Introductory Part

1.Introduction:

This report is an Internship Report prepared as a requirement for the completion of the BBA
program of the College of Business Administration (CBA), International University of Business
Agriculture and Technology. It offers a great opportunity for any student to get some tremendous
& brilliant ideas about the practical field. The primary goal of internship is to provide a job
exposure to the students and an opportunity for translation of theoretical conception in real life
situation. After the completion of four-year academic BBA program, I was placed in PRAN
Group, Corporate Headquarters. PRAN-RFL Center, 105 Middle Badda, Dhaka for the
Internship program. This report is done under the topic of “Analysis of working capital” , A
Study on PRAN group Corporate Headquarters. PRAN-RFL Center, 105 Middle Badda, Dhaka.
At the time of my Internship program I had the opportunity to work on Finance department and
also with different software management used on working capital calculation. This helped me to
gather knowledge about the organizational activities of the multinational company. This report is
mainly focused on working capital analysis of PRAN group. In this report I have also presented
the general overview of PRAN group, its services, financial position and performance analysis,
SWOT analysis, and some other terms also.

2. Rationale of the study:

 To analyze the working capital management of the company.

 To determine the gross and net operating cycle of the unit.

 To know the future need of working capital in the running organization

3. Aim of the research:

This was certainly a great opportunity for me to prepare a report to actualize my theoretical
knowledge into the practical area. I have done this report as a partial fulfillment of the course
Practicum. The aim of the research is to analyze the working capital of PRAN group.

4. Objectives of the Study:

There are two identified objectives of the study. These are:

4.1. Broad Objective:

To know the details of working capital of PRAN group(Head office ) along with its overall
activities and working system. The main objective of the study is to know about PRAN group
working capital analyzing.

4.2. Specific Objective:

 To relate the theoretical knowledge to the original Multinational activities.

  To know about the calculation, analyzing and impact of working capital.
 To study the ideas and methods of working capital analysis used in PRAN group.
 To evaluate the competing process and other program of PRAN group.
 To know the position of PRAN group nationally and internationally.
 To understand the contribution of PRAN in the economy of Bangladesh.
 To learn how PRAN group makes the best use of domestic resources.
 To observe the Corporate Social Responsibility of PRAN group.
 To know about the financial condition of PRAN group.

5. Scopes & Limitations of the Study:

5.1. Scope of the study:

This report is mainly described the working capital analysis used in PRAN group and PRAN
group financial performances. The following issues also will be found on the report:

 The general overview of PRAN group.

 Impact of working capital on PRAN group.
 Corporate social responsibility of PRAN group.
 Internal and external factors analysis of PRAN group.
 Research on working capital of PRAN group.
 Financial performance of PRAN group.

5.2. Limitation of the study:

 Time is a major factor to do this kind of work but I didn’t get enough time to prepare my
report as it should be .Because I need to attend in PRAN group regularly.
 I have carried out such a study for the first time, so inexperience is one of the main
constraints of the study.
 I have selected a critical topic for the report like “Analyzing of working capital”. A Study
on PRAN group at the Head office in Badda.”My internship program was about 3
months. During the three months of my internship was not adequate to focus each and
every issue of the topic. It would be fairly enough if I only concentrate on the report only
but the thing is, during this time, I was busy to continue daily official activities also.
 Due to secrecy of business strategy, the authority of PRAN group didn’t disclose much in
depth information regarding organization.
 Corporate executives usually remain very busy. It is difficult to get adequate time from
them.
 Information about my report topic is not available in the internet that much.
6. Ethical Consideration:
Here, I affirm that all the given information will be remain trustworthy. This report is submitted
as a partial requirement for the fulfillment of Bachelor of Business Administration (BBA)
program at International University of Business Agriculture and Technology. No part of this
report has been submitted for any other degree, diploma and this work have not published in any
paper, journal or magazine or for any monetary purpose. All information is collected from
trusted sources and appropriate references have been used. The report did not use any wrong or
misleading information.
Organizational
Part
1.Organization:

‘PRAN’ has started its operation in 1981 as a processors fruit and vegetable in Bangladesh.
Over the years, the company has not only grown in stature but also contributed significantly to
the overall socio-economic development of the country.“PRAN” is currently one of the most
admired food & beverages brands among the millions of people of Bangladesh and other 134
countries of the world where PRAN Products are regularly being exported. All the PRAN
products are produced as per international standards maintaining highest level of quality at every
stages of its production process. PRAN is currently producing more than 400 food products
under 10 different categories like Juices, Drinks, Mineral Water, Bakery, Carbonated beverages,
Snacks, Culinary, Confectionery, Biscuit & Dairy. The company has adopted ISO 9001 as a
guiding principle of its management system. The company is certified with HALAL which
ensures that only the best quality products are reaches to the consumers table across the Globe.
We, Bangladeshi are blessed with a climate ideally suited to agriculture, specially fruits and
vegetables-rich in taste and flavor: sweet, mellow and juicy. Our deltaic plains are among the
most fertile in the world created and drained by the mighty rivers-the Padma, Jamuna & Meghna.
There is plenty of water and farming is a way of life to our people. Our comparative advantage
as an economy lies in agriculture. We believe the way to economic prosperity is through agro-
business.

PRAN is in testimony to our convictions. It stands for: “Programme for Rural Advancement
Nationally” or in Bangla "প্রগতি রূপায়নে অগ্রণী েন াদ্যম". PRAN is Bangladesh’s largest
grower and processor of fruits and vegetables. Our contract growers cultivate the choosy fruits
and vegetables which are processed in our modern and hygienic factories to highest quality &
international standards.

2. Background of the organization:

PRAN is a conglomerate company .our economy is based on agriculture and PRANs target is to
develop our agriculture sector .They are trying to create more demand for agro product, produced
by our farmer. In the other side employment is created by food processing plant of PRAN . Their
view is to create more employment to eliminate poverty. Actually in 1980 PRAN started its
operation as a processor of fruits and vegetables in Bangladesh and in 1981 when PRAN start its
work and becomes one of the biggest business group in Bangladesh. In 2005 PRAN merged with
RFL and created PRAN – RFL Group. This company has 37 subsidiaries; among them 21
companies are now working. PRAN group is planning for opening new subsidiaries in the future
as they belief in diversifying their products. Their comparative advantage as an economy lies in
agriculture . They believe the way to economic prosperity is through agro business .PRAN is the
pioneer in Bangladesh to be involved in contract farming and procures raw materials directly
from the farmers. Their target is to make their product available to every come of our country so
, every customer get the right to consume. PRAN biggest asset is their competent team of hands
on managers and dedicated employees Their contract growers cultivate their choicest fruits and
vegetables ,which are processed in their modern and hygienic factories to highest quality and
international standards . PRAN is trying to accelerate their global market position rapidly.
3. Mission: To generate employment and earn dignity & self respect
for our compatriots through profitable enterprises.

4. Vision: Their vision has a similarity with the work they are doing, diversifying their
products and making employments for the country. Their vision is “Improving Livelihood”.

5. Industries and Corporate office of PRAN group :

5.1. Corporate office :

The corporate office of PRAN group is in Middle Badda ,which controlling all the functions of
the company .The address of the corporate office is:

Company Name PRAN Group

Address PRAN-RFL Center,
105 Middle Badda,
Dhaka - 1212, Bangladesh
Industry Food processing
logo

Employees 84000
Phone +88-02-9881792 Ext-345, +88-02-8835546
Fax +88-02-8837464
1991
Export Inception
1500 million
Total Customer Reach
134
Total Export Countries
Customer care +09613737777
Email pranexport@prangroup.com

PRAN company is careful and very much sincere about their product. They maintain high
quality and international standard in manufacturing their products. To satisfy their customer and
to deliver them what they want. Now PRAN has six industries across the country. These are
given below.
5.2. List of industries:

 Ekdala , Natore
 Ghorashal ,Palash, Narsingdi
 Kaligonj , Gazipur
 Adamjee ,EPZ
 Rupgonj ,Narayangonj
 Kellabond ,Rongpur

PRAN group has also 5 rented industries in different location in Bangladesh, where they also run
some of their production functions temporarily.

5.3. Total concerns of PRAN group:

PRAN is one of the rising market giant of Bangladesh. After founding in 1981,PRAN group is
increasing their business rapidly. Now they are one of the largest conglomerate merger company.
PRAN group has 9 concerns.

List of concerns:

 AMCL
 BBL
 BAPL
 PAL
 PFL
 PABL
 PCL
 DAIRY
 Pack mate

List of PRAN-RFL group concern :

 PDL
 Charka
 Property lifts
6. ORGANOGRAM of PRAN group

C.E.O. (CHIEF EXICUTIVE OFFICER)

M.D. (MANAGING DIRECTOR)

D.M.D. (DEPUTY MANAGING DIRECTOR)

DIRECTORS

E.D. (EXICUTIVE DIRECTOR)

C.O.O. (CHIEF OPERATING OFFICER)

G.M. (GENERAL MANAGER)

A.G.M. (ASSISTANT GRNERAL MANAGER)

S.M. (SENIOR MANAGER)

MANAGER

D.M. (DEPUTY MANAGER)

A.M. (ASSISTANT MANAGER)

S.A.M. (SUB ASSISTANT MANAGER)

7. Related Information of Corporate Governance :

 The CEO of PRAN group is MEJ.G.(RTD) Amzad khan chowdhury.

 The DMD of PRAN group is Ahsan khan chowdhury.

 There are 5 directors, 2 ED and 2o COO.

8. Product of PRAN Group:

PRAN takes a comprehensive approach to all kinds of agro processed food products, considering
all of the ways their lives can be enriched through ensuring hygienic and quality food products.
With HACCP compliance to ensure best quality products reaching to the consumers, PRAN
places great importance on hygienic manufacturing processes. This encompasses everything
from choosing quality materials to the use of storage facilities and careful monitoring of products
using electronic sorting. Skilled and experienced personnel select finished products which are
then examined in a laboratory to verify their quality and check for residual substances both
before and after the production process.
Furthermore, company’s computer systems offer continuous monitoring of all manufacturing
process to ensure the highest level of quality. PRAN is currently producing more than 700 food
products in 118 different categories like : juices and drinks , snacks, culinary, bakery,
confectionary, dairy and frozen food .

8.1. List of PRAN products:

Product category Picture of the product

Juices:

 Juices in glass bottle

 Juice in aseptic pack
 Juices in hot filled PET bottle
 Juices in tin can

Drinks:

 In HDPE shape pack

 In HDPE bottle
 In PET bottle
 Instant powder drink

Mineral water

Bakery:

 Custard cake
 Pie cake
 Layer cake
 Bread

Dairy:

 Liquid milk
 Milk powder
 Milk drinks
  Milk allied products.

Carbonated soft drinks:

 PET bottle
 Energy drinks

Snacks :

 Fried snacks
 Pallet snacks
 Other ethnics
 Chutney

Culinary :

 Spice
 Mix spice
 Pickle
 Sauce , Ketchap and paste
 Jam and jelly
 Mustard oil
 Rice and allied product
 Mushur dal
 Papar
 Honey
 Noodles and others
Confectionary:

 Candy
 Chocolate and toffee
 Chewing gum
 Loli pop
 Edible jell
 Fruit bar

Biscuit:

 Biscuits
 Water
 Toast

Frozen food:

 Jhatpat

New Arrival
9. Porters five Forces:

Threat of
substitutes

Bargaining power
Bargaining power of buyers
of suppliers Current
Rivalry

Threat of new
entrants

9.1. Bargaining power of suppliers:

PRAN thinks that their suppliers are their native farmers. Most of the part of raw materials are
from the farmer .their supplier has bargaining power. when PRAN is going to buy their raw
product from them, they have the right to bargain about the price and quality of the product.
supplier has the right to select the price of their product .But the Bargaining power of the farmers
that means suppliers are very low . As Bangladesh is an agricultural country , so there are many
sellers of the raw materials of foods . Therefore , there is less chance of the bargaining powers of
the sellers.

9.2. Bargaining power of buyers (Low):

PRAN is one of the largest organization with a lot of products and consumers .The bargaining
power of consumers are very low . In maximum stages the buyers has less chance to bargain with
seller about their product price. They have no right to bargain in many stages because most of the
PRAN products price are fixed .
9.3. Threat of new entrants (High):

Threats of any new competitors are high in the business of PRAN group. Because any type of
companies can enter in the business ,as it is possible to get trade licenses from government .
There are a number of possibility for new organization to grab the market easily.

9.4. Threats of substitutes(High):

In PRAN group the threats of the substitutes are very high. Because there is Akij group, BD
foods, Square etc other organization. They are producing same products . So if the PRAN group
is doing something unfair to the consumers ,the consumers can easily switch to the others
company .

9.5. Current Rivalry(High):

Current Rivalry is very much high in the PRAN group. As there are huge competitor of PRAN
group like Akij group, square group. Sojib group , BD food etc. so it is seen that the rivalry
amongst the current companies are very high.

10. Competitors of PRAN group:

After independence the food habit of Bangladeshi people has been changed a lot. Besides our
traditional food consumer of Bangladesh like to take western food also after 1980s. As a result of
global marketing this was not too hard for the consumers. Different foreign food companies were
established in Bangladesh. Beverage industry is one of them. But more interestingly we don’t
know beverage is also our cultural food because beverage doesn’t mean only carbonated drinks
Yoghurt, Soup and Lacchi are also beverage of our own tradition which consumed for the last
100 years in Bangladesh. Carbonated beverage entered into our market in the later part of 1980.
At that time there were only few companies in Bangladesh. But by the change of time and
western culture influences it’s become very popular in Bangladesh. At present 2000 more than
22 Beverage Company operating business in Bangladesh and most of them are foreign
companies. In this market there are several companies which are providing goods of the same
category. The main Competitors are given below:

Company name Company logo

Transcom Beverages Ltd.
Square Food & Beverage Limited
(SFBL)

Acme Food & Beverage Co.

Coca-Cola Far East Ltd.

(Bangladesh Branch).

Akij Food and Beverage Limited

ACI Foods Limited.

Abdul Monem Limited

Fu-Wang Foods Limited

Aziz Food Products Ltd

Bombay Sweets & Co. Ltd.

Sajeeb Group

Partex Beverage Ltd.

Ispahani Foods Limited.

IFAD Multi Products Ltd

11. SWOT Analysis :

In Bangladesh PRAN is one of the most successful company as well as organization. This group
is trying to achieve a good position in local and global market. So they have to analyze the
SWOT . SWOT analysis is planning tool used to analyze an organization strength ,weakness are
internal factor and opportunities, threats are external factor . The SWOT analysis of PRAN
group is given below :

11.1. Internal strength :

 Risk polling factor

 Large company and organization
 Experiences
 Superior sources of finance
 Better control over Raw material
 Financial support
  Vast distribution network
 Good reputation

11.2. Internal weakness :

 Unequal promotions strategy

 Lack of first mover’s advantages.
 Lack of good control
 A lot of distance and a huge amount of transport cost
 Internal promotion
 Internal media planning
 Unpreserved item
 Limited product range

11.3. External opportunities:

 Demand in global market

 Large demand in local market
 Domestic natural resources
 Cheap labor
 Ethnocentrism
 Government incentives
 Cash incentives
 VAT

11.4. External Threats:

 Huge competition
 Competition in market price
 Lack of benefits
 Strict health and technical standard
 Changing choice of customer
 Foreign competitor
 Weak distribution
 Changing market
 Strength Weakness

Opportunities Threats

Strength:

1. Brand image: Firstly, PRAN has stayed in the local market in Bangladesh for many years.
So they are so experienced and stationed in people’s mind deeply. Everyone in Bangladesh is
aware of PRAN. PRAN portrays different kinds of products which are already exist in the
market and people like it. So there is strong brand preference for PRAN over other
substitutes in the mind of a number of consumers.

2. Superior quality control measures: PRAN maintain and control the superior quality of the
product. It is the policy of agricultural marketing company limited to market products of
consistent quality at home and abroad as per would standards produced by in accordance
with good manufacturing practices.

3. Integrity: PRAN believes success depends upon the quality and value of their products by
providing a safe, wholesome economically efficient and a healthy environment for their
customers and by providing a fair return to their investors while maintaining the highest
standards of integrity.

4. Market share: Because of the variety of the product PRAN leads in the share market and
increasing the market share.

5. Customer satisfaction: Whenever PRAN exist in the market, that time customer consumed
their product. They launch different kinds of product and the price of the product is
measurable. So the customer satisfied with the PRAN product.

Weaknesses:
1. Limited decision taking capacity: The PRAN Company exists under the rules and
regulation of agricultural marketing company limited. So PRAN cannot take any instant
decision to adjust the sudden market changes.

2. Price disadvantage: Sometime price of the product may be varying because of raw
material. Because of the price of the raw material which is also the key ingredient of their
product line, is comparatively expensive than that of their competitors in Bangladesh
especially the emerging ones. So this makes them sell their products at a higher cost than
most of their competitors.

3. Lowest per capita consumption: Bangladesh has the lowest per capita consumption in the
entire world. So upper class and middle class can bear the PRAN product but the lower class
people cannot bear it.

4. Lack of geographical coverage: Sometime the PRAN product cannot reach in the definite
geographical area because of lack of communication.

Opportunities:

The main opportunities, facing by the PRAN Food Company’s product line are as follows:

1. The agriculture sector is the largest contributor to GDP. So PRAN produced canned fruit
and vegetables, mushrooms etc and it is the part of agriculture. So it’s an opportunity to
contribute to GDP.

2. The crop production system is highly labor intensive and there is an abundance of labor in
the country.

3. Through the production of the PRAN product the employment opportunity are increased in
Bangladesh.

4. Through the production of the good product there is a great opportunity to attract the
foreign investors.

5. Company can develop the effective distribution system.

6. PRAN Company can make survey to make effective product.

Threats:

Every company faces threats when they newly enter into market or for the existing company.
Threats facing the PRAN Food Company are as follows:

1. PRAN has many competitors which are marketing dairy products. It has a strong
competitor (Arong) in producing Chocolate Milk.
 2. Uprising commodity price is also a threat for the product in newly introducing into the
market.

3. Bangladesh government may establish a stringent product safety law, which would entail
product redesign work.

4. PRAN mainly produced the agro- based product and most of the products are perishable.
So it has to be preserved system.

5. And finally Current political unstable situation may affect the new product launching
activities.

12. Corporate values of PRAN group:

 Consumer Care:

We view our consumers as our king and we are their laypeople. Our consumers have given us
such success for so long years. So, we care about our consumers. Consumer care is the process
by which we endorse consumers’ satisfaction and moreover, loyalty. Primarily, it grips managing
communication with consumer particularly consumers’ questions and complaints and resolving
disputes amicably. Eventually the goal of our consumer care program is to build long-term
relationship. To meet this goal, we will go to great lengths to build a strong reputation for
lavishing our consumers with special services, discounts, gifts and other benefits.

It’s our great honor to communicate with our consumers. So, we humbly request our consumers
to feel free to communicate with us regarding following issues:

 Complaint for our products

 Price information
 Benefits of products
 Comments for products
 Any other issues

Objectives that we seek through our consumer care are:

 To create a culture of customer focus

 To receive complaints from our consumers on product related matters
 To achieve customer satisfaction
 To create rapport and loyalty

We provide the easiest way of communication as we care valuable time of our consumers.
Consumers can communicate with us through:

 Supplier Care:
Our native farmer is our supplier. We collect major portions of our raw materials from them. We
give values to their activities. Most of our farmers were deprived of proper price for their
produces. We have been helping them to overcome this situation by practicing contract farming.
Now we are the pioneer and the largest contract manufacturer in Bangladesh. We care our
suppliers in the following ways:

 By providing them good seeds, fertilizers, insecticides etc.

 By providing financial supports.
 By providing proper information about what to produce more and what to produce less.
 By collecting their produces in right time and storing them.
 By collecting raw materials directly/right from them and saving them from middle men.
 By creating a huge demand of our farmers’ products both in nationally and globally.
 By ensuring proper price for their produces.

 Employee Care:
 Our employees are our best resource. We give values to our employees’ creativity and
innovation. Our culture begins with our four values that drive everything we do:
Integrity, Continuous Innovation, Involvement and Self-respect. We help our employees’
growth. We give them proper training and development. We encourage employees to ask
questions and make suggestions that they think better.
 We are the one amongst the few in Bangladesh who has a culture of profit sharing
management. Our employees are dedicated to the success of our business. We treat our
employees as a core resource and family member.

 Trade Care:

Our trade partners are our great support. Through them, we reach to our ultimate consumers.
They provide support to our entire our promotional activities and merchandising program. We
care for our trade partner.

Now, we have a customer care wing to listen to them. We aim to build a strong long term
business relationship by taking them through the journey of relationship disposition funnel and
expect them to become our advocates in our Business.

We care about their needs in the following ways:

 By giving product in right price, right quality, at right time and trade benefit.
 By giving them special service like upcoming demand trends.
 By giving them sample products.
 By giving them promotional sales competition.
 By giving product replacement opportunity for any damaged or expired product.

Moreover, at distributors business area, we arrange TRADE MEET where we give them proper
training about how to handle their demand and supply management in their area.
We have recently started PCC (PRAN Customer Care) where our trade partners can talk directly
by making phone call to a unique number. We will support them in the following ways:

 By listening to product complaints.

 By providing information about price of product.
 By giving information about address of dealer point.
 By giving proper solution for any unwanted situation associated to our business.

13. Corporate Social Responsibility:

The idea of corporate social responsibility is being widely promoted all over the world and
rightly so. Here is a corporate whose corporate mission embodies in itself corporate social
responsibilities with the additional compulsion to make profits in order to thrive and grow which
it must to fulfill its corporate social responsibilities in greater measure as time passes. PRAN has
a bifocal objective of making profits through the fulfillment of corporate social responsibilities.
PRAN is a concept: away to fight poverty & hunger in Bangladesh in the shortest possible time
through employment generation.

PRAN signifies investment in agro processing: creating demands for farm produce which create
jobs in rural areas also preventing urban migration. PRAN’s aim to add value to agricultural
harvest.

Bangladesh’s comparative advantage lies in creating a competitive edge in value added

agricultural products. This is what PRAN stands for.

The Group’s major achievement has been trying to consolidate fragmented land holdings and
organizing farmers into ‘contract growers’ of specific crops for consumption in PRAN’s major
processed products. With the elimination of the middlemen, farmers receive fare prices for their
products and due to technical assistance from the agro-processing industry; yields, quality and
income have risen considerably. Poverty alleviation through profitable enterprises is now a
reachable goal for many farmers. This resolution is perhaps PRAN’s greatest achievement.

We know that the success of our business relies on a healthy environment. We’re doing all we
can to be good a steward of our planet’s resources.

Our CSR effort revolves around the four premises like: Environment, Energy Preservation,
Community & People to improve the quality of livelihood:

13.1. Promises To The Environment:

Community forestation: In different locations around Bangladesh, we are planting trees to save
our GREEN PLANET.
Effluent Treatment Plant (ETP): To ensure safe disposal of factory wastage, we have got
ETP’s in all the establishments of our Group.

Heat Recovery Boiler: We recover the heat to save energy that we produce and utilize in our
production facilities in all locations.

13.2. Promises to The Energy Preservation:

We use:
SKY-Light Roof to utilize daylight during factory operation. CFL Bulbs at our Factories and
offices to reduce Power Consumption Powered Trucks to reduce Air Pollution and usage fossil
fuel for all vehicles.

13.3. Promises to the Community:

Dairy Development:

 To develop the dairy industry in Bangladesh, PRAN has started Dairy Hub operations in
Bangladesh at its own cost where we are organizing farmers, counseling for raring of
dairy and providing cattle food, Artificial Insemination and other veterinary support to
the farmers to increase the dairy yields.

Education Development:

 PRAN is promoting education and supporting several schools in their operations

improving the salary of the teachers and staffs, providing books, arranging special
coaching for the students.

Other Social Support:

 Helping Mosque, Temple and Churches.

 Working together with Red crescent.
 Collecting and donating blood.
 Working for the disabled.
 Working with ‘SAVE THE CHILDREN’.

14. External Environmental Analysis of PRAN Group:

External factors refers some factors that manager can’t change. These factors impact each
business and industry differently, which only increases the importance of managers
understanding these external forces. Some external factors of PRAN group are:

14.1. Political:

Every organization has faces political issues and factors .political forces do not only exist in the
home country of a business it’s also in foreign country. PRAN must be aware of the political
pressure in Bangladesh as well as the abroad for their success and makes them attractive in the
market. PRAN Foods is the largest consumer goods producing industry in Bangladesh so
political decisions have a great impact on their business. Generally, consumer goods industry is
not that much regulated in Bangladesh and imposed taxes and other duty charges are lower than
the other sectors. However, political unrest hampers transporting goods, raise price of raw
materials and overall production. For an example; the recent political crisis in Bangladesh is
posing great threat to the overall consumer foods industry. Due to the scarce transportation
availability, PRAN Foods can neither collect required raw material to produce the foods nor can
distribute the produced goods. The political and legal environment can affect the whole
economy.

14.2. Economical:

PRAN group has a great achievement of our national economy. It’s sell their product not only in
our country but also in abroad and bring huge amount of foreign currency. PRAN creates more
job sectors. It provides high quality of product at reasonable price that makes our life joyful and
comfortable. If we look into the recent economic reviews, it’s clear that Bangladesh can hardly export
any commodities because of the recent political unrest. It has an overall impact on the whole economy.
Political environment is a crucial part in business. Every Business operates through their very own
systematic approach in designing, creating and delivering products. For big companies like PRAN Foods
limited, Negative political environment hampers day to day business operations at almost every aspect.

Economical
Political
Social

PRAN

Group

Legal
Technological

Environmental

Chart: PESTEL Analysis of PRAN group.

14.3. Legal:

Country laws can be direct impact on PRAN though the product and service becomes highly
regulated. Government regulations such as those that affect the environment or communication
are beyond their control and could have a direct impact on their business. In the past there
weren’t many laws concerning the consumer goods but lately every business organization are
bound to follow some laws. PRAN Foods exports goods to numerous countries spread over Asia,
Africa and North America and as such they need to abide by the respective laws of the country.
However in Bangladesh few laws that PRAN Foods and other similar companies need to keep in
mind are- THE PURE FOOD ORDINANCE, 1959 This law states that adulteration of food
products is an offence and that the offender shall be face minor penalties for it. This law clearly
stipulates the protection to the consumers and forces producers to produce edible goods under
proper supervision.

14.4. Environmental:

Every company have must face competition in the business market. PRAN has many competitors
like Akij food and beverage, BD foods ,square ,sajeeb group, Monem group ,ACI etc . For
making profit and hold the customer PRAN group provides better quality product than the
competitors.

14.5. Social:

PRAN always try to maintain their social responsibility for a beautiful country. They participate
in many social events like sports, sponsor, makes helping fund for the people who are effected by
natural disaster, donate scholarship for the poor student ,and organize different cultural program
for the society .

14.6. Technological:

People of different ages are the customer of PRAN product. All of the customer satisfaction
depends on the different technique. Basically all kind of people like rich, top, poor are the
customer of PRAN product .Because PRAN has various kinds of product. Different ages of
people likes PRAN juice, chocolate, sauce, soft drinks etc. PRAN provides quality product to the
customer with regular service. PRAN is the most popular brand in our country that’s why they
should bring more and more up-date technique in the organization for better customer
satisfaction.

15. Internal Environmental Analysis of PRAN Group:

The managers of PRAN group can strongly control the internal factors . These factors are affect
how well a company meet their objective. They believe that they must be seen as strong if they
have a favorable impact on business. The internal factors are:
15.1. Finance:
One of the important departments of PRAN-RFL Group situated in the corporate headquarter of PRAN-
RFL Group. This department deals with all the financing activities of this company. Their work
surrounded with loan, lease, accounts of different banks etc. According to requirement there would be
exclusion or inclusion of activities but major activities are given below.

 Negotiation with the banks and leasing companies.

 Checking the bank accounts and following different procedures.
 Feasibility report on future project as required by bank.
 Preparing credit rating report which also the requirement of the leasing companies and bank.
 Preparing monthly report which is called “BD report” on the different loan and lease agreement
facilities enjoyed by PRAN-RFL Group from the domestic and international financial institutions,
existing balance and utilization of funds, outstanding funds etc.
 Preparing the Required document needed by banks or other financial institutions time to time.
 Making liaison with Bangladesh Bank or other governing authorities.
 Major decisions taken by the department:

a) Capital Structuring decision

b) Capital Budgeting Decision

c) Working capital decision

 Seek for newer ways of cheaper fund and alternative ways to minimize cost.

15.2. Marketing:
In our marketing department we have a group of creative professionals who apply innovative and
sustainable strategies to increase the market share of our company. Our marketing team is actively
involved in product campaign, brand awareness, publicity and sales promotions in order to reach out to
new and existing customers. Some of the key functions our marketing team provides are brand
development, opportunity assessment, market research & segmentation, communication planning and
public relations. We have three main units in our marketing department, which are- Branding, Events and
Design. We provide ample opportunities and resources to our members of marketing team so that they
can show their skills and creativity to the fullest.

15.3. Supply chain management:

We use an advanced and highly effective supply chain management system in our company. Our supply
chain management team carries out various functions such as- supply & capacity planning, procurement,
inventory control, and materials management in order to provide the needs of our suppliers and
customers. Our team members of supply chain management perform in a collaborative work environment
where they can utilize their skills and unlock their potentials. We encourage our team members to provide
excellence in service through innovative ideas and continuous improvement.

15.4. Human resource management:

PRAN human resources department plays a significant role to manage our enormous workforce
containing over 27,000 members. We have an empowering work environment in our organization where
each and every team members consider themselves as leading contributors. Our recruitment team does an
excellent job finding the potential candidates for our organization. Personnel team provides various
services to our employees such as- payroll maintenance, employee database, compensation, benefits,
rewards and incentives. Training team is involved with organizing various training programs so that we
can develop more talents within our origination. The purpose for training program is to nurture the work
skills of our employees and to motivate them to perform well.

15.5. Human resource Development:

PRAN human resources development department plays a vital role On the job training. They provide
job instructions training, presenting the instruction, preparing the trainees, placing the workers
into job. They also manage new employee training, Mid management level training program,
sales training, Factory training, store management training, office assistant training, supervisor
training, Material management training and so on .

15.6. Sales Department:

As a sales oriented company, one of our primary focus is to ensure the efficiency of our sales
operations. We have a talented group of individuals in our sales team who understands the needs
of our customers, develops effective solutions for problems and creates an impact by delivering
quality products and services. Our sales team is involved with various sales related functions
such as- Direct sales, Secondary Sales & Institutional Sales. This team works under the direct
supervision of our mentors. Effective training on sales as well as customer service management
makes this force competent & result focused. Meeting our sales goals & achieving the result
relies on the competency of our sales team.

15.7. Management information system:

PRAN Group MIS resources (such as Desktop PCs, Notebooks, Servers, Printers, Software,
Network Folders and Network Resource, etc) are primarily to be used for business related to
PRAN Group. Any private use that might limit PRAN Group business ( Bandwidth , Storage,
etc) interest, which should be avoided. Users are allowed to use only PRAN Group MIS
provided hardware. They are not allowed to use any personal computer equipment (Like
CD/DVD ROM or Writer, sound system, removable disk drive etc.). Any information related to
PRAN Group business is to be processed and stored on MIS approved equipments. Exception to
this rule can only be accord by Chief of MIS.
15.8. Level of management:

There are three level of management in PRAN group those are vertically structured :

 Operational level: PRAN group spend more time in directing and controlling that’s
involve in operational level management. PRAN group operational level management
consist the middle level management that is also called supervisory level or First Line
management.
 Technical level: PRAN group is greatly influenced by the IT development. This
technical level management consist of departmental head , branch manager and the junior
executive of information and technology department .
 Strategic level: This is the top level of PRAN group. This management consist of the
board of directors. The success and failure of the organization largely depends on the
board of director because they are the representative of the shareholders.

15.9. Organizational culture:

The culture of the PRAN group is committed to their customer and their responsibility. PRAN
group is a democratic organization. Here every employee can explain their comments freely. The
management level is vertically structured.

15.10. Competitive situation:

PRAN is a company that’s always try to express the situation in a way that everyone can assess
how competition will develop in the future and how one company is going to be a successful
organization. They also try to compare with other competitive company and their product.
 Topic

Part
1. Working capital:
1.1. Meaning of Working Capital Management:

Working capital sometimes called gross working capital, simply refers to the firms total current assets (The short-
term ones), cash, marketable securities, account receivable and inventory. While long-term financial analysis
primarily concerns strategic planning, working capital management deals with day-to-day operations. Working
capital is calculated as:

Working Capital = Current Assets - Current Liabilities

The working capital ratio (Current Assets/Current Liabilities) indicates whether a company has
enough short term assets to cover its short term debt. Anything below 1 indicates negative W/C
(working capital). While anything over 2 means that the company is not investing excess assets.
Most believe that a ratio between 1.2 and 2.0 is sufficient. Also known as "net working capital.”
By making sure that production lines do not stop due to lack of raw materials, that inventories do not build up
because production continues unchanged when sales dip, that customer pay on time and that enough cash is on
hand to make payments when they are due. Obviously without good working capital management, no firm can be
efficient and profitable.

1.2. Types of Working Capital:

Following diagram clear the classification of working capital Acceding to the needs of business,
the working capital may be classified into following two basis:

1) On the basis of time.

2) On the basis of concept.

1.2.1. On the basis of time:

The requirements of working capital are continuous. More working capital is required in a
particular season or the peck period of business activity. On the basis of periodicity working
capital can be divided under two categories as under:

 Permanent working capital

 Variable working capital
 Working Capital

Basis of Basis of

Concept Time

Gross working Net Working Permanent Temporary

capital Capital /Fixed working /Variable
capital working capital

Seasonal
Regular Reserve working Special
working capital working
working
capital capital
capital

 Permanent working capital:

This type of working capital is known as Fixed Working Capital. Permanent working capital
means the part of working capital which is permanently locked up in the current assets to carry
out the business smoothly. The minimum amount of current assets which is required to conduct
the business smoothly during the year is called permanent working capital. For example,
investments required to maintain the minimum stock of raw materials or to cash balance. The
amount of permanent working capital depends upon the size and growth of company. Fixed
working capital can further be divided into two categories as under:

(I) Regular Working capital: Minimum amount of working capital required to keep the
primary circulation. Some amount of cash is necessary for the payment of wages, salaries etc.

(II) Reserve Margin Working capital: Additional working capital may also be required for
contingencies that may arise any time. The reserve working capital is the excess of capital over
the needs of the regular working capital is kept aside as reserve for contingencies, such as strike,
business depression etc.

 Variable or Temporary Working Capital:

The term variable working capital refers that the level of working capital is temporary and
fluctuating. Variable working capital may change from one assets to another and changes with
the increase or decrease in the volume of business. The variable working capital may also be
subdivided into following two sub-groups.

(I) Seasonal Variable Working capital: Seasonal working capital is the additional amount
which is required during the active business seasons of the year. Raw materials like raw-cotton
or jute or sugarcane are purchased in particular season. The industry has to borrow funds for
short period. It is particularly suited to a business of a seasonal nature. In short, seasonal working
capital is required to meet the seasonal liquidity of the business.

(II) Special variable working capital: Additional working capital may also be needed to
provide additional current assets to meet the unexpected events or special operations such as
extensive marketing campaigns or carrying of special job etc.

1.2.2. On the basis of concept:

On the basis of concept working capital is divided into two categories as under:

 Gross Working Capital

 Net Working Capital
  Gross Working Capital:

Gross working capital is the total amount of a company's current assets. It includes cash on hand,
accounts receivable, inventory and short-term investments. Liabilities are not included in this
calculation, so gross working capital offers only a limited description of a company's financial
status. Gross working capital refers to total investment in current assets. The current assets
employed in business give the idea about the utilization of working capital and idea about the
economic position of the company. Thus, gross working capital the amount of funds invested in
different current assets. Gross working capital concepts is popular and acceptable concept in the
field.

 Net Working Capital:

Net working capital is a more accurate and complete measure of the liquidity health of a
business. It is calculated by adding up the firm's current assets-cash, short-term investments,
accounts receivable and inventory-and subtracting all of its current liabilities. (Working Capital
Ratio = Current Assets minus Current Liabilities) The difference between current assets and
current liabilities is called the net working capital. If the net working capital is positive business
is able to meet its current liabilities. Net working capital concept provides the measurement for
determining the creditworthiness of company.

1.2. Nature of working capital:

The management of working capital is concerned with two problems that arise in attempting to
manage the current assets, current liabilities and the inter relationship that asserts between them.
The basic goal is working capital management is to manage current assets and current liabilities
of a firm in such a way that a satisfactory of optimum level of working capital is maintained. it is
neither inadequate nor excessive. This is so because both inadequate as well as excessive
working capital position is bad for business. Working Capital Management is an Effective Tool
for Organizational Success that describes that working capital in a firm generally arises out of
four basic factors like sales volume, technological changes, seasonal, cyclical changes and
policies of the firm. The strength of the firm is dependent on the working capital as discussed
earlier but this working capital is itself dependent on the level of sales volume of the firm. The
firm requires current assets to support and maintain operational or functional activities. By
current assets we mean the assets which can be converted readily into cash say within a year
such as receivables, inventories and liquid cash. If the level of sales is stable and towards growth
the level of cash, receivables and stock will also be on the high.

1.3. How working capital works:

Cash is the lifeline of a company. If this lifeline deteriorates, so does the company's ability to fund
operations, reinvest and meet capital requirements and payments. Understanding a company's
cash flow health is essential to making investment decisions. A good way to judge a company's
cash flow prospects is to look at its working capital management (WCM).Cash is king, especially
at a time when fund raising is harder than ever. Letting it slip away is an oversight that investors
should not forgive. Analyzing a company's working capital can provide excellent insight into
how well a company handles its cash, and whether it is likely to have any on hand to fund growth
and contribute to shareholder value.

1.4. Impact of Working Capital Management Policies on Corporate

Performance:

It is felt that there is the need to study the role of working capital management policies
on profitability of a company. Conventionally, it has been seen that if a company desires to take
a greater risk for bigger profits and losses, it reduces the size of its working capital in relation to its
sales. If it is interested in improving its liquidity, it increases the level of its working capital. However, this
policy is likely to result in a reduction of the sales volume, therefore of profitability. Hence, a
company should strike a balance between liquidity and profitability.

2. Major Decision in Working Capital Management:

There are two major decisions management relating to working capital management:-
1. What should be ratio of current assets to sales?
2. What should be the appropriate mix of short term financing and long term financing for
financing these current assets?

2.1.Current assets in relation to sales:

If the firm can forecast accurately the factors, which effect the working capital, the investment in
current assets, can be designed uniquely. When uncertainty characteristics the above factors ,as it
usually does the investment in current assets cannot be specified uniquely. In case of uncertainty,
the outlay on current assets should consist of base component meant to meet normal requirement
and a safety component meant to cope with unusual requirement. The safety component depends
upon low conservative or aggressive in the current assets policy of a firm. If the firm purchases a
very conservative current asset policy it would carry a high level of current assets in relation to
sales. If a firm adopts a moderate current assets policy it would carry moderate level of current
assets in relation to sales, finally is a firm follows a highly aggressive current assets policy, it
would carry a low level of current assets in relation to sales.
2.2.Determining a short term and long term financing Mix for financing of current assets:

There are three approaches in this regard which are:

2.2.1. Hedging Approach:

This approach is also called matching approach. In this approach there is a proper matching of
expected life of asset with the duration of fund. Usually according to this approach long-term
sources are used for financing permanent current asset and fixed asset. On the other hand short-
term sources are used for financing temporary current asset.

Temporary current asset Short-term Financing

Assets S Long-term financing

E Permanent current asset

Time

2.2.2. Conservative approach:

In this approach there is more reliance on long-term financing than short-term financing. Even
some part of the temporary current comparison to finance from long-term sources because long
term sources are less risky in comparison to short-term sources.
 Temporary current asset

S Short-term financing

Fixed S

Asset E

Long-term financing

Permanent current asset

Time

2.2.3. Aggressive approach:

In this approach there is more reliance on short-term financing and even a part of permanent
current assets is financed from short-term finance.

Temporary current asset

Short-term financing

Fixed S

Asset S

T Permanent current asset Long-term financing

Time
3.Working capital management of PRAN group:
In PRAN Group, the current assets are financed from short term sources as well as long term
sources, so they follow conservative approach. They calculate working capital six months and 1
year later. PRAN group maintain a chart of A/C. From supply chain management department
they check purchase requisition and after that they collect purchase order. This product orders
are going to the store keeper and then GRM (goods receiving notes) are given to make MRR
(material receiving report). From this situation Finance and accounting department are create the
code number of the product and all types of transaction. All the data and information are control
through automation system. By this automation system day to day assets and liabilities are input
in the software. They input these data by using some main code. These are:

 (1) For Assets

 (2 ) For Liabilities
 (3) For Incomes
 (4 )For Expenses
By using this type of code they collect their data for further working capital calculation. They
calculate their working capital and most of the amount they invest to purchase raw material and
foreign product.

4. Cautions about Ratio Analysis:

Before discussing specific ratios, we should consider the following cautions:

 A single ratio does not generally provide sufficient information from which to judge the
overall performance of the firm.
 Be sure that the dates of the financial statements being compared are the same.
 It is preferable to use audited financial statements for ratio analysis.
 Be certain that the data being compared have all been developed in the same way.

5. Groups of Financial Ratios:

Financial ratios can be divided into four basic groups or categories:

1. Liquidity ratios

2. Activity ratios

3. Debt ratios &

4. Profitability ratios
Liquidity, activity, and debt ratios primarily measure risk; profitability ratios measure return. In
the near term, the important categories are liquidity, activity, and profitability, because these
provide the information that is critical to the short-run operation of the firm. Debt ratios are
useful primarily when the analyst is sure that the firm will successfully weather the short run.

 Analyzing Liquidity:

The liquidity of a business firm is measured by its ability to satisfy its short-term obligations as
they come due. Liquidity refers to the solvency of the firm & overall financial position. The three
basic measures of liquidity are-

1. Net Working Capital: Net Working Capital, although not actually a ratio, is a common
measure of a firm’s overall liquidity .A measure of liquidity calculated by subtracting total
current liabilities from total current assets.

Net Working Capital = Total Current Assets- Total Current Liabilities.

2. Current Ratio: One of the most general and frequently used of these liquidity ratios is the
current ratio. Organizations use current ratio to measure the firm’s ability to meet short-term
obligations. Current assets divided by current liabilities. It shows a firm’s ability to cover its
current liabilities with its current assets.

Current Ratio = Current Assets / Current Liabilities

3. Quick Ratio/Acid Test: A measure of liquidity calculated by divining the firm current assets
minus inventory by current liabilities. The quick ratio provides a greater measure of overall
liquidity only when a firm’s inventory can’t be easily converted into cash.

Quick Ratio/ Acid Test = (Current Assets – Inventory) / Current Liabilities

 Analyzing Activity:

Activity ratios measure the speed with which accounts are converted into sale or cash. With
regard to current accounts measures of liquidity are generally inadequate because differences in
the composition of a firm’s current accounts can significantly affects its true liquidity. A number
of ratios are available for measuring the activity of the most important current accounts which
includes inventory, accounts receivable, and account payable. The activity (efficiency of
utilization) of total assets can also be assessed.

1. Inventory Turnover: Inventory turnover commonly measures the activity, or liquidity, of a

firm’s inventory. It is calculated as follows:

Inventory Turnover = Cost of Goods Sold / Inventory

2. Average Collection Period: Average collection period is useful in evaluating credit and
collection policies. It is arrived at by dividing the average daily sales into the accounts receivable
balance:

Average Collection Period = Accounts Receivable/Average Sales per Day.

= Accounts Receivable/ (Annual Sales/360)

3. Average Payment Period: The Average Payment period is calculated in the same manner as
the average collection period: Average Payment Period =Accounts Payable/Average Purchases
Per Day.

= Accounts payable / (annual purchases /360)

4. Fixed Assets Turnover: The fixed asset turnover measures the efficiency with which the firm
has been using its fixed assets to generate sales. Fixed Asset Turnover = Sales / Net Fixed Assets

5. Total Asset Turnover: The total asset turnover indicates the efficiency with which the firm is
able to use all its assets to generate sales. Total Asset Turnover = Sales/Total Assets

 Analyzing Debt: The debt position of the firm indicates the amount of other people
money being used in attempting to generate profits. In general, the more debt a firm uses
in relation to its total assets, the greater its financial leverage, a term used to describe the
magnification of risk and return introduced through the use of fixed-cost financing such
as debt and preferred stock.

1.Debt Ratio: The debt ratio measures the proportion of total assets provided by the firm
creditors.

Debt Ratio = Total Liabilities / Total Assets

2. Debt-Equity Ratio: The debt-equity ratio indicates the relationship between the long-term
funds provided by creditors and those provided by the firm owners.

Debt-Equity Ratio = Long-Term Debt/Stockholder Equity

3. Time Interest Earned Ratio: The Time interest Earned Ratio measures the ability to meet
contractual interest payments.

Time interest Earned Ratio = EBIT / Interest

4. Fixed-Payment Coverage Ratio: The Fixed-Payment Coverage ratio measures the ability to
meet all fixed-payment obligations.
Fixed-Payment Coverage Ratio = EBIT / Interest + {(Principal Payments +Preferred Stock
Dividend) X [1/ (1-T)}.

 Analyzing Profitability: There are many measures of profitability. As a group, these

measure evaluate the firm’s earnings with respect to a given level of sales, a certain level
of assets, the owners’ investment, or share value. Without profits, a firm could not attract
outside capital. Moreover, present owners and creditors would become concerned about
the company’s future and attempt to recover their funds. Owners, creditors, and
management pay close attention to boosting profits due to the great importance placed on
earnings in the marketplace.

1.Gross Profit Margin: The gross profit margin indicates the percentage of each sales dollar
remaining after the firm has paid for its goods. The higher the gross profit margin the better, and
the lower the relative cost of merchandise sold. The gross profit margin is calculated as follows:

Gross Profit Margin = (Sale-Cost of Goods Sold)/Sales= Gross Profits / Sales.

2. Operating Profit Margin: The Operating Profit margin represents what are often called the
pure profits earned on each sales dollar. A higher operating profit margin is preferred. The
operating profit margin is calculated as follows:

Operating Profit Margin = Operating Profit / Sales

3. Net Profit Margin: The net profit margin measures the percentage of each sales dollar
remaining after all expenses, including taxes, have deducted. The higher the firm net profit
margin is better. The net profit margin is a commonly cited measure of the corporation success
with respect to earnings on sales. The operating profit margin is calculated as follows:

Net Profit Margin = Net Profit after Taxes / Sales

4. Return on Investment (ROI): The Return on investment (ROI), which is often called the
firm return on total assets, measures the overall effectiveness of management in generating
profits with its available assets. The higher the ratio, the better

Return on Investment (ROI) = Net Profit after Taxes / Total Assets

5. Return on Equity (ROE): The Return of Equity (ROE) measures the return earned on the
owner (both preferred and common stockholders)investment. Generally, the higher this return,
the better off the owner.

Return on Equity (ROE) = Net Profit after Taxes /Stockholders Equity

6. Earning Per Share (EPS): The firm’s Earning per share (EPS) are generally of interest to
present or prospective stockholders and management. The Earning per share represent the
number of dollars earned on behalf of each outstanding share of common stock. The Earnings
per share is calculated as follows:

Earning Per Share = Earnings Attributable to the Ordinary Shareholder /Weighted Average
Number of Ordinary Shares Outstanding During the Years

7. Price or Earning Ratio (P/E): The Price or Earning (P/E) ratio is commonly used to assess
the owner’s appraisal of share value. The P/E represents the amount investors are willing to pay
for each dollar of the firm’s earnings .The higher the P/E ratio, the greater investor confidence in
the firm’s future. The Price or Earning (P/E) ratio is calculated as follows:

Price or Earning (P/E) = Market Price per Share of Common Stock / EPS.

The key concern of the liquidity ratios is the firm’s ability to meet the short-term financial
obligation without undue pressure. These ratios emphasize on the current assets and current
liabilities to quickly convert the assets to cash. The financial analysis of PRAN group is given
below:

6. Fundamental Ratio Analysis of PRAN group (AMCL):

6.1. Current Ratio:

The current ratio compares a company’s liquid assets with short-term liabilities. That means the
ability of the company to pay the short term liabilities with the current assets such as accounts
receivables, cash etc. The higher the current ratio, the more liquid the company is. The ideal
current ratio is 2:1.

Current Asset
Current Ratio =
Current Liabilities
Particulars 2013 2014 2015 2016 2017
Current 798192332 754101724 847630021 914631456 988827887
Assets
Current 565399521 541239463 539485923 697532212 725833666
liabilities
Current 1.41 1.39 1.57 1.31 1.36
Ratio

Table.5.1: Current ratio

Current Ratio
1.6
1.5
1.4
1.57 Current Ratio
1.3
1.41 1.39 1.36
1.2 1.31
1.1
2013 2014 2015 2016 2017

Chart.5.1: Current ratio

Interpretation:
AMCL current ratio was 1.41 in 2013 and it decreased slightly to 1.39 in 2014. The ratio decreased
because both the current assets and current liabilities went down. However, there was a greater increase in
current assets than the current liabilities due to which the current ratio improved. In 2015 .Current ratio
increased in 2017 by 2% in comparison to 2016. The current liabilities has increased from the previous
year but as the current assets experienced a greater increase as against the current liabilities, the impact on
the current ratio was not that negative. Since the current ratio remained above 1 throughout the five years,
it can be assumed that AMCL did not face any problems meeting their short term liabilities. And it was in
2015 that AMCL reached the ideal current ratio of 2:1, which is regarded as desirable for a healthy
business.

6.2. Quick Ratio:

A reliable test of liquidity is the quick ratio test that excludes inventory from current asset. It
considered the ability to use its quick assets to pay its current liabilities. This approach can be
acceptable since inventory of many companies cannot be quickly converted into cash. The ideal
quick ratio is 1:1.

Current Assets – Inventory

Quick Ratio =
Current Liabilities

Particulars 2013 2014 2015 2016 2017

Current 798192332 754101724 847630021 914631456 988827887

Assets

Inventories 549659858 515560213 536252303 569968380 547968661

Current 565399521 541239463 539485923 697532212 725833666

liabilities

Quick Ratio 0.44 0.44 0.58 0.49 0.61

Table .5.2.: Quick Ratio

 Quick Ratio
0.7

0.6

0.5

0.4

0.3 0.61 Quick Ratio

0.58
0.49
0.2 0.44 0.44

0.1

0
2013 2014 2015 2016 2017

Chart.5.2: Quick Ratio

Interpretation:
From the above table, it can be seen that the quick ratio of AMCL varied time to time. The quick
ratio was.44:1 in year 2013 and it remains same in 2014.But in 2015 it increases in .49:1. But in
the last year it comes in the .61:1. There had been an increasing trend in current assets, current
liabilities and inventory yet massive increase in inventory affecting more for the huge percentage
decline. Inventory might be increased as a result of customer demand of the product in the
market. However, in 2013 and 2017 AMCL quick ratio were almost close to the ideal quick ratio
1:1, which indicates AMCL was not highly dependent to pay their liabilities on inventory and
they were efficient to manage their cash. On the other hand, in 2015 and 2017 the ratio increased
from the ideal one that happened because the company may kept huge amount of cash on hand or
had a problem in inventory management or accounts receivable management.

6.3. Debt to Equity Ratio:

The debt to equity ratio compares a company's total liabilities to the total shareholders' equity.
This is a measurement of how much suppliers, lenders and creditors have committed to the
company against the shareholders have committed. The standard debt to equity ratio is 1:1. The
lower the ratio, lower the debt and higher the equity of shareholders.

Long term Debt

Debt-to-Equity Ratio =
 Stockholders’ Equity Capital

Particulars 2013 2014 2015 2016 2017

Total debt 676066379 608843975 988660691 914819365 889235703

Total 457103264 487066242 517050961 544449120 573786537

stockholders’
equity

Debt-to- 1.48 1.25 1.91 1.68 1.55

Equity Ratio

Table: Debt –to-Equity ratio

Debt-to-Equity Ratio
2.5

1.5
Debt-to-Equity Ratio
1 1.91
1.68 1.55
1.48
1.25
0.5

0
2013 2014 2015 2016 2017

Chart: Debt-to-Equity ratio

Interpretation:

The table shows that the debt to equity ratio of AMCL had a decreasing trend from year 2013 to
2014 which are respectively 1.48, 1.25. Both the debt and shareholder’s equity went up in these
years but there were greater improvement in shareholder’s equity compare to debt. That means
AMCL had been efficient in financing its growth with its obligations. In 2015 the ratio was 1.91
which was increased than the previous year since AMCL borrowing cost increased in 2015 and
slightly decreased in next three year. AMCL debt to equity ratio is decreasing so their capacity of
debt financing is being increased. Nevertheless, it can be assumed that most of AMCL debts
consist of creditors and accruals so AMCL borrowing cost is insignificant as a consequence
AMCL is in good position.

6.4. Debt to Asset Ratio:

Debt to asset ratio shows the proportion of the assets that are financed with short term and long
term debt rather than equity and the ideal ratio in percentage is 0.4 to 0.5 times. Long term debt
can be deferred tax liabilities and short term debts are trade and other payables, bank overdraft,
provision for royalty etc. Lower the ratio, lower the amount of debt and most of the financing are
being covered by equity.

Total Debt
Debt-to-Asset Ratio =
Total Asset

Particulars 2013 2014 2015 2016 2017

Total debt 676066379 608843975 988660691 914819365 889235703

Total assets 1133169643 1095910217 1505711652 1459268485 1463022240

Debt-to- 0.60 0.57 0.66 0.63 0.61

Total-Assets
Ratio

Table: Debt-to-total assets ratio

 Debt-to-Total-Assets Ratio
0.7

0.65

0.6
0.66 Debt-to-Total-Assets Ratio
0.63
0.55 0.6 0.61
0.57
0.5
2013 2014 2015 2016 2017

Chart: Debt-to-total assets ratio

Interpretation:
The table shows that the debt to equity ratio of AMCL had a decreasing trend from year 2013 to
2014 which are respectively .6, 0.57. Both the debt and shareholder’s equity went up in these
years but there were greater improvement in shareholder’s equity compare to debt. That means
AMCL had been efficient in financing its growth with its obligations. In 2015 the ratio was
increased than the previous year. AMCL borrowing cost increased in 2015 and slightly decreased
from 2016 and 2017. Though 1:1 debt to equity ratio is preferable, AMCL debt to equity ratio is
decreasing so their capacity of debt financing is being increased. Nevertheless, it can be assumed
that most of AMCL debts consist of creditors and accruals so AMCL borrowing cost is
insignificant as a consequence AMCL is in good position.

6.5. Accounts Receivable Turnover Ratio:

Accounts receivable ratio is an activity ratio that measures how many times a firm can turn
accounts receivable into cash during a period. It measures how many times a company can
Collect average accounts receivable during a year. An efficient company’s collection period is
30 days. The lower the amount of uncollected cash, the higher this ratio will be and if a company
has more of the proceeds awaiting receipt, the lower the ratio will be.

Total Annual Sales

Account Receivable Turnover Ratio =
Account Receivable
Particulars 2013 2014 2015 2016 2017
Sales 1554446836 1727217669 1886505384 2091553854 2380335493

Account 58104684 74962348 83144358 118263356 140563639

Receivable

Account 26.75 23.04 22.69 17.69 16.93

Receivable
Turnover
Ratio

Table: Account Receivable Turnover Ratio

Account Receivable Turnover Ratio

30

25

20

15
26.75 Account Receivable Turnover Ratio
23.04 22.69
10
17.69 16.93
5

0
2013 2014 2015 2016 2017

Chart: Account Receivable Turnover Ratio

Interpretation:

AMCL accounts receivable turnover has a changing trend year to year. In 2013 AMCL accounts
receivable ratio was 26.75. Collection period increased during 2013 to 2015 and the ratios are
respectively 26.75, 23.04, 22.69 but 1n 2016 and 2017 it is decreased rapidly. It might be
happened because of the change in cash collection process that leads to an increase in average
accounts receivables every year. Yet, the collection period is below the standard ratio which is a
positive factor for the company.

6.6. Total Assets Turnover Ratio:

Asset Turnover ratio measures the value of a company's sales or revenues generated relative to
the value of its assets. The Asset Turnover ratio can often be used as an indicator of the
efficiency with which a company is deploying its assets in generating revenue.

Sales

Total Assets Turnover Ratio=

Total Assets

Particulars 2013 2014 2015 2016 2017

Sales 1554446836 1727217669 1886505384 2091553854 2380335493

Total Assets 1133169643 1095910217 1505711652 1459268485 1463022240

Total Assets 1.37 1.58 1.25 1.43 1.63

Turnover
Ratio

Table: Total Assets Turnover Ratio

 Total Assets Turnover Ratio
2

1.5

1
1.63 Total Assets Turnover Ratio
1.58 1.43
1.37 1.25
0.5

0
2013 2014 2015 2016 2017

Chart: Total Assets Turnover Ratio

Interpretation: The Total asset turnover ratio of AMCL in 2013 to 2017 is 1.37, 1.58, 1.25,
1.43, 1.63 respectively this remained almost constant. But in the last year the ratio is increased
into 1.63 that is more than the last four years. So AMCL should think about the total sales and
total assets. They should increase their sales for the improvement of rganization.

6.7. Working Capital Turnover Ratio:

Working capital turnover ratio indicates the velocity of the utilization of net working capital.
This ratio measures the efficiency with which the working capital is being used by a firm.

COGS or Sales
Working Capital Turnover Ratio =
Net Working Capital
Particulars 2013 2014 2015 2016 2017

Sales 1554446836 1727217669 1886505384 2091553854 2380335493

Working 232792811 212862261 308144090 217099244 262994221

Capital

Working 6.68 8.11 6.12 9.63 9.10

Capital
Turnover
Ratio

Table: working capital turnover ratio

Working Capital Turnover Ratio

12
10
8
6
9.63 9.1 Working Capital Turnover Ratio
4 8.11
6.68 6.12
2
0
2013 2014 2015 2016 2017

Chart: working capital turnover ratio

Interpretation: From year 2013 to 2017 AMCL working capital turnover ratio percentages
were 6.68%, 8.11%, 6.12%, 9.63% and 9.1% respectively. But in 2016 the rate was increased
high compare than the previous year and in 2017 it decreased slightly. AMCL asset and
liabilities management should be revised the policies for future development of the company.

6.8. Return on Asset (ROA):

The return on assets ratio measures the net income produced by total assets during a period. In
other words, ROA measures how efficiently a company can manage their assets to generate
incomes during a period.
 Net Income After Tax (EAT)
Return on Asset =
Total Assets

Particulars 2013 2014 2015 2016 2017

Net Income 54829899 55424126 55584719 52998159 54937417

Total Assets 1133169643 1095910217 1505711652 1459268485 1463022240

Return on 0.048% 0.051% 0.037% 0.036% 0.024%

Assets

Table: Return on assets

Return on Assets
0.06%
0.05%
0.04%
0.03%
0.05% 0.05% Return on Assets
0.02% 0.04% 0.04%
0.01% 0.02%
0.00%
2013 2014 2015 2016 2017

Chart: Return on assets

Interpretation:
From year 2013 to 2017 AMCL ROA percentages were .05%, .05%, .04%, .04% and .02%
respectively this remained almost constant. But only in 2017 it decreased into .02%. AMCL was
more careful to invest in assets and use their assets efficiently. AMCL asset management should
be revised the policies and procedures to avoid unfavorable situation in upcoming days otherwise
it can affect the profitability of the company.
6.9. Net Profit Margin:

The net profit margin ratio directly indicates what percentage of sales is made up of net income.
This ratio also evaluates how well a company manages the expenditures relative to the net sales.
The standard ratio is 10% to 20%. Companies can achieve higher ratios either by producing more
incomes while keeping expenditures constant or keep revenues constant and lower expenditures.

Net Profit
Net Profit Margin=
Sales

Particulars 2013 2014 2015 2016 2017

Net Income 54829899 55424126 55584719 52998159 54937417

Sales 1554446836 1727217669 1886505384 2091553854 2380335493

Net Profit 0.035% 0.032% 0.029% 0.025% 0.023%

Margin

Table: Net Profit Margin

Net Profit Margin

0.04%

0.03%

0.02%
0.04% 0.03% Net Profit Margin
0.03%
0.03% 0.02%
0.01%

0.00%
2013 2014 2015 2016 2017

Chart: Net Profit Margin

Interpretation:

The net profit margin of AMCL was .04%, .03%, .03%, .03% and .02% from 2013 to 2017
respectively. The ratio is decreases. The reason of this fact either might be high selling and
administrating expenses, high tax rates and other operating expenses or low income from
operations. AMCL should concentrate on how to increase net profit margin in near future.

6.10. Return on Equity (ROE):

The ROE ratio suggests how profitable a company is in comparison to the net income with the
shareholders' equity. In other word, ROE measures the ability of a firm to generate profits from
the shareholder’s investments in the company. The higher the ratio is, the more efficient the
company is in utilizing the equity and the better return they can provide to the investors.

Net Income after tax (EAT)

Return on Equity =
Total Equity

Particulars 2013 2014 2015 2016 2017

Net Income 54829899 55424126 55584719 52998159 54937417

Total Equity 457103264 487066242 517050961 544449120 573786537

Return on 0.120% 0.114% 0.108% 0.097% 0.096%

Equity

Table: Return on Equity

 Return on Equity
0.14%
0.12%
0.10%
0.08%
0.06% 0.12% 0.11% 0.11% Return on Equity
0.10% 0.10%
0.04%
0.02%
0.00%
2013 2014 2015 2016 2017

Chart: Return on Equity

Interpretation:
AMCL ROE indicates that from 2013 to 2017 the ratios were .12%, .11%, .11%, .10%, .10%
respectively. The ROE ratios showing a decreasing trend which may not satisfactory for the
investors to invest in AMCL since they want high return. As a result they will reconsider to
invest in AMCL even they might choose another company. The major cause of this reduction
may be due to the increase in shareholder’s equity compare to the net income.

6.11. Earnings per Share (EPS):

Earnings per share (EPS) are the values of earning from each outstanding common shares of a
company. Generally, EPS is calculated on a per share basis. The higher the ratio, higher will be
the earning from the common shares.

Net Income After Taxes (EAT)

Earnings per Share =
Number of Share
Particulars 2013 2014 2015 2016 2017

Net Income 54829899 55424126 55584719 52998159 54937417

Total 8000000 8000000 8000000 8000000 8000000

Number of
Share

Earnings per 6.85 6.93 6.95 6.62 6.87

Share

Table: Earning per share

Earnings per Share

7

6.9

6.8

6.7
6.93 6.95 Earnings per Share
6.85 6.87
6.6

6.5 6.62

6.4
2013 2014 2015 2016 2017

Chart: Earning per share

Interpretation:
Over the last five years EPS has an increasing trend in first three years those are 2013, 2014,
2015 but in 2016 it deceasing slightly. EPS of AMCL gradually improved year to year. Per share
income was only Tk. 25 in 2013 and in 2014 it increased by almost Tk. 5 leading to an EPS of
Tk. 30.39. Furthermore, it went up in the next three years respectively Tk. 31.10, 32.46 And
37.13 that indicates positive result for AMCL shareholders. This increase occurred only due to
rise in EAT since the common shares of the company stood constant throughout the five years.
7. Financial performance analysis of PRAN group:

7.1. Last five Years Financial data:

Particular 2013 2014 2015 2016 2017

s
Turnover 1554446836 1727217669 1886505385 2091553854 2380335493
Gross 345,649,353 374,014,673 389,957,836 406,214,484 454,804,326
profit
Profit 67,645,984 70,706,446 71,210,226 68,474,454 72,681,422
before
Tax
Sharehold 457,103,264 487,066,242 517,050,961 544,449,120 573,786,537
ers’
equity
Total 334,977,311 341,808,493 658,081,631 544,637,029 474,194,353
Assets
Total 798,192,332 754,101,724 847,630,021 914,631,456 988,827,887
current
assets
Total 541,239,463 565,399,521 539,485,923 697,532,212 725,833,666
current
liabilities
COGS 1208797483 1353202996 1496547549 1685339370 1925531167
Growth 54,829,899 55,424,126 55,584,719 52,998,159 54,937,417
rate of
PAT
Earning 6.85 6.93 6.95 6.62 6.87
per share

Chart: Five years financial data

7.1.1. Turnover Analysis:

2.5E+09

2E+09

1.5E+09
2380335493 Turnover
1E+09 1886505385 2091553854
1554446836 1727217669 Particulars
500000000

0
2013 2014 2015 2016 2017

Chart: Turnover Analysis

Interpretation: Turnover is the net sales generated by a business. Turnover represents the
value of goods and services provided to the customer during a specific time period. In PRAN
group the Turnover amount is increasing day by day by this above analysis it is clear that PRAN
group maintain a good policy to increase their sales.

7.1.2. Cost of goods sold (COGS) analysis:

2.5E+09

1925531167
2E+09
1685339370
1496547549
1.5E+09 1353202996
1208797483
COGS
1E+09 Particulars

500000000

0
2013 2014 2015 2016 2017

Chart: Cost of goods sold Analysis

Interpretation:
By the analysis of cost of goods sold it can be interpreted that from the year 2013 to 2017 it
increases rapidly. PRAN should minimize the cost of goods sold for the better future of their
organization.

7.1.3. Total current Asset analysis:

Total current assets

1,200,000,000

1,000,000,000

800,000,000

600,000,000
988,827,887 Total current…
847,630,021 914,631,456
400,000,000 798,192,332 754,101,724
200,000,000

0
2013 2014 2015 2016 2017

Chart: Total current assets

Interpretation:
7.1.4. Total current liabilities analysis:

Total current liabilities

800,000,000
700,000,000
600,000,000
500,000,000
400,000,000
697,532,212 725,833,666 Total current…
300,000,000 541,239,463 565,399,521 539,485,923
200,000,000
100,000,000
0
2013 2014 2015 2016 2017

Chart: Total current liabilities analysis

Interpretation:
7.1.5. Growth rate of profit after Tax analysis:

Growth rate of PAT

56,000,000
55,500,000
55,000,000
54,500,000
54,000,000
53,500,000 55,424,126 55,584,719 Growth rate of…
54,829,899 54,937,417
53,000,000
52,500,000
52,998,159
52,000,000
51,500,000
2013 2014 2015 2016 2017

Chart: Growth rate of profit after Tax analysis

Interpretation:
The growth rate of Profit after Tax of PRAN group is varied year to year. In this graph in 2013
to 2015 the rate is increasing but in 2016 it declines and try to recover the rate in 2017 that’s why
they increase the profit after Tax. So PRAN group need to minimize their cost and increase the
production with low cost.
Actual Task
Part
1. Internship at PRAN Group:

I have been assigned as an intern at PRANT group; Head office, Badda, Dhaka. For three months
to fulfill my academic requirement of Bachelors of Business Administration. I started my
Internship program from 8th January, 2018 for three months. First two weeks of my intern I
worked in the Accounting Department. In the Accounting department I have learned how to use
software, how to check data and how to receive the checks from supplier and send it for clearing.
Then I was saved all the data by using software. Accounting and Finance Department was my
core department. In my study, I have focused more on Working capital analysis as I have worked
& learned more from there. PRAN Group works on different types of Working capital and I was
assigned to work with Financial control software as an Intern.

2.1. Primary Learning:

In case of Primary Learning I learn so many things which are given in below:

 How to behave with the Top management people in the organization.

 How to behave with the colleague in a challenging situation.
 How to Handel different types of software.
 How to manage time.
 How to maintain relationship with other department.

2.3. Secondary Learning:

As an internee in the PRAN Group (Head office) there are a number of activities in which I was
involved. The activities are given below:

 The using of FC (Financial controlling) software.

 Assisting the officers in different task.
 Collecting necessary papers from officer and maintain the sequence.
 Fill the blanks of different types of form where necessary.
 Maintaining the Transaction sheet.
 Prepare JV (Journal voucher) for power user.
 Making a pending list for JV.
 Checking order requisition code.
3. My Working Area & Activities during Internship:

After joining in internship I worked in Accounting department in the first 2 weeks after then I
worked in Finance department. I worked there in two departments, those are:

3.1. Accounting department:

 Maintain the chart of A/C.

 Maintain the accounting related software “ORACLE”.
 Journal entry.
 Contra entry.
 Store keeper checking information entry.
 Transaction sheet maintain.
 Selling information entry.

3.2. Finance Department:

 Financial controlling software using.

 Putting the changing companies list.
 Every day transaction entry.
 Every day’s data entry with proper time and date.
 Checking PR (Purchase requisition) from SCM.
 Compare selected data with last.
 Item detail entry.
 Consumption accept code entry.
 Prepare JV number.

4. Learning Status:

During my internship in PRAN Group, I have experienced with corporate environment and
corporate culture as well. I got in touch with officers and knowing about responsibility to operate
corporate relationship with different department and factory situate in different area. I have also
learned how automation system can solve the problem.
Picture in my Organization
Data collection:
In order to conduct the report, I have collected necessary information from two sources:

1. Primary sources of information

2. Secondary sources of information

Primary sources of information

• Face to face conversation with the respective officers of PRAN Group

• Oral interview of the responsible

• Observation of department of PRAN Group

Secondary sources of information

• Annual report of PRAN Group

• A brief on staff of PRAN Group•

• Various document of the company•

• Website of PRAN Group.