Scrutinize Financial Proficiency and Profitability Spotlight of Beximco Pharmaceutical Ltd. in Bangladesh

Kazi Farzana Shumi

Assistant Professor of Finance, Department of Business Administration, International Islamic University of Chittagong, Dhaka Campus, Dhaka, Bangladesh. PhD fellow, International Islamic University of Malayasia

Abstract

The report applies to evaluate how well the company performs. Financial proficiency of a company is usually related to how well a company can use it assets, share holders equity and liability, revenue and expenses. Financial ratio analysis is one of the best tools for measuring profitability highlights of any company. It analyzes the companyrsquo;s use of its assets and control of its expenses. It also used to analyze the companyrsquo;s past financial performance and to establish the future trend of financial position. The main aim is to analyze performance of last 5 years through ratio analysis and DuPont analysis of Beximco Pharmaceuticals Ltd. The main data collected from the annual financial reports of Beximco Pharmaceuticals Ltd. from 2009 to 2013. Different financial ratios are evaluated such liquidity ratios, asset management ratios, profitability ratios, market value ratios, debt management ratios and finally measure the best performance of BPL. This study will attempt to understand the financial conditions of BPL on different segments such as liquidity, profitability amp; solvency. The purpose is also to make recommendations for improving the financial stability and soundness of different services provided to the shareholders of BPL. It is also the purpose of the researcher to help the management by providing an idea to take appropriate decisions about the quality of the investment amp; financing in future.

Keywords: Profitability, liquidity, Market value, Asset Management, debt management, DuPont.

Introduction

Beximco Pharmaceuticals Ltd. (Beximco Pharma) is a leading manufacturer of medicines and Active Pharmaceutical Ingredients (APIs) based in Bangladesh. Incorporated in the late 70s, Beximco Pharma began as a distributor, importing products from global MNCs like Bayer, Germany and Upjohn, USA and selling them in the local market, which were later manufactured and distributed under licensing arrangement. Over the years the company has grown from strength to strength and today it has become a leading exporter of medicines in the country winning National Export (Gold) Trophy a record four times. Benchmarked to global standards, Companyrsquo;s manufacturing facilities have been accredited by the major global regulatory authorities, and it has so far expanded its geographic footprint across all the continents.

Beximco Pharma currently has a portfolio of more than 500 products encompassing all major therapeutic categories, and it has successfully differentiated itself by offering technology driven specialized products. With a dedicated workforce of around 3,000 people, the simple principle on which it was founded remains the same: producing high-quality generic drugs and making them affordable to their people. Here, we want to go for measuring overall financial performance of BEXIMCO trough Ratio analysis for couple of years data along with growth trend and dupont analysis.

Objectives of the Study

• • To give a brief overview and some idea about its management and organizational structure of Beximco Pharmaceuticals Limited. Moreover, assess and find out the financial condition of BPL and to evaluate the performance of BPL in last Five years.
  • To determine the measure of financial performance through ratio analysis (Liquidity Ratios, Asset Management Ratios, Profitability Ratios analysis, Debt coverage Ratio, Market value ratios), DuPont Analysis and trends.
  • To give a clear picture about the financial performance of BPL in last five years by Analyzing the growth charts of these ratios.

Literature Review

Maryam MOHAMMADI (2012), she state that, accounting principles are useful tools in executing and improving a successful practice management plan. In todayrsquo;s competitive environment, evaluating the financial performance is crucial for companies in manufacturing sector. The analysis of financial performance reflects the financial position of the company, the level of the competitiveness in the same sector, and a thorough knowledge about the cost and profit centers within the firm. Managers, investors, and creditors can then apply this accounting information provided by financial analysis in their strategic planning and investment decisions. This study investigates the financial performance of an investment company in Malaysia for a three-year period from

2009 to 2011, which is assessed using financial ratios. The findings pointed out that overall company performance reduced remarkably in the last year of the analysis. This study principally emphasizes on how accounting information aids budgetary decision-makers to evaluate the company financial performance, determine its future obligations, and make better investment decisions.

Jo Nelgadde (2010), debt collection and debt recovery tools a company guide to using debt solution tools for effective debt collection: credit insurance, a solicitor or debt attorney or a debt collection agency. Moreover, collection of accounts receivable, debt collection or debt recovery is an important source of a companyrsquo;s cash flow and business finance. As such, learning about credit management and debt recovery can prove vital for entrepreneurs.

Munya Mtetwa (2010), in this article he short propose that about the fixed asset. He define that fixed assets are assets that are used in production or supply of goods or services and they are to be used within the business for more than one financial year. Consequently, fixed assets represent the companys long term

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