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Beximco Pharmaceuticals Ltd. Since its inception in 1979 has continued with its relentless strive to maintain leadership position
in the Bangladesh Pharmaceutical Industry even in the new millennium. The healthcare welfare of the society remains to be their
uncompromising objective. They provide the highest quality medicines at an affordable price to cater to the needs of the millions
of people of the country. Regular introduction of innovative products in line with the needs of their customers have been the key
to the companys success over the years.
Ever since the start of our journey in late seventies they have successfully maintained the quality of their products throughout,
thereby earning the trust and faith of the society. Ingenious approaches on manufacturing, R&d and marketing remain the
strategic objective during 2010 and beyond.
Origin of The Study:
This report will be prepared as a part of the internship program which is an integral part of the BBA program under the Dept. of
Accounting & Information Systems in the Faculty of Business Studies, University of Dhaka. The organization attachment was
started on 18th July, 2010. This report on Financial Performance Analysis of Beximco pharmaceuticals Ltd(BPL) was
assigned by academic supervisor Mohammad Moniruzzaman,ACA, Lecturer of Dept of Accounting & Information Systems,
Faculty of Business Studies, University of Dhaka.
Purpose of The Study:
The purpose of the study is to make an analysis of Financial Performance of BPL in terms of Pharmaceuticals Industry. This
study will attempt to understand the financial conditions of BPL on different segments such as liquidity, profitability & solvency.
The purpose is also to make recommendations for improving the financial stability and soundness of different services provided
to the shareholders of BPL. It is also the purpose of the researcher to help the management by providing an idea to take
appropriate decisions about the quality of the investing & financing in future
Scope of the study:
The scope of this study was strictly confined to the annual report & personal contact with the employees ofBPL. To collect the
information I worked in the finance section & cost & budget section of BPL. All other data related to the financial analysis was
collected from web sites of BPL & other related company
Methodology of the study:
For smooth and accurate study everyone have to follow some rules & regulation. The study impute were collected from two
sources:
Primary sources
o
Direct observations
Websites
Research Objectives:
Broad objective
To assess and find out the financial conditions of the firm to analysis how much the company is capable of doing
business properly in future.
Specific objective
o
To give a clear picture about the financial performance of BPL in last four years.
Contact methods:
To collect data for the report I use two types of contact method. I use personal or face to face contact method.
Limitations of the study:
There were some restrictions to have access to the information confidential by concern authority.
Time and cost constraints also other limitations regarding this analysis.
Company
Textile Division
Chemical Division
Trading Division
Jute Division
Others
Shinepukur Ceramics
Gammatech Ltd.
This division holds the initial business trend of Beximco, indeed. It looks for the opportunity of import-export commodities that
have the in the market. This division is really dynamic and high profit contributing to the group with a brand portfolio that includes
Wartsilla SA ( generation equipment), Arjo Wiggins ( security & treasury papers) of France, and Dupont Inc.( Chemicals), Sterling
Diagnostic Imaging Inc.( film products) and Valvoline Inc.( petroleum products and industrial lubricants) of the USA. The Trading
Division also represents overseas marine food buyers acting as a source of agent on their behalf and providing quality control.
Beximco IT Division
The companies included in this Division are Beximco Computers, Beximco Systems, and BOL online. Beximco Computers Ltd. is
still the nations largest volume re-seller of IBM PCs. With the launch of a new version of BexiBank, an integrated multi-user,
multitasking banking application system Beximco Computer Ltd.s software is in use at over 300 branches of 15 major banks
nationwide.
Beximcos first foray into education, Beximco Systems Ltd. is joint venture collaboration with the largest information technology
institute of India, NIIT. Molded after NIITs highly successful training centers across India, the NIIT Centers in Bangladesh have
the highest growth rate of any NIIT facility for enrollment levels in its short courses and degree programs.
Bangladesh Online Ltd.(BOL), Beximcos Internet Company launched its operation in August of 1998. The company has the
fastest access among ISPs in Bangladesh. This division to serve groups interests in the most booming sectors of the world that
is Information Technology. Since it started operation it proceeded very fast and became the market leader soon. It is pioneer
company in Bangladesh to offer complete solution of automation. It also introduces the brand IT products to this country.
BEXIMCO PHARMACEUTICALS LTD.
Beximco pharmaceuticals Ltd: An overview
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 begain as a distributor, importing products
from global MNCs like Bayer, Germany and Ujohn ,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 Pharmas 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 a dedicated team of more than 2500 employees. In its long journey over three decades, the simple
principle on which it was founded remains the same: producing high-quality generics and providing better access to medicines at
a much affordable cost. The company continues to adhere to the global standards and takes initiatives to remain more
competitive in order to maintain its strong track record.
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-the-art
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, antihypertensives, antidiabetics, 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
quality
generics
at
the
most
affordable
cost.
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.
Beximco Group established a very significant milestone in the history of the countrys chemical industry. The plant not only met
90% of the countrys demand for two vital raw materials, ampicillin and amoxycillin but also started selling these to overseas
markets. BPL received the Export Gold Trophy in 1994-95 for its exports of these two basic chemicals making it the first
pharmaceutical company in Bangladesh to win the Export Trophy.
This division is involved with the following companies:
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 share holders.
Vision Statemen of BPL :
Vision is the long-term outlook i.e. over the years, the company is growing from strength to strength, and consistently delivering
on its promise of performance. In 2009 it achieved sales growth of more than 21% outperforming the industry growth an
consolidated its position in the domestic market.
We strongly believe our investments in expanding capacity and upgrading our facility will provide the necessary impetus for
sustainable growth. Our major focus currently remains on development of international markets and now we are aggressively
pressing ahead with our strategy which is crucial to the companys future-particularly for building presence in developed markets.
We are confident that companys sustained growth in the next few years will allow us to increase export turnover manifold
ensuring our presence in the most regulated markets, and we are now well on course in terms of our product line, robust
manufacturing and marketing platforms (Annul report 2009)
Corporate Governance Structure Of BPL
Composition of the Board:
The management of BEXMCO PHARMA is simply exceptional in comparison to any other listed companies in this country. It has
a blend of professionalism and wisdom, which plays a key role in managing the champion organization. The Board of Directors
includes:
A S F Rahman
Salman F Rahman
Nazmul Hassan
Iqbal Ahmed
Chairman
Vice Chairman
Managing Director
Director
Director
Director
Director
Director
Director
Independent Director
A dedicated Management committee and Executive Committee make sure that BEXMCO PHARMA achieves its target with
sheer professionalism. The committees are:
Management Committee
Executive Committee
Company Secretary
Managing Director
Ali Nawaz
Director, Commercial
Chief Operating Officer
Director, Manufacturing
Director, Sales
A R M Zahidur Rahman
Nazmul Hassan
Managing Director
Rabbur Reza
Ali Nawaz
Director, Commercial
Operational Headquarter
Year of Establishment
1976
Commercial Production
1980
Status
Business Lines Manufacturing and marketing ofpharmaceutical finished products,large volume parenterals, Small volume
parenterals, Ophthalmic preparations, Nebulizer Solutions and Active Pharmaceutical Ingredients (APIs)
Overseas
Offices
& Associates
Republic,
UK,
USA,
Pakistan,
Myanmar, Singapore,
Kenya,
Yemen,
Nepal,
Czech
Export Markets
Hong
Kong, Iran, Iraq, Kenya, Malaysia,
Mozambique, Myanmar, Nepal, Pakistan,
South Korea,
Sri Lanka, Thailand, Ukraine,
Vietnam, Yemen.
Authorized Capital(Taka)
9,100 million
Paid-up Capital(Taka)
1,511.49 million
Number of Shareholders
Around 151,149,296
Number of Employees
2,500
Vertical analysis
Ratio Analysis.
Vertical analysis of a balance sheet will answer questions relating to asset, liability, and equity accounts, such as the following:
Vertical analysis of an income statement helps answer questions such as the following:
What percentage of total assets is classified as current assets? Current liabilities comprise what percentage of total liabilities
policy? If so, is it possible that the company is losing sales that it might have made with a less strict credit policy?)
What is the composition of the capital structure? In other words, total liabilities make up what percentage of total assets and
What is the mix of expenses (in terms of percentages) that the company has incurred in this period?
Particulars
2006
percent
2007
percent
2008
percent
2009
percent
3,702,317,159
100%
3,597,024,812
100%
4,010,167,059
100%
4,868,254,915
100%
(1,971,231,33
-53%
(1,967,509,975
-55%
(2,002,871,181
-50%
(2,566,206,626
-53%
3)
e
x
Gross Profit
1,731,085,826
47%
1,629,514,837
45%
2,007,295,878
50%
2,302,048,289
47%
Operating Expenses
(984,562,332)
-27%
(974,736,690)
-27%
(1,008,501,030
-25%
(1,300,765,878
-27%
m
c
)
Administrative Expenses
(150,285,977)
-4%
(145,544,701)
-4%
(153,464,243)
-4%
(215,192,547)
-4%
(864,276,355)
-23%
(829,191,989)
-23%
(855,036,787)
-21%
(1,085,573,331
-22%
Distribution Expenses
746,523,494
20%
654,778,147
18%
998,794,848
25%
1,001,282,411
21%
Other Income
56,201,142
2%
19,625,795
1%
686,510
0%
198,986,379
4%
Finance cost
(253,318,784)
-7%
(254,742,392)
-7%
(249,654,298)
-6%
(289,427,992)
22%
549,405,852
15%
419,661,550
12%
749,827,060
19%
910,840,798
19%
(26,162,183)
-1%
(19,983,883)
-1%
(35,706,050)
-1%
(43,373,371)
-1%
523,243,669
14%
399,677,667
11%
714,121,010
18%
867,467,427
18%
(52,585,106)
-1%
(46,609,789)
-1%
(168,779,737)
-4%
(242,727,120)
-5%
Current Tax
(35,402,549)
-67%
(57,661,278)
-124%
(173,720,430)
-103%
(242,727,120)
-5%
Tax
(17,182,557)
-33%
11,051,489
24%
4,940,693
3%
Tax
470,658,563
13%
353,067,878
10%
545,341,273
14%
624,740,307
13%
Profit
Before
Contribution to WPPF
Contribution to Workers
Profit
participation
/welfare Funds
Deferred
(Expense)/Income
Profit
After
Transferred to Statement
of changes in Equity
Pharmaceuticals Ltd.
Comparative Balance sheet(Common-size Analysis)
For the year ended Dec: 31 2006- Dec: 31 2009
ASSETS
2006
Percent
2007
Percent
2008
Percent
2009
percent
8,555,119,221
71.40%
9,029,643,482
75.54%
11,957,773,78
80.69%
12,975,195,52
65.23%
7
Property,
Plant
and
8,513,136,381
71.05%
8,992,942,392
75.23%
Equipment-Carrying Value
11,921,072,69
9
80.44%
12,966,587,17
65.19%
Intangable Assets
5,726,525
0.03%
Investment in Shares
41,982,840
0.35%
36,701,090
0.31%
36,701,090
0.25%
2,881,826
0.01%
Current Assets
3,357,393,266
28.02%
2,923,775,458
24.46%
2,861,891,654
19.31%
6,916,737,893
34.77%
Inventories
1,754,440,288
14.64%
1,652,480,291
13.82%
Advances
and
1,505,288,093
10.16%
1,722,953,284
8.66%
234,530,326
1.58%
242,034,855
1.22%
430,240,095
3.59%
499,680,792
4.18%
503,916,401
3.40%
694,111,730
3.49%
591,613,938
4.94%
685,915,465
5.74%
544,509,106
3.67%
699,204,450
3.52%
2,500,000,000
12.57%
Deposits
Short Term Investment
581,098,945
4.85%
85,698,910
0.72%
73,647,728
0.50%
1,058,433,574
5.32%
TOTAL ASSETS
11,982,512,48
100.00%
11,953,418,94
100.00%
14,819,665,44
100.00%
19,891,933,42
100.00%
SHAREHOLDERS EQUITY
AND LIABILITIES
Shareholders equity
7,949,920,425
66.74%
8,250,939,647
69.03%
10,450,202,14
70.52%
10,885,706,61
54.72%
1,040,973,120
8.74%
1,145,070,430
9.58%
1,259,577,470
8.50%
1,511,492,960
7.60%
Share Premium
1,489,750,000
12.51%
1,489,750,000
12.46%
1,489,750,000
10.05%
1,489,750,000
7.49%
1,689,636,958
14.18%
1,689,636,958
14.14%
1,689,636,958
11.40%
1,689,636,958
8.49%
294,950,950
2.48%
294,950,950
2.47%
294,950,950
1.99%
294,950,950
1.48%
394,834,828
3.31%
442,354,953
3.70%
442,354,953
3.70%
1,711,174,747
11.55%
1,617,361,714
8.13%
Revaluation Surplus
Reetained Earnings
3,039,774,569
25.52%
3,189,176,356
26.68%
4,005,112,020
27.03%
4,282,514,032
21.53%
Non-Current Liabilities
1,435,171,264
12.05%
2,074,506,357
17.35%
1,767,431,029
11.93%
6,684,775,166
33.61%
1,159,409,947
9.73%
1,776,449,778
14.86%
1,446,600,500
9.76%
1,924,933,065
9.68%
4,100,000,000
20.61%
Off
Current
Maturity
(Secured)
Fully
Convertible,5%
0.00%
213,357,859
1.79%
246,704,610
2.06%
274,419,253
1.85%
307,425,614
1.55%
62,403,458
0.52%
513,514,969
4.30%
46,411,276
0.31%
352,416,487
1.77%
2,527,420,798
21.22%
1,627,972,936
13.62%
2,602,032,267
17.56%
2,321,451,642
11.67%
1,302,816,980
10.94%
907,582,327
7.59%
1,461,666,227
9.86%
1,451,326,354
7.30%
Long
712,122,930
5.98%
343,604,498
2.87%
648,165,841
4.37%
308,820,056
1.55%
365,255,938
3.07%
271,814,118
2.27%
263,176,822
1.78%
409,898,122
2.06%
Current
Liabilities
and
Provisions
Term
Borrrowings-
Current Maturity
Creditors
payables
and
other
Accrued Expenses
117,936,620
0.99%
60,052,739
0.50%
81,776,450
0.55%
79,094,905
0.40%
Dividend Payables
13,012,146
0.11%
3,285,324
0.03%
3,169,568
0.02%
1,727,724
0.01%
16,276,184
0.14%
41,633,930
0.35%
144,077,359
0.97%
70,584,481
0.35%
11,912,512,48
100.00%
11,953,418,94
100.00%
14,819,665,44
100.00%
19,891,933,42
100.00%
TOTAL
LIABILITIES
AND
SHAREHOLDERS EQUITY
Horizontal Analysis:
Horizontal analysis focuses on trends and changes in financial statement items over time. Along with the taka amounts
presented in the financial statements, horizontal analysis can help a financial statement user to see relative changes over time
and identify positive or perhaps troubling trends.
Beximco Pharmaceuticals Ltd
Comparative Income Statement(Horizontal Analysis)
For the year ended Dec: 31 2006- Dec: 31 2009
Particulars
2006
percent
2,007
percent
2008
percent
2009
percent
3,702,317,15
100%
3,597,024,812
97.2%
4,010,167,059
108%
4,868,254,915
131%
100%
(1,967,509,975)
99.8%
(2,002,871,181
102%
(2,566,206,626)
130%
9
Cost of goods sold
(1,971,231,33
3)
Gross Profit
1,731,085,82
)
100%
1,629,514,837
94.1%
2,007,295,878
116%
2,302,048,289
133%
100%
(974,736,690)
99.0%
(1,008,501,030
102%
(1,300,765,878)
132%
6
Operating Expenses
(984,562,332
)
Administrative Expenses
(150,285,977
)
100%
(145,544,701)
96.8%
(153,464,243)
102%
(215,192,547)
143%
100%
(829,191,989)
95.9%
(855,036,787)
99%
(1,085,573,331)
126%
)
Selling,
Marketing
and
(864,276,355
Distribution Expenses
746,523,494
100%
654,778,147
87.7%
998,794,848
134%
1,001,282,411
134%
Other Income
56,201,142
100%
19,625,795
34.9%
686,510
1%
198,986,379
354%
Finance cost
(253,318,784
100%
(254,742,392)
100.6%
(249,654,298)
99%
(289,427,992)
114%
549,405,852
100%
419,661,550
76.4%
749,827,060
136%
910,840,798
166%
(26,162,183)
100%
(19,983,883)
76.4%
(35,706,050)
136%
(43,373,371)
166%
523,243,669
100%
399,677,667
76.4%
714,121,010
136%
867,467,427
166%
(52,585,106)
100%
(46,609,789)
88.6%
(168,779,737)
321%
(242,727,120)
462%
Current Tax
(35,402,549)
100%
(57,661,278)
162.9%
(173,720,430)
491%
Tax
(17,182,557)
100%
11,051,489
-64.3%
4,940,693
-29%
(242,727,120)
686%
Tax
470,658,563
100%
353,067,878
75.0%
545,341,273
116%
624,740,307
133%
)
Profit Before Contribution
to WPPF
Contribution to Workers
Profit participation /welfare
Funds
Deferred
(Expense)/Income
Profit
After
Transferred to Statement
of changes in Equity
ASSETS
2006
percent
2007
Percent
2008
Percent
2009
Percent
8,555,119,221
100%
9,029,643,482
106%
11,957,773,78
140%
12,975,195,52
152%
7
Property, Plant and Equipment-
8,513,136,381
100%
8,992,942,392
106%
Carrying Value
11,921,072,69
9
140%
12,966,587,17
152%
Intangable Assets
5,726,525
100%
Investment in Shares
41,982,840
100%
36,701,090
87%
36,701,090
87%
2,881,826
7%
Current Assets
3,357,393,266
100%
2,923,775,458
87%
2,861,891,654
85%
6,916,737,893
206%
Inventories
1,754,440,288
100%
1,652,480,291
94%
1,505,288,093
86%
1,722,953,284
98%
100%
234,530,326
242,034,855
Accounts Receivable
430,240,095
100%
499,680,792
116%
503,916,401
117%
694,111,730
161%
591,613,938
100%
685,915,465
116%
544,509,106
92%
699,204,450
118%
100%
2,500,000,000
581,098,945
100%
85,698,910
15%
73,647,728
13%
1,058,433,574
182%
TOTAL ASSETS
11,982,512,48
100%
11,953,418,94
100%
14,819,665,44
124%
19,891,933,42
166%
7
SHAREHOLDERS
EQUITY
AND LIABILITIES
Shareholders equity
7,949,920,425
100%
8,250,939,647
104%
10,450,202,14
131%
10,885,706,61
137%
1,040,973,120
100%
1,145,070,430
110%
1,259,577,470
121%
1,511,492,960
145%
Share Premium
1,489,750,000
100%
1,489,750,000
100%
1,489,750,000
100%
1,489,750,000
100%
1,689,636,958
100%
1,689,636,958
100%
1,689,636,958
100%
1,689,636,958
100%
294,950,950
100%
294,950,950
100%
294,950,950
100%
294,950,950
100%
394,834,828
100%
442,354,953
112%
100%
442,354,953
100%
1,711,174,747
100%
1,617,361,714
Excess of Issue
Price over
Revaluation Surplus
Retained Earnings
3,039,774,569
100%
3,189,176,356
105%
4,005,112,020
132%
4,282,514,032
141%
Non-Current Liabilities
1,435,171,264
100%
2,074,506,357
145%
1,767,431,029
123%
6,684,775,166
466%
1,159,409,947
100%
1,776,449,778
153%
1,446,600,500
125%
1,924,933,065
166%
4,100,000,000
100%
100%
Preference Share
Liability for Gratuity & WPPF
213,357,859
100%
246,704,610
116%
274,419,253
129%
307,425,614
144%
62,403,458
100%
513,514,969
823%
46,411,276
74%
352,416,487
565%
2,527,420,798
100%
1,627,972,936
64%
2,602,032,267
103%
2,321,451,642
92%
1,302,816,980
100%
907,582,327
70%
1,461,666,227
112%
1,451,326,354
111%
712,122,930
100%
343,604,498
48%
648,165,841
91%
308,820,056
43%
365,255,938
100%
271,814,118
74%
263,176,822
72%
409,898,122
112%
Accrued Expenses
117,936,620
100%
60,052,739
51%
81,776,450
69%
79,094,905
67%
Dividend Payables
13,012,146
100%
3,285,324
25%
3,169,568
24%
1,727,724
13%
Current
Liabilities
and
Provisions
Maturity
Ratio Analysis:
Ratio means one number expressed in terms of another. Ratio analysis is the process of determining and interpreting numerical
relationships based on financial statements. A ratio is a statistical yardstick that provides a measure of the relationship between
variable and figures. This relationship can be expressed as percent or as a time. Ratio analysis is based on the notion that the
analysis of absolute figures may not be the best means available of assessing on organizations performance and prospects.
Ratio analysis is used by all business and industrial concerns in their financial analysis. Ratios are considered to be the best
efficient execution of managerial function like planning, forecasting, control etc.
Different ratios are used in Statement analysis:
The different ratios, which used in the study of analysis of financial performance of Beximco pharmaceutical limited. These are
given in the following:
Liquidity Ratio
Activity Ratio
Leverage Ratio
Profitability Ratio
Liquidity Ratio
1.Current Ratio:
Current assets are received as relatively liquid which means they can generate cash in a relatively short time period. Current
liabilities are debts that will come due within a year. Of the current ratio is low, the firm may have difficulty in meeting short run
commitment as they mature. If the ratio is too high, the firm may have an excessive investment in current assets or to be under
utilizing short term credit. The standard term is 2.1 desired but there are deviations.
Current
Ratio=
Current
assets / Current Liabilities
(Figure in thousand)
Particulars
Years
2006200720082009Current
Assets335739329237752,861,8916,916,737Current
Liabilities252742016279722,602,0322,321,451
2006-2009
Current Ratio
1.33
1.80
1.10
2.98
From
the
above
calculation we can see that the current ratios of BPL from the years 2006-2008 are moderate, through these ratios gradually
decrease in year by year but 2007 are moderately increased. It means it can meet its short-term obligations but the company may
fall in problem if their short term liabilities to be paid quickly. In 2009 current ratio increased it means that it can meet its short term
liabilities promptly
2. Quick Ratio:
Quick ratio measures the firms ability to meet short-term obligations from its most liquid assets in this case, inventory is not
included because, it is generally for less liquid than other current assets.
From the above calculation we can see that the quick ratio of BPL is one-year increase and one year decreases from 2006-2008
gradually and in 2009 quick ratio highly increased. It implies that it can meet its short-term liabilities by its own assets and it is
least liquid assets. So BPL quick ratio is satisfactory and desirable.
3. Cash flow from operation ratio:
It measures liquidity by comparing actual cash flows (instead of current and potential cash resources) with current liabilities. This
ratio avoids the issues of actual convertibility to cash, turnover and the need for minimum levels of working capital (cash) to
maintain operation.
The ratio of 2007 & 2009 was low from other years, but in 2006 & 2008 it goes very high . The high CFO ratio is good because it
indicates the companys capacity to meet short-term obligations by comparing actual cash flow with current liabilities. So, the
cash flow from operation ratio is not so good.
4. Net Working Capital Ratio:
It is a summary ratio that reflects the amount of working (operating) capital needed to maintain a given level of net assets. It is
the relationship between net working capital and net assets. It measures the firms potential reservoir fund.
Net Working Capital Ratio = Net Working Capital / Net Assets
Note: Net working capital (NWC) = Current Assets Current Liabilities.
Leverage Ratio
5. Debt to Total Asset Ratio
The debt ratio measures the position of total assets financed by the firms creditors. The higher the ratio, the greater the amount
of other peoples money being used to generate profits. A high ratio shows a large share of financing by the creditors, relatively to
the owners, who have large claim against the assets of the firm, a lower ratio implies a smaller claim of the creditors standard
ratio is 60:40.
This ratio moderately lower 2006-2009 but 2008 are very low. So the BPL credit proportion is some lower relatively the owners
through it is decrease year by year. The BPL performance of Debt to Total Assets ratio is very good because the higher Debt to
Total Assets Ratio implies the greater risk that the company may be unable to meet its maturing obligation.
6. Debt to Equity Ratio:
A higher debt equity ratio implies that high proportion of long-term financial is from debt sources. Long-term creditors generally
prefer to see a modest debt equity ratio means greater protection and a greater stake in the companys future.
Debt to Equity Ratio = Long-Term Debt / Shareholders Equity
Here we can see, the debt to equity ratio of BPL down or flat year by year. The overall performance is good. BPL have greater
protection and stake so they can increase its long-term borrowing.
7. Time Interest Earned Ratio:
The time interest earned ratio sometimes called interest coverage ratio. It reflects the firms ability to pay interest out of earning.
Activity Ratio
8. Inventory Turnover:
A low inventory turnover implies a large investment in inventories relative to the amount needed to services sales. The high
inventories turnover shows that inventories are too small and it may be that the firm is constantly running short of inventory,
thereby losing customers.
From the above calculation we can say that the Inventory Turnover Ratio of BPL is decrease gradually from 2006-2009 which is
better for the firm. Because it does mean they prefer to storage their products for appropriate or limit times. So the activity or
liquidity of BPL is satisfactory. And inventory turnover of BPL has the large investment in inventories relative to the amount
needed to service sales.
9. Average Collection Period:
The average Collection Period indicates the firms efficiency, in the collecting on its sales. It may also reflect the firms credit. If
customer take more time to pay, then the collection period will generally be greater. A long collection period is not necessarily
bad, since a stringent credit policy regarding customers its pay faster may load to a reduction on sales.
Average Collection Period = Accounts receivable / Average Credit Sales per Day
Average
Collection
41.84
50.01
44.90
51.33
Period Ratio
The average collection period should lower which will better. From the above calculation we can see that the average collection
period of BPL decreases 2006-2009 year. BPL credit sales collection period is not so bad. So it means BPL their credit should be
collected. It shows the good firm efficiency.
10. Fixed Assets Turnover:
The ratio indicates how intensively the fixed assets of the firms are being used. An inadequately ratio implies excessive
investment plant and equipment relative to all value at the output being produced.
Fixed Assets Turnover = Sales / Fixed Assets
0.43
0.40
0.34
0.38
Ratio
From the above calculation we can see that Fixed Assets Turnover ratio has decreased 2006-2008 gradually and moderately
increased in 2009. It shows the firms efficiency where its assets have used. The maximum fixed assets turnover ratio is good for
the company. So, the BPL fixed assets turnover ratio is not so bad.
11. Total Assets Turnover:
Total Assets Turnover reflects how well the companys assets are being used to generate sales. The high total assets turnover is
good for the company running and low reflects bad impact.
Total Assets Turnover = Sales / Total Assets
0.31
0.30
0.27
0.24
Ratio
We can see that the total assets turnover decreased gradually from year 2006-2009. It is not so bad for BPL. It means the more
efficiently its assets have been used which measure probably the greatest interest to the management.
12. Receivable Turnover:
The receivable turnover ratio measures the effectiveness of the firms credit policies. It also indicates the level of investment in
receivable needed to maintain the firms sales level.
Receivable Turnover:
Sales
Average trade receivable
In 2006-2009 year the payable turnover was increased gradually, but in year 2007 are some decreases. The BPLs borrowing
and loan money is not huge amount and it also represents an important source of financing for operating activities, so that the
payable turnover of BPL ration is good.
Profitability Ratio
Gross profit Margin:
The gross profit margin reflects the effectiveness of pricing policy and of productive efficiency. That is how well the purchase or
production cost of goods is controlled. If raising the price of the firms product increases the gross margin, the product may
become uncompetitive, producing a falloff in sales. Therefore a company may find it advantage to lower the price and therefore
lower the gross profit margin if it increase sale so much as to increase total profit.
Gross Profit X 100
Gross profit Margin (%) = Sale
From the analysis of BPL, the gross profit margin increases year- by year, though material cost regularly increased due to high
rate and also increased other direct and indirect expense. The GPMR of BPL implies the efficiency is developed day to day at the
production area especially in year 2008
15. Net profit Margin:
Profit margin on sales provides little useful information since it means the effectiveness of sales in producing profit with the effect
of the method of financing on profit ( since net income is after deduction of interest on debt and of taxed, which are affected by
interest). The higher firms NPM, the better the firms position. A NPM could ensure adequate return to the owners. Alternatively
low NPM has the opposite implication.
Net profit Margin (%) =
The NPM ratio is satisfactory at the study of the BPL, but its decreased in 2007. In year 2007 it was 9.81% which couldnt
ensure adequate return to the owners. But the average position of BPL for NPM is satisfactory.
16. Return on total assets:
Return on total assets is the total after corporate tax return to stockholder and lenders on the total investment that they have in
the firm. It is the rate of return earned by the firm as a whole for all its investors, including lenders. The higher ROA of firms
represents the better position.
Return on Total Assets, % = Net Income + Interest Expenses X 100
The ROA ratio is satisfactory of the study of the BPL. But it is decreased in year 2006-2009. In the year 2006 it was 6.00%, which
were highest until the recent year. last year the ratio was decreased to 4.60%. But the overall performances were better
17. Return On Equity (ROE)
According to this ratio, profitability has measured by dividing the net profits after taxes but before preference dividend by the
average total shareholders equity. The return on common equity (ROE) measures the return earned on the common
stockholders investments in the firm. Generally the higher the return, the better off is the owners. Return on equity is therefore
the best measure of the companys success in fulfilling its goal.
ROE = (Net Income / Stockholders Equity) *100
he ROE Ratio decreased in year 2006-2009 and in year 2008 the ratio was decreased to 3.35%. Although the BPLs ROA of two
year was low but the overall performances was better.
18. Earning Per Share (EPS):
Earning per share measures the profit available to the equity holders on a per share basis. The perfect available for the ordinary
shareholders are represents by otherwise the residential income of the firm.
EPS = Net profit after tax / Number of ordinary share outstanding:
The EPS of BPL has increased over the 2006-2009. But the it decreased in 2008 to 3.61. The reason was the net income
decreased in last two years and the no. of outstanding shares was increased. The number of shares outstanding has to count
from recent year and added with the bonus recent shares of those years. The higher EPS is good for the company. So EPS of
BPL position is not so good.
19. Dividend per Share (DPS):
Dividend per Share is the dividends paid to the shareholders on a per share basis. In other words, DPS is the net distributed
profit belonging to the shareholders dividing by the number of ordinary share outstanding.
Here the DPS of BPL decreased in last 2 years because the cash dividend increases and number of shares outstanding was
increased. But in 2006 and 2007 increased because cash dividend was higher and number of shares outstanding was lower. The
overall performance of BPL for dividend per share is not so good.
Dividend Payout Ratio:
The Dividend Payout Ratio indicates the percentage of each Tk. Earned that is distributed to the owners in the form of cash.
Dividend Payout Ratio = (Dividend Per Share / EPS) *100
We can see in year 2007 the DPS was 48.70%, which is higher than the next years. As BPL is a well established mature firm.
So it tends to have higher payout ratios. Then it measures the good relationship between the earnings belonging to the
shareholders and the dividend paid to them. The Dividend payout ratio is not good for last two years. It decreased from 48.70%
to 8.72% which is very much lower in terms of earnings as well as shareholders.
Industry Analysis ofIntroduction:
In an industry analysis, any number of key characteristics should be considered at some point. In this case things that must be
considered are market capitalization, turn over, market performance, past sales and earnings performance, the performance of
industries, the attitudes of the government towards the industries, labor conditions within the industries, the competitive
conditions as reflected in any barriers to entry that might exist, and stock prices of firms in the industry relative to other earning.
After comparing these things with BPL we have evaluated, BPL is A category pharmaceuticals company enlisted in Dhaka
Stock Exchange 3 July, 1985 and Chittagong Stock Exchange 11 June, 1995 and AIM (Alternative Investment Market) 21
October, 2005, and face value of share is Tk. 10. Since it is A category company, it is regular in holding the AGM and its last
AGM was held 15th June 2010. At present the number of shares out-standing 151,149,296 and the amount of paid up share
capital is Tk. 1,511,493(in thousands). General public and institutions is 50.97%, Foreign Investors is 27.66%, Sponsors /
Directors is 2.75%, and ICB investors account is 10.46% of total share capital. The net profit after tax is Tk. 624,740,307 and
earning per share at the current time is Tk. 4.13, dividend per share is Tk. 0.36, the price earning ratio is 37.72.
Years
Particulars
2006
2007
2008
2009
53.7
58.9
167.7
155.8
4.67
3.08
3.61
4.13
1.55
1.50
0.69
0.36
33.20%
48.70%
19.11%
8.72%
13.06
21.04
46.45
37.72
business. But to know the stock value of the firm, it acts as a valuable index. However, the EPS of the BPL over the last four
years is shown as follows:
This EPS Decrease gradually in year 2006-2009, and year 2007 decreased & 2008 slightly increased. The growing up EPS
defines the years Net profit increased and the downing up EPS defines the years Net profit Decreased. This increase was more
in year 2006 than other years. Moreover, its number of outstanding shares was almost remained consistent over the years
except 2006 and 2007.
Dividend Per Share:
The net profit after taxes belongs to shareholders. But the income, which they really receive, is the amount of earnings
distributed such as dividend. Therefore, to know the strength of the stock of a particular company, many investors may be
interested in DPS rather than EPS. DPS is the earnings distributed to ordinary shareholders dividend by the number of ordinary
shares outstanding. The DPS of the BPL for the last five years are given below:
DPS of BPL in year 2006 was high, because in this year companys EPS was good. And last three years gradually decreased. In
this years company has given shareholders 5% cash and 10% stock dividend. Another reason was that its RPS decreased but
the number of share out-standing goes up in this year.
Dividend Payout Ratio:
Since the D/P ratio per share cannot be a true yardstick to measure the strength of the stock of the particular company, D/P ratio
serves as an important criterion to give the investors of the financial performance of that company. The more dividends are paid,
the more shareholders become convicted of the financial strength of the company. However, excessive dividend payment impairs
the growth opportunity of that company because the company losses the opportunity to invest in the profitable interest. The D/P
ratio of BPL for the last five years is shown is follows:
The D/P ratios are gradually decreased in year 2006-2009. D/P ratio increased significantly because DPS did not increased
proportionately with EPS. Another reason was that management kept significant portion retained earnings. In year 2006-2007 are
increase of D/P. The reason of increase in D/P ratio is the opposite of decrease in D/P ratio.
Price-Earning Ratio:
The Price-Earning Ratio is widely used by the security investors to value the firms performance as expected by the investors. It
indicates investors judgments or expectations about the firms performance. Management is also increased in this market
appraisal of the firms performance and will like to find the cause if the P/E ratio declines. P/E ratio reflects investors
expectations about the growth in the firms earnings. Industries differ in their growth prospectus; accordingly, the P/E ratio for
industries varies widely. The P/E ratio of BPL for the last four years is given below:
The P/E ratio decreases until in years 2006-2009 then it was increased in year 2008 and again decreased in year 2009. The
decrease reason was decrease in share price. The way of share price decreased the EPS increases. The P/E ratio was greater
in 2008 because there was a huge increase in the market price per share of them. Moreover, the increase in P/E ratio indicates
the earning performance of BPL overall good.
SWOT ANALYSIS:
Strengths:
1.
BPL currently manufactures about 452 products with different dosage forms under different brand names. Many of its products
enjoy the status of brands leaders in the market.
2.
3.
4.
5.
BPL using different type of technology for move their company to carrying innovation forward.
6.
BPL has secured market niche in the market by following cost leadership strategies as well as aggressive promotional
activities. The companies strong support to the medical community has gained its brand locality form the doctor.
Weakness:
1.
BPL has a narrower product line and number of products than its principle competitor in the market.
2.
The company produces so many product variation for that reason some time feels confuse what to suggest BPL product.
3.
BPLs distribution network is not working as good as its competitor in the urban area. Opsonin , Acme is doing well in this area
than BPL.
4.
Warehouse management system is not well so there are always they face store problem for storage problem.
Opportunities:
1.
The market is expected to grow by 9% to 15% per annum for the next 5 years. The next stage growth is expected to come from
backward integration to manufacturing processes that are difficult to imitate products and exports.
2.
The WTO agreement extended in 2016 instead of 2005 for the LDC only in pharmaceutical company.
3.
The company start to produces kind of injectables comparing. The injectables market is a large one so they can easily
competes their rival companies.
4.
Entered into nine new international markets in Asia, Middle East, Pacific Islands, Africa and Central America. Registered 107
new products in different overseas markets.
5.
In Bangladesh pharmaceutical companies are considered as growing company. So there are lots of opportunities in this field.
6.
Cost of producing product cost low their close competitor it will help them to charge low price of the product it given huge
market opportunities in Middle-East and North Africa nation.
7.
BPL is one among the few pharmaceuticals companies in the world that are currently producing technology driven CFC-free
HFA MDIs. Based in the very encouraging responses that we are getting for our MDI products particularly for our Non-CFC MDIs from
Central and Latin America and Middle East Countries, we have undertaken a project to add another 10 million units capacity plant
beside our existing MDI facility. The project is progressing as planned.
8.
Therapeutic Goods Administration (TGA), Australia and Joint Inspection Committee of the Ministry of Health of Gulf
Cooperation Council (GCC) countries completed audit of the new Oral Solid Dosage (OSD) and Metered Dose Inhaler (MDI) & Spray
manufacturing facilities.
9.
Signed a ling term arrangement with the Global Supply Division of UNICEF (Denmark) to supply 60,000 units CFC free metered
dose inhaler product over a two year contract period give enormous market opportunities.
10.
During the year, BPL have some project to build facility to manufacture Small Volume Parenterals (SVP), Opthalmic and
Nibulizer Solutions progressed as acheduled. Hopefully as planned, they will be able to commence marketing of these products soon .
They are now expediting the process of adding more lines to their existing Oral Solid Dosage Facility.
Threats:
1.
In most case the product cost of BPL is higher than that of other companies because of high cost of maintaining quality
products, high distribution cost etc. In the context of Bangladesh economic structure, BPL is in fear of loosing market in the rural
areas.
2.
In Bangladesh the copyright act is not applied by the government appropriately which creates continually threats for the
company as its competitors easily copy its products.
3.
Because of political unrest and poor infrastructure facilities BPL faces problems in Local marketing.
4.
BPL also facing treats forms its Indian counterparts as they are offering their products at lower price than it.
5.
6.
7. Findings
Liquidity:
Liquidity reveals that BPL has enough current assets than previous years to pay the obligations. The liquidity position of the
company is acceptable because its current ratio is 1.33,1.8,1.1,2.98 respectively from year 2006 to 2009 and Quick ratio is
0.63,0.89,0.52,2.24 respectively. Quick ratio is below 1 from 2006 to 2007. It does not comprise the standard value .
Financial
Solvency
&
Flexibility:
The solvency dimension of BPL is not so strong. Its interest coverage ratio stood at 3.17,2.64, 4 & 4.15 from year 2006 to 2009 .
There was a decline in coverage ratio. Higher value is expected for paying the interest obligation.
BPL total debt to equity ratio stood at 0.24, 0.26, 0.2 & 0.21 respectively which is down or flat year by year. It indicates that BPL
has greater protection and stake so they can increase its long-term borrowing.
The operating performance of BPL is good. That means its profit margin is more or less flat or increase over the year
Working capital of the company is not satisfactory. Company should focus on the working capital for expansion of the business &
payment for short term obligations.
At last I can conclude that overall performance of the company is satisfactory.
Recommendation:
After analysis of different financial performance measures and comparing with other particular industry BPL financial
performance is comparatively high and sometimes this companys second position. Improve the recommended sectors if these
are possible. The recommended sectors are given below:
Leverage of the company indicates that BPL using more equity capital than long term debt capital, which is not a good signal
The possible causes of fall of return on asset, return on equity ratio are rising in the cost of production, administration, finance
cost.
BPL may reduce their operating and non-operating expenses in order to increase the profitability of the company.
BPL should organize seminar, campaign and do some promotional activities to provide proper knowledge and used about
medicine.
Evaluation for the good performance of the employees by introducing award and incentives.
BPL should try to perform some social responsibility like providing free doctors and medicine facility to any rural areas for
Conclusion:
Beximco Pharmaceuticals Limited (BPL) is one of the well-known names in the business sector of Bangladesh. The company
was at top three or four years ago. Still now , the company showing its growth.The company cant perform well without its internal
performance evaluation. One of the popular techniques to evaluate the performance is ratio analysis. And i used the same
techniques to evaluate the performance of BPL.BPL is one of the market leader and in some cases market leader in the
pharmaceuticals industry of Bangladesh, It is gradually expanding its assets and able to proper utilize its assets well. The overall
financial position of the company may be said to satisfactory over the years. Since BPL is a good concern of Beximco Group, so
the position may again be improved if management becomes more careful of income and expenditure, using of working capital.