TITLE OF THE PROPOSAL
A Proposal for a Project Work Report
Submitted By:
Name
TU Registration:
Khwopa College
Submitted To:
Faculty of Management
Tribhuvan University
Kathmandu, Nepal
In Partial Fulfillment of the Requirement for Degree of
"BACHELOR OF BUSINESS STUDIES (BBS)"
Bhaktapur, Nepal
February 2026
1. Background
Financial performance analysis is the process of determining the operating and financial
characteristics of a firm from accounting and financial statements. The goal of such analysis
is to determine the efficiency and performance of firm's management as reflected in the
financial records and reports. The analyst attempts to measure the firm's liquidity,
profitability, and other indicators that the business is conducted in a rational and normal way;
ensuring enough returns to the shareholders to maintain at least its market value. (Amalendu
Bhunia, 2011)
Financial analysis is important to not only a firm's manager, but also for the firm's investors
and creditors. Internally, financial managers use the information provided by financial
analysis to help make financing and investment decisions to maximize the firm's
value. Externally, stockholders and creditors use financial statement analysis to evaluate the
attractiveness of the firm as an investment by examining its ability to meet current and
expected future obligations. (Ghatuwa, 2021)
Financial performance is a general measure of a firm's overall financial health over a given
period. The financial performance identifies how well a company generates revenues and
manages its assets, liabilities, and the financial interests of its stakeholders. This study thus
aims to examine and analyze the financial performance of API Power Company Limited.
Also, focuses on analyzing the impact of firm size, liquidity, short term debt, long term
investment and firm age on return on asset (ROA) and return on equity (ROE) of the API
Power Company Limited.
2. Profile of API Power Company Limited
API Power Company Limited (API) is a prominent independent power producer in Nepal,
specializing in hydroelectric and solar energy generation. Established in 2003, the company
was founded with the vision of harnessing Nepal’s abundant water resources to contribute to
the country's growing energy demand. Over the years, API has expanded its operations,
developing multiple hydropower and solar projects, making it a key player in Nepal’s
renewable energy sector. The company has also been publicly listed on the Nepal Stock
Exchange (NEPSE), reflecting strong investor confidence in its financial and operational
performance. (API Power Company Limited, n.d.)
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In recent years, API Power company Limited have made strategic efforts to expand its
investment portfolio not only in energy sector widely also in real estate infrastructure
development. This diversification not only strengthens its financial resilience but also
positions the company to capitalize on new opportunities, mitigate risks and drive sustainable
growth. Its aim is to safeguard the company from market volatility while positioning
company for success in both the short and long term.
API has successfully developed and commissioned various hydroelectric projects, including
the 8.5 MW Naugarh Gad Small Hydropower Project and the 8.00 MW Upper Naugarh Gad
Hydropower Project. The company has also ventured into solar energy, with its 4 MW
Chandranigahpur, diversifying its portfolio. These projects contribute significantly to the
national grid, supporting Nepal’s efforts toward energy sustainability and reducing
dependency on imported fossil fuels. Through strategic partnerships and investments, API
continues to expand its capacity and improve operational efficiency.
3. Statement of Problem
Company's financial health play a crucial role for the firm's manager and investors of
company as it provides information on overall financial health over the year of company.
Therefore, financial performance analysis helps to determine the financial and investment
decision to maximize the firm's value and evaluate the attractiveness of the firm by
examining its ability to meet current and expected future obligations. Moreover, hydropower
company face challenges with high initial investment costs, difficulty attracting foreign
investment, and fluctuating capital costs, along with regulatory and market risks.
This study will deal with the following research questions:
i. What is the position of company based on financial and statistical tools?
ii. What is the company’s profitability over the last five years?
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4. Objectives
The primary objectives of this financial performance analysis are:
i. To examine the company's profitability, liquidity, and solvency positions.
ii. To analyze trends in key financial ratios and indicators.
5. Rationale
Research report helps to provide effective solution to the problem arise in the company.
Financial performance analysis can help in identifying weaknesses before they turn into a
crisis. Moreover, this study will help to address the current financial ratios position of
company which will be beneficial for those people who are interested in getting the
knowledge on financial performance of API Power Company Limited. It will be helpful for
students as a reference for their selected topic. It will be helpful for investors of API Power
Company Limited.
6. Literature Review
Review of literature is basically a study of taking of available literature in field of a
research. A comprehensive review of recent and relevant literature has been considered as the
background of research work. It supports the researchers to explore relevant and fact for
reporting purpose. Following are some reviews about the ratio analysis and financial
performance analysis previously researched.
Ghatuwa (2021) carried out the research "Financial Performance Analysis of Chilime
Hydropower Company Limited". The main objective of the study was to present the
profitability position of the Company. It evaluates the relationship between the liquidity and
profitability of the Chilime Hydropower Company Limited. The major findings of the
research was it's decreasing Net Profit margin and ROE with increasing TATOR ratio.
(Basnet, 2007) conducted research on a title "A Study on Profitability and Solvency Position
of Nabil Bank Limited". The main objective of the study was suggestion and
recommendation some measure on the basis of the study of financial performance evaluation
and finding for the improvement financial performance of Nabil Bank Limited in future.
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(Gautam, 2020) conducted research on a title "Financial Performance Analysis of Nepalese
Financial Institution" which highlights the financial performance analysis to detect financial
health of finance companies' development banks and commercial banks was a less explore
research in Nepalese context. This paper, therefore, attempts to examine the financial
performance and factors influencing financial performance of Nepalese financial depositary
institutions in the framework of CAMEL also shows that financial institutions in each
category meet NRB standard regarding capital adequacy.
7. Research Methodology
7.1. Research design
Research design is the framework of research methods and techniques chosen by a
researcher. The research design used for the study is descriptive.
7.2. Population and sample
A population refers to an entire group of people, event, hospital visit, or measurement.
Around 216 hydropower companies listed in Nepal Stock Exchange are population for this
report and API Power company Limited is the sample for performing this study. All the
required data will be collected from the annual report of this company from fiscal year
(2076/77 to 2080/81)
7.3. Source of data
This report is based on secondary data. The necessary data will be collected from the audited
report of the concerned company, the Website of API, and reports published by the Nepal
Stock Exchange.
7.4. Tools
To find out the solution to research problems, valid tools should be used. The following tools
will be used for data analysis:
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7.4.1. Statistical tools
Descriptive statistics refers to the mathematical tools which are used to forecast the future
based on past data and which help to express the data. The statistical tools used in the report
will be table, bar diagram, line charts, mean, sd and correlation, and so on.
7.4.2. Financial tools
Financial tools that are used to measure the financial performance of the concern from a long-
term as well as short-term solvency point of view are called financial tools. Some of the
major financial ratios used to indicate each component of investment pattern are as follows:
i. Net Profit Margin
ii. Return on Assets
iii. Return on Shareholder's Equity
iv. Earnings Per Share
v. Book Value per Share
vi. Equity Multiplier
8. Limitation
The study is subject to various limitations and may not be applicable in areas other than the
one studied. Despite efforts to collect all information for overall analysis of the organization
and intended system, there are still some limitations of the study due to various reasons, and
they are as follows:
i. This report is based on secondary data only.
ii. Only selected tools and technique are used such as tables, trend lines, mean, sd are
used.
iii. The study is limited only to the period of fiscal year (2076/77-2080/81).
9. Organization of the Study
The research report will include three chapter. The first Chapter I will include general
background of the study, objective of the study, its important and limitations etc., Chapter II
will contain research methodology and data analysis. The Chapter III will include summary
and conclusion of the research report.
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9. References
Amalendu Bhunia, S. S. (2011). Financial Performance Analysis-A Case Study. Current
Research Journal of Social Science, 269.
API Power Company Limited. (n.d.). Retrieved from API Power Company Limited:
[Link]
Basnet, P. R. (2007). A Study on Profitability and Solvency Position of Nabil Bank Limited.
Kathmandu: Google Scholar.
Gautam, K. R. (2020). Financial Performance Analysis of Nepalese Financial Institutions.
Google Scholar.
Ghatuwa, R. (2021). Financial Performance Analysis of Chilime Hydropower Company
Limited. Bhaktapur: Unpublished Report.