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
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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.
Belladonna alkaloids is used to treat irritable bowel syndrome (IBS) and intestinal inflammation in combination with other medications. IBS is an invasive gastrointestinal functional bowel disorder, characterized by a recurrent crampy diarrhea and abdominal pain. Belladonna works by decreasing motion of muscles in the intestine and stomach providing them with a mild sedation
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.
Analyzing sales data of Novartis AG, we see 40% increase in sales for 10 years. At the same time, the significant decrease in sales was in 2010 and 2011. This can be explained as consequences
For Universal Health Services, the most important ratio in the evaluation of its financial condition would be the liquidity, profit margin and leverage ratio. The most common liquidity ratio is the current ratio, which would indicate Universal Health Services’ ability to meet its short-term bills and is calculated as the ratio of current assets to current liabilities. The higher the ratio the safer the company is thereby increasing its flexibility. Moreover, the current ratio is boosted through debt payment, conversion of short-term debt into long-term debt, purchasing inventory when necessary and collecting receivables. It is
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.
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
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
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
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
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.
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.
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.