /

6 to 10 times or
22 Payable Accounts Payable 14.66 17.65 57.73 64.28 250.51
more
Turnover
Accounts
30 to 60 days or
Payable 365/Accounts Payable
23 24.90 20.68 6.32 5.68 1.46 lower
Turnover in Turnover
Days
Net Sales / Total 1.0 to 1.5 times or

Asset Turnover
24 Assets 0.44 0.49 0.37 0.47 0.42 more
Ratio
Sales / Net Fixed 1.0 to 1.5 times or

Fixed Asset
25 Assets 0.97 1.05 0.80 1.03 0.96 more
Turnover Ratio
Bank Efficiency Non-interest

26 0.039 0.026 0.035 0.037 0.036 Optimal- 50%
Ratio Expenses/Revenue
(Shareholder’s Equity-Preferred Higher than current

Book Value per
27 Equity)/Weighted Average of 27.7 17.8 8.5 7.8 9.4 market price or
Share common share outstanding depends
Time Interest
28 EBIT/Interest Expense 2.47 1.98 1.052 1.11 1.126 3 or higher
Earned Ratio
Annualized
Dividend per
29 Dividend/Weighted Average 3% 5% 2% 2% 2% 2% - 5%
Share
Shares Outstanding
(End-of-Period Common Shares

Earning per Outstanding)/(Net Income −
30 Preferred Dividends)
1.38 0.99 0.08 0.21 0.09 No fixed value
Share
CONCLUSIO
NS
To sum up, the thorough examination of Metro Spinning Ltd. Company's financial ratios
provides a thorough understanding of the organization's stability and performance over a
five-year period. The liquidity, solvency, profitability, efficiency, and other ratios of Metro
Spinning Ltd. Company are all well-represented by these ratios. This analysis is crucial in
giving stakeholders—investors, creditors, and management—a comprehensive grasp of the
company's financial situation and the areas that might call for strategic repositioning or
possible improvements.
THANK
YOU
BY
KHONDOKAR KAIF NOOR HASSAN

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FINANCIAL PERFORMANCE

Method: Use of financial ratios and metrics to measure profitability,

Audience: Investors, lenders, and other stakeholders

(Cash and Cash

Net Cash Provided

Gross Profit Gross Profit / 10% to 20% or

Operating Profit Operating Profit /

Net Profit before 10% to 20% or

CapEx to Sales Capital Ex/ Sales

Net Profit before

Net Profit before

Basic Earning Operating Income/Total

Accounts Cost of Sales /

Net Sales / Total 1.0 to 1.5 times or

Sales / Net Fixed 1.0 to 1.5 times or

Bank Efficiency Non-interest

(Shareholder’s Equity-Preferred Higher than current

(End-of-Period Common Shares

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