East West University

Jahurul Islam City Gate, A/2 Jahurul Islam Ave, Dhaka 1212

Term Paper on Performance Evaluation of Selected Companies.

Submitted To: Quazi Sagota Samina

Assistant Professor,
Department of Business Administration
East West University
Submitted By :

Name ID
Munshi Shamsur Rahman 2021-3-95-078
Ipshita Akter 2022-1-95-040
Joysree Sarkar 2022-1-95-016
Md. Shafiqul Islam 2022-1-91-029
ASM Tahsin Ahmed 2022-1-91-045

Course Title: Financial Management

Corse Code: FIN-501
Section-02
Semester- Summer-2023

Date of Submission: August 04,2023

Master of Business Administration

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 Table of Content
SL. No. Contents Page No.
1. Expectative Summary 03

2. Introduction 03-04

3. Ratio Analysis 04-05

4. Origin of the Report 05

5. Objective of the Study 05

6. Scope of the Study 05
7. Limitation of the Study 05
8. Overview of the Company 06-07
1. Sun Pharmaceutical Industries Limited
2. Ambee Pharmaceuticals Limited
3. Advent Pharmaceuticals Limited
9. Types of Ratio 07-08

10 Liquidity Ratio 08-11

1. Current Ratio
2. Quick Ratio
11 Asset Management Ratio 11-16
1. Inventory Turnover
2. Average Collection Period
3. Fixed Asset Turnover
4. Total Asset turnover
12 Debt Management Ratio 16-18
1. Debt Ratio
2. Time Interest Earned Ratio
13 Ratio of Profitability 18-21
1. Net Profit Margin
2. Return on Investment
3. Return on Equity
14 Market Value Percentage 22-23
1. Earnings per Share
2. Price Earnings Ratio
15 Conclusion 23

16 Reference 24

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 Executive summary
Ratio analysis is referred to as the study or analysis of the line items present in the financial statements of the company.
It can be used to check various factors of a business such as profitability, liquidity, solvency and efficiency of the
company or the business. In this term paper, we are going to present selected three public limited companies and all of
those belong to the pharmaceuticals industry. The comparative ratio analysis of Ambee Pharmaceuticals Ltd, Sun
Pharmaceuticals Ltd &Advent Pharmaceuticals Ltd revealed some insights about these companies. The analysis has
performed various financial ratios like profitability analysis, liquidity analysis, solvency analysis, efficiency analysis and
market value analysis. These ratios were calculated for the Year from 2018 to 2022 to determine the financial position &
performance of the companies.

However, all the companies had satisfactory solvency ratios, indicating that they were capable of handling long term
debt obligations. The comparison reveals that each company has its own strengths & weakness and no single company
can be declared the best.

In conclusion, the comparative ratio analysis showed that each company had its unique position in pharmacy industry.
The analysis provides insights for investors, analysis and other stakeholder to determine the financial health and
performance of the companies. This research can be further improved by incorporating another variable.

Introduction
The pharmaceutical industry in Bangladesh

The pharmaceutical industry in Bangladesh has been growing rapidly in recent years and has become an important
contributor to the country's economy. The industry has a long history in the country, with the first pharmaceutical
company established in 1958. In the 1980s and 1990s, the industry underwent significant growth, with several new
companies entering the market and existing companies expanding their operations.

The Bangladesh pharmaceutical industry is mainly concentrated in the urban areas, with Dhaka being the center of the
industry. The industry comprises over 300 pharmaceutical companies, with local companies dominating the market
share and with around 70% of them producing generic medicines. However, foreign companies have also invested in the
industry in recent years, attracted by the sector's growth prospects.

With the increase in income level, people in urban as well as rural areas have become more conscious about their health.
Meanwhile, as the country’s medical and pharmaceutical companies adopt modern technology, the people of the
country are paying close attention to proper nutrition, protein intake, healthy eating habits and avoiding other
pollutants. Besides, the average life expectancy of the people of Bangladesh has also increased. According to the
Bangladesh Bureau of Statistics, the average life expectancy of the people of Bangladesh was 66.4 years in 2002, which
increased to 72.6 years by 2020. Awareness of the people of Bangladesh and growth of the pharmaceutical sector has
played the biggest role behind such an increase in life expectancy.

The industry has been supported by the Bangladesh government's favorable policies, including tax exemptions and
investment incentives for local and foreign investors. Additionally, the industry has benefited from a large pool of skilled
labor and low manufacturing costs, making it competitive in both local and international markets.

The Bangladeshi pharmaceutical industry is highly regulated and is monitored by the country's regulatory authorities,
including the Directorate General of Drug Administration (DGDA). The DGDA is responsible for ensuring the quality,
safety, and efficacy of pharmaceutical products in the country.
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In recent years, the Bangladeshi pharmaceutical industry has focused on expanding its export markets and has been
successful in gaining market share in several countries, including Myanmar, Nepal, Bhutan, and Sri Lanka. The industry is
also looking to expand its presence in other markets, including Africa, the Middle East, and Europe. The industry exports
active pharmaceutical ingredients (APIs) and a wide range of pharmaceutical products, covering all major therapeutic
classes and dosage forms, to 79 countries. Along with regular forms like tablets, capsules and syrups, Bangladesh also
exports specialized products like HFA inhalers, CFC inhalers, suppositories, nasal sprays, injectables, IV infusions, etc.
These products have been well accepted by medical practitioners, chemists, patients and the regulatory bodies of all of
their importing nations. The packaging and the presentation of the products of Bangladesh are comparable to any
international standard.

Despite its success, the Bangladeshi pharmaceutical industry faces several challenges, including inadequate investment
in research and development, a shortage of skilled professionals, and a lack of access to funding. Nevertheless, the
industry is expected to continue growing in the coming years, driven by growing demand for affordable and high-quality
medicines both domestically and globally.

So, the pharmaceutical industry in Bangladesh has been experiencing significant growth over the past few decades. It is
one of the fastest-growing sectors in the country, contributing to the country's economic development and improving
the healthcare system.

Ratio analysis
Ratio analysis refers to the analysis of various pieces of financial information in the financial statements of a company.
They are mostly used by external parties or stakeholders to evaluate various parts of a company, such as its profitability,
activity, liquidity, and solvency. Financial analysts count on the recent and past financial statements as a source of
obtaining data to evaluate the financial performance of a company.

Uses of Ratio Analysis

1. Comparisons
One of the uses of ratio analysis is to compare a company’s financial performance to similar firms in the industry to
understand the company’s position in the market. Obtaining financial ratios, such as Price/Earnings, from known
competitors and comparing it to the company’s ratios can help management identify market gaps and examine its
competitive advantages, strengths, and weaknesses. The management can then use the information to formulate
decisions that aim to improve the company’s position in the market.

2. Trend line
Companies can also use ratios to see if there is a trend in financial performance. Established companies collect data from
the financial statements over a large number of reporting periods. The trend obtained can be used to predict the
direction of future financial performance, and also identify any expected financial turbulence that would not be possible
to predict using ratios for a single reporting period.

3. Operational efficiency

The management of a company can also use financial ratio analysis to determine the degree of efficiency in the
management of assets and liabilities. Inefficient use of assets such as motor vehicles, land, and building results in
unnecessary expenses that ought to be eliminated. ratios can also help to determine if the financial resources are over-
or under-utilized. In this term paper, we are going to present the liquidity analysis, Profitability analysis, activity analysis,
leverage analysis, and market value analysis of selected three public limited companies and all of those belong to the

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pharmaceuticals industry. We have selected Ambee Pharmaceuticals Ltd, Sun Pharmaceuticals Ltd &Advent
Pharmaceuticals Ltd for this report.

Origin of the Report

This report was given to us as a part of one of the requirements of the “Financial Management” course of Master of
Business Administration program of East West University. Our course instructor QuaziSagota Samina, has assigned us
this report as a part of the course.

Objective of the Study

As per our course we have learned about different types of ratios throughout the semester. We have collected data from
the websites of Ambee Pharmaceuticals Ltd, Sun Pharmaceuticals Ltd &Advent Pharmaceuticals Ltd. Now in this report
we are trying to portray their financial conditions.

● To compare the three companies according to the ratio and solvency

● To know how they effectively utilizing their asset or not
● To analyze efficiency of their liquid asset and inventory
● To know financial position of each of the company
● Last but not the least, to properly utilize our knowledge on ratio analysis what we learned

Scope of the Study

To conduct the report, the information has been collected from various sources. The report has been made from the
data of 2017-2018, 2018-2019, 2019-2020, 2020-2021 and 2021-2022 from annual reports of the three companies.

We’ve done this report based on some secondary sources of data such as the company's annual reports, through web
browsing; go through some journals, from the firm's website.

Limitation of the Study

To make a report various types of experience are needed. However, we faced some barriers for
making a complete and perfect report. These barriers or limitations, which hinder our work, are as
follows:

● Difficulty to gather data from the internal source

● Some information are missing
● Lack of data availability caused inappropriate result or ratios
● Time is not sufficient enough to cover up the all ratios and whole annual reports of the
organizations.

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 Overview of the Company
Sun Pharmaceutical Industries Limited
Sun Pharmaceutical Industries Ltd. (Sun Pharma) is the fourth largest specialty generic pharmaceutical company in the
world with global revenues of over US$ 5.1 billion. Supported by more than 40 manufacturing facilities, we provide high-
quality, affordable medicines, trusted by healthcare professionals and patients, to more than 100 countries across the
globe. Sun Pharmaceutical (Bangladesh) Limited began commercial operations in Bangladesh in the year of 2004 and is
currently operating out of its office at Gulshan, Dhaka. Today, Sun Pharma Bangladesh is ranked among the top 20
companies in the country. The company has been enjoying leadership status among various therapeutic segments and
brands.

Sun Pharma Bangladesh also owns and operates a modern factory site, spread over 25,000 sq. ft. located at Joydebpur,
Gazipur and manufactures products exclusively catering to the local Bangladesh market. The plant currently produces
some of the leading brands in the country in the segments of Cardiology, Diabetology, Neurology, Psychiatry,
Gastroenterology etc. Sun Pharma Bangladesh has secured recognition in the market through innovative marketing
strategies and scientific product promotion throughout its presence of over 15 years. The company’s strong support to
the community in disseminating the latest advances in medicine, has gained loyalty from the doctors in the field of
Psychiatry, Neurology, Cardiology, Diabetology & Gastroenterology.With the vision of Reaching people, touching lives for
all, Sun Pharma Bangladesh manufactures products of the highest quality at affordable prices and reaches out even to
the remotest areas of the country through a well-entrenched distribution services network. View themselves as partners
with the doctors, customers, employees and with the environment.

They produce a comprehensive, diverse and highly complementary portfolio of generic and specialty medicines targeting
a wide spectrum of chronic and acute treatments. Their product portfolio includes generics, branded generics, specialty,
difficult-to-make technology intensive products, over-the-counter (OTC), antiretroviral (ARVs), Active Pharmaceutical
Ingredients (APIs) and intermediates. Their presence in more than 100 countries helps us in being responsive to local
treatment needs while continually improving global product offering.

Ambee Pharmaceuticals Limited

AMBEE PHARMACEUTICALS LTD., a fast-growing company was established in 1976 in Bangladesh. This public limited
company was registered under the companies Act, 1913 and was incorporated in Bangladesh on 4th February 1976.
Ambee has a joint venture with a famous multinational company Medimpex of Hungary. Ambee started its operation
with modest 17 joint ventured products and is now running in full swing with 76 products.

In 2001 Ambee Pharmaceuticals Ltd. became ISO 9001 certified company. ISO 9001 certificate is the international
recognition of the quality management system of this organization that complies with the standard of ISO 9001 system.
This certificate was awarded by United Registrar of Systems Ltd.(URS) of UK. In Bangladesh among 250 pharmaceutical
companies only few have become ISO 9001 certified and Ambee is one of them.

Ambee's aim is to achieve business excellence through quality by satisfying customer expectations. They follow Quality
Management System to ensure consistent quality of products. They also meet all National Regulatory Requirements in
our business affair and follow Good Manufacturing Practices (GMP) as recommended by World Health Organization
(WHO) for its pharmaceutical operations.

The management of Ambee Pharmaceuticals Limited is dedicated to its commitment of quality and all employees of the
organization follow documented procedures to ensure quality standards. Their strength lies in our fully dedicated and
quality team of professionals. The Human Resources of the company are our assets and they are regularly trained for the
continuous improvement of work methods.

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Advent pharmaceuticals Limited
Advent Pharma Limited is a front ranking exclusively dedicated manufacturer of Animal Health Care Products in
Bangladesh. The company is dedicated to providing the best quality health care options for commercial animal producers
by utilizing cutting edge machinery in developing a wide variety of health products to meet the growing demands of the
fledgling sector.

As a company, Advent Pharma is committed to guaranteeing high customer satisfaction and to consolidate itself as one
of the trusted names in the Animal Health Care industry. Advent Pharma Ltd began its journey in 2007 and since then
has been a pioneering presence in the industry due to the sophisticated machinery being employed by the company. The
company and all its members believe that quality health care solutions for the veterinary sector should be a prerequisite
in order to sustain and grow the economy at both local and national levels.

To this end, Advent Pharma continues to uphold its values of high-quality products and exception quality assurance with
a wide variety of products. This has led to Advent Pharma Ltd fast becoming a trusted name in the sector.

Types of Ratios
Liquidity Ratios: Liquidity ratios assess a company’s ability to pay off its short-term obligations as they come due,
using the company’s current or short-term resources. In this section, we discussed the current and quick ratios.

1. Current Ratio: The Current Ratio (CR) is a liquidity ratio that measures a company’s ability to pay short-term
obligations or those due within one year. It tells investors and analysts how a company can maximize the current
assets on its balance sheet to satisfy its current debt and other payables.
2. Quick Ratio: The quick ratio is an indicator of a company’s short-term liquidity position and measures a
company’s ability to meet its short-term obligations with its most liquid assets.

Asset management ratios: Asset management ratios assess an asset’s ability to generate revenue or earnings.
Analysis of asset management ratios is important and useful because it allows us to understand the overall level of
efficiency with which a business operates. The inventory turnover ratio, average collection period, fixed assets turnover
ratio, and total asset turnover ratio have all been discussed

1. Inventory Turnover: Inventory Turnover Ratio measures how fast the company replaces a current batch of
inventories and transforms them into sales.
2. Average Collection Period: means from the day of sales how long it takes to receive cash. The less the
period is, the better it is for the company.
3. Fixed Asset Turnover: The fixed asset turnover ratio reveals how efficient a company is at generating sales
from its existing fixed assets. A higher ratio implies that management is using its fixed assets more effectively.
4. Total Asset Turnover: Total asset turnover indicates the efficiency with which the firm uses its assets to
generate sales.

Debt Management Ratios: The debt management ratio determines how much of a company’s operations are
funded by debt rather than other sources of capital, such as stock or personal savings. The debt management ratio is one
of many indicators of a company’s risks and likelihood of default. We’ve already discussed the debt ratio and the time
interest earned ratio.

1. Debt Ratio: The term debt ratio refers to a financial ratio that measures the extent of a company’s leverage.
The debt ratio is defined as the ratio of total debt to total assets, expressed as a decimal or percentage. It can be
interpreted as the proportion of a company’s assets that are financed by debt.

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 2. Time Interest Earned Ratio: The degree to which interest expense is offset by interest earnings, or Times
Interest Earned, demonstrates the protection afforded to creditors. The better it is for the company, the higher
the Times Interest Earned ratio. The debt to-equity ratio will be lower if it is higher.

Ratios of Profitability:A profitability ratio is a measure of profitability that is used to assess the performance of a
business. Profitability is simply the ability to make a profit, and a profit is what remains after deducting all costs and
expenses associated with earning the income. We’ve talked about the net profit margin, the return on total assets (ROA),
and the return on common equity (ROE).

1. Net Profit Margin: One set of profitability ratios is profit margin, which is measured as net income divided
by revenue or net profits divided by sales. Company’s net income or net profit can be calculated by deducting all
of its costs from its total revenue, including operating costs, material costs (including raw materials), and tax
costs. Profit margins, which are stated as a percentage, effectively calculate how much of each dollar of sales a
business retains in earnings.
2. Return on Total Asset (ROA): Return on Asset measures how effectively a company is turning a profit off
of all of its assets. Additionally, it demonstrates how well management makes use of its resources to produce
profit.
3. Return on Common Equity (ROE): The amount of net income that is distributed as a percentage of
shareholders’ equity is known as return on equity. Utilizing ROE, one may determine how profitable or profitable
a company is ownership equity.

Market Value Percentages: Market value ratios are used to assess the current stock price of a publicly traded
company. Current and prospective investors use these ratios to determine whether the shares of a company are
overpriced or underpriced. It also denotes the market’s reputation. We have already discussed the price earnings ratio
and earnings per share.

1. Price Earnings Ratio: The price-to-earnings ratio is the ratio for valuing a company that measures its
current share price relative to its earnings per share (EPS). It can also be used to compare a company against its
own historical record or to compare aggregate markets against one another or over time.

Importance of Ratio Analysis

 Helps in forecasting and planning by performing trend analysis.
 Helps in estimating budget for the firm by analyzing previous trends.
 It helps in determining how efficiently a firm or an organization is operating.
 It provides significant information to users of accounting information regarding the performance of the business.
 It helps in comparison of two or more firms.
 It helps in determining both liquidity and long-term solvency of the firm.

Liquidity ratios
1. Current Ratio
Current Ratio = Current Assets/Current Liabilities

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 Current Ratio (in times)
Company Name 2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Sun Pharma 5.36 4.93 8.71 6.24 4.63

Ambee Pharma 0.88 0.87 0.89 0.87 0.89

Advent Pharma Ltd 1.38 1.72 2.01 2.69 4.54

Current Ratio

10
9
8
7
6
5
4
3
2
1
0
Sun Pharma Ambee Pharma Advent Pharma

2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Interpretation
Sun Pharma

It has too much liquidity than other companies in the industry. It has higher liquidity in 2019-2020 period. But it has been
reducing its liquidation over the period which can be reducing more to good position but still has much more liquidation
than other companies.

Ambee Pharmaceuticals Limited:

From 2017 to 2022, the CR value of the company was lower than 1 which indicates that the company never had enough
to pay its short-term obligations. The company has poor liquidity.

Advent Pharmaceuticals Ltd

In 2017-2018, Its Liquidity is high but day by day it decreases. At present its liquidity is 1.38 which is lower liquidity.

Comparison
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As rule of thumb for current ratio is 2:1 which means

Current ratio > 2: higher liquidity and lower profitability and

Current ratio < 2: lower liquidity and higher profitability

Sun pharmaceuticals have always higher liquidity comparing to others. It means they have current assets more than long
term assets. On the other hand,Ambee Pharmaceuticals has lower liquidity which is less than 2 and Advent
pharmaceuticals, in 2017-2020 has higher liquidity but at present its lower. It means they have (Ambee& Advent) more
long term asset to generate profit and less current assets to have liquidity comparing to Square.

2. Quick Ratio

Quick Ratio= (Current Assets-Inventories)/Current Liabilities

Quick Ratio
(in times)

Company 2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Name
Sun Pharma 3.36 4.16 6.70 4.36 3.14
Ambee Pharma 0.48 0.52 0.45 0.44 0.47
Advent 0.91 1.22 1.24 1.63 3.31
Pharma

Quick Ratio
8

0
Sun Pharma Ambee Pharma Advent Pharna

2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

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Interpretation
Sun Pharmaceuticals Limited

It has too much liquidity than other companies in the industry. It has higher liquidity in 2019-2020 period. But it has been
reducing its liquidation over the period which is less concerning but still has much more liquidation than other
companies.

Ambee Pharmaceuticals Limited:

The QR of this company was always less than 1 which indicates that the company has liquidity issues. In the long term
the company may not survive as it doesn’t have enough assets.

Advent Pharmaceuticals Limited

Its higher liquidity is in 2017-2018. But then day by its liquidity is decreasing.

Comparison
As rule of thumb is 1.2:1 Comparison which means here inventory will not be added but other materials will remain
same as per current ratio.

Currents ratio>1.2 higher liquidity and lower profitability

Current ration<1.2 lower liquidity and higher profitability

Sun pharmaceuticals has the higher liquidity than other companies that means its more currents assets than long term
assets. Even subtracting inventory sun pharmaceutical is more liquidity in industry.

Ambee Pharma has lower liquidity all time

Advent pharma liquidity decreasing day by day. In 2021,It maintain higher liquidity now now in 2022,its liquidity is lower.

Asset Management Ratio

1. Inventory Turnover
Inventory Turnover Ratio = Cost of Goods Sold/Inventories

Inventory Turnover Ratio (in times)

Company Name 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Sun Pharmaceutical 8.89 6.8 5.64 3.03 3.4

Industries Limited
Ambee Pharmaceuticals 1.09 1.07 0.85 0.46 0.57
Limited
Advent Pharmaceutical 1.1 1.27 1.36 1.45 3.45
Limited

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 Inventory Turnover Ratio
10
9
8
7
6
5
4
3
2
1
0
Sun Pharma Ambee Pharma Advent Pharma

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation

1. Sun Pharmaceutical Industries Limited

The company’s inventory turnover ratio is quite good which means the goods are sold faster. But over the years the ratio
kept decreasing which indicates that the sales were getting weak. They need to keep it up.

2. Ambee Pharmaceuticals Limited:

The company’s turnover ratio also fluctuated during 2019-2020 and it was lowest in 2020-2021. This low inventory
turnover ratio indicates overstocked products and weak sales of the company.

3. Advent Pharmaceuticals Limited

The company’s turnover ratio is increasing day by day. In 2022 its highest turnover ratio which is 3.45.

Comparison
Inventory turnover ratio indicates how a company use inventory repeatedly in production process in a year. The higher
the ratio the better efficiency a company can have.

Ambee Pharmaceuticals have lowest inventory turnover ratio comparing to others two of the companies.Advent
Pharmaceuticals is in good position cause, the inventory turnover ratio was increasing over the years. The higher the
ratio the better efficiency a company can have. In 2017-2018 sun pharma had high ratio, but the ratio was getting down
year by year. That indicates that the sales were getting weak or any other mistakes by the company. They have to
concern about it.

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 2. Average Collection Period
Average Collection Period = Accounts Receivables /(annual sales/360)

Days Sales Outstanding (in days)

Company Name 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Sun Pharmaceuticals 153 153 108 94 98

Limited
AmbeePharma Limited 75 73 87 335 220

Advent Pharmaceutical 45 55 73 100 95

Limited

Average Collection Period

400

350

300

250

200

150

100

50

0
Sun Pharma Ambee Pharma Advent Pharma

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Interpretation
Sun Pharmaceutical Industries Limited

From the above table, it shows that the Average Collection Period was going lower over the year. For this reason,
company can be in cash shortage. A lower average collection period is generally more favorable than a higher one. A low
average collection period indicates that the organization collects payments faster.

Ambee Pharmaceuticals Limited:

From the table we can interpret that the company’s DSO is very high and it was almost 4X in 2020-2021. The number
reveals that the company is taking longer than it should to collect accounts receivable from customers. It will also cause
the cash flow.

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Advent Pharmaceuticals Limited

From the above table, it shows that the Average Collection Period was going higher(except 2.22) over the year. A higher
average collection period is generally less favorable than a lower one. A high average collection period indicates that the
organization collects payments slower.

Comparison
A shorter average collection period (60 days or less) is generally preferable and means a business has higher liquidity.
Average collection period is also used to calculate another liquidity measure, the receivables turnover ratio. In this table,
we can see that, Sun

Pharma’s Average Collection Period getting down over the year, that means business has higher liquidity. Advent
pharma collection period in 2018,2019 is less than 60 but it increasing day by day.

3. Fixed asset turnover

Net Profit Margin Fixed Asset Turnover = Net Sales/Net Fixed Assets

Fixed Asset Turnover (in times)

Company Name 2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

Sun Pharmaceuticals 0.12 0.89 0.97 0.99 0.19

Limited
Ambee Pharma Limited 3.00 2.94 2.68 1.00 1.23

Advent Pharmaceutical 2.45 2.67 2.79 2.81 1.36

Limited

Fixed Asset Turnover

3.5

2.5

1.5

0.5

0
Sun Pharma Ambee Pharma Advent Pharma

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

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Interpretation
Sun Pharmaceuticals:

The company’s fixed asset ratio was not good because it was always lower than 1.

The company did not use its assets properly, that’s why it also decrease over the years. But in 2019 & 2020 it was near 1,
but in 2021 & 2022 it gradually decreases.

Ambee Pharmaceuticals Limited:

The fixed asset turnover ratio is good but over the years it was fluctuating which indicates that the company was trying
to manage its assets efficiently. But in 2020-2021 the company’s fixed asset turnover was 1 and this implies that the net
sales of the firm is the same as the average total assets for an entire year.

4. Total asset turnover

Total Asset Turnover = Net Sales/Total Assets

Total Asset Turnover (in times)

Company Name 2021-22 2020-21 2019-20 2018-19 2017-18

Sun Pharma 0.06 0.49 0.51 0.70 0.14

Ambee Pharma 1.18 1.00 2.68 2.94 3.00
Advent Pharma 0.94 1.38 1.54 1.16 0.98

Total Asset Turnover

3.5

2.5

1.5

0.5

0
Sun Pharma Ambee Pharma Advent Pharma

2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Interpretation
Sun Pharmaceuticals Limited:

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The company’s total turnover ratio is fluctuating. In 2017-18 it was 0.14, but IN 2021-22 it was 0.06 which means they
are not using assets effectively. Their ratios are always lower than 1.

Ambee Pharmaceuticals Limited:

The fixed asset turnover ratio is good but over the years it was fluctuating which indicates that the company was trying
to manage its assets efficiently. But in 2020-2021 the company’s fixed asset turnover was 1 and this implies that the net
sales of the firm is the same as the average total assets for an entire year.

Advent Pharmaceuticals Limited

In 2022 fixed asset turnover ratio is 0.94 but previously it is good.

Comparison:
Ambee Pharmaceuticals utilized their total asset efficiently than Advent and Sun Pharmaceuticals where they have the
lowest Total Asset Turnover which means they cannot able to utilize their total asset to generate sales.

Debt Management Ratio

1. Debt Ratio:
Debt Ratio= Total Liabilities/total Assets

Company Namr 2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Sun Pharmaceuticals Limited 13.57% 39.42% 36.48% 35.79% 39.68%

AmbeePharmaceuticals Limited 86.11% 85.65% 86.48% 89.42% 89.99%

6.64% 6.79% 5.51% 5.06% 6.38%

Advent Pharmaceuticals Limited

Debt Ratio
100.00%
90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
Sun Pharma Ambee Pharma Advent Pharma

2017-2018 2018-2019 2019-2020 2020-2021 2021-2022

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Interpretation
Sun Pharmaceuticals

Sun pharmaceuticals ltd debt ratio, started with good percentage of 13.57% but it soars high to 39.42% in 2018-2019 the
again it is still fluctuating from FY 2019-2020 to FY 2021-2022 more on the upward side. Which is becoming more
concerning.

Ambee Pharmaceuticals

Ambee pharmaceuticals ltd debt ratio is very high. It is more than 80% which is very risky for the company.

Advent Pharmaceuticals

Advent Pharmaceuticals debt ratio ups and downs year by year.

Comparison
Ambee Pharmaceuticals has higher debt proportion of their capital that assist their asset · which means they have higher
risk. Comparatively Advent pharmaceuticals has lower from Ambee and sun pharmaceutical.

2. Time Interest Earned Ratio:

TIE Ratio= Earnings Before Interest and Taxes/Interest Charges

Company Name 2017- 2018- 2019- 2020- 2021-

2018 2019 2020 2021 2022

Sun Pharmaceuticals 8.69 5.79 13.66 18.79 5.52

Limited

Ambee Pharmaceuticals 2.46 2.74 1.68 1.11 1.05

Limited

Advent Pharmaceuticals 1.68 1.54 1.53 2.60 2.66

Limited

Time Interest Earned Ratio

20
18
16
14
12
10
8
6
4
2
0
Sun Pharma Ambee Pharmaceuticals Advent Pharmaceuticals Limited

2017-2018 201-2019 2019-2020 2020-2021 2021-20222

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Interpretation
Sun Pharmaceuticals

Times interest earned ratio sun Pharmaceuticals ltd was not stable. In FY 2017-2018 it was 8.69 time but in the next year
it decreased to 5.79 time and in FY 2019-2020, FY 2021-2022 it went up. However, in FY 2021-2022 it went down again.

Ambee Pharmaceuticals

Times interest earned ratio of Ambee Pharmaceuticals ltd was not stable. In 2017 it was 1.54 time but in the next year it
increased in 2018 to 2.46 times and in 2019 it increased in 2.74 times. However, from 2020 to 2021 the ratio followed a
downward trend.

Advent Pharmaceuticals

Times interest earned ratio of Advent Pharmaceuticals ltd was not stable either. In FY 2017-2018 it was 1.68 time but in
the next two years it decreased to 1.54 time and 1.53 time. From FY 2020-2021 to FY 2021 it followed upward trend.

Comparison
Both Ambee and Advent pharmaceuticals has unstable time interest earned than Sun pharmaceuticals which means Sun
can pay interest with their Earnings Before Income and Taxes (EBIT) more than Ambee and Advent.

Profitability Ratio
1. Net Profit Margin
Net Profit Margin= Net Profit /Sales

Net Profit Margin (In%)

Company Name 2021-22 2020-21 2019-20 2018-19 2017-18

Sun Pharma 8.98 6.83 12.75 9.69 14.20

Advent Pharma 3.98 4.25 2.30 1.73 2.15

Ambee 2.06 2.36 1.04 1.27 13.14
Pharmaceuticals
Limited

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 Net Profit Margin
16
14
12
10
8
6
4
2
0
2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Sun Pharma Advent Pharna Ambee Pharma

2. Return on asset (ROA)

Return on Total Asset = Net Income/Total Asset

Return on Asset (In%)

Company 2021-22 2020-21 2019-20 2018-19 2017-18

Name

Sun Pharma 40.58 16.00 26.25 18.70 6.43

Advent 4.69 4.5 2.35 1.57 2.03
Pharma

Ambee Pharma 1.06 3.08 0.84 0.83 1.86

ROA
45
40
35
30
25
20
15
10
5
0
2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Sun Pharma Advent Pharma Ambee Pharma

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Interpretation
Sun Pharmaceuticals

The return on Asset Ratio of Sun Pharmaceuticals ltd was very good over the years. In 2017 the ratio was 6.43% which in
the next year only increased by 18.7% But in the year 2021 it dropped. Interestingly, from the following year 2022, the
ratio was40.58% which was tremendously increased.

Advent Pharmaceuticals

The ratio was good in 2022 which was 4.69% but fell down in 2018 to 1.57%. After that, it continuously grew till 2021 to
4.5% which indicates in terms of generating income from total assets, the performance of the company is doing well.

Ambee Pharmaceuticals

Return on Asset Ratio of Ambee Pharmaceuticals ltd was not stable over the years. In 2016 the ratio was 1.60% which in
the next year only increased with the difference of 0.26% which wasn’t sufficient. But in the next year it dropped to the
lowest to 0.83%. Interestingly, from the following year 2021 the ratio followed an increasing trend of 3.08%.

Comparison
The return on asset of Sun pharmaceuticals has the highest percentage. Their assets are more profitable compared to
others to generate income or return.

3. Return on Common Equity

Return on Common Equity = Net Income Available to Common Stock Holders/Common Equity

Return on Equity (In%)

Company 2021-22 2020-21 2019-20 2018-19 2017-18

Name

Ambee 0.16 0.29 0.06 0.05 0.13

Pharma

Advent 15.65 16.93 8.28 3.12 6.50

Pharma

Sun Pharma 1.57 9.38 18.32 5.74 1.79

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 Chart Title
20

15

10

0
2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Ambee Pharma Advent Pharma Sun Pharma

Interpretation

Ambee Pharmaceuticals Limited

Return on Equity of Ambee was going low from 2018 to 2020 which was 0.13% to 0.05%. Then in the next year it has
been raised with the ratio difference of only 0.01%. In the following year 2021 the ratio moderately increased to 0.29%
which isn’t sufficient.

Advent Pharmaceuticals

The return on equity of Square was so good over the years. In 2018 the return on equity ratio was 6.50%, then it
dropped in 2019 it was in the lowest of 3.12%. In the following year in 2021 the ratio increased and it was the highest
equity 16.93%.

Sun Pharmaceuticals

Return on Equity of Sun was not good at all. if we see their ratio, in 2018 it was 1.79%, then following two years it was
increased, then again it fell down. in 2022 it was 1.57%, but previous year it was 9.38%.

Comparison
Sun doesn’t properly utilize its common stockholders’ capital to make the rate of return. Delta is in a better position
compared to others at utilizing their common stock capital. but Ambee pharmaceuticals ROE vertically increased after
2020. It means Ambee started to utilize their stock holder’s capita to make profit.

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 Market Ratio
1. Earnings per share (EPS)

Earnings per share (EPS)= net income available to common stock holders/ number of shares

Earnings per share (EPS)

Company 2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Name
Ambee Pharma 5.69 1.52 5.42 1.52 6.31
Advent Pharma 3.13 3.25 2.25 2.52 2.42
Sun Pharma 3.38 4.58 3.70 2.58 2.36

EPS
9

0
2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Ambee Pharma Advent Pharma Sun Pharma

2. Price Earnings ratio

Price Earnings ratio=Market Price per Share/ Earnings per share

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 Price Earn ings ratio

Company 2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Name
Ambee Pharma 1.88 1.52 5.42 1.52 3.44
Advent Pharma 1.25 0.59 1.36 3.12 3.26
Sun Pharma 20.69 16.30 25.69 15.31 20.96

Price Earning Ratio

30

25

20

15

10

0
Ambee Pharma Advent Pharma Sun Pharma

2021-2022 2020-2021 2019-2020 2018-2019 2017-2018

Looking at the table, we can see that Sun Sun Pharma had the highest P/E ratio in 2017-2018 at 25.69, followed
byAmbee Pharma at 5.42and Sun Pharma at 3.26.Advent Pharma's P/E ratio has been fluctuating over the years, with a
peak in 2018-2019 and a low in 2020-2021.

Conclusion
In this report, we have got to know about the financial position of three Pharmaceuticals companies by performing out
some financial ratios. All the data have been collected from their respective websites and annual reports

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 REFERENCE

 Gitman J. Lawrence, Zutter J.Chad, Principles of Managerial Finance ( 14th

Edition)
 Dhaka Stock Exchange https://www.dsebd.org/ (accessed : 15th November)
 Sun Pharmaceuticals Limited homepage,
https://www.sunpharma.com./
 Ambee Pharmaceuticals Limited homepage,
https://www.ambeepharma.com/(Accessed : 19th
November 2022)
 Investopedia https://www.investopedia.com/ (accessed : 20th November
2022)

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