System Request

PROJECT SPONSOR: Production manager of ARK Textiles Ltd.

Business need: for few recent years our company is facing some problems
with its inventory management. Sometimes the stock of products is greater than
the demand and sometimes less than the market demand. As a result, it is being
unable to reach its goal. On the other hand, the CEO of the company is
planning to invest on a system which can handle both native and foreign
activities and maintain the most efficient amount of inventory so that there will
be no more or less products comparing with the demand. So, we want to make
sure that there are no extra unsold product as well as no shortage of products.
Business Requirement: in order to accelerate transactions we need a simple
but reliable online based selling system. For its simplicity it will be more user
friendly to the amateur internet users as well as the experts. This will ease
both local and international trade. The website must contain full details about
the product such as size, color, price etc. so that the buyers can easily collect
necessary information about the product. The website will have a special
feature where the users of our product can rate them out of 10. So the new
customer can easily guess the quality of our product. we can also provide a
home delivery service to our local customers. From the website we can collect
important information about the demand of every individual product. So we
will be able to understand which product we need to produce more and which
to improve to increase sales.
Business Value: we want increase the sale of unsold product up to 80%
Special issues or constraints: System must be used in every corner of the
world as well as in rural areas of the country. Also bad review from the
customers on the website can hamper companys reputation.
ARK Textiles Ltd.
Consolidated Statement of Comprehensive Income
For the year ended December 31, 2016
 ARK Textiles Ltd.
Consolidated Statement of Changes in Equity

Particulars BALANCE

Sales 5,238,437,265
Cost of Goods Sold (4,289,716,936)
Gross Profit 948,720,329
Operating Expenses (202,310,024)
Finance Cost (37,612,361)
Operating Income 558,797,944
Other Income 22,819,858
Net Income Before W.P .P & W.F 731,617,802
Allocation for W.P .P. & W.F (34,838,943)
Net Income Before Tax 696,778,859
Provision for Income Tax (107,850,441)
Provision for Deferred Income Tax (1,146,382)
Net Income for the Year TK. 587,782,036
(Transferred to the Consolidated Statement of Changes in Equity)
Earnings Per Share TK. 4.37

For the Year Ended December 31, 2016

Particulars Share Capital General Total

Reserve and
Surplus
As at December 31,2016 1,168,871,920 3,340,114,433 4,508,986,353
Net Profit for the Year 2017 - 587,782,036 587,782,036
Cash Dividend for 2016 - (210,396,946) (210,396,946)
Stock Dividend for 2016 175,330,790 (175,330,790) -
As at December 31,2017 Tk. 1,344,202,710 3,542,168,733 5,957,711,911
 Ark Textiles Ltd.
Statement of Financial Position
For the Year Ended December 31, 2016

BALANCE

NET ASSETS::

FIXED ASSETS 2,262,854,293

ASSETS AT COST LESS DEPRECIATION 1,678,520,414

INVESTMENT-LONG TERM(AT COST) 160,783,760

SHARE MONEY DEPOSIT 423,550,119

CURRENT ASSETS: 4,095,602,555

STOCKS 1,243,943,446

TRADE DEBTORS 1,879,244,296

SHORT TERM LOAN 459,680,590

ADVANCE, DEPOSITS AND PREPAYMENTS 271,092,185

CASH & BANK BALANCES 241,642,188

LESS: CURRENT LIABILITIES: 1,363,962,388

SHORT TERM BANK LOAN 42,333,500

SHORT TERM LOAN -

SUNDRY CREDITORS 915,358,665

OTHER CURRENT LIABILITIES 293,249,108

PROVISION FOR INCOME TAX 113,021,115

NET CURRENT ASSETS 2,731,640,317

LESS: DEFERRED TAX LIABILITY 108,123,167

4,886,371,443

SHARE HOLDERS EQUITY: 4,886,371,443

SHARE CAPITAL 1,344,202,710

GENERAL RESERVE AND SURPLUS 3,542,168,733

4,886,371,443
 FEASIBILITY ANALYSIS
Technical Feasibility:
Inventory Management
Inventory is a part of production management. To manage inventory company want a
technological automated system.

Scope: This system will track inventory levels, orders, sales, deliveries and also
production.
Raw Material: Raw material of the required system is a inventory management
software. Data is also considered as a raw material.
Technological description: To run this system we need some technological
support. To track the inventory stocked in the warehouse we need a barcode
scanner. It will give a forecast about reorder point, order quantity, lead demand,
stock over etc.
Annual costs: To make a software or have a developed technological system
company has to spend once at the period of initiation. Beside that maintenance
cost is involved in every year.
Human Resources: To run this system company need trained employees who can
monitor the system more efficiently.
Risk: If any technical problem arises the whole system will be collapsed. And if
there is some problem found in the entry system it will provide a wrong
projection.

So after the technical analysis we can say that, we can build the new system.
Economic Feasibility:

ARK Textiles Ltd.

Consolidated Statement of Cash Flows
For The Year Ended December 31, 2016
Cash Flow From Operating Activities:
Receipts:
Cash From Sales Revenue
5,392,684,117
Cash From Other Income
55,336
Total Cash Receipts
5,392,754,453
Payments:
Purchase of Raw & Packing Materials
(3,501,303,689)
Paid for Operating & Non-operating Exp.
(1,020,430,239)
Interest Expenses
(39,566,545)
Income Tax payments
(131,020,342)
Workers Profit Participation Fund and Welfare Fund
(47,348,977)
Total Payments
(4,739,669,792)
Net Cash Flow From Operating Activities
653,084,661
Cash Flow From Investing Activities
Net Sales (Purchase) of Fixed Assets
(230,938,549)
Net Cash Flow From Investing Activities
(365,930,880)
Cash Flow From Financing Activities:
Short Term Bank Received (Repaid)
(596,869,429)
Short Term Loan From (to) Inter Co.
(44,006,327)
Dividend Payment
140,180,332
Net Cash Flow From Financing Activities
(210,396,946)
Net Cash Position
(114,222,941)
Opening Cash & Cash Equivalents
(58,007,559)
Closing Cash in Hand
241,642,188
 ARK Textiles Ltd.
Financial Result
2016 2015 2014 2013 2012

Turnover 5,238,437,265 4,445,402,112 5,247,748,947 5,431,437,667 4,282,244,010

Cost of Goods Sold 4,289,716,936 3,208,642,850 3,862,412,472 4,042,908,182 3,348,855,289

Gross Profit 948,720,329 1,186,759,262 14,85,336,475 13,88,529,485 933,373,721

Operating Expenses 202,310,024 113,189,908 157,385,096 186,201,203 109,832,354

Finance Cost 37,612,361 94,609,920 162,981,165 73,336,162 121,730,159

Operating Income 558,797,944 878,959,434 1,164,955,214 1,128,992,055 551,811,208

Other Income 22,819,858 31,023,629 15,710,732 2,410,922 20,554,510

Net profit before 731,617,802 909,983,063 1,180,680,946 1,131,402,992 727,365,718
WPPF
Contribution WPPF 34,838,943 33,808,717 36,481,050 34,463,147 15,588,844

Net profit (BT) 696,778,859 876,174,346 1,144,199,896 1,096,939,845 711,776,874

Provision for Income 107,850,441 111,405,203 109,443,150 107,382,449 51,142,872

Tax
Provision for Deferred 1,146,382 - - 842,227 -
Tax
Net Profit (AT) 587,782,036 764,769,143 1,034,756,746 988,715,169 660,634,002

Gross Margin 18.11% 20.95% 24.68% 22.20% 13.74%

Net Margin 11.22% 12.55% 12.10% 10.84% 6.71%

Earning Per Share 4.37 4.80 5.42 4.98 1.94

(EPS)
Return on 12.51% 16.88% 16.60% 17.71% 8.57%
Equity(ROE)
Outstanding Shares 134,420,271 181,171,661 197,405,993 186,887,192 55,584,053

Face value per share 10 10 10 10 10

(Tk.)
 ARK Textiles Ltd.
Cost and benefit relationship

2012 2013 2014 2015 2016 Total

Benefits-

Increased sales 650.000 530,000 561.800 595,50 2.187.308

8
complain 65.000 65,000 65.000 65,000 280.000

Reduced inventory costs 96.000 96,000 96.000 96,000 272.000

Total Benefits 838,000 896,000 999,800 733,508 3,139,308
Development Costs

2 servers @ $ 1 38.000 380.0C0 0 0 0 0 380.000

Printer 100.0C0 0 0 0 0 100.000
Software licenses 34,838 0 0 0 0 34.838

Server software 10.945 0 0 0 0 10.945

Development labor 1.236,538 0 0 0 0 1.236.538
Total Development Costs 0 0 0 0 1,632,800
1,632.800
Operational Costs
380.000
Hardware- 50.000 50,000 50.000 50,000
38,000
Software 38.000 38,000 38.000 80.000
129,650 488.343
Operational labor 115.000 119,600 124,650
796,343
Total Operational Costs 185,000 189,600 194,650 199,650
2,832,800 3,600,638
Total Costs 185,000 189,600 194,650 199,650

(1,832,800) 338,665
Total Benefits Total Costs 453,000 478,400 505,416 534,149

Cumulative Net Cash Flow (1,632,800) (1,179,800) (650,895) (195,479) (338,665)

Return on Investment (ROI) 24.1% (338,665/5,400,638)

Break-even Point [5,34,149-338,665] / 534,149 = .37

Organizational feasibility:
Inventory management system

Management Prowess: The people associated with the system are so much
important for the success of the project. This company is so much sensitive about
their management. They have recruited those managers who have creativity,
passion, strong network, academic qualification. They need more who are
experienced in using technology.

Resources Sufficiency: The office of the company is well designed and well-
spaced. The employees in the company is supportive and there is a demand of
some employees for controlling the system. And employees who have a good
knowledge over technology is available in the market. Some machinery needed
to be included. The company has the ability to protect the intellectual property.