Comparative Analysis On Bangladesh Pharmaceuticals Industry PDF

A Study of
Comparative Analysis on
Bangladesh Pharmaceuticals
Industry
Project Work
On
Comparative Analysis on Bangladesh
Pharmaceuticals Industry
Course Title: Project Work, Course Code: BUS 498, Semester: Summer 2018
Submitted to
-------------------------------------
Murtaza Faruquee
Lecturer
Department of Business Administration
East West University.
Submitted by
----------------------------------
Soumendu Roy
ID: 2014-1-10-099
Department of Business Administration
Date of Submission: 10th August, 2018

LETTER OF TRANSMITTAL
10th August, 2018
Murtaza Faruquee
Lecturer,
Department of Business Administration,
East West University.
Subject: Submission of Project Work.
Sir,
As a compulsory requirement of BUS498: Project Work course, here I present you my project
report on “Comparative analysis on Bangladesh Pharmaceuticals Industry”. This report is a study
of pharmaceuticals industry’s ratio analysis to know about financial position about them.
I am very grateful to you for your kind and wise directions. This report would not be possible
without your instructions and guidelines. I hope this report will fulfill your expectations and
requirements.
Sincerely,
------------------------------
Soumendu Roy
Contents
ACKNOWLEDGEMENT ............................................................................................................................. 3
EXECUTIVE SUMMARY ............................................................................................................................ 4
1.INTRODUCTION .................................................................................................................................... 6
1.1. ORIGIN OF THE REPORT ............................................................................................................... 6
1.2. OBJECTIVE OF THE STUDY ............................................................................................................ 7
1.3. LIMITATIONS OF THE STUDY ........................................................................................................ 7
2. LITERATURE REVIEW ........................................................................................................................... 9
3. OVERVIEW ON BANGLADESH PHARMACEUTICALS INDUSTRY ......................................................... 11
3.1. HISTORICAL OVERVIEW.............................................................................................................. 11
3.2. TYPES OF PRODUCTS .................................................................................................................. 11
3.3. GROWTH OF BANGLADESH PHARMACEUTICALS INDUSTRY ..................................................... 11
3.4. FIVE MAJOR FACTORS THAT AFFECT THE RISE OF INDUSTRY .................................................... 12
3.5. PORTERS FIVE FORCES MODEL .................................................................................................. 13
4. COMPANY OVERVIEW OF SELECTED PHARMACEUTICALS COMPANY.............................................. 16
4.1. RENATA PHARMACEUTICA......................................................................................................... 16
4.2. ACME PHARMACEUTICALS......................................................................................................... 17
4.3. CENTRAL PHARMACEUTICALS.................................................................................................... 18
4.4.SQUARE PHARMACEUTICALS ...................................................................................................... 19
4.5.PHARMA AID BANGLADESH ........................................................................................................ 20
5.METHODOLOGY ................................................................................................................................. 22
5.1. DATA SOURCES .......................................................................................................................... 22
5.2. DATA SELECTION ........................................................................................................................ 22
5.3. ANALYSIS TOOLS ........................................................................................................................ 22
5.4. ANALYTICAL CALCULATIONS ...................................................................................................... 23
5. ANALYSIS OF THE ORGANIZATIONS .............................................................................................. 25
6.1. LIQQUIDITY RATIO...................................................................................................................... 25
6.1.1 CURRENT RATIO ................................................................................................................... 25
6.1.2 QUICK RATIO ........................................................................................................................ 27
6.2. ASSET MANAGEMENT RATIO ..................................................................................................... 29
6.2.1. INVENTORY TURNOVER RATIO ........................................................................................... 29
6.2.2. DAYS’ SALES OUTSTANDING ............................................................................................... 31
6.2.3. FIXED ASSET TURNOVER RATIO .......................................................................................... 33
6.2.4. TOTAL ASSET TURNOVER RATIO ......................................................................................... 35
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6.3. DEBT MANAGEMENT RATIO ...................................................................................................... 37
3.1. DEBT TO TOTAL ASSET RATIO ................................................................................................ 37
6.3.2. LONG-TERM DEBT TO TOTAL ASSET ................................................................................... 39
6.3.3. DEBT TO EQUITY RATIO....................................................................................................... 41
6.3.4. EQUITY MULTIPLIER ............................................................................................................ 43
6.4. PROFITABILITY RATIO ................................................................................................................. 45
6.4.1. NET PROFIT MARGIN........................................................................................................... 45
6.4.2. GROSS PROFIT MARGIN ...................................................................................................... 47
6.4.3. RETURN ON ASSET .............................................................................................................. 49
6.4.4. RETURN ON EQUITY ............................................................................................................ 51
ORGANIZATION TO ORGANIZATION COMPARISON ......................................................................... 53
7.FINDINGS AND CONCLUSION ............................................................................................................. 59
7.1. FINDINGS:................................................................................................................................... 59
7.2. CONCLUSION .............................................................................................................................. 60
REFERANCES.......................................................................................................................................... 61
Appendix i-ix
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ACKNOWLEDGEMENT
At the very outset, I would like to express my sincere gratefulness to the Almighty, the most
merciful and beneficiary for empowering me to accomplish the dissertation within the
scheduled time. I am highly indebted to my project supervisor, Mr. Murtaza Faruquee. He
allowed me to encroach upon his precious time right from the beginning of this project work
till the completion. His guidance and suggestions provided me necessary insight into the
problem and paved the way for the meaningful ending of this project in a short duration.
Without his supervision and valuable advice, a suggestion from time to time, I would not be
able to complete the whole thing in a right manner.
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EXECUTIVE SUMMARY
Bangladesh pharmaceuticals industry is one of the most growing industry which is gradually
improving with the improvement of our countries GDP and also making a great effect on our
country’s GDP. As most of the organizations are local and the market is dominated by the
local players so there is a huge chance of improvement in this sector.
But an organization’s performance cannot be measured with only its revenue growth and
net income. It can be best measured if it is compared with other variables in the
organization. So it is also important to the analysis for better understanding the
organization's performance.
First of all, the liquidity ratios are compared so that it can indicate the level of liquid assets
in an organization.
Then the asset management ratios which shows how assets help to generate sales in the
organization.
After that, the debt management ratios which shows the comparison between total asset,
total long-term asset, long-term debt and shareholders’ equity.
At last, the profitability ratios which includes return on asset, equities, and profit margin.
Finally, it is shown the organization to organization comparison on different ratios and

shown who is performing comparatively best and least.
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CHAPTER ONE:
INTRODUCTION
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1.INTRODUCTION
Bangladesh pharmaceutical industry is one of the most growing industry in the country
which is gradually improving with its present resources. Though it is facing unavailability of
raw materials but it is still exporting medicines to the other country. The organizations in
this industry have acceptability to not only in Bangladesh but also around the world.
Ratio analysis is one of the strongest method to compare organizational activity, credit
situation and asset management and liquidity measurement. This was performed by
Edward. I Altman in 1968
In this report we will analyze the same ratios for the pharmaceutical industry of Bangladesh
and will do a comparative review on that.
1.1. ORIGIN OF THE REPORT

This paper provides a study of comparative analysis of Bangladesh pharmaceuticals industry
which shows the ratio analysis of different pharmaceuticals company. Preparation of this
project paper is a mandatory requirement for the academic course BUS 498: Project Work.
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1.2. OBJECTIVE OF THE STUDY
The objectives are:
i. Study the market of Bangladesh pharma sector

ii. Comparative analysis of the organizations in the industry.
iii. Study how the results have an impact on decision making.
iv. Study the year to year changes of performance of the firms.
v. Study financial soundness of the firms.
1.3. LIMITATIONS OF THE STUDY
Limitations of the study are

i. The data used in this study does not show the complete count of all transactions
ii. The transactions cannot be examined from root as the financial statements and
footnotes have not enough information.
iii. Only sample of five companies are selected.
iv. Most of the companies have different fiscal year.
v. As the firms are selected on random basis so it may consist of a outlier.
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CHAPTER TWO:
LITERATURE REVIEW
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2. LITERATURE REVIEW
Financial ratio analysis is one of the best ways to know about a company’s performance. It
gives us data for many important evaluations and calculation regarding organizations
performance and profitability and growth. Ratio analysis also helps an organization’s
forecasting, budgeting, communication. (Vardhan, Aruna, & Silpa, 2017)
(Bajkowski, 1999) told that “Financial ratio analysis uses historical financial statements to
quantify data that will help give investors a feel for a firm’s attractiveness based on factors
such as its competitive position, financial strength, and profitability.”
Ratio analysis also shows the comparison between different items forms the financial
statements of the organization. According to (GOYAL) “Ratio analysis is a significant
technique for financial analysis. It indicates the relation between two mathematical
expressions and the relationship between two or more things.”
In a survey of (Vardhan, Aruna, & Silpa, 2017) showed the importance of ratio analysis for
both management stuff and non-management stuff. It showed that for both the managerial
and non-managerial stuff, it is important for proper business understanding, making
business decisions of investors and to find out the limitations of financial statements.
Ratio analysis is regarded as an efficient way to find out the performance of any
organization.
There are several studies that are done on the pharmaceuticals industry in Bangladesh.
Which shows different aspects of Bangladesh pharmaceuticals industry.
(Habib & Alam, 2011) showed conducted a research on which they found the areas of
possible prospects and problems of pharmaceuticals and they show how different areas of
the industry are working like products, marketing, human resource, training and
development, competitors, consumer choice, research and development and competitive
position of the industry.
This problems and prospects are shown differently in other analysis of done by (Tazin, 2016)
where she showed the numerical figures of the size of the Bangladesh pharmaceutical
market and its growth, the reasons of market growth, forces for potential growth and key
companies of Bangladesh.
(Sujan, Dey, & Dey, 2013) showed the comparison of profitability of listed pharmaceuticals
industry of Bangladesh and also showed comparative rations of different companies.
A study done by (EBL Research Ltd, 2018) showed different ratio analysis of 10 different
companies on the latest financial statements.
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CHAPTER THREE
OVERVIEW ON
BANGLADESH PHARMACEUTICALS
INDUSTRY
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3. OVERVIEW ON BANGLADESH PHARMACEUTICALS INDUSTRY
3.1. HISTORICAL OVERVIEW
There were not that much pharmaceuticals firms before liberation in Bangladesh (then East
Pakistan). After the liberation, there was not enough budgetary allocations for the improvement of
health sector. At that time, most of the people had little access to the essential lifesaving medicines.
Bangladesh pharmaceuticals industry started to grow in the '80s, after the liberation war (Tazin,
2016). The Pharmaceutical Industry has grown in the last two decades at a considerable rate It has
created a way of investment in the pharmaceutical sector. After the liberation war, the sector
started to develop day by day. Now Bangladesh Pharmaceuticals industry produces 97% medicines
in the country and 3% are imported.
3.2. TYPES OF PRODUCTS

There are different types of medicines are produced in Bangladesh. This product is produced by the
skilled personnel and this is a highly research and development based industry which consist of
different companies in producing different medicines.
According to Directorate General of Drug Administration present days there are 271 Allopathic
medicine companies, 202 Ayurvedic drug manufacturers, 273 Unani Drug Manufacturers,32 herbal
drug manufacturers, 42 homeopathic & biochemic Drug Manufacturers.
Firms Type Functional Non-Functional Suspended Production Held Total

Allopathic Drug Manufacturers 221 25 24 1 271
Ayurvedic Drug Manufacturers 184 0 18 0 202
Herbal Drug Manufacturers 32 0 0 0 32
Unani Drug Manufacturers 258 0 15 0 273
Homeopathic Drug Manufacturers 42 0 0 0 42
Total 737 25 57 1 820
Source: (Directorate General of Drug Administration, 2013)
According to (EBL Research Ltd, 2018), the industry has contributed 1.85% of GDP in Bangladesh.
According to the Directorate General of Drug Administration, there are 1043 types of medicines that
are allowed to import.
The industry is protected from all external competitions. The organization faces most of the
competition in the country. There are many companies that produce better medicine for different
diseases.
3.3. GROWTH OF BANGLADESH PHARMACEUTICALS INDUSTRY

The biggest market for the development in this industry is local markets. As peoples’ net income is
increasing day by day so they are willing to expense for health care.
In 2012, the market size stood at Tk 9,390.4 crore and rose to Tk 18,755.6 crore in 2017, according to
IMS Health Care Report 2017. This is also best supported by the Bangladesh Association of
Pharmaceuticals industry which showed the increase of the revenue of the firms from 2010 to 2015.
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Year Revenue(Million) Revenue in TK
2010 852 68,032.2
2011 1053 84,082.05
2012 1178 94,063.3
2013 1273 101,649.05
2014 1420 113,387
2015 1635 130,554.75
Source: (Bangladesh Association of Pharmaceuticals Industry, 2018)
This table shows that how the revenue increased year after year for this industry.
Pharmaceuticals industry of Bangladesh has shown a significant growth in last five years. According
to the research done by (EBL Research Ltd, 2018) from 2012 to 2017, historical five years CAGR
(Compound annual growth rate) was 15% and from 2014 to 2017, historical three years CAGR was
21%. According to industry experts, the market size of pharmaceuticals may reach about BDT
330,000 million by 2020.
The table in the below shows year on year size and growth of GDP and the size and growth of
Pharmaceuticals Industry of Bangladesh. This shows that from 2013-14 to 2016-17. The growth of
the Pharmaceuticals industry of Bangladesh exceeds according to the growth of Bangladesh.
2013-2014 2014-2015 2015-2016 2016-2017

GDP(BDT million) 7,741,361 8,248,624 8,835,389 9,478,975
Year to Year Growth 6.06% 6.55% 7.11% 7.28%
Pharma Market(BDT 105,864 119,548 156,401 187,556
million)
Year to Year Growth 8.48% 12.93% 30.83% 19.92%
(EBL Research Ltd, 2018)
3.4. FIVE MAJOR FACTORS THAT AFFECT THE RISE OF INDUSTRY

1. Change in diseases profile: The most of diseases are non-communicable and that diseases
are moving gradually from acute to chronic diseases.
2. Country’s Aging Population: Most of the people will be over 50 years of age by 2036
3. Drug Purchasing Power: Drug purchasing ability is increased by the sustainable growth of
peoples’ income.
Date 2015 2014 2013 2012 2011 2010
Per Capital Expenditure(US$) 32 29 26 23 22 20
Change, % 10.43% 11.50% 13.68% 2.67% 9.81% 16.07%
(Knoema, 2015)
4. High life expectancy: According to world bank statistics the life expectancy at birth is
increasing. So now people are aware enough and take medicines as prescribed.
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Time Life Expectancy(Years)
2015 72 Life Expectancy Graph
2014 71.63 73
2013 71.24 72
2012 70.86 71
2011 70.47 70
69
2010 70.08 68
2009 69.68 67
2008 69.28 66
2007 68.86 65
Time 2015 2014 2013 2012 2011 2010 2009 2008 2007 2006
2006 68.43
2005 67.97 Life Expectancy(Years)
Source: World Bank
Consciousness about health care: Bangladesh people are much more concerned by health now
by the development of the pharma sector and tremendous seminars on health care and
improvement. It created an appeal for the general people to think about it.
3.5. PORTERS FIVE FORCES MODEL
The threat of new entrants: In the pharmaceuticals industry, the threat of new entrants is low. As
the market is well dominated by the local players and there are many firms already in the market
that meets up about 97% of local demand so the threat of new entrants is low. Because a new
company can also serve this 97% of the market which already served by other companies.
Bargaining power of suppliers: Bangladesh pharma industry mainly depends on the raw materials
from outside the country, more than 90 percent of Tk 4,700 crore worth of raw materials are
imported every year, according to the report, it is a great threat because it can easily affect the
market by high price or raw material shortage. So the bargaining power of suppliers is high.
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Bargaining power of buyers: As medicine is a necessary product in time so the bargaining power of
the customers is low.
The threat of substitute products: When the no of firms increases in an industry, it creates more
competition in an industry and creates more opportunities for the buyers. The concentration of
some common medicines are same so there is a high threat of substitute product.
Rivalry among competitors: Rivalry among competitors is high. As there are many other companies
are doing business so there is the huge threat of substitute products which ultimately creates more
rivalry.
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CHAPTER FOUR:
COMPANY OVERVIEW
OF SELECTED PHARMACEUTICALS
COMPANY
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4. COMPANY OVERVIEW OF SELECTED PHARMACEUTICALS COMPANY
4.1. RENATA PHARMACEUTICA
HISTORY: Renata Limited (formerly known as Pfizer Limited) is one of the leading
pharmaceuticals company in Bangladesh. Its main products are human and animal
medicines. It started its operation as Pfizer’s Bangladesh Limited in 1972 and in 1993 it
transferred its ownership to the local shareholders and the name changed Pfizer to Renata
Pharmaceuticals.
EXPORT: Renata also has a huge market outside the country and it exports products to
Afghanistan, Belize, Cambodia, Ethiopia, Guyana, Honduras, Hong Kong, Kenya, Malaysia,
Myanmar, Nepal, Philippines, Sri Lanka, Thailand, United Kingdom, and Vietnam.
DISTRIBUTION CHANNEL: It has three manufacturing sites and 19 depots around the
country to for distribution for the products.
EMPLOYEE: It has 4334 employees.
SUBSIDIARY COMPANY: It has three subsidiary company
1. Purvana Limited
2. Renata Agro Industries Limited
3. Renata Oncology Limited.
ACHIEVEMENT: Recently it has awarded Enterprise of the year-2017 for its contribution and
spirit.
CORPORATE-SOCIAL RESPONSIBILITY: Besides all this Renata perform corporate social
responsibilities. It also cares for the health care services for many of the people. It has
arranged so many programs for the health services of the people in the rural area and also
for children.
Last year its CSR expenditure was Taka 63,828,157 which was 2.43% of net profit.
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4.2. ACME PHARMACEUTICALS
HISTORY: Acme is performing in this region since 1954. In this long history, they have
created so many medicines and ran many types of research for the improvement of the
quality of the medicines. EXPORT: Its contribution and demand outside the country are
huge. Its presence is now in south-east Asia, Central America and now searching for the new
horizons around the world.
EMPLOYEE: It has more than 7000 employees working in the organization.

PRODUCTS INFORMATION: It has produced more than 500 products with different dosage
and forms. Their main mission is to ensure health vigor and happiness for all.
It produces four types of products and service in the market.
1. Pharmaceuticals
2. Herbal & Nutraceuticals
3. Ayurvedic
4. Veterinary
It has only one manufacturing unit in Dhamrai.
ACHIEVEMENT: Recently it is awarded the First Position in 4th IEDAP (International
Exhibition on Dairy, Aqua & Pet) 2018 (held on 08-10 March 2018) at BICC, Dhaka.
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CORPORATE-SOCIAL RESPONSIBILITY: It has a great CSR activity which works on the
eradication of poverty, creating health awareness, patronizing sports and promoting
education.
4.3. CENTRAL PHARMACEUTICALS
HISTORY:It is successfully operating a business in Dhaka. This company was actually

established by GETCO/ Bangla CAT (Represents the world famous USA based Caterpillar
Company) in the 1980s. Basically, their core business is to deal with different kinds of heavy-
duty construction machinery & equipment, industrial generators and so on. They are
successfully engaged in telecommunications, banking (Prime Bank) and leasing sectors etc.
Despite huge scopes in the pharmaceuticals industry, they were not so much concerned
about Central Pharmaceuticals Ltd. and decided to sell it. Afterward, a renowned group
named METRO GROUP purchased the company at the end of 1993 and started its operation
from the beginning of 1994.
Some years later on the METRO GROUP decided to sell the company. As an existing
Director, Mr. Munsur Ahamed purchased Central Pharmaceuticals Ltd. form METRO GROUP
and throne in the chair as Managing Director to till date with successful operation.
EMPLOYEES: Near about 575 people are working in this company and trying to introduce
another new 65 products in the Bangladeshi market through aggressive marketing.
DISTRIBUTION CHANNEL: It has 36 distribution channel around the country and one main
factory in Dhaka.
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4.4. SQUARE PHARMACEUTICALS
HISTORY: SQUARE pharmaceuticals is one of the largest pharmaceuticals company in

Bangladesh. It started its operation in 1958 and still now it is operating successfully in the
market. Since 1985 it holds the position of being 1st among all the national and multinational
companies. It turned into a multinational company in 1991 and listed in Dhaka stock
exchange in 1995. The company stated that now it has 18.64% market share in the industry.
EXPORT-IMPORTING COUNTRIES: Now it is exporting to more than 36 countries like in Asia

it exports to the countries like Afghanistan, Azerbaijan, Bhutan, Cambodia, Georgia, Hong
Kong, Iraq, Laos, Macau, Malaysia, Maldives, Myanmar, Nepal, Philippines, Singapore, Sri
Lanka, Tajikistan, Vietnam, Yemen. In the African market, they supply the products in many
countries like Cameroon, Eritrea, Ivory Coast, Kenya, Libya, Mauritania, Mauritius,
Mozambique, Nigeria, Somalia, Sudan, Tanzania, Uganda. This achievement also follows in
other continents like,
Oceania: Fiji, Palau, Papua New Guinea.
Central & South America: Belize, Costa Rica, Jamaica, Nicaragua, Panama, Suriname.
Europe: UK (Contract Manufacturing)
DISTRIBUTION CHANNELS IN BANGLADESH: It has 11 depots in Bangladesh and all of them

are in the district places.
PRODUCT VARIATION: It has pharmaceuticals product, Herbal and Nutraceuticals product

along with Agrovet and Pesticides product.
EMPLOYEE: Now around 7390 employees are working for SQUARE pharmaceuticals.
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CSR: As a large company and big player in society it works for a society like it works for
women empowerment, employee, disaster management, research and development
program, child care and so on.
4.5. PHARMA AID BANGLADESH
INTRODUCTION: Pharma Aid started its journey in 1981 near Gazipur, Chandra. It started its
commercial production in 1984. It is a neutral glass ampoule producer and supplies in
different medicine and also other companies.
It is a sister concern of Excelsior Group and listed in DSE as pharmaceutical and chemical
industry and now it has now 85 employees working in the organization.
It has several other businesses in other sectors:
1. Excelsior Trading Corporation

2. Bengal Biscuit Ltd.
3. Excelsior Shoes Ltd.
4. Excelsior Engineers Ltd.
5. Excelsior Garments Ltd.
6. Epic Home Appliances Ltd.
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CHAPTER FIVE
METHODOLOGY
OF THE STUDY
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5.METHODOLOGY
5.1. DATA SOURCES
All the data for this paper is collected from the annual reports from the company’s websites and the
Lanka Bangla finance portal. The net amount of sales and other sales regarding information are
disclosed in the annual report. Some information that does not comply with a specific time period is
collected from Lanka Bangla finance porta.
Data type: Secondary
Data Selection: 1. Website of Organizations

2. Lanka Bangla Web Portal
5.2. DATA SELECTION

The organization is selected from listed pharmaceuticals and chemical companies in DSE (Dhaka
Stock Exchange). First of all, they are selected randomly and then the availability of information.
Most of the companies publish an annual report for year-end Dec31 and other companies follow
June-July format. So the companies chosen for the study, prepare financial statements in June-July
format. Square and Renata’s information is chosen from Lanka Bangla Web Portal.
5.3. ANALYSIS TOOLS

Microsoft Excel 2016 is used for data processing to find the analysis result.
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5.4. ANALYTICAL CALCULATIONS
No LIQUIDITY Formula
1 Current Ratio(times) Current Asset/current liability
2 Quick Ratio(times) Current Asset-inventory/current liability
Asset Management Ratio Formula
3 Inventory Turnover Ratio(times) cost of goods sold/Inventory
4 Days Sales Outstanding(days) Annual Receivables/(Annual Sales/360)
5 Fixed Asset Turnover(times) Sales/Net Fixed Asset
6 Total Asset Turnover (times) Sales/Total Asset
Debt Management Formula
7 Debt to Total Asset(%) Total Liability/Total Asset
8 Long-term Debt to Total Asset Long-term Liability/Total Asset
9 Debt to Equity Ratio(times) Total Liability/Shareholders Equity
10 Equity Multiplier(times) Total Asset/Shareholders Equity
Profitability Ratio Formula
11 Net Profit Margin(%) Net Profit/Sales
12 Gross Profit Margin(%) Gross Profit/Sales
13 Return On Asset Net profit/Total Asset
14 Return On Equity Net Profit/Total Equity
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CHAPTER SIX:
ANALYSIS
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5. ANALYSIS OF THE ORGANIZATIONS
6.1. LIQQUIDITY RATIO

Liquidity ratio measures the comparison of current asset and liability among the firms. Generally,
firms use this ratio for a judging the ability to handle the current assets and liability.
6.1.1 CURRENT RATIO

Current ratio shows in an emergency how the firm pays its short-term obligations like short-term
debt and accounts payable through its current assets like accounts receivables, inventory etc.
Current Assets
Current Ratio 
Current Liabilitie s
LIQUIDITY COMPANY NAME 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Current Ratio(times) ACME 1.33 0.79 1.03 1.35 1.25
CENTRAL PHARMA 1.05 2.64 2.87 3.14 3.25
PHARMA AID 1.04 1.34 1.60 1.97 2.44
SQUARE 2.12 3.13 3.82 6.34 9.81
RENATA 0.79 1.02 1.15 1.38 1.75
CURRENT RATIO
12.00
10.00
8.00
6.00
4.00
2.00
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME CENTRAL PHARMA PHARMA AID SQUARE RENATA
ACME: The following table of ACME Laboratories Ltd shows that they have less liability than the
asset so in an emergency they have more possibility to take effective actions in paying its debt or
payables. Only in 2013-2014 session, they had a lower current asset than current liability which
results lowest in five years. They had a highest current ratio 1.35(2015-2016) and lowest 0.79(2013-
2014)
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

CURRENT ASSET 7,889,442,833 6,635,062,802 7,198,984,638 11,603,359,057 11,671,330,040
CURRENT LIABILITY 5,927,783,411 8,429,729,474 6,982,261,142 8,566,790,380 9,315,041,707
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Central Pharmaceuticals:
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

CURRENT ASSET 6,647,806,142 691,680,253 862,929,015 1,031,557,506 1,233,641,390
CURRENT LIABILITY 6,319,357,535 262,330,726 301,154,895 328,343,330 380,159,890
This table of current asset and current liabilities also suggest that they continuously tried their best
to increase their asset. In the year 2012-2013, they had a high level of liability but they successfully
decrease it. Their highest current ratio was 3.25(2016-2017) times and lowest 1.05 times (2012-
2013)
Pharma Aid:
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

CURRENT ASSET 73,679,058 98,516,161 115,678,320 142,417,626 155,983,102
CURRENT LIABILITY 70,857,445 73,700,085 72,414,682 72,414,682 63,863,484
Pharma aid also tried to do better continuously. They had a low level of liabilities every year. They
had the highest current ratio of 2.44(2016-2017) and lowest ratio of 1.04(2012-2013)
Square Pharmaceuticals: Square pharmaceuticals performed better than anyone in the

pharmaceuticals industry. They increased the current asset and tried to decrease liability in
comparison with that which resulted to do better their ratios. Their highest ratio was in 2016-2017
and it was 9.81 times.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

CURRENT 6,946,361,767 7,499,373,281 9,732,170,099 17,063,366,651 23,175,830,022
ASSET
CURRENT 3,275,407,433 2,394,537,126 2,549,018,066 2,691,182,654 2,361,444,052
LIABILITY
Renata Pharmaceuticals: In the first year Renata performed weaker than the other years. They had
more liabilities than the assets and it resulted in weak performance. But they were doing better in
other years and gradually improved it.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

CURRENT 4,208,712,799 5,296,370,085 6,483,183,312 6,944,314,809 7,736,183,424
ASSET
CURRENT 5,333,621,075 5,214,178,551 5,647,212,505 5,020,284,099 4,416,571,737
LIABILITY
Comparison: From the graph, it is clear that square performed better every year and they had the
highest ratio every year, first three years it was nearby with the other companies but in recent two
years they performed notably well.
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6.1.2 QUICK RATIO
The quick ratio is measured for more accuracy in terms of liquidation. Sometimes inventory that is
regarded as a current asset remain unsold and it is not that much easy to sell those goods
immediately. So in quick ratio, it is subtracted from the current asset. If the ration goes increase that
is good for the firm as it suggests that the firm have increased its capability to pay its current
liabilities.
Current Assets  Inventories
Quick Ratio 
Current Liabilitie s
LIQUIDITY COMPANY NAME 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Quick Ratio(times) ACME 1.01 0.52 0.68 1.03 0.94
CENTRAL PHARMA 1.02 1.50 1.72 1.96 2.10
PHARMA AID 0.92 1.21 1.39 1.82 2.13
SQUARE 1.18 1.99 2.52 4.97 8.23
RENATA 0.29 0.49 0.55 0.71 1.02
1.2 Quick Ratio

9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME: The quick ratio of ACME has no trend. In this five years, they went through many
fluctuations. Their increasing amount of inventory led them towards weak quick ratio. They had a
highest quick ratio 1.03 times (2015-2016) session and the lowest 0.52(2013-2014).
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

CURRENT ASSET 7,889,442,833 6,635,062,802 7,198,984,638 11,603,359,057 11,671,330,040
INVENTORIES 1,886,267,051 2,223,003,434 2,484,869,763 2,749,539,322 2,907,608,895
27 | P a g e
Central Pharmaceuticals: They had the highest current ratio 2.10(2016-2017) which means after
deducting the inventory they have the 2.13 times higher current asset than a current liability and the
lowest 1.02(2012-2013) which means that they have less current asset than a liability.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

CURRENT ASSET 6,647,806,142 691,680,253 862,929,015 1,031,557,506 1,233,641,390
INVENTORY 208,818,339 298,972,455 343,952,055 389,201,629 434,212,783
CURRENT LIABILITY 6,319,357,535 262,330,726 301,154,895 328,343,330 380,159,890
Pharma Aid:
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
CURRENT ASSET 73,679,058 98,516,161 115,678,320 142,417,626 155,983,102
INVENTORY 8,482,725 9,658,023 14,956,008 10,655,288 19,784,305
CURRENT LIABILITY 70,857,445 73,700,085 72,414,682 72,414,682 63,863,484
Pharma aid performed better continuously. They tried not to increase more liability. That’s why
their liability was close to each other in every session. Their highest ratio was 2.13(2016-2017) and
the lowest 0.92(2.12-2.13)
Square Pharmaceuticals: In every five years they were in top managing quick ratio. They tried to
decrease or keep the same in the inventory account. On the other hand, they increased their asset
and decreased their liability. Their highest ratio was 8.23(2016-2017) times and the lowest ratio was
1.18 times (2012-2013).
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

CURRENT ASSET 6,946,361,767 7,499,373,281 9,732,170,099 17,063,366,651 23,175,830,022
INVENTORY 3,091,263,712 2,737,085,779 3,310,086,668 3,694,711,088 3,730,808,243
Renata Pharmaceuticals: Renata did not perform well in managing this. They have increased cost of
inventory also asset. Their highest ratio was 0.71(2015-2016) and the lowest 0.29(2013-2014)
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
CURRENT ASSET 4,208,712,799 5,296,370,085 6,483,183,312 6,944,314,809 7,736,183,424
INVENTORY 2,657,779,255 2,760,765,470 3,374,274,252 3,361,710,600 3,229,222,893
In comparison, Square performed better than others. Last five years they had the highest quick ratio
among the five.
28 | P a g e
6.2. ASSET MANAGEMENT RATIO
A firm’s major objective is to generate sales and assets are the important components that help the
organization to generate more sales. Generally, fixed assets are used to produce the products
necessary for sales besides the current assets are used to generate sales like accounts receivable.
Firms that give lucrative credit terms opportunity are likely to be sold out quickly.
6.2.1. INVENTORY TURNOVER RATIO

Inventory turnover ratio indicates how quickly the products sold out and how efficiently the firm is
managing its inventory.
It follows the calculations below:

𝑪𝒐𝒔𝒕 𝒐𝒇 𝑮𝒐𝒐𝒅𝒔 𝑺𝒐𝒍𝒅
𝑰𝒏𝒗𝒆𝒏𝒕𝒐𝒓𝒚
Asset Management Ratio PARTICULARS 2012- 2013- 2014- 2015- 2016-

2013 2014 2015 2016 2017
Inventory Turnover ACME 3.03 2.81 2.90 2.83 2.77
Ratio(times) PHARMACEUTICALS
CENTRAL PHARMA 1.04 1.10 0.98 0.54 0.54
PHARMA AID 8.77 8.49 6.04 9.23 5.72
SQUARE 3.66 4.74 4.51 5.67 4.90
PHARMACEUTICALS
RENATA 1.36 1.96 1.88 2.07 2.46
PHARMACEUTICALS
Inventory Turnover Ratio

12.00
10.00
8.00
6.00
4.00
2.00
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME PHARMACEUTICALS: ACME PHARMACEUTICALS performed average in this sector. In a 2012-

2013 financial year, but they have a decreasing trend. It started to decrease in the 2012-2013
financial year. They have an increasing amount of cost of goods sold which made this happen. Its
highest inventory turnover is 3.03 times and lowest 2.77.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Inventories 1,886,267,051 2,223,003,434 2,484,869,763 2,749,539,322 2,907,608,895
Cost of goods sold 5,721,020,810 6,237,792,554 7,194,997,972 7,770,610,089 8,039,829,556
29 | P a g e
CENTRAL PHARMA: CENTRAL PHARMA have a poor performance ratio in performing the inventory
turnover ratio. It happened because they have the almost equal cost of goods sold in comparison
with inventory. Their highest turnover was 1.10 and lowest .54
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Cost of Goods Sold 217,257,205 328,711,373 336,527,457 211,549,614 234,900,250
Inventories 208,818,339 298,972,455 343,952,055 389,201,629 434,212,783
PHARMA AID: PHARMA AID had the highest turnover ratio in most of the financial year. Their cost of
goods sold level is increasing proportionately also increasing their level of inventories. They
successfully managed both of them. They have the highest turnover of 9.23 and lowest 5.73
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Inventories 8,482,725 9,658,023 14,956,008 10,655,288 19,784,305
SQUARE PHARMACEUTICALS: SQUARE PHARMACEUTICALS company has only the lowest ration in
the 2012-2013 financial year. It has performed gradually well in the next years also.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Inventories 3,091,263,712 2,737,085,779 3,310,086,668 3,694,711,088 3,730,808,243
RENATA PHARMACEUTICALS: RENATA PHARMACEUTICALS performed better than CENTRAL

PHARMA in all the five years. It has both increasing amounts of inventories and cost of goods sold.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Inventories 2,657,779,255 2,760,765,470 3,374,274,252 3,361,710,600 3,229,222,893
In comparison, PHARMA AID and SQUARE PHARMACEUTICALS are leading Companies in managing
their inventory over the time.
30 | P a g e
6.2.2. DAYS’ SALES OUTSTANDING
It suggests how much time a firm need to wait to collect its receivables.
It follows the calculations below:

𝑨𝒄𝒄𝒐𝒖𝒏𝒕𝒔 𝑹𝒆𝒄𝒆𝒊𝒗𝒂𝒃𝒍𝒆𝒔
𝑨𝒏𝒖𝒂𝒍 𝒔𝒂𝒍𝒆𝒔 ÷ 𝟑𝟔𝟎
Asset Management PARTICULARS 2012- 2013- 2014- 2015- 2016-

Ratio 2013 2014 2015 2016 2017
Days Sales ACME 19 23 23 25 33
Outstanding(days) PHARMACEUTICALS
CENTRAL PHARMA 82 99 138 335 391
PHARMA AID 154 180 148 166 157
SQUARE 14 12 12 12 22
PHARMACEUTICALS
RENATA 54 44 49 51 45
PHARMACEUTICALS
Days Sales Outstanding

450
400
350
300
250
200
150
100
50
0
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME PHARMACEUTICALS: ACME PHARMACEUTICALS performed efficiently than the other three
companies in the 2012-2013 financial year. ACME PHARMACEUTICALS collects its accounts
receivables every 19 days. Other companies collected this receivable in more than 19 days and only
company that performed lower than ACME PHARMACEUTICALS is SQUARE PHARMACEUTICALS.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Trade Receivables 471,021,187 644,867,067 729,654,988 891,843,015 1,227,081,694
Revenue 8,973,319,332 10,217,931,465 11,496,413,631 12,644,913,144 13,576,322,298
31 | P a g e
CENTRAL PHARMA: CENTRAL PHARMA always collect the receivables in a late period and it is
increasing day by day. In a 2012-2013 financial year, it was 82 days and 391 days in a recent 2016-
2017 financial year. It suggests that they cannot collect their receivable in even 1 year. Other
companies did not perform like CENTRAL PHARMA
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Trade Receivable 96,546,722 179,578,245 252,623,452 387,987,401 494,605,483
Revenue 423,678,921 654,288,520 660,793,414 416,734,089 455,900,250
PHARMA AID: PHARMA AID performed better than CENTRAL PHARMA. Their highest receivable
days was 180days in 2013-2014 and lowest in the 2014-2015 financial year which was 144 days.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Trade Receivables 41,668,343 62,850,480 60,307,262 70,072,942 78,579,645
Revenue 97,615,975 125,807,499 146,704,491 152,136,254 180,236,917
SQUARE PHARMACEUTICALS: SQUARE PHARMACEUTICALS performed better than anyone in

collecting receivables.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Trade Receivables 812,741,029 766,634,978 894,543,303 1,335,829,914 2,204,014,900
Revenue 20,202,005,922 23,268,413,217 26,684,573,116 40,423,958,859 36,543,140,106
RENATA PHARMACEUTICALS: It collects its receivables in 44-54 days which is better than CENTRAL
PHARMA and PHARMA AID.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Trade Receivables 1142685421 1355185477 1750889884 2029259467 1995758417
Revenue 7632078333 11107281260 12880957428 14200840456 16043431021
In comparison, it is clearly seen that SQUARE PHARMACEUTICALS is performing better

than anyone in collecting outstanding from their customers.
32 | P a g e
6.2.3. FIXED ASSET TURNOVER RATIO
Fixed asset turnover ratio shows the measurement of how property, plant, and equipment are
helping the organization to generate sales. It is counted as follows
𝑺𝒂𝒍𝒆𝒔
𝑵𝒆𝒕 𝑭𝒊𝒙𝒆𝒔 𝑨𝒔𝒔𝒆𝒕𝒔

Ratio 2013 2014 2015 2016 2017
Fixed Asset ACME 1.08 0.66 0.72 0.73 0.75
Turnover(times) PHARMACEUTICALS
CENTRAL PHARMA 0.68 0.57 0.58 0.38 0.43
PHARMA AID 1.24 1.69 2.04 2.33 2.72
SQUARE 2.04 1.67 1.48 2.14 1.89
PHARMACEUTICALS
RENATA 1.20 1.37 1.48 1.58 1.75
PHARMACEUTICALS
FIXED ASSET TURNOVER RATIO

3.00
2.50
2.00
1.50
1.00
0.50
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME PHARMACEUTICALS: ACME PHARMACEUTICALS has a fixed asset turnover ratio of 1.08 in the
2012-2013 Financial year. At that time, almost all the firms had the same ratio which was near 1 or
more than 1 but SQUARE PHARMACEUTICALS performed better than all the firms. It has almost level
of revenue and PPE.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Revenue 8,973,319,332 10,217,931,465 11,496,413,631 12,644,913,144 13,576,322,298
PPE 8,306,210,678 15,511,897,086 16,027,234,140 17,240,105,134 18,220,229,667
CENTRAL PHARMA: CENTRAL PHARMA has the revenue less than the PPE. Which suggests that it is
not generating enough revenue as much as it is investing in its PPE.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Revenue 423,678,921 654,288,520 660,793,414 416,734,089 455,900,250
PPE 594,453,797 1,119,632,901 1,136,750,362 1,097,285,177 1,056,612,218
33 | P a g e
PHARMA AID: PHARMA AID has a lower PPE. Which shows a clear indication that the firm is
generating more revenue than its investment in property plant and equipment.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Revenue 97,615,975 125,807,499 146,704,491 152,136,254 180,236,917
PPE 78,881,772 74,283,847 71,995,876 65,257,105 66,212,277
SQUARE PHARMACEUTICALS: SQUARE PHARMACEUTICALS performed better than anyone. It has
generated enough revenue to support its PPE. And its investment on PPE is always lower than
revenue which is a good indication of its better performance
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Revenue 20,202,005,922 23,268,413,217 26,684,573,116 40,423,958,859 36,543,140,106
Property, Plant and 9,908,013,592 13,933,689,469 18,009,200,507 18,848,282,139 19,323,568,164
Equipment
RENATA PHARMACEUTICALS: RENATA PHARMACEUTICALS also performed better. It has also a

lower PPE than its revenue and as it has started to increase its PPE its revenue is also increasing.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Turnover 7,632,078,333 11,107,281,260 12,880,957,428 14,200,840,456 16,043,431,021
Property, Plant 6,348,183,516 8,106,692,561 8,695,862,142 8,969,965,833 9,172,888,570.00
and Equipment
In comparison, it is seen that there is a consistent development of PHARMA AID and RENATA
PHARMACEUTICALS in performing fixed asset turnover ratio. They gradually increased their
performance in managing the fixed asset.
34 | P a g e
6.2.4. TOTAL ASSET TURNOVER RATIO
Total asset turnover ratio shows the effect of total assets in generating sales. It is counted as
follows:
𝑻𝒐𝒕𝒂𝒍 𝑨𝒔𝒔𝒆𝒕𝒔

Ratio 2013 2014 2015 2016 2017
Total asset ACME 0.54 0.46 0.49 0.44 0.45
Turnover(times) PHARMACEUTICALS
CENTRAL PHARMA 0.06 0.36 0.33 0.20 0.20
PHARMA AID 0.64 0.73 0.78 0.73 0.81
SQUARE 0.73 0.75 0.76 0.91 0.70
PHARMACEUTICALS
RENATA 0.60 0.77 0.80 0.85 0.89
PHARMACEUTICALS
TOTAL ASSET TURNOVER RATIO

1.00
0.80
0.60
0.40
0.20
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME PHARMACEUTICALS: On considering total assets it has showed that ACME

PHARMACEUTICALS had a ratio of 0.54 which suggest that they do not produce equal sales as a
portion of its total assets. They have the highest turnover in 0.54 in 2012-2013 and lowest turnover
in 2015-2016 which is 0.44.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Total Assets 16,573,644,043 22,179,571,084 23,259,771,941 28,889,710,630 29,947,231,509
Revenue 8,973,319,332 10,217,931,465 11,496,413,631 12,644,913,144 13,576,322,298
35 | P a g e
CENTRAL PHARMA: CENTRAL PHARMA had a very lower turnover ratio in 2012-2013 which is 0.06
and it is very risky and worse situation for a company as it is not generating enough sales for as
equal of its total assets because if the firm does not generate enough sales that are a way that the
company is now going down. They recovered it next year by 0.36 times turnover. But suddenly they
dropped down in next years.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Total assets 7,271,112,851 1,834,124,346 1,999,918,124 2,129,057,555 2,290,446,992
Sales 423,678,921 654,288,520 660,793,414 416,734,089 455,900,250
PHARMA AID: PHARMA AID had the same situation in the 2012-2013 session. But they are
generating revenue and gradually improving their situation. They have the lowest turnover in 2012-
2013 which is 0.64 and also they have the highest turnover in 2016-2017 which is 0.81.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Total assets 7,271,112,851 1,834,124,346 1,999,918,124 2,129,057,555 2,290,446,992
Sales 423,678,921 654,288,520 660,793,414 416,734,089 455,900,250
SQUARE PHARMACEUTICALS: Though the improvement was less they were gradually improving
their turnover but suddenly their turnover dropper down in 2016-2017. They have the highest
turnover in 2015-2016 which was 0.91.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Total Assets 27,551,671,215 31,046,074,531 35,191,156,263 44,303,769,450 52,531,052,249
Turnover 20,202,005,922 23,268,413,217 26,684,573,116 40,423,958,859 36,543,140,106
RENATA PHARMACEUTICALS: RENATA PHARMACEUTICALS gradually improved the turnover and

they have the highest turnover in the recent years 2016-2017 but as the sales are increasing it will
generate more in the future.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Total Assets 12,782,413,204 14,493,568,729 16,137,774,904 16,760,346,726 18,124,345,942
Turnover 7,632,078,333 11,107,281,260 12,880,957,428 14,200,840,456 16,043,431,021
Comparison: In comparison, it can be said that the SQUARE PHARMACEUTICALS and RENATA
PHARMACEUTICALS have a good position among all five until 2015-2016. Both of them had a near
similar turnover but in 2016 -2017-time period RENATA PHARMACEUTICALS’s turnover surpassed
SQUARE PHARMACEUTICALS.
36 | P a g e
6.3. DEBT MANAGEMENT RATIO
Debt management ratio is an important ratio that measurer how much the debt cause on the
organization success or failure. Debts are important because sometimes debts cause major failure to
the organization. A firm tries to decrease shareholders’ equity by increasing debts. Moreover, the
debts are deductible when the tax is calculated but the dividends are not tax deductible.
3.1. DEBT TO TOTAL ASSET RATIO

Debt ratio shows the effect on a firm’s asset by its liability. It’s also a ratio that shows us the
proportion between organizations total asset and total liability and shows how much assets are
financed by the creditors. The more the percentage is, the more is its dependency on total assets.
𝑡𝑜𝑡𝑎𝑙 𝑙𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑦
𝐷𝑒𝑏𝑡 𝑡𝑜 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡 𝑟𝑎𝑡𝑖𝑜:
𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡
Debt Management PARTICULARS 2012- 2013- 2014- 2015- 2016-
Ratio 2013 2014 2015 2016 2017
Debt to Total ACME 42.6% 51.8% 51.1% 43.4% 43.4%
Asset(%) CENTRAL 89.6% 22.2% 23.3% 23.4% 24.0%
PHARMA
PHARMA AID 46.4% 42.7% 38.6% 34.9% 30.5%
SQUARE 18.0% 13.8% 11.6% 8.5% 6.6%
RENATA 50.8% 46.5% 41.7% 37.1% 31.2%
100.0%
90.0%
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME PHARMACEUTICALS: ACME has liability and assets of 42.6% which is the least of last five
years. But the next two years they increased their liability by financing more through debt and then
in 2015-2016 and 2016-2017 they managed to lessen the ratio. In 2015-2016 the ratio was 43.4%
and in 2016-2017 the ratio was 43.4%.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

TOTAL LIABILITY 8,306,210,678 15,511,897,086 16,027,234,140 17,240,105,134 18,220,229,667
TOTAL ASSET 16,573,644,043 22,179,571,084 23,259,771,941 28,889,710,630 29,947,231,509
Central Pharma had almost equal to its liability and asset. It 2012-2013 session they had 89.6% of
assets that are financed by the liability. But in the next four years, they successfully handled it by
37 | P a g e
decreasing its liability and increasing its assets. They had 22.2% of assets financed by the creditors
which is the best performance among the five years. Their highest ratio was 89.6% and the lowest
22.2%
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

TOTAL LIABILITY 6,512,063,898 407,969,331 465,988,871 497,339,613 549,642,810
TOTAL ASSET 7,271,112,851 1,834,124,346 1,999,918,124 2,129,057,555 2,290,446,992
PHARMA AID
In recent year pharma aid has shown the best performance which is 30.5%. On the other years, they
always tried to lessen the debt to asset ratio. In 2012-2013 they had the highest ratio of 46.4%.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

TOTAL LIABILITY 70,857,445 73,700,085 72,414,682 72,414,682 67,663,484
TOTAL ASSET 152,560,830 172,800,008 187,674,196 207,674,731 222,195,379
SQUARE PHARMACEUTICALS
Square Pharmaceuticals had the highest ratio of 2012-2013 which is 18% and it is the best of the five
companies. It is clear they continuously decreased the total liability and increased total assets. They
had the best performance in 2016-2017 session which is 6.6%.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

TOTAL LIABILITY 4,957,726,318 4,297,122,799 4,099,523,843 3,745,680,916 3,490,677,898
TOTAL ASSETS 27,551,671,215 31,046,074,531 35,191,156,263 44,303,769,450 52,531,052,249
RENATA PHARMACEUTICALS
Renata Pharmaceuticals had the highest ratio of 50.8% in 2012-2013 and lowest of 31.8% in 2016-
2017. It indicates that they continuously decreased the total liability and increased total assets.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

TOTAL LIABILITY 6,487,298,593 6,742,855,666 6,731,915,307 6,217,269,612 5,649,810,238
TOTAL ASSET 12,782,413,204 14,493,568,729 16,137,774,904 16,760,346,726 18,124,345,942
COMPARISON: Square Pharma performed better than anyone. It is clear that they performed
better. When all the firms had a ratio high ration the square managed to control it much efficiently
than others.
38 | P a g e
6.3.2. LONG-TERM DEBT TO TOTAL ASSET
Whereas the debt to total asset ratio compares the total debt to total asset ratio, the long-
term debt to total asset ratio shows the effects of long-term debt to total asset effects. Here
the calculation only considers the long-term debt that can be said noncurrent liabilities. It
omits receivables and short-term loans
𝑙𝑜𝑛𝑔 𝑡𝑒𝑟𝑚 𝑑𝑒𝑏𝑡

𝐿𝑜𝑛𝑔 𝑇𝑒𝑟𝑚 𝐷𝑒𝑏𝑡 𝑡𝑜 𝑡𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡 𝑟𝑎𝑡𝑖𝑜:
Debt Management Ratio COMPANY 2012- 2013- 2014- 2015- 2016-

NAME 2013 2014 2015 2016 2017
Long-term Debt to Asset ACME 6.8% 13.8% 21.1% 13.7% 12.3%
Ratio CENTRAL 2.7% 7.9% 8.2% 7.9% 7.4%
PHARMA
PHARMA AID 0.0% 0.0% 0.0% 0.0% 1.7%
SQUARE 6.1% 6.1% 4.4% 2.4% 2.1%
RENATA 9.0% 10.5% 6.7% 7.1% 6.8%
LONG-TERM DEBT TO TOTAL ASSET RATIO

25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME PHARMACEUTICALS:
ACME had the highest ratio in the 2015-2016-time period which is 21.1% and lowest in the 2012-
2013 year which is 6.8%. They gradually increased their long-term debt rather than short-term debt.
In 2015-2016 and 2016-2017 they managed to lessen the ratio again which was up in the 2013-2014
and 2014-2015.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

LONG-TERM DEBT 1,128,412,130 3,057,678,428 4,904,881,207 3,958,448,269 3,675,912,676
TOTAL ASSET 16,573,644,043 22,179,571,084 23,259,771,941 28,889,710,630 29,947,231,509
39 | P a g e
CENTRAL PHARMA
It had a lower ratio in the 2012-2013 financial year but gradually they have increased their long-term
debt and the highest ratio was 8.2% which is in the 2014-2015 financial year.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

LONG-TERM DEBT 192,706,363 145,638,605 164,833,976 168,996,283 169,482,920
TOTAL ASSET 7,271,112,851 1,834,124,346 1,999,918,124 2,129,057,555 2,290,446,992
PHARMA AID
Pharma Aid had no long-term debt in the last five years except a 2016-2017 financial period. At that
time, they had a ratio of 1.7%
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

LONG-TERM DEBT 0 3,800,000
TOTAL ASSET 152,560,830 172,800,008 187,674,196 207,674,731 222,195,379
SQUARE had 6.1% of long-term debt in both 2012-2013 and 2013-2014 financial year. They lessen
their ratio and finally, they got the ratio of 2.4% which is the best performance in a 2016-2017
financial year.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

LONG-TERM 1,682,318,885 1,902,585,673 1,550,505,777 1,054,498,262 1,129,233,846
DEBT
TOTAL ASSETS 27,551,671,215 31,046,074,531 35,191,156,263 44,303,769,450 52,531,052,249
RENATA did not perform better in 2012-2013 and 2013-2014 they had the lowest performance in a
2013-2014 financial year and the highest performance is 6.7%.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
LONG-TERM DEBT 1,153,677,518 1,528,677,115 1,084,702,802 1,196,985,513 1,233,238,501
TOTAL ASSET 12,782,413,204 14,493,568,729 16,137,774,904 16,760,346,726 18,124,345,942
COMPARISON
As pharma aid had no long-term debt so they are performing better than anyone. Apart from it the
SQUARE Is performing better in comparison with others.
40 | P a g e
6.3.3. DEBT TO EQUITY RATIO
Debt to equity ratio shows us the comparison between the shareholder’s equity and total debt. It
shows how much the total debt is in comparison with shareholder’s equity. Firms have the two
sources from where they can invest more for the future and these two sources are very common. for
many firms’ investment through debt is better than equity and for many equities is better than debt.
𝑡𝑜𝑡𝑎𝑙 𝑑𝑒𝑏𝑡
𝐷𝑒𝑏𝑡 𝑡𝑜 𝐸𝑞𝑢𝑖𝑡𝑦 𝑟𝑎𝑡𝑖𝑜:
𝑠ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠 𝐸𝑞𝑢𝑖𝑡𝑦
Debt Management COMPANY NAME 2012- 2013- 2014- 2015- 2016-

Ratio 2013 2014 2015 2016 2017
Debt to Equity Ratio(%) ACME 0.74 1.07 1.05 0.77 0.77
CENTRAL 8.58 0.29 0.30 0.30 0.32
PHARMA
PHARMA AID 0.87 0.74 0.62 0.54 0.44
SQUARE 0.22 0.16 0.13 0.09 0.07
RENATA 1.03 0.87 0.72 0.59 0.45
DEBT TO EQUITY RATIO

10.00
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME PHARMACEUTICALS
Acme shows that they have more equity than their liability except in the year 2013-2014. ACME has
a stable relationship in financing both ways. Their financing policy is either the same amount of
liability of equity or more equity than a liability. As liability decrease the net income by creating
more interest expense so they avoided financing by liability. The lowest ratio was 0.74 times.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
TOTAL LIABILITY 7,056,195,541 11,487,407,902 11,887,142,349 12,525,238,649 12,990,954,383

SHAREHOLDERS EQUITY 9,517,448,502 10,692,163,182 11,372,629,592 16,364,471,981 16,956,277,126
41 | P a g e
CENTRAL PHARMA
Every year they used more equity than liability except the year in 2012-2013. They had an excessive
liability that shows their aggressive mentality in financing their asset or operation. They had a debt
to equity ratio of 8.58 times (2012-2013) which at last was 0.31 times (2016-2017)
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

TOTAL LIABILITY 6,512,063,898 407,969,331 465,988,871 497,339,613 549,642,810
SHAREHOLDERS EQUITY 759,048,753 1,426,155,015 1,533,929,250 1,631,717,942 1,740,804,182
PHARMA AID
Pharma Aid’s lowest ratio was 0.44 times (2016-2017) shows that they had a lower liability than
shareholders’ equity. They had the highest ratio of 0.87 times which says that they had 0.87 times
higher equity than a liability
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

TOTAL LIABILITY 70,857,445 73,700,085 72,414,682 72,414,682 67,663,484
SHAREHOLDERS EQUITY 81,703,385 99,099,923 116,773,129 134,914,371 154,531,895
Square gave the best performance in comparison with all other companies. They financed 0.21 times
in 2012-2013 financial and gradually they lessen the level of liability than the equity. It shows that
they are thinking of shareholders benefit also with own benefit. They are being also trying to lessen
the debt, the table suggests that at last, they had 0.71 times of liability in 2016-2017
COMPANY NAME 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

TOTAL LIABILITY 4,957,726,318 4,297,122,799 4,099,523,843 3,745,680,916 3,490,677,898
SHAREHOLDERS 22,593,944,89 26,748,951,73 31,091,632,42 40,558,088,53 49,040,374,35
EQUITY 7 2 0 4 1
RENATA has higher liability in 2013-2014 at that time. They also decreased their liability level in five
years. They had the lowest level of liability in 2016-2017
COMPANY NAME 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
TOTAL LIABILITY 6,487,298,593 6,742,855,666 6,731,915,307 6,217,269,612 5,649,810,238

COMPARISON: According to the graph, and analysis it is clear that all of them tried to decrease their
liability as it creates more expense and that decrease the net income. Square did the best in every
year. They had the less liability in all time and among all firms.
42 | P a g e
6.3.4. EQUITY MULTIPLIER
Equity multiplier gives the result of the comparison between total asset and total equity. It shows
the result of the total assets financed by its equity. The more result shows that the firm has created
more assets with its shareholder's equity.
𝐸𝑞𝑢𝑖𝑡𝑦 𝑀𝑢𝑙𝑡𝑖𝑝𝑙𝑖𝑒𝑟 ∶
𝑠ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠 𝑒𝑞𝑢𝑖𝑡𝑦
Debt Management COMPANY 2012- 2013- 2014- 2015- 2016-

Ratio NAME 2013 2014 2015 2016 2017
Equity ACME 1.74 2.07 2.05 1.77 1.77
Multiplier(times) CENTRAL 9.58 1.29 1.30 1.30 1.32
PHARMA
PHARMA AID 1.87 1.74 1.61 1.54 1.44
SQUARE 1.22 1.16 1.13 1.09 1.07
RENATA 2.03 1.87 1.72 1.59 1.45
EQUITY MULTIPLIER
12.00
10.00
8.00
6.00
4.00
2.00
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME created 2.7 times higher assets with its shareholder's equity in 2013-2014 and they had the
lowest ratio of 1.74 times in 2013-2014. ACME started to generate less ratio in 2014-2015 and they
had a lower ratio for the next two years in comparison with others years.
COMPANY NAME 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

TOTAL ASSET 16,573,644,04 22,179,571,08 23,259,771,94 28,889,710,63 29,947,231,50
3 4 1 0 9
SHAREHOLDERS 9,517,448,502 10,692,163,18 11,372,629,59 16,364,471,98 16,956,277,12
EQUITY 2 2 1 6
43 | P a g e
CENTRAL PHARMA
Central Pharma generated the highest ratio 9.58 times (2012-2013). It is the best performance of the
five companies. But they followed the same trend of decreasing the ration in the next four years.
Their lowest ratio was 1.29times (2013-2014)
COMPANY NAME 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

TOTAL ASSET 7,271,112,851 1,834,124,346 1,999,918,124 2,129,057,555 2,290,446,992
PHARMA AID
PHARMA AID generated 1.87 times higher equity than with its shareholder's equity. This was the
highest in all five years and after that, they started to fall down and was unable to generate that
many total assets but the other figures were near the ratio in 2013-2014.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

TOTAL ASSET 152,560,830 172,800,008 187,674,196 207,674,731 222,195,379
They have the same situation as pharma aid. They also have a decreasing trend but the result was
near one another. Their assets were almost the same as their equity and sometimes 4-5 lakh more
assets from their equity.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Total Assets 27,551,671,215 31,046,074,531 35,191,156,263 44,303,769,450 52,531,052,249
Shareholders' Equity 22,593,944,897 26,748,951,732 31,091,632,420 40,558,088,534 49,040,374,351
RENATA PHARMACEUTICALS: Renata's highest result was in 2012-2014 and it was 2.07 times higher
than it equity. The had a decreasing ratio in the following years and in 2016-2017 it created the
lowest ratio that is 1.45 times.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
TOTAL ASSET 12,782,413,204 14,493,568,729 16,137,774,904 16,760,346,726 18,124,345,942
COMPARISON
According to the graph, it is clear that all the firms generated nearby results but ACME was better in
the last five years except 2012-2013.
44 | P a g e
6.4. PROFITABILITY RATIO
Profitability is the net result of a number of policies and decisions. The ratios examined thus far
provide some information about the way the firm is operating, but the profitability ratios show the
combined effects of liquidity management, asset management, and debt management on operating
results.
6.4.1. NET PROFIT MARGIN

Net profit margin shows what a firm earns on every 100TK sales and when this ratio is shown at
times it shows what an organization earns on every 1Tk sale. As net profit as compared to sales and
net profit is shown as numerator and sales as the denominator. More value in the result of this ratio
will be regarded as the best.
𝑵𝒆𝒕 𝒑𝒓𝒐𝒇𝒊𝒕
𝑵𝒆𝒕 𝒑𝒓𝒐𝒇𝒊𝒕 𝒎𝒂𝒓𝒈𝒊𝒏 =
Profitability Ratio COMPANY NAME 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Net Profit Margin(%) ACME 14.8% 8.8% 8.0% 8.7% 10.3%
CENTRAL PHARMA 18.4% 23.3% 21.7% 23.5% 23.9%
PHARMA AID 4.4% 13.8% 17.4% 15.4% 16.4%
SQUARE 18.0% 18.3% 19.4% 24.4% 26.6%
RENATA 16.8% 15.4% 15.6% 15.4% 16.3%
NET PROFIT MARGIN

30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME had the highest ratio of 14.8 %( 2012-2013) and the lowest ratio of 8.0%(2014-2015). They
had a tendency of lower profit gain that is clear in the ratio. They could not sustain the position after
2012-2013 and started to decline.
45 | P a g e
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
NET INCOME 1,327,209,078 894,731,939 922,900,735 1,101,267,816 1,401,828,815
REVENUE 8,973,319,332 10,217,931,465 11,496,413,631 12,644,913,144 13,576,322,298
CENTRAL PHARMA
CENTRAL PHARMA had the highest net profit margin of 23.9% and the lowest net profit margin of
18.4% and the firm had a continuous growth in net profit margin ration. Every year the earned more
than 20Tk sales on every 100tk sale.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 77,841,227 152,258,172 143,424,235 97,788,692 109,086,240
REVENUE 423,678,921 654,288,520 660,793,414 416,734,089 455,900,250
PHARMA AID
PHARMA AID earned the highest 17.4% and lowest 4.4%. Their ratio was 13.8% after 2012-2013 and
always had a fluctuating rate which shows neither decreasing nor increasing.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 4,328,090 17,396,538 25,473,206 23,472,265 29,568,524
REVENUE 97,615,975 125,807,499 146,704,491 152,136,254 180,236,917
SQUARE earned the highest 26.6% and the lowest at 18.0%. The highest earning happened during
the year 2016-2017 and the lowest in 2012-2013. They have a trend of gradually improving the
result in this aspect.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 3,637,997,573 4,250,580,863 5,186,436,869 9,844,097,426 9,719,176,205
REVENUE 20,202,005,922 23,268,413,217 26,684,573,116 40,423,958,859 36,543,140,106
RENATA Produced almost same results every year. Their earnings are more or less similar every year.
No major changes happen in these five years. The amount of net income and revenue also shows the
same result.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 1,282,946,365 1,710,862,525 2,006,641,464 2,190,985,908 2,612,142,414
REVENUE 7,632,078,333 11,107,281,260 12,880,957,428 14,200,840,456 16,043,431,021
46 | P a g e
In comparison, a conclusion can be given that CENTRAL PHARMA and SQUARE performed better
than other. Both have a tendency of earning more. They may also have tried to lessen their costs
and maybe tried to earn revenue. Both ways are appreciated for the best performance.
6.4.2. GROSS PROFIT MARGIN

Whereas the net profit margin shows the result of earnings and cost management, the gross profit
margin shows the result of earnings in comparison with gross profit. More gross profit can be earned
by increasing revenue and also by increasing revenue.
𝑮𝒓𝒐𝒔𝒔 𝒑𝒓𝒐𝒇𝒊𝒕
𝑮𝒓𝒐𝒔𝒔 𝒑𝒓𝒐𝒇𝒊𝒕 𝒎𝒂𝒓𝒈𝒊𝒏 =
Profitability Ratio COMPANY NAME 2012- 2013- 2014- 2015- 2016-

2013 2014 2015 2016 2017
Gross Profit Margin(%) ACME 36.2% 39.0% 37.4% 38.5% 40.8%
CENTRAL 48.7% 49.8% 49.1% 49.2% 48.4%
PHARMA
PHARMA AID 23.8% 34.8% 38.4% 35.3% 37.2%
SQUARE 44.0% 44.3% 44.0% 48.2% 50.0%
RENATA 52.8% 51.2% 50.8% 50.9% 50.5%
GROSS PROFIT MARGIN

60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME has the highest result in 2016-2017 and they earned 40.8%. This indicates that they had the
lowest cost of goods sold in the last five years. The lowest result of 36.2% indicates that the firm has
the highest cost of goods sold in the last five years. The income statement figure also shows the
same result.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

GROSS PROFIT 3,252,298,522 3,980,138,911 4,301,415,659 4,874,303,055 5,536,492,742
REVENUE 8,973,319,332 10,217,931,465 11,496,413,631 12,644,913,144 13,576,322,298
47 | P a g e
CENTRAL PHARMA
They had the highest result of 49.8%(2013-2014) and the lowest 48.4%(2016-2017). The effect of the
cost of goods sold was not huge to affect the organization.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

GROSS PROFIT 206,421,716 325,577,147 324,265,957 205,184,475 220,778,314
REVENUE 423,678,921 654,288,520 660,793,414 416,734,089 455,900,250
PHARMA AID
PHARMA AID had the highest profit margin of 38.4% and the lowest profit margin of 23.8%.
PHARMA AID’s profit margin was increasing from 2012-2015 but the trend fell down in the 2015-
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

GROSS PROFIT 23,211,312 43,783,323 56,318,729 53,759,913 67,017,397
REVENUE 97,615,975 125,807,499 146,704,491 152,136,254 180,236,917
2016 session and started to regain its position in recent years.
SQUARE pharmaceuticals always followed an increasing trend. The highest ratio was 50% and the
lowest ratio of 44.0%. The ratios followed an increasing trend.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

GROSS PROFIT 8,893,148,214 10,307,674,534 11,741,702,961 19,466,693,608 18,268,281,192
REVENUE 20,202,005,922 23,268,413,217 26,684,573,116 40,423,958,859 36,543,140,106
RENATA had the highest ratio of 52.8% and the lowest ratio of 50.5%. They always tried to sustain in
their upward trend and in the last five years they always gained more than 50% of profit margin.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

GROSS PROFIT 4,028,993,639 5,688,309,854 6,545,154,188 7,233,862,032 8,102,926,325
REVENUE 7,632,078,333 11,107,281,260 12,880,957,428 14,200,840,456 16,043,431,021
In comparison, the highest ratio was 52.8% earned by RENATA and the lowest ratio was 23.8% by
PHARMA AID. Both happened in the 2012-2013-year time period. Renata and PHARMA AID gained
50% or more profit margin but others did not achieve it so they are in a better position than others.
48 | P a g e
6.4.3. RETURN ON ASSET
Return on asset ratio shows us that as assets are used to gain profit so how much profit any firm is
earning by their investment on the assets. If any organization is not earning that much income their
ratio will be less than the others which will show that they use more debt than others that create
more and more interest which is the reason for diminishing ROE ratio or other costs may affect the
net income.
𝑹𝒆𝒕𝒖𝒓𝒏 𝒐𝒏 𝒂𝒔𝒔𝒆𝒕 =
𝑻𝒐𝒕𝒂𝒍 𝒂𝒔𝒔𝒆𝒕

Return on asset(%) ACME 8.0% 4.0% 4.0% 3.8% 4.7%
CENTRAL PHARMA 1.1% 8.3% 7.2% 4.6% 4.8%
PHARMA AID 2.8% 10.1% 13.6% 11.3% 13.3%
SQUARE 13.2% 13.7% 14.7% 22.2% 18.5%
RENATA 10.0% 11.8% 12.4% 13.1% 14.4%
RETURN ON ASSET
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME had the highest ratio in 2012-2012 and that is 8% and the lowest ratio of 3.8% in the 2014-
2015-year time period. It suggests that somehow their net income is not satisfactory.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 1,327,209,078 894,731,939 922,900,735 1,101,267,816 1,401,828,815
TOTAL ASSET 16,573,644,043 22,179,571,084 23,259,771,941 28,889,710,630 29,947,231,509
49 | P a g e
CENTRAL PHARMA
CENTRAL PHARMA’s income statement says that their net income increased to 2014-2015 but
suddenly they fell down in 2015-2016. Their ratio tells the same thing. Their highest return on asset
was 8.3%(2013-2014) and the lowest 1.1%(2012-2013)
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 77,841,227 152,258,172 143,424,235 97,788,692 109,086,240
TOTAL ASSET 7,271,112,851 1,834,124,346 1,999,918,124 2,129,057,555 2,290,446,992
PHARMA AID
CENTRAL PHARMA had the highest 13.6%(2014-2015) and the lowest at 2.8%(2012-2013). Net
income in the income statement also portrays the same thing. Their net income is increasing day by
day but that does not support the increase of total asset.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 4,328,090 17,396,538 25,473,206 23,472,265 29,568,524
TOTAL ASSET 152,560,830 172,800,008 187,674,196 207,674,731 222,195,379
SQUARE PHARMACEUTICAL
As from the debt ratio we have seen that SQUARE had a very less debt ratio and most are financed
by their shareholders so they had no extra charges of interest expense so they are efficiently using
their assets because predictable net income is generating. Highest ROA was 22.2% and the lowest
13.2%.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 3,637,997,573 4,250,580,863 5,186,436,869 9,844,097,426 9,719,176,205
TOTAL ASSET 27,551,671,215 31,046,074,531 35,191,156,263 44,303,769,450 52,531,052,249
RENATA’s highest ratio was 10.0% and the lowest at 14.4%. It is gradually improving their
performance and improving according to the time.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 1,282,946,365 1,710,862,525 2,006,641,464 2,190,985,908 2,612,142,414
TOTAL ASSET 12,782,413,204 14,493,568,729 16,137,774,904 16,760,346,726 18,124,345,942
In comparison, It is clear that SQUARE is performing better than other four in the industry. It also is
seen in the debt ratio that they are financing less from debts and that does not cost much interest
expense which is good for them.
50 | P a g e
6.4.4. RETURN ON EQUITY
The rate of return on stockholder’s investment is computed as return on equity. The more profit will
be there will be more rate in equity which the company gives the organization as dividend or bonus
share.
𝑹𝒆𝒕𝒖𝒓𝒏 𝒐𝒏 𝑬𝒒𝒖𝒊𝒕𝒚 =
𝑬𝒒𝒖𝒊𝒕𝒚

Return on Equity(%) ACME 13.9% 8.4% 8.1% 6.7% 8.3%
CENTRAL PHARMA 10.3% 10.7% 9.4% 6.0% 6.3%
PHARMA AID 5.3% 17.6% 21.8% 17.4% 19.1%
SQUARE 16.1% 15.9% 16.7% 24.3% 19.8%
RENATA 20.4% 22.1% 21.3% 20.8% 20.9%
RETURN ON EQUITY
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ACME pharmaceuticals have the highest return on equity on 2012-2013. Their return on equity was
13.9% which is also lower than the SQUARE and RENATA. Their lowest return on equity was 6.7% in
2015-2016 and it was just more than CENTRAL PHARMA.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 1,327,209,078 894,731,939 922,900,735 1,101,267,816 1,401,828,815
SHAREHOLDERS' EQUITY 9,517,448,502 10,692,163,182 11,372,629,592 16,364,471,981 16,956,277,126
51 | P a g e
CENTRAL PHARMA
CENTRAL PHARMA’s highest return on equity was 10.7%(2013-2014) which was more than ACME on
that year and at that time they did not perform in a comparison with other firms. They had the
lowest at 6.0%(2015-2016) Which was the most less among all the 5 companies.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 77,841,227 152,258,172 143,424,235 97,788,692 109,086,240
PHARMA AID
PHARMA AID had the highest ROE of 21.8 %( 2014-2015) which was the highest ROE on that year.
They had the lowest ROE of 5.3% (2012-2013) which was the lowest of the five companies.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 4,328,090 17,396,538 25,473,206 23,472,265 29,568,524
SQUARE’s highest was 24.3 %( 2015-2016) which was also the highest ROE on that year and the
lowest 15.9%(2013-2014) which was just less than RENATA.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 3,637,997,573 4,250,580,863 5,186,436,869 9,844,097,426 9,719,176,205
RENATA’s highest ROE was 22.1% (2013-2014) which was the highest among all the organizations on
that year and the lowest 20.4% (2014-2015) which was the highest among all the organizations.
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

NET INCOME 1,282,946,365 1,710,862,525 2,006,641,464 2,190,985,908 2,612,142,414
Comparison: As shown in the graph RENATA performed continuously well in all 5 Years. Most of
the year their ROE was more than 20% where others ROE was not that much constant.
52 | P a g e
ORGANIZATION TO ORGANIZATION COMPARISON
CURRENT RATIO
12.00
10.00
8.00
6.00
4.00
2.00
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
TOP PERFORMER SQUARE
LEAST PERFORMER ACME
QUICK RATIO
10.00
8.00
6.00
4.00
2.00
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

LEAST PERFORMER RENATA
INVENTORY TURNOVER RATIO

10.00
8.00
6.00
4.00
2.00
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
TOP PERFORMER PHARMA AID

LEAST PERFORMER CENTRAL PHARMA
53 | P a g e
DAYS SALES OUTSTANDING
10.00
8.00
6.00
4.00
2.00
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

LEAST PERFORMER PHARMA AID
FIXED ASSET TURNOVER

3.00
2.50
2.00
1.50
1.00
0.50
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

TOTAL ASSET TURNOVER

1.00
0.80
0.60
0.40
0.20
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
TOP PERFORMER RENATA

54 | P a g e
DEBT TO TOTAL ASSET
100.0%
80.0%
60.0%
40.0%
20.0%
0.0%
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

LONG-TERM DEBT TO TOTAL ASSET

25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
-5.0%

DEBT TO EQUITY RATIO

1.20
1.00
0.80
0.60
0.40
0.20
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

55 | P a g e
EQUITY MILTIPLIER
12.00
10.00
8.00
6.00
4.00
2.00
0.00
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
TOP PERFORMER ACME

LEAST PERFORMER SQUARE
NET PROFIT MARGIN

30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
TOP PERFORMER CENTRAL PHARMA

GROSS PROFIT MARGIN

60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
0.0%
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

LEAST PERFORMER PHARMA AID
56 | P a g e
RETURN ON ASSET
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

RETURN ON EQUITY
30.0%
25.0%
20.0%
15.0%
10.0%
5.0%
0.0%
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

LEAST PERFORMER ACME, CENTRAL PHARMA
57 | P a g e
CHAPTER SEVEN:
FINDINGS AND
CONCLUSION
58 | P a g e
7.FINDINGS AND CONCLUSION
7.1. FINDINGS:
This paper shows necessary information that is important for the investors to make an
investment decision. The ratios are actually used to predict the future performance of an
organization. Where income statement and balance sheet just shows the numbers, the
ratios show the effectiveness of those numbers.
Liquidity ratio shows the capability of paying the organization’s short-term obligations.
Holding enough liquid money is an indication of smooth operational activity. It also suggests
that the organization has the ability to pay dividends to its shareholder, payables and also
employee salary.
Asset management ratio shows the organization’s effectiveness in managing assets. Assets
are two types one is short-term assets and another is long-term assets which also includes
receivables, inventories as short-term assets and property, plant and equipment as long-
term assets. The organization’s the most important task is to invest in the assets as they will
help to generate sales. An investor will show the report and can easily distinguish the
performance among organizations.
Debt management ratio shows the management of debt. As an owner of the company the
owner will always try to create loans and do business with that money and gain more profit
with that but as a common stockholder, the stockholder will try to find out the organizations
debt management because it causes failure of the system and sometimes the organization
goes under bankruptcy. Debt includes long-term debts and short-term debts. If an
organization has a long-term debt like deferred tax liability, any long-term bank loans or
gratuity, it increases the vulnerability of the organization. This paper provides that
information.
Profitability ratio shows what an organization earn-in term of his investment and it is a
combination of all the ratios which can prove the effect of it on other ratios. It shows the
comparison between, sales and net profit, net profit, and total asset and equity with a net
profit.
An investor will be benefited when he will find enough decision criteria to make major
decisions. An organization’s increase in sales does not show that he is performing better
because may be the organization’s expenses are increasing day by day and they have not
enough ability to finance in short long-term assets because more long-term assets need
financing from retained earnings or shareholder’s equity.
One numerical figure does not show that much information to decide the investment
On the other hand, there are other companies who are performing in an industry.
Organizations publish the annual report but they do not publish analytical report so this
paper will provide the comparison among five companies in the pharmaceuticals industry.
59 | P a g e
There is no significant relationship between ratios result with its overall performance as
every organization has different investing and management policies but an investor can link
the result of the ratios with his or her investment criteria.
7.2. CONCLUSION
As the research has demonstrated that the major analysis of five different companies but it
is more fruitful when it contains a more sample for research. (Nenide, Pricer, & S., 2008)
recommended. some basic points for a meaningful data like data entry errors, negative
denominators, outlier influence and normality of distribution. The financial statements and
the balance sheet are the key statements so it should be more valid and accurate otherwise
it will provide wrong information misleading wrong decision. As an investor, the paper
provides the proper guideline for the investors to decide the proper organization for the
investment.
60 | P a g e
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expenditure-per-capita
Lanka Bangla Financial Portal. (n.d.). Central Pharmaceuticals Limited (CENTRALPHL). Retrieved from
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pharmaceuticals-
limited/listPortalPaginationAnnouncement.html?isLimited=true&storyPortalCategoryId=2&c
ompanyId=329&stockId=567
Lanka Bangla Financial Portal. (n.d.). Pharma Aids Limited (PHARMAID). Retrieved from Lanka Bangla
Financial Portal:
http://lankabd.com/portal/null/DSE/listPortalPaginationAnnouncement.html?isLimited=true
&storyPortalCategoryId=2&companyId=146&goToHomePageParam=true&stockId=146&site
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Language=e
Lanka Bangla Financial Portal. (n.d.). Renata Limited (RENATA). Retrieved from Lanka Bangla
Financial Portal: http://lankabd.com/dse/stock-market/RENATA/renata-
ompanyId=148&goToHomePageParam=true&stockId=148
Lanka Bangla Financial Portal. (n.d.). Square Pharmaceuticals Limited (SQURPHARMA). Retrieved
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market/SQURPHARMA/square-pharmaceuticals-
ompanyId=150&goToHomePageParam=true&stockId=150
Nenide, B., Pricer, R. W., & S., C. M. (2008, July 26). The use of financial ratios for research: Problems
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Rahman, M. F. (2017, July 06). Pharma sector to grow at 15pc a year: study. Retrieved from The Daily
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Rahman, S. (2018, February 20). A glance at two success stories. Retrieved from The Daily Star:
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63 | P a g e
APPENDIX
A. BALANCE SHEET (ACME)
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
ASSETS
Non-Current Assets 8,684,201,210 15,544,508,282 16,060,787,303 17,286,351,573 18,275,901,469
PPE 8,306,210,678 15,511,897,086 16,027,234,140 17,240,105,134 18,220,229,667
Intangible Assets 338,132 286,875 245,250 203,625 162,000
Investment in shares 351,467,400 6,139,321 7,122,913 19,857,814 32,405,390
Investment Property 26,185,000 26,185,000 26,185,000 26,185,000 23,104,412
Current Assets 7,889,442,833 6,635,062,802 7,198,984,638 11,603,359,057 11,671,330,040
Inventories 1,886,267,051 2,223,003,434 2,484,869,763 2,749,539,322 2,907,608,895
Trade Receivables 471,021,187 644,867,067 729,654,988 891,843,015 1,227,081,694
Other Receivable 76,067,715 74,526,105 40,721,339 7,323,164 135,275,733
Advance deposit 2,347,694,271 1,097,408,239 986,392,966 1,033,642,589 1,434,353,400
and prepayments
Advance Income Tax 1,273,276,904 1,334,147,374 1,820,547,016 1,843,423,421 2,037,434,874
material in transit 162,465,596 294,476,484 285,524,549 354,476,936 492,696,854
term deposit 1,220,000,000 553,201,740 419,003,619 3,575,000,000 2,054,000,000
cash and cash 452,650,109 413,432,359 432,270,398 1,148,110,610 1,382,878,590
equivalents
TOTAL ASSET 16,573,644,043 22,179,571,084 23,259,771,941 28,889,710,630 29,947,231,509
EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY 9,517,448,502 10,692,163,182 11,372,629,592 16,364,471,981 16,956,277,126
Share capital 1,556,311,000 1,616,017,000 1,616,017,000 2,116,017,000 2,116,017,000
Share Premium 1,605,066,569 1,605,066,569 1,605,066,569 5,127,599,728 5,127,599,728
Revaluation Surplus 4,488,695,133 5,429,804,848 5,320,065,830 5,642,930,494 5,487,674,207
Capital Reserve 40,166,723 0 0 0
Share Money Deposit 500,000,000 0 0 0
Gain/loss on Marketable 0 841,041 1,824,633 2,254,655 6,233,532
Securities
(Unrealized)
Tax Holiday Reserve 0 91,006,996 139,860,882 172,245,959 179,464,241
Retained Earnings 1,327,209,077 1,949,426,728 2,689,794,678 3,303,424,145 4,039,288,418
Non-current liabilities 1,128,412,130 3,057,678,428 4,904,881,207 3,958,448,269 3,675,912,676

Long Term Loan 1,003,604,234 3,018,088,196 4,721,113,988 3,637,654,598 3,025,882,035
(Net of current maturity)
Provision For Gratuity 0 30,465,330 57,776,500 206,370,155 268,364,985
Deferred Tax Liability 124,807,896 9,124,902 125,990,719 114,423,516 981,665,656
Current Liability 5,927,783,411 8,429,729,474 6,982,261,142 8,566,790,380 9,315,041,707

Loans and overdrafts 3,614,173,307 4,874,126,240 3,099,847,325 4,709,652,954 5,304,039,335
Long Term loan-current 384,236,310 1,014,864,198 1,609,081,078 1,695,003,924 1,791,905,667
maturity
UNDP Grant 0 0 0 0 0
i
APPENDIX
Trade Payable 506,963,399 528,302,125 432,244,843 391,028,767 211,268,759

Provision for Income Tax 1,168,807,914 1,245,658,922 1,556,306,023 1,542,631,343 1,804,196,185
Liability for Expenses 154,524,731 160,054,589 133,076,893 166,281,466 201,024,941
and Others
Dividend Payable 99,077,750 606,723,400 151,704,980 62,191,926 2,606,820
TOTAL LIABILITY 7,056,195,541 11,487,407,902 11,887,142,349 12,525,238,649 12,990,954,383
Total 16,573,644,043 22,179,571,084 23,259,771,941 28,889,710,630 29,947,231,509
B. INCOME STATEMENT(ACME)
INCOME STATEMENT(ACME)
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
REVENUE 8,973,319,332 10,217,931,465 11,496,413,631 12,644,913,144 13,576,322,298
Less: Cost of goods sold 5,721,020,810 6,237,792,554 7,194,997,972 7,770,610,089 8,039,829,556
GROSS PROFIT 3,252,298,522 3,980,138,911 4,301,415,659 4,874,303,055 5,536,492,742
Add: Other Income 20,146,796 108,071,977 41,127,977 45,609,335 190,150,441
3,272,445,318 4,088,210,888 4,342,543,636 4,919,912,390 5,726,643,183
Less: Selling, Marketing, 1,330,346,506 1,499,828,917 1,555,756,698 1,838,411,776 1,963,666,866
distribution
expense
1,942,098,812 2,588,381,971 2,786,786,938 3,081,500,614 3,762,976,317
Less: Administrative 552,068,993 546,384,337 387,355,878 493,607,401 533,384,270
Expense
1,390,029,819 2,041,997,634 2,399,431,060 2,587,893,213 3,229,592,047
Less: Financial Expense 538,786,487 776,911,190 982,529,496 1,115,687,099 1,015,500,106
851,243,333 1,265,086,444 1,416,901,564 1,472,206,114 2,214,091,941
Less: Loss due to fire 0 0 0 0 76,763,961
incident
Profit before 851,243,333 1,265,086,444 1,416,901,564 1,472,206,114 2,137,327,980
contribution
to WPPF(operating
Income)
Less: Contribution to 40,535,397 60,242,211 67,471,503 70,105,053 101,777,523
WPPF
Net Profit before Tax 810,707,936 1,204,844,233 1,349,430,061 1,402,101,061 2,035,550,457
Less: Current Tax 304,015,476 426,626,328 310,674,101 312,400,470 370,458,379
Expense
Less: Deferred Tax 996,665 115,682,993 116,865,817 11,567,203 267,242,140
Net Profit after Tax 505,695,795 893,890,898 921,917,143 1,101,267,794 1,397,849,938
Other Comprehensive
Income
Gain/Loss On Marketable 841,041 983,592 430,022 3,978,877
Securities
(Unrealized)
NET INCOME 1,327,209,078 894,731,939 922,900,735 1,101,267,816 1,401,828,815
ii
APPENDIX
C.BALANCE SHEET (CENTRAL PHARMA)
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

ASSETS
Non-Current Assets 623,306,709 1,142,444,093 1,136,989,109 1,097,500,049 1,056,805,602
PPE 594,453,797 1,119,632,901 1,136,750,362 1,097,285,177 1,056,612,218
Intangible Assets 294,750 265,275 238,747 214,872 193,384
IPO Expenses 28,558,162 22,545,917
Current Assets 6,647,806,142 691,680,253 862,929,015 1,031,557,506 1,233,641,390

Inventories 208,818,339 298,972,455 343,952,055 389,201,629 434,212,783
Spare Parts & Supplies 18,556,245 27,041,770 28,875,960 27,569,583 41,211,177
Advances, Deposits 90,263,364 162,970,128 209,541,303 217,469,219 254,953,295
and Prepayments
Accounts Receivable 96,546,722 179,578,245 252,623,452 387,987,401 494,605,483
Cash and Bank Balance 6,233,621,472 23,117,655 27,936,245 9,929,674 8,658,653
TOTAL ASSET 7,271,112,851 1,834,124,346 1,999,918,124 2,129,057,555 2,290,446,992
EQUITY AND LIABILITY
Share Capital 620,000,000 713,000,000 819,950,000 942,942,500 1,037,236,750
Revaluation Reserve 514,848,089 514,848,089 514,848,089 514,848,089
Retained Earnings 139,048,753 198,306,926 199,131,161 173,927,353 188,719,343
Non-Current Liabilities 192,706,363 145,638,605 164,833,976 168,996,283 169,482,920
Project Loan 145,105,303 89,961,233 104,107,070 106,232,789 106,232,789
Deferred Tax Liability 47,601,260 55,677,372 60,726,909 62,763,494 63,250,131
Current Liabilities 6,319,357,535 262,330,726 301,154,895 328,343,330 380,159,890
Short Term Loan 116,766,885 120,449,091 105,537,185 104,152,185 104,152,185
Current Portion of Project 50,035,212
Loan
Sundry Creditors 8,545,154 7,168,419 5,337,752 4,080,654 4,665,427
Liabilities for Expenses 65,521,804 128,249,161 183,684,210 359,082 14,416,735
Others Payable 6,078,488,480 6,464,055 6,595,748 6,582,325 6,582,325
Provision for tax liability 206,514,066 243,038,359
Workers Profit Participation 6,655,018 7,304,859
Fund
TOTAL LIABILITY 6,512,063,898 407,969,331 465,988,871 497,339,613 549,642,810
TOTAL 7,271,112,851 1,834,124,346 1,999,918,124 2,129,057,555 2,290,446,992
iii
APPENDIX
D.INCOME STATEMENT (CENTRAL PHARMA)
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

REVENUE 423,678,921 654,288,520 660,793,414 416,734,089 455,900,250
(-)Cost of Goods Sold 217,257,205 328,711,373 336,527,457 211,549,614 234,900,250
GROSS PROFIT 206,421,716 325,577,147 324,265,957 205,184,475 220,778,314
(-)Operating Expenses 52,239,924 63,956,518 84,005,079 61,669,583 53,537,769
Administrative Expense 12,173,567 18,234,700 35,975,878 16,416,500 14,132,099
Selling and Distribution Expenses 40,066,357 45,721,818 48,029,201 45,253,083 39,405,670
Operating Income 154,181,792 261,620,629 240,260,878 143,514,892 167,240,545
(-)Other Income 38,021,745 12,136,485 25,442 6,189 7,375
EBIT 192,203,537 273,757,114 240,286,320 143,521,081 167,247,920
(-)Financial Expenses 36,474,514 41,548,839 25,255,339 3,765,691 13,845,891
Net Profit/Loss Before 155,729,023 232,208,275 215,030,981 139,755,390 153,402,029
WPPF(EBT)
(-)Contribution to workers 7,415,668 11,057,537 10,239,571 6,655,018 7,304,859
profit participation Fund
Net Profit/Loss Before TAX 148,313,355 221,150,738 204,791,410 133,100,369 146,097,170
(-)Income Tax Expenses 70,472,128 68,892,565 61,367,175 35,311,677 37,010,930
Current Tax 55,617,508 60,816,453 56,317,638 33,275,092 36,424,293
Deferred Tax 14,854,620 8,076,112 5,049,537 2,036,585 486,637
NET INCOME 77,841,227 152,258,172 143,424,235 97,788,692 109,086,240
E. BALANCE SHEET (PHARMA AID)
2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

ASSETS
Non-Current Assets
PPE 78,881,772 74,283,847 71,995,876 65,257,105 66,212,277
Current Assets 73,679,058 98,516,161 115,678,320 142,417,626 155,983,102
Inventories 8,482,725 9,658,023 14,956,008 10,655,288 19,784,305
Trade Receivables 41,668,343 62,850,480 60,307,262 70,072,942 78,579,645
Other Receivables 3,622,135 1,834,091 15,990,546 21,844,042 26,011,233
Advance, Deposit & Prepayments 18,332,686 20,673,082 20,972,332 28,619,120 22,347,099
Goods In Transit 782,723 2,920,115 378,643 3,221,415 585,889
Cash and Cash Equivalent 790,446 570,370 3,073,529 8,004,819 8,674,931
TOTAL ASSET 152,560,830 172,800,008 187,674,196 207,674,731 222,195,379
EQUITY AND LIABILITIES
Issued Share Capital 31,200,000 31,200,000 31,200,000 31,200,000 31,200,000
Tax Holiday Reserve 2,867,808 2,867,808 2,867,808 2,867,808 2,867,808
Retained Earnings 47,635,577 65,032,115 82,705,321 2,468,977 1,877,977
CSR Fund 98,377,586 118,586,110
Noncurrent liabilities
iv
APPENDIX
long Term Loan 0 3,800,000

Current Liabilities 70,857,445 73,700,085 72,414,682 72,414,682 63,863,484
Trade Payable 3,422,475 3,420,755 5,199,739 3,827,614 1,901,142
Loan Advance 23,513,767 22,055,433 10,410,614 1,200,000
Cash Credit/TR 12,868,481 14,144,330 18,705,603 12,860,664 1,649,892
Liabilities For Expenses 6,547,371 9,230,670 10,420,471 12,323,581 18,475,098
Dividend Payable 12,183,991 7,642,657 7,763,358 10,437,378 8,897,177
CSR Fund 1,340,695 10,017,391 11,468,817
Income Tax Payable 11,567,830 15,518,660 14,650,753 20,499,878 15,586,779
Liabilities For WPPF 753,530 1,687,580 2,409,834 2,448,176 3,149,575
Liabilities for provident Fund 345,678 1,535,004
TOTAL LIABILITY 70,857,445 73,700,085 72,414,682 72,414,682 67,663,484
TOTAL EQUITY AND LIABILITY 152,560,830 172,800,008 189,187,811 207,329,053 222,195,379
F. INCOME STATEMENT (PHARMA AID)
2012-13 2013-2014 2014-2015 2015-2016 2016-2017

REVENUE 97,615,975 125,807,499 146,704,491 152,136,254 180,236,917
GROSS PROFIT 23,211,312 43,783,323 56,318,729 53,759,913 67,017,397
Operating Expenses
Selling and Admin Expense 12,400,293 13,395,875 14,875,583 17,171,230 19,860,462
Operating Income 10,811,019 30,387,448 41,443,146 36,588,683 47,156,935
Other Income 107,907 33,775 10,675 125,092 13,717
EBIT 10,918,926 30,421,223 41,453,821 36,713,775 47,170,652
Financial Expenses 4,650,658 5,226,237 3,914,360 2,123,069 1,309,648
Net Profit/Loss Before WPPF 6,268,268 25,194,986 37,539,461 34,590,706 45,861,004
Contribution to workers 298,489 1,199,761 1,787,593 1,647,176 2,183,857
profit participation Fund
Net Profit/Loss Before TAX 5,969,779 23,995,225 35,751,868 32,943,530 43,677,147
Income Tax Provision 1,641,689 6,598,687 8,937,967 8,235,883 14,108,623
Profit After Tax for the year 4,328,090 17,396,538 26,813,901 24,707,647 29,568,524
CSRF @ 5% on Net Profit 0 0 1,340,695 1,235,382 0
after Tax
NET PROFIT AFTER CSRF 4,328,090 17,396,538 25,473,206 23,472,265 29,568,524
FOR THE YEAR
Other comprehensive Income 0
NET INCOME 4,328,090 17,396,538 25,473,206 23,472,265 29,568,524
G. BALANCE SHEET(SQUARE)
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017
Non-Current Assets 20,605,309,448 23,546,701,250 25,458,986,164 27,240,402,799 29355222227
Property, Plant and 9,908,013,592 13,933,689,469 18,009,200,507 18,848,282,139 19323568164
Equipment
v
APPENDIX
Capital work in progress 4,907,039,756 3,256,802,171 207,629,864 -- --

Investment in Subsidiary 157,694,430 5,364,154,708 6,036,139,963 6,764,511,325 7504636420
Investment in long term 4,914,958,933 147,694,430 251,599,097 555,873,893 588808565
assets
Other Investment 686,985,768 844,360,472 879,249,484 -- --
Pre Operating and 30,616,969 -- -- -- --
Preliminary Expense
Deferred Tax assets -- -- 75,167,249 -- --
Other Assets -- -- -- 1,071,735,442 1938209078
Current Assets: 6,946,361,767 7,499,373,281 9,732,170,099 17,063,366,651 23175830022
Inventories 3,091,263,712 2,737,085,779 3,310,086,668 3,694,711,088 3730808243
Trade Debtors 812,741,029 766,634,978 894,543,303 1,335,829,914 2204014900
Advance, Deposits and 952,411,276 671,749,541 750,169,066 1,131,340,560 1450936735
Prepayments
Short term 1,108,757,914 1,161,185,776 885,185,428 2,378,929,958 21386290
loan/Investment
Cash and Cash 981,187,836 2,162,717,207 3,892,185,634 8,522,555,131 15768683854
equivalents
TOTAL ASSET 27,551,671,215 31,046,074,531 35,191,156,263 44,303,769,450 52531052249
SHAREHOLDERS EQUITY 22,593,944,897 26,748,951,732 31,091,632,420 40,558,088,534 49040374351
Share Capital 3,707,686,640 4,819,992,630 5,542,991,520 6,235,865,460 6859452000
Share Premium 2,035,465,000 2,035,465,000 2,035,465,000 2,035,465,000 2035465000
General Reserve 105,878,200 105,878,200 105,878,200 105,878,200 105878200
Tax Holiday Reserve 406,231,702 406,231,702 -- 301,826,665 852508043
Other Reserve and 313,532,224 449,255,557 265,332,813 266,786,579 596561713
surplus
Retained Earnings 16,017,431,580 18,922,758,840 23,143,634,751 31,611,672,794 38577835254
Non-Controlling Interest 7,719,551 9,369,803 1,669,864 593,836 12674141
Non-Current Liabilities 1,682,318,885 1,902,585,673 1,550,505,777 1,054,498,262 1129233846
Long term loans secured 1,106,327,183 1,183,627,923 659,147,818 -- --
Deferred tax liability 575,991,702 718,957,750 891,357,959 1,054,498,262 1129233846
Current Liabilities 3,275,407,433 2,394,537,126 2,549,018,066 2,691,182,654 2361444052
Creditors for goods 7,034,724 217,855,755 254,773,030 693,982,698 843937277
Short term borrowing 1,302,048,378 131,104,817 -- 2,693,932 --
Accrued Expense -- 20,518,598 43,002,246 -- --
Liabilities for other 1,425,902,995 1,563,624,134 1,994,088,121 1,951,634,806 1489930233
finance
Long term borrowings 540,421,336 461,433,822 257,154,669 -- --
Current maturity
Others Liabilities -- -- -- 42,871,218 27576542
TOTAL LIABILITY 4,957,726,318 4,297,122,799 4,099,523,843 3,745,680,916 3490677898
Total Liabilities & 27,551,671,215 31,046,074,531 35,191,156,263 44,303,769,450 52531052249
Shareholders’ Equity
vi
APPENDIX
H. INCOME STATEMENT(SQUARE)
PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

REVENUE 20,202,005,922 23,268,413,217 26,684,573,116 40,423,958,859 36,543,140,106
GROSS PROFIT 8,893,148,214 10,307,674,534 11,741,702,961 19,466,693,608 18,268,281,192
Operating expenses 3,694,443,818 4,162,889,868 4,533,477,076 6,531,608,135 5,972,062,210
Selling and distribution 2,955,935,819 3,431,938,716 3,757,838,863 5,444,568,339 5,056,851,926
expenses
Administrative expenses 738,507,999 730,951,152 775,638,213 1,087,039,796 915,210,284
Profit from operations 5,198,704,396 6,144,784,666 7,208,225,885 12,935,085,473 12,296,218,982
Other income 377,846,808 245,133,874 293,730,506 759,699,382 1,093,575,634
EBIT 5,576,551,204 6,389,918,540 7,501,956,391 13,694,784,855 13,389,794,616
Financial expenses 357,151,743 177,131,396 158,614,307 19,453,529 154,389
Net profit before WPPF 5,219,399,461 6,212,787,144 7,343,342,084 13,675,331,326 13,389,640,227
Allocation for WPPF 246,729,864 300,438,842 379,795,062 657,734,060 646,577,651
Net profit before tax 4,972,669,597 5,912,348,302 6,963,547,022 13,017,597,266 12,743,062,576
Provision for income tax 1,237,851,545 1,518,801,391 1,679,877,193 2,935,192,288 2,949,150,787
Provision for deferred 96,820,479 142,966,048 172,400,209 238,307,552 74,735,584
income tax
Profit/(loss) brought -- -- 75,167,249 -- --
forward
NET INCOME 3,637,997,573 4,250,580,863 5,186,436,869 9,844,097,426 9,719,176,205
I.BALANCE SHEET(RENATA)
. 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Non-Current Assets 8573700405 9197198644 9654591592 9816031917 10388162518
Property, Plant and 6348183516 8106692561 8695862142 8969965833 9172888570
Equipment
Capital work in 2026083847 857479062 723265414 702996708 1072204572
progress
Investment in 143069376 143069376 143069376 143069376 143069376
Subsidiary
Other Investment 56363666 89957645 92394660 0 --
vii
APPENDIX
Current Assets: 4208712799 5296370085 6483183312 6944314809 7736183424

Inventories 2657779255 2760765470 3374274252 3361710600 3229222893
Trade Receivables 1142685421 1355185477 1750889884 2029259467 1995758417
Advance, Deposits 167985236 207268076 242482445 234064598 295949018
and Prepayments
Investment in -- -- -- 108193744 804899466
marketable securities
Cash and Cash 240262887 251975735 290874236 450611442 617236028

equivalents
Others Receivable -- 721175327 724662495 760474958 793117602
Inter-company -- -- 100000000 --
receivables
TOTAL ASSET 12782413204 14493568729 16137774904 16760346726 18124345942
SHAREHOLDERS 6295114611 7750713063 9405859597 10543077114 12474535704
EQUITY
Share Capital 353023430 441279290 529535140 529535140 608965410
Tax Holiday Reserve 249496624 296337069 315027439 --
Revaluation Reserve 157477414 156998911 156520407 156281949 155285034
Capital Reserve -- 13110323 -- --
Other Reserve and -- -- 14481443 8266952 21635191
surplus
Retained Earnings 5535117143 6842987470 8390295168 9848993073 11688650069
Non-Current 1153677518 1528677115 1084702802 1196985513 1233238501
Liabilities
Long term loans 477306667 782510495 328914992 250095990 95910932
secured
Deferred tax liability 473840609 545897110 755787810 946889523 1137327569
Liability for gratuity 202530242 200269510 -- --
& WPPF
Other Liabilities -- -- -- --
Current Liabilities 5333621075 5214178551 5647212505 5020284099 4416571737
Creditors for goods 64986063 124715572 263501276 281252786 180070553
Short term 3041324251 3321414754 3233496219 2598322461 1968852024
borrowing
Accrued Expense 263876962 -- 663423754 509252776 681270985
Unclaimed Dividend 9915749 -- 17061417 16758740 26585338
Provision for -- -- -- --
employee benefit
Income Tax Payable 370595092 624740709 752246219 945454055 749176975
Liabilities for other 353179625 418070205 -- --
finance
Long term 229743333 235900003 157000003 156800003 161200000
borrowings Current
maturity
Dividend Payable -- 12963898 -- --
viii
APPENDIX
Others Liabilities 1000000000 476373410 560483617 512443278 649415862

TOTAL LIABILITY 6487298593 6742855666 6731915307 6217269612 5649810238
Book Value Per 178 176 178 205
Share
Total Liabilities & 12782413204 14493568729 16137774904 16760346726 18124345942
Shareholders’ Equity
J. INCOME STATEMENT(RENATA)
Particulars 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

REVENUE 7,632,078,333 11,107,281,260 12,880,957,428 14,200,840,456 16,043,431,021
GROSS PROFIT 4,028,993,639 5,688,309,854 6,545,154,188 7,233,862,032 8,102,926,325
Operating, Selling
and distribution 1,802,842,910 2,794,405,786 3,408,119,130 3,613,885,944 4,063,427,289
expenses
Other income 398,849 17,036,235 12,907,658 13,464,195 35,959,568
Others expense 762,817
EBIT 1,802,478,942 2,811,442,021 3,421,026,788 3,627,350,139 4,099,386,857
Financial expenses 374,558,159 463,471,214 281,854,767 270,445,958 199,157,898
Net profit before
1,851,228,602 2,447,469,089 2,868,087,949 3,336,065,935 3,876,300,706
WPPF
Allocation for
88,153,743 116,546,147 136,575,616 160,142,585 184,585,748
WPPF
Net profit before
1,763,074,859 2,330,922,942 2,731,512,333 3,175,923,350 3,691,714,958
tax
Provision for
480,128,494 620,060,417 514,822,787 734,412,361 891,379,438
income tax
Provision for
deferred income -- -- 210,048,082 250,525,081 188,193,106
tax
NET INCOME 1,282,946,365 1,710,862,525 2,006,641,464 2,190,985,908 2,612,142,414
ix

Comparative Analysis On Bangladesh Pharmaceuticals Industry PDF

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Comparative Analysis On Bangladesh Pharmaceuticals Industry PDF

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A Study of

Date of Submission: 10th August, 2018

10th August, 2018

Subject: Submission of Project Work.

Finally, it is shown the organization to organization comparison on different ratios and

1.1. ORIGIN OF THE REPORT

The objectives are:

i. Study the market of Bangladesh pharma sector

1.3. LIMITATIONS OF THE STUDY

Limitations of the study are

3.2. TYPES OF PRODUCTS

Firms Type Functional Non-Functional Suspended Production Held Total

3.3. GROWTH OF BANGLADESH PHARMACEUTICALS INDUSTRY

2013-2014 2014-2015 2015-2016 2016-2017

3.4. FIVE MAJOR FACTORS THAT AFFECT THE RISE OF INDUSTRY

3.5. PORTERS FIVE FORCES MODEL

4.1. RENATA PHARMACEUTICA

EMPLOYEE: It has more than 7000 employees working in the organization.

It produces four types of products and service in the market.

4.3. CENTRAL PHARMACEUTICALS

HISTORY:It is successfully operating a business in Dhaka. This company was actually

HISTORY: SQUARE pharmaceuticals is one of the largest pharmaceuticals company in

EXPORT-IMPORTING COUNTRIES: Now it is exporting to more than 36 countries like in Asia

DISTRIBUTION CHANNELS IN BANGLADESH: It has 11 depots in Bangladesh and all of them

PRODUCT VARIATION: It has pharmaceuticals product, Herbal and Nutraceuticals product

4.5. PHARMA AID BANGLADESH

It has several other businesses in other sectors:

1. Excelsior Trading Corporation

Data type: Secondary

Data Selection: 1. Website of Organizations

5.2. DATA SELECTION

5.3. ANALYSIS TOOLS

1 Current Ratio(times) Current Asset/current liability

2 Quick Ratio(times) Current Asset-inventory/current liability

Asset Management Ratio Formula

3 Inventory Turnover Ratio(times) cost of goods sold/Inventory

4 Days Sales Outstanding(days) Annual Receivables/(Annual Sales/360)

5 Fixed Asset Turnover(times) Sales/Net Fixed Asset

6 Total Asset Turnover (times) Sales/Total Asset

Debt Management Formula

7 Debt to Total Asset(%) Total Liability/Total Asset

8 Long-term Debt to Total Asset Long-term Liability/Total Asset

9 Debt to Equity Ratio(times) Total Liability/Shareholders Equity

10 Equity Multiplier(times) Total Asset/Shareholders Equity

Profitability Ratio Formula

11 Net Profit Margin(%) Net Profit/Sales

12 Gross Profit Margin(%) Gross Profit/Sales

13 Return On Asset Net profit/Total Asset

14 Return On Equity Net Profit/Total Equity

6.1. LIQQUIDITY RATIO

6.1.1 CURRENT RATIO

ACME CENTRAL PHARMA PHARMA AID SQUARE RENATA

PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

Square Pharmaceuticals: Square pharmaceuticals performed better than anyone in the

PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

LIQUIDITY COMPANY NAME 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

1.2 Quick Ratio

ACME CENTRAL PHARMA PHARMA AID SQUARE RENATA

PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017

PARTICULARS 2012-2013 2013-2014 2014-2015 2015-2016 2016-2017