financial statement analysis of metronet bangladesh limited

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Executive Summary

This report is completed as a partial requirement of my internship. The purpose of this report

was to understand the various aspects & phases, which are involved in Financial Statement

Analysis. I have done my internship in a Networking Communication Company MetroNet

Bangladesh Limited incorporated in 2001, is a ‗joint Venture’ of Rahimafrooz Bangladesh

Limited (a group with a proud history of more than 50 years), Flora Telecom, and Mr. Ferdous

Azam Khan. The Group strongly believes in the principle of contributing back to the

community where it operates.

MetroNet is the first company to lay Fiber Optic Network for commercial use in Bangladesh.

The company is pioneer in offering network communication services to Enterprises, Multi-

Nationals, Financial Institutes, Telco, Wholesale Businesses, Govt. Agencies, Medical

Institutes, and Education Sector s. their vast and constantly growing footprint spans in 64

districts maintaining more than 3,000 seamless, high –quality connectivity from 200 Points of

Presence (POPs) across the country.

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Chapter: One

Introduction

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1.1 Introduction:

This report is the pre-requisite of the MBA under the instruction of Mr Shah Alam. An overall

Financial Statement Analysis of an organization on that reviews based on overall Financial

position and performance. In today‘s world, only academic education does not make a student

perfect to become competitive with the outside world. Internship is highly needed to gain idea,

knowledge and experience.

Dhaka International University, one of the reputed private universities in Bangladesh, has

designed the curriculum of the MBA course such a way that the international standard

graduates will be produced. After completing academic study, one student needs to go for

further internship program in a commercial organization. From this internship program

student get the opportunity to learn facing the real business world.

1.2 Background of the Study:

Bangladesh is one of the developing countries in the world. Internet helps people to gather

knowledge about any subject from its huge information system. It also helps us to

communicate with others within a moment. As an internet service provider in Bangladesh the

companies have to register with Bangladesh Telecommunication Regulatory Commission

(BTRC), and they have to take domain registration from any satellite company. Bangladesh

telecommunication regulatory commission controls 23 internet service providers. MetroNet

Bangladesh Limited is one of them. The history of MetroNet Bangladesh ltd. is not old

enough. It was established in 2001 by Mr. Ferdous Azam Khan with a corporate office and

Network Operating Centre (NOC) and some Employee. As a partner, Rahimafrooz group

invest 80%, Flora Telecom invest 10% of total investment. MNBL has three types of services

such as internet service, intranet service (data communication system) and IPTSP.

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1.3 Topic of the Report:

To write a report it is necessary to select a topic. A well-defined topic reflects what is going

on to be discussed throughout the report. The topic that has been assigned by my honorable

teacher Mr. Shah Alam is “Financial Statement Analysis of MetroNet Bangladesh Limited (MNBL)”.

1.4 Rational of the study:

Theoretical knowledge is not enough for business student, because there is a so far gap

between theoretical and practical knowledge. This internship mainly performs for diminishing

the gap between theoretical and practical field. The world is now going to be global,

competition between companies rising. I felt that of MetroNet Bangladesh Ltd. Is an excellent

area to gather some practical knowledge. When I worked with them practically I found many

terms which was just my bookish knowledge.

1.5 Objective of the Study:

1.5.1 Broad objective:

The broad objective of my study is to evaluate the overall Financial Statement Analysis of

MetroNet Bangladesh Ltd.

1.5.2 Specific objective:

In order to support the broad objectives needs to develop some specific objectives which will

eventually justify the broad ones. The specific objectives of this study are given below:

1. To provide a brief overview of MetroNet Bangladesh Ltd and their historical

background.

2. To analyze the financial Statement Analysis of MNBL

3. To utilize resources properly & effectively.

4. To analyze and evaluate management efficiency.

5. To evaluate progress of the business of the firm.

6. To evaluate operations of the firm.

7. To analyze overall Financial Statement.

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1.6 Scope and duration of the study:

The scope of this report will be an overview about the internet business and point-to-point

optical fiber connectivity as well as the company of concentration. This report is proposing a

suitable overall Financial Statement Analysis of MetroNet Bangladesh Ltd.

1.7 Methodology of the Study:

The methodology of the report includes direct observation, oral communication of the

employees of the accounting department and studying files and practical experience. This is

on job practical tactic.

This report contains both primary and secondary data.

Primary Data:

Conversation with the related employees.

One to one verbal communication with the heads of every department.

Key notes of stuff meetings.

Personal observation.

Secondary Data:

Journal

Web site: www.MetroNet.com

Annual Report of 2013 to 2015 of MNBL.

http://www.metronet.com/

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1.8 Limitations of the Study:

There were some limitations of the study that might have prevented in reaching more fruitful

result. The limitations are stated below:

Bangladesh is technologically undeveloped country with very little important information

are readily available. So, a huge effort was needed to collect the necessary information. It

resulted in some minor changes in the pre- conceived report design.

Every organization wants to maintain the confidentiality of the information. Because of

this reason, the managers and officers who were interviewed did not disclose much

information.

Lack of time.

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Chapter: Two

Company Profile

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2.1 MetroNet Bangladesh Ltd. (MNBL):

MetroNet Bangladesh Ltd. (MNBL) is a service-oriented organization. It seeks to provide

modern technologies services on the basis of consumer‘s need and want. As I mentioned

earlier that MNBL has different SBUs. Now I will go through those one by one. I will discuss

the background, history and activities of those.

2.1.1 Logo:

Visual Representation Symbolic Meaning

MN = MetroNet

B = Bangladesh

L = Limited

2.1.2 NOC:

Network Operations Center (NOC) is geocentrically located in Sonartori Tower at 12,

Sonargaon Road, Dhaka-1000. The NOC is equipped with state-of-the-art equipment

developed by ICT vendors of global repute and has switching capacity. This division is

divided into technical departments.

The departments are:

01. Admin

02. Network

03. Systems

04. Internet

05. Radio

06. Call center

07. Nationwide

08. Power

09. Store

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2.2 MetroNet Communication Network Industries:

In the early years, the reputation of MetroNet spread around because consumers wanted

product variation and different attributes. Communication network have become very much

popular in recent years. The MNBL meets the growing customer‘s needs and wants.

MetroNet Bangladesh Ltd. established an industry on two (2) office location NOC in Bangla

Motor and Head office in Gulshan area for support its clients. MetroNet is the first company

in Bangladesh which has installed the fully digital fiber optic based metropolitan data

communication network. For both retail and corporate customers, the network offers instant

access to very high bandwidth at greatly reduced set up and running cost.

2.3 Joint Venture Company:

MetroNet is a private limited company incorporated in year 2001. This organization is a joint

venture of Flora Telecom (a top ranking IT company of the country, visit:

www.floratelbd.com ), Rahimafrooz (the most admired corporate in Bangladesh, visit

www.rahimafrooz.com) and Mr. Ferdous Azam Khan (one of the foremost IT professional

in the country, contact: [email protected] ).

2.4 Historical Background of MNBL:

2.4.1 Flora Telecom Limited:

Flora Telecom Limited started as associate companies of Flora Group, the pioneering and

leading IT solutions provider in Bangladesh. Incorporated in 1975, Flora Limited is the

business partner in Bangladesh for most of the Globally established IT companies including

HP, Epson, IBM, Cisco System, Canon, Paradyne, Lucent Technologies, Microsoft, Novell,

Computer Associates etc. Flora Telecom is also a Grameen Phone distributor and has

associate companies specializing in network solutions, custom designed applications, banking

software etc.

http://www.floratelbd.com/

http://www.rahimafrooz.com/

mailto:[email protected]

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2.4.2 Rahimafrooz Bangladesh limited:

Rahimafrooz Bangladesh limited is a flagship company of Rahimafrooz. With over half a

century of successful business in the automotive and industrial battery market of Bangladesh,

Rahimafrooz is one of the largest and most respected business house in the country and enjoys

excellent repute in the business and financial communities. Rahimafrooz currently consists of

Rahimafrooz Batteries, Rahimafrooz Distributions, Rahimafrooz Superstores, Excel retreads,

Rahimafrooz Energy Services, Rahimafrooz CNG and a number of smaller businesses.

2.4.3 Ferdous Azam Khan:

Ferdous Azam Khan is the creative owner of MetroNet Project and also designed and

successfully deployed the subject optical fiber network system in the Capital City. He is a

Director and The Chief Executive Officer (CEO) of MetroNet.

2.5 Present Position of the organization and future plan:

Different corporate and individual companies seek large quantity of bandwidth for their

communication network purposes. They seek different product lines of new designs, which

only produced by MetroNet. The corporate level of MNBL‘s also conscious about the need

and demand. They also want to produce new design of product line. MNBL produces different

types of communication for Bank, ISP, and PSTN in Bangladesh. They produce new designs

product line, which have vast demand in market because of their high quality.

2.6 Organizational Structure:

The Organogram for MetroNet Bangladesh Ltd. is given in the end of the chapter. There are

seven Board of Directors who work independently. There are one Chairman, one Managing

Director and CEO who work independently.

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Organogram of MetroNet Bangladesh Ltd

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2.7 Vision, Mission, Motto of MetroNet Bangladesh Ltd:

Vision:

Be Preferred Company with employees will want to build a long-term career.

Mission:

MetroNet mission is to provide the customer the finest, fastest and quality network

communication. MetroNet‘s is trying to attract and maintain customers and serve the best.

MetroNet‘s services will exceed the expectations of their customers.

Motto:

Commitment

Hard work

Honesty

Knowledge

Service and

Quality

2.8 Financial Objective:

1. A double-digit growth rate for each future year.

2. Reduce the overhead cost through disciplined growth.

3. Continue to decrease the variable costs associated with production.

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Chapter: Three

MetroNet Bangladesh Limited Network

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MetroNet Bangladesh Limited Network

3.1 Networking Systems:

MetroNet is the first company in Bangladesh which has installed the fully digital fiber optic

based metropolitan data communication network. And MetroNet has the fastest

communication network within overall Bangladesh in 64 districts and 200 cities. We are

maintaining more than 100 plus pops in Dhaka. The block diagram is given below:

1.1 Figure: Block Diagram

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Now we are describing about our network:

3.2 NOC (Network Operation Centre):

We have used different types of Servers, Routers and switches to manage our network.

3.2.1 Servers: The function of a computer server is to store, retrieve and send computer files

and data to other computers on a network. Many businesses use a local network to connect a

number of computers. On a larger scale, the worldwide computer network known as the

Internet depends on a large number of servers located around the world. The files, data and

functionality of a given website is based on servers. We used different types of servers for

different types of requirement. According to our requirement we have used commonly

following servers:

1. Radius Server: Remote Authentication Dial-In User Service (RADIUS) is a

client/server protocol and software that enables remote access servers to communicate

with a central server to authenticate dial-in users and authorize their access to the

requested system or service.

2. Syslog Sever: Syslog is a way for network devices to send event messages to a logging

server – usually known as a Syslog server. The Syslog protocol is supported by a wide

range of devices and can be used to log different types of events.

3. Nagios Server: Nagios, now known as Nagios Core, is a free and open source

computer-software application that monitors systems, networks and infrastructure.

Nagios offers monitoring and alerting services for servers, switches, applications and

services.

4. DNS: DNS. (Domain Name System) The Internet's system for converting alphabetic

names into numeric IP addresses. For example, when a Web address (URL) is typed into

a browser, DNS servers return the IP address of the Web server associated with that

name.

5. Mail Server: A mail server (also known as a mail transfer agent or MTA, a mail

transport agent, a mail router or an Internet mailer) is an application that receives

incoming e-mail from local users (people within the same domain) and remote senders

and forwards outgoing e-mail for delivery.

6. Cacti: Cacti is a complete network graphing solution designed to harness the power of

RRDTool's data storage and graphing functionality. Cacti provide a fast puller, advanced

graph templating, multiple data acquisition methods, and user management features out

of the box.

7. TTS Server: A TTS Server is used for maintaining Ticket which is created when any

kind of problem raised.

8. FTP: An FTP Server is a piece of software that is running on a computer and uses the

File Transfer Protocol to store and share files. Remote computers can connect

anonymously, if allowed, or with a user name and password in order to download files

from this server using a piece of software called a FTP Client.

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9. DHCP: Dynamic Host Configuration Protocol (DHCP) is a network protocol that

enables a server to automatically assign an IP address to a computer from a defined

range of numbers configured for a given network.

10. MRTG: The Multi Router Traffic Grapher (MRTG) is a tool to monitor the traffic load

on network links. MRTG generates HTML pages containing PNG images which provide

a LIVE visual representation of this traffic. In addition to a detailed daily view, MRTG

also creates visual representations of the traffic seen during the last seven days, the last

five weeks and the last twelve months. This is possible because MRTG keeps a log of all

the data it has pulled from the router. This log is automatically consolidated so that it

does not grow over time, but still contains all the relevant data for all the traffic seen

over the last two years. This is all performed in an efficient manner.

3.3 Routers:

A router is a networking device that forwards data packets between computer networks.

Routers perform the traffic directing functions on the Internet. A data packet is typically

forwarded from one router to another through the networks that constitute the internet work

until it reaches its destination node. We used routers for different types of purposes. And we

have number of routers in our NOC for following reasons:

Intranet Router

Internet Management

Nationwide Inter district connectivity

Auto Redundancy

MPLS connectivity

Wi-Fi connectivity

3.3.1 Intranet Router: These routers are used for internal routing, backbone monitoring,

client monitoring and some other internal purposes.

3.3.2 Internet Management Router: These routers are responsible for internet bandwidth

control, limit and distribution. After receiving the internet Bandwidth from IGW (International

Gateway Services) these routers allocate in different services, limit the bandwidth according

to client requirement and monitor the bandwidth usage of client.

3.3.3 Nationwide inter district connectivity: These routers are used for nationwide inter

district connectivity which are connected those routers used in remote location (out of Dhaka)

through telco. These routers are connected by different types of tunneling technology. The

description of tunnel is outline below:

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01. EoIP Tunnel: Ethernet over IP (EoIP) Tunneling is a MikroTik Router OS protocol that

creates an Ethernet tunnel between two routers on top of an IP connection. The EoIP tunnel

may run over IPIP tunnel, PPTP tunnel or any other connection capable of transporting IP.

When the bridging function of the router is enabled, all Ethernet traffic (all Ethernet protocols)

will be bridged just as if there were a physical Ethernet interface and cable between the two

routers (with bridging enabled). This protocol makes multiple network schemes possible.

Network setups with EoIP interfaces:

Possibility to bridge LANs over the Internet

Possibility to bridge LANs over encrypted tunnels

Possibility to bridge LANs over 802.11b 'ad-hoc' wireless networks

1.2 Figure: EoIP Tunnel

02. GRE Tunnel: Generic Routing Encapsulation (GRE) is a tunneling protocol developed by

Cisco Systems that can encapsulate a wide variety of network layer protocols inside virtual

point-to-point links over an Internet Protocol network. A GRE tunnel is used when IP packets

need to be sent from one network to another, without being parsed or treated like IP packets by

any intervening routers. We use a GRE tunnel where IP tunneling without privacy is required -

- it's simpler and faster. Advantages of GRE tunnels include the following:

GRE tunnels encase multiple protocols over a single-protocol backbone.

GRE tunnels provide workarounds for networks with limited hops.

GRE tunnels connect discontinuous sub-networks.

GRE tunnels allow VPNs across wide area networks (WANs).

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3.4 Auto Redundancy Router:

A Computer sending information to the Internet usually delivers that information to a local

router or Layer-3 switch in the computer's local subnet, which in turn forwards the

information to another router, then to the Internet. The local router is usually the computer's

default gateway. If only one router is on the subnet and that router fails, the computer can't

talk to other network subnets or the Internet. To provide fault tolerance, you need two or more

routers on each subnet. However, this type of configuration requires the computer to support

multiple default gateways (i.e., the computer must be able to detect the availability of the

default gateway). If the default router fails, the computer must fail over to an available router.

IETF Request for Comments (RFC) 816 describes how the host detects a dead gateway and

switches to another gateway. If the master gateway fails, e.g. due to a hardware fault or any

kind of network problem, the backup gateway takes over the functionality of the master

gateway. The backup gateway remains in hot standby mode as long as the master gateway is

active. How the gateways behave in the event of a failure can be defined with a configurable

set of rules.

3.5 MPLS Router:

Multi-protocol Label Switching (MPLS) is a type of data-carrying technique for high-

performance telecommunications networks that directs data from one network node to the

next based on short path labels rather than long network addresses, avoiding complex lookups

in a routing table. MPLS provides these beneficial applications:

Virtual Private Networking (VPN)

Traffic Engineering (TE)

Quality of Service (QoS)

Any Transport over MPLS (AToM)

We are using these routers for Grameenphone, Banglalink and Airtel.

3.6 Wi-Fi Router:

As well as being able to provide wireless access to the web and other services on smartphones,

tablets and PCs, we can use these routers to make calls over the internet, saving on expensive

phone bills. You can also use it to access digital TV, using products such as Apple TV,

Amazon‘s Fire stick and Google‘s Chromecast. A wireless router works in the same way as the

router in a hard-wired home or business local area network (LAN), but allows greater mobility

for notebook or portable computers. The individual computers are equipped with small

wireless transceivers that can be plugged into either a Universal Serial Bus (USB) port or a PC

card slot. We basically use this router for guest.

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3.7 Switch:

Switches are the main devices in our network. We use switches for various purposes like client

distribution and backbone expansion. There are three types of switches in our network. These

are given below:

1. Server

2. Client

3. Transparent

Here Client and Transparent switches are known as distribution switch. We‘ll discuss how

switches are connected in this section earlier. We can have divided into two sections:

1. Logical and

2. Physical

At first we’ll discuss about logical portion.

3.8 Logical Section:

3.8.1 Core Switch: A core switch is a high-capacity switch generally positioned within the

backbone or physical core of a network. Core switches serve as the gateway to a wide area

network (WAN) or the Internet - they provide the final aggregation point for the network and

allow multiple aggregation modules to work together. This switch is known as the Server in

the network. This is a Layer 3 switch and responsible for any kind routing, switching and

implementation.

1.3 Figure: Core Switch

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Each and every distribution switches are directly or indirectly connected with the Core switch.

For backbone, we have applied MSTP protocol and for client we have applied VLAN concept.

3.8.2 Topology: From the block diagram, we may easily realize that we have spread on

MESH topology.

A mesh network is a network topology in which each node relays data for the network. All

mesh nodes cooperate in the distribution of data in the network. Mesh networks can relay

messages using either a flooding technique or a routing technique that employs one of two

decentralized connection arrangements: full mesh topology or partial mesh topology. In a full

mesh topology, each network node (workstation or other device) is connected directly to each

of the others. In a partial mesh topology, some nodes are connected to all the others, but others

are only connected to those nodes with which they exchange the most data. We used partial

mesh topology.

3.8.3 MSTP: Multiple Spanning Tree Protocol (MSTP) was first specified in IEEE 802.1s and

is standardized in IEEE 802.1Q. MSTP enables multiple VLANs to be mapped to the same

spanning-tree instance, reducing the number of spanning-tree instances needed to support a

large number of VLANs.

Multiple Spanning Tree Protocol (MSTP) was first specified in IEEE 802.1s and is

standardized in IEEE 802.1Q. MSTP enables multiple VLANs to be mapped to the same

spanning-tree instance, reducing the number of spanning-tree instances needed to support a

large number of VLANs. MSTP provides multiple forwarding paths for data traffic and

enables load balancing. It improves the fault tolerance of the network because a failure in one

instance, or forwarding path, does not affect other instances.

It may be necessary to have different topologies for different VLANs, for load-sharing or

other purposes. MSTP enables the grouping of multiple VLANs with the same topology

requirements into one MST instance (MSTI). Instances are not supported in STP or RSTP, so

those two versions have the same spanning-tree in common for all of the VLANs.

In MSTP, all of the interconnected bridges that have the same MSTP configuration comprise

an MST region. An MSTP configuration consists of the configuration name, the configuration

revision, and the mapping of VLANs to MSTIs.

There is a common spanning-tree (CST) instance that spans all regions and allows different

regions to communicate between themselves. The CST is also used for traffic within the

region for any VLANs not covered by an MSTI.

MSTP has a backward compatibility mode in which it can fall back to STP or RSTP operation

on links with bridges that support only STP or RSTP.

The maximum number of MSTP instances supported in Juniper Networks MX Series 3D

universal Edge Routers is 64.

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VLAN: A virtual LAN (VLAN) is any broadcast domain that is partitioned and isolated in a

computer network at the data link layer (OSI layer 2). LAN is an abbreviation of local area

network. To subdivide a network into virtual LANs, one configures a network switch or

router.

VLAN Network: A VLAN is a group of devices on one or more LANs that are configured to

communicate as if they were attached to the same wire, when in fact they are located on a

number of different LAN segments. Because VLANs are based on logical instead of physical

connections, they are extremely flexible.

VLAN ID: VLAN Tagging is the practice of inserting a VLAN ID into a packet header in

order to identify which VLAN (Virtual Local Area Network) the packet belongs to. More

specifically, switches use the VLAN ID to determine which port(s), or interface(s), to send a

broadcast packet to.

How VLAN Works: Like a router, it partitions the network into logical segments, which

provides better administration, security, and management of multicast traffic. Each VLAN in a

network has an associated VLAN ID, which appears in the IEEE 802.1Q tag in the Layer 2

header of packets transmitted on a VLAN.

Purposes: The basic reason for splitting a network into VLANs is to reduce congestion on a

large LAN. To understand this problem, we need to look briefly at how LANs have developed

over the years. Initially LANs were very flat—all the workstations were connected to a single

piece of cable, or to sets of chained hubs.

3.9 Physical Section:

We have 115 pops in Dhaka. Most of the distribution switches are situated in a pop. Each pop

is connected with another pop by optical fiber medium using media converter. Figure shows

the typical block diagram.

1.4 Figure: Block diagram of Physical connectivity

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3.9.1 POP: A point of presence is a physical location, either part of the facilities of a

telecommunications provider that the ISP rents or a separate location from the

telecommunications provider that houses servers, routers, ATM switches and digital/analog

call aggregators. Pops are used to serve the client in different are which is directly or

indirectly connected with core switch in NOC.

3.9.2 Optical fiber: Fiber optics (optical fibers) are long, thin strands of very pure glass about

the size of a human hair. They are arranged in bundles called optical cables and used to

transmit signals over long distances. Fiber optic data transmission systems send information

over fiber by turning electronic signals into light.

3.9.3 Media Converter:

Media converter characteristics:

Expands network distances with the conversion of UTP to fiber and the extension of

fiber links

Retains investments in pre-existing devices

Boosts the potential of present fiber with WDM wavelengths

New applications for media converters:

Remotely handled converters and multi-port switch configurations

Conversion of DM wavelengths to enhance the bandwidth capacity

Facilitate fiber-to-the-desktop

Backbone and all the clients are connected in the same way according to block diagram. We

are serving a single client from a single switch port.

We have to keep all the records of fiber. We have kept the all the record using AutoCAD

software in three different sections which are given below:

1. Latest Map

2. Distribution and

3. Backbone

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01. Latest Map: We use latest map to keep the record of all clients and backbone and other

information. For Example: There are a lot of fiber jointer exist in network. Latest MAP

shows us. Where are these jointers located and which way fiber goes through the pop or

client.

1.5 Figure: Distribution MAP

02. Distribution: This document is used for which fiber used for which client from the pop

end and it distributed from the pop to client end.

1.6 Figure: Distribution MAP

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03. Backbone: We have kept all information and record about the backbone in this section.

Backbone NOC to pop and pop to pop. We have more than two redundancy foes an

individual pop. All the records are kept in this section.

1.7 Figure: Backbone MAP

3.9.4 Out of Dhaka: We are connected with Telco‘s E1 or Router from any of our Switch

port. Generally, we have settled up a distribution switch in each Telco. Each switch port

severs an individual remote area. At the remote area, from Telco we have received our signal

through a router and then distributed with distribution switch. We have already discussed

about this routers function (EoIP Tunnel, GRE Tunnel etc.). Each remote area is directly or

indirectly connected with Dhaka.

Conclusion: At present, we are able to connect you to virtually anywhere in the country with

Point to Point or Multi-Point Connectivity offering different services such as Dedicated

Internet Access, Unified Communications (Data, Voice & Video) Services managed and

supported by our experienced & certified professionals trained in understanding the respective

data transmission environment, including local regulations and procedures.

With our converged network infrastructure that cost-effectively delivers new and future

services. Our network supports the bandwidth and network requirements for any organizations

small, medium or large. Our infrastructure allows us to offer key services such as Level 3

(MPLS IP VPN), Level 2 (VPLS), and Level 1 (Optical VPN) VPN services. By combining

innovation, advanced technology, experience we are able to offer network services for secure

banking On-Line Transactions, IP VPN, MPLS VPN or flexible Ethernet design to various

organizations.

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Chapter: Four

Financial Statement Analysis

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2015 2014 2013

Non-Current Assets:

Property, Plant & Equipment Less

accumulated depreciation 110,617,245 117,932,879 121,387,333

Intangible Assets 2,395,214 3,246,094 4,096,974

Investment - - 1,362,604

Current Assets: 119,008,857 117,422,524 89,904,009

Inventories 2,846,651 1,199,232 1,613,457

Accounts Receivable 69,927,071 77,996,657 63,037,500

Advances, Deposits & Pre-Payments 20,651,532 21,957,263 15,427,297

Advance Income Tax 17,250,527 8,490,368 4,675,357

Cash & Cash Equivalents 8,333,076 7,779,005 5,150,398

Current Liabilities: 162,373,596 167,788,721 131,931,430

Liabilities for Supplies 22,720,814 17,903,405 23,906,733

Liabilities for Expenses 73,130,715 69,789,681 44,002,170

Other Liabilities 4,463,516 1,827,289 7,364,904

Overdraft from Prime Bank Ltd. 40,215,310 38,091,141 22,688,481

Term Loan ( Current portion ) 18,404,467 21,088,168 22,941,021

Lease Finance Loan ( Current Portion ) 3,438,773 19,089,037 11,028,121

Net Current Assets (43,364,739) (50,366,197) (42,027,421)

Total Assets 69,647,720 70,812,776 84,819,490

Equity & Liabilities:

Shareholder's Equity

Share Capital 53,809,200 44,841,000 44,841,000

Retained Earnings 14,724,626 16,685,446 11,349,186

General Reserve 842,811 842,811 -

Tax Holiday Reserve - - 842,811

Total Shareholder's Equity 69,376,637 62,369,257 57,032,996

Non-Current Liabilities:

Term Loan ( Long Term Portion) 271,083 6,665,647 13,657,374

Lease Finanace Loan ( Long Term Portion ) - 1,777,871 14,129,120

Total Liabilities 69,647,720 70,812,776 84,819,490

Property and AssetsAmount in Taka

MetroNet Bangladesh Limited

Statement of Financial Position

4.1 Financial Statement of MetroNet Bangladesh Ltd:

Financial Statements means every business concern wants to know the various financial

aspects for effective decision making. The preparation of financial statement is required in

order to achieve the objectives of the firm as a whole. The term financial statement refers to

an organized collection of data on the basis of accounting principles and conventions to

disclose its financial information.

Source: Annual Reports of MetroNet Bangladesh Ltd

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2015 2014 2013

Revenue ( Net off Vat ) 250,342,988 235,482,473 184,067,007

Less - Cost of Revenue 58,468,188 52,617,273 48,529,608

Depreciation & Amortization 25,527,365 29,393,100 17,912,993

Direct Operating Expenses 69,171,977 63,039,186 50,992,411

153,167,530 145,049,559 117,435,012

Gross Operating Profit/Loss 97,175,458 90,432,914 66,631,995

Less- General and Administrative Expenses 74,535,229 66,506,081 48,016,838

Add-Non Operating Income 254,997 49,229 1,724,999

Net Profit/(Loss) before Interest & Tax 22,895,226 23,976,062 20,340,156

Less - Interest Expenses 9,533,463 12,586,022 11,490,436

IP Telephony Service Profit/(Loss) Before Tax (2,581,180) (2,037,803) (833,912)

Profit/(Loss) Before Tax 10,780,583 9,352,237 8,015,808

Tax Liability 3,773,204 4,015,976 3,845,637

Net Profit/(Loss) After Tax 7,007,379 5,336,261 4,170,171

Amount in TakaProperty and Assets


Statement of Comprehensive Income

4.2 Income Statement of MetroNet Bangladesh Ltd:


Page - 28

Particulars Share Capital General Reserve Capital Reserve Retained Earnings Total

Balance al July 1, 2014 44,841,000 842,811 - 16,685,447 62,369,257

Issue of Share 8,968,200 - - (8,968,200) -

Net profit/(Loss) during the year - - - 7,007,379 7,007,379

Balance at June 30, 2015 53,809,200 842,811 - 14,724,626 69,376,637


Balance al July 1, 2013 44,841,000 842,811 - 11,349,186 57,032,996


Balance at June 30, 2014 44,841,000 842,811 - 16,685,447 62,369,257


Balance al July 1, 2012 42,302,800 842,811 - 9,717,214 52,862,825

Issue of Share 2,538,200 - - (2,538,200) -


Balance at June 30, 2013 44,841,000 842,811 - 11,349,186 57,032,996


Statement of Changes in Equity

4.3 Statement of Changes in Equity:


Page - 29

2015 2014 2013

A) Cash Flow From Operating Activities

Cash Receipts from Customer 268,166,650 223,035,346 184,616,312

Miscellaneous Receipt 34,997 49,229 1,724,999

Cash Paid to Supplies and Employees (207,585,871) (180,226,322) (153,227,070)

Interest Paid (9,533,463) (12,586,022) (11,490,436)

TDS Paid (8,760,160) (3,815,011) (2,279,011)

Net Cash provided/(Used) by Operating Activities 42,322,153 26,457,220 19,344,794

B) Cash Flow From Investing Activities

Acquisition of Property, Plant & Equipment (17,385,851) (26,815,585) (36,439,395)

Investment in IP Telephonony Business - - -

Investment in Enterprise Solution Business - - -

Net Cash provided/(Used) by Investing Activities (17,385,851) (26,815,585) (36,439,395)

C) Cash Flow Financing Activities

Loan term Loan ( Paid)/Received (10,143,678) (5,414,227) 20,660,875

Loan Paid to ULC ( Paid)/Received (17,428,135) (4,290,332) 3,384,327

Short term Loan ( Paid)/Received 1,065,413 (3,430,353) 357,039

Short term Loan (OD) ( Paid)/Received 2,124,169 16,121,884 (3,266,781)

Net Cash provided/(Used) by Financing activities (24,382,231) 2,986,972 21,135,460

D) Net increase/(decrease) in Cash and Cash Equivalents 554,071 2,628,607 4,040,859

E) Opening Cash and Cash Equivalents 7,779,005 5,150,398 1,109,539

F) Closing Cash and Cash Equivalents 8,333,076 7,779,005 5,150,398


Cash Flow Statement

ParticularsAmount in Taka

Direct Method

4.4 Cash Flow Statement of MetroNet Bangladesh Ltd:


Page - 30

4.5 Notes to the Financial Statement:

4.5.1 Reporting Entity:

01. Legal form of the company:

MetroNet Bangladesh Limited was incorporated as a private limited company on 25 March

2001 under the companies Act, 1994 vide registration 2001.

02. Address of company office:

MetroNet Bangladesh Limited having its registered office at Sonartori Tower (18th

Floor), 12,

Sonargaon Road, Dhak-1000 and Head office at PBL Tower (13th

Floor), New Gulshan North

C/A, Dhaka-1212.

03. Nature of Business Activities:

The principal activities of the company are to establish digital data communication network by

using 100% fiber optic backbone. The company also offers various IT services such as unified

communication (Voice, Video & data), IT managed services, Enterprise network

security(NGFW), the telephony, video Conferencing, Network architecture, IT audit &

consultancy. The commercial operation of the company has started from 2003.

4.5.2 Basis of Preparation, presentation and disclosures of Financial Statement:

01. Statement of compliance: The financial statements have been prepared and disclosers of

information made in accordance with Bangladesh Accounting standards (BAS‘s), Bangladesh

Financial Reporting Standards (BFRS‘s) and as per requirements of the companies Act 1994

and other applicable and regulations.

02. Basis of measurement: The financial statements have been prepared on the historical cost

basis. Exceptions are financial assets and liabilities which are designated at fair value.

03. Basis of Reporting: The financial statements are prepared and presented for external

users by the company in accordance with identified financial reporting framework.

Presentation has been made in compliance with the requirements of BAS-1 ―Presentation

of Financial Statements‖ the financial statements comprise of:

a. A Statement of financial position

b. A Statement of comprehensive income statement

c. A statement of changes in equity

d. A Statement of cash flows statement

Page - 31

4.5.3 Other Regulatory Compliances:

The Companies are also required to comply with the following major laws and regulations

along with the companies Act 1994:

a. The Income Tax ordinance, 1984

b. The Income Tax Rules, 1984

c. The Value-Added Tax Act, 1991

d. The Value-Added Tax Rules, 1991

e. The Customs Act, 1969

f. Bangladesh labour Law, 2006

4.5.4 Applicable Accounting Standards:

a. BAS-1 Presentation of Financial Statement

b. BAS-2 Inventories

c. BAS-7 Statement of Cash Flows

d. BAS-8 Accounting policies, Changes in Accounting Estimates and Errors

e. BAS-16 Property, Plant and Equipment

f. BAS-18 Revenue

g. BAS-19 Employee Benefits

h. BAS-36 Impairment of Assets

i. BAS-37 Provisions, Contingent Liabilities and Contingent Assets

j. BAS-38 Intangible Assets

k. BAS-39 Financial Instruments: Recognition and Measurement

4.5.5 Functional and presentational currency and level of precision:

The financial statements are prepared in Bangladesh Taka (Taka/Tk.), which is the company‘s

functional currency. All financial information‘s are presented in Taka and has been rounded to

the nearest Taka.

Page - 32

4.5.6 Going concern:

The Company has adequate resources to continue in operation in the foreseeable future. For

this reason, going concern basis is adopted in preparing the financial statements. The current

resources of the Company provide sufficient fund to meet the present requirements of its

existing business.

4.5.7 Significant Accounting Policies:

The accounting policies set out below have applied consistently to all periods presented in the

financial statements.

Property, Plant & Equipment: Freehold assets are recognized at cost less accumulated

depreciation.

4.5.8 Recognition and Measurement:

All fixed assets are stated at cost less accumulated depreciation as per ―BAS-16‖ Property,

Plant & Equipment‖. The cost of acquisition of assets comprise of purchase price and are

directly attributable to cost for bringing he assets to its working condition for its use inclusive

of inward freight, duties, non-refundable taxes etc.

4.5.9 Subsequent Cost:

The cost of replacing part of an item of property, plant & Equipment is recognized in the

carrying amount of the item, if it is probable that the future benefit embodied within the part

will flow to the company and its cost can be measured reliably. The costs of the day to day

servicing of property, Plant & Equipment are recognized in profit and loss as incurred.

4.5.10 Depreciation:

Depreciation on freehold fixed assets is charged on straight-line method at normal rates

varying from 10% to 20% during the year.

4.5.11 Intangible Assets:

01. Recognition and measurement: Intangible Assets that are acquired by the company

and have finite useful lives are measured at cost less accumulated amortization and

accumulated loss, if any. Intangible Assets are recognized when all the conditions for

recognition as per BAS-38: ―Intangible Assets‖ are met. The cost of an intangible asset

comprises its purchase price and any directly attribute cost of prepared the asset for its

intended use. In this financial statement, Intangible Assets represents the cost of

Network design provided by Mr. Ferdous Azam Khan one of the sponsor shareholder

which are stated initially at cost.

Page - 33

02. Subsequent Costs: Subsequent expenditure is capitalized only when it increases the

future economic benefits embodied in the specific asset to which it relates. All other

expenditures are recognized in profit or loss as incurred.

03. Amortization: Amortization is recognized in profit or loss on a straight-line basis over

the estimated useful lives of intangible assets, from the date that they are available for

use. The estimated useful lives and rates of amortization are:

4.5.12 Inventories Assets:

Inventories comprise various Media Converter, Switch, Router, Cables, IP Phone, Battery

Chassis and others. There are stated at the lower cost and net realizable value in accordance

with BSA-2.

The cost is calculated on average method consistently. Cost comprise expenditure incurred in

the normal course of business in bring such inventories its location and condition.

4.5.13 Cash and Equivalents:

Cash in hand and cash at banks have been considered as cash and cash equivalents for the

preparation of these financial statements, which were held and available for use by company

without any restriction and there was insignificant risk of changes in value of the same.

4.5.14 Cash flow statement:

Statement of cash flows is prepared principally in accordance with BAS 7(Cash Flow

Statement) and the cash flow from operating activities have been presented under direct

method.

4.5.15 Financial Assets:

The company initially recognizes loans and receivable and deposits on the date that they are

originated. All other financial assets are recognized initially on the trade date, which is the

date the group becomes a party to the contractual provisions of the instrument.

The company derecognizes a financial asset when the contractual rights to the cash flow from

the asset expire, or it transfer the rights to receive the contractual cash flows on the financial

asset in a transaction in which substantially the risks and rewards of ownership of the financial

asset are transferred.

Financial assets include short term investments, Trade and other receivable, advances,

deposits and prepayments, loan or related companies and cash and bank balance etc.

Page - 34

4.5.16 Financial Liabilities:

The company recognizes all financial liabilities on the trade date which is the date the group

becomes a party to the contractual provisions of the instrument. The group derecognizes a

financial liability when its contractual obligations are discharged, cancelled. Financial

liabilities comprise trade creditors and other financial obligations.

4.5.17 Employee’s Benefit:

There is and no written service rules in the company and no management decision to pay long

term benefit to the employee‘s other than monthly salary for which the compliance of BAS-19

was not possible to implement in the company.

4.5.18 Revenue Recognition:

The revenue during the year represents revenue arising from providing various services which

are recognized when invoices are made against the services provided to the respective

customer and after satisfying all the conditions for revenue recognition as provided in BAS 18

―Revenue Recognition.‖

4.5.19 General:

i. Prior year‘s figures have been rearranged wherever considered necessary to ensure

comparability with the current year.

ii. Bracket figures denote negative.

Page - 35

2015 2014 2013

Sales Revenue (Tk.) 250,342,988 235,482,473 184,067,007

Production cost (Tk.) 58,468,188 52,617,273 48,529,608

Gross Profit/Loss (Tk.) 97,175,458 90,432,914 66,631,995

Net Profit (Tk.) 7,007,379 5,336,261 4,170,171

Amount in TakaParticulars

4.6 Comparative Profitability Analysis of MetroNet Bangladesh Ltd.

Three year‘s comparative statements of MNBL from 2013 to 2015 are given below:

Table: Three year’s Comparative Statement of MetroNet Bangladesh Ltd.


From the following table it is found that profitablity of MNBL. In the fiscale year of 2013 its

net profit 4,170,171 to the next year sales is high but profit is decrease for its production cost ,

again in the next year profit is increase. In fiscal year 2014 and 2015 profit is very high then

previous year.

.4.7 Ratio Analysis:

Financial ratio analysis has been used to assess company performance for almost as long as

modern share markets have been around. Fundamental analysis and financial ratio analysis, as

you can imagine, is a pretty powerful thing and is essential for successful investing. The ratios

analysis is the most powerful tool of financial statement analysis. A ratio simply means one

number expressed in terms of another. A ratio is a statistical yardstick by means of which

relationship between two or various figures can be compared or measured. Ratios can be

found out by dividing one number by another number. Ratios show how one number is related

to another.

Different Types of Ratio:

Ratio analysis is done to compare or evaluation the financial performance over the years. This

analysis mainly deals with some fields those liquidity ratio, profitability ratio, solvency ratio,

and efficiency ratio and so on.

Page - 36

2015 2014 2013

Current Assets 119,008,857 117,422,524 89,904,009

Current Liabilities 162,373,596 167,788,721 13,931,430

Current Ratio 0.73 0.70 0.68

YearAmount in Taka

Current Asset

Current Liabilities

4.7.1 Liquidity Ratios:

Liquidity ration provide information about a company‘s ability to meet its short-term financial

obligation and also to meet unexpected needs for cash. For inter-company analysis ratios are

below:

Current Ratio:

Formula: Current Ratio=

Interpretation: Current ratio for the year 2013, 2014 & 2015 are 0.68, 0.70 & 0.73

respectively compared to standard ratio 2.1 this ratio is lower which shows low short term

liquidity efficiency at the same time holding less than sufficient current assets mean inefficient

use of resources.

Page - 37

2015 2014 2013

Cash+Short Term Investment + A/R 78,260,147 85,775,662 69,550,502

Current Liabilities 162,373,596 167,788,721 13,931,430

Acid Test Ratio 0.48 0.51 0.53

YearAmount in Taka

Cash + Short Term Investment + A/R

Current Liabilities

Acid Test Ratio:

The Acid-test (Quick) ratio is a measure of a company‘s immediate short-term liquidity.

Formula: Acid Test Ratio=

Interpretation: Acid test ratio is a more conservative look at a company's liquidity because is

taking in the consideration only the most liquid assets

Page - 38

2015 2014 2013

Net Credits Sales 250,342,988 235,482,473 184,067,007

Average Accounts Receivable 73,961,864 70,517,078 63,037,500

A/R Ratio 3.38 times 3.33 times 2.92 times

YearAmount in Taka

Net Credit Sales

Average A/R

Accounts Receivable Turnover:

Accounts receivable ratio is an activity ratio that means how many times a company can turn

accounts receivable into cash during a period. It measures liquidity by how quickly a company

can convert certain assets to cash.

Formula: Accounts receivable turnover=

Interpretation: MetroNet‘s accounts receivable turnover has a changing trend year to year. In

2013 MNBL Accounts receivable ratio was 2.92 times that means it was very efficient.

Page - 39

2015 2014 2013

Cost of Goods Sold 58,468,188 52,617,273 48,529,608

Average Inventory 2,022,942 1,406,345 1,613,457

Inventory Ratio 28.9 37.41 30.08

YearAmount in Taka

Cost of goods sold

Average Inventory

Inventory Turnover:

Inventory turnover ratio measures how many times a company's inventory is sold and replaced

over a period. This ratio evaluates the liquidity of the firm's inventory. It also helps to

determine how sales can be increased through inventory control. The standard inventory

turnover ratio is 4:1. Generally, a low turnover ratio involves poor sales therefore end up with

excess inventory. On the contrary.

Formula: Inventory Turnover=

Interpretation: MetroNet‘s inventory high turnover ratio implies company is very strong in

selling inventory or ineffective buying. Its shows that in 2014 company‘s sales was increased.

Page - 40

Net Income

Net Credit Sales

2015 2014 2013

Net Income 7,007,379 5,336,261 4,170,171


Profit Margin Ratio 3% 2% 2%

Amount in TakaYear

4.7.2 Profitability Ratio:

Profitability ratio is the net result of a number of policies and decisions. This section of the

discusses the different measures of corporate profitability and financial performance. These

ratios, much like the operational performance ratios, give users a good understanding of

how well the company utilized its resources in generating profit and shareholder value. The

long-term profitability of a company is vital for both the survivability of the company as

well as the benefit received by shareholders. It is these ratios that can give insight into the

all-important "profit". Profitability ratios show the combined effects of liquidity, asset

management and debt on operating results. These ratios examine the profit made by the firm

and compare these figures with the size of the firm, the assets employed by the firm or its

level of sales.

Profit Margin Ratio:

Net Profit Margin gives us the net profit that the business is earning per taka of sales. This

margin indicates the profit after all the coasts have been incurred it shows that what % of

turnover is represented by the net profit.

Formula: Profit Margin=

Interpretation: MetroNet‘s profit margin increase in the ratios indicates that a company is

producing higher net profit of sales than before.

Page - 41

2015 2014 2013


Average Total Asset 235,311,406 227,676,208 216,750,920

Asset Turnover Ratio 1.06 1.03 0.84

YearAmount in Taka

Net Credit Sales

Average Total Assets

Asset Turnover:

The amount of sales generated for every taka‘s worth of assets. It is calculated by dividing

sales in taka‘s by assets in dollars. Asset turnover measures a firm's efficiency at using its

assets in generating sales or revenue - the higher the number the better. It also indicates pricing

strategy: companies with low profit margins tend to have high asset turnover, while those with

high profit margins have low asset turnover.

Formula: Asset turnover=

Interpretation: The Return on Equity was maximum in 2015 but decreased in 2013 and

went down more in 2013. This again may have happened due to the issue of more long-

term debt in 2014 and 2015.

Page - 42

Net Income

Average Total Assets

2015 2014 2013

Net Income 7,007,379 5,336,261 4,170,171

Average Total Asset 235,311,406 227,676,208 216,750,920

ROA Ratio 3% 2% 1%

YearAmount in Taka

Return on Asset (ROA):

ROA measures the return earned by a company on its assets. The higher the ratio, the more

income is generated by a given level of assets.

Formula: Return on Asset(ROA) =

Interpretation: In 2013 the return on assets (ROA) for this company was 1%, which means

that by utilizing BDT 100 the company can earn a net income of TK 1. The return on assets

increase to 2% in 2014 and 3% in 2015.

Page - 43

2015 2014 2013

Net Income 7,007,379 5,336,261 4,170,171

Average Shareholder's Equity 65,872,947 59,701,126 57,032,996

ROE Ratio 11% 9% 7%

YearAmount in Taka

Net Income

Average Shareholder's Equity

Return on Equity (ROE):

Return on Equity measures the amount of Net Income earned by utilizing each taka of

Total common equity. It is the most important of the ―Bottom line‖ ratio. By this, we can find

out how much the shareholders are going to get for their shares. This ratio indicates how

profitable a company is by comparing its net income to its average shareholders' equity.

The return on equity ratio (ROE) measures how much the shareholders earned for their

investment in the company. The higher the ratio percentage, the more efficient management is

in utilizing its equity base and the better return is to investors.

Formula: Return on Equity(ROE)=

Interpretation: The Return on Equity(ROE) ratio on 2013was 7% and in following two years

it is increased. Its show that management used their equity capital in 2014 and 2015

efficiently.

Page - 44

Total Debt

Total Asset

2015 2014 2013

Total Debt 162,644,679 176,232,239 159,717,924

Total Asset 232,021,316 238,601,497 216,750,920

Debt Ratio 70% 73% 74%

YearAmount in Taka

4.7.3 Solvency Ratio:

Debt to Asset Ratio:

The ratio of total debt to total assets, generally called the debt ratio, measures the percentage

of funds provided by the creditors. The proportion of a company total asset that are being

financed with borrowed funds. The debt ratio is calculated by dividing total long-term &

short-term liabilities by total assets. The higher the ratio, the more leverage the company is

using & the more risk it is assuming. Assets & liabilities are found on a company‘s balance

sheet.

Formula: Debt to Asset Ratio=

Interpretation: Calculating the debt to asset ratio, we came to see that this company is highly leveraged one.

Page - 45

Net Income before Interest and Tax

Interest Expense

2015 2014 2013

EBIT 22,895,226 23,976,062 20,340,156

Interest expense 9,533,463 12,586,022 11,490,436

TIE Ratio 2.40 Times 1.90 Times 1.00 Times

YearAmount in Taka

Time Interest Earned Ratio:

The interest coverage ratio tells us how easily a company is able to pay interest expenses

associated to the debt they currently have. The ratio is designed to understand the amount of

interest due as a function of company‘s earnings before interest and taxes (EBIT). This ratio

measures the extent to which operating income can decline before the firm is unable to meet

its annual interest cost.

Formula: Time Interest earned Ratio=

Interpretation: We can see from this ratio analysis that, this company has covered their

interest expenses 1 .00 times in 2013, 1.90 times in 2014 and 2.40 times in 2015. It means

they have performed pretty different look in the years. As in 2013 they sued a little high

number of long-term loans and does not have good liquidity position, their EBIT became high

thus making TIE a little high as well.

Page - 46

2015 2014 2013

Operating assets:

Total assets 232,021,316 238,601,497 216,750,920

(-) Cash (8,333,076) (7,779,005) (5,150,398)

223,688,240 230,822,492 211,600,522

Operating liabilities:

Total liabilities 162,644,679 176,232,239 159,717,924

(-) Current Loan (62,058,550) (78,268,346) (56,657,623)

(-) Long term Loan (271,083) (8,443,518) (27,786,494)

100,315,046 89,520,375 75,273,807

Net operating asset:

Operating asset 223,688,240 230,822,492 211,600,522

(-) Operating Liabilities (100,315,046) (89,520,375) (75,273,807)

123,373,194 141,302,117 136,326,715

Amount in TakaParticulars

4.8 Net Operating Assets of MNBL:

Business operating assets minus business liabilities calculation of net operating assets requires

the removal of financing activities from the operating assets, to get an accurate picture of the

company‘s value.

4.8.1 Balance sheet based aggregate accrual For 2015 = -

= 123,373,194 – 141,302,117

= (17,928,923)

For 2014 = -

= 141,302,117 – 136,326,715

= 4,975,402

Page - 47

2015 2014 2013

Net income 7,007,379 5,336,261 4,170,171

(-) Cash flow from O.A (42,322,153) (26,457,220) (19,344,794)

(-) Cash flow from I.A 17,385,851 26,815,585 36,439,395

C/F Statement Based Accrual (24,228,923) 5,694,626 21,264,772

ParticularsAmount in Taka

(17,928,923)

(123,373,194 + 141,302,117)/2

(17,928,923)

132,337,655

4,975,402

(141,302,117 + 136,326,715)/2

4,975,402

138,814,416

4.8.2 Balance sheet based aggregate accrual ratio For 2015 =

=

=

= (0.135)

= - 13.5%

For 2014 =

=

=

= 0.035

= 3.5%

4.8.3 Cash Flow Statement Based Accrual:

Page - 48

(24,228,923)

(154,311,603 + 166,675,363)/2

(24,228,923)

160,493,483

5,694,626

(166,675,363 + 136,899,778)/2

5,694,626

76,783,657

Year 2015 2014

Balance Sheet-Based Accrual Ratio -13.5% 3.5%

Cash Flow Statement Based Accrual Ratio - 15% 7.4%

4.8.4 Cash flow statement based accrual ratio For 2015 =

=

=

= (0.150)

= - 15%

For 2014 =

=

=

= 0.074

= 7.4%

Interpretation: Accrual ratio shows positive figure in 2014 and its shows negative figure in 2015 this

–15%

Page - 49

7,007,379

10,780,583

1,080,583

22,895,226

22,895,226

250,342,988

250,342,988

235,311,406

235,311,406

65,872,947

Particulars Amount in Taka

Net Income 7,007,379

EBT 10,780,583

EBIT 22,895,226

Revenue 250,342,988

Average Total Assets 235,311,406

Average Shareholder’s Equity 65,872,947

4.9 DuPont analysis

4.9.1 DuPont Analysis of ROE-2015

ROE = ×

ROE =Tax burden× Interest burden × Operating profit margin × Asset turnover × Leverage

ROE= × × × ×

ROE= 0.65 × 0.47 × 0.09 × 1.06 × 3.57

ROE= 0.10

ROE= 10%

Page - 50

5,336,261

9,352,237

9,352,237

23,976,062

23,976,062

235,482,473

235,482,473

227,676,208

227,676,208

59,701,126



EBT 9,352,237

EBIT 23,976,062

Revenue 235,482,473




ROE = ×

ROE =Tax burden × Interest burden × Operating profit margin × Asset turnover × Leverage

ROE= × × × ×

ROE= 0.57 × 0.39 × 0.10 × 1.34 × 3.81

ROE= 0.11

ROE= 11%

Page - 51

4,170,171

8,015,808

8,015,808

20,340,156

20,340,156

184,067,007

184,067,007

216,750,920

216,750,920

57,032,996



EBT 8,015,808

EBIT 20,340,156

Revenue 184,067,007




ROE = ×

ROE =Tax burden × Interest burden × Operating profit margin × Asset turnover × Leverage

ROE= × × × ×

ROE= 0.52 × 0.39 × 0.11 × 0.84 × 3.80

ROE= 0.07

ROE= 7%

Page - 52

Particulars 2015 2014 2013

ROE 10% 11% 7%

Tax Burden 65% 57% 52%

Interest Burden 47% 39% 39%

EBIT Margin 9% 10% 11%

Asset Turnover 1.06 1.34 0.84

Leverage 3.57 3.81 3.80

4.9.4 Decomposition of ROE:

Decomposition of ROE is sometimes referred to as DuPont analysis because it was developed

originally at that company. Decomposing ROE involves expressing the basic ratio as the

product of component ratios. Because each of these component ratios is an indicator of a

distinct aspect of a company‘s performance that affects ROE, the decomposition allows us to

evaluate how these different aspects of performance affected the company‘s profitability as

measured by ROE.

Decomposing ROE is useful in determining the reasons for changes in ROE over time for a

given company and differences in ROE, for difference in ROE different companies in a given

time period.

Interpretation: The tax burden reflects the relation of after-tax profits to pretax profits, the

increase from 52 percent to 65 percent indicates that taxes declined as a percentage of pretax

profits. This decline in average tax rates could be due to lower tax rates from new legislation

or revenue in a lower tax jurisdiction. An interest burden factor greater than 100 percent

means that nonoperating income exceeded interest expense in all three years. Operating

margin (EBIT margin) improved, particularly from 2013 to 2015, indicating the company‘s

operations were more profitable. The company‘s efficiency (asset turnover) increased each

year as did its leverage. Overall, the trend in ROE (doubling in three years) did not result from

a single aspect of the company‘s performance, but instead was a function of lower average tax

rates, increasing operating profits, greater efficiency, and increased use of leverage.

Additional research on the causes of the various changes is required in order to develop

expectations about the company‘s future performance.

Page - 53

Chapter: Five

Findings, Conclusion and Recommendation

Page - 54

5.1 Findings of the MetroNet Bangladesh Limited:

Throughout my internship program it had been a great experience for me, because I got the

chance to work on different aspects of work at a time. On my first day in MetroNet

Bangladesh Ltd, I was told that I would have to work on Accounting Department throughout

my internship period. But eventual I got involved with different types of assignments besides

my main job assignment. Here I got not only the financial information also over all activities

of company.

My findings during this period are given bellow:

As per my findings company is financially solvent.

Its financial operation policy is effective and fruitful.

Management is trying to reduce unnecessary cost with reasonably.

Get over all idea about the activities of a company.

Get an idea about internet and networking business in Bangladesh.

Get an idea unique marketing plan and strategies.

There have a strong management set up in the company. Equity Mobilization is the

most efficient plan which could work for the best output from all the distribution

channels.

To find the financial allocation for this project, other than that they are going to

create a corporate set up for expand the business maintain strong competitive relation

with clients, distributors and related staffs.

MetroNet Bangladesh Ltd. Plans to make the safe and secure technical arrangement

for their new project which is very important to maintain their work environment.

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5.2 Conclusion:

This report gave me an opportunity to incorporate the theoretical concepts with the practical

problem situation. It was a great opportunity for me to understand the Overall financial

performance evaluation of followed by few recommended strategies for MetroNet Bangladesh

Limited.

Proper books of accounts require by law have been kept by the company in so far as it

appears from my observation of those books

The financial statements are the responsibility of the company management the

analysis and interpretation of financial statement is essential to bring out the mystery

behind the figure in financial statements.

I have studied the attached balance sheet and profit and loss account and cash flow

statement of MetroNet Bangladesh Limited. The balance sheet and profit and loss

account and cash flow statements are in agreement with the books of account.

I have analysis of liquidity measures indicates that current ratio is bed condition. So,

Quick and asset measures is found that the same position of previous ratio and cash

ratio measures

I have analysis is all efficiency measures, account receivable turnover, average

collection period, inventory turnover, account payable turnover, fixed assets turnover,

total asset turnover. The MetroNet‘s are significant increase in account receivable

turnover and account payable. I have ensured that the MetroNet Bangladesh Limited

is standards position for asset management measure.

I have analysis is profitability measures indicates the different kind of ratio. The

MetroNet‘s are more profitable in net profit margin.

I have analysis the debt management measures, debt ratio, time interest earned, but

only increasing time interested earned ratio of MetroNet‘s the debt coverage

management is also good position.

The internship program helped me to enhance my knowledge beyond the text books. I have

gained practical knowledge regarding the corporate environment which I hope would support

me in near future.

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5.3 Recommendations:

MetroNet Bangladesh Limited must control costs and increase their efficiency. The

distribution expenses must be decreased and some of their product lines must be scrutinized

for improvement. However, from the observation and depth interview conducted during the

internship, the following recommendations are made: These recommendations, I believe, if

implemented, would give MNBL competitive advantage over its competitors.

MetroNet should control the debtor‘s collection period which is most important part of

current assets.

MetroNet have to manage their assets carefully so that they can achieve maximum

benefit from the investment and increase the return on asset ratio by increasing net

income.

MetroNet should set up lead reclamation facility.

Increase customer satisfaction level for reach to company goals.

The company should do research to minimize the cost by keeping the same quality.

For that purpose, they can introduce backward integration for producing raw materials

to take cost advantage.

.

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Bibliography:

Web site of MetroNet Bangladesh limited.

www.MetroNet.com

Other Linked websites

www.google.com

www.msn.com

Help from Other Reports

www.wikipedia.com

Information generate from MetroNet Bangladesh limited

Company profile

http://www.metronet.com/

http://www.google.com/

http://www.wikipedia.com/