Application of Financial Management Techniques in Banking Companies of Bangladesh

Topics: Net present value, Investment, Internal rate of return Pages: 80 (26903 words) Published: December 30, 2010
Chapter – 1

This Chapter covers the following:
* Rational of the Study
* Objective of the report
* Scopes of the Study
* Methodologies of the Study
* Limitations of the Study

1.01 Rational of the Study

In today’s modern and globalization world, business sector is competitive. Theoretical knowledge is not enough for a business student because there is a gap between theoretical knowledge and practical field. It is more competitive in the financial institution like bank. Now a day’s local banks are playing a key role for economic growth and development of the country. In that case Bank Companies, these are playing a pioneer role for structural development of the country. These banks also provide some social responsibility. As a part of BBA program in the University of Liberal Arts Bangladesh, I was assigned to write a report on “Application of Financial Management Techniques in Banking Companies of Bangladesh”. This study mainly covered the analysis of Financial Management Techniques applied by selected five banking companies.

1.02 Objective of the Report

Main objective:

* The research is to acquire knowledge about financial management techniques and its application in banking companies.

Specific objective:

* To review how Financial Management Techniques are applied in organizations.

* To discuss some important techniques (Financial Management, therefore, done by different techniques like capital budgeting, cost of capital, capital structure, leverage, working capital management, cash flow statement, funds flow statement, ratio analysis, dividend policy and risk and uncertainty analysis).

* Overall presentation of 4W’s (What, Why, When and Where) of Financial management Techniques.



1.03 Scope of the Study

Banking sector is now a very well growing sector in Bangladesh. The scope of the study will be limited to the application and analysis of financial management techniques by five selected banking companies of Bangladesh; Prime Bank Limited, Dutch-Bangla Bank Limited, City Bank, National Bank Limited and IFIC Bank Limited.

1.04 Methodology of the Study

For preparing this report mainly Primary and Secondary data have been used. Data have been collected from two (2) sources: Primary sources:
* Face-to-face conversation with the respective officers and stuffs. * Annual report of sample organization.
Secondary sources of data:
* Searching information through the Web sites and online library. * Using some of the textbook, papers.
* Case studies on financial management and publications of different authoritative bodies. * Some international articles, brochure etc.
* Professional judgments, paper presented in seminar, newspaper have also been used to conduct the research.

1.05 Limitations of the Study

There is a certain boundary to cover this study. To achieve the objective of the study, i.e. through details knowledge about the Application of Financial Management Techniques in Banking Companies of Bangladesh was the main objective of this study. It was not possible due to shortage of time to cover each and every technique in detail applied by the bank. Like any other articles and theories, this study is not free from limitations. I have tried my level best to overcome these limitations through extensive study, hard and sincere devotion to the assigned duty. The major limitations are: * The bank personnel and officials were very busy with their occupational activities. Hence it was little bit difficult for them to help within their high schedule. * Time is an important issue in report writing. As I have been given a specific dead Line for submission, observation and learning all the banking operation within three month and also to prepare the report all along which is really tough. * Relevant data and document collection were difficult due to the...
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