Sydney Gallo

FINA2209

[Sydney Gallo @Spring19NVSCFO]

#Fin2209 @ProfLowell last year, NVS divested 36.5% of its stake in GlaxoSmithKline PLC in exchange for $13billion. This key financial decision will strengthen cashflows and improve the company's overall performance.

[Sydney Gallo @Spring19NVSCFO]

#Fin2209 @ProfLowell this year, NVS completed its spin-off of Alcon. In an effort to generate profits, Alcon will become a standalone company starting June 2019. This decision serves as a short-term financial plan for the eventual long-term goal of market expansion.

[Sydney Gallo @Spring19NVSCFO]

#Fin2209 @ProfLowell NVS uses marketable securities such as fund investments, equity securities of the Novartis Venture Fund, and derivative assets as forms of short-term financial planning to sustain sufficient cashflows and working capital to maintain daily business operations

[Sydney Gallo @Spring19NVSCFO]

#Fin2209 @ProfLowell according to their annual report, in fiscal year 2018, NVS raised $4.5billion in equity financing through earnings from operations, including employee transactions, equity-based compensation, and the sale of treasury shares.

[Sydney Gallo @Spring19NVSCFO]

#Fin2209 @ProfLowell companies can raise capital in one of two ways: 1) debt financing, which raises funds through borrowed money such as loans or credit, and 2) equity financing, which raises funds by selling shares of the company to investors

[Sydney Gallo @Spring19NVSCFO]

#Fin2209 @ProfLowell In the last fiscal year, Novartis raised $2.8billion through debt financing to fund new and existing projects. This figure is approximately $2.1billion less than the amount of capital raised in the year prior.

[Sydney Gallo @Spring19NVSCFO]

#Fin2209 @ProfLowell Novartis' dividend payout ratio is 55% indicating that the company pays out the majority of its earnings to shareholders, rather than reinvesting them back into the company. This statistic suggests that NVS is more value-oriented than growth-oriented.

[Sydney Gallo @Spring19NVSCFO]

#Fin2209 @ProfLowell comparing dividend yields is a simple way for investors to evaluate which company will allow them to receive the highest return on their investment. Generally, the higher the dividend yield, the higher the cash return

[Sydney Gallo @Spring19NVSCFO]

#Fin2209 @ProfLowell As of today, Novartis' dividend yield is 3.64%, which is 0.57% higher than the pharmaceutical industry's median of 3.07%

[Sydney Gallo @Spring19NVSCFO]

#Fin2209 @ProfLowell The debt-to-assets ratio evaluates how much of the company's assets are financed by debt as opposed to shareholder equity. NVS' debt-to-assets ratio is 0.22 which further demonstrates low risk and confirms NVS is a safe investment.

[Sydney Gallo @Spring19NVSCFO]

#Fin2209 @ProfLowell as of December 31, 2018, Novartis' debt-to-capital ratio was 0.29. A low debt-to-capital ratio implies to investors that the company is low risk and would be a suitable investment.

[Sydney Gallo @Spring19NVSCFO]

@ProfLowell #Fin2209 As of fiscal year end, NVS' D/E ratio was 0.41 indicating the company is using its financial leverage to increase profits, while also maintaining the ability to pay back its debt obligations if need arise

[Sydney Gallo @Spring19NVSCFO]

Novartis' risky decision to spin-off Alcon Eyecare has lead to approval for providing patients with new drug options, but shareholders criticize the company saying it's priced too high for it's value. NVS denies stating they need high return to further R&D... @ProfLowell #Fin2209

[Sydney Gallo @Spring19NVSCFO]

Novartis has a beta (market risk) value of 0.64. This indicates that NVS stock is less volatile, and poses less of a risk to investors, but it also means it's generating lower returns than market average. @ProfLowell #Fin2209 #HighRiskHighReturn

[Sydney Gallo @Spring19NVSCFO]

Novartis has a WACC of 3.53% and an ROIC of 7.76%. This means that we are generating higher returns off our investments than it's costing us to make them. As NVS continues to grow, we can expect to see even greater returns from new investments in the future @ProfLowell #Fin2209

[Sydney Gallo @Spring19NVSCFO]

Novartis' smart capital budgeting strategy and decisions have allowed the company to end 2018 with a $2.8B decrease in net debt compared to 2017 #Fin2209 @ProfLowell

[Sydney Gallo @Spring19NVSCFO]

Capital structure must align with Capital Budgeting. When Novartis acquired AVXS for $8.7B and sold GSK for $13B, they ensured that the business had sufficient cash to undertake the investments necessary for market expansion. #GoodFinancialStanding #Fin2209 @ProfLowell

[Sydney Gallo @Spring19NVSCFO]

The media release of NVS' 2018 Annual Report affirms "Retaining a good balance between investment in the business, a strong capital structure and attractive shareholder returns remains a priority" for 2019. #Fin2209 @ProfLowell

[Sydney Gallo @Spring19NVSCFO]

Novartis offers a 3.16% dividend yield on common stock. Though this number may seem modest, remember you can never underestimate the value of growth and dividend safety #RiskEqualsRewards #StockValuation #Fin2209 @ProfLowell

[Sydney Gallo @Spring19NVSCFO]

The 52-week high/low for Novartis' common stock was $92.39/$72.30. #GoodTimeToBuy #Potential #Growth #Fin2209 @ProfLowell