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Mazher Hossain
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
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.
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
Net realizable value is the estimated selling price in the ordinary course of
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
26685799
-14243538
11697887
5671480
14034123
39941087
54184625
42486738
36815258
22781135
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
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
65 times 60 56 56 55
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
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
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
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
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