1. MASTER OF PROFESSIONAL FINANCE (MPF)
UNIVERSITY OF DHAKA
ASSIGNMENT ON
FINANCIAL STATEMENT ANALYSIS OF
PROFITABILITY & GROWTH
PF-603
SUBMITTED BY
Debabrata Barman
ID: FIN-02-16-063
Semester: Jan-June 2016
Master of Professional
Finance (MPF) Program
SUBMITTED TO
Dr. Mahmood Osman
Imam
Professor
Department of Finance,
Business Faculty
University of Dhaka
2. Letter of Transmittal
01st
July, 2016
To
Dr. Mahmood Osman Imam
Professor
Department of Finance, Business Faculty,
University of Dhaka.
Subject: Submission of Financial Statement Analysis report on “Analysis of
Profitability and Analysis of Growth of SPL and OPL.”
Dear Sir,
This is my great pleasure to submit the report of my six months long 1st
Semester MPF
program in the Square Pharmaceutical Ltd (SPL) and Orion Pharmaceutical Ltd (OPL), under
the Finance Department. The title of the report is “Financial Statement Analysis of
Profitability and Growth Analysis of SPL and OPL”. This report has been prepared to fulfill
the requirement of my 1st
Semester, MPF program at my assigned organization, SPL and
OPL.
I have put my best effort to make this report a successful one. It has been joyful &
enlightening experience for me to work in the organization & prepare this report. However
this has been obviously a great source of learning for me to conduct similar types of studies
in the future.
I would like to express my sincere gratitude to you for your kind guidance & suggestions in
preparing the report. It would be my immense pleasure if you find this report useful &
informative to have an apparent perspective on the issue. I shall be happy to provide any
further explanation regarding this report if required & please do not hesitate to call me if you
have any query on this report or any other relevant matters.
Thanks and best regards,
Debabrata Barman
ID: Fin-02-16-063
3. Acknowledgement
This report is an accumulation of many people’s endeavor. But at the beginning I would like
to convey my sincere appreciation to the almighty GOD for giving me the strength & the
ability to finish the task within the planned time. Then I like to express my sincere gratitude
to everyone who contributed towards preparing & making this study successfully.
First of all I would like to express my Sincere & immense gratitude to our honorable MPF
program teacher, Dr. Mahmood Osman Imam, Professor, Department of Finance, University
of Dhaka. I am deeply indebted to her whole hearted supervision to me during the Period. Her
valuable suggestions & guideline helped me a lot to prepare the report in a well organized
manner.
I would also like to thank the authority of Square Pharmaceutical Limited and Orion
Pharmaceutical Limited for giving me the opportunity to access and use their website and
supplying me necessary information and published papers.
I am also grateful to the other officials of MPF program & my all MPF program friends who
helped me while preparing the report by giving their suggestions, assistance & supply of
information, which were valuable to me. Finally, I want to keep my thanks to my parent who
gave special attention to me from the very beginning and during the preparation of report &
the internship program.
4. Executive Summary
The financial statement analysis report is made on financial profitability and growth analysis
of Square Pharmaceutical Ltd (SPL) and Orion Pharmaceutical Ltd (OPL), the report
includes the process of reviewing and evaluating the company’s financial statements because
without this the profitability and growth analysis cannot be done. Profitability and Growth
analysis mainly calculates the statistical relationships between data. The profitability and
growth analysis helps an organization to understand that on the last fiscal year, how their
performance and it was also helps them to take decisions in future.
This topic is selected by our honorable MPF Program teacher as per Financial Statement
Analysis & Reporting course module. The beginning part of my report contains the brief
introduction of the selected company and the objectives, scope, methodology and limitations
of the study.
In the second part, I have covered the detailed background of the company such as the
history, global network, mission & strategy, the organizational structure, market position and
an overview of its products and operations.
Then starts the main analysis part of my report where I have analyzed horizontal and vertical
financial statements analysis and ratios of consecutive five years. Here I have presented the
result and according the result, I have interpreted the financial condition of SPL and OPL.
In the next part, Profitability and Growth analysis is the most important where I have
discussed my findings about the financial performance of SPL and OPL and based on the
findings I have given some recommendations that will help SPL and OPL to strengthen their
financial base more.
Lastly I have come with a brief conclusion and then presented appendix and necessary
references.
5. TABLE OF CONTENT
Executive Summary
Chapter One: Introduction
1.1: Introduction……………………………………………………………………..1-2
1.2: Objective of the Study…………………………………………………………..2
1.3: Scope…………………………………………………………………………… 2
1.4: Methodology ……………………………………………………………………2
1.5: Limitations……………………………………………………………………....2-3
Chapter Two: Organizational Over View
2.1: Square Pharmaceutical Ltd. at a Glance...............................................................3-4
2.2: Orion Pharmaceutical Ltd. at a Glance.................................................................4-6
2.3: Share Holding Status.............................................................................................6-7
Chapter Three: Financial Analysis
3.1: Horizontal analysis................................................................................................8
3.2: Horizontal Analysis: Graphical presentation.........................................................9
3.3: Vertical analysis.....................................................................................................10
3.4: Vertical Analysis: Graphical presentation..............................................................11
Chapter Four: Ratio analysis
4.1: Profitability ratio
4.1.1 Net Profit Margin..........................................................................................12
4.1.2 Return on Equity...........................................................................................12-13
4.2: Liquidity ratio
4.2.1 Current Ratio.................................................................................................13
4.2.2 Quick Ratio...................................................................................................13-14
4.3: Activity/Efficiency Ratio
4.3.1 Inventory Turnover ratio...............................................................................14
4.3.2 Total Asset Turnover ratio............................................................................14
4.4: Solvency ratio/leverage ratio
6. 4.4.1 Debt - Equity Ratio.......................................................................................15
4.4.2 Debt - Total Asset Ratio................................................................................15
Chapter Five: Analysis of Profitability
5.1: Square Pharmaceutical Limited (Last Five Years)...............................................16
5.2: Orion Pharmaceutical Limited (Last Four Years).................................................17
5.3: Graphically presentation of Profitability Analysis................................................18-24
Chapter Six: Analysis of Growth
6.1: Analysis of growth of Square Pharmaceutical Ltd. (Last Five Years)..................25
6.2: Analysis of growth of Orion Pharmaceutical Ltd. (Last Four Years)...................25-26
6.3: Graphically Growth Analysis of SPL and OPL................................................................26
Chapter Seven: Conclusion........................................................................................27
Chapter Eight: Appendix
8.1: Financial Statements
8.1.1 Balance Sheet of SPL (Last Five Years)......................................................28-29
8.1.2 Balance Sheet of OPL (Last Four Years).....................................................29-30
8.1.3 Income Statement of SPL (Last Five Years)................................................30-31
8.1.4 Income Statement of OPL (Last Four Years)...............................................31-32
8.2: Reformulation Financial Statements
8.2.1 Reformulated Balance Sheet of SPL (Last Five Years)...............................33
8.2.2 Reformulated Balance Sheet of OPL (Last Four Years)..............................34
8.2.3 Reformulated Income Statement of SPL (Last Five Years).........................35
8.2.4 Reformulated Income Statement of OPL (Last Four Years)........................36
Chapter Nine: References.........................................................................................37
7. Page 1 of 37
CHAPTER ONE
1.1 Introduction
Square Pharmaceutical Ltd.
SQUARE today symbolizes a name – a state of mind. But its journey to the growth and
prosperity has been no bed of roses. From the inception in 1958, it has today burgeoned into one
of the top line conglomerates in Bangladesh. Square Pharmaceuticals Ltd., the flagship company,
is holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985
and is now on its way to becoming a high performance global player.
SQUARE Pharmaceuticals Limited is the largest pharmaceutical company in Bangladesh and it
has been continuously in the 1st position among all national and multinational companies since
1985. It was established in 1958, converted into a public limited company in 1991 and listed with
stock exchanges in 1995. The turnover of Square Pharma was Taka 30.28 Billion (US$ 385.22
million) with about 18.64% market share having a growth rate of about 25.36% (April 2014–
March 2015).
SQUARE Pharmaceuticals Limited has extended its range of services towards the highway of
global market. It pioneered exports of medicines from Bangladesh in 1987 and has been
exporting antibiotics and other pharmaceutical products. Present export market covers 36
countries. This extension in business and services has manifested the credibility of Square
Pharmaceuticals Limited.
Orion Pharmaceutical Ltd.
Orion Pharma a member of Orion Group was founded as a pharmaceutical manufacturing
company in 1965. With the mission to serve the ailing humanity around the globe Orion pharma
started its operation nearly four decades ago, and after a great run of success the company today
has proliferated out into one of the leading pharmaceutical companies in Bangladesh. It has
already established itself to the doctor's community, other health care professionals, chemists and
patients as a provider of quality medicines and health care services through 50 brands and 51
presentations of various formulations.
With the mission to serve the ailing humanity around the globe, Orion Pharma has proliferated
into one of the leading pharmaceutical companies in Bangladesh manufacturing and marketing
general drugs. It has already established itself to the doctor's community, other healthcare
professionals, chemists and patients as a provider of quality medicines and healthcare services
through 115 brands and 250 presentations of various formulations complying Good
Manufacturing Practices (GMP) and the guidelines of ISO-9001: 2008 Quality Management
System. Orion Pharma manufactures and markets a wide array of dosage forms including tablet,
capsule, syrup, suspension, injection, dry powder for syrup/suspension, cream/ointments in
8. Page 2 of 37
different therapeutic groups like anticancer, antibiotics, anti diabetics, anxiolytics, diuretics,
cardiovascular drugs etc.
The global landscape of pharmaceutical market is changing continuously with the rapid pace of
innovation in terms of pharmaceutical technology, regulatory requirements and treatment
options. To cope up with these changes, Orion Pharma Ltd. is currently implementing one of the
finest facilities for pharmaceutical finished products in south-east Asia. The facilities will follow
the 'Current Good Manufacturing Practices' standards of international regulatory authorities like
USFDA, UK MHRA, Health Canada, and Australian TGA etc. This new facility is going to be
the biggest in the pharmaceutical sector of Bangladesh in terms of investment, covered area,
number of varieties of dosage forms to be produced as well as superb in terms of pharmaceutical
technology, waste management, monitoring system and eco-friendliness.
1.2 Objective of the Study
Primary objective of the study entails the Profitability and Growth Analysis of Square
Pharmaceutical Limited and Orion Pharmaceutical Limited in order to assess the performance
and financial condition of the company.
Secondary objective is to fulfill my internship requirement.
1.3 Scope of the Study
Defining the scope of the study is a broad aspect to be described. Definitely Finance department
of Master of Professional Finance (MPF) Program helped me a lot to prepare the report but still
there were some limitations as confidentiality is strictly maintained in Square Pharmaceutical
Ltd. and Orion Pharmaceutical Ltd.
1.4 Methodology of the Study
In order to complete the study, two types of data have been used-
Data Collection
Primary Data
Secondary Data
Primary Data was collected through our course teacher of the MPF program of Finance
Department, University of Dhaka.
Secondary Data was collected mainly through the website of Square Pharmaceutical Limited and
Orion Pharmaceutical Limited. Besides these, I also studied some published reports and
organizational documents.
1.5 Limitations of the Study
9. Page 3 of 37
Their security concern about revealing the information was one of the biggest challenges for me.
For ensuring confidentiality SPL and OPL authority was unwilling to share some information
which was really needed to prepare the report. Their official website also contains a limited
amount of information required for making a report; I mainly covered the information from
annual reports and through the primary sources of data. Then the time duration for preparing the
report was not enough. Lastly, due to the work load I also got limited time to prepare the report.
As the PMF Program was first practical experience for me, so it was possible for me to
understand the whole and actual financial performance of SPL and OPL. Based on the annual
reports’ data I have used my understanding about finance to find out the Profitability and Growth
analysis and interpret the situation. So, the statements, recommendations and conclusions are
made according to my knowledge and level of understanding.
In spite of having much difficulties and limitations, I have given my best effort to accomplish the
report successfully.
CHAPTER TWO
Organizational Over View:
2.1 Square Pharmaceutical Ltd. at a Glance
SQUARE today symbolizes a name – a state of mind. But its journey to the growth and
prosperity has been no bed of roses. From the inception in 1958, it has today burgeoned into one
of the top line conglomerates in Bangladesh. Square Pharmaceuticals Ltd., the flagship company,
is holding the strong leadership position in the pharmaceutical industry of Bangladesh since 1985
and is now on its way to becoming a high performance global player.
10. Page 4 of 37
Year of Establishment (Initially as a Partnership) : 1958
Incorporated as a Private Limited Company : 1964
Technical Collaboration Agreement with Janssen Pharmaceuticals of Belgium
(A subsidiary of Johnson & Johnson International Ltd.)
: 1974
Technical Collaboration Agreement with F. Hoffman-La Roche & Co. Ltd. : 1982
Converted into Public Limited Company : 1991
Initially Public Offering (IPO) of shares of SQUARE Pharmaceuticals Ltd. : 1994
Stock Exchange Listing (Dhaka & Chittagong) : 1995
Agreement with M/s. Bovis Tanvec Ltd. of UK for implementation of Dhaka Plant : 1996
Awarded ISO-9001 Certificate : 1998
SQUARE Pharmaceuticals Ltd., Dhaka Unit gets the UK MHRA approval : 2007
Awarded TGA Certificate : 2012
Awarded “AA+” rating in the long term and ”ST-1” rating in short term by CRISL : 2013
PAI (Pre Approval Inspection) by US FDA was successful for Dhaka Site’s solid
dosage unit and WHO approved Square’s GMP
: 2015
Business Lines :
Manufacturing and Marketing of Pharmaceutical Finished Products, Basic Chemicals,
Agro Vet Products and Pesticide Products
Authorized Capital : Tk. 10,000 Million
Paid-up Capital : Tk. 6,235 million
Number of Employees : 6,710
Subsidiary Company: Square Formulations Ltd.
Associate Company : Square Textiles Ltd. Square Fashions Ltd. Square Hospitals Ltd.
2.2 Orion Pharmaceutical Ltd. at a Glance:
Orion Pharma Limited is one of the Premier Pharmaceutical Companies of Bangladesh which
has been contributing to improving the human health care of the Country by providing quality
branded-generic pharmaceuticals. We, at Orion Pharma Limited, always believe in 'Quality
Never ends' and refuse to settle for anything until it exceeds the existing standard.
Consequently, Orion Pharma Limited has been superseding the market growth consistently by
wide margin in last few years. The company has been awarded with the ISO-9001: 2000
Certificate in January 2003 for serving its valued customers with products of excellent quality.
Having four decades of vast experience imbibed with technical and professional expertise, Orion
Pharma Limited now levers a wide array of therapeutic areas including life saving anti-cancer
drugs and injectables having more than 110 generics and 220 presentations of Capsule, PFS,
ampoule, cephalosporin injectables, and cream and ointment products of different therapeutic
group.
The global landscape of pharmaceutical market is changing continuously with the rapid pace of
innovation in terms of pharmaceutical technology, regulatory requirements and treatment
options. To cope up with these changes Orion Pharma, is going to build one of the finest
11. Page 5 of 37
facilities for pharmaceutical finished products in South-East Asia. The facilities will be created
in accordance with the "Current Good Manufacturing Practices" and standards of international
regulatory authorities like USFDA, UK MHRA, Australian TGA etc.
This new facility will be one of the biggest in the pharmaceutical sector of Bangladesh in terms
of investment, covered area, number of varieties of dosage forms to be produced as well as
superb in terms of pharmaceutical technology, waste management, monitoring system and eco-
friendliness. It will be built in approximately 27 Acres of land at Siddhirganj, Narayanganj. The
production facilities will include Oncology, Hormone, Ophthalmic and General Formulation.
The construction of this facility is going on in full swing and will be completed very soon.
Incorporated as a Private Limited
Company (earlier known as Orion
Laboratories Limited)
21st
June, 1965
Date of Commercial Operation 25th
November, 1966
Converted into Public Limited Company 24th
June, 2010
Name changed into Orion Pharma Limited 15th
October, 2010
Initial Public Offering (IPO) of shares of
Orion Pharma Limited
2012
Listing with both Dhaka & Chittagong
Stock Exchanges
2013
Business Lines
Manufacturing and Marketing of Pharmaceutical
Finished Products, branded-generic primary and
chronic care medicines, maintaining strict
compliance of WHO & CGMP standards.
Authorized Capital Tk. 5,000 Million
12. Page 6 of 37
Paid-up Capital Tk. 2,340 Million
Number of Employees 2,063
Subsidiary Company
Orion Power Meghnaghat Limited
Dutch Bangla Power & Associates Limited
Associate Company
Orion Infusion Limited
Orion Infrastructure Limited
2.3 Share Holding Status
Square Pharmaceutical Ltd.
Share holdings structure (in %) for the year ended 31 March 2015:
17. Page 11 of 37
3.4 Vertical Analysis: Graphical presentation
- 5,000 10,000 15,000 20,000 25,000 30,000 35,000
Rev
COGS
GP
CA
NCA
TA
CL
NCL
EQ
TL&EQ
Square Pharmaceutical Ltd. (In Million BDT)
2014 2013
- 5,000 10,000 15,000 20,000 25,000 30,000
Rev
COGS
GP
CA
NCA
TA
CL
NCL
EQ
TL&EQ
Orion Pharmaceutical Ltd. (In Million BDT)
2014 2013
18. Page 12 of 37
CHAPTER FOUR
Ratio analysis:
There are few types of ratio analysis are discussed below:
4.1 Profitability ratio:
Net Profit X 100
4.1.1 Net Profit Margin=
Sale
Calculation :( Amount in Million BDT.)
Year Net Profit Sale Ratio
Square Pharma
Ltd.
2013 4129 x 100 20202 20.44%
2014 4946 x 100 23268 21.57%
Orion Pharma
Ltd.
2013 1001 x 100 11012 9.09%
2014 992 x 100 10707 9.26%
Comment:
The profit margin in 2014 is a bit higher than the previous year. It represents the company is
getting efficient in sales as well as operational cost management. A higher profit margin
indicates a more profitable company that has better control over its costs. So, Square
Pharmaceutical Ltd. more profitable company than Orion Pharmaceutical Ltd due to higher
profit margin.
Net Profit X 100
4.1.2 Return on Equity=
Owner's Equity (OE)
Calculation: (Amount in Million BDT.)
Year Net Profit Owner’s Equity Ratio
Square Pharma
Ltd.
2013 4129 x 100 22,378 18.45%
2014 4946 x 100 26,749 18.49%
Orion Pharma
Ltd.
2013 1001 x 100 15,875 6.31%
2014 992 x 100 16,552 6.00%
Comment:
19. Page 13 of 37
In 2014, Square can earn 18.49% return on its equity and in 2013, can earn 18.45% on its equity
that mean utilization of equity management is better in 2014 than 2013. Whereas Orion can earn
6.00% return on its equity and in 2013, can earn 6.13% on its equity.
4.2 Liquidity ratio:
Current Assets (CA)
4.2.1 Current Ratio =
Current Liabilities (CL)
Calculation: (Amount in Million BDT.)
Year Current Assets (CA) Current Liability (CL) Ratio
Square
Pharma Ltd.
2013 6946 3275 2.12
2014 7499 2395 3.31
Orion Pharma
Ltd.
2013 3987 5027 0.79
2014 6897 3196 2.16
Comment:
In 2014, Square Pharma has current assets of Tk.3.31 against Tk.1.00 current liabilities and in
2013, has current assets of Tk.2.12 against Tk.1.00 current liabilities. Square is in the increasing
position in 2014 because higher value of currents assets than that of previous year. On the other
hand Orion Pharma also 2.16 (2014) and 0.79 (2013) but lower than of Square Pharma.
CA - Inventory
4.2.2 Quick Ratio =
Current Liabilities (CL)
Calculation: (Amount in Million BDT.)
Year CA - Inventory Current Liability (CL) Ratio
Square
Pharma Ltd.
2013 6946 – 3091 3275 1.18
2014 7499 – 2737 2395 1.99
Orion Pharma
Ltd.
2013 3987 – 455 5027 0.70
2014 6897 - 443 3196 2.02
Comment: In 2014, Square Pharma has 1.99 times quick assets over current liabilities and in 2013, has
1.18 times quick assets over current liabilities. The trend leads to an increasing position in comparison to
the last year. It represents the liquidity position is getting higher day by day. Company is able to pay
liabilities out of its Quick Asset. In case of Orion Pharma it has 2.02 (2014) and 0.70 (2013) also
20. Page 14 of 37
increasing position in comparison to the last year. It means Company is able to pay liabilities out of its
quick assets.
4.3 Activity/Efficiency Ratio
COGS
4.3.1 Inventory Turnover ratio =
Avg Inventory
Calculation: (Amount in Million BDT.)
Year COGS Avg. Inventory Ratio
Square
Pharma Ltd.
2013 11405 3135 3.64
2014 12961 2914 4.45
Orion Pharma
Ltd.
2013 715 456 1.57
2014 728 449 1.62
Comment: It measures the company’s ability to convert the inventory into sale. In 2013, Square
Pharma can sale its inventory 3.64 times in a year and in 2014 it is 4.45 times. In 2014, Square
Pharma is in a better position in terms of sales of inventory in a year. In case of Orion Pharma it
has 1.62 (2014) and 1.57 (2013).
Net Sales
4.3.2 Total Asset Turnover ratio =
Avg. Total Assets
Calculation: (Amount in Million BDT.)
Year Net Sale Avg. Total Assets Ratio
Square
Pharma Ltd.
2013 20202 25817 0.78
2014 23268 29152 0.80
Orion Pharma
Ltd.
2013 11012 25542 0.43
2014 10707 25923 0.41
Comment:
In 2013, Square Pharma generates sales of BDT 0.78 by using assets of BDT 1.00 and in
2014, generates sales of BDT 0.80 by using assets of BDT 1.00. That means, productivity of
assets/asset utilization is more in 2014 than 2013 where as in Orion Pharma is more 2013 (0.43)
than 2014 (0.41).
21. Page 15 of 37
4.4 Solvency ratio/leverage ratio:
Total Liability/Debt
4.4.1 Debt - Equity Ratio =
Total Equity
Calculation: (Amount in Million BDT)
Year Total Liability Total Equity Ratio
Square
Pharma Ltd.
2013 4878 22378 0.22
2014 4298 26749 0.16
Orion Pharma
Ltd.
2013 9879 15875 0.62
2014 9540 16552 0.58
Comment:
In 2013, Square Pharma has liability of BDT 0.22 against equity of BDT 1.00 and in
2014, has liability of BDT 0.16 against equity of BDT 1.00 million. In terms of debt
management, the company is in good position in 2014. On the other hand Orion Pharma has
BDT 0.62 (2013) and BDT 0.58 (2014) against equity of BDT 1.00 million.
Total Liability
4.4.2 Debt - Total Asset Ratio =
Total Asset
Calculation: (Amount in Million BDT.)
Year Total Liability Total Assets Ratio
Square
Pharma Ltd.
2013 4878 27257 0.18
2014 4298 31046 0.14
Orion Pharma
Ltd.
2013 9879 25754 0.38
2014 9540 26092 0.37
Comment:
In 2014, Square Pharma 14.00% of assets are financed by debt and in 2013, 18.00% of assets are
financed by debt. The higher the ratio, the more leveraged of the company represents the greater
financial risk. In terms of financial risk, the company is in better position in 2014. Whereas
Orion Pharma 37.00% (2014) and 38.00% (2013) but lower position than Square Pharma.
22. Page 16 of 37
CHAPTER FIVE
Analysis of profitability:
5.1 Square Pharmaceutical Limited (Last Five Years)
Square Pharmaceuticals Limited (SPL)
Analysis of Profitability
(All figures are in million BDT) 2011 2012 2013 2014 2015
CI Net Income after Tax to Common
Shareholders
2831 3125 3553 4251 5186
CSE Equity 15970 19127 22378 26749 31092
OI Total Operating Income (After Tax) 3063 3459 3814 4378 5305
NOA Net Operating Assets 16348 18914 22392 24209 26100
NFO
(Net Financing Assets) /Net Financial
Obligation 378 -214 14 -2540 -4992
NFE/(NFI) Net Financial Expenses after tax 233 334 261 127 118
OA Total Operating Assets 18741 20939 24322 26730 29283
OL Total Operating Liabilities 2393 2026 1930 2521 3183
STBR Short Term Borrowing Rate After Tax 5% 5% 5% 5% 5%
Implicit Cost on OL 119.6 101.3 96.5 126.0 159.2
Particulars 2011 2012 2013 2014 2015
First Level
RNOA = OI/NOA 18.7% 18.3% 17.0% 18.1% 20.3%
FLEV=NFO/CSE 0.024 -0.011 0.001 -0.095 -0.161
NBC=NFE/NFO or RNFA=NFI/NFA 61.51% -156.10% 1841.56% -5.01% -2.37%
Spread=(RNOA-NBC) -42.8% 174.4% -1824.5% 23.1% 22.7%
FLEV*Spread -1.01% -1.95% -1.16% -2.19% -3.64%
ROCE=RNOA + (FLEV x SPREAD) 17.73% 16.34% 15.88% 15.89% 16.68%
ROE/ROCE = CI/CSE 17.73% 16.34% 15.88% 15.89% 16.68%
Particulars 2011 2012 2013 2014 2015
First Level
ROOA = OI+Implicit Cost/OA 16.99% 17.00% 16.08% 16.85% 18.66%
OPLLEV = OL/NOA 0.146 0.107 0.086 0.104 0.122
STBR 5% 5% 5% 5% 5%
Opspread 11.99% 12.00% 11.08% 11.85% 13.66%
OPLLEV*Opspread 1.75% 1.29% 0.95% 1.23% 1.67%
RNOA=ROOA+OPLLEV*Opspread 18.7% 18.3% 17.0% 18.1% 20.3%
RNOA = OI/NOA 18.7% 18.3% 17.0% 18.1% 20.3%
NET TURNOVER 16975 19798 20202 23268 26685
Net Operating Assets 16348 18914 22392 24209 26100
Second
Level
RNOA=PM*ATO
RNOA 18.7% 18.3% 17.0% 18.1% 20.3%
Profit Margin 18.0% 17.5% 18.9% 18.8% 19.9%
Asset Turnover 1.038 1.047 0.902 0.961 1.022
23. Page 17 of 37
5.2 Orion Pharmaceutical Limited (Last Four Years)
Orion Pharmaceuticals Limited (OPL)
Analysis of Profitability
(All figures are in million BDT) 2011 2012 2013 2014
CI Net Income after Tax to Common
Shareholders
967 1069 981 1050
CSE Equity 12263 13207 15875 16552
OI Total Operating Income (After Tax) 1406 2210 2187 2025
NOA Net Operating Assets 9981 13478 16233 18040
NFO
(Net Financing Assets) /Net Financial
Obligation -2282 271 357 1488
NFE/(NFI) Net Financial Expenses after tax -439 -1141 -1206 -975
OA Total Operating Assets 18770 22006 21887 25174
OL Total Operating Liabilities 8789 8528 5654 7134
STBR Short Term Borrowing Rate After Tax 5% 5% 5% 5%
Implicit Cost on OL 439.4 426.4 282.7 356.7
Particulars 2011 2012 2013 2014
First Level
RNOA = OI/NOA 14.1% 16.4% 13.5% 11.2%
FLEV=NFO/CSE -0.186 0.021 0.023 0.090
NBC=NFE/NFO or RNFA=NFI/NFA -19.2% 421.0% 337.4% 65.5%
Spread=(RNOA-NBC) 33.3% -404.6% -323.9% -54.3%
FLEV*Spread -6.198% -8.302% -7.293% -4.882%
ROCE=RNOA + (FLEV x SPREAD) 7.9% 8.1% 6.2% 6.3%
ROE/ROCE = CI/CSE 7.9% 8.1% 6.2% 6.3%
First Level
ROOA = OI+Implicit Cost/OA 9.8% 12.0% 11.3% 9.5%
OPLLEV = OL/NOA 0.881 0.633 0.348 0.395
STBR 5% 5% 5% 5%
Opspread 4.8% 7.0% 6.3% 4.5%
OPLLEV*Opspread 4.253% 4.416% 2.188% 1.764%
RNOA=ROOA+OPLLEV*Opspread 14.1% 16.4% 13.5% 11.2%
RNOA = OI/NOA 14.1% 16.4% 13.5% 11.2%
Net Sales Revenue 7026 9546 11012 10707
Net Operating Assets 9981 13478 16233 18040
Second
Level
RNOA=PM*ATO
RNOA 14.1% 16.4% 13.5% 11.2%
Profit Margin 20.0% 23.2% 19.9% 18.9%
Asset Turnover 0.704 0.708 0.678 0.593
24. Page 18 of 37
5.3 Graphical presentation of Profitability Analysis
5.3.1 Net Income after Tax
5.3.2 Equity (CSE)
5.3.3 Operating Income after Tax
Comments:
SPL is more market
dominated in pharmaceutical
business due to high growth
rate of net income after tax is
19.65% (2014) where as
OPL is 7.03% (2014).
Comments:
SPL is increasing equity
growth rate is 19.53% (2014)
where as OPL is 4.26%
(2014).
Comments:
SPL is increasing operating
income after tax growth rate
is 14.79% (2014) where as
OPL is -7.41% (2014).
25. Page 19 of 37
5.3.4 Net Operating Assets (NOA)
5.3.5 Net Financial Obligation - NFO / (Net Financial Assets – NFA)
5.3.6 Net Financial Expense – NFE / (Net Financial Income – NFI)
Comments:
SPL is increasing Net
Operating Assets growth rate
is 8.11% (2014) where as
OPL is 11.13% (2014).
Comments:
In SPL Net Financial Assets
shows in year 2012 & 2014
that means SPL is Cash Cow
Company (Cash Generating).
In OPL NFA shows in year
2011 but in year 2014 it
shows net financial
obligation (NFO).
Comments:
In SPL shows Net Financial
Expense (NFE) year 2011 to
2014. In OPL shows Net
Financial Income (NFI) from
year 2011 to 2014.
26. Page 20 of 37
5.3.7 Total Operating Asset (OA)
5.3.8 Total Operating Liability (OL)
5.3.9 Return on Net Operating Assets (RNOA)
Comments:
SPL is increasing Operating
Assets growth rate is 9.90%
(2014) where as OPL is
15.02% (2014).
Comments:
In SPL properly manage its
assets so its operating
liability is lower 9.43%
(2014) of OA. In OPL is
indicate higher OL, means
asset manage not proper way
9.90% (2014) where as OPL
is 15.02% (2014).
Comments:
In SPL Return on Net
Operating Assets 17.0%
(2013) and 18.1% (2014)
where as OPL decrease
RNOA 13.5% (2013) and
11.2% (2014)
27. Page 21 of 37
5.3.10 Financial Leverage (FINLEV)
5.3.11 Net Borrowing Cost (NBC)
5.3.12 Spread
Comments:
In SPL Financial Leverage is
0.001% (2013) and -0.095%
(2014) where as OPL
decrease RNOA 0.023%
(2013) and 0.090% (2014)
Comments:
In SPL Return on Net
Operating Assets 17.0%
(2013) and 18.1% (2014)
where as OPL decrease
RNOA 13.5% (2013) and
11.2% (2014)
Comments:
In SPL Net Borrowing Cost
(NBC) is highest 1841.56%
(2013) and -5.01% (2014)
where as OPL 337.4%
(2013) and 65.5% (2014)
Comments:
In SPL Spread -1824.5%
(2013) and 23.1% (2014)
where as OPL -323.9%
(2013) and -54.3% (2014)
28. Page 22 of 37
5.3.13 FINLEV*Spread
5.3.14 Return on Equity (ROCE)
5.3.15 Return on Operating Assets (ROOA)
Comments:
In SPL FINLEV*Spread -
1.16% (2013) and -2.19%
(2014) where as OPL –
7.29% (2013) and -4.88%
(2014)
Comments:
In SPL, ROCE is 15.88 %
(2013) and 15.89% (2014)
where as OPL 6.2% (2013)
and 6.3% (2014). SPL is
highest ROCE than OPL.
Comments:
In SPL, ROOA is 16.08 %
(2013) and 16.85% (2014)
where as OPL 11.3% (2013)
and 9.5% (2014). SPL is
highest ROOA than OPL.
29. Page 23 of 37
5.3.16 OPLLEV
5.3.17 OPSpread
5.3.18 OPLLEV*OPSpread
Comments:
In SPL, OPLLEV is 0.086 %
(2013) and 0.104% (2014)
where as OPL 0.348%
(2013) and 0.395% (2014).
Comments:
In SPL, OPSpread is 11.08 %
(2013) and 11.85% (2014)
where as OPL 6.3% (2013)
and 4.5% (2014).
Comments:
In SPL, OPLLEV*OPSpread
is 0.95 % (2013) and 1.23%
(2014) where as OPL 2.19%
(2013) and 1.76% (2014).
30. Page 24 of 37
5.3.19 Profit Margin (PM)
5.3.20 Assets Turnover (ATO)
0.000
0.200
0.400
0.600
0.800
1.000
1.200
2011 2012 2013 2014
SPL 1.038 1.047 0.902 0.961
OPL 0.704 0.708 0.678 0.593
Assets Turnover (ATO) (Times)
SPL OPL
Comments:
In SPL, profit margin (PM)
is 18.9 % (2013) and 18.8%
(2014) where as OPL 19.9%
(2013) and 18.9% (2014).
Comments:
In SPL, Assets Turnover
(ATO) is 0.90 times (2013)
and 0.96 times (2014) where
as OPL 0.67 times (2013)
and 0.59 times (2014).
31. Page 25 of 37
CHAPTER SIX
Analysis of Growth:
6.1 Analysis of growth of Square Pharmaceutical Ltd. (Last Five Years)
Square Pharmaceutical Ltd (SPL)
Analysis of Growth
(All figures are in million BDT) 2011 2012 2013 2014 2015
Sales Revenue 16,975 19,798 20,202 23,268 26,685
Sales Growth Rate 30.87% 16.63% 2.04% 15.18% 14.68%
Common Equity 15,970 19,127 22,378 26,749 31,092
Earnings 2,831 3,125 3,553 4,251 5,186
ROCE 17.73% 16.34% 15.88% 15.89% 16.68%
Residual Earnings 1,721.94 1,774.34 1,935.70 2,357.89 2,924.05
Abnormal Earnings Growth - 52.40 161.36 422.19 566.16
Square Pharmaceutical Ltd. is to maintain the increasing Residual Earning growth of the year
2011 to 2015. Sales continue to growth from the year 2011 to 2015 and the positive or high
sales growth translated to higher earnings. Significantly ROCE constant on higher growing equity
investment, leading to positive Residual Earnings and positive Abnormal Earnings Growth. The
growth company from year 2011 to 2015.
Calculation of Required Rate of Return: (Using CAPM Model)
Risk-free
rate 5.29%
Square Pharmaceutical
Ltd. 0.569815225
Risk
Premium 5.56%
Cost of Equity 0.084578516
Required Rate of Return 8.46%
6.2 Analysis of growth of Orion Pharmaceutical Ltd. (Last Four Years)
Orion Pharmaceutical Ltd (OPL)
Analysis of Growth
(All figures are in million BDT) 2011 2012 2013 2014 2015
Sales Revenue 7,026 9,546 11,012 10,707
Sales Growth Rate 16.15% 35.87% 15.35% -2.77%
Common Equity 12,263 13,207 15,875 16,552
32. Page 26 of 37
Earnings 967 1,069 981 1,050
ROCE 7.88% 8.09% 6.18% 6.34%
Residual Earnings (491) (545) (757) (1,039)
Abnormal Earnings Growth - (54) (213) (282)
Up to 2014, Orion Pharmaceutical Ltd maintained a high growth in sales but shows lower
earnings in the year 2011 & 2013. After 2013, the company came back to higher earning and
shows a high growth in earning in the following year. Significantly ROCE was declined in 2013
and later on it was increased in 2014 followed by the increased earnings. But the Residual
Earnings of the company become negative whereas the Abnormal Earning growth shows
negative declining from year 2012 to 2014. Thus the company is a no growth company.
Calculation of Required Rate of Return: (Using CAPM Model)
Risk-free
rate 5.29%
Orion Pharmaceutical Ltd. 1.415529077
Risk
Premium 5.56%
Cost of Equity 0.131595441
Required Rate of Return 13.16%
6.3 Graphically Growth Analysis of SPL and OPL:
33. Page 27 of 37
CHAPTER SEVEN
Conclusion
Profitability analysis and Growth analysis is a part of financial statement analysis and through
these we can have knowledge about the company’s past and present performance. Most
importantly it gives us an idea that what can be the company’s performance in the future.
Profitability analysis and Growth analysis involves the calculation of statistical relationship
between data and it is a very popular technique of financial statement analysis. Throughout my
analysis, I came to know about the financial strength, operational efficacy and management
efficacy of Square Pharmaceutical Limited (SPL) and Orion Pharmaceutical Limited (OPL). I
have realized that SPL and OPL is performing well, it is financially solvents but there some
threats which are increasing recently. If the risks or threats can be handled properly then
definitely SPL and OPL can survive successfully as like the previous years.
34. Page 28 of 37
CHAPTER EIGHT
Appendix
8.1 Financial Statement:
8.1.1 Balance Sheet of SPL (Last Five Years)
SQUARE PHARMACEUTICALS LTD.
BALANCE SHEET
As at 31 March 2011, 2012, 2013, 2014, 2015
(All figures are in million BDT)
Particulars 2011 2012 2013 2014 2015
ASSETS:
Non-Current Assets: 14,066 16,128 20,310 23,547 25,459
Property, Plant and Equipment-Carrying Value 8,059 9,172 9,613 13,934 18,009
Deferred Tax Assets - - - - 75
Capital Work-in-Progress 888 1,274 4,907 3,257 208
Investment - Associates Undertaking 4,274 4,709 4,915 5,364 6,036
Pre-Operating/Preliminary Expense 0.07 1 31 - -
Investment - Long Term (at Cost) 229 168 158 148 252
Investment in Marketable Securities (Fair
Value)
616 805 687 844 879
Current Assets: 8,454 8,249 6,946 7,499 9,732
Inventories 3,179 3,179 3,091 2,737 3,310
Trade Debtors 1,422 819 813 767 895
Advances, Deposits and Prepayments 598 695 952 672 750
Margin against BTB Letter of Credit 321 1,091 - - -
Short Term Loan 2,505 1,717 1,109 1,161 885
Cash and Cash Equivalents 429 748 981 2,163 3,892
TOTAL ASSETS 22,520 24,377 27,257 31,046 35,191
SHAREHOLDERS' EQUITY AND
LIABILITIES:
Shareholders' Equity: 15,970 19,127 22,378 26,749 31,092
Share Capital 1,962 2,648 3,708 4,820 5,543
Share Premium 2,035 2,035 2,035 2,035 2,035
General Reserve 106 106 106 106 106
Tax Holiday Reserve 1,533 450 406 406 -
Gain on Marketable Securities (Unrealized) 294 420 314 449 265
Retained Earnings 10,033 13,460 15,801 18,923 23,144
Non Controlling Interest 6 7 8 9 (2)
35. Page 29 of 37
Total Liabilities 6,551 5,249 4,879 4,297 4,100
Non-Current Liabilities: 1,029 934 1,603 1,903 1,551
Long Term Loans - Secured 726 509 1,106 1,184 659
Deferred Tax Liability 303 425 497 719 891
Current Liabilities: 5,522 4,315 3,275 2,395 2,549
Short Term Bank Loans 2,914 2,237 1,302 131 -
Long Term Loans - Current Portion 518 477 540 461 257
Trade Creditors 1,208 531 7 218 255
Liabilities for Expenses 90 115 173 21 43
Liabilities for Other Finance 791 955 1,253 1,564 1,994
TOTAL SHAREHOLDERS' EQUITY AND
LIABILITIES
22520 24377 27257 31046 35191
Divided by 1000000 1000000 1000000 1000000 1000000
8.1.2 Balance Sheet of OPL (Last Four Years)
ORION PHARMACEUTICALS LTD.
BALANCE SHEET
As at 31 December 2011, 2012, 2013, 2014
(All figures are in million BDT)
Particulars 2011 2012 2013 2014
ASSETS:
Non-Current Assets: 20,492.3 21,728.5 21,767.4 19,195.7
Property, Plant and Equipment-Carrying Value 15,737.6 15,982.2 15,325.3 14,906.5
Construction work in progress 125.1 343.9 944.0 1,210.7
Investment in Associates 362.2 2,798.2 2,838.6 2,917.6
Intangible assets 1.65 2.64 2.64 2.11
Other Investment 4265.85 2601.54 2656.84 158.89
Current Assets: 2973.78 3601.08 3986.77 6896.61
Inventories 367.49 455.67 454.60 442.94
Trade and other receivables 1678.89 1758.91 1940.17 5326.68
Advances, Deposits and Prepayments 496.90 664.39 381.97 367.64
Fixed Deposit with banks 345.73 372.11 573.43 370.82
Cash and Cash Equivalents 84.77 350.00 636.60 388.53
TOTAL ASSETS 23466.12 25329.58 25754.20 26092.33
SHAREHOLDERS' EQUITY AND LIABILITIES:
36. Page 30 of 37
Shareholders' Equity: 12263.32 13207.38 15875.47 16551.94
Share Capital 1550.00 1550.00 2340.00 2340.00
Share Premium 6547.50 6547.50 8016.89 8016.89
General Reserve 2788.23 2599.59 2137.08 2013.78
Retained Earnings 1029.63 2008.22 2770.09 3423.24
Non Controlling Interest 347.96 502.07 611.41 758.02
Total Liabilities 11202.80 12122.20 9878.73 9540.39
Non-Current Liabilities: 7613.30 7404.33 4852.13 6344.13
Redeemable Preference Share 500.00 1000.00 1000.00 1000.00
Noncurrent portion of term loan 6573.49 6172.63 3642.35 5131.93
Provision for decommissioning of assets 0.00 92.69 104.74 121.98
Advance against salary 470.00 0.00 0.00 0.00
Employee benefit payable 54.06 54.69 18.93 16.80
Deferred tax liability 15.75 84.32 86.11 73.42
Current Liabilities: 3589.50 4717.87 5026.60 3196.26
Short term loan 531.89 668.82 529.47 1406.63
Current portion of term loan 1382.34 1925.80 2694.83 0.00
Trade and Other payable 708.24 976.25 613.54 715.99
Accrued Expense 967.03 1146.99 1188.77 1073.64
TOTAL SHAREHOLDERS' EQUITY AND
LIABILITIES
23466.12 25329.58 25754.20 26092.33
Divided by 1000000 1000000 1000000 1000000
8.1.3 Income Statement of SPL (Last Five Years)
SQUARE PHARMACEUTICALS LTD.
INCOME STATEMENT
For the Year Ended 31 March 2011, 2012, 2013, 2014, 2015
(All figures are in million BDT)
Particulars 2011 2012 2013 2014 2015
GROSS TURNOVER 19366 22655 23360 26946 30834
Less: Value Added Tax -2391 -2857 -3158 -3677 -4149
NET TURNOVER 16975 19798 20202 23268 26685
COST OF GOODS SOLD -10284 -11908 -11405 -12961 -14943
GROSS PROFIT 6691 7890 8797 10308 11742
Operating Expenses: -2874 -3275 -3708 -4163 -4533
Selling and Distribution Expenses -2230 -2553 -2966 -3432 -3758
Administrative Expenses -643 -722 -742 -731 -776
37. Page 31 of 37
PROFIT FROM OPERATIONS 3817 4616 5089 6145 7208
Other Operating Income 454 420 378 245 294
Financial Expenses -310 -465 -357 -177 -159
NET PROFIT BEFORE WPPF 3961 4571 5110 6213 7343
Allocation for WPPF -191 -220 -247 -300 -380
NET PROFIT BEFORE TAX 3770 4350 4863 5912 6964
Provision for Income Tax -862 -1103 -1238 -1519 -1680
Provision for Deferred Income Tax -77 -122 -72 -143 -172
Deferred Tax Assets 0 0 0 0 75
Tax -939 -1225 -1310 -1662 -1777
NET PROFIT AFTER TAX 2831 3125 3553 4251 5186
Profit/(Loss) From Associates Undertaking 428 495 576 696 795
PROFIT FOR THE YEAR 3259 3620 4129 4946 5982
Other Comphrehensive Income:
Gain/(Loss) on Marketable Securities (Unrealized) 127 126 -107 136 -184
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR 3387 3746 4022 5082 5798
Earnings Per Share (EPS) 12.30 9.76 11.13 8.92 10.80
Number of Shares used to compute EPS 265 371 371 554 554
Divided by 1000000 1000000 1000000 1000000 1000000
Effective Tax Rate 24.9% 28.2% 26.9% 28.1% 25.5%
8.1.4 Income Statement of OPL (Last Four Years)
ORION PHARMACEUTICALS LTD.
INCOME STATEMENT
For the Year Ended 31 December 2011, 2012, 2013, 2014
(All figures are in million BDT)
Particulars 2011 2012 2013 2014
Net Sales Revenue 7026 9546 11012 10707
Cost of Goods Sold -4941 -6500 -8116 -7992
GROSS PROFIT 2086 3046 2896 2714
Operating Expenses: -619 -665 -660 -673
Administrative Expenses -185 -193 -230 -255
Selling, Marketing and Distribution Expenses -434 -472 -430 -418
PROFIT FROM OPERATIONS 1467 2382 2236 2041
Other Income 444 308 177 193
Finance cost -583 -1374 -1320 -1066
NET PROFIT BEFORE WPPF 1328 1316 1093 1169
Contribution to Workers' Profit Participation/ Welfare Funds -43 -28 -20 -21
NET PROFIT BEFORE TAX 1285 1288 1073 1147
38. Page 32 of 37
Income Tax Expense -318 -219 -93 -98
Current Tax -312 -220 -97 -97
Deferred Tax Income/(Expense) -6 1 4 0
NET PROFIT AFTER TAX 967 1069 981 1050
Share of Profit from Associate 8 18 75 92
Net Profit 975 1087 1056 1142
Less: Non Controlling Interest (Share of operating profit) -55 -154 -147 -148
Less: Pre Acquisition Profit -57 0 0
Net Profit After Tax Attributable to Ordinary Share
Holder
863 933 909 994
Add: Other Comprehensive Income 2279 -98 92 -2
Total Comprehensive Income Attributable to Ordinary Share
Holder
3142 835 1001 992
Earnings Per Share (EPS) 5.56 6.02 4.06 4.25
Divided by 1000000 1000000 1000000 1000000
Effective Tax Rate 24.8% 17.0% 8.6% 8.5%
39. Page 33 of 37
8.2 Reformulation Financial Statements:
8.2.1 Reformulated Balance Sheet of SPL (Last Five Years)
Reformulated Balance Sheet Square Pharmaceuticals Limited
Classification (All figures are in million BDT) 2011 2012 2013 2014 2015
Operating Assets
OA1 Property, Plant and Equipment-Carrying Value 8059.5 9171.8 9613.1 13933.7 18009.2
OA2 Deferred Tax Assets 0.0 0.0 0.0 0.0 75.2
OA3 Capital Work-in-Progress 887.6 1274.4 4907.0 3256.8 207.6
OA4 Investment - Associates Undertaking 4273.6 4709.1 4915.0 5364.2 6036.1
OA5 Pre-Operating/Preliminary Expense 0.1 0.5 30.6 0.0 0.0
OA6 Inventories 3179.0 3178.7 3091.3 2737.1 3310.1
OA7 Trade Debtors 1421.6 819.0 812.7 766.6 894.5
OA8 Advances, Deposits and Prepayments 598.0 694.8 952.4 671.7 750.2
OA9 Margin against BTB Letter of Credit 321.5 1091.1 0.0 0.0 0.0
Total Operating Assets 18740.7 20939.5 24322.1 26730.1 29282.9
Operating Liabilities
OL1 Deferred Tax Liability 302.9 425.2 497.0 719.0 891.4
OL2 Trade Creditors 1208.1 531.3 7.0 217.9 254.8
OL3 Liabilities for Expenses 90.5 114.5 173.3 20.5 43.0
OL4 Liabilities for Other Finance 791.5 954.9 1252.6 1563.6 1994.1
Total Operating Liabilities 2392.9 2025.9 1930.0 2521.0 3183.2
Net Operating Assets 16347.7 18913.5 22392.1 24209.2 26099.7
Financial Obligations
FO1 Long Term Loans - Secured 725.6 508.8 1106.3 1183.6 659.1
FO2 Short Term Bank Loans 2914.1 2237.5 1302.0 131.1 0.0
FO3 Long Term Loans - Current Portion 518.2 477.1 540.4 461.4 257.2
Total Financial Obligations 4158.0 3223.4 2948.8 1776.2 916.3
Financial Assets
FA1 Investment - Long Term (at Cost) 229.3 167.7 157.7 147.7 251.6
FA2
Investment in Marketable Securities (Fair
Value)
616.3 804.6 687.0 844.4 879.2
FA3 Short Term Loan 2504.8 1717.3 1108.8 1161.2 885.2
FA4 Cash and Cash Equivalents 429.3 747.6 981.2 2162.7 3892.2
Total Financial Assets 3779.8 3437.2 2934.6 4316.0 5908.2
(Net Financing Assets) /Net Financial Obligation 378.2 -213.8 14.2 -2539.8 -4991.9
Equity 15970 19127 22378 26749 31092
OK OK OK OK OK
40. Page 34 of 37
8.2.2 Reformulated Balance Sheet of OPL (Last Four Years)
Reformulated Balance Sheet Orion Pharmaceuticals Limited
Classificatio
n
(All figures are in million BDT) 2011 2012 2013 2014
Operating Assets
OA1 Property, Plant and Equipment-Carrying Value 15737.6 15982.2 15325.3 14906.5
OA2 Construction work in progress 125.1 343.9 944.0 1210.7
OA3 Investment in Associates 362.2 2798.2 2838.6 2917.6
OA4 Intangible assets 1.7 2.6 2.6 2.1
OA5 Inventories 367.5 455.7 454.6 442.9
OA6 Trade and other receivables 1678.9 1758.9 1940.2 5326.7
OA7 Advances, Deposits and Prepayments 496.9 664.4 382.0 367.6
Total Operating Assets 18769.8 22005.9 21887.3 25174.1
Operating Liabilities
OL1 Non-current portion of term loan 6573.5 6172.6 3642.3 5131.9
OL2 Provision for decommissioning of assets 0.0 92.7 104.7 122.0
OL3 Advance against salary 470.0 0.0 0.0 0.0
OL4 Employee benefit payable 54.1 54.7 18.9 16.8
OL5 Deferred tax liability 15.8 84.3 86.1 73.4
OL6 Trade and Other payable 708.2 976.3 613.5 716.0
OL7 Accrued Expense 967.0 1147.0 1188.8 1073.6
Total Operating Liabilities 8788.6 8527.6 5654.4 7133.8
Net Operating Assets 9981.2 13478.4 16232.9 18040.3
Financial Obligations
FO1 Redeemable Preference Share 500.0 1000.0 1000.0 1000.0
FO2 Short term loan 531.9 668.8 529.5 1406.6
FO3 Current portion of term loan 1382.3 1925.8 2694.8 0.0
Total Financial Obligations 2414.2 3594.6 4224.3 2406.6
Financial Assets
FA1 Other Investment 4265.8 2601.5 2656.8 158.9
FA2 Fixed Deposit with banks 345.7 372.1 573.4 370.8
FA3 Cash and Cash Equivalents 84.8 350.0 636.6 388.5
Total Financial Assets 4696.3 3323.6 3866.9 918.2
(Net Financing Assets) /Net Financial Obligation -2282.1 271.0 357.4 1488.4
Equity 12263.3 13207.4 15875.5 16551.9
OK OK OK OK
41. Page 35 of 37
8.2.3 Reformulated Income Statement of SPL (Last Five Years)
Reformulated Income Statement Square Pharmaceuticals Limited
Classification (All figures are in million BDT) 2011 2012 2013 2014 2015
OI1 NET TURNOVER 16974.7 19798.1 20202.0 23268.4 26684.6
OE1 COST OF GOODS SOLD -10283.8 -11907.8 -11404.6 -12960.7 -14942.9
Gross Profit 6690.9 7890.3 8797.4 10307.7 11741.7
OE2 Selling and Distribution Expenses -2230.2 -2552.8 -2965.9 -3431.9 -3757.8
OE3 Administrative Expenses -643.5 -722.0 -742.3 -731.0 -775.6
OE4 Allocation for WPPF -191.1 -220.5 -246.7 -300.4 -379.8
Total Operating Expenses -3064.8 -3495.3 -3955.0 -4463.3 -4913.3
Core Operating Income from Sales
(before tax)
3626.1 4395.1 4842.5 5844.3 6828.4
Tax on Operating Income from Sales
RepTax Tax as reported -939.3 -1225.1 -1309.7 -1661.8 -1777.1
Tax allocated to other operating income 113.1 118.2 101.8 68.9 75.0
Tax benefit from net financial expenses -77.2 -130.8 -96.2 -49.8 -40.5
Tax on Operating Income from Sales -903.4 -1237.7 -1304.1 -1642.7 -1742.6
Core Operating Income from Sales (after
tax)
2722.7 3157.3 3538.3 4201.7 5085.8
Other operating income / (expense) before
Tax
OOI1 Other Operating Income 453.9 419.6 377.8 245.1 293.7
Total Other Operating Income before tax 453.9 419.6 377.8 245.1 293.7
Tax on other Operating Income 113.1 118.2 101.8 68.9 75.0
Other Operating Income (After Tax) 340.8 301.5 276.1 176.2 218.8
Total Operating Income (After Tax) 3063.5 3458.8 3814.4 4377.9 5304.6
Financial Expenses (Income)
FE1 Financial Expenses -310 -465 -357 -177 -159
Net Financial Expenses before tax -310 -465 -357 -177 -159
Tax benefit from net financial expenses 77 131 96 50 40
Net Financial Expenses after tax -233 -334 -261 -127 -118
Net Income after Tax to Common
Shareholders
2831 3125 3553 4251 5186
Check Correct Correct Correct Correct Correct
42. Page 36 of 37
Reformulated Income Statement Orion Pharmaceuticals Limited
Classification (All figures are in million BDT) 2011 2012 2013 2014
OI1 Net Sales Revenue 7026 9546 11012 10707
OE1 Cost of Goods Sold -4941 -6500 -8116 -7992
Gross Profit 2086 3046 2896 2714
OE2 Administrative Expenses -185 -193 -230 -255
OE3 Selling, Marketing and Distribution Expenses -434 -472 -430 -418
OE4
Contribution to Workers' Profit Participation/
Welfare Funds
-43 -28 -20 -21
Total Operating Expenses -661 -693 -680 -694
Core Operating Income from Sales (before
tax)
1424 2354 2216 2020
Tax on Operating Income from Sales
Rep Tax Income Tax Expense -318 -219 -93 -98
Tax benefit from net financial expenses -144.4 -233.3 -113.9 -90.6
Tax on other Operating Income 109.9 52.3 15.3 16.4
Tax on Operating Income from Sales -353 -400 -191 -172
Core Operating Income from Sales (after tax) 1072 1954 2025 1848
Other operating income / (expense) before Tax
OOI1 Other Income 443.8 308 177 193
Total Other Operating Income before tax 443.8 308 177 193
Tax on other Operating Income 109.9 52.3 15.3 16.4
Other Operating Income (After Tax) 334.0 255.8 161.9 176.5
Total Operating Income (After Tax) 1405.7 2210.0 2186.7 2024.8
Financial Expenses (Income)
FE1 Finance cost -583 -1374 -1320 -1066
Tax benefit from net financial expenses 144.4 233.3 113.9 90.6
Net Financial Expenses after tax -439 -1141 -1206 -975
Net Income after Tax to Common
Shareholders
966.9 1069.1 980.8 1049.7
Correct Correct Correct Correct
8.2.4 Reformulated Income Statement of OPL (Last Four Years)
43. Page 37 of 37
CHAPTER NINE
References
1. http://www.squarepharma.com.bd/
2. http://www.orionpharmabd.com/
3. http://www.dsebd.org/
4. Financial Statement Analysis and Security Valuation
by Stephen H. Penman(9th
edition)
