Corporate Finance North South University Report

An Analytical Report On The Performance
Of Grameenphone Ltd. & Orion Pharma Ltd.

For the period 2012-2014
& Forecasted Five Year Onwards.
Corporate Finance
FIN 440.10
A Corporate Finance Report
An Analytical Report on the

Performance of
Grameenphone Ltd.
& Orion Pharma Ltd.
For the period 2012-2014 & forecasted
data of five year onwards
Course: Corporate Finance
Course ID: FIN 440
Section: 10
Date of Submission: 18th December,2016.
Submitted to:
Mr. F J Mohaimen
Lecturer,
Department of Accounting & Finance,
School of Business & Economics,
North South University.
Prepared by:
Asma-Ul-Husna 132 0374 030
Anik Ahamed 132 0539 030
Ikra Binte Islam 132 0567 030
Md. Nasir Uddin 141 0512 030
Ifraha Fairuz Binte Ilias 142 0352 030
FIN440.10 Page 1
LETTER OF TRANSMITTAL
December 18, 2016.
Mr. F J Mohaimen
Lecturer,
Department of Accounting & Finance,
School of Business & Economics,
North South University.
Respected Sir,
In response to the project we were given as a part of our Corporate Finance (FIN440) course
we have prepared this report. Here we have analysed several aspects of the Grameenphone
Ltd. and Orion Pharma Ltd., focusing mainly on the information we gathered from the
financial statements, course materials and class lectures.
We request you to accept our report and hope it meets your expectations.
Regards,
Asma-Ul-Husna
Anik Ahamed
Ikra Binte Islam
Md. Nasir Uddin
Ifraha Fairuz Binte Ilias
FIN440.10 Page 2
ACKNOWLEDGEMENT
This report is made possible through the help and support from everyone, including:
parents, teachers, family, friends, and the Almighty Allah.
We would like to take this opportunity to express our profound gratitude and deep
regard to Mr. F J Mohaimen for the chance to do this project. We would also like to thank
him for his exemplary guidance, valuable feedback and constant encouragement throughout
the duration of the project. His valuable suggestions were of immense help throughout our
project work. His perceptive criticism kept us working to make this project in a much better
way. Working under him was an extremely knowledgeable experience for us.
We are grateful to our group mates for their support and hard work throughout this
project.
FIN440.10 Page 3
TABLE OF CONTENTS
LETTER OF TRANSMITTAL........................................................................................................... 2
ACKNOWLEDGEMENT .................................................................................................................... 3
EXECUTIVE SUMMARY ................................................................................................................... 6
COMPANY OVERVIEW .................................................................................................................... 7
Grameenphone Ltd. .................................................................................................................................. 7
Orion Pharma Ltd. ..................................................................................................................................... 7
RATIO ANALYSIS .............................................................................................................................. 8
Liquidity Ratio ............................................................................................................................................ 9
Debt Ratio ................................................................................................................................................... 13
Coverage Ratio .......................................................................................................................................... 17
Activity Ratio ............................................................................................................................................. 19
Profitability Ratio .................................................................................................................................... 20
Market Ratios ............................................................................................................................................ 25
FREE CASH FLOW........................................................................................................................... 27
Grameenphone Ltd. ................................................................................................................................ 27
Orion Pharma Ltd. ................................................................................................................................... 28
BETA COEFFICIENT OF THE COMPANIES .............................................................................. 30
FIN440.10 Page 4
WEIGHTED AVERAGE COST OF CAPITAL: WACC ................................................................ 31
Grameenphone Ltd. ................................................................................................................................ 32
Orion Pharmaceutical Ltd. ................................................................................................................... 32
VALUE OF THE COMPANY ........................................................................................................... 33
NPV Calculation ...................................................................................................................................... 33
Grameenphone Ltd.: ........................................................................................................................... 33
Orion Pharma Ltd.:.............................................................................................................................. 33
Analysis ................................................................................................................................................... 33
REPRICING COMPANY SHARES ................................................................................................. 34
Share Price as Calculated .................................................................................................................. 34
Grameenphone Ltd. ............................................................................................................................ 34
Orion Pharma Ltd. ............................................................................................................................... 34
Analysis ................................................................................................................................................... 34
Comparing Share Price ...................................................................................................................... 35
Grameenphone Ltd. ............................................................................................................................ 35
Orion Pharma Ltd. ............................................................................................................................... 35
Analysis ................................................................................................................................................... 35
INVESTMENT DECISION & RECOMMENDATIONS ............................................................... 36
CONCLUSION ................................................................................................................................... 37
REFERENCES.................................................................................................................................... 38
APPENDIX......................................................................................................................................... 39
FIN440.10 Page 5
EXECUTIVE SUMMARY
The report has been formed based on the stated guidelines in order to grasp the core
knowledge of corporate finance and its implications to analyse the sustainability and compare
overall performance between two companies. In the project we were assigned with
Grameenphone Ltd. and Orion Pharma Ltd. As both of the companies are enlisted in Dhaka
Stock Exchange (DSE), to analyse the financial data, we collect both of the companys most
recent financial statements. In terms this project, 2014 annual financial statement is
considered as the most recent one and previous two years are also taken under consideration
for the calculations.
The project is a key requirement for the Corporate Finance [FIN 440] Course. As per the
guideline, it contains the analysis of both of the companys ratios; the estimated Free Cash
Flow (FCF) for next five years and Weighted average Cost of Capital (WACC) for both of
the companies, analysis of Beta co-efficient, valuation of company, restated share price and
finally an over-all investment decisions for the investors. The project mainly contains
comparison between the actual values and the calculated values to make it analytically more
informative. In conclusion some analytical criticism and recommendation is also there.
FIN440.10 Page 6
COMPANY OVERVIEW
Grameenphone Ltd.
Grameenphone Ltd. (GP) today is apparently the largest mobile telecommunication industry
in Bangladesh. It operates its function with an aim to accomplish two principal targets.
Firstly, as with other commercial organizations, it operates in such a manner that it receives a
good economic development of the country in making telecommunication a popular medium
for exchange of information. GP holds the largest number of customer base throughout the
country. It is therefore imperative to get to the customers to know their impression on the
services of this important communication medium.
Its a Joint Venture between Grameen Telecom Corporation

and Telenor of Norway, a leading international
telecommunication company which holds 55.8% shares of
Grameenphone. Grameen Telecom (GTC) owns 34.2%
shares and the remaining 10% shares owned by general,
retail and institutional investors. Inspired by the Grameen Bank's microcredit model, Mr.
Iqbal Z. Qadir, currently the Founder and Director of the Legatum Centre for Development
and Entrepreneurship, originally adapted the concept of initiating universal telephone
coverage to Bangladesh.
Orion Pharma Ltd.
Orion Pharma Ltd. is one of the premier pharmaceutical

companies of Bangladesh which has been contributing to
improving the human health care of the country by providing
quality branded-generic pharmaceuticals. Orion Pharma Ltd.,
always believe in 'Quality never ends' and refuse to settle for
anything until it exceeds the existing standard. For this, Orion
Pharma Ltd. has been superseding the market growth consistently by wide margin in last few
years. The company has been awarded with the ISO-9001: 2000 Certificate in January 2003
for serving its valued customers with products of excellent quality. Having four decades of
vast experience imbibed with technical and professional expertise, now Orion Pharma Ltd.
FIN440.10 Page 7
RATIO ANALYSIS
Financial ratios are useful indicators of a firm's performance and financial situation. Financial
ratios can be used to analyse trends and to compare the firm's financials to those of other
firms. Ratio analysis is the calculation and comparison of ratios which are derived from the
information in a company's financial statements. Financial ratios are usually expressed as a
per cent or as times per period. Ratio analysis is a widely used tool of financial analysis. It is
defined as the systematic use of ratio to interpret the financial statements so that the strength
and weaknesses of a firm as well as its historical performance and current financial condition
can be determined. The term ratio refers to the numerical or quantitative relationship between
two variables. With the help of ratio analysis conclusion can be drawn regarding several
aspects such as financial health, profitability and operational efficiency of the undertaking.
Ratio points out the operating efficiency of the firm i.e. whether the management has utilized
the firms assets correctly, to increase the investors wealth. It ensures a fair return to its
owners and secures optimum utilization of firms assets. Ratio analysis helps in inter-firm
comparison by providing necessary data. An inter-firms comparison indicates relative
position. It provides the relevant data for the comparison of the performance of different
departments. If comparison shows a variance, the possible reasons of variations may be
identified and if results are negative, the action may be initiated immediately to bring them in
line. Yet 12 another dimension of usefulness or ratio analysis, relevant from the View point
of management is that it throws light on the degree efficiency in the various activity ratios
measures this kind of operational efficiency.
Liquidity Activity Profitability Solvency Market

Ratio Ratio ratio Ratio Ratio
FIN440.10 Page 8
Liquidity Ratio
Current Ratio: The current ratio indicates the ability of a company to pay its current
liabilities from current assets and thus shows the strength of a companys working capital
position. Short-term creditors or lenders are particularly interested in the current ratio since
the conversion of inventories and accounts receivable into cash is the primary source from
which the company obtains the cash to pay short-term creditors. Long-term creditors are also
interested in the current ratio because a company that is unable to pay short-term debts may
be forced into bankruptcy.
Current Ratio: Current assets/ Current Liabilities
Current Ratio
Year 2014 2013 2012
Grameenphone 0.24 0.22 0.22
Orion Pharma 2.16 0.79 0.76
Current Ratio
2.5
1.5
0.5
0
2012 2013 2014
Grameen Phone 0.22 0.22 0.24
Here graphs are representing the Current Ratio of both companies from 2012 to 2014. From
the above table we can see that current ratio of Orion Pharma Ltd. is higher than the
Grameenphone Ltd. for three consecutive years which indicates they have more cash in hand
or liquidity whereas Grameenphone Ltd. has less liquidity as they are not that much efficient
to utilize their assets. On the other hand the standard for working capital is around 2:1 and
here Orion Pharma Ltd. Has already reached that standard so they need to be more
progressive towards utilizing the assets in long run. We can suggest Grameenphone Ltd.
Company to work on their assets so that they can be able to achieve the standard in long run
otherwise they have to suffer for their loss in the long run.
FIN440.10 Page 9
Quick Ratio: The Quick ratio is the ratio of quick assets (cash, marketable securities and net
receivables) to current liabilities. Inventories and prepaid expenses are excluded from the
current assets to compute quick assets because they might not be readily convertible into
cash. Short-term creditors are particularly interested in this ratio, since it relates the pool of
cash and immediate cash inflows to immediate cash outflows.
Quick Ratio: (Current Asset-Inventories)/ Current Liabilities
Quick Ratio
Year 2014 2013 2012
Quick Ratio
2.5
1.5
0.5
0
2012 2013 2014
From the above graph, we can see that Grameenphone Ltd. has the ratio in 2012-2014 are
0.22, 0.21, 0.24 which indicates that from 2013 to 2014 they have increased their ratio a little
bit. On the other side, Orion Pharma Ltd. ratio includes 0.67, 0.70, & 2.02. From 2012 to
2014 it continued to increase the ratio. If we compare these two companies from different
industries, Orion Pharma Ltd. has higher quick ratio than the Grameenphone Ltd. which
indicates that it can pay its current debts with the help of its quick assets or assets which can
be readily converted into cash. So Orion Pharma Ltd. has the ability to beat others. We
conclude by saying that the standard quick ratio is 1:1 and Grameenphone Ltd. needs to keep
more ideal cash in their hand available so that it can pay the debts quickly.
FIN440.10 Page 10
Cash Ratio: Cash ratio is the ratio of cash and cash equivalents of a company to its current
liabilities. It is an extreme liquidity ratio since only cash and cash equivalents are compared
with the current liabilities. The cash ratio measures the extent to which a corporation or other
entity can easily liquidate the assets and also cover the short term liabilities and therefore
repay the current liabilities of short- term creditors.
Cash Ratio: Cash/ Current Liabilities

Cash Ratio
Year 2014 2013 2012
Cash Ratio
0.14
0.12
0.1
0.08
0.06
0.04
0.02
0
2012 2013 2014
The standard of Cash ratio is somewhere 1 or below 1. From the table we can see that,
Grameenphone Ltd. has the ratio in 2012 and 2013 is 0.06 which has increased in 2014(0.08).
It has increased a bit. But compared to Orion Pharma Ltd. Grameenphone Ltd. has a less ratio
in Cash. That indicates Grameenphone Ltd. does not have enough cash and cash equivalents
in hands to repay the current liabilities of the creditors whereas Orion Pharma Ltd. is in an
increased mood in Cash ratio which helps them to lead as a profitable company in these era.
Here Grameenphone Ltd. needs to take a better decision or find a better way to improve their
cash availability.
FIN440.10 Page 11
Interval Measure: The ratio is to measure the approximate number of days a company
could simply operate simply on the cash it currently has on hand. It provides the real world
metric of how many days the company can operate in terms of meeting daily operational
expenses which is a helpful tool to evaluating a companys financial health.
Interval Measure: Current Assets/ Average Daily Operating cost
Interval Measure
Year 2014 2013 2012
Grameenphone 82.50 97.79 271.34
Orion Pharma 3740.01 2204.26 1977.52
Interval Measure
4000
3500
3000
2500
2000
1500
1000
500
0
2012 2013 2014
Grameen Phone 271.34 97.79 82.5
Orion Pharma 1977.52 2204.26 3740.01
The graph representing the number of days that company could use those assets to meet all it
expenses. From the Table it is vividly seen that Grameenphone Ltd. is in a decreased trend in
terms of days which means it took 82.50days in 2014 to operate without any additional input.
On the other hand, Orion Pharma Ltd. is in an increasing trend includes 1977.52, 2204.26, &
3740.01 days to operate its expenses without any additional input. Here we can say that, both
of them belongs to completely different industries and their Current Ration, Quick Ratio, and
Cash Ratios are also different and Orion Pharma Ltd. has higher ratios in those parts so it is
pretty obvious that Orion Pharma Ltd. will take higher days to meet daily operating expenses.
FIN440.10 Page 12
Debt Ratio
Debt Ratio: The debt ratio divides a companys total debt by its total assets to tell us how
highly leveraged a company is. That means how much of its assets are financed by debt. The
higher the ratio, the greater the risk associated with the firm's operation. A low debt ratio
indicates conservative financing with an opportunity to borrow in the future at no significant
risk.
Debt Ratio = Total Debt / Total Assets
Debt Ratio
Year 2014 2013 2012
Debt Ratio
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
1 2 3 4
The graph shows the Debt ratio of both companies from 2012 to 2014.
Here we can see that Debt ratio of Grameenphone is higher than Orion Pharma Ltd. for three
consecutive years. In 2012 this ratio was 0.70 which has increased in 2013 & 2014. On the
other hand, Orin had Debt ratio of 0.48 which has decreased in 2013 & 2014.
From this we can say that Grameenphone is more leveraged than Orion Pharma. Even though
it seems that Orion Pharma Ltd. is in a better position than Grameenphone Ltd. but running in
two totally different industries there are a lot other factors thatd needed to be taken under
consideration to interpret the actual position more practically.
FIN440.10 Page 13
Debt to Equity Ratio: Debt/Equity Ratio is a debt ratio used to measure a company's
financial leverage, calculated by dividing a companys total liabilities by its stockholders'
equity. The D/E ratio indicates how much debt a company is using to finance its assets
relative to the amount of value represented in shareholders equity.
Debt /Equity Ratio = Total Liabilities / Shareholders' Equity
Debt/Equity Ratio
Year 2014 2013 2012
Debt to Equity
3.5
3
2.5
2
1.5
1
0.5
0
2012 2013 2014
Here we can see that Debt to equity ratio of Grameenphone was 2.32 in 2012 which has
increased in 2013 & decreased to some extent in 2014. On the other hand it gradually
decreased for Orion Pharma Ltd. in three consecutive years. This means Grameenphone has
been aggressive in financing its growth with debt. It seems that Grameenphone is more
riskier than Orion Pharma Ltd for investment. But there are a other factors thatd needed to
be taken under consideration to interpret the actual position more practically as they are
completely two different industries.
FIN440.10 Page 14
Long Term Debt Ratio: The ratio gives the proportion of a company's long-term debt
compared to its available capital. By using this ratio, investors can identify the amount of
leverage utilized by a specific company and compare it to others to help analyse the
company's risk exposure as generally, companies that finance a greater portion of their capital
via debt are considered riskier than those with lower leverage ratios.
Long Term Debt Ratio = Long Term Debt/ (Long Term Debt + Total Equity)
Long Term Debt Ratio

Year 2014 2013 2012
Long Term Debt Ratio

0.6
0.5
0.4
0.3
0.2
0.1
0
2012 2013 2014
The graph illustrates Long Term Debt Ratio of both companies. Here we can see that this
ratio for Grameenphone is higher than Orion Pharma Ltd. in each of three years.
Compared to Orion Pharma Ltd., Grameenphone has greater portion of their capital via debt
which turned it more risky. But jumping on a conclusion based on this may lead to a vague
idea about the actual performances of the companies as they are running in two totally
different markets.
FIN440.10 Page 15
Equity Multiplier: The ratio is used to determine the financial leverage of a company.
Commonly employed to measure the extent to which a company finances its assets with debt,
the equity multiplier is an important indicator of the financial health of a company. The
higher the equity multiplier is, the higher the level of financial leverage.
Equity Multiplier = Total Assets / Total Equity
Equity Multiplier
Year 2014 2013 2012
Equity Multiplier
5
4
3
2
1
0
2012 2013 2014
From this we can determine the financial leverage of both companies. For Grameenphone this
has fluctuated from 2012 to 2014. In term of Orion Pharma is has decreased from year 2012
to 2014.
Even though it seem that Orion Pharma is in a better position in terms of risk we cannot make
any decision based on this data. Because these are from completely different industries and
we need to take into consideration other factors as well.
FIN440.10 Page 16
Coverage Ratio
Times Interest Earned: A metric used to measure a company's ability to meet its debt
obligations. It is calculated by taking a company's earnings before interest and taxes (EBIT)
and dividing it by the total interest payable on bonds and other contractual debt. It is usually
quoted as a ratio and indicates how many times a company can cover its interest charges on a
pre-tax basis.
Times Interest Earned = EBIT/ Interest Expense
Times Interest Earned

Year 2014 2013 2012
Grameenphone Ltd. 15.75 15.66 9
Orion Pharma Ltd. 35.51 20.32 19.38
Times Interest Earned

40
30
20
10
0
2014
2013
2012
2014 2013 2012

Grameen Phone 15.75 15.66 9
Orion Pharma 35.51 20.32 19.38
The above graph illustrates the times interest earned ratio of Grameenphone Ltd. and Orion
Pharma Ltd. from the year 2012-2014.
In the year 2014, Grameenphone Ltd. had EBIT 15.75 times higher than the Interest expense,
where for Orion Pharma Ltd. it was 35.51times.But as the graph shows they had to go
through dramatic changes. From the year 2012-13 Grameenphone Ltd.s ratio was somewhat
similar, where at 2013 it rose. For Orion Pharma Ltd. The rise happened from 2012-13, but
things did not change much at 2014.
Initially it seems that Orion Pharma Ltd. is in a better position than Grameenphone Ltd. but
running in two totally different industries there are a lot other factors thatd needed to be
taken under consideration to interpret the actual position more practically.
FIN440.10 Page 17
Cash Coverage Ratio: The cash coverage ratio is useful for determining the amount of cash
available to pay for a borrower's interest expense, and is expressed as a ratio of the cash
available to the amount of interest to be paid. To show a sufficient ability to pay, the ratio
should be substantially greater than 1:1.
Cash Coverage Ratio = (EBIT+ Depreciation) / Interest Expense

Cash Coverage Ratio
Year 2014 2013 2012
Grameenphone Ltd. 21.96 21.36 12.34
Orion Pharma Ltd. 35.87 20.55 19.63
Cash Coverage ratio

40
30
20
10
0
2014
2013
2012
2014 2013 2012

Orion Pharma 35.87 20.55 19.63
The above graph illustrates the cash coverage ratio of Grameenphone Ltd. and Orion Pharma
Ltd. from the year 2012-2014.
In the year 2014, Grameenphone Ltd. had sum of EBIT & Depreciation 21.96 times higher
than the Interest expense, where for Orion Pharma Ltd. it was 35.87times. But there have
been certain changes in the scenario. From the year 2012-13 Grameenphone Ltd.s ratio saw
an upgrade, where at 2013 it did not rise much. For Orion Pharma Ltd. The rise happened
from 2014, but things did not change much at 2012-13.
Initially it seems that Orion Pharma Ltd. is in a better position than Grameenphone Ltd. but
running in two totally different industries there are a lot other factors thatd needed to be
taken under consideration to interpret the actual position more practically.
FIN440.10 Page 18
Activity Ratio
Total Asset Turnover Ratio: Total asset turnover ratio shows the amount of sales or
revenues generated utilizing per dollar of assets. It is an indicator of the efficiency with which
a company is deploying its assets.
Total Asset Turnover Ratio = Net Sales / Total Asset

Total Asset Turnover
Year 2014 2013 2012
Grameenphone Ltd. 78.57% 71.46% 78.12%
Orion Pharma Ltd. 41.03% 42.76% 37.69%
Total Asset Turnover

80.00%
60.00%
40.00%
20.00%
0.00%
2014
2013
2012
2014 2013 2012

Grameen Phone 78.57% 71.46% 78.12%
Orion Pharma 41.03% 42.76% 37.69%
The graph above illustrates the total asset turnover ratio of Grameenphone Ltd. and Orion
In 2014, every Tk. 100 worth of total asset was generating sales of Tk.78.57 for
Grameenphone Ltd. where assets of Orion Pharma Ltd was generating much lower sales of
41.03%. As it can be seen in the graph, there have not been any dramatic ups and downs for
both of the companys performance. The ration was much stable for both of the companies
throughout this three year time period.
Initially it seems that Orion Pharma Ltd. is not being able to utilize its asset as much as
Grameenphone Ltd., but jumping on a conclusion based on a single ration apparently may
lead to a vague idea about the actual performances of the companies as they are running in
two totally different markets.
FIN440.10 Page 19
Profitability Ratio
Gross Profit Margin: The gross profit margin represents the portion coming as revenue that
the company retains as gross profit. It is calculated by taking gross profit of the company and
divided it to companys total sales. Gross profit is calculated by taking company's total
revenue (equivalent to total sales) minus the cost of goods sold. Gross profit assesses a
company's efficiency at using labour and supplies
Gross profit Margin = Gross profit/sales
Gross Profit Margin
Year 2014 2013 2012
Grameenphone 69% 71% 57%
Orion Pharma 25% 26% 32%
Gross profit margin for Grameenphone in 2012 was 57%, in 2013 it was 71% and 2014 was
69%. The percentages are suggesting that the company had 57% of each Tk of sales
remaining after it has paid for its goods in 2012, 71% of each Tk of sales remaining after the
it has paid for its goods in 2013. 69% of each Tk of sales remaining after it has paid for its
goods in 2014.It has been increasing from 2012 to 2013 but slightly decreasing in year 2014
which is not desirable because the higher gross profit margin the better for the company. On
the other hand Orion pharma had a gross profit margin of 32% in 2012, 26% in 2013 and
25% in 2014 that shows that Orion Pharma Companys gross profit margin is decreasing over
the years that is not good for the company.
FIN440.10 Page 20
Operating profit margin: Operating profit margin is a margin ratio that is used to measure
a company's pricing strategy and operating efficiency. It is an indicator of what proportion of
a company's revenue is left over after paying for variable costs of production such as wages,
raw materials, etc. it is calculated by taking net profit before tax divided sales.
Operating profit margin = EBIT/Sales
Operating Profit Margin
Year 2014 2013 2012
The operating profit margin for Grameenphone was 33% in 2012, 34% in 2013 and 34% in
year 2014 which shows that this company operating in a constant level over the years. On the
other hand Orion pharmas operating profit margin was 13% in year 2012, 10% in year 2013
and 11% in 2014 that indicates operating margin of this company was decreased from 2012
which is not good because higher operating profit margin is desirable from the companies as
it suggests greater potential to derive profits and more cushion against any increase in
competition or costs.so, both the company should increase its operating margin to make their
operation more effective.
FIN440.10 Page 21
Net Profit margin: Net profit margin is the percentage of revenue left after all expenses
have been subtracted from sales. It indicates the amount of profit that a business can extract
from its total sales.
Net Profit margin = (Net income-preferred dividend)/sales
Net Profit Margin
Year 2014 2013 2012
Net profit margin for Grameenphone in 2012 was 15%, in 2013 it was 15% and 2014 was
19%. The percentages are suggesting that the company had extract 15% in 2012,2013 and
19% in 2014 from total sales.it shows that though in year 2012 & 2013 net profit margin
remain constant but in year 2014 it is increasing which was good. On the other hand, Orion
pharma had a net profit margin of 11% in 2012, 10% in 2013 and 11% in year 2014 after
deducted all expenses from sales. We can say that its profit margin was going almost constant
over the years. It should be increase over the years.
FIN440.10 Page 22
Return on Total Assets (ROA): Return on assets (ROA) is an indicator of how companies
profits are relative to its total assets. ROA gives an idea how management efficiently using its
assets to generate earnings. It is calculated by dividing a company's annual earnings by its
total assets, ROA is displayed as a percentage. Sometimes this is referred to as "return on
investment. The higher the firms return on total assets the better.
ROA = Net income/Total Assets
Return on Asset
Year 2014 2013 2012
Return on Assets
15%
10%
5%
0%
2014
2013
2012
2014 2013 2012

The above graph illustrates the return on assets ratio of Grameenphone Ltd. and Orion
In 2014, the return on assets of Grameenphone is 15% where Orion Pharma has only 4%
return on assets. However, in 2013, Grameenphone has 11% return on assets and Orion
Pharma has 4% return on assets. But in 2012, Grameenphone has 0% return from its assets
where Orion Pharma has 3% returns on its assets.
Return on assets of Grameenphone in 2014 and 2013 is better than the Orion Pharma.
However, in 2012, Orion Pharma has 3% returns on its assets. They maintain a consistent
return on assets. On the other hand, Grameenphone cannot use its assets effectively in 2012.
FIN440.10 Page 23
Return on equity (ROE): It is the amount of net income that will return as a percentage of
shareholders equity. Return on equity indicates a company's profitability by revealing how
much profit a company generates with the money shareholders have invested. Return on
equity is calculated by taking net income divided by total equity.
ROE = Net income/Total Equity
Return on Equity
Year 2014 2013 2012
Return on Equity
70%
60%
50%
40%
30%
20%
10%
0%
2014
2013
2012
2014 2013 2012

The above graph illustrates the return on equity ratio of Grameenphone Ltd. and Orion
In 2014, Grameenphone has 63% returns on equity where Orion Pharma has 6% return on its
equity. This is almost 11 times smaller than the return on equity of Grameenphone. In 2013,
return on equity of Grameenphone is 47% and the return on equity of Orion Pharma is only
6%. In 2012, we can see a different scenario. In this year Grameenphone has 0% return on its
equity where Orion Pharma has 6% returns on its equity.
From the graph we can conclude that in 2012, Orion Pharma was more efficient to use its
equity. However, in 2013-2014, Grameenphone use its equity more efficiently. In this recent
year, Grameenphone is performing better than Orion Pharma.
FIN440.10 Page 24
Market Ratios
Earnings per share (EPS): It is the portion of a company's profit allocated to each
outstanding share of common stock. Earnings per share make an indicator of a company's
profitability. It is calculated by companys earnings available to common stock divided by
number of share
EPS = Earnings available to CS / Number of shares outstanding
Earnings Per share
Year 2014 2013 2012
Earnings per share

15
10
0
2014
2013
2012
2014 2013 2012

Grameenphone 14.6658392 10.8876352 12.963615
Orion Pharma 4.239792 4.471809 4.49029
The above graph illustrates the earnings per share ratio of Grameenphone Ltd. and Orion
In 2014, earnings per share of Grameenphone were 14.67 taka where Orion Pharmas EPS
was 4.24 taka. Earnings per share of Grameenphone are almost 4 times than the EPS of Orion
Pharma. In 2013 & 2012, also the EPS rate of Grameenphone is higher than the rate of Orion
Pharma, 10.89 taka to 12.96 taka respectively where Onion Pharmas EPS rate is very low
compared to the Grameenphone.
By only analysing the data of EPS we cannot say which company is performing better. We
need to analyse the P/E ratio to take the decision. However, per share of earnings of
Grameenphone is better than the earnings of Orion Pharma.
FIN440.10 Page 25
Price-Earnings Ratio: P/E Ratio helps for valuing a company that measures its current
share price relative to its per share earnings. It indicates how much amount an investor can
expect to invest in a company in order to receive money in return of that companys earnings.
P/E = Market price per share of common stock / Earnings per share
Price Earnings Ratio
Year 2014 2013 2012
Grameenphone 23.35 16.66 12
Orion Pharma 10.38 12.79 13.62
Price Earnings Ratio

25
20
15
10
5
0
2014
2013
2012
2014 2013 2012

Grameenphone 23.3467717 16.661102 11.995111
Orion Pharma 10.37787 12.79124 13.62273
The above graph illustrates the price earnings ratio of Grameenphone Ltd. and Orion Pharma
Ltd. from the year 2012-2014.
In 2014, the P/E ratio of Grameenphone was 23.34 taka which means to earn 1 taka of return
investors have to invest 23.34 taka. That is too much high than the Orion pharma. In 2014,
the investors of Orion Pharma have to pay only 10.38 taka to earn 1 taka of return. However,
in 2013 & 2012, the ratio differences was not that much high. In those year investors almost
have to pay the same amount of money to earn 1 taka of return.
By comparing the P/E ratio, we can say that investing in Orion Pharma is more profitable
than the Grameenphone. However, probably the investors of Orion Pharma have to take more
risk than the investors of Grameenphone. Thats why investors of Grameenphone have to pay
more money to earn one taka of return.
FIN440.10 Page 26
FREE CASH FLOW
Free cash flow (FCF) or Cash flow from Assets (CFFA) is the amount of cash flow available
to investors (creditors and owners) after the firm has met all of its operating needs and has
paid for its investments in net fixed assets (NFAI) and net current assets (NCAI).
Free Cash Flow = Operating Cash Flow - NFAI - NCAI
Operating Cash Flow= [EBIT (1-Tax Rate)] Interest Paid + Depreciation
Net Fixed Asset Investment (NFAI) = Change in net Fixed asset+ Depreciation
Net Current Asset (NCAI) = Change in Current Assets -Change in (A/P+ Accruals)
Grameenphone Ltd.
Free Cash Flow

2014 2015 2016 2017 2018 2019
8,282,955,000 6,677,152,000 7,344,867,000 8,079,354,000 8,887,289,000 9,776,018,000
From the FCF calculation from the annual financial data of year 2014, we found that,
Grameenphone Ltd. had approximately 8,282,955,000/- on hand after meeting all sort of
liabilities (FCF). Based on this value we had forecasted the FCF for the coming years up to
2019.
For forecasting the future free cash flows we have taken the FCF of 2014 as the base. We
expected a 10% growth in EBIT/Change in fixed asset/Change in Current Asset/ Interest
expense. For selecting the growth rate, we wanted to take the average of the Sustainable
(46.84%) and the internal (8.29%) growth rate of the company. But the calculation gave us a
growth rate of 25.57% which is quiet unreal. Again we looked into the historical data of EPS
growth rate and found an average growth rate of 6.39%. So we assumed a 10% growth rate
which is a bit higher than the EPS and internal growth rate. For the depreciation we looked
into the historical data and found an average of 12% growth. So we used it for our
calculation.
From our forecasted statement it can be seen that the company will be having quiet a big
amount of FCF for the coming years as it already has in 2014 and it is surely good news.
Company has a big fund even after meeting all its operating needs and investments.
FIN440.10 Page 27
Free Cash Flow Calculation

All values are in TK'000
Year 2014 2015 2016 2017 2018 2019
EBIT 34,854,995 38340495 42174544 46391998 51031198 56134318
Tax Rate 40% 40% 40% 40% 40% 40%
Interest Paid 2212817 2434099 2677509 2945259 3239785 3563764
Net Income 20,912,997 20570198 22627218 24889940 27378934 30116827
Depreciation 17,656,668 19775468 22148524 24806347 27783109 31117082
OCF 38,569,665 40345666 44775742 49696287 55162042 61233909
Change in NFA -2,419,511 -2661462 -2927608 -3220369 -3542406 -3896647

Depreciation 17656668 19775468 22148524 24806347 27783109 31117082
NFAI (NCS) 15,237,157 17114006 19220916 21585978 24240703 27220435
NCAI(NWC) 15049553 16554508 18209959 20030955 22034051 24237456
FCF 8,282,955 6,677,152 7,344,867 8,079,354 8,887,289 9,776,018
Orion Pharma Ltd.
Free Cash Flow

2014 2015 2016 2017 2018 2019
225,414,526 247,955,978 272,751,576 300,026,734 330,029,407 363,032,348
From the FCF calculation from the annual financial data of year 2014, we found that, Orion
Pharma Ltd. had approximately 225,414,526/- on hand after meeting all sort of liabilities
(FCF). Based on this value we had forecasted the FCF for the coming years up to 2019.
For forecasting the future free cash flows we have taken the FCF of 2014 as the base. We
expected a 10% growth in EBIT/Change in fixed asset/Change in Current Asset/ Interest
expense. For selecting the growth rate, we wanted to take the average of the Sustainable
(4.31%) and the internal (5.20%) growth rate of the company. But the calculation gave us a
growth rate of 4.76% which is quiet low. Again we looked into the historical data of EPS
FIN440.10 Page 28
growth rate and found an average growth rate of 4.67%. So we assumed a 10% growth rate
which is a bit higher than the EPS and average growth rate. For the depreciation we looked
into the historical data and found an average of -8% growths. So we used it for our
calculation.
From our forecasted statement it can be seen that the company will be having quiet a big
amount of FCF for the coming years and it already has big amount of FCF on 2014 and it is
surely good news as the company has a big fund even after meeting all its operating needs
and investments.
Free Cash Flow
Year 2014 2015 2016 2017 2018 2019

EBIT 1,147,305,961 1262036557 1388240213 1527064234 1679770658 1847747723
Tax Rate 27.50% 27.50% 27.50% 27.50% 27.50% 27.50%
Interest Paid 404429710 444872681 489359949 538295944 592125538 651338092
Net Income 427,367,112 470103823 517114205 568825626 625708188 688279007
Depreciation 11,904,580 13333130 14933105 16725078 18732087 20979938
OCF 439,271,692 483436952 532047310 585550703 644440275 709258945
Change in -1,958,775,791 -2154653370 -2370118707 -2607130578 -2867843636 -3154627999

NFA
Depreciation 11904580 13333130 14933105 16725078 18732087 20979938
NFAI (NCS) -1,946,871,211 -2141320241 -2355185602 -2590405500 -2849111549 -3133648062
NCAI(NWC) 2160728377 2376801215 2614481336 2875929470 3163522417 3479874658
FCF 225,414,526 247,955,978 272,751,576 300,026,734 330,029,407 363,032,348
Analysis: With the above data representation its quite visible that Grameenphone Ltd. has a
much higher free cash flow than Orion Pharma Lt. So it can easily be concluded that
Grameenphone Ltd. is in a better position in terms of FCF.
FIN440.10 Page 29
BETA COEFFICIENT OF THE COMPANIES
Beta is a measure of the volatility, or systematic risk, of a security or a portfolio in

comparison to the market as a whole. Beta is used in the capital asset pricing model (CAPM),
which calculates the expected return of an asset based on its beta and expected market
returns. Beta is also known as the beta coefficient.
Beta is calculated using regression analysis, and you can think of beta as the tendency of a
security's returns to respond to swings in the market.
A beta of 1 indicates that the security's price will move with the market.
A beta of less than 1 means that the security will be less volatile than the market.
A beta of greater than 1 indicates that the security's price will be more volatile than
the market.
For example, if a stock's beta is 1.2, it's theoretically 20% more volatile than the
market.
Grameenphone 1.1889
Ltd.
1.4758 Orion Pharma

Ltd.
Beta Co-efficient derived from: www.stockbangladesh.com
Analysis: Here both of the companies have beta-coefficient that is more than 1. It means
both of the companies have a higher risk profile than the market. Grameenphone Ltd and
Orion Pharma Ltd. score a beta co-efficient of 1.1899 & 1.4758 respectively. However, high
risks are followed by higher returns. So a higher Beta coefficient shows a full possible chance
of these two companies to generate high returns from the market utilizing the risks.
FIN440.10 Page 30
WEIGHTED AVERAGE COST OF CAPITAL: WACC
Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which
each category of capital is proportionately weighted.
All sources of capital, including common stock, preferred stock, bonds and any other long-
term debt are included in the calculation. A firms WACC increases when the beta and rate of
return on equity increase as an increase in WACC denotes a decrease in valuation and an
increase in risk.
To calculate WACC, we multiply the cost of each capital component by its proportional
weight and take the sum of the results. The method of calculating WACC that we consider to
find out the WACC of the companies can be expressed in the following formula:
WACC= We*Ke + Wd*Kd ( 1 T )
Here,
We = is the weighted average of total equity.
Ke = is the cost of the capital.
Wd = is the weighted average of long-term debt.
Kd = is the cost of the debt (1 T) = is the after tax cost of debt.
As our companies do not issue the preferred stock, we do not consider the Wp*Kp (Cost of
preferred stock).
Market Price Per Share

Taken at 30 December, 2014
Grameenphone Ltd. 342.40 BDT
Orion Pharma Ltd. 44.00 BDT
FIN440.10 Page 31
Grameenphone Ltd. Orion Pharma Ltd.
WACC 15.5890% 6.1670%
Grameenphone Ltd.
After Calculating WACC of Grameenphone, we found it is about 15.589%. They issue 16%
cash dividend in 2014. Their dividend growth rate is 21.67% and the dividend of 2015 was
given as 14 TK. Their market price per share was 342.4 TK. We found their Cost of Equity is
25.76%. Tax rate is 40% and their cost of debt is 6-month-LIBOR+3.5% on average which
we collect from the report. In 2014 6-month-LIBOR rate was 0.329%. After Calculating we
found their cost of debt is 3.829%.
Orion Pharmaceutical Ltd.
After Calculating WACC of Orion Pharma, we found it is about 6.167%. They issue 15%%
cash dividend in 2014. Their dividend growth rate is 0% and the dividend of 2015 was given
as 1.5 TK. Their market price per share was 44 TK. We found their Cost of Equity is 3.41%.
Tax rate is 27.5% and their cost of debt was 20.77% on average which we collect from the
report.
FIN440.10 Page 32
VALUE OF THE COMPANY
NPV Calculation
Grameenphone Ltd. Orion Pharma Ltd.
FCF14 8,282,955,000 225,414,526

FCF 15 6,677,152,000 247,955,978
FCF 16 734,4867,000 272,751,576
FCF 17 807,9354,000 300,026,734
FCF 18 888,7289,000 330,029,407
FCF 19(+TV) 9,776,018,000 363,032,348
WACC 15.59% 6.17%
Net Present Value BDT 34,504,143,610 BDT 44,920,207,250
Growth Rate Assumption: We assumed 10% growth rate for calculating FCF but in this
part because of perpetuity we have assumed growth rate a bit lower. We assumed 7% growth
rate for both companies.
Grameenphone Ltd.:
After Calculating Free Cash Flow and WACC of Grameenphone with Net Present value
process we found the value of Grameenphone is BDT 34,504,143,610/-.
Orion Pharma Ltd.:
The Value of Orion Pharma Ltd. by calculating from next five years Free Cash Flow is
approximately BDT 44,920,207,250/-.
Analysis
After analysing values we found that Orion Pharma Ltd.s value is approximately
10416063640 higher than Grameenphone. We should also keep in mind that these two
companies are from two completely different industries. But in terms of company value
we can conclude that Orion Pharma Ltd. is in better position.
FIN440.10 Page 33
REPRICING COMPANY SHARES
Share Price as Calculated

Grameenpone Orion Pharma Ltd.
LTD.
Value of the Firm (NPV-LTL) 34,466,237,423/- 38,576,077,597/-
Number of share outstanding 1,350,300,022 2,340,000,000
Restated Share Price (per share) 25.52/- 16.49/-
Par value of both shares: 10.00/-
Grameenphone Ltd.
As previously we calculate the Net Present Value of Grameenphone Ltd. which is about Tk.
34,504,143,610/- and by subtracting it by Long Term Liability of 2014 we found Tk.
34,466,237,423/-. Their number of common stockholder outstanding is about
1,350,300,022. So by dividing the value of the company by number of shareholder
outstanding we found the intrinsic share price which is about BDT 25.52 per share.
Orion Pharma Ltd.
The value of Orion Pharma Ltd. is about 44,920,207,250/- and by subtracting it by Long
Term Liability of 2014 we found Tk. 38,576,077,597/-.The number of common stock
outstanding is 2,340,000,000. So, dividing the value of the firm by number of share
outstanding we found the share price is about BDT 16.49 per share.
Analysis
After analysing share price of both Grameenphone Ltd. and Orion Pharma Ltd. we conclude
that Grameenphone LTD. is in better position in terms of share price.
FIN440.10 Page 34
Comparing Share Price
Grameenpone LTD. Orion Pharma Ltd.

Par value of share 10.00/- 10.00/-
Market Share price 342.40/- 44.00/-
Restated Share Price 25.52/- 16.49/-
Decision Overvalued Overvalued
Grameenphone Ltd.
Grameenphone Ltd. share is currently traded at BDT 342.40/- in the market. But from
our calculation we found the share price is about BDT 25.52/-. So, market price is
overvalued.
Orion Pharma Ltd.
Its share is currently traded in market at BDT 44.00/-. From our analysis we have found that
intrinsic value of share is 16.49/-. Here, share is overvalued.
Analysis
From our analysis we found both of the Companys share price are Traded at Overvalued
Rate
We think prices are set by the movement of capital market forces: supply and demand. We
need to consider the perception of a company among the investors. Grameenpone Ltd. has
created positive image among its shareholders. It has a high demand which could explain the
higher deviation from the intrinsic value of the share compared to Orion Pharma Ltd.
FIN440.10 Page 35
INVESTMENT DECISION & RECOMMENDATIONS
In order to invest in a company an investor needs to consider number of attributes. Ratios,

market price of share, earning per share, WACC, Free cash flow are some of the important
indicators among the various factors that help an investor to come to a decision. After
analysing the report we can conclude that Orion Pharma Ltd. is one step ahead of
Grameenphone Ltd. in terms of investment. Reasons behind this are given below-
In terms of liquidity Orion Pharma Ltd. is in better position by utilizing their assets
properly.
After analysing Debt Ratio we have found that Grameenphone Ltd. has higher
financial leverage than Orion Pharma Ltd.
Orion Pharma Ltd. is more solvent. So Grameenphone Ltd. needs to focus on
increasing their solvency.
Though the profitability ratio of Orion Pharma Ltd.is not so good, there is a
possibility of growing their business.
As Orion Pharma Ltd. are newer in business, they could not effectively use their
assets and equity. Thats why their ROE and ROA ratio is very low. However, with
the passage of time, there is a possibility that they can be more effective of using their
assets and equity.
If they can adequately use their assets and equity, their profitability ratio will be
higher in the future.
On the other hand, although the EPS of Grameenphone Ltd. is very high, the investors
have to pay 23.35 taka to earn 1 taka in return. Their P/E ratio is very high. However,
though the EPS of Orion Pharma Ltd.is not so high, the investors have to pay 10.38
taka to earn 1 taka in return.
The WACC of Grameenphone Ltd. is 15.59% and the WACC of Orion Pharma Ltd.is
6.17%. That means to start a new project or to open a new business line
Grameenphone Ltd. have to bear higher cost than Orion Pharma Ltd. So, it is a benefit
for Orion Pharma Ltd.to open new business segments.
In terms of Beta Coefficient, Both of the companies have a higher risk portfolio than
the market. But Orion Pharma Ltd.is a bit riskier so those who are risk takers will
prefer to invest in Orion Pharma Ltd.
FIN440.10 Page 36
Overall the above mentioned reasons give a clear picture to go for Orion Pharma Ltd.
rather than Grameenphone Ltd. for investment. By analysing all the factors and
historical data, we can say that for the high risk taking investor, Orion Pharma
Ltd.Ltd.is the best option. And for the low risk taker, Grameenphone Ltd. is better
option as it is already an established organization.
CONCLUSION
From the above data and graphical analysis it can be concluded that, throughout all these
years both Grameenphone Ltd. & Orion Pharma Ltd. has seen many ups and downs but
overall performance has been quite satisfactory for a company that operates in such a large
scale and competitive market. There have been issues adversely affecting their performance
and creating large differences between expectation and reality. However, they have been very
active in responding, finding out errors and resolving them. They have taken several
proactive measures to ensure that the brand's good will keeps on increasing and speaks for
itself. Most of the data and graphical analysis represent favourable results that are rewards of
hard work, dedication and determination. The business strategy and policy for the near future
will be critical to its success in the long run for both of the companies.
FIN440.10 Page 37
REFERENCES
Fundamentals of corporate finance(8th Edition) Stephen A Ross Randolph W Westfield

Bradford D Jordan
Internship Reports
www.dsebd.org/
www.Investopedia.Com
www.Wikipedia.Com
http://www.grameenphone.com/
http://www.orionpharmabd.com/
https://www.stockbangladesh.com/
http://www.investopedia.com/terms/d/debtequityratio.asp
http://www.investopedia.com/terms/d/debtratio.asp
http://www.investopedia.com/terms/l/long-term-debt-to-total-assets-ratio.asp
http://www.investopedia.com/terms/e/equitymultiplier.asp
http://accountingexplained.com/financial/ratios/cash-ratio
http://www.investorwords.com/781/cash_ratio.html
https://ycharts.com/glossary/terms/cash_ratio-
http://www.investopedia.com/terms/d/defensive-interval-ratio.asp
Ihttp://www.investopedia.com/terms/c/currentratio.asp
http://www.investopedia.com/terms/q/quickratio.asp?ad=dirN&qo=relatedSearchExpand&qsr
c=6&o=40186
FIN440.10 Page 38
APPENDIX
Ratio Calculations
Ratios Orion Pharma Grameenphone
Current Ratio 0.76 0.79 2.16 0.22 0.22 0.24

Quick Ratio 0.67 0.70 2.02 0.22 0.21 0.24
Cash Ratio 0.07 0.13 0.12 0.06 0.06 0.08
Interval Measure 1977.52 2204.26 3740.01 271.34 97.79 82.50
Debt Ratio 0.48 0.40 0.37 0.7 0.77 0.76

Debt to Equity Ratio 0.74 0.62 0.58 2.32 3.34 3.17
Long-term Debt Ratio 0.36 0.24 0.28 0.51 0.45 0.55
Equity Multiplier 1.91 1.62 1.58 3.31 4.34 4.17
EBIT 1147305961 1147305961 1069109293 34,854,995,000 32,852,073,000 30,193,417,049

Interest 32313602 56455522 55171558 2,212,817,000 2,098,129,000 3,353,583,175
Times Interest Earned 35.51 20.32 19.38 15.75 15.66 9.00
Sales 10706704367 11011883248 9546322718 102,663,372,000 96,624,227,000 91,920,445,756

Total Asset 26092236843 25754200960 25329578413 130,672,825,000 135,220,644,000 117,665,352,706
Total Asset Turnover 41.03% 42.76% 37.69% 78.57% 71.46% 78.12%
EBIT 34,854,995,000 32,852,073,000 30,193,417,049 1147305961 1147305961 1069109293

Depreciation 13,748,237,000 11,968,744,000 11,206,346,880 11904580 12655242 14004539
Interest 2,212,817,000 2,098,129,000 3,353,583,175 32313602 56455522 55171558
Cash Coverage Ratio 21.96 21.36 12.34 35.87 20.55 19.63
Gross profit Margin 25% 26% 32% 69% 71% 57%

Operating profit margin 11% 10% 13% 34% 34% 33%
Net Profit margin 11% 10% 11%
ROA 4% 4% 3% 19% 15% 19%
ROE 6% 6% 6% 15% 11% 0%
63% 47% 0%
PE Ratio 10.37786818 12.79124398 13.6227267 23.34677172 16.661102 11.99511067
EPS 4.239791761 4.471809004 4.490290478 14.6658392 10.88763516 12.96361528
FIN440.10 Page 39
Supporting Data for Other Calculations
Grameenphone Ltd.
FCF Calculation
Total Depreciation: TK'000
Depreciation 13748237
Amortisation 3908431
Total Depreciation 17656668
Growth Rate of depreciation 2014 2013 2012
Total depreciation 17655668 15,339,030 13498346
Growth Rate 15% 14%

Assumed Growth Rate 12%
Change in Net Fixed Assets: 2014 2013
Net fixed assets 115,807,890 118,227,401
NFA -2,419,511
Change in Net Working Capital:
2014 2013
Current Assets 14,864,935 16,993,243
Current Liabilities 61,402,136 78,579,997
Ending NWC = -46,537,201

Beginning NWC = -61,586,754
NWC 15,049,553
NI 19803283 ROA 15.15%

TA 130672825 ROE 63.14%
TE 31364502 b 50.52%
Additional Retained
Earnings 10004905
Internal Growth Rate 8.29%

Avg. Growth rate
Sustainable Growth Rate 46.84% of EPS
Average Rate 27.57% 6.39%
NPV
CALCULATION
Terminal Value 121773448.9

Growth Rate 7%
FIN440.10 Page 40
Cash Flow at
2019 131549466.9
Co= 8282955
C01= 6677152
C02= 7344867
C03= 8079354
C04= 8887289
C05= 9776018
(NPV - LTL)/Number of share
I= 15.59 outstanding
NPV=
34504143610 25.52487363
Weighted Average Cost of Capital:
Capital Structure of the Company:
Total equity 31364502

Long-term debt 24003730
Total Capital 55368232
Dividend Growth Rate:
2014 16
2013 14
2012 14
2011 20.5
2010 12
2009 6
0.216728684
Po 342.4
D1 14
Ke 0.257616534
LIBOR 0.329
Normal 3.5
Kd 0.03829
WACC = 0.155892209 15.5892209%
FIN440.10 Page 41
Orion Pharma Ltd.
Growth Rate of Depriciation 2014 2013 2012

Total Depriciation 11904580 12,655,242 14004539
Growth Rate -6% -10%

Average Growth Rate -8%
Change in Net Fixed Assets: 2014 2013
Net fixed assets 9,818,864,151 11,777,639,942
NFA -1,958,775,791
Change in Net Working Capital:
2014 2013
Current Assets 5,978,996,049 2,836,921,684
Current Liabilities 2,263,340,900 1,281,994,912
Ending NWC = 3,715,655,149

Beginning NWC = 1,554,926,772
NWC 2,160,728,377
NI 1142158570 ROA 7.23%

TA 15797833200 ROE 8.65%
TE 13207296361 b 57.19%
Additional Retaind
Earnings 653151185
Internal Growth Rate 4.31%

Avg.
Growth
Sustainable Growth Rate 5.20% rate of EPS
Average Rate 4.76% 4.67%
Terminal Value -46800555706
Growth Rate 7%
FCF at 2019 -46437523358
CFo = 225414.526
C01 =247955.978 -46437523.36 -0.0083
C02 = 272751.576
C03 = 300026.734
C04 = 330029.407
C05 = -
46437523.36
I = 0.0617 (NPV- LTL) 38576077597
NPV =
44920207.25 Share Price 16.48550325
FIN440.10 Page 42
Weighted Average Cost of Capital:

Capital Structure of the Company:
Total equity 16551938.21
Long-term debt 5131930.561
Total Capital 21683868.77

Dividend Growth rate
2014 1.5
2013 1.5
0
Po 44
D1 1.5
Ke 0.034090909
Kd 0.2077
We 0.763329569
Wd 0.236670431
WACC = 0.061661024 6.166102408
FIN440.10 Page 43

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An Analytical Report On The Performance

Of Grameenphone Ltd. & Orion Pharma Ltd.

An Analytical Report on the

Anik Ahamed 132 0539 030

Ikra Binte Islam 132 0567 030

Md. Nasir Uddin 141 0512 030

Ifraha Fairuz Binte Ilias 142 0352 030

December 18, 2016.

Ikra Binte Islam

Md. Nasir Uddin

Ifraha Fairuz Binte Ilias

EXECUTIVE SUMMARY ................................................................................................................... 6

COMPANY OVERVIEW .................................................................................................................... 7

Grameenphone Ltd. .................................................................................................................................. 7

Orion Pharma Ltd. ..................................................................................................................................... 7

RATIO ANALYSIS .............................................................................................................................. 8

Liquidity Ratio ............................................................................................................................................ 9

Debt Ratio ................................................................................................................................................... 13

Coverage Ratio .......................................................................................................................................... 17

Activity Ratio ............................................................................................................................................. 19

Profitability Ratio .................................................................................................................................... 20

Market Ratios ............................................................................................................................................ 25

FREE CASH FLOW........................................................................................................................... 27

Grameenphone Ltd. ................................................................................................................................ 27

Orion Pharma Ltd. ................................................................................................................................... 28

BETA COEFFICIENT OF THE COMPANIES .............................................................................. 30

WEIGHTED AVERAGE COST OF CAPITAL: WACC ................................................................ 31

Grameenphone Ltd. ................................................................................................................................ 32

Orion Pharmaceutical Ltd. ................................................................................................................... 32

VALUE OF THE COMPANY ........................................................................................................... 33

NPV Calculation ...................................................................................................................................... 33

Grameenphone Ltd.: ........................................................................................................................... 33

Orion Pharma Ltd.:.............................................................................................................................. 33

REPRICING COMPANY SHARES ................................................................................................. 34

Share Price as Calculated .................................................................................................................. 34

Grameenphone Ltd. ............................................................................................................................ 34

Orion Pharma Ltd. ............................................................................................................................... 34

Comparing Share Price ...................................................................................................................... 35

Grameenphone Ltd. ............................................................................................................................ 35

Orion Pharma Ltd. ............................................................................................................................... 35

INVESTMENT DECISION & RECOMMENDATIONS ............................................................... 36

Its a Joint Venture between Grameen Telecom Corporation

Orion Pharma Ltd.

Orion Pharma Ltd. is one of the premier pharmaceutical

Liquidity Activity Profitability Solvency Market

Quick Ratio: (Current Asset-Inventories)/ Current Liabilities

Cash Ratio: Cash/ Current Liabilities

Debt Ratio = Total Debt / Total Assets

Debt /Equity Ratio = Total Liabilities / Shareholders' Equity

Long Term Debt Ratio

Long Term Debt Ratio

Equity Multiplier = Total Assets / Total Equity

Times Interest Earned

Times Interest Earned

2014 2013 2012

Cash Coverage Ratio = (EBIT+ Depreciation) / Interest Expense

Cash Coverage ratio

2014 2013 2012

Total Asset Turnover Ratio = Net Sales / Total Asset

Total Asset Turnover

2014 2013 2012

2014 2013 2012

2014 2013 2012

WACC= WeKe + WdKd ( 1 T )