KHT Fall 201

Gemini Sea Foods Limited & Fine Foods Limited
Term Project
On
“Gemini Sea Foods Limited

&
Fine Foods Limited”
Course: FIN 254, Section# 11, Fall 2019
Submitted To:
Mr. Kamrul Huda Talukdar
Senior Lecturer
Department of Accounting and Finance
Submitted By:
SL/ NAME ID
NO
1. SAKIB MD. SHAFIUDDIN 1320413030
2. MD. SOLAIMAN 1812181630
3. MD. MAHADI HASAN 1620624030
4. SARWAN AHMED 1821994030
5. ARMAN HASAN 1430256630
School of Business and Economics

North South University
Date of Submission: 17/12/2019
Page | i
Letter of Transmittal
December 17, 2019
Mr Kamrul Huda Talukdar
Senior Lecturer
School of Business and Economics
North South University
Subject: Submission of Term Project of FIN 254.
Dear Sir,
Firstly, I’d like to thank you to give us this opportunity to prove my learning outcome through
preparing this report on ‘Financial Statement Analysis’.
I have applied all the various theoretical knowledge that I gathered throughout the course to
this report. Furthermore, I have tried to interpret and produce a theoretically and numerically
accurate analysis of the Financial analysis of Gemini Sea Foods Limited & Fine Foods Limited.
I furthermore, would want to take this opportunity to thank you for your support and guidance
throughout the preparation of this report and that you have helped us to acquire all the
knowledge through this course to apply in the project report.
Yours Sincerely
SAKIB MD SHAFIUDDIN ID:1320413030

MD. SOLAIMAN ID: 1812181630
MD. MAHADI HASAN ID:1620624030
SARWAN AHMED ID:1821994030
ARMAN HASAN ID:1430256630
I hereby submit this report to you, looking forward to your acceptance.
Page | ii
Abstract
This report explains, interprets and compares mainly the financial position of Gemini Sea Foods
Limited & Fine Foods Limited. Emphasis has been provided on the performance evaluation of
Gemini Sea Foods Limited & Fine Foods Limited to justify which one is a better investment
opportunity for investors and is financially reliable for last five years of data analysis. The main
purpose is achieved through ratio analysis of 2014 to 2018 of these companies. Measurement of
financial performance by ratio analysis helps to identify organizational strengths and weakness
by detecting financial irregularities and focusing on issues of organizational importance. The
financial performances of these companies were measured in terms of Liquidity, Activity,
Profitability, Debt Management and Market value analysis to test the financial reliability. This
report can help an investor to identify the nature of the financial performance of Gemini Sea
Foods Limited & Fine Foods Limited in Food and Allied industry of Bangladesh and help to
make an investment decision.
Page | iii
Table of Contents
1. Overview of the companies: 1
1.1 Overview of Gemini Sea Foods Limited ……………….………….
………………………..1
1.2 Overview of Fine Foods Limited……...……………….……………………..
……………...1
2. Financial Analysis 2
2.1 Profitability Ratios…………………….…………………………………………………….…
2
2.1.1 Gross Profit Margin 2
2.1.2. Net Profit Margin………………………………….
……………………………….3
2.1.3 Operating Profit Margin … 4
2.1.4 Earnings Per Share (EPS) 5
2.1.5 Return on Assets (ROA) 6
2.1.6 Return on Equity (ROE) 7
2.2 Asset management/ Activity Ratios 8
2.2.1 Inventory Turnover 8
2.2.2 Average Age of Inventory 9
2.2.3 Average Collection Period 10
2.2.4 Total Asset Turnover 11
2.3 Liquidity Ratios 12
2.3.1 Current Ratio 12
2.3.2 Quick Ratio 13
2.4 Debt Management Ratios 14
2.4.1 Debt Ratio 14
2.5 Market Value Ratios 15
2.2.2 Price Earnings (P/E) Ratio 15
2.2.3 Market book ratio 16
2.2.4 Book value per share of Common stock 17
3. References: ……………………………………………………………………………………17
Page | iv
Page | v
1. Overview of the companies:
1.1 Overview of Gemini Sea Foods Limited:
Gemini Sea Foods Limited was established in the year 1982. Since its inception, it has produced
and supplied the highest quality seafood products to customers worldwide. Gemini Sea Foods
Limited people have believed in “Hygienic Product Healthy Trade” and made it a part of their
core values at work. Quality, Delivery Security, Social Responsibility and Respect to Nature are
the cornerstones of Gemini’s Business, which has made Gemini the most admired seafood
processing companies in Bangladesh. The plant is equipped with Cooking and Counter Cooling
system, IQF Spiral Freezer, Vibrating Glazer and IQF after Freezer/Hardener into the processing
line. Gemini has water treatment plants to supply clean water to the processing line. The total
investment in assets is BDT 510,516,381. The company has an outstanding share of 4,269,375
and paid 20% cash dividend in the year 2016.
1.2 Overview of Fine Foods Limited:
Fine Foods Limited started as a Public Limited Company (Agro-based) in 2002 aiming to
contribute to the local development through meeting the nutrition demand. It started its business
activity by a Fish project in the village Mondolvog of Manikkhali UP Chandpur under PS
Katiadi, District: Kishoregonj. Alongside its abundant production of common water fish and
fingerling in the said project, it gradually bloomed through production and marketing of fish
feed, greens, cow, milk and trees of different species. Fine Foods Limited now has launched
another fish project by purchasing lands in village Machera of Chandpur Union under PS
Tarakanda, District: Mymensing. The total investment in assets is BDT 154,064,647. The
company has an outstanding share of 13,566,911and paid 2% cash dividend in the year 2019.
Page | 1
2. Financial Analysis:
2.1 Profitability Ratios:
1.Gross Profit Margin

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2018
-10.00% 2017
2016
2015
-20.00% 2014
Gross profit ratio shows the percentage of the gross profit on sales made by the company. We
can notice that GEMINI SEA FOOD LIMITED’s gross profit margin was higher in 2014-2015
and growing consistently. But on the following year, FINE FOODS LIMITED’s gross profit
margin was rising at a glance but at 2018 it becomes similar to GEMINI SEA FOOD LIMITED.
Page | 2
2. Net Profi t Margin

40.00%
30.00%
20.00%
10.00%
0.00%
2018
-10.00% 2017
2016
2015
-20.00% 2014
-30.00%
Net profit margin shows the percentage of the net profit on sales made by the company. FINE
FOODS LIMITED was going in loss during 2014-2015. It started making a profit in 2016. On
the other hand, GEMINI SEA FOOD LIMITED was always profitable and net profit margin has
always been stable. Though FINE FOODS LIMITED was making a profit from 2016.
Page | 3
3. Operating Profit Margin

40.00% 33.63%
30.00%
20.90%
20.00%
10.00% 2.86%
1.12% 2.59% 2.60% 1.82% 1.21%
0.00%
2018 2017 2016 2015 2014
-10.00%
-7.20%
-20.00%
-30.00% -26.01%
Operating profit margin examines the relationship between sales and management-controlled
costs. Increasing the operating margin is generally seen as a good sign. in the graph, we can see
GEMINI SEA FOOD has always been profitable and it always had a positive and consistent
operating profit margin. But FINE FOOD had a negative operating profit margin in 2014-2015
and its operating margin being positive from 2016
Page | 4
4.Earnings Per Share (EPS)

25.00
20.00
15.00
10.00
5.00
0.00
2018
-5.00 2017
2016
2015
2014
Earnings Per Share (EPS) indicates the earnings of each common stockholders. GEMINI SEA
FOOD stockholders have always been getting a stable return, but fluctuating a bit. On the
contrary, FINE FOOD shareholder had not earned profit in 2015,2014. It started to earn profit
from 2016.
Page | 5
5.Return on Assets (ROA)

8.00%
6.00%
4.00%
2.00%
0.00%
-2.00% 2018
2017
2016
-4.00% 2015
2014
-6.00%
Return on asset indicates how efficiently a firm utilizes its assets. GEMINI SEA FOOD has
always been getting good returns on their assets and be constant. No negative values. But FINE
FOODS return on its assets has been negative as it was occurring losses in 2014 and 2015. But
after 2016 and 2017, it has been getting more return on its assets than GEMINI SEA FOOD. In
2018 GEMINI SEA FOOD’s return on asset again goes a little bit up than FINE FOODS.
Page | 6
6. Return on Common Equity (ROE)

400.00%
300.00%
200.00%
100.00%
0.00%
-100.00% GEMINI SEA FOOD LIMITED
FINE FOODS LIMITED
2018 2017 2016 2015 2014
Return on equity measures net income less preferred dividends against total stockholder’s equity.
In the graph, we can see both companies were unable to generate a return on its equity in 2014.
Though GEMINI SEA FOOD was able to generate a return on equity from 2015, FINE FOODS
started to generate from 2016.
Page | 7
7. Inventory Turnover
7.00
6.00 5.09 6.88
5.00 4.67
4.00 3.79 4.28 4.64
5.63
3.70
3.00 2.01
2.00 2.85
1.00
0.00
2018
2017
2016
2015
2014
The inventory turnover ratio of GEMINI SEA FOOD is better in 2014, they are selling their
inventory very fast in 2014, they don’t keep their inventory for too long and their asset
management is good as well. FINE FOODS keeps their inventory for a bit longer than GEMINI
SEA FOODS so, their Inventory turnover ratio is not that much good. On the following year, in
2015 FINE FOODS had a good inventory turnover than GEMINI SEA FOOD, in 2016 GEMINI
SEA FOOD had a good inventory turnover, in 2017 the scenario was opposite. But in 2018 FINE
FOODS is quite better than GEMINI SEA FOOD.
Page | 8
8. Average Age of Inventory

200.00 181.24
180.00
160.00
128.29
140.00
120.00 96.40 98.62
100.00 85.36
78.13 78.58
71.65
80.00 64.78
53.06
60.00
40.00
20.00
0.00
2018 2017 2016 2015 2014
Both company’s average age of inventory fluctuated. In 2014 and 2016 GEMINI SEA FOOD’s
average age of inventory was less than FINE FOOD’s average age of inventory. That means
GEMINI SEA FOOD are selling their inventory earlier than FINE FOODS. But in 2015, 2017
and 2018 the scenario was the opposite. FINE FOODS was keeping their inventory for a longer
period of time.
Page | 9
80.00 09. Average Collection Period 70.57

70.00
56.62
60.00 52.79
49.10
50.00
37.10
40.00 32.04 29.20
25.36
30.00
20.00 14.28 13.25
10.00
0.00
2018 2017 2016 2015 2014
Average collection period means how quickly and efficiently a company collects on its
outstanding bills. FINE FOODS average collection period is always more than GEMINI SEA FOOD.
That means the customer of FINE FOODS pays their bills more quickly compared than GEMINI
SEA FOOD’s customer.
Page | 10
10. Total A s s et Tur nover

4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2018 2017 2016 2015 2014
Total asset turnover ratio of GEMINI SEA FOOD is comparatively higher than FINE FOODS
which means, GEMINI SEA FOOD is managing their asset more effectively.
Page | 11
11. Current Rati o

14.00
11.19 12.46
12.00 12.61
10.00 9.76 12.19
8.00
6.00
4.00
1.02
2.00 1.02
0.98
0.00 0.91
2018 0.82
2017
2016
2015
2014
From the chart, we can see that the current ratio of Fine Foods Limited is higher than Gemini Sea
Food Limited for the last five years. Fine Food is able to pay its short term debt. On the other
hand, the Current Ratio of Gemini Sea Food Limited is not a standard range in 2014-2016. So,
it’s a bit difficult for them to pay short term debts. So, in terms of Current Ratio, Fine Foods is
carrying too much current inventory.
Page | 12
2.00 12. Quick Ratio

1.72
1.99
1.80 1.64
1.60
1.34
1.40
1.14
1.20
1.00
0.80 0.56
0.60
0.25 0.32
0.40 0.22
0.11
0.20
0.00
2018 2017 2016 2015 2014
The quick ratio of Gemini Sea Food Limited is less than the required ratio. The quick ratio of
Fine Foods Limited is better than Gemini Sea Food Limited in the last five years because the
inventory of Fine Foods Limited is less than Gemini Sea Food Limited. Fine Foods Limited
comparatively doing better.
Page | 13
13. Debt Ratio

120.00%
99.34% 102.20%
91.07% 94.44% 93.49%
100.00%
80.00%
60.00%
40.00%
20.00%
3.94% 4.30% 2.98% 2.43% 2.55%
0.00%
2018 2017 2016 2015 2014
The debt risk of Gemini Sea Food Limited was more in previous years but they are overcoming
gradually. On the other hand, the debt ratio of Fine Food Limited was comparatively less but
their risk of debt has a fluctuation on their percentage.
Page | 14
14. Price Earnings(P/E) Rati o

742.50
800.00
700.00
600.00
460.78
500.00
400.00
300.00
200.00 104.78
51.02
44.51 43.91 57.81
100.00 9.43
0.00
2018 2017 2016 2015 2014
-100.00 -35.35
-65.75
It indicates the perception of investors about the company. The people had a very bad perception
of Fine Foods Limited but it is now increasing. On the other hand, People had never a bad
perception of Gemini Sea Food Limited. It was always consistent but now it increasing horribly.
Page | 15
200.00 15. Market Book Ratio

177.65
150.00
100.00
42.63 42.40
50.00 22.34
3.19 3.00 0.73 1.00 1.69
0.00
2018 2017 2016 2015 2014
-50.00 -33.89
The perception of the market for Fine Foods Limited has a constant value and less than Gemini
Sea Food Limited but for Gemini Sea Food Limited they had both ups and downs.
Page | 16
16 . Book Value
Per share of common stock
30.00 26.03
25.00 21.45
20.00
15.00 10.91
10.67 11.05 10.61 9.79 9.94
10.00
5.00 2.24
0.00
2018 2017 2016 2015 2014
-5.00
-4.31
Book value per share indicates the per-share value of a company based on its equity available to
common shareholders. We can see that GEMINI SEAFOOD LIMITED had a growth in 2015-
2017 and a decrease in 2018 whether FINE FOODS LIMITED’s shareholder had a constant rate
with little fluctuation.
3. References:
1. http://www.geminiseafood.com/
2. https://lankabd.com/Company/Search?
searchText=GEMINISEA&cn=Gemini_Sea_Food_Limited_(GEMINISEA)
3. https://www.emis.com/php/company-profile/BD/
Gemini_Sea_Food_Limited_en_4168993.html
4. http://www.finefoodslimited.com/
5. https://www.dsebd.org/displayCompany.php?name=FINEFOODS
6. https://lankabd.com/Company/Search?
searchText=FINEFOODS&cn=Fine_Foods_Limited_(FINEFOODS)
Page | 17

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Gemini Sea Foods Limited & Fine Foods Limited

“Gemini Sea Foods Limited

Course: FIN 254, Section# 11, Fall 2019

School of Business and Economics

Date of Submission: 17/12/2019

SAKIB MD SHAFIUDDIN ID:1320413030

I hereby submit this report to you, looking forward to your acceptance.

1. Overview of the companies:

1.1 Overview of Gemini Sea Foods Limited:

1.2 Overview of Fine Foods Limited:

1.Gross Profit Margin

2. Net Profi t Margin

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED

3. Operating Profit Margin

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED

4.Earnings Per Share (EPS)

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED

5.Return on Assets (ROA)

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED

6. Return on Common Equity (ROE)

2018 2017 2016 2015 2014

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED

8. Average Age of Inventory

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED

80.00 09. Average Collection Period 70.57

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED

10. Total A s s et Tur nover

11. Current Rati o

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED

2.00 12. Quick Ratio

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED

13. Debt Ratio

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED

14. Price Earnings(P/E) Rati o

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED

200.00 15. Market Book Ratio

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED

GEMINI SEA FOOD LIMITED FINE FOODS LIMITED

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