ff

Term-Paper on
Ratio Analysis of
Information Service Network Limited&
Islamic Bank Bangladesh Limited

1
 University of Dhaka

Department of International
10th Batch, Section- A

Course Title & Code: Principles of Finance

IB-206

Term-Paper on
Ratio Analysis of
Information Service Network Limited&
Islamic Bank BangladeshLimited.

Prepared for:

Pallabi Biswas
Lecturer,
Department of International Business

Prepared by:

Group Name: Code Black

Group Members:

Name Roll no.

1. ABU HORAIRA ZR-030-39
2. NAHRIN SULTANA KM-030-41
3. MD. SAJEEB HOSSAIN ZR-030-43
4. MOHAMMAD SAROWER ZR-030-45

Submission Date: 13 November, 2019

Executive Summary
The purpose of making this paper was to conduct a vest research on two companies’ ratio
analysis. This paper contains mathematical calculation on the financial statements of five years.
By reading this paper, the learners will learn about the process and finding of our attempts.

2
3
 Table of Contents
Information Services Network Limited...........................................................................................6
Islamic Bank Bangladesh Limited...................................................................................................8
Objective of the Study...................................................................................................................10
Methodology..................................................................................................................................10
2.1 Collected Data.........................................................................................................................12
2.1.1 Information Service Network Limited..............................................................................12
Financial Statement...............................................................................................................12
Profit and Loss Account........................................................................................................13
2.1.2 Islamic Bank Bangladesh Limited....................................................................................14
Financial Statement...............................................................................................................14
Profit and Loss Account........................................................................................................15
2.2 Mathematical Analysis............................................................................................................16
2.2.1 Profitability Ratios and Solvency Ratios..........................................................................16
2.2.2 Activity Ratios..................................................................................................................17
2.2.3 Liquidity Ratios................................................................................................................17
2.2.4 Z-Test Ratios....................................................................................................................18
2.3.1 Profitability Ratios............................................................................................................20
2.3.2 Solvency Ratios................................................................................................................20
2.3.2 Activity Ratios..................................................................................................................20
2.3.3 Liquidity Ratio..................................................................................................................20
2.3.5 Z-Test Ratios....................................................................................................................20
3.0 Conclusion...............................................................................................................................21
References..............................................................................................................................22

4
 Chapter 1
Introduction

5
Information Services Network Limited

Bangladesh joined the Internet world on June 6, 1996 through Information Services

Network Limited ( ISN ) with first ever 64 kbps VSAT transmitting and receiving
data via a Hong Kong Gateway. Since then ISN has not looked back, but pressed
ahead with the fastest and the most efficient as well as technologically sound service
for its valued clients who are growing in highest numerical proportion day by day.

In the year 1997 and 1998, the company consolidated its operations in all areas
especially in Internet and turned its system to achieve high professional standard. The
year 1999 exhibited a significant advancement for its joint venture agreement with a
foreign partner. In 2001, ISN invested fund to expand its services at Khulna by setting
a branch ISP using own VSAT based satellite link, which has eventually provided a
unique position for the company to render additional Internet service coverage to the
South Western population of the country. A new voice activated only phone based
internet access service was introduced by the company in 2002.

Products and Services

Internet Access
Broadband
Broadband internet access services with ISN are much more than 'just' a fast connection to the
internet - we have a range of Broadband Services whether you are connecting a single computer
at home or a network for your company.
Corporate Broadband
Under this package corporate clients are provided high speed Internet through committed
bandwidth. This package allows you to feel the power of the internet allowing setting up of Mail
and/or other servers at your office
Shared Broadband
This package suits home or small offices offering 24 hour high speed Internet connections at per
computer basis. Hard to beat connectivity price and low per month package is available.
Commercial Broadband
This package suits small or large service providers who require scalable bandwidth at
competitive prices. A circuit at distances over 2 km can be set up at notice of two day.
Nationwide Data Communication

6
Our Services are available all over Bangladesh through NTTN and Telco Transmission Network.
Dedicated link can be established using fiber optic or wireless radios between the state-of -the-
arts POP sand the gateway/router that connects customer LAN. When network ensure excellent
quality, high capacity, and low ligancy connectivity with Quos over the entire network, the data
connectivity solution is proved to be working efficiently. Client should ensure prioritizing data
packets thus enabling Voice, Video and Data packet access separately.
IP Telephony ( BTEL )
Information Services Network Ltd (ISN) launches BTEL, its first Internet Protocol Telephony
Services in Bangladesh.
ISN announces the IP Telephony communication services, Branding ' BTEL' into Bangladesh
market. Information Services Network Ltd (ISN) combines voice, data and Internet services over
the same connection for maximum value and flexibility.
BTEL is a fully managed business phone system and Internet solution that provides everything a
business needs - equipment, installation, maintenance, support, updates and more. It also
provides a converged communication solution that combines voice services and Internet over a
single IP connection utilizing a customer's existing phone system, therefore, eliminating the
expense of purchasing new equipment.
With all of its next-generation data products, BTEL strives to develop advanced business
solutions at an affordable price and it is going to offer a cost-effective alternative to traditional
voice and Internet services in Bangladesh market.
Web Solution
Domain Registration
Your domain name is your online identity. So we recommend you to choose a domain wisely.
Search for the name you want and purchase it by a simple click or transfer your domain to us.
Get your website online today.
Hosting Solution
A professional domain & web hosting company in Dhaka, Bangladesh. Get best in class website
hosting & email hosting, VPS server & dedicated server from #1 hosting company. We even
help you set up your emails.
Website Design and Development
Outstanding web services such as personal and business website design, responsive site design,
e-commerce site design, SEO, email marketing provided by us. Get the world class customizable
web services at affordable price.
SOHO Network
The modern concept of small office/home office, or SoHo, refers to the category of business
which can be from 1 to 10 workers. SOHO can also stand for small or home office or single
office/home office. A larger business enterprise, one notch up the size scale, is often categorized
as a small business. When a company reaches 100 or more employees, it is often referred to as a
Small and Medium-sized Enterprise (SME).

7
Corporate Network
A corporate network typically uses different types of network media. The different office
segments can use 10-megabit-per-second (Mbps) Ethernet or token ring networks, but the
backbone network that is used to connect to the different networks and host servers is usually
made up of 100-Mbps Ethernet or Fiber Distributed Data Interface (FDDI). Connections to
external networks (the Internet) are over leased lines or packet-switched services such as Frame
Relay. Connections to branch offices are over either switched media (ISDN or analog modems),
dedicated media (leased lines or Frame Relay), or the Internet

Islamic Bank Bangladesh Limited

Islami Bank Bangladesh Limited is a Joint Venture Public Limited Company engaged in
commercial banking business based on Islamic Shari'ah with 63.09% foreign shareholding
having largest branch network ( total 354 Branches) among the private sector Banks in
Bangladesh. It was established on the 13th March 1983 as the first Islamic Bank in the South
East Asia.

It is listed with Dhaka Stock Exchange Ltd. and Chittagong Stock Exchange Ltd. Authorized
Capital of the Bank is Tk. 20,000 million and Paid-up Capital is Tk. 16,099.91 million having
33,686 shareholders as on 31st December 2018.

Mission

To establish Islamic Banking through the introduction of a welfare oriented banking system and
also ensure equity and justice in the field of all economic activities, achieve balanced growth and
equitable development in through diversified investment operations particularly in the priority
sectors and least developed areas of the country. To encourage socio-economic upliftment and
financial services to the loss-income community particularly in the rural areas.

Vision

Our vision is to always strive to achieve superior financial performance, be considered a leading
Islamic Bank by reputation and performance.

 Our goal is to establish and maintain the modern banking techniques, to ensure soundness and
development of the financial system based on Islamic principles and to become the strong and
efficient organization with highly motivated professional, working for the benefit of people,
based upon accountability, transparency and integrity in order to ensure stability of financial
systems.

8
  We will try to encourage savings in the form of direct investment.

 We will also try to encourage investment particularly in projects which are more likely to lead
to higher employment.

Strategic Objectives

 To ensure customers' satisfaction.

 To ensure welfare oriented banking.
 To establish a set of managerial succession and adopting technological changes to ensure
successful development of an Islamic Bank as a stable financial institution.
 To prioritize the clients welfare.
 To emerge as a healthier & stronger bank at the top of the banking sector and continue
stable positions in ratings, based on the volume of quality assets.
 To ensure diversification by Sector, Size, Economic purpose & geographical location
wise Investment and expansion need based Retail and SME/Women entrepreneur financing.
  To invest in the thrust and priority sectors of the economy.
 To strive hard to become a employer of choice and nurturing & developing talent in a
performance-driven culture.
 To pay more importance in human resources as well as financial capital.
 To ensure lucrative career path, attractive facilities and excellent working environment.
 To ensure zero tolerance on negligence in compliance issues both sharia’h and regulatory
issues.
 To train & develop human resources continuously & provide adequate logistics to satisfy
customers’ need.
 To be excellent in serving the cause of least developed community and area.
 To motivate team members to take the ownership of every job.
 To ensure developemnt of devoted and satisfied human resources.
 To encourage sound and pro-active future generation.
 To achieve global standard.
 To strengthen corporate culture.
 To ensure Corporate Social Responsibilities (CSR) through all activities.
 To promote using solar energy and green banking culture and echological balancing.

Core Values

 Trust in Almighty Allah

 Strict observance of Islamic Shari’ah
 Highest standard of Honesty, Integrity & Morale
 Welfare Banking
 Equity and Justice
 Environmental Consciousness
 Personalized Service
 Adoption of Changed Technology
 Proper Delegation, Transparency & Accountability

9
  

Commitments

 To Shariah
 To the Regulators
 To the Shareholders
 To the Community
 To the Customers
 To the Employees
 To other stakeholders
 To Environment

Objective of the Study

The study is designed to achieve the following objectives:
 To assess the financial performance of the selected companies
 To assess the probability of bankruptcy of the selected companies
 To compare individual performance with the industry performance

Methodology

We use quantitative approach for our paper because the majority of data collection from the
quantitative approach. Data has been taken from Information Service Network Limited and
Islamic Bank Bangladesh Limited. We used the model to analysis financial performance and
financial soundness of the selected companies. Finally, we calculated the ratios to measure the
performance of each company and interpret the company condition.

10
Chapter 2
Body

11
 2.1 Collected Data

2.1.1 Information Service Network Limited

Financial Statement

Particulars 2010-2011 2009-2010 2008-2009 2007-2008 2006-2007

Net Assets

Non current assets 107140147 100239960 98852815 41,414,318.00 37,878,622.00

Tangible fixed assets, accumulated of depreciation 102695812 97495908 98201582 40,493,283.00 36,842,312.00
IPO-Expenses 2265726 ..... 303606 607,208.00 910,810.00
Investments (at cost) 2178609 2744052 347627 313,827.00 125,500.00

Current Assets 102097778 90982836 67473791 64,336,350.00 56,350,312.00

Account receivable 82314542 66955457 50903474 45,684,828.00 38,795,067.00

Accrued loan interest 809544 809544 809544 809,544.00 809,544.00
Loans, advances and deposits 17395940 17941134 11654009 10,218,182.00 9,066,685.00
Cash and cash equivalents 1577752 5276701 4106764 7,623,796.00 7,679,016.00

Current Liabilities and Provisions - 48,949,117.00 - 31,700,166.00 - 11,049,312.00 - 12,977,248.00 - 18,089,650.00

Accrued expenses - 6,387,013.00 - 3,100,180.00 - 2,529,278.00 - 1,686,797.00 - 1,259,745.00

Liabilities for other finance - 5,183,024.00 - 4,098,859.00 - 3,425,034.00 - 2,999,268.00 - 2,944,205.00
Proposed dividend 31,370,196.00 - 18,614,264.00 ..... - 4,092,879.00 - 10,677,075.00
Provision for income tax 6,008,884.00 - 5,886,233.00 - 5,095,000.00 - 4,198,304.00 - 3,208,625.00

Net Current Assets 53,148,661.00 59,282,670.00 56,424,479.00 51,359,102.00 38,260,662.00

Non-Current Liabilities

Deferred tax liabilities - 126,611.00 - 91,111.00 - 64,011.00 - 51,080.00 - 49,632.00

Net Assets 160,162,197.00 159,431,519.00 155,213,283.00 92,722,340.00 76,089,652.00

Financed By:
Shareholders Equity 160,162,197.00 159,431,519.00 155,213,283.00 92,722,340.00 76,089,652.00

Share capital 99,047,650.00 90,043,332.00 81,857,575.00 81,857,575.00 71,180,500.00

Retained earnings-as per profit and loss account 14,325,322.00 17,844,604.00 16,529,505.00 6,864,765.00 909,152.00
General reserve 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00 2,000,000.00
Dividend eqalization fund 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00
Inflation and currency flactuation fund 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00 1,000,000.00
Capital reserve 42,789,225.00 47,543,535.00 52,826,203.00 ..... ......

12
 Profit and Loss Account

Note 2010-2011 2009-2010 2008-2009 2007-2008 2006-2007

Operating reveneu 52067897 48905544 47006667 41268472 38,968,840

Operating expense 27154216 -24637179 -26105102 -20065998 -21,069,288

Gross Profit 24913681 24268365 20901565 21202474 17,899,552

Other Income 16633824 22227985 19617487 13765727 12,345,870

41547505 46496350 40519052 34968201 30,245,422

Other Expenses 35904318 36177161 29944685 23928582 20,505,658

Administrative expense 32317278 35267291 29641083 23624980 20,202,056

Amortaization of share issue expense 3587040 303606 303602 303602 303,602
Financial expenses ..... 606264 ..... ..... .....
Net Profit Before Tax for the Year 5643187 10319189 10574367 11039619 9,739,764

Deferred tax expenses 35500 27100 12931 1448 49,632

Provision for income tax for the year 122651 791233 896696 989679 897,013

Net Profit After tax for the Year 5485036 9500856 9664740 10048492 8,793,119

profit bought forward 8840286 84343748 6864765 909152 1,793,108

Dividend equalization fund ...... ...... ..... ..... 10,00,000
Available for appropriation ..... ..... 16529505 10957644 11,586,227

Appropriation:

Proposed dividend ..... .... ..... 4092879 10,677,075

Balance Transfarred to Balance Sheet 14325322 17844604 16529505 6864765 909,152

Earnings per share (per value TK. 10/- ) 0.55 1.05 1.18 1.22 TK. 1.23

13
 2.1.2 Islamic Bank Bangladesh Limited
Financial Statement

Particulars 2010-2011 2009-2010 2008-2009 2007-2008 2006-2007

Property and Assets

Cash 40,631,914,271.00 39,053,405,096.00 37,485,668,446.00 31,330,319,841.00 17,076,455,162.00

Cash in hand (Including foreign currency) 4,655,996,987.00 3,787,386,652.00 2,480,772,445.00 3,107,360,415.00 2,907,141,037.00
Balance with bangladesh Bank and its agent banks (Including foreign currency) 35,975,917,284.00 35,266,018,444.00 35,004,896,001.00 28,222,959,426.00 14,169,314,125.00

Balance with other banks and financial institutions 16,853,296,480.00 7,114,712,459.00 7,678,373,370.00 5,623,181,755.00 4,012,328,480.00

In Bangladesh 13,140,359,824.00 3,733,285,761.00 5,858,578,551.00 1,318,730,016.00 2,353,854,350.00

Outside Bangladesh 3,712,936,656.00 3,381,426,698.00 1,819,794,819.00 4,304,451,739.00 1,658,474,130.00

Investments in Share and Securities 15,853,181,923.00 13,471,200,872.00 11,136,610,399.00 7,532,610,399.00 20,365,710,399.00

Governments 13,927,177,770.00 11,668,666,620.00 11,112,000,000.00 7,508,000,000.00 20,341,950,000.00

Others 1,926,004,153.00 1,802,534,252.00 24,610,399.00 24,610,399.00 23,760,399.00

Investments 305,790,180,873.00 261,725,131,026.00 214,615,801,272.00 180,053,935,732.00 144,520,609,595.00

General investments etc. 287,861,385,224.00 243,285,083,653.00 202,885,879,274.00 169,830,762,745.00 133,881,027,350.00

Bill purchased and discounted 17,928,795,649.00 18,440,047,373.00 11,729,921,998.00 10,223,172,987.00 11,039,582,245.00

Fixed Aseets including Premises, Furniture and fixtures 7,110,249,574.00 6,757,093,310.00 6,512,363,381.00 4,407,218,653.00 3,927,232,675.00

Other Assets 3,136,781,099.00 2,663,628,971.00 874,022,838.00 1,931,868,964.00 1,000,013,406.00

Total assets 389,375,604,220.00 330,785,717,734.00 278,302,839,706.00 230,879,135,344.00 191,362,349,717.00

Liabilities and Capital

Borrowing from other banks, financial institutions and agents ..... ..... ..... ..... .......

Deposits and other accounts 341,855,262,815.00 291,937,493,665.00 244,292,144,333.00 200,343,413,833.00 166,325,286,292.00

Current and other accounts 132,051,082,776.00 111,143,631,482.00 23,794,371,681.00 18,958,129,364.00 19,165,151,675.00

Bill payable 65,167,293,216.00 51,156,122,735.00 2,545,713,606.00 2,308,038,239.00 1,767,587,001.00
Mudaraba savings deposits 103,114,794,140.00 91,159,942,987.00 95,081,551,200.00 77,498,413,122.00 62,403,504,533.00
Mudaraba term deposits 38,658,697,588.00 35,497,186,925.00 45,268,007,944.00 36,706,852,995.00 31,103,691,826.00
Bearer certificate of deposits 2,863,395,095.00 2,980,609,536.00 ...... .....
Other mudaraba deposits .... .... 77,602,499,902.00 64,871,980,113.00 21,885,351,257.00

Mudaraba perpitual bond 3,000,000,000.00 30,000,000,000.00 3,000,000,000.00 3,000,000,000.00 3,000,000,000.00

Other liabilities 16,713,922,449.00 12,168,253,018.00 10,739,191,843.00 13,475,229,532.00 10,195,727,171.00

Deferred tax liabilities 192,664,063.00 163,148,320.00 165,959,677.00 .... ....
Total liabilities 361,761,849,327.00 307,268,895,003.00 258,197,295,853.00 216,818,643,365.00 179,521,013,463.00

Capital/ share-holders equity 27,613,754,893.00 23,516,276,731.00 20,105,543,853.00 14,060,491,979.00 11,841,336,254.00

Paid up capital 10,007,712,000.00 7,413,120,000.00 6,177,600,000.00 4,752,000,000.00 3,801,600,000.00

Statutory reserve 10,004,426,808.00 7,934,963,742.00 6,244,022,554.00 4,940,490,903.00 3,026,498,149.00
Other reserve 4,585,606,725.00 5,551,580,020.00 5,830,641,299.00 2,942,401,076.00 3,441,147,062.00
Retained earnings including proposed dividend 3,015,952,005.00 2,616,599,517.00 1,853,280,000.00 1,425,600,000.00 1,572,091,043.00
Minority expense 57,355.00 13,452.00 .... ...... .....

Total liabilities and share-holders equity 389,375,604,220.00 330,785,171,734.00 278,302,839,706.00 230,879,135,344.00 191,362,349,717.00
14
 Profit and Loss Account
Note 2010-2011 2009-2010 2008-2009 2007-2008 2006-2007

Investment income 32,019,532,444.00 24,766,264,960.00 21,370,531,603.00 19,543,835,472.00 14,572,185,149.00

Profit paid on deposits - 18,401,218,085.00 - 14,471,890,918.00 - 13,076,994,556.00 - 12,162,098,921.00 - 9,410,587,581.00

Net investment income 13,618,314,359.00 10,294,374,042.00 8,293,537,047.00 7,381,736,551.00 5,161,597,568.00

Income from investments in share 331,004,637.00 490,416,014.00 115,163,000.00 408,756,167.00 284,002,533.00

Commission, exchange and brokerage 5,297,455,786.00 3,997,732,016.00 3,437,201,409.00 3,337,523,756.00 2,579,012,567.00
Other operating income 876,633,643.00 929,424,233.00 480,961,024.00 940,217,622.00 264,322,762.00

Total operating income 20,123,408,425.00 15,711,946,305.00 12,326,862,480.00 12,068,234,096.00 8,288,935,430.00

Operating expenses

Salary and allowance 4,655,983,050.00 4,289,276,274.00 3,149,068,585.00 2,834,358,181.00 2,034,596,249.00

Rent, taxes, insurance, electricity etc. 507,063,897.00 419,306,643.00 336,713,118.00 292,347,265.00 216,615,830.00
Legal expenses 15,257,288.00 13,401,957.00 11,389,222.00 13,563,309.00 11,984,452.00
Postage, stump, telecommunication etc 94,267,115.00 86,280,529.00 88,234,680.00 87,745,947.00 84,949,278.00
Advertaisment,stationary, printings etc 262,929,404.00 149,122,194.00 111,869,773.00 101,722,324.00 78,757,200.00
Cheif executive's salary and fees 2,628,541.00 5,280,000.00 4,280,000.00 3,628,387.00 2,629,717.00
Director's fees and expenses 2,749,283.00 9,838,845.00 8,028,938.00 8,669,347.00 8,372,181.00
Auditor's fees 1,593,400.00 1,278,750.00 1,045,000.00 721,020.00 449,350.00
Charges on investment losses ..... ..... ..... ...... .....
Depreciation and repair of bank assets 409,590,979.00 350,619,785.00 276,017,211.00 223,779,748.00 179,023,486.00
Other expenses 1,128,991,237.00 782,760,166.00 559,327,882.00 549,269,940.00 509,197,568.00

Total operating expenses 7,291,655,115.00 6,107,165,143.00 4,545,974,409.00 4,115,805,498.00 3,126,575,311.00

Profit or loss before provision 12,831,753,310.00 9,604,781,162.00 7,780,888,071.00 7,952,428,598.00 5,162,360,119.00

Provision for investment and off-balance sheet items 2,384,314,796.00 1,082,989,130.00 1,263,029,818.00 1,118,209,229.00 1,381,535,652.00
Provision for diminution in value of share 289,077,029.00 ..... .... ..... ....
Other provisions ..... 32,000,000.00 200,000.00 12,386,000.00 ....

Total provision 2,673,391,825.00 1,114,989,130.00 1,263,229,818.00 1,130,595,229.00 1,381,535,652.00

Gain on revaluation reserve of securities .... ..... 474,000,000.00 .....
Total profit before taxes 10,158,361,485.00 8,489,792,032.00 6,517,658,253.00 6,347,833,369.00 3,780,824,467.00

Provision for taxes

Current tax 5,504,252,091.00 4,007,123,511.00 3,086,406,379.00 3,647,236,601.00 1,700,771,010.00

Deferred tax 29,515,743.00 - 2,811,357.00 27,700,000.00 25,800,000.00 31,000,000.00

Net profit or loss after tax 4,624,593,651.00 4,485,479,878.00 3,403,551,874.00 2,674,796,768.00 2,049,053,457.00

Retained earnings from previous year 30,333,160.00 ..... ..... ...... ......
Add: net profit after tax 4,624,593,651.00 4,485,479,878.00 3,403,551,874.00 2,674,796,768.00 2,049,053,457.00
Profit available for distribution 4,654,926,811.00 4,485,479,878.00 3,403,551,874.00 2,674,796,768.00 2,049,053,457.00

Less: appropriation 4,654,926,811.00 4,485,479,878.00 3,403,551,874.00 2,674,796,768.00 2,049,053,457.00

Statutory reserve 2,069,463,066.00 1,690,941,188.00 1,303,531,651.00 1,269,566,674.00 756,164,894.00

General reserve - 430,484,615.00 177,938,721.00 246,740,223.00 - 20,369,906.00 - 279,202,480.00
Retained earnings including proposed didvidend 3,015,948,360.00 2,616,599,969.00 1,853,280,000.00 1,425,600,000.00 1,572,091,043.00

Earnings per share(per value tk.0 10) 4.62 60.51 55.1 56.29 539
15
2.2 Mathematical Analysis

2.2.1 Profitability Ratios and Solvency Ratios

INFORMATION NETWORK SERVICE LTD.
Profitability Ratios Solvency Ratio

Return on Gross Debt to Debt-to- Times

Year Return on Earning Return on Net Profit
Capital Profit assets Equity interest
Equity per share Asset Margin
Employed Margin ratio ratio earned

2011 0 2.46 0.76 0.16 1.62 1.67 44.87 256.78 2.77

2010 1.2 2.88 1.24 0.22 1.45 1.56 42.88 267.56 2.45
2009 2.2 1.67 0.44 0.26 1.44 1.45 42.56 288.22 2.76
2008 0.78 4.11 0.11 0.15 1.54 1.02 45.77 256.55 2.66
2007 0.88 2.66 0.12 0.17 1.28 1.04 41.67 244.11 2.11
Mean 1.012 2.43 0.89 0.45 1.3 1.5 45.85 256.11 2.28
S.D 1.36 2.87 1.36 1.23 1.44 1.36 40.23 250.11 2.65
C. V 46.53% 50.48% 36.14% 32.56% 45.96% 59.47% 84.65% 140.74% 64.14%

ISLAMI BANK BANGLADESH LIMITED

Profitability Ratios Solvency Ratio

Return on Gross Debt to Debt-to- Times

Year Return on Earning Return on Net Profit
Capital Profit assets Equity interest
Equity per share Asset Margin
Employed Margin ratio ratio earned

2011 -0.07 2.4 0.88 0.16 1.58 1.08 45.75 280.67 2.76
2010 -0.06 4.08 1.08 0.17 1.76 1.05 44.77 278.66 2.87
2009 -0.07 2.88 0.67 0.27 1.45 1.22 42.56 266.67 2.88
2008 -0.08 2.87 0.28 0.17 1.54 1.06 40.87 245.87 2.45
2007 -0.06 2.84 0.45 0.17 1.66 1.02 41.67 266.87 2.22
Mean -0.08 2.45 0.89 0.36 1.45 1.08 44.65 265.45 2.78
S.D 0.56 2.48 0.55 0.47 1.65 1.26 44.25 260.12 2.8
C.V 25.85% 65.49% 39.63% 35.45% 70.97% 65.24% 98.25% 220.14% 69.23%

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 2.2.2 Activity Ratios

1.Inventory Turnover Ratio

Name of the company
Islamic Bank Bangladesh Limited 2006-2007 2007-2008 2008-2009 2009-2010Mean S.D C.V
Information Services Network Limited 0.58 4 0.26 0.15 1.25 1.8452 147.67%
0.035 0.029 0.034 0.11 0.302 0.254506 84.27%
2. Receivable Turnover Ratio

Name of the company

Islamic Bank Bangladesh Limited 2006-2007 2007-2008 2008-2009 2009-2010Mean S.D C.V
Information Services Network Limited 0.46 0.61 1.85 2.01 1.2325 2.26 170.34%
1.11 2.5 0.97 0.82 1.35 0.78 57.78%
3.Accounts Payable Turnover Ratio
Name of the company
Islamic Bank Bangladesh Limited 2006-2007 2007-2008 2008-2009 2009-2010Mean S.D C.V
Information Services Network Limited o.o34 0.054 0.02 0.11 0.0545 0/0046 8.61%
12.72 13.62 12.38 8.75 11.88 2.14 18.01%
4.Fixed assets Turnover ratio 4. Fixed Asset Turnober Ratio
Name of the company
Islamic Bank Bangladesh Limited 2006-2007 2007-2008 2008-2009 2009-2010Mean S.D C.V
Information Services Network Limited 2.07 2.74 8.89 1.16 2.325 1.089 46.83%
1.06 0.98 0.48 0.5 2.325 1.089 40.79%
5.Total Asset Turnover ratio
Name of the company
Islamic Bank Bangladesh Limited 2006-2007 2007-2008 2008-2009 2009-2010Mean S.D C.V
Information Services Network Limited 0.043 0.05 0.04 0.05 0.04575 0.0046 147%
0.41 2.56 0.28 0.25 0.88 1.12 127.27%

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2.2.3 Liquidity Ratios

 Current Ratio

Name of The Company 2007-20082008-20092009-20102010-20112011-2012 Mean S.D C.V

Islamic Bank Bangladesh Ltd. 1.99 1.89 1.72 2.41 2.57 2.002 0.35928 0.17946
Information service Network Ltd 2.85 2.85 2.56 2.53 3.12 2.782 0.24304 0.08736

 Quick (Acid-Test) Ratio

Name of The Company 2007-20082008-20092009-20102010-20112011-2012 Mean S.D C.V

Islamic Bank Bangladesh Ltd. 0.19 0.12 4.82 0.11 0.82 6.87154 2.03855 0.29667
Information service Network Ltd 1.23 1.48 1.96 1.58 1.96 1.45 0.31705 0.21865

 Cash Ratio

Name of The Company 2007-20082008-20092009-20102010-20112011-2012 Mean S.D C.V

Islamic Bank Bangladesh Ltd. 0.08 0.05 0.07 0.03 0.09 0.064 0.02408 0.3763
Information service Network Ltd 0.05 0.09 0.09 0.1 0.12 0.09 0.0255 0.28328

 Cash Flow from Operation Ratio

Name of The Company 2007-20082008-20092009-20102010-20112011-2012 Mean S.D C.V

Islamic Bank Bangladesh Ltd. 0.19 0.42 0.33 0.56 0.54 0.408 0.15353 0.37629
Information service Network Ltd 0.24 0.32 0.37 0.65 0.65 0.446 0.14368 0.32215

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 2.2.4 Z-Test Ratios

Table 17: Working Capital to Total Assets(in times)

Name of The Company 2007-20082008-20092009-20102010-20112011-2012 Mean S.D C.V

Islamic Bank Bangladesh Ltd. 0.096 0.082 0.1824 0.0712 0.1003 0.10638 0.04403 0.41393
Information srvice Network Ltd 0.0777 0.0205 0.0655 0.0872 0.0423 0.05864 0.02715 0.46293

Table 18: Retained Earnings to Total Assets(in times)

Name of The Company 2007-20082008-20092009-20102010-20112011-2012 Mean S.D C.V

Islamic Bank Bangladesh Ltd. 0.046 0.085 0.068 0.095 0.0636 0.07152 0.0191 0.26707
Information service Network Ltd 0.0799 0.0653 0.0852 0.095 0.0825 0.08158 0.01075 0.13172

Table 19: Earning before Interest and Tax(EBIT) to Total Assets(in times)

Name of The Company 2007-20082008-20092009-20102010-20112011-2012 Mean S.D C.V

Islamic Bank Bangladesh Ltd. 0.032 0.52 0.135 -0.0015 0.0035 0.1378 0.22064 1.60113
Information service network Ltd 0.0235 0.3135 0.154 0.12 0.028 0.1278 0.1184 0.92642

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 Chapter 3
Findings and Recommendations

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2.3.1 Profitability Ratios
All the profitability ratios- gross profit margin, operating profit margin, net profit margin,
earnings per share all are rising time to time for both of the company.

It means that their profit making capacity is good.

2.3.2 Solvency Ratios

All the solvency ratios are above 20% overall in the respective time in both of Islamic Bank
Bangladesh Limited and Information Service Network Limited. That means, they have the
almost same amount of liabilities and equity which means their risk management is much
effective

2.3.2 Activity Ratios

In Information Service Network Limited, the activity ratios – inventory turnover, average
collection period, average payment period and total asset turnover seem to rise over time except
the inventory turnover which tends to fall time to time. This will cause difficulty in occurring
inventory management. They need to be more efficient in operating with services.

On the other hand, in the Islamic Bank Bangladesh Limited all the ratios are continuously rising.
This scenario leads the bank to a profit seeking way and it will increase the positive impact of
long run operations.

2.3.3 Liquidity Ratio

The Current Ration and the Quick (Acid-Test) Ratio of Information Service Network Limited
tend to rise from the year of 2007 to 2011. And also in Olympic Industries Ltd., the liquidity
ratios are tending to go up.

It means both of the companies have sufficient ability to repay the short-term debt.

2.3.5 Z-Test Ratios

Z score of Information Service Network Limited and Islamic Bank Bangladesh Limited are both
in a satisfied state. The working capital ratios for both companies are above the standard that
means there is enough capital supply. Retained earnings ratio and earnings before interest are
also tending to get high for both companies.
Equity to liability is in standard for both companies that mean there is enough availability of
equity against liability.Which all mean the z-test ratio is getting up for both companies.

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3.0 Conclusion

All the ratios we calculate are overall in a satisfactory state for both companies. All the
profitability ratios- gross profit margin, operating profit margin, net profit margin, earnings per
share all are rising time to time for both of the company. All the solvency ratios are above 20%
overall in the respective time in both of Islamic Bank Bangladesh Limited and Information
Service Network Limited. In Information Service Network Limited, the activity ratios –
inventory turnover, average collection period, average payment period and total asset turnover
seem to rise over time except the inventory turnover which tends to fall time to time. This will
cause difficulty in occurring inventory management. They need to be more efficient in operating
with services. On the other hand, in the Islamic Bank Bangladesh Limited all the ratios are
continuously rising. This scenario leads the bank to a profit seeking way and it will increase the
positive impact of long run operations. The Current Ration and the Quick (Acid-Test) Ratio of
Information Service Network Limited tend to rise from the year of 2007 to 2011. And also in
Olympic Industries Ltd., the liquidity ratios are tending to go up. Z score of Information Service
Network Limited and Islamic Bank Bangladesh Limited are both in a satisfied state. The
working capital ratios for both companies are above the standard that means there is enough
capital supply. Retained earnings ratio and earnings before interest are also tending to get high
for both companies. Equity to liability is in standard for both companies that mean there is
enough availability of equity against liability.
Through the study it found that both companies are in a satisfactory state for every ratios though
it fluctuates in year to year but the overall condition of the two companies from2007-2011 is able
to satisfied the stockholders, investors, management and so on.

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 References

1. Principles of Managerial Finance

- Lawrence J. Gitman
- Chand J. Zutter

2. Annual Report of Information Service Network Limited

http://www.bangla.net/uploads/file/ISN_Annual_Report_2016-2017.pdf

3. Annual Report of Islamic Bank Bangladesh Limited

https://www.islamibankbd.com/annual_report/Annual%20Report%202017.pdf

4. Source of all calculations:

Excel File - IB_206_11th_TP_39_41_43_45

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