repot_square pharma..docx

NORTH SOUTH UNIVERSITYFin 254INTRODUCTION TO Financial ManagementSec-25

Project report on financial ratio analysis of squarePharmaceuticals. SUBMITTED TO:

Mahjabeen Ahmed (MJD)

LECTURER, SCHOOL OF BUSINESS

NORTH SOUTH UNIVERSITY

SUBMITTED BY: (Team-x)

NAME ID

Mohamma Jahid Hasan 1421056030

Md.Kamruzzaman 1320443030

Table of Contents

Page | 1

Titles Page number

Annual report.2010-2-1011; 2011-2012: 2012-2013

Introduction & History 03

Financial ratio analysis of 2010-2011 04-10

Financial ratio analysis of 2011-2012 11-17

Financial ratio Analysis of 2012-2013 18-24

Conclusion

Introduction

Page | 2

SQUARE today symbolizes a name – a state of mind. But its journey to the growth and prosperity has been no bed of roses. From the inception in 1958, it has today burgeoned into one of the top line conglomerates in Bangladesh. Square Pharmaceuticals Ltd., the flagship company, is holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985 and is now on its way to becoming a high performance global player.

History

SQUARE Pharmaceuticals Limited is the largest pharmaceutical company in Bangladesh and it has been continuously in the 1st position among all national and multinational companies since 1985. It was established in 1958 and converted into a public limited company in 1991. The sales turnover of SPL was more than Taka 11.46 Billion (US$ 163.71 million) with about 16.43% market share (April 2009– March 2010) having a growth rate of about 16.72%.

Square Pharmaceuticals Limited has extended her range of services towards the highway of global market. She pioneered exports of medicines from Bangladesh in 1987 and has been exporting antibiotics and other pharmaceutical products. This extension in business and services has manifested the credibility of Square Pharmaceuticals Limited. Square strive, above all, for top quality health care products at the least cost reaching the lowest rungs of the economic class of people in the country. We value our social obligations. They owe to our shareholders and strive for protection of their capital as well as ensure highest return and growth of their assets. They strive for best compensation to all the employees who constitute the back-bone of the management and operational strength of the Company through a pay-package composing salary/wages, allowances, bonus, profit participation, leave salary and superannuation & retirement benefits.

Reference: http://www.squarepharma.com.bd/about-us.php

Page | 3

Financial Ratio Analysis of 2010-2011

Liquidity ratios

1) Current ratio.

For 2011

Current ratio = 70222138404668189426 = 1.50 times

For 2010

Current ratio =45530419682216744401 = 2.05 times

In 2011 current assets were 1.50 times the current liabilities, the ratio declined from 2010 which is a bad performance which indicate the company is facing problem to pay its short term liabilities in schedule time so the company must use its current assets efficiently to meet its debt obligation.

1) Quick/ acid test ratio.

For 2011

Quick/ acid test ratio = 7022213840−2541688329

4668189426 = 0.96times.

For 2010

Quick/acid test ratio= 4553041968−2207078082

2216744401 = 1.06times.

In 2011, the current assets excluding inventories were 0.96 the current liabilities. The ratio declined from 2010 this is because the company is facing idle up stock. So the company must try to reduce their inventories to convert into finished goods to generate sales

Asset management ratios

1) Average collection period

For 2011

Average collection period = 772421345

13471424469×365 = 20.93days.

For 2010

Page | 4


11462578410×365 = 16.18times

In 2011 on an average it takes 20.93 days to collect money from the creditor which is greater than the previous year which is a bad performance in 2011, in this period the company is taking longer period of time to collect money from the creditors that means the firms credit collectionPolicy and management is not efficient so it must be improved otherwise the firm will incur bad debts.

2) Average payment period.

For 2011

Average payment period = 733369218

7557530867×365 = 35.42days.

Credit purchase = cost of goods sold + closing inventory – opening inventory

Credit purchase = 7703661010 – 2687818472+ 2541688329 = 7557530867

For 2010


6226678238×365 = 23.14times.

Credit purchase = 65612884851 – 2541688329 + 2207078082 = 6226678238

In 2011 on an average the firm requires 35.42 days to pay their debt which is more than the previous years which indicates a bad performance so suppliers will lose interest to supply goods in this period as they are getting money lately which will create a negative image for the company in the year 2011.

3) Inventory turnover.

For 2011

Inventory turnover= 77036610102541688329 = 3.03 times

For 2010

Inventory turnover= 65612884852207078082 = 2.97 times

In 2011 the company sold out and restock their inventory 3.03times the ratio increased from 2010 which is a good performance, this indicates that inventories are selling frequently to convert into finished goods in order to generate sales.

4) Average age of inventory.

Page | 5

For 2011

Average age of inventory = 25416883297703661010 ×365= 120.46days.

For 2010

Average age of inventory = 22070780826561288485 ×365= 122.89 days.

In 2011 on an average inventory on hand is 120.46 days which is declined from 2011, which is a good performance as inventories are lasting for short time so it is utilized efficiently to convert into finished goods to generate sales.

5) Total asset turnover.

For 2011

Total asset turnover =1347142446919444409654 = 0.69times

For 2010

Total asset turnover =1146257841015196452304 = 0.75 times

In 2011 using 1tk of the total assets the company granted a sales 0.69tk the ratio decreased from 2010 which is a bad performance so to improve this situation the firm must use its asset more efficiently to generate sales.

6) Fixed assets turnover.

For 2011

Fixed asset turnover= 1347142446912422195814 = 1.09

For 2010

Fixed asset turnover= 1146257841010643410336 = 2.52

In 2011, using 1tk of the fixed asset the company generated sale of 1.09tk. The ratios decreased from 2010 which is a bad performance so the company must use its fixed asset more efficiently to generate sales so that they can improve the situation.

Debt management ratios

1) Debt ratio.

Page | 6

For 2011

Debt ratio = 5626700664

19444409654 = 28.9%

For 2010

Debt ratio = 3475120453

15196452304 = 22.87%

In 2011, the debt ratio is 28.9% which is more than the previous years, which is a good performance; this also indicates that the company has more assets to meet its debt obligation.

2) Total debt to total equity.

For 2011

Total debt to total equity = 562670066413817708990= 0.40 times

For 2010

Total debt to total equity = 347512045311721331851 = 0.29 times

In 2011 total liabilities were 0.40 times higher than the total equity, the ratio increased from 2010 which is a bad performance. This indicates the firm has enough stock holders wealth to meet its debt obligation.

3) Times interest earned.

For 2011

Times Interest earned= 2751605397268849071 = 10.24

For 2010

Times Interest earned= 2380757879308861107 = 7.70

In 2011, earnings before interest and tax are 10.24 times higher than the interest expense. So the ratio increased from 2010 as the interest expense of the company has gone down abruptly. So the square company is doing better than the previous year.

Profitability Ratios

1) Gross profit margin.

For 2011

Page | 7

Gross profit margin= 5767763459

13471424469 ×100 = 42.82%

For 2010

Gross profit margin= 4901289925

11462578410 ×100 = 42.76%

In 2011, the company is earning 42.82tk out of every 100tk worth sales after the firm has paid out for its good, the ratio is higher than the previous year which is a good performance that firm is converting sales into gross profit efficiently.

2) Net profit margin.

For 2011

Net profit margin = 2532054550

13471424469 ×100= 18.80%

For 2010

Net profit margin = 215953631711462578410 ×100 = 18.21%

In 2011, 18.80tk worth of sales remaining out of every 100tk worth of sales after the firm has paid out all expenses and interests. The ratio has increased from previous year which is a good performance for the company, which also indicates that that firm has minimized all expenses and gained higher earnings.

3) Return on equity.

For 2011

Return on equity= 2532054550

138147708990 ×100 = 18.32%

For 2010

Return on equity= 208787179111721331851 ×100 =17.81%

In 2011 the company is earning 18.32tk out of every 100tk worth of shareholders investment, the ratio increased from the previous years which is a good performance, which also indicates that the company is using stockholders investment efficiently.

4) Return on asset.

For 2011

Return on asset= 2532054550

19444409654×100 = 13.02 %

Page | 8

For 2010

Return on asset= 2087871791

15196452304×100 = 13.74%

In 2011 every 100 taka worth of asset investment is generating 13.02tk, the ratio declined from the previous year which is a bad performance the company should try to use its asset efficiently to generate profit.

Market ratios

1) Earnings per share.

For 2011

Earnings per share=2532054550

19617390 = 129.07

For 2010

Earnings per share=2087871791

19617390 = 106.43

In 2011 for each outstanding shares the firm has an earnings of 129.07tk per share which is increased from the previous year’s which is a good performance and it considered an important indicator of corporate success.

2) Price earnings ratio.

For 2011

Price earnings ratio =3272

129.07 = 25.35

For 2010

Price earnings ratio =3581

106.43 = 33.64

In 2011 investors are willing to pay 25.35tk out of every 1tk of earnings, the ratio declined from the previous year’s significantly which is a bad performance and the investor will loose confident to invest.

3) Dividend per share

For 2011

Dividend per share = 8019682719617390 = 4.09tk per share

For 2010

Page | 9

Dividend per share = 5814434119617390 = 2.96tk per share.

In 2011 the company is paying a dividend of 1.79tk per share, the ratio increased from the previous year’s which is a good performance for the firm which will attract the investors to invest in their stock.

5) Dividend Yield.

For 2011

Dividend yield = 4.093272×100 = .125%

For 2010

Dividend yield = = 2.963581×100 = .083%

In 2013 dividend yield is .125% which is increased from 2010 which is a good performance, the investor will gain confidence to invest in the current year.

6) Dividend payout

For 2011

Dividend payout = 4.09

129.07 = 0.302tk per share.

For 2010

Dividend payout == 2.96

106.43 = 0.028tk per share.

In 2011 the company is paying a dividend of .302tk per share which is increased from the previous year’s which is a good performance, it also indicates that dividend per share is high in 2011 which result a higher dividend payout in 2011.

7) Book value per share.

For 2011

Book value per share= 13817708990

19617390 = 704.37

For 2010

Book value per share 117213318519617340 = 597

Page | 10

In 2011 book value per share is 704.37 which is greater than the previous year’s book value per share which indicates that the firm has more common stock equity.

7) Market to book value ratio

For 2011

Market to book value ratio 178.6050.83 = 3.51

For 2010

Market to book value ratio 237.3043.97 = 5.41

In 2011 the investors are paying 3.51tk for each 1tk of book value of stock, the ratio has decreased from previous years in significant amount which is a bad performance and it will lose the investors confident, the decrease in ratio is due to decrease in market price per common stock in the year 2011.

Financial Ratio Analysis of 2010-2011

Liquidity ratios

1) Current ratio. For 2012


For 2011


Page | 11

In 2012 current assets were 1.58 times the current liabilities, the ratio has increased from 2011 which is a good performance for the company, which indicates the business has enough current assets to pay its short term liabilities.

2) Quick/ Acid test ration.

For 2012

Quick / Acid test ratio = 6745507008−2687818412

4252934845 = 0.95 times

For 2011

Quick/ Acid test ratio = 7022213840−2541688329

4668189426 = 0.96 times

In 2012 the current asset excluding inventories is 0.95 times than current liabilities, the ratio decline from 2011 to 2012 which is a bad performance for the business as they are facing idle up stock so the company may improve this situation by trying to sell their stock quickly or using the inventories efficiently to convert into finished good so that it can generate sales.

Activity Ratios

1) Average collection period

For 2012


16054425243×365 = 18.37days.

For 2011


13471424469×365 = 20.93times

In 2013 Average collection period is 18.37 days which is less than the previous year which is a good performance in 2012, in this period the company is taking shorter period of time to collect money from the creditors that means the firms credit collection policy and management is efficient.


For 2012


9351388852×365 = 34.17days.

Credit purchase = cost of goods sold + closing inventory – opening inventory

Credit purchase = 9167253620 – 2503683240 + 2687818472 = 9351388852

Page | 12

For 2011


7557530867×365 = 35.42times

Credit purchase = 7703661010 – 2687818472 + 2541688329 = 7557530867.

In 2012 on an average the firm requires 34.17 days to pay their debt which is less than the previous years which indicates a good performance so suppliers will be interested to supply goods in this period, which will create a positive image for the company in the year 2012.

3) Inventory turnover ratio.

For 2012

Inventory turnover ratio = 91672536202687818472 = 3.41 times

For 2011


In 2012 the company sold out and restocked the inventory by 3.41times which is greater than previous year which is good performance for the company which indicates goods are selling quickly, in other words they are not facing idle up stock so inventory will be easily converted into finished goods to generate sale.

4) Average age of inventory.

For 2012

Average age of inventory = 26878184729167253620 ×365= 107.04days.

For 2011

Average age of inventory = 25416883297703661010 ×365= 120 days.

In 2012 on an average inventory on hand is 107.04 days which is declined from 2011, which is a good performance as inventories are lasting for short so it is utilized efficiently to convert into finished goods to generate sales.

5) Total assets turnover.

For 2012

Total asset turnover = 1605442524321453584762 = 0.74 times

Page | 13

For 2011

Total asset turnover = 1347142446919444409654= 0.69 times

In 2012 using 1tk of total asset the company generates 0.74tk of sale, the ratio increased from the 2011 which is a good performance. The company uses its total assets more efficiently to generate sales.

6) Fixed asset turnover.

For 2012

Fixed asset turnover = 1605442524314708277754 = 1.09 times

For 2011

Fixed asset turnover = 13471424469

1912422195814 = 1.08 times

In 2012 using 1tk of fixed assets the company generate 1.09 worth of sale, the ratio increased form the previous year which is a good performance, the fixed assets are used efficiently to generate more sales.

Solvency ratios

1) Total Debt to asset ratio.

For 2012

Debtors to asset ratio = 5186900507

211453784762 = 24.2%

For 2011

Debtors to asset ratio=562670066419444409664 = 28.94%

In 2012 the debt ratio is 24.2%, the ratio declined from 2011 to 2012 which is good performance as in 2012 has more assets to meet its debt obligation in other words degree of indebtedness in 2012 is less

2) Total debt to total equity.

For 2012

Total debt to asset ratio = 518690050716266884255 = 31.9%

For 2011

Page | 14

Total debt to asset ratio = 562670066413817708990 = 40.72%

In 2012 total liabilities were 0.31 times higher than equity, the ratio declined from 2011 as total liabilities has decreased significantly

3) Time interest earned.

For 2012

Time Interest earned = 3321146713433581036 = 7.65

For 2011

Time Interest earned = 2751605397268849071 = 7.46

In 2010 earnings before interest and tax is 7.65 times than the interest expense, the ratio increased from the previous years which indicates a good performance of the company, the company is able to make its interest payment efficiently as the firm has enough earnings

Probability ratios

1) Gross Profit margin.

For 2012

Gross profit margin =6887171623

16054425243 ×100 = 42.89 times

For 2011


13471424469 ×100 = 42.82 times

In 2012 the company is earning 42.89 taka out of every 100 taka worth of sales. The ratio increased from 2011 which is a good performance which indicates that the firm is converting sale into gross profit more efficiently.


For 2012

Net profit margin =2897710641

16054425243 ×100 = 18.05 %

For 2011

Page | 15

Net profit margin=2532054550

13471424496 ×100 = 18.80 %

In 2012 18.05 taka worth of sales remaining out of every 100tk worth of sales after the firm has paid all expenses and interests, the ratio declined from 2011, which indicates a poor performance. In order to improve the situation the company must minimize their expense and interest payments so that earnings will increase.

3) Return on asset.

For 2012

Return on asset = 2897710641

21453784762 ×100 = 13.52%

For 2011

Return on asset = 2532054550

19444409654×100 = 13.02%

In 2012 the company earns 13.51tk out of every 100tk worth of asset investment, the ratio increased from the previous years which indicates a good performance, the company is using its asset investment efficiently to generate profit.

4) Return on equity

For 2012

Return on equity = 2897710641

16266884255 ×100 = 17.81%

For 2011

Return on equity = 2532054550

13817708990×100 = 18.32%.

In 2012 the company is earning 17.81tk out of every 100tk worth of stockholders investment, the ratio slightly fall which indicates a poor performance. In order to improve the current situation the company must use stockholders investment so that it generates profit.

Market ratios


Page | 16

For 2012

Earnings per share =2897710641264834760 = 10.94tk per share.

For 2011


In 2012 for each outstanding shares the firm has earning of 10.94tk which is increased from previous years which is a good performance and it considers an important indicator of corporate success.

2) Price earnings ratio.

For 2012

Price earnings ratio = 237.3010.94 = 21.69

For 2011

Price earnings ratio = 32729.56 =342.25

In 2012 the investors are paying 21.69 out of every 1tk of earnings, the ratio declines from the previous year’s significantly which will affect the investors to loose confident to invest.

3) Dividend per share.

For 2012

Dividend per share = 58852170026434760 = 2.22tk per share

For 2011

Dividend per share = 528160500264834760 = 1.99tk per share.

In 2012 the company is paying a dividend of 2.22tk per share, the ratio has increased from the previous year which is a good performance for the company which will attract the investor to invest in the current period.

4) Dividend payout.

For 2012

Dividend payout = 2.2210.94 = 0.20tk per share.

For 2011


Page | 17

In 2012 the company is paying dividend of .20tk per share which is slightly declined from the previous years, which is a bad performance; the company may improve this situation by increasing dividend per share.

5) Dividend Yield.

For 2012

Dividend yield = 2.22

237.30 = 0.94%.

For 2011

Dividend yield = 1.993272 = 0.06%.

In 2012 the dividend yield is 0.94% which is increased from the previous years which is a good performance which will boost the investor confidence to invest in the current period.


For 2012

Book value per share = 16266884255264836760 = 61.4

For 2011

Book value per share = 13817708990264834760 = 52.18

In 2012 book value per share of stock is 61.4tk which is greater than the previous year book value which indicates a good performance because the company has more common stock equity.

7) Market to book value ratio.

For 2012

Market to book value ratio = 237.3061.4 = 3.86

For 2011

Market to book value ratio = 327252.18= 51.53

In 2012 the investors are paying 3.86 for each 1tk of book value of stock, the ratio has decreased from previous years in significant amount which is a bad performance and it will lose the investors confident, the decrease in ratio is due to decrease in market price per common stock in the year 2012.

Page | 18

Financial Ratio Analysis of 2012-2013.

Liquidity ratio

1) Current ratio.

For 2013


For 2012

Current Ratio = 67455070084252934845 = 1.59 times

In 2013 current assets were 1.58 times higher than the current liabilities, the ratio declined from 2012 which indicates the company is facing some problem to pay its debt obligation, the company must use its asset to pay its liability.

1) Quick/ acid test ration.

For 2013

Quick/Acid test ratio = 5996697544−253683240

379243855 = 0.92 times

For 2012

Quick/Acid test ratio = 6745507008−2687818472

4252934845 = 0.95 times

In 2013 the current asset excluding inventories and prepaid expense were 0.92 times the current liabilities, the ratio declined from 2012. This is because the company has more inventories and it is difficult to convert inventories into finished goods, so the company must try to utilize their inventories efficiently so that it can be converted into finished goods to generate sale.

Activity ratios

1) Average collection period. For 2013Average collection period = ×365 =16.28days

For 2012Average collection period =×365 =18.38days

Page | 19

In 2013 on an average it took 16.28 days to collect money from the debtors, which is declined from the previous years, this indicates a good performance because in the company is taking shorter period of time to collect money from debtors that means the credit and collection management is efficient in the current year.


For 2013Average payment period= ×365 =39.5days.For 2012Average payment period =×365 =34.8days.

In 2013 the firm require on an average of 39.5 days to pay their accounts payable which is lower than the previous year, which means that in the current year the company is taking longer time to pay their accounts payable. As a result supplier will loose interest to sell on credits and in future they will face unavailable of suppliers.

3) Inventory turnover ratio. For 2013


For 2012

Inventory turnover = 91672536202687818472= 3.4 times

In 2013 the company sold out and restocked their inventories by 4.08 times the ratio has increased from 2012 which is a good performance because this indicates inventories are utilizing efficiently to turn into finished goods to generate sale.

4) Average age of inventory

For 2013Average age of inventory =×365 = 89.39days.For 2012Average age of inventory =×365 =107.02days.

For 2013 on an average inventory will last for 89.39 days which is less than the previous years which indicates a good performance, because inventories are selling out quickly to convert into finished goods to generate sales.

Page | 20

5) . Total assets turnover

For 2013

Total assets turnover = 1795448949623447645506= 0.77 times.

For 2012

Total asset turnover = 1605442524321453784762 = 0.75 times.

In 2013 using 1 taka total assets company generated 0.77 taka; the ratio has increased from 2012 which indicates a good performance because the firm is using its assets efficiently to generate sales.

6) Fixed asset turnover.

For 2013

Fixed asset turnover = 1795948949617450447962= 1.029 times.

For 2012

Fixed asset turnover = 1605442524314708277754= 1.092 times.

In 2013 using 1 taka of fixed asset company generated 1.029 taka, the ratio declined from 2013 which is a poor performance. The company is facing difficulties to generate sales do the company should take proper steps to use fixed asset efficiently to generates sales.

Leverage or Solvency Ratio

1) Debt to asset ratio.

For 2013

Debt to asset ratio = 460289932223447645506 = 19.6%

For 2012

Debt to asset ratio = 518690050721453784762 = 24.2%

For 2013 the debt ratio is 19.6% which is less than the previous year’s debt ratio which indicate a good performance as in the current year the firm has more asset to meet its debt obligation.

2) Total Debt to total equity ratio.

For 2013

Page | 21

Total debt to total equity ratio = 460289932218844746184= 24.43%

For 2012

Total debt to total equity ratio = 518690050716266884255 = 31.89%

In 2013 the total debt to equity ratio is less than the previous years which indicates a good performance, the stockholders has enough wealth to pay their debt obligation.

3) Time interest earned.

For 2013

Time interest earned = 3852810574325281016 = 11.85 times

For 2012

Time interest earned = 3321146713433581036 = 7.66 times

In 2013 earnings before interest and tax is 11.85 times than interest expense, the ratio is higher than the previous year which indicates a good performance of the company, the company is able to make its interest payment efficiently as the firm has enough earnings in the current period.

Profitability ratio

1) Gross Profit margin.

For 2013


17959489496 ×100 = 43.07 %

For 2012


16054425243×100 = 42.89%

In 2013 company is earning 43.07 taka out of 100 taka , the ratio increased from 2012 which is a good performance indicates that firm is converting sales into gross profit more efficiently.


For 2013

Page | 22

Net profit margin =3341424783

17959489496= 18.61 %

For 2012

Net profit margin=2897710641

16054425243 = 18.05 %

In 2013 the company is earning 18.61tk worth of sales remaining out of 100tk worth of sales after deducting all expenses and interests. The ratio is higher than the previous years which indicate a good performance by minimizing expenses and interest expenses.

3) Return on asset.

For 2013

Return on asset =3341424783

23447645506×100= 14.25%

For 2012

Return on asset =2897710641

21453784762×100= 20.96%

In 2013 the company earns 14.25out of 100tk worth of asset investment , the ratio increased from 2012 which indicates a good performance because the company is using its asset investment efficiently to generate profit.

4) Return on equity.

For 2013Return on equity =×100 =17.73%For 2012Return on equity =×100 =17.81%

In 2013 the company is earning 17.73tk out of every 100tk worth of stockholders investment, the ratio slightly fall which is caused due to some inefficient using of the stockholders investment but the business in this year might overcome the situation by using the stockholder wealth more efficiently to generate profit.

Market Ratios


For 2013


For 2012

Page | 23

Earnings per share =28797710641370768664 = 7.82tk per share

In 2013 for each outstanding shares the firm has a earning of 9.01tk which is increased from previous years which is good performance and it indicates an important indicator of corporate success.

2) Price earnings ratios.

For 2013

Price earnings ratio = $178.60

9.01

For 2012

Price earnings ratio = $237.30

7.82

In 2013 investor is paying 19.82tk out of every 1tk of earnings, the ratio declined from previous years significantly which indicates a bad performance so the investors will loose confidence to in invest in such securities.

3) Dividend per share

For 2013

Dividend per share = 662086900370768664 =1.79tk per share.

For 2012

Dividend per share = 588521700370768664 =1.58tk per share

In 2013 the company is paying a dividend of 1.79tk per share, the ratio increased from the previous years which is a good performance for the company which will attract the investors to invest in the current year

4) Dividend yield.

For 2013


178.60 = 1.0 %.

For 2012


237.30 = 0.67%.

In 2013 dividend yield is 1.0% which is increased from 2012 which is a good performance, the investor will gain confidence to invest in the current year.

Page | 24

. 5) Dividend payout

For 2013


For 2012


In 2013 the company is paying a dividend of 0.199tk per share which is declined from previous years, which is a bad performance the company may improve the condition by increasing dividend per share.


For 2013

Book value per share = 18844746184370768664 = 50.83.

For 2012

Market to book value ratio= 16266884255370768664 = 43.87.

In 2013 book value per share of stock is 50.83tk which is greater than the previous year book value which indicates a good performance because the company has more common stock equity.

7) Market/Book ratio.

For 2013

Market/book ratio = 178.6050.83 = 3.51

For 2012

Market/book ratio = 237.3043.87 = 5.41

In 2013 the investors are paying $3.51 for each $1 of book value of stock, the ratio has decreased from previous years which is a bad performance and it will lose the investors confident, the decrease in ratio is due to decrease in market price per common stock.

Page | 25

Page | 26

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