Performance Analysis of Grameenphone:

Liquidity Ratio: Liquidity ratio actually shows the relationship of a firm’s cash and other
current assets to its current liabilities.

Two ratios are discussed under Liquidity ratio:

Ratios / Year 2013 2014 2015 2016 2017

Current 0.22 0.24 0.22 0.16 0.28
Ratio Times Times Times Times Times
Quick 0.21 0.24 0.17 0.15 0.27
Ratio Times Times Times Times Times

Current Ratio: This ratio indicates the extent to which current liabilities are covered by those
assets expected to be converted to cash in the near future. Current assets normally include cash,
marketable securities, accounts receivables, and inventories.

Current Ratio
0.3

0.25 0.28
0.2 0.24
0.22
Times

0.15 0.18
0.16
0.1 Current Ratio

0.05

0
2013 2014 2015 2016 2017
Year

Interpretation: In 2013 current asset was 0.22 times which means the company had 0.22 taka
current asset for 1 taka current liability. It increased to 0.24 times in 2014 and in next two years
it declined gradually. In 2017 current ratio increased sharply from 0.16 to 0.28 due to substantial
increase of current asset.
Quick Ratio: This ratio indicates the firm’s liquidity position as well. It actually refers to the
extent to which current liabilities are covered by those assets expected to be converted to cash in
the near future except inventories and prepaid.

Quick Ratio
0.3

0.25
0.27
0.2 0.24
0.21
Times

0.15
0.17
0.15 Quick Ratio
0.1

0.05

0
2013 2014 2015 2016 2017
Year

Interpretation: In 2013 Quick ratio of Grameenphone was 0.21times which means the company
had 0.21 taka quick asset for 1 taka current liability. In 2014 it increased to 0.24 times and in
next two years it declined. In 2017 Quick ratio increased from 0.15 times to 0.27 times due to
increase of quick asset.

Profitability Ratio: Profitability ratio is a measure of profitability, which is a way to measure a

company’s performance. It measures the efficiency with which a company turns its business
activities into profits.

Six ratios are discussed under Profitability ratio:

Ratio/Year 2013 2014 2015 2016 2017

ROE 47.21% 63.14% 64.35% 67.10% 78.08%
ROA 10.87% 15.15% 14.88% 17.26% 21.06%
Gross Profit 91.97% 90.66% 89.79% 90.72% 91.96%
Margin
Net Profit 15.22% 19.29% 18.81% 19.61% 21.35%
Margin
Operating 34.36% 35.94% 35.29% 36.19% 38.89%
Profit Margin
Operating 57.61% 54.72% 54.51% 43.51% 42.30%
Expense ratio
Return on Equity (ROE): Return on equity (ROE) is a measure of profitability that calculates
how many taka of profit a company generates with 100 taka of shareholders' equity.

ROE
90
80
70 78.08
60
Percentage

64.35 67.1
50 63.14
40 47.21
30 ROE
20
10
0
2013 2014 2015 2016 2017
Year

Interpretation: In 2013 ROE of Grameenphone was 47.21% which means the company
generates 47.21 taka from per 100 taka shareholders’ equity. In next four years ROE increased
smoothly. It is a good indicator of the company.

Return On Asset (ROA): Return on Asset (ROA) is a measure of profitability that calculates
how many taka of profit a company generates from 100 taka of total asset.

ROA
25

20
21.06
Percentage

15 17.26
15.15 14.88
10 ROA
10.87
5

0
2013 2014 2015 2016 2017
Year
Interpretation: In 2013 ROA of Grameenphone was 10.87% which means the company
generates 10.87 taka from per 100 taka total asset. ROE increased at a good rate in next four
years. It is a good indicator of the company.

Gross Profit Margin: Gross Profit Margin gives us the amount of Gross profit a firm is earning
per 100 taka of its sales.

Gross Profit Margin

92.5

92
91.97 91.96
91.5
Percentage

91
Gross Profit Margin
90.5 90.72
90.66
90

89.5 89.79
2012 2013 2014 2015 2016 2017 2018
Year

Interpretation: In 2013 Gross Profit Margin of Grameenphone was 91.97% which means it
generates gross profit of 91.97 taka from per 100 taka sales. In next two years it declined sharply
and next two years it increased sharply. Though it fluctuated over the years, gross profit margin
of the company is splendid.

Net Profit Margin: Net Profit Margin gives us the net profit that the business is earning from
per 100 taka of sales or revenue.
 Net Profit margin
25

20
21.35
19.29 18.81 19.61
Percentage

15
15.22
10 Net Profit margin

0
2012 2013 2014 2015 2016 2017 2018
Year

Interpretation: In 2013 Net Profit Margin was 15.22% which means company generates net
profit of 15.22 taka from per 100 taka revenue. In 2014 it increases and the following year it
decreases slightly. In 2016 and 2017 net profit margin increases smoothly.

Operating Profit Margin: The operating profit margin ratio indicates how much profit a
company makes after paying for variable costs of production such as wages, raw materials etc. It
is also expressed as a percentage of sales and then shows the efficiency of a company controlling
the costs and expenses associated with business operations.

Operating Profit Margin

39.5
39
38.5
38.89
38
Percentage

37.5
37
36.5
Operating Profit
36
36.19 Margin
35.5 35.94
35
34.5 35.29
34
34.36
2012 2013 2014 2015 2016 2017 2018
Year
Interpretation: In 2013 the Operating profit margin of Grameenphone was 34.36% which
means the company generates operating profit of 34.36 taka from per 100 sales or revenue. It
increased in next year and decreased in following year. In 2016 and 2017 it increased sharply.

Operating Expense Ratio: Operating Expense Ratio shows the efficiency of a company’s
management by comparing operating expense to net sales or revenue. The lower the operating
expense the better it is for company.

Operating Expense Ratio

70
60
50 57.61
54.72 54.51
Percentage

40
43.51 42.3
30 Operating Expense
20 Ratio

10
0
2012 2013 2014 2015 2016 2017 2018
Year

Interpretation: In 2013 Operating Expense Ratio was 57.61% which means the company
spends 57.61 taka from per 100 taka revenue or sales. In next four years operating expense ratio
declined gradually which is a good indicator for the company.