Financial Statement Analysis
Financial Statement Analysis
Assignment 1
This assignment is designed to get you to locate the annual report for a company and become familiar with the contents of an annual report and analysis of the financial statements. You are required to obtain the 2011, 2012 and 2013 annual reports of Square Pharma Ltd. and then answer the following questions.
Question 1
Describe the principal activities of Square Pharma Ltd (hereafter Square). Name the members of Square’s board of directors and identify those who would be considered ‘independent’.
Question 2
Comment on the corporate governance of Square Pharma Ltd. Specially comment on the following:
i) Independence of the independent directors ii) Qualification of the directors and independent directors iii) Qualification of audit committee members iv) Business and reputation of the directors
v) Quality of the audit and auditors independence vi) How the new directors are appointed in the board vii) Does company comply with corporate governance guidelines of Bangladesh Securities and Exchange Corporation Question 3
Using the figures in the annual report of Square Pharma Ltd write a report on the profitability, liquidity, efficiency, gearing, and market performance for 2011, 2012 and 2013. Ratios are to be shown at two decimal place. You must show all your workings. (Where no workings are shown you will receive zero for this section):
Question 4
i. Prepare common size statements for the income statements and balance sheet of Square for 2011, 2012 and 2013. ii. Analyse the trend all the items of income statement and balance sheet of Square taking 2011 as the base year.
Question 5
You have been provided with the following information about another pharmaceutical company, Company X:
COMPANY X
Ratio
2011
2012
2013
Current ratio
4.0
4.1
4.3
Acid test ratio
3.1
3.3
2.6
Average inventory turnover (days)
34
36
43
Return on assets
32.2%
33.0%
20.1%
Assignment 1
This assignment is designed to get you to locate the annual report for a company and become familiar with the contents of an annual report and analysis of the financial statements. You are required to obtain the 2011, 2012 and 2013 annual reports of Square Pharma Ltd. and then answer the following questions.
Question 1
Describe the principal activities of Square Pharma Ltd (hereafter Square). Name the members of Square’s board of directors and identify those who would be considered ‘independent’.
Question 2
Comment on the corporate governance of Square Pharma Ltd. Specially comment on the following:
i) Independence of the independent directors ii) Qualification of the directors and independent directors iii) Qualification of audit committee members iv) Business and reputation of the directors
v) Quality of the audit and auditors independence vi) How the new directors are appointed in the board vii) Does company comply with corporate governance guidelines of Bangladesh Securities and Exchange Corporation Question 3
Using the figures in the annual report of Square Pharma Ltd write a report on the profitability, liquidity, efficiency, gearing, and market performance for 2011, 2012 and 2013. Ratios are to be shown at two decimal place. You must show all your workings. (Where no workings are shown you will receive zero for this section):
Question 4
i. Prepare common size statements for the income statements and balance sheet of Square for 2011, 2012 and 2013. ii. Analyse the trend all the items of income statement and balance sheet of Square taking 2011 as the base year.
Question 5
You have been provided with the following information about another pharmaceutical company, Company X:
COMPANY X
Ratio
2011
2012
2013
Current ratio
4.0
4.1
4.3
Acid test ratio
3.1
3.3
2.6
Average inventory turnover (days)
34
36
43
Return on assets
32.2%
33.0%
20.1%