Case Study: The Increase In Sales Revenues Of Abbott Laboratories

2014, 2015). The increase in sales revenues of Abbott Laboratories was due better product mix offered by the company.

Gross Margins (%)

Years GlaxoSmithKline Pakistan Abbott Pakistan

2012 26.1

2013 24.7 38.5

2014 26.3 38.3

2015 27.4 38.9 The gross margin of GSK Pakistan showed a fluctuating trend over the period under review. In year 2013, the gross margin was recorded at 24.7% with a decline of 5.3% from 26.1% in year 2012. During year 2014, it was amplified by 6.8% to 26.3% and was further improved to 27.4% with an increase of 3.8%% during 2015.

During year 2013, the gross profits and cost of sales of the company were reported at 6,224 million and 19,007 million and were increased by 3% and 11% respectively from previous year (Annual

During year 2013, the net profit margin of the company was 4.2% reflecting a decline of 26% from year 2012. However, in subsequent two years, the company’s net profit margin increased substantially on the account of better performance and improved net profits. The net profit ratio was 6.05% in year 2014 with an increase of 44%. In year 2015, the ratio was further increased by 48% and reported at 8.9%.

Under the reviewed period, the financial year 2013 proved to be somehow challenging for the company in terms of its profitability. The profits after taxation at 1,062 million were declined by 20% (a decrease of Rs. 264 million) from previous year. The reduction in net profits was mainly attributed to an increase of selling, marketing and distribution expenses and increase in administrative expenses. Selling, marketing and distribution expenses were increased by 20% from 3,028 million in year 2012 to 3,635 million in year 2013 (Annual Reports, 2013). The increase was due to significant marketing investment in the Nutritional and Oral categories of the Consumer Healthcare segment, increase of freight costs due to rising sales volume and escalating fuel prices (CEO Report, 2013). On the other hand, administrative expenses were augmented from 784 million in year 2012 to 920 million reflecting an increase of 17%. This was account of rising fuel and utility costs due to rising

With this deal, Novartis’ global vaccine business (excluding influenza vaccine) was acquired by GSK Plc in return for an upfront payment of $5.25 billion along with subsequent payment of up to $1.8 billion and GSK Plc had divested its oncology business in exchange for a cash payment of $16 billion (Business Recordings, 2014). However, GlaxoSmithKline Pakistan, after the merger with Novartis has attained the 100% market share of