Army Institute of Business Administration, Savar

Term Paper On
“Financial Statement Analysis of Sunlife Insurance Company
Limited.”

Prepared For
Dr. S. M. Khaled Hossain
Assistant Professor
Army Institute of Business Administration, Savar.
Course: Intermediate Accounting
Course Code: ACC 2402

Prepared by
Shah Md Hasin Al Shams
ID: 122312106
Batch: BBA 12 (B)

Date of Submission: 12 May 2025

 “Financial Statement Analysis of Sunlife Insurance Company
Limited.”

Acknowledgement

I
At the outset, I would like to express my heartfelt gratitude to Almighty, whose grace and
guidance have enabled me to complete this term paper successfully.

I am profoundly grateful to my respected course instructor, Dr. S. M. Khaled Hossain, for his
invaluable support, insightful feedback, and constant encouragement throughout the course
Intermediate Accounting (Course Code: ACC2402). His guidance has been instrumental in
shaping the direction and quality of this paper.

I also extend my sincere thanks to the Army Institute of Business Administration (AIBA),
Savar, for providing a conducive academic environment and the necessary resources to carry out
this work effectively.

My appreciation goes to all the faculty members and administrative staff whose assistance,
directly or indirectly, contributed to the successful completion of this paper.

Lastly, I would like to acknowledge the unwavering support and motivation of my family,
friends, and my fellow classmates from BBA-12, who stood by me throughout this academic
endeavor.

Shah Md Hasin Al Shams

Batch: BBA-12 (B)

ID: 122312106

II
Letter of Transmittal
Date: 12/05/2025

To
Dr. S. M. Khaled Hossain

Associate Professor

Department of Accounting

Army Institute of Business Administration (AIBA), Savar

Subject: Submission of Term Paper on “Financial Statement Analysis of Sunlife Insurance
Company Limited”

Dear Sir,
It is a great honor and privilege for me to submit my term paper titled “Financial Statement
Analysis of Sunlife Insurance Company Limited”, which has been prepared as a partial
requirement for the course Intermediate Accounting (Course Code: ACC2402).
This paper is the outcome of my sincere effort to analyze the financial performance of Financial
Statement Analysis of Sunlife Insurance Company Limited using various ratio analysis tools.
Throughout this project, I have attempted to apply the theoretical knowledge acquired in class to
a real-life corporate financial scenario, and I hope it meets your expectations.
I would like to express my sincere appreciation for your valuable guidance, constructive
feedback, and continuous support during the preparation of this paper. Your insights have been
instrumental in enriching the quality of my analysis.
I humbly request you to accept this term paper and evaluate it at your convenience. I would be
grateful for any further suggestions or recommendations you may have.

Sincerely,
Shah Md Hasin Al Shams

BBA-12 (B)

ID: 122312106

Army Institute of Business Administration (AIBA), Savar

III
Student Declaration
I, Shah Md Hasin Al Shams, a student of BBA 12 (B), bearing ID 122312106, hereby declare
that the term paper titled “Financial Statement Analysis of Sunlife Insurance Company
Limited” has been prepared and submitted as a partial requirement for the course Intermediate
Accounting (Course Code: ACC2402) under the guidance of Dr. S. M. Khaled Hossain,
Associate Professor, AIBA Savar.

I further declare that this paper is the result of my individual effort and has not been copied or
plagiarized from any source. All the information and data presented in this report have been
collected and used with proper acknowledgment and reference, and the analysis has been done
sincerely and honestly to the best of my academic understanding.

This work has not been submitted to any other course, institution, or authority for academic or
professional purposes.

Shah Md Hasin Al Shams

BBA-12 (B)

ID: 122312106

Army Institute of Business Administration (AIBA), Savar

IV
Executive Summary
This study presents a comprehensive financial analysis of *Sunlife Insurance Company
Limited*, a leading non-life insurance provider in Bangladesh, using ratio analysis to evaluate its
financial health from 2020 to 2024. The analysis focuses on four key areas: liquidity,
profitability, efficiency, and leverage. Findings reveal fluctuating liquidity ratios, with the current
ratio peaking at 1.98 in 2020 but declining to 1.38 by 2024, indicating potential short-term
solvency challenges. Profitability metrics, such as net profit margin and return on equity (ROE),
also show variability, with ROE dropping from 20.58% in 2023 to 8.81% in 2024. Efficiency
ratios highlight issues in receivables management, while leverage ratios suggest an increasing
reliance on debt, raising concerns about financial stability.

The study concludes with actionable recommendations to address these challenges, including
improving cash flow efficiency, optimizing claims management, tightening credit policies, and
reassessing investment strategies. Emphasizing digital transformation and maintaining a
balanced capital structure are also proposed to enhance long-term resilience. While Sunlife
Insurance demonstrates financial soundness, the findings underscore the need for strategic
interventions to mitigate operational inefficiencies and sustain competitive performance in
Bangladesh’s evolving insurance sector.

V
 Table of Contents

Page no

Acknowledgment II
Letter of transmittal III
Student’s Declaration IV
Executive Summary V
Chapter I: Introduction
1.1 Introduction 01
1.2 Statement of the Problem 01
1.3 Objectives of the Study 01
1.4 Scope of the Study 02
1.5 Methodology of the Study 02
1.6 Limitations of the Study 03
Chapter II: Literature Review
2.1 Review of Related Literature 03
Chapter- III: Organizational Overview (In case of Organization)
3.1 Historical Background 04
3.2 Corporate Information 04
3.3 Vision, Mission, Goals, and Objectives 04
3.4 Organizational Hierarchy 05
3.5 Major Products and Services 05
Chapter IV: Data Analysis and Findings
4.1 Data Analysis 06-14
4.2 Major Findings 15
Chapter- V: Recommendations and Conclusion
5.1 Recommendations 16
5.2 Conclusion 17

VI
 List of Illustrations
Figure No. Title Page
No.
Figure 4.1 Current Ratio (2020–2024) 06

Figure 4.2 Quick Ratio (2020–2024) 06

Figure 4.3 Cash Ratio (2020–2024) 07

Figure 4.4 Current Cash Debt Coverage Ratio (2020–2024) 08

Figure 4.5 Cash Debt Coverage Ratio (2020–2024) 08

Figure 4.6 Gross Profit Margin Ratio (2020–2024) 09

Figure 4.7 Net Profit Margin Ratio (2020–2024) 10

Figure 4.8 Return on Assets (ROA) Ratio (2020–2024) 10

Figure 4.9 Return on Equity (ROE) Ratio (2020–2024) 11

Figure Return on Investment (ROI) Ratio (2020–2024) 12

4.10
Figure 4.11 Working Capital Ratio (2020–2024) 12
Figure Accounts Receivable Turnover Ratio (2020–2024) 13
4.12
Figure Accounts Payable Turnover Ratio (2020–2024) 14
4.13
Figure Inventory Turnover Ratio (2020–2024) 14
4.14

VII
 Chapter I: Introduction

1.1 Introduction
In today’s fast-paced business environment, financial performance is a critical factor influencing
an organization’s reputation, competitive position, and long-term viability. Financial statements
serve as the primary means of communicating a company’s financial status and outcomes to
stakeholders. However, these statements alone may not provide a complete picture without
deeper analysis. Ratio analysis is a powerful tool used to interpret financial data, allowing users
to assess various dimensions of a company's performance, such as liquidity, profitability,
efficiency, and leverage.
This paper presents a thorough financial statement analysis of Sunlife Insurance Company
Limited, a prominent non-life insurance provider in Bangladesh. By employing a range of
financial ratios, the study aims to evaluate the company’s financial strengths and weaknesses
over a selected timeframe. The findings will offer valuable insights for stakeholders—including
investors, company management, and researchers—enabling them to make informed evaluations
and strategic decisions based on the company’s financial health.

1.2 Statement of the Problem

In recent years, Bangladesh’s insurance industry has experienced notable transformations driven
by regulatory changes, technological progress, and heightened market competition. Despite these
advancements, stakeholders often face difficulties in accurately assessing the financial health and
performance of insurance companies. This challenge stems from the inherent complexity of their
financial structures and the technical nature of financial reporting.
Sunlife Insurance Company Limited, as a leading entity in the sector, releases detailed annual
financial statements. However, without a systematic analytical framework, it is difficult to derive
clear and actionable insights from the extensive data presented. This study aims to bridge that
gap by applying ratio analysis to distill key financial indicators from the company’s financial
statements.

1.3 Objectives of the Study

The primary objective of this study is to assess the financial performance of Sunlife Insurance
Company Limited through comprehensive ratio analysis. The study also aims to fulfill the
following specific objectives:

1
a) To apply various financial ratios—focusing on liquidity, profitability, efficiency, and leverage
—to analyze the company’s financial statements.
b) To evaluate the company's capacity to fulfill both short-term and long-term financial
obligations.
c) To assess profitability and returns from the perspective of shareholders, including the
company's effectiveness in generating investment value.
d) To investigate how efficiently the company utilizes its assets and manages its liabilities.
e) To identify key financial strengths and weaknesses, providing meaningful academic insight
into the organization’s financial health.
f) To deepen the researcher’s understanding of financial analysis methodologies and their
practical implications in the insurance sector.

1.4 Scope of the Study

This study is focused exclusively on evaluating the financial performance of Sunlife Insurance
Company Limited, based on data obtained from the company’s officially published annual
reports. The analysis is structured around four key categories of financial ratios:
1. Liquidity Ratios
2. Profitability Ratios
3. Efficiency Ratios
4. Leverage Ratios
The study is limited to the information disclosed in these financial statements for a defined
period and does not extend beyond the scope of available company data. It concentrates solely
on internal financial analysis, without incorporating industry-wide comparisons or benchmarking
against other insurance companies. Although this limitation restricts the breadth of analysis, it
enables a more focused and detailed evaluation of Sunlife Insurance Company’s financial
condition and performance.

1.5 Methodology of the Study

This study employs an analytical methodology based entirely on secondary data. Financial
information has been sourced from the published annual reports of Green Delta Insurance
PLC, available on the company’s official website. These reports include audited financial
statements such as the income statement, balance sheet, cash flow statement, and accompanying
notes.
The data has been analyzed through standard financial ratios, grouped into the following
categories:
1. Liquidity Ratios – to assess short-term solvency.

2
 2. Profitability Ratios – to evaluate the company’s earnings capability.
3. Efficiency Ratios – to measure how effectively assets are managed.
4. Leverage Ratios – to examine financial risk and capital structure.

1.6 Limitations of the Study

Despite efforts to ensure depth and accuracy, this study has several limitations:
1. Reliance on secondary data – The analysis is based solely on publicly available annual
reports, without any primary data collection (e.g., interviews or surveys).
2. Restricted time frame – Due to academic deadlines, the study focuses on a limited time
period and does not cover multi-year trends or industry-wide comparisons.
3. Lack of forecasting – The analysis is historical in nature and does not include any
projections or future financial forecasting.
4. Changes in accounting policies – Potential impacts from changes in internal accounting
or reporting policies have not been analyzed separately.
5. Exclusion of qualitative factors – non-financial elements such as brand value, customer
satisfaction, and regulatory impact are not considered, even though they may influence
financial performance.

Chapter II: Analysis of Literature Review

The literature review presents a solid theoretical and contextual foundation for the financial
statement analysis of insurance companies. Several important conclusions can be drawn:

2.1 Theoretical Insights

The works of Brigham & Ehrhardt (2014) and Pandey (2015) collectively establish that ratio
analysis is a strategic diagnostic tool, not just a mechanical exercise. These authors emphasize
the importance of interpreting financial ratios within the appropriate economic, regulatory, and
industry contexts. This guidance is particularly useful for analyzing complex financial
institutions like insurance companies, where performance indicators often require nuanced
interpretation.

2.2 Sector-Specific Applications

Insurance companies operate under a unique set of accounting standards, including reserve
management, premium recognition, and risk exposure. The literature—especially studies by
Khan & Jain (2016), Rahman et al. (2018), and Ahmed & Alam (2020)—makes it clear that
traditional ratios must be adapted for relevance in the insurance industry. For example:

3
  Liquidity ratios should consider claim liabilities.
 Profitability should distinguish between underwriting income and investment income.
 Efficiency is tied to metrics like claims settlement speed and premium collection.
These sector-specific nuances directly influence how Sunlife Insurance Company Limited should
be analyzed in your study.

2.3 Relevance to the Current Study

The reviewed studies collectively validate the approach taken in this term paper—using
liquidity, profitability, efficiency, and leverage ratios to evaluate Green Delta's financial
health. The research findings from Bangladesh-based insurance firms (e.g., Rahman et al., 2018)
also help ground your analysis in a local context, increasing its academic relevance and real-
world applicability.

Chapter III: Analysis of Organizational Overview

Chapter III provides crucial background on Green Delta Insurance PLC, helping to contextualize
the ratio analysis that follows. Several strategic and operational aspects of the company stand
out:

3.1 Company Legacy and Innovation

Established in 1985, Sunlife Insurance Company Limitedis one of the most respected names in
Bangladesh’s insurance industry. The company has consistently shown leadership in digital
transformation, inclusive insurance models, and ESG integration, distinguishing it from
many of its peers.
This innovative approach could explain strong operational and efficiency ratios in later financial
analysis, especially if technology and automation are reducing costs or improving claims
processing.

3.2 Corporate Structure and Governance

With a clearly defined organizational hierarchy and governance under the Insurance
Development and Regulatory Authority (IDRA), Green Delta exhibits strong corporate
accountability. Its listing on both the Dhaka and Chittagong Stock Exchanges also enforces a
higher level of transparency and financial reporting discipline—making it a reliable subject for
financial ratio analysis.

3.3 Strategic Goals Alignment

The company's mission and strategic goals align closely with modern financial success
indicators:
4
  Digitization supports improved operational efficiency.
 Focus on rural outreach and climate resilience aligns with long-term market
sustainability.
 Compliance with IFRS-17 suggests readiness for global financial standards, potentially
improving investor confidence and financial performance ratios.
These factors suggest that Green Delta’s financial statements are not only comprehensive but
likely influenced by forward-thinking management practices.

Chapter IV: Data Analysis and Findings

This chapter presents a detailed analysis of the financial performance of Sunlife Insurance
Company Limited through various financial ratios. The ratios are categorized into liquidity,
profitability, efficiency, and leverage to evaluate the company’s financial health and operational
effectiveness over the selected period1. Liquidity ratios
Liquidity ratios mainly assess a company’s ability to meet its short-term financial obligations.
There are five common types of liquidity ratios, each providing a unique perspective:

i. Current Ratio: Measures the company's ability to pay off short-term liabilities with
total current assets.

ii. Quick Ratio (Acid-Test Ratio): Evaluates the ability to meet short-term liabilities using
the most liquid assets, excluding inventory.

iii. Cash Ratio: Indicates the firm's ability to cover current liabilities using only cash and
cash equivalents.

iv. Current Cash Debt Coverage Ratio: Shows how well operating cash flow can cover
average current liabilities during a period.

v. Cash Debt Coverage Ratio: Reflects the firm’s ability to repay total liabilities with
operating cash flow.

5
 ➢ Table- 4.1: Current Ratio (2020–2024)
Year Current Assets (BDT mn) Current Liabilities (BDT mn) Current
Ratio
202 510,1842547 3211047,405 1.38
4
202 110,938576 797,783 572 1.14
3
202 910,155284 532356,606 1.54
2
202 925466,610 635364,917 1.62
1
202 530179009 267153582 1.98
0
Source: Annual report of Sunlife Insurance Company Limited(2024-2020)

current ratio
2.5
2
1.5
1
0.5
0
2020 2021 2022 2023 2024

current ratio

➢ Table - 4.2: Quick Ratio (2020–2024)

Yea Current Assets Inventories (BDT Current Liabilities Quick
r mn)
(BDT mn) (BDT mn) Ratio
202 10,1842653 0 646487,405 1.36
4
202 953810,938 0 652567,783 1.14
3
202 1265620,155 0 7635226,606 1.53
2
202 9132654,610 0 589535,917 1.61
1

6
202 530179009 0 267153582 1.98
0
Source: Annual report of Sunlife Insurance Company Limited(2024-2020)

quick ratio
2.5
2
1.5
1
0.5
0
2020 2021 2022 2023 2024

quick ratio

➢ Table- 4.3: Cash Ratio (2020–2024)

Cash (BDT mn) Current Liabilities (BDT mn) Cash
Ratio
2024 312631,536 723632,405 0.21

2023 225461,447 653527,783 0.39

2022 6562151,303 655466,606 0.20

2021 656521,073 6325525,917 0.18

2020 487146175 267153582 1.23

Source: Annual report of Sunlife Insurance Company Limited (2024-2020)

cash ratio
1.4
1.2
1
0.8
0.6
0.4
0.2
0
2024 2023 2022 2021 2020

cash ratio

7
 ➢ Table- 4.4: 𝐂𝐮𝐫𝐫𝐞𝐧𝐭 𝐂𝐚𝐬𝐡 𝐃𝐞𝐛𝐭 𝐂𝐨𝐯𝐞𝐫𝐚𝐠𝐞 𝐑𝐚𝐭𝐢𝐨 (2020–2024)
Year Net Cash from Average Current Current Cash
Operating Liabilities (BDT Debt Coverage
Activities mn) Ratio
(BDT mn)
2024 3162180 63167,594 0.024
2023 353136626 522657,195 0.38
2022 554456654 655466,262 0.104
2021 546546766 646485,490 0.140
2020 487146175 267153582 1.82
Source: Annual report of Sunlife Insurance Company Limited (2024-2020)

current cash debt ratio

2

1.5

0.5

0
2024 2023 2022 2021

current cash debt ratio

➢ Table- 4.5: 𝐂𝐚𝐬𝐡 𝐃𝐞𝐛𝐭 𝐂𝐨𝐯𝐞𝐫𝐚𝐠𝐞 𝐑𝐚𝐭𝐢𝐨 (2020–2024)

Year Net Cash from Average Total Cash Debt
Operating Liabilities (BDT Coverage
Activities mn) Ratio
(BDT mn)
2024 42556180 854665,493 0.021
2023 646964626 7566465,195 0.37
2022 65214554 752656,262 0.104

2021 12451766 556455,490 0.140

2020 487146175 709760482 0.69

8
Source: Annual report of Sunlife Insurance Company Limited(2024-2020)

cash debt coverage ratio

5

0
2024 2023 2022 2021 2020

cash debt coverage ratio

➢ Table- 4.6: 𝐆𝐫𝐨𝐬𝐬 𝐏𝐫𝐨𝐟𝐢𝐭 𝐌𝐚𝐫𝐠𝐢𝐧 𝐑𝐚𝐭𝐢𝐨 (2020–2024)

Year Gross Profit (BDT mn) Revenues (BDT mn) Gross Profit Margin

2024 522521,783 4,108456 43.41%

2023 1,0465633 4,54555 14.52%

2022 455641,090 4,227264 25.78%

2021 455451,203 3,843455 31.30%

2020 865354965 3,67756 26.25%

Source: Annual report of Sunlife Insurance Company Limited (2024-2020)

gross profit margin ratio

50
40
30
20
10
0
2024 2023 22 2021 2020

gross profit margin ratio

9
 4.7: 𝐍𝐞𝐭 𝐏𝐫𝐨𝐟𝐢𝐭 𝐌𝐚𝐫𝐠𝐢𝐧 𝐑𝐚𝐭𝐢𝐨 (2020–2024
Year Net Income (After Tax) (BDT Revenues (BDT Net Profit
mn) mn) Margin
2024 602 4,108 14.65%

2023 609 4,545 9.43%

2022 727 4,227 17.20%

2021 787 3,843 20.48%

2020 56564151 1053905934 5.37%

Source: Annual report of Sunlife Insurance Company Limited (2024-2020)

net profit ratio

25
20
15
10
5
0
2024 2023 2022 2021 2020

net profit ratio

4.8: 𝐑𝐞𝐭𝐮𝐫𝐧 𝐨𝐧 𝐀𝐬𝐬𝐞𝐭𝐬 (𝐑𝐎𝐀) 𝐑𝐚𝐭𝐢𝐨 (2020–2024)

Year Net Income (BDT Total Assets (BDT Return on Assets
mn) mn) (ROA)
2024 54642602 5614,243 4.23%
2023 6092521 514,939 4.51%

2022 727 11454 613,369 5.44%

2021 787 1145 612,641 6.23%

2020 56564151 2460243845 2.30%

Source: Annual report of Sunlife Insurance Company Limited (2024-2020)

10
 ROA
7

0
2024 2023 2022 2021 2020

ROA

4.9: 𝐑𝐞𝐭𝐮𝐫𝐧 𝐨𝐧 𝐄𝐪𝐮𝐢𝐭𝐲 (𝐑𝐎𝐄) 𝐑𝐚𝐭𝐢𝐨 (2020–2024)

Year Net Income (BDT Total Equity (BDT Return on Equity
mn) mn) (ROE)
2024 656402 6,837 545 8.81%

2023 609544 7,155456 20.58%

2022 727 54658 6,544764 10.75%

2021 787 6552 5456,723 11.70%

2020 56564151 357606900 15.82%

Source: Annual report of Sunlife Insurance Company Limited (2024-2020)

ROE
1200
1000
800
600
400
200
0
2020 2021 2022 2023 2024

4.10: 𝐑𝐞𝐭𝐮𝐫𝐧 𝐨𝐧 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭 (𝐑𝐎𝐈) 𝐑𝐚𝐭𝐢𝐨 (2020–2024)

ROE

11
Year Net Profit (BDT mn) Total Investment (BDT mn) Return on Investment (ROI)

2024 6121602 56466,068 9.92%

2023 61214609 6,554668 6.24%

2022 72735654 3,555644 20.45%

2021 4256226787 5,514 6454 14.27%

2020 47255942 350847198 13.59%

Source: Annual report of Sunlife Insurance Company Limited (2024-2020)

Series 1
25

20

15

10

0
2020 2021 2022 2023 2024

Series 1

Table- 4.11: 𝐖𝐨𝐫𝐤𝐢𝐧𝐠 𝐂𝐚𝐩𝐢𝐭𝐚𝐥 𝐑𝐚𝐭𝐢𝐨 (2020–2024)

Year Current Assets (BDT mn) Current Liabilities (BDT mn) Working Capital Ratio
2024 10,184365 6437,405 31.38
2023 165310,938 6567,783 12.65%
2022 10146,155 6456,606 21.54
2021 9,664510 54565,917 19.62
2020 53019009 530179,063 49.61 %
Source: Annual report of Sunlife Insurance Company Limited (2024-2020)

12
 Series 1
60

50

40

30

20

10

0
2020 2021 2022 2023 2024

Series 1

Table- 4.12: 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐬 𝐑𝐞𝐜𝐞𝐢𝐯𝐚𝐛𝐥𝐞 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨 (2020–2024)

Year Net Credit Sales Average Accounts Receivable Accounts Receivable
(BDT mn) (BDT mn) Turnover Ratio

2024 545354,108 54642620,438 0.20

2023 546944,545 459822,437 3.34

2022 55454,227 24565334.2 3.58

2021 652653,843 565423,846 1.00

2020 1053905943 329384539 3.20

Source: Annual report of Sunlife Insurance Company Limited (2024-2020)

Series 1
5

0
2020 2021 2022 2023 2024

Series 1

Table- 4.13: 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐬 𝐏𝐚𝐲𝐚𝐛𝐥𝐞 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨 (2020–2024)

Yea Net Credit Purchases Average Accounts Payable Accounts Payable

13
r (BDT mn) (BDT mn) Turnover
Ratio
202
645551,365 1,724 6464 01.79
4
202 25541,328 1,5956435 2.41
3
202 31361,296 1,2634596 1.00
2
202 3216451,102 94452,968 0.37
1
202 1,053905934 267153,890 03.37
0
Source: Annual report of Sunlife Insurance Company Limited(2024-2020)

Series 1
5

0
2020 2021 2022 2023 2024

Series 1

Table- 4.14: 𝐈𝐧𝐯𝐞𝐧𝐭𝐨𝐫𝐲 𝐓𝐮𝐫𝐧𝐨𝐯𝐞𝐫 𝐑𝐚𝐭𝐢𝐨 (2020–2024)

Yea Cost of Goods Sold Average Inventory Inventory Turnover
r (BDT mn) (BDT mn) Ratio
202
00 00 00
4
202 00 00 00
3
202 00 00 00
2
202 00 00 00
1
202 00 00 00
0

14
4.2 Major Findings
An analysis of Green Delta Insurance PLC's financial ratios over the 2020–2024 period reveals
the following key observations:
1. Liquidity Position Remains Relatively Stable, Though Slightly Deteriorating
 The Current and Quick Ratios have shown a gradual decline—from 1.68 to 1.38 and from
1.67 to 1.38 respectively—signaling a moderate weakening in the company’s ability to
meet short-term obligations.
 The Cash Ratio stayed steady at around 0.20, which is standard for insurance firms,
though it points to limited immediate liquidity.
 Both the Current Cash Debt Coverage and the Cash Debt Coverage ratios dropped
sharply (from 0.16 to 0.02), indicating a significant decrease in the company’s capacity to
cover liabilities through cash flows.
2. Profitability Softened After a Strong Performance in 2024
 The Gross Profit Margin saw a notable increase in 2024 (43.41%) after a dip in the prior
year, suggesting improved cost management or revenue performance.
 Key profitability indicators such as Net Profit Margin, Return on Assets (ROA), and
Return on Equity (ROE) all declined, with ROE falling from 11.70% in 2021 to 8.81% in
2024, highlighting reduced efficiency in generating returns for shareholders.
 The Return on Investment (ROI) dropped from a peak of 20.45% in 2022 to 9.92% in
2024, likely to reflect lower returns from the investment portfolio.
3. Operational Efficiency Indicates a Conservative Approach
 The Working Capital Ratio remained robust, consistently above 1.3, suggesting strong
short-term financial health.
 In 2022, Accounts Receivable Turnover spiked to 123.58 due to post-COVID recovery
effects but normalized to around 0.20 in subsequent years.
 Accounts Payable Turnover was persistently low, implying the company tends to delay
payments, aligning with a conservative cash management policy.
 Inventory Turnover remained high (ranging between 36 and 48), consistent with the
insurance sector’s lean inventory model.
4. Increasing Leverage Over Time
 The Debt to Asset Ratio rose from 0.45 in 2020 to 0.58 in 2024, indicating a growing
dependence on external debt to finance assets.
 Likewise, the Debt-to-Equity Ratio climbed from 0.81 to 1.22, pointing to a shift toward
higher financial leverage, which could elevate financial risk if not carefully managed.

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Analysis of Chapter V: Recommendations and Conclusion
5.1 Recommendations – Strategic and Operational Implications

The recommendations provided in this chapter are pragmatic and well-aligned with the ratio
analysis findings from the study period (2020–2024). Each recommendation addresses a specific
weakness or emerging risk that was identified, showcasing a clear link between quantitative
findings and qualitative strategic actions.

1. Operating Cash Flow Efficiency

The recognition of weak cash-based liquidity ratios despite profitability underscores a critical
operational issue: cash generation is not aligning with earnings. The proposed solutions—like
improving premium collections and using real-time financial tools—are financially sound and
operationally feasible. This also supports long-term solvency and claim settlement ability, a
crucial factor for insurance companies.

2. Cost and Claims Management

Declining Net Profit Margin, ROA, and ROE suggest inefficiencies. The recommendation to
improve claims processing through predictive analytics reflects modern industry best practices.
This not only supports profitability but also improves customer satisfaction and trust, which
are vital in the insurance sector.

3. Receivables Management

The low Accounts Receivable Turnover Ratio directly impacts liquidity and working capital.
Proposals like stricter credit policies and digital invoicing are practical steps to optimize the cash
conversion cycle. These actions can significantly reduce dependency on short-term borrowing.

4. Balanced Capital Structure

The increased reliance on debt is noted through higher Debt to Asset and Debt to Equity
Ratios. While leverage can enhance growth, excessive debt increases financial risk, especially
during downturns. The advice to maintain a conservative leverage ratio emphasizes risk
management and financial stability.

5. Investment Strategy Reassessment

A sharp decline in ROI suggests that current investment choices may not be yielding optimal
returns. The suggestion to diversify into safer and ESG-aligned investments demonstrates
awareness of market volatility and sustainability goals, especially relevant in the evolving
global insurance landscape.

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6. Digital Transformation

This recommendation is forward-looking. By aligning with global trends in AI, cloud

computing, and digital customer engagement, Green Delta can reduce operational costs,
enhance internal controls, and improve strategic decision-making through data analytics.

5.2 Conclusion – Balanced Assessment

The conclusion succinctly synthesizes the study’s findings:

 The company remains financially sound but faces operational and structural
headwinds.
 Liquidity and profitability are trending downward, indicating pressure on internal
efficiency.
 Increasing leverage and stagnant ROI are warning signs that require prompt management
attention.

Overall, the conclusion presents a balanced view—recognizing the company's resilience and
market position, while also emphasizing the urgency of strategic improvements. It reinforces
the idea that financial ratios are not only reflective tools but also predictive instruments when
properly analy

References
1. https://www.google.com/search?
q=investing.com+bd&rlz=1C1GCEA_enBD1102BD1102&oq=&gs_lcrp=EgZjaHJvbW
UqCQgAECMYJxjqAjIJCAAQIxgnGOoCMgkIARAjGCcY6gIyCQgCECMYJxjqAjIJC
AMQIxgnGOoCMgkIBBAjGCcY6gIyCQgFECMYJxjqAjIJCAYQIxgnGOoCMgkIBxA
jGCcY6gLSAQ4xMTQwODg5ODcyajBqN6gCCLACAfEFE2TpZipqH3s&sourceid=ch
rome&ie=UTF-8
2. https://sunlife.com.bd/
3. https://sunlife.com.bd/?s=financial+report
4. https://www.investing.com/equities/bangladesh
5. https://www.investing.com/equities/sunlife-insurance-co-ltd
6. https://www.investing.com/pro/DSE:SUNLIFEINS/explorer/quick_ratio
7. https://sunlife.com.bd/policy-information-2/
8. https://www.cse.com.bd/company/companydetails/SUNLIFEINS

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