Performance evaluation and ratio analysis of Pharmaceutical Company in Bangladesh
Faruk Hossan Md Ahsan Habib
Supervisor: José Ferraz Nunes Examiner: Bengt Kjellén
Master‟s thesis in international Business 15 ECTS Department of Economic and Informatics University West Spring term 2010
The thesis applies performance evaluation of pharmaceutical company in Bangladesh. It means evaluate how well the company performs. The main aim is achieved through ratio analysis of two pharmaceutical (Beximco and Square pharmaceutical) companies in Bangladesh. The main data collection from the annual financial reports on Beximco and square pharmaceutical companies in 2007 to 2008.Different financial ratio are evaluated such liquidity ratios, asset management ratios, profitability ratios, market value ratios, debt management ratios and finally measure the best performance between two companies. The mathematical calculation was establish for ratio analysis between two companies from 2007-2008.It is most important factors for performance evaluation. The graphical analysis and comparisons are applies between two companies for measurement of all types of financial ratio analysis. Liquidity ratio is conveying the ability to repay short-term creditors and it total cash. It determines perform of short term creditor of both pharmaceutical companies under the three categories such as current ratio, quick ratio and cash ratio. Asset management ratio is measurement how to effectively a company to use and controls its assets. Its also quantify into seven categories for both pharmaceutical companies such as account receivable turnover, average collection period, inventory turnover, account payable turnover ,account payable turnover in days ,fixed asset turnover ,total asset turnover. Profitability ratio is evaluate how well a company is performing by analyzing and how profit was earned relative to sales, total assets and net worth for both pharmaceutical companies. Debt coverage ratio is performing that the property insufficient to collect their mortgage for both companies and market value is perform the stockholder to analysis their future market value of the stock market. Overall analyses are measurement the best one between Beximco and Square pharmaceutical companies.
Keyword: Financial analysis, ratio analysis, Beximco company financial analysis, Square company financial analysis.
Firstly, we would like to express our gratitude to all faculty and relevant staff of Economics and IT and Library of University West.
We would deeply thank my supervisor José Ferraz Nunes, who kindly supervises and gives me the excellent suggestion, guidance, and encouragement all the times during my thesis writing. We cannot complete this thesis without his consistent advice.
We also like to thank our families, who have always been supporting and understanding during this work.
Table on contents
Abstract Acknowledgement 1. Introduction
1.1. Background 1.2. Purpose and thesis questions 1.3. Limitation of study 1.4. Thesis outline 5 6 7 7-8 9-14 15 15-17 18-19 1 2
2. Literature Review 3. Methodology
3.1. Data collection 3.2. Data analysis 3.3. Formula for ratio analysis
4. Results and Analysis
4.1. Liquidity ratio 4.1.1. Current ratio 4.1.2. Quick ratio or acid test 4.1.3. Cash Ratio 4.2. Asset management ratio 4.2. 1. Accounts receivable turnover 4.2.2. Average collection period 4.2.3. Inventory turnover ratio 4.2.4. Accounts Payable turnover 4.2.5. Accounts Payable turnover in days 4.2.6. Fixed asset turnover ratio 4.2.7. Total asset turnover ratio 4.3. Profitability Ratio 4.3.1. Net Profit Margin 4.3.2. Gross Profit Margin ratio 4.3.3. Return on asset ratio 4.3.4. Return on Equity 4.3.5. Operating profit margin ratio 4.4. Debt coverage ratio 4.4.1. Debt ratio 4.4.2. Time interest earned ratio 4.4.3. Book value per share ratio 4.5 Market value ratios 4.5.1. Earnings per Share (EPS) ratio...
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