DuPont Analysis of Return on Common Stockholders Equity in Pharmaceutical Industry of Bangladesh

Abstract

The paper is based on performance evaluation of pharmaceutical companies in Bangladesh through measuring Return on Common Stockholder’s Equity (ROCE) by using Du Pont analysis. It means to evaluate how well a company performs. The main purpose is achieved by using five ways Du Pont decomposition. The main data is collected from the annual financial reports of Beximco, Square, Renata, GlaxoSmithKline, Far chemicals, Beacon, ACI, IBNSINA, ACI Formulations, Orion pharmaceutical companies from 2011 to 2015.Different financial ratios are evaluated such as Asset turnover ratio, EBIT margin, tax burden, interest burden, Equity multiplier/Financial leverage etc. and by comparing those results finally measure the best performance among those companies. The mathematical calculation was developed for Du Pont analysis among selected pharmaceutical companies from 2011-2015.It is most important method for measuring ROCE of companies. Du Pont analysis evaluates how well a company is operating and how profit is earned relative to sales, total assets etc. Overall analyses measure and declare the best one among selected pharmaceutical companies.