Origin of the report

This report is prepared to fulfill the partial requirement of ACN 305 of business administration program of Independent University on the ratio analysis of a company. So the business organization BOC Bangladesh Limited is chosen and I am discussing on different ratio of this company over five years from 1997 to 2001. I have based this report from the background information and knowledge that I acquired from BOC Bangladesh Limited and it provides a reliable and effective insight into the ratio analysis of the particular company. I did this report on financial performance because it’s a requirement of Financial Accounting course. I have tried to reflect my experience on my report in terms of financial performance of BOC Bangladesh Limited.

Objective of the Report

The specific objectives aimed for this report is:
1. To fulfill the partial requirement of the course under the guidance of the coordinator.
2. To gain experience and knowledge of analyzing the financial ratios from the real life which will help me in the practical working environment?
3. To find out the financial situation of BOC Bangladesh Limited.
4. Identify the problem area
5. Giving suggestion to overcome those problems
6. Finally comment on the result from investor and creditor’s point of view.

Research methodology

Information used to prepare this report has been collected from both the Secondary source and the primary survey. The secondary sources of information were collected from BOC Bangladesh Limited, Dhaka Stock Exchange, Annual report of BOC Bangladesh Limited, periodicals and materials from various newspapers and articles. An open discussion method was followed to gather primary information by interviewing the company secretary of the company.
Limitations Of The Study

• Lack of availability of information and data, some time there are some back dated information they provide
• The record system of the annual report is not efficient
• Lack of access in many section of the organization
• Time is not sufficient to complete the study perfectly.

Range of data over 5 years (Tk. ‘000)
(Financial history)

Entry item                               2001                2000                  1999                     1998                           1997
Current Asset                        342399            312853              300856                  287691                      276446
Current Liability                    460319             412451              433542                  372068                      345996
Inventory                              202514             195955              211047                   203028                     188974
Sales                                    1171801           1046682            1021890                 842943                      754586
Account receivable                50599               37274               34354                    30360                         23134
Cost of good sold                  675751             601178             642553                   525753                     490151
Account payable                    1559                  4577                4394                       3291                         3796
Fixed Asset                           1313665          1316266            1100734                1009421                     763728
Total Asset                            1658959          1632253            1404964                1297112                    1040174
Gross Profit                           496050             445504              379337                 317190                       264435
Operating profit                     264178             241851             191126                  114248                       96687
Net profit                              202018             203324             146134                  118545                       73617
Common equity                    1094420            959362             816912                  731651                       670935
Total liability                         561644              669757             584678                  565461                       369239
EBIT                                   261143               245549            193795                  156020                       100991
Dividend                              66960                 60873              60873                    57829                         45655
NOSO                               15218300            15218300        15218300              15218300                   115218300

Various devices are used in the analysis of financial statement data to bring out the comparative and relative significance of the financial information presented. These devices include

1. Comparative analysis
2. Percentage (Common size) analysis
3. Ratio analysis

Comparative analysis

In Comparative analysis the same information is presented for two or more different dates or periods so that like items may be compared. In Comparative analysis an investment analyst can concentrate on a given item and determine whether it appears to be growing or diminishing year by year and the proportion of such change to related items.

Percentage (Common size) analysis

Percentage analysis consists of reducing a series of related amounts to a series of percentages of a given vase. All items in an income statement are frequently expressed as a percentage of sales or sometimes as a percentage of cost of good sold. This analysis facilitates comparison and is helpful in evaluating the r4elative size of items or the relative changes in items. It may facilitate comparison between companies of different sizes. Analyst can use this analysis to evaluate and compare companies.