TABLE OF CONTENTS

EXECUTIVE SUMMARY............................................................................................ 1

INTRODUCTION.......................................................................................................... 2

OVERVIEW OF PHARMACEUTICAL INDUSTRY............................................... 3

OVERVIEW OF SQUARE PHARMACEUTICALS LIMITED.............................. 4

THEORETICAL FRAMEWORK................................................................................ 5
(I) Financial Ratio Analysis......................................................................... 5
(II) Common Size Financial Statements........................................................

FINANCIAL RATIOS.................................................................................................... 9

Liquidity Ratio.................................................................................................... 9
(i) Current ratio............................................................................................ 9
(ii) Quick ratio............................................................................................... 9
(iii) Cash ratio............................................................................................... 10
(iv) NWC to assets........................................................................................ 11
(v) Interval Measure................................................................................... 12
(vi) Accounts Payable Turnover..................................................................12
(vii) Cash Debt Coverage...............................................................................13

Profitability Ratios............................................................................................14
(i) Profit Margin..........................................................................................14
(ii) Operating Profit Margin.......................................................................14
(iii) Return on assets.....................................................................................15
(iv) Return on equity....................................................................................16
(v) Payout Ratio...........................................................................................17
(vi) Plowback Ratio..................................................................................... 18
(vii) Growth in equity from plowback ........................................................18

3. Efficiency Ratios............................................................................................ 19
(i) Total Asset turnover ..............................................................................19
(ii) Average Collection Period......................................................................20
(iii) Account Receivables Turnover..............................................................20
(iv) Day sales in Inventory............................................................................ 21
(v) Inventory Turnover.................................................................................22
(vi) Sales to net working capital....................................................................22
(vii) Fixed Asset Turnover..............................................................................23
(viii) Average Obligation Period......................................................................24
(ix) Cash Dividend Coverage.........................................................................24
 4. Leverage Ratios..............................................................................................25
(i) Long term debt ratio............................................................................. 25
(ii) Long term Debt-equity...........................................................................26
(iii) Total Debt Ratio......................................................................................27
(iv) Asset to Equity Ratio..............................................................................27
(v) Times-interest-earned ........................................................................... 28
(vi) Cash Coverage Ratio............................................................................. 29
(vii) Retained Earnings To Total Assets Ratio.............................................30
(viii) Non Current Assets To Non-Current Liabilities..................................30
(ix) Operating Leverage................................................................................31

5. Market Ratio................................................................................................... 32
(i) Earning Per Share....................................................................................32
(ii) Price-earnings ratio................................................................................. 33
(iii) Dividend Price Share...............................................................................34
(iv) Dividend yield ..........................................................................................34
(v) Market to book ratio ...............................................................................35
(vi) Cash flow per share of common stock....................................................36

COMMON SIZE INCOME STATEMENT ANALYSIS.............................................37

COMMON SIZE BALANCE SHEET ANALYSIS..................................................... 38

HORIZONTAL ANALYSIS OF STATEMENTS........................................................40

TREND ANALYSIS........................................................................................................43
Income Statement..............................................................................................43
Balance Sheet.....................................................................................................44

CONCLUSION................................................................................................................46

APPENDIX 1: CONSOLIDATED BALANCE SHEET............................................. 47

APPENDIX 2: CONSOLIDATED INCOME STATEMENT.................................... 48