Project Paper

On
Comparative Financial Performance Analysis of
Textile Companies Ltd.
Submitted To
Mr. Badruzzaman
Controller of Examinations
National University
Gazipur, Bangladesh

Supervised By
Mr. Sohel Ahmed
Associate Professor
Department of Business Administration
Dhaka City College

Prepared By
Afirida Anika
Reg. No-15501001916
Session: 2015-2016
Major: Finance
Program: BBA (Professional)
National University
Department of Business Administration
Dhaka City College

Department of Business Administration

Dhaka City College
Date of Submission: 12th January, 2021

i
 Letter of Transmittal
12th January, 2021

Mr. Sohel Ahmed

Associate Professor
Department of Business Administration
Dhaka City College
Subject: Submission of Project Paper on Comparative Financial Performance Analysis of Textile
Companies Ltd.”

Dear Sir,

I have the pleasure to submit this Project Paper on "Financing to SME Banking in Bangladesh: A case
study on private commercial Banks” as directed by you. In the process of preparing this paper I was
immensely benefited by enriching my knowledge in practical banking system. The knowledge that I have
achieved during the Project period and preparation of this paper will help me in many ways. It is a great
pleasure for me to present you this report on Project in bank. I shall glad if the report can serve its
purposes and I am ready to explain anything to you if you feel necessary.

I hope this report will be able to meet the requirement of the course & should also be to satisfy your
requirements.
Sincerely yours,

---------------------------
Afirida Anika
Reg. No-15501001916
Session: 2015-2016
Major: Finance
Program: BBA (Professional)
National University
Department of Business Administration
Dhaka City College

ii
 STUDENT’S DECLARATION

I declare the Project Paper entitled Comparative Financial Performance Analysis of Textile
Companies Ltd..” Is prepared under the supervision of Mr. Sohel Ahmed, Associate Professor,
Department of Business Administration, Dhaka City College, after completing of Project period
with Private Commercial Bank, existing activities and its implementation.

I also declare that this report is my original work of my experience and prepared for academic
purpose which is a part of BBA program and in this paper, I used actual present scenario of the
organization.

---------------------------
Afirida Anika
Reg. No-15501001916
Session: 2015-2016
Major: Finance
Program: BBA (Professional)
National University
Department of Business Administration
Dhaka City College

iii
 CERTIFICATE OF SUPERVISOR

This is to certify that Afirida Anikaa student of BBA, Reg. No-15501001916 Session-2015-2016
Major in Finance successfully complete her “Project Program” entitled Comparative Financial
Performance Analysis of Textile Companies Ltd.” under my supervision for the partial
fulfillment for the award of BBA degree, Under National University,

She has done his job according to my supervision and guidance. Her has tried best to do this
successfully. I think this program will help her in the future to build up her finer career.

I wish his success and prosperity.

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

Mr. Sohel Ahmed

Associate Professor
Department of Business Administration
Dhaka City College

iv
 ACKNOWLEDGEMENT

The successful accomplishment of this report is the outcome of the contribution of number of
people, especially those who gave me time and share their thoughts and gave suggestions to
prepare this report. I will pay humble gratitude to the Almighty Allah for giving me ability and
patience to complete this report.
I express my deep sense of gratitude and heartily respect to Mr. Sohel Ahmed, Associate
Professor, Bachelor of Business Administration, Dhaka City College, and my honorable
Supervisor. I have received all valuable suggestions and instructions from my honorable teacher
(Supervisor) for completing this Project Paper.

I am very much grateful to them for spending their precious time with me in answering my
questions regarding different matter on banking operation and practices.

As an Thesis Paper, I never felt vulnerable as they always guide me through out my entire
duration of the Dissertation period. And this study excelled my depth of knowledge for the future
professional career.

Without all this support, this paper was not supposed to be published, submitted and I thanked
them again from the bottom of my heart. I try my level best to make this report accurate and
exceptional. However, there might be some errors due to my limited aptitude and time
constraints. In this regard, I seek your kind consideration as I am in the process of learning.

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 EXECUTIVE SUMMARY

Lafarge Surma Texile Ltd. is a joint venture of Lafarge, a world leader in building materials and
Texileos Molins, Spanish Company with strong global presence. Lafarge Surma Texile 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.
Heidelberg Texile is one of the world’s largest building materials companies. The core activities
include the production and distribution of Texile and aggregates, the two essential raw materials
for the manufacture of concrete.
Meghna Texile Mills Ltd. the first manufacturing enterprise of Bashundhara Group is one of the
largest Texile manufacturing industries in Bangladesh.
The main objective of this project report is to Comparative Financial Performance Analysis: A
Study on Selected Texile Companies in Bangladesh. by collecting the information through their
Annual Reports from 2009 to 2014.
The beginning of this report is focused on about the historical background of these three Texile
companies, their features, organizational structure, their different divisions and operations of
those divisions offered to their valuable customers.
After that the financial performance of these selected Texile companies in Bangladesh has
measured and evaluated which is the central part of this project report activity analysis, liquidity
analysis, long-term debt and solvency analysis, profitability analysis, market ability analysis
have been considered and calculated to evaluate & compare the financial performance.
[ After calculating those ratios, interpretations have been given to show the reasons behind the
fluctuations. In order to make a clear view of the performance, ratios are graphically represented
by column chart.

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 Table of Content

Chapter NO. Chapters &Contents Page No.

Prefatory
Cover Page i
Letter of Transmittal ii
Student’s declaration iii
Certificate of supervisor iv
Acknowledgment v
Executive Summery vi

SL Contents Page No.

No.
Chapter 1: Introduction 1
1.1 Origin of the Study 2
1.2 Objectives of the Study 2
1.3 Methodology of the Study 3
1.4 Scope of the Study 3
1.5 Limitations of the Study 4
Chapter 2: Literature Review 5
2.0 Literature Review 9
2.1 Lafarge Surma Texile Ltd. 10
2.2 Heidelberg Texile Bangladesh Ltd. 11
2.3 Meghna Texile Mills Ltd. 12
Chapter 3: Analysis & Evaluation 13
3.1 Economic Earning 14
3.2 Cross Section 15
3.2.1 Liquidity point of views 15
3.2.2 Sales generating ability point of views 15

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3.2.3 Solvency point of views 16
3.2.4 Equity solvency point of views 16
3.2.5 Non-productive point of views 16
3.2.6 Gross Profit point of views 16
3.2.7 Operating Profit point of views 17
3.2.8 Net Profit point of views 17
3.2.9 Fixed Obligation Point Of View 17
3.3 Ratio Analysis 18
3.3.1 Activity Analysis 18
3.3.1. Inventory Turnover Ratio 19
1
3.3.1. Average No, of Days Inventory in Stock 20
2
3.3.1. Receivables Turnover Ratio 21
3
3.3.1. Average No, of Days Receivables Outstanding 22
4
3.3.1. Accounts Payable Turnover 23
5
3.3.1. Average No. of Days Payables Outstanding 24
6
3.3.1. Working Capital Turnover 25
7
3.3.1. Fixed Assets Turnover Ratio 26
8
3.3.1. Total Assets Turnover Ratio 27
9
3.3.2 Liquidity Analysis 28
3.3.2. Current Ratio 28
1
3.3.2. Quick Ratio 29
2
3.3.2. Cash Ratio 30
3
3.3.2. Cash Flow from Operation Ratio 31
4
3.3.2. Defensive Interval 32
5
3.3.3 Long-Term Debt & Solvency Analysis 33
3.3.3. Debt to Total Capital 33

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1
3.3.3. Times Interest Earned 34
2
3.3.3. Times Interest Earned 35
3
3.3.3. Cash from Operation (CFO)-to-Debt Ratio 36
4
3.3.4 Profitability Analysis 37
3.3.4. Gross Profit Margin 37
1
3.3.4. Operating Income 38
2
3.3.4. Profit Margin 39
3
3.3.4. Pretax Margin 40
4
3.3.4. Net Profit Margin 41
5
3.3.4. Return On Assets 42
6
3.3.4. Return on Total Capital 43
7
3.3.4. Return on Equity 44
8
3.3.5 Market Ability Ratio 45
3.3.5. Earnings per Share 45
1
3.3.5. Price Earnings Ratio 46
2
3.3.5. Book Value per Share 47
3
3.3.5. Market to Book Value Ratio 48
4
3.4 Altman Z-Score 49
3.4.1 Meaning of Altman Z-Score 49
3.4.2 Formula for Z-Score 50
3.4.3 Interpretation of Altman Z-Score 50
3.4.4 Interpretation of Altman Z-Score 50
3.4.5 (5-Factor model of the Altman Z-score) Lafarge, Heidelberg & Meghna 50
3.4 SWOT Analysis of Lafarge Surma Texile Ltd.: 52
3.5 SOWT Analysis of Heidelberg Texile Bangladesh Ltd. 53

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3.6 SWOT Analysis of Meghna Texile Mills Ltd. 53

Chapter 4: Findings, Recommendations & Conclusion 57

4.1 Findings 57
4.2 Recommendations 58
4.3 Conclusion 59
References 60
Appendix 61