Financial Performance Analysis of United Power Generation & Distribution Company Limited

Abstract

The object of the report is to measure the “financial performance analysis of United Power Generation & Distribution Company Limited (UPGD)”. UPGD is one of the leading companies in the power sector of the country. The power generation industry has a very prospectus future in Bangladesh. The United Power has currently six power plants in operation. I employed the ratio analysis technique to analyze the financial performance of UPGD over the period 2015-16 to 2019-20. The DuPont framework has also been applied to assess which parameter has a significant influence on a company’s profitability.

Ratio analysis is performed based on five major dimensions: liquidity, efficiency, profitability, solvency, and market. Ratio results indicate that UGPD is not maintaining a very high liquidity ratio. The liquidity was fairly unstable for the last five years and past two years it has been very low. The turnover ratios were not satisfactory for the United Power and solvency ratios show that it maintained a low amount of borrowed funds in the business. Finally, it is observed that UPGD was not able to generate consistent earnings. The two major profitability measures ROE and ROA reveal that the company’s earnings declined for recent periods. The conclusion can be made that UPGD’s financial performance has understandably been declined over the recent period.