Acknowledgement

All praise to Almighty Allah.

At first, we are thankful to our almighty Allah who gives us strength to complete this report. In
the process of doing this project, we would like to pay our gratitude and respect to some
important person for their kind cooperation.
Then, we are very much grateful to our course teacher, Mohammad Enamul Haque, assistant
professor, who gave us opportunity to do an assignment on Financial Statement Analysis of
BRAC Bank Ltd.. e are also very pleased to him for giving clear concept to us a!out the
topic.
Finally, e would like to thank our authority of "I". #hey provided this course to make us
more prepare for near future.
#hank you all for your kind cooperation #hank you all for your kind cooperation
! " a g e
Executive Summary
$ow%a%days, financial statement analysis gives the information to !oth e&ternal and internal
users to make some sort of decision in the process of doing !usiness. As it is an important issue
that has !een assigned !y our honora!le course teacher Moh. Enamul Haque to make an
assignment on Financial Statement Analysis of BRAC Bank ltd .#his is the partial
requirement of our ''A program( there is no other purpose to prepare the assignment and the
information of the report will keep confidentially. )inancial statement information is used !y
!oth e&ternal and internal users, including investors, creditors, managers, and e&ecutives. #hese
users must analy*e the information in order to make !usiness decisions, so understanding
financial statements is of great importance. +everal methods of performing financial statement
analysis e&ist.
All financial statements are essentially historically historical documents. #hey tell what has
happened during a particular period of time. However most users of financial statements are
concerned a!out what will happen in the future. +tockholders are concerned with future earnings
and dividends. ,reditors are concerned with the company-s future a!ility to repay its de!ts.
Managers are concerned with the company-s a!ility to finance future e&pansion. .espite the fact
that financial statements are historical documents, they can still provide valua!le information
!earing on all of these concerns.
)inancial statement analysis involves careful selection of data from financial statements for the
primary purpose of forecasting the financial health of the company. #his is accomplished !y
e&amining trends in key financial data, comparing financial data across companies, and
analy*ing key financial ratios.
In our report we have analysis financial statements of '/A, 'ank ltd !y using +0#, #rend
Analysis( 1ear to 1ear ,hange, and /atio Analysis. Major ratios are used in the assignment as
follows2 3iquidity, operating performance, leverage, and coverage ratio. e tried to show which
ratio stands for what and how in determined the financial position of the !ank, and usefulness to
the investor.
# ! " a g e
BRAC Bank Limited
,reating opportunities and pursuing market niches not traditionally met !y conventional !anks
primarily drive '/A, 'ank 3td, a full service commercial !ank with local and international
shareholding. '/A, 'ank has !een striving to provide 4!est% in 5the%class6 services to its diverse
range of customers spread across the country under an on%line !anking platform.
#oday, '/A, 'ank is one of the fastest growing !anks in the country. In order to support the
planned growth of its distri!ution network and its various !usiness segments, '/A, 'ank is
currently looking for am!itious, goal oriented, enthusiastic, individuals for various !usiness
operations.
#he reason '/A, 'ank is in !usiness is to !uild a profita!le and socially responsi!le financial
institution focused on markets and !usinesses with growth potential, there!y assisting '/A, and
stakeholders !uild a 2just, enlightened, healthy, democratic and poverty free 'angladesh. #his
means to help make communities and economy of the country stronger and to help people achieve
their dreams. #hey fulfill the purpose !y reaching for high standards in everything they do for their
customers, their shareholders, their associates and their communities upon, which the future
prosperity of their company rests.
$ ! " a g e
Background
'/A, 'ank 3td is a scheduled commercial !ank in 'angladesh. '/A, 'ank committed its
!usiness operation on 7
th
8uly 9::;, in .haka, 'angladesh. #his !ank is mainly owned !y the
largest $<0 in 'angladesh%'/A, =Bangladesh Rural Advancement Committee). #he !ank has
positioned itself as a new generation !ank with a focus to meet diverse financial needs of the
economy.
Formation and stat%s of the &ank'
''3 is esta!lished under the !anking companies act, ;>>; and incorporated as a pu!lic limited
company !y shares on 9:
th
May ;>>> under the companies act, ;>>7 in 'angladesh. #he primary
o!jective of the !ank is to carry on all kinds of !anking !usinesses. #he !ank has started its
operation on 7
th
8uly, 9::; !y special permission of +upreme ,ourt.
Shareholders of BRAC BA() Ltd'
#he shareholders of '/A, 'ank are as follows2

(A*+ (,. ,F S-AR+ A*,.(T
/T)0
1
'/A, ?;@?>:: ?;@?>:::: A?. 7@BC
International )inance ,orporation =I),D B@E@:: >7>B:::: ;B. >>AC
+hore ,ap International 3td. >7>B:: B@E@:::: ;@. E;7C
0thers A:: A: :. :;9C
#0#A3 E:::::: E:::::::: ;::C
Branches' #here are 9A !ranches of '/A, 'ank 3td through out the country. ;7 of them are
inside .haka city, ; in ,omilla, ? in ,hittagong, A in +ylhet, ; in /ajshahi and ; in Fhulna. 'ut at
the end of this year, the target of '/A, 'ank to reach E: !ranches through out the country.
2 ! " a g e
Major Banking Operations
'/A, 'ank has a centrali*ed !anking structure through online !anking system that resem!les the
A'$ AM/0 model. '/A, 'ank consisted of four divisions namely% Retail Banking, Small and
*edi%m +nterprise 3i4ision, Corporate Banking, and Treas%ry 3i4ision.
Mi ssi on
'/A, 'ank will adhere to higher professional and ethical !usiness principles are internationally
accepta!le !anking and accounting standards.
Every '/A, 'ank professional will need first of all a commitment to e&cellence in all that heGshe
does, a keen desire for success, a determination to e&cel and a drive to !e the !est. #hey will
individually and jointly learn continuously from customers and professional colleagues around the
glo!e to improve the way they do !usiness so that they are the !est. #hey will walk that e&tra mile
enthusiasm and empathy to serve their customers succeed in their !usiness and remain loyal to
their !ank. #hey will set up goals for themselves and then e&ceed the goals that they set up.
Vi si on
'/A, 'ank will !e a unique organi*ation in 'angladesh. It will !e a knowledge !ased
organi*ation where the '/A, 'ank professionals will learn continuously from their customers and
colleagues to add value. #hey will work as a team, stretch themselves, innovate and !reak !arriers
to serve customers and create customer loyalty through a value chain of responsive and
professional service, !usiness prudence, efficiency and adding value will !e the operative words of
the organi*ation.
'/A, 'ank will serve their customers with respect and will work very hard to instill a strong
customer service culture throughout the !ank. It will treat its employees with dignity and will !uild
a company of highly qualified professionals who have integrity and !elieve in the !ankHs vision
and who are committed to its success. '/A, 'ank will !e a socially responsi!le institution that
will not lend to !usinesses that have a detrimental impact on the environment and people.
5 ! " a g e
Goal s
'/A, 'ank will !e the a!solute market leader in the num!er of loans given to small and medium
si*e enterprises, salaried persons, teachers, students, highfliers, !usinessmen etc. through out
'angladesh. It will !e a world class organi*ation in terms of service quality and esta!lishing
relationship that help its customers to develop and grow successfully. It will !e the !ank of choice
!oth for its employees and its customers, the model !ank in the part of the world.
Pri nci pl es
3ike every organi*ation '/A, 'ank has also some principles. #hese are2
0utstanding customer service
Effective and efficient operation
+trong capital liquidity
Aggressive leading policy
+trict e&pense discipline
Speci al Features
Inter%!ranch transaction =onlineD
,ustomer oriented loan
,orporate !anking
,ash management
A#M and 'IM service
3ocker service
Iriority !anking
6 ! " a g e
Busi ness Areas
#here are mainly three major !usiness areas where the '/A, 'ank 3td is performing with high
reputation. #hese areas are2
/etail !anking
,orporate !anking
+mall and medium scale enterprises =+MED

,&7 ect i 4e of t he St %dy
0ur main o!jective is to find the financial performance of '/A, 'ank 3td and learn the critical
ratios that can help in our practical life through enhancing practical knowledge a!out financial
statement analysis. #his study attempted to understand the financial conditions of BRAC Bank
on different segments such as liquidity, profita!ility J solvency. #he purpose is also to make
recommendations for improving the financial sta!ility and soundness of different services
provided to the Investor of '/A,. It is also the purpose of the researcher to help the
management !y providing an idea to take appropriate decisions a!out the quality of the investing
J financing in future.
Scope of t he St %dy
#he scope of this study was strictly confined to the financial statements J personal contact with
the employees of '/A, 'ank 3td. #o collect the information we have used we! site of the
company and use the annual report of the company.
Li mi t at i on of t he s t %dy
#here were some restrictions to have access to the information confidential !y concern
authority.
#ime and cost constraints other limitations regarding this analysis.
3ack of e&perience.
Analysis was !ased mainly on financial statements.
8 ! " a g e
Rat i o Anal ys i s
)inancial analysis is the procedure of distinguishing the fiscal effectiveness and impuissance of
the firm !y properly esta!lishing kinships !etween the particulars of the 'alance +heet and the
Irofit and 3oss account. /atio analysis is a important tool of financial analysis useful to measure
the performance of an organi*ation.
/atio analysis is a procedure of comparing one figure against another, which make ratio, and the
assessment of the ratios to make proper analysis a!out the effectiveness and impuissance of the
procedures of an enterprise. A ratio is defined as, Ka fraction whose numerator is the -antecedent-
and denominator the -consequent-K. It is simply an e&pression of one num!er in terms of another.
#he relationship !etween two accounting varia!les, e&pressing mathematically is known as an
accounting ratio.
Rat i os are +9press ed i n di f f erent :ays '
Iure /atio2 In this case one num!er is divided !y another num!er so as to e&press the
ratio in a pure ratio form.
Iercentage2 In order to e&press the ratio in percentage, one num!er is taken as the
numerator, another as the denominator and multiplied !y ;::.
#imes2 ,ertain items of financial statements can !e !etter e&pressed in the form of a rate.
E.g. the movement of stock during the year has to !e e&pressed in num!er of times
.aysGeeksG Months2 ,ertain items of financial statements can !e !etter e&pressed in the
form of days or weeks or months. E.g. de!tor-s collection period, credit payment period,
movement of stock.
Money2 In this case the numerator is divided !y the denominator and the resultant figure
is e&pressed in terms of money. E.g. earnings per share, dividend per share.
,&7 ect i 4e of Rat i o Anal ys i s
+tandardi*e financial information for comparisons
Evaluate current operations
,ompare performance with past performance
,ompare performance against other firms or industry standards
+tudy the efficiency of operations
+tudy the risk of operations
.sef %l nes s of Rat i o Anal ys i s t o di f f erent "art i es
; ! " a g e
Investors, !oth present as well as potential investors.
)inancial analyst
Mutual funds.
+tock !roker and stock e&change authorities.
<overnment
#a& department
,ompetitors.
/esearch analysts and students.
,ompany-s management.
,reditors and suppliers.
3ending institutions% !anks and financial institutions.
)inancial managers.
0ther interested parties like credit rating agencies, etc.
< ! " a g e
Ad4ant age of Rat i o Anal ys i s
/atio analysis is an important and age%old technique of financial analysis. #he following are
some of the advantages G 'enefits of ratio analysis2
Simplifies financial statements' It simplifies the comprehension of financial statements.
/atios tell the whole story of changes in the financial condition of the !usiness
Facilitates inter=firm comparison' It provides data for inter%firm comparison. /atios
highlight the factors associated with with successful and unsuccessful firm. #hey also
reveal strong firms and weak firms, overvalued and undervalued firms.
-elps in planning' It helps in planning and forecasting. /atios can assist management,
in its !asic functions of forecasting. Ilanning, co%ordination, control and
communications.
*akes inter=firm comparison possi&le' /atios analysis also makes possi!le comparison
of the performance of different divisions of the firm. #he ratios are helpful in deciding
a!out their efficiency or otherwise in the past and likely performance in the future.
-elp in in4estment decisions' It helps in investment decisions in the case of investors
and lending decisions in the case of !ankers etc.
> ! " a g e
Li mi t at i on of Rat i o Ananl ys i s
#he ratios analysis is one of the most powerful tools of financial management. #hough ratios are
simple to calculate and easy to understand, they suffer from serious limitations.
;. Limitations of financial statements' /atios are !ased only on the information which has
!een recorded in the financial statements. )inancial statements themselves are su!ject to
several limitations. #hus ratios derived, there from, are also su!ject to those limitations.
)or e&ample, non%financial changes though important for the !usiness are not relevant !y
the financial statements. )inancial statements are affected to a very great e&tent !y
accounting conventions and concepts. Iersonal judgment plays a great part in
determining the figures for financial statements.
9. Comparati4e st%dy re?%ired' /atios are useful in judging the efficiency of the !usiness
only when they are compared with past results of the !usiness. However, such a
comparison only provide glimpse of the past performance and forecasts for future may
not prove correct since several other factors like market conditions, management policies,
etc. may affect the future operations.
?. Ratios alone are not ade?%ate' /atios are only indicators( they cannot !e taken as final
regarding good or !ad financial position of the !usiness. 0ther things have also to !e
seen.
7. "ro&lems of price le4el changes' A change in price level can affect the validity of ratios
calculated for different time periods. In such a case the ratio analysis may not clearly
indicate the trend in solvency and profita!ility of the company. #he financial statements,
therefore, !e adjusted keeping in view the price level changes if a meaningful comparison
is to !e made through accounting ratios.
E. Lack of ade?%ate standard' $o fi&ed standard can !e laid down for ideal ratios. #here
are no well accepted standards or rule of thum! for all ratios which can !e accepted as
norm. It renders interpretation of the ratios difficult.
! " a g e
A. Limited %se of single ratios' A single ratio, usually, does not convey much of a sense. #o
make a !etter interpretation, a num!er of ratios have to !e calculated which is likely to
confuse the analyst than help him in making any good decision.
ypes o! "inancial Ratios
Li qui di ty Rati o:
It shows the a!ility of a firm to meet up its short%term financial o!ligation when it is come due.
Current Rati o:
It measures the a!ility of a company to meet up its current de!ts with current assets. Standard
ratio #' .
CR @ C%rrent assets A C%rrent lia&ilities
Aci d Test/Qui c Rati o:
It measures the a!ility of a company to meet up its current lia!ilities with the most liquid current
assets. Standard Ratio '.
BR @ CC%rrent assets =Dn4entoryE "repaid +9pensesF A C%rrent lia&ilities.
Cas! Con"ersi on Cycl e:
It-s an indicator of the company-s efficiency in managing its important working capital assets(
second, it provides a clear view of a company-s a!ility to pay off its current lia!ilities.
CCC @ 3D, G 3S, =3",
3ays Dn4entory ,%tstanding' .I0 gives a measure of the num!er of days it takes for
the company-s inventory to !e converted into sales, either as cash or accounts receiva!le.
3D,@ A4erage Dn4entory A Cost of Sales per 3ay
3ays Sales ,%tstanding2 .+0 gives a measure of the num!er of days it takes a
company to collect on sales that go into accounts receiva!les.
3S,@ A4erage Acco%nt Recei4a&les A (et Sales per 3ay
3ays "aya&les ,%tstanding' .I0 gives a measure of how long it takes the company to
pay its o!ligations to suppliers.
# ! " a g e
3",@ A4erage Acco%nts "aya&le A Cost of Sales per 3ay
#peratin$ Per%or&ance Ratio:
#hese ratios look at how efficiently and effectively a company is using its resources to generate
sales and increase shareholder value.
Recei "a'l e Turno"er:
It provides insight into quality of the receiva!le. +tandard ratio B times to > times.
RT, @ Ann%al net credit sales A A4g. Acco%nts Recei4a&le
Recei "a'l e Turno"er i n (ays:
It represents average no. of days receiva!les are outstanding !efore !eing collected.
RT,3 @$65 A Recei4a&le t%rns o4er
)n"entory Turno"er:
It provides insight into liquidity of the inventory. +tandard ratio B times to > times.
DT, @ Cost of goods sold A Dn4entory
)n"entory Turno"er in (ays:
It shows average no. of days the inventory is held !efore it is turned into accounts receiva!le
through credit sales.
DT,3 @ $65 A Dn4entory t%rn o4er
Total Assets Turno"er:
It measures relative efficiency of total assets to generate sales. +tandard ratio 9 times.
TAT, @ (et sales A Total assets
*ori n$ Capi tal Turno"er:
It indicates the efficiency of working capital management. +tandard ratio A times to @ times.
HCT, @ Sale A Horking Capital
Sal es or Re"enue Per +&pl oyee
$ ! " a g e
As a gauge of personnel productivity, this indicator simply measures the amount of dollar sales,
or revenue, generated per employee.
SIR " + @ Re4en%e A (o. of +mployee
Le"era$e Ratio:
It gives a general idea a!out the company-s overall de!t load as well as its mi& of equity and used
to determine the overall level of financial risk a company and its shareholders face.
3e&t +?%ity Ratio' It indicates the e&tent to which de!t financing is used relative to
equity financing. +tandard norm E:2E: for pu!lic and A:27: to @E29E for private.
3+R @ Total de&t A +?%ity
+?%ity Ratio' It measures the degree to which a firm-s activities are funded !y owner-s
funds.
+R @ +?%ity A Assets
3e&t Ratio' It shows the relative e&tent to which the firm is using !orrowed capital.
3R @ Total de&t A Total assets
CapitaliJation Ratio' It measures the de!t component of a company-s capitali*ation to
support a company-s operations and growth and it delivers the key insight into a
company-s use of leverage.
CR @ Long=term 3e&t A CLong=term 3e&t G Share=holders
+?%ity
Co"era$e Ratio:
It measures the a!ility to cover de!tHs service of a firm.
Time Dnterest +arned Ratio' Indicates the a!ility to cover interest charges. +tandard
norm B times.
TD+R @ +BDT A Dnterest e9penses
Fi9ed Charge Co4erage Ratio' #his ratio is the e&tension of time interest earned ratio
which includes the firmHs annual long%term lease payments and sinking fund payments.
2 ! " a g e
FCCR@ /+BDT G Lease payments0 A /Dnterest charges G Lease payments G
Csinking f%nd paymentsG K= Ta9 rateL0
Pro,ta'ility Ratio:
It shows the return on sales and capital employed.
Mross "rofit *argin /M"*0' It shows gross profit on per unit sales. +tandard norm
9EC.
M"* @ Mross profit A Sales
(et "rofit *argin /("*0' It e&presses net profit after ta& on per unit sales. +tandard
norm 7C to AC.
("*@(et profit after ta9 A Sales
+ffecti4e Ta9 Rate' It gives a good understanding of the ta& rate the company faces.
+TRL Income #a& E&penses M Ire%ta& income
Ret%rn on Dn4estment IAssets' It shows the earning power of the invested capital.
+tandard norm ;:C to ;9C.
R,D @ (et profit after ta9 A Total assets
Ret%rn on +?%ity /R,+0' It shows the earning power of the shareholders !ook value
investment.
R,+ @ (et profit after ta9 A +?%ity
Ret%rn on Capital +mployed' It gauges management-s a!ility to generate earnings from
a company-s total pool of capital.
R,C+ @ (et Dncome A Capital +mployed
Capital +mployed @ A4erage de&t Lia&ilities G A4erage ShareholdersN +?%ity
5 ! " a g e
Maret Value Ratio:
It relates the firmHs stock price to its earnings and !ook value per share.
"I+ Ratio' It shows the how much investor is willing to pay per unit of reported profit.
"+R @ "rice per share A +arning per share
*arket E Book Ratio' It gives another indication of how much investors regard the
company. +tandard norm ;: times to ;E times.
*BR @ *arket price per share A Book 4al%e per share.
Predictor Ratios:
It shows the potential growth or failure.
S%staina&le Mro:th Rate2 It is the multiplication of the retention ratio and the firmHs return on
equity.
Cas! Flo- Ratio:
#hese ratios focus on the cash !eing generated in terms of how much is !eing generated
and the safety net that it provides to the company.
,perating Cash Flo:ISales Ratio' It gives investors an idea of the company-s a!ility to
turn sales into cash.
,CFSR@ ,perating Cash Flo:s A Sales
Free Cash Flo:I,perating Cash Flo: Ratio' #his ratio measures the relationship
!etween free cash flow and operating cash flow. )ree cash flow is the difference !etween
operating cash flow and capital e&penditures, which, in analytical terms, are considered
to !e an essential outflow of funds to maintain a company-s competitiveness and
efficiency.
FCFI,CFR@ CFree Cash Flo: E Capital +9pendit%resF A ,perating Cash Flo:
6 ! " a g e
Cash Flo: Co4erage Ratios' #his ratio measures the a!ility of the company-s operating
cash flows to meet its o!ligations % including its lia!ilities or ongoing concern costs.
Short=term 3e&t Co4erage@ ,perating Cash Flo:s A Short=term 3e&t
Capital +9pendit%re Co4erage@ ,perating Cash Flo:s A Capital
+9pendit%re
3i4idend Co4erage@ ,perating Cash Flo:s A Cash 3i4idend
3i4idend "ayo%t Ratio' #his ratio is an indicator of how well earnings support the
dividend payment.
3"R @ 3i4idend per Common Share A +arnings per Share
)n"est&ent Valuation Ratio:
#his ratio is used !y investors to estimate the attractiveness of a potential or e&isting
investment and get an idea of its valuation.
"riceIBook Oal%e Ratio' It is an indication of how much shareholders are paying for the
net assets of a company.
"riceIBook Oal%e Ratio @ Stock "rice per Share A Shareholders +?%ity per Share
"riceICash Flo: Ratio' #his ratio is used !y investors to evaluate the investment
attractiveness, from a value standpoint, of a company-s stock.
"riceICash Flo: Ratio @ Stock "rice per Share A ,perating Cash Flo: per Share
"riceI+arnings Ratio' It shows the how much investor is willing to pay per unit of
reported profit.
"+R @ "rice per share A +arning per share
"riceI+arnings to Mro:th Ratio' #his ratio is a refinement of the IGE ratio and factors
in a stock-s estimated earnings growth into its current valuation.
"+MR @ "I+ Ratio A +arnings per Share Mro:th
"riceISales Ratio' #his ratio measures the price of a company-s stock against its annual
sales, instead of earnings.
"SR@ Stock "rice per Share A (et Sales per Share
3i4idend Pield' It evaluates the shareholdersH return in relation to market value of the
share.
3P @ Ann%al 3i4idend per Share A Stock "rice "er Share
8 ! " a g e
+nterprise Oal%e *%ltiple' #his measurement allows investors to assess a company on
the same !asis as that of an acquirer J it serves as a pro&y for how long it would take for
an acquisition to earn enough to pay off its costs.
+O*@ +nterprise Oal%e A +BDT3A
; ! " a g e
SH,T analysis of BRAC Bank2
+0# of '/A, 'ank in the following fields2
Strengths
,onservative approaches to reduce the risk of
classification.
Assigning adequate power to the top management
to monitor credit operation.
,lear specification of documentation process to
reduce the risk of classification.
Iroviding guideline to furnish loans only to small%
scale industries for short time.
,lear definition of measures in dealing with
foreign e&change transaction.
+trong procedure in selection of new !orrower.
Heaknesses
#echniques specified for credit appraisal is not
sufficient.
More dependency on <overnment sources for
deposit mo!ili*ation.
+ervices offered are in adequate.
,pport%nities
+uita!le for small%scale !usiness, this is growing
day !y day.
<overnment and International agenciesH positive
attitude toward low classification rate.
Threats
$ot suita!le for future competition in the market.
/educed <overnment support in future.
*atching of Strength and ,pport%nities :ith Heaknesses and Threats'
In the credit policy we have found everything all right e&cept the techniques used for screening
the client. '/A, !ank has some very efficient and highly educated professionals who can easily
solve the pro!lem if they concentrate on the issue. +o the weakness can !e eliminated easily
through its strength.
#he credit policy of '/A, 'ank has !een perfectly designed depending on the government
funds and assistance. 'ut as it is sure that, government will sell its share in near future '/A,
has to revise its credit policy !y considering alternative source of fund. International funds can
!e alternatives for government source if '/A, can continuously reduce its classification rate.
Alike other !ank '/A, can enforce its marketing operation to gra! the small savings of the
middle class. And a small change is enough to do so as the strength of the present credit policy is
capa!le to take any pressure.
< ! " a g e
Ratio Analysis of BRAC Bank Ltd
Li?%idity Ratio
C%rrent Ratio L ,urrent Assets G ,urrent 3ia!ilities
;:.>E>;? times =9:;:D
C%rrent Ratio L ,urrent Assets G ,urrent 3ia!ilities
L ?E.>E>E> times =9::>D
#he 9:;: ratio of ;:2; means that for every taka of current lia!ilities, '/A, has ;: taka of
current assets. #he company has standard current ratio more than 92; though it has decreased its
current ratio from 9::> that is almost ?A .+uppose industry averages is 72; then its liquidity
position is strong.
Assets *anagement Ratio'
Fi9ed assets T%rno4er
)IA L +ales G $et )i&ed Assets
L >E7:G ;@7>
L E.E times =9:;:D
In 9::>, )IA is L @9A7G;A?BL 7.E times
It shows that the company used its fi&ed assets intensively or efficiently.
3e&t *anagement Ratio
3e&t +?%ity Ratio @ Total 3e&t I Total +?%ity
@ >:@>G >7;9
L >AC =in 9:;:D
Dt sho:s that <61 de&t comes from +?%ity.
+?%ity Ratio @ +?%ity I Assets
@ >;79I;;>E:
L @C for 9:;:
It shows that @C assets financed from '/A,Hs equity.
3e&t Ratio @ 3e&tI Assets
L ?:::G;;>;E:
L 9.EC in 9:;:
#> ! " a g e
#.51 assets are financed from its de&t.
# ! " a g e
"rofita&ility Ratio
"rofit *argin L $et income G 0perating Income
L ;AA7G>E7:
L ;@C =9:;:D
In 9::> L ;?:7G@9A7 L ;AC
'/A, e&perienced an increase in profit margin and each taka of sales give or generated
adequate net income for the company.
Ret%rn on Assets @ $et income G total assets
L ;.EEC in 9:;:, ;.EAC in 9::> =given in annual reportD
It shows the return of invested assets, is lower in !oth the years and upward trend.
Ret%rn on Dn4estment @ /0I L $et profit after ta& M #otal assets
L >C in 9:;: and ;9.?:C in 9::> =given in the Annual /eportD
/eturn on investment of '/A, !ank has decreased from 9::>, which means in 9:;:, '/A, has
taken > percent return against every taka invested.
Ret%rn on +?%ity @ $et income availa!le to common stock holders G common equity
@ ;.<51 in 9:;: and ;>.;>C in 9::>=calculated in annual reportD
=Assuming that all equity provided !y only common shareholders.D #he profita!ility of owners
investments has decreased 9::> to 9:;:.#he company is providing less amount of return to its
common shareholders than previous year.
Cost of 3eposit' in #>> 6.51 and in #>>< it :as ;.2<1, which means to get every amount
of deposit the !ank has reduced its cost from 9::>.
Heighted A4erage +arning "er share @ Income G ,ommon +hare outstanding
L A:.?: in 9:;: and A:.>B in 9::>
=<iven in annual reportD
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It shows that net income earned on each share of common stock is decreased during 9:;: than
9::>.
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Concl%sion
'/A, 'ank intends to set standards as the market leader in 'angladesh. It demonstrates that a
locally owned institution can provide efficient, friendly and modern !anking service on a profita!le
!asis. It products earning and payment dividends that can support the activities of '/A,, the
'ankHs major shareholder. .evelopment and poverty alleviation on a countrywide !asis needs
mass production, mass consumption and mass financing. '/A, 'ank goal is to provide mass
financing to ena!le mass production and mass consumption and there!y contri!ute to the
development of 'angladesh.
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Recommendation
'/A, 'ank 3td introduces a new dimension of !usiness among the local !ank in the financial
market of 'angladesh in /etail Iroduct Management. #he !ank is doing !usiness with more than
fifteen retain products. 'ut in the comple& !usiness environment and diversified !usiness world
these products cannot meet the customer needs. #oday, customer classes are vi!rant and it is
difficult to keep the customers without an appropriately designed and also is not properly market
driven. .eveloping a market driven product management system is essential for any company if
the company would like to win the competitive condition and would like to survive in futuristic
competitive market setting. In this regard, following specific recommendations are forwarded for
the development of product management of '/A, 'ank 3td.
0fficials whom are involved in ,ustomer +ervice should !e trained properly. 'ecause
some time they cannot give proper suggestions to the customer queries. #hough they try
to give at their !est.
#heir jo!s should !e mentioned more frequently,
#hey should !e made somewhat freer from doing !usiness,
#here will !e a separate /etail ,redit .epartment,
3ink !etween ,+0s and ,+M should !e more easier,
,harges and fees may !e reduced for more customer satisfaction. /ecently the charges
of ''3 product and customer service have increased without informing to the
customers. +o that creates a lot of customer dissatisfaction. According to the customers,
the charges should !e lesser so that every type of customer can !ear it,
$um!er of A#M !ooths can !e increased,
A#M should take good care. 'ecause it has !een seen that most of the time they remain
out of order or out of cash,
Each !ranch should have 'IM,
'IM =!ills paying machineD should take care regularly. 'ecause most of the time they
remain out of order,
/elationship !etween 'ank and customers should !e created and increased,
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Iroducts should !e more customer friendly,
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