BBJTI Body

1.
1 Background of the study

A proper education system requires a perfect combination of delivering adequate theoretical
knowledge along with necessary applications of that acquired knowledge in the real life
scenario. Northern University plays a vital role to ensure that students studying Bachelor of
Business Administration (BBA) gets the most out of it by being capable of knowing and
applying their education in the real workforce. This is the reason why an Internship Program
is arranged for the soon to be graduated students so that they can get a sample of the real-life
work settings and can have an opportunity to apply their knowledge throughout the program.
Besides, an internship program helps a student to take control and responsibility in his life
along with assisting to learn skills like time-management, interpersonal, organization and
communicational skills etc.
I myself, being a BBA student from Northern University also had this opportunity to
participate in its Internship Program for the Fall’17 semester. I have completed my internship
from a renowned group of companies namely Bogra Bhandar group. I was mainly engaged in
the Jute mill section of their business portfolio which is named Bogra Bhander Jute and
Twine Industries. Jute was once called the golden fiber of Bangladesh. After the
independence of Bangladesh, government tried to revive the industry after a long period of
exploitation and consequent destruction. I am very proud to work in such a glorious sector of
business in our country.
As a student of finance department in Northern University Bangladesh, I gained thorough

knowledge about financial aspects of a company but I lacked real life insight of a business
firm.This internship helped me to develop an overall primary idea of how a business is
operated specially how jute mills are run, what products a jute mill has there to offer, how the
entire process of manufacturing yarn runs etc. As a finance student, my concentration was in
the financial sector of the business.
1.2 Origin of the Study

This report is the output of three and half months long internship program that I have gone
through at Bogra Bhander Jute and Twine Industries. It also fulfils the partial requirement of
an internship program that a business graduate must undergo in order to quality for degree in
Northern University.Being an intern the main challenge was to translate the theoretical
concepts into real life experience.To accomplish the internship, I was placed at Bogra
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Bhander Jute and Twine Industries under the guidance of Mrs. Kaniz Fatema, my academic
supervisor.
1.3 Objectives of the study:

1.3.1. Broad objective
The main objective of this study is to analyze the financial performance of Bogra Bhander
Jute and Twine Industries.
1.3.2. Specific objective
To achieve main objective some other supportive objectives were identified as given below
 To analyze the financial statements of Bogra Bhander Jute and Twine Industries.
 To get idea about Jute manufacturing operation
 To be familiar with the jute related products and their markets.
 To find the problems faced by the company and find way to get solutions of the problems.
1.4 Methodology
Methods followed to perform a job or conducting activities to complete a task is called
methodology. In conducting this study the following methodology was adopted in collecting
data and information, preparation of reports etc.This is a Descriptive Research which briefly
reveals the overall analysis of financial performance of Bogra Bhander Jute and Twine
Industries.
1.4.1 Sources of Data

Most of the data used to make this report are secondary in nature. I have also used primary
data to complete my report.
Primary Sources:
• Discussion with officials of BBJTI
• Face to face conversation with the financial managers and officers.
• Observation while working in the office.
Secondary Sources:
• Annual report of Bogra Bhander group.
• The website of Bogra Bhander group.
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1.5 Limitation of the study
It is obvious that every study has some limitations. The study I have made is of great
importance and required me huge load of work. While conducting I had to face a number of
limitations. Those limiting factors that hampered my smooth workings in the company andin
preparing this report are as follows:
 The organization maintains strict confidentiality about their financial and other
information. So there was always a chance of lack of appropriate information.
 Any type of such presentation requires a long time. Duration of this study was too short to
have a sound understanding of the overall business procedures.
 All the financial data that are used in my study are collected from secondary sources,
mainly from the website. The website is not updated frequently. So the data from the site
is not the latest. So my analysis does not reflect the up to date information and condition
of the company.
 All the employee of the branch is doing their task as the sales and cash related,that's why
collecting financial information from them was also difficult.
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2.1 History of Jute
Bangladesh being one of the leading jute producers of the world enjoyed the monopoly in
marketing of jute and jute goods in the worldmarket till mid-seventies. Bangladesh produces
5.0-5.5 million bales of raw jute annually out of which 2-2.5 m bales are exported andthe rest
are consumed by the local jute mills. About 70-75% of the total jute goods produced in the
country is exported. Bangladesh stillmeets 50-60% of the world's demand of jute goods and
90% of raw jute. More than 150 composite and twine jute mills in public andprivate sector of
Bangladesh are producing more than 6.5 lac. A huge demand for various diversified jute
products viz. carry/shoppingbags, shoes, composite materials, geo-textiles, home textiles,
handicrafts, gift items, pulp and paper etc. is continuously increasing inboth local and foreign
markets. The future prospect of this eco-friendly natural fiber-jute is expected to increase day
by day witheffective support from the national governments of the producing countries
through adoption of appropriate policies like banning of synthetic packaging materials and
enactment of regulations favorable towards its cultivation, diversification and marketing.
Bangladesh holds the 2nd position as a Jute producer in the world with the average
production of Jute 1.08 m ton/year. More than 85% of world production of Jute is cultivated
in the Ganges Delta & having the major portion of it; Bangladesh became the largest
producer of Raw Jute or Jute Fibre in the world. For centuries, Bangladeshi Jute had and still
has demand in the international market for higher quality fibers. This fact makes Bangladesh
the major exporter (80%+ market share) of Jute Fiber in the world; while India has nominal
dominance over export of Raw Jute Fiber.
Since independence, Bangladesh's largest customer for jute products has been the United
States; the bulk of sales has been divided fairly evenly between burlap and carpet backing.
But, consistent with the global pattern, the United States market has eroded fairly steadily
over the years. Sales to the United States reached a low of USD 81.8 million in 1986 but
increased again to USD million in 1987, when both prices and volume rose. The market for
jute sacking was assisted by the fact that some recipient countries of American food aid
specified burlap for their United States imports because they had a secondary market for the
bags.
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2.2 About Jute
Jute is a natural fiber and called "Golden Fiber" for its luster and color like gold. It was first
found on the African coast of the Mediterranean. It is very difficult to trace out the exact
period of the first appearance or growth of this jute plant in Indo- Bangla-Pak sub - continent.
It is, however, understood that jute was being cultivated on the soil of Bangladesh from the
very ancient time and the people of low income group of Bangladesh used to wear a kind of
cloth made of jute fiber. Jute flourished in Bangladesh as an important cottage industry
throughout the country. The export of hand woven jute clothes began in the year 1805. But
the jute cottage industry began to vanish gradually from Bangladesh like world famous
Muslin of Dhaka due to discouragement and other political reasons. It was Europe which
nurtured jute to gain international stature. Europe's requirement moved the wheels of jute
industry in this area. And till today, it plays a significant role in shaping the nature of
Bangladesh jute industry. World's finest and best quality jute grows in different regions of
Bangladesh due to presence of favorable natural climatic conditions and alluvial soil. So far,
about 40 species of jute have been found, out of which only two species have got it's main
real commercial value as well as industrial use. Of the several species of jute, one is called
Corchorus capsularis (white jute) and the other Corchorus olitorius ( both tossa and deshi
jute). The third type is know as Mestha which is the natural substitute of jute. Jute is a major
world fiber and cash crop. The cultivated species of jute, Corchorus capsularis and C.
olitorius, yield a best fiber which is the second largest traded commodity after Cotton.
2.3 Jute Industry Overview

Jute is a vital sector from economical, agricultural, industrial, and commercial point of view
in Bangladesh. Once upon a time jute was called the ‘Golden Fiber’ of Bangladesh. Tins
sector has a good potential to earn a lot of foreign currencies for Bangladesh. At present,
people are very cautious about environment and jute is an environment friendly product. The
contribution of jute sector to economy of Bangladesh is enormous. This sector has been
generating employment for a large segment of total population of the country, directly and
indirectly over the years. Dhaka controls 62% share of the total jute goods market of the
world and earns BDT 20.125 billion by exporting jute goods. Bangladesh is the sole exporter
of raw jute. But due to continuous loss every year, the present and future prosperity and
growth of this industry is in a vulnerable condition. Some of these reasons are the need of
subsidies and rising cost of production, increment of share in idle looms, managerial vacuum,
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lack of effective operating policies, alleged gross mismanagement in procurement of raw
jute, shortage of varied nature of orders received from the buyer, imbalance, obsolete and
worn out equipment. Overview Jute is a long, soft, shiny vegetable fiber that can be spun into
coarse and strong threads. Jute is one of the most affordable natural fibers and is the second
only to cotton in amount produced and variety of uses of vegetable fibers. The industrial term
for jute fiber is raw jute. It is used mainly for its fiber in Bangladesh and in other countries of
Southeast Asia, and the South Pacific. Tossa jute fiber is softer, silkier, and stronger than
white jute. This variety astonishingly shows good sustainability in the climate of the Ganges
Delta. Along with white jute, tossa jute has also been cultivated in the soil of Bengal where it
is known as paat from the very beginning of the 19th century. Now, the Bengal region (West
Bengal in India, and Bangladesh) is the largest global producer of the tossa jute variety. For
centuries, jute has been an integral part of the culture of Bengal, in the entire southwest of
Bangladesh and some portions of West Bengal.
During the British Raj in the 19th and early 20th centuries, much of the raw jute fiber of
Bengal was carried off to the United Kingdom, where it was then processed in mills
concentrated in Dundee. Initially, due to its texture, it could only be processed by hand
until it was discovered in that city that by treating it with whale oil, it could be treated by
machine. The industry boomed (“jute weaver” was a recognized trade occupation in the
1901 UK), but this trade had largely ceased by about 1970, due to the appearance of
synthetic fibers. Margaret Donnelly, a jute mill landowner in Dundee in the 1800s, set up
the first jute mills in Bengal. In the 1950s and 1960s, when nylon and polythene were
rarely used, one of the primary sources of foreign exchange earnings was the export of jute
products, based on jute grown in the East Bengal, now Bangladesh. Jute has been called the
“Golden Fiber of Bangladesh.
Between 2004 and 2010, the jute market recovered and the price of raw jute increased more
than 500%. Jute has entered many diverse sectors of industry, where natural fibers are
gradually becoming better substitutes. Jute is not only a major textile fibre but also a raw
material for nontraditional and value added non-textile products. Jute is used extensively in
the manufacture of different types of traditional packaging fabrics, manufacturing Hessian,
sacking, carpet backing, mats, bags, tarpaulins, ropes and twines. In recent times, jute
fibers are used in a wide range of diversified products: decorative fabrics, chic-saris, salwar
kamizes, soft luggage, footwear, greeting cards, molded door panels and other innumerable
useful consumer products. Supported by several technological developments today jute can
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be used to replace expensive fibers and scare forest materials.
After Bangladesh’s independence in 1971, the government pursued a program of
nationalization of large manufacturing enterprises. As part of this program it took over all the
abandoned jute mills and nationalized those owned by Bangladeshi citizens. The operations
of these nationalized mills were put under the Bangladesh Jute Mills Corporation (BJMC). In
the 90’s, the government focused again on the jute sector problems through a restructuring
program in order to create a commercially viable jute industry. Supported by the World
Bank’s Jute Sector Adjustment Credit (JSAC), the government put together a Jute Sector
Restructuring Program (JSRP) in 1993 to rationalize the cost structure in the jute industry and
to introduce mechanisms through which financial discipline and accountability could be
established. Production efficiency of jute mills depends on efficient and optimum utilization
of both spinning and weaving capacities of mills. The employees are all along pressed on the
need to increase the production efficiency of the industry, which was estimated to be working
at about 90% of the theoretical capacity.
2.4 Features of Jute

 Jute fiber is 100% bio-degradable and recyclable and thus environmentally friendly.
 Jute has low pesticide and fertilizer needs.
 It is a natural fiber with golden and silky shine and hence called The Golden Fiber.
 It is the cheapest vegetable fiber procured from the skin of the plant’s stem.
 It is the second most important vegetable fiber after cotton, in terms of usage, global
consumption, production, and availability.
 It has high tensile strength, low extensibility, and ensures better breathability of fabrics.
Therefore, jute is very suitable in agricultural commodity bulk packaging.
 It helps to make best quality industrial yam, fabric, net, and sacks. It is one of the most
versatile natural fibers that have been used in raw materials for packaging, textiles, non-
textile, construction, and agricultural sectors.
 Bulking of yam, results in a reduced breaking tenacity and an increased breaking
extensibility when blended as a ternary blend.
 The best source of jute in the world is the Bengal Delta Plain in the Ganges Delta, most of
which is occupied by Bangladesh.
 Advantages of jute include good insulating and antistatic properties, as well as having
low thermal conductivity and moderate moisture regain.
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2.5 Environmental benefits
Jute fiber is 100% bio-degradable and recyclable and thus environmentally friendly. A
hectare of jute plants consumes about 15 tons of carbon dioxide and releases 11 tons of
oxygen. Cultivating jute in crop rotations enriches the fertility of the soil for the next crop.
Jute also does not generate toxic gases when burnt.
2.6 Uses of Jute

Jute is a versatile fiber. During the Industrial Revolution, jute yarn largely replaced flax and
hemp fibers in sackcloth. Today, sacking still makes up the bulk of manufactured j ute
products. A key feature of jute is its ability to be used either independently or blended with a
range of other fibers and materials. While jute is being replaced by synthetic materials in
many of these uses, some take advantage of jute’s biodegradable nature, where synthetics
would be unsuitable. Examples of such uses include containers for planting young trees,
geotextiles for soil and erosion control where application is designed to break down after
sometime and no removal required.
2.6.1 Textiles
The major manufactured products from jute fiber are yarn and twine, sacking, hessian, carpet
backing cloth and as well as for other textile blends. It has high tensile strength, low
extensibility, and ensures better breathability of fabrics. The fibers are woven into curtains,
chair coverings, carpets and area rugs and are also often blended with other fibers, both
synthetic and natural. Jute can also be blended with wool. By treating jute with caustic soda,
crimp, softness, pliability, and appearance is improved, aiding in its ability to be spun with
wool.
2.6.2 Packaging
Jute is extensively used for sacking for agriculture goods as well as being used increasingly
in rigid packaging and reinforced plastic and is replacing wood in pulp and paper.
2.6.3 By-products
Diversified by-products from jute include its use in cosmetics, medicine, paints, and other
products. These are good substitute for forest wood and bamboo for production of particle
boards, pulp and paper.
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2.7 Producers, Production and trade
About 95% of world jute is grown in the two south Asian countries specifically India and
Bangladesh. Nepal and Myanmar also produce a small amount of jute. Pakistan, although it
does not produce much, imports a substantial amount of raw jute, mainly from Bangladesh,
for processing.
Jute production fluctuates, influenced by weather conditions and prices. Annual output in the
last decade ranges from 2.5 to 3.2 million tons, on a par with wool. India and Bangladesh
account for about 60% and 30%, respectively, of the world’s production. Bangladesh exports
nearly 40% as raw fiber, and about 50% as manufactured items. India exports nearly 200,000
tons of jute products, the remainder is being consumed domestically.
2.8 Market Outlook

As the demand for natural fiber blends increases, the demand for jute and other natural fibers
that can be blended with cotton is expected to increase. Jute’s profile in the textile industry
has expanded beyond traditional applications and is being used in various higher value
textiles for furnishings as well as in composites particularly as a wood fiber. Although
currently diversified jute products account for a small percentage of total consumption this
segment could expand rapidly with further investment in resources and expertise. In terms of
conservation agriculture, jute also has a set role and is now accepted as an environmental,
cost effective material for various soil applications.
2.9 Advantage of Jute:

Some of the major advantage are
 Jute, having been the most environment-friendly natural fibre because of its inherent
unique properties has counts of advantages over other man-made artificial polymer fibre
products. Under stress jute extends only 0.5% to its stable form and so gives wonderful
dimensional stability.
 The hairy surface of jute fabric gives it a capacity to grip any surface it comes in contact
with. They can, for this reason, be stacked high and wide without any risk of slippage.
 The ignition temperature of jute is 193°c. It thus remains very stable up to near ignition
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point. Even at boiling temperature, its intact physical properties guard it from undergoing
possible distortion.
 Jute being hygroscopic and auriferous permits normal breathing and humidity to the
contents and so ensures their storage without deterioration.
 Hooks may be used freely and easily on jute products during handling as its innate
properties cover up the pierced holes immediately after. It thus prevents seepage loss of
contents during transportation and allows itself to be re-used over and again.
 When burned, it emits the same fume as a burning wood as we know, is nothing
dangerous. It has no adverse effect on human body and the mother nature as a whole.
2.10 Year wise Jute Goods Export of in Quantity by BJMC, BJMA &
BJSA
Bangladesh has been exporting Raw Jute & Jute Products all over the World since long. Once
upon a time Jute was called Golden Fiber of Bangladesh. But few years ago the situation had
become reverse. The farmers were not interested to cultivate Jute due to huge decrease in Jute
price. But now the situation is developing and our farmers showing more interest to cultivate
Jute due to an increase in price of Jute.
Table 2.1: Year wise Jute Goods Export of in Quantity by BJMC, BJMA & BJSA
Quantity in M.Ton Value in Million Tk.
Years Hessian Sacking CBC Carpet Oth. Total Hessian Sacking CBC Carpet Oth. Total
1998-99 92000 104300 17800 296 5900 220296 2763.10 2085.50 621.30 35.70 108.40 5614.00
1999-00 70541 98266 27060 284 5453 201604 2349.50 1986.60 938.30 35.90 5410.30
100.00
2000-01 61479 130407 25696 158 5500 223240 2218.50 2702.70 951.30 20.50 102.70 5995.70
69088 120513 22667 42 5090 217400 2616.70 2866.90 885.30 99.20 6474.10
2001-02 6.00
2002-03 42874 102306 21209 1906 168317 1679.50 2716.00 829.00 3.10 48.90 5276.50
22
2003-04 45912 71328 18964 - 3584 139788 1711.80 1884.90 728.10 - 80.50 4405.30
2004-05 29497 76894 12311 - 4393 123095 1247.20 2125.80 503.60 - 85.50 3962.10
2005-06 26849 84440 13136 - 3103 129528 1449.50 699.50 - 116.50 5086.70
2821.20
2006-07 23179 63722 10605 - 4563 102069 1263.80 2421.70 581.40 - 4385.00
118.10
2007-08 23778 63908 11115 3865 1442.3 2640.1 691.93 113.74 4888.12
0 102666 0
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3.1 Bogra Jute and Twine Industries Limited: An Overview
BBJTI is a self-financed Jute Spinning & Weaving Industry of Md. Tofazzal Hossain
established at Narhatta, Kahaloo, Bogra. Bangladesh in the year 2006 and started its
commercial production in June, 2008. The total value of the mill is assessed at the current
market price is at Tk.3778.50 lac. To meet the requirement of adequate working capital, the
owner is using additional fund scheduled commercial Banks in Bangladesh to run the project
smoothly.
3.2 Owner’s Profile
The owner of BBJTI is Md. Tofazzal Hossain, a highly educated and well experienced
businessperson. He has 25 years of experience in various manufacturing and trading business
industry. His major business concerns are listed below:
1. Bogra Bhander Impex Ltd

2. M/S. Bogra Bhander
3. Bogra Bhander Himagar
4. Bogra Bhander Auto Flour Mill
He is also very renowned among the business community of Bogra. His list of
accomplishments is given below:
1. Former Director, Bogra Chamber of Commerce &Industry

2. Life Member, SAARC Chamber of Commerce & Industry
3. Member, Turkey-Bangladesh Chamber of Commerce & Industry
4. Member, Bangladesh Jute Mill Association
5. Member, Bangladesh Cold Storage Association
6. Member, International Jute Industry Group
3.3 Location
The Jute Mill is established on a piece of land measuring 191 Decimal Land at Mouza- Narhatta, JL
No-47, Sheet No-02, Plot No (Sabek)-1759,1882,1887,1725, 1763,1758,1757, 1762,1755 &1760 Hal
Dag- 3547,3548 ,3523,3524,3589, 3550,3549, 3526,3552& 3544, Khatian No- MRR
498,499,55,103,536,496 & 112 P.S- Kahaloo, District Bogra,
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3.4 Utilities
Power
The unit is connected with 500 KW power from Bogra Palli Biddut Somity. In addition to
that the mill will procure self-power Generator to beat the load shedding.
Fuel & Lubricant
It is considered that the mill requires Tk. 25.00 lac as fuel & lubricant cost for running the
mill & the vehicles of the project.
Water
It is considered that the mill will use own sources of water which is collected from Deep
Tube-well.
Repair and Maintenance

The mill has it’s own workshop equipped with machinery for emergency maintenance and
small repair works. Heavy engineering workshop support is available in Bogra Town. The
annual cost of repair and maintenance for the building has been estimated at 1.50% of its cost
during the whole period of its operation. The annual cost of repair and maintenance for
machinery and equipment has been estimated at 1.50% & 2.50% of the value of machinery &
equipment for 1st & -2nd year respectively and at 3.00% for 3rd, 4th and subsequent years of
operation.
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3.5 Machinery & Equipment of the Mill
The machinery of the mill is brand new and they are of India origin. The value (As per last BS)of
the main imported and local machinery has been estimated Tk. 1810.60 lac .
Table 3.1: List of Imported Machinery

Machin Total Amount in
No. Item e BDT.
1 Softener Small 1 12,00,000
2 Softener Large 1 18,00,000
N Treasure Cutting Machine small 1 80,0000
J
4 Treasure Cutting Machine small 1 25,00,000
5 Cutting Machine small 2 80,00,000
6 Cutting Machine small 1 31,00,000
7 Finisher Machine 2 74,00,000
8 Finisher Machine 2 82,00,000
9 Drawing Machine small 6 72,00,000
10 Drawing Machine large 9 2,43,00,000
12 Spinning Machine 16 4,56,00,000
13 Twisting Machine (Large-1 & Small- 2 36,00,000
1)
14 Roller 2 4,00,000
15 COP Machine (Large-2 & Small-2) 4 58,00,000
16 Maclore Machine (Large-2 & Small-2) 4 70,00,000
17 Beaming Large 2 30,00,000
18 Loom 59 1,09,15,000
18 Sewing Machine 20 34,00,000
19 Precession Welding 10 10,00,000
20 Lath Machine 2 1,20,000
21 Milling Machine 1 6,00,000
22 Shaper 1 3,00,000
23 Generator 380 KVA 1 30,00,000
24 Generator 750 KVA 1 35,00,000
25 Electric Motor 147 51,45,000
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26 Sliver Can 2500 25,00,000
27 Oil Tank 2 10,00,000
28 Transformer-630 1 30,00,000
29 Belling Press 1 5,00,000
30 Spare Parts 1-Lot 75,00,000 :
31 Weight Scale 1 15,00,000 :
32 Calendar Machine 1 46,00,000
33 Travel Crane 1 15,00,000
Total Tk.18,10,60,000/- |
3.6 Building and Other Civil Works

The Jute Mill Building and other civil construction comprises with Factory building, Jute
Godown, Assorting Shed, Work shop Floor, Generator & Sub-Station Room, Office Floor,
Labour & Staff Colony, Canteen, Toilet, Boundary Wall and Internal Roads. The residual value
(as per last BS) of buildings and other civil works has been estimated at Tk.921.65 lac. Detailed
of building and civil construction are furnished in the following table.
Amount
BUILDING AND OTHER CONSTRUCTION Tk. In
“000”
Semi Pacca Factory, Finished Goods & Raw Materials Godown
5518.40 sqm. @ Tk. 13142.20/sqm. 72,524
RCC Roof Office, Mosque, Utility, Worker Shed Guard Room, Store
etc 981.40 sqm. @ Tk. 14,096/sqm. 13,481
Boundary Wall 495.02 Meter @ Tk.6890.71/Meter 3,411

Sanitaiy & Water Line LS 500
Internal Road 250
Weight Bridge Foundation and Civil Works 2,000
Sub-Total: 92165
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Erection and Installation
The erection and installation of all machinery and equipment has been done by local Engineers,
technicians and skilled workers. The total cost for erection and installation including civil,
electrical & mechanical has been considered with the price of machinery.
3.7 Furniture, Fixture and Other Assets
The value of Furniture and Office equipments like Computer, Fax machine & firefighting
equipment is assessed at Tk. 15.00 lac.
3.8 Management Aspect

The Mill is being managed by a group of young & energetic persons having well experience in
production oriented industry. Moreover, the key person of the project Mr. Md. Tofazzal Hossain
who has experience Trading and Industries like Food, Jute and Potato Cold Storage. Already the
management of the proposed project is running 3 nos. of Industry and one Trading Company
with handsome yearly turnover with satisfactory performance. Moreover, for smooth functioning
of the project the sponsors has hired qualified and experienced manpower for smooth operation
of the project.
3.9 Administration
An organization having a strict & efficient administration is blessing for that organization.
BOGRA BHANDER JUTE & TWINE INDUSTRIES (BBJTI) has also its own administration
department, which takes held in managing the function of various departments. The members of
the administration department are selected by the governing body & one of the members along
take part in the administration section to look after the activities. This department takes care of
bank of the employee, their salary level & all other official task due to the decision made by the
higher authority for benefit of the organization.
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3.10 Technical Aspect
The mill is equipped with famous and brand new Indian production machinery and generator. All
of the selected machinery of the project is world famous in their respective field of operation. So,
the project is fully capable to produce quality product to compete both domestic and international
market.
3.11 Departments of BBJTI
3.11.1 Accounts department
Like every other companies BBJTI has also a separate accounts department. They have a group
of highly efficient accounting professionals. They are associated with Abedin & co. chartered
accountants to audit their financial statements. Accounts department deals with companies all the
accounting information. And provide the information to the decoction makers of the company.
Such as
 Maintain all the control accounts

 Manage cost affectivity
 Prepare financial statements
 Contribute on financial report
3.11.2 Purchase/jute department
Purchase department in other word jute department (what thy call) is one of the vital
departments. This department deals with the purchasing of the raw materials or raw jute, packets,
machines, other infrastructure materials etc. to bring the best output against dealing with limited
resources purchase department working so effectively and efficiently through all the years.
Especially in the season employees of purchase department elapse a very rusty time.
3.11.3 Export department
BBJTI is an export based company, so they maintain an export department to achieve the
exporting goal. This jute mill exports 100% of its production. In this case to achieve their goal
export department also does many important activities such as-
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 Promoting their products in foreign market,
 Balancing international currency,
 Making export plan
 Forecasting demand
 Determining mission
 Setting time
 Budgeting
 Communication
 Market research
3.12 Motivational Activities
BBJTI provides different incentives for the employer as motivational tools. Welfare of the mill
staff members and workers is given top most priority and achieve this. The welfare facilities
have been made available within the mill. If any employee works for overtime, then he or she
will get extra money. Besides these, there are some other facilities like canteen facility, medical
facility, credit facility, quarter facility etc.
3.13 Development Works
BBJTI is a 100% export oriented jute yarn industry. Catering to the need and other end users of
jute yarn all over the world. With respect to production the mill is one of the largest in
Bangladesh producing about 2000 metric tons yarn annually and intends to raise the capacity
very soon.
On the perspective management took dynamic development measure which can be concaved
from the following list of development works:-
Installation of own two gas turbine generator capacities each: 750KV+750KV=1500K produce
all the electrical power supply to the whole mill.
 Make: Wood on wooden conical spool.

 Quality: C.B. quality.
 Joints: Manual knots.
17
 Pacing: Truss.
 It is biggest amount the Bengali one’s mills.
 The area of mill land is 60(sixty) across.
 Producing power to run the mill from 1988.
 Since then no product loss occurred for want of power.
 Construction of single storied staff quarter at a cost of about three million taka.
 Installation of enough godowns to store the jute.
3.14 Administrative and Operating Employee

For smooth functioning of the day-to-day affairs including management of operation of the
proposed Jute Yam Industry on completion, a total of 491 manpower has been estimated to be
required of which 14 manpower will be involved for general administration of the office and 477
operative personnel for factory shed including supervisory officers, staff and others.
Personnel required for Factory Shed
Salary per
Position No(s) Month
Factory Manager/Spinning Master 1 Tk. 75,000/-
Production Manager/ Asstt. Spinning Master 1 Tk. 50,000/-
Manager Quality Control 1 Tk.35,000/-
Quality Control Officer 2 Tk. 20,000/-
Supervisors 6 Tk. 15,000/-
Manager Maintenance 1 Tk. 30,000/-
Assistant Manager Maintenance /Asstt. Engr. 2 Tk.20,000/-
Foreman (Mechanical & Electrical) 2 Tk. 15,000/-
Mechanics/Electrician 2 Tk. 12,000/-
Security Officer 1 Tk. 15,000/-
Security Guard 8 Tk.6,000/-
Skilled 150 Tk. 12,000/-
Semi - Skilled 200 Tk. 10,000/-
Non - Skilled 100 Tk. 8,000/-
Grand total : 477
18
Administrative Personnel
Position No(s) Monthly Salary

General Manager 1 Tk. 125,000/-
Office Executives 2 Tk.20,000/-
Marketing Executives . 1 Tk.20,000/-
Accounts Manager 1 Tk.35,000/-
Commercial Manager 1 Tk.30,000/-
Guard/ Peon/ Mali 2 Tk.6,000/-
Driver 1 Tk. 12,000/-
Helper 1 Tk.7,000/-
Cook 1 Tk. 12,000/-
Helper-Cook 3 Tk. 8,000/-
Total: 14
3.15 Capacity
The current capacity of the Jute Mill is given below:
Item Capacity/Day
Sacking Bag 12 M.Ton/day
Hessian Bags 08 M.Ton/day
3.16 Strength and Weakness

BBJTI is a dynamic organization. It is on one hand a very successful business venture, on the
other hand a foundation for potential future giant in the industry. I have done an analysis of the
firm’s strengths and weaknesses.
3.16.1 Strengths
The strength of the company as we found can be pointed out as follows:
 Quality Product:
Quality is their touch word which is supreme and final without compromised. They are
producing natural fiber product. They are maintaining quality in production.
 Electrical Facility:
Two gas turbine generator capacity each 750KV+750KV=1500K produce all the electrical
power supply to the whole mill. They use their own product electricity power.
19
 Timeliness:
They always maintain strict shipment schedule and assume quality so that their final consumers
get the ordered products in time. They are very sincere in maintaining export system.
 Staffing Facility:
The mill is creating jobs for over 1000 people most of them are destitute of the locality. They
have single storied buildings for stuffs & employees.
 Efficient Management:
The mill is run by a team of qualified and highly experienced professionals whose principle
objective is customer Satisfaction. So they sincere about that.
 Educational Facility:
Primary and high school for proper education for the children of their entire employer. For that
reason employee & employees are satisfied for them.
 Medical Facility:
A fully equipped medical center with qualified doctors. They hardly believe that, complete mills
does not make properly without a medical center.
 Accommodation Facility:
Fully furnished accommodation facility for married officers and bachelor mess for bachelors.
Comfortable accommodation of general workers.
 Environment Friendliness:
They are always aware of environment pollution. They are conscious about the needs of mill’s
employees so that they arrange essential things for not polluting the factory.
3.16.2 Weaknesses
The weaknesses of this company as we found can be discussed as below:
 Lack of Training:
They don’t arrange any training program for their employees. So their efficiency is not
extraordinary. Employees lack some crucial skills to improve the production rate..
 Lack of Marketing
20
They don’t have any marketing department. Because, they are 100% export oriented jute yarn
industry. So they don’t need this.
 Lack of Advertisement:
They don’t arrange any advertisement program for their products. As everybody knows their
basic products, they don’t realize the need for adverts or promotional tools.
 Lack of Research & Development Department:
They don’t have any research and development department. There is scope for further research
about new jute based products and new production methods.
 Lack of Group Insurance:
They don’t have any group insurance for their employers and workers. It is so dangerous for
employees & employers. It is a weak link for their employees’ welfare.
 Lack of Customization
BBJTI is producing the same products since their beginning. They should be more careful about
their customers and they should produce any customized product when the clients require them.
21
4.1 Ratio Analysis
Ratio Analysis is one of the basic tools of financial analysis. And it is a fact that financial
analysis itself plays an important role in the progress of business strategic planning. Being the
basic tool of the strategic analysis, ratio analysis plays a vital role and it is not possible to
complete the analysis of a company’s strengths, weaknesses, opportunities and threats, without
an analysis of its financial position.
This tool is normally used to conduct a quantitative analysis of information in a company’s

financial statements. Ratios are calculated by comparing the current year figures to previous
years, other companies, the industry, or even the economy to judge the performance of the
company. This is predominately used by proponents of fundamental analysis. If you don’t know
how to evaluate the present performance of a company and its possible future performance, you
should learn how to analyze ratios.
Ratio Analysis, being the basic tool of the strategic analysis, is extremely important for an
organization to carry out its business planning. Some of the key reasons why it holds so much of
importance are -
a) This analysis gives users a good understanding of how well the company utilized its
resources in generating profit and shareholder value.
b) It attempts to measure a company’s ability to pay off its short-term debt obligations.
c) Used to determine the overall level of financial risk a company and its shareholders face.
d) It helps to enrich financial health and performance of a company.
4.2 Advantage of the Ratio Analysis
a) Helpful in analysis of Financial Statements.

b) Helpful in comparative Study.
c) Helpful in locating the weak spots of the business.
d) Helpful in Forecasting.
e) Helpful to take future decision and action.
f) Estimate about the trend of the business.
g) Effective Control.
22
4.3 Limitations of Ratio Analysis
a) Comparison not possible if different bank adopt different accounting policies.
b) Ratio analysis becomes less effective due to rate of interest level changes.
c) Ratio may be misleading in the absence of absolute data.
d) Lack of proper standards.
e) False accounting data gives false ratio.
f) Ratios alone are not adequate for proper conclusions.
4.4 Categories of Financial Ratio
Financial ratios can be classified according to the information they provide. The following types
of ratios frequently are used:
I. Profitability Ratios
II. Liquidity Ratios
III. Financial Leverage Ratios
4.5 Profitability Ratio

Profitability ratio measure the income or operating success of a company for a given period of
time. Income, or the lack of it, affects the company’s ability to obtain debt and equity financing.
It also affects the company’s liquidity position and the company’s ability to grow. As a
consequence, both creditors and investors are interested in evaluating earning power-
profitability. Analysis frequently use profitability as the ultimate test of management’s operating
effectiveness. Profitability Ratio can be divided into the following parts
i. Gross Profit Margin
ii. Net Profit Margin
iii. Return on Investment Ratio
iv. Return on Equity
4.5.1 Gross Profit Margin
It indicates what the company pricing policy is and what the true mark-up margin are. The
results may skew if the company has very large range of products. This is very useful when
23
comparing against the margins of previous year. A 33% gross margins means products are
marked up 50% and so on. The gross profit margin ratio tells us the profit a business makes on
cost of goods sold. We can compute it from the following formula:
Gross Income
Gross Profit Margin = × 100
Net Sales
Year 2016
Sales Revenue = 456,238,187

Gross Profit = Net Sales - Cost of Goods Sold
= 456,238,187 – 342936570
= 113,301,617
Year 2015

= 455,789,675 – 338900785
= 116,888,890
Year 2014
= 456,000,115 – 333107109
= 122,893,006
Table 4.1: Gross profit margin

Gross Profit (I) Net Sales (II) Gross Profit Margin
III = I ÷ II
2014 122,893,006 456,000,115 0.269
2015 116,888,890 455,789,675 0.256
2016 113,301,617 456,238,187 0.248
24
Gross Profit Margin
0.275
0.27
0.265
0.26
0.255 Gross Profit Turnover
0.25
0.245
0.24
2014 2015 2016
Figure 4.1: Gross profit turnover
From the above data analysis we can deduce that the gross profit margin is showing a decreasing
trend.
4.5.2 Net Profit Margin
The main reason that the profit margin declined is high cost. High cost, in turn, generally occurs
due to inefficient operations. It indicates what proportion of sales contributes to the income of
the company. This ratio is not useful for companies losing money, since they have no profit. A
low profit margin can indicate pricing strategy and or the impact competition has on margins.
The net profit margins ratio tells us the amount of net profit per Tk. of turnover a business has
earned. It is only after taking consideration of cost of sales, the administrative, and selling and
distribution cost, pay interest and tax and so on. The formula to calculate it as follows:
Net Profit
Net Profit Margin = × 100
Net Sales
Year 2016
Net Profit = Gross profit – Admin & General Expenses – Financial Expenses – Provision for
Income Tax – Tax Holiday Reserve
= 113,301,617 – 9632000 – 24793000 – 11796000 – 0
25
= 67,080,617
Net Profit Margin = (67,080,617÷456,238,187)×100
= 14.70 %
Year 2015
= 116,888,890 –9407000 – 24752000 – 12441000 – 0
= 70,288,890
Net Profit Margin = (70,288,890 ÷ 455,789,675)×100

= 15.42 %
Year 2014
= 122,893,006 – 9017000 – 24675000 – 13380000 – 0
= 75,821,006
Net Profit Margin = (75,821,006 ÷ 456,000,115)×100
= 16.63 %
Table 4.2 : Calculation of Net Profit Margin
Net Profit (I) Net Sales (II) Net Profit Margin III
= (I ÷ II)×100
2014 75,821,006 456,000,115 16.63 %
2015 70,288,890 455,789,675 15.42 %
2016 67,080,617 456,238,187 14.70 %
26
Net Profit Margin
17
16.5
16
15.5
15 Net Profit Turnover
14.5
14
13.5
2014 2015 2016
Figure 4.2 : Net Profit Margin
4.5.3 Return on Investment (ROI)
It indicates what return a company is generating on the firm’s investment or assets. The ROA
(Return On Asset) is often referred to as ROI. We add the interest expense to ignore the cost of
the cost associated with funding those assets. This is an important ratio for the companies
deciding whether or not initiates a new project. The basis of this ratio is that if accompany is
going to start a project they expect to earn a return on it, and ROA is the return they would
receive. This ratio indicates the profitability on the assets of the firm’s after all expenses and
taxes. The method for calculating this ratio is as follows:
Net Profit
Return on Asset = × 100
Average Asset
Year 2016
Net Profit = 6,68,43,000
Beginning Asset + Ending Asset

Average Asset =
2
=
874474000+941771000
2
= 90,81,22,500
27
Net Profit
Average Asset
66843000
= × 100
908122500
= 7.36 %
Year 2015
Net Profit = 7,05,00,000

Average Asset =
2
=
803123000+874474000
2
= 83,87,98,500
Net Profit
Average Asset
70500000
= × 100
838798500
= 8.40 %
Year 2014
Net Profit = 7,58,21,000

Average Asset =
2
=
726355000+803123000
2
= 76,47,39,000
Net Profit
Average Asset
28
75821000
= × 100
764739000
= 9.91 %
Return on Investment
12
10
6
Return on Investment
4
0
2014 2015 2016
Figure 4.3: Return on Investment
4.5.4 Return On Equity (ROE):
It indicates what return a company is generating on the owner’s equity investment. For high
growth the company should expect a higher ROE. Average ROE over past few years can give a
better idea of the historical growth. Sometimes ROE is referred to as stockholders return on
investment, it tells the rate that shareholders are earning on their shares. The ROE ratio tells us
how much profit they earn from the investment of the shareholders have made in their company.
The formula as follows:
Net Profit
Return on Equity = × 100
Average Shareholder ′ s Equity
Year 2016
Net Profit = 6,68,43,000
Beginning Equity + Ending Equity

Average Equity =
2
=
626956000+693844000
2
29
= 66,04,00,000
Net Profit
Average Equity
75821000
= × 100
660400000
= 11.48 %
Year 2015
Net Profit = 7,05,00,000

Average Equity =
2
=
556371000+626956000
2
= 59,16,63,500
Net Profit
Average Equity
70500000
= × 100
591663500
= 11.91 %
Year 2014
Net Profit = 7,58,21,000

Average Equity =
2
=
556371000+626956000
2
= 59,16,63,500
Net Profit
Average Equity
30
75821000
= × 100
591663500
= 12.81 %
Return on Equity
13
12.5
12
Return on Equity
11.5
11
10.5
2014 2015 2016
Figure 4.4: Return on Equity
4.6 Liquidity Ratio
Liquidity ratios are the first ones to come in the picture. These ratios actually show the
relationship of a firm’s cash and other current assets to its current liabilities. Two ratios are
discussed under Liquidity ratios. They are:
i. Current ratio
ii. Quick/ Acid Test ratio
iii. Receivable Turn Over
iv. Average Collection / Receivable Turnover in Days
v. Inventory Turnover
vi. Total Asset Turnover
31
4.6.1 Current Ratio and Quick Ratio
Current Ratio
This ratio indicates the extent to which current liabilities are covered by those assets expected to
be converted to cash in the near future. Current assets normally include cash, marketable
securities, accounts receivables, and inventories. Current liabilities consist of accounts payable,
short-term notes payable, current maturities of long-term debt, accrued taxes, and other accrued
expenses (principally wages).
Current Asset
Current Ratio =
Current Liability
Quick/ Acid Test ratio:
This ratio indicates the firm’s liquidity position as well. It actually refers to the extent to which
current liabilities are covered by those assets except inventories. Companies with less than 1
cannot pay their current liabilities and should be looked at with extreme care. This ratio is
determined by the following formula:
Current Asset − Inventory

Quick Ratio =
Current Liability
Year 2016
Current Assets = Cash Balance + Raw and Packing Materials + Work in Progress + Finished
Goods + Receivables + Store and Spares + Other Current Assets
= 353614000 + 235855000 + 3432000 + 17642000 + 17641000 + 905000
= 629088000
Inventory = Raw and Packing Materials + Work in Progress + Finished Goods
= 235855000 + 3432000 + 17642000
= 256929000
32
Current Liabilities = Total Working Capital Loan
= 247927000
Year 2015
= 270479000 + 235855000 + 3393000 + 17434000 + 17434000 + 905000
= 545499000
= 235855000 + 3393000 + 17434000
= 256682000
= 247518000
Year 2014
= 183687000 + 235855000 + 3335000 + 17127000 + 17127000 + 724000
= 457856000
= 235855000 + 3335000 + 17127000
= 256317000
= 246752000
33
Table 4.3: Calculation of Current Ratio and Quick Ratio
Year Current Assets Current Inventories Current Quick Ratio

(I) Liability (II) (III) Ratio V = (I - III) -II
IV= I + II
2014 457856000 246752000 256317000 1.86 0.81
2015 545499000 247518000 256682000 2.20 1.16
2016 629088000 247927000 256929000 2.53 1.50
Interpretation:
Current ratio of BBJTI shows that the ability of the company to meet the current liabilities with
available current assets was increased in the year 2015 and again increased in 2016. If we take a
closer look on the balance sheet, this assumption gets a more realistic touch. Year by year assets
have gone slightly up and the liabilities as well, but proportionately assets were a little higher
than the liabilities which actually reflected as a marginal increase in the ratio.
The Quick ratio also shows the increasing trend. It indicates that the company is not so much
dependent on the inventories to meet the current liability. Their ratio is showing the firm is
capable to cover an unexpected draw down of liabilities.
4.6.2 Receivables Turnover:
We can measure liquidity by how quickly a company can convert certain assets to cash. The ratio
used to assets the liquidity of the receivables is receivables turnover. It measures the number of
times, on average, the company collets receivables during the period. We compute receivables
turnover by dividing net credit sales by the average net receivables.
Net Credit Sales
Recievables Turnover =
Average Net Recievables
Year 2016
Net Credit Sales = 456,238,187
34
Average Net Receivables = 17641000
Year 2015

Year 2014
Table 4.4: Calculation of Receivables Turnover
Year Net Credit Sales Average Net Receivables Turnover

(I) Receivables (II) III = (I ÷ II)
2014 456,000,115 17641000 25.84
2015 455,789,675 17434000 26.14
2016 456,238,187 17641000 25.86
4.6.3 Average Collection / Receivable Turnover in Days:

This indicates the average number of days it takes a company to collect unpaid invoices. A ratio
indicates that the company is having problems getting paid for service or products. The ratio is
sometimes seasonally affected, rising during busy seasons, and falling during the off season. To
account for this seasonality, the average accounts receivables (beginning + ending account
receivables / 2) could be used instead. Average collection period can be determined by the
following formula:
365 Days
Average Collection Period =
Recievables Turnover
Table 4.5: Calculation of Average Collection Period

Year Receivable Average Collection Period
Turnover II = 365 ÷ II
(I)
35
2014 25.84 14.13
2015 26.14 13.96
2016 25.86 14.11
Interpretation:
Receivable turnover ratio indicates the quality of receivables and how successful the Bogra
Bhander Jute and Twine Industries is in collecting the receivables. The higher the turnover he
shorter the time between sale and cash collection. The receivable collection shows the stable
trend.
4.6.4 Inventory Turnover:
It is an important ratio for the company. It indicates that how much time needs to produce the
product and sale it. A low turnover is usually a bad sign because products tend to deteriorate as
they sit in a warehouse. Companies selling perishable items have very high turnover. Average
inventory accounts for any seasonality effects on the ratio. Inventory turnover ratio indicates the
effectiveness of the inventory management of the company. It can be calculated by the following
equation:
Cost of Goods Sold

Inventory Turnover =
Inventory
Year 2016
Cost of Goods Sold = 342936000
= 235855000 + 3432000 + 17642000
= 256929000
Year 2015
36
= 235855000 + 3393000 + 17434000
= 256682000
Year 2014
= 235855000 + 3335000 + 17127000
= 256317000
Table 4.6 Calculation of Inventory Turnover :
Year Cost of Goods Inventory (II) Inventory Turnover

Sold (I) III = (I ÷ II)
2014 333107000 256317000 1.30
2015 338900000 256682000 1.32
2016 342936000 256929000 1.33
Interpretation: The Inventory Turnover Ratio shows an increasing trend. Though last year trend
is an increasing one, still the company should improve its inventory management to achieve
organizations goals.
4.6.5 Total Asset Turnover
It indicates the relationship between assets and revenues. Companies with low profit margin tend
to have high asset turnover, those with high profit margin have low asset turnover. It indicates
pricing strategy. This ratio is more useful for growing company to check if it n fact they are
growing revenues in proportion to sales. This ratio is useful to determine the amount of sales that
are generated from each dollar of asset. The formula for total asset turnover is as follows:
Net Sales
Total Asset Turnover =
Total Asset
37
Year 2016
Net Sales = 456,238,187
Total Asset = Current Asset + Fixed Asset + Capital Work In progress

= 629088000 + 311863000 + 820000
= 941771000
Year 2015
Net Sales = 455,789,675
= 545499000 + 327335000 + 1640000

= 874474000
Year 2014
Net Sales = 456,000,115
= 457856000 + 342807000 + 2460000

= 803123000
Table 4.7 Calculation of Total Asset Turnover
Year Net Sales Total Asset Total Asset Turnover

(I) (II) III = (I ÷ II)
2014 456,000,115 803123000 0.57
2015 455,789,675 874474000 0.52
2016 456,238,187 941771000 0.48
Interpretation:
38
The Total Asset Turnover Ratio shows a deceasing trend. Firm’s Total Asset Turnover Ratio is
weak. The company should go for more sales to get a higher asset turnover.
4.7 Financial Leverage Ratio
Financial leverage ratio shows the extent that debt is used in a company’s capital structure. It
may be defined as the use of fixed financial charges in the firm’s capital structure t magnifies the
Earning Per Share.
I. Debt to Equity Ratio

II. Debt to Asset Ratio
III. Interest Coverage Ratio
4.7.1 Debt to Equity Ratio:

It indicates what proportion of the equity and debt using the company to finance it assets.
Sometimes investors uses only long term debt instead of total liabilities for a more stringent test.
It can be calculated from the following formula:
Total Debt
Debt Equity Ratio =
Shareholder ′ s Equity
 A ratio greater than one means assets are mainly financed with debt, less than one means
equity provides a majority of the financing.
 If the ratio is high (financed more with debt) then the company is in a risky position.
Especially if the rate of interest are on the rise.
Table 4.8 Calculation of Debt to Equity Ratio
Year Total Debt Total Equity Debt to Equity Ratio

(I) (II) III = (I ÷ II)
2014 246752000 556371000 0.44
2015 247518000 626956000 0.39
2016 247927000 693844000 0.35
39
The debt to equity ratio shows a stable decreasing trend over the last three years. It is a good sign
for the company. The management should try to lower the ratio further.
4.7.2 Debt to Asset Ratio:
It indicates what proportion of the company’s assets is being financed through debt. It is so much
similar to the debt equity ratio. A ratio under 1 means a major portion of assets is financed with
equity and above 1 means they are financing more by debt. Furthermore we can interpret a high
ratio as a highly debt leverage firm. When a company has high debt to asset ratio then the
company is also on high risk, especially in an increasing rate of interest market.
Total Debt
Debt Asset Ratio =
Total Asset
Year 2016
Total Debt = 247927000
= 629088000 + 311863000 + 820000
= 941771000
Year 2015
= 545499000 + 327335000 + 1640000

= 874474000
Year 2014
40
= 457856000 + 342807000 + 2460000
= 803123000
Table 4.9 Calculation of Debt to Asset Ratio
Year Total Debt Total Asset Debt to Asset Ratio

(I) (II) III = (I ÷ II)
2014 246752000 803123000 0.31
2015 247518000 874474000 0.28
2016 247927000 941771000 0.26
BBJTI’s debt to asset ratio indicates that the company is operating under low risk condition and
the company is less vulnerable to the interest rate fluctuation in the market. As the ratio is
showing a decreasing trend over the last three years, it is also showing that the company is on a
right track.
4.7.3 Interest Coverage Ratio:
It indicates the firm’s ability to cover interest charges. It is also called times interest earned. The
higher ratio greater likelihood that the company could cover its interest payments without
difficulty. The value of the ratio indicates the firm’s ability to cover annual interest by same
times with operating income. The ratio also sheds some light on the firms’ capacity to take on
new debt. The ratio is measured by using the following formula:
Earning Before Interest and Taxes (EBIT)

Interest Coverage Ratio =
Interest Expense
Year 2016
EBIT = Sales Revenue – Cost of Goods Sold - General & Administrative expense
= 456,238,187 – 342936000 – 9632000
= 103670187
41
Interest Expense = 24793000
Year 2015
= 455,789,675 – 338900000 – 9407000
= 107482675
Year 2014
= 456,000,115 – 333107000 – 9017000
= 113876115
Table 4.10 Calculation of Interest Coverage Ratio
Year EBIT Interest Interest Coverage Ratio

(I) Expense (II) III = (I ÷ II)
2014 113876115 24675000 4.61
2015 107482675 24752000 4.34
2016 103670187 24793000 4.18
42
5.1 Findings
Bogra Bhander Jute & Twine Industries is showing overall satisfactory performance. The ratio
analysis revealed some of the factors that are in need of improvement. The findings in every ratio
is discussed below:
1. Profitability Ratios
i) Gross Profit Margin Ratio: From the analysison Gross Profit Margin of BBJTI we can say that
the management should try to increase profit gradually. Currently it is showing a decreasing
trend, it should be handled.
ii) Net Profit Margin Ratio: Here we can see that Net profit margin of the company has been
decreasing over the last three years. This is a not a good symbol for the company and the
management should try to improve this trend.
iii) Return On Investment (ROI): Here we can see that the analysis of ROI ratio shows that after
2014, it decreased significantly in 2015. The next year it also decreased but in relatively small
extent.
iv) Return On Equity (ROE): Here we can see that Return on Equity was 12.81% in 2014,
11.91% in 2015 and 11.48% in 2016. The investors of the company got less benefit than the
previous year. The management should try to change this trend of the profit to satisfy the
shareholder.
2. Liquidity Ratios
i) Current Ratio: Here we can see that the ability of the company to meet the current liabilities
with available current assets was increased in the year 2015 and again increased in 2016, but
proportionately assets were a little higher than the liabilities which actually reflected as a
marginal increase in the ratio. As the current ratio is increasing steadily the management should
keep keen eyes in this regard.
ii) Quick Ratio: Here we can see the Quick ratio shows the increasing trend. It indicates that the
BBJTI is not so much dependent on the inventories to meet the current liability. Their ratio is
capable to cover an unexpected draw down of liabilities.
43
iii) Receivable Turnover Ratio: Here we can see that the receivable turnover increased in 2015
but decreased in 2016. It means that the average receivables collection in recent years is a little
bit unsteady.
iv) Average Collection Ratio: Here we can see that in 2016, in comparison with last year average
collection period has increased. Therefore the company has to take utmost care to bring down the
collection period of receivable.
v) Inventory Turnover Ratio: Here we can see that the ratio is showing increasing trend. Though
last year trend is an increasing one, still the company should improve its inventory management
to achieve organizations goals.
vi) Total Asset Turnover Ratio: Here we can see that company’s Total Asset Turnover Ratio is
weak. The company should go for more sales to get a higher asset turnover.
3. Financial Leverage Ratios
i) Debt To Equity Ratio: Here we can see that it has decreased in the year 2015 and then again
decreased in the year 2016. The company is keeping their debt level equal and increasing the
portion of equity every year. The management should keep the debt to equity ratio in a balance
position.
ii) Debt To Asset Ratio: Here we can see that it decreased in 2015 and then again decreased in
2016. The assets of BBJTI are supported by debt financing less every year. The company should
keep a moderate debt to asset ratio.
iii) Interest Coverage Ratio: Here we can see that the value of the interest coverage ratio
decreased in 2015 and then again decreased in 2016. The management should try to increase its
earnings to cover its interest expense with relatively easy.
44
5.2 Recommendations
There is no industry or organization without limitations. Better organization has less limitations
or lacking. Bogra Bhander Jute & Twine Industries has some weak links. Here is a list of
recommendations -
 Improvement in Marketing: Marketing is the soul of any business organization which is

absent in BBJTI. For this the company is facing a lots of problems in market expansion and
sales boom. It should initiate appropriate marketing approaches for the market and the
customers. The mill should take up the following marketing approaches-
 They should initiate the advertising activities to inform the target customer.
 They should do marketing survey to know the demand of the customer and develop the
products quality.
 They should provide an efficient distribution channel to increase sales revenue.
 They do not have sufficient transportation facilities to the dealers. They should be helpful
to distribute the products.
 They should introduce promotional strategy, sale promotion to activate the flow of
buying.
 Technological Improvement: Maximum machine in this mill are very old and out dated. It
is very tough to finish the orders efficiently by them. They should update all the machineries
and technologies for the mill.
 Providing Training Facilities: BBJTI has no training facilities for workers. Workers learn
how to do the work with machine by themselves during their job period. But they should
have the facilities to maximize their production by using their proper efficiency.
 Ensure the proper compensation package: This mill has some facilities for the worker and
stuff but they do not get proper salary now –a- days. Sometimes workers face tremendous
financial pressure. In that case a clash between workers and authorities is created. So mill
should ensure the worker’s salary and other rights.
 Proper use of the resources and facilities: BBJTI has many facilities and resources in their
own mill area but they can not use these facilities in proper way. They have self-produced
electric facilities, water supply etc. They should use these facilities in a proper way to
increase their production.
45
 To maintain a higher quality: Delta Jute Mills has lots of potentiality to produce good
quality products. But for a wrong maintenance they are getting looser .So they should
maintain a quality of their production.
 Exploring Alternative Sources of Funds: The Jute Mill is heavily dependent on owner’s
funds. It is functioning with the help of a very little amount of working capital loan. So they
need to explore alternative sources of funds to decrease the pressure on the owner.
 Competitions and Product Diversification: Jute Mills of Bangladesh are operating in a
highly competitive environment. The competition for them is even more challenging as they
have to compete with other company. Given the changes in the business environment, the
need for product diversification is very important.
 Promoting Products: BBJTI also should concentrate on the promotion activities, so that all
levels of client know about their products and their features.
5.3 Conclusion
Jute industry is beset with certain very serious problems, it is depend on heavy subsidies from
the Government, there is growing feeling in the mind of the people that this industry which fed
with locally produced indigenous raw materials should be able to stand on its own legs by
effective and efficient husbanding of human and material resources. What we need to reestablish
our jute industry is sincere effort from the side of employee as well as from the side of
Government. This is, of course, beyond doubt that the first problem to be tackled is to formulate
and affective and well-balanced jute policy. Because if we want to exercise controls over the
industry of bring out operational efficiency we must have a workable jute policy. Above all
sincerity, honesty, and integrity of the employee are the best panacea of the lot of management
ills.
46
Bibliography
1. Annual Report of Bogra Bhander Jute & Twine Industries, Year 2014 – 2016.
2. Website of Bogra Bhander Jute & Twine Industries.
3. Website of Bogra Bhander Group.
4. Yusuf, S. “Jute Industry: Present and Future”, The Financial Express, Oct 20, 2007.
5. Statistical Pocket Book Bangladesh 2010-Bangladesh Bureau of Statistics (BBS).
6. http:// www. worldjute.com/jute_bangladesh/Bangladesh_jute_news 10.html.
7. International Jute Study Group, http://www.jute.org/statistics_03.htm
8. Alim A., A Hand Book of Bangladesh Jute (Dhaka Associated Partners, 1978).
47
Appendix
1. Balance Sheet of Bogra Bhander Jute & Twine Industries
Assets 2014 2015 2016

Taka % Taka % Taka %
Free Cash 183687 22.87% 270479 30.93% 353614 37.55%
Restricted Cash 0 0.00% 0 0.00% 0 0.00%
Cash Balance 183687 22.87% 270479 30.93% 353614 37.55%
Raw & Packing Materials 235855 29.37% 235855 26.97% 235855 25.04%
Work in Process 3335 0.42% 3393 0.39% 3432 0.36%
Finished Goods 17127 2.13% 17434 1.99% 17641 1.87%
Receivable 17127 2.13% 17434 1.99% 17641 1.87%
Store & Spares 724 0.09% 905 0.10% 905 0.10%
Other Current Assets 0 0.00% 0 0.00% 0 0.00%
Current Assets 457856 57.01% 545499 62.38% 629088 66.80%
Pre Operating Expenses 2460 0.31% 1640 0.19% 820 0.09%
Fixed Assets 342807 42.68% 327335 37.43% 311863 33.11%
Total Assets 803123 100.00% 874474 100.00% 941771 100.00%
Liabilities 2014 2015 2016

Taka % Taka % Taka %
Long Term Loan 0 0,00% 0 0.00% 0 0.00%
Bridge Financing 0 0.00% 0 0.00% 0 0.00%
Working Capital Loan 246752 30.72% 247518 28.30% 247927 26.33%
Total Liabilities 246752 30.72% 247518 28.30% 247927 26.33%
Equity Taka % Taka % Taka %
Paid Up Capital 377850 47.05% 377850 43.21% 377850 40.12%
Equity from IPO 0 0.00% 0 0.00% 0 0.00%
Increment in Equity 27417 3.41% 27502 3.14% 27547 2.93%
Participation
Tax Holiday Reserve 0 0.00% 0 0.00% 0 0.00%
Retained Earnings 151104 18.81% 221603 25.34% 288446 30.63%
Total Equity 556371 69.28% 626956 71.70% 693844 73.67%
Total Liability & Equity 803123 100.00% 874474 100.00% 941771 100.00%
48
2. Income Statement of Bogra Bhander Jute & Twine Industries
Item 2014 2015 2016

Capacity Utilization 80% 80% 80%
Sales Revenue 456000 456000 456000
Cost Of Goods Sold 333107 338900 342936
Gross Profit 122893 117100 113064
Admin. & General Expenses 9017 9407 9632
Operating Profit 113876 107693 103431
Financial Expenses 24675 24752 24793
Net Profit before Tax 89201 82941 78639
Income Tax @...% 13380 12441 11796
Tax-holiday Reserve (@20%) 0 0 0
Return on Investment© 8% 0 0 0
Net Profit after Tax 75821 70500 66843
Dividend Paid 0 0 0
Retained Earnings 75821 70500 66843
Gross Profit to Sales 26.95% 25.68% 24.79%
Operating Profit to Sales 24.97% 23.62% 22.68%
Net Profit to Sales (before Tax) 19.56% 18.19% 17.25%
Net Profit to Sales (after Tax) 16.63% 15.46% 14,66%
49

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1.

1 Background of the study

As a student of finance department in Northern University Bangladesh, I gained thorough

1.2 Origin of the Study

1.3 Objectives of the study:

1.3.2. Specific objective

1.4.1 Sources of Data

2.3 Jute Industry Overview

2.4 Features of Jute

2.6 Uses of Jute

2.8 Market Outlook

2.9 Advantage of Jute:

Quantity in M.Ton Value in Million Tk.

3.2 Owner’s Profile

1. Bogra Bhander Impex Ltd

1. Former Director, Bogra Chamber of Commerce &Industry

Fuel & Lubricant

Repair and Maintenance

Table 3.1: List of Imported Machinery

3.6 Building and Other Civil Works

Boundary Wall 495.02 Meter @ Tk.6890.71/Meter 3,411

3.7 Furniture, Fixture and Other Assets

3.8 Management Aspect

3.11 Departments of BBJTI

3.11.1 Accounts department

 Maintain all the control accounts

3.11.2 Purchase/jute department

3.11.3 Export department

3.12 Motivational Activities

3.13 Development Works

 Make: Wood on wooden conical spool.

3.14 Administrative and Operating Employee

Personnel required for Factory Shed

Position No(s) Monthly Salary

3.16 Strength and Weakness

The strength of the company as we found can be pointed out as follows:

The weaknesses of this company as we found can be discussed as below:

 Lack of Research & Development Department:

 Lack of Group Insurance:

This tool is normally used to conduct a quantitative analysis of information in a company’s

4.2 Advantage of the Ratio Analysis

a) Helpful in analysis of Financial Statements.

4.4 Categories of Financial Ratio

4.5 Profitability Ratio

i. Gross Profit Margin

ii. Net Profit Margin

iii. Return on Investment Ratio

iv. Return on Equity

4.5.1 Gross Profit Margin

Sales Revenue = 456,238,187

Sales Revenue = 455,789,675

Gross Profit = Net Sales - Cost of Goods Sold

Sales Revenue = 456,000,115

Gross Profit = Net Sales - Cost of Goods Sold

Table 4.1: Gross profit margin

2014 122,893,006 456,000,115 0.269

2015 116,888,890 455,789,675 0.256

2016 113,301,617 456,238,187 0.248

Figure 4.1: Gross profit turnover

4.5.2 Net Profit Margin

Net Profit Margin = (70,288,890 ÷ 455,789,675)×100

Net Profit Margin = (75,821,006 ÷ 456,000,115)×100

2014 75,821,006 456,000,115 16.63 %