Financial Ratios Beximco Pharma

8/6/2019 Financial Ratios Beximco Pharma

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FINANCIAL MANAGEMENT II

RATIO ANALYSIS

BEXIMCO PharmaceuticalsLtd. (2003-2008)

Submitted to:Ms. Melita Mehjabeen

Course Instructor, Financial Management II

Submitted by:

Group 11Sharjil Haque, ZR 45Nasim Ul Haque, ZR 54

Siffat Sarwar, RQ 56Rashed Al Ahmed Tarique, ZR 61

Aumee Ahmed RQ 65

BBA 16th Batch

Institute of Business AdministrationUniversity of Dhaka

May 06, 2010

Ratio Analysis


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Liquidity Ratios:

Current Ratio:

Generally a current ratio of 2:1 is acceptable by the firm. While a low ratio

indicates that the firm may not be able to pay its obligations on time, a high

ratio signifies that it has an excessive amount of current assets meaning the

firm is not utilizing its resources properly.

In 2007 and 2003, BEXIMCO pharmaceuticals saw low current liabilities,

which may have generated from the low liabilities count of the firm.

Quick (Acid-test) Ratio:

A quick ratio of 1:1 is deemed adequate for most funds, as it shows the firms

ability to pay its obligations without relying on sales.

Not different from the current ratio, the quick ratio saw outliers in 2007, due

to the high asset count of that year..

Activity Ratios:

Accounts Receivable Turnover:

The accounts receivable turnover ratio dramatically improved after 2005, whenthe companies accounts receivable went down significantly.

Average Collection Period:

The average collection period was lowest in 2006 when the accounts receivable

turnover was the highest.

Total Sales Turnover:

The total asset turnover is relatively distributed with no distinct outliers.

Inventory Turnover:

The inventory turnover was relatively low in 2003 and 2004 due to the low

COGAS.

Fixed Asset Turnover:


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The fixed asset turnover had no real outliers, thought the ratio in 2008 was the

lowest due to the highest fixed asset count.

Profitability Ratios:

Profit Margin:

The profit margin through out the stated time period contained two basic

outliers, in years 2007 and 2008. 2008 had the highest ratio of 24.907% and

2007 had the lowest ratio 18.203%. 2007 showed a relatively lower sales margin

in comparison to the operating income

Gross Profit Margin:

The gross profit margin showed an outlier in 2003, of 37.919%. This is due to

relatively low sales revenue with comparison to cost of goods sold.

Return on Investment:

The ROI of the company showed no real outliers, though the 2003 ratio

indicated a relatively low operating income to an also low assets count. 2007

showed a relatively low ROI as well, due to the relatively low operating income

to the higher asset count.

Return on Equity:

The 2005 ROE ratio indicated a very high total equity with comparison to the net

income, giving it an outlying ratio of 7.17%. 2007 showed a lower outlier, with a

relatively greater difference in the net income and total equity.

Times Interest Earned:

The times interest earned showed an outlier in 2008, with a ratio of -4.001, due to the high

operating income of taka 998,794,848.

Leverage Ratio

Price Earnings Ratio:


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The price earning ratio showed outliers in 2005 and 2007. The price earning

ratio was highest in 2007 due to the low EPS, where as it was very low in 2005

due to the highest EPS.

Debt-Equity Ratio:The debt equity ratio maintained a high ratio in 2003 and 2004, where it fell

slightly in 2005. From 2006 to 2008, however it maintained a lower average

ratio. This is because of the increasing equity of the firm.

Debt-Asset Ratio:

The debt asset ratio of the firm showed only one outlier in 2008, where the ratio

fell to 0.295, due to having the highest asset count.

Dividend Payout Ratio:The dividend payout ratio had two very distinct outlier in 2005 and 2004, where

the high dividend per share caused the ratios to become 1.934 and 3.635.

Dividend Yield:

The dividend yield saw similar outliers in 2005 and 2004 where the high

dividends caused the ratios to increase to 0.213 and 0.186 respectively.

Retention Ratio:

Retention ratio is the ratio of the firm thats retrieved in the company.

The retention ratio showed two moderate outliers in 2005 and 2004. During 2005 the

difference in net income and retained earning was highest, where as it was lowest in 2004.

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Financial Ratios Beximco Pharma