Executive Summary

Pran group of Industries is one of the leading business institutions of Bangladesh. One of the major organizational goals is to reduce poverty and hunger through large scale employment generation. It id contributing directly to the economy of Bangladesh through its cooperation with farmers and export earnings. The major strength of pran in Bangladesh are experience, large company, greater source of finance, greater control over sources of raw materials, risk pooling, huge distribution network, conforming to standards, economic of scale, potential market in UAE. UAE offer opportunities such as unity of religion and large Bangladeshi and both countries have good relationship with each other. Also Dubai is a free trade zone which they opened for the foreign investors to invest their with least trade restrictions offering so many facilities to do business in the cosmo environment.

Finally the fruit processing industry has a tremendous potential to contribute to economic progress in Bangladesh. Twice and squash production makes up 16.5% of this potentially lucratice industry and that is why we think export of fruit juice is ultimately an important way of improving our Bangladeshi economy.

Objective

We were introduced from our course instructor Mrs umme Rumana Hoque to submit a financial report on a AMCL (Pran) company.

AMCL (pran) which full fill all the demand of our instructor to make a financial analysis report on it. We had some objectives behind making the report. These are

To know how to make a financial report. To gather practical knowledge on analyzing a company financially. To be experienced on calculating and making analysis on ratio, risk, scenario, To arrange an overall financial idea against a company.

We believe that we were successful to fulfill most of our objectives. Thanks Allah to bless on us.

Methodology

AMCL (Pran) is well known and leading company in Bangladesh. So to make a financial report on this company we have to give our full effort. It is not easy job to analyze AMCL (Pran) is financial performance. We tried our best.

We collect information’s from websites, reference book from Bangladesh, yearly annual report of AMCL (Pran) and from other sources.

To collect further information we have to go the head office of AMCL (Pran). We tried to meet with the head of finance department and head of accounting department. But they were to busy on their job. Besides this the head office didn’t provide us such information that can help us making the report.

We have to go DSE to collect the annual reports of AMCL (Pran) and after a lot of struggle we got that. We also have collected information from the Pran group websites (www.pranfoods.com.net).

Besides this we have to collect as many information we can collect from outside.

Thank you,

Limitation

It would be a book if we start to Marrate our problems and struggles. We have to face lots of problems to complete this report. As the date of submission was too close.

We feel lack of latest financial and accounting information when we constructing the report. We have to base on the old information in maximum time. But any how we tried to attach latest information about AMCL (Pran).

On the annual report got a lot of problem. The balance sheet were puzzled us. Besides this there was not sufficient information to make further calculations.

AMCL (Pran) websites is not so much informations. They do not attach on upload any kind of information that can help us in further financial calculation.

The head office of AMCL (Pran) was not supportice. They do not give us any kind of information and institution that can help us.

Thank you,

Company ProfileCompany Name Agricultural Marketing Company Limited (AMCL)Years of Establishment 1980Key word In DSE & CSE AMCL (PRAN)Corporate Mission Poverty and hunger are cursesCompany Aim Together to employment and earn dignity respect from

compatrios through profitable enterprise Corporate Head office Property heights, 12 RK Mission road, Dhaka-1203Company policy To Market products of consistent quality at home and broad

as per world standards produced hygienically in accordance with good manufacturing practices in state of the art plants & process packed in appropriate packaging.

Location of Production Ghonasha\palash, NarshingdiProduct Categories Juice, Drinks, Beverage, Culmary, Snacks, Confectionary,

DairyMajor Exporting Products Fruit juices, Fruit Drinks instand powdered drinks, Pickles,

conned Fruits & Vegetables, extruded and Fried snack, Tea, Aromatic Rice Puffed Rice, Flattered Rice, Jam & Jelly.

Major Exporting countries India, KSA, UAE, Kuait, Baharain, Qatar, Angola, Australia, Austria, Belgium, Benin, Brunei, Cameroon, Canada, Bhutan, Cahd, Congo, France, Gabon, Gambia, Germany, Ghana, Greece, Italy, Ivorycoast, Japan, Korea, Malaysia etc.

SWOT Analysis

As for as we know SWOT analysis is a combinations of a company which includes Strength, Weakness, Opportunity and Threats of that company. Lets make SWOT Analysis of AMCL (PRAN):

Strength:As far as we know AMCL (PRAN) is one of the leading food producing and food exporting company in Bangladesh “PRAN Juice; PRAN Mango Bar; PRAN Badam vaja; PRAN Squash” are the well known and well consumed product in Bangladesh produced by them. Besides this they have produced more than so varities of products.

Besides this AMCL (PRAN) is also export their products more than 45 counties. Their product chain is too large. Through in recent years their profitability is in down word position, their food become a brand.

Weakness:Through AMCL (PRAN) is a leading food company, it is not a well profitable company now. In year 2006, the company become collapse. All the lines and bars of the graph of profitability are declining. As the condition of Bangladesh in year 2006 is not suitable for doing Business. All the business man are in vain.

Besides this AMCL (PRAN) is too much fluctuating company. All the activity ratios, liquidity ratios say that is last 5 years of the company performance is jumping. AMCL (PRAN) prefer short term loan but it increase the interest rate expenditure.

Opportunity:

AMCL is a concern of PRAN group is famous for their food products. Besides their mission is to make Bangladesh hunger and poverty free, aim is to producing quality food. They have the opportunity to fulfill their mission.

It AMCL (PRAN) tries to increase their food quality more that the customers want, their sales will be increased at a surrounded rate.

AMCL (PRAN) tries to increase their productivity it’s a good sign for development.

Threat

There is a lots of threat for AMCL (PRAN). The competitors of AMCL (PRAN) are strong enough to produce quality goods. They produced maintain better quality then AMCL (PRAN).

AMCL (PRAN) is not aware of creating a branding image of their product. Their market policy is too old.

Liquidity ratio:

Current Ratio :

Year Total Current Assets Current Liabilities

2009 668461522 476423347 1.40:1

2008 673260852 469374341 1.43:1

Quick Ratio :

Year Current Assets-Stock Current Liabilities

2009 187011687 476423347 0.40:1

2008 189060707 469374341 0.40:1

Net Working Cpital : (Current Assets-Current Liabilities)

2009: 668461522-476423347 : 192038175

2008: 673260852-469374341 : 203886511

Liquidity Ratio 2008 2009

Current Ratio 1.43:1 1.40:1

Quick Ratio 0.40:1 0.40:1

Net working Capital 203886511 192038175

Liquidity ratios attempt to measure a comapany’s ability to pay off its short term debt

obligations.

Current ratio shows that AMCL was very much liquidate to cover its short term debt

obligations. Itterms of current ratio, 2008 was little better to year 2009.

Quick Ratio takes the more liquid current assets to cover the current liabilities. Here

quick ratio was same for two consecutive year.

In 2009 Net Working capital was lower in compare with 2008. It happened because

company’s credit policy was relaxed in 2009.

Debt Ratio : Total Liabilities/Shareholders Equity.

Year Total Liabilities Shareholder Equity

2009 161200621 359966920 44.78%

2008 110097836 342714360 32.42%

Debt to total Asset ratio : Total Liabilties/ Total Assets

Year Total Liabilities Total Assets

2009 161200621 521167541 31%

2008 110097836 453812196 24.26%

Interest Coverage ratio : EBIT/Interest Expense

Year EBIT Interest Expense

2009 148802612 98510327 1.51 times

2008 131550816 90559523 1.45 times

Days in Inventory : 365/ Inventory turnover

Year 365 day Inventory Turnover

2009 365 1.78 205 days

2008 365 1.58 231 days

Days in Payable : 365/payable turnover

Year 365 days Payable turnover

2009 365 91.65 3.98 days

2008 365 60 6.10 days

Average Collection/DSO : 365/Receivable turnover

Year 365 days Receivable turnover

2009 365 18.96 19.25 days

2008 365 27 13.52 days

Debt Ratios 2008 2009

Debt to Equity 32.42% 44.78%

Debt to total Assets 24.26% 31%

Interest Coverage ratio 1.45 times 1.51 times

Average collection period 19.25 days 13.52 days

Days in Inventory 231 days 205 days

Days in payable 6.10 days 3.98 days

Debt ratios give users a general idea of the company’s overall load as well as its mix of

equity and debt. The greater the amount of debt held by a company the greater the

financial risk of bankrupty.

Debt to Equity ratio measures the shareholders position in the company against

debtholders. The ratio was much more higher in 2009 than 2008. It means AMCL used

more debt Instrument to finance, as a consequence financial risk is increased.

Debt to total asset ratio was also higher in 2009 than 2008 due to above reason.

The interest coverage ratio is used to determine how easily a company can pay interest

expenses on outstanding debt. Overall AMCL coverage ratio was very poor, but it has an

increasing trend. So AMCL has low margin of safety.

Though AMCL was much more relaxed in credit sales, its collection period has an

decreasing trend and it shows the great efficiency of the management.

Prfitability Ratios :

Gross profit Margin : Gross Profit/Net sales

Year Gross Profit Net Sales Gross Profit Margin

2009 247818205 1106659846 22.40%

2008 224121282 985454208 22.74%

Net Profit Margin : Net Income (After tax)/Net Sales

Year Net Income Net Sales Net Profit Margin

2009 39969803 1106659846 3.61%

2008 35949958 985454208 3.65%

Return on Asset : Net Income/Total Assets

Year Net Income Total Assets Return On Assets

2009 39969803 521167541 7.67%

2008 35949958 453812196 7.92%

Return On Equity : Net Income/Shareholder’s Equity

Year Net Income Shareholders Equity Return On Equity

2009 39969803 359966920 11.10%

2008 35949958 342714360 10.50%

Total Asset Turnover : Net Income/Total Asset

Year Net Income Total Asset Total Asset Turnover

2009 39969803 521167541

2008 35949958 453812196

Earning Per Share : Net Income after tax/Number of outstanding Share

Year Net Income Number of outstanding Share Earning Per Share

2009 39969803 800000 49.96

2008 35949958 800000 44.94

Profitability Ratios 2008 2009

Gross Profit Margin 22.74% 22.40%

Net Profit Margin 3.65% 3.61%

Return On Assets 7.92% 7.67%

Return On Equity 10.50% 11.10%

Total Asset Turnover 7.92% 7.67%

Earning Per Share 44.94 49.96

Profitability ratios give users a good understanding of how well the company utilized its

resources in generating profit and shareholder value.

Gross profit Margin and Net Profit Margin has an decreasing trend and gap between this

two is very high. It happened because AMCL’s Operating expenses and financing

expenses are very high. AMCL was efficient enough to employ the company’s total

assets to make a profit in 2008 with 7.92% which was greater than 2009.

ROE Measures how much the Shareholders earned for their investment in the company.

ROE shows that in 2009 shareholders earned 11.10% which was greater than 2008.

Investors are more concern about company’s EPS. Overall it shows the company’s

profitability. AMCL’s EPS has an increasing trend and it was tk. 49.96 in 2009. AMCL is

going forward to Shareholders wealth Maximization.