Operational Performance Evaluation of Meghna Petroleum Limited (MPL) - A Case Study

Abstract

Evaluating performance through ratio analysis is a sin-qua-non for sustainable growth and measuring future risk of liquidation of a manufacturing company. The current study is an attempt to evaluate the status of the financial performance of Meghna Petroleum Limited (MPL) through liquidity, profitability and productivity position of MPL. The study found that the financial performance in terms of liquidity and profitability is considered to be below satisfactory level. In case of activity ratio total asset turnover ratio indicates satisfactory which means efficient utilization of investment in generating more revenue. Current assets turnover ratio were also found positive and prove efficient management policy in collecting receivables and clearing stock very quickly. The study also depicted that MPL’s long term solvency position in terms of  debt to total asset ratio was found highly satisfactory  which means less risk of  sustainability in the long run. The value of Z also indicates the financial soundness and less risk of bankruptcy of MPL. The study suggest some policy implications for future growth and development of MPL like; introduction of modern technologies and research and development, modern marketing techniques to boost up revenue, suitable pricing policy and the like.

Key words: Solvency, Profitability, Asset-management, Productivity, Z score, Balanced Score Card.