Business Basics

1587 words 7 pages
Assignment II: Business Basics
Biogen Idec
Biogen Idec is a global biotechnology company focused on discovering, developing, manufacturing and marketing therapies for the treatment of multiple sclerosis and other autoimmune disorders, neurodegenerative diseases and haemophilia. Biogen Idec was formed in 2003 from the merger of two companies, Biogen Inc., founded in 1978, and IDEC Pharmaceuticals Corporation, founded in 1985. It is one of the largest biotechnology companies in the world. Biogen Idec covers the entire value chain, from R&D to worldwide sales.
Biogen Idec displayed strong operational, commercial and financial performance in 2006. However, new market opportunities and the challenges of the next decade have led the
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. Earnings per share is one of the most important measures of share price of firm and is used by investors to determine company’s overall profitability especially when it is compared to EPS of similar company.Biogen has the highest EPS among its competitors..

P/E ratio: For many stock market investors, the Price Earnings Ratio or P/E is the single most important number when considering the valuation of a company. In general, a high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. However, the P/E ratio doesn't tell us the whole story by itself. It's usually more useful to compare the P/E ratios of one company to other companies in the same industry, to the market in general or against the company's own historical P/E. The P/E ratio of Biogen is 33.25 whereas that of Amgen is 27.35, which is significantly higher and better for the growth and reputation of the company in the eyes of investors.

Book value per share: It indicates the level of safety associated with each common share after removing effects of liabilities. In other words, stakeholder can use this ratio to see how much he or she can sell the stake in the company in the event of liquidation. The book value per share of Biogen Idec (33.24) is importantly higher than any of its competitors. This imbibes in confidence among the


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