b financial mgt

7/27/2019 B Financial mgt

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Ratio Analysis Of Beximco Pharmaceuticals LTD

Course Title: Financial Management.

Course Coe :MBA !""

#u$mitte To:

Dr. Cho%hury #aleh Ahme

#u$mitte By:

#aam &ossain Fahim

'D (O : ")"")*+

MBA

Date of #u$mission:

INDEPENDENT UNIVERSITY BANGLADESH ( I U

B )

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TABLE OF CONTENTS

SL NO. Particulars Pa! NO.

"# Curr!$t Rati% &

"' uic Rati% &

"& D!*t+T%+E,uit- Rati%

" D!*t+T%+T%tal+Ass!t Rati%

"/ R!c!i0a*l! Tur$%0!r Rati%

"1 I$0!$t%r- Tur$%0!r Rati%

"2 T%tal Ass!t Tur$%0!r Rati% /

"3 A0!ra! C%ll!cti%$ P!ri%4 /

"5 R!tur$ %$ I$0!st6!$t (ROI) /

#" R!tur$ %$ E,uit- (ROE) /

#. Curr!$t rati%7Current ratio shows how a company manages its current asset over short

term liability. Current ratio provides the best single indicator of the extent to which the

claims of short term creditors are covered by assets that are expected to be converted to

cash fairly quick, it is the most commonly used measure of short term solvency.

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Beximco pharmaceutical has curr!$t rati% #." ti6!s i$ '"#"8 #.&& ti6!s i$ '"## a$4

#.3" ti6!s i$ '"#'.t!s ratio is basically sound in 2""# than lower ratio in 2""$. %he higher

the current ratio, the greater the ability to pay its bills however increasing &iquidity shows

the poor management in sales and investment. But Beximco has moderate current ratio in

2""#. 'o the company is efficient to manage its asset over current liability.

'. uic9Aci4 t!st rati%7(uick)acid test ratio measure of the firm!s ability to pay off

short*term obligations. +or pay off short*term obligation uic9aci4 t!st rati% measure

without relying on the sale of inventories is important. Because inventories are typically the

least liquid of the firm!s current asset. enerally 1 or more than 1 is good for the firms.

Beximco has uic9aci4 t!st rati% ".2' ti6!s i$ '"#"8 ".1& ti6!s i$ '"## a$4 ".23

ti6!s i$ '"#'. -t first it was decreasing but again increasing in 2""#. (uick ratio is more

conservative than current ratio and also measures how much the company fulfils over T.#

short*term liability. Beximco has less liquidity. 'o the company can not pay the short*term

liability accurately. 'o Beximco need to more concentrate on their efficient management to

pay off short term liability.

&. D!*t+T%+E,uit- Rati%7 %he Company has decreasing 4!*t t% !,uit- rati% 1".2: i$ '"#"

5.3: i$ '"## a$4 .32: i$ '"#'. %his ratio tells how much creditors are financing over tk.

1. %he lower the ratio, the higher the level of the firms financing that is being provided by the

shareholders. Beximco harma!s ratio is lower in '"#'than others so it would not experience

difficulty.

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. D!*t+T%+T%tal+Ass!t Rati%7 %his ratio shows the percentage of the firm!s asset that is

supported by debt financing. %he lower this ratio, the lower the financial risk. Beximco has

&2.13: i$ '"#"8 &&.'1: i$ '"##8 a$4 &".52: i$ '"#' debt to total asset ratio. 'o the

decreasing ratio is good for the company.

/. R!c!i0a*l! Tur$%0!r Rati%7 %his ratio tells us the quality of the firm!s receivables and

how successful the firm is in its collection. %he higher the turnover, the shorter the time

between the typical scale and cash collection. %his company has tur$%0!r .'2 ti6!s i$

'"#"8 3.1#ti6!s i$ '"##8 a$4 2.'" i$ '"#'.it increased in 2"11 but again decrease in 2"12.

'o it is slower and not satisfactory because median of this ratio is 3.# ti6!s.

1. I$0!$t%r- Tur$%0!r Rati%7 %his ratio determines how effectively the firm managing

inventory. %he higher the inventory turnover, the more efficient the inventory management.

Beximco Company hasI$0!$t%r- Tur$%0!r Rati% #."/ ti6!s i$ '"#"8 #.#' ti6!s i$ '"##

a$4 #.#5 ti6!s i$ '"#'. %he company!s turnover is increasing than other years so it is

better in managing inventory.

2. T%tal Ass!t Tur$%0!r Rati%7 %his ratio tells us how much revenue is earned over each

taka and relative efficiency with which a firm utili0es its total asset to generate sales. %his

company has".&" ti6!s i$ '"#"8 ". ti6!s i$ '"## a$4 ".&" ti6!s

i$ '"#'. %he median of this ratio is #.11 ti6!sand if it is higher then it is good. %his

Company has decreasing ratio so it is not good.


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3. A0!ra! C%ll!cti%$ P!ri%47 %his ratio shows how quickly a firm collects its receivables.

-s slow it is as it is better. %he median of this is / 4a-s. f it is higher than this then it is

bad. Beximco pharmaceutical!s c%ll!cti%$ ;!ri%4 3 4a-s i$ '"#"8 ' 4a-s i$ '"## a$4 /"

4a-s i$ '"#'. 'o the company!s recent -verage Collection eriod is not good.

5. R!tur$ %$ I$0!st6!$t (ROI)7 %his ratio measures how much profitability the firm has

used to return its asset. %he Company earned R!tur$ %$ I$0!st6!$t .2: i$ '"#"8

&.5/: i$ '"##a$4 '.5/: i$ '"#'. f it shows higher than 2 then it is good. But it is

decreasing inadequately so it is not good.

#". R!tur$ %$ E,uit- (ROE)7 %his ratio shows the earning power on shareholder!s

investment. - high return on equity reflects the firm!s acceptance of strong investment

opportunity and effective expense management. Beximco has 2.#2: i$ '"#"8 /.5': i$

'"## a$4 .'3: i$ '"#'. But the company!s return is decreasing. 'o it is dissatisfactory.

b financial mgt

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