Performance analysis of working capital management of “pharmaceuticals industry”

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Published on March 8, 2014

Author: fayshalhossanmiazy

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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 Southeast University 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 Southeast University Subject: Submission of term paper on Performance Analysis of Working Capital Management of “Pharmaceuticals Industry”. Dear Sir, With due respect, we are submitting this term paper on Performance Analysis of Working Capital Management of “Pharmaceuticals Industry”. We took help from our course teacher Khairul Alom, from internet and used our creativity. This proposal is only for academic purpose. This is not at all for regular activities. I therefore, request your favor to accept our term paper. Yours Sincerely -----------------------------Md Fayshal Hossan Miazy (On behalf of the group member) 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 6.4 Beximco Pharmaceuticals Ltd. 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. Page 8 of 166

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. Page 9 of 166

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. Page 10 of 166

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. Page 11 of 166

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. Page 12 of 166

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 pharma- ceutical company, with a balanced focus in complementary therapeutic areas. Our primary responsibility lies towards people of Bangladesh & ultimate responsibility towards huminity at large. Major Products & Services: Sl.No. Product Name Generic Name 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

4.4 Beximco Pharmaceuticals Ltd. Beximco Pharmaceuticals Ltd (BPL) is a leading manufacturer of pharmaceutical formulations and Active Pharmaceutical Ingredients (APIs) in Bangladesh. The company is the largest exporter of pharmaceuticals in the country and its state-of-the-art manufacturing facilities are certified by global regulatory bodies of Australia, European Union, Gulf nations, Brazil, among others. The company is consistently building upon its portfolio and currently producing more than 400 products in different dosage forms covering broader therapeutic categories which include antibiotics, antihypertensive, ant diabetics, antireretrovirals, anti asthma inhalers etc, among many others. Beximco Pharmaceuticals Ltd (Beximco Pharma) belongs to the largest business conglomerate in Bangladesh, the BEXIMCO group. Beximco Pharma is engaged in manufacturing both finished formulations and active pharmaceutical ingredients (APIs). The company was incorporated in 1976 and commenced operations in 1980 with the manufacturing and marketing of products of Bayer AG, Germany and Upjohn Inc., USA under licensing arrangements. In 1983, the company started manufacturing its own formulations and it launched export operation in 1992. In 2002 Beximco Infusions Ltd, the company that produces intravenous fluids was amalgamated with the parent company. Today Beximco Pharma is the largest exporter of pharmaceuticals in the country and the only company to win National Export Trophy (Gold), the highest national accolade for export, for record three times. Company’s state-of-the-art manufacturing facilities are certified by major regulatory bodies. As a public limited company, its shares are actively traded in Dhaka Stock Exchange and Chittagong Stock Exchange, and Beximco Pharma is the only company in the country which got listed on AIM of London Stock Exchange. The company produces formulations of key therapeutic areas which include 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

Long Term Solvency Ratio or Debt Management Ratios 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

Asset Management or Turnover Ratio 1. Inventory Turnover: Year 2011 2010 2009 2008 2007 Inventory Turnover 3.031 2.973 2.703 2.396 2.764 Analysis: In this ratio, we show that the inventory turnover separately on 2007 is 2.764, on 2008 is 2.396, on 2009 is 2.703, on 2010 is 2.973 and on 2011 is 3.030.We can see that 2011 is biggest turnover inventory than other years. So that inventory turnover on 2011 takes 3.03 times. 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 Short-Term Solvency or Liquidity Ratio 01 Current Ratio Current Asset/Current Liabilities 1.031 0.946 0.730 0.832 0.694 02 Quick Ratio Quick Asset/ Current Liabilities 0.740 0.687 0.528 0.605 0.423 03 Cash Ratio Cash/ Current Liabilities 0.353 0.308 0.248 0.306 0.158 04 Net Working Capital-Total Asset Net Working Capital/ Total Asset 0.013 -0.022 -0.138 -0.087 -0.178 Long Term Solvency Ratio or Debt Management Ratios 01 Total Debt Ratio Total Debt/ Total Asset 0.526 0.570 0.643 0.633 0.617 02 Debt Equity Ratio Total Debt / Total Equity 1.110 1.328 1.804 1.722 1.355 03 Equity Multiplier Total Asset / Total Equity 2.110 2.328 2.804 2.722 2.198 12.622 10.874 8.653 Asset Management or Turnover Ratio 01 Inventory Turnover Cost of Goods Sold / Inventory 02 Days Sales in Inventory 360/ Inventory Turnover 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 Net Income/ Net Sales 0.040 0.037 0.039 0.041 0.035 02 Return on assets (ROA) Net Income/ Total Assets 0.102 0.096 0.082 0.084 0.076 03 Return on equity (ROE) Net income/ Total equity 0.215 0.224 0.229 0.229 0.166 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

Time Series Analysis Short Term Solvency or Liquidity Ratio 1. Current Ratio: Year 2011 2010 2009 2008 2007 Current Ratio 1.031 0.946 0.730 0.832 0.694 Analysis: In this ratio, we can analysis that the ratio has increased from 2007 to 2011 few times in Ibn Sina pharmaceutical company. So Current Ratio of 2011 is better than others years. In 2011, Current Ratio is 1.031. But 2007 current ratio is 0.694 which is lower than previous years. 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. Net Working Capital-Total Asset: Year 2011 2010 2009 2008 2007 Net Working Capital-Total Asset 0.0130 -0.0222 -0.1380 -0.0867 -0.1781 Net Working Capital-Total Asset in % 1.30% -2.22% -13.80% -8.67% -17.81% Analysis: In this ratio, we can analysis that the net working capital-total ratio has decreased from 2011 to 2007 which is respectively1.30%, -2.22%, -13.80%, -8.67%, -17.81%. We can see that net working capital is constantly decreasing from 2007 to 2011. In 2011, net working capital is better than other years. Page 59 of 166

Long Term Solvency Ratio or Debt Management Ratios 1. Total Debt Ratio: Year Total Debt Ratio Total Debt Ratio in % 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

2. Debt Equity Ratio: Year 2011 2010 2009 2008 2007 Debt Equity Ratio 1.1103 1.3280 1.8044 1.7224 1.3552 Debt Equity Ratio in % 111.03 132.80 180.44 172.24 135.52 Analysis: In this ratio, we can analysis that the Debt equity ratio on 2009 (180.44%) is more than from 2007 to 2011. The lowest total debt equity ratio on 2010 is 132.80%. The total debt equity ratio on 2009 is 180.44%. Page 62 of 166

3. Equity Multiplier: Year 2011 2010 2009 2008 2007 Equity Multiplier 2.110 2.328 2.804 2.722 2.198 Analysis: In this ratio, we can analysis that the equity multiplier has increased in 2009 more than from 2007 to 2010. Equity Multiplier on 2009 is 2.804 times. Page 63 of 166

Asset Management or Turnover Ratio 1. Inventory Turnover: 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

2. Days Sales in Inventory: Year Days Sales in Inventory 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

3. Receivable Turnover: 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

4. Days in Receivable: 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

5. Fixed Asset Turnover: Year 2011 2010 2009 2008 2007 Fixed Asset Turnover 4.40 4.19 3.37 3.59 3.57 Analysis: in this ratio, we see that the Fixed assets turnover is 3.57 at the end of year 2007 which is higher between the 2009. So the fixed asset turnover at the end of year 2011 is standard position. Fixed assets turnoverin 2011 is 4.40 times. Page 68 of 166

6. Total Asset Turnover: Year 2011 2010 2009 2008 2007 Total Asset Turnover 2.53 2.57 2.12 2.05 2.13 Analysis: In this ratio, we show that the total asset turnover is best of 2.56 of 2010 year to compare with other years. Page 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

2. Return on assets (ROA): Year Return on assets (ROA) 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

3. Return on equity (ROE): Year 2011 2010 2009 2008 2007 Return on equity (ROE) 0.2154 0.2235 0.2286 0.2294 0.1661 Return on equity (ROE) in % 21.54% 22.35% 22.86% 22.94% 16.61% Analysis: In this analysis, we see that the return on equity has 21.54% in the year 2011, 22.35% in the year 2010, 22.86% in the year 2009, 22.94% in the year 2008 and 16.61% in the 2007. So we view that the return on equity is 22.94% in the year of 2008 is the best than others. Page 72 of 166

Market value Ratio 1. Earnings per Share(EPS): Year 2011 2010 2009 2008 2007 Earnings per Share(EPS) 5.46 4.64 54.7 48.09 31.19 Analysis: In this ratio, we can show that earning per share ratio has decreased few times from 2009 to 2011years but best in year 2009. Because of in 2009 year the net income has increased at a fewer rate than from other years. Page 73 of 166

2. Book Value per Share: Year 2011 2010 2009 2008 2007 Book Value Per Share 25.34 20.76 239.33 209.62 187.76 Analysis: In this ratio, we see that the Book Value per Share has increased in the 2009 year which is so healthy position for the company. Here the book value per share is Tk.239.33. 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 Short-Term Solvency or Liquidity Ratio 01 Current Ratio Current Asset/Current Liabilities 1.022 1.002 0.999 0.985 0.996 02 Quick Ratio Quick Asset/ Current Liabilities 0.481 0.489 0.427 0.373 0.536 03 Cash Ratio Cash/ Current Liabilities 0.009 0.009 0.027 0.023 0.002 04 Net Working Capital-Total Asset Net Working Capital/ Total Asset 0.807 0.805 4.113 0.783 0.794 Long Term Solvency Ratio or Debt Management Ratios 01 Total Debt Ratio Total Debt/ Total Asset 0.790 0.798 4.117 0.834 0.833 02 Debt Equity Ratio Total Debt / Total Equity 4.427 4.685 4.902 5.009 4.985 03 Equity Multiplier Total Asset / Total Equity 5.604 5.869 1.191 6.009 5.985 0.858 0.757 1.858 Asset Management or Turnover Ratio 01 Inventory Turnover Cost of Goods Sold / Inventory 02 Days Sales in Inventory 360/ Inventory Turnover 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 Net Income/ Net Sales 0.028 0.027 0.027 0.026 0.022 02 ROA Net Income/ Total Assets 0.027 0.026 0.122 0.022 0.027 03 ROE Net income/ Total equity 0.151 0.151 0.145 0.135 0.160 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

Time Series Analysis Short-Term Solvency or Liquidity Ratio 1. Current Ratio: Year Current Ratio 2011 1.022 2010 1.002 2009 0.999 2008 0.985 2007 0.996 Analysis: In this ratio, we can analysis that the ratio has increased from 2007 to 2011 few times in Ambee pharmaceutical company. So Current Ratio of 2011 is better than others years. In 2011, Current Ratio is 1.022. But 2007 current ratio is 0.986 which is lower than previous years. 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 81 of 166

Analysis: In this ratio, we can analysis that the cash ratio has only increased in 2009 which is higher than from 2007, 2008, 2010 and 2011. The cash ratio on 2009 is 2.60%. And on 2007 is poorest ratio than other years. Page 82 of 166

4. Net Working Capital-Total Asset: Year 2011 2010 2009 2008 2007 0.017 0.001 -0.004 -0.012 -0.003 1.73% Net Working Capital-Total Asset 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 1. Total Debt Ratio: Year Total Debt Ratio Total Debt Ratio in % 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

2. Debt Equity Ratio: 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%

Analysis: In this ratio, we can analysis that the debt equity ratio has increased in 2008 and more than from 2007 to 2011. The lowest total debt equity ratio on 2011 is 442.72%. The total debt equity ratio on 2008 is 500.90%. Page 86 of 166

3. Equity Multiplier: Year 2011 2010 2009 2008 2007 Equity Multiplier 5.604 5.870 1.191 6.009 5.985 Analysis: In this ratio, we can analysis that the equity multiplier has increased in 2008 more than other years. Equity Multiplier on 2008 is 6.01 times. Page 87 of 166

Asset Management or Turnover Ratio 1. Inventory Turnover: Year 2011 2010 2009 2008 2007 Inventory Turnover 1.031 1.064 0.858 0.757 1.858 Analysis: In this ratio, we can analysis that the inventory turnover separately on 2007 is 1.031, on 2008 is 1.064, on 2009 is 0.858, on 2010 is 0.757 and on 2011 is 1.858. We can see that 2007 is biggest turnover inventory than other years. So that inventory turnover on 2007 takes 1.858 times. Page 88 of 166

2. Days Sales in Inventory: Year Days Sales in Inventory 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

3. Receivable Turnover: Year 2011 2010 2009 2008 2007 Receivable Turnover 5.854 6.021 7.172 6.301 3.932 Analysis: In this ratio, we can analysis that the ratio of receivable turnover has increased in 2009 which compare in more than from 2007 to 2011. On 2009, the receivable turnover of Ambee pharmaceuticals ltd. takes 7.172 times. Page 90 of 166

4. Days in Receivable: 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

5. Fixed Asset Turnover: Year 2011 2010 2009 2008 2007 Fixed Asset Turnover 4.985 4.676 4.478 3.965 5.865 Analysis: In this ratio, we can analysis that the result of fixed assets turnover for Ambee Pharmaceuticals ltd has increased in 2007 which compare in more than from 2007 to 2011. On 2007, the fixed assets turnover of Ambee pharmaceuticals ltd. takes 5.865 times. Page 92 of 166

6. Total Asset Turnover: Year 2011 2010 2009 2008 2007 Total Asset Turnover 0.961 0.937 4.494 0.861 1.208 Analysis: In this ratio, we can analysis that the result of total assets turnover for Ambee Pharmaceuticals ltd has only increased in 2009 which compare in more than from 2007 to 2011. On 2009, the total assets turnover of Ambee pharmaceuticals ltd. takes 4.494 times. Page 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 Pharma

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