Chapter One: Introduction

1.1. Background of the Study

PRAN started its operation in 1980 as processors of fruit and vegetable in Bangladesh and
in 1981 when PRAN and RFL merge together it becomes one of the biggest business groups
in Bangladesh. PRAN RFL is currently one of the most admired food & beverages brand
among the millions of people of Bangladesh and other 77 countries of the world where
PRAN Products are regularly being exported.
PRAN RFL’s comparative advantage as an economy lies in agriculture. They believe the way
to economic prosperity is through agro-business. PRAN stands for “Programmed for Rural
Advancement Nationally” and RFL stands for Rangpur foundry limited.
PRAN RFL is the pioneer in Bangladesh to be involved in contract farming and procures raw
material directly from the farmers and processes through state of the art machinery at our
several factories into hygienically packed food and drinks products. The brand PRAN RFL
has established itself in every category of food and beverage and other industry and can
boost a product range from Juices, Carbonated Drinks, Confectionery, Snacks, and Spices,
cloths and to even dairy products.
Today consumers of PRAN RFL not only value “PRAN RFL” for its authentic refreshing juice
drinks products, but also for its mouthwatering quality confectionery products with high
visual appeal and exciting texture and intend to expand their presence to every corner of
the world and strive to make “PRAN RFL” a truly international brand to be recognized
globally.
1.2. Objectives of the Study
The broad objectives of this study are to find out financial system of PRAN group. The
specific objectives of this study are shown below:
 To identify the present financial system of PRAN group in Bangladesh.
 To analyze the present problems in operating marketing function of PRAN group
 To analysis the opinion of the participants involving operating marketing function of
PRAN group.
 SWOT analysis and future prospects of PRAN group.
 To prescribe appropriate recommendation and suggestion to overcome existing
problems of PRAN Group.
Specially, the above objectives of this study are to know the way by which we can take best
decision regarding its product, price, distribution, and promotional activities with the
Marketing and Financial environment.
1.3. Scope of Study
The report is descriptive in nature. The study covers only various functional areas of Human
Resource Department. No attempt is to perform detailed analysis effectiveness of the
department. The findings are strictly based on the information provided by respective
personnel. The concentration is on the presentation of the facts as discovered.
1.4. Methodology of the Study
I have collected necessary information from Secondary sources-
 Annual report of PRAN Group
 A brief on staff of PRAN Group
 Various document of the company
 Website of PRAN Group
1.5. Limitations of the Study
Term Paper program is a one kind of procedural program. There are involved various
factors such as time/cost/information etc. So I have to face some problem to working this
study. Mainly I have faced few problems these so much important of my study. The
companies officer is not provided sufficient current information such as information on
company existing market share, industries demands, sales volume of competitors, accurate
financial statement, cash in flow statement, rough behaviors of some employees etc. When
I have survey sample wholesalers, retailers and customers then they have not cooperation
with me.
After also I have some personal limitations such as money problem, time problem, lack of
available previous research materials due to insufficient knowledge about this research
fields through above limitation are exist. I have tried my best to overcome these limitations
in this study.
 Chapter Two: Data Analysis
2.1. Definition of Financial Statement
A financial statement (or financial report) is a formal record of the financial activities and
position of a business, person, or other entity. Relevant financial information is presented
in a structured manner and in a form easy to understand.
2.2. Users of Financial Statements
Financial statements are intended to be understandable by readers who have “a
reasonable knowledge of business and economic activities and accounting and who are
willing to study the information diligently.”
There are different kinds of users of financial statements. The users of financial statements
may be inside or outside the business.
The users of financial statements use financial statements for a large variety of business
purposes and their ability to understand and analyze financial statements helps them to
succeed in the business world.
2.3. Classification of Users of Financial Statements:
The financial statements are used by different categories of people for different purposes.
The various users of financial statements are classified and detailed as follows:
2.3.1. Internal Users:
The internal users of financial statements are individuals who have direct bearing
with the organization. They may include:
Managers and Owners: For the smooth operation of the organization, the
managers and owners need the financial reports essential to make business
decisions. So as to provide a more comprehensive view of the financial position of
an organization, financial analysis is performed with the information supplied in
the financial statements. The financial statement is used to formulate contractual
terms between the company and other organizations.
A variable of the financial statement like the current debt to equity ratio is
important in deciding the amount of long term capital that would be required to be
raised. The financial statements of other companies can also provide investment
solutions to different companies. Sometimes it becomes difficult to decide the right
field in which financial resources may be channelized. In such situations the
financial statements of other companies provide the appropriate guideline.
Employees: The financial reports or the financial statements are of immense use to
the employees of the company for making collective bargaining agreements. Such
statements are used for discussing matters of promotion, rankings and salary hike.
 2.3.2. External Users:
The external users comprise of:
1. Institutional Investors: The external users of financial statements are
basically the investors who use the financial statements to assess the
financial strength of a company. This would help them to make logical
investment decisions.
2. Financial Institutions: The users of financial statements are also the
different financial institutions like banks and other lending institutions
who decide whether to help the company with working capital or to
issue debt security to it.
3. Government: The financial statements of different companies are also
used by the government to analyze whether the tax paid by them is
accurate and is in line with their financial strength.
4. Vendors: The vendors who extend credit to a business require financial
statements to assess the creditworthiness of the business.
5. General Mass and Media: The common people as well as media also
make part of the users of financial statements.
2.4. Brief List of Users of Financial Statements:
 Existing equity investors and lenders, to monitor their investments and to evaluate
the performance of management.
 Prospective equity investors and lenders, to decide whether or not to invest.
 Investment analysts, money managers, and stockbrokers, to make buy/sell/hold
recommendations to their clients.
 Rating agencies (such as Moody’s, Standard & Poor’s, and Dun & Bradstreet), to
assign credit ratings.
 Competitors, to benchmark their own financial results.
 Potential competitors, to assess how profitable it may be to enter an industry.
Financial statements show the financial status of your company. Monitoring the financial
health of your business can make the difference between failure and success. For example,
properly scrutinizing financial statements will stop you from spending money that you do
not have and also let you know when you can deploy funds to take your business to the
next level.
 Financial Statement for the year of 2012, 2013 and 2014
Balance Sheet

2012 2013 2014

Assets:
Non-Current Assets:
Property, Plant & Equipment 360436499 334977311 341808493
Current Assets 777882302 798192332 754101724
Inventories 534462767 549659858 515560213
Accounts Receivable 59516831 58104684 74962348
Advance, Deposits & Prepayments 146045134 166052772 147697841
Cash & Cash Equivalents 37857570 24375018 15881322
Total Assets: 1916201103 1931361975 1850011941
SHAREHOLDERS EQUITY AND LIABILITES:
Shareholders’ equity: 426965832 457103264 487066242
Share Capital 80000000 80000000 80000000
Share Premium 40000000 40000000 40000000
Reserve & Surplus 306965832 337103264 16068572
Long Term Loans-Secured 113025000 85525000 42707500
Deferred Tax liability 27912119 25141857 24897012
Current Liabilities: 570415850 565536787 541239463
Short Term Bank Loans 433509429 407590404 417371252
Long Term loans- Current Portions 37675000 42762500 42707500
Liabilities for Goods 3386997 1753704 1752991
Liabilities for Expenses 8092634 9874064 12608338
Liabilities for Other Finance 26848332 27794906 26038165
TOTAL SHAREHOLDERS EQUITYS AND
LIABILITIES 1916201103 1931361975 1850011941

Financial Statement for the year of 2012, 2013 and 2014

Income Statement
2012 2013 2014
Sales 1479083463 1554446836 1727217669

Cost of Goods Sold 1151350648 1208797483 1353202996

Gross Profit 327732815 345649353 374014673

Expenses: 257636014 275027974 299735993

 Administrative & Selling Expenses 122098082 23644274 26784229

Marketing Expenses 46218058 50006089 80402065

Selling & Distribution Expenses 53547350 56709486 69405045

Financial Expenses 135537932 144668125 123144654

Operating Profit 70096801 70621379 74278680

Other Income 445290 584920 36912

Contribution to Worker's Participation & Welfare
Funds 3504840 3560315 3535322

Profit Before Taxation 67037251 67645984 70706446

Provision for Income Tax 14819644 12816085 15282320

Current Tax 15775841 16913843 15527165

Deferred Tax 956197 4097758 244845

Profit After Taxation 52217607 54829900 55424126

2.5. Horizontal Analysis:
Horizontal Analysis is a technique of studying several financial statements (Balance
Sheet & Income Statement) over a series of years. In this analysis the trend percentages
are calculated for each item by taking the figure of that item for the base year taken as
100. Generally, the first year is taken as a base year. This analysis is done to see the
upward or downward trend of the financial statements throughout five different years.
2.5.1. Horizontal Analysis of Income Statement:
The Horizontal Analysis of income statement shows the analysis on the different
periods of the income statement assuming one year as base. The trend of
increasing or decreasing in the items of income statement is analyzed.

Income Statement
For the Year of 2012 & For the Year of 2013 &
Horizontal Analysis 2013 2014
Amount Percent Amount Percent
Sales 75363373 5.10% 172770833 11.11%
Cost of Goods Sold 57446835 4.99% 144405513 11.95%
Gross Profit 17916538 5.47% 28365320 8.21%
Expenses: 17391960 6.75% 24708019 8.98%
Administrative & Selling
Expenses -98453808 -80.64% 3139955 13.28%
 Marketing Expenses 3788031 8.20% 30395976 60.78%
Selling & Distribution Expenses 3162136 5.91% 12695559 22.39%
Financial Expenses 9130193 6.74% -21523471 -14.88%
Operating Profit 524578 0.75% 3657301 5.18%
Other Income 139630 31.36% -548008 -93.69%
Contribution to Worker's
Participation & Welfare Funds 55475 1.58% -24993 -0.70%
Profit Before Taxation 608733 0.91% 3060462 4.52%
Provision for Income Tax -2003559 -13.52% 2466235 19.24%
Current Tax 1138002 7.21% -1386678 -8.20%
Deferred Tax 3141561 328.55% -3852913 -94.02%
Profit After Taxation 2612293 5.00% 594226 1.08%

2.5.2. Formula for Horizontal Analysis of Income Statement:

Amount= Last year – Previous year
Percent = Amount/base year

2.5.3. Horizontal Analysis of Balance Sheet:

The different periods of balance sheet are compared with base year in order to
know the fluctuation of the items based on one year.

For the year of 2012 & For the year of 2013 &
2013 2014
Amount Percent Amount Percent
Assets:
Non-Curren Assets:
Property, Plant & Equipment - -7.06% 6831182 2.04%
 25459188
Current Assets 20310030 2.61% -44090608 -5.52%
Inventories 15197091 2.84% -34099645 -6.20%
Accounts Receivable -1412147 -2.37% 16857664 29.01%
Advance, Deposits &
Prepayments 20007638 13.70% -18354931 -11.05%
-
Cash & Cash Equivalents 13482552 -35.61% -8493696 -34.85%
Total Assets: 15160872 0.79% -81350034 -4.21%
SHAREHOLDERS EQUITY AND
LIABILITES:
Shareholders’ equity: 30137432 7.06% 29962978 6.55%
Share Capital 0 0.00% 0 0.00%
Share Premium 0 0.00% 0 0.00%
-
32103469
Reserve & Surplus 30137432 9.82% 2 -95.23%
-
Long Term Loans-Secured 27500000 -24.33% -42817500 -50.06%
Deferred Tax liability -2770262 -9.92% -244845 -0.97%
Current Liabilities: -4879063 -0.86% -24297324 -4.30%
-
Short Term Bank Loans 25919025 -5.98% 9780848 2.40%
Long Term loans- Current
Portions 5087500 13.50% -55000 -0.13%
Liabilities for Goods -1633293 -48.22% -713 -0.04%
Liabilities for Expenses 1781430 22.01% 2734274 27.69%
Liabilities for Other Finance 946574 3.53% -1756741 -6.32%
TOTAL SHAREHOLDERS EQUITYS
AND LIABILITIES 15160872 0.79% -81350034 -4.21%

2.5.4. Formula for Horizontal Analysis of Balance Sheet:

Amount= Last year – Previous year
Percent = Amount/base year

2.6. Vertical Balance Sheet:

A statement where balance Sheet items are expressed in the ratio of each asset to total
assets and the ratio of each liability is expressed in the ratio of total liabilities in called
Vertical Balance Sheet.
Percent Percent Percent
For the year of For the For the year of
 year of
2012 2013 2014
Assets:
Non-Current Assets:
Property, Plant & Equipment 18.81% 17.34% 18.48%
Current Assets 40.60% 41.33% 40.76%
Inventories 27.89% 28.46% 27.87%
Accounts Receivable 3.11% 3.01% 4.05%
Advance, Deposits & Prepayments 7.62% 8.60% 7.98%
Cash & Cash Equivalents 1.98% 1.26% 0.86%
Total Assets: 100.00% 100.00% 100.00%
SHAREHOLDERS EQUITY AND
LIABILITES:
Shareholders’ equity: 22.28% 23.67% 26.33%
Share Capital 4.17% 4.14% 4.32%
Share Premium 2.09% 2.07% 2.16%
Reserve & Surplus 16.02% 17.45% 0.87%
Long Term Loans-Secured 5.90% 4.43% 2.31%
Deferred Tax liability 1.46% 1.30% 1.35%
Current Liabilities: 29.77% 29.28% 29.26%
Short Term Bank Loans 22.62% 21.10% 22.56%
Long Term loans- Current Portions 1.97% 2.21% 2.31%
Liabilities for Goods 0.18% 0.09% 0.09%
Liabilities for Expenses 0.42% 0.51% 0.68%
Liabilities for Other Finance 1.40% 1.44% 1.41%
TOTAL SHAREHOLDERS EQUITYS AND
LIABILITIES 100.00% 100.00% 100.00%

2.6.1. Formulas:
Vertical Analysis:

Currnet Assets
Total Assets
Shareholders_Equity_and_Liabilities
Total_Shareholders_Equity_and_Liabilities

2.6.2. Vertical Analysis between Current Assets & Total Assets

 The Vertical statements (Balance Sheet and Income Statement) are shown in
analytical percentages. The figures of these statements are shown as percentages
of total assets, total liabilities and total sales respectively.
2.6.3. Vertical Income statement:
The items in income statement can be shown as percentages of Net sales to show
the relations of each item of sales.
Interpretation:
 The sale and operating profit have increased in absolute value as well as in
terms of percentage of net sales.
 The percentages of income are more than percentage of expenditure with
respect to its net sales, so the operating profit (PBDIT) is positive
throughout the years.
 The net profit of the company is negative in the year 2012 & 2014 due to
heavy increased in percentage of exceptional items.
Formulas:
Current Ratio =
Quick Ratio =
Gross Margin Ratio =
Net Profit Margin Ratio =
Inventory Turnover Ratio =
Return on Asset Ratio =
Return on Investment =

2.5.2. Return or Profitability:

 Return on Assets (ROA): The Return on Assets ratio is calculated from
Appendix A-1 to A-2. The highest value of the ratio is 4.58% in year 2015
and lowest is 3.88% in year 2014. So, the performance of 2015 is so good
than 2014.
 Return on Equity (ROE): The Return on Equity ratio is calculated from
Appendix A-1 to A-2. The highest value of the ratio is 12.23% in year 2015
and lowest is 11.33% in year 2014. The performance of PRAN was good in
last year.
 Net Profit Margin: The Net Profit Margin ratio is calculated from Appendix
A-1 to A-2. It shows the net profitability of two years. In there, PRAN shows
the best performance in year 2015. The highest value of the ratio is 3.53%
in year 2015 and the worst value of PRAN was 3.45% in year 2014.
  Gross Profit Margin: The Gross profit margin ratio is calculated from
Appendix A-1 to A-2. It shows the net profitability of two years. In there,
PRAN shows the best performance in year 2015. The highest value of the
ratio is 22.16% in year 2015 and the worst value of PRAN was 21.80% in
year 2014.
2.5.3. Liquidity:
Current Ratio: Current ratio is calculated from Appendix A-1 to A-2 PRAN is in the
best position in year 2015 and the value is 1.36%. But the performance of year
2014 was poor than year 2015.
2.5.4. Debt Management:
Debt Ratio: Debt ratio is calculated from Appendix A-1 to A-2. It shows PRAN has
the more dependency in year 2015 which value is 60.03% and the value of year
2014 was 63.31% 
2.5.5. Asset Turnover Ratio:
Asset Turnover ratio is calculated from Appendix A-1 to A-2 PRAN is in the best
position in year 2015 and the value is 1.30 times. The value of year 2014 was 1.12
times which is poor than year 2015.

2.5.6. Equity Ratio:

Equity ratio is calculated from Appendix A-1 to A-2. PRAN is in the best position in
year 2015 and the value is 65.27%. The value of year 2014 was 56.86% which is
poor than year 2015.

2.5.7. Inventory Turnover Ratio:

Inventory Turnover ratio is calculated from Appendix A-1 to A-2. PRAN is in the
best position in year 2015 and the value is 2.77 times. The value of year 2014 was
2.55 times which is poor than year 2015.
 Chapter Three: Data Findings
3.1. Findings:
 They provide the medical care center for the workers in every factory, which
contains one doctor and supervisor. Their medical care center doesn’t supply any
drug for the employees.
 They keep safety and record book as well as log book for machinery.
 They provide a well structure and well-furnished canteen. They do not have any
managing committee regarding the canteen. There is also lack of supervise the
canteen. For this reason, sometimes the employee’s supper for lack of hygienic
food.
 They have adequate washing facilities in the factories, which are in the Dhaka city.
But the factories which are not in the city of Dhaka don’t have enough washing
facility for the workers.
  Some of their factories have launch room but some of the factories have no launch
room. Where there is no any launch room the canteen room is used as a launch
room.
 They have not any kind of rest room in any factory. So, that the employees use the
canteen as a rest room. Under this circumstances, the canteen sometime turns into
a very crowded place.
 They do not provide any kind of room for the worker’s children and it is restricted
to bring the children in the factory.
 They provide three months’ maternity leave for each and every women employee.
Moreover, with in this period they give the salary of the employee by cheque.
 There is no other benefit for the women workers in the time of delivery and after
the time of delivery.

Chapter Four: Recommendation & Conclusion

4.1. Recommendation
From the above discussion, we have come to know that PRAN-RFL group always tries to
follow the Bangladesh Labor Act, 2006. But not in every sector they are succeed. There are
some short comings. They have to try to minimize it. They are as follows-
 In first-aid appliances, they have to try to supply some medicines for the employees
so that the employees can have it easily in the time of emergency.
 The factories, which are located outside of Dhaka city, do not have enough facilities
for washing. They should try to provide the washing facilities towards the factory,
which are not in the Dhaka city.
  They do not have any managing committee for the canteen. They should try to build
up a managing committee for the canteen.
 They don’t have any separate launch room in several factories. They should try to
build up launch rooms in each and every factory.
 There is no separate entity of rest room in PRAN-RFL group. They should build up
this concept for the welfare of the employees.
 In this modern time, more and more female workers are coming to the work. So,
they must try to build rooms for children.
 Their maternity facility is not enough for the women employees. They should try to
give some additional benefit in the time of delivery to the women employees.
4.2. Conclusion
No ideology, no ism, no political theory can win a greater output with less effort from a
given complex of human and material resources, without sound management.
Although this firm is in a very good position in the market, we would just make a
suggestion that, they should offer more and more differentiated products through
segmentation of the current market in more details. Of course, the economic capability
of target customers must be carefully analyzed. Managers can communicate more and
make survey to reach closer to the customers and create market offerings which are
both for the betterment for the firm as well as for the society. This practical experience
gathered from observing these established company of Bangladesh has just helped us
to reach to a conclusion that – What nurtured the success of PRAN-RFL group?

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