leading edge health medical equipment company

Medical Equipment Company: NAVANA

Organization

Navana Biponon Limited is a leading edge Health Medical Equipment Company based in Dhaka

and Chittagong, Bangladesh and is acclaimed for its sales and after sales service.

Company Introduction

Biponon Limited came into being in 1996 as a specialized company in the field on Medical &

Health Sector. This company comprises a team of experienced & trained Bio-Medical & Electro-

Medical Engineers and also a group of skilled marketing professionals. Within a short span of time

Biponon has already positioned itself as market leader in medical and scientific equipment. Also it

has proved its reliability by providing its customer prompt and satisfactory after sales service. The

area and departments where this company is doing business are Medical & Health Sector and has

been successfully doing business in Ministry of Health, CMSD, DGMS, DGDP, Atomic Energy

Commission, Probin Hospital, ICMH, Diabetic Association of Bangladesh, etc.

Biponon Limited has commenced its proceedings with a great motto to contribute in the countries

Health Sector to improve its quality of various Diagnostics, Medical & Laboratory Equipment by

supplying them various advanced and sophisticated scientific and medical equipment. The

company has already executed a good number of supplies and an EC funded project worth

approximately US $ 5.0 million, which is considered to be the largest single project of its kind.

Historical Backgrounds

Navana Limited, the flagship company of the Navana Group (previously Islam Group) was

established in 1964 by then Group’s founder Mr. Jahurul Islam and had an auspicious step into the

business under an exclusive distributorship agreement with TOYOTA of Japan to market Toyota

cars in the then East Pakistan.

In the trading front, the Group has brought into existence a separate trading unit in 1996 namely

Biponon Limited. This company commenced business in the potential field of Health and Medical

Equipment Sector. And within a short span of one year since its commencement it was awarded

with one of the biggest single tender under the Ministry of Family & Welfare, worth of US $ of 5.0

million to supply $ installation of Medical Equipment under EC finance.

The Management of the Navana Biponon Limited

Navana Biponon Limited is managed by the Board of Directors, a technical personnel and a

Management Committee. The management of is simply exceptional in comparison to any other

listed companies in this country. It has a blend of professionalism and wisdom, which plays a key

role in managing the champion organization.

The Board of Directors includes:

1. Mr. Shafiul Islam Kamal- Chairman

2. Mrs. Khaleda Islam – Director

3. Mr. Saiful Islam Shuman- Director

4. Mr. Sajedul Islam- Director

Technical Personnel

The Technical personnel are accountable for both operational and Technical performance of the

company. This committee is also responsible for policy adoption or changes, new project review,

their technique.

Technical Personnel:

1. Engr. Mahabub Quddus- Deputy

Manager

2. Md. Shahidul Islam- Service-Engineer

3. Mr. Md. Nazmul Hasan- Service-

Engineer

4. Mr. Md. Mohiuddin- Assistant

Service-Engineer

5. Mr. Md. Asif Iqbal- Assistant Service-

Engineer

The Management Committee

The management committee reviews and manages day-to-day business operation and recommends

strategy options to the Technical personnel.

The Management Committee:

1. Mr. Shafiul Islam Kamal- Chairman

2. Mr. Saiful Islam Sumon- Director

3. Engr. Malaya Mahanta- General Manager

Mission & Vision

Every organization has got mission & vision Navana Biponon Limited is not in difference. Its

mission & vision have been given bellow:

Mission“Each of the activities must benefit and add value to the common wealth of the society. We firmly

believe that in the final analysis we are accountable to each of the constituents with whom we

interact namely our employees our customers, our business associates, our fellow citizens and

shareholders.

Vision

“ Our vision building a healthier tomorrow where our fellow citizens will live longer, healthier and

happier. Our activities have always been centered on developed core competencies to deliver the

best in the industry ensuring superior value and return to our customers.”

Product / Services

Product:

The company aims to import the most robust equipment in the domestic market. In 2006 twenty

(20) products were launched in the domestic market. Some major are given bellow-

1. M.R.I

2. C.T. Scan

3. X-ray

4. Colour Dropler

5. Ultra Sound

6. C.R. Machine

7. AGFA Film

Origin of the Report

Today, practical experience is as much essential as academic education that enables someone to be

successful business executive especially in the competitive business environment. In order to gather

knowledge and exposure, regarding the organizational culture and behavior, the business students

have to involve with internship after the successful completion of their Business Degree.

To prepare this report, I have selected and got an opportunity to work as an internee in the reputed

and well known organization Navana Biponon Limited a firm of Navana Group. I have chosen the

topic “Comparative Financial Statement Analysis: A case study of Navana Biponon Limited” I

tired to bring out the accounting and financial performance of Navana Biponon Limited based on

their corporate financial reporting. I conducted the ratio analysis and compared them with the

situation of the previous years. That will reveal the actual situation of the company.

Objectives:

“Our objectives are to conduct medical equipment business within the legal and social framework

with aims to attain the mission reflected by our vision”.

Methodology:

To identify the financial performance of Navana Biponon Limited. Four analytical tools for

financial statement analysis are taken into consideration. These are

1. Ratio Analysis

2. Statement of Changes in Equity

3. Cash Flow Statement

Sources of Data:

The enter report is prepared depending solely on secondary data,

Taken from the Internet and annual reports of Navana Biponon

Limited.

No primary data are used for analysis.

NAVANA BIPONON LTD.

BALANCE SHEET

At the End of June 30, 2003

Particular Amount Non – Current Assets 290,233,403Property, Plant & Equipment 163,623,850Investment 124,745,734Pre- Production Expenses 1,863,819

Current Assets 97,242,746

Inventories 67,769,429Accounts Receivables 4,943,237Inter Project Current Account 112,544,564Advance, Deposit & Prepayments 9,809,058Cash and Bank Balances 2,176,458Total assets 387,476,149

EQUITY AND LIABILITIES Capital and reserves (316,892,790)

Issued Capital 203,597,600Tax- holiday Reserve 4,156,589Retained Earnings (524,646,979)Non Current Liabilities Long Term Borrowings – Net of Current Maturity ( Secured ) -Current Liabilities 704,368,939Short Term Borrowings – Secured 370,571,751Long Term Borrowings – Current -Maturity ( Secured)Inter Project Current Account -Creditors and Others Payable 291,051317Accrued Expenses 3,089,711Dividend Payable 39,656,160Total Liabilities and Shareholders’Equity 387,476,149

NAVANA BIPONON LTD.

BALANCE SHEET


Particular Amount Non – Current Assets 282,402,881Property, Plant & Equipment 156,725,237Investment 124,745,734Pre- Production Expenses 931,910Current Assets 71,015,513

Inventories 30,932,924Accounts Receivables 14,715,007Inter Project Current Account 13,116,534Advance, Deposit & Prepayments 9,026,618,Cash and Bank Balances 3,224,430Total assets 353,418,394


Issued Capital 203,597,600Tax- holiday Reserve 4,156,589Retained Earnings (248,841,525)Non Current Liabilities Long Term Borrowings – Net of Current Maturity ( Secured ) 180,052,000Current Liabilities 214,453,730Short Term Borrowings – Secured 136,766,833Long Term Borrowings – Current Maturity ( Secured) 22,504,000Inter Project Current Account -Creditors and Others Payable 27,119,019Accrued Expenses 3,498,470Dividend Payable 24,565,408Total Liabilities and Shareholders’Equity 353,418,394

NAVANA BIPONON LTD.

BALANCE SHEET


Particular Amount Non – Current Assets 360,292,059Property, Plant & Equipment 264,467,064Investment 95,824,995Pre- Production Expenses -Current Assets 91,254,406

Inventories 44,036,877Accounts Receivables 16,791,135Inter Project Current Account 5,204,324Advance, Deposit & Prepayments 20,132,387Cash and Bank Balances 5,089,683Total assets 451,546,465


Issued Capital 203,597,600Tax- holiday Reserve -Retained Earnings (240,721,833)Non Current Liabilities Long Term Borrowings – Net of Current Maturity ( Secured ) 315,650,415Current Liabilities 173,020,283Short Term Borrowings – Secured 136,982,667Long Term Borrowings – Current -Maturity ( Secured)Inter Project Current Account -Creditors and Others Payables 15,69,489Accrued Expenses 4,551,555Dividend Payable 15,836,572Total Liabilities and Shareholders’Equity 451,546,465

NAVANA BIPONON LTD.

BALANCE SHEET


Particular Amount Non – Current Assets 344,147,713Property, Plant & Equipment 268,322,718Investment 75,824,995Pre- Production Expenses -Current Assets 150,587,991

Inventories 78,205,428Accounts Receivables 32,779,422Inter Project Current Account -Advance, Deposit & Prepayments 24,799,183Cash and Bank Balances 14,803,958Total assets 494,735,704


Issued Capital 203,597,600Tax- holiday Reserve -Retained Earnings (229,338,988)Non Current Liabilities Long Term Borrowings – Net of Current Maturity ( Secured ) 296,406,348Current Liabilities 224,070,744Short Term Borrowings – Secured 149,053,596Long Term Borrowings – Current Maturity ( Secured) 32,713,514Inter Project Current Account 2,524,387Creditors and Others Payables 23,447,449Accrued Expenses 4,352,357Dividend Payable 11,979,441Total Liabilities and Shareholders’Equity 494,735,704

NAVANA BIPONON LTD.

PROFIT & LOSS ACCOUNT


Particular Amount

Net Sales Revenue 45,624,741

Cost of Goods Sold (36,986,928)

Gross Profit 8,637,813

Operating Expenses (30,433,928)

Administrative Expenses (10,613,442)

Selling & Distribution Expenses (19,819,734)

(21,795,363)

Finance Cost (95,095,576)

Profit /( Loss) from Operation (116,890,939)

Add Other Income -

Net Profit ( Loss) for the Year (116,890,939)

Contribute to Workers’ Profit

Participation Fund -

Net Profit before Income Tax ((116,890,939)

Profit/ ( Loss) brought forward (407,756,040)

Profit/ ( Loss) carried forward (524,646,979)

Earnings Per Share (57.41)

Number of Shares used to compute

EPS 2,035,976

NAVANA BIPONON LTD.



Particular Amount







(13,672,022)


Profit /( Loss) from Operation (21,436,060)

Add Other Income -

Net Profit ( Loss) for the Year (21,436,060)



Net Profit before Income Tax (21,436,060)



Earnings Per Share (10.53)


EPS 2,035,976

NAVANA BIPONON LTD.



Particular Amount







12,043,547


Profit /( Loss) from Operation 6,506,455

Add Other Income 840,342

Net Profit ( Loss) for the Year 7,346,797



Net Profit before Income Tax 7,346,797



Earnings Per Share 3.61


EPS 2,035,976

NAVANA BIPONON LTD.



Particular Amount







27,367,302


Profit /( Loss) from Operation 11,583,390

Add Other Income 735,937

Net Profit ( Loss) for the Year 12,319,327


Participation Fund 586,635

Net Profit before Income Tax 11,732,692



Earnings Per Share 5.76


EPS 2,036,976

NAVANA BIPONON LTD.

Statement of Changes in Equity

Particular Amount in

Taka

30.06.2003

Amount in

Taka

30.06.2004

Amount in

Taka

30.06.2005

Amount in

Taka

30.06.2006

Issued Capital 203,597,600 203,597,600 203,597,600 203,597,600

Tax- holiday Reserve 4,156,589 4,156,589 - -

Retained Earnings :

Net Accumulated Profit

( Loss) (407,756,040) (227,405,465) (248,068,630) (241,071,680)

Net Profit /(Loss) for the Year

(116,890,939) (21,436,060) 7,346,797 11,732,692

Net Accumulated Profit

( Loss)

(524,646,979) (248,841,525) (240,721,833) (229,338,988)

( Balance Transferred to

balance Sheet )

Shareholders’ Equity at the

end of the Year

(316,892,790) (41,087,336) (37,124,233) (25,741,388)

No. of Ordinary Shares 2,035,976 2,035,976 2,035,976 2,035,976

Face Value Per Share 100 100 100 100

Shareholders’ Equity Per

Share

(155.65) (20.18) (18.23) (12.64)

NAVANA BIPONON LTD.

Cash Flow Statement

Particular Amount in Taka

30.06.2003

Amount in Taka

30.06.2004

Amount in Taka

30.06.2005

Amount in Taka

30.06.2006Cash Flows from

Operating Activities :Cash Received from Customers

57,256.646 57,053,798 157,690,079 233,857,748

Cash Paid to Suppliers and Employees

(54,062,358) (37,964,612) (189,758,159) (240,996,835)

Cash Generated from Operation

3,194,288 19,089,186 (32,068,080) (7,139,087)

Other income Income Tax Paid and Deducted at Source

(460,219) (1,031,321) (1,732,478) (2,667,797)

Net Cash Generated from Operating Activities 2,734,069 18,057,865 (32,960,216) (9,070,947) Cash Flows from Investing Activates : Acquisition of Property, Plant & Equipment

(4,437,024) (4,434,767) (124,881,747) (30,626,734)

Invest Liquidate (Net ) (10,783,015) - 28,920,739 20,000,000Net Cash Used in Investing Activities : (15,220,039) (4,434,767) (95,961,008) (10,626,734)Cash Flows: from Financing Activities : Received from Associated 12,46,855 19,364,544 (11,383,585) 7,728,11 Companies & others Dividend Paid & Written Off

116,480 (15,090,752) (8,728,836) (3,857,131)

Bank Loans Received ( Repaid )

1,711,562 (16,848,918) 113,310,249 25,540,376

Net Cash Used in Financing Activates: 13,874,897 (12,575,126) 93,797,828 29,411,956Net Increase/ Decrease) in Cash & Cash Equivalents 1,155,967 1,047,972 1,865,253 9,714,275Cash & Cash Equivalents at the beginning of the Year

1,020,491 1,276,458 3,224,430 5,089,683

Cash & Cash Equivalents at the End of the Year 2,176,458 2,324,430 5,089,683 14,803,958

NAVANA BIPONON LTD.

SL. No. Particular 2006 2005 2004 2003

1 Sales 24.98 15.97 6.68 4.56

2 Gross Profit /( Loss) 9.46 5.7 1.79 0.86

3 Operating Profit / (Loss) 2.74 1.2 (1.37) (2.18)

4 Net Profit /(Loss) 1.17 0.73 (2.14) (11.69)

5 Earning Per Share (EPS) 5.76 3.61 (10.53) (57.41)

6 Dividend Per Share 10.00 - - -

7 Fixed Asset 26.83 26.45 15.67 16.36

8 Investment 7.58 9.58 12.47 12.47

9 Net Working Capital (7.35) (8.18) (14.34) (60.71)

10 No. of Shareholders. 8,212 8,451 8,8920 6.578

Performances at a Glance

Amount in Core Taka

Ratio Analyses

Ratio analysis expresses the relationship among selected items of financial statement data. A ratio

analysis expresses the mathematical relationship between one quantity and another. The

relationship is expressed in terms of either a percentage a rate, or a simple proportion.

1. Liquidity Ratio: Measure of short-term ability of the enterprise to pay its maturing

obligations and to meet unexpected needs for cash.

2. Profitability Ratio: Measures of the income or operating success of an enterprise for a

given period of times.

3. Solvency Ratio: Measures of the ability of the enterprise to survive over a long period of

times.

For performance analysis of Navana Biponon Limited. Above of all ratios can be analysis and

interoperate in the following ways-

Performances Analysis

Financial Performances of a company needs the assistance of its financial statement to measure the

this type of performance at first we have to establish the following parameters using the balance

sheet and profit & loss accounts of a financial statement.

A. Liquidity Ratio:

Feature 2006 2005 2004 2003

i) Current Ratio : Total Current Asset/ Total

Current Liabilities

0.67 0.53 0.33 0.14

ii) Acid Test Ratio: Total Current Asset-

Inventories / total Current

Liabilities

0.32 0.27 0.19 0.04

iii) Accounts Receivable

Turnover :

Total Credit Sale / Accounts

Receivable

7.62 9.51 4.54 9.23

iv) Inventory Turnover : Cost of Goods Sold/ Average

Inventory

1.99 2.33 1.58 0.55

B. Market Measurements:

Feature 2006 2005 2004 2003

i) Price Earning Ratio : Make Price Per share

Earning Per Share

17.35 27.71 (9.50) (1.74)

ii) Earning Yield: Earning Per Share / Market Price

Per Share

0.06 0.04 (0.11) (0.57)

iii) Dividend Yield Dividend Per Share

Market Price Per Share

0.10 - - -

iv) Dividend Payout

Raito:

Dividend Per Share / Earning Per

Share

1.74 - - -

C. Asset Utilization ratio:

Feature 2006 2005 2004 2003

i) Sales to Cash : Sales / Cash Balance 16.88 31.39 20.72 20.96

ii) Sales to Accounts

Receivable

Sales / Accounts Receivable 7.62 9.51 4.54 9.23

iii) Sales to Inventories Sales / Inventories 3.19 3.63 -2.16 0.67

iv) Sales to Total Asset : Sales / Fixed Asset 0.51 0.35 -0.19 0.12

D. Profitability:

Feature 2006 2005 2004 2003

i) Gross Profit

Margin :

Gross Profit / Sales 37.85 35.68 26.79 18.93

ii) Operating Profit

to Sales

Operating Profit / Sales 4.70 4.60 (32.08) (256.20)

iii) Net Income to

Sales

After Tax Profit / Sales (91.79) (150.67) (37.37) (1,149.92)

E. Solvency Ratio:

Feature 2006 2005 2004 2003

i) Total Debt to

Capital :

Total Liabilities / T.

Liabilities + Equity

Capital

105.20 108.22 111.63 181.78

ii) Long Term

Debt to Equity

Capital:

Long Term

Debt/Equity Capital :

(1,151.48) (850.25) (438.22) -

A. Liquidity Ratio

1. Current Ratio:

It shows the amount of an available meet current liability of the company. It also shows the short

term liquidity of the company. High current ration means high current assets compared to current

liabilities. Having high current liability is risky but if the proper matching is possible the company.

Should go for high current liability and reduce financial cost. Navane Biponon Limited’s current

ratio is between.14 to 67. This is not a good current ration because the current liabilities are higher

than that of current assets.

2. Acid Test Ratio:

0

50

100

150

200

2003 2004 2005 2006

TDE

Year

00.050.1

0.150.2

0.250.3

0.35

If the sales stops at any moment how much of the current liabilities company can meet from its

current asset. The difference CR and ATR is due to cash & marketable securities. Keeping huge

cash balance is not good for the company. Because cash is a non earning asset unless it is deposited

in to interest earning accounts. So the difference between CR & ATR should not be large.

The difference between Navana Biponon Limited’s is quite high. It means that they maintain a high

balance, which is not good for the company.

B. Activity Ratio:

1. Inventory Turnover:

It shows that how many times the company transforms its inventory in to cash. It measures the

efficiency of the company. Illogic turnover means more quickly the company is able to convert its

inventory in to cash. It means the company requires less capital to invest for the same amount of

sales if it can ensure inventory turnover.

Inventory turnover for Navana Biponon Limited varied form 0.67 in year 2003, 2.16 in year 2004

3.19 in year 2006 is not good for the company. IT lf 2005 is good for the company.

2. Fixed Assets Turnover Ratio :

Year2003 2004 2005 2006

Aci

d Te

st R

atio

0

0.5

1

1.5

2

2.5

3

3.5

4

Year

2003 2004 2005 2006

Inve

ntor

y Tu

rnov

er

3.

The Fixed assets turnover Ratio measures how effectively the firm uses its plant and equipment to

help generate sales. The ratio of Navana Biponon Ltd. Shows an Increasing trend from the year

2003 to 2006. This indicating that the company is using its fixed assets efficiently.

3. Receivable Turnover Ratio:

Receivable turnover ratio measures liquidity of receivable. Receivable turnover of year 2005 is

better because RTR is 3.63

C. Market Measurement Ratio:1. Price earnings Ratio:

0

0.1

0.2

0.3

0.4

0.5

0.6

2003 2004 2005 2006

Year

FAT

0123456789

10

2003 2004 2005 2006

Sale

s to

AR

Year

-10-505

1015202530

2003 20042005 2006

Pric

e Ea

rnin

g R

atio

The Price earning ratio measures the amount that investors are willing to pay for each taka of a

firm’s earnings. The level of the price earnings ratio indicates the degree of confidence that

inventories have in the company’s future performance. The higher price earnings ratio, the higher is

investor confidence. Price earning ratio of 2005 is higher than that of others. But the position of

year 2004 and 2003 are Negative figure.

D.Profitability Ratio

1. Gross Profit Margin

Measures Profit generated after consideration of cost of Products Sold. This ratio actually measure

the firm controls the cost of inventory or manufacturing the Products and to pass along Price

Increases through the Sales of Customers. Navana Biponon Limited’s Gross Profit Ratio is 37.85

that are good sign for the company.

2. Operating Profit Margin Ratio

05

10152025303540

2003 2004 2005 2006

Gro

ss P

rofit

Mar

igin

Year

-300

-250

-200

-150

-100

-50

0

502003 2004

2005 2006

The Operating Profit margin measures the Percentage of each Sales Taka remaining after all costs

and expenses other than interest, taxes and Preferred stock dividends are deducted. It re present

the “pure profit” earned on each Sales taka. Operating Profit is “pure” because they measure only

the profit earned on operations and ignore interest, taxes and preferred stock dividends. A higher

operat9ing profit margin preferred. Navana Bipnon Limited’s Operating Profit Margin in 2006 is

higher than that of others.

E. Solvency ratio:1. Total Debt Equity Ratio:

Debt equity ratio measures debt to equity base use the debt carriers risk because is require the

interest as well as the principal payment.

Findings

Considering all those data collect and calculated at last we came to know the about the following

situation:

Navana Biponon Limited is in serious liquidity crisis.

OPM

0

50

100

150

200

2003 2004 2005 2006

TDE

Year

It is not highly efficient in dealings with accounts receivables and inventory management.

Navana Biponon Limited should increase its sales & improve its Credit policies.

Gross profit is not bad but it is underweighted due to maintain a huge liabilities.

Operating profit is too poor considering its huge investment.

The company is maintaining a huge loss year after year, but the situation is changing very

slowly.

Navana Biponon Limited Maintaining a huge debt capital in comparison with its equity

capital, which is also a very bad sign.

Conclusion

It is not a easy task to overcome all those disaster situations at a time. But Navana Biponon

Limited trying heart & soul to solve those successfully by utilizing its efficient man power,

friendly environment at its office & maintaining world class qualities in its products. Now it is

the time to take care the following situation pungently:

Improving its liquidity condition by increasing sales & improving receivables

collection.

Improving its long term solvency problems by generating equity capital.

If Navana Biponon Limited can do so, then why not we hope for the best?

Bibliography

The Annual Report of the Navana Biponon Limited for the year 2006




Official web site of Navana Biponon Limited

http://www.navana .com

Lawrence J. Gitman-Principles of Financial Management

Leopold A. Bernstein John J.wild-Financial Statement Analysis

leading edge health medical equipment company

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