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1.1 Background of Study

Bhaktapur Craft Paper (BCP) was established by UNICEF/NEPAL as community development
project in 1981 to meet the community development objective through of paper production in
rural and urban areas. Now it has been turned and incorporated in Public Limited Company, for
its independent and legal entity. BCP has been registered in His

Majesty Government of Industry department. Keeping the name, “Bhaktapur handicraft paper
Ltd.” (BCP), it has been distributing its share equity to its permanent staffs.
In 1980 UNICEF’S executive board purposed the foundation of greeting cards manufacturing
projects for community development in developing countries. It was further enhance in Nepal by
the His Majesty of Government of Nepal. To improve quality of traditional handicraft goods for
developing a growing export market in order to generate employment opportunity and to provide
supplementary sources for people in lower income in rural and urban areas. UNICEF agreed to
implement its broad proposal in Nepal as a model of community development by utilizing raw
material and traditional technology.

Since,1995UNICEF/Nepal has been intend to turning BCP in to a registered company in Nepal

in 1998 approval for this strategy was given by the UNICEF Financial controller of New York.

At present BCP has been incorporated in to public limited company and registered in His
Majesty of Government of Industry department as public limited company keeping the name
“Bhaktapur Paper Handicraft Limited.”

The project itself was designed for handmade works; most of its process is directly done by hand.
The machines are used for calendaring, cutting, punching, and printings works only, where as the
dyeing, folding, gluing, creasing, sorting and assembling are done by hand. Initial investment of
fines assets of BCP was Rs 10 million Nepalese currencies. The working capital is at 80%
capacity and Break Even Point (BEP) of related capacity is 48%.

The authorized capital is Rs 20 million and the issued capital is Rs 1.28 million.
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1.2 Profile of Organization

The BCP is located at Bhaktapur industrial area, Byasi, Bhaktapur district BCP has based out the
well-developed plot of land on area of 2.78 ropani (1415m2) and factory building with floor area
of 884.5 m2 at Bhaktapur.

BCP has 128 permanent staffs (shareholders as well) in total, out of which 50% are female and
remaining 50% are male. The staffs are well trained from india at the time of establishment and
now are trained in factory it-self.

The primary raw material of BCP is traditional Nepali handmade paper and it is produced from
the paper makers of about 5 districts of western Nepal Baglung, Myagdi, Parbat, Lamjung, and
Gorkha. With cooperation and coordination of Agricultural Development Bank/Nepal
Department of Forest, BCP is receiving and made paper produced in different district and it
collects about 134.2 Metric tons of lokta (raw material of paper) from above mentioned districts.

BCP paper craft workshop makes quality greetings cards, notebook, wrapping paper, bags,
envelopes, lamp set, greeting card, postcard, frame and calendar that reflect the traditional of an
ancient and original culture.

1.3 Objective of Study

The main objective of the project is to promote community development through income
generation activities associated with lokta collection, paper making and manufacturing greeting
cards, stationeries and other decorative products for employment opportunity for the largest
possible number of poor family:The main objective of the study are:

a. To study and analyze the net profit margin(NPM), Return on Assets(ROA), presentation of
Working Progress of Bhaktapur paper handicraft Ltd, Current Ratio(CR), Quick
Ratio(QR),Basic Earning Power(BEP).
b. To find out the financial position

1.4 Rationale of the study

The main significance of this study is to provide necessary information to reader. After the detail
study of field work report the reader can get a lot of information about the Profitability and
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Liquidity of BCP.The BCP is a kind of export business, so, the reader can get some more
information about export business.

1.5 Review fo Literature

Review of completed researches is one of the most important components of a research because
the researcher should gain out of the experiences of others. It helps to know about what has
already been done, what are their strengths and weaknesses? In doing so, one can identify the
research gaps, which need to be bridged by the new research efforts. There is several published
and unpublished works available related to financial analysis of Bhaktapur paper handicraft Pvt.
Ltd. Researcher will review such literatures regarding them as useful material.

Review of literature refers to examining or studying or surveying past work or published

documents concerning to the work with a particular subject. It helps to eliminate duplication of
what has been done and provides useful hypothesis and helpful investigation. Literature review
can be done through the review of various sources like books, journals, reports, thesis, and
internet e.t.c.

Review of previous works

Literature review helps to provide information in the research work by studying the previous
literature. It should include the relevance of the present study that contributes to the theory or
helps to solve the problems of the society or business or organizations.

This chapter explains the findings by various researchers on financial analysis. Financial analysis
tools have been one of the backbones for investment decision of individual in the company.
Individuals’ investment behavior has been explored through a large body of empirical studies
over the past three four decades. Securities market plays an important role in mobilizing savings,
and channeling them into productive investment for the development of commerce and industry
of the country. It basically assists the capital formation and economic growth of the country. In
many developing countries like Nepal, the undeveloped capital market is still prevailing in the
economy.

The review of the related literature is one of the guideline to prepare the proposal. The review of
the related literature helps to write the background of the study, statement of the problem,
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objective of the study and significance of the study. It helps research by effective way. In the
other hand it helps to write non related topic. Review helps to select method and sample
selection.

1.6 Method of study

Research methodology is a way to systematically solve the research problem. It may be

understood as a science of studying how research is done scientifically. In it we study the various
steps that are generally adopted by researcher in studying his research problem along with the
logic behind them. The various objectives of this chapter are to show the financial relations from
which liquidity, structure of working capital and utilization of working capital of the factory can
be measured.

The study about selected listed manufacturing companies in Nepal has been already streamlined
to some extent in earlier chapter regarding their growth, objective, statement of problem, relevant
literature of concerning manufacture in companies have been reviewed in second chapter. This
chapter, the focus has been made on research design, nature of data, population and sample,
source of data, data collection techniques and tools used for data analysis.

1.7 Limitation of the Study

This study is simply conducted for the partial fulfillment of the requirement for the degree of the
bachelor in business studies (BBS). This report has so many Limitations, which are as follows.

a) The whole study basically depending on secondary data.

b) The study concerned, only period of last 5years form the fiscal year 2069/2070 till 2073/2074
and hence conclusion is drawn confined only the above period.

c) The study is done within the limited resources.