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FINANCIAL PERFORMANCE For Pfizer & Novartis 2013-2012
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FINANCIAL PERFORMANCEFor Pfizer & Novartis
2013-2012
AGENDA• Intro
• Pfizer I.S & B.S
• Novartis I.S & B.S
• Profitability Analysis
• Liquidity Analysis
• Solvency Analysis
• Efficiency Analysis
• P/E Analysis
Intro
Top 25 Pharma companies by global sales
Pfizer I.S & B.S
Pfizer Income statement
Pfizer Balance Sheet (1)
Pfizer Balance Sheet (2)
Novartis I.S & B.S
Novartis Income statement
Pfizer Balance Sheet
Profitability Analysis
• Gross Profit Margin• Operating Profit Margin• Net Profit Margin• Return on Equity (ROE)• Return on Assets (ROA)• Earning Per Share• Quality Of Income
Gross Profit MarginGPM= Gross profit ÷ Revenues x 100
Novartis Pfizer #
67.4 80.8 2012
66.7 81.4 2013
59.8 59.8 Industry Ratio
For Each 1 $ of Net Sales the company generates 67 cent of gross profit before subtracting any
other expenses
For Each 1 $ of Net Sales the company generates 81 cent of gross profit before
subtracting any other expenses
Analysis
Operating Profit MarginOPM= Operating income ÷ Revenues x 100
Novartis Pfizer #
20.0 20.5 2012
18.5 30.5 2013
14.18 14.18 Industry Ratio
For Each 1 $ of Net Sales the company
generates 18.5 cent of Operating profit before subtracting any other
expenses
For Each 1 $ of Net Sales the company generates
30.5 cent of Operating profit before subtracting any other
expenses
Analysis
Net Profit MarginNPM= Net income ÷ Revenues x 100
Novartis Pfizer #
16.51 24.70 2012
15.60 42.65 2013
17.33 17.33 Industry Ratio
For Each 1 $ of Net Sales the company
generates 16 cent of Net Income
For Each 1 $ of Net Sales the company generates 43
cent of Net Income
Analysis
Return on Equity (ROE)ROE = Net income ÷ Total shareholders' equity x 100
Novartis Pfizer #
14.09 17.84 2012
12.79 27.94 2013
NA NA Industry Ratio
Deteriorated Improved Analysis
Return on Assets (ROA)ROA = Net income ÷ Total assets x 100
Novartis Pfizer #
7.86 7.80 2012
7.33 12.30 2013
7.71 7.71 Industry Ratio
They utilize all recourses successfully
They utilize all recourses successfully
Analysis
Earning Per Share (EPS)EPS = Net income ÷ No. of Share
Novartis Pfizer #
3.87 1.96 2012
3.71 3.23 2013
NA NA Industry Ratio
Deteriorated Improved Analysis
Quality Of Income =cash flow from operating activity / Net income
Novartis Pfizer #
1.49 1.15 2012
1.43 0.80 2013
NA NA Industry Ratio
Decreased Decreased Analysis
Liquidity Analysis
• Net working Capital • Current Ratio• Quick Ratio• Cash Ratio
Net working Capital NWC= Current assets - Current liabilities
Novartis Pfizer #
1.16 : 1 2.2 : 1 2012
1.15 : 1 2.4 : 1 2013
- - Industry Ratio
This is not a ratio this is a absolute amount It means there are no
unused assets
This is not a ratio this is a absolute amount It means there are no unused assets
Analysis
Novartis Pfizer #
3,953.00$ 35,186.00$ 2012
4,174.00$ 32,878.00$ 2013
-NA -NA Industry Ratio
This is not a ratio this is a absolute amount
referred to as simply working capital, is used
to determine the availability of a
company's liquid assets by subtracting its CL
This is not a ratio this is a absolute amount referred to as simply working capital, is
used to determine the availability of a company's liquid assets by subtracting
its CL.
Analysis
Current RatioCR = Current assets ÷ Current liabilities
Novartis Pfizer #
1.16 : 1 2.15 :1 2012
1.15 : 1 2.41 : 1 2013
1.33 1.33 Industry Ratio
That means every 1 $ of CL the company has 1.15 of CA to cover it
That means every 1 $ of CL the company has 1.41 of CA
to cover it
Analysis
Quick RatioQR = Total Quick assets ÷ Current liabilities
Novartis Pfizer #
0.76 : 1 1.90 :1 2012
0.73 : 1 1.79 :1 2013
1.22 1.22 Industry Ratio
That means every 1 $ of CL the company has
0.73 of quick CA to cover it
That means every 1 $ of CL the company has 1.79 of
quick CA to cover it
Analysis
Cash RatioCash R = Cash Assets ÷ Current liabilities
Novartis Pfizer #
0.33 : 1 1.09 :1 2012
0.34 : 1 1.38 : 1 2013
NA NA Industry Ratio
That means every 1 $ of CL the company has 0.73 of Cash to cover it
That means every 1 $ of CL the company has 1.79 of
Cash to cover it
Analysis
Solvency Analysis
• Debt Ratio• Debt to Equity• Equity Multiplier
Debt RatioDR = liabilities : assets x 100
Novartis Pfizer #
44.2% 56% 2012
41.01% 55.4% 2013
34% 34% Industry Ratio
That means that 41 % of Assets financed from
liabilities
That means that 55 % of Assets financed from
liabilities
Analysis
Debt to EquityD/E= liabilities : Equity
Novartis Pfizer #
78% 127% 2012
69% 124% 2013
34% NA Industry Ratio
-
- Analysis
Equity MultiplierEM = Assets : Equity
Novartis Pfizer #
1:8 : 1 2.2 : 1 2012
1.6 : 1 2.24 : 1 2013
NA NA Industry Ratio
Assets : Equity
Assets : Equity Analysis
Efficiency Analysis
• Total Asset Turnover• Fixed Asset Turnover• Receivables Turnover• Average Collection Period• Inventory Turnover• Inventory Days On Hand
Total Asset TurnoverTATO = Net Sales ÷ Total assets
Novartis Pfizer #
0.49 0.26 2012
0.46 0.31 2013
0.25 0.25 Industry Ratio
Each $1 invested in the total assets generates
46 cents net sales
Each $1 invested in the total assets generates
31cents net sales
Analysis
Novartis is better than Pfizer in using assets to generate net sales
Comparison Analysis
Fixed Asset TurnoverFATO = Net Sales ÷ A. Fixed assets
Novartis Pfizer #
3.4 4.12 2012
3.3 4.27 2013
2.50 2.50 Industry Ratio
Each $1 invested in fixed assets generates
$3.3 net sales
Each $1 invested in fixed assets generates $4.27 net
sales
Analysis
Pfizer is better than Novartis in using fixed assets to generate net sales
Comparison Analysis
Receivable TurnoverRTO = Net Credit Sales ÷ A. Net Receivable
Novartis Pfizer #
6.11 5.14 2012
5.81 5.46 2013
NA NA Industry Ratio
For every $1 accounts receivables the company makes $5.81credit sales
For every $1 accounts receivables the company makes $5.46 credit sales
Analysis
Pfizer is better than Novartis in using fixed assets to generate net sales
Comparison Analysis
Average Collection PeriodACP= Average Collection Period÷ A. Age of Receivable
Novartis Pfizer #
63.13 68.11 2012
62.82 66.85 2013
NA NA Industry Ratio
Company transfer Receivables from credit
customers into cash every 62.82 days
Company transfer Receivables from credit
customers into cash every 66.85 days
Analysis
Novartis is better than Pfizer in transferring Receivables into cash
Comparison Analysis
Inventory TurnoverITO= COGS ÷ A. Inventory
Novartis Pfizer #
8.39 8.11 2012
8.27 8.93 2013
NA NA Industry Ratio
Each $1 invested in the inventory generates
$8.27 net sales
Each $1 invested in the inventory generates $8.93
net sales
Analysis
Pfizer is better than Novartis in the sales’ efficiency Comparison Analysis
Inventory Days On HandIDOH= 365 ÷ A. Days supply in Inventory
Novartis Pfizer #
41.44 39.80 2012
44.14 40.87 2013
NA NA Industry Ratio
Inventory is sold every 44.14 days
Inventory is sold every 40.87 days
Analysis
Pfizer is better than Novartis in the number of times that inventory could be turned over within the year
Comparison Analysis
