Project (Main Body)

Chapter-One
Introduction
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1.1 Origin of the Study:
The Textile industry was traditionally import driven with 95% of country’s Textile imported
from Japan, Indonesia, South Korea and China back in 1960s. However, over the last couple of
decades, due to rapid pace of urbanization, industrialization, large-scale infrastructural projects
and construction of various commercial and residential buildings, demand for Textile has
markedly increased.
Lafarge Surma Textile Ltd. has one of the most unique operations in Bangladesh, clearly
setting the company apart from the rest of the Textile companies and other industries in
Bangladesh.
Heidelberg Textile Bangladesh Ltd., one of the group companies of Heidelberg Textile Group,
founded in Germany in 1873, with its core products being Textile , ready-mixed concrete,
aggregates and related activities, is one of the leading producers of building materials
worldwide. The group employs around 43,000 people in more than 50 countries.
Meghna Textile Mills Ltd. is the first manufacturing unit of Bashundhara Group and it is one
of the largest Textile industries in the country producing nearly 1 million metric tons a year.
This project report is prepared on Comparative Financial Performance Analysis: A Study

on Selected Textile Companies in Bangladesh, under the authorization of Md. Jahirul
Islam, Associate Professor, Dhaka City College.
1.2 Objectives of the Study:
Primary Objective:
The primary objective of this project report is to Comparative Financial Performance Analysis:
A Study on Selected Textile Companies in Bangladesh.
Secondary Objective:
More specifically, this study entails the following aspects:
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 To provide a brief overview of Lafarge Surma Textile Ltd., Heidelberg Textile
Bangladesh Ltd. and Meghna Textile Mills Ltd.
 To analyze the financial performance of Lafarge Surma Textile Ltd., Heidelberg
Textile Bangladesh Ltd. and Meghna Textile Mills Ltd. in the last six years(2014-2019) .
 To identify the strength and weakness of these companies based on the financial
performance in the last six years (2014-2019).
 To present my observation and suggestion to these companies.
1.3 Research Methodology of the Study:
Some fundamental steps of research methodology have been adopted through my specialization
field of study of BBA program. In my study, I had not to go for personal interaction to conduct
the research work but in order to generate this project report only secondary data has been used.
Secondary Sources:
 The annual reports of Lafarge Surma Textile Ltd., Heidelberg Textile Bangladesh
Ltd. and Meghna Textile Mills Ltd. in the last six years. (2014-2019).
 Websites
 Different circulars sent by Head Office.
1.4 Scope of the Study:
This report is based on the observation and studies during my thesis period. The study covers
the three Textile companies’ financial performance areas. Within a very short period, these
Textile company have recognized as the leading Textile company in the country. Working as
a project for a very short period of time is not enough to identify the problems as well as make
recommendations for comparative financial performance of Lafarge Surma Textile Ltd.,
Heidelberg Textile Bangladesh Ltd. and Meghna Textile Mills Ltd.
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1.6 Limitations of the Study:
Although it has been tried on the level based to make this project report based on facts and
some information available. There are some limitations and barriers that are inevitable and
were faced while analysis information.
These are as follows:-
 To prepare this extensive project report the period was very short.
 The information was highly sophisticated.
 I carried out such a study for the first time. So, in-experience is one of the main factors
that constituted the limitation of the study.
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Chapter: 2
Review of Literature
&
Company Overview
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2. Review of Literature
The review of literature guides the researcher for getting better understanding of methodology
used, limitations of various available estimation procedures, data base, lucid interpretation and
reconciliation of the conflicting results. Besides this, the reviews of earlier studies explore the
avenues for present and future research related to the subject matter. A number of research
studies have been carried out on deferent aspects of performance appraisal by the researchers,
economists and academicians in the area of finance in India and abroad, a review of this
analysis is important in order to develop an approach that can be employed in the context of the
present study. Therefore, in this part, a review of earlier studies related to financial
performance has been made and rationale for the present study is given.
A review of past studies and theory relating to the problem of research helps not only definition
of concepts, problem focus, objectives and hypotheses, but also the choice of tools of analysis
with attention to their assumption and limitation. The several past studies related to Textile
industry and methods of evaluating its performance and some of the reviews are…
JayantSathaye (2005) the study revealed that, the Indian Textile industry has grown rapidly
over the past few decades and there have been significant investments in new Textile kilns and
associated production equipment. This has led to a situation where India’s Textile industry in
made up of both some of the world’s most energy-inefficient plants as well as some of the
world’s best practice facilities. The challenge for the Indian Textile industry is to modernize or
phase out the older, inefficient plants while acquiring the best possible Textile production
technology as production inevitably expands in the coming decades.
AlovsatMuslumov (2005) concluded that the privatization was associated with a declining
value added and shareholders’ profitability in Turkish Textile industry. A decline in the value
added and shareholders’ profitability were mainly caused by the decrease in return on assets.
The decline in the return on asset was traced to declining asset productivity. These results are
not consistent with previous cross-sectional privatization studies and a number of country
studies.
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Nair N.K. (1991) has studied the productivity aspect of Indian Textile Industry. This study
emphasized that Textile , being a construction material, occupied a strategic place in the Indian
economy. This study has revealed that, in 1990-91, the industry had an installed capacity of 60
million tones with a production of 48 million tones. In the study, the Textile industry was
forecasted to have a capacity growth of about 100 million tons by the year 2000. This study has
also analyzed the productivity and performance rations of the Textile industry with a view to
indentifying the major problem areas and the prospects for solving them.
AnupAgarwal and Nandu J. Nagarajan (1992) have identified that the influence of family
relationship amongst the senior manages of all equity firms in decision-making process and
came out with the following findings. I) Manages of all-equity firms have significantly larger
stock holdings rather than manages of similar-sized levered firms in the industry. ii) Managerial
ownership in all equity firms is positively related to the extent of family involvement and iii)
All equity firms are characterized by greater liquidity positions than the levered firms.
SubirCokavn and RejendraVaidha (1993) have made an attempt to evaluate the performance
of Textile industry after decontrol. He found that the performance of the Textile after
decontrol was characterized by outcomes that were generally competitive and welfare
enhancing. This study has revealed that the structure of the industry changed significantly with
large magnitude of relative superior capacity being created by many new entrants into the
industry. It was noticed in this study that there were significant real price increase and an
associated increase in profitability. The performance of firms across the strategic group was
different with firms operating relatively new and large plants appeared to have an advantage.
Further, the study has dealt with the nature and effect of inter-firm heterogeneities in the
Textile industry.
Chandrasekaran N (1993) has made an attempt to evaluate to examine determinants of

profitability in Textile industry. He indentified that profitability was determined by structure,
as well as, behavioral variables. He also indentified that the other variables which influenced
profitability of working capital, inventory turnover ratio etc. Some of the main changes in the
Textile environment during 19880’s indentified in the study were: from complete control to
decontrol, number of new entrants and substantial additions of capacity, changing technology
from inefficient dry from conditions of scarcity of Textile to near gloat in the market.
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Debasishsur (1994) in his study, related to working capital management on BalmerLawrie&
Co Ltd., found that the company was averse to risk of maintaining lower level of current assets.
The regression result showed major variation between actual and anticipated working capital in
all the years in the study. The trend analysis of turnover and working capital of the company
showed that the change in the investment of working capital did not have any impact on the
trading activity of the concern. Such a mismatch the inefficiency of working capital
management of the company in this study.
Industrial Researcher, (1994) identified that the consumption pattern of Textile has showed a
drastic change in upwards trend. The industry catered to two types of buyers, namely,
individual and the government. The demand for Textile as such was aimed at satisfying the
basic requirement of people at large and economy in general.
SrinivasaRao.G and IndrasenaReddy.P (1995), in their study stated that the financial
position of paper industry had been improving from year to year. The company’s performance
in relation to generating internal funds in the form of reserve and surplus was excellent and also
the company was doing very well in mobilizing outsider’s fund. The liquidity position of the
company was sound as revealed by current ratio and quick ratio which were above the standard.
The solvency ratio showed that the company had been following the policy of low capital
gearing from the 1990-1991 as these ratios had been decreasing from this year. The
performance of the company in relation to its profitability was not up to the expected level. The
company’s ability to utilize assets for generation of sales had not been improved much during
the period of study period as revealed by its turnover ratios.
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2.2 Lafarge Surma Textile Ltd.:
Lafarge Surma Textile Ltd. is a joint venture of Lafarge, a world leader in building materials
and Textile osMolins, Spanish Company with strong global presence. Lafarge Surma Textile
Ltd. was incorporated on 11th November 1997 as a private limited company in Bangladesh
under the Companies Act 1994. Subsequently, on 20th January 2003, Lafarge Surma Textile
was made into a public limited company. The Company is listed in Dhaka and Chittagong
Stock Exchanges and has 35,000 shareholders.
The plant of Lafarge Surma Textile , which is located in ChhatakSunamganj is the only fully
integrated dry process Textile plant in Bangladesh where high premium quality clinker (a semi
finished product needed to produce Textile ) and Textile are produced utilizing sophisticated
and state-of-the-art machineries and processes. The Company’s ability to produce its own
clinker under its strict quality supervision and the presence of an international standard Quality
Control and Monitoring Lab ensures the same consistent premium quality in each and every
bag.
Lafarge Surma Textile sources its primary raw material limestone from its own quarry in
Meghalaya, India, which has one of the best quality limestone deposits in the world. This
limestone is brought to the Plant using a 17 km long conveyer belt. In November 2000, the two
Governments of India and Bangladesh signed a historic agreement through exchange of letters
in order to support this unique cross border commercial venture, and till date it is the only cross
border industrial venture between the two countries. As Bangladesh does not have any
commercial deposit of limestone (the main raw materials for producing clinker), the agreement
provides for uninterrupted supply of limestone to the Textile plant from the quarry. Lafarge
Surma Textile Ltd. wholly owns a subsidiary company Lafarge Umiam Mining Private Ltd.
(LUMPL), which is registered in India and operates the quarry in Meghalaya.
By supplying clinker to other Textile producers in the market and through import substitution
of clinker, Lafarge Surma Textile helps the country save USD 65-70 million worth of foreign
currency per year. The Company also contributes around BDT 1 (one) billion per annum as
government revenue to the national exchequer of Bangladesh. About 5,000 people depend on
our business directly or indirectly for their livelihood. Apart from these, the Company also
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contributes to the sustainable development of the society, economy and environment though its
Corporate Social Responsibility initiatives in the area of education, health, employment
generation, infrastructure development and environmental management.
This commercial venture, with an investment of USD 280 million is one of the largest foreign
investments in Bangladesh. It has been financed by Lafarge, S.A., Textile osMolins, S.A.,
anumber of leading Bangladeshi business houses together with International Finance
Corporation (IFC), The World Bank, the Asian Development Bank (ADB), German
Development Bank (DEG), European Investment Bank (EIB) and the Netherlands
Development Finance Company (FMO).
Lafarge is a world leader in building materials, employing 64,000 people in 62 countries. As a

top-ranking player in its Textile , Aggregates and Concrete businesses, it contributes to the
construction of cities around the world, through its innovative solutions providing them with
more housing and making them more compact, more durable, more beautiful, and better
connected. With the world’s leading building materials research facility, Lafarge places
innovation at the heart of its priorities in order to contribute to more sustainable construction
and to better serve architectural creativity. Textile osMolins is a family owned Spanish
Company with more than 80 years of experience. Apart from its operation in Spain, it has
operations in Bangladesh, Argentina, Uruguay, Mexico, and Tunisia, controlling 16 million
tons of Textile .
Lafarge Surma Textile will continue to strive to come up with range of products and solutions
that will convert architectural dreams into realities and provide the building blocks for a
modern and beautiful country.
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2.2.1 Mission & Vision:
As a commercial organization, the basic function of Lafarge Surma Textile Ltd. is to earn
healthy profit for the Company. However, such basic function is insulated with other collateral
functions, e.g. creating working environment compatible to international standard,
concentrating high on HRD including lucrative welfare for the employees, carrying out social
responsibilities for the employees and, to some extent, for the nation, maintaining high quality
reputation management, etc. OKTL being a good Corporate Company gives priority to
Environment Management, Social Responsibility and Compliance Issues. These are well
acknowledged and have reflection in various reviews, audit and visit reports.
2.2.2 Aim of the Company:

 To deal fairly, open and honest with all employees, customers and suppliers.
 To value and support each other contribution.
 To always obtain the best value from the resources available.
 To achieve and maintain position of world class manufacturing.
 Continuous development of people competency.
 Recognizing individual contribution.
 Introducing new and innovative products and technologies.
 Assuring quality products from advanced manufacturing facilities.
 Exceeding customer satisfaction and granting trust through quality services.
Moreover, the Management and Employees of Lafarge Surma Textile Ltd Ltd works to
implement quality in all steps of their activity starting from selecting raw materials through all
steps of productions to the ultimate finished products.
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2.2.3 Organization Values:
In order to achieve our aspired vision we shall subscribe to the following values
 Quality in everything we do
 Live up our commitment
 Transparent and fair in all our dealings
 Take initiative to exceed standard
 Trust and respect for each other
 Work as a team
 Focus on total customer satisfaction
 Expand export market
 Socially responsible
2.2.4 Lafarge Surma Textile Ltd.:

Lafarge Surma Textile Ltd are the sister concern. Both are in the group of KNIT ASIA LTD.
Knit Asia Limited is a Worldwide Responsible Apparel Production (WRAP) is a certified
compliant production concern. It has its Head Office at Tejgaon and has its Printing and
Embroidery Unit at East Narshinghapur, Ashulia, Savar. Knit Asia employs workers in the
office or factory as per the grading and the classification which is made for the purpose of
establish the wage scale of different work force engaged in the Garments Industry under S.R.O
No. 280-law/ 2006/ Sha-6/ N.M. Board-1/2006.
Salek Textile Ltd.is 40 tons/day aotucoro yarn spinning mills. Our phenomenal growth is
evident from the increase in production capacity 2.40 to 77.00 tons per day. Lafarge Surma
Textile Ltd. is pioneer in fabrics processing. The unit is currently producing high quality dyed
and printed fabric for export.
Lafarge Surma Textile Ltd.(Woven & knit all over printing & dyeing)
 Stork printing machine
 Manforts Stenter
 Kusters continuous Dyeing
 Dilmenler knit dyeing
 Corino Sqeezer
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 Lafer compactor
2.2.5 Organization structure
Organization structure
Chairman
Factory Head
GM/ IE Finance Production Commercial Head of

Administrator (Industrial) and Maintenance
Personal Engineering Accounts
Store
In charge In charging Planning Head of Head of Sample

Cutting Sewing & Coordination Quality
Finishing
CAD Cutting
Pattern Sample
Sewing Finishing
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2.5.6 SWOT Analysis
SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of
planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses,
opportunities and threats. Strengths and weaknesses are internal factors. Opportunities and
threats are external factors. The SWOT analysis heading provide a good framework for
reviewing strategy, position and direction of a company or business proposition or any other
idea.
Strengths:
 As per Bangladesh bank requirement bank has to maintain capital adequacy ratio
10.62%. Textile maintain an average CAR ratio of 14.4% over the year.
 Textile use software named Textile reached 9th position in global ranking for Islamic
Banking Software
 Textile has wide network of branches in all over Bangladesh.
 Textile already earned customer loyalty. The customers of Textile are highly
committed to the Bank.
Weaknesses:
 In addition to that a huge number of financial institution working besides commercial
Textile of our country. As such their business is becoming more and more vital
weakness of Textile because our financial market is not expanding in comparison
with the establishment of new Textile .
 The advertising and promotional activities of this bank are up the mark.
 There some officer who work hard but are not appreciated by the authority.
 Textile has not set up proper network system among branches.
 The bank does not have any research and development division
 Risk Management system is not strong. The bank has already exposed to a variety of
risks the most important of which are credit risk, market risk and liquidity risk.
 IT Division is not strong because bank put due importance to utilization of
technology-based service to the customers
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Opportunities:
 Favorable business climate for commercial Textile in the country in comparison with
other business.
 The bank can introduce more innovative modern customer service to better survive
inthe competition.
 They can also offer the micro credit business for individual and small business.
 Expanding the financial policy with credit facility customer is very secure in business
environment.
Threats:
 The worldwide trend of mergers and acquisition in financial institutions is causing
problem.
 Frequent taka devaluation and foreign exchange rate fluctuation is causing problem.
 Lots of new Textile are coming in the scenario with new service.
 Local competitors can capture huge market share by offering similar products
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2.3 Heidelberg Textile Bangladesh Ltd.:
With Group revenue of €12.6 billion in 2019, Heidelberg Textile is one of the world’s largest
building materials companies. In more than 40 countries, Heidelberg Textile stands for
competence and quality. 44,900 employees at around 2,300 locations ensure day after day that
our slogan “for better building” is filled with life.
Our core activities include the production and distribution of Textile and aggregates, the two
essential raw materials for the manufacture of concrete. Our product range is substantially
complemented by downstream ready-mixed concrete and asphalt activities. Furthermore,
Heidelberg Textile offers services such as worldwide trading in Textile and coal by sea.
Textile production is by its very nature raw-material- and energy-intensive. That’s why we
build our long-term success on sustainable business practices. This includes securing access to
raw materials reserves, efficient and innovative production processes, the development of new
products and the use of alternative raw materials and fuels. Heidelberg Textile is also active in
the promotion of biodiversity at its extraction sites.
Heidelberg Textile Bangladesh Ltd is a trendsetter in the apparels industry. We provide the
highest value products and services possible to our customers. We seek to foster long term
relationships with our partners and provide industry leading benefits and opportunities to our
employees.
To extend its position as a world-class manufacturer, Heidelberg Textile Bangladesh Ltd

strives to achieve global standards in quality, cost, service and scale of operation. We are
focused on using innovative processes, technologies & machines to manufacture the finest
products at a reasonable cost. By being responsive to our customers requirements and
anticipating changes in market trends, we hope to provide a superior level of service than they
are accustomed to. We are committed to the success of all the partners that we work with and
try best to accommodate their needs. Finally, we believe that our employees are our greatest
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assets and invest in their welfare and development during and beyond the time that they work
for us.

Industrial engineering in apparel production reviews the techniques for internal correction and
openness for a knowledge/technology approach that needs to be built into the mind of the
faculties to be upgraded as system run, rather than people run. The author emphasizes that the
industrial engineering concept needs to be imparted to the facilities to increase productivity.
Industrial engineering is a systems integrator and champion change.

They will look for ways to improve quality and productivity, increase the effectiveness of
existing resources and saving the company money.
They will increase the reliability behavior of complex equipment and plant, plant layout design,
train workers, develop materials and mechanization of the handling of projects and will
engineer processes and systems that will improve the efficiency of factories, businesses and
other institutional operations.
Industrial engineer serves as bridge between management goals and operational performance.
They combine a solid technical background with a good understanding of business and
management skills integrate people, materials and machinery into productive units.
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Organization structure
Chairman
Factory Head
GM/ IE Finance Production Commercial Head of

Administrator (Industrial) and Maintenance
Personal Engineering Accounts
Store
In charge In charging Planning Head of Head of Sample

Cutting Sewing & Coordination Quality
Finishing
CAD Cutting
Pattern Sample
Sewing Finishing
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2.3.5 SWOT Analysis
SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of
planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses,
opportunities and threats. Strengths and weaknesses are internal factors. Opportunities and
threats are external factors. The SWOT analysis heading provide a good framework for
reviewing strategy, position and direction of a company or business proposition or any other
idea.
Strengths:
Banking Software
Weaknesses:
Opportunities:
other business.
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 The bank can introduce more innovative modern customer service to better survive
inthe competition.
environment.
Threats:
problem.
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2.4 Meghna Textile Mills Ltd.:
Meghna Textile Mills Ltd.(MCML), the first manufacturing enterprise of Bashundhara Group
is one of the largest Textile manufacturing industries in Bangladesh. This organization was
established in 1992 on the bank of Pashur River and in the industrial zone of Mongla Port on
9.83 acres of land to produce Portland Textile . MCML has an excellent communication facility
connecting all parts of the country through river and roads.
MCML has started its commercial operation on 15th January 1996. Following a successful
public offerings, the company was listed with Dhaka Stock Exchange and Chittagong Stock
Exchange, the two bourses of the country in 1995 and 1996 respectively. The Company
markets its products under the registered trade mark “KING BRAND”. The industry enjoys a
unique facility in cargo handling both in receiving raw materials and in dispatching finished
product through its own 02 nos. of jetties suitable for berthing sea going vessels.
At present the production capacity of MCML is approximately 0.79 million MT/annum.
Company Name Meghna knit Composite Ltd.

Legal Status Private Limited Company
BKMEA Membership 834
Number
Membership Type Ordinary Member
Year of Establishment 2006
Head office address House.49,Sharwardy Avenue Block-k,Gulsan-
BaridaraDhaka-1212
Phone :+880-2-9854591-6,Fax :+880-2-9854597
E-mail :info@meghnagroup-bd.com
Web :www.meghnagroup-bd.com
Factory Address Gilarchala, Sreepur, Gazipur, Bangladesh
Factory Area 3,50,000 sq. ft.
Name of the Banker 1) Prime Bank Limited. Principal Branch. 82,
Motijheel Commercial Area, Dhaka-1000,
Bangladesh.
2) United Commercial Bank Ltd. PrincipalBranch.
58, Motijheel C/A, Dhaka-1000, Bangladesh.
Nature of Business Completely 100% export oriented knitwear
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manufacturing & exporting Industry. Also havethe
permission to import materials related with export
Contact Person M Moklasur Rahman pinto - Managing Director
Mohammad MonjurHasan– Director(Marketing&
Business Development)
Manpower 3070
Machinery setup Complete sewing & stitching setup for 32-lines.
Complete setup for producing 6.00 MT knit fabrics
(finish) per day. Computerized Embroidery setup for
own garments production. Complete Screen Printing
setup with latest curing machine for own production.
Export Market UK, USA, Central Europe, Spain, Sweden
Product wise capacity High Fancy/Polo shirt = 2.40 Million Pcs. (Annually)
Basic knit/T-shirt & others = 6.00 Million
Annual Export Turnover USD 40.00 million
Bangladesh's textile and clothing industries face several challenges that make access to their
textile and clothing products unstable, such as a weak government and political turmoil. Private
actors have speculated that Bangladesh will be one of the top sourcing spots for the next 5
years, as the clothing sector has seen a positive growth in terms of RCA and the country has a
low cost of labor.[50] Some Bangladeshi companies have purchased machinery and technology
to increase efficiency, such as computerized cutting and spread machinery, sewing machines,
and barcode-enable inventory management systems. Market access and trade policy have
played a role in the growth of the Bangladeshi Meghna Textile Mills Ltd, as the country's
Textile exports are mainly concentrated in the United States and the European
Union. However, the Multi-Fibre Arrangement (MFA) period showed that only 21 out of 52
firms export to a third market, while 66 out of 69 have exported to at least a third market,
which indicates a diversification in the Bangladeshi Textile industry.
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The aim of the Performance system is to set clear and understandable principles for how much,
to whom and for what to pay, so that employees are motivated to improve their performance,
achieve the set targets and at the same time receive fair Performance, corresponding to the
labour market and organization capabilities.
Meghna Textile Mills Ltd experts have developed job evaluation methodology and have been
implementing it in various organizations since 1996, also provide consultations on Performance
and development of Performance systems. Annual Performance surveys and gained insight into
the Performance systems and Performance levels of more than 600 organizations in the
Baltic’s, in both private and public sectors enable Meghna Textile Mills Ltd to provide
Performance systems that are in line with labour market trends.
Meghna Textile Mills Ltd aim of Performance system development is to help arrange
principles to determine the Performance that is internally fair, motivating and corresponds to
organization’s capabilities.

 Unified principles and clear understanding of employee reward for their work, as well
as for achievements
 Fair Performance, corresponding to the labour market and organization capabilities
 Arguments for explaining the set Performance and employee motivation
 Regulated work environment and employee management in accordance with unified
principles
 Guidelines and discipline for managers for work with their employees
 Optimal division of limited budget
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2.3.5 Brief profile (numbers of worker, area, total machineries, etc)
Total Manpower Summery
Section No of Manpower
Accounts Section 03
Management & stuff 03
HR & Admin, Compliance 23
Marketing & Merchandising 28
Production Stuff 73
Work study 18
Knitting Section 147
Batch Section 53
Dyeing Lab 18
Dyeing Section 82
Dyeing quality & R&D 44
Finishing Section (Dyeing) 135
Cutting Section 159
Sample Section 37
Sewing Section 928
Sewing helper 248
Input man 30
FinishingSection 353
Quality (garments) 346
Store (Garments & Textile) 112
Embroidery section 52
Maintenance 44
Driver 13
Security 38
House keeper 76
Total =3070
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2.3.6 SWOT Analysis
. The SWOT analysis heading provide a good framework for reviewing strategy, position and
direction of a company or business proposition or any other idea.
Strengths:
Banking Software
Weaknesses:
Opportunities:
other business.
environment.
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Threats:
problem.
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Chapter-3
Analysis & Evaluation
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3.1 Economic Earning:
Economic earning defined as net cash flow plus change in market value of the firm’s net assets.
Economic earning measure the interrelation among income, cash flow, and asset. The market
value of the firm’s assets in the certain world equal to the present value future cash flows.
Heidelberg Textile Bangladesh:
788,461
800,000
699,397
700,000 651,468
571,080
600,000
500,000 455,276
359,622
400,000
300,000
200,000
100,000
-
2009
2014 2010
2015 2011
2016 2012
2017 2013
2018 2014
2019
Lafarge Surma Textile Ltd.:
1,200,000
1,000,000
800,000
600,000 1,107,077
1,015,466
400,000 702,833
529,414
200,000 298,476 297,950
- 2014 2015 2016 2017 2018 2019

2009 2010 2011 2012 2013 2014
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Meghna Textile Mills Ltd.:
90,000,000
80,000,000
70,000,000
60,000,000
50,000,000
85,890,277
40,000,000 69,106,885
68,144,470
62,505,690
30,000,000
44,752,648
20,000,000 31,769,948
10,000,000
- 2014 2015 2016 2017 2018 2019

2009 2010 2011 2012 2013 2014
Interpretation: Heidelberg’s economic earnings from 2014 to 2016 are in downward tent and
from 2017 to 2018, it is in increase tent but in 2019 the economic earning is again in downward
sloping.
Lafarge’s economic earnings from 2014 to 2017 are in upward sloping but 2018 and 2019
earnings are downward tent.
Meghna’s economic earnings are in zigzag tent.
It is difficult to interpret, which companies economic earning is better than others. Although
these every companies’ recent economic earnings are not impressible but I prefer to choose
Heidelberg’s economic.
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3.2 Cross Section:
Comparisons of three companies based on the actual potential data are fraught with problems
because of the currency differentials as well as the disparity in size. Comparisons of assets,
working capital, and income cannot provide much insight unless the numbers are scaled.
Cross Section (Balance Sheet)
3.2.1 Liquidity point of views (Current Asset vs. Current Liabilities):
Particulars Lafarge Heidelberg Meghna
Current Assets 33% 63% 77%

Current Liabilities 23% 27% 64%
From Liquidity point of views Heidelberg is more liquid (63%vs27%) compare to Meghna and
Lafarge.
3.2.2 Sales generating ability point of views (Long term Asset vs. Total Asset):

Property, Plant & Equipment 62% 36% 0%
Total Assets 100% 100% 100%
From Sales generating ability point of views Lafarge is more able generate sales (62%vs.100%)
compare to Meghna and Heidelberg.
3.2.3 Solvency point of views (Long-Term Debt vs. Total Asset):
Long-Term Debt 1% 0% 9%
From Solvency point of views Heidelberg is more solvent (0% vs. 100%) compare to Lafarge
and Meghna.
3.2.4 Equity solvency point of views (Total Equity vs. Total Asset):
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Total Equity 66% 64% 21%

From Equity point of views Lafarge is holding more equity (66% vs. 100%) compare to
Meghna and Heidelberg.
3.2.5 Non-productive point of views (good will or intangible asset vs. total asset):
Good will or intangible asset 5% 0% 0%

From Non-productive asset point of views Meghna and Heidelberg holding less amount of
Non-productive asset compare to Lafarge.
Cross Section (Income statement)
3.2.6 Gross Profit point of views (Gross Profit vs. Sales):
Particulars Heidelberg Lafarge Meghna

Sales 100% 100% 100%
Gross Profit 19% 39% 12%
From gross profit point of views Lafarge is more profitable (39% vs. 100%), Compare to
Heidelberg and Meghna.
3.2.7 Operating Profit point of views (Operating Profit vs. Sales):

Sales 100% 100% 100%
Operating Profit 12% 33% 9%
From operating profit point of views Lafarge is more profitable (33% vs. 100%), Compare to
3.2.8 Net Profit point of views (Net Profit vs. Sales):
32 | P a g e
Sales 100% 100% 100%

Net Profit After Tax 11% 24% 3%
From net profit point of views Lafarge is more profitable (24% vs. 100%), Compare to
3.2.9 Fixed Obligation Point Of Views (Fixed Charge Vs Sales):
Sales 100% 100% 100%
Fixed Obligation 3% 5% 3%
From Fixed Obligation Point Of View Heidelberg &Meghna have less obligation (3% vs.
100%), Compare Lafarge.
33 | P a g e
3.3 Ratio Analysis:
The financial statement analysis in which the numerical relationshipbetween two financial
figures of a financial statement is determinedis called ratio analysis. In financial statement
analysis, a number ofratios are commonly used in assessing the financial position andoperating
performance of the firm.The analyst’s primary focus should be the relationships indicated bythe
ratios, not the details of their calculation.
• Activity Analysis
• Liquidity Analysis
• Long-Term Debt and Solvency Analysis
• Profitability Analysis
• Market Ability Analysis
3.3.1 Activity Analysis:
A firms operation activities require investments in both short-term(inventory and AR) and
long-term (property, plant, equipment) asset. Activity ratios describe the relationship between
the firm’s level ofoperations (usually defined as sales) and the assets needed to sustainoperating
activities.The higher the ratio the more efficient the firm’s operations. Fewerassets are needed
to support a given level of operations (sales).Activity ratios can also be used to forecast a firm’s
capitalrequirements (both operating and long-term)
Some points to be noted:
 Growing / New / Startup Company: Initial turnover may be low, as their level of
operations is below their productive capacity. As sales grow, however turnover will
continually improve until the limits of the firm’s initial capacity are reached.
 Mature or Stable Company: The mature firm’s turnover is stable.
 Declining company: The turnover ratio is low as the sales decreased by the time pass
 Two firms with similar capacity and efficiency may show differing ratios. Because
price was different when assets were purchased. The firm with older assetshas higher
turnover ratios, as accumulated depreciation has reduced value of its assets. The firm
with new assets has lower turnover ratios.
 It is better to take gross fixed asset rather than net fixed assets. The old machine might
have high market value but after depreciation it becomes low. Which may results in a
higher turnover ratio.
34 | P a g e
Short-Term (Operating) Activity Ratios:
3.3.1.1 Inventory Turnover Ratio:
Measures the efficiency of the firm’s inventory management. Ahigher ratio indicates that
inventory does not remain in ware housebut turns over rapidly from the time of acquisition to
sale.
Cost of goods Sold
Inventory turnover ratio =
Average inventory
This ratio is affected by the choice of accounting method.
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
3.721 4.429 3.521 4.549 4.044
3.8872 4.1589
Lafarge 9 6 3 1 7
6.288 5.249 6.397 8.278 6.766
7.4065 6.9804 5.9991
Heidelberg 4 0 5 5 7
5.062 6.942 6.960 13.419 4.362 7.185
6.3681
Meghna 2 2 9 8 5 9
14.0000
12.0000
10.0000
8.0000
Meghna
Heidelberg
6.0000 Meghna
4.0000
2.0000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Graph 1: Inventory Turnover Ratio
Interpretation:Compare to Company average, Meghna is more efficient (7.1859 Times) to

converted its inventory into finished goods.
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3.3.1.2 Average No, of Days Inventory in Stock:
This ratio can be used to calculate the average number of days inventory is held until it is sold.
As low as better it is.
Average no . of days inventory in stock =

365
Inventory turnover
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 98.06 82.399 103.65 93.897 87.763 80.234 91.003
Heidelberg 58.04 69.537 57.053 49.280 52.289 44.090 55.049 67.8674
Meghna 72.10 52.57 52.435 27.198 57.31 83.667 57.549
120.0000
100.0000
80.0000
Lafarge
60.0000
Heidelberg
Meghna
40.0000
20.0000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Graph 2: Average No, of Days Inventory in Stock
Interpretation: Compare to Company average, Heidelberg is more efficient (55.049 Days) to

convert its inventory into finished goods.
36 | P a g e
3.3.1.3 Receivables Turnover Ratio:
Measures the effectiveness of the firm’s credit policy and also indicate the level of investments
in receivables needed to maintain the firm’s sales level. Receivable turnover should be
computed using only trade receivables in the numerator in order to evaluate operating
performance.
Sales
Re ceivables Tuerover =
Average Re ceivable
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 19.438 42.467 3.7823 4.940 4.570 3.613 13.135
Heidelberg 12.281 14.120 10.628 11.86 11.50 10.56 11.827 11.297
Meghna 16.410 13.196 7.6759 5.918 5.516 4.864 8.930
45.0000
40.0000
35.0000
30.0000
25.0000
20.0000
Lafarge
15.0000
Heidelberg
10.0000 Meghna
5.0000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Graph 3: Receivables Turnover Ratios
Interpretation:Compare to Company average, Lafarge is more efficient (13.135 Times) to

converted receivables into cash.
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3.3.1.4 Average No, of Days Receivables Outstanding:
This ratio is used to evaluate the firm’s ability to collect its credit sales in a timely manner. It
also called Days Sales Outstanding (DSO). DSO represents the average length of time that the
firm must wait after making a credit sale before receiving cash – that is, its average collection
period.
Average no. of Days Receivables Outs tan ding =

365
Re ceivables Turnover
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
96.501
18.7775 8.5949 73.8807 79.8537 100.9999 63.1013
Lafarge 2
34.341 45.4625
29.7200 25.8482 30.7751 31.7172 34.5426 31.1573
Heidelberg 0
Meghna 22.2420 27.6596 0.0000 61.6677 66.1691 75.0349 42.1289
120.0000
100.0000
80.0000
Lafarge
60.0000
Heidelberg
Meghna
40.0000
20.0000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Graph 4: Average No, of Days Receivables Outstanding
38 | P a g e
Interpretation:Compare to Company average Heidelberd (31.1573 Days) is better than other
companies.
3.3.1.5 Accounts Payable Turnover:
The accounts payable turnover ratio shows the number of times that accounts payable are paid
throughout the year. A falling turnover ratio is a sign that the company is taking longer to pay
off its suppliers, which could be a bad sign. A rising turnover ratio means that the company is
paying off suppliers at a faster rate, which is good.
Purchase
Payable Turnover =
Acconts Payable
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 2 3 2 3 2 3 2
Heidelberg 3.4144 3.8615 3.7344 4.6008 3.6262 3.4761 4
5
10.341 13.737
9.3646 9.3141 9.7990 5.7992 10
Meghna 4 0
14
12
10
8
Lafarge
Heidelberg
6 Meghna
0
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Graph 5: Accounts Payable Turnover
39 | P a g e
Interpretation:Compare to Company average Lafarge is more efficient (2 Times) to payout
accounts payable into purchases.
3.3.1.6 Average No. of Days Payables Outstanding:
The average amount of time it takes a company to pay its accounts payable. A company's
accounts payable are short-term liabilities resulting from purchases the company has made on
credit.
Average No . of Days Payables Outstan ding =

365
Payables Turnover
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 191.43 130.46 152.543 138.741 147.660 142.418 150.542
Heidelberg 106.90 94.522 97.739 79.334 100.657 105.003 97.359 95.979
Meghna 38.976 39.188 37.248 35.294 62.9392 26.570 40.0363
200.0000
180.0000
160.0000
140.0000
120.0000
Lafarge
100.0000
Heidelberg
80.0000 Meghna
60.0000
40.0000
20.0000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Graph 6: Average No, of Days Payables Outstanding
40 | P a g e
Interpretation:Compare to Company average Lafarge is efficient but we should follow the
moderate level in which Heidelberg is more efficient (97.359).
3.3.1.7 Working Capital Turnover:
Working capital turnover is a summery ratio that reflects the amount of operating capital
needed to maintain a given level of sales. Only operating assets and liabilities should be used to
compute this measure. Short-term debt, marketable securities, and excess cash should be
excluded as they are not required for operating activities.
Working CapitalTurnover =
Sales
AverageWorking Capital
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
34.641 64.155 15.597
17.1216 -19.168 -17.574 14.4112
Lafarge 4 1 8
6.9865
Heidelberg 3.6060 2.8983 3.3622 2.9605 2.0644 2.7187 2.9350
Meghna 2.6011 3.2995 2.6241 2.7014 1.9978 1.3358 2.4266
70.0000
60.0000
50.0000
40.0000
30.0000 Lafarge
Heidelberg
20.0000 Meghna
10.0000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
-10.0000
-20.0000
41 | P a g e
Graph 7: Working Capital Turnover
Interpretation:Compare to Company average Lafarge is more efficient (15.5978 Times) to

utilizing working capital to generate sales.
Long-Term (Investment) Activity Ratios:
3.3.1.8 Fixed Assets Turnover Ratio:
These ratios measure the efficiency of long term capital investment to generate sales. It reflects
the level of sales generated by investments in productive capacity.
Sales
Fixed Asset Turnover =
Fixed Assets
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 0.5141 0.3933 0.4414 0.7958 0.8877 0.9334 0.6610
Heidelberg 2.7608 3.3710 3.5710 3.2017 2.7694 2.8932 3.0944 2.8482
Meghna 4.2897 4.3774 4.9925 5.9236 4.9807 4.1718 4.7893
6.0000
5.0000
4.0000
Lafarge
3.0000
Heidelberg
Meghna
2.0000
1.0000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Graph 8: Fixed Assets Turnover Ratio
42 | P a g e
Interpretation:Compare to Company average Meghna is more efficient (4.7893 Times) to
utilizing to fixed assets to generate sales.
3.3.1.9 Total Assets Turnover Ratio:
The total assets turnover indicates the efficiency with which the firm uses its assets to generate
sales. Generally the higher a firm’s total assets turnover, the more efficiently its assets have
been used.
Sales
Total asset turnover =
Total assets
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 0.4363 0.3157 0.3286 0.5744 0.5955 0.5793 0.4716
Heidelberg 1.1951 1.1586 1.0631 1.1856 0.9286 1.0326 1.0939 0.9776
Meghna 1.4189 1.5828 1.4844 1.5855 1.1819 0.9506 1.3674
1.6000
1.4000
1.2000
1.0000
Lafarge
0.8000
Heidelberg
Meghna
0.6000
0.4000
0.2000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
43 | P a g e
Graph 9: Total Assets Turnover Ratio
Interpretation:Compare to Company average Meghna is more efficient (1.3674 Times) to

utilizing to total assets to generate sales.
3.3.2. Liquidity Analysis:

Short-term lenders and creditors must assess the ability of a firm to meet its current obligations.
The ability depends on the cash resources available as of the balance sheet date and the cash to
be generated through the operating cycle of the firm.
Length of Cash Cycle:
• Operating Cycle:No, of day’s inventory in stock + Days sales outstanding.
• Cash Cycle: Operating cycle - No. of days payable outstanding
 The shorter the cycle, the more efficient the firm’s operations and cash management.
 The longer cycles may be indicative of cash shortfalls and increased financing costs.
44 | P a g e
3.3.2.1 Current Ratio:
It measures the firm’s ability to meet its short term obligation. Generally the higher the current
ratio, the more liquid the firm is considered to be.
Current Assets
Current Ratio =
Current Liabilities
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 0.3098 0.2271 0.4255 0.4698 0.8508 1.4242 0.6179
Heidelberg 2.0345 2.3786 2.1429 2.6407 2.9134 2.3281 2.4064 1.4208
Meghna 1.2949 1.2035 1.1933 1.2487 1.2905 1.1984 1.2382
3.0000
2.5000 Graph 10:

Current
2.0000 Ratio
Lafarge
1.5000
Heidelberg
Meghna
1.0000
0.5000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Interpretation: Compare to Company average Heidelberg is better to paying current debt ability
than others companies.
45 | P a g e
3.3.2.2 Quick Ratio:
A more conservative measure of liquidity is the quick ratio. It actually measures the immediate
short-term debt paying ability.
The included assets are called quick asset because they can be quickly converted to cash.
Inventory and prepaid expenses are excluded. If this ratio is much lower than current ratio, then
the firm is facing liquidity problem. It may have higher inventory that the firm can\ not sell.
Cash + Mar . Sec + A/C Re ceiables

Quick Ratio =
Current Liabilities
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 0.2236 0.1425 0.4231 0.4698 0.8508 1.4242 0.5890
Heidelberg 1.5876 1.7703 1.5955 1.9317 2.1590 1.7431 1.7979 1.0287
Meghna 0.7623 0.6539 0.6971 0.7007 0.7205 0.6613 0.6993
2.5000
2.0000
1.5000
Lafarge
Heidelberg
1.0000 Meghna
0.5000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
46 | P a g e
Graph 11: Quick Ratio
Interpretation: Compare to Company average Heidelberg (17979) is better to current debt

paying ability with cash than other companies.
3.3.2.3 Cash Ratio:
This is the most conservative measure of liquidity. Only actual cash and securities easily
convertible to cash are used to measure cash resources.
Cash + Marketable Securities

Cash Ratio =
Current Liabilities
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 0.1733 0.1295 0.2242 0.2148 0.4586 0.7544 0.3258
Heidelberg 1.6130 1.9665 1.6909 2.1750 2.5306 1.9376 1.9856 0.9009
Meghna 0.5915 0.4278 0.3687 0.2440 0.3580 0.3578 0.3913
3.0000
2.5000
2.0000
Lafarge
1.5000
Heidelberg
Meghna
1.0000
0.5000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Graph 12:
Cash Ratio
47 | P a g e
Interpretation: Compare to Company average Heidelberg (1.9356) is better to current debt
paying ability with cash than other companies.
3.3.2.4 Cash Flow from Operation Ratio:
This ratio measures liquidity by comparing actual cash flows- instead of current and potential
cash resources, with current liabilities. This ratio avoids the issues of actual convertibility of
cash turnover and the need for minimum levels of working capital (cash) to maintain operation.
Cash FlowFromOperation Ratio 

Cash Flow from Operation
Current Liabilitie s
Company name/ Com.

Mean
Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 0.3255 -0.0989 -0.1834 0.4271 0.7403 0.7812 0.3320
Heidelberg 1.2569 0.6150 0.5417 0.7013 0.9273 0.6118 0.8084 0.3865
Meghna -0.0546 0.1530 -0.1865 0.0837 0.0608 0.0583 0.0191
1.4000
1.2000
1.0000
0.8000
Lafarge
0.6000 Heidelberg
Meghna
0.4000
0.2000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
-0.2000
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Graph 13: Cash Flow from Operation Ratio
Interpretation: Compare to Company average of Heidelberg (.6571) is better than other

companies.
3.3.2.5 Defensive Interval:

It compares the currently available quick sources of cash with estimated outflows needed to
operate the firm’s projected expenditure.
The defensive interval represents a worst-case scenario indicating the number of days a firm
could maintain the current level of operations with its present cash resources but without
considering any additional revenues.
Defensive Interval =
Cash + Mar . Sec + A /C Re ceivable
365 X
Pr ojected Expenditure
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
2273.1
505.20 223.47 732.40 947.07 1253.98 989.21
Lafarge 1
4108.6 5133.7
4035.64 4596.30 5368.17 5593.81 4806.05 2691.43
Heidelberg 0 9
2745.3 2015.1
3235.34 2024.60 1748.64 1905.17 2279.03
Meghna 5 1
49 | P a g e
6000.00
5000.00
4000.00
Lafarge
3000.00
Heidelberg
Meghna
2000.00
1000.00
0.00
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Graph 14: Defensive Interval
Interpretation: Compare to company average Heidelberg is better because if cash flow are not
generate Heidelberg can run his activities more than other companies.
3.3.3 Long-Term Debt & Solvency Analysis:

The analysis of a firm’s capital structure is essential to evaluate its long-term risk and return
prospect. Leveraged firms accrue excess return to shareholder, when ROI is greater than the
cost of debt. The benefits of financial leverage bring additional risks, in the form of fixed cost
(interest on debt) may affect profitability if the demand or profit margins decline.
The inability to meet those obligations may lead the company to default and possible
bankruptcy.
3.3.3.1 Debt to Total Capital:
Total Debt
Debt to Total Capital =
Total Capital
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 3.7184 4.7582 2.0308 1.0113 0.6279 0.2016 2.0579
0.8932
Heidelberg 0.0235 0.0213 0.0215 0.0212 0.0136 0.0171 0.0197
50 | P a g e
Meghna 0.6076 0.5665 0.6346 0.5975 0.5751 0.6307 0.6020
5.0000
4.5000
4.0000
3.5000
3.0000
Lafarge
2.5000
Heidelberg
2.0000 Meghna
1.5000
1.0000
0.5000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Graph 15: Debt to Total Capital
Interpretation: Compare to the Company average Heidelberg (0.0197) is better than other
companies.
3.3.3.2 Times Interest Earned:
This ratio measures the firm’s ability to meet interest payments when they become due. Higher
is good. If the debt-equity ratio is higher than this ratio will be lower.
This ratio often referred to as the interest coverage ratio measures the protection available to
creditors as the extent to which earnings available for interest cover interest expense.
Times Interest Earned =

EarningsBefoerInterst∧Taxes ( EBIT )
Interest Expense
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
12.461 4.9208
2.7423 -1.4376 0.1550 4.0229 5.1625 3.8511
Lafarge 4
Heidelberg 52.302 0.0000 0.0000 0.0000 0.0000 0.0000 8.7171
3
51 | P a g e
Meghna 3.1597 3.2278 1.4700 1.9149 1.6968 1.6971 2.1944
60.0000
50.0000
40.0000
30.0000 Lafarge
Heidelberg
20.0000 Meghna
10.0000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
-10.0000
Graph 16: Times Interest Earned
Interpretation: Compare to the Company average, Heidelberg is more efficient to pay of interest
expense than other companies.
3.3.3.3 Capital Expenditure Ratio:
This ratio measures the relationship between the firm’s cashgenerating ability and its
investment expenditures. To the extent theratio exceeds 1; it indicates the firm has cash left for
debtrepayment or dividends after capital expenditures.
CashFromOperation(CFO )
Capital Expenditure Ratio =
Capital Expenditure
Company name/ Com.

Mean
Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge - - -2.6466 8.0926 7.4420 10.072 3.2272 -1.9350
0.1713 3.4262 6
52 | P a g e
- 13.685 - - -
8.1690 0.4667
Heidelberg 0.8001 8 1.4759 63.065 8.6974
- -
0.0835 -5.3504 1.9557 1.3686 1.3378
Meghna 1.4041 0.3348
20.0000
10.0000
0.0000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
-10.0000
-20.0000 Lafarge
Heidelberg
-30.0000 Meghna
-40.0000
-50.0000
-60.0000
-70.0000
Graph 17: Capital Expenditure Ratio
Interpretation: Compare to the Company average, Lagarge has the more ability to generate cash
against fixed expenditures.
3.3.3.4 Cash from Operation (CFO)-to-Debt Ratio:
This ratio measures the coverage of principal repayment requirements by the current CFO. A
low CFO-to-Debt ratio could signal a long-term solvency problem, as the firm does not
generate cash internally to repay its debt.
CFO
CFO to Debt =
Total Debt
Company name/ Com.
Mean
Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 0.236 -0.077 -0.152 0.526 1.231 2.081 0.641
3.525
Heidelberg 14.756 7.564 6.664 7.686 12.897 11.970 9.914
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Meghna -0.045 0.143 -0.173 0.082 0.062 0.059 0.021
16.000
14.000
12.000
10.000
8.000 Lafarge
Heidelberg
6.000 Meghna
4.000
2.000
0.000
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
-2.000
Graph 18: CFO-to-Debt Ratio
Interpretation: Compare to the Company average Heidelberg holding more CFO to generate
cash internally to repay its debt.
3.3.4 Profitability Analysis:

Equity investors are concerned with the firm’s ability to generate, sustain and increase profit.
Profitability can be measured in several differing but interrelated dimensions. There is a
relationship of a firm’s profits to sales and also to the investment required to generate them.
Return on Sales:
One measure of profitability is the relationship between the firm’s costs and its sales.
4.3.4.1 Gross Profit Margin:
54 | P a g e
It shows the relationship between the sales and manufacturing or merchandising cost. Higher
ratio is better.
Gross Profit
Gross M arg in =
Sales
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 38% 10% 9% 39% 42% 39% 30%
Heidelberg 25% 24% 16% 19% 23% 19% 21% 20%
Meghna 10% 8% 9% 11% 11% 12% 10%
45%
40%
35%
30%
25%
Lafarge
Heidelberg
20% Meghna
15%
10%
5%
0%
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Graph 19: Gross Profit Margin
Interpretation: Compare to the Company average Lafarge’s (30%) gross profit is better than
other companies.
3.3.4.2 Operating Income:
It shows the firm’s profitability from the operations of its core business. Excluding the effect
of:
• Investment (income for affiliates or assets sales),
• Financing (interest expenses),
• Tax position.
OperatingIncome
Operating M arg in =
Sales
55 | P a g e
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 32% -20% 3% 31% 35% 33% 19%
Heidelberg 20% 18% 10% 14% 17% 12% 15% 14%
Meghna 6% 5% 5% 6% 8% 9% 6%
40%
30%
20%
Lafarge
10% Heidelberg
Meghna
0%
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
-10%
-20%
Graph 20: Operating Income
Interpretation: Compare to the Company average Lafarge’s (19%) operating income is better
than any other two companies.
3.3.4.3 Profit Margin:
It shows that the firm is independent of both the financing and tax positions.
EBIT
M arg inBeforeInterest ∧Tax =
Sales
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Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 19% -33% -38% 24% 28% 31% 5%
Heidelberg 19% 19% 13% 17% 20% 16% 17% 8%
Meghna 4% 1% 1% 3% 3% 4% 3%
40%
30%
20%
10%
Lafarge
0% Heidelberg
2009 2010 2011 2012 2013 2014 Mean Com. Avg. Meghna
-10%
-20%
-30%
-40%
Graph 21: Profit Margin
Interpretation: Compare to the Company average Heidelberg’s profit before interest and tax is
better than other companies.
3.3.4.4 Pretax Margin:
This ratio is calculated after financing cost (interest expenses) but prior to income taxes.
EarningBeforeTax ( EBT )
Pr etaxM arg in =
Sales
57 | P a g e
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 19% -33% -38% 24% 28% 31% 5%
Heidelberg 19% 19% 13% 17% 20% 16% 17% 8%
Meghna 4% 1% 1% 3% 3% 4% 3%
40%
30%
20%
10%
Lafarge
0% Heidelberg
-10%
-20%
-30%
-40%
Graph 22: Pretax Margin
Interpretation: Compare to the Company average after financial cost Heidelberg’s pretax
margin (17%) is better than other companies.
3.3.4.5 Net Profit Margin:
This ratio measures the percentage of each dollar remaining after all costs and expenses,
including interest, taxes, and preferred dividends, have been deducted.
NetIncome
Net Pr ofitM arg in =
Sales
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Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 13% -29% -36% 17% 22% 24% 2%
Heidelberg 12% 12% 9% 12% 15% 11% 12% 5%
Meghna 3% 1% 1% 2% 2% 3% 2%
30%
20%
10%
0% Lafarge
2009 2010 2011 2012 2013 2014 Mean Com. Avg. Heidelberg
-10% Meghna
-20%
-30%
-40%
Graph 23: Net Profit Margin
Interpretation: Compare to the Company average after deducting cost and expenses
Heidelberg’s net profit (12%) is better than other companies.
Return on Investment (ROI):
ROI measures the income of the firm relative to its revenues (Profit) and invested capital
required to generate them.
3.3.4.6Return On Assets (ROA):
ROA compares income with total assets. It can be interpreted in two ways-
• It measures management’s ability and efficiency in using the firm’s assets to generate
(operating) profits.
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• It reports the total return accruing to all providers of capital (debt and equity)
independent of the sources of capital.
NetIncome+ AfterTexInterestCost
ROA =
AverageTotalAssets
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 6% -9% -12% 10% 13% 14% 4%
Heidelberg 14% 14% 9% 14% 14% 12% 13% 6%
Meghna 4% 1% 2% 3% 3% 3% 3%
15%
10%
5%
Lafarge
0% Heidelberg
-5%
-10%
-15%
Graph 24: Return on Assets
Interpretation: Compare to the Company average Heidelberg is in better position compares

income with total assets than other companies.
3.3.4.7 Return on Total Capital (ROTC):
Return on total capital uses the sum of external debt and equity instead of total assets as the
base against which the firm’s return is measured.
ROTC measures profitability relative to all (non-trade) capital providers.
ROTC =
EBIT
Average (TotalDebt+Stockholders' Equity )
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Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 10% -12% -14% 16% 22% 24% 8%
Heidelberg 34% 32% 20% 28% 27% 25% 28% 13%
Meghna 7% 2% 3% 6% 5% 4% 4%
35%
30%
25%
20%
15%
Lafarge
10% Heidelberg
Meghna
5%
0%
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
-5%
-10%
-15%
Graph 25: Return on Total Capital
Interpretation: Compare to the Company average Heidelberg’s (28%) the sum of external debt
and equity instead of total assets is better than other companies.
3.3.4.8 Return on Equity (ROE):
The return on total stockholders’ equity excludes debt in thedenominator and uses either pretax
income or net income. ROEmeasures the profitability of owners’ investment.
Pr etaxIncome
ROE =
AverageStockholders ' Equity
OR,
NetIncome
ROE 
AverageSto ckholders ' Equity
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Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 22% -59% -34% 22% 23% 21% -1%
Heidelberg 21% 21% 14% 20% 20% 18% 19% 11%
Meghna 20% 7% 10% 19% 14% 12% 14%
30%
20%
Graph 26: Return on
10% Equity
0%
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
-10% Lafarge
Heidelberg
-20% Meghna
-30%
-40%
-50%
-60%
Interpretation: Compare to the Company average Heidelberg’s return on total stockholders’

equity excludes debt is better than other companies.
3.3.5 Market Ability Ratio:

Market ratios allow the analyst to understand how other investors feel about owning a share of
a company's stock. They demonstrate the relationship between the price per share and its
earnings, growth and assets. As such it's a good indicator of the relative value of a company.
3.3.5.1 Earnings per Share (EPS):
Earnings per share is probably is the most commonly used corporate performance statistic for
publicly traded firms. It is used to compare operating performance and for valuation purposes
62 | P a g e
BasicEPS=
Earning Available ForCommon Shares
WeightedAverageCommon Shares Outs tan ding
either directly or indirectly or together with market prices in the familiar form of price/earnings
(P/E) ratio.
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 1.12 -1.84 -2.46 1.60 2.19 2.43 0.51
Heidelberg 150.60 176.77 13.27 22.85 15.06 17.68 66.04 37.20
Meghna 58.66 22.29 29.56 62.82 52.29 44.78 45.07
180.00
160.00
140.00
120.00
100.00
80.00
Lafarge
60.00 Heidelberg
40.00 Meghna
20.00
0.00
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
-20.00
Graph 27: Earnings per Share
Interpretation: Compare to the Company average Heidelberg is better than other companies
because their share price is higher than the other so Heidelberg is better position to the EPS.
3.3.5.2 Price Earnings Ratio:
The Price-to-Earnings Ratio or P/E ratio is a ratio for valuing a company that measures its
current share price relative to its per-share earnings.
The price-earnings ratio can be calculated as:
Market Pr ice
Pr iceEarningRatio =
EarningPershare
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Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafarge 451.24 -306.09 -10.82 20.62 15.28 50.66 36.82
20.701 11.584 25.287
14.293 19.2879 28.2541 19.90
Heidelberg 2 4 6 21.66
15.524 1.6681 2.7310
22.2299 4.72199 2.70424 8.26
Meghna 8 3 4
500.00
400.00
300.00
200.00
100.00 Lafarge
Heidelberg
0.00 Meghna
-100.00
-200.00
-300.00
-400.00
Graph 28: Price Earnings Ratio
Interpretation: Compare to the Company average Lafarge is better than other companies and so
investors are invest higher amount.
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3.3.5.3 Book Value per Share:
A measure used by owners of common shares in a firm to determine the level of safety
associated with each individual share after all debts are paid accordingly.
Formula:
TotalShareholderEquity
BookValuePerShare =
No. ofShare
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafagre 4.98 3.11 7.25 7.22 9.51 11.41 7.25
841.85 111.49 132.58
Heidelberd 703.096 93.1473 115.461 332.94
9 7 5 124.30
29.838 33.809
Meghna 29.9148 30.0267 36.538 36.0988 32.70
4 2
900.00
800.00
700.00
600.00
500.00
Lafarge
Heidelberg
400.00
Meghna
300.00
200.00
100.00
0.00
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Graph 29: Book Value per Share
Interpretation: Compare to the Company average Heidelberg is better than other companies.
Because each shareholder will get higher amount then other companies.
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3.3.5.4 Market to Book Value Ratio:
The market to book financial ratio, also called the price to book ratio, measures the market
value of a company relative to its book or accounting value. The market value of the company
is its value at any point in time as determined by the financial marketplace. The book value, or
historical value, is almost always lower than the market value since some assets may be off-
balance sheet
Market Price
MarkettoBookValueRatio =
BookValuePerShare
Company Com.
Mean
name/ Year 2014 2015 2016 2017 2018 2019 Avg.
Lafagre 101.39 181.15 3.67 4.56 3.52 10.78 50.84
4.3466 2.3740 2.8721
Heidelberd 3.06146 2.74726 4.32527 3.29
3 6 2 21.94
11.595 3.0997 3.9082
Meghna 43.5904 4.64919 3.35468 11.70
8 5 6
200.00
180.00
160.00
140.00
120.00
Lafagre
100.00
Heidelberd
80.00 Meghna
60.00
40.00
20.00
0.00
2009 2010 2011 2012 2013 2014 Mean Com. Avg.
Graph 30: Market to Book Value Ratio
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Interpretation: Compare to the Company average Heidelberg is better than other companies.
Because investor are willing to invest 3.29 tk. against each of book value per share.
3.4 Altman Z-Score:
3.4.1 Meaning of Altman Z-Score:
The Altman Z-Score is an analytical representation created by Edward Altman in the 1960s
which involves a combination of five distinctive financial ratios used for determining the odds
of bankruptcy amongst companies. Most commonly, a lower score reflects higher odds of
bankruptcy.
3.4.2 Formula for Z-Score:
The Z-Score can be characterized as a linear combination of 4-5 common business ratios.
These ratios are weighted by coefficients which are estimated by spotting a set of firms which
had declared a bankruptcy. Thereafter, a matched sample of firms is collected for the surviving
firms, with matching by industry and estimated assets. The formula for Z-Score and prediction
of bankruptcy was given by Edward I. Altman in 1968. This formula for Altman Z-Score is
helpful in calculating and predicting the probability that a company will go into bankruptcy
within two years.
5-factor model of the Altman Z-score (for a private manufacturing firm):
Z-score = 0.717T1 + 0.847T2 + 3.107T3 + 0.42T4 + 0.998T5
Where,
T1 = Working Capital / Total Assets

T2 = Retained Earnings / Total Assets
T3 = Earnings Before Interest and Taxes / Total Assets
T4 = Equity / Total Liabilities
T5 = Sales / Total Assets
Zones of Discrimination:
 1.23 or less – “Distress” Zone

 from 1.23 to 2.9 – “Grey” Zone
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 2.9 or more – “Safe” Zone
3.4.3 Interpretation of Altman Z-Score:
The Z-Scores are helpful in predicting corporate defaults as well as an easy-to-calculate

measure of control for financial distress status of companies in academic studies. A Z-Score
above 2.6 (2.9) indicates a company to be healthy. Besides, such a company is also not likely to
enter bankruptcy. However, Z-Scores ranging from 1.1-2.6 (1.23-2.9) are taken to lie in the
grey area.
Altman’s Z-Score indicator can be easily calculated using Ready Ratios financial analysis
software which also makes the conclusion on the result.
3.4.4 Accuracy and effectiveness:
In the initial stages, the Altman Z-Score was found to be 72% exact in predicting bankruptcy
two years preceding the event, including a Type II error (false positives) of 6%. However, the
model was found to be about 80-90% accurate in the process of predicting bankruptcy one year
preceding the event, in a series of ensuing tests including three distinctive time periods over the
next 31 years. However, a type II error, classifying the company as bankrupt while it is not
going so, of 15-20% was also included in these tests.
3.4.5 (5-Factor model of the Altman Z-score) Lafarge, Heidelberg &Meghna:
Z-score = 0.717T1 + 0.847T2 + 3.107T3 + 0.42T4 + 0.998T5
Company Com.
Mean
Name 2014 2015 2016 2017 2018 2019 Avg.
0.8679 0.0894 0.4625 1.5604 1.8360 2.1411
Lafarge 9 1 8 3 6 8 1.1596
Heidelber 3.3547 3.3700 2.9519 3.4707 3.3078 3.0029 2.149891
g 7 2 2 6 0 4 3.2430 6
2.1248 2.1257 2.0807 2.2994 1.8940 1.7573
Meghna 9 4 1 3 1 1 2.0470
3.5
3
Lafarge
2.5
2 Heidelberg
1.5
Meghna
1
0.5
0 68 | P a g e
Lafarge is in "Distress" Zone. Because there z-score is 1.506148. This is less than 1.23
Meghna is in "Grey" Zone. Because there z-score is 2.0470216. This is From 1.23 to 2.9
Heidelberg is in "Safe" Zone. Because there z-score is 3.2430386. Which is more then 2.09
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4.4 SWOT Analysis of Lafarge Surma Textile Ltd.:
This SWOT Analysis of Lafarge Surma Textile provides a strategic SWOT analysis of the
company's businesses and operations. This SWOT analysis shows strengths, weaknesses,
opportunities and threats. This SWOT analysis of Lafarge Surma Textile can provide a
competitive advantage.
Strengths:
 Monetary assistance provided.

 Experienced business units.
 Domestic market.
Weaknesses:
 High loan rates are possible.

 Future debt rating.
 Tax structure.
 Cost structure.
 Future profitability.
Opportunities:
 Growing economy.
 Venture capital.
 New markets.
4Threats:
 Growing competition and lower profitability.

 Increasing rates of interest.
 Rising cost of raw materials.
 Price changes.
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4.5 SOWT Analysis of Heidelberg Textile Bangladesh Ltd.:
This SWOT analysis shows strengths, weaknesses, opportunities and threats. This SWOT
analysis of Heidelberg Textile Bangladesh Ltd can provide a competitive advantage.
Strengths:
 High profitability and revenue.

 Reduced labor costs.
 High growth rate.
 Monetary assistance provided.
 Skilled workforce.
 Existing distribution and sales networks.
Weaknesses:
 Competitive market.
 Brand portfolio.
 Productivity.
Opportunities:
 Growing demand.
 Growing economy.
 New products and services.
 New markets.
 Growth rates and profitability.
Threats:
 Technological problems.
 Increase in labor costs.
 Government regulations.
 Price changes.
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4.6 SWOT Analysis of Meghna Textile Mills Ltd.:
Meghna Textile Mills limited is a prominent Textile brand in Bangladesh. Though King Brand
Textile already covered the whole country, the management feels the necessity of SWOT
analysis in perspective of the present market condition.
Strengths:
 Large production capacity to meet the customers need.
 The quality of King Brand Textile is better than other brands.
 It uses environment friendly paper Textile bag.
 It measures its quality by using modern instrument in the laboratory.
 Skilled management & financial soundness.
 Corporate image.
 The production of the Textile in Meghna is completely automated.
 The company has obtained the ISO 9001- 2000 making it a reliable producer
for production of quality products international market.
 Meghna has reached every possible nooks and corners of Bangladesh.
 Well-developed distribution channel is one of the strengths of Meghna Textile Mills

Limited.
 Meghna Textile has an effective and efficient Marketing & Sales department.
Weaknesses:
 High price than national competitors.
 The location where the Textile plant of Meghna Textile Mills Limited is located is far
from Dhaka City.
 Promotional activities are not strong in electronic media, printing media or outdoor
activities.
 ReplaTextile of wastage or damaged products is not quick.
 No warehouse.
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 Transportation for the company is main problem at present for the company.
Opportunities:
 Industrial product had very good image. So image can help to introduce new consumer.
 Advertising can help to increase the market share.
 The demand of Textile outside Bangladesh has been increasing rapidly,

providingMeghna Textile a good chance to explore these markets.
 Possible to improve the distribution system. Meghna Textile Mills may be the chance
to makes the position of market the existing competitors who are market challengers
and leader.
 Followers may pose threat by aggressive price cut policy.
 Promotional activities are strong of the other competitors.
Threats:
 Increase the price of raw materials & depend on international market for raw materials.
 Customer‘s intention to buy foreign products.
 Supplier dependency.
The SWOT analysis comprises of the organization’s internal strength and weaknesses and
external opportunities and threats. SWOT analysis gives an organization an insight of what they
can do in future and how they can compete with their existing competitors. This tool is very
important to identify the current position of the organization relative to others, who are playing
in the same field and also is used in the strategic analysis of the organization.
Financial and Strategic SWOT Analysis provides a comprehensive insight into the company’s
history, corporate strategy, business and financial structure, management and operations. The
report contains a detailed SWOT analysis, information on the company’s products and services,
key competitors, as well as detailed financial information.
73 | P a g e
Chapter-4
Findings, Recommendation & Conclusion
74 | P a g e
4.1 Findings:
 Comparisons of three companies based on the actual potential data (Balance Sheet)
Heidelberd is more liquid and solvency point of view it is more solvent, Lafarge is
more able to generate sales and it is holding rich amount of equity.
 Comparisons of three companies based on the actual potential data (Income
Statement) Lafarge holding rich amount of profit compare to Heidelberg and
Maghna.
 The Return on Equity (ROE) ratio shows that Heidelberg is more profitable than
Lafarge and Meghna. Which indicates that Heidelberg return on Stockholder’s
equity excludes debt is better than other companies.
 From the Return on Assets (ROA) ratio of these three companies, we can say that
Heidelberg is in better position compares income with total assets than Lafarge and
Meghna.
 From the profitability ratios of these three Textile companies (return on sales), it
can be concluded that Lafarge gross profit margin and operating income increase
because their COGS and operating expense are low than Heidelberg and Meghna.
On the other hand profit margin, pretax margin & net profit margin efficiency those
ratios Heidelberg has better position compare to Lafarge and Meghna.
 Earnings per Share (EPS) of Heidelberg Ltd. have increased compare to Lafarge and
Meghna because their net income available to common.
 Lafarge’s Price Earnings Ratio is in better position compare to other’s company, so
investor willing to invest in Lafarge. Heidelberg’s each shareholder will get higher
amount than other companies in the ratio of book value o market ratio & market to
book value ratio.
 Altman Z-Score is the combination of five distinctive model used to measure
bankruptcy level, a lower score reflects higher odds of bankruptcy. Here, Heidelberg
is in safe zone, Lafarge is in Grey zone but Meghna is in Distress zone.
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4.2 Recommendations:
 Lafarge, Heidelberg &Meghna should introduce more productation capacity and

services to their customers.
 They should provide faster services to their walking customers so that they should be
more loyal.
 Lafarge &Meghna should minimize their interest expense and other operating expenses.
 Lafarge’s &Meghna’s (especially Meghna) profit rate is lower compare to Heidelberg
Textile . So that they should concentrate on their profitability by maintaining their
customer value, goodwill also concentrates on their rising profit.
 Heidelberg & Lafarge is not using their fixed assets properly as Meghna. They should
try to use more efficiently to generate sales.
 To increase debt paying ability of Lafarge and Meghna with their cash and cash
equivalent as Heidelberg doing.
 To analyzing the defensive interval ratio and also the Z-Score, it can be conclude that
Lafarge should increases sales and equity to maintain its bankruptcy level.
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4.3 Conclusion:
At the end of this project report it can be conclude that Lafarge Surma Textile Ltd., Heidelberg
Textile Bangladesh Ltd. &Meghna Textile Mills ltd. performing their activities efficiently.
They are offering a wide variety of products and services to their customers and they believe
that customers are their first priority. They have built a disciplined distributing culture in their
sector of manufacturing industries.
By analyzing their financial statements in recent six years (2014 to 2019) it has been founded
that their earnings, profitability, earningper share, book value to share, market to book value
ratio, debt and long-term debt paying ability Heidelberg Textile is in better position.
Sales generating ability, equity solvency, to convert receivables into cash, to pay out account
payable into purchase, to generate sales using fixed assets & expenditures, price earnings ratios
Lafarge is in better position.
And other some ratio, where Meghna is in better position.
But their performances of all ratios are satisfactory. Measuring and evaluating this performance
was the major objective of this study.
The secondary objective of this report was to present the overall banking activities of Lefarge
Textile , Heidelberg Textile & Meghna Textile . In this project report the overall companies’
overview is presented with their different working divisions and detailed information on their
products and services is presented. Growth information recent years is also presented.
Finally I believe that that Lafarge Surma Textile Ltd., Heidelberg Textile Bangladesh Ltd.
&Meghna Textile Mills Ltd. will concentrate to their profitability by maintaining their
customer value and goodwill in order to gain market leadership in the sector of manufacturing
industries.
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References:
Articles:
 AlovsatMuslumov (2005), The financial and operating performance of privatized

companies in the Turkish Textile industry, METU Studies in Development, 32 (June),
2005, 59-1012.
 AnupAgarwal and Nandu J. Nagarjan(1992), Corporate Capital Structure, Agency
Costs, and ownership Control- The case of all equity firms, The Journal of Finance,
Vol.XLV, No.4,p.1325.
 Chandrasekaran N. (1993) Determinants of profitability in Textile Industry, Textile
Industry, Vol. 20(4), p.16.
 Debasish Sur (1994), Working Capital Management-An overview of BalmerLawrie&
Co. Ltd., Indian Journal of Public Enterprise,9(16), pp.140-145.
 Industrial Researcher (1994), A review of Textile Industry in India, Industrial
Researcher, Oct-Dec., p.95.
 Jayant Sathaye (2005), Assessment of Energy Use and Energy Savings Potential in
Selected Industrial Sectors in India U.S. Environmental Protection Agency through the
U.S. Department of Energy.
 Nair N.K. (1991), Productivity in Indian Textile industry, Productivity, Vol. 32 No. 1,
April-June, p.141.
 Srinivasa, Rao.G and IndrassenaReddy.P (1995), Financial Performance in Pape
Industry-A Case Study, The Management Accounting, Vol.30(5), pp327-336.
 SubirCokavn, RejendraVaidya (1993), Deregulation and Industrial Performance-The
Indian Textile Industry, Economic and Political Weekly, Feb 20-27, p.106.
Websites:
 http://www.lafarge-bd.com/
 http://www.heidelbergTextile bd.com/
 http://www.meghnaTextile .com/
Annual Reports:
 Annual Report of Lafarge Surma Textile Ltd. (Year 2014-2019)

 Annual Report of Heidelberg Textile Bangladesh Ltd. (Year 2014-2019)
 Annual Report of Meghna Textile Mills Ltd. (Year 2014-2019)
78 | P a g e

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Chapter-One

This project report is prepared on Comparative Financial Performance Analysis: A Study

1.2 Objectives of the Study:

More specifically, this study entails the following aspects:

1.3 Research Methodology of the Study:

1.4 Scope of the Study:

These are as follows:-

Chandrasekaran N (1993) has made an attempt to evaluate to examine determinants of

Lafarge is a world leader in building materials, employing 64,000 people in 62 countries. As a

2.2.2 Aim of the Company:

2.2.4 Lafarge Surma Textile Ltd.:

GM/ IE Finance Production Commercial Head of

In charge In charging Planning Head of Head of Sample

2.3.1 Mission & Vision:

To extend its position as a world-class manufacturer, Heidelberg Textile Bangladesh Ltd

2.3.2 Aim of the Company:

2.3.3 Organization Values:

GM/ IE Finance Production Commercial Head of

In charge In charging Planning Head of Head of Sample

Company Name Meghna knit Composite Ltd.

2.3.1 Mission & Vision:

2.3.2 Aim of the Company:

2.3.3 Organization Values:

2.3.4 Organization structure

Heidelberg Textile Bangladesh:

Lafarge Surma Textile Ltd.:

- 2014 2015 2016 2017 2018 2019

- 2014 2015 2016 2017 2018 2019

Meghna’s economic earnings are in zigzag tent.

Cross Section (Balance Sheet)

3.2.1 Liquidity point of views (Current Asset vs. Current Liabilities):

Particulars Lafarge Heidelberg Meghna

Current Assets 33% 63% 77%

Particulars Lafarge Heidelberg Meghna

3.2.3 Solvency point of views (Long-Term Debt vs. Total Asset):

Particulars Lafarge Heidelberg Meghna

Total Equity 66% 64% 21%

Total Assets 100% 100% 100%

Particulars Lafarge Heidelberg Meghna

Good will or intangible asset 5% 0% 0%

Total Assets 100% 100% 100%

Cross Section (Income statement)

3.2.6 Gross Profit point of views (Gross Profit vs. Sales):

Particulars Heidelberg Lafarge Meghna

3.2.7 Operating Profit point of views (Operating Profit vs. Sales):

Particulars Heidelberg Lafarge Meghna

3.2.8 Net Profit point of views (Net Profit vs. Sales):

Sales 100% 100% 100%

3.2.9 Fixed Obligation Point Of Views (Fixed Charge Vs Sales):

Particulars Heidelberg Lafarge Meghna

Sales 100% 100% 100%

• Long-Term Debt and Solvency Analysis

• Market Ability Analysis

3.3.1 Activity Analysis:

Some points to be noted:

 Mature or Stable Company: The mature firm’s turnover is stable.

3.3.1.1 Inventory Turnover Ratio:

This ratio is affected by the choice of accounting method.

Graph 1: Inventory Turnover Ratio

Interpretation:Compare to Company average, Meghna is more efficient (7.1859 Times) to

Average no . of days inventory in stock =

Graph 2: Average No, of Days Inventory in Stock

Interpretation: Compare to Company average, Heidelberg is more efficient (55.049 Days) to

Graph 3: Receivables Turnover Ratios

Interpretation:Compare to Company average, Lafarge is more efficient (13.135 Times) to

Average no. of Days Receivables Outs tan ding =