1. BRIEF INTRO
PHARMACEUTICAL SECTOR
 OVERLOOK OF ITS FINANCIAL POSITION

2. COMMON SIZE OF INCOME STATEMENT AND
BALANCE SHEET
Year 2008 2009
COGS 71.23 % 75.91 %
GP 28.77 % 24.09 %
O.Expenses 15.35 % 16.31 %
Other O.income 9.55 % 2.97 %
O.P 22.96 % 10.74 %
Interest Expense 0.57 % 0.10 %
N.P 14.59 % 6.35%
Year 2008 2009
Equity 78.68 % 73.62 %
Non C.L 3.13 % 3.45 %
C.L 18.24 % 22.93 %
Non C.A 24.99 % 25.78 %
C.A 75.01 % 74.22 %

3. CASH FLOW
2008 2009 CHANGE
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated form operations 6,33,333 20,83,606 229%
Staff gratuity paid 44,827 40,384
Taxes Paid 9,82,457 9,53,131
Decrease/increase in longterm loans to emp 7,911 367
Increase/ decrease in long term deposite 20 239
Net Cash from/ Used in operating activities 4,01,842 10,90,219 371%
CASH FLOWS FROM INVESTING ACTIVITIES
Fixed capital expenditure 4,75,032 4,94,178 4%
Proceeds from sales of operating assets 9,07,993 53,573
Investment Encashed 1,00,000 1,75,000 75%
Return on Investment 39,200 24,172
Net Cash / from investing activities 5,72,161 2,41,433 142%
CASH FLOW FROM FINANCING ACTIVITIES
Dividend paid 16,98,167 11,89,558 30%
Net decrease in cash & cash equalent 15,27,848 3,40,772
Net cash & cash equalent at the beg. Of year 42,52,745 27,24,897
Net cash & cash equalent at the end of year 27,24,897 23,84,125

4. FINANCIAL RATIOS
GSK WYETH SANOFI AVENTIS
RATIOS
2007 2008 2009 2007 2008 2009 2007 2008 2009
GPM(%) 37.2% 28.8% 24.1% 34.9% 29.6% 21.7% 27.8% 24.3% 24.2%
OPM(%) 25.2% 23.0% 10.74% 15.4% 10.7% 0.04% 4.6% 3.9% 5.7%
NPM(%) 15.7% 14.5% 6.4% 11.6% 6.1% 3.8% 1.9% 0.9% 2.5%
ICR(times) 231.2 40.0 110.2 377.38 229.7 0.2 2.8 2.0 2.9
T.A.Turnover 1.0 1.3 1.3 1.15 1.58 1.59 1.6 1.5 2.0
O.F.A Turnover 4.7 5.5 5.7 9.69 10.52 12.84 4.9 3.6 4.8
R.O.A(%) 16.4% 18.3% 8.6% 13.4% 9.6% 6.0% 3.1% 1.3% 4.9%
R.O.E(%) 20.6% 23.3% 11.6% 13.4% 9.6% 8.8% 6.8% 3.4% 12.9%
Doupon 21.5% 23.3% 11.6% 17.4% 12.8% 8.8% 6.8% 3.4% 12.9%
R.O.CE(%) 32.9% 36.8% 11.6% 23.0% 22.5% 0.1% 34.5% 34.4% 29.7%
R.O.I(%) 16.4% 18.3% 8.6% 13.4% 9.6% 6.0% 3.1% 1.3% 4.9%
Current ratio 4.27 4.11 3.24 3.92 3.43 2.71 1.31 0.98 0.98
Quick Ratio 2.92 2.25 1.58 2.52 1.38 0.98 0.41 0.35 0.42
E.M 1.31 1.27 1.36 1.29 1.33 1.48 2.18 2.67 2.66

5. SWOT ANALYSIS
STRENGTHS WEAKNESSES
More equity finance Expenses are greater
More profitability  Assets use inefficiently
More ability to service debt
OPPORTUNITIES THREATS
Market Growth Greater ROE of Competitor
More liquidity
Greater attraction for debtor

6. RECOMMENDATION
(COMPANY ANALYST)
 Cost need to be control by either going for forward or backward integration.
 Total asset turnover and operating fixed asset turnover should be increase to the
level of industry.
 Aggressive investment in Pakistan from GSK worldwide.

7. RECOMMENDATION
(INVESTOR ANALYST)
Return on Equity
RATIOS GSK WYETH SANOFI AVENTIS
2009 2008 2007 2009 2008 2007 2009 2008 2007
I.R.C 110.2 40.0 231.2 0.2 229.7 377.38 2.9 2.0 2.8
The profits of GSK are still greater than the profits of its competitors and even greater than
the industry ratio thus long term investment in GSK is better and more reliable
Interest Coverage Ratio
RATIOS GSK WYETH SANOFI AVENTIS
2009 2008 2007 2009 2008 2007 2009 2008 2007
I.R.C 110.2 40.0 231.2 0.2 229.7 377.38 2.9 2.0 2.8
Bankers will also consider to invest in the GSK as it has better ICR which shows that it has
greater the ability service its contractual obligation