Financial statement analysis of beximco pharmaceuticals limited

1. Financial Statement Analysis of Beximco Pharmaceuticals Limited 1
Financial Statement Analysis of Beximco Pharmaceuticals Limited
Md. Rasadul Islam
Army Institute of Business Administration, Sylhet
Principles of finance
Md Ali Ashraf
30/05/2017

2. Financial Statement Analysis of Beximco Pharmaceuticals Limited 2
Executive summary
This report is an analysis on financial statement of Beximco Pharmaceuticals Limited.
The main purpose of this report is to find out how well the company performs. We have
collected data from the annual financial reports on Beximco in 2011 to 2013. For analyzing the
data we have used financial ratios such as Liquidity Ratios, financial leverage ratios, coverage
ratios, activity ratios. We use graphical analysis for the measurement of all types of financial
ratio analysis. We hope this report will be helpful for the Beximco. The management of the
company can take decision and formulating plans for future on the basis of this report. It will
also help the creditors to take decision whether they should provide loan capital or not. We have
tried to give some advice based on their problems that we found from the analysis. So this report
will show a clear picture about Beximco’s performance in the year of 2011, 2012, and 2013.

3. Financial Statement Analysis of Beximco Pharmaceuticals Limited 3
Company Overview
Beximco Pharmaceuticals Ltd (Beximco Pharma) is an emerging generic drug player
committed to providing access to affordable medicines. Company’s state-of-the-art
manufacturing facilities have been accredited by the regulatory authorities of USA, Australia,
European Union, Canada, and Brazil, among others, and it currently focuses on building
presence in many emerging and developed markets around the world.
Beximco Pharma is consistently building upon its portfolio and currently producing more
than 500 products encompassing broad therapeutic categories and the Company has created
strong differentiation by offering a range of high-tech, specialized products which are difficult to
imitate.

4. Financial Statement Analysis of Beximco Pharmaceuticals Limited 4
Table of Ratios
Ratio Year
2011 2012 2013
Liquidity Ratios
Current ratio 2.7 2.67 2.03
Acid-test (Quick) Ratio 1.83 1.89 1.48
Financial Leverage Ratios
Debt to Equity 0.34 0.34 0.39
Debt to total assets 0.26 0.25 0.28
Debt to capital 0.29 0.29 0.33
Coverage Ratio
Interest coverage 3.5 3.42 3.65
Activity Ratios
Receivable turnover(days) 45 46 43
inventory turnover 1.80 2.01 2.30
Profitability ratios
Gross profit margin 48% 47.25% 46.12%
Net profit margin 15.18% 14.20% 13.4%
Market Ratios
EPS 3.93 3.77 4.01

5. Financial Statement Analysis of Beximco Pharmaceuticals Limited 5
Ratio analysis
Liquidity Ratios
Current ratio
Formula: Current ratio =
Beximco is able to cover their current liabilities as the ratio is greater than 1. But ratio is
getting weaker year by year. It may have a problem in Current Liabilities which is increasing
day by day. Beximco may lessen their accrued expenses in order to decrease current liabilities.
Acid-test (Quick) Ratio
Formula: Acid-test (Quick) Ratio =
Beximco is able to pay its current liabilities as the ratio is greater than 1. But presently, it
is having weaker ratio then past years. It may be because of the problem in inventory. Beximco
may decrease their inventory by selling during the year.
0
1
2
3
2011 2012 2013
Current Ratios
Current Ratios
0
1
2
2011 2012 2013
Acid-test (Quick) Ratio
Quick Ratios

6. Financial Statement Analysis of Beximco Pharmaceuticals Limited 6
Financial Leverage Ratios
Debt to Equity
Formula: Debt to Equity Ratio =
Debt to equity ratio shows the extent to which the firm is financed by debt. Here the
value of ratio was .34, .34, .39 for 2011, 2012, 2013 respectively. In 2013 the ratio was .39 that
indicates that the portion of assets provided by stockholders is greater than the portion of assets
provided by creditors which is good for stockholders as well as beximco. The company has to
pay less interest to creditor. The ratio is good but it is higher than past.
Debt to total assets
Formula: Debt to total assets ratio =
As the ratio shows the firm’s asset supported by the debt. Here beximco has relatively
same ratio in the years. In 2013 the ratio was .28 that means them able to pay debt 3 or more
times in a year. That’s very good for the company. But the ratio is little bit more than
2012.Beximco may decrease their debt decrease the debt to total asset ratio.
0.3
0.35
0.4
2011 2012 2013
Debt to Equity Ratio
Debt to Equity Ratio
0.2
0.25
0.3
2011 2012 2013
Debt to total assets ratio
Debt to total assets
ratio

7. Financial Statement Analysis of Beximco Pharmaceuticals Limited 7
Debt to capital
Formula: Debt to capital ratio =
Here the value of ratio was .29, .29, .33 for 2011, 2012, 2013 respectively. It indicates
that the beximco has more capital than debt that shows the company healthy and is not having
financial difficulties. But in 2013 the ratio is greater than past. Beximco may decrease their debt
to decrease debt to capital ratio.
Coverage Ratio
Interest coverage
Formula: Interest coverage ratio =
It shows the coverage of the interest by the income. Here we can see that, Beximco’s
coverage ratios are increasing at a slow rate. The trend is good for the less amount of interest
charge.
0.2
0.3
0.4
2011 2012 2013
Debt to Catital
Debt to capital ratio
3.2
3.4
3.6
3.8
2011 2012 2013
Interest coverage ratio
Interest coverage
ratio

8. Financial Statement Analysis of Beximco Pharmaceuticals Limited 8
Activity Ratios
Receivable turnover (days)
Formula: Receivable turnover Ratio = , ACP
The trend is decreasing year by year, which show that the collections from receivable are
getting less day by day. It may also indicate that the beximco’s collection of accounts receivable
is efficient, and the company can pay off their debts quickly. It’s mainly depends on some
condition as some customers who may be more likely to take a long time in paying their debts.
However, less avg collection period is good for beximco.
Inventory turnover
Formula: Inventory turnover ratio=
Beximco has a good number of ratios as it is increasing year by year. It is because of the
inventory is decreasing. In 2011 beximco was able to sold out and restock its inventory by 1.8
times and in 2013 it was by 2.3 times. It has been increasing year by year.
40
45
50
2011 2012 2013
Receivable turnover Ratio
Avg collection period
1.6
1.8
2
2.2
2011 2012 2013
Inventory turnover ratio
Inventory turnover
ratio

9. Financial Statement Analysis of Beximco Pharmaceuticals Limited 9
Profitability ratios
Gross profit margin
Formula: Gross profit margin=
In last three years the gross profit margin of beximco is decreasing year by year. But still
they have strong gross profit margin. It means beximco is paying its operating and other
expenses without any problems. Here we can see that beximco has a gross profit of around Tk46
for every Tk 100 sales in 2013.
Net profit margin
Formula: Net profit margin=
The net profit margin of eximco has been decreasing from 2011 to 2012. That is for
increasing the operating and other expenses. Beximco may lessen their operating and other
expenses in order to increase net profit margin.
44%
46%
48%
50%
2011 2012 2013
Gross profit margin
Gross profit margin
ratio
12%
14%
16%
2011 2012 2013
Net profit margin
Net profit margin
ratio

10. Financial Statement Analysis of Beximco Pharmaceuticals Limited 10
Market Ratios
EPS
Formula: EPS =
Earnings per share mainly indicate a company’s profitability. The EPS of Beximco
reached to its highest in 2013.The ratio is in upward trend in 2013, which is a positive sign for
the company.
Recommendation
On the basis of above analysis the performance of Beximco was better in 2011-12, than
that of 2013. The overall ratio of Beximco can further be well if they can decrease accrued
expenses, inventory, debt or long-term debt, interest charges. Decreasing those amounts
Beximco can raise up/down which they actually need for ratio analysis. Beximco should
regularly make use of ratio analysis and measure should be taken to improve undesirable ratios.
3.5
4
4.5
2011 2012 2013
EPS
EPS ratios

11. Financial Statement Analysis of Beximco Pharmaceuticals Limited 11
References
 Annual report of 2011, 2012, 2013
Appendix( A)

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