Financial Performance Analysis of AstraZeneca plc

Running head: FINANCE FOR DECISION MAKING
Finance for Decision Making
Name of the Student:
Name of the University:
Author’s Note

1FINANCE FOR DECISION MAKING
Table of Contents
1. Introduction..............................................................................................................................3
1.1 Rationale of the Report..........................................................................................................3
1.2 Background of the Company............................................................................................3
1.3 Main Findings...................................................................................................................4
1.4 Structure of the Report......................................................................................................4
2. Evaluation of Current Financial Performance..........................................................................4
2.1 Ratio Analysis........................................................................................................................4
2.2 Evaluation of Ratios........................................................................................................10
2.3 Limitation of Financial Ratios........................................................................................11
3. Future Investment Appraisal..................................................................................................11
3.1 Evaluation of NPV Analysis................................................................................................12
3.2 Evaluation of IRR method..............................................................................................12
3.3 Investment Appraisal Results..........................................................................................12
4. Acquisition of Other Company..............................................................................................14
4.1 Rationale of Choosing the Company...................................................................................14
4.2 Synergy Gain to the Business.........................................................................................14
4.3 Financing Needs..............................................................................................................14
4.4 Risk and Uncertainties....................................................................................................15
4.5 Implication of the Results...............................................................................................15

2FINANCE FOR DECISION MAKING
5. Conclusion..............................................................................................................................15
Reference.......................................................................................................................................17

3FINANCE FOR DECISION MAKING
1. Introduction
1.1 Rationale of the Report
The main purpose of this assessment is to analyze the financial statement of a company which
is engaged in the business of Pharmaceutical Company. The assessment would be analyzing the
financial performance of the business on the basis of key financial ratios of the company and the
same is computed for a period of five years. The company has also undertaken an investment for
which an investment appraisal is to be undertaken. The business would also be analyzing the
ability of the business to acquire another company.
1.2 Background of the Company
AstraZeneca plc is engaged in the business of Pharmaceutical business and the company is
Anglo-swedish in nature and is also considered to be a multinational company. The headquarter
of the company is situated in Cambridge and the business expends extensively on Research and
Development and the activities of the business is mainly carried out in three sites which are
Cambridge, Gaithersbury and Maryland (Astrazeneca.com. 2018). The company is known to
produce the best medicines for serious diseases. The company was formed through a merger
agreement between companies Astra AB and Zeneca Group. The profit of the business for the
year 2017 is shown to be $ 2,868 million and the same is shown to have significantly improved
over the years. This shows that the business is growing in terms of generation of profits of the
business.