Please follow the following steps to conduct the financial analysis of Pharmamax:

$1.$ Enter the attached financial statements into a New Excel and make sure that the numbers have been

entered correctly so that you may upload it after you have completed the entire assignment. $(5$ marks$)$

$2.$ Write an introduction that gives a brief outline of the Palestinian pharmaceutical sector. Include critical information regarding the industry's market size, competitive landscape, export$-$import dynamics, and regulatory frameworks. $(5$ marks$)$

$3.$ Construct a cash flow statement for Pharmamax using the attached financial statements. This needs to be done using both the direct and indirect methods. $(14$ marks$)$

$4.$ Analyse the Pharmamax attached financial statements, including the cash flow statement, using the following tools:

a$)$ Financial ratios$($all the ratios covered in class$)$ of pharmamax and those of the Palestinian pharmaceutical company of your choice. $(15$ marks$)$

b$)$ Vertical common$-$size analysis: to understand the relative proportions of account balances for each of the available years $(2021-2022).$ Compare to those of the Palestinian pharmaceutical company of your choice. $(10$ Marks$)$

c$)$ Horizontal analysis: to determine trends and patterns of growth over time for the Pharmamax company and compare to the competitor $(10$ Marks$)$

d$)$ Dupont Analysis. $(8$ marks$)$

e$)$ Z$-$score. $(8$ marks$)|$

$5.$ Interpret the company's financial performance based on ratio analysis and clarify the company's liquidity performance, operational activity, profitability, and debt in comparison with the competitive company of your choice. $(10$ marks$)$

$6.$ Given the financial statements, calculate the basic earnings per share and the dilutive eamings per share for the year ended $2022.$ Accordingly, find the weighted average number of shares outstanding, and thereafter, find the basic and dilutive EPS, given that the company also has a dilutive security represented in $15,000$ preferred stocks that pay $40\%$ of the dividends reported in the income statement and are convertible into two common stocks each. In addition to $$60,000$ of $4\mathrm{.}5\%$ convertible bonds, there is a total of $12,000$ common shares. Consider the following information: $(10$ marks$)$

Pharmamax: Consolidated statement of comprehensive income and retained earnings for the year ended $31$

December $2022$

Notes

$2022$

CU

$2021$

CU

Revenue

$6,863\mathrm{.}545$

$5\mathrm{.}808\mathrm{.}653$

Cost of sales

$(5\mathrm{.}178\mathrm{.}530)$

$(4,422,575)$

Gross profit

$1\mathrm{.}685\mathrm{.}015$

$1,386\mathrm{.}078$

Other income

$88\mathrm{.}850$

$25\mathrm{.}000$

Distribution costs

$(175,550)$

$(156\mathrm{.}800)$

Administrative expenses

$(810,230)$

$(660,389)$

Other expenses

$(106,763)$

$(100,030)$

Finance costs

$7$

$(26,366)$

$(36,712)$

Profit before tax

$654,956$

$457,147$

Income tax expense

$9$

$(270,250)$

$(189,559)$

Profit for the year

$384,706$

$267,588$

Retained earings at start of year

$2\mathrm{.}171\mathrm{.}353$

$2,003,765$

Dividends

$(150,000)$

$(100,000)$

Retained carings at end of year

$2\mathrm{.}406\mathrm{.}059$

$2\mathrm{.}171,353$

Pharmamax: Consolidated statement of financial position at $31$ December $2022$

Notes

$2022$

$2021$

$2020$

ASSETS

CU

CU

CU

Current assets

Cash

$28,700$

$22,075$

$18,478$

Trade and other receivables

$585,548$

$573,862$

$521,234$

Inventories

$57,381$

$47,920$

$45,050$

$671,629$

$643,857$

$584,762$

Non$-$current assets

Investment in associate

$107,500$

$107,500$

$107,500$

Property, plant and equipment

$2,549,945$

$2,401,455$

$2,186,002$

Intangible assets

$14$

$850$

$2,550$

$4,250$

Deferred tax asset

s

$4,309$

$2,912$

$2,155$

$2,662,604$

$2,514,417$

$2,299,907$

Total assets

$3,334,233$

$3,158,274$

$2,884,669$

LIABILITIES AND EQUITY

Current liabilities

Bank overdraft

$83,600$

$115,507$

$20,435$

Trade payables

$431,480$

$420,520$

$412,690$

Interest payable

$2,000$

$1,200$

Current tax liability

$271,647$

$190,316$

$173,211$

Provision for warranty obligations

$18$

$4,200$

$5,040$

$2,000$

Current portion of employee benefit obligations

$$

$4,944$

$4,754$

$4,571$

Current portion of obligations under finance leases

$20$

$21,461$

$19,884$

$18,423$

$819,332$

$757,221$

$631,330$

Non$-$current liabilities

Bank loan

$16$

$50,000$

$150,000$

$150,000$

Long$-$term employee benefit obligations

$19$

$5,679$

$5,076$

$5,066$

Obligations under finance leases

$20$

$23,163$

$44,624$

$64,508$

$78,842$

$199,700$

$219,574$

Total liabilities

$898\mathrm{.}174$

$956,921$

$850,904$

Equity

Share capital

$22$

$30,000$

$30,000$

$30,000$

Retained earnings

$4$

$2\mathrm{.}406,059$

$2,171,353$

$2,003,765$

$2\mathrm{.}436,059$

$2,201,353$

$2,033,765$

Total liabilities and equity

$3,334,233$

$3,158,274$

$2,884,669$