Cost-lowering shelf-filling innovations of cp
The use of ‘upside down’ cases is a remarkably simple idea with far-reaching benefits. The lid is at the bottom so when the box is removed, the lid becomes a tidy tray containing and displaying products on the shelf. This makes them quicker and easier to handle than conventional packaging and they require less skill. They reduce the amount of packaging material and secondary materials required during distribution. They are also extremely easy to collapse for disposal or recycling. They combine the outstanding branding and printing properties of corrugated board with its proven protective properties, which are readily tailored to individual distribution and display requirements.
The complementary virtues of CP packaging
There is a time and place for everything. The economics of single-use packaging have been proven by FEFCO (the European Federation of Corrugated Board Manufacturers) to be unrivalled. This is particularly true in circumstances that involve long journeys and where the complete distribution cycle cannot be closed.
One leading clothing retailer sought to create a completely closed multi-trip system between its various suppliers and retail outlets. When the company realized this was not a practical proposition, except between its own distribution centers and retail outlets, it avoided further high costs and management time by receiving goods in corrugated packaging from its numerous and frequently changing suppliers.
Corrugated transportation packs have the additional advantages of being easily printed branded and can be used as display material at the point of sale.
Since legislation makes companies responsible for disposing of packaging wherever it comes out of the distribution loop, corrugated packaging remains the material supported by the most proven recycling system in CP.
The strengths corrugated of CP
The excellent rigidity and structural strength of corrugated board arise from its construction – the familiar fluting medium held between flat liners.
Recent developments in flute sizes and combinations, and the varieties of paper types and finishes have opened up a completely new range of possibilities for this versatile material. Simplicity and integrity are the real strengths of corrugated packaging. Fluting, fixed between the inner and outer liner, gives unique cushioning characteristics and achieves excellent rigidity and structural strength.
Over the decades, successive generations of improvement have established a range of products for different applications. Standard and non-standard categories of corrugated packaging are based on the type of flute, whether coarse, fine or extra fine and the number of fluted tiers, whether single, double or triple tiers.
By eliminating any room for movement, precision, die-cut packaging provides highly reliable protection during transit. It is designed using advanced CAD/CAM methods. Single-piece packages provide fast machine packing; eliminate separate components and secondary materials. Advanced plant achieves high production runs, consistently reproducing the tightest engineering tolerances.
Apart from reducing damage, it also leads to packaging that is much easier to handle at the point of sale.
CP Packaging for a Fragile Planet
As the world’s population expands, so does the demand for packaging but due to innovation and efficiency in packaging, it is increasing at a slower rate than the population. The urgent need is for packaging that has the least harmful impact on the planet. Of course, it will also have to be economic to use. Corrugated packaging provides the balanced solution. The industry has always invested large sums in recovery and recycling processes. It is now so effective that, in the UK alone, 84% of the 2 million tones of fiberboard produced each year are recycled into new packaging.
Measuring the Environmental Impact of Paper
Corrugated packaging is made from paper, the only packaging material manufactured from a renewable source. The paper cycle will continue in perpetuity provided the harvest of timber does not exceed forest growth and that new trees are planted.
Protecting the Forestry Resource
Scandinavia is one of the major sources of wood pulp for paper. In Sweden forest growth or replanting exceeds annual felling by up to 35%. One of Europe’s leading manufacturers of corrugated packaging owns large expanses of forestland there. Its ecological policies demonstrate how the industry takes responsibility for ensuring the perpetuity of its raw materials. One of the main priorities is to preserve the bio-diversity in the forests through ecological landscape planning and logging practices. Seed trees are left on around 45% of the forestland, with 12% in combination with planting. These practices and their effects are regularly monitored through ecological audits.
Using Less Material in Every Package
Producing stronger, lighter material is not only an engineering and cost issue; it is an environmental one too. Major producers of corrugated packaging across Europe now use the latest CAD/CAM technology to produce better-engineered solutions and the star is the single-piece, mono-material, die cut, machine-erectable package.
This is an area where the ingenuity of European companies is taking the world lead. The associations of corrugated case makers recently demonstrated that the average weight of corrugated board is lower in Europe than either USA or Asia. Within Europe, the UK consistently has the lowest average board weight.
CP Papers and its Uses
Little can happen in modern life without paper or board. We depend on this paradoxical material. It can be permanent or transient; delicate or strong; cheap or expensive; in abundance or scarce. It can decompose in water, yet maps can withstand the weather. Even boat hulls have been made from it. It can be made and used by the millions of tones, or can be so rare that only a few tones are produced in a year.
HOW CP RECOVERED PAPER
Recovered paper merchants handle most of the paper and board that is recycled in the UK. They can be independent operators who supply sorted material to peppermills, or integrated companies that are owned by a paper manufacturing organization. Some will act as an intermediary between local authorities and peppermills. The UK has a sophisticated private recovered paper collection infrastructure, which can provide a variety of services from compacting and baling facilities,
Types of Recovered Paper
Apart from old newspapers and magazines collected from household schemes, recovered paper is derived from industrial and commercial sources. These sources are often the easiest, cleanest and most economical to collect from. Today there are over 60 recognized grades of waste paper in Europe, categorized into five main groups by
The Confederation of European Paper Industries (CEPI) and the Bureau of
International Recycling (BIR):
These papers tend to contain a substantial amount of short fibers. Subcategories include mixed paper and board, grey board, mixed newspapers and magazines, corrugated paper and board, and sorted graphic paper for de-inking;
This category contains unsold newspapers free from inserts, printed white shavings, sorted office paper, colored letters, white books, colored magazines, as well as continuous computer printout paper;
Predominantly white papers made from virgin fibers. Subcategories include mixed lightly colored printer shavings, binders, letters, white business forms, white computer print-out, printed multiply board, white shavings and unbleached board;
Office e graphic papers, such as copier paper, letter head, compliment slips and computer printouts have a number of potential further uses because these grades are generally made from virgin fiber. This particular resource is largely untapped because the paper needs to be segregated,
Some Important Material Used CP for Carton Making
White Lined Chipboard
Is a material used for carton making, made up in various layers? The white side, which
Is made from bleached chemical wood pulp, goes on the outside of the carton and carries the printing; the various grey layers are composed of waste paper. White lined cardboard is extensively used in the manufacture of cartons for all manner of articles. Tear the board on a cereal or detergent carton and you will see its layered structure quite clearly.
Is made by a conversion process in which three layers of paper (or paperboard) are corrugated during the process and the outer layers (liners) are glued to the peaks, thus making a liner-fl stingier sandwich. The resultant material is light but strong and is used to make corrugated packaging cases, which, because of the strength of the board, can be stacked high.
Must score, fold, bend or crease without splitting and have good printability for the process being used.
Is a high quality standard business paper, which often carries a watermark? It is available in a variety of colors as well as white and is a very strong and long-wearing paper. It is used principally for business forms, letter headings, invoices, statements etc.
Carbonless copy paper
Is coated on the underside with colorless dye capsules that burst under the pressure of writing or typing and transfer an image to the sheet below by chemical reaction with other colorless dye capsules coated on the upper surface of the second sheet. Some of the uses include invoices, receipts and order form
Descriptions of Paper and Board
Fact Sheet machine wires, each forming a separate web of paper. The undersides of each web are bonded together while still wet at another part of the machine, to provide a strong, stable paper with two good surfaces, ideal for high quality multi-color printing, for example; if net art prints, color brochures, maps etc.
It’s covered with a suspension of chin clay, pigment and adhesive. Various blades and rollers ensure the removal of surplus coating and impart a smooth surface. The coating levels the minute pits between the fibers in the base paper, giving a smooth fl at surface for printing. There are a number of finishes available from high gloss, matt, satin and silk. It is used for a wide range of high quality print jobs.
Gives the highest gloss surface of all coated papers and boards and it is used for labels,
Covers, cartons, cards or in other display situations.
Is usually referred to as gloss art paper. The gloss effect is imparted by passing the finished coated paper through the super calendar and is mainly used for color printing.
Light weight coated
Is a thin, coated paper which can be as light as 40 gsm? It is printed from a reel, in a similar way to the printing of newspapers, but the surface is smoother than newsprint and the paper is generally of much higher quality. It can be used for magazines, holiday brochures, mail order catalogues etc.
It’s a paper that has the coating applied whilst it is still on the paper machine, and is used for all types of colored work.
Is a coated paper with a matt finish it has not passed through the super calendar and therefore the surface is not polished. The relative roughness of the coating prevents light from being reflected and this achieves the matt finish. It is used in all kinds of high quality print work and is suitable for color printing.
Quality Count of CP
There are four main reasons why the quality of recovered paper is important: Impact on machinery Paper machines is large, complex and expensive pieces of machinery, costing in his region of £200 million each. Running at 40mph to 60mph, foreign
Material such as glass or glue can have serious implications on the wear and tear of a machine, and in some cases can cause a complete shut down. It has been estimated that a complete shut down of a paper machine can cost a company up to £60,000 per hour.
Impact on the customer using good quality recovered paper ensures that the end paper and board product is also of good quality. Paper and board made from recovered paper
Must match the physical, performance and visual characteristics of comparable products made from virgin fiber.
A product made from contaminated paper may compromise product quality in terms of strength, print quality, food safety or visual presentation, and may not be acceptable for the end customer. Poor quality recovered paper increases.
The chances of entire batches of finished paper and board being rejected by the customer that in turn may raise the production costs of the final product and impact on its competitiveness. If this were to happen too frequently, recycling would no longer be an economical option and the future of secondary reprocessing would be threatened.
The Importance of Quality
As was seen with some of the extreme scenarios in the WRAP report, landfill and incineration can be the best options given low efficiency recycling. This report stresses the importance of the performance of paper collection methods in protecting the integrity of the paper recovered from the waste stream in ensuring carbon benefits are achieved through efficient reprocessing.
How Carbon Benefits are calculated
Measuring the carbon benefits arising from the recycling of many materials is put forward as a reasonably simple calculation. It is generally a measure of the savings available from the substitution of primary raw materials with secondary raw materials plus the energy efficiency gains achieved through the reprocessing stage. Once the finished product has been manufactured, the carbon costs of the products’ lives are similar as they are no longer distinguishable. This is because finished products that are made from recycled materials generally have to perform to the same standards as those made from virgin materials to compete in the market place. Such as glass, steel and aluminum appear to be in the position to offer a specific carbon reduction number associated with secondary raw material use over primary raw material.
Why Paper is Difficult to Calculate
It is possible to calculate specific carbon numbers for the paper recycling process. However, paper manufacturing is extremely varied in terms of production processes, raw material inputs, energy sources, output products and locations. This makes it far more difficult to specify carbon benefits on an overall material basis than for other product sectors. The Confederation of European Paper Industries (CEPI) has set out a framework for paper manufacturers to measure their carbon footprints in the future. It will be up to the various paper industry sectors,
Vertical Type of Machines That Uses Cosmos Packages For Producing Product
Our range of Vertical Type Corrugation Machine is simple to operate with manual loading, twin shaft reel stand. The approximate output of the machine is 50 RFT per minute.
Hot Foil Fancy Precise Box Machine
Our range of fancy precise boxes has gained huge appreciation in the market for their host of qualitative features. These are manufactured using qualitative material sourced form trusted vendors. The boxes are available in the following specification.
Creasing for Offset & Corrugated Box Industry
We offer a wide spectrum of creasing for offset & corrugated box industry that is widely appreciated for their durability, sturdy construction and heavy duty. The entire gamut is available in the following specifications.
Corrugated Box Machine – Heavy Duty
Our range of heavy duty corrugated box machine is manufactured using high quality material sourced form reputed source. The entire range is supplied in the following specifications.
Oblique Type High Speed Single Face Paper Corrugation Machine.
We deal in “Oblique Type High Speed Single Face Paper Corrugation Machine. (SFH-900)”.We design and manufacture a world-class range of high precision and robust Oblique Type High Speed Single Face Paper Corrugation Machine. The flute rollers are mounted on bearings for smooth running & longer life.
The flute rollers are made of special alloy steel. The main bearings are lubricated with high temperature grease the gum rollers are hard chromed for better performance & life. Two Pre-heaters are provided to depositories the paper.
The machine is equipped with ‘JUMBO’ type motorized reel stand with capacity of lifting unto 1 ton reel Variable drive motor is standard with this model.
HIC Print Pack Machineries
High Speed Single Face Corrugation Machine offers high production capacity and increased efficiency as compared to other models. Rolls are mounted on roller bearings for smooth running and longer life. The machine is provided with gum tray movement device, which becomes operational when gum unit is disengaged from rollers.
The double facers offered by us are used to make perfectly bonded board. The liners are heated and transported to the double facer free of stress due to the pre-conditioner. The hot plates stay completely flat for steady heat transfer over the entire working width without edge crush in all operating conditions.
Different numbers of hot plates can be configured in heating section according to requirements of our clients. Further, the pressure rolls of cooling section make sure perfect forming quality. The specially designed feed geometry aid in eliminating bubbles & ripples in the liner and conditions it prior to bonding. Designed to have low friction properties, these facers are highly corrosion resistant Specifications.
We have gained the reputation as market leaders in the filed of offering heavy duty corrugating machines. These are capable of handling a variety of sheets and are tuned to deliver high production output.
The machines also feature self loading arrangement with twin unwinding shafts for easy operation.
HIC Print Pack Machineries
Modern single facers have the ability to change flutes quickly. The fast process allows the plant to run at a faster pace with great simplicity and safety. The unique and advanced slide roll system, with corrugating rolls mounted on two sides of one frame, allows a complete roll changing in less than 30 minutes.
Once the roll carriage is accurately placed, there is neither any need for further adjustment nor fine tuning is required. The rolls are removed and replaced automatically. Even when the rolls are hot, the roll change is safe and easy. The foolproof design of cartridge roll change can be accomplished without much technical input. It is specially designed to meet the customer’s need without excessive downtime.
Oblique Type Corrugation Machine
Single Face Oblique Type Corrugation Machine with twin shaft motorized reel stand, has more production capacity than Vertical Type Corrugation Machine. The approximate output of the machine is 80 RFT per minute. This machine is with one preheated also.
3/5 Ply Corrugated Box Machines of CP
Our range of 3/5 ply Corrugated Box Machines is the only solution for corrugators, who want superior quality boards and higher production. Carefully designed these are available in the following technical specifications.
Five ply corrugated box making plant
• High speed bearing mounted corrugation Machine with variable speed drive- 2 nos.
• Drum type heaters – 4 nos.
• Self loading reel stand- 5 nos.
• Triplex heating unit before gluing
• On line duplex pasting unit
• Heating cooling and drying chamber (consist of fourteen hot plates)
• Heavy duty pull unit
• On line creasing and slitting unit
• Heavy duty cut off unit
Three ply corrugated box-making plant
• High speed bearing mounted corrugation Machine with variable speed drive
• Drum type heaters – 2 noses
• Self-loading reel stand- 3 nose
• Duplex heating unit before gluing
• on line simplex pasting unit
• Heating cooling and more…
Automatic Corrugated Boar Making Plant
Put this fallowing product names at content for the above product. Our range of High Speed Single Face Corrugation Machine offers high production capacity and increased efficiency as compared to other models. These are available with centralized lubrication system and rolls are mounted on roller bearings for smooth running and longer life. The machine is provided with gum tray movement device, which becomes operational when gum unit is disengaged from rollers.
Box Stitching Machines
We are offering box stitching machines, which are known for compact design, sturdiness and easy operation. We use quality metals and provided precise heat treatment in fabricating our machines. In our machines, all the parts are interchangeable and are Dimensionally accurate. Also, these machines are available with arm length of 20”, 30”, 36”, 42”, 48” & 60” and operate with high speed of 300 stitches per minute.
Symbols used on packages and labels
Many types of symbols for package labeling are nationally and internationally standardized. For consumer packaging, symbols exist for product certifications, trademarks, proof of purchase, etc. Some requirements and symbols exist to communicate aspects of consumer use and safety. Examples of environmental and recycling symbols include: Recycling symbol, Resin identification code (below), and Green Dot (symbol).
Packaging machines may be of the following general types:
- Blister packs, skin packs and Vacuum Packaging Machines
- Bottle caps equipment, Over-Capping, Lading, Closing, Seaming and Sealing Machines
- Box, Case and Tray Forming, Packing, Unpacking, Closing and Sealing Machines
- Cartooning Machines
- Cleaning, Sterilizing, Cooling and Drying Machines
- Converting Machines
- Conveyor belts, Accumulating and Related Machines
- Feeding, Orienting, Placing and Related Machines
- Filling Machines: handling liquid and powdered products
- Inspecting, Detecting and Check weighed Machines
- Label dispensers Help peel and apply labels more efficiently
- Package Filling and Closing Machines
- Palletizing, Depolarizing, Unit load assembly
- Product Identification: labeling, marking, etc.
At a Glance of Overall Carton Packaging System of CP
Bakery goods shrink-wrapped by shrink film, heat sealer and heat tunnel on roller conveyer
High speed conveyor with bar code scanner for sorting transport packages
Label printer applicator applying a label to adjacent panels of a corrugated box.
Robotics used to palletize bread
Table 4-4: At a glance of overall carton packaging system of CP
The objects enclosed in the package may require protection from, among other things, shock, vibration, compression, temperature , etc.
A barrier from oxygen, water vapor, dust, etc., is often required. Permeation is a critical factor in design. Some packages contain desiccants or Oxygen absorbers to help extend shelf life. Modified atmospheres  or controlled atmospheres are also maintained in some food packages. Keeping the contents clean, fresh, sterile  and safe for the intended shelf life is a primary function.
Containment or agglomeration
Small objects are typically grouped together in one package for reasons of efficiency. For example, a single box of 1000 pencils requires less physical handling than 1000 single pencils. Liquids, powders, and granular materials need containment.
Packages and labels communicate how to use, transport, recycle, or dispose of the package or product. With pharmaceuticals, food, medical, and chemical products, some types of information are required by governments. Some packages and labels also are used for track and trace purposes.
The packaging and labels can be used by marketers to encourage potential buyers to purchase the product. Package graphic design and physical design have been important and constantly evolving phenomenon for several decades. Marketing communications and graphic design are applied to the surface of the package and (in many cases) the point of sale display.
Packaging can play an important role in reducing the security risks of shipment. Packages can be made with improved tamper resistance to deter tampering and also can have tamper-evident  features to help indicate tampering. Packages can be engineered to help reduce the risks of package pilferage: Some package constructions are more resistant to pilferage and some have pilfered indicating seals. Packages may include authentication seals and use security printing to help indicate that the package and contents are not counterfeit. Packages also can include anti-theft devices, such as dye-packs, RFID tags, or electronic article surveillance tags that can be activated or detected by devices at exit points and require specialized tools to deactivate
Single serving or single dosage packaging has a precise amount of contents to control usage. Bulk commodities (such as salt) can be divided into packages that are a more suitable size for individual households.
Analysis and Findings
Financial analysis includes the study of relationship within a set of financial statement at a point of time and with trends with these relations over time. There are basically two techniques to analyze financial statements, namely:
- Cross-Section Analysis
- Time-Series Analysis
The cross-section technique is mainly concerned with the level of any ratio in the financial operation of the company. This analysis is used in many areas like:
- Valuation of analysis for mergers, acquisition.
- Management performance evaluation and executive compensation.
- Predicting financial distress.
- Public policy decision about excess profitability where each firm’s profitability ratio is compared to that of the others.
Two frequently discussed cross-functional techniques of financial analysis are:
a) Common size statement.
b) Financial ratio.
a) Common-size of statement:
One impetus to development of the common-size statement came to the problem of comparing the financial statement of the firms that differ in size, capital, asset etc.
One way of controlling the differences is to express the balance sheet as a percentage of total assets (liability + equity) and the component of income statement as a percentage of total revenue.
b) Financial Ratios:
Ratios are constructed to judge comparative performance. Financial ratios are calculated to weigh and evaluate the economic performance of a firm. Ratios help us to make the right question, not always to choose the right answer.
Types of Ratios:
- Case position ratio
- liquidity ratio
- Profitability ratio
- Capital structure ratio
- Debt service coverage ratio
- Turnover ratio
- Working capital ratio
Cash position ratio:
Cash and other cash equivalent form and important reservoir that the firm can use to meet its operating expenditures and other cash obligation as they fall due. The ratios that have been used to compute the relative position of the firm are provided in the following table:
|(Cash and other cash equivalents)/ Current Liability||Reveals the amount of liquid assets available to payout the existing current liabilities.|
|(Cash and other cash equivalents)/ sales||Amount of cash generated by the sales stream.|
|(Cash and other cash equivalents)/ total assets||Portion of liquid assets relative to total assets. The higher these three ratios are the better.|
Table 5-1: Cash Position Ratios
Liquidity is a very important aspect of any business firm as it enables the firm to meet sudden need of cash incase of a debt liability, increase demand, growing market and above all credibility in the capita market. A liquid firm paying the debt installment regularly created a positive impression on the money lenders and can attain debt in less stringent term even in times of liquidity crisis in the economy. In absence of liquidity, a firm might have to sell its assets or discount its accounts receivables in depressing values to fulfill the requirement of cash. The most common ratios used to measure liquidity are the quick ratio and current ratio.
Table 5-2: Cash Position Ratios
The cash position ratio and the average of CP represents medium cash. Cash is increasing as the sales are increasing.
Liquidity is a very important aspect of any business firm as it enables the firm to meet sudden need of cash in case of a debt liability, increase demand, growing market and above all credibility. A liquid firm paying the debt installments regularly creates a positive impression on the money lenders and can attain debt in less stringent term even in times of liquidity crisis in the economy. In absence of liquidity, a firm might have to sell its assets or discount its accounts receivable in depressing values to fulfill the requirement of cash.
Current assets are viewed as relatively short time period. Current liabilities are debt that will come within a year. A too low current ratios refers the company may have the difficulty in meeting short-terms complements. And too high current ratios have exclusive investments in currents assets or under utilized short liabilities.
Quick ratio= (Current Assets Inventories)/ Current Liabilities
Current ratio= Current Assets/ Current Liabilities
Table 5-3: Liquidity ratios
We see that current ratio was gradually increasing. However, the current ratios of CP in 2006, 2007 were lower but in 2008, they were in satisfactory level.
The quick ratio measures the company’s ability to meet the short-term obligation from most of its liquid assets. Here in this case inventory is not included with the other current assets. The quick ratios for CP reflect the same position reflected by the current ratios. The same reasons of concern that applied to the current ratios are relevant.
Profitability ratios are the simplest and the most effective type to have a quick view of the company’s operation levels. Profitability Ratio can indicate the return of assets, return on equity and return on sales. The first ratio tells us how the firm is utilizing its assets as sources of benefits, the second one tells us the return that the common shareholders are getting and the third one indicates the level of portion of sales that remain after the expenses, since profit is the ultimate objective of the firm, performance is medium here.
Indicates the medium profit gained organization that, maximize its profit by getting tax exemption and duty free bonded warehouse facilities. But if not get these facilities, would probably results in the firm’s going out of business.
|Net Income/ Sales||Portion of sales that is available after the expenses. Indicate the level of expenses of the firm|
|Net Income/ Share holder’s Equity||The rate of growth of the equity|
|Net Income/ Total Assets||The rate of return on total assets. It measures the limit of efficiency of the organization.|
Table 5-4: Profitability Ratio
Return on total assets is the total after- corporate tax return to stockholders and lenders on the total investment that they have in the firm. It is the rate of returned earned by the firms as a whole for all its investors including lenders.
From our analysis, we saw that return on assets (ROA) was very healthy one in the most recent years. PBL is providing healthy return. However, this ratio has slightly dropped during 2006, which is not good sign. So management committee should try to increase net income efficiently.
Manager’s objective is to generate the maximum return on share holder’s investment in the firm. Return on equity (ROE) is, therefore the best single measure of the company’s success in fulfilling its goal. CP return on equity was really very healthy from its early stage of operation. This is much better for PBL.
The CP gross profit margin was in a healthy position. The gross profit margin reflects the effectiveness of pricing policy and production efficiency (that is how well the purchase or cost of production is controlled). The gross profits margin is increased by raising the price of the firm’s products, the products may become uncompetitive, producing a falloff in sales, therefore the company may find it advantages to lower the gross profit margin if increases sales so much to increases total profit. The management of PBL is looking forward for increasing gross profit even more by decreasing the cost of goods sold (COGS).
The net profit margin indicates the probability of sales without tax and interest expense. The processes of these ratios are to measures the effectiveness of production and sales of the company’s product is generating tax-free income for the company for a certain period.
CP net profit margin was very good for the recent five years. It is also increasing gradually which is a very good sign for the company.
|Net Income/Shareholders Equity||45.0%||47.0%||41.8%||43.0%||40.0%|
|Net Income/Total Assets||22.5%||23.0%||21.0%||22.0%||20.5%|
Table 5-5: Profitability Ratio
Capital Structure Ratio:
Capita structure ratios focus on the sources, risk of capital than the firm explores. One of the capita structure ratios are the debt/equity ratio that reveals the amount of risky source of capital in the company’s capital structure.
|Long-term Debt/Equity||The higher this ratio, the riskier the firm’s capital structure|
|Debt ratio=LT debt/ (LT debt + Equity)||Measure the financial leverage of a firm|
|(LT Debt + ST Debt)/ Equity|
This ratio is similar to the former one, but it includes the short-term debt also.
Table 5-6: Capital structure Ratio
Debt service coverage ratio:
These ratios help the analyst to determine the quality of debt management of the firm. Operating income typically is calculated as revenue less cost of goods sold and marketing and general administrative expenses; the operating income is divided by yearly interest payments made by the firm. The following table shows two debt service coverage ratios.
Measures the ability of the firm to meet its annual interest payment requirements.Cash flow / Interest expenseIndicate whether the company can generate enough cash to pay the financial expenses
Table 5-7: Debt Service Coverage Ratio
Turnover here does not mean only sales, but in actual terms, turnover ratios measure the difference cycles that a firm has, like inventory cycle, accounts receivable cycle and total asset cycle. Turnover ratios focus on the asset management aspect of the company the higher these ratios are, the better the firms operation.
|Sales/ Total Assets||Total asset utilization of generate sales|
|Sales/ Accounts Receivable||Accounts receivable turnover, if we divide 365 days by this ratio, we get the average collection period of the firm.|
|Cost of goods sold/ Inventory||Inventory turnover ratio|
Table 5-8: Turnover Ratio
Working Capital Ratio:
One of the most time consuming, critical decision managers has to make everyday is the working capital management. The ratio in this class reveals the nature of working capital management of the firm, are mentioned in the following table.
|Net working capital/Sales||The higher the networking capital per amount of sales the better|
|Net working capital/ Average Assets||Portion of networking capital in total assets|
|Average collection period (365/Inventory turnover)||Time taken to collect the sale proceeds|
|Inventory consumption period (365/Inventory turnover)||Time taken to consume the inventory in the store|
Table 5-9: Working Capital Ratio
Application of Altman Model
With the help of the problem and its solution given below, the application of Altman Model to predict financial condition becomes clear.
The following corporate firms belong to the garments packing industries group. It has the following financial pictures during the year from 2004-2008.
|Equity (Value Market)||76,000||75,000||72,000||68,000||55,000|
Table 5-10: Application of Alt’s man model
Using Altman’s Z-score Model, we see that-
Hence calculation of the values of X1, X2, X3, X4 & X5 are as under:
Common Size Analysis:
CP is still in the growing stage after nine years of operation. The company made better percentage from its first years of operation. Turnover has been well in every year and the management is expecting higher income in every coming years.
The cost of sales is increase day by day because of the increasing rate of raw materials from international market and to increase the efficiency level of employees.
The following points are worth observable to analysis and to make inference from income statement of CP.
Common size Income statement of CP.
Table 5-12: Common size analysis
As the company is running towards healthy profit maximization, the portion of current assets in the balance sheet is increasing than that of fixed assets.
The common size statement are ideal for a quick comparison of the years the company we are dealing with. The common size statement is providing in Appendix. Comparing the common size statement of CP, we can reach at the following conclusions.
The cost of sales of CP is increasing in the passage of years. Although CP gained a small percentage of profit at its year of operation, it has gained a better operating profit merging in the latter years.
The operating profit portion in sales for CP it was 28.79%, 30.21%, 34.0%, 26.65%, 22.65% in the year of 2004, 2005, 2006, 2007 & 2008 respectively.
Every business organization is required to judge the performance from the aspects of its strength, weakness, opportunity and threat. The Strength, Weakness, Opportunity and
Threat (SWOT) analysis of the CP is a follows:
- The Cosmos Packages provides quality service to the clients compared to its other contemporary competitors.
- Experienced workers and corporate personnel have formed the management of the Cosmos Packages, which formulates business strategies.
- Some services of the Cosmos Packages are automated which attracts large number of clients.
- The Cosmos Packages will introduce online service, which will enable it to automate all of its operations. Other country clients easily find out any kind of product from the online.
- The Cosmos Packages has earned customer loyalty as organizational loyalty.
- Cosmos Packages has already achieved a goodwill among the clients that helps it to retain valuable clients.
- The portfolio of packages industry is not that much diversified because it inverts major portion of its fund on Government securities.
- The packages industry lacks aggressive advertising and promotional activities to get a broad geographical coverage.
- The CP has only a few back up system of electricity so that reason timely delivery is not required. So they should monitoring proper electricity system for achieve there goals.
- The Cosmos Packages can introduce more innovative and modern customer services to better survive in the competition.
- Government provides many bundle facilities for germane, packages, and other industries like tax fee facilities for exporting goods. Therefore, it is a big opportunity for Cosmos Packages.
- Cosmos Packages can diversify its portfolio by introducing new product.
- Cosmos Packages can recruit experienced, efficient and knowledgeable workforce as it offers attractive compensation package and good working environment.
- The common attitude of Bangladeshi clients to default.
- Foreign clients creates uncertainty situation, like break up agreement.
- Competitors are also one kind of threat among foreign clients.
- Lack of gas and electricity in our country
- Political problems like workers movement.
- Local competitors can also capture a huge market position by offering similar products and services provided by the CP.
- The most thinking threats of the CP come from the competitors. The CP has a chance to lose its market position to the competitors if it does not take necessary action.
- Transportation problem for traffic jam that reason timely delivery problem.
Followings are the positive and negative findings of “The Overall Performance & Packaging System of Cosmos Packages”.
- The unit which is involved in procurement is skilled.
- The division system is small.
- Many times customers face problem.
- The expansion process of the CP has little match with the modern pace of globalization.
- Strategic research focuses on new ideas and innovations in the sphere of package. The target of strategic research is to implement new innovative packaging techniques for the future packaging.
- Applied research is generally targeted to specific problems regarding use and distribution of packaged products.
- Fundamental research is primarily concerned with packaging research activities through modern technologies. The primary focus of fundamental research is on interpreting material and packaging system behavior and thereby establishes strong connection between packaging materials and products.
Recommendation and Conclusion
RECOMMENDATIONS & CONCLUSION
The Packaging sector in Bangladesh is now quite competitive. The private commercial package industry that are currently operating in Bangladesh offering different products but there are few basic differences among them in terms of structure and performance. Thus, the competitions among them are increasing day by day.
Therefore, based on my experience & knowledge to progress in future, cosmos packages must adopt some policy, which will help the package industry to capture a large number of clients in the market.
- Cosmos Packages could give more attention to advertisement and promotion of products, which is helpful to collect more deposits and increase investments scope. Package industry could use various media for advertisement like TV, News Paper, Internet and Billboard.
- However, the CP recently inaugurated the online system but still they maintain manually production, which spend a lot of time. It should be avoided.
- The portfolio of Cosmos Packages is not that much diversified because it invests a major portion of its fund on Government securities. So, CP should invest in diversified sector to minimize risks.
- A philosophy of working culture must prevail for the interest of customer & CP itself.
- The website should be more attractive and have more information in it. Also, it should be updated regularly.
- Sufficient skilled and active employee should be employed and skill base recruitments must be incorporate.
- Regular observation in to the factory & collect report that should be made accurately.
- It is necessary to maintain a recovery team for the proper investigation instead of doing the work by employee.
- Proper utilization of the employee skilled in all spheres should be ascertained.
Packaging industry always contribute towards the economic development of a country. Compared with other packages Cosmos Package is also playing leading role in socio-economic development of the country. The Cosmos Package is currently doing average. By analyzing its performance it is observed that a potential growth might be accelerated through effective implications of some policy. Being an old generation Packaging industry it has an advantage compared to newly established Package Company in the form of wide range of activities. However policy implication needs to be as fast as possible to grab the early mover advantage.
The Cosmos Package through years has been able to spread operation in mass Packaging rather than concentrating in niches. It can hedge poor performance of one sector by some other sector for its wide range of offering. Capital market operation has become a great potential for the bank to increase its profitability. Cosmos Package brokerage house is concentrating to establish new workstations in order to facilitate investor of remote places.
Cosmos Package has been able to create a multi component portfolio. Default is increasing for lack of monitoring. The Cosmos Package is trying to increase its all kind of product quality by accelerating its recovery policy. The Cosmos Package can concentrate on the HR sector, its investments and profitable.
1) Md. Mahmud Khan, 06-07, “BGMEA member’s directory”, product index in alphabetical order: page 18-80.
2) Jon Deowlar, London 2009 “Machines for Package” Activity of Machine, Page 119-156.
3) Set Mitra,”Commercial low And Industrial Low” company low page 255-366
Journal and Report:
Annual Report of Cosmos Packaging, 2008.
Annual Report of Cosmos Packaging, 2007
- Www. bangladeshgarments.info
- Www. cosmospackages.com
- www.pricetag .com
- www.hug tag.com
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