Analysis of financial performance and effect of current asset management on profitability of bKash Limited

Abstract

bKash Limited is a private limited mobile financial service providing company which started its operations in 2011 as a joint venture between BRAC Bank Limited and Money in Motion LLC of the United States. In less than 5 years of operation, it managed to establish itself as one of the most successful companies in the newly thriving mobile financial service industry of Bangladesh. In fact, in 2017, it was ranked 23rd in Fortune’s list of top 50 companies that changed the world. This report aims to provide a comprehensive ratio analysis of the financial situation of bKash Limited and, above all, explain the state of the company’s profitability and link it with other ratios to understand why profitability was like that. The ratio analysis revealed that the financial ratios of bKash took a turn in 2014. The profitability ratios had more or less slumped in growth from 2014 onwards. Meanwhile, ratios like working capital turnover, current assets to total assets and current ratio also experienced changes in trends at the same period. The next part of this report, therefore, was to try and analyze how profitability was probably related to current asset management. During correlation and regression analyses, it was found that working capital turnover did have an impact on the profitability on bKash Limited. Working capital turnover had an inverse relationship with net profit margin and return on assets