Cipla LimitedAndSun Pharmaceuticals LimitedA comparative study of Financial Statements

Essay by hellraiser27University, Master'sA-, November 2009

download word file, 13 pages 0.0

AbstractThe report is based on the study of annual reports of Cipla Limited and Sun Pharmaceutical Industries Limited for the five years from 2003-2004 to 2007-2008.

The main objective of this study was to apply the concepts learned as a part of this course and understand the business, financial health and the reporting practices followed by these companies. As a part of this report we have tried to analyze the current and past performance trends for the company and predict the future performance and stock prices of the company. To achieve this we have analyzed Revenue Trends, Profitability, Liquidity, Debts, Stocks, Cash Flows and provided a summary at the end of the report.

The scope of the report is limited to our understanding of the Financial Statements based on the current course. The report has to be seen in its completeness along with the excel worksheet containing the past five years financial data of the two firms and various ratios.

IntroductionCipla is a leading pharmaceutical company in India and it is one of the largest exporters of drugs from India with exports contributing around 50% of its annual revenues. It offers a comprehensive range of products ranging from anti-asthma, cardiac to critical care drugs. Over the past 3 years the domestic revenue has grown at a rate of 12% and the export revenue at 27% .

Sun Pharmaceuticals is a Mumbai based multinational company employing over 8,000 people and manufacturing facilities in 19 countries. It specializes in chronic ailment drugs and has been consistently strengthening market share in India. The recent acquisitions of Caraco Pharm has helped Sun to increase its global presence.

Cipla and Sun Pharmaceuticals are comparable companies in terms of revenues and profits which makes it easier to compare the two companies and understand the concepts of...