Rural Power Company Limited

Letter of Transmittal

Date: October 20, 2014

Md. Sayeem - Bin - Hafiz

Lecturer
Department of Finance
Bangladesh University of Business & Technology (BUBT)

Subject: Submission of Internship Report.

Dear Sir,
With great gratification I am submitting my internship report on Financial Performance Analysis of
Rural Power Company Limited that you have assigned me as an essential requirement of the Internship
program. It is really an enormous prospect for me to collect vast information and grasp the subject matter
in an appropriate way. I have found the study is quite interesting, beneficial and insightful. I have put my
best effort to prepare an effective and creditable report.
I honestly, not only anticipate that my analysis will assist to provide a clear idea about the overall
Financial condition of the Rural Power company Ltd. ,but also optimistic enough to believe that you will
find this reports worth for all the labor I have put in it. I appreciate your involvement in this highly
enriching project. I sincerely hope that you would consider my effort and find the report satisfactory.

Yours Sincerely,
..
Humaira Sarah
ID No-10111101088
BBA 23rd Intake
Major in Finance
BBA Program
Bangladesh University of Business & Technology (BUBT)

Rural Power Company Limited

Declaration
I, Humaira Sarah , hereby declare that the report of internship Program titled Financial Performance
Analysis of Rural Power Company Limited is uniquely prepared by me after the completion of three
months work at Uttara Model Town Head office of Rural Power Company Limited.

I confirm that, the report is only prepared for my academic requirement not for other purpose. It might me
with the interest of opposite party of the corporation. I also assure that this report is not submitted
anywhere of Bangladesh before me.

...............................
Humaira Sarah
ID: 10111101088
BBA 23rd Intake
Major in Finance
BBA Program
Bangladesh University of Business & Technology (BUBT)

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Rural Power Company Limited

Certificate of Supervisor
This is to certify that Humaira Sarah, a student of BBA,ID No. 10111101088 has successfully completed
her Internship program and submitted the report entitled Financial Performance Analysis of Rural Power
Company Limited as a partial fulfillment of the requirement of Bachelor of Business & Technology
(BUBT).

She has done her job according to my supervision and guidance. She has tried her best to do this report
successfully think this program will help her to build up her future career.

I wish her success.

Md. Sayeem - Bin - Hafiz

Lecturer
Department of Finance
Bangladesh University of Business & Technology (BUBT)

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Rural Power Company Limited

Acknowledgement
In order to achieve professional experience to apply theoretical knowledge into practical field, I would
like Rural Power Company Limited as a student of BBA for internship program. I have presented this
report after finishing my working program. First of all, I would like to express my deep gratitude to the
almighty Allah for fruitfully preparing this internship report. I express my deep sense of gratitude and
heartily respect to my honorable Supervisor Md. Sayeem - Bin - Hafiz, Lecturer in Banking, Department
of Finance, Bangladesh University of Business & Technology (BUBT). I have received all valuable
suggestions and instructions from my honorable teacher (Supervisor) for completing this Internship
Report.
My pleasure turns blooming to offer thanks to Mr. Proloy Kumar Shaha, General Manager (Finance)
Rural Power Company Limited., Uttara Model Town Head Office for allowing me to show my
practicability in an organizational area under his supervision. I am very grateful to Brig. Gen. Moin Uddin
,Chairman of RPCL for allowing me to participate different educative task in RPCL.

I like to convey something more than thanks and usual gratitude to Shafiqul Islam, Junior Asst. Manager
(Finance) of Rural Power Company Limited providing all information relevant to my study. His
delightful co-operation, benevolent patronage, intention to make other knowledgeable helped me to
prepare this report.

And last but not the least; I would like to thank all the personnel working at Rural Power Company
Limited., Uttara Model Town. They made the environment congenial and favorable for me to understand
the task. Without their assistance and co-operation, this report might not have seen the light of day.

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Rural Power Company Limited

Table of Content
Subject
Abbreviation
Executive Summary

Subject
Chapter-1:Introduction

Page No.
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Page No.
1

1.0. Introduction
1.1 Background of Study
1.2. Significance of the Report
1.3 Scope of the Report
1.4 Objectives of the Report
1.5 Methodology
1.5 .1 Research Design
1.5.2 Description and Source of Data
1.5.3 Instruments Used For Analysis

2
2
2
2
3
3
3
3
4

Ratio Analysis
Trend Analysis
1.6 Limitations of the Study

4
4
4

Chapter-2:Company Profile

2.1 History of the Organization

2.2 Vision of the organization
2.3 Mission of the organization
2.4 Objectives of the organization
2.5 Structure of RPCL
2.6 Board of Directors
2.7 Corporate Management
2.8 Corporate Information

6
6
6
6
7
8
8
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Chapter-3:Theoretical Aspects

3.1. Financial Performance Analysis

3.2. Balance sheet
3.3. Income Statement
3.4. Ratio Analysis
3.5. Significance of using ratios
3.6 Types of ratio comparisons
3.7 Cautions about Ratio Analysis
3.8 Diagram of Financial Ratios
3.8.1 Analyzing Liquidity
3.8.2 Analyzing Activity
3.8.3 Analyzing Debt
3.8.4.ANALYZING Profitability

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10
10
11
11
11
12
12
13
13
14
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Rural Power Company Limited

Chapter-4:Financial Performance Analysis of Rural Power Company Limited

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4.1 Analyzing Liquidity Ratios

4.2 Analyzing Debt Ratios
4.3 Profitability Ratios
4.4 Analyzing Activity Ratio
4.5 Analyzing Market Ratio

18
21
23
27
30

Chapter-5:Findings,Conclusion and Recommendations

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5.1 Major Findings

5.2 Conclusion
5.3 Recommendation
Bibliography
Appendix

32
33
34
35
36

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Rural Power Company Limited

Table of Figures
Serial
Figure 1
Figure 2
Figure 3
Figure 4
Figure 5
Figure 6
Figure 7
Figure 8
Figure 9
Figure 10
Figure 11
Figure 12
Figure 13
Figure 14

Particular
Groups of Financial Ratio
Current Ratio
Net Working Capital
Acid Test Ratio
Debt Ratio
Debt-Equity Ratio
Gross Prfit Margin
Net Profit Margin
Return on Equity
Cost to Income Ratio
Total Asset turnover
Inventory turnover
Average Collection Period
Earnings Per Share

Page No
12
18
19
20
21
22
23
24
25
26
27
28
29
30

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Rural Power Company Limited

List of Abbreviation
PBS Polli Bidyut Samity
REB-Rural electrification Board
MW-Mega Watt
EBIT-Earning Before Interest & Tax
ROE-Return on Equity
COGS-Cost of goods sold
ROA-Return on Asset
P/E ratio-Price Earnings Ratio
P&L-profit & Loss.

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Rural Power Company Limited

Executive Summery
Financial statements provide summarized view of the financial position and operation of the company.
Many parties are interested in financial statement analysis to know about the financial position of the
firm. The main objective of the study is to analyze the financial performance of Rural Power Company
Limited. The study is conducted using ratio analysis. Ratio analysis is the systematic use of ratios to
interpret the financial statements so that the strengths and weaknesses of a firm are determined.Financial
Performance Analysis of Rural Power Company Limited .This study consists of analysis of financial
performance on the basis of financial ratios. To make this report I had to face some limitation which I
include in this report. My study covers the historical background of RPCL. .It tells about its history,
management, vision, mission and objectives.
The study will reveal the financial performance of the firm which enables the management to know their
financial strengths of the firm to make their best use. This Study will also help to spot out financial
weaknesses of the firm if any and to take suitable corrective actions.
The other objectives of this study are also finding out liquidity position, profitability, efficiency of
the Rural Power Co. Ltd. Some recommendations have been suggested based on the findings part of the
report facing current problems.
For this purpose balance sheet of recent five years is taken and analyzed with the help of various financial
ratios. Based on this analysis, observations, given personnel will be taking corrective actions to improve
the performance.
The result of the study shows, that there is an increasing trend in current ratio of the firm. RPCL has
increased its leverage position by increasing its debt ratio from 6.8% in 2009 to 11.9% in 2013. The ROE
has decreased from 11.27% in 2009 to 3.36% in 2013.Cost to Income ratio has increased from 63% in
2009 to 81% in 2013.Therefore; RPCL should reduce the liquidity position by converting the current
asset into long term profitable projects to increase profit. The company should improve its credit policy
for the better management of credit and to earn more profit. The company should increase its ROE by
reducing liquidity position and reducing expenses.

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