Primetex (BD) Limited Income statement December 31, 2018 BDT. (Million) 1,850 1,050 800 70 120 40 100 330 470 80 390 120 270 10 270 Sales Revenue Less: COGS Gross Profit Less: Operating expenses Selling expenses General and administrative expenses Lease expenses Depreciation expense Total operating expense EBIT Less: Interest expense Less: Tax rate (40%) Net profit after Tax Less: Preferred stock dividend Earnings available for common stockholders Total dividend paid 130 million BALANCE SHEET BDT) Fixed Assets: Plant and Equipment Land and building Furniture and vehicles Investment - Long Term Less: Accumulated Depreciation Net Fixed assets Current Assets: Cash Inventories Account Receivable Advances, Deposits and Prepayments Investment in Marketable Securities December 17 December 18(Million 1450 820 350 50 1300 1370 1570 870 380 30 1400 1450 300 600 500 40 250 450 750 470 50 350 1690 3060 2070 3520 100 1000 400 100 100 1000 500 120 Total current assets TOTAL ASSETS SHAREHOLDERS' EQUITY AND LIABILITIES: Shareholders' Equity: Preferred stock Common stock: Tk. 10 par 100,000 shares Share Premium Retained Earnings Long-term Liabilities: Long Term Loans Current Liabilities: Short Term Bank Loans Accounts payable Notes Payable Accruals TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES (BDT.) 600 700 200 300 210 150 3060 275 450 190 185 3 520 Question: 1 (4+3.5+2.5) a. Calculate and interpret the following ratio for 2018: Quick ratio, Avg, payment period, TIE ratio, ROI. DSO, OPM, NPM, ROE, EPS, DPS (any Eight), b. Illustrate how funds are channel in Bangladesh financial markets and institutions with examples considering direct and indirect transfer. c. Akij Power Limited has posted EBT for the year ended 2019, was 70,7500500 (BDT), and already this company has paid BDT 20,30100 in advance for tax to NBR. Moreover. Akij Power has earned BDT 625,000 as dividend income holding 20.5% of ACI stock and BDT 470,000 interest from BRAC bond. The corporate tax rate is 38%. Calculate the total tax obligation for this company for the year ended 2019 and adjusting prepayment how much Akij Power needs to pay the NBR. Question: 2 (4+3+3) a. Explain major functions of finance with examples and identify challenges for finance managers to realize these functions and justify how corporate charter and bylaws mitigate conflicts among shareholders? b. Explain the major objectives and limitations of fundamental analysis and differentiate between spot versus future market with example. c. To supplement your planned retirement in exactly 37 years from today and your are in service from last 8 years. You estimate that you need to accumulate $220,000 by the end of 37 years from today. You plan to make equal, annual, end-of-year deposits into an account paying 8.5% annual interest. I. How large must the annual deposits be to create the $220,000 fund by the end of 37 years? II. If you can afford to deposit only $1250 per year into the account, how much will you have accumulated by the end of thirty seven years? Question: 3 (2+4+4) a. The UCBL offers 8.25% interest, compounded semiannually on term borrowing. The IBBL Offers 8.10% interest, compounded quarterly. Based on effective interest rate, in which bank would you prefer to borrow fund and justify your findings. b. Differentiate between APR (annual percentage rate) and effective annual rate (EAR) with examples. Differentiate between mixed stream and perpetuity cash flows with example. c. Ishraf got his driving license one week back, and he wants to buy a new car for 12,50000Tk. He has lump sum amount of 375000Tk. today to invest. Ishraf is a risk averse investor and he has following investment options after approaching different banks. i. BRAC Bank offers 12 years term deposit compounded semi-annually. ii. MTB Bank offer 10 years term deposit compounded quarterly, iii. Padma Bank offers 9 years term deposit compounded monthly. Calculate rate of return for Ishraf to accumulate enough money to buy a car in each of the three cases? Justify his decision
