Alyea Square

(The thesis is submitted for the partial fulfillment on the degree of Master of
Business Administration Major in Finance and Banking)
Supervised by
MD. Musa
Senior Lecturer
Port City International University
Chattogram, Bangladesh.
Prepared by
Aleya Akther
ID. No: MBA 1205843
Major: (Finance and Banking)
Program: Master of Business Administration (MBA)
Department of Business Administration.
Port City International University

Letter of Submission
To,
The Dean,
Faculty of Business Administration,
Port City International University,
Chittagong.
Subject: Submission of Thesis.
Dear Sir,
With due respect and humble submission, I would like to submit herewith my thesis titled
“Operational and Financial Performance of Square Textiles limited - A Study” which has
completed under the prudent guidance of Md. Musa, Senior Lecturer, Faculty of
Business Administration, Port City International University. I have carefully studied
both the theoretical and practical aspect of the “Operational and Financial
performance of square textiles limited - A Study”. I have tried my level best to
know about the organization by observing its activities. This thesis which I would like
to submit to you for your evolution is an outcome of my own observation and
contribution. I believe and hope that you will find this study very interesting, informative
and insightful.
I would, therefore, like to request you to take steps for the evolution of my thesis and
oblige thereby.
Sincerely Yours
Aleya Akther
ID. No:- MBA 1205843
Program: Master of Business Administration (MBA)

Major: (Finance and Banking)
Student’s Declaration
This thesis entitled “Operational and Financial Performance of Square Textiles limited -
A Study” has been prepared by me, it is my original work performed through primary and
secondary data collected from various source. This thesis has been submitted to the
Port City International University, as the partial fulfillment of the Master of Business
Administration (MBA) program, with major in finance and Banking. I would further like
to declare that the thesis has been not submitted to any other university or institution to
get any degree or diploma, and also not submitted for publication or fulfillment of any
other purpose.
_______________________
Aleya Akther
ID. No:- MBA 1205843
Program: Master of Business Administration (MBA) Major: (Finance and Banking)
Port City International University.
Supervisor’s Declaration
This thesis entitled “Operational and Financial Performance of Square Textiles limited -
A Study” is submitted for the partial fulfillment of the requirements for the degree of
MBA from Port City International University, by Name: Aleta Akther, ID No: MBA
1205843 has been completed under my supervision and guidance. It is an original piece
of work on the basis of field investigation and also has made contributions to the existing
store of knowledge. I have gone through the thesis very carefully. In preparing this,
she has spared much time and efforts. Her thirst over seeking depth of every aspect is
very much satisfactory. I suppose, the thesis may be considered for the award of
Master of Business Administration (MBA) degree.
I wish her every success in life.
______________
Md. Musa
Senior Lecturer
Department of Business Administration
Port City International University.
Acknowledgement
First of all I pay a special thanks to my almighty that made me able to complete this
thesis. It is very difficult to express my feelings that helped in completion of this thesis.
But I think there are no other words except thanks, which can complement my
sentiments. I pay gratitude to the supervisor of the thesis Mr. Md. Musa, Senior
Lecturer, Department of Business Administration, Port City International University. I
pay honor to the teachers for their contribution. I acknowledge with deep gratitude to the
Department of Business Administration of Port City International University.
I would like to show my heartfelt gratitude to all employees Square Textiles Limited. For
the assistance they have provided me to complete the paper smoothly.
Aleya Akther
ID. No:- MBA 1205843
Program: MBA
Major: (Finance And Banking)
Port City International University .
Executive Summary
The main objective of Square textiles limited is to act on the textiles market as a well-
respected, reliable and high quality operator with efforts to continuously improve its
operations, services and customer satisfaction. The Textiles equipment of Square textiles
limited is always kept technically in good condition. The entire personnel of Square
textiles limited are committed to maintain its skills with regular training as well as
collaboration with the employees. The Square Textiles Limited financial policy and
procedure manual provide the policies and procedures for financial transactions within
the business which must be followed by all staff.
Square Textiles Limited operational and process performance to achieve targeted

performance success in many dimensions including quality, speed, dependability,
flexibility and cost reduction. Operational performance ratios measure how different
aspects of a company’s finances are performing. The fixed-asset turnover ratio, total asset
turnover, inventory turnover ratio, etc. each provide a different look into how a company
is bringing in revenue. Analyzing these ratios provides deeper insight into the company’s
finances than simply studying accounting or other financial records. Different financial
analysis is conducted to find out the actual position of the company in the current market
situation. Ratio analysis cost of money and stock valuation is conducted to find the right
decision.
The impediments of the operational and financial performance of Square Textiles

Limited, a comprehensive study has been carried out upon of different level of
management over Square textiles Limited in Bangladesh. Such as power crisis, raw
materials, lead time, insufficiency of loan, and political unrest etc. Researcher findings
were mostly related to Annual report, financial position, Comprehensive income
statement, Statement of changes in equity, Statement of cash flows of Square Textiles
Limited
Finally, by this thesis researcher try to discuss the Square Textiles Limited position at
present in Bangladesh. This thesis express the way of overcomes relating Operational and
Financial performance and the all related problem of Square textiles limited as well as
textiles industries in Bangladesh.
Table of Contents
Chapter Topic Page No.

Letter of Submission I.
Student’s Declaration II.
Supervisor’s Declaration III.
Acknowledgement IV.
Executive Summary V.
Chapter One Introduction
1.1 Prelude 1
1.2 Statement of the Problem 2
1.3 Objective of the Study 3
1.4 Scope of the study 4
1.5 Methodology of the Study 5
1.6 Limitations of the study 6
Chapter Two Operational and Financial Policies of Square Textiles Limited
2.1 About Square Textiles Limited 7
2.2 Overview of Square Textiles Limited 8
2.3 Objective of the Company 9
2.4 Vision of the Company 10
2.5 Mission of the Company 11
2.6 Product and Count Range 12
2.7 Organizational Structure of Square Textiles Limited 13
2.8 Operational Policies of Square Textiles Limited 14-15
2.9 Financial Policies of Square Textiles Limited. 16-19
Chapter Three The operational performance of Square Textiles Limited
3.1 Operations performance objectives 20
3.2 Operational Performance 21-25
3.3 Successful operational performance Square Textiles limited 26
are achieved by
3.4 Operational Performance Ratio Analysis 27-33
3.5 The “Four Keys to Operational Performance” 34-35
3.6 By focusing on the “Four Keys”, the following benefits are realized. 36
Chapter Four Financial Performance Analysis of Square Textile Bangladesh Ltd.

4.1 Introduction 37
4.2 Liquidity Ratios 37-39
4.3 Profitability Ratio 40-44
4.4 Solvency /Debt Coverage Ratio 45
4.5 Price Earnings Ratio-DSE 46
4.6 Price Earnings Ratio-CSE 47
4.7 Earning Per Share 48
4.8 Cash Dividend Declared per Share 49
4.9 Total Dividend Declared (%) 50
Chapter Five Impediments of the operational and financial performance of
Square Textiles Limited.
5.1 Introduction 51
5.2 Operational impediments surrounding Square Textiles 51-53
5.3 Financial impediments surrounding Square Textiles 54
Chapter Six Summary of the findings, policy implications and conclusion
6.1 Introduction 55
6.2 Summary of the Findings 56-58
6.3 Policy Implications (Operational & Financial) 59-61
6.4 Conclusion 62
Bibliography 63
APPENDIX 64-68
Chapter One
Introduction
1.1 Prelude
Finance always being disregarded in financial decision making since it involves
investment and financing in short-term period. Further also act as a restrain in
Operational and Financial performance, since it does not contribute to return on equity. A
well designed and implemented financial management is expected to contribute
positively to the creation of a firm’s value. Dilemma in financial management is to
achieve desired trade off between liquidity, solvency and profitability. Management of
working capital in terms of liquidity and profitability management in essential for sound
financial recital as it have a direct effect on the profitability of the company. In this
thesis, Researcher wants to know about the Operational and Financial performance of
Now the world is very competitive. So everybody has to be expert in both practical
knowledge and theoretical knowledge. To make this thesis is a significant aspect in the
direction of accomplishing the good. The aim of preparing the thesis is to connect
practical knowledge with the critical aspects. Being a student of MBA during thesis
preparing period, Researcher have tried best to use the opportunity to enrich overall
knowledge on operational and financial performance analyzing system on the Square
Textiles Limited.
Researcher findings were mostly related to Annual report, financial position,

Comprehensive income statement, Statement of changes in equity, Statement of cash
flows of Square Textiles Limited. As Researcher have been working under this topic,
beside this researcher come across many others findings which are reflected through this
thesis.
During this work researcher have faced various obstacles, by the grace of almighty Allah
and by the help of some related person those obstacles have overcome some problem
successfully. Eventually, researcher wants to say that the study will help investors and the
students who will be interested to know the performance of Square Textiles Limited,
during the study period this will help them partially.
1.2 Statement of the Problem
A thesis is highly needed to gain idea, knowledge and experience. After completion of
the study, it will help some related parties and various point of view. It has an importance
also. These are depicted below:
First of all, this analysis will help the top level management and decision making.
Company will also be informed about their strength and weakness.
Borrower, lender, investor, will be beneficial by this thesis.
Finally the employee of the company also benefited by the thesis.
The study aims to help the individual, organization society and the country many in ways.
The textiles sectors are highly associated with the total economic development. Its human
resources development is the key criteria to maintain healthy and cordial atmosphere to
cope with economic changes as well as environmental changes. In this regard, the
knowledge about operational and financial policy and upcoming challenges regarding
textile sector is playing a vital role to keep the performance of the management towards
the organizational goal achievement. The importance of the study is wide and most
significantly, it will help the individual, organization society and the country as a whole.
1.3 Objective of the Study
The principal objective of the study is to evaluate Operational and Financial Performance
of Square Textiles limited. To accomplish this objective following objectives has been
covered.
1. To highlight the different operational and financial policies of Square Textiles

Limited.
2. To evaluate the operational performance of Square Textiles Limited.
3. To evaluate the financial performance (such as profitability, liquidity and
solvency, growth etc.) of Square Textiles Limited.
4. To identify the impediments of the operational and financial performance of
5. To suggest some important policy measures for improving the operational and
financial performance of Square Textiles Limited.
1.4 Scope of the study
This thesis prepared on Square Textiles Limited, which is one of the modern and
digitalized textiles company in Bangladesh. The thesis covers the organization structure,
background, milestone functions, operational and financial performance evaluation from
the year of 2009 to 2013.
1.5 Methodology of the Study
Generally, to say research method means, to collect the data used in research work. The
study was conducted at Square Textiles Limited.
1. Primary data: There is no opportunity to collect primary data, that’s why researcher
have to work on the basis of secondary data source.
2. Secondary Data: Researcher collected some relevant report and paper of various
financial statements from Square Textile Limited in order to gather secondary data. The
sources of secondary data were the annual report of the company.
The data needed for conducting the study has been collected from the secondary sources.
Such as:
1. Different books about financial institutes and Textiles Company.
2. Previous case study and journal.
3. Financial study of the Square Textiles Limited.
4. Websites of the Square Textiles Limited
Analysis: The collected data are properly scrutinized and for analyzing the data different
techniques and different types of ratios such as fixed asset turnover ratio, total asset
turnover ratio, inventory turnover ratio, liquidity ratios, profitability ratio, solvency etc.
After collecting secondary data’s researcher performed to prepare the main thesis.
1.6 Limitations of the study
In order to complete the thesis with a successful manner, a learner should have a good
knowledge about a thesis. Probably the study is far from being perfect. Despite researcher
sincerest endeavor in preparing a perfect thesis, some of the limitations, researcher faces
during the period. Researcher has to face different problems during the study and also
while writing the thesis. This thesis accuracy is minimized due to some limitations. The
unavoidable limitations are as follow:
1. Time: The execution period of the study was quite short to carry out such and intensive
thesis.
2. Accuracy of analysis: The quality of data in this thesis is limited as the basic of data is
taken from delicate source. All of the data had to be taken from the secondary sources
(annual report and internet).
3. Lack of more practical and contemporary data was another short coming.
4. The most important thing that the lack of researcher knowledge and efficiency is the
prime limitation of the study.
5. As a researcher, collecting data and preparing report is very costly. Internet searching
cost is so high. So researcher cannot collect huge information.
6. It is very difficult to discuss their financial practices corporately.
7. Finally, researcher has personal limitations to prepare the thesis.
In spite of the limitations, researcher had tried with all of possible efforts to know and
find out the response pattern of the subjects and consultation of relevant record and
document. Data have reached a fairly acceptable degree of accuracy.
Chapter Two
Operational and Financial
Policies of Square Textiles
Limited.
2.1 About Square Textiles Limited
Square Textiles Limited has started its journey by establishing the first unit in 1997. One
year later the second unit was established. Square Textile is a subsidiary company of
Square Group. The Company was incorporated as a public limited company in the year of
1994. The operation was started in 1997. It was enlisted in Dhaka Stock Exchange &
Chittagong Stock Exchange in 2002. Within a very short time of span the company
achieved some significance success. Square Textile receives Oeko-Tex standard 100 and
ISO-9002 certificates in the year 2000. Authorized capital of the company is tk.1000
million. It’s paid- up capital is tk. 251.90 million. 1,223 employees are working in this
organization. The business lines of Square Textiles Limited are manufacturing and
marketing of yarn. The factory is located in Saradaganj, Kashimpur, Gazipur,
Bangladesh. Its office is located at Uttara in Dhaka. Its main objective is to strive hard to
optimize profit through conduction of transparent business operations within the legal
and social framework with malice to none and justice for all.
Buyers deal with Square Textiles Limited because of competitive price, quality and
timely delivery of Textiles product including Cotton Ring Spun Yarn for Hosiery,
Spindles etc. A system is an organized set of functional units or components. Square
Textiles Limited, by this definition is a system with various objectives. It consists of inter
related subsystems such as Accounts, Office, Stores and other various branches. None of
these subsystems can perform independently of the others. This means that proper
coordination is required between the various departments for the smooth and effective
functioning of Square Textiles Limited as a whole. The Merchandising section of Square
Textiles Limited plays an important role of capable liaising with the buyer on a day today
basis and will constantly update on fabric and accessory tracking, clearances of imports,
inventory status, production status, exportation status etc. Thus in a nutshell, the
merchandising section is very important part of the company and its efficient functioning
is a must for the smooth working of the organization.
2.2 Overview of Square Textiles Limited
Square Textiles Limited steps into the textile sector with establishment of its first unit Square
textiles limited in 1997. A year later, Square textiles limited step on to its second unit. In the
same premises, Square textiles limited established its third unit on 2000.
Year of Establishment
Unit 1 : 1997 ; Unit 2 : 1998 ; Unit 3 : 2000
Manufacturing Business
100% Cotton Ring Spun Yarn for Hosiery
Target Market
Export Oriented Readymade Garments
Industry
Investment
Unit 1 : US$ 20.00 mln ; Unit 2 : US$ 13.50 mln ; Unit 3 : US$ 12 mln
Capacity
Unit 1 : 36,288 spindles with daily production capacity of 20,000 kgs.
Unit 2 : 23,184 spindles with daily production capacity of 12,000 kgs
768 rotors with daily production capacity of 8,000kgs
Unit 3 : 3,192 open end heads with daily production capacity of 20,000kgs
Machinery Details
Blow room, Carding, Drawing and Combing : Riete r- Switzerland

Simplex / Fly Frame : Toyoda – Japan
Ring Frame : Toyoda – Japan
Auto cone Winding : Schlafhorst - Germany
QC Equipment : Uster Technologies AG
Humidification Plant : Luwa - Switzerland
Air Cooling / Chiller : McQuay - USA
Auto Coro : Schlafhorst - Germany
2.3 Objective of the Company
To strive hard to optimize profit through conduction of transparent business

operations within the legal & Social framework with malice to none and justice for all
irrespective of gender disparity, caste, creed or religion or region.
To Increase productivity.
To create more jobs with minimum investments.
To be competitive in the internal as well as external markets.
To maximize export earning with minimum imported in-puts.
To reduce the income gap between top & bottom categories of employees.
To promote corporate social responsibilities (CSR) amongst all.
Use the most modern technology in business field to the best possible extends
which matches the socio-economic condition of Bangladesh.
Developing a set of human resources with the most modern business philosophy,
practice and technology.
Maintaining at least 90% efficiency.
Best use of potentiality of textiles industries of Bangladesh.
2.4 Vision of the Company
Square Textiles Limited conception of business germinated from their vision which sees
it as a means to the well being of the investors, stakeholders, employees and members of
the society at large by creating new wealth in the form of goods and services that go to
satisfy the wants of all of them without disturbing or damaging the socio-ecological-
economic balance of the Mother Earth and the process of human civilization leading to
peaceful co- existence of all the living beings.
Vision of the company is to become a globally preferred textiles company with

various qualities some of them are mentioned below
Integrity
Being honest in dealings with the company and each other.
Teamwork
Working together in a spirit of cooperation and mutual respect to achieve the company’s
objective.
Excellence
Striving together to be the best in business in all aspect.
Cost Control
Conserving and optimizing the use of company’s resources,
Human Resource Development

Developing and taking care of company’s people.
2.5 Mission of the Company
Square Textiles Limited mission is the polestar of company’s vision for maximization of
production of quality products and services strictly on ethical and moral standards at
minimum costs to the society ensuring optimum benefits to the consumers, the
shareholders and other stakeholders.
To deliver quality textiles to customer on time, every time.
Delighting customers by giving better service.
Achieving excellence in process and technology.
Building a culture of cost consciousness.
Maintaining optimum Leverage through competent people.
Leadership through innovation.
Thrust in new “product design”.
Square Textiles is one of the important sister concern under square group. They have not
only the vision and mission but also have values and cultural statement, which is very
important.
2.6 Product and Count Range
Beside conventional cotton yarn, Square textiles limited concentrate on PIMA cotton yarn
(Supima Certified), Organic cotton yarn (Control Union Certified), CMIA (Cotton made
in Africa), Core spun, Slub Compact yarn and Bamboo yarn.
Based on global demand, Square textiles limited move forward to blended yarn like Modal
(100% or 50+50), Viscose (100% or 50+50), PC (65+35 or 50+50), CVC (60+40 or 80+20)
and Melange.
For woven and denim buyers, it’s satisfying with high quality yarn from Ne. 06 or Ne. 40.
Ring Line
100% Cotton Yarn ( Combed/Carded ) (Ne. 10 to Ne. 60)
S and Z Twist Yarn (Ne. 20 to Ne. 60)
Compact Yarn (Ne. 20 to Ne. 60)
Pima Yarn (Ne. 20 to Ne. 60)
Slub Yarn (Ne. 10 to Ne. 40)
Organic Yarn (Ne. 10 to Ne. 80)
Core Yarn (Ne.10 to Ne. 40)
Contamination Free Yarn (Ne. 10 to Ne. 60)
Bamboo Yarn (Ne. 10 to Ne. 60)
Multi Count/Multi twist (Ne. 20 to Ne. 40)
Melange ( 10/15 Percent ) (Ne. 10 to Ne. 60)
Modal, Modal/Cotton (Ne. 10 to Ne. 60)
Viscose, Viscose/Cotton (Ne. 10 to Ne. 60)
T-400 (Ne. 10 to Ne. 40)
Syro (Ne. 10 to Ne. 40)
Rotor Line
Auto Coro (Ne. 06 to Ne. 22)
Viscose, Viscose/Cotton (Ne. 20 to Ne. 40)
Open End (Ne. 07 to Ne. 12)
2.7 Organizational Structure of Square Textiles Limited
CHAIRMAN
MANAGING DIRECTOR
DIRECTORS
GENERAL MANAGER
DEPUTY GENERAL MANAGER
ASSISTANT GENERAL MANAGER
MANAGER
HRD & MERCHANDISING ACCOUNTS PRODUCTION STORE

COMPLIAN
CE
ASSISTANT MANAGER
STORE PRODUCTION
ACCOUNTS
SENIOR EXECUTIVES
JUNIOR EXECUTIVES
STAFS
WORKERS
2.8 Operational Policies of Square Textiles Limited
2.8.1Quality
The main objective of Square textiles limited is to act on the textiles market as a well
respected, reliable and high quality operator with efforts to continuously improve its
operations, services and customer satisfaction. Square textiles limited collects the product
from the supplier and delivers to the consignee according to agreed schedule, to the
unloading place indicated by the consignee. No deliberate damage or loss of the product
nor change of its quality is allowed. The Textiles equipment of Square textiles limited is
always kept technically in good condition. The entire personnel of Square textiles limited
are committed to maintain its skills with regular training as well as collaboration with the
partners. The training program of Square textiles limited is accomplished inclusive
Behavior Based Safety Program.
2.8.2 Safety
Square textiles limited actively promotes improvements in work environment and work
safety issues with following actions:
• Internal disciplines, routines and safety regulations of Square textiles limited are
appreciated in order to minimize risks for personnel or the property.
• The objective of developing the working environment is to prevent the risks of illness
as well as injuries.
• At their daily work the personnel are expected to follow the working routines and to
report all potential risks regarding quality, safety and environmental issues.
2.8.3Security
Square textiles limited will handle the customers' product in a secure way and also
protect the integrity of the customers, product and security during shipment.
2.8.4Environment
Square textiles limited is committed to continuously improve its processes and activities.
Basis for offering and developing export services to customers are to take into account
the customers' requirements and existing physical resources. The objective of the
company is to reduce and prevent the environmental pollution. Square textiles limited
operational model complies with the international quality and safety standards. All the
activities in the company are in compliance with the laws and regulations. The company
also follows all the customers' instructions and requirements.
2.8.5 Productivity Policies
This category covers overall productivity policies. It also seeks to increase the velocity of
decisions and the capacity of the organization to respond to peak demand for decisions.
Operational policies protect management and professionals from being swamped with
details of adhocracy that stifle their performance and creativity. By providing policies to
make sound decisions promptly at the front line, less ad hoc consultations are required on
repetitive situations requiring predictable response. Programmed decisions are formulated
in advance to minimize duplication of management effort. Flexible operational policies
also facilitate virtual work, decentralization, outsourcing and trading partnerships. This
family of objectives also includes routine matters such as work rules, virtual-team
etiquette (cyberspace norm of interaction), travel, purchasing, order processing and
transactions where unwritten rules are detrimental to productivity and consistent
performance.
2.8.6 Quality-Management Policies

Another major component of this category – quality management policies – provides a
set of guiding principles for a continuously improving organization in all its efforts to
anticipate and meet customer needs. Quality goes beyond the creation and delivery of
better products and services; it encompasses the whole economic system of the firm and
considers the societal costs of its interventions. Policies for recovering dissatisfied or lost
customers are also an integral part of quality management.
2.9 Financial Policies of Square Textiles Limited.
The Square Textiles Limited Financial Policy and Procedure Manual provide the policies
and procedures for finance transactions within the business which must be followed by
all staff. It also provides guidelines that will use to administer these policies, with the
correct procedure to follow. Square Textiles Limited will keep all financial policies
current and relevant. From time to time it will be necessary to modify and amend some
sections of the policies and procedures, or to add new procedures. Any suggestions,
recommendations or feedback on the policies and procedures in this manual are welcome.
These policies and procedures apply to all employees.
The principal financial policies of Square Textiles limited are described in below.
2.9.1 Basic Accounting Principles
Anyone involved with accounting or in dealing with auditors has heard the term
"generally accepted accounting principles" or "GAAP". However, it would be very
difficult for anyone to produce a list of these principles. That is because they cover many
things and can be different in different types of organizations. One of the definitions of
"GAAP" is as follows:
"Those accounting principles which have been given formal recognition or authoritative
support in any particular jurisdiction."
The reason for accounting principles is so that everything is done the same way in each
kind of organization. Accounting has been called the "language of business". Accounting
principles make sure that everyone in the same business is speaking the same language.
2.9.2 Consistency
Consistency makes sure that Square Textiles Limited is treating revenues and expenses,
are properly charged to the correct account(s) all the time and as defined in the budget.
For example, service fee charges paid either from a bank service charge or the payroll
service fee should always be credited to the General Office, Bank & Interest account, not
to that account one month, and then to Office Supplies/Materials expense the next
month..
2.9.3 Matching Costs with Revenues
It is important that each Cost Centre (i.e., Sections, Projects or Contracts) operated by the
Square Textiles Limited is properly charged with all costs, and credited with all revenues,
relating to it. Funding (Revenue) for Core and Special Projects are based on the budgeted
amounts.
The proper matching of costs with revenues in each Section is particularly crucial since
the net results for each Section have an impact on Square Textiles Limited’s overall
operations. The required method of allocating costs and revenues for each cost centre is
shown in the Chart of Accounts section of this manual.
2.9.4 Revenue Recognition
Square Textiles Limited provides five criteria for identifying the critical event for
recognizing revenue on the sale of goods
1. Risks and rewards have been transferred from the seller to the buyer
2. The seller has no control over the goods sold
3. Collection of payment is reasonably assured
4. The amount of revenue can be reasonably measured
5. Costs of earning the revenue can be reasonably measured
2.9.5 Internal Control
Basic Concepts of Internal Control that followed by the square Textiles Limited include
all policies and procedures which:
maintain reliable reporting systems;

safeguard assets
prevent and detect error and fraud; and
optimize the use of resources.
2.9.6 Budgets
The budget is the financial plan for the year. If it is carefully done and well thought out, it
is a useful tool. If it is not, then it can be a waste of time and effort.
The budget matches planned expenditures for the upcoming year with the revenues that
the company expects to receive during the same year. It also shows the months when
revenue can be expected compared to the months when expenditures will be made. This
helps the Director of company to plan the cash flow.
There are many advantages to using budgets. They:

provide a method of allocating and using resources within the organisation
help to monitor and control operations
promote forward thinking
show employees an overall picture of the direction of the organisation which
can motivate staff.
help to co-ordinate different departments and align them towards shared
objectives
provide a framework for delegation.
it prevents the misuse of public funds;
it helps with long term plans by allowing the Board to build or use its Surplus
funds; and
it helps the Board control the operating activities of the company.
A budget should be used as a tool and as a guide. Budgets are "best guesses" when they
are prepared, and cannot be "carved in stone".
On the other hand, budgets should be used to control expenditures that are controllable. If
actual expenditures are greater than budgeted expenditures after the first eight months of
operations, it may be necessary to postpone non-essential expenditures in order to come
in on budget for the year.
2.9.7 Bank Account
This policy should be read and carried out by all staff for all authorisations of opening,
operating and closing bank accounts. Edit this policy so it suits the needs of company
business.
This policy sets out the requirements for use of bank accounts, including
1. Opening Bank Accounts
2. Bank Account Authorisations
3. Variations to Bank Account Terms and Conditions
4. Closing Bank Accounts
5. Bank Account Transactions
2.9.8 Fraud
There is an important difference between frauds and errors. Frauds are illegal acts that
benefit an individual or group by an intentional false representation of facts. Errors are a
mistaken belief of fact which may also benefit an individual or group, although
inadvertently. The important difference is intent.
If any one have attempted to confirm or disprove a fraud and still believe that a fraud has
been committed, talk to company’s supervisor about suspicions. Explain the steps that
have taken to dispel concerns. Provide documentation of attempts and the results of
investigation. Provide hard proof if it is available.
If company’s supervisor is the suspect, take concerns to the next level of authority, i.e.,
the Board Chairperson.
What Happens When Fraud is Found ?
The Board of Directors of Square Textiles Limited will decide if the administration
should become involved or whether the auditors should be brought in to determine the
magnitude of the loss.
Once the extent of the loss or fraud is determined and the charge is justifiable, the Board
of Directors of Square Textiles Limited will determine the legal action to take, if any.
Chapter Three
The Operational Performance of
Square Textiles Limited
3.1 Operations performance objectives
This first point made in this section is that operations objectives are very broad.
Operations management has an impact on the five broad categories of stakeholders in
Square Textiles Limited. Stakeholders is a broad term but is generally used to mean
anybody who could have an interest in, or is affected by, the operation. The five groups
are:
3.1.1 Customers
These are the most obvious people who will be affected by any business. What the
chapter goes on to call the five operations performance objectives apply primarily to this
group of people.
3.1.2 Suppliers
Operations can have a major impact on suppliers, both on how they prosper themselves,
and on how effective they are at supplying the operation.
3.1.3 Shareholders
Clearly, the better an operation is at producing goods and services, the more likely the
whole business is to prosper and shareholders will be one of the major beneficiaries of
this.
3.1.4 Employees
Similarly, employees will be generally better off if the company is prosperous; if only
because they are more likely to be employed in the future. However operations
responsibilities to employees go far beyond this. It includes the general working
conditions which are determined by the way the operation has been designed.
3.1.5 Society
Although often having no direct economic connection with the company, individuals and
groups in society at large can be impacted by the way its operations managers behave.
The most obvious example is in the environmental responsibility exhibited by operations
managers.
3.2 Operational Performance
Effective operational performance starts with company culture. Achieving and sustaining
operational excellence is more important than ever in today’s challenging economic
environment. Cost pressures, changing customer expectations, stronger competitors and
other industry and market disruptions are collectively causing a tremendous strain on
operational capabilities and performance. Operational excellence is no longer a desired
end state but a near-term requirement for any successful company.
Square Textiles Limited operational and process performance to achieve targeted

performance success in many dimensions including:
Quality
Speed.
Dependability.
Flexibility.
Cost
.
3.2.1 Quality
Quality is placed first in list of performance objectives because many authorities believe
it to be the most important. Certainly more has been written about it than almost any
other operations performance objective over the last twenty years. As far as this
introduction to the topic is concerned, quality is discussed largely in terms of it meaning
'conformance'. That is, the most basic definition of quality is that a product or service is
as it is supposed to be. In other words, it conforms to its specifications.
There are two important points to remember when reading on quality as a performance
objective.
The external affect of good quality within in operations is that the customers who
'consume' the operations products and services will have less (or nothing) to
complain about. And if they have nothing to complain about they will
(presumably) be happy with their products and services and are more likely to
consume them again. This brings in more revenue for the company (or client’s
satisfaction in a not-for-profit organisation.
Inside the operation quality has a different affect. If conformance quality is high
in all the operations processes and activities very few mistakes will be being
made. This generally means that cost is saved, dependability increases and speed
of response increases. This is because, if an operation is continually correcting
mistakes, it finds it difficult to respond quickly to customers’ requests.
3.2.2 Speed
Speed is a shorthand way of saying 'Speed of response'. It means the time between an
external or internal customer requesting a product or service, and them getting it. Again,
there are internal and external affects
Externally speed is important because it helps to respond quickly to customers.
Again, this is usually viewed positively by customers who will be more likely to
return with more business. Sometimes also it is possible to charge higher prices
when service is fast. The postal service in most countries and most transportation
and delivery services charge more for faster delivery, for example.
The internal affects of speed have much to do with cost reduction. There are two
areas where speed reduces cost (reducing inventories and reducing risks). The
examples used are from manufacturing but the same thing applies to service
operations. Usually, faster throughput of information (or customers) will mean
reduced costs. So, for example, processing passengers quickly through the
terminal gate at an airport can reduce the turn round time of the aircraft, thereby
increasing its utilisation. What is not stressed is the affect the fast throughput can
have on dependability. This is best thought of the other way round, 'how is it
possible to be on time when the speed of internal throughput within an operation
is slow?' When materials, or information, or customers 'hangs around' in a system
for long periods (slow throughput speed) there is more chance of them getting lost
or damaged with a knock-on effect on dependability.
3.2.3 Dependability
Dependability means 'being on time'. In other words, customers receive their products or
services on time. In practice, although this definition sounds simple, it can be difficult to
measure. What exactly is on time? Is it when the customer needed delivery of the product
or service? Is it when they expected delivery? Is it when they were promised delivery? Is
it when they were promised delivery the second time after it failed to be delivered the
first time? Again, it has external and internal affects.
Externally (no matter how it is defined) dependability is generally regarded by

customers as a good thing. Certainly being late with delivery of goods and
services can be a considerable irritation to customers. Especially with business
customers, dependability is a particularly important criterion used to
determine whether suppliers have their contracts renewed. So, again, the
external affects of this performance objective are to increase the chances of
customers returning with more business.
Internally dependability has an affect on cost. The chapter identifies three
ways in which costs are affected - by saving time (and therefore money), by
saving money directly, and by giving an organisation the stability which
allows it to improve its efficiencies. What the chapter does not stress is that
highly dependable systems can help increase speed performance.
3.2.4 Flexibility
This is a more complex objective because we use the word 'flexibility' to mean so many
different things. The important point to remember is that flexibility always means 'being
able to change the operation in some way. Some of the different types of flexibility
(product/service flexibility, mix flexibility, volume flexibility, and delivery flexibility). It
is important to understand the difference between these different types of flexibility, but
it is more important to understand the affect flexibility can have on the operation.
Externally the different types of flexibility allow an operation to fit its products
and services to its customers in some way. Mix flexibility allows an operation to
produce a wide variety of products and services for its customers to choose from.
Product/service flexibility allows it develop new products and services
incorporating new ideas which customers may find attractive. Volume and
delivery flexibility allow the operation to adjust its output levels and its delivery
procedures in order to cope with unexpected changes in how many products and
services customers want, or when they want them, or where they want them.
The internal affects associated with this performance objective. The three most
important are namely flexibility speeds up response, flexibility saves time (and
therefore money), and flexibility helps maintain dependability.
3.2.5 Cost
There are two important points here. The first is that the cost structure of different
organizations can vary greatly. Second, and most importantly, the other four performance
objectives all contribute, internally, to reducing cost. This has been one of the major
revelations within operations management over the last twenty years.
"If managed properly, high quality, high speed, high dependability and high flexibility
can not only bring their own external rewards, they can also save the operation cost."
3.3 Successful operational performance of Square Textiles limited
Building a culture around operational excellence.

Equipping and training personnel on process improvement tools and techniques.
Deploying process management technology for real-time visibility.
Establishing appropriate measures and controls to truly understand performance
and focus improvement efforts in the right areas.
Developing a set of human resources with the most modern business philosophy,
practice and technology.
Centric is experienced at helping clients drive operational performance across many areas
including supply chain management, sourcing and procurement, customer service
operations, IT operations, finance and back office operations. The company have also
developed comprehensive tools and methods to assist clients with not only operational
improvement efforts, but in building sustained improvement capabilities throughout the
company.
3.4 Operational Performance Ratio Analysis
Operational performance ratios measure how different aspects of a company’s

finances are performing. The fixed-asset turnover ratio, operating cycle ratio and each
provide a different look into how a company is bringing in revenue, if the business is
spending its money well and how efficiently it is using its assets and resources.
Analyzing these ratios provides deeper insight into the company’s finances than simply
studying accounting or other financial records.
3.4.1 Fixed-Asset Turnover Ratio
The fixed-asset turnover ratio is a measure of whether the money a company spends on
the equipment and buildings the company owns, often referred to as property, plant and
equipment, or PP&E, actually adds value to the company. To find the fixed-asset
turnover ratio, divide the company's Sales by the current value of the fixed assets.
2014 2015 2016 2017 2018

Fixed Sales/Net
Asset Fixed 2.31 3.08 2.40 1.28 1.27
Turnover Asset
Source: Annual Report.
Data compiled by the researcher.
Fixed Asset Turnover

4
2
Fixed Asset Turnover
0
2014 2015 2016 2017 2018
Analysis
Company is not in good position because FATR is increasing in 2016.2017,2018 over

the year. Increasing FATR indicates the business has less money tied up in fixed
assets for each unit of currency of sales revenue. But it is decreasing So company
should aware about of their FATR.
3.4.2 Total-Asset Turnover

Its measure the turnover of all of the firms assets. The ratio calculated by dividing sales
by total assets
Total-Asset Turnover=Sales/total asset
2014 2015 2016 2017 2018
Total Asset Sales/Total
Turnover Asset 0.82 0.88 1.13 0.66 0.67
Source:Annual Report.
Total Asset Turnover

1.2
0.8
0.6
Total Asset Turnover
0.4
0.2
0
2014 2015 2016 2017 2018
Analysis
Company’s total asset turnover is decreasing in 2014 and 2015 but it increases in
2016.Again it decreasing in 2017 and 2018. So company should aware about of their
Total-Asset Turnover.
3.4.3 Inventory Turnover ratio
A ratio showing how many times a company’s inventory is sold and replaced over
a period.
Inventory Turnover = COGS / Inventory or stocks
2014 2015 2016 2017 2018
Inventory COGS/Average 3.45 3.85 5.40 3.38 3.85
Turnover Ratio inventory Times Times Times Times Times
Inventory Turnover Ratio

6
3
Inventory Turnover Ratio
2
0
2014 2015 2016 2017 2018
Analysis
Inventory turnover ratio measures how fast the inventory become cash or accounts
receivable. If the turnover number is more than the company’s position is good and vice versa.
In 2014 it is 3.45 times and in 2015 is 3.85 times in 2016 it is 5.40 times in 2017 it is 3.38 in 2013
3.85. The turnover is increasing 2015-2016.But It decreases in 2017 and 2018.It shows a
downward impact on their management efficiency.
3.4.4 Accounts Receivable Turnover
This ratio helps to find out average collection period of accounts receivables. The lower
the collection periods the higher the management efficiency measure collect the account
receivables.
Accounts Receivable Turnover = Sales / Accounts Receivable

2014 2015 2016 2017 2018
Accounts Sales/Accounts 2.86 2.67 2.24 3.73 3.18
Receivable Receivable Times Times Times Times Times
Turnover
Accounts Receivable Turnover

4
2 Accounts Receivable
Turnover
1
0
2014 2015 2016 2017 2018
Analysis
Accounts receivables turnover is measure the number of times per year that the average
amount of receivables is collected and transfers the cash amount. If the organization
account receivable turnover increase then the average collection period decrease and
vice-versa. In 2017 it is 3.73 times account receivable turnover Highest and Average
collection period less. In 2016 and 2018 a low value of accounts receivable turnover is
not favorable because it indicates less efficiency and low improvement in the process of
cash collection on credit sales.
3.4.5 Account Payable Turnover
Is an accounting liquidity metric that evaluates how fast a company pays off its creditors
(suppliers)
Account Payable Turnover= Purchase/ Average Accounts Payable
2014 2015 2016 2017 2018
Account payable Purchase/Average 4.68 4.44 4.60 5.16 7.55
turnover Accounts payable Times Times Times Times Times
Accounts Payable Turnover

10
6
Accounts Payable
4 Turnover
0
2014 2015 2016 2017 2018
Analysis
Low value of account payable turnover is favorable and higher figure may indicate
inefficiency. Square Textiles Limited’s payable turnover increasing over the year it
indicates too much inefficiency of the company.
.4.6 Average Collection Period
The approximate amount of time that it takes for business to receive payments owed, in
terms of receivable, from its customer and clients.
Average Collection period = 360/ART
2014 2015 2016 2017 2018
Average 125.87 134.83 57.69 96.514 113.20
Collection 360/ART Days Days Days Days Days
period
Average Collection Period

150
100
Average Collection Period

50
0
2014 2015 2016 2017 2018
Analysis
If the organizations account receivable turnover increase then the average collection
period decrease. Square textile’s Average Collection Period decreasing over the year.
Company takes 57.69 days in 2016, Lower Average collection period indicates better
efficiency of a company.
3.4.7 Average Payment Period
Average Payment Period means the average period taken by the company in making
payments to its creditors. Low value of account processing period is favorable and higher
figure may indicate inefficiency.
Average Payment period = 360/APT

2014 2015 2016 2017 2018
Average 360/APT 79.92 81.08 70.03 5.23 5.02
Payment period Days Days Days Days Days
Average Payment Turnover

100
80
60
Average Payment Turnover

40
20
0
2014 2015 2016 2017 2018
Analysis
Average payment period tell about how many time accompany takes to pay its account
payable. If a company quickly pays the account payable it means they can’t use their
capital properly on the other hand if it take too much time to pay its account payable then it
will hamper their reputation toward its debtor. It wills creates problem for further loan.
Average payment period is decreasing drastically in 2017 and 2018. The overall position is
good.
3.5 The “Four Keys to Operational Performance”
3.5.1 Operations Improvement
Streamline, simplify and standardize. Operations are the foundation of efficient

distribution or manufacturing. A solid foundation is essential. Inefficient product flow
and non-value added activities need to be eliminated. Over-complication is very common
in today’s distribution centers due to systematization and mechanization. Operating
procedures must be easily understood by the associates, and all associates must be trained
in the best methods to perform their tasks. In addition, it is important to collaborate with
line managers and associates to identify “best practices” for operations. In many cases a
lot of good ideas within the organization never surface because input is not solicited or
valued.
3.5.2 Productivity Tracking
What is tracked - gets done. Most companies track departmental or facility-wide

productivity (UPH) and cost (cost per unit). However, this does not allow effectively
managing labor or providing timely feedback to associates on their performance.
Visibility of production and time recording at the individual level is imperative to
effectively labor management. Tracking productivity can be done in a variety of
ways, but advances in technology have led to a new generation of automated
productivity tracking software tools. These tools can be easily interfaced with a WMS to
track productivity and calculate individual associate performance.
3.5.3 Engineered Standards
Everyone needs a goal. Engineered standards developed through time and motion studies
are an objective tool to measure individual performance. While UPH (unit per hour) goals
are better than not having goals, unless product mix is consistent, they tend to be judged
as “unfair” by associates. If the goals aren’t considered realistic, associates become
discouraged. Engineered standards are the best way to provide accurate and fair goals for
associates as standards take multiple production variables (e.g. unit, carton, and pallet)
into consideration. As product mix changes, the standard adjusts accordingly. Also,
standards allow to set one performance goal facility-wide--100% Performance. This is
much simpler to track than UPH goals, where they may be several in each operational
area.
3.5.4 Performance Incentive Programs
There are several ways to reward performance. Motivation is the key to high performance
levels. Human nature is such that people tend to only put forth maximum effort if there is
something “in it for me.” Incentive programs are a way to motivate associates by
rewarding them for their effort and performance. Incentive programs range from non-
monetary “rewards” to “pay-for-performance” programs. Rewards include recognition
clubs, raffles, merchandise giveaways, and lunches. Pay-for-performance incentives
reward associates with an hourly performance bonus for exceeding performance
standards. As productivity increases, the company (lower labor cost) and the associates
(increased earnings) share in the success--a “win-win” situation.
3.6 By focusing on the “Four Keys”, the following benefits are
realized
Reduced labor cost through increased productivity (30 to 50% in most situations)
Increased visibility of associate performance
Increased facility throughput, extending capacity
Increased associate retention and morale
Improved management skills and effectiveness
Enabled a self-directed work force through metrics and accountability

Improved service levels
Square Textiles Limited can improve their operational performance by implementing

these four keys. The potential labor savings are significant, but do not underestimate the
positive impact on their organization from increased management effectiveness to
improved associate morale and retention. A positive, empowered workforce is priceless.
Chapter Four
Financial Performance
Analysis of SQUARE Textiles
Bangladesh Ltd.
4.1 Introduction
This Thesis is on different financial analysis of Square Textiles Limited. Here, different
financial analysis is conducted to find out the actual position of the company in the
current market situation. In this Thesis, ratio analysis cost of money and stock valuation
is conducted to find the right decision.
4.2 Liquidity Ratios

Liquidity ratio measures the firm’s ability to meet its obligations, ability to pay its
obligation and when they become due. These ratios establish relation between cash and
other current asset and current liabilities. Commonly used ratios are
Current Ratio
Quick Ratio
4.2.1 Current Ratio

Current Ratio shows the proportion of current assets of a business in relation to its current
liability
Current Ratio = Current Asset /Current Liability

Standard =2:1
2014 2015 2016 2017 2018

Current Current Assets/
Ratio Current liabilities 3.00:1 2.82:1 3.67:1 1.85:1 1.13:1
Current Ratio
4
2
Current Ratio
0
2014 2015 2016 2017 2018
Analysis
The current ratio measures the company’s ability to pay off its current liability. That
current ratio was highest in 2016 with compare in preceding years. Standard of current
ratio is 2:1. It means a current ratio 2 means that current asset as sufficient to cover for
twice the amount of a company’s short term liabilities and then it is considered to have
good short term financial strength. But in 2017 and 2018 Current Ratio is below 2, so it
denotes that CR Liquidity company doesn’t has idle money. So it is good sign for the
Square textile Ltd.
4.2.2 Quick Ratio/Acid Test Ratio
The Acid test or quick ratio or liquid ratio measures the ability of a company to use its
near cash or quick assets to extinguish or retire its current liabilities immediately.
Acid Test = Current Asset – Inventory /Current Liability (times)

Standard = 1:1
2014 2015 2016 2017 2018
Quick Current Assets-
Ratio/Acid test Inventory/Current 1.00:1 2.08:1 2.45:1 1.17:1 0.75:1
Ratio Liabilities
Acid Test or Quick Test Ratio

3
2.5
1.5 Acid Test or Quick Test
1 Ratio
0.5
0
2014 2015 2016 2017 2018
Analysis
Quick ratio is the most conservative ratio in calculating liquidity position. A company
with a quick ratio of less than 1 cannot currently pay back its current liabilities; it’s the
bad sign of investor’s. That acid-test was not stable in 2015, but it was increased
in 2016. The company’s current liquidity position in 2015 and 2016 is satisfactory.
But too much liquidity is not good. In 2017 and 2018 it is less liquidity. Which can
be a bad sign and as well as good sign.
4.3 Profitability Ratio
Profitability ratio represents the organization’s ability to translate sales dollars at different
stages of measurement. The ratio measures profitability after consideration of all
revenues and expenses, including interest taxes and non-operating items. This ratio
specify the capacity of the company to survive difficult circumstances, which might
occur from a number of basis, such as declining price, increasing coast and declining
sale.
The profitability ratio can justify on the four ratios, those are as follows
Gross Profit Margin Ratio
Net profit Margin Ratio
Return on Investment/ Asset Ratio
Return on Equity Ratio
4.3.1 Gross Profit Margin

Gross Profit Margin= Gross Profit / sales*100
2014 2015 2016 2017 2018
Gross Profit Gross profit /sales*100 18% 18% 16% 10% 11%
margin
Growth 100 0 88.88 55.55 61.11
Gross Profit Margin

20%
15%
10%
Gross Profit Margin
5%
0%
2014 2015 2016 2017 2018
Analysis
Gross Profit margin ratio is used to analyze how efficiently a company is using its
materials, labor and manufacturing related fixed assets to generate profits. A higher gross
margin percentage is a favorable profit indicator and vice-versa. This ratio helps
organization to fix their product price. If the ratio minimum percentage then indicates the
product market price lower or product production cost high. Here researcher sees that
gross margin ratio was quite stable in 2014 & 2015 but it fall down 11% in 2016. compare
in preceding years it fall down in 2017 and 2018. which can give alarm for Square
Textiles Ltd.
4.3.2 Net Profit Margin
Net Profit Margin= Net Income /Net Sales*100
2014 2015 2016 2017 2018
Net Profit Net profit /sales*100 11% 11% 12% 5% 4.5%
margin
Growth 100 0 109 45.45 40.90
Net Profit Margin

15%
10%
Net Profit Margin

5%
0%
2014 2015 2016 2017 2018
Analysis
Net income to sales ratio is very important in operating performance
measurement. This ratio is helpful in identifying the proportion of sales unit that
remains after the deduction of all expenses. This ratio indicates the net amount
of profit on each sales taka. The amount of net income includes all types of
non operating items that may occur in a particular period. The ratio increase in
2016. But it decreases in 2017. Again it decreases in 2018. In 2014 it is equal to
2015.
4.3.3 Return on Asset
Return on Asset = Net Income /Total Asset*100.
2014 2015 2016 2017 2018
ROA 9.24% 9.44% 11.00% 3.36% 3.08%
Net income/total
assets*100
Growth 100 102.16 119.04 36.36 33.33
Return On Asset
12.00%
10.00%
8.00%
6.00%
Return On Asset
4.00%
2.00%
0.00%
2014 2015 2016 2017 2018
Analysis
Return on asset indicates how profitable a company is relative to its total assets. It also
indicates the management efficiency to utilize total assets to make profit. Return on asset
Increases in 2016 rather then 2014 and 2015. It is highest in 2016.But it decreases in 2017
compare with 2016. In order to make business is more profitable Square Textiles limited
should increase their Return on asset.
4.3.4 Return on Equity
Return on Equity = Net Income /Total Equity*100
2014 2015 2016 2017 2018
ROE Net income/Total equity 13% 13% 16% 5% 3%
*100
Growth 100 0 123.07 38.46 23.07
Return On Equity
20%
15%
10%
Return On Equity
5%
0%
2014 2015 2016 2017 2018
Analysis
Return on Equity is the measurement of shareholders wealth maximization. It indicates

how much shareholders earned from their investment. The higher the ratio indicates
higher the shareholders wealth maximization. Return on equity is highest in 2016 return
shows 16%.But decreases in 2017 and2018 So it’s bad news for Square Textiles Ltd. that
its present ROE is decreasing than previous year. So company should increase and aware
about of their Return on Equity.
4.4 Solvency /Debt Coverage Ratio
Debt ratios are calculated to judgment the long-term This ratio indicate, mix of funds
provided by owners and lenders, the manner in which the assets are finance, the extent of
earning that is magnified or leveraged by use of debt and finally the extent of limited
stakeholders control over the company.
4.4.1 Debt Ratio

The ratio of total liabilities to total assets. It measures the percentage of the firm’s assets
financed by borrowings.
Debt Ratio=Total liabilities/Total Assets*100
2014 2015 2016 2017 2018
Debt Ratio Total liabilities/total 22% 25% 15% 26% 42%
assets*100
Data compiled by the researcher
Debt. Ratio
50%
40%
30%
Debt. Ratio
20%
10%
0%
2014 2015 2016 2017 2018
Analysis
Debt ratio is widely used indictors in investment decision. It indicates how much an investor
has debt against assets. Debt ratio was height in 2015 but it has decreasing in 2016.It has also
decreasing in 2017 and 2018.So Square Textiles Limited’s Debt ratio position is not good.
4.5 Price Earnings Ratio-DSE
Year 2014 2015 2016 2017 2018
Price 30.22 30.14 17.46 20.68 20.69

Earnings
Ratio
Growth 100 99.73 57.78 68.43 68.46
Source:Annual Report
Price Earning Ratio

40
30
20
Price Earning Ratio
10
0
2014 2015 2016 2017 2018
Analysis
Price earnings ratio is the most widely used indictors in investment decision. It indicates
how much an investor would be paying for every taka earnings. Price earnings ratio was
height in 2014 but it has decreasing in 2016.In 2017 and 2018 Price earnings ratio go
up .So company is now growing up & should aware also of their Price earnings ratio.
4.6 Price Earnings Ratio-CSE
Year 2014 2015 2016 2017 2018
Price
Earnings 30.23 29.86 17.50 20.46 20.55
Ratio
Growth 100 98.77 57.89 67.68 67.98
Price Earning Ratio

40
30
20
Price Earning Ratio
10
0
2014 2015 2016 2017 2018
Analysis
height in 2014 but it has decreasing in 2015 and 2016.In 2017 and 2018 Price earning
ratio go up. So company is now growing up & should aware also of their Price earnings
ratio.
4.7 Earning Per Share
Year 2014 2015 2016 2017 2018
Earning Per 1.94 4.20 4.72 4.38 4.37

Share
Growth 100 216.49 243.29 225.77 225.26
Earning Per Share

5
Earning Per Share

2
0
2014 2015 2016 2017 2018
Analysis
Earning per share is the most widely used indictors in investment decision. It indicates
how much an investor would be invest as new investor. Earning per share was height in
2016 but it has decreasing in 2017. Earning per share was slightly fall in 2018. So
company should aware also of their Earning per share.
4.8 Cash Dividend Declared per Share
Year 2014 2015 2016 2017 2018

Cash
1.60 1.60 1.60 1.80 2.00
Dividend
Declared per
Share
Growth 100 100 100 112.5 125

Cash Dividend Declared Per Share

2.5
1.5
Cash Dividend Declared
1 Per Share
0.5
0
2014 2015 2016 2017 2018
Analysis
Square textiles limited followed constant dividend policies in Cash Dividend Declared per
Share. For this policies investors attracted to invest regularly. The growth of Square textiles
cash dividend declared per share increases over the year. It indicates better efficiency of a
company.
4.9 Total Dividend Declared (%)
Year 2014 2015 2016 2017 2018

Total
Dividend 31 36 36 33 30
Declared
Growth 100 116.13 116.13 106.45 96.77
Total Dividend Declared

38
36
34
32
Total Dividend Declared
30
28
26
2014 2015 2016 2017 2018
Analysis
Square textiles limited followed constant dividend policies in Total Dividend Declared. For this
policies investors attracted to invest regularly. The growth of Square textiles Total Dividend
Declared increases in 2015 and 2016 rather than 2014 but slightly decreases in 2017 and
2018.It indicates inefficiency of a company. So company should aware about of their Total
Dividend Declared.
Chapter Five
financial performance of Square
Textiles
5.1 Introduction
In order to find out the impediments of the operational and financial performance of
Square Textiles Limited, a comprehensive study has been carried out upon of top level
management, middle level management and workers over Square textiles Limited in
Bangladesh. The report has prepared two sets. One is for management level and another
one is for workers. On the basis of this report the following obstacles are found.
5.2 Operational impediments surrounding Square Textiles

5.2.1. Power Crisis
Diesel and power crisis is the core important obstacle for the development of Textiles. 90
percent of the generators used in textiles factories is diesel run and only about five
percent is run by gas. So, in the face of diesel and power crises, garment factory owners
are being forced to ship their product by air to make up for lost time in a bid to maintain
deadlines.
5.2.2. Raw materials

For any textiles factory they have to imports raw materials for textiles like cotton, thread
color etc. This dependence on raw materials hampers the development of Textiles
industry. Moreover, foreign suppliers often supply low quality materials, which result in
low quality products.
5.2.3. Lead time

Lead time is another factor to hinder the development of Textiles industry. In the 1980s,
the usual lead time in the garment industry was 120-150 days for the main garment
supplier countries of the world; it has been reduced to 30-40 days in the current decade.
However, in this regard the Bangladesh RMG industry has improved little; for example,
the average lead time is 90-120 days for woven garment firms and 60-80 days for knit
garment firms. In China, the average lead time is 40-60 days and 50-60 days for woven
and knit products respectively; in India, it is 50-70 days and 60-70 days for the same
products respectively. Bangladesh should improve its average lead time to compete in the
international market.
5.2.4. Unskilled Workers
The mid level manager expressed that most of the illiterate men and women workers in
Textiles are unskilled and so their products often become lower in quality. 30% worker
can’t be able to read and write their mother language. 35% complete their primary
education. 25% of the workers complete their secondary level and 10% of the workers
complete their higher secondary level. They told that they have to leave their education
due to bear their living expenses and family burden. Moreover 10% of the Textiles
provide little training to its workers. The other 70% of the Textiles industry don’t have
this facility. Even 80% of the workers whose experience is more than 5 years don’t get
any sort of training. So inefficiency must be common phenomena for Textiles workers.
5.2.5. Lack of managerial Knowledge

There are some other problems which are associated with this sector. Those are- lack of
marketing tactics, absence of easily on-hand middle management, a small number of
manufacturing methods, lack of training organizations for industrial workers, supervisors
and managers, autocratic approach of nearly all the investors, fewer process units for
textiles and garments, sluggish backward or forward blending procedure, incompetent
ports, entry/exit complicated and loading/unloading takes much time, time-consuming
custom clearance etc.
5.2.6. Gender Division of Labor

In the Textiles industry of Bangladesh, tasks are allocated largely on the basis of gender.
All the workers in the sewing section are women, while almost all those in the cutting,
ironing and finishing sections are men. Women workers are absorbed in a variety of
occupations from cutting, sewing, inserting buttons, making button holes, checking,
cleaning the threads, ironing, folding, packing and training to supervising. Women work
mainly as helpers, machinists and less frequently, as line supervisors and quality
controllers. There are no female cutting masters. Men dominate the administrative and
management level jobs. Women are discriminated against in terms of access to higher-
paid white collar and management positions.
5.2.7 .Improper Working Environment
The working environment of factory worker was not sound. They often have to exposed
of Dust & fumes, Fire, gas, flames, Loud noise, Extreme heat, Dangerous tools, Work
underground, Work at height. 30% of the workers are exposed of dust and fumes, 67%
are exposed of fire, gas, flames. 80% of the workers are exposed of loud noise. 42% are
exposed of extreme heat and cold. 84% of the workers are exposed of dangerous tool, 2%
of the workers are exposed of work underground and work at height. So without the
proper worker environment it is a dream to get high quality product.
At the time of face to face interview surveyors find that.

Routes are blocked by storage materials.
Machine layout is often staggered.
Lack of signage for escape route.
No provision for emergency lighting.
Doors, opening along escape routes, are not fire resistant.
Doors are not self-closing and often do not open along the direction of escape.
Adequate doors as well as adequate staircases are not provided to aid quick exit.
Fire exit or emergency staircase lacks proper maintenance.
Lack of proper exit route to reach the place of safety.
Parked vehicles, goods and rubbish on the outside of the building obstruct exits to
the open air.
Fire in a Bangladesh factory is likely to spread quickly because the principle of
Compartmentalization is practiced.
5.3 Financial impediments surrounding Square Textiles
5.3.1. Insufficiency of Loan

Sometimes company needs to borrow money for shipping an order. But they didn’t get it
from the government and the private bank at a low interest rate. At that time they have
faced problems due to insufficiency of loan in time which often obstructs the industry.
5.3.2. Putting Off Difficult Decisions
Fear of making decisions could be more hazardous than making a wrong decision.
Making no decision has at least a 50% chance of being wrong. Putting off making hard
choices almost always costs money.
5.3.3. Unnecessary Risk
For a business owner isn’t whether to go out on a limb; it’s which limb and how far. But
taking risks contrary to business’ goals, mission and purpose, lead to financial trouble.
5.3.4. Economic Cycles
Square can have great management, the right product or service and the best sales and
service methods, and still struggle because of outside forces. Sometimes, the economy or
industry goes through a crisis. Because of consumer choices and habits, demand for
product can suddenly fall off without warning.
5.3.5 Political Unrest
The political parties taking harmful and destructive steps which will causes a great lose to
the general interest of people such as strike. Frequent general strikes and political unrest
in recent times have taken toll on the readymade textiles sector, raising cost of
production.
Chapter Six
Summary of the findings,
policy implications and
conclusion
6.1 Introduction
Bangladesh’s textiles industry has been said to be an impressive story about how a
private sector could successfully lead the nation to a major export oriented country.
Square Textiles Limited is one of the renowned textiles company in this country. It has
played a vital role for the development of socio-economic condition of the country.
Textiles industry is a main source of foreign exchange of Bangladesh. It has been the key
export division for the last 25 years. Textiles factories provide employment to 25 percent
of total industrial workers of Bangladesh. So textiles industry is one of the main sources
of employment in Bangladesh. But without the proper laws the worker are demanding
their various wants and as a result conflict is began with the industry. So in this thesis
report I tried to identify Problems of textiles industry in Bangladesh and how to recover
this problem. Now, in this chapter following recommendations are forwarded for the
betterment of the export oriented textiles industry as well as Square Textiles Limited.
6.2 Summary of the Findings
There are two types of findings, one is Operational findings and another is financial
findings.
6.2.1 Operational findings which are found from annual report of

square textiles limited by critical analysis
6.2.1.1 Fixed Asset Turnover Ratio (FATR)
Increasing FATR indicates the business has less money tied up in fixed assets for each
unit of currency of sales revenue. But it is decreasing So company should aware
about of their FATR
6.2.1.2 Total Asset Turnover

Company’s total asset turnover is decreasing in 2014 and 2015 but it increases in
2016.Again it decreasing in 2017 and 2018. So company should aware about of their
Total-Asset Turnover.
6.2.1.3 Inventory turnover ratio

Inventory turnover ratio measures how fast the inventory become cash or accounts
receivable. If the turnover number is more than the company’s position is good and vice
versa. In 2014 it is 3.45 times and in 2015 is 3.85 times in 2016 it is 5.40 times in 2017 it
is 3.38 in 2013 3.85. The turnover is increasing 2015-2016.But It decreases in 2017
and 2018.It shows a downward impact on their management efficiency.
6.2.1.4 Accounts receivables turnover
In 2017 it is 3.73 times account receivable turnover Highest and Average collection
period less. In 2016 and 2018 a low value of accounts receivable turnover is not
favorable because it indicates less efficiency and low improvement in the process of
cash collection on credit sales
6.2.1.5 Account payable turnover

Square Textiles Limited’s Account payable turnover increasing over the year it indicates
too much inefficiency of the company. So company should aware about of their account
payable Turnover.
6.2.1.6 Average collection period

Square textile’s Average Collection Period decreasing over the year. Company takes
57.69 days in 2016, Lower Average collection period indicates better efficiency of a
company..
6.2.1.7 Average payment period
Square Textiles Limited’s Average payment period is decreasing over the year. In 2018
the period slightly decreases then the previous year. The overall position is good.
6.2.2 Financial Findings which are found from annual report of square
textiles limited by critical analysis
6.2.2.1 LiquidityRatios Current ratio

But in 2017 and 2018 Current Ratio is below 2, so it denotes that CR Liquidity
company doesn’t has idle money. So it is good sign for the Square textile Ltd..
Quick ratio
The company’s current liquidity position in 2015 and 2016 is satisfactory. But too
much liquidity is not good. In 2017 and 2018 it is less liquidity. Which can be a bad
sign and as well as good sign
6.2.2.2 Profitability Ratio Gross Profit margin
That gross margin ratio was quite stable in 2014 & 2015 but it fall down 11% in 2016.
compare in preceding years it fall down in 2017 and 2018. which can give alarm for
Square Textiles Ltd.
Net Profit Margin
The ratio increase in 2015. But it decreases in 2016. Again it decreases in 2017. In 2018
it is equal to 2017. As a result company has generated less profit then 2015. So company
should aware about of their Net Profit Margin.
Return on Asset
Return on asset Increases in 2016 rather then 2014 and 2015. It is highest in 2016.But
it decreases in 2017 compare with 2016. In order to make business is more profitable
Square Textiles limited should increase their Return on asset.
Return on Equity
The higher the ratio indicates higher the shareholders wealth maximization. Return on
equity is highest in 2016 return shows 16%.But decreases in 2017 and2018 So it’s bad
news for Square Textiles Ltd. that its present ROE is decreasing than previous year.
So company should increase and aware about of their Return on Equity.
6.2.2.3 Price earnings ratio (DSE)
height in 2014 but it has decreasing in 2016.In 2017 and 2018 Price earnings ratio go
up .So company is now growing up & should aware also of their Price earnings ratio.
6.2.2.4 Price earnings ratio (CSE)
height in 2014 but it has decreasing in 2015 and 2016.In 2017 and 2018 Price earning
ratio go up. So company is now growing up & should aware also of their Price earnings
ratio.
6.2.2.5 Earning Per Share

Earning per share is the most widely used indictors in investment decision. It indicates
how much an investor would be invest as new investor. Earning per share was height in
2016 but it has decreasing in 2017. Earning per share was slightly fall in 2018. So
company should aware also of their Earning per share
6.2.2.6 Cash Dividend Declared per Share
Square textiles limited followed constant dividend policies in Cash Dividend Declared
per Share. For this policies investors attracted to invest regularly. The growth of Square
textiles cash dividend declared per share increases over the year. It indicates better
efficiency of a company.
6.2.2.7 Total Dividend Declared
The growth of Square textiles Total Dividend Declared increases in 2015 and 2016
rather than 2014 but slightly decreases in 2017 and 2018.It indicates inefficiency of
a company. So company should aware about of their Total Dividend Declared.
6.3 Policy Implications
6.3.1 Operational policy Implications are given below

6.3.1.1 Solving Power Crisis
Solar Energy can be a great source for solving power crisis in Bangladesh. Bangladesh is
situated between 20.30 and 26.38 degrees north latitude and 88.04 and 92.44 degrees east
which is an ideal location for solar energy utilization.
6.3.1.2 High Quality Raw Materials

The government should focus on production and procurement of high quality raw
materials within the country. For this endeavor Government should use Public Private
Partnership. This will in turn gives the nation an ample opportunity to add a significant
amount with the national income.
6.3.1.3 Reduce the Lead Time

In order to reduce the lead time, strong backward linkage industries are essential. To meet
the fabric demand for the textiles sector Bangladesh would be able to reduce lead time
with a considerable amount. Scientific research could be done to produce cotton in
Bangladesh. Spinning, weaving, dyeing and finishing mills should be erected robustly to
fulfill the demand for readymade apparel sector. It will also be beneficial for the primary
textile firms as they will be able to sell their goods to the local readymade apparel
industries.
6.3.1.4 Skilled Workers

Women workers in Textiles are should be skilled and also educated. And so their
products often become higher in quality. Minimum educational qualification of workers
in Textiles sector should be higher secondary level and that should provided by textiles
company. Square Textiles should provide sufficient training to its workers. The other
textiles industry also started compulsory education and training program for their
workers.
6.3.1.5 Improve Managerial Knowledge
Improving marketing tactics, presence of easily on-hand middle management, few
number of manufacturing methods, availability of training organizations for industrial
workers, supervisors and managers, independent approach of nearly all the investors,
competent ports, entry/exit easily and loading/unloading takes in time, custom clearance
etc.
6.3.1.6 No discrimination in Gender Division of Labor

In the garment industry of Bangladesh, tasks are allocated largely on the basis of gender.
It should be reduced. All the workers in the sewing section should be men and women,
And also cutting, ironing and finishing sections should be operate by men and women.
Administrative and management level jobs available for both men and women. Women
Should not be discriminated against in terms of access to higher-paid white collar and
management positions.
6.3.1.7 Proper Working Environment

Government body must ensure that the garments and textiles sector fully comply with the
factory act 1965 in order to construct a garments and textiles factory. The workers right
and privileges must also be ensured. The working environment should be favorable to
work. The following steps should be taken to improve the environment.
Building should be constructed with fire resisting materials

Adequate exits and proper escape routes should be designed
Protection against fire and smoke should be ensured
Electrical wiring must be properly designed, installed and maintained

Escape routes should be lighted at all times, kept clear, be indicated by signs
Regular fire drills should be held
Doors should be protected and should open along the direction of escape
Doors should not open on the steps and sufficient space should be provided.
Smoke/Fire alarm systems must be installed
Adequate number of extinguishers should be provided
Prior relationship with local Fire service.
6.3.2 Financial policy Implications are given below:
6.3.2.1 Availability of Loan

Company need to borrow money for shipping an order. That why government and the
private bank should provide loan at a low interest rate for successful delivery of foreign
shipment.
6.3.2.2 Make Easy Decision
To take a proper decision, write down the problem. List all possible solutions. State the
good and bad of each decision. Choose the best one.
6.3.2.3 Risk Analysis

Assess risks carefully, evaluating them against company’s strategic plan. Always weigh
the risk versus the potential reward.
6.3.2.4 Economic Cycles
One of the challenges businesses face is to plan for the inevitable periodic down turns, So
Square textiles have to sustain themselves through economic bad weather by taking good
planning.
6.3.2.5 Political Stability

The main two political parties should not take any harmful and destructive steps which
will causes a great lose to the general interest of people such as strike. They should take
action beyond the Business sector.
6.4 Conclusion
Square Textiles Limited occupies a unique position in the Bangladesh economy. It is the
largest textiles industry in Bangladesh, which experienced phenomenal growth during the
last 18 years. By taking advantage of Multi Fiber Agreement (MFA) of GATT, the
industry plays a key role in employment generation and in the provision of income to the
poor. To remain successful, Bangladesh needs to remove all the structural obstacles in the
transportation facilities, telecommunication network, and power supply, management of
seaport, utility services and in the law and order situation. The government and the
textiles sector would have to jointly work together to maintain competitiveness in the
global textiles market. Given the remarkable entrepreneurial initiatives and the dedication
of its workforce, Bangladesh can look forward to advancing its share of the
global textiles market.

Bibliography
1. Annual Report of Square Textiles Limited, 2009.

6. Islam, Sadequl, 2001, The Textile and Clothing Industry of Bangladesh in a
Changing World Economy, CPD and The University Press Ltd.
7. Zafour, Abu. (2009). Problems and Prospects of Garments Industries in

Bangladesh. [Online] Available: BGMEA database. [Online] Available.
8. Karim, S. (2009). The Impact of Just-in-Time Production Practices on

Organizational Performance in the Garments and Textiles Industries in
Bangladesh, Doctoral Thesis, Dhaka University.
9. Website of Square Textiles Limited.

10. And Various Website link related textiles sector.
APPENDIX
Calculation of Fixed Asset Turnover Ratio
Formula= Sales /Net Fixed Asset
Year Sales Net Fixed Sales /Net Fixed Asset Fixed Asset
Assets Turnover
2014 5238437265 2262854293 5238437265/2262854293 2.31
2015 5431437667 1763530746 5431437667/1763530746 3.08
2016 7581715607 3147296521 7581715607/3147296521 2.4
2017 5020425409 3893030120 5020425409/3893030120 1.28
2018 6367124698 4994687046 6367124698/4994687046 1.27
Calculation of Total Asset Turnover

Formula= Sales / Total Assets
Year Sales Total Asset Sales / Total Asset Total Asset

Turnover
2014 5238437265 6358456998 5238437265/6358456998 0.82
2015 5431437667 6153121789 5431437667/6153121789 0.88
2016 7581715607 6695189114 7581715607/6695189114 1.13
2017 5020425409 7511324947 5020425409/7511324947 0.66
2018 6367124698 9425480289 6367124698/9425480289 0.67
Calculation of Inventory Turnover Ratio

Formula= Cost of good sold/Inventory
Cost of good Cost of good

Year Inventory Inventory
sold sold/Inventory
Turnover
2014 4289716936 1243943446 4289716936/1243943446 3.45
2015 4450585087 1156434388 4450585087/1156434388 3.85
2016 6386382301 1181000058 6386382301/1181000058 5.4
2017 4494791289 1326693264 4494791289/1326693264 3.38
2018 5695595049 1478552169 5695595049/1478552169 3.85
Calculation of Account Receivable Turnover
Formula=Sales/ Account Receivable
Year Sales Account Sales/ Account Account

Receivable Receivable Receivable
Turnover
2014 5238437265 1829244296 5238437265/1829244296 2.86
2015 5431437667 2033491148 5431437667/2033491148 2.67
2016 7581715607 1213702218 7581715607/1213702218 6.24
2017 5020425409 1344598778 5020425409/1344598778 3.73
2018 6367124698 1999834667 6367124698/1999834667 3.18
Calculation of Account Payable Turnover

Formula= Purchase/ Account Payable
Year Purchase Account Purchase/ Account Account

Payable Payable Payable
Turnover
2014 4289716936 915358665 4289716936/915358665 4.68
2015 4450585087 1001945184 4450585087/1001945184 4.44
2016 6386382301 1385606603 6386382301/1385606603 4.6
2017 4494791289 870756515 4494791289/65384511 5.16
2018 5695595049 733985411 5695595049/79467584 7.75
Calculation of Average Collection Period

Formula= 360/ Account Receivable Turnover
Year 360/ Account Average

Receivable Collection
Turnover Period
2014 360/2.86 125.87Days
2015 360/2.67 134.83Days
2016 360/6.24 57.69Days
2017 360/3.73 96.514Days
2018 360/3.18 113.20Days
Calculation of Average Payment Period
Formula= 360/ Account Payable Turnover
Year 360/ Account Average

Payable Payment
Turnover Period
2014 360/4.68 76.92Days
2015 360/4.44 81.08Days
2016 360/5.16 70.03 Days
2017 360/68.74 5.23Days
2018 360/71.67 5.02Days
Calculation of Current Ratio

Formula= Current Asset/ Current Liabilities
Current
Year Current Current Asset/ Current Current
Asset
Liabilities Liabilities Ratio
2014 4095602705 1363962388 4095602705/1363962388 3
2015 4389591043 1554243774 4389591043/1554243774 2.82
2016 3547892593 965543991 3547892593/965543991 3.67
2017 3618294827 1948729056 3618294827/1948729056 1.85
2018 4430793243 3910867252 4430793243/3910867252 1.13
Calculation of Quick Ratio or Acid Test Ratio

Formula= Current Assets-Inventory/ Current Liabilities
Quick Ratio
Current Assets-
Year Current Inventory Current or Acid Test
Inventory/
Ratio
Asset Liabilities Current Liabilities
1243943446-
2014 1243943446 1243943446 1363962388 0
1363962388/1243943446
4389591043-
2015 4389591043 1156434388 1554243774 2.08
1156434388/1554243774
3547892593-
2016 3547892593 1181000058 965543991 2.45
1181000058/965543991
3618294827-
2017 3618294827 1326693264 1948729056 1.17
1326693264/1948729056
4430793243-
2018 4430793243 1478552169 3910867252 0.75
1478552169/3910867252
Calculation of Gross Profit Margin
Formula= Gross Profit /Sales*100
Year Gross Profit Sales Gross Profit /Sales*100

Gross
Profit
Margin
2014 948720329 5238437265 948720329/5238437265*100 0.18
2015 980852580 5431437667 980852580/5431437667*100 0.18
2016 1195333306 7581715607 1195333306/7581715607*100 0.16
2017 525634120 5020425409 525634120/5020425409*100 0.1
2018 671529649 6367124698 671529649/6367124698*100 0.11
Calculation of Net Profit Margin

Formula= Net Income/Sales*100
Net Net
Year Sales Net Income/Sales*100
Income Profit
Margin
2014 587782036 5238437265 587782036 /523843726*100 0.11
2015 581715169 5431437667 581715169/5431437667*100 0.11
2016 878151579 7581715607 878151579/7581715607*100 0.12
2017 252493568 5020425409 252493568/5020425409*100 0.05
2018 290913928 6367124698 290913928/6367124698*100 0.045
Calculation of Return on Asset

Formula= Net Income/Total Asset*100
Net Income/ Total Return on

Year Net Income Total Asset
Assets*100 Asset
2014 587782036 6358456998 587782036/6358456998*100 0.0924
2015 581715169 6153121789 581715169/6153121789*100 0.0944
2016 878151579 6695189114 878151579/6695189114*100 0.11
2017 252493568 7511324947 252493568/7511324947*100 0.0336
2018 290913928 9425480289 290913928/9425480289*100 0.0308
Calculation of Return on Equity
Formula= Net Income/ Total Equity *100
Net Total Net Income/ Total Return on

Year
Income Equity Equity*100 Equity
2014 587782036 4556371443 587782036/4556371443*100 0.13
2015 581715169 4486730556 581715169/4486730556*100 0.13
2016 878151579 5607074119 878151579/5607074119*100 0.16
2017 252493568 5452946362 252493568/5452946362*100 0.05
2018 290913928 9425480289 290913928/9425480289*100 0.03
Calculation of Debt Ratio

Formula= Total Liabilities/ Total Assets *100
Total Liabilities/ Total

Year Total Total Asset Debt
Asset*100
Liabilities Ratio
2014 1363962388 6358456998 1363962388/6358456998*100 0.22
2015 1554243774 6153121789 1554243774/6153121789*100 0.25
2016 965543991 6695189114 965543991/6695189114*100 0.15
2017 1948729056 7511324947 1948729056/7511324947*100 0.26
2018 3910867252 9425480289 3910867252/9425480289*100 0.42

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(The thesis is submitted for the partial fulfillment on the degree of Master of

Business Administration Major in Finance and Banking)

Port City International University

Subject: Submission of Thesis.

Program: Master of Business Administration (MBA)

I wish her every success in life.

Square Textiles Limited operational and process performance to achieve targeted

The impediments of the operational and financial performance of Square Textiles

Chapter Topic Page No.

Chapter Four Financial Performance Analysis of Square Textile Bangladesh Ltd.

Researcher findings were mostly related to Annual report, financial position,

1. To highlight the different operational and financial policies of Square Textiles

Blow room, Carding, Drawing and Combing : Riete r- Switzerland

To strive hard to optimize profit through conduction of transparent business

Vision of the company is to become a globally preferred textiles company with

Human Resource Development

To deliver quality textiles to customer on time, every time.

Delighting customers by giving better service.

Achieving excellence in process and technology.

Building a culture of cost consciousness.

Maintaining optimum Leverage through competent people.

Leadership through innovation.

Thrust in new “product design”.

DEPUTY GENERAL MANAGER

ASSISTANT GENERAL MANAGER

HRD & MERCHANDISING ACCOUNTS PRODUCTION STORE

2.8.5 Productivity Policies

2.8.6 Quality-Management Policies

2.9.1 Basic Accounting Principles

2.9.4 Revenue Recognition

2. The seller has no control over the goods sold

3. Collection of payment is reasonably assured

4. The amount of revenue can be reasonably measured

5. Costs of earning the revenue can be reasonably measured

2.9.5 Internal Control

maintain reliable reporting systems;

There are many advantages to using budgets. They:

1. Opening Bank Accounts

2. Bank Account Authorisations

3. Variations to Bank Account Terms and Conditions

4. Closing Bank Accounts

5. Bank Account Transactions

What Happens When Fraud is Found ?

Square Textiles Limited operational and process performance to achieve targeted

Externally (no matter how it is defined) dependability is generally regarded by

Building a culture around operational excellence.

Operational performance ratios measure how different aspects of a company’s

3.4.1 Fixed-Asset Turnover Ratio

2014 2015 2016 2017 2018

Fixed Asset Turnover

Company is not in good position because FATR is increasing in 2016.2017,2018 over

3.4.2 Total-Asset Turnover

Total Asset Turnover

Inventory Turnover Ratio

Accounts Receivable Turnover = Sales / Accounts Receivable

Accounts Receivable Turnover

Accounts Payable Turnover

Average Collection Period