1. FINANCIAL PERFORMANCE For Pfizer & Novartis 2013-2012

2. AGENDA Intro Pfizer I.S & B.S Novartis I.S & B.S
Profitability Analysis
Liquidity Analysis
Solvency Analysis
Efficiency Analysis
P/E Analysis

3. Intro

4. Top 25 Pharma companies by global sales

5. Pfizer I.S & B.S

6. Pfizer Income statement

7. Pfizer Balance Sheet (1)

8. Pfizer Balance Sheet (2)

9. Novartis I.S & B.S

10. Novartis Income statement

11. Pfizer Balance Sheet

12. Profitability Analysis
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Return on Equity (ROE)
Return on Assets (ROA)
Earning Per Share
Quality Of Income

13. Gross Profit Margin GPM= Gross profit ÷ Revenues x 100
Novartis
Pfizer #
67.4
80.8
2012
66.7
81.4
2013
59.8
Industry Ratio
For Each 1 $ of Net Sales the company generates 67 cent of gross profit before subtracting any other expenses
For Each 1 $ of Net Sales the company generates 81 cent of gross profit before subtracting any other expenses
Analysis

14. Operating Profit Margin OPM= Operating income ÷ Revenues x 100
Novartis
Pfizer #
20.0
20.5
2012
18.5
30.5
2013
14.18
Industry Ratio
For Each 1 $ of Net Sales the company generates 18.5 cent of Operating profit before subtracting any other expenses
For Each 1 $ of Net Sales the company generates 30.5 cent of Operating profit before subtracting any other expenses
Analysis

15. Net Profit Margin NPM= Net income ÷ Revenues x 100
Novartis
Pfizer #
16.51
24.70
2012
15.60
42.65
2013
17.33
Industry Ratio
For Each 1 $ of Net Sales the company generates 16 cent of Net Income
For Each 1 $ of Net Sales the company generates 43 cent of Net Income
Analysis

16. Return on Equity (ROE) ROE = Net income ÷ Total shareholders' equity x 100
Novartis
Pfizer #
14.09
17.84
2012
12.79
27.94
2013 NA
Industry Ratio
Deteriorated
Improved
Analysis

17. Return on Assets (ROA) ROA = Net income ÷ Total assets x 100
Novartis
Pfizer #
7.86
7.80
2012
7.33
12.30
2013
7.71
Industry Ratio
They utilize all recourses successfully
Analysis

18. Earning Per Share (EPS) EPS = Net income ÷ No. of Share
Novartis
Pfizer #
3.87
1.96
2012
3.71
3.23
2013 NA
Industry Ratio
Deteriorated
Improved
Analysis

19. Quality Of Income =cash flow from operating activity / Net income
Novartis
Pfizer #
1.49
1.15
2012
1.43
0.80
2013 NA
Industry Ratio
Decreased
Analysis

20. Liquidity Analysis Net working Capital Current Ratio Quick Ratio
Cash Ratio

21. Net working Capital NWC= Current assets - Current liabilities
Novartis
Pfizer #
$3,953.00
$35,186.00
2012
$4,174.00
$32,878.00
2013
-NA
Industry Ratio
This is not a ratio this is a absolute amount referred to as simply working capital, is used to determine the availability of a company's liquid assets by subtracting its CL
This is not a ratio this is a absolute amount referred to as simply working capital, is used to determine the availability of a company's liquid assets by subtracting its CL.
Analysis
Novartis
Pfizer #
1.16 : 1
2.2 : 1
2012
1.15 : 1
2.4 : 1
2013 -
Industry Ratio
This is not a ratio this is a absolute amount It means there are no unused assets
Analysis

22. Current Ratio CR = Current assets ÷ Current liabilities
Novartis
Pfizer #
1.16 : 1
2.15: 1
2012
1.15 : 1
2.41 : 1
2013
1.33
Industry Ratio
That means every 1 $ of CL the company has 1.15 of CA to cover it
That means every 1 $ of CL the company has 1.41 of CA to cover it
Analysis

23. Quick Ratio QR = Total Quick assets ÷ Current liabilities
Novartis
Pfizer #
0.76 : 1
1.90: 1
2012
0.73 : 1
1.79: 1
2013
1.22
Industry Ratio
That means every 1 $ of CL the company has 0.73 of quick CA to cover it
That means every 1 $ of CL the company has 1.79 of quick CA to cover it
Analysis

24. Cash Ratio Cash R = Cash Assets ÷ Current liabilities
Novartis
Pfizer #
0.33 : 1
1.09: 1
2012
0.34 : 1
1.38 : 1
2013 NA
Industry Ratio
That means every 1 $ of CL the company has 0.73 of Cash to cover it
That means every 1 $ of CL the company has 1.79 of Cash to cover it
Analysis

25. Solvency Analysis
Debt Ratio
Debt to Equity
Equity Multiplier

26. Debt Ratio DR = liabilities : assets x 100
Novartis
Pfizer #
44.2 %
56 %
2012 %
55.4 %
2013
34 %
Industry Ratio
That means that 41 % of Assets financed from liabilities
That means that 55 % of Assets financed from liabilities
Analysis

27. Debt to Equity D/E= liabilities : Equity
Novartis
Pfizer #
78 %
127 %
2012
69 %
124 %
2013
34 % NA
Industry Ratio -
Analysis

28. Equity Multiplier EM = Assets : Equity
Novartis
Pfizer #
1:8 : 1
2.2 : 1
2012
1.6 : 1
2.24 : 1
2013 NA
Industry Ratio
Assets : Equity
Analysis

29. Efficiency Analysis Total Asset Turnover Fixed Asset Turnover
Receivables Turnover
Average Collection Period
Inventory Turnover
Inventory Days On Hand

30. Total Asset Turnover TATO = Net Sales ÷ Total assets
Novartis
Pfizer #
0.49
0.26
2012
0.46
0.31
2013
0.25
Industry Ratio
Each $1 invested in the total assets generates 46 cents net sales
Each $1 invested in the total assets generates 31cents net sales
Analysis
Novartis is better than Pfizer in using assets to generate net sales
Comparison Analysis

31. Fixed Asset Turnover FATO = Net Sales ÷ A. Fixed assets
Novartis
Pfizer #
3.4
4.12
2012
3.3
4.27
2013
2.50
Industry Ratio
Each $1 invested in fixed assets generates $3.3 net sales
Each $1 invested in fixed assets generates $4.27 net sales
Analysis
Pfizer is better than Novartis in using fixed assets to generate net sales
Comparison Analysis

32. Receivable Turnover RTO = Net Credit Sales ÷ A. Net Receivable
Novartis
Pfizer #
6.11
5.14
2012
5.81
5.46
2013 NA
Industry Ratio
For every $1 accounts receivables the company makes $5.81credit sales
For every $1 accounts receivables the company makes $5.46 credit sales
Analysis
Pfizer is better than Novartis in using fixed assets to generate net sales
Comparison Analysis

33. Novartis is better than Pfizer in transferring Receivables into cash
Average Collection Period ACP= Average Collection Period÷ A. Age of Receivable
Novartis
Pfizer #
63.13
68.11
2012
62.82
66.85
2013 NA
Industry Ratio
Company transfer Receivables from credit customers into cash every days
Company transfer Receivables from credit customers into cash every days
Analysis
Novartis is better than Pfizer in transferring Receivables into cash
Comparison Analysis

34. Inventory Turnover ITO= COGS ÷ A. Inventory
Novartis
Pfizer #
8.39
8.11
2012
8.27
8.93
2013 NA
Industry Ratio
Each $1 invested in the inventory generates $8.27 net sales
Each $1 invested in the inventory generates $8.93 net sales
Analysis
Pfizer is better than Novartis in the sales’ efficiency
Comparison Analysis

35. Inventory Days On Hand IDOH= 365 ÷ A. Days supply in Inventory
Novartis
Pfizer #
41.44
39.80
2012
44.14
40.87
2013 NA
Industry Ratio
Inventory is sold every days
Inventory is sold every days
Analysis
Pfizer is better than Novartis in the number of times that inventory could be turned over within the year
Comparison Analysis