AN ANALYSIS OF FINANCIAL DISTRESS CONDITION OF PHARMACEUTICALS INDUSTRY IN BANGLADESH

Author Name: 1. Sanuar Hossain 2. Md. Abdullah Al Mamun

Volume/Issue: 02/06

Country: Bangladesh

DOI NO.: 08.2020-25662434 DOI Link: https://www.doi-ds.org/doilink/12.2021-74114867/UIJIR

Affiliation:

1. Lecturer, Department of Business Administration, Bangladesh Army University of Engineering and Technology (BAUET)
2. Lecturer, Department of Business Administration, Bangladesh Army University of Engineering and Technology (BAUET)

ABSTRACT

Financial distress condition is one of the important factors for determining the market value of the firms. Investors always wanted to know the extent to which the firm is financially solvent before making investment. In this connection this paper simply introduces the financial distress condition of pharmaceuticals industry in Bangladesh. The study analyses the financial distress conditions of the pharmaceuticals industry in Bangladesh. The study includes 10 samples companies among the numbers of Pharmaceuticals Company in Bangladesh economy. The convenient random sampling method was used to take the samples from the population. The data source for this article was mainly secondary source. The Altman’s Z score model was used to determine the financial distress condition of the selected companies. The result of the Altman’s model Show that, Among the well performing companies Renetta pharmacy top of the list consisting their respective Z score values of (5.13) for 2018 and (4.46) for 2017 which is much better than the standard value (2.99). The company found to be financially healthy because Altman’s suggest the companies having Z score above 2.99 are said to be financially viable. In case of Mid-level performing company Beximco pharmacy consisting their respective Z-score values of (2.05) for 2018 and (1.89) for 2017 which is found near about to 1.81; the company is seems to be under financial risk. In case of Poor standard firms, Global pharmacy, ACME pharmacy, BEACON pharmacy financial condition are in poor standard. Their respective Z-score values for the companies are Global pharmacy (1.03) in 2018 and (1.10) in 2017 which is less than 1.81, so the companies are classified as financially unhealthy.

Key words: Financial distress, Z scores Value, Earnings per share, Financial Viability