Welcome To

Our Presentation

LOGOTopic of the Presentation

Fundamental Analysis & performance evaluation of Pran

Agricultural Marketing Company Limited (AMCL)

LOGO

Submitted To-

Mr. Hussain Ahmed Enamul Huda

Lecturer

Department of Finance

Faculty of Business Studies

University of Dhaka

LOGOGroup List

Serial No Name ID

01 Md. Milan Hossain 16-019

02 S.M. Nazrul Islam 16-107

03 Md. Abu Daud 16-099

04 Mohammad Marjan 16-261

LOGOAgenda

Company Profile1

Strategy Analysis 2

Industry Analysis (Porter’s 5

forces model)3

Prospective Analysis

4

5

Ratio Analysis

You Are With-

Mohammad Marjan

16-261

LOGOCompany Profile

Company Logo

LOGOCompany Profile (Cont’d)

About

PRAN AMCL

Its mission to provide

maximum value to the

customers, shareholders,

colleagues, and communities

It has a skilled management team, workforce, and integrated sophisticated technologies in order to become globally competitive.live and work

It instigated its journey in 1984.

Its vision is to

establish PRAN

(AMCL) permanently

among the best of

innovative branded

generic company

LOGOStrategy Analysis

Types of

Strategy

1.Cost Leadership

Controlling production

and overhead costs

Minimizing cost of sales,

R&D, and service

2.Cost Differentiation

Ensuring the quality

Raising Buyers'

Performance

Income Statement

PRAN AMCL follows

Cost leadership

LOGOIndustry Analysis of PRAN AMCL

Threat of new entry : Less as high volume

investment is needed to enter.

Bargaining power of buyer :

High as buyers can switch to alternative

product if price or quality is not competitive

Bargaining power of supplier:

More as rivals are present.

Threat of substitutes : Moderate as some

products have more substitutes like forest products and some

products do not have .

Rivalry among competitors High as foreign and

domestic competitor are competing for increasing

market.

Porter’s 5 forces model

You Are With-

MD.Milan Hossain

16-019

LOGORatio Analysis

CALCULATION OF RATIOS

Particulars 2007 2008 2009 2010 2011

Current Ratio 1.3631046 1.4343793 1.40308305 1.45029382 1.27894974

Debt/Equity Ratio 0.3476373 0.2698715 0.38611105 0.60696449 0.37550049

ROA 0.0306497 0.0389412 0.04006633 0.03855521 0.03879204

ROE 0.0894447 0.1048977 0.11103743 0.11469516 0.11334827

Inventory Turnover 1.9147748 2.0352208 2.29859845 2.45070925 2.55713206

Acc. Rec. Turnover 15.499383 22.273725 29.6815944 29.1929813 23.6344156

LOGORatio Analysis(con’t)

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

2007

2008

2009

2010

2011

Debt/Equity Ratio

Debt/Equit

y Ratio

0

0.02

0.04

0.06

0.08

0.1

0.12

0.14

20072008200920102011

ROA

ROE

0

5

10

15

20

25

30

35

Inventory

Turnover

Acc. Rec.

Turnover

You Are With-

S.M. NAZRUL ISLAM

16-107

LOGOProspective Analysis

Prospective analysis

Pro-forma income

statement

Pro-forma Balance

sheet

Free cash flow &

Valuation

WACC & NWC

calculation

LOGOProspective Analysis(Con’t)

Risk-free rate 0.1

Market return 0.28

Beta 0.050191401

Cost of equity 0.11

Cost of debt 0.160857395

After tax cost of debt 0.135162399

Total market value of equity 106,720,000.00

Book value of debt 659682071

Weight of equity 0.14

Weight of debt 0.86

WACC 0.1315

WACC Calculation

LOGOProspective Analysis(Con’t)

Free Cash flow & Valuation

Particulars 2012 2013 2014 2015

EBIT 190041691.3 207033768 225034474.7

EBIT (1-tax rate) 159684861 173962661.7 189087976.2

Depreciation 2608527.911 602792.3829 -66711.44432

Capital expenditure -92351515.36 -83628722.84 9255247.82

Change in NWC -506592790.4 15185732.68 100836039.6

Free cash flow 761237694.7 243008444.2 78929977.31 81297876.63

Present value discount factor 0.8837 0.7811 0.6903

Present value of free cash flow 672705750.8 189813895.8 54485363.34

Terminal value 503302191.1

Enterprise value 1420307201

Cash 35265609

Interest-bearing debt 659682071

Equity value 795890739

Value per share 994.8634237

LOGOProspective Analysis(Con’t)

OUR ASSUMPTIONS

1. Perpetual growth rate is 3%.

2. Capital expenditures will be financed by long-term loan.

3. Since there was no purchase of PPE, it was assumed that the existing long-term loan

will be repaid by three equal-yearly installments.

4. Risk-free rate is 10%.

5. For maintaining a no-arbitrage scenario, the return from investment was considered

to be equal to the interest rate.

6.There is no new investments for the following years

7.Security Deposits from Distributors are constant.

8.Short term liabilities & current assets grow in proportion to sales

9.Tax rate has been calculated in proportion to EBT

You Are With-

MD. ABU DAUD

16-099

LOGOFINDINGS

PRAN AMCL follows cost leadership strategy

Its main target is to capture large share of both local &

foreign market

Since customers are very price sensitive, PRAN AMCL

tries to reduce the production cost & selling price

It Ensures lower the product price with better quality than

their competitors

The performance & the financial position of PRAN AMCL

is also satisfactory

Finally, it is ever growing & in the edge of achieving of

goals & objectives.