An assignment

on
Ratio analysis of ORION PHARMA LTD

1
 Managerial finance

Submitted By:-
Group
UDDIPON
Intake:-45
Section:-05
Program:-BBA

Submitted To:-
Md. Parvez Uddin
Assistant Professor
Chairman
Department of finance
Bangladesh University of Business and Technology

Date of submission: - 8th March 2020

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 Group
UDDIPON
Intake:-45
Section:-05
Program:-BBA

3
 Table of content

Serial Topics Page No.

No.
01. Company overview 08-10

02. Analysis

Current ratio 12

Quick Ratio 13

Inventory turnover 14

Average collection period 15

Total assets turnover 16

Debt ratio 17

Time interest earned ratio 18

Gross profit margin 19

Introduction
Operating profit margin 20

Net profit margin 21

Earnings per share 22

Return on total asset 23

Return on equity 24

03. Findings & Recommendation 26

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 Executive summary

The liquidity position of the firm is moderate similar as most of the industry. The firm is more
efficient in using its asset than most of the firm in the industry. The firm is taking more financial
risk. Roe of the firm is moderate like as industry average. This moderate Roe of the firm may be
caused by liquidity position, better utilization and high financial risk. The firm should be concern
about high financial risk.

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Company overview

6
ORION GROUP is one of the leading industrial conglomerates in Bangladesh over the years.
With the support of a highly skilled management structure and 18000 dedicated professionals,
ORION has achieved a degree of success that is unparalleled in the country’s business history.

ORION has assumed the leadership role with its operations in the Pharmaceuticals, Cosmetics &
Toiletries, Infrastructure Development, Real Estate & Construction, Power, High-tech Agro
Products, Hospitality, Textiles & Garments, Aviation Management sectors. Some of the units are
successfully listed in the Stock Exchange.

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 Corporate Information

Legal Form: Incorporated as a Private Limited Company on June 21,

1965; converted into a Public Limited Company on June

24, 2010 under the Companies Act, 1994

Listing Status: Listed with Dhaka Stock Exchange and Chittagong Stock

Exchange

Authorized Capital: BDT 5,000,000,000

Paid-up Capital: BDT 2,340,000,000

No. of Shareholders: 34,515

No. of Employees: 2,527

Registered Office: ORION HOUSE 153-154, Tejgaon Industrial Area,

Dhaka-1208, Bangladesh Tel: +88 02 8870133

Factory Address: Sumilpara, Siddhirganj Narayanganj, Bangladesh

Company E-mail: orion.share@orion-group.net

Company Website: www.orionpharmabd.com

Board of Directors: Mr. Mohammad Obaidul Karim

Mr. Salman Obaidul Karim

Mrs. Arzuda Karim

Mrs. Zareen Karim

Mrs. Hasina Begum

Mr. Md. Shafiqur Rahman Lt. Col. Kamal Ahmed

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Bankers: Agrani Bank Limited

Sonali Bank Limited

Rupali Bank Limited

National Bank Limited

Social Islami Bank Limited

Bank Asia Limited

Premier Bank Limited

City Bank Limited

AB Bank Limited

Insurers: Islami Commercial Insurance Co. Limited

Phoenix Insurance Company Limited

Green Delta Insurance Co. Limited

Subsidiaries: Orion Power Meghnaghat Limited

Dutch Bangla Power & Associates Limited

Analysis
 1) CURRENT RATIO:-

Particulars Year Year Year

2015-16 2016-17 2017-18
Current assets 5,800,753,696 6,054,170,090 6,795,570,490
Current liabilities 1,700,032,273 2,727,997,327 2,976,759,470
Ratio 3.41 2.23 2.82

Current Ratio

3.53.41

3 2.82

2.5
2.23

2
Ratio

1.5

0.5

0
2015-16 2016-17 2017-18
Year

Comment: The current ratio of the company decrease from 3.41 in 2016 to 2.23 in 2017,this
indicate that the capacity of the company to meet up short term obligation decrease over the year.
then increase from 2.23 in 2017 to 2.82 in 2018,the indicates that the capacity of the firm to meet
up short term obligation increase over the year.

2) QUICK RATIO:-

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 Particulars Year Year Year
2015-16 2016-17 2017-18
Current assets 5,800,753,696 6,054,170,090 6,795,570,490
Inventory 299,,950,084 274,461,441 271,925,189
Current liabilities 1,700,032,273 2,727,997,327 2,976,759,470
Ratio 3.24 0.12 2.19

Quick Ratio
3.5
3.24

2.5
2.19
2
Ratio

1.5

0.5
0.12
0
2015-16 2016-17 2017-18

Year

Comment: The quick ratio of the company decrease from 2.24 in 2016 to 2.19 in 2018.This
indicates that the capacity of the company to meet up short term obligation decrease over the
year.

3) INVENTORY TURNOVER:-

Particulars Year Year Year

2015-16 2016-17 2017-18

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 Cost of goods sold 1,088,516,230 885,154,503 873,436,617
Inventory 299,,950,084 274,461,441 271,925,189
Ratio 3.63 3.23 3.21

Inventory Turnover
3.7
3.63
3.6

3.5

3.4
Ratio

3.3
3.23
3.21
3.2

3.1

3
2015-16 2016-17 2017-18

Year

Comment: The inventor turnover of the company decrease over the years from 3.63 in 2016 to
3.21 in 2018.This indicates that the company has less investment over the year.

4) AVERAGE COLLECTION PERIOD:-

Particulars Year Year Year

2015-16 2016-17 2017-18
Account receivable 4,774,886,093 5,133,000,349 5,524,979,159
Annual sales 2,449,956,082 1,996,306,215 1,976,852,860

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 Days of the year 366 365 365
Collection period 713 days 938 days 1,020 days

ACP
1200

1020
1000 938

800
713

600
Days

400

200

0
2015-16 2016-17 2017-18

Year

Comment: The ACP of the company increase over the year from 713 days in 2016 to 1020 days
in 2018. This indicates that the firm less efficient in collecting account receivable.

5) TOTAL ASSET TURNOVER: -

Particulars Year Year Year

2015-16 2016-17 2017-18
Sales 2,449,956,082 1,996,306,215 1,976,852,860
Total assets 15,711,434,172 16,536,180,123 17,891,798,421
Ratio 0.16 0.12 0.09

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 Total asset turnover
0.18
0.16
0.16

0.14
0.12
0.12

0.1 0.09
Ratio

0.08

0.06

0.04

0.02

0
2015-16 2016-17 2017-18

Year

Comment: The total asset turnover of the company decrease over the year from 0.16 in 2016 to
0.09 in 2018.This indicates that the company less efficiency is using asset to generate sales.

6) DEBT RATIO: -

Particulars Year Year Year

2015-16 2016-17 2017-18
Total liabilities 25,197,608,03 3,769,331,252 5,293,099,014
Total assets 15,711,434,172 16,536,180,123 17,891,798,421
Ratio 0.16 0.23 0.29

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 Debt Ratio
0.35

0.3 0.29

0.25 0.23

0.2
Ratio

0.16
0.15

0.1

0.05

0
2015-16 2016-17 2017-18

Year

Comment The debt ratio of the company increased over the years from 0.16 in 2016 to 0.29 in
2018. These indicate that the company is taking more financial risk over the year.

7) TIMES INTEREST EARNED RATIO: -

Particulars Year Year Year

2015-16 2016-17 2017-18
EBIT 486,261,472 392,484,858 328,365,338
Interest expenses 221,472,787 207,311,402 235,528,600
Ratio 2.2 1.89 1.39

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 TIER
2.5
2.2

2 1.89

1.5 1.39
Ratio

0.5

0
2015-16 2016-17 2017-18

Year

Comment: Times interest earned ratio of the company decreased over the years from 2.2 in 2016
to 1.39 in 2018. These indicate that the company to meet up contractual interest expenses are low
over the year.

8) GROSS PROFIT MARGIN :-

Particulars Year Year Year

2015-16 2016-17 2017-18
Gross profit 1,088,516,230 1,111,151,712 1,103,416,243
Sales 2,449,956,082 1,996,306,215 1,976,852,860
Ratio 0.56 0.56 0.56

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 GPM
0.6
0.56 0.56 0.56

0.5

0.4

0.3
Ratio

0.2

0.1

0
2015-16 2016-17 2017-18

Year

Comment: Gross profit ratio of the company near close over the years 2016 to 2018 which is
0.56. These indicate that gross profit against sales earned close ratio over the years.

9) OPERATION PROFIT MARGIN :-

Particulars Year Year Year

2015-16 2016-17 2017-18
EBIT 486,261,472 392,484,858 328,365,338
Sales 2,449,956,082 1,996,306,215 1,976,852,860
Ratio 0.198 0.196 0.16

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 OPM
0.25

0.2 0.2
0.2

0.16
0.15
Ratio

0.1

0.05

0
2015-16 2016-17 2017-18

Year

Comment: Operation profit margin ratio of the company decreased over the years from 0.198 in
2016 to 0.16 in 2018. These indicate that EBIT against sales decreased over the years.

10) NET PROFIT MARGIN :-

Particulars Year Year Year

2015-16 2016-17 2017-18
EACS 410,228,977 75,718,631 168,778,801
Sales 2,449,956,082 1,996,306,215 1,976,852,860
Ratio 0.17 0.037 0.09

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 NPM
0.180.17

0.16

0.14

0.12

0.1 0.09
Ratio

0.08

0.06

0.04 0.04

0.02

0
2015-16 2016-17 2017-18

Year

Comment: Net profit margin ratio of the company decreased over the years from 0.17 in 2016 to
0.037 in 2017 than increased from 0.037 in 2017 to 0.09 in 2018 These indicate that EACS
against sales moderate over the years.

11) EARNING PER SHARE:-

Particulars Year Year Year

2015-16 2016-17 2017-18
EACS 410,228,977 75,718,631 168,778,801
No of share 234,000,000 234,000,000 234,000,000
Ratio 1.75 0.32 0.72

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 EPS
2
1.81.75
1.6
1.4
1.2
1
Ratio

0.8 0.72

0.6

0.4 0.32

0.2
0
2015-16 2016-17 2017-18

Year

Comment: Earning per ratio of the company decreased over the years from 1.75 in 2016 to 0.32
in 2017 than increased from 0.32 in 2017 to 0..72 in 2018 These indicate that EACS against No
of share near moderate over the years.

12) RETURN ON TOTAL ASSETS:-

Particulars Year Year Year

2015-16 2016-17 2017-18
EACS 410,228,977 75,718,631 168,778,801
Total asset 15,711,434,172 16,536,180,123 17,891,798,421
Ratio 0.026 4.58 9.43

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 RTA
10 9.43
9

5
Ratio

4.58

1
0.03
0
2015-16 2016-17 2017-18

Year

Comment: Return on total assets ratio of the company increased over the years from 0.026 in
2016 to 9.43 in 2018. These indicate that EACS against total assets increased over the years

13) RETURN ON EQUITY:-

Particulars Year Year Year

2015-16 2016-17 2017-18
EACS 410,228,977 75,718,631 168,778,801
Total common stock 13,191,673,369 12,766,848,872 12,598,699,406
Ratio 0.031 0.0056 0.013

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 Current Ratio
0.04
0.03
0.03

0.03

0.02
Ratio

0.02 0.01

0.01
0.01
0.01

0
2015-16 2016-17 2017-18

Year

Comment: Earning per ratio of the company decreased over the years from 0.031 in 2016 to
0.0056 in 2017 then increased from 0.0056 in 2017 to 0.013 in 2018 These indicate that EACS
against total common stock near moderate over the years.

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Findings and recommendation

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 Liquidity-The liquidity position of the firm is moderate similar as most of the industry.
 Using asset -The firm is more efficient in using its asset than most of the firm in the
industry.
 Financial position-The firm is taking more financial risk. Roe of the firm is moderate like
as industry average. This moderate Roe of the firm may be caused by liquidity position,
better utilization and high financial risk. The firm should be concern about high financial
risk.

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