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Tajuddin Ahmed Md.

Mazher Hossain

14-09 14-013 14-073 14-121 14-157

Md. Tozam Uddin Khaleda Yesmin A.S.M. Saiduzzaman

PRAN is the pioneer in Bangladesh to be involved in contract farming and procures raw material directly from the farmers and processes through state of the art machinery at their several factories into packed food and drinks products.

1985:Incorporation of the AMCL Group in Bangladesh, as private Ltd co. under the companies Act 1913.

1985:Inception of PRAN foods and beverage as the Brand name of AMCL in Bangladesh. Largest exporter of processed agro products with compliance of HALAL & HACCP to more than 70 countries from Bangladesh.

It also has the distinction of achieving prestigious certificate like ISO 9001:2000.

JUICE

BEVERAGE
DRINK CONFECTIONERY CULINARY SNAKES BISCUITS & BAKERY DAIRY

Exported items & Countries


Fruit Juices in Aseptic Pack & Glass Bottle, Fruit Drinks in Plastic Bottle, Pickles in Glass Jar & bulk, Canned Fruits & Vegetables, Extruded & Bangladeshi Snacks, Tea, Rice, Puffed Rice, Flatten Rice, Jam Jelly in Glass Jar, Cup & bulk, Spices, Mustard Oil, Mineral Water, Spices, Dehydrated Fruits, Tomato Ketchup / sauce in Glass Jar, Candies, Bubble Gum, Ball Gum, Molasses, Lollipop, Cup Jelly, and Vita Plus etc.

PRAN has also been exporting to: USA, Canada, Austria, France, Germany, Belgium, Switzerland, Singapore, Malaysia, Korea, Japan, Australia, Qatar, UAE, Kuwait, Oman, Bahrain, Lebanon, Angola, Congo, Ghana, Senegal, RCA, Gabon, Cameroon, Togo, Benin, Mayotte, Mali, Mauritania, Cabo Verde Islands, Reunion Islands, Nepal, Bhutan, Sri Lanka, Pakistan & Myanmar.

Finl Performance of PRAN


COMPETITIVE CONDITIONS IN THE BUSINESS
2007 Year Market Value Per Share Book Value Per Share 2010 1363.00 449.96 2009 1142.00 428.39 2008 382.63 409.91 2006

386.00
422.11

519.25 412.55

2500 2000 1500 1000 500 0 1 2 3 4 5 Market Value Per Share Book Value Per Share

Year

Inventories are stated at the lower of cost and net realizable value. Costs incurred in bringing the inventories to their present location and conditions are accounted for as follows:
Raw materials purchase costs on a weighted average basis Finished goods and work-in-progress costs of direct materials and labor

and a proportion of manufacturing overheads based on normal operating capacity.

Net realizable value is the estimated selling price in the ordinary course of

business, less estimated costs of completion & sale.

Provision is made if necessary, for obsolete and slow-moving item.

Average Inventory: 2006 2007 2008 2009 2010 Inventory Turnover :

491608049 (491608049+496023771)/2 (496023771+483346039)/2 (481449833+483346039)/2 (484200145+481449833)/2 Inventory Period:

491608049 493815910 489684905 482397937 482824990

2006 2007 2008 2009 2010

1.21 times 1.35 1.46

2006 2007 2008

302 days 270 250 231 205

1.58 1.78

2009 2010

Cash and cash equivalents comprise cash on hand and at bank and demand deposits. These also include bank overdrafts that form an integral part of the companys cash management.
Cash analysis of AMCL
45000000 40000000 35000000 30000000 Taka 25000000 20000000 15000000 10000000 5000000 0 Year Cash & Cash Equivalence 1 2009 40968825 2 2008 16173069 3 2007 32660159 4 2006 39484215 5 2005 33184149

2010

2009

2008

2007

2006

Net changes in cash and cash equivalents

26685799

-14243538

11697887

5671480

14034123

Cash and cash equivalents at beginning of the year

39941087

54184625

42486738

36815258

22781135

Cash and cash equivalents at end of the year

66,626,886

39,941,087

54,184,625

42,486,738 36,815,258

Receivables are direct result of credit sale. The main objective of receivables management is to promote sales and profits.

Average receivables

Receivables Turnover

2006 2007 2008 2009 2010

42501462 44002771 Tk 52608030 51977440 40763640 2006

2006 2007 2008 2009 2010 19.45 days

18.77 times 19.70 times 17.60 times 18.96 times 27.00 times

Receivables Period

2007
2008 2009 2010

18.53
20.74 19.25 13.52

Accounts Payable Turnover:

Accounts Payable Period

2006 2007 2008 2009 2010

65 times 60 56 56 55

2006 2007 2008 2009 2010

3.98 days 6.10 6.52 6.25 6.64

Major tools of financial analysis are ratio analysis and funds flow analysis.

2010
Current Ratio Quick Ratio Accounts Receivable Turnover Ratio Inventory Turnover Ratio Asset Turnover Ratio Accounts Payable turnover ratio

2009 1.32 .37 16.16 1.57 3.94 14.44

2008 1.26 .36 23.23 1.48 3.29 -

2007 1.29 .34 18.89 1.35 2.73 -

2006 1.26 .32 19.18 1.21 2.38 -

1.28 .36 12.13 1.78 3.36 9.19

PRAN faces following risk factors:


Interest rate risk Industry risk Market & Technology related risk Potential or existing Government regulations Potential changes in global or national policies Operational Risk:

PRAN has been operating at 80,000 units per week with the following cost structure.

Raw materials Direct labor (50% fixed) Factory overhead (80% fixed) Admin & Selling cost Total cost Profit Selling Price

Tk.100 Per unit 70 50 60 280 20 300 Per unit

The company has the following balances as on the last week: Raw material Inventory Finished goods Inventory Work-in process 700,000 Tk. 1400,000 Tk. 1000,000 Tk.

a. b. c. d. e. f. g.

The company plans to production by 5 percent next week. Direct material cost will be same. Credit Period to debtors 35 days. Creditors allowed 30 days. Lag in payment of wages 10 days. Lag in payment of other expenses 07 days. The company plans to invest 2 core tk in marketable securities & to pay expenses in advance tk 15 lakh.

If the company plans to retain minimum cash balance to be Tk. 30 lakh the working capital requirement would be:

Raw material conversion period = (Raw material Inventory * 360) / Raw material consumption = (7000,00 * 360 ) / 80,000*100 = 31.5 days Work in process conversion period = (Work in process inventory *360) /cost of production = (1000,000*360) /80,000* 220 = 20.45days Finished goods conversion period = (Finished goods inventory *360) /Total cost = (1400,000*360) / 220*80,000 = 28.64 days.

Inventory conversion period 1.Raw material conversion period 2. Work in process conversion period 3. Finished goods conversion period Total Inventory conversion period Book debt conversion period Gross Operating Cycle Payable Deferred period Net Operating Cycle 31.50 20.45 28.64 80.59 35.00 115.59 30.00 85.59

Revised Cost Sheet For 84000 Units: Direct materials = Direct wages: Fixed Variable Prime cost Factory overhead: Variable Fixed Cost of production Admin cost Total cost Tk. 100 Tk. 35 Tk. 35 84,000*100 80,000*35 84,000*35 84,00,000 Tk. 28,00,000 294,00,00 1,4140000

Tk. 10 Tk. 40 Tk. 60

80,000*10 84,000*40 84,000*60

800000 3360000 18300000 5040000 23340000

Estimating working capital requirements for 84,000units:

Investment in Inventory: Raw material: Work in process Finished goods Investment in Inventory Investment in Debtors ( 23340000* 35)/360 Investment in marketable Securities Cash balance requirement Estimated prepaid expense Total investment in current assets Current Liabilities Creditors Deferred wages Deferred overhead expenses Total current Liabilities Net Working capital (84,00,000*30)/360 (5740,000*10)/360 (4160000+5040000)*07/360 700000 159444 178889 1038333 28956160 (8400,000*31.5)/360 (18300,000*20.45)360 (1,830,0,000*28.64)360 735,000 10,34,458 1455,867 3225325 2269167 20000000 3000000 1500000 29994492

Analyzing the whole report we can obtain following findings:


Pran AMCL is one of the leading manufacturing business institutions of Bangladesh. PRAN AMCL use traditional & improved technique of working capital management. PRAN employed renowned and efficient professionals to conduct their management

specially WC management.

Liquidity condition of the company is satisfactory. PRAN meets their short term financing needs through short term bank loan from 6 branches of 3 popular banks.

Use of latest manufacturing Technology at PRAN makes work easy and fast. PRAN makes an important role in our economy.

Thanks

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