WELCOME TO OUR PRESENTATION

We are …..

Tajuddin Ahmed 14-09

Md. Mazher Hossain 14-013

Md. Tozam Uddin 14-073

Khaleda Yesmin 14-121

A.S.M. Saiduzzaman 14-157

Presented by: Group-11

Working Capital Management of

PRAN AMCL

Roll: 14-121

Now Presenting…..

KHALEDA YESMIN

Company Profile  

  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.

MAJOR PRODUCTS

• 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.

Fin’l Performance of PRAN

COMPETITIVE CONDITIONS IN THE BUSINESS

Year 2010 2009 20082007

2006

Market Value Per Share 1363.00 1142.00 382.63386.00

519.25

Book Value Per Share 449.96 428.39 409.91422.11

412.55

1 2 3 4 50

500

1000

1500

2000

2500

Year

Market Value Per Share

Book Value Per Share

Roll: 14-073

Now Presenting…..

Md. Tozam Uddin

Inventory Policies of PRAN

 

 

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.

Inventories…Average Inventory:2006 491608049 4916080492007 (491608049+496023771)/2 4938159102008 (496023771+483346039)/2 4896849052009 (481449833+483346039)/2 4823979372010 (484200145+481449833)/2 482824990

Inventory Turnover : Inventory Period:

 

 

 

2006 1.21 times

2007 1.35

2008 1.46

2009 1.58

2010 1.78

2006 302 days

2007 270

2008 250

2009 231

2010 205

Cash and cash equivalents

 

 

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 company’s cash

management.

1 2 3 4 5

Year 2009 2008 2007 2006 2005

Cash & Cash Equivalence 40968825 16173069 32660159 39484215 33184149

2500000

7500000

12500000

17500000

22500000

27500000

32500000

37500000

42500000

Cash analysis of AMCL

Tak

a

Summary of Cash Accounts

2010 2009 2008 2007 2006

Net changes in cash and cashequivalents

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

Roll: 14-013

Now Presenting…..

Md. Mazher Hossain

A/R Management Receivables are direct result of credit sale. The main objective of receivables management is to

promote sales and profits.

Average receivables   Receivables Turnover

Receivables Period

 

2006 42501462

2007 44002771 Tk

2008 52608030

2009 51977440

2010 40763640

2006 18.77 times

2007 19.70 times

2008 17.60 times

2009 18.96 times

2010 27.00 times

2006 19.45 days

2007 18.53

2008 20.74

2009 19.25

2010 13.52

A/p Management

Accounts Payable Turnover: Accounts Payable Period

2006 65 times

2007 60

2008 56

2009 56

2010 55

2006 3.98 days

2007 6.10

2008 6.52

2009 6.25

2010 6.64

Measurement of Liquidity & Ratio

 

 

Major tools of financial analysis are ratio analysis and funds flow

analysis.

 

2010 2009 2008 2007 2006

Current Ratio 1.28 1.32 1.26 1.29 1.26

Quick Ratio .36 .37 .36 .34 .32

Accounts Receivable Turnover Ratio

12.13 16.16 23.23 18.89 19.18

Inventory Turnover Ratio 1.78 1.57 1.48 1.35 1.21

Asset Turnover Ratio 3.36 3.94 3.29 2.73 2.38

Accounts Payable turnover ratio 9.19 14.44 - - -

Risk factors

 

 

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:

 

Roll: 14-009

Now Presenting…..

Md. Tajuddin Ahmed

Working Capital Needs

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

   Raw materials Tk.100 Per unitDirect labor (50% fixed) 70 Factory overhead (80% fixed) 50Admin & Selling cost 60Total cost 280 Profit 20  Selling Price 300 Per unit  The company has the following balances as on the last week: Raw material Inventory 700,000 Tk.Finished goods Inventory 1400,000 Tk.Work-in –process 1000,000 Tk. 

Working Capital Needs(cont’d)

a. The company plans to production by 5 percent next week.b. Direct material cost will be same.c. Credit Period to debtors 35 days.d. Creditors allowed 30 days.e. Lag in payment of wages 10 days.f. Lag in payment of other expenses 07 days.g. 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:

 

Working Capital Needs(cont’d)

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.

Roll: 14-157

Now Presenting…..

A.S.M Saiduzzaman

Working Capital Needs(cont’d)

 

Inventory conversion period

1.Raw material conversion period 31.50

2. Work in process conversion period 20.45

3. Finished goods conversion period 28.64

Total Inventory conversion period 80.59

 

Book debt conversion period 35.00

Gross Operating Cycle 115.59

 

Payable Deferred period 30.00

Net Operating Cycle 85.59

Working Capital Needs(cont’d)

Revised Cost Sheet For 84000 Units:

Direct materials = Tk. 100 84,000*100 84,00,000 Tk.

Direct wages: Fixed Tk. 35 80,000*35 28,00,000

Variable Tk. 35 84,000*35 294,00,00

1,4140000

Prime cost

Factory overhead:

Variable Tk. 10 80,000*10 800000

Fixed Tk. 40 84,000*40 3360000

Cost of production 18300000

Admin cost Tk. 60  84,000*60 5040000

Total cost 23340000

 Investment in Inventory:

 Raw material: (8400,000*31.5)/360 735,000 Work in process (18300,000*20.45)360 10,34,458 Finished goods (1,830,0,000*28.64)360 1455,867  Investment in Inventory 3225325

Investment in Debtors ( 23340000* 35)/360 2269167 Investment in marketable 20000000 Securities Cash balance requirement 3000000

Estimated prepaid expense 1500000

Total investment in current assets 29994492 Current Liabilities Creditors (84,00,000*30)/360 700000 Deferred wages (5740,000*10)/360 159444 Deferred overhead expenses (4160000+5040000)*07/360 178889 Total current Liabilities 1038333 Net Working capital 28956160 

Estimating working capital requirements for 84,000units: 

Findings

 

 

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