The Financial Position And Performance Of Two Businesses

995 WordsDec 22, 20144 Pages
Abstract The aim of the report is to analyse and interpret the financial position and performance of two businesses supported by ratio analysis identifying which company represents the better investment option. Findings show that GlaxoSmithkline appears to be the more favourable candidate for investment. Introduction GlaxoSmithkline plc is a global healthcare company, which is engaged in the creation and discovery, development, manufacture and marketing of pharmaceutical products, including cutting-edge vaccines, over-the-counter medicines and health-related consumer products. The Company operates in three primary areas of business: Pharmaceuticals (treating cancer, asthma, heart disease and HIV/AIDs), Vaccines (treating hepatitis, polio and typhoid) and Consumer Healthcare (treating oral and skin problems). GlaxoSmithkline plc was created in 2001 in the merger of two established companies, Glaxo Wellcome and SmithKline Beecham. Analysis In analysing and interpreting the financial position of the two potential candidates for investment, ratio analysis is executed. Financial ratio analysis is a process of determining and interpreting relationships between the items of financial statements to provide a meaningful understanding of the performance and financial position of an enterprise (Babalola and Abiola, 2013).It is an accounting tool used to measure various aspects of a company’s operating and financial performance such as its profitability, liquidity,
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