Financial Analysis of Walgreens Pharmacy

Financial Analysis of Walgreens Pharmacy

Introduction

Walgreen is the one of the largest pharmacy chain in United States of America, in the retail side. The company offers various product and services in the form of prescription drugs, general merchandise and non-prescription drugs. It is one of the United States leading independent specialty provider of pharmacy in the homeland, which has been in the market for 104 years. The head office of the company is in Deerfield, Illinois.

The company employees over 247,000 people and out of them 71,000 are a part time worker. For the financial year 2011, the company recorded revenue of $ 72,184 million. There was an increase of 7.1% in the revenue when compared to the last year figure that is of 2010. The operating profit in the same period of fiscal year 2011 was $ 4365 million. This was an increase of 7.1% over the fiscal year 2010. The net profit of the company also rose by 29.8%.

The company has taken various steps to build on the core business. They have multi channel strategy to build on their core business. They are investing in new sectors like beauty industry. Continuing with their growth strategy, they are building on their present business and at the same time acquiring the set business in United States. The recent acquisition was that Drugstore.com and Beauty.com. This acquisition has not only given them new customers of more than 3 million, but also access to 60000 drugs , beauty product, health product and skincare products . The efficiency of the company has also increased with these acquisitions, since now they are able to deliver the order product in no more than one hour.

In the year 2013, the company is planning to focus more on revenue growth, save on the cost and allocation of capital in projects with higher stable returns at the same time keeping the customer confidence (Shim & Seigel 2009). Thus, the company can maintain the double-digit growth and increased return on invested capital, which it has been doing for the last couple of years.

We are going to help this pharmacy giant, to look into the various capital allocations option in the market by using different financial tools.

Discussion

Process of Price decision in the Walgreen

The area in which the Walgreen operates is getting very competitive. The competition refers to the competition between different parties to provide the services or product in the same category. When Walgreen thinks of operating in a competitive environment, than the company needs to look into the basic elements like product and pricing. So now we will look into the pricing decision, which the company will make to so that competition can be tackled at the same time, profits can be maximized. Since the basic purpose of any firm is to cut down the cost and maximize the profits over the years (Shim & Seigel 2009). These profit generation and cost cutting measures should be an ongoing ...