Financial Analysis and Management | AstraZeneca
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Added on 2020-01-16
Financial Analysis and Management | AstraZeneca
Added on 2020-01-16
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FINANCIAL ANALYSISAND MANAGEMENT(PART1)
TABLE OF CONTENTSTASK 1............................................................................................................................................3Analysis of financial performance of the AstraZeneca Company over the five accountingperiods using financial ratios.......................................................................................................3TASK 2..........................................................................................................................................15Limitations and problems of the current analysis......................................................................15TASK 3..........................................................................................................................................16Suggestions to AstraZeneca firm in order to improvement and enhance financial performance...................................................................................................................................................16CONCLUSION..............................................................................................................................17REFERENCES..............................................................................................................................181
TABLE OF FIGURESFigure 2Gross profit ratio................................................................................................................3Figure 3Operating profit ratio..........................................................................................................4Figure 4Net profit ratio....................................................................................................................5Figure 5Current ratio.......................................................................................................................6Figure 6Quick ratio..........................................................................................................................7Figure 7Debt to equity ratio.............................................................................................................8Figure 8Interest coverage ratio........................................................................................................9Figure 9Stock turnover ratio..........................................................................................................10Figure 10Fixed assets turnover ratio..............................................................................................11Figure 11Total assets turnover ratio..............................................................................................12Figure 12Earnings per ratio...........................................................................................................13Figure 13Return on equity.............................................................................................................142
INTRODUCTIONFinance is just like a lifeline of the every business firm because without the respectivesource a businessman cannot establish as well as exists in the industry or market. In this context,it is necessary to analyse firm’s performance in terms of several aspects such as financials,technical, operational etc. Higher the performance of in every aspect is better for the firmbecause it supports to make and create effective brand image in the segment. Along with theanalysis to manage the financial resource is also one of the key aspects of the company. Forunderstanding financial analysis and management in the current case AstraZeneca firm isselected which is a public limited company and operates in the Pharmaceutical as well asBiotechnology industry of UK. The present report shows financial performance of the chosenentity by taking base of different financial rations. In the second and third part of current studylimitations which are comes into consideration while doing the analysis and suggestion toimprove financial performance to the AstraZeneca management is described respectively.TASK 1Analysis of financial performance of the AstraZeneca Company over the five accounting periodsusing financial ratiosFor every company it is highly compulsory to analyse financial performance in theindustry by which the respective entrepreneur can assess that in which kind of direction itperforms. If there are management know financial position of the firm then able to reduce thosefinancial shortfalls which comes into existence in the past by framing effectual businessstrategies (Saunders and Cornett, 2014). The current case study is all about the AstraZenecacompany which currently provide its products and services in the Pharmaceutical andBiotechnology industry. To analyse its financial there are different measurements are available inthe in the accounting and financing world. Of the most effective measurement criteria arefinancial ratios where many types are adopted by the management. Further, liquidity,profitability, efficiency, capital structure and stock performance ratios are calculated andanalysed as below:Profitability ratiosName of ratiosFormula20122013201420152016Gross income22580204502025320062188763
Operating income81483712213741144902Net income62972556123328253499Net sales2797325711260952470823002Gross profit ratioGross income / net sales * 10080.72%79.54%77.61%81.20%82.06%Operating profit ratioOperating income / net sales * 10029.13%14.44%8.19%16.65%21.31%Net profit ratioNet income / net sales * 10022.51%9.94%4.73%11.43%15.21%Gross Profit RatioFigure 1Gross profit ratioFindings and analysisOn the basis of the gross profit ratio the AstraZeneca firm able to know that up to whichlevel there is cost of goods sold incur. In the current scenario, in the FY 2012 the company isable to generate gross profit which is 80.72% and reduce up to the accounting period 2014. It canbe said that the management has not effectual cost control methods which lead to reduce theperformance in the overall industry (Lan, 2017). After the FY 2014 the AstraZeneca generatesmore amount of profit by enhancing the sales at the end of year. In the year 2016 GP ratioincreasing from 77.61% to 82.06% which shows that company has the effective costmanagement strategies as well as methods. It can be criticised that it not having those kinds ofstrategies which supports to manage and reduce costing to produce medicines and drugs.Operating Profit Ratio4
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