word analysis

Evaluating Financial Statements

Financial statements are used to help determine the financial health and analyze the status of a company. We are using the financial ratios to determine which pharmaceutical company is performing better. The companies that are being compared with standard industry are Pfizer and Johnson and Johnson.

Comparison

Johnson and Johnson is comparatively better than industry or Pfizer. The company’s profitable is margin is 21.95% compared with Industry’s at 14.85% and Pfizer’s at 14.23%. Johnson and Johnson is showing a better return on assets and equity. They also have a less debt to equity ratio. (Barnes, 1987).

Johnson and Johnson appears to be performing above average while Pfizer is below the industry average. This shows a clear indication that Johnson and Johnson is performing better than Pfizer.

Conclusion

The financial spreadsheet included with this report show that Johnson and Johnson has been performing better than Pfizer Pharmaceutical. The comparison to Industry standard is way above the average rate.

References

Barnes, P. (1987, December). The analysis and use of financial ratios: A review article. Journal of Business Finance & Accounting, 14(4), 449-461. doi:10.1111/j.1468-5957.1987.tb00106.x