E-valy is an e-commerce site which will be capable of providing every kind of goods and products from

every sector to every consumer located in Bangladesh.

Evaly, the e-commerce platform known for selling products at large discounts, has recently come under
scrutiny for large amount of liabilities much higher than its assets can afford. In light of discussion
between short term profit vs long term value, your task is to present the current financial condition of
Evaly based on available information. Also you have to suggest a way forward for Evaly to overcome the
challenges it is facing currently.

Handwritten assignment. page limit: 4 pages of notebook.

Evaly Operator of an eCommerce platform intended to provide food, grocery, classifieds,

accounting, and inventory solutions. The company's platform provides a wide range of food,
grocery, electronics, clothing, and other similar products, enabling customers to access all
products on one platform.
On condition of anonymity a victim, said that the major problem of Evaly is that they do not keep
delivery time fixed. There are also questions about quality of products. It's been almost three months
since I ordered and haven't received the product yet. There is no cooperation from the authorities.

E-commerce company Evaly's ever-increasing liabilities caused by a reportedly flawed business

strategy – unusually high discounts in products and cashback offers incurring huge losses – has
exposed it to the risk of collapse, observes the Bangladesh Bank.

According to an inspection report of the central bank, Evaly's liabilities to customers and
merchants have risen to Tk403.80 crore, while its current asset is only Tk65.17 crore.

The report says till 14 March this year, Evaly did not deliver products against a cumulative sum
of Tk213.94 crore in advance payments from customers. Moreover, the company owes Tk189.85
crore to the merchants from whom it bought products.

In other words, with all its current assets, Evaly can repay only 16.14% of its total liabilities or
only one-third of the liabilities to the customers.

"Both current liabilities and losses of Evaly are steadily increasing and the company is caught in
a vicious cycle of current liabilities and losses. The constant rise in liabilities puts the
organisation at risk of collapsing," the Bangladesh Bank says in the report – made at the request
of the Ministry of Commerce.

"The company has been making losses since its inception and the amount of losses has been
increasing over time. To repay previous liabilities and cover up losses, Evaly is raising money
from customers by attracting them through various lucrative offers – such as 'Cyclone',
'Earthquake', etc – and selling products at large discounts or at prices below the market costs,"
says the Bangladesh Bank.

The gap between the company's assets and liabilities has grown abnormally and it is constantly
making arrangements to pay off old liabilities by creating new liabilities – increasing liabilities to
customers and merchants.

The company is constantly coming up with higher discounts in products and other offers to
attract new customers, widening the gap between its assets and liabilities.

In the period between 1 July 2020 and 14 March 2021, the total revenue of Evaly stood at Tk28.54 crore.
During this time, the company's sales expenditure was Tk207 crore.