pharmaceuticals industry in bangladesh

7/27/2019 Pharmaceuticals Industry in Bangladesh

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An Analysis OnPharmaceuticals Industry

In Bangladesh

SUBMITTED TO

Ms. Jafrin Sultana

Assistant professor

Department f Business Administratin

Dha!a "ity "llege

SUBMITTED B#Rossi Norman Dias

Bachelor of Business Administration

Major- Finance

SEC-A

Department f Business Administratin

1


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INTRODUTION

TO

Beximco Pharmaceuticals Ltd.

BEXIMCO PHARMACEUTICALS LT.

!


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!ame " BEXIMCO PHARMACEUTICALS LT #Beximco Pharma$

I%cor&oratio% " '()*

Comme%ced O&eratio%s " '(+,

Slo-a% o Com&a%/ " 01e Are Buildi%- A Health/ Tomorro23

T/&e o Com&a%/ " Listed Pu4lic Limited Com&a%/

Stoc5 Excha%-e Listi%- " ha5a stoc5 Excha%-e Ltd.6 Chitta-o%- Stoc5 Excha%-e

Ltd.6 AIM o Lo%do% Stoc5 Excha%-e Plc #7Rs$

Mai% Busi%ess "Ma%uacture a%d Mar5eti%- o Huma% Pharmaceuticals

a%d A%imal Thera&eutics.

Authori8ed Ca&ital " T5. (',,,,,,,, "

Paid u& Ca&ital " T5. '9'':(;,,,

Total Asset " T5. '(+('(;;:


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Beximco Pharmaceuticals Ltd." MISSIO!

Each o our acti=ities must 4e%eit a%d add =alue to the commo% 2ealth o oursociet/. 1e irml/ 4elie=e that6 i% the i%al a%al/sis 2e are accou%ta4le to each othe co%stitue%ts 2ith 2hom 2e i%teract6 %amel/" our em&lo/ees6 our customers6our 4usi%ess associates6 our ello2 citi8e%s a%d our shareholders.

Beximco Pharmaceuticals Ltd." FISIO!

To 4e the most relia4le &harmaceutical com&a%/ i% Ba%-ladesh as 2ell as the

2orld 4/ re%deri%- ser=ices a%d &roducts.

#


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A!ALSIS O?

BEXIMCO PHARMACEUTICALS LT.

$


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Letter of Transmittal

'


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ACKNOWL!"#NT

As a stude%t o 4usi%ess admi%istratio%6 2e should ha=e the ex&erie%ce o

2or5i%- i% the &articular &he%ome%o% ha=e to 4e amiliar 2ith the &articular

tech%i>ues that ste&s us or2ard rom our 4oo5ish 5%o2led-e6 a%d this &articular

term &a&er o% i%dustr/ a%al/sis o% 0BEXIMCO PHARMACEUTICAL.3 I%

&re&ari%- the re&ort6 2e ace diere%t &ro4lems a%d i%all/ 2e ha=e 4ee% a4le to

o=ercome the &ro4lems.

I% this re-ard6 2e are exter%all/ tha%5ul to our teachers o de&artme%t o BBA o

HA@A Cit/ Colle-e 2ho hel&ed us a lot. 1e also tha%5 those &eo&le 2ho hel&

us 4/ -i=i%- i%ormatio% &ro=idi%- us %ecessar/ i%ormatio% or ma5i%- the

re&ort come true.

?i%all/6 2e are &leased to com&lete the re&ort o% the -i=e% su4Gect &ro&erl/ a%d

authe%ticall/.

&


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$C%TI& '%##A()

The term &a&er is to hi-hli-hts o% diere%t i%a%cial acti=ities o the com&a%/

such as i%a%cial &erorma%ce a%al/sis securit/ a%al/sis o &harmaceutical

i%dustries. The re&ort hel&s to 5%o2 the o=erall i%a%cial acti=ities &erorma%ce

o Beximco &harmaceutical. I% course o stud/ o the irms i%a%cial stateme%t

a%al/sis its securit/ &ositio% i% 4oth local orei-% stoc5 &ro=ides o&&ortu%it/

to ha=e exte%si=e 5%o2led-e a4out details o &harmaceutical i%dustries i%a%cial

o&eratio%. It also e%ha%ce our u%dersta%di%- a4ilit/ re-ardi%- 5e/ i%a%cial

o&eratio% data6 mar5eti%- strate-ies o diere%t &roductio%6 >ualit/ co%trol

i%dustr/ a%al/sis. 1ith 2orld class ra%-e su&erior >ualit/ o &harmaceutical

i%dustr/ 2ill 4e the leadi%- medici%e ma%uacturi%- 4ra%d i% Ba%-ladesh

'


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CONTNT'

Contents Pa*e No.

A4out the stud/ ',

O4Gecti=es o the stud/ ''

Sco&e o the stud/ 'uestio%ed 2hether i%di=idual i%dustries that

&erorm 2ell i% o%e time &eriod 2ould co%ti%ue to &erorm 2ell i% su4se>ue%t time

&eriod. These time series studies im&l/ that &ast &erorma%ce alo%e does %ot hel&

&roGect uture i%dustr/ &erorma%ce.

The i%a%cial &erorma%ce o a% i%dustr/ sho2% its stre%-th i% the mar5et .The i%a%cial

&erorma%ce o &harmaceutical i% &rese%ted 4elo2

Pharmaceutical

I%dustr/


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B%'IN'' C)CL AN! IN!%'T() C)CL

Inflation

7e%erall/ hi-her i%latio% is %e-ati=e or the stoc5 mar5et6 4ecause it causes

hi-her mar5et i%terest rates .It i%creases u%certai%t/ a4out uture &rices a%d cost.

Althou-h these ad=erse eects are true or most i%dustries6 some i%dustries 4e%eit orm

i%latio% such !atural resource i%dustries.

*articular !)1) !))( !))' !))& !))%

I%latio% rate ',..9J +.(J (.'J ).


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International conomy

I%ter%atio%al eco%om/ co%sists domestic a%d a4road a%d e=e%ts ma/ cause the

=alue o the US dollar to luctuate. The Beximco Pharmaceutical limited has a -lo4al

4usi%ess i% #:,$ ort/ cou%tries. Asia Arica% cou%tries i% stro%-er. The total sales

ex&ort sale alo%- 2ith their com&ariso% o BEXIMCO Pharmaceutical is -i=e% 4elo2"

*articular !))( +Bill, !))' !))&Total sales :.+) ;),


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I%lue%ce other tha% the eco%om/ is &art o the 4usi%ess e%=iro%me%t. emo-ra&hics6

cha%-es i% tech%olo-/ a%d &olitical a%d re-ulator/ e%=iro%me%ts also ha=e a si-%iica%t

eect o% the cash lo2 a%d ris5 &ros&ects o &harmaceuticals i%dustr/.

A. !emo*ra1hics/

Ba%-ladesh has thri=i%- &harmaceuticals ma%uacturi%- sector6 throu-h it is -e%erall/limited to small molecules. Po&ulatio% a-ei%- oers treme%dous o&&ortu%ities to&harmaceuticals com&a%ies. It &redicted that 4/


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I% Ba%-ladesh the &harmaceutical sector is o%e o the most de=elo&ed hitech sectors2hich are co%tri4uti%- i% the cou%tr/s eco%om/. Ater the s&read o ru- Co%trolOrdi%a%ce '(+uireme%t o the local mar5et. Leadi%-&harmaceutical com&a%ies are ex&a%di%- their 4usi%ess 2ith the aim to ex&a%d ex&ortmar5et. Rece%tl/ e2 %e2 i%dustries ha=e 4ee% esta4lished 2ith hi-h tech e>ui&me%tsa%d &roessio%als 2hich 2ill e%ha%ce the stre%-th o this sector.

Net ales

.on/ cale

)ta/e1 ta/e! ta/e" ta/e# Time *ioneerin/ Rapid ta0iliation Deceleration

De2elopment Acceleratin/ and Mar3et of 4ro5th

4ro5th Maturit6 and Decline

The ollo2i%- i-ures sho2 the lie c/cle sta-es o &harmaceuticals i%dustr/

6. Pioneerin* !e2elo1ments/ I% Ba%-ladesh the &harmaceuticals i%dustr/ irsti%troduce i% '()*.I% this sta-e &harmaceuticals i%dustr/ ex&erie%ce modest -ro2tha%d =er/ small &roit mar-i% a%d &roit i% eco%omic .Mar5et or the i%dustr/ &roduct orser=ice duri%- this time &eriod 2as small. Multi%atio%als i%dustr/ a%d =er/ e2 local&harmaceuticals i%dustries 2ere i%troduced i% that time.

4. (a1id Acceleratin* "ro3th: ?rom '(+< this sta-e 2as de=elo&ed i%Ba%-ladesh.Ater the s&read o ru- Co%trol Ordi%a%ce '(+


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cou%tries are stro%-er tha% e=er. !o2 our &harmaceuticals i%dustr/ is i% the -ro2thsta-e a%d =er/ soo% it 2ill 4e i% maturit/ sta-e 4ecause ur4a% &o&ulatio% isi%creasi%- a%d &eo&le are -etti%- educated.

Im1lication of dis1ersion 3ithin Industries

All irms i% a% i%dustr/ do %ot mo=e to-ether. Co%siste%t irms li5e oil6 -old. Steel

a%d railroads %eed %ot to do com&a%/ a%al/sis a%d its less critical tha% i%dustr/

a%al/sis. At the e%d 4/ selecti%- the 4est stoc5s 2ithi% stro%- i%dustries 2e ca% a=oid

the ris5

!ifferences in industry risuireme%ts a%d i%a%cial resources

Access to distri4utio% cha%%els" &reerred arra%-eme%ts

Re-ulator/ &olic/" &ate%ts6 re-ulator/ sta%dards

S2itchi%- costs em&lo/ee retrai%i%-6 %e2 e>ui&me%t6 tech%ical assista%ce.

Threat of 'ubstitute Products/

Su4stitute &roduct &erorm the same u%ctio% as the &roduct6 a%d are a com&etiti=e orce

as the/ ca% ta5e a2a/ dema%d or tie u& those customers 2ho choose to use the

su4stitute i%stead o /our &roduct. The ema%d or -e%eric =ersus 4ra%d %ame dru-s

has i%creased 4ecause o the costs o dru-s has i%creased 4ecause o the costs o

dru-s is decreases a%d -e%eral &eo&le ca% easil/ 4u/ the dru-s. I% mar5et there are

some su4stitute &roducts6 li5eher4al medici%e homeo&athic medici%e6 are a=aila4le.

As a result the dema%d decreases. So the &harmaceuticals i%dustr/ %eeds to i%troduce

her4al medici%e. 7e%eric dru- com&a%ies do %ot ha=e the hi-h cost associated 2ith the

research de=elo&me%t o %e2 dru-s a%d that to sell at chea&er &rices.

Bar*ainin* Po3er of Buyers/

I% the &harmaceuticals i%dustr/6 the 4u/ers are the &atie%ts6 the amil/ mem4ers6 the

PBAC6 the PBPA6 the i%a%ce de&artme%ts6 the hos&ital 4oards6 the te%der 4oards6 the

!#


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chie &harmacist alo%- 2ith a ra%-e o other 4u/ers6 de&e%di%- o% the s&eciic 4usi%ess.

Their i%lue%ce %eeds to 4e co%sidered. I% =arious 2a/s6 4u/ers ca% aect a 4usi%ess 4/

see5i%- &rice reductio%s6 dema%di%- hi-her >ualit/ a%d dema%di%- 4etter ser=ice. I%

short6 4u/ers ca% exercise &o2er 4/ see5i%- &rice reductio% a%d threate%i%- to -o to

other su&&liers to -et their &roducts. Po2erul 4u/ers dema%d costl/ ser=ice. The

-o=er%me%t re>uires a% i% de&th a%al/st that cost s mo%e/6 a%d customers re>uire u&

todate a%d rele=a%t medical i%ormatio% a%other costl/ ser=ice. Hos&itals other

health care or-a%i8atio% 4u/ i% 4ul5 >ua%tities a%d exert &ressure o% &harmaceutical

com&a%ies to 5ee& &rices i% chec5. Re-ular &atie%ts ha=e lost 4ar-ai%i%- &o2er due to

&rice i%creases i% -e%eric dru-s.

Bar*ainin* Po3er of 'u11liers/

The 4ar-ai%i%- &o2er o su&&liers is a rather mar-i%al orce i% the &harmaceutical

i%dustr/. The lar-e &harmaceuticals com&a%ies are usuall/ =erticall/ i%te-rated

4ac52ards a%d as such do %ot ace stro%- threats rom su&&liers. ?or the maGorit/ o

&harmaceutical &roducts ra2 materials su&&l/ is %ot a 4ottle%ec5. The exce&tio% is 4io

tech%olo-/ a%d -e%ome tech%olo-/6 2here su&&l/ is ote% more o a &ro4lem 4ecause o

the hi-hl/ s&eciali8ed %ature o the i%&uts. A%other area 2here the su&&l/ mi-ht 4e a%

im&orta%t co%strai%t is6 or exam&le6 the scarcit/ o do%or or-a%s 2hich se=erel/ limits

the -ro2th o immu%it/ dru-s. I la4or is i%cludes as a su&&l/ orce6 si-%iica%t 4ar-ai%i%-

&o2er mi-ht exist s&eciali8ed R &erso%%el i% attracti=e research areas. U%io%s ma/also &la/ a role as 4ar-ai%i%- i% the &harmaceutical i%dustr/6 %ot so much to &rotect

salaries6 4ut more so to e%orce stro%- a%d ex&e%si=e saet/ measures or the 2or5

e%=iro%me%t.

CO#PITITO( CO#PANI' O P+A(#AC%TICAL IN!%'T(I' O

BAN"LA!'+/ Re%ata Ltd. #ormer Pi8er La4oratories Ba%-ladesh Ltd.$ 222.re%ataltd.com

Ad=a%ced Chemical I%dustries #ACI$ Limited

The ACME La4oratories Ltd

Amico La4oratories

Aristo&harma Ltd

Beaco% Pharmaceuticals Ltd.

Beximco Pharmaceuticals Ltd

Bristol Pharma Ltd

elta Pharma Limited.

Es5a/e Ba%-ladesh Limited

7aco Pharmaceutical Limited

!$


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U%iMed U%iHealth Pharma Limited

7laxoSmith@li%e Ba%-ladesh Ltd.

7lo4e Pharmaceutical Limited

Healthcare &harmaceuticals Limited

IB! Si%a

I%ce&ta Pharmaceuticals Limited

Mo%icoPharma Ltd. Ba%-ladesh

!o=o Healthcare Pharma Limited

O&so%i% Pharma Limited

Paradise Chemical I%dustries

Po&ular Pharmaceuticals Limited

Re%ata Limited

S/%tho La4oratories Limited

Sil=a Pharmaceutical Limited

S>uare Pharmaceuticals Ltd. Ba%-ladesh

Su&reme Pharmaceuticals Limited

a/so% Pharmaceutical Limited

So%ear La4oratories Limited

'TI#AT' IN!%'T() (AT' O (T%(N'

To demo%strate i%dustr/ a%al/sis6 2e used #i=ide%d iscou%t$ model i%estimati%- the rates o retur%s o &harmaceuticals i%dustr/.

A di=ide%d discou%t model is a i%a%cial model that =alues shares at thediscou%ted =alue o uture di=ide%d &a/me%ts. A share is 2orth the &rese%t =alueo all uture di=ide%ds. As it =alues shares o% the actual cash lo2s recei=ed 4/i%=estors6 it is theoreticall/ the most correct =aluatio% model.

Rate of Return (Ks):

Price o the com&a%/6 Po N ' #@s-$Or6 Rate o Retur%6 @s N #'Po$ K-

C!PA"#"A!E

$R%&' RA&E

*E" (&K)

PRCE +S'ARE(&K)

RA&E +RE&,R"

B$I#COP+A(#AC%TICAL'

5.5@9;7 O( @.9

6.76 6@@.85 5.5:7: O( :.7:

SUAREPHARMACEUTICALS

,.'+(( OR '(.,,J

)).;9 ;:'


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7LAXCO SMITH@LA!E B LT

,.


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?rom the a4o=e ratio 2e ca% sa/ that the Beximco &harma has the lo2est &rice to 4oo5=alue ratio The 1rice to sales ratio/ The &rice to sales ratio ca% 4e calculated as a

com&a%/s total mar5et =alue #&rice time %um4er o share$ di=ided 4/ its sales.

The &rice to sales ratioN (price*number of share)/total sales.

Com&a%/ %ame The &rice to sales ratio

BEXIMCO PHARMACEUTICALS LT '**.(9'9'':(


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inancial 'tatement Analysis

!(


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Be7imco *harmaceuticals .td.

CO##ON 'I INCO# 'TAT#NT

A% i%come stateme%t i% 2hich each accou%t is ex&ressed as a &erce%ta-e o the =aluesales. This t/&e o i%a%cial stateme%t ca% 4e used to allo2 oe a%al/sis 4et2ee%com&a%ies or 4et2ee% time &eriods o a com&a%/. Commo% si8e I%come stateme%ta%al/sis allo2s a% a%al/st to determi%e ho2 the =arious com&o%e%ts o the i%comestateme%t aect a com&a%/s &roit. I%come stateme%t o Beximco &harmaceuticalslimited or


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?i%a%ce Cost #**


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I%=e%tories '6(+;6+,(6::: '6)


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CA'+ LOW 'TAT#NT

The Cash ?lo2 Stateme%t o Beximco Pharmaceuticals Ltd or uisitio% o Pro&ert/6 Pla%t a%d E>ui&me%t #


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Issua%ce o Preere%ce Share :6',,6,,,6,,,

!et I%crease#ecrease$ i% Short TermBorro2i%-s

'++6*;:6*(+ #',6;;(6+);$ 99:6,+;6(,,

Preere%ce Share i=ide%d #'9;6)9,6,,,$

i=ide%d Paid #


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Ratio% a%al/sis is the starti%- &oi%t i% de=elo&i%- the i%ormatio% desired 4/ thea%al/st. Ratio a%al/st &ro=ides o%l/ a si%-le s%a&shot6 the a%al/st 4ei%- or o%e-i=e% &oi%t or &eriod i% time. I% the ratio a%al/sis it is &ossi4le to dei%e the com&a%/ratio% 2ith a sta%dard o%e. Ratio a%al/sis ca% 4e classiied as ollo2s"

A. Li>uidit/ Ratio"

Li>uidit/ ratio measures the a4ilit/ o the irm to meets its uture short term o4li-atio%s.These ratios esta4lishes 4et2ee% cash a%d other curre%t assets a%d curre%t lia4ilities.Creditors to e=aluatethe credit2orthi%ess o the irm use these ratios. These ratios also&ro=ide re=els ma%a-eme%ts &olic/ i% ma%a-i%- li>uidit/ &ositio% o the irm. TheLi>uidit/ ratio 2e ca% satis/ o% the three ratios6 those are"

'. Curre%t Ratio%.


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Curre%t Lia4ilities N Shortterm Borro2i%-6 Lo%-term Borro2i%-6 Creditors a%d otherPa/a4les6 Accrued Ex&e%ses6 i=ide%d Pa/a4le6 a%d I%come Tax Pa/a4le.

Particulars uidit/tha% curre%t ratio. Because i%=e%tories 2hich are the least li>uid o the curre%tassets rom the ratio. It is esse%tial or a com&a%/ to reali8e its a4ilit/ to &a/ theshortterm o4li-atio%6 2ithout 5%o2i%- o% the sales & the i%=e%tor/ 4ecause the/are the assets o% 2hich losses are mostl/ i% the e=e%t o li>uidatio%.

Cash 78ar9eta+(e seurities 7eeia+(es

uic5 ratio N Current *ia+i(ities

Here6 Curre%t assets N I%=e%tories6 S&ares Su&&lies6 Accou%t Recei=a4les6 Loa%s6Ad=a%ces a%d e&osits6 Shortterm I%=estme%ts6 Cash a%d Cash E>ui=ale%ts.

Curre%t Lia4ilities N Shortterm Borro2i%-6 Lo%-term Borro2i%-6 Creditors a%d otherPa/a4les6 Accrued Ex&e%ses6 i=ide%d Pa/a4le6 a%d I%come Tax Pa/a4le.

#See A&&e%dix


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;. Cash (atio/ The cash ratio is estimated to curre%t lia4ilities i%to cash. It4eto5e% the com&a%/ ca% &a/ o it curre%t lia4ilities -i=e% /ear rom itso&eratio%. It is the most amous ratio or reali8e the li>uidit/ &ositio% o a%/com&a%/. 7e%erall/ 2e 5%o2 that curre%t ratio a%d >uic5 ratio is %ot -ood 2a/ toa%al/sis the li>uidit/ &ositio% or a com&a%/ 4ecause it corres&o%d o accou%trecei=a4les a%d i%=e%tor/6 2hich ta5e time to co%=ert to cash. ?i%all/ 2e ca%

ex&ress that the cash ratio -i=es a 4etter result. The ormula o Cash Ratio is-i=e% 4elo2 asD

Cash ratio N Cash ; Current *ia+i(ity

Particulars 4565 4557 4558 Beximco Pharmaceuticals Ltd ,.9+9; ,.:* ,.


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4. ixed Asset Turno2er/ ?ixed asset tur%o=er ratio is the sales to the =alue oixed assets o the com&a%/. It determi%es the eecti=e%ess i% -e%erati%- %etsales re=e%ue rom i%=estme%ts i% %et &ro&ert/6 &la%t6 a%d e>ui&me%t 4ac5 i%tothe com&a%/ e=aluates o%l/ the i%=estme%ts.

?ixedasset tur%o=erN %et sa(es ; aerage net fixed assets

;. Fuity Turno2er/ This ratio measures a com&a%/s a4ilit/ to -e%erate sales-i=e% its i%=estme%t i% total e>uit/ #commo% shareholders &reerredstoc5holders$.

E>uit/ tur%o=erN %et sa(es ; aerage tota( equity

Particulars 4557 4558Beximco Pharmaceuticals Ltd ,.:* ,.:;

C. Proita4ilit/ Ratio"

Proita4ilit/ ratios desi-%ate a com&a%/s o=erall eicie%c/ a%d &erorma%ce. Itmeasures the com&a%/ ho2 to use o its assets a%d co%trol o its ex&e%ses to -e%eratea% acce&ta4le rate o retur%. It also used to exami%e ho2 2ell the com&a%/ is o&erati%-or ho2 2ell curre%t &erorma%ce com&ares to &ast records o 4oth &harmaceuticalcom&a%ies. There are ; im&orta%t &roita4ilit/ ratios that 2e are -oi%- to a%al/8e"

'. !et Proit Mar-i%


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7ross &roit mar-i% ratioN -ross Profit ; sa(es < 100

Particulars 4557 4558Beximco Pharmaceuticals Ltd :).;J 9,J

;. O1eratin* Profit #ar*in (atio/ The o&erati%- &roit mar-i% ratio reco-%i8e othe &erce%ta-e o sales to excha%-e i%to all cost a%d ex&e%ses ater remai%i%-sales. A hi-h o&erati%- &roit mar-i% is &reerred. O&erati%- &roit mar-i% is calledas ollo2s"

O&erati%- Proit Mar-i%N /erating rofits ; sa(es

Particulars 4565 4557 4558Beximco Pharmaceuticals Ltd


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1e should also exami%e the li>uidit/ o i%=e%tor/ 4ased o% the irms i%=e%tor/ tur%o=era%d the im&lied &rocessi%- time. I%=e%tor/ tur%o=er ca% 4e calculated relati=e to sales orcost o -oods sold. The i%=e%tor/ tur%o=er com&utatio% a%d Beximcos i%=e%tor/tur%o=er or


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?or #


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UPO!T SSTEM

A i%a%ce executi=e at E.I. du Po%t de !emours a%d Co.6 o 1ilmi%-to%6 ela2are6created the uPo%t s/stem o i%a%cial a%al/sis i% '('(.Retur% o% E>uit/ #ROE$ is o%eo the most im&orta%t i%dicators o a irms &roita4ilit/ a%d &ote%tial -ro2th. Com&a%iesthat 4oast a hi-h retur% o% e>uit/ 2ith little or %o de4t are a4le to -ro2 2ithout lar-eca&ital ex&e%ditures6 allo2i%- the o2%ers o the 4usi%ess to 2ithdra2al cash a%drei%=est it else2here. There are ; com&o%e%ts i% the calculatio% o the retur% o% e>uit/usi%- the traditio%al uPo%t modelD The !et Proit Mar-i%6 Asset Tur%o=er6 a%d Thee>uit/ Multi&lier or The i%a%cial le=era-e. B/ exami%i%- each i%&ut i%di=iduall/6 2e ca%disco=er the sources o a com&a%/s retur% o% e>uit/.

%et inome %et sa(es Tota( asset

Retur% o% E>uit/ #ROE$ N %et sa(es Tota( asset Common equity

6!4"40$#0" 46!54'15 1''1'##4!!ROE !00' = 46!54'15 1''1'##4!! 105"06614

#!


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= 0$1! < 0$!45 < 1$!"

= 0$5" or 5">

Beximco Pharmaceutical has a much 4etter ROE so the irms use o assets is moreeicie%t a%d it uses more de4t i%a%ci%-. Beximco Pharmaceutical &rici%- or ex&e%seco%trol are i%erior to the i%dustr/6 ho2e=er6 a%d the use o de4t co%stitutes a -reater ris5or Beximco Pharma 4ecause it ma/ %ot 4e a4le to ha%dle the ris5.

A!ALSIS O? RIS@

#"


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RIS@ A!ALSIS

Ris5 a%al/sis exami%es the u%certai%t/ o i%come lo2s or the total irm a%dor the i%di=idual source o ca&ital. This i%=ol=es exami%i%- the maGor actor that causesa irms i%come lo2s to =ar/ .More =olatile i%come lo2s mea% -reater ris5 aci%-i%=estor. The total ris5 o irms has < i%ter%al com&o%e%ts. The/ are

A. Busi%ess ris5 a%d

B. ?i%a%cial ris5.

C. Total de4t ratio.

A. Business ris


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Busi%ess ris5 is -e%erall/ measured 4/ the =aria4ilit/ o the irms o&eratio%s

i%come o=er time. I% tur%6 the ear%i%- =aria4ilit/ is measured 4/ the sta%dard de=iatio%o the historical o&erati%- ear%i%-s series. The 2a/ or measuri%- 4usi%ess ris5 is"

Busi%ess ris5N f Coeffiient of ariation of oerating earnings

N Standard deiation of oerating earnings 8ean oerating earnings

? /E& /E @= /E;%

The Busi%ess Ris5 ?or uit/ ratio4. I%terest co=era-e ratioc. Total de4t Ratio

a. e4t e>uit/ ratio"

#$


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The &ro&ortio% o de4t ratios i%dicates 2hat &ortio% o the irms ca&ital isderi=ed rom de4t com&are to other source o ca&ital6 such as &reerred stoc56commo% stoc56 a%d retai%ed ear%i%-s. A hi-her &ro&ortio% o de4t ca&ital com&aredto e>uit/ ca&ital ma5es ear%i%-s more =olatile 4ecause o lar-er o ixed i%a%cialchar-es a%d i%creases the &ro4a4ilit/ that a irm 2ill 4e u%a4le to &a/ the i%terestchar-ed o% de4t ca&ital. The de4te>uit/ ratio ca% measure 4/ the ollo2i%- 2a/"

Tota( (ong term de+t e4t e>uit/ ratioN

Tota( equity

e4t e>uit/ or uit/ )'.;:J

e4t e>uit/ or uit/


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I%terest co=era-e Ratio or uit/.

Total de4t ratio N Current (ia+i(ity 7 (ong term de+t Tota( de+t 7 tota( equity

Total de4t ratio or


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Com&a%/ A%al/sis

#'


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pharmaceuticals industry in bangladesh

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