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Table of contents

Letter of Transmittal 1

Executive Summary i

Acknowledgement 2

Short information of Square Pharmaceuticals 3

Work-Sheet of Ratio analysis 4-10

Analysis of ratio 4-10

References 11

Appendixes

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Letter of Transmittal

May 02, 2015


Zinnatun Nesa
Senior lecturer,
School of Business & Economics
United International University

Subject: Permission for accepting the report on Ratio analysis

Dear Madam,
As a part of fulfillment of requirements for the course Principle of Finance on Bachelor of
Business Administration (BBA) degree at United International University, We have
completed the report on concept of ratio analysis of Square Pharmaceuticals Ltd.
This report has been prepared in accordance with the rules and regulations as required.
In this circumstances stated above We believe that you will accept this report.

Sincerely,
All group members

1
Acknowledgement

We would like to give thank and express sincerest gratitude to our honorable course teacher
Zinnatun Nesa for her outstanding guidance, friendly support, advice and help in
preparing the report on “Ratio Analyses”. She offered necessary advices and information for
making the task very easy and comfortable. She helped us throughout the course Principles
of Finance. Her engaging arguments and strong feedback have contributed greatly to this
dissertation. She has been an invaluable mentor who was always available for giving
suggestions and wise comments to help building up this report. We would sincerely thank her
for her all the valuable time and efforts that she devoted for us during her classes.

2
General Information

• Advanced technology, the Issue Manager, has prepared this Information Memorandum (“IM”)
based on the information provided by Square Pharmaceuticals Limited (the Company/the
Issuer) and also upon several discussions with the Managing Director and concern executives of
the Issuer Company. The Directors, including Managing Director of Square Pharmaceuticals
Limited and Advanced Technology Collectively and individually, having made all reasonable
inquires, confirm that to the best of their Knowledge and belief, the information contained herein
is true and correct in all material aspects and that there are no other material facts, the omission of
which would make any statement here in Misleading.

• No person is authorized to give any information or to make any representation not contained in
this Prospectus, and if given or made, any such information or representation must not be relied
upon as having been authorized by the Issuer or Issue Manager.

• The Issue as contemplated in this document is made in Bangladesh and is subject to the exclusive
Jurisdiction of the courts of Bangladesh. Forwarding this prospectus to any person resident
outside Bangladesh in no way implies that the Issue is made in accordance with the laws of that
country or is subject to the jurisdiction of the laws of that country.

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1. Current ratio:

Current ratio = (current asset / current liabilities)


2010 1.584788901

2011 2.195576664

2012 1.814397279

2013 1.303487998

2014 2.104011453

The company should concern to its current asset which is efficiently unutilized in 2010.

2. The quick ratio:

Quick ratio = (current assets – inventories) / current liabilities

2010 3.075755095

2011 3.441071544

2012 3.016256534

2013 2.237787366

2014 3.313274822

The company should concerned to its quick ratio which is alarming in 2010

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3. Debt to equity ratio:

Debt to equity ratio = (total debt/ total equity)

2010 0.150927982

2011 0.237603035

2012 0.15524357

2013 0.075677076

2014 0.049150814

The company should concern to its debt ratio

4. Time interest earned ratio:

Time interest earned ratio= EBIT/INTEREST

2010 10.14673029

2011 14.04536923

2012 10.1769214

2013 14.46396277

2014 39.07171448

Company earn more interest in 2010 which is good for business

5. Receivable turnover:
Rec. turnover= (365/ days sales in receivable)

2010 31.99602506

2011 25.70926302

2012 27.81641855

2013 27.6138247

2014 34.63852492

Company should concern to its a/r turnover ratio

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6. Inventory turnover:

Inventory turnover= COGS/Inventory

2010 2.972839311

2011 3.030922762

2012 3.410666946

2013 4.083375209

2014 4.735232919

Company should concern to its inventory turnover ratio

7. Fixed Assets turn over ratio:

Fixed Assets turnover= sale/total asset

2010
1.076964812

2011 1.084464025

2012 1.091523121

2013 1.029141198

2014 0.988181443

8. Total assets turn over ratio:

Total assets torn over= Sales/ total assets

2010 0.754293053

2011 0.692817355

2012 0.748326014

2013 0.765939996

2014 0.749480041

Company should concern to its asset turnover ratio

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9. Return on equity:
Return on equity= (net income / total asset)
2010 0.178125815

2011 0.189940144

2012 0.178135566

2013 0.171928494

2014 0.18998608

10. Days’ sales in receivables:


Days’ sales in receivables= (365/ receivables turnover)
2010 11.40766702

2011 14.19721755

2012 13.12174676

2013 13.21801684

2014 10.53740022

11. Cash ratio:


Cash ratio= cash/current liability
2010 0.174780516

2011 0.181457708

2012 0.262441665

2013 0.347946605

2014 0.955503374

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12. Total debt ratio:
Total debt ratio= total debt/total equity
2010 0.22867972

2011 0.289373695

2012 0.241770884

2013 0.196305395

2014 0.138411147

13. Long term debt ratio:


Long term debt ratio= tong term debt/long term debt-total equity
2010 0.080965654

2011 0.045300191

2012 0.030328344

2013 0.016359663

2014 0.042374458

14. Cash coverage ratio:


Cash coverage ratio= EBIT + depreciation/interest
2010 10.52784288

2011 14.50770954

2012 10.40430451

2013 14.70124781

2014 39.426714

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15. Days’ sales in inventory:
Days’ sales in inventory= 365 days/inventory torn over
2010 122.7782473

2011 120.4253716

2012 107.0171922

2013 89.38683842

2014 77.08174154

16. NWC torn over:


NWC torn over= sales/NWC
2010 18.06988404

2011 15.17762992

2012 12.59772757

2013 4.829992924

2014 7.144558372

17. Profit margin:


Profit margin= net income/ sales
2010 0.182146784

2011 0.194822578

2012 0.180492954

2013 0.18040317

2014 0.218404601

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18. Return on assets (ROA):
Return on assets= net income/ total assets
2010 0.137392054

2011 0.134976463

2012 0.135067573

2013 0.138178003

2014 0.163689889

19. Earnings per share (EPS):


Earnings per share= net income/ shares outstanding
2010 138.36

2011 129.07

2012 10.94

2013 9.01

2014 10.26

20. Price earnings (PE) ratio:


Price earnings ratio= price per share/earnings per share
2010 0.722752241

2011 0.774773379

2012 0.914076782

2013 1.109877913

2014 0.974658869

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Company should concern to its present return on equity ratio it should be increase

References

 http://www.google.com.bd/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDQ
QFjAB&url
 https://www.google.com.bd/?gws_rd=cr,ssl&ei=QIQ_VYiSBMO4uASs8oGoDA#q=ann
ual+report+of+square+pharma
 http://www.assignmentpoint.com/business/finance/assignment-on-ratio-analysis-of-
financial-statement-on-square-ltd.html
 http://www.google.com.bd/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CCg
QFjAB&url=http%3A%2F%2Fwww.squarepharma.com.bd%2Ffinancialreports%2FAnn
ual%2520Report%25202014.pdf&ei
 http://www.google.com.bd/url?sa=t&rct=j&q=&esrc=s&source=web&cd=3&ved=0CDA
QFjAC&url=http%3A%2F%2Fwww.squarepharma.com.bd%2Ffinancialreports%2FAnn
ual%2520Report%25202012,2013.pdf&ei
 http://www.google.com.bd/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&ved=0CDY
QFjAD&url=http%3A%2F%2Fwww.squarepharma.com.bd%2Ffinancialreports%2Fannu
al_report_2010-11.pdf&e

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