Financial Statment Analysis - Summit Power

Finacial Statement Analysis Of
Summit Power Limited
Financial Statement Analysis Of
Summit Power Limited
Prepared for:
Dr. Md. Mohiuddin
Professor and Course Instructor
Code: F501
Financial Theory and Practices
Prepared by:
Md Raquibul Islam Russeau
ZR-1403009
EMBA 20th Batch
Md Tamjid Alam Adnan
ZR-1403020
EMBA 20th Batch
Institute of Business Administration

University of Dhaka
October 10, 2015
i
October 10, 2015

Dr. Md. Mohiuddin
Professor and course instructor
Code: F501, Financial Theory and Practices
Executive MBA Program, IBA
University of Dhaka
Subject: Submission of Term Paper.
Dear Sir,
Thank you very much for giving us the opportunity to work on financial statement analysis. Surely, it will
enhance our classroom learning, and facilitate any future undertaking on this issue. We are pleased to
submit our term paper on Financial Statement Analysis of Summit Power Limited as a mandatory
requirement of Financial Theory and Practices course of EMBA program.
This report will be a reflection of our learning in Financial Theory and Practices course under you. We
have followed your instructions given in various classes, and tried our best to incorporate all major
lessons in this report.
It was a great learning opportunity undergoing Financial Theory and Practices course under you, and
following up the theoretical lessons with a practical comparison with organizations.
Sincerely,
.
Md Raquibul Islam Russeau
ZR-1403009
EMBA 20th Batch
For Assignment Team
ii
iii
Executive Summary
Summit Power Limited (SPL), a subsidiary of Summit Group is the first Bangladeshi Independent Power
Producer (IPP) in Bangladesh in private sector providing power to national grid. SPL was incorporated in
Bangladesh on March 30, 1997 as a Private Limited Company. On June 7, 2004, the Company was
converted into Public Limited Company under the Companies Act 1994.
In the first section of the report we have tried to show the changes within the capital statement and also
along the statement. To do that we have used Horizontal and Vertical analysis of the Statement of
Financial Position and Statement of Comprehensive Income. There we have analyzed how the
components of both structures has been changing over time and what are the reason behind this
changes.
Later as we move on the report we have attempted to analysis various aspect of summit power through
ratio analysis. In that segment we have discussed how the company is performing over the yeast and
what are the riskiness present in companys operation. Also we have tried to show how the efficient the
company is from operations point of view as well as we discussed companys other vital signs through
the ratio analysis.
iv
Contents
Executive Summary ...................................................................................................................................................................iv
Introduction ............................................................................................................................................................................... 1
Background ............................................................................................................................................................................ 1
Objective: .............................................................................................................................................................................. 1
Methodology: ........................................................................................................................................................................ 1
Financial Statement Analysis ..................................................................................................................................................... 1
Company profile .................................................................................................................................................................... 1
Nature of business................................................................................................................................................................. 2
Consolidated Financial Statement ............................................................................................................................................. 3
Vertical Analysis - Consolidated Financial Statement ............................................................................................................... 4
Horizontal Analysis - Consolidated Financial Statement ........................................................................................................... 5
Comprehensive Income Statement ........................................................................................................................................... 6
Vertical Analysis - Comprehensive Income Statement.............................................................................................................. 7
Horizontal Analysis - Comprehensive Income Statement ......................................................................................................... 8
Explanation of Vertical and Horizontal Analysis ........................................................................................................................ 9
Statement of Financial Position: Asset Side .......................................................................................................................... 9
Statement of Financial Position: Liabilities Side .................................................................................................................... 9
Statement of Profit or Loss and Other Comprehensive Income ......................................................................................... 10
Ratio Analysis........................................................................................................................................................................... 11
Liquidity Ratio ...................................................................................................................................................................... 12
Operating Efficiency Ratio ................................................................................................................................................... 12
Profitability Ratio ................................................................................................................................................................. 13
Solvency Ratio ..................................................................................................................................................................... 14
Other Ratios......................................................................................................................................................................... 15
Conclusive Message................................................................................................................................................................. 15
iii
Introduction
Background
We have taken Financial Theory and Practices course under Dr. Md. Mohiuddin as part of Executive MBA program at
Institute of Business Administration (IBA), University of Dhaka. The honorable course instructor asked us to relate the
classroom learning with our organization and submit as a Term Paper. We have prepared the Term Paper on Summit Power
Limited. This report is an endeavor to reinforce and retain the classroom knowledge by analyzing the practical
implementation of financial statement analysis in an organization. The report will present financial statement analysis of
Summit Power Limited. Since 1997 this company is providing power to national grid.
Objective:
Broad objective- The broad objective of this report is to describe and evaluate Financial statement analysis of summit Power
Limited. Specific objectives- In persuasion of the above mentioned broad objective, this report will endeavor to meet
following specific objectives:
To provide Horizontal Analysis (trend/index) for last four years.
To provide Vertical Analysis (common size) for last four years.
To provide Ratio Analysis for last three years and comment on different aspect of the company e.g. profitability,
liquidity, efficiency and solvency
Methodology:
This is a descriptive report covering financial statement analysis of Summit Power Limited. We have formulated this report
based on the following:
Classroom lessons imparted at IBA by Dr. Md. Mohiuddin
Studying and analyzing the Annual Report of Summit Power Limited.
Several theories and notes from the book.
Financial Statement Analysis

Company profile
Summit Power Limited (hereinafter referred to as the Company/the parent company) is a Public Limited Company
incorporated in Bangladesh on 7 June 2004 under the Companies Act (# 18) 1994 under registration no: C 32630 (1751)/97
dated 30 March 1997 with its registered office at Summit Centre, 18 Kawran Bazar, Dhaka 1215. The Company registered
as a Private Limited on 30 March 1997 and subsequently converted into a Public Limited. During October-November 2005,
the Company listed its shares with both Dhaka and Chittagong Stock Exchanges. The consolidated financial statements of
the Company as at and for the year ended 31 December 2014 comprise the Company and its subsidiaries. Profiles of
subsidiaries are as under:
Summit Purbanchol Power Company Limited was incorporated in Bangladesh on 15 August 2007 as a Private Limited
Company under Companies Act (#18) 1994 under registration no: C 68123 (674)/07 dated 15 August 2007 with its registered
office at Summit Centre, 18 Kawran Bazar, Dhaka 1215, Bangladesh.
Summit Uttaranchol Power Company Limited was incorporated in Bangladesh on 15 August 2007 as a Private Limited
Company under Companies Act (#18) 1994 under registration no: C 68122(673)/07 dated 15 August 2007 with its registered
office at Summit Centre, 18 Kawran Bazar, Dhaka 1215, Bangladesh.
Summit Narayanganj Power Limited was incorporated in Bangladesh on 4 May 2010 as a Private Limited Company under
Companies Act (#18) 1994 under registration no: C 84422/10 dated 4 May 2010 with its registered office at Summit Centre,
18 Kawran Bazar, Dhaka 1215, Bangladesh.
1
Nature of business
The principal activity of the Company/group is to generate and supply of electricity. Operational details of the Company
including its subsidiaries are as under.
Name of plant
Location
Plant capacity MW
Operation starting date
Ashulia Power Plant (Unit-1)
Savar, Dhaka
11.00
8 Feb 2001
Ashulia Power Plant (Unit-2)
Savar, Dhaka
33.75
4 Dec 2007
Madhabdi Power Plant (Unit-1)
Narsingdi
11.00
1 Apr 2001
Madhabdi Power Plant (Unit-2)
Narsingdi
24.30
16 Dec 2006
Chandina Power Plant (Unit-1)
Comilla
11.00
2 Jun 2001
Chandina Power Plant (Unit-2)
Comilla
13.50
15 Nov 2006
Rupganj Power Plant
Narayanganj
33.00
9 Jun 2009
Jangalia Power Plant
Comilla
33.00
25 Jun 2009
Maona Power Plant
Gazipur
33.00
12 May 2009
Ullapara Power Plant
Sirajganj
11.00
3 Mar 2009
Narayanganj
102.00
1 Apr 2011
Madanganj Power Plant
Consolidated Financial Statement
Statement of Financial Position

Particulars
ASSETS
Non-current assets:
Property, plant and equipment, net
Intangible assts, net
Goodwill arsing on consolidation
Investment in subsidiaries
Investment in associates
Available for sale financial assets
Current assets:
Inventories
Trade Receivables
Sundry receivables
Inter company receivables
Due from associates
Advances, deposits and prepayments
Cash and cash equivalents
Total Assets
Equity and Liabilities
Shareholders' equity:
Share capital
Share premium
Revaluation reserve
Fair value reserve
Retained Earnings
Non-controlling interest
Non-current liab ilities:
Project loan-non current portion
Redeemable Pref. shares- non current portion
Payable to SIMCL-non current portion
Finance lease- non current portion
Deferred liabilities
Current liab ilities:
Dividend payable on ordinary shares
Trade creditors
Sundry creditors and accruals
Short-term loan
Project loan- current portion
Redeemable Pref. shares- current portion
Payable to SIMCL- current portion
Finance lease- current portion
Unclaimed Dividend
Liabities for project development
Total Liabilities
Total Equity and Liabilities
As at December 2011
As at December 2012
As at December 2013
As at December 2014
Taka
Taka
Taka
Taka
13,657,541,971.00
9,956,300.00
10,000,000.00
3,414,102,838.00
17,091,601,109.00
13,462,427,251.00
9,276,170.00
10,000,000.00
2,703,890,148.00
16,185,593,569.00
13,261,427,574.00
8,596,040.00
518,284,044.00
100,000,000.00
2,995,100,662.00
16,883,408,320.00
13,016,326,309.00
8,033,343.00
519,284,044.00
4,136,772,452.00
3,647,104,361.00
21,327,520,509.00
651,338,649.00
979,568,165.00
104,285,043.00
2,746,795.00
120,714,543.00
1,081,038,437.00
2,939,691,632.00
20,031,292,741.00
902,905,660.00
1,412,763,265.00
101,755,052.00
2,746,795.00
225,685,809.00
2,399,159,338.00
5,045,015,919.00
21,230,609,488.00
1,334,837,627.00
2,008,611,219.00
79,676,089.00
2,127,684.00
169,541,404.00
1,556,977,673.00
5,151,771,696.00
22,035,180,016.00
1,193,964,986.00
2,839,050,063.00
87,466,579.00
94,000.00
31,615,443.00
179,529,312.00
1,903,769,977.00
6,235,490,360.00
27,563,010,869.00
3,943,601,640.00
2,900,697,657.00
794,231,503.00
(233,211,507.00)
2,830,009,738.00
10,235,329,031.00
1,572,337,219.00
11,807,666,250.00
4,929,502,050.00
2,900,697,657.00
794,231,503.00
(951,906,236.00)
3,717,583,396.00
11,390,108,370.00
3,474,225,049.00
14,864,333,419.00
5,915,402,460.00
3,501,083,574.00
688,025,459.00
(660,695,722.00)
4,431,439,702.00
13,875,255,473.00
3,243,977,518.00
17,119,232,991.00
7,870,626,430.00
6,234,626,639.00
671,772,007.00
(8,692,023.00)
6,037,007,280.00
20,805,340,333.00
3,474,225,049.00
24,279,565,382.00
3,011,197,392.00
1,703,568,179.00
1,255,526,342.00
5,626,392.00
12,689,278.00
5,988,607,583.00
2,013,738,524.00
1,241,998,725.00
849,062,168.00
1,472,558.00
22,620,528.00
4,128,892,503.00
1,071,465,349.00
778,368,580.00
954,799,154.00
216,673.00
82,421,960.00
2,887,271,716.00
223,217,253.00
312,254,100.00
106,366,954.00
641,838,307.00
122,904,061.00
170,429,674.00
752,886,418.00
468,368,900.00
650,000,000.00
6,488,168.00
6,179,728.00
57,761,959.00
2,235,018,908.00
8,223,626,491.00
20,031,292,741.00
6,047,388.00
135,865,829.00
237,990,960.00
973,693,938.00
468,368,900.00
500,000,000.00
4,125,225.00
2,326,092,240.00
6,454,984,743.00
21,319,318,162.00
6,047,388.00
90,118,542.00
94,591,599.00
868,500,000.00
468,368,900.00
500,000,000.00
1,048,880.00
2,028,675,309.00
4,915,947,025.00
22,035,180,016.00
9,829,630.00
179,090,399.00
102,753,332.00
1,012,846,312.00
868,500,000.00
468,368,900.00
218,607.00
2,641,607,180.00
3,283,445,487.00
27,563,010,869.00
Vertical Analysis - Consolidated Financial Statement

Particulars
ASSETS
Non-current assets:
Current assets:
Inventories
Trade Receivables
Sundry receivables
Due from associates
Total Assets
Share capital
Share premium
Revaluation reserve
Fair value reserve
Retained Earnings
Trade creditors
Short-term loan
Unclaimed Dividend
Liabities for project development
Total Liabilities
As at December 2011
As at December 2012
As at December 2013
As at December 2014
% of Total Asset
% of Total Asset
% of Total Asset
% of Total Asset
0.68
0.00
0.00
0.17
0.85
0.63
0.00
0.00
0.13
0.76
0.60
0.00
0.02
0.00
0.14
0.77
0.47
0.00
0.02
0.15
0.13
0.77
0.03
0.05
0.01
0.00
0.01
0.05
0.15
1.00
0.04
0.07
0.00
0.00
0.01
0.11
0.24
1.00
0.06
0.09
0.00
0.00
0.01
0.07
0.23
1.00
0.04
0.10
0.00
0.00
0.00
0.01
0.07
0.23
1.00
0.20
0.14
0.04
(0.01)
0.14
0.51
0.08
0.59
0.23
0.14
0.04
(0.04)
0.18
0.54
0.16
0.70
0.27
0.16
0.03
(0.03)
0.20
0.63
0.15
0.78
0.29
0.23
0.02
(0.00)
0.22
0.75
0.13
0.88
0.15
0.09
0.06
0.00
0.00
0.30
0.09
0.06
0.04
0.00
0.00
0.19
0.05
0.04
0.04
0.00
0.00
0.13
0.01
0.01
0.00
0.02
0.01
0.01
0.04
0.02
0.03
0.00
0.00
0.00
0.11
0.41
1.00
0.00
0.01
0.01
0.05
0.02
0.02
0.00
0.11
0.30
1.00
0.00
0.00
0.00
0.04
0.02
0.02
0.00
0.09
0.22
1.00
0.00
0.01
0.00
0.04
0.03
0.02
0.00
0.10
0.12
1.00
Horizontal Analysis - Consolidated Financial Statement

Particulars
ASSETS
Non-current assets:
Current assets:
Inventories
Trade Receivables
Sundry receivables
Due from associates
Total Assets
Share capital
Share premium
Revaluation reserve
Fair value reserve
Retained Earnings
Trade creditors
Short-term loan
Unclaimed Dividend
Total Liabilities
As at December 2011
% of 2011
As at December 2012
% of 2011
As at December 2013
% of 2011
As at December 2014
% of 2011
1.00
1.00
1.00
1.00
1.00
0.99
0.93
1.00
0.79
0.95
0.97
0.86
10.00
0.88
0.99
0.95
0.81
413.68
1.07
1.25
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.39
1.44
0.98
1.00
1.87
2.22
1.72
1.06
2.05
2.05
0.76
0.77
1.40
1.44
1.75
1.10
1.83
2.90
0.84
11.51
1.49
1.76
2.12
1.38
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.25
1.00
(1.70)
1.31
1.11
2.21
1.26
1.50
1.21
(1.18)
1.57
1.36
2.06
1.45
2.00
2.15
(0.02)
2.13
2.03
2.21
2.06
1.00
1.00
1.00
1.00
1.00
1.00
0.67
0.73
0.68
0.26
1.78
0.69
0.36
0.46
0.76
0.04
6.50
0.48
0.07
0.18
8.38
0.11
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.11
1.40
1.29
1.00
0.77
0.64
1.07
0.79
1.07
0.73
0.56
1.15
1.00
0.77
0.16
0.93
0.60
1.10
1.46
0.60
1.15
1.00
0.03
1.21
0.40
1.38
Comprehensive Income Statement

Statement of Profit or Loss and Other Comprehensive Income
2011
2012
2013
2014
Consolidated
Consolidated
Consolidated
Consolidated
Particulars
Revenue
Cost of sales
Gross profit
Other income, net
4,757,208,529.00
(1,929,597,030.00)
2,827,611,499.00
833,937,552.00
5,892,627,264.00
(2,268,685,312.00)
3,623,941,952.00
11,577,936.00
6,191,915,486.00
(2,373,939,738.00)
3,817,975,748.00
86,514,242.00
6,109,044,517.00
(2,552,585,532.00)
3,556,458,985.00
166,536,718.00
Operating expenses
General and Admin. Expenses
Operating profit
(366,461,900.00)
3,295,087,151.00
(506,813,150.00)
3,128,706,738.00
(592,564,624.00)
3,311,925,366.00
(565,768,894.00)
3,157,226,809.00
Finance income/(expenses)-net
Profit before income tax
Income tax expenses
Profit after income tax
(189,948,918.00)
3,105,138,233.00
(33,201,636.00)
3,071,936,597.00
(642,053,514.00)
2,486,653,224.00
(482,097,680.00)
2,829,827,686.00
(317,387,810.00)
2,839,838,999.00
2,486,653,224.00
2,829,827,686.00
2,839,838,999.00
Other comprehensive income

Net change in fair value of available for sale financial assets
Total comprehensive income for the year
(259,954,148.00)
2,811,982,449.00
(718,694,729.00)
1,767,958,495.00
291,210,514.00
3,121,038,200.00
652,003,699.00
3,491,842,698.00
Profit attributable to:

Owners of the company
Non controlling interest
Profit for the year
2,511,150,489.00
560,786,108.00
3,071,936,597.00
1,873,474,068.00
613,179,156.00
2,486,653,224.00
2,184,858,468.00
644,969,218.00
2,829,827,686.00
2,219,988,013.00
619,850,986.00
2,839,838,999.00
Total comprehensive income attributable to:

2,251,196,341.00
560,786,108.00
2,811,982,449.00
1,154,779,339.00
613,179,156.00
1,767,958,495.00
2,476,068,982.00
644,969,218.00
3,121,038,200.00
2,871,991,712.00
619,850,986.00
3,491,842,698.00
6.37
3.80
3.69
3.26
3.17
3.21
Earnings per share

Re-stated earnings per share
Vertical Analysis - Comprehensive Income Statement

Particulars
Revenue
Cost of sales
Gross profit
2011
2012
2013
2014
% of Comprehensive Income % of Comprehensive Income % of Comprehensive Income % of Comprehensive Income
1.00
(0.41)
0.59
1.00
(0.39)
0.61
1.00
(0.38)
0.62
1.00
(0.42)
0.58
0.18
0.00
0.01
0.03
Operating expenses
Operating profit
(0.08)
0.69
(0.09)
0.53
(0.10)
0.53
(0.09)
0.52
Finance income/(expens es)-net

Income tax expenses
(0.04)
0.65
(0.01)
0.65
(0.11)
0.42
0.42
(0.08)
0.46
0.46
(0.05)
0.46
0.46

(0.05)
0.59
(0.12)
0.30
0.05
0.50
0.11
0.57
Other income, net

Profit for the year
Earnings per share
3.96
-
1.40
1.72
1.16
1.49
1.80
-
Horizontal Analysis - Comprehensive Income Statement

Particulars
2011
2012
2013
2014
% of 2011
% of 2011
% of 2011
% of 2011
Revenue
Cost of sales
Gross profit
1.00
1.00
1.00
1.24
1.18
1.28
1.30
1.23
1.35
1.28
1.32
1.26
Other income, net
1.00
0.01
0.10
0.20
Operating expenses
Operating profit
1.00
1.00
1.38
0.95
1.62
1.01
1.54
0.96
Finance income/(expenses)-net
Income tax expenses
1.00
1.00
1.00
1.00
3.38
0.80
0.81
2.54
0.91
0.92
1.67
0.91
0.92

1.00
1.00
2.76
0.63
(1.12)
1.11
(2.51)
1.24

Profit for the year
Earnings per share
3.96
-
0.87
1.15
0.92
1.40
1.72
1.16
1.49
1.80
-
Explanation of Vertical and Horizontal Analysis

Statement of Financial Position: Asset Side
In the analysis we see a noticeable changes Long Term Assets in the Investment in Associates and Financial Assets
Available for Sale which is the holding in the con-controlling interest. In the current asset side there is no major changes
other than inflation in the Inventories and Trade Receivables.
Inflation in the inventories are well explained by the expansion in their three unit name Dhaka Palli Bidyut Samity - 1
(Expansion), Narsingdi Palli Bidyut Samity - 1 (Expansion) and Comilla Palli Bidyut Samity - 1 (Expansion).
In the year 2012 we have seen increase of 31% in the Trade Receivables due to the increase in BST price, this doesnt
reflect any incapability or inefficiency of recovering receivables from trade partners but it reflects capability of
Negotiating this increase and recovering in due times.
In the recent year there has been increase in the investment in associates, major changes in the associates were due
to investment in the share capital of Summit Barisal Power Limited, Summit Narayanganj Power Unit II Limited,
Summit Meghnaghat Power Company Limited. Also increase in the Non-Controlling interest has been increased not
due to the purchase of new shares in Khulna Power Company Limited or any other non-controlling interests but due
to the issuance of Bonus Share.
In the current asset side there has been no major change after 2012, in the year we have seen increase in the trade
receivables due to the increase in Bulk Supply Tariff which is yet to be approved by REB.
Statement of Financial Position: Liabilities Side

There has been changes in the equity as well as the liabilities side of the Statement of Financial Position, these changes
are explained as there has been new issuance of the share as bonus shares in all four years and also as ordinary shares
has been issued to SIMCL in exchange of shares in the associates in the year 2014. Also the increase in share premium
in the year is resulted for this nature of investment is associates.
Also there has increase in the value of assets of SPL in the year 2011 2014 which has also increased the shareholders
equity in respect Total Liabilities and Equity and Base year 2011 in the mentioned years.
In case of fair value reserve almost all the years share investments in the Khulna Power, Peoples Leasing and Popular
Life has been depreciated except year 2013 where there was increase in the share price of Kulna Power.
In the long term liabilities side Project loan and Redeemable Preferred Share has been continually decreasing due to
its nature of annuity payment also we can notice in the faster decrease in the Project Loan due to Gain of Exchange
rate. Also due to the arrangement of loan from SIMCL it has to be paid in 6 installment starting from 2010 that has
resulted in the gradual reduction in the loan and also due to one off payment in year 2014 has been made to pay the
full loan with interest. Finance lease has been continuously decreasing also due to its annuity nature.
In the deferred liabilities in increasing nature is due to the continuous increment in the size of Gratuity and Earned
Leave fund. Also in the year 2014 it has increased sharply as there was a new Provision made for Liability for assets
retirement obligation.
Current Asset composition has been quite stable over the year, however there has been increase in the Sundry
Creditors in the year 2012 due to the expansion happened in the year 2011. Also increase in the Project Loan is due to
new loan required for expansion. In the following year also due to the increased annuity the current portion has
increased. Increase in the Short Term Loan in 2014 is because Company took short term loan for Summit Power Limited
(SPL) amounting Taka for a term of 6 months from Bank Asia Limited and for Summit Narayangonj Power Limited for
a period of 3 months to meet the working capital finance.
9

COS (Cost of Sales) has been almost maintained stable proportion to Sales/Revenue. But the positive trend we are
seeing in the cost can be attributed to the increase demand of raw material due to the expansion of its three units in
year 2011. Also the sales are complementing well with this explanation. The year by year increase since after can be
attributed to the regular increase in cost price of Raw Materials.
Other Income was shown a constant trend in the year 2011 and 2012 but increased in 2013 due to the gain from sale
of vehicle and in 2014 it has been due to the Increase in Dividend Income from Subsidiaries.
General Admin and Expense observe a constant % relative to sales and it has a positive trend over the last 4 year which
is due to nature of increasing costs due to inflation and life cost adjustment. But it has decreased in 2014 due to the
decrease in some costs like gratuity fund, education and training, AGM and Office expenses. It seems that they are
leaning the regular office processes however decline in education and training is not a good sign for the human
development.
Finance cost has increased due to the loan taken from SIMCL and Bank to support the investment in KPCL and three
expansionary units.
Other than the variation in the Net Profit after Tax is due to the presence of TAX in the 2011 only but not in 2012
2014.
10
Ratio Analysis
Liquidity Ratio
2011
2012
2013
2014
Current Ratio (CR)
1.32
2.17
2.54
2.36
Quick Ratio (QR)
1.02
1.78
1.88
1.91
Working Capital Ratio (WCR)

Cash Ratio
0.04
0.48
0.13
1.03
0.14
0.77
0.13
0.72
Solvency Ratio
2011
2012
2013
2014
Debt - Equity Ratio (DE)
69.65%
43.43%
28.72%
13.52%
Debt - Total Asset (DT)
41.05%
30.40%
22.31%
11.91%
Long Term Debt - Equity Ratio
50.72%
27.78%
16.87%
2.64%
2011
2012
2013
2014
Gross Profit (Margin)
59.44%
61.50%
61.66%
58.22%
Profit Margin / Net Profit
64.57%
42.20%
45.70%
46.49%
Return on Assets (ROA)
17.67%
12.05%
13.08%
11.45%
Return on Equity (ROE)
32.82%
23.00%
22.40%
16.38%
2011
2012
2013
2014
Total Asset Turn Over (TATO)
27.36%
28.56%
28.62%
24.63%
Fixed Asset Turn Over
42.57%
43.46%
46.34%
46.50%
4.14
86.89
2.92
123.32
2.12
169.67
2.02
178.32
6.64
4.93
3.62
2.52
Days Outstanding Account Receivables
54.22
73.08
99.46
142.83
Other Ratio
2011
2012
2013
2014
Time Interest Earned Ratio

Earnings Per Share (EPS)
8.77
6.37
4.81
3.80
6.76
3.69
8.18
3.26
14.62
16.81
11.96
14.24
0%
0%
0%
30.66%
Profitability Ratio
Activity/Efficiency Ratio
Inventory Turnover Ratio (ITO)

Days Holding Inventory
Average Receivable Turnover Ratio (ARTO)
Price Earnings Ratio P/E (Times)

Dividend Payut Ratio
11
Liquidity Ratio
Quick Ratio (QR)
Current Ratio (CR)

3.00
2.50
2.54
2.50
2.36
2.17
2.00
2.00
1.88
1.91
2012
2013
2014
1.50
1.32
1.50
1.78
1.02
1.00
1.00
0.50
0.50
-
2011
2012
2013
2014
2011
Working Capital Ratio (WCR)

0.16
0.14
0.12
0.10
0.08
0.06
0.04
0.02
-
1.20
0.14
0.13
Cash Ratio
0.13
1.03
1.00
0.80
0.60
0.77
0.72
2013
2014
0.48
0.40
0.04
0.20
2011
2012
2013
2014
2011
2012
The trend of current ratio shows that the firm gradually turned to conservative approach to aggressive approach of
working capital management.
The comparison of trend and level of current and quick ratio give us insight that the inventory captures a constant
amount of total current asset. So the Quick Ratio also follows the same trend as Current Ratio in last 4 years.
Same has been reflected in the Working Capital Ratio as we can see the same increasing pattern which do emphasis
that the expect the sharp increase in the Trade Receivable due to expansion of 3 units.
The inclining but slow trend of cash ratio and its comparison with quick ratio discloses the facts that account
receivable is increasing but cash is not increasing in the same rate. The increase in the receivables is due the
expansion also the increase in due for hike in BST which is not paid yet. Otherwise credit policy has remained almost
same throughout this period of analysis.
Operating Efficiency Ratio

6.64
700.00%
600.00%
4.93
500.00%
4.14
3.62
400.00%
2.92
300.00%
2.12
2.02
2.52
200.00%
100.00%
42.57%
27.36%
43.46%
28.56%
46.34%
28.62%
46.50%
24.63%
0.00%
2011
Total Asset Turn Over (TATO)
2012
Inventory Turnover Ratio (ITO)
2013
2014
Average Receivable Turnover Ratio (ARTO)
Fixed Asset Turn Over
12
200.00
150.00
100.00
178.32
169.67
142.83
123.32
99.46
86.89
73.08
54.22
50.00
2011
2012
Days Holding Inventory
2013
2014
Days Outstanding Account Receivables
The declining trend of inventory turnover suggests the nature of inventory is which is required to the operation but
also it is locking a good amount of investment is which generates substantial opportunity cost and overall adverse
impact on shareholders wealth but inadequate or low inventory can interrupt business operation which result in
more loss have a larger impact on Shareholders wealth.
Increasing trend in average collection period or DOAR also support the statement mentioned earlier that the
liquidity of accounts receivable is deteriorating it increases possibility of bad debts.
The trend of Total asset turnover and fixed asset turnover remains more or less stable. The proportion of fixed asset
in total asset is between 50 70% of total asset on average. Which implies that the contribution of fixed asset on
generating sales is much higher than current asset.
Increasing Days Outstanding Account Receivables steep increasing trend again restate that the Debt Collection is
question it I due the ongoing negotiation with REBs regarding extra payment recovery regarding increased BST in
2011/2012.
Also Days Holding Inventory steep incline is related to the nature of business as the spare parts for their plants are
off high value and critical to business operation so holding those makes the inventory larger than a normal
manufacturing firm. And its increased days holding inventory actually a good sign as it implicates that the plan
machinery requires less parts replacement or they have a good amount of parts in their inventory to ensure
uninterrupted business operation.
Profitability Ratio
Profit Margin / Net Profit
Gross Profit (Margin)

61.50%
62.00%
61.66%
70.00%
60.00%
61.00%
60.00%
50.00%
59.44%
42.20%
45.70%
46.49%
2013
2014
40.00%
59.00%
58.22%
58.00%
30.00%
20.00%
57.00%
10.00%
56.00%
0.00%
2011
2012
2013
2014
2011
Return on Assets (ROA)

20.00%
64.57%
2012
Return on Equity (ROE)

35.00%
17.67%
32.82%
30.00%
15.00%
12.05%
13.08%
11.45%
23.00%
25.00%
22.40%
20.00%
10.00%
16.38%
15.00%
10.00%
5.00%
5.00%
0.00%
13
0.00%
2011
2012
2013
2014
2011
2012
2013
2014
Gross profit margin has stabilized after the increase in year 2012 which implicates the relationship between prices
and overall cost structure remains same since then. However the steep increase in the year 2012 was due to the
revenue generated from the expansion units of three units.
More or less stable trend of net profit margin over time. High Net Profit Margin in FY 2011 is because of the Low
interest Expense on that year, as on that year few expansion and investment in non-controlling assets has increased
which has been sourced from Loan or other concerns raises the interest expense after year.
ROE also shows a declining trend. And by DuPont analysis is it found that the total asset and financial leverage
turnover has declined. By analyzing capital structure we found that issuance of bonus share every year and constant
level of long term liability contributes to the reduction of riskiness of firm. Also the more or less constant Net Profit
Margin after 2011 and increase in the Equity as Bonus share contributed to the downward trend of ROE.
Return on Asset hasnt deviated more than 1% since 2012 in 2012 It was the expansion of plan which has increased
the accounts receivables and inventory which resulted in higher asset base and in other way the finance used in
those projects has increased interest rates which has lower the Net Profit and resulted in declining ROA.
Solvency Ratio
SOLVENCY RATIO / FINANCIAL RISK

80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2011
2012
2013
2014
69.65%
43.43%
28.72%
13.52%
41.05%
30.40%
22.31%
11.91%
50.72%
27.78%
16.87%
2.64%
Debt to Equity ratio indicates that the financial leverage or riskiness is negligible. As the debt was never more
than the equity and in recent time with issuance of new and bonus shares equity has increased which has
actually make it more favorable. As 2014 Liabilities is only 13.52% of the equity which do not impose any risk
to the business
The existence of huge shareholders equity in comparison to long term debt indicates less riskiness of the firm
and its declining trend strengthen it more.
Also from the asset point of view this company is not risky, it declining debt and almost consisting asset make
its look declining. And company is able to pay its debt even from selling off its 12% assets.
14
Other Ratios
Chart Title
18.00
16.00
14.00
12.00
10.00
8.00
6.00
4.00
2.00
2011
2012
2013
2014
8.77
4.81
6.76
8.18
Earning Per Share (EPS)
6.37
3.80
3.69
3.26
Price Earning Ratio P/E (Times)
14.62
16.81
11.96
14.24
0%
0%
0%
30.66%

Earning Per Share (EPS)
Price Earning Ratio P/E (Times)
35%
30%
25%
20%
15%
10%
5%
0%
The little decline in EPS trend that firm expansionary policy as firm is spending more on the investment and new
projects the loan is resulting in good amount of interest expense which has actually make EPS trend a little negative.
Exact trend for price earning multiple shows that market price of the firms stock is relatively higher than its earning
generating capability. But its not necessarily signals badly because by the expansionary policies of firm is able to
generate good stream of future cash flow and with the emphasis of power sector and high demand of power makes
it lucrative enough to the investor which result in the higher market price.
Increasing trend of Times Interest Earned ratio discloses the facts that management have exceled to increase
accounting earnings with direct proportions of fixed financial charges. It reflects management capability and
utilization of the loans/advances it has drawn and ultimately it resulted in producing good amount of earning which
not only able to meet the financial expenses but also very useful for future investments and growth.
Conclusive Message
As mentioned earlier our above analysis is based on only one Summit Power and All its Subsidiaries, from where we can get
a good picture how this company is doing overall. As we went with the analysis of Summit we find this has a very strong
financial backbone and management are not only efficient in guiding it to attain day to day success but also it has vision
instilled in its operation which is driving the growth. This is evident in their investment in the similar company and also
expanding their line of output day by day. Though the management would like to focus on making its receivable collection
better.
15

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Finacial Statement Analysis Of

Summit Power Limited

Financial Statement Analysis Of

Summit Power Limited

Institute of Business Administration

October 10, 2015

Financial Statement Analysis

Operation starting date

Ashulia Power Plant (Unit-1)

Ashulia Power Plant (Unit-2)

Madhabdi Power Plant (Unit-1)

Madhabdi Power Plant (Unit-2)

Chandina Power Plant (Unit-1)

Chandina Power Plant (Unit-2)

Rupganj Power Plant

Jangalia Power Plant

Maona Power Plant

Ullapara Power Plant

Madanganj Power Plant

Consolidated Financial Statement

Statement of Financial Position

Vertical Analysis - Consolidated Financial Statement

Statement of Financial Position

Horizontal Analysis - Consolidated Financial Statement

Statement of Financial Position

Comprehensive Income Statement

Other comprehensive income

Profit attributable to:

Total comprehensive income attributable to:

Earnings per share

Vertical Analysis - Comprehensive Income Statement

Finance income/(expens es)-net

Other comprehensive income

Other income, net

Profit attributable to:

Horizontal Analysis - Comprehensive Income Statement

Other income, net

Other comprehensive income

Profit attributable to:

Explanation of Vertical and Horizontal Analysis

Statement of Financial Position: Liabilities Side

Statement of Profit or Loss and Other Comprehensive Income

Current Ratio (CR)

Quick Ratio (QR)

Working Capital Ratio (WCR)

Debt - Equity Ratio (DE)

Debt - Total Asset (DT)

Long Term Debt - Equity Ratio

Gross Profit (Margin)

Profit Margin / Net Profit

Return on Assets (ROA)

Return on Equity (ROE)

Total Asset Turn Over (TATO)

Fixed Asset Turn Over

Days Outstanding Account Receivables

Time Interest Earned Ratio

Inventory Turnover Ratio (ITO)

Price Earnings Ratio P/E (Times)

Quick Ratio (QR)

Current Ratio (CR)