In the research, the next three years performance is estimated by different stage. Generally speaking, the first stage will be only the next year 2016, which is basic on the average historical performance. The second stage will be 2017 and 2018, the growth is assumed to keep about 9.6 % per year. In addition, all the figures in this part are calculated by Danish Kroner.
Basic on the last five years’ income statement, sales in Novo Nordisk will increase from DKK 107927 million in 2015 to DKK 134004 million in 2018. However, the operating profit might decrease from 2015 and the operating margin will also decrease relatively. On the other hand, the net income and net margin will rise to DKK 46900 million during the future three years. This is because the operating cost in Novo Nordisk will has an unusual increase in the future, which should be concerned.
As the graph shows, the finance situation presented a fluctuated change during the past five years. It may has a stable growth from DKK 9933 million in 2016 to DKK 14928 million in 2018. Debt in this graph is assumed only long-term debt that is zero, which is the reason why the leverage is zero during the past five years.
According to the disclosure of Novo Nordisk’ balance sheet, the book value per share has an improving trend from 2011 to 2018, expect 2016. The cash flow per share will also increase in the future three years. Although it is difficult to accurate analyze the reason why the book value will decrease in 2016, it
• Net profit margin has been negative and no major patterns over the 9 year period on net profit since the trend of the industry is based mostly on economic factors, and whether or not they secure contracts. Due to high percentage of COGS they are only left with a net profit of $980 or
Although the company did show an increased gross profit of $8,255,000 with $6,358,000 less Net Sales in 2013 versus 2012, that increase is due to the reduction in product Cost of Goods Sold by $14,613,000. Since increases in product price will negatively affect sales, one of management’s primary goals is to keep prices stable. This objective is achieved through implementation of cost cutting programs, investing in more efficient equipment, and automation of more steps in the production process.
The company is so large that no one drug can lift it from its current sales doldrums. In addition, the company was once highly attractive to investors, but its recent stock price fell to 1997 lows. This may put pressure on the company to attempt acquisitions at a time when the company is ill-equipped to integrate a new company into its organization, and it is engaged in a cost-cutting program at a time when it may need to invest even more in research and development (McTigue Pierce, 2005).
A person can see from the analysis that both companies had a fewer profits in 2005 over 2004. The increase of operation expenses was the cause of low net profits. Both companies need to rethink their operating cost to decrease their expenses which in return can help increase their profit margin.
The firm shows positive health for the Shareholders Equity with an equity ratio of 44.2% in 2011 and increasing to 45.2% in 2012. Calculating the percent of total assets that shareholders would receive in the event of company liquidation looks positive and very healthy for any investors or shareholders of this firm. The interest coverage ratio is also at a value that is significantly positive 14.0% in 2011 and 12.8% in 2012. Although 2021 shows a decrease, the company is still very capable of generating sufficient revenues to cover their interest payments on any debt they have incurred.
In addition to affecting profits by adjusting useful life and depreciation; key ratios will also be affected. The net profit margin can be influenced both ways to fit the purpose of business strategy. It could be increased to make it seem more profitable, or it can be influenced in a negative way to write off as much expenses as possible – if the year held disappointing results – in order to show next year more positively in comparison.
In 2011 there was a sharp decline in sales by 36% when compared to sales in 2010. As a result , we adjusted our forecast to $22M in 2012. Because of the big decline in the NiMH sales, we decided to be conservative with our ultracapacitor forecast and used the 2011 sales results as our 2012 forecast. We kept the price of the Ultracapacitor at $18, but lowered the price of the NiMH to $9 due to market pressure and decline in sales. The R&D investments were the same as 2011.
During this time, sales increased from: $7.11 billion in 2010 to $7.99 billion in 2012. Earnings improved from $2.84 to $3.57. While the total amount of dividends rose from $1.00 to $1.72. These figures are showing how the company has been continually increasing sales, earnings and dividends over the last three years. In the future, the management predicts that their current strategy will increase returns. As, executives believe that their focus on building the brand and accounting for costs will lead to net earnings of $5.20 to $7.19 annually by
Higher leverage is very likely to create value for a firm considering capital structure change by exerting financial discipline and more efficient corporate strategy changes.
Then, we can get growth rates of 2007 -2011 are 2.46%, 1.76%, 4.09%, 3.61% and 2.78% respectively. Finally, we take the average growth rate of 2.94% as long-term growth rate. The computation is showed in Exhibit 2($ in thousands).
After considering the operational improvements forecasted, we project Robertson’s free cash flows and compute the terminal value using the Gordon Growth Method; the implied share price is analyzed further in accordance to growth rate and discount rate.
Also, the drug distribution division has been forced to lower its prices by health care providers, patients, insurance companies and HMOs. Moreover, related costs are increasing, reducing profit margins of the company. This division is not as profitable as other three divisions, generating less than 50% of the company’s total profits,
The Earnings Per share in 2012 and 2013 were $2.90. This is an indicator that the company is still profitable since the ratio is a constant. The price per earnings in 2012 was 12.5 and 17.7 in 2013. A decrease in the price per share may indicate a vote of no confidence to investors. However, this can be attributed to the industry sector as well the stock.
Operating profit margin figures in the table above show the return from net sales[13]. However profit margin ratios are high enough for the 3 years, there is a fall from 12.86% to 11.26% during 2011-12. Sales revenue increases with a higher rate than gross profit so there is a poor
In the prior ten years, the bank significantly increased their investment banking assets from EUR640 billion to EUR1,860 billion. In order to fund the increasing asset growth between 2002-2007 Deutsche Bank increased their leverage by a significant amount. In 2002 they had the highest leverage among their industry peers with 33.3x, while BNP Paribas followed close behind with 30.9x. In 2007 Deutsche Bank increased their leverage to 71.3x blowing their peers out of the water with the closest being Barclays with 45.9x. After the financial crisis hit, Deutsche bank had to decrease their leverage to 44.1x but still higher than any other peer.