Financial Ratios Analysis of Square Pharmaceuticals

1. Welcome to our presentation
Topic: Financial Ratios Analysis of Square
Pharmaceuticals

2. Group Members
Md. Faruk Hossain 1407030
Ahmed Istiaq Murad 1407076
Konok Kumar Mondal 1407016
Rawful Al amin 1407052

3. Introduction :
Performance analysis and evaluation of a company is usually
related to how well a company can use it assets, share
holder equity and liability, revenue and expenses. Financial
ratio analysis is one of the best tools of performance
evaluation of any company. It measures the company’s
overall efficiency and performance. It determines of share
market condition of the company.

4. Square Pharmaceuticals
• SQUARE Pharmaceuticals Limited is the largest
pharmaceutical company in Bangladesh and it has been
continuously in the 1st
position among all national and
multinational company since 1985.
• 1958: Debut of SQUARE Pharma as a Partnership Firm.
• 1964: Converted into a Private Limited Company.
• 1991: Converted into a Public Limited Company
• 2004: SQUARE enlisted as UNICEF's global supplier
• 2015: PAI (Pre Approval Inspection) by US FDA was
successful for Dhaka Site’s solid dosage Unit. WHO
approved square’s GMP.

5. Financial Analysis:
• Assessment of the firm’s past, present
and future financial conditions.
• Done to find firm’s financial strengths and
weaknesses
• Primary Tools:
– Financial Statements
– Comparison of financial ratios to past,
industry, sector and all firms

6. Types of Ratios
– Liquidity Ratios
• Assess ability to cover current obligations
– Activity (Turnover) Ratios
• Assess amount of activity relative to amount of resources
used
– Financial Leverage Ratios
• Assess ability to cover long term debt obligations
– Profitability Ratios
• Assess profits relative to amount of resources used

7. Particulars 31-03-2015 31-03-2014 31-03-2013 31-03-2012 31-03-2011
ASSETS:
Non-Current Assets:
Property Plant and Equipment-Carrying Value 18009200507 13933689469 9322186497 8767827062 6981559781
Deferred Tax Assets 75167249--- --- --- ---
Capital Work-in-Progress 207629864 3256802171 3718326254 1274390572 887584197
Investment - Long Term (at Cost) 251599097 147694430 3821121331 3971022723 4031751281
Investment - Associates Undertaking 6036139963 5364154708--- --- ---
Investment in Marketable Securities (Fair Value) 879249484 844360472 589313880 695037397 521300555
Total Non-Current Assets 25458986164 23546701250 17450947962 14708277754 12422195814
Current Assets:
Inventories 3310086668 2737085779 2503683240 2687818472 2541688329
Trade Debtors 894543303 766634978 800974912 808311714 772421345
Advances Deposits and Prepayments 750169066 671749541 650380369 577156445 523991079
Short Term Loan 885185428 1161185776 1109251152 2085300110 2813811332
Cash and Cash Equivalents 3892185634 2162717207 932407871 586920267 370301755
Total Current Assets 9732170099 7499373281 5996697544 6745507008 7022213840
TOTAL ASSETS 35191156263 31046074531 23447645506 21453784762 19444409654
Balance sheet

8. SHAREHOLDERS' EQUITY AND LIABILITIES:
Shareholders' Equity:
Share Capital 5542991520 4819992630 3707686640 2648347600 1961739000
Share Premium 2035465000 2035465000 2035465000 2035465000 2035465000
General Reserve 105878200 105878200 105878200 105878200 105878200
Tax Holiday Reserve --- 406231702--- --- 1101935237
Gain on Marketable Securities (Unrealized) 265332813 449255557 297945485 399421439 259435115
Retained Earnings 23143634751 18922758840 12697770859 11077772016 8353256438
Non Controlling Interest -1669864 9369803--- --- ---
Total Shareholders Equity 31093302284 26739581929 18844746184 16266884255 13817708990
Non-Current Liabilities:
Long Term Loans - Secured 659147818 1183627923 313421158 508778060 655645734
Deferred Tax Liability 891357959 718957750 497039909 425187602 302865504
Total Non-Current Liabilities 1550505777 1902585673 810461067 933965662 958511238
Current Liabilities:
Short Term Bank Loans --- 131104817 1112694131 2016551125 2627483864
Long Term Loans-Current Portion 257154669 461433822 511504034 477141480 478199933
Trade Creditors 254773030 217855755 1086097881 875431555 733369218
Liabilities for Expenses 43002246 20518598 109604834 95361435 79499584
Liabilities for Other Finance 1994088121 1563624134 972537375 788449250 749636827
Total Current Liabilities 2549018066 2394537126 3792438255 4252934845 4668189426
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES 35191156263 31046074531 23447645506 21453784762 19444409654
Balance sheet cont’d

9. Gross turnover 30833571248 26945687557 20742746372 18592856236 15576487536
Net turnover 26684573116 23268413217 17959489496 16054425243 13471424469
Cost of goods sold 14942870155 12960738683 10223478073 9167253620 7703661010
Gross profit 11741702961 10307674534 7736011423 6887171623 5767763459
Profit from operations 7049611578 5967653270 3852810574 3321146713 2751605397
Bank Interest 158614307 177131396 325281016 433581036 268849071
Profit before tax 6963547022 5912348302 4481047443 3978939088 3414752310
Total Income after interest and tax 5797713593 5081928495 3239948829 3037696965 2624537639
Earnings Per Share (EPS) 10.8 8.92 9.01 7.82 129.07
Number of Shares used to compute EPS 554299152 554299152 370768664 370768664 19617390
Total Receipts 30722397162 27073653067 21155520854 19082697489 13619603237
Purchase 11025935136 9484660368 7313390135 6951917263 5972234287
Dividend Paid 1445997789 926921660 662086900 588521700 528160500
Statement of Income:

10. Years 31-03-
2011
31-03-
2012
31-03-
2013
31-03-
2014
31-03-
2015
Ratio 1.504 1.586 1.581 3.131 3.818
Current Ratio:
Current Ratio = Current assets
/Current liabilities

11. Years 31-03-
2011
31-03-
2012
31-03-
2013
31-03-
2014
31-03-
2015
Ratio 0.959 0.954 0.921 1.988 2.519
Quick ratio or acid test:
Quick ratio = (Current asset-
inventories)/Current liabilities

12. Years 31-03-
2011
31-03-
2012
31-03-
2013
31-03-
2014
31-03-
2015
Ratio 29.83 30.35 22.42 19.86 17.44
Accounts receivable turnover:
Accounts receivable turnover =
Sales / Accounts receivable

13. Years 31-03-
2011
31-03-
2012
31-03-
2013
31-03-
2014
31-03-
2015
Ratio 12.07 11.86 16.06 18.13 20.64
Average collection period
Average collection period = 360 days / Accounts receivable turnover

14. Years 31-03-
2011
31-03-
2012
31-03-
2013
31-03-
2014
31-03-
2015
Ratio 3.03 3.41 4.08 4.74 4.51
Inventory Turnover Ratio:
Inventory Turnover Ratio = Cost of
Goods Sold / Average Inventory

15. Years 31-03-
2011
31-03-
2012
31-03-
2013
31-03-
2014
31-03-
2015
Ratio 8.14 7.44 6.73 43.54 43.28
Accounts Payable turnover
Accounts Payable turnover = Purchase / Accounts Payable

16. Years 31-03-2011 31-03-2012 31-03-2013 31-03-2014 31-03-2015
Ratio 44.21 45.33 53.46 8.27 8.32
Accounts Payable turnover
Accounts Payable turnover in days = 360 days / Accounts Payable turnover

17. Years 31-03-
2011
31-03-
2012
31-03-
2013
31-03-
2014
31-03-
2015
Ratio 1.22 1.26 1.37 1.65 1.46
Fixed asset turnover ratio
Fixed asset turanover = Sales / Net fixed asset

18. Years 31-03-
2011
31-03-
2012
31-03-
2013
31-03-
2014
31-03-
2015
Ratio 13.4976 14.1592 13.8178 16.3689 16.4749
Total asset turnover ratio
Total asset turnover = Sales / Total asset

19. Years 31-03-
2011
31-03-
2012
31-03-
2013
31-03-
2014
31-03-
2015
Ratio 21.726
8
21.840
5
18.040
3
21.840
4
21.726
Net Profit Margin
Net Profit margin = Net profit after tax/sales*100

20. Years 31-
03-
2011
31-
03-
2012
31-
03-
2013
31-
03-
2014
31-
03-
2015
Ratio 42.81
48
42.89
88
43.07
47
44.29
9
44.00
18
Gross Profit Margin ratio
Gross profit margin ratio= Gross
profit/sales*100

21. Years 31-03-
2011
31-03-
2012
31-03-
2013
31-03-
2014
31-03-
2015
Ratio 16.4749 16.3689 13.8178 16.3689 16.4749
Return on asset ratio
Return on Total Assets = Net profits after taxes / total assets*100

22. Years 31-03-
2011
31-03-
2012
31-03-
2013
31-03-
2014
31-03-
2015
Ratio 25.3481 24.7840 24.9508 25.409 26.0957
Operating Profit Margin:
Operating Profit Margin = Operating
profits / Sales

23. Years 31-03-
2011
31-03-
2012
31-03-
2013
31-03-
2014
31-03-
2015
Ratio 12.7014 9.1769 13.7759 33.3783 43.902
4
Time interest earned ratio
Time interest earned = Earnings
before interest tax / Interest
charged

24. Conclusion
• First, we analysis the liquidity measures indicates that
current ratio is bad condition for any companies.
• Second, we analysis all efficiency measures ,account
receivable turnover, average collection period ,inventory
turnover, account payable turnover, fixed assets
turnover, total asset turnover.
• Third, we analysis is profitability measures indicates the
different kind of ratio.
• Overall, net profit margin is found rising for square
pharmaceutical company and plummeting for the square
pharmaceutical company during 2011-2015.
•