Professional Documents
Culture Documents
Team - One
Group Members
Kawsar Ahmad , ZR-50 Omaer Ahmad , ZR-09 Rafaat Wasik Ahmad , ZR- 53 Nasim Ul Haque , ZR- 54 Rashed Al Ahmad Tarique , ZR-61
Financial Ratios
Activity Ratio Profitability Ratios Ownership Ratios Liquidity Ratios
It measures the efficiency of a firm with which its managers utilize its assets
pharmaceuticals industry. For Square Pharmaceuticals LTD it is 26:1 Beximco Pharmaceuticals LTD it is approximately 8:1
Either the company is failing in its collection enforcement or events are out of line with the planned strategy
Total Asset Turnover measures the capability of a firm utilizing its asset.
Inventory Turnover
A ratio showing how many times a company's inventory is sold and replaced over a period Inventory turnover = Cost of goods sold / Average inventory
Inventory Turnover
Inventory Turnover
Low inventory turnover Overstocking, obsolescence, or deficiencies in the product line or marketing effort. High inventory turnover inadequate inventory levels, which may lead to a loss in business.
Fixed asset turnover is the ratio of sales to the value of fixed asset. It indicates how well the business is using its fixed assets to generate sales. Fixed asset turnover = Sales / Average fixed asset
The company has been more effective in using the investment in fixed assets to generate revenues.
Beximco Pharmaceuticals LTD 2.021311538 Square Pharmaceuticals LTD 12.54503918 More advanced Tobbins Q
Debt to Equity Ratio = Total Debt Total Equity This ratio indicates the capital structure of the firm
Leverage of firms Shows sustainable growth potential of the firm in combination with other ratios Connected with asset turnover, ROE and equity multiplier
Dividend Yield
It is the number of Takas earned for each Taka spent by the shareholder Indicates how fast the shareholder earns back his investment
Dividend Payoff Ratio = Cash dividend per share E.P.S. It is the proportion of net income paid out to shareholders as cash dividends Helpful in estimating future dividends payouts
Beximco Pharmaceuticals LTD 0.693 Square Pharmaceuticals LTD 0.234459147 Alternative measure : Dollar Dividend per share
Profitability Ratios
Profit Margin Gross Profit Margin Return on Investment Return on equity Earning Power Times Interest Earned
Profit Margin
Indicates what portion of sales contribute to the income of a company Profit Margin = Reflects company's pricing policies and its ability to control costs. Square Pharmaceuticals LTD is 14.45%
Shareholder's equity does not include preferred shares Square Pharmaceuticals LTD is 16.42%
Profit Margin
Asset Turnover
Equity Multiplier
Earning Power
It is the percentage of earnings relative to total assets Indication of how effectively assets are used to generate earnings. Earning Power = EBIT / Total Assets Square Pharmaceuticals LTD is 14.71%
Interest Charges = total interest payable on bonds and other contractual debt
Liquidity Ratios
Current Ratio
Current Ratio =
Current Ratio
The current ratio of Beximco Pharmaceuticals Ltd. is 1.1 The current ratio of Square Pharmaceuticals Ltd. is 1.26
Current Ratio
Low ratio There is a danger of insufficient resources to pay off debts if they fall due High ratio Indicates that too much money is tied up in stock or left as idle cash
Quick Ratio
Measures whether the business can meet its shortterm debts without selling its stock
Quick Ratio =
Quick Ratio
The quick ratio of Beximco Pharmaceuticals Limited is 0.22 The quick ratio of Square Pharmaceuticals Limited is 0.25
Quick Ratio
Low ratio It means that there is danger of insufficient cash to pay off debts as they fall due High ratio It means the firm has too much idle cash
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