Analyzing Financial Ratios to Determine Profitability in the Nigerian Pharmaceutical Sector

• Ni Li

  English

  Author

• Xing Zang

  English

  Author

Financial ratio analysis is essential since it directly impacts an organization's profitability. One of 
the most important components of the company's financial strategy is the effective selection and 
application of a suitable financial ratio. As a result, much consideration must be made when 
making such a decision. This study aims to investigate the connection between the Nigerian 
pharmaceutical industry's profitability and financial ratio analysis throughout the previous eleven 
(11) years, from 2001 to 2011. These financial ratio analyses have enormous potential to assist 
businesses in cutting expenses and increasing their capacity to generate income. The inventory 
turnover ratio (ITR), debtors' turnover ratio (DTR), creditors' velocity (CRSV), total assets 
turnover ratio (TATR), and gross profit margin (GPM) were the five (5) variables that the 
researcher employed for the analysis.

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