Chapter-One

Chapter-One
INTRODUCTION
INTRODUCTION
1.1Introduction
Financial performance is a measurement of how well an organization can use its assets from its
primary mode of business and generate revenues. Financial Performance also show future
growth of organization. So the importance for a sound system of financial performance
measurement for financial institution is significant, This study is prepared as an integral part
of the completion of BBA program from Department of Business Studies, University of
Information Technology & Sciences (UITS) and basically this study is conducted to see the
financial performance analysis of Banglalion Wimax. Besides this, some other operational
ideas on Banglalion Wimax have been drawn in this report so as to generate an overall picture of
the organization.

1.2 Purpose of the Report:

The main purpose of Financial Performance Analysis of Banglalion Wimax the study will
establish the Financial Performance also show future growth of organization. Past four years
have been a period of time while we learned the theoretical aspects of Business. There were forty
two courses throughout the Bachelor of Business Administration journey with the Department of
Business Studies. But theoretical knowledge alone is not adequate for the real world. I need to
understand the practical work and the office environment of financial institutions. For that
purpose, we have a three months internship program assigned by the department. The Internship
Program is necessary for us to get along with the nature of the corporate world and the job
market. Although the training period is not adequate, it is a crucial part to overcome our
difficulties while interacting with others in an office environment. To fulfil this requirement I got
the opportunity to carry on my internship in “Financial Performance Analysis of Banglalion
Wimax”. I was assigned at Head Office. My internship program was guided and governed by
Ms. Nahid Tasneem madam. This report is prepared under his supervision and support. I tried
and worked hard to make this report valuable.
1.3 Scope of the Report:
This study is based on my studies during my internship period in Banglalion Wimax at Head
office. The prime focus was on financial performance analysis for giving some explanation about
the financial position of the company over at least five years. The scope of my study is limited to
the Banglalion Wimax. During the three months internship program almost all sections I have
observed. However, in this study the financial performance analysis Banglalion Wimax is
analyzed from different viewpoints including ratio analysis. This report may help those people
who want to know about the financial performance of Banglalion Wimax.

1.4 Objective of the Study

1.4.1 Broad Objectives

The board objective of this study is to Financial Performance Analysis of Banglalion Wimax.

1.4.2 Specific Objectives

More specifically, this study entails the following aspects:

 To apply academic knowledge in practical work
 To evaluate the performance of Banglalion Wimax
 To get an understanding of the financial position of Banglalion Wimax
 To make some suggestions upon the findings

1.5 Methodology of the report

There are two methods for collecting, sorting and analyzing data. The first one is primary source
where data is collected from the field or directly from the source. Another one is secondary
source where published data is collected. Primary data is raw data whereas secondary data is
previously calculated data. Both of these sources are discussed in the following:
Primary Source:
 Observation from the desk
 Interaction with the colleagues and executives

Secondary Source:
 Annual Reports
 Website of Banglalion Wimax
 Documents regarding the company
  Articles are written on Banglalion Wimax

1.6 Limitations of the report

While making this report, I tried my level best so that the outcome of this report becomes
standard. But there are some limitations as well. They are pointed out in the following:
 The complexity of the topic makes it hard to reach a concrete conclusion for me.
 The executives of the company were busy all the time.
 The office was crowded all the time due to the location.
 Time constraint is a big problem for the report to complete.
 My lack of experience in this matter may provide unintentional failure.
 Chapter-Two
Chapter-Two
PROFILE
PROFILEOF
OFCOMPANIES
COMPANIES
2.1 Company profile
Banglalion Wimax was first founded in our country in 2008 as only some limited internet
connection, but as day by day it become a largest wimaz internet connection all around the
country. Banglalion is connection people in any where. We will do so by offering the best
consumer experience in an environment driven by high performance, constant innovation,
teamwork and opportunity for wealth creation.

Name of the business Banglalion Wimax

Form of Business Private
Industry Telecommunication
Type of Business Service oriented
Service offering Connecting people with in a moment
Target market All over the country
Silver Tower (18th Floor), 52 Gulshan Avenue,
Location
Circle-1, Dhaka-1212
Starting of Business 2008
Source of capital Personal and borrowed fund
2.2 Vision

The vision behind the company is to connecting around the country, convenient, and easy to use.

2.3 Mission

Our mission is to enhance customer service to connecting people, customer retention and
increase their expectation. We strive to customer high speed data transfer facilities. We put our
efforts to increase customer satisfaction when consumers connect to the communication, to
streamline the problem resolution order in all possible ways.

2.4 Objectives
In order for the company to operate, a number of specific ingredients are needed. Following are
things to put in place before the service can be offered.
 Develop a customer service & customer satisfaction software application
 Develop successful relationships with online information.
 Develop strategic alliances with online connection.

2.5 Uses of Wimax

There is some specific place where wimax used. Those are given below,
 Providing a wireless alternative to cable and DSL for broadband access.
 Providing data and telecommunications services.
 Providing a source of Internet connectivity as part of a business continuity plan.
 Providing portable connectivity.

That is, if a business has both a fixed and a wireless Internet connection, especially from
unrelated providers, they are unlikely to be affected by the same service outage.
2.6 Upcoming Services of Banglalion
Banglalion currently offers 9 Internet packages of varying speed and data limit along with three
hardware unit namely ODU (outdoor unit), IDU (indoor unit), and a USB dongle. Banglalion
plans on providing following services

1. Mobile IP Telephony.
2. Live IP TV.
3. E-Learning.
4. Video Conferencing.
5. Secured VPN
6. ATM Connectivity IP PABX.
7. Online Radio.
8. Audio-Video Streaming.
9. Tele Medicine.
10. MAN for Corporate offices having presence in different locations.
11. Remote Surveillance
12. Online Gaming Service etc.

2.7 Benefits Summary

At Banglalion wimax, we feel we provide a value-added service to a variety of consumers. By
having a safe and easy-to-use return service, the company benefits more people than simply the
average customer.
2.8 Banglalion packages
In the customer based banglalion wimax provide two types of packages for there valued
customer. Those packages are given below.

 Prepaid package
 Postpaid package
2.9 Prepaid Package
No contracts! No monthly bills! That is the flexibility and convenience that Banglalion Prepaid
offers you. Access the internet as much as you want and whenever you want. It’s an easy, no-
commitment plan that powers you to manage your internet experience the way you want at a
value-for-money rate. Your Internet access is supported by our 4G (Fourth Generation) WiMAX
Technology.

Banglalion Prepaid offers a combination of hard-to-beat value propositions:

 A dedicated network solely built for data service (i.e. internet).

 No sharing with other type of service (i.e. voice).
 The only Wimax operator in the country with a strong presence in 7 (seven) divisional
cities and the highest number of BTS
 Stable & high speed internet.
 Convenient refills of Tk. 300 and Tk. 600 through scratch card.
 Charges are on actual usage up to the byte level.

2.10 Postpaid Package

Postpaid package is one kind of package where keep a fixed amount of deposit money. Here the
monthly bill provide by the company. In large area or official work this package is so much
essential. Here all bill pay into the bill pay center.
2.11 Banglalion Packages & Pricing
According to customer based banglalion provide a pricing list. This is given below.

Note:
1. VAT is applicable on monthly fee.
2. Additional Usage Tk. 0.15/MB
3. Fair usage policy is applicable for unlimited package.
2.12 Coverage
Banglalion currently covers some areas of Dhaka, Chittagong, Sylhet, Rajshahi, Khulna,
Rangpur & Barisal city with hopes of covering all the major areas of Dhaka city by the end of
2010, entire Dhaka city by second quarter of 2011, and the entire country by the second quarter
of 2013. Banglalion has already made some strong presence in Chittagong by covering some
major areas in the city with about 14 BTS. Meantime, network rollout in other major cities such
as; Narayanganj, Gazipur, Mymensingh, Comilla, Noakhali,Laxmipur, Satkhira, Bogra, Cox's
Bazar are about to begin. These cities and peripheries are expected to be under the coverage of
BanglaLion coverage by the 3rd quarter of 2011 and by the end of 2nd quarter 2012; BanglaLion
plans to bring most of the areas of the country under its seamless coverage.

Note: The blue pointers indicate Banglalion Coverage Areas

2.13 Sales force Management of Banglalion Wimax
Banglalion wimax have a powerful and strong sales force team. They play different way for
advertisement there product and service. There are some way which is given below.
1. Road Show
2. Road Activation
3. Trial program
4. Participate fair and festival
5. Call center’s calling etc
Road Show
Banglalion is on the road now. Our motive is to reach people at heir doors & connect them by the
magic of Wimax. Get Wimax, Go Digital

Road Activation
Banglalion start road activation program. They want to go to there valued customer door to door.
2.14 Trial program

Banglalion Wimax start a new trial program for identify net speed. Here customer realized there
expectation up to product performance.

2.15 Participate fair and festival

Bamglalion Wimax always participate different kinds of computer fair and festival.
 Chapter-Three
Chapter-Three
LITERATURE
LITERATUREREVIEW
REVIEW
3.1 Literature Review

Review of Literature refers to the collection of the results of the various researches relating to
the present study. It takes into consideration the research of the previous researchers which are
related to the present research in any way. Here are the reviews of the previous researches related
with the present study:

Bollen (1999) conducted a study on Ratio Variables on which he found three different
uses of ratio variables in aggregate data analysis: (1) as measures of theoretical concepts, (2) as a
means to control an extraneous factor, and (3) as a correction for heteroscedasticity. In the use of
ratios as indices of concepts, a problem can arise if it is regressed on other indices or variables
that contain a common component. For example, the relationship between two per capita
measures may be confounded with the common population component in each variable.
Regarding the second use of ratios, only under exceptional conditions will ratio variables be a
suitable means of controlling an extraneous factor. Finally, the use of ratios to correct for
heteroscedasticity is also often misused. Only under special conditions will the common form
forgers soon with ratio variables correct for heteroscedasticity. Alternatives to ratios for each of
these cases are discussed and evaluated.

Cooper (2000) conducted a study on Financial Intermediation on which he observed that

the quantitative behavior of business-cycle models in which the intermediation process acts
either as a source of fluctuations or as a propagator of real shocks. In neither case do we find
convincing evidence that the intermediation process is an important element of aggregate
fluctuations. For an economy driven by intermediation shocks, consumption is not smoother than
output, investment is negatively correlated with output, variations in the capital stock are quite
large, and interest rates are procyclical. The model economy thus fails to match unconditional
moments for the U.S. economy. We also structurally estimate parameters of a model economy in
which intermediation and productivity shocks are present, allowing for the intermediation
process to propagate the real shock. The unconditional correlations are closer to those observed
only when the intermediation shock is relatively unimportant.
 Ho and Zhu (2004) have reported that the evaluation of a company’s performance has
been focusing the operational effectiveness and efficiency, which might influence the company’s
survival directly.

Furthermore, Gopinathan (2009) has presented that the financial ratios analysis can spot
better investment options for investors as the ratio analysis measures various aspects of the
performance and analyzes fundamentals of a company or an institution.

Andrew and Schmidgall (1993) in their study classified financial ratios into five
categories “liquidity ratios, solvency ratios, activity ratios, profitability ratios, and operating
ratios”. They indicated that financial ratios themselves do not provide valuable information about
a firm’s performance, Andrew (1993) in his study conducted on automobile industry investigated
the leverage ratio of companies and suggested that a value-maximizing capital structure.

Hitchings (1999), in his study realized that ratio analysis is a sensitive and valuable tool
in credit assessment which is to forecast the ability of a borrower to meet its debt obligations.

Zopounidis (2000) in his study proposed methodological framework based on financial

ratio analyses for estimating small and medium size enterprises performance, Hsieh and Wang
(2001) in their study examined and stressed the need of selecting relevant financial ratios for the
purpose of analysis. They proposed new approach for finding useful financial ratio and also
emphasized that industry differs in product, in size and have its own unique business practices
and internal and external environment thus financial ratio analysis should be according to
industry which suit it the most.

3.2 Conceptual Framework

3.2.1 Performance Appraisal
This comprises statement of financial position, statement of comprehensive income, statement of
changes in equity, statement of cash flow, notes and explanatory materials covering accounting
policies.
This is prepared under the historical cost convention and in accordance with the requirements of
the companies Act, 1994 and the international accounting standards (IASs)/ international
financial reporting standards(IFRSs) adopted by the Institute of Chartered Accountants of
Bangladesh (ICAB) as well as those standards, disclosures recommended by IASs /IFRSs and as
applicable to this company.

There are many different ways to measure and analysis of financial performance, but all
measures should be taken in aggregation.

3.2.2 Income Statement

Income statement is the main part of financial statement, which shows income and expenditure
of company’s and as a result shows profit and loss of company’s financial years. Income
statement reports a company’s results of operations over a period of time. The income statement
provides information on the revenue and expenses incurred by the company in a fiscal period. It
is essential to calculate the net profit or loss of the company. It also helps to calculate
profitability ratios.

3.2.3 Balance sheet

The balance sheet shows all available assets, liabilities, and owners equity at a particular
time. It has two parts. The first part of balance sheet shows sources of fund, shareholders
equity, all long term loan, short term loan, retained earnings etc. The second part of balance
sheet shows application of funds, all current and noncurrent assets and liabilities and
provisions.

The balance sheet highlights overall scenario of company’s financial condition. Its also gives an
overview of financial performance of a company.

3.2.4 Cash flow statement

Statement of cash flow shows cash inflow and outflow of company’s cash balances. It is very
essential part for company’s financial statement which shows cash inflows and outflows in
operating activities and also shows cash inflows and outflows of investing activities.

3.2.5 Statement of Owners Equity

Owners equity is very important part of financial statement. The owners equity statement uses
information from the income statement and provides information to the balance sheet. It is a
part of balance sheet under “stock holders equity, and is mostly affected by net income earn
during the fiscal years by the company excluding any dividends paid to the companies owners or
stockholders. This statement is mostly uses by the stockholders and prospective investors. It
shows them how much dividends they can earn from the company

3.2.6 Ratio Analysis

Ratio analysis is very important matter of financial performance analysis of a company. This tool
used to conduct a quantitative analysis of financial information in a company’s financial
statement.
3.6.6.1 Liquidity Ratio
Liquidity ratio measures the short term ability of a company to pay its maturing obligations
and to meet unexpected needs for cash. Liquidity ratios shows the current asset to current debt
ratio. The ratios are used to determine the institutions short term debt paying ability. This ratios
are generally used by short –term creditors like, bankers and suppliers.
Under liquidity ratios management uses those kind of ratios, they are as follows:
 Current Ratio
 Quick Ratio
 Debt Equity Ratio
 Inventory Turnover Ratio.

3.6.1.2 Current Ratio

The current ratio measures the current liquidity and ability to meet the short term obligations.
The current ratio is calculated by dividing current assets by current liabilities.
It can also be expressed as follows:
Current Ratio= Current Assets
Current Liabilities
3.6.1.3 Quick Ratio
The Quick ratio is similar to the current ratio that it excludes inventory, which is generally least
liquid current asset. The ratio is used for measuring the ability of a company to meet immediate
short term obligations and reflect the short term financial strength of a company. The quick
ratio can be measured by dividing the sum of cash, short term investments and net receivables
by current liabilities.

It can also be expressed as follows:

Quick Ratio= (Current Assets-Inventory)

Current Liabilities
3.6.1.4 Debt-Equity Ratio
Debt – Equity ratio is very important measures of ratio. This ratio measures the companies total
assets position over the total liabilities.

Debt-Equity Ratio= (Current Assets-Inventory)

Current Liabilities

3.6.1.5 Inventory Turnover Ratio

Inventory turnover ratio measures the number of times on average the inventory is used or sales
during the period. The purpose is to measure the liquidity of the inventory. It can be computed by
dividing cost of goods sold by the average inventory as follows:

Inventory Turnover Ratio= Cost of Goods sold

Average Inventory
3.6.2 Receivable Turnover Ratio
Receivable turnover ratio measures the number of times on average the company collects
receivables during the period. It can be computed by dividing net credit sales by the average net
receivables as follows:

Receivable Turnover Ratio= Net credit Sales

Average Net Receivable
3.6.3 Asset Turnover Ratio

Asset turnover ratio measures how efficiently a company uses its assets to generate sales. It is
determined by dividing net sales by average assets. The result of ratio shows the value of
sales produced by each amount invested in assets.

Asset Turnover Ratio= Net Sales

Average Assets
3.6.4 Return on Assets ratio
Return on assets ratio measures how much income is earned by utilizing assets. It can be
computed by dividing net income by average assets as follows:

Return on Asset= Net Income

Average Assets

3.6.5 Return on Owners Equity ratio

Return on owners equity measures the profitability ratio of owners equity. It measures the
profitability of owners investment. The ratio shows how many amount of net income the
company earned for each amount invested by the owners. It can be computed by dividing net
income by average owners equity as follows.

Return on Owners Equity= Net Income

 Average Owners Equity
3.6.6 Profit Margin Ratio
Profit margin ratio measures the percentage of each taka of sales that results in net income. It can
be computed by dividing net income by net sales.

Profit Margin Ratio = Net Income

Net Sales

3.6.7 Earnings Per Share Ratio

Earning per share ratio measures the net income earned per common shares It can be computed
by net Income divided by weighted average common shares outstanding.

Earnings per share Ratio = Net Income

Weighted average common shares outstanding
 Chapter-Four
Chapter-Four
Overall
OverallFinancial
FinancialPerformance
Performance
Analysis
AnalysisofofBanglalion
BanglalionWimax
Wimax
4.1 Income Statement

Income statement is often referred to as Profit or loss statement. It reports on a company's results
of operations over a period of time, usually a fiscal time period. The income statement provides
information on the revenue and expenses incurred by the company in a fiscal time period. It is
essential to calculate the Net Income or Loss of the company. It is also used to calculate
profitability ratios which show how much profit a company is making.

Both internal and external users require this document. Internal users like manager need to know
how much revenue and expense the business is making. The external users like the Chairman or
other investors need to know if the company is a making profit or not. Government entities, like
Tax authorities need to know what is the Net Income or Loss of the company and how much
income tax the group is paying.
Sales Revenue Analysis of 2014

Particulars 2014
Cost of Materials 57%
Salary, Wages and Benefits 17%
Depreciation 3%
Electricity and Fuel 1%
Other Expenses 14%
Income Tax 1%
Profit after Tax 7%
Source: Annual Report of Banglalion Wimax 2014

Fig: Sales Revenue Analysis of 2014

Interpretation of Sales Revenue Analysis of 2014

From the frequency table and pie chart it can be 57% of the cost of materials, 17% of the Salary,
wages and benefit, 3% of the depreciations, 1% Electricity and fuel, 14% other expenses, 1% income
tax and 7% profit after tax. So the cost of materials sales and revenue of high.

Sales Revenue Analysis of 2015

Particulars 2015
Cost of Materials 59%
Salary, Wages and Benefits 18%
Depreciation 3%
Electricity and Fuel 1%
Other Expenses 12%
Income Tax 2%
Profit after Tax 5%
Source: Annual Report of Banglalion Wimax 2013

Fig: Sales Revenue Analysis of 2015

Interpretation of Sales Revenue Analysis of 2015

From the frequency table and pie chart it can be 59% of the cost of materials, 18% of the Salary,
wages and benefit, 3% of the depreciations, 1% Electricity and fuel, 12% other expenses, 2% income
tax and 5% profit after tax. So the cost of materials sales and revenue of high.

Sales Revenue Analysis of 2016

Particulars 2016
Cost of Materials 59%
Salary, Wages and Benefits 17%
Depreciation 3%
Electricity and Fuel 1%
Other Expenses 12%
Income Tax 2%
Profit after Tax 6%
Source: Annual Report of Banglalion Wimax 2014

Fig: Sales Revenue Analysis of 2016

Interpretation of Sales Revenue Analysis of 2016

From the frequency table and pie chart it can be 59% of the cost of materials, 17% of the Salary,
wages and benefit, 3% of the depreciations, 1% Electricity and fuel, 12% other expenses, 2% income
tax and 6% profit after tax. So the cost of materials sales and revenue of high.
Sales Revenue Analysis of 2017

Particulars 2017
Cost of Materials 59%
Salary, Wages and Benefits 18%
Depreciation 3%
Electricity and Fuel 1%
Other Expenses 12%
Income Tax 2%
Profit after Tax 5%
Source: Annual Report of Banglalion Wimax 2017

Fig: Sales Revenue Analysis of 2017

Interpretation of Sales Revenue Analysis of 2017

From the frequency table and pie chart it can be 59% of the cost of materials, 18% of the Salary,
wages and benefit, 3% of the depreciations, 1% Electricity and fuel, 12% other expenses, 2% income
tax and 5% profit after tax. So the cost of materials sales and revenue of high.
Sales Revenue Analysis of 2018
Particulars 2018
Cost of Materials 61%
Salary, Wages and Benefits 15%
Depreciation 3%
Electricity and Fuel 1%
Other Expenses 12%
Income Tax 2%
Profit after Tax 6%
Source: Annual Report of Banglalion Wimax 2018

Fig: Sales Revenue Analysis of 2018

Interpretation of Sales Revenue Analysis of 2018

From the frequency table and pie chart it can be 61% of the cost of materials, 15% of the Salary,
wages and benefit, 3% of the depreciations, 1% Electricity and fuel, 12% other expenses, 2% income
tax and 6% profit after tax. So the cost of materials sales and revenue of high.
4.2 Balance Sheet
Balance Sheet is a quantitative summary of a company's financial condition at a specific point in
time, including assets, liabilities and net worth. The first part of a balance sheet shows all the
productive assets a company owns, and the second part shows all the financing methods (such as
liabilities and shareholders' equity) also called statement of condition. A balance sheet is often
described as a "snapshot" of the company's financial condition on a given date. Of the four basic
financial statements, the balance sheet is the only statement which applies to a single point in
time, instead of a period of time.

The balance sheet shows all available assets, liabilities and owner’s equity at a particular time.
Usually, it is calculated at the end of a fiscal time period. It gives an overview on how the
company is performing and how much the business is worth. It is also used to calculate liquidity
ratios and solvency ratio which indicates how quickly a company can pay up its liabilities.

Balance sheet is needed to show the internal users that what is the current state of the business?
And how much assets or liability it has? For the external users like investors, creditor and
government authorities it indicates how fast the company can be liquidated?
 Chapter-Five
Chapter-Five
Analysis
Analysisand
andFindings
Findings
5.1 Financial Ratio Analysis
The analysis of financial ratios involves taking two numeric values and interpret the relative
relationship between the values. For calculating financial ratios, the inputs are selected from a
firm’s income statement and balance sheet. Ratio analysis is conducted to evaluate the various
aspects of the firm, for instance, liquidity position of the firm or profitability of the firm. In this
section, various ratios will be discussed. The calculation part is attached in the appendix.

5.1.1 Liquidity Ratios

Liquidity ratio measures the net liquidity position of any firm. In this case, the liquidity scenario
of the Banglalion Wimax will be discussed.

5.1.1.1 Current Ratio

The current ratio is most widely used for determining liquidity condition of any firm. The current
ratio of BANGLALION WIMAX is presented through a chart in the following using data from
2014 to 2018.

Current Ratio=

Year 2014 2015 2016 2017 2018

Current Ratio 6.95 7.56 7.56 6.42 1.01
Table 5.1: Current Ratio of
 BANGLALION WIMAX L
Source: Annual Report of BANGLALION WIMAX L (2014-2018)
It is said that the higher the current ratio, the greater the liquidity. In 2014, BANGLALION
WIMAX had a current ratio of 6.95 means for every 1 taka liquidity it had 7.56 taka asset. But
the ratio fluctuates over the next four years. None of that ever exceeds the 2014 figure. In 2018,
BANGLALION WIMAX had 1.01 taka in current assets for every 1 taka liability. It is clearly
visible that, the liquidity position of BANGLALION WIMAX is declined over the years.

5.1.1.2 Net Working Capital

Another liquidity measuring tool is networking capital. Net Working Capital is the difference
between current assets and current liabilities. It can be positive or negative. A positive net
working capital indicates that a firm has sufficient current assets to meet current financial
obligations. The changes in net working capital of BANGLALION WIMAX L is represented in
the following:
Net Working Capital= Current Asset- Current Liabilities.

Year 2014 2015 2016 2017 2018

Net Working 7642 8219 9496 10965 11578
Capital
Table 5.2 : Net Working Capital
 Source: Annual Report of BANGLALION WIMAX L (2014-2018)
Although the current ration of BANGLALION WIMAX L declined in these periods, the amount
of Net Working Capital was subsequently increased. The changes are given in the following
table:
Table 4.3: Change in NWC of BANGLALION WIMAX L
Year Change in NWC Percentage
2014 1267 19.87%
2015 577 7.55%
2016 1277 13.45%
2017 1469 13.40%
2018 9464 12.86%
Source: Annual Report of BANGLALION WIMAX L (2014-2018)
Since 2014 NWC is increased every year except for 2017. It is a good sign because it indicates
that the business for BANGLALION WIMAX is going well.

5.1.2 Profitability Ratio

Profitability ratio measures how much net income is generated from using all the assets or equity.
This ratio is a good indicator of financial performance as it is directly related tonet profit. There
are various profitability measures available such as ROA, ROE, NIM and EPS. They are
discussed in the following:

5.1.2.1 Return on Assets

ROA or Return on Assets is a ratio which measures the level of profitability of a firm in terms of
its total amount of assets. For example, if a company has 10000 taka total assets and 5000 taka
net income, its ROA will be 5000/10000 or 50%.
The ROA of BANGLALION WIMAX L for the calculated time horizon is presented through a
chart in the following:

Return on Asset (ROA):

Year 2014 2015 2016 2017 2018

Return on Assets 1.55% 1.53% 1.42% 1.08% 0.82%
Figure 4.4: Return on Assets

Source: Annual Report of BANGLALION WIMAX L (2014-2018)

The trend in ROA of BANGLALION WIMAX L is not constantly rising or declining. For the
year 2014 and 2018, the ROA rate is almost similar and low while the rate is similar and high in
the years 2016, 2017 and 2018. For the past four years, ROA in constantly decreasing. 2018
shows the least rate of ROA for BANGLALION WIMAX L. But ROA does not indicate any
liabilities increasing or decreasing. It is a simple ratio which shows the trend in net profitability.
5.1.2.2 Return on Equity
Return on Equity is another profitability measuring tool that determines the net profit in terms of
total shareholders’ equity. The ROE of BANGLALION WIMAX L is described via a graph in
the following:

Return on Equity (ROE):

Year 2014 2015 2016 2017 2018

Return on Equity 26.37% 24.84% 23.85% 18.62% 13.85%
Table 4.5: Return on Equity

Source: Annual Report of BANGLALION WIMAX L (2014-2018)

Like the ROA, the ROE of BANGLALION WIMAX L is decreasing for the last four years. ROE
determines the earnings obtained from the investment of the shareholders. If it is better, investors
are likely to invest more. In 2017, BANGLALION WIMAX had ROE of 18.62% where it had
26.37% ROE in the year 2014.

5.1.3 Financial Leverage Ratio

5.1.3.1 Debt Ratio

Debt ratio measures the portion of total assets of a firm by the creditors or people outside the
firm. It is an important ratio because it determines the degree of debt a firm has taken. The higher
this ratio, the greater the possibility of being submerged in debt.
The debt ratio of BANGLALION WIMAX L is given in the following:

Debt Ratio:

Year 2014 2015 2016 2017 2018

Debt ratio 94.12% 93.84% 94.05% 94.20% 92.58%
Table 4.6: Debt ratio

Source: Annual Report of BANGLALION WIMAX L (2014-2018)

From the above chart, it is clearly visible that BANGLALION WIMAX L is a highly levered
firm. It has more than ninety percent funds being allocated by debt.
5.1.4 Efficiency Ratio

5.1.4.1 Asset Turnover

It is an efficiency ratio that determines how efficiently assets are used to generate net income or
profits. The higher the asset turnover, the greater the efficiency.
The asset turnover ratio of BANGLALION WIMAX L is shown in the following:
The ratio is somewhere between 0.01 and 0.02. This means BANGLALION WIMAX has used
its assets 0.01 and 0.02 times in a year while generating its profits for the shareholders.

Asset Turnover Ratio:

Year 2014 2015 2016 2017 2018

Asset Turnover 0.02% 0.02% 0.01% 0.01% 0.10%
Ratio
Table 4.6 : Asset Turnover Ratio

Source: Annual Report of BANGLALION WIMAX L (2014-2018)

5.1.4.2 Capital Turnover

Capital turnover ratio is also called equity turnover where the proportion of a firm’s equity is
calculated relative to total assets.
The capital turnover of BANGLALION WIMAX L is almost similar for the last four years
which is 0.06 times per year. This indicates that BANGLALION WIMAX L uses its equity 0.06
times per year to generate net income.

Capital Turnover Ratio:

Year 2014 2015 2016 2017 2018

Capital 0.06% 0.06% 0.06% 0.06% 0.06%
Turnover Ratio
Table 4.8: Capital Turnover Ratio

Source: Annual Report of BANGLALION WIMAX L (2014-2018)

4.2 Findings of the Study
From the data analysis part, some trends have been observed about the overall financial
condition of Banglalion Wimax are summarized in the following:
 Banglalion Wimax has an upward trending current ratio.
 BANGLALION WIMAX L showed a poor record of net working capital. It will face
difficulties in meeting short term liabilities due to the shortage of net working capital.
 The profitability position of BANGLALION WIMAX L is outstanding in case of
generating profits from the net interest margin.
 BANGLALION WIMAX L did not use its assets properly to accumulate returns in the
past three years.
 BANGLALION WIMAX L has an average asset turnover of 0.02 times per year.
 BANGLALION WIMAX L is a moderate efficient company in terms of asset, equity and
loan turnover.
 BANGLALION WIMAX L has an outstanding position in share price. It has the best
EPS in the last few years.
 Chapter-Six
Chapter-Six
Recommendation
Recommendation&&Conclusion
Conclusion
6.1 Recommendations
After completing the data analysis part and pointing out some findings of the financial position
of Banglalion Wimax, some suggestions are given in the following as per my observation from
the calculated data such as:
 Banglalion Wimax should reduce its high level of debt usage. Otherwise, this would lead
to company ruptcy.
 Banglalion Wimax should look for ways to increase the current EPS so that it can become
a company of the public choice.
 Banglalion Wimax should put more focus on improving the net operating income.
 The ROA and ROE of Banglalion Wimax should be improved and the management
should dig into this matter.
 The overall efficiency of the company needs to be updated as per the growing
competition.
 The profitability of Banglalion Wimax needs more attention as it has low in ROE and
ROA.
 Banglalion Wimax should use its assets properly in order to generate and increase net
income.
6.2 Conclusion

This study helps to know that the company’s financial position, changes in financial statements
i.e. increase or decrease in the liabilities and assets. By the ratio analysis we come to know that
the companies solvency. The company has to take some measures to control the costs.

This study helps us to know that the overall company’s financial position is appreciable. But
some of the units incur losses because the high expenses, political conditions and management
conflicts in present years. So they have to control those problems. By the analysis of financial
statements I conclude that, overall financial performance of the company is satisfactory.

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References:

Gitman. (1999). Principle managerial finance. [Boston]: Addison-Wesley.


Eugenne F. Brigham & Michael C. Ehrhard, “Financial Management- Theory&
Practice”, 10th Edition.

Lawrence J. Gitman, Principles of Managerial, (11th Edition).

M Y Khan & P K Jain, “Financial Management”, (Third Edition).

Madura Jeff (2006) “Financial Markets & Institutions” (7th Edition).

Riggs H.E, (1994) Financial & cost Analysis Foe Engineering & Technology

Management. (12th Edition)

Scott Besley & Eugene F. Brigham “Essentials of Managerial Finance”, (14th

Edition)

Annual Reports of Banglalion Wimax (2014-2018).


www.googlefinance.com Viewed Friday, March2, 2017& www.google.com

Website of Banglalion Wimax (http:// www.banglalionwimax.com)

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