I have chosen Topic 8 as my rap project, now it come to the point that need to analysis the ratios, i have chose GSK company as my project target.
it come out one question, GSK is a pharmaceutical organization combing pharmaceutical, vaccine and consumer health product, as requirement, all of them is under pharmaceutical topic 8. the financial statement is the consolidated three of the above area.
my questions is, since GSK did not provide detail cost figures separately for 3 diversion, only revenue is individually mentioned, could i use the consolidated financial figures to calculate the ratios?
(my competitor company financial statement is half separate financial statement which including a diagnosis department) separate part are only income and cost of pharmaceutical branch
@chang – it looks like you have no choice but to use the consolidated results since there is no way to isolate them individually.
The key principle would be to try to compare like-for-like. Hopefully, your competitor has the a similar business portfolio as GSK. If not, it is not a reason for failure but you should recognize that as a limitation.
I have a question , is it necessary to use gross profit margin ratio for ratio analysis . I am calculating PBIT margin , Net profit margin , Asset turnover , current ratio , debt equity ratio and interest coverage ratio
thanks for reply, the competitor which consist a little branch that is inrelevant to pharmaceutical industry which is a research department, i think i am pretty clear to recognize that as my limitations thanks
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