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Transcript of Case Study Square Textiles
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Corporate Financial Analysis:
Square Textiles Ltd.
TERM PAPER
FIN 639
SEC: 1
Submitted By:
Ehsanul Hannan 081 124 060
Noor-A-Nazia 081 125 060
Md Sajjad Bin M Rahman 081 589 060
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Md Sajjad Bin M Rahman 081 589 060
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April 16, 2011
Dr. Masud Rahman
Professor
MBA Program
School of Business
North South University
RE: Submission of term paper on Corporate Financial Analysis: A Case
on Square textiles Ltd.
Dear Sir:
We do hereby feel privileged to submit our term paper on Corporate
Financial Analysis: Square Textiles Ltd., with an intention to have a
better understanding of the course Corporate Finance.
We greatly value the opportunity you gave us.
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Acknowledgement
At first, we show our gratitude to almighty ALLAH without whose grace,
nothing is possible. Our special thanks go to the honorable course
instructor of the course, Dr. Masud Rahman, who helped us in every
sector to prepare this project paper with his acquired knowledge and
vast experience. We are very grateful for his guideline and utmost
patience towards us.
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Abstract
The objective of this case study is to find out the policy decisions made
by Square Textiles Ltd. that influenced share price movement. We were
also interested to analyze its investment decisions and the impact on
share price. We also tried to forecast the share price by identifying
growth opportunity of the firm.
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Contents
Chapter 1 Introduction & Methodology.................................1
1.1 Introduction...............................................................................1
1.1.1 Square Textiles Ltd. at a glance..........................................1
1.2 Objective of the study................................................................1
1.3 Methodology..............................................................................2
1.3.1 Financial Analysis techniques..............................................2
1.3.2 Statistical Techniques..........................................................3
1.3.3 Nature and Source of Data..................................................3
1.3.4 Time Period under Consideration......................................3
1.3.5 Standard of comparison......................................................3
1.4 Limitations of the study.............................................................3
Chapter 2 Analysis & Interpretation of Financial Data............5
2.1 Balance Sheet Analysis..............................................................5
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4.2 Scenario 1: Growth at Sustainable Growth Rate......................28
4.3 Scenario 2: Growth as per Gordon Model................................29
4.4 Scenario 3: Growth at GDP growth rate...................................29
4.5 Scenario 4: Optimistic..............................................................30
4.6 Scenario 5: Pessimistic............................................................30
4.7 Choice of Growth Rate.............................................................31
4.8 The Plug Variable.....................................................................31
4.9 Weighted Average Cost of Capital...........................................31
4.10 Share Price according to Gordon Model...................................32
Chapter 5 Findings and Conclusions....................................33
5.1 Financial Performance.............................................................33
5.2 Stock Price Movement.............................................................33
5.3 Growth Prospect and Future Share Price.................................33
Appendix 34
A.1 Regression results...................................................................34
A.2 Weighted Average Cost of Capital...........................................39
A.3 Financial Statements & Performance Data..............................40
A 3 Fi i l St t t & P f D t
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Chapter 1
Introduction & Methodology
1.1 Introduction
This case study is prepared with an intention to meet partial requirement
of the course Corporate Finance and to have a better insight of the
subject matter. We have chosen Square textiles Ltd., one of the leading
yarn manufacturers of the country for this purpose. We performed an
analysis of the company and tried to evaluate its justification with the
acquired knowledge from this course.
1.1.1 Square Textiles Ltd. at a glance
Square Textiles Ltd. was established as a public limited company in 1994
as a group company in Square Group with a business line of
f t i d k ti f Th t t d it ti
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Relate consequences of financial activities with the valuation of the firm
1.3 Methodology
A number of methods and techniques which were used towards reaching a
conclusion are stated below: -
1.3.1 Financial Analysis techniques
A balance sheet analysis was performed to identify the sources of
discrepancies in balance sheet that causes book value and market value
of share to be different.
A cash flow analysis was performed to study the cash dealings of the firm
and to identify its financial position.
We also performed a ratio analysis to evaluate the firms financial
strengths or weaknesses. The most prominent Financial Analysis
techniques include the following 3 methods: -
B h M k A l i
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Cross Section Analysis
In this type of analysis, Companys financial ratios are compared with
other industry ratio averages. This can also be performed by issuing
comparison between two companies of similar business.
For the sake of the case study, we will perform Time Series analysis on the
seven year data that we have and a Cross Section analysis between our
company of interest Square Textiles Ltd. and Apex Spinning & Knitting
Mills Ltd (ASKML).
1.3.2 Statistical Techniques
To relate share price movement with different events or policy decisions
e.g. account closing, record date, dividend declaration, AGM etc. we relied
on simple regression by populating dummy variable against the event.
1.3.3 Nature and Source of Data
The data used in this study is secondary data collected from annual
t d Dh k St k E h b it d d t hi
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1.4 Limitations of the study
Like all other case studies, this too has got its limitations. Following are
the areas where we had our limitations
Unable to conduct direct interview with Square Textiles employees
to get a better insight of our findings.
Unavailability of information in a Soft Copy which consumed lot of
time.
No information was available on the overall market share in the
yarn industry in Bangladesh. Moreover, the industry averages were
not also available which would have been a better option to
compare with.
Financial year of Square Textiles and ASKML ends in different
months which can create inaccuracies in cross-section analysis
Due to time constraint, cross section analysis was done only for last
It ld b b tt if it d f l t 7
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Chapter 1Analysis & Interpretation of
Financial Data
1.1 Balance Sheet Analysis
The Balance Sheet shows the financial position of a firm at a specific point
in time. The financial statement indicates the investments made by the
firm in the form of assets and the means by which the assets were
financed that is, whether the funds were raised by borrowing (which is
actually the Liabilities part of a Balance Sheet) or by selling ownership
shares or common shares or common stocks (which is basically the Equity
part of a Balance Sheet). Amounts shown on a balance sheet are generally
the historic cost of items and not their current values. Balance sheet can
b d fi d A t Li biliti E it Th t id f th
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Assets at Cost LessDepreciation
1,378,552,606
Deferred Tax Liability 112,276,486
Investment-Long Term(At Cost) 105,000,000 Total Liabilities 2,388,878,289
Share Money Deposit800,000,00
0Equities
Total Fixed Assets2,283,552,
606Share capital 705,804,530
General Reserve andSurplus
2,413,563,497
Tax Holiday -
Total Equities 3,119,404,027
Total Assets 5,508,282,316
Total Liabilities &Equities
5,508,282,316
The above table shows the Balance Sheet of Square Textiles Ltd. as
presented in their annual report. According to this balance sheet the book
value of Square Textiles shares for the day December 31, 2009 should be
44.19 Taka. But in reality we can see that the actual market price on that
day was much higher than that, 111.54 Taka.
Fi 1 C i b t M k t V l & B k V l f S
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at cost less accumulated depreciation. But, as suggested by the Time
Value of Money concept, price changes as time passes. Moreover, the
depreciation was charged using the Straight Line method. From this
analysis above we reach to a conclusion that the values of fixed assets are
undermined. The asset composition shows that a significant 30% of fixed
assets are land and building which have been recorded at historical cost.
But over the years these assets market price has significantly increased
which has not been reflected in the balance sheet.
No Int angible A ssets section : It was found that the company did not
incorporate any Intangible assets in the balance sheet. One of the most
important intangible assets is Trademark which was not considered in
preparing the balance sheet. Square Textiles Ltd. is in operation in
Bangladesh for the last 11 years, since 1997, and has been holding a
healthy position for last several years. They have been profitable with a
fair performance in share market also. So, this is certainly an evidence of
their goodwill which should be valued. The firm recently acquired Mithapur
Textiles and also merged with Square Spinning Ltd. These M&A activities
h b d d t/ h i B t th b d l i d
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Goodwill was added valued as taka 2,000,000,000.
General Reserve and Surplus has been changed from 2,413,563,497
taka to 7,167,104,742 taka.
As a result the Total Assets and Total Liabilities & Equities sides balanced
at taka 10,261,787,561.
Table 2: Balance sheet of Square Textiles Ltd. based on Market value of
share
Balance SheetAssets Liabilities and EquitiesCurrent Assets Current Liabilities
Stocks942,568,13
4
Short Term Bank
Loan
573,802,35
8Trade Debtors
1,683,329,048
Short Term Loan552,993,07
3
Short Term Loan431,848,64
9Sundry Creditors
870,756,515
Advance, Deposits andPrepayments
120,651,506
Other CurrentLiabilities
170,321,074
Cash & Bank Balances 46,332,373Provision for incometax
108,728,783
T t l C t A t 3 224 729 T t l C t 2 276 601
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1.2 Cash Flow Analysis
The statement of cash flows is designed to show how the firms operations
have affected its cash position by examining the investment and financing
decisions of the firm. Often time, the information contained in the
statement of cash flows answer questions like: Is the firm generative the
cash needed to purchase additional fixed assets for growth? Does it have
excess cash flows that can be used to repay debt or to invest in new
products? Information contained in the Cash Flow Statement is useful both
for financial managers and investors. Following is the cash flow analysis of
Square Textiles Ltd.:-
Table 3: Cash Flow Statement for Square Textiles Ltd. for the year 2009
2009 2008Cash flow from operating activitiesReceipts:Cash from sales revenue 3,888,585,2
442,763,272,8
86Cash from other income 259,007 23,676
Total cash receipts 3,888,844,2
51
2,763,296,5
62
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Activities 91) 05)
Cash flow from financing activitiesShort term Bank loan (203,726,22
7)(27,451,291
)Short term loan from/(to) sister Concern 58,058,364 129,959,939Payment of Dividend (105,876,07
9)(98,583,425
)Net Cash Flow From FinancingActivities
(251,543,942)
3,925,223
Net cash position 1,640,898 12,365,318Opening cash & cash equivalents 44,691,475 32,326,157
Closing Cash & Cash Equivalent 46,332,373 44,691,475
1.2.1 Analysis of the Cash Flow:
Net Cash Flow from Operating Activities: The net cash flow from
operating activities was much higher than previous year mainly due to
increase in sales which shows a good sign for the company.
Net Cash Flow from Investment Activities: There is no significant
change in net cash flow from investment activities compared to the
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Sources for these ratios are the company Financial Statements within the
industry that contains figures on assets, liabilities, profits, and losses.
Industry ratios are only meaningful when compared with other
information. Since individual companies are most often compared with
industry data, ratios help an individual understand a company's
performance relative to that of competitors and are often used to trace
performance over time.
There are 5 major categories when ratio analysis is considered. These
categories are:
Liquidity Ratio which gives a picture of a companys short term financial
situation or solvency.
Asset Management Ratio uses turnover measures to show how efficient
a company is in its operations and use of assets.
Debt Management Ratio shows the extent that debt is used in a
company's capital structure.
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Table 1: Current Ratio for Square Textiles Ltd. & Apex Spinning & Knitting
Mills Ltd.
Company Square Textiles Ltd.
ASKML
Year 2009 2008 2007 2006 2005 2004 2003 2009
CurrentRatio 1.35 1.21 1.38 1.12 1.41 1.14 1.01 1.10
We can see from the above data that the current ratio for Square Textiles
is 1.35, which is below the benchmark standard for any company. But
comparing with Apex Spinning & Knitting Mills Ltd., it is higher as Apex
Spinning & Knitting Mills Ltd. has a Current Ratio of 0.89.
Figure 2: Current Ratio Trend
The trend line of current ratio for Square textiles shows that the company
has maintained a somewhat steady current ratio for the last 7 years and
l h h b i i i f l
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Currently Square Textiles is maintaining a quick ratio of 0.96, which is
lower than the Benchmark ratio of 1. But comparing with Apex Spinning &
Knitting Mills Ltd., it is much higher as Apex Spinning & Knitting Mills Ltd.
has a Quick Ratio of 0.075.
Figure 3: Acid Test Ratio Trend
As we can see from the graph above, the quick ratio trend is not steady. It
may indicate that the company has gone for multiple projects/investments
in last few years. The companys quick ratio is pretty much close to the
benchmark of 1.
Overall Comment on Liquidity
The overall liquidity position of the company is not very good but it is
getting better. Both the ratios have increased in 2009. Considering the
length of operation of Square Textiles the performance is quite good
especially in terms of quick ratio as it is pretty close to benchmark. The
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Table: Inventory Turnover for Square Textiles Ltd. & Apex Spinning &
Knitting Mills Ltd.
Company Square Textiles Ltd.
ASKML
Year 2009 2008 2007 2006 2005 2004 2003 2009Inventory
Turnover 3.55 2.04 3.39 4.18 3.79 5.14 5.28 9.56
The inventory turnover for Square Textiles is 3.55 whereas, Apex Spinning
& Knitting Mills Ltd. has inventory turnover of 9.56. So, in this regard,
Square Textiles is in a much worse position.
Figure 4: Inventory Turnover Trend
The trend line does not look very impressive. Inventory turnover is getting
lower. This might be due to increasing price of raw materials and also due
to price reduction to cope up with the competitive market. However, there
is a very sharp rise from 2008 to 2009. This can primarily be attributed to
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During the last year Square Textiles had a DSO of 158.26 days whereas,
Apex Spinning & Knitting Mills Ltd. has DSO of 54.16 days. So, in this
regard, Square Textiles is in a much worse position.
Figure 5: Days Sales Outstanding Trend
The trend analysis shows that during the period 2008 Square Textiles hadthe worst DSO of 202.06. in 2009, it improved a bit. But DSO is still too
high. This may be due to the fact that most of Square Textiles dales are
export sales which naturally take longer to be collected.
Fixed Asset Turnover
This ratio refers to how much sales or revenue is generated by employing
the fixed assets of the company.
AssetsFixedNet
SalesTurnoverAssetsFixed =
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Figure 6: Fixed Asset Turnover Trend
The trend analysis shows that Square Textiles Fixed Asset Turnover
deteriorated for during 2007 and 2008. But in 2009 it got a little better.
Total Asset Turnover
Like the fixed asset, this ratio refers to how much sales or revenue is
generated by employing the fixed assets of the company.
AssetsTotal
SalesTurnoverAssetsTotal =
Table: Total Asset Turnover of Square Textiles Ltd. & Apex Spinning &
Knitting Mills Ltd.
Company Square Textiles Ltd.
ASKML
Year 2009 2008 2007 2006 2005 2004 2003 2009
l
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Overall Comment on Asset Management
Square Textiles is in a worse position than Apex Spinning & Knitting Mills
Ltd. in all the Asset Management Ratio, except for DSO. Though high DSO
is explainable, but the other ratios are not impressive at all.
It seems that the company is not managing its assets very well though
there is an indication that the company is getting better in asset
management.
1.3.3 Debt Management Ratio
Debt Management Ratios judge the debt management performance of a
company. If a company goes for too much debt for financing its
operations, it might end up in a very hard financial situation.
Debt Ratio
The Debt Ratio measures the percent of total funds provided by creditors.
Debt includes both current liabilities and long-term debt.
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Figure 8: Debt Ratio trend
The trend analysis shows that Square Textiles Bangladesh had a high debt
ratio at the end of the year 2003. But after that the debt ratio has started
to go down dramatically. This is actually a very good sign for the company.
The company is managing debt in very efficient way.
Times Interest Earned
EBITTimes Interest Earned =
Interest Charges
Table: Times Interest Earned for Square Textiles Ltd. & Apex Spinning &
Knitting Mills Ltd.
Company Square Textiles Ltd.
ASKML
Year 2009 2008 2007 2006 2005 2004 2003 2009
TIE 3.56 3.53 4.88 6.22 6.85 4.26 2.46 2.06
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Square Textiles Ltd. had much lower debt ratio last year. Higher
profitability might be the reason for what Square Textiles Ltd. did not take
more loans.
Last year Square Textiles Ltd. had much high TIE, which can also be
justified by high profit of the last year.
Square Textiles overall debt management performance is very impressive
which is very good news for the company.
1.3.4 Profitability Ratio
Profitability is the company's ability to generate revenues in excess of the
costs incurred in producing those revenues. Profitability Ration is the
measure of performance showing how much the firm is earning compared
to its sales, assets or equity.
Profit Margin on Sales
Net Income
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The trend analysis shows that Square Textiles profit margin had been
increasing till 2007. But for the last 2 years, we see a declining trend.
Though sales has increased in last few years, the profit margin has gone
down due to decline in price of finished goods and also due to increase in
raw material price
Return on Asset
Net IncomeReturnon Assets=
Total Assets
Table: Return on Assets for Square Textiles Ltd. & Apex Spinning &
Knitting Mills Ltd.
Company Square Textiles Ltd.
ASKML
Year2009 2008 2007 2006 2005 2004 2003 2009
ROA4.73%
4.07%
10.12%
11.18%
9.88%
7.83%
6.71%
1.68%
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Company Square Textiles Ltd.
ASKML
Year 2009 2008 2007 2006 2005 2004 2003 2009
ROE8.36%
7.98%
17.44%
19.70%
16.88%
14.72%
13.61%
3.49%
Last year, it had Return on Equity of 8.36%. It means by utilizing Taka 100
of total equity available to common shareholders, it can have net income
of Taka 8.36. ROE of Square Textiles was better than Apex Spinning &
Knitting Mills ROE of 3.49%.
Figure 12: Return on Equity trend
The ROE trend is quite similar to ROA.
Overall comment on profitability
Square Textiles has been a profitable company almost since its
establishment and during the past few years the Profit Margin ratio has
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P/E Ratio of Square Textiles Ltd. in the last year was higher than that of
Apex Spinning & Knitting Mills Ltd.
Figure 13: Price / Earning Ratio Trend
P/E Ratio of Square Textiles Ltd. climbed up in the last year from 2008.
The company has maintained a healthy P/E ratio for the last 7 years.
Market Value / Book Value Ratio
Market Price per ShareMarket/BookValue Ratio=
BookValue per Share
Table: Market / Book Value for Square Textiles Ltd. & Apex Spinning &
Knitting Mills Ltd.
Company Square Textiles Ltd.
ASKML
Year
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market investors and as a result the share price is quite high compared to
book value which is also reflected in M/B ratio.
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Chapter 2
Stock Price Movement
In this section of the report, we try to relate stock price movement with
different events/corporate decisions like AGM, account closing, dividend
declaration, M&A etc. by doing a simple regression of share price against a
dummy variable populated indicating the event. The value of the dummy
variable is taken as 0 for all dates before the event and 1 for all dates
after the event. Regression was done with a 95% confidence interval.
2.1 Account Closing
Year R2 FSignificanc
e FCo-
efficient
P-Valueof Co-
efficient2008 0.78464 134.805 6.73182E-
14
13.3031746 6.73182E-
14
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2010
16%Cash
15%Bonus
0.5659
58
53.4609
5
6E-09 -10.7548 6E-09
We see significant positive correlation between dividend declaration and
share price in 2008. In later years the correlation is more significant and
there is an increase in R2 which indicates the correlation becoming higher.
If we observe the dividend payout for these years, we find that thecompany has declared lesser and lesser dividends in the later years and
the relation is significantly negative. This suggests that the stockholders
definitely did not like the decrease in dividend payout.
2.3 Record Date
Year R2 FSignificanc
e FCo-
efficient
P-Valueof Co-
efficient
20080.29892
816.62913 0.000217 -8.16857 0.000217
20090.96531
1196.835 5.04E-33 -15.7315 5.04E-33
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The regression results indicate significant relation between AGM and share
price. However the relation was negative in 2008 and 2009 while we find a
significant positive correlation in year 2010. The change in sign of
correlation cannot be explained with available data.
2.5 M&A Activities
Apart from the regular annual events, we were interested to observe the
effect on share price caused by 2 very big decisions made by Square
Textiles in recent years: merger with Square Spinning Ltd. and acquisition
of Mithapur Textiles Ltd.
Decision R2 FSignifica
nce F
Co-
efficient
P-Valueof Co-
efficientMerger with
Square SpinningLtd.
0.39219
1
23.2291
62.6E-05 -3.91818 2.6E-05
Acquisition ofMithapur Textiles
Ltd.
0.000123
0.004814
0.945042 -0.0599 0.945042
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Chapter 3
Prospective Analysis
3.1 Different Growth Rates
It is important to identify a practicable growth rate of a firm to be able to
forecast its share price in future. Different growth scenarios create
different effect on share price. In this study we first consider the following
growth scenarios to observe the effect:
Scenario 1: Growth at Sustainable Growth Rate
Scenario 2: Growth as per Gordon Model
Scenario 3: Growth at GDP Growth Rate
Scenario 4: Optimistic Growth Rate
Scenario 5: Pessimistic Growth Rate
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Total Debt 2,388,878,289
2,421,342,460
2,454,247,810
2,487,600,334
Common Stock 705,840,530 705,840,530 705,840,530 705,840,530Retained Earnings 2,413,563,
4972,455,955,
3032,498,923,
2022,542,475,
022Total Financing 5,508,282,
3165,583,138,
2935,659,011,
5425,735,915,
886External Funds Needed 0 0 0 0Debt: Equity Ratio 0.77 0.77 0.77 0.77
Sustainable GrowthRate 1.36% 1.36% 1.36% 1.36%
EPS 3.69 3.74 3.79 3.85Price (P/E = 30.227) 111.61 113.13 114.67 116.23
1.2 Scenario 2: Growth as per Gordon Model
According to Gordon Model, g=Retention Rate ROE
In our case, Retention Rate = 16%
ROE = 8.36%
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Price (P/E = 30.227) 111.61 113.11 114.63 116.16
1.3 Scenario 3: Growth at GDP growth rate
GDP growth rate = 5.8%
Table: 3 yrs Forecast at g = 5.8%
2009 2010 2011 2012
Sales 3,882,244,010
4,107,414,163
4,345,644,184
4,597,691,547
Net Income 260,634,002
275,750,774
291,744,319
308,665,490
Dividend 218,810,564
231,501,577
244,928,668
259,134,531
Addition to RetainedEarnings
41,823,438
44,249,197
46,815,651
49,530,958
Total Assets 5,508,282,316
5,827,762,690
6,165,772,926
6,523,387,756
Total Debt 2,388,878,289
2,527,433,230
2,674,024,357
2,829,117,770
Common Stock 705,840,530
705,840,530
705,840,530
705,840,530
Retained Earnings 2,413,563,497
2,457,812,694
2,504,628,345
2,554,159,303
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316 779 535 842Total Debt 2,388,878,
289
2,866,653,
947
3,439,984,
736
4,127,981,
683Common Stock 705,840,530
705,840,530
705,840,530
705,840,530
Retained Earnings 2,413,563,497
2,463,751,622
2,523,977,373
2,596,248,273
Total Financing 5,508,282,316
6,036,246,099
6,669,802,639
7,430,070,486
External Funds Needed
0
573,692,6
80
1,262,123,
896
2,088,241,
356Debt: Equity Ratio 0.77 1.09 1.46 1.88Sustainable GrowthRate 1.36% 1.61% 1.89% 2.23%EPS 3.69 4.43 5.32 6.38Price (P/E = 30.227) 111.61 133.94 160.72 192.87
1.5 Scenario 5: Pessimistic
We assume a pessimistic growth rate of -10%
Table: 3 yrs Forecast at g = -10%
2009 2010 2011 2012Sales 3,882,244, 3,494,019, 3,144,617, 2,830,155,
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1.6 Choice of Growth Rate
In the earlier scenarios, we see that high growth rate is not sustainable
and it requires a very high D/E ratio which is not desired. In the trend
analysis section, we found that the firm maintains a Debt Ratio below
50%. Considering this capital structure policy, it is very less likely that the
company will go for debt financing to achieve high growth rates.
We also found out that the sustainable growth rate is also quite similar to
the growth rate found from Gordon Model. So, it seems that the firm is
actually looking to grow at sustainable growth rate. So, we take the
sustainable growth rate to predict future stock price of the company.
1.7 The Plug Variable
As the company policy is to keep the debt ratio below a certain level, the
company has been changing the dividend payout ratio every year. So,
dividend payout is the plug variable here.
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Rm= 50.43%
From these values, cost of equity Rj = 40.25%
The firm has a debt ratio = 43.37%
Weighted Average Cost of Capital = 29.65%
1.9 Share Price according to Gordon Model
According to Gordon Model, share price
P = D1/(k-g) = D0(1+g)/(k-g)
D0 = 3.1 k = 29.65% g = 1.36%
So, P = 12.42
We see that the stock of Square Textiles is highly overpriced. So, it is
highly likely that the share price will go down in future.
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Chapter 2Findings and Conclusions
Square Textiles share price at the end of 2009 BDT 111.54 while its netasset value per share is only BDT 44.19. So, we were interested to find out
the reasons behind this difference and also to predict future price
movement. Following are the key findings in the study:
2.1.1 Financial Performance
Square Textiles is a profitable company
It is not utilizing its assets efficiently. ROA is very low.
The company is not highly levered
The company may have some hidden profit in terms of market value
of their fixed assets especially land and buildings
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lot of trust among the investors. As a result, investors are ready to invest
in the share even with a low return and growth opportunity.
Appendix
A.1 Regression results
A.1.1 Account closing
Year 2008
SUMMARY OUTPUT
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Year 20 10
SUMMARY OUTPUT
Re ression Stati
Multiple R 0.07
R Square 0.0
Adjusted R Square -0.01
A.1.2 Dividend Declaration
Year 2008
SUMMARY OUTPUT
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Year 2010
SUMMARY OUTPUT
Re ression Sta
Multiple R 0.7R Square 0.56
A.1.3 Record Date
Year 2008
SUMMARY OUTPUT
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Year 20 10
SUMMARY OUTPUT
Re ression Sta
Multiple R 0.94R Square 0.88
A.1.4 AGM
Year 2008
SUMMARY OUTPUT
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Year 20 10
SUMMARY OUTPUT
Re ression Sta
Multiple R 0.76R Square 0.58
A.1.5 M&A Activities
Merger with Square Spinning
SUMMARY OUTPUT
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A.2 Weighted Average Cost of Capital
A.2.1 Calculation
SUMMARY OUTPUT
Re ression Sta
Multiple R 0.55
R Square 0.30
A.2.2 Average Market Return
Average weekly return = 0.97%
So, average annual return = 0.97*52 = 50.43%
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A.3 Financial Statements & Performance Data
Square Textiles Ltd.
ASKML2009 2008 2007 2006 2005 2004 2003Current Assets 3,224,729,710 3,437,049,714 1,909,672,000 1,417,780,000 1,391,410,000 1,357,092,000 1,284,065,000 481,192,792
Current Liabilities 2,388,878,289 2,843,250,860 1,382,789,000 1,269,821,000 989,212,000 1,187,839,000 1,267,503,000 436,833,644
Inventory 942,568,134 1,267,785,890 577,163,363 487,871,798 487,753,824 405,449,809 329,015,503 150,077,244
COGS 3,348,870,289 2,589,019,736 1,958,696,404 2,041,065,393 1,847,818,461 2,083,702,523 1,737,055,759 1,434,176,589
AccountsReceivable
1,683,329,048 1,689,670,282 819,360,445 821,199,524 756,736,173 834,989,837 840,066,283 235,362,912
Sales 3,882,244,010 3,052,235,640 2,541,543,000 2,620,966,000 2,390,979,000 2,459,201,000 2,102,670,000 1,586,094,474
Fixed Assets 2,283,552,606 2,370,847,250 1,573,559,000 1,702,906,000 1,193,767,000 1,180,203,000 1,217,332,000 342,491,610
Total Assets 5,508,282,316 5,807,896,964 3,483,231,000 3,120,686,000 2,585,177,000 2,537,295,000 2,501,397,000 823,684,402
Total Debt 2,388,878,289 2,843,250,860 1,382,789,000 1,269,821,000 989,212,000 1,187,839,000 1,267,503,000 437,134,519
EBIT 433,507,033 387,282,778 517,149,366 481,315,121 465,778,608 300,290,342 305,414,202 35,344,028
Interest Expenses 121,730,159 109,701,045 106,026,180 77,350,086 67,966,406 70,530,935 124,160,747 17,176,247
Net Income 260,634,002 236,529,908 352,447,136 348,833,453 255,494,330 198,689,678 167,893,727 13,814,819
Common Equity 3,119,404,027 2,964,646,104 2,020,482,000 1,770,905,000 1,513,511,000 1,349,457,000 1,233,894,000 396,170,995
Market Price 111.54 117.3 127.4 75.6 81.7 138.3 43.1 790
EPS 3.69 4.71 8.94 8.85 6.48 5.04 4.26 16
Book Value 44.19 50.04 51.23 51.65 49.66 48.7 44.53 472
No. of shares 70,584,053 58,820,044 39,433,370 34,289,887 30,479,900 27,709,000 25,190,000 840,000
Dividend payout 218,810,564 223,516,167 177,450,165 154,304,492 129,539,575 110,836,000 100,760,000
Dividend per share 3.10 3.80 4.50 4.50 4.25 4.00 4.00
Source: Annual Reports
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