ambee and beacon pharmaceuticals (financial report analysis)
TRANSCRIPT
1 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Beacon Pharmaceuticals
Ambee Pharmaceuticals
Introduction to Financial Management
Course Instructor
Shahidullah (Slh)
Lecturer,
School of business and Economics (SBE).
North South University
Fin 254 Section: 18
Report on
2 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Group Members
Names Id
Ashraf Ali Parvez 143 0979 630
Junayed Hossain 151 2800 630
Md. Asfiqur Alam 151 2804 030
Abid Hasan 151 0654 630
Date of Submission: 03-12-2015
3 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Acknowledgement
We would like to thank almighty. And group members for their constant hard work,
encouragement and contribution without which this report would not be possible
We would like to express our deepest appreciation and a special gratitude to our course instructor
SHAHIDULLAH who provided us the Opportunity to complete this report. Whose contribution
in stimulating suggestions, guidance, and encouragement helped us to coordinate our project
especially in writing this report. The blessing, help and guidance given by him time to time shall
carry us a long way in the journey of life on which we are about to embark.
We also would like to thank the staff members of DHAKA STOCK EXCHANGE, who helped
us to collect all the information, we had requested.
4 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
LETTER OF TRANSMITTAL
December 03, 2015.
SHAHIDULLAH
Fin254 Section: 11,
School of Business and Economics (SBE),
North South University.
Subject: Report on Ambee Pharmaceuticals and Beacon Pharmaceuticals.
Dear Sir,
We are pleased to submit the report on “Ambee Pharmaceuticals and Beacon
Pharmaceuticals’. This could be helpful for any students, employee and company related people
to know about the company for many perspectives. According to your advice, we have
completed the report on company of our own selected organization “Ambee Pharmaceuticals and
Beacon Pharmaceuticals”. We have analyzed the company to get a sound output as per your
direction we have tried our best to high light our finding through this report. We sincerely hope
that this report all the requirement suggest by you for the course Fin254.
We thank you sir for giving the opportunity to work on a report. This report will tell us about
insight of professional life. We will always be obliged to answer any kind of queries on this
report.
Thank you,
Sincerely yours,
Group members.
5 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
EXECUTIVE SUMMARY
The pharmaceutical has grown in the last two decades at a considerable rate. The knowledge and
skills of the professionals and innovative ideas of the individuals who are involved in this
industry are the key factors for these developments. Through this report we have analyzed only
to Pharmaceuticals Company, AMBEE PHARMACEUTICALS and BEACON
PHARMACEUTICALS. We have analyzed present market value of these company, their
product lines, production facility, marketing and distribution channels, ratios, cross sectional and,
time series analysis. Our findings mainly focuses on the financial situation of the company.
6 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Table of Contents
Executive Summary ........................................................................................................................ 5
Pharmaceuticals INDUSTRY in Bangladesh ................................................................................. 7
Local Market Overview .................................................................................................................. 7
AMBEE PHARMACEUTICALS ............................................................................................... 8
Company Profile ......................................................................................................................... 8
Product line ................................................................................................................................. 9
THE MARKETING, SALES & DISTRIBUTION (MSD) ...................................................... 10
Manufacturing ........................................................................................................................... 10
Financial ratio analysis of Ambee Pharmaceuticals .................................................................. 11
Time series analysis of Ambee Pharmaceuticals ...................................................................... 19
Beacon Pharmaceuticals ............................................................................................................. 21
Company profile ........................................................................................................................ 21
Mission ...................................................................................................................................... 21
Vision ........................................................................................................................................ 21
Values ........................................................................................................................................ 22
Goals.......................................................................................................................................... 22
Products ..................................................................................................................................... 22
Financial ratio analysis of Beacon Pharmaceuticals ................................................................. 23
Time series analysis of Beacon Pharmaceuticals ...................................................................... 32
Cross sectional analysis of ‘Ambee and Beacon’ pharmaceuticals .............................................. 34
Conclusion .................................................................................................................................... 36
References ..................................................................................................................................... 37
7 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
PHARMACEUTICALS INDUSTRY IN BANGLADESH
The pharmaceutical industry in Bangladesh is considered as one of the most developed
technology sectors within Bangladesh. Manufacturers produce various kinds of products like
insulin, hormones, and cancer drugs. This sector provides 97% of the total medicinal requirement
of the local market as well as a huge number of products is being exported to different countries.
The industry exports medicines to global markets which includes Europe. Pharmaceutical
companies are expanding their business to expand the export market of Bangladesh.
LOCAL MARKET OVERVIEW
In Bangladesh, The pharmaceutical marketplace is predominantly a generic marketplace. Firms
in Bangladesh can either sell products to the private sector pharmacies, to the government and its
public health care facilities, or to international organizations operating in Bangladesh.
Bangladesh pharmaceutical industry is mainly subjugated by domestic manufacturers. The local
companies are enjoying more market share reaching around 97%, while the MNCs are having a
relatively low market share.
8 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
AMBEE PHARMACEUTICALS
Company Profile:
AMBEE PHARMACEUTICALS LTD. was founded in 1976 in Bangladesh. This company was
registered under the companies Act, 1913 and started operation in Bangladesh on 4th February
1976. Ambee is a joint venture with Medimpex of Hungary, a multinational company. Ambee
has collaboration with a 17 joint ventured products and is now running with 76 products. They
have tablets, capsules, liquids, gel and injectables. Ambee was listed in Dhaka Stock Exchange
in 1986 named as AMBEEPHA.
Ambee aims to achieve business excellence through quality by satisfying customer expectations.
They follow Quality Management System to ensure consistent quality of products. Follow Good
Manufacturing Practices (GMP) which is recommended by World Health Organization (WHO)
for its pharmaceutical operations.
Ambee Pharmaceuticals Ltd. became an ISO 9001 certified company in in 2001. ISO 9001
certificate is an international recognition of the quality management system of this organization
that complies with the standard of ISO 9001 system. This is a certificate which was awarded by
United Registrar of Systems Ltd. (URS) of UK. Among 250 pharmaceutical companies only few
have become ISO 9001 certified and Ambee is one of them.
9 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Product line
TABLET CAPSULES LIQUID TUBE INJECTION Aces Plus
Tablet Aluctin Capsule
Act Paediatric
Drop Cinon Cream Antac Injection
Act Tablet Ambeeclox
Capsule Act Suspension
Fungakil
Cream Arolak Injection
Act Plus Tablet Ambeexin
Capsule Actizen Syrup
Fungakil
Ointment Arolak Injection
Actizen Tablet Doxillin Capsule Adorex Paediatric
Drop Hitflam Gel Hitflam Injection
Adorex Tablet FerritinTR
Capsule
Adorex
Suspension
Perol Injection
Afuvin Tablet Fluxin Capsule Ambeexin
DrySyrup
Vitex Injection
Ametrol-VT
Tablet Fluxin Capsule
Ambeexin
Paediatric Drop
Ambeecal
Tablet Lap Capsule Antac Syrup
Ambeecal-D
Tablet Mycef Capsule Codex Syrup
Anetol Tablet OM Capsule Dextromethorphan
Elixir
Antac Tablet OM Capsule Fluxin DrySyrup
A-Rox Tablet Tricef Capsule MycefPaediatrc
Drop
A-Rox Tablet Vitex Capsule Mycef Powder
For Suspension
Arolak Tablet Mycin Suspension
Calcitate Tablet Nalidex
Suspension
C-bon Tablet Nilkof Syrup
Cerenin Tablet Progan Elixir
Hiflox Tablet Stomacid
Suspension
Hiflox Tablet Triben Suspension
Hitflam Tablet Tricef Suspension
Hitflam-Sr
Tablet
Vitex Syrup
Lexlo Tablet Vitex Syrup
Lexlo Tablet Zinc-S Syrup
Lotas Tablet
10 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
THE MARKETING, SALES & DISTRIBUTION (MSD)
Their excellent Management team has enabled the company to be a dominant in the
pharmaceutical market .The company has so far launched various products like antibiotics, anti
ulcerants, psychotropics, antacids, gel, vitamins and injectables. The MSD is fully staffed by
Product Manager, Sales Manager, Regional Sales Manager, Area Field Manager, and Medical
Promotion Officer & Distribution-Personnel.
Manufacturing
A group of skilled employees, 194 in number have been discharging their labor and talent for
producing 120 life-saving drugs and medicines. Currently their produced products are:
Sl. No. Form of Products Quantity (Pcs.)
01 Tablets 400 million
02 Capsules 44 million
03 Injections 10 million
04 Dry Syrup 01.20 million
05 Liquid Products 13 million
06 Cream, Ointments & Gel 01 million
07 Sugar Coated Products 105 million
11 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Financial ratio analysis of Ambee Pharmaceuticals
FINANCIAL DATA Abmee Pharma
Items 2010 2011 2012 2013 2014
Current Asset 228971790 228036273 227132817 291152854 367342889
Current Liabilities 228587032 223143759 218500388 277874541 350644649
Invetories 117206304 120593022 119872967 133329534 183503117
Cost of goods sold 124702163 124345440 132352513 163324226 161807685
Accounts Recievable 44592065 46380934 42992309 73261782 81641418
Accounts Payable 9963601 11122798 10495497 10102225 10201250
Purchase 81913698 102316683 106617083 150621839 184798176
Average purchases per day 224421.0904 280319.6795 292101.5973 412662.573 506296.373
Sales 268488269 271506761 281084880 342972431 344038325
Average Sales per Day 735584.2986 743854.1397 770095.5616 939650.496 942570.753
Total Assets 286392086 282497803 278833632 339961783 417067240
Total Liabilities 237599093 232089100 226554553 286382329 358964615
Earnings Before Interest and Taxes (EBIT) 10078786 101397776 10025406 12442182 10390234
Interest Expense
Gross Profit 143786106 147161321 148732367 179648205 182230640
Operating Expense 133176858 136487873 139207905 167206023 152874899
Operating Profit 10078786 101397776 10025406 12442182 10390234
Earnings Available for Common Stockholders (Net Profit) 7368129 7615710 7870376 7900375 7523172
Number of Shares of Common Stock Outstanding 2000000 2000000 2000000 2000000 2400000
Common Stock Equity 20000000 20000000 20000000 20000000 20000000
Market Price per Share of Common Stock 497.2 424 226.7 259 250
Book Value per Share of Common Stock Outstanding 135.11 111.29 57.54 78.72 79.87
EPS 3.6840645 3.807855 3.935188 3.950188 3.134655
Book Value per Share of Common Stock Outstanding 10.00 10.00 10.00 10.00 8.33
12 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
LIQUIDITY RATIO A) Current Ratio= Current assets / Current liabilities
Current ratio indicates the extent to which current liabilities are covered by current assets.
Therefore a lower value for current ratio means that Ambee Pharmaceuticals Company can
barely generate enough money to meet its short-term liquidity requirements implicating a
shortage immediate cash.
Items 2010 2011 2012 2013 2014
Current Assets 367342889 291152854 227132817 228036273 228971790
Current Liabilities 350644649 277874541 218500388 223143759 228587032
Current Ratio 1.0476215 1.0477853 1.0395076 1.0219254 1.0016832
B) Quick Ratio = (Current Assets-Inventories) / Current Liabilities
Items 2010 2011 2012 2013 2014
Current Assets 367342889 291152854 227132817 228036273 228971790
Inventory 81641418 73261782 119872967 120593022 117206304
Current Liabilities 350644649 277874541 218500388 223143759 228587032
Quick ratio 0.8147892 0.7841347 0.4908909 0.4814979 0.4889406
Interpretation: Quick ratio takes account into the most liquid assets only. Ambee
Pharmaceuticals quick ratio is greater in the year 2010 and 2011 than that of the other year,
which occurred due to a sharp rise in the value of current liabilities. Current asset on the other
hand proliferated significantly causing the change in quick ratio to be minimal.
13 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
ACTIVITY RATIO A) Inventory Turnover = Cost of Goods Solds / Inventory
Items 2010 2011 2012 2013 2014
Cost of Goods Sold 161807685 163324226 123352513 124345440 124702163
Inventory 81641418 73261782 119872967 120593022 117206304
Inventory Turnover 1.9819313 2.2293237 1.0290269 1.0311164 1.0639544
Interpretation: Inventory turnover refers to the number of times a particular asset is turns over to scale
during the period. Ambee’s inventory turnover has decreased year by year due to bad financial
performance.
B) Average collection
Period =
Accounts Receivables / (Annual sales/365)
Account receivables / Average sales per day
Items 2010 2011 2012 2013 2014
Accounts Receivables 44592065 46380934 42992309 73261782 81641418
Average Sales per day 735584.299 743854.14 770095.562 939650.496 942570.753
Average collection Period = 60.621284 62.352189 55.827239 77.967055 86.615692
Interpretation: The Company has shown better average collection period in recent years,
14 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
C) Average age of
inventory=
365 / inventory turnover
Items 2010 2011 2012 2013 2014
Inventory Turnover 1.9819313 2.2293237 1.0290269 1.0311164 1.0639544
Average age of inventory 223675.12 200717.21 328419.09 330391.84 321113.16
Average age of inventory= 184.1638 163.72678 354.70404 353.98525 343.05982
Interpretation: Average age of inventory has better results in 2012-2014.
D) Average payment period Accounts Payable / Average Purchase day
= Accounts Payable / (Annual purchase / 365)
Items 2010 2011 2012 2013 2014
Accounts Payable 9963601 11122798 10495497 10102225 10201250
Average purchase per day 81913698 102316683 106617083 150621839 184798176
Average payment period= 44.396901 39.678977 35.930981 24.480594 20.148772
Interpretation: The average payment period has drastically fallen between the years of 2013-
2014.
DEBT RATIO Debt ratio=
Total liabities / Total assets
Items
2010 2011 2012 2013 2014
Total Liabilities
237599093 232089100 226554553 286382329 358964615
Total Assets
286392086 282497803 278833632 339961783 417067240
Debt Ratio:
0.8296287 0.8215607 0.812508 0.842396 0.860688
15 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Interpretation: Debt ration measures the percentage of funds provided by creditors. It has shown
better results consistently,
PROFITABILITY RATIO
A) Gross profit margin = Gross profit / sales
Items 2010 2011 2012 2013 2014
Gross Profit 143786106 147161321 148732367 179648205 182230640
Sales 268488269 271506761 281084880 342972431 344038325
Gross profit margin = 0.5355396 0.5420172 0.5291368 0.523798 0.529681
Interpretation: It says for every Tk. 100 of sales the company generated a gross profit of 52%.
Bad results compared to 2010-2011.
B) Operating profit margin= Operating profit / sales
Items 2010 2011 2012 2013 2014
Operating Profit
10078786 101397776 10025406 12442182 10390234
Sales 268488269 271506761 281084880 342972431 344038325
Operating Profit 0.037539 0.3734632 0.0356668 0.036277 0.030201
Interpretation: It says for every Tk. 100 of sales the company generated a gross operating profit
of 3% which indicates that company might face problem in long run.
16 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
C) Net profit margin= Net profit / sales
Items 2010 2011 2012 2013 2014
Net profit Sales
7368129 7615710 7870376 7900375 7523172
268488269 271506761 281084880 342972431 344038325
Net profit margin= 0.027443 0.0280498 0.028 0.023035 0.021867
Interpretation: It says for every Tk. 100 of sales the company generated a Net profit of 2%. This
is a bad indicator for the company.
D) Earnings per share= Net profit / Number of shares of common Stock outstanding
Items 2010 2011 2012 2013 2014
Earnings Available for Common
Stockholders (Net Profit)
7368129 7615710 7870376 7900375 7523172
Number of Shares of Common
Stock Outstanding
2000000 2000000 2000000 2000000 2400000
Earnings per share= 3.6840645 3.807855 3.935188 3.950188 3.134655
Interpretation: For each share the company generated a net profit of Tk. 313 in 2014 which is
lowest among other years.
E) Return on total aseest (ROA)= Net profit / Total asset
Items 2010 2011 2012 2013 2014
Net
profit
7368129 7615710 7870376 7900375 7523172
Total Assets 286392086 282497803 278833632 339961783 417067240
Return on total aseest (ROA)= 0.0257274 0.0269585 0.0282261 0.023239 0.018038
Interpretation: Return on asset decreased compared to the earlier years.
17 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
F) Return on equity= Total asset / Common stock equity
Items 2010 2011 2012 2013 2014
Total Assets 286392086 282497803 278833632 339961783 417067240
Common Stock Equity
20000000 20000000 20000000 20000000 20000000
Return on total assets (ROA) 14.319604 14.12489 13.941682 16.99809 20.85336
Interpretation: Return on equity is higher than the other years.
MARKET RATIO:
A) Price earnings ratio= Market price per share of stock / Earnings per share
Items 2010 2011 2012 2013 2014
Market Price per Share of Common Stock
497.2 424 226.7 259 250
EPS 3.684065 3.807855 3.935188 3.950188 3.134655
Price earnings ratio= 134.96 111.34878 57.60843 65.5665 79.75359
Interpretation: From the table we can see that price earnings ratio in 2014 is much greater than
any other years, which indicates that the company is earning a good profit.
18 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
B) Market Book Ratio=Market price per share of stock / Book value per share of
common stock
Where, Book value per share of common stock= Common stock equity/
Number of shares of common stock outstanding
Items 2010 2011 2012 2013 2014
Market Price per Share of Common Stock
497.2 424 226.7 259 250
Book Value per Share of Common Stock Outstanding
10.00 10.00 10.00 10.00 8.33
Market Book Ratio= 49.72 42.4 22.67 25.9 30.012
Interpretation: Company has inconsistent results in this ratio.
19 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Time series analysis of Ambee Pharmaceuticals
Year
Ratio 2010 2011 2012 2013 2014 Interpretation
The company is
facing,
Liquidity Ratios
Current Ratio 1.04762 1.04779 1.03951 1.02193 1.00168 Consistent
Current ratio
Quick Ratio 0.81479 0.78413 0.49089 0.4815 0.48894 Poor Quick ratio
Activity Ratios:
Inventory Turnover 1.98193 2.22932 1.02903 1.03112 1.06395 Average
inventory
turnover ratio
Average collection Period 60.6213 62.3522 55.8272 77.9671 86.6157 Excellent Avg.
collection period
Average age of
inventory
184.164 163.727 354.704 353.985 343.06 Good
Perfomance
Average payment
period
44.3969 39.679 35.931 24.4806 20.1488 Low avg
peayment period
Total asset turnover
ratio
0.93748 0.96109 1.00807 1.00886 0.8249 Average
Performance
Debt Ratio:
Debt ratio 0.82963 0.82156 0.81251 0.8424 0.86069 Average
Performance
Profitability ratio:
20 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Gross profit margin 0.53554 0.54202 0.52914 0.5238 0.52968 Low gross profit
margin
Operating profit
margin
0.03754 0.37346 0.03567 0.03628 0.0302 Poor operating
profit margin
Net profit margin 0.02744 0.02805 0.028 0.02304 0.02187 Average net
profit margin
Earnings
per share
3.68406 3.80786 3.93519 3.95019 3.13466 Good
earnings
per
share
Return on total aseest
(ROA)
0.02573 0.02696 0.02823 0.02324 0.01804 Good ROA
Return on equity 14.3196 14.1249 13.9417 16.9981 20.8534 Average ROE
Market Ratio:
Price earnings ratio 134.96 111.349 57.6084 65.5665 79.7536 Low Price
earnings ratio
Market Book Ratio 49.72 42.4 22.67 25.9 30.012 Low MB ratio
21 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
BEACON PHARMACEUTICALS
Company profile Beacon pharmaceuticals ltd. A leading pharmaceutical company in Bangladesh in respect of
producing high-tech products like anticancer and cardiovascular portfolio. Beacon is a public
limited company listed with Dhaka and Chittagong Stock Exchange, Which was incorporated on
12 September, 2001 as a private limited company with the Registrar of Joint Stock Companies
and Firms, Dhaka, Bangladesh under the company’s act on 1994 and subsequently converted
into a Public Limited Company.
Beacon is the first anticancer drug manufacturing company in Bangladesh and has also been
producing Bio-tech products and various types of other life saving drugs to serve the ailing
humanity of Bangladesh. Beacon was listed in Dhaka Stock Exchange in 2010 as
BEACONPHAR.
Mission To improve the quality of human life by providing innovative pharmaceuticals products through
continues research and development ensuring stakeholder satisfaction.
Vision To be regarded and recognized as one of the most value driven pharmaceuticals company in the
country.
22 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Values Quality in everything we do.
Live up to our commitment.
Trust and respect for each other.
Transparent and fair in all our dealing.
Take initiative to exceed standard.
Work as a team.
Share social responsibilities.
Goals To be the market leader.
Serve customers with quality products at a reasonable price.
Develop employees with high potentials and an opportunity of career development.
Establish strong regional presence.
Provide shareholders a steady asset growth and return on investment.
Grow revenue and profit.
Products
23 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Financial ratio analysis of Beacon Pharmaceuticals
FINANCIAL DATA
Items 2014 2013 2012 2011 2010
Current Assests 2157357740 1526460823 1558681879 1404708549 1120732011
Current Liabilities 1062083274 702348389 897220836 739138766 426521195
Inventory 1064947942 920497475 997651472 886225292 667168268
Cost of goods sold 894119555 609987995 452583791 334079394 255198994
Accounts receivables 2648908362 157859545 125677319 110776095 65041157
Accounts payable 31109038 20837254 21020482 19224188 17800174
Average purchase per day 1644373.655 808616.0274 981085.9342 867120.452 794724.712
Sales 1991553373 1465790709 1135949483 734972610 554265199
Average sales per day 5456310.611 4015864.956 3112190.364 2013623.59 1518534.79
Purrchases 600196384 295144850 358096366 316498965 290074520
Total assets 4589825300 4251619886 4511424780 4332423471 3652158283
Total liabilities 1062083274 702348389 1747297518 1643557370 1365305530
EBIT 242567610 207397975 339787826 266515391 189240494
Interest expense 221684367 196574169 212120046 232140021 196256513
Gross profit 796243891 616918200 526852259 400893216 299066205
operating expense 553676280 409526225 187064433 134377825 109825711
Earnings available for common stockholders 24228195 9131066 75261161 111601475 24114850
Number of shares of common stock outstanding 231000000 231000000 231000000 220000000 190000000
Common stock equity 2310000000 2310000000 231000000 2310000000 1900000000
Market price per share of common stock outstanding 13.9 14.1 19.1 32.1 83.5
Earnings per share 0.104883961 0.039528424 0.325805892 0.50727943 0.12692026
Book value per share of common stock outstanding 10 10 1 10.5 10
24 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
LIQUIDITY RATIOS
A) Current Ratio= Current assets / Current liabilities
Items 2014 2013 2012 2011 2010
Current Assets 2157357740 1526460823 1558681879 1404708549 1120732011
Current
Liabilities
1062083274 702348389 897220836 739138766 426521195
Current ratio 2.031251026 2.173367017 1.737233261 1.900466615 2.627611533
Interpretation: Current ratio is consistent through the years and from the above table we can see
that the ratio not more than less 1.
B) Quick Ratio = (Current Assets-Inventories) / Current Liabilities
Items 2014 2013 2012 2011 2010
Current Assets 2157357740 1526460823 1558681879 1404708549 1120732011
Inventory 1064947942 920497475 997651472 886225292 667168268
Current
Liabilities
1062083274 702348389 897220836 739138766 426521195
Quick ratio 1.02855381 0.862767478 0.625298014 0.701469441 1.063402589
Interpretation; Ratio is slightly lower in recent years due to increase in liability.
25 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
ACTIVITY RATIOS:
A) Inventory Turnover = Cost of Goods Solds / Inventory
Items 2014 2013 2012 2011 2010
Cost of
goods sold
894119555 609987995 452583791 334079394 255198994
Inventory 1064947942 920497475 997651472 886225292 667168268
Inventory
Turnover
0.83958992 0.6626721 0.453649199 0.37696892 0.3825107
Interpretation: On the Year 2014, the company sold out and restocks their inventories 1.50times
and in 2010 it sold out and restock their inventories in 4.2 times.
B) Average collection Period = Accounts Receivables / (Annual sales/365)
Items 2014 2013 2012 2011 2010
Accounts
receivables
2648908362 157859545 125677319 110776095 65041157
Average
sales per
day
5456310.61 4015864.956 3112190.364 2013623.59 1518534.8
Average collection
period
485.476094 39.30897745 40.38227238 55.0133081 42.831522
Interpretation: For the years the company on an 40-45 days to collect all account receive.
26 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
C) Average age of inventory= 365/inventory turnover
Items 2014 2013 2012 2011 2010
Inventory
Turnover
0.83958992 0.6626721 0.453649199 0.37696892 0.3825107
Average age
of inventory
434.736045 550.8003127 804.5864534 968.249576 954.2217
Interpretation: In year 2014 the company held the inventory for 237.25 days in stock. Which was
the highest in the past 5 years and we can see that the age of inventory has a rising trend.
D) Average payment period= Accounts Payable /Average Purchase day
=Accounts Payable / (Annual purchase / 365)
Items 2014 2013 2012 2011 2010
Accounts
payable
31109038 20837254 21020482 19224188 17800174
Average
purchase per
day
1644373.65 808616.0274 981085.9342 867120.452 794724.71
Average payment period= 18.9184726 25.76903412 21.42572966 22.1701471 22.397912
Interpretation: The payment period surprisingly decreased in recent years compared to yearly
2010-2011.
27 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
DEBT RATIO:
A) Debt ratio= Total liabilities / Total assets
Items 2014 2013 2012 2011 2010
Total
liabilities
1062083274 702348389 1747297518 1643557370 1365305530
Total
assets
4589825300 4251619886 4511424780 4332423471 3652158283
Debt ratio= 0.2313995 0.16519548 0.38730503 0.37936212 0.37383526
Interpretation: It says that company’s total liability are 1% of total asset.
B) Times interest earned ratio= EBIT / Interest Expense
Items 2014 2013 2012 2011 2010
EBIT 242567610 207397975 339787826 266515391 189240494
Interest
expense
221684367 196574169 212120046 232140021 196256513
Times interest earned
ratio=
1.0942026 1.0550622 1.6018657 1.14808033 0.96425077
Interpretation: Times interest earned ratio measure the firm’s ability to meet its annual interest
payments. The interest Expense for the years where minimal but increased in recent years.
28 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
PROFITABILITY RATIO:
A) Gross profit margin = Gross profit / sales
Items 2014 2013 2012 2011 2010
Gross profit 796243891 616918200 526852259 400893216 299066205
Sales 1991553373 1465790709 1135949483 734972610 554265199
Gross profit margin = 0.39981047 0.42087741 0.46379902 0.54545327 0.5395724
Interpretation: For every 100 taka Beacon is earning 39 taka gross profit.
B) Operating profit margin= Operating profit / sales
Items 2014 2013 2012 2011 2010
EBIT 242567610 207397975 339787826 266515391 189240494
Sales 1991553373 1465790709 1135949483 734972610 554265199
Operating profit margin= 0.1217982 0.14149222 0.2991223 0.36261949 0.3414259
Interpretation: For every Tk100, Beacon is earning Tk12 operating profit.
C) Net profit margin= Net profit / sales
Items 2014 2013 2012 2011 2010
Earnings available for
common stockholders
24228195 9131066 75261161 111601475 24114850
Sales 1991553373 1465790709 1135949483 734972610 554265199
Net profit margin= 0.01216548 0.00622945 0.06625397 0.1518444 0.04350778
29 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Interpretation: For every Tk100 beacon is having tk1 net profit margin.
D) Earnings per share= Net profit / Number of shares available in the market
Items 2014 2013 2012 2011 2010
Earnings available for
common stockholders
24228195 9131066 75261161 111601475 24114850
Number of shares of
common stock
outstanding
231000000 231000000 231000000 220000000 190000000
Earnings per share= 0.10488396 0.03952842 0.32580589 0.50727943 0.12692026
Interpretation: The company is having positive EPS.
E) Return on total assets (ROA)= Net profit / Total asset
Items 2014 2013 2012 2011 2010
Earnings available for
common stockholders
24228195 9131066 75261161 111601475 24114850
Total
assets
4589825300 4251619886 4511424780 4332423471 3652158283
Return on total assets
(ROA)=
0.00527867 0.00214767 0.01668235 0.0257596 0.0066029
Interpretation: Return of Total asset is a measure of how much of total assets contribute to the
net income .Beacon Pharmaceuticals faces significant falls in the return of Total asset in the year
2014 compared to the previous financial years due to sharp fall in net income which resulted
from higher interest and tax expense This simply shows that the Total assets have not been
utilized properly.
30 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
F) Return on equity= Total asset / Common stock equity
Items 2014 2013 2012 2011 2010
Total
assets
4589825300 4251619886 4511424780 4332423471 3652158283
Common
stock equity
2310000000 2310000000 231000000 2310000000 1900000000
Return on equity= 1.98693736 1.84052809 19.5299774 1.875508 1.92218857
Interpretation: ROE measure the rate of return on common stockholder’s investment. Beacon’s
ROE went down by 94.8% in the past years due to sharp fall in Net Income which has
significantly affected by high cost of financing .Due to the existing investor will not be contented
and on the other hand potential investors will not be attracted as well.
Conclusion: The profitability ratio of Beacon show contradicting results. In some case the ratio
have shown a sharp decline while for the other change was very slight. The revenue from sales
had seen for both the financial years bit the cost of sales showed vast variance due to the high
ending inventory thereby affecting the Gross Profit.
MARKET RATIO:
Price earnings ratio= Market price per share of stock / Earnings per share
Items 2014 2013 2012 2011 2010
Market price per share of common stock
outstanding
13.9 14.1 19.1 32.1 83.5
Earnings per
share
0.10488 0.03953 0.32581 0.50728 0.12692
Price earnings ratio= 132.527 356.705 58.6239 63.2787 657.893
Interpretation: Their performance is quite good.
31 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Market Book Ratio: Market price per share of stock / Book value per share of common stock
Where, Book value per share of common stock= Common stock equity/ Number of shares of common stock outstanding
Items 2014 2013 2012 2011 2010
Market price per share of common stock outstanding 13.9 14.1 19.1 32.1 83.5
Book value per share of common stock outstanding 10 10 10 10.5 10
Market book ratio 1.39 1.41 1.91 3.05714 8.35
Interpretation: It needs to raise MB ratio or it might face loss in the long run.
32 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Time series analysis of Beacon Pharmaceuticals
Year
Ratio
2014 2013 2012 2011 2010
Interpretation
The company
is facing,
Liquidity Ratios
Current Ratio
2.03125 2.17337 1.73723 1.90047 2.62761
Low current
ratio
Quick Ratio
1.02855 0.86277 0.6253 0.70147 1.0634
Low quick
ratio
Activity Ratios:
Inventory Turnover
0.83959 0.66267 0.45365 0.37697 0.38251
Low
perfomance
Average collection Period 485.476 39.309 40.3823 55.0133 42.8315
Poor
performance
Average age of inventory
434.736 550.8 804.586 968.25 954.222
Average
performance
Average payment period
18.9185 25.769 21.4257 22.1701 22.3979
Average
performance
Debt Ratio:
Debt ratio
0.2314 0.1652 0.38731 0.37936 0.37384
Poor debt ratio
Profitability ratio:
Gross profit margin
0.39981 0.42088 0.4638 0.54545 0.53957
Average GP
profit
Operating profit margin
0.1218 0.14149 0.29912 0.36262 0.34143
Average
Operating
Profit
33 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Net profit margin
0.01217 0.00623 0.06625 0.15184 0.04351
Poor Net profit
margin
Earnings per share
0.10488 0.03953 0.32581 0.50728 0.12692
Poor EPS
Return on total aseest
(ROA)
0.00528 0.00215 0.01668 0.02576 0.0066
Poor ROA
Return on equity
1.98694 1.84053 19.53 1.87551 1.92219
Very poor
ROE
Market Ratio:
Price
earnings
ratio
132.527 356.705 58.6239 63.2787 657.893
Poor Price
earnings ratio
Market Book Ratio
1.39 1.41 1.91 3.05714 8.35
Very por MB
ratio
34 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
CROSS SECTIONAL ANALYSIS OF ‘AMBEE AND
BEACON’ PHARMACEUTICALS
(Only for the year of 2014)
Ratio and Formula
Ambee Beacon Interpretation
Liquidity Ratios 2014 2014
Current Ratio 1.002 2.031 Beacon is having
Current assets / Current liabilities higher Current ratio
which is good
Quick Ratio 0.489 1.029 Beacon is having
(Current Assets-Inventories) / Current Liabilities higher Quick ratio
which is good
Activity Ratios:
Inventory Turnover 1.064 0.84 Ambee has higher
Cost of Goods Solds / Inventory Inventory turnover ratio
which is good
86.62 485.5 Beacon is having
Accounts Receivables / (Annual sales/365) AVG collection period
which is good
Average age of inventory 343.1 434.7 Beacon is having
365/inventory turnover Avg age of inventory
which is good
Average payment period 20.15 18.92 Ambee has higher
Accounts Payable / Average Purchase day Avg payment period
which is good
Debt Ratio:
Debt ratio 0.861 0.231 Ambee has higher
Total liabities / Total assets Debt ratio
which is bad
Average collection Period
Years
35 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
Overall analysis: Both of the company is having several advantage and disadvantages. But
Ambee pharmaceuticals has shown better performance throughout the year than Beacon
Pharmaceuticals.
Profitability ratio:
Gross profit margin 0.53 0.4 Ambee has higher
Gross profit / sales Gross profit margin
which is good
Operating profit margin 0.03 0.122 Beacon is having
Operating profit / sales higher OP profit
which is good
Net profit margin 0.022 0.012 Ambee has higher
Net profit / sales Net profit margin
which is good
Earnings per share 3.135 0.105 Ambee has higher
Net profit / Number of shares of CS outstanding EPS
which is good
Return on total aseest (ROA) 0.018 0.005 Ambee has higher
Net profit / Total asset ROA
which is good
Return on equity 20.85 1.987 Ambee has higher
Total asset / Common stock equity ROE
which is good
Market Ratio:
Price earnings ratio 79.75 132.5 Beacon is having
Market price per share of stock / EPS Price earing ratio
which is good
Market Book Ratio 30.01 1.39 Ambee has higher
MPS / Book value per share of common stock MB ratio
which is good
36 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
CONCLUSION
Ambee pharmaceuticals and Beacon Pharmaceuticals Company are doing well. But in terms of
financial results that we have analyzed throughout the report shows that performance of Ambee
Pharmaceuticals is better. Their Net profit margin, EPS, REA, and ROA shows good results.
They have some drawbacks in Liquidity Ratio and Activity ratio. In terms of Liquidity Ratio and
Activity ratio, Beacon Pharmaceuticals have better results which helped them to survive in the
market. It is suggested that, both of the company should restructure their management and
production system to have better results.
37 | P a g e A m b e e P h a r m a c e u t i c a l s a n d B e a c o n p h a r m a c e u t i c a l s
REFERENCES
1) Dhaka Stock Exchange, Bangladesh
2) Gitman, L. (2014). Principles of managerial finance. [Place of publication not
identified]: Prentice Hall
3) Ambeepharma.com, (2015). Ambee Pharma. [online] Available at:
http://www.ambeepharma.com/ambee/aboutus.html [Accessed 2 Dec. 2015
4) Annual financial reports (2014-2010)