# Ratio Analysis on Different Pharmaceuticals in Bangladesh

**Topics:**Financial ratio, Financial ratios, Generally Accepted Accounting Principles

**Pages:**12 (2192 words)

**Published:**December 2, 2011

1. Letter of transmittal…………………………………03 2. Introduction …………………………………04 3. Ratio Analysis………………………………..06 4. Liquidity…………………………………07 i. Current ratio…………………………………08 ii. Quick Ratio………………………………..09 5. Asset management………………………………..10 iii. Inventory turnover…………………………………11 iv. Days sales outstanding (DSO)…………………………………12 v. Fixed asset turnover…………………………………13 vi. Total assets turnover…………………………………14 6. Debt management………………………………..15 vii. Total debt to total assets…………………………………16 viii. Times-interest-earned (TIE)…………………………………17 ix. EBITDA coverage…………………………………18 7. Profitability………………………………..19 x. Profit margin on sales…………………………………20 xi. Basic earning power (BEP)…………………………………21 xii. Return on total assets (ROA)…………………………………22 xiii. Return on common equity (ROE)…………………………………23 8. Market value………………………………..24 xiv. Price/earning (P/E)…………………………………25 xv. Price/cash flow…………………………………26 xvi. Market/book (M/B)…………………………………27 9. Overall Financial Summary…………………………….28 10. Balance sheet, cash follow and income statement of BEXIMCO LTD 11. Balance sheet, cash follow and income statement of SQUARE LTD 12. Balance sheet, cash follow and income statement of Renata LTD Acknowledgements

At first our thanks goes to Mr. S.M. Abdus Shakur, Lecturer, School of Business, Presidency University, for giving us the responsibility to prepare this report which we found to be a rather interesting topic to work on, and for the help to prepare the report as well. We got help from many people in the context of preparing this report and some of the persons have been very helpful and cooperative with information and suggestions. And lastly, we would like to thank each other, means the group members for helping each other whenever we have to get help.

Introduction:

Financial Ratio Analysis is a tool used by individuals to conduct a quantitative analysis of information in a company's financial statements. Ratios are calculated from current year numbers and are then compared to previous years, other companies, the industry, or even the economy to judge the performance of the company. Ratio analysis is predominately used by proponents of fundamental analysis.

Financial ratios are designed to help one evaluate financial statement and by comparing the results it must pay to the income it has available for payment such comparisons are made by ratio analysis. Here we take three companies from the same industry to analyze their financial statement and we also compare the findings with the total pharmaceuticals industry average. The companies name we took are- 1. BEXIMCO PHARMACEUTICALS LIMITED.

2. SQUARE PHARMACUTICALS LTD.

3. RENATA LIMITED.

4. AMBEE PHARMACEUTICALS LTD.

Ratio Analysis

Financial ratios are useful indicators of a firm's performance and financial situation. Financial ratios can be used to analyze trends and to compare the firm's financials to those of other firms.

Financial ratios can be classified according to the information they provide. The following types of ratios frequently are used:

1. Liquidity ratios

2. Asset management ratios

3. Debt management ratios

4. Profitability ratios

5. Market value ratios

LIQUIDITY RATIOS

Liquidity ratios are the first ones to come in the picture. These ratios actually show the relationship of a firm’s cash and other current assets to its current liabilities. Two ratios are discussed under Liquidity ratios. They are:

1. Current ratio

2. Quick/ Acid Test ratio.

1. Current ratio: This ratio indicates the extent to which current liabilities are covered by those assets expected to be converted to cash in the near future. Current...

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