University Report: Financial Analysis and Performance of Amgen Inc.

This report provides a financial analysis of Amgen Inc., a leading biotechnology company. It examines the company's revenue, expenses, and key financial indicators, including liabilities, current ratio, and free cash flow. The report highlights a decrease in revenue and changes in operating expenses, along with the company's investments in research and development. It also discusses the impact of tax rates and changes in free cash flow. The conclusion suggests that despite high debt levels, Amgen can efficiently generate free cash flow, indicating an optimal capital structure, and recommends sustainable fundraising through community-based partnerships and CSR initiatives. The report utilizes data from 2019 financial results.

Running Head: BIOTECHNOLOGY
BIOTECHNOLOGY
Name of the student
Name of the University
Author’s Note

1BIOTECHNOLOGY
Table of Contents
Introduction................................................................................................................................2
Discussion..................................................................................................................................2
Conclusion and Recommendations............................................................................................3
References..................................................................................................................................4

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Introduction
Amgen incorporation also known as AMGN INC was founded in the year 1980 and
has grown to be one of the world’s largest biotechnology companies with a capital of
US$122.46B. The company aims to serve its patients by transforming science and biology
into therapies and medicines to overcome illnesses and restore healthy lives
(Annualreports.com, 2020). Amgen success is the result of it being one of the early pioneers
that consistently worked towards innovations and strengthening the company’s financial
health.
Discussion
Large cap companies, such as Amgen Inc., are likely to have diversified revenue
structures and a good attractive returns, which make the risk averse investors invest in the
company. Amgen’s financial liquidity and its debts are analysed in order to figure out
whether the company has strong indicators that would led to constant future growth
irrespective of the economic downturns (Amgen Inc., 2020).
Amgen has liabilities of US$9.02B and has a sufficient amount of capitals to meet its
obligations. The current ratio of the company stands at 5.49x. The company has experienced
a decrease in its total revenue by 1% in the year 2019 as compare to the last year
(Annualreports.com, 2020). The total revenue of the company dropped $6.2 billion. The total
operating expenses of the company increases by 2% in the entire financial year 2019.
However, sales margin also increased by 3 percentage point in the fourth quarter and by 1.4
percentage point in the entire year (Amgen Inc., 2020).
Amgen known for its science and innovations, makes its major investments in
research and development sector, which increased to 10 per cent in the year 2019. It has seen
a major increase in the tax rate, which was 2.1 percentage point in the financial year 2019.

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Due to the change in the time of tax payments, the company experiences a fall in its free cash
flows $3 billion in the last quarter of 2018 to $2.3 billion in the fourth quarter of 2019. The
overall free cash flow in 2019 came down to $8.5 billion, experiencing a downfall of $2.1
billion as compare to the previous year (Annualreports.com, 2020).
Conclusion and Recommendations
Amgen despite having high debt levels is able to generate free cash flow and utilising
its borrowings efficiently. This implies an ideal or optimal capital structure for the company
(Amgen Inc., 2020). The company can make a sustainable fundraising by attracting more
sponsorships from community-based partnerships, besides getting funded, Amgen would also
have a good relations with the company and would enter into a CSR based relationship that
would help the company in the long run.

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References
Amgen Inc. (2020). Amgen Reports Fourth Quarter And Full Year 2019 Financial Results |
Amgen Inc.. [online] Available at: http://investors.amgen.com/news-releases/news-release-
details/amgen-reports-fourth-quarter-and-full-year-2019-financial [Accessed 1 Mar. 2020].
Amgen Inc. (2020). Amgen Reports Third Quarter 2019 Financial Results | Amgen Inc..
[online] Available at: http://investors.amgen.com/news-releases/news-release-details/amgen-
reports-third-quarter-2019-financial-results [Accessed 1 Mar. 2020].
Annualreports.com. (2020). [online] Available at:
http://www.annualreports.com/HostedData/AnnualReports/PDF/NASDAQ_AMGN_2018.pd
f [Accessed 1 Mar. 2020].