FINANCIAL COMMUNICATION

Financial Communications at GlaxoSmithKline plc

Financial Communications at GlaxoSmithKline plc

Introduction

The paper undertakes a close inspection and analysis of GlaxoSmithKline plc (GSK) by underlying their financial communication objectives. The paper provides a thorough understanding of GSK's key users of financial communications by highlighting their individual priorities. Moreover, the paper determines possible reasons of SEC's heavy regulation requirements of published financial statements in the light of example collected from GSK's annual report.

Moreover, the paper conducts financial ratio and stock price analysis of GSK for two financial years in order to provide a recommendation to shareholders on the decision to invest in GSK. Additionally, the paper uses annual report to provide opinion on the corporate governance of GSK. Finally, the paper draws a conclusion on the overall analysis of financial communications and financial performance of GSK.

Discussion

Objectives of Financial Communications at GSK

Financial communications at GSK are based on the following objectives (GSK, 2012, p. 2):

Providing Relevant Information - Investor Relations

Being a vital part of the business strategy, financial communications allow GSK to keep a smooth and effective link with their key stakeholders. Through financial communications, GSK provides relevant information on the current business performance by addressing the concern of investors and other stakeholders. GSK is determined to design their financial communications in a manner that allows enlightening the interest of potential investors and lenders in the business by highlighting the performance of business operations and processes. Nonetheless, financial communication allows GSK to maintain healthy investor relations.

Positive Public Image - Media Relations

GSK has designed its financial communications in a manner that it can build and strengthen business relations with media. This objective may allow the company to keep connected with key business stakeholders and take immediate action or provide affirmative response on a company related affairs and news. It is instrumental in developing positive public image and earning the confidence of key stakeholders (GSK, 2012, p. 2).

Long Term Strategic Vision - Internal and Product Communication

The third financial communication objective embraced GSK with the ability to develop a long term strategic vision and communicate it with business stakeholders through -product and internal business communications. It allows the company to carefully share the key and relevant information, which may assist investors in their investment decisions. Moreover, sound financial communications can help the company to attract loyal customers (GSK, 2012, p. 2).

Main Users of GSK's Financial Communications

Financial communications are an essential corporate function that provides authentic and up-to-date corporate information on the insights and outsights of a business. It is an instrument that allows various key stakeholders to keep connected with the performance and market standing of their choice of investment. Following are the main users of GSK's financial communications (GSK, 2012, p. 2):

Government and Local Agencies

These stakeholders look into the financial communications to get an update on business profitability and accounting information so that they can tax the corporate earnings. Moreover, they need the information to take decisions regarding grants and M&A approvals.

Shareholders and Potential Investors

Since they invest money into the business, they require information about the associated ...