Pharmaceutical Companies & Solvency Analysis: A Review

Abstract

Solvency analysis estimates thecapability of a business to pay off its obligations over the long period. By depicting a solvency ratio, an expert or investor can gain judgement on how likely a company willcontinue to meet its debt obligations. A stronger or higher ratio indicates a sound financial strength. On the other hand, a lower ratio indicates financial struggles in the future.The current manuscript aims to study the solvency position of the ten selected pharmaceutical companies by analyzing various solvency ratio such as Proprietary ratio, Debt- to- Equity Ratio and Interest coverage ratio for the period 2004-2013.