Financial Analysis

Financial Analysis

[Name of the Institute]

Financial Analysis

Introduction

This paper discusses about the financial analysis of two world's leading companies, i.e. Astrazeneca and GlaxoSmithKline.Astrazenca and GlaxoSmithKline plc both beklongs to the pharmaceutical industry.The wide-ranging pharmaceutical industry wraps all the stages of the development and the distribution of drugs which are used for the medication. The pharmaceutical industry in the United Kingdom is a billion Euros industry which is cautiously controlled by the British Government.

Function

The industry of pharmaceutical balances endowing the money into the drugs creation and also generates the profit by selling them. The research and development of drugs is very much expensive which causes the pharmaceutical companies to be uncertain in supporting the research for new drug. There are many drug companies which compose the pharmaceutical industry in United Kingdom.

Oversight

The industry of pharmaceutical is carefully controlled by the Government in order to ensure that all the drugs are liberates to the public which has been tasted thoroughly. In the country of United Kingdom the food and drug Administration overseas the regulation of drugs.

Features

Like other companies pharmaceutical industry also uses the special expressions in their skills, particularly for the testing of the drug phases before liberating it to general public. This may include the announced approval, or ensuring them that the patient is participating in drug testing must knows that he / she is participating in the experiment of drug testing or the expectations or how the strong a drug can be against the condition versus the anticipation for the drug.

Stretagic Goals

The strategy of GlaxoSmithKline is proposed to convey prolong growth, minimizing the risk and also to improve the long term financial performance and maximum returns to stakeholders. The strategic goals of Glaxo are also same like AstraZeneca to create the value for the Stakeholders of the company and also perform well among all the bio pharmaceutical companies of the world. In order to achieve the goal there is need of the rapid change in GlaxoSmithKline which needs to be accelerated. GlaxoSmithKline is global and among the leading pharmaceutical companies of the world and the mission of GlaxoSmithKline is to improve the quality of the life of human being and also enabling the people to live longer, feel better and do more. GlaxoSmithKline is focusing more on the development of the new medicines by taking out continuous and ongoing research which improves the quality of life. The Astrazeneca strategic goal is to make great medicines which will increase the return of their investors and also which brings benefits for their patients however the strategic goal for the GlaxoSmithKline is to develop medicines by continuous and ongoing research and also providing benefits to the patients to improve the quality of life.

Discussion

Comparison of Financial Ratios

GlaxoSmithKline

Profitability Ratios

2012

2011

2010

2009

2008

Tax Rate

29.11

29.10

41.31

28.16

29.34

Net Margin

17.27

19.21

5.76

19.5

18.90

Asset TurnOver

0.64

0.66

0.67

0.69

0.69

Return on Assets

11.06

12.63

3.84

13.45

13.07

Financial Leverage

7.14

5.11

4.75

4.28

4.97

Return on Equity

65.96

62.19

17.30

61.67

52.46

Return on Invested Capital

16.97

20.01

4.12

19.72

16.97

Interest Coverage

9.28

10.63

4.80

11.08

8.9

Liquidity Ratios

2012

2011

2010

2009

2008

Current Ratios

0.99

1.08

1.25

1.45

1.72

Quick Ratios

0.7

0.77

0.95

1.11

1.23

Financial Leverage

7.14

5.11

4.75

4.28

4.97

Debt/Equity

2.53

1.52

1.67

1.48

1.92

Efficiency Ratios

2012

2011

2010

2009

2008

Days sale Ourstanding

74.70

75.76

78.97

82.07

88.17

Days Inventory

181.30

191.91

189.93

200.8

202.58

Payable Period

356.33

354.62

328.37

317.69

311.26

Cash Conversion Cycle

2012

2011

2010

2009

2008

Receivables Turn Over

4.89

4.82

4.62

4.62

4.45

Inventory Turn Over

2.01

1.90

1.92

1.92

1.82

Fixed Assets Turn Over

3.02

3.08

3.08

3.08

2.98

Asset Turn Over

0.64

0.66

0.67

0.69

0.69

Cash Conversion Cycle = -100.34

AstraZeneca

Profitability Ratios

2012

2011

2010

2009

2008

Tax Rate

20.59

19.01

26.38

30.19

29.39

Net Margin

21.34

29.72

24.21

22.93

19.31

Asset TurnOver

0.56

0.62

0.6

0.65

0.67

Return on Assets

11.92

18.32

14.5

14.79

12.88

Financial Leverage

2.38

2.27

2.42

2.66

2.94

Return on Equity

27.24

42.98

36.71

41.13

39.76

Return on Invested ...