An Analysis of Financial Performance of GlaxoSmithKline Bangladesh Limited

4.1Findings of the Report

GlaxoSmithKline Bangladesh Limited is a multinational FMCG Company. It has a

very narrow product line in Bangladesh compared to the local consumer healthcare
supplier companies. Although it deals with a very short product line, it has a leading
position in market with these products.

The objective of the time I spent in the company and prepared this report is basically
for evaluating the financial performance and finding out the major facts about
GlaxoSmithKline Bangladesh Limited regarding its various sectors and performances.
The major findings are given below:

1. GlaxoSmithKline Bangladesh Limited has a very high dividend payout ratio

that mainly attracts the shareholders of the company.
2. GlaxoSmithKline Bangladesh Limited has a clear VAT and Tax dealings with
the government of Bangladesh.
3. GlaxoSmithKline Bangladesh Limited has a very strong distribution channel
all over Bangladesh for distributing their pharmaceuticals and consumer
healthcare products.
4. GSK has a policy, that the MPOs cannot pursue the doctors to recommend its
drugs and as a result it is lagging behind in this sector.
5. The EPS of GlaxoSmithKline Bangladesh Limited is higher than other FMCG
companies in Bangladesh.
6. The market performance of consumer healthcare product of GlaxoSmithKline
Bangladesh Limited is quite impressive. But for pharmaceutical products the
performance is quite poor.
7. The annual total sale of GlaxoSmithKline Bangladesh Limited is decreasing
due to the decreasing market performance of pharmaceutical products, though
the consumer healthcare product has an increasing trend.
8. The market price per share of GlaxoSmithKline Bangladesh Limited is higher
than most of the FMCG companies in Bangladesh.
9. The gross profit ratio and net profit ratio of GSK Bangladesh Limited has an
uprising trend.
10. GlaxoSmithKline Bangladesh Limited uses no debt in its capital.

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 An Analysis of Financial Performance of GlaxoSmithKline Bangladesh Limited

11. The finance department of GlaxoSmithKline Bangladesh Limited deals with

two major foreign bank in Bangladesh. They are The Hongkong & Shanghai
Banking Corporation and Standard Chartered Bank Limited.
12. GlaxoSmithKline Bangladesh Limited emphasizes on fair representation of
financial statements for their shareholders and interested parties. It has been
awarded the “Best Financial Statement Preparation” title several times by
ICAB, ICMAB and other organization.
13. The company provides various incentives and facilities to its employees to
motivate them to provide better performance.
14. GSK is not undercapitalized which means GSK does not only depend on
borrowed capital and the creditors. So its owned capital is able to meet up the
operational costs. So, obviously GSK is financially solvent.
15. The company has a relatively lower current ratio that is 1.67:1 in 2016. For a
company, it is necessary to maintain a current ratio of 2:1.

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 An Analysis of Financial Performance of GlaxoSmithKline Bangladesh Limited

4.2Recommendations

From my view of angle, there are some areas in which GlaxoSmithKline Bangladesh
Limited can improve their operations and performances. My recommendations are as
follows:

1. GlaxoSmithKline Bangladesh Limited may improve their product line to get a

bigger market in Bangladesh as they have a narrow product line.
2. GlaxoSmithKline Bangladesh Limited may increase their number of
employees so that they can have a better output.
3. The company should concentrate to create a strong bond with its customers.
4. Technological enhancement has created a new dimension in consumer taste
and preferences which should be considered by the company.
5. The company should emphasize on finding out its strengths and weaknesses to
take necessary measures.
6. New innovations should be made to create new demands and create new
customer and consumer groups.
7. The profitability ratios of GlaxoSmithKline Bangladesh Limited have
decreased in 2016. The company should concentrate on this matter and take
necessary measures to increase the ratio.
8. The sales trend of GlaxoSmithKline Bangladesh Limited is decreasing form
2015. The company should increase the promotional activities to capture the
consumer mind more and increase the sales trend again from future period.
9. The company has a very lower current ratio that could pose a threat for it. So
the company should increase its focus on this matter and should be careful to
control the debts.
10. The company has a very high debt to total asset ratio that is almost the half of
total assets. The company should concentrate on paying off its debt and
lowering the ratio and to be a little conservative in case of taking debts.
11. GSK Bangladesh should identify its threats and take corrective measures to
confront its threats.

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 An Analysis of Financial Performance of GlaxoSmithKline Bangladesh Limited

4.3Conclusion

In this report, I have discussed so many points on GlaxoSmithKline Bangladesh

Limited and their financial performance all around Bangladesh. In Bangladesh,
GlaxoSmithKline has made a remarkable step in the business world. Bangladesh is
always a better place for any business. Though GlaxoSmithKline has taken certain
programs around the world as part of their social responsibility but still they need to
invest in Bangladesh keeping in mind the social context. GSK is committed to
environmentally sound and sustainable business GSK Bangladesh has five
outstanding departments that have enhanced the performance of the organization.
GSK has a phenomenal team worldwide who are continuously stretching their arms in
achieving the goal of the organization and helping in improving the lifestyle of the
people around the world. Thus, Bangladesh has been proved to be a better market for
them where competitors are less threatened by them.

With its more than 160 million populations and on an average more than 7% GDP
growth for the last five years, Bangladesh has lucratively positioned itself for First
Moving Consumer Goods (FMCG) sector. Basically, FMCG is those consumer
products that have a short shelf life as well as these products are sold at a relatively
low price. For example, toiletries, over the counter drugs, processed food, household
disinfectant etc. are considered as FMCG.

In the FMCG sector of Bangladesh, the presence of multinational companies is very

eminent. Unilever is the market leader of the sector. There are also multinational
companies like, Marico, Reckitt Benckiser, Nestle Bangladesh etc. Among the local
firms, ACI Ltd., Square Pharmaceuticals Ltd., Square Pharmaceuticals also have
strong presence in pharmaceuticals and consumer healthcare market. Competition in
the FMCG sector is quite high. Particularly, new entrants joined in market as well as
availability of Chinese Products increase the intensity of rivalry.

GSK Bangladesh Ltd. is an established multinational company in the Country's

FMCG sector. The Company has strong presence in consumer healthcare and
pharmaceuticals market segment. Since, these products will enjoy sustainable demand
in the foreseeable future; the company might register profit in the upcoming years.

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 An Analysis of Financial Performance of GlaxoSmithKline Bangladesh Limited

Operating profit of the company registered relative higher growth in the last two years
due to effectively lower technical service fees.

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