Corporate Finance Working Capital Management Shakib Shibly Promy Md. Sariful Islam

Company Profile  Founded in 1976 and based in Dhaka, Bangladesh, BPL manufactures and sells generic  pharmaceutical formulation products, active pharmaceutical ingredients and intravenous fluids.  The Company also manufactures and markets its own branded generics for almost all diseases.  The Company operates from a 20 acre site in Dhaka and currently manufacturers in Bangladesh, in regional markets such as Sri Lanka, Nepal, Bhutan, Vietnam.  Cambodia and Myanmar and in other markets overseas, principally in East Africa, Pacific Island and Central American countries and South East Asia, including Singapore and Hong Kong.

Our Mission  Each of the company's activities must benefits and add value to the common wealth of our society.  The company is accountable to each of the constitutes with whom it interact, namely: their employees, customers, business associates, fellow citizens and shareholders.

Short term 2007 Short term 2008 Current ratio = = 1.84 Current ratio = = 1.16 Ratio Analysis Current asset Current liability Current asset Current liability

Current Ratio

Current asset to sales ratio = =0.81 = 81% Current asset to sales ratio = =0.71 = 71 % Current asset Investment Policy Current asset Sales Current asset Sales

Inventory conversion period = =269 days Inventory conversion period = = days Inventory Conversion Cycle Inventory Cost of goods sold Inventory Cost of goods sold

Inventory Conversion Cycle  Inventory conversion cycle of the company shows that company takes a long time to convert raw material into finished product and then sell it.

Receivable collection period = =50 days Receivable collection period = = days Receivable collection period Receivable Credit sale

Receivable collection period  DSO of the company are almost same in two years but in 2008 the DSO was little bit lesser than in  It means that company's management took some successful steps to reduce the time of the collection of receivables.  DSO presents that the cash from the sell could not have receive until 50 days in 2007 and 45 days in 2008 after selling date.

Payable deferral period = = 49 days Payable deferral period = =47.30 days Payable deferral period Accounts payable Cost of goods sold

Payable deferral period  Payable deferral period of the company indicates that the company paid its supplier and labors within the purchase of 50 days in 2007 and 47 in

Cash Conversion cycle = ( Inventory conversion period) + (Receivable collection period) - (Payable deferral period) = =270 days Cash Conversion cycle = (Inventory conversion period) + (Receivable collection period) - (Payable deferral period) = = days Cash Conversion cycle

Cash conversion cycle  Cash conversion cycle of the company shows that the length of the time between the firms cash expenditures to pay for productive resources and his own cash receives form is long. That means the company maintain a good relationship with its credit customer. Thus the company could have increase its credit reputation.