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“FINANCIAL ANALYSIS OF GALXO SMITH KLINE COMPANY PAKISTAN
FROM 2004-2008”
Presented By: Aamir Hayat
Contact: +92-314-556-1080
GRADUATE SCHOOL OF MANAGEMENTInternational Islamic University Islamabad
2
ANALYSIS OF FINANCIAL STATMENT
“GLAXO SMITH KLINE COMPANY PAKISTAN”
3
CATEGORY OF RATIOS
“GLAXO SMITH CLINE COMPANY”Activity Ratios
Activity Ratios
Profitability Ratios
Profitability Ratios
Coverage Ratios
Coverage Ratios
Investor’s Analysis Ratios
Investor’s Analysis Ratios
Horizontal and Vertical
Analysis
Horizontal and Vertical
Analysis
4
ACTIVITY RATIOSANALYSIS
2004 2005 2006 2007 20080
1
2
3
4
5
6
Current RatioQuick RatioCash Ratio
CURRENT, QUICK AND CASH RATIOS
6
RECEIVABLE TURNOVER RATIO
Year 2004 2005 2006 2007 2008
265.42 Times 145.14 times 119.11 times 90.81 times 13.18 times
2004 2005 2006 2007 20080
50
100
150
200
250
300
Receivable Turnover Ratio
Receivable Turnover Ratio
7
RECEIVABLE TURNOVER IN DAYS
Year 2004 2005 2006 2007 2008
1.38 Days 2.51 Days 3.06 Days 4.02 Days 27.69 Days
2004 2005 2006 2007 20080
5
10
15
20
25
30
Receivable Turnover in Days
Receivable Turnover in Days
8
INVENTORY TURNOVER RATIO
Year 2004 2005 2006 2007 2008
3.28 Times 3.09 Times 2.99 Times 2.98 Times 3.31 Times
2004 2005 2006 2007 20082.8
2.9
3
3.1
3.2
3.3
3.4
Inventory Turnover
Inventory Turnover
9
INVENTORY TURNOVER IN DAYS
Year 2004 2005 2006 2007 2008
111.13 Days 118.12 Days 122.27 Days 122.58 Days 110.32 Days
2004 2005 2006 2007 2008104
106
108
110
112
114
116
118
120
122
124
Inventory Turnover in days
Inventory Turnover in days
10
Year 2004 2005 2006 2007 2008
111.12 Days 129.28 Days 128.79 Days 124.8 Days 133.58 Days
DAY’S SALES IN RECEIVABLE
2004 2005 2006 2007 20080
20
40
60
80
100
120
140
160
Day's Sales In Receivable
Day's Sales In Receivable
11
OPERATING CYCLE
Year 2004 2005 2006 2007 2008
112.51 Days 120.63 Days 125.33 Days 126.6 Days 138.01 Days
2004 2005 2006 2007 20080
20
40
60
80
100
120
140
160
Operating Cycle
Operating Cycle
12
WORKING CAPITAL
Year 2004 2005 2006 2007 2008
3877907 5252464 5626548 5759184 6032399
2004 2005 2006 2007 20080
1000000
2000000
3000000
4000000
5000000
6000000
7000000
Working Capital
Working Capi-tal
13
SALES TO WORKING CAPITAL
Year 2004 2005 2006 2007 2008
2.29 Times 2.06 Times 1.82 Times 2.87 Times 2.27 Times
2004 2005 2006 2007 20080
0.5
1
1.5
2
2.5
3
3.5
Sales to Working Capital
Sales to Work-ing Capital
14
COVERAGE RATIOSANALYSIS
15
DEBT TO TOTAL ASSETS
Year 2004 2005 2006 2007 2008
19.18 % 18.43 % 20.19 % 20.13 % 21.37 %
2004 2005 2006 2007 200816.00%
17.00%
18.00%
19.00%
20.00%
21.00%
22.00%
Debt to Total Assets
Debt to Total Assets
16
DEBT TO EQUITY RATIO
Year 2004 2005 2006 2007 2008
23.74 % 22.60 % 25.53 % 25.21 % 27.72 %
2004 2005 2006 2007 20080.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Debt to Equity Ratio
Debt to Equity Ratio
17
CURRENT LIABILITIES TO EQUITY RATIO
Year 2004 2005 2006 2007 2008
19.68 % 18.79 % 22.60 % 21.69 % 23.19 %
2004 2005 2006 2007 20080.00%
5.00%
10.00%
15.00%
20.00%
25.00%
Current Liabilities to Total Equity
Current Liabili-ties to Total Equity
18
DEBT TO TANGIBLE NET WORTH
2004 2005 2006 2007 20080.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Debt to Tangible Net Worth
Debt to Tangible NeT Worth
Year 2004 2005 2006 2007 2008
23.74 % 22.60 % 25.53 % 25.21 % 27.72 %
19
INVESTORS RATIOSANALYSIS
20
DEGREE OF FINANCIAL LEVEAGE
Year 2004 2005 2006 2007 2008
1 Times 1 Times 1 Times 1 Times 1 Times
2004 2005 2006 2007 20080
0.2
0.4
0.6
0.8
1
1.2
Degree of Financial Leverage
Degree of Financial Leverage
21
EARNING PER SHARE
Year 2004 2005 2006 2007 2008
13.47 Per Share
16.60 Per Share
12.19 Per Share
9.8 Per Share
11.46 Per Share
2004 2005 2006 2007 20080
2
4
6
8
10
12
14
16
18
Earning Per Share
Earning Per Share
22
PRICE EARNING RATIO
Year 2004 2005 2006 2007 2008
13.4 Times 11.2 Times 12.9 Times 19.5 Times 6.6 Times
2004 2005 2006 2007 20080
5
10
15
20
25
Price Earning Ratio
Price Earning Ratio
23
PAYOUT RATIO
Year 2004 2005 2006 2007 2008
51.97 % 48.19 % 65.62 % 76.60 % 82.26 %
2004 2005 2006 2007 20080.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
Payout Ratio
Payout Ratio
24
PERCENTAGE OF EARNINGS RETAINED
Year 2004 2005 2006 2007 2008
51.78% 34.43% 23.37% 17.07% 51.78%
2004 2005 2006 2007 20080.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
% Age of Earnings Retained
% Age of Earnings Re-tained
25
DIVIEND YIELD RATIO
Year 2004 2005 2006 2007 2008
3.86 % 4.29 % 5.06 % 3.89 % 12.51 %
2004 2005 2006 2007 20080.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
Dividend Yield
Dividend Yield
26
PROFITABILITY RATIOSANALYSIS
27
NET PROFIT MARGIN
Year 2004 2005 2006 2007 2008
16.5 % 19.3 % 16.5 % 15.7 % 14.5 %
2004 2005 2006 2007 20080.00%
5.00%
10.00%
15.00%
20.00%
25.00%Net Profit Margin
Net Profit Margin
28
GROSS PROFIT MARGIN
Year 2004 2005 2006 2007 2008
39.5 % 40.8 % 38.2 % 37.24 % 28.8 %
2004 2005 2006 2007 20080.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%Gross Profit Margin
Gross Profit Margin
29
RETURN ON ASSETS RATIO
Year 2004 2005 2006 2007 2008
21.4 % 27 % 18.8 % 17 % 18.8 %
2004 2005 2006 2007 20080.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%Return on Assets
Return on Assets
30
TOTAL ASSETS TURNOVER
Year 2004 2005 2006 2007 2008
1.29 Times 1.24 Times 1.14 Times 1.08 Times 1.29 Times
2004 2005 2006 2007 20080.95
1
1.05
1.1
1.15
1.2
1.25
1.3
1.35Total Asset Turnover
Total Asset Turnover
31
DUPONT ANALYSIS
Year 2004 2005 2006 2007 2008
21.3 % 24 % 18.8 % 16.9 % 18.6 %
2004 2005 2006 2007 20080.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
DuPont Analysis
DuPont Analysis
32
RETURN ON FIXED ASSETS
Year 2004 2005 2006 2007 2008
1.026 1.206 0.94 0.75 0.809
2004 2005 2006 2007 20080.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
Return on Fixed Assets
Return on Fixed As-sets
33
RETURN ON INVESTMENT
Year 2004 2005 2006 2007 2008
52.5 % 53.5 % 43.9 % 41.0 % 46.0 %
2004 2005 2006 2007 20080.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
Return on Investment
Return on Investment
34
RETURN ON TOTAL EQUITY
Year 2004 2005 2006 2007 2008
26.5 % 26.9 % 22.0 % 21.0 % 23.0 %
2004 2005 2006 2007 20080.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
Return on Total Equity
Return on Total Equity
35
RETURN ON COMMON EQUITY
Year 2004 2005 2006 2007 2008
26.5 % 26.9 % 22.0 % 21.0 % 23.0 %
2004 2005 2006 2007 20080.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%Return on Common Equity
Return on Common Equity
36
HORIZONTAL AND VERTICAL ANALYSIS
37
VERTICAL ANALYSIS OF BALANCE SHEET
Vertical Analysis of Balance Sheet
Years 2004 2005 2006 2007 2008
Total Liabilities & Share Holder's Equity 100 100 100 100 100
Issued & paid up capital 12.73 13.22 14.46 16.79 16.06
Trade & other payables 13.89 10.82 16.93 16.71 17.57
Total Assets 100 100 100 100 100
Fixed assets 17.36 18.20 18.8 22.01 22.73
Long Term Loans 0.7 0.48 0.38 0.53 0.58
Trade debts 0.5 0.79 0.90 1.15 9.571
Investments 0 2.4 1.05 9.66 1.46
38
VERTICAL ANALYSISPROFIT & LOSS A/C
Vertical Analysis of Profit & Loss
years 2004 2005 2006 2007 2008
Net Sales 100 100 100 100 100
C.G.S 71 63 61.67 62.75 71.23
Gross Profit 29 37 38.33 37.25 28.77
Profit after taxation 14.6 15.74 16.5 15.74 14.59
39
HORIZONTAL ANALYSIS OF BALANCE SHEET
Horizontal Analysis of Balance Sheet
years 2004 2005 2006 2007 2008
Total Liabilities & Share Holders Equity
Issued & paid up capital 100 125 156.25 195.3124 195.3124
Reserves 100 120.7805 132.031 137.1522 142.2278
Current Liabilities
Trade & other payables 100 93.74531 167.5806 178.0585 195.7662
Taxation 100 269.6506 76.27451 45.48936 50.94932
ASSETS
fixed assets 100 104.85 123.77 156.02 168.47
Long term loans 100 82.95 75.02 112.70 129.28
Trade debts 100 194.21 253.53 349.77 3044.18
Cash & Bank Balances 100 130.46 152.80 139.25 89.22
40
HORIZONTAL ANALYSISPROFIT & LOSS A/C
HOROZONTAL ANALYSYS OF P&L A/C
years 2004 2005 2006 2007 2008
Net Sales 100 106.20 113.77 119.67 151.16
C.G.S 100 103.90 116.05 124.20 178.08
Gross Profit 100 109.72 110.30 112.74 109.98
selling, mkt, dis Expenses 100 86.86 101.48 116.64 128.02
administrative Expenses 100 103.09 124.29 138.49 148.02
other operating Expenses 100 144.52 142.3 143.70 133.72
Net Profit 100 123.3 113.16 113.54 132.89
41
THANK YOU
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