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Assignment on

Strategy Analysis & Performance evaluations & Bond Valuation of Beximco Pharmaceuticals Ltd
Course Title : Financial Analysis & Control Course Code : FIN-434 Semester : Fall-2010
Submitted to: Tazrina Farah Lecturer Faculty of Business & Economics Daffodil International University Submitted by: Ashiq Hossain Id: 083-11-558

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Letter of Transmittal
December 23, 2010 Tazrina Farah Lecturer Department of commerce Faculty of Business & Economics Daffodil International University. Dear Madam, We submit here our report as you assigned us to prepare. You asked us to prepare a report on Strategy Analysis & Performance evaluations & Bond Valuation of Beximco Pharmaceuticals Ltd..This report paper has helped us to increase our understandability on business and increase our analytical power. During preparing this report paper we have enforced our best effort. Surely it enriches our knowledge and promotes our study. We have also learned much about the dynamic business world previously unknown. Thank you for giving us such an opportunity for working on the tropic. We will be honored to provide you any additional information, if necessary. Sincerely yours,

Ashiq Hossain

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Executive Summary

Now-a-days Pharmaceutical business is increasing in Bangladesh. A lot of organization of Bangladesh are doing this business and play a vital role in our economy. Beximco Pharmaceuticals Ltd. is one of the best Banking Company in Bangladesh doing their business successfully.

Acknowledgement

All praises to the Almighty Allah for enabling to complete our Term Paper with good and sound health. At this point, we would like to acknowledge some of people who have made a major contribution to it preparation. It will be great achievement for us that our honorable teacher Tazrina Farah Lecturer, Department of Commerce, faculty of Business & economics. Daffodil international University has given necessary suggestions for preparing our Term Paper.

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Executive Summary
Beximco Pharma is a pharmaceutical company and are a member of the BEXIMCO Group, the largest private sector industrial conglomerate in Bangladesh. The company started its operation in 1980, manufacturing products under the licenses of Bayer AG of Germany and Upjohn of USA and now has grown to become nation's one of the leading pharmaceutical companies, supplying more than 10% of country's total medicine need. Today Beximco Pharma manufactures and markets its own `branded generics' for almost all diseases from AIDS to cancer, from infection to asthma, from hypertension to diabetes for both nationall and internationall markets. Beximco Pharmas current Ratio,Cash Ratio,Quick Ratio is gradually rising that means the company maintain exact liquidity that is relatively strong than the previous year.In the operating efficiency ratio the asset turnover ratio increased due to increase in sales. Fixed Asset turnover ratio gradually decreased thourgh the net sales.In Operating Profitability Ratio gross profit margin was slightly decreased because of increase of sales.Net Profit margin ratio Were consistently decreased because of increase of Tax and interest rate. The company is the largest producer of Metered Dose Inhalers (MDIs) in the country, and the first to produce CFC free inhalers. BPL is also the first company to produce anti-retroviral drugs (ARVs) locally. As a public limited company, its shares are actively traded in Dhaka Stock Exchange and Chittagong Stock Exchange, and Beximco Pharma has the unique distinction of being the only company in the country listed on AIM of London Stock Exchange.

Mission
Each of our activities must benefit and add value to the common wealth of our society. We firmly believe that, in the final analysis we are accountable to each of the constituents with whom we interact, namely: our employees, our customers, our business associates, our fellow citizens and our shareholders.

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Introduction
Beximco Pharmaceuticals Ltd. (Beximco Pharma) belongs to Beximco Group, the largest private sector industrial conglomerate in Bangladesh which has diversified into textiles, apparels, pharmaceuticals, ceramics, aviation, real estate, ITC & media, and energy sectors. Most of these companies are actively being traded in the stock exchanges of Bangladesh with a total market capitalization of more than $1.65 billion. Incorporated in the late 70s, Beximco Pharma began as a distributor, importing products from global MNCs like bayer, Germany and Upjohn, USA and selling them in the local market, which were later manufactured and distributed under licensing arrangement. Since, then, the journey continued, with a vision to go a long way and today, Beximco Pharma is one of the largest exporters of medicines in Bangladesh, winning National Export ( Gold) Trophy for a record three times. Beximco Parmas manufacturing facilities have been accredited by major global regulatory bodies, and it has expanded its geographic footprint to 40 countries. The company has the unique distinction of being the only company in Bangladesh to get listed on AIM of London stock exchange. Beximco Pharma produces pharmaceutical formulations and active pharmaceutical ingredients, having a current portfolio of more than 400 products and dedicated team of more than 2,500 employees. In its long journey over three decades, the simple principle on which it was fronded remains the same: producing high-quality generics and providing better access to medicines at a much affordable cost. In 2009 was another successful year for Beximco Pharma. In our 30 years in the business, we have continues our efforts to meet the strategic goals we set for ourselves, while at the same time delivered consistent financial performance. The company has achieved this by staying focused on crating value for all its customers and shareholders. After the 2007-2008 political turmoils and certain unprecedented events in the country which has seriously disrupted our business activities, the company showed strong performance in 2009 recovering from its earlier setbacks. Sales revenue in the year crossed BDT 4.86 billion with a robust growth of more than 21%. Total pharma market of the country was valued at approximately $800 million and the government has recently declared pharma as a thrust sector owing to its huge export potential.

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Competitive force: 1 Rivalry among existing firms


Industry Growth Rate: Beximco pharmaceutical is the accelerated medicine company in the pharmaceutical industry in Bangladesh. The company has grown market share by taking share away from other players .They involve with export processing in 2005 and has able to grab market share than incumbent firms. The Pharma AIDS is the lower competitors in the industry and still they could not able to capture market share for the strong existing firms. As a result, price wars the firms in the industry. Stagnant firms gains higher profit than that the incumbent firms. Concentration and balance of competitors: The number of the industry and their relative size determines the degree concentration in an industry. Beximco pharma, Squire Pharma etc are the largest company and leading position at the present time. They produce in a large scale and ultimately they are able to cut the price of the products. So small competitors can not able reduce the price then they have to follow the largest firms pricing strategy and rules. As a result price wars among the existing firms. But when the Beximco fights against the Square pharma then there are no destructive price competitions among them. Degree of differentiation and switching cost : Beximco pharma produces the various types products .The company more emphasis on some important matters such as dimension of the product form, features, performance , conformance , durability , reliability as well as service dimension such as order ease delivery, installation customer consulting and others. By considering this the company has able to differentiate the products in the market. Price is also important issues for switching cost .Sometimes switching cost is high for customer loyalty .For example, sometimes the doctor prescribes to their patient according to the choice of his own and select the brand name for purchasing the products .So that ,switching cost determines the customers propensity to move from one to another. Excess capacity and Exit barriers: Beximco pharmaceutical Ltd. has able to fulfill the huge customer demands and also earn abnormal profit .So there is a good advantage for the company to cut prices to fill capacity. Government rules and regulations create the barriers to excess capacity for a firm but when a firm enters into the industry they can never leave from the industry as like. They must bind to follow to the government policy for continuing their business operation.

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Competitive Force 2: Threat of New Entrants


Beximco Pharmaceuticals Ltd is earning abnormal profit. As we know the potential for earning abnormal profit attracting new entrants to an industry. Beximco Pharmaceuticals Ltd has already established in the market.

Economics of scale: Beximco Pharmaceuticals Ltd has listed in 1986. So, Beximco
Pharmaceuticals Ltd gets large cost advantage and facility from government. On the other hand, Beacon Pharmaceuticals Limited face the choice of having either to invest in a large capacity which might not be utilized right away or to enter with less than the optimum capacity and Beacon Pharmaceuticals Limited or Pharma Aids are at least initially suffer from cost disadvantage in competing with Beximco Pharmaceuticals Ltd. First Mover Advantage: Beximco Pharmaceuticals Ltd. Square Pharmaceuticals Ltd. always get the first mover advantage because it has already set industry standards and enter into exclusive arrange meets with suppliers of cheap raw materials as well as tax advantages. Beximco pharma leads all over the country. On the other hand, the new entrants firm doesnt get these types of facilities. First mover advantages are also likely to be large when there are significant switching costs for customers once they start using existing products. Access to channels of distribution and relationships: Beximco Pharmaceuticals Ltd. has a limited capacity and Beximco Pharmaceuticals Ltd. and Square Pharmaceuticals are famous company. Distributors can easily sell their product to the customer. Similarly, new consumer goods manufacturers find it difficult to obtain value of the market and it is difficult to make relationship with the customers.

Competitive Force 3: Threat of Substitute Product


Relevant substitutes are not necessary those that have the same form as the existing products, but those that perform the same function. For example, Beximco Pharma produces different products. Napa is one of them for reducing the fever. On the other hand Square pharmaceuticals also produce ACE for reducing the fever. But the price of this product is almost same of these companies. So, customer buys sometimes NAPA and sometimes ACE. Its a threat for the Beximco Pharmaceuticals Ltd. Having the reputation and goodwill of the company is leading position among the pharmaceutical companies.

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Competitive Force 4: Bargaining Power of Buyers


Price Sensitivity: Buyers are more prices sensitive when the product is undifferentiated but in the Beximco pharma there is no undifferentiated products. When the products are undifferentiated there is low switching cost here. Beximco pharma has so many products such as Napa Extra,Oseltamivir, Decomit, Nitrosol, Bexi gold,Dexiten,Atrizin,Napa DT,Ras,Saritene,Nitaxide, Q-Respria 1, 2 etc all products Price are fixed. We know that in the field of medicine site buyer feel reluctant to bargain. Relative Bargaining Power: Having the fixed Price of Beximco Parmas product so the buyers in the market have no ability to bargain. They feel interest to buy on the showing price.

Competitive Force 5: Bargaining Power of Suppliers


Beximco Pharmaceuticals Ltd as supplier has a strong bargains power in Pharmaceuticals Ltd companies. Because we have some unique features thus make us unique. We have IV fluid manufacturing plant, MDI plant and Oral solid dosage (OSD) plant. Beximco Pharmaceuticals Ltd have supported by owns backward and forward integration. Because Beximco pharma have a own paper printing machine and plastic machine. The cover of the medicine is made by the Beximco plastic industries LTD. So it was backward integration of Beximco pharma. The company entered several new markets and currently it was global footprint in 40 countries. It has taken aggressive paints to capitalize on the global generic drug opportunities with increasing focus on regulated markets of EU, USA and Australia. Product registration and distribution center Australia Asia Middle East Central and Latin America 1 75 22 11

The company is independent on the domestic and foreign distribution centre. So it is a forward integration of Beximco Pharmaceuticals Ltd. Until now, Beximco Pharmaceuticals Ltd is the only company in Bangladesh to manufacture Antiretroviral drugs complying with the WHO recommendation treatment guidelines.

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Competitive force: 1 Rivalry among existing firms


Industry Growth Rate: Beximco pharmaceutical is the accelerated medicine company in the pharmaceutical industry in Bangladesh. The company has grown market share by taking share away from other players .They involve with export processing in 2005 and has able to grab market share than incumbent firms. The Pharma AIDS is the lower competitors in the industry and still they could not able to capture market share for the strong existing firms. As a result, price wars the firms in the industry. Stagnant firms gains higher profit than that the incumbent firms. Concentration and balance of competitors: The number of the industry and their relative size determines the degree concentration in an industry. Beximco pharma, Squire Pharma etc are the largest company and leading position at the present time. They produce in a large scale and ultimately they are able to cut the price of the products. So small competitors can not able reduce the price then they have to follow the largest firms pricing strategy and rules. As a result price wars among the existing firms. But when the Beximco fights against the Square pharma then there are no destructive price competitions among them. Degree of differentiation and switching cost : Beximco pharma produces the various types products .The company more emphasis on some important matters such as dimension of the product form, features, performance , conformance , durability , reliability as well as service dimension such as order ease delivery, installation customer consulting and others. By considering this the company has able to differentiate the products in the market. Price is also important issues for switching cost .Sometimes switching cost is high for customer loyalty .For example, sometimes the doctor prescribes to their patient according to the choice of his own and select the brand name for purchasing the products .So that ,switching cost determines the customers propensity to move from one to another. Excess capacity and Exit barriers: Beximco pharmaceutical Ltd. has able to fulfill the huge customer demands and also earn abnormal profit .So there is a good advantage for the company to cut prices to fill capacity. Government rules and regulations create the barriers to excess capacity for a firm but when a firm enters into the industry they can never leave from the industry as like. They must bind to follow to the government policy for continuing their business operation.

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Competitive Force 2: Threat of New Entrants


Beximco Pharmaceuticals Ltd is earning abnormal profit. As we know the potential for earning abnormal profit attracting new entrants to an industry. Beximco Pharmaceuticals Ltd has already established in the market.

Economics of scale: Beximco Pharmaceuticals Ltd has listed in 1986. So, Beximco
Pharmaceuticals Ltd gets large cost advantage and facility from government. On the other hand, Beacon Pharmaceuticals Limited face the choice of having either to invest in a large capacity which might not be utilized right away or to enter with less than the optimum capacity and Beacon Pharmaceuticals Limited or Pharma Aids are at least initially suffer from cost disadvantage in competing with Beximco Pharmaceuticals Ltd. First Mover Advantage: Beximco Pharmaceuticals Ltd. Square Pharmaceuticals Ltd. always get the first mover advantage because it has already set industry standards and enter into exclusive arrange meets with suppliers of cheap raw materials as well as tax advantages. Beximco pharma leads all over the country. On the other hand, the new entrants firm doesnt get these types of facilities. First mover advantages are also likely to be large when there are significant switching costs for customers once they start using existing products. Access to channels of distribution and relationships: Beximco Pharmaceuticals Ltd. has a limited capacity and Beximco Pharmaceuticals Ltd. and Square Pharmaceuticals are famous company. Distributors can easily sell their product to the customer. Similarly, new consumer goods manufacturers find it difficult to obtain value of the market and it is difficult to make relationship with the customers.

Competitive Force 3: Threat of Substitute Product


Relevant substitutes are not necessary those that have the same form as the existing products, but those that perform the same function. For example, Beximco Pharma produces different products. Napa is one of them for reducing the fever. On the other hand Square pharmaceuticals also produce ACE for reducing the fever. But the price of this product is almost same of these companies. So, customer buys sometimes NAPA and sometimes ACE. Its a threat for the Beximco Pharmaceuticals Ltd. Having the reputation and goodwill of the company is leading position among the pharmaceutical companies.

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Competitive Force 4: Bargaining Power of Buyers


Price Sensitivity: Buyers are more prices sensitive when the product is undifferentiated but in the Beximco pharma there is no undifferentiated products. When the products are undifferentiated there is low switching cost here. Beximco pharma has so many products such as Napa Extra,Oseltamivir, Decomit, Nitrosol, Bexi gold,Dexiten,Atrizin,Napa DT,Ras,Saritene,Nitaxide, Q-Respria 1, 2 etc all products Price are fixed. We know that in the field of medicine site buyer feel reluctant to bargain. Relative Bargaining Power: Having the fixed Price of Beximco Parmas product so the buyers in the market have no ability to bargain. They feel interest to buy on the showing price.

Competitive Force 5: Bargaining Power of Suppliers


Beximco Pharmaceuticals Ltd as supplier has a strong bargains power in Pharmaceuticals Ltd companies. Because we have some unique features thus make us unique. We have IV fluid manufacturing plant, MDI plant and Oral solid dosage (OSD) plant. Beximco Pharmaceuticals Ltd have supported by owns backward and forward integration. Because Beximco pharma have a own paper printing machine and plastic machine. The cover of the medicine is made by the Beximco plastic industries LTD. So it was backward integration of Beximco pharma. The company entered several new markets and currently it was global footprint in 40 countries. It has taken aggressive paints to capitalize on the global generic drug opportunities with increasing focus on regulated markets of EU, USA and Australia. Product registration and distribution center Australia Asia Middle East Central and Latin America 1 75 22 11

The company is independent on the domestic and foreign distribution centre. So it is a forward integration of Beximco Pharmaceuticals Ltd. Until now, Beximco Pharmaceuticals Ltd is the only company in Bangladesh to manufacture Antiretroviral drugs complying with the WHO recommendation treatment guidelines.

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1. Formula of Current Ratio


Current Asset Current Ratio= Current Liabilities
Year Current Asset Current Liability Current Ratio 2005 3495849163 2501824568 1.40 2006 3357393266 2527420798 1.33 2007 2923775458 1627972936 1.80 2008 2861891654 2602032267 1.10 2009 6916737893 2321451642 2.98

Interpretation: From 2005-06 the current ratios were decreased but in 2007 it was
increased .Because the current assets were decreased from 2005-06 and liabilities were increased so that the current ratios were decreased. But in 2007 and 2009 the ratios were increased due to the increasing in current asset. So increasing in current assets help to meet up the current liabilities .But in 2008 the ratio was also decreased.

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2. Formula of Cash Ratio:

Cash +A/R Cash Ratio= Current Liabilities

Year Current Asset Current Liability Current Ratio

2005 1208362173 2501824568 0.48

2006 1011339040 2527420798 0.40

2007 585379702 1627972936 0.36

2008 577564129 2602032267 0.22

2009 1752545304 2321451642 0.75

Interpretation: From 2005-08 the Cash Ratios were decreased because the current
liabilities were increased .but in 2009 the ratio was increased due to the increasing the cash liquidity and also A/R.

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3. Formula of Quick Ratio

Current Asset- Inventory Quick Ratio= Current Liabilities

Year Current AssetInventory Current Liability Quick Ratio

2005 1812127104 2501824568 0.72

2006 1602952978 2527420798 0.63

2007 1271295167 1627972936 0.78

2008 1356603561 2602032267 0.52

2009 5193784609 2321451642 2.24

Interpretation: From 2005-06 the Quick Ratios were decreased due to the
increasing the inventory but in 2007 the ratio was increased because of increasing the current assets. In 2008 the ratio was decreased compare to the 2007 because the current asset was decreased .In 2009 the ratio was increased because of increasing the current assets again and decreasing the inventory.

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4. Formula of Average Collection period:

Average Collection period=

365 Net sales/ Average Receivable

Year Net Sales A/R Average Collection period

2005 3327022574 779798943 85.55

2006 3702317159 430240095 42.42

2007 3597024812 499680792 50.70

2008 4010167059 503916401 45.87

2009 4868254915 694111730 52.04

Av erage C ollection period 90.00 80.00 70.00 60.00 50.00 40.00 30.00 20.00 10.00 0.00 85.55

Amount in Days

42.42

50.70

45.87

52.04 Av erage Collection period

2005

2006

2007 Year

2008

2009

Interpretation: From 2005-06 the

Average Collection period was decreased so that the company would able to collect more in 2006 and also invest more compare to the 2005.

From 2006-07 the ACP was also increased that means the company would collect money but which was less than compare to the year of 2006. But in 2008 the ACP was again decreased compare to the year of 2007 which is also positive sign for the company. In 2009 the ACP was increased again due to the same reason of 2007.

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5. Formula of Inventory Processing period

Inventory Processing period=

365 Average inventory turnover

Year Cost of Goods sold Inventory Inventory turnover Inventory Processing period

2005 1768522363 1683722059 1.05 347.50

2006 1971231333 1754440288 1.12 324.86

2007 1967509975 1652480291 1.19 306.56

2008 2002871181 1505288093 1.33 274.32

2009 2566206626 1722953284 1.49 245.06

Inventory Processing period 400.00 350.00 Ammount in Days 300.00 250.00 200.00 150.00 100.00 50.00 0.00 2005 2006 2007 Year 2008 2009 347.50

324.86

306.56

274.32

245.06 Inventory Processing period

Interpretation: From 2005-09 the Inventory processing periods were consistently


decreased that means their sales were increased and customer service and delivery was satisfy able.

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6. Formula of Accounts Payable period

365 Accounts Payable Period= Average Payable turnover

Year Cost of Goods sold Accounts Payable Accounts Payable Turnover Accounts Payment Period

2005 1768522363 216660743 8.16 44.72

2006 1971231333 365255938 5.40 67.63

2007 1967509975 271814118 7.24 50.43

2008 2002871181 263176822 7.61 47.96

2009 2566206626 409898122 6.26 58.30

A/P Payment Period 80.00 70.00 Amount in Days 60.00 50.00 40.00 30.00 20.00 10.00 0.00 2005 2006 2007 Year 2008 2009 44.72

67.63 58.30 50.43 47.96 A/P Payment Period

Interpretation: From 2005-06 the Accounts Payable Period was increased that
means company could retain money more compare to the year of 2005 but from 200608 it was decreased due to the prompt payment of the creditor. Again in 2009 it was sharply increased due to the slower payment.

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7. Formula of Cash Conversion Cycle

Cash Conversion Cycle= Average Receivable Collection Period + Inventory Processing Period Payable Payment Period

Year Average Collection period Inventory Processing period Accounts Payment Period Cash Conversion Cycle

2005 85.55 347.50 44.72 388.33

2006 42.42 324.86 67.63 299.64

2007 50.70 306.56 50.43 306.84

2008 45.87 274.32 47.96 272.23

2009 52.04 245.06 58.30 238.80

CCC 450.00 400.00 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00

388.33 299.64 306.84 272.23

Amount in Days

238.80 CCC

2005

2006

2007 Year

2008

2009

Interpretation: From 2005-06 the Cash Conversion Cycle period was moderately
decreased so that the company was able to retain more money but in 2007 it was increased compare to the year of 2006 due to the early payment .In 2007-09 CCC periods were consistently decreased which is very positive sign for the company.

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8. Formula of Total Asset Turnover

Net Sales
Total asset turnover =

Total Asset

Year Net Sales Total asset Total Asset Turnover

2005 3327022574 10945479980 0.30

2006 3702317159 11912512487 0.31

2007 3597024812 11953418940 0.30

2008 4010167059 14819665441 0.27

2009 4868254915 19891933422 0.24

Total Asset Turnover 0.35 Amount in Times 0.30 0.25 0.20 0.15 0.10 0.05 0.00 2005 2006 2007 Year 2008 2009 0.30 0.31 0.30 0.27 0.24 Total Asset Turnover

Interpretation: In 2005 and 2006 the Total asset turnover ratios were increased
due to the increase in sales and total assets but from 2007-09 it were consistently decreased because of decreasing the net sales.

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9. Formula of Fixed Asset Turnover


Net Sales Fixed asset turnover = Fixed Asset

Year Net Sales Fixed asset Fixed Asset Turnover

2005 3327022574 7449630817 0.45

2006 3702317159 8555119221 0.43

2007 3597024812 9029643482 0.40

2008 4010167059 11957773787 0.34

2009 4868254915 12975195529 0.38

Fixed Asset Turnover 0.50 0.45 0.40 0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 0.45 0.43

0.40 0.34

Amount in times

0.38

Fixed Asset Turnover

2005

2006

2007 Year

2008

2009

Interpretation: From 2005-08 Fixed assets turnover ratios were consistently


decreased though the net sales and fixed assets were increased during this period. Low turn over ratio means fixed asset implies the capital tied up in excess of fixed assets. In 2009 the ratio was increased that means high turnover ratio implies lack of productive capacity to meet sales demand or use of old depreciated equipment that obsolete.

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10.Gross Profit Margin

Gross Profit Gross Profit Margin = Sales

Year Gross profit Net Sales Gross Profit Margin

2005 1558500211 3327022574 46.84%

2006 1731085826 3702317159 46.76%

2007 1629514837 3597024812 45.30%

2008 2007295878 4010167059 50.06%

2009 2302048289 4868254915 47.29%

Year

Interpretation: From 2005-06 the Gross profit margin ratio was slightly decreased
and in 2007 it was moderately decreased due to the decreasing the gross profit and also sales and another reason the cost of production was high. But in 2008 it was rapidly increased due to the lower cost of production which increases the gross profit and also makes sales more. In 2009 the ratio was moderately decreased.

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11.Formula of Operating Profit Margin

Operating Profit Operating Profit Margin = Sales

Year Operating profit Net Sales Operating Profit margin

2005 724351718 3327022574 21.77%

2006 746523494 3702317159 20.16%

2007 654778147 3597024812 18.20%

2008 998794848 4010167059 24.91%

2009 1001282411 4868254915 20.57%

Interpretation:

From 2005-07 Net Profit Margin ratios were consistently decreased which is not well for the company. But in 2008 it was moderately increased compare to the year of 2007 .From 2008-09 the ratio was slightly decreased though the net profit was increased.

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12.Formula of Net Profit Margin

Net Profit Margin Net Profit Margin =

Sales

Year Net profit Net Sales Net Profit Margin

2005 489261764 3327022574 14.71%

2006 470658563 3702317159 12.71%

2007 353067878 3597024812 9.82%

2008 545341273 4010167059 13.60%

2009 624740307 4868254915 12.83%

Interpretation:

From 2005-07 Net Profit Margin ratios were consistently decreased which is not well for the company. But in 2008 it was moderately increased compare to the year of 2007 .From 2008-09 the ratio was slightly decreased though the net profit was increased.

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Conclusion

Beximco Pharmaceuticals Ltd (BPL) is a leading manufacturer of pharmaceutical formulations and Active Pharmaceutical Ingredients (APIs) in Bangladesh. The company is the largest exporter of pharmaceuticals in the country and its state-of-theart manufacturing facilities are certified by global regulatory bodies of Australia, Gulf nations, Brazil, among others. The company is consistently building upon its portfolio and currently producing more than 400 products in different dosage forms covering broader therapeutic categories which include antibiotics, antihypertensive, ant diabetics, antireretrovirals, anti asthma inhalers etc, among many others. With decades of contract manufacturing experience with global MNCs, skilled manpower and proven formulation capabilities, the company has been building a visible and growing presence across the continents offering high. Ensuring access to quality medicines is the powerful aspiration that motivates more than 3000 employees of the organization, and each of them is guided by the same moral and social responsibilities the company values most.

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Appendix
13.

Formula of Current Ratio


Current Asset Current Ratio=----------------------------Current Liabilities

Formula of Cash Ratio:


Cash +A/R Cash Ratio=-----------------------Current Liabilities

Formula of Quick Ratio


Current Asset- Inventory Quick Ratio=------------------------------------Current Liabilities

Formula of Average Collection period:


365 Average Collection period= --------------------------------------Net sales/ Average Receivable

Formula of Inventory Processing period


365 Inventory Processing period= ----------------------------------Average inventory turnover

Formula of Accounts Payable period


365 Accounts Payable Period= --------------------------------Average Payable turnover

Formula of Cash Conversion Cycle

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Cash Conversion Cycle= Average Receivable Collection Period + Inventory Processing Period Payable Payment Period

Formula of Total Asset Turnover


Net Sales Total asset turnover =--------------------------------Total Asset

Formula of Fixed Asset Turnover


Net Sales
Fixed asset turnover =---------------------

Fixed Asset

Gross Profit Margin


Gross Profit Gross Profit Margin = --------------------Sales

Formula of Operating Profit Margin


Operating Profit Operating Profit Margin = ---------------------

Sales

Formula of Net Profit Margin


Net Profit Margin Net Profit Margin =-------------------------------

Sales
Year Current asset Current liability Inventory Cash A/R Cost of Goods sold Net Sales Total asset Fixed asset Gross profit 2005 3495849163 2501824568 1683722059 428563230 779798943 1768522363 3327022574 10945479980 7449630817 1558500211 2006 3357393266 2527420798 1754440288 581098945 430240095 1971231333 3702317159 11912512487 8555119221 1731085826 2007 2923775458 1627972936 1652480291 85698910 499680792 1967509975 3597024812 11953418940 9029643482 1629514837 2008 2861891654 2602032267 1505288093 73647728 503916401 2002871181 4010167059 14819665441 11957773787 2007295878 2009 6916737893 2321451642 1722953284 1058433574 694111730 2566206626 4868254915 19891933422 12975195529 2302048289

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Operating profit Net profit Accounts Payable

724351718 489261764 216660743

746523494 470658563 365255938

654778147 353067878 271814118

998794848 545341273 263176822

1001282411 624740307 409898122

Year Current Ratio Cash Ratio Quick Ratio Account Receivable Turn over Average Collection period Inventory turnover Inventory Processing period Accounts Payable Turnover Accounts Payment Period Cash Conversion Cycle Total Asset Turnover Fixed Asset Turnover Gross Profit Margin Operating Profit margin Net Profit Margin

2005 1.40 0.48 0.72 4.27 85.55 1.05 347.50 8.16 44.72 388.33 0.30 0.45 46.84% 21.77% 14.71%

2006 1.33 0.40 0.63 8.61 42.42 1.12 324.86 5.40 67.63 299.64 0.31 0.43 46.76% 20.16% 12.71%

2007 1.80 0.36 0.78 7.20 50.70 1.19 306.56 7.24 50.43 306.84 0.30 0.40 45.30% 18.20% 9.82%

2008 1.10 0.22 0.52 7.96 45.87 1.33 274.32 7.61 47.96 272.23 0.27 0.34 50.06% 24.91% 13.60%

2009 2.98 0.75 2.24 7.01 52.04 1.49 245.06 6.26 58.30 238.80 0.24 0.38 47.29% 20.57% 12.83%

CAPM= Rf + (Rm-Rf)
Coefficient = ------------------------Variance WACC= (Wd*kd) + ( We*Ke)

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Bibliography
Books
Krishna G. Palepu, Paul M. Hearly, Victor L. Bernard Business Analysis & Valuation

Websites:
http://www.beximco-pharma.com http://www.dsebd.org http://www.investopedia.com/terms/w/wacc.asp http://stockbangladesh.com

Annual Report:
Annual Report of Beximco Pharmaceuticals Ltd. -05 Annual Report of Beximco Pharmaceuticals Ltd. -06 Annual Report of Beximco Pharmaceuticals Ltd. -07 Annual Report of Beximco Pharmaceuticals Ltd. -08 Annual Report of Beximco Pharmaceuticals Ltd. -09

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