Pfizer financial analysis

2165 words 9 pages
217741531115000 Pfizer Inc. Financial Analysis (2011-2013)
Table of Content
General comments………………………………………………………………………………………………………………………………….2
Comments on financial ratios……………………………………………………………………………….…………………………….….3
Profitability indicator ratios…………………………………………………………………………………………………….….……………3
Liquidity Measurement ratios…………………………………………………………………………………………………….…………..4
Efficiency ratios……………………………………………………………………………………………………………………..….………….…5
Capital structure………………………………………………………………………………………………………………………….………….5
Investment ratio………………………………………………………………………………………………………………………….………….6
Conclusions………………………………………………………………………………………………………………………………….…..…….6
References………………………………………………………………………………………………………………………………………………8
General
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The operating margin of Pfizer has grown, due to reduction of R&D, SG&A (in particularly workforce reduction from 91,500 to 77,700 in 2013) by global cost-reduction/productivity initiatives through applying various forms of business development, which includes alliances, licenses, joint ventures, dispositions and acquisitions5, and can be estimated as a good strategy to future performance.
Quite high level of return on sales in 2013 (42.7%) compared to 26.7% in 2012 caused essentially by gain on sales of discontinued operations – disposal of Animal Health business with recognizing a gain of approximately $10.3 billion net of tax.
ROA ratio can be very useful for potential investors in the pharmaceutical industry, highly dependent on assets as function of R&D sites. ROA ratio demonstrates that Pfizer belongs to capital intensive business; money that company generates on invested capital is below of an industry average, which makes it negative to an investment decision. However, in 2013 ROA has significantly increased (approx. for 3%) compared to 2012 primary due to disposal of assets of discontinued operations and insignificantly due to increased operating income, which makes ROA growth look unconvincing.
ROCE ratio shows profitability increase which means Pfizer did a better job deploying its working capital in 2013, another words, with less of CE (2012 - $156 billion, 2012 - $143

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