1. Introduction
Beximco Pharmaceutical Ltd. is a leading edge pharmaceutical company based in Dhaka, Bangladesh and is a member of the
Beximco Group. The history of pharmaceutical business of the company dates back to the early 70s, when it started to import
market and distribute medicines from world renowned companies like Upjohn Inc. of USA and Bayer AG of Germany. Since the
very beginning, the company was highly successful in generating increased demand for its products which eventually justified
local production. It completed its registration in 1976 and started its operation in 1980 by manufacturing and marketing
licensee products of Bayer AG of Germany and Upjohn Inc. of USA. After its initial years of struggle it broke ground with the
launching of its own products in 1983. In 1985 BPL was listed in Dhaka Stock Exchange (DSE) as a Public Limited Company. The
journey continued and barrier after barrier were crossed, challenges were faced and overcome to transform BPL into what it is
at present. Now it has grown to become nation's one of the leading pharmaceutical companies, supplying more than 10% of the
country's total medicine need. In the process, it was enlisted in Chittagong and London Stock Exchange. Today Beximco
manufactures and markets its own `branded generics' for almost all diseases from AIDS to cancer, from infection to asthma,
from hypertension to diabetes for both national and international markets.
It manufactures a range of dosage forms including tablets, capsules, dry syrup, powder, cream, ointment, suppositories, large
volume intravenous fluids, metered dose inhalers etc. in several world-class manufacturing plants, ensuring high quality
standards complying with the World Health Organization (WHO) approved current Good Manufacturing Practices (cGMP).
Beximco also contract manufactures for major international brands of leading multinational companies.
Beximco has a strong market focus and is anticipating continued future growth by leveraging business capabilities and
developing superior product brands and markets. In particular it is very interested in developing a strong export market in USA
and Europe. To meet the future demand it has invested over US 50 million dollar to build a new state-of-the-art manufacturing
plant, confirming to USFDA and UK MHRA standards. This new plant will also offer contract-manufacturing facility to leading
pharmaceutical companies, especially from Europe and US.
2.1.2 Vision:
“If there is one characteristic that has typified the BEXIMCO approach, it is the Vision to be the best of our nature and human
resource; a vision to establish our group and country as a respected and valued regional presence.”
2.1.3 Mission:
“Each of our activities must benefit and add value to the common wealth of our society. We firmly believe that, in the final
analysis we are accountable to each of the constituents with whom we interact, namely: our employees, our customers, our
business associates, our fellow citizens and our shareholders.
2.1.5 Board and Management
Beximco Pharmaceuticals Ltd. is managed by the Board of Directors, an Executive Committee and a Management Committee.
Board of Directors is responsible for the corporate governance. It consists of eleven members including the Chairman, A S F
Rahman and the Vice Chairman, Salman F Rahman. The five-member Executive Committee is headed by Mr. Osman Kaiser
Chowdhury who is also a member of the Board of Directors. The Executive Committee is accountable for both operational and
financial performance of the company. This committee is also responsible for budget approval, policy adoption or changes, new
project review, compliance audit etc. The Management Committee comprises of ten eleven-notch professionals who are one of
the bests in Bangladesh in their own fields. This committee is leaded by Mr. Nazmul Hasan, Chief Executive Officer (CEO) who is
responsible for the overall management of the business. This committee reviews and manages day-to-day business operation
and recommends strategy options to the Executive Committee.
Products:
The company’s diverse product portfolio encompasses a wide variety of therapeutic categories, including antibiotics, analgesics,
respiratory, cardiovascular, central nervous system, dermatology, gastrointestinal etc. BPL currently produces 235 generics in
426 strengths and dosage forms and many of the company’s brands are consistently occupying leading positions in their
respective therapeutic categories.
In 2010 Beximco Pharma introduced 27 new generics in a total of 34 presentations, which include seven ophthalmic drops,
three HFA asthma inhalers and also drugs in categories such as, three cardiovascular, two multivitamins, two musculoskeletal,
two anti-infective, and one anti-diabetic, among others.
The three HFA-based inhalers which were launched for the first time in Bangladesh in 2010. Also introduce for first time into
the market was a formulation of Paracetamol 665 mg. Napa Extend.
Baximco Pharma’s Growth prospects remain excellent with key blockbuster products such as Napa and Neoceptin-R in its
portfolio.
In 2010 Napa and Neoceptin R ranked 2nd and 4th respectively on the national “Top Five” list. More over ten of BPL’s brands
have annual sales in excess of BDT 100 million each.
9Management Accounting Practice At Beximco Pharmaceuticals Ltd: A Review Of Costing Function

2. Block Buster product:
Napa Highest selling drug in Bangladesh pharmaceutical market in
terms of unit.
Neoceptin-R Highest selling drug in Bangladesh pharmaceutical market in
terms of value.
Bextrum/Bextrum Gold Emerged as the most admired and highest selling nutritional
supplement in Bangladesh Market in just one year.
Amdocal Highest selling cardiovascular drug in BD in terms of value.
Tofen Highest selling oral anti-asthma drug in BD in terms of value.
Azmasol Highest selling mastered dose inhaler in Bangladesh in
terms of value.
.1.7 International Market:
Beximco Pharma continues to explore export opportunities and to reinforce its footprint on a global scale, which currently
covers five different continents. Alongside the continuous endeavour to strengthen the position in existing markets, BPL
attempts to achieve dynamic growth worldwide.
Beximco Pharma commenced its international operations with the export of API to Hong Kong in 1992 and formulation
products to Russia in 1993. The company has received the ‘National Export Trophy’ (Gold) for an impressive three times. Since
then, BPL has taken greater strides over the years to increase its footprints in international markets.
In 2010, BPL successfully ventured into several new countries including South Africa (via contract manufacturing) and
Netherlands Antilles, and registered 45 products in overseas markets. The company achieved export revenues of Tk 330.54
million, up 21.47% over 2009.

3. The current expansion of this overseas portfolio includes prioritizing and directing marketing operations to focus more on
highly regulated markets such as the European Union (EU), USA, Australia and GCC member countries for value added generics.
As of 2010 Beximco Pharma has 322 products registered in Asia, 91 in Africa, five in Central and Latin America, and 22 in
Middle East, while we are actively taking measures to register our products in attractive branded generic markets such as the
CIS states and the EU countries.
BPL’s products are highly trusted for their quality by physicians and consumers at home and abroad. With this acclamation BPL
is supplying different formulations from its portfolio to renowned hospitals and institutions including Raffles Hospital,
Healthway Medical Group & K. K. Women and Children Hospital in Singapore; Asthma Drug Facility (ADF) in France; CENABAST
in Chile; and MEDS and Kenyatta National Hospital in Kenya. BPL is constantly investing in its state-of-the-art manufacturing
facilities to significantly expand its capabilities to meet the regulatory requirements of developed countries. BPL has pursued
approvals from different drug regulatory authorities, e.g. TGA (Australia), GCC (Gulf Council), ANVISA (Brazil) and INVIMA
(Colombia), which highlights BPL’s credentials as it explores new opportunities in the export arena.
In brief, BPL is now involved in the following national markets: Iran South Korea Cambodia
Malaysia Taiwan Philippines
Hong Kong Russia Somalia
Ukraine Georgia Sri Lanka
Pakistan Myanmar Kenya
Singapore Nepal Mozambique
Yemen Vietnam

4. Purchase and Cash Disbursement :
The purchasing starts with need recognition. The respective department identifies its need and send to purchase department
and the quantity and timing of raw materials are decided by the planning department. Then the goods and services are
received by the user department who has issued the purchase requisition or in some cases by the authorized department. Then
the purchase department compares the invoice/bill. If everything has been complied, the amount payable to supplier is
approved by the purchase department. After a certain period of time when the date becomes matured for the liability the
payment is made by BPL. The matured date has been calculated in the aged payable report for each vendor. The mode of
payment is usually per numbered check. In most cases the payment is made by A/C payee only check. In some cases the
payment may be made by cash or by bearer check or paid in advance fully or partly. Normally on average the payment term is
30days n30 policy in order to verify the quality of the supply and if they see that cash discounts are given they usually try to
grab those opportunities
Sales and Cash Collection System :
Most of the Sales in Beximco pharmaceuticals are conducted on cash basis normally they don`t allow credit to customers. But
sometimes for their old and loyal customers they extend the payment terms normally on average 10-12 days to maintain good
relationship with them. Normally they receive orders through telephone, online and retail stores. Normally after getting an
order they send the delivery to the customer, then customer mails them the cheque, after getting the cheque they deposit it
and it take sometime to transfer the amount in their account. The collection float is not that high as they conduct business on
cash basis and they follow decentralized system hence the mail float and availability float is lower but as they follow
decentralized system in different districts the processing float is much higher. The field officer collects the cash and then
transfer it in 1 single central area. They have around 20-25 collection system in all over Bangladesh and finally the balance is
transferred at their central system.
Credit Management
As they purchase goods on credit from their supplier to verify the product which is described above in the purchase and cash
disbursement section it indicates that they use trade credit but along with that they also take bank credit means they borrow
from bank to run their operations they borrow money from several banks but Janata Bank is their primary customer.
Liquidity Ratio :
Current ratio

5. Current ratio is a financial ratio that measures whether or not a company has enough resources to pay its debt over
the next business cycle (usually 12 months) by comparing firm's current assets to its current liabilities. It gives an idea of
company's operating efficiency. A high ratio indicates "safe" liquidity, but also it can be a signal that the company has problems
getting paid on its receivable or have long inventory turnover.
After analyzing the current ratio from the time period of 2007 to 2011 we found in 2008 it fell down heavily because
current liability rose due to increase in short term borrowings from bank but current asset remained fairly constant. In 2009 it
increased dramatically because they had huge cash in hand and they invested substantial amount in short term investment. In
2010 it fell down slightly because they reduced their short term investment. In 2011 it again rose because they increased their
investment in short term asset. From our analysis we found that beximco ratio is very high so they are becoming financially
stable but they are also keeping huge amount of idle cash.
Quick ratio :
Quick Ratio is an indicator of company's short-term liquidity. It measures the ability to use its quick assets (cash and cash
equivalents, marketable securities and accounts receivable) to pay its current liabilities. It specifies whether the assets that can
be quickly converted into cash are sufficient to cover current liabilities. Many lenders are interested in this ratio because it does
not include inventory, which is the most illiquid asset and it may or may not be easily converted into cash.
After analyzing quick ratio for the last 5 years it gives similar results like current ratio means it fell down heavily in 2008 again
rose sharply in 2009 and then decrease slightly in 2010 and again rose slightly in 2011. The results were similar because
0
0.5
1
1.5
2
2.5
3
3.5
2007 2008 2009 2010 2011
Current Ratio
Current Ratio
0.0000000
0.5000000
1.0000000
1.5000000
2.0000000
2.5000000
2007 2008 2009 2010 2011
Quick Ratio
Quick Ratio

6. inventories didn`t change much but the other factors changed like cash, short term investment. So the results were similar to
current ratio. Its a good sign that this ratio is high but again they are keeping a lot of idle cash.
Cash Ratio
Cash Ratio is an indicator of company's short-term liquidity. It measures the ability to use its cash and cash equivalents to pay
its current financial obligations. The higher the ratio it is good but it normally below 1 because company doesn't want to keep
huge amount of cash as idle.
In 2007 and 2008 the cash ratio was extremely lower in 2009 it increased significantly because current liability were constant
but they came large amount as FDR. In 2010 it increased slightly but in 2011 it fell down heavily because they reduced their FDR
account by large amount.
Net working Capital
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2007 2008 2009 2010 2011
Cash Ratio
Cash Ratio

7. Net working capital indicates how well company manages its short-term debts and uses current assets. Normally the higher the
NWC it is better if it is less than 1 it implies company is facing serious liquidity problem.
After analyzing we found in 2008 the NWC decreases because they took lot of borrowing in 2009 the NWC rose heavily
because they kept lot of cash in their FDR account and made lot of short term investment in 2010 it fell down slightly because
they reduced their short term investment in 2011 it rose slightly despite the fact they reduced their FDR account but at the
same time they increased their investment in short term asset and reduced their current liability. Beximco is always maintaining
a good NWC it experienced a bad time in 2008 but the other remaining years it has done a good job.
Net working capital to total asset
The Working Capital to Total Assets ratio measures a company's ability to cover its short term financial obligations) by
comparing its Total Current Assets to its Total Assets. This ratio can provide some insight as to the liquidity of the company,
0
500,000,000
1,000,000,000
1,500,000,000
2,000,000,000
2,500,000,000
3,000,000,000
3,500,000,000
4,000,000,000
4,500,000,000
5,000,000,000
2007 2008 2009 2010 2011
Net Working Capital
Net Working Capital
-
0.0500000
0.1000000
0.1500000
0.2000000
0.2500000
2007 2008 2009 2010 2011
NWC to TA
NWC to TA

8. since this ratio can uncover the percentage of remaining liquid assets (with Total Current Liabilities subtracted out) compared
to the company's Total Assets.
After analyzing we found out that in 2008 this ratio fell down because company took a lot of short term borrowing in 2009 it
increased significantly as NWC increased due to increase in cash and short term investment in 2010 it reduced slightly and in
2011 it again increased slightly.
Net Working Capital Turnover Ratio
The higher your working capital turnover ratio is, the more efficient you are in using working capital to generate sales, but a
very high working capital turnover ratio can show that a company does not have enough capital to support its sales growth.
The ratio increased dramatically in 2008 but the main reason was not of better efficiency in utilizing working capital
management but because they had lack of current asset it fell down heavily in 2009 because this was their transition period
hence they had huge amount of capital as cash and marketable securities and till 2011 it remained fairly constant. Although this
ratio is very low but it is a not a bad sign because they have huge amount of cash and liquid asset.
Efficiency Ratios
1. Total Asset Turnover Ratio
0
2
4
6
8
10
12
14
16
18
2007 2008 2009 2010 2011
NET WORKING CAPITAL TURNOVER
RATIO
NWC Turnover

9. Asset turnover is a financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue or
sales income to the company. Companies with low profit margins tend to have high asset turnover, while those with high profit
margins have low asset turnover. High asset turnover ratio is considered desirable.
The ratio was dropping in the year 2008 and 2009 in 2008 they purchased lot of fixed asset and in 2009 they invested a lot in
marketable securities hence total assets increased more than net revenue so ratio fell down. But it started increasing from 2010
and 2011 in 2010 there sale increased heavily and they were able to control their interest expense and in 2011 there sales
increased more than their asset which shows that now beximco is better utilizing their asset to generate more revenue.
2. Inventory Turnover
-
0.050000
0.100000
0.150000
0.200000
0.250000
0.300000
0.350000
0.400000
2007 2008 2009 2010 2011
Total Asset Turnover Ratio
Total Asset Turnover
Ratio
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
2007 2008 2009 2010 2011
Inventory Turnover
Inventory Turnover

10. In accounting, the Inventory turnover is a measure of the number of times inventory is sold or used in a time period
such as a year. A high inventory turnover ratio implies either strong sales or ineffective buying .A high inventory
turnover ratio can indicate better liquidity, but it can also indicate a shortage or inadequate inventory levels
The company’s inventory turnover ratio has been increasing in a consistent way over the past 5 years. It is indicating they are
selling their inventory at faster rate. They are increasing their sales at a much faster rate than they are holding inventory
reason is quite simple they have reduced a lot of their holding cost means after getting certain big orders they start buying raw
materials and sometimes they try to take advantage of cash discount. This is a sign of good inventory management.
3. Receivable Turnover
Receivable turnover ratio is an accounting measure used to quantify a firm's effectiveness in extending credit as well as
collecting debts. The receivables turnover ratio is an activity ratio, measuring how efficiently a firm uses its assets. A high
receivables turnover ratio implies either that the company operates on a cash basis or that its extension of credit and collection
of accounts receivable are efficient. Also, a high ratio reflects a short lapse of time between sales and the collection of cash,
while a low number means collection takes longer
The ratio kept increasing for the last 5 years except 2009 because now they changed their credit policy now they operate only
on cash basis and they allow credit to only certain special customers and foreign companies. Hence now they are collecting
their receivable at a faster rate. Means converting their sales to cash at a faster rate. So it is a good sign for them.
4. Payable turnover
6.4
6.6
6.8
7
7.2
7.4
7.6
7.8
8
8.2
2007 2008 2009 2010 2011
Receivable Turnover
Receivable Turnover

11. The accounts payable turnover ratio indicates how many times a company pays off its suppliers during an accounting
period. It measures how a company manages paying its own bills. A higher ratio is generally more favorable as
payables are being paid more quickly. Means we have less liability.
The ratio was within 7 for the trend years except 2009 because at that time their business expanded heavily hence
they had to take some short term financing which increased their liability and hence the ratio fell down to 6 but again
in 2010 they increased this ratio as their business revenue increased and the expansion became more stable and it
also increased slightly which was very close to 8. This is a good sign for them.
5. Days Sales in Inventory
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
2007 2008 2009 2010 2011
Payable Turnover
Payable Turnover
0
50
100
150
200
250
300
350
2007 2008 2009 2010 2011
DIH
DIH

12. Days sales in inventory is a financial measure of company's performance that gives investors an idea of how long it
takes a company to turn its inventory (including goods that are work in progress, if applicable) into sales. Generally,
the lower (shorter) the DSI the better, but it is important to note that the average DSI varies from one industry to
another.
This ratio is constantly falling for the last 5 years it is a good sign because now they are easily converting their
inventory into sales at a much quicker rate. Another observation was that they are constantly increasing their sales at
a much higher rate than they are increasing their inventory, after taking the interview we came to know that after
getting certain big orders they start producing which is why there DIH has reduced and they have introduced lot of
new products which has high demand and so sales are much quicker.
6. Days Sales in Receivable
Days Sales in receivables is a measure of the average number of days that a company takes to collect revenue after a
sale has been made. A low DSO number means that it takes a company fewer days to collect its accounts receivable. A
high DSO number shows that a company is selling its product to customers on credit and taking longer to
collect money.
This ratio is constantly falling for the last 5 years except 2009 means it fell down heavily in 2008 but all of a sudden it
again jumped up in 2009 and from 2010 it is constantly falling down from 2010 and 2011. In 2009 it dramatically
increased because their export sales all of a sudden increased largely and they got many new foreign customers as it
was first time they had to offer some credit hence account receivable increased and in 2010 beximco undestood the
overseas market and started collecting their receivable at a faster rate. As now they offer only on cash basis and offer
credit to only certain loyal customers hence their DSO is falling which is a good sign for them.
7. Days Payable Outstanding
40
42
44
46
48
50
52
54
2007 2008 2009 2010 2011
DSO
DSO

13. Days payable outstanding means the activity ratio that measures how well a business is managing its accounts
payable. The lower the ratio, the quicker the business pays its liabilities. It also shows the average payment terms
granted to a company by its suppliers. The higher the ratio, the better credit terms a company gets from its suppliers.
From a company’s prospective, an increase in DPO is an improvement and a decrease is deterioration.
The ratio fell down in 2008 but suddenly jumped up in 2009 but again fell down heavily in 2010 and in 2011 it
decreased but the amount was very low. As this ratio is falling it is a good sign because they are extending credit
terms from their supplier which is enhancing their liquidity position. The good part is that they are reducing the DPO
very slowly and they don`t have much short term borrowing .
8. Operating Cycle
-
10.00
20.00
30.00
40.00
50.00
60.00
70.00
2007 2008 2009 2010 2011
DPO
DPO
0
50
100
150
200
250
300
350
400
2007 2008 2009 2010 2011
OC
OC

14. The operating cycle is the amount of time it takes for a company to turn cash used to purchase inventory into cash
once again. This number is calculated by adding the age of inventory (the number of days that inventory is held prior
to sale) with the collection period (the number of days required to collect receivables). A company with a short
operating cycle is able to quickly recover its investment. A company with a long operating cycle will have less cash
available to meet any short-term needs, which can result in increased borrowing and interest expense.
Over the past 5 years from 2007-2011, the company kept getting better with their operating cycle and managed to
keep it low. The reason was that they have reduced their DIH and DSO to a larger extent by better inventory
management and collecting their receivable at a faster rate by changing their credit policy .
9. Cash Conversion Period
A metric that expresses the length of time, in days, that it takes for a company to convert resource inputs into cash
flows. The cash conversion cycle attempts to measure the amount of time each net input dollar is tied up in the
production and sales process before it is converted into cash through sales to customers. This metric looks at the
amount of time needed to sell inventory, the amount of time needed to collect receivables and the length of time the
company is afforded to pay its bills without incurring penalties.
The ratio is falling for the last 5 years it is a good sign because they are converting their resources to cash at a much
faster rate. They have done this by reducing their operating cycle through better credit policy and better inventory
management at the same time they have stretched its account payable at a slower rate hence they have better
working capital and less cash tied in inventory and receivable.
10. Fixed Asset Turnover Ratio
-
50.00
100.00
150.00
200.00
250.00
300.00
350.00
2007 2008 2009 2010 2011
CCP
CCP

15. A financial ratio of net sales to fixed assets. The fixed-asset turnover ratio measures a company's ability to generate
net sales from fixed-asset investments - specifically property, plant and equipment (PP&E) - net of depreciation. A
higher fixed-asset turnover ratio shows that the company has been more effective in using the investment in fixed
assets to generate revenues.
The higher the ratio, the better it is for the company. In 2008, company faced a bad time in case of generating net
sales using their fixed assets because at that time they bought lot of new plant and equipment hence fixed asset
increased at a higher rate than sales.. But from 2009 it started to rise in a remarkable way as their sales were
increasing at a very higher rate due to expanding the business.
11. Current Asset Turnover Ratio
Current asset turnover ratio is a ratio that indicates how efficiently a firm is using its current assets to
generate revenue.
0
0.1
0.2
0.3
0.4
0.5
0.6
2007 2008 2009 2010 2011
Fixed Assets Turnover
Fixed Assets Turnover
-
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
2007 2008 2009 2010 2011
Current Assets
Turnover

16. It works almost as same as the previous ratio. But here the company faced a different situation. The company
experienced a peak in 2008, dropped in 2009 and then again struggled getting better in 2010 and 2011. It had a peak
in 2008 because at that time their current asset fell down slightly but their sales incresed but it jumped up in 2009
because at that time they invested heavily on marketable securities and kept lot of cash in FDR account.
Tax Management Efficiency
The tax management efficiency ratio of a fund measures what percentages of a fund’s earnings are lost to taxation. It focuses
on how efficiently management is controlling the effect of tax and reducing the tax. Tax management efficiency ratio reflecting
the use of security gains or losses and other management tools to minimize tax exposure.
This ratio is decreasing for the last 5 years except in 2010. The ratio is decreasing because for the past few years they have
reduced their reliance on debt financing hence EBT increasing at a higher rate so tax expense is increasing in 2010 all of a
sudden their interest expense rose quite high compare to previous years hence EBT was reduce than the expected one. The
ratio range is quite constant between 0.7-0.8 so they are managing their tax in a moderate way.
12. Expense Control Efficiency
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
2007 2008 2009 2010 2011
TME Ratio
TME Ratio

17. The ratio of before-tax income to total revenue as an indicator of how many taka of revenue survive after operating expenses
are removed. It indicates how the operating expenses are being controlled in order to generate more revenue. It also depends
on the effectiveness of the management and the staff of the firm.
This ratio is increasing for the last 5 years it is a very good sign because it shows that they are now able to control their
expenses in a better and efficient way. One reason for this efficiency is that they have reduced debt financing compare to asset
and sales hence interest expense was reduced and their overhead, administrative and marketing expense didn`t increase at
that rate s their revenue rose, hence they are efficiently controlling their expense and this is one of the key reason for thier
phenomenal growth in net income.
Working Capital Ratios
NLB
NLB is the difference between current financial assets(cash, marketable securities) and current financial liability(notes payable,
current maturity of long term debt).This items are not directly related to company`s operating cycle. It only consider those
assets that are primary source of liquidity. The greater the NLB the grater the financial flexibility to meet its WCR. If NLB is
negative means company is completely depended on external financing to meet its working capital requirement.
-
0.05
0.10
0.15
0.20
0.25
2007 2008 2009 2010 2011
ECE Ratio
ECE Ratio
(3,000,000,000.00)
(2,000,000,000.00)
(1,000,000,000.00)
-
1,000,000,000.00
2,000,000,000.00
2007 2008 2009 2010 2011
NLB
NLB

18. It is seen that during 2007 and 2008 the NLB was negative because at that time sales were not expanding at a higher rate so to
meet WCR financed were drawn from NLB, but from 2009 sales were expanding at a higher rate so permanent funding were
required like equity and long term liability so NLB were increasing. In 2009 lot of cash were kept in FDR and made huge
investment in marketable securities. In 2010 it fell down slightly becausethey removed their short term investment in 2011 it
again increased because again they invested in marketable securities but they reduced their idle cash which was a good sign as
they are not sacrificing profitabilty.
The working capital requirement is the minimum amount of resources that a company requires to effectively cover the usual
costs and expenses necessary to operate the business.WCR is the difference between spontaneous assets and spontaneous
liabilities which are needed daily to run the operation. As the company expands its current operating assets such as account
receivable, inventory increases which is counter balanced by increase in current operating liability such a accruals and accounts
payable.
In 2007 and 2008 the WCR remained fairly constant, FROM 2009 TO 2011 IT KEPT ON INCREASING at a constant rate. It shows
that from 2009 the business is expanding a lot hence both current operating assets and current operating liabilities are
increasing, but assets are increasing at a higher rate .In 2007 and 2008 large part of WCR were financed from NLB that`s why
NLB was very low at that time expansion was not that much. But from 2009 it started expand at a higher rate hence permanent
source of funding were required in 2009 they increased their long term liability through issuing preferred shares and in
2010and 2011 they increased their long term liability and issued more new shares.
-
2,000,000,000.00
4,000,000,000.00
6,000,000,000.00
2007 2008 2009 2010 2011
WCR
WCR
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
2007 2008 2009 2010 2011
WCR/Sales Ratio
WCR/Sales Ratio

19. It indicates the firm’s ability to finance additional sales without incurring additional debts. To find the approximate amount of
working capital a company should have, you should look at working capital per dollar of sales. It determines the changes in the
overall usage of cash over time. The working capital requirements has been standardized by dividing it by sales, developing a
working capital requirements to sales ratio, WCR/S. it is statistically different across industry categories, indicating that
industries have significantly different working capital needs. All the other factors being constant, the greater this ratio, the
greater the reliance a company will have on external funds given a change in sales. Thus, the larger the WCR/S ratio, the less
financial flexibility and less liquidity the firm will have, because its operating cycle will require significant investments of funds.
When WCR is negative, the firm’s cash cycle becomes a permanent source of financing and the positive impact on liquidity will
be significant.
As you can see from the graph the ratio is decreasing for the last 5 years which is a good sign means sales is increasing at a
higher rate than working capital required, liquidity position of the company is very strong and has lot of financial flexibility.
Hence for additional sales beximco doesn't need to take any new debt or external financing because their liquidity position is
very strong means they have enough liquid asset. This indicates that there efficiency has increased means they are able to
generate more sales in less amount of working capital.
Cash to current asset ratio shows the portion of current asset held as cash.This ratio provides information about the liquidity
position.As cash is the most liquid current asset,the greater this ratio the more liquid a company will be.
In the above diagram we see that this ratio fluctuates over time. In the year 2008 and 2009 the ratio comes down.Though there
is a increment in 2010 but in 2011 the ratio has fallen even more than the past years.This fluctuation is due to the change in
cash holdings during the respective year.In the year 2008 Beximco’s cash holdings declined resulting in a decrease in cash to
current asset ratio.In 2009 the amount of cash held by them inclined sharply.This pattern continued in 2010.But in 2011 the
cash amount declined while the currernt assets continue to increase.This is because of the increased portion of assets in short
term investments,inventories,supplies and account receivables.So this ratio indicates the lack of liquidity of Beximco
pharmaceuticals in terms of cash holdings.
0
5
10
15
20
25
2007 2008 2009 2010 2011
cash/current asset
cash/current asset

20. This ratio represents the portion of current assets that are held as account recievables.The account receivables are less liquid
than cash as they cannot be converted into cash immediately. Yet it can be an indicator of a company’s financial flexibility and
liquidity position.
The ratio was very high in 2007 and 2008 but it fell down heavily in 2009 because from our analysis they invested huge amount
in marketable securities and they had lot of cash so despite receivable increased but it was very low compare to increase in
current asset and most of the receivable were from export sales because at that time they expanded their business in
international market.
Inventory to current asset ratio shows the portion of current asset held in inventory. Inventory is the least liquid of all other
current assets because it requires a long time to convert them into cash. Thus the smaller the ratio the better liquidity position
for the company.
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
0.2
2007 2008 2009 2010 2011
receivables/current asset
recievables/current
asset
0
0.1
0.2
0.3
0.4
0.5
0.6
2007 2008 2009 2010 2011
inventory/current asset
inventory/current
asset

21. The ratio was very high in 2007 and 2008 almost half of the current asset was occupied by inventory but it fell down heavily in
2009 because in 2009 they invested a huge amount in marketable securities and had lot of cash in FDR account so their current
asset increased heavily and inventory increased only a little margin this can be signified by seeing the change in quick ratio but
in 2010 it increased slightly because took their investment out of marketable securities and their inventory increased slightly
hence inventories proportion to current asset increased in 2011 it remained fairly constant because both their investment in
marketable securities and inventory increased at the same rate.
This ratio also provide information about liquidity. Observing the graph we find that there was a sharp decline in NWC to
current asset ratio during 2008.The reason behind was that the because current liability rose due to increase in short term
borrowings from bank but current asset remained fairly constant resulting net working capital to fall. The opposite occurred in
2009 when the current assets increased in large amount with a decline in current liabilities resulting net working capital to
rise.Thus the ratio was also higher.In 2010 and 2011 though there was no remarkable change in current liabilities but higher
current assets lead to a increase in this ration in 2011 which was smaller in 2010.The incremental current asset is associated
with a large change in investments by Beximco Pharma.
0
10
20
30
40
50
60
70
2007 2008 2009 2010 2011
nwc/current asset
nwc/current asset

22. The ratio shows the amount of NWC that is generated from the company’s cash holdings. The observed pattern is not stable .It
has two peaks in the year 2008 and 2010 respectively.With a lower ratio in 2007,the net working capital declined sharply in
2008 because increase in huge borrowing causing the ratio to rise during this time the cash holdings also declined as a result of
decreased current assets .In contrast in2010 the cash amount increased largely which give a rise to cash to net working capital
ratio. But in 2011 the cash holdings has fallen largely and so has the ratio has also fallen in 2011 but one thing we noticed was
that in 2011 the cash was transferred to marketable securities although this ratio indicates that current situation Beximco
Pharma’s cash holding is not sufficient to provide liquidity but they have enough liquid asset to meet its NWC.
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
2007 2008 2009 2010 2011
cash/nwc
cash/nwc

23. This ratio measures the proportion of creditors in the net working capital. The higher the ratio it is bad because then a
company relies heavily on debt for their operations.
This ratio all of a sudden jumped heavily in 2008 because during that time they took lot short term borrowing on the other
hnd their current asset fell down hence this ratio increased largely but in 2009 it fell down more heavily as they increasd their
investment in current asset through investing in marketable securities and keeping cash in FDR account hence NWC increased
highly but they didn`t increase their borrowing at that rate so the ratio fell down and in the last few years their ratio is quite
constant.
This ratio measures the NWC generated from the most illiquid asset which is inventory. The lower the ratio the better the
liquidity position. This ratio was higher in 2007 but all of a sudden in 2008 it increased heavily means almost 5 times in 2008
0
20
40
60
80
100
120
2007 2008 2009 2010 2011
creaditors/nwc
creaditors/nwc
0
2
4
6
8
2007 2008 2009 2010 2011
inventory/nwc
inventory/nwc

24. because at that time Beximco NWC fell down heavily because of large short term borrowing but inventory was constant. But in
2009 it fell down heavily because their NWC rose due to large investment in marketable securities and large cash in FDR
account and it remained fairly constant till 2011 this is a good sign which implies better liquidity position.
From a lower percentage in 2007, receivables to net working capital ratio as well as inventory to net working capital ratio rose
greately in 2008.These was due to the huge fall in net working capital resulting from the increase in current liabilities.During
this time short time borrowings,long time borrowings,creditors borrowing and most importantly income tax paybles increased
in large proportion.
This ratio measures the NWC generated from account receivable, the lower the ratio the better the liquidity position because if
higher receivable then it means more cash is tied up. The ratio similar to inventory by net working capital means it rose
significantly in 2008 due to increase in huge current liability and dropped significantly in 2009 because of large invetmnet in
marketable securities and FDR and the last 2 years it remained fairly constant.
0
0.5
1
1.5
2
2.5
2007 2008 2009 2010 2011
ar/nwc
ar/nwc

25. The creditors as a percentage of sales show the sales we are generating are from credit
purchases up to what extent. If more sales are there from credit then the working capital
required will be less. This ratio is quite similar to days payable outstanding hence the analysis is described in the DPO
interpretation
This ratio is quite similar to days sales outstanding(DSO) if this ratio decreases liquidity position increases because if we collect
our receivable faster then we receive more cash in our hand. The analysis is described in DSO interpretation
Profitability Ratios
0
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
2007 2008 2009 2010 2011
creditors/sales
creaditors/sales
0.11
0.115
0.12
0.125
0.13
0.135
0.14
0.145
2007 2008 2009 2010 2011
Debtors/Sales
Debtors/Sales

26. Net profit margin is a key financial indicator used to asses the profitability of a company. It is an indicator of how efficient a
company is and how well it controls its costs. The higher the margin is, the more effective the company is in converting
revenue into actual profit.
In increased in 2008 because their sales increased on the other hand they were able to control their expense but it fell down
in 2009 despite their sales were increasing because at that time they incurred huge market and advertising expense but it rose
heavily in 2010 because their sales increased heavily but it fell down slightly in 2011.
.
Return on equity (ROE) is the amount of net income returned as a percentage of shareholders equity. Return on
equity measures a corporation's profitability by revealing how much profit a company generates with the money shareholders
have invested. Potential investors usually look into the ROE to know whether the accounting return on shareholders’
investment is attractive or not.
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
2007 2008 2009 2010 2011
Profit Margin
Profit Margin
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
2007 2008 2009 2010 2011
Return On Equity
Return On Equity

27. The ROE is increasing constantly for the last 5 years this is a very good sign because the net income is constantly increasing
due to higher sales one important mention they are also increasing their equity in this following years specially in 2010 net
income increased heavily but ROE didn`t increase at that rate because they increased their equity at that time by issuing more
preferred shares.
Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets. ROA gives an idea as to how
efficient management is at using its assets to generate earnings
This ratio increased in 2008 but fell down slightly in 2009 despite the fact that net income increased because during that tie
their current asset increased heavily because of investing n marketable securities and higher idle cash. But it jumped highly in
2010 because their net income increase highly during that year because of sudden growth in sales and it increased slightly in
2011.
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
2007 2008 2009 2010 2011
Return on Assets (ROA)
Return on Assets
(ROA)

28. Gross profit margin measures company's manufacturing and distribution efficiency during the production process.
This ratio increased highly in 2008 because their sales increased heavily and they were able to control their production
expenses but it fell down in 2009 because they consumed more raw materials at that time hence production expense rose but
jumped in 2010 because their sales increased heavily at that year but it fell down slightly in 2011 because of more raw
materials were consumed.
Leverage Ratios
Debt to total asset ratio shows a measure of company’s assets financed by debt. The lower the ratio, generally the better off
the company.
From the graph we can see that in 2007 and in 2008 the ratio was considerably low, that is in those years the company didn’t
take much debts against their assets. But again in 2009 it rose pretty high because in 2009 they issues fully convertible
preference shares which were treated as financial liability according to the IAS32 law. It again came down in 2010 because the
preference share were considered as equityand they managed to keep it low in 2011 too. For the past 5 years it is seen that the
42.00%
43.00%
44.00%
45.00%
46.00%
47.00%
48.00%
49.00%
50.00%
51.00%
2007 2008 2009 2010 2011
Gross Profit Margin
Gross Profit Margin
0.00000
0.05000
0.10000
0.15000
0.20000
0.25000
0.30000
0.35000
0.40000
0.45000
0.50000
2007 2008 2009 2010 2011
Debt to Total Asset Ratio
Debt to Total Asset
Ratio

29. company has been doing a great job to keep their debt to asset ratio as lower as possible and it didn’t went higher than 0.45
which is good and they running less financial risks.
The lower the debt to equity ratio, the better is the financial condition of the company. This ratio is mainly found out by
dividing the long term debts by common shareholder’s equity. If the ratio is greater than 1 then it means the majority of the
company’s assets are financed through debts and if lower than 1, it means the assets have mostly been financed through
equity. Like the previous ratio, this ratio has also taken a rise in 2009 but the reason was not because they took higher amount
of debt it was due to preference shares considered as liability and it was almost near to 1, but in other 4 years it was a lot lower
than 1.
The equity multiplier ratio is found out by dividing total assets with stockholder’s equity .The higher the equity multiplier the
higher company depends on debts for financing. So, higher equity multiplier ratio is not good. In the years 2007, 2008, 2010
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
2007 2008 2009 2010 2011
Debt to Total equity Ratio
Debt to Total equity
Ratio
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
2
2007 2008 2009 2010 2011
Equity Multiplier Ratio
Equity Multiplier Ratio

30. and 2011 the company consistently kept this ratio low. But in 2009 it went high because total assets increased a lot from the
year 2008 to 2009 but stockholder’s equity didn’t increase, but the company didn`t took much debt the reason as mentioned
above was due to treating preference shares as liability.
The companies with more long term debt ratios are considered to be more risky as they happen to have more liabilities than
equity. The lesser the ratio, the better it is. Beximco pharma, like their other leverage ratios maintained to keep this ratio low
in 2007,2008,2010 and 2011. But in 2009, it went high because their long term borrowing and deferred tax liabilities went high
because of the reason of preference shares being treated as liability rather than equity.
0.00000
0.05000
0.10000
0.15000
0.20000
0.25000
0.30000
0.35000
0.40000
2007 2008 2009 2010 2011
Long Term Debt Ratio
Long Term Debt Ratio
0.00
1.00
2.00
3.00
4.00
5.00
6.00
2007 2008 2009 2010 2011
Times Interest Earned Ratio
Times Interest Earned
Ratio

31. The Times Interest Earned Ratio is used to measure a company’s ability to meet interest payments on its debt. The ratio
provides an indication to lenders and investors as to whether the company is likely to run into any financial trouble. A high ratio
means that the company’s earnings significantly exceed its interest obligations, so it continues to be able to meet these
obligations. A low ratio puts the company’s ability to meet its debt obligations in question and can forewarn of the possibility of
bankruptcy.
From the graph we can see that the company was not doing that well in 2007, as its operating profits were not that remarkable.
But it started to get better from 2008, rose pretty high in 2009 and faced a sudden fall in 2010 because company paid lot of
their debt. But again managed to take a leap in 2011.
Cash flow ratios
These ratios will measure the ability of the company to operate its daily operations, pay maturing debts and make major
purchases from out of the funds projected from cash flows . This is liquidity based on cash management in as much as major
expenses are incurred only if they have been properly projected through the cash flow statement.
Operating cash flow ratios
A high cash flow solvency ratio indicates the company’s ability to generate funds from operations to settle due and maturing
obligations on time. If this ratio is less than 1 it is bad means to meet its short term obligation company will have to sell their
assets,issue new stock.
The OCF ratio of beximco increased slightly in 2008 but it fell down slightly in 2009 but in 2010 it increased heavily because
sales were increasing and in 2011 it also increased. Although the cash flow solvency ratio is not a good sign but they are
improving day by day.
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
2007 2008 2009 2010 2011
CASH FLOW SOLVENCY RATIOS
OCF Ratio

32. Cash interest coverage ratio
This ratio measures the company's ability to pay of its interest from cash flow generated in the operations it also take interest
and tax with the Net OCF because this amounts are available to pay the interest. The higher the ratio it is better.
In 2008 the ratio increased significantly because their net cash flow increased because their sales increased and they were able
to keep their expenses constant in 2009 there sales increased but expenses increased at a higher rate hence net cash flow fell
down heavily. In 2010 it increased slightly although OCF increased almost 2.5 times because interest also became double in
2011it fell down slightly because expenses increased. This ratio indicates that beximco have enough cash to meet its short term
obligation.
Cash flow margin ratio
It is a measure of the money a company generates from its core operations per dollar of sales. A high operating cash flow
margin can indicate that a company is efficient at converting sales to cash, and may also be an indication of high earnings
quality.
In 2008 it increased significantly because sales were increased but expense remained fairly constant in 2009 it fell down
because the expenses increased at a higher rate than sales in 2010 it increased and in 2011 it fell down slightly.
Cash flow by Total debt ratio
0
1
2
3
4
5
6
2007 2008 2009 2010 2011
Cash Interest Coverage Ratio
Cash Interest Coverage
Ratio
0
0.1
0.2
0.3
0.4
2007 2008 2009 2010 2011
Cash Flow Margin Ratio
Cash Flow Margin Ratio

33. This ratio measures company`s ability to repay its current and future debt from the operating cash flow, the higher the ratio it is
better.
In 2008 this ratio increased largely because sales increased but expenses and debt didn`t increased at that rate but in 2009 it
fell down heavily because their debt increased due t issuance of preference shares and expense increased at a higher rate than
sales but in 2010 it increased dramatically because debt were largely reduced because preferred shares were counted as equity
and sales increased at a much higher rate than expense and in 2011 it increased slightly than the previous year.
Cash current coverage ratio
This ratio is similar to OCF ratio only here we see whether the company has enough cash to meet its current debt after paying
the dividend the ratio also give similar results which is mentioned above in OCF ratio analysis.
Cash Flow to ROA Ratio
0
0.1
0.2
0.3
2007 2008 2009 2010 2011
Cash Flow From Operations/ Total debt
Cash Flow From
Operations/ Total debt
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
2007 2008 2009 2010 2011
Cash Current Debt Coverage Ratio
Cash Current Debt
Coverage Ratio

34. The Cash Return on Assets measures the Cash Flow from Operations in relation to Total Assets. Cash Return on Assets basically
shows how well (or how poorly) the company is generating cash from its asset investments. Similar to Return on Total Assets,
the company hopes to generate as much revenue as possible from its assets.
This ratio increased in 2008 but fell down heavily in 2009 again it rose highly in 2010 but fell down slightly in 2011. It increased
when sales increased at a higher rate than expenses and decreased when the opposite happen. In all those years the assets
were increasing.
Market value ratios
Earning per share or EPS is considered as an indicator for choosing the stocks for investment. On the basis of the EPS it is
determined what is the earning of the company per share. Higher EPS indicates company is earning more per share.
The Eps of beximco kept increasing from 2007 to 2010 but it fell down slightly in 2011. In 2008 the jump was higher because net
income increase highly in 2010 the net income increased heavily but they issued more number of shares hence EPS didn`t rose
that much in 2011 EPS fell down although net income increased but they again issued more shares.
0
0.02
0.04
0.06
0.08
0.1
0.12
2007 2008 2009 2010 2011
Cash Return on Assets
Cash Flow to ROA
Ratio
0
1
2
3
4
5
6
2007 2008 2009 2010 2011
Earnings Per Share
Earnings Per Share

35. PE Ratio
The price to earnings ratio (PE Ratio) is the measure of the share price relative to the annual net income earned by the firm per
share. PE ratio shows current investor demand for a company share. A high PE ratio generally indicates increased demand
because investors anticipate earnings growth in the future.
We can see that PE ratio increased significantly in 2008 because market price increased heavily during that time but in 2009 it
remained fairly constant because price and eps both remained fairly same. IT is falling from 2010 because market price is falling
as general index i Bangladesh Capital market is falling heavily, so it is not now under their control.
Book value per share
This ratio calculates the the per share value of a company based on its equity available to shareholders.
It increased in 2008 because they increased their equity it fell down in 2009 because they issued more number of shares it
increased in 2010 and fell down in 2011 because again they issued more shares.
Market to Book ratio
BDT 0.00
BDT 10.00
BDT 20.00
BDT 30.00
BDT 40.00
BDT 50.00
2007 2008 2009 2010 2011
PE
PE
0
20
40
60
80
100
2007 2008 2009 2010 2011
Book Value Per share
Book Value Per share

36. The price-to-book ratio indicates whether or not a company's asset value is comparable to the market price of its stock. For this
reason, it can be useful for finding value stocks. It is especially useful when valuing companies that are composed of
mostly liquid assets, such as finance, investment, insurance, and banking firms.
The market to book value kept on increasing till 2009 because during that time the stock market was a lucrative place to invest
so prices were increasing at a higher rate than equity were increasing but in the last 2 years stock market collapsed hence price
fell down so ratio is falling.
Bankruptcy prediction
This ratio is used to know the future financial condition of the company. It is used to predict the probability that whether a
company can go bankrupt within 2 years. The Z-Score can be characterized as a linear combination of 4-5 common business
ratios. These ratios are weighted by coefficients which are estimated to determine that whether a company can face any
bankruptcy within years
0
0.5
1
1.5
2
2.5
2007 2008 2009 2010 2011
Market to Book Ratio
Market to Book Ratio
-
0.50
1.00
1.50
2.00
2.50
2007 2008 2009 2010 2011
Z*
Z*

37. As Z* of the firm is increasing means the financial condition of the firm is increasing It was constant in 2008 means it was in
grey zone but in 2009 it fell down heavily and was now in the distress zone because asset turnover ratio fell down hence they
were not utilizing their asset properly to generate more revenue and their liability increased compare to equity but the
condition was not that serious because they issued large number of preferred shares which were treated as liability. So the
company financial condition which was not that bad as it seemed in the Z score(1.12) But in 2010 increased sharply because
they increased the preferred shares were now treated as equity and their asset turnover ratio increased in 2011 it again
increased slightly. This shows that company is improving its financial condition and trying to enter the safe zone.
INDUSTRY COMPARISON
To know how well beximco is performing in its respective industry and to calculate the industry average we have compared
beximco`s liquidity, profitability and efficiency ratios with their main competitors Square Pharmaceuticals, Glaxo Smith Kline
and Reneta Pharmaceuticals.
The liquidity position of Beximco is better than other companies which is justified by their higher current ratio. Its liquidity
position was always higher than square and reneta, but Glaxo liquidity position was better than them for the past 4 years but in
2011 it deterioted and beximco`s liquidity increased hence it now slightly edges glaxo in terms of liquidity. Its way higher than
the industry average, hence liquidity position is quite good.
Its working capital requirement is quite higher compare to the industry average the main reason is that they are always trying
to expand their business so they needed more working capital to run their operations. It is always higher than glaxo and reneta
but it was higher than square till 2009 but from 2010 square WCR became higher than beximco.
0
2
4
6
8
10
12
2006 2007 2008 2009 2010 2011 2012
Current Ratio
Beximco Current Ratio
Renata Current Ratio
Glaxo Current Ratio
Square Current Ratio
-
1,000,000,000.00
2,000,000,000.00
3,000,000,000.00
4,000,000,000.00
5,000,000,000.00
6,000,000,000.00
7,000,000,000.00
2006.520072007.520082008.520092009.520102010.520112011.5
WCR
Beximco WCR
Renata WCR
Glaxo WCR
Square WCR
Square WCR

38. The profitability condition of beximco is quite moderate although its net profit margin ratio is quite high but is only slightly
better than the indusrty average. The justification we can give over here for the sake of liquidity they are sacrificing some part
of their profitability to reduce their risk exposure.Glaxo profit margin is quite low compare to other companies,But in the last 5
years Reneta and suare profitability is better than Beximco. Square net income is much higher,but Reneta net income is lower
than Beximco but they are controlling their expenses more efficiently,hence profitability is higher. ITs net profit margin is
better than industry average but their competitors profitbility condition is slightly better than them.
The operating cycle of Beximco is the highest in the industry and is also higher than the industry average, it indicates that their
efficiency is the weakest aming all. For the last 5 years it is in a decreasing but still lacking behind others. The reason is that
beximco is taking more time to convert their inventory into sales and collecting their receivable quite slower comapre to its
peers. In the recent trend only reneta`s efficiency is deterioting is becoming closer to beximco`s condition , square and glaxo
condition is much muc better than beximco.
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2006 2007 2008 2009 2010 2011 2012
Net Profit Margin
Beximco Net Profit
Margin
Renata Net Profit
Margin
Glaxo Net Profit
Margin
Square Net Profit
Margin
Square Net Profit
Margin
0
50
100
150
200
250
300
350
400
450
0 1 2 3 4 5 6 7
OC
Beximco
Renata
Glaxo
Square

39. The cashconversion peroiod also gives similar results like operating cycle that the ratio is decreasing but still well below than
the industry average It indicates beximco is taking more ime to convert their resource into cashflows One thing we noticed was
that the DPO of all the companies are quite same hence OC and CCP gives almost similar chart. As beximcomis taking longer
time to collet their receivables and convert their inventory into sales thna others. Hence its CCP is quite higher compare to its
competitiors Square and Glaxo are way awy ahead than them only Reneta`s condition is quite similar to them in the recent
time
Performance Analysis
Ratios Condition Reason
Liquidity Good Current and other ratios are higher than
industry average and most other
companies
Efficiency Bad Higher CCP and Higher DIH and DSO
than the industry average so take more
time to convert resources to cash
Profitability Moderate Slightly higher than industry average but
square and reneta net profit margin is
slightly higher
Leverage Good Less reliance on debt financing
Market value ratios Moderate EPS and market to book ratios are not
that high
Working Capital Ratios Good They have more investment in liquid
asset than illiquid asset
Cash Flow ratios Bad Lower cash are generating from
operations and less cash are converting
from revenue
Bankruptcy Moderate As its value lie in the grey zone
Recommendations
They should sell their inventory at a more faster rate this will reduce the DIH and as they are keeping the inventory
for a longer period in their it is also increasing their holding cost. Although they have reduced the DIH they should
try even more to reduce it because their competitors sell inventory at a faster and more number of times a year
compare to them
They should collect their receivable at a faster rate because their competitors collect it much more faster than
them hence lot of their cash are blocked on receivable.
-
50.00
100.00
150.00
200.00
250.00
300.00
350.00
2006.5 2007 2007.5 2008 2008.5 2009 2009.5 2010 2010.5 2011 2011.5
CCP
Beximco CCP
Renata CCP
Glaxo CCP
Square CCP

40. They should stretch their DPO without hampering their image this will help them to reduce their cash conversion
period and they will be able to convert resource into cash flow at faster rate
The higher current ratio than standard indicates they are blocking additional amount of money on current asset
than required means they are sacrificing a lot of profitability
The cash flows should be managed more efficiently so that they can generate more cash from the revenue
They should manage their marketing expense more efficiently for better profit margin
Z score should be improved to enter in safe zone this can be done by controlling or reducing the marketing and
distribution expense this will increase the EBIT and also the net profit margin, this will help us to increase the Z
score