The Management of Fu-Wang Group is always followed QSP (Quality, Services and price) for their each & every product. Fu-Wang is much closer to the taste and food habit of generations. Accordingly we are sincere to research and development of products from state of art laboratory. Every developed product from Fu-Wang foods is well accepted from each every valued customers group. Due to much acceptance of Fu-Wang products many of the food prod ucers taking the scope of duplicating our products, packing shapes etc.
Thank our valued customers for their valued supports to choice the right product from the crowed of products in shops/market. Remember nationwide growth of Fu- Wang Foods network & supply chain only due to our customers. Presently we are having 350 dealers, more than dozens of chain shops, eight numbers of branches & residential offices to serve you. More than 200 products option to your Wide variety choice. 24 hour supervision of foreign technician for producing quality, imported Taiwan, Italian machinery, good quality raw materials confirming your satisfaction.
Very near future we are stepping in for beverage products. Hope all of you will like it. We are committed to your better health providing, hygienic & fresh product, ufficient food values for your nutrition and taste. Overview of Mutual Trust Bank MUTUAL Trust Bank Ltd was incorporated on September 29, 1999 under the Companies Act 1 994 as a public company limited by shares for carrying out all kinds of banking activities with Authorized Capital of Tk. divided into 38,000,000 ordinary shares of Tk. 100 each.
The Company was also issued Certificate for Commencement of Business on the same day and was granted license on October 05, 1 999 by Bangladesh Bank under the Banking Companies Act 1 991 and started its banking operation on October 24, 1999. As envisaged in the Memorandum of Association and as licensed by Bangladesh Bank under the provisions of the Banking Companies Act 1 991 , the Company started its banking operation and entitled to carry out different types of banking business. The Company (Bank) operates through its Head Office at Dhaka and 68 branches.
The Company/ Bank carry out international business through a Global Network of Foreign Correspondent Banks. Current Ratio: The ratio is mainly used to give an idea of the company’s ability to pay back its short-term liabilities (debt and payTABLEs) with its short-term assets (cash, nventory, receivTABLEs). The higher the current ratio, the more capTABLE the company is of paying its obligations. The current ratio can give a sense of the efficiency of a company’s operating cycle or its ability to turn its product into cash. In 2006 the ratio was 1 . 052 and in 2008 it was 1. 3392. The rate of ratio improved very slightly due to raise of both current Assets and current liabilities. In 2008 the rate was 1. 2382 which was more than 2006 and less than 2007. In 2009 the rate was 0. 99 and in 201 0 it was 0. 99. Because in the year 2009 the current liability increased than current assets but in 2010 urrent liabilities decreased than previous year and current assets increased than previous year. In 2011 it was 1. 9247 because of the current assets and current liabilities both are increased.
So we see that the recent performance of Fu-Wang Food in terms of current ratio is satisfactory because they have sufficient liquid asset to meet the short term obligation Of the company. Quick ratio: Quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a companys ability to meet its short-term obligations with its most liquid assets. Higher the quick ratio, the better the position of the company. In 2006 the quick ratio was 0. 06 and in 2007 it was 0. 20. In 2007 Cash has increased than previous year where account receivTABLE decreased, but total current liability has increased.
So the change in ratio occurs due to the change in the numerator. In 2008 the ratio was 0. 06 because cash decreased than 2007 and current liabilities also increased. In 2009 0. 09 and again in 201 0 it increased in 0. 09. During the year 2009 the ratio increased than 2008’s rate, it’s happened because cash increased. The total current liability also increased. But in the year 2010 the ratio increased and it was same like 2009’s rate. Because in that year cash and total current liability has increased than previous years. In 2011 it increased in 0. 39 because cash is increased.
So, we can view that, quick ratio of Fu-Wang Food indicates that, their performance is good. They have excess capacity to meet their short term obligations with the cash and accounts receivTABLEs. The company performed highest result in year 2007 and 2011. And their ratio’s rate was quite consistent Solvency Ratio Current liabilities to Inventory ratio: Current liabilities to Inventory ratio of Fu-Wang Food indicates that in year 2006 it was 2. 71 and the percentile change of 2007 is 21. 8%. In year 2008 it declines to 2. 27. There Was a positive change in Inventory. In year 201 0 the ratio increase to 3. 0 and the percentile change of inventory negatively affected. In year 201 1 it became 2. 44. Total liabilities to net worth: The Total liability to net worth of Fu-wang Food LTD 2006 iS 0. 73 and 2007 iS 0. 64, which is indicates the decrease in 2007. There is a decrease of Total liabilities to net worth compare with 2006 and 2007. In compare with 2006 and 2007 there is a decrease of Total liabilities to net worth. In 2007 there is a decrease in both total liabilities and total equity compare with 2006. Total equity bigger amounts compare with total liabilities. That’s why this increase of Total liabilities to net worth.
Compare with 2006 there is a significant increase of 2007. Inventory turnover: A ratio showing how many times a company’s inventory is sold and replaced over a period. A low turnover implies poor sales and, therefore, excess inventory’. A high ratio implies either strong sales or ineffective buying. From year 2006-201 1 the rate of ratio was 6. 27, 5. 72, 4. 84, 8. 63, 8. 43 and 7. 06. so we can observe that the inventory turnover has an increasing and decreasing rend year after year because, some year the sales were escalating more than inventories some years are not.
Fu-Wang Food is performing not so well in terms of inventory turnover, because they have managed their inventories and STABLE their sales. Inventory turnover: Current liabilities to net worth: It indicates the reliance on the equity for payment of debt. It is one of the measures of the solvency of a firm and, should not exceed 60 percent; higher percentages mean significant pressure on future cash flows. From 2006 to 201 1 the ratio rate was 0. 73, 0. 64, 0. 76, 0. 76, 0. 87 and 0. 36. The change in atio occurs due to the change in the numerator.
Here we can find out that the company has an upcoming pressure in nearer future because the rate of years was more than 60 percent and increasing year by year. Only in 201 1 the rate was lower than previous years. So the equity of payment of debt is not satisfactory. Fixed asset to net worth: The Fixed asset to net worth of Fu-Wang Food LTD 2006 is 0. 91 and 2007 is 0. 78, which is indicates the dramatically decrease in 2007. There is a decrease of fixed asset to net worth compare with 2006 and 2007. In compare with 2006 and 2007 there is a decrease of fixed asset to net worth.
In 2006 there is an increase in both fixed asset and total equity compare with 2007. That’s why this decrease of Fixed asset to net worth. Compare with 2006 there is a significant decrease of 2007. The Fixed asset to net worth of Fu-Wang Food LTD 2007 is 0. 78 and 2008 is 0. 81 , which is indicates the dramatically increase in 2008. There is a increase of Fixed asset to net worth compare with 2007 and 2008. In compare with 2007 and 2008 there is a increase of fixed asset to net worth. In 2007 there is an increase in both fixed asset and total equity compare with 2008. T hats why this increase of Fixed asset to net worth.
Compare with 2007 there is a significant decrease of 2008. Asset sale: The assets sale of Fu-Wang Food LTD 2006 is 1. 01 and 2007 is 1. 07, which is indicates the dramatically increase in 2007. There is an increase Of assets sale compare with 2006 and 2007. In compare with 2006 and 2007 there is a increase of asset sale. In 2007 there is an increase in both total asset and total sales compare with 2006. Thats why this increase of assets sale. Compare with 2006 there is a significant increase of 2007. The asset sale of Fu-Wang Food LTD 2007 is 1. 07 and 2008 is 1. 078, which is indicates the increase in 2008.
There is an increase of assets sale compare with 2007 and 2008. In compare with 2007 and 2008 there is a increase of asset sale. In 2008 there is an increase in both total asset and total sales compare with 2007. That’s why this increase of assets sale. Compare with 2007 there IS a significant increase of 2008. The an asset sale of Fu-Wang Food LTD 2008 is 1. 078 and 2009 is 0. 91, which is indicates the decrease in 2009. There is a decrease of assets sale compare with 2008 and 2009. In compare with 2009 and 2008 there is an increase of asset sale. In 2008 there is an increase in both total asset and total sales compare with 2009.
Thats why this decrease of assets sale. Compare with 2008 there is a significant decrease of 2009. Sales to net working capital: The Sales to net working capital of Fu-Wang food LTD 2006 is 21. 99 and 2007 is 6. 95, which is indicates the decrease in 2007. There is a decrease of Sales to net working capital compare with 2006 and 2007. In compare with 2006 and 2007 there is a decrease of Sales to net working capital. In 2007 there is an increase in both current asset, liabilities and total sales compare with 2006. That’s why this decrease of Sales to net working capital. Compare with 2006 there is a significant decrease of 2007.
This indicates the negative difference. Return on sales (ROS): This ratio is widely used to evaluate a company’s operational efficiency. ROS is also known as a firm’s “operating profit margin”. An increasing ROS indicates the company is growing more efficient, while a decreasing ROS could signal alarming financial troubles. In 2007, 2008, 2009 and 201 0 the rate of ratio was 0. 03 to 0. 04, but only in 2006 it was 0. 07 and 201 1 it was . 11 12. In case of profit margin Fu-Wang Food is not satisfactory because every year their ROS were same so the profit generating capacity is same every year which is not reason table result.
Profitability Ratio: Current Liability Coverage
This ratio provides a suggestion of a company capability to pay for debts and obligations coming due within one year, including any currently maturing portion Of long term debt. In 2006 the rate Of ratio was 0. 18 and in 2007 it was 0. 11. For the reason, that, Cash flow from operations and dividends was decrease in 2007. In the year 2008 and 2009 ratio was 0. 07 and 0. 16 cause there were zero dividend in both years, so ratio amplified. In 2010 rate was 0. 32 because both dividend and cash flow improved. And also current liability was improved every year. And in 2011 rate was 0. 5 because both dividend and cash flow decreased than previous year. So we can conclude that the company can manage their liability with cash flow. And company performed well in the year 2010. Interest Coverage: The interest coverage ratio with its weight on cash flows provides a more practical indicator of liquidity and an organization’s expertise to repair its debt. From 2006 to 2011 the rates of interest coverage were 4. 69, 6. 28, 3. 58, 5. 26, 12. 91 and 3. 44. In 2010 all the components of the ratio increased. Fu- Wang Food ability to meet its obligation to pay interest on its debts with cash s not satisfactory.
Asset Efficiency Ratio
The asset efficiency ratio provides an indication of how well the assets of a company are utilized to generate a cash flow return. At the year 2006 ratio was 0. 07 and in 2008 it was 0. 09. Due to decrease in total asset and increase in cash flow the ratio increased slightly in 2007. In the year 2008 the rate was 0. 04, at 2009 it was 0. 19 and in 2010 the ratio was highest 0. 15 and in 201 lit was 0. 015. Every year the rate of ratio fluctuate a lot. Fu-Wang Food Asset efficiency is not satisfactory. Because they couldn’t manage their asset properly to generate cash flows.
Cash Flow Based Ratios Du Pont Analysis DuPont analysis (also known as the DuPont identity, DuPont equation, DuPont Model or the DuPont method) is an expression which breaks ROE (Return on Equity) into three parts. ROE =NI/TE = ROA X Equity Multiplier ROA = profit Margin X Asset Utilization Equity Multiplier = Total Asset / Total Equity Profit Margin = Net Income / Total Operating Income [(lnterest Income + Non Interest Income)-(lnterest Expense + Non Interest Expense+ PLL+ Tax)] / TOI Asset Utilization = TOI / TA = (Interest Income-Interest Expense+ Non Interest Income) / TA Operating efficiency (measured by profit margin)
Asset use efficiency (measured by asset turnover) Financial leverage (measured by equity multiplier) Return on equity (ROE): It measures the rate of return on the ownership interest (shareholders’ equity) of the common stock owners. It measures a firm’s efficiency at generating profits from every unit of shareholders’ equity ROE shows how well a company uses investment funds to generate earnings growth. ROEs between 15% and 20% are considered desire table. In the year 2008 the ROE decreased by 0. 123%, this happened because of increase in Total Shareholder’s Equity by 77% which is 21. 38% higher than the Net Profit.
The increase in Shareholder’s Equity occurred because increase in share premium (301. 71 %), Statutory Reserve (80. 28%) and Retained Earnings (77. 61%) ROE decreased in 2009 by 0. 223%. In that year Shareholder’s equity also increased by almost 50% than the previous year. Due to increase revaluation reserve and statutory reserve by 1226. 50% and 47. 18% respectively than the previous year. Due to increase in profit after tax by Tk. (27. 67%) the ROE of 201 0 increased to O. 177. in 2010 the Net interest Income increased by O. 186% as a result Net profit had an increased value that year.
Between year 2006 nd 2010 the ROE had decreasing value which means Mutual trust bank Ltd cannot manage their Shareholder’s equity to gain more profit. But recent year ROE shows that the bank efficiently uses their equity to generate profit. Equity Multiplier: A measure of financial leverage. In other words, this ratio shows a company’s total assets per dollar of stockholders’ equity. A higher equity multiplier indicates higher financial leverage, which means the company is relying more on debt to finance its assets. EM decreased in 2009 because of percentage of SH’s Equity increases (77%) more than the Total Asset (56. 18%).
Due to increase in share premium and retained earnings the total amount of shareholder’s equity increased. EM has an effect in ROE, since it decreased the ROE also decreased in the year 2008. 2011 EM gives higher result than the previous year because higher increase in the percentage of total asset (15. 825%) than the Sh’s equity (15. 47%). Percentage increase in cash held in hand (118. 57%) balances with outside banks (283. 03%) made the total asset increased. this increase in EM will made the ROE increase in the year 2011. Return On Asset (ROA): An indicator of how profit table a company is relative to its total assets.
ROA gives an idea as to how efficient management is at using its assets to generate earnings. In 2009 the net profit and total increased 0. 016%. Due to small percentage change between the two components so the ROA remains same in the year 2009. Since the ROA remains unchanged in the year 2009 so the change in ROE occurs due to the negative change in EM. Since the ROA of Mutual trust bank Ltd remains quite table during the 4 years period, which indicates that the bank is moderately performing because they are not generating more profit by utilizing their asset properly.
Profit Margin
PM measures a bank’s ability to control expenses and thus its ability to produce net income from its operating income (or revenue). In 2009 the PM is 0. 323% higher than the previous year because of increase in interest expense and non interest expense. Due to increase in noninterest income by 34. 07% the income has increased in the year 2009 so the PM is higher in that year which is 0. 323. This increase in PM affects the ROA to increase in the year 2009. Mutual Trust Bank Ltd’s ability to control expense and to generate income is in a satisfactory but they improve their performance to increase the return on equity.
