Financial Analysis of Berger Paints

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School of Business BBA

Term paper on Ratio Analysis

Course Title: FinancialManagement Course Code: FIN 241

Submitted To

Mokta Rani SarkerLecturer

Department of Business AdministrationFaculty of School of Business

UITS

Submitted By

Md. Abu Zafor Ibne Hasan Somir DasId: 08410107 Id: 09410067Mahbuba Ferdoushi Nasrin AkterId: 11310293 Id: 08410021

Date of Submission:27 03 2011

Transmittal Latter



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27 03- 2011

To

Mokta Rani SarkerLecturerDepartment of Business AdministrationFaculty of School of BusinessUITS

Sub: Ratio Analysis for the following year 20005, 06, 07 ,08 & 2009

Dear sir / Mam,

I am very glad and happy to submit the Term paper that you have provided. Myassignment was on Calculate the Ratio Analysis a reputed company.

We appreciate having this term paper. I hope and believe that you will be kind enough toconsider any types of mistakes that occurred at the time of preparing this proposal.Thank you.

Sincerely Yours,

Group 6



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Acknowledgement:

I am very much obliged to those persons who gave their valuable time, opinion and

advice to complete this report.

At first, our intense gratification goes to the almighty that cerate us as a human being and

helps us to come on this study level. I would like to acknowledge to honorable course

lecturer of business mathematics Mokta Rani Sarker Department of Business

Administration, Faculty of School of Business University of Information technology &

Sciences. By providing us the opportunity of preparing this report, he has made us able to

relate the academic knowledge of ratio analysis with practical scenario. Not only this, hehas also contributed much in this project by giving us a successful guideline. It was quite

impossible for me to prepare such type of term paper. Therefore, I am giving him most

gratitude from the core of my heart.

Finally, I want to express our gratitude to all the members of our family and our friends

who have always inspired us in all of our accomplishments. Their support has always

been a source of inspiration for me.



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The Company

Berger Paints is one of the oldest names in the paint industry, yet, it is one of the most technologically advanced companies in the country. It is constantly striving for innovating superior quality products and services. With more than 250

years of rich heritage, Berger manufactures world class paints for all kinds of substrates and also provides unparallel services. Bergers inception was laid out.

In 1760 by a German national named Louis Berger, who started dye and pigment making business in England. Louis involved his family into the business and eventually changed the status of the company to Louis Berger & Sons Limited. Louis successfully refined the process of manufacturing Prussian blue, a deep blue dye. This dye was widely used for the uniforms of many European armies of that time. Production of dyes and pigments evolved into production of paints and coatings, which till today, remains the core business of Berger. The company grew rapidly, by establishing branches all over the world and through mergers and acquisitions with other leading paint and coating manufacturing companies.

Berger Paints started painting Bangladesh since independence. Over the past few decades, Berger has evolved and transformed itself in becoming the leading paint solution provider in the country with a diversified product range that caters to all your painting needs. Berger has heavily invested in technology and Research & Development (R&D) than any other manufacturer in this market. Investment in technology and plant capacity is even more evident from the establishment of Powder Coating and Emulsion plants at the Dhaka factory.

The state-of-the-art Dhaka factory is an addition to Berger's capacity, making it the paint giant in Bangladesh. It sources raw materials from some of the best known names in the world. The superior quality of Berger's products has been possible because of its advanced plants and strict quality controls that match international standards. With its strong distribution network; Berger has reached almost every corner of Bangladesh.

Nationwide Dealer Network, supported by 8 Sales Depots strategically located at Dhaka, Chittagong, Rajshahi, Khulna, Bogra, Sylhet, Comilla and Mymensingh has an unmatched capability to answer to paint needs at almost anywhere in Bangladesh. Bergers one of the prime objectives is to provide best

customer support-connecting consumers to technology through specialized services like free technical advice on surface preparation, color consultancy, special color schemes etc.

Customer satisfaction, Berger offers Home Decor Service from where one can get an array of services pertaining to painting. The product range includes specialized outdoor paints to protect against adverse weather conditions, Color



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Bank, Superior Marine Paints, Textured Coatings, Heat Resistant Paints, Roofing Compounds, Epoxies and Powder Coatings .

VisionBerger Company shall remain as the benchmark in the paint industry by:

Being an innovative and technologydriven Company consistently delivering world-class products ensuring bestconsumer satisfaction through continuous value added service provided by highlyprofessional and committed tem.



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missi

on

We shall increase our turn over by100% in the next five years.

We shall remain socially committed ethical Company.



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Our sprit

Our customers are our partners our people are strength. Our shareholders areour foundations.

We proudly bring inspiration, strength and color tocommunities through affiliation with our customer.



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Corporateo our objective add value to life, to outperform the peers in

terms of longevity, customer service, revenue growth,

b earnings and cash generation. ject

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e

Our strategy is to build long-term partnership with the customers/consumer. Withtheir support, we aim to maximize the potential of our business through acombination of enhanced quality of product, service creative marketing,competitive pricing and cost efficiency.



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Strategy

Ratio Analysis Explanation

Liqudity Ratio CurrentRatio

QuickRatio

InventoryTurnover

Receivable TurnoverRatio

AverageCollectionPeriod

2005 1.83 1.16 3.94 13.02 27.65

2006 1.91 0.91 4.51 15.78 22.82 2007 1.53 0.65 3.91 15.83 22.74

2008 1.45 0.53 4.56 21.00 17.14

2009 1.62 1.00 5.60 18.16 19.82

Comments:

Here the current ratio, quick ratio a little bit of up and down perform butthe company receivable turn over and average collection consistently same. Soher the liquidity ratio is better.



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Operating Efficiency Ratios Fixed

AssetTurnover

Total

AssetTurnover

2005

5.97 1.60

2006

6.07 2.21

2007

6.15 2.15

2008

7.09 2.59

2009

6.76 2.21

Comments:



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This above this graph the fixed asset turnover is increased in 2008

.turn over is also good in the same year, so 2008 the company efficiency ratio isgood.

Leverage Ratios DebtRatio

Debt-to-Equity

Total Debt to TotalCapitalization

Long-Term Debt to TotalCapitalization

2005 0.46 0.00 0.00 0.00

2006 0.39 0.00 0.05 0.00

2007 0.46 0.00 0.15 0.002008 0.48 0.00 0.00 0.00

2009 0.45 0.00 0.00 0.00



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Comments:

Here we see the graph the leverage ratio is shows 2005 to 2008are quite same but 2008 to 2009 debt capitalization and long term debt step lineare almost perform same .

Coverage Ratios TimesInterestEarned

2005 17.86

2006 38.92

2007 28.39

2008 32.21

2009 211.96



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Comments:

Here we se in the graph the Berger company in 2009 interest earnis more then the other fellows years. Over the

Operating Profitability Ratios GrossProfitMargin

OperatingProfitMargin

NetProfitMargin

2005

0.34 0.14 0.15



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2006

0.33 0.14 0.15

2007

0.32 0.13 0.13

2008

0.30 0.12 0.12

2009

0.35 0.14 0.15

Comments:

Here gross profit margin operating profit and net profit margin areperform consistently same so the company operating profitability ratios is goodand stable.

Profitability Ratios Return onTotalAssets(ROA)

ReturnonEquity(ROE)

2005 18.80% 44.24%



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2006 24.12% 54.53%

2007 20.70% 52.98%

2008 23.10% 59.42%

2009 24.06% 58.73%

Comments:

After the analysis we see the company return on equity is morethen the total asset so the company position is better, at that perspective we cansay the company is good.

Valuation Ratios



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EarningsPer Share

DividendperShare

Price/EarningsRatio

P/B (price to book)Ratio

Dividend PayoutRatio

2005 0.05 0.04 2.16 1.00 0.79

2006 0.04 0.05 3.45 1.00 0.72

2007 0.04 0.05 3.46 1.00 0.732008 0.04 0.06 3.40 1.00 0.74

2009 0.04 0.09 5.03 1.00 0.74

Comments:Here the earning per share, divided, price take book and the

divined pay out ratio almost same, in the graph we see here the little bit of .2fluctuation but consistently well.



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Growth Rates EPSGrowthRate

Dividend GrowthRate

Sales GrowthRate

EBIT GrowthRate

Net Income GrowthRate

2005 2006 -30.08% 25.72% 35.42% 37.76% 37.43%

2007 10.04% 8.12% 22.81% 10.52% 7.43%

2008 5.26% 18.07% 27.54% 16.60% 15.93%

2009 -1.32% 44.68% 18.53% 40.29% 44.17%

Comments:

Companys growth rates are up and down far above 2006 the EPSrate increases at the 2009 its decrease gradually and the net income in 2009 ratsis high.



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Conclusions & Recommendation:

This term paper based on real financial statementsBERGER. Through this term paper the changes in BERGER Companys financial position and performance aresummarized and made clearly visible in 2005, 2006, 2007,2008 & 2009.

In conclusion, BERGER Company can firmly say that the continuous achievement of market share and earning the reputation from around the globe are the benchmarks of the success of the company. This success has been earns besides others, obviously by ensuring the highest level of human resources management and conforming to various compliance issues at a level of international standard..

Through this term paper our effort was to understandthe company retained earnings, probability ration growthrates performed well last five years.


Financial Analysis of Berger Paints

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