Overview- Assume you have just earned an MBA and taken a position as an analyst with an investment bank. You are assigned to a team of analysts responsible for monitoring pharmaceutical companies. Your report would be used in formulating buy/sell recommendations on these companies.

Assignment- Select Teva Pharmaceutical Industries, Ltd. and Merck & Co. for comparative purposes. Prepare a threeyear comparative report and financial analysis on the two companies using the most recent financial data from each company's annual financial statements.

Requirements The report must include:

1. Description and background of companies and product lines

2. How they compare:

a) Financially 1. Working capital 2. Current ratio 3. Liquidity 4. Financial leverage 5. R&D Expenditures 6. Profitability 7. Outoftheordinaryevents/transactions 8. Cash flow analysis 9. Return on assets (ROA) 10. Return on equity (ROE)

b) Operationally 1. Number of days in accounts receivable and accounts receivable turnover 2. Number of daysin inventory and inventory turnover 3. R&D percentage ofrevenue 4. Organic growth vs. growth through mergers and acquisitions 5. Offbalance sheetobligations

3. Recommendations on how the companies could improve ROE

4. Conclusion as to financial strengths and weaknesses of each company