Performance analysis of working capital management of “pharmaceuticals industry”

Performance Analysis of
Working Capital Management of
“Pharmaceuticals Industry”

Page 1 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
Md. Fayshal Hossan Miazy

ID No
2009110000038

Mubashir Hossain

2009010000050 (21st)

Md. Ahadul Islam

2009110000049

Md. Robiul Islam

2009110000066

Md. Shaheen

2009110000069

BBA.22nd. Batch.
Major: Finance-A

Date of Submission: 27 August, 2012
Page 2 of 166

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.

Page 3 of 166

Dedication
Dedicate to our respected “Parents”
And
Our honorable course teacher “Khairul Alom”

Page 4 of 166

Letter of Transmittal
27 August, 2012
To,

Khairul Alom
Course Teacher
School Of Business Studies

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)
Page 5 of 166

Table of Contents
No.

1

Particular

01

Introduction
1.1 Pharmaceutical Sectors in Bangladesh
1.2 Market Size & Growth

2

Page No.

01--02
02-03
03

Background of the report
2.1 Purpose of the report
2.2 Limitation of the Study

3

04
04
05

Methodology
3.1 Data Collection
3.2 Data Analysis

4

05
05

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
17-23

5

Theoretical Review

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


Page 6 of 166

87-107

6.5 Renata Pharmaceuticals Ltd.

108-128

7

Comparative Analysis

129-147

8

Findings

148

9

Recommendation

148

10

Conclusion

149

11

Appendix

150

Page 7 of 166

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 offpatent 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 antiulcerants, flouroquinolones, anti-rheumatic non-steroid drugs, non-narcotic analgesics,
antihistamines, and oral anti-diabetic drugs. Some larger firms have also started producing anticancer 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.

Page 13 of 166

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

Page 14 of 166

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.
Page 15 of 166

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 pharmaceutical 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

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

Page 16 of 166

Dosage form

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.

Page 17 of 166

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

Page 18 of 166

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 antiPage 19 of 166

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.

Page 20 of 166

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,

Small Volume Sterile Eye & Ear Drops

Cream and Powder :

Small Volume Nasal Drops & Sprays
Topical Ointments & Creams
Topical Antibiotic Powder

Oral Dry Powders :

Dry Suspensions (Antibiotic & Anti Infectives)
Dry Syrups (Antibiotics)

Page 21 of 166

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.
Page 22 of 166

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

Steroid Preparations
Anti-asthmatic Preparation

Anti-bacterial Preparations

Anti-ulcerant Preparations

Page 23 of 166

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
Page 24 of 166

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.
Page 25 of 166

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 26 of 166

consider the inventory valuation method used by the firms. Some firms use a FIFO (first-in-firstout) 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.

Page 27 of 166

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.

Page 28 of 166

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.

Page 29 of 166

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 30 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

Page 31 of 166

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 32 of 166

Time Series Analysis

Short Term Solvency or Liquidity Ratio
1. Current Ratio:

Year
Current Ratio

2011
1.504

2010

2009

2008

2007

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.
Page 33 of 166

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.

Page 34 of 166

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.

Page 35 of 166

4. Net Working Capital-Total Asset:

Year

2011

2010

2009

2008

2007

Net Working Capital-Total
Asset
Net Working Capital-Total
Asset in %

0.121

0.154

0.089

0.072

0.107

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%.

Page 36 of 166

1. Total Debt Ratio:

Year
Total Debt Ratio
Total Debt Ratio in %

2011

2010

2009

2008

2007

0.2893736

0.228679

0.2473935

0.3374040

0.3007247

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.

Page 37 of 166

2. Debt Equity Ratio:

Year

2011

2010

2009

2008

2007

Debt Equity Ratio

0.407

0.296

0.329

0.509

0.430

40.72%

29.65%

32.87%

50.92%

43.01%

Debt Equity Ratio in
%

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%.

Page 38 of 166

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.

Page 39 of 166

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.

Page 40 of 166

2. Days Sales in Inventory:

Year
Days Sales in Inventory

2011

2010

2009

2008

2007

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.

Page 41 of 166

3. Receivable Turnover:

Year
Receivable
Turnover

2011

2010

2009

2008

2007

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.

Page 42 of 166

4. Days in Receivable:

Year
Days in
Receivable

2011

2010

2009

2008

2007

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.

Page 43 of 166

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

Page 44 of 166

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.
Page 45 of 166

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%.

Page 46 of 166

2. Return on assets (ROA):

Year
Return on assets (ROA)

2011
0.130

2010
0.137

2009
0.142

Page 47 of 166

2008
0.105

2007
0.124

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%.

Page 48 of 166

3. Return on equity (ROE):

Year

2011

2010

2009

2008

2007

Return on equity

0.183

0.178

0.188

0.164

0.178

18.32%

17.81%

18.82%

16.42%

17.77%

Return on Equity in %

Page 49 of 166

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 50 of 166

Market value Ratio
1. Earnings per Share(EPS):

Year
Earnings per
Share(EPS)

2011

2010

2009

2008

2007

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.

Page 51 of 166

2. Book Value Per Share:

Year
Book Value Per Share

2011

2010

2009

2008

2007

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.

Page 52 of 166

3. Payout Ratio:

Year

2011

2010

2009

2008

2007

Payout Ratio

0.209

0.231

0.189

0.216

0.286

20.86%

23.13%

18.93%

21.57%

28.59%

Payout Ratio in %

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 53 of 166

6.2 Ibn Sina Pharmaceutical Ltd
Ratio Analysis:
S
N

Ratio Name

Formula

2011

2010

2009

2008

2007

01

Current Ratio

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


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

01

Total Debt
Ratio


0.526

0.570

0.643

0.633

0.617

02

Debt Equity
Ratio


1.110

1.328

1.804

1.722

1.355

03

Equity
Multiplier


2.110

2.328

2.804

2.722

2.198

12.622 10.874

8.653

01

Inventory
Turnover

Cost of Goods Sold /
Inventory

02

Days Sales in
Inventory


03

Receivable
Turnover

Net Sales/ Accounts
Receivable

04

Days in

12.897

14.840

27.96
Days

24.26
Days

1087.76

1146.5
5

360/ Receivable Turnover

0.33

0.31

Page 54 of 166

28.52
Days

33.11
Days

41.61
Days

1478.60 1760.4
9

4468.04

0.24

0.20

0.08

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


0.040

0.037

0.039

0.041

0.035

02

Return on
assets (ROA)


0.102

0.096

0.082

0.084

0.076

03

Return on
equity (ROE)


0.215

0.224

0.229

0.229

0.166

5.46

4.64

54.7

48.09

31.19

239.33 209.62

187.76

Market value Ratio
01

Earnings per
Share(EPS)

Net Income/ No. of Share
Outstanding

02

Book Value
Per Share

Total equity / No. of
Share Outstanding

25.34

20.76

03

Payout Ratio

Dividends Paid / Net
Income

0.140

0.120

Page 55 of 166

0.461

0.463

0.550


1. Current Ratio:

Year

2011

2010

2009

2008

2007

Current Ratio

1.031

0.946

0.730

0.832

0.694

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.
Page 56 of 166

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.

Page 57 of 166

3. Cash Ratio:

Year
Cash Ratio
Cash Ratio in %

2011

2010

2009

2008

2007

0.353

0.3083

0.2480

0.3064

0.1576

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%.

Page 58 of 166

4.


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 59 of 166


Year
Total Debt Ratio

2011

2010

2009

2008

2007

0.5261

0.5705

0.6434

0.6327

0.6166

52.61

57.05

64.34

63.27

61.66

Page 60 of 166

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.
Page 61 of 166


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

Page 62 of 166


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 63 of 166


Year
Inventory Turnover

2011

2010

2009

2008

2007

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.

Page 64 of 166


Year

2011

2010

2009

2008

2007

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.

Page 65 of 166


Year
Receivable Turnover

2011

2010

2009

2008

2007

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.

Page 66 of 166


Year
Days in Receivable

2011

2010

2009

2008

2007

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 67 of 166


Year

2011

2010

2009

2008

2007


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.

Page 68 of 166


Year

2011

2010

2009

2008

2007


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 69 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.

Page 70 of 166


Year
Return on assets (ROA) in
%

2011

2010

2009

2008

2007

0.1021

0.0960

0.0815

0.0843

0.0756

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%.

Page 71 of 166


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.

Page 72 of 166

Market value Ratio

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.

Page 73 of 166

2. Book Value per Share:

Year

2011

2010

2009

2008

2007


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.

Page 74 of 166

3. Payout Ratio:

Year
Payout Ratio
Payout Ratio in %

2011

2010

2009

2008

2007

0.1399

0.1201

0.4613

0.4626

0.5502

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 75 of 166

6.3

Ambee Pharmaceuticals Ltd

Ratio Analysis
SN Ratio Name

Formula

2011

2010

2009

2008

2007

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


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

01

Total Debt Ratio


0.790

0.798

4.117

0.834

0.833

02

Debt Equity Ratio


4.427

4.685

4.902

5.009

4.985

03

Equity Multiplier


5.604

5.869

1.191

6.009

5.985

0.858

0.757

1.858

01

Inventory
Turnover

Cost of Goods Sold / Inventory

02

Days Sales in
Inventory


03

Receivable
Turnover

Net Sales/ Accounts Receivable

04

Days in Receivable 360/ Receivable Turnover

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

Page 76 of 166

1.031

349.13
6
5.854

64.446

1.064

338.36 419.73
0
0
6.021

7.172

64.478 64.510

475.45 193.80
2
4
6.301

3.932

57.133 91.555

Profitability Ratio
01

Profit margin


0.028

0.027

0.027

0.026

0.022

02

ROA


0.027

0.026

0.122

0.022

0.027

03

ROE


0.151

0.151

0.145

0.135

0.160

3.81

3.68

3.44

3.17

3.78

25 tk

24 tk

23 tk

23 tk

24 tk

1.211

0.275

0.823

1.508

0.532

Market value Ratio
01

EPS

NIAT/ No. of Share

02

Book Value Per
Share

Total equity / No. of Share

Payout Ratio

Dividends Paid / NIAT

03

Page 77 of 166

1. Current Ratio:

Year
Current Ratio

2011
1.022

2010
1.002

2009
0.999

2008
0.985

2007
0.996

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.
Page 78 of 166

2. Quick Ratio:

Year
Quick Ratio

2011
0.481

2010
0.489

2009
0.427

2008
0.373

2007
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 79 of 166

3. Cash Ratio:

Year
Cash Ratio
Cash Ratio in %

2011
0.009

2010
0.009

2009
0.026

2008
0.023

2007
0.001

0.90%

0.90%

2.60%

2.30%

0.10%

Page 80 of 166


Page 82 of 166

4.


Year

2011

2010

2009

2008

2007

0.017

0.001

-0.004

-0.012

-0.003

1.73%


0.13%

0.36%

1.22%

0.35%

Net Working Capital-Total Asset in %

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 83 of 166

Long-Term Solvency Ratio

Year
Total Debt Ratio

2011
0.790
79%

2010
0.798
79.80%

2009
4.117
411.70%

2008
0.834
83.40%

2007
0.833
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 84 of 166


Year
Debt Equity Ratio
Debt Equity Ratio in
%

2011
4.427
442.70%

2010
47.692
476.92%

Page 85 of 166

2009
4.902
490.20%

2008
5.009
500.90%

2007
4.985
498.50%


Page 86 of 166

3.

Equity Multiplier:

Year

2011

2010

2009

2008

2007

Equity Multiplier

5.604

5.870

1.191

6.009

5.985


Page 87 of 166


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 88 of 166


Year

2011

2010

2009

2008

2007

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 89 of 166


Year

2011

2010

2009

2008

2007

Receivable Turnover

5.854

6.021

7.172

6.301

3.932

which compare in more than from 2007 to 2011. On 2009, the receivable turnover of Ambee

Page 90 of 166


Year
Days in Receivable

2011

2010

2009

2008

2007

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 91 of 166


Year

2011

2010

2009

2008

2007


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
2007, the fixed assets turnover of Ambee pharmaceuticals ltd. takes 5.865 times.

Page 92 of 166


Year

2011

2010

2009

2008

2007


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 93 of 166

Profitability Ratio
1. Profit margin:

Year
Profit margin
Profit margin in %

2011

2010

2009

2008

2007

0.028
2.81%

0.027
2.70%

0.027
2.70%

0.026
2.60%

0.022
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 94 of 166


Year

2011

2010

2009

2008

2007

Return on assets (ROA):
ROA in %

0.027
2.70%

0.026
2.57%

0.122
12.20%

0.022
2.20%

0.027
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 95 of 166


Year
ROE in %

2011

2010

2009

2008

2007

0.151

1.537

0.145

0.135

0.160

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 96 of 166

Market value Ratio

Year

2011

2010

2009

Tk 3.81

Tk 3.68

Tk 3.45

2008

2007

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 97 of 166


Year
Book Value per
Share

2011

2010

2009

2008

2007

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 98 of 166

3. Payout Ratio:

Year

2011

2010

2009

2008

2007

Payout Ratio

1.216

0.275

0.823

1.508

0.532

121.60%

27.50%

82.30%

150.80%

53.20%

Payout Ratio in %

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 99 of 166

6.4 Beximco Pharmaceutical Ltd
Ratio Analysis
SN

Ratio Name

Formula

2011

2010

2009

2008

2007

01

Current Ratio

Current
Asset/Current
Liabilities

2.69940

2.46370

2.97948

1.09986

1.79596

02

Quick Ratio

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

Total Asset

0.62955

0.59411

0.66437

0.09080

0.44319

01

02

03

Total Debt
Ratio

Total Debt/ Total
Asset

0.25638

0.25258

0.45276

0.29484

0.30974

Debt Equity
Ratio

Total Debt / Total
Equity

0.34475

0.33794

0.827344

0.41812

0.44873

Equity
Multiplier

Total Asset / Total
Equity

1.34476

1.33794

1.82734

1.41812

1.44873

01

Inventory
Turnover

Inventory

Days Sales in
Inventory

360/ Inventory
Turnover

Receivable
Turnover

Net Sales/ Accounts
Receivable

04

Days in
Receivable

360/ Receivable
Turnover

05

Fixed Asset
Turnover

Assets

0.49671

0.42757

0.37520

0.33536

0.39836

Total Asset
Turnover

Net Sales/ Total
Assets

0.34256

0.30370

0.24474

0.27060

0.30092

02

03

06

1.79057
201.05
Days
8.06588
44.63
Days

1.67236

1.48942

1.33056

1.33830

215.26
Days

241.70
Days

270.56
Days

269 Days

7.90260

7.01365

7.95800

7.19865

45.55
Days

Page 100 of 166

51.33
Days

45.24
Days

50.01
Days

Profitability Ratio
01

02

03

Profit margin

Net Income/ Net
Sales

0.15190

0.16202

0.12833

0.13599

0.09816

Return on
assets (ROA)

Net Income/ Total
Assets

0.05203

0.04921

0.03140

0.03680

0.02954

Return on
equity (ROE)

Net income/ Total
equity

0.06997

0.06583

0.057391

0.05218

0.04279

Market value Ratio
01

02

03

Earnings per
Share(EPS)

Net Income/ No. of
Share Outstanding

Book Value Per
Share
Payout Ratio

4.76

4.18

4.13

3.61

2.80

Share Outstanding

68.03

63.45

72.02

69.14

65.50

Income

0.00114

0.00143

0.00276

0.00581

0.00930

Page 101 of 166


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 102 of 166

2. Quick Ratio:

Year
Quick Ratio

2011
1.83395

2010
1.67433

2009
2.23730

2008
0.52136

2007
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 103 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%


Page 104 of 166


Year
Net Working CapitalTotal Asset
Net Working CapitalTotal Asset in %

2011
2010
2009
2008
2007
0.62955
0.59411
0.66437
0.09080
0.44319
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 105 of 166


Year

2011

2010

2009

2008

2007

Total Debt Ratio

0.25638

0.25258

0.45276

0.29484

0.30974


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 106 of 166


Year

2011

2010

2009

2008

2007

Debt Equity Ratio

0.34475

0.33794

0.827344

0.41812

0.44873


34.48%

33.79%

82.73%

41.81%

44.87%


Page 107 of 166


Year
Equity Multiplier

2011

2010

1.34476

2009

1.33794

2008

1.82734

2007

1.41812

1.44873


Page 108 of 166


Year
Inventory Turnover

2011
2010
2009
2008
2007
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 109 of 166


Year

2011

2010


201.05
Days

2009

215.26 Days

241.70 Days

2008
270.56 Days

2007
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 110 of 166


Year
Receivable Turnover

2011

2010
8.06588

2009
7.90260

7.01365

2008

2007
7.95800

7.19865

which compare in more than from 2007 to 2011. On 2011, receivable turnover of Beximco

Page 111 of 166


Year

2011

Days in Receivable

44.63 Days

2010
45.55 Days

2009
51.33 Days

2008
45.24 Days

2007
50.01 Days

Analysis: In this ratio, we can analysis that the result of days in receivable for Beximco
2009, Days in receivable of Beximco pharmaceuticals ltd. takes 51.33 days.

Page 112 of 166


Year

2011
0.49671

2010

2009

0.42757

0.37520

2008
0.33536

2007
0.39836

Analysis: In this ratio, we can analysis that the result of fixed assets turnover for Beximco
2011, the fixed assets turnover of Beximco pharmaceuticals ltd. takes 0.50 times.

Page 113 of 166


Year

2011
2010
2009
2008
2007
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 114 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 115 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 116 of 166


Year
Return on assets (ROA) in %

2011

2010

2009

2008

2007

0.05203

0.04921

0.03140

0.03680

0.02954

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 117 of 166


Year
Return on equity (ROE) in %

2011

2010

2009

2008

2007

0.06997

0.06583

0.057391

0.05218

0.04279

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 118 of 166

Market value Ratio

Year

2011

2010

2009

2008

2007

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 119 of 166

2. Book Value Per Share:

Year

2011

2010
68.03

2009
63.45

2008
72.02

2007
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 120 of 166

3. Payout Ratio:

Year
Payout Ratio
Payout Ratio in %

2011

2010

2009

2008

2007

0.001

0.00143

0.00276

0.00581

0.00930

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 121 of 166

6.5 Renata Pharmaceutical
Ratio Analysis:
SN

Ratio Name

Formula

2011

2010

2009

2008

2007

01

Current Ratio

Liabilities

0.728

1.113

1.165

1.147

1.378

02

Quick Ratio

Liabilities

0.260

0.416

0.403

0.416

0.455

03

Cash Ratio


0.043

0.0954

0.102

0.094

0.067

04

Net Working
Capital-Total
Asset

Total Asset

-0.120

0.041

0.061

0.061

0.126

01

Total Debt Ratio


0.485

0.421

0.427

0.474

0.407

02

Debt Equity
Ratio


0.943

0.727

0.745

0.903

0.687

03

Equity
Multiplier


1.943

1.727

1.745

1.903

1.687

01

Inventory
Turnover

Inventory

02

Days Sales in
Inventory

360/ Inventory
Turnover

03

Receivable
Turnover

04

05

1.955

1.845

1.693

1.591

1.962

184.114

195.110

212.64

226.2

183.48

Net Sales/ Accounts
Receivable

10.184

10.411

11.343

8.976

13.014

Days in
Receivable

360/ Receivable
Turnover

35.350

34.579

31.736

40.10

27.663

Fixed Asset
Turnover

Asset

1.247

1.669

1.766

1.866

2.172

Page 123 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


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

Share Outstanding

175.210

164.340

1526.4

1436.8

1325.3

03

Payout Ratio

Income

0.177

0.180

0.204

0.200

0.201

Page 124 of 166

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 125 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 126 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 127 of 166


Year
Net Working Capital to
Total Asset
Net Working Capital in
%

2011

2010

2009

2008

2007

-0.1198352

0.041330762

0.060596586 0.060931038 0.125765662

-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 128 of 166

Long Term Solvency 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 129 of 166


Year
Debt Equity Ratio

2011

2010

2009

2008

2007

0.9430

0.7271

0.7448

0.9026

0.6867

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 130 of 166


Year

2011

2010

2009

2008

2007

Equity Multiplier

1.9430

1.7272

1.7448

1.9026

1.6867

to 2010. Equity Multiplier on 2011 is 1.94 times.

Page 131 of 166


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 132 of 166


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 133 of 166


Year

2011

2010

2009

2008

2007

Receivable
Turnover

10.18382879

10.41103627

11.34361371

8.975899678

13.01393024

to 2010. Equity Multiplier on 2011 is 1.94 times.

Page 134 of 166


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.

Page 135 of 166


Year

2011

Fixed Asset
Turnover

1.247186773

2010
1.668625113

2009

2008

2007

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.

Page 136 of 166


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.

Page 137 of 166

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.

Page 138 of 166


Year
Return on
assets (ROA)
ROA in %

2011

2010

2009

2008

2007

0.141416462

0.166122307

0.156703865

0.136974667

0.15588127

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.

Page 139 of 166


Year
Return on
equity (ROE)
ROE in %

2011

2010

2009

2008

2007

0.274773133

0.286924191

0.273424515

0.260605708

0.262931793

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.

Page 140 of 166

Market value Ratio

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.
Page 141 of 166


Year
Book Value
per Share

2011

2010

2009

2008

2007

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.

Page 142 of 166

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.

Page 143 of 166

7. Coparative Analysis

1. Current Ratio
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

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

Page 144 of 166

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
Page 145 of 166

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.

Page 146 of 166

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%.

Page 147 of 166

4. 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
Beximco Pharma ltd.

Page 148 of 166

of others company is not better than

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.

Page 149 of 166

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.

Page 150 of 166

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.

Page 151 of 166

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.

Page 152 of 166

2. Days Sales in Inventory
Year

2011

2010

2009

2008

2007

118.78

121.10

133.19

150.25

130.24

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

Square
Ibn Sina

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.

Page 153 of 166

3. Receivable Turnover
Receivable Turnover
Year

2011

2010

2009

2008

2007

Square

17.44

22.55

20.56

22.92

23.23

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

Ibn Sina

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.

Page 154 of 166

4. Days in Receivable
Days in Receivable
Year

2011

2010

2009

2008

2007

Square

20.64

15.96

17.51

15.70

15.50

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

Ibn Sina

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.

Page 155 of 166

Performance analysis of working capital management of “pharmaceuticals industry”

Performance analysis of working capital management of “pharmaceuticals industry”

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