Conclusion & Recommendation

Although, Apex Spinning and Knitting Mills Limited's financial status is neither
good nor poor, some of our evaluation shows unsatisfactory results. Their total asset
was normal between June 2013 and June 2017 but only some part of its assets are
financed by its equity. The company’s sales revenue and net income is also good
during the period.
Ratio analysis of Apex Spinning and Knitting Mills Limited shows that the company
is not doing well in terms of its liquidity and all other indicators are sometime
satisfactory and sometime poor. Efficiency of converting assets into sales is
unsatisfactory which directly impacts its profitability which is also on the decline.
The company is not lagging behind the industry in terms of managing its debts. As
the company is financed by debt but not much. The stock market ratios show that
the earning per share and market to book value per share is good which make their
share more attractive in market.
Risk and return analysis of Apex Spinning and Knitting Mills Limited show that its
required rate of return is lower than its expected rate of return. As a result, investors,
who are risk lovers, are willing to purchase their common stocks despite relatively
high level of company specific risk associated with Apex Spinning and Knitting
Mills Limited.
Apex Spinning and Knitting Mills Limited's capital structure contains bank loan and
on average, it costs them ৳4.00 for every ৳100 in capital. Non Constant and Price
earnings multiple approach show that stock are overvalued in market and results
from corporation valuation model shows that their common stocks are undervalued
in the market.
Apex Spinning and Knitting Mills Limited's management should try to make its
operations more efficient and improve their overall profitability and try to reduce
their interest expense and other administrative overhead which is very high when
compared to the industry. This will help them to value their stock price properly
which will reflect the true value.