Project Report of

Financial Management

Virtual University of
Pakistan
 Presented by

MUHAMMAD AHMAD RAZA

Reg. no. ------------

M.B.A
 COMPANY INFO
We are a global, broad-based health care company devoted to
discovering new medicines, new technologies and new ways to manage
health.
With over 70,000 employees worldwide and a global presence
in more than 130 countries, Abbott is committed to improving
people's lives by providing cost effective health care products and
services that consistently meet the needs of our customers.
Abbott Pakistan is part of the global healthcare corporation of
Abbott Laboratories, Chicago, USA.
Abbott started operations in Pakistan as a marketing affiliate in 1948;
the company has steadily expanded to comprise a work force of over
1500 employees. Currently two manufacturing facilities located at
Landhi and Korangi in Karachi continue to use innovative technology to
produce top quality pharmaceutical products.
On June 29, 2005 Abbott Pakistan Achieved Class 'A'
accreditation against the Oliver Wight ABCD Check list. This was
an outstanding achievement, which puts Abbott Pakistan amongst
some of the best global companies in terms of operational excellence.
 PRINCIPAL ACTIVITES
The company’s principal activities are to manufacture,
import and market research based pharmaceutical,
nutritional ,diagnostic, and consumer products and
provides toll manufacturing services. It operates through
following three segments:
Pharmaceutical
Nutritional
Manufacturing and marketing diagnostic equipment
The promise of our company is in the promise that our
work holds for health and for life
Abbott laboratories (PAK) ltd. Company

Profile Snapshot
Company : Abbott laboratories (PAK) ltd.

2008 Sales : 7,05,90,11,000

Major Industry : Drugs , Cosmetics &
Health care

Sub Industry : Ethical drugs

manufacturers

Country : PAKISTAN
Employees : 1500
General Info.
Abbott Laboratories (PAK) Ltd.
Opposite radio Pakistan transmission
Hyderabad road
Karachi , Sindh , Pakistan.
www.abbott.com.pk
T: 92 21 501 50 45 9
FINANCIAL RATIO

ANALYSIS
    Ratios
    year 2006 year 2007 year 2008
LIQUIDITY RATIOS        
Current ratio   4.76:1 3.55:1 2.54:1
Quick ratio   3.08:1 2:01 1.28:1
LEVERAGE / DEBT RATIOS        
Debt-to-equity ratio % 18.71 26.9 40.56
Long-term-debt to total capitalization ratio % 15.76 21.19 28.86
COVERAGE RATIO        
Interest coverage ratio times 393.43 552.48 201.49
ACTIVITY / TURNOVER RATIOS        
Receivable turnover ratio times 33.07 38.79 52.71
Average collection period days 11 9 7
Payable turnover ratio times 1.07 1.53 1.19
Average payment period days 341 239 307
Inventory turnover ratio times 2.78 2.94 3.26
Inventory turnover in days days 131 124 112
Total assets / Capital turnover ratio times 1.17 1.4 1.41
PROFITABILITY RATIOS        
Gross profit margin ratio % 42.09 41.76 29.72
Net profit margin ratio % 16.98 18.48 4.87
Return on equity (ROE) % 23.57 32.79 9.64
Return on investments / assets (ROI) % 19.86 25.84 6.86
 LIQUIDITY RATIOS
These ratios measure a firm’s ability to meet short-term obligations & show it’s
short-term financial position.

3 current
ratio
2 quick ratio
1

0
2006 2007 2008
 LEVERAGE / DEBT RATIOS
These ratios shows the extent to which the is financed by debt.
50

40
De bt-to-Equity
30 ratio

20 Total
Capitalization
10
ratio
0
2006 2007 2008

COVERAGE RATIO
These ratios relate the financial charges of a firm to its ability to service or cover them.

600
500
400
Interest
300
Coverage
200 ratio
100
0
2006 2007 2008
 ACTIVITY / TURNOVER RATIOS
These ratios measures that how effectively the firm is using its assets.

60
1.6
50 1.4
1.2
40
1
30 Debtors 0.8 Creditors
turnover ratio 0.6 turnover ratio
20
0.4
10
0.2
0 0
2006 2007 2008 2006 2007 2008

3.3
1.6
1.4 3.2
1.2 3.1
1 3
0.8 Total assets 2.9 Inventory
0.6 turnover ratio 2.8 turnover ratio
0.4 2.7
0.2 2.6
0 2.5
2006 2007 2008 2006 2007 2008
 PROFITABILITY RATIOS
These ratios relate the profit to sales & investment.

50
20
40
15
30
GP margin
20 10 NP m argin
ratio
ratio
10 5

0
2006 2007 2008 0
2006 2007 2008

35 30
30 25
25 20
20
15
15 ROE ROI
10
10
5 5

0 0
2006 2007 2008 2006 2007 2008