Singer Final

8/2/2019 Singer Final

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1.1: Origin of the Report

We are student of Bachelor of Business Administration of United International University. Our

respectable course instructor Umma Rumana Huq, assigned this report as the partial requirement

of the course FIN-4323 Working Capital Management to gather knowledge to our work

associated fields. We have assigned to prepare this report on An analysis on Working Capital

Management of Singer.

1.0 : Introduction


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1.2: Objective

The objective of this report are-

Course requirement Application of theoretical knowledge To test our report writing ability To learn about managing working capital of an organization


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1.3: Limitation

The limitation of this report-

Time was not sufficient. Information was not available. Financial problem. Resource was limited No security was provided by our university Multiple tasks at a time.


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2.1: Information Need

As our topic is related with the analysis of a company, we were seeking the related information.

We depended on the primary and secondary source to collect information. From this source we

collected the information related with our topic.

2.2: Source of Data

For our report, we collected and used the data from two sources:

Primary DataMainly we collect the data from the annual report of the particular company.

Secondary DataWe use some relevant secondary data from websites.

2.3: Conceptual Framework

We have not used any kind of complicated word in our report. Anybody can simply understand

the whole things, just only need careful reading. Moreover, we have not tried to oversimplify to

keep a standard and we have maintained judicial attitudes.

2.0 : METHODOLOGY


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3.1 Chapter-1: Company Profile:

Year of Establishment:

Singer Bangladesh started its journey as a private limited company in 1979.

The Company was converted into a public limited company in 1983.

Direct subsidiaries of The Singer Bhold B.V. of Netherlands since 2003.

Shares of the company are publicly traded in DSE and CSE

Industry Singer Belongs to:

Singer Bangladesh Limited is a Bangladesh based manufacturer and retailer of consumer

electronics and household appliances. Sewing machines are Singers core business but the

Management realized that this product alone could not substantiate growth for longer periods.

This diversification into consumer durables has continued unabated. At different times Singer

has introduced Color Televisions, Fans, Washing Machines, Irons, Microwave Ovens, Rice

Cookers, Audio Products, Air Conditioners, Motorcycles, Instant Power supply, DVD Players,

Room Heaters, Kitchen Appliances, Notebook, Laptop, Desktop Computers, Generators, Blue

Ray DVD Players, LCD/LED TV and 3D Television. Singer ventured into the manufacturingand marketing of household and industrial cables in 2006 with the promise to Safety You Can

Trust.

3.0 : Body of the Report


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Around 300 dealers are located across the country to make

Consumer Electronics & Home Appliances of Singer and other brands, Singer Cables and

Sewing Machines available to more consumers.

Company Briefing:

The Singer saga began in 1851, when Sir Isaac Merritt Singer with US$ 40 in borrowed capital

began to manufacture and sell a machine to automate and assist in the making of clothing. In

1876, Singer became the first multinational industrial company as it began manufacturing sewing

machines in Glasgow, Scotland. By 1880 world sales had reached 250,000 units. Additional

factories were established in New Jersey, and one of the best-known emblems- the RED S Girl

Trademark-was developed. The singer Building at 149 Broadway in New York was opened and

became the headquarter of Singer for the next 54 years Singer introduced electronics, home

appliances, and other consumer durables especially in the Asia Pacific Rim, Latin America and

the Caribbean. Today Singer is a household name throughout the world for a wide range of

products for the home. The first operation of Singer began in 1905. Later, in 1920, two shops

were set up in Dhaka and Chittagong. After the emergence of Bangladesh on December 16,

1971, the East Pakistan Branch Office was elevated to a country Office and the Sewing

Machines were made available from different Singer overseas sources. The number of shops was

squeezed to only 23 because of low volume of business. In 1983 the company was listed withDhaka Stock Exchange (DSE) and offered 20% of its total capitalization in 2001, it was also

listed with the Chittagong Stock Exchange (CSE). Although sewing machines are Singers core

business but the Management realized that this product alone could not substantiate growth for

longer periods. This diversification into consumer durables has continued unabated. At different

times Singer has introduced Color Televisions, Fans, Washing Machines, Irons, Microwave

Ovens, Rice Cookers, Audio Products, Air Conditioners, Motorcycles, Instant Power supply,

DVD Players, Room Heaters, Kitchen Appliances, Notebook, Laptop, Desktop Computers,

Generators, Blue Ray DVD Players, LCD/LED TV and 3D Television. Singer ventured into the

manufacturing and marketing of household and industrial cables in 2006 with the promise to

Safety You Can Trust.


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Gradual transformation of Singer Shops into Singer Plus was adapted in 2006 as part of its multi-

branding strategy. The main focus of this strategy is to make available varied world famous

brands under the same product category for providing customers a variety of choice under the

same roof. As such Singer Shops now offers world famous brands like Samsung, Haier,

Singtech, Whirlpool, Toshiba, Moulinex, Sebec, Tefal, Prestige, PureIt alongside with Singer.

Core Values:

Integrity

We conduct ourselves with honesty and integrity, recognizing that upholding the customer's trust

requires the highest standards of moral and ethical conduct.

Quality

We achieve excellence through the ongoing development of our competencies and continuous

quality improvement in all our processes. In particular, we recognize the value and importance of

forecasting in reaching quality and timely decisions.

Teamwork

Everyone's contribution is important. Working together, we place the mission of IC Trends first

and align our efforts toward that end. We conduct ourselves in accordance with the principles of

consultative and participative decision-making.

Communication

We communicate information, ideas, decisions, and provide feedback, internally and external to

the organization, in a candid, timely, constructive, and clear manner.


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Equity

We treat our customers and each other with fairness, courtesy, respect and compassion while

fostering an atmosphere of mutual trust.

Diversity

We promote workforce diversity to strengthen and enrich the company.

Innovation

We apply new concepts, ideas, and creative approaches to improve current operations and to

meet the challenges of the future.

Quality of Work Life

We create and use programs that enhance the quality of the work place to improve our ability to

carry out the mission of the organization.

Provide Amazing Service

We are proud to operate a customer-centric company where the relationship with our customersis our number one priority. We think anything worth doing, is worth doing well. We strive to

exceed the expectations of every customer before, during and after the sale. We go above and

beyond the average level of service to create customer amazement and strong connections with

our customers.

Make a Commitment to Improvement

Because of our entrepreneurial spirit we never accept or become comfortable with the status quo,but are always thinking of ways to improve. Without change, we cannot continue to provide the

amazing service that is the Singer Family trademark. Sharing of ideas and respecting different

perspectives is important to maximizing improvement.


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Embrace a Strong Work Ethic

In Singer Bangladesh people do not have "jobs", they have responsibilities. Personal

accountability is expected so that each person contributes his or her very best. Attitude,

Character and Enthusiasm (ACE) is our daily reminder to approach each day with integrity in

order to produce our finest work.

Build a Family Spirit

Our honesty and integrity with one another other leads to strong relationships that produce the

strongest work. We can use these solid relationships to accomplish so much more than we could

otherwise. We encourage consultation, collaboration and participation at all levels of the

organization. We are in this together and no matter the situation, we are always respectful to one

another.

Have Fun at Work

We love to celebrate our individual and team accomplishments, both large and small. We have a

sense of humor and we know that it's good to laugh at ourselves every once in a while. We are

proud of our employee happiness and are always looking for a chance to fully engage in our

work and bring out the fun in it.


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Products:

Air Conditioner Computer DVD/Blue Ray Player Electric Kettle Fan Freezer Fridge Gas Burner IPS Iron Kitchen Appliances LED/LCD Television Microwave Oven Motor Cycle Rice Cooker Sewing Machine Singer Cables Television Washing Machine Water Heater Water Purifier
http://www.singerbd.com/pdbrand.php?cate_id=1http://www.singerbd.com/pdbrand.php?cate_id=4http://www.singerbd.com/pdbrand.php?cate_id=5http://www.singerbd.com/pdbrand.php?cate_id=24http://www.singerbd.com/pdbrand.php?cate_id=25http://www.singerbd.com/pdbrand.php?cate_id=23http://www.singerbd.com/pdbrand.php?cate_id=16http://www.singerbd.com/pdbrand.php?cate_id=26http://www.singerbd.com/pdbrand.php?cate_id=12http://www.singerbd.com/pdbrand.php?cate_id=10http://www.singerbd.com/pdbrand.php?cate_id=21http://www.singerbd.com/pdbrand.php?cate_id=11http://www.singerbd.com/pdbrand.php?cate_id=22http://www.singerbd.com/pdbrand.php?cate_id=19http://www.singerbd.com/pdbrand.php?cate_id=15http://www.singerbd.com/pdbrand.php?cate_id=14http://www.singerbd.com/pdbrand.php?cate_id=20http://www.singerbd.com/pdbrand.php?cate_id=2http://www.singerbd.com/pdbrand.php?cate_id=17http://www.singerbd.com/pdbrand.php?cate_id=18http://www.singerbd.com/pdbrand.php?cate_id=13http://www.singerbd.com/pdbrand.php?cate_id=13http://www.singerbd.com/pdbrand.php?cate_id=18http://www.singerbd.com/pdbrand.php?cate_id=17http://www.singerbd.com/pdbrand.php?cate_id=2http://www.singerbd.com/pdbrand.php?cate_id=20http://www.singerbd.com/pdbrand.php?cate_id=14http://www.singerbd.com/pdbrand.php?cate_id=15http://www.singerbd.com/pdbrand.php?cate_id=19http://www.singerbd.com/pdbrand.php?cate_id=22http://www.singerbd.com/pdbrand.php?cate_id=11http://www.singerbd.com/pdbrand.php?cate_id=21http://www.singerbd.com/pdbrand.php?cate_id=10http://www.singerbd.com/pdbrand.php?cate_id=12http://www.singerbd.com/pdbrand.php?cate_id=26http://www.singerbd.com/pdbrand.php?cate_id=16http://www.singerbd.com/pdbrand.php?cate_id=23http://www.singerbd.com/pdbrand.php?cate_id=25http://www.singerbd.com/pdbrand.php?cate_id=24http://www.singerbd.com/pdbrand.php?cate_id=5http://www.singerbd.com/pdbrand.php?cate_id=4http://www.singerbd.com/pdbrand.php?cate_id=1


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Service:

Hire Purchase Extended Warranty After Sales Service Singer Sewing Academy Bill Pay Flexi Load Customer Protection Plan Customer Loyalty Program Call Center Instant Buy
http://www.singerbd.com/content.php?id=5100425http://www.singerbd.com/content.php?id=2494852http://www.singerbd.com/content.php?id=1843787http://www.singerbd.com/content.php?id=7167310http://www.singerbd.com/content.php?id=8437538http://www.singerbd.com/content.php?id=1413217http://www.singerbd.com/content.php?id=211967http://www.singerbd.com/content.php?id=4514679http://www.singerbd.com/content.php?id=4514679http://www.singerbd.com/content.php?id=211967http://www.singerbd.com/content.php?id=1413217http://www.singerbd.com/content.php?id=8437538http://www.singerbd.com/content.php?id=7167310http://www.singerbd.com/content.php?id=1843787http://www.singerbd.com/content.php?id=2494852http://www.singerbd.com/content.php?id=5100425


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Target market of Singer Bangladesh:

Amplifier Blank Records & Tapes Cables Camera Accessories Car Audio Car Communications Car Reversing Aid

Card Readers Cassette Recorder & Player CD Player Chargers Consumer Electronics Stocks Digital Batteries Digital Cameras Digital Voice Recorder DVD, VCD Player Earphone & Headphone Film Cameras Handheld Video Games HDD Players Home Audio & Video Parts & Accessories Home Theatre System Karaoke Player Memory Cards Microphone MP3 & MP4 Accessories MP3 Players
http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Amplifier/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Blank_Records_Tapes/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Cables/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Camera_Accessories/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Car_Audio/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Car_Communications/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Car_Reversing_Aid/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Card_Readers/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Cassette_Recorder_Player/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/CD_Player/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Chargers/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Consumer_Electronics_Stocks/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Digital_Batteries/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Digital_Cameras/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Digital_Voice_Recorder/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/DVD_VCD_Player/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Earphone_Headphone/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Film_Cameras/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Handheld_Video_Games/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/HDD_Players/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Home_Audio_Video_Parts_Accessories/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Home_Theatre_System/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Karaoke_Player/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Memory_Cards/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Microphone/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/MP3_MP4_Accessories/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/MP3_Players/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/MP3_Players/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/MP3_MP4_Accessories/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Microphone/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Memory_Cards/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Karaoke_Player/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Home_Theatre_System/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Home_Audio_Video_Parts_Accessories/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/HDD_Players/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Handheld_Video_Games/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Film_Cameras/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Earphone_Headphone/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/DVD_VCD_Player/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Digital_Voice_Recorder/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Digital_Cameras/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Digital_Batteries/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Consumer_Electronics_Stocks/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Chargers/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/CD_Player/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Cassette_Recorder_Player/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Card_Readers/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Car_Reversing_Aid/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Car_Communications/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Car_Audio/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Camera_Accessories/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Cables/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Blank_Records_Tapes/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Amplifier/


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MP4 Players Navigation & GPS Other Auto Electronics Other Consumer Electronics Other Home Audio & Video Equipment Quran Players Radio
http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/MP3_Players/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/MP3_Players/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/MP3_Players/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/MP4_Players/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Navigation_GPS/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Other_Auto_Electronics/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Other_Consumer_Electronics/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Other_Home_Audio_Video_Equipment/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Quran_Players/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Radio/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Radio/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Quran_Players/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Other_Home_Audio_Video_Equipment/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Other_Consumer_Electronics/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Other_Auto_Electronics/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/Navigation_GPS/http://www.list-of-companies.org/Bangladesh/Consumer_Electronics/MP4_Players/


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Management Philosophy:

To work for the betterment of society

Vision

Their vision is to be the most admired and respected family company in the country

Mission

Their mission is to improve the quality of life of the people by providing comforts and

conveniences at affordable prices

Value statement

Consumers:

To live up to the expectation of a responsible organization by contributing towards the

improvement in the Quality of life of our customers through outstanding product and services

Employees:

To respect each other as individuals and encourage cross functional teamwork while providing

opportunities for career development.

Shareholders:

To provide reasonable return to shareholders while safeguarding their investment.

Suppliers:

To develop our suppliers as partners in progress and share our growth with them.


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Competitors:

To respect our competitors and recognize their contribution to market value.

Community:

To conduct our business by conforming to the ethics of our country and share the social

responsibility of the less fortunate.

OBJECTIVES

To be the market leader in product range and market segment. To provide consumers with the best services and shopping experience. To provide consumers with products of latest technology. To develop employees to achieve their real potential. To provide our shareholders with steady asset growth and return on investment above our

industry norm.

To grow our revenue and profits at a rate above the industry norm.

Singer Bangladesh Goals:

Singer Bangladesh wants to be the best company who serve quality product and service to

family of the whole world. The major outcome of strategic road-mapping and strategic

planning, after gathering all necessary information, is the setting of goals for the organization

based on its vision and mission statement. A goal is a long-range aim for a specific period. It

must be specific and realistic. Long-range goals set through strategic planning are translated

into activities that will ensure reaching the goal through operational planning.
http://1000ventures.com/business_guide/im_strategic_roadmap.htmlhttp://1000ventures.com/business_guide/crosscuttings/planning_strategic.htmlhttp://1000ventures.com/business_guide/crosscuttings/planning_strategic.htmlhttp://1000ventures.com/business_guide/crosscuttings/planning_main.htmlhttp://1000ventures.com/business_guide/crosscuttings/planning_main.htmlhttp://1000ventures.com/business_guide/crosscuttings/planning_strategic.htmlhttp://1000ventures.com/business_guide/crosscuttings/planning_strategic.htmlhttp://1000ventures.com/business_guide/im_strategic_roadmap.html


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Strengths

Robust top line growth

Strong market position

Diversified business portfolio

Weaknesses

Fluctuating operating and netprofits

Oportunities

Positive outlook forsemiconductors

Increasing mobile phone sales Growing rural market

Threats

Increasing raw material prices

Intense competition

Government regulations

SWOT

Strengths, Weaknesses, Opportunities and Threats

(SWOT)

SWOT is an acronym for the internal Strengths and Weaknesses of a firm and the

environmental Opportunities and Threats facing that firm. SWOT analysis is a widely used

technique through which managers create a quick overview of a companys strategic situation.

The technique is based on the assumption that an effective strategy derives from a sound fit

between a firms internal resources (strengths and weaknesses) and its external situation

(opportunities and threats). A good fit maximizes a firms strengths and opportunities and

minimizes its weaknesses and threats. Accurately applied, this simple assumption has powerful

implications for the design of a successful strategy.


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3.2Chapter-2: Basic Working Capital Management of Singer:3.2.1 Gross Working Capital:

Cash and short-term assets expected to be converted to cash within a year. Businesses use the

calculation of gross working capital to measure cash flow. Gross working capital does not

account for current liabilities, but is simply the measure of total cash and cash equivalent on

hand. Gross working capital tends not to add much to the business' assets, but helps keep it

running on a day-to-day basis.

Gross Working Capital= Current Asset + Current Liability

Following table shows the gross working capital of Singer in different years:

Particulars 2007 2008 2009 2010

Gross Working

Capital1873806868 2123669777 1388338025 3458768235

18738068682123669777

1388338025

3458768235

2007 2008 2009 2010

Gross Working CapitalGross Working Capital
http://financial-dictionary.thefreedictionary.com/Cashhttp://financial-dictionary.thefreedictionary.com/Cash+Flowhttp://financial-dictionary.thefreedictionary.com/Current+Liabilitieshttp://financial-dictionary.thefreedictionary.com/Assetshttp://financial-dictionary.thefreedictionary.com/Assetshttp://financial-dictionary.thefreedictionary.com/Current+Liabilitieshttp://financial-dictionary.thefreedictionary.com/Cash+Flowhttp://financial-dictionary.thefreedictionary.com/Cash


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From the analysis of gross working capital of Singer Bangladesh we can see that the ratio were

fluctuating all over the four year. But they able to achieve efficiency on gross working capital as

there is a increase in 2011. The reason of this increase is significant increase in current asset.

3.2.2 Net Working Capital:

Cash and short-term assets expected to be converted to cash within a year less short-term

liabilities. Businesses use net working capital to measure cash flow and the ability to service

debts. A positive net working capital indicates that the firm has money in order to maintain or

expand its operations. Net working capital tends not to add much to the business assets, but

helps keep it running on a day-to-day basis.

Net Working Capital= Current AssetCurrent Liability

Following table shows the Net working capital of Singer in different years:

Particulars 2007 2008 2009 2010

Net Working Capital 347522272 68955785 279786197 2480213523

34752227268955785 279786197

2480213523

2007 2008 2009 2010

Net Working Capital

Net Working Capital


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From the analysis of net working capital of Singer Bangladesh we can see that the ratio was

fluctuating all over the four year. But they able to achieve efficiency on net working capital as

there is a increase in 2011. The reason of this increase is significant increase in current asset &significant decrease in current liability.

3.2.3 Operating Cycle:Operating cycle is the average time between the acquisition of materials or services and the

final cash realization from that acquisition. The time between the purchase of raw material and

its sale, and the sale of a product made from the raw material. Most companies desire short

operating cycles because it creates cash flow to cover the company's liabilities. A long operating

cycle often necessitates borrowing and thereby reduces profitability.

Operating Cycle= Inventory Period + Account Receivable Period

Following table shows the Operating Cycle of Singer in different years:

Particulars 2008 2009 2010

Operating Cycle 745 1150 985

745

1150

985

0

200

400

600

800

1000

1200

1400

2008 2009 2010

Operating Cycle

Operating Cycle


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The analysis of operating cycle of Singer Bangladesh shows a long period of cycle which is

usually bad for the organizations operation & its profitability. The longer operating cycle

indicate inefficiency & increase borrowing for the firm. The reason of Singer increase operating

cycle is gradual increase in inventory period & increase in account receivable period.

3.2.4 Cash Cycle:In general, the time between cash disbursement and cash collection. In net working capital

management, it can be thought of as the operating cycle less the accounts payable payment

period.

Cash Cycle= Operating CycleAccounts Payable Period

Particulars 2008 2009 2010

Cash Coversion Cycle 339 772 641

The analysis

339

772

641

0

100

200

300

400

500

600

700

800900

2008 2009 2010

Cash Conversion Cycle

Cash Conversion Cycle
http://financial-dictionary.thefreedictionary.com/Cashhttp://financial-dictionary.thefreedictionary.com/Collectionhttp://financial-dictionary.thefreedictionary.com/Nethttp://financial-dictionary.thefreedictionary.com/Working+capital+managementhttp://financial-dictionary.thefreedictionary.com/Working+capital+managementhttp://financial-dictionary.thefreedictionary.com/Business+cyclehttp://financial-dictionary.thefreedictionary.com/Accounts+payablehttp://financial-dictionary.thefreedictionary.com/Accounts+payablehttp://financial-dictionary.thefreedictionary.com/Business+cyclehttp://financial-dictionary.thefreedictionary.com/Working+capital+managementhttp://financial-dictionary.thefreedictionary.com/Working+capital+managementhttp://financial-dictionary.thefreedictionary.com/Nethttp://financial-dictionary.thefreedictionary.com/Collectionhttp://financial-dictionary.thefreedictionary.com/Cash


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3.3 Chapter-3: Inventory Management:Inventory management is primarily about specifying the shape and percentage of stocked goods. It is

required at different locations within a facility or within many locations of a supply network to precede

the regular and planned course of production and stock of materials.

The scope of inventory management concerns the fine lines between replenishment lead time, carrying

costs of inventory, asset management, inventory forecasting, inventory valuation, inventory visibility,

future inventory price forecasting, physical inventory, available physical space for inventory, quality

management, replenishment, returns and defective goods, and demand forecasting. Balancing these

competing requirements leads to optimal inventory levels, which is an on-going process as the business

needs shift and react to the wider environment.

Inventory management involves a retailer seeking to acquire and maintain a proper merchandise

assortment while ordering, shipping, handling, and related costs are kept in check. It also involves

systems and processes that identify inventory requirements, set targets, provide replenishment techniques,

report actual and projected inventory status and handle all functions related to the tracking and

management of material. This would include the monitoring of material moved into and out of stockroom

locations and the reconciling of the inventory balances.

3.3.1 Inventory Management Technique:

Inventory is defined as the stock of any item or resource used in an organization. An inventory

system is the set of policies an controls that monitors levels of inventory and determines (a) what

levels should be maintained, (b) when stock should be replenished, and (c) how large orders

should be.

In its complete scope, inventory can include inputs such as human, financial, energy, equipment,

and physical items such as raw materials; outputs such as parts, components, and finished

goods; and interim stages of the process, such as partially finished goods or work-in-process

(WIP). The choice of which items to include in inventory depends on the organization.

Inventory in Singer exist basically in three forms:

Raw materials,

Work-in-process and

Finished goods.


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But before starting production or at first acquisition of raw materials the company decides how

much to order, select a supplier, negotiating contracts, place the order, receive the order,

transportation system/delivery system. As well as Singer perform other important activities like

how or where the finished goods will store, distribution process of the finished goods, finished

goods transportation mode selection and so on.

Inventory represents goods the company plans to sell its customers. Depending on the nature of

the firms operations, inventories can include raw production materials, work in process, finished

goods, and/or merchandise inventory. The balance in this account is also affected by accounting

decisions.

Accounting standards permit various acceptable inventory measurement methods, including last-

in-first-out (LIFO), first-in-first-out (FIFO), weighted average, and specific identification.

Specific identification has been used most frequently for inventories in which the separate items

are distinct and have a high cost, such as fine jewelry, because the benefit to be gained from

tracking these individual items is high. For lower-cost items in inventory, the value of such

specific tracking is low unless a company is using powerful digital databases that allow detailed

inventory tracking to be readily and cheaply accomplished.

Even if a company uses sophisticated technology to control inventory, the accounting measures

do not have to reflect precise physical flows, as would occur using specific identification. Rather,

the LIFO, FIFO, and weighted average methods refer to assumptions that are made about the

flow of inventory through the company. Using FIFO, the company assumes that the first goods

sold are the oldest and the most recently acquired items remain in inventory on the balance sheet.

Using LIFO, the costs of the oldest inventory are maintained on the balance sheet under the

assumption that the most recently acquired inventory is sold first. The weighted average method

uses average costs over the reporting period to calculate the inventory balance. The effect of

accounting choices on the income statement and balance sheet is presented below:


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3.2.2 Depreciation Method:

Depreciation deals with adjustments that are made to company profits once a month, or once a

year, to account for expenses such as depreciation and amortization. The IRS has a depreciation

table that specifies the life span for various types of business equipment. The most common

methods used of accounting for depreciation are:

Straight-line depreciation = Cost of asset assets years of life.

Double declining balance = Book value of the asset times twice the straight-line rate.

Sum of the years digits is a method of calculating depreciation of an asset that assumeshigher depreciation charges and greater tax benefits in the early years of an asset's life.

MACRS (Modified Asset Cost Recovery System) is the new accelerated cost recoverysystem, created after the release of the Tax Reform Act of 1986, which allows for greater

accelerated depreciation over longer time periods. Faster acceleration allows individuals

to deduct greater amounts during the first few years of an asset's life.

Singers annual report shows that the depreciation charged on reducing balance method

consistent with the companys depreciation policy. Full years depreciation is charged on fixed

assets in the year of acquisition and no depreciation is charged in the year of disposal. So, Singer

used the straight line method of depreciation.


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From this information, we analyze the annual report and find that the raw materials in hand are valued at

weighted average cost. Finished goods and work in process are valued at lower of cost and net realizable

value and include allocation of production overheads that relate to bringing the inventories to their present

condition and location. On the other hand, the inventories of Singer lower in the previous year than the

newest year. This situation affects on the Income Statement. In the Income Statement, the cost of sales

shows lower in the previous year than the recent year and it affects on the Net Income which is increased

in the recent year than the previous year. This situation results that, Singer used the FIFO technique. The

full abbreviation of FIFO is First In First Out and Singer used this Inventory Management Technique for

increasing their profit every year.


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3.4 Chapter-4: Credit Management:3.4.3 Credit Scoring:

3.4.3.1

Capital: Total Amount of Capital:

Particulars 2007 2008 2009 2010

Total Shareholder's Equity & liability 2293322340 2680331508 2189382294 4119072427

Ratio Analysis:I. Liquidity Ratios:

Liquidity ratios are the first ones to come in the picture. These ratios actually show the

relationship of a firms cash and other current assets to its current liabilities. Two ratios are

discussed under Liquidity ratios. They are:

Current ratio Quick/ Acid Test ratio. Net Working Capital

2293322340

2680331508

2189382294

4119072427

2007 2008 2009 2010

Total Shareholder's Equity & Liabilty

Total Shareholder's Equity & Liabilty


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Current Ratio:

Current Ratio is an indication of a company's ability to meet short-term debt obligations. The

current ratio provides the best single indicator of the extent to which the claims of short term

creditors are covered by assets that are expected to be converted. 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).

If ratio is higher than before, that indicates liquidity also greater. Current Ratio is also known as

Working Capital Ratio.

Current Ratio =

Following table shows the Current ratios of Singer in different years:

Particulars 2007 2008 2009 2010

Current Ratio 1.23 1.31 2.06 6.02

1.23 1.31

2.06

6.02

2007 2008 2009 2010

Current ratio
http://www.investorwords.com/10302/meet.htmlhttp://www.investorwords.com/4563/short_term.htmlhttp://www.investorwords.com/12619/debt_obligations.htmlhttp://www.investorwords.com/12619/debt_obligations.htmlhttp://www.investorwords.com/4563/short_term.htmlhttp://www.investorwords.com/10302/meet.html


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0.52 0.55

0.96

4.27

2007 2008 2009 2010

Quick ratio

Acid test Ratio:

Acid Test ratio is the ratio which is calculated by subtracting the inventory from the current

assets and dividing by the current liabilities. . It is easily converted into cash at turn to their book

values and it also indicates the ability of a company to use its near cash. If ratio is higher than

before, that indicates liquidity also greater. But there is a problem with quick ratio, when quick

ratio goes up and inventory also increases then it brings bad signal for company. Because there is

riskiness for inventory is being obsolete or there will be taken a long time to liquidize the

inventory.

Acid Test Ratio =

Following table shows the Quick/ acid test ratios of Singer in different years:

Particulars 2007 2008 2009 2010

Quick Ratio 0.52 0.55 0.96 4.27


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Net Working Capital:

Cash and short-term assets expected to be converted to cash within a year less short-term

liabilities. Businesses use net working capital to measure cash flow and the ability to service

debts. A positive net working capital indicates that the firm has money in order to maintain or

expand its operations. Net working capital tends not to add much to the business assets, but

helps keep it running on a day-to-day basis.

Net Working Capital= Current AssetCurrent Liability

Following table shows the Net working capital of Singer in different years:

Particulars 2007 2008 2009 2010

Net Working Capital 347522272 68955785 279786197 2480213523

From the analysis of net working capital of Singer Bangladesh we can see that the ratio was

fluctuating all over the four year. But they able to achieve efficiency on net working capital as

there is a increase in 2011. The reason of this increase is significant increase in current asset &

significant decrease in current liability.

34752227268955785 279786197

2480213523

2007 2008 2009 2010

Net Working Capital

Net Working Capital


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Overall Liquidity Position:

1.23 1.31 2.06

6.02

0.52 0.55

0.96

4.27

2007 2008 2009 2010

Liquidity Ratio

Current ratio Quick ratio


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II. Debt Ratios:Debt Management Ratios attempt to measure the firm's use of Financial Leverage and ability to

avoid financial distress in the long run. These ratios are also known as Long-Term Solvency

Ratios.

Debt is called Financial Leverage because the use of debt can improve returns to stockholders in

good years and increase their losses in bad years. Debt generally represents a fixed cost of

financing to a firm. Thus, if the firm can earn more on assets which are financed with debt than

the cost of servicing the debt then these additional earnings will flow through to the stockholders.

Moreover, our tax law favors debt as a source of financing since interest expense is tax

deductible.

With the use of debt also comes the possibility of financial distress and bankruptcy. The amount

of debt that a firm can utilize is dictated to a great extent by the characteristics of the firm's

industry. Firms which are in industries with volatile sales and cash flows cannot utilize debt to

the same extent as firms in industries with stable sales and cash flows. Thus, the optimal mix of

debt for a firm involves a tradeoff between the benefits of leverage and possibility of financial

distress. Below there is some debt management ratio analysis:

Debt to Equity Ratio Debt to Total Asset Ratio Coverage Ratio Average Collection Period Days in Payable Days in Inventory

Debt Ratio

Debt ratio indicates that what proportion of debt a company has relative to its assets. The

measure gives an idea to the leverage of the company along with the potential risks the company

faces in terms of its debt-load. A debt ratio of greater than 1 indicates that a company has more

debt than assets; meanwhile, a debt ratio of less than 1 indicates that a company has more assets
http://www.college-cram.com/study/finance/ratios-of-debt-management/debt-ratio/http://www.college-cram.com/study/finance/ratios-of-debt-management/debt-ratio/


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than debt. Used in conjunction with other measures of financial health, the debt ratio can help

investors determine a company's level of risk. It is calculated by adding up the total debt of the

company divided by the total assets.

Debt to total asset ratio= Total Debt / Total asset

Following table shows the Debt ratios of Singer in different years:

Particulars 2007 2008 2009 2010

Debt to Total Asset Ratio 5.15 3.28 1.03 0.31

Debt to Equity Ratio

The debt to equity ratio indicates how much of a company's financing is provided through debt

as compared to equity. This interactive tutorial walks you through the calculations, including

where Total Assets and Total Liabilities are on the Balance Sheet. The Debt-Equity Ratio is

calculated by dividing Total Debt by Total Owners' Equity.

Debt to equity ratio= Total debt / Total equity

Following table shows the Debt to equity ratios of Singer in different years:
http://www.college-cram.com/study/finance/ratios-of-debt-management/debt-to-equity-ratio/http://www.college-cram.com/study/finance/ratios-of-debt-management/debt-to-equity-ratio/


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Particulars 2007 2008 2009 2010

Debt to Equity Ratio 0.84 0.77 0.51 0.24

Coverage ratio:

Coverage ratio= (EBIT + Depreciation and amortization) / Interest

Average Collection Period:

The average collection period is refers the average number of days of the company. It maintain

the company to collection its credit policy. It has made good relationships between account

receivable and outstanding payment. It measures the average number of days customers take to

pay their bills to divide by account receivable turnover .The average number of day also indicate

the 360 days .

Average Collection Period= (Account Receivables 360) / Credit Sales

0.84

0.77

0.51

0.24

2007 2008 2009 2010

Debt to total asset ratio


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Following table shows the Average Collection Period of Singer in different years:

Particulars 2007 2008 2009 2010

Average Collection Period 55.45 55.45 55.45 55.45

Days in payable:

Accounts Payable turnover in days is represent that the number of days of a company to pay their

liability to their creditor. If any company number of days is more then the company is stretching

account payable otherwise the company is not holding their account payable. It evaluates the

account payable turnover by exchange into 360 days.

Days in payable= (Account Payable 360) / Cost of Goods Sold

Following table shows the Days in Payable of Singer in different years:

Particulars 2007 2008 2009 2010

Days in Payable 50.62 50.62 50.62 50.62

55.45

56.56

38.30

41.61

0.00

10.00

20.00

30.00

40.00

50.00

60.00

2007 2008 2009 2010

Average collection period

Average collection period


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Days in inventory:

Days in inventory= (Inventory 360) / Cost of Goods Sold

Particulars 2007 2008 2009 2010

Days in Inventory 141.59 141.59 141.59 141.59

50.62

44.87

48.13

53.03

40.00

42.00

44.00

46.00

48.00

50.00

52.00

54.00

2007 2008 2009 2010

AxisTitle

Days in payables

Days in payables

141.59

129.96

81.01

100.99

0.00

20.00

40.00

60.00

80.00

100.00

120.00

140.00

160.00

2007 2008 2009 2010

AxisTitle

Days in inventory

Days in inventory


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III. Profitability Ratios:Profitability is the net result of a number of policies and decisions. Profitability ratios show the

combined effects of liquidity, asset management and debt on operating results.

There are six important profitability ratios that we are going to analyze:

Gross Profit Margin Net Profit Margin Return on Investment Return on Equity

Total Asset Turnover Earning per share

Gross Profit Margin

Gross margin (also called gross profit margin or gross profit rate) is the difference between

revenue and cost before accounting for certain other costs. Generally, it is calculated as the

selling price of an item, less the cost of goods sold (production or acquisition costs,

essentially).The purpose of margins is to determine the value of incremental sales, and to guidepricing and promotion decision.

Margin on sales represents a key factor behind many of the most fundamental business

considerations, including budgets and forecasts. All managers should, and generally do, know

their approximate business margins. Managers differ widely, however, in the assumptions they

use in calculating margins and in the ways they analyze and communicate these important

figures.

Gross Profit Margin = Gross Profit

Gross Turnover


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Following table shows the Gross Profit Margin of Singer in different years:

Particulars 2007 2008 2009 2010

Gross Profit Margin 23% 23% 25% 26%

Net Profit Margin:

Profit margin, net margin, net profit margin or net profit ratio all refer to a measure of

profitability. It is calculated by finding the net profit as a percentage of the revenue. The profit

margin is mostly used for internal comparison. It is difficult to accurately compare the net profit

ratio for different entities. Individual businesses' operating and financing arrangements vary so

much that different entities are bound to have different levels of expenditure, so that comparison

of one with another can have little meaning. A low profit margin indicates a low margin of

safety: higher risk that a decline in sales will erase profits and result in a net loss, or a negative

margin. Profit margin is an indicator of a company's pricing strategies and how well it controls

costs.

23%

23%

25%26%

22%

22%

23%

23%

24%

24%

25%

25%

26%

26%

2007 2008 2009 2010

AxisTitle

Gross profit margin

Gross profit margin


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Following table shows the Net Profit Margin of Singer in different years:

Particulars 2007 2008 2009 2010

Net Profit Margin 3% 4% 9% 45%

Return on Investment (ROI):

A performance measure used to evaluate the efficiency of an investment or to compare the

efficiency of a number of different investments.

Return on investment= Net profit before tax / Shareholders equity

Following shows the Return on investment ratio of Singer in different years:

Particulars 2007 2008 2009 2010Return on Investment 37% 35% 44% 72%

3% 4%

9%

45%

0%

5%

10%

15%

20%

25%

30%35%

40%

45%

50%

2007 2008 2009 2010

AxisTitle

Net profit margin

Net profit margin


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Return on Equity (ROE):

Return on Equity measures the amount of Net Income earned by utilizing each dollar of Total

common equity. It is the most important of the Bottom line ratio. By this, we can find out how

much the shareholders are going to get for their shares. The equation is:

Return on equity= Net income / Total equity

Following shows the Return on Equity ratio of Singer in different years:

Particulars 2007 2008 2009 2010

Return on Equity 27% 24% 37% 68%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2007 2008 2009 2010

Return on Investment (ROI)

2007

2008

2009

2010


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Total Asset Turnover Ratio:

The Total Asset Turnover is similar to fixed asset turnover since both measures a company's

effectiveness in generating sales revenue from investments back into the company. Total Asset

Turnover evaluates the efficiency of managing all of the company's assets. It Indicates amount of

sales generated for every taka worth of assets. It is calculated by dividing sales in taka by assets

in taka.

Total asset turnover= Sales / Total Asset

Following table shows the Total asset turnover ratios of Singer in different years:

Particulars 2007 2008 2009 2010

Total Asset Turnover Ratio 1.49 1.60 1.95 1.14

0%

10%

20%

30%

40%

50%

60%

70%

2007 2008 2009 2010

27% 24%

37%

68%

Return on Equity (ROE)

2007

2008

2009

2010


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Earnings per share (EPS):

Earnings per share (EPS) = Net income available to shareholders / Total number of shares outstanding

0.00

0.20

0.40

0.60

0.80

1.00

1.20

1.40

1.60

1.802.00

2007 2008 2009 2010

1.491.60

1.95

1.14AxisTitle

Total asset turnover ratio

2007

2008

2009

2010

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