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An Internship Report On an analysis of Financial Performance Of Palmal group

of Industries

Preprint · August 2022

DOI: 10.13140/RG.2.2.19477.81126

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 An Internship Report
On an analysis of Financial Performance
Of
Palmal group of Industries

SUPERVISED BY:
Mohammad Shibli Shahriar
Associate Professor
Department of Business Administration
Daffodil International University, Bangladesh
PREPARED BY:
Shoriful Islam
ID No: 211-14-3314
MBA Major in Finance
Department of Business Administration
Daffodil International University
Submission Date

Letter of Transmittal

i ©Daffodil International University

Date:
Mohammad Shibli Shahriar
Associate Professor
Department of Business Administration
Daffodil International University Bangladesh

Subject: Submission of Internship Report on “Financial Performance Analysis of “Palmal

Group of Industries”.

Dear Sir
I am delighted to submit my Internship Report on Financial Performance Analysis of "Palmal
Group of Industries". Following the guidelines provided by you and the company, I have tried
my best to complete this report.
I am confident that the internship program has greatly enhanced both my practical experience
and theoretical knowledge. So, I hope you would be kind enough to accept my report.
Sincerely Yours.

___________
Name: Shoriful Islam
ID No. 211-14-3314
Batch: 58th
MBA (Major in Finance)
Daffodil International University

ii ©Daffodil International University

 Certificate of Approval

I am pleased to certify that the Internship report on “Financial Performance Analysis of

Palmal Group of Industries”. A study conducted by Shoriful Islam bearing ID No. 211-14-
3314 MBA Program, Department of Business Administration has been approved for defense.
Shoriful Islam is currently working with palmal group of industries under department of stock lot
holding position as internal Audit Executive and placement at Asulia Bongobondhu road has
been confirmed by the central management. Shoriful Islam prepared this report under my
supervision.

______________
Mohammad Shibli Shahriar
Associate Professor
Department of Business Administration
Faculty of Business & Entrepreneurship
Daffodil International University

iii ©Daffodil International University

 Executive Summary

This report will give a clear idea of its financial performance. Specifically, this report focuses on
what financial analysis is and how liquidity and profitability analysis are used which closely
monitor and evaluate during working hours at Asulia Land Project (ALP) Bongo bondhu road
of Palmal Group of Industries.

iv ©Daffodil International University

Table of Contents
Letter of Transmittal ...................................................................................................................................... i
Certificate of Approval ................................................................................................................................ iii
Executive Summary ..................................................................................................................................... iv
CHAPTER ONE ............................................................................................................................................... 1
INTRODUCTION ............................................................................................................................................. 1
1.1Introduction .......................................................................................................................................... 1
1.2Origin of the report: ............................................................................................................................. 1
1.3 Objectives of the Study ....................................................................................................................... 2
1.6Limitations: .......................................................................................................................................... 4
Chapter Two .................................................................................................................................................. 5
The Organizational Profile PALMAL GROUP OF INUSTRIES ...................................................................... 5
CHAPTER THREE ............................................................................................................................................ 6
Financial Performance Analysis Of Palmal Group of Industries.................................................................... 6
3.1RATIO OF THE REPORT ......................................................................................................................... 7
3.2.1Net Profit Margin .......................................................................................................................... 8
3.2.2Return on Assets (ROA)................................................................................................................. 9
3.2.3Return on Equity (ROE) ............................................................................................................... 11
3.3.1Current ratio ............................................................................................................................... 12
3.4Analyzing Activity Ratio...................................................................................................................... 14
3.4.1Total Asset Turnover Ratio.......................................................................................................... 14
3.5 Analyzing solvency Ratio ................................................................................................................... 16
3.5.1Debt to Equity Ratio .................................................................................................................... 16
3.5.2Times interest earned ................................................................................................................. 18

v ©Daffodil International University

Chapter Four ............................................................................................................................................... 19
Findings, Recommendations and Conclusions............................................................................................ 19
4.1 Findings of the Study......................................................................................................................... 20
4.2Recomentations ................................................................................................................................. 21
4.3Conclusion .......................................................................................................................................... 21
4.4 Reference & Bibliography ............................................................................................................. 21

vi ©Daffodil International University

 CHAPTER ONE

INTRODUCTION

1.1Introduction

Palmal Group of Industries is the leading and pioneer readymade manufacturing garments
company in Bangladesh. It is a leading supplier to customers by delivering socially, ethically and
sustainable manufactured quality products with on time delivery using a highly efficient, Eco-
friendly and vertically integrated manufacturing process. This study I will try to find out their
financial performance in stock lot department as I am responsible for this section

1.2Origin of the report:

This report was prepared as required under the MBA program Daffodil International University.
This is a golden opportunity to me for working with one of the most renowned and leading
manufacturing group company in the country – Palmal Group Of industries. I am currently
working with palmal group as permanent employee and I am placed on Asulia land project
(ALP) Bongobondhu road Asulia Dhaka Bangladesh and prepared a report to evaluate the
financial performances in stock lot department of Palmal group.

1 ©Daffodil International University

1.3 Objectives of the Study
Evaluate the financial performance of Palmal Group Of industries is main objective of the study

Specific objectives

1. To analyze the financial operations of Palmal Group of Industries

2. To evaluate those operations of Palmal Group of Industries
3. To identify some problems of Palmal Group of Industries
4. To make some suggestions to overcome the problems

2 ©Daffodil International University

1.5Methodology of the Study

primary secondary
sources sources

• Face to face
• Monthly reports of Stock
conversation lot
with the officer and
buyer

Daily diary
(containing my
• Practical desk activities of
work practical
orientation in)
maintained by
me

• Direct
observations
• Memos & Circulars

3 ©Daffodil International University

1.6Limitations:

To prepare a report requires different aspects and experiences. However I have encountered
some obstacles to prepare a complete and perfect report. Below are some of the obstacles
that have impeded my work

 Time Limitation: There was very little time for details about a giant organization such
as Palmal Group Of Industries.
 Inadequate Data: The lack of available information about export and import business
activities of Palmal group of industries made it difficult to collect the required
information.
 Lack of Record: Greater research was not possible due to restrictions by the
organization. Inadequacy of sufficient written documentation to conduct a comprehensive
study of the required. In many cases up-to-date information was not available.
 Lack of experiences: Lack of experience has served as a barrier to the rhythmic
exploration of the subject. Being a member of the organization; I couldn't express
anything sensitive issues.

4 ©Daffodil International University

 Chapter Two

The Organizational Profile PALMAL

GROUP OF INUSTRIES
The Palmal Group of Industries, one of the promising RMG manufacturing enterprises, made its
debut in 1984 as the sole venture of the late engineer. Mr. Nurul Haque Sikder, Former and
Founding Chairman and Managing Director of the Group.

Late Engg. Mr. N.H. Sikder appointed his beloved son Mr. Nafis Sikder as Managing Director in
2001. Since then Mr. Nafis Sikder has been the Honorary Managing Director of the Group and
under his dynamic leadership the Group has been running smoothly. The company's business
growth over the last seventeen years has been extremely high and significant.

At this stage palmal group of industries have managed more than 25000 permanent employees
and operating more than 30 individual factories alongside 60 units working together under
central management without facing any conflict, needless to say that palmal group of industries
have contributed to national economy for long time.

5 ©Daffodil International University

 CHAPTER THREE

Financial Performance Analysis Of Palmal

Group of Industries

6 ©Daffodil International University

3.1RATIO OF THE REPORT

1.Net Profit Margin

Profitability Ratio 2.Return on Assets
3.Return on Equity

Liquidity Ratio 1.Current Ratio

1.Total Assets Turnover

Activity Ratio

1.Debt-Equity Ratio
Solvency Ratio 2.Times interest earned

7 ©Daffodil International University

3.2.1Net Profit Margin

Net profit margin is equal to the percentage of income or profit makes as a percentage of income.
Net profit margin is the ratio of net profit to earnings of a company.

Net Profit Margin=Net profit after tax/operating income

Net Profit Margin

Year 2017 2018 2019 2020

Percentage of 28% 29% 32% 35%
Ratio
Source:annual report of Palmal Group of Industries

Graphical Presentation:

28%
35%

29%

32%

2017 2018 2019 2020

8 ©Daffodil International University

 Figure 3.1 Net Profit Margins

Interpretation: Net profit margin increased by year to year from 2017 to 2019, indicating that the
operating results were improving. In this figure it seen that company had a net profit margin of 35% in
2020 which show very decent operating results of the company

3.2.2Return on Assets (ROA)

Return on assets (ROA) is a ratio that measures a company's earnings before interest and tax
(EBIT), compared to a company's total net asset.

Return on Asset (ROA) =Net Profit after tax/Total Asset

Return on Total Asset

Year 2017 2018 2019 2020

Percentage of 1.43% 1.90% 1.43% 1.08%

ratio

Source: annual report of Palmal Group of Industries

9 ©Daffodil International University

Graphical presentation

1.90%

1.43% 1.43%

1.08%

2017 2018 2019 2020

Figure 3.2Return on asset

Interpretation: From the graph it is shown that the return on assets increased slightly from
2017 to 2018 and it decreased somewhat in 2019 and 2020, it was 1.43% and 1.08%
respectively. According to the graph in 2017, assets were the highest on return. This represent
that the year make the most revenue

10 ©Daffodil International University

3.2.3Return on Equity (ROE)
Return on Equity (ROE) considered how more effectively a company using their resources to
generate more profit

Return on Equity=Net Profit after Tax/ Shareholders equity

Return on Equity

Year 2017 2018 2019 2020

Percentage of 12.74% 15.96% 12.27% 9.63%

ratio

Source: annual report of Palmal Group of Industries

Graphical presentation

18
12.27%
16
14 15.96% 9.63%
12
9.63
10
8
6
4
2
0
2017 2018 2019 2020

Figure: 3.3Return on Equity

Interpretation:

In the 1st two years, company having 12.74% to 15.96% return on equity and the highest value had
shown in 2017 and lowest value had shown in 2019, which was not good.

11 ©Daffodil International University

3.3.1Current ratio

Current ratio measures that a firm's ability to pay short-term liabilities with its current assets. The
current ratio play vital role for measuring company liquidity because there are short-term
liabilities within the next year.

Current Ratio=Current Asset/Current Liabilities

Current Ratio

Year 2017 2018 2019 2020

1.1:1 1.2:1 1.01:1 1.08:1

Source: annual report of Palmal Group of Industries

Graphical Presentation

12 ©Daffodil International University

 1.25

1.2 1.2

1.15

1.1 1.1
1.08
1.05

1.01
1

0.95

0.9
2017 2018 2019 2020

Figure3.4 Current ratio

Interpretation: A current ratio of 1.2 to 2 is considered as the norm. If the ratio is less than 1,
it can be difficult for a firm to pay current liabilities. If the ratio is greater than 1 which indicates
to a company that it is able to cover its entire short-term obligation. Here we can see that the
current ratio of palmal group is 1.1: 1 in 2017, 1.2: 1 in 2018, 1.01: 1 in 2019 and 1.08:1 in 2020.
This indicates that the palmal group current liquidity. The position is not bad.

13 ©Daffodil International University

3.4Analyzing Activity Ratio

Activity ratios are a category of financial ratios that measure a firm's ability to convert cash or
sales into its balance sheet.

3.4.1Total Asset Turnover Ratio.

Total asset turnover is the financial efficiency ratio that measures a company's ability to use its
assets to increase sales.

Total asset turnover=Operating Income/Total asset

Total asset turnover Ratio

Year 2017 2018 2019 2020

Times 7.7 7.3 7.1 9.7

Source: annual report of Palmal Group of Industries

14 ©Daffodil International University

Graphical presentation

12

9.7
0
10

7.7
0
8 7.3
0 7.1
0

0
2017 2018 2019 2020

Figure: 3.5 Total asset turnover

Interpretation: The graph provides information about total asset turnover ratio of company
between 2017 to 2020.we know highest turnover is more efficient for the company. So according
that statement we can see that in the year of 2020 hold the highest total asset turnover which is
9.7times and in the year of 2019 hold the least total asset turnover which is 7.1times that not
good for the company.

15 ©Daffodil International University

3.5 Analyzing solvency Ratio

The solvency ratio determines the size of a company's after-tax income, not the cash-for-cash
depreciation expense, versus the company's total debt obligation.

3.5.1Debt to Equity Ratio

The debt to Equity Ratio shows the percentage of company financing from the company's
lenders and investors. A higher debt to equity ratio indicates that more credit financing (bank
loan) is used than investor financing (shareholder)

Debt to Equity ratio=Total liabilities/Total equity

Debt to Equity Ratio

Year 2017 2018 2019 2020

times 7.39 7.44 7.69 8.08

Source: annual report of Palmal Group of Industries

16 ©Daffodil International University

Graphical Presentation

8.2
8.08

7.8
7.69

7.6
7.44
7.39
7.4

7.2

7
2017 2018 2019 2020

Figure: 3.6 Debts to Equity Ratio

Interpretation:

Throughout the period, we can see that debt equity ratio of the company increased. The highest
ratio was 8.08 in 2020, while lowest ratio was 7.39 in 2017 in term of times. Palmal group of
industries debt equity ratio is higher than the value so it should be reduced.

17 ©Daffodil International University

3.5.2Times interest earned
The times interest earned ratio, sometimes called the interest coverage ratio, measures the firm’s
ability to make contractual interest payments.

Time Interest Earned Ratio =Earnings before interest & Taxes/Interest

Time Interest Earned Ratio

Years 2017 2018 2019 2020
Times 1.39 1.29 1.37 1.72
Source: annual report of Palmal Group of Industries

1.8 1.72

1.6
1.39 1.37
1.4 1.29

1.2

0.8

0.6

0.4

0.2

0
2017 2018 2019 2020

Figure: 3.7 times interest earn ratio

Interpretation: Times interest earn ratio had fluctuated over the time period.it highest
value accounted in 2020 and least value accounted in 2018 which was 1.29times and 1.72
times consistently.

18 ©Daffodil International University

 Chapter Four

Findings, Recommendations and

Conclusions

19 ©Daffodil International University

4.1 Findings of the Study
1. Net Profit Margin of Palmal group of industries was 35% in 2020 which is higher than
2017, 2018 and 2019.
2. Return on Asset (ROA) of Palmal group of industries was 1.90% in 2018 which is higher
than 2017, 2019 and 2020.
3. Return on Equity (ROE) of Palmal group of industries was 15.96% in 2018 which is
higher than 2017, 2019 and 2020.
4. Current Ratio of Palmal group of industries was 1.2:1 in 2018 which is better than 2017,
2019 and 2020.
5. Total Asset Turnover of Palmal group of industries was 7.7 times in 2017 which is higher
than 2018, 2019 and 2020.
6. Debt to Equity Ratio of Palmal group of industries was 8.08 times 2020 which is higher
than 2017, 2018 and 2019.
7. Times Interest Earned Ratio of Palmal group of industries was 1.72 times in 2020 which
is higher than 2017, 2018 and 2019.

20 ©Daffodil International University

 4.2Recomentations

The following recommendations can be suggested to resolve the issues outlined above:

1. Palmal group of industries total assets should be increased.

2. Palmal group of industries must generate earnings per share (EPS).
3. Palmal group of industries should be rose up their current assets.
4. Palmal group of industries must reduce their spending.
5. Palmal group of industries has to keep their total assets turnover.

4.3Conclusion
This internship report is part of my MBA course at Daffodil International University and I have
done my best to prepare with some gratitude. The main purpose of this internship course is to
provide the student with a job presentation and to know the scope of organizational attachment.
From a practical standpoint I can boldly declare that from the very first day I truly enjoyed my
internship at this organization. Furthermore, this internship program that is compulsory for my
MBA program is short-lived, but has definitely helped me think more about my career. I have
tried my soul to attach the research report to the relevant information needed in my report.

4.4 Reference & Bibliography

1. Monthly reconciliation, Annual report and analysis of daily and monthly challan

2. website https://palmalgarments.com/

3. Practical working experience.

21 ©Daffodil International University

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