Fi nanci al Anal ysi s of SQUARE PHARACEUT I CALS

Gr oup Repor t

Corporate Finance (FIN 440)
Section 9

Prepared for
Tashfeen Hussain

Prepared By
Rashadat Anowar Chowdhury
0930101020
Taufiq Ul Islam
0920436030




II
Let t er of Tr a n smi t t a l


10 August 2011
Tashfeen Hussain
School of Business
North South University
Dear Sir,
We are delighted to present the Report on “Analysis of Financial Summary”
of Square Pharmaceutical Limited Bangladesh Fiscal Yearly 2006-2010.
The report includes the financial ratios, annual report, capital structure of the
company during fiscal year 2006-2010.
Your instructions have been strictly followed by us to build up a vivid picture
of the company’s financial performance and profile for past 5 (five) fiscal
year.

Yours Sincerely

Rashadat Anowar Chowdhury
0930101020


Taufiq Ul Islam
0920436030


III
Con t en t
Executive Summary 4
Company Profile 5

Financial Ratio Analysis 7
Short Term Liquidity Ratio Analysis 8
Long Term Liquidity Ratio Analysis 11
Asset Management (Turnover) Ratio Analysis 13
Profitability Ratio Analysis 17
Market Value Ratio Analysis 18
Dividend Ratio Analysis 21
Free Cash Flow Ratio Analysis 23
Cost of Capital Analysis 24
Capital Structure Analysis 25

Appendix
Financial Ratio Table FY2006-2010 Appendix 1
Balance Sheet and Income Statement FY2006-2010 Appendix 2
List of Equations Appendix 3
Table of Data Used for Calculating Beta Appendix 4
of Square Pharmaceuticals Limited Bangladesh

4
Execut i ve Summa r y
Square Pharmaceutical Limited Bangladesh is one of the leading pharmaceuticals
in Bangladesh. Its journey to the growth and prosperity has been no bed of roses.
From the inception in 1958, it has today burgeoned into one of the top line
conglomerates in Bangladesh. Square Pharmaceuticals Ltd., the flagship company,
is holding the strong leadership position in the pharmaceutical industry of
Bangladesh since 1985 and is now on its way to becoming a high performance
global player.

In this report, we have tried to focus on the financial performance of the company
during the fiscal year of 2006-2010. We have used financial ratios to determine its
performance in short term and long term period. The firm had a strong financial
backbone as it uses less debt for investment, uses its asset efficiently for producing
goods. Sales had increases on regular basis over past the years. In one word based
on our analysis this firm can be an example in certain financial segment for other
company.
Though, the firm pays fewer cash dividends than past fiscal years, which might be
disliked by investors. But it must be added that the company had been increasing
it’s the number of outstanding share regularly and also provide bonus share to its
shareholder.
The company’s fiscal year is based on April to March. And regularly hold annual
general meeting and publishes financial report both annually, half yearly and
quarterly.


5
Vision - We view business as a means to the material and
social wellbeing of the investors, employees and the society
at large, leading to accretion of wealth through financial and
moral gains as a part of the process of the human civilization.
Mission -Our Mission is to produce and provide quality &
innovative healthcare relief for people, maintain stringently
ethical standard in business operation also ensuring benefit
to the shareholders, stakeholders and the society at large.
Objective- Our objectives are to conduct transparent
business operation based on market mechanism within the
legal & social frame work with aims to attain the mission
reflected by our vision.
Compa n y Pr ofi l e
Square Pharmaceuticals Limited Bangladesh is the largest pharmaceutical
company in Bangladesh and it has been continuously in the 1
st
position among all
national and multinational companies since 1985. It was established in 1958 and
converted into a public limited company in 1991. The sales turnover of SPL was
more than Taka 11.46 Billion (US$ 163.71 million) with about 16.43% market
share (April 2009– March 2010) having a growth rate of about 16.72%.











Subsidiary Company Associate Company
 Square Cephalosporin Ltd
 Square Biotech’s Ltd.
 Square Multifabrics Ltd
 Square Textiles Ltd.
 Square Knit Fabrics Ltd.
 Square Fashions Ltd.
 Square Hospitals Ltd.

6
Top Ma n a gemen t: Boa r d of Di r ector s
As per provisions of the Article of Association, Board of Directors holds periodic
meetings to resolve issue of policies and strategies, recording minutes/decisions for
implementation by the Executive Management.

Executi ve Ma n a gemen t
The Executive Management is headed by the Managing Director, the Chief
Executive Officer (CEO) who has been delegated necessary and adequate authority
by the Board of Directors. The Executive Management operates through further
delegations of authority at every echelon of the line management. The Executive
Management is responsible for preparation of segment plans/sub-segment plans for
every profit centers with budgetary targets for every items of goods & services and
are held accountable for deficiencies with appreciation for exceptional
performance. These operations are carried out by the Executive Management
through series of committees, sub-committees, ad-hock committees, standing
committees assisting the line management.


8

SH ORT TERM LI QU I D I TY RA TI O A N A LYSI S
Cur r ent Rat io
On average the current rati o of Square Pharmaceuti cal s Li mi ted Bangl adesh was 1.62 duri ng
f i scal year (FY) 2006-2010. Accordi ng to current rati o, i t must be assumed that Square
Pharmaceuti cal s Li mi ted Bangl adesh was successf ul to meet i ts short term obl i gati ons very wel l
f or the past f i scal years and wi l l mai ntai n a successf ul heal thy f i nanci al perf ormance i n comi ng
years.
The current asset of the f i rm had i ncreased by 18.42% between the f i scal year of 2006 and 2010
but at the same ti me the current l i abi l i ti es had decreased by 1.95 %.
Whi l e anal yzi ng a f i rm’ s current assets, f i rm’ s i nventori es had pl ayed an i mportant rol e to
di scover f i rm actual posi ti on to meet short-term obl i gati on. The i nventori es of Square
pharmaceuti cal s Li mi ted Bangl adesh had positively changed by 13.75% annual l y on average
throughout the f i scal year of 2006 – 2010. Havi ng a huge amount of i nventory i s not good for a
f i rm. There i s a chance of havi ng outdated or sl ow movi ng product i n the i nventory. As a
pharmaceuti cal s f i rm thi s i s qui te a concern because they produce drugs whi ch are used by
humans and an outdated product mi ght cause some one i l l ness or death. Theref ore, i ncrease i n
i nventory i s a good si gn f or a pharmaceuti cal s company as f ar as thei r i nventory do not have
obsol ete products.
Fi rm’ s cash and cash equivalents had decreased by 18.13%, short term loan [current
asset] had decreased by 35.65 %, Trade debtors had i ncreased by 76.03% between the f i scal
year 2006 and 2010.
The decrease i n current l i abi l i ti es by 1.95% i s a posi ti ve si gn towards the growth of the
company and i ts abi l i t y to meet the short term obl i gati ons.
I n addi ti on, i n our depth anal ysi s of the f i rm’ s current asset and l i abi l i ti es f i gure we have f ound
that i n 2007 current asset of the f i rm reduced by 8.66 % and current l i abi l i ti es i ncreased by
13.04%. Thi s was caused by an i ncrease i n Short-term Bank Loans and Other Financial
Liabilities. Besi des i n l ast f i ve years the worst current rati o f i gure was i n 2008 FY. I n 2008 FY
the short-term bank l oans was 54.84% more than 2006 FY. Thi s i ncrease made f i rm more
vul nerabl e to meet i ts short term obl i gati ons than i ts previ ous f i scal years. I n contrar y, the f i rm
made si gni f i cant i mprovement to reduce i ts short-term bank loans i n FY 2009 and 2010. I n
2009 and 2010 FY the short-term bank l oan reduced by 42.53 % and 72.41 % f rom FY 2008.
Short-Term Bank Loans are the maj or porti on of current l i abi l i ti es f or f i rm f i nanci al f i gures.
Other current l i abi l i ti es accounts such as Trade Creditors, Long Term Loan (current
portion) and other liabilities expense has i ncreased throughout the f i scal years 2006-2010 of
Square Pharmaceuti cal s Li mi ted Bangl adesh.
2006 2007 2008 2009 2010
Current
Rat io
1

1.78 1.44 1.26 1.46 2.15
Table of Current Rat i o for Fi scal Year 2006-2010


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Qui ck Rat io (A ci d Test )
Square Pharmaceuti cal s Li mi ted Bangl adesh had an average of 0.91 for the f i scal year 2006-
2010.
0.91 i s a unheal thy f i gure f or a f i rm. Al ongsi de, the hi gher the f i gure, the better opportuni t y f or
the f i rm to el i mi nate i ts current l i abi l i ti es wi thout rel yi ng on i ts i nventory.
By anal yzi ng t he current asset and i nventory of thi s pharmaceuti cal s f i rm, on average the total
i nventory i s 44.40% of i ts current assets between FY 2006 and 2010 and thi s ref ers t hat the
f i rm’ s current asset consi sts a l arge porti on of i nventori es. Theref ore the f i rm wi l l need to
i ncrease the f i gures of other accounts, under i ts current asset and reduce the dependency on
i nventori es to meet short term obl i gati ons. I n addi ti on, Current assets wi thout the i nventori es
portion decreased by 4.54% between the f i scal year of 2006 and 2010 and the i nventori es of
Square pharmaceuti cal s Li mi ted Bangl adesh has i ncreased by 64.41% at the same ti me.
The f i rm had the worst qui ck rati o f i gure i n 2009 but eventual l y i t has i ncreased i n 2010 due to
a decl i ne i n i ts short-term bank loans.
2006 2007 2008 2009 2010
Quick
Rat io
2

1.19 0.84 0.68 0.66 1.16
Table of Qui ck Rat i o for Fiscal Year 2006-2010
N et Wor ki ng Capit al t o Tot al A sset s

On average Square Pharmaceuti cal s Li mi ted Bangl adesh had Net worki ng capi tal worth of
1,513,815,265.40 BDT between FY 2006 to 2010. Net Worki ng Capi tal to Total Assets rati o
shows a f i rm abi l i t y of short-term l i qui di ty. A posi ti ve Net Worki ng Capi tal shows that the f i rm
have meet the short term obl i gati ons and more l i kel y to have a f l at operati on i n f uture.
As stated bef ore, thi s f i rm’ s current asset had i ncreased by 18.42% between the f i scal year of
2006-2010 but at the same ti me the current l i abi l i ti es had decreased by 1.95 %.Due to thi s
di f f erence between current asset and current l i abi l i ti es the f i rm was abl e to have a posi ti ve Net
Worki ng Capi tal . I n addi ti on, Square Pharmaceuti cal s L i mi ted Bangl adesh Total Asset had
i ncreased by 61.63% between the FY 2006 and 2010 and Net Worki ng Capi tal had i ncreased by
44.42% i n the same peri od.
The f i rm f aced i ts worst Net Worki ng Capi tal to Total Assets rati o f i gure i n FY 2008 because
the f i rm had l owest Net Worki ng Capi tal i n terms of l ast 5 (f i ve) f i scal year caused by an
i ncrease i n short-term bank loans.
2006 2007 2008 2009 2010
NWC t o Tot al
Asset s
3

0.19 0.11 0.07 0.09 0.17
Table of NWC t o Tot al Asset s for Fi scal Year 2006-2010



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I nt er val M easur e
I nterval measure exhi bi ts a f i rm’ s abi l i t y to mai ntai n i ts dai l y busi ness expense by usi ng i ts
current assets j ust. I n other word thi s rati o i s expressed i n terms of days and shows that the f i rm
can cover i ts dai l y operati ng expense by rel yi ng on i ts current asset onl y and run i ts busi ness f or
speci f i c number of days.
I n case of Square Pharmaceuti cal s Li mi ted Bangl adesh, the average i nterval measure i s 260.26
days duri ng the f i scal years 2006-2010.
The dai l y operati ng expense and current asset of thi s pharmaceuti cal f i rm on average was
16,555,423.74 BDT and 4,148,771,230 BDT respecti vel y. On average the dai l y operati ng
expense of thi s f i rm had changed by 17.59 % annual l y on average between FY 2006 and 2010.
The current asset of the f i rm had i ncreased by 18.42% between the f i scal year of 2006 and 2010
but the dai l y operati ng expense had i ncreased at a staggeri ng rate of 90.92% at the same ti me.
Theref ore, the i nterval measure of Square Pharmaceuti cal s Li mi ted Bangl adesh had dropped by
132.62 daysi n FY 2010 f rom 2006, whi ch was approxi matel y 37.97% l ess than 2006.
I nterval measure provi des a strong vi ew of f i rm’ s abi l i t y to run i ts operati on even i t f aces any
f i nanci al di saster. I n present, Square Pharmaceuti cal s Li mi ted Bangl adesh i s not performi ng as
wel l as perf ormi ng i n FY 2006 accordi ng to i nterval measure. Theref ore, i t would advi sabl e f or
thi s f i rm to mi ni mi ze i ts operati ng cost and i ncrease i ts short term asset f or the betterment of the
f i rm.
2006 2007 2008 2009 2010
I nt erval
Measure
4

349.23 260.83 268.30 206.31 216.61
Table of I nt erval Measure (in days) for Fiscal Year 2006-2010
Cash Rat i o
Square Pharmaceuti cal s Li mi ted Bangl adesh had a cash rati o of 0.10 on average duri ng the
f i scal years 2006-2010. Cash rati o ref l ects f i rms abi l i t y to pay i ts current l i abi l i ti es, usi ng i ts
most l i qui date asset such as Cash and cash equi val ents onl y.
By eval uati ng the current asset and cash and cash equi val ents of thi s, on average the cash and
cash equi val ents was 5.87% of i ts current assets between FY 2006 and 2010 and thi s ref ers that
the f i rm’ s i nventori es consi st a l arge porti on i n i ts current asset. I n terms of other account, the
portion of cash and cash equi val ents i n current asset was ver y undersi zed and we must add that
f i rm’ s cash and cash equivalentshad decreased by 18.13% between 2006 and 2010 FY.
For the betterment of the f i rm, i t shoul d try to i ncrease i ts cash and cash equi val ents. Thi s woul d
hel p to establ i sh a good foundati on to attract i nvestors si nce many i nvestors take cash rati o
under del i berati on f or i nvesti ng i n a f i rm. The f i rm experi enced i ts worst cash rati o f i gure i n
2007 and by 2010 i t had comparati vel y reached to a better state of cash rati o.
2006 2007 2008 2009 2010
Cash Ratio
5
0.14 0.05 0.06 0.11 0.12
Table of Cash Rat i o for Fi scal Year 2006-2010
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LON G TERM LI QU I D I TY RA TI O A N A LYSI S

Tot al D ebt Rat i o
Duri ng the f i scal years 2006-2010, on average Square Pharmaceuti cal s Li mi ted Bangl adesh had
a debt rati o of 0.29 and total debt was worth of 3,422,741,464 BDT. The Total Debt Rati o
expresses the f racti on of i ts total debt rel ati ve to i ts total assets.
I n addi ti on, the total debt of the f i rm had i ncreased by 19.96% between f i scal 2006 and 2010.
Thi s was caused by si gni f i cant i ncreased i n short term bank l oans, l oan term secured l oans and
trade credi ts. Besi des throughout the FY 2006-2010, total assets of the f i rm had yearl y changed
at 12.91% on average but total debt of the f i rm had changed yearl y at 22.69% on average.
I n contrary, the company had more debt i n FY 2008, 47.95% more than FY 2006. And i n 2008
FY the short-term bank l oans was 54.84% more than 2006 FY. But the debt had decreased by
22.96% and 18.92% i n FY 2009 and FY 2010 respecti vel y compari ng to FY 2008. The f i rm’ s
debt rati o had decreased i n past 5 (f i ve) f i scal year and i n near f uture i t i s expected to have a
sound f i nanci al perf ormance based on the current si tuati on of i ts debt rati o.
The company had worst debt rati o i n 2008 FY though i t gradual l y recovers i tsel f and
establ i shed a strong f i nanci al f oundati on to overcome i ts debt.
2006 2007 2008 2009 2010
Tot al Debt Rat io
6
0. 31 0.30 0.34 0.25 0.23
Table of Tot al Debt Rat i o for Fiscal Year 2006-2010
D ebt Equi t y Rat i o
Debt equi ty rati o ref ers to a f i rm’ s i nvestment dependency on i ts debt and equi ty. I f a f i rm’ s
debt equi ty rati o i s 1 then i t shows that the f i rm rel i es more on debt f or i nvestment rather than
i ts own equi ty. Square Pharmaceuti cal s Li mi ted Bangl adesh had a strong f i nanci al backbone
si nce i ts debt equi t y rati o i s f ar bel ow 1 and we can say that they do not rel y a l ot on debt for
thei r i nvestment.
The company’ s equi ty had i ncreased by staggeri ng 80.48% between FY 2006 and 2010 though
the total debt of the f i rm had i ncreased by 19.96% at the same ti me.
Debt equi ty rati o al so shows that a f i rm’ s ri ski ness. I n case of Square Pharmaceuti cal s, i t i s
qui te unl i kel y to be ri sky si nce i t had debt equi ty rati o of 0.40 on average duri ng the FY 2006-
2010. I nvestors woul d be happy to i nvest i n such f i rm havi ng a good debt equi ty rati o.
Though thi s f i rm experi enced worst debt equi ty condi ti on i n FY 2008, i t progressi vel y had
reduced the rati o i n i ts f ol l owi ng FY. As we have observed bef ore i n 2008 FY, the short term
bank l oans was at peak i n l ast 5 (f i ve) FY. I t caused the rati o to i ncrease f rom 2007 FY.
2006 2007 2008 2009 2010
Debt -Equi t y
Rat io
7

0. 45 0.43 0.51 0.33 0.30
Table of Debt Equit y Rat i o for Fi scal Year 2006-2010
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Equi t y M ult ipli er
On average the equi ty mul ti pl i er of Square Pharmaceuti cal s Li mi ted Bangl adesh was 1.40
duri ng
FY 2006-2010. Si nce we have portrayed bef ore that the company’ s equi ty had i ncreased by
staggeri ng 80.48% and total Asset had i ncreased by 61.63% between the FY 2006 and 2010, the
company do not rel y on debt f or i ts i nvestment.
The equi t y mul ti pl i er shows a f i rm’ s asset s per 1 uni t of equi ty. I n case of Square
pharmaceuti cal s the rati o i s rel ati vel y f i ne and thi s f i rm observed i ts worst equi ty mul ti pl i er
condi ti on i n FY 2008.
2006 2007 2008 2009 2010
Equit y M ul t iplier
8
1.45 1.43 1.51 1.33 1.30
Table of Equi t y Mult ipli er Rat i o for Fi scal Year 2006-2010


Ti mes I nt er est Ear ned
Square Pharmaceuti cal s Li mi ted Bangl adesh had a ti me i nterest earned rati o of 9.19 on average
duri ng FY 2006-2010. Thi s rati o stats a f i rm’ s abi l i t y to meet i nterest obl i gati ons by usi ng i ts
earnings before income tax or EBI T.
I n thi s f i scal peri od, square pharmaceuti cal s EBI T had i ncreased by 87.20% and i nterest
payment had been i ncreased by 54.72%. Duri ng thi s peri od of ti me average EBI T of each year
was approxi matel y 2,483,706,253 BDT and i nterest expense was 286,914,843 BDT. So the
f i gures cl earl y shows that thi s f i rm had a better f i nanci al perf ormance accordi ng to i ts ti me
i nterest earned rati o f or l ast 5(f i ve) FY.
Though i n 2008 FY , f i rm’ s ti mes earned rati o drops to 6.58, whi ch was mi ni mum of l ast 5
(f i ve) FY. I n thi s speci f i c f i scal year the i nterest expense of the f i rm had i ncreased by 48.56%
compared to i ts precedi ng f i scal year. Besi des, i n 2008 FY the EBI T was 13.10% more than i ts
precedi ng f i scal year. The huge di f f erence between the i ncreased percenti l es of each account
causes the f i rm to have a l ow TI E rati o. But i n f ol l owi ng years the f i rm had i mproved on i ts
i nterest obl i gati on and i n FY 2010 i t had an excel l ent TI E rati o.
2006 2007 2008 2009 2010
Times Int erest
Ear ned
10

12.51 8.64 6.58 7.64 10.60
Table of Ti mes I nt erest Earned Rat i o for Fi scal Year 2006-2010

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Long Ter m D ebt
Long term debt rati o i s concerned wi th f i rm’ s l ong term debt. Long term debt do not changes
f requentl y al i ke short term debt. Square Pharmaceuti cal s Li mi ted Bangl adesh had an average
l ong term debt worth of 635,978,867 BDT f or FY 2006-2010. I n addi ti on, Company’ s equi ty
had i ncreased at a rate of 15.92% annual l y at the same ti me. On average l ong term debt rati o
duri ng thi s f i scal peri od was 0.07
Square pharmaceuti cal s had l owest l ong term debt rati o i n 2009 FY but i t had recovered i n
f ol l owi ng year maki ng the l ong term debt rati o better than bef ore.
2006 2007 2008 2009 2010
Long Term Debt
rat io
9

0.09 0.06 0. 07 0.04 0.08
Table of Long Term Debt Rat i o for Fi scal Year 2006-2010

Cash Cover age
Square Pharmaceuti cal s Li mi ted Bangl adesh had cash coverage of 11.17 on average duri ng FY
2006-2010. Cash coverage rati o represents a f i rm’ s abi l i t y to meet i ts i nterest expense by the
cash generated f rom i ts operati on. We have stated bef ore that i n thi s f i scal peri od, square
pharmaceuti cal s EBI T had i ncreased by 87.20% and i nterest payment had been i ncreased by
54.72%. Duri ng thi s peri od of ti me average EBI T of each year was approxi matel y
2,483,706,253 BDT and i nterest expense was 286,914,843 BDT. But i n cal cul ati ng cash
coverage, we must add the depreci ati on expense because i t i s a non cash expense. The f i rm had
worst cash coverage duri ng FY 2008 because i n thi s f i scal year i nterest expense of the f i rm had
i ncreased by 48.56% compared to i ts precedi ng f i scal year though the EBI T i ncreased at a rate
of 13.10% at the same ti me.
2006 2007 2008 2009 2010
Cash Cover age
Rat io
12

14.63 10.84 8. 13 9.28 12. 96
Table of Cash Coverage Rat i o for Fi scal Year 2006-2010

A SSET M A N A GEM EN T (TU RN OV ER) RA TI O A N A LYSI S
I nvent or y Tur nover and D ay’s Sales in I nvent or y
Square Pharmaceuti cal s Li mi ted Bangl adesh had an average cost of goods sol d val ue of
4,976,753,344 BDT duri ng FY 2006-2010. I nventory turnover represents f i rm’ s cost of goods
sol d per i nventory. The cost of goods sold had i ncreased f or the company by 86.11% between
FY 2006 and 2010 and the endi ng i nventory had i ncreased by 64.42% i n the same peri od. On
average the cost of goods sol d had i ncreased at a rate of 16.83% annual l y duri ng FY 2006-2010
peri od.


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The average i nventory turnover was 2.69 throughout FY 2006-2010. I f we take a cl oser l ook at
the tabl e of i nventory turnover rati o, i n FY 2008 i t was l owest among l ast 5 (f i ve) FY and i n
f ol l owi ng f i scal years the scenari o had i mproved and i n FY 2010 the f i rm have hi ghest
i nventory turnover f or past 5 (f i ve) f i scal year.
2006 2007 2008 2009 2010
Invent or y
Turnover
13

2.63 2. 76 2. 40 2.70 2.97
Table of I nvent ory Turnover Rat i o for Fi scal Year 2006-2010

Day’ s sal es i n i nventory (average days’ sal es i n i nventory) rati os show the ef f i ci ency of a f i rm.
I t represents f i rm’ s abi l i t y to use i nventory ef f i ci entl y. Square Pharmaceuti cal s Li mi ted
Bangl adesh had an average day’ s sal es i n i nventory of 136.24 days duri ng FY 2006-2010. The
f i rm day’ s sal es i n i nventory had reduced by 13.20% between FY 2006 and 2010. As a resul t
the f i rm had become ef f i ci ent i n usi ng i ts i nventory.
The worst day’ s sal es i n i nventory was recorded i n 2008 FY and i t was caused by a l ow
i nventory turnover of 2.40
2006 2007 2008 2009 2010
Day’s Sales in
Invent or y
14

138.98 132.05 152.34 135.04 122.78
Table of DSI Rat io for Fiscal Year 2006-2010

Recei vables Tur nover and D ays’ Sales i n Recei vables
Recei vabl es turnover ratios i l l ustrates how many ti mes per peri od the company col l ects i ts
average col l ectabl e amount. Square Pharmaceuti cal s Li mi ted Bangl adesh had an average
account recei vabl es worth of 391,530,719.20 BDT and i t had i ncreased by 76.03% between FY
2006 and 2010. Between FY 2006 and 2010, on average thi s f i rm had earned revenue of
8,626,387,092 BDT and had i ncreased by 88.22%. So, we can say that the company i s doi ng
wel l i n case of recei vabl es turnover.
The average recei vabl es turnover was 22.07 throughout FY 2006-2010. I n FY 2009 i t was
l owest among l ast 5 (f i ve) FY and i n f ol l owi ng f i scal years the si tuati on had i mproved though
the company had performed wel l i n FY 2007 and 2008 compari ng to recent years.
2006 2007 2008 2009 2010
Receivables
Turnover
15

21.09 23.23 22.92 20. 56 22. 55
Table of Receivabl es Turnover Rat i o for Fi scal Year 2006-2010

Day’ s sal es i n recei vabl es (Average Col l ecti on Peri od) rati o show how l ong the f i rm takes to
col l ect i ts trade debt. Square Pharmaceuti cal s Li mi ted Bangl adesh had an average day’ s sal es i n
i nventory of 16.57 days duri ng FY 2006-2010. The f i rm day’ s sal es i n recei vabl es had reduced
by 6.48% throughout FY 2006 and 2010. As a resul t the f i rm takes l ess ti me to col l ect i t
recei vabl es than precedi ng years.
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The worst day’ s sal es i n i nventory was recorded i n 2008 FY and i t was caused by a l ow
i nventory turnover of 2.40
2006 2007 2008 2009 2010
Day’s sales in
receivables
16

17.31 15.71 15.92 17. 75 16. 18
Table of DSR Rat i o for Fi scal Year 2006-2010

Payables Tur nover and D ays’ Sales i n Payables
Payabl es turnover ref ers how many ti mes per peri od the company pays i ts average payabl e
amount. The bi gger the turnover, the better i ts reputati on becomes to i ts suppl i er and credi tors.
Square Pharmaceuti cal s Li mi ted Bangl adesh had an average account payabl es worth of
151,976,756.20 BDT and i t had i ncreased by 397.18% between FY 2006 and 2010.
The average recei vabl es turnover was 45.05 throughout FY 2006-2010. I n FY 2007, i t was
hi ghest among l ast 5 (f i ve) FY and i n f ol l owi ng f i scal years the si tuati on had worsen. I n FY
2010, the worst payabl es turnover was recorded f or company’ s past 5 (f i ve) f i scal year.
2006 2007 2008 2009 2010
Payables
Turnover
17

44.41 70.43 48.10 45. 66 16. 62
Table of Payables Turnover Rat i o for Fi scal Year 2006-2010

Day’ s sal es i n payabl es (Average Payment Peri od) rati o show how l ong t he fi rm takes to pay i ts trade
credi t. Square Pharmaceuti cal s Li mi ted Bangl adesh had an average day’ s sal es i n payabl es of 10.19 days
duri ng FY 2006-2010. The fi rm day’ s sal es i n i nventory had increased by 167.14% throughout FY
2006 and 2010. As a resul t the fi rm takes more ti me to pay i ts payabl es than precedi ng years.
The worst day’ s sal es i n i nventory was recorded i n 2010 FY and i t was caused by a l ow payabl es
turnover of 16.62
2006 2007 2008 2009 2010
Day’s Sales in
Payables
18

8.22 5. 18 7. 59 7.99 21. 96
Table of DSP Rat i o for Fiscal Year 2006-2010



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N et Wor ki ng Capit al Tur nover
Net worki ng capi tal turnover shows how much the f i rm i s earni ng f rom i nvesti ng i n i ts worki ng
capi tal . The bi gger the turnover, the better i t i s f or the company. Square Pharmaceuti cal s
Li mi ted Bangl adesh had an average net worki ng capi tal worth of 1,513,815,265.40 BDT and i t
had i ncreased by 44.42% between FY 2006 and 2010.
Duri ng FY 2006-2010, the average net worki ng capi tal turnover was 6.36; I n FY 2008, i t was
hi ghest among l ast 5 (f i ve) FY and i n f ol l owi ng f i scal years the si tuati on had worsen. I n FY
2010, the worst net worki ng capi tal turnover was recorded for company’ s past 5 (f i ve) f i scal
year. I n FY 2010, net worki ng capi tal was112.66% and the sal es was onl y 16.72 % more than
FY 2009. So, the huge di f f erence between the i ncreased accounts caused the net worki ng capi tal
turnover to f al l .
2006 2007 2008 2009 2010
NW C Turnover
19
3. 44 6. 66 9.06 8.17 4.48
Table of NWC Turnover Rat i o for Fiscal Year 2006-2010

Fixed A sset Tur nover
Fi xed asset turnover shows how much the f i rm i s earni ng f rom i nvesti ng i n i ts f i xed assets. The
bi gger the turnover, the better the f i rm gai ns f rom f i xed assets i nvestment. Square
Pharmaceuti cal s Li mi ted Bangl adesh had average f i xed assets worth of 4,084,733,699 BDT
and i t had i ncreased by 147.64% between FY 2006 and 2010.
Duri ng FY 2006-2010, the average f i xed asset turnover was 2.17; I n FY 2006, i t was hi ghest
among l ast 5 (f i ve) FY and i n f ol l owi ng f i scal years the si tuati on had worsen. I n FY 2009, the
worst f i xed asset turnover was recorded f or company’ s past 5 (f i ve) f i scal year. I n FY 2010,
though the si tuati on had i mproved.
2006 2007 2008 2009 2010
Fixed Asset
Turnover
20

2. 68 2. 12 2.02 2.00 2.04
Table of Fi xed Asset Turnover Rat i o for Fi scal Year 2006-2010

Tot al A sset Tur nover
Square Pharmaceuti cal s Li mi ted Bangl adesh had total asset turnover of 0.70 on average duri ng
FY 2006-2010. Total asset turnover represents a f i rm’ s return f rom i ts i nvestment i n asset.
Square pharmaceuti cal s total asset had i ncreased by 61.63% and average total asset was
approxi matel y 12,153,959,574 BDT. The f i rm had worst asset turnover duri ng FY 2006 and
2008. But i n succeedi ng the asset turnover had rai sed to a heal thy l evel .
2006 2007 2008 2009 2010
Tot al Asset
Turnover
21

0.65 0. 72 0. 65 0.74 0.76
Table of Tot al Asset Turnover Rat i o for Fi scal Year 2006-2010
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PROFI TA BI LI TY RA TI O A N A LYSI S
Pr ofi t M ar gi n
Prof i t margi n rati o represents the f i gure of a f i rm’ s earni ngs of net prof i ts agai nst i ts net sal es.
Every f i rm have desi re to have a bi g prof i t margi n. Though i f a f i rm’ s prof i t margi n i s l ow, i t
does not mean that the f i rm i s l osi ng money wi th ever y sal e occurs i n i ts f avor. Square
Pharmaceuti cal s Li mi ted Bangl adesh had net sal es of 8,626,387,092 BDT on average and i t
had i ncreased by 88.22% between FY 2006 and 2010. Duri ng the same f i scal peri od, on average
the net i ncome af ter tax was 1,565,779,054 BDT and had i ncreased by 79.08%
I n case of Square Pharmaceuti cal s, i t’ s prof i t margi n had been stabl e duri ng FY 2006-2010.The
average prof i t margi n was 0.18; I n FY 2006, i t was hi ghest among l ast 5 (f i ve) FY. Moreover,
i n f ol l owi ng 2 (two) f i scal years the rati o had sl i ghtl y f al l . I n FY 2007 and 2008 the net prof i t
had i ncreased by 11.78% and 6.03% respecti vel y, compared to thei r earl i er year. Though, net
prof i t of FY 2009 had i ncreased by 36.78% but i n subsequent year i ts growth had dropped to
10.47%.
However, net sal es duri ng FY 2007 and 2008 had i ncreased by 23.17% and 10.09%
respecti vel y, compared to thei r precedi ng year and net sal es of FY 2009 had i ncreased by
18.93% but i n subsequent year i ts growth had dropped to 16.72%. So as we can observe that
growth of net sal es and net prof i t of FY 2008, 2009 and 2010 were l ess than thei r respecti ve
precedi ng year, causi ng the prof i t margi n rati o to fal l .
2006 2007 2008 2009 2010
Prof i t M argin
22
0.19 0. 17 0. 17 0.19 0.18
Table of Profit Margi n Rat i o for Fiscal Year 2006-2010
Ret ur n on A sset s
Return on assets rati o or ROA represents f i rm’ s net prof i ts agai nst i ts total assets. Li ke prof i t
margi n, i f t he number of rati o i s bi g than i t shows that the f i rm i s earni ng wel l agai nst the
i nvestment on f i rm’ s assets.
For Square Pharmaceuti cal s Li mi ted Bangl adesh, the return on assets rati o on average was 0.13
duri ng FY 2006-2010. I n addi ti on, the rati o di d not f l uctuate a lot duri ng thi s peri od. So we can
come to a concl usi on that the f i rm di d not f ace any seri ous f i nanci al i ssue to mai ntai n the
bal ance between i ts net i ncome and total asset. However, i n FY 2008, the ROA was l owest
among l ast 5 (f i ve) FY. I t was caused by a l ow growth (6.03%) of net prof i t compared to i ts
precedi ng year. At the same ti me, total asset i ncreased by 21.13%. So the huge gap of growth
between total asset and net prof i t caused ROA i n 2008 to f al l . Neverthel ess, the company
bounces back and had better ROA i n FY 2009 than FY 2008. Si nce the growth of net prof i t
(36.78%) was greater than the growth of total asset (4.31%) i n FY 2009. I n FY 2010 the rati o
was i ndi f f erent wi th FY 2009 though the growth of net prof i t (10.47%) was l ess than the growth
of total assets (16.72%). But the growth of net prof i t i n FY 2009 was too huge whi ch makes up
the mi ssi ng growth of FY 2010 and hel ped ROA to stay constant.
2006 2007 2008 2009 2010
Ret urn on Asset s
23
0. 13 0. 12 0.11 0.14 0.14
Table of Ret urn on Asset s

Rat i o for Fi scal Year 2006-2010
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Ret ur n on Equi t y
Return on equi ty rati o or ROE represents f i rm’ s net prof i ts agai nst i ts total equi ty. The
di f f erence between ROA and ROE i s that ROE shows the di f f erence between net prof i t and
total equi ty of a f i rm.
For Square Pharmaceuti cal s Li mi ted Bangl adesh, the return on equi ty rati o on average was 0.18
duri ng FY 2006-2010. Al i ke ROA, the rati o di d not f l uctuate a l ot duri ng thi s peri od. So we can
approach to a concl usi on t hat the f i rm di d not f eature any seri ous f i nanci al i ssue to mai ntai n the
bal ance among i ts net i ncome and total equi ty. However, i n FY 2008, the ROE was l owest
among l ast 5 (f i ve) FY. I t was caused by a l ow growth (6.03%) of net prof i t compared to i ts
precedi ng year. At the same ti me, total equi ty i ncreased by 14.78%. So the gap of growth
between total asset and net prof i t caused ROE i n 2008 to f al l . Neverthel ess, the company
bounces back and had better ROE i n FY 2009 than FY 2008. Si nce the growth of net prof i t
(36.78%) was twi ce than the growth of total equi ty (18.21%) i n FY 2009. Because growth of
net prof i t (10.47%) and total equi ty were (16.13%) less than i ts precedi ng year, i n FY 2010 the
rati o was a bi t l ow than FY 2009
2006 2007 2008 2009 2010
Ret urn on Equi t y
24
0. 18 0. 18 0.16 0.19 0.18
Table of Ret urn on Equi t y

Rat i o for Fi scal Year 2006-2010

M A RK ET V A LU E RA TI O A N A LYSI S
Ear ni ngs per Shar e
Square Pharmaceuti cal s Li mi ted Bangl adesh had earni ngs per share of 180.55 BDT on average
duri ng FY 2006-2010. Earni ngs per share represent a f i rm’ s prof i ts f rom i ts each outstandi ng
share. The company had outstandi ng shares of 9,406,908 on average and had i ncreased by
203.75% duri ng FY 2006-2010. At the same ti me net prof i t of the company was 1,565,779,054
BDT on average and had i ncreased by 79.08%
I n FY 2006, EPS was hi ghest among l ast 5 (f i ve) FY. Moreover, EPS af ter FY 2006 begun to
f al l , reached the mi ni mum at FY 2010. Though, a descendi ng EPS does not mean that the f i rm
had performed badl y duri ng that f i scal peri od. I n contrary, net prof i t and outstandi ng number of
share had changed annual l y at a rate of 16.26% and 32.50% on average respecti vel y duri ng FY
2006-2010.
Theref ore, EPS of thi s company were f al l i ng af ter FY 2006 because the annual growth rate of
outstandi ng share was greater than the annual growth rate of net prof i t.
2006 2007 2008 2009 2010
Ear nings per
Share
25

234.67 218.61 154.53 156. 56 138.36
Table of Earni ngs per Share rat i o for Fi scal Year 2006-2010


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PE Rat i o
Square Pharmaceuti cal s Li mi ted Bangl adesh had PE rati o of 18.42 on average duri ng FY 2006-
2010. PE rati o represents how much an i nvestor i s payi ng f or one taka of current earni ng. A
hi gher PE rati o shows that the f i rm has prospect f or good return i n f uture and a l ower PE rati o
ref ers opposi te. Hi stori cal report on square pharmaceuti cal s shows that the f i rm’ s pri ce of share
f l uctuated duri ng FY 2006-2010 a lot. I n FY 2008 and 2009, the pri ce per share was 4,110 BDT
and 2,935 BDT respecti vel y. So the pri ce per share of FY 2009 was 28.59% l ess than i ts
precedi ng year and i t was 22.01% greater i n FY 2010 than FY 2009.
I n FY 2006, EPS was hi ghest among l ast 5 (f i ve) FY. Moreover, EPS af ter FY 2006 begun to
f al l , hi t the mi ni mum poi nt at FY 2010 as stated i n previ ous segment of rati o anal ysi s. The EPS
was recorded l owest i n FY 2010, among l ast 5 (f i ve) FY. The EPS of FY 2008 was 29.31% l ess
than i ts precedi ng year. However the f ol l owi ng f i scal year had an i ncrease of 1.31% i n EPS and
FY 2010 had a decrease of EPS by -11.62% compared to FY 2009. Theref ore, the i nconsi stent
growth of EPS and PPS causes an i nconsi stent PE rati o throughout the FY 2006-2010. And
based on current PE rati o, i nvestors are expecti ng a great prospect of the company si nce 25.88
i s a good f i gure as a PE rati o.
2006 2007 2008 2009 2010
PE Rat io
26
9. 70 11.19 26. 60 18.75 25. 88
Table of PE Rat i o for Fi scal Year 2006-2010

Sales per Shar e
Square Pharmaceuti cal s Li mi ted Bangl adesh had sal es per share of 996.11 BDT on average
duri ng FY 2006-2010. Sal es per share represent a f i rm’ s net revenue f rom i ts each outstandi ng
share. The company had outstandi ng shares of 9,406,908 on average and had i ncreased by
203.75% duri ng FY 2006-2010. At the same ti me net sal es of the company had i ncreased by
8,626,387,092 BDT on average and had i ncreased by 88.22%.
I n FY 2007, SPS was hi ghest among l ast 5 (f i ve) FY. Moreover, SPS af ter FY 2007 begun to
f al l , reached the mi ni mum at FY 2010. Though, a descendi ng SPS does not mean that the f i rm
had performed badl y duri ng that f i scal peri od. I n contrary, net sal es and outstandi ng number of
share had changed annual l y at a rate of 17.23% and 32.50% on average respecti vel y duri ng FY
2006-2010.
Theref ore, SPS of thi s company were f al l i ng af ter FY 2007 because the annual growth rate of
outstandi ng share was greater than the annual growth rate of net sal es.
2006 2007 2008 2009 2010
Sal es per Share
27
1225. 83 1258. 19 923.45 813. 50 759.60
Table of Sale per share Rat i o for Fi scal Year 2006-2010

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Pr ice- Sales Rat i o
Square Pharmaceuti cal s Li mi ted Bangl adesh had pri ce-sal es rati o of 3.31 on average duri ng FY
2006-2010. The smal l er thi s rati o (l ess than 1.0) i s usual l y t hought to be a better i nvestment
si nce the i nvestor i s payi ng l ess f or each uni t of sal es. Hi stori cal report on square
pharmaceuti cal s shows that the f i rm’ s pri ce of share f l uctuated duri ng FY 2006-2010 a l ot. I n
FY 2008 and 2009, the pri ce per share was 4,110 BDT and 2,935 BDT respecti vel y. The pri ce
per share of FY 2009 was 28.59% l ess than i ts precedi ng year and i t was 22.01% greater i n FY
2010 than FY 2009.
I n FY 2006, SPS was hi ghest among l ast 5 (f i ve) FY. Moreover, SPS af ter FY 2007 begun to
f al l , reached the mi ni mum at FY 2010 as stated i n previ ous segment of rati o anal ysi s. The SPS
of FY 2008 was 26.60% l ess than i ts precedi ng year. However, SPS of FY 2009 and 2010 had
decreased by 11.62% and 6.63% compared to thei r respecti ve previ ous year. Theref ore, the
company had been doi ng bad cause the i nvestors were payi ng more f or each uni t of sal es as the
pri ce-sal es rati o had i ncreased af ter FY 2007.
2006 2007 2008 2009 2010
Price- Sales rat io
2 8
1. 86 1. 94 4.45 3.61 4.71
Table of Pri ce-Sales Rat i o for Fiscal Year 2006-2010



Book V alue per Shar e
Square Pharmaceuti cal s Li mi ted Bangl adesh had Book val ue per share of 1009.96 BDT on
average duri ng FY 2006-2010. Thi s rati o states a f i rm’ s val ue of equi ty per outstandi ng share.
The company had outstandi ng shares of 9,406,908 on average and had i ncreased by 203.75%
duri ng FY 2006-2010. At the same ti me total equi ty of the company was 8,731,218,110 BDT
on average and had i ncreased by 80.48%
I n FY 2006, BPS was hi ghest among l ast 5 (f i ve) FY. Moreover, BPS af ter FY 2006 begun to
f al l , reached the mi ni mum at FY 2010. Though, a descendi ng BPS does not mean that the f i rm
had performed badl y duri ng that f i scal peri od. I n contrary, total equi ty and outstandi ng number
of share had changed annual l y at a rate of 15.92% and 32.50% on average respecti vel y duri ng
FY 2006-2010.
Theref ore, BPS of thi s company was f al l i ng af ter FY 2006 because the annual growth rate of
outstandi ng share was greater than the annual growth rate of total equi ty.
2006 2007 2008 2009 2010
Book Value per
Share
29

1288. 65 1230. 08 941.25 824. 16 765.68
Table of Book Value per Share Rat i o for Fi scal Year 2006-2010



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M ar ket t o Book Rat i o
Square Pharmaceuti cal s Li mi ted Bangl adesh had market to book rati o of 3.27 on average duri ng
FY 2006-2010. Thi s rati o states compari son between f i rm’ s market val ue and i ts cost of
i nvestment. A hi gher market to book rati o shows that f i rm’ s market val ues i s greater than i ts
book val ue and negati ve rati o shows that f i rm’ s market val ue i s l ess than i ts book val ue. I n FY
2008 and 2009, the pri ce per share was 4,110 BDT and 2,935 BDT respecti vel y. The pri ce per
share of FY 2009 was 28.59% l ess than i ts precedi ng year and i t was 22.01% greater i n FY
2010 than FY 2009.
I n FY 2006, BPS was hi ghest among l ast 5 (f i ve) FY. Moreover, BPS af ter FY 2006 begun to
f al l al i ke EPS and reached at FY 2010 i t was mi ni mum of l ast 5 FY. I n FY 2008 and 2009, the
BPS was 23.48% and 12.44% correspondi ngl y l ess than thei r respecti ve previ ous year. As a
resul t the book val ue per share dropped to 12.44% i n FY 2009 and 7.09% i n FY 2010 compared
to thei r respecti ve previ ous year. But, the market to book rati o i ncreased to a better f i gure and
cl earl y states that the company’ s market val ue had i ncreased.
2006 2007 2008 2009 2010
M arket t o book
Rat io
30

1. 77 1. 99 4.37 3.56 4.68
Table of Market t o Book Rat i o for Fi scal Year 2006-2010

D I V I D EN D RA TI O A N A LYSI S
D i vi dend per Shar e
Square Pharmaceuti cal s Li mi ted Bangl adesh had di vi dend per share of 44.88 BDT on average
duri ng FY 2006-2010. Thi s rati o states the amount of di vi dend a f i rm pays on each outstandi ng
share. The average total di vi dend of the company was 368,781,120 BDT and had i ncreased by
45.17% throughout FY 2006-2010. I n FY 2008 the total di vi dend of share of the company
had decreased by 20%. I n FY 2009 and 2010, total di vi dend had i ncreased by 20% and 35%
respecti vel y.
The company had outstandi ng shares of 9,406,908 on average and had i ncreased by 203.75%
duri ng FY 2006-2010. . I n FY 2008 and 2009 the outstandi ng number of share of the company
had i ncreased by 50% and 35%, f ol l owed by a 25% i ncrease i n FY 2010 compared to thei r
respecti ve previ ous year.
I n FY 2008 and 2009 the di vi dend per share of the company dropped by 46.67% and 11.11%,
compared to thei r respecti ve previ ous year. But i t i ncreased by 8% i n FY2010, of f ered a better
di vi dend per share to i t i nvestor than FY 2009. DPS depends on f i rms outstandi ng number of
shares and total di vi dend al l otted f or the sharehol ders. I f a f i rm’ s DPS i s f al l i ng i t does not
mean that the f i rm i s of f eri ng f ewer di vi dends than bef ore. I t mi ght ref l ect that the f i rm’ s
di vi dend growth i s l ess than the growth of i ts outstandi ng number of shares. I n case of square
pharmaceuti cal s, the growth rate of share outstandi ng was greater than the growth of total cash
di vi dend. And thi s caused the DPS to f al l .
2006 2007 2008 2009 2010
Di vi dend per
Share
31

66.96 62.50 33. 33 29.63 32. 00
Table of Divi dend per Share Rat i o for Fi scal Year 2006-2010
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Payout Rat i o
Square Pharmaceuti cal s Li mi ted Bangl adesh had payout rati o of 0.24 on average duri ng FY
2006-2010. Thi s rati o states how wel l the earni ng supports the di vi dend payment of the f i rm. A
hi gher payout rati o ref ers that the f i rm have a strong backbone f or i ts di vi dend and a l ower
payout rati o ref ers opposi te. I n FY 2008 and 2009 DPS were 33.33 BDT and 29.63 BDT. I n FY
2009, i t had dropped by 11.10% and i n FY 2010 i t had i ncreased by 8%.
However, net sal es duri ng FY 2007 and 2008 had i ncreased by 23.17% and 10.09%
respecti vel y, compared to thei r precedi ng year and net sal es of FY 2009 had i ncreased by
18.93% but i n subsequent year i ts growth had dropped to 16.72%. Due to the di f f erence
si tuati on of such growth and f al l of both rati o, payout rati o f l uctuated and i n recent f i scal year.
2006 2007 2008 2009 2010
Payout Rat io
3 2
0. 29 0. 29 0.22 0.19 0.23
Table of Payout Rat i o for Fi scal Year 2006-2010


Ret ent i on Rat i o
Square Pharmaceuti cal s Li mi ted Bangl adesh had payout rati o of 0.76 on average duri ng FY
2006-2010. Thi s rati o shows the proporti on of net i ncome, whi ch i s not pai d as di vi dend. I n
other word we coul d say that thi s rati o ref l ects a company’ s proporti on retai ned earni ngs of net
i ncome. The hi gher retenti on rati o ref ers that the f i rm have greater retai ned earni ngs than cash
di vi dend and l ower retenti on rati o ref ers opposi te. I n FY 2008 and 2009 retai ned earni ngs were
97,418,224 BDT and 153,140,253 BDT. I n FY 2009, i ts growth was 29.27% and i n FY 2010 i t
had i ncreased by 4.52%
However, net sal es duri ng FY 2007 and 2008 had i ncreased by 23.17% and 10.09%
respecti vel y, compared to thei r precedi ng year and net sal es of FY 2009 had i ncreased by
18.93% but i n subsequent year i ts growth had dropped to 16.72%. The company had better
f i gure i n retenti on rati o f or past 5 (f i ve) f i scal years. Due to the di f f erence between the growth
of retai ned earni ngs and net prof i t, the retent i on rati o was sl i ghtl y di f f erent i n each f i scal year
2006 2007 2008 2009 2010
Ret ent i on Rat i o
33
0. 71 0. 71 0.78 0.81 0.77
Table of Ret ent i on Rat i o for Fiscal Year 2006-2010


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Fr ee Cash Flow Rat i o A nalysis
Fr ee Cash Flow per Shar e
Squar e Phar maceut i cal s Li mi t ed Bangl adesh had FCF per shar e of 195.15 BDT on
average dur i ng FY 2006-2010. Thi s rat i o shows a measur e of a company's fi nanci al
fl exi bi li t y t hat i s det er mi ned by di vi di ng fr ee cash fl ow by t he t ot al number of
shar es out st andi ng. Thi s measur e ser ves as a proxy for measur i ng changes i n
ear ni ngs per share. The fr ee cash fl ow per shar e can be used t o gi ve a prel i mi nary
pr edi ct i on concer ni ng fut ur e shar e pr i ces. When a fi r m's shar e pr i ce i s l ow and fr ee
cash fl ow i s on t he r i se, t he odds ar e good t hat ear ni ngs and shar e val ue wi l l soon
be on t he up, because a hi gh cash fl ow per shar e val ue means t hat ear ni ngs per
shar e shoul d pot ent i al l y be hi gh as wel l . I n FY 2008 and 2009 FCF were 2,032,183,10 5 BDT
1, 962,412, 823 BDT. In FY 2009 and 2010, i t s r educt i on w er e 3.56% and 66.29%
However, The Company had outstandi ng shares of 9,40 6, 908 on aver age and had i ncr eased by
203.75% dur i ng FY 2006-2010. . I n FY 2009 and 2010 the outstandi ng number of share of the
company had i ncreased by 35% and 25% co mpar ed t o t hei r r espect i ve pr evi ous year . Ther ef or e, t he
r educt i on of FCF and gr ow t h of shar e out st andi ng caused t he FCF per shar e t o decr ease i n FY 2009
and 2010.
2006 2007 2008 2009 2010
FCF per Share
34
250.32 257.44 227.25 162. 56 78. 20
Table of FCF per Share Rat i o for Fi scal Year 2006-2010


Pr i ce t o FCF Rat i o
Square Pharmaceuti cal s Li mi ted Bangl adesh had pri ce to FCF rati o of 20.11 on average duri ng FY
2006-2010.Thi s rati o ref ers a company's market pri ce to i ts l evel of annual free cash fl ow. The bi gger
the rati o, the more val uabl e the company becomes i n terms of i ts market val ues. Hi stori cal report on
square pharmaceuti cal s shows that the fi rm’ s pri ce of share fl uctuated duri ng FY 2006-2010 a l ot. I n
FY 2008 and 2009, the pri ce per share was 4,110 BDT and 2,935 BDT respecti vel y. The pri ce per
share of FY 2009 was 28.59% l ess than i ts precedi ng year and i t was 22.01% greater i n FY 2010 than
FY 2009.
I n FY 2007, pri ce to FCF rati o was hi ghest among l ast 5 (f i ve) FY. Moreover, SPS after FY 2007
begun to fal l , reached the mi ni mum at FY 2010 as stated i n previ ous segment of rati o anal ysi s. The
FCF per share of FY 2008 was 13.28% l ess than i ts precedi ng year. I n addi ti on, FCF per share of FY
2009 and 2010 had decreased by 39.79% and 107.88% compared to thei r respecti ve previ ous year. As
we can see, due to a huge gap between the growth of pri ce per share and reducti on of FCF per share,
pri ce to FCF rati o began to i ncrease whi ch states that the company f aced a tough ti me to bal ance i ts
FCF per share wi th pri ce per share.

2006 2007 2008 2009 2010
Price t o FCF Rat io
35
9. 09 9. 51 18. 09 18.06 45. 79
Table of Pri ce t o FCF Rat i o

Rat i o for Fi scal Year 2006-2010

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Capi t al St r uct ur e
FY Weight of
Debt
Weight of
Equity
Cost of Debt Cost of
Equity
WACC
2006 17.12% 82.88% 7.21% 13.21% 11.90%
2007 15.75% 84.25% 7.21% 13.21% 12.00%
2008 14.02% 85.98% 7.21% 13.21% 12.12%
2009 4.39% 95.61% 7.21% 13.21% 12.87%
2010 4.80% 95.20% 7.21% 13.21% 12.84%
100% Equi ty
Fi nanced*
- 100% - 13.21% 13.21%
50% Debt and
50% Equi ty
Fi nanced*
50% 50% 7.21% 13.21% 9.31%
* Fi scal y ear 2010
V alue of U nlever ed Fi r m
Square pharmaceuti cal s EBI T had i ncreased by 87.20% duri ng FY 2006-2010 and average
EBI T of each year was approxi matel y 2,483,706,253 BDT. I n FY 2010 EBI T was hi ghest
among l ast 5 (f i ve) FY about 3,275,183,812 BDT. Duri ng thi s year the tax rate was 24. 85 %
and un l ever ed cost o f capi tal was 12.84%. As a resul t, square pharmaceuti cal s val ue of
unl evered was 19,169,008,059 BDT
V alue of Lever ed Fi r m
Square pharmaceuti cal s val ue of unl evered was 19,169,008,059 BDT i n FY 2010. The
amount of total debt 2,231,167,169 BDT and the tax rate was 24.85%. So the f i rm’ s val ue as
a l evered f i rm was 19,723,453,100 BDT i n FY 2010.
Pr esent V alue of Tax Shi eld
Square pharmaceuti cal s Li mi ted Bangl adesh had a cost of debt of 7.21% i n FY 2010. The
amount of total debt 2,231,167,169 BDT and the tax rate was 24.85%. Present val ue of Tax
Shi el d was 554,445,041 BDT

Gr aph of Capi t al St r uct ur e in FY 2010
F
F
I
L=
19, 723, 453, 1ûû F
L
= F
U
+ T
C
× D

F
U




I n 2010 the val ue of the f arm was 46,521,197,669 BDT, whi ch was 4.80% debt f i nanced and
95.20% equi ty f i nanced. The val ue of the f i rm wi l l be hi gher i f they borrow more because of
the tax shi el d but i t al so i ncreases the cost of bankruptcy. Af ter borrowi ng, f rom a certai n
l evel the val ue of the f i rm wi l l decl i ne. The chances of bankruptcy of the f i rm i ncreases as
soon i t borrows more. So the opti mal capi tal structure i s at that poi nt on whi ch f i rm’ s val ue i s
higher and WACC is lower.

hi gher and WACC i s l ower.
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Rat io / Fiscal Year 2006 2007 2008 2009 2010
Short Term Debt Rat io
Cur r ent Rat i o 1.78 1. 44 1.26 1.46 2. 15
Qui ck Rat i o 1.19 0. 84 0.68 0.66 1. 16
Cash Rat i o 0.14 0. 05 0.06 0.11 0. 12
Int er val M easur e 349.23 260.83 268.30 206.31 216.61
Net Wor ki ng Capi t al t o Tot al Asset s 0.19 0. 11 0.07 0.09 0. 17
Long Ter m Debt Rat io
Tot al Debt Rat i o 0.31 0. 30 0.34 0.25 0. 23
Debt -Equi t y Rat i o 0.45 0. 43 0.51 0.33 0. 30
Equi t y M ul t i pl i er 1.45 1. 43 1.51 1.33 1. 30
Long Ter m Debt Rat i o 0.09 0. 06 0.07 0.04 0. 08
Ti mes Int er est Ear ned 12. 51 8. 64 6.58 7.64 10.60
Cash Cover age Rat i o 14. 63 10.84 8.13 9.28 12.96
Turnover Rat io
Invent or y Tur nover 2.63 2. 76 2.40 2.70 2. 97
Days Sal es i n Invent or y 138.98 132.05 152.34 135.04 122.78
Recei vables Tur nover 21. 09 23.23 22. 92 20. 56 22.55
Aver age Col l ect i on Per i od 17. 31 15.71 15. 92 17. 75 16.18
Payabl es Tur nover 44. 41 70.43 48. 10 45. 66 16.62
Aver age Payment Per i od 8.22 5. 18 7.59 7.99 21.96
NWC Tur nover 3.44 6. 66 9.06 8.17 4. 48
Fi xed Asset s Tur nover 2.68 2. 12 2.02 2.00 2. 04
Tot al Asset s Tur nover 0.65 0. 72 0.65 0.74 0. 76
Prof it abilit y Rat io
Pr of i t M ar gi n 0.19 0. 17 0.17 0.19 0. 18
Ret ur n on Asset s 0.13 0. 12 0.11 0.14 0. 14
Ret ur n on Equi t y 0.18 0. 18 0.16 0.19 0. 18
M arket Value Rat io
Ear ni ngs Per Shar e 234.67 218.61 154.53 156.56 138.36
PE Rat i o 9.70 11.19 26. 60 18. 75 25.88
Sal e Per Shar e 1225.83 1258. 19 923.45 813.50 759.60
Pr i ce- Sal es r at i o 1.86 1. 94 4.45 3.61 4. 71
Book Val ue Per Shar e 1288.65 1230. 08 941.25 824.16 765.68
M ar ket t o Book Rat i o 1.77 1. 99 4.37 3.56 4. 68
Dividend Rat io
Ear ni ngs Per Shar e 234.67 218.61 154.53 156.56 138.36
Di vi de Per Shar e 66. 96 62.50 33. 33 29. 63 32.00
Payout Rat i o 0.29 0. 29 0.22 0.19 0. 23
Ret ent i on Rat i o 0.71 0. 71 0.78 0.81 0. 77
Fr ee Cash Flow Rat io
Fr ee Cash Fl ow per Shar e 250.32 257.44 227.25 162.56 78.20
Pr i ce t o Fr ee Cash Fl ow Rat i o 9.09 9. 51 18. 09 18. 06 45.79


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Bal ance Sheet of Square Pharmaceut icals Limit ed Bangl ade sh for Fiscal Year 2006 - 2010


2006 2007 2008 2009 2010
ASSETS:

Non- Current Asset s: 5, 267,302, 357 6,804, 429,292 8, 291,290, 984 9,407, 730,001 10, 255,189, 084
Propert y, Plant and Equi pment -
Carr ying Value
2, 273,761, 161 3,531, 003,509 4, 088,432, 171 4,899, 679,832 5, 630,791, 822
Capit al W ork- in- Pr ogress 1, 077,707, 832 481,239, 419 591, 114,649 N/ A 634, 347,093
I nvest ment - Long Term ( at Co st ) 1, 915,833, 364 2,792, 186,364 3, 611,744, 164 4,508, 050,169 3, 990,050, 169
Curr ent Asset s: 4, 031,684, 955 3,682, 510,712 4, 411,836, 436 3,843, 512,855 4, 774,311, 194
I nvent ories 1, 342,364, 478 1,544, 191,798 2, 026,736, 322 2,098, 755,231 2, 207,078, 082
Trade Debt ors ( Account s Recei vables) 288, 732,137 322,864, 637 360, 245,646 477,562, 002 508, 249,174
Advances, Deposit s and Prepaym ent s 166, 492,706 236,455, 395 288, 806,440 260,330, 162 358, 250,076
I nvest ment i n M ar ket able Securit i es
( at Cost )
20, 250,000 20,250, 000 20, 250,000 20,250, 000 221, 269,226
Short Term Loan 1, 897,124, 652 1,418, 893,703 1, 510,502, 334 693,157, 720 1, 220,736, 941
Cash and Cash Equival ent s 316, 720,982 139,855, 179 205, 295,694 293,457, 740 258, 727,695
TOTAL ASSETS 9, 298,987, 312 10486940004 12, 703,127, 420 13,251, 242,856 15, 029,500, 278

SHAREH OLDERS' EQUITY AND
LI ABI LITI ES:

Sharehol ders' Equi t y: 6, 402,014, 772 7,333, 257,612 8, 417,040, 705 9,949, 397,634 11, 554,379, 825
Share Capit al 496, 800,000 596,160, 000 894, 240,000 1,207, 224,000 1, 509,030, 000
Share Prem ium 2, 035,465, 000 2,035, 465,000 2, 035,465, 000 2,035, 465,000 2, 035,465, 000
Shares Out st andi ng 4, 968,000 5,961, 600 8, 942,400 12,072, 240 15, 090,300
General Reserve 105, 878,200 105,878, 200 105, 878,200 105,878, 200 105, 878,200
Tax Hol iday Reserve 947, 678,690 1,101, 935,237 1, 101,935, 237 1,101, 935,237 1, 101,935, 237
Ret ai ned Ear ni ngs 2, 816,192, 882 3,493, 819,175 4, 279,522, 268 5,498, 895,197 6, 802,071, 388
Non- Current Li abilit ies: 636, 217,059 598,116, 106 785, 241,612 660,976, 668 1, 258,376, 052
Long Term Loan s – Secur ed 602, 349,621 492,569, 379 602, 584,615 449,757, 608 1, 032,633, 110
Def err ed Tax Li abilit y 33, 867,438 105,546, 727 182, 656,997 211,219, 060 225, 742,942
Curr ent Li abilit ies: 2, 260,755, 481 2,555, 566,286 3, 500,845, 103 2,640, 868,554 2, 216,744, 401
Short Term Bank Loans 1, 471,158, 187 1,818, 777,878 2, 669,693, 184 1,534, 345,782 736, 443,848
Long Term Loan s - Current Port i on 261, 416,941 225,176, 449 297, 002,646 295,590, 601 462, 090,211
Trade Credi t ors ( Account s Payabl es) 79, 390,166 60,601, 743 100, 953,258 124,222, 699 394, 715,915
Li abilit ies f or Expenses 49, 771,374 24,565, 248 32, 290,235 69,573, 702 56, 463,570
Li abilit ies f or Ot her Finance 399, 018,813 426,444, 968 400, 905,780 617,135, 770 567, 030,857
TOTAL SHAREH OLDERS' EQUI TY AND
LI ABI LI TIES
9, 298,987, 312 10486940004 12, 703,127, 420 13,251, 242,856 15, 029,500, 278

Income St at ement of Square Pharmaceut i cals Li mit ed Bangladesh f or Fiscal Year 2006 - 2010


2006 2007 2008 2009 2010
Net Turnover 6, 089,905, 396 7,500, 811,349 8, 257,843, 739 9,820, 796,568 11, 462,578, 410
Cost s of Goods Sol d (3,525, 402,669) 4,268, 447,662 (4,856, 061,933) (5, 672,565, 973) (6,561, 288,485)
Gross Prof it 2, 564,502, 727 3,232, 363,687 3, 401,781, 806 4,148, 230,595 4, 901,289, 925
Operat i ng Expenses: (984,298, 192) (1, 406,611, 448) (1,692, 475,988) (1, 779,793, 368) (2,211, 670,939)
Selli ng and Di st ribut i on Expenses (798,131, 173) (1, 000,132, 914) (1,220, 979,268) (1, 319,362, 317) (1,687, 210,447)
Admi nist rat i ve Expenses (186,167, 019) (406, 478,534) (471,496, 720) (460, 431,051) (524,460, 492)
Prof it f r om oper at ion 1, 580,204, 535 1,825, 752,239 1, 709,305, 818 2,368, 437,227 2, 689,618, 986
Ot her Incom e 169, 353,845 220,144, 368 604, 628,504 665,520, 915 585, 564,826
Earni ngs Bef ore Int er est Tax ( EBI T) 1, 749,558, 380 2,045, 896,607 2, 313,934, 322 3,033, 958,142 3, 275,183, 812
Fi nancial Expenses (139,863, 636) (236, 845,084) (351,868, 423) (397, 135,963) (308,861, 107)
NET Pr of it Bef or e W PPF 1, 609,694, 744 1,809, 051,523 1, 962,065, 899 2,636, 822,179 2, 966,322, 705
Allocat i on f or W PPF (76,652, 130) (86, 145,311) (93,431, 709) (125, 562,961) (141,253, 462)
NET Pr of it Bef or e Tax 1, 533,042, 614 1,722, 906,212 1, 868,634, 190 2,511, 259,218 2, 825,069, 243
Provi sion f or Incom e Tax (333,310, 560) (347, 984,083) (409,660, 827) (592, 644,226) (688,499, 602)
Provi sion f or Def err ed I ncome Tax (33,867, 438) (71, 679,289) (77,110, 270) (28, 562,063) (48,697, 850)

Net Prof i t Af t er Incom e Tax 1, 165,864, 616 1,303, 242,840 1, 381,863, 093 1,890, 052,929 2, 087,871, 791
Cash Dividend 332, 640,000 372,600, 000 298, 080,000 357,696, 000 482, 889,600
Ret ai ned Ear ni ngs 833, 224,616 930,642, 840 1, 083,783, 093 1,532, 356,929 1, 604,982, 191
Earni ngs Per Shar e ( EPS) 234. 67 218.61 154. 53 156.56 138. 36
Shares Out st andi ng 4, 968,000 5,961, 600 8, 942,400 12,072, 240 15, 090,300


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1 Cur rent Ratio Current Assets/ Current Li abi li ti es
2 Quick Ratio (Acid Test) (Current Assets-I nventory)/ Current Li abi l iti es
3 Net Wor king to Total
Assets
(Current Assets-Current Li abi li ti es)/ Current Assets
4 I nter val Measur e Current Assets/ Average Dai ly Operati ng Expense
5 Cash Ratio Cash and Cash Equi valent/ Current Assets
6 Total Debt Ratio (Tot al Assets- Total Equi ty)/ Total Assets
7 Debt Equity Rati o (Tot al Assets- Total Equi ty )/ Total Equi ty
8 Equity Multiplier Tot al Assets/ Total Equi ty or [1+ Debt Equi ty Rati o]
9 Long Ter m Debt Ratio Long Term Debt/ (Long Term Debt+ Total Equi ty)
10 Times I nterest Measur e EBI T/ I nterest Expense
12 Cash Cover age Rati o (EBI T+ Depreci ati on)/ I nterest Expense
13 I nventory Tur nover Cost of Goods Sold/ I nventory
14 Days to Sales I nventory 365/ I nventor y Turnover
15 Receivables Turnover Net Sales/ Recei vables
16 Days to Sales
Receivables
365/ Recei vables Turnover
17 Payables Turnover Cost of Goods Sold/ Payables
18 Days to Sale Payables 365/ Payables Turnover
19 Net Wor king Capital
Tur nover
Net Sales/ (Current Assets-Current Li abi li ti es)
20 Fixed Assets Turnover Net Sales/ Fi xed Assets
21 Total Assets Tur nover Net Sales/ Total Assets
22 Profi t Mar gin Net I ncome/ Net Sales
23 Retur n on Assets Net I ncome/ Total Assets
24 Retur n on Equity Net I ncome/ Total Equi ty
25 Ear nings Per Shar e Net I ncome/ Shares Outstandi ng
26 PE Ratio (Pri ce Per Share)/ (Earni ng Per Share)
27 Sales Per Share Net Sales/ Shares Outstandi ng
28 Pri ce-Sales Ratio Pri ce Per Share/ Sales Per Share
29 Book Value Per Shar e Tot al Equi ty/ Shares Outstandi ng
30 Mar ket to Book Ratio Market Value Per Share/ Book Value Per Share
31 Dividend Ratio Cash Di vidend/ Shares Out standi ng
32 Payout Ratio Di vi dend Per Share/ Earni ngs Per Share
33 Retention Ratio 1-Payout Rati o
34 FCF Per Shar e Free Cash Flow/ Shares Outst andi ng
35 Pri ce to FCF Shar e Pri ce Per Share/ FCF Per Share
36 Requir ed Retur n on
Equity
Ri sk Free Rate +

× Market Ri sk Premi um
37
Wei ghted Aver age Cost of
Capital
(Total Equi ty/ Total Val ue)×

+ (Total Debt/ Total Val ue) ×

× ( 1 −

)
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Table of Data used for calculating Beta of Square Pharmaceuticals Limited Bangladesh
Date Stock Weekly Price
(Close)
Index Weekly Price
(Close)
Excess Stock
Returns
Excess
Market
Returns
14-07-11 3,648.00 6,578.28 2.91% 4.22%
07-07-11 3,545.00 6,311.80 0.08% 3.18%
30-06-11 3,542.25 6,117.23 2.34% 4.62%
23-06-11 3,461.25 5,847.26 4.40% 1.23%
16-06-11 3,315.25 5,776.18 -1.04% -3.76%
09-06-11 3,350.25 6,001.90 0.49% 4.15%
02-06-11 3,334.00 5,762.71 1.84% 6.76%
26-05-11 3,273.75 5,397.62 -1.98% -5.60%
19-05-11 3,340.00 5,718.07 2.30% 4.29%
11-05-11 3,264.75 5,482.87 -2.32% -8.21%
04-05-11 3,342.25 5,973.09 2.80% 2.87%
26-04-11 3,251.25 5,806.31 -2.46% -7.10%
19-04-11 3,333.25 6,250.00 1.00% -0.20%
11-04-11 3,300.25 6,262.69 1.09% -4.18%
04-04-11 3,264.75 6,535.88 0.96% 4.68%
28-03-11 3,233.75 6,243.53 -2.07% -4.36%
21-03-11 3,302.25 6,528.21 4.67% 5.64%
13-03-11 3,155.00 6,179.53 4.02% 11.61%
06-03-11 3,033.00 5,536.91 2.04% 1.35%
27-02-11 2,972.50 5,463.35 -4.33% -7.81%
15-02-11 3,107.00 5,926.35 -7.89% -13.14%
08-02-11 3,373.00 6,822.85 -1.29% -6.29%
01-02-11 3,417.25 7,280.98 3.21% 6.74%
25-01-11 3,311.00 6,821.08 -5.78% -8.25%
16-01-11 3,514.25 7,434.59 10.64% 4.20%
09-01-11 3,176.25 7,135.02 -10.77% -14.08%
02-01-11 3,559.75 8,304.59 1.62% 2.57%
26-12-10 3,503.00 8,096.14 1.10% 5.77%
19-12-10 3,465.00 7,654.41 -5.78% -10.79%
09-12-10 3,677.50 8,580.20 -2.25% -2.92%
02-12-10 3,762.25 8,838.10 -2.09% 1.34%
25-11-10 3,842.50 8,721.09 -0.15% 3.29%
15-11-10 3,848.25 8,443.35 5.69% 5.89%
08-11-10 3,641.00 7,974.05 -1.39% 0.33%
01-11-10 3,692.25 7,947.80 -2.09% 2.68%
25-10-10 3,771.25 7,740.48 4.13% 3.29%
18-10-10 3,621.75 7,493.60 -0.21% 2.76%
10-10-10 3,629.50 7,292.54 2.63% 0.96%
03-10-10 3,536.50 7,223.49 -0.20% 3.81%
26-09-10 3,543.50 6,958.69 15.09% 1.66%
19-09-10 3,079.00 6,844.98 1.50% 0.55%
08-09-10 3,033.50 6,807.24 -2.41% 2.82%
30-08-10 3,108.50 6,620.33 2.25% -1.80%
23-08-10 3,040.19 6,741.38 -0.89% 1.79%
16-08-10 3,067.50 6,622.52 3.24% 0.31%
08-08-10 2,971.35 6,601.77 2.12% 2.56%
01-08-10 2,909.62 6,436.77 0.21% 0.50%
22-07-10 2,903.46 6,404.97 2.10% 1.51%
15-07-10 2,843.85 6,309.44 -3.52% -1.91%
08-07-10 2,947.69 6,432.50 -1.31% 4.53%
30-06-10 2,986.73 6,153.68 -4.08% -0.55%
23-06-10 3,113.85 6,187.50 -2.66% -1.00%
16-06-10 3,198.85 6,249.91 8.82% 0.89%
09-06-10 2,939.62 6,194.84 -1.29% 0.89%
02-06-10 2,978.08 6,140.21 0.73% 2.53%
25-05-10 2,956.54 5,988.94 5.11% 1.91%
18-05-10 2,812.88 5,876.55 -1.79% 2.59%
11-05-10 2,864.23 5,728.23 3.42% 3.50%
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04-05-10 2,769.62 5,534.65 2.46% -1.94%
27-04-10 2,703.08 5,644.19 -0.80% 0.63%
20-04-10 2,725.00 5,608.90 0.68% 1.47%
12-04-10 2,706.54 5,527.81 1.24% -0.82%
05-04-10 2,673.27 5,573.37 -1.79% 0.89%
29-03-10 2,721.92 5,524.11 -0.04% -0.69%
22-03-10 2,723.08 5,562.38 1.96% 3.48%
14-03-10 2,670.77 5,375.07 -1.36% -4.06%
07-03-10 2,707.50 5,602.59 -0.87% 0.76%
28-02-10 2,731.35 5,560.56 -1.52% -3.48%
18-02-10 2,773.46 5,760.95 -1.32% 2.22%
11-02-10 2,810.58 5,635.73 1.54% 3.71%
04-02-10 2,768.08 5,434.04 1.12% 0.81%
28-01-10 2,737.50 5,390.48 11.16% 5.80%
21-01-10 2,462.69 5,095.21 4.25% 5.32%
14-01-10 2,362.31 4,838.06 1.76% 2.46%
07-01-10 2,321.35 4,722.10 6.61% 4.11%
30-12-09 2,177.50 4,535.53 0.87% 2.87%
22-12-09 2,158.65 4,408.96 -1.72% -0.97%
14-12-09 2,196.35 4,452.20 -0.38% 2.59%
07-12-09 2,204.62 4,339.68 -2.39% -0.94%
26-11-09 2,258.65 4,380.95 5.50% 5.70%
19-11-09 2,140.96 4,144.75 2.42% 22.52%
12-11-09 2,090.38 3,382.87 1.83% -0.90%
05-11-09 2,052.88 3,413.53 0.39% 1.46%
29-10-09 2,044.81 3,364.26 -0.87% 1.40%
22-10-09 2,062.69 3,317.93 0.09% 1.02%
15-10-09 2,060.77 3,284.50 -2.27% 0.78%
08-10-09 2,108.65 3,259.04 1.68% 4.35%
01-10-09 2,073.85 3,123.24 7.79% 2.60%
16-09-09 1,924.04 3,044.11 1.89% 3.83%
09-09-09 1,888.27 2,931.86 -0.07% -1.43%
02-09-09 1,889.62 2,974.49 -0.68% -0.90%
26-08-09 1,902.50 3,001.60 -2.11% -1.09%
19-08-09 1,943.46 3,034.79 -2.81% 1.28%
11-08-09 1,999.62 2,996.49 -18.43% 2.39%
04-08-09 2,451.35 2,926.66 0.99% 2.27%
28-07-09 2,427.31 2,861.69 -0.14% 1.19%
21-07-09 2,430.77 2,828.07 -0.86% -3.05%
14-07-09 2,451.92 2,917.07 0.39% -1.43%
08-07-09 2,442.50 2,959.52 -14.91% -3.59%
02-07-09 2,870.38 3,069.71 -0.39% 6.51%
24-06-09 2,881.54 2,882.13 11.98% 3.64%
17-06-09 2,573.27 2,780.86 0.44% 1.37%
Bet a Coef f icient of Square Pharmaceut icals Limit ed Bangladesh,

= 0. 4706
Covariance = 10. 037
Average M arket Ret urn Rat e,

= 21. 33 05 %
Risk Free Rat e,

= 6 %

CAPM =

+

(

-

)
= 6 % + ( 0. 470 6)(2 1. 33 05 % - 6 %)
= 13. 2 1 %

Cost of Equit y = 13. 21 %

Cost of Debt = 7. 21 %


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Refer en ce
1. www.squar ephar ma.com.bd
2. www.wikipedia.com
3. www.investopedia.com
4. Fundamentals of Cor por ate Finance by Ross,
Wester field, Jor dan. 9
th
edition


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