Assignment on Beximco 2nd part
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Beximco Pharmaceuticals Ltd. is the largest pharmaceutical company in Bangladesh. It was established in 1976 and began operations in 1980 by manufacturing and marketing imported drugs under licensing agreements. In 1983, Beximco began producing its own formulations and launched exports in 1992. Today, Beximco manufactures over 500 generic drug products and has over 2,700 employees. It has received several national awards for export excellence. The report analyzes Beximco's financial performance based on ratio analysis using data from its annual reports and interviews.
Assignment on Beximco 2nd part
- 1. 1 Introduction: Beximco Group is supposed to be Bangladesh’s largest private sector industrial enterprise. It has targeted the industries the country needs most for progress and improved living standards. Beximco is also focused on those industries, which make the most of Bangladesh’s competitive advantages in the international market. Through its ongoing growth, it has created industrial and management capabilities that will serve the country for generations. BEXIMCO’s industrial sector includes jute, textiles, basic chemicals and pharmaceuticals and marine foods. Non-industrial undertakings are focused on real estate and construction, engineering, media, information technology, trading and financial services. BEXIMCO Group is the largest private sector industrial conglomerate in Bangladesh engaged in diverse business areas. BEXIMCO comprises of five publicly listed companies and sixteen private companies. The Group turnover in 2014 was BDT 18.5 billion. BEXIMCO employs 35,000 people and has 230,000 shareholders. BEXIMCO’s shares constitute 4.84% of the market capitalization of DSE. 1.1 Backgroundof the study: The report is originated to make a study on the financial statement, Investment Decision, Financial Decision, Working Capital Management and Dividend Decision of Beximco Pharmaceuticals Limited. The study has been carried out with the following objectives: 1. To illustrate Function of corporate financial manager of Beximco Pharmaceuticals ltd. 2. To identify the different types of financial decision of corporate manager of Beximco Pharmaceuticals ltd. 3. To make some recommendations to overcome the problems. 1.2 Objective of the study In Bangladesh now different public ltd. organizations are operating there business. And every organization now involved attracting the retail customers that means the middle income group people of the country. To draw their attention the sells persons of different organization try to knock every possible door. These activities of different organization increase the interest about this sector. This report helps us to understand performance of a financial manager. 1.2.1 Broadobjective: By following on board question/objective the report is completed, to know overall about the company’s “Financial performance based on ratio analysis” of Beximco pharmaceuticals Ltd.
- 2. 2 The report is generated for knowing about the financial condition of the Beximco pharmaceuticals Ltd. To develop self-knowledge. To develop skill. To develop work experience. 1.2.2 Specific objective: To take Investment Decision. To take Financial Decision. To take dividend decision To manage working capital To get information about present condition of their finance To guess about their future financial condition 1.3 Methodologyof the study: The study uses both primary data and secondary data. The information of the report was collected from secondary sources like books, published reports and web site of the BFL. For general concept development about the BFL short interviews and discussion session were taken as primary source. 1.3.1 Sample Size: For any research sample size is the most important factor and this research is also not an exception. For analyzing this research we talk with two person of Beximco 1.3.2 Sample Design: A sample design is the framework, or road map, that serves as the basis for the selection of a survey sample and affects many other important aspects of a survey as well. In a broad context, survey researchers are interested in obtaining some type of information through a survey for some population, or universe, of interest. One must define a sampling frame that represents the population of interest, from which a sample is to be drawn. The sampling
- 3. 3 frame may be identical to the population, or it may be only part of it and is therefore subject to some under coverage, or it may have an indirect relationship to the population 1.3.3 Sourcesofdata collection: A Primary Sources: The data collectedfora purpose orwhenthe researcherinvestigatesa particularproblemathandis knownas primarydata. Sources of Primarydata: The necessarydata andinformationwasgatheredbyfollowingsources- Examiningdocuments Takingin-depthandface toface interviews Making observation B) Secondary sources. Whenan investigatorusesdata,whichhave alreadybeencollectedbyothersforanotherpurpose, such data iscalledsecondarydata. The majorparts of informationarecollected fromthe secondarysuch as: Annual reportof BPL. Office filesandDocuments. Studyrelatedbookanddifferenttextbooks. Website. Internal Sources: For my projectthe internal secondarysourcesof informationwasthe brochures,medical bookand annual reportof 2012, 2013 & 2014 of BeximcoPharmaceuticalsLtd.BesidesIhave alsotakensome otherunpublishedinformation fromthe staffsof MRC dept. External Sources: As an external secondarysource of informationIhave takendatafrom some otherreportsand unpublishedinformationwhichcollectedbypersonal contactof otherpharmaceuticalscompanies.
- 4. 4 Discussionwith ConcernedPerson: As studyrelatedcurrentdataare notavailable,Ihadto discusswithconcernpersonsforgettingup to data information. 1.3.4 Survey Instrument: Ms word,Ms Excel,Table,Questionnaire 1.4 Scope of the Study: There are lotof Publiclimitedfirminourcountry.Soit’sveryeasyfor me to selectone companyto start my research. Thisstudy will coverFinancial Manager’sActivitiesof BeximcoPharmaceuticals Ltd. Andit’sone of the largestPubliclimitedcompanyinourcountry. 1.5 Limitation ofthe study: There may some limitationsbehindthisReport.Theseare – There are lacksof sufficientprimaryandsecondaryinformationsource. Companywill notgive us the total informationasitisverysensitive issue,whichwasneededto explore the currentposition. There will be notenoughinformationonthe Internet. The probable cause of the mistake maybe because of the communicationgapbetweenthe interviewerandinterviewee due todifferencesinmymaturitylevel andunderstanding. The study hassufferedfromanumberof barriers- All the employeesare verybusywiththeirwork,Ihadto wait more than one hour fora piece of information. Time isalsoa bigconstraintfor myresearch.I have to submita broaderdeal ina shorterformof outcome.If I couldgetfewmore time to spendincollectingdataforpreparingmyreport Constrainof resources. Nonavailabilityof upto date data. Sufficientbooks,publications,facts&figureswere unavailable
- 5. 5 1.6 Gantt chart: Description of the project Time Week One Week Two Week Three 1.Assigning the report 2.Data Collection 3.Data analysis 4.Report Submission
- 6. 6 Chapter-2 Organization Profile: Beximco Pharmaceuticals Ltd. (BPL): Beximco Pharmaceuticals Ltd. (BPL) is a member of the Beximco Group – the largest private sector business conglomerate of Bangladesh. Beximco Pharma, the largest pharmaceutical as well as bulk drug manufacturer of Bangladesh started its journey back in 1980 with manufacturing and marketing of licensee products of Bayer AG, Germany and Upjohn Inc. of USA. After its initial years of struggle, it broke ground with the launching of its own products (Aristovit-B Complex, Napa, Lactameal, Tycil etc.) in 1983. The journey continued and barrier after barrier were crossed, challenges were faced and overcome to transform BPL into what it is at present. It went for public issue of shares in 1985. The shares of the company are listed with the Dhaka and Chittagong Stock Exchanges of Bangladesh. Today, BPL holds 10.0% of share in the domestic market after competing with such Multinational Giants as Novartis, Hoechst, Rhone Poulenc Rorer, Glaxo SmithKline, Fisons etc. The total numbers of shareholders are 47,811 and the total numbers of employees are 1,328. BPL manufactures and markets a high quality and cost-effective range of about 80 formulations covering all major therapeutic groups. BPL is the first company to receive National Export Trophy (Gold) in 1994-1995, which was the very first year of introduction of such award by the government of Bangladesh. This is the highest national recognition for excellence in Export .Beximco Pharmaceuticals Ltd. Has also been awarded National Export Trophy (Gold) recently for two consecutive years 1998-1999 & 1999-2000.It is the only company to be the record 3 times winner of this award for its outstanding export performance. BPL has transformed its activities, culture, style and philosophy to meet the demands of the new millennium. Business diversifications that are strategically important for sustained growth are results of its vision of the future. A multi-million dollar pharmaceutical formulation plant which will be fully up to the USFDA standard is being built. On completion, this plant would be one of the most modern plants in this region. Several new bulk drug facilities are being developed to backward integrate their high volume products. BPL’s commitment to its customers is to always offer them the best both in product quality and services.
- 7. 7 Philosophy of BEXIMCO “We firmly believe that in the final analysis we are accountable to each of the constituents with whom we interact; namely, our customers, our employees, our suppliers, our shareholders, and fellow citizens”. Vision of BEXIMCO The vision of BEXIMCO reflects in the Chairman following statement (Groups Annual Report 2000). “If there is one characteristic that has typified the BEXIMCO approach it is Vision to be the best of our nature and human resources. A vision to establish our group and country as a respected and valued regional presence.” Missionof BEXIMCO “Each of our activities must benefit and add value to the common wealth of our society. We firmly believe that, in the final analysis we are accountable to each of the constituents with whom we interact; namely; our employee, our customer, our business associates, our fellow citizens and our shareholders.” Board of Directors A S F RAHMAN CHAIRMAN & MANAGING DIRECTOR SALMAN F RAHMAN VICE CHAIRMAN IQBAL AHMED DIRECTOR (NOMINATED BY NEW DACCA INDUSTRIES LTD.) M A QASEM DIRECTOR (NOMINATED BY NEW DACCA INDUSTRIES LTD.) O K CHOWDHURY DIRECTOR (NOMINATED BY BEXIMCO HOLDINGS LTD.)
- 8. 8 A B SIDDIQUR RAHMAN DIRECTOR (NOMINATED BY NEW DACCA INDUSTRIES LTD.) MD. ALAUDDIN KHAN DIRECTOR (NOMINATED BY INVESTMENT CORPORATION OF BANGLADESH) 2.1 Historical background of Beximco Pharmaceuticals Ltd: Beximco Pharmaceuticals Ltd. belongs to Beximco Group, the largest private sector business conglomerate in Bangladesh. Bangladesh Export Import Company (BEXIMCO). The company was incorporated in 1976 and commenced operations in 1980 with the manufacturing and marketing, importing products from global MNCs like Bayer AG, Germany and Upjohn Inc., USA under licensing arrangements. In 1983, the company started manufacturing its own formulations and it launched export operation in 1992. In 1985 BPL was listed in Dhaka Stock Exchange (DSE) as a Public Limited Company. While the very beginning, the company was highly successful in generating increased demand for its products which eventually justified local production. Since then, the journey continued, and today, Beximco pharma is a leading manufacturer and exporter of pharmaceuticals in the country, winning National Export Trophy (Gold) a record four times. Beximco Pharma’s manufacturer facilities have been attributed by major global regulatory bodies, and it has expended its geographic footprint across four continents. As a public limited company, its shares are actively traded in Dhaka Stock Exchange and Chittagong Stock Exchange, and Beximco Pharma has the unique distinction of being the only company in the country listed on AIM of London Stock Exchange. Today Beximco Pharma manufactures and markets its own branded generics for several diseases including AIDS, cancer, asthma, hypertension, and diabetes for both national and international markets, having a broad portfolio of more than 500 products and a dedicated team of around 2,700 employees. It manufactures a range of dosage forms including tablets, capsules, dry syrup, powder, cream, ointment, suppositories, large volume intravenous fluids, metered dose inhalers etc. in several world-class manufacturing plants, ensuring high quality standards complying with the World Health Organization (WHO) approved current Good Manufacturing Practices (cGMP). Beximco also contract manufactures for major international brands of leading multinational companies. Beximco has a strong market focus and is anticipating continued future growth by leveraging business capabilities and developing superior product brands and markets. In particular it is very
- 9. 9 interested in developing a strong export market in USA and Europe. To meet the future in 2015 demand it has invested over US 150 million dollar to build a new state-of-the-art manufacturing plant, confirming to USFDA and UK MHRA standards. Shares of Top Ten Pharma Companies: Ten companies are occupying more than 60 % of market share, where there are more than 250 (registered and unregistered) companies in Bangladesh Pharmaceutical Market. Out of these top ten pharmaceutical companies in Bangladesh, eight are local companies, while only two are multinational companies (MNCs). The top two domestic manufacturers, namely Square and Beximco Pharmaceuticals are having a combined market share of about 25% of the total pharmaceutical market of the country. Pharmaceutical Companies Market Share in Terms of Sales Square Pharmaceutical Ltd. 17.46% Beximco Pharmaceuticals Ltd 9.93% Incepta 8.03% Acme 7.09% Opsonin 5.23% SK+F 5.44% ACI 5.44% Aristo Pharma 5.70% Orion 3.42% Drug International 3.78% Other 28.52% Top Ten Pharmaceutical Companies in Bangladesh
- 10. 10 2.2 Present sister concerns of the company: Industry Verticals Textiles Pharmaceuticals Ceramics Trading CT Hospitality Financial Services Energy Public Listed C Bangladesh Export Import Co. Ltd. Beximco Pharmaceuticals Limited Shinepukur Ceramics Limited Beximco Synthetics Limited Products of BPL: Blockbuster Products of BPL Napa Highest selling drug in Bangladesh Pharmaceutical Market in terms of unit. Neoceptin-R Highest selling drug in Bangladesh Pharmaceutical Market in terms of value. Bextrum / Bextrum Gold Emerged as the most admired & highest selling nutritional supplement in Bangladesh Pharmaceutical Market in just one year.
- 11. 11 Demandable Products of BPL Products Therapeutic class Napa Paracetamol Amdocal Angina & ischaemic Tycil Antibacterial Arixon Antibacterial Intracef Antibacterial Neoflox Antibacterial Atrizin Antibacterial Pedemin Antibacterial Filmet Antiprotozol Neoceptin-R Antiulcerant Bronkolas Bronchodilator Neosten Skin Aristovit-M Vitamin Hi- Tech Products of BPL Inhalation Aerosol Suppository Nasal spray Aeronid inhaler Napa 125 suppository Nazolin Nasal spray Azmasol Inhaler Napa 250 suppository Decomit Nasal spray Amdocal Highest selling cardiovascular drug in Bangladesh Pharmaceutical Market in terms of value. Tofen Highest selling oral anti-asthma drug in Bangladesh Pharmaceutical Market in terms of value. Azmasol Highest selling Metered Dose Inhaler brand in Bangladesh Pharmaceutical Market in terms of value.
- 12. 12 Azmasol Refill can Napa 500 suppository Bexitrol Inhaler Ultrafen 12.5 suppository Decomit 100 Inhaler Ultrafen 50 suppository Decomit 200 Inhaler Ipramid Inhaler 2.3 Financial Performance Analysis of Beximco Pharmaceuticals Limited: A financial statement (or financial report) is a formal record of the financial activities of a business, person, or other entity. In British English—including United Kingdom company law—a financial statement is often referred to as an account, although the term financial statement is also used, particularly by accountants. For a business enterprise, all the relevant financial information, presented in a structured manner and in a form easy to understand, are called the financial statements. They typically include four basic financial statements, accompanied by a management discussion and analysis: 1. Statement of Financial Position: also referred to as a balance sheet, reports on a company’s assets, liabilities, and ownership equity at a given point in time. This financial statement provides information about the nature and amounts of investments in enterprise resources, obligations to creditors, and the owners’ equity in net resources. 2. Statement ofComprehensive Income: also referred to as Profit and Loss statement (or a “P&L”), reports on a company’s income, expenses, and profits over a period of time. A Profit & Loss statement provides information on the operation of the enterprise. These include sale and the various expenses incurred during the processing state. The income statement, often called the statement of income or statement of earnings. The business and investment community uses this report to determine profitability, investment value and credit worthiness. It provides investors and creditors with information that helps them predict the amounts, timing, and uncertainty of future cash flows. 3. Statement of Changes in Equity: explains the changes of the company’s equity throughout the reporting period. Its related transaction with the shareholders, profit of the year. 4. Statement of cash flows: reports on a company’s cash flow activities, particularly its operating, investing, cash receipts, cash payments, and net change in cash resulting from operating, investing, and financing activities of an enterprise during a period, in a format that reconciles the beginning and ending cash balances.
- 13. 13 Balance Sheet As At 31st December 2014 SHAREHOLDERS’ EQUITY & LIABILITIES Shareholders’ Equity 2.4 Overall performance: HRD is the innovative impression now days for an organization. HRD obviously deals with the working people. It works to develop employee’s behavior, personal skills, abilities organizational and individual goals and encouraging People to be productive and satisfied employee. Some of the companies in Bangladesh doing HR activities smoothly, Beximco Group is one of them. Beximco Group is a big organization having 8 divisions all over the country covering all the important locations. Beximco Pharmaceutical Ltd which is under Beximco Group has almost 3000 employees. 2014 Tk. Change % 2013 Tk. Change % ASSETS Non – Current Assets 15,884,877,780 69 15,180,731,678 71.03 Property, Plant And Equipments – Carrying Value 15,745,492,625 68.3 15,123,306,298 70.76 Intangible Assets 135,933,879 0.06 51,126,854 0.24 Investment In Share 3,451,276 0.01 6,298,526 0.03 Current Assets 7,148,462,753 31 6,191,667,831 28.97 Inventories 2,291,844,631 9.95 1,983,809,444 9.28 Spares & Supplies 325,881,244 1.41 276,520,188 1.30 Accounts Receivable 978,224,317 4.24 821,356,439 3.84 Loans, Advance & Deposits 840,320,705 3.64 779,129,620 3.65 Short Term Investment 2,193,423,560 9.52 859,403,704 4.02 Cash & Cash Equivalent 518,768,296 2.24 1,471,448,436 6.88 TOTAL ASSETS 23,033,340,533 100.0 21,372,399,509 100
- 14. 14 HR activities are necessary for BPL, as a pharmaceutical organization- BPL deals with the different employees with the various departments, and many people working there. That’s why successful implementation of HR activities is very much needed. The objective on HRD are- The organization has right number and kinds of people. Effectiveness of procedure for recruiting, placement, career planning, training and development, and promoting all level of employee. Appropriateness of reward system for motivating and changing employee. A work environment that minimize absenteeism and keep turnover at a desirable level. Implications for the future demand of HR. Beside these activities HRD also conducts some other important tasks which are given below: HRD performs administrative function (maintenance and protocol services). HRD can take legal action for misconduct (theft, fraud, dishonesty, habitual late attendance, habitual negligence or neglect to work) of employee. Major Functions of HRD in BPL: BPL new accomplishes their HR functions splendid way. The major functions are briefly stated below- 5.4.1 Acquisition: BPL management clearly exquisites right number of people at the right placement in the right times. So that, the people will be able to complete their tasks in the most effective and efficient manner. 5.4.2 Development: BPL must ensure employees job involvement by providing various types of training and development programs, internal and external workshop, seminars, conferences, etc. the recent days job become more dynamic so that employees should be proper skilled match with the present environment. BPL arranges the development programs for fulfillment of top level vacancy. 5.4.3 Motivation: BPL wants to create motivation by improving personal skills and abilities, compensates people by fulfillment of their needs. The employees may be self motivated by taking BPL’s social welfare activities. 5.4.4 Maintenances: BPL ensures employee’s job assurance, providing various types of benefits, and also wants to retain experience personnel in a proper way.
- 15. 15 Cost of Production: In Beximco Pharma, they use normal historical costing for determining cost of production. Also in some cases they use the standard costing method. They have standard cost sheet for every components of the manufacturing cost. They also use standard cost sheet for proper control and measure their performance. They also calculate variance from standard and actual. For doing the costing early they use predetermined factory overhead. For using normal historical costing systems they determine the over applied or under applied factory overhead and dispose this over applied or under applied factory overhead through cost of goods sold statement. They also do the variance analysis. They generally does the Spending variance and Idle capacity variance. They compare their budgeted and actual amount for calculation of spending variance Inventory valuation methods and Beximco Pharma’s Practices: The major inventory valuation methods are discussed as follows: The Direct or Variable Method In the direct (or variable) method, only the variable manufacturing costs are capitalized, or charged to the inventory. The Full Absorption Method Full absorption costing (also referred to as full costing and absorption costing) is a traditional method where all manufacturing costs are capitalized in the inventory, i.e., charged to the inventory and become assets. The Activity Based Method Activity based costing is a relatively new type of procedure that can be used as an inventory valuation method. The technique was developed to provide more accurate product costs. This improved accuracy is accomplished by tracing costs to products through activities. In other words, costs are traced to activities (activity costing) and then these costs are traced, in a second stage, to the products that use the activities. The Throughput Method The throughput method was developed to complement a concept referred to as the theory of constraints. In this method only direct material costs are charged to the inventory. All other costs are expensed during the period
- 16. 16 Chapter 3 Work Responsibility of team members: Sl No Name Work Responsibility 01 S.M. Al-Shahriar Prepare Findings and analysis part, assign group members with different part of report and editing total report 02 Md. Momin Mia Collect all necessary information from secondary sources 03 Amit Hasan Prince Prepare Introduction Conclusion and Recommendation part 04 Subha Saha Prepare Title fly to Executive Summery
- 17. 17 Chapter 4 Findings and Analysis 4.1 Investment decisions offinancial manager The most important decision. It begins with the firm determining the total amount of assets needed to be held by the firm. There are 2 types of investment decision: a) Capital Investment Decision – Involves large sums of money. The impact is critical. Examples acquire a new machine or to set up a new plant. b) b) Working Capital Investment Decision – a more routine or schedule form of decision. Examples are determination of the amount of inventories, cash and account receivables to hold within a certain period. 4.1.1 Investment rules CAPM operations and investment activities are regulated by following rules and regulation: Bangladesh Securities and Exchange Commission (Mutual Fund) Rules, 2001 Guidelines on Prevention of Money Laundering & Combating Financing of Terrorism for capital market intermediaries. The income Tax ordinance, 1984 The trust ACT, 1882 (ACT No.11 of 1882) The stamp ACT, 1899 (ACT No.11 of 1899) Amendment of Securities and Exchange Commission (Merchant Bank and Portfolio Manager) Rules, 2006.
- 18. 18 4.1.2 Decisioncriteria An investment decision revolves around spending capital on assets that will yield the highest return for the company over a desired time period. In other words, the decision is about what to buy so that the company will gain the most value. To do so, the company needs to find a balance between its short-term and long-term goals. In the very short-term, a company needs money to pay its bills, but keeping all of its cash means that it isn't investing in things that will help it grow in the future. On the other end of the spectrum is a purely long-term view. A company that invests all of its money will maximize its long-term growth prospects, but if it doesn't hold enough cash, it can't pay its bills and will go out of business soon. Companies thus need to find the right mix between long-term and short-term investment. The investment decision also concerns what specific investments to make. Since there is no guarantee of a return for most investments, the finance department must determine an expected return. This return is not guaranteed, but is the average return on an investment if it were to be made many times. The investments must meet three main criteria: It must maximize the value of the firm, after considering the amount of risk the company is comfortable with (risk aversion). It must be financed appropriately If there is no investment opportunity the cash must be returned to shareholder in order to maximize shareholder value. 4.2 Financing Decision The important decision which finance manager has to take is deciding source of finance. A company can raise finance from various sources such as by issue of shares, debentures or by taking loan and advances. Deciding how much to raise from which source is concern of financing decision. 4.2.1. SourcesofFund Mainly sources of finance can be divided into two categories: 1. Owners fund. 2. Borrowed fund. Share capital and retained earnings constitute owners’ fund and debentures, loans, bonds, etc. constitute borrowed fund.
- 19. 19 The main concern of finance manager is to decide how much to raise from owners’ fund and how much to raise from borrowed fund. While taking this decision the finance manager compares the advantages and disadvantages of different sources of finance. The borrowed funds have to be paid back and involve some degree of risk whereas in owners’ fund there is no fix commitment of repayment and there is no risk involved. But finance manager prefers a mix of both types. Under financing decision finance manager fixes a ratio of owner fund and borrowed fund in the capital structure of the company. 4.2.2 Priority of specific sources While taking financing decisions and give priority of specific sources BFL’s finance manager keeps in mind the following factors 1. Cost 2. Risk 3. Cash Flow Position 4. Control Considerations 5. Floatation Cost 6. Fixed Operating Cost 7. State of Capital Market 4.3 Working Capital ManagementDecision Management will normally use a combination of policies and techniques for the management of working capital. These policies aim at managing the current assets (generally cash and cash equivalents, inventories and debtors) and the short term financing, such that cash flows and returns are acceptable. 4.3.1 Cashconversion cycle: The cash conversion cycle is a cash flow calculation that attempts to measure the time it takes a company to convert its investment in inventory and other resource inputs into cash. 4.3.2. CashManagement: The average Collection Period indicates the firm’s efficiency, in the collecting on its sales. It may also reflect the firm’s credit. If customer take more time to pay, then the collection
- 20. 20 period will generally be greater. A long collection period is not necessarily bad, since a stringent credit policy regarding customers its pay faster may lead to a reduction on sales. Average Collection Period = Accounts receivable / Average Credit Sales per Day Average Collection Period Ratio 41.84 50.01 44.90 51.33 The average collection period should lower which will better. From the above calculation we can see that the average collection period of BPL decreases 2009-20013 year. BPL credit sales collection period is not so bad. So it means BPL their credit should be collected. It shows the good firm efficiency. 4.3.3 Inventory Management: A low inventory turnover implies a large investment in inventories relative to the amount needed to services sales. The high inventories turnover shows that inventories are too small and it may be that the firm is constantly running short of inventory, thereby losing customers. We informed that the Inventory Turnover Ratio of BPL is decrease gradually from 2009- 2013 which is better for the firm. Because it does mean they prefer to storage their products for appropriate or limit times. So the activity or liquidity of BPL is satisfactory. And inventory turnover of BPL has the large investment in inventories relative to the amount needed to service sales. 4.3.4. Marketable securitiesmanagement Marketable securities are securities that can be easily liquidated without any delay at a reasonable price. It is the part of a company's short term investment. Firms will maintain levels of marketable securities to ensure that they are able to quickly replenish cash balances and to obtain higher returns than is possible by maintaining cash. 4.3.5. AccrualManagement Accrued revenue Accrued revenue (or accrued assets) is an asset, such as unpaid proceeds from a delivery of goods or services, when such income is earned and a related revenue item is recognized, while cash is to be received in a later period, when the amount is deducted from accrued revenues.
- 21. 21 Accrued expense Accrued expense is a liability whose timing or amount is uncertain by virtue of the fact that an invoice has not yet been received. The uncertainty of the accrued expense is not significant enough to qualify it as a provision. 4.4 Dividend Decision: We found that beximco provide both cash and stock dividend 4.5 Overall Findings: From the overall findings we can say BFL use all necessary techniques to maintain the firm financially fit. They easily use all financial derivatives to keep their financing efficiency.
- 22. 22 Chapter-5 Conclusion: In Bangladesh, Pharmaceutical sector is one of the most developed hi-tech sectors which are contributing in the country’s economy. Pharmaceutical sector is one of the fast growing and most developed scientific sector in Bangladesh. There are about 265 registered pharmaceutical companies operating in Bangladesh pharmaceutical industry. The market is highly competitive. BPL succeeded in gaining trust and confidence of the doctors and patients all over the country. Beximco Pharmaceuticals Ltd. is a leading edge pharmaceutical company and is a member of the BEXIMCO Group, the largest private sector industrial conglomerate in Bangladesh. Beximco Pharma is also the largest exporter of pharmaceuticals from Bangladesh, spreading its presence in many developing and developed countries across the globe. Recently, BPL has successfully made its footmark in the global market when it made its debut on the London Stock Exchange as the first Bangladeshi company to be listed in the world’s most prestigious bourse. This milestone event has widened the responsibility, accountability and transparency of the company beyond geographical border. This was an added challenge to all the accounting staffs as the listing the accountability of the organization has gained a global reach. The ever expanding export trade also indicates greater responsibility to the world. The Finance and Accounts department took the challenge and prove their mettle by the timely publication of 2011 Annual Financial Reports globally. Each and every section in the department deserves to be complemented for their endeavor. From raw material import to the bringing of smile for the society, on every level, professionalism and dedication is the key to this success. Beximco Pharma is the largest exporter of pharmaceuticals in the country and the only company to win National Export Trophy (Gold), the highest national accolade for export, for record Four times. The company is the largest producer of Metered Dose Inhalers (MDIs) in the country, and the first to produce CFC free inhalers. BPL is also the first company to produce anti-retroviral drugs (ARVs) locally. In this report, we have tried my level best to identify Financial analysis is helpful in assessing the financial position and profitability of a concern. This is done through comparison by ratios for the same concern over a period of years; or for one concern against another; or for one concern against the industry as a whole (called inter firm operation); or for one concern against the predetermined standards; or for one department of a concern against other departments of the same concern (called intra firm comparison). Accounting ratios calculated for a number of years show the trend of the change of
- 23. 23 position. The trend is upward or downward or static. The ascertainment of trend helps us in making estimates for the future. Thus we can say that there is lots of application of financial analysis in the modern days of business. To assess any business condition financial analysis gives a clear financial picture of any business organization. This helps to evaluate the trend and condition of organization. From small to big business organization financial analysis helps a great deal in decision- making process. As it helps to give idea about the financial condition, thus it helps in future financial projection and decision making process of any business house. If there is no doubt Beximco Pharma is a leading pharmaceutical company in Bangladeshi pharmaceutical industry, but there some lacking to Finance and Accounting department. Because there financial position not so much good compare their competitive leading company. In this situation they should be careful there costing sector. In today’s complex yet highly competitive business environment management needs quality information for decision making purpose. Beximco believes that quality and control should be ensured and these can be ensured by using proper cost accounting information. Relevant and reliable cost information can be ensured by implementing by using effective cost accounting methods. There unproductive assets should invest productive sector and minimize their liability. And they do the best one fit in the context of Bangladesh. I trust that Beximco Pharma go ahead day by day galaxy.
- 24. 24 Chapter-6 Recommendation of the Report: The overall performance of BPL shows a satisfactory position although they are suffering last few years. It is not easy to recommend some suggestion to enhance the performance level of the organization during two month practical experience in BPL. I have observed some shortcoming regarding operational and other aspects. On the basis of my observation I would like to present the following recommendations: Though BPL has qualified employee in Finance and Accounting department, but the organization should recruit some new employee to run this department smoothly. BPL should increase their equity capital in their capital structure, because debt capital is already higher. BPL should utilize their assets properly by investing them in more profitable projects as there liquidity is higher than actual need. They should increase dividend per share that will serve as a promotional tool. Contribution analysis for each of the product lines to optimize profit in light of demand factors. Effects to bring selling prices in line with costs having regard to competition and other market factors. They should minimize their financing expenses to make higher net profit. They should maximize the average collection period and average payable period. They should be careful about the market price of share, because the price of share would decrease in future. Standard set-up for staff and officers to minimize administrative overhead. Provision for the training of officers and employees in modern management techniques. Necessary measures to be taken for the prompt seminars, advertisement and promotional activities by the representatives. In the face of today’s global competition with open market operation, BPL must develop and retain the high achievers and motivated work force and equip them with the latest skills and technologies
- 25. 25 References and Appendix Booklets published by Beximco Pharmaceuticals Limited BeximcoPharmaceuticals Limited web site(www.beximcopharma.com/) Annual Report 2015 - Beximco Pharmaceuticals Limited Dhaka Stock Exchange (DSE) en.wikipedia.org/wiki/Beximco_Pharma Prospectus of Beximco Pharmaceuticals Limited www.google.com Bangladesh Pharmaceutical Society. Beximco Pharma's Profile on Pharma Mirror Magazine Peter S. Rose - Corporate Finance (Book) Jeff Madhura - international financial management (Book)