Founded since 1997 by Dr. Nathan Swan, Chem-Med was the second largest manufacture of FDA-approved sodium hyaluronate (HA), behind Pharmacia, Inc. April 9, 2008, Dr. Swan started to worry about his company’s financial situation and he was thinking about getting more investors or going to the bank for financing. For him, “Chem-Med was growing and making money, but it never seemed to have enough cash”. For any investors who are interested in the company, it is important to analyze many vital aspects of profitability, future growth, risks, and comparison before adding Chem-Med to his portfolio. The first aspect to look at is Chem-Med’s rate of sales growth in 2007. Through analyzing Chem-Med’s income statements from 2005-2007, it is indicated …show more content…
Chem-Med’s current ratio 2.9 to 1 indicates the liquidity of the company. Comparing it to Pharmacia’s 2.8 to 1 and the industry’s 2.4 to 1 average current ratio, Chem-Med seems to have enough cash on hand for operation. However, in Chem-Med 2010 pro forma balance sheet, the current ratio is forecasted to decrease down to 1.98 to 1. This could be a serious problem if Chem-Med seek financing from the bank since one of the three covenants is that current ratio has to be maintained above 2.25 to 1. Failing to meet the bank’s covenant can result in losing the loan and more seriously, bankruptcy. That means Chem-Med need to reconsider it pro forma statements if it wants to go into financing with the bank. Another one of the three covenants is to maintain the total debt-to-assets ratio to be less than 0.3 to 1. Chem-Med’s financial statements show that its total debt-to-assets ratio are managed sustainably at 0.14 for all four years from 2007 to 2010. This ratio is much lower than the industry average total debt-to-assets ratio of 0.52 to 1. The stable 0.14 total debt-to-assets ratio definitely shows Chem-Med’s solvency
First of which, is the current ratio. It has been rapidly declining since 2000. To me this indicates that there is a liquidity issue. Each year their trade debt increase exceeds the increase of net income for the company. As a result, the working capital has taken a nosedive from $58,650 in 2002 to only $5,466 in 2003.
The management team at the over-the-counter cold medicine (OCM) group of Allstar Brands is looking to utilize revenue generated by Allround to help fund new opportunities in emerging markets. Therefore, it is critical that Allround maintain its market-leading position in terms of market share, profitability, and sales in order to fund these new initiatives.
Increase in current liabilities Substantial increase in current liabilities weakened the company’s liquidity position. Its current liabilities were US$2,063.94 million at the end of FY2010, a 48.09% increase compared to the previous year. However, its current assets recorded a marginal increase of 25.07% - from US$1,770.02 million at the end of FY2009 to US$2,213.72 million at the end of FY2010. Following this, the company’s current ratio declined from 1.27 at the end of the FY2009 to 1.07 at the end of FY2010. A lower current ratio indicates that the company is in a weak financial position, and it may find it difficult to meet its day-to-day obligations.
The debt-to-capital ratio gives users an idea of a company's financial structure, or how it is financing its operations, along with some insight into its financial strength. The higher the debt-to-capital ratio, the more debt the company has compared to its equity. Star River has always depended much on debt for its financing and the trend shows this ratio may get higher in future. Star River, with high debt-to-capital ratios, compared to a general or industry average, may show weak financial strength because the cost of these debts may weigh on the company and
Debt-to Asset Ratio indicates that 48% of AMT's assets money comes from creditors (1985). In addition, the low current ration implies lack of liquidity (1.78 for 1986). Therefore, the company needs to rely heavily on outside financing to meet maturing obligations since there is no operating income.
In the case of Assessing a Company’s Future Financial Health, the case concentration is on SciTronics, a medical device company, performance measures based on the organization’s three primary financial data sources in Exhibit 1 & 2. Utilizing the 9 steps of corporate financial system, I will be able to analyze the financial health of the company to assess whether it will remain balance over the ensuing 3-5 years. The measures are grouped by focusing on “Financial Ratios” such as: 1.) profitability measures, 2) activity measures, and 3) leverage and liquidity measures. Using the financial data sources, I would be able to make recommendations regarding SciTronics 126 million loan request.
Merck was a well-known German company that made fine chemicals and it only had a small sales presence in the United States at the beginning of 20th century . After the First World War, the Merck family and other investors bought back the company’s stock and incorporated a brand new company in the U.S. This new company changed their business into pharmaceutical research and manufacture. In the next several years, Merck merged with some small chemical firms in U.S. and established an R&D leading strategy. By the start of World War II, Merck Research Lab became a leading pharmaceutical research institution and had a world-class reputation, which attracted top researchers in different fields such as chemistry, biology, pharmacology etc. In the 1970s, Merck recruited Dr. Roy Vagelos, an MD from Columbia University, and appointed him as the head of MRL (Merck Research Labs). Dr. Vagelos is a distinguished enzyme chemist, during that period, biochemistry and the study of enzyme revolutionized pharmaceutical research. Under his leading, Merck opened up several therapeutic areas and enhanced its reputation for bringing “blockbusters” to drug market. During the 1980s, Merck’s sales more than doubled and profits tripled. During 1987-1990, Merck ranked in top 10 most valuable companies in Businessweek.
Having a high debt to equity ratio is sometimes a positive thing- it could mean that the company is investing to receive a higher return on investment from the financing if it done correctly. The medical industry is high risk due to the research and development that takes place for all of the
In year 2007 quick ratio reached dangerous point – 1,02, company’s ability to pay its short-term obligations was badly influenced by the increase in short-term liabilities In 2008 meaning of the ratio grew up, because of the factors listed above. In year 2009 both ratios fell, since company took more liabilities than in 2008: its short-term borrowings, current tax and short-term provisions increased Average showings on AstraZeneca Quick ratio during the period was 1,13, while GSK – 1,22 which again proves that GSK was more liquid during the analysed period.
Their project had always been regarded as a star and had received a lot of attention from management. They helieved they already had the best plan for the compound's development. They agreed, however, to look at the other alternatives during a brainstorming session. Several new ideas emerged. Under the buy-down alternative, the company would drop one of the product forms (oral) in one of the markets (tumor type B), saving $2 million. Under the buy-up alternative, the company would increase its investment by $5 million in order to treat a third tumor type (C) with the intravenous form. When the value of those alternatives was later quantiMarch-April 1998
In regards to pharmacologic therapies used to treat vertigo or motion sickness, scopolamine and meclizine are two medications a nurse practitioner can prescribe for patients with this condition. Each medication has benefits as well as adverse effects that patients should be informed about prior to deciding on a treatment plan. According to Lau and VanEaton (2014), scopolamine, an anticholinergic medication, should not be given to children or older adults, for there is an increased risk for scopolamine toxicity. Lau and VanEaton (2014) observed numerous complains about adverse effects of scopolamine once the medication was discontinued, such as strong episodes of motion sickness with headache, peripheral paresthesia, dysphoria, and hypotension.
Investors can learn about RNA’s financial stability and operating efficiency with the help of these financial ratios. With the use of the current ratio, investors can see that RNA’s has been declining for the past three years. It went from 1.62 to 1.57. Although these numbers are below the industry average for current ratio, the declining numbers is not yet a major concern for the company. This does not mean that the company should not keep an eye on it though. This is
In Medicinal chemistry , the chemist attempts to design and synthesize medicine or a pharmaceutical agent which will benefit humanity .Additionally Oxford define medicinal chemistry as the
The above table shows that the debt to equity ratio is < 1, this means that there is no more debt than equity. The debt ratio corresponds to the financial risk, in case of Novartis, debt ratio indicates that the company has more assets than debt. Current ration does not always indicate positive changes; it measures the company’s ability to pay short-term debt and payables, and confirms NVS’ capability to pay its obligations.
In above table it is shown that among 5 years in 2010 the amount of total liabilities is least than other year’s assets-liabilities comparison. Moreover, in 2010 Beximco Pharma has in quite better position in asset, liquidity (cash ratio), and profit position. Analysis: From the above all graph and table analysis it is realizable that the liquidity and profitability position of BEXIMCO Pharmaceuticals LTD in 2010 is best. And in 2010 the ratio between current assets and fixed assets is 6191667831: 15180731678 that are 1: 2.45180.