Main Body

Chapter 1
Introduction
1.1 Background of the Study
Internship is the part of the graduate degree in business Accounts and Administration
department of the Atish Dipankar University of Science & Technology. Internship has
merged the theoretical and practical knowledge which is important in our future life.
For developing the practical knowledge, I want to do internship. As our educational
system predominantly text based, inclusion practical orientation program, as an
academic component is an exception to the norm. As the parties; educational
institution and the organization substantially benefit from such a program. The
process establishes networking contracts, which may help student to get a job, which
means students can train and prepare them for the job market. Internship experience
gives professional experience which practical orientation provides positive
development in professional arena. In such a state of the affairs I join in Anwar
Polymer Industries Ltd. under the guidance of my supervisor Sazzad Yousuf, Dept. of
Accounting. My experience involved with the overall accounts related work on Anwar
Polymer Industries Ltd.
1.2 Rationale of the Study

To analyze financial performance of any company is a vital task for their development
and growth in market position. So, the financial report analysis take a major part of
the organization. I have completed my three months intern program on the relevant
topic in Anwar Polymer Ind. Ltd. where there I have analyze their financial
performances on the basis of their annual report which brings me a lot of knowledge
on the area of performance analysis. This report has contained performance analysis
of the company of three years where I have included the ratio analysis, trend analysis
and such. Thus, the intern report has carried out a positive outcome of my study.
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1.3 Objective of the Study
General Objectives:
To understand the financial performance of Anwar Polymer Ind. Ltd.
Specific Objectives:
To analyze financial statement of Anwar Polymer Industries Ltd.
To focus in which basis they evaluate their officials performance.
To focus on their market evaluation on the basis of their performance
1.4 Metho0dology
Methodology is the most important component in any study proposal since it explains
the procedures and methods through which a particular study will be carried out. This
includes discussion on data requirements, sample collection, data analysis and
limitations etc. I have used both primary and secondary data for preparing this report.
But most of the data are collected from primary source. I observed various activities
of Anwar Polymer Industries Limited. My practical experience in Anwar Polymer
Industries Limited was a great source of information.
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1.4.1 Data Collection
In order to make the report more meaningful and presentable, two sources of data and
information are used widely. The following information was collected from the
Primary and secondary sources.
1.4.1.1 Primary Sources
Conversations with the different officials of Anowar Polymer Industries

Limited
Focus group discussion.
Take expert opinion from the officers.
Direct communication with the client.
Informal Discussion.
1.4.1.2 Secondary Sources

Annual report of Anwar Polymer Industries Limited
Different textbooks and journals.
Various reports and articles related to study.
Some of my course elements as related to this report.
Web base support from the internet and intranet.
1.4.2 Instruments Used for Analysis

Quantitative data were collected and analyzed according to acceptable standards of
practice. Different tables and graphs are used to make data more meaningful and
comparable. Qualitative data are analyzed rationally. Important percentages and
averages are calculated. I have used three major tools to analyze the financial
performance of Anowar Polymer Industries Limited This are-
Ratio analysis
Trend analysis
Common size statement analysis
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Ratio Analysis
Ratio analysis is a widely used tool of financial analysis. The term ratio refers to the
numerical and quantitative relationship between two variables. It is defined as the
systematic use of ratio to interpret the financial statements so that the strengths and
weaknesses of the company as well as its historical performance and current financial
condition can be determined. Ratio can be classified into four broad groups-
1) Liquidity Ratios
2) Activity Ratios
3) Debt Ratios
4) Profitability Ratios
Trend Analysis
It is really important to analyze trends in ratios as well as their absolute levels. This
analysis informs us whether a companys financial condition improving or
deteriorating.
Other Tools
After collecting all the data they are coded and data are processed, analyzed, and
graphically represented using MS excel and MS word.
1.5 Limitation of the Study

Lack of time
Lack of time one of the major limitation of the study was limited time. The nine
allocation of the study was inadequate. Because in this short time one inter student
had to both attend the office and also do the survey. For the scarcity of time I could
not communicate largely with concern persons and authority, which would be very
helpful for preparing, the report could be made much more comprehensive.
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Administrative secrecy
Another major problem every private company maintains some secrecy of its all
financial activities. The authority kept much information as secrete.
Unwilling to response
While communicating with responsive persons most of this was very busy in their
daily work at that time. So they were not eager to answer my question and should me
many causes to avoid me.
Lack of adequate information

There were lacks of necessary information what I was needed. That is primary and
secondary data.
1.5 Limitations
Time frame of this report was very limited. It was really tough to know details
about a giant company like-Anowar Polymer Industries Limited within a short
span of time.
Sometimes I could not communicate with the respective personnel of Anowar
Polymer Industries Limited properly as they are very busy.
Because of Strategic and comparative position of the company, it could not
disclose the confidential information which might make the report more
worthy.
As I am not that much experienced to analyze financial performance of a giant
company, there might have some short comings. But I tried sincerely to submit
a significant report.
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Chapter 2
Company Overview
2.1 Industry profiles

Plastics In the modern meaning of the word are synthetic materials that are capable of
being formed into usable products by heating, Milling, molding and similar processes.
The term is derived from the Greek plastic to form in simplest terms: plastics can be
described as resins in their molded. The wonders of plastics cut across all sectors of
society. It is a material of choice due to its versatility. Its physical strength, its
economic viability: it's easy process ability and also its attractiveness and durability of
all weather conditions.
2.2 APIL Global:

With the globalization of Bangladeshi economy are entering into homes and tiniest
villages and communications demand for the materials for suitable functional use
more economic packing durable all weather products has meant increasing demand
for polymer pla-Packing of cement bags the end user is demanding plastics instead of
conventional jute because it prevents transits lose and wastages. The agriculturists of
rural insist on plastic pipes for irrigation to their farms. The floriculturists of cities
cannot thrive without ultraviolet stabilized polythene wide width house for huge
tunnels and green polymers consumption and import.
The Plastic industry in Bangladesh has made significant achievements ever since it
made a modest but promising start by commencing production of polystyrene in. The
potential market has motivated Bangladesh entrepreneurs to acquire technical
expertise. Achieve high quality standards and build capacities in various facts of the
booming polymer plastic industry. Phenomenal development in the plastic machinery
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sector coupled with matching development in petrochemical sectors both of which
supports the plastic processing sectors have facilitated the plastic processors to build
capacities to service both the domestic market and overseas.
The economic reforms launched in Bangladesh since 1991. Joint ventures, foreign
investments, easier across to technology from developed countries etc have opened up
new vistas to further Bangladeshi plastic industry are exported to over ISO countries
round the globe with major trading partners being USA.UAE. Italy. UK. Russia.
Honkong. Germany etc. The plastic processing sector comprises of units involved in
producing a variety of items through injections molding, blow molding, extrusion and
calendaring. The capacities built in most of this industry coupled with inherent
capabilities have made us capable of servicing the overseas markets. The development
of plastics took place in 1920's with the introduction of cellulose acetate,
polyvinylchloride and nylon.
2.3 Background of the company;

Anwar Polymer Industries Limited known as (APIL) established in 2011, registered
privet limited company, Incorporate as a privet limited company. Business type
Manufacturing & Marketing. Started production in 2013. Factory located Dhaka
Shylhet High way N 2 Road. South Shilmandhi - Pacdona - Narshindi Sadar -
Bangladesh.
Now becoming the leading PVC pipe fitting manufacture in Bangladesh. Growth
beginning as the key strategy to take on the challenge of globalization. APIL set up a
core team and
applied core ISO certification. APIL is the market leader in just outside in Dhaka. The
market challenging in Dhaka city. It is a multi-core. Multi-Product Company which
has been deeply involved in the manufacture, distribution, sale, installation and
servicing to bring the customer satisfaction and social responsibilities.
APIL are a turnover of 10 corers per annum and with manpower strength of 300
employees including 50 high caliber professionals. It has 20% growth due to the
young and dynamic MD's expansions and growth plans. The company increased its
production capacity over 21% in just two years incurring huge additional investments.
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Presently it is enjoying the benefits. At the end of current half year a growth rate of
20% when compared with the last year is witnessed.
The company's operations include manufacturing of PVC fittings and allied products
in clearly defined core business areas at home and overseas. The APIL is the single
largest plastic industry in private sector over the years.
APIL has steadily developed in to a professionally managed company comprising of 3

manufacturing unit in 7 production centers with a total installed capacity of 2250
meter per annum- Divisions and effective centralize support services wholly dedicated
to the most existing standards of quality and customer services constantly motivated
by the need to ensure total product satisfaction.
2.4 APIL at a glance

APIL has a glorious business heritage, a glittering present and a sparkling future.
Established during the one year by Mr. Anwar Hossain, when he started his business
career with the Manufacturing & Marketing, it remains a family owned business. Its
inception its mission has been very clear "Serve water projects, construction activities
and agriculture on global level to ensure customer satisfaction".
As one year passed over the management responsibility to the next, it provided the
wisdom and experience achieved during its own era. This knowledge was rightly used
by each new generation to make their mark and take the new heights. Overtime it
grew to becoming an industrial giant of the country and succeeding in creating a
national & international network that comprises of many subsidiaries and affiliates.
Presently, the company is chaired by Saieda Begum who enjoys a very high reputation
in the society and has also served the nation as a legislator. APIL taking pride in the
success of company that includes composite building materials, real estate, home
decor, engineering and trading.
2.5 Mission:
Serve polymer projects, construction activities and agriculture on global level to
ensure customer satisfaction.
2.6 Vision
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"Our Vision is to maintain the hegemony as the most reliable provider of high quality
PVC products to meet the diverse requirements of potable poly distribution, domestic
plumbing, bore wells and lift irrigation purposes. We ami to make each of our
products a paragon of quality and technical excellence. Through our constant
Endeavour's of research and innovation we strive to come up with new products that
help architects and builders keep ahead of the times"
2.7 Quality policy:

S To manufacture and market goods which comply with the consumers requirements.
S To achieve customer satisfaction is the basic philosophy of the organization.
In the last one decade. APII/s growth was nice to emerge as a leader in the PVC
fittings and to diversify in to the manufacture of suction drainage fittings and PVC
pipe.
2.8 APIL Contribution:

APIL product constitutes plumbing equipment materials such as PVC pipes, fittings,
S.W.R fittings and PVC adhesive. APIL fitting is leading names fittings over all the
states. APIL PVC pipe fittings are manufactured from the finest grade PVC resin
trusted and acclaimed all over the-country for quality. Due to high tensile strength and
reliability used in industry homes etc.
APIL fittings are available in above 10 shapes and measures vary from 20mm to
200mm. These are also available in 3 different colors. Injection modulated APIL PVC
pipe fittings confirm to ISI specification and assure totally safe. Non-toxic water for
all purposes.
2.9 Organizational Outlook

Chairman:- Saieda Begum
Managing Director: - Md. Anwar Hossain
Director: - Md. Sarowar Hossain
Asst. General Manager (A.G.M):- Tapan Kumar Sarker
Human Resource Manager: - Mr. Sazzad Yousuf
Establish in: - 2011
Main Production: - Main production PVC pipe fittings and adhesives
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2.10 APIL-Products:
The company concentrates on the manufacturing of a wide range of PVC pipes and
fittings and allied products. Their products are basically categorized as are high
quality and meet many international standards, as below details of the products & its
standards.
Anwar uPVC pipes & Fittings: According to the German Standards DIN / ISO,
American Standard ASTM & British Standards BS, for the application of Drin, Waste
& Vent (DWV), High pressure Water Supply line, Industrial use and many more
application.
Anwar PPR Pipes & Fittings: Know as APIL Thermo (Green pipes Fittings)
produce according to the German Standards DIN, application of hot and cold water
supply line with high pressure, Excellent anti-aging properties, service life time over
50 years under the German Standards DIN.
Anwar cPVC Pipes & Fitting: Produce acceding to the American standards ASTM
F, cPVC (Chlorinated Polyvinyl Choloride) this is thermo plastic piping material
which can be used for Higher temperature and pressure.
Anwar House ware Products: Anwar Produce High quality house hold products
with 100%
Anwar PET Form: Anwar Produce PET forms 20 grams & 30 grams with DIN
28 mm.
Anwar Closing Cap: Anwar Closing Cap DIN 28 mm. can fit with pet bottle.
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Anwar PET Bottle: Anwar PET Bottle from 60 ml. - 5000 ml. For use of Drinking
water, Energy Drink, Cooking oil & Pharmaceutical Industries & many others use.
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2.11 Strategies Followed by the company;
Organizational Structure
The APIL follows absolute dedicated approach. The organization of its manufacturing
operations is based on product in to group of products in which are similar in
technology or manufacturing process. Each group is constituted by divisions or profit
centres. Each of these groups is led by absolute manager. A central Director leads the
corporate function. Some of these functions in turn are reported to the managing
director.
2.12 Duties and Responsibilities of Departmental Heads

i. Finance Manager
He is responsible for financial matters in the organization. He prepares financial plan.
He assesses the financial needs of the organization and sources of the finance. He
should be an expert in the field of financial management. He should know different
tools used in the financial management ratio analysis, fund flow analysis, cash flow
analysis, Budgeting etc. All these are necessary to prepare a sound financial policy for
the organization. He is also responsible for financial planning, raising necessary fund,
controlling the use of funds, appropriation of profits etc. Other functions include
financial forecasting and planning, procurement of funds, investment decision,
management of income, management of cash, deciding upon borrowing policy,
negotiations for new financing, analysis and appraisal of financial performance,
advising the top management, co-coordinating and control, helping in valuation
decisions and tax administration.
ii. Accounts Manager

He is responsible for keeping the details of day book, ledger and P.F registers.
Moreover, he should record and maintain all the details of the sales tax calculation
and related documents and produce them on demand.
iii. Marketing Manager
He is charge of the marketing department of the organization. The marketing
department aims to increase the turnover of the organization, market share, and
portability of the organization. The marketing manager should be tactful. He should
know marketing concepts product mix, promotion mix, price mix, distribution mix
etc. He should be known the strength and weakness of the firm's products. He is also
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able to design and implement market strategies to enhance turn over and capture new
markets.
iv. Human Resource Manager

A human resource manager occupies a very important position in an organization. The
duty of the human resource manager is to recruit and develop Personnel required by
the organization. They are involved in manpower planning, training, maintenance,
compensation etc. The other responsibilities of the human resource manager are
formulation and development of personnel policies, employees training and
development, transfer, promotion etc. maintaining personnel records of each
employee in the organization establishment of good relation with employees, effective
communication of the personnel policies and programmers of the management to
employees responsible for advising line manager responsible for welfare activities and
responsible for solving the problem of employees.
v. Production Manager
He is responsible for the production of goods services in the organization. He looks
after the purchasing function and manages the production design and process. He is
called in different names such as production engineer, plant engineer, operation
engineer etc. They are responsible for plant layout, inventory management, production
control and quality control.
vi. Purchase Manager

Duties and responsibilities of the purchase manager are:
Prepare purchase budget.
Receive purchase requisition and ascertain the material requirements.
Ascertain the sources of supply.
Invite tenders from the approved suppliers.
Select the supplier offering the best terms and conditions.
Issue purchase order to the supplier selected.
Follow-up the purchase order to avoid any delay in delivery.
Receive goods received note and the inspection report.
Return the material which are not according to specifications or secure
adjustment with the supplier.
Verify the invoice with regard to quality, price and other relevant particulars
and pass it for payments
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Chapter 3
Literature Review
3.1 Financial Performance Analysis System
The term Financial Performance Analysis System ' refers to an accounting system
followed to accumulate Financial Performance Analysiss, to ascertain Financial
Performance Analysiss of products or jobs, to prepare Financial Performance Analysis
information using some procedures and principles for recording of Financial
Performance Analysis data. Since there are two basic methods of Financial
Performance Analysising - Job Financial Performance Analysising and Process
Financial Performance Analysising, to ascertain Financial Performance Analysiss, the
Financial Performance Analysising system followed by business enterprises are also
divided into two categories:
Job Order Financial Performance Analysising System
Process Order Financial Performance Analysising System
It should be understood that within these two Financial Performance Analysising
systems, further, business enterprises may follow different techniques of Financial
Performance Analysising such as historical Financial Performance Analysis, standard
Financial Performance Analysis, full Financial Performance Analysis, marginal
Financial Performance Analysis etc.
3.2 Installation of a Financial Performance Analysis System

A Financial Performance Analysis System is a system that accumulates Financial
Performance Analysiss, assigns them to Financial Performance Analysis objects, i.e.
products, jobs, processes, etc, and reports Financial Performance Analysis
information. In addition to this, a proper Financial Performance Analysis System
assists management in the planning and control of business operations, in analyzing
product profitability, and in accomplishing business objectives through optimum
utilization of available resources. The underlying principles, procedures and objects of
all Financial Performance Analysising system are the same, but the application of
these principles and methods may vary with the circumstances. Basically, two main
questions are involved in installing a Financial Performance Analysis System:
Factors influencing Financial Performance Analysis System, and
Features of Financial Performance Analysis Systems.
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3.2.1Factors influencing Financial Performance Analysis System
The following factors should be considered before designing the Financial
Performance Analysis System:
Size of the firm:
The complexity and outline of the Financial Performance Analysis System
depends on the size of the business enterprise and management requirements. As
size of the firm and business grows, management requirements for Financial
Performance Analysis data and information increase. A large firm has to develop a
large volume of Financial Performance Analysis data regarding the activities of
various departments of the business enterprises.
Manufacturing process or methods:
The manufacturing process includes production layout and arrangement,
production scheduling, production control methods, plant and equipment
capacities, inspection and testing of materials, degree of complexity in the
production procedure and factory layout of the particular business firm for which
it is designed. Methods of wage payment (pie.2-rate, time-rate, incentive
schemes), methods of collecting hours worked, inventory system, overhead
recovery, and other problems related with factory are the factors vital in designing
a Financial Performance Analysis System.
Nature and number of products:
If a single product is manufactured, all Financial Performance Analysiss of direct
material, direct labor and other factory expenses can be directly allocated to that
product. But in the case of more than one product being produced, some Financial
Performance Analysiss of production relating to two or more products are to be
equitably apportioned among them. In this situation, the process of developing
Financial Performance Analysis data is more complex, which, in turn, influences
the designing of the Financial Performance Analysis system.
Management control needs:

The designing of Financial Performance Analysis System in a business firm is
guided by the management control requirement. The Financial Performance
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Analysising system should supply data to persons at different levels in the
organization to take suitable action in their respective areas.
Raw materials:
The nature of raw materials and the degree of waste therein influences the
designing of the Financial Performance Analysis System in a manufacturing
concern. There are some materials, which have a high degree of spoilage. The
issuing of materials, methods of pricing and control over spoilage are accordingly
adopted as to suit the specific type of materials.
Staff efficiency:
The working and formulation of the Financial Performance Analysis System
depends, to a great extent, on the efficiency of personnel and staff engaged in it.
Comparability
A business enterprise follows Financial Performance Analysis Systems prevailing
in other business firms within the same industry. This is necessary to facilitate
comparison of its own Financial Performance Analysis data with data produced
for the industry.
Organizational structure
The Financial Performance Analysis System must correspond to the
organizational division or authority so that individual foremen, supervisors,
department heads, or executives can be held accountable for the Financial
Performance Analysiss incurred in their respective departments.
External factors
The adoption of a Financial Performance Analysising system depends mainly on
internal factors and situations within the firm. However, external factors may
influence scope of the Financial Performance Analysising system to be applied by
a business firm. For example, Financial Performance Analysis Accounting Rules
are applicable to manufacturing companies in Bangladesh, which require certain
Financial Performance Analysis information to be developed and submitted to
government authorities.
3.2.2 Features of Financial Performance Analysis System
All types of business organizations-manufacturing and non-manufacturing may
use the Financial Performance Analysis System. The Financial Performance
Analysis System should be practical, i.e., it must be helpful to the business. There
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must be no attempt to make the business suits the system. The following are the
essential features of a Financial Performance Analysis System:
Basis for accumulating Financial Performance Analysiss
A fundamental feature of any system is the method of accumulating
manufacturing Financial Performance Analysiss. Financial Performance Analysiss
may be accumulated by individual jobs (job order Financial Performance Analysis
system) or by manufacturing departments or processes (process Financial
Performance Analysis system). A job order Financial Performance Analysis
system has the unique feature of accumulating manufacturing Financial
Performance Analysiss separately for each batch or job. Within a process
Financial Performance Analysis system, process or department accumulates
Financial Performance Analysiss. Financial Performance Analysis of production
reports are prepared for each process in the factory. A process Financial
Performance Analysis system is best suited for standard products that are
manufactured continuously for mass production.
Relationship with financial accounting

Most Financial Performance Analysis Systems are complementary/ supplementary
in their relation to financial accounting. In this role, Financial Performance
Analysis Systems imply physical inventory counts to determine quantities of
materials, work-in-process and finished goods. Inventory quantities must be
counted and unit Financial Performance Analysis determined before periodic
financial statements can be prepared. An integrated system removes the need of
coordination between financial accounting and Financial Performance Analysis
accounting. Integrated systems are comparatively more sophisticated, more
Financial Performance Analysisly and more conductive to Financial Performance
Analysis control than supplemental system.
Basis of product Financial Performance Analysiss:

In many Financial Performance Analysis Systems, Financial Performance
Analysis estimates are desirable in addition to actual or historical Financial
Performance Analysiss. Actual Financial Performance Analysiss incurred for a
period are used to compute product Financial Performance Analysiss. A system
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using actual material Financial Performance Analysis, actual labor Financial
Performance Analysis and estimated overhead rate is called a normal Financial
Performance Analysis system. In contrast, standard Financial Performance
Analysiss may be developed for the purpose of product Financial Performance
Analysising. Standard Financial Performance Analysiss are carefully
predetermined estimates of what material, labor and overhead Financial
Performance Analysiss should be on per unit basis, given product specifications
and desired operating efficiency.
Full (absorption) Financial Performance Analysising or marginal (variable)

Financial Performance Analysising:
Another important question relating to the Financial Performance Analysis System
is whether all manufacturing Financial Performance Analysiss are to be
accumulated and attached to products. The traditional opinion is that all
manufacturing Financial Performance Analysiss - variable and fixed - should be
charged to products. This method is known as full Financial Performance
Analysising or absorption Financial Performance Analysising, because fixed
manufacturing Financial Performance Analysiss, are absorbed by units produced.
An alternative viewpoint is that only variable manufacturing Financial
Performance Analysiss should be attached to products. In this method, fixed
manufacturing Financial Performance Analysiss are recorded as expenses of the
accounting period.
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3.3 Characteristics of a good Financial Performance Analysis System
An ideal system of Financial Performance Analysis accounting is that which achieves
the objectives of a Financial Performance Analysising system and brings all
advantages of Financial Performance Analysis accounting to the business.
An ideal Financial Performance Analysis System must have the following
characteristics:
The system should be suitable to the manufacturing unit concerned having
regard to the nature of Product, the manufacturing process and the structure of
the control system of the organization.
It should be flexible and capable of adaptation to changing condition.
The system should be basically logical and systematic so that it does not fall
into pieces if one or more Financial Performance Analysising staff leave the
service of the business or are promoted.
Forms to be used for collecting data should be standardized as per as
practically. It should be involved in the minimum clerical work at different
stages.
The system must provide accurate and timely information be helpful to
management for taking decision and suitable action for the purpose of
Financial Performance Analysis control.
Proper internal checking system should be implemented in the system.
Aggregation of Financial Performance Analysis data and reporting should
involve minimum clerical work.
The system should be capable of sending report to all levels of management.
The system should ensure the security of material and control of over material
and labor.
They should identify the Financial Performance Analysis centers properly.
The system is economical.
The duties and responsibilities of Financial Performance Analysis accountant
should be clearly defined. The Financial Performance Analysis accountant
should have access to all relevant works and departments.
3.4 Financial Performance Analysis elements

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Financial Performance Analysis concepts and terms have developed according to the
needs of accountants, economists and engineers. Accountants have defined Financial
Performance Analysiss as exchange price, a forgoing, a sacrifice made to secure
benefit. In financial accounting the forgoing or sacrifice at date of acquisition is
represented by a current or future diminution in cash or other assets. Finally we can
infer from the above discussion that Financial Performance Analysis refers to the
quantity of economic sacrifice made or resources used for manufacturing a product or
rendering a service. Financial Performance Analysis should be modified by such
descriptions as direct, prime, conversation, indirect, fixed, variable, product, and
period, joint, estimated, standard, sunk or out-of-pocket. Each modification implies a
certain attribute which is important in measuring Financial Performance Analysis, and
which may be recorded and accumulated for assigning Financial Performance
Analysis to inventories, preparing financial statements, and planning and controlling
Financial Performance Analysiss.
3.4.1 About Material

Materials are the basic substances that are transformed into finished goods in the
production process. Materials Financial Performance Analysiss can be broken down
into direct and indirect Financial Performance Analysiss; this classification is usually
based on the materials relationship to the finished product.
Accounting for materials in a manufacturing company usually involves two activities:
the purchase of materials (requiring a purchase requisition, purchase order, receiving
report), and the issuance of materials (requiring a materials requisition form).
Materials may be entered into the accounting records under either the periodic or the
perpetual system. The periodic system is relatively simple and does not maintain a
continuous record of the large volume of materials issued. In contrast, under the
perpetual system, the Financial Performance Analysis of materials issued is
determined as the materials are placed in production.
Efficient inventory control keeps Financial Performance Analysiss down and helps
production run smoothly. Control producers commonly used are order cycling. The
min-max method, the two-bin method, the automatic order system, and the ABC plan.
3.4.2 Objective of Material Financial Performance Analysising
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The ultimate objective of material Financial Performance Analysising is to determine
the Financial Performance Analysis of goods sold in order to charge against the sales
revenue. Effective materials management is essential in order to:
Provide the best service to customers,
Produce at maximum efficiency and
Manage inventories at predetermined levels to stabilize investments in
inventories.
Successful materials management requires the development of a highly integrated and

coordinated system involving sales forecasting, purchasing, receiving, storage,
production, shipping, and actual sales.
3.4.3 About Labor

Labor is the physical or mental effort expended in the production of a product. Labor
Financial Performance Analysiss can be broken down into direct and indirect
Financial Performance Analysiss: this classification is usually based on the
employee's relationship to the finished product. Total labor Financial Performance
Analysiss are based on elements other than just gross wages. These additional
Financial Performance Analysiss include -
Bonus payments,
Vacation pay,
Pension Financial Performance Analysiss,
Other fringe benefits, including employer payroll taxes and contributions to
health; life and other insurance.
Some companies have instituted incentive plans as a means of increasing productivity,
minimizing Financial Performance Analysiss, and improving Financial Performance
Analysis control. Before an incentive plan is adopted, all factors, both positive and
negative, should be carefully considered. The accounting for labor in a manufacturing
company generally involves three activities: timekeeping, computation of total
payroll, and allocation of payroll Financial Performance Analysiss. Journal entries to
record the payroll payments and associated liabilities for amounts withheld are made
for each payroll period. The Journal entries required will depend upon the Financial
Performance Analysis accumulation system used by the firm.
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3.4.4 About Overhead
Factory overhead Financial Performance Analysiss may be classified into the
following three categories: variable, fixed, or mixed. The classification of factory
overhead Financial Performance Analysiss is based on their behavior relative to
production; that is, do they vary according to units produced, or remain fixed for wide
ranges of production, or remain fixed for very short ranges of production? The range
within which fixed Financial Performance Analysiss remain constant is called the
relevant range. The wider the relevant range for a Financial Performance Analysis, the
more likely it will be classified as fixed.
Budgeting or estimating factory overhead Financial Performance Analysiss may be

based on past experience, industry trends, or economic forecasts. The predetermined
factory overhead application rate is commonly computed by using one of four levels
of production: theoretical capacity, practical capacity, normal capacity, and expected
capacity.
Factory overhead application rates are computed as a percentage or dollar amount of

some form of production. Any base may be used as long as it relates to factory
overhead Financial Performance Analysis behavior and is relatively simple to apply.
Factory overhead is applied to jobs (job order Financial Performance Analysising) or
departments (process Financial Performance Analysising) at a predetermined rate as
production takes place.
Expenses incurred from operating a service department are allocated by the direct
method, step method, or algebraic method to the appropriate producing departments
as part of factory overhead Financial Performance Analysiss. The direct method
involves allocation of budgeted service department Financial Performance Analysiss
directly to producing departments and ignores any services provided by one service
department to another. Budgeted Financial Performance Analysiss are allocated under
this method using a base relative to the services provided. The step method allocates
budgeted service department Financial Performance Analysiss to other service
departments, as well as to producing departments. However, this method ignores any
reciprocal services between services departments because once a service department's
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Financial Performance Analysiss have been allocated, no other Financial Performance
Analysiss may be allocated back to it. The algebraic method takes into account
reciprocal services and involves simultaneous equations. It is more accurate than
either the direct or step methods but can be somewhat complex; it is most often used
in computerized systems. Each method results in a different predetermined factory
overhead application rate.
3.4.5 Factory overhead application rate

A quantitative measure of a part to the whole is used to allocate factory overhead to
production. The formula for computing the factory overhead application rate is the
same, regardless of the base chosen, as follows:
Factory Overhead Application rate= (Estimated Factory Overhead / Estimated Base

Activity)
3.5 Actual Financial Performance Analysising

The National Association of Accountants defined actual or historical, Financial
Performance Analysiss as "the Financial Performance Analysis which is accumulated
during the process of production by the usual historical Financial Performance
Analysising methods as opposed to the Financial Performance Analysis which has
been determined in advance of the production process. The term actual' is not
intended to convey any implication as to the accuracy with which Financial
Performance Analysiss are measured."
In an actual Financial Performance Analysis system, product Financial Performance
Analysiss are only recorded when they are incurred. This technique is usually
acceptable for the recording of direct materials and direct labor because they can be
easily traced to specific jobs (job order Financial Performance Analysising) or
department (process Financial Performance Analysising). Factory overhead, the
indirect Financial Performance Analysis component of a product, usually cannot be
easily traced to a specific job or department. Since factory overhead is not a direct
Financial Performance Analysis of production, a modification of an actual Financial
Performance Analysis system, called normal Financial Performance Analysising, is
commonly used. Direct materials and direct labor Financial Performance Analysiss
are accumulated as they are incurred; with on exception- factory overhead is applied
26
to production, cm the basis c` actual inputs (hours, unit's, etc.) multiplied by a
predetermined factory overhead application rate. Under standard Financial
Performance Analysising, all Financial Performance Analysiss attached to products
are based on standard or predetermined amounts. Standard Financial Performance
Analysiss represent the "planned" Financial Performance Analysiss of a product and
are generally established well before production begins. The establishment of
standards thus provides management with goals to attain (i.e., planning) and bases for
comparison wit:; actual results (i.e., control). Standard Financial Performance
Analysiss are those expected to be achieved in a particular production process under
normal conditions. Standard Financial Performance Analysising is concerned with
Financial Performance Analysis per unit and serves basical1y the same purpose as a
budget. Budgets, however, quantify managerial expectations in terms of total
Financial Performance Analysiss rather than in terms of per unit Financial
Performance Analysiss. Standard Financial Performance Analysiss do not replace
actual Financial Performance Analysiss in a Financial Performance Analysis
accumulation system. Instead, standard Financial Performance Analysiss and actual
Financial Performance Analysiss are both accumulated.
Table: Comparison of Actual, Normal, and Standard Financial Performance
Analysising
27
Debits to Work-in-process inventory
Actual Financial Performance Normal Standard
Analysising Financial Financial
Performance Performance
Analysising Analysising
Elements of Actual Actual
a product:
Direct Standard
materials
Direct labor Standard
Factory Standard
overhead
Actual Actual
Actual Applied Predetermine Predetermine
d d
Actual Factory Standard Factory
Hours* Overhead Hours* x x Overhead
X
Application Allowed Application
Rate Rate
* Assume hours as a base to apply factory overhead
3.6 Standard Financial Performance Analysising

Standard Financial Performance Analysiss provide management with goals to attain
and bases for comparison with actual results. Standard Financial Performance
Analysising serves basically the same purpose as a budget. However, standard
Financial Performance Analysising is concerned with Financial Performance Analysis
per unit while budgets generally provide Financial Performance Analysis goals on a
total Financial Performance Analysis basis.
Standard Financial Performance Analysiss do not replace actual Financial
Performance Analysiss; they complement each other. According to generally accepted
accounting principles, inventory and Financial Performance Analysis of goods sold
must be shown at actual Financial Performance Analysis. Therefore, management to
determine the efficiency of operation by comparing them with actual Financial
Performance Analysiss uses standard Financial Performance Analysiss.
Financial Performance Analysis information may be used for many purposes. Since
Financial Performance Analysis information that serves one purpose may not be
28
appropriate for another, it is important to define clearly the purpose for which the
information is needed before developing procedures to accumulate Financial
Performance Analysis data. Standard Financial Performance Analysiss may be used
for Financial Performance Analysis control, for inventory Financial Performance
Analysising, for budgetary planning, for product pricing, and for facilitating record
keeping.
Standard Financial Performance Analysiss are also known as "planned Financial
Performance Analysiss," "predicted Financial Performance Analysiss," "Scheduled
Financial Performance Analysiss," and "specification Financial Performance
Analysiss." The setting of standards for direct labor, direct materials, and factory
overhead is an important port of any standard Financial Performance Analysis system.
Direct materials Financial Performance Analysis standards may be divided into price
and efficiency standards. Direct materials price standards are the unit prices at which
direct materials should be purchased. Direct materials efficiency standards are
predetermined specifications of t1he quantity of direct materials that should go into
the production of one finished unit.
Direct labor standards may be, divided into price and efficiency standards. Direct
labor price standards are average predetermined wage rates for a period. Direct labor
efficiency standards are predetermined performance standards in terms of the amount
of direct labor hours that should go into the production of one finished unit. When a
company introduces a new process or product, the learning process will affect the
level of output per hour. As workers become more familiar with the procedure, output
will increase with a resultant direct labor Financial Performance Analysis per unit
decrease. Before determining standards or evaluating present and future Financial
Performance Analysiss, management should compute the learning curve effect on
direct labor Financial Performance Analysis.
The concept of standard setting for factory overhead is similar to standard setting for
direct materials and direct labor. The major difference is that factory overhead
Financial Performance Analysis must be divided into variable and fixed Financial
Performance Analysiss. The budgeted variable and fixed Financial Performance
Analysiss are usually divided by the estimated level of production at normal capacity
to compute the standard factory overhead application rate for the next period. This
rate is used to apply factory overhead Financial Performance Analysiss to production.
29
An integral part of establishing standards is the development of policies and
objectives in relation to product quality. Product quality depends on the interaction of
quality of design, quality of conformance to design, and quality of performance. Zero
defects are a program designed to eliminate defects and thereby improve product
quality.
3.7 Direct and Absorption Financial Performance Analysising

Direct Financial Performance Analysising has now come of age and is proving to be
an extremely valuable tool in planning and controlling operations in many large
industrial companies. Though still not as widely employed as absorption Financial
Performance Analysising, it is steadily gaining in use. Direct Financial Performance
Analysising product Financial Performance Analysiss include only those
manufacturing Financial Performance Analysiss, which are closely related to the
product and vary with production volume. Under absorption Financial Performance
Analysising all manufacturing Financial Performance Analysiss, direct and indirect,
are included as product Financial Performance Analysiss. The proponents of direct
Financial Performance Analysising maintain that fixed or non-variable Financial
Performance Analysiss, whether in factory overhead or selling or administrative
Financial Performance Analysiss, are period Financial Performance Analysiss related
to time, have no future benefit, and are thus not acceptable as inventory Financial
Performance Analysiss. At present there is disagreement among accountants on the
use of direct Financial Performance Analysising in external reports because of the
exclusion of fixed factory overhead Financial Performance Analysiss from inventories
and its effect on net income. However, there is little doubt among accountants that
direct Financial Performance Analysising is better suited for internal management
purposes in planning, control, and decision-making. A large number of companies
now keep their records for both internal and external reporting needs. The records are
maintained on the direct Financial Performance Analysising basis for management's
daily needs, and at the end of the year when tax returns and formal financial
statements are prepared for regulatory agencies and stockholders, a simple adjustment
is made. The fixed factory overhead Financial Performance Analysiss which were
excluded under direct Financial Performance Analysising are added back to
inventories and Financial Performance Analysis of goods manufactured, and the net
income is adjusted to what it would have been if absorption Financial Performance
30
Analysising had been used. Under absorption Financial Performance Analysising net
income will tend to vary with production because the deferred fixed Financial
Performance Analysiss are included in inventory, whereas under direct Financial
Performance Analysising net income will vary with sales.
3.8 Standard set for different elements of Production

A standard Financial Performance Analysis and quantity is the predetermined
Financial Performance Analysis or quantity of manufacturing a single unit or a
number of product units during a specified period in the immediate future. It is the
planned Financial Performance Analysis or quantity of a product under current and or
anticipated operating conditions - a standard Financial Performance Analysis or
quantity has two components: a standard and a Financial Performance Analysis or
quantity. A standard is like a norm and whatever is considered normal can generally
be accepted as standard.
31
Chapter 4
Data Analysis
Liquidity Ratios
Liquidity ratios measure a firms ability to meet its financial obligations. The
overall health of a firm has traditionally been measured by these ratios. The
usefulness of liquidity ratios is now changing as more companies are holding fewer
current assets to generate revenue. These ratios are still a good measure for this
industry because the discount retail industry does rely on a large amount of current
assets to generate revenue. The meaning of high and low ratios are judged based on
the relevant industry norms.
Current Ratio
Current Ratio = Total Current Assets
Total Current Liabilities
Items in this table represent percentages of total assets.
Account 2013 2014 2015 RMA
Cash & Equivalents 2.88% 3.67% 5.01% 14.3%
Merchandise Inventories 45.11 46.96 46.14 36
Other Current Assets 6.91 4.51 4.12 .8
Total Current Assets 54.9% 55.14% 55.27% 53.60%
Current Maturities of Long-term debt 1.09% .58% .54% 2%
Trade Accounts Payable 14.06 14.18 14.45 17.3
Accrued Payroll & Other Liabilities 9.09 7.85 9.59 7.9
Taxes other than income taxes .97 1.54 1.47 N/A
Total Current Liabilities 25.21% 24.15% 26.06% 33.8%
Current Ratio 2.15 2.28 2.12 1.6
The current ratio is a measure of total current assets to total current liabilities.
This indicates a firms ability to meet its current obligations with cash, inventories or
other liquid current assets. A high ratio usually indicates that a firm is better able to
meet liability obligations.
Interpretation:
Anwar Polymer Industries Ltd. current ratio is 27% above the industry norm.
It appears that APIL is in a better position to meet its obligations than the industry.
The companys common sized statements relative to the industry can explain this
32
relation to the industry. Current assets are 3% greater than the industry; while the
current liabilities are 23% lower than the industry. Thus, the current ratio is greater
than the industry.
A closer look into the elements of the ratio indicates a heavy reliance on inventory,
which is 28% above the industry norm. The company also has in comparison to the
industry low cash balances (64% less). Anwar Polymer Industries Ltd. current assets
are 3% greater than the industry. The most significant feature of current liabilities is
trade accounts payable at 16% less than the industry. In addition, current maturities of
long term debt of accrued payroll are less then the industry in relative common-size
figures. Thus, the current liabilities of APIL are 23% lower than the industry.
Although APIL is carrying significantly less current liabilities it is also carry much
less cash and much more inventory than the industry.
However, Anwar Polymer Industries Ltd. cash management appears to be adequate
even with the stated lower cash balances. In reviewing the cash flow statement, net
cash after operations was a positive tk.2,011M for fiscal year end 2015. APIL had
adequate cash flow coverage to pay their current maturities of long term debt, interest
expense and income tax expense. Anwar Polymer Industries Ltd. net capital
expenditures of tk.1,113M were also covered by cash flow. Anwar Polymer Industries
Ltd. remaining cash balance was tk.710M for the year 2015. However, it is important
to note that net cash flow operations had been on a 52% decline for the three year
period 2012-2014. In addition, APIL has a revolving credit agreement of tk.2.5
billion that provides APIL the continued flexibility in their cash management
practices.
Taking into consideration both common size and cash flow statements it appears that
inventory management may be the primary problem. As seen later in the inventory
ratios, APIL holds above the average norm of inventory resulting in their higher costs
of goods sold. In order to better evaluate Anwar Polymer Industries Ltd. liquidity, the
quick ratio will be reviewed below.
33
Trend:
The current ratio over the last three years has remained stable due to the
stability of the current assets and current liabilities as a percentage of total assets.
Current assets grew 1% while current liabilities grew 2% over the entire period
and thus, the 2014 ratio is somewhat less than the 2012 ratio.
Quick Ratio
Quick Ratio = Cash and Equivalents - Inventory

Total Current Liabilities
Account 2013 2014 2015 RMA

Cash & Equivalents 2.88% 3.67% 5.01% 14.03%
Trade Accounts receivable 0 0 0 2.5
Other Current Assets 6.91 4.51 4.12 .8
Total Current Assets less inventory 9.72% 8.18% 9.13% 17.6%
Current Maturities of Long-term debt 1.09% .58% .54% 2.0%
Trade Accounts Payable 14.06 14.18 14.45 17.3
Accrued Payroll & Other Liabilities 9.09 7.85 9.59 7.9
Taxes other than income taxes .97 1.54 1.47 N/A
Quick Ratio .38 .34 .35 .4
The quick ratio is considered a more accurate measure of a firms ability to meet
its current liabilities. In calculating this ratio, inventory is subtracted from the
34
total current assets because it is the most commonly inflated and least liquid
current asset.
Interpretation:
Anwar Polymer Industries Ltd. quick ratio of .35 relative to the industry ratio
of .4 indicates that the company is reliant on inventory to meet its obligations. Anwar
Polymer Industries Ltd. current assets minus inventory is 9.13% of total assets in
comparison to the industries 17.6%. This reliance upon inventory to meet current
obligation is usually a bad situation. Anwar Polymer Industries Ltd. lower quick ratio
compared to the industry can be further explained by the fact that Anwar Polymer
Industries Ltd. inventory represents 83% of its current assets, which is significantly
higher than the industry average of 67%.
The current liabilities are lower than the industry and have been discussed
previously in the current ratio. While, the current liabilities is only 23% less than the
industry, the current assets minus inventory is 48% is less than the industry.
Consequently, the quick ratio is less than the industry by 12.5%.
Trend:
The quick ratio over the last three years overall has remained stable due to the
stability of the current assets and current liabilities as a percentage of total assets.
However, with a 6% drop in current assets minus inventory and a 2% increase in
current liabilities, the ratio has slightly declined over the three year period. In
addition to liquidity ratios, asset management ratios will highlight the companys
strengths and weaknesses.
Management Ratios
Sales Receivable Ratio
Sales / Receivable = Net Sales
Trade Receivables
This ratio measures the number of times receivables turn over in a year
relative to sales. This determines the time between a sale and actual collection. The
credit terms and quality of receivables can be measured using this ratio relative to the
industry. Another way to view this ratio is in the number of days the receivable
remains on the companys books. This ratio will be discussed with the Days in
Accounts Receivable ratio below.
35
Days Receivable Ratio
Days Receivables = 365
Sales/ Receivables Ratio
Days Receivables ratio tells how many days on average it takes to collect on
sales. If this number is high, it indicates that there are some accounts that are
aging and may never be collected. It may also indicate loose credit policies and
poor collection processes. In some extreme cases, it can reveal poor internal
controls and processes in accounting such as cash collection and reconcilement of
accounts. APIL does not carry any account receivable due to the sale of their
credit card to Beneficial National Bank USA. According to the terms of the sale,
Beneficial retains all credit risk for credit card receivables. Because of Anwar
Polymer Industries Ltd. zero trade receivables these ratios are not relevant to our
analysis other than to note that APIL is atypical of their peers.
36
Inventory Growth
Account 2013 2014 2015 RMA
Inventory percent to total assets 44.48% 46.96% 46.14% 36.00%
Inventory tk.6,354 tk.6,367 tk.6,536 N/A
M M M
Inventory Growth N/A .20% 2.65% N/A
7000
6000
5000
4000
3000
2000
1000
0
1 2 3
Inventory has remained relatively stable for the past three years. However, in
comparison to the industry as seen in the above table, they are holding excessive
inventory. Inventory days on hand (inventory turnover) is approximately 30 days
(4.06x) greater than (less than) the industry average of 61 days (5.0) as seen below.
Cost of Sale Inventory Ratio

Cost of sales / Inventory = Cost of sales
Inventory
Account 2013 2014 2015 RMA

Cost of goods sold 77.58% 78.15% 78.16% 67.60%
Inventory 44.48% 46.96% 46.14% 36.00%
Cost of Sales/Inventory Ratio 3.84 3.95 4.06 5.0
This ratio measures the number of times inventory is turned over during the year
in terms of dollars. High and low turnover relative to the industry could mean
either poor inventory management (high turnover) or poor utilization of related
resources (low turnover).
37
Days Inventory Ratio (INVDOH)
Days Inventory = 365
Cost of Sales/Inventory
Account 2013 2014 2015 RMA
Turnover Ratio 3.84 3.95 4.03 6.0
(INVDOH) 95.09 92.40 90.64 73
Inventory days on hand measures ho
3.84 3.95 4.03
2012 2013 2014 RMA

w long the company
holds inventory before it is sold. Anwar Polymer Industries Ltd. 90.64 days is (18
days longer than the industry) shows a very serious problem that ripples through
the entire company financial statements and operations. This ratio supports
previous evidence that the company is experiencing inventory control and
management problems.
Interpretation:
The cost of sales is 15% higher than the industry average; a significant difference
that could be attributed to a poor distribution system, poor sales management and
ineffective purchasing practices. Inventory is 28% above the industry average
indicating APIL may be experiencing inventory management problems. Since
inventory exceeds the industry by a greater magnitude than cost of sales exceeds
the industry, the cost of sales/inventory ratio is less than the industry and as a
result inventory days on hand is greater than the industry average.
Trend:
38
Inventory days on hand has been declining due to a 7.9% growth in cost of
sales versus a 2.9% growth in inventory over the 2012-2014 period.
Cost of Sales Payables Ratio
Cost of Sales / Payables =
Account 2013 2014 2015 RMA

Cost of Sales 77.58% 78.15% 78.16% 67.60%
Accounts Payables Trade 14.06% 14.18% 14.45% 17.30%
Cost of Sales Payable Turnover Ratio 12.14 13.08 12.86 10.9
This measurement of liquidity measures the number of times account payables

turnover in one year and can provide numerous insights into the operations of a
company including how well they are working with vendors in its supply chain.
A downward trend or a low ratio compared to industry standard may be indicative
of cash flow problems or turmoil between the corporation and its suppliers.
Days Payable Ratio (APDOH)
APDOH = 365
Cost of Sales/Payables
Account 2012 2013 2014 RMA
Cost of Sales 77.58% 78.15% 78.16% 67.60%
Payable Turnover Ratio 12.14 13.08 12.86 18.6
APDOH 30.06 27.91 28.39 33.0
The cost of sales/payable ratio is utilized to derive the number of days payable
which provides a measurement of the length of time between the purchase on account
and the time the account is settled. It is not uncommon for companies to take liberties
with the payment of accounts, stretching the credit terms or riding their trade.
Interpretation:
Cost of sales is trending upwards to 78.16% in 2014 which is 16% above industry
average. As seen in the accounts payable common size percentages, APIL is
holding approximately 16.5% lower on average than the industry standard. Since
the cost of sales is greater than industry average and accounts payables are less
than the industry average; cost of sales/payable ratio for APIL is greater than the
industry and accounts payable days on hand is less than the industry.
39
Trend:
Cost of sales has grown 7.9% over 2012-2014 while accounts payable increased
1.9% over the same period. As a result, the turnover got larger and the days got
smaller over the three year period. Per notes to the 2014 financial statements,
APIL reported higher promotional and occupancy cost as a contributing factor for
the increase in cost of sales. Because APIL is paying their trade payables 4.61
days quicker than the industry APIL is using approximately tk.319 more cash than
they would if they were more in-line with the industry average of 33 days.
Anwar Polymer Industries Ltd. accounts payable days on hand are less than
the industry average. They are paying an average of 14% faster, with an average of
29 days relative to the industries 33 days.
Operating Cycle
Accounts Receivable Days on Hand (ARDOH) + Inventory Days on Hand
(INVDOH)
Cash Conversion Cycle
Accounts Receivable Days on Hand (ARDOH) + Inventory Days on Hand
(INVDOH) Accounts Payable Days on Hand (APDOH)
Elements 2013 2014 2015 RMA
ARDOH 0 0 0 2
INVDOH 95.09 92.40 90.64 73
APDOH 30.06 27.91 28.39 33
Operating Cycle 95.09 92.40 90.64 75
Cash Conversion 65.02 64.49 62.25 42
Cycle
Operating Cycle
The operating cycle is the time to acquire or to manufacture inventory, sell the
product and collect the cash. The operating cycle is usually less than one year for
most industries. As seen in the Anwar Polymer Industries Ltd. operating cycle of
90.64 days and the industry standard of 75 days, the discount retail industry is an
example of a shorter operating cycle.
Interpretation:
Anwar Polymer Industries Ltd. operating cycle is 20.85% longer than the
RMA industry average. The operating cycle for 2014 is 90.64 days in comparison to
the industry of 75 days.
40
Trend:
Inventory days on hand has been declining due to a 7.9% growth in cost of sales
versus a 2.9% growth in inventory over the 2012-2014 period which has caused
the operating cycle days to improve the 4.68% as indicated above. As previously
stated APIL does not retain credit risk on their credit card receivables therefore
ARDOH is zero.
Cash conversion cycle:
The amount of time expressed in number of days required to sell inventory and
collect accounts receivable less the number of days credit is extended by suppliers.
Interpretation:
The cash conversion cycle is 48.21% longer than the RMA industry average.
The cash conversion cycle for 2014 is 62.45 days in comparison to the industry of 42
days.
Trend:
With INVDOH declining at 5% and APDOH also declining at 6% for the
period, the cash conversion cycle has decreased. The operating cycle is, as stated
above is also longer than the industry having a 20.85% impact on the cash conversion
cycle. Anwar Polymer Industries Ltd. accounts payable days on hand are less than the
industry average. They paying an average of 14% faster to pay, with an average of 29
days relative to the industries 33 days. Anwar Polymer Industries Ltd. cash conversion
cycle has improved by 4.45% over the three year period 2012-2014, however still
remaining 20.45 days longer than the industry.
41
Sales / Net Working Capital Ratio
Sales / Working Capital =
Account 2013 2014 2015 RMA

Net Sales tk.31,437 tk.32,193 tk.33,674M See note
M M
Total Current Assets 54.13% 55.14% 55.27% 53.60%
Net Working Capital 28.92% 30.99% 29.21% 19.80%
Sales/Net Working Capital Ratio 7.61 7.66 8.14 12.7
Note: RMA sales data was not input because it was not comparable to APIL which is
one of the top three retailers making up 80% of the discount retail market share.
This ratio provides a measurement of how well working capital, the difference
between current assets and current liabilities, is being utilized within the organization.
In essence this ratio tells us for every dollar of new working capital invested in 2014
tk.8.12 of sales were generates revenues compared to the industry tk.12.40 in sales.
The long- term survival of an organization is partially dependent on how well it
manages current operations. The firm must strategically plan for a targeted range of
current assets and plan for their financing.
Interpretation:
The sales/net working capital ratio has tracked below the industry average for
the past three years. The ratio has increased from 7.61x in 2012 to 8.14x in 2014 in
comparison to 12.7x to the industry. Sales/net working capital ratio is 35.91% lower
than the industry.
Current assets are slightly higher than the industry while current liabilities
were 29% lower than the industry standard. As a result, Anwar Polymer Industries
Ltd. sales to net working capital ratio is less than the industry. This disparity in
current assets and current liabilities relative to the industry could indicate that
financing of current assets may be taking place with long- term liabilities. As a result
of Anwar Polymer Industries Ltd. net working capital is 48% greater than the
industry. This large net working capital is driving the ratio down relative to the RMA
industry average.
42
The working capital of the discount store industry can fluctuate due to seasonal
levels net of trade accounts payable, profitability, and the level of store openings
and closings. APIL ended 2014 with an increase in its number of stores for the
first time in five years. Anwar Polymer Industries Ltd. primary sources of
working capital are cash flows from operations and borrowings under its credit
facilities.
Trend:
Sales increased by 7%, while net working capital only increased by.2% for the 2012-
2014 period, resulting in an increase in the sales/net working capital ratio.
Sales / Net Fixed Assets
Account 2012 2013 2014 RMA
Net Sales tk.31,437M tk.32,183M tk.33,674M See
note
Net Fixed Assets 34.4%/ tk.5,740M 40.2%/ 40.4%/ tk.5,914M 37.5%
tk.5,472M
Net Sales/Net Fixed 5.48 5.88 5.69 8.5
Assets Ratio
35000
30000
25000
20000
15000
10000
5000
0
1 2 3
This ratio shows the effectiveness of the use of fixed assets in a business to produce
sales. There is not a serious distortion in the yearly ratios from year to year, which
represents fixed assets not being largely depreciated or fixed assets are being
replaced/added at the same rate as depreciation. Surprisingly, the intense use of labor
in this form of business has not affected or distorted the ratios from year to year.
When compared to the industry the ratio is considerably low. This may be the result
43
of an over investment of its fixed assets or a large amount of leasehold improvements.
Since leasehold improvements can only be depreciated on a straight-line basis and not
at an accelerated basis. If APIL held a large percentage of leasehold improvements
versus the percentage of buildings, the net fixed assets would be larger than their
peers attributing to the discrepancy in the ratio.
Care must be taken when using this ratio to compare other firms. Inflation
may have caused the values of some of the older assets to be seriously understated.
Older assets may have also been depreciated by a greater amount. The result of such a
comparison is that an older firm who acquired its assets years ago at lower prices may
have a higher turnover ratio of fixed assets. In addition, firms using an accelerated
depreciation versus a straight-line method would have a higher turnover ratio.
Interpretation:
Net fixed assets are 40.4% to total assets while the industry is only 37.5%.
Because of Anwar Polymer Industries Ltd. reliance on net fixed assets relative to the
industry, the net sales/net fixed assets ratio is 33.06% lower than the industry.
APIL leases 95% of all their facilities while the peers in the industry own the
majority of their facilities. It appears that due to this ownership difference, the peers
in the industry are able to depreciate their fixed assets on an accelerated depreciation
method versus the straight-line amortization on leasehold improvements used by
APIL. As a result, Anwar Polymer Industries Ltd. net fixed assets are higher than the
industry as previously stated above. Refer to above Net Fixed Assets/Tangible Net
Worth ratio for further details regarding Net fixed Assets.
Trend:
Sales increased by 7% while net fixed assets increased by 3.9% over the three year
period. As a result, sales/total net fixed assets has increased over the three year
period. Sales increased faster than Anwar Polymer Industries Ltd. net fixed assets is
again indicative of Anwar Polymer Industries Ltd. leasing rather than owning stores.
Net Sales / Total Assets
44
Account 2013 2014 2015 RMA
Net Sales 31,437 32,183 33,674 See
note
Total Assets 14,286 13,558 14,166 See
Note
Net Sales/Total Assets Ratio 2.20 2.37 2.38 2.6
35000
30000
25000
20000
15000
10000
5000
0
1 2 3
Note: RMA sales and assets data was not input because it was not comparable to
APIL which is one of the top three retailers making up 80% of the discount retail
market share.
Again, this ratio is a measure of management's ability to utilize its assets, in
this case all of its assets. It appears that APIL is only able to generate tk.2.38 versus
their industry peers generating tk.2.60 in sales for every tk.1 of assets. Thus, it
appears that APIL is somewhat less efficient. This ratio is slightly lower than the
industry average due to the higher inventory and low cash balances. As stated above
an effort should be made however to increase sales volume to improve the ratio.
Another option for improvement would be to improve its current asset turnover by
improving inventory management, which will improve its total asset turnover, thus
improving the net sales-total asset ratio.
45
Interpretation:
The net sales/total assets ratio is 8.46% less than the industry average.
Trend:
Sales increased by 7% while net total assets decreased by 1% over the three year
period. As a result, sales/total net fixed assets has increased over the three year
period by 8.18%. With the new Big-K format, sales have increased with the
introduction of new lines. In addition, total assets have decreased slightly due to
the other assets listed on the financial statements. The notes to the financial
statements did not include an explanation as to what is comprised in the other
asset accounts, both short-term and long-term.
Coverage Ratios
Coverage ratios measure the ability to service debt from operations.
EBIT / Interest
EBIT/Interest = EBIT____
Interest
Account/Item 2013 2014 2015 RMA
Earnings Before Interest and Taxes 2.49% 2.43% 3.24% 5.5%
Interest 1.44% 1.13% .87% .5%
EBIT/Interest Ratio 1.73 2.15 3.72 12.2
This ratio shows how well a firm is able to meet interest payments. In 2014,
Anwar Polymer Industries Ltd. operating income would cover their interest cost
3.72 times relative to the industry norm of 12.2 times.
Interpretation:
The EBIT/Interest ratio is 3.72x in comparison to the industry average of 12.2x.
Earnings before interest and taxes has tracked below the RMA average for the
three-year period. In 2014, Anwar Polymer Industries Ltd. EBIT was at 3.24%
versus the industry average of 5.5%. In addition, interest has decreased by 39.6%
over the past three years. However, interest expense of .87% for 2014 remains
above the industry standard of .5%. With EBIT significantly below the industry
norm of interest near the norm, the coverage ratio is significantly below the RMA
average of 12.2.
Trend:
46
EBIT increased 30% while interest decreased 39.6% over the 2012-2014 period.
Therefore, TIE increased by 115%. This is further validated by total debt dropping
from 57.5% to 50.5% of total assets.
Total Debt / EBIT

Account 2012 2013 2014 Median Peer
Comparison
Total Liabilities 57.50% 52.68% 50.85% N/A
EBIT 2.49% 2.43% 3.24% N/A
Total Debt/EBIT Ratio 10.49 9.15 6.6 4.3
2500
2000
1500
1000
500
0
1 2 3
Total debt to earning before interest and taxes indicates the amount of debt the
company has it relates to the EBIT (operating income). For example, in 2012, APIL
had tk.10.49 of debt to every one dollar of EBIT, tk.9.15 and tk.6.60 for 2013 and
2014 respectively. In essence in 2014, it took tk.6.60 of debt to generate tk.1 of
operating income. This ratio remains high in comparison to the median peer
comparison.
Anwar Polymer Industries Ltd. improvement by continued reduction of total
liabilities was due to the use of cash from operations to pay down their term debt,
mortgage notes and medium term notes. This reduction of liabilities was offset by the
issuance of Commercial Mortgage Pass Through Certificates (CMBS) mortgage
loans, which are subject to interest and principal payments with a maturity date of
February 2002. Total debt also includes a tk.2.5 billion revolving credit agreement;
however, no outstanding were reported for 2012-2014. However, the revolving credit
agreement allows APIL to carry much lower cash balances than their peers.
Debt Service Coverage Ratio
47
Account 2012 2013 2014
Net Income tk.(189M) tk.298M tk.568M
Depreciation 654 660 671
Amortization 0 0 0
Interest Expense 453 363 293
Total Cash Available for Debt Service tk.913M tk.1,321 tk.1,532
M M
CMLTD tk.156 tk.78 tk.77
TOTAL DEBT Service tk.609M tk.441M tk.370M
Cash After Debt Service tk.304M tk.880M tk.1,902
M
Debt Service Coverage Ratio 1.49 2.99 4.14
Traditional Debt Service: Operating Income + Deprec .+ Amort .+ Interest

Expense Current Maturity Long Term Debt +
Interest Expense
Traditional debt service coverage is the measurement of a companys ability to service

its current maturities of long-term debt and interest owed on that debt. APIL debt
service coverage of 1.49,2.99 and 4.14 for fiscal years ending 96-98 respectively has
improved for the last three years. This increase in the ratio is attributed to the large
growth in net income of 213.08% and 108.03% coupled with the decrease in total debt
service of 16%.
APIL leases 2,051 of their facilities. The terms of the leases are 25 years with
multiple five year renewal options the allows the company to extend the life of the
lease up to 50 years beyond the initial term. The following ratios illustrates the
companies ability to repay their debt taking rental expense or lease expense into
consideration rather than the traditional debt service coverage ratio above.
48
EBITDAR / Interest Expense + Rental Expense
Account 2012 2013 2014
EBIT tk.783M tk.781M tk.1,091M
Depreciation 654 660 671
Amortization 0 0 0
Rent/Lease Expense 442 478 524
EBITDAR tk.1,879M tk.1,919 tk.2,286M
M
Rental/Lease Expense 442 478 524
TOTAL tk.895M tk.841M tk.817M
EBITDAR/(Interest +Rent Expense) 2.10x 2.28x 2.80x
This ratio represents the amount of coverage the company has in order to pay their
interest expense and lease expense. This ratio is adding back non-cash expense of
depreciation and amortization besides the cash expense of rent to calculate total
EBITDAR. The continuing trend is a positive trend due to increased EBIT,
EBITDAR and the decreased in total interest expense. The lower interest expense
is due to the pay down of long term debt, is more than offsetting the increasing
lease expense.
EBITR / Interest Expense + Rental Expense

Account 2013 2014 2015 Median
for
Peers
Net Income tk.783M tk.781M tk.1,091 N/A
M
Rent/Lease Expense 442 478 524 N/A
EBITR tk.1,225 tk.1,259 tk.1,615 N/A
M M M
Interest Expense 453 363 293 N/A
Rental/Lease Expense 442 478 524 N/A
TOTAL tk.895M tk.841M tk.817M N/A
EBITR/Interest +Rent Expense 1.37 1.50 1.98 3.4
This ratio represents the amount of coverage the company has in order to pay their
interest expense and lease expense. This ratio does not add back non-cash
expenses as seen above. This ratio is also a standard industry ratio for discount
retail stores. Although, Anwar Polymer Industries Ltd. ratio is trending towards a
49
positive direction, in comparison to the median for the peers in the industry that
include; Wal-mart, Dayton Hudson, Costco, Shopko and Ames, they are
significantly lower. The median peer EBIT margin is approximately 3.9% versus
Anwar Polymer Industries Ltd. 3.24% margin. The lower ratio in comparison to
their peers is attributed to the lower EBIT margin. The peer analysis of the
expense side of the ratio was not available for comparative purposes for this
analysis.
Leverage Ratios
Leverage ratios measure the extent of the organizations financing with debt. It is a
measurement of the capacity and ability to meet long-term obligations. The leverage
ratios compare the funds supplied by business owners with financing supplied by
creditors. This debt financing involves risk associated with the payment of principal
and interest. However, the firm may earn more on these investments than it pays in
interest that results in the return of the owners capital being favorably leveraged.
Debt financing also has the advantage of not diluting stockholder ownership.
Fixed / Worth
Fixed / Worth = Net fixed assets
Tangible net worth
Account 2013 2014 2015 RMA
Net Fixed Assets 40.18% 40.36% 41.75% 37.50%
Net worth 42.50% 47.32% 49.15% 48.0%
Less Intangible Assets 0 0 0 0
Tangible Net Worth 42.50% 47.32% 49.15% 48%
Fixed Assets/ TNW 0.95 0.85 0.85 0.80
This shows to what extent the company has invested its capital into the fixed
assets of plant and equipment. A smaller ratio shows a relatively small investment
into these fixed assets, providing more liquidity for creditors. A higher number would
indicate a greater risk to these creditors.
Anwar Polymer Industries Ltd. Fixed/Worth ratio is only slightly larger than
the industry standard and may be attributed to the number of stores in the chain
compared to the industry. Per notes to the financial statements Anwar Polymer
Industries Ltd. fixed assets are comprised of 40% capital leases and leasehold
improvements, and 48% is invested in furniture and fixtures. The concentration of
fixed assets in furniture and fixtures is attributed to the investment in the Big APIL
50
stores, which require additional refrigeration equipment for the grocery section (The
Pantry). As stated previously, APIL leases 95% of their facilities also attributed to the
higher fixed assets compared to the industry because the amortization method used for
financial statement purposes is straight-line method over the estimated useful life of
the assets.
Interpretation:
Net fixed assets are 11.3% greater than the RMA and tangible net worth is
2.4% greater than the RMA. Since net fixed assets exceed the industry average the
fixed assets/total net worth is greater (.85) than the industry average (.80).
Trend:
The tangible net worth has shown an upward trend for the past few years with
an increase of 15.65 % from 2012 to 2014. The net fixed assets during the same
period has only increased by 3.9%. Since the total net worth increased faster than net
fixed assets over the period, this ratio has declined.
Debt / Worth
Debt / Worth = Total Liabilities
Tangible Net Worth
Account 2013 2014 2015 RMA

Total Liabilities 57.5% 52.68% 50.85% 52.00%
Tangible Net Worth 42.5% 47.32% 49.15% 48.0%
Total Debt/TNW Ratio 1.35 1.11 1.03 1.08
This ratio shows the capital contribution relationship between creditors and
owners and is sometimes referred to as the degree of advantage. A highly
leveraged firm will not have as much flexibility to borrow in the future as one
with a higher debt/worth ratio. A higher ratio indicates that the corporation is
utilizing a large amount of debt to finance its business operations on a daily basis.
It would appear that APIL is marginally below their peers in the usage of debt.
Interpretation:
Total liabilities are 2.2% lower than the RMA industry average and tangible
net worth is 2.4% higher than the RMA average. As a result, Anwar Polymer
Industries Ltd. debt/worth ratio of 1.03x similar to the 1.08x RMA average.
51
Trend:
As a result of total liabilities decreasing by 12% while net worth has increased by
16% over this period. Anwar Polymer Industries Ltd. debt/worth ratio has
improved by 23.7% during the three year period 2013-2015.
The company has paid down their long-term notes with cash, but also issuing
convertible preferred securities. These securities are convertible to 3.33 shares of
APIL stock. APIL also has a tk.2.5 billion dollar Revolving Credit Agreement that
was amended in 2014 with maturity extensions and reduced interest rate spreads.
In 2015, the company believed that its current financing arrangements would be
sufficient to meet their liquidity needs for operations and capital.
Profitability Ratios
Profitability ratios are a useful tool in the evaluation of management performance.
52
Net Income Growth Rate
Account 2013 2014 2015
Net Income tk. tk.249M tk.518M
(220)M
Net Income Growth Rate 61% 213.18% 108.03%
2500
2000
1500
1000
500
0
1 2 3
Net income growth rate as seen in the table above improved significantly for
years 96, 97 and 98. The loss in 2013 is attributed to a decrease of .9% in sales from
the previous year which can be attributed to the sale of the Mexican and Canadian
international operations. APIL also closed 48 stores in 2013, which was offset
partially by the opening of 21 new stores. In addition, FYE 2013 had one less week
during fiscal year 2013 decreased sales. In addition, APIL at FYE 2013 reported a net
loss of tk.451 from discontinued operations from the sales of the Builders Square
subsidiary and also the sale of a portion of an investment in Thrifty Payless Holdings.
Net income for 2014 increased at a rate of 213.18%; primarily due to the
opening of the Big APIL stores, the introduction of the Martha Stewart lines, Sesame
Street kids line and increased promotional activities. The net income increase was
due to not only the sales increase but to expense control. However, most of the large
percentage increase in net income was due to an 83% decrease in voluntary early
retirement programs and a 91% decrease in interest expense. Sales increased by
2.37% for the FYE97. In addition, SG&A expenses decreased by .89% due to the sale
of the international operations and management control of expenses by focusing on
the core business lines.
Net income for 2015 increased a second year in a row with the growth of
108.03% over 2014. This increase in attributed to a 4.63% growth in sales for FYE98
from the new Big APIL store concept, the Martha Stewart lines, Sesame Street kids
53
line and private label Kathy Ireland line. In addition, SG&A expenses decreased by .
52% for the year, again for the reasons stated in the preceding paragraph.
Although APIL is reporting not only positive net income levels, but positive trends for
the past two years, their gross margins are significantly lower than industry as stated
above.
Margins
Gross Margin and Operating Margin
Account 2013 2014 2015 RMA

Net Sales tk.31,437 tk.32,183 tk.33,67M See Note
M M
Less COGS 77.9 77.6 78.2 67.6
Gross Margin 22.42% 21.85% 21.84% 32.40%
Less Operating Expenses 23.3% 20.0% 19.4% 26.9%
Operating Margin 2.46% 2.78% 3.30% 5.50%
The Gross Margin and the Operating Margin both represent a company's
ability to translate sales dollars into profit. These margins are calculated at different
stages of measurement.
The gross margin is the relationship between sales and the cost of product sold. It
is an accurate measurement in terms of the company's ability to control costs of
goods sold. Consideration is given to the company's ability to pass unavoidable
price increases to the customers. In most recent years, APIL has remained
consistent in its gross margin, but it is substantially lower than the industry
standard as seen above. The lower gross margin can be attributed to Anwar
Polymer Industries Ltd. costs of goods sold being significantly higher than
industry standards.
The operating profit margin measures overall operating efficiency. It incorporates
all expenses associated with the operations of the business. APIL has been
successful at improving its operating margin due to controlling operating
expenses. Operating expenses were 19.4% in comparison to 26.9% industry
average. Although, the operating expenses were lower than industry, Anwar
54
Polymer Industries Ltd. operating margin of 3.30x remains below industry
average of 5.50x. This again can be attributed to costs of goods sold exceeding
industry by 10.6%.
EBITDA / Revenue
Account 2013 2014 2015 Median
Peer
Compariso
n
EBIT tk.783M tk.781M tk.1,091M N/A
Depreciation 654 660 671 N/A
EBITDA tk.1,437M tk.1,441 tk.1,762M N/A
M
Revenue tk.31,437 tk.32,183 tk.33,674 N/A
EBITDA / Revenue 4.57 4.48 5.23 6.0
The EBITDA or Earnings Before Interest, Taxes, Depreciation and

Amortization to Revenue ratio has become a valuable barometer to a company's
success. EBITDA is a measure of cash flow from the companys operation. The
assumption is that as EBITDA steadily improves, debt will be repaid and a company's
balance sheet is acceptable and portrays a successfully run business. This ratio shows
the raw earning power of the business.
APIL has continued to improve this ratio and is .77 from meeting the "median
peer comparison". This comparison is made up of the top six retailers in the industry.
Contributions to Anwar Polymer Industries Ltd. success in this ratio include better
merchandising and improved inventory management. Consumers are attracted to this
form of the retail industry, because of their value of brand names at discount prices.
55
% Profit Before Taxes / Tangible Net Worth
Item 2012 2013 2014 RMA
Earnings Before Taxes 1.05% 1.30% 2.37% 5.00%
Tangible Net Worth 42.5% 47.32% 49.15% 48%
% EBT/TNW Ratio 5.43% 6.52% 11.46% 31.9%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2012 2013 2014 RMA
EBIT divided by tangible net worth reflects the rate of return on tangible
assets within an organization. When combined with other ratios, it can be a useful
management tool but is more effective when compared to other ratios that provide a
more detailed analysis. A high number is usually indicative of successful
management but may be a false assumption if degree of capitalization and other
factors are not considered.
Interpretation:
Anwar Polymer Industries Ltd. EBT is approximately 52.6% below industry average
due to the higher COGS, which also resulted in lower gross and operating margins.
The tangible net worth is 2.4% higher than the industry average. Consequently, Anwar
Polymer Industries Ltd. %EBT/TNW is considerably lower than the industry average.
Trend:
Anwar Polymer Industries Ltd. EBT/TNW has improved by 111% for the
three year period ending 2013-2015. This large growth has been due to EBT
growing115% over the three year period 2012-2014 while TNW has only grown by
16%. However, as stated above APIL is still well below the industry norm. The
upward trend of this ratio may be partially due to the corporate goal to get themselves
in the position of being able to direct large amounts of capital into new opportunities
without add debt.
56
Profit Before Taxes / Total Assets
Item 2013 2014 2015 RMA
Earnings Before Taxes 1.05% 1.30% 2.37% 5.00%
tk.330M tk.418M tk.798M
Total Assets tk.14,286M tk.13,558M tk.14,166M N/A
% EBT/Total Assets Ratio 2.31% 3.08% 5.63% 12.3%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2012 2013 2014 RMA
Note: RMA asset data was not input because it was not comparable to APIL which is
This ratio is a representation of management's ability to utilize the resources available.

It expresses the ratio of pre-tax returns on total assets.
Interpretation:
Earning before taxes of 2.3% is considerable lower than the industry average. The
low EBT is the major factor behind the EBT/Total Assets ratio being less than the
industry. EBT is approximately 52.6% below industry average due to the higher
COGS, which also resulted in lower gross and operating margins.
57
Trend:
Anwar Polymer Industries Ltd. EBT/Total Assets ratio is trending upward
since 2013; earnings before taxes have increased over the 2013-2015 period by 142%
while total assets decreased of 1%. As a result, EBT/Total Assets has been above the
industry during this period.
Supplemental Key Industry Ratios
Same Store Sales
2014 2015
Friends 4.8x 4.8x
FashionTag 6.0 9.0
Famous 5.0 6.1
Median Peer Comparison 4.8 6.5
9
8
7
6
5
4
3
2
1
0
Success with customers is measured by yearly sales gains. The Same Store
Sales quantitative indicator is one of the most closely watched indicators. It is defined
as the increase or decrease from the preceding year in sales at stores that have been
open at least one year. New stores are excluded since first year openings are often
spikes in the statistics for companys sales history. The same store sales is an excellent
barometer of basic demand. Trends in this factor give a better indication of the state
of the business rather than a single month's number would. APIL has had the same
increase in sales for the last two years. Anwar Polymer Industries Ltd. same store
sales has remained stagnant even though they have been opening new stores. This
stable ratio has been because APIL, although opening new stores, has also been
closing stores at the same time in their effort to restructure the company.
Due to the lack of an upward trend in the rate of sales growth, management
may need to reevaluate new store positions and locations, which can impact this data.
The below median peer comparison also reflects stagnation in the growth of the
58
company as well as slow profit when compared to the other major players in the retail
industry.
Sales / Square Foot (millions)

2014 2015
Friends 211 222
FashionTag 347 371
Famous 230 244
Median Peer Comparison tk.216M tk.221M
(S) Designates sq. footage vs. (G) gross
2500
2000
1500
1000
500
0
1 2 3 4
The Sales to Square Foot ratio is a measurement of how efficient the retailer is
using its assets. It gives credit to the designers/architects who design the buildings
that house the retailers as well as to the management and marketing staff who
control its product presentation. It indicates how effective space, in this case
square footage for selling, is utilized. If the sales per square foot is low relative to
other retailers in the same sector a problem may exist. Some of the factors
contributing to this problem are the sales associate's performance, the customer
base or the physical location of the business.
Anwar Polymer Industries Ltd. numbers in this ratio are impressive in that
they have demonstrated improvements and are presently slightly above the median
peer comparison. It appears they are utilizing their assets effectively; however, their
lack of growth overall in the market may be contributed to their lack of profitability
from their product mix. Please note: the s referred to in the table above denotes
selling space per square foot while the G represent gross square footage. For
59
example: APIL is reporting their selling per square footage, (only the space used to
sell) versus Wal-mart is reporting their selling/square foot from their gross store
square footage. The gross number is including non-selling space, which inflates Wal-
mart numbers in the peer comparison.
4.8 Business Performance Analysis

Apart from financial performance analysis, non-financial measure as business
performance should be analyzed. We have analyzed the business performance through
SWOT Analysis, PESTLE analysis and Porters five forces model analysis.
60
4.8.1 SWOT Analysis
Strengths Weaknesses
1. Experienced service professional 1. They are very new in the solar
throughout the country along with market.
generator service team. 2. High cost of import.
2. Strong Service Support. 3. They have no branches.
3. Extraordinary delivery & logistic
support.
Opportunities Threats
1. High demand for solar system. 1. The entire solar market is captured by
2. Government policy. Chinese companies.
3. Market is expanding day by day. 2. Corruption in the system.
3. Manipulation and corruption in IDCOL.
.
Figure 15: SWOT Analysis.
61
Chapter 5
Findings
5.1 Findings
Cash: Cash balances are 64% less than the industry. In addition, net cash after
operations has declined 52% over the three year period 2012-2014.
Inventory: Anwar Polymer is carrying 28% above the inventory norm. INVDOH is
17.64 days longer than the industry resulting in a longer operating and cash
conversion cycles resulting in the use of cash of approximately tk.1,222.
Cost of Goods Sold: Cost of goods sold is 16% above the industry average resulting
in a lower gross margin of 21.84% in comparison to 32.40% industry average. In
addition, the operating margin is affected by cost of goods sold at 3.30% versus the
5.50% industry average.
Sales/net working capital ratio: Sales/net working capital ratio is 35.91% greater
than the industry. It appears that Anwar Polymer is financing current assets with
long-term debt.
Same store sales: Same store sales remained constant for 1997 and 1998 and was
lower (4.8x) than the industry 6.5x for 1998.
Sales/net fixed assets: Sales increased by 7% while net fixed assets increased by
3.9% over the three-year period. As a result, sales/total net fixed assets has increased
over the three-year period.
Leases vs. Own: Anwar Polymer leases 2,051 and owns 110 of their facilities.
62
Chapter 6
Recommendations and Conclusion
6.1 Recommendations
From the findings I would like to recommend some specific points to recover the
limitations of Anowar Polymer Industries Ltd. They are discussed below:
APIL should focus on sufficient liquidity maintenance to face any sort of

sudden crisis.
To maintain the profit growth level, APIL can focus the market shares.
Active strategies could be taken based on the reserves available to face any
sort of worst situation in the market.
APIL Ltd. should maintain consistency in sales and costs. Otherwise any
big change of these two variables may affect the organizations financial
performance very badly.
Anwar Polymer Industries Ltd. should have to control its operating
expenses.
5.2 Conclusion
Today Anowar Polymer Industries Ltd. has burgeoned into one of the top renewable
energy company in Bangladesh. APIL is the countrys leading solar home system
provider. With the core business functions APIL has long been taking active part in
different philanthropic activities like employment generation program for vulnerable
community, financial aid to disadvantaged and natural disaster affected people,
helping acid victims, tree plantation, creating mass awareness on renewable energy
and power issues, supporting in education and sincerely uphold the responsibility
towards the government and society with utmost ethical standards.
Notwithstanding a few limitations Anowar Polymer Industries Ltd. is doing better and
being financially strong year by year. If the management of APIL Ltd. can sustain the
current financial growth level and overcome the drawbacks, they will be an
unbeatable solar company in Bangladesh.
63
BIBLIOGRAPHY
Reports
Annual Report, Anowar Polymer Industries Ltd., 2013, 2014 & 2015.
Text Books
Leopold A. Bernstein, Financial Statement Analysis, 5th Edition, McGraw-Hill,
2000.
Eugene F. Brigham & Michael C. Ehrhardt, Financial Management Theory
and Practices, 13th Edition, Cengage Learning, 2011.
The Interpretation of Financial Statements, Benjamin O. Graham, Spencer B.
Meredith.
The Analysis and Use of Financial Statements, Gerald I. White, Ashwinpaul
C. Sondhi, Haim D. Fried.
RMA (Risk Management Association) Annual Statement Studies
http://www.rmahq.org/
Studyfinance.com provides a free, self-paced tutorial on basic financial
statements. It introduces basic financial statements and financial statement
concepts.
Websites
Anowar Polymer Industries Ltd.
Web address: http//:www.abilbd.com
Financial Performance Analysis
Web address: https://en.wikipedia.org/wiki/Financial_statement_analysis
ENSYSCO
http://www.ensyscobd.com/index.html/
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Chapter 1

1.2 Rationale of the Study

1.4.1.1 Primary Sources

Conversations with the different officials of Anowar Polymer Industries

1.4.1.2 Secondary Sources

1.4.2 Instruments Used for Analysis

1.5 Limitation of the Study

Lack of adequate information

2.1 Industry profiles

2.2 APIL Global:

2.3 Background of the company;

APIL has steadily developed in to a professionally managed company comprising of 3

2.4 APIL at a glance

2.7 Quality policy:

2.8 APIL Contribution:

2.9 Organizational Outlook

2.12 Duties and Responsibilities of Departmental Heads

ii. Accounts Manager

iv. Human Resource Manager

vi. Purchase Manager

3.2 Installation of a Financial Performance Analysis System

Management control needs:

Relationship with financial accounting

Basis of product Financial Performance Analysiss:

Full (absorption) Financial Performance Analysising or marginal (variable)

3.4 Financial Performance Analysis elements

3.4.1 About Material

3.4.2 Objective of Material Financial Performance Analysising

Successful materials management requires the development of a highly integrated and

3.4.3 About Labor

Budgeting or estimating factory overhead Financial Performance Analysiss may be

Factory overhead application rates are computed as a percentage or dollar amount of

3.4.5 Factory overhead application rate

Factory Overhead Application rate= (Estimated Factory Overhead / Estimated Base

3.5 Actual Financial Performance Analysising

3.6 Standard Financial Performance Analysising

3.7 Direct and Absorption Financial Performance Analysising

3.8 Standard set for different elements of Production

Quick Ratio = Cash and Equivalents - Inventory

Account 2013 2014 2015 RMA

Cost of Sale Inventory Ratio

Account 2013 2014 2015 RMA

Inventory days on hand measures ho

3.84 3.95 4.03

2012 2013 2014 RMA

Cost of Sales / Payables =

Account 2013 2014 2015 RMA

This measurement of liquidity measures the number of times account payables

Sales / Working Capital =

Account 2013 2014 2015 RMA

Net Sales / Total Assets

Total Debt / EBIT

Debt Service Coverage Ratio

Traditional Debt Service: Operating Income + Deprec .+ Amort .+ Interest

Traditional debt service coverage is the measurement of a companys ability to service

EBITR / Interest Expense + Rental Expense

Account 2013 2014 2015 RMA

Account 2013 2014 2015 RMA

The EBITDA or Earnings Before Interest, Taxes, Depreciation and

This ratio is a representation of management's ability to utilize the resources available.

Sales / Square Foot (millions)

4.8 Business Performance Analysis

Figure 15: SWOT Analysis.

APIL should focus on sufficient liquidity maintenance to face any sort of