Study on the financial performance of companies operating in the pharmaceutical industry in romania

Abstract

The study aims at determining the financial performance of companies in the pharmaceutical industry between 2009 and 2014 by means of the indicator of the financial return rate, using multiple linear regressions as research method. By analysing the evolution of the share of companies in the pharmaceutical industry based on the trend of the financial rate of return, we can estimate that the number of entities that resort to supporting the financial activities from loans and liabilities is growing in the period under analysis. This is due mainly to the liquidity crisis faced by entities, as a result of the high recovery duration of debts. Also, using the multiple linear regression we can highlight that, the financial return of pharmaceutical companies is positively influenced by their economic profitability, by the equity multiplier and by inflation, and negatively, by the net profit margin.

Analysing the Impact of Financial Ratios on a Company’s Financial Performance

“…(2015) [5], they have used net profit margin as the indicator of financial performance to analyze the relationship between key financial ratios and the financial performance of the organizations. Net profit margin has been used to assess the financial performance in the pharmaceutical industry, in the study of Baltes and Minculete (2016) [2].Therefore, in this study net profit margin will be used as the independent variable and following the method used in the study of Erdogan et Al. (2015) [5], the impact of the other financial ratios on net profit margin will be analyzed.…”

Pharmaceutical Companies as Portfolio Investments

“…Besides, the existing literature tends to focus on profitability only without comparing it to risks taken by pharmaceutical companies. The types of risks involved in pharmaceutical activity are analyzed in separate studies (Golec, Vernon, 2009;Vernon et al, 2010;Baltes et al, 2014).…”