An Empirical Investigation into the Financial Health of the RMG Sector: A case Study of Muazuddin Textile Ltd. Submitted by:

Abstract

The Ready-Made Garments (RMG) sector is the cornerstone of Bangladesh’s economy, contributing more than 75% of the country’s total export earnings and employing over 4 million workers. As one of the largest industrial employers, the sector plays a vital role in socio economic development, foreign exchange earnings, and global trade integration. However, the sustainability and competitiveness of RMG firms depend largely on their financial performance. This internship report focuses on Muazuddin Textile Ltd, a prominent player in the RMG industry of Bangladesh. The study evaluates the company’s financial performance over the last five years (2020–2024) using key financial ratios, including profitability, liquidity, solvency, and efficiency. The analysis is based on secondary data collected from annual reports, industry publications, and relevant financial statements. The findings reveal that Muazuddin Textile Ltd has maintained moderate profitability, with gross profit margins averaging 17–19% and net profit margins around 8–10%. Liquidity ratios indicate a healthy current ratio above 1.4, though the quick ratio suggests reliance on inventory for short-term obligations. Solvency analysis shows a balanced debt-to-equity structure, with leverage kept at manageable levels. Efficiency ratios highlight strong inventory turnover but slower receivable collection, reflecting challenges in managing foreign buyers’ payment cycles. The study also identifies several challenges faced by the firm and the broader RMG industry, including compliance costs, wage hikes, exchange rate volatility, and global competition from countries like Vietnam and India. Despite these hurdles, Muazuddin Textile Ltd demonstrates resilience through strategic investments in automation, sustainability practices, and market diversification. Based on the analysis, the report recommends improving receivable management, diversifying export destinations, adopting advanced technology to reduce production costs, and strengthening sustainability initiatives to attract premium buyers. These measures will enhance financial performance and ensure long-term competitiveness in the global apparel market. In conclusion, the financial performance analysis of Muazuddin Textile Ltd provides valuable insights into the strengths and weaknesses of RMG firms in Bangladesh. The study underscores the importance of sound financial management, strategic investment, and adaptability to global market dynamics for sustaining growth in this critical sector.