1.

1 Overview: The textile sector of Bangladesh is very profitable sector for investment, by analyzing the textile sector of Bangladesh and different types of matrix I made a textile Business Proposal which I have approved that its profitable business, for proved my proposal I have analyze about whole textile sector of Bangladesh and then I choose a existing textile company and analyze their Balance sheet and Income statement and I also analysis their different types ratio. After doing all I made my business proposal and analyze it by using different matrix And Scenario Analysis. 1.2 Introduction: The textile sector plays a leading role in the economy of bangladesh, and now accounts for some 40% of The total manufacturing, and about 50% of the Industrial workforce. Readymade garments and Knitwear sub-sector accounts for nearly 77% of Bangladeshs export of goods in 1998-99. The textile sector is itself sub-divided into a number of activities, which include: spinning, weaving, and fabric processing. Out of the 105 private sector spinning mills, only 12 were believed to be capable of producing export quality yarn and only 3 of which can be regarded as state of the art. There are also some 15 factories listed as composite mills, which produce both textiles and garments on the same site. The Bangladesh textile industry is split between the public sector, which is controlled and regulated by the Bangladesh Textile Mills Corporation and the private sector who are mostly members of the Bangladesh Textile Mills Association.

1.2 Capacity of the Textile Sector in Bangladesh

1.3 Company Profile of Apex Spinning & Knitting Mills Limited

Apex Spinning and Knitting Mills Limited (ASKML) was incorporated in 1990 as a public limited company and listed with our national stock exchanges, which are Dhaka Stock Exchange, and Chittagong Stock Exchange. The company was initially formed for processing and export of knit garments, however subsequently, state of the art plant and equipment was added for handling all kinds of knitted fabrics and now ASKML is a leading manufacturer and exporter of all kinds of textiles knitted garments. ASKML is 100% export oriented, vertically integrated knitting, dyeing, finishing and garment manufacturing company with production capacity of about 15 million pieces of garments per year. ASKML exports to North America, EU countries and the South East Asia. The products of the Company include Pique Polo-shirts, Jersey Polo-shirts, Bubble knit Polo-shirts, Golf shirts, Sweat shirts, Hooded Sweat shirts, Polo shirts, Sweat Pants, Basic Tee-shirts, Track suits, Tank Tops, Big Tee-shirts, Heavy Teeshirts, Jogging Suits, Turtle Neck Tee-shirts, Jackets, Underwear, Children wear, men wear, babies wear etc. ASKML has an enviable reputation as an international garment manufacturer based on a simple but unwavering philosophy of producing high quality products. All fabrics produced in ASKML's own factory are tested in it's own laboratory for wet & dry-rub fastness, wash fastness, dimensional stability, required fabric density, yarn count and composition before making finished garments. ASKML has permission to put OKO Tex label on all its garments and currently in the middle of attaining ISO 9001:2000 certification from the accreditation body of UKAS. Our Associate Company in textile apparels is Apex Lingerie Limited, a fashionable ladies brassieres and brassiare-panty sets manufacturer and exporter of Bangladesh. Apex Textile Printing Mills Limited is a company under the management of Apex Holdings Limited (AHL), which manages several 100% export oriented manufacturing enterprises in frozen sea foods and textiles. Over the years the companies under AHL have built an enviable reputation of being a reliable vendor of consistent high quality, on time delivery and compliance with international labor & environmental standards. Companies under AHL have been supplying frozen foods and textiles to several large retail chains in North America and Western Europe for the last 25 years and enjoy prominent status with them. Our reputation is based on the simple philosophy that quality, on-time delivery and competitive price are the essence of long term relationship in export business.

1.4 Five Years Statistics of Apex Company

1.5 Ratio Analysis:

2008-09 2009-10 2010-11

Current Ratio

1.1113 0.7022

1.1270 0.7755

1.1006 0.7041

Quick Test Ratio

3 4 5 6 7

Inventory Turnover Total Assets Turnover Accounts Receivable Turnover Fixed Assets Turnover Net Profit Margin

48.7954 0.7914 0.4128 1.0700 0.0061 0.0941 0.0127 0.0331 1.3063 5.2548

38.1949 1.9034 1.2556 4.5045 0.0087 0.0958 0.0113 0.0349 1.1034 2.1034

46.5119 2.0846 0.3421 6.5667 0.0080 0.0743 0.0098 0.0334 1.6453 2.6453

Gross profit Margin

Operating profit Margin

10

Return on Equity

11

Debt to Equity Ratio

12

Total Assets to Equity Ratio

Current Ratio
1.1300 1.1200 1.1100 1.1000 1.0900 1.0800 2008-09 2009-10 2010-11

In this graph it is clear that, in the year of 2008-09 companys current ratio was 1.1113 and the year of 2009-10 was increase from 1.1113 to 1.1270 but the year of 2010-2011 the current ratio is decrease from 1.1270 to 1.1006 which is lower than the year of 2008-09.

Quick Test Ratio

0.8000 0.7800 0.7600 0.7400 0.7200 0.7000 0.6800 0.6600 2008-09 2009-10 2010-11

In this graph it is clear that, in the year of 2008-09 companys Quick Test ratio was 0.7022 and the year of 2009-10 was increase from 0.7022 to 0.7755 but the year of 2010-2011 the Quick Test ratio is decrease from 0.7755 to 0.7041which is little bit higher than the year of 2008-09.

Inventory Turnover
60.0000 50.0000

40.0000
30.0000 20.0000 10.0000 0.0000 2008-09 2009-10 2010-11

In this graph it is clear that, in the year of 2008-09 companys Inventory turnover ratio was 48.7954 and the year of 2009-10 was decrease from 48.7954 to 38.1949 but the year of 20102011 the Inventory turnover ratio is increase from 38.1949 to 46.5119 which is lower than the year of 2008-09.

Total Assets Turnover

2.5000 2.0000 1.5000 1.0000 0.5000 0.0000 2008-09 2009-10 2010-11

In this graph it is clear that, in the year of 2008-09 companys Total assets turnover ratio was 0.7914 and the year of 2009-10 was increased from 0.7914 to 1.9034 and the year of 20102011 the Total assets turnover ratio is continuously increase from 1.9034 to 2.0846.

Accounts Receivablle Turnover

1.4000 1.2000 1.0000 0.8000 0.6000 0.4000 0.2000 0.0000 2008-09 2009-10 2010-11

In this graph it is clear that, in the year of 2008-09 companys Accounts Receivable Turnover ratio was 0.4128 and the year of 2009-10 was increased from 0.4128 to 1.2556 and the year of 2010-2011 the Inventory turnover ratio is continuously decrease from 1.2556 to 0.3421 which is lower than the year of 2008-09.

Fixed Assets Turnover

7.0000
6.0000 5.0000 4.0000 3.0000 2.0000 1.0000 0.0000 2008-09 2009-10 2010-11

In this graph it is clear that, the year of 2008-09 companys Fixed Assets Turnover ratio was 1.0700 and the year of 2009-10 was increased from 1.0700 to 4.5045 and the year of 20102011 the Fixed assets turnover ratio is continuously increase from 4.5045 to 6.5667 which is represent that the companys position is positive.

Net Profit Margin

0.0100 0.0090 0.0080 0.0070 0.0060 0.0050 0.0040 0.0030 0.0020 0.0010 0.0000 2008-09 2009-10 2010-11

In this graph it is clear that, the year of 2008-09 companys Net Profit Margin ratio was 0.0061 and the year of 2009-10 was increased from 0.0061 to 0.0087 and the year of 2010-2011 the Net profit margin ratio is decrease from 0.0087 to 0.0080 which is represent that the companys profit is increase from the year of 2008-09 to 2009-10 but the year 2010-11 companys profit little bit decrease but the increasing portion is biggest the decreasing portion.

Gross Profit Margin

0.1200

0.1000
0.0800 0.0600 0.0400 0.0200 0.0000 2008-09 2009-10 2010-11

In this graph it is clear that, the year of 2008-09 companys Gross Profit Margin ratio was 0.0941 and the year of 2009-10 was little bit increased from 0.09421 to 0.0958 and the year of 20102011 the Net profit margin ratio is decrease from 0.0958 to 0.0743 which is represent that the companys Gross profit is increase from the year of 2008-09 to 2009-10 but the year 2010-11 companys profit is decrease and the Decreasing portion is biggest then increasing portion.

Operating Profit Margin

0.0140 0.0120 0.0100 0.0080 0.0060 0.0040 0.0020 0.0000 2008-09 2009-10 2010-11

In this graph it is clear that, the year of 2008-09 companys Operating Profit Margin ratio was 0.0127 and the year of 2009-10 was decreased from 0.0127 to 0.0113 and the year of 20102011 the Net profit margin ratio is decrease from 0.0113 to 0.0098 which is represent that the companys Operating profit is continually decreasing from the year of 2008-09 to 2010-11.

Return on Equity
0.0355 0.0350 0.0345 0.0340 0.0335 0.0330 0.0325 0.0320 2008-09 2009-10 2010-11

In this graph it is clear that the year of 2008-09 companys Return on Equity ratio was 0.0331 and the year of 2009-10 was increased from 0.0331 to 0.0349 and the year of 2010-2011 the Return on Equity ratio is decrease from 0.0349 to 0.0334 which is represent that the companys Return on equity is increase from the year of 2008-09 to 2009-10 but the year 2010-11 companys Return on equity is decrease but the increasing portion is biggest then decreasing portion.

Debt to Equity Ratio

1.8000 1.6000 1.4000 1.2000 1.0000 0.8000 0.6000 0.4000 0.2000 0.0000

2008-09

2009-10

2010-11

In this graph it is clear that the year of 2008-09 companys Debt to equity ratio was 1.3063 and the year of 2009-10 was decreased from 1.3063 to 1.1034 and the year of 2010-2011 the Debt to equity ratio is increase from 1.1034 to 1.6453 which is represent that the companys Debt to equity is decreased from the year of 2008-09 to 2009-10 but the year 2010-11 companys Debt to equity is increased and the increasing portion is biggest then decreasing portion.

Total Assets to Equity Ratio

6.0000 5.0000 4.0000 3.0000 2.0000 1.0000 0.0000 2008-09 2009-10 2010-11

In this graph it is clear that the year of 2008-09 companys Total Assets equity ratio was 5.2548 and the year of 2009-10 was decreased from 5.2548 to 2.1034 and the year of 2010-2011 the Total Assets equity ratio is increase from 2.1034 to 2.6453 which is represent that the companys Total Assets equity ratio is decreased from the year of 2008-09 to 2009-10 and the year 2010-11 companys Total Assets equity ratio is increased but the decreasing portion is

1.6 Business Plan:

My plan is different from others textile business but it is more profitable than others. My plan is to be own a government composite textile factory by lease which is closed since 1971, The factory is located in Narayangonj , Fatulla , named CHITRA RANJAN TEXTILE MILLS. It is a composite factory and this factory includes Spinning, Sizing, Dying and a knitting factory. In this factorys there has staff Quarter where can live 1000 staffs and the knitting factory includes 350 Repair machines. We can utilize this factory and produce 300000(three lac) miter fabrics in a week, We need to purchase hank or clue then convert it to cotton then cotton to fabrics, whole processing Will be done in this factory. To establish a composite factory we need minimum 2 years but in my plan we can established a Composite factory within 6 month only. To established a composite factory we need investment more than 300 cr taka but in my plan we can establish a composite factory by investing 2cr taka only. It is true that we will not be permanent owner of this factory because at first government will give only 10 years lease after 10 years we have to re-contract with government. What will be happen after ten years it does not matter, because first 10 years is enough to achieve our goal from this factory. 1.7 Budgets for Plan: PARTICULARS
Govt. formalities for getting lease Prepare factory for run Input material

TAKA 10,00,000

50,00,000

1,00,00,000
Others

40,00,000 2,00,00,000
TOTAL

1.8 SCENARIO ANALYSIS

Discount Rate Tax Rate project life Title Investment year o variable cost(60% of sales)

12% 34% 10 (20000000) 3456000000

for year 1 to 10 salse 240000000 unit (40 tk per unit) Fixed cost Depreciation pre-tex-profit Taxes profit after tax cash flow from operation present value of the cash flow stream Net present value of the project profit per year profit per month profit margin

144000000

5760000000 60000000 2000000 2246000000 763640000 1482360000 1480360000 8364364162 8344364162 148236000 12353000 61.765000%

1.9 Production Process and Development:

Target Production: Our target is to produce 300000 (three lac) miter fabrics per week, we produce 100 % export quality fabrics and also local quality. Process: Everything is processes in this factory we do not need to go out site to doing any part of process, we have to input hank or clue then we convert it to cotton in our spinning mill after that the produced cotton shift to sizing mil after that the sizing cotton shift to knitting mill to convert it cotton to fabrics and at last it will shift to dying mill to make different color of fabrics. All processing will be done in this factory because it is a composite factory.
Development:
We develop our product by using imputed hank or clue from china, Canada and korea. for develop our product we always ignore lower types of clue or hunk . Because of our company is leasing company and our capital is smaller than others compositor factories, and our production will be same thats why our expectation will be lower than others factory and thats why our product price will be cheap then others companies. In this situation our company will develop automatically if we give the best fabrics with a lower price.

2.1 Market Structure and Analysis 2.2 SWOT Analysis

Strengths Small capital high production This is a Government factory so no political harassment We have enough staff-quarter Government act as a partner Unlimited gas and electricity We have a 10 years contract with govt. so Byers will be faithful to us.

Weaknesses First entries without experience. Transportation problem because of its located at out of Dhaka. Opportunities We can get lot of machinery (spinning, dying, knitting ) with small capital. To established a composite factory minimum need 2 years but we can start within 6 month by taking govt. lease Because of Narayngonj is a Industrial area thats why worker are available. Progress in production, and processing technologies, Threats Competition from global players Fixed cost is higher the others

2.3 BCG Product portfolio Matrix:

Relative Market Share High Low

Industry growth rate

High

Star

Question marks Dogs

Low

Cash cow

From the above analysis it is clear that the project is situated in the point of Question marks, because the product is high growth potential but low present market share because there are already have some competitors. Additional resource is required to improve the market share and potentially convert them into Star. 2.4 General Electrics Stoplight Matrix

Business Strength

Strong Industry Attractiveness High Invest

Average Invest Hold

Weak Hold Hold

Medium Invest

Low

Hold

Divest

Divest

Because of Business strength is strong and Industrys Attractiveness is Medium thats why firm will or should invest.

2.5 Strategic Position and Action Evaluation (SPACE) SPACE involves a consideration of four dimensions: Companys competitive advantage Companys financial strength Industry Strength Environmental stability

In our firms have: Companys competitive advantage Companys financial strength Industry Strength Environmental stability -4

9 -5 7.5

From the above SPACE analysis it is clear that the company enjoying competitive advantage and considerable financial strength and belong to attractive industry that operate in a relatively stable environment and the firm have exploit opportunity available, this is why firm will go for Aggressive Posture.

Firm choose the aggressive posture because there are lot of opportunity in textile sectors and the company is financially strong and product attractiveness is not low this why company will invest more to convert their BCG position Question marks to Star position by growing companies relative market share.

2.6 Recommendation: Above analysis it is clear that textile sector of Bangladesh is best sector to invest and my business plan is profitable plan.