Comparative financial performance analysis between two non-banking financial institutions: IDLC Finance Ltd. & LankaBangla Finance Ltd.

Abstract

The analysis applies performance evaluation and comparison of two branded non-banking financial institutions of Bangladesh; IDLC Finance Ltd & Lankabangla Finance Ltd. This measures how well a company is performing comparing with other. In this determination the most used elements are the balance sheet and income statement account. Balance sheet displays the financial situation and income statement account displays the net profit or net loss of a bank. Ratio analysis, the utmost widespread movement to appraise a company’s performance over years. In this project report financial statements of the two NBFIs of past five years (2012-2016) were studied. And then substantial comments were given. The financial performances are evaluated through ratio analysis, Dupont analysis and a hypothesis test. Under ratio analysis liquidity ratios, solvency ratio, profitability ratio, market prospect ratio these are evaluated and also tested the significant relationship between liquidity & profitability. The study found that the performance of Lankabangla finance ltd. is better than IDLC Finance ltd. in some aspects. Conversely, IDLC Finance ltd also has some advantage over Lankabangla finance ltd. in different aspects. So, overall which one is better, difficult to say? Each one has its own strengths and flaws. That’s why some suggestions are given. However, the results also show these two NBFIs are refining overtime noticeably in ratio analysis during the retro under the study.