It gives me great pleasure to introduce my intern level position and share details about 'Credit Policy Effectiveness of RANGS Motors Limited and its impact on profitability' for which I have been assigned by your management. Furthermore, I would like to thank Yeasmin Akter, Assistant Manager of RANGS Motors Limited, for serving as my organizational supervisor. Finally, I would like to thank everyone at RANGS Motors Limited who helped make my term paper a success by contributing their thoughts and experiences while studying the Credit and Credit Collection Policy.
RANGS Motors Limited had little impact on my problems, however Covid had a huge impact on our life and my practice. I advised that RANGS Motors Limited should recruit more apprentices and additional students just to teach them proper work ethics and environments. After that, I go into detail about RANGS Motors Limited as a company and how they operate.
RANGS Motors Limited's 4000 credit file closure project, credit policy during sales and credit collection methods were all discussed here.
Student Information
Internship Information
- Period, Company Name, Department and Address
- Internship Company Supervisor’s Information
- Job Responsibilities
His work was related to the company's ERP (enterprise resource planning) system and bank reconciliation. My job was to help him with his backlog of work, which largely consisted of entering payments into the ERP system. One of my many tasks was helping him with paperwork and working with Excel.
In the first place, I was simply tasked with handling the month-to-month bank reconciliation for Bank Asia, RANGS big bank. There were two files in bank reconciliation: one was the bank statement, and the other was the ERP statement. I had to match the transactions on the bank statement with the transactions on the ERP statement.
After the task is completed, the final ERP debit value must match the credit value on the bank statement and the ERP credit value must be the same as the debit value on the bank statement.
Internship Outcomes
- Student’s contribution to the company
- Benefits to the student
- Problem/Difficulties
- Recommendations
My boss needed me to complete the bank reconciliation and reporting so that he could complete the final report and give it to the CFO of the company. However, I participated in the day-to-day operations of the financial and accounting department, and was also tasked with compiling a list of missing data files required for interactive journal entry. In addition, as part of the completion of the project, I looked at the vehicle sales strategy of RANGS Motors Limited and the strategies of multinational corporations.
Due to the severity of the epidemic in our country, I was only able to visit the doctor's office for two months. So in my first two months at RANGS Motors Limited, I learned a lot about the day-to-day operations of the accounting and finance unit, as well as how we close customer credit files and sell cars to customers. RANGS Motors Limited will be established as a workplace standard and students will be prepared to handle the epidemic.
RANGS Motors Limited will benefit from increased visibility as well as a distinct name as a result.
RANGS Motors Limited at a quick glimpse
Since its inception in 1998, RANGS Motors has been a major player in the Bangladeshi automotive market. Volvo-Eicher, Mitsubishi, Honda and Mahindra are just a handful of the world's best-known car manufacturers. Among the major global car brands they have introduced are Volvo-Eicher, Mahindra & Mahindra and AJAX.
As a result, RANGS Automotive Division has developed the most comprehensive line of commercial trucks available. Mahindra is a company that not only manufactures cars but also plans to enter the Bangladeshi electric market. VECV has entered the Bangladesh market to reach out to a wide range of customers, thanks to the nationwide coverage that RANGS GROUP has developed over the years.
Thanks to its exceptional aftermarket services, the brand has a 60 percent market share in the commercial vehicle sector in Bangladesh.
SWOT Analysis of RANGS Motors Limited
Media coverage: RANGS Motors Limited is making every effort to gain a competitive edge in the automotive industry. To reach more new generations of customers, they should also improve their social marketing activities. On the other hand, their biggest competitors, Nitol Motors and IFAD Autos, have a wider product line than they do.
Increasing market share: RANGS Motors Limited has the opportunity to offer new vehicles in the Bangladesh market to attract more customers. RML can use this opportunity to expand the automotive market by launching new and innovative vehicles and gaining more market share. RML will have to work hard to increase sales, outperform competitors and establish a more credible brand identity.
Porters 5 Forces Model
11 5. Industry Rivalry (High): Since then other car companies have emerged including Nitol Motors Limited, Runner and IFAD Autos Limited.
Financial Performance Analysis
The quick ratio is a vital indicator of a company's liquidity, calculated by subtracting inventory from current assets and dividing the remainder by current liabilities. The inventory turnover ratio is the number of times a company's inventory investment is recovered over the course of an accounting period. The reason for the increase in the ratio is due to more sales, lower prices or low inventory prices.
Inventory turnover in 2019 is lower than the industry average, indicating that the ratio is looking bad. From the above, it can be concluded that although the company is in a better situation than the industry average, it still needs to improve its sales and receivables. 22 RANGS Motors Limited's fixed asset turnover is significantly lower than the industry average.
Although the company is in the worst position compared to the industry average, this can be seen from the above position. In 2019, the debt-to-income ratio is 71 percent, which is higher than the previous year (base year). The company's debt ratio is higher than the industry average but is also growing day by day, which is a serious concern for the company in the long run.
The TIE ratio is a measure of a company's ability to meet its debt obligations based on current earnings. Because they are below the industry average, their ratio is low and they will have to reduce raw material costs, labor costs or the price of their products/services/goods to reach the high ratio that other companies have. That's one way they can achieve a Return on Assets ratio comparable to the industry average.
The reason for the higher ratio is that they may have increased their net profit after taxes by increasing revenues while reducing costs. RANGS Motors Limited has an earnings per share ratio higher than the industry average in 2019. They don't need any recommendations as their ratio is better than the industry average, but they should aim to maintain it like the rest of the industry.
- Introduction
- Methodology
- Findings & Analysis
- Recommendation
I was tasked with closing the files of customers who had purchased a vehicle on credit from RANGS Motors Limited. In general, it was difficult to understand the scale of the huge project in a short time. The investigation focused on the accounting and finance department of RANGS Motors Limited, which is essentially an importing company that sells commercial vehicles to its customers.
As part of the secondary data, the research work is designed in such a way to generate data from the annual reports and accounts of this company. RANGS Motors Limited will not charge interest to customers who repay their loans on time and in full within 24 months. Customers must also pay an advance payment of a certain amount of taka, which is established by RANGS Motors Limited, and the rest of the money will be paid.
Customers can pay by credit, cash or a combination of the two to purchase their vehicle. A consumer will be charged an annual interest rate of 12.6 percent if they do not pay their outstanding amount within 24 months of the start date. In addition, he must pay an additional 5000 TK along with his due amount to RANGS Motors Limited for closing his credit file at the end of the 48-month period, as well as a vehicle tracking fee (variable).
RANGS Motors Limited will often submit a proposal to a customer if they become financially unstable within their 48-month/24-month Emi payment period, noting that they must pay at least the requested amount to cancel their credit file. However, the condition of his vehicle has deteriorated over the past 26 months, and this has been his only method of paying Emi from RANGS Motors Limited. The regional manager then provides information to RANGS Motors Limited about his vehicle's condition and financial situation.
RANGS Motors Limited assesses the customer's circumstances before making an offer to pay at least the amount recommended by RANGS Motors Limited. Although allowing their consumers to buy things in installments for 24 or 48 months can bring them more customers than they would otherwise, in most cases they end up losing money and not being able to collect all the money or request a refund. Every financial decision involves weighing cash outflows (expenses or investment costs) against cash inflows (benefits or earnings after taxes but before depreciation). For a valid comparison, the two sets of streams must be the same. When making important decisions about their credit policy, financial managers must consider the following: i) risk, i.e. the unpredictability of future receipts or ii) inflation, which causes a decrease in the purchasing value of money; or (iii) the ability to reinvest cash received early. This requires good financial management decisions on financing, investments and dividends. Financial management must consider the "time factor" in these judgments. In addition, they must consider the following factors: i) When interest will be payable on the collected funds (ii) When you will get your investment back. iii) Whether it will be received regularly or not, and so on.
And for their internship program, repeating the same tasks was the most difficult component of the job.
