Abstract: The pharmaceutical market of Bangladesh very much dynamic and competitive and is comparable to those of developed countries. It is a matter of great pleasure that this sector successfully fulfils major portion of local demand of pharmaceutical products and at the same time it is moving forward to explore the international market for chemicals and pharmaceuticals products. The contribution of pharmaceuticals companies in Bangladesh to the national economy is encouraging. The investment in this sector is increasing which speaks about the potentiality in this sector. This sector satisfies the demand of the local market and also goes for export to explore the international market. Presently these industries exporting medicines to more than 50 countries of the world. Hence, the present study is initiated Profitability of Listed pharmaceuticals Companies: An Inter and Intra Comparison of Ambee and Ibn Sina pharmaceuticals companies in Bangladesh with three (03) years accounting period from 2005-2007. The study reveals that, AMBEE Pharmaceuticals Ltd (AMBPH) should be considered as satisfactory its indicators of profitability higher than the industry average, except average operating profit ratio and average net profit ratio. On the other hand IBN SINA Pharmaceuticals Ltd (IBN SINAPH), it has not been able to attain the industry average gross profit, operating profit, return on investment, return on capital employed and return on equity. But it has succeeded to attain the standard norm for these ratios. Therefore its profitability may be considered to some extent satisfactory. It can be concluded that the profitability of pharmaceutical companies is very much satisfactory as both of the companies according to the standard norms of profitability in terms of investment. Keywords: Profit; Profitability; Pharmaceuticals industry.
JEL Classifications: M41
Prelude : Profit is the primary objective of a business. In view of the heavy investment which is necessary for the success of most enterprises. Profit in the accounting sense tends to become a long term objective which measures not only the success of a product, but also of the development of the market for it. It is Nimalathasan, B., Lecturer, Department of Commerce, Faculty of Management Studies & Commerce, University of Jaffna, SriLanka, & Ph.D Research Scholar, Department of Management Studies, Faculty of Business Administration, University of Chittagong, Chittgong – 4331, Bangladesh. *
Nimalathasan B., Profitability of Listed Pharmaceutical Companies in Bangladesh: An Inter & Intra Comparison of Ambee & IBN Sina Companies / Annals of University of Bucharest, Economic and Administrative Series, Nr. 3 (2009) 139-148
determined by matching revenue against cost associated with it. In the matching process only those costs are placed against revenue, which have contribution in the generation of such revenue. Profits are the primary motivating force for economic activity. Profits are the report card of the past, the inventive gold star for the future. If an enterprise fails to make profit, capital invested is eroded and if this situation prolongs the enterprise ultimately ceases to exist. Profits are the soul of the business without which it is lifeless. In fact, profits are useful intermediate beacon towards which a firm’s capital should be directed. Perhaps the most important reason for keeping accounts as far as the management of the business of testing its pulse and of indicating when and where remedial action, if necessary shall be taken. Profit is a signal for the allocation of resources and a yardstick for judging managerial efficiency. It is wrong to believe that the importance given to profit planning is the literature on business finance does not reflect its genuine importance in the financial...