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CHAPTER ONE

INTRODUCTION

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1.1 Background of the Study
The BBA program of Uttara University is designed to focus on theoretical and
Professional development of students who are open to take up business as a profession as
well as service as a career. Internship reports are a requirement for the completion of the
BBA program. This Internship reports is of knowledge and learning become perfect
when it is associated with theory and practice. For any business student only curriculum
activity is not enough for handling the real business situation, therefore, it is a
requirement after the completion of BBA to involve with a business organization to
prepare a report. So it is an opportunity for the students to know about the field of
business through the Internship program.

To fulfill this requirement I worked as an intern in Transcom Electronics Ltd. for the
Internship my preference was in electronics item. I submitted resume to different
institutions but appointed as an Internship trainee of the TEL. My assigned topic is
Financial Performance Evaluation of Transcom Electronics Ltd. which is assigned
by my supervisor in the department. On the basis of working experience in the Internship
period. I have prepared this report and I have tried my level best to relate the theoretical
knowledge with the practical work situation.

1.2 Objectives of the Study

1.2.1 Broad objectives


The broad objectives of the study is to evaluate and analyze the Financial Performance
Evaluation of Transcom Electronics Ltd.

1.2.2 The specific objectives of the study are given as:


To know about the financial activities of Transcom Electronics Ltd.
To analyze the financial performance of Transcom Electronics Ltd.
To find out the reason behind Transcom Electronics Ltd. enhancements or pitfalls
of performance over years.

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1.3 Company Profile
Transcom Electronics Ltd (TEL) started its operation in 1993 by taking over PHILIPS
electronics and lighting business in Bangladesh. Today, the company is one of the
leading electronics and electrical company in the country, marketing and distributing
Consumer lighting, Consumer electronics, Home Appliances and Professional lighting
products from renowned brands through its extensive distribution and retail network.
Originated with tea plantations in 1885, TRANSCOM today is one of the leading and
fastest growing diversified business houses in the country employing over 10000 people.
Not many industrial groups in Bangladesh can claim a history of continuous business
pursuits stretching back over 125 years! Initially tea and later jute formed the backbone
of the family business. Although these are still part of the activities and contributing
marginally to the overall group turnover. Presently those early industrial ventures have
moved over to businesses involving high-tech manufacturing, international trading and
distribution, forming strong ties with a host of blue chip multinational companies. In
recent years, TRANSCOM has emerged as the largest media house in Bangladesh.
Originated with tea plantations in 1885 a history of strong business pursuits stretching
back over 125 years. Initially tea later jute formed the backbone of the family business.
Although these are still part of the activities, they contribute marginally to the overall
group turnover. These early industrial ventures have moved over to businesses involved
in high tech manufacturing, international trading and distribution, forming strong ties
with a host of blue chip multinational companies and growing. Not many industrial
groups in Bangladesh can claim a history of continuous business pursuits stretching back
over 125 years! Initially tea and later jute formed the backbone of the family business.
Although these are still part of the activities and contributing marginally to the overall
group turnover, presently those early industrial ventures have moved over to businesses
involving high-tech manufacturing, international trading and distribution, forming strong
ties with a host of blue chip multinational companies. In recent years, TRANSCOM has
emerged as the largest media house in Bangladesh.

Address:
GULSHAN TOWER, Plot# 31, Road# 53, Gulshan North C.A, Gulshan-2, Dhaka-1212
Phone : (+880-2) 58814663, 9848501, 58814701, 9848502, 9848518, 58814662,
58814698 Fax : (+880-2) 9884644.

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1.3.1 Brief Profile of the Company
Transcom Electronics Limited
Transcom Electronics Ltd (TEL) started its operation in 1993 by taking over PHILIPS
electronics and lighting business in Bangladesh. Today, the company is one of the
leading electronics and electrical company in the country, marketing and distributing
Consumer lighting, Consumer electronics, Home Appliances and Professional lighting
products from renowned brands through its extensive distribution and retail network
Transcom Digital is the outlet started in the early 2005 through which TEL is retailing
products directly to end consumers in the metro and urban cities. In 2008, the company
re-introduced itself as Transcom Digital as a multi brand, multi-category retailer
catering for all Electronics, Appliances and IT products. Today Transcom Digital
becomes the original outlet of TEL responsible for sales and providing all TEL
electronic/IT products to their valued customers. Currently it is successfully running with
48 outlets throughout the country and expects to increase the total outlet number
eventually. Moreover TEL has a strong Corporate Sales Team under Transcom Digital
for direct sales to the corporate clients.
Through the Electronics & Appliances Distribution Consumer Electronics, Home &
Domestic Appliances from global brands such as Samsung, Philips, Whirlpool and home
brand Transtec are sold throughout the country via a nationwide dealer network.
Currently there are about 165 electronics dealers covered under this network through
which Transcom Digital is retailing the following Electronics & Appliances:

Lighting & Electrical Distribution:


Distribution is the core competency area of Transcom Electronics Ltd. through which
Lighting, Electrical Domestic Appliances from global brand PHILIPS and home brand
TRANSTEC are sold throughout the country via a nationwide distributor network.
Currently there are about 17,000 electrical outlets and 90,000 grocery outlets covered
under this network.

Transcom Digital:
This is a new venture started in the early 2005 through which TEL is retailing products
directly to end consumers in the metro and urban cities. In 2008, the company re-
introduced itself as Transcom Digital as a multi brand, multi-category retailer catering

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for all Electronics, Appliances and IT products. Today Transcom Digital is successfully
running its business with 38 showrooms throughout the country and expects to increase
the total outlet number to 50 by the end of 2010.The Company has a strong Corporate
Sales Team under Transcom Digital for direct sales to corporate clients.

Electronics & Appliances Distribution:


Through the E&A Distribution Consumer Electronics, Home & Domestic Appliances
from global brands such as PHILIPS, WHIRLPOOL, and home brand TRANSTEC are
sold throughout the country via a nationwide dealer network. Currently there are about
165 electronics dealers covered under this network.

Projects: The Company has a strong and experienced project team handling PHILIPS
professional lighting projects.
Transcom Beverage:
The company is the exclusive PepsiCo Franchisee for Bangladesh. TBL owns and
operates modern plants in Dhaka and Chittagong for bottling the renowned soft drink
brands: Pepsi, 7Up, Mirinda, Slice, Mountain Dew, Pepsi Diet and 7Up Light. Their
vision is
To deliver sustained growth in Bangladesh and move towards dominant Beverage
Company, delighting & nourishing every Bangladeshi, by best meeting their everyday
beverages needs & stakeholders by delivering performance with purpose, through
talented people.
Transcom Distribution Co. Ltd.:
The largest independent distribution setup in Bangladesh with full infrastructural
facilities provided by a countrywide network of 23 branch offices along with one main
office, warehouses and delivery vans, directly servicing over 8000 outlets throughout the
whole country.
TDCL is an allied business company of TRANSCOM Groups responsible for
distributing multi-dimensional products across the country. The company started its
business with the distribution of quality pharmaceutical products manufactured
by ESKAYEF, NOVO NORDISK, SERVIER, ALLERGAN and consumer brands like
Frito Lay, Heinz, Wrigley, Mars, Energizer, Schick, L'Oreal, Garnier, ConAgra Foods,
McVities and Hemas. It started its diagnostic distribution division in 1993 by distributing

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laboratory equipments and reagents from Hettich (Germany), TREK Diagnostics
(USA) and Fortress(UK). It also distributes crude oil and oil products from Vitol.
Basically TDCL has three distribution divisions:
TDCL is an allied business company of TRANSCOM Groups with its three largest
distribution divisions:
1. For Pharmaceutical products-Pharma Division
2. For Diagnostics and clinical products-Diagnostic division and
3. Consumer Brands division.
TDCL has the largest independent distribution setup in Bangladesh with full infra
structural facilities provided by a countrywide network of branch offices with
warehouses and delivery vans. The company distributes-
1. TDCL-Pharma: Quality pharmaceutical products manufactured by SERVIER, NOVO
NORDISK and ESKAYEF.
2. TDCL-Diagnostic: Diagnostic and clinical products from VesaTREK (USA), Asys Hi-
Tech (Austria) and Shel lab (USA).
3.TDCL-Consumer Brand: TDCL also markets and distributes color cosmetics; skin and
hair care products from LOREAL Paris, MAYBELINE New York and GARNIER
Paris, Heinz, Lindt & Fritolay, the worlds number one potato chips is now being
exclusively marketed and distributed all over Bangladesh by TDCL.

Bangladesh Lamps Ltd:


BLL is the pre-eminent manufacturer of electric light bulbs in the country. The company
has an exclusive licensing agreement with PHILIPS Electronics N.V. Holland, under
which it manufacturers PHILIPS lighting products. BLL was incorporated in 1960 as a
subsidiary of PHILIPS, Holland. In March 1993, PHILIPS sold its entire shares to
TRANSCOM. The pre-eminent manufacturer of electric light bulbs in the country. The
company has an exclusive licensing agreement with PHILIPS Electronics N.V. Holland,
under which it manufacturers PHILIPS lighting products. BLL was incorporated in 1960
as a subsidiary of PHILIPS, Holland. In March 1993, PHILIPS sold its entire shares to
TRANSCOM. The primary purpose of BLL is to produce and serve Philips GLS lamps
(Classic tone, Soft tone and Anti-Insect types) & Transtec CFL and GLS lamps (Clear &
Lustre types) around the country which are marketed and sold under the governance
of Transcom Electronics Ltd (TEL) as lightening distribution and sales projects. Due to

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the necessity of cost effective electricity the TFL tech bulbs are populated and distributed
more and more everyday around the country, BLL became one of the leading TFL bulb
production houses
Bangladesh Electrical Industries Ltd:
BEIL is a leading producer of televisions and radios in Bangladesh and is the official
licensee of PHILIPS Electronics N.V. Holland. The company was incorporated in 1960
as a subsidiary of PHILIPS, Holland. In March 1993, PHILIPS sold its entire shares to
TRANSCOM.

Transcom Mobile Ltd:


At recent they started a new business, Transcom mobile Ltd. They started it in 2011.

Organogram:

Transcom
Electronics

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Products of Transcom Electronics Ltd.

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1.3.2 Description of Section
I have worked in Front desk and Office Section of Transcom Electronics Ltd.,
Mohakhali, Dhaka, Bangladesh. In this report, I will try to make an overall analysis
on all activities of Transcom Electronics Ltd., specially focuses on Financial prospect
of the branch as well as whole Company.
Internship program is the most important period for a BBA student. The duration of
internship program is 3 months, which carries a best learning process to know about
the organization and cope up the environment in such a way like professional
employees. The experience that got by an intern during the internship period will
make them more smart and professional in their future job sector. I was started my
internship from 1st March 2017 to 30th May, 2017 at Transcom Electronics Ltd.,
Mohakhali, Dhaka, Bangladesh.

1.4 Major difficulties faced for accomplishing internship


During the preparation of this report, several problems have been encountered that may
be termed as the limitation of the study. Adequate efforts have been taken to accomplish
the study according to the objectives. But as the research team is consisted of only one
member therefore it was not possible to cover more additional area, which would
obviously give better results.
1. The first limitation is that I failed to sketch the complete picture of the Transcom
Electronics Limited activities at the period of my internship programmed. So I tried
my best to focus on what I have done and also tried to make it consistent with other
part of the report.
2. The second limitation is the lack of intellectual thought and analytical ability to make
in a perfect one. I have to offset with quality due to time constraint, which apparently
seems to be the most severe limitation.
3. Sufficient records & publications as well as up to date information are not readily
available.
4. The survey method needs efficient fund for fulfilling it properly. As it is for the
academic purpose, money shortage is an obvious constrain. For data collection, the
budget for printing and transportation costs is limited.
5. This study has not done first time in Bangladesh. But the literature reviews were not
easily available. Moreover, there was very little information found in the perspective
of Bangladesh.
6. In some cases, it is found that respondents are unable to remember the actual
response. This inability has led to errors of omission, telescoping, and creation.

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CHAPTER TWO
DESCRIPTION OF THE TOPIC

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2.1 Topic
Financial Performance Evaluation of Transcom Electronics Ltd.
2.1.1 Meaning of Performance Evaluation
In the Oxford Dictionary the word Performance means things that show how well or
badly in working and the word Evaluation means to form an opinion of the amount,
value, quality, of thins after thinking about it carefully.
When evaluating financial performance, certain must be consider. Transcom Electronics
Limited blew some of factors to the obvious factors that investors should consider and
outline the performance presentation standard, which now play a prominent role in
performance evaluation .In case of evaluating the financial performance of a Company
obvious factors are given blew.

2.1.2 Ways of measuring Financial Performance


The Balance Sheet and Profit and Loss Account are the basic financial statements of a
business enterprise. They provide useful financial data regarding the operations of a
firm. Financial statement contain a wealth of information which, if properly analyzed
and interpreted, can provide valuable insights into a firms performance and position, A
balance sheet reports the firms assets and liabilities at a certain point of time. The profit
and loss account presents the summary of items of a firm during a particular period of
time. Neither of these shows the nature of the transactions entered into during the period
to finance the firms operations. Nevertheless, they provide some extremely useful
information. The Balance Sheet is a mirror of the financial position of a firm. It show
the assets the firm owns, the liabilities it is to pay to outsiders and the amount of internal
liabilities in terms of capital supplied by the owners at a particular point of time. The
profit and loss account shows the results of business activities or operations during a
certain period of time, usually a year. It presents the summary of income obtained and
the costs incurred by the firm during a year. Thus, the financial statements provide a
summarized view of the operations of a firm. Much can be learn about a firm from
careful examination of its financial statements. It is an important aid to financial
statement analysis. Of the various methods of Financial Statements analysis, Ratio
analysis based on different ratios, which are calculated, from the accounting data
contained in the financial statements. Different ratios used for different purposes.
Financial analysis depends largely on the use of ratios through there are other equally
important tools of such analysis.

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2.1.3 Objective of Financial Analysis:
In short, the main objectives of analysis of financial statements are to assess: the present
and future earnings capacity or profitability of the concerns, the operational efficiency of
the concern as a whole and of its various parts or departments, the short-term and long-
term solvency of the concern for the benefit of the debenture holders and trade creditors,
the comparative study in regard to one firm with another firm or one department with
another department, the possibility of developments in the future by making forecasts
and preparing budgets, the financial stability of a business concern, the real meaning and
significance of financial data.

2.1.4 Ratio Analysis:


Financial analysis refers to an assessment of the viability, stability and profitability of a
business. It is prepared by using ratios that make use of information taken from Financial
statements and other reports.

The Liquidity of a business organization measured by its ability to satisfy its short term
Obligations as they come due. This ratio shows the current assets to current debt ratio.
This ratios are generally used by short term creditors like, suppliers. Under
liquidity ratios management uses those kind of ratios, they are as
follows:

Current Ratio
Quick Ratio
Inventory Turnover Ratio
Average Collection Period
Total Asset Turnover
Debt Ratio
Debt- Equity Ratio
Equity Ratio
Gross profit margin

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2.2 Theoretical Framework
2.2.1 Concepts of Finance
Team of leading expert in quantities finance bring together cutting edge research and
solid knowledge of best practice in risk management though a wide range of consulting
and trading service. A branch of economics concerned with resource allocation as well as
resource management ,acquisition and investment .simply finance deals with matters
related to money and markets. To raise money through the issuance and sale of debt
and/or equity.

2.2.2 Concepts of Financial Activities


The financial activity measures and reports the status of financial resources and the
changes in the resources. The FRS communicates this information primarily to external
users. This type of reporting is called non-discretionary because the organization has few or
no choice in the information it provides. Much of this information consists of traditional
financial statements, tax returns, and other legal documents.
Furthermore, the one word which can easily replace finance is Exchange. Finance is
nothing but an exchange of available resources. Finance is not restricted only to the
exchange and/or management of money. A barter trading system is also a type of finance.
Thus, we can say, Finance is an art of managing various available resources like money,
asses, investments, securities, etc.

At present, we cannot imagine a world without Finance. In other words, Finance is the soul
of our economic activities. To perform any economic activity, we need certain resources,
which are to be pooled in terms of money (i.e. in the form of currency notes, other
valuables, etc.). Finance is a prerequisite for obtaining physical resources, which are needed
to perform productive activities and carrying business operations such as sales, pay
compensations, reserve for contingencies (unascertained liabilities) and so on.
Hence, Finance has now become an organic function and inseparable part of our day-to-day
lives. Today, it has become a word which we often encounter on our daily basis.

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2.3 Study framework

Topic selection, Data collection Analysis & Consultation with the supervisor

Data Observation & Separation

Primary data collection

Secondary data collection

Report Preparing

Data input to computer, Setting Processing & Preparing the report

Make as a book & Shown to supervisor for correction them submitted


Finally

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CHAPTER THREE
DATA COLLECTION AND
PROCESSING

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3.1 Data Description
The report is descriptive in nature. To prepare a report gathering data is very important.
The information was collected from both primary and secondary sources of data.
Regarding the information required was collected within the organization from the
Transcom Electronic Ltd.

3.2 Source of Data collection


In order to make the report more meaningful and presentable, two sources of data and
information have been used widely.

SOURCE OF DATA

PRIMARY SECONDARY
DATA DATA

Primary Source
Practical desk work.
Face to face conversation with the respective of Customers.
Direct conversation with customers
Face to face conversation with company managers and officers.
Discussion with my supervisor

Secondary Source
Personal interview
Journal
Website : www.transcombd.com/about.html

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3.3 Data Processing Methods
Collected information have then processed & compiled with the aid of MS Word, Excel.
Necessary tables have been prepared on the basis of collected data and various statistical
techniques have been applied to analyses on the basis of classified information. Detail
explanation and analysis have also been incorporated in the report.

Data Collection Method:


For the organization part information has been collected through different published
articles, journal, and brochures.

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CHAPTER FOUR
RESULTS AND DISCUSSIONS

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4.1 Financial Performance and Ratio Analysis of Transcom Electronics Ltd.
In short, the main objectives of analysis of financial statements are to assess: the present
and future earnings capacity or profitability of the concerns, the operational efficiency of
the concern as a whole and of its various parts or departments, the short-term and long-
term solvency of the concern for the benefit of the debenture holders and trade creditors,
the comparative study in regard to one firm with another firm or one department with
another department, the possibility of developments in the future by making forecasts
and preparing budgets, the financial stability of a business concern, the real meaning and
significance of financial data.

Financial analysis refers to an assessment of the viability, stability and profitability of a


business. It is prepared by using ratios that make use of information taken from Financial
statements and other reports.

The Liquidity of a business organization measured by its ability to satisfy its short term
Obligations as they come due. This ratio shows the current assets to current debt ratio.
This ratios are generally used by short term creditors like, suppliers. Under
liquidity ratios management uses those kind of ratios, they are as
follows:

Current Ratio
Quick Ratio
Inventory Turnover Ratio
Average Collection Period
Total Asset Turnover
Debt Ratio
Debt- Equity Ratio
Equity Ratio
Gross profit margin

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4.2 Current Ratio:

Current Ratio = Current Assets


Current Liabilities
Table 2 : Current ratio
Year Current Asset Current Liability Current Ratio

2016 2,464,125 3,385,850 0.73


2015 2,0603,325 1,851,205 1.11
2014 1,643,107 1,409,727 1.17
2013 1,506,071 1,313,393 1.15
2012 988,093 717,069 1.38

Source: Annual Report (2012-16) of Transcom Electronics Ltd.

Current Ratio

25000000

20000000
Axis Title

15000000

10000000

5000000

0
1 2 3 4 5
Current Ratio 0.73 1.11 1.17 1.15 1.38
Current Liability 3,385,850 1,851,205 1,409,727 1,313,393 717,069
Current Asset 2,464,125 20,603,325 1,643,107 1,506,071 988,093
Year 2016 2015 2014 2013 2012

Figure : Current ratio


Interpretation:
As a manufacturing company, we know, the standard value of current ratio is 2:1. The
companys current ratio varies from 1.38 to 0.73 proceeding from the last 5 years.

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4.3 Quick Ratio:
(Current Asset Inventory)
Quick / Acid Test Ratio =
Current Liability

Table 3: Quick Ratio

Year Current asset Inventory Current liability Quick Ratio


2016 2,464,125 1,585,100 3385,850 0.26
2015 2,063,325 1,303,637 1,851,205 0.41
2014 1,643,107 1,075,310 1,409,727 0.40
2013 1506,071 959,414, 1,313,393 0.42
2012 988,093 662,012 717,069 0.45

Source: Annual Report (2012-16) of Transcom Electronics Ltd.

Quick Ratio
10000000
9000000
8000000
7000000
Axis Title

6000000
5000000
4000000
3000000
2000000
1000000
0
Current Current
Year Inventory Quick Ratio
asset liability
Series5 2012 988,093 662,012 717,069 0.45
Series4 2013 1,506,071 0 1,313,393 0.42
Series3 2014 1,643,107 1,075,310 1,409,727 0.4
Series2 2015 2,063,325 1,303,637 1,851,205 0.41
Series1 2016 2,464,125 1,585,100 3,385,850 0.26

Figure : Quick Ratio


Interpretation:
We know, the standard value of quick ratio is 1:1. Our company, TEL has a quick ratio from
0.45 to 0.26 among the years 2012-2016. But the ratio had fallen in year 2016.

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4.4 Inventory turnover ratio:

Cost of Goods Sold


Inventory Turnover Ratio =
Average Inventory

Table 4: Inventory turnover ratio


Inventory
Year Cost of Goods Sold Inventory
Turnover
2016 3,099,355 1,585,100 2.0
2015 2,405,361 1,303,637 1.84
2014 1,820,496 1,075,310 1.70
2013 1,526,514 959,414, 1.60
2012 1,298,911 662,012, 1.96
Source: Annual Report (2012-16) of TEL

Inventory Turnover
2.5

2
Axis Title

1.5

0.5

0
1,585,100 1,303,637 1,075,310 959,414, 662,012,
3,099,355 2,405,361 1,820,496 1,526,514 1,298,911
2016 2015 2014 2013 2012
Inventory Turnover 2 1.84 1.7 1.6 1.96

Figure: Inventory turnover ratio


Interpretation:
We know, the standard value of inventory turnover ratio is generally 8 times. The
companys inventory turnover ratio is 1.96 to 2 has fluctuated throughout the period and
the highest value can be observed during 2016 and 2012. But still it is below the
standard.

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4.4 Average collection period:
Account Receivable
Average Collection Period =
Average Sales per Day

Table 5: Average collection period


Year Accounts Average Sales Per Average Collection
Receivable Day Period (days)
2016 640,195,291 6,519,639,234/360 35.35
2015 478,364,475 5,090,318,113/360 33.83
2014 343,870,341 3,900,732,314/360 31.74
2013 344,226,933 3,089,746,417/360 40.10
2012 194,727,875 2,534,174,981/360 27.67

Source: Annual Report (2016-2012) of TEL.

Average Collection Period (days)


100%

50%

0%
6,519,639,234/360

5,090,318,113/360

3,900,732,314/360

3,089,746,417/360

2,534,174,981/360

Average Collection Period (days)

640,195,291 478,364,475 343,870,341 344,226,933 194,727,875

Figure : Average collection period


Interpretation:
We know, the standard value of average collection period is 60 days to 90 days and the
lower, it is more efficient. The average collection period of the company has fluctuated
throughout the whole period. But still it is below the standard which is good for the
company.

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4.6 Total asset turnover ratio:
Sales
Total Asset Turnover =
Total Assets

Table 6 : Total asset turnover ratio


Total Asset
Year Sales Total Assets
Turnover Ratio
2016 6,519,639,234 7,691,601,900 0.85

2015 5,090,318,113 5,132,284,238 0.99


2014 3,900,732,314 3,851,369,286 1.01
2013 3,089,746,417 3,162,232,934 0.98
2012 2,534,174,981 2,154,993,391 1.18

Source: Annual Report (2016-12) of TEL.

Total asset turnover ratio


1.6E+10
1.4E+10
1.2E+10
1E+10
Axis Title

8E+09
6E+09
4E+09
2E+09
0
1 2 3 4 5
Total Asset Turnover Ratio 0.85 0.99 1.01 0.98 1.18
Total Assets 7,691,601, 5,132,284, 3,851,369, 3,162,232, 2,154,993,
Sales 6,519,639, 5,090,318, 3,900,732, 3,089,746, 2,534,174,
Year 2016 2015 2014 2013 2012

Figure: Total asset turnover ratio


Interpretation:
We know, the standard value of total asset turnover ratio for large organization is 2
times. The companys total asset turnover ratio fluctuates from 1.18 to 0.85 which is
below the standard.

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4.7 Debt Ratio:

Total Liabilities
Debt Ratio =
Total Assets

Table 7 :Debt ratio


Year Total Liabilities Total Assets Debt Ratio
2016 3,732,993,864 7,691,601,900 0.49
2015 2,160,813,294 5,132,284,238 0.42
2014 1,644,089,330 3,851,369,286 0.43
2013 1,500,159,577 3,162,232,934 0.47
2012 1,500,159,577 2,154,993,391 0.70
Source: Annual Report (2016-12) of TEL.

Debt ratio
Axis Title

1 2 3 4 5
Year 2016 2015 2014 2013 2012
Total Liabilities 3,732,993,864 2,160,813,2941,644,089,330 1,500,159,5771,500,159,577
Total Assets 7,691,601,900 5,132,284,2383,851,369,286 3,162,232,9342,154,993,391
Debt Ratio 0.49 0.42 0.43 0.47 0.7

Figure: Debt ratio


Interpretation:
The debt ratio of TEL. fluctuates from 0.70 to 0.49. We know, debt ratio indicates how
much portion of total assets is financed by the debt. The lower, it is less risky.

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4.8 Debt-equity ratio:

Long term Debt


Debt- Equity Ratio =
Shareholders Equity
Table 8: Debt-equity ratio

Shareholders Debt-Equity
Year Long-term Debt
Equity Ratio
2016 347,143 3,958,608 0.088
2015 291,256 2,971,470 0.098

2014 234,362 2,207,280 0.106

2013 186,767 1,662,073 0.112


2012 160,319 1,277,605 0.126

Source: Annual Report (2016-12) of TEL.

Debt-equity ratio
4500000
4000000
3500000
3000000
Axis Title

2500000
2000000
1500000
1000000
500000
0
1 2 3 4 5
Debt-Equity Ratio 0.088 0.098 0.106 0.112 0.126
Shareholders Equity 3,958,608 2,971,470 2,207,280 1,662,073 1,277,605
Long-term Debt 347,143 291,256 234,362 186,767 160,319
Year 2015 2014 2013 2012 2011

Figure: Debt- Equity Ratio


Interpretation:
We know the standard value of debt-equity ratio is 1:1. The debt-equity ratio is 0.126-
0.088 of TEL has fluctuated throughout the whole period.

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4.9 Equity ratio:

Equity Ratio = Total Equity


Total Assets

Table 9: Equity ratio


Year Total Equity Total Assets Equity Ratio
2016 4,305,751 7,691,601 0.56
2015 3,262,726 5,132,284 0.63
2014 2,441,642 3,851,369 0.63

2013 1,848,840 3,162,232 0.58

2012 1,437,924 2,154,993 0.67


Source: Annual Report (2015-11) of TEL.

Equity ratio
12000000
10000000
8000000
Axis Title

6000000
4000000
2000000
0
1 2 3 4 5
Equity Ratio 0.56 0.63 0.63 0.58 0.67
Total Assets 7,691,601 5,132,284 3,851,369 3,162,232 2,154,993
Total Equity 4,305,751 3,262,726 2,441,642 1,848,840 1,437,924
Year 2015 2014 2013 2012 2011

Figure: Equity ratio


Interpretation:
The equity ratio of Transcom Electronics Limited fluctuates from 0.67 to 0.56. We
know, equity ratio indicates how much portion of total assets is financed by the equity. If
the ratio is higher, it is less risky. Simultaneously it also decreases the firms value.

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4.10 Gross profit margin:

Earning Before Interest & Tax (EBIT)


Gross profit margin =
Interest
Table 10: Gross profit margin
Year Gross Profit Sales Gross Profit Margin
2016 3,420,283,765 6,519,639,342 0.53
2015 2,684,956,321 5,090,318,765 0.52
2014 2,080,235,675 3,900,732,764 0.53
2013 1,578,652,589 3,089,746,334 0.51
2012 1,246,998,530 2,534,175,453 0.49
Source: Annual Report (2016-12) of TEL.

Figure: Gross profit margin


Interpretation:
We know, the standard of gross profit margin is 20% to 30%. The companys gross
profit margin fluctuates from 0.49 to 0.53 in the preceding 5 years (2012-2016). Here,
the gross profit margin has an increasing trend, which is desirable.

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CHAPTER SFIVE
Findings, Recommendations Conclusion

29
5.1 Findings of the Study
Transcom Electronics Limited is one of the leading companies with 4.74% market share
in the field of Electronics Product in Bangladesh.
1. Transcom Electronics Limited has long range of product lines for a lot of product
categories.
2. The export market of Transcom Electronics Limited is expanding rapidly.
3. Transcom Electronics Limited has a wide range of distribution network.
4. The present condition of this company is really good and it is improving day by
day.
5. Current ratio: We know that standard value of Current ratio is 2:1 . The companys
current ratio range is 1.38 to 0.73. So company position is good .
6. Quick ratio :We know , the standard value of quick ratio is 1:1 our company has a
quick ratio range is 0.26 to0.45 it is risky position .
7. Inventory turn over ratio : We know , the standard value of Inventory turn over
ratio is generally8tims . The companys inventory turnover ratio range is 1.60 to 2.
it is good position for Transcom Electronics Limited.
8. Average collection period : We know , the standard value of Average collection
period is 60 days to 90 days . The average collection period of the company range
is 27.67 to 40.10 which is very good for company .
9. Total asset turnover : We know , the standard value of Total asset turnover ratio is
2 times . The companys total turnover ratio range is 0.85 to 1.18 the company is
not desirable.
10. Debt ratio : we know that standard value of debt ratio is 1:1 . The companys debt
ratio range is 0.42 to 0.70 which is good position for company.
11. Debt equity Ratio : we know that standard value of Debt equity Ratio is 1:1
Our company debt equity ratio range is 0.088 to 0.126 which is good position .
12. Equity Ratio : We know the standard value of Equity ratio of equity ratio is 1.1
Our company 3.4 our company equity ratio range is 0.56 to 0.67 . It is Good
position for company.
13. Gross profit margin : We know the Standard value of Gross Profit margin is 20%
to 30% .The companys gross profit margin Range is 0.49 to 0.53 .Here the Gross
profit margin has Satisfactory level.

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5.2 Recommendations
After analyzing the overall study and findings, I can observe that though Transcom
Electronics Limited is doing well in almost every field, some major aspects should be
taken into consideration continuously to beat the competitors in all aspect of its
operation. Transcom Electronics Limited should take the following recommendations
into consideration:

1. Should improve the overall liquidity situation of Transcom Electronics Limited


2. Should try hard to obtain a greater fixed asset turnover ratio and total asset
turnover ratio immediately.
3. Should try to increase the operating profit margin and net profit margin.
4. Should increase earnings per share to attract investors.
5. Should be more careful about giving credit sales.
6. Should increase efficiency in accounts receivable collection.
7. Should consider issuing more stocks rather than bonds, debentures and other debt
instruments in the capital market to finance its investments.
8. Should prepare more appropriate capital structure which will create more value to
Electronics Industry.

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5.3 Conclusion

Financial analysis is helpful in assessing the financial position and profitability of


a concern. This is done through comparison by ratios for the same concern over a
period of years. Accounting ratios calculated for a number of years show the trend
of the change of position. The trend is upward or downward or static. it helps to
give idea about the financial condition, thus it helps in future financial
projection and decision making process of any business house. Eventually one
can assess how important is financial analysis in the modern days of business. It
gives the exact picture of the financial condition and helps future projection of
any organization, Transcom Electronics Limited.

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CHAPTER SIX
INTERNSHIP EXPERIENCE

33
6.1 Internship Position
I was given the opportunity to work in Transcom Electronics Ltd. for three months it was
part of my academic program. In the internship period I have no specific position. So I
have no fixed duties in the organization. I work under a manager and observed his
different types of activities. I prepared this report on the basis of that three months
observation. I have got various kind of experience of export procedure, Transcom
Electronics Ltd. systems, operations procedure, customer relationship etc.

6.2 My Job Responsibilities


File documentation: File documentation is one of the main responsibility regarding
my internship in this organization. I had to collect, and arrange, various types of
official document according to their importance. For this purpose I had to coordinate
with different department of Transcom Electronics Ltd..

Data collection: I had to go to the field for collecting various types of task related
information, which are very much essential for successful arrangement of a product.
Through field visit I had determine the total output regarding the expectation of a
Transcom Electronics Ltd. products.

Coordination among department: I had to coordinate with different department of


the organization.

Arraigning material for the in house meeting: There were a huge number if
meeting during my internship in my organization. I had to collect different types of
materials for those meetings.

Entry of information in office document and soft copy: I had to input office
documents and update the office document. Data entry and database management is
remarkable of them.

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6.3 Linkage between work-Internship topic
There few specific responsibilities I have performed. These are:
Back to Back L/C opening: Sometimes to complete export exporters have to buy raw
material and accessories from another supplier by opening Back to back L/C which is
back to back L/C. It is new credit in favor of another beneficiary. Sometimes beneficiary
seller of a credit himself is unable to supply goods specified in the L/C and required to
purchase from another supplier by opening second credit.

Working at Transcom Electronics Ltd. was a great experience for me. I have learnt many
things from them. From my little knowledge what I have observed and some
recommendations are as follows:

Boss and subordinates relationship: I observed that between boss and subordinate has
friendly relationship for some cases. But there are also some traditional boss exist whose
only need order and work. They just dont much talk with subordinate without any
works. But there are more leaders whose have power to control their subordinate with
motivation and caring.
Organizational culture and behavior: Organizational culture and behavior is well
maintained. In any organization there much more need ethical culture and behavior than
paper rules and regulation in Transcom Electronics Ltd. I saw that it is very good. Every
employee have positive attitude about their office culture and behavior.

Working environment: Transcom Electronics Ltd. ensures good working environment


for its officials. But not the best, Company should make friendlier working environment
for employees. It may produce more works.

Centralized structure: Transcom Electronics Ltd. follows centralized official structure.


In every important decisions comes from top level and also every important have to pass
from top level. I think it is not good idea. Decentralized is best idea to work efficient end
effectively.

35
REFERENCES

Book Reference
1. Accounting Principles, Kieso & Kimmel ninth edition 2008.
2. Accounting Principles, Syed Masud Hossain 2012 edition.
3. Annual Report of Transcom Electronics Ltd. 2012-2016
4. Baily & Mieres (Portfolio Management)
5. Principles of Managerial Finance by Lawrence J. Gitman
6. Financial Statement Analysis, Fifth Edition-Leopold A. Bernstein
7. Financial Management- Theory & Practice, 10th Edition- Eugenne F. Brigham
& Michael C. Ehrhardt
8. Jerry J. Weygandt, Accounting Principles 7th edition
9. S.Kevin (Portfolio Management)
10. Principal of finance Md. Haruner Rashid-4th Edition-2010- The Angel
Publication.
11. Financial Statement Analysis George Foster -2nd Edition (2009-2010)- Pearson
Education.
12. Principles of Managerial Finance by Lawrence J. Gitman

Websites:
1. www.transcombd.com/contact.html
2. www.google.com
3. www.wikipedia.com

36
Appendix
Income Statement
Transcom Electronics Limited
Income statement
As at December 31, 2016

Analysis of Consolidated Income Statement:


The consolidated Income Statements shows the records of revenues and expenses for the
Last two financial years, 2015 and 2016.
Particulars Year 2016 Year 2015
Sales Revenue 1,674,087,945.00 1,393,627,887.00
Subcontract revenue 5,454,225.00 59,268,000.00

Total revenue 1,679,542,170.00 1,452,895,887.00

Less: Cost of goods sold: 1,128,014,588.00 1,082,489,912.00

Direct Material/Material 920,900,528.00 913,668,167.00


Consumed
Direct Labor 150,358,298.00 140,492,500.00

Factory overhead 56,755,762.00 28,329,245.00


Gross profit 551,527,582.00 370,405,975.00

Administrative & selling 84,380,206.00 95,186,547.00


Expenses
Operating Profit 46,71,47,376.00 27,52,19,428.00

Less: Financial exp, 2141,77,648.00 15,39,88,754.00


Add: other Income 72,294,857.00 97,274,529.00
Net profit before Tax and 325,264,585.00 218,505,203.00
Workers Provided Fund
Less: Workers Provided 15,488,790.00 -
fund
Net profit before Tax 309,775,795.00 218,505,203.00
Less: Provision for 27,644,980.00 36,093,138.00
Income tax
Net profit after Tax 282,130,815.00 182,412,065.00
Earnings Per Share (EPS) 2.01 1.30

37
Balance Sheet
Transcom Electronics Limited
Balance sheet
As at December 31, 2016

Analysis of Consolidated Balance sheet:


The consolidated Income Statements shows the records of revenues and expenses for the
last two years, 2015 and 2016.
Particulars Year 2015 Year 2014
Non Current Assets: 2,697,669,438.00
2,267,152,562.00
Property Plant & 1,746,304,786.00
Equipment 1,432,890,110.00
Land and land 222,985,500.00
development 97,985,500.00
Building 896,914,471.00 755,999,795.00
Plant & Machinery 593,279,996.00 558,279,996.00
Vehicles 12,264,154.00 9,764,154.00
Other assets 20,860,665.00 10,860,665.00
Capital work in 951,364,652.00
progress 579,537,452.00
Investments - 254,725,000.00
Current Assets: 1,303,849,778.00 1,014,789,671.00
Inventories 554,719,980.00 520,641,340.00
Accounts Receivables 504,355,503.00
398,571,089.00
Advance, Deposits and 201,550,025.00
prepayments 81,423,358.00
Cash and Cash 43,224,270.00
Equivalents 14,153,884.00
Total Assets: 4,001,519,216.00 3,281,942,233.00
Current Liabilities and 1,215,099,553.00
Provisions 953,478,661.00
Shareholders Equity 2,555,469,491.00 1,973,443,879.00
Long term loan 230,950,172.00 355,019,693.00
Total Equity and 4,001,519,216.00 3,281,942,233.00
Liabilities

38