Textile Industry in Bangladesh: An Analysis of CVP


Department of Business Administration, Mawlana Bhashani Science and Technology University, Santosh, Bangladesh


The primary attempt of this paper is to evaluate the performance of manufacturing companies based on CVP (Cost-Volume-Profit) analysis in Bangladesh. To attain this purpose, 14 manufacturing companies have been surveyed from Textile Industry. This study has also been attempted to examine the influence of key indicators of CVP analysis in performance evaluation in textile industry. The study finds that the average contribution margin ratios are 16.13% in the year 2013 and 15.57% in the year 2012. So, average contribution margin ratio has increased by 0.56% in the year 2013. Again the average margin of safety percentage (MS %) are 53.59% in the year 2013 and 51.46% in the year 2012. So, average margin of safety percentage has increased by 2.13% in the year 2013. This indicators represent textile industry is increasing operating profit with contribution margin. Finally, findings inform that the other indicators of CVP techniques such as contribution margin, break-even-sales, and margin of safety have changed positively where the degree of operation leverage (DOL) and earnings per share (EPS) have changed negatively in the year 2013 than the year 2012. This study also provides some suggestions against precincts in applying CVP as a measure of performance.