Ratio Analysis of 5 Pharmacuticals Companies in Bangladesh

Topics: Financial ratios, Financial ratio, Generally Accepted Accounting Principles Pages: 16 (3787 words) Published: December 5, 2012
Ratio Analysis

Submitted to:
Mr. Saud Ahmed
The Course Instructor
Security Analysis & Portfolio Management

Submitted by:
S.N.| Member Name| ID|
01| Anwar Murshed| MBA 048 13912|
02| Mahfuj Reza| MBA 047 13761|
03| Tania Islam| MBA 048 13917|
04| Abdullah Al Mamun Khan| MBA 048 14013|
05| Swarna Akter| MBA 049 14397|

Date of Submission: Tuesday, November 27, 2012

Stamford University Bangladesh
44 (744 old), Satmosjid Road, Dhanmondi, Dhaka

Chapter| Titles | Page No.|
Executive Summary| 02|
Introduction| Background| 03|
| Objectives| 03|
Theoretical Aspects| Ratio Analysis| 04|
| Purpose Ratio Analysis| 04|
| Categories of Financial Ratios | 04|
| Limitations of Financial Ratios| 08|
Practical Aspects| 01| ACI Formulations Limited| 10|
| 02| Beximco Pharmaceuticals LTD.| 11|
| 03| GlaxoSmithKline Bangladesh Limited| 12|
| 04| Renata Limited| 13|
| 05| Square Pharmaceuticals Ltd.| 14|
| Interpretation of Different Ratios| 15|
Conclusion, References, Attachment| 18|

Executive Summary
This assignment is a partial requirement of the course ‘Security Analysis & Portfolio Management’ in MBA Program, Stamford University Bangladesh. The topic “Ratio Analysis” was assigned to us by the Course Instructor. Financial ratios quantify many aspects of a business and are an integral part of the financial statement analysis. Financial ratios are categorized according to the financial aspect of the business which the ratio measures. Liquidity ratios measure the availability of cash to pay debt. Activity ratios measure how quickly a firm converts non-cash assets to cash assets. Debt ratios measure the firm's ability to repay long-term debt. Profitability ratios measure the firm's use of its assets and control of its expenses to generate an acceptable rate of return. Market ratios measure investor response to owning a company's stock and also the cost of issuing stock. These are concerned with the return on investment for shareholders, and with the relationship between return and the value of an investment in company’s shares. Ratios generally are not useful unless they are benchmarked against something else, like past performance or another company. Thus, the ratios of firms in different industries, which face different risks, capital requirements, and competition, are usually hard to compare. This report starts with an introduction then discusses the theoretical aspects of ratio analysis and practical aspects of ratio analysis i.e. ratio analysis of 5 pharmaceuticals companies 2 years data. The ending part of this assignment consists of conclusion which includes my personal observation.

By financial ratios we mean taking a financial figure and looking at it relative to another financial figure. These ratios simplify the process of determining the health of a listed company and make reported financial information more meaningful and useful for investors. In this report we cover different ratios that measure a company’s liquidity, leverage, profitability and share price value. Understanding these ratios will go a long way to providing you with an idea of how a company is performing in relation to key measures of business success. Background of Financial Ratio Analysis: Financial ratio analysis has been used to assess company performance for almost as long as modern share markets have been around. The methods are based on tried-and true accounting ratios, which have been around for even longer. The theory of financial ratio analysis was first popularized by Benjamin Graham who is considered by many to be the father of fundamental analysis. Benjamin Graham, who from 1928 was a professor at Columbia Business School as well as a very successful investor in his own right, was mentor and teacher to Warren Buffett. Financial ratios are tools to help with the...
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