University of Asia Pacific

Department of Business Administration

Internship Report on
“Financial Performance Analysis of Beximco Pharmaceuticals Ltd”

Submitted to:

Mr. Shamsad Ahmed

Associate professor
Department of Business Administration
University of Asia Pacific

Submitted by:

Borun Kumar
Registration No: 09102038, Roll No: 38
Batch: 26th Batch

Date of submission: 5th September, 2013

Submitted by: Borun Kumar Page 1

 Beximco Pharmaceuticals Limited

Internship Report
on
“Financial Performance Analysis of Beximco Pharmaceuticals Ltd”

A Study on
Operational Headquarters
19 Dhanmondi R/A, Road No-7, Dhaka-1202

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 here for you, here for life

BEXIMCO
PHARMAECUTICALS LIMITED

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Submitted by: Borun Kumar Page 4
 INTERNSHIP REPORT
ON
Financial Performance Analysis
OF
“Beximco Pharmaceuticals Limited”

Submitted To:

Mr. Shamsad Ahmed

Associate professor
Department of Business Administration
University of Asia Pacific

Supervised By:

Mr.Kamal Uddin Ahmed

Manager, Accounts & Finance

Beximco Pharmaceuticals Ltd.

Submitted By

Borun Kumar
Registration No: 09102038
Batch: 26th Batch
Department of Business Administration
University of Asia Pacific

Date of Submission: September 05, 2013

Submitted by: Borun Kumar Page 5

 Letter of Transmittal
September 5, 2013

To

Mr. Shamsad Ahmed

Associate professor
Department of Business Administration
University of Asia Pacific

Subject: Submission of Internship Report

Dear Sir,

It is my great pleasure to submit you my internship report on “Financial Performance Analysis of

Beximco Pharmaceuticals Limited”. I have tried my best to complete this report properly following
the guidelines provided by you and concerned organization.

I have confidence that the internship program has increased both of my practical experience and
theoretical knowledge to a great extent. I will be obliged to answer any query that may arise during the
evaluation of this report. So, I am fervently requesting and hope that you would be kind enough to
accept my report and oblige thereby.

Sincerely Yours,

______________________

Borun Kumar

Registration No: 09102038

Batch: 26th Batch

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Department of Business Administration
University of Asia Pacific

It’s difficult for me to thank all of those marvelous people who have contributed something of them to
this report. There are of course some very special people who cannot go without mention.

At first I express my gratitude and indebtedness to my academic supervisor Mr. Shamsad Ahmed,
Associate professor of University of Asia Pacific for his continuous guidance, important advice,
encouragement and suggestion during the preparation of the report. I thank of his for sparing her
valuable time to read the report.

Then, I express my sincere gratitude to Mr. Jamal Ahmed Choudhury, Executive Director, of BPL
for his guidance, constants supervision and constructive suggestions. Without his help this report
might not have been a comprehensive one. I would also like to thank Mr. Kamal Uddin Ahamed,
Manager, Accounts and Finance. Without his help I cannot prepare my report so informative. I have
bothered him so many times in connection with my works, both during and after normal working
hours.

Finally I am grateful to all the cooperative staffs of the Accounts Department of BPL. As also I would
like to give thanks especially to my friends & many individuals, for their enthusiastic encouragements
and helps during the preparation of this report and for their assistance in typing and proof reading this
manuscript.

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 Executive Summary
The report is based on “Financial Performance Analysis of Beximco Pharmaceuticals Limited”.
The purpose of this report is to understand how the financial position, liquidity and profitability
analysis are used to evaluate the periodic financial success of a firm.

The global pharmaceutical industry as well as the Bangladeshi pharmaceutical industry has moved a
long way in the last ten years. We have seen pharmaceuticals market growing to the new heights and
realized that the most promising opportunities are to be found with world’s emerging economies. The
increasing aged population globally, significant demographic shift, would result in the global
pharmaceutical market registering a healthy growth over the next decade.

Pharmaceutical industry is a knowledge-based market. Beximco Pharmaceutical Ltd. (BPL) is a well-

established pharmaceutical company in Bangladesh. BPL holds the second position in this highly
competitive knowledgeable market. BPL believes new competitive advantages need to be identified to
succeed in the industry and at present new comer activity becomes the most challenging job. BPL is
such a company, which never compromise with new comer. From the beginning they are providing
that support but day by day its demand is rapidly increasing and BPL always ready to match with that
demand. BPL starts to provide promotional back up from the launching date of new products. BPL
ensure that the shareholder wealth maximization. The history of pharmaceutical business of the
company dates back to the early 70s, when it started to import market and distribute medicines from
world renowned companies like Upjohn Inc. of USA and Bayer AG of Germany. Since the very
beginning, the company was highly successful in generating increased demand for its products which
eventually justified local production. BPL has now grown to become one of Bangladesh’s leading
pharmaceutical companies, supplying more than 8% of country’s total medicine need.

Today Beximco Pharma manufactures and markets its own branded generics for several diseases
including AIDS, cancer, asthma, hypertension, and diabetes for both national and international
markets.

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Beximco Pharma believes that being in the business which deals with human health makes us more
responsible. Products come in a wide range of dosage forms including tablets, capsules, dry syrup,
powder for suspension, cream, ointment, suppositories, metered dose nasal sprays, large volume
intravenous fluids, metered dose inhalers etc. ensuring the global standard of quality. Pharmaceuticals
sector of Bangladesh like all other industries is going to face new challenges. Rising price of materials
in the international market and higher domestic inflation is going to be a big issue. Besides,
competition in the local pharmaceuticals market is expected to intensity further. Beximco has to be
aware of those issues to become a market leader in the industry. Though the sales revenue has
decreased in the last year due to various reasons, it has the ability to regain its glorious pasts and
advanced further.

The report mainly highlights the results of various ratio analysis of the company. In order to make the
analysis more informative, inter-firm comparisons have been provided by also performing ratio
analysis of other leading pharmaceutical companies in Bangladesh. Moreover, all Pharmaceuticals
firms try to keep this information secret in this competitive market. Like all other pharmaceuticals
company Beximco follows standard costing method for medicine productions. The unit price of each
medicine is calculated by batch wise.

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 Table of Content
Name Page No
Executive Summary iv
Introduction
1. Introduction 2
1.1 Origin of the Report 3
Chapter 1.2 Scope of the Report 3
1.3 Significance of the Report 3
One 1.4 Objective of the Report 3
1.5 Mythology of the Report 4
1.6 Organization of the Report 5
1.7 Limitations of the Report 5
Organization Part
2.1 Historical Background 7
2.2 Vision 9
Chapter 2.3 Mission 9
Two 2.4 Company Objective 9
2.5 Core Value 9
2.6 Broad and Management 10
2.7 Products 11
2.8 Position of BPL in overall Pharmaceutical Industry
2.9 Organization Hierarchy 12
2.10 Departments of BPL and their activities 13
Learning Part
Financial Performance Analysis of Beximco Pharmaceuticals Ltd
3.1 Ratio Analysis 18
3.1.1 Short term Liquidity Ratio 18
3.1.2 Activity Ratio 21
3.1.3 Profitability Ratio 25
Chapter 3.1.4 Debt Coverage Ratio 28
Three 3.1.5 Market Value Ratio 30
3.2 Comparative Analysis 32
3.2.1 Short term Liquidity Ratio 32
3.2.2 Activity Ratio 34
3.2.3 Profitability Ratio 37
3.2.4 Debt Coverage Ratio 41
3.2.5 Market Value Ratio 43

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 3.3 SWOT Analysis 44
Findings and Conclusion
Chapter 4.1 Key Findings 49
Four 4.2 Conclusion 50
4.3 Recommendation 51
Reference 52
Appendix 54

Chapter One

1. Introduction:
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Financial Performance evaluation of a company is usually related to how well a company can use its
assets, share holder equity and liability, revenue and expenses. Financial ratio analysis is one of the
best tools of performance evaluation of any company. In order to determine the financial position of
the Beximco Pharmaceutical Limited and to make a judgment of how well is the efficiency of Beximco
Pharmaceutical Limited, its operation and management and how well the company has been able to
utilize its assets and earn profit.

I use ratio analysis for easily measurement of efficiency, liquidity position, asset management
circumstance, investment condition, and profitability, market value and debt coverage situation of
the Beximco Pharmaceutical Limited for performance evaluation. It analyzes that how the company
uses of its assets and control of its expenses. It determines the greater the coverage of liquid assets
to short-term liabilities and it also compute ability to pay. It measures overall efficiency and
performance of Beximco Pharmaceutical Limited. It determines of share market condition of Beximco
Pharmaceutical Limited.

 
Beximco Pharmaceutical Limited is the most famous company in Bangladesh. It was established in
1976 but their converted into public limited company in 1985. It is the first among all national,
multinational, private and public of pharmaceutical company of Bangladesh. Their mission is to
produce and provide quality healthcare relief of people, maintain strongly ethical standard in
business operation also ensuring benefit to the shareholder, stakeholder, and society. Their vision is
social wellbeing of the investors, employee and society at large, wealth financial and moral gains as a
part of the process of the human civilization. Their objectives are to conduct transparent business
operation based on market mechanism within the legal and social frame work.

1.1 Origin of the Report:

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The report is originated to make a study on the Accounts and Finance procedure and the Financial
Performance Analysis of Beximco Pharmaceuticals Limited as a part of the fulfillment of internship
program required for the completion of BBA program of University of Asia Paciic. As the part of BBA
curriculum this project is assigned to me by Mr. Jamal Ahmed Choudhury, Executive Director,
Accounts & Finance and Mr. Kamal Uddin Ahmed, Manager. Accounts & Finance of Beximco
Pharmaceuticals Ltd and approved by the academic Supervisor Mr. Shamsad Ahmed, Associate
professor of Department of Business Administration, University of Asia Pacific.

1.2 Scope of the Report:

There were huge scopes to work in the field of the report. Considering the dead line, the scope and
exposure of the paper has been wide-ranging. The study, “Financial Perormance analysis of Beximco
pharmaceuticals Limited” has covered Beximco Pharmaceuticals Ltd. profit flows. The impact of
different external and internal factors on the flow of profit by BPL has been showed in this report. By
preparing this report it becomes more understandable about the real condition of the
pharmaceutical industry in Bangladesh and the flow of profit through the different challenge.

1.3 Significance o the Report:

The perfect coordination between theory and practice is important in the context of the modern
business world in order to resolve between these two areas. The main reason of this report is
developed into recognizable with the realistic business world to get practical knowledge about the
corporate world. Each and everyone know that there is on substitute of practical knowledge which is
more advantageous than theoretical aspect.

1.4 Objective of the Report:

The general objective of the study is to fulfill the requirement of the Graduation under the Bachelors
of Business Administration program of University of Asia Pacific as per university policy. To be more
specific, this study entails the Financial Analysis of Beximco Pharmaceuticals Limited to figure out and
observe the financial performance of Beximco Pharmaceuticals Limited over the past 4 years.

1.4 (a) Primary Objective

The primary objective is to determine the position of Beximco pharmaceuticals Ltd by
analyzing their profit.

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1.4 (b) Secondary Objective
To identify different types o independent variables that help to analyze the profit of Beximco
Pharmaceuticals Limited.
To identify and analyze Beximco Pharma policy measures that influences the flow of profit
To identify different factors that effect profit earnings of Beximco Pharmaceuticals Limited.
To analyze the present value of Beximco Pharmaceuticals Limited.

1.5 Mythology of the Report:

The following methodology was followed throughout the study .The study is based on both primaries
as well as secondary data. Data regarding the organization profile collected in the following ways:

1.5 (a) Primary Source:

 
Careful observation of various activities of related section of that particular department.
Discussions with the officials of Accounting and Finance department.

1.5 (b) Secondary Source:

Organizational Brochures/ Annual Reports.

Online information.
Different BPL publications.
Other relevant written materials.

1.5 (c) Data Collection Techniques:

Some of the primary data were collected by observing others doing their jobs.

Much of the primary data were collected by the informal interviewing of the company
officials.

Most of the secondary data were collected by the review and study of relevant reports and
documents.

1.6 Organization of the Study:

The report is divided into five parts. The first part is the introductory chapter. The second part covers
organizational part (a brief overview of Beximco Pharmaceutical Limited). The Third part deals with

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report part. The fourth part includes overall findings with concluding remarks. The last part provides
references.

1.7 Limitations of the Report:

An enthusiastic effort was applied to conduct the study work and to bring a reliable and successful
result from which proper strategy can be adapted to this report. Some limitations were faced while
preparing this report. Some of those limitations are highlighted below:

 
All the comments made, conclusion reached and suggestions for possible improvement
provided are purely based on my level of understanding, knowledge and my way of
interpreting a particular statement.

Unable to collect specific information of BPL.

To protect the organizational confidentiality some parts of the report are not in depth.

The report covers only profitability analysis. It does not cover management, marketing, HRM
or other business related issues.

Ratio analysis is done only based on Annual Report.

Chapter Two
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2.1 Historical Background:
Beximco Pharmaceutical Ltd (BPL), is a leading edge pharmaceutical company based in
Dhaka, Bangladesh and is a member of the Beximco Group. The history of pharmaceutical
business of the company dates back to the early 70s, when it started to import market and
distribute medicines from world renowned companies like Upjohn Inc. of USA and Bayer AG of
Germany. Since the very beginning, the company was highly successful in generating increased
demand for its products which eventually justified local production. It completed its registration in
1976 and started its operation in 1980 by manufacturing and marketing licensee products of Bayer
AG of Germany and Upjohn Inc. of USA. After its initial years of struggle it broke ground with the
launching of its own products in 1983. In 1985 BPL was listed in Dhaka Stock Exchange (DSE) as a
Public Limited Company. The journey continued and barrier after barrier were crossed,
challenges were faced and overcome to transform BPL into what it is at present. Now it has
grown to become nation's one of the leading pharmaceutical companies, supplying more than 10%

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of the country's total medicine need. In the process, it was enlisted in Chittagong and London
Stock Exchange. Today Beximco manufactures and markets its own `branded generics' for almost
all diseases from AIDS to cancer, from infection to asthma, from hypertension to diabetes for
both national and international markets.

It manufactures a range of dosage forms including tablets, capsules, dry syrup, powder, cream,
ointment, suppositories, large volume intravenous fluids, metered dose inhalers etc. in several
world-class manufacturing plants, ensuring high quality standards complying with the World
Health Organization (WHO) approved current Good Manufacturing Practices (cGMP). Beximco also
contract manufactures for major international brands of leading multinational companies.

Beximco has a strong market focus and is anticipating continued future growth by leveraging
business capabilities and developing superior product brands and markets. In particular it is very
interested in developing a strong export market in USA and Europe. To meet the future demand it
has invested over US 50 million dollar to build a new state-of-the-art manufacturing plant,
confirming to USFDA and UK MHRA standards. This new plant will also offer contract-
manufacturing facility to leading pharmaceutical companies, especially from Europe and US.

(Source: http://beximco-pharma.com/about-us.html)

Company profile of Beximco Pharmaceuticals Ltd:

Corporate Headquarters: 17 Dhanmondi R/A, Road No. 2

Dhaka 1205, Bangladesh.

Operational Headquarters: 19 Dhanmondi R/A, Road No. 7

Dhaka 1205, Bangladesh.
Factory: 126 Kathaldia, Tongi, Gazipur
Year of Establishment: 1976
Commercial Production: 1980

Status: Public Limited Company

Business Lines: Manufacturing and Marketing of Pharmaceutical
Finished Products and Active Pharmaceutical

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 Ingredients (API’s)
Authorized Capital in Taka: 9,100 million
(According to annual report
2012)
Paid-up Capital in Taka: 2,517 million
(According to annual report
2012)
Net Turnover in Taka: 1,198 million
(According to annual report
2012)
Stock Exchange Listing: Dhaka, Chittagong.

Number of Employees: 2,700

Overseas Offices & Associates: UK, USA, Pakistan, Myanmar, Singapore, Kenya,
Yemen, Nepal, Cezch Republic.
Export Markets: Bhutan, Cambodia, Germany, Hong Kong, Iran, Iraq,
Malaysia, Russia, South Korea, Srilanka, Thailand,
Ukraine, Vietnam.

(Source: Annual Report of BPL-2012)

2.2 Vision:
We will be one of the most trusted, admired and successful pharmaceuticals companies in the region
with a focus on strengthening research and development capabilities, creating partnerships and
building presence across the globe.

2.3 Mission:
We are committed to enhancing human health and well being by providing contemporary and
affordable medicines, manufactured in full compliance with global quality standards. We continually
strive to improve our core capabilities to address the unmet medical needs of patients and to deliver
outstanding results for our shareholders

2.4 C OMPANY O BJECTIVE

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Our objectives are to conduct transparent business operations within the legal & social framework
with aims to attain the mission reflected by our vision.

2.5 Core Values:

Our core values define who we are; they guide us to take decisions and help realize our individual
and corporate aspirations:

Commitment to quality: We adopt industry best practices in all our operations to ensure
highest quality standards of our products.
Customer Satisfaction: We are committed to satisfying the needs of our customers, both internal
and external
People Focus: We give high priority on building capabilities of our employees and empower them to
realize their full potential
Accountability: We encourage transparency in everything we do and strictly adhere to the
highest ethical standards. We are accountable for our own actions and responsible for sustaining
corporate reputation
Corporate Social Responsibility: We actively take part in initiatives that benefit our society and
contribute to the welfare of our people. We take great care in managing our operations with high
concern for safety and environment.

(Source: Annual Report of BPL -2012)

2.6 BOARD AND MANAGEMENT

Beximco Pharmaceuticals Ltd. is managed by the Board of Directors, an Executive Committee and a
Management Committee. Board of Directors is responsible for the corporate governance. It consists
of ten members including the Chairman, A S F Rahman and the Vice Chairman, Salman F Rahman.
The five-member Executive Committee is headed by Mr. Osman Kaiser Chowdhury who is also a
member of the Board of Directors. The Executive Committee is accountable for both operational and
financial performance of the company. This committee is also responsible for budget approval, policy
adoption or changes, new project review, compliance audit etc. The Management Committee
comprises of eleven professionals who are one of the bests in Bangladesh in their own fields. This
committee is leaded by Mr.Nazmul Hasan (MP), Managing Director (MD) who is responsible for the
overall management of the business. This committee reviews and manages day-to-day business
operation and recommends strategy options to the Executive Committee.
The Board of Directors:-

A S F Rahman Chairman
Salman F Rahman Vice Chairman
Nazmul Hassan MP Managing Director
Iqbal Ahmed Director
Mohammad Abul Qasem Director

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 Dr. Abdul Alim Khan Director
Abu Bakar Siddiqur Rahman Director
Advocate Ahsanul Karim Director
Md. Asad Ullah, FCS Company Secretary

The Executive Committee:-

Osman Kaiser Chowdhury Member of the Board of Directors

Nazmul Hassan MP Managing Director
Ali Nawaz Chief Financial Officer
Afsar Uddin Ahmed Director, Commercial

The Management Committee:-

Nazmul Hassan MP Managing Director

Osman Kaiser Chowdhury Member of the Board of Directors
Rabbur Reza Chief Operating Officer
Ali Nawaz Chief Financial Officer
Afsar Uddin Ahmed Director, Commercial
Lutfur Rahman Director, Manufacturing
Zakaria Seraj Chowdhury Director, International Marketing
A R M Zahidur Rahman Executive Director, Production
Shamim Momtaz Executive Director, Manufacturing
Mohd. Tahir Siddique Executive Director, Quality
Jamal Ahmed Choudhury Executive Director, Accounts & Finance

Products:
(Source: Annual Report of BPL -2012)
2.8

The company’s diverse product portfolio encompasses a wide variety of therapeutic categories,
including antibiotics, analgesics, respiratory, cardiovascular, central nervous system, dermatology,
gastrointestinal etc. BPL currently produces 265 generics in 462 strengths and dosage forms and
many of the company’s brands are consistently occupying leading positions in their respective
therapeutic categories.

In 2012 Beximco Pharma introduced 40 new generics in a total of 55 presentations, which include
seven ophthalmic drops, three HFA asthma inhalers and also drugs in categories such as, three
cardiovascular, two multivitamins, two musculoskeletal, two anti-infective, and one anti- diabetic,
among others.

The three HFA-based inhalers which were launched for the first time in Bangladesh in 2012. Also
introduce for first time into the market was a formulation of Paracetamol 665 mg. Napa Extend.

Baximco Pharma’s Growth prospects remain excellent with key blockbuster products such as Napa
and Neoceptin-R in its portfolio.

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 nd th
In 2012 Napa and Neoceptin R ranked 2 and 4 respectively on the national “Top Five” list. More
over ten of BPL’s brands have annual sales in excess of BDT 100 million each.
Block Buster product:

Napa Highest selling drug in Bangladesh

Pharmaceutical market in terms of unit.
Neoceptin-R Highest selling drug in Bangladesh
pharmaceutical market in terms of
Bextrum/Bextrum Gold Emerged
value. as the most admired and highest
selling nutritional supplement in Bangladesh
Market in just one year.
Amdocal Highest selling cardiovascular drug in BD in
terms of value.
Tofen Highest selling oral anti-asthma drug in BD in
terms of value.
Azmasol Highest selling mastered dose inhaler in
Bangladesh in terms of value.
(Source: Annual Report of BPL-2012)

2.9 Position of Beximco Pharmaceutical Ltd. in overall Bangladeshi

Pharmaceutical Industry:
Ten companies are occupying more than 60 % of market share, where there are more than 250
(registered and unregistered) companies in Bangladesh Pharmaceutical Market. Out of these top ten
pharmaceutical companies in Bangladesh, eight are local companies, while only two are
multinational companies (MNC’s). The top three domestic manufacturers, namely Square, Incepta
and Beximco Pharmaceuticals are having a combined market share of about 37% of the total
pharmaceutical market of the country

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 Market Share Square
Incepta
19% Beximco
Opsonin
32%
Renata
Eskayef
10%
Aristopharma
ACI
9% Acme
4%
4% Drug International
5%
4% Others
4% 5%
5%

(Source: Published by: The Financial Express, Date: June 13, 3013 )

2.10 Organization Hierarchy:

Chairman

Vice Chairman

Managing Director

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Human Resource Department Chief Financial Officer (CFO) Chief Operating Officer (COO)
 Core- HR
Finance and Accounts Purchases Dept.

Sr. Manager
Executive Director Senior Manager Marketing Dept. Sales Dept

Manager Manager
Manager Director GM

Sr. Officer Deputy Manager

Senior Officer Sr. Manager DGM

Officer Assit. Manager

Officer
Manager Sr. Sales Mag
ADMIN
Sr. Officer

Deputy Manager RSM

Manager
Officer

Assit Mang Sr. Officer ASM

Sr. Assit. Officer
Sr. Officer
Officer MR
Assit. Officer
Officer

2.11 Department of BPL and their activities:

Beximco Pharmaceuticals Ltd.

Beximco Pharmaceuticals Ltd. is one of the four companies strategically included in the Beximco
Chemical Division. BPL attained turnover of Tk. 2.453 billion during 2000.

It all began in 1980 when BPL's first product made under license of Bayer AG, Germany rolled out of a
small manufacturing plant in Tongi, Dhaka. Products made under license of Upjohn Incorporated,
USA followed. After its initial years of struggle it broke ground with the launching of its own products
in 1983. Today, BPL holds almost 15% share in the domestic market.

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The commissioning of BPL's Basic Chemicals Unit in 1990, established a very significant milestone for
it. It not only met 90% of the country's demand for two vital raw materials, ampicillin and amoxycillin
but also started selling these to overseas markets, including South Korea and Malaysia.

Departmentalization

BPL operates its business through extensive departmentalization as needed. This is for specified
effectiveness of the tasks. The business activities of BPL, BIL and PCL are directed, controlled and
monitored from the head office of Beximco Pharmaceuticals Ltd. located at 7A, Dhanmondi, Dhaka.
Being a leading Pharmaceutical company in the country it employs good number of people in
different departments to keep their businesses thriving. The following major departments coordinate
the activities of BPL, BIL and PCL:
Planning department
Purchase Department
Sales department
Sales education and training department
Medical services department
Business Research & Development department
International marketing & fine chemicals department
MIS department
Finance and Accounts department
(Source: Knowledge Center, Library of Beximco Pharmaceuticals Ltd )

2.9.1 PLANNING DEPARTMENT

The planning department ensures smoothness of total operation of BPL. It is concerned with the
following:

i) The production planning and

ii) Raw material procurement.
iii) Inventory Planning

Based on sales forecast from the CPM planning department breaks up the yearly sales forecast to
monthly basis and develop the planning of production, purchase and stock maintenance. It also
initiates the negotiation of purchase. It refers the suppliers’ quotations to the purchase departments.

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Planning department try to ensure buffer stock of three months of all the raw materials to meet any
untoward events or circumstances in market.

2.9.2 PURCHASE DEPARTMENT

The purchase department is concerned with all the purchases of BPL. Apart from purchasing it keeps
the record for tracking the costs of the company. This department works in coordination with
planning department for negotiation and price fixing.

2.9.3 SALES DEPARTMENT

To follow the recent management of the business world the sales department has been completely
separated from marketing department. It sets the forecast in coordination with marketing
department and upon fixation of the sales it is the responsibility of the sales department to realize
the yearly sales volume forecasted.

Medical representatives are farthest unit of the organization. They are to generate demand for
products. They are trained before sent for field.

2.9.4 TRAINING DEPARTMENT

Training department is to provide the training to the medical representatives of the company. This
training is necessary to improve the quality of job-related function. The curriculum of training varies
from group to group. The department basically offers 4 types of training programs:
 Induction Training Programs (for MRs )
 Supervisory Management Programs (for FSs)
 Advanced Supervisory Management
 Refresher Training Programs (for everyone in sales in as and when basis).

The MRs are virtually the direct product of this training department. The selling skill of the MRs are
dig out through the training session on that ultimately BPL depends for attaining its target sale.

2.9.5 MIS DEPARTMENT

The MIS department is the department that takes care of total automation of BPL. It supports the
hardware and network of the company and the factory. It maintains the automation regularly and

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 keeps the pace with the global IT. The MIS department also maintains the radio-link between the
factory and the head-office.

Though separately dealt before, recently software department has been incorporated with MIS
department. This software section is to work for developing software solutions as per organizational
requirements. It also supports the other companies’ requirements of the chemical division. The
facilities of MIS department are available round the clock for 24 hours.

2.9.6 MSD

MSD stands for Medical Services department. It is a unique department in this industry as BPL
established this first ever in order to create easy relationship through using the professional linkage
with the doctors, the ultimate customer of the pharmaceutical companies.

This is a supporting department that provides services (e.g., slide preparation, providing different
journals, books etc.) to the health professional on different issues and receives feedback from them.
It arranges seminars on different issues such as diseases and their cures in different parts of the
country. It publishes a special ‘Medical Newsletter’ quarterly and sends the current issues to the
enlisted doctors at free of cost. The newsletter consists of important, recent medical articles. It also
provides news gathered from Internet and allows free browsing facility for the doctors. Thus it helps
the medical community and at the same time increases the company image outside.

BUSINESS RESEARCH & DEVELOPMENT DEPARTMENT

The department began its operation for the purpose of working on market development – both
domestic and international. It assists product development and marketing of new products. The
product development process is as follows:

Molecular Stability
Market Research Development SampleAnalytical Method Dev.
Structure Profile

Quality Assurance (in each stage in factory) and Quality Control improvement is another concern of
this department. It suggests the SOP (Standard Operating Guideline), which is the biggest part of
GMP (Good Manufacturing Practices). It is mention that by practice BPL follows the highest standard
of quality suppose as suggested by WHO. Purchase and material management coordination is also
included within responsibilities of this department.

2.9.7 INTERNATIONAL MARKETING

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It is note that BPL has started marketing its product internationally. This department is concerned
with the international promotion and marketing of BPL finished products and basic chemicals. It
analyzes country analysis in terms of health status, economy, market and its growth, legal bounds of
entering the market with its product etc to find the feasibility to market its products. So far it has 18
export outlets.

2.9.8 MULTIMEDIA DEPARTMENT

BPL is the only pharmaceutical company that has a multimedia department. This department is
helping in the promotional activities of BPL. It designs medical videos for the doctors. The color, size,
shape, lettering etc. of the text are carefully selected to attract the target audience easily. It has
designed some Kiosks that have been placed in some medical colleges for the students to learn and
be trained.
The department also provides audio-visual aids to other departments of the company and also
assists to decorate the publications.

2.9.9 FINANCE AND ACCOUNTS DEPARTMENT

There are three sections in this department.

 Treasury section
 Accounts section
 Cost and budget section

Treasury section deals with banks and bills. It also looks after the cash planning and management.

Accounts section is there to maintain all records and transactions. it is automated with aid of the
software named MAPICS (Manufacturing Accounting Planning Information Control System).

Cost and budget section identifies the cost centers and prepares the budget. Cost section calculates
the product cost and cost of goods sold. The annual budget preparation starts at October. Budget
review is done quarterly (internally) and half-yearly (by the top management). It compares the
budgeted and actual sales and expenses and prepares reports on them.

Submitted by: Borun Kumar Page 27

 Chapter Three

Submitted by: Borun Kumar Page 28

Financial Performance Analysis of Beximco Pharmaceuticals Ltd

3.1 Ratio Analysis:

Ratio Analysis is a widely used tool of financial analysis. It is defined as the systematic use of ratio to
interpret the financial statements so that the strength and weakness of a firm as well as its historical
performance and current financial condition can be determined. A financial ratio (or accounting
ratio) is a relative magnitude of two selected numerical values taken from an enterprise’s financial
statements. Often used in accounting, there are many standard ratios used to try to evaluate the
overall financial condition of a corporation or other organization. Financial ratios may be used by
managers within a firm, by current and potential shareholders (owners) of a firm, and by a firm’s
creditors.

Financial analysts use financial ratios to compare the strengths and weaknesses in various
companies. If shares in a company are traded in a financial market, the market price of the shares is
used in certain financial ratios. Ratios can be expressed as a decimal value, such as 0.10, or given as
an equivalent percent value, such as 10%. Some ratios are usually quoted as percentages, especially
ratios that are usually or always less than 1, such as earnings yield, while others are usually quoted as
decimal numbers, especially ratios that are usually more than 1, such as P/E ratio; these latter are
also called multiples. Given any ratio, one can take its reciprocal; if the ratio was above 1, the
reciprocal will be below 1, and conversely. The reciprocal expresses the same information, but may
be more understandable: for instance, the earnings yield can be compared with bond yields, while
the P/E ratio cannot be: for example, a P/E ratio of 20 corresponds to an earnings yield of 5%. 

Sources of data for financial ratios

Submitted by: Borun Kumar Page 29

Values used in calculating financial ratios are taken from the balance sheet, income statement,
statement of cash flows or (sometimes) the statement of retained earnings. These comprise the
firm’s “accounting statements” or financial statements. The statements’ data is based on the
accounting method and accounting standards used by the organization.

3.1.1 Short Term Liquidity Ratios:

Liquidity ratio measures the firm’s ability to meet its obligations, ability to pay its obligation and
when they become due. These ratios establish relation between cash and other current asset and
current liabilities. Commonly used ratios are

Current Ratio
Quick Ratio

3.1.1 (a) Current Ratio:

An indication of a company's ability to meet short-term debt obligations; the higher the ratio, the
more liquid the company is. Current ratio is equal to current assets divided by current liabilities. If
the current assets of a company are more than twice the current liabilities, then that company is
generally considered to have good short-term financial strength. If current liabilities exceed current
assets, then the company may have problems meeting its short-term obligations.

Current Ratio = Current Asset / Current Liabilities

Current Ratio 2009 2010 2011 2012

Current assets 6916737893 6191667831 7148462753 8197421953

Current liability 2321451642 2513157232  2648161988  3064944769

2.98     2.50     2.70 2.67

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 Current Ratio
3.1

3 2.98

2.9

2.8
2.7
2.7 2.67 Current Ratio
2.6
2.5
2.5

2.4

2.3

2.2
2009 2010 2011 2012

Analysis: The current ratio measures the company’s ability to pay off its current liability. Here we can
see that current ratio was highest in 2009 with compare in preceding years. In the table we see that
in 2009 the ratio is only 2.98 times, in the 2010 decrease to 2.5 times and again increase in 2011 by
2.70 times. In 2012, we see that the ratio is quite stable to 2.67.

This ratio gives us a gross idea of liquidity position of the company. But it also denotes that company
has huge idle money, so it is not good sign for the Beximco Pharmaceuticals Ltd. So in a concluding
note I would like to say company should utilize their idle money in a profitable manner.

3.1.1 (b) Quick Ratio:

A measure of a company's liquidity and ability to meet its obligations. Quick ratio, often referred to
as acid-test ratio, is obtained by subtracting inventories from current assets and then dividing by
current liabilities. Quick ratio is viewed as a sign of company's financial strength or weakness (higher
number means stronger, lower number means weaker).

Quick Ratio= (Current assets-Inventory)/ Current Liabilities

Quick Ratio 2009 2010 2011 2012

(Total Current (6916737893– (6191667831)– (7148462753)– 8197421953–
Assets – Inventory) 1722953284) (1983809444) (2291844631) 3433987981
 Current Liability 2321451642 2513157232  2648161988  3064944769

     2.24     1.67 1.83 1.88

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 Quick Ratio
2.5
2.24

2 1.83 1.88
1.67

1.5
Quick Ratio

0.5

0
2009 2010 2011 2012

Analysis: Quick ratio is the most conservative ratio in calculating liquidity position. Here we can see
that acid-test was 2.24 in 2009, than 2010 decreases aging 2011 increases. In 2012, we see that the
quick ratio was increasing to 1.88. Thus, it would seem that in the last year BPL was much better
position in 2012.The Company’s current liquidity position is more than satisfactory.

3.1.2 Activity Ratio

Activity ratios are used to evaluate the competence, which the company manages and utilizes on its
asset. This ratio also calls the turnover ratios because they indicate the speed with which the assets
are transformed or turnover into sales. A proper balance between assets and sales generally reflects
on that the assets.

The Activity ratio we can satisfy on the three ratios, those are:

Receivable turnover.
 Inventory turnover
Assets turnover

3.1.2 (a) Receivable Turnover:

Submitted by: Borun Kumar Page 32

Receivable turnover ratio indicates the rate of receivable to turn into cash. It indicates the level
outlay in receivables wanted to continue the company’s sales stage. This also events of the
helpfulness of the company’s credit strategy.

Receivable turnover in days = Account Receivable x 360/Sales

Average   2009  2010   2011 2012

Collection Period
(694111730 (821356439 x (978224317 x 360) (1162404807 x360)
(A/R x 360 days) x360) 360) 7890241843 9289115284
Total Credit Sales 486825491  6490847353
5
51.33 days 45.55 days 44.63 days 45.05 days

Average Collection Period: Analysis:

This ratio helps to find out average collection period of accounts receivables. The lower the collection
periods the higher the management efficiency measure collect the account receivables. We see that
average collection period was better in 2012. But previous three years it was increased due to
increase of sales volume.

Receivable turnover

Receivable turnover = 360 days / Average collection Period

A/R Turnover 2009 2010 2011  

2012
   360 days 360 days 360 days 360 days 360 days
Average 51.33 days 45.55 days  44.63 days  45.05days
Collection Period
7.01 times 7.90 times 8.07 times 8.00 times

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 60

51.33
50
45.55 44.63 45.05

40

30 Receivable turnover
Receivable turnover in days

20

10 7.01 7.9 8.07 8

0
2009 2010 2011 2012

Analysis: Accounts receivables turnover is measure the number of times per year that the average amount of
receivables is collected and transfers the cash amount. If the organization account receivable turnover
increase then the average collection period decrease and vice-versa. For Beximco, Receivable Turnover is 7.01
times in 2009 and 2010 is 7.9. Also Receivable Turnover in Days has increased in 2011. Here we see that in
2012 is remaining stable in 8.00 times. It was last three years increase or decrease of account receivable.

3.1.2 (b) Inventory Turnover (IT):

The liquidity of the company’s register can be considered by this ratio. Its ratio indicates how many
periods it is needed to twist inventory of sales on a standard. This event on the efficiency of the
company’s inventory organization.

Inventory Turnover = Cost of goods sold/ Avg. inventory

Inventory Turnover in days = 360 days /IT

Submitted by: Borun Kumar Page 34

Inventory Turnover 2009 2010 2011 2012

Cost of Goods Sold 2566206626   3317640254   4103709021 4899713857

Average Inventory (3228241377)/2 (3706762728)/2 (4275654075)/2 (4725832612)/2

1.59 times 1.79 times 1.92 times 2.07 times

Inventory turnover in  360  360  360 360
days: 360/IT 1.59 1.79 1.92 2.07
Average Payment period
  (ITD) 226.42 days     201.12 days 187.5 days 173.61 days

250
226.42

201.12
200 187.5
173.61
Inventory turnover
150
Inventory turnover in days

100

50

1.59 1.79 1.92 2.07

0
2009 2010 2011 2012

Analysis:

Inventory turnover:

Inventory turnover ratio measures how fast the inventory become cash or accounts receivable. If the
turnover number is more than the company’s position is good and vice versa.  In 2009 it is 1.59 times
and in 2010 is 1.79 times in 2011 it is 1.92 times in 2012 it is 2.07. Here we see the turnover is
increasing over the time. It shows a positive impact on their management efficiency but the speed is
very slow .It should be more fast.

Submitted by: Borun Kumar Page 35

Inventory Turnover in Days (ITD):

Average payment period tell about how many time a company takes to pay its accounts payable. If a
company quickly pays the accounts payable then it means they can’t use their capital properly on the
other hand if it take too much time to pay its accounts payable then it will hamper their reputation
toward its debtors. It wills create problem for further loan. Here we have seen their average
payment period is decreasing over the year. In 2012 the period slightly decreases then the previous
year. The overall position is good.

3.1.2 (c) Assets Turnover:

Asset turnover is a financial ratio that measures the efficiency of a company's use of its assets in
generating sales revenue or sales income to the company

Assets turnover ratio indicates to the capability of the company’s to create sales using the asset
appropriately. The underutilized assets raise the companies require for the expensive finance. By the
achieving a skyscraping turnover a companies cut cost and increase final profit of the proprietorship.

Assets Turnover = Sales / Average Total Assets

Average Total Assets = (Beginning Total Assets + Ending Total Assets)/2

Asset Turnover 2009 2010 2011 2012

Sales  4868254915  6490847353   7890241843 9289115284

Average Total (34711598863)/2 (41264332931)/2  (44405740042)/2  (4762315112)/2
Assets
 
0.28 times 0.31 times 0.36 times 0.39 times

Analysis: Here was see that total assets turnover has increased in 2011 and 2012 compare to 2010. 
In 2009 it is 0.28 times and in 2010 is 0.31 times in 2011 it is 0.36 times in 2012 it is 0.39. Here we see
the turnover is increasing over the time.

3.1.3 Profitability Ratio:

Profitability ratio represents the organization’s ability to translate sales dollars at different stages of
measurement. The ratio measures profitability after consideration of all revenues and expenses,
including interest taxes and non-operating items. This  ratio specify the capacity of the company to
survive difficult circumstances, which might occur from a number of basis, such as declining price,
increasing coast and declining sale.

Submitted by: Borun Kumar Page 36

The profitability ratio we can justify on the five ratios, those are as follows

Gross Profit Margin Ratio

Net profit Margin Ratio
Return on Investment/ Asset Ratio
Return on Equity Ratio

     

3.1.3 (a) Gross & Profit Margin:

Profit margin on sales ratio offered information as regards a company’s success from the action of
core trade. Ratio gives you an idea about the success relation to sales on after the cost of goods sold
is removing.
It’s could be used as a pointer of the good organization of the manufacture action and relationship
between cost of manufacturing goods and selling price.

Gross Profit margin = Gross Profit / Sales*100

Net Profit Margin= Net Profit after Tax/ Sales *100

Ratio 2009 2010 2011 2012

Gross Profit Margin 47% 49% 47% 47.25%

Net Profit Margin 12.83% 16.20% 15.19% 14.21%

Submitted by: Borun Kumar Page 37

 60%

50% 49%
47% 47% 47%

40%

30% Gross profit Margin

Net Profit Margin

20%
16.20% 15.19% 14.21%
12.83%
10%

0%
2009 2010 2011 2012

Analysis: In this case the gross profit margin ratio has little bit fluctuated throughout the year of 2009
to 2012, but at the same times net profit margin shows quite stabile, which is very good sign from on
investor’s point of view. It means that management has able to handle the operating cost and other
cost. As a result company has generated more profit.

3.1.3 (b) Return on Investment/ Asset (ROI):

Return on asset compute the success of a company by using the advantage to create to get self-
governing of the financing of those assets. It computes consequently divides financing action from
working and invests tricks.

Return on Investment = Net Profit after Taxes / Average Total Assets*100

Ratio 2009 2010 2011 2012

Return on Investment 4% 5% 5% 5.5%

Submitted by: Borun Kumar Page 38

 Return on investment
6%
6%
5% 5%
5%

4%
4%

3% Return on investment

2%

1%

0%
2009 2010 2011 2012

Analysis: In that particular segment we see that, in 2009, return on investment was 4% which was
increased in 2010. Return percentage was same in 2011 to 2010. In the year of 2012, the return on
investment is increased to 5.5%. That indicates Beximco Pharma doing well return for investors.

 
3.1.3 (c) Return on common stock equity (ROE):

Return on common stock ratio indicates the amount of, which the company is capable to exchange in
service income into an after tax income that finally can be maintain by the investor. It is a helpful
ratio for investigate the capability of the company’s administration to understand a sufficient come
back on the capital invest by the proprietors of the company.

Return on common stock equity = Net Profit after tax / Total Equity

Ratio 2009 2010 2011 2012

Return on common stock 6% 7% 7% 7.16%
equity

Submitted by: Borun Kumar Page 39

 Return on common stock equity
7%
7% 7%
7% 7%
7%
7%
7%
Return on common stock equity
6%
6%
6%
6%
6%
6%
5%
2009 2010 2011 2012

Analysis: Return on equity increased from 2009 and after 2010 and 2011 return shows 7%. In 2012,
return on equity is 7.16%. So, it’s good news for BPL that its present ROE is better than previous year.

3.1.4 Debt Coverage Ratio:

Debt ratios are calculated to judgment the long-term financial position of the company. This ratio
indicate, mix of funds provided by owners and lenders, the manner in which the assets are finance,
the extent of earning that is magnified or leveraged by use of debt and finally the extent of limited
stakeholders control over the company.

The Debt-coverage ratio we can satisfy on the three ratios, those are:
 
Debt to total assets.
Time interest earned.

3.1.4 (a) Debt to total assets:

Debt ratio maintain how much of the company’s total assets have been financed by the lending.

Debt to total asset = Total Liabilities / Total Asset

Submitted by: Borun Kumar Page 40

 Ratio 2009 2010 2011 2012
Debt to total asset 19% 25.25% 25.63% 25.13%

Debt to Total Asset

30%

25.25% 25.63% 25.13%

25%

20% 19.00%
Debt to Total Asset
15%

10%

5%

0%
2009 2010 2011 2012

Analysis: We see that the percentage of ratio had decreased 2009. From 2010 to 2012, the
percentage of ratio was stable in the Beximco Pharma Company because their asset was increased at
a higher rate than from the last year. If any company debt ratio decreases day by day it is a good
position for those for the company.

3.1.4 (b) Time interest earned:

This ratio provides an indication of the margin of safety between financial obligations and the net
income thus it provides an indication of the available protection to creditors. Failure to meet this
obligation can bring legal action by the company’s creditors, possibly resulting in bankruptcy.

Submitted by: Borun Kumar Page 41

Time interest earned (TIE) = Profit before interest and Tax / Interest charged

Ratio 2009 2010 2011 2012

Times interest earned 3.49 2.68 2.96 2.96

Times interest earned

4
3.49
3.5
2.96 2.96
3
2.68
2.5
Times interest earned
2

1.5

0.5

0
2009 2010 2011 2012

Analysis: In this dissuasion we realize that the higher ratio of time interest earned, it indicated the
Company has higher ability to pay the interest from their opportunity income. We see that ratio is
quite fluctuating over the last few periods. So Beximco Pharma should aware of it.

3.1.5 Market value ratio:

The final ratios are the market value ratio. It also call share ownership ratio. It referred to the
stockholder in analyzing present and future investment in a company. In this ratio the stockholders
are interested in the way to certain variables affect the value of their holdings. In order to the
stockholder is able to analyze the likely future market value of the stock market.
There is one ratio under this ratio.

Earnings per Share (EPS) ratio

3.1.5 (a) Earnings per share (EPS) ratio:

Price earnings ratio does analysis in discussing the investment possibility of a given enterprise uses
an off-quoted statistic? This is computed by dividing the market price of stock by its earnings per
share.

Submitted by: Borun Kumar Page 42

Price earnings ratio = Market price of stock / Earning per share

Ratio 2009 2010 2011 2012

Market Price of Stock 155.8 135.1 93.6 60.43

Earning per share 3.5 4.18 4.76 4.33

Price earning ratio 44.51 32.32 19.66 13.96

180

160 155.8

140 135.1
Market price of stock
120 Earning Per share
Price earning ratio
100 93.6

80
60.43
60
44.51
40 32.32
19.66
20 13.96
3.5 4.18 4.76 4.33
0
2009 2010 2011 2012

Analysis: As a well-established organization it’s earning per share is increasing day by day. We see
that after2009 EPS is increasing; in 2012 it reaches Tk 4.33.It‟s a good sign for company reputation
and investors will be interested to invest on this company. But at the same time P/E ratio dropped
significantly. This is a bad sign for Beximco. So company should aware of their P/E ratio.

3.2 Comparative Analysis:

3.2.1 Liquidity Ratio

The Liquidity ratio we can satisfy on the two ratios, those are:

Submitted by: Borun Kumar Page 43

 1) Current ratio

2) Quick ratio or acid test

3.2.1 (a) Current Ratio:

Year Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd.

2012 2.67 1.50

2011 2.70 1.59

3 2.67 2.7

2.5

2
1.59
1.5
2012
1.5 2011

0.5

0
Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

Analysis: In this analysis, we can view that in 2011 the current ratios were 1.50 times in Square
pharmaceutical Ltd. It was increasing the next year. On the other hand, Beximco pharmaceutical
company both years in same position. So we understand that both pharmaceutical companies are
not good performing for current ratio because their figure also showing that situation.

3.2.1 (b) Quick Ratio:

Year Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

2012 1.88 0.96

2011 1.83 0.95

Submitted by: Borun Kumar Page 44

 1.88 1.83
2
1.8
1.6
1.4
1.2 0.96 0.95 2012
1 2011

0.8
0.6
0.4
0.2
0
Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

Analysis: Analysis of this ratio, it is the same position of current ratio. In 2011, the quick ratio was
0.95 times of Square pharmaceutical company which increased as resulted 0.96 times. In 2012, the
quick ratio of Beximco pharmaceutical company, it is also silently increase compare than last year.
Both of these ratios represent the idea that both have so far an almost constant liquidity position
which is good at some point. So their profit margin may not so high. Finally in this ratio, we can state
that the Beximco pharmaceutical is better liquidity position compare than the square pharmaceutical
company.

3.2.2 Activity Ratio:

Following are discussed seven types of asset management ratios:

Accounts receivable turnover

Inventory turnover
Total asset turnover

Submitted by: Borun Kumar Page 45

3.2.2 (a) Receivable Turnover:

Year Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd.

2012 8.00 times 12.31 times

2011 8.07 times 15.06 times

16
15.06

14
12.31
12

10

8 8.07
8 2012
2011
6

0
Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

Analysis: From this ratio analysis we acquire that the ratio is continuously increasing from 2011 to
2012 in Beximco and square Pharmaceutical Company. It means that Account receivable is increasing
day by day which is very bad position for company because it has make up a lot of cash money, for
this reason the company must be invested by other sector. So the higher turnover means that the
company is inefficient in managing its Account receivable.

3.2.2 (b) Inventory Turnover:

Year Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

2012 2.07 times 3.50 tims

2011 1.92 times 3.24 times

Submitted by: Borun Kumar Page 46

 4

3.5
3.5
3.24

2.5
2.07
2 1.92 2012
2011
1.5

0.5

0
Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

Analysis: In this analysis we identify that the continuous improvement of inventory turnover ratio
through the years from 2011 to 2012 in Beximco and Square pharmaceutical company. Here we
understand that the cost of goods sold is increasing day by day as well as the turnover is also
increasing because the increasing rate of sales is higher than average inventory. Generally it is
important that they are holding much more inventory, which has make up the cash balance. So we
are confirms that both companies capture much more inventory. It is the best position for both
companies.

3.2.2 (c) Assets Turnover:

Year Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd.

2012 0.39 0.74

2011 0.36 0.78

Submitted by: Borun Kumar Page 47

 0.9

0.8 0.78
0.74
0.7

0.6

0.5
2012
0.39
0.4 0.36 2011

0.3

0.2

0.1

0
Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

Analysis: In this Analysis we see that a gradual fall of company’s total asset turnover in 2011, it was
0.78 times, declined to 0.74 times in Square company. Instead, the Beximco Company increased
slightly to 0.36 to 0.39 in 2011-12. It may be an indicator of company’s pricing strategy as company
with high profit margins tends to have low asset turnover. It is in fact might be one of the reasons for
why the assets turnover was low in the year 2011 to 2012 for both companies. Other than
investment in marketable securities, every other asset especially long-term investments, inventories,
short-term loans and cash balance had gone up substantially profit margin may not be the actual
reason for the turnover to go down.

3.2.3 Profitability Ratio:

There are four important profitability ratios that we are going to analyze:
Net Profit Margin

Gross Profit Margin

Return on Asset

Return on Equity

Submitted by: Borun Kumar Page 48

3.2.3 (a) Gross Profit Margin:

Year Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

2012 47.25% 42.89%

2011 47% 43%

48.00% 47%
47%
47.00% 47%

46.00%

45.00%

44.00%
2012
43.00% 2011
43%
42.00%

41.00%

40.00%

Beximco Pharmaceuticals Ltd

Square Pharmaceuticals Ltd

Analysis: The gross profit margin has slightly increased in 2011 compare with 2012 in Beximco
Company. On the contrary, in 2012 sales has increased as well as gross profit margin has also
increased for the Square Company. To increase gross profit margin they should try to decrease their
cost of goods sold. We think that the square Pharmacy is best performing compare then company,
because their gross profit is increase day by day.

3.2.3 (b) Net Profit Margin:

Year Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd.

2012 14.21% 18.04%

2011 15.19% 18.79%

Submitted by: Borun Kumar Page 49

 18.79%
20.00% 18.04%
18.00%
15.19%
16.00% 14.21%

14.00%
12.00%
2012
10.00% 2011
8.00%
6.00%
4.00%
2.00%
0.00%
Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

Analysis: In this analysis we see that the net profit margin has decreased in 2012 compare than last
year in Beximco pharmaceutical company because the net profit and sales are increase from the last
year. As a result this company is standard position. Instead, we also see that the square company
both years is same because this company net profit and sales is increased. So the Square company is
better then the Beximco company.

3.2.3 (c) Return on Investment:

Year Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd.

2012 5.5% 14.17%

2011 5% 10.16%

Submitted by: Borun Kumar Page 50

 16.00%
14.17%
14.00%

12.00%
10.16%
10.00%

8.00% 2012
2011
6.00% 5.50%
5.00%

4.00%

2.00%

0.00%
Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

Analysis: From 2012 years data we see that net income and total asset has continuously increased to
2011 in Square Company. For this reason return on total asset ratio has increase in little bite. But due
to some problem in Beximco Company here net total asset has increased slightly in 2012 then 2011.
And this increased creates a small on Return on total asset for Beximco Company. As a result that
company is not good condition during the year 2012. So we think return on asset is best position for
Square pharmaceutical company.

3.2.3 (d) Return on Common Stock Equity:

Year Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

2012 7.16% 17.81%

2011 7% 18%

Submitted by: Borun Kumar Page 51

 20.00%
17.81% 18.00%
18.00%

16.00%

14.00%

12.00%

10.00% 2012
2011
8.00% 7.16% 7.00%
6.00%

4.00%

2.00%

0.00%
Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

Analysis: For the same problem of the return on equity has decreased in the year 2011 compare with
2012 in square company. It means the company is losing efficiency in production process and also
this falls in return on equity has a bad affect in common stock holder. Rather than, the Beximco
company is increase that the same in previous year. It state that the measurement for evaluating the
efficient use of resources by a company in producing earnings for its shareholders.

3.2.4 Debt Coverage Ratio:

The Debt-coverage ratio we can satisfy on the two ratios, those are:

Debt ratio.

Submitted by: Borun Kumar Page 52

 Time interest earned.

3.2.4 (a) Debt to total Asset:

Year Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

2012 25.13% 24.17%

2011 25.63% 28.93%

28.93%

29.00%

28.00%

27.00%
25.63%
25.13%
26.00%
2012
24.17%
25.00% 2011

24.00%

23.00%

22.00%

21.00%
Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

Analysis: In this problem analysis we see that the percentage of ratio has decreased from 2011 to
2012 in the Square Company because their asset was increased at a higher rate than from the last
year. If any company debt ratio decreases day by day it is a good position for those for the company.
By the same token, in Beximco company is same position compare than Beixmco Company, because
that company debt ratio has decrease slightly then last year. For this reason, those company can’t
stand the good financial position. In this problem we state that Square pharmaceutical company is
better than the Beximco company.

3.2.4 (b) Time Interest Earned:

Year Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd.

2012 2.96 9.17

2011 2.96 9.42

Submitted by: Borun Kumar Page 53

 9.17 9.42
10
9
8
7
6
2012
5 2011
2.96 2.96
4
3
2
1
0
Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

Analysis: In this dissuasion we realize that the higher ratio of time interest earned, it indicated the
Company has higher ability to pay the interest from their opportunity income. So, higher decline of
this ratio in 2011 from 2012 in square company those indicated that the company is paying more
interest. Nevertheless, the Beximco Company is not paying more interest because that company has
no decline from last year for that reason we think those company has best condition for time interest
earned.

3.2.5 Market value ratios:

There is one ratio under this ratio.

Earnings per Share (EPS) ratio

3.2.5 (a) Price earning ratio:

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 Year Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd.
2012 13.96 Taka 20.10 Taka

2011 19.66 Taka 25.25 Taka

30 25.25

25 20.1
19.66

20
13.96
2012
15 2011

10

0
Beximco Pharmaceuticals Ltd Square Pharmaceuticals Ltd

Analysis: Analysis shows that earning per share ratio has decreased from 2011 to 2012 for the both
company because net income had increased at a fewer rate than from the previous. We can state
that those companies can stand the good financial position.

3.3 SWOT Analysis:

A situation analysis is a technique for matching
organizational strength and weakness with
environmental opportunities and threats to determine
the organizations right which is known as SWOT analysis
(strengths, weakness, opportunity and threat). Every
organization should be able to identify the purpose for

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which it is best suited. Strategies are faced not with snapshots of the environment and the
organization but with a movie of rapidly changing events. Strategic planners, whether top managers,
key operating managers or staff planning specialist, have many way to scan the environment for
opportunities and threats. They can study telltale shifts in the economy, recent innovations, growth
and movement among competitors, market trends, labor availability and demographic shifts. One
needs to store out environment opportunities and threats carefully. A perceived threat may turn out
to be an opportunity or vice versa. Step can be taken to turn negatives into positive.

3.3.1 Strength:

Strong brand image: BPL has strong brand image. It is help to competitive global market in existing.
Strong brand image can’t create one day it is establish longtime provide quality full medicine and
consumer demand.

Huge Product Line: Currently produces 265 generics in 462 strengths and dosage forms.

Experienced top management: BPL has highly qualified and experienced management. Employees
are educated and they are sincere to there work properly. Experienced top management help to the
Bangladeshi pharmaceutical industry existing to competitive global market.

Global experienced: BPL has long history to there service national and internationally. After the
liberation of freedom our industry sector raise day by day and Beximco pharmaceuticals limited
occupied majority of industry share.

Strong market share: Beximco pharmaceutical Limited has strong market share in respective
industry.

Good profitability and Strong solvency: BPL has got strong track record of profitability and solvency.
In this situation they purchase large volume raw material to very economical rate, so there
production cost low.

Wide distribution of network: BPL has wide distribution of network. As a pioneer in Bangladeshi
pharmaceutical sector BPL at first introduced distribution and of networking system. Existing
company widely distributes to there network, in this situation new company take the market not
easy..

3.3.2 Weakness:

Non-availability of major intermediaries for volume drug: Beximco Pharma has some lacking of
major intermediaries for volume drug, because pharmaceutical industries raw materials totally

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import foreign country. So there are big limitation of raw materials import sometimes exporter
bargaining use this opportunity.

Very low key R&D: Beximco Pharma’s research and development department is not that much
efficient in compare with other leading competitors. In our country any sector research and
development department can’t work properly as like pharmaceutical industries.

Decreasing trend of market share: Due to huge competition market share is captured by highly
potential competitors. In this time the industry gains very low share world pharmaceuticals
production exports.

Very low level of Biotechnology in Bangladesh and also for New Drug Discovery Systems:
Biotechnology in Bangladesh is not much developed because less lab facility, most of the
biotechnologist doesn’t live in Bangladesh as we can’t afford them. For this reasons, new drug
discovery system is very poor in Bangladesh.

Low level of strategic planning for future: Our continuous political viability does not support long
term strategic plan in investment in private sectors. So naturally Beximco Pharma is weak in strategy
planning for future.

3.3.3 Opportunities:

Increase of the world population: Day by day our population is increasing, so demand for medicine
also increasing. There is a good scope to expend the production of this industry, so new companies
have scope do business further.

Growing incomes: Our per capita income is increasing day by day, so we can expense more on
medicine. So there is a good opportunity to increase the profitability of pharmaceutical industry.

Growing attention for health: People are being educated day by day, now they are more concise
about there health and diseases. It creates new opportunity for pharmaceutical industry to expand.

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New diagnoses and New social diseases: Now are days we hard about new diseases as the business
are increasing, so need for pharmaceutical product will also be increasing. This need helps
pharmaceutical industry to grow more.

New therapy approaches: New dimensions of therapies are discovered it will create extra chances
expend the business.

Full automation scope: Our every day life is depended to day by day technology system.
Pharmaceutical industry fully depended to technology support; pharmaceutical company can’t
produce with out automation. As new automation has invented so it is easier expand the production
as well as business.

Substitute product very poor (Homoeopathy medicine): Pharmaceutical industry is operated like a
monopoly industry in Bangladesh. Because there is no strong substitute has pharmaceutical product.
Homoeopathy and herbal medicine are substitute of pharmaceutical product but there usage is still
very limited.

Easier international trading: Now world is a global market, in this market any company go to any
country sell there product. Bangladeshi pharmaceutical industry creates a good poison in world
market, because it is easier to internationally trading.

New markets are opening: Day by day new pharmaceutical market are opening, because people are
very concise to there health. Bangladeshi pharmaceutical industry export destinations have now
risen from 37, to 72 countries during the period.

3.3.4 Threats:

The industry is highly competitive: This industry is highly competitive. There are more than 200
participants in this industry. Competitions are particularly from the generic products.

High Cost of discovering new products and fewer discoveries: Pharmaceutical Company need invest
huge amount of research and development department, but Bangladeshi company not so rich. They
don’t invest enough research and development department, if some companies invest but it is not
enough to a country. So discoveries are very poor in our country.

High cost of sales and marketing: Pharmaceutical company second high cost sales and marketing
cost. Pharmaceutical company’s necessary to highly educated and qualified person of sales and

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marketing. There marketing cost so high because advertising and handle to the doctor is very
important.

Country political risk: Due to poor commitment of political leader instability is always there. So,
political risk is always associated in our pharmaceutical industry.

Switching over form process patent to product patent: Over process patent acquire product patent
is so expensive. So it increases the production expenses.

More potential new drugs and more efficient therapies: It is very difficult to survive with potential
technology, drugs, and therapies, because the pharmaceutical industry competition is very high in
Bangladesh.

Lack of experience to exploit efficiently the new patent regime: Bangladeshi pharmaceutical
industries lack of experience to exploit efficiently the new patent regime, because Bangladesh is a
new comer to this sector. In this position they can’t lunch new medicine without permission MNCs,
some time MNCs don’t permit to there lunch new medicines.

Chapter Four

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4.1 Key Findings
Work related:
Accounts and Finance Department run by high professionals, experience and skill personals.
Accounts maintained by modern tools such as “ MAPICS" for its transaction processing
purpose."MAPICS" is the acronym of “Manufacturing, Accounting and Production Information
Control Systems". It is a DOS based Modular software introduced by IBM Corporation. BPL
uses the following modules of MAPICS:
General Ledger.
Budget Preparation.
Financial Ratio Analysis.
Fixed Asset Accounting.
Accounts Receivable.
L C Monitoring System.

In addition, MS Excel2007 is broadly used by the accounts department for various purposes; such as:
Payroll account maintenance
Daily receives and payments maintenance;
Financial reporti ng;
LC monitoring ( Mastering files)
Forecasted Product rate
Pending bill List
Departmental Budget
Sister concern transactions and so on.
Finance and Accounting department is one of the most important departments of BPL, they
are responsible to make profit for the organization.

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 Finance and Accounting department maintain the entire legal requirement in processing all
the transactions.

Financial:

There are positive relationship exists among assets, sales and net income.
The recent liquidity position of BPL is very high, which reflect company has more idle money.
Growth rate of the BPL is satisfactory.
BPL should concern about their falling market price of share.

4.2 Conclusion:
In Bangladesh, Pharmaceutical sector is one of the most developed hi-tech sectors which are
contributing in the countries economy. Pharmaceutical sector is one of the fast-growing and most
developed scientific sectors in Bangladesh. There are about 265registered pharmaceutical companies
operating in Bangladesh pharmaceutical industry. The markets are highly competitive. BPL succeeded
in gaining trust and confidence of the doctors and patients all over the country.

Beximco Pharma is the largest exporter of pharmaceuticals in the country and the only company to
win National Export Trophy (Gold), the highest national accolade for export, for record three times.
The company is the largest producer of Metered Dose Inhalers (MDIs) in the country, and the first to
produce CFC free inhalers. BPL is also the first company to produce anti-retroviral drugs (ARVs)
locally.

If there is no doubt Beximco Pharma is a leading pharmaceutical company in Bangladeshi

pharmaceutical industry, but there some lacking to Finance and Accounting department. Because
there financial position not so much good compare there competitive leading company. In this
situation they should be careful there costing sector. There unproductive assets should invest
productive sector and minimize there liability. This Report evaluative method of determining the
past, current and projected performance of BPL along with the comparative analysis of the related
rival company like Square Pharmaceuticals Limited . My analysis enables organizations to assess their
current operating performance, review the state of the economy and determine how they will
perform in the future.
I trust that Beximco Pharma go ahead day by day galaxy.

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4.3 Recommendation:
It is not easy to recommend some suggestion to
enhance the performance level of the organization
like BPL. Although I have tried to find out some
shortcoming regarding operational and other
aspects. On the basis of my observation I would like to
present the following recommendations:

BPL should utilize their assets properly by investing them in more profitable projects as
there liquidity is higher than actual need.
They should increase their dividend payout ratio, to maximize the wealth of shareholders.
They should be careful about the market price of share, because the price of share would
decrease.
BPL should make a proper budget plan for further investment.
BPL needs to strike a healthy balance between debt and equity; too much debt financing
would mean a high financial risk, while too little debt financing would mean that the
company may have difficulty raising sufficient funds.
BPL needs to be more efficient in collecting receivables. It should review its credit policy
and make any necessary adjustments to encourage prompt payment.

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 Further improve its return on investment (ROE), the company needs to take advantage of
profitable investment opportunities and be more efficient at managing its expenses.
Though BPL has qualified employee in Finance and Accounting department, but the
organization should recruit some new employee to run this department smoothly.
They should minimize there financing expenses to make higher net profit.
They should minimize the average collection period and maximize the average payable
period.

Reference Books and Journal:

Annual Report of Beximco Pharmaceuticals Limited –2000 – 2012
Newspaper, Journal, Magazine
Bangladesh Association of Pharmaceutical Industries
World Pharmaceutical Association
Fundamentals of Financial Management, by Brigham and Houston
Annual Reports Square Pharmaceuticals Limited (2011 to 2012)

Website Address:
http//www.beximco-pharma.com
http://www.bpl.com.bd/financial_statement
http//www.pharmaceutical-industry.info
http://ims-global.com
http://www.dse.com.

Reference Person:
Consultation with the Following Persons:
Mr. Md. Fazlul Haque, Deputy Manager, Accounts and Finance BPL

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 Mr. Shamsad Ahmed, Associate professor of Department of Business

Administration, University of Asia Pacific

Mr. Amit Kumar, Accounts Officer, Accounts and Finance BPL

Mr. Md. Jasim Chowdhury, Accounts Officer, Accounts and Finance BPL

Md. Nazmul Muneer, Accounts Officer, Accounts and Finance BPL

Md. Adul Basar, Sr. Accounts Officer, Accounts and Finance BPL

Organization:

Beximco Pharmaceuticals Ltd.

Operational Headquaters

19 Dhanmondi R/A, Road No. 7, Dhaka- 1205, Bangladesh

Phone : +880-2-8611891 (5 lines)
Fax : +880-2-8613470
Email : info@bpl.net

Corporate Headquarter

17 Dhanmondi R/A, Road No. 2

Dhaka 1205, Bangladesh
Phone: +880-2-8611891
Fax: +880-2-8613470
Email: beximchq@bol-online.com
Website: www.beximco.net

Reference Book:
Fundamental Of Corporate Finance
By Stepen A.Boss

Managerinal Accounting
By Garrison and Noreen

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List of Abbreviations Used:

BPL : Beximco Pharmaceuticals Ltd.

IMS : Information Medical Statistics
WTA : World Trade Agreement
MRPC : Market Research Planning & Cell
cGMP : Current Good Manufacturing Practice is a term recognized
Worldwide as a holistic approach for the control and management of
manufacturing and quality control testing of food and
pharmaceutical products.
OTC : Over the Counter
API : Active Pharmaceutical Ingredients.
UKMHR : United Kingdom Medicines and Healthcare Products Regulatory
Agency
MPO : Medical Promotion Officer
DDA : Directorate of Drug Administration.
POM : Prescription Only Medicine

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