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- Dividend and Free Cash Flow Ratio Analysis of Square Pharmaceutical Ltd Bangladesh (Part-7)
Dividend and Free Cash Flow Ratio Analysis of Square Pharmaceutical Ltd Bangladesh (Part-7)
- By humpty dumpty
- Published 4 February 2012
- Bangladesh Study
- Unrated
DIVIDEND RATIO ANALYSIS
Dividend per Share
Square Pharmaceuticals Limited Bangladesh had dividend per share of 44.88 BDT on average during FY 2006-2010. This ratio states the amount of dividend a firm pays on each outstanding share. The average total dividend of the company was 368,781,120 BDT and had increased by 45.17% throughout FY 2006-2010. In FY 2008 the total dividend of share of the company had decreased by 20%. In FY 2009 and 2010, total dividend had increased by 20% and 35% respectively.
The company had outstanding shares of 9,406,908 on average and had increased by 203.75% during FY 2006-2010. In FY 2008 and 2009 the outstanding number of share of the company had increased by 50% and 35%, followed by a 25% increase in FY 2010 compared to their respective previous year.
In FY 2008 and 2009 the dividend per share of the company dropped by 46.67% and 11.11%, compared to their respective previous year. But it increased by 8% in FY2010, offered a better dividend per share to it investor than FY 2009. DPS depends on firms outstanding number of shares and total dividend allotted for the shareholders. If a firm’s DPS is falling it does not mean that the firm is offering fewer dividends than before. It might reflect that the firm’s dividend growth is less than the growth of its outstanding number of shares. In case of square pharmaceuticals, the growth rate of share outstanding was greater than the growth of total cash dividend. And this caused the DPS to fall.
Dividend per Share
2006 2007 2008 2009 2010
66.96 62.50 33.33 29.63 32.00
Table of Dividend per Share Ratio for Fiscal Year 2006-2010
Payout Ratio
Square Pharmaceuticals Limited Bangladesh had payout ratio of 0.24 on average during FY 2006-2010. This ratio states how well the earning supports the dividend payment of the firm. A higher payout ratio refers that the firm have a strong backbone for its dividend and a lower payout ratio refers opposite. In FY 2008 and 2009 DPS were 33.33 BDT and 29.63 BDT. In FY 2009, it had dropped by 11.10% and in FY 2010 it had increased by 8%.
However, net sales during FY 2007 and 2008 had increased by 23.17% and 10.09% respectively, compared to their preceding year and net sales of FY 2009 had increased by 18.93% but in subsequent year its growth had dropped to 16.72%. Due to the difference situation of such growth and fall of both ratio, payout ratio fluctuated and in recent fiscal year.
Payout Ratio
2006 2007 2008 2009 2010
0.29 0.29 0.22 0.19 0.23
Table of Payout Ratio for Fiscal Year 2006-2010
Retention Ratio
Square Pharmaceuticals Limited Bangladesh had payout ratio of 0.76 on average during FY 2006-2010. This ratio shows the proportion of net income, which is not paid as dividend. In other word we could say that this ratio reflects a company’s proportion retained earnings of net income. The higher retention ratio refers that the firm have greater retained earnings than cash dividend and lower retention ratio refers opposite. In FY 2008 and 2009 retained earnings were 97,418,224 BDT and 153,140,253 BDT. In FY 2009, its growth was 29.27% and in FY 2010 it had increased by 4.52%
However, net sales during FY 2007 and 2008 had increased by 23.17% and 10.09% respectively, compared to their preceding year and net sales of FY 2009 had increased by 18.93% but in subsequent year its growth had dropped to 16.72%. The company had better figure in retention ratio for past 5 (five) fiscal years. Due to the difference between the growth of retained earnings and net profit, the retention ratio was slightly different in each fiscal year
Retention Ratio
2006 2007 2008 2009 2010
0.71 0.71 0.78 0.81 0.77
Table of Retention Ratio for Fiscal Year 2006-2010
Free Cash Flow Ratio Analysis
Free Cash Flow per Share
Square Pharmaceuticals Limited Bangladesh had FCF per share of 195.15 BDT on average during FY 2006-2010. This ratio shows a measure of a company's financial flexibility that is determined by dividing free cash flow by the total number of
shares outstanding. This measure serves as a proxy for measuring changes in earnings per share. The free cash flow per share can be used to give a preliminary prediction concerning future share prices. When a firm's share price is low and free cash flow is on the rise, the odds are good that earnings and share value will soon be on the up, because a high cash flow per share value means that earnings per share should potentially be high as well. In FY 2008 and 2009 FCF were 2,032,183,105 BDT 1,962,412,823 BDT. In FY 2009 and 2010, its reduction were 3.56% and 66.29%
However, The Company had outstanding shares of 9,406,908 on average and had increased by 203.75% during FY 2006-2010. . In FY 2009 and 2010 the outstanding number of share of the company had increased by 35% and 25% comparedto their respective previous year. Therefore, the reduction of FCF and growth of share outstanding caused the FCF per share to decrease in FY 2009 and 2010.
FCF per Share
2006 2007 2008 2009 2010
250.32 257.44 227.25 162.56 78.20
Table of FCF per Share Ratio for Fiscal Year 2006-2010
Price to FCF Ratio
Square Pharmaceuticals Limited Bangladesh had price to FCF ratio of 20.11 on average during FY 2006-2010.This ratio refers a company's market price to its level of annual free cash flow. The bigger the ratio, the more valuable the company becomes in terms of its market values. Historical report on square pharmaceuticals shows that the firm’s price of share fluctuated during FY 2006-2010 a lot. In FY 2008 and 2009, the price per share was 4,110 BDT and 2,935 BDT respectively. The price per share of FY 2009 was 28.59% less than its preceding year and it was 22.01% greater in FY 2010 than FY 2009.
In FY 2007, price to FCF ratio was highest among last 5 (five) FY. Moreover, SPS after FY 2007 begun to fall, reached the minimum at FY 2010 as stated in previous segment of ratio analysis. The FCF per share of FY 2008 was 13.28% less than its preceding year. In addition, FCF per share of FY 2009 and 2010 had decreased by 39.79% and 107.88% compared to their respective previous year. As we can see, due to a huge gap between the growth of price per share and reduction of FCF per share, price to FCF ratio began to increase which states that the company faced a tough time to balance its FCF per share with price per share.
Price to FCF Ratio
2006 2007 2008 2009 2010
9.09 9.51 18.09 18.06 45.79
Table of Price to FCF RatioRatio for Fiscal Year 2006-2010
Dividend per Share
Square Pharmaceuticals Limited Bangladesh had dividend per share of 44.88 BDT on average during FY 2006-2010. This ratio states the amount of dividend a firm pays on each outstanding share. The average total dividend of the company was 368,781,120 BDT and had increased by 45.17% throughout FY 2006-2010. In FY 2008 the total dividend of share of the company had decreased by 20%. In FY 2009 and 2010, total dividend had increased by 20% and 35% respectively.
The company had outstanding shares of 9,406,908 on average and had increased by 203.75% during FY 2006-2010. In FY 2008 and 2009 the outstanding number of share of the company had increased by 50% and 35%, followed by a 25% increase in FY 2010 compared to their respective previous year.
In FY 2008 and 2009 the dividend per share of the company dropped by 46.67% and 11.11%, compared to their respective previous year. But it increased by 8% in FY2010, offered a better dividend per share to it investor than FY 2009. DPS depends on firms outstanding number of shares and total dividend allotted for the shareholders. If a firm’s DPS is falling it does not mean that the firm is offering fewer dividends than before. It might reflect that the firm’s dividend growth is less than the growth of its outstanding number of shares. In case of square pharmaceuticals, the growth rate of share outstanding was greater than the growth of total cash dividend. And this caused the DPS to fall.
Dividend per Share
2006 2007 2008 2009 2010
66.96 62.50 33.33 29.63 32.00
Table of Dividend per Share Ratio for Fiscal Year 2006-2010
Payout Ratio
Square Pharmaceuticals Limited Bangladesh had payout ratio of 0.24 on average during FY 2006-2010. This ratio states how well the earning supports the dividend payment of the firm. A higher payout ratio refers that the firm have a strong backbone for its dividend and a lower payout ratio refers opposite. In FY 2008 and 2009 DPS were 33.33 BDT and 29.63 BDT. In FY 2009, it had dropped by 11.10% and in FY 2010 it had increased by 8%.
However, net sales during FY 2007 and 2008 had increased by 23.17% and 10.09% respectively, compared to their preceding year and net sales of FY 2009 had increased by 18.93% but in subsequent year its growth had dropped to 16.72%. Due to the difference situation of such growth and fall of both ratio, payout ratio fluctuated and in recent fiscal year.
Payout Ratio
2006 2007 2008 2009 2010
0.29 0.29 0.22 0.19 0.23
Table of Payout Ratio for Fiscal Year 2006-2010
Retention Ratio
Square Pharmaceuticals Limited Bangladesh had payout ratio of 0.76 on average during FY 2006-2010. This ratio shows the proportion of net income, which is not paid as dividend. In other word we could say that this ratio reflects a company’s proportion retained earnings of net income. The higher retention ratio refers that the firm have greater retained earnings than cash dividend and lower retention ratio refers opposite. In FY 2008 and 2009 retained earnings were 97,418,224 BDT and 153,140,253 BDT. In FY 2009, its growth was 29.27% and in FY 2010 it had increased by 4.52%
However, net sales during FY 2007 and 2008 had increased by 23.17% and 10.09% respectively, compared to their preceding year and net sales of FY 2009 had increased by 18.93% but in subsequent year its growth had dropped to 16.72%. The company had better figure in retention ratio for past 5 (five) fiscal years. Due to the difference between the growth of retained earnings and net profit, the retention ratio was slightly different in each fiscal year
Retention Ratio
2006 2007 2008 2009 2010
0.71 0.71 0.78 0.81 0.77
Table of Retention Ratio for Fiscal Year 2006-2010
Free Cash Flow Ratio Analysis
Free Cash Flow per Share
Square Pharmaceuticals Limited Bangladesh had FCF per share of 195.15 BDT on average during FY 2006-2010. This ratio shows a measure of a company's financial flexibility that is determined by dividing free cash flow by the total number of
shares outstanding. This measure serves as a proxy for measuring changes in earnings per share. The free cash flow per share can be used to give a preliminary prediction concerning future share prices. When a firm's share price is low and free cash flow is on the rise, the odds are good that earnings and share value will soon be on the up, because a high cash flow per share value means that earnings per share should potentially be high as well. In FY 2008 and 2009 FCF were 2,032,183,105 BDT 1,962,412,823 BDT. In FY 2009 and 2010, its reduction were 3.56% and 66.29%
However, The Company had outstanding shares of 9,406,908 on average and had increased by 203.75% during FY 2006-2010. . In FY 2009 and 2010 the outstanding number of share of the company had increased by 35% and 25% comparedto their respective previous year. Therefore, the reduction of FCF and growth of share outstanding caused the FCF per share to decrease in FY 2009 and 2010.
FCF per Share
2006 2007 2008 2009 2010
250.32 257.44 227.25 162.56 78.20
Table of FCF per Share Ratio for Fiscal Year 2006-2010
Price to FCF Ratio
Square Pharmaceuticals Limited Bangladesh had price to FCF ratio of 20.11 on average during FY 2006-2010.This ratio refers a company's market price to its level of annual free cash flow. The bigger the ratio, the more valuable the company becomes in terms of its market values. Historical report on square pharmaceuticals shows that the firm’s price of share fluctuated during FY 2006-2010 a lot. In FY 2008 and 2009, the price per share was 4,110 BDT and 2,935 BDT respectively. The price per share of FY 2009 was 28.59% less than its preceding year and it was 22.01% greater in FY 2010 than FY 2009.
In FY 2007, price to FCF ratio was highest among last 5 (five) FY. Moreover, SPS after FY 2007 begun to fall, reached the minimum at FY 2010 as stated in previous segment of ratio analysis. The FCF per share of FY 2008 was 13.28% less than its preceding year. In addition, FCF per share of FY 2009 and 2010 had decreased by 39.79% and 107.88% compared to their respective previous year. As we can see, due to a huge gap between the growth of price per share and reduction of FCF per share, price to FCF ratio began to increase which states that the company faced a tough time to balance its FCF per share with price per share.
Price to FCF Ratio
2006 2007 2008 2009 2010
9.09 9.51 18.09 18.06 45.79
Table of Price to FCF RatioRatio for Fiscal Year 2006-2010
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Article Series
This article is part 7 of a 8 part series. Other articles in this series are shown below:
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Dividend and Free Cash Flow Ratio Analysis of Square Pharmaceutical Ltd Bangladesh (Part-7)