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Welcome To
Our Presentation
LOGOTopic of the Presentation
Fundamental Analysis & performance evaluation of Pran
Agricultural Marketing Company Limited (AMCL)
LOGO
Submitted To-
Mr. Hussain Ahmed Enamul Huda
Lecturer
Department of Finance
Faculty of Business Studies
University of Dhaka
LOGOGroup List
Serial No Name ID
01 Md. Milan Hossain 16-019
02 S.M. Nazrul Islam 16-107
03 Md. Abu Daud 16-099
04 Mohammad Marjan 16-261
LOGOAgenda
Company Profile1
Strategy Analysis 2
Industry Analysis (Porter’s 5
forces model)3
Prospective Analysis
4
5
Ratio Analysis
You Are With-
Mohammad Marjan
16-261
LOGOCompany Profile
Company Logo
LOGOCompany Profile (Cont’d)
About
PRAN AMCL
Its mission to provide
maximum value to the
customers, shareholders,
colleagues, and communities
It has a skilled management team, workforce, and integrated sophisticated technologies in order to become globally competitive.live and work
It instigated its journey in 1984.
Its vision is to
establish PRAN
(AMCL) permanently
among the best of
innovative branded
generic company
LOGOStrategy Analysis
Types of
Strategy
1.Cost Leadership
Controlling production
and overhead costs
Minimizing cost of sales,
R&D, and service
2.Cost Differentiation
Ensuring the quality
Raising Buyers'
Performance
Income Statement
PRAN AMCL follows
Cost leadership
LOGOIndustry Analysis of PRAN AMCL
Threat of new entry : Less as high volume
investment is needed to enter.
Bargaining power of buyer :
High as buyers can switch to alternative
product if price or quality is not competitive
Bargaining power of supplier:
More as rivals are present.
Threat of substitutes : Moderate as some
products have more substitutes like forest products and some
products do not have .
Rivalry among competitors High as foreign and
domestic competitor are competing for increasing
market.
Porter’s 5 forces model
You Are With-
MD.Milan Hossain
16-019
LOGORatio Analysis
CALCULATION OF RATIOS
Particulars 2007 2008 2009 2010 2011
Current Ratio 1.3631046 1.4343793 1.40308305 1.45029382 1.27894974
Debt/Equity Ratio 0.3476373 0.2698715 0.38611105 0.60696449 0.37550049
ROA 0.0306497 0.0389412 0.04006633 0.03855521 0.03879204
ROE 0.0894447 0.1048977 0.11103743 0.11469516 0.11334827
Inventory Turnover 1.9147748 2.0352208 2.29859845 2.45070925 2.55713206
Acc. Rec. Turnover 15.499383 22.273725 29.6815944 29.1929813 23.6344156
LOGORatio Analysis(con’t)
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2007
2008
2009
2010
2011
Debt/Equity Ratio
Debt/Equit
y Ratio
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
20072008200920102011
ROA
ROE
0
5
10
15
20
25
30
35
Inventory
Turnover
Acc. Rec.
Turnover
You Are With-
S.M. NAZRUL ISLAM
16-107
LOGOProspective Analysis
Prospective analysis
Pro-forma income
statement
Pro-forma Balance
sheet
Free cash flow &
Valuation
WACC & NWC
calculation
LOGOProspective Analysis(Con’t)
Risk-free rate 0.1
Market return 0.28
Beta 0.050191401
Cost of equity 0.11
Cost of debt 0.160857395
After tax cost of debt 0.135162399
Total market value of equity 106,720,000.00
Book value of debt 659682071
Weight of equity 0.14
Weight of debt 0.86
WACC 0.1315
WACC Calculation
LOGOProspective Analysis(Con’t)
Free Cash flow & Valuation
Particulars 2012 2013 2014 2015
EBIT 190041691.3 207033768 225034474.7
EBIT (1-tax rate) 159684861 173962661.7 189087976.2
Depreciation 2608527.911 602792.3829 -66711.44432
Capital expenditure -92351515.36 -83628722.84 9255247.82
Change in NWC -506592790.4 15185732.68 100836039.6
Free cash flow 761237694.7 243008444.2 78929977.31 81297876.63
Present value discount factor 0.8837 0.7811 0.6903
Present value of free cash flow 672705750.8 189813895.8 54485363.34
Terminal value 503302191.1
Enterprise value 1420307201
Cash 35265609
Interest-bearing debt 659682071
Equity value 795890739
Value per share 994.8634237
LOGOProspective Analysis(Con’t)
OUR ASSUMPTIONS
1. Perpetual growth rate is 3%.
2. Capital expenditures will be financed by long-term loan.
3. Since there was no purchase of PPE, it was assumed that the existing long-term loan
will be repaid by three equal-yearly installments.
4. Risk-free rate is 10%.
5. For maintaining a no-arbitrage scenario, the return from investment was considered
to be equal to the interest rate.
6.There is no new investments for the following years
7.Security Deposits from Distributors are constant.
8.Short term liabilities & current assets grow in proportion to sales
9.Tax rate has been calculated in proportion to EBT
You Are With-
MD. ABU DAUD
16-099
LOGOFINDINGS
PRAN AMCL follows cost leadership strategy
Its main target is to capture large share of both local &
foreign market
Since customers are very price sensitive, PRAN AMCL
tries to reduce the production cost & selling price
It Ensures lower the product price with better quality than
their competitors
The performance & the financial position of PRAN AMCL
is also satisfactory
Finally, it is ever growing & in the edge of achieving of
goals & objectives.