Envoy Textiles Limited (ETL) is a manufacturer of high quality fashion denim in Bangladesh,

located at Bhaluka, Mymensingh (60 km North of Dhaka City). Introducing rope dyeing denim
for the first time in the country, ETL has been designed with a combination of superior man,
machinery and management. Annual capacity of the plants is 22 million meters of quality denim
fabric. It covers an area of 48 acres of land and total manpower strength is 650.

ETL established in 2005, started the commercial production in early 2008, within the short
period of time, ETL is now the largest denim fabric producing unit in Bangladesh. Recently, the
factory has achieved ISO 9001: 14001 quality certification and its products are OKOTEX
certified. Our annual production is 24 million meters. We produce a range of products from
6.5oz to 15oz. of denim fabrics.

ETL targets to be listed in Dhaka Stock Exchange and Chittagong Stock Exchange by issuing
IPO by June, 2012. Assigned AA + rating by Credit Rating Agency of Bangladesh.

ETL customers are spread across the Globe. A bulk of the fabrics is converted to garments in
Bangladesh and then exported to different parts of the Globe. The process is through fabric
nominations from various Brands/Retailers worldwide. ETL also exports directly to following
countries -

 Cambodia
 Egypt
 Germany
 India
 Italy
 Kenya
 Nepal
 Sri Lanka
 Turkey
 USA
 China
 Indonesia
 Vietnam

Within very short time since our establishment, ETL has build partnership with some renowned
global brands -

Nature of Business
Envoy Textiles Limited (ETL) is a manufacturer of 100% export oriented denim fabric. Vision
statement of ETL states its drive for becoming the pioneer in the market. In its way to that drive
ETL has set its vision to achieve global dominance through –

Excellence in product quality

Diversify products through continuous product Innovation
Customer Orientation
Focus on Cost effectiveness
For achieving the set targets ETL has focused on its objectives. Its objectives
are to -
To supply quality products locally & offset part of the total current import of 180 MN Meter
per annum;
To become a vertically integrated manufacturer for fabric & garments;
To reduce the lead time.

The State of The Art rope dying, Indigo Dyeing and Finishing unit has started its commercial
operation on 1st March -2008. The specialty of rope dyeing is –

The color fixation is consistent across the length and width of the fabric. There is no centre to
selvedge variations.
The machine can run longer lengths at a time thus providing better color consistency and
fewer shade groups.
Long lengths in dyeing also ensure a cost effective method of dyeing as there is less wastage
and less stoppages.
Rope dyeing is capable of giving a very deep dyed indigo color. This allows more flexibility
in the washing and better color fastness.

The factory of ETL is situated around 71 km North from Dhaka City. The factory address of
Envoy Textiles Limited is Jamirdia, Bhaluka, Mymensingh. Total land area is around of 117.13
Bighas and it’s in the name of the company. Land inside the project area is mostly high land and
enclosed by boundary walls on all sides.
 Financial Measurement of Envoy Textiles Limited:

1.Return on Equity :Net Profit /Average Shareholder Equity

The return on equity ratio or ROE is a profitability ratio that measures the ability of a firm to
generate profits from its shareholders investments in the company. In other words, the return on
equity ratio shows how much profit each dollar of common stockholders' equity generates.

So a return on 1 means that every dollar of common stockholders' equity generates 1 dollar of net
income.Return on equity measures how efficiently a firm can use the money from shareholders
to generate profits and grow the company.

That being said, investors want to see a high return on equity ratio because this indicates that the
company is using its investors' funds effectively.

ROE of Envoy Textiles:

2010-2011 2011-2012 2012-2013 2013-2014

0.1176 0.1081 0.1109 0.0575

From the above chart we find ROE of ETL, Which means that every dollar of common
stockholders' equity ETL generates $0.1176, $0.1081, $0.1109, $0.0575 of net income in 2010-
2011, 2011-2012, 2012-2013, 2013-2014 respectively. Which is not very impressive from
shareholders point of view.

2.Net Profit Margin = Net Profit /Sales

How much money are you making per every $ of sales. This ratio measures your ability to cover
all operating costs including indirect costs

424258533
Net Profit Margin (2010-2011)= 3345676799 =0.1268

442252097
(2011-2012) = 0.1176
3758220888

435542579
(2012-2013)= 3983610866 =0.1093
 310925062
(2013-2014)= 4391171642 =0.0708

Net profit margin indicates that ETL earned $0.1268, $0.1176, $0.1093, $0.0708 in 2010-
2011, 2011-2012, 2012-2013, 2013-2014 respectively. The company is not making high amount
of money per $ sales.

3.Current Ratio =

Current Assets /Current Liabilities

(also known as Working Capital Ratio)

Measures firm’s ability to meet short term obligations with short term assets, a useful indicator
of cash flow in the near future.

A ratio less that 1 may indicate liquidity issues. A very high current ratio may mean there is
excess cash that should possibly be invested elsewhere in the business or that there is too much
inventory. Most believe that a ratio between 1.2 and 2.0 is sufficient.

Current ratio of Envoy Textiles:

2010-2011 2011-2012 2012-2013 2013-2014

1.68:1 1.07:1 0.88:1 0.87:1

The ratio was ok in 2010-11 & 2011-12 period but not satisfactory in the year 2012-13 & 2013-
14
4.Working Capital:A measure of short term debt paying ability expressed in dollars.

Working Capital: Current assets-Current liabilities

Working Capital of Envoy Textiles:

2010-2011: 1961610182-1168601905=793008277

2011-2012: 2454425568-2285258458=169167110

2012-2013: 2474208172-2796878944=-322670772

2013-2014: 3183855503-3669838166=-485982663

We find negative figure of net working capital for the last 2 years, which is an indicator that the
company is not doing well.

5.Net Income Percentage: Net Income/Total revenue

An indicator of management’s ability to control cost.

Net Income Percentage of Envoy Textiles:

2010-2011 2011-2012 2012-2013 2013-2014

13.22% 11.29% 10.93% 7.08%

Net income percentage is less but ok.

6.EPS

Earning per share, also called net income per share, is a market prospect ratio that measures the
amount of net income earned per share of stock outstanding.

Earnings per share is also a calculation that shows how profitable a company is on a shareholder
basis. So a larger company's profits per share can be compared to smaller company's profits per
share.

Earnings per share (EPS) is calculated by dividing a company's total earnings by the number of
outstanding shares.

Higher earnings per share is always better than a lower ratio because this means the company is
more profitable and the company has more profits to distribute to its shareholders.

EPS Of ETL:

2010-11 2011-12 2012-13 2013-14

4.42 4.24 3.19 2.21

We see that EPS of ETL is decreasing day by day which is not a good performance.

Conclusion & Recommendation: The Financial measurements analysis we did have some
limitation as we could not take enough measurements to analysis a company,but within our short
measurement techniques we suggest that not to invest or purchase stock of Envoy Textiles.