Ratio Analysis of 5 Pharmacuticals Companies in Bangladesh

Financial ratio analysis is a valuable tool that allows one to assess the success, potential failure or future prospects of the company (Bazley 2012). The ratios are helpful in spotting useful trends that can indicate the warning signs of

Research papers have educated that there are multiples of variables, which contribute into play varying degree of influence on the profitability of the organization. Therefore it is desirable for financial managers to gauge the prime variables exerting substantial influence on the profitability. Following two papers were referred to carry out this project, “An example of the use of financial ratio analysis: the case of Motorola” by H. W. Collier(2007), University of Wollongong.In this paper, they have demonstrated the use of actual financial data for financial ratio analysis. The objective is to show how to compute ratios for an actual company. This paper demonstrates the difficulties in applying the principles of financial ratio analysis when the data are not homogenous as is the case in textbook examples. Therefore in this paper, financial ratio analysis is complicated for companies that do not readily fall into a single industry. Motorola has 6 operating units that fall into several industries with two industries accounting for most of the sales- telecommunication and semi-conductor. However, a more relevant picture of the operating characteristics of Motorola is achieved by increasing the complexity of the analysis, that is, by comparing Motorola to both industries.“Financial ratio analysis as a determinant of profitability in Nigerian Pharmaceutical

Ratios are highly important profit tools in financial analysis that help financial analysts implement plans that improve profitability, liquidity, financial structure, reordering, leverage, and interest coverage. Although ratios report mostly on past performances, they can be predictive too, and provide lead indications of potential problem areas. Financial ratios are important because they help investors make decisions to buy hold or sell securities.

Financial ratios play a key role in determining how a company is doing financially either for the good or the bad. Financial Ratios can be used internally or externally to determine how financially stable a company is. For this assignment we will use three common ratios to determine how financially stable and how Under Armour is over the last three years.

There is a essential use and limitations of financial ratio analysis, One must keep in mind the following issues when using financial ratios: One of the most important reasons for using financial ratio analysis is comparability and for this, a reference point is required. Usually, financial ratios are compared to historical ratios of the business itself, competitor’s financial ratios or the overall ratios of the industry in question. Performance may be adjudged as against organizational goals or forecasts. A number of ratios must be analyzed together to get a true and reliable picture of the financial performance of the business. Relying on each ratio

The paper illustrates that financial ratio analysis is an important tool for firm’s to evaluate their financial health in order to identify areas of weakness so as to institute corrective measures.

Ratios are important in any type of business, because ratios are sued all the way across the board. many financial ratios are used for the purpose of credit analysis, to see where a company stands financially. The three types of ratios are liquidity, solvency, and profitability. Within these main ratio types there are also 8 other basic types of ratios.

Financial ratios are great indicators to find a firm’s performance and financial situation. Most of the ratios are able to be calculated through the use of financial statements provided by the firm itself. They show the relationship between two or more financial variables that can be used to analyze trends and to compare the firm’s financials with other companies to further come up with market values or discount rates, etc.

The financial management of the healthcare organization needs to handle financial matters carefully in order to perform well. Ratio analysis is a kind of financial statement analysis that is utilized to get a fast indication of an organizations financial performance in most important sectors, for that reason the healthcare organization must utilize ratio analysis to assess its financial position and mere its performance. Health systems routinely compare their financial results to those of a peer group of healthy competitors. Managers of most health organizations strive to achieve the outcome of comparable healthy competitors, it is equally important to examine those unhealthy competitors. By doing this managers can learn from their mistakes and know what to avoid in the future. Mid-level managers should ask themselves questions about the organization they are a part of. Are we as an organization financially on track with similar healthy companies, or are we headed for failure like some insolvent companies? Are certain financial ratios more sensitive and predictive of failure? Ratio analysis is a strategy used to aid in assessing the financial position of an health organization. In healthcare finance, there are a lot of financial ratios which have multiple descriptions. This report focuses on roles and analysis financial ratios in a

Ratios describe the various relationships among accounts in the balance sheet and income statement. Financial ratios are important and helpful gauges of how an organization is functioning. An organization’s financial health, potential revenue, and even possible bankruptcy can be garnered from financial ratios. Information derived from financial statements is used to calculate most ratios and make projections. “Ratios help investors and lenders determine the risk associated with lending or investing funds in an organization” (GE Financial Healthcare Services, 2003, para 1). According to Finkler and Ward (2006), “the key to interpretation of ratios is benchmarks. Without a basis for comparison, it is

Financial ratios can be used for a quick comparison to other companies in the industry and to the same company over time. They allow you to ignore the numbers and focus on their relationships.

Our first important financial ratio is the current ratio. The current ratio measures a firms’ potential or ability to pay off it’s short term debts (or liabilities) with specifically it’s current assets. Short term liabilities are due within a year, which makes the current ratio extremely important. The ratio is both a liquidity ratio and an efficiency ratio. A company favors a higher current ratio because it shows the company can pay current debt payments with little hassle. If a company has a current ratio of 3, it means the company has 3x the current assets than current liabilities. But If a company

Financial ratio analysis is a very important element of fundamental analysis process. Working through number in a financial statement can

1. Financial ratios are used to help analyze the company's financial statements. For a small company that is not publicly traded, the most important use of ratios is to compare current performance against past performance. Ratios cover a number of performance metrics that can help a business to benchmark performance against publicly traded companies as well, provided that the business has put together its internal statements according to GAAP, making them compatible with the statements of publicly-traded companies. Ratios cover liquidity, solvency, managerial efficiency, leverage and profitability (NetMBA, 2010). A larger corporation often pays attention to the key ratios, not only because they are an indicator of performance, but because they realize that external parties use these ratios as well.

As an investor or shareholder, one needs to learn and know how to calculate financial ratios before investing, otherwise an investor may risk investing in a debt filled firm with low profitability. Financial ratios are primarily tools for turning the data contained in financial statements into information used by managers and executives to better understand what is happening in a company. Like all tools, they can be used for things other than their original design, such as evaluating an acquisition, creating pro-forma statements related to potential courses of action, or figuring out which stock to buy. Cash flow ratios measure how much cash is generated and the safety net that cash provides to the company to finance debt or grow the