NESREEN ELNAGGAREMD29

B-TECH PROFILE:

B-Tech was founded in 1997  B.TECH today operates 57 branches covering all the governorates of EgyptVision

 To be the number one provider of modern life needs. Mission

Satisfaction of our stakeholders above all elseBusiness/Product or Servicepurpose of the company is to trade and distribute all sort of electrical goods beside providing service and maintenance

B.TECH is currently evaluating several opportunities to enter key new markets in the MENA regionThe total market size was approximately 30%Competition

We compete directly with Bahgat Stores and alternatives to our products include the chineses retail suppliers

Our competitive advantage is that we are authorized retailers and distributors of the most famous and original home appliances in the world. Beside our wide national network of warehouses,showrooma,stores and dealers, and the after sale services and maintenance.

Risk/OpportunityThe greatest risks associated with our business today are the products imported from china We feel we can overcome these risks because of the flexible range of payment patterns Our biggest recognized opportunities include entering the telecommunication market in a corporation with Etisalate mobile networks.Potentioal acquisition by Electrolux

EXECUTIVE SUMMARY:The purpose of this analysis :is interpret the financial

statements of the preceding year compared to the previous year to spot the weakness points to correct and the

strength points to enhance and articulate .

Methodology: A review of the annual financial statements of the current year and the previous year and computing the standard financial ratios.

Findings critical defect in liquidity makes B-Tech incapable of meeting matured obligations, as well as a poor management of inventory and a threatening relay on debt.

Conclusions and recommendations: Selling some fixed assets can help the liquidity issues beside stopping any further acquisitions ,beside deploying a new policies and payment patterns to to keep installment purchases but with better and more strict collection conditions .

THE SWOT ANALYSIS

wide network of

warehouses,showrooma,st

ores and dealers ,

established brand name

and after sale services and maintenance The first non

European company to

Win the recognition

of excellence from EFQM

all year round.

Extensive promotions

Liquidity issue making B-tech incapable of meeting short term obligations

Constant Challenge to meet deadlines with both customers and creditors

Long holding periods and excessive inventory charges.

Difficulty in debt collection from both debtors

.

Growing geographical demand and the opening of new potential markets.

Potential opportunity for acquisition by.Electrolux

World recession crisis

Financial and credit pressures from banks .

Decrease in market demand .

. Increasing demand for cheap products

Strengt

hs Weaknesses

Threats Opportunities

.

\

2008 2007 Ratio No

302,156,247_________________

249,896,630

1.20911526

208,.60,897-------------------------

192,229,869

0.1085205

ratio Current

1

301,156,247-137,910,332

-----------------------------------------------

249,896,617

( 208,760,897-87,584,533)________________________

192,229,869

Quick ratio2

67,668,418____________48,062,894

98,131,765__________

32,831,892Gross profit

3

18,428,628_________

48,062,894

12,630,699__________

32,831,892 Profit margin

4

18,428,628-----------------------

339582888__

12,630,699----------------------

232783376Return on Total

assets

5

2008 2007 Ratio No

18,428,628-------------------

89686271

12,630,699-------------------

40553508Return on Capital

employed

6

18,428,628--------------------

89,686,271

12,630,699----------------------

40,553,508Return on OE

7

18,428,628--------------------

67,439,800

12,630,699------------------

33,725,000Return on investment

8

249,896,630-----------------339582888

192,229,869__________

232783376Debt ratio

9

Time interest earned10

BB

2008 2007 Ratio No

534,666,976---------------------------

--112747432.5

365/4.7

400,679,612-------------------------

112747432.5

365/3.5

Inventory ratio

Average holding period

11

48,062,894----------------------

206127562

156.5 days

32,831,892-------------------------

206127562

229 days

A/R Turnover Ratio

Average collection period

12

0.21 0.23 EPS

13

Comment 2008 2007 Ratio

No .

Thought this year we have some slight improvement however B-

tech has a very poor liquidity ratio over the this year and the past

year which shows a difficulty meeting matured short term

obligations.

1.2

Almost one time

0.10 8

Less than one time

Current Ratio

1

B-tech is maintaining a very poor quick ration over the this year and

the past year which shows a difficulty meeting matured short

term obligations.

0.65 Less than one time

0.6 Less than one time

Quick Ratio

2

B-tech is achieving a Gross profit slightly

Below the previous .

15.5% 14.4% Gross profit ratio

3

Profit margin is almost the same . 38.3% 38.4% Profit

margin Ratio

4

B-tech is constantly managing its assets . 5.4% 5.4% Return on

Total assets

5

Comment 2008 2007 Ratio

No

Return on capital employed has shown an obvious retardation in 2008 compared to the previous

year

20% 31% Return on capital

employed

6

Return on owner equity has significantly retarded which shows

a serious indicator that the company relies on debts.

20% 31%Return on

OE 7

Poor performance of ROI due to the poor liquidity and sales.

27.4% 37.4% Return on investme

nt

8

Aththough the bebt has decreased from the previous year however it’s till high and the sales can’t make it

up to the high debt .B-tech depends on debt,shown in bank overdrafts,

in a threatening way.

73.5% 82.5% Debt Ratio

9

Times interest earned

10

Comment 2008 2007 Ratio No

good management of inventory due to the continuous and

extensive promotions all throughout the year not only in

seasons.

4.7 times

77.6 days

3.5 times

104 days

Inventory ratio

Average holding period

11

improved management of the collection of AR reflecting

effectiveness in management .

2.3 times

156.6 days

1.59 times

229 days

A/R turnover ratio

Average collection

period

12

0.21 0.23 Earns per share

13

THANK YOU.…

WEAKNESS POINTS TO BE CORRECTED

STRENGTH POINTS TO BE ENHANCED

Liquidity problems shows a necessity to take a serious

action like selling fixed assets that are not in use to be able to

meet the maturing short term obligations.

Beside having an issue with the collection of AR creating a must to deploy an efficient system of

paying delayed debts We strongly recommend accepting

the acquisition Electrolux to make it to the deficiency in

profits .

A successful distribution policy and an apparent

application of quality management beside

having a spread network all over the

country that helped the inventories together

with the constant promotions all over the

year .