Thesis

On

Analysis Of Ratio As Financial

Accounting
Tactic To Evaluate The Commercial Banks
in Bangladesh

Submitted to:
Dr.Taslima Akther
Associate Professor
Department of AIS
Jagannath University

Submitted By:
Md. Abu Sayeed
ID.NO: M191630201384
Batch: 16th
Major: Accounting
Program: EMBA
Jagannath University

JAGANNATH UNIVERSITY

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 Date of submission: 10-06-2021

Letter of Transmittal
Date: 10-06-2021

To
Dr. Taslima Akther
Associate Professor
Jagannath University

Subject: Submission of Thesis on “ Analysis of ratio as Financial accounting

tactic to evaluate the commercial banks in Bangladesh”.

Dear Madam,
It is to inform you that I am completely contented to submit the thesis on “Analysis of ratio
as Financial accounting tactic to evaluate the commercial banks in Bangladesh as per the
supervisor’s instruction. I expect this report to be informative as well as comprehensive
though there are some limitation. I feel that the vast knowledge and experience I got here will
help me in my near future which is all about my career. I have tried my best to prepare the
report very worthwhile with my limited knowledge.

Your acceptance and appreciation will surely inspire me a lot. For any further queries about
the report, I will be gladly available to clarify the overall information used here.

Yours obediently,

Md. Abu Sayeed

ID.NO: M191630201384
Batch: 16th
Major: Accounting
Jagannath University

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 Supervisor’s Certificate

This is to certify that This thesis requirement for EMBA from department of Accounting &
Information Systems of Jagannath University. I certify that MD. Abu sayeed ,
ID.M191630201384, a student of Jagannath University has completed the thesis titled
“Analysis of ratio as Financial accounting tactic to evaluate the commercial banks in
Bangladesh”under my supervision.

I am pleased to state that he has worked hard in preparing this thesis and he has been able to
present a good picture of the concerned organization.
I wish his every success in life

……………………… .……….

Dr. Taslima Akther

Associate Professor
Department of Accounting & Information Systems

Jagannath University, Dhaka

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 STUDENT’S DECLARATION

I am MD. Abu sayeed bearing ID No. M191630201384, a student of Department of

Accounting & Information Systems, Jagannath University, hereby declare that, the Thesis
entitled “Analysis of ratio as Financial accounting tactic to evaluate the commercial
banks in Bangladesh”. is an original work done by me under the supervision of Dr. Taslima
Akther, Associate Professor, Department of Accounting & Information Systems, Jagannath
University, Dhaka. No part of this thesis has been submitted by me for any degree, diploma,
title or recognition before.

Sincerely Yours,

Md. Abu Sayeed

Id no: M191630201384
Batch: 16th
Major: Accounting
Jagannath University

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 Acknowledgement

At the beginning, I would like to express my sincere gratitude to the Almighty, the most
merciful and beneficial for empowering me to prepare the report within the scheduled time.
I would like to express my profound gratitude and wholehearted respect to my Advisor Dr.
Taslima Akther, Associate Professor, Department of Accounting & Information Systems,
Jagannath University for inspiring guidelines, providing procedures and valuable suggestion
and helping me to prepare this report.
Finally, I would like to express my profound gratitude to my family members who have given
me the opportunity to accomplish the MBA program and making this thesis in turn.

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 Executive Summary

This thesis an attempt has been made to assess the ratio analysis of NCC, City & Standard
Bank Limited. Basically this report has been developed from the basis of secondary data. The
sources of information are annual report of the bank, internet, newspaper, magazine etc. My
experience also helps me to establish this report by making this bank’s ratio analysis and by
describing its overall banking system. Banking is a system of intermediation. Modern
commercials banks since their early days had been doing two main functions. These are
Acceptance of deposits from the public and lending money to the people.

People is getting more benefit from the dealings of Non-Islamic banking because here
quarterly interest is not charged and there is no possibility of interest to be converted into
principal. But here honesty is the only pre-requisite.

The investment and comprehensive analysis of commercial bank is the confidence of the
lender in the ability and willingness of the borrower to repay the loan at a future date. It is
generally believed that confidence is the basis of all transactions. The fundamental principles
upon which credit is generally based are Character, Capacity, Capital and Responsibility,
Reliability, Resources of the borrow.

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 Table of Contents
Title Page i
Letter of Transmittal ii
Letter of Endorsement iii
Candidate’s Declaration iv
Acknowledgement v
Executive Summary vi
Table of Contents vii-viii
List of Figures ix
List of Tables x

Chapter-1: Introduction
1.1 Introduction 1
1.2 Background of the study 3
1.3 Literature Review 3
1.4 Diversification 5
1.5 Scope of the report 8
1.6 Methodology of the study 9
1.7 Time period of the study 9
1.8 Sources of Data collection 9
1.9 Objectives of the Report 10
1.10 Limitations of the report 10

Chapter-2: Organizational Overview

2.1 NCC Bank Ltd. 11
2.2 City bank Ltd. 16
2.3 Standard Bank Limited 20

Chapter-3: General Activity

3.1 Profit Rate 26
3.2 Formalities for Opening Foreign Currency (FC) Account 26
3.3 Procedure for Opening Letter of Credit (L/C) 26
3.4 Letter of Credit (L/C) Application 27
3.5 Examination of Letter of Credit (L/C) Application 27
3.6 Preparation of Credit Report 27
3.7 Position of Letter of Credit (L/C) 28
3.8 Confidential Report of Beneficiary of Letter of Credit (L/C) 28
3.9 LCA Registration 29
3.10 Bank Charge 29
3.11 Accounting Procedure 29
3.12 Clearing House & Collections of Bill 29
3.13 Procedures for Collection 30
3.14 Definition of Investment 30
3.15 Introduction of Investment: 30

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3.16 Problems arising on Gross profit margin: 31
3.17 Own opinion and solutions: 31
3.18 My Individual opinion and suggestions: 31
3.19 Nature of the Problem and Challenges 31

Chapter-4: Theory of Ratio Analysis

4.1 Ratio Analysis 35
4.2 Current Ratio 35
4.3 Liquid Ratio 35
4.4 Proprietary Ratio 36
4.5 Debt Equity Ratio 36
4.6 Gross Profit Ratio 36
4.7 Operating Ratio 36
4.8 Cost of Goods Sold Ratio 36
4.9 Cash Ratio 37
4.10 Earning per Share 37

Chapter-5: Comparative Ratio Analysis & Finding

5.1 Comparative Ratio Analysis of Three Bank’s 38
5.2 Comparative Analysis of Three Bank’s 45
5.3 SWOT Analysis 46
5.4 Findings 47
Chapter-6: Recommendation & Conclution
6.1 Recommendations 49
6.2 Conclusion 50
6.3 References 51

List of Figures
Figure – 1 : Current Ratio 38

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Figure – 2 : Quick Ratio 39
Figure – 3 : Cash Ratio 39
Figure – 4: Return on Assets 40
Figure - 5: Return on Total equity 41
Figure - 6: Return on Deposits 41
Figure – 7 : Debt to Total Capital 42
Figure – 8 : Debt to Equity 43
Figure – 9 : Operating expenses to revenue 44
Figure – 10 : Comparative Analysis 45

List of Tables
Table 1: Total Branches 12

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Table 2: Current Ratio 38
Table 3: Quick Ratio 38
Table 4: Cash Ratio 39
Table 5: Return on Assets 40
Table 6: Return on total equity 40
Table 7: Return on Deposits 41
Table 8: Debt to Total Capital 42
Table 9: Debt to Equity 42
Table 10 : Operating expenes to revenue 43
Table 11 : Comparative Analysis 45