8.

Assets to Sales: Asset to sales rate ties in sales and the total investment in assets that is used to generate these sales. It compares how much in assets a company has relative to the amount of revenue they generate using their assets. Formula: Total assets Sales Tk. In thousand 2011 23033340 7890242 2.92

2007 Total Asset Sales Asset to sales 11953418 3597025 3.32

2008 14819665 4010167 3.70

2009 19891933 4868255 4.02

2010

21372340 6490847 3.29

Asset to sales
5 4 3 2 1 0 2007 3.32 2008 3.7 2009 4.02 2010 3.29 2011 2.92 3.32 3.7 4.02 3.29 2.92

Asset to sales

Interpretation: The five years ratios of Beximco Pharma indicates an upward & down trend, which showed that they have such amount of assets through which they can generate around on an average 3 times revenue. In year 2009, they have the highest utilization of their asset relevant to sales.

9. Sales to Net Working Capital: Sales to net working capital ratio measure the efficiency of management to use its short-term assets and liabilities. It usually takes a certain amount of invested cash to maintain a certain level of sales. Formula: Sales Net Working Capital Tk. In thousands 2011 7890242 4500301 1.75

2007 Sales Net Working Capital Sales to Net Working Capital 3597025 1295803 2.78

2008 4010167 2598593 1.54

2009 4868255 4595286 1.06

2010 6490847 3678510 1.76

Sales to Net Working Capital

3 2.5 2 1.5 1 0.5 0 Sales to Net Working Capital 2007 2.78 2008 1.54 2009 1.06 2010 1.76 2011 1.75 1.54 1.06 1.76 1.75 2.78

Interpretation: Except 2007 the sales to working capital ratio for Beximco Pharma is spike over the year which indicate that it could be happen due to a decision to grant more credit to customer in order to encourage sales.

10. Accounts Payables to Sales: Accounts payable to sales ratio measures the extent to which the suppliers money is being used to generate sales. When this ratio is multiplied by 365 days, it reflect the average number of days it takes to pay its suppliers. Formula: Accounts Payables Sales 2007 Accounts Payables Sales Accounts Payable to Sales 271814 2008 263177 2009 409898 Tk. In thousands 2010 2011 432316 523798

3597025 0.076

4010167 0.066

4868255 0.084

6490847 0.067

7890242 0.066

Accounts Payable to Sales

0.09 0.08 0.07 0.06 0.05 0.04 0.03 0.02 0.01 0 0.084 0.076 0.066 0.067 0.066

2007 Accounts Payable to 0.076 Sales

2008

2009

2010

2011

0.066

0.084

0.067

0.066

Interpretation: The five years accounts payable to sales ratios of Beximco Pharma is bellow 1.00 which indicate that they are not facing any liquidity problem. Basically it shows the relationship between unpaid suppliers bills and the sales revenue in an accounting period.

11. Return on Sales: Profit margin ratio reveals profit earned per tk of sales and measures efficiency of the operations. This profit margin can vary year to year due to abnormal conditions. Formula: Net Profit after Tax Sales Tk. in thousands 2007 Net Profit after Tax Sales Return on Sales 353068 3597025 0.098 2008 545341 4010167 0.136 2009 624740 4868255 0.128 2010 1051649 6490847 0.162 2011 1198525 7890242 0.152

Return on Sales
0.2 0.15 0.098 0.1 0.05 0 Return on Sales 0.136 0.128 0.162

0.152

2007 0.098

2008 0.136

2009 0.128

2010 0.162

2011 0.152

Interpretation: The five years profit margin ratios of Beximco Pharma indicate stable trend (around 10% to16%) which reveals that this amounts of sales revenue would remain after all costs have been taken into account. A declining margin indicate a margin squeeze possibly due to increased competition or raising costs.

12. Return on Assets: ROA is the key indicator of profitability for a firm. It matches operating profits with the assets available to earn a return. A higher ROA denotes a higher level of management performance and it should be higher than the risk free rate of return. Formula: Net Profit after Taxes Total assets Tk. In thousands 2011 23033340 1198525 0.052

2007 Total Assets Net Profit after Tax Return on Assets 11953418 353068 0.030

2008 14819665 545341 0.037

2009 19891933 624740 0.031

2010

21372340 1051649 0.049

Return on Assets
0.06
0.049 0.05 0.04 0.037 0.03 0.031 0.052

0.03
0.02 0.01

0
Return on Assets

2007 0.03

2008 0.037

2009 0.031

2010 0.049

2011 0.052

Interpretation: The ROA ratio of Beximco Pharma is quite good in year 2010-11, which indicates an efficient management performance but in year 2007, 2008 & 2009 it is declined. And it should be compared with the other similar industry.

13.Return on Net Worth: Return on equity ratio analyzes the ability of the firms management to realize an adequate return on the capital invested by the owners of the firm. Formula: Net Profit after Taxes Net Worth Tk. In thousands 2011 1198525 17128128 0.070

2007 Net Profit after Tax Net Worth Return on net worth 353068 8250940 0.043

2008 545341 10450202 0.052

2009 624740 10885707 0.057

2010 1051649

15974086 0.066

Return on net worth

0.07 0.06 0.05 0.043 0.052 0.057 0.066 0.07

0.04
0.03 0.02 0.01 2007 Return on net worth 0.043 0 2008 0.052 2009 0.057 2010 0.066 2011 0.07

Interpretation: The five-year ROE ratios of Beximco Pharma indicate an upward trend (4% to &7%), which tells the investors how well they has used the capital from their shareholders to generate profit gradually. It also denotes the management performance.

Efficiency Ratio: 14. Collection Period: Collection period ratio reflects the average number of the days it takes to collect receivables. Quality of receivables can be determined when compared with selling terms. Formula: Accounts Receivables 365 days Sales Tk. In thousands 2007 Accounts Receivables Sales Collection Period 499681 3597025 50 days 2008 503916 4010167 45 days 2009 694112 4868255 51 days 2010 821356 6490847 46 days 2011 978224 7890242 45 days

Collection Period
51 51 50 49 48 47 46 45 44 43 42 Collection Period 2007 50 2008 45 2009 51 2010 46 2011 45 45 46 45 50

Interpretation: The five years ratios of Beximco Pharma showed that, the collection period is 45 to 51 days. It indicates that they take on an average 50 days to convert their receivables into cash. We know that possessing the lower average collection period is optimal.