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GlaxoSmithKline PLC
GSK : NYSE : Health Care
$53.71 | %
Today's Range: 53.50 - 53.98
Avg. Daily Volume: 2,382,800
07/11/14 - 4:03 PM ET

Financial Analysis


GLAXOSMITHKLINE PLC's gross profit margin for the first quarter of its fiscal year 2014 is essentially unchanged when compared to the same period a year ago. Sales and net income have dropped, although the growth in net income underperformed the average competitor within the industry, the revenue growth did not. GLAXOSMITHKLINE PLC has weak liquidity. Currently, the Quick Ratio is 0.77 which shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 8.47% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q1 FY14 Q1 FY13
Net Sales ($mil)9403.039936.22
EBITDA ($mil)0.00.0
EBIT ($mil)1909.292531.15
Net Income ($mil)1113.891460.05


Balance Sheet Q1 FY14 Q1 FY13
Cash & Equiv. ($mil)5967.985948.06
Total Assets ($mil)66211.4265165.82
Total Debt ($mil)28746.0329354.4
Equity ($mil)11032.1810170.19


Profitability Q1 FY14 Q1 FY13
Gross Profit Margin69.570.09
EBITDA Margin0.00.0
Operating Margin20.3125.47
Sales Turnover0.690.67
Return on Assets13.0810.25
Return on Equity78.5265.73
Debt Q1 FY14 Q1 FY13
Current Ratio1.141.18
Debt/Capital0.720.74
Interest Expense0.00.0
Interest Coverage0.00.0


Share Data Q1 FY14 Q1 FY13
Shares outstanding (mil)2407.02422.0
Div / share0.750.69
EPS0.460.61
Book value / share4.584.2
Institutional Own % n/a n/a
Avg Daily Volume2484005.02395257.0

Valuation


BUY. The current P/E ratio indicates a significant discount compared to an average of 28.22 for the Pharmaceuticals industry and a discount compared to the S&P 500 average of 19.71. For additional comparison, its price-to-book ratio of 11.85 indicates a significant premium versus the S&P 500 average of 2.72 and a significant premium versus the industry average of 6.93. The price-to-sales ratio is well above the S&P 500 average, but well below the industry average. The valuation analysis reveals that, GLAXOSMITHKLINE PLC seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
GSK 15.38 Peers 28.22   GSK 11.18 Peers 22.06

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

GSK is trading at a significant discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

GSK is trading at a significant discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
GSK 0.45 Peers 16.43   GSK 0.01 Peers 0.60

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

GSK is trading at a significant discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

GSK trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
GSK 11.85 Peers 6.93   GSK 30.74 Peers -12.68

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

GSK is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

GSK is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
GSK 2.85 Peers 8.82   GSK 5.74 Peers 18.26

Discount. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

GSK is trading at a significant discount to its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

GSK significantly trails its peers on the basis of sales growth

 

 

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