The document analyzes the fundamental factors affecting the performance of Unilever Bangladesh. It finds that Unilever has reduced costs tremendously over the last four years through effective supply chain management. This includes negotiations with suppliers to reduce costs at each step of the supply chain. Analyzing economic variables like inflation rates over the period also shows why Unilever's product prices increased despite cost reductions. The company's performance is still dependent on broader economic and political stability factors in Bangladesh.

1. Subject: Investment Management & Portfolio Analysis
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2. Submitted To:
Mrs. Fahmida Ahmed
Lecturer
FBA, USTC
Submitted By:
Ms. Bishakha Barua
Roll no: 1171
Semester: 8th
(Finance)
FBA, USTC
Submission Date: 19-12-2015

4. Fundamental Analysis is the study of the
various factors that affect a company’s
earnings and dividends.
Fundamental analysis studies the
relationship between a company’s
share price and the various elements
of its financial position and
performance.

5. New Efficiency
Measures
Change in Senior
Management
Product Innovations
Acquisition of
Another Business
Industrial Action
Fundamental analysis is a detailed analysis of the
fundamental factors affecting the performance of
company

6. A fundamentalist makes use of the EIC framework of analysis
EIC
Economy
Industry
Company
The fundamental analysis of share/ security involves 3 steps
Economy Analysis
Industry Analysis
Company Analysis

7. Economy Analysis

8. The performance of a company depends on the
performance of the economy.
If the economy is booming, incomes rise, demand for goods
increases, and hence the industries and companies in
general tend to be prosperous.
On the other hand, if the economy is in recession, the
performance of companies will be generally bad
The economy is studied to determine if overall conditions
are good for the stock market-
Is inflation a concern?
Are interest rates likely to rise or fall?
Are consumers spending? Is the trade balance favorable?
Is the money supply expanding or contracting?

9. Key Economic Variables
An economic variable is any
measurement that helps to determine
how an economy functions.

10.  Growth Rates of National Income
The rate of growth of the national economy is an important
variable to be considered by an investor.
An economy typically passes through different phases of
prosperity, known as the different stages of the
economic or business cycle

11.  Inflation
 Inflation is the percentage change in the value of the
Wholesale Price Index (WPI) on a year-on year basis.
 It effectively measures the change in the prices of a
basket of goods and services in a year.
Formula for calculating Inflation=
(WPI in month of current year-WPI in same month of previous year)
-------------------------------------------------------------------------------------- X 100
WPI in same month of previous year
 Interest Rates
 The interest rate is the percent charged, or paid, for the
use of money
 It is charged when the money is borrowed, and paid when
it is loaned.
 The interest rate that the lender charges is a percent
of the total amount loaned.

12.  Government Revenue
Government revenue is money received by a government.
Revenues earned by the government are received from
sources such as- Taxes
Exports and Imports
Government-owned corporations' incomes
Central bank revenue
Capital receipts
 Government Expenditure
The amount of money that a government spends in order to
achieve its planned budget

13.  Deficits
When government expenditure exceeds its revenue, there
occurs a deficit. This deficit is known as budget deficit

14.  Exchange Rates
The price of one country's currency expressed in another
country's currency
 Infrastructure
 It’s the basic physical systems of a business or nation
 The development of an economy depends very much on the
infrastructure available. Industry needs-
 Electricity for its manufacturing activities
 Roads and railways to transport raw materials and finished
goods
 Communication channels to keep in touch with suppliers and
customers.

15. Monsoon
The season during which the southwest monsoon blows,
commonly marked by heavy rains; rainy season.
Because of strong forward and backward linkages between
agriculture and industry, performance of several industries
and companies are dependent on the performance of
agriculture.

16. Economic and Political Stability

17. Economic Analysis of
Unilever Bangladesh
150 million times a day, someone somewhere chooses a Unilever
product. From feeding your family to keeping your home clean
and fresh, our brands are part of everyday life.

18. Findings

19. Due to the company is not listed with the Dhaka Stock
Exchange market, so we could not produce the actual
financial data of the company to find out the cost
efficiency.
But after collecting some economic information, our logical
thinking has come out with this concept that, the company has
reduced its cost tremendously during last four years.
It has reduced its cost by its supply chain management and
now it is become a very important department of the company.
In every steps of its supply chain management it is reducing its
costs, which brought high profits to the company.
We can explain the fact by emphasizing its supply chain
factors and the negotiations of the company with its
suppliers of raw materials.

20. Results

21.  Unilever Bangladesh has reduced its cost by its supply chain management. If we
look at the inflation rate of the country from the financial year 2000 to 2004,
we can easily understand why prices of the products increased. The following
chart shows the inflation rate of Bangladesh.
YEAR INFLATION RATE
2000 2.8%
2001 1.9%
2002 2.8%
2003 4.4%
2004 5.8%
 It contributes to the increase of the growth rates of national income
 It provides a good range of interest rate to its investors and shareholders
 As the company is a part of the economy, it serves the national budget.
 Monsoon is an important variable that can affect the productivity,
import-export transactions of the company.
 Political stability is a huge challenge for a developing country like
Bangladesh. The political unrest or instability affects the company as
a whole.