ASSIGNMENT ON THE FINANCIAL ANALYSIS OF

BATA SHOE COMPANY LTD.

Course title: Financial Management
Course code: FIN-202
Semester fall-2016

SUBMITTED TO:
Sabrina Akhter
(Senior Lecturer)
Department of Business Administration
Faculty of Business & Economics

SUBMITTED BY:
Tahmina islam liya
Nurain Amin Tahsin
Hossain Ahamed
Maruf Hossen

152-11-4623
152-11-4630
152-11-4631
152-11-4640

Section- B

Submission date: 10-11-2016

HISTORY OF BATA SHOE COMPANY LTD.

Bata Shoe Company was founded by the famous entrepreneur Mr. Tomas Bata who blew the
wind of change in the footwear industry in 1894. The company was started from Zlin,
Czechoslovakia, now known as the CzechRepublic. From that day onwards Bata Shoe Company
has been the largest manufacturer and marketer of footwear in the world. The global business of
Bata comprises of shoe factories, tanneries, engineering plants, quality control laboratories,
product development and research centers.
Bata has developed a strong distribution channel all over the world through the establishment
approximately 6,300 retail outlets, 10,000 franchise and thousands of depots and dealers. More
than 50,000 people are directly involved in the production and selling of over 300 million pairs
of shoes each year. Bata Shoe Company manages a retail presence in 55 countries, and runs 40
production facilities across 26 countries. Bata international headquarter is located in Switzerland
which was previously located at Toronto, in Canada.

Bata Business
Bata Shoe Organization companies are involved in every facet of the business of shoes.
Throughout the world, Bata services customers from the store sales floor to the factory floor.
Retailing
Bata Shoe Organization companies have built successful retail store concepts to satisfy changing
consumer tastes and needs. Each store features merchandise targeted to different lifestyles and
people. The merchandise ranges from footwear to clothing and goods complementing shoe
offerings. Sensitivity to and satisfaction of customer wants and needs has allowed the Bata Shoe
Organization (BSO) to become a world leader in footwear.
Manufacturing
Tomas Batas revolutionary business concept was to industrialize the shoemaking process of that
day. That type of thinking has been the driving force behind the Bata Shoe Organization success.
The Bata Shoe Organization has been an innovator in the manufacturing of shoes over the years.
Bata personnel have made important advances in DVP (Direct Vulcanization Process), PVC,
athletic footwear production and slush-molded footwear production.
Wholesaling
The Bata Shoe Organization [BSO] enjoys a unique position in the wholesale marketplace.
Global economies of scale enable BSO plants to offer quality products at local prices, with many
are operating at ISO standards. Bata Shoe Organization production facilities are world renowned
for their commitment to quality and customers, and have attracted production contracts from
many international footwear brands.

Brands & Product Development

Throughout the world, the Bata brand distinguishes well-made and well-priced footwear.
Many core articles for Bata branded collections are designed in product development centers
in Italy, the Far East and Canada. Designers and merchandisers in Bata Shoe Organization
companies broaden the collections by developing complementary styles to reflect tastes, budgets
and climates within their own market. Strict quality controls govern the selection of materials
and all production stages.
Business Units of Bata Shoe Company worldwide
Bata is operating business in five business units such as Europe, Asia Pacific, Latin America,
North America, and Africa. Bata announces its worldwide presence through these five business
units.
Bata Shoe Company (Bangladesh) Ltd.
Bata Shoe Organization started its operation in Bangladesh in 1962. The company was
incorporated in 1972. The company is affiliated to the Bata Shoe Company, the largest footwear
manufacturing and marketing organization.
According to Bata Bangladesh website (2010) it is mentioned that currently, Bata Bangladesh
operates 2 manufacturing plants at Tongi and Dhamrai, have production capacity of around
110000 pairs of shoes daily. It has a modem 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 the environment.
Bangladeshs regional headquarter is located in Singapore.
Bata is playing a pivotal role in developing the leather industry of the country. Bata has a firm
commitment to eco-friendly business and a state of the art Effluent Treatment Plant (ETP) has
been set up to provide a pollution free environment for both workers and the locality.
Fashion would never be complete without a well-designed pair of shoes. This marketing insight
has prompted Bata to introduce a number of designers collections for men, women and children.
Internationally renowned brands such as Bata Comfit, Marie Claire, Hush Puppies, Scholl, Nike,
Bubblegummers, Sandak, Weinbrenner and Bfirst are a few names that testify to the momentous
change towards branded shoe marketing in Bangladesh. Specialized shoe categories such as
athletic shoes have been targeted through development of the Power brand. Uncompromising
quality with striking designs have put Bata shoes in a key position to appeal to different
segments of consumers.
Another major change in the Bata business policy is the segmentation of retail outlets according
to profiles of different market segments and the introduction of novel concepts such as Bata City
Stores. These selective outlets, in conjunction with other types of outlets such as Bata Bazar and
Bata Family Stores, are adding a new level of consumer satisfaction. The City Stores incorporate
spacious floor space allowing a comfortable shopping experience, modem interior decor enriched
with novel shelving systems, fittings, fixtures and lighting that can be found in the large retail

shops in the Far East and Europe. Bata has a network of 242 retail outlets located strategically in
different parts of the country. These retail outlets are an integral part of our brand marketing.
This extensive retail network is supplemented by an equally extensive network of depots and
dealers. Bata has 13 Wholesale depots covering Bangladesh. Under these depots 390 RWD
(Registered Wholesale Dealers) and 553 DSP (Dealer Support Program) stores are operating.
Bata Bangladesh has already developed its vision up to 2013 showing significant business
growth as well as increased market share.
One of the critical areas associated with external shareholders and the community at large is the
Corporate Social Responsibility Program of the company. From supporting nationwide sports
sponsorships and disabled persons to addressing environmental concerns, scholarship programs,
charity contributions etc Bata has always supported individuals and communities in need.
Partnerships with other voluntary and charitable organizations are another prominent feature of
Batas corporate social responsibility. Bata, in partnership with CARE, extends assistance to over
two thousand rural women in order to become independent entrepreneurs in the Rajshahi,
Comilla and Chittagong division selling shoes from door to door under its Rural Sales Program.
Since its inception, Bata Shoe Company (Bangladesh) Ltd. has strived towards one goal
customer satisfaction. With the vision of building a worldwide family of satisfied customers and
dedicated workers the legacy of Tomas Bata continues strong and unabated to this day the
tradition is safe. Bata Bangladesh has about 1500 regular and efficient employees and workers,
who are highly committed to uplift the companys performance with high productivity and sales
through maintaining the quality. In recent times Bata Bangladesh has launched more than 180
new designs for different brands in their men, women, children and infant categories. Eventually
they have received excellent responses from their various target groups on the new designs.
Customer service

Personalized service: Qualified and enthusiastic sales associates are engaged who take
customers satisfaction to heart. In many countries customer service goes beyond the
stores with home deliveries, orders made possible via catalogues, the web or even call
centers.

Guaranteed customer satisfaction. In any Bata store in the world they repair, exchange
or refund any products with defects. They also exchange or refund on unworn
merchandise if one changes ones mind. Proof of purchase is required for refunds.

Customer service center. Bata Shoe Company (Bangladesh) Ltd has a customer service
centre and the contact address is: Phone: +8802 9800501-5 Ext: 209

Mission & Vision

Bata Shoe Company has been successfully running for years with a mission and vision at the
heart of all its operations.
Mission

Introduction of a strong shoe line targeted to various market segments to maintain leadership
through increased market share.
Vision
To provide good quality shoes at an affordable price by keeping in mind the comfort that needs
to be there and providing new designs with it.

Management of Bata Shoe Company (Bangladesh) Ltd.

Table: Management of Bata Shoe Company (Bangladesh) Ltd.
Name

Designation

Muhammad Qayyum

Managing Director

Yee Siew NG

Finance Director

M. Habibur Rahman

Head of Human Resource

Minhaz Ahmed Chowdhury

Production Manager

Qayyum Khan Mahbub

Purchase Manager

Ruhul Amin Molla

Non Retail Sales Manager

Carlos Arturo Zuluaga Sanchez

Product Development
Manager

Omar Faisal Chowdhury

Logistic Manager

Bishwajit Roy

Retail Manager

Iraz Hasan Siddiqui

Merchandising Manager

Organogram of Bata Shoe Company (Bangladesh) Ltd.

Brands:

Bata stores carry following shoe brands:

Ambassador
Bata
BFirst
Babby Bubble
Bata Light and Easy
Hush Puppies
Weinbrenner
Marie Claire
Bata Industrial
Bata and I
Nike
Power
North-Star
Bata Comfit
Sandak
Bubble Gummers
Scholl
Pata PataHush Puppies:Hush Puppies is the international brand, Bata uses the
franchising power to supply the product in the Bangladeshi market. The target
customers of this model are rich people. Basically it is an American brand
Weinbrenner:
The weinbrenner shoe line is made up of leather shoes and boots, style in low, mid, and
high cut. Cuts or design are directly fashion, but can include materials which help to
feel comfort in doing outdoor strong works. The shoes are casual in style closures
generally with laces and eyelets, sometimes supplemented with hooks, D-rings and
straps with buckles.

Bata Today

Serves 1 million customers per day

Employs more than 50,000 people
Operates 5000 retail stores
Manages a retail presence in over 70 countries
Runs 27 production facilities across 20 countries

HOSSAIN AHAMED
(152-11-4631)

 Current Ratio:
The current ratio, one of the most commonly cited financial ratio, measures the firms ability
to meet its short-term obligations.

Current Ratio = current asset / current liabilities (2:1)

Current Ratio of Bata Shoe Company Ltd.

2012
1.49

2013
1.62

2014
1.80

2015
1.95

Interpretation: The current ratio of Bata shoe company Ltd. is able to meet the short term
obligations. The companys current assets is greater than the current liabilities. So it should
be acceptable.

Quick Ratio:
The quick ratio is similar to the current ratio except inventory, which is generally the least
liquid current asset.
Quick Ratio = current asset-inventory / current liabilities
Quick Ratio of Bata Shoe Company Ltd.
2012
0.54

2013
0.63

2014
0.68

2015
0.86

Interpretaion : the ideal quick ratio is 1:1. So the quick ratio of Bata shoe company Ltd.
is not good. Because the ratios are lower than 1.

 Inventory Turnover:
Inventory turnover commonly measures the activity, or liquidity of a firms inventory. It
is calculated by following method:
Inventory Turnover: cost of goods sold / inventory (times)
Inventory Turnover of Bata Shoe Company Ltd.
2012
2.50

2013
2.24

2014
2.29

2015
2.25

Interpretation: Bata company has very good inventory control in 2012, 2013, 2014, 2015.
Bata companys turnover is 2.50, 2.24, 2.29, 2.25 times. This means that Bata company sold
2.50 time its inventory during the year.

 Average Collection Period:

The average amount of rime needed to collect accounts receivable. It is useful in
evaluating credit and collect policies. It is arrived by dividing average daily sales into the
accounts receivable.
Average collection period: accounts receivable / average sale per day (days)
Average Collection Period of Bata Shoe Company Ltd.
2012
13.67

2013
20.18

2014
20.58

2015
38.84

Interpretation: The average collection period of Bata shoe company is very good
in 2012. Because it is good for company to collects its money from customer as
much as possible. But in 2013,2014 and 2015 is not good.

Maruf Hossen
(152-11-4640)

 Average Payment period:

The average payment period or average age of accounts payable is calculated in the same
meaner as the average collection period.
Average collection period: accounts payable / average purchase per day (days)
Average Payment Period of Bata Shoe Company Ltd.
2012
205.84

2013
165.8

2014
161.96

2015
103.32

Interpretation: Average payment period of this company is very good. Because it pays within
short time.

 Total Asset Turnover:

The total asset turnover indicates the efficiency with which the firm uses its assets to
generate sales.
Total asset turnover: sales / total asset (times)
Total asset turnover of Bata Shoe Company Ltd.
2012
1.86

2013
1.71

2014
1.73

2015
1.63

Interpretation: The total assets turnover of Bata company is acceptable. because it sold its
product quite well in the year.

 Gross Profit Margin:

The gross profit margin measures the percentage of each sales dollar remaining after the
firm has paid for it goods. The higher the gross margin, the better that is the lower the
cost of goods sold.
Gross profit margin: gross profit / sales (%)
Gross profit margin of Bata Shoe Company Ltd.
2012
36.10

2013
38.35

2014
38.78

2015
40.23

Interpretation: Gross profit margin of Bata Shoe Company Ltd. is good. Because its gross profit
increased after 2012.

 Return On Equity:
The return of common equity measures the returns the common stockholder
investment in the firm. Generally, the owners are better of the higher is the
return.
Return on equity: net profit after tax / total equity capital (%)
Return on equity margin of Bata Shoe Company Ltd.
2012
36.24

2013
36.03

2014
27.25

2015
28.05

Interpretation: The return on equity refers how much profit generates each taka common
stockholders equity. In this case Return on equity margin of Bata Shoe Company Ltd. generates
more net profit of each year.

Nurain Amin Tahsin

(152-11-4630)

 Debt Ratio:
The debt ratio measures the proportion of total assets financed by the firm creators. The
higher this ratio the greater the amount of other peoples many beings used to generate
profiles.
Debt ratio: total liabilities / total assets (%)
Debt ratio of Bata Shoe Company Ltd.
2012
53.42

2013
51.05

2014
44.91

2015
43.38

Interpretation: The value indicates that the company close to half of its assets with debt. The
higher its ratio, the greater the firms degree of indebtedness and the more financial leverage it
has.

Time Interest Earn Ratio:

The time interest earned ratio sometimes called the interest coverage ratio, measures the
firm ability to make contractual interest payments. The higher interest value the better
able to firm is able to fulfill its interest obligations.
Time interest earn ratio: EBIT / Interest
Time interest earn ratio of Bata Shoe Company Ltd.
2012
219.76

2013
191.09

2014
206.60

2015
280.19

Interpretation: Time interest earn ratio of Bata Shoe Company Ltd. is not good.

Price Earnings Ratio:

The price earning ratio measure the amount that investor is willing to pay for each dollar
of a firm earning. The higher the price earnings ratio, the greater than investor
confidence.
Price earnings ratio: market price per share / eps
Price earnings ratio of Bata Shoe Company Ltd.
2012
40.53

2013
58.84

2014
57.6

2015
61.5

Interpretation: The value shows that Price earnings ratio of Bata Shoe Company Ltd. is
increasing day by day and it is good for the company.

Market Book Ratio:

The market book ratio provides an assessment of how investors view the firms
performance. It relates the value of the firms shares to their book strict accounting value.
Market book ratio: market price per share / face value per share

Market book ratio of Bata Shoe Company Ltd.

2012
3.50

2013
3.67

2014
3.40

2015
4.97

Interpretation: the market book ratio of Bata company is outstanding because the investor are
currently paying 3.50,3.67,3.40,4.97 for each tk. 1 of book value of this company.

Tahmina Islam Liya

(152-11-4623)

 Operating Profit Margin:

Operating profit margin measures the percentage of each sale dollar remaining after all
cost and expenses other than interest, taxes and preferred stock dividend are deducted. It
represents the pure profit of the company. The operating profit margin is calculated as
follows.
Operating profit margin: operating profit / sales (%)
Operating profit margin of Bata Shoe Company Ltd.
2012
13.62

2013
15.31

2014
13.16

2015
14.62

Interpretation: The Operating profit margin of Bata Shoe Company Ltd. is fluctuate by year to
year. It is not positive for the company.

 Net Profit Margin:

The net profit margin measures the percentage of each sales dollar remaining after all
cost and expenses.

Net profit margin: net profit / sales (%)

Net profit margin of Bata Shoe Company Ltd.
2012
9.10

2013
10.32

2014
8.68

2015
9.76

Interpretation: Net profit margin of Bata Shoe Company Ltd. is 9.10% in the year of 2012 and
then it increased 2013 . after that it again decrease in 2014. But in 2015 it increased at 9.76%.

 Earnings Per Share:

The firms earning per share is generally of interest to prospective stockholders and
management. As we noted earlier EPS represents the number of dollars earned during the
period on behalf of each outstanding share of common stock.
EPS: earning available for common stockholders / number of shares of common stock
outstanding
EPS of Bata Shoe Company Ltd.
2012
59.44

2013
49.12

2014
60.80

2015
51.22

Interpretation: EPS of Bata Shoe Company Ltd. is 59.44 in 2012. But it decreased in 2013.
After that it again increased in 2014 and 2016. It shows the success of company.

Return On Total Asset:

Return on total asset often called the return on investments measures the overall
effectiveness of management in generating profit with its available assets. The higher the
firms return on total assets the better the profit. The return on assets is calculated as
follows:
Return on Total asset: net profit after tax/ total asset (%)

ROA of Bata Shoe Company Ltd.

2012
16.88

2013
17.64

2014
15.01

2015
15.88

Interpretation: ROA of Bata Shoe Company Ltd. is good in 2013. After that in decrease in 15%
.but the ROA is very good for the company. The value indicates that the company earn 15% on
each tk. Of investment.