Submitted by:

Name

Praveen Sathyanarayan
Rahul Sharma
Shishir Sinha
Shweta Singh
Supriya Vadakkeveetil

Roll No

140301016
140301017
140301018
140301019
140301020

A Comparative Study of GSK and Safoni

Glaxosmithkline Pharma Ltd
Glaxosmithkline Pharma is one of the leading research based pharmaceutical and healthcare
company. The company is committed to improve the quality of human life by enabling people to do
more, feel better and live longer. The company was started in 1924, headquarters in Mumbai
GSK has 4,500 employees in India. Their culture and values are summed up in

Performance with integrity

Entrepreneurial spirit
Focus on innovation
Sense of urgency
Passion for achievement

They are also part of corporate social responsibility, where they provide money, medicines, time
and equipment to non-profit organizations to help improve health and education in underserved
communities. They focus on programs that are 'innovative, sustainable and bring real benefits to
those most in need'.
D.S Parekh is the chairman and they have other 14 members as board of directors.

Sanofi India Ltd

Sanofi India Limited in India provides medicines for the treatment of patients in several therapeutic
areas: cardiology, thrombosis, oncology, diabetes, central nervous system, internal medicine and
consumer healthcare. The company was started in 1956, headquarters in Mumbai
Sanofi India has 2,300 employees. It has state-of-the-art manufacturing facilities in Ankleshwar and
Goa, where active pharmaceutical ingredients and formulations are manufactured.
The companys values are

Innovation
Confidence
Respect
Solidarity
Integrity

They are also part of corporate social responsibility in the business of healthcare and Corporate
Social. They are running 7 different programmes which are helping people to lead a better life.
Vijay Mallya is the chairman and they have other 10 members as board of directors

2|Page

Ratio Analysis

A Comparative Study of GSK and Safoni

It helps in evaluating relationship among financial statement items. The ratios are used to identify
trends over time for one company or to compare two or more companies at one point in time.
Financial statement ratio analysis focuses on three key aspects of a business: liquidity, profitability,
market performance and solvency

Ratio Analysis
Glaxosmithkline Pharma
Ratio Analysis

Formulas

Current Ratio

Current Asset/Current Liability

Glaxosmithline Pharma
Value
Result
260173.23/88306.54
2.946

D/E Ratio

Total Debt/Shareholders Equity

113267.8/201719.01

0.56

Operating Profit Margin

EBIT- Other Income/Net Operating Revenues

50219.71/254614.74

19.72

Net Profit Margin

NPAT/Average Equity

50188.24/254614.74*100

19.71

ROE

NPAT/Average Capital Employed

50188.24/201360.27*100

24.92

ROCE

EBIT/Average Capital Employed

72932.03/226036.02*100

32.27

P/B Ratio

Market Price/Book Value of Shares

3202.50/237.73

13.47

Receivable Turnover Ratio

Gross Sales/Book Value of Shares

261245.57/10614.56

24.61

Percentage Dividend

Dividend paid to equity shareholders/No of

Equity Shares

42351.50/8470.30*100

500

Safoni Pharma
Ratio Analysis

Formulas

Safoni

Current Ratio

Current Asset/Current Liability

Value
94714/43538

D/E Ratio

Total Debt/Shareholders Equity

49809/134670

0.37

Operating Profit Margin

EBIT- Other Income/Net Operating Revenues

30564/180886

16.9

Net Profit Margin

NPAT/Average Equity

26518/180886

14.66

ROE

NPAT/Average Capital Employed

26518/127541*100

20.79

ROCE

EBIT/Average Capital Employed

38888/132704.5

29.30

P/B Ratio

Market Price/Book Value of Shares

3439.55/584.75

5.88

Receivable Turnover Ratio

Gross Sales/Book Value of Shares

185485/10860.5

17.7

Percentage Dividend

Dividend paid to equity shareholders/No of

Equity Shares

10364/2303

450

3|Page

Result
2.175

A Comparative Study of GSK and Safoni

Comparison
Ratio Analysis

Formulas

Current Ratio

Current Asset/Current Liability

Safoni
2.175

GSK
2.946

D/E Ratio

Total Debt/Shareholders Equity

0.37

0.56

Operating Profit Margin

EBIT- Other Income/Net Operating Revenues

16.9

19.72

Net Profit Margin

NPAT/Average Equity

14.66

19.71

ROE

NPAT/Average Capital Employed

20.79

24.92

ROCE

EBIT/Average Capital Employed

29.30

32.27

P/B Ratio

Market Price/Book Value of Shares

5.88

13.47

Receivable Turnover Ratio

Gross Sales/Book Value of Shares

17.7

24.61

Percentage Dividend

Dividend paid to equity shareholders/No of Equity

Shares

450

500

Analysis
From the above analysis we can say that the Glaxosmithkline current ratio is 2.946 whereas Safoni
has a current ratio of 2.175. If you look at the D/E ratio then GSK has 0.56 and Safoni has 0.37, GSK
has more financial leverage than Safoni. From Bankers prospective they would prefer Safoni
compared to GSK. But this (D/E Ratio) will not be the only factor that a banker will consider before
approving loan; other factors include time interest earned and ROCE.A high operating profit
margin means that the company has good cost control and if you check the above table GSK has
better Operating profit margin ratio that is 19.72 Net profit margin ratio is very useful a higher net
profit margin means that company is converting sales into actual profits, on the same line if we
check both GSK and Safoni then we can see that GSK has 19.71 whereas Safoni has 14.66 that clearly
show that GSK stands better compared to Safoni.
ROE helps in measuring the ability to generate profits from shareholders investment and also show
how effective is the companys management. As we compare both the companies GSK providing
better return compared to Safoni as GSK ROE is 24.92 compared to 20.79. Even the ROCE is better
32.27 in GSK compared to 29.30 in Safoni.
When we see the receivable turnover ratio we can see that Safoni has better turnover time compared
to GSK. When it comes to dividend GSK has performed better compared to Safoni.GSK has
provided 500 compared to 450 from Safoni.

4|Page

A Comparative Study of GSK and Safoni

Conclusion:
It is to be concluded for this study that, both the companies are doing well in the same segment.
When we compare both the firms for the investors then we would like to recommend
Glaxosmithkline would be a better bet compared to Safoni. So investors who have already invested
please hold the shares and for the new investors we would say start investing in Glaxosmithkline

5|Page