Student Dissertation

Agency : Financial Performance Evaluation; Pharmaceutical; Asset Management; Market Value; Profitability; Liquidity

Objective : To assess the financial performance of the selected Pharmaceuticals firm over a period of two financial year (2015 and 2016) • performance of the companies related to liquidity ratios • performance of the companies related to Asset management ratios • performance of the companies related to Profitability ratios • performance of the companies related to Market value ratios

Background : The pharmaceutical industry have become a highly competitive, which is why performance represents the key element to stay on a market. Evaluating the performance of the economic entities from this sector is of high importance for the management, shareholders, trading partners and creditors. This study focuses on Investigating and analyzing the financial statements of two global pharmaceutical companies. The analysis is based on data from companies’ annual and financial reports. Pharmaceutical sector is one the promising & growing industry. This study attempts basically to measure the financial performance of the Bayer AG and Pfizer Inc., two of the world’s top 5 pharmaceutical companies based on revenue. In order to achieve goals, ratio analysis was done on liquidity, profitability, debt coverage, assets management and market value. From the study it is found that Bayer AG performed better than Pfizer Inc. on debt coverage and asset management whereas Pfizer comparative performance for the FY2016 in profitability and market value was significantly better than Bayer AG. On liquidity ratio parameter both the companies performed more or less same.

Methodology : Data collected was secondary, to calculate financial ratio’s for FY2015 and FY2016 for the selected pharmaceutical firms: • Balance sheet • Income statement • Cash Flow Taken from: • Annual report, 10 K filling • Company website • Internet • Confidential sources

Findings : Bayer AG was underperforming for the financial year 2015 but improved considerably owing to the changes in the capital market over the year from 2015 to 2016, it has improved considerable if one looks at its profitability, liquidity, asset management, debt ratio but it still needs to make an impact on the market value ratios. Currently, Bayer AG gives an impression of low growth but if one looks at other ratio it is seems that it is giving high returns. With a low profit margin, Bayer AG gives an high asset efficiency It is seen after careful looking at its statements that Bayer is focusing more on its annual earnings than the total annual revenue. Current standing of Bayer AG shows that in comparison to Pfizer it does have an operational advantage Bayer AG growth is on a steady increase, the price to earnings ratio is less than Pfizer which suggests that its earnings are at peak, but the market excepts a steep decline from Bayer in its growth. Pfizer Inc. has stand a solid ground since its inception, and still outperforms many and occupies a leading position in its industry. From a competitive view, Pfizer still has an edge over Bayer when it comes to profitability and market value. Pfizer employs relatively high quantities of assets while creating relatively low turnover margins. Pfizer‘s return on possessions has weakened over the last one year and is below Bayer. While Pfizer‘s returns in recent years have developed faster , the arcade gives the stock a Price earnings ratio that is more than Bayer signifying that the market has some interrogations about the company’s long-term tactic. The company’s moderately low level of wealth investment and lower peer moderate returns on assets suggest that the company is in upkeep mode.


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