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Growth Rate Analysis of Bangladesh Building Systems Ltd

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Term paper
Section: 02
Course Code: FIN101
Course Title: Principles of Finance
Semester: Summer 2023

Submitted to:

Dr. Mahnoor Sattar

Assistant Professor
Department of Business Administration,
East West University

Submitted by:
Name ID
Shipra Shafiq Ripti 2021-1-10-231
Shafayetul Islam 2021-2-10-006
Borhan Uddin 2021-2-10-012
Sumaiya Chowdhury 2021-2-10-281
Md Eyakub Ali Ebad 2021-3-10-036

Date of Submission: 3rd September, 2023

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LETTER OF TRANSMITTAL

07 May, 2023
Dr. Mahnoor Sattar
Assistant Professor
Department of Business Administration
East West University, Dhaka, Bangladesh
Subject: Submission of Term Paper on “Growth Rate Analysis of Bangladesh Building
Systems Ltd.”
Madam,
This is to inform you that we have completed the Term paper on Growth Rate Analysis of
Bangladesh Building Systems Ltd for the course purpose. The report focuses on the growth
rate analysis of its performance from 2017 to 2021.
In writing this case, we have followed your instructions for report writing to present our
views and understanding most efficiently. However, we will be glad to clarify any
discrepancies that may arise.
Sincerely,
Shipra Shafiq Ripti
Shafayetul Islam
Borhan Uddin
Sumaiya Chowdhury
Md Eyakub Ali Ebad
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ACKNOWLEDGEMENT

Any significant job, such as the study on 'Growth Rate Analysis of Bangladesh Building
Systems Ltd,' must be credited to a large number of persons. We owe thanks to those who
assisted us without regard for their ability to complete the report successfully. Certainly,
we should recognize the work of our individual course instructor, Dr. Mahnoor Sattar,
whose instruction has been entrenched in our minds. We are quite thankful to our most
honorable course instructor, Dr. Mahnoor Sattar, for providing us with significant and
helpful recommendations and guidance, as well as for being easily accessible from any
source.
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Table of Contents
1.1 INTRODUCTION ......................................................................................................... 6
1.2OBJECTIVE OF THE STUDY .................................................................................. 6
1.3METHODOLOGY ...................................................................................................... 7
2.1 Company Overview ....................................................................................................... 8
VISION-MISSION .......................................................................................................... 8
CORPORATE ROLE....................................................................................................... 8
3.1 Growth Rate Analysis: ................................................................................................ 10
3.1.1Total Asset Growth ................................................................................................ 10
3.1.2 Total Current Liabilities Growth ........................................................................... 10
3.1.3 Total Liabilities Growth ........................................................................................ 11
3.1.4 Total Equity Growth ............................................................................................. 11
3.1.5 Total Sales Growth ................................................................................................ 12
3.1.6 Total Net Income Growth ..................................................................................... 12
3.1.7 Growth Rate Table ................................................................................................ 13
3.2 Graphs .......................................................................................................................... 13
3.2.1 Asset Growth ......................................................................................................... 13
3.2.2 Total Current Liabilities Growth ........................................................................... 14
3.2.3 Total Liabilities Growth ........................................................................................ 15
3.2.4 Equity Growth ....................................................................................................... 16
3.2.5 Sales Growth ......................................................................................................... 17
3.2.6 Net Income Growth ............................................................................................... 18
4.1 CONCLUSION ........................................................................................................... 19
5.1 REFERENCE. ............................................................................................................. 20
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1.1 INTRODUCTION

Bangladesh Building Systems Ltd is a leading steel structure fabrication and erection
company in Bangladesh. They specialize in designing and constructing steel structures for
residential, industrial, and commercial purposes. They provide services such as structural
steel fabrication, steel frame erection, steel frame design, metal buildings, and metal
building components. Their team of experienced professionals offers a wide range of
services to meet the individual needs of their clients. They commit to quality, safety, and
customer satisfaction. The company’s long-term strategy is to develop, acquire, or invest
in product lines or businesses that have the potential to increase the company’s earnings
per share over time. Bangladesh Building Systems specializes in producing pre-engineered
steel buildings. The company can manufacture up to 15,000 metric tons of steel building
products annually, along with installing 4 million square feet of floor area. Pre-engineered
steel buildings are commonly chosen for various purposes such as factories, warehouses,
workshops, aircraft hangars, offices, commercial showrooms, distribution centers,
supermarkets, restaurants, and residential structures. BBS has a large network of
dealerships and services across Bangladesh, providing customers with easy access to their
products.

1.2OBJECTIVE OF THE STUDY

A growth rate analysis is used here to evaluate and project the growth rates of a company,
identify factors that contribute to growth or decline, and inform decisions about future
investments and strategies. The focus of the research is on the turnaround time (2017-
2021). Here are the objectives of the study:

● Evaluating past and projected growth rates of this company

● Identifying factors that have contributed to growth or decline

● Assessing opportunities for expansion and market competitiveness

● Evaluating the sustainability of this business model

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● Informing decisions about product development or diversification Identifying

potential risks or limitations that may impact future growth

Overall, a growth rate analysis can help businesses make informed decisions that promote
growth and long-term success, also it shows efficient allocation of resources toward areas
with high growth potential.

1.3METHODOLOGY

Since we were limited in our ability to use primary data for this research, we placed a
greater emphasis on secondary data sources. We employed a combination of direct and
indirect sources to accomplish our analysis. We have used the following techniques:

Primary data collection technique: We didn't put as much emphasis on gathering the
main data because we had to conduct a growth analysis on the Bangladesh Building
System.

Method for secondary data: Our first objective was to gather every financial statement
from the BBS website, which is located at www.bbspeb.com.
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2.1 Company Overview

Bangladesh Building Systems Ltd. (BBSL) is a leading manufacturer of quality Pre-

Engineered Steel buildings, especially in the industrial & commercial sectors in
Bangladesh. The company’s steel construction products enhance the safety and durability
of the structures in which they are installed and can save time and labor costs. Pre-
engineered steel construction products contribute to structural integrity and resistance to
seismic, wind, and other forces. We provide customers with full steel structures such as
factories, warehouses, high-rise buildings, heavy industry, shopping malls, exhibition
centers, and infrastructure (railway stations, airports).

VISION-MISSION

"A winning industrial Leader Creating Superior Values for Business and community"
Winning the confidence and trust of markets and stakeholders is inherently built in nature.
Industrial leadership and competence take us beyond manufacturing and into other
industries. Business and Community are joint beneficiaries of our superior value creation
towards mutual posterity.

CORPORATE ROLE

BBSL ripens and ropes the vision and strategic alleyway of its business through common
strategic initiatives and its functions of Accounts and Finance, Engineering,
Implementation, Administration and Human Resources, Information Technology,
Corporate Communications, Legal and Corporate Affairs, and share department and
Factory management as well. Its aims are closely drawn to achieve the following strategic
ends:

(a) A pledge to new product development through the use of state-of-the-art technology
and the consolidation of the IT environment
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(b) Upkeep of the premier quality reassurance standards, replicated in a range of

transnational quality certification

(c) The persistent expansion and development of transnational markets, while sustaining
governance in the home of Bangladesh

d) Investment in training and career development for employees;

(e) The sales and Marketing employees are further to an Emerging Markets & South Asia
promotion and Ma firmly established as the cornerstone of performance with integrity
value;

(f) Key managers of the company went to different professional institutions and rigorous
training and a workshop named "Quality First".
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3.1 Growth Rate Analysis:

In this article, we examined the growth rate of Bangladesh Building Systems Ltd. This
analysis will last five years (2017-2021).

3.1.1Total Asset Growth

• 2017= {(3832-3100)/3100} *100

= 23.32%
• 2018= {(3,679-3,823)/3,823} *100
= -3.77%
• 2019= {(4,195-3,679)/ 3,679} *100
= 14.02%
• 2020= {(4,549-4,195)/ 4,195} *100
= 8.43%
• 2021= {(4,459-4,549)/ 4,549} *100
= -1.97%

3.1.2 Total Current Liabilities Growth

o 2018= {(1,357-1,691)/ 1,691} *100

= -19.75%
o 2019= {(1,482-1,357)/ 1,357} *100
= 9.21%
o 2020= {(1,585-1482)/1482} *100
= 6.95%
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o 2021= {(1,502-1585)/1585} *100

= -5.24%

3.1.3 Total Liabilities Growth

o 2017= {(1964-1544)/1544} *100

= 27.20%
o 2018= {(1631-1964)/1964} *100
= -16.95%
o 2019= {(1,867-1631)/1631} *100
= 14.47%
o 2020= {(2112-18670/1867} *100
= 13.12%
o 2021= {(2136-2112)/2112} *100
= 1.13%

3.1.4 Total Equity Growth

o 2017 = {( 1860 - 2489) / 2489 } * 100

= - 25.27%
o 2018 = {( 2048 - 1860) / 1860 } * 100
= 10.10%
o 2019 = {( 2328 - 2048) / 2048 } * 100
= 13.67%
o 2020 = {( 2436 - 2328) / 2328 } * 100
= 4.63%
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o 2021 = {( 2323 - 2436) / 2436 } * 100

= -4.63%

3.1.5 Total Sales Growth

• 2017 = {( 2489 - 2346) / 2346 } * 100

= 5.29 %
• 2018 = {( 1850 - 2489) / 2489 } * 100
= - 25.68 %
• 2019 = {( 1631 - 1850) / 1850 } * 100
= - 11.83 %
• 2020 = {( 876 - 1631) / 1631 } * 100
= - 46.29 %
• 2021 = {( 936 - 876) / 876 } * 100
= 6.84 %

3.1.6 Total Net Income Growth

o 2017 = {( 340- 250) / 250 } * 100

= 36%
o 2018 = {( 247 - 340) / 340 } * 100
= - 27.35 %
o 2019 = {( 279 - 247) / 247 } * 100
= 12.95 %
o 2020 = {( 109 - 279) / 279 } * 100
= - 60.93 %
o 2021 = {( -36 - 109) / 109 } * 100
= - 133.02 %
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3.1.7 Growth Rate Table

This table of data shows the growth rate (using the growth formula) of
Total Assets, Current liabilities, liabilities, Equity, Sales, and Net Income
for five years.

Year Total Asset Total Total Equity Sales Net

Current Liabilities Income
Liabilities
2017 23.32% 27.20% -25.03% 5.29% 36%
2018 -3.77% -19.75% -16.95% 10.10% -25.68% -27.35%
2019 13.98% 9.21% 14.47% 13.68% -11.83% 12.95%
2020 8.49% 6.95% 13.12% 4.63% -46.29% -60.93%
2021 -1.97% -5.24% 1.13% -4.63% 6.84% -133.02%

Table 1: Growth Rate

3.2 Graphs

3.2.1 Asset Growth

TOTAL ASSET
25.00%

20.00%

15.00%

10.00%

5.00%

0.00%

-5.00%

-10.00%
2017 2018 2019 2020 2021
Total Asset 23.32% -3.77% 13.98% 8.49% -1.97%

Figure 1 : Asset Growth of "Bangladesh Building Systems Ltd"

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Interpretation: The graph shows the growth of total assets for each year from 2016 to 2021.
The Total Assets Growth has been showing a mixed trend over the years. In 2017, the
company experienced a significant increase in total assets growth (23.32%) compared to
the previous year. In 2018, the asset decreased and it went to the negative(-3.77%).
However, in 2019, there was an increase in total assets growth to 10.21%, which was still
lower compared to 2017. In 2020, the company experienced a less decrease in total assets
growth of 8.49% compared to the previous year. In 2021, there was a further decrease of -
1.97% in total assets growth compared to the previous year. Therefore, the trend in Total
Assets Growth can be said to be mixed, indicating that the company has experienced both
increases and decreases in its total assets growth over the years.

3.2.2 Total Current Liabilities Growth

Figure 2 Total Current Liabilities Growth of "Bangladesh Building Systems Ltd"

Interpretation: The graph shows that the Total Current Liabilities Growth has changed
greatly over the years. It climbed by 9% in 2019 compared to the previous year, and it is
expected to expand by 6% in 2020. However, the growth rate fell to -5 % in 2021, which
is still a negative growth rate. We may deduce from this data that the growth rate of current
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liabilities varies dramatically from year to year, with increases in some years and declines
in others. It might be interpreted as mixed and unsure.

3.2.3 Total Liabilities Growth

TOTAL LIABILITIES
40.00%

30.00%

20.00%

10.00%

0.00%

-10.00%

-20.00%

-30.00%
2017 2018 2019 2020 2021
Total Liabilities 27.20% -16.95% 14.47% 13.12% 1.13%

Figure 3 Total Liabilities Growth of "Bangladesh Building Systems Ltd "

Interpretation: According to the graph, the percent change in total liabilities growth has
varied over the last five years. Total liabilities increased by 27.20 percent in 2017, the
greatest growth rate within this period. This growth rate fell to -16.95 percent the next year.
Total liabilities grew at a 14.47 percent annual rate in 2019. However, in 2020, the growth
rate fell to 13.12 percent, followed by a decline to 1.13 percent in 2021. Overall, the trend
in total liabilities increases looks to be mixed from 2017 to 2021. There are examples of
both upward and negative growth rate patterns. It is critical to track the percentage change
each year to spot any noticeable trends.
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3.2.4 Equity Growth

Equity
30%

20%

10%

0%

-10%

-20%

-30%

-40%
2017 2018 2019 2020 2021
Equity -25% 10% 13.68% 4% -4%

Figure 4 Equity Growth of "Bangladesh Building Systems Ltd "

Interpretation: The overall equity growth pattern over the last five years. In 2017, equity
fell by -25 percent, the lowest growth rate over the period. However, growth rates in
subsequent years continued to rise, and by 2021, total equity growth had fallen by -4
percent. This shows that the corporation may have had a less lucrative year in 2021
compared to the previous year, resulting in an equity drop. The company's overall financial
performance may suffer as a result of the negative trend in total equity growth. To improve
its financial performance and reverse the trend, the firm may need to implement corrective
actions such as cost-cutting, raising revenue, and improving asset use.
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3.2.5 Sales Growth

Figure 4 Sales Growth of "Bangladesh Building Systems Ltd "

Interpretation: Total Sales Growth has been decreasing over time. In 2017, the firm
witnessed a 5% growth in sales. However, there was a 20.68 percent loss in 2018 compared
to the previous year, followed by an 11.83 percent dip in 2019 and a further 46.29 percent
drop in 2020. Total sales growth increased by 6% in 2021 when compared to the previous
year. As a result, the Total Sales Growth trend is negative, suggesting that the firm has
been struggling to maintain or boost sales.
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3.2.6 Net Income Growth

Figure 5 Net Income Growth of "Bangladesh Building Systems Ltd "

Interpretation: Total Net Income Growth has been declining over the years, according to
the interpretation. When compared to the previous year, the firm had a large rise in net
income growth (36%). However, net income growth fell by -27.35 percent in 2018
compared to the previous year, followed by a 12.95 percent increase in 2019 and a
significant loss of 60.93 percent in 2020. Total net income increase fell by -1.3302 percent
in 2021 compared to the previous year. As a result, the trend in Total Net Income Growth
is negative, showing that the firm has suffered large net income losses throughout the years.
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4.1 CONCLUSION

In conclusion, Bangladesh Building System has had mixed performance in terms of its
asset growth rate, total current liability growth, equity growth rate, net income growth rate,
and sales growth rate over the years. BBS needs to carefully manage its investments,
borrowing and repayment plans, and sales strategies for sustainable growth. Effective
financial management strategies are needed to address declining asset growth and equity
growth rates. Total liability growth can be interpreted as mixed and unsure. Equity growth
shows that company's financial performance may suffer as a result of a negative trend in
total equity growth. We see a negative sales growth. As a result net income is dropping.
Overall, these trends show that BBS may be facing some challenges in terms of maintaining
consistent growth and profitability over time. Further investigation is needed to understand
why these fluctuations occur, find ways to improve, and discover effective solutions for
long-term company growth and profitability.
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5.1 REFERENCE.

● https://www.bbspeb.com/

● https://www.wsj.com/market-
data/quotes/BD/XDHA/BBS/financials/annual/income-statement

● https://www.google.com/search?q=bangladesh+building+systems+ltd+growth+rat
e&sca_esv=561545016&ei=UDLwZMedJYLkseMPzv28oAk&oq=bangladesh+b
uilding+systems+ltd+growth&gs_lp=Egxnd3Mtd2l6LXNlcnAiJmJhbmdsYWRlc2
ggYnVpbGRpbmcgc3lzdGVtcyBsdGQgZ3Jvd3RoKgIIADIFECEYoAEyBRAhG
KABSOtHUM0EWO8scAJ4AZABAJgB5QGgAfoLqgEFMC40LjS4AQHIAQD4
AQHCAgoQABhHGNYEGLADwgIKEAAYigUYsAMYQ8ICAhAmwgIIEAAY
igUYhgPCAgQQIRgVwgIIECEYFhgeGB3CAgcQIRigARgK4gMEGAAgQYgG
AZAGCQ&sclient=gws-wiz-serp

● BBS-AR-19-20.pdf (bbspeb.com)
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