liquidity ratios

Company Overview

Berger Paints Jamaica Limited Stated Mission as committed to provid[ing] the best quality protective coatings and excellent customer service via superior technology and well trained, highly motivated human resource-thereby creating an environment where we continue to be the preferred business partner, leader in the market-place, preferred employer, and outstanding corporate citizen, thus constantly satisfying the needs of all our stakeholders.

Berger International Limited was founded by Lewis Berger, German colour chemist, in London in 1760. However, the company only started manufacturing in the Caribbean in 1953, in Jamaica, Barbados and Trinidad and Tobago. Berger Paints Jamaica is a subsidiary of Berger International Limited, itself a subsidiary of the Asian Paints Group, a conglomerate which ranks among the top four decorative coating companies in the world.

Despite being in Jamaica since the early 1950s, Berger Paints Jamaica Limited became a publicly listed company on the Jamaica Stock Exchange in 1992 and has approximately 6,000 local shareholders. The manufacturing company therefore is a seasoned company in the paint industry. It offers protective coatings, architectural and wood finishes and marine paints. It also provides primers, stains and varnishes, furniture finishes, wood preservatives, road marking paints, enamels, light and heavy duty industrial finishes. Since its existence in the Caribbean, more specifically, in Jamaica, Berger has experienced innumerable success. Its success has been attributed to the development and manufacture of paint products which are technologically correct [and] environmentally friendly for the harsh tropical conditions.

Despite experiencing tremendous success in the past its growth has become stagnant due to The current economic situation in the country [which] has put a lot of pressure on [the] supply chain in terms of increased prices of raw material, because of the depreciation of the Jamaican dollar and tightening in the supply of foreign exchange" (Turra). The economic situation has also resulted in a shift in demand as a result of decreasing disposable income. The economic downturn has had an adverse impact on sectors, such as the automotive and construction, critical to the paint industry. With many of these sectors still struggling today, in a stagnant market, Berger has aggressively sought out foreign markets, enjoying tremendous success. Berger's strongest export market is Belize, due to the similarities with the Jamaican market, where it claims more than 30 per cent market share.

Berger Paints remains the largest paint-manufacturing company in the English-speaking Caribbean and produces more than 95 per cent of its over 200 products locally. These products are all non-toxic and environmentally friendly. The company established the first resin plant in the English-speaking Caribbean - West Indies Resin Products - to manufacture alkyd resin, a key ingredient in making oil-based gloss paints. A laboratory was built to conduct paint research and development according to tropical specifications. It is out of that laboratory, that leading paints such as Berger 303 Flat Emulsion, 404 Gloss Oil, Everglow Low Sheen Emulsion and Magicote Flat Emulsion emerged. The company also launched the first locally manufactured automotive paint, Viton.

One of Bergers strategic commitments is to maintain the quality of its products on a consistent basis. The attainment in the late 1990s of the international benchmark of quality issued by the International Standards Organization by achieving ISO 9002 certification is additional assurance of quality of product and service. The delivery of innovative, cutting-edge products and services have been the hallmarks of success for Berger Paints, ensuring the company's continued dominance in the local market.

Berger Paint Jamaica also focuses on protecting Jamaicas natural environment by reducing the environmental impact resulting from the production and use of its products. Consequently, they were the recipient of the 2014 Best Environmental Management programme, which was awarded by the Jamaica Manufacturers Association for the second successive year.

Quality and Environmental Policy Statement

The Berger team is committed to: The provision of products and services of the highest quality with customer satisfaction our primary goal The continuous improvement of the effectiveness of our quality and Environmental Management Systems The establishment of quantifiable objectives and targets for measuring our processes The reduction of negative impacts on our environment, compliant with applicable regulations and legislations The protection and preservation of our environment and to satisfy all our stakeholders.

Directors and Manager of Berger Jamaica PaintBoard of DirectorsManagement Team

Mr. Jalaj Dani - ChairmanMr. Mustafa Turra - General Manager/DirectorMr. Tom Thomas - Director/Regional HeadHon. Michael Fennell - Independent DirectorMr. Warren McDonald - Independent DirectorMr. Milton Samuda - Independent DirectorMr Pokar Chandiram - Independent Director Operations &a--ndependent Directororuence ows tht the company is able to external problem such as a shrinking economyArnold Bloomfield - Operations & Personnel Manager Mr. Newton Abrahams Sales ManagerMs. Gladys Miller Regional Technical ManagerMr. Huron Gordon Financial Controller / Company SecretaryMr. Trevor Lloyd Marketing Manager

REGISTERED OFFICE:Berger Limited Jamaica, 256 Spanish Town Road, Kingston 11, Jamaica, W.I.Tel: (876) 923-6226 Fax:+1-876-923-5129Website: www.bergeronline.com/corporate/jamaica.aspxEmail:[email protected]

Corporate Social ResponsibilityAs the leading paint manufacturer in Jamaica, Berger Paint Jamaica Ltd has a duty to maintain good corporate and social responsibility practices for the benefit of their colleagues, customers, suppliers and the society in general. Berger continues to support national development at the highest levels through outreach initiatives in education, sports, environmental upgrade and social initiatives. Some of the programmes that they are involved with are as follows:

School feeding programmeBerger has contributed to infrastructural development and nutrition programmes at the Riverton Meadows and Callaloo Mews Early Childhood Development centres - institutions situated in the communities adjoining its manufacturing plant. This, they have achieved by partnering with GraceKennedy limited.

EducationBerger Paints Jamaica Ltd has rewarded exceptional performers in education by sponsoring the Annual Roll of Honour Award, since 1993, by the Jamaica Teachers' Association (JTA) to outstanding educators. To recognize Berger Paints significant contribution to education, the JTA awarded the company the JTAs Partners in Education Award.

Additionally, the company finances a Master of Architecture scholarship, tenable at the Caribbean School of Architecture at the University of Technology, Jamaica.

SportsBerger has made major sports contributions through its long-standing sponsorship of the Jamaica Netball Association and the Gibson Relays. The company has also been sponsoring the Jamaica Basketball League for 30 years.

Beautification ProjectsThe company is active in various beautification projects across the island. For example, Berger paints in collaboration with the Ministry of Local Government, were instrumental in upgrading the Portmore Fire Brigade Station.Corporate GovernanceCorporate Governance is an essential element of the operations of Berger Paints Jamaica. The responsibility of ensuring the continuance of good governance is a charge of the Board of Directors and the management team. The corporate governance framework is institutionalised so as to ensure greater transparency, protect shareholders interest as well as to enhance the financial performance of the company. The directors are directly responsible for overseeing investments, operations and internal controls, financial reporting and compliance. In carrying out its functions, the board ensures that the Company is compliant with the laws of the land, the rules of the Jamaica Stock Exchange, Junior Market and the policies and procedures of the company.The Audit Committee was established to assist the board in the above-mentioned functions. The Board and the Audit Committee meets frequently (6 times for the financial year 2013-2014). The Audit Committee, chaired by Mr. Michael Fennell, is guided by the companys established terms of reference to assist the Directors in the companys performance relating to: The Companys performance Overseeing the relationship between the Company and its external Auditors The review of the effectiveness and adequacy of the Companys internal and financial controls The review of the external audit plans and subsequent findings The review of the effectiveness of the services provided by the external Auditors and other related matters Litigation reviews The review of compliance reports

Competitive AnalysisSwot Analysis for Berger Paint JamaicaBerger Paints Jamaica Limited delivers quality paint at affordable cost to suit the needs of the Jamaican market. The company imports the raw materials, add flavours and packages them for distribution as well as for export. Strengths Market leader Differentiation of new products Berger boasts a wide variety of products. Capacity expansion Manufacture of high quality paint by utilizing international best practices Reduced labour cost Customer oriented Berger has formulated products that are environmentally friendly High growth rate Innovative product research Large use of technology Excellent brand of productsWeaknesses Overdependence on decorative segments Pricing power limit in industrial quoting Cost Future profitability Scarcity of raw material The paint industry is raw material intensive, consequently, if raw materials are scarce it will affect the viability of the companyOpportunities Increase in tourist arrival Increase in remittances Marine life Increase in real estate or projects Growing demand New marketThreats Foreign exchange rates are volatile and can lead to incredible losses Increase in raw material cost this can also be directly related to the foreign exchange rates. As the Jamaican dollar loses its value, then the company is faced a decline in profits Stiff competition Increasing rates of interest Liquidity risk Tax changes Lowering profitability Decline in disposable income due to increased unemploymentPorters Five Forces of Competitive AnalysisBerger is currently facing competition from the following companies: BH Paint, Sherwin Williams, Omega Paint, Edgechem, Diamond Paint and Other companies that import various brands of paint. Porters five forces of competitive analysis are used to analyze competition within an industry and the steps that can be employed to create a competitive advantage.

Threat of new entrantsAs it relates to the painting industry, the barrier to entry is relatively high thus making the entry of new competitors relatively low. Some of the reasons for this includes: government policies as well as customer loyalty to brand Berger; which has been in Jamaica for over 60 years. With the current economic condition of Jamaica being poor, any new competitor would have to be a large manufacturing paint company that can take on the risk of investing in such an unstable economic climate.

Brand image is also of importance when considering the barrier to new entrants. Consequently, Berger Jamaica has continuously been rebranding and recreating its image, in order to increase the barrier.

Threat of substitute products or services Where awareness about paint is low, for example in rural areas, then the threat of substitute of products will be higher. The use of glass structures in malls and offices also represent a substitute which would reduce the need for paint. Additionally, white cement and whitewash represents some of the substitutes that Berger has to contend with. Subsequent to the threat of various substitutes, Berger Jamaica has diversified its product, creating paint for various types of materials and surfaces, thus reducing the threat of substitute products.

Bargaining power of customers Most consumers do not have sufficient knowledge of the quality, properties and benefits of a particular paint. Consequently, there would be a high reliance on the opinion of contractors/ painters; thereby becoming strong influencers. In this scenario, the bargaining power of the customer is relatively low. However, in the industrial sector, the customers have more buying power, as there are fewer customers with greater demands; losing a customer to a competitor would be devastating in this scenario. This can be overcome by offering deals as well as specialized services.

Bargaining power of suppliers This factor is said to be high as the paint industry is raw material intensive. Berger however, gets its raw material from the parent company; consequently, they are able to benefit from significant savings from group deals. As such the bargaining power for suppliers won't be a major factor.

Intensity of competitive rivalry Berger Paint faces competition from the various paint manufacturers that operate within the island. To stay ahead of the competition, Berger Paint focuses on product differentiation; consequently, rivalry among competitors is seen as low.

Ratio AnalysisLimitations to the Ratio AnalysisIn conducting our ratio analysis we were faced with the following limitations: We compared Berger Paints to other companies in the manufacturing industry such as Seprod Limited, Salada Foods Jamaica Limited and Jamaica Broilers Group. These companies are not ideal industry comparisons due to their core activities are dissimilar.

Financial accounting information is affected by estimates and assumptions and companies use different accounting practices. For example, companies may use different inventory valuation methods (LIFO vs FIFO). These practices may impair comparability.

Ratio analysis explains relationships between past information while users are more concerned about current and future information.

The ratios may be affected by seasonal factors that are experienced by the different companies, for example, Berger Paints high sales period may be different from that of Saladas.

The companies have different reporting periods and profits may have been affected by inflation.

A company may have some good or bad ratios in a particular period making it difficult to tell whether the companys performance is strong or weak in comparison to other companies.

Evaluation of Short-term Liquidity using Current and Quick RatiosLiquidity ratio is a class of financial metrics that is used to determine a companys ability to repay its short-term debt obligations (Investopedia, 2014). This is done by using the companys current assets to cover their current liabilities. The two ratios that were used in this analysis are Current and Quick ratios. Generally, the higher the value of these ratios, the larger the margin of safety that the company possess to cover short-term debts. Quick RatioIn analysing Berger Paints liquidity over a 5 year period, the general trends for both current and quick ratios tend to increase. In 2014, the current ratio has increased to 2.31:1, while the quick ratio 1.07:1. This means that Berger Paints is a very solvent company and over the 5 years shows consistency in their ability to cover their current liabilities. In analyzing the quick ratio, which removes inventory, its calculation shows that aged receivables, cash and other current assets are available to cover current liabilities. When their current ratio values were compared with those of the industry, Bergers current ratio value was 0.28 times higher than the market in 2014. This highlights that Berger Paint is capable of taking care of their current liabilities.In addition, when Bergers quick ratio values were compared with those of the market, only 2014 figure was in line with the market value of 1.09. However, previous years quick ratio values for Berger were approximately half the market ratio value.

Efficiency RatioTo analyze the efficiency of Berger Paint, the following ratios were used: debtors turnover, days sales outstanding, creditors turnover, payment period, inventory turnover and inventory holding period. With the exception of the inventory rate turnover, the efficiency ratios indicate that the company has been improving its efficiency for the review period 2010-2014. This also means that the company has been improving its efficiency despite the poor economic conditions. When the efficiency ratios of Berger are compared to the industrial average it reveals that Berger is not operating as efficiently as others within the industry. Table X Berger Paint Jamaica Ltd Debtors TurnoverDebtors Turnover is used to show how effective a company is at collecting debt. Higher ratios suggest frequent collection of its receivables. Berger Paints Debtors turnover ratio showed that they can convert its receivables (payments due to them) into cash between 6.01 - 7.38 times for the period 2010-2014. Berger Paints debtors turnover increased from 6.85 in 2010 to 7.15 in 2014; it therefore shows that Berger Paint has been improving the efficiency of its debt collection. Even though Berger has been improving its debt collection, it was performing below the industry average of 9.88. Berger Paint has been on a continuous path of improvement, in ollecting its debts; this would also have a positive effect on the cash flow of the company. In comparison to the Industry Average, further improvement can be realized in how frequent Berger collects its debts. Table X Berger Paint Jamaica Ltd Days sales OutstandingDays Sales Outstanding assesses the amount of days the company takes to convert sales to cash. It is in the companys best interest to collect cash from its credit sales as soon as possible so as to increase their cash flow and liquidity. Throughout the review period, Berger Paints collection days fluctuated. The shortest collection time was experienced in 2013 with collection period being, 49 days while 2011 had the longest time of 61 days. With the exception of 2011, Berger Paints has been collecting within their terms to pay, i.e. between 30 and 60 days. The Industry Average ratio for collecting days sales outstanding for the 2010-2014 period was 49.92 days. When compared to the industrial average, it shows that the Berger Paint has been converting its sales at a fairly efficient level, however, improvements can still be achieved in order to realize more efficient rates.Table X Berger Paint Jamaica Ltd Credit TurnoverCreditors Turnover measures the rate at which a company pays its suppliers. This ratio is used to assess the companys short term liquidity. Higher values, for this ratio is preferred as it shows that the company is able to pay its current liabilities. This would influence suppliers interest in doing business. For the five years under review, the rate for Berger Paint experienced a steady increase, moving from a rate of 2.74 in 2010 to 4.05 in 2014. The figure for 2010 suggest that the company was experiencing cash flow problems hence its relatively low payment times. However by 2014, Berger paint, has increased two-fold its payment times to its suppliers, suggesting that its cash flow has also improved during the period. Despite improvements in the amount of times Berger pays its suppliers, there are still significant improvements to be done as the industrial average shows a payment of 8.6 times.Table X Berger Paint Jamaica Ltd Payment periodPayment Period measures short term liquidity by assessing how quickly suppliers are repaid. The payment period over the years 2010-2014, was reduced from 133 days in 2010 to 90 days in 2014. The payment period ratio is similar to that of credit turnover ratio, in that it tells how credit worthy the company is. In essence both ratios would be important determining factors for suppliers as well as creditors. The average payment period for the 2010-2014 period was 103.4 days. When compared to the industrial average of 58.28 days, it revealed that the company was not paying suppliers as quickly as others in the industry. This could mean that Berger was having problems with its cashflow which could have negative implications for its suppliers relationship.Table X Berger Paint Jamaica Ltd Stock/Inventory turnoverInventory Turnover measures the number of times a company sells its inventory and replaces it with new inventory during a given accounting period. A high value of inventory turnover indicates a better performance. Since Berger paints is a manufacturing company, it is critical that they have a quick inventory turnover, as this will boost sales and profit. Contrary to the previous efficiency ratios, the inventory turnover has been reducing steadily between 2010 and 2014. Their highest turnover for the period was in 2010 with a rate of 3.27. The least inventory turnover was experienced in 2014 with its ratio being 2.69; this could mean that the company had fewer inventory in 2014 as it was more focused on reinventing its brand image or simply that sales had been reduced. The inventory turnover industrial average for 2014 was 4.97. This means that Berger was operating at a rate two times below the industrial average for 2014.Table X Berger Paint Jamaica Ltd Inventory holding period/days stock on handThe inventory holding period is directly related to the rate of Inventory turnover; the holding period would be dependent on the rate of inventory turnover. A slow turnaround on sales may indicate internal problems such as brand image or an external problem such as a shrinking economy. The inventory holding period saw a steady increase from 2010 to 2014. The company held inventory for 112 days in 2010 and 136 days in 2014. These results coincide with the inventory turnover ratio results, because the inventory period was also increasing. This directly reduced the inventory turnover rate for the period. On average, the company took 119.2 days to get rid of its inventory this is below the industry average rate of 107.94 days. However, this comparison might not be representative of Berger as its inventory days would be longer as they are nonperishable items; consequently their inventory days would be shorter.

Evaluating Profitability of the CompanyNet Profit RatioNet Profit Ratio or Profit Margin ratio is a profitability ratio that shows relationship between net profit after tax and net sales. It is computed by dividing the net profit (after tax) by net sales. This ratio reveals the remaining profit after all costs of production, administration and financing have been deducted from sales and income taxes recognized. It is one of the best measures of the overall results of a firm and is mainly used to judge performance over a period of time. A high ratio indicates the efficient management of the affairs of business. The Net profit ratio has been fluctuating for the five year period with 2011being the highest of 4.53%, followed by 2010 with 4.05%. There was a sharp decline in 2012 by 52.32% to 2.16 %. The ratio recovered in 2014, increasing by 20.15% to a figure of 3.16%, this meant Berger has a net income of $0.32 for each dollar of sales. In other words 3.16% of sales are left over after all the expenses were paid by Berger. See Figure 5. Sales in 2010 were the highest, followed by 2011; the lowest period was 2012, which meant the company was not very efficient. Even though 2011 recorded the lowest sales figure for the comparative period, they also recorded the second highest net profits, thus producing an overall greater Net Profit Margin. See Table 9. There were several factors why 2012 had a low net profit margin, the operating expenses went up by 6% when compared to 2011 and other income fell by 331%. Even though taxation decreased in 2012, the income was not enough to offset the cost as such that resulted in a low overall figure for net profit margin. The financial year 2014 reported an increase in expenses and also an increase in profit when compared to 2013. Taxation and other expenses also increased, but the income grew enough to offset the increase and led to a recovering net profit margin. When compared with the industry, Bergers average of 9.88%, Bergers average was below by approximately 200%. See Figure 6. Gross Profit MarginGross margin ratio is a profitability ratio that compares the gross margin of a business to the net sales. Gross Profit margin ratio or Gross Margin is the ratio of gross profit of a business to its revenue. It is a profitability ratio measuring what proportion of revenue is converted into gross profit, which is sales less cost of goods sold. The gross profit ratio is calculated by dividing Gross Profit by Sales then multiplying by 100.See Table 10. Higher values indicate that more cents are earned per dollar of revenue which is favorable because more profit will be available to cover non-production costs. The gross profit margin for Berger Paints Ltd has been consistent for all five years with an average of 51.32%, with the exception of 2011, which reported an approximate 3% increase to 54.08%. For the 2011 period, Sales were the lowest of all five years but the cost of goods sold was also the lowest which maybe the reason for the increase of approximately 3% from 2010. See Figure 7.An average percentage of 51.7 % indicates the company can make a reasonable profit once it keeps its overheads in control, but it also indicates that the company has not been doing anything different to increase its profitability since 2012. The financial year 2014 ended with an average of 51.3%, this means that for every sale Berger makes, it gets to keep 51.3 % of every dollar to go towards non production expenses.Bergers net profit margin is significantly higher than its Gross profit margin ratio, which would indicate that its non production expenses are very high. Some of these are Directors emoluments, which were relatively high figures when compared to the remainder of expenses, Net foreign exchange loss as well as in 2011, their they had the highest allowance for doubtful debts. See Figure 8. Bergers Gross Profit Margin ratio was above the industrys average of 29.79% by approximately 74 % which would confirm that even though its sales figure is high, the average is brought down by the high operating expenses.

Return on Capital EmployedReturn on capital employed or ROCE measures how efficiently a company can generate profits from its capital employed by comparing net operating profit to capital employed. A higher ROCE indicates more efficient use of capital. ROCE should be higher than the companys capital cost; otherwise it indicates that the company is not employing its capital effectively and is not generating shareholder value. It is calculated by dividing Capital Employed by Net Profit before tax. Capital Employed is the sum of shareholders' equity and debt liabilities; it can be simplified as Total Assets less Current Liabilities. See Table 11.Bergers ROCE ratio has been fluctuating for the past five years, this is as a direct result of the fluctuation of the net profit before interest and tax totals as capital employed remained relatively constant for all five years. In 2010 and 2011, ROCE was at its highest, with an average of 17.73%, however, in 2012 it fell by 8.94%. This can be attributed to the significant decrease in the Net profit before tax and interest of approximately 50%. The ratio increased in 2014 by 4.39% to 13.6 %. Net profit before interest and tax also increased by 30.11 %. See Figure 9Further analysis into the net profit figures, which is derived from subtracting other income from expenses, showed that the expense increased from 2011 to 2014, leveling at 1, 662,397. The highest expense figure was in 2010, which also had the highest ROCE. For the periods, 2013 and 2014, the years with the lowest ROCE, those had the lowest income figure reported. The income figure increased by approximately 220% in 2014, the highest income figure was reported in 2011. There is a positive relationship between the net profit margin and the ROCE as the higher the net profit margin, the higher the ROCE. See Figure 10. Net Sales were the highest in 2010, so therefore the profit obtained from investment was high as well, in addition to 2014. What attributed to high ROCE in 2011 were due to low costs. In 2012 and 2013, the net profit margin was at the lowest likewise ROCE. When compared to the Industrys average of 19.89 %, Berger has been below.

Return on Shareholders Fund (ROSF) Return on Shareholders Funds or Return on Net Worth is one of the ratios of overall profitability group, which indicates the profitability of a firm in relation to the funds supplied by the shareholders or owners. This ratio is very important from the owners point of view as it helps the firm to know whether the firm has earned enough returns to repay its shareholders or not. The formula is as follows: Profit after tax (net income)/Total Shareholder's Equity]*100. Total Shareholders Equity is Share capital + reserves. See Table 12.Berger reported the highest ROSFs in 2010 and 2011, with 16.8% and 14.6% respectively. The ratio fell by more than 100 % in 2012. Since that period, there has been a steady increase, in 2014 there was an increase of approximately 50%, ending at 12.81%, and this means that Berger generated $0.1281 of profit for every $1 of shareholders equity in 2014. In real terms, for the period 2014, Berger generated 70,331,609 (0.1281*54,906,000). In 2010, they generated the highest profit of $11,987,402, whilst in 2013 they generated the least. The rising ROSF in 2014 indicates that Berger is increasing its ability to generate profit without needing as much capital. See Figure 11. Interesting to note, even though the ROSF in 2014 was the third largest for the period, it had the lowest Total Shareholders equity for the period. The fluctuation in the figures for shareholders equity is purely due to the change in the Total Reserves as Share Capital remains constant for the five year period. The reason for the rise in ROSF could be attributed in the fact that in 2012, Berger retained a total of Total reserves for 2014 was the lowest, this could be due to the fact that Berger retained 300,658 as revenue reserves that were not issued to shareholders that wouldve been used to invest in the business. Of the five years that was the largest figure recorded.

Evaluating Cash Flow Adequacy The cash flow adequacy ratios namely the cash flow yield, cash flow to sales, cash flow to assets and free cash flow will indicate Bergers ability to meet its capital expenses, debt repayment and dividends from cash flow derived from operating activities.Cash Flow YieldThe cash flow yields measures how the Berger generates cash from its existing operations. Bergers cash flow yield decreased between 2010 and 2011 by 27.22% from 1.8 to 1.31. In 2012 there was a more significant drop of 54.2% to 0.6 indicating a potential slowdown in salesThis indicates that the company is taking longer to convert its net current assets and current liabilities into cash. The increasing trend indicates that the company has challenges in generating cash to meet its operational expense. This was further highlighted by the negative cash flow yield in 2014. Cash Flow to SalesCash flow to sales measures the company ability to convert sales into cash. The companys cash flow to sales ratio continuously declined from 7.3% to 1.3% between 2010 and 2012 indicating the company had a continuous challenge in generating sufficient cash from its sales to meet its future operating requirements. The company cash generating ability rebounded in 2013 when the ratio increased to 6.7% but dropped to negative 3.7% in 2014. This indicates that the company was unable to generate sufficient cash from its sales to meets its future operating requirements. The declining trend and negative ratio indicates that there is a decrease in the companys creditworthiness and productivity, and is an indication that the company could be in a decline. Cash flow to AssetsCash flow to assets ratio measures the efficiency in which a company uses its assets to generate cash. The companys cash flow to assets ratio continuously declined from 14.9% to 2.4% between 2010 and 2012 indicating the company increasing inefficiencies in generating assets utilization. The company operating efficiency improved in 2013 before dropping to negative 7.3% in 2014. Free Cash FlowsFree cash flows show the amount of cash available for distribution to shareholders or bondholders. The companys free cash flow decreased continuously from 2010 to 2012. There was a temporary recovery in free cash flow in 2013 before decreasing again in 2014. The company free cash flow was negative in 2012 and 2014 indicating that the company was not able to generate sufficient cash flows for future dividends payment or possible interest payments. The deteriorating trend and negative free cash flow indicated that the companys will have difficulties growing the business and paying dividends to its shareholders.

Evaluating the Market StrengthEarnings Per ShareEarnings per share (EPS) ratio measures how many dollars of net income have been earned by each share of common stock. It is computed by dividing net income (profit after tax) less preferred dividend by the number of shares of common stock outstanding during the period. See Table 17. It is a popular measure of overall profitability of the company and is usually expressed in dollars. Earnings per share are generally considered to be the single most important variable in determining a share's price.Earnings per share have been fluctuating over the comparative period. It fell by more than 100% from 2010 2012, after which it slowly recovered ending at $0.26 in 2014. See Figure 16. This means that for every share that is invested in Berger, it is generating $0.26 dollars of net income. In theory consistent improvement in the EPS figure year after year is the indication of continuous improvement in the earnings. We would have to wait until I see. When compared with the industry, Bergers earning per share is way below the industrys average by more than 332%. See Figure 17.Price Earnings Ratios (P/E ratio)This measures how many times the earnings per share (EPS) has been covered by current market price of an ordinary share. It is computed by dividing the current market price of an ordinary share by earnings per share. See Table 18. Price earnings ratio is a very useful tool for financial forecasting. It gives information about the amount that the investors are willing to invest in the company to earn $1.The highest figure was 2012 and what it means is that Investors are willing to pay $19.30 for every dollar of earnings that Berger generates. For 2014, Berger is below the industrys average of approximately 50%. Performance wise 2010 and 2011 were two very good years for Berger so its no price surprise the market price and simultaneously falling price earnings ratio. Investors are still confident and I guess hopeful in Berger turning around its profitability. See Figure 18.

Dividend YieldDividend yield ratio shows what percentage of the market price of a share a company annually pays to its stockholders in the form of dividends. It is calculated by dividing the annual dividend per share by market value per share. See Table 19. The ratio is generally expressed in percentage form and is sometimes called dividend yield percentage. Since dividend yield ratio is used to measure the relationship between the annual amount of dividend per share and the current market price of a share, it is mostly used by investors looking for dividend income on continuous basis. The ratio is important for those investors who purchase shares to earn dividend income. Also the shares that earn higher dividend income can be sold in the market at higher prices that usually results in higher profits for the investor.The financial year 2011 had the highest dividend yield of 9.5%, in 2012 it fell, but since then it has been gradually increasing, closing at 8.13%. In 2014 investors would earn 8.13% on their investments (in the form of dividends) if he buys the common stock at current market price. See Figure 19.When compared to the industrys average of 3.99%, For 2014 Bergers figure is approximately 100%.

Dividend Cover This measures of the company's ability to pay off its required preferred dividend payments. A healthy company will have a high coverage ratio, indicating that it has little difficulty in paying off its preferred dividend requirements. Not only does this ratio give investors an idea of a company's ability to pay off its preferred dividend requirements, but it also gives common shareholders an idea of how likely they are to be paid dividends. If the company has a hard time covering its preferred dividend requirements, common shareholders are less likely to receive a dividend payment on their holdings. See Table 19

In 2010, profit after tax could service dividend payments approximately 4 times; this was the highest for the comparative period. Since the massive decrease of more than 100%, there has been a steady increase, the ratio closed off at 1.97 for 2014, Profit after tax could service 2 times in 2014. When 2014 was compared with the industry, the industry average was 2.89, which is approximately 27 greater than Bergers average. See Figure 20

Trend AnalysisBerger Paints Jamaica limited increased its sales by 13% for years 2011 to 2014. The company was not able to increase its sales volume by a greater percentage due to harsh economic conditions and competition from other suppliers.There was a 50% decline in operating profit for the year 2012, however the company managed to increase its operating profit by 6% in 2013 and 24% in 2014. Net profits grew by 12% in 2013 and 17% in 2014. The company was able to achieve this growth due to an increase in sales and effective cost management.Figure X Trend in Profits for period 2010 to 2014

A trend analysis of the companys statement of financial position revealed that total non-current assets remained constant for the period 2011-2013, however there was a growth of 9% in 2014 due to an increase in the value of property, plant and equipment and acquisition of assets.There was a 6% increase in total current assets in 2014 when compared to 2013. This increase was due mainly to a decline in inventory turnover. Total shareholders equity grew by 5% for years 2011 to 2013, however there was a decline of 12% in 2014.Total non-current liabilities increased by 38% in 2014 when compared to 2013. This was due mainly to an increase in post employments benefits which increased by $39,328 million.There was a 3% increase in total current liabilities in 2014 when compared to 2013. This increase was a result of the increase in the amount due to immediate parent company.

Vertical Analysis The vertical analysis of the income statement revealed that there was a 1% increase in net profit as a percentage of sales in 2011 when compared to 2010, however there was a 2% decline in 2014 when compared to 2011. The analysis also showed that for every $1 earned in sales for the year 2014, $0.03 was accounted for in net profit. Figure X- Net Profit as a Percentage of SalesThe vertical analysis of the statement of financial Position showed that non-current assets as a percentage of total assets declined by 11% in 2014 when compared to 2010. On the other hand, current assets grew by 11% in 2014 when compared to 2010. This shows that the company increased its current asset base in 2014.Total shareholders equity as a percentage of total assets declined by 9% in 2014 when compared to 2010 and non-current liabilities grew by 6%. Current liabilities as a percentage of total assets, increased by 4% in 2011 and then declined by 7% in 2012. There was an overall increase of 6% in 2014 when compared to 2012.

Horizontal Analysis of Quarter ended September 30, 2014Berger Paints Jamaica Limited experienced a 47% decline in net profit for quarter ended September 30, 2014 when compared to the similar period of 2013. However, the company recovered from a loss of $0.372 million for quarter ended June 30, 2014 to gain a net profit of 8.570 million for quarter ended September 30, 2014. This was due mainly to an increase in sales volume and a reduction in cost of sales. Growth in the construction sector, particularly new housing developments, and renovations have resulted in large amounts of paints being sold. There was a significant improvement in earnings per stock unit for quarter ended September 30, 2014 which moved from $0.00 for quarter ended June 30, 2014 to $0.04. Berger Paints remain optimistic for the 2014 financial year and will continue its focus on increasing sales, improving operational efficiency and managing costs.

Should you invest in Berger Paints?We dont recommend that you invest in Berger Paints Jamaica Limited at this time as the companys performance relies heavily on growth in the wider economy and based on our current economic conditions, Jamaica continues to experience low growth.Berger Paints net profit margin is below the manufacturing industrys average and the market price per share for the company has been declining since 2012.The company experienced a loss in the June 2014 quarter, and there was a 47% decline in net profit for quarter ended September 2014 when compared to the same period in 2013.In concluding, we note that the company remains optimistic for the future as they anticipate growth in the construction sector which may result in increase in paint sales.

Reference Investopedia, L. (2014). Investopedia. Retrieved from www.investopedia.com: http://www.investopedia.com/terms/l/liquidityratios.aspIT, A. (2011-2014). Ready Ratios. Retrieved from www.readyratios.com: http://www.readyratios.com/reference/liquidity/current_ratio.html

http://accountingexplained.com/financial/ratios/advantages-limitationsRetrieved Dec 10, 2011

http://www.investopedia.com/exam-guide/cfa-level-1/financial-ratios/uses-limitations-ratios.aspRetrieved Dec 10, 2011

Our Accounts textbook used as referenceBERGER PAINTS JAMAICA LIMITED

STATEMENT OF FINANCIAL POSITION AS AT YEARS 2010-2014

2014Restated 2013Restated 201220112010

$'000$'000$'000$'000$'000

ASSETS

Non-current assets

Property, plant and equipment140,331126,993130,762131,380148,348

Long-term receivables159

Post employment benefits42,466119,874121,670120,402130864

Deferred tax assets27,1862,612

Total non-current assets209,983249,479252,432251,782279,371

Current assets

Inventories363,510265,319249,235217,979209,952

Due from fellow subsidiaries1903,5582,4164,9112,074

Trade and other receivables269,232216,507219,132277,692220,699

Investment security54130,270

Cash and bank balances40,781130,52193,509122,42295077

Total current assets674,254646,175564,292623,004527,802

Total assets884,237895,654816,724874,786807,173

EQUITY AND LIABILITIES

Shareholders' Equity

Share capital141,793141,793141,793141,793141,793

Revaluation reserves44,6954454542,66642,46642,266

Revenue reserve

Income statement242,243300,658296,796280,273273,977

Total shareholder's equity428,731486,996481,255464,532458,036

Non-current liabilities

Post employment benefits165,904126,576111,117107,68287,309

Deferred tax liability4,2426,22917,944

Total non-current liabilities165,904126,576115,359113,911105,253

Current liabilities

Due to immediate parent company17,3709,5138,8459,5868,230

Due to fellow subsidiaries4,2304,987608

Dividends payable14,57513,71913,15415,83012,021

Provisions13,30614,85912,87314,47418,894

Trade and other payables230,621235,431175,793220,549187,174

Income tax payable9,5003,5738,83735,90417,565

Total current liabilities289,602282,082220,110296,343243,884

Total equity and liabilities884,237895,654816,724874,786807,173

BERGER PAINTS JAMAICA LIMITED

INCOME STATEMENT FOR YEARS ENDED 2010-2014

2014Restated20132012201115 months ended March 31,2010

$'000$'000$'000$'000$'000

Sales (net of discounts and rebates)1,737,9951,608,2161,540,8691,498,2411,829,255

PROFIT BEFORE FINANCE COSTS AND TAXATION80,84456,50550,976101,132101,268

Finance Costs(136)(27)(1,574)(41)(5852)

PROFIT BEFORE TAXATION80,70856,47849,402101,09195,416

Taxation(25,802)(14,238)(16,085)(33,285)(21,317)

NET PROFIT FOR THE YEAR54,90642,24033,31767,80674,099

Earnings per stock unit$0.26 $0.20 $0.16 $0.32 $0.35


STATEMENT OF CHANGES IN EQUITY

YEAR ENDED MARCH 31, 2014

Share CapitalRevaluation ReservesRevenue Reserve - Income StatementTotal

$'000$'000$'000$'000

Balance April 1, 2012 as previously reported141,79342,666287,871472,330

Adjustments on application of revised IAS 198,9258,925

Balance as April 1, 2012 as restated141,79342,666296,796481,255

Net Profit for the year as restated42,24042,240

Other comprehensive income for the year as restated1,879(10,516)(8,637)

Total comprehensive income for the year as restated1,87931,72433,603

Dividends paid(27,862)(27,862)

Balance as at March 31, 2013 as restated141,79344,545300,658486,996

Net Profit for the year54,90654,906

Other comprehensive loss for the year150(85,459)(85,309)

Total comprehensive loss for the year0150(30,553)(30,403)


Balance as at March 31,2014141,79344,695242,243428,731





$'000$'000$'000$'000

Balance as at April 1, 2010141,79342,266273,977458,036

Net Profit for the year 67,80667,806

Other comprehensive income for the year 200200

Total comprehensive income for the year20067,806 68,006


Balance as at March 31, 2011141,79342,466280,273464,532


Other comprehensive loss for the year200200

Total comprehensive loss for the year020033,317 33,517


Balance as at March 31,2012141,79342,666287,871472,330





$'000$'000$'000$'000

Balance as at April 1, 2009141,79342,066220,239404,098

Net Profit for the fifteen months period74,09974,099

Other comprehensive income for the fifteen months period200200

Total comprehensive income for the period20074,099 74,299




Other comprehensive loss for the year200200

Total comprehensive loss for the year020067,806 68,006




STATEMENT OF CASH FLOWS

YEARS ENDED 2010-2014

201420132012201115 months ended March 31, 2010

$'000$'000$'000$'000$'000

CASH FLOWS FROM OPERATING ACTIVITIES

Net profit for the year54,90642,24033,31767,80674,099

Adjustments for:

Depreciation20,03418,21522,290 27,526 38,968

Profit on sale of property, plant and equipment(3,225)(2,263)

Unrealised foreign exchange gains (net)(1,647)(1,221)(316)(866)(2,785)

Post retirement benefit charge18,60218,58430,017 43,984 12,013

Income tax expense25,80214,23816,085 33,285 21,317

Interest income(272)(270)(855)(943)(728)

Interest expense136271,574 41 5,852

Gain on sale of property, plant and equipment(3,850)

Provision charge17,92817,5093,684 3,877 12,751

Impairment loss recognised on trade receivables4,34115,4768,281 15,422 15,463

Impairment loss recognised on other receivables1,863546 1,039 660

Reversal of impairment loss on trade receivables(1,504)(8,163)(3,621)(2,628)(4,860)

Write-off of trade receivables(12,194)

Operating cash flows before movements in working capital:136,339116,635111,002185,318158,293

Increase in trade and other receivables(57,425)(4,688)53,354 (72,112)91,410

Increase in inventories(98,191)(16,084)(31,256)(8,027)127,060

Increase in due to fellow subsidiary companies2,611 3,237 3,103 (2,837)3,965

Provisions utilised(19,481)(15,523)(5,285)(8,297)(19,173)

(Decrease) Increase in trade and other payables(4,810)59,638 (44,756)33,194 (185,543)

Increase due to immediate parent company7,857 668 (741)1,356 (16,856)

Post employment benefits constributions(15,810)(15,350)(14,462)(13,149)(15,635)

Cash (used in) generated from operations(48,910)128,533 70,959 115,446 143,521

Income tax paid(15,814)(20,972)(49,402)(26,461)(4,358)

Interest paid(136)(27)(1,574)(41)(5,852)

Net cash (used in) provided by operating activities(64,860)107,534 19,983 88,944 133,311

CASH FLOWS FROM INVESTING ACTIVITIES

Interest received272 270 855 943 728

Long term receivables1,445 3,587

Proceeds from sale of property, plant and equipment3,850 5,815 5,323

Acquisition of property, plant and equipment(33,372)(14,446)(21,672)(13,148)(10,907)

Investment security (net)29,729 (30,270)

Net cash provided by (used in) investing activities479 (44,446)(20,817)(4,945)(1,269)

CASH FLOWS FROM FINANCING ACTIVITIES

Dividends paid(27,006)(27,297)(28,395)(57,701)(19,238)

Net cash used in financing activities(27,006)(27,297)(28,395)(57,701)(19,238)

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS(91,387)35,791(29,229)26,298 112,804

OPENING CASH AND CASH EQUIVALENTS130,52193,509122,422 95,077 (20,200)

Effect of foreign exchange rate changes1,6471,221316 1,047 2,473

CLOSING CASH AND CASH EQUIVALENTS40,781 130,52193,509122,42295,077


COMMON SIZE FINANCIAL POSITION

FOR THE YEARS 2010-2014

20142013201220112010

%%%%%

ASSETS

Non-current assets

Property, plant and equipment16%14%16%15%18%

Long Term Receivables 0%0%0%0%0%

Post employment benefits5%13%15%14%16%

Deferred tax assets3%0%0%0%0%

Total non-current assets24%28%31%29%35%

Current assets

Inventories41%30%31%25%26%

Due from fellow subsidiaries0%0%0%1%0%

Trade and other receivables30%24%27%32%27%

Investment security0%3%0%0%0%

Cash and bank balances5%15%11%14%12%

Total current assets76%72%69%71%65%

Total assets100%100%100%100%100%



Share capital16%16%17%16%18%

Revaluation reserves5%5%5%5%5%

Revenue reserve

Income statement27%34%36%32%34%

Total shareholder's equity48%54%59%53%57%


Post employment benefits19%14%14%12%11%

Deferred tax liability0%0%1%1%2%

Total non-current liabilities19%14%14%13%13%

Current liabilities

Due to immediate parent company2%1%1%1%1%

Due to fellow subsidiaries0%1%0%0%0%

Dividends payable2%2%2%2%1%

Provisions2%2%2%2%2%

Trade and other payables26%26%22%25%23%

Income tax payable1%0%1%4%2%

Total current liabilities33%31%27%34%30%

Total equity and liabilities100%100%100%100%100%

BERGER PAINTS JAMAICA LIMITED:

STATEMENT OF FINANCIAL POSITION AS AT YEARS 2010-2014

2014Restated 2013Restated 20122011

%%%%

ASSETS

Non-current assets

Property, plant and equipment95%86%88%89%

Long term Benefits0%0%0%0%

Post employment benefits32%92%93%92%

Deferred tax assets0%0%0%0%

Total non-current assets75%89%90%90%

Current assets

Inventories173%126%119%104%

Due from fellow subsidiaries9%172%116%237%

Trade and other receivables122%98%99%126%

Investment security0%0%0%0%

Cash and bank balances43%137%98%129%

Total current assets128%122%107%118%

Total assets110%111%101%108%



Share capital100%100%100%100%

Revaluation reserves106%105%101%100%

Revenue reserve

Income statement88%110%108%102%

Total shareholder's equity94%106%105%101%


Post employment benefits190%145%127%123%

Deferred tax liability0%0%24%35%

Total non-current liabilities158%120%110%108%

Current liabilities

Due to immediate parent company211%116%107%116%

Due to fellow subsidiaries0%0%0%0%

Dividends payable121%114%109%132%

Provisions70%79%68%77%

Trade and other payables123%126%94%118%

Income tax payable54%20%50%204%

Total current liabilities119%116%90%122%

Total equity and liabilities110%111%101%108%


COMPARATIVE INCOME STATEMENT FOR YEARS ENDED 2010-2014

20142013201220112010

%%%%%

Sales (net of discounts and rebates)95%88%84%82%100%

PROFIT BEFORE FINANCE COSTS AND TAXATION80%56%50%100%100%

Finance Costs2%0%27%1%100%

PROFIT BEFORE TAXATION85%59%52%106%100%

Taxation121%67%75%156%100%

NET PROFIT FOR THE YEAR74%57%45%92%100%


STATEMENT OF FINANCIAL POSITION AS SEPTEMBER 30,2014

September 30, 2014September 30, 2014

$'000$'000

ASSETS

Non-current assets

Property, plant and equipment133,669140,918

Deferred tax assets27,1860

Investment Security5410

Post employment benefits46,814128,628

Total non-current assets208,210269,546

Current assets720,499670,300

Total assets928,709939,846



Share capital141,793141,793

Revaluation reserves44,69544545

Revenue reserve

Income statement233,295285,877

Total shareholder's equity419,783472,215


Post employment benefits182,172146,512

Deferred tax liability0312

Total non-current liabilities182,172146,824

Current liabilities326754320807

Total equity and liabilities928,709939,846


INCOME STATEMENT FOR SIX MONTHS ENDED SEPTEMBER 30, 2014

Quarter ended September 30, 2014Quarter ended September 30, 2013Change%

$'000$'000

Sales (net of discounts and rebates)430,207435,249-5,042-1%

(Loss)/Profit from operations11,44823,301-11,853-51%

Income from investments1548-33-69%

Finance Costs0 72 (72)-100%

PROFIT/(LOSS) BEFORE TAXATION11,46323,277-11,814-51%

Taxation2,893 6,961 (4,068)-58%

NET PROFIT FOR THE YEAR8,57016,316-7,746-47%

Earnings per stock unit$0.04$0.08



Quarter ended June 30,2014Quarter ended June 30,2013Change%

$'000$'000

Sales (net of discounts and rebates)387,248352,11235,13610%

(Loss)/Profit from operations(510)-4,7284,218-89%


Finance Costs22 0 22 0%

PROFIT/(LOSS) BEFORE TAXATION-532-4,5183,986-88%

Taxation160 1,355 (1,195)-88%

NET PROFIT FOR THE YEAR-372-3,1632,791-88%




Six Months ended September 30,2014Six Months ended September 30,2013Change%

$'000$'000


(Loss)/Profit from operations1093818501-7,563-41%



PROFIT/(LOSS) BEFORE TAXATION10,93118,687-7,756-42%

Taxation2,733 5,606 (2,873)-51%

NET PROFIT FOR THE YEAR8,19813,081-4,883-37%


Quarter ended September 30, 2014Quarter ended June 30, 2014Change%

$'000$'000


(Loss)/Profit from operations11,448-51011,958-2345%

Income from investments150150%


PROFIT/(LOSS) BEFORE TAXATION11,463-53211,995-2255%

Taxation2,893 160 2,733 1708%

NET PROFIT FOR THE YEAR8,570-3728,942-2404%




Quarter ended September 30, 2014Quarter ended June 30, 2014Change%

$'000$'000


(Loss)/Profit from operations11,448-51011,958-2345%

Income from investments150150%


PROFIT/(LOSS) BEFORE TAXATION11,463-53211,995-2255%

Taxation2,893 160 2,733 1708%

NET PROFIT FOR THE YEAR8,570-3728,942-2404%


LIQUIDITY RATIOSDEFINITION

Current Ratio Current assets/Current liabilities

Quick Ratio Current assets-Inventories/Current liabilities

ASSET MANAGEMENT/EFFICIENCY RATIOS

Debtor Turnover Credit sales/Average trade receivables

Days Sales Outstanding/Collection Period (days)/Receivable days Days in year (365)/Debtor turnover

Creditor Turnover Cost of Sales+/- Change in stocks/Average creditors

Payment Period (days)/Payable daysDays in year (365)/Creditor turnover

Stock/Inventory TurnoverCosts of sales/Average stock

Days Stock on Hand (days)/Inventory daysDays in the year (365)/tock turnover

PROFITABILITY RATIOS

Net Profit Ratio/Profit Margin[Profit after tax (net income)/sales]*100

Gross Profit Margin[Gross Profit/sales]*100

Return on Capital Employed (ROCE)Profit before interest and tax/(Total assets-Current liabilities)*100

Return on Shareholder's Funds (ROSF)[Profit after tax (net income)/Share capital + reserves]*100

LONG TERM SOLVENCY RATIOS

GearingLong-term debt + Preference shares/Ordinary share capital + reserves

Interest Coverage RatioIncome before interest expense and tax (EBIT)/Interest expense

CASH FLOW ADEQUACY RATIOS

Cash Flow YieldNet cash flow from operating activities/Profit after tax (Net income)

Cash Flow to SalesNet cash flow from operating ativities/Net sales

Cash Flow to AssetsNet cash flow from operating ativities/Average total assets

Free Cash FlowNet cash flow from operating activities-dividends-Net Capital Expenditure

MARKET STRENGTH/INVESTMENT RATIOS

Earnings per shareProfit after tax - Preference Dividends/# Ordinary shares outstanding

Price Earnings (PE) RatioMarket price per share/Earnings per share

Dividend YieldDividend per share/Market price per share

Dividend CoverProfit after tax - Preference Dividends/Ordinary Dividend

Liquidity RatiosYear20142013201220112010

Current Assets674,254646,175564,292623,004527,802

Current Liabilities289602282082220110296343243884

Current Ratio2.3282092.2907352.5636822.1023072.164152

Table 1Year20142013201220112010

Current Assets674,254646,175564,292623,004527,802

Inventories363,510265,319249,235217,979209,952


Quick Ratio1.0730041.3501611.4313621.3667441.303284

Table 2

Figure 1

Figure 2

Figure 3

Asset Management/Efficiency RatiosYear20142013201220112010

Credit Sales17379951608216154086914982411829255

Average Trade Receivables242869.5217819.5248412249195.5266887

Debtor Turnover7.1560867.3832516.2028776.0123126.854043

Table 3

Year20142013201220112010

Day in Years365365365365365

Debtor Turnover7.1560867.3832516.2028776.0123126.854043

Days Sales Outstanding5149596153

Table 4

Year20142013201220112010

Cost of Sales+/- Change in stocks344637800212776243695998768002

Average creditors233026205612198171203861.5280101.5

Creditor Turnover4.0537843.8918553.9170363.4140732.74187

Table 5

Year20142013201220112010

Days in year365365365365365

Creditor Turnover4.0537843.8918553.9170363.4140732.74187

Payment Period (days)/Payable days909493107133

Table 6

Year20142013201320112010

Cost of Sales846446784128744987687971895062

Average Stock314414.5257277233607213965.5273482

Stock\Inventory Turnover2.6921343.0477973.1890613.2153363.272837

Table 7Year20142013201220112010

Days in Year365365365365365

Stock\Inventory2.69213413.0477967333.1890611153.2153361173.272836969

Days Stock on Hand\Inventory Days135.58119.76114.45113.52111.52

Table 8

Figure 4

Profitability RatiosYear20142013201220112010

Profit after Tax (Net Income)5490642240333176780674099

Sales17379951608216154086914982411829255

Net Profit Ratio\Profit Margin3.162.632.164.534.05

Table 9

Figure 5

Figure 6

Gross Profit MarginYear20142013201220112010

Gross Profit891549824088795882810270934193

Sales17379951608216154086914982411829255

Gross Profit Margin51.3051.2451.6554.0851.07

Table 10

Figure 7

Figure 8Year20142013201220112010

Profit before Interest and Tax808445650550976101132101268

Total Assets884237895654816724874786807173


Return on Capital Employed (ROCE)13.609.218.5417.4817.98

Table 11

Figure 9 Figure 10

Return on Shareholders Fund (ROSF)Year20142013201220112010

Profit after Tax (Net Income)5490642240333176780674099

Total Shareholders' Equity428731486996481225464532458036

Return on Shareholder's Funds (ROSF)12.818.676.9214.6016.18

Table 12

Figure11

Cash Flow Adequacy RatiosYear20142013201220112010

Net cash Flow from Operating Activities(64,860)1075341998388944133311

Profit After Tax (Net Income)5490642240333176780674099

Cash Flow Yield-1.1812922.5457859850.5997838941.3117423241.799093105

Table 13

Figure 12

Year20142013201220112010

Net cash Flow from Operating Activities(64,860)107,534 19,983 88,944 133,311

Net sales17379951608216154086914982411829255

Cash Flow to Sales-0.0373190.0668653960.0129686560.0593656160.07287721

Table 14

Figure13Year20142013201220112010

Net cash Flow from Operating Activities-648601075341998388944133311

Average Total Assets889945.5856189845755840979.5893752.5

Cash Flow to Assets-0.0728810.1255961010.023627410.1057623880.149158744

Table 15

Figure 14

Year20142013201220112010

Net cash Flow from Operating Activities-648601075341998388944133311

Dividends2700627297283955770119238

Net Capital Expenditure29522144462167273335584

Free Cash Flow-12138865791-3008423910108489

Table 16

Figure 15

Market StrengthYear20142013201220112010

Profit after Tax - Preference Dividends5490600042240000333170006780600074099000

Number of Ordinary Shares Outstanding214322393214322393214322393214322393214322393

Earnings Per Share0.260.200.160.320.35

Table 17

Figure 16

Figure 17

Year20142013201220112010

Market price per share1.61.8332.68

Earnings per share0.260.20.160.320.35

Price Earnings (PE) Ratio6.259.1319.309.487.75

Table 18

Figure 18

Year20142013201220112010

Dividend Per Share0.130.130.120.290.1

Market Price Per Share1.61.8332.68

Dividend Yield0.080.070.040.100.04

Table 19

Figure 19Year20142013201220112010

Profit after tax - Preference Dividends5490642240333176780674099

Ordinary Dividend2786227862257196151020361

Dividend Cover1.971.521.301.103.64

Table 20

Figure 20

Figure 21

Figure 22

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