Topic

An Analysis of Financial
Performance

Supervised By:
Sk. Habibur Rahaman
Senior Lecturer
Manarat International University
Prepared By:
Al Sukran - 1413MBA50346
Manarat International University

Introduction

Background of the Study

This is a report on my internship at BRAC BANK
LTD this report details my experiences at the
company.
The internship and this report are part of my
MBA requirements for the ACCOUNTING at
major at Manarat International University. As
an accounting student I have to work with
accounting related topic. I discuss about An
Analysis of Financial Performance of BRAC
Bank Ltd. So I analysis some data base on
different ratio analysis.

Objective of the Study

This report is designed to know more about the
Financial Ratio Analysis of BRAC BANK LTD. and
analyze the ratio of this organization and identify the
financial condition of this organization. In addition,
the study seeks to achieve the following objectives:
To analysis the Financial Statement of Brac Bank Ltd.
To calculate the financial ratios and identify the
areas of concern.
To identify and assess the present Financial Ratio
Analysis of Brac Bank Limited.

Methodology of the Study

This report is prepared by two sources
Primary Sources:Basically this type of Sources
included working at bank and interviews with others the
bankers ofBRAC BANK LTD.
Secondary Sources:Secondary data were collected in
the following ways:
Data gathered within the organization itself.
Data gathered from Texts
Internet sources.
General reports
Annual reports
Official documents

Limitation of the Study

However the some of the
limitations I have face while
preparing this Report are listed
as follows:

Time Limitation
Inadequate Data
Lack of Record
Lack of experiences

Overview of BRAC Bank Ltd

BRAC Bankwas founded on 4 July 2001 as a private
commercial bank focused on Small and Medium Enterprises
(SME). BRAC Bank was founded to reach the large number of
unbanked people which were not covered by traditional bank.
The main concept of the bank was to facilitate Small and
Medium Enterprises (SME). Since then the Bank has become
a leading bank in Bangladesh.
Financial Services - SME Banking, Retails Banking, Card
Service (Credit & Debit), Foreign Exchange & Related
Services, Wholesale Banking & Custodial Service, Probashi
Banking
Distribution Network - Branch: 166 (Dec, 2014),
SME Unit Office: 458, Remittance Delivery Point: 1800,
ATM Booth: 350+, Apon Somoy (Financial Kiosk): 16

Analysis and
Findings

Analysis
Ratios allow us to compare companies
across industries, big and small, to
identify
their
strengths
and
weaknesses. Financial ratios are often
divided into four main categories:

Analyzing
Analyzing
Analyzing
Analyzing

Liquidity Ratio
Activity Ratio
Debt Ratio
Profitability

Ratio Analysis of Brac

Bank Ltd

Current Ratio
Current Ratio=Current Asset/Current Liabilities
Year

2010

2011

2012

2013

Current Asset

108,791,342,196

120,691,016,472

157,898,600,871

157,010,788,637

95,407,908,332

107,837,411,843

144,202,510,136

139,510,917,707

1.14

1.12

1.09

1.13

Current Liability
Current Ratio

1.14

1.13

1.12
1.09

Figure: Current Ratio

Operating Cash Flow Ratio

Operating Cash Flow Ratio=Operating Cash
Flow/Total Debt
Year

2010

2011

2012

2013

Operating Cash
Flow

(1,439,205,626)

933,830,374

19,855,243,700

(5,679,858,459)

Current Liability

95,407,908,332

107,837,411,843

144,202,510,136

139,510,917,707

-0.02

0.01

0.14

-0.04

Operating Cash
Flow Ratio

0.14

-0.02

0.01

Figure: Operating Cash Flow

-0.04

Cash Income Ratio

Cost Income Ratio = Total operating Expenses/Total Operating
Income
Year

2010

2011

2012

2013

Total Operating
Income

9,527,527,784

10,134,733,422

10,894,801,767

12,460,835,400

Total Operating
Expenses

4,751,309,242

5,164,822,269

5,749,605,759

6,535,958,634

0.50

0.51

0.53

0.52

Cost Income
Ratio

0.53
0.51
0.50

Figure: Cost Income Ratio

0.52

Total Asset Turnover

Total Asset Turnover= Operating Income/Total Asset
Year

2010

2011

2012

2013

9,527,527,784

10,134,733,422

10,894,801,767

12,460,835,400

117,297,555,748

133,201,048,438

173,676,792,029

171,901,669,638

0.08

0.08

0.06

0.07

Total Operating
Income
Total Asset
Total Asset
Turnover Ratio

0.08

0.08
0.06

Figure: Total Asset Turnover

0.07

Investment to Deposit Ratio

Investment to Deposit Ratio = Total investment/Total Deposit
Year

2010

2011

2012

2013

Total Investment

12,855,985,261

14,198,827,511

25,372,525,282

21,298,625,661

Total Deposit

88,157,908,331

103,725,529,225

134,646,448,482

124,746,344,037

Investment to
Deposit Ratio

0.15

0.14

0.19

0.17

0.19
0.08

0.14

0.17

Figure: Investment to Deposit Ratio

Debt Ratio
Debt ratio= Total Liabilities/Total Assets
Year

2010

2011

2012

2013

Total Liabilities

107,879,663,647

123,598,443,600

163,522,243,477

160,314,216,168

Total Asset

117,297,555,748

133,201,048,438

173,676,792,029

171,901,669,638

Debt ratio

0.92

0.93

0.94

0.93

0.94
0.93
0.92

Figure: Debt Ratio

0.93

Time Interest Earned Ratio

Time Interest Earned Ratio =Earnings before interest &
Taxes/Interest
Year

2010

2011

2012

2013

Earning Before
Interest & Tax

4,956,218,541

5,164,822,269

5,145,196,008

5,924,876,766

Interest

1,984,711,371

2,053,030,038

1,987,929,120

2,900,072,524

2.50

2.52

2.59

2.04

Time Interest
Earned Ratio

2.50

2.52

2.59

2.04

Figure: Time Interest Earned Ratio

Net Profit Margin

Net Profit Margin=Net profit after tax/operating income
Year

2010

2011

2012

2013

Net Profit after

Tax

1,670,361,526

1,702,381,869

540,381,091

1,246,324,101

Total Operating
Income

9,527,527,784

10,134,733,422

10,894,801,767

12,460,835,400

0.18

0.17

0.05

0.10

Net Profit Margin

0.18

0.17
0.10
0.05

Figure: Net Profit Margin

Return On Asset
Return on Asset (ROA) =Net Profit after tax/Total Asset
Year

2010

2011

2012

2013

Return on Asset
(ROA)

1.55%

1.36%

0.35%

0.72%

1.55
%

1.36
%
0.35
%

Figure: Return On Asset

0.72
%

Return On Asset
Return on Equity=Net Profit after Tax/ Shareholders equity
Year

2010

2011

2012

2013

Return on Equity

18.95%

17.90%

5.47%

11.46%

18.95
%

17.90
%
11.46
%
5.47
%

Figure: Return On Equity

Earnings Per Share

Earnings per Share =Earnings available for common stock
holder /
No of shares of common stock
Year

2010

2011

2012

2013

Earnings per
Share

5.68

5.54

1.52

3.20

5.68

5.54
3.20
1.52

Figure: Earnings Per Share

Cost of Fund
Year

2010

Cost of Fund

2011

8.54%

8.54
%

2012

8.66%

8.66
%

2013

8.43%

8.13%

8.43
%
8.13
%

Figure: Cost of Fund

Credit Deposit Ratio

Year
Credit Deposit
Ratio

2010

2011

95.63%

95.63
%

2012

84.82%

84.82
%

2013

76.96%

76.96
%

Figure: Credit Deposit Ratio

82.30%

82.30%

Return on Investment
Year

2010

Return on
Investment

2011

9.00%

9.00
%

2012

2013

12.41%

3.44%

6.05%

12.41
%
3.44
%

Figure: Return on Investment

6.05
%

Net Asset Value Per Share

Year

2010

Net Asset Value

Per Share

2011

33.29

33.2
9

2012

28.80

28.8
0

2013

26.34

26.3
4

26.14

26.1
4

Figure: Net Asset Value Per Share

Findings

In the analysis it has seen that in 2010 BBLs current ratio

was highest and 2012 it was lowest among the years. It has
seen that BBL maintains current ratio more than 1:1 ratios.
It indicates that BBLs liquidity position is not bad.
In 2010 BBLs Cost Income Ratio was lowest it indicates
positive sign. We know that the lowest the ratio, the higher
the operating efficiency. But company maintains an average
around .50 per year.
The greater the total asset turnover; it considered more
efficiency. From the analysis it has seen that in year 2010 to
2012 total asset turnover ratio of BBL decreasing but at
2013 its higher than previous which indicate better
efficiency of BBL.
BBLs investment to deposit ratio is decreasing in years
2010 to 2011 which conveys negative signal for the bank.
But in 2012 its again increasing. Company maintains an

Findings

In the year 2010 to 2012 BBLs net profit margin decreasing

year by year which indicate that the banks operating result
were not improving. But in 2013 it improved better than
previous year.
From the analysis it has seen that BBLs Returns on Asset
were gradually decreasing and in 2010 to 2012. But its
improved from 2012 to 2013.
From the analysis return on equity of BBLs was around 18%
in 2010 and 2011. In 2012 because of recession and bad
market position Return on Equity reduced unbelievably at
5.47%. But in 2013 BBLs able to increase their ROE at
11.46%.
From the analysis we found that earnings per share is 5.50
in 2010 & 2011 But in 2012 EPS was decrease at 1.52 and in
2013 again BBLs EPS remain increase.
From analysis Net Asset Value Per Share of BBLs was 33.29

Recommendations

It is seen in the study that the liquidity ratio of B.B.L during

2012 & 2013. The liquidity of the bank should be reds by
improving current & quick ratio. But company should
maintain this properly and has to improve.
It is further seen that the loan to deposit ratio of the bank
was lower during 2012 & 2013. Therefore the loan to deposit
ratio must be improve by increasing need loan.
Assets utilization ratio was also lower in 2011 & 2012. In
case B.B.L. This ratio should also be increased by increasing
operating income.
Finally, at the end of the year we can see that although
there have some difficulties but we can overcome those
difficulties by removing all the weaknesses to develop the
product effectively and grab more opportunity hidden in the
banking industry and the bank should also increase the
strength with their solid brand image, experience and skills

Conclusions

Banking sector is the chief financial intermediaries in a

country. Its also true for Bangladesh. BRAC BANK LTD is a
very challenging institution. In the age of globalization and
free trade, the process and the system of running a bank is
changing. BBL is continuously managing itself with this
changing environment. The days are gone for banks to keep
their functions confined within the periphery of accepting
deposit and lending money as well as making a profit. The
company strategies are clear and concise. It was also found
that the bank is doing better in most of the sectors and their
performance is better than average.
Finally it can be said that the bank is doing very good in the
competitive market and if it can continue to perform this
way it can become a leading banking institution which can
play a pivotal role in the development of the country.

Thank You