Pfizer - Financial Analysis - 2569 Words

Name: Khiem Nguyen FINANCIAL ANALYSIS REPORT (Draft 1) For PFIZER INC. Introduction and Shareholder Analysis Pfizer (NYSE: PFE) is involved in the development, manufacturing and marketing of pharmaceutical products. The industry is intensely competitive. There are a few unique characteristics. Pharmaceutical products have long and expensive development periods – upwards of ten years and $100 million depending on the nature of the drug and the scope of the clinical trials process. In order to encourage companies to engage in innovation, companies are given lengthy patent protection for their drugs upon receiving regulatory approval. This allows them to charge monopoly rents so that they may recover the development cost. A†¦show more content†¦Furthermore, Pfizer’s inventory turnover indicates the degree to which the firm’s inventory is converted to cash. Unsold inventory represents business risk and inefficiency. The days’ sales in inventory has increased from 169.8 to 194.4. Average inventory turn has declined from 2.0 to 1.68 and ending invent ory turn has declined from 2.12 to 1.85. This indicates that Pfizer’s inventory supplies are building – they are not selling their inventory as quickly as they have in the past. Put together, Pfizer has seen deterioration in its liquidity over the past year. The company’s current and quick ratios have declined, although they are still healthy. The company has tightened receivables, but this is an attempt to improve cash flow in light of rapidly building inventories. Pfizer’s inventory levels, it should be noted, are only high compared with 2007 numbers; they are far below inventory levels of four or five years ago. Debt Management From 2007 to 2008, Pfizer’s debt ratio has increased from 42% to 48%. Even though this ratio is still well below one, it still further supports the idea that Pfizer has seen a constriction of its cash flow, and it has been forced to borrow to maintain a necessary level of working capital. In addition, the debt-equity ratio has also increased from 0.77 in 2007 to 0.93 in 2008 which suggests that Pfizer has been aggressive in financing its growth with debt in the past year. On the other hand, the long-term-debt to equityShow MoreRelatedFinancial Analysis of Merck and Pfizer3681 Words   |  15 Pagesis bound to be displeased with mutually exclusive expectations and the pharmaceutical industry is often criticized. Pfizer Inc. Mission Products: Pfizer’s mission is to help increase peoples’ life spans and help them live healthier lives. Its products help treat and prevent minor conditions like back pain and more serious ones such as psychotic disorders. Strategy: Pfizer is the world’s number one pharmaceutical company. Its best-selling products include Lipitor, the world’s best- sellingRead MorePfizer Financial Analysis Essay1377 Words   |  6 PagesPfizer Incorporated (PFE)  was established in 1849 in Brooklyn, New York. Charles Pfizer and Charles Erhardt, two German-American cousins, founded a chemicals business and produced an anti-parasitic- Santorin, which was a great success.Pfizers  business  began to grow with production of citric acid in 1880s. Total sales of Pfizer had reached almost $3 million by 1910. By 1950s, Pfizer had set up business in countries like Belgium, Canada, Iran, Panama, Turkey, and United Kingdom.   Pfizer is a  pharmaceuticalRead MorePfizer financial analysis Essay2179 Words   |  9 Pages 217741531115000 Pfizer Inc. 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