Ratio Analysis Sanfoni Aventis


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Ratio Analysis Sanfoni Aventis

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Ratio Analysis Sanfoni Aventis

  2. 2. INTRODUCTION• Sanofi-Aventis was formed in 2004 when Sanofi-Synthelabo acquired Aventis.• Sanofi-Aventis, headquartered in Paris is a multinationalpharmaceutical company, the worlds fourth-largest company.• Sanofi-Aventis engages in the research anddevelopment, manufacturing and marketing ofpharmaceutical products for sale.• Sanofi-Aventis covers 7 major therapeutic areas:cardiovascular, central nervous system, diabetes, internalmedicine, oncology, thrombosis and vaccinesBy Nija
  3. 3. RATIO ANALYSISRatio analysis is one of the techniques offinancial analysis to evaluate the financialcondition and performance of a businessconcern. Simply, ratio means the comparisonof one figure to other relevant figure orfigures.By Nija
  4. 4. LIQUIDITY RATIOSBy DepaliCurrent RatioANALYSISo Current Liabilities are increasing more thancurrent assets, hence the ratio decreases overthe years.o However, Company can easily clear its Liabilities.Current AssetCurrentLiability1.69 1.88 2.04
  5. 5. LIQUIDITY RATIOS- - -By DepaliAcid Test RatioANALYSISo In 08’ there is an increase in Quick ratio becauseof increase in debtor from 51.51 to 89.50o In 09’ there is a decrease in the ratio because ofdecrease in cash from 23.37 to 9.45Quick AssetsCurrentLiabilities0.35 0.74 0.62
  6. 6. LIQUIDITY RATIOS- - -By DepaliInventory Turnover RatioANALYSISo In 08’ there is an increase in the ratio because of betterinventory management ( decrease in inventory from 180.80to 172.55).o And in 09’ the ratio decreases because of poor inventorymanagement (increase in inventory from 172.55 to 231.44).Cost of Goods SoldAverageInventory4.54 6.17 5.30
  7. 7. NET WORKING CAPITALNet Working Capital=Current Asset – Current LiabilitiesBy NijaFINANCIALYEARSCurrent Asset CurrentLiabilityNet WorkingCapitalDec 07 260.45 127.34 133.11Dec 08 285.42 151.33 134.09Dec 09 293.33 173.40 119.93
  8. 8. NET WORKING CAPITAL110115120125130135Dec 07 Dec 08 Dec 09
  9. 9. LIQUIDITY RATIOS- - -By DepaliWorking CapitalANALYSIS• In 08’ working capital increases because of increase incurrent assets.• In 09’ there is a decrease in working capital because ofincrease in current liability due to more purchase &creditCurrent Asset –Current Liability119.93 134.09 133.11
  10. 10. LIQUIDITY RATIOSWorking Capital Turnover RatioANALYSISo Measures the efficiency with which the working capital is beingused by a firmo Sales fell by 0.39% in 2009 while Net working capital fell by 10.56%.o Aventis Pharma made an efficient use of the working capitalgeneratedCost of SalesNet workingcapital8.57 7.69 6.69By Lionell
  11. 11. LIQUIDITY RATIOSDebtors Turnover ratioANALYSISo Indicates how quickly debt is recovered fromdebtorso Higher value = more efficient management ofcreditCredit SalesAverageDebtors14.44 14.03 14.13By Lionell
  12. 12. ANALYSISo Aventis launched the following new productsin 2008o Apidara Solostaro Solostaro Lantus and Amaryl registered 36.4% and 27%respectively.o Entire retail market grew by around 9.8%o Sales grew by 15.87% in 2008 which showsthat the new products launched were highlysuccessful.
  13. 13. LIQUIDITY RATIOSCreditors Turnover RatioANALYSISo It is the number of days in which the companypays off its creditorso No creditors means that Aventis has paid off allits creditors in cash from reserves and surplusAverage CreditorsCost of sales/365 - - -By Lionell
  14. 14. LIQUIDITY RATIOSAsset Turnover RatioANALYSISo Higher the ratio, greater is the intensiveutilization of fixed assets. Lower ratio meansunder-utilization of fixed assetsCost of SalesNet Fixed Asset 1.61 1.90 1.99By lionell
  15. 15. ANALYSISo The company expected to continue it’s growthplans however reciprocal from competitorsreduced sales in 2009 which resulted in alower asset turnover ratio
  16. 16. LEVERAGE RATIOSDebt – Equity RatioANALYSISo Company is completely debt-free status & has huge cashreserves on its Balance Sheeto As company is Debt free this ratio can not be calculated ascompany is not taking benefit of trading on Equity.Total debtTotal Equity - - -By Nilesh
  17. 17. • ow debt (or leverage) not only keeps a company’s interest cost down, butalso gives it flexibility to invest its cash back into the business to expand ordevelop new products. As debt-free companies are mostly cash-rich, theyalso do not need to raise large funds from the market to run theiroperations.• There are many other advantages that debt-free companies enjoy. Forinstance, debt-free company need not keep aside a portion of the profit tomeet the cost of capital. They get interest on their cash deposited withbanks, adding to their reserves. They have low interest-rate risk.• However, debtless companies have their share of disadvantages, too. Itshows that the company is not proactive on expansion and, thus, would beleft out on growth rates when the environment turns bullish. There wouldbe lower chances of debt-free companies getting long-term debt at shortnotice during an emergency as the company will not have a sufficient debthistory to boast.
  18. 18. LEVERAGE RATIOSDebt – Asset RatioANALYSISo As Company is debt freeTotal debtTotal Asset - - -By Nilesh
  19. 19. LEVERAGE RATIOSInterest Coverage RatioANALYSISo As Company is debt free they don’t have fixedburden of paying interest.EBITInterest- - -By Nilesh
  20. 20. LEVERAGE RATIOSDividend Coverage RatioANALYSISo As we can see company has good capacity to pay its shareholder from itsprofit.o This is because sales in Dec. 08 was much higher, where as COGS in Dec 09 wasmuch higher which resulted in good DCR in Dec. 08.o Such ample cash balances would be helpful to the company while looking atopportunities & also to maintain its steady dividend payoutsNPATEquity ShareCapital6.826 7.2174 6.261By Nilesh
  21. 21. LEVERAGE RATIOSDividend per shareANALYSISo As we can see dividend per share is increasing despite decrease innet profit margin so company declaring more dividend payoutratio, We believe this to be a positive step in favor of theshareholders.o Aventis might be don’t have good investment opportunities inIndia.Total DividendNo. of shares201616By Nilesh
  22. 22. PROFITIBALITY RATIOSGross Profit Ratio = Gross Profit *100Net SalesBy NijaF.Y. Gross Profit Net SalesGross ProfitRatio ( in %)Dec 07 175.06 890.03 19.67Dec 08 203.89 1031.34 19.77Dec 09 183.36 1027.27 17.8505101520dec07dec08dec09grossprofit
  23. 23. PROFITIBALITY RATIOSNet Profit RatioANALYSISo AEBITInterest - - -By Nija
  24. 24. PROFITIBALITY RATIOSOperating RatioANALYSISo AOperatingIncome/Average totalasset- - -By Nija
  25. 25. F.Y. NPAT Shareholder’s fundRATIO(IN %)DEC ‘07 144.42 691.55 20.88DEC’08 166.2 814.64 20.40DEC’09 157.41 918.17 17.14PROFITIBALITY RATIOSReturn on Shareholders Investment Ratio = NPAT- pref. Div.ShareholdersFundANALYSISAventi’s return on shareholder’sinvestment is decreasing for last 3years.Overall efficiency is decreasing.Measures the efficiency of an investment.
  26. 26. PROFITIBALITY RATIOSReturn On Assets NPATTotal AssetsGeneration of profit from invested capital.Should be compared with company’s previous ROA numbers.F.Y. NPAT ROA (IN %)DEC ’07 144.42 300.28DEC’08 166.2 353.72DEC’09 157.41 398.67•Figure shows that ROA isincreasing per year which is goodfor a company.•Company is earning more moneyon less investments.
  27. 27. PROFITIBALITY RATIOSReturn on Capital Employed• Indicates efficiency & profitability of company’s capital investments.• Tells us about the profit from the investments the shareholders havemade in their company.• It should always be higher than the rate at which company borrows.EBITCapitalEmployed31.24 31.45 25.12By Alok
  28. 28. PROFITIBALITY RATIOSEarning Per Share= NPAT-preference Div.No. of equity sharesThe portion of a companys profit allocated to each outstanding shareof common stock.•EPS is increasing from ‘07 to‘08, but it has significantlydecreased from ‘08 to ’09•Not a good sign for company.F.Y. NPAT EPS (IN %)DEC’07 144.42 62.71DEC’08 166.2 72.16DEC’09 157.41 68.35
  29. 29. PROFITIBALITY RATIOSPrice Earning RatioANALYSISo Primarily reflects : Growth prospects, riskcharacteristics, corporate image and the degreeof liquidity.o Higher the P/E ratio higher is the expectation ofinvestorsMkt. price/shareEPS0.146 0.138 0.159
  30. 30. DUO POINT ANALYSISRate ofReturn onInvestmentNet Profit as% ofSalesInvestmentTurnoverNet Profit Sales Sales Total assets
  31. 31. DUO POINT ANALYSISANALYSISo Measures combined effects of profit marginand asset turnover.o Higher the results higher is the return oninvestment1.10 1.24 1.25
  32. 32. CONCLUSION-Sanofi Aventis is a key organization in India in the Pharma sector.-Current ratio of the company is good which shows sound liquidityposition.-Decline in sales was observed. The reason of this was thediscontinuance of distribution of Anti rabbies vaccine.-An inclination was observed in NP ratio and GP ratio from 07 to 08but further it declined in 09 because of increase in mfg. andoperational expenses.- Aventis’s debtors turnover ratio is also increasing from 14.13% to14.44% which reflects its efficiency of converting debtors into liquid isincreasing.
  33. 33. THANKYOU