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SR. NO.

CONTENTS PAGE
Introduction
1 1.1 Introduction
1.2 Rationale 3-4
1.3 Research Objectives
1.4Questions

2 Literature Review 5-7

Research Methodology
3 3.1 Research Philosophy 8-11
3.2 Research Strategy
3.3 Research Process

4 Reliability Validity and 11-12


Generalisability
5 Data Access And Research
Implication 12

6 Action Plan 13

7 References 14-15
1. Introduction

This research would be on the key financial strengths that make Berger Paints
(BD.) Ltd. the leader in paints industry in Bangladesh. The purpose of the study
is to make an analysis of Financial Statements of Berger Paints in terms of the
Paints Industry. This study attempted to understand the financial conditions of
Berger paints on different segments such as liquidity, profitability & solvency. The
purpose is also to make recommendations for improving the financial stability
and soundness of different services provided to Berger’s shareholders. It is also
the purpose of the researcher to help the management by providing an idea to
take appropriate decisions about the quality of the investing & financing in future.

1.2 Rationale:

Bangladesh’s paints industry is very competitive one and Berger Paints (BD.)
Ltd. is operating as the market leader in country’s paints industry. Berger Paints
Bangladesh Limited is the largest paint manufacturer and distributor in
Bangladesh. With its strong distribution network, Berger has reached most part of
the country. The company has successfully established itself as one of the most
recognizable brands and a supplier of modern paint solutions. The company
maintained a healthy and steady growth rate in sales, with an average of 27% in
the last four years. Average ROE is 36% while average ROA is 20% for the last
five years. The company also maintained a high dividend payout ratio with an
average of 89% for the last five years. The company is currently free of all debt.

Riding on success in real estate sector, Bangladesh's paint industry is witnessing


enormous growth. The paint industry is drawing local and foreign investments as
the industry sees almost double-digit growth annually. Use of paint for both
interior and exterior decoration is rising, giving a boost to the paint industry.

A feasibility study of Financial Statements of Berger Paints (BD.) Ltd. will help the
capital market investors as well as the new potential investors in the paints
industry. The ways I thought are, among all other manufacturers how BPBL
(Berger Paints Bangladesh Ltd.) stands as the market leader and how it gains
the belief of the capital market investors so rapidly.

This research will help the investors to take decision in investing for the
company. Taking all of the facts above in consideration this research should be a
guide book for the investors to invest in Berger Paints (BD.) Ltd. for profitable
investment, researchers, other companies in paints industry of Bangladesh and
of course the new potential investors in paints industry of Bangladesh.

1.3 Research Objectives:

Broad objective:
To assess and find out the financial conditions of the firm to analysis how
much the company is capable of doing business properly in future.

To guide the capital market investors through financial analysis for


profitable investing.

Specific objective:

Whether the customer are loyal to buy Berger product.

Find out the source of information.

Find out the customer satisfaction level in consideration to the product


quality.

Whether Berger can create awareness in the consumer mind.

1.4 Research Questions:

1. What are the factors to take invest decision in Berger Paints Bangladesh Ltd.?

2. What is the current situation of Bangladesh paints industry?

3. What are the prospects and competitive advantage to invest in Berger Paints
Bangladesh Ltd.?

4. Why investing in Bangladesh’s paints industry? What is Investment feasibility


there?

5. How lucrative it is to invest in the company?


2. Literature Review

In every business organisation executives have to get a choice of decisions to


run it beneficially. According to Hertz, Harvard business review this is very risky
to make decision for the company because more challenges engage with this.
Investment decisions engaged with present expenditure with return of profit for
the additional year. [Colin Drury (2004)]. The purpose of this research has to
discover the success of Berger Paints Bangladesh Ltd. in Bangladesh paints
industry. The procedure of investment decision plays a very important role in
capital market. I want to analyse the factors which would assist an individual or
an organization to create investment decision in Berger Paints Bangladesh Ltd.

Berger Paints Bangladesh Limited is by far the largest player in the country’s
paint industry. The paint industry in Bangladesh is estimated to be around BDT 8
billion. In terms of sales volume, Berger controls more than 56% of the market
share with BDT 4.5 billion net sales. Asian Paints, Roxy Paints, Pailac and Elite
Paints are some main competitors of Berger Paints in the local market. The
domestic demand for decorative paints is entirely met by the local companies.
However, in terms of quality, the domestic manufacturers lag behind the
international brands such as Berger and Asian Paints.

The industry in Bangladesh has three distinct segments—1) Decorative; 2)


Industrial; 3) Marine. Among these, decorative paints segment make up almost
84% of total sales, followed by marine paints (about 12%). Most of the
companies focus on decorative paints segments. Almost half of the decorative
paints segment is occupied by enamel paints.
The July-September period is historically the “off season” for the industry
because of weather conditions. Incidentally, that is the third quarter for Berger in
their accounting period.

A firm should not necessarily pursue the more lucrative opportunities. Rather, it
may have a better chance at developing a competitive advantage by identifying a
fit between the firm's strengths and upcoming opportunities. In some cases, the
firm can overcome a weakness in order to prepare itself to pursue a compelling
opportunity.

To develop strategies that take into account the SWOT profile, a matrix of these
factors can be constructed. The SWOT matrix (also known as a TOWS Matrix) is
shown below:

Strengths Weaknesses
Opportunities S-O strategies W-O strategies
Threats S-T strategies W-T strategie

S-O strategies pursue opportunities that are a good fit to the company's
strengths.

W-O strategies overcome weaknesses to pursue opportunities.


S-T strategies identify ways that the firm can use its strengths to reduce its
vulnerability to external threats.

W-T strategies establish a defensive plan to prevent the firm's weaknesses


from making it highly susceptible to external threats.

As this research paper is a particular industry focus so it has been divided into
two main sections- one is Berger Paints (BD.) Ltd. and another one is
Bangladesh Paints Industry. A broader reading on those above two topics has
taken place as I find those more relevant and essential to my research topic.
Following table ties up most of literatures with the research objectives and
questions.
Research objectives & Literature Relevance
Questions

Evaluate the factors can The factors that makes for I will find out the factors
effect to make an investment is not been and try to elaborate the
investment decision adequately discuss. financial terms for better
understanding.
I also find that low level of
investors’ analytical
knowledge about financial
analysis.

Opportunity may Most of the researchers said I will discuss more about
produce as a result of that there are huge to focus the suitable
investment opportunities to invest but opportunity to overcome
there are some the environmental
environmental factors also. factors.

Scope of potential investment


in painting sector is rapidly
growing.

Current situation of Situational demand for the I will illustrate the proper
Bangladesh paints industry. scenario of Bangladesh
industry. paints industry.
The booming real estate
sector creates a great
opportunity for the paints
industry.

Prospect & competitive Study shows that the ongoing Highest and fasted
advantage to invest in paints industry is increasing growing market, huge
Berger Paints (BD.) Ltd. day by day and there are population and new
some lacking of technological technology are main
changes as well. competitive advantage
3. Research Methodology

3.1 Research philosophy:

A philosophy of research is the method of information which should be analysed


and used. It also contains the vital assumption about the technique in that
personal view and these assumptions emphasize on the method and strategy of
research. Positivism, interpretive, and realism are the three main philosophies in
research.

In this research I will use positivism philosophies. Because positivism philosophy


is, selecting an overall research philosophy is the choice between two primary
alternatives: between a positivist and a phenomenological philosophy. A number
of authors have focused the key points of this choice relating research
philosophy. (Easterby-Smith et al., 1991; Hussey and Hussey, 1997; Saunders 5-
2 et al., 2000) The importance of induction and verification, and the
establishment of laws, are stressed by logical positivists and in this respect differ
from the earlier tradition of positivism. The stated aim of the logical positivists is
to cleanse scientific knowledge of speculative and subjective viewpoints.
Generally, to follows positivist philosophy quantitative researches are least
experimental and quasi-experimental research. In contrast, qualitative research
is also constructivist.

The fundamental benefits of choosing positivism are the objective and the
external world as well as independent observer. Positivism emphasis on
fundamental laws, look, facts, causality and It also preferred operational
concepts which may be precise taking big samples.

3.2 Research Strategy:

In the research, there are two kinds of research strategy, one is inductive and
another is deductive. Deduction is basically based on scientific research. It also
related to the improvement of a theory which is related to a specific experiment.
Deductive reasoning works from the more general to the more specific.
Unofficially another name of deductive approach is "top-down" approach. Here I
can think a theory regarding my topic then I can summarize more specific
hypotheses which I can measure. In general, research means to follow define
structural method. However step orders can differ relying on the subject matter
and researcher; these steps are generally part of most proper research, both
basic and applied.
In my research I will apply both deductive and inductive research approach. This
is because both strategies can be applied for this research.

Other approach is inductive that include data collecting by questioners interview.


According to (Ghauri & Gronhaug 2005, p91), the interview of most researches
start with a review of literature: that is based on previous studies about the topic,
which conduct review of books articles, journals and websites; say for instance,
websites of government, commercial WebPages and catalogues.

I will conduct some financial statement analysis which is oriented toward


achieving specific objectives.

Step 1- The first step is to explicitly define the analysis objectives.

Step 2- The second step in analysis is to formulate specific questions and criteria
consistent with the analysis objectives.

Step 3- The third step an analysis is identifying the most effective and efficient
tools of analysis.

Step4- The fourth step in analysis of Berger Paints Bangladesh Limited is


interpreting the evidence.

I will also follow the ‘Building Blocks of Financial Statement Analysis’ which
analysis emphasizes six areas of inquiry with varying degrees of importance.
They are considered “Building Blocks” of financial statements.

A. Short-term Liquidity

1. Current ratio

2. Quick ratio

3. Inventory turnover ratio

4. Inventory to sales

5. Average collection period

B. Cash Flow and Forecasting

C. Capital Structure and Solvency

1. Debt ratio
2. Debt equity ratio

D.Return on Invested Capital

1. Retern on asset

2. Return on equity

3. Price Earning ratio

4. Earngings per share

5. Dividend per share

6. Dividend payout ratio

7. Market to book value

E. Asset Turnover

1. Total asset turnover

F. Operating Performance and Profitability

1. Gross profit ratio\

2. Net profit ratio

I have analyzed the literature search that associated with the support and direct
the research of the topic. My research proposal is based on the database of
Journal, Library, University, Financial Statements, Textbooks and Websites. I
searched the data which provided through Global Information Inc (professional
Research reports) University library access, such as Mintel, Emerald, Business
Insight, ABI/Inform, and search engines like Google scholar database, article and
textbooks, which generally used in this paint industry, journals and articles about
Berger Paints (BD.) Ltd. and paints industry sector in Bangladesh.

3.3 The Research Process

Quantitative Research

In quantitative research, I will arrange some structured questions by applying this


format. This type of research is conducted to get a specific response which
could be presented with precise estimation. Personal interview, mail or telephone
interview can be methods to conduct this kind of information collection. (Cateora
& Ghauri 2006, p155).

Qualitative Research

In Qualitative research, I will undertake to obtain the reply of un-structured and


open-ended question from the answerer. “Qualitative research is used in the
research of international market to prepare and identify the problem more
evidently and to establish appropriate questions to be examined in ensuing
research”, says Ghauri et al (2006, p155). Interview, interview through mail and
telephone with the help of un-structured open questions can be used to collect
information for this type of research.

In this research I will follow quantitative research method. Because, the reason
the survey have conducted is to find the possible opportunities in the market so
do I can look into the segmentations of the market followed by appropriate target
market. Once I can find the target market I can see the size of it and calculate the
opportunity. To get to the target market a survey has been prioritised as an
important tool.

To become confident on the hypothesis an expert opinion thought to be very


essential. FDI as a research topic is a very sophisticated and needed to be
consulted with an expert.

4. Reliability, Validity and Generalisability of Research

Reliability of Research:

Reliability of results is the main issue of research. This is exactly every investors
expect from proper research and investigation which reliable. A high level of
constancy indicates a high level of reliability, which shows the results are
repeatable. Every well-known organization will give solid information of all
research about investment, and clear explanation of the research methodology
from sampling, articles or any other research done by other. If the research has
reliability then the results will be similar. I have considered using survey
questionnaires to carry out my research that there is potential to invest in
Bangladesh.

Validity of Research:

Validity is a sign of how appropriate my research is. However, in my research I


will apply validity through both the design and the method. I will truly represent
my findings and analysis to evaluate my research by Validity of research. In my
dissertation I will follow these criteria by using sampling method I have plan to
prepare my dissertation to fulfil these criteria through appropriate sample
selection, keep away from unfairness and useful coding.

Generalisability of Research:

Generalisation is also called external validity. I am convinced this work will be


useful to investing organisations, researchers, multinational companies, and any
mobile company in the world who wants to invest in Bangladesh.

5. Access & Resource Implication

Ethical Issues

The most important thing for the ethical issues of research is Plagiarism. It
concerns to copying the other’s work. The one way is referencing to keep away
from other work and I want to assure that I will not follow research which was
done by others. If I use anyone’s data I will must provide appropriate reference.

Deception is one of the ethical issues. It states to analyzing the data what I
actually want by creating the situation. In addition, I will guarantee that I will
examine the data effectively and efficiently.

Data Access

I will access the data collection by following various kinds of sources. I will be
concentrating on the question of research, objective of research and the design
of research. Some problems can be happened to collecting primary data about
mobile market in Bangladesh. I have planned to go Bangladesh to collect primary
data. I will collect data from the friends, Mobile Phone Company, mobile phone
users in Bangladesh and FDI sectors in Bangladesh. I will also use seceondary
data from university online library like Athens, mintel, emerald, British library,
journals, articles, newspaper report and Bangladesh economic growth website.

Resource Implications

This research consists of the secondary and primary information. I will pursue the
Content Analysis technique that is usually known as previous literature review
which has been followed in the study of this topic. Apart from that secondary
information have been collected from the statistics Department of Bangladesh
Bank, Investment Handbook of Bangladesh Board of Investment, Bangladesh
Economic Review 2006 and Bangladesh Bank’s Annual Report 2006.However, I
have collected few data from the daily and business newspapers as well as
sources of internet. The availability of the primary and secondary data as and
when required is essential for any research. Apart from the cost factor will also be
major issue and my dissertation research will require making a personal visit to
Bangladesh.

6. Action Plan

7. Reference
TIME TABLE 2011

MARCH-
APRIL MAY JUNE JULY AUGUST SEPTEMBER
Contents
Study of
research
proposal

Literature
Reviews
Analysis of
research
methodologies

Data collection

Data Analysis
and Writing

Compilation of
Research

Research
Review
Meeting with
Supervisor
Feedback from
Supervisor
Final Drafting,
Printing,
Revision and
Submission

1. Saunders, M., Lewis, P., Thornhill, A., (2007), Research methods for business
students, 4th ed., Financial Time/Prentice Hall, Harlow, England; New York.
2 Cateora, P. and Ghauri, P. 2006, International Marketing. Berkshire: McGraw-
Hill Education (UK).

3. Fisher, C. 2007, Research and Writing a Dissertation: A guide Book for


Business Students, Prentice Hall, London (UK).

4. Franklin, Root R. 1998, Entry Strategies for international markets, Lexinton


Books, NewYork (USA).

5. Ghauri, P. and Gronhaug, K. 2005, Research Methods in business Studies,


Prentice Hall, London (UK).

6. Porter, Michael E. 1998, on competition, Harvard Business Review Book


Series,(USA).

7. Johnson G and Scholes K, (2008) Exploring Corporate Strategy, Text,


Pearson, 8th edition.

8.Financial Statement Analysis, http://www.reportbd.com/articles/188/6/Financial-


Statements-Analysis-of-Berger-Paints-Bangladesh-Ltd/Page6.html

9. Berger Paints BD. Ltd., Brac Epl Investments Ltd.

http://eplbangladesh.com/brokerage/research/1297916341BERGER%20-
%20Dec%2024,%202009.pdf

10. Virtual Bangladesh n.d, History, Retrieved 12th December 2007,


fromhttp://www.virtualbangladesh.com/history/