Ratio Analysis

United Airways is the only airline company in Bangladesh who has stock in Dhaka
Stock Market. For this purpose in the ratio analysis and the interpretation section,
we only compare the ratio or analysis the ratio between the two financial years.

1. Current Ratio = Current Asset Current Liability

2011 2012 year
Current Ratio = 1547258932 835384218 = 1.85
2012 2013 year
Current Ratio = 2468663508 1620528139 = 1.52
Analysis: This Company we have seen that in the year 2011 12 the current ratio was 1.85 but
in the year 2012 13 the current ratio is 1.52. So it is clearly stated that present current ratio is
weaker then previous year.
2
1.5
1

2011-12

0.5

2012-13

0
Current Ratio

2. Quick Ratio = ( Current Assets - Inv) Current Liabilities

2011 2012 Year
Quick Ratio = (1547258932 368630961) 835384218 = 1.41
2012 2013 Year
Quick Ratio = (2468663508 394961501) 1620528139 = 1.27
Analysis: United airways quick ratio was in the year 2011-12 around 1.41 but in the year 201213 is 1.27 so it is now weaker position of this company.

1.55
1.5
2011-12

1.45

2012-13

1.4
1.35
Quick Ratio

3. Total Asset Turnover = Net Sales Total Assets

2011 2012 Year
Total Asset Turnover = 4780897083 9003944630 = 0.53
2012 2013 Year
Total Asset Turnover = 7045160933 9941382146 = 0.708
Analysis: As we know total asset turnover indicates the overall effectiveness of the firm in
utilizing its assets to generate sales. United Airways has a good total asset turnover because in
the year 2011-12 ratio was 0.53 and the year 2012-13 the ratio is 0.708
0.8
0.6
0.4

2011-12

0.2

2012-13

0
TOTAL ASSET
TURNOVER

4. Inventory Turnover = Cost of Goods Sold Inventory

2011 2012 Year
Inventory Turnover = (4780897083 1425227092) 368630961 = 9.10
2012 2013 Year
Inventory Turnover = (7045160933 209085171) 394961501 = 17.308
Analysis: United airways inventory turnover goes up in the year 2012 13.

20
15
10

2011-12

2012-13

0
INVENTORY
TURNOVER

5. Average Collection Period = Days in the Year Receivable Turnover

2011 2012 Year
Average Collection Period = 365 (4780897083 321614442) = 24.55
2012 2013 Year
Average Collection Period = 365 (7045160933 770224234) = 39.90
Analysis: In the year 2011 2012 ratio was 24.55 which was good for the company but in the
year 2012-13 it comes up around 39.90 which is bad for the company.

50
40
30
2011-12

20

2012-13

10
0
Average
Collection Period

6. Debt to Equity = Total Debt Shareholders Equity

2011 2012 Year
Debt to Equity = 124390892 6196968784 = 0.02
2012 2013 Year
Debt to Equity = 155431544 6527613934 =0.023
Analysis: 2011-12 year debt to equity was 0.02 but in the year 2012-13 is 0.023 which is bad
for the company.
0.25
0.2
0.15

2011-12

0.1

2012-13

0.05
0
Debt To Equity

7. Debt To Asset = Total Debt Total Asset

2011 2012 Year
Debt To Asset = 124390892 9003944630 = 0.0138
2012 2013 Year
Debt To Asset = 155431544 9941382146 = 0.0156
Analysis: The Debt to asset 2012-13 is 0.015 which is more then 2011-12 year so it is bad for
the company.
0.016
0.0155
0.015
0.0145
0.014
0.0135
0.013
0.0125

2011-12
2012-13

Debt to Asset

8. Interest Coverage = EBIT Interest Charges

2011 2012 Year
Interest Coverage = 815781538 160313646 = 5.0886
2012 2013 Year
Interest Coverage = 1154066793 598427358 = 1.928
Analysis: United Airways has bellow interest coverage then the previous year it is bad for the
company.
6
5
4
3
2
1
0

2011-12
2012-13

Interest Coverage

9. Gross Profit Margin = Gross Profit Net Sales

2011 2012 Year
Gross Profit Margin = 1425227092 4780797083 = 0.298%
2012 2013 Year
Gross Profit Margin = 2090085171 7045160933 = 0.296%
Analysis: United Airways has a weak gross profit margin.
0.30%
0.30%
0.30%
0.30%
0.30%
0.30%
0.30%
0.30%

2011-12
2012-13
GROSS PROFIT
MARGIN

10.Net Profit Margin = Net Profit after Taxes Net Sales

2011 2012 Year
Net Profit Margin = 655467892 4780797083 = 0.137
2012 2013 Year
Net Profit Margin = 555639435 7045160933 = 0.0788
Analysis: United Airways has poor net profit margin
0.15
0.1
2011-12
2012-13

0.05
0
Net Profit Margin

11.Return on Investment = Net Profit after Taxes Total Assets

2011 2012 Year
Return on Investment = 655467892 9003944630 = 0.0727
2012 2013 Year
Return on Investment = 555639435 9941382146 = 0.055
Analysis: It has poor rate of return on investment.
0.08
0.06
0.04

2011-12

0.02

2012-13

0
Return On
Investment

12.Return on Equity = Net Profit after Taxes Shareholders Equity

2011 2012 Year
Return on Equity = 655467892 6196968784 = 0.105
2012 2013 Year
Return on Equity = 555639435 6527613934 = 0.0851
Analysis: It poor rate of return also.
0.12
0.1
0.08
0.06

2011-12

0.04

2012-13

0.02
0
Return of Equity

13.P/E Ratio = Market value per share EPS

2011 2012 Year
P/E Ratio = 15 1.84 = 8.15
2012 2013 Year
P/E Ratio = 14.30 1.1 = 3
10
8
6

2011-12

2012-13

2
0
P/E Ratio

Rf =11%
Rm Rf = 4.5
= 1.203
RRR = Rf + (Rm Rf)
= .11 + 1.203 x 4.5
= 5.5235

Executive Summery
United Airways (BD) Ltd. (DSE : UNITEDAIR CSE : UNITEDAIR), operating as United
Airways (Bengali: ),a Bangladeshi airline headquartered
in Uttara, Dhaka. It operates flights from its main hub at Shahjalal International Airport in
Dhaka and secondary hub at Shah Amanat International Airport in Chittagong. It was
founded in 2005 and began flights on 10 July 2007 with its first aircraft, a Bombardier Dash 8100, purchased from Island Air. United Airways is the first listed company in the aviation
sector of Bangladesh. it became listed in July 2010.
In the fiscal year 2012-13 it made profits of BDT 115.4 crore (US$15 million). In 6 years of
operations it operated 38,000 flights, carried 1.4 million passengers and 2,800 tonnes of
cargo. As of 2013, it employs 850 people.
It is currently the largest private airline in Bangladesh, with the largest domestic network in
the country. United Airways operates to all of its destinations from its main hub Shahjalal
International Airport, along with international flights from its secondary hub Shah Amanat
International Airport to Kolkata.

Background Of The Company

United Airways (Bangladesh) Limited, a public limited company was founded by Capt. Tasbirul
Ahmed Choudhury a British-Bangladeshi expatriate, along with few businessman
and entrepreneurs in 2005. It obtained the Air Transport Operating License(ATOL) from Civil
Aviation Authority of Bangladesh on 28 June 2005.
The airline started operating scheduled domestic flights on 10 July 2007, its maiden flights
being DhakaSylhet and DhakaChittagong, with a Bombardier Dash 8-100, purchased
from Island Air. After few months, domestic flights to Cox's Bazar, Jessore, and Barisal started,
along with international service to Kolkata from Dhaka and Chittagong. Another Dash 8-100 was
delivered in 2008.
In 2009, the airline received a McDonnell Douglas MD-83 aircraft, and launched flights
to London, Dubai, Kuala Lumpur and Kathmandu. United Airways Airbus A310-300preparing to
take off from Shahjalal International Airport in 2012.

In 2010, it commenced flights to Jeddah, and launched the lucrative Sylhet-London flight with
an Airbus A310-300, while an ATR 72-200 and McDonnell Douglas MD-83 were delivered.
In 2011, it added a McDonnell Douglas MD-83, another Airbus A310-300 and an ATR 72-200.
Flights to Bangkok started and the carrier launched the route Dhaka- Rajshahi - Saidpur.
In 2012, it began flights to Muscat from Dhaka and Chittagong, restarted the ChittagongKolkata flight, and it also resumed flights to Bangkok.
In 2013, it added two McDonnell Douglas MD-83 and an ATR 72-200. It launched flights
to Singapore and domestic flights to Ishwardi. It plans to purchase 18-seater British Aerospace
Jetstream 31 aircraft for domestic services to smaller airports.
The airline also plans to launch flights to Doha, Karachi, Yangon, Dammam, Riyadh, Abu
Dhabi and Jakarta in the near future.

Recommendation
This company is the one and only airline company who entered in to the DSE. So they are doing
one kind of monopoly business.
1.
2.
3.
4.
5.

Company need to arrange more general meetings.

The position of the company current ratio is poor and quick ratio too.
Provide dividend to the share holder.
Develop the Service of the aircraft is mandatory
Should take public opinion.

Overall the condition of the company is Good but not much good. If suddenly any company
entered in to this market then they might have a problem.

Appendix
1.
2.
3.
4.

United Airways Financial year book 2012-13

https://www.facebook.com/pages/United-Airways-BD-Ltd/161734433852492
http://en.wikipedia.org/wiki/United_Airways
http://www.uabdl.com/

Table Of Content

1. Executive Summer

2. Background Of The Company

3. Ratio Analysis

4. Recommendation

5. Appendix