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Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Introduction Beximco Pharma was incorporated in 1976 and commenced operations in 1980 with the manufacturing and marketing of products of Bayer AG, Germany and Upjohn Inc., USA under licensing arrangements. In 1983, the company started manufacturing its own formulations and it launched export operation in 1992. In 2005 Beximco Infusions Ltd, the company that produces intravenous fluids was amalgamated with the parent company. In the same year it completed the state-of-the-art oral solid dosage plant in compliance with the US FDA and UK MHRA standards, which has been approved by major global regulatory bodies. Today Beximco Pharma is the largest exporter of pharmaceuticals in the country and the only company to win National Export Trophy (Gold), the highest national accolade for export, for record three times. 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. Basic Information Authorized Capital in BDT* (mn) 2000.0 Paid-up Capital in BDT* (mn) 1673.0 Face Value 10.0 Total no. of Securities 167318487 Market Lot 50 Business Segment Pharmaceuticals & Chemicals Number of Shareholders Around 68,000 Stock Exchange Listings Dhaka and Chittagong Stock Exchanges of Bangladesh and AIM of London Stock Exchange Number of Employees 2,310 Date shares were admitted to trading Dhaka Stock Exchange 3 July, 1985 Chittagong Stock Exchange 11June, 1995 AIM ( Alternative Investment Market) London 21 October,2005 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 1 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) 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. The company is the largest exporter of pharmaceuticals from Bangladesh and the only company to receive National Export Trophy (Gold), the highest national accolade for export, for record three times. BPL has a global footprint in more than 45 countries across four continents and currently in the process of entering the emerging markets of CIS with increasing focus on regulated markets like EU and USA. Besides the retail outlets, Beximco Pharma’s products are being supplied to renowned hospitals and institutions like Raffles Hospital and K K Women & Children Hospital in Singapore, MEDS and Kenyatta National Hospital (KNH) in Kenya, Jinnah Hospital, and Agha Khan Hospital in Pakistan. Located at Tongi, near the capital city Dhaka, BPL’s manufacturing site is spread over an area of 20 acres which houses a number of self contained production units including oral solids, metered dose inhalers, intravenous fluids, liquids, ointments, creams, suppositories, ophthalmic drops, injectables, nebulizer solutions etc. The bulk drug unit for producing paracetamol is also located within this site. Company’s penicillin API and formulation units are situated at Kaliakoir, a few kms from the main site. The plant and machinery throughout the site have been designed by and procured mostly from renowned European companies. Beximco Pharma has its own utility infrastructure to ensure adequate generation and distribution of purified water at all times. The installed capacity of power generation is 8 MW. There is also liquid nitrogen generation facility on site. Rising cost of healthcare and medicines has become a global concern, and in order to reduce cost across the value chain, pharmaceutical companies from developed markets continue to look for suitable partners in developing countries for shifting or outsourcing their production. With decades of experience in generic drug manufacturing, world class capabilities as well as significant cost advantages, Beximco Pharma can be an ideal partner for you to meet your contract manufacturing needs. Since its inception, Beximco Pharma has established itself as a reliable partner for a number of world's leading pharmaceutical companies. The company has 2 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) maintained a track record of sound professionalism and its management has always adhered to international standards providing a culture and working environment similar to that of a multinational company. Currently the company has contract manufacturing agreement with GlaxoSmithKline (GSK) for producing Metered Dose Inhaler product. These partnerships have provided BPL much valuable expertise and know-how to manufacture world-class products. The company offers significant cost advantage as a manufacturer, as the average wage in Bangladesh is probably the lowest in the world, and at least two to three times lower than that in China or India. Prospective partners can benefit themselves with competitive advantages like availability of highly skilled manpower at a very low cost, low energy cost, Govt. policy support, investor friendly environment etc. 3 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Ratio Analysis Current Ratio Current ratio is one of the most commonly financial ratios. It measures for findings the firm ability to meets its short term obligations. The current ratio is calculated as follows: Figure 1 Current Ratio Current Ratio 2 1.8 1.69 1.5 1.4 1.45 1.2 1 1.33 1.31 1.1 0.5 0 2008 2007 2006 2005 Source: Annual report of Beximco Pharma 2004 2003 2002 2001 In this graph we see that the current ratio of 2001 was 1.2 and their current asset 1784174322. In 2002 the ratio increased in 1.31 because their current asset increasing in 198226375.In 2003 ratio increase in 1.69 their current asset was increasing in 2072764870 and their liabilities decreasing in 1229860988. But in 2004 their current asset was decreasing in 1.45 because their current asset was increasing in 2471513225 but current liabilities also increasing in 1659260602. In 2005 their current ratio more was decreasing in 1.4 because their current liabilities are also decreasing with their current asset. In 2006 the current ratio was 1.33 because their current liabilities also increasing in 2527420798. In 2007 the ratio increase in 1.8 because the current asset was increasing and liabilities was decreasing. In 2008 the ratio was 1.1because the current asset of the company is decreasing and current liabilities was increasing. Quick Ratio Quick ratio is measure of liquidity calculated by dividing the firm’s current assets minus inventory by its current liabilities. 4 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) The quick ratio is calculated as follows: Figure 2 Quick Ratio Quick Ratio 1 0.89 0.72 0.8 0.76 0.6 0.65 0.58 0.52 0.63 0.4 0.43 0.2 0 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma In 2001 the company quick ratio was 0.43 their current asset 1784174322 and their inventories 1144320036. And 2002 the ratio was increase in 0.58 because their current asset & Inventories also decreasing. In 2003 the ratio was also increasing in 0.76 because their current asset was increasing in 2072764870 and their liabilities decreasing in 1229860988. But in 2004 their quick ratio was decreasing in .65 because their current asset was increasing in 2471513225 but current liabilities also increasing in 1659260602. In 2005 their quick ratio was increasing in .72 because their current liabilities are also decreasing with their current asset but their inventory was increasing 1683722059. In 2006 the quick ratio was decreasing in 0.63 because their current liabilities also increasing in 2527420798. In 2007 the ratio increase in 0.89 because the current asset was increasing and liabilities was decreasing. In 2008 the ratio was .52 because the current asset of the company is decreasing and a current liability was increasing. Inventory Turnover Inventory turnover commonly measures the activity or liquidity of a firm’s inventory. The inventory turnover is calculated as follows: 5 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Figure 3 Inventory Turnover Inventory turnover 2.5 2 2 1.72 1.5 1.46 1.33 1.34 1.28 1 1.12 1.05 0.5 0 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma Their turnover in 2001 was 1.28 and their sold 1459108308 and their inventories 1144320036. In 2002 their ratio was 11.46 because their cost of goods sold was and decreasing. In 2003 the inventory turnover increasing in 2.00 . Because the cost of goods decreasing in 1355748848 and inventory was increasing in 1143710. In 2004 their inventory was decreasing in 1.72 because their cost of goods sold was increasing in 1430590446 and inventories were decreasing in 1394794907. In 2005 their inventories decreasing in 1.05 because the cost of goods sold was increasing and inventories was decreasing . In 2006 the inventory increasing in 1.12 because the cost of goods sold increasing in1971231333 and inventories increasing 1681754440288. In 2007 the ratio increasing 1.34 and in 2008 the ratio was decreasing 1.33. Average collection period The average collection period or average age of accounts receivable is useful in evaluating credit and collection policies. The Average collection period is calculated as follows: 6 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Figure 4 Average Collection Period 100 Average Collection Period 84 80 91 86 65 60 46 51 40 42 51 20 0 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma In 2001 their average collection was 51 and the acc. Receivable was 333884395 and in 2002 the ratio increased in 65 because their acc. Receivable was increasing in 447307967. And In 2003 the ratio was in 84 because the acc receivable was increasing in 4996775766.In 2004 the ratio was increase in 91 because the acc receivable increase in 600028183. In 2005 the ratio decreasing in 86 because the acc receivable was decreasing . In 2006 the ratio decreasing in 42 because the acc receivable decreasing 430240095. In 2007 the ratio decreasing in 51and the acc receivable increases in 430240095. And 2008 the ratio again decrease in 46 because the acc receivable increase in 503916401 but the sales increase in 4010167059. Average Payment Period The average payment period or average age of acc payable is the same manner of average collection period. The average payment period is calculated as follows: 7 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Figure 5 Average Payment Period Average Payment Period 100 94 88 80 68 59 60 59 61 52 40 50 20 0 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma In 2001 their average payment was 94 and the acc. Payable was 250693220 and in 2002 the ratio decreased in 52 because their acc. Payable was decreasing in155928586. And In 2003 the ratio was in 59 because the acc Payable was decreasing in139591269.In 2004 the ratio was increase in 61 because the acc Payable increase in170176125. In 2005 the ratio decreasing in 50 because the acc Payable was decreasing . In 2006 the ratio increasing in 88 because the acc Payable increasing365255938. In 2007 the ratio decreasing in 68 and the acc Payable decrease in271814118. And 2008 the ratio again decrease in 59 because the acc Payable in 271814118 but the purchase increase in 1626964288. Total Asset Turnover The total asset indicates the efficiency with which the firm uses its assets is generating sales. The total asset turnover is calculated as follows: 8 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Figure 6 Total Asset Turnover Total Asset Turnover 0.4 0.38 0.31 0.3 0.37 0.3 0.31 0.27 0.27 0.28 0.2 0.1 0 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma In this graph show that in 2001 there was 0.38 and total asset was63060267868. In 2002 the was decrease in .37 because its total asset increase in 6762691200. The next year ratio decrease for its total asset. But in 2004 the ratio increase in 0.28. In the next two year the ratio was increase because the total asset increase but sales decrease. In 2006 and 2007 the ratio was same. In 2008 the ratios again decrease for total asset. Debt Ratio The debt ratio measures the proportion of total assets financed by the firm’s creditor. The debt ratio is calculated as follows: 9 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Figure 7 Debt Ratio Debt Ratio 50% 44% 43% 40% 38% 35% 30% 33% 34% 29% 31% 20% 10% 0% 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma The debt ratio measures the proportion of total assets financed by the firm’s creditor. In 2001 the ratio was 35% and total liabilities 2194476724. In 2002 the ratio decreases in 34% because the total liabilities decrease. The next two year the ratio increasing because their Total liabilities and total asset both were increasing. Next year the ratio was decreased for total liabilities. In 2005 the ratios decrease in 33% because the liabilities decrease in 3962592062. In 2006 & 2007 and the ratio was decreasing because the total liabilities was decreasing and the total asset increasing. Time Interest Earned Ratio The times interest earned ratio measures the firm’s ability to make contractual interest payments sometimes called the interest coverage ratio. Time interest earn ration calculated as follows: 10 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Figure 8 Time Interest Earn Ratio Time Interest Earned Ratio 4.00% 3.34% 3.00% 2.40% 2.51% 2.00% 1.84% 2.28% 2.24% 1.80% 2.02% 1.00% 0.00% 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma This graph shows that in 2001 the ratio was 2.51% and the EBIT 430420451. In 2002 & 2003 the was decreasing in 2.24% & 1.84% because the EBIT was decreasing. In 2004 it increasing in 2.02% and EBIT also increase in 318588184. The next year the ratio was increasing . The next two years the ratio was decreasing with its EBIT. In 2008 the ratio was increasing in 3.34% because the EBIT was increasing in 714121010. Gross Profit Margin The gross profit margin measures the percentage of each sales dollar remaining after firm has paid for its goods. The higher the gross profit margin, the better (that is the relative cost of merchandise sold). 11 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Figure 9 Gross Profit Margin Gross Profit Margin 60% 50% 47% 50% 38% 39% 40% 45% 47% 30% 40% 36% 20% 10% 0% 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma In this ratio we see that, in 2001 their company gross profit is 942132803 tk and 2002 gross profit is 888294919 tk . So graph line is fallen down in 2001 from 2002. Because of 2002 gross profit amount is lower than 2001 gross profit amount. Again, in this ratio we see that, in 2002 their company gross profit is 888294919 tk and 2003 gross profit is 828080947 tk . So graph line is fallen down in 2002 from 2003. Because of 2003 gross profit amount is lower than 2002 gross profit amount. Again, in this ratio we see that, in 2003 their company gross profit is 828080947 tk and 2004 gross profit is 972110516 tk. So graph line is grown up in 2004 from 2003. Because of 2004 gross profit amount is higher than 2003 gross profit amount. Again, in this ratio we see that, in 2004 their company gross profit is 972110516 tk and 2005 gross profit is 1558500211 tk. So graph line is grown up in 2005 from 2004. Because of 2005 gross profit amount is higher than 2004 gross profit amount. Again, in this ratio we see that, in 2005 their company gross profit is 1558500211 tk and 2006 gross profit is1731085826tk. So graph line is grown up in 2006 from 2005. Because of 2006 gross profit amount is higher than 2005 gross profit amount. 12 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Again, in this ratio we see that, in 2006 their company gross profit is 1731085826 tk and 2007 gross profit is1629514837tk. So graph line is fallen down in 2007 from 2006. Because of 2007 gross profit amount is lower than 2006 gross profit amount. Again, in this ratio we see that, in 2007 their company gross profit is 1967509975tk and 2008 gross profit is2007295878tk. So graph line is grown up in 2008 from 2007. Because of 2008 gross profit amount is higher than 2007 gross profit amount Operating Profit Margin The operating profit margin measures the percentage of each sales dollar remaining after all cost and expenses other than interest, taxes, and preferred stock di8vidends are deducted; the “pure profits” earned on each sales dollar. The operating profit margin is calculated as follows Figure 10 Operating Profit Margin Operating Profit Margin 30% 25% 25% 22% 26% 20% 22% 21% 20% 15% 20% 18% 10% 5% 0% 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma In this ratio we see that, in 2001 their company operating profit is 619649483 tk and 2002 operating profit is 545109385 tk . So graph line is fallen down in 2001 from 2002. Because of 2002 operating profit amount is lower than 2001 operating profit amount. 13 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Again, in this ratio we see that, in 2002 their company operating profit is545109385 tk and 2003 operating profit is 430082375 tk . So graph line is fallen down in 2002 from 2003. Because of 2003 operating profit amount is lower than 2002 operating profit amount. Again, in this ratio we see that, in 2003 their company operating profit is 430082375 tk and 2004 operating profit is 501273023 tk. So graph line is grown up in 2004 from 2003. Because of 2004 operating profit amount is higher than 2003 operating profit amount. Again, in this ratio we see that, in 2004 their company operating profit is 501273023 tk and 2005 operating profit is 724351718 tk. So graph line is grown up in 2005 from 2004. Because of 2005 operating profit amount is higher than 2004 operating profit amount. Again, in this ratio we see that, in 2005 their company operating profit is 724351718 tk and 2006 operating profit is746523494 tk. So graph line is grown up in 2006 from 2005. Because of 2006 operating profit amount is higher than 2005 operating profit amount. Again, in this ratio we see that, in 2006 their company operating profit is 746523494 tk and 2007 operating profit is654778147tk. So graph line is fallen down in 2007 from 2006. Because of 2007 operating profit amount is lower than 2006 operating profit amount. Again, in this ratio we see that, in 2007 their company operating profit is 654778147 tk and 2008 operating profit is 998794848 tk. So graph line is grown up in 2008 from 2007. Because of 2008 operating profit amount is higher than 2007 operating profit amount. Net Profit Margin Measures the percentage of each sales dollar remaining after all cost and expenses, have been deducted. The net profit margin is calculated as follows: 14 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Figure 11 Net Profit Margin Net Profit Margin 20% 15% 17% 15% 14% 12% 13% 14% 10% 10% 10% 5% 0% 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma In this ratio we see that, in 2001 their company EAFCS is 430420451tk and 2002 EAFCS is 362232463 tk . So graph line is fallen down in 2001 from 2002. Because of 2002 EAFCS amount is lower than 2001 EAFCS amount. Again, in this ratio we see that, in 2002 their company EAFCS is 36232463 to and 2003 EAFCS is 263618533 tk. So graph line is fallen down in 2002 from 2003. Because of 2003 EAFCS amount is lower than 2002 EAFCS amount. Again, in this ratio we see that, in 2003 their company EAFCS is 263618533 tk and 2004 EAFCS is318588184 tk. So graph line is grown up in 2004 from 2003. Because of 2004 EAFCS amount is higher than 2003 EAFCS amount. Again, in this ratio we see that, in 2004 their company EAFCS is 318588184 tk and 2005 EAFCS is 485366670 tk. So graph line is grown up in 2005 from 2004. Because of 2005 EAFCS amount is higher than 2004 EAFCS amount. Again, in this ratio we see that, in 2005 their company EAFCS is 485366670 tk and 2006 EAFCS is 523243669 tk. So graph line is grown up in 2006 from 2005. Because of 2006 EAFCS amount is higher than 2005 EAFCS amount. 15 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Again, in this ratio we see that, in 2006 their company EAFCS is 523243669 tk and 2007 EAFCS is 399677667 tk. So graph line is fallen down in 2007 from 2006. Because of 2007 EAFCS amount is lower than 2006 EAFCS amount. Again, in this ratio we see that, in 2007 their company EAFCS is 3996776677 tk and 2008 EAFCS is 714121010 tk. So graph line is grown up in 2008 from 2007. Because of 2008 EAFCS amount is higher than 2007 EAFCS amount. Earnings per Share (EPS) EPS represents the dollar amount earned on behalf of each outstanding share of common stock not the amount of earning actually distributed to shareholders. The earnings per share are calculated as follows: Figure 12 EPS EPS 10 9.08 8 6.36 7.72 6 5.26 4.33 4.67 4 3.8 3.7 2 0 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma In this ratio we see that, in 2001 their company EAFCS is 430420451tk and 2002 EAFCS is 362232463 tk . So graph line is fallen down in 2001 from 2002. Because of 2002 EAFCS amount is lower than 2001 EAFCS amount. 16 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Again, in this ratio we see that, in 2002 their company EAFCS is 36232463 tk and 2003 EAFCS is 263618533 tk . So graph line is fallen down in 2002 from 2003. Because of 2003 EAFCS amount is lower than 2002 EAFCS amount. Again, in this ratio we see that, in 2003 their company EAFCS is 263618533 tk and 2004 EAFCS is318588184 tk. So graph line is grown up in 2004 from 2003. Because of 2004 EAFCS amount is higher than 2003 EAFCS amount. Again, in this ratio we see that, in 2004 their company EAFCS is 318588184 tk and 2005 EAFCS is 485366670 tk. So graph line is grown up in 2005 from 2004. Because of 2005 EAFCS amount is higher than 2004 EAFCS amount. Again, in this ratio we see that, in 2005 their company EAFCS is 485366670 tk and 2006 EAFCS is 523243669 tk. So graph line is grown up in 2006 from 2005. Because of 2006 EAFCS amount is higher than 2005 EAFCS amount. Again, in this ratio we see that, in 2006 their company EAFCS is 523243669 tk and 2007 EAFCS is 399677667 tk. So graph line is fallen down in 2007 from 2006. Because of 2007 EAFCS amount is lower than 2006 EAFCS amount. Again, in this ratio we see that, in 2007 their company EAFCS is 3996776677 tk and 2008 EAFCS is 714121010 tk. So graph line is grown up in 2008 from 2007. Because of 2008 EAFCS amount is higher than 2007 EAFCS amount. Return on Total Assets (ROA) Measures the overall effectiveness of management in generating profits with its available assets; also called the return on investment. The return on total assets is calculated as follows: 17 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Figure 13 Return On Total Asset Return On Total Asset (ROA) 7% 6% 6% 5% 4% 4% 5% 4% 3% 4% 3% 2% 3% 3% 1% 0% 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma In this ratio we see that, in 2001 their company EAFCS is 430420451tk and 2002 EAFCS is 362232463 tk . So graph line is fallen down in 2001 from 2002. Because of 2002 EAFCS amount is lower than 2001 EAFCS amount. Again, in this ratio we see that, in 2002 their company EAFCS is 36232463 tk and 2003 EAFCS is 263618533 tk . So graph line is fallen down in 2002 from 2003. Because of 2003 EAFCS amount is lower than 2002 EAFCS amount. Again, in this ratio we see that, in 2003 their company EAFCS is 263618533 tk and 2004 EAFCS is318588184 tk. So graph line is grown up in 2004 from 2003. Because of 2004 EAFCS amount is higher than 2003 EAFCS amount. Again, in this ratio we see that, in 2004 their company EAFCS is 318588184 tk and 2005 EAFCS is 485366670 tk. So graph line is grown up in 2005 from 2004. Because of 2005 EAFCS amount is higher than 2004 EAFCS amount. Again, in this ratio we see that, in 2005 their company EAFCS is 485366670 tk and 2006 EAFCS is 523243669 tk. So graph line is grown up in 2006 from 2005. Because of 2006 EAFCS amount is higher than 2005 EAFCS amount. 18 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Again, in this ratio we see that, in 2006 their company EAFCS is 523243669 tk and 2007 EAFCS is 399677667 tk. So graph line is fallen down in 2007 from 2006. Because of 2007 EAFCS amount is lower than 2006 EAFCS amount. Again, in this ratio we see that, in 2007 their company EAFCS is 3996776677 tk and 2008 EAFCS is 714121010 tk. So graph line is grown up in 2008 from 2007. Because of 2008 EAFCS amount is higher than 2007 EAFCS amount. Return on Common Equity(ROE) Measures the return earned on the common stockholders’ investment in the firm. The return on common equity is calculated as follows: Figure 14 Return On Common Equity Return on common equity (ROE) 12% 10% 10% 8% 8% 7% 6% 6% 6% 5% 5% 4% 4% 2% 0% 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma In this ratio we see that, in 2001 their company EAFCS is 430420451tk and 2002 EAFCS is 362232463 tk . So graph line is fallen down in 2001 from 2002. Because of 2002 EAFCS amount is lower than 2001 EAFCS amount. 19 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Again, in this ratio we see that, in 2002 their company EAFCS is 36232463 tk and 2003 EAFCS is 263618533 tk . So graph line is fallen down in 2002 from 2003. Because of 2003 EAFCS amount is lower than 2002 EAFCS amount. Again, in this ratio we see that, in 2003 their company EAFCS is 263618533 tk and 2004 EAFCS is318588184 tk. So graph line is grown up in 2004 from 2003. Because of 2004 EAFCS amount is higher than 2003 EAFCS amount. Again, in this ratio we see that, in 2004 their company EAFCS is 318588184 tk and 2005 EAFCS is 485366670 tk. So graph line is grown up in 2005 from 2004. Because of 2005 EAFCS amount is higher than 2004 EAFCS amount. Again, in this ratio we see that, in 2005 their company EAFCS is 485366670 tk and 2006 EAFCS is 523243669 tk. So graph line is grown up in 2006 from 2005. Because of 2006 EAFCS amount is higher than 2005 EAFCS amount. Again, in this ratio we see that, in 2006 their company EAFCS is 523243669 tk and 2007 EAFCS is 399677667 tk. So graph line is fallen down in 2007 from 2006. Because of 2007 EAFCS amount is lower than 2006 EAFCS amount. Again, in this ratio we see that, in 2007 their company EAFCS is 3996776677 tk and 2008 EAFCS is 714121010 tk. So graph line is grown up in 2008 from 2007. Because of 2008 EAFCS amount is higher than 2007 EAFCS amount. Price/Earnings (P/E) Ratio Measures the amount that investors are willing to pay for each dollar of a firm’s earning; the higher the P/E ratio, the greater the investor confidence. The P/E ratio is calculated as follows: 20 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Figure 15 Price/Earning Ratio Price/Earning Ratio 50 40 38.73 30 20 19.12 17.51 11.5 10.74 10 5.42 9.09 5.45 0 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma In this ratio we see that, in 2001 their company outstanding share is 44250000 tk and 2004 outstanding share is 44250000 tk. So graph line is grown up in 2004 from 2003. Because of 2004 outstanding share amount is higher than 2003 outstanding share amount. Again, in this ratio we see that in 2002 their company outstanding share is 44250000 tk and 2003 outstanding share is 55976250 tk. So graph line is grown up in 2002 from 2003. Because of 2003 outstanding share amount is higher than 2002 outstanding share amount. Again, in this ratio we see that, in 2003 their company outstanding share is 55976250 tk and 2004 outstanding share is 55976250 tk. So graph line is grown up in 2004 from 2003. Because of 2004 outstanding share amount is higher than 2003 outstanding share amount Again, in this ratio we see that, in 2004 their company outstanding share is 55976250 tk and 2005 outstanding share is 76878446 tk. So graph line is outstanding share in 2005 from 2004. Because of 2005 outstanding share amount is higher than 2004 outstanding share amount Again, in this ratio we see that, in 2005 their company outstanding share is 76878446 tk and 2006 outstanding share is 100737415 tk. So graph line is fallen down in 2007 from 2006. Because of 2006 outstanding share amount is lower than 2005 outstanding share amount 21 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Again, in this ratio we see that, in 2006 their company outstanding share is 100737415 tk and 2007 outstanding share is1145070743 tk. So graph line is grown up in 2007 from 2006. Because of 2007 outstanding share amount is higher than 2006 outstanding share amount Again, in this ratio we see that, in 2007 their company outstanding share is 114507043 tk and 2008 outstanding share is 7125957757 tk. So graph line is grown up in 2008 from 2007. Because of 2008 outstanding share amount is higher than 2007 outstanding share amount Book Value Per Share Provides an assessment of how investors view the firm’s performance. Firms expected to their risk typically sell at higher M/B multiples. Book Value Per Share ratio is calculated as follows: Figure 16 Book Value Per Share Book Value Per Share 150 100 89 100 94 79 86 82 50 83 72 0 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma In this ratio we see that, in 2001 their company total share equity is 4165791144 tk and 2004 total share equity is 4441096192 tk. So graph line is grown up in 2004 from 2003. Because of 2004 total share equity amount is higher than 2003 total share equity amount. 22 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Again, in this ratio we see that in 2002 their company total share equity is 4441096192 tk and 2003 total share equity is 4596420977 tk. So graph line is fallen down in 2002 from 2003. Because of 2003 total share equity amount is lower than 2002 total share equity amount. Again, in this ratio we see that, in 2003 their company total share equity is 4596420977 tk and 2004 total share equity is 54834747661 tk. So graph line is grown up in 2004 from 2003. Because of 2004 total share equity amount is higher than 2003 total share equity amount Again, in this ratio we see that, in 2004 their company total share equity is 4834747661 tk and 2005 total share equity is 6820925052 tk. So graph line is in 2005 from 2004. Because of 2005 total share equity amount is higher than 2004 total share equity amount Again, in this ratio we see that, in 2005 their company total share equity is 6820925052 tk and 2006 total share equity is 7949920425 tk. So graph line is fallen down in 2007 from 2006. Because of 2006 total share equity amount is lower than 2005 total share equity amount Again, in this ratio we see that, in 2006 their company total share equity is 7949920425 tk and 2007 total share equity is8250939647 tk. So graph line is grown up in 2007 from 2006. Because of 2007 total share equity amount is lower than 2006 total share equity amount Again, in this ratio we see that, in 2007 their company total share equity is 8250939647 tk and 2008 total share equity is 10450202145 tk. So graph line is grown up in 2008 from 2007. Because of 2008 total share equity amount is higher than 2007 total share equity amount. Market/Book (M/B Ratio) The Market book ratio provides an assessment of how inventors view the firm’s performance. Firms expected to earn high returns relative to their risk typically sell at higher M/B ratio. Book Value Per Share ratio is calculated as follows: 23 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Figure 17 Market/Book (M/B Ratio) Market/Book (M/B Ratio) 2.5 2 2.02 1.5 1 0.82 1.07 0.65 0.42 0.5 0.68 0.53 0.48 0 2008 2007 2006 2005 2004 2003 2002 2001 Source: Annual report of Beximco Pharma In 2001 the ratio was 0.53 and market price was 49.50. In 2002 the ratio decreases in 0.42 because the market price decreases in 41.83. In 2003 and 2004 the ratio was increase in 0.48 & 1.07 because the market price was increase. In 2005 the ratio again decreases in 0.65 for the market price. In 2006 and 2007 the market price was increase in 53.70 and 58.9 so the ratio was increase in 0.68 & 0.82. And in 2008 the ratio was so high because the market price was high. The ratio was 2.02 and market price 167.7. 24 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Compeering to Others Company Figure 18 Gross Profit 60.00% 50% 47% 47% 50.00% 45% Bata Shoe 40.00% Monno Ceramics 30.00% Beximco Pharma 20.00% Square Pharma 10.00% Apex 0.00% ACI 2008 2007 2006 2005 In the gross profit Beximco Pharma has 50% on 2008, 45% on 2007, 47% on 2006 and 47% on 2005 Figure 19 Operation Profit 30.00% 25% Bata Shoe 25.00% 22% 20% 20.00% 18% Monno Ceramics 15.00% Beximco Pharma 10.00% Square Pharma 5.00% 0.00% Apex 2008 2007 2006 2005 ACI 2008 Beximco Pharams has 25%, 2007 was 18%, 2006 was 20% and 2005 was 22%. 25 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Figure 20 Net Profit Margin 25.00% Bata Shoe 20.00% 14% 15% Monno Ceramics 15.00% 13% 10% Beximco Pharma 10.00% Square Pharma 5.00% Apex 0.00% ACI 2008 2007 2006 2005 Net pofit was 14% on 2008, 10% on 2007, 13% was 2006, 2005 was 15% Figure 21 EPS 300 250 Bata Shoe 200 Monno Ceramics 150 Beximco Pharma 100 Square Pharma 50 4.33 3.8 4.67 6.36 Apex 0 ACI 2008 2007 2006 2005 EPS was 4.23 on 2008, 3.8 at 2007, 4.67 at 2006, 6.36 at 2005. Figure 22 ROA 26 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) 20.00% Bata Shoe 15.00% Monno Ceramics 10.00% Beximco Pharma 4% 3% 4% 4% 5.00% Square Pharma 0.00% Apex 2008 2007 2006 2005 ACI ROA was 2008 at 4%, 2008 3%, 2006 was 4%, 2005 was 4% Figure 23 ROE 50.00% 40.00% Bata Shoe 30.00% Monno Ceramics 20.00% Beximco Pharma 5% 4% 6% 7% 10.00% Square Pharma 0.00% 2008 2007 2006 2005 Apex In 2008 the ROE was 5%, 2007 was 4%, 2006 was 6%, 2005 was 7% Conclusion After analyzing the financial statements of Beximco Pharma we have got a scenario of Beximco Pharma. Also we have able to know about the condition of the company and its others services and products. Our main aim was to study the ratios of Beximco Pharma. From the study we can now know about the Liabilities, Assets, and Market price etc about the company. Commitment to the society is an integral part of the way they are doing business. They do not judge success in financial terms only; they value even more the deep relationship with the society we live in. Each year, a substantial amount of our earning is ploughed back into social causes, so that our society gets benefited while they continue to grow. 27 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) They donate and make available a large quantity of medicines to the victims of natural disasters, both national and international. Medicines for the victims of earthquake in Pakistan, tsunami in Sri Lanka, and cyclone SIDR in Bangladesh are a few worth mentioning. Responding to the needs of thousands of AIDS patients in the country, Beximco Pharma has been supplying ARV drugs through Dutch Bangla Bank, a leading local bank, for treating the AIDS patients in Bangladesh. These ARV drugs are distributed through Ashar Alo, Mukto Akash, and Confidential Approach to AIDS Prevention (CAAP) - NGOs working for the HIV/AIDS patients. Since its launch in March 2006, Oseflu, BPL’s brand of oseltamivir capsule, has been donated to the govt. of Bangladesh as well as different reputed organizations including ICDDR,B in response to the pandemic Avian as well as recent Swine Flu. We also supplied Oseflu® to the government of Myanmar as a part of our CSR initiatives. Form the above discussion we found that Beximco Pharma did lots of social works beside their business, and for these works many people of much country benefited for this. 28 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Appendix 2001 2002 2003 2004 Sales 2,401,241,111 2,522,942,523 2,183,829,795 2,402,700,962 Cost of goods sold 1,459,108,308 1,620,493,149 1,355,748,848 1,430,590,446 Gross Profit 942,132,803 902,449,374 828,080,947 972,110,516 Operating profit 619,649,483 545,109,385 430,082,375 501,273,023 EBIT (Net profit 430,420,451 362,232,463 263,618,533 318,588,184 before tax) EAFCS 401,779,808 341,680,048 207,140,366 294,302,934 EPS 9.08 7.72 3.70 5.26 Outstanding share 44,250,000 44,250,000 55,976,250 55,976,250 Purchase 974,327,622 1,099,665,979 860,369,105 1,019,459,244 Interest 171,404,878 161,521,864 143,159,432 157,393,995 Current asset 1,784,174,322 1,982,226,375 2,072,764,870 2,471,513,225 Inventories 1,144,320,036 1,113,539,289 1,143,710,812 1,394,794,907 Account receivable 333,884,395 447,307,967 499,677,576 600,028,183 Total shareholder 4,165,791,144 4,441,096,192 4,596,420,977 4,834,747,661 equity Current liabilities 1,490,321,573 1,509,003,009 1,229,860,988 1,659,260,602 Total asset 6,360,267,868 6,762,691,200 8,012,857,866 8,560,380,432 Total liabilities 2,194,476,724 2,321,595,008 3,416,436,889 3,725,632,771 Account payable 250,693,220 155,928,586 139,591,269 170,176,125 Market Price 49.50 41.83 39.72 92.10 29 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) 2005 2006 2007 2008 Sales 3,327,022,574 3,702,317,159 3,597,024,812 4,010,167,059 Cost of goods sold 1,768,522,363 1,971,231,333 1,967,509,975 2,002,871,181 Gross Profit 1,558,500,211 1,731,085,826 1,629,514,837 2,007,295,878 Operating profit 724,351,718 746,523,494 654,778,147 998,794,848 EBIT (Net profit 485,366,670 523,243,669 399,677,667 714,121,010 before tax) EAFCS 489,261,764 470,658,563 353,067,878 545,341,273 EPS 6.36 4.67 3.08 4.33 Outstanding share 76,878,446 100,737,415 114,507,043 125,957,747 Purchase 1,592,257,330 1,521,651,955 1,459,653,540 1,626,964,288 Interest 202,541,434 229,719,450 222,581,780 214,066,707 Current asset 3,495,849,163 3,357,393,266 2,923,775,458 2,861,891,654 Inventories 1,683,722,059 1,754,440,288 1,470,152,242 1,505,288,093 Account receivable 779,798,943 430,240,095 499,680,792 503,916,401 Total shareholder 6,820,925,052 7,949,920,425 8,250,939,647 10,450,202,145 equity Current liabilities 2,501,824,568 2,527,420,798 1,627,972,936 2,602,032,267 Total asset 10,945,479,980 11,912,512,487 11,953,418,940 14,819,665,441 Total liabilities 4,124,554,928 3,962,592,062 3,702,479,293 4,369,463,296 Account payable 216,660,743 365,255,938 271,814,118 263,176,822 Market Price 57.80 53.70 58.9 167.7 Ratio/Year 2001 2002 2003 2004 2005 2006 2007 2008 Current ratio 1.20 1.31 1.69 1.45 1.40 1.33 1.80 1.10 Quick ratio 0.43 0.58 0.76 0.65 0.72 0.63 0.89 0.52 Inventory turn over 1.28 1.46 2.00 1.72 1.05 1.12 1.34 1.33 Average collection 51 65 84 91 86 42 51 46 period days days days days days days days days Average payment 94 52 59 61 50 88 68 59 period days days days days days days days days Total asset turnover 0.38 0.37 0.27 0.28 0.30 0.31 0.31 0.27 Debt ratio 35% 34% 43% 44% 38% 33% 31% 29% Time interest earned 2.51% 2.24% 1.84% 2.02% 2.40% 2.28% 1.80% 3.34% 30 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) ratio Gross profit margin 39% 36% 38% 40% 47% 47% 45% 50% Operating profit 26% 22% 20% 21% 22% 20% 18% 25% margin Net profit margin 17% 14% 10% 12% 15% 13% 10% 14% EPS 9.08 7.72 3.70 5.26 6.36 4.67 3.80 4.33 ROA (Return on total 6% 5% 3% 3% 4% 4% 3% 4% asset) ROE (Return on 10% 8% 5% 6% 7% 6% 4% 5% common stock equity) P/E Ratio 5.45 5.42 10.74 17.51 9.09 11.50 19.12 38.73 Book Value 94 100 82 86 89 79 72 83 M/B Ratio 0.53 0.42 0.48 1.07 0.65 0.68 0.82 2.02 31 Analyzing the Annual Report of Beximco Pharma Ltd. (2001- 2008) Reference 1. Annual report of Beximco Pharma (2001-2008) 2. www.beximco-pharma.com 3. www.dse.com.bd 32