LIQUIDITY RATIOS CURRENT RATIO The relationship of current assets and current liabilities, it is also known as working capital

l ratio or bankers ratio. The higher the current ratio, the more capable the company is of paying its obligations.
Dec11 Current ratio 2.46 Dec10 2.94 Dec09 3.06 Dec08 1.94 Dec07 0.91

INTERPRETATION The ideal ratio of current ratio is 2:1 which indicates that company has fewer current assets in order to meet its current liabilities. This is obviously a good position for the firm to be in. Companys current ratio has increased from 0.91in Dec0.91 to 2.46 Dec11which is a good indicator for the firm.

QUICK RATIO It expresses the relationship of a companys current assets that can be quickly converted into cash and its current liabilities. It is in fact the measure of the Instant debt paying ability of the business enterprise.
Dec11 Quick ratio 2.11 Dec10 2.53 Dec09 2.63 Dec08 1.58 Dec07 0.54

INTERPRETATION The ideal ratio of quick ratio is 1:1 which indicates that company has more cash invested in the form of liquid assets so it is losing some of the investing

opportunities in the market. Companys quick ratio is continuously increasing from last 5 years which shows firm can meet its current financial obligations with the available quick funds on hand. SOLVENCY RATIOS DEBT EQUITY Debt Equity Ratio shows the relationship between total debt and owned capital. It is the ratio of the amount invested by outsiders to the amount invested by the shareholders. This ratio reflects the relative claims of the shareholders and creditors against the assets of a company.
Dec11 Debt equity Dec10 Dec09 Dec08 Dec07 -

INTERPRETATION Glaxo has no debt from the last 5 years. LONG TERM DEBT EQUITY RATIO This ratio is an extension of debt-equity ratio and provides similar information as the debt-equity ratio.
Dec11 Long debt ratio term equity Dec10 Dec09 Dec08 Dec07 -

INTERPRETATION Glaxo hasnt long term debt equity ratio.

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Profitability ratios
Gross profit margin (%) Operating profit margin (%) Net profit margin (%) Return on assets (%) Return on equity (%) 32.74 33.61 17.11 222.67 22.42 35.44 36.27 25.05 227.95 29.19 35.67 36.54 25.74 207.68 29.12 35.32 36.29 32.36 181.94 37.41 38.62 35.72 32.50 160.67 39.51

Efficiency ratio
Inventory turnover ratio Debtor turnover ratio Receivable Turnover 7.33 35.45 6.17 7.82 42.18 6.01 7.71 33.74 5.17 7.85 35.03 4.57 8.03 32.15 4.89

Profitability ratio: ROA: From the data it has been noted that the ROA of the company in year 2007 is 160.67, and then in the year 2008 it had a rapid increase i.e 181.94, then same with the rest years. It shows that the continuously increasing in the ROA shows the ability to perform in the day to day operation. Its shows the good sign of the company. ROE: In the given ratio the return of equity is rapidly increasing that indicates the company earning more and more profit and utilizing the money invested by the shareholder in an efficient manner which is good for the company. Gross profit margin: Profit is decreasing year by year which is not good for the company as they are not able to meet up their cost with the revenue. Operating Profit Margin (%): The profit of the company is not stagnant because it is keep fluctuating from the year 2007 to 2011.This indicates that company is not having much profit.

Net profit Margin: The Net profit Margin was 32.50% in 2007 which decreased to 32.36% in 2008 and then decreased to 25.74 % in 2009 and again in 2010 and 2011.The rapid decrease in.