Review all data and comments bellow each section in Part 3 bellow and comment on the following two bullets for Part 4:

PART 4, CONCLUSIONS AND RECOMMENDATIONS

Summarize your analysis. Review your comments in the financial analysis section and provide your assessment of the overall status of the firm. Include any recommendations you think are appropriate.

List any other recommendations you have for the firm in view of your analysis.

PART 3, RATIO ANALYSIS:

(1) LIQUIDITY:

FY2019 FY 2020

Current Ratio:

Pfizer 0.88 1.35

Moderna 7.89 1.44

Quick Ratio:

Pfizer 0.69 1.04

Moderna 7.76 1.37

Comments:

As you can see current ratio for the year 2020 for Pfizer increases from .88 to 1.35. It means that in 2020, Pfizer has more current assets than current liabilities as compared to 2019 which may indicate that the company are capable of meeting its current obligations. Moderna on the other hand has very high current ratio in 2019 than in 2020. It indicates that it has a lot of assets that can be used to settle its short term obligation. However, a very high current ratio may also indicate that the company is not efficiently using its current assets or short-term financing capabilities.

-Quick Ratio for Pfizer improved in 2020 compared to 2019. It means that compared to 2019, Pfizer in 2020 is more capable to meet its short-term obligation since the ratio shows that it has more quick assets available. Moderna has very high quick ratio in 2019 than in 2020. It may indicate that it has more liquid assets to settle its current obligations. However, a very high quick ratio is also not good because it may also signify that the company is not efficient enough in using those assets.

(2) ASSET MANAGEMENT

FY 2019 FY 2020

Total Asset Turnover:

Pfizer 0.25 0.27

Moderna 0.04 0.11

Average Collection Period:

Pfizer 62 69

Moderna 98 640

Comments On The Company's Asset Management:

As you can see, both Pfizer and Moderna has increased asset turnover in 2020 as compared to 2019. This indicates that both of them has improved its efficiency of using its assets to generate revenue or income.

-Average collection period on the other hand are not very good for both Pfizer and Moderna (if the figure is correctly stated as 640). It shows here that both of them are very slow in collecting their receivables.

(3) DEBT MANAGEMENT:

FY 2019 FY 2020

Total Debt to Total Assets:

Pfizer 0.21 0.24

Moderna 0.02 0.01

Times Interest Earned:

Pfizer 12.23 6.17

Moderna -76.84 -74.31

Comments On The Company's Debt Management:

As you can see for Pfizer, the figure shows that it is more leveraged in 2020 than in 2019. It indicates the assets are way more financed by its creditors than its assets. The more the company is leveraged the more it is risky. Moderna on the other hand has decreased which means assets are less financed by creditors.

-Times interest earned for Pfizer has significantly decrease which means that the company has decreased opportunity to continue to service its debts. Though 6.17 is a good figure, 12.23 is still better. Moderna on the other hand is very alarming. Both are negative which indicate that the company is having a difficulty in meeting those interest obligations. In many many cases, negative times interest earned ratio signifies that the company is at risk of bankruptcy in the near future.

(4) PROFITABILITY:

FY 2019 FY 2020

Net profit Margin:

Pfizer 39.52 22.95

Moderna -853.73 -92.99

Return on Assets:

Pfizer 6.48 4.55

Moderna -32.34 -10.18

Return on Equity:

Pfizer 17.13 11.06

Moderna -43.75 -29.17

Modified Du Pont Equation, FY 2020:

Pfizer Moderna

Net Profit Margin .23 -.93

Total Asset Turnover .27 .11

Equity Multiplier 2.44 2.86

Comments On The Company's Profitability:

As to profitability, Pfizer is obviously better than Moderna. It is because they are making net income while Moderna is making net loss for the two consecutive years. With this, it can be concluded that Moderna spent more than what they earned. Pfizer is better in terms of profitability but as to trend of profitability, Moderna is better. The trend of Pfizer's net income is decreasing while Moderna is increasing. In the following year, Moderna may generate net income. The result of their operations has an impact to their return on assets and return on equity. Pfizer made more sales. They utilized their resources more efficiently than Moderna. They used their resources to make more sales that is why they have good net income result. Moderna is financed more on liability than equity. A contributing factor why they made net loss is that they have interest expense. If they continue to borrow funds rather than issue shares, they will pay more interest expense which will affect both their cash and net income. Above all this, it is still the net income that drives the return on equity of both companies.

(5) MARKET VALUE RATIOS:

FY 2019 FY 2020

PE Ratio:

Pfizer 13.4 136.8

Moderna -12.2 -69.1

Market to Book Ratio:

Pfizer 3.3 3.1

Moderna 0.19 0.07

Comments On The Company's Market Value Ratios:

Because of its good profitability, more investors are willing to buy Pfizer shares than Moderna. With this, Pfizer is in a good position in their market industry. Since Pfizer has a high price earnings ratio and market to book ratio result, their shares are overvalued. Their shares are excessive and is too far from its real value. On the other end, Moderna's share is found to be undervalued. Accordingly, in an investor's point of view, it is best to purchase company's stock if it is undervalued. It is because they will pay less. So, if the value increase, they will earn more and if it decreased, the investor will not make loss since they paid less than they lost. Nevertheless. both company's shares don't reflect their true value.