Southeast University

Dissertation Report
On
“Financial Performance of The Acme Laboratories Ltd.”

Submitted To:-
Prof. Dr. Md. Serajul Islam
Dean
Southeast Business School
Southeast University

Submitted By:-
Name:- Shakir Mahmud Shourav
ID:- 2020110004009
Batch No:- 36th
Major:- Finance
Program:- MBA
Southeast University

Date of Submission:- 09 June, 2021

i
Financial Performance of The Acme
Laboratories Ltd.

ii
 Letter of Transmittal

09 June, 2021
Prof. Dr. Md. Serajul Islam
Dean
Southeast Business School
Southeast University

Subject:- Submission of Dissertation Report.

Dear Sir,

With due respect I would like to submit my dissertation report on “Financial Performance
of The Acme Laboratories Ltd.” which is the topic of my dissertation program. I would like
say that all the contents of this report was collected, organized and prepared by me.

I believe that dissertation program has given me a vast opportunity to enrich both of my
knowledge and experience. I made my best effort to fulfill the object of the report and believe
that it will meet your expectations. I will be glad to answer any queries about the study and
the report.

I, therefore, hope that you will be satisfied reviewing this report.

Sincerely yours-

____________________
Shakir Mahmud Shourav
ID No:- 2020110004009
Batch:- 36th
Major:- Finance
Program:- MBA

iii
 Declaration

I, Shakir Mahmud Shourav, a student of Masters of Business Administration (MBA) in

Southeast University, ID:- 2020110004009, Semester:- Spring-2021, Batch: 36th, hereby
declare that the presented report of is dissertation report titled is “Financial Performance of
The Acme Laboratories Ltd.” uniquely prepared by me after the completion of four months
semester. I also confirm that, the report is only prepared for my academic requirement not for
any other purpose.

iv
 Acknowledgement

For the successful execution of this report, first I would to thanks to the Almighty Allah.
Next, with warm gratitude I would like to remember all of them whose enthusiastic supports
have contributed largely on the timely accomplishment of my entire dissertation program.

With my respect, I would like to thanks Prof. Dr. Md. Serajul Islam sir for being a humble
supervisor faculty who Provide full guideline in the internship report. Without his sincere
guidance, this report would be more difficult task to completer.

Finally, I would like thank my all friends, honorable Teachers, my respected Parents & other
family members for giving me help in every stage.

v
 Executive Summary

The Report "Financial Performance of The Acme Laboratories Ltd." opens up with an overall
introduction on how this topic comes to be and why it was chosen for the dissertation
program.

I have discussed about the overall financial analysis of five years, company’s description.
Then I have discussed some findings and recommendations of those findings. The ACME
Laboratories Limited is considered as one of the biggest pharmaceuticals company in
Bangladesh. ACME wants to bring a good change in Bangladesh by providing the mass with
life saving medicine for both human and animals. It was a great honor to work with one of
the best pharmaceuticals company of Bangladesh. The working environment was very
friendly and I was provided with plentiful help to adapt into the workplace. My report mainly
focuses on the financial analysis over the past five years. Also, the changes brought forth by
the financial situation of the company. The primary objective of this report is to evaluate the
financial performance of The ACME Laboratories Limited based on the external auditor’s
report. And understand the outcome of the evaluation of financial performance of ACME.
Also determine the effectiveness and weakness of ACME and lastly recommend the way of
improvement where needed.

vi
 Table of Contents

Serial No. Topic Name Page No.

01 Letter of Transmittal iii
02 Declaration iv
03 Acknowledgement v
04 Executive Summary vi
05 Table of Contents 01

Chapter-1.0 Introduction 03

1.1 Background of the Study 04

1.2 Rationale of the Study 04

1.3 Objectives of the Study 05

1.4 Scope of the Study 05

1.5 Limitations of the Study 05

1.6 Methodology of the Study 06

Chapter- 2.0 An overview of the Acme Laboratories Ltd. 07

2.1 Organization History 08

2.2 About the Founders 08

2.3 Mission 09

2.4 Vision 09

2.5 Company’s Goals 09

2.6 Quality Policy of ACME 10

2.7 Products of the Acme Laboratories Ltd. 10

Chapter- 3.0 Theoretical Review: Ratio Analysis 11

3.1 Liquidity Ratios 12

3.2 Activity Ratios 13

3.3 Debt. Ratios 13

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 3.4 Profitability Ratios 14

3.5 Market Ratios 15

Chapter- 4.0 Findings and Analysis 17

Chapter- 5.0 Recommendations and Conclusion 29

5.1 Recommendations 30

5.2 Conclusion 32

Reference and Appendix 33

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Chapter One

Introduction

3|Page
1.1 Background of the Study

The pharmaceutical business in Bangladesh is a standout amongst the most created hello
there tech parts inside the nation's economy. In 2000, there were 210 authorized allopathic
medication fabricating units in the nation, out of which just 173 were in dynamic creation;
others were either shut down without anyone else or suspended by the permitting expert for
medications because of rebelliousness to great assembling practices or medication laws. The
business made around 5,600 brands of medications in various measurements frames. There
were, notwithstanding, 1,495 discounts medicate permit holders and around 37,700 retail
sedate permit holders in Bangladesh. Because of ongoing advancement of this part, the
industry is sending out prescriptions to worldwide markets, including the European market.
This area is likewise giving 97% of the aggregate drug necessity of the neighborhood
advertise

We are joined together, roused and powered by our main goal to guarantee wellbeing force
and bliss for all. Since our establishing in 1954 by Mr. Hamidur Rahman Sinha, a business
visionary and donor in this district of then British isolated Indian sub-landmass, we have been
focused on offering answers for our most squeezing medicinal service’s needs. The greater
part a century later, we stay consistent with our originator's vision and qualities – to deliver
top notch meds with trustworthiness, client center, ace movement, camaraderie, magnificence
and want to win and reacting to social and natural needs. In the course of recent decades, we
have seen an astounding development and accomplishment in pharmaceutical segment. With
over 60 years of mastery in prescription and science, our organization draws upon a rich
inheritance of amazing details and a hearty pipeline of promising conventional medications at
reasonable cost to meet the medicinal service’s needs.

1.2 Rationale of the Study

Southeast university MBA (Masters of Business Administration) require dissertation program

for students. It helps the student to introduce with real world, because the theory of books and
practical experience is far from each other. It is a healthy educational policy. As I am a
student of MBA program, the dissertation course is a mandatory option for me. And topic of
the report is beneficiary to expand my knowledge and help my future career.

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1.3 Objectives of the Study

The objective of the report can be viewed in two forms:-

1. General Objective
2. Specific Objectives

General Objective:-

The general objective of this report is to evaluate the financial performance of the Acme
Laboratories Ltd.

Specific Objectives:-

The Specific objectives of the study are as follows:-

 To know about the introduction and products of the Acme Laboratories Ltd.
 To know different types of ratios for evaluating the Acme Laboratories Ltd.’s
performance.
 To evaluate the financial performance of last 05 years of the Acme Laboratories Ltd.
 To find out the problems of the Acme Laboratories Ltd.
 To make some recommendations to solve the problems of Acme Laboratories Ltd.

1.4 Scope of the Study

In the time of making report there is a scope of gather the knowledge about 18 different ratios
which are included different types like liquidity ratios, activity ratios, debt. ratios,
profitability ratios, market ratios for evaluating the last five years performance of the Acme
Laboratories Ltd..

1.5 Limitations of the Study

 Time limitation is one of vital limitation.

 Lack of sufficient books, papers and journals.
 Data availability could another issue here because banks are maintaining high level
privacy for every task.

5|Page
1.6 Methodology of the Study

In order to make the report more meaningful, presentable, a complete one and to meet the
goal of this report different data and information are required. Those data and information
were collected from various sources, such as, primary and secondary which is showed
below:-

Primary Data Sources:-

 Practical financing work.

 Personal discussion with the officers and executives of the Acme Laboratories Ltd.

Secondary Data sources:-

 Website of the Acme Laboratories Ltd.

 Annual report of the Acme Laboratories Ltd.
 Various books, articles, compilations etc.
 Other websites information.

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 Chapter Two

An overview of the Acme Laboratories Ltd.

7|Page
2.1 Organization History

The historical backdrop of The Summit Labs Ltd. goes back to 1954 when a proprietorship
firm was considered to fabricate moral medications. It began with the humble presentation of
a couple of oral fluid items. Late Hamidur Rahman Sinha was the organizer of the firm and
had been the fundamental visionary of the association since its initiation until his dismal
destruction in February 1994.

After its underlying long stretches of hardships, the firm was changed over into a private
Restricted Organization in the year 1976 and the Adjusting Modernization, Substitution and
Extension (BMR&E) chip away at the little old unit began in 1976 at a vast new start at
Dhamrai, Dhaka. Business Task at the new modernized plant outfitted with refined and
propelled offices started toward the finish of 1983. Numerous difficulties were confronted
and defeated effectively to change the organization from a little unit to what it is today a
goliath in its field.

Top consistently looks to grow its creation offices, include workers, and increment it deals
and promoting endeavors. As per the most recent measurements, out of 250 to 300
pharmaceutical organizations in the nation, Zenith is the second biggest producer and
exporter of Human, Natural and Creature Wellbeing Pharmaceutical Items in Bangladesh.
ACME has additionally attempted to fortify its system of universal showcasing activities to
send out its items abroad. We are hopeful about our unending development and achievement.
ACME Laboratories is the second largest manufacturer and exporter of Human, Herbal and
Animal Health Pharmaceutical Products in Bangladesh. The ACME Laboratories Ltd, the
pharmaceutical and the flagship company of the ACME Group, is a manufacturer and global
exporter of human, herbal and veterinary pharmaceutical products. Since 1990 the company
has achieved an average growth rate of 25% compared to 13% registered by the
pharmaceutical sector of the country.

2.2 About the Founders

Foundation of Top was an extraordinary innovative exertion Recently Hamidur Rahman

Sinha route in 1954 and is a distinctive case of an incredible personality's vision and its
emergence. Post pilgrim Bengal was a position of incredible vulnerability and hardship.
Industrialization offices were small and lacking. One man approached with his vision, in the
midst of the political unrest and express torpidity of the then-new Government. It is anything

8|Page
but a simple assignment to set up an exceptionally complex industry, and in addition do it
without bank credits and administrative help. So it requested tremendous exertion, solid
assurance alongside vision and dreams.

1954 was a point of reference year ever of pharmaceutical industry. Late Hamidur Rahman
Sinha may have thought it was a private enterprising exertion on his part, however in
actuality it was a fearless and bold stride which had an influence in spearheading the present
pharmaceutical industry.

2.3 Mission

Our all-encompassing methodology is to guarantee Wellbeing, Life and Bliss for all by
assembling moral medications and meds of the most elevated quality at moderate costs and
connecting even to the remotest zones by legitimate conveyance arrange. We see ourselves as
accomplices with specialists, our clients, our workers and our condition.

2.4. Vision

The Acme Laboratories Ltd.’s vision is to accomplish noteworthy business in solution items
by 2011 with a solid nearness in residential and universal market. Considering the above
vision, under the umbrella of Top gathering, The Top Specific Pharmaceuticals Ltd. is an
imaginative and vision driven organization intended to accommodate worldwide measures
like WHO cGMP, UK-MHRA and US-FDA. The best and biggest strong measurements
shapes fabricating office is under development by dynamic direction of European Experts.

2.5. Company’s Goals

The Top Labs Ltd. is resolved to keep up best in class fabricating offices for guaranteeing
best quality items to the clients. The organization is given to expand deals development,
increment efficiency, increment net revenue, enhance organization picture and consumer
loyalty, and guarantee constant enhancement.

9|Page
2.6. Quality Policy of ACME

 Total pledge to the most astounding standard quality item and administration.
 Enhance piece of the pie and efficiency.
 This association has received ISO 9001 and CGMP measures.
 The Quality Administration Framework will be resourced with skilled work force,
appropriate premises, and A la mode innovation.

2.7. Products of the Acme Laboratories Ltd.

ACME is running its operation in the market with 824 generic products or medicine of three
broad category Human is 561, Veterinary is 228 and Herbal is 35 product respectively.
ACME Laboratories is constantly expanding and improving its product line. The
manufacturing products lines of Human are Tablet, Capsule, Injections, Liquid Powder for
Suspension Cream, Ointment, Inhaler, Eye, Ear & Nasal drops Suppository etc. Some
popular Human Products are Trizon, Monas 10, Cipro-A, Sefril, Coralex, TPC, Ecosprin,
Fast, Maxima etc.

The manufacturing products lines of Veterinary are Injection, Liquid, Bolus, Premix, Water
soluble powder, Cream and Ointment. Some popular Veterinary Products are LT-Vet,
Zeolite, Zymo Vet etc.

There are some Herbal products. Herbal Division emerged as a section of Manufacturing
Department in the year 2003 and after meeting all regulatory requirements production and
marketing of Herbal items started in the same year. Some popular Herbal Products are
Honeybas, Gintonic, Basak etc.

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 Chapter Three

Theoretical Review: Ratio Analysis

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There are mainly five types of Ratios for measuring financial performance of a company.
These are explaining below:-

3.1. Liquidity Ratios

Liquidity ratios measure the ability of the firm analysis of liquidity needs the preparation of
cash budgets and cash and fund flow statements. Cash is the basic input to keep the business
running on a continuous basis. A firm should ensure that it does not suffer from lack of
liquidity, and it does not have excess liquidity. Cash shortage will disrupt the firm operation
which result in a poor credit worthiness and surplus of cash or excessive of cash will simply
remain idle that means the firms fund will be unnecessarily tied up in current assets.
Therefore it is necessary to manage a proper balance between high liquidity and lack of
liquidity.

1. Current Ratio:- The current ratio is a liquidity ratio that measures whether or not a
firm has enough resources to meet its short-term obligations. It compares a firm's
current assets to its current liabilities, and is expressed as follows: The current ratio is
an indication of a firm's liquidity.
𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
Current Ratio=
𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

2. Liquidity Ratio:- Liquidity ratios are an important class of financial metrics used to
determine a debtor's ability to pay off current debt obligations without raising external
capital. Liquidity ratios measure a company's ability to pay debt obligations and its
margin of safety.

𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑞𝑢𝑖𝑑 𝐴𝑠𝑠𝑒𝑡𝑠

Liquidity Ratio=
𝑇𝑜𝑡𝑎𝑙 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠

3. Quick Ratio:-The quick ratio is a measure of how well a company can meet its short-
term financial liabilities. Also known as the acid-test ratio, it can be calculated as
follows:

Current Assets −Inventory

Quick Ratio=
Current Liabilities

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3.2. Activity Ratios

Activity Ratio highlights the activity and the operational efficiency of the business concern.
The better managements of asserts the larger the amount of sale. Activity ratio measures the
relationship between the sales and the assets. Turnover ratios are employed to evaluate the
efficiency with which the firm manages and utilize its asset. Their ratio indicates the speed
with which assets are brought convert as turn over into sale.

4. Inventory Turnover Ratio:-The inventory turnover ratio is calculated by dividing

the cost of goods sold for a period by the average inventory for that period. Average
inventory is used instead of ending inventory because many companies' merchandise
fluctuates greatly throughout the year.
Cost of Goods Sold
Inventory Turnover Ratio=
Total Inventory

5. Average Collection Period:-The average collection period ratio measures the

average number of days clients take to pay their bills, indicating the effectiveness of
the business’s credit and collection policies. This ratio also determines if the credit
terms are realistic.
Acc ounts Receivable
Average Collection Period=
Average Sales Per Day

6. Average Payment Period:-The accounts payable age formula measures the number
of days that a company takes to pay its suppliers. The formula of average age of
payment is-
Accounts Payable
Average Payment Period=
Av erage Purchases Per Day

7. Total Asset Turnover Ratio:-Asset turnover ratio is the ratio of the value of a
company's sales or revenues generated relative to the value of its assets. The Asset
Turnover ratio can often be used as an indicator of the efficiency with which a
company is deploying its assets in generating revenue.
Sales
Asset Turnover Ratio=
Total Assets

3.3. Debt. Ratios

Debt ratios measure the extent to which an organization uses debt to fund its operations. They
can also be used to study an entity’s ability to pay for that debt. These ratios are important to
investors, whose equity investments in a business could be put at risk if the debt level is too

13 | P a g e
high. Lenders are also avid users of these ratios, to determine the extent to which loaned
funds could be at risk.

8. Debt. Ratio:-The debt ratio is defined as the ratio of total – long-term and short-term
– 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.
Total Liabilities
Debt. Ratio=
Total Assets

9. Debt. To Equity Ratio:-Debt to Equity Ratio is a debt ratio used to measure a

company's financial leverage, calculated by dividing a company's total liabilities by
its stockholders' equity. The ratio indicates how much debt a company is using to
finance its assets relative to the amount of value represented in shareholders' equity.
Total Debt .
Debt. To Equity Ratio=
Total Equity

3.4. Profitability Ratios

Profitability reflects the final result of the business operations. Profit earning is considered
essential for the survival of the business. There are two types of profitability ratios profit
margin ratio and the rate of return ratios. Profit margin ratio shows the relationship between
profit and sales. Popular profit margin ratios are gross profit margin and net profit margin
ratio. Rate of return ratio reflects between profit and investment. The important rate of return
measures are rate of return on total assets and rate in equity

10. Gross Profit Margin:- Gross profit margin is a financial metric used to assess a
company's financial health and business model by revealing the proportion of money
left over from revenues after accounting for the cost of goods sold. Gross profit
margin, also known as gross margin, is calculated by dividing gross profit by
revenues.
Gross Profit
Gross profit Margin=
Total Sales

11. Operating Profit Margin:- Operating Profit Margin is a profitability or performance

ratio that reflects the percentage of profit a company produces from its operations,
prior to subtracting taxes and interest charges. It is calculated by dividing the
operating profit by total revenue and expressing as a percentage. The margin is also
known as EBIT (Earnings Before Interest and Tax) Margin.
Operating Profit
Operating profit Margin=
Total Sales

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 12. Net Profit Margin:- Net Profit margins are expressed as a percentage and, in effect,
measure how much out of every dollar of sales a company actually keeps in earnings.
The formula for profit margin-
Net Profit
Net Profit Margin=
Total Sales

13. Earnings Per Share (EPS):-Earnings per share (EPS) is the portion of a company's
profit allocated to each outstanding share of common stock. Earnings per share serves
as an indicator of a company's profitability.
Net Profit
Earnings Per Share=
Total Common Stock Outstanding

14. Return on Total Assets (ROA):-The return on total assets is a ratio that measures a
company's earnings before interest and taxes against its total net assets. The ratio is
considered to be an indicator of how effectively a company is using its assets to
generate earnings before contractual obligations must be paid.
Net Profit
Return on Total Assets=
Total Assets

15. Return on Equity (ROE):- Return on equity (ROE) is a measure of financial

performance calculated by dividing net income by shareholders' equity. Because
shareholders' equity is equal to a company’s assets minus its debt, ROE is considered
the return on net assets. ROE is considered a measure of how effectively management
is using a company’s assets to create profits.
Net Profit
Return on Total Equity=
Total Assets

2.5. Market Ratios

Market value ratios are used to evaluate the current share price of a publicly-held company's
stock. These ratios are employed by current and potential investors to determine whether a
company's shares are over-priced or under-priced.

16. Market/Book Ratio:- The Market to Book ratio (also called the Price to Book ratio),
is a financial valuation metric used to evaluate a company's current market value
relative to its book value. The market value is the current stock price of all
outstanding shares (i.e. the price that the market believes the company is worth).
Market Price Per Share
Market/Book Ratio= Book Value Per Share

17. Price Earnings Ratio:-The price-earnings ratio, also known as P/E ratio, P/E, or
PER, is the ratio of a company's share price to the company's earnings per share. The

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 ratio is used for valuing companies and to find out whether they are overvalued or
undervalued.
Market Price Per Sh are
Price Earnings Ratio=
EPS

18. Equity Multiplier:- The equity multiplier is a straightforward ratio used to measure a
company’s financial leverage. The ratio is calculated by dividing total assets by total
equity. When a company purchases major assets, it can finance those purchases by
incurring debt or issuing stock. A high equity multiplier indicates the company has
been using more debt than equity to finance its asset purchases.

𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡
Equity Multiplier=
𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦 𝐶𝑎𝑝𝑖𝑡𝑎𝑙

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 Chapter Four

Findings and Analysis

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The data I have collected for ratio analysis of last 05 years of the Acme laboratories Ltd. is
given below:-

Year 2016 2017 2018 2019 2020

Current Assets 11603359057 11671330040 11462209428 12135978847 14705522689

Current Liabilities 8566790380 9315041707 10363696868 13000187421 13981796643

Total Liquid Assets 3073596214 4044313684 4370517050 4894937537 6418268198

Inventory 2749539322 2907608895 3143134830 3572384216 3917967826

Cost of Goods Sold 7770610089 8039829556 8942398576 9882879199 11728937307

Accounts
Receivable 891843015 1227081694 1506585427 1600062384 1910829633

Accounts Payable 391028767 211268759 208815093 321405105 398967527

Sales 12644913144 13576322298 14813914266 16308627037 19003659657

Annual Purchases 8035279648 8197899129 9177924511 10312128585 12074520917

Operating Profit 1402101061 2035550457 1954844067 1953341460 1979432202

Earnings Av. For
Common
Stockholders 1101697816 1401828815 1429058273 1439370483 1440382773
No. of Shares
Outstanding 168198139 212076976 212026450 211361304 210274857

Total Assets 28889710630 29947231509 32624246240 35921599389 39418263182

Total Liabilities 12525238649 12990954383 14979211413 17578207543 20374083017

Total Equity 16364471981 16956277126 17645034827 18343391846 19044180165

Earnings Per Share
(EPS) 6.55 6.61 6.74 6.81 6.85
Market Price Per
Share of Common
Stock 114.9 118.2 92.9 71.5 64.4
Book Value Per
Share of Common
Stock 97.29282427 79.95340864 83.22091337 86.7868976 90.56803289

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The different ratios of last 05 years of the Acme Laboratories Ltd. are given below:-

No. Ratio 2016 2017 2018 2019 2020

1 Current Ratio 1.35 1.25 1.11 0.93 1.05

2 Liquidity Ratio 0.36 0.43 0.42 0.38 0.46

3 Quick Ratio 1.03 0.94 0.80 0.66 0.77

4 Inventory Turnover 2.83 2.77 2.85 2.77 2.99

Average Collection
5 Period 25.74 32.99 37.12 35.81 36.70
Average Payment
6 Period 17.76 9.41 8.30 11.38 12.06
Total Assets
7 Turnover Ratio 0.44 0.45 0.45 0.45 0.48

8 Debt. Ratio 0.43 0.43 0.46 0.49 0.52

Debt. To Equity
9 Ratio 0.77 0.77 0.85 0.96 1.07

10 Gross Profit Margin 0.39 0.41 0.40 0.39 0.38

Operating Profit
11 Margin 0.11 0.15 0.13 0.12 0.10

12 Net Profit Margin 0.09 0.10 0.10 0.09 0.08

13 EPS 6.55 6.61 6.74 6.81 6.85

14 Return on Assets 0.04 0.05 0.04 0.04 0.04

15 Return on Equity 0.07 0.08 0.08 0.08 0.08

16 Market/Book Ratio 1.18 1.48 1.12 0.82 0.71

17 Price Earnings Ratio 17.54 17.88 13.78 10.50 9.40

Equity Multiplier
18 (Times) 1.77 1.77 1.85 1.96 2.07

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 Current Ratio
1.60
1.35
1.40 1.25
1.20 1.11 1.05
0.93
1.00
AMOUNT

0.80

0.60

0.40

0.20

0.00
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest current ratio in 2016 which was 1.35. But the
company had the lowest current ratio in 2019 which was 0.93. The current ratio was 1.25 in
2017, 1.11 in 2018 and 1.05 in 2020.

Liquidity Ratio
0.50 0.46
0.43 0.42
0.45
0.38
0.40 0.36
0.35
0.30
AMOUNT

0.25
0.20
0.15
0.10
0.05
0.00
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest liquidity ratio in 2020 which was 0.46. But the
company had the lowest liquidity ratio in 2016 which was 0.36. The liquidity ratio was 0.43
in 2017, 0.42 in 2018 and 0.38 in 2019.

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 Quick Ratio
1.20
1.03
0.94
1.00
0.80 0.77
0.80
0.66
AMOUNT

0.60

0.40

0.20

0.00
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest quick ratio in 2016 which was 1.03. But the
company had the lowest quick ratio in 2019 which was 0.66. The quick ratio was 0.94 in
2017, 0.80 in 2018 and 0.77 in 2020.

Inventory Turnover Ratio

3.05
2.99
3.00

2.95

2.90
AMOUNT

2.85
2.85 2.83

2.80 2.77 2.77

2.75

2.70

2.65
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest inventory turnover ratio in 2020 which was 2.99.
But the company had the lowest inventory turnover ratio in 2017 and 2019 which was 2.77.
The inventory turnover ratio was 2.83 in 2016, 2.85 in 2018.

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 Average Collection Period
40.00 37.12 35.81 36.70
35.00
32.99

30.00 25.74
25.00
AMOUNT

20.00

15.00

10.00

5.00

0.00
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest average collection period in 2018 which was
37.12 days. But the company had the lowest average collection period in 2016 which was
25.74 days. The average collection period was 32.99 days in 2017, 35.81 days in 2019 and
36.70 days in 2020.

Average Payment Period

20.00 17.76
18.00
16.00
14.00 12.06
11.38
12.00
AMOUNT

9.41
10.00 8.30
8.00
6.00
4.00
2.00
0.00
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest average payment period in 2016 which was
17.76 days. But the company had the lowest average payment period in 2018 which was 8.30
days. The average payment period was 9.41 days in 2017, 11.38 days in 2019 and 12.06 days
in 2020.

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 Total Assets Turnover Ratio
0.49 0.48
0.48

0.47

0.46 0.45 0.45 0.45

AMOUNT

0.45
0.44
0.44

0.43

0.42

0.41
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest asset turnover ratio in 2020 which was 0.48. But
the company had the lowest asset turnover ratio in 2016 which was 0.44. The asset turnover
ratio was 0.45 in 2017, 2018 and 2019.

Debt. Ratio
0.54
0.52
0.52

0.50 0.49

0.48
AMOUNT

0.46
0.46
0.43 0.43
0.44

0.42

0.40

0.38
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest debt. ratio in 2020 which was 0.52. But the
company had the lowest debt. ratio in 2016 and 2017 which was 0.43. The debt. ratio was
0.46 in 2018, 0.49 in 2019.

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 Debt. To Equity Ratio
1.20 1.07
0.96
1.00
0.85
0.77 0.77
0.80
AMOUNT

0.60

0.40

0.20

0.00
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest debt. to equity ratio in 2020 which was 1.07. But
the company had the lowest debt. to equity ratio in 2016 and 2017 which was 0.77. The debt.
to equity ratio was 0.85 in 2018, 0.96 in 2019.

Gross Profit Margin

0.41 0.41

0.41

0.40 0.40
0.39
0.40
AMOUNT

0.39 0.39
0.39 0.38

0.38

0.38

0.37
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest gross profit margin in 2017 which was 0.41. But
the company had the lowest gross profit margin in 2020 which was 0.38. The gross profit
margin was 0.39 in 2016 and 2019, 0.40 in 2018.

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 Operating Profit Margin
0.16 0.15

0.14
0.13
0.12
0.12 0.11
0.10
0.10
AMOUNT

0.08

0.06

0.04

0.02

0.00
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest operating profit margin in 2017 which was 0.15.
But the company had the lowest operating profit margin in 2020 which was 0.10. The
operating profit margin was 0.11 in 2016, 0.12 in 2019 and 0.40 in 2018.

Net Profit Margin

0.12
0.10
0.10
0.10 0.09 0.09
0.08
0.08
AMOUNT

0.06

0.04

0.02

0.00
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest net profit margin in 2017 and 2018 which was
0.10. But the company had the lowest net profit margin in 2020 which was 0.08. The net
profit margin was 0.09 in 2016 and 2019.

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 Earnings Per Share (EPS)
6.90 6.85
6.85 6.81
6.80
6.74
6.75
6.70
AMOUNT

6.65 6.61
6.60 6.55
6.55
6.50
6.45
6.40
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest EPS in 2020 which was 6.85 taka. But the
company had the lowest EPS in 2016 which was 6.55 taka. The EPS was 6.61 taka in 2017
and 6.74 taka in 2018, 6.81 taka in 2019.

Return on Assets
0.05 0.05
0.04
0.05 0.04
0.04 0.04
0.04
0.04
0.03
AMOUNT

0.03
0.02
0.02
0.01
0.01
0.00
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest ROA in 2017 which was 0.05. But the company
had the same ROA in 2020, 2019, 2018 and 2016 which was 0.04.

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 Return on Equity
0.09 0.08 0.08 0.08 0.08
0.08
0.07
0.07
0.06
AMOUNT

0.05
0.04
0.03
0.02
0.01
0.00
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the same ROE in 2017, 2018, 2019 and 2020 which was
0.08. But the company had the lowest ROE in 2016 which was 0.07.

Market/Book Ratio
1.60 1.48
1.40
1.18
1.20
1.12

1.00 0.82
AMOUNT

0.80 0.71

0.60

0.40

0.20

0.00
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest market/book ratio in 2017 which was 1.48. But
the company had the lowest market/book ratio in 2020 which was 0.71. The market/book
ratio was 1.18 in 2016, 1.12 in 2018 and 0.82 in 2019.

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 Price Earnings Ratio
20.00 17.88
17.54
18.00
16.00 13.78
14.00
12.00 10.50
AMOUNT

9.40
10.00
8.00
6.00
4.00
2.00
0.00
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest price earnings ratio in 2017 which was 17.88.
But the company had the lowest price earnings ratio in 2020 which was 9.40. The price
earnings ratio was 17.54 in 2016, 13.78 in 2018 and 10.50 in 2019.

Equity Multiplier (Times)

2.10 2.07
2.05
2.00 1.96
1.95
1.90
AMOUNT

1.85
1.85
1.80 1.77 1.77
1.75
1.70
1.65
1.60
2016 2017 2018 2019 2020

Interpretation:-

The Acme Laboratories Ltd. had the highest equity multiplier in 2020 which was 2.07 times.
But the company had the lowest equity multiplier in 2016 and 2017 which was 1.77 times.
The equity multiplier was 1.85 times in 2018, 1.96 times in 2019.

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 Chapter Five
Recommendations and Conclusion

29 | P a g e
5.1 Recommendations

After explaining the major findings related to the financial performance analysis of the Acme
Laboratories Ltd, several recommendations are given below:-

Current ratio of the Acme Laboratories Ltd. in 2016 was better than other years. The
company had good amount of current assets in 2016. But the company had not good
enough current assets in 2019. The current ratio was 1.25 in 2017, 1.11 in 2018 and
1.05 in 2020.
Liquidity ratio in 2020 which was 0.46 which was better than other years’ liquidity
ratio. It means the company had good amount of liquid assets in 2020. But the
company had the lowest liquidity ratio in 2016 which was 0.36. That means the
company had lower liquid assets in 2016.
The highest quick ratio in 2016 which was 1.03. It means the company had good
amount of quick assets like cash and cash equivalents etc. But the company had the
lowest quick ratio in 2019 which was 0.66. That means the company had lower quick
assets.
The highest inventory turnover ratio in 2020 which was 2.99 which means high sales.
But the company had the lowest inventory turnover ratio in 2017 and 2019 which was
2.77. That means the company had lower sales in 2017 and 2019 which was not good
for the company.
The highest average collection period in 2018 was 37.12 days which was not good for
the company. But the company had the lowest average collection period in 2016
which was 25.74 days. That means the company was efficient and effective for
collection.
The highest average payment period in 2016 was 17.76 days. That means the
company is not efficient and effective of payment. But the company had the lowest
average payment period in 2018 which was 8.30 days. It was good for the company.
The highest asset turnover ratio in 2020 which was 0.48. Higher asset turnover ratio is
favored. Because the company has generated highest revenue from its assets. But the
company had the lowest asset turnover ratio in 2016 which was 0.44. It is not good for
the company.
The Acme Laboratories Ltd. had the highest debt. ratio in 2020 which was 0.52.
Higher debt. ratio is not good for the company. But the company had the lowest debt.

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ratio in 2016 and 2017 which was 0.43. That means the company had lower use of
debt. and higher use of equity.
The Acme Laboratories Ltd. had the highest debt. to equity ratio in 2020 which was
1.07. It was not good for the company for using higher debt. But the company had the
lowest debt. to equity ratio in 2016 and 2017 which was 0.77. That means the
company had lower use of debt. and higher use of equity.
The highest gross profit margin in 2017 which was 0.41. That means the company had
better gross profit in 2017. But the company had the lowest gross profit margin in
2020 which was 0.38. That means the company had not higher gross profit in 2020.
The Acme Laboratories Ltd. had the highest operating profit margin in 2017 which
was 0.15. That means the company had better operating profit in 2017. But the
company had the lowest operating profit margin in 2020 which was 0.10. That means
the company had not higher operating profit in 2020.
The Acme Laboratories Ltd. had the highest net profit margin in 2017 and 2018
which was 0.10. That means the company had better net profit in 2017 and 2018. But
the company had the lowest net profit margin in 2020 which was 0.08. That means the
company had not higher net profit in 2020.
The highest EPS in 2020 which was 6.85 taka. Higher EPS means higher income per
share in a year. But the company had the lowest EPS in 2016 which was 6.55 taka.
The Acme Laboratories Ltd. had the highest ROA in 2017 which was 0.05. ROA in
higher rates means higher return from assets. But the company had the same ROA in
2020, 2019, 2018 and 2016 which was 0.04.
The Acme Laboratories Ltd. had the same ROE in 2017, 2018, 2019 and 2020 which
was 0.08. Higher ROE means the company has generated higher return from its
equity.
The highest market/book ratio in 2017 which was 1.48. It is not good for the
company. But the company had the lowest market/book ratio in 2020 which was 0.71.
Lower market/book ratio is good for the company.
The Acme Laboratories Ltd. had the highest price earnings ratio in 2017 which was
17.88. Higher price earnings ratio is not good for the company. But the company had
the lowest price earnings ratio in 2020 which was 9.40.
The highest equity multiplier in 2020 which was 2.07 times. That means the company
had high use of debt. to finance. But the company had the lowest equity multiplier in
2016 and 2017 which was 1.77 times. That means the company had used lower debt.
31 | P a g e
5.2 Conclusion

Bangladesh is set in such a one of kind positions, to the point that it can acquire upheaval its
pharmaceutical area if the nation could underwrite the open doors ideally. As per the IMS
report, the aggregate size of the drug store market of Bangladesh was assessed to be Tk.
55310 million of every 2012 with a yearly development rate of around 10 percent,
Bangladesh pharmaceutical industry is presently making a beeline for independence in taking
care of the nearby demand. One of the best makers of the business is The ACME
Laboratories Limited.

After the execution investigation, it is imperative to take note of that The ACME
Laboratories Limited is an association with equivalent accentuation on authority, innovation,
quality and energy. The organization is the main braded nonexclusive pharmaceutical maker
in Bangladesh delivering quality basic and other moral medications and drugs. It has been
constantly in great position among all national and worldwide organizations since 1985 in
Bangladesh. Indeed, The ACME Laboratories Limited, the lead organization, is holding the
solid authority position in the pharmaceutical business since its investigation and is presently
on its approach to wind up an elite worldwide player as the investors of The ACME
Laboratories Limited have additionally obtained higher return against their venture.

32 | P a g e
References and Appendix

33 | P a g e
To prepare the report I had collected information mainly from websites, annual reports of the
Acme Laboratories Ltd., different books. The sources of information which I had collected
are given in the following:

Annual Reports:-

 Annual Report of The Acme Laboratories Ltd., 2016-2017

 Annual Report of The Acme Laboratories Ltd., 2017-2018
 Annual Report of The Acme Laboratories Ltd., 2018-2019
 Annual Report of The Acme Laboratories Ltd., 2019-2020

Websites:-

 [Link]
 [Link]
d&mod=mw_quote_advanced
 [Link]
ME_Laboratories_Limited__(ACMELAB)
 [Link]
11541%20%2829%25%[Link]?sequence=1&isAllowed=y
 [Link]
 [Link]
boratories_Limited

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