Navana by regan rose

View with images and charts A case Study of Navana Biponon Limited Company Introduction

Biponon Limited came into being in 1996 as a specialized company in the field on Medical & Health Sector. This company comprises a team of experienced & trained Bio-Medical & Electro-Medical Engineers and also a group of skilled marketing professionals. Within a short span of time Biponon has already positioned itself as market leader in medical and scientific equipment. Also it has proved its reliability by providing its customer prompt and satisfactory after sales service. The area and departments where this company is doing business are Medical & Health Sector and has been successfully doing business in Ministry of Health, CMSD, DGMS, DGDP, Atomic Energy Commission, Probin Hospital, ICMH, Diabetic Association of Bangladesh, etc.

Biponon Limited has commenced its proceedings with a great motto to contribute in the countries Health Sector to improve its quality of various Diagnostics, Medical & Laboratory Equipment by supplying them various advanced and sophisticated scientific and medical equipment. The company has already executed a good number of supplies and an EC funded project worth approximately US $ 5.0 million, which is considered to be the largest single project of its kind. Historical Backgrounds

Navana Limited, the flagship company of the Navana Group (previously Islam Group) was established in 1964 by then Groupâ&#x20AC;&#x2122;s founder Mr. Jahurul Islam and had an auspicious step into the business under an exclusive distributorship agreement with TOYOTA of Japan to market Toyota cars in the then East Pakistan. In the trading front, the Group has brought into existence a separate trading unit in 1996 namely Biponon Limited. This company commenced business in the potential field of Health and Medical Equipment Sector. And within a short span of one year since its commencement it was awarded with one of the biggest single tender under the Ministry of Family & Welfare, worth of US $ of 5.0 million to supply $ installation of Medical Equipment under EC finance. The Management of the Navana Biponon Limited Navana Biponon Limited is managed by the Board of Directors, a technical personnel and a Management Committee. The management of is simply exceptional in comparison to any other listed companies in this country. It has a blend of professionalism and wisdom, which plays a key role in managing the champion organization. The Board of Directors includes: 1. Mr. Shafiul Islam Kamal- Chairman 2. Mrs. Khaleda Islam â&#x20AC;&#x201C; Director 3. Mr. Saiful Islam Shuman- Director 4. Mr. Sajedul Islam- Director Technical Personnel The Technical personnel are accountable for both operational and Technical performance of the company. This committee is also responsible for policy adoption or changes, new project review, their technique. Technical Personnel: 1. 2. 3. 4. 5.

Engr. Mahabub Quddus- Deputy Manager Md. Shahidul Islam- Service-Engineer Mr. Md. Nazmul Hasan- Service-Engineer Mr. Md. Mohiuddin- Assistant Service-Engineer Mr. Md. Asif Iqbal- Assistant Service-Engineer

The Management Committee The management committee reviews and manages day-to-day business operation and recommends strategy options to the Technical personnel.

The Management Committee: 1. Mr. Shafiul Islam Kamal- Chairman 2. Mr. Saiful Islam Sumon- Director 3. Engr. Malaya Mahanta- General Manager Mission & Vision Every organization has got mission & vision Navana Biponon Limited is not in difference. Its mission & vision have been given bellow: Mission “Each of the activities must benefit and add value to the common wealth of the society. We firmly believe that in the final analysis we are accountable to each of the constituents with whom we interact namely our employees our customers, our business associates, our fellow citizens and shareholders. Vision “Our vision building a healthier tomorrow where our fellow citizens will live longer, healthier and happier. Our activities have always been centered on developed core competencies to deliver the best in the industry ensuring superior value and return to our customers.” Product / Services Product: The company aims to import the most robust equipment in the domestic market. In 2006 twenty (20) products were launched in the domestic market. Some major are given bellow1. 2. 3. 4. 5. 6. 7.

M.R.I C.T. Scan X-ray Colour Dropler Ultra Sound C.R. Machine AGFA Flim

NAVANA BIPONON LTD. BALANCE SHEET At the End of June 30, 2003 Particular Non – Current Assets Property, Plant & Equipment Investment Pre- Production Expenses

Amount 290,233,403 163,623,850 124,745,734 1,863,819

Current Assets

97,242,746

Inventories

67,769,429

Accounts Receivables Inter Project Current Account Advance, Deposit & Prepayments Cash and Bank Balances Total assets

4,943,237 112,544,564 9,809,058 2,176,458 387,476,149

EQUITY AND LIABILITIES Capital and reserves

(316,892,790)

Issued Capital Tax- holiday Reserve Retained Earnings Non Current Liabilities Long Term Borrowings – Net of Current Maturity ( Secured ) Current Liabilities Short Term Borrowings – Secured Long Term Borrowings – Current Maturity ( Secured) Inter Project Current Account Creditors and Others Payable Accrued Expenses Dividend Payable Total Liabilities and Shareholders’ Equity

203,597,600 4,156,589 (524,646,979) 704,368,939 370,571,751 291,051317 3,089,711 39,656,160 387,476,149

NAVANA BIPONON LTD. BALANCE SHEET At the End of June 30, 2004 Particular Non – Current Assets Property, Plant & Equipment Investment Pre- Production Expenses Current Assets

Amount 282,402,881 156,725,237 124,745,734 931,910 71,015,513

Inventories Accounts Receivables Inter Project Current Account Advance, Deposit & Prepayments Cash and Bank Balances Total assets

30,932,924 14,715,007 13,116,534 9,026,618, 3,224,430 353,418,394

EQUITY AND LIABILITIES Capital and reserves

(41,087,336)

Issued Capital Tax- holiday Reserve

203,597,600 4,156,589

Retained Earnings Non Current Liabilities Long Term Borrowings – Net of Current Maturity ( Secured ) Current Liabilities Short Term Borrowings – Secured Long Term Borrowings – Current Maturity ( Secured) Inter Project Current Account Creditors and Others Payable Accrued Expenses Dividend Payable Total Liabilities and Shareholders’ Equity

(248,841,525) 180,052,000 214,453,730 136,766,833 22,504,000 27,119,019 3,498,470 24,565,408 353,418,394

NAVANA BIPONON LTD. BALANCE SHEET At the End of June 30, 2005 Particular Non – Current Assets Property, Plant & Equipment Investment Pre- Production Expenses Current Assets

Amount 360,292,059 264,467,064 95,824,995 91,254,406

Inventories Accounts Receivables Inter Project Current Account Advance, Deposit & Prepayments Cash and Bank Balances Total assets

44,036,877 16,791,135 5,204,324 20,132,387 5,089,683 451,546,465

EQUITY AND LIABILITIES Capital and reserves

(37,124,233)

203,597,600 (240,721,833) 315,650,415 173,020,283 136,982,667 15,69,489

Accrued Expenses Dividend Payable Total Liabilities and Shareholders’ Equity

4,551,555 15,836,572 451,546,465

NAVANA BIPONON LTD. BALANCE SHEET At the End of June 30, 2006 Particular Non – Current Assets Property, Plant & Equipment Investment Pre- Production Expenses Current Assets

Amount 344,147,713 268,322,718 75,824,995 150,587,991

Inventories Accounts Receivables Inter Project Current Account Advance, Deposit & Prepayments Cash and Bank Balances Total assets

78,205,428 32,779,422 24,799,183 14,803,958 494,735,704

EQUITY AND LIABILITIES Capital and reserves

(25,741,388)

Issued Capital Tax- holiday Reserve Retained Earnings Non Current Liabilities Long Term Borrowings – Net of Current Maturity ( Secured ) Current Liabilities Short Term Borrowings – Secured Long Term Borrowings – Current Maturity ( Secured) Inter Project Current Account Creditors and Others Payables Accrued Expenses Dividend Payable Total Liabilities and Shareholders’ Equity

NAVANA BIPONON LTD. PROFIT & LOSS ACCOUNT

203,597,600 (229,338,988) 296,406,348 224,070,744 149,053,596 32,713,514 2,524,387 23,447,449 4,352,357 11,979,441 494,735,704

At the End of June 30, 2003 Particular Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Administrative Expenses Selling & Distribution Expenses Finance Cost Profit /( Loss) from Operation Add Other Income Net Profit ( Loss) for the Year Contribute to Workers’ Profit Participation Fund Net Profit before Income Tax Profit/ ( Loss) brought forward Profit/ ( Loss) carried forward Earnings Per Share Number of Shares used to compute EPS

Amount 45,624,741 (36,986,928) 8,637,813 (30,433,928) (10,613,442) (19,819,734) (21,795,363) (95,095,576) (116,890,939) (116,890,939) ((116,890,939) (407,756,040) (524,646,979) (57.41) 2,035,976

NAVANA BIPONON LTD. PROFIT & LOSS ACCOUNT At the End of June 30, 2004 Particular Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Administrative Expenses Selling & Distribution Expenses Finance Cost Profit /( Loss) from Operation Add Other Income Net Profit ( Loss) for the Year Contribute to Workers’ Profit Participation Fund Net Profit before Income Tax Profit/ ( Loss) brought forward Profit/ ( Loss) carried forward Earnings Per Share Number of Shares used to compute EPS

Amount 66,825,568 (48,924,408) 17,901,160 (31,573,182) (7,730,336) (23,842,846) (13,672,022) (7,764,038) (21,436,060) (21,436,060) (21,436,060) (227,405,465) (248,841,525) (10.53) 2,035,976

NAVANA BIPONON LTD. PROFIT & LOSS ACCOUNT At the End of June 30, 2005 Particular Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Administrative Expenses Selling & Distribution Expenses Finance Cost Profit /( Loss) from Operation Add Other Income Net Profit ( Loss) for the Year Contribute to Workers’ Profit Participation Fund Net Profit before Income Tax Profit/ ( Loss) brought forward Profit/ ( Loss) carried forward Earnings Per Share Number of Shares used to compute EPS

Amount 159,766,207 (102,764,066) 57,002,141 (44,958,594) (9,222,754) (35,735,840) 12,043,547 (5,537,092) 6,506,455 840,342 7,346,797 7,346,797 (248,068,630) (240,721,833) 3.61 2,035,976

NAVANA BIPONON LTD. PROFIT & LOSS ACCOUNT At the End of June 30, 2006 Particular Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses Administrative Expenses Selling & Distribution Expenses Finance Cost Profit /( Loss) from Operation Add Other Income Net Profit ( Loss) for the Year Contribute to Workers’ Profit Participation Fund Net Profit before Income Tax Profit/ ( Loss) brought forward

Amount 249,846,035 (155,278,202) 94,567,833 (67,200,531) (12,866,157) (54,334,374) 27,367,302 (15,783,912) 11,583,390 735,937 12,319,327 586,635 11,732,692 (241,071,680)

Profit/ ( Loss) carried forward Earnings Per Share Number of Shares used to compute EPS

(229,338,988) 5.76 2,036,976

NAVANA BIPONON LTD. Statement of Changes in Equity Particular

Amount in Amount in Amount in Amount in Taka Taka Taka Taka 30.06.2003 30.06.2004 30.06.2005 30.06.2006

Issued Capital

203,597,600

Tax- holiday Reserve Retained Earnings : Net Accumulated Profit ( Loss) Net Profit /(Loss) for the Year Net Accumulated Profit ( Loss) ( Balance Transferred to balance Sheet ) Shareholders’ Equity at the end of the Year No. of Ordinary Shares Face Value Per Share Shareholders’ Equity Per Share

4,156,589

(407,756,040)

(227,405,465)

(248,068,630)

(241,071,680)

(116,890,939) (524,646,979)

(21,436,060) (248,841,525)

7,346,797 (240,721,833)

11,732,692 (229,338,988)

(316,892,790)

(41,087,336)

(37,124,233)

(25,741,388)

2,035,976

100 (155.65)

100 (20.18)

100 (18.23)

100 (12.64)

NAVANA BIPONON LTD. Cash Flow Statement Particular

Amount in Amount in Amount in Amount in Taka Taka Taka Taka 30.06.2003 30.06.2004 30.06.2005 30.06.2006

Cash Flows from Operating Activities : Cash Received Customers

from 57,256.646

57,053,798

157,690,079

233,857,748

Cash Paid to Suppliers and (54,062,358) Employees

(37,964,612)

(189,758,159)

(240,996,835)

Cash Generated Operation

19,089,186

(32,068,080)

(7,139,087)

(1,031,321)

(1,732,478)

(2,667,797)

18,057,865

(32,960,216)

(9,070,947)

(4,434,767)

(124,881,747)

(30,626,734)

28,920,739

20,000,000

(4,434,767)

(95,961,008)

(10,626,734)

12,46,855

19,364,544

(11,383,585)

7,728,11

116,480 1,711,562

(15,090,752) (16,848,918)

(8,728,836) 113,310,249

(3,857,131) 25,540,376

13,874,897

(12,575,126)

93,797,828

29,411,956

1,155,967 1,020,491

1,047,972 1,276,458

1,865,253 3,224,430

9,714,275 5,089,683

2,176,458

2,324,430

5,089,683

14,803,958

from 3,194,288

Other income Income Tax Paid and (460,219) Deducted at Source Net Cash Generated from Operating Activities 2,734,069 Cash Flows from Investing Activates : Acquisition of Property, Plant & Equipment (4,437,024) Invest Liquidate (Net ) (10,783,015) Net Cash Used in Investing Activities : (15,220,039) Cash Flows: from Financing Activities : Received from Associated Companies & others Dividend Paid & Written Off Bank Loans Received ( Repaid ) Net Cash Used in Financing Activates: Net Increase/ Decrease) in Cash & Cash Equivalents Cash & Cash Equivalents at the beginning of the Year Cash & Cash Equivalents at the End of the Year NAVANA BIPONON LTD. Performances at a Glance Amount in Core Taka

SL. No. 1 2 3 4 5 6 7 8 9 10

Particular

2006

2005

2004

2003

Sales Gross Profit /( Loss) Operating Profit / (Loss) Net Profit /(Loss) Earning Per Share (EPS) Dividend Per Share Fixed Asset Investment Net Working Capital No. of Shareholders.

24.98 9.46 2.74 1.17 5.76 10.00 26.83 7.58 (7.35) 8,212

15.97 5.7 1.2 0.73 3.61 26.45 9.58 (8.18) 8,451

6.68 1.79 (1.37) (2.14) (10.53) 15.67 12.47 (14.34) 8,8920

4.56 0.86 (2.18) (11.69) (57.41) 16.36 12.47 (60.71) 6.578

Ratio Analyses Ratio analysis expresses the relationship among selected items of financial statement data. A ratio analysis expresses the mathematical relationship between one quantity and another. The relationship is expressed in terms of either a percentage a rate, or a simple proportion. 1. Liquidity Ratio: Measure of short-term ability of the enterprise to pay its maturing obligations and to meet unexpected needs for cash. 2. Profitability Ratio: Measures of the income or operating success of an enterprise for a given period of times. 3. Solvency Ratio: Measures of the ability of the enterprise to survive over a long period of times. For performance analysis of Navana Biponon Limited. Above of all ratios can be analysis and interoperate in the following waysPerformances Analysis Financial Performances of a company needs the assistance of its financial statement to measure the this type of performance at first we have to establish the following parameters using the balance sheet and profit & loss accounts of a financial statement. A. Liquidity Ratio: Feature

2006

2005

2004

2003

i) Current Ratio :

0.67

0.53

0.33

0.14

0.32

0.27

0.19

0.04

7.62

9.51

4.54

9.23

1.99

2.33

1.58

0.55

Total Current Asset/ Total Current Liabilities ii) Acid Test Ratio: Total Current AssetInventories / total Current Liabilities iii) Accounts Receivable Total Credit Sale / Accounts Turnover : Receivable iv) Inventory Turnover : Cost of Goods Sold/ Average Inventory

B. Market Measurements: Feature

2006

2005

2004

2003

17.35

27.71

(9.50)

(1.74)

0.06

0.04

(0.11)

(0.57)

0.10

1.74

Feature

2006

2005

2004

2003

i) Sales to Cash : Sales / Cash Balance ii) Sales to Accounts Sales / Accounts Receivable Receivable iii) Sales to Inventories Sales / Inventories iv) Sales to Total Asset : Sales / Fixed Asset

16.88 7.62

31.39 9.51

20.72 4.54

20.96 9.23

3.19 0.51

3.63 0.35

-2.16 -0.19

0.67 0.12

i) Price Earning Ratio : ii) Earning Yield: iii) Dividend Yield iv) Dividend Payout Raito:

Make Price Per share Earning Per Share Earning Per Share / Market Price Per Share Dividend Per Share Market Price Per Share Dividend Per Share / Earning Per Share

C. Asset Utilization ratio:

D. Profitability: Feature

2006

2005

2004

2003

i) Gross Profit Gross Profit / Sales Margin : ii) Operating Profit Operating Profit / Sales to Sales iii) Net Income to After Tax Profit / Sales Sales

37.85

35.68

26.79

18.93

4.70

4.60

(32.08)

(256.20)

(91.79)

(150.67)

(37.37)

(1,149.92)

2006

2005

2004

2003

108.22

111.63

181.78

(850.25)

(438.22)

E. Solvency Ratio: Feature

i) Total Debt to Total Liabilities / T. 105.20 Capital : Liabilities + Equity Capital ii) Long Term Long Term (1,151.48) Debt to Equity Debt/Equity Capital : Capital:

A. Liquidity Ratio 1. Current Ratio: 200 150 TDE

100 50

Year

0 2003

2004

2005

2006

It shows the amount of available meet current liabilities of the company. It also shows the short term liquidity of the company. High current ration means high current assets compared to current liabilities. Having high current liability is risky but if the proper matching is possible the company. Should go for high current liability and reduce financial cost. Navane Biponon Limitedâ&#x20AC;&#x2122;s current ration is between .14 to .67. This is not a good current ration because the current liabilities is higher than that of current assets. 2. Acid Test Ratio:

0.35 Acid Test Ratio

0.3 0.25 0.2 0.15

2003

0.1

2004 2005 Year

2006

0.05 0 If the sales stops at any moment how much of the current liabilities company can meet from its current asset. The difference CR and ATR is due to cash & marketable securities. Keeping huge cash balance is not good for the company. Because cash is a non earning asset unless it is deposited in to interest earning accounts. So the difference between CR & ATR should not be large. 4

The difference between Navana Biponon Limitedâ&#x20AC;&#x2122;s is quite high. It means that they maintain 3.5 a high balance, which is not good for the company. B. Activity Ratio: 3 2.5

1. Inventory Turnover: 2

1.5 1 0.5 0

Inventory Turnover

2003

2004

2005

2006

Year

It shows that how many times the company transforms its inventory in to cash. It measures the efficiency of the company. Illogic turnover means more quickly the company is able to convert its inventory in to cash. It means the company requires less capital to invest for the same amount of sales if it can ensure inventory turnover . Inventory turnover for Navana Biponon Limited varied form 0.67 in year 2003, 2.16 in year 2004 3.19 in year 2006 is not good for the company. IT lf 2005 is good for the company. 2. Fixed Assets Turnover Ratio : 0.6 0.5

FAT

0.4 0.3 0.2 0.1 0

2003

2004

2005

2006

Year

Sales to AR

The Fixed assets turnover Ratio measure how effectively the firm uses its plant and equipment to helf generate sales. The ratio of Navana Biponon Ltd. Shows an Increasing trend from the year 2003 to 2006. This indicating that the company is using its fixed assets10 efficiently. 3. Receivable

9 8 Turnover 7 6 5 4 3 2 1 0 2003

Ratio:

2004

2005

2006

Year

Receivable turnover ratio measures liquidity of receivable. Receivable turnover of year 2005 is better because RTR is 3.63 C. Market Measurement Ratio: 1. Price earning Ratio: 30

Price Earning Ratio

25 20 15 10 5 0

2003

2004 2005

-5

2006

-10

The Price earning ratio measures the amount that investors are willing to pay for each taka of a firmâ&#x20AC;&#x2122;s earnings. The level of the price Earning ratio indicates the degree of confidence that inventories have in the companyâ&#x20AC;&#x2122;s future performance. the higher price earning ratio, the higher is investor confidence. Price earning ratio of 2005 is higher than that of others. But the position of year 2004 and 2003 are Negative figure. Gross Profit Marigin

D.Profitability Ratio 1. Gross Profit Margin 40 35 30 25 20 15 10 5 0

2003

2004

2005

2006

Year

Measures Profit generated after consideration of cost of Products Sold. This ratio actually measure the firm controls the cost of inventory or manufacturing the Products and to pass along Price Increases through the Sales of Customers. Navana Biponon Limited’s Gross Profit Ratio is 37.85 that is good sign for the company. 2. Operating Profit Margin Ratio 50 0

2003

2004 2005

2006

OPM

-50 -100 -150 -200 -250 -300 The Operating Profit margin measures the Percentage of each Sales Taka remaining after all costs and expenses other than interest, taxes and Preferred stock dividends are deducted. It re present the “ pure profit” earned on each Sales taka. Operating Profit are “pure” because they measure only the profit earned on operations and ignore interest, taxes and preferred stock dividends. A higher operat9ing profit margin preferred. Navana Bipnon Limited’s Operating Profit Margin in 2006 is higher than that of others. E. Solvency ratio: Debt

Equity Ratio:

200 150 TDE

1. Total

100 50 0 2003

2004

2005

2006

Year

Debt equity ratio measures debt to equity base use the debt carriers risk because is require the interest as well as the principal payment. Findings Considering all those data collect and calculated at last we came to know the about the following situation:  Navana Biponon Limited is in serious liquidity crisis.  It is not highly efficient in dealings with accounts receivables and inventory management.  Navana Biponon Limited should increase its sales & improve its Credit policies.  Gross profit is not bad but it is underweighted due to maintain a huge liabilities.  Operating profit is too poor considering its huge investment.  The company is maintaining a huge loss year after year, but the situation is changing very slowly.  Navana Biponon Limited Maintaining a huge debt capital in comparison with its equity capital, which is also a very bad sign. Conclusion It is not easy task to overcome all those disaster situations at a time. But Navana Biponon Limited trying heart & soul to solve those successfully by utilizing its efficient man power, friendly environment at its office & maintaining world class qualities in its products. Now it is the time to take care the following situation pungently:  Improving its liquidity condition by increasing sales & improving receivables collection.  Improving its long term solvency problems by generating equity capital. If Navana Biponon Limited can do so, then why not we hope for the best? Bibliography • The Annual Report of the Navana Biponon Limited for the year 2006 • The Annual Report of the Navana Biponon Limited for the year 2005 • The Annual Report of the Navana Biponon Limited for the year 2004 • The Annual Report of the Navana Biponon Limited for the year 2003 • Official web site of Navan Biponon Limited http://www.navana .com • Lawrence J. Gitman-Principles of Financial Management • Leopold A. Bernstein John J.wild-Financial Statement Analysis