Financial performance analysis of Argon Denims Ltd. (a sister concern of Evince Group) and its risk management strategies

Abstract

Argon Denims Ltd is a 100% export-oriented denim fabrics manufacturer, has a significant footprint in the denim industry in Bangladesh. With its production ADL sufficiently meets the local demand too, in special scenario. In this report, ADL’s financial performance has been illustrated broadly; moreover, this report also tried to bring risk management strategies into consideration. With the use of essential financial indicator such as growth of revenue, profitability, return on assets & equity (ROA & ROE); the analysis in the report gives a scenario of continuous performance improvement. In the analysis, significant Compound Annual Growth Rate (CAGR) represents a possibility of ADL’s potential of increasing market demand with its innovative products. Though the company’s revenue growth shows satisfactory result but the company still struggling in its profitability measure, thus the company shows inefficiency in operation. For running the business seamlessly by avoiding any prospective risk ADL designed a multidimensional risk management framework that covers market risk, operational flexibility, and financial risk due to currency fluctuations. Moreover, ADL’s commitment to sustainability throughout its operation and aligning with regulatory standards ensures competitive advantage in the market. ADL illustrates a praiseworthy improvement in generating revenue with lower profitability ratio alongside a moderate dependency on debt indicates lower financial risk. Moreover, ADL’s strong risk management practices enables to face industry challenges alongside capturing any potential growth opportunities. This report offers some advises regarding diversification of markets, variation in product portfolio, modern technology inclusion in the operation, and regular improvement of risk strategies to ensure sustainability.