Ambee Pharma

8/18/2019 Ambee Pharma

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Contents1. Introduction......................................................................................................................................... 3

2. About the Company.............................................................................................................................3

2.1. Company profile..........................................................................................................................3

2.2. Mission........................................................................................................................................4

2.3. Vision...........................................................................................................................................4

2.4. Products....................................................................................................................................... 4

3. Worin! Capital Mana!ement........................................................................................................... .."

3.1. #efinition....................................................................................................................................."

3.2 Importance of !ood $orin! Capital Mana!ement............................................................................"

3.3 Problems $ith inade%uate $orin! capital........................................................................................"

4. Policies in $orin! capital mana!ement..................................................................................................&

". Cash Mana!ement................................................................................................................................... &

&.1 Credit !rantin! decision.....................................................................................................................&

&.2 'erms of sales ( Amount in thousands)..............................................................................................*

&.3 #efault rate in Account +ecei,ables..................................................................................................*

&.4 Controllin! and monitorin! Accounts +ecei,ables............................................................................-&." 'urno,er Method...................................................................................................................................-

*. In,entory Mana!ement............................................................................................................................-

*.1 ,erall in,entory mana!ement condition..........................................................................................-

*.2 Composition of in,entory................................................................................................................../

*.3 0conomic rder uantity................................................................................................................../

-. Analyin! Performance......................................................................................................................... 1

-.1 0planation of the ratios $ith 5raphs..............................................................................................1

-.1.1 Worin! Capital 'urno,er.........................................................................................................1-.1.2 Current Assets 'urno,er............................................................................................................11

-.1.3 In,entory 'urno,er +atio..........................................................................................................11

-.1.4 A,era!e 6oldin! Period............................................................................................................12

-.1." +a$ Material In,entory 'urno,er.............................................................................................12

-.1.& Wor in Process In,. 'urno,er..................................................................................................13

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-.1.* Con,ersion Period............................................................................................................ ........13

-.1.- 7inished 5oods In,entory 'urno,er.........................................................................................14

-.1./ 7inished 5oods 8tora!e Period.................................................................................................14

-.1.1 +ecei,ables 'urno,er..............................................................................................................1"

-.1.12 Cash 'urno,er +atio............................................................................................................... 1&

-.1.13 Payable 'urno,er +atio...........................................................................................................1*

-.1.14 Payable #eferral Period.......................................................................................................... 1*

-.1.1" Current +atio.......................................................................................................................... 1-

-.1.1* Cash +atio...............................................................................................................................2

/. Conclusion.............................................................................................................................................21

1. +eferences........................................................................................................................................ ...22

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1. Introduction

'he report $ill help mana!ement to tae correct decision. 'he respondents are the future

decision maers so this report $ill li!ht on their need. It $ill help to identify the current maret

position 9 reasons for decreasin! the sales. It $ill help as a secondary data for further research.

2. About the Company

2.1. Company profile

AM:00 P6A+MAC0;'ICAoint ,enture $ith a famous multinational company

Medimpe of 6un!ary. Ambee started its operation $ith modest 1* >oint ,entured products and is no$runnin! in full s$in! $ith *& products. 'hey ha,e 'ablets= Capsules= ectables. Its operational area co,ers all o,er :an!ladesh $ith a lar!e number of field forces $ho stri,e

hard to establish the demand of products of the company in e,ery corner of the country. 'he company

maintains four outside #epots located at ?hulna= :o!ra= Chitta!on! and 8ylhet besides its @ational

#istribution Cell in #haa.

When Ambee Pharmaceutical


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lies in our fully dedicated and %uality team of professionals. 'he 6uman +esources of the company are

their asset and they are re!ularly trained for the continuous impro,ement of $or methods.

In 21 Ambee Pharmaceuticals


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3.2 Importance of !ood #orin! Capital Mana!ement

WellBmana!ed $orin! capital is crucial to the runnin! of a healthy and successful business. Insimple terms= $orin! capital is the cash a,ailable for the dayBtoBday runnin! of the business=used to settle re!ular bills such as $a!es and supplies= and also co,erin! unplanned costs and

unepected epenses. An important part of $orin! capital mana!ement is a companys coststructure.

'he main importance of $orin! capital are as follo$sD

• 8tren!then the 8ol,ency

• 0nhance 5ood$ill

• 0asy btainin!


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%. Cash Mana!ement

Cash 9 Cash 0%ui,alents Amount in '?.

In hand 1&'33(')%)At bansD %'33*'(13In current accounts %'2%)'2+(In inBoperati,e account (1'%1%'otal Amount 1%')*)'4)+

Cash 5enerated from operatin! acti,ities &1=212=1--

@et cash (used in) / !enerated from in,estin! acti,ities "=112=&2

@et cash used in financin! acti,ities 2-=/2*=&2*

). ,ecei-ables Mana!ement

).1 Credit !rantin! decision

6ere=

0:I' E 2/=3""=*4

8ales E 344=3-=32"

Maret ,alue of e%uity E &==

:oo ,alue of debt E (-=31/=/&& F 3"=&44=&4/) E 3"-=/&4=&1"

+etained earnin!s E 2-=/&-=4*2

'otal assets E 41*=&*=24

Worin! capital E 3&*=342=--/

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Z =3.3 EBIT

TA +1.0

Sales

TA +0.6

MarketValueofEquity

B . V . ofDebt +1.4

R . E .

TA +1.2

W .C .

TA

Z =3.3 29,355,740

417,067,240+1.0

344,038,325

417,067,240+0.6

600,000,000

358,964,615+1.4

28,968,472

417,067,240+1.2

367,342,889

417,067,240

G E 4./ H 2.*

8o the company is credit $orthy and has a !ood condition.

).2 erms of sales /Amount in thousands0

).3 "efault rate in Account ,ecei-ables

When companies etend credit to customers= theres al$ays the chance that one or more of thosecustomers $ont pay. 'he cost of nonBcollectable accounts recei,able can eat a$ay at profits.:usinesses ha,e de,eloped methods for dealin! $ith unpaid in,oices= and they can benefit fromunderstandin! these best business practices. Plan ahead for uncollected accounts recei,able.

).4 Controllin! and monitorin! Accounts ,ecei-ables

0stablishin! a definiti,e companyB$ide credit policy pro,ides uniformity and structure for asmall business. Credit limits for indi,idual sales and total credit outstandin! must be established=and credit terms should be instated. If the company credit policy is not in $ritin!= is not

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communicated and is not supported by top mana!ement= confusion results. 0mployees interpret policy dra$in! different lines of distinction and settin! ,aryin! boundaries. Customers dontunderstand the inconsistency in policy application they feel discriminated a!ainst and maycomplain= not pay= sue or tae their business else$here. 'hese ne!ati,e repercussions onlyhamper producti,ity. Institutin! a $ritten policy that is upheld by upper mana!ement is

instrumental for optimal collection. 0mployees need proper trainin! and support to effecti,elycarry out company policy.

).% urno-er Method

'his company is applicable for turno,er method.

Accounts +ecei,able 'urno,er E Credit salesJ Accounts recei,ables

E 1="42=13"J -1=&41=41-

E .2 times

A,era!e collection period E3&J Accounts +ecei,able 'urno,er

E3&J.2

E 1- days

*. In-entory Mana!ement

*.1 -erall in-entory mana!ement condition

'he o,erall in,entory mana!ement of the company is so !ood and the firm is in the !ood position in the pharmaceutical industry.

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*.2 Composition of in-entory

Particulars Amount in . Percenta!e of

In-entory

+a$ materials &*=4"&=4-- 3&.*&KPacin! materials 3-="1=&-2 2.*4K

Promotional materials 1="-=3 .-&K

WorBinBprocess 3=/&&=4&* 2.1&K

7inished !oods *2=3""=-* 3/.43K

MaterialsBinBtransit /2=31 ."K

'otal In,entory 1-3="3=11* 1K

*.3 conomic rder uantity

8 E 131=2/2=21& units

C E2K (Assumption)

PP E1." '. (Assumption)

E 2& (Assumption)

0EL ((28)J(CPP))

E L ((22&131=2/2=21&)J(.21."))

E4**=" units

'otal In,entory cost E N(CPP)(J2)O F N(8J)O

E N(.21.") (4**=" J2)O F N2&(131=2/2=21&J4**=")

E 143=113.-/ '?.

rder per year E 'otal #emandJ'otal uantity E 131=2/2=21&J4**="

E 2*".22 orders

7or a 3& day year= orders $ill be placed about e,ery (3&J2*".22) E 1.31 days.

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Assume=


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(.1.2 Current Assets urno-er

2014 2013

0.00

0.10

0.20

0.30

0.40

0.50

0.60

Current Asset Turnover Ratio

It also indicates the rate at $hich WC has been used. 5enerally a hi!her ratio is considerin! anindicator of better efficiency $hich $as ."& in 213 and lo$ers one the opposite of .44 in214.

(.1.3 In-entory urno-er ,atio

. 2014 2013

0.00

0.50

1.00

1.50

Inventory Turnover

'he in,entory turno,er ratio is an efficiency ratio that sho$s ho$ effecti,ely in,entory ismana!ed by comparin! cost of !oods sold $ith a,era!e in,entory for a period. 'his measuresho$ many times a,era!e in,entory is turned or sold durin! a period. In other $ords= it

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measures ho$ many times a company sold its total a,era!e in,entory dollar amount durin! theyear. A hi!her turno,er is considered !ood that $as 1.22 in 213 and a lo$er turno,er is bad thatis .-- in 214.

(.1.4 A-era!e 8oldin! Period

2014 2013

0.00

100.00

200.00

300.00

400.00

500.00

Avg Holding Period

In,entory turno,er ratio indicates the $ay mana!ement has used in,entory to conduct theoperation of the business. 5enerally a hi!her turno,er is considered !ood and a lo$ turno,er bad. 'he more days it $ill tae to con,ert in,entory into sales that is not !ood for a firm. 8o the

minimum rate or the lo$er the day it counted to con,erted in,entory that sho$s the efficiency of the firm. In 214 it taes more days almost 414 days to con,ert in,entory into sales than in 213it too 2/- days.

(.1.% ,a# Material In-entory urno-er

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2014 2013

0.40

0.45

0.50

0.55

Raw Material Inventory Turnover

'he ratio indicates the rate of utiliation of ra$ materials. A hi!her turno,er ratio in 213 $as."2 indicated its increasin! utiliation. :ut too hi!h a ratio may indicate that proportionately

fe$er ra$ materials $ere held in order to carry out the production. :ut in 214 it is .44.

(.1.) Wor in Process In-. urno-er

2014 2013

7.00

7.20

7.40

7.60

7.80

Work In Process Inv. Turnover

In 213 a hi!her turno,er ratio *.&" indicated lo$er in,entory accumulation and lesser tied up

$orin! capital. In 214 a fallin! turno,er *.3 means either mana!ement has become rela incontrollin! in production process or some eternal factors ha,e chan!e the productionmo,ement.

(.1.* Con-ersion Period

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2014 2013

0.13

0.13

0.14

0.14

Conversion Period

It indicates ho$ %uicly the WIP in,entory con,erts into finished !ood.


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2014 2013

0.00

50.00

100.00

150.00

200.00

Finished oods !torage Period

A hi!her turno,er ratio indicates lo$er in,entory accumulation and lesser tied up $orin!capital. A fallin! turno,er means either mana!ement has become rela in controllin! in production process or some entreat factors ha,e retired the production mo,ement. 5enerallylo$er stora!e period is considered !ood but too lo$ a stora!e period is risy. In 213 there $aslo$er stora!e period 132 days than 1&3 days in 214.

(.1.1& ,ecei-ables urno-er

2014 20130.00

0.01

0.01

0.02

0.02

0.03

0.03

Receiva"les Turnover

In 214 the account recei,able turno,er of .2 times $hich is computed by credit sales di,ided

by account recei,able = $hich representin! that the amount of credit sales $ill reco,er by .2

times and also it $as .3 times in 213. 6i!her turno,er is better and it $as in 213.

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(.1.11 ,ecei-ables Collection Period

2014 2013

0.00

5000.00

10000.00

15000.00

20000.00

Receiva"le Collection Period

+ecei,ables collection period in 213 $as 1/323.2/ days and in 214 it is 143*4.// $hich

represent that the outstandin! $ill reco,er by these times. 'he +ecei,ables collection period

represent the a,era!e len!th of time that the firm must $ait after main! credit sales before

recei,in! the cash that means its an a,era!e collection period.


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2014 2013

8.00

9.00

10.00

11.00

12.00

Cash Turnover Ratio

A companys cash turno,er ratio measures ho$ many times per year it replenishes its cash balance $ith its sales re,enue. A hi!her cash turno,er ratio is !enerally better than a lo$er one.

In 213 it $as 11.3- that are hi!her than /.*" in 214. 8o in analyin!= the cash turno,er ratiocan help to determine ho$ efficiently eep cash flo$in! throu!h small business= but there aresome dra$bacs to the ratio that could present an inaccurate picture.

(.1.13 Payable urno-er ,atio

2014 2013

0.00

0.10

0.20

0.30

0.40

0.50

Paya"le Turnover Ratio

'he payable turno,er $as .3& times in 213 and .4- times in 214 computed by credit

purchase di,ided by accounts payable. 'he payable turno,er ratio measure the speed $ith the

companys pays its suppliers. As lo$er turno,er is better so 213s turno,er is better than 214.

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(.1.14 Payable "eferral Period

2014 2013

0.00

200.00

400.00

600.00

800.00

1000.00

1200.00

Paya"le #e$erral Period

Payable deferral period means the acti,ity ratio that measures ho$ $ell a business is mana!in!

its accounts payable. A,era!e payable period in 213 $as 124.&/ days and in 214 it is *"-.*4

days calculated by 3&" di,ided by payable turno,er. 'he lo$er the ratio= the %uicer the business

pays its liabilities but hi!her numbers of days are better.

(.1.1% Current ,atio

2014 2013

0%

20%

40%

60%

80%

100%

1.05 1.05

Current Ratio

'he current ratio is a $idely used measure for e,aluatin! a companys li%uidity and shortBterm

debtBpayin! ability. 'he hi!her ,alue of current ratio the more li%uid the firm is and more ability

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to pay its liability. A ratio 2D1 is considered satisfactory. In both years its current ratio is 1." that

indicates this company does not ha,e %uite enou!h ability to meet up its current liabilities.

(.1.1) uic ,atio

2014 2013

0.50

0.52

0.54

0.56

0.58

%uick Ratio

'he %uic (acidBtest) ratio is a measure of a companys immediate shortBterm li%uidity. A ratio

1D1 is considered satisfactory. A hi!her ratio does not mean it is !ood nor lo$er ratio is bad. 'he

%uic ratio is ."2 in 214 and ."* in 213. 'hese ratios indicate the company does not ha,e the

enou!h ability to reco,er the current liabilities. It can be also said that the li%uidity position of the

company is bad.

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(.1.1* Cash ,atio

'he cash ratio .- in both years is representin! that the cash and maretable ratio is .- !reater than current liabilities and it is not !ood enou!h to meet up the companys current liabilities

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+. Conclusion

'he :oard of #irectors has recruited ey= hi!h %uality staff= $ith a pro,en successful tracrecord in the industry and has been inno,ati,e in business mana!ement. Additionally= the :oardof #irectors $ill ensure effecti,e interaction $ith !o,ernment bodies at all le,els $ith a ,ie$ toincreasin! profitability and efficiency.

:an!ladesh is a maret of 13 million people and the local maret as $ell as the eport maret ishi!hly increasin!. Ambee Pharmaceuticals


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1&. ,eferences

• httpDJJ$$$.ambeepharma.comJambeeJcomments.htmlQtop• httpDJJ$$$.ambeepharma.comJambeeJaboutus.html• httpDJJ$$$.ambeepharma.comJambeeJfactory.html• httpDJJ$$$.ambeepharma.comJambeeJcompRhist.html• httpDJJ123.4/.4&.1"-JreportsJAnnualK2+eportsJ@e$JPharmaK21JAmbee

K2PharmaceuticalsJAmbeeK2PharmaceuticalsK2K2214.pdf

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http://www.ambeepharma.com/ambee/comments.html#tophttp://www.ambeepharma.com/ambee/aboutus.htmlhttp://www.ambeepharma.com/ambee/factory.htmlhttp://www.ambeepharma.com/ambee/comp_hist.htmlhttp://123.49.46.158/reports/Annual%20Reports/New/Pharma%2001/Ambee%20Pharmaceuticals/Ambee%20Pharmaceuticals%20%202014.pdfhttp://123.49.46.158/reports/Annual%20Reports/New/Pharma%2001/Ambee%20Pharmaceuticals/Ambee%20Pharmaceuticals%20%202014.pdfhttp://www.ambeepharma.com/ambee/comments.html#tophttp://www.ambeepharma.com/ambee/aboutus.htmlhttp://www.ambeepharma.com/ambee/factory.htmlhttp://www.ambeepharma.com/ambee/comp_hist.htmlhttp://123.49.46.158/reports/Annual%20Reports/New/Pharma%2001/Ambee%20Pharmaceuticals/Ambee%20Pharmaceuticals%20%202014.pdfhttp://123.49.46.158/reports/Annual%20Reports/New/Pharma%2001/Ambee%20Pharmaceuticals/Ambee%20Pharmaceuticals%20%202014.pdf

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