bata anaylsis

8/6/2019 bata anaylsis

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Brief Introduction

Bata Pakistan Limited is incorporated in Pakistan as a Public Limited company and is engaged inthe manufacturing of footwear.

Bata Pakistan Limited having its registered office at BATA, G.T. Road Lahore and factories atMaraka, Multan Road Lahore and Bata Lahore with its Liaison office at Mai Kolachi By-pass,Karachi.

It is also listed on Karachi and Lahore Stock Exchanges.

Their vision is to grow as dynamic, innovative and market driven domestic manufacturer anddistributor, with footwear as our core business, while maintaining a commitment to the country,

culture an d environment in which we operate.

Bata Pakistan Limited is a public limited company incorporated in Pakistan and is quoted on

Lahore and Karachi stock exchanges. The company is engaged mainly in manufacturing and saleof footwear of all kinds.

Vision

To grow as dynamic, innovative and market driven domestic manufacturer and distributor, with

footwear as our core business, while maintaining a commitment to the country, culture andenvironment in which we operate.

Mission

To be successful as the most dynamic, flexible and market responsive organization, withfootwear as its core business.

Current State of Entity

This year, overall sales turnover grew by 12% for the year, despite a very poor first quarter andnegative effect of the earthquake in the last quarter. The sales growth came predominantly from

the retail division which managed to achieve a very creditable growth of 17% in sales. Theperformance in the very important last quarter was particularly impressive with sales growing

30% over the corresponding period of year.

During 2005 they opened a total of 15 new retail stores including new flagship City store onMM Alam Road in Lahore. The results from this large format upgraded store have beenextremely positive and apart from additional turnover generated, this store plus the four other

newly opened city concept stores have done much for enhancing the image of Bata brand.

The operating profit for the year was Rs. 184.5 million which was only marginally better thanprevious year due to higher expenses.


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Profit before tax amounted to Rs. 128.5 million compared to Rs. 178.2 million the previous year.Directors have decided to recommend a final cash dividend at 40% for 2005. The sum of Rs. 53

million is being transferred to general reserves.

At the end of fiscal year, the total number of employees in all divisions numbered 3226 which

was 39 fewer than at the end of year 2004.

Product

Obviously Bata Pakistans products are footwear.

Target Customer

Footwear for children, young, old, male & female is the target customers for Bata Pakistan.

TargetMarket

The target market for Bata Pakistan is the whole Pakistan market.

Analysis Tools

Financial analyses are basic techniques used by investors and managers to analyze basic financial statements.

These analysis are generally begins with the calculation of a set of financial ratios designed to reveal the

relative strengths and weaknesses of a company with other companies in the same industry and to show

whether to companys position has been improving or deteriorating over time.

These analyses are also helpful for the future planning. We can say that these analyses provide asound base for making future planning. For example these financial analyses can be used for:

Innovation of new products.

Determines the interest rates at which money should be borrowed.

Reducing the continue losses by making effective planning.

Determines the strength of the firm to pay its debt as well as its fix cost.

Gives the information about the wealth of owner.

Ratio analyses has limitations, but used with care and judgment can be most helpful.

Actual Balance Sheet (As At Dec 31st 2005)

2005 2004

CAPITALAND

RESERVES


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Authorized capital

10000000ordinary

shares of

Rs. 10each 100,000,000 100,000,000Issued

subscribedand paid

up capital 75,600,000 75,600,000Reserves

& SurplusCapital

reserve 483,000 483,000General

Reserve

510,000,00

0

457,000,0

00Unappropriat

ed profit32,099,00

0 12,523,000

542,582,00

0

470,006,00

0

SHAREHOLDERS' EQUITY 618,182,000

545,606,00

0DEFERRED

LIABILITIES

Provision

forgratuity

67,836,000 66,322,000

LONG TERMDEPOSITES 20,467,000 19,361,000CURRENTLIABILITES

Trade and

otherpayables

431,112,000

448,462,000

Mark-upAccrued 8,607,000 2,196,000

Short termborrowing

s215,766,0

00

168,564,00

0Provision

fortaxation 3,211,000 24,397,000

658,696,000

643,619,000

Contingent

Liabilities &

1,365,181,000

1,274,908,000


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Capital

CommitmentsFIXED

CAPITAL

EXPENDITURE

Operatingfixed assets-tangible 282,645,000

266,487,000

-intangible 1,295,000 2,589,000

283,940,00

0

269,076,00

0LONG TERM

INVESTMENTS 20,467,000 19,361,000LONG TERM

DEPOSITS

AND

PREPAYMENT

S

31,672,00

0

21,906,00

0DEFEREDTAXATION 9,925,000 3,508,000CURRENT

ASSETS

Stores and

spares 29,998,000

37,922,00

0Stock in

trade606,765,00

0

541,247,0

00trade

debts317,722,00

0

314,364,0

00Loan and

advances 691,000 4,234,000Deposits,

short termprepayme

nts andother

receivables 28,953,000 22,803,000

Cash andbank

balance35,048,00

0 40,487,000

1,019,177,000

961,057,000

1,365,181,0

00

1,274,908,0

00

PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED DECEMBER 31,

2005


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2005 2004

Rs. '000s Rs. '000s

NET SALES 2,543,344 2,279,556COST OF

SALES 1,605,938 1,443,722

GROSS PROFIT 937,406 835,834OPERATINGEXPENSES

Selling anddistribution 542,283 462,070

Administrative 210,654 190,186

752,937 652,256

OPERATINGPROFIT 184,469 183,578

FINANCECOST 40,087 19,877

144,382 163,701OTHER

INCOME 2,784 28,807PROFIT FOR

THE YEAR 147,166 192,508OTHER

OPERATINGEXPENSES 18,631 14,311

PROFITBEFORE

TAXATION 128,535 178,197PROVISION

FORTAXATION

Current 54,402 60,562Prior years (3,366) (2,539)

Deferred (6,417) (1,698)

44,619 56,325

PROFIT AFTERTAXATION 83,916 121,872

EARNING PERSHARE Rs. 11.10 Rs. 16.12

Cash Flow Statement for the year ended December 31, 2005

2005

Rs.'000s

2004

Rs.'000s

CASH FLOW FROM

OPERATING


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ACTIVITIESProfit Before Taxation 128,535 178,197

Adjustment For Non - CashCharges And Other Items:

Depreciation 39,657 29,273

Amortization 1,294 1,295Provision For Gratuity 4,547 5,915Profit On Fixes Assets Sold

And Scrapped (1,360) (24,347)Finance Cost 40,087 19,228

84,225 31,368Operating Profit Before

Working Capital Changes 212,760 209,565Net Changes In Operating

Assets And Liabilities (92,367) (26,753)Financing Cost Paid (33,676) (18,807)

Income Taxes Paid (69,424) (57,375)Gratuity Paid (3,033) (1,802)

Net Cash Generated FromOperating Activities 14,260 104,828

CASH FLOW FROMINVESTING

ACTIVITIESPurchase Of Fixed Assets -

Tangible (57,689) (44,218)Purchase Of Fixed Assets

Sold 3,234 24,951Increase In Long Term

Investments (1,106) (648)Net Cash Used In Investing

Activities (55,561) (19,915)

CASH FLOW FROM

FINANCINGACTIVITIES

Change In Short TermBorrowings 47,202 (48,734)

Dividend Paid (11,340) (52,920)Net Cash Provided / (Used

In) Financing Activities 35,862 (101,654)

NET DECREASE IN

CASH AND CASHEQUIVALENTS (5,439) (16,741)

CASH AND CASHEQUIVALENTS AT

BEGINNING OF YEAR 40,487 57,228

CASH AND CASH 35,048 40,487


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EQUIVALENT AT ENDOF YEAR

Statement for Sources & Uses

Items Changes Sources Uses

All Capital & Reserve 72,576 72,576

Provision For Gratuity 1,514 1,514Long Term Deposit 1,106 1,106

Trade & Other Payables (17,350) 17,350Markup Accrued 6,411 6,411

Short Term Borrowings 47,202 47,202Provision For Taxation (21,186) 21,186

Operating Fixed Assets Tangible &

Intangible 14,864 14,864Long Term Investment 1,106 1,106

Long Term Deposit & Prepayments 9,766 9,766Deferred Taxation 6,417 6,417

Stores And Spares (7,924) 7,924Stock In Trade 65,518 65,518

Trade Debts 3,358 3,358Loans And Advances (3,543) 3,543

Receivables 6,150 6,150Cash And Bank Balance (5,439) 5,439

Total 145,715 145,715

CASH FLOW STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2005

Rs.

000s

CASH FLOWS FROM

OPERATINGACTIVITIES

Net Profit after Tax. 83,916Add: Depreciation 39,657

Cash Flow fromoperating Activities 123,573

Changes in Assets exceptchanges in CashStores & Spares 7,924Stock in Trade (65,518)

Trade Debts (3,358)Loans and Advances 3,543


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Deposits & OtherReceivables (6,150)

Deferred Taxation (6,417)Long-term Investments 1,106

Long-term Deposits &

Prepayments (9,766)Changes in All CLTrade & Other Payables (17,350)

Accrued Mark-up 6,411Provision for Taxation (21,186)

Provision for Gratuity 1,514

NET CASH FROM

OPERATINGACTIVITIES 14,326 14,326

CASH FLOWS FROMINVESTING ACTIVITIES

Additions in Fixed Assets (57,689)Disposals of Fixed Assets

(Tangible) 1,874Disposals of Fixed Assets

(In-tangible) 1,294Increase in Long-term

Investments (1,106)

NET CASH USED BY

INVESTINGACTIVITIES (55,627) (55,627)

CASH FLOWS FROMFINANCING

ACTIVITIESIncrease in Short-term

Borrowings 47,202Dividend Paid (11,340)

NET CASH FROMFINANCING

ACTIVITIES 35,862 35,862TOTAL CHANGE IN

CASH (5,439)VerificationCASH AT THE BEGININGOF THE YEAR 40,487

CASH AT THE END OFTHE YEAR 35,048

RATIO ANALYSIS OF BATA PAKISTAN LIMITED 2005

There are five ratios:


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1. Liquidity Ratios2. Activity Ratios3. Leverage Ratios4. Profitability Ratios5. Marketability Ratios

We will discuss all of above thoroughly in the following area.

1: Liquidity Ratios:

Current Ratio = Current Assets / Current Liabilities

Current ratio (2004)=961057 / 643619 = 1.49

Current ratio (2005)=1019177 / 658696 =1.54

Quick (Acid Test) Ratio =(Current Assets - Inventory) / Current Liabilities

Quick Ratio (2004) = (961057 - 579169) / 643619 = 0.59

Quick Ratio (2005) = (1019177-636763) / 658696 = 0.58

Net Working Capital Ratio

Net Working Capital =CA CL if it is positive then we calculates

Shrinkage = NWC / CA

Net Working Capital (2004) = CA CL = 961057 643619 = 317438

Shrinkage = NWC/ CA = 317438 / 961057 = 33.03%

Net Working Capital (2005) = CA- CL = 1019177-658696 = 360481

Shrinkage = NWC / CA = 360481 / 1019177 = 35.36 %

Cash to Current Liabilities Ratio = (Cash + C.E) / CL

Cash to Current Liabilities Ratio(2004)= 40487 / 643619 =0.0629 =6.29%

Cash to Current Liabilities Ratio (2005)= 35048 / 658696 = 5.32%

Cash to Total Assets Ratio = (Cash + C.E) / TA

Cash to Total Assets Ratio (2004) = 40487 / 1274908=0.0317 = 3.17%


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Cash to Total Assets Ratio (2005)= 35048 / 1365181 =0.0256 = 2.56%

Interpretation

The importance of adequate liquidity in the sense of the ability of a firm to meet current/short-

term obligations when they become due for payment can hardly be overstressed. In fact, liquidityis a prerequisite for the very survival of a firm. The short-term creditors of the firm are interestedin short-term solvency or liquidity of a firm.

Current ratio of company improves from 1.49 to 1.54 which is a good sign and but the Acid-testratio, at the same time, decrease which is not a good sign.

Furthermore Acid-test ratio is just satisfactory because obviously it implies that for every 1 Rs.

of liability only Rs. 0.58 available quickly.

Both of the cash ratios of company declines w.r.t previous year.

Since keeping all these things into mind we can say that Bata Pakistan limited is not in a very

good liquid condition. But it might be the sign that the company is investing more in fixed assetswhich are more productive as compared to current assets.

2: Activity / Efficiency Ratios:

Inventory Turnover =Cost of goods sold / Ending Stock Inventory

Inventory turnover ratio (2004)= 2279556 / 579169 = 3.93 times

Inventory turnover ratio (2005)= 1605938 / 636763 = 2.52 times

i) Average age of Inventory =No. of Working days / Inventory turnover

Average age of Inventory (2004)= 360 / 3.93 = 91.6

Average age of Inventory (2005)= 360 / 2.52 =142.85

Average collection Period =Accounts Receivable / Average credit Sales per day

Average collection Period (2004)= 314364 / 6332 = 50 days

Average collection Period (2005)= 317722 / 7064 = 45 days

ii) Accounts Receivable turnover = No. of Working days / Average collection Period

Accounts Receivable turnover(2004)= 360 / 50 = 7.2

Accounts Receivable turnover(2005)= 360 / 45 = 8


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Average Payment Period = Accounts Payable / Average Credit Purchase per day

Average Payment Period (2004) = (448462 x 360) / 753985 = 212.4

Average Payment Period (2005) = (431112 x 360) / 702322 = 219.6

iii) Accounts Payable Turnover = No. of Working days / APP

Accounts payable turnover(2004)= 360 / 212.4 =1.69

Accounts payable turnover(2005)=360 / 219.6 =1.63

Fixed Assets Turn Over Ratios = Sales / Fixed Assets

Fixed Assets turn over ratios (2004)= 2279556 / 269076 = 8.47

Fixed Assets turn over ratios (2005)= 2543344 / 283940 = 8.95

Total Assets Turn Over Ratio =Sales / Total Assets

Total Assets turn over(2004) = 2279556 / 1274908 = 1.78

Total Assets turn over(2005)= 2543344 / 1365181 = 1.86

Sales To Net Worth Ratio =Sales / Net worth Or SHE

Net worth turn over(2004)= 2279556 / 545606 = 4.17

Net worth turn over(2005)= 2543344 / 618182 = 4.11

Interpretation

Activity ratios measure the speed with which accounts are converted into sales or cash. The

inventory turnover of the company declines as compared to last year which implies that companyis not so much active while dealing with its inventory as compared to last year. AAI also raises

w.r.t last year which is not a good sign. ACP is a little bit less than last year which is a good sign.

APP is less by 5 days as compared to last year. Overall the activity ratios of Bata show that

companys activity has declined as compared to last year.

3: Leverage / Gearing Ratios:

Debt ratio = Total Liabilities / Total Assets

Debt ratio (2004)= 729302 / 1274908 = 0.572 = 57.2%


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Debt ratio (2005)= 746999 / 1365181= 0.547 = 54.7%

Debt Equity Ratio = Total Debt / Stock holders Equity

Debt Equity Ratio (2004) = 0 / 545606 = 0:100 times

Debt Equity Ratio (2005)= 0 / 618182 = 0:100 times

EquityMultiplier =Total Assets / Stock holders Equity

Equity Multiplier(2004) = 1274908 / 545606 = 2.33

Equity Multiplier(2005)= 1365181 / 618182 = 2.2

Times Interest earned ratio = EBIT / Interest

Times Interest earned ratio (2004)= 183578 / 19877 = 9.2 times

Times Interest earned ratio (2005)= 184469 / 40087 = 4.6 times

Interpretation

Companys debt ratio decreases as compared to last year and debt-equity ratio is 0:100 times

which means that company is not using any financing which obviously declines companysprofitability. Since company doesnt have any long term debts only short term borrowings are

being utilized in this year. Times interest earned ratio declines from 9.2 times to 4.6 times whichis very bad apparently but in fact its because of reduction of debts.

4: Profitability Ratios:

Gross Profit Ratio = (Gross Profit / Sales) x 100

Gross profit ratio (2004) = (835834 / 2279556) x 100 = 36.66%

Gross profit ratio (2005) = (937406 / 2543344) x 100 = 36.85%

Operating Profit Ratio = (Operating profit / Sales) x 100

Operating Profit Ratio (2004)= (183578 / 2279556) x 100 = 8.05%

Operating Profit Ratio (2005)= (184469 / 2543344) x 100 = 7.25%

Net Profit Ratio = (NPAT / Sales) x 100

Net Profit ratio (2004)= (121872 / 2279556) x 100 = 5.34%


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Net Profit ratio (2005) = (83916 / 2543344) x 100 = 3.29%

Basic Earning Power =(EBIT / TA) x 100

Basic Earning Power(2004) = (183578 / 1274908) x 100 = 14.39%

Basic Earning Power(2005) =(184469 / 1365181) x 100 = 13.51%

Return on Assets = (NPAT / TA) x 100

Return on Assets (2004)= (121872 / 1274908) x 100 =9.5%

Return on Assets (2005) = (83916 / 1019177) x 100 = 8.23%

Return on Equity = (NPAT / S.H.E) x 100

Return on Equity (2004)= (121872 / 545606) x 100 = 22.33%

Return on Equity (2005)= (83916 / 618182) x 100 = 13.57%

Interpretation

Gross profit ratio is almost same as of the last year but operating profit ratio decrease which

show that company increases its operating expenses which is not good. Due to this entire netprofit ratio also decreases.

Overall firms profitability this year is not very good, even, return on equity decreases even by

almost 50%.

5:Marketability Ratios:

Earning Per Share =(NPAT Dividend on P.S.) / Outstanding common stock

Earning Per Share (2004)= 121872000 / 7560000 = Rs. 16.12

Earning Per Share (2005)= 83916000 / 7560000 = Rs. 11.10

Dividend Per Share =Dividend Paid / Outstanding common stock

Dividend per share (2004)= 52920000 / 7560000 = Rs. 7

Dividend per share (2005)= 11340000 / 7560000 = Rs. 1.5

Dividend payout ratio = Dividend per share / Earning per share

Dividend payout ratio (2004)= 7 / 16.12 = 0.4342 = 43.42%


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Dividend payout ratio (2005)= 1.5 / 11.1 = 0.1351 = 13.51%

Flow Back Ratio = (1 Dividend payout) x 100

Flow Back Ratio (2004)= 56.58%

Flow Back Ratio (2005)= 86.49%

Dividend Yield = (Dividend per share / Current market price) x 100

Dividend Yield (2004)= 6.34%

Dividend Yield (2005)= 4.44%

Price Earning Ratio =Current M.P of C.S / EPS

Price Earning Ratio (2004)=4.4 times

Price Earning Ratio (2005)=8.11 times

Break up Value per share (2004) = Rs. 72.17

Break up Value per share (2005) = Rs. 81.77

Market Price per share (2004) = Rs. 71

Market Price per share (2005)= Rs. 90

Interpretation

It measures the return earned on owners investment in the firm. Companys EPS declines by Rs.

5 which is due to decrease in net profit & a very less amount of profit is paid as dividend thisyear as compared to last years which is not a good sign with the point of view of investor.

Common Statement Analysis

In common statement analysis we are having two types of analysis these are given below:

1. Vertical Analysis

2. Horizontal Analysis

We will discuss these in the light of Profit & Loss Account as well as Balance Sheet.

Common

Statement


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AnalysisProfit And

Loss AccountVertical

Analysis

2005 2004

Rs. '000s %AGE

Rs.'000s %AGE

NET SALES 2,543,344 100% 2,279,556 100%COST OF

SALES 1,605,938 63.14 1,443,722 63.33GROSS

PROFIT 937,406 36.86 835,834 36.67OPERATING

EXPENSESSelling and

distribution 542,283 462,070Administrative210,654 190,186

752,937 29.60 652,256 28.61OPERATING

PROFIT 184,469 7.25 183,578 8.05FINANCE

COST 40,087 1.58 19,877 0.87

144,382 163,701

OTHERINCOME 2,784 0.11 28,807 1.26

PROFIT FORTHE YEAR 147,166 5.79 192,508 8.44

OTHEROPERATING

EXPENSES 18,631 0.73 14,311 0.63PROFIT

BEFORETAXATION 128,535 5.05 178,197 7.82

PROVISIONFOR

TAXATIONCurrent 54,402 60,562

Prior years (3,366) (2,539)Deferred (6,417) (1,698)

44,619 1.75 56,325 2.47PROFIT

AFTERTAXATION 83,916 3.30 121,872 5.35

HorizontalAnalysis


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NET SALESCOST OF

SALES 2005 2004 CHANGE

%AGE

CHANGEGROSS

PROFIT

2543344000 2279556000 263,788,000 11.57OPERATINGEXPENSES 1605938000 1443722000 162,216,000 11.24

937406000 835834000 101,572,000 12.15OPERATING

PROFIT

Selling and

distribution 542283000 462070000Administrative 210654000 190186000

FINANCECOST 752937000 652256000 100,681,000 15.44

184469000 183578000 891,000 0.49OTHER

INCOME 40087000 19877000 20,210,000 101.68PROFIT FOR

THE YEAR 144382000 1637010002784000 28807000 (26,023,000) (90.34)

OTHEROPERATING

EXPENSES 147166000 192508000 (45,342,000) (23.55)PROFIT

BEFORETAXATION

PROVISIONFOR

TAXATION 18631000 14311000 4,320,000 30.19128535000 178197000 (49,662,000) (27.87)

Current 54402000 60562000PROFIT

AFTERTAXATION Prior years -3366000 -2539000

Deferred -169800056325000 (11,706,000) (20.78)

121872000 (37,956,000) (31.14)

Balance SheetVertical Analysis

2005 2004

Rs. '000s%AGERs. '000s%AGECAPITAL AND

RESERVESAuthorize

d capital10000000 100,000 100,00


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ordinaryshares of

Rs. 10each

0

Issued

subscribedand paidup capital 75,600 5.54% 75,600 5.93%

Reserves& Surplus

Capitalreserve 483 483

GeneralReserve

510,000 457,000

Unappropriated profit 32,099 12,523

542,582 39.74% 470,006 36.87%SHAREHOLDER

S' EQUITY 618,182 45.28%

545,60

6 42.80%

DEFERRED

LIABILITIESProvision

forgratuity 67,836 4.97% 66,322 5.20%

LONG TERMDEPOSITES 20,467 1.50% 19,361 1.52%

CURRENTLIABILITES

Trade andother

payables431,11

2 448,462Mark-up

Accrued 8,607 2,196Short term

borrowings

215,766 168,564

Provisionfor

taxation 3,211 24,397

658,69

6 48.25% 643,619 50.48%

1,365,18

1

100.00

%

1,274,90

8

100.00

%

Balance SheetHorizontalAnalyses


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2005 2004 Change

%ageChang

eCAPITAL AND

RESERVES

Authorizedcapital10000000

ordinaryshares of

Rs. 10each 100,000,000

100,000,000

Issuedsubscribed

and paidup capital 75,600,000

75,600,000 - 0.00%

Reserves& Surplus

Capitalreserve 483,000 483,000

GeneralReserve 510,000,000 457,000,000

Unappropriated profit 32,099,000 12,523,000

542,582,000 470,006,00072,576,000

15.44%

SHAREHOLDERS' EQUITY

618,182,000 545,606,000

72,576,000 13.30%

DEFERREDLIABILITIES

Provisionfor

gratuity 67,836,000

66,322,00

0 1,514,000 2.28%

LONG TERM

DEPOSITES 20,467,000 19,361,000 1,106,000 5.71%

CURRENT

LIABILITESTrade and

otherpayables 431,112,000

448,462,000

Mark-upAccrued 8,607,000 2,196,000

Short termborrowing

s 215,766,000

168,564,0

00Provision 3,211,000 24,397,00


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fortaxation

0

658,696,000

643,619,000 15,077,000 2.34%

1,365,181,0

00

1,274,908,0

00FIXEDCAPITAL

EXPENDITUREOperating fixed

assets-tangible282,645,00

0 266,487,000-intangible 1,295,000 2,589,000

283,940,000 269,076,00014,864,000 5.52%

LONG TERMINVESTMENTS 20,467,000 19,361,000 1,106,000 5.71%

LONG TERM

DEPOSITS AND

PREPAYMENTS 31,672,000 21,906,000 9,766,000 44.58%

DEFEREDTAXATION 9,925,000 3,508,000 6,417,000 182.92%

CURRENTASSETS

Stores andspares 29,998,000

37,922,000

Stock intrade 606,765,000

541,247,000

trade debts 317,722,000

314,364,000

Loan andadvances 691,000 4,234,000

Deposits,short term

prepayments and

otherreceivables28,953,000

22,803,000

Cash andbank

balance 35,048,000

40,487,00

0

1,019,177,0

00 961,057,000

58,120,0

00 6.05%

1,365,181,0

00

1,274,908,0

00


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Answers to Analytical Questions

Q#1: Would you like to invest as an equity investor in this company?

Ans.NO I dont like to invest in Bata Pakistan Limited because its current year Because

Result of activity ratios for this year is not very good

Company didnt handle operating expenses in good manner for this year

Its EPS declines By Rs. 5 this year

Only 0.4% dividend is given in this year

Q#2: would you like to extend a long-term loan to this company?

Ans. Yes, I would like to extend long term loan to the company because

Companys times interest earned ratio is satisfactory

It has a good reputation in market

Its debt ratio decreases this year

Its debt equity ratio is 0:100 times i.e. currently it is not using any long term financing

Company is continuously growing from last many years only this year its performance in a bit

low because of earthquake otherwise it has very good growth in previous years.

Q#3: would you like to extend a short-term loan to Bata?

Ans. Yes, I would like to extend short term loan to the company because

Companys liquidity ratios yield sufficient results

It has a good reputation in market

No risk involved

Its activity ratios are very satisfactory in previous years

Its debt ratio decreases this year

Its cash flows are satisfactory for this year

Its debt equity ratio is 0:100 times i.e currently it is not using any long term financing.


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Q # 4 Suppose you are existing owner of Bata Pakistan how do you find it?

Ans. To be an existing owner of Bata Pakistan I really would like to improve some of its featureslike customer service etc.

Conclusion

I really enjoyed so much while preparing this report. Its really very useful for me in myprofessional career. Thanks God I have finished it. I think Bata should try to reduce its operating

expenses and furthermore think about its activity ratios it is more important for them. And thefact that I want to say here again Batas performance in previous years was very good, in this

year company has to bear some losses and make some improvements due to which itsperformance looks not so attractive this year.

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bata anaylsis

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