Welcome to our presentation

Topic: Financial Ratios Analysis of Square Pharmaceuticals

Group Members

Md. Faruk Hossain 1407030

Ahmed Istiaq Murad 1407076

Konok Kumar Mondal 1407016

Rawful Al amin 1407052

Introduction :Performance analysis and evaluation of a company is usually

related to how well a company can use it assets, share holder equity and liability, revenue and expenses. Financial ratio analysis is one of the best tools of performance evaluation of any company. It measures the company’s overall efficiency and performance. It determines of share market condition of the company.

Square Pharmaceuticals • SQUARE Pharmaceuticals Limited is the largest

pharmaceutical company in Bangladesh and it has been continuously in the 1st position among all national and multinational company since 1985.

• 1958: Debut of SQUARE Pharma as a Partnership Firm. • 1964: Converted into a Private Limited Company. • 1991: Converted into a Public Limited Company • 2004: SQUARE enlisted as UNICEF's global supplier• 2015: PAI (Pre Approval Inspection) by US FDA was

successful for Dhaka Site’s solid dosage Unit. WHO approved square’s GMP.

Financial Analysis:• Assessment of the firm’s past, present and

future financial conditions.• Done to find firm’s financial strengths and

weaknesses• Primary Tools:

– Financial Statements– Comparison of financial ratios to past,

industry, sector and all firms

Types of Ratios – Liquidity Ratios

• Assess ability to cover current obligations

– Activity (Turnover) Ratios• Assess amount of activity relative to amount of resources

used

– Financial Leverage Ratios• Assess ability to cover long term debt obligations

– Profitability Ratios• Assess profits relative to amount of resources used

Particulars 31-03-2015 31-03-2014 31-03-2013 31-03-2012 31-03-2011

ASSETS:          

Non-Current Assets:          

Property Plant and Equipment-Carrying Value 18009200507 13933689469 9322186497 8767827062 6981559781

Deferred Tax Assets 75167249 --- --- --- ---

Capital Work-in-Progress 207629864 3256802171 3718326254 1274390572 887584197

Investment - Long Term (at Cost) 251599097 147694430 3821121331 3971022723 4031751281

Investment - Associates Undertaking 6036139963 5364154708 --- --- ---

Investment in Marketable Securities (Fair Value) 879249484 844360472 589313880 695037397 521300555

Total Non-Current Assets 25458986164 23546701250 17450947962 14708277754 12422195814

Current Assets:          

Inventories 3310086668 2737085779 2503683240 2687818472 2541688329

Trade Debtors 894543303 766634978 800974912 808311714 772421345

Advances Deposits and Prepayments 750169066 671749541 650380369 577156445 523991079

Short Term Loan 885185428 1161185776 1109251152 2085300110 2813811332

Cash and Cash Equivalents 3892185634 2162717207 932407871 586920267 370301755

Total Current Assets 9732170099 7499373281 5996697544 6745507008 7022213840

TOTAL ASSETS 35191156263 31046074531 23447645506 21453784762 19444409654

Balance sheet

SHAREHOLDERS' EQUITY AND LIABILITIES:          

Shareholders' Equity:          

Share Capital 5542991520 4819992630 3707686640 2648347600 1961739000

Share Premium 2035465000 2035465000 2035465000 2035465000 2035465000

General Reserve 105878200 105878200 105878200 105878200 105878200

Tax Holiday Reserve --- 406231702 --- --- 1101935237

Gain on Marketable Securities (Unrealized) 265332813 449255557 297945485 399421439 259435115

Retained Earnings 23143634751 18922758840 12697770859 11077772016 8353256438

Non Controlling Interest -1669864 9369803 --- --- ---

Total Shareholders Equity 31093302284 26739581929 18844746184 16266884255 13817708990

Non-Current Liabilities:          

Long Term Loans - Secured 659147818 1183627923 313421158 508778060 655645734

Deferred Tax Liability 891357959 718957750 497039909 425187602 302865504

Total Non-Current Liabilities 1550505777 1902585673 810461067 933965662 958511238

Current Liabilities:          

Short Term Bank Loans --- 131104817 1112694131 2016551125 2627483864

Long Term Loans-Current Portion 257154669 461433822 511504034 477141480 478199933

Trade Creditors 254773030 217855755 1086097881 875431555 733369218

Liabilities for Expenses 43002246 20518598 109604834 95361435 79499584

Liabilities for Other Finance 1994088121 1563624134 972537375 788449250 749636827

Total Current Liabilities 2549018066 2394537126 3792438255 4252934845 4668189426

TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 35191156263 31046074531 23447645506 21453784762 19444409654

Balance sheet cont’d

Gross turnover 30833571248 26945687557 20742746372 18592856236 15576487536

Net turnover 26684573116 23268413217 17959489496 16054425243 13471424469

Cost of goods sold 14942870155 12960738683 10223478073 9167253620 7703661010

Gross profit 11741702961 10307674534 7736011423 6887171623 5767763459

Profit from operations 7049611578 5967653270 3852810574 3321146713 2751605397

Bank Interest 158614307 177131396 325281016 433581036 268849071

Profit before tax 6963547022 5912348302 4481047443 3978939088 3414752310

Total Income after interest and tax 5797713593 5081928495 3239948829 3037696965 2624537639

Earnings Per Share (EPS) 10.8 8.92 9.01 7.82 129.07

Number of Shares used to compute EPS 554299152 554299152 370768664 370768664 19617390

Total Receipts 30722397162 27073653067 21155520854 19082697489 13619603237

Purchase 11025935136 9484660368 7313390135 6951917263 5972234287

Dividend Paid 1445997789 926921660 662086900 588521700 528160500

Statement of Income:

Years 31-03-

2011

31-03-

2012

31-03-

2013

31-03-

2014

31-03-

2015

Ratio 1.504 1.586 1.581 3.131 3.818

Current Ratio:

Current Ratio = Current assets /Current liabilities

Years 31-03-

2011

31-03-

2012

31-03-

2013

31-03-

2014

31-03-

2015

Ratio 0.959 0.954 0.921 1.988 2.519

Quick ratio or acid test:Quick ratio = (Current asset- inventories)/Current liabilities

Years 31-03-

2011

31-03-

2012

31-03-

2013

31-03-

2014

31-03-

2015

Ratio 29.83 30.35 22.42 19.86 17.44

Accounts receivable turnover:

Accounts receivable turnover = Sales / Accounts receivable

Years 31-03-

2011

31-03-

2012

31-03-

2013

31-03-

2014

31-03-

2015

Ratio 12.07 11.86 16.06 18.13 20.64

Average collection periodAverage collection period = 360 days / Accounts receivable turnover

Years 31-03-

2011

31-03-

2012

31-03-

2013

31-03-

2014

31-03-

2015

Ratio 3.03 3.41 4.08 4.74 4.51

Inventory Turnover Ratio:

Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory

Years 31-03-

2011

31-03-

2012

31-03-

2013

31-03-

2014

31-03-

2015

Ratio 8.14 7.44 6.73 43.54 43.28

Accounts Payable turnover

Accounts Payable turnover = Purchase / Accounts Payable

Years 31-03-2011 31-03-2012 31-03-2013 31-03-2014 31-03-2015

Ratio 44.21 45.33 53.46 8.27 8.32

Accounts Payable turnover

Accounts Payable turnover in days = 360 days / Accounts Payable turnover

Years 31-03-

2011

31-03-

2012

31-03-

2013

31-03-

2014

31-03-

2015

Ratio 1.22 1.26 1.37 1.65 1.46

Fixed asset turnover ratio

Fixed asset turanover = Sales / Net fixed asset

Years 31-03-

2011

31-03-

2012

31-03-

2013

31-03-

2014

31-03-

2015

Ratio 13.4976 14.1592 13.8178 16.3689 16.4749

Total asset turnover ratio

Total asset turnover = Sales / Total asset

Years 31-03-

2011

31-03-

2012

31-03-

2013

31-03-

2014

31-03-

2015

Ratio 21.7268

21.8405

18.0403

21.8404

21.726

Net Profit Margin

Net Profit margin = Net profit after tax/sales*100

Years 31-

03-

2011

31-

03-

2012

31-

03-

2013

31-

03-

2014

31-

03-

2015

Ratio 42.8148

42.8988

43.0747

44.299

44.0018

Gross Profit Margin ratioGross profit margin ratio= Gross

profit/sales*100

Years 31-03-

2011

31-03-

2012

31-03-

2013

31-03-

2014

31-03-

2015

Ratio 16.4749 16.3689 13.8178 16.3689 16.4749

Return on asset ratio

Return on Total Assets = Net profits after taxes / total assets*100

Years 31-03-

2011

31-03-

2012

31-03-

2013

31-03-

2014

31-03-

2015

Ratio 25.3481 24.7840 24.9508 25.409 26.0957

Operating Profit Margin:Operating Profit Margin = Operating

profits / Sales

Years 31-03-

2011

31-03-

2012

31-03-

2013

31-03-

2014

31-03-

2015

Ratio 12.7014 9.1769 13.7759 33.3783 43.902

4

Time interest earned ratioTime interest earned = Earnings

before interest tax / Interest charged

Conclusion• First, we analysis the liquidity measures indicates that

current ratio is bad condition for any companies.• Second, we analysis all efficiency measures ,account

receivable turnover, average collection period ,inventory turnover, account payable turnover, fixed assets turnover, total asset turnover.

• Third, we analysis is profitability measures indicates the different kind of ratio.

• Overall, net profit margin is found rising for square pharmaceutical company and plummeting for the square pharmaceutical company during 2011-2015.

•