CHAPTER ONE INTRODUCTION
1
1.1 Background of the Study The BBA program of Uttara University is designed to focus on theoretical and Professional development of students who are open to take up business as a profession as well as service as a career. Internship reports are a requirement for the completion of the BBA program. This Internship reports is of knowledge and learning become perfect when it is associated with theory and practice. For any business student only curriculum activity is not enough for handling the real business situation, therefore, it is a requirement after the completion of BBA to involve with a business organization to prepare a report. So it is an opportunity for the students to know about the field of business through the Internship program. program.
To fulfill this requirement I worked as an intern in Transcom Electronics Ltd. for the Internship my preference was in stationery item. I submitted resume to different institutions but appointed as an Internship trainee of the TEL. My assigned topic is
F i nanci nancia al Pe P er form for mance E valuat valuatii on of of Tr T r anscom nscom E lect lectrr onics ni cs Ltd L td.. which is assigned
‘
’
by my supervisor in the department. On the basis of working experience in the Internship period. I have prepared this report and I have tried my level best to relate the theoretical knowledge with the practical work situation.
1.2 Objectives of the Study 1.2.1 Broad objective objectivess
nancial P er formance formance The broad objectives of the study is to evaluate and analyze the F i nancial E valuat valuatii on of of Tr T r anscom nscom E lect lectrr onics ni cs Ltd L td.. 1.2.2 The specific objectives of the study are given as:
To know about the financial activities of Transcom Electronics Ltd. To analyze the financial performance of Transcom Elect ronics Ltd. To find out the reason behind Transcom Electronics Ltd. enhancements or pitfalls of performance over years.
2
1.3 Company Profile Transcom Electronics Ltd (TEL) started its’ operation in 1993 by taking over PHILIPS electronics and lighting business in Bangladesh. Today, the company is one of the leading electronics and electrical company in the country, marketing and distributing Consumer lighting, Consumer electronics, Home Appliances and Professional lighting products from renowned brands brands through its extensive distribution and retail network. Originated with tea plantations in 1885, TRANSCOM today is one of the leading and fastest growing diversified business houses in the country employing over 10000 people. Not many industrial groups in Bangladesh can claim a history of continuous business pursuits stretching back over 125 years! Initially tea and later lat er jute formed the backbone of the family business. Although these are still part of the activities and contributing marginally to the overall group turnover. Presently those early industrial ventures have moved over to businesses involving high-tech manufacturing, international trading and distribution, forming strong ties with a host of blue chip multinational companies. In recent years, TRANSCOM has emerged as the largest media house in Bangladesh. Originated with tea plantations in 1885 – a a history of strong business pursuits stretching back over 125 years. Initially Initiall y tea later jute formed the backbone of the family f amily business. Although these are still part of the activities, they contribute marginally to the overall group turnover. These early industrial ventures have moved over to businesses involved in high tech manufacturing, international trading and distribution, forming strong ties with a host of blue chip multinational companies and growing. Not many industrial groups in Bangladesh can claim a history of continuous business pursuits stretching back over 125 years! Initially tea and later jute formed the backbone of the family business. Although these are still part of the activities and contributing marginally to the overall group turnover, presently those early industrial ventures have moved over to businesses involving high-tech manufacturing, international trading and distribution, forming strong ties with a host of blue chip multinational companies. In recent years, TRANSCOM has emerged as the largest media house in Bangladesh.
3
1.3.1 Brief Profile of the Company Transcom Electronics Limited
Transcom Electronics Ltd (TEL) started its’ operation in 1993 by taking over PHILIPS electronics and lighting business in Bangladesh. Today, the company is one of the leading electronics and electrical company in the country, marketing and distributing Consumer lighting, Consumer electronics, Home Appliances and Professional lighting products from renowned brands through its extensive distribution and retail network Transcom Digital is the outlet started in the early 2005 through which TEL is retailing products directly to end consumers in the metro and urban cities. In 2008, the company re-introduced itself as “Transcom Digital” as a multi brand, multi-category retailer catering for all Electronics, Appliances and IT products. Today Transcom Digital becomes the original outlet of TEL responsible for sales and providing all TEL electronic/IT products to their valued customers. Currentl y it is successfully running with 48 outlets throughout the country and expects to increase the total outlet number eventually. Moreover TEL has a strong Corporate Sales Team under Transcom Digital for direct sales to the corporate clients. Through the Electronics & Appliances Distribution Consumer Electronics, Home & Domestic Appliances from global brands such as Samsung, Philips, Whirlpool and home brand Transtec are sold throughout the country via a nationwide dealer network. Currently there are about 165 electronics dealers covered under this network through which Transcom Digital is retailing the following Electronics & Appliances:
Lighting & Electrical Distribution:
Distribution is the core competency area of Transcom Electronics Ltd. through which Lighting, Electrical Domestic Appliances from global brand PHILIPS and home brand TRANSTEC are sold throughout the country via a nationwide distributor network. Currently there are about 17,000 electrical outlets and 90,000 grocery outlets covered under this network.
Transcom Digital:
This is a new venture started in the early 2005 through which TEL is retailing products directly to end consumers in the metro and urban cities. In 2008, the company reintroduced itself as “Transcom Digital” as a multi brand, multi-category retailer catering
4
for all Electronics, Appliances and IT products. Today Transcom Digital is successfully running its business with 38 showrooms throughout the country and expects to increase the total outlet number to 50 by the end of 2010.The Company has a strong Corporate Sales Team under Transcom Digital for direct sales to corporate clients.
Electronics & Appliances Distribution:
Through the E&A Distribution Consumer Electronics, Home & Domestic Appliances from global brands such as PHILIPS, WHIRLPOOL, and home brand TRANSTEC are sold throughout the country via a nationwide dealer network. Currently there are about 165 electronics dealers covered under this network.
Projects: The Company has a strong and experienced project team handling PHILIPS
professional lighting projects. Transcom Beverage:
The company is the exclusive PepsiCo Franchisee for Bangladesh. TBL owns and operates modern plants in Dhaka and Chittagong for bottling the renowned soft drink brands: Pepsi, 7Up, Mirinda, Slice, Mountain Dew, Pepsi Diet and 7Up Light. Their vision is “To deliver sustained growth in Bangladesh and move towards dominant Beverage Company, delighting & nourishing every Bangladeshi, by best meeting their everyday beverages needs & stakeholders by delivering performance with purpose, through talented people.” Transcom Distribution Co. Ltd.:
The largest independent distribution setup in Bangladesh with full infrastructural facilities provided by a countrywide network of 23 branch offices along with one main office, warehouses and delivery vans, directly servicing over 8000 outlets throughout the whole country. TDCL is an allied business company of TRANSCOM Groups responsible for distributing multi-dimensional products across the country. The company started its business with the distribution of quality pharmaceutical products manufactured by ESKAYEF, NOVO NORDISK, SERVIER, ALLERGAN and consumer brands like Frito Lay, Heinz, Wrigley, Mars, Energizer, Schick, L'Oreal, Garnier, ConAgra Foods, McVities and Hemas. It started its diagnostic distribution division in 1993 by distributing laboratory equipments and reagents from Hettich (Germany), TREK Diagnostics 5
(USA) and Fortress(UK). It also distributes crude oil and oil products from Vitol. Basically TDCL has three distribution divisions: TDCL is an allied business company of TRANSCOM Groups with its three largest distribution divisions: 1. For Pharmaceutical products-Pharma Division 2. For Diagnostics and clinical products-Diagnostic division and 3. Consumer Brands division. TDCL has the largest independent distribution setup in Bangladesh with full infra structural facilities provided by a countrywide network of branch offices with warehouses and delivery vans. The company distributes1. TDCL-Pharma: Quality pharmaceutical products manufactured by SERVIER, NOVO NORDISK and ESKAYEF. 2. TDCL-Diagnostic: Diagnostic and clinical products from VesaTREK (USA), Asys HiTech (Austria) and Shel lab (USA). 3.TDCL-Consumer Brand: TDCL also markets and distributes color cosmetics; skin and hair care products from L’OREAL Paris, MAYBELINE New York and GARNIER Paris, Heinz, Lindt & Fritolay, the world’s number one potato chips is now being exclusively marketed and distributed all over Bangladesh by TDCL.
Bangladesh Lamps Ltd:
BLL is the pre-eminent manufacturer of electric light bulbs in the country. The company has an exclusive licensing agreement with PHILIPS Electronics N.V. Holland, under which it manufacturers PHILIPS lighting products. BLL was incorporated in 1960 as a subsidiary of PHILIPS, Holland. In March 1993, PHILIPS sold its entire shares to TRANSCOM. The pre-eminent manufacturer of electric light bulbs in the country. The company has an exclusive licensing agreement with PHILIPS Electronics N.V. Holland, under which it manufacturers PHILIPS lighting products. BLL was incorporated in 1960 as a subsidiary of PHILIPS, Holland. In March 1993, PHILIPS sold its entire shares to TRANSCOM. The primary purpose of BLL is to produce and serve Philips GLS lamps (Classic tone, Soft tone and Anti-Insect types) & Transtec CFL and GLS lamps (Clear & Lustre types) around the country which are marketed and sold under the governance of Transcom Electronics Ltd (TEL) as lightening distribution and sales projects. Due to the necessity of cost effective electricity the TFL tech bulbs are populated and distributed
6
more and more everyday around the country, BLL became one of the leading TFL bulb production houses
Bangladesh Electrical Industries Ltd:
BEIL is a leading producer of televisions and radios in Bangladesh and is the official licensee of PHILIPS Electronics N.V. Holland. The company was incorporated in 1960 as a subsidiary of PHILIPS, Holland. In March 1993, PHILIPS sold its entire shares to TRANSCOM.
Transcom Mobile Ltd:
At recent they started a new business, Transcom mobile Ltd. They started it in 2011.
Organogram: Transcom Electronics
7
1.4 Major difficulties faced for accomplishing internship During the preparation of this report, several problems have been encountered that may be termed as the limitation of the study. Adequate efforts have been taken to accomplish the study according to the objectives. But as the research team is consisted of only one member therefore it was not possible to cover more additional area, which would obviously give better results.
1. The first limitation is that I failed to sketch the complete picture of the Transcom Electronics Limited activities at the period of my internship programmed. So I tried my best to focus on what I have done and also tried to make it consistent with other part of the report. 2. The second limitation is the lack of intellectual thought and analytical ability to make in a perfect one. I have to offset with quality due to time constraint, which apparently seems to be the most severe limitation. 3. Sufficient records & publications as well as up to date information are not readily available. 4. The survey method needs efficient fund for fulfilling it properly. As it is for the academic purpose, money shortage is an obvious constrain. For data collection, the budget for printing and transportation costs is limited. 5. This study has not done first time in Bangladesh. But the literature reviews were not easily available. Moreover, there was very little information found in the perspective of Bangladesh. 6. In some cases, it is found that respondents are unable to remember the actual response. This inability has led to errors of omission, tel escoping, and creation.
8
CHAPTER TWO DESCRIPTION OF THE TOPIC
9
2.1 Topic Financial Performance Evaluation of Transcom Electronics Ltd.
2.1.1 Meaning of Performance Evaluation In the Oxford Dictionary the word ‘Performance’ means things that show how well or badly in working and the word ‘Evaluation’ means to form an opinion of the amount, value, quality, of thins after thinking about it carefully. When evaluating financial performance, certain must be consider. Transcom Electronics Limited blew some of factors to the obvious factors that investors should consider and outline the performance presentation standard, which now play a prominent role in performance evaluation .In case of evaluating the financial performance of a Company obvious factors are given blew.
2.1.2 Ways of measuring Financial Performance
The Balance Sheet and Profit and Loss Account are the basic financial statements of a business enterprise. They provide useful financial data regarding the operations of a firm. Financial statement contain a wealth of information which, if properly analyzed and interpreted, can provide valuable insights into a firm’s performance and position, A balance sheet reports the firm’s assets and liabilities at a certain point of time. The profit and loss account presents the summary of items of a firm during a particular period of time. Neither of these shows the nature of the transactions entered into during the period to finance the firm’s operations. Nevertheless, they provide some extremely useful information. “The Balance Sheet is a mirror of the financial position of a firm.” It show the assets the firm owns, the liabilities it is to pay to outsiders and the amount of internal liabilities in terms of capital supplied by the owners at a particular point of time. “The profit and loss account shows the results of business activities or operations during a certain period of time, usually a year.” It presents the summary of income obtained and the costs incurred by the firm during a year. Thus, the financial statements provide a summarized view of the operations of a firm. Much can be learn about a firm from careful examination of its financial statements. It is an important aid to financial statement analysis. Of the various methods of Financial Statements analysis, Ratio analysis
based on different ratios, which are calculated, from the accounting data
contained in the financial statements. Different ratios used for different purposes. Financial analysis depends largely on the use of ratios through there are other equally important tools of such analysis. 10
2.1.3 Objective of Financial Analysis:
In short, the main objectives of analysis of financial statements are to assess: the present and future earnings capacity or profitability of the concerns, the operational efficiency of the concern as a whole and of its various parts or departments, the short-term and longterm solvency of the concern for the benefit of the debenture holders and trade creditors, the comparative study in regard to one firm with another firm or one department with another department, the possibility of developments in the future by making forecasts and preparing budgets, the financial stability of a business concern, the real meaning and significance of financial data.
2.1.4 Ratio Analysis:
Financial analysis refers to an assessment of the viability, stability and profitability of a business. It is prepared by using ratios that make use of information taken from Financial statements and other reports.
The Liquidity of a business organization measured by its ability to satisfy its short term Obligations as they come due. This ratio shows the current assets to current debt ratio. This ratios are generally used
by short – term creditors like, suppliers. Under
liquidity ratios management uses those kind of ratios, they are as follows:
Current Ratio
Quick Ratio
Inventory Turnover Ratio
Average Collection Period
Total Asset Turnover
Debt Ratio
Debt- Equity Ratio
Equity Ratio
Gross profit margin
11
2.2 Theoretical Framework 2.2.1 Concepts of Finance Team of leading expert in quantities finance bring together cutting edge research and solid knowledge of best practice in risk management though a wide range of consulting and trading service. A branch of economics concerned with resource allocation as well as resource management ,acquisition and investment .simply finance deals with matters related to money and markets. To raise money through the issuance and sale of debt and/or equity.
2.2.2 Concepts of Financial Activities The financial activity measures and reports the status of financial resources and the changes in the resources. The FRS communicates this information primarily to external users. This type of reporting is called non-discretionary because the organization has few or no choice in the information it provides. Much of this information consists of traditional financial statements, tax returns, and other legal documents. Furthermore, the one word which can easily replace finance is “Exchange’. Finance is nothing but an exchange of available resources. Finance is not restricted only to the exchange and/or management of money. A barter trading system is also a type of finance. Thus, we can say, Finance is an art of managing various available resources like money, asses, investments, securities, etc. At present, we cannot imagine a world without Finance. In other words, Finance is the soul of our economic activities. To perform any economic activity, we need certain resources, which are to be pooled in terms of money (i.e.
in the form of currency notes, other
valuables, etc.). Finance is a prerequisite for obtaining physical resources, which are needed to perform productive activities and carrying business operations such as sales, pay compensations, reserve for contingencies (unascertained liabilities) and so on. Hence, Finance has now become an organic function and inseparable part of our day-to-day lives. Today, it has become a word which we often encounter on our daily basis.
12
2.3 Study framework
Topic selection, Data collection Analysis & Consultation with the supervisor
Data Observation & Separation
Primary data collection
Secondary data collection
Report Preparing
Data input to computer, Setting Processing & Preparing the report
Make as a book & Shown to supervisor for correction them submitted
13
CHAPTER THREE DATA COLLECTION AND PROCESSING
14
3.1 Data Description The report is descriptive in nature. To prepare a report gathering data is very important. The information was collected from both primary and secondary sources of data. Regarding the information required was collected within the organization from the Transcom Electronic Ltd.
3.2 Source of Data collection In order to make the report more meaningful and presentable, two sources of data and information have been used widely.
SOURCE OF DATA
PRIMARY
SECONDARY
DATA
DATA
Primary Source Practical desk work. Face to face conversation with the respective of Customers. Direct conversation with customers Face to face conversation with company managers and officers. Discussion with my supervisor
Secondary Source
Personal interview
Journal
Website : www.transcombd.com/about.html
15
3.3 Data Processing Methods Collected information have then processed & compiled with the aid of MS Word, Excel. Necessary tables have been prepared on the basis of collected data and various statistical techniques have been applied to analyses on the basis of classified information. Detail explanation and analysis have also been incorporated in the report.
Data Collection Method:
For the organization part information has been collected through different published articles, journal, and brochures.
16
CHAPTER FOUR RESULTS AND DISCUSSIONS
17
4.1 Financial Performance and Ratio Analysis of Transcom Electronics Ltd. In short, the main objectives of analysis of financial statements are to assess: the present and future earnings capacity or profitability of the concerns, the operational efficiency of the concern as a whole and of its various parts or departments, the short-term and longterm solvency of the concern for the benefit of the debenture holders and trade creditors, the comparative study in regard to one firm with another firm or one department with another department, the possibility of developments in the future by making forecasts and preparing budgets, the financial stability of a business concern, the real meaning and significance of financial data.
Financial analysis refers to an assessment of the viability, stability and profitability of a business. It is prepared by using ratios that make use of information taken from Financial statements and other reports.
The Liquidity of a business organization measured by its ability to satisfy its short term Obligations as they come due. This ratio shows the current assets to current debt ratio. This ratios are generally used
by short – term creditors like, suppliers. Under
liquidity ratios management uses those kind of ratios, they are as follows:
Current Ratio
Quick Ratio
Inventory Turnover Ratio
Average Collection Period
Total Asset Turnover
Debt Ratio
Debt- Equity Ratio
Equity Ratio
Gross profit margin
18
4.2 Current Ratio: Current Ratio
=
Current Assets Current Liabilities
Table 2 : Current ratio Year
Current Asset
Current Liability
Current Ratio
2016
2,464,125
3,385,850
0.73
2015
2,0603,325
1,851,205
1.11
2014
1,643,107
1,409,727
1.17
2013
1,506,071
1,313,393
1.15
2012
988,093
717,069
1.38
Source: Annual Report (2012-16) of Transcom Electronics Ltd.
Current Ratio
25000000 20000000 e l t i T s i x A
15000000 10000000 5000000 0 1 0.73
2 1.11
3 1.17
4 1.15
5 1.38
Curre nt Liability
3,385,850
1,851,205
1,409,727
1,313,393
717,069
Current Asset
2,464,125
20,603,325
1,643,107
1,506,071
988,093
2016
2015
2014
2013
2012
Curre nt Ratio
Year
Figure : Current ratio Interpretation:
As a manufacturing company, we know, the standard value of current ratio is 2:1. The company’s current ratio varies from 1.38 to 0.73 proceeding from the last 5 years.
19
4.3 Quick Ratio: (Current Asset Inventory)
Quick / Acid Test Ratio = Current Liability
Table 3: Quick Ratio Year
Current asset
Inventory
Current liability
Quick Ratio
2016
2,464,125
1,585,100
3385,850
0.26
2015
2,063,325
1,303,637
1,851,205
0.41
2014
1,643,107
1,075,310
1,409,727
0.40
2013
1506,071
959,414,
1,313,393
0.42
2012
988,093
662,012
717,069
0.45
Source: Annual Report (2012-16) of Transcom Electronics Ltd.
Quick Ratio
e l t i T s i x A
10000000 9000000 8000000 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 Year
Current asset
Inventory
Current liability
Quick Ratio
Series5
2012
988,093
662,012
717,069
0.45
Series4
2013
1,506,071
0
1,313,393
0.42
Series3
2014
1,643,107
1,075,310
1,409,727
0.4
Series2
2015
2,063,325
1,303,637
1,851,205
0.41
Series1
2016
2,464,125
1,585,100
3,385,850
0.26
Figure : Quick Ratio Interpretation:
We know, the standard value of quick ratio is 1:1. Our company, TEL has a quick ratio from 0.45 to 0.26 among the years 2012-2016. But the ratio had fallen in year 2016.
20
4.4 Inventory turnover ratio: Cost of Goods Sold
Inventory Turnover Ratio = Average Inventory
Table 4: Inventory turnover ratio Inventory
Year
Cost of Goods Sold
Inventory
2016
3,099,355
1,585,100
2.0
2015
2,405,361
1,303,637
1.84
2014
1,820,496
1,075,310
1.70
2013
1,526,514
959,414,
1.60
2012
1,298,911
662,012,
1.96
Turnover
Source: Annual Report (2012-16) of TEL
Inventory Turnover 2.5 2 e l t i T s i x A
1.5 1 0.5 0
Inventory Turnover
1,585,100
1,303,637
1,075,310
959,414,
662,012,
3,099,355
2,405,361
1,820,496
1,526,514
1,298,911
2016
2015
2014
2013
2012
2
1.84
1.7
1.6
1.96
Figure: Inventory turnover ratio Interpretation:
We know, the standard value of inventory turnover ratio is generally 8 times. The company’s inventory turnover ratio is 1.96 to 2 has fluctuated throughout the period and the highest value can be observed during 2016 and 2012. But still it is below the standard.
21
4.4 Average collection period: Account Receivable
Average Collection Period = Average Sales per Day
Table 5: Average collection period Year
Accounts
Average Sales Per
Average Collection
Receivable
Day
Period (days)
2016
640,195,291
6,519,639,234/360
35.35
2015
478,364,475
5,090,318,113/360
33.83
2014
343,870,341
3,900,732,314/360
31.74
2013
344,226,933
3,089,746,417/360
40.10
2012
194,727,875
2,534,174,981/360
27.67
Source: Annual Report (2016-2012) of TEL.
Average Collection Period (days) 100%
50%
0% 0 6 3 / 4 3 2 ,
0 6 3 / 3 1 1 ,
0 6 3 / 4 1 3 ,
0 6 3 / 7 1 4 ,
0 6 3 / 1 8 9 ,
9 1 5 ,
0 9 0 ,
0 0 9 ,
9 8 0 ,
4 3 5 ,
9 3 6 ,
6
8 1 3 ,
5
2 3 7 ,
3
6 4 7 ,
3
Average Collection Period (days)
4 7 1 ,
2
640,195,291 478,364,475 343,870,341 344,226,933 194,727,875
Figure : Average collection period Interpretation:
We know, the standard value of average collection period is 60 days to 90 days and the lower, it is more efficient. The average collection period of the company has fluctuated throughout the whole period. But still it is below the standard which is good for the company.
22
4.6 Total asset turnover ratio: Sales
Total Asset Turnover = Total Assets
Table 6 : Total asset turnover ratio Year
Sales
Total Assets
Total Asset Turnover Ratio
2016
6,519,639,234
7,691,601,900
0.85
2015
5,090,318,113
5,132,284,238
0.99
2014
3,900,732,314
3,851,369,286
1.01
2013
3,089,746,417
3,162,232,934
0.98
2012
2,534,174,981
2,154,993,391
1.18
Source: Annual Report (2016-12) of TEL.
Total asset turnover ratio 1.6E+10 1.4E+10 1.2E+10 e l t i T s i x A
1E+10 8E+09 6E+09 4E+09 2E+09 0 Total Asse t Turnover Ratio
1 0.85
2 0.99
3 1.01
4 0.98
5 1.18
Total Assets
7,691,601, 5,132,284, 3,851,369,3,162,232,2,154,993,
Sales
6,519,639, 5,090,318, 3,900,732,3,089,746,2,534,174,
Year
2016
2 015
2 014
2 013
2 012
Figure: Total asset turnover ratio Interpretation:
We know, the standard value of total asset turnover ratio for large organization is 2 times. The company’s total asset turnover ratio fluctuates from 1.18 to 0.85 which is below the standard.
23
4.7 Debt Ratio: Total Liabilities
Debt Ratio =
Total Assets
Table 7 :Debt ratio Year
Total Liabilities
Total Assets
Debt Ratio
2016
3,732,993,864
7,691,601,900
0.49
2015
2,160,813,294
5,132,284,238
0.42
2014
1,644,089,330
3,851,369,286
0.43
2013
1,500,159,577
3,162,232,934
0.47
2012
1,500,159,577
2,154,993,391
0.70
Source: Annual Report (2016-12) of TEL.
Debt ratio
e l t i T s i x A
Year
1
2
3
4
5
2016
2015
2014
2013
2012
Total Liabilities 3,732,993,8642,160,813,2941,644,089,3301,500,159,5771,500,159,577 Total Assets Debt Ratio
7,691,601,9005,132,284,2383,851,369,2863,162,232,9342,154,993,391
0.49
0.42
0.43
0.47
0.7
Figure: Debt ratio Interpretation:
The debt ratio of TEL. fluctuates from 0.70 to 0.49. We know, debt ratio indicates how much portion of total assets is financed by the debt. The lower, it is less risky.
24
4.8 Debt-equity ratio: Long term Debt
Debt- Equity Ratio =
Shareholders’ Equity
Table 8: Debt-equity ratio Shareholders’
Equity
Debt-Equity Ratio
347,143
3,958,608
0.088
2015
291,256
2,971,470
0.098
2014
234,362
2,207,280
0.106
2013
186,767
1,662,073
0.112
2012
160,319
1,277,605
0.126
Year
Long-term Debt
2016
Source: Annual Report (2016-12) of TEL.
Debt-equity ratio 4500000 4000000 3500000 3000000
e l t i T s i x A
2500000 2000000 1500000 1000000 500000 0 Debt-Equity Ratio
1
2
3
4
5
0.088
0.098
0.106
0.112
0.126
Shareholders’ Equity 3,958,608 2,971,470 2,207,280 1,662,073 1,277,605
Long-term Debt Year
347,143
291,256
234,362
186,767
160,319
2015
2014
2013
2012
2011
Figure: Debt- Equity Ratio
Interpretation:
We know the standard value of debt-equity ratio is 1:1. The debt-equity ratio is 0.1260.088 of TEL has fluctuated throughout the whole period.
25
4.9 Equity ratio: Total Equity
Equity Ratio =
Total Assets
Table 9: Equity ratio Year
Total Equity
Total Assets
Equity Ratio
2016
4,305,751
7,691,601
0.56
2015
3,262,726
5,132,284
0.63
2014
2,441,642
3,851,369
0.63
2013
1,848,840
3,162,232
0.58
2012
1,437,924
2,154,993
0.67
Source: Annual Report (2015-11) of TEL.
Equity ratio 12000000 10000000 8000000
e l t i T s i x A
6000000 4000000 2000000 0 Equity Ratio
1
2
3
4
5
0.56
0.63
0.63
0.58
0.67
Total Assets 7,691,601 5,132,284 3,851,369 3,162,232 2,154,993 Total Equity 4,305,751 3,262,726 2,441,642 1,848,840 1,437,924 Year
2015
2014
2013
2012
2011
Figure: Equity ratio Interpretation:
The equity ratio of Transcom Electronics Limited fluctuates from 0.67 to 0.56. We know, equity ratio indicates how much portion of total assets is financed by the equity. If the ratio is higher, it is less risky. Simultaneously it also decreases the firm ’s value.
26
4.10 Gross profit margin: Earning Before Interest & Tax (EBIT)
Gross profit margin =
Interest
Table 10: Gross profit margin Year
Gross Profit
Sales
Gross Profit Margin
2016
3,420,283,765
6,519,639,342
0.53
2015
2,684,956,321
5,090,318,765
0.52
2014
2,080,235,675
3,900,732,764
0.53
2013
1,578,652,589
3,089,746,334
0.51
2012
1,246,998,530
2,534,175,453
0.49
Source: Annual Report (2016-12) of TEL.
Figure: Gross profit margin Interpretation:
We know, the standard of gross profit margin is 20% to 30%. The company’s gross profit margin fluctuates from 0.49 to 0.53 in the preceding 5 years (2012-2016). Here, the gross profit margin has an increasing trend, which is desirable.
27
28
CHAPTER SIX INTERNSHIP EXPERIENCE
29
6.1 Internship Position I was given the opportunity to work in Jamuna Bank Ltd. for three months it was part of my academic program. In the internship period I have no specific position. So I have no fixed duties in the organization. I work under a manager and observed his different types of activities. I prepared this report on the basis of that three months observation. I have got various kind of experience of export procedure, JBL. systems, operations procedure, customer relationship etc.
6.2 My Job Responsibilities
File documentation: File documentation is one of the main responsibility regarding
my internship in this organization. I had to collect, and arrange, various types of official document according to their importance. For this purpose I had to coordinate with different department of Jamuna Bank Limited.
Data collection: I had to go to the field for collecting various types of task related
information, which are very much essential for successful arrangement of a product. Through field visit I had determine the total output regarding the expectation of a JBL products.
Coordination among department: I had to coordinate with different department of
the organization.
Arraigning material for the in house meeting: There were a huge number if
meeting during my internship in my organization. I had to collect different types of materials for those meetings.
Entry of information in office document and soft copy: I had to input office
documents and update the office document. Data entry and database management is remarkable of them.
30
6.3 Linkage between work-Internship topic There few specific responsibilities I have performed. These are: Back to Back L/C opening: Sometimes to complete export exporters have to buy raw
material and accessories from another supplier by opening Back to back L/C which is back to back L/C. It is new credit in favor of another benefici ary. Sometimes beneficiary seller of a credit himself is unable to supply goods specified in the L/C and required to purchase from another supplier by opening second credit.
Working at Jamuna bank Limited was a great experience for me. I have learnt many things from them. From my little knowledge what I have observed and some recommendations are as follows: Boss and subordinates relationship: I observed that between boss and subordinate has
friendly relationship for some cases. But there are also some traditional boss exist whose only need order and work. They just don’t much talk with subordinate without any works. But there are more leaders whose have power to control their subordinate with motivation and caring. Organizational culture and behavior: Organizational culture and behavior is well
maintained. In any organization there much more need ethical culture and behavior than paper rules and regulation in Jamuna Bank Ltd. I saw that it is very good. Every employee have positive attitude about their office culture and behavior.
Working environment: RFL Group ensures good working environment for its officials.
But not the best, Company should make friendlier working environment for employees. It may produce more works.
Centralized structure: Jamuna Bank Ltd. follows centralized official structure. In every
important decisions comes from top level and also every important have to pass from top level. I think it is not good idea. Decentralized is best idea to work efficient end effectively.
31
REFERENCES Books
Chowdhury, T. A., & Ahmed, K. (2009). Performance Evaluation of Selected Commercial Banks in Bangladesh. International Journal of Business and Management, , 86-97.
Pandey, I. M. (2004). “Financial statement analysis (9th edition ed.). New Delhi, India: Vikas.
Qamruzzaman, M. (2014). Analysis of Performance and Financial soundness of financial. Research Journal of Finance and Accounting , 169-186.
Van Horne, J. C., & Wachowicz Jr., J. M. (2005). “Financial statement analysis (11th edition ed.).
A, Chowdhury. “ Politics, Society and Financial Sector Reform in Bangladesh,” International Journal of Social Economies, vol. 4, pp. 963 – 988, 2002
S.H. Siddique and A.F.M.M. Islam. “ Banking Sector in Bangladesh: Its Contribution and Performance,” Journal of Business Research, Jahangirnagar University, vol. 3, pp. 16-33, 2001
R.K. Uppal. “Stability in Bank Income through Free-Based Activities,” Journal of Information Management and Business Review, vol. 1, pp. 1-8, 2010.
JBL Annual Report 2011-2015.
Website:
www.jamunabankbd.com
www.google.com
www.wikepedia.com
32
Appendix
33
