This document provides financial information about Square Pharmaceuticals Limited, including: 1. Key financial ratios from 2009-2010 to 2011-2012 showing the company has satisfactory current, quick, and debt ratios compared to industry averages. 2. Calculations for enterprise value, equity value, and value per share of Tk 232.51 based on historical income statements, balance sheets, and share prices from 2006-2012. 3. Assumptions made in forecasting the company's financial statements from 2012-2013 to 2014-2015 and calculating weighted average cost of capital.

3. No. Students’ Name Students’ ID.
1. Sazidur Rahman Shakir 16-049
2. Md. Shezanur Rahman 16-011
3. Md. Ehsanul Hoque 16-007
4. Humayra Siddiqua 16-147
5. Mubasshira Atia 16-033

5. Brief History of Square Pharmaceuticals
Started as a Partnership
firm in 1958 and was
incorporated as a Private
Ltd. Company in 1964
then converted into
Public Limited
Company in 1991
Its initial public offering
started in Dhaka and
Chittagong stock exchange
simultaneously in 1995. The
sales turnover of SPL was
more than Taka 11.46
Billion, with about 16.43%
market share (April 2009–
March 2010) having a
growth rate of about
16.72%.
Its potential competitors
are BEXIMCO Pharma,
INCEPTA, ACME,
RENETA, OPSONIN,
SK+F, SANOFI-
AVENTIS etc

6. Strategy
Analysis
Cost
leadership
Strategy is
maintained
No
Compromise
with Quality
Maintaining
cost Efficiency
Price differences
are limited in
case of National
market products
Basically
maintained for
the costly and
Infrequent
products
Standard level of
differentiation is
maintained
Square Price (tk.) Other Price (tk.)
Seclo 5 Loscetil 4
Comel 30 Metfo 40
Trevox 15 Levox 15
Ace 8 Napa 8
Ciprocin 14 Niofloxion 14
Trupen 4 Pantonex 4
Troy 14 Etorix 14
Trox 10 Rolce 10
Motigut 2.50 Dumer 3
Cenid 32 Cecnidel ds 52

8. IndustryAnalysisof SquarePharma
Five Forces Risk Level Opportunities
Rivalry among
existing firms
Risk arises because of machine
switching cost or exit barriers. Though
price competitiveness and brand name
lowers the risk
strong distribution channel, skilled
sales personnel, categorical expansion
and business diversification
Threat of new
Entrants
Risk level-low, as it produce based on
economies of scale
First mover advantage, Large
distribution channel, good relationship
with retailers
Threat of
Substitute product
Risk level- high; because of the existing
competitors and recent advances in
biotechnology
Brand image, less price in some
products
Bargaining power
of buyers
Risk level- Moderate; because of
government policies in regulating price
and few switching cost.
Large and dispersed consumer market
Bargaining power
of Suppliers
Risk level- Moderate; when suppliers
can go for forward integration to
become pharmaceutical co. Other wise;
risk level- Low
Low bargaining power of Suppliers,
Low switching cost from one supplier
to another.

10. Current Ratio
It is quite satisfactory
throughout the historical
years. The rate was quite
high during 2009-10 but
still the rate is reasonable
compared to the industry
ratio of 0.94:1
It is decreasing over
time but still it is quite
healthy compared to the
industry average of
0.512:1
The ratio were
satisfactory which proves
the firms being in a less
risky position. The
average industry debt
ratio is 53.81%.
Earnings per
share
Quick ratio
Total Debt ratio
Debt-Equity Ratio
Fixed- asset turn over
Profit margin
Return On Asset
Return On Equity
Price Earnings Ratio
2009-2010 2010-2011 2011-2012
=2.15:1 =1.50:1 =1.59:1
2009-2010 2010-2011 2011-2012
=1.16:1 =.96:1 =0.95:1
2009-2010 2010-2011 2011-2012
=.23 =.29 =.24
2009-2010 2010-2011 2011-2012
=.30 =.41 =.32
It shows Shareholders still
have a positive earning against
each share outstanding i.e. the
company is still profitable to
invest
It is more than double of
industry average 6.208% that
refers a very good position of
the firm in the industry. It shows the firm is well above the
industrial average 1.02 times,
which signals that the firm is
utilizing its asset relatively well
compared to other firms.
2009-2010 2010-2011 2011-2012
25.88
times
25.35
times
21.69
times
2009-2010 2010-2011 2011-2012
=18.07% =18.32% =17.81%2009-2010 2010-2011 2011-2012
=13.89% =13.02% =13.51%
It is also well above the
industry average 8.158%
which implies the firm to be in
a highly profitable position.
The lower ratio implies that
the firm has a strong
financial backbone as it can
rely more on its own equity
rather than on debt.
2009-2010 2010-2011 2011-2012
138.36 Tk
per share
129.07 tk
per share
10.94 tk per
share
It is very close to the industry
average of 24.33 times.
It is very high compared to the
overall industry average of
13.26%
2009-2010 2010-2011 2011-2012
=1.29 =1.25 =1.26
2009-2010 2010-2011 2011-2012
=15.72% =16.26% =15.59%

12. The firm has shifted its investment in marketable securities from current asset to noncurrent assets in
the year 2010-11 so for simplicity of calculation we assumed this as non-current asset for all the
forecasting years
The firm also shifted its financing cost to operating expense in the year 2010-2011 so for simplicity we
assumed it as a portion of operating expense for all the historical & forecasting years
Capital work in process and Liability for other finances are calculated in proportion to sales
Average growth rate of marketable securities are calculated from last 3 years because of change in
strategy of the firm, we also normalized the rate
Unrealized gain on marketable securities is assumed to be zero (0) for the forecasting years
As there is no information on new share issuance in the last annual report so we assumed that no
additional shares have been issued for the forecasting years; this also means that there is also no
additional share premiums (kept constant)
Tax holiday, General reserve are held constant for the forecasting years as seen in the historical data.
Tax holiday amount was transferred to retained earnings

13. We assumed that new capital expenditures have been financed through long term debt
The current portion of LTD is assumed to be paid out
The income tax for forecasting years is 27.5% as seen in the historical data
Deferred tax liability (proforma Balance sheet)= opening deferred tax liability + new provision
The firm decided 25% cash, 40% stock dividend for simplification we only included 25% cash
dividend
Risk free rate is kept equal to current 30days treasury bill rate provided by Bangladesh Bank
Amount of depreciation for the year 2007-2012 are derived from annual reports, PPE value at
cost is used for depreciation calculation
The industry growth rate reduced 1.5% in the last historical year but the company growth rate increased
1.64%; so we assumed the industry growth rate to be .5% for the forecasting years which was used in FCF &
Terminal value calculations

15. » The monthly share prices and DSE General Index values of
the year 2006-2012 are used.
Proforma income
statement
Proforma balance sheet
Value of beta and market
return
WACC calculation
Calculation of change in
working capital
Calculation of enterprise value,
equity value and value per
share
Calculations are based on the the historical income statements and balance sheets of the year 2007-2012
Particulars 2012-13 2013-14 2014-15
GROSS TURNOVER 21646888731 25202571664 29342305325
GROSS PROFIT 7942389991 9246994126 10765890426
Operating Expenses 4323046677 5243447647 6324223944
NET PROFIT BEFORE TAX 4618450887 5494775529 6644843806
NET PROFIT AFTER TAX 4346759176 5171531870 6253944557
Transfer to retained earnings 3260069382 3878648902 4690458418
Particulars 2012-13 2013-14 2014-15
Non-Current Assets: 17,475,956,860 22,197,124,942 30,100,863,578
Current Assets: 9478262157 11726194402 12194126544
Shareholders' Equity 19,127,532,198 23,006,181,100 27,696,639,518
Non-Current Liabilities 2,146,211,808 3,782,982,056 5,748,979,424
Current Liabilities 5777169228 7246733239 8980439957
Covariance 0.005725265
Variance of market return 0.00771023
Beta 0.742554407
Market return 0.015273907
Market return -yearly 0.183286887
Risk-free rate 0.09
Market return 0.183286887
Beta 0.742554407
Cost of equity 0.159270589
Cost of debt 0.121185961
After tax cost of debt 0.087859822
Total market value of equity 43221032832
Book value of debt 3,002,470,665
Weight of equity 0.935044503
Weight of debt 0.064955497
WACC 0.154632067
Working
capital
4,399,344,501 6,409,950,312 7,462,838,383 8,688,672,147
Change in
WC
2,010,605,811 1,052,888,071 1,225,833,763
Enterprise value 63993271133
Equity value 61,577,720,735
Value per share 232.5137408
»Number of outstanding share at last historical annual
report was 264,834,760.