Praise to Almighty the creator and sustainer who have given us

strength and opportunity to complete present topic. In fact, I left no

stone unturned to make the report stander, I helpful and useful. It is
indeed a great pleasure and honor on my part to have the opportunity
to submit this report.
First of all I would like to thank our dean, Faculty of Business studies
along with other faculty members of the Business Administration who
has arranged this practical orientation in bank. In this connection I
would also like to thank ------was my supervisor.
1
Acknowledgement
Chapter: 1
Introduction
2
1.1: INTRODUCTION
The main aim of a performance review is to provide an understanding of the
usiness! and! together with an ana"#sis of the re"evant information! provide an
interpretation of the resu"ts. The most effective performance review is provided
from a a"anced view of each of the activities of the organi$ation! which
necessari"# invo"ves the c"ose cooperation of each ro"e : mar%eting& research and
deve"opment& design& engineering& manufacturing& sa"es& "ogistics& finance& human
resources management 'Davies ( )oc$%o! 2**+!p.1,-..
The stages of performance review are shown in the fo""owing figure.1.
(10)
Conclusions
(9)
Investment
(8)
Management of
financial risk
(7)
Financial
(6) Liquiit!
(") #ro$t%

(&)
'fficienc!
(()
)rofita*ilit!
(+) Consieration
of ma,or features
(1) -./0
anal!sis
)erformance
revie$
/
0igure11: The stages of performance review
2ource: Davies and )oc$%o '2**+.
0inance a"wa#s eing disregarded in financia" decision ma%ing since it invo"ves
investment and financing in short1term period. 0urther a"so act as a restrain in
financia" performance! since it does not contriute to return on e3uit#. 4 we""
designed and imp"emented financia" management is e5pected to contriute
positive"# to the creation of a firm6s va"ue. Di"emma in financia" management is to
achieve desired trade off etween "i3uidit#! so"venc# and profitai"it#.
7anagement of wor%ing capita" in terms of "i3uidit# and profitai"it# management
in essentia" for sound financia" recita" as it have a direct effect on the profitai"it#
of the compan#. In this thesis I want to %now aout the financia" performance of
the compan#.
1.2 objectives of the study
I have prepared the report for some definite purposes. Those purposes are photographed
eneath as!
To find out the )usiness po"icies of R.7.Inter"ings.
To eva"uate the performance of R.7.Inter"ings.
To %now the performance education techni3ues and procedures.
To %now the authorities invo"ve in performance eva"uation.
To e5amine the short1term so"venc#8"i3uidit# position of R.7.
Inter"inings..
To e5amine the "ong1term so"venc# of R.7. Inter"inings..
To e5amine the efficienc#8asset179T ratio of R.7. Inter"inings...
To e5amine the profitai"it# of R.7. Inter"inings...
,
To e5amine the mar%et va"ue position of R.7. Inter"inings..
To e5amine the a"anced score card! Ris% measurement of R.7.
Inter"inings..
To find out pro"em and recommendation in performance eva"uation of
R.7. Inter"inings..
.
1.3 Methodology of the study
In order to meet each o:ective! data was co""ected from oth primar# and secondar#
resources.
Primary Data
;rimar# data for the report was co""ected from main"# two sources:
< The correspondence fi"es.
< Interviews with the emp"o#ees
Secondary Data
The secondar# data sources were:
< =arious reports
< wesites
< 7onth"# usiness reviews
< 9uide"ines pu"ished # C>;?
1.4 Limitations of the study
@ac% of information due to the po"ic# of the compan# of %eeping a"" the
information confidentia"!
Inade3uate %now"edge on contemporar# terms of the compan#6s usiness
representatives.
Insufficient time due to the congested corporate schedu"e and e5am schedu"e!
@ac% of %now"edge aout the rea" "ife usiness!
+
Insufficient pu"ished information and re"uctance aout providing those # the
compan#.
Chapter: 2
;ractica" 4spects
A
ABOUT THE Company
R. M. Interlinings Ltd., with its sophistically designed plant at Chitagong
Export Procesing Zone, is happy to introduce itself as the frst o!en
and "on#o!en Interlining $anufacturer in %angladesh. ith
continuous de!elop$ent, R. M. Interlinings Ltd. has &eco$e the
leading $anufacturer of interlinings in %angladesh. 'ur products ha!e
already gained huge $ar(et share. )he genesis of the *(now#how+ is
&ac(ed &y ER%, )extile Manage$ent -$&. of -er$any and "angtong
.y$o, a /ino#0apan 1oint !enture co$pany, to produce world#class
interlining, certifed &y 'e(o#)ex /tandard 23. )o uphold this standard,
in spite of other $achines, R. M. Interlinings Ltd. has installed the
world4s &est &rand new Coating $achinery fro$ C,5I)EC, and other
&ac( process $achinery fro$ %R6C7"ER#-er$any 8 5,L9.
.E"RI7/E", with a &lend frst#rate raw $aterials and co$petence of
:ualifed professionalis$ co$pliance with I/' ;32<=3>. /ince the
inception of R. M. in 2;?, we ai$ to increase and sustain our corporate
!alue through growth and inno!ation. e proced in accordance with
the aproach of sustaina&le de!elop$ent. "ot only pro!iding our high
:uality products and pleasant ser!ice to our clients &ut also focusing
B
on inno!ation, en!iron$ental protection. e are $aintaining the a&o!e
reality and achie!ing the desired le!els of success in e!ery passing
year and gi!ing ceaseless e@orts to o@er a wide range of new products
with latest in!entions, de!eloped through poling of the s(ills of &oth
foreign and local specialists.
MISION
To ensure the 3uic%est de"iver# of high 3ua"it# inter"inings through smooth production
with an effective supp"# chain management and according"# meting the demands of
Cfashion techno"og#6 and ensuring the est of customer satisfaction.
VISION
To ecome a tota" specia"ist in inter"inings a" over the product range maintaining the
highest standards of production! %eeping an e#e to the e5isting and changing Cfashion
mar%ets6 and ensure the individua" customi$ed so"ution through product research!
deve"opment and innovations.
Slogan
DOUR 042EION 2E>@T>R
F
ACREDITATION
;roduct 2tandard Oe%o1Te5 2tandard 1* since 2**1.
7anagement 2tandard
I2O -*1:2*F 2ince 2**2
0actor# @ocation:
;"ot /A! 2ector ,! Chitagong >5port ;rocesing ?one! Chitagong! )ang"adesh.
Maor Mile!tone o" t#e Company$
1--A1111 11111Incorporated
1--B1111 11111Insta"ation of ;owder Coating @ine
1--F1111 11111)egining of Commercia" ;roduction
1---11111 1111Insta"ation of 2tentering @ine
2***111111 111Insta"ation of ;aste Coating @ine
2**1111111 1112tandardi$ation of product acording to Oe%o1Te5 2tandard 1* 'C"as/.
2**211111 11114doption of 7anagement proces to I2O -*1:2**
2**/1111111 11Integration of 7anagement proces with I2O -*1:2**
-
2**, 1111111114utomation of 7anagement proces introduced
2**+111111111 2tandardi$ation of product acording to Oe%o1Te5 2tandard 1* 'C"as2.
2**A 111111111Up gradation of integrated management proces with I2O -*1:2**
2**- 111111111Up gradation of integrated management proces with I2O -*1:2*F
BOARD O% DIRECTORS
7rs. Ro%e#a 4%hter
Chairperson
>1mai": rmint"Grmid.com
7d. 7o$haru" Eo3 7ansor
7anaging Director
>1mai": mdGrmi"d.com
Di&i!ion! O" t#e Company$
HUMAN RESOURCE MANA'EMENT
R. 7. Inter"inings @td is supported # a group of e5perienced professiona"s and sector1
wise s%i""ed wor%ers. The tota" numers of active wor%force in R7I@ are 2B2 where its
Dha%a office has /2 emp"o#ees and its factor# has 2,* emp"o#ees. R7I@ runs three shifts
per da# and the "ength of each shift is eight hours. R7I@ provides a comp"etive sa"ar#
with two festiva" onuses! two incentive onuses! rea%fast! Tiffin! "unch! evening snac%s
1*
and diner to its emp"o#ees. R7I@ a"so provides "eave encashment and provident fund
a"ong with app"ica"e gratuities.
Prod(ct! o" t#e Company
PRODUCT LINE
Hoven inter"inings10usi"e ( Non10usi"e
Non woven inter"inings10usi"e ( Non10usi"e
Init Inter"inings
Eair Inter"inings
USING AREA
2uites ( )"a$ers
2hirts
;ants
@adies Hear
)aies Hear
Caps
Eats
2hoes
)ags
Jac%ets
2ports Hear
PRODUCTION TECHNO)O'*
Mac#inery
0inishing ;rocess machines from )RUCIN>R! 9erman#. Coating machines from
C4=IT>C! 2wit$er"and and HOUKI EU4@I! China .D#eing 7achine from =4@D
E>NRII2>N! Denmar% and other Chinese )rands.
+no,-#o,
>R)4 Te5ti"e 7anagement 9mE! 9erman#. N4NTON9 ED7O! a 2ino1Japan Joint
=enture Compan#.
RA. MATERIA)S
%a/ric!
11
China! Taiwan! ;a%istan! ?imawe and )ang"adesh
C#emical!
)4201 9erman#! EUNT274N1 2wit$er"and! T4N4T>K1 India! C(T1China.
Coating ;owder
4ifor19erman#! 2CE4>TI1 2wit$er"and! ;o"ene1 Thai"and! Dueda1China
PRODUCTION CAPACIT*
Hoven Capacit#
1. Hoven 0usi"e Inter"inings: /+** Dards8Da#
2. Hoven Non10usi"e Inter"inings: ,** Dards8Da#
Non-.o&en Capacity
1. 0usi"e Inter"inings ';aste Dot 2eries.: ,** Dards8Da#
2. 0usi"e Inter"inings 'Dou"e Dot 2eries.: B** Dards8Da#
/. 0usi"e Inter"inings '2cater 2eries.: /** Dards8Da#
,. Non10usi"e Inter"inings: +** Dards8Da#
COMPETENC*
Research ( Deve"opment
0u""# e3uipped "aorator# conducts tests according to >uropean ( Internationa" norms.
Our R(D team and engineers are cha""enged # the fast pace of techno"ogica" changes
and advances in areas of composite materia"s engineering! Chemistr#! ;roduction
techno"ogies and mu"titude of macro engineering tas%s! to enhance our product "ine ( to
deve"op user friend"# materia"s.
Tec#nical Ser&ice
<@a testing facu"ties for 0using! Hashing! Dr#1C"eaning! >n$#me
Hashing etc. <Inter"ining 2uggestions. <2toc% avai"ai"ities ( 3uic% production.
<Customi$ed product 2upport
Deli&ery ,it#in Banglade!#
12
Hithin B da#s after receipt of Irrevoca"e @etter of Credit or 0oreign Currenc# Che3ue
a"ong with re"ated import documents.
De"iver# outside )ang"adesh
Hithin /* da#s after receipt of Irrevoca"e @etter of Credit 'at sight. or advance T 1
Te"egraphic Transfer pa#ment.
0UA)IT* CONTRO)
PRODUCT 0UA)IT*$
R.7. Inter"inings are su:ected to the most rigorous process of 3ua"it# contro" and are
ased on continuous production "ine testing and product 3ua"it# procedures which inc"ude
adhesion! e"ongation and #ie"d strength tests as we"" as adverse treatment and shrin%age
tests. >ach individua" product "ine goes through a series of high end 3ua"it# contro"
chec%s and are precise to the ver# "ast detai".
%INANCIA) STREN'TH
4 review of the compan#Ls po"icies in re"ation to financia" strength "i%e1 the ai"it# to
generate cash! service det! financia" average targets! generate sufficient return to ena"e
continuous aces to fund mar%et! interna" "i3uidit#! operating efficienc#! operating
profitai"it#! and "everage position of the compan# etc. has een done # CR4)
'Credit Rating 4genc# of )ang"adesh @td. and achieved a consistent score 44/
which denotes strong capacit# to met financia" commitments! :udged to e of
high 3ua"it#! su:ect o "ow credit ris%.
.OR+ ENVIRONMENT
TEAM .OR+
Ten Departments inc"uding: 2#stems& )usiness Deve"opment& >ngineering& 2upp"#
Chain& Euman Resource& Research and Deve"opment& ;roduction& 0inance& ;roduct
Mua"it#& 2tation Operation wor% as a team to produce 3ua"it# output.
SA%ET* MEASURES
1/
He"" e3uipped 0ire fighting instruments! Trained Rescue Team! Hide 2tairs. 4rrangement
of ire dri"" for ma%ing the emp"o#ees aware.
%AST AID
To give initia" treatment to the wound8sic% emp"o#ees fast aid e3uipments are reserved.
Chapter: /
Theoretica" 4spects:
1,
;erformance eva"uation techni3ues and procedures
Prelude: 1 genera""# there are some techni3ues! which are used in eva"uating
financia" performance of a firm. )asica""# this stud# is going to tr# the eva"uation
of the financia" performance of >)@ through ratio. 2o in this chapter! we wi""
discuss the various financia" ratio! those are used in eva"uating the performance.
These financia" ratios are traditiona""# grouped into fo""owing categories N
1. 2hort term so"venc# ratio
2. @ong term so"venc# ratio
/. >fficienc# management ratio
,. ;rofitai"it# ratio
+. 7ar%et va"ue ratio
Now! ever# categor# is discussed rief"#:1

3.1 short term solvency ratios: 1 short term so"venc# ratios as a group are
intended to provide information aout a firm6s "i3uidit#. The primar# concern is
the firm6s ai"it# to pa# its i""s over the short run without undue stress.
Conse3uent"# these ratios focus on current asset and "iai"ities. 0or ovious
reasons! "i3uidit# ratios are particu"ar"# interesting to short term creditors.
4. current ratio: 1 one of the est %nown and most wide"# used ratios is the current
ratio. The ratio is defined as
Current ratio O current asset8current "iai"it#

1+
). 3uic% or acid test ratio: 1 inventor# is often the "east "i3uid current asset. It6s
a"so the one for which the oo% va"ues are "east re"ia"e as measures of mar%et
va"ue. )ecause the 3ua"it# of the inventor# isn6t considered. 2ome of the inventor#
ma# "ater turn out to e damaged.

Muic% ratio: Ocurrent asset Ninventor#8current "iai"it#

C. cash ratio: 1 a ver# short term creditor might e interested in the cash ratio. The
formu"a is
Cash ratioO cash 8current "iai"it#
D. net wor%ing capita" to tota" asset ratio: 1 net wor%ing capita" is fre3uent"#
viewed as the amount of short term "i3uidit# a firm has.
Net wor%ing capita" to tota" asset ratio Onet wor%ing capita" 8tota" asset
>. interva" measure ratioO current asset 8average dai"# operating cost
4verage dai"# operating cost is measured # tota" cost e5c"uding depreciation and
interest! divided # /A+da#s.
3.2 long term solvency: 1 "ong term so"venc# ratios are intended to address the
firm6s "ong run ai"it# to meet its o"igation. He consider three common"# used
measure and some variations.
4. tota" det ratio: 1 tota" det ratio ta%es into account a"" dets of a"" maturities to
a"" creditors. The formu"a is:1
Tota" det ratio O tota" asset Ntota" e3uit# 8tota" asset
Det1e3uit# ratio O tota" det8tota" e3uit#
). "ong term det ratio: 1 fre3uent"#! financia" ana"#sis are more concerned with
the firm6s "ong term det than its short term det. )ecause the short term wi""
constant"# e changing. 0or these reasons the "ong term det ratio is often
ca"cu"ated as:1
@ong term det ratio O "ong term det 8"ong term detPtota" e3uit#
1A
C. time interest earned:1another common measure of "ong term so"venc# is the
time interest earned ratio. The formu"a is:1
Time interest earned O >)IT 8interest
D. cash coverage ratio: 1 a pro"em with 'tie. ratio is that it is ased on '>)IT..
This is not rea""# a measure of cash avai"a"e to pa# interest. The reason is that
deprecation! a non cash e5pense has een deducted out. )ecause interest is most
definite"# a cash outf"ow. One wa# to define the cash coverage ratio is
Cash coverage ratio O >)ITPdepreciation 8interest
3.3 Asset management measures: 1 these are intended to descrie is how
efficient"# a firm uses its assets to generate sa"es.
a. Inventor# turnover O cost of goods so"d 8inventor#
). receiva"e turnover: 1 our inventor# measures give some indication of how fast
we can se"" product. He now "oo% at how fast we co""ect on those sa"es. The
formu"a is:1
Receiva"e turnover O sa"es 8account receiva"e
c. 4sset turnover ratio: 1 there are two formu"as for fi5ed asset and tota" asset.
Tota" asset turnover O sa"es 8tota" assets
D. operating efficienc# ratio: 1 the efficienc# ratio gives us a measure of how
effective"# a an% is operating. It is the cost re3uired to generate each do""ar of
revenue. 4n increase means the compan# is "osing a "arge percentage of its income
to e5pense. If it is getting "ower. It is good for the an% and its shareho"der6s. The
e3uation is
Operating efficienc# ratio O operating e5pense 8 tota" revenue
>. emp"o#ee productivit# ratio: 1 the ratio measures the "eve" of income that each
emp"o#ee generates. It he"ps to determine the efficienc# of a an% in terms of
emp"o#ees. The e3uation is
>mp"o#ee productivit# ratio O operating profit 8no of emp"o#ee
1B
3.4 Profitability ratio:
4. return on e3uit#: 1 RO> measures an%s profitai"it# # revea"ing how much
profit a an% generates with the shareho"ders investment. The formu"a is
RO> O net income 8tota" e3uit#
It measures the return on the mone# the investors have put into the compan#. This
is the ratio potentia" investors ma# "oo% at when deciding whether or not to invest
in the compan#.
). return on asset: 1 RO4 measures the efficienc# with which the compan# is
managing its investment in asset and uti"i$ing them to generate profit. The higher
the percentage is etter! ecause that means the compan# is doing a good :o using
its assets to generate sa"es .the formu"a is
RO4O net income 8tota" asset
C.Net interest margin: 1 is a measurement of the difference etween the interest
incomes generated # an%s and the amount of interest paid out to their "enders .it
e5amines how successfu""# a firm6s investment decision is compared to its det
situations. 4 negative va"ue denotes that the firm did not ma%e an optima"
decision. )ecause interest e5penses were greater than the amount of returns
generated # investment. The e3uation is
NI7O interest income from "oan Ninterest e5pense on deposit 8tota" asset
d. Net non interest margin: 1 it is e5pressed as a percentage of how much non
interest revenue the an% are earning minus the non interest e5pense
NNI7O non interest revenue Nnon interest e5penses8tota" asset
e. Net operating margin: 1 a measure of how profitai"it# the an% is operating.
The ratio te""s how we"" a compan# converts revenue from core operation into
actua" profit.
NO7O tota" operating revenue Ntota" operating e5penses 8tota" asset
0. earning per share: 1 the portion of a compan#6s profit a""ocated to each
outstanding share of common stoc%. >;2 serve as an indicator of compan#
1F
profitai"it#. It te""s an investor how much of the compan#6s profit e"ongs to each
share of stoc%.
>;2O net income after ta5es 8no of share outstanding
a. Net profit margin: 1 it te""s investors the percentage of mone# a
compan# actua""# earns per do""ar of sa"es. The higher the net profit margin is
the more effective the compan# is at converting revenue into actua" profit.
N;7O net income 8sa"es
. Ta5 management ratio: 1 it ref"ects the use of securit# gains or "oss to
minimi$e ta5 e5posure. It indicates what portion of operating income
generates net income after ta5.
c. . >5pense contro" efficienc#: 1 it indicates the portion of revenue after
the operating e5pense is deducted .its a measure of operating efficienc# and
e5pense contro".
d. 4sset uti"i$ation ratio: 1 it measures the rate at which a usiness is a"e
to turn assets into sa"es. 4nd hence cash. The higher the ratio the more
effective"# assets are used to generate revenue.
'4U.O tota" operating revenue 8tota" assets
e. >3uit# mu"tip"ier: 1 the ratio shows a an% tota" asset per do""ar of
stoc%ho"ders e3uit#. 4 higher e3uit# mu"tip"ier indicates higher financia"
"everage .which means the an% is re"#ing more on det to finance its assets.
>7O tota" asset8tota" e3uit# capita"

3.! Mar"et value ratio:
4. price earning ratio: 1 it is a measure of the price paid for a share re"ative to the
4nnua" profit earned # the firm per share. It gives us an indication of the
confidence that investors have in the future prosperit# of the usiness.
1-
;8>O price per share8earning per share
). mar%et Noo% ratio: 1 it measures how much a an% is worth at present in
comparison with the amount of capita" invested # current and past stoc%ho"ders
into it. If the a"ance sheet assets per share are much "arger than the share
price! this is ta%en to e a u# signa".
7ar%et Noo% ratio O mar%et va"ue per share8oo% va"ue per share
4"" of these are the ratios! which is used in eva"uating the performance.
2*
2o"venc# Ratios:
1. Net Hor%ing Capita" O Current 4ssetsNCurrent @iai"ities
O ,AF,//22,/1/*2/B*-A,1
O 1AA*A22A*2
Comments: Net Hor%ing Capita" is used to measure the firm6s overa""
"i3uidit#. 2o! the overa"" "i3uidit# of the an% is T%. 1AA*A22A*2.
2. Current Ratio Current Ratio O O
s @iai"itie Current
4ssets urrent C
O O
/*2/B*-A,1
,AF,//22,/
O 1.++:1 O 1.++:1
Comments Comments: : He %now the higher the current ratio! the greater the
7argin *f 2afet#. 4"though there is no hard and fast ru"e! conventiona""#! a
current ratio of 2:1 is considered satisfactor#. )ut! the current ratio of the
an% is 1.++:1& therefore! it ma# e interpreted to e insufficient"# "i3uid.
3. Quick ratio =
s @iai"itie Current
Inventor# 1 4ssets urrent C
O
/*2/B*-A,1
* 1 ,AF,//22,/
O 1.++:1
Comments: Eere the minimum re"ationship etween "i3uid assets and
current "iai"ities shou"d idea""# e 1:1. Otherwise! the compan# might fai"
21
to meet its current o"igations. Eere the 3uic% ratio is 1.++:1 and it is
recommended. The 3uic% ratio provides a etter measure of overa"" "i3uidit#
on"# when the firm6s inventor# cannot e easi"# converted into cash. Eere!
inventor# is "i3uid. 2o! the current ratio is a preferred measure of overa""
"i3uidit# of this an%.
>fficienc# Ratios:
1. 0i5ed 4ssets Turnover O
4ssets 0i5ed Net
2a"es
O
+F-+1A+A
2-BF+2F2-
O +.*+ Times
Comments: The fi5ed asset turnover measures the efficienc# with
which the an% has een using its fi5ed assets to generate sa"es. Eere! the
an% has used its fi5ed assets +.*+ times in a #ear to generate sa"es.
2. Tota" 4ssets Turnover O
4ssets Tota"
2a"es
O
,B,/2F/F--
2-BF+2F2-
O *.*A Times
Comments: 9enera""#! the higher a firm6s tota" asset turnover! the
more efficient"# its assets have een used. This means the an% turns over its
assets *.*A times a #ear. Eere the an% cou"d not use its assets efficient"#
ecause it cou"d not touch the standard norm '+ to A times..
/. Detors Co""ection ;eriod O
/A+
2a"es Credit Tota"
Detors

O
/A+
/A*F-*A+F
2F-/BF22+A

O 2-2B Da#s
22
Comments: The average co""ection period is meaningfu" on"# in
re"ation to the firm6s credit terms. Eere! "oans and advances co""ection period
of the an% is 2-2B da#s on the asis of their income.
,. Creditor ;a#ment ;eriod O
/A+
;urchase Credit Tota"
Creditors

O
/A+
+1-F1,F1
1 /*2/1B*-A,

O 2122B- Da#s
Comments: The average pa#ment period is meaningfu" on"# in
re"ation to the average credit terms e5tended to the firm. Eere! creditors
pa#ment period of the an% is 2122B- da#s on the asis of their purchases.
;rofitai"it# Ratios:
1. 9ross ;rofit 7argin O
1**
2a"es
;rofits 9ross

O
1**
2-BF+2F2-
2,+FB1/,F

O F2.++ Q
Comments: 4 high gross profit margin ratio is a sign of good
management. >ver# firm shou"d tr# to increase its gross profit as much as
possi"e. He can see that the an% has a higher gross profit margin. It is a
ver# good sign of usiness.
2. Operating ;rofit 7argin O
1**
2a"es
;rofits Operating

O
1**
2-BF+2F2-
2,+FB1/,F

O F2.++ Q
2/
Comments: Operating profits are R;ureS ecause the# measure on"#
the profits earned on operations and ignore interest and ta5es. 4 high
operating profit is preferred. The operating profit of this an% is etter. 2o! it
is recommended.
/. Net ;rofit 7argin O
1**
2a"es
Ta5es 4fter ;rofits Net

O
1**
2-BF+2F2-
11F,B2**2

O /-.BF Q
Comments: The net profit margin is a common"# cited measure of the
firm6s success with respect to earnings on sa"es. Net profit enchmar% is
1*Q1 1+Q re3uired. /-.BF Q return on sa"es is considered as a satisfactor#
"eve".
,. Return on Tota" 4ssets O
1**
4ssets Tota"
Ta5es 4fter ;rofits Net

O
1**
,B,/2F/F--
11F,B2**2

O2.+* Q
Comments: RO4 measures the overa"" effectiveness of management
in generating profits with its avai"a"e assets. The higher the percentage! the
higher the effectiveness of the firm. )ut! here 2.+*Q is re"ative"# satisfactor#
"eve".
+. Return on >3uit# O
1**
>3uit# rsL 2toc%ho"de
Ta5es 4fter ;rofits Net

O
1**
1/,*-+F,1F
11F,B2**/

O F.F/ Q
Comments: Eere RO> is F.F/Q. 9enera""#! the higher this returns! the
etter off are the owners.
2,
A. >;2 O
g Outstandin 2toc% Common of 2hares of Numer
r 2toc%ho"de Common 0or avai"a"e >arnings
O *
Comments: There is no earning per share ecause it is un"isted foreign
an% in )ang"adesh.
Other Ratios:
1. Det Ratios O
4ssets Tota"
s @iai"itie Tota"
O
,B,/2F/F--
/,*2/2+,F1
O *.B2:1
Comments: The higher this ratio! the greater the amount of other
peop"e6s mone# eing used to generate profits. The va"ue indicates that the
an% has financed B2 Q of its assets with det and the va"ue a"so indicates
that the an% has the degree of indetedness and financia" "everage.
2. Det1To1>3uit# Ratio O
>3uit# s rL 2toc%ho"de
Det Term @ong
O
1/,*-+F,1F
2-1,1-1F,
O *.22:1
Comments: The an% is not in a good position from the view of det
to e3uit# ratio. Eere the "enders6 investment is 22 Q of the owners6
investment. 2o! ma:orit# financing is eing done # the shareho"ders6 fund.
/. Times Interest >arned Ratio O
Interest
Ta5es 4nd Interest )efore >arnings
O
A+A-+A+
2,+FB1/,F
O /B.,/:1
2+
Comments: The higher its va"ue! the etter a"e the firm is to fu"fi"" its
interest o"igations. Eere the times interest earned ratio for this an% seems
accepta"e ecause a va"ue of at "east /.* and prefera"# c"oser to +.* is often
2uggested. Thus it has a good margin of safet#.
,. 0i5ed1;a#ment coverage Ratio O
T.TU 1 V181 Dividend. 2toc% ;referred " W';rincipa ;a#ments @ease Interest
;a#ments @ease >)IT
+ + +
+
O
A+A-+A+
2,+FB1/,F
O /B.,/:1
Comments: The fi5ed pa#ment coverage ratio measures ris%. The
"ower the ratio! the greater the ris% to oth "enders and owners& the greater
the ratio! the "ower the ris%. 4 va"ue of 2.* or more is often suggested. Eere
the fi5ed pa#ment coverage is ver# high. 2o it can "ower the ris% to oth
"enders and owners.
+. @ong Term Det To Net Horth O
Net Horth
Det Term @ong
O
1/,*-+F,1F
2-1,1-1F,
O *.22:1
Comments: The an% is not in a good position from the view of
"ong1term det to net worth ratio. Eere the "enders6 investment is 22 Q of the
owners6 investment. 2o! ma:orit# financing is eing done # the
shareho"ders6 fund.
2A
;roprietar# Ratio O
4ssets Tota"
0und s ;roprietor
O
,B,/2F/F--
1/,*-+F,1F
O *.2F:1
Comments: Eere the proprietar# ratio is *.2F:1 that means ever# asset
of T%. 1 the proprietor fund is *.2F. The proprietar# ratio is not accepta"e
ecause it cou"d not touch the standard norm
'/:+.. )ut there is no hard and fast ru"e conventiona""#.
;roprietor 0und To Tota" @iai"ities O
s @iai"itie Tota"
0und s ;roprietor
O
/,*2/2+,F1
1/,*-+F,1F
O *./-:1
Comments: Eere the proprietor fund to tota" "iai"ities is *./-:1 that
means ever# "iai"it# of T%. 1 the proprietor fund is *./-. This ratio is not
accepta"e ecause it cou"d not touch the standard norm
'/:1.. )ut there is no hard and fast ru"e conventiona""#.
2B
R4TIO 4N4@D2I2 0OR TE> D>4R 2*12
2o"venc# Ratios:
1. Net Hor%ing Capita" O Current 4ssetsNCurrent @iai"ities
O A-FBA+*2+B1+2/AB1A-*-
O 1B+*-///,F
Comments: Net Hor%ing Capita" is used to measure the firm6s overa""
"i3uidit#. 2o! the overa"" "i3uidit# of the an% is T%. 1B+*-///,F.
2. Current Ratio Current Ratio O O
s @iai"itie Current
4ssets urrent C
O O
+2/AB1A-*-
A-FBA+*2+B
O 1.//:1 O 1.//:1
Comments Comments: : He %now the higher the current ratio! the greater the
7argin *f 2afet#. 4"though there is no hard and fast ru"e! conventiona""#! a
current ratio of 2:1 is considered satisfactor#. )ut! the current ratio of the
an% is 1.//:1& therefore! it ma# e interpreted to e insufficient"# "i3uid.
3. Quick ratio =
s @iai"itie Current
Inventor# 1 4ssets urrent C
O
+2/AB1A-*-
* 1 A-FBA+*2+B
O 1.//:1
Comments: Eere the minimum re"ationship etween "i3uid assets and
current "iai"ities shou"d idea""# e 1:1. Otherwise! the compan# might fai"
to meet its current o"igations. Eere the 3uic% ratio is 1.//:1 and it is
2F
recommended. The 3uic% ratio provides a etter measure of overa"" "i3uidit#
on"# when the firm6s inventor# cannot e easi"# converted into cash. Eere!
inventor# is "i3uid. 2o! the current ratio is a preferred measure of overa""
"i3uidit# of this an%.
>fficienc# Ratios:
1. 0i5ed 4ssets Turnover O
4ssets 0i5ed Net
2a"es
O
1*/BFBA-/
,*AA,2-A-
O /.-2 Times
Comments: The fi5ed asset turnover measures the efficienc# with
which the an% has een using its fi5ed assets to generate sa"es. Eere! the
an% has used its fi5ed assets /.-2 times in a #ear to generate sa"es.
2. Tota" 4ssets Turnover O
4ssets Tota"
2a"es
O
B*-1,/B-+*
,*AA,2-A-
O *.*A Times
Comments: 9enera""#! the higher a firm6s tota" asset turnover! the
more efficient"# its assets have een used. This means the an% turns over its
assets *.*A times a #ear. Eere the an% cou"d not use its assets efficient"#
ecause it cou"d not touch the standard norm '+ to A times..
/. Detors Co""ection ;eriod O
/A+
2a"es Credit Tota"
Detors

O
/A+
+-B/+,/A2
,*2ABAAA*1

O 2,A1 Da#s
2-
Comments: The average co""ection period is meaningfu" on"# in
re"ation to the firm6s credit terms. Eere! "oans and advances co""ection period
of the an% is 2,A1 da#s on the asis of their income.
,. Creditor ;a#ment ;eriod O
/A+
;urchase Credit Tota"
Creditors

O
/A+
1*A*A+2F1
+2/AB1A-*-

O 1F*21 Da#s
Comments: The average pa#ment period is meaningfu" on"# in
re"ation to the average credit terms e5tended to the firm. Eere! creditors
pa#ment period of the an% is 1F*21 da#s on the asis of their purchases.
;rofitai"it# Ratios:
1. 9ross ;rofit 7argin O
1**
2a"es
;rofits 9ross

O
1**
,*AA,2-A-
/**+BBAFF

O B/.-2 Q
Comments: 4 high gross profit margin ratio is a sign of good
management. >ver# firm shou"d tr# to increase its gross profit as much as
possi"e. He can see that the an% has a higher gross profit margin. It is a
ver# good sign of usiness.
2. Operating ;rofit 7argin O
1**
2a"es
;rofits Operating

O
1**
,*AA,2-A-
/**+BBAFF

O B/.-2 Q
Comments: Operating profits are R;ureS ecause the# measure on"#
the profits earned on operations and ignore interest and ta5es. 4 high
/*
operating profit is preferred. The operating profit of this an% is etter. 2o! it
is recommended.
/. Net ;rofit 7argin O
1**
2a"es
Ta5es 4fter ;rofits Net

O
1**
,*AA,2-A-
1,BF+A2,A

O /A./A Q
Comments: The net profit margin is a common"# cited measure of the firm6s
success with respect to earnings on sa"es. Net profit enchmar% is 1*Q1 1+Q
re3uired. /A./A Q return on sa"es is considered as a satisfactor# "eve".
,. Return on Tota" 4ssets O
1**
4ssets Tota"
Ta5es 4fter ;rofits Net

O
1**
B*-1,/B-+*
1,BF+A2,A

O2.*F Q
Comments: RO4 measures the overa"" effectiveness of management
in generating profits with its avai"a"e assets. The higher the percentage! the
higher the effectiveness of the firm. )ut! here 2.*FQ is re"ative"# satisfactor#
"eve".
+. Return on >3uit# O
1**
>3uit# rsL 2toc%ho"de
Ta5es 4fter ;rofits Net

O
1**
1+*+,-11,+
1,BF+A2,A

O -.F2 Q
Comments: Eere RO> is -.F2Q. 9enera""#! the higher these returns!
the etter off are the owners.
A. >;2 O
g Outstandin 2toc% Common of 2hares of Numer
r 2toc%ho"de Common 0or avai"a"e >arnings
/1
O *
Comments: There is no earning per share ecause it is un"isted foreign
an% in )ang"adesh.
Other Ratios:
1. Det Ratios O
4ssets Tota"
s @iai"itie Tota"
O
B*-1,/B-+*
++F+-,AF*+
O *.B-:1
Comments: The higher this ratio! the greater the amount of other
peop"e6s mone# eing used to generate profits. The va"ue indicates that the
an% has financed B- Q of its assets with det and the va"ue a"so indicates
that the an% has the degree of indetedness and financia" "everage.
2. Det1To1>3uit# Ratio O
>3uit# s rL 2toc%ho"de
Det Term @ong
O
1+*+,-11,+
/,-22-F-A
O *.2/:1
Comments: The an% is not in a good position from the view of det
to e3uit# ratio. Eere the "enders6 investment is 2/ Q of the owners6
investment. 2o! ma:orit# financing is eing done # the shareho"ders6 fund.
/. Times Interest >arned Ratio O
Interest
Ta5es 4nd Interest )efore >arnings
O
1A2F1F2,
/**+BBAFF
O 1F.,A:1
/2
Comments: The higher its va"ue! the etter a"e the firm is to fu"fi"" its
interest o"igations. Eere the times interest earned ratio for this an% seems
accepta"e ecause a va"ue of at "east /.* and prefera"# c"oser to +.* is often
2uggested. Thus it has a good margin of safet#.
,. 0i5ed1;a#ment coverage Ratio O
T.TU 1 V181 Dividend. 2toc% ;referred " W';rincipa ;a#ments @ease Interest
;a#ments @ease >)IT
+ + +
+
O
1A2F1F2,
/**+BBAFF
O 1F.,A:1
Comments: The fi5ed pa#ment coverage ratio measures ris%. The
"ower the ratio! the greater the ris% to oth "enders and owners& the greater
the ratio! the "ower the ris%. 4 va"ue of 2.* or more is often suggested. Eere
the fi5ed pa#ment coverage is ver# high. 2o it can "ower the ris% to oth
"enders and owners.
+. @ong Term Det To Net Horth O
Net Horth
Det Term @ong
O
1+*+,-11,+
/,-22-F-A
O *.2/:1
Comments: The an% is not in a good position from the view of
"ong1term det to net worth ratio. Eere the "enders6 investment is 2/ Q of the
owners6 investment. 2o! ma:orit# financing is eing done # the
shareho"ders6 fund.
//
;roprietar# Ratio O
4ssets Tota"
0und s ;roprietor
O
B*-1,/B-+*
1+*+,-11,+
O *.21:1
Comments: Eere the proprietar# ratio is *.21:1 that means ever# asset
of T%. 1 the proprietor fund is *.21. )ut there is no hard and fast ru"e
conventiona""#. The proprietar# ratio is not accepta"e ecause it cou"d not
touch the standard norm '/:+..
;roprietor 0und To Tota" @iai"ities O
s @iai"itie Tota"
0und s ;roprietor
O
++F+-,AF*+
1+*+,-11,+
O *.2B:1
Comments: Eere the proprietor fund to tota" "iai"ities is *.2B:1 that
means ever# "iai"it# of T%. 1 the proprietor fund is *.2B. )ut there is no
hard and fast ru"e conventiona""#. This ratio is not accepta"e ecause it
cou"d not touch the standard norm '/:1..
/,
!.1 #ecommendation
To so"ve the aove pro"ems authorit# a"read# has ta%en some initiative which wi"" he"p
them to mitigate there pro"ems. 7# recommendation regarding aove pro"ems are:
;rovide a wor%shop to R7 for CIR and CI) report.
Credit visit wi"" on"# do when fu"" app"ication wi"" come to the department.
C"ient visit wi"" e done # 7anager.
!.2 $onclusion
The importance of sustaining and improving performance is increasing da# # da#
particu"ar"# in an environment which is characteri$ed # rapid"# f"ourishing techno"og#
and its growing app"ication to an%ing and non an%ing financia" institution tremendous
competition! product deve"opment! shift in mar%eting strateg#! deregu"ation (
g"oa"i$ation on the one hand! and esca"ation in the numer of an% fai"ures accompanied
/+
# mergers and mega mergers on the contrar#. In order to %eep areast with the prevai"ing
mar%et scenario it is necessar# to deve"op a comprehensive performance eva"uation
s#stem.
;erformance >va"uation 2#stem means a mechanism for improving the "i%e"ihood of the
organi$ation successfu""# imp"ementing its strateg#. It is a process to have the goa" of
strateg# imp"ementation. In this process senior management se"ects a series of measures
that est represent the organi$ation6s strateg#.
The current report aimed at critica""# e5amining the ;erformance of a private financia"
institution. The main o:ective of this report was to eva"uate the financia" ana"#sis of the
compan#. a"ong with how efficient"# are providing services to its customer. 0rom
0inancia" 4na"#sis it has een seen that the performance of the compan# finance "td is
rea""# satisfactor#.
/A