Financial Performance Analysis of Transcom Group

Internship Report On Financial Performance Analysis of Transcom Mobile Ltd Supervised by Md. Shamim Hossain Senior Lecturer in Accounting Department of Business Administration Manarat International University

Prepared by A.K.M. Mahmadur Rahman ID # 1129BBA01817 Manarat International University

Manarat International University

Letter of Transmittal

Date: December 20, 2014 To Md. Shamim Hossain Senior Lecturer in Accounting Department of Business Administration Manarat International University Subject: Submission of Internship Report Dear Sir: It is my pleasure to submit my Internship Report on ‘Financial performance analysis of Transcom Mobile Ltd, as a part of my BBA final examination. Though it’s a new experience for me, I tried my best to gather relevant information for preparing a complete paper on this subject. Without the sincere co-operation and proper guidance of you, it was not possible for me to prepare the report. For this act of kindness I am grateful to you. This paper is not totally free from mistake due to some unavoidable limitations. I hope you will accept it with gracious consideration. Yours faithfully Thank you.

A.K.M. Mahmadur Rahman ID # 1129BBA01817 Manarat International University

DECLARATION

I, A. K. M. Mahmadur Rahman, am responsible for writing this report on “Financial performance analysis of Transcom Mobile Ltd”. I include all the reference & was not involved in any kind of plagiarism. I am well aware of the legal actions against plagiarism & MIU faculty or the University is not responsible for bears any costs regarding plagiarism. I declare that I am solely responsible for my actions & that if any of the above happens, I will not pursue any legal action against said personalities.

A.K.M. Mahmadur Rahman ID# 1129BBA01817 Department of Business Administration Manarat International University

Certificate of the supervisor This is to certify that the internship report titled “Financial Performance Analysis of Transcom Mobile Ltd” in the born fide record the report, has been prepared by A.K.M. Mahmadur Rahman bearing ID # 1129BBA01817 as a partial fulfillment of the requirement of Bachelor of Business Administration (BBA) degree from the Department of Business Administration of Manarat International University. The report has been prepared under my guidance and in a record of bona fide work carried out successfully

Md. Shamim Hossain Senior Lecturer in Accounting Department of Business Administration Manarat International University

ACKNOWLEDGEMENT

This report would have been impossible without the valuable contributions and limitless help of several individuals. First, my thank goes to Almighty Allah that my project has been done on time. I feel honored to lay my sincerest gratitude to my honorable supervisor, Md. Shamim Hossain, Senior Lecturer in Accounting, Department of Business Administration, MIU for helping me in preparing this project. I would like to thank all the staffs, executives and my office supervisor of Transcom Mobile Limited, Sadar Road, Mohakhali and Dhaka for helping me out to collect necessary information regarding this project. I have been benefited from many people in the evolution of this report. They have generously supplied insightful comments, helpful suggestions, and contributions all of which have progressively enhanced this report. The selection of company is always vital to successful study. In this report, my appreciation goes to executives and managers of Transcom Mobile Limited who have provided worthy information and contributed their valuable time.

i

Executive summary Internship is a part and parcel of BBA program. Every student must need to take part in internship if they want to complete BBA. By internship program student get real experience of the field work. Students are able to know how an organization is operated. I took part in internship in Transcom Mobile Ltd. Transcom established in 1885 and till now it carries out its work by fulfilled people’s satisfaction. Only few companies are available in the Bangladesh which passed 100 years in business carrier. It creates new strategy in business area and expanding day by day. It divided customer in different area by their age, class, city, etc. Transcom Mobile Ltd is a part of Transcom Group. My internship report made on “Financial performance Analysis of Transcom Mobile Ltd”. As a student of BBA, with major in finance, it is important for me to analysis financial performance of Transcom Mobile Ltd. Because finance is a subject where in every steps involve analysis of financial data for getting information of company’s performance. This is the main objective of this report. This report has 4 parts. First part is introduction, where I describe reason of the study, way of data collection, processing, full expansion of report objective, scope and limitation of the study. In second part, I give information about Transcom group. Here I give information of all company include in Transcom group, function of Transcom mobile, there financial data, and SWOT analysis. Third part is the main part of this report. Here I analysis financial data of Transcom mobile. This part made by ratio analysis and several point. This part also includes finding which was made by my observation. The last part is recommendation and conclusion. Here I recommended several points which come out findings. Finally the report end through conclusion. Day by day TML will go to improve by fulfill the customer demand and providing better service. I hope TML will continue this journey. ii

Contents Particulars Chapter 1

Chapter 2

Chapter 3

Chapter 4

Page

Introduction

1

Background of the study

1

Rational of the study

1

Objective of the study

2

Methodology of the study

2

Scope of the study

3

Limitations of the study

3

About Transcom

4

Mission of Transcom

4

Nature of Business

4

Organizational overview

4

Function

14

Organizational diagram

15

Share of the company

15

Financial information

16

SWOT Analysis

20

Financial Analysis

22

Ratio Analysis

26

Findings

33

Recommendation

34

Conclusion

35

iii

CHAPTER 1 Introduction

1.1 Introduction

Nowadays business is changing day by day based on the development. Every day new technologies are developed, plans are implemented, human powers are involved, techniques are created to speed up the progress, rivals are seen in all sectors, services are provided to satisfy the customer, and therefore, all these are take part in the business arena. So there is competition in business sector. In order to face the competitive business area, a business organization need to develop its service, recruit efficient human and technological power, analysis competitor benefit, and their own performance analysis and so on. And the business which can adopt these things as quickly as possible, it can exist long in the business arena. Transcom is one of the companies which exist in business arena near about 125 years. Due to provide better performance in the business, it still exists. Day by day it changed its business techniques, plans, properly manages its human resource, generates new ideas, analysis competitor performance and exists in business. 1.2 Background of the study Every BBA student needs to do internship program for completing under graduation, under the supervision of the supervisor. Due to this reason, I completed my internship in Transcom Mobile Ltd, in corporate section. I found a corporate environment to work in Transcom Mobile Ltd that helps me to get knowledge. I comply with the concerned rules made by the authority. I made my internship report on the topic of “Financial performance Analysis of Transcom Mobile Ltd”. 1.3 Rational of the study In today’s world only academic education does not make a student perfect to become competitive with the outside world. So internship is highly needed to gain idea, knowledge and experience.

Page 1 of

35

I choose my internship topic “Financial performance Analysis of Transcom Mobile Ltd”. As a student of BBA, with major in Finance, it is very important for me to analysis financial performance of a company. As a student of finance, I need to gain analytical ability/power via this report which I have prepared.

Page 2 of

35

1.4 Objective of the study Broad objectives The main objective of the study is to evaluate the financial performance of the Transcom Mobile Ltd. Specific objectives Under a broad objective the study focused on some several activities for comprehending an overall review. I. II.

To understand the corporate environment To make SWOT analysis of TML.

III.

To make the selling process of the corporate sales of TML.

IV.

To make out credit policy of the corporate customer of TML.

V.

To analysis the Financial performance of TML

1.5 Methodology of the study a) Study Design The study was fully a descriptive in nature. The study was conducted using the participatory method. To know the in-depth information, the topic was discussed with the expert professionals related to Transcom Mobile Ltd for several times and review of record of Transcom Mobile Ltd and other related secondary information. The purpose was to get an idea about the whole activities of the office where I did my practical orientation. Statistical data and other relevant information were gathered from secondary sources including several journals and booklets. b) Data Collection method a. Data have been collected from two sources. These are as under: i)

Primary source

ii)

Secondary source The primary sources of data include the followings: 1. Face to face conversation with the TML officers and staffs 2. Direct conversation with the clients 3. Study of different files of different sections of the TML 4. Practical Deskwork.

The secondary sources of data include as under: 1. Annual reports of Transcom Mobile Ltd 2. Different publications of Transcom Mobile Ltd c) Data Processing Collected information have then processed & compiled with the aid of MS Word, Excel computer software. Necessary tables have been prepared on the basis of collected data and various Assessments on corporate consumers buying behavior on Transcom Mobile Limited have been applied to analyses on the basis of classified information. Detail explanation and analysis have also been incorporated in the report. 1.6 Scope & duration of the study There are very little scope to describe all of the strategy and performance of the Transcom Mobile Ltd in this report. All the things are describe as much as possible. I did two month internship in Transcom Mobile Ltd and 3 month for prepared this report. 1.7 Limitations of the study 

There are shortages of information about the company.



There are shortages of company’s several type of document.



Unfriendliness of providing company’s document.

CHAPTER 2 Profile of the Organization

2.1 About Transcom

Originated with tea plantations in 1885, TRANSCOM today is one of the leading and fastest growing diversified business houses in the country employing over 10000 people. Not many industrial groups in Bangladesh can claim a history of continuous business pursuits stretching back over 125 years! Initially tea and later jute formed the backbone of the family business. Although these are still part of the activities and contributing marginally to the overall group turnover. Presently those early industrial ventures have moved over to businesses involving high-tech manufacturing, international trading and distribution, forming strong ties with a host of blue chip multinational companies. In recent years, TRANSCOM has emerged as the largest media house in Bangladesh. 2.2 Mission of Transcom I.

To provide reliable and durable products and service solutions to meet the changing needs of day to day lifestyle requirement of customers.

II.

To be the predominant and undisputed industry leader in the field of lighting, electronics, electrical & mobile product.

III.

To build an organization with core competency in distribution and retail with particular attention to complete customer satisfaction at every level and at par with the best global standard practices.

IV.

To drive performance through passion, teamwork and innovation and be committed for adding value to all our employees through regular training, thus creating invaluable assets of our human resources.

2.3 Nature of Business The company is engaged in import, purchase, assembles and carries on the business of marketing, selling and distribution of mobile phone set of Samsung brand and associated accessories. 2.4 Organizational overview There are 14 companies under the Transcom group.

Companies & Associates Transcom Electronics Ltd Transcom Foods Ltd

Transcom Beverages Ltd Transcom Mobile Ltd Transcom Cables Ltd Transcom Distribution Co. Ltd Bangladesh Electrical Industries Ltd Transcraft Ltd Bangladesh Lamps Ltd Eskayef Bangladesh Ltd Mediastar Ltd Tea & Rubber Farms Mediaworld Ltd Reliance Insurance Ltd 2.4.1 Transcom Electronics Ltd Transcom Electronics Ltd (TEL) started its’ operation in 1993 by taking over PHILIPS electronics and lighting business in Bangladesh.

Today, the company is one of the leading electronics and electrical company in the country, marketing and distributing Consumer lighting, Consumer electronics, Home Appliances and Professional lighting products from renowned brands through its extensive distribution and retail network. 2.4.2 Transcom Foods Ltd

Transcom Foods Limited (TFL) started its journey in 2003 as a franchisee of Pizza Hut, the first International Chain Restaurant in Bangladesh, and went on to sign the contract to become the franchisee of Kentucky Fried Chicken (KFC) in the

year 2006. Both Pizza Hut and KFC are subsidiaries of the world’s largest restaurant company Yum! Restaurants International. In a span of seven years, TFL has opened 4 Pizza Hut and 7 KFC outlets so far throughout the country.

2.4.3 Transcom Beverages Ltd Transcom Beverage Ltd (TBL) is the exclusive PepsiCo Franchisee for Bangladesh. TBL owns and operates modern plants in Dhaka and Chittagong for bottling the renowned soft drink brands such as, Pepsi, 7UP, Mirinda, Slice, Mountain Dew, Pepsi Diet and 7UP Light. The company is emerging with the motto to deliver sustained growth in Bangladesh and move towards dominant Beverage Company, delighting & nourishing every Bangladeshi, by best meeting their everyday beverages needs & stakeholders by delivering performance with purpose, through talented people.

2009 has been an amazing year for TBL, winning several spectacular awards as PepsiCo's exclusive bottling partner in Bangladesh. For its' extraordinary and outstanding venture through excellence TBL has been rewarded with several prestigious national and international recognitions.

2.4.4 Transcom Mobile Ltd With a business heritage of 125 years, TRANSCOM has evolved and continues to evolve as a diversified business entity to cater to the demands and needs for its customers, keeping the trend of changing market scenario. TRANSCOM has now become the distribution partner for the world famous brand SAMSUNG Mobile.

Transcom Mobile Limited (TML) is the TRANSCOM's latest venture into the Mobile Handset business and the company is exclusively distributing Mobile phones to all over the country. It started its' operation on 22nd June, 2010. At the beginning it operated nearly half of the country and the resources was 35. At present TML operates nationwide as a single distributor with trade marketing operation of SAMSUNG Mobile. 2.4.5 Transcom Cables Ltd Transcom Cables Limited is one of the largest conglomerates in Bangladesh has established in July 2009 for manufacturing of cables, wires and Conductors. The company started its' commercial production in May 2010. It's manufacturing domestic and commercial power cables of international standards (ISO certified factory) under the Transtec Brand and is currently marketing its product to electrical outlets in Dhaka region and to institutional customers all over the country. The range of its products includes PVC insulated cables, PVC insulated and PVC sheathed single core and multi core cables, control cables, flexible cables etc. The different sizes of bare and insulated All Aluminum Conductor (AAC) and Aluminum Conductor Steel Reinforced (ACSR) are also being manufactured here.

C

ables and Conductors are manufactured here according to Bangladesh Standard (BDS), German Standard (VDE), and British Standard (BS), international standard specification like BDS IEC. Bare and insulated AAC and ACSR conductors are also manufactured here according to BS and ASTM. On demand, cables and conductors are also manufactured here according to any International Standard. The company is proud to be enriched by very well experienced Production & Quality Management Team. 2.4.6 Transcom Distribution Co. Ltd Transcom Distribution Company Limited (TDCL) has the largest independent distribution setup in Bangladesh with full infrastructural facilities provided by a countrywide network of

23 branch offices along with one main office, warehouses and delivery vans, directly servicing over 8000 outlets throughout the whole country. TDCL is an allied business company of TRANSCOM Groups responsible for distributing multi-dimensional products across the country. The company started its business with the distribution of quality pharmaceutical products manufactured by ESKAYEF, NOVO NORDISK, SERVIER, ALLERGAN and consumer brands like Frito Lay, Heinz, Wrigley, Mars, Energizer, Schick, L'Oreal, Garnier, ConAgra Foods, McVities and Hemas. It started its diagnostic distribution division in 1993 by distributing laboratory equipments and reagents from Hettich(Germany), TREK Diagnostics(USA) and Fortress(UK). It also distributes crude oil and oil products from Vitol. Basically TDCL has three distribution divisions: Bangladesh Electrical Industries Ltd Bangladesh Electrical Industries (BEIL) is a leading producer of televisions and radios in Bangladesh and is the official licensee of PHILIPS Electronics N.V. Holland. The company was incorporated in 1960 as a subsidiary of PHILIPS, Holland. In March 1993, PHILIPS sold its entire shares to TRANSCOM.

2.4.7

Bangladesh Lamps Ltd Bangladesh Lamps Limited (BLL) is the pre-eminent manufacturer of electric light bulbs in the country. The company has an exclusive licensing agreement with PHILIPS Electronics N.V. Holland, under which it manufacturers PHILIPS lighting products.

BLL was incorporated in 1960 as a subsidiary of PHILIPS, Holland. In March 1993, PHILIPS sold its entire shares to TRANSCOM. The primary purpose of BLL is to produce and serve Philips GLS lamps (Classictone, Softtone and AntiInsect types) & Transtec CFL and GLS lamps (Clear & Lustre types) around the country which are marketed and sold under the governance of Transcom Electronics Ltd (TEL) as lightening distribution and sales projects. Due to the necessity of cost effective electricity the TFL tech bulbs are populated and distributed more and more everyday around the country, BLL became one of the leading TFL bulb production houses.

In 2002 Transtec has officially come into the world of lighting business with tube lights and started marketing lighting products nationwide. In 2003 Trasntec GLS was introduced in the market. At that time Transtec GLS was available only up to 100 W clear but gradually it started producing GLS lamp in BLL with various wattage range. Now, Transtec GLS is available in 25W clear, 40W clear, 60W clear, 100W clear, 200W clear and Luster clear, Luster Blue, Luster Green, Luster Red, Luster Yellow. All the wattage ranges ensure 1000 hrs (min) lifetime. High Quality Filament delivers proper wattage & brighter light and Fuse wire ensures safety of the system. Transtec Tube Light was available since 2002 in the market with 18 W and 36 W product range .To make a brighter light, Phosphor coating & Argon gas is used. The quantity of hazardous substance (e.g. mercury) in the tube light is controlled, so it is more environments friendly. Transtec Starter were in the market in 2003.

In 2005 TEL has added a new product range in lighting portfolio as Transtec CFL (Compact Florescent lamp). After initial years of import, since the end of 2007 Transtec CFL is being produced at BLL and captured substantial market share through its product superiority. It has a wide wattage range, classified in Premium and Classic category with pin and screw type holders like: 8W, 11W, 15W, 23W, 26W, 30W. Considering the consumer benefit the product has been developed to illuminate even at low voltage as 110 volts. It has built in short circuit & over voltage protection feature & 8000 hrs (min) lifetime. Since 2005 TEL is also into the business of tube light ballast with Transtec Magnetic Ballast which gradually converted into Transtec Electronic Ballast and started its own ballast production at Bangladesh Electrical Industries Ltd (BEIL) in 2009. Having high power factor (0.9), Transtec Electronic Ballast saves 30% of electrical energy. It can switch on the tube light at low voltage (even at 50 volts) and keeps the light output constant even at voltage fluctuation.TEL also has a strong and experienced project team handling PHILIPS professional lighting projects. Currently there are about 17,000 electrical outlets and 90,000 grocery outlets covered under the network. 2.4.8

Eskayef Bangladesh Ltd Eskayef Bangladesh Limited (SK+F), a successor of Smith Kline and French in Bangladesh was acquired by TRANSCOM in 1990, is one of the leading and fastest growing pharmaceutical company of Bangladesh, which is engaged in the manufacture and marketing of a wide range of therapeutic drugs, bulk pellets and animal health and nutrition products with annual sales surpassing 60 million US dollars. With qualified, trained and skilled professionals on its staff and its

unswerving standards of quality control, the company has distinguished itself as one of the most respected names in the pharmaceutical industry.

E skayef is growing more global and exporting its products and bulk pellets 20 countries across 5 continents i.e. Europe, Australia, South America, Africa and Asia. Eskayef is also marketing eye care products of Allergan Inc. USA, the global leader in this special area. As a part of business expansion, Eskayef has already submitted more than 200 registration dossiers in 15 new countries and another 8 countries are under registration pipeline. The company has been providing contract and custom manufacturing facility for foreign pharmaceutical companies. Currently it is contract manufacturing for two UK based and an Australia based company. Eskayef also did contract manufacturing for one UAE based and a German company. 2.4.9

Mediastar Ltd Mediastar Limited is an affiliate, emerging electronic media and newspaper concerns within TRANSCOM group. The company is currently consist of the following media associates: Prothom-Alo,

the

largest

circulated daily newspaper in the country, has established itself as a non-partisan, independent and respected voice in the field of journalism in Bangladesh. In the 10 years since inception, it has been the vanguard for social revolution with the slogan

(change self, change all). Consistently emphasizing the

possibility of a better Bangladesh, the newspaper has been instrumental in numerous social initiatives. The Magsaysay Award in 2005 for the editor Matiur

Rahman bears witness to the esteem the international community accords Prothom-Alo.

ABC Radio (Ayna Broadcasting Corporation Ltd) has started it’s Commercial operation from 7th January, 2009. It's broadcasting at FM 89.2 and serving 24 hour news and entertainment radio station and has become a popular FM Radio Station of the country. In addition to the programs on current Affairs and entertainment, ABC Radio is also airing latest news updates every hour. A host of young and enthusiastic journalists, Radio Jockeys and Technical Hands are working hard with strong commitment to air the latest news and healthy entertainment. With 244 reporters and correspondents around the country, ABC Radio also has correspondents in major cities of India, Pakistan, the US, UK and Japan. 2.4.10 Tea & Rubber Farms

TRANSCOM group has been involved in tea and rubber producing and distributing since its' birth. Till date the group consists of the following companies: M. Rahman Tea Company Limited The Company basically responsible for producing Tea, Rubber plantation and packing of garden fresh, premium “Heritage” Tea. Heritage contains Tea from the group’s 3 gardens exclusively for the connoisseur in 2 blends – morning and afternoon. Monipur Tea Company Limited The Company is basically an associate of TRANSCOM group responsible for Tea plantations. Heritage Argo Farms Ltd Heritage Argo Farms Ltd is a joint venture of Monipur, Marina and M. Rahman

Tea Company Ltd. Its building own Brand name in Sylhet fish market by intensive cultivation of fresh water fish especially Tilapia. Marina Tea Company Limited The company assist the same way with the previous ones for over 50 years of Tea plantations and distribution. 2.4.11 Mediaworld Ltd Mediaworld Limited is one of the associates of TRANSCOM group consist of a renowned English newspaper THE DAILY STAR.

THE DAILY STAR is the leading and most quoted English newspaper in Bangladesh. The company also publishes the Bengali SHAPTAHIK 2000 a quality political and current affairs weekly and ANONDODHARA, the premier film and entertainment fortnightly. 2.4.12 Reliance Insurance Ltd RELIANCE INSURANCE LIMITED was the fourteenth in line to start general insurance business in the private sector. It is basically one of the associates of TRANSCOM group. The Company was incorporated on 20th March 1988 and was allowed to commence business by virtue of the Certificate of Commencement of Business issued by the Registrar of Joint Stock Companies on 22nd March 1988. The Company obtained Certificate of Registration issued by the Controller of Insurance on 7th April 1988. It was subsequently listed in the stock Exchanges of Bangladesh in 1995. Currently it's employing 325 persons as regular employee around the country.

True to their vision to become the premier insurance organization and the insurer of first choice in Bangladesh with a sound reputation for dependability,

professionalism and the highest standard of customer services, it is working in the following areas: 

Underwriting of Fire Insurance



Underwriting of Marine (Cargo & Hull) Insurance



Underwriting of Motor Insurance



Underwriting of Overseas Mediclaim & Holiday Insurance



Underwriting of Miscellaneous Insurance



Underwriting of Public Issue of Shares & Debentures



Investment of Shares & Debentures

2.5 Function I.

To import Samsung Mobile in Bangladesh

II.

To distribute Samsung Mobile in Bangladesh

III.

To promote Samsung Mobile in Bangladesh

IV.

Corporately sell Samsung Mobile in Bangladesh

V.

Give better service to the Samsung customer.

2.6 Organizational diagram

2.7 Share of the company Authorized share capital 1000000 ordinary shares of Tk. 100 each = 100000000 Issued, Subscribed and paid up capital 100000 shares @ Tk 100 each

= 10000000

Detail shareholding position of the company is as below: Particulars

Face Value

Number of shares

Taka

Transcom Limited

100

99300

9930000

Mr. Latifur Rahman

100

100

10000

Mrs. Shahnaz Rahman

100

100

10000

Mr. Saifur Rahman

100

100

10000

Mr. Atiqur Rahman

100

100

10000

100

100

10000

Mrs. Simeen Hossain

100

100

10000

Ms. Shahrez Huq

100

100

10000

Total

100

100000

10000000

Mr.

Arshad

Waliur

Rahman

2.8 Financial information 4 years balance sheet at glance

ASSET 2013

2012

2011

2010

9058646

5750453

7478611

Noncurrent asset Property,

Plant

and 6902890

Equipment Pre operation expenses

346017

576696

807375

1038054

Total Noncurrent asset

7248907

9635342

6557828

8516665

Inventories

495582410

184696136 512179697 110031730

Advance income tax

8537259

4713359

2802102

1161480

Cash and Bank balance

59047149

11392087

-19550482

3313996

Account Receivable

539813481

285601036 361997873 186914162

Current Asset

Co-op, Price Protection, KPI & incentive

-1837929

20984777

Advance, Deposit and 4945098

1162800

1257845

5000

37050000

-4534539

31969104

Pre payments Intercompany

Current 3000000

accounts Total current asset

1110925397

524615418 852314567 354380249

Total Assets

1118174304

534250760 858872395 362896914

EQUITY AND LIABILITIES 2013

2012

2011

2010

Share Capital

10000000

10000000

10000000

10000000

Retained Earnings(loss)

-95545120

-96910652

-

-33174244

Owners Equity

100718448 Loan

from

Sister 71566320

71624367

Concern Total owners equity

-13978800

-15286285

-90718448

-23174244

1011459895

503229850 783903475 359789955

Current Liabilities Short Term Borrowing Trade

and

Other 80216544

30974679

149187178 5049133

Payment Provision

for

Extra

-8296205

1913655

24796395

19318415

Margin Provision for Co-op, 14008407 price protection & sales incentive Intercompany Current 8938448

5518321 74044

accounts Bank overdraft

17529810

9740151

Total current liabilities

1132153104

549537045 949590843 386071158

Total

1118174304

534250760 858872395 362896914

Equity

and

Liabilities

Page 17 of 35

4 years income statement at glance Particulars

2013

2012

Turnover

3612722944 2143288218 1642185648 518056649

Cost of Goods sold

-

-

2011

2010

-

-

3389430971 2010524860 1540600091 512105405 Gross Surplus

223291973

132763358

101585557

5951244

62800450

49555841

44251345

13044918

34030530

14454635

21089207

972148

Depreciation

3412066

2849492

2056520

1019851

Total

100243046

66859968

67397072

15036917

Operating Profit

123048927

65903390

34188485

-9085673

Finance Cost

-121683394

-62095594

-101732689

-24088571

Net Profit before Tax

1365533

3807796

-67544204

-33174244

Less: Operating Expenses and Charges Administrative and Operating Expenses Selling and Distribution Expenses

Page 18 of 35

4 years cash flow statements at glance Particulars A. Cash Flow from Operating Activity Collection from customers Cash paid to suppliers and employees

Interest paid Profit before Tax Adjustment for depreciation Increase/Decrease in Current Asset Increase/Decrease in Current Liability Net cash used in operating Activities B. Cash Flows from Investing Activities Acquisition of asset Pre Operating Expenses Net cash used in investing Activities

2013

2012

2011

344284393 220200732 3 0 327542944 205667051 0 4 167414493 145336806 -118503121 -108236552 -67544204 -33174244 2056520 1019851

48911372

37100254

-1256310

-6157685

-1256310

-6157685

52079879 6 56580688 3 -20479597

35106625 3 38607115 7 2850511

-328362 230679 -97683

-8498462 -1038054 -9536516

C. Cash Flows from Financing Activities Share Capital Share money deposit Net Cash used in financing activities D. Net (Decrease)/Increase in Cash and Cash Equivalents (A+B+C) E. Add: Cash and Cash Equivalents at the beginning of the year F. Cash and Cash Equivalents at the closing of the year (D+E)

2010

10000000 10000000

47655062

30942569

-20577280

11392087

-19550482

3313996

59047149

11392087

-17263284

3313995

3313995

Page 19 of 35

2.9 SWOT analysis SWOT analysis is a strategic planning method used to evaluate the Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business venture. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieve that objective. 

Strengths: Characteristics of the business, or project team that give it an advantage over others



Weaknesses: Characteristics that place the team at a disadvantage relative to others



Opportunities: External chances to improve performance (e.g. make greater profits) in the environment



Threats: External elements in the environment that could cause trouble for the business or project

The result of the analysis is a matrix of positive and negative factors for management to address: Factors Internal factors External factors

Positive factors Strengths Opportunity

Negative factors Weaknesses Threats

Strengths: 

Strong Brand image of the corporate level



Continuous focus on improvement of customer service



Long time experience of business



Various type of business

Weakness: 

Inefficient work force



Delay in Decision making due to Bureaucracy (Chain of hierarchy)



Inexperienced top level management



Retain high profit margin

Opportunities: 

Able to provide service as customer want



Able to reduce profit margin Page 20 of

35

Threats: 

High price of product



New competitor



Low profit in business

CHAPTER 3 Analysis and Findings

3.1 Financial Analysis

3.1.1

Sales Sales Sale is the one and only earning sector of TML. Every year sales is

Taka in Core

increasing which make TML profit. In below I show 4 years sales history:

Sales

4E+09

3.5E+09 3E+09 2.5E+09 2E+09 1.5E+09 1E+09

500000000 0 Taka in Core 518056649

3612722944

2143288218

1642185648

Sales of TML was increased year by year. Height sale was in 2013. Profit Profit shows company’s performance in the business. In below I show 4 years profit earnings.

5000000 0 -5000000 - Profi 1000000 0t 1500000 0 2000000 0 2500000 0 3000000 0 3500000 0 4000000 0 4500000 0

Taka in Core

3.1.2

201 3 1365533

201 2 3807796

-50000000 -55000000 -60000000 -65000000 -70000000 201 201 1 0 -67544204 -33174244

Profit In 2010 and 2011 profit of TML is in minus figure but in 2012 profit was increase but in 2013 it was decrease again. Profit was not satisfied then sales.

3.1.3

Cash flow Cash flow is the movement of money into or out of a business, project, or financial product. It is usually measured during a specified, limited period of time. Measurement of cash flow can be used for calculating other parameters that give information on a company's value and situation. Cash flow can be used, for example, for calculating parameters: it discloses cash movements over the period.

Cash Flow

Taka in Core

650000 00 550000 00 450000 00 350000 00 250000 00 150000 00 5000000 500000 0 1500000 0 -25000000 Cash Flow

201 3 59047149

201 2 11392087

201 1 -17263284

201 0 3313995

In 2013, cash flow is in minus figure. But other year it is in plus figure. 3.1.4 Total Asset

The sum of current and long-term assets owned by a person, company, or

Taka in Core

other entity. 1.2E+09

Total Asset

1E+09 800000000 600000000 400000000 200000000 0 Total Asset 362896914

1118174304

534250760

858872395

Total asset is fluctuated in every year. Highest total asset is in 2013 amount is

1118174304 core.

3.1.5

Inventory Inventory or stock refers to the goods and materials that a business holds for the ultimate purpose of resale (or repair).

Taka in Core

Inventories 6000000 00 500000000 400000000 300000000 200000000 100000000 0 Inventories 110031730

495582410

184696136

512179697

Inventory was also fluctuated in every year. In 2011 and 2013 high amount of product were stored rather than sale.

3.1.6 Account receivable Accounts receivable is a legally enforceable claim for payment from a business to its customer/clients for goods supplied and/or services rendered in execution of the

Taka in Core

customer's order.

Account Receivable 600000000 500000000 400000000 300000000 200000000 100000000 0

Account Receivable 186914162

539813481

285601036

361997873

Account receivable was also fluctuated in every year. Company can able to collect some money in 2010 and 2012 but in 2011 and 2013, company can unable to collect money so account receivable stay huge.

3.1.7

Retain Earning Retained earnings refer to the portion of net income of a corporation that is retained by the corporation rather than distributed to shareholders as dividends. Similarly, if the corporation incurs a loss, then that loss reduces the corporation's retained earnings balance. If the balance of the retained earnings account is negative it may be called retained losses, accumulated losses or accumulated deficit, or similar terminology. Retained earnings and losses are cumulative from year to year.

Taka in Core

Retain Rarning 0 -20000000 -40000000 -60000000 -80000000 -1E+08 -1.2E+08 Retain Rarning

201 3 -95545120

201 2 -96910652

201 1 -100718448

201 0 -33174244

Every years retain earning is in minus figure. 3.1.8

Fixed Asset Fixed assets, also known as "tangible assets" [1] or property, plant, and equipment (PP&E), is a term used in accounting for assets and property that cannot easily be converted into cash. This can be compared with current assets such as cash or bank accounts, which are described as liquid assets. In most cases,

only

tangible

assets

are

referred

to

as

fixed.

IAS 16 (International Accounting Standard) defines Fixed Assets as assets whose future economic benefit is probable to flow into the entity, whose cost can be measured reliably.

Fixed Asset 10000000

Taka in Core

9000000 8000000 7000000 6000000 5000000 4000000 3000000 2000000 1000000 0 Fixed Asset 7478611

6902890

9058646

5750453

Fixed asset also fluctuated in every year. Company can able to hold huge fixed asset in 2012. 3.2 Ratio analysis Current Ratios The Current Ratio is one of the best known measures of financial strength. It is figured as shown below: Current Ratio =

Total Current Assets Total Current Liabilities

The main question this ratio addresses is: "Does your business have enough current assets to meet the payment schedule of its current debts with a margin of safety for possible losses in current assets, such as inventory shrinkage or collectable accounts?" In Transcom:

Current Ratio Ratio in Time

3.2.1

1 0.98 0.96 0.94 0.92 0.9 0.88 0.86 0.84

Current Ratio 0.917914332

0.981250145

0.954649778

0.8975598

In every year TML can’t able to pay there all current liability by there current asset. 3.2.2

Quick Ratios The Quick Ratio is sometimes called the "acid-test" ratio and is one of the best measures of liquidity. It is figured as shown below: Quick Ratio =

Cash + Government Securities + Receivables Total Current Liabilities

The Quick Ratio is a much more exacting measure than the Current Ratio. By excluding inventories, it concentrates on the really liquid assets, with value that is fairly certain. It helps answer the question: "If all sales revenues should disappear, could my business meet its current obligations with the readily convertible `quick' funds on hand?" In Transcom: Years Ration

2013 0.528957283

2012 0.540442406

2011 0.360626257

2010 0.492728229

After excluding inventory from current asset, company is highly unable to pay there current liability by there current asset.

3.2.3 Working Capital Working Capital is more a measure of cash flow than a ratio. The result of this calculation must be a positive number. It is calculated as shown below: Working Capital = Total Current Assets - Total Current Liabilities Bankers look at Net Working Capital over time to determine a company's ability to weather financial crises. Loans are often tied to minimum working capital requirements. Years

2013

2012

2011

2010

Ratio

-21227707

-24921627

-97276276

-31690909

In every year, company’s working capital is in minus figure. Because total liability is bigger than the total current asset. 3.2.4

Gross Margin Ratio This ratio is the percentage of sales dollars left after subtracting the cost of goods sold from net sales. It measures the percentage of sales dollars remaining (after obtaining or manufacturing the goods sold) available to pay the overhead expenses of the company. Comparison of your business ratios to those of similar businesses will reveal the relative strengths or weaknesses in your business. The Gross Margin Ratio is calculated as follows: Gross Margin Ratio =

Gross Profit Net Sales

(Gross Profit = Net Sales - Cost of Goods Sold) Years

2013

2012

2011

2010

Ration

6.180711%

6.194377%

6.185997%

1.14876%

In 2011, 2012, 2013 gross profit is satisfied. It is near about 6%.

3.2.5

Net Profit Margin Ratio This ratio is the percentage of sales dollars left after subtracting the Cost of Goods sold and all expenses, except income taxes. It provides a good opportunity to compare your company's "return on sales" with the performance of other companies in your industry. It is calculated before income tax because tax rates and tax liabilities vary from company to company for a wide variety of reasons, making comparisons after taxes much more difficult. The Net Profit Margin Ratio is calculated as follows: Net Profit Margin Ratio =

Net Profit Before Tax Net Sales

Years

2013

2012

2011

2010

Ratio

0.037798%

0.177661%

-4.11307%

-6.4036%

Gross profit was satisfied in 2011, 2012, and 2013. But net profit was not satisfied. In 2012 and 2013, profit was below then 1%, and in 2010 and 2011, company was in loss. 3.2.6

Inventory Turnover Ratio This ratio reveals how well inventory is being managed. It is important because the more times inventory can be turned in a given operating cycle, the greater the profit. The Inventory Turnover Ratio is calculated as follows: Inventory Turnover Ratio =

Net Sales Average Inventory at Cost

Years

2013

2012

2011

2010

Ratio

7.28985305

11.6044020

3.20626853

4.7082477

Inventory turnover ratio is satisfied in 2012 and 2013. In 2010 and 2011, the ratio was little bet short.

3.2.7

Return on Assets This measures how efficiently profits are being generated from the assets employed in the business when compared with the ratios of firms in a similar business. A low ratio in comparison with industry averages indicates an inefficient use of business assets. The Return on Assets Ratio is calculated as follows: Net Profit Before

Return on Assets =

Tax Total Assets

Years

2013

2012

2011

2010

Ratio

0.122122%

0.712736%

-7.86429%

-9.14151%

In 2012 and 2013, return of asset was in below then 1% and in 2010 and 2011, return on asset is in below then 0. 3.2.8

Return on Equity Return on equity, commonly referred to as ROE, is another measurement of management performance. ROE tells the investor how well a company has used the capital from its shareholders to generate profits. Similar to the ROA ratio, a higher ROE denotes a higher level of management performance. Measures the income earned on the shareholder's investment in the business. Net

Return on Equity=

Income Equit y

Years

2013

2012

2011

2010

Ratio

13.6553%

38.0779%

-675.442%

-331.742%

Return on equity was satisfied in 2012 and 2013. In 2010 and 2011, it was highly dissatisfied. Because there were huge amount of minus % in those year.

3.2.9

Cash Turnover Measures how effective a company is utilizing its cash. Net

Cash Turnover =

Sales Cas h

Years

2013

2012

2011

2010

Ratio

61.1836982

188.1383295

-83.997195

156.3238607

In 2010, 2012 and 2013, cash turnover ratio was highly satisfied. But in 2011, it is in minus figure. 3.2.10 Fixed Asset Turnover The Fixed Asset Turnover ratio measures the effectiveness in generating Net Sales revenue from investments in Net Property, Plant, and Equipment back into the company evaluates only the investments. Measures the activity of the assets and the ability of the business to generate sales through the use of the assets. Fixed Asset Turnover=

Net Sales Total fixed asset

Years

2013

2012

2011

2010

Ratio

498.3817483

222.4402847

250.4160902

60.8285812

Fixed asset ratio was highly satisfied in every year. In 2011, 2012 and 2013 the sales were 250 times more than the fixed asset. 3.2.11 Total Asset Turnover The Total Asset Turnover is similar to fixed asset turnover since both measures a company's effectiveness in generating sales revenue from investments back into the company. Total Asset Turnover evaluates the efficiency of managing all of the company's assets.

Measures the capacity utilization and the quality of fixed assets. Net Sales Total Asset Turnover= Net Fixed Assets

Total Asset Turnover Ratio in Time

4.5 4 3.5 3 2.5 2 1.5 1 0.5 0 Total Asset Turnover 1.427558706

3.230912149

4.011764472

1.912025183

Total asset turnover ratio is satisfied. 3.2.12 Total debt to Total Asset Provides information about the company's ability to absorb asset reductions arising from losses without jeopardizing the interest of creditors. Total debt to Total Asset =

Total debt Total Asse

t

Total debt to Total Asset Ratio in Time

1.1 8 1.1 6 1.1 4 1.1 2 1.1 1.0 8 1.0 6 1.0 4 1.0 2 1 Total debt to Total Asset 1.063859

I

1.07650428

1.1626776

1.1056251

n every year Total debt to Total asset ratio is also satisfied. Company can able to fulfill there all debt by there total asset.

3.3 Findings I. II.

Huge mistakes in document Account receivable is very high

III.

Profit is very low

IV.

Misuse of manpower

V.

Inventory remain in huge amount

VI.

Monitor of work is not sufficient

VII. VIII. IX. X.

Unwillingness in providing information Planning is not changed for match with situation No information about competitor Poor decorated web site

CHAPTER 4 Recommendations and Conclusions

4.1 Recommendation



The company should offer more facilities to the customers



Need to develop marketing strategy



The document need to prepare properly and correctly



The business strategy need to changed as present business environment



Need to acquire proper information about competitor



Company need to increase profit as like as sales



Need to improve web site

4.2 Conclusions In today’s world academic education does not make a student professional to face the current challenges within the outside world, therefore, internship is highly recommended to gain idea, knowledge and experience. It gives real experience to the student to the working world. It is really a good experience for me to take part in internship program in Transcom Mobile Ltd. This field experience helped me in my career development. I will try my best to fulfill the requirements of internship.

BIBLIOGRAPHY

1. http://www.transcombd.com/ 2. Financial document collect directly