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Mission: To be the premier financial institution in the country providing high quality products and services backed by latest technology and a team of highly motivated personnel to deliver Excellence in Banking. Vision: At Dhaka Bank, we drew our inspiration from the distant stars. Our team is committed to assure a standard that makes every banking transaction a pleasurable experience. Our people, products and processes are aligned to meet the demand of our discerning customer. Our goal is to achieve like the luminaries in the sky. Our prime objective is to deliver a quality that demonstrates a true reflection of our vision - Excellence in Banking. The Dhaka Bank care for our society. It shares its pride with its surrounding. It has estabilished Dhaka bank Foundation, a philanthropic arm of our bank in November 24, 2002.
Ratio Analysis of Dhaka Bank Ratio: Ratios are useful for financial analysis by investor because ratios capture critical dimensions of the economic performance of the entity. Increasingly, ratios are a tool that managers use to guide measure and reward workers. A ratio analysis isn't just comparing different numbers from the balance sheet, income statement, and cash flow statement. It's comparing the number against previous years, other companies, the industry, or even the economy in general. Ratios look at the relationships between individual values and relate them to how a company has performed in the past, and might perform in the future. Types of Ratio: The different types of financial ratios include: Liquidity Ratio. Activity Ratio. Debt Ratio. Profitability Ratio.
2 Liquidity Ratio: Liquidity ratios measure a firm’s ability to meet its current financial obligations. Liquidity Ratios include: Net working capital Current Ratio Quick Ratio Activity ratio: Inventory Ratio. Average collection Period. Total Assets Turnover. Debt Ratio: Debt Ratio. Debt Equity Ratio. Interest Coverage Ratio. Profitability Ratio:
Gross Profit Margin. Operating Profit Margin. Net Profit Margin. Return on Total Assets. Return on Shareholders Equity.
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4 Years Financial Highlights:
No : 1
Name of Item Net Working Capital
2
Current Ratio
3
Debt Ratio
4
2001
2002
2003
-(465,957,963) -(352,961,879) (544,159,006) .9258 .898 .9308
2004 (1,270,761,251) .8449
96.54%
95.31%
94.19%
94.72%
Debt Equity Ratio
27.93
20.334
16.203
17.94
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Total Assets Turnover
.0194
.0206
.0186
.0220
6
Operating Profit Margin
2.24
2.44
2.43
2.042
7
Net Profit Margin
78.1%
59.5%
69.3%
57.5%
8
Return on Assets (ROA)
1.52%
1.23%
1.3%
1.3%
9
Return on Equity (ROE)
43.92%
26.16%
22.23%
24.03%
4
1. Net Working Capital: The Net Working Capital of a business is an indication of the short-run solvency of the business. The Net Working Capital computes as follows: Net Working Capital = Current Assets – Current Liabilities. 2001 6,794,109,660 – 7,338,268,666
2002 4,089,361,758 – 4,555,319,721
2003 4,750,473,647 – 5,103,435,526
2004 6,922,501,954 – 8,193,263,205
-(544,159,006)
-(465,967,963)
-(352,961,879)
-(1,270,761,251)
Comment: The net working capital means reserve cash of a company. This reserve is used to meet the daily working transaction of the bank. In Dhaka Bank net working capital is negative over the four years. This represents a negative trend. So, the bank borrows from other sources to operate the day to day transaction.
2. Current Ratio: The Current Ratio determines short-term debt-paying ability. The relationship of current assets to current liabilities is an attempt to show the safety of current debt holders’ claim in case of default.
5 The Current Ratio computes as follows: Current Assets
Current Ratio = Current Liabilities 2001
2002
2003
2004
6,794,109,660 7,338,268,666
4,089,361,758 4,555,319,721
4,750,473,647 5,103,435,526
6,922,501,954 8,193,263,205
.9258
.898
.9308
.8449
Comment: This ratio means that for every dollar of current liabilities, Dhaka Bank has .TK. .9258, . 898, .9038, .8449 of current assets in 2001, 2002, 2003, 2004. It means the bank has not adequate money to meet its current liabilities. Within these four years in 2003 & 2001 Dhaka Bank could meet the current liabilities better than the rest of the years.
3. Debt Ratio: The debt ratio measures the percentage of the total assets provided by creditors. This ratio indicates the company’s degree of leverage. The Debt Ratio computes as follows: Total Debt
Debt Ratio = Total Assets 2001
2002
2003
2004
18,464,051,230 19,125,187,741
18,208,121,417 19,103,568,653
19,605,648,340 20,815,623,157
26,690,207,401 28,178,094,763
96.54%
95.31%
94.19%
94.72%
Comments: This ratio means that creditors have provided that percentage of Dhaka Bank’s total assets in 2001, 2002, 2003, and 2004. The higher the ratio, the grater the likely risk for the lenders.
4. Debt Equity Ratio: The debt equity ratio is an attempt to show, the relative proportions of all lenders’ claims to ownership claims, and it is used as a measure of debt exposure. The measure is expressed as either a percentage or as a proportion. The Net Working Capital computes as follows:
6 Total Debt
Debt Equity Ratio = Shareholde rs Equity
2001
2002
2003
2004
18,464,051,230 661,136,511
18,208,121,417 895,447,236
19,605,648,340 1,209,974,817
26,690,207,401 1,487,887,362
27.93
20.334
16.203
17.94
Comments: This ratio implies that Dhaka bank’s total debt is 27.93, 20.33, 16.20, 17.94 times to its equity capital in 2001, 2002, 2003, 2004.Alternatively stayed, Dhaka bank’s credit financing equals Tk. 27.93, 20.33, 16.20, 17.94 for every Tk.1 of equity financing.
5. Total Assets Turnover: Total assets turnover measures how efficiently a company uses its assets to generate sales. The resulting number shows the dollars of sales produced by each dollar invested in assets. The Current Ratio computes as follows: Sales
Total Assets Turnover Ratio = Total Assets
2001
2002
2003
2004
371,619,211 19,125,187,741
394,043,102 19,103,568,653
388,183,976 20,815,623,157
621,750,177 28,178,094,763
.0194
.0206
.0186
.0220
Comments: Total Assets turnover implies that how much sales is created by Dhaka Bank by using its total assets. By analyzing this ratio I can say that Dhaka Bank is generating 0.0194, . 0206, .0186, .0220 Tk. of sales by using the 1 Tk. of assets in 2001, 2002, 2003, and 2004.
6. Operating profit Margin: Operating profit margin (OPM) measures the percentage of sales revenue remaining after all expenses. The Current Ratio computes as follows:
7 Operating Profit Margin =
Operating Pr ofit Sales
2001
2002
2003
2004
832,396,241 371,619,211
963,052,089 394,043,102
943,142,260 388,183,976
1,269,842,176 621,750,177
224%
244%
243%
204.2%
Comments: The operating profit margins of the Dhaka Bank are 224%, 244%, 243%, 204.2% in 2001, 2002, 2003, and 2004. Here, Operating profit margin 2004 is 204.2% which is quite bad in comparison to other years.
7. Net Profit Margin: Net profit margin, one of the most popular indicators of company health, measures the percentage of sales revenue remaining after all expenses is paid. The Current Ratio computes as follows: Net Profit Margin =
Net Pr ofit Sales
2001
2002
2003
2004
290,392,436 371,619,211
234,310,726 394,043,102
269,007,381 388,183,976
357,572,894 621,750,177
78.1%
59.5%
69.3%
57.5%
Comments: This ratio indicates that the percentage of the net profit is generating from the sales of Dhaka Bank. This ratio also shows that Dhaka Bank experienced a quite bad experience because of the flexible percentage net profit margin.
8. Return on Assets: An overall measure of profitability is return assets. It measures a firm’s efficient at generating profit with its assets. The Current Ratio computes as follows: Net Pr ofit
Return on Assets= Total Assets
8 2001
2002
2003
2004
290,392,436 19,125,187,741
234,310,726 19,103,568,653
269,007,381 20,815,623,157
357,572,894 28,178,094,763
1.52%
1.23%
1.3%
1.3%
Comments: The return on equity refers that how much percentage of the return the bank earns by using the total assets. These imply that Dhaka Bank earns 15%, 12%, 13%, 13% in 2001, 2002, 2003, and 2004 by using total assets. Here Dhaka Bank’s earnings is quite decreased in 2002 than the other years.
9. Return on Equity: Return on equity shows how many dollars of net income were earned for each dollar invested by owners. The Return on Equity computes as follows: Net Pr ofit
Return on Equity= Shareholde rs Equity 2001
2002
2003
2004
290,392,436 661,136,511
234,310,726 895,447,236
269,007,381 1,209,974,817
357,572,894 1,487,887,362
43.92%
26.16%
22.23%
24.03%
Comments: The return on equity refers that how much percentage of the return the bank earns by using the total equity. These imply that Dhaka Bank earns 43.92%, 26.16%, 22.23%, 24.03% in 2001, 2002, 2003, and 2004 by using total shareholders equity. Here Dhaka Bank’s earnings are decreasing from 2001.
