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Blue Bus485 Final

1) The document analyzes the efficiency and financial ratios of 10 textile industries in Bangladesh over a 7 year period from 2015 to 2021. 2) It examines the relationship between independent variables like liquidity, productivity, profitability, working capital, and leverage and the dependent variable of firm efficiency. 3) The analysis finds a statistically significant positive relationship between firm efficiency and the fixed asset turnover ratio, but no significant relationships between efficiency and the current ratio, debt ratio, return on equity, or working capital.

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Tamzid Ahmed Anik
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51 views13 pages

Blue Bus485 Final

1) The document analyzes the efficiency and financial ratios of 10 textile industries in Bangladesh over a 7 year period from 2015 to 2021. 2) It examines the relationship between independent variables like liquidity, productivity, profitability, working capital, and leverage and the dependent variable of firm efficiency. 3) The analysis finds a statistically significant positive relationship between firm efficiency and the fixed asset turnover ratio, but no significant relationships between efficiency and the current ratio, debt ratio, return on equity, or working capital.

Uploaded by

Tamzid Ahmed Anik
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Financial ratios & Efficiency

of
Textile industries
BY

S.M.Omar 1710534
Sadia Zahin 1831044
Tamzid Ahmed Anik 1911031
Ummaye Mayesha Mannan 1930085
Nabila Tabassum 1930102
Bushra Haque 1930306
Selected Companies

1. Hamid Fabric 6. Envoy Textile

2. Apex Spinning 7. Regent Textile

3. Al-Haj Textile 8. Sonargoan Textile

4. Square Textile 9. Makson Spinning

5. Saiham Textile 10. Queen South Textile


variables
Independent Variable Dependent Variable

1. Liquidity 1. Firm Efficiency

2. Productivity

3. Profitability

5. Working Capital

6. Leverage
Introduction

Efficiency assesses how effectively resources are put to work producing returns.

It is challenging to distinguish apart in market that are crowded with so many identical
companies.

If businesses are not differentiating themselves, they cannot attract or keep clients.

As a result, it has become more important than ever for businesses to be efficient.

Being efficient in organizational operations helps firms to improve productivity, increase


production output and can eliminate time-consuming tasks.
• Formal Study

• Monitoring

• Ex-post facto

Methodology • Causal- explanatory

• Longitudinal study

• Cross-Sectional

• Statistical Study
Descriptive
statistics

• Mean
• Median
• Maximum
• Minimum
• Std. Deviation
CORRELATION
• ANALYSIS
Correlation is a tool for defining the relationship between two variables.
• Correlation coefficient is denoted by r.
• R- value can between +1 to -1.
• When R-value is +1 or near +1, we can say there is a positive relationship between the two variables.
• On the other hand, -1 means there is a negative relationship between two variables.
Correlation
Probability ASSET_TURNOVER CURRENT_RATIO DEBT_RATIO FIXED_ASSET_TRUNOVER ROE WORKING_CAPITAL
ASSET_TURNOVER 1.000000
-----

CURRENT_RATIO 0.087198 1.000000


0.4729 -----

DEBT_RATIO 0.180983 -0.285536 1.000000


0.1338 0.0166 -----

FIXED_ASSET_TRUNOVER 0.797007 0.072768 0.152163 1.000000


0.0000 0.5494 0.2086 -----

ROE -0.010755 -0.062842 -0.126965 -0.051955 1.000000


0.9296 0.6053 0.2949 0.6693 -----

WORKING_CAPITAL -0.321420 0.360749 0.027106 -0.261988 0.161098 1.000000


0.0067 0.0022 0.8237 0.0285 0.1828 -----
Date: 12/02/22 Time: 01:57
Sample: 2015 2021
Periods included: 7
regression ANALYSIS
Cross-sections included: 10
Total panel (balanced) observations: 70

Variable Coefficient Std. Error t-Statistic Prob.

CURRENT_RATIO 0.066165 0.036901 1.793040 0.0777


DEBT_RATIO 0.238328 0.142774 1.669266 0.0999
FIXED_ASSET_TRUNOVER 0.128646 0.013966 9.211420 0.0000
ROE 0.021170 0.018316 1.155815 0.2521
WORKING_CAPITAL -1.08E-10 4.45E-11 -2.432484 0.0178
C 0.155716 0.095129 1.636891 0.1066

R-squared 0.673431 Mean dependent var 0.566092


Adjusted R-squared 0.647918 S.D. dependent var 0.360486
S.E. of regression 0.213900 Akaike info criterion -0.164802
Sum squared resid 2.928199 Schwarz criterion 0.027926
Log likelihood 11.76807 Hannan-Quinn criter. -0.088248
F-statistic 26.39536 Durbin-Watson stat 1.246595
Prob(F-statistic) 0.000000
Table: Analysis of PLS between DV and IV
Dependent Variable: ASSET_TURNOVER Dependent Variable: ASSET_TURNOVER
Method: Panel Least Squares Method: Panel EGLS (Cross-section random effects)

regression ANALYSIS
Date: 12/02/22 Time: 01:51 Date: 12/02/22 Time: 01:56
Sample: 2015 2021 Sample: 2015 2021
Periods included: 7
Periods included: 7 Cross-sections included: 10
Cross-sections included: 10 Total panel (balanced) observations: 70
Total panel (balanced) observations: 70 Swamy and Arora estimator of component variances

Variable Coefficient Std. Error t-Statistic Prob.


Variable Coefficient Std. Error t-Statistic Prob.
CURRENT_RATIO 0.057189 0.047456 1.205093 0.2326
DEBT_RATIO 0.141243 0.202256 0.698340 0.4875
CURRENT_RATIO 0.041833 0.053284 0.785100 0.4358 FIXED_ASSET_TRUNOVER 0.109492 0.022723 4.818625 0.0000
DEBT_RATIO -0.101439 0.262700 -0.386140 0.7009 ROE 0.022995 0.016112 1.427169 0.1584
FIXED_ASSET_TRUN... 0.074892 0.031480 2.379039 0.0209 WORKING_CAPITAL -5.99E-11 6.09E-11 -0.983645 0.3290
ROE 0.021805 0.016472 1.323725 0.1911 C 0.225870 0.139425 1.620018 0.1101
WORKING_CAPITAL 9.02E-12 7.65E-11 0.117826 0.9066 Effects Specification
C 0.390966 0.164577 2.375577 0.0210 S.D. Rho

Cross-section random 0.183053 0.5212


Effects Specification Idiosyncratic random 0.175441 0.4788

Cross-section fixed (dummy variables) Weighted Statistics

R-squared 0.325138 Mean dependent var 0.192805


R-squared 0.811201 Mean dependent var 0.566092 Adjusted R-squared 0.272415 S.D. dependent var 0.202918
Adjusted R-squared 0.763143 S.D. dependent var 0.360486 S.E. of regression 0.173087 Sum squared resid 1.917373
S.E. of regression 0.175441 Akaike info criterion -0.455620 F-statistic 6.166847 Durbin-Watson stat 1.803358
Prob(F-statistic) 0.000101
Sum squared resid 1.692873 Schwarz criterion 0.026201
Log likelihood 30.94670 Hannan-Quinn criter. -0.264235 Unweighted Statistics
F-statistic 16.87968 Durbin-Watson stat 2.015534
R-squared 0.644800 Mean dependent var 0.566092
Prob(F-statistic) 0.000000 Sum squared resid 3.184918 Durbin-Watson stat 1.085651

Table: Fixed effect statistics Table : Random effect statistics


HYPOTHESIS TESTING
Variable P-Value Greater Than α Decision Relationship with
or Less Than Dependent Variable

Current 0,0777 >  0.05 Don’t Reject Null Hypotheses No Significant


Ratio Relationship
Debt ratio 0.0999 >  0.05 Don’t Reject Null Hypotheses No Significant
Relationship
Fixed 0.0000 <  0.05 Reject Null Hypotheses Significant Relationship
asset
turnover
Return on 0.2521 >  0.05 Don’t Reject Null Hypotheses No Significant
equity Relationship
Working 0.1066 >  0.05 Don’t Reject Null Hypotheses No Significant
capital Relationship
Discussion
According to the results of our regression research, company
efficiency would rise with rising productivity, leverage, and
liquidity values, but fall with rising working capital.

All independent variables that showed either extremely poor or


weak correlations with the dependent variable in our study.

The R squared value from here in our research is 67%.This


value is significantly below the minimum satisfactory level,
which is roughly 80% explanation of variations.
• Firm efficiency.

• Relationship.

Conclusion • Sample Size.

• Further Studies.

• Investors/ Investment.
Thank you

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