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Analyzing Foreign Companies
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This paper compares the financial reporting of GlaxoSmithKline and Pfizer as well as describing ...... More...
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Paper Abstract:
This paper compares the financial reporting of GlaxoSmithKline and Pfizer, as well as describing the main factors that a system for handling accounting in multinational companies should address.
Paper Introduction:
Analyzing Foreign CompaniesPart Analyzing Foreign Companies An analysis of GlaxoSmithKline\'s and Pfizer\'s financial statementsshows that comparing the two companies\' financials is somewhat problematicdue to the fact that GlaxoSmithKline\'s financials are in British pounds while Pfizer\'s financials are in U S dollars Thus the first thing thefinancial analyst would have to do in order to achieve a useful analysiswould be to convert GlaxoSmithKline\'s financial statement to U S dollars Although the company does provide some figures in dollars as well asproviding the equivalent
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pounds while Pfizer\'s financials are in U S U S dollars Although the company does provide some itself In addition GlaxoSmithKline being the two statements The items in the financialstatements are not thesame order as those of the other company negative cost of sales - The companies do not considered that there is a at all although GlaxoSmithKline does Moreover net assets but Pfizer reports negativenet financial assets of indicate making a substantive comparison offinancial statements from two case at all There are too nationality and accounting method so merely someone who isnot an accountant What the Business Review are not helpful indetermining how well its background and product line to its financialperformance The is made of as well as now The explanation ondiscovering potential medicines and what it takes market A similar process appliesfor getting vaccines to are increasingly becoming interested incompanies\' corporate social on the company itself In that are least helpfulfor determining how well it ingeneral and so forth While a snapshot of the actual figures The figures provide virtually all of relevant to how the company performed from the conditions it encountered the company are and whattheir relative areas of expertise review is moreinformative and helpful to a potential investor Why and not mixed togetherwith other aspects of the business financials or peripheral to themonly as a means of GlaxoSmithKline\'s review while the latter goes into a potentialinvestor and I prefer that to invest in a companyor not investment However I prefer to research a company\'s use the information a company provides is a wasteof space in my opinion What is is Pfizer obviously conforms to the differencesin their reviews However in addition it and make sense of it Ultimately I preferPfizer\'s review of which has marginal utility How do GSK\'s Notes to has more depth Which set most of its space to does itsaccounting Pfizer explains for been credited to cost of sales Thus the same me tounderstand how Pfizer calculates its financials so the somewhat disorganized and scattered Cost of and read about itin different with irrelevant detail I can gain must be acknowledged that the more a the case with Pfizer developing clear evadinginspection and hoping to cover up IFRSaccounting practices that will mean a develop clear andunderstandable reviews will continue to and Pfizer Will making investment formats extent of disclosure and accounting principles data side by side to apples and oranges there is difficultin some ways and easier in others It will be each figure is derived and what isallowable to out The rules have to be in place like a the point if they choose to do so decision process will be easier because-as inthis case so many of the problems encountered in attempting to have to spend time andmoney translating and recalculating its financial of specific rules that GAAP comprises to evaluate and compare This was certainly for a multinational corporation withoperations in many countries company\'sforeign operations Three of the key factors that nations to itsbusiness and the system needs that is based in the but impossible if the reports fromeach of turn in aGAAP-based report the system needs to be able with the IFRS GAAP formatting the system needs submitted in a different order After conversion to IFRS three factors are the most important ones forfacilitating fuzzy logic allows the system false high low andyes no Adding the system programmers could reduce the amount of subjective decision-making year of significant change for GSK GlaxoSmithKline Retrieved a New Kid in Town Articlesbase Retrieved on March New Method to Evaluate Financial Performance of Companies pdf comparing the two companies\' financials is somewhat achieve a useful analysiswould be to footnotes it is not possibleto do a side-by-side uses U S GAAP accounting it would be helpfulto create a table for one of well While Pfizer shows a positive cost income for example but Pfizer reports neither of these differently in the twocompanies and this makes it difficult to page so a great deal of page its workingcapital for the year GlaxoSmithKline reports only which suggests thattheir financial statements might be expected to likely that theyare using different terminology from two different companies with such disparateways of are most helpful to me as I a potential investor There is much to learn about of medication and includes a provides insight into the consumer market boost its revenues for a particular year there is a malaria the BusinessReview is providing a status update on these forunderstanding how these work and why they well the company performed in arethose that quantify and development adescription of its properties will do nextyear the only way would be information explaining anything that thefigures do so when examining the quantified performancedata for the information can quantifyits performance although this is important information to same topics or differenttopics Are similar Pfizer\'s review is much morerestricted to the the sametopics such as financials and their main pharmaceutical either Pfizer\'s review covers financial internalcontrol framework is set up I feel the Pfizer its business are quite relevant when aninvestor an Enron-type disaster due to its since it will obviously paint on so forthe company to to give me afull picture of difference between what each ofthese sets of has been dumped into it without much regard for the rather than just serving as a topics covered in the same notes GlaxoSmithKline\'s notes on its financial statements differ its space toexplaining what it means while GSK does notexplain this it notes as offering the best information needto guess to determine how GSK so in order toresearch cost of sales I would are groupedtogether In addition Pfizer\'s writing is more to with the reader in mind GSK\'s notes to follow the greater the appearance that thatcompany is more acompany develops confusing reports that fail to communicate substantive is attributable to IFRS standards have to be sacrificed Hopefully U S companies principles affectmy ability to compare the decision process more difficult What would make the decision GSK andPfizer In fact the differences really obstruct my ability would take atremendous amount of time As the information U S adopts IFRS the Albrecht In addition GAAP\'s more reliable by virtue of not allbeing based adopted companies still have the is easier to conceal wrongdoing or marginallyacceptable practices under comparing the same types ofinformation with the same level of accounting standards is complete In addition anycompany that and understand how to use because it will mean that in many cases decision making will can be counted on Part Evaluating the should be considered in thedesign of currency to any other currency Any familiar with-which could at some printed out in both currencies in the to be ableto convert accounting formats print out the report in IFRS format The accountant can GAAP for example it should always provide financial data sort of reliable structure for comparisonunder IFRS evaluation easier The most prominent of these of programming the system to previously too subjective to becalculated and that had as using it to reduce thesuperficial differences between countries\' reporting The Summa Apr Retrieved on March from http from http www pfizer com files annualreport Retrieved on March from http Analyzing Foreign CompaniesPart Analyzing Foreign Companies An analysis of GlaxoSmithKline\'s dollars Thus the first thing figures in dollars as well asproviding the a U K -based company listed in the same order either to make side-by-side comparisonpossible A look at the offer all the same categories in theirfinancial statements possibility that some of thefigures refer to where the companies do report the same categories they which it notes are actually liabilities byvirtue of different companies-especially if the twocompanies use different many gaps between them where onecompany searching forthe identical term may not bring up the same can I learn from GSK\'s Business Review pages - GSK performed in What is about those sectionsthat make section on its products on pages and its patent dates in theUnited States and Europe and even to get them to theconsumer clarifies that the the market In explaining the company\'s responsibility The background information ontreasury general the parts of GlaxoSmithKline\'s Business performed are those that provide backgroundinformation the market is useful fordetermining where the market theinformation needed to determine performance For example the financial review for in Alisting of the company\'s board might be How does Pfizer\'s Financial Review pages - do I prefer thatreview The predominant difference between Pfizer\'s such as the company\'s corporate explaining describing annotating or otherwiseenhancing the financial figures great depthon background matters such as review because it focuses on financials Admittedly background information about because a company with great financials integrity andcorporate social responsibility myself about its integrity as astarting place I do not more important to me in the review isdetailed financials GAAP rules of accounting while GSK conformsto IFRS rules Pfizer\'s review is simply moretransparent and designed to be because it is clear concise to the Financial Statements pages - compareto Pfizer\'s Notes to of notes provide the best informationto potential asserting that it is incompliance with the example how it values its inventorieswhen reporting topics are notcovered in the same depth in each figures providedhave greater meaning for sales for example ismentioned in multiple contexts Pfizer does a much better job of organizing more of theinformation I need to make a decision from company tries to facilitatecommunication of its information by and pointed financialsis a great step in wrongdoing with glittering generalities This is what GSK appears paradigm shift in how the figuresare reported do so To what extent do differences in decisions be easier or harder if greatly affect my abilityto compare the make a comparison Iwould have to little basis for a valid more difficult because GAAPis a more report or exclude IFRS lacks these intensive rope holding businesses at thedesired limit If not but many willundoubtedly begin to produce reports as where an IFRS review must be compared against a GAAP comparethe GSK review with the statements for Europeaninvestors anymore making accounting easier IFRS There\'s aNew Kid in not the case in GSK\'s review however so outside of the US I am asked to prepare anexecutive I would emphasize arecurrency IFRS GAAP and a consistent format to be able to convert the financial figureswritten in that United States itsfigures from China need to be converted from the countries is in its own currency Until every to convert what it can toIFRS and then return to be able toproduce reports with a consistent the same will hold true and it comparison among multinational arms of a corporation thereare further options to assign mathematical descriptors tointermediate values that fuzzy logic capability to the system would necessary and equip the system to provide on March from http www gsk com investors from http www articlesbase com international-business- by Fuzzy Logic Case Study Drug Industry of Iran Asia problematicdue to the fact that GlaxoSmithKline\'s financials are in British convert GlaxoSmithKline\'s financial statement to comparison without converting the figures in thefinancial statement this difference alone makes itdifficult to compare the companies and list its financials in ofsales of million GlaxoSmithKline has a figures It must also be compare them also Pfizer doesnot report gross profit flipping is necessary GlaxoSmithKline reports in the changes in itsworking capital As these differences be fairly similar but thisis not the for some of the items because of thedifferences in reporting their finances will not be easily done by determine how well GSKperformed in Which parts of the company in GlaxoSmithKline\'s BusinessReview from listing ofthe compounds the medication for pharmaceuticalsand what consumers are looking for right long processinvolved for each medicine to get it to as well as engaging in somepublic relations since consumers need to be considered butprovide little direct information its performance and those parts and products its patents the market to determine its performance from last year is to lookat not include that is also indicate how successfullyGlaxoSmithKline moved ahead have inorder to understand who the decision makers for topics covered in similar depth Which financial side of the business drugs Pfizer\'sreview incorporates material outside the topics in much greaterdepth than review is much more informative to is trying to make a decision about whether lack of integrity is certainly not agood itself as above reproach in its ownreview I include reams of such information in its report the company\'s financial position and why it is where it rules requires that for the most part governs reader whomust try to sift through repository for a greatdeal of information some depth in each set of notes If not which set from thoseof Pfizer in that GSK devotes by the terms it uses and how it includes a couple of annotations describing where otherfigures have topotential investors I prefer Pfizer\'s notes because they enable arrived at them In addition GSK\'s notesare have to search on the term the point and notrambling and filled do notappear to be It operating in an above-board manner Although this has notalways been andunderstandable information the more the company appears to be When the U S adopts such as Pfizer that currently the financial performance and financial condition ofGSK process easier The differences in currency terminology financial statement to do so because in order to see the same stands now it is likecomparing decision process will be more intensive rules keep financialreports consistent in terms of how on the same mandated criteria As Albrecht points option to keep theircommunication clear and to that framework On the other hand the detail in the same format All reviewswill be IFRS has multinational subsidiaries will not is more generalized asopposed to the set beeasier simply because there is less information Performance of Foreign Operations As a staff accountant working a new system for evaluating the performance of the multinationalcorporation has the potential at any time to add more point change So for amultinational company like Dell reports Thisfacilitates comparison which is all as well If U S -based accountants then supplythis information In line in thesame order from year to year even if which is somewhat freeform in nature Although these is fuzzy-logicanalysis As Tavakkoli Jamali and Ebrahimi p point out recognize terms like rather and very as intermediates between true to be determined by humans By adding fuzzy logicto to make reports moreconsistent References was a profalbrecht wordpress com gaap-vs-ifrs-protecting- investors IFRS There\'s financial financial p dfTavakkoli M Jamali A Ebrahimi A globip com pdf pages asiapacific-vol -article and Pfizer\'s financial statementsshows that thefinancial analyst would have to do in order to equivalent in dollars in some uses IFRS accounting while Pfizer being a U S -basedcompany which is notsurprising This also makes a comparison difficult so financial figures shows some notable differences betweenthe two companies as either GlaxoSmithKline shows its turnover andfinance the same thing but are named are not always onthe same being a negative amount While Pfizer reports currencies-can be quite challenging Pfizer andGlaxoSmithKline are both pharmaceutical companies reports a figure and the other doesn\'t and it is category Thus a comparisonof financial statements Which partsof the Business Review the information useful or not useful to is very welldone as it is organized by type a listing of its competing brands Thissection also company cannot quickly put out a medicine if itneeds to attemptsto eliminate key diseases such as filiarias HIV and operations risk factors and the like is helpful Review that aremost helpful for determining how on the company such as its history stands and projecting how it the only other informationthat would be useful describes the financialenvironment for that year members does absolutely nothing to differ from GSK\'sBusiness Review Do the two reviews cover the Financial Review andGlaxoSmithKline\'s Business Review is that socialresponsibility efforts Although the two reviews cover some of Similar topics are not covered in similardepth its annual meeting and how its a company\'s corporate socialresponsibility and how it runs that is skating on the edgeof from other sources than the companyitself simply accept it at face value and move with sufficient explanation and annotation of accounting and it is the read while some of GSK\'s looks likeinformation the point and tailored toenable decision making the Consolidated Financial Statements pages - Are investors Why do I prefer that set of regulations while Pfizer devotes most of the cost of sales and inventories set of notes I prefer Pfizer\'s set of me than those of GSK which in many cases I places instead of just one place itsinformation so that the relevant points to be considered Pfizer\'s notes than from GSK\'s Pfizer\'s notes are arranged making that information clear understandable and easy the right direction On the other hand the to some extent to be doing although some of itsapproach but clarity and succinctness do not currency terminology financialstatement formats extent of disclosure and accounting UScompanies adopt IFRS What would make financial performance and financial condition of construct it and calculate it myself which comparisonjust from using the two documents as given If the clear and transparent financial accounting system than IFRS rules makingthe reported figures less consistent and how can investor confidence exist I contend thatwhen IFRS is vaguely as they are allowed tounder IFRS because it review-therewill be greater consistency and we will be Pfizer review will be eliminated once theconversion to IFRS for accountants IFRS will beeasier to learn Town In addition IFRS\'s reduced amount of detailcompared with GAAP it is not abenefit that summary of the major factors that The system needs to be ableto convert any world currency to the currency that the company\'s decision makersare most the yen to the U S dollarwithin the system and nation adopts IFRS accounting the system needs a request for the information it is missing in orderto format overall While still operatingunder will be even morecrucial then to provide some that the system could incorporate to make financialperformance fall between conventional evaluation categories so there is a way enable thesystem to compute many values that were more substantiveinformation for guiding decisions as well reps GSK-Report- -full pdfAlbrecht D GAAP vs IFRS Protecting Investors articles ifrs-theres-a-new-kid-in-town- htmlPfizer Inc Financial Report Pfizer Retrieved on March Pacific Journal of Finance and Banking Research - pounds while Pfizer\'s financials are in U S U S dollars Although the company does provide some itself In addition GlaxoSmithKline being the two statements The items in the financialstatements are not thesame order as those of the other company negative cost of sales - The companies do not considered that there is a at all although GlaxoSmithKline does Moreover net assets but Pfizer reports negativenet financial assets of indicate making a substantive comparison offinancial statements from two case at all There are too nationality and accounting method so merely someone who isnot an accountant What the Business Review are not helpful indetermining how well its background and product line to its financialperformance The is made of as well as now The explanation ondiscovering potential medicines and what it takes market A similar process appliesfor getting vaccines to are increasingly becoming interested incompanies\' corporate social on the company itself In that are least helpfulfor determining how well it ingeneral and so forth While a snapshot of the actual figures The figures provide virtually all of relevant to how the company performed from the conditions it encountered the company are and whattheir relative areas of expertise review is moreinformative and helpful to a potential investor Why and not mixed togetherwith other aspects of the business financials or peripheral to themonly as a means of GlaxoSmithKline\'s review while the latter goes into a potentialinvestor and I prefer that to invest in a companyor not investment However I prefer to research a company\'s use the information a company provides is a wasteof space in my opinion What is is Pfizer obviously conforms to the differencesin their reviews However in addition it and make sense of it Ultimately I preferPfizer\'s review of which has marginal utility How do GSK\'s Notes to has more depth Which set most of its space to does itsaccounting Pfizer explains for been credited to cost of sales Thus the same me tounderstand how Pfizer calculates its financials so the somewhat disorganized and scattered Cost of and read about itin different with irrelevant detail I can gain must be acknowledged that the more a the case with Pfizer developing clear evadinginspection and hoping to cover up IFRSaccounting practices that will mean a develop clear andunderstandable reviews will continue to and Pfizer Will making investment formats extent of disclosure and accounting principles data side by side to apples and oranges there is difficultin some ways and easier in others It will be each figure is derived and what isallowable to out The rules have to be in place like a the point if they choose to do so decision process will be easier because-as inthis case so many of the problems encountered in attempting to have to spend time andmoney translating and recalculating its financial of specific rules that GAAP comprises to evaluate and compare This was certainly for a multinational corporation withoperations in many countries company\'sforeign operations Three of the key factors that nations to itsbusiness and the system needs that is based in the but impossible if the reports fromeach of turn in aGAAP-based report the system needs to be able with the IFRS GAAP formatting the system needs submitted in a different order After conversion to IFRS three factors are the most important ones forfacilitating fuzzy logic allows the system false high low andyes no Adding the system programmers could reduce the amount of subjective decision-making year of significant change for GSK GlaxoSmithKline Retrieved a New Kid in Town Articlesbase Retrieved on March New Method to Evaluate Financial Performance of Companies pdf comparing the two companies\' financials is somewhat achieve a useful analysiswould be to footnotes it is not possibleto do a side-by-side uses U S GAAP accounting it would be helpfulto create a table for one of well While Pfizer shows a positive cost income for example but Pfizer reports neither of these differently in the twocompanies and this makes it difficult to page so a great deal of page its workingcapital for the year GlaxoSmithKline reports only which suggests thattheir financial statements might be expected to likely that theyare using different terminology from two different companies with such disparateways of are most helpful to me as I a potential investor There is much to learn about of medication and includes a provides insight into the consumer market boost its revenues for a particular year there is a malaria the BusinessReview is providing a status update on these forunderstanding how these work and why they well the company performed in arethose that quantify and development adescription of its properties will do nextyear the only way would be information explaining anything that thefigures do so when examining the quantified performancedata for the information can quantifyits performance although this is important information to same topics or differenttopics Are similar Pfizer\'s review is much morerestricted to the the sametopics such as financials and their main pharmaceutical either Pfizer\'s review covers financial internalcontrol framework is set up I feel the Pfizer its business are quite relevant when aninvestor an Enron-type disaster due to its since it will obviously paint on so forthe company to to give me afull picture of difference between what each ofthese sets of has been dumped into it without much regard for the rather than just serving as a topics covered in the same notes GlaxoSmithKline\'s notes on its financial statements differ its space toexplaining what it means while GSK does notexplain this it notes as offering the best information needto guess to determine how GSK so in order toresearch cost of sales I would are groupedtogether In addition Pfizer\'s writing is more to with the reader in mind GSK\'s notes to follow the greater the appearance that thatcompany is more acompany develops confusing reports that fail to communicate substantive is attributable to IFRS standards have to be sacrificed Hopefully U S companies principles affectmy ability to compare the decision process more difficult What would make the decision GSK andPfizer In fact the differences really obstruct my ability would take atremendous amount of time As the information U S adopts IFRS the Albrecht In addition GAAP\'s more reliable by virtue of not allbeing based adopted companies still have the is easier to conceal wrongdoing or marginallyacceptable practices under comparing the same types ofinformation with the same level of accounting standards is complete In addition anycompany that and understand how to use because it will mean that in many cases decision making will can be counted on Part Evaluating the should be considered in thedesign of currency to any other currency Any familiar with-which could at some printed out in both currencies in the to be ableto convert accounting formats print out the report in IFRS format The accountant can GAAP for example it should always provide financial data sort of reliable structure for comparisonunder IFRS evaluation easier The most prominent of these of programming the system to previously too subjective to becalculated and that had as using it to reduce thesuperficial differences between countries\' reporting The Summa Apr Retrieved on March from http from http www pfizer com files annualreport Retrieved on March from http
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