Sales to Inventory Ratio: Sales to inventory ratio provide a measurement for comparing stock-to-sales ratios of a businesswith others in the

same industry. Sales to Inventory Ratio = Annual Net Sales / Inventor

The sales to inventory ratio for Beximco Pharma has increased in 2007 due to the balance in thevalue of the annual net sales. The inventory value has decreased in 2008 but due to the increase inthe annual net sales there is a higher sale to inventory ratio. This shows that it is able to sell aconsiderable amount of inventory and maintains a low inventory figure relative to the annual netsales

Liquidity Ratios: Liquidity Ratios measures the company's ability to turn short-term assets into cash to cover debtsis of the utmost importance when creditors are seeking payment. 2.1.3.1 Current Ratio:

The current ratio is the most basic liquidity test which signifies a company's ability to meet itsshort-term liabilities with its short-term assets. A current ratio greater than or equal to oneindicates that current assets should be able to satisfy near-term obligations

he current ratio of Beximco Pharma has increased in 2007 but decreased in 2008 from the year 2006. However As the ratio value is more than 1; it shows that the amount of current asset isgreater than the current liabilities. But the current liabilities of it are increasing and it is not agood indication. 2.1.3.2 Quick Ratio: The quick ratio is a tougher test of liquidity than the current ratio. It eliminates inventories and prepaid expenses that may be more difficult to convert to cash. Like the current ratio, the higher the ratio, the more liquid it is, and the better able the company will be to ride out any downturn inits business.Quick Ratio = (Current Assets Inventory) / Current Liabilities

The quick ratio value is decreasing year by year from 2006 to 2008, showing the financialweakness of Beximco Pharma is increasing. This is because the quick ratio compares the currentliabilities with the current asset without the value of the inventories. It also shows that the firm isnot so liquid at this time. Working Capital Management Policy of the Company The Working Capital Management Policy of a company basically brings into focus level of current assets a company has and how it finances them. Managing the Working Capital is vital for a company and managing basically are the decisions regarding the level of inventories to be kept,time period for which Accounts Receivables should be kept outstanding and also the period of time for payments of Accounts Payables.Two major components of managing Working Capital are the estimations of the Operating Cycleand the Cash Cycle. For the estimation of Operating Cycle and Cash Cycle the estimations of Accounts Receivables Period, Accounts Payable Period and Inventory Period are required.Table 18: Illustrating the values of the variables required for Working Capital Management