Chapter: 1

Introduction
Beyond providing physical shelter, housing may have significant impact on the lives
of the dwellers in terms of skills enhancement, income generation, increased security,
health, self-confidence and human dignity. In Bangladesh, real estate is a recent
phenomenon, although such activities started sometime in 1964. Ispahani Group was
the pioneer in this sector. During 1970s there were fewer than five companies in
Bangladesh engaged in this business. But in early 1980s with the inception of Eastern
Housing Ltd., the apartment project started flourishing. Now this is a booming sector
of the economy. Since late 1980s, it came within the purview of business field.
As a fast growing city of Bangladesh, such business was initially concentrated in
Dhaka. Such activities were later on spread to Chittagong and Khulna cities. At
present, there are about 400 firms operating apartment business and they have
apartment projects in Dhaka City as well as in some other cities. In the real estate
business process, some prospects and problems are involved. Prospect is that human
being is able to dwell in, despite the fact that they have limited land and problems are
of several types.

OBJECTIVES & SCOPES:

The main purpose of this study is to create a bridge between our theoretical
knowledge & the practical scenario.
The specific objectives of the study are:
1.
2.
3.
4.

To gain an understanding about the overall situation of Real Estate Business.

To assess the role and contribution of Real Estate Business in our economy.
To identify the major problems faced by the companies
To assess the future prospect of the Real Estate Business.

METHODOLOGY:
To prepare this report I used both primary and secondary information.
The primary sources:
?
?
?
?

Direct Observation
Personal Interviews
Survey
Telephone inquiries

The secondary sources are the information was collected from annual report and
different publications.
LIMITATIONS:
The study was conducted facing some obstacles and constraints.
Data constraint: Due to the scattered nature of business and unwillingness of
disclosing sensitive information as well as unavailability of secondary data, this paper
was done on the basis of primary data. So there remained a probability of getting
opinion based data which are not real in true sense.
Literature constraint: No major work has so far been done in Bangladesh in this
sector. So there is a dearth of literature in this field.

CHAPTER: 2
LITERATURE REVIEW

The concept of RES is developed to resolve the residential facility which is a big
problem in a densely populated country like ours. Especially the cities where
unavailability of land tends to raise the tendency of high rise apartments rather than
private dwellings.
At present the housing condition of urban area in Bangladesh, in general, is quite
unimpressive. In all metropolitan cities, there is acute shortage of housing supply and
the backlog is continually on the increase. Inadequate supply of dwelling units for
middle and low income people and high rental value are among the most severe
challenges afflicting urban living in Dhaka. At present in our country the annually
required shelter varies from 3 lakh to 5.5 lakh units. Bangladesh will need to construct
approximately 4 million new houses annually to meet the future demand of the next
20 years. Now Dhaka needs 50,000 new houses annually to accommodate its growing
population. But the existing annual supply is only 20,000 units. So there is a huge
backlog and it is increasing every year.

In Bangladesh, the rate of urbanization is very high further aggravated by high

population growth rate and rapid rural-urban migration. The current trend of urban
growth in this country is about 5%-6% per annum. This will change and increase
demand for habitat. At present 28% of the population of Bangladesh live in urban
areas, which will be 34% in 2025. The present estimated population of Dhaka is 10
million and estimated growth rate is 4.7% per annum. All these people need shelter.
To satisfy the housing of this huge explosive population Dhaka has attempted to
expand vertically. Here comes the need of real estate sector. They have been playing
very important role in providing housing regardless of high, middle and low-income
people since the past two decades.

Real Estate Development

In our country real estate business started in Dhaka in late seventies. The Eastern
Housing of Islam Group is the pioneer in this business. During 1970s there were
fewer than 5 companies in Bangladesh engaged in this business. In 1988 there were
42 such developers working in Dhaka and now in 2005 there are about 250 companies
engaged in this business. From the early 1980s the business has started to flourish and
in 1990s it has reached its peak. Towards the end of year 2000 there was slight
downfall in real estate sector. In 2003 this sector started showing growth again. To
strengthen the role of real estate sector some pioneer real estate companies together
built up an association named REHAB in 1991. At present it has 100 members.

As the RES developed, necessity of an association arose sharply. REHAB is the

outcome of that need. REHAB resolves the dissimilarities among the real estate
developers and tries to maintain a standard thus pulling all the developers in the
same vessel.

Formation of REHAB

Real Estate development in private sector in this country started in pre-liberation days
when Eastern Housing Ltd. in the mid 60s undertook land development project known
as Pallabi Project for housing purpose in the Mirpur area of the Dhaka city. The
concept of apartment development started in the late part of the 70s when Free School
Property Development Ltd. started development of ownership apartment in the
Siddeswori and Moghbazar areas of the Dhaka city followed by Eastern Housing Ltd.
During the 80s a number of companies came into existence and engaged in ownership
apartment development.

With the number of companies increasing gradually and various problems concerning
the housing sector having cropped up requiring early solution, necessity was strongly
felt for the formation of a trade association of the Real Estate business. The real estate
developers met together in a meeting held on December 12, 1991 at the Conference
Hall of the Dhaka Chamber of Commerce and Industries and formed an association
under the nomenclature of Real Estate and Housing Association of Bangladesh or
briefly REHAB.

On December 12, 1991 a 7-member Ad-hoc committee was formed with Maj. Gen.
(Retd.) Amzad Khan Chowdhury as President, Mr. M.S. Alam as General Secretary
and Brig. (Retd.) A.H.M. Abdul Momen, as Treasurer amongst others with the task of
forming a constitution for the new association. The Memorandum and Articles of
Association of REHAB was due at the earliest possible time. Government approval to
the formation of REHAB was received in June, 1992. In October, 1992 the
Association was incorporated with the Registrar of Joint Stock Companies,
Bangladesh as a trade association and in November, 1992 REHAB was enlisted as an
A class member of the Federation of the Chambers of Commerce and Industries

(FBCCI) with 5-members representing REHAB in the general body of FBCCI.

Thereafter election of the first Executive Committee comprised of the following:
1.

Brig. (Retd) A.H.M. Abdul Momen

-President

2.

Dr. Toufiq M. Seraj

- Senior Vice President

3.

Mr. Iftekhar A. Khan (Pintu Khan)

-Vice President

4.

Mr. M.S. Alam

- General Secretary

5.

Lt. Col. (Retd) Mahtabuddin Ahmed

-Treasurer

6.

Mr. Arshi Haider

- Member

7.

Mr. Nasrul Hamid

- Member

8.

Mr. Meer Showkat Ali

-Member

9.

Mr. A.K.M. Sahidullah

-Member

10.

Mr. Chowdhury Md. Shafi

-Member

11.

Mr. Manjurul Ahsan Chowdhury

-Member

REHAB - ITS INPUT IN THE GOVERNMENT POLICY MAKING

REHAB by its name has the function not only to control and govern RES but also
some influences in government policy making about housing that favours the overall
objectives of RES. In a sense it can be said that REHAB acts as an arbitrator in
between developers and the Government of Bangladesh.

Declaration of Housing as an Industry

To obtain recognition for the Housing Sector as an industry, efforts of REHAB have
met with partial success but there is hesitation in its implementation for lack of
necessary regulating orders. REHAB is pursuing the matter with authority concerned
but there appears to be inhibition in the mind of the authority concerned to the
issuance of regulating orders. However, REHAB will keep up its efforts.

VAT

Vat was to be recovered at the rate of 15% of the cost of an apartment. But REHAB
took up the case with NBR and succeeded in convincing the NBR with all facts and
figures to affect actual deduction of 1.98% of the price of an apartment. This is
because VAT is being paid at various stages of material procurement. VAT has been
enhanced since July, 1999 to 3%.

In fact in the process of working out the VAT enforcement, there developed a good
understanding between NBR and REHAB.

Financial Policy for Housing Sector

REHAB succeeded in this respect in a limited way in that it could convince the House
Building Finance Corporation (HBFC) about a close cooperation between the
developers and the HBFC. After few meetings the HBFC Board and REHAB
succeeded in enlisting its members with HBFC for financing the projects by offering
loan to prospective buyers through simplification of procedure and shortening the
period of processing of loan advance. REHAB made efforts but failed to convince the
authority concerned to set aside as percentage of total loan advance by schedule banks
for apartment purchase. The observation of the authority was that no directive could
be given in the days of liberalization. But it is emphasized that housing or shelter is

one of the basic needs and the Government must take appropriate steps to ensure easy
access to financial assistance to its citizens.
National Housing Policy
Representatives of REHAB were invited to participate in the formulation of National
Housing Policy during 1993. It can be said with satisfaction that the recommendations
of REHAB were quite constructive and were given due considerations in the policy.
However, it is stated that REHAB must be represented in any discussion relating to
housing sector, but many a times this has not happened.

Ministry of Public Works and RAJUK

The REHAB members have met Ministers & Officials of the Ministry of Public
Works and RAJUK many a times to put forward its views on policy guidelines on
housing, expansion of housing sector targeting the low and low-middle income group
through distribution of developed land by Government, compulsory membership of
all developers of REHAB and uniform transfer modalities of land and apartment by
Ministry of Public Works and RAJUK. A determined effort of REHAB have
succeeded in some cases but there still remain some problems which are neither at all
conduced to the growth of housing sector nor appropriate to offer opportunities to all
for some kind of shelter. However, REHAB's efforts are continuing to convince
authorities concerned to be pragmatic and rationales in viewing REHAB's
recommendations.
REAL ESTATE DEVELOPERS

To fulfill the need of housing problem several business organizations have involved in
RES. Here only the discussion is focused on those business organizations which are
associated with REHAB.

Name of the REHAB members

There are 141 members in REHAB. Their names are enlisted bellow.
Name of the members:

Aangina Construction Ltd.

Arcadia Property Development

Ltd,

ABC Real Estates Limited

Artisan Apartments Limited
Abode Properties Ltd.
Asset Developments Holdings Ltd,
Advanced Development
Consultants Ltd.
Advanced Development
Technologies,

Assurance Developments Limited,

Atlantic Developments Ltd,
Avenue Builders Ltd,

Agrani Apartment Ltd,

Al-Hassan Developers Ltd.
Alam's Real Estate Limited,

Banani Property Development

(Pvt.) Ltd,
Bangladesh Development
Company Ltd.

Amicus Corporation Limited

Bashati Consortium Ltd,
Amin Mohammad Foundation Ltd,
Basic Properties Ltd,
Amin Mohammad Lands
Development Ltd,

Bay Developments Ltd,

Anwar Landmark Ltd,

Bay Tower Limited

ANZ Properties Limited

Blue Bonnet Ltd,

Apartment Design Development

(Pvt.) Ltd,

Borak Real Estate (Pvt) Ltd,

BRAC Concord Lands Limited

10

Building Development And Design

Ltd,

Everest Holdings Technologies

Ltd,

Building For Future Ltd.

Family Living Ltd,

Building Technology Ideas Ltd,

G. K.Builders,

Century Realty Limited,

G. M. Properties Ltd.

Charuta Homes Ltd,

G.M. Real Estate Company (Pvt.)

Ltd,

City Axis Ltd,

Globe Construction Limited,
Concord Condominium Ltd,
Gold Hunt Development Co. ,
Concord Real Estate ,
Development Ltd,
Concord Real Estate,

Grameen Bangla Housing Limited,

Green Delta Housing And
Development (Pvt.) Ltd,

Building Products Ltd,

Habitat Builders Limited,
Confidence Builders Ltd,
Hassan And Associates Limited,
Configure Engineers &
Construction Co. Ltd,

Hamid Real Estate Consruction

Ltd,

Corolla Properties Limited,

Happy Homes Ltd,
Crescent Holdings Ltd,
Hi-Tech Associates Ltd,
Development Entrepreneurs Ltd,
Hivertech Limited ,
Dhaka Shelter (Pvt) Ltd,
Ideal Home Builders Limited
Dom Inno,
Intimate Home Builders Ltd,
East West Property, Development
(Pvt.) Ltd.

Ionic Builders Ltd,

Eastern Housing Ltd,

Jamuna Builders Limited,

Ena Properties,

Japan Garden City Ltd,

Equity Property Management

(Pvt.) Ltd,

Jib Constructions Ltd,

Kashba Housing Private Limited,

11

Keari Limited,

Northern Foundation Limited,

Ks Engineering Technology,

Oriental Real Estate Ltd,

Kusholi Nirmata Limited,

Pacific Housing Limited,

Latif Real Estate Ltd,

Palli Properties Pte. Limited,

Living Plus Limited,

Paradise Development
Constructions Ltd,

Livingstone Limited,
M Properties

Parvin Properties Technologies

Ltd,

M-Ark Realtors Limited,

Praasad Nirman Ltd,

Mega Builders Ltd.

Property Development Ltd,

Metro Makers Developers,

Queen's Garden,

Momen Real Estates Limited,

Rangs Properties,

Morphosis Developments Limited,

Realta Homes And Apartments Ltd,

Mtc Properties Ltd. Multiplan

Limited,

Reliance Development Associates

Ltd,

N. M. Housing Ltd, Nagar Builders

Ltd.

Remco (Pvt.) Ltd,

Ridge Park Holdings Ltd,

Nagar Homes Ltd,

Riead Properties Ltd,
Nandan Kanon Housing Ltd.
Royal Properties (Pvt.) Ltd,
Navana Real Estate Ltd,
Rupayan Housing Limited,
Neer Ltd,
Rupayan Real Estate Ltd,
Neptune Properties,
Russel Lodge Holdings Ltd,
Neptune Land Development Ltd,
Sagufta City Developers Ltd,
New Generation Construction Co.
Ltd,

Samycon Properties Ltd,

Noboudoy Housing Limited,

Shahjahan Group,

12

Shahjalal Property Ltd,

Shamsul Alamin Real Estate Ltd,
Shaptak Grihayan Limited,
Sheltech(Pvt.) Ltd.
Sheltech Towers Apts.(Pvt.) Ltd,
Shinepukur Holdings Ltd,
Siza Development Company Ltd,
Sky View Foundation Ltd,
South Breeze Housing Ltd,
SS Builders And Developers Ltd,

13

Chapter: Three
Practical Aspects

3.1. Introduction of Amin Mohammad Group

Amin Mohammad Group is a market leader in the real estate building and
development sector. It was started its journey in 1990.

Every individual has a dream

home in mind. We at Amin Mohammad Group are in the business of turning your dreams
into reality. Over the part quarter century Amin Mohammad Group Luxury apartment and
commercial buildings though developing lands in Dhaka city mostly located in
Dhanmondi, Gulshan, Banani, Uttara, Mirpur, Motijhil, Ashulia, Chittagong , Coxs
Bazar, & Sylhet have changed the Dhaka, Chittagong, & Sylhet skyline and presented
a new lifestyle.
Amin Mohammad Group is our environmentally responsible response to the rapid spate
of urbanization in Bangladesh. Pressures of urbanization in this country are compounded
by the unfavorable land man ration. Amin Mohammad Group has embarked upon a
mission to make the maximum use of minimum land being sensitive to both
environmental concerns and social continuity. Planned development by Amin
Mohammad Group of the sites around the city has added value to those areas, released
pressure on inner cities and persecuted the city dwellers with breathing space.
Professional team of design experts with mod outlook and engineers with state of the art
equipment are backed by an R & D team constantly probing human habitat horizons as
well as building technology. Their endeavors have resulted in the creation of aesthetically
inspiring architecture, environmentally friendly development and top quality building.
Amin Mohammad Group aim is to provide its clients with competitive price, quality
materials, & hand over project on time.
Amin Mohammad Group is the symbol of customer confidence.

Mission & vision of AMG

AMGs mission is both broad and focused. It builds on its vision and translates the
essence of that vision into projects that respond to board category of needs. Each of
AMGs activities however is characterized by the same commitment to comfort and
convenience.
The mission of Amin Mohammad Group is to provide service at an economic cost &
progress in diversity & continue to the growth of real estate sector in Bangladesh by
being the real estate market challenger.
The vision of Amin Mohammad Group is to offer unparallel service to create customer
delight & enhance real estate business. Their vision is to achieve excellence & different
sense of modern living style.

Objectives of the Company

To reach the goals of organization in individual aspects & the company as a whole.
Efficiency of the work force by employing their skills & abilities.
Providing employees with proper standards of job satisfaction.
Providing the organization with well trained & well motivated employees.
Communicate the policies to all employees of Human Resource Management issue.
The objective is to have a clear knowledge of planning, organization, leading &
Controlling aspects of Amin Mohammad Group.

Business Philosophy
Profit Maximization
Cost Minimization
Companys Wealth Maximization

 Create customer value & satisfaction

The Organizational Structure

The organ gram below depicts the organizational structure of Amin Mohammad Group

Chairman
Managing Director
Vice Chairman

The Deputy Managing

Director
Senior Executive Director
Director

Operation Director

Executive
Directive,
Marketing

Director, Land &

Development

Executive Director,
Operation

Director,
Ready-Mix

Director,
Corporate
Affairs

Executive
Director,
Procurement

Director,
Engineering &
Construction

Director,
Finance &
Accounts

Director, HR

Departments of the company:

In Amin Mohammad Group, Corporate Branch contains 7 major departments. The name
of those departments & activities are given below:

Reception Desk
Marketing & Sales Department
Administration & Business Department
Documentation & Recovery
Finance & Accounts Department
Procurement Department
Human Resources Management (HRM)

Reception Desk:
The main task at the reception desk is maintaining the inward & outward register, office
management, & telephone receiving. They also maintain a daily recall file which is
known as the Central Recall System.

Marketing & Sales Department:

Amin Mohammad Group has a very rich marketing department. A strong sales team &
aggressive marketing campaign has bought tremendous sales growth along with a
handsome market share.
Amin Mohammad Group becomes a market leader in the real estate industry.

Administration & Business Department:

The administration department of Amin Mohammad Group always looks after the whole
organization. They always run the organization smoothly. If any employee does any fault

then the department takes action against the employee. The company reward is given to
the employee who has done well.

Finance & Accounts Department:

Using Amin Mohammad Group (AMG) software.
Final checking of Bank reconciliation.
Checking of Bank Debtor order voucher.
Checking the company financial accounts.
Give clearance for surrender.
Give clearance for registration.

Procurement Department:
Buying Land.
Registration of the sold land.

Documentation:
If any customer fails to pay the due in schedule time then this department arranges
time extension latter & gives the time extension approval.
For business the client is not able to take deed in this case the officers of this
department communicate with the client to take the deed by this time officers make
a rough copy of the deed.
If any change his/her payment schedule or change the plot then this department
arranges all procedure.
This department also make note sheet for registration when a client pay all the dues
with registration fees.

Features of every projects of Amin Mohammad Group

The project of Amin Mohammad Group are approved by RAJUK.
The locations of AMG are out of flood free zone.
The project has natural greeneries.
The Park & playground in every block separately.
School, College, & University are included in the project.
Amin Mohammad Group reserves 35% land for ecological balance.
The location have eco-friendly environment.
The administrative office & CCTV surveillance facility inside the project.
Police outpost, traffic system & fire service are available inside the location.
Electricity, gas & water connection are available in site as committed.
Telephone & internet service are connected in the project.
Land is delivered according to the promised offered.

Registration is properly after full payment.

Amin Mohammad Groups Project:

Name
Green Model Town
Ashulia Abakash

Size
2.5, 3, 5, 7.5, 10 20 katha
residential & commercial
plit
2 -5 Katha

Ashulia Barnali

3 -4 Katha

Ashulia Kingdom

2 -5 Katha

Shyamol Chaya

2.69 7.59 Katha

Location
Manda, Motijhill, Dhaka.
Purba Sadarpur, Ashulia,
Dhaka.
Gouripur, Ashulia, Savar,
Dhaka.
Bara Rangamathi, Ashulia,
Savar,
Dhaka.
Pirerbazar, Sylhet.

Amin Mohammad Groups Upcoming Projects:

Name
Dhaka South 1
Dhaka South 2

Size
3 20 Katha
3 20 Katha

Location
Keranigong, Dhaka.
Keranigong, Dhaka.

Branches of Amin Mohammad Group:

Amin Mohammad Group has 5 decorated branches in Bangladesh.
Corporate Office: 752, Satmosjid road, Dhanmondi road, Dhaka-1025
Mitijhill Office:

29 Rajuk Avenue (2nd flore) Motijhill b/a, Dhaka.

Uttara Office:

Green Aroma (2nd flore) bari-17 road- 7, sector- 4, uttara,Dhaka.

Chittagong office:

819/a Mehedibag, chittagong.

Sylhet Office:

Rohim tower (3rd flore), sobhani ghat.

Financial statement analysis is an evaluative method of determining the past, current and
projected performance of a company. Several techniques are commonly used as part of
financial statement analysis including horizontal analysis, which compares two or more
years of financial data in both dollar and percentage form; vertical analysis, where each
category of accounts on the balance sheet is shown as a percentage of the total account;
and ratio analysis, which calculates statistical relationships between data.
Performance is the act of performing or the state of being performed. It is also the act or
style of performing a work or role before an audience. On the other hand, it is a
presentation, especially a theatrical one, before an audience.

MEASUREMENT OF PERFORMANCE:
We can measure performance of an organization through financial ratios. These ratios are
given below:
Solvency Ratios
Efficiency Ratios
Profitability Ratios
Debt Ratios
Bank performance is important for all parties: depositors, bank managers and regulators.
In a competitive financial market bank performance provides signal to depositorinvestors whether to invest or withdraw funds from the bank. Similarly, it flashes
direction to bank managers whether to improve its deposit service or loan service or both
to improve its finance. Understanding the performance of banks requires knowledge
about the profitability and the relationships between variables like market size, banks
risk and banks market size with profitability. We can measure performance of a bank in
the following ways:

GROWTH MEASUREMENT:
Growth means development and maturity. On the other hand, growth is an increase in
size, number, value or strength etc.
We can measure growth of an organization through profitability ratios. The profitability
ratios are used to evaluate the firms profits with respect to a given level of sales, a
certain level of assets or owners investment. These profitability ratios include the
following:

Gross Profit Margin

Operating Profit Margin
Net Profit Margin
Earnings Per Share
Return on Total Assets
Return on Equity

SOLVENCY RATIOS
Liquidity refers to the solvency of the firms overall financial positionthe ease with which it can pay its bills. The liquidity of a firm measures
its ability to satisfy its short-term obligations. The three basic measures
of liquidity are as follows:
Net Working Capital: Net working capital is used to measure the
firms overall liquidity. It is expressed as follows:
Net Working Capital = Current Asset Current Liabilities

Current Ratio: The current ratio measures the firms ability to

meet its short-term obligations. It is expressed as follows:
Current Ratio =

Current Assets
Current Liabilities

Quick Ratio: The quick ratio is similar to the current ratio except
that it excludes inventory, which is generally the least liquid
current ratio. Generally low liquidity of inventory results from
two primary factors: 1) Many types of inventory cannot be easily
sold because they are partially completed items, special purpose
items and the like; 2) Inventory is typically sold on credit. It is
expressed as follows:
Quick ratio

Current Assets - Inventory

Current Liabilities

EFFICIENCY RATIOS
Activity Ratios are used to measures the speed with which various accounts are converted
into sales or cash.

Inventory Turnover: Inventory Turnover measures the liquidity of

a firms inventory. It is expressed as follows:
Inventory Turnover =

Cost of Goods Sold

Inventory

Debtors Collection Period: The Debtor Collection period is useful

in evaluation of credit and collection policies. It is expressed as
follows:
Debtors Collection Period =

Debtors
365
Total Credit Sales

Creditors Payment Period: The Average Payment Period

measures the average amount of time needed to pay accounts
payable. It is expressed as follows:
Creditors Payment Period =

Creditors
365
Total Credit Purchase

Fixed asset Turnover: The Fixed asset Turnover measures the

efficiency with which the company has been using its fixed
Assets to generate sales. It is expressed as follows:
Fixed asset Turnover =

Sales
Net Fixed Assets

Total Asset Turnover: The Total Asset Turnover indicates the

efficiency with which the firm uses all its assets to generate sales.
It is expressed as follows:
Total Asset Turnover =

Sales
Total Assets

PROFITABILITY RATIOS
Measures of profitability relate the returns of the firm to its sales,
assets, equality, or share value. These measures allow the analyst to
evaluate the firms earning with respect to a given level of sales, a
certain level of assets, the owners investment, or share value.
Gross Profit Margin: The Gross Profit Margin measures the
percentage of each sales Dollar / Taka remaining after the firm
paid for its goods. It is expressed as follows:
Gross Profit Margin =

Gross Profits
100
Sales

Operating Profit Margin: The Operating Profit Margin measures

the percentage of profit earned on each sales Dollar/Taka before
interest and taxes. It is expressed as follows:
Operating Profit Margin =

Operating Profits
100
Sales

Net Profit Margin: The Net Profit Margin measures the

percentage of each sales Dollar / Taka remaining after all
expenses, including taxes, have been deducted. It is expressed as
follows:
Net Profit Margin =

Net Profits After Taxes

100
Sales

Return On Total Assets (ROA): The Return on Total Assets

(ROA) measures the overall effectiveness of management in
generating profits with its available assets. The ROA is called the
Return on Investment. It is expressed as follows:
Return on Total Assets =

Net Profits After Taxes

100
Total Assets

 Return On Equity: The Return on Equity measures the return

earned on the owners (both preferred and common
stockholders) investment in the firm. It is expressed as follows:
Return on Equity =

Net Profits After Taxes

100
Stockholders' Equity

Earnings Per Share (EPS): The Earnings per share represents the
number of Dollars / Taka earned on behalf of each outstanding
share of common stock. It is expressed as follows:
Earnings available For Common Stockholder

EPS = Number of Shares of Common Stock Outstanding

ANALYZING DEBT RATIOS

Creditors claims must be satisfied before earning are distributed to the
shareholders, so it is in the best interested of the present and
prospective shareholders to pay close attention to the indebtedness of a
corporation.
Debt Ratio: The Debt Ratio measures the proportion of total
assets financed by the firms creditors. The higher this ratio, the
financial leverage the firm the firm has. It is expressed as
follows:
Debt Ratio =

Total Liabilities
Total Assets

Debt-To-Equity Ratio: The Debt-To-Equity Ratio indicates the

relationship between the long-term funds provided by creditors
and those provided by the firms owners. It is expressed as
follows:
Long Term Debt

Debt-To-Equity Ratio = Stockholder' s Equity

 Times Interest Earned Ratio: It measures the firms ability to

make interest payments. It is expressed as follows:
Times Interest Earned Ratio =

Earnings Before Interest And Taxes

Interest

Fixed Payment Coverage: The Fixed-Payment coverage Ratio

measures the firms ability to meet all fixed payment obligations,
such as loan interest and principal, lease payments, and preferred
stock dividends. It is expressed as follows:
Fixed-Payment coverage Ratio =
EBIT Lease Payments
Interest Lease Payments {(Principal Preferred Stock Dividend) [1/1 - T)]}

RATIO ANALYSIS OF Amin Mohammad Group

FOR THE YEAR 2010

Solvency Ratios:
1. Net Working Capital = Current AssetsCurrent Liabilities
= 4684332243-3023709641
= 1660622602
Comments: Net Working Capital is used to measure the firms overall
liquidity. So, the overall liquidity of AMG is Tk. 1660622602.
2. Current Ratio =
=

Current Assets
Current Liabilities
4684332243
3023709641

= 1.55:1
Comments: We know the higher the current ratio, the greater the
Margin 0f Safety. Although there is no hard and fast rule, conventionally, a
current ratio of 2:1 is considered satisfactory. But, the current ratio of AMG
is 1.55:1; therefore, it may be interpreted to be insufficiently liquid.
3. Quick ratio =
=

Current Assets - Inventory

Current Liabilities
4684332243 - 0
3023709641

= 1.55:1

Comments: Here the minimum relationship between liquid assets and

current liabilities should ideally be 1:1. Otherwise, the company might fail
to meet its current obligations. Here the quick ratio is 1.55:1 and it is
recommended. The quick ratio provides a better measure of overall liquidity
only when the firms inventory cannot be easily converted into cash. Here,
inventory is liquid. So, the current ratio is a preferred measure of overall
liquidity of AMG.

Efficiency Ratios:
1. Fixed Assets Turnover =
=

Sales
Net Fixed Assets
297852829
58951656

= 5.05 Times
Comments: The fixed asset turnover measures the efficiency with which
AMG has been using its fixed assets to generate sales. Here, the bank has
used its fixed assets 5.05 times in a year to generate sales.
2. Total Assets Turnover =
=

Sales
Total Assets
297852829
4743283899

= 0.06 Times
Comments: Generally, the higher a firms total asset turnover, the more
efficiently its assets have been used. This means AMG turns over its assets
0.06 times a year. Here AMG could not use its assets efficiently because it
could not touch the standard norm (5 to 6 times).
3. Debtors Collection Period =
=

Debtors
365
Total Credit Sales
2893782256
365
360890658

= 2927 Days
Comments: The average collection period is meaningful only in relation to
the firms credit terms. Here, loans and advances collection period of AMG
is 2927 days on the basis of their income.
4. Creditor Payment Period =
=

Creditors
365
Total Credit Purchase
30231709641
365
51981481

= 212279 Days
Comments: The average payment period is meaningful only in relation to
the average credit terms extended to the firm. Here, creditors payment period
is 212279 days on the basis of their purchases.

Profitability Ratios:
1. Gross Profit Margin =
=

Gross Profits
100
Sales
245871348
100
297852829

= 82.55 %
Comments: A high gross profit margin ratio is a sign of good management.
Every firm should try to increase its gross profit as much as possible. We can
see that AMG has a higher gross profit margin. It is a very good sign of
business.
2. Operating Profit Margin =
=

Operating Profits
100
Sales
245871348
100
297852829

= 82.55 %

Comments: Operating profits are Pure because they measure only the
profits earned on operations and ignore interest and taxes. A high operating
profit is preferred. The operating profit of AMG is better. So, it is
recommended.
3. Net Profit Margin =
=

Net Profits After Taxes

100
Sales
118472002
100
297852829

= 39.78 %
Comments: The net profit margin is a commonly cited measure of the firms
success with respect to earnings on sales. Net profit benchmark is 10%- 15%
required. 39.78 % return on sales is considered as a satisfactory level.
4. Return on Total Assets =
=

Net Profits After Taxes

100
Total Assets
118472002
100
4743283899

=2.50 %
Comments: ROA measures the overall effectiveness of management in
generating profits with its available assets. The higher the percentage, the
higher the effectiveness of the firm. But, here 2.50% is relatively satisfactory
level.
5. Return on Equity =
=

Net Profits After Taxes

100
Stockholders' Equity

118472003
100
1340958418

= 8.83 %
Comments: Here ROE is 8.83%. Generally, the higher this returns, the better
off are the owners.
6. EPS =

Earnings available For Common Stockholder

Number of Shares of Common Stock Outstanding

=0
Comments: There is no earning per share because it is unlisted company in
DSE and CSE.

Other Ratios:
1. Debt Ratios =
=

Total Liabilities
Total Assets
3402325481
4743283899

= 0.72:1
Comments: The higher this ratio, the greater the amount of other peoples
money being used to generate profits. The value indicates that AMG has
financed 72 % of its assets with debt and the value also indicates that AMG
has the degree of indebtedness and financial leverage.
2. Debt-To-Equity Ratio =
=

Long Term Debt

Stockholder' s Equity

291419184
1340958418

= 0.22:1

Comments: AMG is not in a good position from the view of debt to equity
ratio. Here the lenders investment is 22 % of the owners investment. So,
majority financing is being done by the shareholders fund.
3. Times Interest Earned Ratio =
=

Earnings Before Interest And Taxes

Interest
245871348
6569565

= 37.43:1

Comments: The higher its value, the better able the firm is to fulfill its
interest obligations. Here the times interest earned ratio for AMG seems
acceptable because a value of at least 3.0 and preferably closer to 5.0 is often
Suggested. Thus it has a good margin of safety.
4. Fixed-Payment coverage Ratio =
EBIT Lease Payments
Interest Lease Payments {(Principal Preferred Stock Dividend) [1/1 - T)]}

245871348
6569565

= 37.43:1
Comments: The fixed payment coverage ratio measures risk. The lower the
ratio, the greater the risk to both lenders and owners; the greater the ratio,
the lower the risk. A value of 2.0 or more is often suggested. Here the fixed
payment coverage is very high. So it can lower the risk to both lenders and
owners.
5. Long Term Debt to Net Worth =

Long Term Debt

Net Worth

291419184
1340958418

= 0.22:1

Comments: AMG is not in a good position from the view of long-term debt
to net worth ratio. Here the lenders investment is 22 % of the owners
investment. So, majority financing is being done by the shareholders fund.

 Proprietary Ratio =

Proprietors Fund
Total Assets

1340958418
4743283899

= 0.28:1
Comments: Here the proprietary ratio is 0.28:1 that means every asset of Tk.
1 the proprietor fund is 0.28. The proprietary ratio is not acceptable because
it
could
not
touch
the
standard
norm
(3:5). But there is no hard and fast rule conventionally.

Proprietor Fund To Total Liabilities =

Proprietors Fund
Total Liabilities

1340958418
3402325481

= 0.39:1
Comments: Here the proprietor fund to total liabilities is 0.39:1 that means
every liability of Tk. 1 the proprietor fund is 0.39. This ratio is not
acceptable because it could not touch the standard norm
(3:1). But there is no hard and fast rule conventionally.

RATIO ANALYSIS OF Amin Mohammad Group

FOR THE YEAR 2011
Solvency Ratios:
1. Net Working Capital = Current AssetsCurrent Liabilities
= 6987650257-5236716909
= 1750933348
Comments: Net Working Capital is used to measure the firms overall
liquidity. So, the overall liquidity of AMG is Tk. 1750933348.
2. Current Ratio =
=

Current Assets
Current Liabilities
6987650257
5236716909

= 1.33:1
Comments: We know the higher the current ratio, the greater the
Margin 0f Safety. Although there is no hard and fast rule, conventionally, a
current ratio of 2:1 is considered satisfactory. But, the current ratio of AMG
is 1.33:1; therefore, it may be interpreted to be insufficiently liquid.
3. Quick ratio =
=

Current Assets - Inventory

Current Liabilities
6987650257 - 0
5236716909

= 1.33:1

Comments: Here the minimum relationship between liquid assets and

current liabilities should ideally be 1:1. Otherwise, the company might fail

to meet its current obligations. Here the quick ratio is 1.33:1 and it is
recommended. The quick ratio provides a better measure of overall liquidity
only when the firms inventory cannot be easily converted into cash. Here,
inventory is liquid. So, the current ratio is a preferred measure of overall
liquidity of AMG.

Efficiency Ratios:
1. Fixed Assets Turnover =
=

Sales
Net Fixed Assets
406642969
103787693

= 3.92 Times
Comments: The fixed asset turnover measures the efficiency with which
AMG has been using its fixed assets to generate sales. Here, the company
has used its fixed assets 3.92 times in a year to generate sales.
2. Total Assets Turnover =
=

Sales
Total Assets
406642969
7091437950

= 0.06 Times
Comments: Generally, the higher a firms total asset turnover, the more
efficiently its assets have been used. This means AMG turns over its assets
0.06 times a year. Here the company could not use its assets efficiently
because it could not touch the standard norm (5 to 6 times).
3. Debtors Collection Period =
=

Debtors
365
Total Credit Sales
4026766601
365
597354362

= 2461 Days

Comments: The average collection period is meaningful only in relation to

the firms credit terms. Here, loans and advances collection period is 2461
days on the basis of their income.
4. Creditor Payment Period =
=

Creditors
365
Total Credit Purchase
5236716909
365
106065281

= 18021 Days
Comments: The average payment period is meaningful only in relation to
the average credit terms extended to the firm. Here, creditors payment period
is 18021 days on the basis of their purchases.

Profitability Ratios:
1. Gross Profit Margin =
=

Gross Profits
100
Sales
300577688
100
406642969

= 73.92 %
Comments: A high gross profit margin ratio is a sign of good management.
Every firm should try to increase its gross profit as much as possible. We can
see that a higher gross profit margin. It is a very good sign of business.
2. Operating Profit Margin =
=

Operating Profits
100
Sales
300577688
100
406642969

= 73.92 %
Comments: Operating profits are Pure because they measure only the
profits earned on operations and ignore interest and taxes. A high operating
profit is preferred. The operating profit is better. So, it is recommended.

3. Net Profit Margin =

=

Net Profits After Taxes

100
Sales
147856246
100
406642969

= 36.36 %
Comments: The net profit margin is a commonly cited measure of the firms
success with respect to earnings on sales. Net profit benchmark is 10%- 15%
required. 36.36 % return on sales is considered as a satisfactory level.
4. Return on Total Assets =
=

Net Profits After Taxes

100
Total Assets
147856246
100
7091437950

=2.08 %
Comments: ROA measures the overall effectiveness of management in
generating profits with its available assets. The higher the percentage, the
higher the effectiveness of the firm. But, here 2.08% is relatively satisfactory
level.
5. Return on Equity =
=

Net Profits After Taxes

100
Stockholders' Equity

147856246
100
1505491145

= 9.82 %
Comments: Here ROE is 9.82%. Generally, the higher this returns, the better
off are the owners.
6. EPS =

Earnings available For Common Stockholder

Number of Shares of Common Stock Outstanding

=0

Comments: There is no earning per share because it is unlisted.

Other Ratios:
1. Debt Ratios =
=

Total Liabilities
Total Assets
5585946805
7091437950

= 0.79:1
Comments: The higher this ratio, the greater the amount of other peoples
money being used to generate profits. The value indicates that AMG has
financed 79 % of its assets with debt and the value also indicates that it has
the degree of indebtedness and financial leverage.
2. Debt-To-Equity Ratio =
=

Long Term Debt

Stockholder' s Equity

349229896
1505491145

= 0.23:1

Comments: AMG is not in a good position from the view of debt to equity
ratio. Here the lenders investment is 23 % of the owners investment. So,
majority financing is being done by the shareholders fund.
3. Times Interest Earned Ratio =
=

Earnings Before Interest And Taxes

Interest
300577688
16281824

= 18.46:1
Comments: The higher its value, the better able the firm is to fulfill its
interest obligations. Here the times interest earned ratio for this company
seems acceptable because a value of at least 3.0 and preferably closer to 5.0
is often Suggested. Thus it has a good margin of safety.

4. Fixed-Payment coverage Ratio =

EBIT Lease Payments
Interest Lease Payments {(Principal Preferred Stock Dividend) [1/1 - T)]}

300577688
16281824

= 18.46:1
Comments: The fixed payment coverage ratio measures risk. The lower the
ratio, the greater the risk to both lenders and owners; the greater the ratio,
the lower the risk. A value of 2.0 or more is often suggested. Here the fixed
payment coverage is very high. So it can lower the risk to both lenders and
owners.
5. Long Term Debt to Net Worth =

Long Term Debt

Net Worth

349229896
1505491145

= 0.23:1

Comments: AMG is not in a good position from the view of long-term debt
to net worth ratio. Here the lenders investment is 23 % of the owners
investment. So, majority financing is being done by the shareholders fund.

 Proprietary Ratio =

Proprietors Fund
Total Assets

1505491145
7091437950

= 0.21:1
Comments: Here the proprietary ratio is 0.21:1 that means every asset of Tk.
1 the proprietor fund is 0.21. But there is no hard and fast rule
conventionally. The proprietary ratio is not acceptable because it could not
touch the standard norm (3:5).

Proprietor Fund To Total Liabilities =

Proprietors Fund
Total Liabilities

1505491145
5585946805

= 0.27:1
Comments: Here the proprietor fund to total liabilities is 0.27:1 that means
every liability of Tk. 1 the proprietor fund is 0.27. But there is no hard and
fast rule conventionally. This ratio is not acceptable because it could not
touch the standard norm (3:1).

SUMMARIZED VIEW
Ratios

2010

2011

1660622602
1.55:1
1.55:1

1750933348
1.33:1
1.33:1

5.05 Times
0.06 Times
2927 Days
212279 Days

3.92 Times
0.06 Times
2461 Days
18021 Days

Gross Profit Margin

Operating Profit Margin
Net Profit Margin
Return On Total Assets
Return On Equity
EPS

82.55%
82.55%
39.78%
2.50%
8.83%
0

73.92%
73.92%
36.36%
2.08%
9.82%
0

Other Ratios
Debt Ratio
Debt -To- Equity Ratio
Times Interest Earned Ratio
Fixed Payment Ratio
Long-Term Debt To Net Worth
Proprietary Ratio
Proprietors Fund To Total Liabilities

0.72:1
0.22:1
37.43:1
37.43:1
0.22:1
0.28:1

0.79:1
0.23:1
18.46:1
18.46:1
0.23:1
0.21:1

0.39:1

0.27:1

Solvency Ratios
Net working Capital
Current Ratio
Quick Ratio
Efficiency Ratios
Fixed Asset Turnover
Total Asset Turnover
Debtors Collection Period
Creditor Payment Period
Profitability Ratios

SWOT Analysis of the company:

The term SWOT is the abbreviated from of Strength, Weakness, Opportunity, & Threat.
In SWOT analysis Strength & Weakness are determined by internal factor, while
Opportunity & Threat are determined by the external factors.

S (strengths):
Amin Mohammad Groups management system are always committed to better
service.
All of employees of AMG are sincere reliable.
Amin Mohammad Groups market potentiality is very high.
Amin Mohammad Group have effective sales team.
Amin Mohammad Group always keep records in appropriate methods.
AMG use advanced information system.
Amin Mohammad Group maintain Good relationship between top management &
employees.
AMG have strong security system.
Amin Mohammad Group has a well-decorated office.

W (weaknesses):
Could not maintain the rules & regulation according to appropriate law.
Installment facilities are not in customers favor.
Decision can take only the top management.
Improper government policy.
Low area market coverage.

O (opportunities):
New real estate business is opening day by day.
Improve the service quality then the others.

 Improve high customer satisfaction.

Take the opportunity to get a huge amount of money.

T (threats):
Increased the number of Real Estate company.
Government interrupts in the way of development.
Growing up of overall cost.
Complexity of RAJUK rules & regulation.
Project areas are hassle by the local village political.

Chapter: 4
Recommendation
AND
Conclusion

RECOMMENDATIONS

If AMG joins in the SEC and sells their shares then they will gain money.

Risk management setup in AMG will need to be strengthened. Benchmark standards

could be evolved.

Payment and settlement system will have to be strengthened to ensure transfer of

funds on real time basis eliminating risks associated with transactions and settlement
process.

Regulatory set-up will have to be strengthened, in line with the requirements of a

market-led integrated financial system.

AMG will have to adopt best global practices, systems and procedures.

AMG may have to evaluate on an ongoing basis, internally, the need to effect
structural changes in the organization. This will include capital restructuring through
mergers / acquisitions and other measures in the best business interests.

There should be constant and continual up gradation of technology benefiting both

the customer and the company.

Conclusion:
Real estate sector is growing and has tendency of future growth. The
GDP share and growth of real estate and construction is growing. This
indicates a hopeful future for this sector Amin Mohammed Group is one of the
top real estate companies in Bangladesh. Last few years the yearly sales
quantity decline thus I try to find out the possible reasons and give some
probable solutions. Using innovative entrepreneurial approach, AMG will solve
its problems thereby improving the quality of life of the people in Bangladesh
and ultimately became the market leader in real estate business. In an overall
sense, this study finds a very promising and positive tone of growth for the
Amin Mohammed Group.

Internet
www.amgbd.comat
www.realestate.comat
www.worldrealestste.com
Documents
Annual report of Amin Mohammad
Prospects of Amin Mohammad Group (2001011)
Different manuals of Amin Mohammad Group
Different circulars of Amin Mohammad Group