Report on

A Comparative Study of IDLC Finance PLC and

DBH Finance PLC to Analyze Financial Position
and Investment Decision

Prepared for:
Ms. Shamsun Arefin
Associate Professor
Department of International Business
University of Dhaka

Prepared by:
Group 03
BBA 17th Batch
Course Title: Business Communication (IB-104)
Department of International Business
University of Dhaka

Date of submission: January 20, 2025

 Group 03

Name ID Remarks

Shafayet Ahmod Ontik BB-132-007

Maisha Raiyan Mumu SK-132-008

Sruti Das Tushee RH-132-019

Habibur Rahman Sium ZH-132-056

Sayem MM-132-071

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January 20, 2025

Ms. Shamsun Arefin

Associate Professor
Department of International Business
University of Dhaka

Subject: Report on ‘A Comparative Study of IDLC Finance PLC and DBH Finance PLC
to Analyze Financial Position and Investment Decision’’.

Sir,
Here is the report of “A Comparative Study of IDLC Finance PLC and DBH Finance PLC
to Analyze Financial Position and Investment Decision” as per your instruction. We have
completed the assignment using the knowledge we have gathered from the Business
Communication course, Course Code: IB-104.
Composing this report has proven to be stimulating and thought-provoking. This experience
facilitated the acquisition of a comprehensive understanding of the subject matter, instilling in
us a sense of confidence that this knowledge will hold significant value and relevance in our
future endeavors. We have exerted our utmost endeavor toward the successful completion of
this report, and we express our hope that any inadvertent errors, omissions, or mistakes made
during its preparation will be considered.

Sincerely yours,

…………………………
Habibur Rahman Sium
Class Roll: ZH-132-056
On behalf of Group: 03
BBA 17th Batch
Department of International Business
University of Dhaka

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 Table of Contents
Executive Summary .................................................................................................................vii

Chapter 1 - Introduction ............................................................................................................. 1

1.1 Objective of the Study ..................................................................................................... 1

1.2 Origin of the Study........................................................................................................... 1

1.3 Methodology and Sources of Data ................................................................................... 1

1.4 Limitations of Study ........................................................................................................ 2

Chapter 2 - IDLC Finance PLC ................................................................................................. 3

2.1 Featured Products and Services ....................................................................................... 3

2.2 Strategic Objectives ......................................................................................................... 3

2.3 Journey and Major Achievements .................................................................................... 4

2.4 Profitability Ratios ........................................................................................................... 5

2.4.1 Gross Profit Margin .................................................................................................. 5

2.4.2 Net Profit Margin ...................................................................................................... 5

2.4.3 Return on Equity (ROE) ........................................................................................... 5

2.5 Liquidity Ratios ............................................................................................................... 5

2.5.1 Current Ratio ............................................................................................................. 5

2.5.2 Efficiency Ratios ....................................................................................................... 5

2.5.3 Asset Turnover Ratio................................................................................................. 5

2.6 Solvency Ratios ............................................................................................................... 5

2.6.1 Debt-to-Equity Ratio ................................................................................................. 5

2.6.2 Price-to-Earnings (P/E) Ratio ................................................................................... 6

2.6.3 Earnings Per Share (EPS) ......................................................................................... 6

2.7 Investor Outlook .............................................................................................................. 6

2.7.1 Strengths ................................................................................................................... 6

2.7.2 Concerns ................................................................................................................... 6

2.7.3 Opportunities............................................................................................................. 6

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Chapter 3 - DBH Finance PLC .................................................................................................. 7

3.1 Featured products ............................................................................................................. 7

3.2 Strategic Objectives ......................................................................................................... 7

3.3 Journey ............................................................................................................................. 7

3.4 Profitability Ratios ........................................................................................................... 8

3.4.1 Gross Profit Margin .................................................................................................. 8

3.4.2 Net Profit Margin ...................................................................................................... 8

3.4.3 Return on Equity (ROE) ........................................................................................... 9

3.5 Liquidity Ratios ............................................................................................................... 9

3.5.1 Current Ratio ............................................................................................................. 9

3.6 Efficiency Ratios .............................................................................................................. 9

3.6.1 Asset Turnover Ratio................................................................................................. 9

3.7 Solvency Ratios ............................................................................................................... 9

3.7.1 Debt-to-Equity Ratio ................................................................................................. 9

3.7.2 Price-to-Earnings (P/E) Ratio ................................................................................... 9

3.7.3 Earnings Per Share (EPS) ......................................................................................... 9

3.8 Investor Outlook .............................................................................................................. 9

3.8.1 Strengths ................................................................................................................... 9

3.8.2 Concerns ................................................................................................................. 10

3.8.3 Opportunities........................................................................................................... 10

Chapter 4 - Comparison Between IDLC and DBH Finance PLC ........................................... 11

4.1 Profitability Ratios ......................................................................................................... 11

4.1.1 Gross Profit Margin ................................................................................................ 11

4.1.2 Net Profit Margin .................................................................................................... 11

4.1.3 Return on Equity (ROE) ......................................................................................... 11

4.2 Liquidity Ratios ............................................................................................................. 12

4.2.1 Current Ratio ........................................................................................................... 12

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 4.3 Efficiency Ratios ............................................................................................................ 12

4.3.1 Asset Turnover Ratio............................................................................................... 12

4.4 Solvency Ratios ............................................................................................................. 12

4.4.1 Debt-to-Equity Ratio ............................................................................................... 12

4.4.2 Price-to-Earnings (P/E) Ratio ................................................................................. 12

4.4.3 Earnings Per Share (EPS) ....................................................................................... 12

4.5 Key Considerations for Investment Decision ................................................................ 12

4.5.1 Strengths of IDLC Finance PLC ............................................................................. 12

4.5.2 Strengths of DBH Finance PLC .............................................................................. 13

4.5.3 Concerns for IDLC Finance PLC ........................................................................... 13

4.5.4 Concerns for DBH Finance PLC ............................................................................ 13

Chapter 5 - Conclusion ............................................................................................................ 14

5.1 Final Recommendation .................................................................................................. 14

5.2 Investment Decision....................................................................................................... 14

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 Executive Summary
This report compares and analyses the financial performances of two largest Bangladeshi
financial institutions, IDLC Finance PLC and DBH Finance PLC, and identifies the strengths
and weaknesses of the two companies as financial institutions through a financial performance
and investment potential. IDLC Finance PLC has always been profitable with its constant gross
and net profit margins, liquidity and Operations efficiency. Firm’s lowered dependence on debt
may be interesting to investors who favor long term return and lower risk. IDLC's higher P/E
ratio augurs well in affirming its popularity with risk averse investors even as ROE and EPS
slip marginally. However, with a view to the profitability of the company, earnings per share,
and ROE is higher with DBH Finance PLC, which is known to be a branded leader in the home
finance industry, and this means that shareholders are earning handsomely. Nevertheless, DBH
has many hurdles to jump over-steeper declines in net and gross profit margins, reliance on
debt, and no margin of improvement in operational efficiency. Such difficulties are good for
the risk tolerant investor as they add to the financial risk but also means larger gains. The
conclusion of the report states that Risky but could bag higher returns DBH Finance PLC could
be an option for those who are prepared to sleep with increased volatility and IDLC Finance
PLC is the sale choice for keeping calm and stable.

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 Chapter 1 - Introduction
To develop the ability to gain theoretical knowledge in the practical working area is the most
imperative task for a person to be acquired. This report explores and analyzes the financial
performance, and operational and operating efficiencies over the past year of two financial
institutions. By examining key financial metrics and business approaches, this study aims to
highlight the similarities, differences, and competitive dynamics that shape these organizations
and provide a better understanding of their stand. The purpose of this report is not only to gain
a deeper understanding of the financial sector but also to develop critical analytical skills
essential for academic and professional growth. I hope this study serves as a stepping stone
toward a broader appreciation of the challenges and opportunities within the financial industry.
1.1 Objective of the Study
This report is required by our BBA course “IB104 Business Communication”. The main
objective of this course is to learn how to write the annual report and the implications of
effective business communication. Other objectives for writing this report are-
➢ To analyze and understand different business documents provided in the specific
business sector
➢ To understand the market stance of two similar financial institutions from a similar
category, their financial situation, and profitability
➢ To compare and analyze which company has a better scope for success suitable for
investment
1.2 Origin of the Study
The report is required for our BBA program. Our respected course instructor Ms. Shamsun
Arefin, course code IB104, assigned us to make a report on “A Comparative Study of IDLC
Finance PLC and DBH Finance PLC to Analyze Financial Position and Investment Decision”.
This report is the output of the facts.
1.3 Methodology and Sources of Data
To conduct an analysis and comparison of performance using specific criteria, two financial
institutes of category A - IDLC and DBH - have been selected from the Dhaka Stock Exchange
website. The dataset utilized in this study focuses on the last two years -2022 and 2023. To
evaluate the performance of both companies, a comparative analysis was conducted using
market data obtained from the respective websites of the companies.

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1.4 Limitations of Study
During the preparation of this paper, the objectivity of the data and the dearth of in-depth
knowledge of the applied techniques and strategies appeared to be the most prevalent
limitations. We only conducted the study on DSE A category stocks. Not all companies are
included in the study. In addition, the analysis was based on some metrics only, though there
are others available as well. Time constraints also contributed to these restrictions. Along this
we had to go through a limited resource materials.

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 Chapter 2 - IDLC Finance PLC
IDLC Finance PLC is a well-known financial institution in Bangladesh, established back in
1985. Over the years, it has become one of the top non-banking financial organizations in the
country. Originally, it started as a joint venture between local and international partners, but
today, it stands as a trusted name in the financial sector. Whether it is helping small businesses
grow or supporting individuals with personal loans, IDLC has played a crucial role in fostering
economic growth in Bangladesh. The company adheres to International Financial Reporting
Standards (IFRS), ensuring transparency, consistency, and accuracy in its financial reporting.
With branches across the country, they continue to make a significant impact, helping people
and businesses achieve their financial goals.
Mission: We will focus on quality growth, superior customer experience and sustainable
business practices.
Vision: We will be the best financial brand in the country
Values: Integrity, Customer Fucus, Equal Opportunity, Trust and Respect, Passion, Simplicity,
Eco-friendly
2.1 Featured Products and Services
1. Corporate Finance: Lease financing, term loans, working capital, project financing, and
structured finance.
2. SME Finance: SME leases, loans, supply chain finance, and specialized solutions like
“Purnota" for women entrepreneurs.
3. Consumer Finance: Home, car, and personal loans, along with deposit products.
4. Capital Market Services: Merchant banking, stock brokerage, and asset management.
5. Islamic Finance: Shariah-compliant products for deposits and housing.
6. Digital Payments: Loan payments via bKash.
2.2 Strategic Objectives
• Sustainability Leadership: Consistently top-rated by Bangladesh Bank for ESG
practices.
• Profitability Growth: Achieved 25.3% net profit increase in early 2024.
• Good Governance: Strong governance with low non-performing loans.
• SME Support: Enhancing SME and supply chain financing through IFC collaboration.
• Islamic Finance Expansion: Offering Shariah-compliant products with advanced
banking solutions.

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2.3 Journey and Major Achievements
1985- Industrial Development Leasing Company of Bangladesh Limited was incorporated. The
first Lease Agreement was signed. 1993- Listed on the Dhaka Stock Exchange. 1995- Licensed
as a Financial Institution under the Financial Institutions Act, 1993. 2011- IDLC Investments
Limited, a wholly-owned subsidiary of IDLC, commences operations. 2006- IDLC Securities
Limited, a wholly-owned subsidiary of IDLC, commences operations. 2016- Establishment of
IDLC ASSET MANAGEMENT LIMITED. Launch of IDLC's first Open-End Mutual Fund -
IDLC Balanced Fund. Winner of the 17th ICAB National Award for Best Presented Annual
Report and Integrated Reporting 2016. Winner for Best Presented Annual Report 2015 by
SAFA. Launch of "Khushir Kheya" - the first-ever Volunteer-based CSR initiative by a
corporate entity. 2017- Highest Tax Payer in Non-Banking Financial Institutions Category for
2016-2017. Launch of IDLC SIP. Winner of ICMAB Best Corporate Award - 2016 (First
Position) in Non-Banking Financial Institution Category. Winner of SAFA Award - First
Position in Overall Category and First position in Integrated Reporting and Financial Services
sector, among 8 countries in the SAARC region. 2018- Launch of IDLC AML Growth Fund.
Launch of VSE Financing. IDLC Venture Capital Fund 1 Launch. 2019- Launch of IDLC AML
Shariah Fund. Launch of VSE Financing. Launch of Affordable Housing Loan. 2020- Launch
of Online Onboarding Platform by IDLC AML. 2021- Launch of Bangladesh’s 1st MFS-based
Digital Deposit Program. Launch of IDLC Income Fund. Launch of IDLC Digital Term
Deposit.
Ratio Analysis for IDLC Finance PLC based on the financial highlights of 2022&2023:
Category Name 2022 2023
Gross Profit Margin 96.7% 96.6%
Profitability Ratios Net Profit Margin 10.89% 11.0%
Return on Equity (ROE) 11.0% 10.6%
Liquidity Ratios Current Ratio 1.23 1.30
Efficiency Ratios Asset Turnover Ratio 0.0204 0.0943
Debt-to-Equity Ratio 1.73 1.42
Solvency Ratios price-to-earnings (P/E) ratio 10.5 12.0
Earnings Per Share (EPS) BDT 4.61 BDT 3.64
Source: IDLC Finance LTD, investing.com-Nigeria, Stock analysis, finbox, wsj

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Based on the provided ratio analysis for IDLC Finance PLC for 2022 and 2023, here's a detailed
evaluation of the company’s financial performance and situation for an investor:
2.4 Profitability Ratios
2.4.1 Gross Profit Margin
In 2022 Gross Profit Margin 96.7% and 96.6% in 2023. The gross profit margin has remained
stable at a high level, indicating strong control over cost of goods sold relative to revenue. This
reflects the company’s ability to maintain profitability at the operational level.
2.4.2 Net Profit Margin
IDLC Finance PLC had a 10.8% of net profit margin in 2022 and 11% in 2023. A slight
improvement in net profit margin suggests a marginal increase in overall profitability. This
could be due to better cost management or improved efficiency in operations.
2.4.3 Return on Equity (ROE)
IDLC Finance PLC got a slide decrease in ROE of 11.0% in 2022 to 10.6% in 2023. A small
decline in ROE indicates that the company generated slightly less profit per unit of
shareholders’ equity in 2023. This might point to increased equity levels or reduced profit
growth.
2.5 Liquidity Ratios
2.5.1 Current Ratio
IDLC’s current ratio in 2022 was 1.23 and 1.30 in 2023. The current ratio has improved,
showing the company has enhanced its ability to cover short-term liabilities with its short-term
assets. This is a positive indicator of financial stability and liquidity.
2.5.2 Efficiency Ratios
2.5.3 Asset Turnover Ratio
In 2022 the asset turnover ratio of IDLC was 0.0204 and 0.0943 in 2023. A significant increase
in the asset turnover ratio indicates improved efficiency in utilizing assets to generate revenue.
This is a strong positive signal for operational effectiveness.
2.6 Solvency Ratios
2.6.1 Debt-to-Equity Ratio
D/E of this company in 2022 was 1.73 and 1.42 in 2023. The decrease in the debt-to-equity
ratio shows that the company has reduced its reliance on debt financing, thereby lowering
financial risk. This is favorable for long-term solvency.

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2.6.2 Price-to-Earnings (P/E) Ratio
In 2022 P/E of IDLC was 10.5 and 12.0 in 2023. An increase in the P/E ratio indicates higher
market expectations for future growth or earnings. This suggests that investors are willing to
pay more for each unit of earnings, reflecting positive market sentiment.
2.6.3 Earnings Per Share (EPS)
In 2022 the EPS of IDLC was BDT 4.61 and BDT 3.64 in 2023. A decline in EPS suggests
reduced profitability on a per-share basis. This might concern investors who prioritize returns
through dividends or capital gains.
2.7 Investor Outlook
2.7.1 Strengths
• The gross profit margin remains strong, and net profit margin has improved slightly,
indicating consistent operational efficiency.
• The current ratio and asset turnover ratio have both improved, reflecting stronger
financial health and operational efficiency.
• A lower debt-to-equity ratio reduces financial risk and enhances long-term stability.
2.7.2 Concerns
• The slight decline in ROE and a notable drop in EPS may signal challenges in
generating shareholder returns, possibly due to equity dilution or reduced net income
growth.
• The increase in the P/E ratio suggests higher valuation, which could pose a risk if future
earnings growth does not meet investor expectations.
2.7.3 Opportunities
• The higher P/E ratio suggests positive market sentiment, which could attract more
investors.
• The significant improvement in asset turnover indicates room for further revenue
growth with optimized asset utilization.

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 Chapter 3 - DBH Finance PLC
DBH Finance PLC formerly known as Delta BRAC Housing Finance Corporation Ltd. is the
pioneer, largest, and specialist Housing Finance Institution in the private sector of the country.
To support private sector real estate financing in Bangladesh, it was established in 1996 as an
International joint venture. Since the starting, the company has registered remarkable growth
in creating home ownership in Dhaka and other major cities of the country.
Mission: To strengthen the society of the country by continuously expanding home ownership.
Vision: To be the leading financial institution in the country with satisfied customers, staffs
and to generate values for our investors while promoting social progress.
Core Values
Honesty, integrity and ethics Hard work and continuous improvement
Outstanding services to the customer Respect and concern for the individuals
Individual opportunity, responsibility and reward based on merit

3.1 Featured products

1. Home loan: Apartment purchase loan, Own construction loan, home equity loan,
Extension/Renovation loan, Group construction loan.
2. Deposit: Annual income deposit, Day wise deposit, Easy deposit, DBH DPS, DBH
Platinum Deposit.
3. Car loan
4. Personal loan
3.2 Strategic Objectives
• Building deep and long-standing relationships with related personnels and constantly
improving the quality of products and services.
• Developing our human resource talents with a disciplined approach to the management
of risks and costs.
• Adequate capital and liquidity to sustain our business over the long term.
3.3 Journey
DBH Finance LTD was founded in 1996 to provide long term financing solutions for housing
and real estate development. DBH was listed on the Dhaka Stock Exchange In 2006. It involved
in social responsibility (CSR) in 2010 and also offered green financing options and services.

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DBH Finance LTD is regulated by the regulations of the Bangladesh Security Exchange
Commission (BSEC) and the Dhaka Stock Exchange (DSE). It follows the guidelines of the
Bangladesh Bank and the Company Act.
To maintain sustainability DBH involved in CSR, green financing and aligns its efforts with
the United Nations Sustainable Development Goals.
Among all Banks and Financial Institutions of Bangladesh, only DBH has been rated the
highest 'AAA' credit rating for 19th consecutive years. Also, it has the lowest Non-Performing
Loan (NPL) in the industry. Besides, it is a specialized and largest home loan provider with
cumulative disbursement above Tk. 15,500 crores to over 57,000 families. The Wide range of
Loan and Deposit products of DBH caters to customers personal and family needs.
Ratio Analysis for DBH Finance PLC based on the financial highlights of 2022&2023:
Category Name 2022 2023
Gross Profit Margin 99.27% 48.69%
Profitability Ratios Net Profit Margin 44.19% 15.63%
Return on Equity (ROE) 11.81% 13.35%
Liquidity Ratios Current Ratio 1.12 1.19
Efficiency Ratios Asset Turnover Ratio 0.03 0.04
Debt-to-Equity Ratio 1.09 1.39
Solvency Ratios Price-to-earnings (P/E) ratio 11.46 11.09
Earnings Per Share BDT 5.21 BDT 4.95
Source: DBH Finance LTD, Stock Analysis, wsl
Based on the provided financial ratio analysis for DBH Finance PLC for 2022 and 2023, here's
an interpretation of the company's situation for an investor:
3.4 Profitability Ratios
3.4.1 Gross Profit Margin
DBH Finance PLC faced a sudden fall in gross profit margin of 99.27% in 2022 to 48.69% in
2023. There is a significant decline in gross profit margin from 2022 to 2023. This suggests
increased costs of goods sold relative to revenue or reduced revenue compared to costs. This is
a red flag for profitability.
3.4.2 Net Profit Margin
Similar to gross profit margin DBH Finance had to acknowledge the decline from 44.19% of
net profit margin in 2022 to 15.63% in 2023. A sharp decrease in net profit margin indicates

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that the company is experiencing higher expenses or lower revenues. The decline reflects
reduced operational efficiency or external financial pressures.
3.4.3 Return on Equity (ROE)
ROE of DBH Finance in 2022 was 11.81% and 13.35% in 2023. Despite lower profit margins,
the company has slightly improved its ROE, indicating more efficient use of shareholders'
equity to generate profits.
3.5 Liquidity Ratios
3.5.1 Current Ratio
Current ratio of DBH Finance in 2022 was 1.12 and 1.19 in 2023. An improvement in the
current ratio suggests better liquidity. The company has slightly more current assets to cover
its current liabilities, which is a positive sign for short-term financial health.
3.6 Efficiency Ratios
3.6.1 Asset Turnover Ratio
Asset Turnover Ratio of DBH Finance in 2022 was 0.03 and 0.04 in 2023. The asset turnover
ratio remains low but shows a minor improvement. This indicates the company is generating
limited revenue from its assets, and there is room for improvement in asset utilization.
3.7 Solvency Ratios
3.7.1 Debt-to-Equity Ratio
D/E of DBH Finance in 2022 was 1.09 and 1.39 in 2023. An increase in the debt-to-equity ratio
reflects higher reliance on debt financing, which may increase financial risk. This trend could
concern investors who prefer lower debt levels.
3.7.2 Price-to-Earnings (P/E) Ratio
P/E seems to be 11.46 in 2022 and 11.09 in 2023. A slight decrease in the P/E ratio suggests a
decline in market expectations or confidence in the company's future earnings growth. It could
also indicate that the stock is slightly undervalued.
3.7.3 Earnings Per Share (EPS)
EPS seems to be BDT 5.21 in 2022 and BDT 4.95 in 2023. A drop in EPS shows reduced
profitability on a per-share basis, which could negatively impact shareholder returns.
3.8 Investor Outlook
3.8.1 Strengths
• Slight improvement in liquidity (current ratio).
• Improvement in return on equity (ROE) despite declining profit margins.

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3.8.2 Concerns
• Significant declines in profitability (gross profit margin, net profit margin, and EPS).
• Higher debt levels (increased debt-to-equity ratio), which elevate financial risk.
• Low asset turnover ratio indicates inefficient use of assets to generate revenue.
3.8.3 Opportunities
• Addressing cost control and improving revenue could help restore profitability.
• Enhancing asset efficiency can contribute to better financial performance.

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 Chapter 4 - Comparison Between IDLC and DBH Finance PLC
Here is a comparative ratio analysis table below:

IDLC Finance PLC DBH Finance PLC

Category Name
2022 2023 2022 2023
Gross Profit Margin 96.7% 96.6% 99.27% 48.69%

Profitability Ratios Net Profit Margin 10.89% 11.0% 44.19% 15.63%

Return on Equity (ROE) 11.0% 10.6% 11.81% 13.35%

Liquidity Ratios Current Ratio 1.23 1.30 1.12 1.19

Efficiency Ratios Asset Turnover Ratio 0.0204 0.0943 0.03 0.04

Debt-to-Equity Ratio 1.73 1.42 1.09 1.39

Solvency Ratios Price-to-earnings (P/E) ratio 10.5 12.0 11.46 11.09

Earning-Per-Share (EPS) BDT 4.61 BDT 3.64 BDT 5.21 BDT 4.95

Based on the provided comparative financial data for IDLC Finance PLC and DBH Finance
PLC for 2022 and 2023, here's a detailed comparison and investment decision analysis:
4.1 Profitability Ratios
4.1.1 Gross Profit Margin
IDLC Finance PLC in 2022 had 96.7% and 96.6% in 2023 (stable, high margins). Where, DBH
Finance PLC in 2022 had 99.27% and 48.69% in 2023 (sharp decline). Here also, IDLC
Finance PLC shows stable and consistently high margins, while DBH Finance PLC has
experienced a significant decline, suggesting higher costs or revenue challenges.
4.1.2 Net Profit Margin
IDLC Finance PLC in 2022 had 10.89% and 11.0% in 2023 (slight improvement). DBH
Finance PLC in 2022 had 44.19% and 15.63% in 2023 (sharp decline). This time, DBH Finance
PLC initially had much higher margins, but the drastic drop in 2023 indicates a sharp reduction
in profitability. IDLC Finance PLC maintains stable profitability.
4.1.3 Return on Equity (ROE)
IDLC Finance PLC in 2022 had 11.0% and 10.6% in 2023 (slight decline). But, DBH Finance
PLC in 2022 had 11.81% and in 2023 it was 13.35% (improved). Here, DBH Finance PLC
shows better ROE performance, indicating higher returns to shareholders.

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4.2 Liquidity Ratios
4.2.1 Current Ratio
IDLC Finance PLC in 2022 had 1.23 and in 2023 it was 1.30 (improved). Where, DBH Finance
PLC in 2022 had 1.12 and in 2023 it was 1.19 (improved). This time, both companies have
improved liquidity, but IDLC Finance PLC maintains slightly better short-term financial
stability.
4.3 Efficiency Ratios
4.3.1 Asset Turnover Ratio
IDLC Finance PLC asset turnover ratio in 2022 had 0.0204 and in 2023 it was 0.0943
(significant improvement). Whereas, DBH Finance PLC was 0.03 in 2022 and 0.04 in 2023
(minor improvement). Here, IDLC Finance PLC demonstrates a greater improvement in asset
utilization, suggesting it is generating more revenue per unit of assets compared to DBH
Finance PLC.
4.4 Solvency Ratios
4.4.1 Debt-to-Equity Ratio
IDLC Finance PLC in 2022 had 1.73 and 1.42 2023 (reduced debt reliance). Where, DBH
Finance PLC in 2022 had 1.09 and in 2023 it was 1.39 (increased debt reliance). Here, IDLC
Finance PLC has reduced financial leverage, making it less risky, whereas DBH Finance PLC’s
increasing debt reliance could elevate financial risk.
4.4.2 Price-to-Earnings (P/E) Ratio
IDLC Finance PLC in 2022 had 10.5 and 12.0 in 2023 (higher valuation). But, DBH Finance
PLC in 2022 had 11.46 and in 2023 it was 11.09 (slightly lower valuation). Again, IDLC
Finance PLC has a higher P/E ratio, reflecting stronger market confidence in its future earnings
growth.
4.4.3 Earnings Per Share (EPS)
IDLC Finance PLC in 2022 had BDT 4.61 and in 2023 it was BDT 3.64 (decline). Where, DBH
Finance PLC in 2022 had BDT 5.21 and in 2023 it was BDT 4.95 (decline). This time, DBH
Finance PLC has higher EPS, but both companies experienced a decline, signaling reduced
per-share profitability.
4.5 Key Considerations for Investment Decision
4.5.1 Strengths of IDLC Finance PLC
• Stable gross and net profit margins, showing consistent profitability.

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 • Improved asset turnover ratio, indicating better operational efficiency.
• Reduced debt-to-equity ratio, lowering financial risk.
4.5.2 Strengths of DBH Finance PLC
• Higher ROE in 2023, indicating stronger returns on shareholder equity.
• Higher EPS compared to IDLC Finance PLC.
4.5.3 Concerns for IDLC Finance PLC
• Declining EPS and slight drop in ROE.
• Higher P/E ratio may indicate overvaluation, posing a risk if future earnings don't meet
expectations.
4.5.4 Concerns for DBH Finance PLC
• Significant declines in gross and net profit margins.
• Increased debt-to-equity ratio, raising financial risk.
• Minimal improvement in operational efficiency (asset turnover ratio).

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 Chapter 5 - Conclusion
5.1 Final Recommendation
The comparative analysis of IDLC Finance PLC and DBH Finance PLC reveals distinct
investment opportunities tailored to varying investor risk profiles.
IDLC Finance PLC demonstrates superior stability, consistent profitability, and improved
operational efficiency. Its reduced reliance on debt (decreasing debt-to-equity ratio) and strong
market confidence (reflected in the higher P/E ratio) make it an attractive choice for risk-averse
investors seeking sustainable, long-term growth. Despite minor declines in EPS and ROE, the
company's overall performance indicates a steady foundation for conservative investors.
DBH Finance PLC while showing higher returns on equity (ROE) and a greater earnings per
share (EPS), faces significant challenges, including a sharp drop in gross and net profit margins,
increased debt reliance, and limited improvement in operational efficiency. These factors
introduce greater financial risk, making DBH more suitable for investors with higher risk
tolerance, who are willing to trade short-term volatility for the potential of higher returns.
5.2 Investment Decision
For conservative investors, IDLC Finance PLC stands out as the preferable option due to its
stability, consistent performance, and reduced financial risk.
For risk-tolerant investors seeking potentially higher returns, DBH Finance PLC offers
appeal despite its current challenges, provided they closely monitor the company's efforts to
restore profitability and manage debt levels effectively.

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