‘’Financial Performance Analysis of

Prn RFL’’
Prepared By
Azizur Rahman Shihab
ID:192-11-6266
 Rational of the Report
The rational of the report is to measure the financial performance of PRAN-RFL Group comparing
the years of 2012-2015. The analysis of financial performance is a subjective measure of a
company’s capacity to use the assets of its essential method of business and to generate profit. The
term likewise used as a general measure of the overall financial health of a business over a given
period and used to compare similar businesses in the same sector or to compare industries or
sectors. The measurement of the performances will be comprises of two different ways, the initial
segment is trend analysis that incorporates horizontal and vertical analysis, and the subsequent part
is the ratio analysis which is an exceptionally prevalent analysis to analyze any financial
institutions.

Data Analysis: The study pursues exploratory research techniques that use both qualitative and
quantitative data. The quantitative data straightforwardly gathered from the Pran-RFL Group
annual report of the year 2012-2015. I used Microsoft word and excel to analyze the performance
with the assistance of various outlines.

Horizontal and Vertical Analysis of Trust Bank Limited

Comparative or horizontal analysis: A financial statement analysis technique represents changes
in the amounts of financial statement items over a period. Four years are used in this technique.
Horizontal analysis can be calculated as

Horizontal analysis = current year - Previous year/ previous year * 100

(Balance Sheet)

PRAN-RFL Group
Balance Sheet at 30 June (in Million $)
2012 2013 2014 2015
Cash 100 170 120 200
Accounts Receivable 200 280 160 320
Inventory 300 400 220 430
Other current Assets 400 450 300 470
Total current assets 1000 1300 800 1420
PPE(NET) 4000 3800 3700 3600
Total assets 5000 5100 4500 5020
Accounts payable 100 140 30 110
Notes payable 150 210 70 200
Other current liabilities 250 300 90 260
Total current liabilities 500 650 190 570
Long-term Debt 3200 2850 2550 2300
Total liabilities 3700 3500 2740 2870
Common Shares 1200 1400 1500 1800
Retained Earnings 100 200 260 350
Total Equity 1300 1600 1760 2150
Total liabilities and Equity 5000 5100 4500 5020

Horizontal Analysis of Balance sheet

PRAN-RFL Group
Horizontal Analysis of Balance sheet
2012 2013 2014 2015
Cash 70% 20% 100%
Accounts Receivable 40% -20% 60%
Inventory 0% -27% 43%
Other current Assets 13% -25% 18%
Total current assets 30% -20% 42%
PPE(NET) -5% -8% -10%
Total assets 2% -10% 0%
Accounts payable 40% -70% 10%
Notes payable 40% -53% 33%
Other current liabilities 20% -64% 4%
Total current liabilities 30% -62% 14%
Long-term Debt -11% -20% -28%
Total liabilities -5% -26% -22%
Common Shares 17% 25% 50%
Retained Earnings 100% 160% 250%
Total Equity 23% 35% 65%
Total liabilities and Equity 2% -10% 0%
 PRAN-RFL Group
Income Statement at 30 June (in Million $)
2012 2013 2014 2015
Revenue 900 1000 800 1100
Cost of Goods sold 400 500 450 650
Gross profit 500 500 350 450
Operating expenses 20 25 15 30
Depreciation 40 40 40 40
Earnings Before interest
440 435 295 380
and tax
Interest payable 160 142.5 127.5 115
Earnings Before tax 280 292.5 167.5 265
Taxes 84 87.75 50.25 79.5
Net Income 196 204.75 117.25 185.5
Dividends 146 104.75 57.25 95.5
Shares Outstanding
100 100 100 100
(millions)
Market Price ($/Share) 46 50 44 55

Horizontal Analysis of Income Statement

PRAN-RFL Group
Horizontal Analysis of Income Statement
2012 2013 2014 2015
Revenue 11% -11% 22%
Cost of Goods Sold 25% 13% 63%
Gross Profit 0% -30% -10%
Operating Expenses 25% -25% 50%
Depreciation 0% 0% 0%
Earnings Before Interest and
Tax -1% -33% -14%
Interest Payable -11% -20% -28%
Earnings Before tax 4% -40% -5%
Taxes 4% -40% -5%
Net Income 4% -40% -5%
Dividends -28% -61% -35%

Vertical analysis or common size analysis: taking sales to be equal to 100. All other items in the
income statement of a year are expressed as percentage of the sales.
In case of balance sheet, the total assets are made equal to 100 and all other assets are expressed
in relative percentages. The same is the case with liabilities with the total liabilities being 100.

PRAN-RFL Group
Balance Sheet at 30 June (in Million $)
2012 2013 2014 2015
Cash 100 170 120 200
Accounts Receivable 200 280 160 320
Inventory 300 400 220 430
Other current Assets 400 450 300 470
Total current assets 1000 1300 800 1420
PPE(NET) 4000 3800 3700 3600
Total assets 5000 5100 4500 5020
Accounts payable 100 140 30 110
Notes payable 150 210 70 200
Other current
250 300 90 260
liabilities
Total current
500 650 190 570
liabilities
Long-term Debt 3200 2850 2550 2300
Total liabilities 3700 3500 2740 2870
Common Shares 1200 1400 1500 1800
Retained Earnings 100 200 260 350
Total Equity 1300 1600 1760 2150
Total liabilities and
5000 5100 4500 5020
Equity

PRAN-RFL Group
Vertical Analysis for Balance Sheet
2012 2013 2014 2015
Cash 2% 3% 3% 4%
Accounts Receivable 4% 5% 4% 6%
Inventory 6% 8% 5% 9%
Other current Assets 8% 9% 7% 9%
Total current assets 20% 25% 18% 28%
PPE(NET) 80% 75% 82% 72%
Total assets 100% 100% 100% 100%
Accounts payable 2% 3% 1% 2%
Notes payable 3% 4% 2% 4%
Other current liabilities 5% 6% 2% 5%
Total current liabilities 10% 13% 4% 11%
Long-term Debt 64% 56% 57% 46%
Total liabilities 74% 69% 61% 57%
Common Shares 24% 27% 33% 36%
Retained Earnings 2% 4% 6% 7%
Total Equity 26% 31% 39% 43%
Total liabilities and Equity 100% 100% 100% 100%
PRAN-RFL Group
Income Statement at 30 June (in Million $)
2012 2013 2014 2015
Revenue 900 1000 800 1100
Cost of Goods sold 400 500 450 650
Gross profit 500 500 350 450
Operating
20 25 15 30
expenses
Depreciation 40 40 40 40
Earnings Before
440 435 295 380
interest and tax
Interest payable 160 142.5 127.5 115
Earnings Before
280 292.5 167.5 265
tax
Taxes 84 87.75 50.25 79.5
Net Income 196 204.75 117.25 185.5
Dividends 146 104.75 57.25 95.5
Shares Outstanding
100 100 100 100
(millions)
Market Price
46 50 44 55
($/Share)

PRAN-RFL Group
Vertical Analysis for Balance Sheet
2012 2013 2014 2015
Revenue 100% 100% 100% 100%
Cost of Goods Sold 44% 50% 56% 59%
Gross Profit 56% 50% 44% 41%
Operating Expenses 2% 3% 2% 3%
Depreciation 4% 4% 5% 4%
Earnings Before Interest and
Tax 49% 44% 37% 35%
Interest Payable 18% 14% 16% 10%
Earnings Before tax 31% 29% 21% 24%
Taxes 9% 9% 6% 7%
Net Income 22% 20% 15% 17%
Dividends 16% 10% 7% 9%
 Trend Analysis

Horizontal Analysis of Balance

sheet
60%
40%
20%
0%
-20% 2012 2013 2014 2015
-40%
-60%
-80%

Total current assets Total assets

Total current liabilities Total liabilities
Total liabilities and Equity

This statement shows us the percentage of increase and decease of four years performance. The
items of the statement take from balance sheet. First, analyze the horizontal of all the items of
balance sheet. Therefore, the graph is the horizontal analysis of balance sheet.

Total asset shows in the statement that it was 2% in 2013. After that, it was declining from year to
year. In 2015, it has a lower value 0%

Total current liabilities shows that it was 30% in 2012. It has a lowest value 14% in 2015. However,
it was decreasing from 2013 to 2015. In 2014, it was -62%, which is lowest among the four years.

Total liabilities was 5% in 2013. It grew up by -26% and -22% in 2014 and 2015 respectively. It
has a negative value, which has a bad impact on company’s performance. it was decreasing year
by year. Decreasing liabilities undoubtedly a good indication for the company.

Total equity was 2% in 2013. It slightly Decreased at -10% in 2014. However, we can say that it
was decreasing. In 2015, it was 0%, which is not good enough for a company.
 Horizontal Analysis of Income
Statement
Revenue Operating Expenses Earnings Before tax Net Income

60%
40%
20%
0%
-20% 2012 2013 2014 2015

-40%
-60%

This graph shows us the percentage of increase and decrease of 4 years performance. The items of
the graph take from income statement. First, analyze the horizontal of all the items of income
statement. In horizontal analysis, we need for comparing each year with its previous year.
Therefore, this graph is the trend analysis of income statement.

This graph shows us that net income was 4% in 2013 and it is the highest net income among the
four years. After that, it was fluctuating from 2013 to 2015. In 2014, it was -40% and it was by -
5% in the next year. In 2015 it was again decreasing up by -5%. In 2014, it has a lowest value from
another year

Revenue shows that it was highest value 11% in 2013. In 2014 it decreased by 11% respectively.
It increased at 22% in 2015 but in 2014, it fell at -11%, which is low income of the company at
this year than other years.

Total operating expense shows that it was 25% in 2013. In 2015, it increased by 50%. However,
it has a negative value -25% in 2014, which is not good for the company.

Total profit before taxes shows in the graph that it has a highest value 4% in 2013. However, it
was decreasing from year to year. In 2014, it was lowest value at -40%.
 Vertical Analysis for Balance Sheet
2012 2013 2014 2015

120%

100%

80%

60%

40%

20%

0%
Total current Total assets Total current Total liabilities Total Equity
assets liabilities

This graph shows the result of vertical analysis. Items selected from the balance sheet. Inn vertical
analysis (balance sheet) all the items divided by total assets. Here total asset is 100%.

So total assets in every year is 100%. There is no increase and decrease.

Total current assets shows in the graph that it was highest value in 2015. After that it was gradually
decreasing at 20%, 25%, 18% respectively from 2012-2015.

Total current liabilities shows in the graph that it has a highest value 13% among the four years in
2013. However, in 2014, it declined by 4%. It again increased by 11% in 2015.

Total liabilities shows in the graph that it was increasing every year except 2015, which may
indicate a good sign for the company. 2012,2013,2014, 2015, it was 74%, 69%, 61%, 57%,
respectively.

Total equity shows in the graph that it has a highest equity 43% in 2015. It fell down in 2012 at
26%, in the next year it increased at 31%. However, in 2013 and 2014, it increased by 31% and
38% respectively. In 2012, it has a lowest equity, which is not good for the company.
 Vertical Analysis of Income Statement
Revenue Operating Expenses Earnings Before tax Net Income

120%

100%

80%

60%

40%

20%

0%
2012 2013 2014 2015

This graph the result of vertical analysis. Items selected from the income statement. In vertical
analysis all the items divided by interest income. Here Revenue income is the 100%.

Total operating Expenses shows in the graph that its percentage are increasing year by year,
2012,2013,2014,2015 respectively 2%,3%,2%,3%.

Total operating expense shows in the graph that it was increasing simultaneously from 2014 to
2016. It declined in 2017 and 2018. It was lowest at 21.72% in 2018.

Total Earning before tax shows in the graph that it Decreased at 31%, 29%, 21%, and 24%
respectively from 2012 to 2015. However, it increased at 31% in 2012.

Net income shows in the graph that it was decreased from 2012 to 2015 at 22%, 20%, 15%
respectively. However, it increased in 2015 at 17%. It earned highest net income in 2012 and
lowest in 2014