Performance analysis of working capital management of “pharmaceuticals industry”
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Page 1 of 166
Performance Analysis of
Working Capital Management of
“Pharmaceuticals Industry”
Page 2 of 166
A Term Paper
on
Performance Analysis of Working Capital Management of “Pharmaceuticals
Industry”
Submitted To:
Khairul Alom
Course Teacher
School of Business Studies
Southeast University
Submitted By:
Name ID No Md. Fayshal Hossan Miazy 2009110000038
Mubashir Hossain 2009010000050 (21st)
Md. Ahadul Islam 2009110000049
Md. Robiul Islam 2009110000066
Md. Shaheen 2009110000069
BBA.22nd. Batch.
Major: Finance-A
Southeast University
Date of Submission: 27 August, 2012
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Acknowledgement
At first, we thank to almighty Allah who made us capable to prepare this proposal. Secondly
would like to thank my honorable advisor Khairul Alom and course teacher of Southeast
University, School of Business for providing proper guidance and help to complete the term
paper.
We are also grateful to the DSE library that’s helped me to collect the information. At last we
want to thank my group members for their co- operation and making this possible to submit this
term paper on time.
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Dedication
Dedicate to our respected “Parents”
And
Our honorable course teacher “Khairul Alom”
Page 5 of 166
Letter of Transmittal
27 August, 2012
To,
Khairul Alom
Course Teacher
School Of Business Studies
Southeast University
Subject: Submission of term paper on Performance Analysis of Working Capital Management
of “Pharmaceuticals Industry”.
Dear Sir,
With due respect, we are submitting this term paper on Performance Analysis of Working
Capital Management of “Pharmaceuticals Industry”. We took help from our course teacher
Khairul Alom, from internet and used our creativity. This proposal is only for academic purpose.
This is not at all for regular activities.
I therefore, request your favor to accept our term paper.
Yours Sincerely
------------------------------
Md Fayshal Hossan Miazy
(On behalf of the group member)
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Table of Contents
No. Particular Page No.
1 Introduction 01
1.1 Pharmaceutical Sectors in Bangladesh 01--02
1.2 Market Size & Growth 02-03
2 Background of the report 03
2.1 Purpose of the report 04
2.2 Limitation of the Study 04
3 Methodology 05
3.1 Data Collection 05
3.2 Data Analysis 05
4 Historical Background of the companies 6-16
4.1 Square Pharmaceuticals Ltd. 06-07
4.2 Ibn Sina Pharmaceuticals Ltd. 08-09
4.3 Ambee Pharmaceuticals Ltd. 10-11
4.4 Beximco Pharmaceuticals Ltd. 11-14
4.5 Renata Pharmaceuticals Ltd. 15-16
5 Theoretical Review 17-23
6 Ratio Analysis & Time Series Analysis 44-128
6.1 Square Pharmaceuticals Ltd. 24-44
6.2 Ibn Sina Pharmaceuticals Ltd. 45-65
6.3 Ambee Pharmaceuticals Ltd. 66-86
6.4 Beximco Pharmaceuticals Ltd. 87-107
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6.5 Renata Pharmaceuticals Ltd. 108-128
7 Comparative Analysis 129-147
8 Findings 148
9 Recommendation 148
10 Conclusion 149
11 Appendix 150
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1. Introduction
The pharmaceutical market in Bangladesh is pretty small compared to the population size of the
country, mainly because of the lack of spending power of the population. Pharmaceutical
spending is also amongst the lowest in the world in per capita terms. Healthcare expenditures
consist of only 3.35% of GDP. However, increased awareness of healthcare, increase in per
capita income, emergence of private healthcare services and the government’s increased
expenditure in this sector, together with other factors, have caused the demand to rise in recent
years. The sector is also protected from external competition as imports are completely restricted
for similar drugs that are manufactured locally. This sector reports provides an overview of the
pharmaceutical sector in Bangladesh and highlights the top performers that are listed in the
Dhaka Stock Exchange (DSE).
1.1 Pharmaceutical Sector in Bangladesh
Pharmaceutical sector is technologically the most developed manufacturing industries in
Bangladesh and the third largest industry in terms of contribution to government’s revenue. The
industry contributes about 1% of the total GDP. There are about 250 licensed pharmaceutical
manufacturers in the country; however, currently a little over 100 companies are in operation. It
is highly concentrated as top 20 companies produce 85% of the revenue. According to IMS, a
US-based market research firm, the retail market size is estimated to be around BDT 84 billion
as on 2011.
Bangladesh pharmaceutical companied focus primarily on branded generic final formulations,
mostly using imported APIs (Active Pharmaceuticals Ingredient). Branded generics are a
category of drugs, including prescription products, that are either novel dosage forms of off-
patent products produced by a manufacturer that is not the originator of the molecule, or a
molecule copy of an off-patent product with a trade name. About 85% of the drugs sold in
Bangladesh are generics and 15% are patented drugs - the structure differs significantly from the
international market. Branded generic drugs represent about 25% on average of worldwide
pharmaceuticals sales’; however, given the popularity in emerging markets like China, India and
Latin America, branded generic drugs may well dominate the total sales within a decade.
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Bangladesh manufactures about 450 generic drugs for 5,300 registered brands which have 8,300
different forms of dosages and strengths. These include a wide range of products from anti-
ulcerants, flouroquinolones, anti-rheumatic non-steroid drugs, non-narcotic analgesics,
antihistamines, and oral anti-diabetic drugs. Some larger firms have also started producing anti-
cancer and anti-retroviral drugs. Domestic manufacturers account for 97% of the drug sales in
the local market while the remaining 3% are imported. This is a complete turnaround over from
two/three decades back when imports used to dominate the market. The imported drugs include
essential live saving drugs and other high quality drugs. The ratio will further increase in favor of
the local production as some of the big players are poised to manufacture these high quality
drugs in-house in the future.
1.2 Market Size and Growth
As stated earlier, the size of the retail market reached BDT 84.0 billion as on 2011 based on IMS
report. The report further stated that, retail sales in the domestic market achieved 23.6% growth
in 2011 following 23.8% and 16.8% growth in 2010 and 2009 respectively. High growth in the
last three years (78.8% cumulative and 21.4% CAGR) meant that the Bangladesh Pharmaceutical
market doubled in just over four years. The retail market also crossed USD 1.0 billion in size in
2011. It is one of the fastest growing sectors in the country with an annual average growth rate of
17.2% over the last five years and 13.1% over the last decade.
However, considering that IMS does not include rural market in their survey, the actual size of
the market will vary slightly (5%-10%). It is estimated that the retail market represent 90% of the
total market; in that respect the total market size (including the rural market) is expected to be
over BDT 90.0 billion at present.
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2. Background of the report:
Performance evaluation of a company is usually related to how well a company can use it assets,
share holder equity and liability, revenue and expenses. Financial ratio analysis is one of the best
tools of performance evaluation of any company. In order to determine the financial position of
the pharmaceutical company and to make a judgment of how well the pharmaceutical company
efficiency, its operation and management and how well the company has been able to utilize its
assets and earn profit.
We used ratio analysis for easily measurement of liquidity position, asset management condition,
profitability and market value and debt coverage situation of the pharmaceutical company for
performance evaluation. It analysis the company use of its assets and control of its expenses. It
determines the greater the coverage of liquid assets to short-term liabilities and it also compute
ability to pay pharmaceutical company monthly mortgage payments from the cash generate. It
measures pharmaceutical company overall efficiency and performance. It determines of share
market condition of pharmaceutical company. It also used to analysis the pharmaceutical
company past financial performance and to establish the future trend of financial position.
We are choosing five pharmaceutical companies in Bangladesh. At first we discuss square
pharmaceutical company. It is the most famous company in Bangladesh. It was established in
1958 but their converted into public limited company in 1991.It is the first position among all
national ,multination, private and public of pharmaceutical company of Bangladesh. Their
mission is to produce and provide quality healthcare relief of people, maintain strongly ethical
standard in business operation also ensuring benefit to 6 the shareholder, stakeholder, and
society. Their vision is social wellbeing of the investors, employee and society at large, wealth
financial and moral gains as a part of the process of the human civilization.
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2.1 Purpose of the report:
In this report we determine the ratio analysis, time series analysis and gross sectional Ratio
analysis is used to evaluate a company's financial and operating status. It's usually used in
comparative terms, i.e. current year as compared with prior year(s). It provides information about
a company's solvency and profitability. To determine if a company would be a wise investment.
This report compares ratios like current assets or quick assets to other similar companies to see
what kind of liquidity they carry. The other purposes of the report are to know the earning
capacity or profitability, company’s financial strengths, make a comparative study with other
firms and the efficiency of the management
2.2 Limitation of study
There is some limitation of our thesis. When we used the main methods of ratio analysis for
performance evaluation of pharmaceutical company .We can face different kinds of problem. In
order to achieve the good of performance evaluations we need to choose a ratio that is suitable
.This means that data must be correct, otherwise calculate of ratio may be erroneous. Sometime
we can’t find the items to analysis the ratio such as common share holder equality, weight
average outstanding of number of share, market value of share, book value of share, interest
charged etc as result we can’t complete ratio analysis and also can’t compare among both
companies.
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3. METHODOLOGY
This chapter describes how the data needed in order to fulfill the purpose was collected. It also
discusses the model and formula, how to presenting the model and formula in our term paper.
We used quantitative approach for our thesis because the majority of data collection from the
quantitative approach. That is explained as below as;
3.1 Data collection
Main data for our term paper are the annual financial reports on Square, Ibn Sina, Ambee,
Beximco and Renata pharmaceutical company in 2007 to 2011. When we measurement the ratio
analysis for any company, we must be used in annual financial report otherwise we don’t
measurement. We have also used four main financial statements for ratio analysis of
pharmaceutical company such as; balance sheets, and income statement.
3.2 Data analysis
We used the model for performance evaluation of pharmaceutical company. It is briefly
discusses next page. It indicates the different steps such Selection of financial report,
Identification of balance sheet, income statement and cash flow statement, ratio analysis,
mathematical calculation, statistical analysis of companies, comparison of among both
companies and declaration of best one among five companies.
We do a selection of financial report that means a chore of annual financial report. The annual
financial report present financial data of a company's position, operating performance, and funds
flow for an accounting period .We use the annual reporting of five pharmaceutical companies in
2007 to 2011.
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4. Historical background of the Companies
4.1 Square Pharmaceutical Company Ltd
SQUARE Pharmaceuticals Limited has extended her range of services towards the highway of global market. She pioneered exports of medicines from Bangladesh in 1987 and has been exporting antibiotics and other pharmaceutical products. This extension in business and services has manifested the credibility of Square Pharmaceuticals Limited.
SQUARE today symbolizes a name – a state of mind. But its journey to the growth and prosperity has been no bed of roses. From the inception in 1958, it has today burgeoned into one of the top line conglomerates in Bangladesh. Square Pharmaceuticals Ltd., the flagship company, is holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985 and is now on its way to becoming a high performance global player.
SQUARE Pharmaceuticals Limited is the largest pharmaceutical company in Bangladesh and it has been continuously in the 1st position among all national and multinational companies since 1985. It was established in 1958 and converted into a public limited company in 1991. The sales turnover of SPL was more than Taka 11.46 Billion (US$ 163.71 million) with about 16.43% market share (April 2009– March 2010) having a growth rate of about 16.72%.
VISION
We view business as a means to the material and social wellbeing of the investors, employees and the society at large, leading to accretion of wealth through financial and moral gains as a part of the process of the human civilization.
MISSION
Our Mission is to produce and provide quality & innovative healthcare relief for people, maintain stringently ethical standard in business operation also ensuring benefit to the shareholders, stakeholders and the society at large.
OBJECTIVE
Our objectives are to conduct transparent business operation based on market mechanism within the legal & social frame work with aims to attain the mission reflected by our vision.
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SQUARE Pharmaceuticals Limited Products & Services
The formulation plants are producing wide range of dosage forms like -
Tablets : Non-Coated (plain, chewable, dispersible, vaginal) Coated (sugar coated, film coated, enteric coated) Sustained/Extended Released (coated, non – coated)
Capsules : Granulated Material filled Pellets Filled
Suppositories : Suppocire based
Injections : Vials containing Dry Powder for Injections Small Volume Liquid Parenterals
Liquids : Oral Syrups (Sugar based, Non-Sugar based) Oral Suspensions Topical Liquids
Spray, Drops, Ointment, Cream and Powder :
Small Volume Sterile Eye & Ear Drops Small Volume Nasal Drops & Sprays Topical Ointments & Creams Topical Antibiotic Powder
Oral Dry Powders : Dry Suspensions (Antibiotic & Anti Infectives) Dry Syrups (Antibiotics)
Dry Powder Inhalers : Partial Filled (Premix) Capsules for Respiratory Tract Application with a Device
Metered Dose Inhalers : Pressurized Canisters for Oral use with an Actuator
Prefilled Syringe Injection : The advanced parenteral technology
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4.2 The IBN SINA Pharmaceutical Industry Ltd
The IBN SINA Pharmaceutical Industry Ltd. Was founded on 1983 in a campus of about 15
acres of land, about 56 km away from Dhaka city. The Industry was established by the Trustee
Board as a Limited company. Then it was converted into a public limited company in 1989.Now
IBN SINA TRUST owns 50% share of the industry and the public shares the rest 50%.
The commercial production was started in MAY 1986 with only few standard finished
pharmaceutical dosage forms. Since the beginning IBN SINA was committed to provide height
quality healthcare services in Bangladesh and within a very short period of time it achieved the
target and fulfilled its commitment. It has also occupied a very prestigious position in the
pharmaceutical field of Bangladesh for its quality and ethical standard.
Now IBN SINA is expanding its business area internationally across the world and has already
started exporting.
The company is always devoted to ensure the high quality of medicines by implementing state of
art technologies and modern machineries.
The IBN SINA Pharmaceutical Company in Bangladesh with sufficient expertise and
experiences. Healthcare is one of the important factors among the fundamental need of the
human being. Sound mind prevails in sound health and healthy man can contribute his might to
the nation-building activities. Since the establishment of IBN SINA Pharmaceutical Industry Ltd.
(IPI) in 1983, it has been aiming to fulfill this fundamental demand of the people of Bangladesh
and is committed to reach the healthcare services to the door-step of the common people. We
believe that the experience and skill of the physicians supported with quality medicines can only
ensure better human life. The IBN SINA Pharmaceutical Industry Limited has endlessly exerted
all its efforts for building quality into the product.
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Vision
A public limited company working for the nation as a whole with pertinacious incitement and
firm determination to ensure the quality and ethical standing attributing the sustainable growth
and development to serve the mankind.
Mission
IBN SINA's vision is to become a premier specialty pharma- ceutical company, with a balanced
focus in complementary therapeutic areas. Our primary responsibility lies towards people of
Bangladesh & ultimate responsibility towards huminity at large.
Major Products & Services:
Sl.No. Product Name Generic Name Dosage form
1 Abex Syp Guaiphen+Pseudoephedrin+T.HCl Syrup
2 Algirex 60 Etoricoxib INN 60mg Tablet
3 Algirex 90 Etoricoxib INN 90mg Tablet
4 Algirex 120 Etoricoxib INN 120mg Tablet
5 Angiten Tab Captopril Tablet
6 Anodyne Eye Drop Diclofenac Sodium Eye Drop
7 Anodyne Gel Diclofenac Sodium Gel Gel
8 Anodyne Plus Inj.2ml Diclofenac Sodium Injection
9 Anodyne Tab Diclofenac Sodium Tablet
10 Anodyne-SR-Cap Diclofenac Sodium Capsule
11 Anosea Meclizine HCl USP 50 mg Tablet
12 Antanil Plus Susp. Antacid & Antiflatulent Suspension
13 Antanil Plus Tab. Antacid & Antiflatulent Tablet
14 Antanil Sus Al+Mg Hydroxide Suspension
15 Antanil Tab Al+Mg Hydroxide Tablet
16 Antigrain 0.5mg Pizotifen BP 0.50mg Tablet
17 Antigrain 1.5 mg Pizotifen BP 1.50mg Tablet
18 Axosin- 1gm IM Inj. Ceftriaxone 1gm Injection
19 Axosin- 1gm IV Inj. Ceftriaxone Injection
20 Axosin 2g IV Ceftriaxone Injection
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4.3 Introduction:
AMBEE PHARMACEUTICALS LTD was established in 1976 in Bangladesh. This public
limited company was registered under the companies Act, 1913 and was incorporated in
Bangladesh on 4th February 1976. Ambee has a joint venture with a famous multinational
company Medimpex of Hungary. Ambee started its operation with a number of modest 17 joint
ventured products and is now running in full swing with 76 products. We have tablets, capsules,
liquids, gel and injectables. Its operational area covers all Bangladesh with a large number of
field force who strive hard to establish the demand of products of the company in every corner of
the country. The company maintains four depots located at Khulna, Bogra, Chittagong and
Sylhet, besides its National Distribution Cell in Dhaka.
Ambee's aim is to achieve business excellence through quality by satisfying customer
expectations. We follow Quality Management System to ensure consistent quality of products.
We also meet all National Regulatory Requirements in our business affair and follow Good
Manufacturing Practices (GMP) as recommended by World Health Organization (WHO) for its
pharmaceutical operations.
In 2001 Ambee Pharmaceuticals Ltd. became an ISO 9001 certified company. ISO 9001
certificate is the international recognition of the quality management system of this organization
that complies with the standard of ISO 9001 system.
Vision:
We want to become a research based global pharmaceutical company in addition to being a
highly efficient generic manufacturer. To discover and develop innovative, value-added products
that improves the quality of life of people around the world. And contribute towards the growth
of our Nation.
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Mission:
Provide people globally with high quality health care products at affordable prices in order to
improve access to medicine and to provide employees an enabling environment that facilitates
realization of their full potential.
Product & Service review:
The Plant is looked after by senior pharmacist Mr. Md. Badrul Kamal (Production Manager). He
has a vast experience of more than 28 years in his field. He has worked with renowned local and
multinational companies such as Fisons Pharmaceuticals, Jayson Pharmaceuticals and now at
Ambee Pharmaceuticals Ltd. Mr. Kamal has worked at various senior positions in his career.
A group of skilled personnel, 194 in number have been discharging their labour and talent for
producing 120 life-saving drugs and medicines under current Good Manufacting Practice
(CGMP) formulated by the Drug Authority of the USA in 1963. The three basic sections :
Quality Assurance, Production and Engineering set the task in motion for making dynamic
management.
The plant management is always alert to resist child-labour and to preserve Human Rights.
Working under a friendly and professional environment and by using modern technology,
equipment and apparatus the team of the plant is capable of producing the following quantity per
year.
Sl. No. Form of Products Quantity (Pcs.)
01 Tablets 400 million
02 Capsules 44 million
03 Injections 10 million
04 Dry Syrup 01.20 million
05 Liquid Products 13 million
06 Cream, Ointments & Gel 01 million
07 Sugar Coated Products 105 million
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4.4 Beximco Pharmaceuticals Ltd.
Beximco Pharmaceuticals Ltd (BPL) is a leading manufacturer of pharmaceutical formulations
and Active Pharmaceutical Ingredients (APIs) in Bangladesh. The company is the largest
exporter of pharmaceuticals in the country and its state-of-the-art manufacturing facilities are
certified by global regulatory bodies of Australia, European Union, Gulf nations, Brazil, among
others. The company is consistently building upon its portfolio and currently producing more
than 400 products in different dosage forms covering broader therapeutic categories which
include antibiotics, antihypertensive, ant diabetics, antireretrovirals, anti asthma inhalers etc,
among many others.
Beximco Pharmaceuticals Ltd (Beximco Pharma) belongs to the largest business conglomerate
in Bangladesh, the BEXIMCO group. Beximco Pharma is engaged in manufacturing both
finished formulations and active pharmaceutical ingredients (APIs). The company was
incorporated in 1976 and commenced operations in 1980 with the manufacturing and marketing
of products of Bayer AG, Germany and Upjohn Inc., USA under licensing arrangements. In
1983, the company started manufacturing its own formulations and it launched export operation
in 1992. In 2002 Beximco Infusions Ltd, the company that produces intravenous fluids was
amalgamated with the parent company. Today Beximco Pharma is the largest exporter of
pharmaceuticals in the country and the only company to win National Export Trophy (Gold), the
highest national accolade for export, for record three times. Company’s state-of-the-art
manufacturing facilities are certified by major regulatory bodies. As a public limited company,
its shares are actively traded in Dhaka Stock Exchange and Chittagong Stock Exchange, and
Beximco Pharma is the only company in the country which got listed on AIM of London Stock
Exchange. The company produces formulations of key therapeutic areas which include anti-
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infectives, gastro-intestinal, cardio-vascular, anti-diabetic, NSAIDs, respiratory, CNS etc, and its
products are available in almost all types of dosage forms, eg., tablet, capsule, syrup,
suppositories, ointments, eye drops, injectables, metered dose inhalers etc. In the domestic
market Beximco Pharma ranks 2nd among 230 companies. In 2009 the company achieved
annual sales turnover of BDT 5000 million with growth of 21%. The company produces more
than 100 branded generics which are available in various dosage forms and many of them are
leaders in their respective therapeutic categories, notable among them are Napa, Neoceptin R,
Neofloxin, Atova, Amdocal, Bextrum and Azmasol. Being the largest exporter of
pharmaceuticals in the country, the company has growing presence in more than 80 countries
across Africa, Latin America, Asia, Middle East and Central America. The company now plans
to enter the regulated markets with its generic portfolio and aims to achieve export sales of more
than $100 million by the year 2014.
Beximco Pharma is among the very few companies in the world who proactively converted CFC
based formulations to ozone friendly HFA Inhalers in compliance with the Montreal Protocol.
The company is now the single largest producer of MDIs in Bangladesh, and the only company
in Asia to contract manufacture GSK’s Ventolin inhaler. The MDI facility has been designed and
installed with the technical collaboration from Pamasol, having an annual production capacity of
15 million canisters which will increase upto 30 million soon.
The bulk drug unit of Beximco Pharma for producing paracetamol is also located at Tongi, while
penicillin API and formulation units are situated at Kaliakoir, a few kms from the main site.
Vision and Mission:
SAGIA’s vision is to act as a gateway to investment in Saudi Arabia. We seek to attract
sufficient investment to achieve sustainable rapid economic growth while capitalizing on the
Kingdom’s competitive strengths as the global capital of energy, and as a major hub between
East and West.
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Products of Square Pharmaceuticals Ltd. Company:
Tablets : Non-Coated (plain, chewable, dispersible, vaginal)
Coated (sugar coated, film coated, enteric coated)
Sustained/Extended Released (coated, non – coated)
Capsules : Granulated Material filled
Pellets Filled
Suppositories : Suppocire based
Injections : Vials containing Dry Powder for Injections
Small Volume Liquid Parenterals
Liquids : Oral Syrups (Sugar based, Non-Sugar based)
Oral Suspensions
Topical Liquids
Spray, Drops, Ointment,
Cream and Powder :
Small Volume Sterile Eye & Ear Drops
Small Volume Nasal Drops & Sprays
Topical Ointments & Creams
Topical Antibiotic Powder
Oral Dry Powders : Dry Suspensions (Antibiotic & Anti Infectives)
Dry Syrups (Antibiotics)
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4.5 Renata Limited
Renata Limited formerly Pfizer Laboratories Bangladesh Limited, also known as Renata, is one
of the top ten pharmaceutical manufacturers in Bangladesh. Renata is engaged in the
manufacture and marketing of human pharmaceutical and animal health products. The company
also manufactures animal therapeutics and nutrition products. Renata currently employs about
2300 people in its head office in Mirpur, Dhaka and its two production facilities in Mirpur,
Dhaka and Rajendrapur, Dhaka.
History:
The Company started its operations as Pfizer (Bangladesh) Limited in 1972. For the next two
decades it continued as a highly successful subsidiary of Pfizer Corporation. However, by the
late 1990s the focus of Pfizer had shifted from formulations to research. In accordance with this
transformation, Pfizer divested its interests in many countries, including Bangladesh.
Specifically, in 1993 Pfizer transferred the ownership of its Bangladesh operations to local
shareholders, and the name of the company was changed to Renata Limited.
In a gesture of corporate charity, Pfizer donated shares so that, along with a partial payment from
the SAJIDA Foundation, 51% ownership of Renata Limited would be held by the Foundation.
Today SAJIDA’s microfinance and micro-insurance programs support over 107,120 members
and their families; thus far cumulative loan disbursement totals BDT 5,750 million. Currently,
SAJIDA’s health program covers over 1 million beneficiaries by delivering services through two
70 bed hospitals, panel doctors in SAJIDA’s micro finance branches, and mobile health teams.
To date, the SAJIDA Foundation holds the majority ownership in Renata Limited
At present, Renata manufactures about 300 generic pharmaceutical products including hormones,
contraceptives, anti-cancer drugs, oral preparations, cephalosporins, parenteral preparations as
well as other conventional drugs. In addition, they also offer about 95 animal therapeutics and
nutrition products.
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No. of Employees: 3,485 employees.
Main Business: Manufacture and Marketing of Human Pharmaceuticals and Animal
Therapeutics. We have two production sites. The Mirpur Site is 12 Acres and Rajendrapur Site is
19 Acres.
Investment:
99.99% Shareholding in Renata Agro Industries Limited
99.99% Shareholding in Purnava Limited
Bankers: Agrani Bank, CitiBank, City Bank, Eastern Bank, HSBC, Mutual Trust Bank, Sonali
Bank, Standard Chartered Bank
Our Vision: To establish Renata permanently among the best of innovative branded generic
companies.
Our Mission: To provide maximum value to our customers, shareholders, colleagues, and
communities where we live and work.
Product & Services: Amino Acid Supplement
Anti-asthmatic Preparation
Anti-bacterial Preparations
Steroid Preparations
Anti-ulcerant Preparations
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5. Theoretical Review:
Ratio Analysis
Ratio Analysis is a form of Financial Statement Analysis that is used to obtain a quick indication
of a firm's financial performance in several key areas. The ratios are categorized as Short-term
Solvency Ratios, Debt Management Ratios, Asset Management Ratios, Profitability Ratios, and
Market Value Ratios.
Ratio Analysis as a tool possesses several important features. The data, which are provided by
financial statements, are readily available. The computation of ratios facilitates the comparison
of firms which differ in size. Ratios can be used to compare a firm's financial performance with
industry averages. In addition, ratios can be used in a form of trend analysis to identify areas
where performance has improved or deteriorated over time.
Because Ratio Analysis is based upon Accounting information, its effectiveness is limited by the
distortions which arise in financial statements due to such things as Historical Cost Accounting
and inflation. Therefore, Ratio Analysis should only be used as a first step in financial analysis,
to obtain a quick indication of a firm's performance and to identify areas which need to be
investigated further.
Short-term Solvency or Liquidity Ratios
Short-term Solvency Ratios attempt to measure the ability of a firm to meet its short-term
financial obligations. In other words, these ratios seek to determine the ability of a firm to avoid
financial distress in the short-run. The two most important Short-term Solvency Ratios are the
Current Ratio and the Quick Ratio.
Current Ratio
The Current Ratio is calculated by dividing Current Assets by Current Liabilities. Current Assets
are the assets that the firm expects to convert into cash in the coming year and Current Liabilities
represent the liabilities which have to be paid in cash in the coming year. The appropriate value
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for this ratio depends on the characteristics of the firm's industry and the composition of its
Current Assets. However, at a minimum, the Current Ratio should be greater than one.
Current Ratio:
Quick Ratio
The Quick Ratio recognizes that, for many firms, Inventories can be rather illiquid. If these
Inventories had to be sold off in a hurry to meet an obligation the firm might have difficulty in
finding a buyer and the inventory items would likely have to be sold at a substantial discount
from their fair market value.
This ratio attempts to measure the ability of the firm to meet its obligations relying solely on its
more liquid Current Asset accounts such as Cash and Accounts Receivable. This ratio is
calculated by dividing Current Assets less Inventories by Current Liabilities.
Cash Ratio:
Net Working Capital-Total Asset:
Asset Management Ratios
Asset Management Ratios attempt to measure the firm's success in managing its assets to
generate sales. For example, these ratios can provide insight into the success of the firm's credit
policy and inventory management. These ratios are also known as Activity or Turnover Ratios.
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Receivables Turnover and Days' Receivables
The Receivables Turnover and Days' Receivables Ratios assess the firm's management of its
Accounts Receivables and, thus, its credit policy. In general, the higher the Receivables
Turnover Ratio the better since this implies that the firm is collecting on its accounts receivables
sooner. However, if the ratio is too high then the firm may be offering too large of a discount for
early payment or may have too restrictive credit terms. The Receivables Turnover Ratio is
calculated by dividing Sales by Accounts Receivables. (Note: since Accounts Receivables arise
from Credit Sales it is more meaningful to use Credit Sales in the numerator if the data is
available.)
The Days' Receivables Ratio is calculated by dividing the number of days in a year, 365, by the
Receivables Turnover Ratio. Therefore, the Days' Receivables indicates how long, on average, it
takes for the firm to collect on its sales to customers on credit. This ratio is also known as the
Days' Sales Outstanding (DSO) or Average Collection Period (ACP).
Inventory Turnover and Days' Inventory
The Inventory Turnover and Days' Inventory Ratios measure the firm's management of its
Inventory. In general, a higher Inventory Turnover Ratio is indicative of better performance
since this indicates that the firm's inventories are being sold more quickly. However, if the ratio
is too high then the firm may be losing sales to competitors due to inventory shortages. The
Inventory Turnover Ratio is calculated by dividing Cost of Goods Sold by Inventory. When
comparing one firms’ Inventory Turnover ratio with that of another firm it is important to
Page 27 of 166
consider the inventory valuation method used by the firms. Some firms use a FIFO (first-in-first-
out) method; others use a LIFO (last-in-first-out) method, while still others use a weighted
average method.
The Days' Inventory Ratio is calculated by dividing the number of days in a year, 365, by the
Inventory Turnover Ratio. Therefore, the Days' Inventory indicates how long, on average, an
inventory item sits on the shelf until it is sold.
Fixed Assets Turnover
The Fixed Assets Turnover Ratio measures how productively the firm is managing its Fixed
Assets to generate Sales. This ratio is calculated by dividing Sales by Net Fixed Assets. When
comparing Fixed Assets Turnover Ratios of different firms it is important to keep in mind that
the values for Net Fixed Assets reported on the firms' Balance Sheets are book values which can
be very different from market values.
Total Assets Turnover
The Total Assets Turnover Ratio measures how productively the firm is managing all of its
assets to generate Sales. This ratio is calculated by dividing Sales by Total Assets.
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Debt Management Ratios
Debt Management Ratios attempt to measure the firm's use of Financial Leverage and ability to
avoid financial distress in the long run. These ratios are also known as Long-Term Solvency
Ratios.
Debt is called Financial Leverage because the use of debt can improve returns to stockholders in
good years and increase their losses in bad years. Debt generally represents a fixed cost of
financing to a firm. Thus, if the firm can earn more on assets which are financed with debt than
the cost of servicing the debt then these additional earnings will flow through to the stockholders.
Moreover, our tax law favors debt as a source of financing since interest expense is tax
deductible.
Debt Ratio, Debt-Equity Ratio, and Equity Multiplier
The Debt Ratio, Debt-Equity Ratio, and Equity Multiplier are essentially three ways of looking
at the same thing: the firm's use of debt to finance its assets.
Debt Ratio
The Debt Ratio is calculated by dividing Total Debt by Total Assets.
Debt-Equity Ratio
The Debt-Equity Ratio is calculated by dividing Total Debt by Total Owners' Equity.
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Equity Multiplier
The Equity Multiplier is calculated by dividing Total Assets by Total Owners' Equity.
Profitability Ratios
Profitability Ratios attempt to measure the firm's success in generating income. These ratios
reflect the combined effects of the firm's asset and debt management.
Profit Margin
The Profit Margin indicates the dollars in income that the firm earns on each dollar of sales. This
ratio is calculated by dividing Net Income by Sales.
Return on Assets (ROA) and Return on Equity (ROE)
Return on Assets (ROA)
The Return on Assets Ratio indicates the dollars in income earned by the firm on its assets.
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Return on Equity (ROE)
The Return on Equity Ratio indicates the dollars of income earned by the firm on its
shareholders' equity. It is important to remember that these ratios are based on accounting book
values and not on market values.
Market Value Ratios:
Earnings per Share (EPS):
Earnings per Share are often used in evaluating a firm’s stock price and in assessing the firm’s
future earnings and ability to pay dividends. The earnings per share ratio is so important that it is
required to be put on the face of the income statement. EPS is a compact indicator of a
company’s performance. Entities with simple capital structures will have only Basic Earnings
per Share.
Book Value per Share
Payout Ratio
Page 31 of 166
6. Ratio Analysis & Time Series Analysis
6.1 Square Pharmaceutical Ltd
Ratio Analysis:
S
N
Ratio Name Formula 2011 2010 2009 2008 2007
Short-Term Solvency or Liquidity Ratio
01 Current Ratio Current Asset/Current
Liabilities
1.5042 2.0539 1.447 1.260 1.440
02 Quick Ratio Quick Asset/ Current Liabilities 0.95979 1.0582 0.65300 0.681 0.836
03 Cash Ratio Cash/ Current Liabilities 0.0793 0.1167 0.1111 0.058 0.0547
04 Net Working
Capital-Total
Asset
Net Working Capital/ Total
Asset
0.12106 0.1537 0.0885 0.071 0.107
Long Term Solvency Ratio or Debt Management Ratios
01 Total Debt Ratio Total Debt/ Total Asset 0.2893 0.22867 0.2473 0.3374 0.3007
02 Debt Equity Ratio Total Debt / Total Equity 0.40720 0.29647 0.32871 0.5092 0.4300
03 Equity Multiplier Total Asset / Total Equity 1.40720 1.29647 1.32871 1.5092 1.4300
Asset Management or Turnover Ratio
01 Inventory
Turnover
Cost of Goods Sold / Inventory 3.03092 2.9728 2.702 2.396 2.7641
02 Days Sales in
Inventory
360/ Inventory Turnover 118.775 121.09 133.194 150.2 130.23
03 Receivable
Turnover
Net Sales/ Accounts Receivable 17.4405 22.553 20.564 22.92 23.23
04 Days in
Receivable
360/ Receivable Turnover 20.6415 15.962 17.505 15.70 15.495
05 Fixed Asset
Turnover
Net Sales/ Net Fixed Asset 1.0844 1.0769 1.03123 0.995 1.1023
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06 Total Asset
Turnover
Net Sales/ Total Asset 0.69281 0.7542 0.7358 0.650 0.7152
Profitability Ratio
01 Profit margin Net Income/ Net Sales 0.18795 0.1821 0.19245 0.167 0.1737
02 Return on assets
(ROA)
Net Income/ Total Assets 0.13022 0.1373 0.14161 0.108 0.1242
03 Return on equity
(ROE)
Net income/ Total equity 0.18324 0.178 0.1881 0.164 0.177
Market value Ratio
01 Earnings per
Share(EPS)
Net Income/ No. of Share
Outstanding
129.07 106.43 156.56 114.4 145.74
02 Book Value Per
Share
Total equity / No. of Share
Outstanding
704.36 597.49 512.02 429.0 373.81
03 Payout Ratio Dividends Paid / Net Income 0.208 0.2312 0.189 0.215 0.28
Page 33 of 166
Time Series Analysis
Short Term Solvency or Liquidity Ratio
1. Current Ratio:
Year 2011 2010 2009 2008 2007
Current Ratio 1.504
2.054 1.448 1.260 1.441
Analysis: In this ratio, we can analysis that the ratio has increased from 2007 to 2011 few times
in square pharmaceutical company. So Current Ratio of 2010 is better than others years. In 2010,
Current Ratio is 2.0539.
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2. Quick Ratio:
Year 2011 2010 2009 2008 2007
Quick Ratio 0.960 1.058 0.653 0.681 0.836
Analysis: In this ratio, we can analysis that the Quick ratio respectively on 2011 is 0.959, on
2010 is 1.058, on 2009 is 0.653, on 2008 is 0.681, and on 2007 is 0.836. We can see that quick
ratio on 2010 is better than in 2007 to 2009 and 2011 years.
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3. Cash Ratio:
Year 2011 2010 2009 2008 2007
Cash Ratio 0.0793 0.1167 0.1111 0.0586 0.0547
Cash Ratio in % 7.93% 11.67% 11.11% 5.86% 5.47%
Analysis: In this ratio, we can analysis that the cash ratio has only increased in 2010 which is
higher than from 2007, 2008, 2009 and 2011. The cash ratio on 2010 is 7.93%. And on 2007 is
poorest ratio than other years.
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4. Net Working Capital-Total Asset:
Year 2011 2010 2009 2008 2007
Net Working Capital-Total Asset
0.121 0.154 0.089 0.072 0.107
Net Working Capital-Total Asset in %
12.11% 15.37% 8.86% 7.17% 10.75%
Analysis: In this ratio, we can analysis that the net working capital-total assets ratio in 2010 is
better than other years to compare from 2007 to 2011. The net working capital- total assets of
2010 is 15.37%.
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Long Term Solvency Ratio or Debt Management Ratios
1. Total Debt Ratio:
Year 2011 2010 2009 2008 2007
Total Debt Ratio 0.2893736 0.228679 0.2473935 0.3374040 0.3007247
Total Debt Ratio in % 28.94% 22.87% 24.74% 33.74% 30.07%
Analysis: In this ratio, we can analysis that the total debt ratio has biggest on 2008 which is
33.74%. But In 2007 to 2011 total debt ratio are mixed combination.
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2. Debt Equity Ratio:
Year 2011 2010 2009 2008 2007
Debt Equity Ratio 0.407 0.296 0.329 0.509 0.430
Debt Equity Ratio in %
40.72% 29.65% 32.87% 50.92% 43.01%
Analysis: In this ratio, we can analysis that the debt equity ratio has increased in 2008 and more
than from 2007 to 2011. The lowest total debt equity ratio on 2010 is 29.65%. The total debt
equity ratio on 2008 is 50.92%.
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3. Equity Multiplier:
Year 2011 2010 2009 2008 2007
Equity Multiplier 1.407 1.296 1.329 1.509 1.430
Analysis: In this ratio, we can analysis that the equity multiplier has increased in 2008 more than
other years. Equity Multiplier on 2008 is 1.51 times.
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Asset Management or Turnover Ratio
1. Inventory Turnover:
Year 2011 2010 2009 2008 2007
Inventory Turnover 3.031 2.973 2.703 2.396 2.764
Analysis: In this ratio, we show that the inventory turnover separately on 2007 is 2.764, on 2008
is 2.396, on 2009 is 2.703, on 2010 is 2.973 and on 2011 is 3.030.We can see that 2011 is biggest
turnover inventory than other years. So that inventory turnover on 2011 takes 3.03 times.
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2. Days Sales in Inventory:
Year 2011 2010 2009 2008 2007
Days Sales in Inventory 118.775 121.096 133.194 150.250 130.236
Analysis: In this ratio, we see that the ratio of day’s sales in inventory has constantly decreased
from 2008 to 2011. In the year of 2008 is the best day’s sale in inventory.
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3. Receivable Turnover:
Year 2011 2010 2009 2008 2007
Receivable Turnover
17.440 22.553 20.564 22.923 23.232
Analysis: In this ratio, we can analysis that the ratio of receivable turnover has increased in 2007
which compare in more than from 2007 to 2011. On 2007, receivable turnover of Square
pharmaceuticals ltd. takes 23.232 times.
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4. Days in Receivable:
Year 2011 2010 2009 2008 2007
Days in Receivable
20.642 15.962 17.506 15.705 15.496
Analysis: In this ratio, we show that the result of days in receivable for Square pharmaceuticals
ltd has increased in 2011 which compare in more than from 2007 to 2011. On 2011, Days in
receivable of Square pharmaceuticals ltd. takes 20.64 days.
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5. Fixed Asset Turnover:
Year 2011 2010 2009 2008 2007
Fixed Asset Turnover 1.084 1.0770 1.031] 0.996 1.102
Analysis: In this ratio, we see that the result of fixed assets turnover for Square pharmaceuticals
ltd has increased in 2007 which compare in more than from 2007 to 2011. On 2007, the fixed
assets turnover of Square pharmaceuticals ltd. takes 1.10 times
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6. Total Asset Turnover:
Year 2011 2010 2009 2008 2007
Total Asset Turnover 0.693 0.754 0.736 0.650 0.715
Analysis: In this ratio, we show that the result of total assets turnover for Square
pharmaceuticals ltd has only increased in 2010 which compare in more than from 2007 to 2011.
On 2010, the total assets turnover of Square pharmaceuticals ltd. takes 0.754 times.
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Profitability Ratio 1. Profit margin:
Year 2011 2010 2009 2008 2007
Profit margin 0.188 0.182 0.192 0.167 0.174
Analysis: In this ratio, we can see that 2009 is biggest profit margin more than other years. In the
year of 2009 is 0.192%.
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2. Return on assets (ROA):
Year 2011 2010 2009 2008 2007
Return on assets (ROA) 0.130 0.137 0.142 0.105 0.124
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Analysis: In this ratio, we can analysis that the return on assets ratio of Square pharmaceuticals
ltd. separately on 2011 is 0.130%, on 2010 is 0.137%, on 2009 is 0.142%, on 2008 is 0.105%
and on 2007 is 0.124%. So we see that 2009 is biggest ROA more than other years. In 2009 ROA
is 0.142%.
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3. Return on equity (ROE):
Year 2011 2010 2009 2008 2007
Return on equity 0.183 0.178 0.188 0.164 0.178
Return on Equity in % 18.32% 17.81% 18.82% 16.42% 17.77%
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Analysis: In this ratio, we can analysis that the return on equity ratio of Square pharmaceuticals
ltd. separately on 2011 is 18.32%, on 2010 is 17.81%, on 2009 is 18.82%, on 2008 is 16.42%
and on 2007 is 17.77%. We can see that 2009 is biggest return on equity more than other years.
The return on equity of Square pharmaceuticals ltd on 2009 is better.
Page 51 of 166
Market value Ratio 1. Earnings per Share(EPS):
Year 2011 2010 2009 2008 2007
Earnings per Share(EPS)
Tk 129.07 Tk 106.43 Tk 156.56 Tk 114.47 Tk
145.74
Analysis: In this ratio, we can analysis that the earning per share of Square pharmaceuticals ltd.
separately on 2011 is tk 129.07, on 2010 is tk 106.43, on 2009 is tk 156.56, on 2008 is tk 114.47,
on 2007 is tk 145.74. But in 2009 is the higher price of per share at tk 156.56.
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2. Book Value Per Share:
Year 2011 2010 2009 2008 2007
Book Value Per Share Tk
704.36
Tk
597.50
Tk 512.030 Tk 429.060 Tk 373.814
Analysis: In this ratio, we can analysis that the book value per share of Square pharmaceuticals
ltd. separately on 2011 is tk 704.360, on 2010 is tk 597.497, on 2009 is tk 512.030, on 2008 is tk
429.060, on 2007 is tk 373.814. But in 2011 is the higher price of per share at tk 704.360.
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3. Payout Ratio:
Year 2011 2010 2009 2008 2007
Payout Ratio 0.209 0.231 0.189 0.216 0.286
Payout Ratio in % 20.86% 23.13% 18.93% 21.57% 28.59%
Analysis: In this ratio, we can analysis that the payout ratio of Square pharmaceuticals ltd.
separately on 2011 is 20.86%, on 2010 is 23.13%, on 2009 is 18.93%, on 2008 is 21.57%, and on
2007 is 28.59%. But in 2007 is the higher than other years.
Page 54 of 166
6.2 Ibn Sina Pharmaceutical Ltd
Ratio Analysis:
S
N
Ratio Name Formula 2011 2010 2009 2008 2007
Short-Term Solvency or Liquidity Ratio
01 Current Ratio Current Asset/Current
Liabilities
1.031 0.946 0.730 0.832 0.694
02 Quick Ratio Quick Asset/ Current
Liabilities
0.740 0.687
0.528
0.605
0.423
03 Cash Ratio Cash/ Current Liabilities 0.353 0.308 0.248 0.306 0.158
04 Net Working
Capital-Total
Asset
Net Working Capital/
Total Asset
0.013 -0.022 -0.138
-0.087 -0.178
Long Term Solvency Ratio or Debt Management Ratios
01 Total Debt
Ratio
Total Debt/ Total Asset 0.526 0.570 0.643 0.633 0.617
02 Debt Equity
Ratio
Total Debt / Total Equity 1.110 1.328 1.804 1.722 1.355
03 Equity
Multiplier
Total Asset / Total Equity 2.110 2.328 2.804 2.722 2.198
Asset Management or Turnover Ratio
01 Inventory
Turnover
Cost of Goods Sold /
Inventory
12.897 14.840 12.622 10.874 8.653
02 Days Sales in
Inventory
360/ Inventory Turnover 27.96
Days
24.26
Days
28.52
Days
33.11
Days
41.61
Days
03 Receivable
Turnover
Net Sales/ Accounts
Receivable
1087.76 1146.5
5
1478.60 1760.4
9
4468.04
04 Days in 360/ Receivable Turnover 0.33 0.31 0.24 0.20 0.08
Page 55 of 166
Receivable Days Days Days Days Days
05 Fixed Asset
Turnover
Net Sales/ Net Fixed
Assets
4.400 4.192 3.371 3.585 3.574
06 Total Asset
Turnover
Net Sales/ Total Assets 2.530 2.566 2.115 2.049 2.132
Profitability Ratio
01 Profit margin Net Income/ Net Sales 0.040 0.037 0.039 0.041 0.035
02 Return on
assets (ROA)
Net Income/ Total Assets 0.102 0.096 0.082 0.084 0.076
03 Return on
equity (ROE)
Net income/ Total equity 0.215 0.224 0.229 0.229 0.166
Market value Ratio
01 Earnings per
Share(EPS)
Net Income/ No. of Share
Outstanding
5.46 4.64 54.7 48.09 31.19
02 Book Value
Per Share
Total equity / No. of
Share Outstanding
25.34 20.76 239.33 209.62 187.76
03 Payout Ratio Dividends Paid / Net
Income
0.140 0.120 0.461 0.463 0.550
Page 56 of 166
Time Series Analysis
Short Term Solvency or Liquidity Ratio
1. Current Ratio:
Year 2011 2010 2009 2008 2007
Current Ratio 1.031 0.946 0.730 0.832 0.694
Analysis: In this ratio, we can analysis that the ratio has increased from 2007 to 2011 few times
in Ibn Sina pharmaceutical company. So Current Ratio of 2011 is better than others years. In
2011, Current Ratio is 1.031. But 2007 current ratio is 0.694 which is lower than previous years.
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2. Quick Ratio:
Year 2011 2010 2009 2008 2007
Quick Ratio 0.740 0.687 0.528 0.605 0.423
Analysis: In this ratio, we can analysis that the ratio respectively on 2011 is 0.74, on 2010 is
0.69, on 2009 is 0.53, on 2008 is 0.60, and on 2007 is 0.42. We can see that quick ratio is
decreasing from 2007 to 2011. In 2011, quick ratio is better than other years.
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3. Cash Ratio:
Year 2011 2010 2009 2008 2007
Cash Ratio 0.353 0.3083 0.2480 0.3064 0.1576
Cash Ratio in % 35.30% 30.83% 24.80% 30.64% 15.76%
Analysis: In this ratio, we can analysis that the cash ratio has increased in 2011 which is higher
than from 2007, 2008, 2010 and 2009. The cash ratio on 2011 is 35.30%. And others on 2007 is
15.76%, 2008 is 30.64%, 2010 is 30.83%.
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4. Net Working Capital-Total Asset:
Year 2011 2010 2009 2008 2007
Net Working Capital-Total Asset 0.0130 -0.0222 -0.1380
-0.0867 -0.1781
Net Working Capital-Total Asset in %
1.30% -2.22% -13.80% -8.67% -17.81%
Analysis: In this ratio, we can analysis that the net working capital-total ratio has decreased from
2011 to 2007 which is respectively1.30%, -2.22%, -13.80%, -8.67%, -17.81%. We can see that
net working capital is constantly decreasing from 2007 to 2011. In 2011, net working capital is
better than other years.
Page 60 of 166
Long Term Solvency Ratio or Debt Management Ratios
1. Total Debt Ratio:
Year 2011 2010 2009 2008 2007
Total Debt Ratio 0.5261 0.5705 0.6434 0.6327 0.6166
Total Debt Ratio in % 52.61 57.05 64.34 63.27 61.66
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Analysis: In this ratio, we can analysis that the total debt ratio on 2009 in 64.34%. Because of it
is higher than other years. From 2007 to 2008, it grows up continuously. From 2010 to 2011 is
decreased on debt ratio. In 2009 on debt ratio is increased which is 64.34%. So that total debt
ratio on 2009 is better.
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2. Debt Equity Ratio:
Year 2011 2010 2009 2008 2007
Debt Equity Ratio 1.1103 1.3280 1.8044 1.7224 1.3552
Debt Equity Ratio in % 111.03 132.80 180.44 172.24 135.52
Analysis: In this ratio, we can analysis that the Debt equity ratio on 2009 (180.44%) is more
than from 2007 to 2011. The lowest total debt equity ratio on 2010 is 132.80%. The total debt
equity ratio on 2009 is 180.44%.
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3. Equity Multiplier:
Year 2011 2010 2009 2008 2007
Equity Multiplier 2.110 2.328 2.804 2.722 2.198
Analysis: In this ratio, we can analysis that the equity multiplier has increased in 2009
more than from 2007 to 2010. Equity Multiplier on 2009 is 2.804 times.
Page 64 of 166
Asset Management or Turnover Ratio
1. Inventory Turnover:
Year 2011 2010 2009 2008 2007
Inventory Turnover 12.897 14.840 12.622 10.874 8.653
Analysis: In this ratio, we can analysis that the ratio separately on 2007 is 1.96, on 2008 is
1.59, on 2009 is 1.69, on 2010 is 1.84 and on 2011 is 1.95. We can see that 2010 is biggest
turnover inventory than other years. So that inventory turnover on 2010 is 14.840 times.
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2. Days Sales in Inventory:
Year 2011 2010 2009 2008 2007
Days Sales in Inventory 27.96 Days 24.26 Days 28.52 Days 33.11 days 41.61days
Analysis: In this ratio, we can analysis that the ratio has decreased from 2007 to 2011. So that on
2007, sales in inventory of Ibn Sina pharmaceuticals ltd is 41.61 days.
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3. Receivable Turnover:
Year 2011 2010 2009 2008 2007
Receivable Turnover 1087.76 1146.55 1478.60 1760.49 4468.04
Analysis: In this ratio, we can analysis that the receivable turnover it has decreased in 2011 more
than from 2007 to 2010. Equity Multiplier on 2011 is 1087.76 times.
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4. Days in Receivable:
Year 2011 2010 2009 2008 2007
Days in Receivable 0.33 Days 0.31 Days 0.24 Days 0.20 Days 0.08 Days
Analysis: In this analysis, we can view that in 2011 the days in receivable were .33 days which
is higher last five years.
Page 68 of 166
5. Fixed Asset Turnover:
Year 2011 2010 2009 2008 2007
Fixed Asset Turnover 4.40 4.19 3.37 3.59 3.57
Analysis: in this ratio, we see that the Fixed assets turnover is 3.57 at the end of year 2007 which
is higher between the 2009. So the fixed asset turnover at the end of year 2011 is standard
position. Fixed assets turnoverin 2011 is 4.40 times.
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6. Total Asset Turnover:
Year 2011 2010 2009 2008 2007
Total Asset Turnover 2.53 2.57 2.12 2.05 2.13
Analysis: In this ratio, we show that the total asset turnover is best of 2.56 of 2010 year to
compare with other years.
Page 70 of 166
Profitability Ratio 1. Profit margin:
Year 2011 2010 2009 2008 2007
Profit margin 0.0403 0.0374 0.0385 0.0411 0.0355
Profit margin in % 4.03 % 3.74 % 3.85 % 4.11% 3.55%
Analysis: In this analysis we see that the profit margin has decreased in 2009 to 2011 compare
than 2008 year. As a result this company is standard position in 2008 year.
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2. Return on assets (ROA):
Year 2011 2010 2009 2008 2007
Return on assets (ROA) 0.1021 0.0960 0.0815 0.0843 0.0756
Return on assets (ROA) in %
10.21% 9.60% 8.15% 8.43% 7.56%
Analysis: From 2007 year to 2011 year data we see that net income and total asset has increased
in 2007 to 2011. For this reason return on total asset ratio has increase in 2011. Return on assets
(ROA) in 2011 is 10.21%.
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3. Return on equity (ROE):
Year 2011 2010 2009 2008 2007
Return on equity (ROE) 0.2154 0.2235 0.2286 0.2294 0.1661
Return on equity (ROE) in %
21.54% 22.35% 22.86% 22.94% 16.61%
Analysis: In this analysis, we see that the return on equity has 21.54% in the year 2011, 22.35%
in the year 2010, 22.86% in the year 2009, 22.94% in the year 2008 and 16.61% in the 2007. So
we view that the return on equity is 22.94% in the year of 2008 is the best than others.
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Market value Ratio 1. Earnings per Share(EPS):
Year 2011 2010 2009 2008 2007
Earnings per Share(EPS) 5.46 4.64 54.7 48.09 31.19
Analysis: In this ratio, we can show that earning per share ratio has decreased few times from
2009 to 2011years but best in year 2009. Because of in 2009 year the net income has increased at
a fewer rate than from other years.
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2. Book Value per Share:
Year 2011 2010 2009 2008 2007
Book Value Per Share 25.34 20.76 239.33 209.62 187.76
Analysis: In this ratio, we see that the Book Value per Share has increased in the 2009 year
which is so healthy position for the company. Here the book value per share is Tk.239.33.
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3. Payout Ratio:
Year 2011 2010 2009 2008 2007
Payout Ratio 0.1399 0.1201 0.4613 0.4626 0.5502
Payout Ratio in % 13.99% 12.01% 46.13% 46.26% 55.02%
Analysis: In this ratio, we can analysis that the payout ratio has decreased constantly from
2007 to 2011 years. The payout Ratio of 2007 is better than others years. In 2007, payout
Ratio is 55.02% But the year of 2011 payout ratio is 13.99%% which is lower than previous
years.
Page 76 of 166
6.3 Ambee Pharmaceuticals Ltd
Ratio Analysis
SN Ratio Name Formula 2011 2010 2009 2008 2007
Short-Term Solvency or Liquidity Ratio
01 Current Ratio Current Asset/Current Liabilities 1.022 1.002 0.999 0.985 0.996
02 Quick Ratio Quick Asset/ Current Liabilities 0.481 0.489 0.427 0.373 0.536
03 Cash Ratio Cash/ Current Liabilities 0.009 0.009 0.027 0.023 0.002
04 Net Working
Capital-Total
Asset
Net Working Capital/ Total
Asset
0.807 0.805 4.113 0.783 0.794
Long Term Solvency Ratio or Debt Management Ratios
01 Total Debt Ratio Total Debt/ Total Asset 0.790 0.798 4.117 0.834 0.833
02 Debt Equity Ratio Total Debt / Total Equity 4.427 4.685 4.902 5.009 4.985
03 Equity Multiplier Total Asset / Total Equity 5.604 5.869 1.191 6.009 5.985
Asset Management or Turnover Ratio
01 Inventory
Turnover
Cost of Goods Sold / Inventory 1.031 1.064 0.858 0.757 1.858
02 Days Sales in
Inventory
360/ Inventory Turnover 349.13
6
338.36
0
419.73
0
475.45
2
193.80
4
03 Receivable
Turnover
Net Sales/ Accounts Receivable 5.854 6.021 7.172 6.301 3.932
04 Days in Receivable 360/ Receivable Turnover 64.446 64.478 64.510 57.133 91.555
05 Fixed Asset
Turnover
Net Sales/ Net Fixed Assets 4.985 4.676 4.478 3.965 5.865
06 Total Asset
Turnover
Net Sales/ Total Assets 0.961 0.937 4.494 0.861 1.208
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Profitability Ratio
01 Profit margin Net Income/ Net Sales 0.028 0.027 0.027 0.026 0.022
02 ROA Net Income/ Total Assets 0.027 0.026 0.122 0.022 0.027
03 ROE Net income/ Total equity 0.151 0.151 0.145 0.135 0.160
Market value Ratio
01 EPS NIAT/ No. of Share 3.81 3.68 3.44 3.17 3.78
02 Book Value Per
Share
Total equity / No. of Share
25 tk 24 tk 23 tk 23 tk 24 tk
03 Payout Ratio Dividends Paid / NIAT 1.211 0.275 0.823 1.508 0.532
Page 78 of 166
Time Series Analysis
Short-Term Solvency or Liquidity Ratio
1. Current Ratio:
Year 2011 2010 2009 2008 2007 Current Ratio 1.022 1.002 0.999 0.985 0.996
Analysis: In this ratio, we can analysis that the ratio has increased from 2007 to 2011 few times
in Ambee pharmaceutical company. So Current Ratio of 2011 is better than others years. In
2011, Current Ratio is 1.022. But 2007 current ratio is 0.986 which is lower than previous years.
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2. Quick Ratio:
Year 2011 2010 2009 2008 2007
Quick Ratio 0.481 0.489 0.427 0.373 0.536
Analysis: In this ratio, we can analysis that the Quick ratio respectively on 2011 is 0.481, on
2010 is 0.489, on 2009 is 0.427, on 2008 is 0.373, and on 2007 is 0.536. We can see that quick
ratio is increasing from 2008 to 2010. But in 2007, quick ratio is better than other years.
Page 80 of 166
3. Cash Ratio:
Year 2011 2010 2009 2008 2007 Cash Ratio 0.009 0.009 0.026 0.023 0.001
Cash Ratio in % 0.90% 0.90% 2.60% 2.30% 0.10%
Page 81 of 166
Page 82 of 166
Analysis: In this ratio, we can analysis that the cash ratio has only increased in 2009 which is
higher than from 2007, 2008, 2010 and 2011. The cash ratio on 2009 is 2.60%. And on 2007 is
poorest ratio than other years.
Page 83 of 166
4. Net Working Capital-Total Asset:
Year 2011 2010 2009 2008 2007
Net Working Capital-Total Asset 0.017 0.001 -0.004 -0.012 -0.003
Net Working Capital-Total Asset in %
1.73% 0.13%
-
0.36%
-
1.22%
-
0.35%
Analysis: In this ratio, we can analysis that the net working capital-total assets ratio from 2007
to 2011 is respectively -0.35%, -1.22%, -0.36%, 0.13%, and 1.73%. We can see that the net
working capital is constantly decreasing from 2011 to 2007. In 2011, net working capital is
better than other years. So that the net working capital- total assets of 2011 is 1.73%.
Page 84 of 166
Long-Term Solvency Ratio
1. Total Debt Ratio:
Year 2011 2010 2009 2008 2007
Total Debt Ratio 0.790 0.798 4.117 0.834 0.833
Total Debt Ratio in % 79% 79.80% 411.70% 83.40% 83.30%
Analysis: In this ratio, we can analysis that the total debt ratio has biggest on 2009 411.70%.
But In 2011 and 2010, it’s same rate which in 79% and lowest than in 2009. At 2008 and 2007
are also same rate which in 83% and lowest than in 2009. So that total debt ratio on 2009 is
better.
Page 85 of 166
2. Debt Equity Ratio:
Year 2011 2010 2009 2008 2007
Debt Equity Ratio 4.427 47.692 4.902 5.009 4.985
Debt Equity Ratio in %
442.70% 476.92% 490.20% 500.90% 498.50%
Page 86 of 166
Analysis: In this ratio, we can analysis that the debt equity ratio has increased in 2008 and more
than from 2007 to 2011. The lowest total debt equity ratio on 2011 is 442.72%. The total debt
equity ratio on 2008 is 500.90%.
Page 87 of 166
3. Equity Multiplier:
Year 2011 2010 2009 2008 2007
Equity Multiplier 5.604 5.870 1.191 6.009 5.985
Analysis: In this ratio, we can analysis that the equity multiplier has increased in 2008 more than
other years. Equity Multiplier on 2008 is 6.01 times.
Page 88 of 166
Asset Management or Turnover Ratio 1. Inventory Turnover:
Year 2011 2010 2009 2008 2007
Inventory Turnover 1.031 1.064 0.858 0.757 1.858
Analysis: In this ratio, we can analysis that the inventory turnover separately on 2007 is 1.031,
on 2008 is 1.064, on 2009 is 0.858, on 2010 is 0.757 and on 2011 is 1.858. We can see that 2007
is biggest turnover inventory than other years. So that inventory turnover on 2007 takes 1.858
times.
Page 89 of 166
2. Days Sales in Inventory:
Year 2011 2010 2009 2008 2007
Days Sales in Inventory 349.136 338.360 419.730 475.452 193.804
Analysis: In this ratio, we can analysis that the ratio of day’s sales in inventory has increased
475.45 days on 2008 which has compared from 2007 to 2011. Because of this time is increased
on inventory turnover. So that on 2008, sales in inventory of Ambee pharmaceuticals ltd is
475.45 days.
Page 90 of 166
3. Receivable Turnover:
Year 2011 2010 2009 2008 2007
Receivable Turnover 5.854 6.021 7.172 6.301 3.932
Analysis: In this ratio, we can analysis that the ratio of receivable turnover has increased in 2009
which compare in more than from 2007 to 2011. On 2009, the receivable turnover of Ambee
pharmaceuticals ltd. takes 7.172 times.
Page 91 of 166
4. Days in Receivable:
Year 2011 2010 2009 2008 2007
Days in Receivable 61.498 59.791 50.198 57.133 91.555
Analysis: In this ratio, we can analysis that the result of days in receivable for Ambee
Pharmaceuticals ltd has increased in 2007 which compare in more than from 2007 to 2011. On
2007, Days in receivable of Ambee pharmaceuticals ltd. takes 91.56 days.
Page 92 of 166
5. Fixed Asset Turnover:
Year 2011 2010 2009 2008 2007
Fixed Asset Turnover 4.985 4.676 4.478 3.965 5.865
Analysis: In this ratio, we can analysis that the result of fixed assets turnover for Ambee
Pharmaceuticals ltd has increased in 2007 which compare in more than from 2007 to 2011. On
2007, the fixed assets turnover of Ambee pharmaceuticals ltd. takes 5.865 times.
Page 93 of 166
6. Total Asset Turnover:
Year 2011 2010 2009 2008 2007
Total Asset Turnover 0.961 0.937 4.494 0.861 1.208
Analysis: In this ratio, we can analysis that the result of total assets turnover for Ambee
Pharmaceuticals ltd has only increased in 2009 which compare in more than from 2007 to 2011.
On 2009, the total assets turnover of Ambee pharmaceuticals ltd. takes 4.494 times.
Page 94 of 166
Profitability Ratio 1. Profit margin:
Year 2011 2010 2009 2008 2007
Profit margin 0.028 0.027 0.027 0.026 0.022
Profit margin in % 2.81% 2.70% 2.70% 2.60% 2.20%
Analysis: In this ratio, we can analysis that the profit margin ratio of Ambee Pharmaceuticals
Ltd. separately on 2011 is 2.81%, on 2010 is 2.70%, on 2009 is 2.70%, on 2008 is 2.60% and on
2007 is 2.20%. We can see that 2011 is biggest profit margin more than other years. So that the
profit margin of Ambee Pharmaceuticals ltd. on 2011 is better.
Page 95 of 166
2. Return on assets (ROA):
Year 2011 2010 2009 2008 2007
Return on assets (ROA): 0.027 0.026 0.122 0.022 0.027
ROA in % 2.70% 2.57% 12.20% 2.20% 2.70%
Analysis: In this ratio, we can analysis that the return on assets ratio of Ambee Pharmaceuticals
Ltd. separately on 2011 is 2.70%, on 2010 is 2.57%, on 2009 is 12.20%, on 2008 is 2.20% and
on 2007 is 2.70%. We can analysis that 2009 is biggest ROA more than other years. In 2009 of
Ambee Pharmaceuticals Ltd on ROA is 12.20%.
Page 96 of 166
3. Return on equity (ROE):
Year 2011 2010 2009 2008 2007
Return on equity (ROE) 0.151 1.537 0.145
0.135 0.160
ROE in % 15.10% 15.37% 14.50% 13.50% 16%
Analysis: In this ratio, we can analysis that the return on equity ratio of Ambee Pharmaceuticals
Ltd. separately on 2011 is 15.10%, on 2010 is 15.37%, on 2009 is 14.50%, on 2008 is 13.50%
and on 2007 is 16%. We can see that 2007 is biggest return on equity more than other years. So
that the return on equity of Ambee Pharmaceuticals ltd. On 2007 is better.
Page 97 of 166
Market value Ratio
1. Earnings per Share(EPS):
Year 2011 2010 2009 2008 2007
Earnings per Share(EPS) Tk 3.81 Tk 3.68 Tk 3.45 Tk 3.15 Tk 3.78
Analysis: In this ratio, we can analysis that the earning per share of Ambee Pharmaceuticals Ltd.
separately on 2011 is tk 3.81, on 2010 is tk 3.68, on 2009 is tk 3.45, on 2008 is tk 3.15, on 2007
is tk 3.78. But in 2011 is the higher price of per share at tk 3.81.
Page 98 of 166
2. Book Value per Share:
Year 2011 2010 2009 2008 2007
Book Value per Share
Tk 25.20 Tk 24.40 Tk 23.71 Tk 23.25 Tk 24
Analysis: In this ratio, we can analysis that the book value per share of Ambee Pharmaceuticals
Ltd. separately on 2011 is tk 25.20, on 2010 is tk 24.40, on 2009 is tk 23.71, on 2008 is tk 23.25,
on 2007 is tk 24. But in 2011 is the higher price of per share at tk 25.20.
Page 99 of 166
3. Payout Ratio:
Year 2011 2010 2009 2008 2007
Payout Ratio 1.216 0.275 0.823 1.508 0.532
Payout Ratio in % 121.60% 27.50% 82.30% 150.80% 53.20%
Analysis: In this ratio, we can analysis that the payout ratio of Ambee Pharmaceuticals Ltd.
separately on 2011 is 121.60%, on 2010 is 27.50%, on 2009 is tk 82.30%, on 2008 is 150.80%,
and on 2007 is 53.20%. But in 2008 is the higher percentage of payout ratio at 150.80%.
Page 100 of 166
6.4 Beximco Pharmaceutical Ltd
Ratio Analysis
SN Ratio Name Formula 2011 2010 2009 2008 2007
Short-Term Solvency or Liquidity Ratio
01 Current Ratio Current
Asset/Current
Liabilities
2.69940 2.46370 2.97948 1.09986 1.79596
02 Quick Ratio Quick Asset/ Current
Liabilities
1.83395 1.67433
2.23730
0.52136
0.89290
03 Cash Ratio Cash/ Current
Liabilities
0.19589 0.58549 0.45593 0.02830 0.05264
04 Net Working
Capital-Total
Asset
Net Working Capital/
Total Asset 0.62955 0.59411 0.66437 0.09080 0.44319
Long Term Solvency Ratio or Debt Management Ratios
01 Total Debt
Ratio
Total Debt/ Total
Asset 0.25638 0.25258 0.45276 0.29484 0.30974
02 Debt Equity
Ratio
Total Debt / Total
Equity 0.34475 0.33794 0.827344 0.41812 0.44873
03 Equity
Multiplier
Total Asset / Total
Equity 1.34476 1.33794 1.82734 1.41812 1.44873
Asset Management or Turnover Ratio
01 Inventory
Turnover
Cost of Goods Sold /
Inventory 1.79057 1.67236 1.48942 1.33056 1.33830
02 Days Sales in
Inventory
360/ Inventory
Turnover 201.05
Days
215.26
Days
241.70
Days
270.56
Days 269 Days
03 Receivable
Turnover
Net Sales/ Accounts
Receivable 8.06588 7.90260 7.01365 7.95800 7.19865
04 Days in
Receivable
360/ Receivable
Turnover 44.63
Days
45.55
Days
51.33
Days
45.24
Days
50.01
Days
05 Fixed Asset
Turnover
Net Sales/ Net Fixed
Assets 0.49671 0.42757 0.37520 0.33536 0.39836
06 Total Asset
Turnover
Net Sales/ Total
Assets 0.34256 0.30370 0.24474 0.27060 0.30092
Page 101 of 166
Profitability Ratio
01 Profit margin Net Income/ Net
Sales 0.15190 0.16202 0.12833 0.13599 0.09816
02 Return on
assets (ROA)
Net Income/ Total
Assets 0.05203 0.04921 0.03140 0.03680 0.02954
03 Return on
equity (ROE)
Net income/ Total
equity 0.06997 0.06583 0.057391 0.05218 0.04279
Market value Ratio
01 Earnings per
Share(EPS)
Net Income/ No. of
Share Outstanding 4.76 4.18 4.13 3.61 2.80
02 Book Value Per
Share
Total equity / No. of
Share Outstanding 68.03 63.45 72.02 69.14 65.50
03 Payout Ratio Dividends Paid / Net
Income 0.00114 0.00143 0.00276 0.00581 0.00930
Page 102 of 166
Time Series Analysis
Short Term Solvency or Liquidity Ratio
1. Current Ratio:
Year 2011 2010 2009 2008 2007
Current Ratio 2.699 2.464 2.979 1.100 1.796
Analysis: In this ratio, we can analysis that the ratio has increased only 2009 with compared
from 2011 to 2007. So Current Ratio of 2009 is better than others years. In 2009, Current Ratio
is 2.979. But 2008 current ratio is 1.100 which is lower than previous years.
Page 103 of 166
2. Quick Ratio:
Year 2011 2010 2009 2008 2007 Quick Ratio 1.83395 1.67433 2.23730 0.52136 0.89290
Analysis: In this ratio, we can analysis that the Quick ratio respectively on 2011 is 1.83, on 2010
is 1.67, on 2009 is 2.24, on 2008 is 0.52, and on 2007 is 0.89. We can see that quick ratio is
either increased or decreased from 2007 to 2011. But in 2008, quick ratio is better than other
years.
Page 104 of 166
3. Cash Ratio:
Year 2011 2010 2009 2008 2007
Cash Ratio 0.19589 0.58549 0.45593 0.02830 0.05264
Cash Ratio in % 19.59% 58.55% 45.59% 2.83% 5.26%
Analysis: In this ratio, we can analysis that the cash ratio has only increased in 2010 which is
higher than from 2007, 2008, 2009 and 2011. The cash ratio on 2010 is 58.55%. And on 2008 is
poorest ratio than other years.
Page 105 of 166
4. Net Working Capital-Total Asset:
Year 2011 2010 2009 2008 2007
Net Working Capital-Total Asset
0.62955 0.59411 0.66437 0.09080 0.44319
Net Working Capital-Total Asset in %
62.95% 59.41% 66.44% 9.08% 44.32%
Analysis: In this ratio, we can analysis that the net working capital-total assets ratio from 2007
to 2011 is respectively 44.32%, 9.08%, 66.44%, 59.41%, 62.95%. We can see that the net
working capital is constantly either increasing or decreasing from 2011 to 2007. In 2009, net
working capital is better than other years. So that the net working capital- total assets of 2009 is
66.44%.
Page 106 of 166
Long Term Solvency Ratio or Debt Management Ratios
5. Total Debt Ratio:
Year 2011 2010 2009 2008 2007
Total Debt Ratio 0.25638 0.25258 0.45276 0.29484 0.30974
Total Debt Ratio in % 25.64% 25.26% 45.28% 29.48% 30.97%
Analysis: In this ratio, we can analysis that the total debt ratio has biggest on 2009 45.28%. But
In 2011 and 2010, it’s nearly same rate which in 25% and lowest than in 2009. So that total debt
ratio on 2009 is better.
Page 107 of 166
6. Debt Equity Ratio:
Year 2011 2010 2009 2008 2007
Debt Equity Ratio 0.34475 0.33794 0.827344 0.41812 0.44873
Debt Equity Ratio in % 34.48% 33.79% 82.73% 41.81% 44.87%
Analysis: In this ratio, we can analysis that the debt equity ratio has increased in 2009 and more
than from 2007 to 2011. The lowest total debt equity ratio on 2010 is 33.79%. The total debt
equity ratio on 2009 is 82.73%.
Page 108 of 166
7. Equity Multiplier:
Year 2011 2010 2009 2008 2007
Equity Multiplier 1.34476 1.33794 1.82734 1.41812 1.44873
Analysis: In this ratio, we can analysis that the equity multiplier has increased in 2009 more than
other years. Equity Multiplier on 2009 is 1.83 times.
Page 109 of 166
Asset Management or Turnover Ratio 1. Inventory Turnover:
Year 2011 2010 2009 2008 2007
Inventory Turnover 1.79057 1.67236 1.48942 1.33056 1.33830
Analysis: In this ratio, we can analysis that the inventory turnover separately from 2007 to 2011
on 1.79, 1.67, 1.49, 1.33, 1.34. We can see that 2011 is biggest turnover inventory than other
years. So that inventory turnover on 2011 takes 1.79 times.
Page 110 of 166
2. Days Sales in Inventory:
Year 2011 2010 2009 2008 2007
Days Sales in Inventory 201.05
Days 215.26 Days 241.70 Days 270.56 Days 269 Days
Analysis: In this ratio, we can analysis that the ratio of day’s sales in inventory has decreased
from 2007 to 2011. Because of this time is decreased on inventory turnover. So that on 2007,
sales in inventory of Beximco pharmaceuticals ltd is 269 days.
Page 111 of 166
3. Receivable Turnover:
Year 2011 2010 2009 2008 2007
Receivable Turnover 8.06588 7.90260 7.01365 7.95800 7.19865
Analysis: In this ratio, we can analysis that the ratio of receivable turnover has increased in 2011
which compare in more than from 2007 to 2011. On 2011, receivable turnover of Beximco
pharmaceuticals ltd. takes 8.065 times.
Page 112 of 166
4. Days in Receivable:
Year 2011 2010 2009 2008 2007
Days in Receivable 44.63 Days 45.55 Days 51.33 Days 45.24 Days 50.01 Days
Analysis: In this ratio, we can analysis that the result of days in receivable for Beximco
Pharmaceuticals ltd has increased in 2009 which compare in more than from 2007 to 2011. On
2009, Days in receivable of Beximco pharmaceuticals ltd. takes 51.33 days.
Page 113 of 166
5. Fixed Asset Turnover:
Year 2011 2010 2009 2008 2007
Fixed Asset Turnover 0.49671 0.42757 0.37520 0.33536 0.39836
Analysis: In this ratio, we can analysis that the result of fixed assets turnover for Beximco
Pharmaceuticals ltd has increased in 2011 which compare in more than from 2007 to 2011. On
2011, the fixed assets turnover of Beximco pharmaceuticals ltd. takes 0.50 times.
Page 114 of 166
6. Total Asset Turnover:
Year 2011 2010 2009 2008 2007
Total Asset Turnover 0.34256 0.30370 0.24474 0.27060 0.30092
Analysis: In this ratio, we can analysis that the result of total assets turnover for Beximco
Pharmaceuticals ltd has only increased in 2011 which compare in more than from 2007 to 2011.
On 2011, the total assets turnover of Beximco pharmaceuticals ltd. takes 0.34 times.
Page 115 of 166
Profitability Ratio 1. Profit margin:
Year 2011 2010 2009 2008 2007
Profit margin 0.15190 0.16202 0.12833 0.13599 0.09816
Profit margin in % 15.19% 16.20% 12.83% 13.60% 9.82%
Page 116 of 166
Analysis: In this ratio, we can analysis that the profit margin ratio of Beximco Pharmaceuticals
Ltd. separately on 2011 is 15.19%, on 2010 is 16.20%, on 2009 is 12.83%, on 2008 is 13.60%
and on 2007 is 9.82%. We can see that 2010 is biggest profit margin more than other years. So
that the profit margin of Beximco Pharmaceuticals ltd. on 2010 is better.
Page 117 of 166
2. Return on assets (ROA):
Year 2011 2010 2009 2008 2007
Return on assets (ROA) 0.05203 0.04921 0.03140 0.03680 0.02954
Return on assets (ROA) in % 5.20% 4.92% 3.14% 3.68% 2.95%
Analysis: In this ratio, we can analysis that the return on assets ratio of Beximco
Pharmaceuticals Ltd. separately on 2011 is 5.20%, on 2010 is 4.92%, on 2009 is 3.14%, on 2008
is 3.68% and on 2007 is 2.95%. We can analysis that 2011 are biggest ROA more than other
years. In 2009 ROA of Beximco Pharmaceuticals Ltd is 5.20%.
Page 118 of 166
3. Return on equity (ROE):
Year 2011 2010 2009 2008 2007
Return on equity (ROE) 0.06997 0.06583 0.057391 0.05218 0.04279
Return on equity (ROE) in % 7% 6.58% 5.74% 5.22% 4.28%
Analysis: In this ratio, we can analysis that the return on equity ratio of Beximco
Pharmaceuticals Ltd. separately on 2011 is 7%, on 2010 is 6.58%, on 2009 is 5.74%, on 2008 is
5.22% and on 2007 is 4.28%. We can see that 2011 is biggest return on equity more than other
years. So that the return on equity of Beximco Pharmaceuticals ltd. On 2011 is better.
Page 119 of 166
Market value Ratio
1. Earnings per Share(EPS):
Year 2011 2010 2009 2008 2007
Earnings per Share(EPS) 4.76 4.18 4.13 3.61 2.80
Analysis: In this ratio, we can analysis that the earning per share of Beximco Pharmaceuticals
Ltd. separately on 2011 is tk 4.76, on 2010 is tk 4.18, on 2009 is tk 4.13, on 2008 is tk 3.61, on
2007 is tk 2.80. But in 2011 is the higher price of per share at tk 4.76.
Page 120 of 166
2. Book Value Per Share:
Year 2011 2010 2009 2008 2007
Book Value Per Share 68.03 63.45 72.02 69.14 65.50
Analysis: In this ratio, we can analysis that the book value per share of Beximco
Pharmaceuticals Ltd. separately on 2011 is tk 68.03, on 2010 is tk 63.45, on 2009 is tk 72.02, on
2008 is tk 69.14, on 2007 is tk 65.51. But in 2009 is the higher price of per share at tk 72.02.
Page 121 of 166
3. Payout Ratio:
Year 2011 2010 2009 2008 2007
Payout Ratio 0.001 0.00143 0.00276 0.00581 0.00930
Payout Ratio in % 0.11% 0.14% 0.28% 0.58% 0.93%
Analysis: In this ratio, we can analysis that the payout ratio of Beximco Pharmaceuticals Ltd.
separately on 2011 is 0.11%, on 2010 is 0.14%, on 2009 is 0.28%, on 2008 is 0.58%, and on
2007 is 0.93%. But in 2011 is the higher percentage of payout ratio at 0.11%.
Page 122 of 166
Page 123 of 166
6.5 Renata Pharmaceutical
Ratio Analysis:
SN Ratio Name Formula 2011 2010 2009 2008 2007
Short-Term Solvency or Liquidity Ratio
01 Current Ratio Current Asset/Current
Liabilities
0.728 1.113 1.165 1.147 1.378
02 Quick Ratio Quick Asset/ Current
Liabilities
0.260 0.416 0.403 0.416 0.455
03 Cash Ratio Cash/ Current Liabilities 0.043 0.0954 0.102 0.094 0.067
04 Net Working
Capital-Total
Asset
Net Working Capital/
Total Asset
-0.120 0.041 0.061 0.061 0.126
Long Term Solvency Ratio or Debt Management Ratios
01 Total Debt Ratio Total Debt/ Total Asset 0.485 0.421 0.427 0.474 0.407
02 Debt Equity
Ratio
Total Debt / Total Equity 0.943 0.727 0.745 0.903 0.687
03 Equity
Multiplier
Total Asset / Total Equity 1.943 1.727 1.745 1.903 1.687
Asset Management or Turnover Ratio
01 Inventory
Turnover
Cost of Goods Sold /
Inventory 1.955 1.845 1.693 1.591 1.962
02 Days Sales in
Inventory
360/ Inventory
Turnover
184.114 195.110 212.64 226.2 183.48
03 Receivable
Turnover
Net Sales/ Accounts
Receivable
10.184 10.411 11.343 8.976 13.014
04 Days in
Receivable
360/ Receivable
Turnover
35.350 34.579 31.736 40.10 27.663
05 Fixed Asset
Turnover
Net Sales/ Net Fixed
Asset
1.247 1.669 1.766 1.866 2.172
Page 124 of 166
06 Total Asset
Turnover
Net Sales/ Total Asset 0.848 0.992 1.0128 0.977 1.176
Profitability Ratio
01 Profit margin Net Income/ Net Sales 0.167 0.167 0.155 0.140 0.133
02 Return on
assets (ROA)
Net Income/ Total
Assets
0.141 0.166 0.158 0.137 0.156
03 Return on equity
(ROE)
Net income/ Total
equity
0.275 0.287 0.273 0.261 0.263
Market value Ratio
01 Earnings per
Share(EPS)
Net Income/ No. of
Share Outstanding
48.14 47.17 417.38 374.44 348.47
02 Book Value Per
Share
Total equity / No. of
Share Outstanding
175.210 164.340 1526.4 1436.8 1325.3
03 Payout Ratio Dividends Paid / Net
Income
0.177 0.180 0.204 0.200 0.201
Page 125 of 166
Time Series Analysis
Short Term Solvency or Liquidity Ratio
1. Current Ratio:
Year 2011 2010 2009 2008 2007
Current Ratio 0.727771592 1.113460696 1.165549711 1.146702594 1.377961259
Analysis: In this ratio, we can analysis that the ratio has decreased from 2007 to 2011 few
times in Renata pharmaceutical company. So Current Ratio of 2007 is better than others
years. In 2007, Current Ratio is 1.38. But 2011 current ratio is 0.73 which is lower than
previous years.
Page 126 of 166
2. Quick Ratio:
Year 2011 2010 2009 2008 2007
Quick Ratio 0.259617349 0.416163336 0.40277019 0.416216966 0.454741223
Analysis: In this ratio, we can analysis that the ratio 2011 to 2007 is respectively 0.26, 0.42,
0.40, 0.42, and 0.45. We can see that quick ratio is decreasing from 2007 to 2011. In 2007, quick
ratio is better than other years.
Page 127 of 166
3. Cash Ratio:
Year 2011 2010 2009 2008 2007
Cash Ratio 0.0417 0.0954 0.1016 0.0937 0.0672
Cash Ratio in % 4.1722 9.5415 10.1614 9.3763 6.7297
Analysis: In this ratio, we can analysis that the ratio has increased in 2009 which is higher than from
2007, 2008, 2010 and 2011. The cash ratio on 2009 is 10.16%. And others on 2007 is 9.37%, 2008 is
6.37%, 2010 is 9.54%, 2007 is 4.17%.
Page 128 of 166
4. Net Working Capital-Total Asset:
Year 2011 2010 2009 2008 2007
Net Working Capital to Total Asset
-0.1198352 0.041330762 0.060596586 0.060931038 0.125765662
Net Working Capital in
% -11.9835197 4.133076193 6.059658622 6.09310383 12.57656618
Analysis: In this ratio, we can analysis that the ratio from 2007 to 2011 is respectively -11.98%,
4.13%, 6.06%, 6.10%, and 12.58%. We can see that net working capital is constantly decreasing
from 2007 to 2011. In 2009, net working capital is better than other years.
Page 129 of 166
Long Term Solvency Ratio
1. Total Debt Ratio:
Year 2011 2010 2009 2008 2007
Total Debt Ratio 0.485333733 0.421023699 0.426884364 0.474398821 0.407141799
Debt Ratio in % 48.53337331 42.1023699 42.68843645 47.43988214 40.71417985
Analysis: In this ratio, we can analysis that the ratio has on 2007 40.71%. In 2008, it grows up
which in 47.44%. At 2009 and 2010 are also decreased on debt ratio. In 2011 on debt ratio is
increased which is 48.53%. So that total debt ratio on 2011 is better.
Page 130 of 166
2. Debt Equity Ratio:
Year 2011 2010 2009 2008 2007
Debt Equity Ratio 0.9430 0.7271 0.7448 0.9026 0.6867
Debt Equity Ratio in % 94.3007 72.7186 74.4848 90.2583 68.6744
Analysis: In this ratio, we can analysis that the ratio has increased in 2011 more than from 2007
to 2010. The lowest total debt equity ratio on 2010 is 72.72%. The total debt equity ratio on
2011 is 94.30%.
Page 131 of 166
3. Equity Multiplier:
Year 2011 2010 2009 2008 2007
Equity Multiplier 1.9430 1.7272 1.7448 1.9026 1.6867
Analysis: In this ratio, we can analysis that the ratio has increased in 2011 more than from 2007
to 2010. Equity Multiplier on 2011 is 1.94 times.
Page 132 of 166
Asset Management or Turnover Ratio
1. Inventory Turnover:
Year 2011 2010 2009 2008 2007
Inventory Turnover
1.955306041 1.845116326 1.692996246 1.591089713 1.962065717
Analysis: In this ratio, we can analysis that the ratio separately on 2007 is 1.96, on 2008 is
1.59, on 2009 is 1.69, on 2010 is 1.84 and on 2011 is 1.95. We can see that 2007 is biggest
turnover inventory than other years. So that inventory turnover on 2007 is 1.96.
Page 133 of 166
2. Days Sales in Inventory:
Year 2011 2010 2009 2008 2007
Days Sales in Inventory
184.11 Days 195.11 Days 212.64 Days 226.26 Days 183.48 Days
Analysis: In this ratio, we can analysis that the ratio has increased 226.26 days on 2008 which
has compared from 2007 to 2011. Because of this time is increased on inventory turnover. So
that on 2008, sales in inventory of Renata pharmaceuticals ltd is 226.26 days.
Page 134 of 166
3. Receivable Turnover:
Year 2011 2010 2009 2008 2007
Receivable Turnover
10.18382879 10.41103627 11.34361371 8.975899678 13.01393024
Analysis: In this ratio, we can analysis that the ratio has increased in 2011 more than from 2007
to 2010. Equity Multiplier on 2011 is 1.94 times.
Page 135 of 166
4. Days in Receivable:
Year 2011 2010 2009 2008 2007
Days in Receivable
35.35 Days 34.58 Days 31.74 Days 40.11 Days 27.66 Days
Analysis: In this analysis, we can view that in 2008 the days in receivable were 40 days which is
higher last five years.
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5. Fixed Asset Turnover:
Year 2011 2010 2009 2008 2007
Fixed Asset Turnover
1.247186773 1.668625113 1.766425725 1.865606437 2.171714578
Analysis: in this ratio, we see that the Fixed assets turnover is 2.1717 at the end of year 2007
which is higher between the 2007 to 2011 years. So the fixed asset turnover at the end of year
2007 is standard position.
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6. Total Asset Turnover:
Year 2011 2010 2009 2008 2007
Total Asset Turnover
0.847630873 0.99182311 1.012817007 0.977077426 1.175954874
Analysis: In this ratio, we show that the total asset turnover is best of 1.1760 of 2007 year to
compare with other years.
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Profitability Ratio
1. Profit margin:
Year 2011 2010 2009 2008 2007
Profit margin 0.166837319 0.167491869 0.154720807 0.14018814 0.132557187
Profit margin in
% 16.68373191 16.74918695 15.47208071 14.01881402 13.25571871
Analysis: In this analysis we see that the profit margin has increased in 2010 compare than 2007 to 2011 year. As a result this company is standard position in 2010 year.
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2. Return on assets (ROA):
Year 2011 2010 2009 2008 2007
Return on assets (ROA)
0.141416462 0.166122307 0.156703865 0.136974667 0.15588127
ROA in % 14.14164624 16.61223068 15.67038648 13.69746673 15.58812702
Analysis: From 2007 year to 2011 year data we see that net income and total asset has increased in
2010. For this reason return on total asset ratio has increase in 2010.
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3. Return on equity (ROE):
Year 2011 2010 2009 2008 2007
Return on equity (ROE)
0.274773133 0.286924191 0.273424515 0.260605708 0.262931793
ROE in % 27.47731327 28.69241911 27.34245153 26.0605708 26.29317934
Analysis: In this analysis, we see that the return on equity has 27.48% in the year 2011, 28.69%
in the year 2010, 27.34% in the year 2009, 26.5% in the year 2008 and 26.29% in the 2007. So we
view that the return on equity is 28.69% in the year of 2010 is the best than others.
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Market value Ratio
1. Earnings per Share(EPS):
Year 2011 2010 2009 2008 2007
Earnings per Share(EPS)
48.14 47.17 417.38 374.44 348.47
Analysis: In this ratio, we can show that earning per share ratio has increased few times from
2007 to 2011years but best in year 2009. Because of in 2009 year the net income has increased
at a fewer rate than from other years.
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2. Book Value per Share:
Year 2011 2010 2009 2008 2007
Book Value per Share
175.2100399 164.3985518 1526.489889 1436.801552 1325.332038
Analysis: In this ratio, we see that the Book Value per Share has increased in the 2009 year
which is so healthy position for the company. Here the book value per share is 1526.49.
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3. Payout Ratio:
Year 2011 2010 2009 2008 2007
Payout Ratio 0.176557297 0.180199579 0.203651956 0.200299519 0.200876178
Payout Ratio in % 17.65572973 18.01995791 20.36519558 20.02995185 20.08761785
Analysis: In this ratio, we can analysis that the payout ratio has decreased constantly from 2007
to 2011 years. The payout Ratio of 2007 is better than others years. In 2007, payout Ratio is
20.09%. But the year of 2011 payout ratio is 17.66% which is lower than previous years.
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7. Coparative Analysis
Short-Term Solvency or Liquidity Ratio
1. Current Ratio
Analysis: In this comparative analysis, we can view that in 2007 to 2011 the current ratios were
1.7960, 1.0999, 2.9795, 2.4637 and 2.6994 times in Beximco pharmaceutical Ltd. It was
constantly increasing the year to year. On the other hand, square, Ambee, Renata and Ibn Sina
pharmaceutical company are less than the current ratio position from Beximco pharmaceutical
Current Ratio
Year 2011 2010 2009 2008 2007
Square 1.5043 2.0539 1.4477 1.2602 1.4410
Ibn Sina 1.0314 0.9460 0.7297 0.8318 0.6938
Ambee 1.0219 1.0017 0.9991 0.9847 0.99568
Beximco 2.6994 2.4637 2.9795 1.0999 1.7960
Renata 0.7278 1.1135 1.1655 1.1467 1.3780
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company. So above the situation we understand that the Beximco pharmaceutical company is
good performing for current ratio.
2. Quick Ratio
Quick Ratio
Year 2011 2010 2009 2008 2007
Square 0.9598 1.0583 0.6530 0.6813 0.8367
Ibn Sina 0.7396 0.6872 0.5279 0.6049 0.4232
Ambee 0.4815 0.4889 0.4273 0.3728 0.5360
Beximco 1.8340 1.6743 2.2373 0.5214 0.8929
Renata 0.2596 0.4162 0.4028 0.4162 0.4547
Analysis: In this analysis, we see that the quick ratio in the year on 2011, 2010, 2009 and 2007
the Beximco pharmaceutical company is better than other companies (Ibn Sina, Ambee, Square
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and Renata pharmaceutical). In the year 2008 as a result square company is standard position.
Instead, we also see that the Beximco company last five years quick ratio is increase than other
company.
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3. Cash Ratio
Cash Ratio
Year 2011 2010 2009 2008 2007
Square 0.0793 0.1167 0.1111 0.0586 0.0547
Ibn Sina 0.3530 0.3083 0.2480 0.3064 0.1576
Ambee 0.0095 0.0090 0.0265 0.0234 0.0017
Beximco 0.1959 0.5855 0.4559 0.0283 0.0526
Renata 0.0417 0.0954 0.1016 0.0938 0.0673
Analysis: In this analysis, we can analysis that the cash ratio in the year on 2011, 2010, and 2009
the Beximco pharmaceutical company is better than other companies (Ibn Sina, Ambee, Square
and Renata pharmaceutical). Beximco pharmaceutical companies cash ratio in 2011 is 19.59%,
2010 is 58.55% and in 2009 is 45.59%. In the year 2008 as a result Ibn Sina Company is
standard position. Ibn Sina’s cash ratio in 2008 is 30.64% and in 2007 is 15.76%.
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4. Net Working Capital-Total Asset
Net Working Capital-Total Asset
Year 2011 2010 2009 2008 2007
Square 0.1211 0.1537 0.0886 0.0717 0.1075
Ibn Sina 0.0130 -0.0221 -0.1380 -0.0867 -0.1781
Ambee 0.0173 0.0013 -0.0036 -0.0122 -0.0035
Beximco 0.6295 0.5941 0.6643 0.0908 0.4431
Renata -0.1198 0.0413 0.0606 0.0610 0.1258
Analysis: In this analysis, we can explain that the Net Working Capital-Total Asset in the year
on 2011,2010,2009,2008 and 2007 the Beximco pharmaceutical company is better than other
companies (Ibn Sina, Ambee, Square and Renata pharmaceutical). Beximco pharmaceutical
companies Net Working Capital-Total Asset in 2011 to 2007 is 62.95%, 59.41%,66.43%,
9.08%and 44.31 Net Working Capital-Total Asset of others company is not better than
Beximco Pharma ltd.
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Long Term Solvency Ratio or Debt Management Ratios
1. Total Debt Ratio
Total Debt Ratio
Year 2011 2010 2009 2008 2007
Square 0.2894 0.2287 0.2474 0.3374 0.3007
Ibn Sina 0.5261 0.5705 0.6434 0.6327 0.6166
Ambee 0.7899 0.7982 4.1169 0.8336 0.8329
Beximco 0.2564 0.2526 0.4528 0.2948 0.3097
Renata 0.4853 0.4210 0.4269 0.4744 0.4071
Analysis: In this analysis, we find that the total debt ratio in the year on 2011,2010,2009,2008
and 2007 the Ambee pharmaceutical company is better than other companies (Ibn Sina, Square,
Beximco and Renata pharmaceutical). Ambee pharmaceutical company total debt ratio in 2011
to 2007 is 78.99%, 79.82%, 400.17%, 83.36%, and 89.29%.In the year 2011 to 2007 we see that
the total debt ratio of all five companies are closely.
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2. Debt Equity Ratio
Debt Equity Ratio
Year 2011 2010 2009 2008 2007
Square 0.4072 0.2965 0.3287 0.5092 0.4301
Ibn Sina 1.1103 1.3280 1.8044 1.7224 1.3552
Ambee 0.7899 0.7982 4.1169 0.834 0.8329
Beximco 0.3448 0.3380 0.8273 0.4181 0.4487
Renata 0.9430 0.7272 0.7448 0.9025 0.6867
Analysis: In this analysis, we see that the Debt Equity Ratio in the year on 2011,2010,2009,2008
and 2007 the Ibn Sina pharmaceutical company is better than other companies (square, Ambee,
Beximco and Renata pharmaceutical). In the year 2009 as a result square company is worst
position.
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3.Equity Multiplier
Equity Multiplier
Year 2011 2010 2009 2008 2007
Square 1.4072 1.2965 1.3287 1.5092 1.4301
Ibn Sina 2.1103 2.3280 2.8044 2.7224 2.1980
Ambee 5.6041 5.8695 1.1907 6.0086 5.9854
Beximco 1.3448 1.3379 1.8273 1.4181 1.4487
Renata 1.9430 1.7272 1.7448 1.9026 1.6867
Analysis: In this analysis, we can analyze that the Equity Multiplier in the year on
2011,2010,2009,2008 and 2007 the Ambee pharmaceutical company is better than other
companies (Ibn Sina, Square, Beximco and Renata pharmaceutical). Ambee pharmaceutical
company Equity Multiplier in the year 2011 to 2007 is 5.60, 5.87, 1.19, 6.00, and 5.99 times.
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Asset Management or Turnover Ratio
1. Inventory Turnover
Inventory Turnover
Year 2011 2010 2009 2008 2007
Square 3.0309 2.9728 2.7028 2.3960 2.7642
Ibn Sina 12.897 14.8402 12.6217 10.8745 8.6528
Ambee 1.0311 1.0639 0.8577 0.7572 1.8575
Beximco 1.7906 1.6724 1.4894 1.3306 1.3383
Renata 1.9553 1.8451 1.6930 1.5911 1.9621
Analysis: In this comparative analysis, we can analysis that the inventory turnover of Ibn
Sina pharmaceuticals ltd. is bigger than Square pharma, Ambee pharma, Beximco pharma and
Renata pharma. In 2011, Ibn Sina pharmaceutical is increased from 2007 to 2011 which is
greater than other pharmaceuticals company.
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2. Days Sales in Inventory
Days Sales in Inventory
Year 2011 2010 2009 2008 2007
Square 118.78 121.10 133.19 150.25 130.24
Ibn Sina 27.91 24.26 28.52 33.11 41.61
Ambee 349.14 338.36 419.73 475.45 193.80
Beximco 201.05 215.26 241.70 270.56 269
Renata 184.11 195.11 212.64 226.26 183.48
Analysis: In this comparative analysis, we can analysis that the item of day’s sales in
inventory of Ambee pharmaceuticals ltd. is bigger than other pharmaceuticals ltd. In 2008,
Ambee pharmaceutical takes 475.45 days which is greater than other pharmaceuticals company.
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3. Receivable Turnover
Receivable Turnover
Year 2011 2010 2009 2008 2007
Square 17.44 22.55 20.56 22.92 23.23
Ibn Sina 1087.76 1146.55 1478.60 1760.49 4468.04
Ambee 5.85 6.02 7.17 6.30 3.93
Beximco 8.07 7.90 7.01 7.96 7.20
Renata 10.18 10.41 11.34 8.98 13.01
Analysis: In this comparative analysis, we can analysis that the Receivable Turnover of Ibn
Sina pharmaceuticals ltd. on 2007 to 2011 is increased in receivable turnover than other
pharmaceuticals ltd. In 2007 to 2011, the receivable turnover of Ibn Sina pharmaceutical is are
greater than other pharmaceuticals company.
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4. Days in Receivable
Days in Receivable
Year 2011 2010 2009 2008 2007
Square 20.64 15.96 17.51 15.70 15.50
Ibn Sina 0.33 0.31 0.243 0.20 0.080
Ambee 61.50 59.79 50.20 57.13 91.56
Beximco 44.63 45.55 51.33 45.24 50.01
Renata 35.35 34.58 31.74 40.11 27.66
Analysis: In this comparative analysis, we can analysis that the item of day’s sales in
inventory of Ambee pharmaceuticals ltd. is bigger than other pharmaceuticals ltd. In 2008,
Ambee pharmaceutical takes 475.45 days which are greater than other pharmaceuticals
company.
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5. Fixed Assets Turnover
Fixed Assets Turnover
Year 2011 2010 2009 2008 2007
Square 1.08 1.08 1.038 1.00 1.10
Ibn Sina 4.40 4.198 3.378 3.59 3.57
Ambee 4.99 4.68 4.48 3.97 5.86
Beximco 0.50 0.43 0.38 0.34 0.40
Renata 1.25 1.67 1.77 1.87 2.17
Analysis: In this comparative analysis, we can analysis that fixed Asset Turnover of Ambee
pharmaceuticals ltd. is more than other pharmaceuticals ltd. because of on 2007, Ambee
pharmaceutical increase their fixed assets. So that Ambee pharmaceutical ltd. is greater than
other pharmaceuticals ltd. The total fixed Asset Turnover of Ambee pharmaceutical ltd.
respectably on 2011 is 4.98, on 2010 is 4.68, on 2009 is 4.49, on 2008 is 3.97 and on 2007 is
5.87
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6. Total Assets Turnover
Total Assets Turnover
Year 2011 2010 2009 2008 2007
Square 0.69 0.75 0.74 0.65 0.72
Ibn Sina 2.53 2.577 2.12 2.05 2.13
Ambee 0.96 0.94 4.49 0.86 1.21
Beximco 0.34 0.30 0.24 0.27 0.30
Renata 0.85 0.99 1.01 0.98 1.18
Analysis: In this comparative analysis, we can analysis that the total Asset Turnover of
Ambee pharmaceuticals ltd. is increased in 2007 which is greater than other years of other
pharmaceuticals ltd. In 2007, Ambee pharmaceutical of Total Asset turnover is 1.208
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Profitability Ratio
1. Profit Margin
Profit Margin
Year 2011 2010 2009 2008 2007
Square 0.1880 0.1821 0.1925 0.1673 0.1737
Ibn Sina 0.0403 0.0374 0.0385 0.0411 0.0355
Ambee 0.0280 0.0274 0.0272 0.0262 0.0222
Beximco 0.1519 0.1620 0.1283 0.1360 0.0982
Renata 0.1668 0.1675 0.1547 0.1402 0.1326
Analysis: In this analysis, we see that the profit margin in the year on 2011,2010,2009,2008 and
2007 the square pharmaceutical company is better than other companies (Ibn Sina, Ambee,
Beximco and Renata pharmaceutical). In the year 2009 as a result square company is standard
position. Instead, we also see that the square company last five years net profit and sales is little
bit increase not more than.
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2. Return on Assets (ROA)
Return on Assets (ROA)
Year 2011 2010 2009 2008 2007
Square 0.1302 0.1374 0.1416 0.10878 0.1243
Ibn Sina 0.1021 0.0960 0.0815 0.0843 0.0756
Ambee 0.0270 0.0257 0.1221 0.0225 0.0268
Beximco 0.0520 0.0492 0.0314 0.0368 0.0295
Renata 0.1414 0.1661 0.1567 0.1370 0.1559
Analysis: In this analysis, we view that the return on assets in the year on 2011 is 14.14%, 2010
is 16.61%, 2009 is 15.67%, 2008 is 13.69% and 2007 is 15.58% of Renata Pharmaceutical
company’s return on assets which are the higher than rest of four pharmaceutical companies.
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3. Return on Equity (ROE)
Return on Equity (ROE)
Year 2011 2010 2009 2008 2007
Square 0.1832 0.1781 0.1882 0.1642 0.1777
Ibn Sina 0.2154 0.2235 0.2286 0.2294 0.1661
Ambee 0.1511 0.1510 0.1454 0.1355 0.1604
Beximco 0.0700 0.0658 0.0574 0.0522 0.0428
Renata 0.2748 0.2869 0.2734 0.2606 0.2629
Analysis: In this analysis, we show that the return on equity of Renata pharmaceutical company
is the best from the year of 2011 to 2007 to compare with other pharmaceutical companies.
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Market value Ratio
1. Earning per Share (EPS)
Earning per Share (EPS)
Year 2011 2010 2009 2008 2007
Square 129.07 106.43 156.56 114.47 145.74
Ibn Sina 5.46 4.64 54.70 48.09 31.19
Ambee 3.81 3.68 3.45 3.15 3.85
Beximco 599.26 525.82 312.37 272.67 176.53
Renata 48.14 47.17 417.38 374.44 348.47
Analysis: In this analysis, we see that the Beximco pharmaceutical company in the year of 2011
and 2010 and Renata pharmaceutical company in the year 2007 to 2009 are better than from
other companies earning per shares (EPS).
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2. Book value per share
Book value per share
Year 2011 2010 2009 2008 2007
Square 704.36 597.50 512.03 429.06 373.81
Ibn Sina 25.35 20.76 239.33 209.62 187.76
Ambee 25.20 24.40 23.71 23.25 24.00
Beximco 68.03 63.45 72.02 69.14 65.51
Renata 175.21 164.40 1526.49 1436.80 1325.33
Analysis: in this comparative anlaysis, we show that the book value per share of square
pharmaceutical company is bigger than others of 2011 and 2010 year and the 2007 to 2009
year ‘s book value per share amount is the higher than others.
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3. Payout Ratio
Payout Ratio
Year 2011 2010 2009 2008 2007
Square 0.2086 0.2313 0.1893 0.2157 0.2859
Ibn Sina 0.1399 0.1201 0.4613 0.4626 0.5502
Ambee 1.2106 0.2754 0.8225 1.5079 0.5325
Beximco 0.0011 0.0014 0.0028 0.0058 0.0093
Renata 0.1766 0.1802 0.2037 0.2003 0.2009
Analysis: in the comparative analysis, we see that the payout ratio is higher for Ambee
pharmaceutical company from 2008 to 2011 year than others and the year of 2007 is best for Ibn
Sina pharmaceutical company.
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8. Findings
Pharmaceutical spending is also amongst the lowest in the world in per capita terms.
Healthcare expenditures consist of only 3.35% of GDP.
The industry contributes about 1% of the total GDP. There are about 250 licensed
pharmaceutical manufacturers in the country; however, currently a little over 100
companies are in operation.
. It is highly concentrated as top 20 companies produce 85% of the revenue. According to
IMS, a US-based market research firm, the retail market size is estimated to be around
BDT 84 billion as on 2011.
About 85% of the drugs sold in Bangladesh are generics and 15% are patented drugs - the
structure differs significantly from the international market. Branded generic drugs
represent about 25% on average of worldwide pharmaceuticals sales’; however, given the
popularity in emerging markets like China, India and Latin America, branded generic
drugs may well dominate the total sales within a decade.
9. Recommendation:
1. Liquidity refers to the ability of the concern to meet its current obligations as and when
these become due. The companies should improve its liquidity position.
2. The companies should make the balance between liquidity and solvency position of the
company.
3. The cost of goods sold is high in every year so the company should do efforts to control
it.
4. The short term financial position of the company is not very good so it should pay a little
attention to short term solvency of the company.
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10. CONCLUSION
The conclusion chapter is directly connected to the purpose. The analysis will be summarized in
order to answer the research questions and fulfill the purpose of the thesis.
This thesis is based on six main research questions. First, we analysis of liquidity measures
indicates that current ratio is bed condition for both companies .Quick and asset measures is
found that the same position of previous ratio and cash ratio measures the square pharmaceutical
company is little bit better than the Beximco pharmaceutical company. So we notice that the
Beximco pharmaceutical is better condition of liquidity position compare that Square
pharmaceutical company. Second, we analysis is all efficiency measures ,account receivable
turnover, average collection period ,inventory turnover, account payable turnover, fixed assets
turnover, total asset turnover .The Beximco Pharmaceutical company are significant increase in
account receivable turnover and account payable in days compare than the Square
Pharmaceutical company. The square pharmaceutical company also increases some measure and
decreases some measures but increasing point is not betters then the Beximco Pharmaceutical
Company. We ensure that the Beximco pharmaceutical is standards position for asset
management measure. Third, we analysis is profitability measures indicates the different kind of
ratio. The Beximco Pharmaceutical company compare are more profitable from the square
pharmaceutical company in net profit margin, gross profit margin, return on assets (ROA), return
on equity (ROE), operating profit margin. Overall, net profit margin is found rising for Beximco
pharmaceutical company and plummeting for the square pharmaceutical company during 2007-
2011.Gross profit margin of Beximco Pharmaceutical Company are found to increase than it
return of asset to increase. Whereas, the opposite the square pharmaceutical company is decrease
day by day. Return in Equity and operating profit margin is found increase during 2007-2011 in
Beximco pharmaceutical company. On the other, square pharmaceutical is fall. So we ensure that
the Beximco pharmaceutical company is better condition for profitable.
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11. Appendix
Excel Sheet
Square Pharmaceutical Ltd
Ibn Sina Pharmaceutical Ltd
Ambee Pharmaceutical Ltd
Beximco Pharmaceutical Ltd
Renata Pharmaceutical Ltd
Comparative Analysis
Annual Report
Square Pharmaceutical Ltd (2007-2011)
Ibn Sina Pharmaceutical Ltd (2007-2011)
Ambee Pharmaceutical Ltd (2007-2011)
Beximco Pharmaceutical Ltd (2007-2011)
Renata Pharmaceutical Ltd (2007-2011)