BEXTEX LIMITED

The Company & Its Significance Accounting Policies

COMPANY OVERVIEW
Bextex Ltd. is a Bangladesh corporation enlisted in the Dhaka and Chittagong Stock Exchanges of Bangladesh. The company was founded to produce world class yarn, fabric and apparel. It was incorporated on 30 May 1984 and began commercial production in 1990. The company was enlisted in the stock exchange in 1992. It has an authorized capital of 3,000 Million Taka and paid up capital of 1,882.50 Million Taka. It is placed as an A category share in the Dhaka Stock Exchange. Bextex Ltd. is the most modern composite mill in the region. Bextex Ltd. has an installed capacity of 288 high-speed air-jet looms in its weaving section and a high-tech dyeing and finishing section with a capacity of 100,000 yards of finished fabric per day. This company is located at the Beximco Industrial Park. Bextex Ltd. has a modern composite knit fabric production mill, which serves the growing needs of high-quality knit garments exporters in Bangladesh. The project was set up as a state of the art knit fabric knitting, dyeing and finishing facility. During the year the Company produced and sold high quality of knit fabrics and bringing forth all the latest in hard and soft technologies in knitting, dyeing and finishing of knit fabric. Bextex Ltd. also has a cotton and polyester blended yarn-spinning mill, with 122,000 spindles is one of the largest spinning mills of the country. The mill was set up to feed the countrys export oriented industries. Bextex Ltd. produces specialized finishes of denim cloth for export in finished as well as cloth only form.

Company history
Bextex was formed in 2006 by the merger of Padma Textile Mills Ltd., Beximco Texiles Ltd., Beximco Knitting Ltd. and Beximco Denims Ltd. The strategy behind the merger was to form a company with a stronger balance sheet in order to more easily raise capital in the international market for expansion and to make the operation more efficient, by cost reduction and achieving economies of scale. The resulting Bextex evolved to offer a complete product range for the export and domestic textile markets.

Company mission
BEXTEX Ltd. is a full service vendor with strong vertically integrated production facilities as well as creative & analytical capabilities which clearly sets us apart from most other South Asian vendors.

Company vision
Gain market leadership in high value added apparel in USA & Europe Use Innovation & Speed as prime drivers, rather than cotton & cheap labour. Dominate these markets in high quality : Mens, Womens , Children Shirts ( Dress & Casual ) Blouses ( formal & casual ) , Skirts, Jackets Jeans & Casual non denim bottoms Knitted tops & bottoms

Market
The domestic and worldwide textile market is large and is expected to grow steadily. In comparison to the competitors, Bextex is the top textile manufacturer in the country and a leading player in the global textile market.

Customers
Bextex has both domestic and international customers. Some of the major retailers and international brands include Calvin Klein, Arizona, Levis, Espirit, VAN Heusen, which is the worlds largest seller of dress shirts and Zara, which is the largest apparel retailer in Europe.

Competitors
Major competitors of Bextex include Monno Fabrics, Square Textile, GMG Ind. Corp. Competitive advantages for the company are the state of the art mills and the employees.

Basis of accounting
The financial statements have been drawn up, in accordance with Bangladesh Accounting Standards (BAS) and Bangladesh Financial Reporting Standards (BFRS), the Companies Act 1994, the Security and Exchange Rules 1987 and other applicable laws and regulations.

FIVE YEARS' STATISTICS

2009 2008 2007 2006 2005
^

Results of Operations:
* Revenue * Gross Profit * Operating Profit * Net Profit/(loss) before tax * Net Profit/(loss) after tax ** Basic Earning per share ** Cash Dividend Per Share Stock Dvidend in % * Cash Generated from/(Used in) Operating Activities
7,866,258 2,929,568 2,615,780 1,098,173 933,447 4.16 15 (775,747) 4,760,237 1,670,052 1,409,417 (608,656) (608,656) (3.23) 10 (1,134,776) 4,267,027 1,245,302 996,034 (983,404) (994,072) (5.28) (407,370) 5,201,514 2,030,146 1,774,503 (200,709) (208,649) (1.11) 10 269,201 2,570,597 499,931 449,975 156,569 123,599 2.03 0.50 10 88,167

Financial Position:
* Total Assets * Fixed Assets - Gross * Fixed Assets - Net * Financial Assets * Reserve and Surplus * Gross Working Capital * Net Working Capital * Authorised Capital * Share holders' Equity * Paid up Capital * Total Long Term Debt
22,155,834 19,678,904 13,416,140 5,056,866 6,581,683 8,677,167 1,993,905 5,000,000 10,637,748 4,056,065 6,683,262 19,086,298 12,915,855 11,805,281 3,812,236 1,469,666 7,230,983 (675,955) 3,000,000 3,552,512 1,882,846 7,826,849 14,738,938 11,579,984 6,805,566 3,492,995 46,824 7,881,489 (177,009) 3,000,000 1,929,670 1,882,846 4,735,768 14,956,940 11,431,174 7,293,540 3,458,925 1,248,829 7,572,906 1,611,525 3,000,000 2,960,507 1,711,678 6,020,051 6,168,193 4,107,057 1,661,658 3,113,777 1,230,994 4,496,276 2,793,425 1,000,000 2,076,601 608,108 2,373,739

Key Financial Ratios, Figures and Market Data:

Current Ratio Debt Equity Ratio Return on Investment
1.79 : 1 0.63 4.21% 0.92 : 1 2.33 -3.19% 0.98 : 1 2.45 -6.74% 1.27:1 2.03 -1.39% 2.64:1 1.14 2.00%

** Net Assets Value per Share Payout Ratio ** Market value of share (at DSE) ** Market value of share (at CSE) Price Earning Ratio (Based on DSE price)(Times) Price Earning Ratio (Based on CSE price)(Times) Others: Number of shares Number of shareholders Number of Employees No. of Employees * Figures in Thousand Taka ** Figures in Taka

42.70 81.40 81.70 19.57 19.64

59.37 23.90 23.80 (7.40) (7.37)

35.48 18.90 18.75 (3.58) (3.55)

52.55 22.50 22.50 (18.44) (18.44)

73.43 73.89% 21.90 22.10 10.79 10.89

405,606,503 50,826

188,284,62 188,284,625 171,167,841 5 37,216 37,929 36,470

60,810,750 9,147

7,189

5,230

5,181

6,206

2,652

Balance Sheet
2007 Amount in Taka ______________ _
6,805,566,691 29,191,074 22,690,877

6,857,448,6 42
7,881,489,387 3,688,016,341 3,451,582,241 729,669,717 12,221,088

14,738,938,0 29

1,929,670,5 58
1,882,846,251 46,824,307

4,750,768,5 46
509,055,554 4,226,712,992 15,000,000

8,058,498,9 25
4,102,515,446 468,550,828 2,342,367,124 1,145,065,527

Note 2009 Amount s in Taka

2008 Amount in Taka

ASSETS Property, Plant and EquipmentCarrying Value Long Term Security Deposits Deferred Assets Total Non-Current Assets Current Assets Inventories Trade Debtors Advances, Deposits and Prepayments Cash and Cash Equivalents Total Assets EQUITY AND LIABILITIES Shareholders' Equity Issued Share Capital Reserves & Surplus Non-Current Liabilities 10% Debentures - Net of Current Maturity (Secured) Long Term Loans-Net of Current Maturity (Secured) Security Deposit from Distributor Current Liabilities Short Term Loans 10% Debentures - Current Maturity (Secured) Long Term Loans - Current Maturity (Secured) Creditors & Accruals Total Shareholders' Equity and Liabilities
12 13 14 11 10,637,748,057 3,352,511,83 6 4,056,065,030 1,882,846,25 1 6,581,683,027 1,469,665,58 5 6,683,261,956 7,826,848,87 9 871,051,272 1,009,534,50 5 7 8 9 10 4 5 6 13,416,139,550 11,805,280,7 97 43,530,686 18,997,013 29,191,074 20,843,945

13,478,667,249 11,855,315,8 16 8,677,166,758 7,230,982,53 8 2,742,675,600 2,733,063,86 4 4,986,086,053 3,765,912,62 2 921,155,433 27,249,672 714,873,842 17,132,210

Tk. 19,086,298,3 22,155,834,007 54

5,797,210,684 6,802,314,37 4 15,000,000 15,000,000

4,834,823,994 7,906,937,63 9 15 16 17 18 2,704,930,953 4,283,771,41 5 173,888,054 1,393,544,111 2,029,139,60 3 562,460,876 1,594,026,62 1 -

Tk. 19,086,298,3 22,155,834,007 54

Profit and Loss Account

6

Notes

2009 Amount
7,866,257, 822 (4,936,690, 149) 2,929,567, 673 (313,997,1 91) (294,146,23 1) (19,850,960 ) 2,615,570, 482 (688,667,96 6) (770,931,09 8) 1,098,172, 847 (164,725,92 7) Tk. 933,446,9

2008 Amount in Taka 4,760,237,189 (3,090,184,887)

2007 Amount in Taka 4,267,027,599 (3,021,725,477) 1,245,302,122 (249,267,456) (235,257,889) (14,009,567) 996,034,666 (1,342,655,622) (636,784,027) (983,404,983) (10,667,569) (994,072,552) (5.28)

Revenue Cost of Revenue Gross Profit Operating Expenses Administrative Expenses Distribution (Selling) Costs

35 36

1,670,052,302 (260,635,288) (240,784,328) (19,850,960) 1,409,417,014 (1,300,656,669) (717,416,211) (608,655,866)

-

39

Profit before Interest, Tax & Depreciation Financial Expenses Depreciation Profit/doss) before Tax Income Tax Expenses Profit/doss) for the year transferred to Statement of Changes in Equity Earnings Per Share (Par value Tk. 10/-) 41 40 20

Tk. (608,655,866) Tk. (3.23)

42

CASH FLOWS STATEMENT

2009 Amount in Taka Cash Flows from Operating Activities : Cash Receipts from Customers and Others Cash Paid to Suppliers and Employees Cash Generated from Operations Interest Paid Income Tax Paid & Deducted at Source Net Cash (Used in) / Generated from Operating Activities Cash Flows from Investing Activities : Acquisition of Property, Plant and Equipment Net Cash Used in Investing Activities Cash Flows from Financing Activities : New Allotment of Shares including Premium Increase /(decrease) in Long Term Borrowings Increase/(decrease) in Short Term Borrowing Net Cash Generated from/(Used in) Financing Activities Increase in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year Cash and Cash Equivalents at End of Year 6,646,084,391 (5,359,326,918) 1,286,757,473 (2,006,166,127) (56,338,512) (775,747,166)

2008 Amount in Taka

2007 Amount in Taka

3,190,602,600 (3,043,303,205) 147,299,395 (1,261,679,027) (20,396,366) (1,134,775,998)

4,223,133,089 (3,788,738,872)

434,394,217
(766,830,156) (74,934,103)

(407,370,042)
(39,250,045)

(2,381,789,851) (2,381,789,851) 6,351,789,302 (1,605,294,361) (1,578,840,462) 3,167,654,479 10,117,462 17,132,210 Tk. 27,249,672

(986,841,760) (986,841,760) 1,945,272,911 181,255,969 2,126,528,880 4,911,122 12,221,088 17,132,210

(39,250,045)

(74,392,816) 511,187,488

436,794,672
(9,825,415) 22,046,503

12,221,088

Financials and Ratio Analysis

Total Revenue Net Income % Growth in Net income by year Price/Earning Ratio ROA ROE
Liquidity Ratio:

2006 4760237 (208649284)

2007 4267027 (994072552)

2008 4760237 (608655866)

-18.44 (1.39)% (7.05)%

-3.58 (6.74)% (51.51)% 2007 0.98 0.52

-7.40 (3.19)% (18.16)% 2008 0.91 0.57

Current Ratio Quick Ratio

2006 1.27 0.65

Current Ratio Analysis In the year 2006, BEXTEX current assets were 1.27 times higher than the current liabilities, in 2007, it was 0.98 times, and in 2008, it was 0.91 times. From 2006 to 2007 the current ratio is reduced 1.27 to 0.98 and from 2007 to 2008 it reduced again to 0.91. From 2006 to 2007 BEXTEX has increased very low amount of current assets relative to its current liabilities. From 2007 to 2008, although it has decreased liabilities, but it is relatively lower than the increase in current assets. BEXTEX should significantly increase its current asset and decrease its current liablities. Quick Ratio Analysis: In the year 2006, BEXTEX current assets excluding inventory were 0.65 times higher than the current liabilities, in 2007 it was 0.52, and in 2008 it was 0.57. From 2006 to 2007 the quick ratio is reduced 0.65 to 0.52 and from 2007 to 2008 it increased to 0.57. From 2006 to 2007, its currents assets and inventory increased slightly while liabilities increase significantly. From 2007 to 2008, current liabilities decreases, but current assets and inventory also decrease relatively more than current liabilities. According to liquidity ratio, it is indicating decreasing trend on liquidity and increasing liabilities. As current ratio is less than 1, it assumes that BEXTEX unable to support its short-term debt from its currents assets. Asset Management Ratio:

2006 Inventory Turnover 1.52 Total Asset Turnover 0.35 Fixed Asset Turnover 0.70 Days Sales Outstanding 239.12 days Average Payment Period 101.12 days
Inventory Turnover Ratio Analysis:

2007 1.16 0.29 0.62 295.25 days 138.31 days

2008 1.74 0.25 0.40 288.76 days 188.28 days

In 2006 BEXTEX sold and restocked its inventory 1.52 times, in 2007 it was 1.16 and 1n 2008 it was 1.74 times. From 2006 to 2007, inventory turnover ratio decreased and from 2007 to 2008 it increased. From 2006 to 2007, total sales were decreased largely relative to inventory. But from 2007 to 2008 sales were increased slightly and inventory also was decreased slightly. BEXTEX should increased its sales. Total Asset Turnover: In 2006 BEXTEXs $1 worth of total assets generated $0.35 sales, in 2007 it was $0.29 and 1n 2008 it was $0.25. From 2006 to 2007, total asset turnover ratio decreased and from 2007 to 2008 it decreased again. From 2006 to 2007, total sales were decreased largely relative to total assets. But from 2007 to 2008 both sales and total assets were increased slightly. Fixed Asset Turnover: In 2006 BEXTEXs $1 worth of fixed assets generated $0.70 sales, in 2007 it was $0.62 and 1n 2008 it was $0.40. From 2006 to 2007, fixed asset turnover ratio was decreased and from 2007 to 2008 it was decreased again. From 2006 to 2007, total sales were decreased largely relative to fixed assets. From 2007 to 2008 fixed assets ware increased significantly relative to sales. Day Sales Outstanding: In 2006 BEXTEX needed 239.12 days to collect cashes, in 2007 it was 295.25 days and in 2008 it was 288.76 days. From 2006 to 2007 Days Sales Outstanding was increased and it decreased slightly from 2007 to 2008. From 2006 to 2007 BEXTEX increased its accounts receivable slightly while it decreased its sales significantly. From 2007 to 2008, BEXTEX has increased its sales slightly relative to its accounts receivable. Average Payment Ratio: In 2006 BEXTEX on an average took 101.12 days to make the payment to creditors, in 2007 it took 138.31 days and in 2008 it took188.28 days. The average payment ratio is lower than the Days Sales Outstanding. It refers Bextexs inefficiency of collecting cash. It must decrease cash collation period than average payment period. Debt Management Ratio:

Debt to Asset Total Debt to Total Equity Times Interest Earned

2006 0.80 4.05 0.86

2007 0.87 6.64 0.27

2008 0.82 4.69 0.53

Debt to Asset Ratio Analysis: In the year 2006, BEXTEXs total debt was 0.80 times higher than its total assets. In 2007 it was 0.87 and in 2008 it was 0.82. From 2006 to 2007 its debt to asset ratio has increased and from 2007 to 2008 it was decreased. From 2006 to 2007 it increased debt relative to its total assets. From 2007 to 2008 it has increased total assets relative to total debt. Total Debt to Total Equity Ratio: In the year 2006, BEXTEXs total debt was 4.05 times higher than its total equity. In 2007 it was 6.64 and in 2008 it was 4.69.

10

From 2006 to 2007 its debt to asset ratio has increased and from 2007 to 2008 it was decreased. From 2006 to 2007 BEXTEX increased debt slightly, but decreased total equity significantly. From 2007 to 2008 it has increased total equity largely relative to total debt. Times Interest Earned: In the year 2006, BEXTEX had very little operating income to pay interest expense and it had operating income only 0.86 times higher than interest expense, in 2007 it was 0.27 and in 2008 it was 0.53. From 2006 to 2007 it decreased its times interest earned ratio, and from 2007 to 2008 it has increased than previous year. From 2006 to 2007 BEXTEX significantly decreased EBIT relative to interest expense, and from 2007 to 2008 it increased largely EBIT relative to interest expense. Profitability Ratio:

2006 Gross Profit Margin 39.03% Net Profit Margin (4.01)% Return on Asset (1.39)% Return on Equity (7.05)%

2007 29.18% (23.29)% (6.74)% (51.51)%

2008 35.08% (12.79)% (3.19)% (18.16)%

Gross Profit Margin Ratio: In the year 2006, BEXTEXs each $100 of sales generated $39.03 of gross profit, in 2007 it was $29.18 and in 2008 it was $35.08. From 2006 to 2007 its gross profit margin ratio declined significantly and from 2007 to 2008 it increased. From 2006 to 2007 its sales was decreased significantly relative to gross profit and from 2007 to 2008 it increased both gross profit and sales. Net Profit Margin: In the year 2006, BEXTEXs each $100 of sales generated $4.01 of net loss, in 2007 it was $23.29 and in 2008 it was $12.79. From 2006 to 2007 its net profit margin ratio declined significantly and from 2007 to 2008 it increased. From 2006 to 2007 its net loss was increased significantly relative to sales and from 2007 to 2008 it decreased net loss significantly, but increased sales slightly. Return on Asset (ROA): In the year 2006, BEXTEXs out of $100 total assets generated $1.39 net loss, in 2007 it was $6.74 and in 2008 it was $3.19. From 2006 to 2007 its return on asset ratio declined significantly and from 2007 to 2008 it increased than previous year. From 2006 to 2007 its net loss was increased significantly relative to its total assets. From 2007 to 2008 it decreased net loss and increased total assets largely. The change in total assets was higher relative to change in net loss.
Return on Equity (ROE): In the year 2006, BEXTEX had a net loss $7.05 per $100 worth of common equity, in 2007 it was $51.51 and in 2008 it was $18.16 From 2006 to 2007 its return on equity ratio declined significantly and from 2007 to 2008 it increased largely than previous year. From 2006 to 2007 its net loss was increased significantly while its total equity was decreased significantly. From 2007 to 2008 it decreased net loss and increased total equity largely. The change in total equity was higher relative to change in net loss.

Stock Market Ratio:

11

Earning per share Price/Earning Market to Book Value

2006 -1.22 -18.44 1.30

2007 -5.28 -3.58 1.84

2008 -3.23 -7.40 1.34

Earning per share ratio analysis: In 2006, BEXTEXs $1 worth of share generated $1.22 losses, in 2007 it was $5.28 and in 2008 it was $3.23. From 2006 to 2007 it decreased earning per share, but from 2007 to 2008 it increased earning per share, although, still it was incurring losses. From 2006 to 2007 BEXTEX could not do any profit, and net loss was increased largely relative to number of common shares outstanding. From 2007 to 2008 although loss was decreased, the number of common shares outstanding was same. Price/Earning Ratio: Because of having negative Price/Earning Ratio, there is no interpretation. Bextex must increase it Price/Earning ratio at least to 1. So it must take steps to increase net income. Market to Book Value: In 2006, BEXTEXs market value of share is 1.30 times higher than book value, in 2007, it was 1.84 and in 2008 it was 1.34. From 2006 to 2007 it has increased market to book Value ratio, and from 2007 to 2008 it has decreased it than the previous year. From 2006 to 2007, it has decreased both stock price and book value, but from 2007 to 2008 it has increased both stock price and book value. Liquidity Ratio Current Ratio Bextexs current ratio is decreasing. In 2000, it was 1.27, in 2001 it was decreased to 0.98, and in 2008 it was again reduced to 0.91. Quick ratio In 2000, Bextexs quick ratio was 0.65, in 2001 it was decreased to 0.52, and in 2008 it was increased to 0.52. Asset Management Ratio: Inventory turnover ratio In 2000, Bextexs inventory turnover ratio was 1.52, in 2001 it was decreased to 1.18, and in 2008 it was increased to 1.74. Total asset turnover ratio There is a decreasing trend in Bextexs total asset turnover ratio. In 2000, it was 0.35, in 2001 it was fallen to 0.29, and in 2008 it was again reduced to 0.25 Fixed asses turnover There is a decreasing trend in Bextexs fixed asset turnover ratio. In 2000, it was 0.7, in 2001 it was fallen to 0.62, and in 2008 it was again reduced to 0.4. Days Sales Outstanding In 2000, Bextexs Days Sales Outstanding was 239.12 days, in 2001 it was increased to 295.25 days, and in 2008 it was decreased slightly to 288.76 days Average payment ratio There is an increasing trend in Bextexs average payment ratio. In 2000, it was 101.12 days, in 2001 it was raised to 138.31 days, and in 2008 it was again increased to 188.28 days.

12

Debt Management Ratio: Debt to Asset In 2000, Bextexs debt to Asset ratio was 0.80, in 2001 it was increased to 0.87, and in 2008 it was decreased to 0.82. Total debt to Total Equity In 2000, Bextexs total debt to total Equity was 4.05, in 2001 it was increased to 6.64, and in 2008 it was decreased to 4.69. Times Interest Earned In 2000, Bextexs times interest earned ratio was 0.86, in 2001 it was decreased to 0.27, and in 2008 it was increased to 0.53. Profitability Ratio: Gross profit margin In 2000, Bextexs gross profit margin ratio was 39.03%, in 2001 it was decreased to 29.18%, and in 2008 it was increased to 35.08%. Net profit margin In 2000, Bextexs net profit margin ratio was -4.01%, in 2001 it was decreased to -23.29%, and in 2008 it was increased to -12.79%. Return on Asset In 2000, Bextexs return on asset ratio was -1.39%, in 2001 it was decreased to -6.74%, and in 2008 it was increased to -3.19%. Return on Equity In 2000, Bextexs return on equity ratio was -7.05%, in 2001 it was decreased to -51.51%, and in 2008 it was increased to -18.16%. Stock Market Ratio: Earning Per Share In 2000, Bextexs earning per share ratio was -1.22, in 2001 it was decreased to -5.28, and in 2008 it was increased to -3.23. Price per earning ratio In 2000, Bextexs price per earning ratio was -18.44, in 2001 it was increased to -3.58, and in 2008 it was decreased to -7.4. Market to Book Value In 2000, Bextexs market to book value ratio was 1.3, in 2001 it was increased to 1.84 and in 2008 it was decreased to 1.34.

Liquidity Ratio: Formula Current Current Assets Ratio Current Liabilities Quick Current Assets Ratio Inventories Current Liabilities Asset Management Ratio: Formula Inventory __Sales__ Turnover Inventory Total Asset ___Sales___ Turnover Total Assets Fixed Asset ___Sales___

2006 7572906611 5961381357 75729066113414768025 5961381357 2006 5201514097 3414768025 5201514097 14956940754 5201514097

2007 7881489387 8058498925 78814893873688016341 8058498925 2007 4267027599 3688016341 4267027599 14738938029 4267027599

2008 7230982538 7906937639 72309825382733063864 7906937639 2008 4760237189 2733063864 4760237189 19086298354 4760237189

13

Turnover Fixed Assets Days Sales Accounts Receivable Outstanding Sales 365 Average Accounts Payable Payment Cost of goods sold Ratio 365

7384034143 3407687731 5201514097 365 878,585,785 3,171,367,367 365

6857448642 3451582241 4267027599 365 1,145,065,527 3,021,725,477 365

11855315816 3765912622 4760237189 365 1594026621 3090184887 365

Debt Management Ratio: Formula 2006 2007 2008 Debt to Asset Total Debt 11996433062 12809217471 15733786518 Total Asset 14956940754 14738938029 19086298354 Total Debt to Total Total Debt 11996433062 12809217471 15733786518 Equity Total Equity 2960507692 1929670558 3352511836 Times Interest __EBIT__ 1155184607 359250639 692000803 Earned Interest 1355894166 1342655622 1300656669 Expense Profitability Ratio: Formula 2006 2007 2008 Gross Gross Profit x 100 2030146730 x 100 1245302122 x 100 1670052302 x 100 Profit Sales 5201514097 4267027599 4760237189 Margin Net Profit Net Profit x 100 (208649284) x 100 (994072552) x 100 (608655866) x 100 Margin Sales 5201514097 4267027599 4760237189 Return on Net Profit x 100 (208649284) x 100 (994072552) x 100 (608655866) x 100 Asset Total Asset 14956940754 14738938029 19086298354 Return on Net Profit x 100 (208649284) x 100 (994072552) x 100 (608655866) x 100 Equity Total Equity 2960570692 1929670558 3352511836 Stock Market Ratio: Formula 2006 2007 2008 Earning per Net Income (208649284) (994072552) (608655866) share Number of Common 171167841 188284625 188284625 Shares Outstanding Price/Earning Price per share 22.50 18.90 23.90 Ratio Earning per share -1.22 -5.28 -3.23 Market to Book Market value per share 22.50 18.90 23.90 Value Book value per share 17.30 10.25 17.80

14

Findings
In this ratio it indicates that the fixed asset turnover ratio 0.070 times in 2006. However, it declined to 0.40 times in the following year in 2008. In contrast, the Company has rapid declination of fixed assets turnover ratio in2008 occurred because sales and net fixed assets has increased . The balance sheet shows that large amount of investments were made during that year that inflate the money volume of fixed assets, and give an impression of mismanagement.

RECOMMENDATION
This paper provides an analysis and evaluation of the current and prospective profitability, liquidity, accounting policies and financial stability of Bextex Ltd. Methods of analysis include trend analysis, as well as ratios such as Debt, Current and Quick ratios. Other calculations include rates of return on Shareholders Equity and Total Assets and earnings per share to name a few. All calculations can be found in the appendices. Results of data analysed show that performance declined in most areas. In particular, comparative performance is poor in the areas of profit margins, liquidity, and stock market. It can also be observed that performance was worst in year 2007. The report finds the prospects of the company in its current position are not positive. Current ratio, Quick ratio, Total Assets turnover, Fixed Assets Turnover all worsened during the period whereas Inventory turnover improved. Performance also declined in terms of average collection period, average payment period, debt to asset, total debt to total equity and times interest earned. Gross Profit margin, Net Profit margin, ROA and ROE also decreased. Some performance measures showed slightly better results for 2008 but an overall deterioration during the period. The major areas of weakness require further investigation and remedial action by management. Recommendations discussed include: Improving the average collection period for accounts receivable Improving/increasing assets turnover Reducing prepayments and perhaps increasing inventory levels Reducing the dependency on loans

15

The report also investigates the fact that the analysis conducted has limitations. Some of the limitations include: Economic conditions are not considered Some qualitative factors are ignored Industry performance figures are not available

CONCLUSION
While analyzing and interpreting the financial statements, I must keep in mind that, these facts and figures are at best an abstraction of the underlying reality. The real p i c t u r e c a n o n l y b e o b t a i n e d t h r o u g h c o m p r e h e n s i v e a n a l y z i n g a n d o b s e r v i n g o f t h e important factors like market, environment, current standing of the organization etc., which are out of the scope of this report. BEXTEX Ltd. is a Bangladesh corporation enlisted in the Dhaka and Chittagong Stock Exchanges of Bangladesh. S o , i n r e a l i t y o n e needs to look beyond the figures while making decision about credit e x t e n s i o n . From a lenders perspective, by analyzing the facts and figures, I should conclude that, involving with BEXTEX Ltd. with short-term or long-term credit extension might lead to partial or total loss of the sanctioned amount or the interest.

16

REFERENCES
Books:
Accounting Principles (9th Edition) by Weygandt Kimmel Kieso Different prospectus of Bextex Ltd.

Company Publications: Annual Reports of Bextex Ltd year 2006 Annual Reports of Bextex Ltd year 2007 Annual Reports of Bextex Ltd year 2008 Annual Reports of Bextex Ltd year 2009

Website:
http://www.bextex.net/ http://researchexamples.com www.stockbangladesh.com/symbols/details/17420

www.scribd.com

17