Portfolio Final Report

Top-Down Analysis of Investment Decision

Introduction 1. Objective of the study Advocates of the top-down analysis believe that economy, market and the industry effect have a significant impact on the total returns from individual stocks. Here we have conducted a top-down analysis of Zeal BangIa Sugar Mills Ltd. and Shyampur Sugar Mills Ltd. for taking decision regarding investment on the stocks of these companies. 2. Methodology of the study For making top-down analysis we have used secondary data for the analysis. We have collected the financial statements from both the companies. Moreover we have followed an as-is process of analysis of the top-down approach. That is a three-step approach has been followed in the analysis. The remaining part of the report has been produced in seven chapters. Chapter 2, 3, 4 and 5 describes the basic three step of the top-down analysis. Chapter six demonstrates the findings of our study followed by the suggestions in chapter seven. The last chapter at the end of the report we have given our decision whether an investor should invest in these companies in the current state of the economy we have assumed.

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Top-Down Analysis of Investment Decision

Analysis of the Economy 1. Variables Studied: For following top down approach we initially consider the aggregate economy and market and then we put our attention on industry and finally analyze our concerned firm & their stock. Variables considered in the study of the economy are:  GDP  Inflation  Monetary policy  Fiscal policy  Interest rate 2. Outcome of the study:  Gross domestic product (GDP): GDP is an indicator of the economic activities of a nation. A country is likely to increase its GDP growth rate as it reflects a positive economic progress of the country. In the last year, the GDP growth rate of Bangladesh was around 6.7%. And this year it is expected to 6.8% or it can be 7%. But ADB has said that for political complicacy, the current GDP would fall to around 6.5%. So we expect that the expected GDP for 2007 would be around 6.8% which is not much deviated from last years GDP. So it will not create significant impact on our valuation process.  Inflation: If inflation rate is expected to increase or decrease it will have an impact on both the rate of return and the stock price. For an increase in the expected rate of inflation real rate of return of an investor also increases and vice versa. Again it has a positive impact on stock market as purchasing power of people increase and they might invest in stock market. Indicators

FY01

FY02

FY03

FY04

FY05

FY06

CPI inflation

1.9

2.8

4.4

5.8

6.5

7.2

Source: Bangladesh Bureau of statistics

From the above table we see that inflation is expected to grow in the next financial year 2007. As a result of these expectation investors expected rate of return from investment in stock market will also increase. Again we can think that for an inflation rate that is expected to increase, income as well as purchasing power of people will increase. But as demand of sugar will not increase with the increase of income people will use their money either to

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Top-Down Analysis of Investment Decision invest or to consume other products. So investment may increase in stock market for an increase in inflation but not necessarily in sugar industry.  Monetary policy: Bangladesh Bank continued to pursue a cautious restrained monetary policy with the broader objective of maintaining price stability while supporting the highest sustainable real output growth in FY06. As a result there will be less loan able fund for the business firm and they have to incur higher interest rate which will increase their financial expenses and decrease profitability.  Fiscal policy: Government prepare budget for a fiscal year which has revenue and expenditure. It collects revenue through imposing tax to finance its expenditure. Tax rate of agricultural industry is 30% according to income tax Ordinance 1984. Sugar industry belongs to this industry. Currently, import of raw sugar is duty free. As a result, firms which import raw sugar from abroad have a lower cost of production as opposed to the domestic producers of sugar that have to incur higher cost of production for VAT. Thus sugar industry has been divided into two sectors making it a competitive industry.  Interest rate: There is no direct relationship between interest rate and stock market. Sugar companies have to take loan as the same rate like the other borrowers of the economy. So this industry cannot influence significantly with the changes in interest rate.

3

Top-Down Analysis of Investment Decision

Industry Analysis 1. Industry Background: Sugar Industry from time immemorial places in and around Bangladesh have been growing sugarcane for making gud or sukker or khandeswari. Such sweeteners are also produced from date and palm juice. Bengal was well known for quality sugar in the 16th century. The East India Company exported large quantities of sugar from Bengal every year. The volume was 820,186 maunds (1 maund = 37.65 kg) in 1795 and 3,324,168 maunds in 1805. Production of beet sugar caused decline in production of cane sugar towards 1840. Later, the sugar industry suffered seriously due to diversion of land to jute. Sugar industry plays an important role in the economy of Bangladesh by way of farming and creation of employment. The industry is under the Bangladesh Sugar and Food Industries Corporation. By-products of sugar mills have many uses. Molasses and bagasse are inputs for other industries. Around 425,000 acres of land are under sugarcane and the annual production is about 7.5 million tons, of which only 2.28 million tons are used in sugar mills and the rest goes to molasses making. Bangladesh now produces about 150,000 tons of sugar, 100,000 tons of molasses and 800,000 tons of bagasse per year. The country, however, ranks the lowest in the world in per acre yield of sugarcane - only 15 tons, while the comparative figures for Cuba, Indonesia, Australia and Hawaii are 36, 45, 55 and 70 tons respectively. Recovery of sugar from cane is also the poorest in Bangladesh - only 7.4% compared to 9% in Indonesia, 12.3% in Cuba, 12.4% in Hawaii and 15.6% in Australia. In the 1980s, the industry employed 15% of the labor force and had 30% of the fixed assets of the food industry as a whole. With 1.5% of world production, Bangladesh ranked 67th among the 130 sugar producing nations. In 2000, the country had 15 sugar mills at Panchagarh, Thakurgaon, Setabganj, Rangpur, Shyampur, Rajshahi, Mahimaganj, Jaipurhat, Darshana, Kushtia, Mobarakganj, Jamalpur, Kaliachapra, Narsingdi, and Pabna. The estimated total annual production capacity of these mills was about 215,000 tons but the mills did not work in full capacity and, therefore, the production remained far less than the country's total estimated annual demand of about 400,000 tons. A major reason for the mills to work below full capacity is the shortage of cane as farmers often find it more rewarding to use land for production of rabi and kharif crops.

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Top-Down Analysis of Investment Decision

2. Analysis of the Industry: Industry analysis is the second step followed in top down approach of stock valuation. Investment practitioners perform industry analysis most seriously while valuing any stock of a company. The reason behind is that it helps the investors isolate investment opportunities that have favorable return risk characteristics. Industry analysis, in other way we can say helps an investor choose the best company belonging in a lucrative industry that may affect positively while the economy runs well but may affect slightly while the economy is in recession. i. The business cycle and the industry sectors: Most of the industries more or less are affected by economic or business cycle. Sometimes in the pick season demand of product of that industry increases while in the recession it decreases. But sugar industry is not so much affected by business cycle. Demand of sugar remains almost same through out the year though supply of sugar may decreases in the recession period. ii. Structural economic changes and alternative industries: Demographics, changes in technology, life styles, and political and regulatory environments are likely to affect the cash flow and risk prospects of different industries. Our sugar industry may affect by all these variables in the following ways: •

Demographic changes are not likely to affect demand and supply of sugar so much.

•

Lifestyle also do not play much role to affect sugar industry

•

Technological change can take a big role in this industry because technology has brought success for many of the companies in the world. But most of the companies in our sugar industry still do not take the advantage of technological change. They use old machineries for decades and for this reason their production level can not cope pace with the huge demand of sugar. As for example, our total demand of sugar is 4 lak M.T annually but for inadequate production level and lack of technological advantage supply of sugar is only 2 lak MT per year.

5

Top-Down Analysis of Investment Decision •

Our sugar industry is highly affected by political change and regulations imposed by government. Fifteen of companies in this industry are regulated by government and other two of the companies are governed by private owners. For political change, bureaucracy and different regulations these fifteen government regulated companies cannot compete with the privately owned companies. For example, if government decides to sell sugar at Tk. 32 per kilo then the competitors determine the price lower than 32 immediately which government regulated companies cannot do within a short time.

iii. Evaluating an industry’s life cycle: Industry life cycle can affect an investor’s decision to which industry they will invest. Most investors are likely to invest in industries with rapid accelerating growth. The sugar industry belongs to food industry also and this industry is always in growth stage. As import of sugar and raw sugar from other countries sugar industry for local production reaches to a maturity or stabilization iv. Analysis of the competitive environment in an industry: For analyzing the competitive environment of our sugar industry we will use porters five forces analysis. And these analyses are:

•

Rivalry or competition among the existing companies:

In the sugar industry at present seventeen companies is in operation. Among them fifteen of the companies are government owned and two of the companies are privately owned. Though there are few companies competing in this industry, recently competitions are available between the two differently owned sectors. Here price rivalry occurs between the two because sugar is not a differentiated product. Again as the growth rate is slow recently competition for market share increases. Privately owned companies are cutting prices to increase market share and thus cover excessive fixed cost. Exit barrier is high for public companies as social cost is high to close it for worse performance. For labor agreement and huge employment opportunity it is tough to exit though there is below average or negative rates of return.

The current market players of this industry are listed in the following:

6

Top-Down Analysis of Investment Decision SI. No.

Name of the Enterprises

7

Location/Address

Top-Down Analysis of Investment Decision 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16.

Panchagarh Sugar Mills Ltd. Setabganj Sugar Mills Ltd. Thakurgaon Sugar Mills Ltd. Shyampur Sugar Mills Ltd. Jaipurhat Sugar Mills Ltd. Natore Sugar Mills Ltd. North Bengal Sugar Mills Ltd. Rajshahi Sugar Mills Ltd. Kushtia Sugar Mills Ltd. Mobarakganj Sugar Mills Ltd. Carew & Co(BD) Ltd. Faridpur Sugar Mills Ltd. Pabna Sugar Mills Ltd. Zeal BangIa Sugar Mills Ltd. Carew's Distillery Renwick, Jagneswar & Co.

Panchagar Setabganj, Dinajpur Thakurgaon Shyampur, Rangpur Jaipurhat Natore Gopalpur, Natore Harian, Rajshahi Jagati, Kushtia Naldanga,Jhenaidah Darsana, Chuadanga Madhukhali, Faridpur Dashuria, Pabna Dewanganj, Jamalpur Darshana, Chuadanga Kushtia

Yearly projected and actual level of production of sugar has been shown with the following figure: Yearly Projected and Actual Production 3

2 1.5 1 0.5

3

4

5

20 03 -0

20 04 -0

0 19 99 -0

20 02 -0

9 19 98 -9

2

8 19 97 -9

20 01 -0

7 19 96 -9

20 00 -01

6

0 19 95 -9

Lac Metric Ton

2.5

Tim e Projected Production

8

Actual Production

Top-Down Analysis of Investment Decision

Millwise Actual and Projected Production 25

Thousand M. Ton

20

15

10

5

Pa nc ha ga rh Su Th ga ak ur rM ga i lls on Ltd Su Se . ga ta rM bg i ll s an jS Lt d ug Sh . ar ya Mi mp ll s ur L Su td. Ja ga ipu rM rh i l ls at Ltd Su . ga Ra rM j sh il ls ah iS Ltd ug . ar Na M tor ill s eS No L td ug rth . ar Be Mi ng l ls al L Su td. ga rM Pa bn il ls aS Ltd ug . ar Ku M sh ill s tia L Su td. ga rM Ca i ll s re w Ltd Mo &C ba . o( rak B D) ga nj Ltd Su . ga Fa rM r id pu i ll s rS Ltd Ze ug al . ar Ba Mi ng l ls Ia Ltd Su . ga rM il ls Ltd .

0

Com pany Nam e

Projected Production

Actual Production

The above figure shows the level of actual and projected sugar production in the country by the fourteen sugar mills in the year 2004-05.

•

Threat of new entrants:

Although the sugar industry has few competitors, publicly owned companies are in a treating position imposed by privately owned companies. Here demand is much higher than aggregate supply and so new firms are recently capturing market share to through out publicly owned companies from market. New firms are importing raw sugar and selling them by only refining that sugar. For this reason, their cost of production is lower than public firms as they produce sugarcane and sugar themselves.

•

Threat of substitute products:

As there is no strong substitute product for sugar, industry competition is not so much as it should be.

9

Top-Down Analysis of Investment Decision

•

Bargaining power of buyers:

Bargaining power of the customers does not exist as supply of sugar can not meet the growing need and demand of sugar.

•

Bargaining power of suppliers:

Bargaining power of suppliers that is sugarcane producers is nil. As they have to sell sugar cane to the government authority and for production purpose they have to take loans from government as well. Again, there is another supplier who supplies raw sugar at a rate much lower than local production cost. These foreign suppliers of raw sugar have high bargaining power. v. Overall judgment on industry attractiveness: From the above analysis regarding our sugar industry, we come to know the following findings •

Business cycle does not affect much on Sugar industry.

•

Change of Life style has almost no effect on Sugar industry.

•

Technological change has a significant effect on this industry.

•

Political change has significant effect on it.

•

Industry life cycle will have little possibility to be matured as it belongs to food industry.

•

Competition or rivalry is not much, threat of new entrants is high, bargaining power of the buyer and seller is low and threat of substitute products is very low.

So we can comment that this is an attractive industry which has a huge potentiality to earn sufficient profit for a firm and sufficient rate of return for investors.

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Top-Down Analysis of Investment Decision

Two Company Analyses Company analyses are the last step of stock valuation under top down approach. An industry possesses various companies and each company is unique in their management efficiency, capital structure, resource availability, environmental facility etc in spite of their being in the same industry. That’s why it can not be said that if an industry is attractive all of its companies are also good. Giving importance to this matter, company analysis is an important step to consider while making stock valuation to invest in a specific company. Company analysis demonstrates how to complete the fundamental analysis process by analyzing a company and deciding whether investors should buy its stock. This requires a separate analysis of a company and its stock. It conveys the idea that the common stocks of both companies are not necessarily good investments. 1. Company Background: For the purpose of our analysis we have conducted our study on Shyampur Sugar Mills Ltd. and Zeal BangIa Sugar Mills Ltd. The basic information of both of these companies has been shown in the following tables:

Name of the sugar mill Year of establishment

Zeal Bangla Sugar mills limited, Dewanganj, Jamalpur 1958 under the joint co operation of Pakistan and New

Supplier of Plant & Machineries: Authorized capital Annual production capacity Current value of the plant Human resource Total land area of the mill Total farmable land for growing

Zealand. Buck wolf, West Germany 1.86 crore taka. 10160 Metric Ton (M.T) 17.54 crore taka. Permanent-480, Seasonal-196, Contractual-308, Total-984. 151 acre. 25,000 acre.

sugarcane Number of sugarcane growers Number of sugarcane buying

16,000 27

centre Total amount of loan supplied to

3 crore taka.

the growers Name of the sugar mill Year of establishment Supplier of machineries Daily capacity of sugar grinding Annual capacity of sugar

Shyampur Sugar Mills Limited, Rangpur 1964 Mitsubishi, Japan 1016 M.T 10161 M.T 11

Top-Down Analysis of Investment Decision production Total amount invested Total area of land Number of sugarcane sub zone Number of sugarcane selling

119.75 Lac Taka. 99 acre. 5 38

centre 2. SOWT analysis

Strengths

Syampur Sugar 1. Nationally

Zeal Bangla Sugar produced 1.Nationally produced sugar

sugar 2.

2.

Can

get

supply

Can

get

supply

of

of sugarcane with their own

sugarcane with their own supervision and control supervision and control

3. Government regulated

3. Government regulated Weakness

1. Cannot respond with the 1. Cannot respond with the market change immediately

market change immediately

2. Bureaucratic problem

2. Bureaucratic problem

3. Machineries are old and 3. Machineries are old and machine breakdowns occur machine breakdowns occur frequently targeted

for

which frequently

for

which

production

level targeted

production

level

cannot be achieved 4.

Top

cannot be achieved

management

inefficient and corrupted

is 4.

Top

management

is

inefficient and corrupted

5. Corruption and nepotism 5. Corruption and nepotism exist almost all phases of exist almost all phases of the management 6.

51%

is

the management

government 6.

51%

is

government

ownership and the residual ownership and the residual is privately owned. That’s is privately owned. That’s why there is problem of why there is problem of decision

making.

Taking decision

making.

Taking

more time and incurring more time and incurring more cost.

more cost.

7. Cannot import raw sugar 7. Cannot import raw sugar from

abroad.

12

Cost

of from

abroad.

Cost

of

Top-Down Analysis of Investment Decision production domestic

increases

for production

increases

for

production

of domestic

production

of

sugarcane which negates sugarcane which negates profit.

profit.

8. If private competitors 8. If private competitors determine to sell sugar at a determine to sell sugar at a lower rate then the firm has lower rate then the firm has to

respond

with

these to

changes of price. Opportunities

1.

Can

respond

with

these

changes of price.

use

local 1.

Can

use

local

environment for increasing environment for increasing production. 2.

production.

Number of competitors 2.

is low.

Number of competitors

is low.

3. Supply of raw materials 3. Supply of raw materials is not subject to indirect tax. Threats

is not subject to indirect tax.

1. Competitors can import 1. Competitors can import raw sugar without duty for raw sugar without duty for which

their

cost

of which

their

cost

of

production is lower which production is lower which increases their profit. 2.

Competitors

increases their profit.

can

sell 2.

Competitors

can

sell

sugar at a lower rate which sugar at a lower rate which increases

their

market increases

share.

their

market

share.

3. As it is regulated by 3. As it is regulated by government, environment

political government, change

can environment

affect the firm adversely.

political change

can

affect the firm adversely.

4. Bad weather and labor 4. Bad weather and labor unrest

may

affect unrest

production level adversely.

may

affect

production level adversely.

5. Grower sometimes sell 5. Grower sometimes sell sugarcane

to

competitors.

private sugarcane competitors.

13

to

private

Top-Down Analysis of Investment Decision 6. Sugarcane production is 6. Sugarcane production is seasonal for which supply seasonal for which supply may not match demand. 7.

Growers

may

may not match demand. be 7.

Growers

may

be

interested to produce other interested to produce other goods

rather

sugarcane.

then goods

rather

then

sugarcane.

3. Competitive strategy analysis After an investor have determined the competitive structure of an industry he should attempt to identify the specific competitive strategy employed by each firm and evaluate these strategies in terms of the overall competitive structure of the industry. A firm’s competitive strategy can either be defensive or offensive. If it takes defensive strategy then it will try to position itself in such a way as its capabilities provide the best means to deflect the effect of the competitive forces in the industry. An offensive competitive strategy is one in which the firm attempts to use its strengths to affect the competitive forces in the industry. Again porter suggests two major strategies: •

Low cost leader ship strategy

•

Differentiation strategy

In fact, Shyampur and Zeal Bangla Sugar mills Ltd. do not follow any competitive strategy. Neither they have any strategy to lower the production cost and thus increasing their profit nor do they have any differentiation strategy to attract customers and thus increase sales price or sales volume. In fact, there is little scope for these firms to differentiate their products. Of course, both of the firms and even all of the fifteen firms run by government regulation are little bit defensive against competitive forces in the industry specifically against private firms.

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Top-Down Analysis of Investment Decision The consequence of not having any strong competitive strategy is very furious for both the firm. Shyampur Sugar mills have incurred loss for the last eleven consecutive years. On the other hand, Zeal Bangla Sugar mills are carrying losses forward for the last fifteen consecutive years.

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Top-Down Analysis of Investment Decision

Stock Analysis For choosing the right stock we follow discounted cash flow method. Under discounted cash follow method we have done Operating cash flow method and free cash flow method. We have not done dividend discount method because due to net loss they did not declared dividend. Details financial statements of both the companies for valuation have been shown in the appendix. 1. Assumptions: For valuation of stock we have the following assumptions: 1. The terminal growth rate of the industry is 1.0. 2. We have conducted financial analysis by using information from the financial statement from July 01, 2001-June 30, 2006. 3. 10 years Treasury bill interest rate is considered as risk free rate and used the same in calculating the beta. 4. Monthly DSE average change is converted into market return by multiplying it with 12. 5. Corporate tax rate is applicable for the companies are 30% as they belong in agriculture industry. 6. Cost of equity has been calculated by using CAPM. 7. For beta calculation 60 months observations of changes of stock price and DSE index is taken. 8. Cost of debt is calculated by adding 2% risk premium with the risk free rate. 9. Equity value is calculated multiplying the number of share outstanding with the share price that exists in the market at December31, 2005. 10. Sales growth is determined by the geometric mean of the historical growth rate. 11. Cost of goods sold is the average of the historical figure. 12. Administrative overhead and selling & distributive overhead is calculated by the average of historical figure and it is assumed to remain same for the expected years. 13. Depreciation expenses for the forecasted years are bases on historical average rate of depreciation.

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Top-Down Analysis of Investment Decision 2. Valuation: Using all the above assumptions we have calculated the fundamental or intrinsic value of equity which is Tk. (826.95) against market value of Tk. 17.10 (as on March 09, 2007) which means that the stock price of Zeal Bangla Sugar Mills Limited is overvalued. That means in future the stock price is expected to decline. So we should not purchase the stock of Zeal Bangla Sugar Mills Limited. On the other hand the intrinsic value of Shyampur Sugar Mills Limited stock is Tk. (408.97) against market value of Tk. 12.70 (as on March 09, 2007) which means that the stock price of Shyampur Sugar Mills Limited is also overvalued. That means in future the stock price is expected to decline. So we should not purchase the stock of Shyampur Sugar Mills Limited.

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Top-Down Analysis of Investment Decision

Findings According to the industry analysis, we find that sugar industry is one of the industries which have huge potentiality for making investment. The annual demand of sugar of our country is 12 lac metric tons (M.T) out of which only 1.9544 lac M.T is produced by our local companies. So there is a large gap between demand and supply which is met up by import. So, local companies have the opportunity to increase their market share. The economic life of the machineries of most of the local companies is already expired. Their efficiency and productivity become low and maintenance cost become high and machine break down occurs frequently for which targeted production level may not be achieved. So the cost of production of local produced sugar becomes higher and they face competitive disadvantage with respect to imported sugar. Using the technological facilities, firms can produce as much product as it can meet the growing demand of sugar. Only then there is no need for importing sugar or raw sugar. But it is a matter of fact that most of the firms belong to this industry under public regulation have been incurring loss for the several consecutive years. On the other hand private firms are progressing at a rapid speed beating public firms. The government is not likely to shut down the loss incurring firms only for avoiding social costs because there are more than 10 lac people are directly and indirectly dependent with this industry. The reasons behind the failure of these firms even in such a lucrative industry can be some of the following reasons: •

Government change and political issues.

•

Bureaucratic problems in decision making regarding any major strategy changes.

•

Corruption and nepotism in the recruitment of employees.

•

Inefficiencies in the management level.

•

Use of Old machineries.

•

The growers of sugarcane who supply the major inputs of sugar industry do not get their

required fertilizer and insecticides on time which is the government

responsibility to supply. •

Sometimes growers do not get their required selling price which covers their cost of production. So they incur loss and shifted their attention to other agricultural cultivation from sugarcane cultivation. For that reason, local industries production often hampered due to shortage of input supply.

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Top-Down Analysis of Investment Decision

Suggestions Though there is ample opportunity to flourish this industry, it has not come out from the bad patch yet. The changes that might attract the investors to invest in this industry are as follows: •

If the companies incorporate the technological advancement in their operation, it will reduce their cost of production and thus increase profit for investor.

•

Effective management should be ensured.

•

The firm should be freed from corruption and nepotism.

•

Decision making process should be within reasonable time.

•

Formal hierarchical management should be replaced by participative management.

•

Proper supply of Fertilizer and other required materials necessary for producing sugarcane by the growers should be ensured.

•

The growers should be paid reasonably so that they might not turn out from producing sugarcane to other production.

•

Effective monitoring of sugarcane production and removal of any discrepancies in the production of both sugar and sugarcane.

•

Quality and credibility of public information should be ensured based on which investors will make investment decision.

•

Activities of trade union should be controlled according to Labor Law.

•

Any contractual agreement which is made violating the rules and regulations should be void.

•

Any fraudulent activities in measuring the weight, corruption in the selection of efficient growers, negligence in giving services to the growers, extravagancy of the government fund and corruption in the trade of product in the factory all these should be handled strictly and even by ensuring notable punishment for the miscreants.

•

Any fraudulent activities in measuring the weight, corruption in the selection of efficient growers, negligence in giving services to the growers, extravagancy of the government fund and corruption in the trade of product in the factory all these should be handled strictly and even by ensuring notable punishment for the miscreants.

19

Top-Down Analysis of Investment Decision

The Decision All we have done so far, the purpose is only whether it would be justified and profitable to invest in Shyampur Sugar Mills and Zeal Bangla Sugar Mills. In line of making the decision, we have analyzed the current economic condition that might make our sugar industry lucrative, the sugar industry’s attractiveness and finally the specific two companies along with their stock valuation. This top down approach finally gives us the solution of our decision of whether to invest in sugar industry or more specifically in Zeal Bangla Sugar Mills and Shyampur Sugar Mills. Our decision is that we should not invest in these two companies as their stock prices are significantly overvalued. If and only if the two companies take sufficient measures to improve their performance we will make further consideration about whether to invest in any of the two companies.

20

Top-Down Analysis of Investment Decision

Bibliography 1. Investment decision & Portfolio management (6th edition) By: Reilly & Brown 2. Annual report of Zeal Bangla Sugar Mills Ltd. & Shyampur Sugar Mills Ltd. (200102 to 2005-06) 3. Annual performance report published by Bangladesh Sugar & Food Industries Company (BSFIC) 4. WWW.Bangladesh-bank.org

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