Beximco Textile's Working Capital Management

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Executive Summary
This report is presenting the overall working capital management of BeximcoTextiles Limited. In this report all of the information is collected from secondary data. As, Primary data was too much confidential, the company didn’t disclose it to us. In this report the terms and conditions that we have learned in FIN 406 has implemented. In this report financial analysis and recommendations are given.

Introduction part

Company overview
The Beximco Textiles Ltd. was incorporated in Bangladesh as a Public Ltd. Company with limited liability on 1994 & commenced commercial operation in 1995. The project was set up as a state of the art fabric weaving, dyeing & finishing facilities for production of high quality shirting fabric, unique wrinkle free fabric (Cortex-2000, cotra DP 3.5 +) & other fabrics. BTL has an installed capacity of 288 high-speed air-jet looms in its weaving section & a high-tech dyeing & finishing section with a capacity of 100,000 yards of finished fabric per day. It is a member enterprise of the Beximco conglomerate. During the year the company produced and sold high quality shirting and other fabric and bringing forth all the latest in hard and soft technologies in weaving and finishing of fabric. It is the most modern composite mill in the region. They have leveraged Bangladesh's labor cost advantage & export competitiveness to the maximum. Beximco Textiles Limited engages in manufacturing and marketing yarn, woven, knit, and denim fabrics in Bangladesh. The company offers yarn products, such as count, fiber, CVC, and TC yarn products; fabric products comprising solid dyed, yarn dyed, finishing, dobby designs, and yarn count products; and denim products. It also provides special yarn products consisting of plied yarn, fancy yarn, slub yarn, core spun, multi count, and multi twist products, as well as wrinkle-free products. The company was formerly known as Padma Textile Mills Limited and changed its name to Beximco Textiles Limited in 2006.

Mission

Each of our activities must benefit and add value to the common wealth of our society. We firmly believe that, in the final analysis we are accountable to each of the constituents with whom we interact; namely: our employees, our customers, our business associates, our fellow citizens and our shareholders.

Purpose of this Study:

This study has been designed in such a way that students are going to learn the in-depth knowledge about a company’s financial condition. The main purpose of this report is to reinforce the concept of financial policy of Beximco Textiles ltd. along with its all working capital ratios, short-term financing and long-term financing. etc. Overall, this study will help a finance student to familiar with the practical scenario.

Limitation:

The report is limited to the data that are available in the annual reports and in the website related to Beximco textiles. Primary data was not available as they didn’t disclose. Finally, we have used our own judgments in many ways from our Business Finance courses in order to simplify the research, evaluate, calculation and advising.

Financial Analysis

Working Capital of Beximco Textiles ltd.:

Working capital is defined as current (expected to be consumed or converted into cash within one year) assets minus current liabilities. Working capital turnover indicates how efficiently the company generates revenue with its working capital.

Year| Current Assets| Current Liabilities| Working Capital of particular year| 2006| 7572906611| 5961381357| 1605525254|
2007| 7881489387| 8058498925| -177009538|
2008| 7230982538| 7906937639| -675955101|
2009| 8677166758| 4834823994| 3842342764|
2010| 9031547621| 6944110703| 2087436918|

Inventory:

Inventories are carried at the lower of cost and net realizable value as prescribed by IAS 2:Inventories, cost is determined on weighted...
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