Introduction

Lease is contract between a lessor, the owner of the asset, and a lessee, the user of the asset. Under the contract, the owner gives the right to use the asset to the user over an agreed period of time for a consideration called the lease rental. The lessee pays the rental to the lessor as regular fixed payments over a period of time.

Leasing is an important new method of financing. Lease firms play a role analogous to that of banks and other financial institutions, but act by buying and then leasing equipment to their clients rather than loaning money to buy it. There have been two principal reasons which contributed to the development of equipment leasing in the developed countries, namely:

1)  The high rate of technological obsolescence of most of the industrial equipment which made “use of the equipment” through leasing a better proposition than ownership, and
2)  The earning capacity of the equipment has primary importance to the  
      psychological factor of ownership.
      (T. K. Pordder)
     
Leasing is now a growing industry in many developing countries as well as Bangladesh. In spite of sluggish economic activities the growth of the leasing industry is significant. So, we took the two leading leasing company of Bangladesh IDLC & ULC to analyze their financial performance and to find the opportunities and prospects and threats of leasing industries of Bangladesh for our study purpose.

ORIGIN OF THE REPORT:

This report is a pre requisite for “Corporate Finance” course. It  is assigned on us by Dr. Shujit Saha, course Instructor of  Corporate Finance. We have selected two leading leasing industry for our term paper. The leasing companies are Industrial Development Leasing Company of Bangladesh Limited (Called IDLC) and United Leasing Company Limited (Called ULC)
 

PURPOSE OF THE REPORT:         

The specific objectives aimed for this report are:

- To fulfil the partial requirement of the course under the guidance of the    
   instructor Shujit Saha.

- To gain experience and knowledge of analyzing the financial statement      
   technique from the real  life which will help in  practical working   
   environment.

- To find out the prospects of leasing company in Bangladesh as an       
    alternative financier.

- To gain report writing and communication skill.


SCOPE OF THE REPORT:

The proposed report will cover the tools and techniques of corporate finance in the selected leasing industry.

SOURCE OF DATA:

The major source of data for preparing the report will  be based on secondary information, analyzing annual reports.

METHODOLOGY:

The theoretical part of the report is based solely on secondary information. The most important sources for this part are reports and journals.