Financial Analysis
Understanding how a company operates within any industry is dependent upon comprehension of many financial properties. Assessing the financial stability of a company is essential in determining the company's strengths and weaknesses as well as ultimately assessing its profitability. Financial ratios should be considered a useful tool when examining the profitability and efficiency of any company. Some companies are certainly more successful and profitable than others, and pharmaceutical companies in particular seem to have a distinct advantage when measuring financial ratios.
When assessing any organization, for terms of this paper are as follows: Johnson & Johnson, Pfizer and Merck it is important to consider the profitability and efficiency of the company. This is among the first information investors will explore before "investing" in a company. Ratio analysis is a critical analysis of the financial structure of an organization. There are four categories of ratios that need to be examined: leverage, liquidity, efficiency and profitability. These ratios are also referred to as "DuPont" ratios (MBA, 681). There are many other ratios that may be considered when evaluating a company, but for financial purposes, and for evaluating the above mentioned pharmaceutical companies the four listed ratios are most important in comparing the companies success in the market compared to other companies in the industry.
Liquidity ratios indicate how well an organization is able to basically "pay its bills" without undue hardship. A high liquidity can be a good sign, but too high of a ratio may signify that the firm is actually not efficiently operating. This will be discussed further as the pharmaceutical companies measured above are analyzed.
Leverage ratios measure the ability of an organization over...
This means that Apple is generating more cash internally than Google. Further, given the increase in cash flows from operations in the case of Apple means that the company could have an enhanced value of net income in future. When it comes to cash flows from investing activities, there is an increase in the same in the case of Apple in the current financial year in comparison to the
The projected growth rates are of 7% for 2009, 7% for 2010, 8% for 2011 and 9% for 2012 (Hoovers). Wyeth is expected to increase at higher rates due to its being taken over by Pfizer. 3. Stock Price Analysis The Wyeth stock is being currently (September 16th, 2009) traded at $47.70, revealing a 0.23 (0.48%) decrease relative to the previous trading session, which closed at $47.93. The day's high value
Financial Research Report This is a review of Caterpillar, Inc.. The report is broken down into three sections -- company overview, ratio analysis (which includes a trend analysis), stock price analysis -- that are designed to give a thorough overview of the complete company. Company Overview Caterpillar is one of the best known name brands, around the world for its manufacture of heavy machinery made, primarily, for the construction industry. The company began
This ratio eliminates the stock figure from that of current assets and like the current ratio; it is used to measure the liquidity of a firm. The quick ratio may in some instances be preferred over the current ratio as it is inherently difficult to turn some assets into cash. In regard to the two companies, the quick ratio brings out Plume Inc. As being more risky as it
Financial Ratio Analysis for Xerox Xerox Corporation is company in the field of technology and services, which is currently developing, manufacturing, marketing, and financing a whole range of document equipment, software, integrated solutions and services. They have a global network, with branches in more than 130 countries all over the world. In America, its products are distributed through divisions, subsidiaries and third-party distributors. In the rest of the world (Europe, Africa,
The price is at its level of five years ago, when the external environment was much more favorable for Starbucks. The price of arabica has increased significantly and while Starbucks is a major buyer, it is not the largest buyer and does not have significant pricing power. The competitive pressure that has been applied by McDonald's, Dunkin Donuts and a host of imitators has not eased. Given this, margins
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