Ratio Analysis of “ibnsina Pharmaceuticals”

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Executive Summary:

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IBN SINA is one of the most popular and leading pharmaceuticals company. They run their business long time ago and still now they are operating their business successfully. IBN SINA is a private limited company but it is not like other private limited company in case of generating profit. Making profit is the main target off an organization but their goal is to generate profit through customer satisfaction and customer ability. That’s the reason they are one of the leading pharmaceuticals company in Bangladesh.

Each individual organization’s now focusing on their financial status to let people know about their condition and market situation. The ratio analysis is the simplest way to see the real picture of an organization’s assets, liabilities and owner’s equity. It also been helped the organizations to know their receivables and payables condition and adjust their receiving and payment period. Inventory which we consider to be an important matter can be controlled better by analyzing its condition. Fixed assets along with total assets management can be done accurately by analyzing their ratio. Profits are managed by Net profit margin, ROA and ROE. Market value is also another essential that also can be analyzed by ratio analysis.

The liquidity condition of IBN SINA is not good enough. There is a consistency in growth in both current ratio and quick ratio but in 2014 both two ratio fall down. The current ratio of IBN SINA is improved from 2010 to 2013 that means the company had more liquidity to pay its short term liabilities but last year this ratio decreases. The condition of company asset management is also not in good position. Inventory turnover ratio condition of IBN SINA is not good because the company can't sell their product properly. To improve the situation they want to manage the selling. IBN SINA couldn’t manage their days sales outstanding, total asset turnover and fixed asset turnover efficiently. Debt to total asset ratio was increasing by 1.64% in 2013 and 4.59% in 2014.They should concern about using equity rather than debt and utilize their debt where they can earn profit. The profitability ratio of IBN SINA was increasing year to year all profit margin ratio increased significantly. That is good sign for IBN SINA pharmaceutical Ltd. Price/Earnings is decreasing year to year significantly.

After calculate the ratio of the company we show all the ratio graphically and we use bar chart and also we include appendix that makes the report clear and easily understanding.

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1.0 Introduction:

1.1 Origin of the Project:

This report work has been provided to us to gain experience outside the world through analyzing the real world organization data. We are really very lucky to have such research work and also an organization. It is a usual work for the students of FIN 201 (Business Finance) students. To be proficient on the course the theoretical lessons that we learned have to be implemented on a field through research & analysis. We got the opportunity to perform our work on IBN SINA Pharmaceuticals ltd. and understand the scenario of assets, liabilities and owner’s equity by doing ratio analysis.

1.2 Objectives of the Project:

- Primary Objectives:

- The primary objective of the project is to have a real world experience, to cope with flexible environment and analyze the real organizations financial information and understand financial situation through ratio analysis.

- Auxiliary:

- The financial ratio analysis practice on IBN SINA Pharmaceuticals ltd to see what is the present condition of their financial stability also affordability.

- The evaluation of all the specific analysis from liquidity ratios to market value ratios and finding what is really good or bad going on there.

- Discussion and IBN SINA Pharmaceuticals ltd analysis of the ratios and proper interpretation.

- The recommendation part to improve the organization in the competitive market.

1.3 Rationale of the Study:

For every work done in this world, there is some certain reason behind everything that actually proves how important the work is. The study that we did on IBN SINA Pharmaceuticals ltd which is mostly focusing on the financial information is also an important work that we did in this course.

If we want to talk in short and say that, the main reason which is behind this study is to learn the financial condition of IBN SINA Pharmaceuticals ltd. from 2010 to 2014.As a student we need to know how organization really works and getting out from the abstract theoretical knowledge. Not only working on those data’s, we need to know how we can interpret the situation by looking at the financial data. Again beyond interpretation some real solution tactics also need to be learned.

So in the end, we believe that the real reason which is actually working beyond the whole activity is to learn and gain practical knowledge.

1.4 Methodology:

Methodology refers to the essential part of the study and the process of collecting information and arranging it in terms of the relevant issues of the study. It is designed in a way so that it correspondent to achieve the objectives of the study. The report is Analytical by nature. The report is based on information collected from secondary sources.

- Sources:

- Gathered financial data from DSE about IBN SINA Pharmaceuticals ltd

- Annual reports.

- Organizations website.

- Academic books.

- Internet search.

- Historical information.

1.5 Limitations:

During the study we faced some obstacle