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Ocean Containers Limited (OCL) is the pioneer for Inland Container Depot (ICD) and Container Freight Stations (CFS) and is the largest privately owned land container port (Off-dock) in Bangladesh. It is located at Patenga Industrial Area of Chittagong on the International Airport road, which is only 6 km from the countrys largest seaport, Chittagong Port.
OCL owns 15 acres of Custom bonded free hold land. Since inception as an Off-dock in the year 1987, our activities comprises of stuffing and un-stuffing of 8,000+ Containers on monthly basis and a daily empty storage of 5,000 Containers (TEUs).
With the logistic support of its surface transport subsidiary company Ocean Transport Company, OCL can deliver containers anywhere in Bangladesh. The company currently operates a fleet of 30 prime movers with 60 trailers.
Balance Sheet
OCEAN CONTAINERS LIMITED
Balance Shet As At Decembers 31, 2010 As At Dec. 31 2010 Taka As At Dec. 31 2009 Taka 1,358,065,000 As At Dec. 31 2008 Taka 1,326,649,410 As At Dec. 31 2007 Taka 684,266,099
ASSETS
PROPERTY, PLANT & EQUIPMENT CURRENT ASSETS Accounts Receivable Inventories Inter-Company Receivables Short-Term Investment Advance, Deposits and Prepayments Other Receivables Cash and Cash Equivalents 1,392,872,346
1,523,295,639
1,441,945,316
1,648,914,315
876,417,967
1,523,295,639
1,441,945,316
1,648,914,315
876,417,967
Income Statement
OCEAN CONTAINERS LIMITED
INCOME STATEMENT For the year ended December 31, 2010 As At Dec. 31 2010 Taka 290,716,166 152,068,028 49,192,372 755,832 4,132,635 206,148,867 As At Dec. 31 2009 Taka 344,435,613 160,640,354 53,858,010 2,336,711 7,159,167 223,994,242 As At Dec. 31 2008 Taka 447,805,190 196,432,513 53,598,702 5,531,910 19,766,278 275,329,403 As At Dec. 31 2007 Taka 256,315,886 172,421,575 33,373,844 468,010 4,380,750 210,644,179
Revenues Operating Expenses Administrative Expenses Advertisement and Sales Promotion Expenses Financial Cost Total Expenses
Operating Profit
Dividend on Investments Other Income Profit from Sale of Short-Term Investment
84,567,299
605,000 177,595 9,152,731
120,441,371
0 1,955,613 0
172,475,787
0 3,381,028 0
45,671,707
0 1,928,078 0
94,502,625
-24,237,879
122,396,984
-33,659,171
175,856,815
-65,946,306
47,599,785
-36,882,901
70,264,746
0 0 0 0
88,737,813
0 0 0 0
109,910,509
36,495,657 -168,000,000 0 22,776,994
10,716,884
-834,344 -7,000,000 13,474,817 6,419,637
70,264,746 2.68
88,737,813 3.73
1,183,160 4.62
22,776,994 0.45
Current Ratio:
The current ratio is a popular financial ratio used to test a company's liquidity (also referred to as its current or working capital position) by deriving the proportion of current assets available to cover current liabilities. The concept behind this ratio is to ascertain whether a company's short-term assets (cash, cash equivalents, marketable securities, receivables and inventory) are readily available to pay off its short-term liabilities (notes payable, current portion of term debt, payables, accrued expenses and taxes). In theory, the higher the current ratio, the better.
For our company we see that as the time passes the ratio is going down. This not necessarily is a bad thing. Contrary to the popular view the figures can be misleading. A low ratio might not necessarily always bad. Contrary to popular perception, the ubiquitous current ratio, as an indicator of liquidity, is flawed because it's conceptually based on the liquidation of all of a company's current assets to meet all of its current liabilities. In reality, this is not likely to occur. Investors have to look at a company as a going concern.
Quick Ratio:
The quick ratio - aka the quick assets ratio or the acid-test ratio - is a liquidity indicator that further refines the current ratio by measuring the amount of the most liquid current assets there are to cover current liabilities. The quick ratio is more conservative than the current ratio because it excludes inventory and other current assets, which are more difficult to turn into cash. Therefore, a higher ratio means a more liquid current position.
For Ocean Containers we see that the curve is going down proportionately in line same as the current ratio.
Accounts Receivable Turnover Ratio = Net Credit Sale / Avg. Account Receivable
Net Credit Sale Avg. Account Recievable Accounts Recievable Turnover Ration 2010 290,716,166 39,483,259 7.36 2009 344,435,613 43,094,419 7.99 2008 447,805,190 47,146,278 9.50 2007 256,315,886 18,123,359 14.14
Here for Ocean Containers Ltd (Assuming the total sales amount is on credit) we can see that the ratio is gradually declining and the table shows that the receivable figure is increasing year on year, this does not necessarily is as alarming as it looks due to the fact that sales is increasing year on year. But the figure definitely needs to be looked after. Also the credit sales figure has been assumed here in lack of credit sales amount. A proper figure will help to dig down and identify the root of the issue.
2010 Days of the year Accounts Recievable Turnover Avg. Collection Period 365 7.36 50
The ratio showing an upward trend clearly indicates that the collection period is increasing this is due to it is directly connected to the Accounts receivable turnover ratio. As explained earlier even more detail data will help to identify the root of the problem.
Here the graph indicates the inventory turnover has clearly come down. One of the reasons can be is the inventory has been taken as a whole at the end of the year instead of the average amount inventory the company keeps due to availability of data. More accurate inventory figures will help in determining and solving the problem at hand.
The figure is declining year to year. To my understanding the problem is in the sales figure itself. The figures are going down from year to year. Even though it seems the company is trying to maintain efficiency by adjusting the asset amount.
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Solvency Ratios
Solvency ratios are the methods used to find out the firms ability to meet its long-term requirement obligations and thus remain solvent and avoid insolvency or bankruptcy.
Here the graph indicates that the firm initially had a bit high ratio in this but as time went by they became more stable and started maintaining it in a level.
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Debt Equity Ratio = Total Long term Liabilities/ Stockholders equity or net worth
2010 7,244,531 1,296,060,516 0.006 2009 6,756,735 1,299,099,492 0.005 2008 4,992,645 1,232,564,712 0.004 2007 29,901,542 737,422,756 0.041
Total Long term Liabilities Stockholders equity or net worth Debt Equity Ratio
After the initial high level the company has stabled and maintained the ratio. No significant change in the timeline is observed.
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Times Interest Earned (TIE Ratio) = Income before Interest and Taxes/ Interest Expenses
Income before Interest and Taxes Interest Expenses Times Interest Earned (TIE Ratio)
Ocean Containers TIE ratio is increasing indicating the financial strength. But maybe the company is losing out the opportunity of low cost debt.
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Profitability Ratios
Some examples of profitability ratios are profit margin, return on assets and return on equity. It is important to note that a little bit of background knowledge is necessary in order to make relevant comparisons when analyzing these ratios.
Ocean Containers is observing Gross Profit hike in the beginning but gradual decline is being observed. Here we can observe slow decrease in sales this phenomenon may be a contributing reason. To comment more we need industry specific data and details of Oceans transaction data.
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After the initial hiccup the margin seems to have stabled and the company is able maintain it quite successfully.
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While proportion to net profit with sales has remained roughly same the actual figure has declined while assets has roughly remained the same. So, the ratio is declining year to year rather than selling off their assets to increase the ratio the firm should go into aggressive marketing to generate more revenue.
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Return on Equity
Sometimes ROE is referred to as Stockholder's return on investment, it tells the rate that shareholders are earning on their shares. Companies that generate high returns relative to their shareholder's equity are companies that pay their shareholders off handsomely, creating substantial assets for each dollar invested. These businesses are more than likely self-funding companies that require no additional debt or equity investments.
Return on Equity = Net Income for common Shares / Average Shareholders Equity
Net Income for common Shares Average Shareholders Equity Return on Equity
Return of the company in all aspects is decreasing. The problem most probably lies with the Net income figure. If it can be increased shareholders will get more return on their equity.
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Earnings Per Share (EPS) = Net Income Available to common shares/ Outstanding Common Share
Net Income Available to common shares Outstanding Common Share Earning Per Share (EPS)
After the initial jump it is in a declining trend. In the latest year the situation was worsened especially due to additional share issue.
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Price Earnings Ratio (PE Multiple) = Market price per share / Earning per share
2010 Market price per share Earning per share Price Earning Ratio (PE Multiple) 131 2.68 48.88
Here we can observe a sharp decline in 2008. No doubt the share prices quoted here form the financial statement is responsible. Due to volatile nature of the share markets we can observe sharp decline and increases in this ratio.
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Book Value per share = Total Common Shareholders Equity / Common shares outstanding
Total Common Shareholders Equity Common shares outstanding Book Value per share
The Book value per share for Ocean is more or less constant
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Dividend Yield Ratio = Dividend per share / market price per share
2010 Dividend per share market price per share Dividend Yield Ratio 0.00 131.20 0%
We can see that the dividend was paid in 2007 and 2008 the results vary a lot due to dividend per share value and fluctuating market price.
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Conclusion
Ocean Containers Ltd. Is performing important role in the sector of container shipment and storing. Although some figures are a little bit on the negative side the company seems to be in a strong financial position. Aggressive marketing campaigns might address the economic slump they are experiencing at this point but the overall financial strength of the company seems to be satisfactory.
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