Financial analysis Pfizer vs. JohnsonJohnson - 1773 Words

Case Analysis Introduction to Finance Introduction – The companies’ profile We chose Johnson and Johnson as a company for our case analysis, and researches have shown that one of its main competitors is Pfizer, Inc. Johnson and Johnson is ranked as the world’s most respected company, and as number 50 in Forbes Top 100 World’s Most Powerful Brands: it is a veritable empire. But as we say, â€Å"Rome wasn’t built in a day†. Johnson and Johnson was founded in 1886 by Brothers Robert and James Johnson, and is headquartered since then in New Brunswick. It started as a simple Surgical Dressing company, but is now renowned for its diversity and its clean Judiciary aspects. Its products range from†¦show more content†¦This value increased from 2.05 in 2010 to 2.38 in 2011. The current ratio of Pfizer in year 2011 is 2.06 times; meaning that the company has 2.06 in assets for every one dollar in current liability. As we can see, the current ratio of Pfizer is slightly larger than that of Johnson and Johnson year 2010 but much less than it in 2011. This signifies that Johnson and Johnson is much more liquid and is able to cover its liabilities more smoothly than Pfizer and without any undue distress. This also showed that Johnson and Johnson is doing really well based on the significant increase in the ratio, also it might mean that Pfizer might be engaging in investment activities and is planning for growth towards its firm. We should not be misguided by these ratios as one must keep in mind that these assumptions based on the current ratio might not be very reliable. Quick ratio = (Current assets – Inventories) Current liabilities OR = Quick assets / Current liabilities The Quick ratio also measures the short-term liquidity of the firm and its ability to pay off its dues. It is considered to be more reliable and accurate than the Current ratio since it deducts the inventory, which, as mentioned earlier, is the least liquid constituent of current assets. More importantly, the Quick ratioShow MoreRelatedMerck vs Pfizer7379 Words   |  30 PagesMerck Co., Inc vs. Pfizer, Inc. Amy Lan Lan Liu Connor Buestad Raghul Subramanian Natalia Cosa ACCT 831 March 16, 2011 Table of Contents: Part 1: History, Background and Core Business †¦...................................................................2 a. Merck Co., Inc. †¦.............................................................................................................. 2 b. Pfizer, Inc. †¦.......Read MoreJohnson and Johnson Analysis9749 Words   |  39 PagesINTRODUCTION Johnson and Johnson have revolutionized the way people think about health care, and has easily become the pinnacle of success by doing so. 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