Assessment of Financial Soundness: A Case Study of Beximco Pharmaceuticals Ltd

Abstract

The main objective of the study was to assess the financial soundness of Beximco Pharmaceuticals Ltd (BP L) by using Du Pont Equation &Altman's Model, The finn's management can use the Du Pont system and Altman's model to analyze ways of improving the firm's performance. By applying Altman's Model, it revealed that BPL would be financially unhealthy and would like to go bankruptcy in the near future. The main reasons for such state of affairs are shortage of adequate working capital, shortage of raw materials and their irregular supply, instability in raw material price, lack of requisite research & development activities, shortage of skilled manpower, lack of proper responsibility and accountability, limited market for products, absenteeism of workers from jobs, adverse factory environmental factors, power disruption and troubles in machinery. Therefore in order to improve the financial soundness of the company and to save it from bankruptcy proper steps should be taken to remove those reasons