Taskin- Presentation.pptx
- 2. Financial Performance of Niloy Motors Limited
- 3. PREPARED FOR: PREPARED BY: Dr. Md. Golam Morshed Assistant Professor Department of Business Administration School of Business Uttara University Taskin Rahman ID: 21921111072 Batch: 50th Program: MBA for BBA Major: Accounting Department of Business Administration Uttara University
- 4. BACKGROUND OF THE STUDY TOPIC Financial performance analysis can identify the financial strengths and weaknesses of the firm by properly establishing the relationship between the items of balance sheet and profit and loss. It helps a firm to identify short term and long term growth forecasting. This analysis can be undertaken by management of the firm or by parties outside the namely, owner, creditors, investors. Financial statement analysis involves the re-organization of the entire financial data contained the financial statements. It is the establishment of significant relationships between the individual components of balance sheet and profit loss account. This internship report is prepared as a mandatory course fulfillment of the requirement of MBA program. It is my great pleasure to permit to complete internship report on “Financial Performance of Niloy Motors Limited”. I am student of MBA program. I sincerely believe that my practical knowledge and experiences gathered from this study will be very helpful in my future life for doing any types of research work.
- 5. OBJECTIVE OF THE STUDY Broad objective To analyze the financial performance of Niloy Motors Limited. Specific Objectives The study includes the following specific objectives: To analyze the Methods of Ratio To Analyze the Liquidity Ratio, Asset Management/Efficiency Ratio, Debt Management Ratio, Profitability Ratio To Analyze the Evaluation of Financial Performance of Niloy Motors Limited.
- 6. MAJOR DIFFICULTIES FACED FOR ACCOMPLISHING INTERNSHIP As I am doing internship at Niloy Motors Ltd. There I am identifying many problems of the Niloy Motors also as an intern. Those are problems are described below: Lack of communication Lack of Time
- 7. COMPANY PROFILE Niloy Motors Limited(NML)is sister concern of Nitol Niloy Group. NML is a HERO motorcycle assembler and distributor company in Bangladesh. NML start journey from 2012 agreement with hero motor corp India. The NML operates in whole Bangladesh with 08 Region, occupies a leading position in the markets of several Region and Assemble & distribution 21 Model of Motorcycle. They play a significant role in local motorcycle market. In Bangladesh they are the top employer and the company of choice for people in all areas of our business. They have 01 assembly plant, 04 warehouse (Distribution Point), 14 own showroom (whole sales & retail sale), and around 150 dealers (retail sale) and also 120 above spare parts & service center in Bangladesh.
- 8. MISSION & VISION Mission of NML: NML's mission is to enrich the quality of life of people through responsible application of knowledge, skills and technology. NML 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. Vision of NML: 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.
- 9. PRODUCT & SERVICE OFFERING
- 10. DATA COLLECTION AND PROCESSING Data Description The study contains both primary and secondary data. Secondary data had been collected from both internal and external sources. Primary data sources Secondary data sources Ways of Data Collection I collect my data from various ways which based on internal ways. Maximum primary data I collected from our intern training season. Primary source of data Secondary sources of data
- 11. DISCUSSION OF THE OBJECTIVE Objective- 01 To analyze the Methods of Ratio. Liquidity Ratio Current Ratio= Current Assets/Current Liabilities Working Capital= Current Assets – Current Liabilities Cash conversion cycle = DSO + DIO −DPO Asset Management/Efficiency Ratio Inventory Turnover= Cost of Goods Sold/Average Inventory Total Asset Turnover Ratio= Net Sales/Average Total Assets Receivables= Net Credit Sales/Average Accounts
- 12. Debt Management period Debt Ratio= Total Liabilities/Total Assets Times Interest Earned Ratio= Earnings before Interest and Tax/ Interest Expense ProfitabilityRatio Net Profit Margin= Net Income/Net Sales Gross Margin = Gross Profit/Revenue Operating Margin =Operating Income/Revenue ROE = Net income after tax / Average shareholder's equity ROA = Annual Net Income /Average Total Assets
- 13. OBJECTIVE- 02: TO ANALYZE THE LIQUIDITY RATIO, ASSET MANAGEMENT/EFFICIENCY RATIO, DEBT MANAGEMENT RATIO, PROFITABILITY RATIO Liquidity Ratio: Current Ratio Working Capital Cash Conversion Cycle Year 2010 2011 2012 2013 2014 Current Ratio 1.388 0.840 0.777 0.743 0.655 Year 2010 2011 2012 2013 2014 Working capital 9575100 7 (62462665) (14222599) (176291858) (317274134) Year 2010 2011 2012 2013 2014 Cash Conversio n Cycle 145 -7 74 72 46
- 14. Asset Management/Efficiency Ratio: Inventory Turnover Ratio Total Asset Turnover Ratio Average Collection Period/Days’ Sales Outstanding Average payment Period Year 2010 2011 2012 2013 2014 Inventory Turnover Ratio 3.3 3.9 2.3 2.5 3.4 Year 2010 2011 2012 2013 2014 Total Asset Turnover Ratio 57% 31% 24% 22% 35% Year 2010 2011 2012 2013 2014 Days’ Sales Outstandin g 41.8 28.2 26.3 28.5 20.5 Year 2010 2011 2012 2013 2014 Average Payment Period 252 255 221 226 160
- 15. Debt Management Ratio Debt to Asset Ratio Times Interest Earned (TIE) Ratio Profitability Ratio: Net Profit Margin Ratio Year 2010 2011 2012 2013 2014 Debt to Asset Ratio 85% 58% 60% 56% 57% Year 2010 2011 2012 2013 2014 TIE 3.55 5.76 1.27 0.10 0.29 Year 2010 2011 2012 2013 2014 Net Profit Margin Ratio 17% 19% 11% 2% 5%
- 16. Gross Profit Margin Ratio Operating Profit Margin Ratio Return On Equity (ROE) Ratio Year 2010 2011 2012 2013 2014 Gross Profit Margin Ratio 28% 34% 32% 32% 32% Year 2010 2011 2012 2013 2014 Operating Profit Margin Ratio 22% 26% 24% 2% 6% Year 2010 2011 2012 2013 2014 ROERatio 32% 7% 3% 0% 2%
- 17. OBJECTIVE- 03: TO ANALYZE THE EVALUATION OF FINANCIAL PERFORMANCE OF NILOY MOTORS LIMITED. Performance Evaluation of Niloy Motors Limited Days Sales Outstanding to Average PaymentPeriod Comparing NAVof2014of Niloy Motors with TATA Motors, ACI Motors and Runner Motors Ltd. Comparing Revenue of Niloy Motors with TATA Motors, ACI Motors and Runner Motors Ltd. Comparing net income of Niloy Motors of 2014 with TATA Motors, ACI Motors and Runner Motors Ltd. Comparing EPS of 2014 of Niloy Motors with TATA Motors, ACI Motors and Runner Motors Ltd. Days Sales Outstanding to Average Payment Period: Year 2010 2011 2012 2013 2014 Days’ Sales Outstandin g 41.8 28.2 26.3 28.5 20.5 Average Payment 252 255 221 226 160
- 18. Net Asset Value per Share (NAV) of 2014 of Niloy Motors, Tata Motors, ACI Motors and Runner Motors Ltd: Revenue of 2014 of Niloy Motors Ltd. compare with Tata Motors, ACI Motors and Runner Motors Ltd: Net Income of 2014 of Niloy compare with TATA, ACI and Runners Motors Limited Companies name Value Niloy Motors Limited 43.52 Tata Motors Limited 95.19 ACI Motors LTD 29.02 Runner Motors LTD 13.18 Companies name Value % Niloy Motors Limited 893863503 23% TATA Motors Limited 692427630 17% ACI LTD 1677657674 42% Runner Motors LTD 692791034 18% Companies name Value Niloy Motors Limited 41072321 TATA Motors Limited 2544389 ACI Motors LTD 15425038 Runner Motors LTD 41088653
- 19. FINDINGS AND RECOMMENDATION Findings: Niloy Motors greatly lose its capacity to pay their current obligations by using its current assets, which indicates they are in risky position in currentratio. Niloy Motors current liabilities are greater than their Current assets. It indicates, Niloy Motors has great problem to maintainliquidity. Cash conversion cycle was highly efficient in 2011 They needed -7 days to convert their assets into cash and worst situation in 2010 when needed145days. Ni;loy Motors has lower ability to generate sales from its assets during 2010 to2014. Niloy Motors has lower level of liabilities compared with assets and considered low leveraged and low risk. Moreover, it performed greatly in 2013 at only56%. After 2012 Times Interest Earned ratio is less than 1, means the company is likely to have problems in paying interest on itsborrowings. Net profit margin of Niloy Motors Ltd. is not in good position except2011. Gross Profit of Niloy Motors Ltd. increased from 2010 to 2011 and reached its peak at 34% and it remained constant at 32% from 2012 to2014 When Niloy Motors Ltd collected their cash in delay, they pay to their creditors in delay, which ensure balance liquidity and keep company riskfree. Niloy Motors Ltd is in the second position in NAV and revenues in themarket In 2014 its net profit exit ACI and Runner Motors and bit to the TATA Motors Ltd. Niloy Motors Ltd earned 41072321 which are almost similar to TATA Motors
- 20. Recommendation: Niloy Motors Ltd. need to highly concern about their liquidity position. To recover their liquidity performance they should collect their account receivable as soon as possible on the other hand, delay payment to their suppliers (creditors) may help to recover liquidityposition. Niloy Motors Ltd. has poor sales and lower ability to generate sales from its assets, therefore, excess inventory. They need to increase their sales by better advertisement process anddiscount. Times Interest earned ratio can be recovered by increase operating profit and operating profit can be increased by assess administration and selling expenses. It is necessary to reduce some amount of administration expenses which are getting higher day by day. By the reduction of administration expense Niloy Motors Ltd. can improve their operating profitalso. For recover the ROE Niloy Motors Ltd. need more common shareholders. They can increase their Share holder by offering huge returns. Moreover, Niloy Motors Ltd. also needs to raise its Total Asset by increasing their investment and Account receivable because both items are poor in amount.
- 21. CONCLUSION Niloy Motors Ltd. is one of the private limited company in the Motors industry in Bangladesh, which commenced in 2005. The study concentrated on the financial performance evaluation. The products line of Nitol Niloy Groupwhich is much diversified in terms of items and designs. It has been able to develop house brands namely PARR Euro Fine Porcelain Tableware. Niloy Motors Ltd. has tremendous problem in maintaining liquidity but they try to main it by delay payment to their creditors. At the same time it is not so good in debt management. However, Niloy Motors Ltd. is highly efficient to control its inventory, creditors and sales. On the other hand, Niloy Motors Ltd. is in high position in profitability by improving net profit, gross profit and operating profit. Though they have problems in ROE and ROA they should recover it by giving deep concentration. However, Comparing Net income, NAV, of Niloy Motors Ltd. of 2014 with TATA Motors, ACI and Runner Motors Limited, it is in second position and also it already cover 23% of market by their selling. Overall it is take good position in market byimproving.