Bombay Dyeing Case Study

CHAPTER 1: INTRODUCTION OF THE COMPANY - BOMBAY DYEING & MANUFACTURING COMPANY LTD.
1.1 About the company in brief
Bombay Dyeing was established in the year 1879 by the Wadia Group, which is engaged primarily in the business of Textiles. Bombay Dyeing is one of the largest producers of textiles in India. It was began by Nowrosjee Wadia, who started the operations on a very small scale. But now, it has a distribution chain of over 600 exclusive stores across the country. It is engaged in manufacturing textiles and chemicals. Bombay Dyeing is country’s largest exporter of textiles. During January 2009, Bombay Dyeing & Manufacturing Company has gained 10,000 shares costing Rs 10 each of White Horse Real Estate Company at its face value and because

Textile manufacturing is the main activity of Bombay Dyeing with five manufacturing facilities confirming to international standards. As per various sources nearly 50% of Bombay Dyeing 's production is exported to USA, Canada, UK, Germany, Netherlands, Italy, France, Poland, New Zealand, Switzerland, and many more countries and it has a good capacity of spinning and winding facilities.
Chemicals
Bombay Dyeing is also the largest manufacturer of Dimethyl Terephthalate (DMT) in India. DMT is used as a raw material for manufacturing polyester fibre, film, filament & yarn and engineering plastics.
Other Specialties
Bombay Dyeing has launched a range of fragrant bed linen which is named as 'Aroma Rich '.
Bombay Dyeing has also launched a new range of bedsheet named as ‘E Magic’ which has properties of Vitamin E.
CHAPTER 2: FINANCIAL TOOLS AND TECHNIQUES

2.1 What are the tools used in the report and about the types of financial

Financial Ratios are divided into four types. These are –
• Liquidity ratios
• Solvency ratios
• Activity ratios
• Profitability ratios

2.2 Liquidity Ratios:
Liquidity ratios measure the adequacy of current assets and liquid assets which help us to evaluate the ability of the business to pay its short-term debts this is known as liquidity position of the business.
Generally, a business which has sufficient current assets and liquid assets to pay its current liabilities when they become due is considered to have a strong liquidity position and a business with insufficient current and liquid assets is considered to have weak liquidity position.
Some commonly used liquidity ratios are given below:
1.Current ratio
2.Quick ratio

2.3 Solvency ratios:
Solvency ratios measure the ability of a business to survive for a long period of time. These ratios are very important for stockholders and creditors. Solvency ratios analyze the capital structure of the company they evaluate the ability of the company to pay interest on long-term borrowings, the ability of the company to repay principal amount of the long-term loans i.e. debentures, bonds, medium and long-term loans etc. and to evaluate whether the internal equities and external equities are in right