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Financial Statement and Ratio Analysis

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FINANCIAL STAEMENT AND RATIO ANALYSIS

Prepared for- Naznin Sultana Chaity (NSC)

GROUP ASSIGNMENT

BBA 223; Sec: B

Prepared by-                                                         Pranto Jouerder; 16.01.02.073                    Fahmida Tasnim Meem; 16.01.02.043             Kazi Asif Reza; 16.01.02.058                           Intesar Kabir; 16.01.02.060                           Monjurul Haque; 16.01.02.071

Date of Submission: January 31, 2018

Ahsanullah University of Science & Technology


Letter of Transmittal

January 31, 2018

Naznin Sultana Chaity (NSC)

Assistant Professor,

Dept. of Finance (BBA)

Ahsanullah University of Science & Technology,

Dhaka, Bangladesh

Subject: Prayer for Submission of the Assignment

Dear Mam,

We are pleased to present to you our assignment, which involved doing the financial statement of Olympic Industries and Bangas Ltd. We focused mainly on the ratio analysis, interpretation and comparison of those analysis. This report is to describe our observation, research, learning and recommendation based on the knowledge and the experiences gained during the course under your kind supervision and guidance. We would like to express our appreciation for your exquisite guidance and support throughout the project.

We have tried to cover all the requirements according to the guideline you gave us for this project. If you have any inquiry or need for clarification regarding this project, please let us know. Thank you for your time, guidance, and for providing us with this opportunity to learn.

Sincerely yours,

Pranto Jouerder _____________________

Fahmida Tasnim Meem _____________________

Kazi Asif Reza _____________________

Intesar Kabir _____________________

Monjurul Haque_____________________

Acknowledgment

To complete our group assignment, first of all our team is very grateful to Almighty Allah for the hard work, dedication, team effort and patience that we have put to finish our project work on time. We would also like to thank our team members as all of them devoted their full support and cooperation and gave valuable time to do the project work. Specially, we would like to thank our honorable faculty Naznin Sultana Chaity Mam for helping to guide our assignment work. We would like to express our gratitude for giving her valuable time and motivation which also helped us to make this assignment. Without the help of these people, our assignment paper would not have taken place appropriately.

Executive Summary

This report provides financial analysis of Bangas Ltd. and Olympic Industries which includes ratio analysis and comparison, interpretation of those analysis based on the last three year’s income statement and balance sheet. We also gave our recommendation for those companies based on this information. Methods of analysis include ratios such as Debt, Liquidity, Activity ratios etc. Other calculations include rates of return on Shareholders’ Equity and Total Assets and earnings per share to name a few. All calculations can be found in the description. The report also investigates the fact that the analysis conducted has limitations.

Table of Content

Name of the contents

page no.

INTRODUCTION

05-06

hISTORICAL BACKGROUND

07

ANALYSIS AND FINDINGS

08-19

CONCLUSION

20

RECOMMENDATION

21

BIBLIOGRAPHY

22

APPENDIX

23-27

Introduction

Course Name- Managerial Finance (BBA 223)

Chapter Name- Financial Statements and Ratio Analysis

Company Name- Olympic Industries and Bangas Ltd.

  • Objectives:
  1. To know about the two companies by making a thorough analysis of the two company’s financial statements over the last 3 years through ratio analysis and analysis of major components of the balance sheet trying to identify the actual state of the two companies since its enlistment in Dhaka Stock Exchange (DSE).
  2. To compare Bangas’s financial status with one of its rival firm (Olympic Industries) through ratio analysis.
  3. To make a recommendation about the companies.

  • Utility:

We have tried our best to deduce the financial position of Bangas and Olympic by the virtues of ratio Analysis. We have basically completed the five core sectors of Ratio Analysis:

  1. Profitability ratios
  2. Liquidity Ratios
  3. Activity Ratios
  4. Market Ratios
  5. Debt Ratio

We hope that our analysis of three consecutive years’ (2014, 2015 and 2016) Ratio Analysis will help us to better understand the current and future potentials of the company.

  • Methodology:
  1. For our primary data, we took help of our reference text book, class lectures and also the annual financial reports of the two companies.
  1. For our secondary data, we consulted with various websites and informative sites on the internet. All of which is cited at the end part of this report, in the reference section, to avoid plagiarism.
  1. Our analysis, especially with the ratio part considered both time series and cross section.
  • Limitations:

Time was a very big constraint during the process of preparation of this report. As the report had been prepared over a limited time period, time had to be budgeted and scheduled very calculatedly. There was very little time that could be used as lagging, in case something fell behind schedule. Adding up to that extent, the unavailability of all the annual financial reports of the companies had been a bottle neck throughout the entire preparation of the report. Another matter of concern was that, the report considers data only from the last three financial years. A report with analysis of the last ten to fifteen years may have been more precise and accurate. Moreover, many companies practice ambiguous accounting practices to get rid of tax that dilute the actual scenario. Also, these companies try to make their performance much more lucrative to the Shareholders by means of unethical practice which are completely unnoticeable to general public. Such practice if had taken place might have diluted our findings which are based on the information available in the “Annual Reports”.

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