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Report on

“Corporate Governance Practices on Pharmaceutical

Companies in Bangladesh Listed In DSE”

Prepared By: Ashif Nawaz

Session: 2011-2012

Faculty of Business Administration and Management

Patuakhali Science and Technology University

Submitted to: Debashis Dutta

Assistant Professor;

Department of Finance and Banking

Faculty of Business Administration and Management

Patuakhali Science and Technology University

A Report Presented for the Partial Fulfillment for the Requirements for the

Course title: Financial Management

Course code: FBK 313

In Bachelor of Business Administration

Submission Date: 10, June, 2014

Faculty of Business Administration and Management

Patuakhali Science and Technology University

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Chapter One: Introduction

Chapter Two: Theoretical Discussion

Chapter Three: Organizational Overview

1 Acknowledgement I

2 Progress Report II

3 Evaluation Details III

4 Letter of Authorization IV

5 Contents V-VI

6 List of Tables VII

7 List of Graphs VII

SERIAL NO SUBJECT PAGE NO

1.1 Abstract 2

1.2 Objective of the Report 3

1.3 Methodology of the Report 4

2.1 Ratio Analysis 6

2.2 Leverage Ratios 7

2.3 Efficiency Ratios 7-8

2.4 Capital Structure Analysis Ratios 8-9

2.5 Vertical Analysis 9

3.1 ACI Limited: 11

3.2 Ambee Pharmaceuticals Limited: 11

3.3 Beximco: 11

3.4 Glaxo Smithkline: 11

3.5 Renata Limited: 12

3.6 IBN SINA Pharmaceutical Limited: 12

Contents

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Chapter Four: Analytical Discussion

Chapter Five: Conclusion

3.1 Conclusion 27

* References 28

3.7 Libra Infusions: 12

3.8 Orion Infusion: 12

3.9 Square Pharmaceuticals Limited: 13

3.10 Pharma Aids Limited: 13

4.1 Degree of Financial Leverage (DFL) 19

4.2 Working Capital 20

4.3 Current Ratio 21

4.4 Acid-Test Ratio 22

4.5 Debt Ratio 23

4.6 Gross Profit Margin 24

4.7 Time Interest Earned Ratio 25

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List of Tables A List of tables used in this report is given below:

1. Financial Highlights of ACI Limited

2. Financial Highlights of Ambee Pharmaceuticals Limited

3. Financial Highlights of Beximco

4. Financial Highlights of Glaxo Smithkline:

5. Financial Highlights of Renata

6. Financial Highlights of IBN SINA Pharmaceutical Limited

7. Financial Highlights of Libra Infusion

8. Financial Highlights of Pharma Aids Limited

9. Financial Highlights of Orion Infusion:

10. Financial Highlights of Square Pharmaceuticals Limited

11. Degree of Financial Leverage (DFL)

12. Working Capital

13. Current Ratio

14. Acid-Test Ratio

15. Debt Ratio

16. Gross Profit Margin

17. Time Interest Earned Ratio

List of Graphs 1. Degree of Financial Leverage (DFL)

2. Working Capital

3. Current Ratio

4. Acid-Test Ratio

5. Debt Ratio

6. Gross Profit Margin

7. Time Interest Earned Ratio

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Chapter One: Introduction

Outline:

1.1 Abstract

1.2 Objective of the Report

1.3 Methodology of the Study

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1.1 Abstract:

In this report we have discussed about the 5 years capital structure of 10 companies and

compare the ratios of these companies to industry average. For this reason at first we

have found out the degree of leverage because it helped to show the effect of financing

the firm with debt versus common stock and the joint effect of operating and financial

leverage on EPS.

To find out the leverage we analyzed the sales, EBIT, number of shares outstanding of

these companies. Then we have found out the 5 years TIE and Debt ratios of these

companies. These ratios are used to compare the industry average. 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.

At last we have analyzed the signaling of these companies to know the favorable or

unfavorable situations of these companies. This report is very essential for investors to

know which company is profitable or not for investment because this report evaluates

financial position of a company.

Keyword:

Ratio Analysis, Liquidity Ratios, Profitability Ratios, Leverage Ratios, Efficiency Ratios,

Working Capital,

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1.2 Objective of the Report:

Every work has some distinctive objectives. We also started the preparation of this report

with some important and distinct objective to fulfill.

As objective is the main overlooking part of a report, we set the following of object that

will likely be a reflection of our report to understand.

(1) To know and evaluate the 5 years capital structure of 10 companies listed in DSE.

(2) To know degree of leverage (operating and financial leverage) of these

companies.

(3) To know 5 years TIE and Debt ratios of these companies.

(4) To find out the 5 years average ratios of these companies.

(5) To find out the 5 years industrial average by the ratios of these companies.

(6) To compare the average ratios of individual company to industrial average.

(7) To know the signaling (favorable or unfavorable situations) of these companies.

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1.3 Methodology of the Study:

Designing Report Plan

For our program requirement, we were assigned to make this report. Being assigned we

thought how could we make an effective report. We plan the way in which we can get

practical, authentic, reliable information. We also plan the way of interpreting this

information in a meaningful way to make the report effective and efficient.

Information Source

For preparing this paper, we used both Secondary and Primary data.

Collection of Primary Data:

Many of the data and information were collected from our practical experience and face

to face conversation with employees of DSE.

Collection of Secondary Data:

Data regarding the “An insight of capital structure of 10 listed pharmaceuticals

companies in DSE” were collected from secondary sources like: Annual Reports of this

companies, DSE Library, and Newspaper etc. The collected data has been analyzed by

using different tables & graphs. The major source of secondary data is Annual Reports.

Information Analysis

The most important task was to analyze and interpret the collected primary and secondary

data. We analyze those data from many angles, in different aspect based on our

experience.

Interpretation of data

After analyze the data we have tried to present the information in different segment

according to their category, in compact way. We highlight different important thing,

which we find during the preparation of this report.

Preparation of Report

After doing the above stage we have prepared this report.

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Chapter Two: Theoretical Discussion

Outline:

2.1 Ratio Analysis

2.2 Leverage Ratios

2.3 Efficiency Ratios

2.4 Capital Structure Analysis Ratios

2.5 Vertical Analysis

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2.1 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. Ratios can be expressed as a decimal value, such as 0.10,

or given as an equivalent percent value, such as 10%. Some ratios are usually quoted as

percentages, especially ratios that are usually or always less than 1, such as earnings

yield, while others are usually quoted as decimal numbers, especially ratios that are

usually more than 1, such as P/E ratio; these latter are also called multiples.0ut of various

financial ratios available, we've chosen 19 in measurements that are the most important

and relevant to the investing process and categorized them into 6 main categories which

these are given below:

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2.2 Leverage Ratios

1. Debt to Assets Ratio

Debt to total assets ratio measures the percentage of the total assets that creditors provide.

We compute it by dividing total debt by total assets. This ratio indicates the company’s

degree leverage.

Debt to total asset ratio=

2.3 Efficiency Ratios

1. Receivable Turnover Ratio

The ratio used to assess the liquidity of the receivables turn over. It measures the number

of times on average, the company collects receivables during the period .we compute

receivables turnover by dividing net credit sales by the average net receivables unless

seasonal factors are significant ,average net receivables can be computed from the

begging & the ending balances of the net receivables.

Net Credit Sales / Average Net Receivables

2. Average Collection Period

The approximate amount of time it takes for a business to receive payments owed, in

terms of receivable from its customer and client.

Calculated as:

Average Collection Period=

Days = Total amount of days in period

AR = Average amount of accounts receivables Credit Sales = Total amount of net credit

sales during period

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3. Inventory Turnover

Measures the number of times on average, the inventory is sold during the period. Its

purpose is to measure the liquidity of the inventory. We compute the inventory turnover

by dividing cost of goods sold by the average inventory.

Inventory Turnover=

4. Average Sales Period

Measures how many days, on average it takes to sell the entire inventory.

Average sales period= 365 Days / Inventory turnover

2.4 Capital Structure Analysis Ratios

1. The Debt to Equity Ratio

Debt-to-Equity ratio indicates the relationship between the external equities or outsiders

funds and the internal equities or shareholders’ funds. It is also known as external

internal equity ratio. It is determined to ascertain soundness of the long term financial

policies of the company.

Following formula is used to calculate debt to equity ratio:

Debt Equity Ratio = External Equities / Internal Equities or

Outsider’s funds / Shareholders funds

As a long term financial ratio it may be calculated as follows:

Total Long Term Debts / Total Long Term Funds Or

Total Long Term Debts / Shareholders Funds

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2. The Interest Coverage Ratio

The interest coverage ratio is used to determine how easily a company can pay interest

expenses on outstanding debt. The ratio is calculated by dividing a company's earnings

before interest and taxes (EBIT) by the company's interest expenses for the same period.

The lower the ratio, the more the company is burdened by debt expense.

Earnings before interest and taxes / Interest Expense

3. Retention Rate

The percent of earnings credited to retained earnings. In other words, the proportion of

net income that is not paid out as dividends

(Net income-Dividends) / Net Income

2.5 Vertical Analysis:

A method of financial statement analysis in which each entry for each of the three major

categories of accounts (assets, liabilities and equities) in a balance sheet is represented as

a proportion of the total account. The main advantages of vertical analysis are that the

balance sheets of businesses of all sizes can easily be compared. It also makes it easy to

see relative annual changes within one business.

Vertical analysis is the procedure of preparing and presenting common size statements.

Common size statement is one that shows the items appearing on it in percentage form as

well as in dollar form. Each item is stated as a percentage of some total of which that

item is a part. Key financial changes and trends can be highlighted by the use of common

size statements.

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Chapter Three: Organizational Overview Outline:

3.1 ACI Limited:

3.2 Ambee Pharmaceuticals Limited:

3.3 Beximco:

3.4 Glaxo Smithkline:

3.5 Renata Limited:

3.6 IBN SINA Pharmaceutical Limited:

3.7 Libra Infusions:

3.8 Orion Infusion:

3.9 Square Pharmaceuticals Limited:

3.10 Pharma Aids Limited:

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3.1 ACI Limited:

In 1973 the UK based multinational pharmaceutical company. ICI pls established a

subsidiary in Dhaka known as ICI Bangladesh manufacturers in 1992, ICI pls divested its

share to local management and the company was renamed Advanced chemical Industry

ACI Ltd.

3.2 Ambee Pharmaceuticals Limited:

Ambee Pharmaceuticals Ltd., a fast growing company 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 modest 17 joint ventured products and is now running in full swing with

76 products. The company maintains four outside Depots located at Khulna, Bogra,

Chittagong and Sylhet besides its National Distribution Cell in Dhaka.

3.3 Beximco Pharmaceuticals Limited:

Beximco Pharmaceuticals Ltd also known as Beximco Pharma is a pharmaceutical

company in Bangladesh. It is part of the Beximco Group of Companies. Beximco Pharma

was founded in 1976 and started operations in 1980. It has now grown to become a

leading pharmaceutical company in Bangladesh and its supplies more than 10% of

country’s total medicinal needs.

3.4 Glaxo Smithkline Limited:

GlaxoSmithKline started operations on 1 January 2001 following the merger of Glaxo

Wellcome plc and SmithKline Beecham plc. The company has a primary listing on the

London Stock Exchange. As of 2 May 2014 it had a market capitalisation of £79 billion,

the fourth-largest of any company listed on the London Stock Exchange.[4]

It has a

secondary listing on the New York Stock Exchange. Andrew Witty has been the chief

executive officer since May 2008

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3.5 Renata Limited:

Renata limited also known as Renata. It is one of the top ten pharmaceutical

manufactures 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.

Its head office Mirpur, Dhaka.

3.6 IBN SINA Pharmaceutical Limited:

IBN SINA pharmaceutical was established 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

3.7 Libra Infusions Limited:

Libra Infusions Limited (former Libra Pharmaceuticals Ltd) was incorporated on 2

January 1976 as a private limited company and was converted into a public limited

company in 1994. The company is engaged in manufacturing and marketing of life

saving injections namely intravenous (I.V.) fluids of different quality/grades.

3.8 Orion Infusion Limited:

Orion Pharma a member of Orion Group was founded as a pharmaceutical manufacturing

company in 1965. With the mission to serve the ailing humanity around the globe Orion

pharma started its operation nearly four decades ago, and after a great run of success the

company today has proliferated out into one of the leading pharmaceutical companies in

Bangladesh. It has already established itself to the doctor's community, other health care

professionals, chemists and patients as a provider of quality medicines and health care

services through 50 brands and 51 presentations of various formulations.

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3.9 Square Pharmaceuticals Limited:

Square pharmaceuticals Ltd the flagship company of square Group, 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. It was established in 1958 and

converted into a public limited company in 1991.

3.10 Pharma Aids Limited:

In 1973 the UK based multinational pharmaceutical company. ICI pls established a

subsidiary in Dhaka known as ICI Bangladesh manufacturers in 1992, ICI pls divested its

share to local management and the company was renamed Advanced chemical Industry

ACI Ltd.

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Financial Highlights of ACI Limited:

Year Current Asset Current

Liability

Acid Test Total Asset Total Liability

2012 8,334,671,204 7,101,682,744 0.87times 13,206,467,006 8,125,180,846

2011 6,954,929,184 5,316,055,351 0.98 times 11,096,971,158 6,329,473,598

2010 5,801,121,537 4,087,167,416 0.99 times 9,686,269,567 5,228,091,771

2009 5,365,708,393 4,176,873,529 0.90 times 7,524,887,877 4,494,686,971

2008 4,989,161,667 4,400,784,166 0.72 times 6,915,104,121 4,710,448,147

Financial Highlights of Ambee Pharmaceuticals Limited:

Year Current Asset Current

Liability

Acid Test Total Asset Total Liability

2012 227,132,817 218,500,388 .49 times 278,833,632 226,554,553

2011 228,036,273 223,143,759 .48 times 282,497,803 232,089,100

2010 228971790 228,587,032 .49 times 286,392,086 237,599,093

2009 232,270,188 232,472,089 .43 times 288,939,518 241,514,654

2008 218,724,505 222,145,754 .37 times 279,419,787 232,891,805

Financial Highlights of Beximco:

Year Current Asset Current

Liability

Acid Test Total Asset Total Liability

2012 8,197,421,953 3,064,944,769 1.88 times 24,589,810,592 6,181,648,740

2011 7,148,462,753 2,648,161,988 1.83 times 23,033,340,533 5,905,212,356

2010 6,191,667,831 2,513,157,232 1.67 times 21,372,399,509 5,398,313,058

2009 6,916,737,893 2,321,451,642 2.24 times 19,891,933,422 9,006,226,808

2008 2,861,891,654 2,602,032,267 .52 times 14,819,665,441 4,369,463,296

Page | 19

Financial Highlights of Glaxo Smithkline:

Year Current Asset Current

Liability

Acid Test Total Asset Total Liability

2012 2,566,376 1,433,857 1.05 times 3,064,206 1,578,646

2011 2,310,725 1,224,119 0.96 times 2,791,387 1,369,097

2010 1,824,178 703,396 1.60 times 2,214,285 833,134

2009 1,334,284 429,157 1.69 times 1,701,502 537,784

2008 1,018,458 343,999 1.23 times 1,362,348 450,138

Financial Highlights of Renata:

Year Current Asset Current

Liability

Acid Test Total Asset Total Liability

2012 3,310,220,716 2,876,857,184 0.46 times 9,753,077,971 4,682,598,223

2011 2,464,125,653 3,385,850,284 0.26 times 7,691,601,900 3,732,993,864

2010 2,063,325,826 1,851,204,608 0.41 times 5,113,932,025 2,142,461,081

2009 1,643,106,431 1,409,726,600 0.40 times 3,851,369,286 1,644,089,330

2008 1,557,582,884 1,332,943,795 0.41 times 3,318,021,116 1,530,256,787

Financial Highlights of IBN SINA Pharmaceutical Limited:

Year Current Asset Current

Liability

Acid Test Total Asset Total Liability

2012 324,503,396 281,239,972 0.78times 1,048,577,023 387,260,530

2011 294,802,418 285,818,423 0.74times 693,730,510 364,987,324

2010 242,736,579 256,604,062 0.69times 625,613,527 356,882,398

2009 225,056,867 308,437,653 0.53times 604,093,394 388,683,160

2008 220,130,579 264,653,403 0.60times 513,654,097 324,977,527

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Financial Highlights of Libra Infusion:

Year Current Asset Current

Liability

Acid Test Total Asset Total Liability

2012 177,332,325 115,608,991 0.70times 2,675,643,677 716,425,834

2011 173,054,485 129,368,388 0.75times 2,488,270,496 527,658,904

2010 144,182,976 269,803,775 0.26times 2,404,338,076 443,446,146

2009 141,614,587 205,249,503 0.33times 424,725,342 338,474,038

2008 109,657,939 130,668,291 0.43times 305,654,738 221,584,935

Financial Highlights of Pharma Aids Limited:

Year Current Asset Current

Liability

Acid Test Total Asset Total Liability

2012 93,278,968 54,391,467 1.56times 136,446,762 54,391,467

2011 65,815,432 38,984,245 1.49times 113,043,062 38,984,245

2010 48,774,500 32,840,163 1.27times 99,562,761 32,840,163

2009 45,908,843 38,313,395 1.0times 101,602,226 38,313,395

2008 34,599,041 37,190,710 0.80times 91,105,479 37,190,710

Financial Highlights of Orion Infusion:

Year Current Asset Current

Liability

Acid Test Total Asset Total Liability

2012 232,818,469 214,084,150 0.58times 619,014,970 441,517,664

2011 269,439,624 505,206,866 0.26times 739,022,003 549,173,804

2010 229,864,086 338,366,043 0.42times 708,560,585 502,443,902

2009 206,629,671 264,085,886 0.424times 685,614,701 483,252,121

2008 199,170,170 141,413,574 0.74times 528,720,770 291,591,078

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Financial Highlights of Square Pharmaceuticals Limited:

Year Current Asset Current

Liability

Acid Test Total Asset Total Liability

2012 8,248,571,022 4,315,390,359 1.289times 24,376,715,644 5,249,356,021

2011 8,454,124,714 5,522, 379,220 1.071times 22,520,452,375 6,550,890,458

2010 5,004,928,113 2,093,142,485 0,507times 16,405,752,756 2,229,980,087

2009 4,130,759,561 2,978,735,582 0.682times 14,904,565,646 3,976,288,828

2008 5,506,143,431 4,532,583,510 0.768times 15,058,188,280 5,535,691,143

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Chapter Four: Analytical Discussion

Outline:

4.1 Degree of Financial Leverage (DFL)

4.2 Working Capital

4.3 Current Ratio

4.4 Acid-Test Ratio

4.5 Debt Ratio

4.6 Gross Profit Margin

4.7 Time Interest Earned Ratio

Page | 23

4.1 Degree of Financial Leverage –DFL (Times)

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

CompanyAverage

IndustryAvarage

Company Name Year

2012 2011 2010 2009 2008 Total Average Industry

Average

ACI Limited 1.62 2.15 1.69 1.83 2.50 9.79t 1.96 1.56

Ambee Pharmaceuticals

Limited

1.05 1.05 1.05 1.05 1.05 5.25 1.05 1.56

Beximco Pharmaceutical

Limited

1.16 1.16 1.20 1.10 1.40 6.02 1.20 1.56

Glaxo Smithkline: 1.05 1.05 0.97 0.98 1.04 5.09 1.02 1.56

Renata Limited: 0.88 1.04 1.16 1.18 1.29 5.55 1.11 1.56

IBN SINA Pharmaceutical

Limited

1.00 1.07 0.96 0.91 0.97 4.91 0.98 1.56

Libra Infusions Limited 5.30 4.80 3.57 4.41 3.05 21.13 4.23 1.56

Orion Infusion Limited 1.74 1.62 1.86 2.08 1.80 9.1 1.82 1.56

Square Pharmaceutical

Limited

1.05 1.05 1.15 1.22 1.19 5.66 1.13 1.56

Pharma Aids Limited 1.11 1.09 1.12 1.05 1.05 5.42 1.08 1.56

Total 15.96 16.08 14.73 15.81 15.34 77.92 15.59

Page | 24

4.2 Working Capital Ratio

-1,500,000,000

-1,000,000,000

-500,000,000

0

500,000,000

1,000,000,000

1,500,000,000

2,000,000,000

2,500,000,000

3,000,000,000

CompanyAverage

IndustryAverage

Company

Name

Year

2012 2011 2010 2009 2008 Total Average Industry

Average

ACI Limited 1,232,988,460 1,638,873,833 1,713,954,123 1,188,834,864 588,377,501 6,363,028,781 1,272,605,756 430549674.2

Ambee

Pharmaceuticals

Limited

8,632,429 4,892,514 384,758 (201,901) (3,421,249) 10,886,551 2,177,303 430549674.2

Beximco 5,132,477,184 4,500,300,765 3,678,510,599 4,595,286,251 (2,315,842,613) 12590732186 2,518,146,437 430549674.2

Glaxo

Smithkline:

1,132,519 1,086,596 1,120,782 905,127 674,459 4,919,483 983,897 430549674.2

Renata Limited: 433,363,532 (921,724,631) 212,121,218 233,379,831 224,639,089 91,779,047 18,355,809 430549674.2

IBN SINA

Pharmaceutical

Limited

43,263,424 8,983,995 (13,867,483) (83,380,786) (44,522,824) (89,523,674) (17,904,735) 430549674.2

Libra Infusions 61,723,334 43,686,097 (125,620,799) (63,634,916) (21,010,352) (103,856,676) (20,771,327) 430549674.2

Orion Infusion 18,734,319 (235,767,242) (108,501,957) (57,456,215) 57,756,595 (325,234,500) (965,046,900) 430549674.2

Square 3,933,180,663 2,931,745,494 (1,592,214,354) 1,152,023,979 973,559,921 7,399,095,703 1,479,819,141 430549674.2

Pharma Aids

Limited

38,887,501 26,831,187 14,934,337 7,595,448 (2,591,669) 85,656,804 17,131,361 430549674.2

Total 1,090,438,337 7998908608 3,780,821,224 6973351722 (542381142) *** 4305496742 ***

Page | 25

4.3 Current Ratio (Times)

0

0.5

1

1.5

2

2.5

3

CompanyAverage

IndustryAverage

Company Name Year

2012 2011 2010 2009 2008 Total Average Industry

Average

ACI Limited 1.17 x 1.30 x 1.42 x 1.28 x 1.13 x 6.28 x 1.256 x 1.39 x

Ambee

Pharmaceuticals

Limited

1.04 x 1.02 x 1.00 x 0.99 x 0.98 x 5.03 x 1.006 x 1.39 x

Beximco 2.67 x 2.69 x 2.46 x 2.98 x 1.09 x 11.89 x 2.378 x 1.39 x

Glaxo Smithkline: 1.79 x 1.89 x 2.59 x 3.11 x 2.96 x 12.34 x 2.468 x 1.39 x

Renata Limited: 1.15 x 0.73 x 1.11 x 1.17 x 1.17 x 5.33 x 1.066 x 1.39 x

IBN SINA

Pharmaceutical

Limited

1.15 x 1.03 x 0.95 x 0.73 x 0.83 x 4.69 x 0.94 x 1.39 x

Libra Infusions 1.53 x 1.34 x 0.53 x 0.69 x 0.84 x 4.93 x 0.99 x 1.39 x

Orion Infusion 1.10 x 0.53 x 0.68 x 0.78 x 1.41 x 4.50 x 0.9 x 1.39 x

Square 1.91 x 1.53 x 2.39 x 1.39 x 1.21 x 8.43 x 1.69 x 1.39 x

Pharma Aids

Limited

1.71 x 1.69 x 1.49 x 1.20 x 0.93 x 5.94 x 1.19 x 1.39 x

Total 15.22 x 13.75 x 14.62 x 14.32x 12.55 x *** *** ***

Page | 26

4.4 Acid-Test Ratio (Time)

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

CompanyAverage

IndustryAverage

Company Name Year

2012 2011 2010 2009 2008 Total Average Industry

Average

ACI Limited 0.87 x .98 x 0.99 x 0.90 x 0.72 x 4.46 x 0.892 x 0.84x

Ambee

Pharmaceuticals

Limited

0.49 x 0.48 x 0.49 x 0.43 x 0.73 x 2.26 x 0.452 x 0.84x

Beximco 1.88 x 1.83 x 1.67 x 2.24 x 0.52 x 8.14 x 1.628 x 0.84x

Glaxo Smithkline: 1.05 x 0.96 x 1.60 x 1.69 x 1.23 x 6.53 x 1.306 x 0.84x

Renata Limited: 0.46 x 0.26 x 0.41 x 0.40 x 0.41 x 1.94 x 0.388 x 0.84x

IBN SINA

Pharmaceutical

Limited

0.78 x 0.74 x 0.69 x 0.53 x 0.60 x 3.34 x 0.668 x 0.84x

Libra Infusions 0.70 x 0.75 x 0.26 x 0.33 x 0.43 x 2.47 x 0.494 x 0.84x

Orion Infusion 0.58 x 0.26 x 0.42 x 0.424 x 0.74 x 2.424 x 0.485 x 0.84x

Square 1.289 x 1.071x 0.507 x 0.682 x 0.77 x 4.32 x 0.863 x 0.84x

Pharma Aids

Limited

1.56 x 1.49 x 1.27 x 1.00 x 0.80 x 6.12 x 1.224 x 0.84x

Total 9.66 x 8.82 x 8.31 x 8.63 x 6.95 *** *** ***

Page | 27

4.5 Debt Ratio (%)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

CompanyAverage

IndustryAverage

Company Name Year

2012 2011 2010 2009 2008 Total Average Industry

Average

ACI Limited 62% 57% 54% 59% 68% 340% 68% 49.8%

Ambee

Pharmaceuticals

Limited

81% 82% 83% 84% 83% 413% 83% 49.8%

Beximco 25% 26% 25% 45% 29% 150% 30% 49.8%

Glaxo Smithkline: 52% 49% 38% 32% 33% 204% 41% 49.8%

Renata Limited: 48% 49% 42% 43% 46% 228% 46% 49.8%

IBN SINA

Pharmaceutical

Limited

37% 53% 57% 64% 63% 274% 55% 49.8%

Libra Infusions 27% 21% 18% 80% 72% 218% 44% 49.8%

Orion Infusion 71% 74% 71% 70% 55% 341% 68% 49.8%

Square 22% 29% 14% 27% 37% 129% 26% 49.8%

Pharma Aids

Limited

40% 34% 33% 38% 41% 186% 37% 49.8%

Total 465% 474% 435% 542% 527% *** *** ***

Page | 28

4.6 Gross Profit Margin (%)

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

CompanyAverage

IndustryAverage

Company Name Year

2012 2011 2010 2009 2008 Total Average Industry

Average

ACI Limited 37.08% 37.55% 35.64% 32.73% 30.93% 173.93% 34.79% 40.17%

Ambee

Pharmaceuticals

Limited

52.91% 54.20% 53.55% 55.07% 57.22% 272.95% 54.59% 40.17%

Beximco 47.25% 47.99% 48.89% 47.29% 50.06% 241.48% 48.29% 40.17%

Glaxo

Smithkline:

28.61% 28.48% 34.20% 31.23% 24.98% 147.50% 29.50% 40.17%

Renata Limited: 52.82% 52.46% 52.75% 53.33% 50.59% 261.95% 52.39% 40.17%

IBN SINA

Pharmaceutical

Limited

38.78% 38.72% 38.61% 38.53% 37.96% 192.6% 38.52% 40.17%

Libra Infusions 38.01% 36.54% 36.54% 36.36% 32.98% 180.08% 36.02% 40.17%

Orion Infusion 37.75% 36.43% 36.56% 38.50% 37.91% 187.15% 37.43% 40.17%

Square 42.89% 37.03% 43.32% 40.70% 37.98% 201.92% 40.38% 40.17%

Pharma Aids

Limited

32.85% 32.52% 25.69% 27.08% 30.62% 148.76% 29.75% 40.17%

Total 408.95% 401.92% 405.75% 400.75% 391.23% *** **** ***

Page | 29

4.7 Time Interest Earned Ratio (Times)

0

2

4

6

8

10

12

14

CompanyAverage

IndustryAverage

Company Name Year

2012 2011 2010 2009 2008 Total Average Industry

Average

ACI Limited 2.75 1.79 2.05 2.36 1.06 10.01 2.002 5.05

Ambee

Pharmaceuticals

Limited

0.75 0.86 1.02 0.82 0.81 4.26 0.85 5.05

Beximco 3.42 3.50 2.47 3.45 4.0 16.84 3.37 5.05

Glaxo Smithkline: 2.00 1.98 3.17 9.69 5.23 22.07 4.41 5.05

Renata Limited: 2.91 4.89 11.17 9.74 4.42 33.13 6.63 5.05

IBN SINA

Pharmaceutical

Limited

18.74 11.46 8.90 10.89 11.10 61.09 12.22 5.05

Libra Infusions 1.23 1.26 1.39 1.29 1.49 6.66 1.332 5.05

Orion Infusion 2.27 2.48 2.11 1.91 2.23 11.00 2.2 5.05

Square 8.663 11.23 10.60 7.63 6.58 44.7 8.94 5.05

Pharma Aids

Limited

9.71 11.20 4.67 8.44 8.52 42.54 8.51 5.05

Total 52.443 50.65 47.55 56.22 48.44 *** *** ***

Page | 30

Chapter Five: Conclusion Outline:

5.1 Conclusion

Page | 31

5.1 Conclusion:

Financial statement analysis or financial analysis the process of understanding the risk

and profitability of a firm, business, sub-business or project through analysis of reported

financial information, particularly annual and quarterly reports. It is a formal record of

the financial activities of a business, person, or other entity. A financial statement is often

referred to as an account, although the term financial statement is also used, particularly

by accountants "The objective of financial statements is to provide information about the

financial position, performance and changes in financial position of an enterprise that is

useful to a wide range of users in making economic decisions. To entice new investors,

most public companies assemble their financial statements on fine paper with pleasing

graphics and photos in an annual report to shareholders, attempting to capture the

excitement and culture of the organization in a "marketing brochure" of sorts. With the

help of annual reports we analysis the financial statement of ten pharmaceuticals

companies listed in DSE. We tried to find out which company is more profitable to

investors. After all we analysis the insight of capital structure of these pharmaceuticals

companies of Bangladesh.

Page | 32

References:

Guidelines and suggestion of our honorable course teacher Kumar Debasish

Dutta.

Last 5 years annual Financial Reports of 10 pharmaceuticals companies listed

in DSE.

“Essentials of Managerial Finance”- Besley & Brigham 14th

Edition.

Google.com

Wikipedia.org

Investopedia.com

Dsebd.com