Time Series Analysis
2.1 Ratio and time series analysis of Beximco Pharmaceutical 1. Inventory turnover:
A ratio showing how many times a company's inventory is sold and replaced over a period. Formula:
Inventory Turnover =Cost of goods sold/Average Inventory. The ratio and time series analysis of Inventory Turnover of Beximco Pharmaceutical from 2008-2012 is given below-
The companies ratio increases from 2008 to 2010, then decreases in 2011 and then again increases from 2012.
2. TIE ratio:
Time interest earned ratio (TIE) also known as Interest coverage ratio, indicates how well a company can cover its interest payment on a pretext basis. The larger the time interest earned, the more capable the company is paying the interest on its debt. Formula:
Earnings before interest and tax / Total interest
The ratio and time series analysis of TIE Ratio from 2008-2012 given below-
The Ratio Increases from 2008 to 2012 to its highest level of 4.90 and then decreases in 2009 & 2010.Again ratio increase 2011. The ratio fluctuation is very high. 3. Gross Profit Margin:
A financial metric used to assess a firm's financial health by revealing the proportion of money left over from revenues after accounting for the cost of goods sold. Formula:
Gross Profit Margin=Gross Profit/Sales
Gross profit margin of Beximco Pharmaceutical from 2008-2012 is given below-
The gross margin highest in2008 and decreases in 2009 but increase 2010 and then gradually decreases from 2011 to 2012.
4. Operating Profit Margin:
A ratio used to measure a company's pricing strategy and operating efficiency. Formula:
Operating Profit Margin=Operating Profits/Net sales
Operating margin is a measurement of what proportion of a company's revenue is left over after paying for variable costs of production such as wages, raw materials, etc. A healthy operating margin is required for a company to be able to pay for its fixed costs, such as interest on debt. The operating profit margin of Beximco Pharmaceutical from 2008-2012 is graphically presented-
The operating margin decreases from 2008 to 2009 which is bad for the company, but again increases in 2010 & 2011 same and then again decreases in 2012.
5. Net Profit Margin:
A ratio of profitability calculated as net income divided by revenues, or net profits divided by sales. It measures how much out of every dollar of sales a company actually keeps in earnings. Formula:
Net Profit=Net Income/Sales
The graphical analysis of net profit margin from 2008-2012 is given on the next page
The net profit margin in 2008 was 8.39 but then it decreases to its lowest in 2009 and again increases from 2009 to 2010 to its highest of 16.20 which is good for the company. But again decreases in 2011 and 2012.
6. Total Asset Turnover:
The amount of sales generated for every dollar's worth of assets. It is calculated by dividing sales in dollars by assets in dollars. Formula:
Total Asset Turnover=Sales/Total Asset.
The graphically analysis of total Asset Turnover from 2008-2012 is given below-
The ratio decreases from 2008 to 2009 but increases gradually from 2010 to 2012 which shows the company is efficient in asset utilization. 2012 the company has its highest ratio that is highest efficiency.
7. Cash ratio:
The ratio of a company's total cash to its current liabilities. The cash ratio is most commonly used as a measure of company liquidity. It can therefore determine if, and how quickly, the company can repay its short-term debt. Formula:
Cash ratio=Cash/ current Asset
The graphical analysis of 2008-2012 is given below-
In 2008 cash ratio is 0.06 which means less cash is in hand. The ratio gradually increases from 2008 to 2010 that more unused cash in hand which is not...
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