Sanofi is a French multinational pharmaceutical company that was formed in 2004 with the merger of Sanofi-Synthélabo and Aventis. The company is specialized in research and development, manufacturing and marketing of pharmaceutical products. It is the world's fourth larger company by prescription sales and the fifth in the generic pharmaceutical industry. The company covers several therapeutic areas like cardiovascular, diabetes, thrombosis, vaccines and others. The pharmaceutical industry is considered as one of the most important and profitable industry in the world.
With a population that is constantly growing and people that are living longer the pharmaceutical industry is very prosperous. There are also a lot of emerging market like China, Russia, South Korea and Mexico that are very interesting for the big pharmaceutical companies. Today we estimate the global spending on prescription drugs at more than €650 billion .
The problem with this industry is that it is saturated. There are many big companies on the market like Sanofi, Bayer, or Pfizer. The competition is very harsh and doesn't give any place for new entrants. The industry is also not very innovative because of all the regulations pharmaceutical companies have to face. It is very difficult for them to launch new products because they necessitate many years of research and development. The test phase is very long for medication. Companies tries to compete with each other by trying to be more efficient and productive and secure all their patents in order to keep and advantage on the competition.
[...] Return On Assets = Net Income/Average Assets - 2007: 7737,77/105723,33 = 0,07 - 2011: 7371,87/129703,67 = 0,06 In 2011, the company's ROA was meaning that for every $100 invested, the company was able to make a profit, which is very low. We can see this ratio only decreased from 1 point since 2007. The company doesn't have an efficient use of assets. Return On Equity = (Net Income-Preferred Dividends)/Shareholder Equity - 2007: (7737,77-0)/65483,11 = 0,12 - 2011: (7371,87-0)/72797,98 = 0,10 In 2011, the company's ROE was meaning that for every $100 invested by the shareholders the company was able to make a $10 profit. We can see the ROE decreased from 2007, where it was 12%. [...]
[...] The three important issues I learned: - How to calculate and interpret all the datas and ratios - How to create and read correctly an Income Statement and a Balance Sheet. - How to analyze a company and what are the financial analysis tools that I should use. c. Why is it important to have basic knowledge in financial statements? It is important because it is very useful to study closely the company in order to know its current situation and future trends. It is useful to help find the weak points of a company, find the areas where you have to invest in or cut back. [...]
[...] Strengths and weaknesses 14 b. If I was a consultant for Sanofi 15 c. The four other questions that might be useful to investigate: 15 d. Stock Prices 16 e. Shareholder viewpoint 16 f. Banker or lender viewpoint 16 g. Employee viewpoint 17 G. Reflection 17 a. Why was it a valuable experience 17 b. The three important issues I learned: 17 c. Why is it important to have basic knowledge in financial statements? [...]
[...] Shareholder viewpoint As a future shareholder of the Sanofi Company, I would look in the financial statements what are the trends of the company, if it's growing and if it's profitable. I would see if there is a good current ratio, as a high current ratio is bad for shareholders because current assets do not generate high return percentages. I would look more closely at the shareholder's equity of the company and see what is the frequency of the dividends. [...]
[...] - The company has more dept than before. - The company is far less profitable than other companies in the industry. My recommendations: The company should stop investing that much in the raw materials and production because it doesn't have a sufficient impact on the sales. The products are more expensive to produce and don't generate as much money as before. They are less profitable for the company. Based on the number of days in stocks, the company might have some difficulties to sell its products. [...]
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