Financial Analysis of Meghna Petroleum Limited

Financial Statement of Meghna Petroleum Limited from Fiscal Year 2020-2022:

Income Statement 2021-2022 2020-2021 2019-2020

Sales 2,574,634,459 2,551,770,675 2,379,684,147
Cost of Goods Sold 1,435,488,629 1,338,128,911 1,269,322,204
Gross Profit 1,139,145,830 1,213,641,764 1,110,361,943
Operating Profit 3,957,718,617 3,643,949,968 4,106,686,134
Net Income 3,165,351,039 2,821,408,031 3,079,179,742
Number of Shares 108,216,108 108,216,108 108,216,108

Balance Sheet 2021-2022 2020-2021 2019-2020

Current Asset 72,341,755,718 63,913,818,172 54,508,293,320
Inventories 9,758,399,713 13,652,091,827 15,127,756,857
Total Asset 81,997,610,009 68,661,666,512 56,068,533,048
Current Liabilities 62,892,789,082 51,078,212,986 39,836,856,577
Total Liabilities 63,151,615,053 51,357,780,975 40,029,339,274
Total Equity 18,845,994,956 17,303,885,537 16,039,193,774

Cash Flow 2021-2022 2020-2021 2019-2020

Cash Flow from Operating Activities 16,785,020,723 12,407,154,939 -3,006,150,080
Net Cash Used in Investing Activities -4,729,048,626 -7,986,667,194 2,225,736,151
Net Cash Used in Financing Activities -1,696,103,268 -1,481,533,273 -1,585,939,851
Cash and Cash Equivalents 33,623,849,212 23,264,000,383 20,325,045,911
Income Statement 2021-2022 2020-2021 2019-2020
Sales 2,574,634,459 2,551,770,675 2,379,684,147
Cost of Goods Sold 1,435,488,629 1,338,128,911 1,269,322,204
Gross Profit 1,139,145,830 1,213,641,764 1,110,361,943
Operating Profit 3,957,718,617 3,643,949,968 4,106,686,134
Net Income 3,165,351,039 2,821,408,031 3,079,179,742
Number of Shares 108,216,108 108,216,108 108,216,108

Balance Sheet 2021-2022 2020-2021 2019-2020

Current Asset 72,341,755,718 63,913,818,172 54,508,293,320
Inventories 9,758,399,713 13,652,091,827 15,127,756,857
Total Asset 81,997,610,009 68,661,666,512 56,068,533,048
Current Liabilities 62,892,789,082 51,078,212,986 39,836,856,577
Total Liabilities 63,151,615,053 51,357,780,975 40,029,339,274
Total Equity 18,845,994,956 17,303,885,537 16,039,193,774

Cash Flow 2021-2022 2020-2021 2019-2020

Cash Flow from Operating Activities 16,785,020,723 12,407,154,939 -3,006,150,080
Net Cash Used in Investing Activities -4,729,048,626 -7,986,667,194 2,225,736,151
Net Cash Used in Financing Activities -1,696,103,268 -1,481,533,273 -1,585,939,851
Cash and Cash Equivalents 33,623,849,212 23,264,000,383 20,325,045,911
Financial Ratio Analysis
Liquidity Ratio:
Liquidity Ratio measures the company’s ability to pay off the company’s short-term liabilities
with its liquid assets. The Liquidity Ratio of Meghna Petroleum Limited from the FY 2020-2022
is shown below:

Current Ratio:
The current ratio measures the company’s ability to pay off the short–term liabilities with its
current assets. The above-shown current ratio of Meghna Petroleum Limited from FY 2020-2022
describes that in 2020 they had the highest ability to pay off their liabilities with current assets as
they had 1.37 assets against 1 liability and in the year 2021 the ability decreased and became
1.25 against 1 liability. In the year 2022, the ability goes down more and becomes 1.15 against 1
liability.
Quick Ratio:
Quick ratio measures the company’s ability to pay off the short-term liabilities with its most
liquid assets. The above-shown quick ratio of Meghna Petroleum Limited from FY 2020-2022
describes that in the year 2022, they had the highest ability as they had 1.00 most liquid assets
against 1 liability, and in the year 2021, they had the lowest ability among the years and had 0.98
most liquid assets against 1 liability and in 2020 they had higher ability than 2021 but lower than
2022 and had 0.99 most liquid assets against 1 liability.
Leverage Ratio:
The leverage ratio is a measurement that assesses the ability of a company to meet its financial
obligation. The leverage ratio of Meghna Petroleum Limited from the FY 2020-2022 is shown
below:

Debt – to – equity Ratio:

Equity debt measures the amount of a company’s capital that is financed by debt. The above-
shown debt-to-equity ratio of Meghna Petroleum Limited represents that in the year 2020, they
financed most of their capital by debt and it indicates 2.49 debt against 1 equity. And the trend of
financing capital by debt is increasing and in the year 2021, the ratio shows that they raise capital
by debt about 2.96 against 1 equity; in 2022, the ratio is 3.35 against 1 equity.
Debt – to – asset Ratio:
Debt to asset measures the amount of a company’s assets that are financed by debt. The above-
shown debt-to-asset ratio of Meghna Petroleum Limited describes that in the year 2020, they had
0.71 debt against 1 asset. And the debt increased in the year 2021 and became 0.75 against 1
asset and in 2022 it became 0.77 against 1 asset.
Activity Ratio:
The activity ratio measures the efficiency of a company in using assets to generate revenue. The
activity ratio of Meghna Petroleum Limited from the FY 2020-2022 is shown below:

Inventory T/O Ratio:

The inventory t/o ratio indicates the efficiency of a company in managing its inventory. The
above-shown inventory turnover ratio of Meghna Petroleum Limited shows that the inventory
turnover ratio has an increasing trend in its efficiency in managing the inventory in 2020 it had a
0.087 efficiency rate and in 2021 it became 0.092 and in 2022 it increased more and got 0.122
efficiency rate in terms of managing the inventory.
Receivable T/O Ratio:
The receivable T/O ratio measures the company’s efficiency in collecting its outstanding
payments from customers. The above-shown receivable turnover ratio of Meghna Petroleum
Limited indicates the efficiency of the company in collecting its outstanding payments
fluctuating in the above-mentioned years. In the year 2020, the efficiency rate was 0.13, and in
2021 it increased much and became 0.25 but in the year 2022, the efficiency decreased and fell at
0.2.
Payable T/O Ratio:
The payable T/O ratio measures the company’s efficiency in paying its payables to its suppliers.
The above-shown payable turnover ratio of Meghna Petroleum Limited indicates the efficiency
of paying the payables of the company which fluctuated as well in the above-mentioned years. In
the year 2020, the company had an efficiency of 0.025 to pay the suppliers and in 2021 the
efficiency increased to 0.030 and it decreased in 2022 and the efficiency became 0.026.
Profitability Ratio:
The profitability ratio measures the company’s ability to generate profit relative to its sales,
assets, and equity. The profitability ratio of Meghna Petroleum Limited from the FY 2020-2022
is shown below:

Net Profit Margin:

Net profit margin measures the percentage of net income. The above-shown net profit margin of
Meghna Petroleum Limited indicates that in the year 2020, the net profit margin was 1.29% of its
sales and in the year 2021 it decreased and the net profit margin was 1.11% and in the year 2022
it improved a bit and the net profit margin of the year was 1.23%.
Return on Asset:
Return on assets indicates the efficiency of the company in generating profit using its assets. The
above-shown return on assets of Meghna Petroleum Limited is in a decreasing trend. In the year
2020, the return on assets was 0.0453 and in 2021 it decreased a bit and became 0.0452 and in
the year 2022 the efficiency decreased more and became 0.0420.
Return on Equity:
Return on equity measures the efficiency of generating profit using the shareholder’s equity of a
company. The above-shown return on equity of Meghna Petroleum Limited is in a fluctuating
trend in the mentioned years. In the year 2020, the efficiency of the company of return on equity
was about 0.20, and in the year 2021 it became 0.17, and in the year 2022 the efficiency
increased a bit and it became 0.18.
Market Value Ratio:
Market value ratios are measured to assess the valuation of a company’s stock and to compare it
to other companies in the same industry. The market value ratio of Meghna Petroleum Limited
from the FY 2020-2022 is shown below:

P/E Ratio:
The price-to-earnings ratio measures the current share price of a company relative to its earnings
per share. The above-shown p/e ratio of Meghna Petroleum Limited is measured according to the
current share price of the company. According to the current share price of the company,
measured by the EPS of the year 2020 the p/e ratio of the company is 7.08, and similarly
measured by the EPS of the year 2021 and 2022 the p/e ratio of the company is 7.72 and 6.88
respectively which is increase in 2021 but in 2022 because of the downfall of the share market
the impact shown in the year 2022 as well.
Dividend Yield:
Dividend yield measures the annual dividend payments per share of a company as a percentage
of its current share price. The above-shown dividend yield of Meghna Petroleum Limited for the
year 2020-2022 is in decreasing trend. In the year 2020, Meghna Petroleum Limited gave
0.049% of its share price. In the year 2021, the percentage decreased slightly and gave 0.047% of
their share price. In the year 2022, the percentage decreased more and they gave 0.045% of their
share price.
 Summary of Financial Analysis of Meghna Petroleum Limited
The revenue of Meghna Petroleum Limited has increased steadily over the past three years. The
company's profit has also increased steadily over the same period. This suggests that Meghna
Petroleum Limited is a financially sound company that is growing rapidly. We can see that the
liquidity ratio of Meghna Petroleum Limited has been on a declining trend over the past three
years. The current ratio, which measures the company's ability to meet its short-term liabilities
with its current assets, has decreased from 1.37 in 2020 to 1.15 in 2022. The quick ratio, which
measures the company's ability to meet its short-term liabilities with its most liquid assets, has
increased slightly from 0.99 in 2020 to 1.00 in 2022. Overall, the liquidity ratio suggests that
Meghna Petroleum Limited has a slightly worsening ability to meet its short-term liabilities. The
leverage ratio of Meghna Petroleum Limited has been on an increasing trend over the past three
years. The debt-to-equity ratio, which measures the amount of the company's capital that is
financed by debt, has increased from 2.49 in 2020 to 3.35 in 2022. The debt-to-asset ratio, which
measures the amount of the company's assets that are financed by debt, has increased from 0.71
in 2020 to 0.77 in 2022. Overall, the leverage ratio suggests that Meghna Petroleum Limited is
becoming more reliant on debt to finance its operations. The inventory turnover ratio of Meghna
Petroleum Limited has been on an increasing trend over the past three years, indicating that the
company is becoming more efficient in managing its inventory. The receivable turnover ratio has
fluctuated in recent years, but overall, it suggests that the company is doing a relatively good job
of collecting outstanding customer payments. The payable turnover ratio has also fluctuated in
recent years, but overall, it suggests that the company is doing a relatively good job of paying its
suppliers. The net profit margin of Meghna Petroleum Limited has fluctuated in recent years, but
overall, it is relatively low. The return on assets ratio has been on a declining trend over the past
three years, indicating that the company is becoming less efficient in generating profit using its
assets. The return on equity ratio has fluctuated in recent years, but overall, it is relatively low.
The price-to-earnings ratio of Meghna Petroleum Limited has decreased slightly over the past
three years, but it is still relatively high. The dividend yield has decreased over the past three
years, indicating that the company is paying out a smaller percentage of its earnings as
dividends.
The financial analysis of Meghna Petroleum Limited suggests that the company is facing some
challenges. The liquidity ratio is slightly declining, the leverage ratio is increasing, and the
profitability ratios are fluctuating at relatively low levels. However, the activity ratios suggest
that the company is doing a relatively good job of managing its inventory and collecting
customer payments. The market value ratios suggest that the company is still relatively highly
valued. Overall, the financial analysis suggests that Meghna Petroleum Limited is a company
with some risks, but it also has some potential. Investors should carefully consider the company's
financial performance before making any investment decisions.
 Ethical Value Proposition for Meghna Petroleum Limited Employees

Meghna Petroleum Limited is committed to operating ethically and responsibly. They believe
that their ethical values are essential to their success and to the well-being of their employees,
customers, and the communities in which they operate. Their ethical values are:
 Integrity: They should be honest and transparent in all of our dealings.
 Respect: They should treat all customers and employees with dignity and respect.
 Responsibility: They should take responsibility for their actions and decisions.
 Safety: They should be committed to providing a safe and healthy work environment for
our employees and contractors.
 Environmental stewardship: They should be committed to protecting the environment and
minimizing our impact on the natural world.
They can expect all of their employees to uphold these ethical values in their work and their
interactions with others. By doing so, they can create a more ethical and sustainable business
environment for everyone.
The following are some specific recommendations and strategies for Meghna Petroleum Limited
to implement its ethical value proposition:
 Develop and implement a code of ethics: The code of ethics should clearly define the
company's ethical values and expectations for employee conduct. It should also guide
how to resolve ethical dilemmas.
 Provide training on ethics: All employees should receive training on the company's code
of ethics and on how to apply it to their daily work.
 Establish a confidential ethics hotline: Employees should have a confidential way to
report unethical behavior without fear of retaliation.
 Create a culture of accountability: The company should hold all employees accountable
for upholding the company's ethical values. This includes taking disciplinary action
against employees who violate the code of ethics.
 Recognize and reward ethical behavior: The company should recognize and reward
employees who demonstrate ethical behavior. This could be done through formal awards
programs or informal recognition.
By implementing these recommendations and strategies, Meghna Petroleum Limited can create a
more ethical and sustainable business environment for everyone.