Financial Performance & Practices of BSRM Steels Limited A Study On BSRM Steels Limited

Financial Performance & practices of BSRM Steels Limited
A Study on BSRM Steels Limited
(This Internship Report is submitted for the partial fulfillment of the degree of Honour’s of Business
Administration with major in Finance)
Prepared By:
Snejuti Dhar
Matric No: B123273
Program: BBA
Semester: Spring 2016
Internship Duration: 15 October 2016 to 15 January 2017

Date of Submission: January 19, 2017
DEPARTMENT OF BUSINESS ADMINISTRATION

INTERNATIONAL ISLAMIC UNIVERSITY CHITTAGONG
“Financial Performance “-A case Study on BSRM Steels Limited
Financial Performance & practices of BSRM Steels Limited
A Study on BSRM Steels Limited
Prepared By:
Snejuti Dhar
Matric No: B123273
Program: BBA
Semester: Spring 2016
Supervised By:
Nahid Sultana
Lecturer
Department of Business Administration
Internship Duration: 15 October 2016 to 15 January 2017

Date of Submission: January 18, 2017
____________________
Signature of Supervisor
DEPARTMENT OF BUSINESS ADMINISTRATION

INTERNATIONAL ISLAMIC UNIVERSITY CHITTAGONG
Spring 2016
Snejuti Dhar, ID-B123273,BBA,IIUC Page 62

Preface
Theoretical knowledge does not make a person perfect. As an institute of third world country we learn
only theoretical knowledge. But as a student of Business Administration we need more practical
knowledge. A perfect Coordination between theory and practice is important in the context of modern
business world. In order to resolve the dichotomy between theory and practice, the Department of
Management Studies, International Islamic University Chittagong arranged Internship program as a
partial completion of BBA program. This program is necessary for every student to complete his or her
academic degree. This research program is partly effort to earn knowledge in practical field after
completing the theoretical education. Internship program brings students closer to the business theory
and practice & thereby helps them to substantiate their knowledge so that they can prepare themselves
to start a successful career.
In tomorrow world only the fittest persons will survive. To survive in the tomorrows world strong
business qualified people is highly required. At present time B.B.A is very lucrative degree for business
personnel & Internship program is very much important for B.B.A degree. The specialization of business
education viz. Management, Finance & Banking, Accounting, and Marketing puts special emphasis on
knowledge of different aspects of a business concerns.
Under the internship program every student is assigned to an organization with a view to acquiring
practical Knowledge. After taking practical knowledge, each student is required to acquiring practical
knowledge. After taking practical knowledge, each student is required to prepare a report on the
selected organization under the guidance of his or her coordinator & the assigned teacher will examine
it before awarding B.B.A degree.
The best ways of acquiring knowledge are excursion & such Internship Program is one of the ways of
learning and also scarcely necessary for the students. I have been able to gather practical knowledge in
the period of my internship Program. I hope this will help to rich my knowledge by combining the theory
we studied and the practice I gathered through this program.
Despite all of my efforts, printing mistakes deficiencies for which we are only responsible. Our efforts
will be successful if this report serves the purpose.

Letter of Submission
January 19, 2017
To
The Honorable Head
Department of Business Administration
International Islamic University Chittagong
Subject: Submission of Internship report.
Dear Sir,
I am highly delighted to submit my internship report on “Financial performance” of BSRM Steels Limited:
A study of” BSRM Corporate Office”. This report is an integrated part of my BBA program and according
to my perception this report is enriched with my knowledge I have gained throughout my academic
career at International Islamic University Chittagong. To prepare this report I tried my level best to
accrue relevant information from all the reliable and actual sources. It will be highly hearten able if you
kindly receive this Internship Report.
For the completion of this report I tried hard & soul to follow the guidelines given by you. I am very
much thankful that you have given me the opportunity to prepare this report under your supervision
and hope that this report will meet the standards of your verdict.
Thanking You.
Sincerely Yours
__________________
Snejuti Dhar
BBA (Finance & Banking)
Matric No: B 123273
Department of Business Studies
International Islamic University Chittagong

Internship Certificate

Acknowledgement
First of all, I would like to express the deepest gratitude to my honorable supervisor, - for his valuable
contribution and effort that he put for the best output. Without his contribution it was impossible for
me to work on this paper and complete this report on financial performance of BSRM Steels Limited: A
study of BSRM Corporate Office. His painstaking effort at importing his students with the necessary skills
and expertise goes far beyond his responsibilities as a teacher, and I am very grateful to him.
I am very much indebted to the Group CFO & Company Secretary of BSRM group Mr. Shekhar Ranjan
Kar FCA, and the Head of Finance & Accounts Mr. Reazul Kabir FCA to give permission to do internship in
the corporate head office of BSRM Group. I express a special gratitude to my supervisor Mr. Iqbal
Ahmed (Assistant manager & lead Banking) for giving me the opportunity to learn about banking
activities & short term financing and providing all necessary materials to complete this report. His
continuous supervision and cooperation has made this internship program a success. To complete this
report I had to work on BSRM Corporate Office at Sadarghat. I would like to thank all the officers
working over there. Their voluntary co operation & friendly behavior helps me a lot to work there. They
have provided me suggestion and valuable knowledge regarding the Company’s Financial, Banking,
accounting activities which I hope will help me to shape my future career. I would like to express the
deepest appreciation to the officers of BSRM Corporate Office for helping me providing valuable
information about their company and sharing their strategic view about managing their departments
with me. Their vision and future plan have guided me towards this accomplishment. I should give special
thanks to the clients who have helped me by giving information and sharing experience about the
company operation details.
I would also like to express my gratitude to all my faculty members who had been there to show me the
light in every passage of my life in International Islamic University Chittagong. From the beginning of my
University life all the courses I have done and the knowledge I have gathered from the teachers helped
me a lot and will be helping me in the future. Other than their support, it would never be possible for
me to write this report. Finally, I would like to give a special thanks to our family for being so kind, loving
and supportive towards us.

Executive Summary
This Internship report contains the evidence and assessment of financial performance required by a
company. So this paper will facilitate the audiences to understand the basic concept of financial
performance, its major features, importance and scopes, and how Bangladeshi companies are dealing
with the financial condition.
The main objective is to match the students’ academic knowledge with the real example. The
methodology used here is very simple and it represents theoretical and some mathematical data.
Steel industry is proved as a promising industry in the global economy. Bangladesh is developing day by
day and showing its existence in the global market. As a token of development, steel industry of
Bangladesh is also moving forward. Several companies are trying to establish in the steel industry for the
betterment of themselves and that of the country.
A company’s financial statements provide various financial information that investors and creditors use
to evaluate a company’s financial performance. Financial statements are also important to a company’s
managers because by publishing financial statements, management can communicate with interested
outside parties about its accomplishment running the company. Different financial statements focus on
different areas of financial performances.
As capital providers, investors and creditors rely on a company’s financial conditions for both the safety
and profitability of their investments. More specifically, investors and creditors need to know where
their money went and where it is now. The financial statement of balance sheet addresses such issues
by providing detailed information about a company’s asset investments.
The report is based on studying the BSRM Steels Limited. This company is an example of sustainable
investment made in Bangladesh by the BSRM Group to reduce the demand supply gap of MS Rod. This
internship report shows how financial performance is evaluated and managed to operate the regular
activities of the company for sustaining in the industry.

Table of Contents
SL No Page No.
Contents
Chapter 1: Background of the study
1.1 Introduction 11
1.2 Objective of the study 12
1.3 Scope of the study 13
1.4 Methodology of the study 13
1.5 Limitations of the study 14
1.6 Literature review 15-16
Chapter 2: Overview of BSRM Steels Limited

2.1 Company profile 18
2.2 Vision of BSRM Group 19
2.3 BSRM Values 20
2.4 Code of conduct 21
2.5 BSRMS Groups milestones 21-22
2.6 Awards & Recognitions 23
2.7 Holding & Subsidiary companies 24
2.8 BSRM Steels Limited 25
2.9 Corporate structure 26
2.10 The Rolling Process 27
2.11 Distribution of product & services 28
2.12 Product information 29-34
2.13 Company competitive situation 35
Chapter 3: Financial Performance Evaluation

3.1 BSRM Group Financials January – June, 2016 37-38
3.2 Performance at a glance in 2016 39-41
3.3 Key Financial Highlight of last 5 years 42-43
Chapter 4: Financial Details

4.1 Financial Performance 45
4.2 Liquidity ratio 45-46

4.2.1 Current Ratio 46

4.2.2 Quick Ratio 47
4.3 Profitability Ratio 47-48
4.3.1 Gross profit margin 48
4.3.2 Net profit margin 49
4.3.3 Return on Assets 49
4.3.4 Return on equity 50
4.3.5 Earnings per share 50
4.4 Efficiency Ratio 51
4.4.1 Total Asset Turnover 50
4.4.2 Inventory Turnover Ratio 52
4.5 Solvency ratio 52
4.5.1 Debt to equity ratio 53
4.5.2 Interest coverage ratio 53
4.5.3 Equity ratio 54
4.6 Market performance ratio 55
4.6.1 Price Earnings ratio 55
4.6.2 Dividend payout ratio 56
Chapter 5: Findings & Analysis

5.1 Liquidity ratio 58-59
5.2 Profitability ratio 60-65
5.3 Efficiency ratios 65-67
5.4 Solvency ratios 67-70
5.5 Market Performance Ratio 70-72
5.6 Summary of findings and their recommendations 72-74

CHAPTER 1
Background of the Study

1.1 Introduction
In Bangladesh Steel Industry is one of the most developed hi-tech sector which is contribute to the
growth of the country through stimulating trade and commerce, accelerating the pace of
industrialization, boosting up export, creating employment opportunity for the youth, poverty
alleviation, raising standard of living of limited income group and overall sustainable socio economic
development of the country.
After the boost of housing industry along with the rise of modern era in Bangladesh - the development
of this sector was accelerated. The professional knowledge, thoughts and innovative ideas of the steel
workers in this sector are the key factors of these developments. Leading steel manufacturing
Companies are expanding their business with the aim to export market.
BSRM Steel products have been chosen solely for building major National landmarks and infrastructures.
To name a few, the Hatirjheel Project, Zillur Rahman flyover, Mayor Hanif Flyover, Shah amanat Bridge
were made with BSRM Xtreme.
BSRM Xtreme is a product that was introduced when there were no graded steel. It was major change in
the steel industry. The core driver was the belief in evolution in steel products, which resulted in
bringing the first EMF tested rod, the first steel brand that passed 5 million cyclic loading Fatigue testing
in the U.K and conformed to 10 Global standards. With the largest steel producing factory in the country
and employing the best technology from Europe, the company maintains volume with uncompromising
quality. BSRM is dedicated to providing the best solution for the construction industry. The first ever 50
mm Rod was specially designed and rolled for the deep pilling requirements of Padma Bridge. Its
recently introduced brands are also designed to meet special needs for the construction industry.

1.2 Objective of the study
Main Objective:
The main objective of the study is to know the financial performance & Risk management of
BSRM Steels Limited. (BSRMS)
Specific Objectives:
To have an overview of BSRMS.

To analyze the financial performance of the company.
To indentify risk factors that may impede performance & growth of the company.
To provide possible solution for the management of risky factors of BSRMS.
Having an overview of recent performance of the company.
Providing suggestions and recommendation for maintaining profitability & growth of the
company.

1.3 Scope of the Study
As I have worked only in Accounts & Finance division in BSRM Steels Limited , BSRM Corporate Office, Ali
mansion, Sadarghat Branch. This report only includes the Risk management and financial performance
under Finance & Accounts department of BSRM. This report does not include Human resource
management of BSRMS. Besides this report does not include the Human resource management, Supply
chain or Manufacturing of BSRMS.
1.4 Methodology of the study

In order to make a meaningful report the data are collected through primary and secondary way.
Primary Sources:
Personal Interview.
Observation in the organization.
M, Practical task desk.
Secondary sources:
Website of Bangladesh Steel Re-Rolling Mills Limited (www.bsrm.com )
Annual Reports of BSRM Steels Limited.
Company’s Financial Statements
Different types of sheet compiled by Company officer.
Analysis and evaluation of the findings.
The collected data and information have been tabulated, processed and graphically presented in order
to make the study more informative and useful.

1.5 Limitations of the study
Though I have given utmost effort to prepare this report but there are some limitations of the
study which are as follows-
Work load during the internship program at the work place was also a barrier to prepare this
report.
Time is the main limitation for my study. Due to unavailability of sufficient time, it is not possible
for me to provide all up to date information.
Current and adequate information was hard to collect.
Due to lack of practical experience, some errors might be occurred during the study. Therefore
maximum efforts have given to avoid mistakes.
As a novice it was tough for me to make evaluation and finally draw recommendations. The
allotted time is not enough to understand and evaluate this type of vast issue.
Last but not the least; a good study requires the analysis of as much data as possible covering
various aspects of the study. There may be some lacking and I hope to be excused for these.

1.6 Literature review
A company’s financial statements provide various financial information that investors and creditors use
to evaluate a company’s financial performance. Financial statements are also important because by
publishing financial statements, management can communicate with interested outside parties about its
accomplishment running the company. Different financial statements focus on different areas of
financial performances.
A company’s financial conditions are of a major concern to investors and creditors. As capital providers,
investors and creditors rely on a company’s financial conditions for both the safety and profitability of
their investments. More specifically, investors and creditors need to know where their money went and
where it is now. The financial statement of balance sheet addresses such issues by providing detailed
information about a company’s asset investments. The balance sheet also lists a company’s outstanding
debt and equity components, and so debt and equity investors can better understand their relative
positions in a company’s capital mix.
Financial conditions shown in the balance sheet are snapshots of a company’s assets, liabilities and
equity at the end of a financial reporting period; it doesn’t reveal what happens during the period from
operations that may have caused changes to financial conditions. Therefore, operating results during the
period also concerns investors. The financial statement of income statement reports operating results
such as sales, expenses and profits or losses. Using the income statement, investors can both evaluate a
company’s past income performance and assess the uncertainty of future cash flows.
A company’s profits reported in the income statement are accounting income and most likely contain
certain non-cash elements, providing no direct information on a company’s cash exchange during the
period. Moreover, a company also incurs cash inflows and outflows during a period from other non-
operating activities, namely investing and financing. To investors, cash from all sources, not just
accounting income from operations, is what pays back their investments. The importance of the cash
flow statement is that it shows the exchange of cash between a company and the outside world during a
period, and so investors can know if the company has enough cash to pay for expenses and asset
purchases.

The statement of shareholders’ equity is especially important to equity investors because it shows the
changes in various equity components, including retained earnings, during a period. The amount of
shareholders’ equity is a company’s total assets minus its total liabilities, representing the company’s
net worth. A steady growth in a company’s shareholders’ equity by way of increasing retained earnings,
as opposed to expanding shareholder base, means the accumulation of investment returns for current
equity shareholders.
Different financial statements like Operating results, Cash flow statements, shareholders’ equity etc are
very important particularly for the external investors and the stakeholders. These statements help in the
analysis of financial condition through the most common tool, ratio analysis. All financial statements are
essentially historical documents. Financial statements analysis involves careful selection of data from
financial statements for the primary purpose of forecasting the financial health of the company. This is
accomplished by examining trends in key financial ratios. The ratios provide indicators of how well the
company and its business units are performing. They tell what has happened during a particular period
of time. Most users of financial statements are concerned about what will happen in the future.
Stockholders are concerned with future earnings and dividends. Creditors are concerned with the
company’s future ability to repay its debts. Since managers must report to shareholders and may wish to
raise funds from external sources, they are concerned with the company’s ability to finance future
expansion. So they must pay attention to the financial ratios used by external investors to evaluate the
company’s investment potential and creditworthiness. Despite the fact that financial statements are
historical documents, they can still provide valuable information bearing on all of the concerns. This
study evaluates the financial performance of BSRM Steels by analyzing the financial statements of the
company over a certain period of time.

CHAPTER 2
Overview of BSRM Steels Limited

2.1 Company Profile
Background
Bangladesh Steel Re-Rolling Mills Limited , a high grade steel manufacturing company has been
operating as the sister concern of BSRML is considered as one of the oldest Steel manufacturing plants
in the country that started business in 1960. Product line of the company includes MS Rod, channel and
Angle etc. At present, the company is running with the production capacity of 120000 M.Ton per
annum. BSRML was incorporated on December 28, 1960 as a private limited company and converted
into a public limited company on November 03, 2009 under the company’s act 1994. Subsequently on
January 01, 2011, BSRML has merged with its backward linkage sister concern Meghna engineering
works limited. The paid up capital of BSRML stood at Tk. 1558.51 million against the authorized capital
of Tk. 5000.00 million as on December 31, 2013. Currently BSRML is undergoing a Balancing
Modernization Rehabilitation and Expansion (BMRE) program to enhance its annual capacity of 1100000
MT. The plants are located at 147-149, Nasirabad I/A, Baizid Bostami Road, Chittagong and 78-79
Nasirabad industrial area, Chittagong with its corporate office at Ali Mansion, Sadarghat Road,
Chittagong.
Group Profile
Since the beginning of its journey in 1952, Bangladesh Steel Re-Rolling Mills (BSRM) Group of Companies
becomes the market leader in the steel manufacturing industry of Bangladesh. This group has a wide
and glorious history of serving the nation through its best quality and cost-effective products. It
produces high-strength reinforced steel under the name of Xtreme500W. This product ensures 10 global
standards and the bestselling brand available in the country. This group expanded its business by
adopting new technology from European mill in 1987. Now this group of companies has several business
operations like steel re-rolling mill, production of MS Rod, billet casting project, etc.
BSRM Steels Limited (BSRMSL), an associate company of BSRM Group, plays as a dominant player in the
steel industry. They became the best steel manufacturing company of Bangladesh by maintain the
quality of the product throughout the production process. The company enjoys a good and timely
financing by banks because of its sound credibility. This paper shows the financial performance of the
company through some theoretical and mathematical analysis.

2.2 Vision of BSRMS Group
BSRMS group aspire to
Maintain our leadership position in the steel industry by producing the best quality steel
products, continuously enhancing customer satisfaction and becoming a reliable business
partner of our customers and suppliers.
Be an employer of choice, with focus on nurturing talent and developing future leaders of the
organization.
Protect the interest of our shareholder through sustainable growth and value creation.
Preserve the trust of all our stakeholders by adopting ethical business practices.
Support the society through corporate social responsibility initiatives.

2.3 BSRM Values
Consistent improvement in the quality of products and services,

efficiency of processes and profitability of business; continuously
Sustainable Growth anticipating and responding to the changing business
environmental needs using innovation; sharing knowledge and
experience within the organization.
Creating products and services valued by our customers;

constantly improving our processes through innovation
and adopting best practices; reducing wastage;
Quality
minimizing costs; investing in systems and technology and
developing our people to build a highly capable work force.
Be the preferred business partner of our customers and suppliers

Reliability by offering quality products; providing our best and timely
services before, during and after the business transactions and
honoring all our commitments despite challenges.
Preserve the faith and goodwill of all our stakeholders-

customers, shareholders, suppliers, employees, regulatory Trust
bodies and society, by adopting ethical and transparent
business practices, being fair and honest in all our dealings
and building robust governance and risk management processes.
Be a role model, setting benchmarks through our products,

processes and people; constantly moving ahead of competition
Leadership by differentiating our products, innovating our processes,
increasing our market share and nurturing talent to develop
leaders within the organization.
Acknowledge and fulfill our obligation towards the society

by undertaking initiatives for the general upliftment of the
Social
society, building capability and making facilities available to
the underprivileged. Responsibility
Delight our external and internal customers at every stage of

our interaction with them by truly understanding their needs,
Customer
offering them our best products and services, treating them
Satisfaction with respect and actively seeking and acting on their feedback.

2.4 Code of Conduct
 BSRM always adopts best ethical and transparent business practices to be fair and honest in all
its dealings.
 We always acknowledge and fulfill our obligations towards the society and offer our best
services to our customers and treat them with respect and honor.
2.5 BSRMS Groups Milestones
In 1984 BSRM introduced high-strength cold-twisted steel bars (TORSTEEL) to the construction
industry.
In 1987 Introduced High Strength deformed reinforcing steel bars conforming to ASTM 615
Grade 60 for the construction industry.
In 1996 Commissioned the then largest billet making plant in the country-Meghna Engineering
works limited, now known as steel melting works (SMW) unit of Bangladesh Steel Re-Rolling
Mills Limited.
In 2006 Introduced micro reinforcement wires, below 8mm for low cost rural construction.
In 2008 BSRM Steels Limited commenced production of internationally recognized Grade 500
steel bars branded as “Xtreme500W” conforming to ISO 6935-2.
In 2009 Entrance in the Capital Market

Shares of BSRM Steels Limited, the flagship company of BSRM Group was listed with the
country’s premier bourses Dhaka Stock Exchange Ltd. (DSE) and Chittagong Stock Exchange Ltd.
(CSE) on 18 January 2009. Market Capitalization as on 31 December 2015 is Tk. 32,913 million.
The public shareholding including institutional investors is 29.13%
In 2010 BSRM Iron and Steel Co. Ltd largest billet making plant in the country started
commercial production on June 01, 2010.
In 2012
Production Capacity of BSRM Steels Limited Enchanted to 600000 MT Per Year.
In 2013
A syndicated term loan of US$ 40 million and BDT 5908 million, raised by a consortium of 25 banks and
financial institutions, for BSRM Steels Mills Limited. It is the largest ever syndicated loan facility arranged
for a private company in Bangladesh. The plant will produce billets.
In 2014
Oracle e-BS – 12 went GO Live on 1st March 2014.Oracle Financials, Costing, Purchasing, Manufacturing
EAM, Inventory & Order Management are now integrated on a single platform which ensure the
accuracy, accountability and reliability of the group.
In 2015
1. Enhanced capacity of BSRM Steels Limited from 600000MT to 700000MT per annum.
2. Announced a new product namely “BSRM Maxima”
3. Increased capacity of Bangladesh Steel Re-Rolling Mills from 120000 MT to 450000 MT per
annum which will be the first and largest merchant mill in Bangladesh.
4. Listing of Bangladesh Steel Re-Rolling Mills Limited with the stock exchanges (DSE & CSE).
5. Start of trial production of world’s largest induction Furance based billet casting project-
“BSRM Steel Mills Limited.
In 2016
Launch of BSRM Ultima, the steel for Special Moment Resisting Frames (SMRF) conforming to
BDS ISO 6935-2 Grade 420DWR of 2016, ASTM A 706-15 Grade 60 and BSRM Centura,
Fusion Bonded Epoxy Coated (FBEC) rebar conforms to ASTM A 775 which resists chloride
induced corrosion and prevents rusting.
What’s next?

Setting up a coal based 150 MW merchant power plants to meet the internal demand as well as to
supply to the national grid.
2.6 Awards & Recognitions
Certificate of merit for best presented Annual Report 2014 from ICAB.
ICSB National Award (Silver) 2014.
Certificate of ICSB National Award 2014.
D & B Corporate Awards 2010 & 2012.
Best Enterprise of the year 2010.
Best Brand of Bangladesh in Steel Category in 2011,2013,2014,2015
Divisional Environment Award 2013
Pride of Chittagong (Chattagramer Ahonkar) 2012

Best Electricity Consumer award 2015
ICAB National Awards for Best Presented Annual Report 2012 & 2013
Certificate of Marit from SAFA 2013
5th Standard Chartered –Financial Express CSR Award 2014
Japan Bangladesh Chamber of Commerce & Industry (JBCCI) Award 2014
Mercantile Bank Excellence Award 2015
IIUC Business Award 2014
Best Brand Award in 2016 for Reinforcing Steel Category for 5 th time consecutively.
2nd Best tax payer Company award 2016.

SL Name of the Company Relationship Nature of the Business Units
Bangladesh Steel Re-

01 Holding Steel Re-Rolling Mill
Rolling Mills Ltd. (BSRM)
Company
Manufacturer and Supply of

Bangladesh Steel Re- Associated
M.S. Billet and Supply of
02 Rolling Mills Ltd. (Steel Company
Electricity to Associate
Melting Shop)
Companies
BSRM Steels Ltd. Associated

03 Production of MS Rod
(BSRMS) Company
Karnafully Engineering Associated Wire House rent

04
Works Ltd. (KEW) Company
BSRM Re-Cycling Associated

05 MS Scrap processing
Industries Ltd. Company
Manufacture and Supply of MS

Associated
06 BSRM Wires Ltd. Products wire rods and High-
Company
strength wires.
Associated
07 H. Akberali& Co. Ltd Business of House property
Company
BSRM Iron & Steel Co. Associated

08 Billet Casting Plant
Ltd. (BISCO) Company
Chittagong Power Associated

09 Power Generation Plant
Company ltd. (CPCL) Company
Associated
10 BSRM Steel Mills Ltd. Billet Casting Plant
Company

2.7 Holding & Subsidiary Companies
2.8 BSRM Steels Limited
BSRM is over loaded with orders, waiting lists and back orders for their MS rods. This causes having only
a little or no inventory of finished goods in hand. Hence, to meet the additional and over loaded orders,
BSRM Steels Limited is incorporated in 2002 to produce grade 60 deformed bars and thermo-
mechanically treated (TMT) bars.
The project was funded by syndicated term loan in June 2006. The project has been conceptuated by
German consultants Bandische Stahl Engineering (BSE), and the complete mill is to be supplied by
Danieli Group, Italy.
The demand for MS rods is increasing. As a result, the company achieved a 38.23% growth in profit after
tax in the year 2013 amounting BDT 119.61 Crore. This leads to position the company with a greater
market share. BSRM Steels Ltd. has acquired 21.746% of shares of BSRM Steels Ltd as on December 31,
2013.
The company can supply only 20% demand of the country amounting 600,000 MT of finished products.
To meet the growing demand, the company has decided to increase the production capacity to 700000
MT p.a. In this concern, two agreements have been signed with the suppliers. The project will be
completed by July 2015.
The company absorbs all of the production of its subsidiary company BSRM Iron & Steel Co. Limited
(BISCO) at market price. Both companies have structured fund transfer policy. BSRM Steels Limited
provides technical and managerial supports to its subsidiary company BISCO.
A Brief about BSRM Steels Limited is as follows:
Chairman: Mr. Alihussain Akberali
Nature of Business: Manufacturing MS Rod
Registered Office: Ali Mansion, 1207/1099, Sadarghat Road. Chittagong: 339, BD
Date of Incorporation: 20 July, 2002
Commencement of Commercial Production: 18 January, 2008.

Subsidiary company: BSRM Iron & Steel Co. Limited (BISCO)
Associate Company: BSRM Steel Mills Limited
2.9 Corporate Structure

Board of
Directors
Audit
committee
Managing Director Director (Finance) Group CFO &

Company
Secretary
Executive Director Head of Dhaka

Corporate affairs
Head of Finance &
Accounts and CFO
Country Director
National Sales Head
Kolkata India
Head of marketing
Head of Supply
and product
Chain
development
Head of
Administration Plant Head
Head of HR
Head of IT
Head of Internal Audit
Head of Technical
projects
Head of CSR
2.10 The Rolling Process

The rolling process used by the factory may be presented as under:
Use of Quality Continuous Cast or Rolled Billets
Charging of Billet in Furnace
Billet re-heated in the 75 tph Pusher type furnace
Discharging from the furnace
Roller Table with Emergency Collecting Pockets
Pinch Roll
Rolling in the Roughing Mill
Crop Crank Shear
Rolling in the Pre-finishing Mill
Crop Shear
Rolling in the Finishing Mill
Finishing Mill
Water Box for Bar Quenching- QTB system
Cut in Multiple Length of Bars at Dividing Shear
Cooling Bed and Services
Static Cold Cutting-to-Length Services with Shear
Bundling Station
Tying Station
Weighing Station
Collecting Pockets
2.11 Distribution of Product/Services

Factory
Dealer Retailer End User
Wholesaler End User
Retailer
End User
BSRM Steels Limited has its own distribution channel all over the country. Moreover, it is continuously
expanding its distribution network. It has around 650 authorized dealers to sell its products to the end
users. Apart from this Bangladesh steel Re –rolling Mills Limited have own sales and customer service
offices in 10 districts including Dhaka, Sylhet, Comilla, Bogra, Rangpur, Rajshahi, Khulna, Barishal,
narayanganj to ensure prompt supply of its products to the customers along with dedicated & quality
services. Since it is spread out in so many areas, there are special geographical advantages. It can reach
out to potential customers all over the country, thus increasing chances of sales compared to its
competitors ,who have not managed to reach out their services in the similar way. Same channel is used
for all BSRM products.

2.12 Product Information
Products
BSRM is country’s first producer of 500 MPa yield strength re-bar, branded and marketed as Xtreme
500W, proving BSRM’s quest for continuous innovation as nation building partner. Beside re-bar
production, BSRM rolls and markets sectional steels such as angles and channels and ribbed wire which
are manufactured in separate plants of BSRM. The bars, specially Xtreme 500 W and sectional products
ranging in various sizes conforming to ISO 6935-2:2015 and ISO 630-3:2012(E) respectively which are the
lawful standard of the country. BSRM’s steel products are inside Buildings, Bridges, and National
Infrastructures all of which are made to internationally accepted construction codes. The codes in turn
specify engineering materials conforming to various global standards.
Xtreme
Maxima
Ultima
Xtrong
Centura
Xtreme
Xtreme is a high strength reinforcing steel for general purpose construction of low and medium rise
commercial and residential buildings and bridges. It is the steel of choice among home builders.
It is used in the design and construction of Ordinary and Intermediate moment frames of reinforce
concrete (RC) Buildings, whenever high strength for economy and high ductility for safety is required.
The most common sizes for home builders are 8mm, 10mm, 12mm, 16mm, and 20mm. These sizes are
available with BSRM appointed dealers throughout the country. BSRM has the largest steel dealer
network, with over 628 Dealers in all the 7 administrative divisions of the country.
Larger diameters, 25mm, 32mm and 40mm are also available for use in the construction of very tall
buildings [25 story and beyond], Bridges and flyovers.
BSRM created history by becoming the only steel producer, in the Indian sub-continent; to roll 50mm
rebar. The 50mm Bar was used in the pile foundation of the Padma Bridge.
BSRM’s Xtreme500W conforms to BS 4449 Grade 500 and BDS ISO 6935-2 Grade 500W. It is the best
selling reinforcing product of BSRM since 2008.

Maxima
Steel is a ubiquitous and versatile construction material. It is the backbone of a nation’s infrastructure
and used in the tens of millions of tons to build cities, bridges, and factories. It is either used as a
structural material or as a composite in reinforced concrete (RC).
RC is usually the preferred construction method, in Bangladesh, due to its low cost and relatively cheap
labor cost, in the country. Most public infrastructure in the country such as bridges and flyovers and
transportation hubs, ports, airports, railway stations are built on RC. So are commercial and residential
buildings. Concrete reinforcing steel bars, or rebar in short, are used in tens of millions of tons for RC
construction.
The use of Grade 80 rebar instead of Grade 60 reduces steel consumption up to 25% in RC structures.
Steel is also, the most costly construction material; any reduction in steel consumption has immense
appeal for private developers and builders. For planners and economists the appeal is even higher as
Life Cycle Costs of Infrastructure can be substantially reduced.
BSRM Maxima is exactly the material for construction of projects which needs extra strength combined
with an extra dose of safety. It has Yield strength exceeding 80,000 psi [550MPa] combined with Tensile
strength exceeding 105,000 psi [725MPa]. It has fantastic elongation exceeding 16%, in all sizes.
BSRM Maxima is the perfect material which requires Strength and Safety in the same breath. Nuclear
power stations and large river crossing Bridges are perfect examples where BSRM Maxima can be used.
BSRM Maxima has undergone successful production in BSRM Steels Ltd. and extensive testing in
Bangladesh University Engineering Technology (BUET) Dept. of Civil Engineering.
Ultima
The Bangladesh National Building Code (BNBC) 2015 and the American Concrete Institute (ACI) 2014
state” Buildings in earthquake prone areas should be built on Special Moment Frames (SMF). The BNBC
and ACI further state that special Moment Frames (SMF) should be reinforced with high ‘strain
hardening’ steel.
All vital installations anywhere in the country like hospitals, schools, airports, railway stations and
bridges cannot be allowed to fail in an earthquake. They have to be reinforced with ‘strain hardening’
steel and designed with special moments frames as per the guidelines of the Bangladesh National
Building Code (BNBC).

Further any type of structure, commercial or residential, in Zone –IV which encompasses Sylhet and
Mymensingh in the Bangladesh National Building Code (BNBC) needs to be reinforced with ‘strain
hardening’ steel and designed with special moment frames.
Strain hardening steel requires additional stress beyond its yield strength to produce additional plastic
deformation and the steel becomes stronger and more difficult to break.
In a landmark innovation BSRM brings forth BSRM ULTIMA the reinforcing steel with the unique ‘strain
hardening’ property for the first time in the country.
BSRM ULTIMA conforms to the U.S. national reinforcing steel standard ASTM A-706 Grade 60 and ISO
6935-2 Grade 420 and recognized by the American Concrete Institute (ACI) of 2014 and the Bangladesh
National Building Code (BNBC) of 2015.
Xtrong
Xtrong is a high strength structural steel conforming to ASTM 572 Grade 50 and ISO 630 Grade 345
Channels and Angles section rolled out of this high strength steel provides an economical alternative to
steel fabricated structures compared to traditional ASTM A-36 steel. Structures made out of Xtrong or
Grade 50 steel requires 18% to 25 % less steel compared to Grade 36 steel.
BSRM makes Angles, conforming to Grade 50 in the following sizes.

LEG LENGTHTHICKNESSAREAUNIT MASS LENGTH LENGTHMASS OF 20 FEET

mm mm mm² (Kg. / M) Meter / TonFeet / Ton Kg
25 3 141 1.11 903.46 2963.4 6.75
25 4 184 1.44 692.33 2270.8 8.81
30 3 171 1.34 744.96 2443.5 8.18
30 4 224 1.76 568.70 1865.3 10.72
35 4 264 2.07 482.53 1582.7 12.64
35 5 325 2.55 391.96 1285.6 15.56
40 3 231 1.81 551.47 1808.8 11.06
40 4 304 2.39 419.04 1374.5 14.55
40 5 375 2.94 339.70 1114.2 17.95
45 4 344 2.70 370.32 1214.6 16.47
45 5 425 3.34 299.74 983.1 20.34
50 4 384 3.01 331.74 1088.1 18.38
50 5 475 3.73 268.19 879.7 22.74
50 6 564 4.43 225.87 740.8 27.00
60 5 575 4.51 221.55 726.7 27.52
60 6 684 5.37 186.24 610.9 32.74
60 8 896 7.03 142.17 466.3 42.89
65 6 744 5.84 171.22 561.6 35.61
65 8 976 7.66 130.52 428.1 46.72
70 6 804 6.31 158.44 519.7 38.48
75 6 864 6.78 147.44 483.6 41.36
75 8 1136 8.92 112.14 367.8 54.38
80 6 924 7.25 137.87 452.2 44.23
80 8 1216 9.55 104.76 343.6 58.20
80 10 1500 11.78 84.93 278.6 71.80
90 7 1211 9.51 105.19 345.0 57.96
90 8 1376 10.80 92.58 303.7 65.86
90 9 1539 12.08 82.77 271.5 73.66
90 10 1700 13.35 74.93 245.8 81.37
100 8 1536 12.06 82.94 272.0 73.52
100 10 1900 14.92 67.05 219.9 90.94
100 12 2256 17.71 56.47 185.2 107.98

Open Web Joist supported concrete floor
APPLICATIONS: One of the promising applications of Grade 50 Angles is in the fabrication of Open Web
Joists (OWJ) for supporting concrete floors under profiled steel deck
OWJ supported floor systems is the universally accepted method of constructing floors in even in tall
buildings in North America and Europe. Floors supported by OWJ are much lighter and reduces the dead
weight of buildings making it lighter and safer.
Centura
Corrosion induced failures causes severe distress to concrete structures is most common in any
chemically aggressive environments. Repair and rehabilitation of the affected structures not only cost
the exchequer with direct and indirect costs but also cause lot of inconvenience to the public. Hence, it
is essential to plan proper corrosion protection strategy to combat corrosion for the durability of
structures particularly in marine, coastal or industrially polluted areas.

Fusion Bonded Epoxy (FBE) Coating is able to provide protection against corrosion for the design life of
the structures. It is to be noted that there is no comparable technology for over 45 years in actual
service conditions in the most demanding environments in the world.
Today more than one million structures across the world stand in testimony to the long term
performance of FBE Coated Rebar. Around I5% of total rebar’s used in USA is FBE Coated Rebar. And it is
used in other ports of the world including Asia.
Technology introduced in India in 1990 there are several thousand structures across India, particularly in
the coastal areas. This proves the efficacy of the FBE Coating to prevent corrosion in concrete structures.
Application include highway and railway bridges, water storage & treatment and waste water
treatments facilities, refineries, fertilizer plants, jetties and marine works, power plants, nuclear
facilities, tunnels, reservoirs, multi story buildings, et al.

2.13 Company competitive situation
Steel consumption increases when economies are growing, as governments invest in infrastructure and
transport, and build new factories and houses. Bangladesh is a developing country where GDP growth
for last 3 years was around 6%.Due to increasing income level of the people of Bangladesh, government
as well as individual has given priorities on the social comfort. That is why real estate and infrastructural
sectors are improving day by day. To improve the social life of the people, the government has also
taken various infrastructural projects viz. several flyovers in Dhaka & Chittagong including Dhaka
Elevated Expressway, Dhaka-Chittagong 4-lane project including its bridges and culverts, Saidabad water
Treatment plant projects. All these projects require huge quantity of MS Re-Bars. The Biggest
opportunity for Bangladesh Steel Sector is that there is enormous scope for increasing consumption of
steel in almost all the sectors in Bangladesh.
Bangladesh has around 300 Steel producing factories where 200 are re-rolling mills. Except for a few,
most of them uses crude technology resulting in low-quality steel and mostly based on ship plates
derived from ship breaking industry is in a crisis because of its pollution standard and may be restricted
any time, in which case there will be a huge demand for quality steel in the country.
Many reports and papers have been prepared estimating the annual demand of steel and annual
demand for quality rod in the country. Exact year to year figures are not available. Bangladesh’s annual
demand for quality rod is estimated at more than 2.5 million MT, where country usually consumes over
1.7 million tones of MS road or 70 per cent of its annual demand in the peak season. The expected
growth rate is approximately 10%
Chittagong Based BSRM Steels Group is the market leader in the steel sector. Other main competitors
are Abul Khair Steels limited (AKS) , Kabir Steel Re-Rolling Mills Limited (KSRML) , Seema Steel Re-Rolling
Mills Limited (Seema) , Rahim Steel Mills Limited (RSML) , GPH Ispat Limited (GPH) , Ratanpur Steels
Limites , Baizid Steel , Anwar Ispat limited who are producing about 30% of total quality steel demand of
Bangladesh.

CHAPTER 3
Financial Performance Evaluation

3.1 BSRM Group Financials Jan-Jun 2016

(Amounts are in BDT Million)
Name of Debt Levarage Current Quick Net EBITDA

concerns Equity Ratio Ratio Ratio Working
Ratio Capital
Ratio
STEELS 2.07 67.47% 1.13 0.80 0.67 2,519.02
BISCO 1.45 59.19% 0.96 0.49 0.40 371.58
BSRM 2.08 67.50% 0.78 0.35 0.27 1,704.12
WIRES 1.76 63.75% 0.89 0.35 0.56 50.28
RECYCLIN -3.75 136.40% 0.76 0.05 0.95 6.88

G
H AKBAR 0.51 33.94% 0.49 0.49 (0.07) 762.56

ALI
LOGISTICS 2.78 73.56% 0.16 0.13 (0.17) 36.39
CPCL 0.51 33.86% 0.33 0.33 0.09 .53
STEEL 2.79 73.60% 0.38 0.08 (0.10) 403.91

MILLS
BSRM 0.70 41.19% 0.06 0.06 0.02 .05

ISPAT
KEW 0.25 19.79% 0.02 0.02 0.00 4.56
BSRM 12.56 92.63% 0.01 0.01 0.01 -.02

Metal
EAST 0.11 10.16% 7.91 7.91 0.80 -.05

BANGLE
Real Estate 1.36 57.66% 0.04 0.04 0.02 -.02
BD STEELS 0.04 3.43% 0.14 0.14 0.00 1.56

BSRM Group Financials JAN-June 2016

(Amounts are in BDT Million)
Name of Current Total Total Equity Current Short Long

concerns assets assets Liability Liability term term
loan loan
STEELS 19,200.43 28,809.12 19,437.93 9,371.19 16,992.84 14,156.31 1,547.13
BISCO 2,696.06 5,575.63 3,300.00 2,275.63 2,807.44 1,568.53 66.11
BSRM 13,217.74 31,724.99 21,415.21 10,309.79 16,865.68 9,015.06 3,272.58
WIRES 376.55 665.71 424.38 241.33 420.82 170.90 -
RECYCLING 71.97 71.97 98.17 -26.20 94.37 11.11 -
H AKBAR 571.42 6,508.10 2,208.68 4,299.42 1,155.52 0.00 1,053.16

ALI
LOGISTICS 62.22 818.41 602.04 216.38 397.74 - 200.77
CPCL 97.63 937.82 317.59 620.23 300.22 - 17.36
STEEL 4,060.01 23,167.65 17,050.31 6,117.34 10,756.04 4,721.76 6,148.02

MILLS
BSRM 36.17 1,552.59 639.51 913.08 639.51 - -

ISPAT
KEW 2.00 444.59 87.62 356.63 87.96 - -
BSRM .65 65.90 61.04 4.86 61.04 - -

Metal
EAST 20.78 25.86 2.63 23.23 2.63 - -

BANGLE
Real Estate .20 9.87 5.69 4.18 5.69 - -
BD STEELS 3.79 813.15 27.79 785.29 27.86 - -

3.2 Performance at a glance in 2016



3.3 Key Financial Highlight of last five years:

Key Financial Highlight of last five years:

CHAPTER 4
Financial Details

4.1 Financial performance
Financial performance analysis is a subjective measure of how well a firm can use assets from its primary
mode of business and generate revenues. This term is also used as a general measure of a firm's overall
financial health over a given period of time, and can be used to compare similar firms across the same
industry or to compare industries or sectors in aggregation.
One of the most fundamental facts about businesses is that the operating performance of the firm
shapes its financial structure. It is also true that the financial situation of the firm can also determine its
operating performance.
Financial statement analysis is a judgmental process. One of the primary objectives is identification of
major changes in trends, and relationships and the investigation of the reasons underlying those
changes. The judgment process can be improved by experience and the use of analytical tools. Probably
the most widely used financial analysis technique is ratio analysis, the analysis of relationships between
two or more line items on the financial statement. Financial ratios are usually expressed in percentage
or times. Generally, financial ratios are calculated for the purpose of evaluating aspects of a company's
operations and they fall into the following categories:
4.2 Liquidity Ratio
Liquidity ratios are the ratios that measure the ability of a company to meet its short term debt
obligations. These ratios measure the ability of a company to pay off its short-term liabilities when they
fall due.
The liquidity ratios are a result of dividing cash and other liquid assets by the short term borrowings and
current liabilities. They show the number of times the short term debt obligations are covered by the
cash and liquid assets. If the value is greater than 1, it means the short term obligations are fully
covered.
Generally, the higher the liquidity ratios are, the higher the margin of safety that the company
possesses to meet its current liabilities. Liquidity ratios greater than 1 indicate that the company is in
good financial health and it is less likely fall into financial difficulties.

Most common examples of liquidity ratios include current ratio, acid test ratio (also known as quick
ratio), cash ratio and working capital ratio. Different assets are considered to be relevant by different
analysts. Some analysts consider only the cash and cash equivalents as relevant assets because they are
most likely to be used to meet short term liabilities in an emergency. Some analysts consider the
debtors and trade receivables as relevant assets in addition to cash and cash equivalents. The value of
inventory is also considered relevant asset for calculations of liquidity ratios by some analysts.
The concept of cash cycle is also important for better understanding of liquidity ratios. The cash
continuously cycles through the operations of a company. A company’s cash is usually tied up in the
finished goods, the raw materials, and trade debtors. It is not until the inventory is sold, sales invoices
raised, and the debtors’ make payments that the company receives cash. The cash tied up in the cash
cycle is known as working capital, and liquidity ratios try to measure the balance between current assets
and current liabilities.
A company must possess the ability to release cash from cash cycle to meet its financial obligations
when the creditors seek payment. In other words, a company should possess the ability to translate its
short term assets into cash. The liquidity ratios attempt to measure this ability of a company.
We can use several types of ratios to monitor liquidity. But the most common are Current ratio and Acid
test ratio.
4.2.1 Current Ratio

The current ratio is a liquidity and efficiency that measures a firm's ability to pay off its short-term
liabilities with its current assets. The current ratio is an important measure of liquidity because short-
term liabilities are due within the next year.
This means that a company has a limited amount of time in order to raise the funds to pay for these
liabilities. Current assets like cash, cash equivalents, and marketable securities can easily be converted
into cash in the short term. This means that companies with larger amounts of current assets will more
easily be able to pay off current liabilities when they become due without having to sell off long-term,
revenue generating assets.
Calculation (formula)
The Current ratio = Current Assets / Current Liabilities

4.2.2 Quick Ratio
The quick ratio or acid test ratio is a liquidity ratio that measures the ability of a company to pay its
current liabilities when they come due with only quick assets. The acid test of finance shows how well a
company can quickly convert its assets into cash in order to pay off its current liabilities. Quick assets are
current assets that can be converted to cash within 90 days or in the short-term. Cash, cash equivalents,
short-term investments or marketable securities, and current accounts receivable are considered quick
assets.
Short-term investments or marketable securities include trading securities and available for sale
securities that can easily be converted into cash within the next 90 days. Marketable securities are
traded on an open market with a known price and readily available buyers.
The quick ratio is often called the acid test ratio in reference to the historical use of acid to test metals
for gold by the early miners. If the metal passed the acid test, it was pure gold. If metal failed the acid
test by corroding from the acid, it was a base metal and of no value.
Quick ratio = (Current Assets – Inventory) / Current liabilities
4.3 Profitability Ratio
Profitability ratios measure a company’s ability to generate earnings relative to sales, assets and equity.
These ratios assess the ability of a company to generate earnings, profits and cash flows relative to
relative to some metric, often the amount of money invested. They highlight how effectively the
profitability of a company is being managed.
Common examples of profitability ratios include return on sales, return on investment, return on equity,
return on capital employed (ROCE), cash return on capital invested (CROCI), gross profit margin and net
profit margin. All of these ratios indicate how well a company is performing at generating profits or
revenues relative to a certain metric.
Different profitability ratios provide different useful insights into the financial health and performance of
a company. For example, gross profit and net profit ratios tell how well the company is managing its

expenses. Return on capital employed (ROCE) tells how well the company is using capital employed to
generate returns. Return on investment tells whether the company is generating enough profits for its
shareholders.
For most of these ratios, a higher value is desirable. A higher value means that the company is doing
well and it is good at generating profits, revenues and cash flows. Profitability ratios are of little value in
isolation. They give meaningful information only when they are analyzed in comparison to competitors
or compared to the ratios in previous periods. Therefore, trend analysis and industry analysis is required
to draw meaningful conclusions about the profitability of a company.
We can use several types of ratios to monitor liquidity. But the most common are Gross Profit Margin,
Net Profit Margin, Return on Assets, Return on Equity and EPS.
4.3.1 Gross Profit Margin
Gross profit margin (gross margin) is the ratio of gross profit (gross sales less cost of sales) to sales
revenue. It is the percentage by which gross profits exceed production costs. Gross margins reveal how
much a company earns taking into consideration the costs that it incurs for producing its products or
services. Gross margin is a good indication of how profitable a company is at the most fundamental
level, how efficiently a company uses its resources, materials, and labour. It is usually expressed as a
percentage, and indicates the profitability of a business before overhead costs; it is a measure of how
well a company controls its costs.
Gross margin measures a company's manufacturing and distribution efficiency during the production
process. The higher the percentage, the more the company retains on each dollar of sales to service its
other costs and obligations, the better the company is thought to control costs. Investors use the gross
profit margin to compare companies in the same industry and also in different industries to determine
what are the most profitable. A company that boasts a higher gross margin than its competitors and
industry is more efficient.
Gross profit margin = Gross profit / Revenue

4.3.2 Net Profit margin
Net profit margin (or profit margin, net margin, return on revenue) is a ratio of profitability calculated as

after-tax net income (net profits) divided by sales (revenue). Net profit margin is displayed as a
percentage. It shows the amount of each sales dollar left over after all expenses have been paid.
Net profit margin is a key ratio of profitability. It is very useful when comparing companies in similar
industries. A higher net profit margin means that a company is more efficient at converting sales into
actual profit.
Net profit margin = Profit (after tax) / Revenue
4.3.3 Return on Assets (ROA)

The return on assets ratio, often called the return on total assets, is a profitability ratio that measures
the net income produced by total assets during a period by comparing net income to the average total
assets. Return on assets is a key profitability ratio which measures the amount of profit made by a
company per dollar of its assets. In other words, the return on assets ratio or ROA measures how
efficiently a company can manage its assets to produce profits during a period.
Since company assets' sole purpose is to generate revenues and produce profits, this ratio helps both
management and investors see how well the company can convert its investments in assets into profits.
You can look at ROA as a return on investment for the company since capital assets are often the biggest
investment for most companies. In this case, the company invests money into capital assets and the
return is measured in profits.
ROA = Net Income after tax / Total assets (or Average Total assets)

4.3.4 Return on Equity (ROE)
The return on equity ratio or ROE is a profitability ratio that measures the ability of a firm to generate
profits from its shareholders investments in the company. In other words, the return on equity ratio
shows how much profit each dollar of common stockholders' equity generates.
So a return on 1 means that every dollar of common stockholders' equity generates 1 dollar of net
income. This is an important measurement for potential investors because they want to see how
efficiently a company will use their money to generate net income.ROE is also an indicator of how
effective management is at using equity financing to fund operations and grow the company.
ROE = Net income after tax / Shareholder's equity
4.3.5 Earnings per Share

Earnings per share, also called net income per share, is a market prospect ratio that measures the
amount of net income earned per share of stock outstanding. In other words, this is the amount of
money each share of stock would receive if all of the profits were distributed to the outstanding shares
at the end of the year.
Earnings per share are also a calculation that shows how profitable a company is on a shareholder basis.
So a larger company's profits per share can be compared to smaller company's profits per share.
Obviously, this calculation is heavily influenced on how many shares are outstanding. Thus, a larger
company will have to split its earning amongst many more shares of stock compared to a smaller
company.
EPS= Net Income-Preferred Dividend/Weighted Avg. Common Shares Outstanding

4.4 Efficiency Ratio
Efficiency ratios also called activity ratios measure how well companies utilize their assets to generate
income. Efficiency ratios often look at the time it takes companies to collect cash from customer or the
time it takes companies to convert inventory into cash—in other words, make sales. These ratios are
used by management to help improve the company as well as outside investors and creditors looking at
the operations of profitability of the company.
Efficiency ratios go hand in hand with profitability ratios. Most often when companies are efficient with
their resources, they become profitable. Wal-Mart is a good example. Wal-Mart is extremely good at
selling low margin products at high volumes. In other words, they are efficient at turning their assets.
Even though they don't make much profit per sale, they make a ton of sales. Each little sale adds up.
Here is the most common efficiency ratios include: Accounts Receivable Turnover, Working Capital
Ratio, Asset Turnover Ratio, Total Asset Turnover Ratio, Inventory Turnover and Days' sales in Inventory.
4.4.1: Total Asset Turnover
The asset turnover ratio is an efficiency ratio that measures a company's ability to generate sales from
its assets by comparing net sales with average total assets. In other words, this ratio shows how
efficiently a company can use its assets to generate sales.
The total asset turnover ratio calculates net sales as a percentage of assets to show how many sales are
generated from each dollar of company assets.
Total Asset Turnover Ratio= Net Sales/ Avg. Total Assets

4.4.2: Inventory Turnover Ratio

The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is managed by
comparing cost of goods sold with average inventory for a period. This measures how many times
average inventory is "turned" or sold during a period. In other words, it measures how many times a
company sold its total average inventory dollar amount during the year.
This ratio is important because total turnover depends on two main components of performance. The
first component is stock purchasing. If larger amounts of inventory are purchased during the year, the
company will have to sell greater amounts of inventory to improve its turnover. If the company can't sell
these greater amounts of inventory, it will incur storage costs and other holding costs.
The second component is sales. Sales have to match inventory purchases otherwise the inventory will
not turn effectively. That's why the purchasing and sales departments must be in tune with each other.
Inventory Turnover Ratio =Costs of Goods Sold/ Avg. Inventory
4.5 Solvency Ratio
Solvency ratios, also called leverage ratios, measure a company's ability to sustain operations
indefinitely by comparing debt levels with equity, assets, and earnings. In other words, solvency ratios
identify going concern issues and a firm's ability to pay its bills in the long term. Many people confuse
solvency ratios with liquidity ratios. Although they both measure the ability of a company to pay off its
obligations, solvency ratios focus more on the long-term sustainability of a company instead of the
current liability payments.
Solvency ratios show a company's ability to make payments and pay off its long-term obligations to
creditors, bondholders, and banks. Better solvency ratios indicate a more creditworthy and financially
sound company in the long-term.

4.5.1 Debt to Equity Ratio
The debt-to-equity ratio (debt/equity ratio, D/E) is a financial ratio indicating the relative proportion of
entity's equity and debt used to finance an entity's assets. This ratio is also known as financial leverage.
Debt-to-equity ratio is the key financial ratio and is used as a standard for judging a company's financial
standing. It is also a measure of a company's ability to repay its obligations. When examining the health
of a company, it is critical to pay attention to the debt/equity ratio. If the ratio is increasing, the
company is being financed by creditors rather than from its own financial sources which may be a
dangerous trend. Lenders and investors usually prefer low debt-to-equity ratios because their interests
are better protected in the event of a business decline. Thus, companies with high debt-to-equity ratios
may not be able to attract additional lending capital.
Debt to Equity Ratio = Total Liabilities/ Total Equity
4.5.2 Interest Coverage Ratio

The interest coverage ratio (ICR) is a measure of a company's ability to meet its interest payments.
Interest coverage ratio is equal to earnings before interest and taxes (EBIT) for a time period, often one
year, divided by interest expenses for the same time period. The interest coverage ratio is a measure of
the number of times a company could make the interest payments on its debt with its EBIT. It
determines how easily a company can pay interest expenses on outstanding debt.
Interest Coverage Ratio = EBIT/ Interest Expenses

4.5.3 Equity Ratio
The equity ratio is an investment leverage or solvency ratio that measures the amount of assets that are
financed by owners' investments by comparing the total equity in the company to the total assets.
The equity ratio highlights two important financial concepts of a solvent and sustainable business. The
first component shows how much of the total company assets are owned outright by the investors. In
other words, after all of the liabilities are paid off, the investors will end up with the remaining assets.
The second component inversely shows how leveraged the company is with debt. The equity ratio
measures how much of a firm's assets were financed by investors. In other words, this is the investors'
stake in the company. This is what they are on the hook for. The inverse of this calculation shows the
amount of assets that were financed by debt. Companies with higher equity ratios show new investors
and creditors that investors believe in the company and are willing to finance it with their investments.
Equity Ratio = Total Equity/ Total Assets

4.6 Market Performance

Ratio
Market Performance ratios are used to compare publicly traded companies' stock prices with other
financial measures like earnings and dividend rates. Investors use market performance ratios to analyze
stock price trends and help figure out a stock's current and future market value. In other words, market
performance ratios show investors what they should expect to receive from their investment. They
might receive future dividends, earnings, or just an appreciated stock value. These ratios are helpful for
investors to predict how many stock prices will be in the future based on current earnings and dividend
measurements.
4.6.1 Price-Earnings Ratio
The price earnings ratio, often called the P/E ratio or price to earnings ratio, is a market prospect ratio
that calculates the market value of a stock relative to its earnings by comparing the market price per
share by the earnings per share. In other words, the price earnings ratio shows what the market is
willing to pay for a stock based on its current earnings. Investors often use this ratio to evaluate what a
stock's fair market value should be by predicting future earnings per share. Companies with higher
future earnings are usually expected to issue higher dividends or have appreciating stock in the future.
Price-Earnings Ratio = Market Value Price per Share/Earnings per Share

4.6.2 Dividend Payout Ratio
The dividend payout ratio measures the percentage of net income that is distributed to shareholders in
the form of dividends during the year. In other words, this ratio shows the portion of profits the
company decides to keep funding operations and the portion of profits that is given to its shareholders.
Investors are particularly interested in the dividend payout ratio because they want to know if
companies are paying out a reasonable portion of net income to investors.
Dividend Payout Ratio = Total Dividends/Net Income

CHAPTER 5
Findings, Analysis,
Recommendations and
conclusion

5.1 Liquidity Ratio
Year 201 201 201 2013 2012 2011 2010 2009

6 5 4
Current 1.13 1.06 1.01 0.97 0.92 0.93 0.83 0.77
Ratio
Acid Test 0.80 0.57 0.40 0.61 0.44 0.57 0.42 0.37
Ratio
Table 5.1
Current Ratio
1.2
1.13
1.06
1 0.97 1.01
0.93 0.92
0.8 0.77 0.83
Current
0.6 Ratio
0.4
0.2
0
2014 2015 2016 2017 2018 2019 2020 2021
Chart 5.1.1
Current ratio matches current assets with current liabilities and tells us whether the current assets are
enough to settle current liabilities. Current ratio below 1 shows critical liquidity problems because it
means that total current liabilities exceed total current assets. Current ratio gives an idea of company's
operating efficiency. A high ratio indicates "safe" liquidity, but also it can be a signal that the company
has problems getting paid on its receivable or have long inventory turnover, both symptoms that the
company may not be efficiently using its current assets. The Standard current ratio is 2:1 which indicates
for every taka of current liabilities there must be 2 taka worth current assets maintained by the

company. The current ratio of BSRMS indicates that over the six years period the ratio is not satisfactory,
i.e. their ratio is less than 1. Then the company may have problems paying its bills on time. However,
low values do not indicate a critical problem but should concern the management. Although the ratio is
less than 1, but the trend over the 6 years is showing a positive changes (i.e. increase in inventories,
trade debtors, cash, advances, deposits, prepayments, due from affiliated companies) which suggests
BSRMS is gradually improving its current ratio. In 2015, it reached 1.06, but in 2016 it raised 1.13 .This
means BSRMS have the hope of bringing its current ratio to the standard level. So, this could be possible
if BSRMS becomes a bit more efficient in managing its current assets and current liabilities.
Quick/Acid Test Ratio

0.9
0.8 0.8
0.7
0.6 0.61
0.57 0.57 Quick/Acid Test Ratio
0.5
0.42 0.44
0.4 0.37 0.4
0.3
0.2
0.1
0
2014 2015 2016 2017 2018 2019 2020 2021
Chart-5.1.2
The acid test ratio measures the liquidity of a company by showing its ability to pay off its current
liabilities with quick assets. If a firm has enough quick assets to cover its total current liabilities, the firm
will be able to pay off its obligations without having to sell off any long-term or capital assets. Here, we
can see that the trend of acid test ratio of BSRMS is moving upward for three consecutive years then in
year 2012 it is reduced to 0.44 and in 2013 it increased to 0.61, In 2015 it increased to 0.57 & in 2016 it
jumped to 0.80 .Overall the acid test ratio of BSRMS is fluctuating; it is not stable . Higher acid test ratios
are more favorable for companies because it shows there are more quick assets than current liabilities.
A company with a quick ratio of 1 indicates that quick assets equal current assets. This also shows that
the company could pay off its current liabilities without selling any long-term assets. Obviously, as the
ratio increases so does the liquidity of the company. More assets will be easily converted into cash if
need be. This is a good sign for investors, but an even better sign to creditors because creditors want to
know they will be paid back on time.

5.2 Profitability Ratios
Year 2016 2015 2014 2013 2012 2011 2010 2009

Jan-Jun ------ ------- ------ ------ ------- -------
-------
Gross Profit 18.04% 13.52 7.28% 8.97% 4.94% 6.13% 8.77% 9.98%
Margin %
Net Profit 7.60% 6.44% 2.82% 3.30% 2.26% 2.69% 4.38% 3.62%
Margin
ROA 4.55% 8.40% 4.3% 5.22% 3.93% 4.96% 8.72% 6.17%
ROE 14.01% 20% 20.33% 32.85% 85.39% 200%

19.80
% 14.49%
EPS 3.48 6.09 3.18 3.50 2.53 2.46 2.82 1.68
Table 5.2: Profitability Ratios
Gross margin ratio
Gross margin ratio is a profitability ratio that measures how profitable a company can sell its inventory.
It only makes sense that higher ratios are more favorable. Higher ratios mean the company is selling
their inventory at a higher profit percentage. Here, we can easily see the difference throughout the
years of BSRMS through the trend line. In 2009, it was at its highest over the seven years, i.e. 9.98%, and
then afterwards it felt to almost 4.94% in 2012. This is the cause of increase in the cost of sales than the
revenue it generated. Cost of sales includes the BSRMS’s cost of its own production and finished goods
procurement & selling cost. In 2013, BSRMS managed to control its cost of sales then it lead its gross
profit margin to rise to 8.97%. This makes us clear that the company has effectively tried to manage its

cost of sales, that’s why it jumped to 8.97% and within a year it rose by 4.03%. But BSRMS couldn’t hold
on its position. In 2014, it felt to 7.28% but in 2016 it raised to 18.04%. Overall, the gross profit margin
was in an unhealthy position.
In 2015, it jumped to 13.52%.but this year, it jumped to 18.04%, it has shown a new ray of hope that in
future the ratio might go up.
Gross Profit Margin

18.04%
13.52%
9.98%
8.77% 8.97%
7.28%
6.13%
4.94%
2009 2010 2011 2012 2013 2014 2015 2016
Gross Profit Margin
Chart- 5.2.1
Net profit margin
Net profit margin is an indicator of how efficient a company is and how well it controls its costs. The
higher the margin is, the more effective the company is in converting revenue into actual profit. In the
chart, we can see that during 2010, the ratio increased to 4.38% then it felt to 2.26% within next two
years then in 2013, it rose to 3.30%. Though in 2014, it reduced to 2.82%, but in 2016 this year it jumped
to 7.60%. Overall position of BSRMS’s net profit margin in eight years was quite uncertain.

Net profit Margin

Net profit Margin
7.60%
6.44%
4.38%
3.62% 3.30%
2.69% 2.82%
2.26%
2009 2010 2011 2012 2013 2014 2015 2016
Chart- 5.2.2
Return on Assets
Return on Assets ratio measures how effectively a company is generating return from its investment in
assets. A higher ratio indicates higher earnings ability and also efficiency of organization in utilizing its
assets to generate earnings. The trend of ROA ratio of BSRMS shows that over the period of 2009 to
2014 the profitability condition had variation. In 2014, ROA had fallen to 4.30%, which was a negative
sign for the company. But in the recent year in 2015 company has managed to upgrade its ROA ratio to
8.40%, which is indeed a positive sign for the company but this year in 2016 , mainly the portion is
(January – June) and the percentage is 4.55% .

ROA
10.00%
9.00%
8.00%
7.00%
Percentage
6.00%
5.00%
4.00%
3.00%
2.00%
1.00%
0.00%
2009 2010 2011 2012 2013 2014 2015 2016
Chart- 5.2.3
Return on equity
Return on Equity measures how efficiently a firm is using the money of shareholders to generate profit
and grow the company. A higher ratio indicates that the firm is generating higher return by efficiently
allocating shareholders fund. The trend of ROE shows that BSRMS over the year 2009 to 2012 is not
performing well to generate higher return on shareholders’ fund. Between 2009 and 2010, the return
felt drastically by 414% which was due to increase in shareholder’s equity in 2010. But in 2009, the profit
was too high, which is not attainable after due to increase in cost of expenses. The decreasing trend of
ROE ratio indicates improper utilization of shareholders fund to generate earnings .Lower values are
generally unfavorable meaning that the company is inefficient in generating income on new investment.
But in recent two years, the return improved, though it decreased by 4.15% from 2013.In 2015 it
jumped to19.80% and in this recent year in 2016 , mainly the portion is (January – June) the percentage
is 14.01%.its only contained the portion of January to June, so it can be considered as a good.

ROE
45.90% 45.22%
ROE
28.22%
18.64% 19.80%
15.62% 14.49% 14.01%
2009 2010 2011 2012 2013 2014 2015 2016
Chart- 5.2.4
Earnings per Share

Earnings per share (EPS) are the portion of the company’s distributable profit which is allocated to each
outstanding equity share (common share). Earnings per share are a very good indicator of the
profitability of any organization, and it is one of the most widely used measures of profitability. Here,
BSRMS over the six years period, their EPS had fluctuation. If we look from the beginning, we can see
that it rose in 2010 then reduced in 2011, then again increased slightly in the next year. Again, in 2013,
EPS rose but in 2014 it felt slightly. In 2015, it has rapidly increased to 6.04%.but in 2016 the main
portion is only (January to June) is 3.84%, so it can be considered as a good. Overall, EPS of BSRMS is
more or less stable and they are trying effectively to satisfy their shareholders value.

EPS
7.00%
6.00% 6.09%
5.00%
EPS
4.00% 3.84%
3.50%
3.00% 3.18%
2.82%
2.46% 2.53%
2.00%
1.68%
1.00%
0.00%
2009 2010 2011 2012 2013 2014 2015 2016
Chart- 5.2.5
5.3 Efficiency Ratios

Year 2016 201 2014 2013 2012 2011 2010 2009
Jan-Jun 5 - - - - - -
-
Inventory Turnover 2.55 4.69 3.42 6.37 4.87 4.84 6.03 4.8
Total Assets Turnover 5.99 1.31 1.42 1.55 1.7 1.45 1.8 1.6
Table- 5.3
7.00% 6.37%
6.03%
6.00%
4.80% 4.84% 4.87% 4.69%
5.00%
4.00% 3.42%
3.00% 2.55%
2.00%
1.00%
0.00%
2009 2010 2011 2012 2013 2014 2015 2016
Inventory Turnover
Chart- 5.3.1

The inventory turnover ratio is an efficiency ratio that shows how effectively inventory is managed by
comparing cost of goods sold with average inventory for a period. This measures how many times
average inventory is "turned" or sold during a period. In other words, it measures how many times a
company sold its total average inventory dollar amount during the year. A low turnover implies poor
sales and, therefore, excess inventory. A high ratio implies either strong sales or ineffective buying. High
inventory levels are unhealthy because they represent an investment with a rate of return of zero. It
also opens the company up to trouble should prices begin to fall. Here, in the chart we can see the
change over the periods of BSRMS that is; it started with 4.8 in 2009 which tend to increase in 2010 to
6.03. Therefore in the period 2010, the inventory was sold more than earlier year. But after that in
recent two years it felt, which suggests that there were inefficiency in selling its inventory. In 2013,
inventory turnover was in its highest times over the periods. But, BSRMS couldn’t increase its ratio;
moreover it couldn’t even hold back its number of times of the previous year. In 2014 & 2015, its
average inventory increased, but in this recent year in 2016 the contained portion is (January – June) it is
2.55%. Which means there remained more inventory than its cost of sales. So it leads to fall in the ratio.
It would be better for BSRMS to keep its inventory low at a standard level.
Total Assests Turnover

Total Assests Turnover
5.99
1.6 1.8 1.45 1.7 1.55 1.42 1.31

2009 2010 2011 2012 2013 2014 2015 2016
Chart- 5.3.2
The asset turnover ratio is an efficiency ratio that measures a company's ability to generate sales from
its assets by comparing net sales with average total assets. In other words, this ratio shows how
efficiently a company can use its assets to generate sales. This ratio measures how efficiently a firm uses
its assets to generate sales, so a higher ratio is always more favorable. Higher turnover ratios mean the

company, BSRMS is using its assets more efficiently. Lower ratios mean that BSRMS isn't using its assets
efficiently and most likely have management or production problems. A ratio of 1 means that the net
sales of the company equal the average total assets for the year. In other words, the company is
generating 1 taka of sales for every taka invested in assets. BSRMS over the six years period got more
than 1 but less than 2, so they should try to increase its sales over the average total assets. This gives
investors and creditors an idea of how BSRMS is managed and uses its assets to produce products and
sales.
5.4 Solvency Ratios
Year 2016 2015 2014 2013 2012 2011 2010 2009

Jan-Jun
Debt to Equity 2.07 1.72 2.62 2.14 2.81 5.2 4.07 74.36
Interest Coverage 17.74 5.37 6.32 5.83 3.98 3.39 2.9 1.78
Equity Ratio 32.52% 36% 28% 27.5% 24.7% 13.8% 17.5% 1.3%
Table-5.4
Debt equity ratio
2016 2.07
2015 1.72
2014 2.62
2013 2.14
2012 2.81
2011 5.2
2010 4.07
2009 74.36
0 10 20 30 40 50 60 70 80
Debt Equity Ratio

Chart-5.4.1
Debt-to-Equity ratio is the ratio of total liabilities of a business to its shareholders' equity. It is a leverage
ratio and it measures the degree to which the assets of the business are financed by the debts and the
shareholders' equity of a business. Lower values of debt-to-equity ratio are favorable indicating less risk.
Higher debt-to-equity ratio is unfavorable because it means that the business rely more on external
lenders thus it is at higher risk, especially at higher interest rates. In the chart, it is clearly visible the
change of debt to equity ratio over the six year periods. In 2009, BSRMS was highly debt based
company; out of every 1 taka equity it had 74.36 debts, is in risky condition. In 2016 the portion
(January-June) is 2.07.But gradually its equity increased in line with its liabilities. So the liabilities they
are having are covered up with its increase in equity. Overall, the ratio is decreasing.
Interest coverage ratio
Interest Coverage
2016 17.74
2015 5.37
2014 6.32
2013 5.83
2012 3.98
Interest Coverage
2011 3.39
2010 2.9
2009 1.78
0 2 4 6 8 10 12 14 16 18
Chart-5.4.2
Interest Coverage Ratio, also known as Times Interest Earned Ratio (TIE), states the number of times a
company is capable of bearing its interest expense obligation out of the operating profits earned during
a period. Interest Coverage Ratio indicates the capacity of an organization to pay its interest obligations.
Interest coverage is an indication of the margin of safety for an organization before it runs the risk of

non-payment of interest cost which could potentially threaten its solvency. Over the years, the ratio is
increasing, which is a good indicator for BSRMS. In the period 2014, an interest cover of 3 implies that
the entity has sufficient profitability to bear thrice the amount of its current finance cost.But this recent
year in 2016 the portion is (January – June) is17.74%. Generally, BSRMS would aim to maintain interest
coverage of at least 2 times. If the interest cover is lower than 1.5 times, may suggest that, fluctuations
in profitability could potentially make the organization vulnerable to delays in interest payments.
Equity Ratio
Equity Ratio
2016 32.52%
2015 36.00%
2014 28.00%
2013 27.50% Equity Ratio
2012 24.70%
2011 13.80%
2010 17.50%
2009 1.30%
0.00% 5.00% 10.00% 15.00% 20.00% 25.00% 30.00% 35.00% 40.00%
Chart-5.4.3
The equity ratio is investment leverage or solvency ratio that measures the amount of assets that are
financed by owners' investments by comparing the total equity in the company to the total assets. In
general, higher equity ratios are typically favorable for companies. This is usually the case for several
reasons. Higher investment levels by shareholders shows potential shareholders that the company is

worth investing in since so many investors are willing to finance the company. A higher ratio also shows
potential creditors that the company is more sustainable and less risky to lend future loans. Equity
financing in general is much cheaper than debt financing because of the interest expenses related to
debt financing. BSRMS in six years had gradually increased its equity ratio, so higher equity ratios should
have less financing and debt service costs than companies with lower ratios.
5.5 Market Performance Ratios
Year 2016 2015 2014 2013 2012 2011 2010 2009

Jan-Jun - - - - - - -
Price-Earnings ratio 32.89 15.81 27.58 13.87 26.82 48.26 74.69 60.23
Dividend Payout ratio 0.65 0.49 0.47 0.43 0.59 0.61 0.71 0.89
Table-5.5
Price earnings ratio
Price Earnings Ratio

80.00%
70.00%
60.00%
50.00% Price Earnings Ratio
40.00% 74.69%
30.00% 60.23%
48.26%
20.00% 26.82% 27.58% 32.89%
10.00% 13.87% 15.81%
0.00%
2009 2010 2011 2012 2013 2014 2015 2016
Chart-5.5.1
The price to earnings ratio (P/E ratio) is the ratio of market price per share to earnings per share. The
P/E ratio is a valuation ratio of a company's current price per share compared to its earnings per share.
The P/E ratio tells how much the market is willing to pay for a company’s earnings. A higher P/E ratio in

2010 of BSRMS means that the market is more willing to pay for the earnings of the company and also
indicates that the market has high hopes for the future of the share and therefore it has bid up the
price. On the other hand, a lower price to earnings ratio in 2013 over other years indicates the market
does not have much confidence in the future of the share.But this recent year in 2016 the portion is
(January – June) is 32.89% which can be good.
Dividend payout ratio
0.89
0.9
0.71 Dividend Payout Ratio
0.8 0.65
0.61 0.59
0.7
0.6 0.47 0.49
0.5
0.4 0.3
0.3
0.2
0.1
0 Dividend Payout Ratio
2009 2010 2011 2012 2013 2014 2015 2016
Chart-5.5.2
Dividend payout ratio compares the dividends paid by a company to its earnings. The relationship
between dividends and earnings is important. The part of earnings that is not paid out in dividends is
used for reinvestment and growth in future earnings. Investors who are interested in short term
earnings prefer to invest in companies with high dividend payout ratio. On the other hand, investors
who prefer to have capital growth like to invest in companies with lower dividend payout ratio . Here
BSRMS’s dividend payout ratios throughout the seven years tend to reduce, means investors are getting
less dividend. Investors usually seek a consistent and/or improving dividends payout ratio. Here, it’s
moving downwards, so need to improve it. Again, the dividend payout ratio should not be too high. The
earnings should support the payment of dividends. If BSRMS pays high levels of dividends it may

become for it to maintain such levels of dividends if the earnings fall in the future. Dividends are paid in
cash; but high dividend payout ratio can have implications for the cash management and liquidity of the
company.
5.6 Summary of findings & their recommendations
Now in this competitive world, the competition is fierce and the economy is also becoming more
volatile. So BSRM Steels Ltd. should work hard to hold its position in the industry. So, the financial
performance I .e. Liquidity, Profitability, & Efficiency should be improved in order to hold its position.
From the above analysis, we can come to conclusion about the ratios.
Firstly, the Liquidity ratio which includes current and acid test ratio. Current ratio over the
period is in an improving condition, though it couldn’t still reach the standard current ratio. Acid
test ratio over the period is showing fluctuation, this means BSRMS is less liquid, in converting
its current assets into cash. So, it may face liquidity problem in terms of cash needed.
To improve the liquidity condition, BSRMS can-
 Monitor accounts receivables effectively to ensure that BSRMS is billing their clients properly
and whether they are receiving prompt payments.
 Negotiate longer payment terms with the vendors whenever possible to keep BSRMS money
Longer.
 Get rid of unproductive assets that BSRMS is just storing. The only reason it should spend money
on assets such as buildings, equipment and vehicles is to generate revenue.
Secondly, the Profitability ratio; Gross profit margin is showing a positive figure but for four
consecutive years it kept on falling. The Net profit margin is quite uncertain, it doesn’t have any
consistency but it is always above 2%. ROA is showing positive figure over the six years, though
the trend is not an improving one, it is varying year to year. ROE is in very critical condition over

the last five years. It dropped drastically in 2010 and couldn’t recover it; from then on the trend
is showing a downfall in each and every year. Next, the EPS is in a healthy position over the
years. So, profitability condition attracts the investors or else they may switch off to other
company and this may hamper the goodwill of BSRMS.
To improve the profitability condition, BSRMS can-
 Have close management of their costs can drive its profitability but not at the expense of the
quality of its products.
 As the competition is getting hard, the company should focus on the pricing of the product.
 One of the most obvious routes to increase profitability is to buy more effectively. Review the
supplier base regularly and see if it can buy the same raw materials more cheaply or efficiently.
Thirdly, the Efficiency ratio; Inventory turnover ratio varied in the years whereas total asset
turnover maintained its consistency throughout the period. More efficient management of
inventory will lead to more sales.
To improve the efficiency condition, BSRMS can-
 Set a better overall price for the products to increase demand, which in turn boosts sales and
inventory turnover.
 Call distributors to seek a better price for the products or materials you buy, to reduce your
inventory investment.
 Increase Revenue to improve asset turnover ratio. The assets might be properly utilized, but the
sales could be slow resulting in a low asset turnover ratio. The company needs to increase its
sales by more promotions and by quick movements of the finished goods.
 Make better inventory Management, the company needs to check its inventory management to
figure out the time spent in the movement of the goods throughout the process. If the
company’s delivery system is slow, there will be delays in getting the product to the customer
and collecting the payment on time.

Fourthly, the Solvency ratio is very satisfactory, the entire ratio is improving (debt to equity,
interest coverage and equity ratio). Better solvency ratios, indicates that BSRMS is more
creditworthy and financially sound company in the long-term.
To improve the solvency condition, BSRMS can-
 Though BSRM Steels is in the position of sound solvency but the term “risk” is involved in every
term. So Accounts & Finance Department should be alert , the management department should
operate their functions and operation considering their present position, their competitors and
what they actually deserve and last of all what will be their upcoming position in market.
Finally, the Market performance ratio; Price earnings ratio is good enough but dividend payout
ratio is falling very slowly. So, the market condition of BSRMS is not too bad, it is satisfactory
enough.
To improve the Market condition, BSRMS can-
 BSRMS should improve relationship with their dealers this will help in future a lot to expand
their scope in the market.
 They can expand their marketing area like advertising; this will ensure good better output.

Conclusion
Most of the steel Industry in Bangladesh is offering a wide array of financial services including trade and
commerce and some whole new services are being launched every year. BSRM Steels Ltd, a company of
difference, also has discovered new avenues to reach its goals. For the Brand name, BSRM Steels
producing the best quality steel products, continuously enhancing customer satisfaction and becoming a
reliable business partner of their Customers and Suppliers.
BSRMS should take extraordinary decision and diversify its management & HR so that in near future
when competition among Steels Company will serve, it can stand with its own identity.
Decisions method that may seem fit today may not work tomorrow. So all the Financial Institutions
must find their own method in order to sustain in the changing world. Central focus in this regard would
be to have a comprehensive Information Technology system, sufficient expertise and above all very
relaxed management to adopt new idea to update decisions techniques and HR methods.
Now BSRM Steels Ltd. is continuing its business operational growth through business innovation
successfully in Bangladesh through developing an image and goodwill among its clientele by offering its
excellent services. The success has been resulted from the dedication, commitment, and dynamic
leadership of its management. BSRMS has successfully grabbed a strong position as a highly progressive
and dynamic financial institution among the other steels company in Bangladesh.

Reference Books
 Ray H. Garrison, Eric W. Noreen; (2013-2014); Managerial Accounting; Mc Graw-Hilll Irwin
 Stephen A. Ross, Randolph W. Westerfield and Jeffrey Jaffe; (2011-2012); Corporate
Finance; Mc Graw-Hilll Irwin
 Financial Performance by Rory Knight & Marc Bertoneche
 Annual Reports of BSRM Steels Limited (Year 2009- Year 2013)
 Jay Way (nd) The Importance of a Company's Financial Statements – Demand media
Websites
 Steel Industry in Bangladesh, Wikipedia retrieved from http://en.wikipedia.org/wiki
 History of BSRM Steels Limited, retrieved from http://www.bsrm.com/financialinfo.com
 Steel maker plans big; (2011, 19thJanuary); The Daily Star, retrieved from
http://archive.thedailystar.net/newDesign/news-details.php?nid=170582
 BSRM Group (August, 2014). “Vision, Value, Group Profile.” History.
http://www.bsrm.com/
 Hasan Bazmi (nd) Bangladesh steel market, retrieved from

http://www.scribd.com/doc/167359538/Bangladesh-Steel-Market
 Financial ratios meaning, http://www.readyratio.com
Search Engine
 www.google.com
 www.yahoo.com


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A Study on BSRM Steels Limited

Internship Duration: 15 October 2016 to 15 January 2017

DEPARTMENT OF BUSINESS ADMINISTRATION