Essay on Business Basics

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Assignment II: Business Basics
Biogen Idec
Biogen Idec is a global biotechnology company focused on discovering, developing, manufacturing and marketing therapies for the treatment of multiple sclerosis and other autoimmune disorders, neurodegenerative diseases and haemophilia. Biogen Idec was formed in 2003 from the merger of two companies, Biogen Inc., founded in 1978, and IDEC Pharmaceuticals Corporation, founded in 1985. It is one of the largest biotechnology companies in the world. Biogen Idec covers the entire value chain, from R&D to worldwide sales.
Biogen Idec displayed strong operational, commercial and financial performance in 2006. However, new market opportunities and the challenges of the next decade have led the
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Biogen Idec currently has 17 drugs in late stage development (Phase II or higher), some of which are new uses for preexisting drugs like Rituxan and Tysabri. This means that in the next 5 to 7 years, less than 17 new products will be launched. Because the company has few compelling drugs in late stage development, it will likely continue to rely heavily on expanding its current product line, namely its moneymakers Avonex and Rituxan, for the next 5 to 12 years. To complement its research and development division, Biogen Idec also plans to invest $200 million annually to acquire new products, as it did with Fumaderm in June 2006.

Looking at financial ratios can help you determine the effectiveness of your business operations. The main areas/ratio that I have focussed on and which I guess are important for apprehending the current situation of a company is listed below:

Current Ratio
Earnings per share
P/E Ratio
Book value per share
Market Capitalization
Return on assets

Current ratio: This is the ratio of Total Current Assets for the most recent interim period divided by Total Current Liabilities for the same period. It covers the current liabilities of a company .The higher the current ratio, the more capable the company is of paying its obligations. The current ratio of Biogen is lower than the industry average. It need to either increase current assets or reduce current liabilities. Making
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