May 17, 2004

Mohiuddin Ahmed
(Course instructor)
School of Business,
Independent University,
Baridhara, Dhaka.

Dear Sir,

It is our immense pleasure to submit our class project on BOC Bangladesh Limited, as you asked to prepare and submit as a requirement of Finance 460 program. The name of our project is "Stock valuation of BOC Bangladesh Limited"

We have tried our best to compile the pertinent information as comprehensively as possible and if you need any further information, we will be obliged to assist you.

Thanking you,

.....................

ACKNOWLEDGEMENTS

At first we would like to thank our instructor for giving us such an important job like stock valuation as a class project. We would like to place our gratitude to the Supervisor of BOC Bangladesh Limited to enable us to complete our class project in their esteemed organization. Without his helpful guidance, the completion of this research project was unthinkable. Finally I would like to thank Hosne Ara Pervin Sheuli; Asst. Secretary Research & Library for helping in all sorts of collection of data. Her overwhelming support for this project gave us the inspiration to do a better report.

EXECUTIVE SUMMARY

This report “Stock valuation of BOC Bangladesh Limited” is prepared to fulfill the partial requirement of Finance 460 program of Business Administration Program of Independent University, Bangladesh. The topic of dissertation was selected upon consultation with course instructor of respective department.
 
The main aim of this report is to find out the financial situation and valuation of the stock of BOC Bangladesh Ltd. From this analysis we have calculated the share price of BOC and this analysis from the annual report issued by BOC Bangladesh Ltd. from the year 1999 to 2003, which was the main source of information.
 
After analyzing the different ratios of BOC Bangladesh Ltd. we can see that there was a slight decrement in Earning per Share and in 2003. Their EPS was 13.58, which is good for any company. From the analysis we can also say that BOC has failed to use its asset efficiently. In 2003 it’s earning per share has decreased slightly. This position has a bad impact on investors view. But according to chairman’s statement the business results for the year were satisfactory. From the sources of information there is no industry average and because of that we can’t compare those ratios. For this we can’t actually say that those ratios were good or bad.
 
To increase the performance of the company management had taken some new approaches. A second hand but unused Carbon Dioxide plant has been installed at the Tejgaon factory and has been accepted in late November after suitable testing.

Finally, we have used some qualitative factor and also some quantitative factor to find out the stock price. We have used DDM model as a quantitative factor. For this analysis we have taken imagination required rate of return (Kr), based on different types of risk associated with this company.