AMERICAN INTERNATIONAL UNIVERSITY -

BANGLADESH

A Study On “ACME Laboratory Ltd.”

2020
CORPORATE FINANCIAL
STRATEGY

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 AMERICAN INTERNATIONAL UNIVERSITY - BANGLADESH
F

Faculty of Business Administration

Case Title: Decision-Making : Ratio Analysis

Assign. /Case No : 01 Date of Submission : 26th Nov 2020

Course Title : Corporate Financial Strategy Course Code : 01197

Section :A Semesters : FALL

Session : 2019-2020 Program : EMBA

Course Conductor & Supervised By: Prof. Dr. Nisar Ahmed

Group Name: 6

NO Name ID Signature

1 Md. Saidur Rahman 20-91685-1

2 Md. Monabbirul Islam 20-91683-1

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 3 Nayan Paul 20-91648-1

4 Tashnim Sharmin 20-91691-1

ABSTRACT
A Research paper which
speck about the Financial
Policy & Moved in an
organization.
Analysis Based on “ACME
Laboratory Ltd.”

COURSE TITLE
Corporate Financial Strategy

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 Table of Content

Serial Topic Page No.

❖ Executive Summary

Preparatory Part
➢ Origin of the Report
Chapter-1 ➢ Objective of the Study
8-10
➢ Scope of the Study
➢ Limitation of the Study
➢ Methodology

Company Profile
Chapter-2 ➢ Over View
➢ Mission Vision & Slogan
11-17
➢ Core Value
➢ History
➢ Acme’s Recognition

Chapter-3 Organizational Structure & Financial Analysis

➢ Organogram
18-22
➢ Corporate Governance
➢ Approach

Strategic Management Analysis for ACME

Chapter-4 ➢ Composition of Shareholder Position
➢ Stock market Price
➢ Statement of Financial Position 2017- 23-38
2019
➢ Statement of Profit & Loss 2017-2019
➢ Statement of Cash Flow 2017-2019
➢ Ratio Analysis 2017-2019

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 Problems Recommendation & Conclusion
Chapter-5 ➢ Problems 39-41
➢ Recomendation
➢ Conclusion

42
❖ References

Executive Summery

This Study describes the strategic policy & move adopted by Acme Laboratory Ltd.

The ACME Laboratories Ltd. is a leading company for manufacturing world-class and top-
quality pharmaceutical products in Bangladesh. The ACME Laboratories Ltd are currently
producing more than 500 products in different dosage forms covering broader therapeutic
categories which include anti-infective, cardiovascular, antidiabetics, gastrointestinal, CNS,
respiratory disease etc. among many others. The success in local market prompted us to
explore the international market and over the years we gained a firm presence in South East
Asia, Africa and Central America and continuously discovering new horizons to improve the
quality of life for patients, to further the success of our customers and to help meet global
challenges. Through the outstanding knowledge, professionalism and commitment of more
than 7000 employees, we are consistently building upon our facilities, capabilities and also
portfolio to meet the growing health care needs.

We are united, inspired and fueled by our mission to ensure health vigour and happiness for
all. Since our founding in 1954 by Mr. Hamidur Rahman Sinha, an entrepreneur and
philanthropist in this region of then British divided Indian sub-continent, we have been
committed to offering solutions to our most pressing health care needs. More than half a
century later, we remain true to our founder’s vision and values – to produce high quality
medicines with integrity, customer focus, pro-activity, team spirit, excellence and desire to
win and responding to social and environmental needs. Over the past few decades, we have
seen an amazing growth and success in pharmaceutical sector. With more than 60 years of
expertise in medicine and science, our company draws upon a rich legacy of high quality

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formulations and a robust pipeline of promising generic medicines at affordable price to meet
the health care needs.

Since 1954 ACME has been stood for quality, business success and responsible
entrepreneurship. Our heritage and our values are the foundation of our mission to ensure
health, vigour and happiness for mankind.

CME’s success in the domestic market prompted it to explore the international market. With
the philosophy of ensuring health, vigour and happiness for the whole mankind, ACME
started its international business operations in 1995 by exporting medicines to Bhutan. Since
then, ACME made a strong presence in the international market. At present, ACME is
successfully exporting its quality products to more than 20 countries in South Asia, South
East Asia, Africa and Central America.

The future promises greater prospects for the international marketing of ACME. ACME
being aware of the global opportunities for pharmaceutical business relentlessly bolsters its
international presence by capacity building, quality products and superior services.

ACME believes in customer satisfaction and this is evident from the dedication of staffs and
management. To maintain standards, regular capacity building training is provided for the
workforce.

The company has core values, such as, Integrity, Passion, Commitment, Determination,
Growth, and Speed. Over the years, company have diversified from the trading business to
manufacturing and sole distributorship. ACME has remained true to providing customers
with the very best in product selection and service.

The pharmaceuticals industry of Bangladesh has become one of the most attractive and risk
free manufacturing industry in recent years. It has vast opportunity and long term growth. As
a result, Pharmacy industry has become the top priority sector for most of the investors. All
the big business groups in Bangladesh have already entered in this industry along with lot of
new investors which made the industry of too many competitors. Consequently, the
competition has become very stiff and profitability has gone down significantly.

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ACME Laboratories Ltd is yet to maximize the full manufacturing capacity of its Dhamrai
plant even though they have invested huge capital to establish the facility. One of the reasons
for this is the wrong estimation of market demand and accordingly built the plant on the basis
of that estimation. ACME Laboratories Ltd had made a long term estimation for building the
facility and their estimation did not realize due to slow market growth and increasing number
of new competitor’s entry in the industry. Recently, ACME Laboratories Ltd has started to
export overseas by utilizing the present capacity.

To make the way smooth while entering more world market, ACME Laboratories Ltd should
take initiative for strategic alliance with big foreign reputed companies. This is easier for
ACME Laboratories Ltd for developing cooperative partnership, as it has already some
connection and association with some major foreign companies. This strategic move will
enable ACME Laboratories Ltd to understand cross-cultural knowledge, which is a vital
competitive advantage for international business.

To provide more value for the money, ACME Laboratories Ltd has two options – reduce the
price maintaining the same quality or maintain the price increasing the quality. As ACME
Laboratories Ltd must maintain the current quality, it has to reduce the price slightly to make
its products more competitive in the market. Even if this step reduces the profitability of the
firm, ACME Laboratories Ltd has to consider it and implement this strategy for the short-
term. This will increase their ultimate profitability in the future by an increase the market
demand dramatically resulting in realization of scale economy, thus reducing overall cost.

The first step of the implementation plan is to develop a series of short, medium and long-
term expenditure budget to execute the above-recommended strategies and find out the
source of financing them. Because of the good credit worthiness to the lenders it is not very
difficult to finance the planned expenditures for Acme alternative sources are available –
issuance of new market shares of stocks, issuance of corporate bonds and taking loans from
commercial banks. The first option has the risk of declination of the stock price because of
issuance of new stocks. The second one is difficult because of the thin market of corporate
bonds in Bangladesh. The final option is relatively easier and less costly.

In order to do this Acme has to remove the limitation regarding sales force and distributions
channel. As stated earlier, this problem is resulting in loss of prospective sales and relative
company growth.

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 Chapter One

Preparatory Part

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1. Origin of the report

It is necessary for the students to have practical usage of their report in relation to their
theoretical classes which they took during their four years of study in university. In order to
get the senario, our course conductor Prof. Dr. Nisar Ahmed, has assigned us to prepare a
research report based on curriculum ‘Corporate Financial Strategy’ Course’ dividing
different groups

We are following four students comprises of Group – A

➢ Md. Saidur Rahman -Student ID – 20-91685-1

➢ Md. Monabbirul Islam -Student ID – 20-91683-1
➢ Nayan Paul -Student ID – 20-91648-1
➢ Tasnim Sharmin -Student ID – 20-91691-1

For this reason, we have prepared this report on “Financial Analysis” of ACME
Laboratories Limited

2. Objective of the Study

The main aim of the report is to identify how theories and concepts discussed in the MBA
program which can be applied in the context of financial analysis at a Pharmaceuticals
organization in Bangladesh. Thus, the objectives of the report are:

1. To know about the financial position of ACME Laboratories Ltd.

2. To know what kind of activities is done in pharmaceuticals sector.

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 3. To know the performance of this company

This report starts using a company background and then proceeds by having an analysis of
the outside and internal environment of the industry and the company, followed by its
strategic practices at different amounts, understanding the company vision, vision and
objectives.

3. Scope of the Study

The study of this written report will be limited on function-based o theory and its real time
implication to an organization for the purpose of learning, how to develop of research paper.
Based on the annual report of the company, my responsibility is to find out the efficiency and
inefficiency of The ACME Laboratories Limited.

4. Limitation of the Study

Due to obvious purpose ACME Laboratories Limited did not disclose all information needed
to develop this curriculum based on research. The time allocated for our report seemed very
short, which is two weeks. It was very short time to experience the overall study of the
corporate environment. But it was really a great opportunity for me to have a very friendly
and helpful environment to work. Due to the company policy regarding disclosing internal
information, it was not possible to collect more data necessary for the paper. In addition, a
broader research was not possible due to time constraints and data limitations.

5. Methodology

The following methodology has been used to prepare the report.

• Primary Source:

Primary data has been collected from ACME Laboratories Limited through a personal
interview in a very limited scale

• Secondary Data:

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 All the necessary data has been collected from the-

✓ Website of ACME Laboratory Ltd.

✓ Reference Book
✓ Deferent reports collected from the website

Chapter Two

Company Profile

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1. Over View

The pharmaceutical industry in Bangladesh is one of the most developed technology sectors
within Bangladesh. Manufacturers produce insulin, hormones, and cancer drugs. This sector
provides 97% of the total medicinal requirement of the local market. The industry also
exports medicines to global markets, including Europe. Pharmaceutical companies are
expanding their business with the aim to expand the export market. The pharmaceutical
industry in Bangladesh is one of the most developed hi-tech sectors within the country's
economy. The industry manufactured about 5,600 brands of medicines in different dosage
forms. There were 1,495 wholesale drug license holders and about 37,700 retail drug license
holders in Bangladesh. Due to recent development of this sector, the industry is exporting
medicines to global markets, including the European market. This sector is also providing
97% of the total medicine requirement of the local market. The Industry exports active
pharmaceutical ingredients (APIs) and a wide range of pharmaceutical products, covering all
major therapeutic classes and dosage forms, to 79 countries. Along with regular forms like
tablets, capsules and syrups, Bangladesh also exports specialized products like HFA inhalers,
CFC inhalers, suppositories, nasal sprays, injectable, IV infusions, etc. These products have
been well accepted by medical practitioners, chemists, patients and the regulatory bodies of
all of their importing nations. The packaging and the presentation of the products of
Bangladesh are comparable to any international standard. ACME is one of the top 10 leading
companies of Bangladesh.

2. Company Slogan

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We are an ISO 9001:2015 certified company. “Perpetual Quest for Excellence” is our quality
slogan.

3. Mission Statement

Our holistic approach is to ensure Health, Vigour and Happiness for all by manufacturing
ethical drugs and medicines of the highest quality at affordable price and expanding in the
local and global market.

We view ourselves as partners with the doctors, healthcare professionals, all other customers,
our employees and harmonize with environmental issues.

4. Vision

To ensure Health, Vigour and Happiness for all.

5. Core Values

Our company values are the measure for our thinking and actions. They are the core of what
ties us together in the past, present and future. We do business on the basis of common
values. Our success is based on customer focus, team spirit, desire to win, pro-activity,
integrity and excellence. These values determine our actions in our daily dealing
with customers and business partners as well as in our teamwork and our collaboration with
each other.

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6. History

“Since 1954, ACME’s dynamic journey of successful transformation from good to great”

In 1954, ACME was founded modestly as a Proprietorship Firm at Narayangonj by the great
visionary, the Late Hamidur Rahman Sinha, with a very noble and holistic motto to ensure
health, vigour and happiness for all.

At that time, the prevalent environment for establishing any industry by an East Pakistani
Entrepreneur was very much difficult. But due to unplugging zeal, courage and enthusiasm of
Mr. Hamidur Rahman Sinha together with his ardent desires and pragmatic leadership did not
let the journey of ACME stop. In this noble journey undoubtedly the continued support and
cooperation of Mr. Sinha’s beloved wife, Late Nurjahan Sinha, was a fundamental source of
inspiration.

ACME’s journey during pre-liberation period was not smooth at all rather it was very much
crucial, challenging, and full of uncertainty as because in those days, the pharmaceuticals
market was dominated by multinational companies and the negative attitude of the Pakistani
rulers towards East Pakistani Entrepreneurs as well.

Because of previous successful business track record of Late Hamidur Rahman Sinha, during
pre-partition period coupled with the rich heirs of business legacy from his father, he was a
very sound business planner. As such, he made a foolproof strategic planning for the
chronological journey and transformation of the company to make it a success story.

In 1971, the great liberation war was fought and the overall situation of the country was
drastically deteriorated until independence was won in December 1971. After liberation, the
factory of ACME had to transfer to Dhaka for an interim period with a view to eventually
transfer it in a larger location outside Dhaka City.

In 1976, the ACME was converted into a Private Limited Company for giving it perpetual
shape and eventually in 1983, the ACME’s plant was transferred to Dhamrai on the outskirts
of the capital about forty kilometers away from Dhaka City after making BMRE. At that time
Mr. Mizanur Rahman Sinha became Managing Director of the company and Dr. Jabilur

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Rahman Sinha and Mr. Afzalur Rahman Sinha became Deputy Managing Directors of the
Company apart from other promoter Directors.

Mr. Hamidur Rahman Sinha gave his children appropriate education, trained them about
business during his lifetime and set them on proper path with a long-term succession plan for
running the organization. After sad demise of Mr. Hamidur Rahman Sinha in 1994, his eldest
son Mr. Nasir-Ur Rahman Sinha became Chairman of the company.

At that crucial time when Company was suffering the agony of founder’s sad demise, the
Managing Director & CEO of the company, Mr. Mizanur Rahman Sinha was the one who
played pivotal role of the company and build a very well-motivated team of Directors,
Shareholders and total Human Resources of the company to materialize the unfinished tasks
of late Founder. Then after, Mr. Mizanur Rahman Sinha concentrated his mind to re-build
ACME completely in a new state of art facilities in all respect in order to meet the global
challenges of the medicinal world of 21st century. In this phase Mr. Mizanur Rahman Sinha
played the role of a visionary leader, great catalyst and versatile facilitator. By his charismatic
leadership, appropriate decision making abilities, bold perseverance together with the
wholehearted efforts of other key Directors and dedicated efficient professionals, company
went through huge expansion phases and established most modern state of the art production
line facilities. He also turned the ordinary Marketing & Distribution network into one of the
strongest in National and International grounds making the company one of the top players in
Pharmaceutical Industry of Bangladesh. In order to make the plans successful and to take its
best shot, in 2011 The ACME Laboratories Limited converted into a Public Limited
Company for strengthening its capacity & skill and also accelerating its speed to meet the
global challenges of 21st century.

With a view to reinforce the strength of Board of Directors and to ensure more transparency
and good governance in day to day business activities of the company, two Nominee
Directors namely Mr. Md. Fayekuzzaman, Managing Director of ICB and Mr. Md. Abdur
Rouf, General Manager of ICB joined in the Board in 2013. In 2014, another two persons
namely Syed Shahed Reza, Ex-Ambassador and Ms. Fouzia Haque, FCA joined as
Independent Directors. All the above four Directors are highly professional, skilled, well-
experienced and reputed in their respective field of business.

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Unfortunately, in 2014 Mr. Nasir Ur Rahman Sinha, voluntarily retired from the post of the
Chairman due to his prolonged severe physical illness and Mr. Afzalur Rahman Sinha was
appointed as Chairman of the company on 21st September, 2014.

Virtually ACME’s starting in 1954, was a modest but a very good and noble initiative. In
1976, converting the sole Proprietorship Firm into a Private Limited Company was a better
and more sustainable approach. Finally, transforming it into a Public Limited Company and
amalgamating with its sister concern in the recent past has turned into a great company.

ACME’s Recognition

As a part of continuous improvement policy the company renewed and upgraded its ISO
Certification to ISO 9001:2015 in the year 2017. We are relentlessly working for overseas
accreditation to put an extra hold in our export potentials as well as local brand image.
Currently, we are closely working under the supervision of European consultants eyeing for
UK MHRA certification and expect to achieve by this year. The company is also working in-
house & externally to expand its horizon to the US market. Excellence is recognized

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ACME earned two prestigious awards from State Pharmaceutical Corporation (SPC), Sri
Lanka in 2019.

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 Chapter Three

Organizational Structure

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ACME has professional sets of people working in our various business sectors. The team is
dedicated to ensure the mission of the company. They maintain high standard of corporate
culture throughout the organization. The team has got mix of experience length, age and
gender.

1.1 Founder

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1.2 Current Board of Directors

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1.3 Corporate Governance

Corporate governance is a set of policies, processes and procedures affecting the way a
company is controlled and administered. It covers stakeholders, the relationship between
them, the company and the strategic vision of the company. Corporate Governance principles
as applied by the Company rests on transparency, adequate disclosures, complete compliance
with the laws, equality, professionalism, accountability and ultimately the target of
maximizing shareholders value besides catering to the interests of the creditors, employees,
the environment and the society in broad.

Company’s philosophy of corporate governance represents the dual goals of protecting the
interests of all stakeholders while respecting duty of the board and management to oversee
affairs of the company and promote long-term growth and profitability.

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1.4 Approach to Corporate Governance

ACME’s approach to governance, which has been largely consistent over time, is to:

➢ Promote long term profitability of the company while prudently managing risk
➢ Drive superior and sustainable shareholder value over long term through alignment of
the interests of stakeholders and employee
➢ Meet stakeholder expectations of sound corporate governance as a part of ACME’s
broader responsibilities to clients, shareholders, investors and the community in which
it operates.

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Company has the relentless endeavor to implement and maintain superior standards of
Corporate Governance norms and has been practicing the principles of good Corporate
Governance. We are committed to run business in a manner which will ensure sustainable,
capital efficient and long-term growth and in order to achieve these. Company has built up a
strong base stone for making Corporate Governance a way of life by having an independent
board with experts of eminence and integrity, inducting competent professionals across the
organization and putting in place best systems, process and technology.

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 Chapter Four

Financial Analysis

1.1 Composition of Shareholder Position

The Finance and Accounts Departments of The ACME Laboratories Limited has a sub
division of 8, which process ad monitor all financial aspects of the company. All the business
transactions are dealt by these sub divisions and they are also accountable to maintain the
company policy and practices. All the internal reports are prepared by this division of
employees for the shareholders as per the requirement of the company and Bangladesh
Financial Reporting Standards (BFRS) and also the internal audit department looks into the
overall financial information for monitor and control. They manage and control future cash
collection and disbursements by utilizing the available resources effectively and efficiently.
This generates more cash inflow. In addition, they collect necessary information and use
software to collect data and prepare the necessary vouchers for further records. Also,
Microsoft Excel is commonly used by all the members for data processing. However, the
members of this department have to be very alert and proactive to avoid any kind of wrong
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inputs. It might be seemed like very easy job but the contribution of this department is
considered essential.

Shareholding Position as on 30 June 2019 of the Company is given below:

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1.2 Highest & lowest Equity share in Stock Exchange

1.3 Annual Financial Report: Comparison from 2017-2019

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1.3.1 Balance sheet: 2017-2019

1.3.2 Income Statement: 2017-2019

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1.3.3 Cash Flow Statement: 2017-2019

1.4 Ratio Analysis: 2017-2019

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 Liquidity or Short-Term Solvency Analysis

A company’s liquidity measures the ability of the company to liquidate or convert its assets to cash
and cash equivalents. It also determines the ability of meeting short-term liabilities through payment
of cash and cash equivalents in case of bankruptcy. Current ratio and Cash ratio, these two ratios will
be used, to determine liquidity or short- term solvency of The ACME Laboratories Limited.

Current Ratio

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Current ratio will help us to know the ability of the company to pay off its current or short- term
liabilities in case they fall short with its current assets. It is considered that an ideal current ratio is
2:1. Which means, 200 takas of current assets should be kept for 100 taka of current liabilities. In

addition, low current ratio indicates low liquidity and vice versa. To Determine the current ratio of
ACME, following formula will be used:

Remarks: We can see from the graph that current ratio of the ACME had an average of 1.09 over
the last three years which is not satisfactory for the company. Over the last three years, the current
ratio of the ACME has gone downwards in recent year. So it can be said this is not an good indicator.

Quick Ratio

The quick ratio is an indicator of a company’s short-term liquidity position and measures a
company’s ability to meet its short-term obligations with its most liquid assets. Since it indicates the
company’s ability to instantly use its near-cash assets (assets that can be converted quickly to cash)
to pay down its current liabilities, it is also called the acid test ratio. An acid test is a quick test
designed to produce instant results—hence, the name.

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Cash Ratio:

This ratio considered as the traditional interpretation of current ratio. It determines the available
amount of cash a company holds to pay off the current liabilities in case of bankruptcy. The following
formula will help to determine the cash ratio:

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Remark: So, this evaluation of liquidity of Acme shows us that ACME’s position was satisfactory
but was slightly bad in 2018s. Although, ACME have downward trend in 2018, they can utilize their
cash to generate more possible revenue.

Financial Leverage or Long-Term Solvency Analysis

To buy assets and operate how much debt a company uses can be determined by financial leverage
analysis. In order to resolve the accurate blend of debt and equity necessary for investment, a
company has to analyze its financial leverage or long-term solvency.

Debt to Equity Ratio:

The measurement of a company’s required debt to finance its assets proportionate to its equity is
known as debt to equity ratio. If a company has a high debt to equity ratio, that might indicate the
aggressive financing of the company in its growth by the help of debt. A high debt/equity ratio is
often associated with high risk; it means that a company has been aggressive in financing its growth
with debt This suggests the high level of risk affiliated with it. The below mentioned formula
determines the debt to equity ratio.

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Debt Ratio

The debt ratio is a financial ratio that measures the extent of a company’s leverage. The debt ratio is
defined as the ratio of total debt to total assets, expressed as a decimal or percentage. It can be
interpreted as the proportion of a company’s assets that are financed by debt.

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Remark: Overall, both the ratios suggest that ACME maintained their assets mostly by equity. It is
considered as a good practice normally if a company maintains minimum amount of debts. There is a
high chance of bankruptcy if the company fails to pay off its debts. So, it can be said that ACME has
maintained satisfactory debt ratio over the past three years.

Profitability Analysis

The ability of a company to make profit using the available resources comparing the size of its
business is measured by profitability analysis. Five ratios will be used to analyze the profitability
ratios of ACME.

Gross Profit Margin

To evaluate ACME’s ability to gain gross profits from its revenue, gross profit margin has been used.

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Remarks: From the graph we can see that, ACME had a positive average of 33.50%. Which means for
every Tk. 100 of sales it incurred a profit of Tk. 33.50. The trend line is downward and it reached its
highest gross profit margin rate in the year 2017 which was 34.06%. But the next year’s decrease
indicates possible downward trend.

Net Profit Margin

Net profit margin measures the ability of ACME’s efficiency to make possible profit after tax from its
revenue.

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Remarks: The graph shows on average, for each of Tk. 100 revenue ACME generated had profit of
Tk. 9.30. Overall, three years data was downward trending which is not a good sign at all.

Return on Asset (ROA)

Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets. ROA
gives a manager or analyst an idea as to how efficient a company's management is at using its assets
to generate earnings. For ACME, following formula will be used.

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Remarks: The graph shows that ACME’s ROA had a average of 4.35% positive result. This means,
ACME made profit of Tk. 4.17 for every Tk. 100 of assets on average. It had an downward linear
trend line which suggests that it will decrease gradually. ROA had reached highest point of 4.70% in
the 2017.

Return on Equity (ROE)

Return on assets (ROA) is an indicator of how profitable a company is relative to its total assets. It
gives an idea as to how efficient a company's management is at using its assets to generate earnings.
To determine the ROE of ACME, following formula will be used.

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Remarks: The graph shows us that on average, ACME made profit of Tk 8.07 for every Tk. 100 of
total equity injected by shareholders. This ratio had both rise and downfall over the years. It had an
downward linear trend line which suggests that the improvement over the last three years is
downward.

Findings

One of the two specific objectives was to understand the outcome of the evaluation of financial
performance of ACME. And the second one was to determine the effectiveness and weakness of
ACME. Current Ratio, Debt to Equity Ratio and Return on Assets are the key ratios which affect a
company’s liquidity and profitability. In Addition, for determining a company’s performance the
other ratios are also necessary.

Liquidity The evaluation of liquidity of ACME shows us that ACME was in a good position except
from the slight downfall of both ratios in the year 2018. But ACME can utilize their excess cash to
generate more possible revenue.

Financial Leverage Both the ratios suggest that The ACME Laboratories Limited maintained liabilities
to assets and equity at satisfactory level. It is considered as a good practice normally if a company
maintains minimum debts. There is high chance of bankruptcy if a company fails to pay off its debts.
So, it can be said that The ACME Laboratories Limited is financially in a suitable position.

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1.5 Profitability All the graphs of profitability ratios reflect that each of the average of the ratios are
slightly in downward trend. However, from the previous year’s profitability ratio there is possible
upward trend line. This means, The ACME Laboratories Limited will be able to achieve good
profitability in financing in the following years.

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 Chapter Five

Problems, Recommendations and Conclusion

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 Problems:

From the above analysis and practical experience during internship period some identified problems
are given below:

• The company doesn’t provide proper information about new products.

• Some products of Acme laboratories are not better than other companies’ products.

• The company doesn’t use properly activity-based system that ensure the proper allocation cost of
products.

• There is no training or development programs for new employees.

• From the current ratio Analysis, it can be seen that the Acme Laboratories Ltd has an average
current ratio of 0.93 which means enough current assets are not kept to pay their short-term
obligations.

• From the Quick ratio Analysis, it can be seen that it does not keep sufficient Current assets.

• From the Total Assets turnover ratio, we have seen the Acme Laboratories Ltd.’s total asset
turnover ratio is fluctuating and gradually reduce year by year.

• The Acme Laboratories Ltd average operating profit margin is 14.98%. It is not good performance.

Recommendations

• First of all, The ACME Laboratories Limited should utilize its excess amount of current
assets efficiently to generate more possible revenue.

• The ACME Laboratories Limited should take loans from suitable places to use this generate
more profit. This can be observed from calculations that in 2014 the revenue was more as
there was relatively more liabilities in that period.

• The ACME Laboratories Limited needs to reassess its management policy in order to turn
the situation in company’s wellbeing as the current policy seems inefficient to generate
positive turnovers.

• The growth rate of assets has a downward linear trend, which should also be reassessed.

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• Lastly, The ACME Laboratories Limited have a good profitably trend, they can improve
this position even further if the negative trend in 2019 can be turned into positive.

Conclusions:

Bangladesh is set in such a one-of-a-kind position, to the point that it can acquire upheaval its
pharmaceutical area if the nation could underwrite the open doors ideally. As per the IMS report,
the aggregate size of the drug store market of Bangladesh was assessed to be Tk. 55310 million of
every 2012 with a yearly development rate of around 10 percent, Bangladesh pharmaceutical
industry is presently making a beeline for independence in taking care of the nearby demand. One of
the best makers of the business is The ACME Laboratories Limited. After the execution investigation,
it is imperative to take note of that The ACME Laboratories Limited is an association with equivalent
accentuation on authority, innovation, quality and energy. The organization is the main braded
nonexclusive pharmaceutical maker in Bangladesh delivering quality basic and other moral
medications and drugs. It has been constantly in great position among all national and worldwide
organizations since 1985 in Bangladesh. Indeed, The ACME Laboratories Limited, the lead
organization, is holding the solid authority position in the pharmaceutical business since its
investigation and is presently on its approach to wind up an elite worldwide player as the investors
of The ACME Laboratories Limited have additionally obtained higher return against their venture.
The general workplace ACME plant is extremely well and excited. The temporary job preparing plan
was very much arranged and handy arranged that make me ready to comprehend the genuine
circumstance.

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https://www.lankabd.com/

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