“PERFORMANCE ANALYSIS OF R. N.

SPINNING MILLS LIMITED.”

 Md. Abdur Rahman
ID: 1403010035
Finance & Banking
5th Batch
Bachelor of Business Administration
Britannia University, Cumilla
 COMPANY PROFILE
NAME OF THE PROJECT R.N. SPINNING MILLS LTD.
FACTORY Cumilla Export Processing Zone, Cumilla.
LEGAL STATUS Public Limited Company
MANAGING DIRECTOR Major AKM Hafiz Ahmed (Retd.)
TYPE OF THE PROJECT Acrylic, Cotton & Synthetic yarn manufacturing
Industries under Textile Sector.
OBJECTIVE • Manufacturing of Acrylic, cotton & Synthetic yarn,
• an import-substitute industry.
AUTHORIZE CAPITAL Tk. 500 Crore
PAID UP CAPITAL Tk. 247.82 Crore
SPONSOR'S EQUITY Tk. 91.31 Crore
GENERAL PUBLIC ISSUE TK. 156.51 Crore
EMPLOYMENT GENERATION 2200
PRODUCTION CAPACITY 30,000 Kgs per day (SYNTHETIC)
11,000 Kgs per day (COTTON)
TOTAL FACTORY SPACE 32,000 Square Miter
COMPANY STATUS KOREA-BANGLADESH Joint Venture Company
 METHODOLOGY
 Data Design  Liquidity ratio
 Current Ratio
 Secondary data  Quick Ratio
 Data Source
 Annual report  Activity Ratio
 Audit report  Total Asset Turnover Ratio
 Audit report
 Financial Leverage Ratio
 Debt-ratio
 inancial text books.

 Analysis  Profitability Ratio

 Income Statement  Return on Asset
 Balance sheet Analysis  Return on Equity
 Cash Flow Analysis  Earnings per share (EPS)
 Ratio Analysis  Market Ratios
 Price/Earning (P/E) Ratio
 ANALYSIS RATIO ANALYSIS
 Liquidity ratio
Current Ratio Quick Ratio
4.5 2
1.87
4 1.8
3.98 3.74 1.6 1.57
3.5
1.4
3 1.32
2.66 1.2
2.5
1 1.11
2 0.88
1.83 0.8
1.5
1.4 0.6
1
0.4
0.5 0.2
0 0
2011-2012 2012-2013 2013-2014 2015-2016 2016-2017 2011-2012 2012-2013 2013-2014 2015-2016 2016-2017

Year Current Ratio Year Quick Ratio

2011-2012 1.40 2011-2012 1.11

2012-2013 2.66 2012-2013 1.32
2013-2014 3.98 2013-2014 1.87
2015-2016 3.74 2015-2016 1.57
2016-2017 1.83 2016-2017 0.88
 ACTIVITY RATIO FINANCIAL LEVERAGE RATIO
Total Asset Turnover Ratio Debt Ratio
0.5 140%

0.45
0.44 120% 123%
0.4

0.35 100%
92%
0.3
80%
0.25
60%
0.2
0.17
0.15
0.12 40%
0.1 0.12
0.1 26%
20% 19%
0.05 16%

0 0%
2011-2012 2012-2013 2013-2014 2015-2016 2016-2017 2011-2012 2012-2013 2013-2014 2015-2016 2016-2017

Year Total Asset Turnover Ratio Year Debt- ratio

2011-2012 0.17 2011-2012 92%

2012-2013 0.12 2012-2013 26%
2013-2014 0.10 2013-2014 19%
2015-2016 0.12 2015-2016 123%
2016-2017 0.44 2016-2017 16%
 PROFITABILITY RATIO
10.00% ROE
ROA
4.07% 60.00%
5.00% 4.57%
1.37% 51.89%
4.79% 50.00%
0.00%
2011-2012 2012-2013 2013-2014 2015-2016 2016-2017 40.00%
-5.00%
30.00% 31.88%
-10.00%
20.00%
16.49%
-15.00%
10.00%
5.28%
-20.00% 0.00%
2011-2012 2012-2013 2013-2014 2015-2016 2016-2017
-25.00% -10.00%

-30.00% -20.00%

-35.00% -35.01% -30.00%

-35.01%
-40.00%
-40.00%

Year ROA Year ROE

2011-2012 4.79% 2011-2012 31.88%

2012-2013 4.07% 2012-2013 51.89%
2013-2014 1.37% 2013-2014 16.49%
2015-2016 (35.01%) 2015-2016 (35.01%)
2016-2017 4.57% 2016-2017 5.28%
 EARNINGS PER SHARE (EPS)
EPS
6

5
5.35

4
3.62
3

2
1.81
1 1.14
0
2011-2012 2012-2013 2013-2014 2015-2016 2016-2017
-1
-0.77
-2

Year (EPS)
2011-2012 3.62
2012-2013 5.35
2013-2014 1.81
2015-2016 (0.77)
2016-2017 1.14
 Ratio Analysis Comparison to Market Leader (2016 – 2017)
Investor R.N. Spinning AL-HAJ TEX
Growth
Annual Revenue Growth -6.95% -21.15%
Liquidity & Leverage
Current Ratio 1.83 2.9
Quick Ratio 0.88 2.45
Cash Ratio 0.02 0.32
Financial Leverage 1.2 2.21
Cash Flow & Capital Adequacy
Operating Cash flow / Sales 0.37 0.05
Profitability & Investment Return
Gross Profit Margin 12.62% 14.35%
Operating Profit Margin 10.44% 7.84%
Net Profit Margin 10.30% 10.91%
ROA 4.57% 5.97%
ROE 5.28% 13.41%
Asset Management & Asset Quality
Total Assets Turnover 0.4439 0.5468
Fixed Assets Turnover 0.67 2.67
Equity Turnover 0.51 1.23
 RECOMMENDATION
 They need to increase their sales by better advertisement process and discount.

 For recover the ROE R.N. Spinning Mills need more common shareholders. They can increase their
Share holder by offering huge returns. Moreover, R.N. SPINNING MILLS also needs to raise its Total
Asset by increasing their investment and Account receivable because both items are poor in amount.

 R.N. Spinning Mills maintain higher Average payment period for better liquidity but it will be cause of
risk in a long run. So need to more concern about delay payment.

 R.N. Spinning Mills should maintain liability strongly, it harm the company year after year.

 R.N. Spinning Mills should improve their Quick debt paying capability.

 R.N. Spinning Mills should improve their share market position by giving dividend regularly.

 R.N. Spinning Mills should develop their Financial Management team & train them properly.