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Financial Ratios in Pharma Analysis

The document analyzes the financial soundness of several major pharmaceutical companies in India based on ratio analysis across four parameters: liquidity, solvency, profitability, and turnover. It finds that while Sun Pharma performs best in profitability and turnover ratios, it lacks in liquidity and has high debtors and creditors turnover compared to peers. Overall, the analysis finds no single company satisfies all parameters to be deemed entirely financially sound.

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Divya Vishwanadh
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18 views12 pages

Financial Ratios in Pharma Analysis

The document analyzes the financial soundness of several major pharmaceutical companies in India based on ratio analysis across four parameters: liquidity, solvency, profitability, and turnover. It finds that while Sun Pharma performs best in profitability and turnover ratios, it lacks in liquidity and has high debtors and creditors turnover compared to peers. Overall, the analysis finds no single company satisfies all parameters to be deemed entirely financially sound.

Uploaded by

Divya Vishwanadh
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

FINANCIAL ANALYSIS OF

COMPANIES OF THE
PHARMACEUTICAL INDUSTRY
1 Divya Vishwanadh
A- 01
BBA + MBA(Dual)
OBJECTIVE
 The objective of the project is to analyse which company
in the pharmaceutical sector is financially sound on the
basis of ratio analysis.
 Since there are 4 parameters involved, we try to find out
which company is fulfilling all the necessary
requirements to be financially sound.

2
INTRODUCTION
 The pharmaceutical industry ranks very high in the third
world, in terms of technology, quality and range of
medicines manufactured.
 Estimated to be worth $4.5 billion.

 Grows about 8 to 9 percent.

 Highly fragmented with 2000 registered units.

 Leading 250 pharmaceutical companies control 70% of


the market in India.

3
MAIN COMPANIES TAKEN
 The following companies have been taken
 Cadillazydous
 Cipla
 Dr. Reddy
 Panacea Biotec
 Sun Pharma

4
RESEARCH METHODOLOGY
 The research design is exploratory in nature.
 Secondary data has been used to do the above analysis
i.e. Annual reports, company websites.

5
OBSERVATION

6 Liquidity
4.99
5
4.04
4 3.63
3.26
3 2.84
2.13
1.85 1.87
2 1.49
1.32
1
0
Cadillazydous Cipla [Link] Panacea Biotec Sun Pharma

6
Current Ratio Quick Ratio
OBSERVATION
Solvency
1.4
1.18
1.2
1.02
1

0.8
0.69 0.68
0.63
0.58
0.6 0.55

0.4

0.2 0.14 0.16


0.1

0
Cadillazydous Cipla [Link] Panacea Biotec Sun Pharma
7
Debt-Equity Ratio Proprietery Ratio
Profitability
OBSERVATION

45 42.13
40
35
30
25 22.55
19.91
20 17.98 16.64
15.01 13.81
15 12.67
10 8.85 8.25
5
0
Cadillazydous Cipla [Link] Panacea Biotec Sun Pharma

ROI Net profit after tax 8


OBSERVATION
Turnover
5
4.5 4.42

4
3.5 3.19 3.15
3
2.5 2.42
2.05
2 1.79
1.5 1.43 1.41
1.22
1
0.5 0.33
0
Cadillazydous Cipla [Link] Panacea Biotec Sun Pharma
9
Stock Turnover Ratio Working Capital Turnover Ratio
OBSERVATION
Turnover
14
12.07
12
10.87 10.82
10

6 5.78 5.83
5.26
4.01
4 3.24 3.47 3.58

0
Cadillazydous Cipla Dr. Reddy Panacea Biotec Sun Pharma
10
Debtors Turnover ratio Creditors turnover ratio
CONCLUSION
 From the above analysis, it is seen that Sun Pharma is
the company that is financially sound in the parameters
of profitability and turnover.
 But it is lacking in terms of liquidity and turnover as its
ratios is high as compared to the other companies. Also it
is not able to improve upon its debtors and creditors
turnover ratios, though it has a good ROI and net profit
after tax.

11
THANK YOU

12

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