Question

I would like you to perform a ratio analysis on the financial statements. You will want to compute ratios for your company for the last two years. Do not compute each ratio you learned about for your company. There may be some that are not relevant. Rather focus on those eight ratios that you feel are the most important and relevant to analyze how your company is doing.

Year ended December 31, 2017 2016 2018 1 2015 2014 15 964 6956 11 836 110 000 807 9 485 6 867 11 856 104 871 7777 5 447 13 862 62556 2266 093 10 899 11 172 10 805 105 193 108 711 87 826 (USD millions) BALANCE SHEET DATA Cash, cash equivalents and marketable securities & derivative financial instruments Inventories Other current assets Non-current assets Assets of disposal group held for sale Assets related to discontinued operations Total assets Trade accounts payable Other current liabilities Non-current liabilities Liabilities of disposal group held for sale Liabilities related to discontinued operations Total liabilities Issued share capital and reserves attributable to shareholders of Novartis AG Non-controlling interests Total equity Total liabilities and equity Net assets Outstanding share capital Total outstanding shares (millions) 145 563 5 556 24 000 37 264 51 133 079 5 169 18 234 35 449 130 124 4873 17 336 33 024 131 556 5668 18 040 30 726 6 801 125 387 5 419 19 136 27 570 2418 54 543 66 871 58 852 55 233 54 434 78 614 78 78 692 145 563 78 692 875 2 311 74 168 59 74 227 133 079 74 227 869 2317 74 832 59 74 891 130 124 74 891 896 2 374 77 046 76 77 122 131 556 77 122 890 2374 70 766 78 70 844 125 387 70 844 898 2 399 The disposal group held for sale relate to the assets and liabilities of the pending divestment of the Sandoz US dermatology business and generic US oral solids portfolio to Aurobindo Pharma USA Inc., as announced on September 6, 2018 (see "item 18. Financial Statements - Note 2 Significant pending transactions). ? A description of discontined operations can be found in footnote 1 of the table above.

Answer 1

Overall performance of the company is good,

1.Liquidity to ratio of the company is low as compared to last year

2.Asset utilization ratio improved

3.profitability ratio has increased

4.coverage ratio is maintained similar to previous year

			2018			2017
Liquidity ratio
	current ratio	current assets/current liabilities	(cash, cash equivalents and marketable securities and derivative financial insturemts+ inventeries)/(accounts payable+other current liabilities)
			34756	1.175937		28188	1.204461
			29556			23403
	Quick ratio	(Cash,marketable securities and receivables)/current liabilities	(cash, cash equivalents and marketable securities and derivative financial insturemts)/(accounts payable+other current liabilities)
			27800	0.940587		21341	0.911892
			29556			23403
Asset utilization ratio
	Fixed Asset turnover ratio		Net sales/Average net fixed assets
			51900/110000	0.471818		49109/104871	0.46828
			51900/138782	0.373968		49109/131602	0.373163
	Average total assets		15694+6956+11836+110000
			144486			133079
			9485+6867+11856+104871
			133079			130124
Profitability ratio
	Profit Margin	Net income/net sales	277565	0.243044		263203	0.156855
			138782.5			131601.5
	Return on assets	Net income/ avg total assets
			12614/138783	0.09089		7703/131602	0.058533
Coverage ratio
	Debt to Equity ratio	Total Debt/ Shareholders Equity
			37264/78614	0.474012		35449/74168	0.477955
	Debt to total assets		Total debt/ Total assets
			37264/144486	0.257907		35449/133079	0.266376