Assignment

Course Title: Working capital Management

Course Code: FIN-408

Submitted To
Sabrina Akhter

Assistant Professor
Department of Business Administration
Daffodil International University

Submitted By
Name Id
Emon Kagozi 171-11-5444
Md. Mahafuj Al Sojib 171-11-5440

Department of Business Administration

Daffodil International University
 Contents

➢ About Linde Bangladesh Ltd

➢ Corporate History

➢ Their budget in Bangladesh

➢ Linde Bd milestones at a glance

➢ Shareholding pattern

➢ Financial statement analysis

➢ Linde Bangladesh Ltd current asset calculation

➢ Ratio analysis

➢ Working capital analysis

 About Linde Bangladesh Limited

As a pioneer in industrial gases in Bangladesh, we have a long history and proud heritage - our roots go
back to 1950’s, even before the independence in 1971.With a modest appearance, afterwards, at the
beginning, Linde Bangladesh's products are now part and parcel of all the industrial and economic
activities of the country. Today, the turnover of the company has exceeded BDT 4.94 billion.

Linde Bangladesh Limited is a member of the Linde Group that has been present in Bangladesh for over
50 years with continuous expansion in operations and business. As a pioneer multinational company in
the gases business, Linde Bangladesh has 3 major locations / installations at Tejgaon, Rupganj and
Shitalpur. Besides, it has 18 sales centers spread throughout the country serving a customer base of over
35,000. The company is currently capable of producing 80 tons of liquid ASU gases per day and 23,100 MT
of Welding Electrodes per year. Its product folio and services include liquid and gaseous Oxygen and
Nitrogen, Argon, Acetylene, Carbon Dioxide, Dry Ice, Refrigerant Gases, Lamp gas and other gas mixtures,
Medical Oxygen, Nitrous Oxide, Entonox, medical equipment and accessories, Welding Electrodes, gas
and arc welding equipment’s and accessories, welding training and services. Linde Bangladesh Limited is
committed to quality of its product & services. Our motto is to ensure optimum conditions in health,
safety and the environment for its employees, customers and stakeholders.

Corporate History

The Linde Group has a history of over 130 years built on a heritage of innovation with a strong focus on
technology. The company’s founder, Carl von Linde, invented refrigeration technology and pioneered a
process of air separation. Today, we are a global market leader in gases and engineering solutions.

Their bequest in Bangladesh:

Linde Bangladesh Limited, a member of the Linde Group, has been contributing towards the development
of the nation as a silent partner. A strong in–built culture with work values reinforced and developed Linde
Bangladesh over the years which are reflected in the performance of its employees for more than 50 years
with continuous expansion in operations and business.

We sell our products to more than 35000 customers from a wide spectrum of industries running from
chemicals and petrochemicals to steel. Our team of around 400 trained, motivated and professional
members manages 24-hour operations at three major locations across the country to support our
customers. In Linde Bangladesh Limited we are committed to the quality of our product & services. Our
motto is to ensure optimum conditions in health, safety and the environment for employees, customers
and stakeholders.
Linde Bd milestones at a glance:

1958 Pakistan Oxygen Limited.

1971 Renamed as to Bangladesh Oxygen Limited (BOL).

Incorporated in the joint stock companies and received government approval as the first
1973 full-fledged “Company” of the newly formed country.

19176 First CO2 plant was introduced.

1979 Welding Training Centre started it’s journey

The company changed it’s name from “Bangladesh Oxygen Limited” to “BOC Bangladesh
1995 Limited”.

1997 Rupgonj ASU Plant was commissioned.

1999 Shitalpur plant was bought over with 20TPD production facility.

2000 ASPEN and LPG Bottling plant was commissioned.

2004 Moved into newly built Corporate Office.

2006 Acquisitioned by the Linde Group.

2010 Achieved BDT 100 Crore Profit.

 SHAREHOLDING PATTERN
Public Foreign Govt Institute Sponsor Director

11%
0%

29%
60%

Financial statement analysis

The financial statements of a company record important financial data on every aspect of a business’s
activities. As such they can be evaluated on the basis of past, current, and projected performance. In
general, financial statements are centered around generally accepted accounting principles (GAAP) in the
U.S. These principles require a company to create and maintain three main financial statements: the
balance sheet, the income statement, and the cash flow statement. Several techniques are commonly
used as part of financial statement analysis. Three of the most important techniques include horizontal
analysis, vertical analysis, and ratio analysis. Horizontal analysis compares data horizontally, by analyzing
values of line items across two or more years. Vertical analysis looks at the vertical affects line items have
on other parts of the business and also the business’s proportions. Ratio analysis uses important ratio
metrics to calculate statistical relationships.

Financial statements are maintained by companies daily and used internally for business management. In
general, both internal and external stakeholders use the same corporate finance methodologies for
maintaining business activities and evaluating overall financial performance. When doing comprehensive
financial statement analysis, analysts typically use multiple years of data to facilitate horizontal analysis.
Each financial statement is also analyzed with vertical analysis to understand how different categories of
the statement are influencing results. Finally, ratio analysis can be used to isolate some performance
metrics in each statement and also bring together data points across statements collectively.
 Linde Bangladesh Ltd current asset calculation

Calculation of total current asset

Particulars 2016 2017 2018 2019
lnventories 728622 683575 842895 906550
Trade and other receivables 487824 608505 618969 703793
Advances, dep0sits and prepayments 217181 180886 224415 148091
lnvestment 10299 10535 10753 970471
Cash and cash equivalents 1391203 1132356 1604221 840462
Total Current Asset 2835129 2615857 3301253 3569367
Quick asset 2106507 1932282 2458358 2662817

Calculation of Various Ratios for the Analysis of Working Capital and Its Management in OCM

before and After Acquisition:

Particulars 2016 2017 2018 2019

Quick asset 2106507 1932282 2458358 2662817
Sales Income 4,270,585 4,941,799 3843563 4,226,116
operating Expenses 743,400 933,829 658827 646131
Cash turnover ration 3.070 4.364 2.396 5.028
Inventory Turnover ratio 5.861 7.229 4.560 4.662
Debtors Turnover ratio 8.754 8.121 6.210 6.005
GWCTR 1.506 1.889 1.164 1.184
operating Expenses/CA 0.262 0.357 0.200 0.181
4000000
3500000
3000000
2500000
2000000
1500000
1000000
500000
0
lnventories Trade and Advances, lnvestment Cash and cash Total Current Quick asset
other dep0sits and equivalents Asset
receivables prepayments

2016 2017 2018 2019

Linde Bd net working capital (2016 -2019)

Calculation of net working capital

2016 2017 2018 2019
lnventories 728,622 683,575 842,895 906,550
Trade and other receivables 487,824 608,505 618,969 703,793
Advances, dep0sits and prepayments 217181 180,886 224,415 148,091
lnvestment 10,299 10,535 10,753 970,471
Cash and cash equivalents 1,391,203 1,132,356 1,604,221 840,462
Total Current Asset 2,835,129 2,615,857 3,301,253 3,569,367
Trade and other payables 1,469,690 1,411,322 1,413,550 1,411 ,424
Provision for expenses 136,055 161,814 145,717 17 5,403
Current tax liabilities 218,584 86,262 190382
Total Current Liabilities 1,824,329 1,573,136 1,645,529 190,382

Net working capital 1,010,800 1,042,721 1,655,724 3,378,985

 NWC
4000000
3500000
3000000
2500000
2000000
1500000
1000000
500000
0
2016 2017 2018 2019

Total Current Asset Total Current Liabilities Net working capital

Working capital management commonly involves monitoring cash flow, current assets, and current
liabilities through ratio analysis of the key elements of operating expenses, including the working capital
ratio, collection ratio, and inventory turnover ratio. Working capital management helps maintain the
smooth operation of the net operating cycle, also known as the cash conversion cycle (CCC)—the
minimum amount of time required to convert net current assets and liabilities into cash.

Working capital management can improve a company's earnings and profitability through efficient use of
its resources. Management of working capital includes inventory management as well as management of
accounts receivables and accounts payables. The objectives of working capital management, in addition
to ensuring that the company has enough cash to cover its expenses and debt, are minimizing the cost of
money spent on working capital, and maximizing the return on asset investments.