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Business Performance of Valeant Group | Dissertation

   

Added on  2020-02-14

33 Pages10115 Words49 Views
Dissertation: Topic: To analyse the business andfinancial performance of Valeant Group1

AcknowledgementI wants to show my special thanks and gratitude to all my mentors and team members whoprovided insight and expertise to carrying out the investigation in an appropriate manner. I wouldlike to thank my friends and each and every person who supported and guided me at every point.Furthermore, special and grateful thanks to my tutor who assisted me on several complex issues andproblems which I faced during the course of research. With the help of all the members, it becamepossible for me to conduct the whole study and attain research aims and objectives. In addition tothis, I like to express my gratitude to other members who provided me adequate support in the datacollection process, by which, I became able to resolve the research issue and attain goals. 2

AbstractEvery organization carry out their operations in order to gain maximum yield on theirturnover. Therefore, it is essential for the firms to examine and analyse their operationalperformance and financial strength on a regular basis. So that, better quality of decisions can betaken for improving future performance such as profitability, liquidity and solvency position. Theobjective of this dissertation is interpreting the financial performance of Valeant Group andcompare it with its rivalry, Glaxosmith Kline. It has been done through the use of ratio analysistechnique, in which, different type of ratios has been calculated and compared to evaluate theresults. From the dissertation, it has been concluded that GSK has performed much well as compareto Valeant Group as it has larger return, good creditworthiness, higher managerial efficiency andless investment risk. Therefore, It has been inferred that Valeant Group's managers has to framesome better strategies and take decisions for bringing significant improvements in the futureperformance. So that, it can enhance its competitive strength and assure long run sustainability. 3

Table of ContentsCHAPTER 1: INTRODUCTION ........................................................................................................51.1 Background of the study ...........................................................................................................51.2 Research aims and objectives....................................................................................................51.3 Research questions ....................................................................................................................61.4 Rationale of the study ...............................................................................................................61.5 Significance and scope of the study ..........................................................................................61.6 Structure of dissertation ............................................................................................................6CHAPTER 2: LITERATURE REVIEW..............................................................................................82.1 Introduction................................................................................................................................82.1 Impact of financial performance on decision making process of investors...............................82.2 Different factors considered by stakeholders for the evaluation of monetary risk....................92.3 Limitation of ratio analysis......................................................................................................102.4 Financial information that supports decision-making for shareholders and investors............12CHAPTER 3- RESEARCH METHODOLOGY................................................................................133.1 Introduction..............................................................................................................................133.2 Research philosophy................................................................................................................133.3 Research approach...................................................................................................................133.4 Research design.......................................................................................................................143.6 Collection of data.....................................................................................................................143.7 Analysis of data........................................................................................................................153.8 Ethical consideration................................................................................................................163.9 Limitation of the study.............................................................................................................163.10 Time frame.............................................................................................................................16CHAPTER 4 – DATA ANALYSIS AND FINDINGS........................................................................184.1 Introduction..............................................................................................................................184.2 Data findings and interpretation..............................................................................................18CHAPTER 5: CONCLUSION AND RECOMMENDATIONS........................................................295.1 Conclusion ..............................................................................................................................295.2 Recommendations....................................................................................................................29REFERENCES...................................................................................................................................31APPENDIX........................................................................................................................................334

CHAPTER 1: INTRODUCTION 1.1 Background of the study Financial performance is the measure which serves information regarding the effectivenessof business organization in relation to making use monetary resources. By considering such aspectinvestors and other stakeholders make assessment of the financial performance of firm with the toaim to get information regarding its profitability, liquidity and solvency aspect. Through this,stakeholders are able to make suitable decisions in relation to the investment aspect. Moreover, highvalue addition in money is one of the main objectives of investors behind investing money in thefirm's operations (Guogang, 2010). In this regard, ratio analysis is the most effectual tool whichoffers opportunity to the investors to make assessment of the financial performance of the firm inagainst to the competitors. On the basis of this aspect, by making analysis of financial aspectsinvestor can decide about the companies in which they need to invest money. For this dissertation, Valeant Group has been selected which is one of the leading andmultinational pharmaceutical company. It manufactures and offers generic pharmaceutical and over-the-counter products to the customers. Thus, the present report will shed light on the extent to whichfinancial performance of Valeant Group is sound in comparison to GlaxoSmithKline. So that,effective decisions can be taken by the management to enhance the potential performance of theValeant Group and reach goals. Further, this dissertation will also shed light on the financialposition of Valeant Group which provides assistance to the stakeholders in making most profitabledecision. 1.2 Research aims and objectivesThe main aim of the present study is to analyze the business and financial performance ofValeant Group with its competitor, GlaxosmithKline (GSK). In order to accomplish this aim, thestudy will focus on the following target objectives, mentioned below: To provide stakeholders with the valuable financial information which helps them in makingsuitable decisions. To give suitable information to the investors about the financial performance of Valeantgroup.To evaluate the financial position of Valeant group in against to its competitorGlaxoSmithKline.To recommend the ways through which Valeant group can enhance or revitalize its financialperformance. 5

1.3 Research questions Q.1 Which factors are considered by stakeholders for the evaluation of monetary risk?Q.2 Which kind of information is undertaken by investors of Valeant group before makinginvestments?Q.3 Which business unit has made optimum use of its financial resources either Valeant group orGlaxoSmithKline?1.4 Rationale of the study The main reasons behind conducting such study to evaluate business and financialperformance of Valeant group. Moreover, earning high income in the form of dividend is one ofthe main objectives of investors behind making investment. In the absence of valuable frameworkit is highly difficult for the investor in relation to making decision regarding the firm in which theyneed to invest money. Thus, to resolve such issue ratio analysis tool will be employed by the scholar(Healy and Palepu, 2012). Hence, by making comparison of the financial position and performanceof Valeant group in against to GlaxoSmithKline scholar can provide stakeholders with valuableframework for decision making. 1.5 Significance and scope of the study The present study and its outcome are highly significant for the scholars who will conductstudy on such topic. By taking assistance of such study another scholars are become able to carryout their study more effectually. Further, Valeant group can also make use of this study for gettinginformation about their financial performance in against to the competitor (Kallala and et.al., 2015).In this way, such study will offer high level of benefits to scholars, company itself and theircompetitors. Further, scope of the present study is very wide in which researcher will make analysis ofthe annual statements of both Valeant group and GlaxoSmithKline. Hence, by evaluating thefinancial statements of both the companies researcher can fulfil his aims and objectives to thesignificant level. 1.6 Structure of dissertation Chapter 1: Introduction In the first chapter of dissertation, background, rationale and significance of the study hasbeen discussed by the scholar. By gaining insight about the topic researcher will frame aims andobjectives for carry out whole study in the right direction. Chapter 2: Literature review The main aims of scholar behind doing this chapter is to gain deeper insight about the6

research topic or issue. Thus, for fulfilling such aim in this chapter of dissertation scholar makesassessment of secondary sources such as books, journals and other scholarly articles. In this way,such section helps researcher in preparing thesis for further analysis. Chapter 3: Research methodology Under this chapter, researcher determines approaches and philosophies which will beundertaken by him for carry out the study. In this, researcher also assesses the techniques which willbe used by him for data collection and analysis. Chapter 4: Data analysis and findings In the fourth chapter of dissertation, researcher will analyze gathered data by taking intoaccount the suitable tools and techniques according to the type of investigation. Chapter 5: Conclusion and recommendationsIn the last chapter, researcher conclude all the findings in a brief manner. Further, scholarwill also recommend the ways through Valeant group can enhance its financial performance. 7

CHAPTER 2: LITERATURE REVIEW2.1 IntroductionLiterature review is the most important chapter of dissertation as it depicts detail informationrelated to particular topic. This includes information from different sources such as journals, booksand online article. It facilitates researcher to reach at valid outcome in the light of research aim andobjectives. The current investigation on analysing the business and financial performance of ValeantGroup with GlaxoSmithKline, secondary information have been collected on the basis of themes.These themes are prepared in accordance with research aim and objectives so that researcher gaindeep understanding on topic under investigation. First of all, factors considered by stakeholders forthe evaluation of monetary risk will be analysed which aids to extracting valid outcome of thestudy. On the other hand, information searched by investors before making any kind of investmentwill be assessed effectively.2.1 Impact of financial performance on decision making process of investorsFinancial performance of any organization plays important role for investors in taking rightdecision. According to Altman and Hotchkiss (2010) financial performance of business of providebasic idea regarding organization that how effective return is generated and how the firm is keepingpace with changing scenario. This assists investors to get detail information related to quantitativedata. For example, investors will assess the financial statements published by organization in thepublicly available articles. This will be effective to conduct detail analysis of company andaccordingly help in taking right decision. Ongore and Kusa (2013) argued that only financialinformation is not sufficient because business is affected by several internal and external aspectwhich must be considered by investors. This is because an organization performing good in currentstate of time might be in loss in near future. Owing to this, information related to qualitative aspectis also necessary. He further argued that financial analysis basically covers use of financialstatements where investors follow the logical and consistent accounting procedure for collection ofimportant information.Demyanyk and Hasan (2010) stated that income statement and balance sheet are twoimportant important statement which are used by investors for taking appropriate decision related toinvestment in an organization. By using balance sheet investors come to know about total liabilitiesand owner' equity which reflects total assets. This in turn investors easily analyse the potential datawhich are associated with financial performance of business. Furthermore, income statement showsprofit and loss of firm over a specific period. This tends to extract meaningful information so thataccordingly investment decision can be taken in relatively less time span. It can be critically8

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