Chapter – 1 Introduction & Methodology 1.1 Introduction of the Company Bata Bangladesh is affiliated to the Bata Shoe Organization, the world's largest footwear manufacturing and marketing organization. BATA was started its operation in Bangladesh in 1962, Incorporation in Bangladesh in 1972. Currently, Bata operates 2 manufacturing plant Tongi and Dhamrai, Bata is producing around 110,000 pairs of shoes daily. It has a modern tannery with the latest technological facilities to process 5 million square feet of leather yearly. The Tannery is equipped with a high-tech effluent treatment plant ensuring a pollution free environment for both workers and locality where we operate. Bata sells all kinds of footwear which are classified in alignment with market sectors as follows: Domestic market – under the trademarks of “Bata”, “Power”, “Weinbrenner” “Bubble gummers”, “North Star” and “Marie Claire”, through a countywide distribution network comprising retail stores, DSPs and independent dealers. Overseas market – under the trademarks of its customers, and also markets its own brands to sister companies and the . 1.2 Objective of the Study The Basic objective is to analyze the business strategy of Bata Shoe Company (Bangladesh) Ltd based on company’s financial report performance of previous years, as well as do accounting analysis to identify how financial reports are dependent & manipulated by different accounting policies, also evaluating Company’s future performance with the help of prospective analysis.
Ratio analysis is the calculation and comparison of ratios which are derived from the information in a company's financial statements. The level and historical trends of these ratios can be used to make inferences about a company's financial condition, its operations and attractiveness as an investment. To evaluate a firm’s financial condition and performance, the financial analyst usually performs analysis on various aspects to find out the financial health of the firm; among which ratio analysis is one of the most important and commonly used methods. In this study various ratio analyses will be done to understand the financial condition of the company and to compare this condition with its rival firm. The financial ratios can be analyzed based on three criteria: Benchmark Analysis: A benchmark is a point of reference with which the financial ratios of the specific company can be compared. For example, the current ratio of 2:1 is considered to be ideal for a company and it is assumed to be the benchmark. Time Series Analysis: It involves comparing a present ratio with past and expected future ratios for the company. For instance, the current ratio (the ratio of current assets to current liabilities) for the present year could be compared with the current ratio for the previous years. When financial ratios are arranged over a period of years, the analyst can study the composition of change and determine whether there has been an improvement or deterioration in the firm’s financial condition and performance over time. Cross Section Analysis: The third method of comparison involves comparing the ratios of one with those of similar firms or with industry averages at the same point in time. Such a comparison gives insight into the relative financial condition and performance of the firm. It also helps us to identify any significant deviation from any applicable industry average. In this paper, ratios of Bata Shoe Company (Bangladesh) Ltd and Apexadelchi Footwear Ltd are calculated and analyzed based on bench mark, time series and cross sectional analysis. 2.3.1 Liquidity Ratio