Financial Ratio Analysis

User Generated

PFVOREG86

Business Finance

Description

Purpose of Assignment

The purpose of this assignment is to help students gain a better understanding of the financial statements used for corporate financial reporting and the key ratios used to make business decisions.

Assignment Steps

Select a Fortune 500 Company from one of the following industries:

  • Pharmaceutical
  • Energy
  • Retail
  • Automotive
  • Computer Hardware

Review the balance sheet and income statement in the company's 2015 Annual Report.

Calculate the following ratios using Microsoft® Excel®:

  • Current Ratio
  • Quick Ratio
  • Debt Equity Ratio
  • Inventory Turnover Ratio
  • Receivables Turnover Ratio
  • Total Assets Turnover Ratio
  • Profit Margin (Net Margin) Ratio
  • Return on Assets Ratio

Analyze in 1,050 words why each ratio is important for financial decision making.

Submit your analysis as well as your calculations.

User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Please find answer.Thank you.

Running head: ANALYSING PFIZER INC.FINANCIAL RATIOS

Financial Ratio Analysis: Pfizer Inc.
Name
University Name
Course
Jan 22, 2018

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ANALYSING PFIZER INC.FINANCIAL RATIOS

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Pfizer Inc.
Pfizer Inc. is an American pharmaceutical company known for providing service in
the health sector. Pfizer is a pharmaceutical company that dominates in the healthcare sector.
Its portfolio includes medicines, vaccines, and consumers products. The company has
branches spread across the globe. According to Fortune.com, the company has been in
Fortune 500 companies list for the last 23 years ("Pfizer," n.d.). Currently, the company has
96,500 employees ("Pfizer," n.d.). Pfizer ranked 54 on the 2017 Fortune 500 list. The paper
seeks to utilize the financial report of the year 2015 and calculate key ratios. The key ratios
are then used by investors in making a decision about investing in such companies.
Balance Sheet and Income Statement
The income statement of a company shows how asset and liabilities are used. On the
other hand, the balance sheet shows company’s book value. A short look at some of the
important variables is shown in Table 1 below.
Table 1.Important data from Income Statement and Balance Sheet of Pfizer Inc.
Pfizer.Inc

Total Current Assets
Total Current Liabilities
Inventories
Shareholder's equity
Total Liabilities
Cost of Goods Sold
Account Receivable
Total Sales
Total Assets
Net Profit

2015(million $)

2014(million $)

$ 43,804
$ 29,399
$ 7,513
$ 64,720
$1,02,463
$ 9,648
$ 8,176
$ 48,851
$1,67,460
$ 6,960

$ 5,663

$1,67,566

Financial Ratio Analysis
Financial analysis plays an important rol...


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