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This is financial analysis of Abbott Labortaries Pakistan
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INVESTMENTS MANAGEMENTPROJECT REPORT
FINANCIAL RATIO ANALYSIS: ABBOTT LABORATORIES PAKISTAN(2003-2007)
Dated: 29th May, 2008.
DEPARTMENT ADMN. SCIENCESQUAID-E-AZAM UNIVERSITY,
ISLAMABAD
Abbott Laboratories (Pakistan) Ltd - Company Profile Snapshot
Company Profile:
Abbott Laboratories (Pakistan) Ltd
Ticker: ABOT
Exchanges: BOM
2007 Sales: 6,584,500,000
Major Industry: Drugs, Cosmetics & Health Care
Sub Industry: Ethical Drug Manufacturers
Country: PAKISTAN
Employees: 1350
General Information
Abbott Laboratories(Pakistan) Limited
Opposite Radio Pakistan TransmissionHyderabad RoadKarachiSindhPAKISTAN
www.abbott.com.pk
T: 92 21 501 50 45 9
F: 92 21 501 32 45
Karachi Stock Exchange Ticker: ABOT
Turnover (PKR Mn): 5,887.7
Financial Year End: November
Company Overview:
Abbott Laboratories (Pakistan) is a subsidiary of Abbott Laboratories, and focuses on
manufacturing and marketing pharmaceutical products. The company also manufactures
diagnostic equipment; diabetes cares products, molecular devices, related testing kits, and
consumer health and hospital products. In addition, it markets pediatrics and medical
nutritional products. The company operates primarily in Pakistan. It is headquartered in
Karachi, Pakistan and employs 1,500 people.
The company recorded revenues of PKR5, 887.7 million (approximately $98 million)
during the fiscal year ended November 2006. The net profit of the company was PKR
1, 000 million (approximately $16.7 million) in fiscal year 2006.
Principal Activities:
The Company's principal activities are to manufacture, import and market research based
pharmaceutical, nutritional, diagnostic, hospital and consumer products and provides toll
manufacturing services. It operates through three segments:
Pharmaceutical,
Nutritional and
Others
The Pharmaceutical segment manufactures, import and markets research based
pharmaceutical products registered with the Ministry of Health and provides toll
manufacturing services. The Nutritional segment is into importing and marketing of
pediatrics nutritional products and medical nutritional products. Other segment includes
importing, manufacturing and marketing diagnostic equipment, testing kits, consumer
healthcare, nutritional and hospital products.
Analysis of Company Data:
The financial information regarding Abbott laboratories was collected and analysed and
the significant ratios were calculated in order to determine the financial situation of thee
company during last 5 years, a report is presented below.
OPERATING & LIQUIDITY RATIOS
(All calculations are done on MS-Excel using formuals, sheets are attached)
Net Working Capital
Net Working Capital= Current Assets – Current Liabilities
2003
Rs. 1233297
2004
Rs. 1809510
2005
Rs. 2211893
2006
Rs. 2814730
2007
Rs. 2247448
Acid test ratio:
Cash+ Marketable securities+ Net Receivables / Current Liabilities
2003
0.8911
2004
2.1108
2005
1.8971
2006
2.4253
2007
0.7088
Current Ratio
Current Assets/ Current Liabilities
2003
2.6523
2004
4.2611
2005
4.1774
2006
4.7558
2007
3.5490
Receivables as a Percentage of Sales :
Net Receivables / Net Sales * 100
2003
2.27%
2004
1.91%
2005
2.85%
2006
3.55%
2007
1.97%
Total Asset turnover:
Sales / Average Total Assets
2003
1.4460 times per year
2004
1.3650 times per year
2005
1.2536 times per year
2006
1.1693 times per year
2007
1.3984 times per year
Earning Power of Total Investment:
EBIT / Total Assets * 100
2003
30.52%
2004
34.84%
2005
33.16%
2006
28.67%
2007
37.86%
PROFITABILITY RATIOS
(All calculations are done on MS-Excel using mathematical formulas, sheets
are attached)
Net Profit Margin (%) = Net Profit/ Sales * 100
2003
12.30%
2004
16.25%
2005
18.59%
2006
16.98%
2007
18.48%
Earning Power (%) = EBIT/ Total Assets * 100
2003
28.20%
2004
32.15%
2005
33.16%,
2006
28.67%
2007
37.86%
Rate of Profit on Owner's Equity (%) = Net Profit/ Owner's Equity * 100
2003
24.09%
2004
26.78%
2005
28.20%
2006
23.57%
2007
32.79%
Rate of Profit on Paid-up Capital (%) = Net Profit/ Paid-up capital * 100
2003
111.45%
2004
131.87%
2005
141.52%
2006
102.15%
2007
123.55%
Rate of Profit on Total Investment = Net Profit/ Total Investment
2003
164.18
2004
224.23
2005
194.50
2006
294.64
2007
275.35
SHARE PRICES
(All calculations are done on MS-Excel using mathematical formulas, sheets are
attached)
Book value of ordinary shares = Total common equity/ No. shares
outstanding
2003
$9.9999
2004
$9.9999
2005
$9.9999
2006
$10.00
2007
$10.00
Earning per Share = Net Income/ Number of Shares
2003
11.15
2004
10.99
2005
14.15
2006
10.21
2007
12.36
Dividend per Share = Net Income/ Number of shares outstanding
2003
Rs. 3.00
2004
Rs. 3.00
2005
Rs. 3.50
2006
Rs. 3.55
2007
Rs. 3.99
Payout Ratio = DPS/EPS
2003
26.99%
2004
27.30%
2005
24.73%
2006
34.77%
2007
32.28%
Dividend Yield (%) = DPS/ Market price per share
2003
0.53%
2004
0.34%
2005
0.27%
2006
0.21%
2007
1.20%
Leverage & Capital Structure Ratios
(All calculations are done on MS-Excel using mathematical formulas, sheets are
attached)
Total debt to equity ratio = Total Debt/ Total equity
2003
1.6393%
2004
0.1040%
2005
0.1055%
2006
0.0811%
2007
0.1013%
Total Debt to Total Capital = Total Debt/ Total debt+ total equity
2003
26.1640%
2004
17.1887%
2005
17.3699%
2006
15.7591%
2007
21.1924%
Long term debt to equity ratio = Long term debt/ total common equity
2003
0.93%
2004
0.87%
2005
0.62%
2006
1.04%
2007
2.99%
Tangible Assets Debt Coverage = Total Assets – Intangibles- Current Assets/ LTD
2003
35.54 times per year
2004
41.59 times per year
2005
57.92 times per year
2006
33.36 times per year
2007
14.06 times per year
Times Interest Earned Ratio = EBIT/ LTD Interest
2003
51.2069 times per year
2004
344.6738 times per year
2005
471.7715 times per year
2006
394.4344 times per year
2007
553.4760 times per year
Cash flow times interest earned ratio = EBIT+ Depreciation/ Interest
2003
59 times per year
2004
392 times per year
2005
523 times per year
2006
438 times per year
2007
612 times per year
Asset Relation Ratios
(All calculations are done on MS-Excel using mathematical formulas, sheets are
attached)
Plant & Equipment to Total Assets = Net Plant + Net Equipment/ Total
Assets
2003
805219/2958071 = 27.22%
2004
972968/3368623 = 28.89%
2005
1187749/4129055 = 28.76%
2006
963726/ 5035425 =19.14%
2007
912435/ 4681368 = 19.49%
Inventory to Total assets= Average Inventory / Total Assets
2003 791608/2958071 = 0.2676
2004
837784.5/3368623 = 0.2487
20051067760.5/4129055 = 0.2586
2006
1237020.5/5035425 = 0.2457
2007
1309824.5/4681368 = 0.2798
Receivables to Total Assets = Average Receivables/ Total Assets
2003
97057/2958071= 0.0328
2004
92553.5/3368623 = 0.0275
2005
117673.5/4129055 = 0.0285
2006
178019.5/5035425 = 0.0353
2007
168779.5/ 4681368 = 0.0360