Vous êtes sur la page 1sur 10

1.

Net working capital

Net Working Capital is a financial metric which represents

operating liquidity available to a business or organization.

7,000,000,000 6,000,000,000 5,000,000,000 4,000,000,000 3,000,000,000 2,000,000,000 1,000,000,000 0 2008 2009 2010 Industry Beximco Square

In the 3 years, both Beximco and Square Pharmas Net working Capital was below the industry average. Beximco Pharmas NWC increased in 2009 compared to 2008 , however it decreased in 2010 which is a worrying sign. However, Square Pharma is looking better even though the NWC was low in the first two years, it showed a significant increase in 2010. Cash Conversion Cycle
350 300 250 200 150 100 50 0 Industry Beximco Square

The cash

2008

2009

2010

conversion

cycle is the net number of days from the outlay of cash for raw material to receiving payment from the customer. Because this

number effectively corresponds to the time that the firm's cash is tied up in operations and unavailable for other activities, management generally aims at a low net count. Having a CCC as low as a company can is the best condition but staying under the industry is a much better situation. In the above graph we can see that the industry has an average CCC of 212 days. Square Pharma looks in a good position since it has managed to stay below the industry in all of the three years. The story is however very different for Beximco as they only came below in 2009 and just barely. They should rethink their strategy about inventories, receivables and payables as in 2010 their CCC was abnormally higher thanc the industry. 2. Profit Margin

The profit margin is mostly used for internal comparison. A low profit margin indicates a low margin of safety: higher risk that a decline in sales will erase profits and result in a net loss, or a negative margin.
0.35 0.30 0.25 0.20 0.15 0.10 0.05 0.00 2008 2009 2010 Industry Beximco Square

Squares Profit

Margin although on the decline was higher than the industry in all of the three years. Beximcos profit margin was matched the industry in the last two years before rising a little in 2010. Return on Asset This ratio gives the idea of how much many each Tk worth of asset can generate. It's a useful number for comparing competing companies in the same industry.
0.16 0.14 0.12 0.10 0.08 0.06 0.04 0.02 0.00 2008 2009 2010 Industry Beximco Square

Squares ROA was a lot higher than the industry indicating that it is making much better use of its assets compared to the other companies in the industry. The same cannot be said for Beximco, their ROA was well below the industry. The only comfort for them is that the ROA seemed to increase from 2009 to 2010. Return on Equity This ratio is one for the investors. It indicates the amount of money each TK worth of investment in the company generates.

0.20 0.15 Industry 0.10 0.05 0.00 2008 2009 2010 Beximco Square

The scenario is pretty similar to ROA. Square has Return on Equity much higher than the industry (almost double). And as before, Beximco Pharmas ROE is much lower than the industry. Fixed Asset Turnover Ratio The higher the FATO ratio, the better, because a high ratio indicates the business has less money tied up in fixed assets for each unit of currency of sales revenue. A declining ratio may indicate that the business is over-invested in plant,

equipment, or other fixed assets.


1.40 1.20 1.00 0.80 0.60 0.40 0.20 0.00 2008 2009 2010 Industry Beximco Square

Square Pharmas FATOR is above the industry average indicating that is in a good position unlike Beximco.

Total Asset Turnover Ratio Asset turnover is a financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue or sales income to the company.
1.00 0.80 0.60 0.40 0.20 0.00 2008 2009 2010 Industry Beximco Square

This graph also depicts Beximcos dismal performance and Square Pharmas superior position compared to the industry. 3. Weighted Average Cost of Capital

The WACC is the minimum return that a company must earn on an existing asset base to satisfy its creditors, owners, and other providers of capital, or they will invest elsewhere.
2008 Industry Beximco Square 0.07
0.05

2009 0.08
0.04

2010 Average 0.09


0.07

0.08
0.05

0.11

0.14

0.13

0.13

0.16 0.14 0.12 0.10 0.08 0.06 0.04 0.02 0.00 2008 2009 2010 Industry Beximco Square

According

to

the

traditional

approach,

an

optimal

financial

structure does exist, which will allow the company to maximize its value through the right amount of debts and financial

leverage. The company minimizes its WACC, in other words, the cost of financing. The cost of debt is lower than the cost of equity (Kd < Ke) as there is less risk. From that standpoint, any increase in debt will reduce the WACC. However, increasing debts creates a higher risk for shareholders. The market will therefore require a higher Ke. The more the company borrows, the higher the rate of interest as the risk increases. The optimal structure is therefore one in which the WACC is minimal. At this rate, the value of the company is maximized. 4. Debt to Equity Ratio

The Balance Sheet leverage ratio indicates the composition of a company's to

capitalization. The total capitalization indicates the balance between money versus the money or assets owned. Generally, creditors prefer a lower ratio financial risk while investors prefer a higher ratio to realize the return benefits of financial leverage.

Average
Debt Equity Ratio(x)

Industry 0.26

Beximco 0.15

Square 0.09

Since both Beximco Pharmas and Square Pharmas D/E Ratio is less than one, we can safely say that they are mostly financed by equity. A debt/equity ratio below 0.50 is ideal; however, many stable companies have a ratio of 1.0 or higher. But a debt/equity ratio above 2.0 most likely spells trouble.Since

both D/E ratios are a lot less than 0.5, then the companies might contemplate on taking debt in order to get the tax

benefits. 5. Dividend Payout Ratio

The payout ratio provides an idea of how well earnings support the dividend payments. More mature companies tend to have a higher payout ratio.
Average
Payout Ratio,POR(x)

Industry
0.19

Beximco 0.15

Square 0.21

Unfortunately, there really is no ideal payout ratio. It varies both by industry as well as individual company. The best way is to compare it to other companies in the same industry. Here

Square Pharma has a ratio higher than the industry and Beximcos ratio is lower. 6.
Average
Price per Earning Ratio,P/E(x)

Price Earning Ratio


Industry
132.96

Beximco
34.18

Square 25.30

P/E

Ratio

(meaning

the

Stock

Price/Earnings

ratio)

is

an

important metric in assessing the health of a stock. A very low P/E means that the investors do not trust neither the company nor its stock. 7.
2008 Industry Beximco Square 18,86,72,42,850 10,45,02,02,145 8,41,70,40,705

The total book value of equity


2009 20,83,51,04,248 10,88,57,06,614 9,94,93,97,634 2010 Average

27,52,84,66,276 22410271124.67 15,97,40,86,451 12436665070.00 11,55,43,79,825 9973606054.67

8.
2008 Industry

The total book value of debt


2009 2010 Average

2,04,91,85,115 2,37,46,90,673 2,95,75,66,175 2460480654.33

Beximco 1,44,66,00,500 1,92,49,33,065 1,92,49,33,065 1765488876.67 Square 60,25,84,615 44,97,57,608 1,03,26,33,110 694991777.67

9.

The total book value of the company


2008 2009 2010 Average

Industry

20,91,64,27,965

23,20,97,94,921 30,48,60,32,451 12,81,06,39,679 17,89,90,19,516 10,39,91,55,242 12,58,70,12,935

24,87,07,51,779 14,20,21,53,947 10,66,85,97,832

Beximco 11,89,68,02,645 Square 9,01,96,25,320

10.

Market value of its (total interest bearing) debt


2008 Industry Beximco Square 7,12,57,13,013 3,87,72,63,097 3,56,92,80,445 2009 5,96,47,73,466 8,44,49,21,576 2,27,96,93,991 2010 Average

6,14,49,21,729 6411802736.00 8,67,35,96,661 6998593778.00 2,23,11,67,169 2693380535.00

11.
2008

Market value of equity.


2009 2010 Average

Industry Beximco Square

2,88,54,73,67,429 21,12,09,54,146 31,22,72,18,496

2,99,24,65,91,470 23,56,76,85,189 55,54,33,19,919

4,08,62,55,64,265 27,48,11,90,316 46,49,36,67,009

332139841054.66 24056609883.56 44421401808.00

12.
2008

Market/ Fair value


2009 2010 Average

Industry

2,95,67,30,80,442

3,05,21,13,64,936

4,14,77,04,85,994

338551643790.66

Beximco

24,99,82,17,243

32,01,26,06,765

36,15,47,86,977

31055203661.56

Square

34,79,64,98,941

57,82,30,13,910

48,72,48,34,178

47114782343.00

13.
2008 Industry Beximco Square

True Value
2009 2010 4,11,81,29,19,819 34,22,98,53,912 47,69,22,01,068 Average 3,36,09,11,63,136 29,28,97,14,785 46,41,97,90,565

2,93,62,38,95,327 3,02,83,66,74,263 23,55,16,16,743 34,19,39,14,326 30,08,76,73,700 57,37,32,56,302

14.

None of the price above is same. The book value is the

value at which an asset is carried on a balance sheet. It is also the initial outlay for an investment. This value is extremely misleading in some cases. This is because it states the amount that could have been put years ago and it does not take into account the time value or the current value of the firm. The market values are calculated using the current price of shares or debt. The fair value of the apartment will be same as the market value, if the market is efficient. The purchase value is same as the market value. The other values are completely different since they take other things into consideration. The true value of the firm is the market value minus the debt.