Bangladesh University of Professionals

Department of Business Administration in Finance and Banking

Term Paper
Impact of firm specific factors on
financial performance of
FAS Finance and Investment Limited

Course name: Principles of Finance (FIN 1105)

Supervised By-

Ummay Mahima Ima

Lecturer
Department of Business Administration in Finance and Banking
Bangladesh University of Professionals

Submitted By-

Group: 2
Section: A
Batch-2022

Submission Deadline- 31 October 2022

 Group Information

Serial Name ID Remarks

No.
1. Fabiha Lamisa Suchona 2222151005

2. Taslima Akter 2222151017

3. Mehrin Mostofa Addrita 2222151049

4. Musharrat Abir 2222151129

5. Tilottama Barua 2222151149

 Acknowledgment
We would like to thank our honorable instructor Ummay Mahima Ima, Lecturer, Bangladesh
University of Professionals, for granting us such an opportunity to prepare a report on "Impact of
firm specific factors on financial performance of FAS Finance and Investment Limited".

Throughout the entire research of our report, she has provided helpful guidance, inspiration and
necessary support during the preparation of this paper. Without this timely guidance and
assistance, it would not have been possible to complete this paper.

A team of only a few members alone without great mentorship cannot do a project on this scale.
We take this opportunity to express our deep sense of gratitude to the individuals in the group for
the valuable contribution to this report. We would also like to acknowledge our classmates for
their immense support.
 Executive Summary

FAS Finance and Investment Limited was established in 1997 under the Companies Act. 1994. It
has been a very profitable company till 2019 till it posted a Tk151 crore loss. Its net assets also fell
by 84% to Tk29 crore during that year. For the first time since being listed with the capital market
in 2008, the company could not pay any dividend to shareholders.

This term paper analyses the financial risks of FAS Finance and Investment Limited. Financial
risks are risks associated with financing, financial transactions and a company’s loans that are at
risk of default. It describes a company’s potential for financial loss and uncertainty about its extent.
In this term paper, we will analyze the financial risk and other associated factors of FAS Finance
and Investment LTD. Taking a look at the annual report of the company, the financial risk, liquidity
risk, Return on Asset, Return of Equity and other factors associated with analyzing the financial
stability of the company can be measured. Financial risk is related to the payment of debt and is
directly proportional to how much debt a company allows into its capital structure. Liquidity risk
is associated with the company’s current ratio which measures the company’s ability to pay short
term debts. Again, return on asset and return or equity expresses a company’s efficiency in using
its resources to generate profit for the company and its expansion. From the analysis we see that
the company’s financial risk has been increasing from the year 2012 which is mainly because of
past shareholders and then started fluctuating from 2014 because PK Halder and his accomplices
took command of the company board from 2014, triggering a series of bad loans that ultimately
paved the way for the company's downfall.

Overall, the company needs to improve its performance in order to save itself from the verge of
bankruptcy in the future.
 Table of Contents

Chapter 1- Introduction ............................................................................................................... 1

1.1 Objective .............................................................................................................................. 1
1.2 Scope ..................................................................................................................................... 2
1.3 Limitations ........................................................................................................................... 2
1.4 Methodology ........................................................................................................................ 3
Chapter 2- Company Overview ................................................................................................... 4
2.1 History .................................................................................................................................. 4
2.2 Growth and Sustainability.................................................................................................. 5
2.3 Activities ............................................................................................................................... 5
2.4 Branches ............................................................................................................................... 5
2.5 Company’s Vision and Mission .......................................................................................... 6
2.6 SWOT Analysis of FFIL ..................................................................................................... 6
Chapter 3- Analysis of The Report.............................................................................................. 7
3.1 Return on Assets .................................................................................................................. 7
3.2 Return on Equity ................................................................................................................. 9
3.3 Total Assets ........................................................................................................................ 11
3.4 Total Sales .......................................................................................................................... 11
3.5 Financial Risk .................................................................................................................... 13
3.6 Liquidity Level................................................................................................................... 14
3.7 Number of Employees ....................................................................................................... 16
3.8 Number of Branches ......................................................................................................... 18
3.9 Age ...................................................................................................................................... 19
3.10 Number of Independent Director .................................................................................. 20
Chapter 4- Conclusion ................................................................................................................ 21
 List of graphs

3.1 Figure: Line chart for ROA....................................................................................................... 7

3.2 Figure: Line chart for ROE ....................................................................................................... 9

3.3 Figure: Line chart for Total Assets ......................................................................................... 11

3.4 Figure: Line chart for Total Sales ........................................................................................... 12

3.5 Figure: Line chart for Financial Risk ...................................................................................... 13

3.6 Figure: Line chart for Liquidity Level .................................................................................... 15

3.7 Figure: Line chart for Number of employees.......................................................................... 17

3.8 Figure: Line chart for Number of Branches ............................................................................ 18

3.9 Figure: Line chart for Company’s Age ................................................................................... 19

3.10 Figure: Line chart for Number of Independent Director ....................................................... 20

Chapter 1- Introduction

This term paper is one of the academic requirements for the course ‘Principles of Finance’. This
is assigned by Ummay Mahima Ima, Lecturer, Department of Business Administration in Finance
and Banking of Bangladesh University of Professionals (BUP). For that, we’re finding the
financial metrics of FAS Finance and Investment Limited, to determine the financial performance
of the company from different angles using ratio analysis. Shareholders wealth maximization is
the primary goal of all firms. In order to achieve this goal, capital is needed, which can be raised
through debt or stock. A company’s financial factors can be used to decide whether to invest in it
or not. Both banks and shareholders benefit from issuing loans. Moreover, it can be used to forecast
a company's future financial status and determine predicted earnings and dividends. Financial
factors analysis can be used to forecast a company's future financial status and determine predicted
earnings and dividends. Financial Ratio Analysis is a beneficial management mechanism which
provides key indicators of organizational performance. Managers can form strategies, take
initiatives after pinpointing strengths and weaknesses and analyze a company’s control and risk
by doing ratio analysis. It can be used by credit analysts to assess an organization's ability to pay
its debts, as well as security experts to assess an organization's capacity to pay interest on its bonds.
Financial ratios were used to assess FAS Finance & Investment Ltd.’s financial data and provide
meaningful, insights into its overall performance in this report. The ratios are based on FAS
Finance & Investment Ltd.’s financial statements and are used to assess the company's value, rates
of return, growth, profitability, leverage, margins, liquidity, and other factors.

1.1 Objective
Financial factors analysis is a beneficial management mechanism which provides key indicators
of organizational performance. Managers can form strategies and take initiatives after pinpointing
strengths and weaknesses by doing financial analysis.
➢ The main purpose of financial analysis is to let everyone know about present
and future profit.
➢ By analyzing financial factors and ratios, we can know the liquidity position of FAS
Finance & Investment Ltd

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 ➢ We can define FAS Finance & Investment Ltd long-term solvency by analyzing financial
factors and ratios.
➢ By analyzing financial ratios and factors, we can get an idea about the operating efficiency
of FAS Finance & Investment Ltd
➢ By analyzing financial ratio and factors, we can know about future plan and forecasting of
FAS Finance & Investment Ltd.

1.2 Scope of the report

The report covers some financial factors and ratios analysis of FAS Finance & Investment Ltd
from 2011 to 2020. The financial factors and ratios are-
➢ Return on Assets
➢ Return on equity
➢ Total Assets
➢ Total Sales
➢ Employees
➢ Age
➢ Branches
➢ Number of Independent Directors
➢ Total Directors
➢ Financial risk
➢ Liquidity Level

1.3 Limitations
During the ratio analyzation we faced following complications:
➢ Member communication issues, stemming from the fact that we live very far away from
each other and scheduling issues.
➢ Members not having access to an adequate computing device, the internet or otherwise
having issues with electricity in general.
➢ As data was collected through the internet, these data may not be authentic.
➢ In-depth idea and analytical ability lacking to write such report.

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 ➢ Due to having limited time and inability of data collection, the data we have found is
secondary.

1.4 Methodology
We conducted financial analysis for the study. A brief description of each test as follows:
➢ ROA: Return on asset shows a company’s assets are in generating revenue
➢ ROE: Return on equity measures how efficiently a firm can use the money from
shareholders to generate profits and expand.
➢ Total Assets: The meaning of total assets are all the assets or items of value a small
business owns.
➢ Total Sales: Total sales of a company is defined as the value of all invoices for an
accounting period, such as a month or a year before making adjustments.
➢ Employees: Employees are the base for a strong and long-running organization and
building a successful business
➢ Age: Firm age is defined as the number of years of incorporation of the company; even
though some believe that listing age should define the age of the company.
➢ Branches: A branch office is a location, other than the main office and a part of the parent
organization, which are opened to perform the same business operations as performed by
the parent company to increase their reach.
➢ Number of Independent Directors / Total Directors: The directors of a company is the
governing body of a company, elected by shareholders in the case of public companies to
set strategy and oversee management. An independent director, in corporate governance,
refers to a member of a board of directors who does not have a material relationship with
a company and is neither part of its executive team nor involved in the day-to-day
operations of the company.
➢ Financial risk: Financial Risk is the risk of not being able to pay off the debt that the
company has taken to get financial leverage
➢ Liquidity Level: Liquidity level describes the degree to which an asset can be quickly
bought or sold in the market at a price reflecting its intrinsic value.

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Chapter 2- Company Overview

2.1 History

FAS Finance & Investment Limited (FFIL) is a registered Public Limited Company established
in 1997 under the Companies Act. 1994. Primarily, the company received license from
Bangladesh Securities & Exchange Commission (BSEC) to act as a Merchant Bank in 1998.
Subsequently the FFIL obtained license from Bangladesh Bank in 2001 as a first-generation
Non-Banking Financial Institution (NBFI) under the Financial Institutions Act. 1993 with the
belief of innovation, integration in financial services and creation of best value to the
Shareholders. FFIL is sponsored by a group of renowned & dedicated Bangladeshi
industrialists and businessmen with the initial paid up capital of Tk. 21.34 million against
Authorized Capital of Tk. 500 million. At present the paid-up capital stands at Tk. 1490.77
million against Authorized Capital of Tk. 2100 million.

FFIL is a publicly traded Company listed with Dhaka & Chittagong Stock Exchanges, and
regulated by Bangladesh Securities and Exchange Commission FFIL maintains the Investor
Relations Department to meet up the shareholders’ complaints (if any) regarding any
inconvenience. In addition to part of Money Market, FFIL is also involved with capital market
through its subsidiary as “FAS Capital Management Limited” of the Country. FAS Capital
Management Limited, a wholly owned subsidiary Company of FAS Finance & Investment
Limited, was incorporated as Private Limited Company in Bangladesh in 2010 under the
Companies Act. 1994 and received license from Bangladesh Securities and Exchange
Commission in 2012. FAS Capital Management Limited provides issue management, portfolio
management, and other allied services with advisory support to the investors as and when
required, even any uncalled situation.

4
2.2 Growth and Sustainability

FAS Finance & Investment Limited has been working together to bring its growth & sustainability
for more than a decade to make powerful the industry and national economy. During the last
decade, we have observed a remarkable upsurge of concern about the sustainability of economic
development over the long run. As a result, considerable effort has been invested in the design of
an analytical framework that can be used to think about policies that promote sustainable growth.
Sustainable growth is the realistically attainable growth that a company could maintain without
running into problems. A business that grows too quicklymay
find it difficult to fund the growth. FFIL built a strong dynamic leadership to face the challenges
and ensuring growth & sustainability by the way of profit maximization and moving together to
achieve the company's vision.

2.3 Activities
Some Subsidiaries of FAS Finance and Investment Limited include:
▪ FAS Capital Management Limited
▪ FAS Finance and Investment Limited, Asset Management Arm

2.4 Branches

FAS Finance & Investment Limited (FFIL) head office is located in Suvastu Imam Square (4th &
5th Floor), 65 Gulshan Avenue, Gulshan - 1, Dhaka-1212, Bangladesh. FFIL company also has 4
more branches which are Gulshan branch (principal branch), Chottogram, Sylhet and Narshingdi
branch.

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 2.5 Company’s Vision and Mission

▪ To Become a premier financial institution for providing innovative and credible financial
products & services for every community of our country.
▪ To inspire & enable customers for making healthy business relationships of mutual benefit
and create customers’ loyalty, shareholders’ value and employees’ satisfaction.
▪ To strengthen capital base and to secure a sustainable business growth on long term basis.
▪ To maintain strong risk management & compliance, high underwriting standards and
internal control using best banking practices, including timely recovery of all loans.

2.6 SWOT Analysis of FFIL

Strengths
➢ They provide higher capital appreciation.
➢ If the investors get return, then it will be higher
than the other funds.
Opportunities
➢ Dividends from the equity funds are tax free.
➢ Equity shareholders have voting rights in the
company.

➢ They are the real owners of the company. ➢ Best investment option if you are looking for
higher return.

Weakness
➢ There is no security or guarantee of returns.
➢ There will be high risk if the investor did not get
any return from the company.
Threats
➢ They are highly volatile i.e., small change in the
economy leads to high impact on the return.
➢ The global factors will also affect the share
price.

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 Chapter 3- Analysis of The Report

Number No of
Financial Liquidity No of
ROA ROE Total Asset Total Sales of Age independent
Risk Level branches
Employ director
0.023491 0.293211 2621180633 212481772 0.61318523 3.281246513 46 4 14 0.142857143
0.007452 0.105591 2975741216 81436423 0.65866599 3.542081317 63 4 15 0.25
0.004011 0.090011 4712317250 196347851 0.66532388 2.56025219 58 4 16 0.181818182
0.014522 0.515179 7449897919 271495355 0.7815839 1.942925466 49 4 17 0.181818182
0.00954 0.60319 13278219570 433751591 0.87633116 1.601884999 76 4 18 0.25
0.007367 1.2605 17110147367 349543557 0.89666064 1.753939619 114 4 19 0.25
0.00726 0.633905 18335115888 372893907 0.89630421 1.777532095 110 4 20 0.214285714
0.006329 0.565905 18777761726 404957642 0.89241991 1.830217434 122 4 21 0.230769231
-0.07226 -6.9749 20270239259 -251215115 0.98333683 1.503964393 84 4 22 0.4
-0.09435 -9.6749 21534408473 -1604224379 1.07866312 1.325753131 54 4 23 1

3.1 Return on Assets

3.1 Figure: Line chart for ROA

Return on Asset (ROA) = Net Income/Total Assets

Return on asset shows the percentage of how profitable a company’s assets are in generating
revenue. Corporate management, analysts and investors use ROA to determine how efficiently a
company uses its assets to generate a profit. A higher ROA means a company is more efficient and
productive at effectively managing its assets to produce greater amounts of net income. A positive

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ROA ratio usually indicates an upward profit trend. ROA is most useful for comparing companies
in the same industry as different industries use assets differently. ROA is usually shown as a
percentage.
Calculating ROA of FAS Finance and Investment Limited from 2011-2020, we can see that the
ROA of the company in 2011 was 2.35% which decreased to 0.745% in 2012. This was due to the
decrease in net income (profit after tax) of the company compared to an increase in total assets
from 2011 to 2012. From 2012 to 2013, the ROA deteriorated further to 0.401% due to further
decrease in net income and increase in assets indicating that FAS Finance and Investment Limited
was not effectively managing its assets to generate net income. From 2013 to 2014, the company
experienced an improvement in its ROA, with the value rising to 1.45% in 2014. This is because
the company experienced a huge rise in its net income in 2014, which had a greater impact on
ROA compared to the increase in total assets. In 2015, the ROA of the company fell again to
0.95%. Although both the net income and total assets of the company increased from 2014 to 2015,
the impact of the rise in total assets was greater than the impact of increase in net income on the
ratio and hence ROA decreased.
From 2016 to 2018 the ROA of the company continued to decrease gradually, with the ROA of
the company being 0.737% in 2016, 0.726% in 2017 and 0.633% in 2018. The gradual decrease
in ROA was due to fluctuations in net income with the net income decreasing from 2015 to 2016
then increasing again from 2016 to 2017 and then again decreasing from 2017 to 2018 while the
total assets of the company continued to increase over the years. Hence, due to gradual increase in
the total assets, the ratio continued to decrease, indicating that the company was not using its assets
efficiently to generate income. In the years 2019 and 2020, the ROA was negative at -7.22% and
-9.43% respectively because the company incurred losses due to the interest paid being greater
than the interest income received, hence the operating income was negative. The ratio deteriorated
from 2019 to 2020, because the loss incurred by the company increased. Overall, the ROA of the
company was in a bad position throughout the years, gradually decreasing throughout the years,
except 2011 and 2014.

8
3.2 Return on Equity

3.2 Figure: Line chart for ROE

Return on Equity (ROE) = Net Income/Number of Shares

Return on equity measures how efficiently a firm can use the money from shareholders to generate
profits and expand. It is a measure of the profitability of a business in relation to the equity. Since
shareholder’s equity can be calculated by taking all assets and subtracting all liabilities, ROE can
also be thought of as a return on assets minus liabilities. ROE is considered a gauge of a
corporation's profitability and how efficient it is in generating profits. Unlike other return on
investment ratios, ROE is a profitability ratio from the investor’s point of view—not the company.
In other words, this ratio calculates how much money is made based on the investors’ investment
in the company, not the company’s investment in assets or something else. The higher the ROE,
the more efficient a company's management is at generating income and growth from its equity
financing. That being said, investors want to see a high return on equity ratio because this indicates
that the company is using its investors’ funds effectively. Many investors also choose to calculate
the return on equity at the beginning of a period and the end of a period to see the change in return.
This helps track a company’s progress and ability to maintain a positive earnings trend. If the
company's ROE turns out to be low, it indicates that the company did not use the capital invested

9
by the shareholders efficiently. ROEs will vary based on the industry or sector in which the
company operates. ROE is usually shown as a percentage.
By calculating the ROE of FAS Finance and Investment Limited, we can see that in 2011 the ROE
was 29.3% which decreased to 10.6% in 2012. This is because the net income (profit after tax) of
the company decreased from 2011 to 2012, while the number of shares was constant. The ratio
further decreased in 2013 to 9.00% due to further decrease in net income. From 2013 to 2014, the
ratio drastically increased to 51.5% due to a huge increase in the net income of FAS Finance and
Investment Limited. In 2015, the ROE of the company increased to 60.3% due to an increase in
net income, while the number of shares was at a constant value of 210000000 throughout the years.
In 2016, the ROE was 126.05% indicating that the company was generating net income from equity
financing effectively. Although, the net income fell from 2015 to 2016, the number of sharesof the
company also decreased from 210000000 to 100000000, and hence ROE increaseddrastically.
In the years 2017 and 2018, the ROE of the company was 63.4% and 56.6% respectively. The
decrease in ROE from 2016 to 2017 was due to the increase in the number of shares to 210000000
again in 2017, which had a greater impact on the ratio compared to the increase in net income.
From 2017 to 2018, although the number of shares remained constant, the net income fell and
hence the ratio deteriorated further. In 2019 and 2020, the ratio was negative at -697.5% and -
967.5% respectively. The ratio was negative because the company incurred losses in 2019 and
2020 while the number of shares remained constant. From 2019 to 2020, the loss of the company
increased and hence the ratio deteriorated further. Overall, the ROE of the company was in a good
position till 2016, but decreases in net profit and net loss resulted in the ROE of the company being
in a bad position in recent years.

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3.3 Total Assets

3.3 Figure: Line chart for Total Assets

The meaning of total assets are all the assets or items of value a small business owns. Included in
total assets are cash, accounts receivable (money owing to you), inventory, equipment, tools, etc.
Generally, increasing assets are a sign that the company is growing. A profitable company will
show an increase in assets corresponding to the increase in retained earnings.
From the graph, we can see that in the years 2011 and 2012, there was a period of stability. But in
2013 and 2014, there was a positive fluctuation. Gradually, the graph started rising in 2015 to
2019.
Positive and increasing net worth indicates good financial health. Decreasing net worth, on the
other hand, is cause for concern as it might signal a decrease in assets relative to liabilities.

11
3.4 Total Sales

3.4 Figure: Line chart for Total Sales

Total Sales play a vital role in the building of loyalty and trust between customers and businesses.
When sales increase or decrease, it changes certain financial aspects of any business.
The graph provides information on total sales. We can see that the graph flattened out toward the
end of 2012. Then again total sales dramatically rose from the year 2014 to 2015. There were
steady ups and downs from 2016 to 2018. Suddenly, the graph flattened out toward 2019 and 2020,
and the company received serious drawbacks.
Negative sales growth can put a company in the worst-case scenario being bankruptcy. Yet some
business owners aren’t aware of why their company is failing. That's why it's important to
understand every piece of the sales process.

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3.5 Financial Risk

3.5 Figure: Line chart for Financial Risk

Financial Risk is the risk of not being able to pay off the debt that the company has taken to get
financial leverage. It is related to the payment of debt and is directly proportional to how much
debt a company allows into its capital structure. Financial risk is avoidable if a company does not
take loans but this is quite impossible since loans are required for smooth operations of any
company. Again, financial risk will exist till the equity financing increases drastically. A company
gets into debt and financial risk to generate better returns and tap into the lure of financial leverage.
However, financial risk can be controlled by reducing debt financing and increasing equity
financing. Financial risk is measured by debt-to-asset ratio and other financial leverage multipliers.

The debt-to-asset ratio is a measure of a business firm's financial leverage or solvency. It

determines the percentage of debt the business firm uses to finance its operations. It is important
for business creditors especially the investors and accountants who use this ratio to know how
much cushion they have against risk. A debt-to-equity ratio of 1.5 would indicate that the company
in question has $1.50 of debt for every $1 of equity.

What counts as a good debt ratio will depend on the nature of the business and its industry.
Generally speaking, a debt-to-equity or debt-to-assets ratio below 1.0 would be seen as relatively
safe, whereas ratios of 2.0 or higher would be considered risky. Some industries, such as banking,
are known for having much higher debt-to-equity ratios than others.

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A high debt ratio indicates that a company is highly leveraged, and may have borrowed more
money than it can easily pay back. Therefore, the lower the ratio, the safer the company. Again, if
a company has a negative debt ratio, this would mean that the company has negative shareholder
equity. In other words, the company's liabilities outnumber its assets. In most cases, this is
considered a very risky sign, indicating that the company may be at risk of bankruptcy.
Throughout the years from 2011 to 2013 we see a stable debt to asset ratio but then see an
increasing ratio from 2014 to 2020, which means that the company lost its stability during this
period and its liabilities outnumbered its assets. This indicates that the company may be at the risk
of bankruptcy. The reason for such a sharp fall from the year 2014 is due to the change of
ownership and involvement with several major debt scandals, among which Prashanta Kumar (PK)
Halder's debt scandal was deemed especially responsible for the huge loss (worth 151 crore).

14
3.6 Liquidity Level

3.6 Figure: Line chart for Liquidity Level

Liquidity risk is the risk of incurring losses resulting from the inability to meet payment
obligations. Liquidity risk is the risk associated with a company's liquidity. Liquidity is the ability
of a company to pay its debts without suffering catastrophic losses. If a financial institution cannot
meet its short-term debt obligations, it is said to be experiencing liquidity risk. It is important to
the investors, managers, and creditors who use liquidity measurement ratios when deciding the
level of risk within an organisation.

Financial institutions depend upon borrowed money to a considerable extent, so they're commonly
scrutinized to determine whether they can meet their debt obligations without realizing great losses,
which could be catastrophic. Institutions, therefore, face strict compliance requirements and stress
tests to measure their financial stability.
Liquidity is a bank's ability to meet its cash and collateral obligations without sustaining
unacceptable losses. Liquidity risk refers to how a bank’s inability to meet its obligations (whether
real or perceived) threatens its financial position or existence. The smaller the size of the security
or its issuer, the larger the liquidity risk.
The current ratio is a ratio that measures a company’s liquidity and its ability to pay short-term
obligations. A good current ratio is between 1.2 to 2, which means that the business has 2 times
more current assets than liabilities to cover its debts. However, an excessively high current ratio,
could indicate that the company isn't effectively managing its funds.

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A decline in this ratio can be attributable to an increase in short-term debt, a decrease in current
assets, or a combination of both. Regardless of the reasons, a decline in this ratio means a reduced
ability to generate cash.

Two things should be apparent in the trend of FAS Finance. First, the trend from 2012 to 2015 and
from 2018 to 2020 is negative, which means that perhaps it is taking on too much debt or its cash
balance is being depleted—either of which could be a solvency issue if it worsens. Again, the trend
from 2011 to 2012 and from 2015 to 2018 is positive, which could indicate better collections,
faster inventory turnover, or that the company has been able to pay down debt.
The second factor is that from 2012 to 2013 the current ratio has been more volatile, jumping from
3.5 to 2.5 in a single year, which could indicate increased operational risk and a likely drag on the
company’s value.

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3.7 Number of Employees

3.7 Figure: Line chart for Number of employees

Employees are the base of a strong and long-running organization. Employee engagement is the
key to building a successful business. Employees run the organization no matter what level. This
means their strength, commitment and dedication and their emotional connection with the
organization can’t be judged as assets in monetary value.

If we take a good look at the FAS Finance and Investment Limited company, we can see the last
10 years evaluation where the number of employees is increasing. Because the company is doing
good and generating maximum revenue over the years and they hired more employees to keep that
up. From 46 employees in 2011 to 122 employees in 2018 is a huge improvement for a company.
Though FAS Finance and Investment company has to reduce some employees in 2019 and 2020
due to the net loss the company has faced. In 2019 and 2020 the number of employees was 84 and
54.

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3.8 Number of Branches

3.8 Figure: Line chart for Number of Branches

A branch office is a location, other than the main office and a part of the parent organization, which
are opened to perform the same business operations as performed by the parent company to
increase their reach. Most branch offices consist of smaller divisions of different aspects of the
company such as human resources, marketing, and accounting.

Judging the annual report of FAS Finance & Investment Ltd. It is noticed that the company has
maintained four branches from 2010 to 2020, Even now in 2022, it has four branches, One
principal branch and three other branches. The principal branch got licensed on 27th September,
2001 and then the Chittagong Branch and the Narsingdi Branch got licensed on 14th February,
and 18th July of 2007. Lastly, the Sylhet Branch, that got licensed on 9th July, 2008. Since then,
the company didn't have any branch expansion till now.

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3.9 Age

3.9 Figure: Line chart for Company’s Age

Age is the length of time during which a being or thing has existed. We defined firm age as the
number of years of incorporation of the company; even though some believe that listing age should
define the age of the company. Most research on the age– performance issue has tested for linear
relationships, meaning that as age increases, performance consistently increases or decreases.

FAS Finance & Investment Limited (FFIL) sponsored by a group of renowned & dedicated
Bangladeshi Industrialists and Businessmen was incorporated on 4th March 1997. As of 2020,
FAS Finance and Investment limited company is incorporated for 23 years and the overall
performance of this company is increasing.

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3.10 Number of Independent Director

3.10 Figure: Line chart for Number of Independent Director

The directors of a company are the governing body of a company, elected by shareholders in the
case of public companies to set strategy and oversee management. Independent directors who are
also part of the board of directors, not connected or associated with the Company in any manner
and work only to safeguard the interest of the members who individually cannot look after their
interest.

As per sub section 4 of Section 149 of the Companies Act 2013, every listed public company is
mandatorily required to have at least one-third of the total number of directors as independent
directors. But in the graph, from 2011 to 2018 the ratio of independent directors by total number
of directors is below one third. In 2019, the ratio is blessingly high. Lastly in 2020, the ratio is
equal, which means the number of independent directors and total directors are the same which is
a good sign for the company.

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Chapter 4- Conclusion
To conclude, from our analysis we can see that although FAS Finance & Investment Limited
experienced a decrease in profits till the year 2013, its profits increased by a huge amount in 2014
and 2015. Then it experienced fluctuations in its profits till 2018. Before incurring net losses in
the year 2019 and 2020, due to interest paid being greater than the interest income received.

We can see a declining trend in both the liquidity and financial position of the company, indicating
that both the financial risk and liquidity risk of the company increased. The total assets of the
company increased gradually throughout the 10 years. This can have both positive and negative
effects on the company. From our analysis we can see that increasing assets affected the ROA of
the company negatively. The operating income (total sales) of the company was fluctuating till
2018 and in 2019 and 2020, the operating income was negative.

The reason behind the company’s wavering risk level is due to the frequent change in ownership.
The company started its journey with the Chairman of Nitol-Niloy Group, Abdul Matlub Ahmad.
However, the chairman and his family members started veering away from the company and sold
all shares in 2014. This is when P&L International Ltd, Reptile Farm Ltd owned by PK Halder and
Nikita & Company Ltd, allegedly responsible for the downfall of the company, started buying FAS
Finance shares. While PK Halder and his accomplices were busy in triggering the downfall of the
company, Nikita & Company sold all of its shares between 2017 and 2018. As of the end of
September last year, FAS Finance's total borrowing and deposits from various banks, financial
institutions and individuals stood at Tk1,558 crore. Its share price was Tk5.50 each at the end of
the 2020 trading session at the Dhaka Stock Exchange (DSE), while its face value per share was
Tk10.Moreover, for the first time since 2008, the company could not pay any dividends and
reported a loss of 151 crore.

Overall, FAS needs to work towards improving its overall performance, liquidity, profitability,
and financial positions. If it does not then, in the future, it may face further losses and may not be
able to pay off its debts. This may lead to bankruptcy and the company may go out of business.

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Reference
1. FAS Finance and Investment Limited official website
2. FAS Finance and Investment Limited annual report
3. TBS Report: ‘FAS Finance posts Tk151cr loss’

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