Operating income was $22.0 million in 2011 compared to $24.7 million in 2010, a decrease of 11%. The lower operating income in 2011 reflects lower gross margin and higher operating expenses.
For the year ended December 31, 2011, the Company paid income tax at a rate of approximately 15%. Income tax expense for the year ended December 31, 2011 was $3.4 million. While for the year ended December 31, 2010, our income tax was at a rate of approximately 11%, and our income tax expense was $2.7 million for the year ended December 31, 2010. The Company obtained "National High-Tech Enterprise" status from the PRC government in the fourth quarter of 2010. With this designation, the Company is entitled to a preferential tax rate of 15% from 2011 until 2013, which is notably lower than the statutory income tax rate of 25%.
Net income for the year 2011 was $19.3 million, or $0.44 per basic and diluted share, compared to $23.4 million, or $0.54 per basic and diluted share in 2010.
Financial ConditionAs of December 31, 2011, the Company had cash and cash equivalents of $4.1 million compared to $3.7 million as of December 31, 2010. Year-over-year, working capital increased to $97 million in 2011 from $79 million in 2010 and the current ratio rose to 8.0 times from 7.1 times.
Accounts receivable balance rose to $69.7 million in 2011 from $61.9 million at the end of 2010. The Company's management team continues to be focused on improving accounts receivable collection and expects to make further progress in the quarters to come.
For the year ended December 31, 2011, cash flow from operating activities was $5.2 million, as compared to $7.8 million in 2010. Most of this decline were due to lower net income and higher working capital usage from higher inventory levels and lower accounts payables in 2011 compared to 2010.
"In 2012, we anticipate adding new higher-margin revenue streams from our upcoming new produc
|SOURCE China Pharma Holdings, Inc.|
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