Accounting Financial Statement

In: Business and Management

Submitted By finkenhof
Words 1583
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This second case study tasks to review the financial statements of Merck & Co. Inc. and Novartis International AG for additional information with emphasis to review the income statement, balance sheet, and computation of ratios. Financial Analysis is one of the most important aspects in analyzing the financial statements of the organization as well as its performance across the period. Investors are able to evaluate the performance of companies adequately.
Company Overview Merck & Co. (or ‘company1’) is one of the largest pharmaceutical companies in the world. The company continues to demonstrate its ability to deliver first-to-market launches, thereby gaining a competitive advantage over its peers. However, patent expiries could lead to generic erosion in product sales. Novartis International (or ‘company2’) is one of the Big Pharma companies with strong presence in diverse pharmaceutical segments. It is engaged in the research, development, manufacture, and marketing of branded drugs, generic pharmaceutical products, preventive vaccines, diagnostic tolls, and consumer health products. Novartis’s diverse product portfolio has enabled it to record a robust revenue growth rate. However, the company is facing competition from generic manufacturers as a result of patent expiries.
Balance Sheet Company1 discloses all aspects related to shareholders equity, which includes common stock, retained earnings, other comprehensive income as well as treasury stock. Company2 does not disclose components of shareholder’s equity. It does not disclose the number of authorized shares/issued shares, and ignores comprehensive income and minority interest in its shareholder’s equity section.
Preferred Shares Both companies do not have any preferred shares that are accounted in the financial statements of the…...

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