Financial Statement Analysis

Topics: Financial ratios, Balance sheet, Generally Accepted Accounting Principles Pages: 19 (4066 words) Published: August 24, 2012




“A Business Analysis of Square Pharmaceutical Ltd.”

Course Title: Financial Statement Analysis
Course code: ACT-513

Assignment on
“Business Analysis of”
(Square Pharmaceutical Ltd)

Submitted to:
Mr. Mohammed Sakhawat Hossain
Assistant Professor
Faculty of Business and Economics
Daffodil International University

Submitted by:
Mujahed Hossin 113-14-588 Mortazur Rahman 113--14-587 S. M. Mahedi Hasan 121-14-688
Raihanul Haque 121-14-689

Submission date:
August 23th, 2009

Letter of Transmittal

August 13, 2012

Mr. Mohammed Sakhawat Hossain
Assistant Professor
Faculty of Business and Economics
Daffodil International University
102, Sukrabad, Mirpur Road, Dhanmondi

RE: Submission of assignment on “A Business Analysis of Square Pharmaceutical Ltd.

Dear Sir,

With due earnest honor, we are the students of MBA, have the pleasure to completing and submitting the assignment on “Submission of assignment on “A Business Analysis of Square Pharmaceutical Ltd.”Here, we have analyzed how Square Pharmaceutical Ltd. Manage it’s working capital and use it by observing the low years annual reports.

This exercise was interesting as well as source of huge practical knowledge for us. We got the great opportunity to contributing our analytical skills and practices.

I would be our pleasure to thank you for providing us such an opportunity to allocate out book knowledge with the practicality in spite of your time constraints.

Sincerely yours,
Mujahed Hossin


A statement Analyses strategy focusing on maintaining efficient levels of both components of working capital, assets and liabilities, in respect to each other. Ratio Analysis ensures a company has sufficient cash, Asset, Return in order to meet its short-term debt obligations and operating expenses and as well as equity holder.

Implementing an effective management system is an excellent way for many companies to improve their earnings. The two main aspects of working capital management are ratio analysis and management of individual components of working capital.

A few key performance ratios of a financial statement system are the inventory turnover and the collection ratio. Ratio analysis will lead management to identify areas of focus such as inventory management, cash management, accounts receivable and payable management, Return on Equity, Return on Assets, EPS, Gross profit margin, Operating profit margin, Net profit margin, Cash Turnover etc.

Financial Statement Analysis of Square Pharmaceuticals Ltd:

Analyzing financial statements involves evaluating three characteristics: a company’s liquidity, profitability and solvency. A short-term creditor such as a bank is primarily interested in liquidity – the borrower to pay obligations when they come due. A long-term creditor, such as a bondholder, looks to profitability and solvency measures that indicate the company’s ability to survive over a long period of time. Similarly, stockholders look at the profitability and solvency of the company and want to assess the likelihood of dividends and the growth potential of the stock.

Three commonly used tools for financial statement analysis are: ➢ Horizontal analysis evaluates a series of financial statement data over a period of time. ➢ Vertical analysis evaluates financial statement data by expressing such item in a financial statement as a percentage of a base amount. ➢ Ratio analysis expresses the relationship among selected items of financial statement data.

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