Acc501 Module 2 Case

ACC501
12-9-13
Debra Moore
Daphne Casucci
Module 2 case

Financial Ratio

Balance Sheet
The shareholder equity is the difference between total assets and total liabilities on the balance sheet. The companies usually disclose there earnings per share which is something that can be compared company to company. Merck in 2012 authorize 6,500,000,000 of common stock into 20,000,000 into preferred stock. Of the authorized shares of preferred stock 11, 500, 00 which was designated 6% mandatory convertible preferred stock. This was in connection restructuring of AMI.   Novartis doesn’t have preferred stock either but it does have treasury stock.   Both companies report treasury shares but they put in a caveat under treasury shares that says the difference between this amount and transaction price on purchases or sales of treasury shares with third parties or the value of services received for shares allocated to associates as part of share based compensation arrangements are recorded in “Retained earnings” in the consolidated statements of changes in equity.
Income Statement
The basic earnings per share for Merck for 2012 are 2.03 the diluted is 2.00. The basic earnings per share for the company of Novartis are 5.25. The diluted earnings per share are 3.785. There are no discontinued operations.   They don’t disclose any stock option plans for their employees.
Financial Ratio

12/31/2012 $ m | Novartis | Merck |
Net Income |             9,618.00 | 6,299.00 |
Sales |           56,673.00 | 47,267.00 |
Net Profit Margin |                     0.17 | 0.13 |
| | |
Gross Profit |           11,511.00 | 6,299.00 |
Sales |           56,673.00 | 30,821.00 |
Gross Profit Margin |                     0.20 | 0.20 |
  |   |   |
net income |             9,618.00 | 6,299.00 |
stockholders equity |           69,219.00 | 53,020.00 |
return on equity |                     0.14 | 0.12 |
  |   |   |
Current Assets |           13,141.00 | 13,451.00 |
Current liabilities |...