2. Agenda
→ Executive Summary
→ Link Chart
→ Capacities
→ Third Party Manufacturers
→ Efficiencies
→ Questions
→ Contact Information
3. Executive Summary
→ Only as capable as their ability is to attract
third party manufactures
→ Focuses on a niche market
→ Efficient, but room for improvement
8. The downside is that
they are dependent on
third party companies to
work with them and
manufacture their
products
The benefit of this
practice is that Salix is
not constrained by
internal manufacturing
limitations.
9. Salix focuses on a niche market inside
The the pharmaceutical industry
Gastroenterology Industry
10. Pharmaceutical Industry
Gastroenterology Industry
This allows Salix to compete with
larger the research andcompanies that
All pharmaceutical development
focus on broader markets solely on
done at Salix is focused within the
pharmaceutical industry
gastroenterology
11. 150 100 call on 10 sales managers
Salix has approximately 280 fullfocus on
dedicated to
roughly 16,000 who time
health care major drug
sales employees
professionals wholesalers
13. Lease expires in 2015
Headquarters
Lease expires in 2011
Morrisville
North Carolina
Raleigh
North Carolina
Salix also maintains a small amount of
77,000 SQFT
space in Palo Alto, California.
26,000 SQFT
18. Average
Inventory
Inventory to Investment
Sales Ratio Period
Ratio
The Analysts used four different ratios to
These ratios are as listed as follows;
determine Salix’s Efficiency
Asset Accounts
Turnover Receivable
Ratio Ratio
19. This ratio can be calculated by
The Inventory to Sales Ratio determines
Inventory
how much inventory is sold inInventory to
= a month
Sales Ratio
Sales for the Month
20. Inventory to Sales Ratio
4
3.653731343
3.5
3.375 3.462365591
3 3.036966825
Inventory to Sales Ratio
2.5 2.317241379
2 1.797288573
1.548387097
1.5
1.444604317 1.161073826
1.548387097
1
0.900763359
0.5
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
years
Trending Down = EFFICIENT
21. This ratio can be calculated by
A higher investment
AThe Average Inventory Investment Period
longer average in inventory means
Ratio determines how long itcash available
inventory period takes to
Average
less Investment
requires a higher Average Inventory
The higher the
Current Inventory Balanceother into a
dollar efficient outflow cash
for Inventory
convert a the less of cash the company is flows
Period is,
investment in = Investment
dollar of sales/ accounts receivable from
(i.e. paying
inventory Daily Cost ofbills, overhead, ext.)
Average Period
the sale of the inventory
Goods Sold (COGS) Ratio
22. Average Inventory Investment Period
0.9
0.772727273 0.780701754
0.8 0.8
0.768292683 0.73853211
0.7
Average inventory investment Period
0.6
0.560386473
0.482288828
0.5
0.4 0.456363636
0.3
0.2
0.173913043
0.1
0
2000 2001 2002 2003 2004 2005 2006 2007 2008
Years
Trending Up = INEFFICIENT
23. This ratio can be calculated by
The Asset Turnover Ratio determines how
Revenue
well a business is using it’s assets to
Asset
=
generate sales Turnover
Assets Ratio
24. Asset Turnover Ratio
1.4
1.225749559
1.158068057
1.2 1.206755374
1.132309942
1 0.885714286
Asset Turnover Ratio
0.960257787
0.8
0.600536193
0.647331787
0.6
0.570866142
0.5
0.4
0.2
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Year
Trending Up = EFFICIENT
25. This ratio can be calculated by
The Accounts Receivable Ratio
Accounts Receivable
Represents the number of sales for which
Accounts
= collected
payments have not yet been Receivable
Sales Ratio
