LankaBangla Securities Ltd

Written test for the position of Research

Associate
Total Time: 2.5 Hours (3 P.M 5.3 P.M)
Candidate Name
:
Name of the University
Phone Number
Signature of the candidate
Expected Salary
:
Date

Topics

:
:
:
:

Allocated Mark

Macro Economy
Industry Specific
Stock Market
Financial Statement Analysis
(Mandatory)

Mark Obtained

66
45
39
20

Attention:
Short and specific answers are encouraged. Most of the questions designed
are answerable within two to three lines except question number 46 and 47.
So be as brief as possible.

Macro Economy
1. In last few years, foreign exchange reserve increased significantly. What factors worked behind this
enhancement? (Mark: 5)

2. Write down the treasury bills and bonds name of different tenures that are currently available in
Bangladesh:
(Mark: 2.5)

3. What was the total size of remittance sent by the migrants in FY 2014-15? (Mark: 1.5)

4. Suppose ABC Asset Management, a USA based frontier market fund invests in Bangladesh. Now
ABC generates 10% return in DGEN in 2014, and Dollar depreciates against BDT by 9% in that year.
What is ABCs return in 2014 in terms of USD? (Mark: 2.5)

5. What is your expectation regarding Treasury bill and bond rates in fiscal year 2014-15? (Mark: 2.5)

6. Please justify the statement-Government can keep pushing money into the market and keep stock
prices up forever.
(Mark: 5)

7. Please fill up the following tables with recent data: (Mark: 5)

Call Money Rate average in 2014

Inflation September 2014
Export Growth (July to September
2014-15)
Repo Rate (Current)
Forex Reserve (September 2014)
Real GDP Growth 2013-14

8. Please describe the cycle of money supply growth, inflation and expected stock market movement.
(Mark: 5)

9. What is the probable situation of price level in economy if actual output of economy is higher than
potential output? (Mark: 2.5)

10. Say X is an exporter and BDT appreciates against USD. What will be the impact on his business?
(Mark: 2.5)

11. What will be the probable impact on current account balance if BDT depreciates? (Mark: 2.5)

12. If Bangladesh Bank (BB) thinks economy is too much heated, what are the measures BB can take to
tame the economy? (Mark: 5)

13. Give five most important selling points for Bangladesh equity market? (Mark: 5)

14. Targeted Economic Indicators in FY 2014-15s Budget: (Mark: 2.5)

Targeted Economic Indicators (FY 2013-14)

GDP Growth
Inflation
Export Growth
Import Growth
Remittance Growth
15. What is the estimated budget size for FY 2014-15? (Mark: 1.5)

Industry Specific
16. Write three differences between banks and NBFIs. (Mark: 2.5)

17. What are the key revenue sources of banks? (Mark: 2.5)

18. What is net interest margin? How is it calculated? (Mark: 2.5)

19. What are the indicators need to be considered before investing in banks? (Mark: 2.5)

20. What is CRR and SLR ratio for private commercial banks? (Mark: 2.5)

21. Recently, liquidity in private commercial banks increased significantly. How do you explain this
situation? (Mark: 5)

22. What are the factors should you consider in projecting sales growth of a cement company? (Mark:
5)

23. What is API (related to pharmaceutical industry)? (Mark: 2.5)

24. What was the pharmaceutical industry growth in 2013 (Approximate)? (Mark: 2.5)

25. How do you think falling oil price will impact corporate profitability? (Mark: 2.5)

26. Define Subsidy in Power Sector. Do you think subsidy creates efficiency or inefficiency? Show
rationality of your answer. (Mark: 5)

27. Currently mutual funds are trading at 40% to 50% discount to their NAV. What sort of opportunity
do you see here? (Mark: 5)

28. What sort of a company will you buy to en-cash the increasing purchase power of people of
Bangladesh? (Mark: 5)

29. What do you believe to be the growth driver in future for telecom industry?(Mark: 3)

30. Company A is highly levered and company B is uses low level of leverage. In a falling interest
environment which company will show higher profit growth? (Mark: 3)

Stock Market
31. How many Banks, NBFIs and Mutual fund are listed in Dhaka Stock Market? (Mark: 1.5)

32. What is the current index level of DSEX (7th July 2013)? (Mark: 1.5)
33. Name top 5 five large cap companies? (Mark: 1.5)

34. What is free float? (Mark: 1.5)

35. How many companies are listed in Dhaka Stock Exchange? (Mark: 1.5)
36. Please determine which company is relatively undervalued: (Justify) (Mark: 2.5)
Company
A
B

P/E
25
17

Projected Earnings Growth

50%
20%

37. For example, there are five companies listed in banking sector. Here we provided P/E and Market
capitalization data of respective companies. Please calculate sector P/E: (Mark: 2.5)
Company

P/E

A
B
C
D
E

15
12
13
7
9

Market capitalization (BDT In

Mn)
1500
2500
1250
2000
3000

38. What are the categories of shares available in DSE? (Mark: 2.5)
39. Why does a share trade in Z category? (Mark: 2.5)

40. What was the highest point of DGEN (approximate)? (Mark: 1.5)
41. Do you expect further correction in Dhaka stock market in 2013 like 2011 and 2012? Please give
your justification. (Mark: 5)

42. Here, we have marked 9 spots in following technical charts. Now its your turn to explain what was
the buyers and sellers interaction in selected spots: (Mark: 10)

8
1

6
2

9
4

Financial Performance Analysis

(Mandatory)
43. Here, we have provided Income statement, Balance sheet and Ratio analysis of ABC Company.
Please observe the figures and write a financial performance analysis note on that company.
(Mark: 20)

Consolidated Income Statement (Figures are in BDT Mn)

2011

2012

2013 E

Net turnover

19798.1

20029.1

21831.8

Cost of goods sold

-11907.8

-11616.9

-12662.4

Gross profit

7890.3

8412.2

9169.3

Profit from operations

4615.5

5057.4

5512.6

Other income

419.6

445.7

415.3

Financial expenses

-464.6

-264.4

-201.9

Profit before WPPF

4570.6

5238.7

5726

Profit before tax

4350.1

4989.2

5453.4

Profit after tax

3125

3672.1

4131.1

Profit/(loss) from associate undertakings

495

519.8

571.8

Profit for the year

3620.1

4191.8

4702.9

Consolidated Balance Sheet (Figures are in BDT Mn)

2011

2012

2013 E

Non-current assets

16128.1

18662.1

20863.2

Property, Plant and Equipment-Carrying Value

9171.8

11194.8

11998

Capital Work-in-Progress

1274.4

1401.8

2242.9

Investment - Long Term (at Cost)

167.7

174.5

180.4

Investment - associate undertakings

4709.1

5166.5

5681.1

Investment in Marketable Securities (Fair Value)

805.1

724.5

760.8

Current assets

8248.6

8125.8

9319.5

Inventories

3178.7

3304.8

3711.4

Trade debtors

819

801.2

982.4

Advances, Deposits and Prepayments

694.8

1001.5

873.3

Short term loan

2808.4

2060.7

2472.9

Cash and Cash Equivalents

747.6

957.7

1279.5

Total assets

24376.7

26788

30182.7

Shareholders' equity

19127.4

22414.5

26082.7

Long term loans - secured

508.8

508.5

336.5

Deferred tax liability

425.2

544.9

667.4

Current liabilities

4315.4

3320.1

3096

Short term bank loans

2237.5

1402

1091.6

Long term loans - current portion

477.1

292.9

254.2

Trade creditors

531.3

534.4

582.5

Liabilities for Expenses

114.5

119.8

130.6

Liabilities for Other Finance

954.9

970.9

1037.1

Total shareholders' equity and liabilities

24376.7

26788

30182.7

Ratio Analysis
2011

2012

2013 E

Current Ratio

1.91

2.45

3.01

Quick Ratio

1.17

1.45

1.81

Cash ratio

0.173

0.288

0.413

Liquidity Ratio

Activity Ratio

10

Inventory Processing Period

96.1

100.46

99.74

Average Collection Period

151.86

147.16

143.83

Average Payment Period

26.29

16.51

15.88

Cash Conversion Cycle

29.46

30.18

28.22

Total Assets Turnover

0.84

0.78

0.77

Equity Turnover

1.13

0.96

0.9

Fixed Assets Turnover

1.31

1.15

1.1

Gross Profit Margin

39.90%

42.00%

42.00%

Operating Profit Margin

23.31%

25.25%

25.25%

Net Profit Margin

18.29%

20.93%

21.54%

ROA

15.40%

16.40%

16.50%

ROE

20.60%

20.20%

19.40%

Debt to Capital Ratio

0.21

0.14

0.09

Debt to Equity Ratio

0.28

0.19

0.12

Interest coverage Ratio

13.79

10.84

20.81

Sales Growth

16.60%

1.20%

9.00%

Earnings Growth

11.10%

15.80%

12.20%

Assets Growth

8.20%

9.90%

12.70%

Equity Growth

19.80%

17.20%

16.40%

Fixed Assets Growth

14.70%

15.70%

11.80%

Profitability Ratio

Solvency Ratio

Growth Analysis

Notes: E= Expected figures in projected year 2013

11