Chapter One

1.1 Introduction
Investing in the Dragon Sweater and Spinning Limited involves certain considerations in
addition to the risks normally associated with making investments in securities. There can be
no assurance that the Fund will achieve its investment objectives. The value of the Fund may
go down as well as up and there can be no assurance that on redemption, or otherwise, investors
will receive the amount originally invested. Accordingly, the Fund is only suitable for
investment by investors who understand the risks involved and who are willing and able to
withstand the loss of their investments.

1.2 Background of the Study

This report is originated as the academic requirement of the MBA program at National
University. As the practical orientation is an integral part of the MBA degree requirement, the
main purpose of internship is to get the students exposed to the job world and slowly get them
acquainted with the organizational setting and corporate culture.
The study has following purposes:
 To get and organize detail knowledge on the job responsibility.
 To experience the real business world.
 To compare the real scenario with the lessons learned in MBA program.
 To fulfill the requirement of MBA Program.

1.3 Objectives of the Study

Broad Objective:
The main objective is to calculate profitability of First Bangladesh Fixed Income Fund.

Specific objectives of the study are as follows:

 To find out the total debt to equity ratio of DSSL
 To find out total debt to total asset ratio of DSSL
 To find out total equity to total asset ratio of DSSL
 To find out the net profit margin of DSSL
 To return on equity (ROE) of DSSL

1
1.4 Methodology
In this report the qualitative research procedure is used to collect the information of the report.
The direct approach is utilized to gather the information. Here the employees of the DSSL are
asked different type of questions relating to the report to helping the making of this report. The
direct approach, the depth interview which is the method of research procedure, is applied.
Here the Assistant General Manager of marketing department is asked different questions and
to explain different issues in an unstructured, direct and in a personal manner to give his opinion
about the topic of the report.
Primary Sources:
 Face to Face conversation with the respective client, officers and staffs.
 Structured Survey on customers
 Interviewing officers and staffs
 In-depth study of selected cases.
 Sharing practical knowledge of officials.
 Related files, books study provided by the officers concerned.
 Practical Desk work
 Direct observation

Secondary Sources:
 Annual Report, Audit Reports of DSSL Ltd.
 Relevant books, Research papers, Newspapers and Journals.
 Website of DSSL.
 Vouchers, Instruments, Forms & Circulars

1.5 Limitation of the Study

When I was running my term paper I faced some problems, which have been considered as
limitation of the study. The limitations are:
 Due to time limitation several information about DSSL cannot be provided.
 Even due to shortage of time, several distributors and retail stores have not been visited.
 The study is mostly based on secondary data. Primary information has been collected
only through depth interview method.
 No questionnaire interview has been conducted for this study.

2
 Chapter Two
Organizational Overview

2.1 Introduction
The First Bangladesh Fixed Income Fund is a unique Fund and the first of its kind in
Bangladesh. Sponsored by both the public and private sector institutions, this Special Purpose
Investment Fund has two broad objectives: develop Bangladesh’s Fixed Income Market and
help maintain stability in financial markets during periods of stress.

2.2 Objective of the company

 Develop Bangladesh’s nascent Fixed Income Market.
In most developed and emerging economies, the Fixed Income market plays a vital role
in driving the growth and maintaining the stability of the overall economy and financial
markets. Historical studies of these Fixed Income markets reveal that both the
government and private sector have collaborated over the years to bring about this
development and that specialized investment funds have played a pivotal role. Such
Funds come in a large variety, but all are structured by pooling assets from the coffers
of the government, private institutions and/or retail investors, and then invested by
professional Asset Management Companies to expand the Fixed Income market. It is
with this goal of promoting the size and efficiency of Bangladesh’s under-developed
Fixed Income market that RACE Management PCL conceived of the First Bangladesh
Fixed Income Fund which has since received the support of both public and private
sector institutions.
 Play a stabilizing role during periods of stress in financial markets
As recent trends have demonstrated, a retail-investor driven listed equity market, like
Bangladesh’s, can often over-react during periods of stress. While share market
corrections are desirable, and necessary, a market “crash” is undesirable and can be
harmful for the stability of the overall economy and financial markets. In order to
dampen the harmful impacts of a stock market “crash”, and bring back investor
confidence, institutional funds of large size can play a constructive role. By investing a
portion of the Sponsor’s capital during periods of unusual stress, the First Bangladesh
Fixed Income Fund is already playing such a responsible role.

3
2.3 Vision
To serve the nation through participation in the development of the economy as a leading
finance company in Bangladesh

2.4 Mission
 A dedicated Fixed Income Fund will give retail investors access to privately placed
corporate bond issues.
 Make the Fixed Income Market more efficient through research based investing.
 To bring about a qualitative improvement in the life style of our people.
 Provide liquidity and play the role of a Market Maker.
 To encourage continuous technological development and creation of employment
opportunity by way of finances’ under SME.
 Provide capital for infrastructure building.

4
 Chapter Three
Profitability Analysis of Dragon Sweater and Spinning Limited
(DSSL)

Financial Statement Analysis

For the Year- 2014-2016

Statement of Financial Position

Particulars 2014 2015 2016
Property Plant &
594,061,029 561,663,206 665,131,856
Equipment
Intangible Assets 10,717,117 9,109,549 7,162,384
Capital Work in
-- 41,827,868 223,761,467
Progress
Total Non-Current
604,778,146 612,600,623 896,055,707
Assets
Inventory 215,738,697 204,386,632 241,233,203
Export Bills
643,662,483 573,779,387 710,222,892
receivables
FDR 4,234,065 4,625,032 5,023,056
Advance and deposits 21,431,607 38,794,057 20,700,157
Cash & cash
158,854,936 190,644,226 267,323,611
equivalents
Total Current
1,043,921,788 1,012,229,334 1,244,502,919
Assets
Total Assets 1,648,699,934 1,624,829,957 2,140,558,626
Stated capital 600,000,000 600,000,000 1,000,000,000
Revaluation Reserve 239,972,341 208,854,009 170,247,393
Retained Earnings 204,153,222 318,640,820 513,838,173
Total Equity 1,044,125,563 1,127,494,829 1,684,085,566

5
Long term loans 457,625,658 413,777,357 371,488,754
Total Non-Current
457,625,658 413,777,357 371,488,754
Liabilities
Trade & other
6,750,672 6,307,567 --
payables
Long term loans
payable within one 110,726,617 37,617,189 37,148,875
year
Provision for taxes 19,690,173 33,481,584 27,615,552
Liability for expense 9,781,250 6,151,431 9,156,356
BS90130 -- -- 11,063,522
Total Current
146,948,711 83,557,771 84,984,305
Liabilities
Total Owners
1,648,699,932 1,624,829,957 2,140,558,625
Equity & Liabilities
Book Value Per
17.2 18.79 16.84
Share

6
 Dragon Sweater and Spinning Limited (DSSL)
Statement Comprehensive Income

Particulars 2014 2015 2016

Revenue 758,931,300 766,817,162 1,230,480,751
Costs of Sales 555,591,719 558,661,531 891,537,051
Gross Profit 203,339,581 208,155,631 338,943,700
Other Operating
-- -- (101,371,011)
Income
Other Operating
60,537,477 60,490,312 --
Profit/ (loss)
Operating Profit/
142,802,104 147,665,319 237,572,689
(loss)
Employee benefits
3,983,003 -- --
expenses
Finance Expenses 59,159,044 59,899,991 65,380,921
Other revenues and
9,254,934 12,599,125 5,017,141
profits
Profit / (loss) Before
88,914,991 100,364,453 177,208,909
Tax
Income Tax Expense 6,923,195 11,281,790 18,156,328
Profit / (loss) for the
81,991,796 89,082,663 159,052,581
Period
Earnings Per Share
1.37 1.48 1.59
- Basic
Dividend Per Share -- -- 0.8

7
 Dragon Sweater and Spinning Limited (DSSL)
Cash Flow Statement

Particular 2014 2015 2016

Cash received from customers 678,865,655 838,359,162 1,091,416,088
Payment to suppliers,
(647,177,707) (563,138,761) (914,821,033)
employees and others
Income tax paid -- (4,866,099) (24,022,361)
lease expenses (59,159,044) (59,899,991) --
Other receipts 9,254,934 12,599,125 5,017,141
Ot Prepayment for financial
-- -- (65,380,921)
expenses
Net Cash Generated from
(18,216,162) 223,053,436 92,208,914
Operating Activities
Invest in FDR (404,415) (390,967) (398,024)
Investment in Intangible Assets (22,409,400) (32,087,580) (190,440,991)
Capital Work in Progress -- (41,827,868) (181,933,599)
Net Cash Flow from Investing
(22,813,815) (74,306,415) (372,772,614)
Activities
Bank overdraft
200,000,000 -- --
(repaid)/increase
long term loan paid (15,859,391) (116,957,729) (42,756,917)
Proceeds/(Redemption) from
-- -- 400,000,000
Preference Shares
Net Cash Flow Financing
184,140,609 (116,957,729) 357,243,083
Activities
Increase (decrease) in Cash 143,110,632 31,789,292 76,679,383
Cash at the beginning of the
15,744,303 158,854,936 190,644,226
period
Cash at the end of the period 158,854,935 190,644,228 267,323,609

8
Addition information
Balance Sheet
Total Non Current Assets 604,778,146 612,600,623 896,055,707
Total Current Assets 1,043,921,788 1,012,229,334 1,244,502,919
Total Assets 1,648,699,934 1,624,829,957 2,140,558,626
Total Equity 1,044,125,563 1,127,494,829 1,684,085,566
Total Non Current Liabilities 457,625,658 413,777,357 371,488,754
Total Current Liabilities 146,948,711 83,557,771 84,984,305
Total Owners Equity &
1,648,699,932 1,624,829,957 2,140,558,625
Liabilities
Book Value Per Share 17.2 18.79 16.84

Income statement
Revenue 758,931,300 766,817,162 1,230,480,751
Gross Profit 203,339,581 208,155,631 338,943,700
Operating Profit/ (loss) 142,802,104 147,665,319 237,572,689
Profit / (loss) Before Tax 88,914,991 100,364,453 177,208,909
Profit / (loss) for the Period 81,991,796 89,082,663 159,052,581
Earnings Per Share - Basic 1.37 1.48 1.59

Cash Flow
Net Cash Generated from
(18,216,162) 223,053,436 92,208,914
Operating Actvities
Net Cash Flow from
(22,813,815) (74,306,415) (372,772,614)
Investing Activities
Net Cash Flow Financing
184,140,609 (116,957,729) 357,243,083
Activities
Cash at the begning of the
15,744,303 158,854,936 190,644,226
period
Cash at the end of the period 158,854,935 190,644,228 267,323,609

9
 Analysis
3.2.1.1 Current Ratio
An indication of a company's ability to meet short-term debt obligations, the higher the
ratio, the more liquid the company is. Current ratio is calculated by dividing firm’s current
asset by current liability.

Current Ratio = Current Asset ÷ Current Liability

Particulars 2014 2015 2016

Current Asset(a) 1,043,921,788 1,012,229,334 1,244,502,919
Current Liability(b) 146,948,711 83,557,771 84,984,305
Current ratio (a÷b)
7.103987377 12.11412561 14.64391477

Current ratio

14.64391477
16
14 12.11412561
12
10
7.103987377
8
6
4
2
0
2014 2015 2016

Fig- 1: Current Ratio of DSSML

From 2014 current ratio of DSSML has declined till 2015 and it has increased in the year
2016 at a high rate. It means in the year 2016 the condition of the company was better than
in last two years. As the current liabilities of the company was in an increasing rate,
DSSML was not that much capable in paying its obligations in last three years. In year
2016 DSSML is doing better as it was able to decrease the amount of their current
liabilities.

10
3.2.1.2 Quick Ratio
The quick ratio measures a company’s ability to meet its short-term obligations with its
most liquid assets. Acid Test ratio is calculated by dividing firm’s quick asset by its quick
liability.

Quick Ratio = Quick Asset ÷ Quick liability

Particulars 2014 2015 2016

Quick Asset 1,043,921,788 1,012,229,334 1,244,502,919
Quick liability 146,948,711 83,557,771 84,984,305
Quick Ratio
7.103987377 12.11412561 14.64391477

Quick Ratio

4.8075666 4.672973526
5
4.5
4
3.5
3
2.5
2 1.401680507
1.5
1
0.5
0
2014 2015 2016

Fig: 2- Quick Raito

In the year 2016 the quick ratio was better than last the years but it has started to decline.
In 2014 and 2015 it was same but in 2016 it has declined at a significant rate which
indicates that the liquidity condition of DSSML was not satisfactory. In the year 2016 the
ratio has increased and it was 0.17 times higher than its current liabilities.

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**Calculation of Quick Assets

Particulars 2014 2015 2016

Total Current Assets 1,043,921,788 1,012,229,334 1,244,502,919

(-) Ending Stock 158,854,935 190,644,228 267,323,609
(-) Advance payments 120.88 94.43 127.22

Quick Assets 138.05 196.36 184.14

3.2.2 Profitability Ratio

Profitability allows us to measure the firm’s ability to earn an adequate return on sales,
total asset and equity. Under profitability ratios I will evaluate Gross Profit Margin, Net
Profit Margin, Return on Asset and Return on Equity of DSSML.
3.2.2.1 Gross Profit Margin
Gross profit margin measures the percentage of gross earnings of the company on its net
sales.
Gross Profit Margin = (Gross profit ÷ Net sales) × 100

Particulars 2014 2015 2016

Gross profit 203,339,581 208,155,631 338,943,700
Net sales 758,931,300 766,817,162 1,230,480,751
Gross Profit Margin 1.401680507 1.401680507 1.401680507

Gross Profit Margin

0.248015488
0.25
0.245
0.24 0.23515259
0.235
0.227443066
0.23
0.225
0.22
0.215
2014 2015 2016

Fig: 3- Gross Profit Margin

In last three years the gross profit margin of DSSML was stable although it is decreasing
slightly from 2014. It means DSSML is paying its operating and other expenses without

12
any problems. Over all we can say that DSSML has a gross profit of around Tk 26 for
every Tk 100 sales.

3.2.2.2Net Profit Margin

Net profit margin measures the percentage of net earnings after tax of the company
on its net sales/net premium.
Net Profit Margin = (Net profit after tax ÷ Net sales) × 100

Particulars 2014 2015 2016

Net Profit After Tax 241,870,048 314,661,131 294,010,592.00

Net Sales 2,678,222,296 2,760,228,469 3,139,465,706.00

Net Profit Margin 9.03099225 11.39982195 9.364988171

**Amount in Million

Net Profit Margin

11.39982195
12
9.03099225 9.364988171
10

0
2014 2015 2016

Fig: 4- Net Profit Margin

The net profit margin for DSSML in last three years was good as it is increasing
significantly. That means percentage change in sales of DSSML was higher than
percentage change in net profit of DSSML. Like in 2016 for every Tk100 of sales DSSML
had a net profit of Tk 9.36 in.

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 3.2.2.3 Return on Equity
Return on Equity measures the percentage of net earnings after tax of the company on its total
Equity.
Return on Equity = (Net profit after tax ÷ Total Equity) × 100

Particulars 2014 2015 2016

Net Profit After Tax 241,870,048 314,661,131 294,010,592.00

Total Equity 7,161,020,402 3,769,238,909 4,293,567,684.00

Return on Equity 3.37% 8.34% 6.84%

Return on Equity

8.34%
9.00%
8.00% 6.84%
7.00%
6.00%
5.00%
3.37%
4.00%
3.00%
2.00%
1.00%
0.00%
2014 2015 2016

Fig: 5- Return on Equity

In the last three years DSSML common shareholders were able to earn a high amount from
their investment. But it was fallen in 2016 as the equity portion was higher on that year still
they could make a little profit from it.

14
3.2.2.4 Return on Asset
Return on Asset measures the percentage of net earnings after tax of the company on its total
asset.
Return on Asset = (Net profit after tax ÷ Total Asset) × 100

Particulars 2014 2015 2016

Net Profit After Tax 81,991,796 89,082,663 159,052,581
Total Asset 1,648,699,934 1,624,829,957 2,140,558,626
Return on Asset 3.37% 8.34% 6.84%
(Amount: Tk in Million)

Return on Asset

8.348134427
9
8 6.847699015
7
6
5
3.377591941
4
3
2
1
0
2014 2015 2016

Fig: 6- Return on Asset

Total return on assets for DSSML was increasing from 2014 to 2016 and increase was quite
satisfactory. It is a very good sign for the company’s reputation year by year. It is also indicates
that there is a huge opportunities for the investor to invest in DSSML Finance Limited.

15
 Chapter Four
Findings and Recommendations

4.1 Findings:
From the analysis, measurement and comparison of three years solvency and profitability
of DSSML with the other NBFI of Bangladesh some findings have been found which are
given below:
a) From the comparison between the industry average and DSSML; it is found that the
though debt to equity ratio is slightly higher than the industry average, however it
is going similarly in the same way with the industry average which says that the
NBFI is on the right track to carry out their present performance.
b) From the comparison between the industry average and DSSML; it is found that the
debt to total asset ratio of DSSML is higher than industry average and DSSML is
taking the higher risk. However, it is found that, the current trend is that the industry
average is going higher or taking higher risk but DSSML hold their risk level in
almost same position.
c) From the comparison between the industry average and DSSML; it is found that the
equity multiplier of DSSML is more or less similar to the industry average. The risk
of DSSML is not so much for this similarity.
d) From the comparison between the industry average and DSSML; it is found that
DSSML’s net profit margin is slightly higher than the industry average of net profit
margin. So DSSML is doing slightly better than the overall industry.
e) From the comparison between the industry average and DSSML; it is found that the
return on asset of DSSML is slightly higher than the industry average. In this
DSSML have also doing slightly better than the overall industry.
f) From the comparison between the industry average and DSSML; it is found that the
return on equity of DSSML is higher than the industry. However, the trend is similar
as it is going in the same track with the industry average. So it should maintain the
position and try to improve it to further extent.

16
4.2 Recommendation
It is not unexpected to have problems in any organization. There must be problems to
operate an organization. But there must be remedies to follow. The following
commendations can be suggested to solve the above-mentioned problems:

a) Though for NBFI it is common that most of the funds will be borrowed, that NBFI
run mostly by debt financing, that’s why the leverage ratios (debt to asset ratio, debt
to equity ratio, equity multiplier) will be much higher than the other industries.
Though DSSML’s leverage ratios are (debt to asset ratio, debt to equity ratio, equity
multiplier) are almost similar to the other NBFI of Bangladesh. But all of the
leverage ratios are slightly higher than the industry average, So DSSML incurs more
risk than usual because of financial leverage and a bit vulnerable than the other
players of the industry. So DSSML should minimize their leverage that is debt
financing a bit and increase equity financing a bit, considering the fact that
minimization is not so high that the DSSML lacks funds to lend.
b) The profitability (Net profit, ROA, ROE) of DSSML is moderately higher than
industry average in previous years, however there is a scope for improvement
because the profitability is not that higher than the industry. So it can be say that
they are going good and DSSML should make sure that the existing growth rate is
increased gradually in a steady pace. DSSML have to take some initiatives to
improve profitability and for this they should follow the base line of cost
minimization and increase of profit.
c) It should be more concern in their management quality to improve its satisfactory
position. The total success depends on the direction of the management so they have
to expert and highly experienced in this sector.

17
 Chapter Five
Conclusion

NBFIs are playing a vital role in the development of our economy. Government and
Bangladesh NBFIs also play a crucial role in this sector by regulating the overall monetary
systems and setting rules and regulation in the activities of NBFI. In recent years of this sector,
DSSML has shown better performance comparing with other first generation NBFIs.
It was great pleaser for to do internship program in reputed organization like DSSML. These
period of practical orientation helps to provide a wide range of scope to observe the operations
of NBFI. Overall the NBFI must make appositive attempt to be more outward looking in their
goals and aware of what is happening.
The solvency of DSSML is higher than the industry so it is better for DSSML to decrease the
debt financing and minimize the risk they are taking on the other hand the profitability of
DSSML is slightly higher than industry average so DSSML have to maintain the existing
position and side-byside they have to take the initiatives to improve this so that they can
perform better than the present situation. Finally, this report will help the DSSML to get the
overall performance in this sector.

18
 References
 Dragon Sweater and Spinning Limited. (2014-2016), Annual Report [online],
 http://www.dsslbd.com/

19