A comparative analysis of operating performance: evidence from the top five pharmaceutical companies of Bangladesh listed with Dhaka stock exchange

Abstract

This paper attempts to evaluate the financial performance of pharmaceutical industry of Bangladesh through analyzing the top 5 listed companies in this sector. The study is based on secondary data from 2005 to 2010 and collected data have been analyzed through different financial ratios and statistical tools like mean, standard deviation (SD), coefficient of variance (CV) and T- test, etc. It was observed from the study of the audited financial statements of the pharmaceutical companies that the efficiency dimension has not been satisfactory for all the companies mainly due to inefficient asset management. However, most of the companies managed to maintain financial stability over the years under consideration. As far as the profitability and solvency dimensions are concerned, both Renata and Square companies outperformed the industry and had been able to generate reasonable return to the shareholders. In terms of liquidity, although the ratio of these companies has shown a downward trend over the past six years but was above the industry average. This study will help the general investors to understand the nature of operating performance of the pharmaceutical companies of Bangladesh, to identify the key factors responsible for such performance and help them to take informed investment decision.