Eli Lilly: Company Analysis

Does the acquisition make strategic and financial sense? Provide a concise explanation in support of your assessment. (250 words max) Ans 2) Microsoft must have valued LinkedIn over $26 billion. This is more than 8 times the LinkedIn revenue of last 12 months ( $3.2 billion).The ratio is ~5 times Trailing twelve months for public companies on market places shows that price paid/valued by Microsoft is premium. However it is important to note that this is the best time for Microsoft to purchase LinkedIn (as the market cap is 60% of what it was compared to last year and it reached lowest in February 2016).There are half a billion users whose professional data and behavior is up for sale and Microsoft gets it in the right time.

This ratio is increased to 67.6% by 2015. Which are way higher than the industry average of 32.23% and sector average of 39.17%. This change is caused by the notes issuance and debts Costco entered. Firstly, Costco issued $3,500 million of Senior Notes in December 2012. Secondly, its Japanese Costco Subsidiary issued $102 million of promissory notes and got an approximately $102 three-year term loan.

Their portfolios held a lower percentage of subprime loans than that of commercial and investment banks. Nonetheless, they did increase their acquisition of these loans to keep their shareholders happy in what had become a very competitive marketplace. Before the financial crisis, they owned or guaranteed $1.4 trillion, or 40 percent, of all United Stated mortgages. Of that, only $168 billion was in subprime mortgages, They are Now Owned by the Government: What It Means The government spent at least $150 billion to keep Fannie Mae and Freddie Mac mortgage companies functioning. It has been managing the two GSEs since September 2008, when the Federal Housing Finance Agency (FHFA) put them into receivership.

Johnson & Johnson currently has a 10.4% market share of the Pharmaceutical Manufacturing industry. They have the second largest share of this industry, just behind Amgen at 10.9%. By looking at the revenue and operating income for Johnson & Johnson, we can see their margins and evaluate their performance. Johnson & Johnson’s operating profit margin improved from 2015 to 2016 but decreased significantly from 2016 to 2017. The operating profit margin for the company as a whole in 2016 was 28.72% and in 2017 it was 24.07% (Appendix A).

Description of Organization, all subsidiaries and/or strategic business units Merck & Co., Inc. was founded in 1891 and is a leading pharmaceutical company with headquarters in Whitehouse Station, NJ. First quarter earnings in 2012 were 11.7 billion dollars worldwide, with revenue being produced from pharmaceuticals, animal health, and consumer care. (Merck Financials 2012)Through science and innovation Merck is one of the largest healthcare companies in the world, delivering vaccines and medicinal needs to humans and animals. (Merck Sharp & Dohme Corp 2009-2012) The organization inside the United States of America is recognized as Merck and & Co, Inc., while outside the U.S., the organization is known as Merck Sharp and Dohme (MSD), or

CMG revenue topped $4.5 billion in 2015. In addition, CMG netted near 10 percent growth in 2015 and revenues are projected to increase 3.1 percent in 2016. Although CMG does not pay cash dividends, 2016 earnings per share (EPS) is expected to yield 12.78, which would fall below the 2015 EPS of 15.10 (Standard & Poor’s, 2016). Among peer restaurants, CMG stock Beta holds at .48, which indicates the stock is less volatile (Standard & Poor’s, 2016). Specifically, the stock price fell to $404.26 during the E.coli outbreak in 2015 and current stock price closed at $473 March 23, 2016 (Google Finance, 2016).

The peak came on Dec. 29th, 2000 when share prices hit a high of $55.95. In 2012, share actually dropped below $14 before starting an eventual ascent to $35.10 at the last recorded trading day for Safeway stock, Jan. 29th 2015. After this, AB Acquisition LLC merged with Safeway and Safeway stock was de-listed from the New York Stock exchanges. Did Safeway generate long-term profitable growth for shareholders? That would depend on how you define long term.

Costco, regardless of external pressures from other wholesalers such as BJ’s Wholesale and Sam’s Club has distinguished itself and experienced tremendous success as a result. In 2010, Costco brought in a net income of 1.3 billion whereas its competitor BJ’s Wholesale drew in only 132 million. The following year, Costco’s net income grew to 1.46 billion while BJ’s’ fell to 95 million. Ever since the mid-2000’s, Costco’s profit has steadily increased while it’s competitors have struggled to simply keep their profits from plummeting. Part of the reason Costco’s profits remain so high is because they outnumber their competitors in terms of store locations.

The earnings to fixed charges ratio explains how well a company’s earnings will cover its fixed charges. The higher this number the better for Kroger. Kroger had an earnings to fixed charges ratio of 4.4 (Kroger’s earnings were 4.4 times greater than their fixed costs), which is the second lowest among this group of four. They have less financial flexibility than both Walmart and Target, who had 7.2 And 5.90 respectively. Kroger has the lowest gross margin of the group of four studied here.

(Exhibit I) Costco Wholesale Corporation- It is an US membership-only warehouse club that provides a wide selection of merchandise. It is currently the largest membership-only warehouse club in US. From the reports of 2014 Costco was the third largest retailer in US and by 2015 reports it was second largest in world the first was Walmart. The company has ranked at the top in retail industry in the American Customer Satisfaction Index in all the years since 2001, and it continuously beats Wal-Mart(Exhibit II). For 2015 Costco has scored in customer satisfaction 81, which is higher than the score 76 in customer satisfaction received by Wal-Mart's warehouse retail division Sam's

Return on equity measures the overall profitability of the financial institution per dollar of equity. Generally shareholders of financial institutions prefer the high ROE. But, higher ROE means an increase in risk. 2014 2013 2012 2011 2010 Wells Fargo 13.01 13.35 12.66 11.90 10.38 Bank of America 2.03 4.87 1.79 0.63 (0.97) Analysis: The return on equity has been improved of the Wells Fargo & Co. from 2010 to 2014 whereas the ROE of Bank of America also increased till 2013 but decreased in 2014. In comparison of ROE the Wells Fargo‘s performance is better than Bank of America

Allstate With more than $1.7 billion in composed premiums and 15.5% of the business sector, Allstate comes in as the second greatest auto back up plan in New York. While the organization is still a goliath in the business sector, it has lost ground. Allstate 's yearly composed premiums fell about $162 million somewhere around 2011 and 2013, a period amid which its piece of the pie declined by 2.6%. Consolidated with Geico 's additions in this period, the piece of the overall industry hole between the main two organizations has enlarged from 8.1% in 2011 to 13.5% in 2013. State