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Management And Cost Accounting Decision

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Question:

Discuss about the Management and Cost Accounting Decision.
 
 

Answer:

Introduction:

This report has been prepared to analyze the financial performance, position and the profitability state of the company, HIKMA PHARMACEUTICALS PLC. In this report, the financial statement of the HIKMA PHARMACEUTICALS PLC has been analyzed along with the financial statement of its competitive company, INDIVIOR PLC.  Study of ratio analysis has been performed to analyze and identify the financial performance of the company so that a better report could be presented to the board of directors of the company. Being a financial director, all the financial aspect of the company has been investigated and a better financial report has been prepared accordingly.

HIKMA PHARMACEUTICALS PLC is a global pharmaceutical organization which is based in the London market. This company manufactures non branded and branded generic products. This company has been founded in Jordan in 1978. Currently, it is listed in the London Stock Exchange. This company has its operations in various countries and the market base and the share of the company is continuously enhancing. According to the reports and the articles of the company, it has been evaluated that the company share and the revenue is continuously enhancing (Home, 2017). The vision and the goals of the company depict that the company is required to manage the strategic acquisition and the organic growth to manage and develop the business and sustain the high level of responsibility and the ethics which are quite central to the manner we administer.

Further, the study has been performed over the financial statement and the liquidity position, profitability position, solvency position and efficiency position of the company. For analyzing the performance of the company, it is required to manage and identify the ratio analysis of the company. The ratio analysis of the company is as follows:

Through the above analysis over the key financial ratios of the company, it has been expressed that the current financial position of the company is average. Various changes have taken place into the performance and the position of the company. More, the position of the company has also been changed (Morningstar, 2017). The current performance and the position of the company express that the position of the company is bit better from last 5 years in the market.

Profitability, earnings and dividends:

By looking at the profitability ratios, it has found that various changes have taken place into the performance and the position of the company. More, the position of the company has also been changed. In 2010, the operating margin of the company was 45.20% and consequently, in 2016, it has become 50.56%. This depict that various changes have taken place into the operations and the activities of the company such as the expenses on marketing, sales and general administration has been enhanced in current year as well as the company has invested huge amount on research to manage the performance of the company. The given chart depict that the operating profit of both the companies are very different from each other. In HIKMA PHARMACEUTICALS, the operating profit has enhanced but with various fluctuations whereas the operating profit of the INDIVIOUR PLC is enhancing continuously (Home, 2017). Further, it has also been found that various internal and external factors have impacted over the position and the performance of the company.

Further, the study has been performed over the earnings of the company and it explained that the position and the performance of the company is enhancing continuously of both the companies. Through the analysis and below given chart, it found that numerous alternations have taken place into HIKMA PHARAMCEUTICALS LIMITED which have impacted over the earnings of the company. The analysis explains that the earnings of the HIKMA PHARAMCEUTICALS LIMITED is average whereas the earings of he INDIVIOUR have been enahnced videly.

Lastly, the dividends and the stuructre of the company has been analyzed to identify the posiiton and the performace of the company as well as it has also been analyzed that what dividend policies are performed by the company. The given figures explains that the company has paid enough dividend accoridng to the performance and he position of the company (Elton, Gruber, Brown and Goetzmann, 2009).

Cash Flows From Financing Activities

 2016

2015 

2014 

Debt issued

816000000

5290100000

246000000

Debt repayment

-663000000

-361000000

-121000000

Common stock issued

 

1000000

 

Common stock repurchased

 

 

 

Dividend paid

-77000000

-64000000

-55000000

Other financing activities

-57000000

-28000000

-40000000

Net cash provided by (used for) financing activities

19000000

77000000

30000000

According to the above evaluation and the study, it has been evaluated that the HIKMA PHARAMCEUTICALS LIMITED is performing well in the market but the increment rate of the company is bit lower than the other competetive comapnies. Current report and financial data of the company explains that the cash flow position of the company has been lower (Morningstar, 2018). Thus, it has been originated that company is required to make various chnages such as invetsment into such opportunities where huge return could be got and manage the cash flow in an efficienct way to become better in the market.

 

Financial stability and liquidity:

Further, the study has been performed over the financial data of the company of last 5 years to analyze and identify the position of the company in terms of liquidity and operations of the company. Through the analysis and study, it has been originated that the liquid position of the company has been changed in last 5 years. Through the analysis, it has also been found that the current ratio position of the company has been entered and despite all the financial crisis and fluctuations in the economy, HIKMA has managed to set a better position of the liquidity of the company (Drury, 2013). Further, it has also been analyzed that the position of the liquidity of the company is bit better than the position and liquidity performance of the competitive company, currently, the current ratio of the company is 1.58 which depict that the position is quite competitive and company is able to pay back all the debts at any time.

Further, the quick ratio of the company also depict that the position and the performance has been changed in last 5 years. Further, it has also been found that the quick ratio position of the company has been changed and despite all the financial crisis and fluctuations in the economy, HIKMA has managed to set a better position of the liquidity of the company. Further, it has also been analyzed that the position of the liquidity of the company is bit better than the position and liquidity performance of the competitive company, currently, the quick ratio of the company is 1.08 which depict that the position is quite competitive and company is able to pay back all the quick debts at any time.

More, the position of the efficiency and solvency position of the company has been analyzed to identify the position and the performance of the company in last 5 years and with the comparison of the competitor position. Through the analysis over both the position of the company, it has been found that the company is performing way better from last 5 years. The ratios depict that the position of the company is becoming better and company is performing well to manage all the functions and features of the company (Deegan, 2013).

Through the analysis, it has been evaluated that the financial position of the company is average and it depict that the position and the condition of the company is enhancing rapidly. Through the analysis over both the position of the company, it has been found that the company is performing way better from last 5 years. The ratios depict that the position of the company is becoming better and company is performing well to manage all the functions and features of the company.

Further, the articles and news about the company has also been analyzed to identify the position of the company in the market and various financial changes of the company. According to the Morningstar (2017), this company is performing very well and in recent years, various positive changes have taken place into the performance of the company. Further, it has also been identified that the London stock exchange (2017) depict that the company is depicting various good positions despite of the entire financial crisis situation and the worst economic situation. According to the study of Deegan (2013), dividend payout policies of the company are quite attractive and it attracts more investors to invest into the market and enhance the position and the performance of the company.

More, Home (2017) depict that this company is performing its business into various other countries as well t enhance the market share as well as the profitability position of the company.  The vision and the goals of the company depict that the company is required to manage the strategic acquisition and the organic growth to manage and develop the business and sustain the high level of responsibility and the ethics which are quite central to the manner we administer (Morningstar, 2017). According to the financial statement of the company, the position and the sales revenue of the company is enhancing rapidly and depicts that the position of the company would be better in near future (Damodaran, 2011).

Corporate governance:

Further, the study has been done over the corporate governance policies of the HIKMA PHARAMCEUTICALS LIMITED to analyze the psoition of the in the society as well as in the market. Through the report, it has been evaluated that the company is having a great knowldgge and the strategies about the ethics, code of cnduct, quality services, betteremnt of the society etc to manage the position of the company in the market. The vision and the goals of the company depict that the company is required to manage the strategic acquisition and the organic growth to manage and develop the business and sustain the high level of responsibility and the ethics which are quite central to the manner we administer (Damodaran, 2011).

According to the evaluation over the company, the comapny has never involved in any such case in which the rights of the pubic or society get destroyed. The services and the products of the company are very competitive and offer good health to the people. This company take care the society in a good manner and follow all the rules and regulations of the government to make a better society.

According to the study over the financial data of the company, it has been evaluated that the performance and the position of the company is enhancing average in the market and it depicts that the position and the performance of the company is also average. The net profit of the company has been analyzed according to the total assets of the company. Through the analysis over the company, it has been originated that the Net profit of the company in consideration of the total assets is quite average (Davis.and Davis, 2011). The company is required to make various changes to maintain and manage the performance and the position of the company. The comapny is required to make various changes into the operations and the functions to manage the position of the company.

Conclusion:

To conclude, the company is required to make various changes to maintain and manage the performance and the position of the company. Through this analysis, it has been examined that the comapny is required to make various changes into the operations and the functions to manage the position of the company.

 

References:

Damodaran, A, 2011, Applied corporate finance,3rd edition, John Wiley and sons, USA

Davies, T. and Crawford, I., 2011. Business accounting and finance. Pearson.

Davis, C. E.and Davis, E., 2011, Managerial accounting, John Wiley & Sons, USA.

Deegan, C., 2013. Financial accounting theory. McGraw-Hill Education Australia.

DRURY, C. M. 2013. Management and cost accounting. Springer.

Elton, E.J., Gruber, M.J., Brown, S.J., and Goetzmann, W.N. 2009. Modern Portfolio Theory and Investment Analysis. John Wiley and Sons.

Home. 2017. HIKMA PHARMACEUTICALS PLC. Retrieved from https://www.hikma.com/en/index.html available as on 15th Nov 2017.

Home. 2017. INDIVIOR PLC. Retrieved from https://www.indivior.com/ available as on 15th Nov 2017.

London stock exchange. 2017. HIKMA PHARMACEUTICALS PLC. Retrieved from https://www.londonstockexchange.com/exchange/prices-and-markets/stocks/summary/company-summary/GB00B0LCW083GBGBXSTMM.html available as on 15th Nov 2017.

Morningstar. 2017. HIKMA PHARMACEUTICALS PLC. Retrieved from https://performance.morningstar.com/stock/performance-return.action?t=HIK&region=gbr&culture=en-US available as on 15th Nov 2017.

Morningstar. 2017. INDIVIOR PLC. Retrieved from https://financials.morningstar.com/cash-flow/cf.html?t=INDV&region=gbr&culture=en-US available as on 15th Nov 2017.

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