Case of Unidentified Industries
HBS - The Case of the Unidentified Industries -2006
With The Case of Unidentified Industries, William E. Fruhan Jr. wants us to visualize the balance sheets belonging to fourteen unknown companies and connect them with the suitable industries.
In order to determine which balance sheets belong to which industry, we studied several companies in those industries. Using a number of different sources such as Yahoo Finance, Google Finance, Wikipedia and Investopedia, we were able to the link the unidentified firms balance sheets with their associated industries.
In order to give structure to our analysis, we will have two main parts. In part one we will analyze the Service oriented companies and in the second part we will turn towards the Product oriented companies.
I. Service Oriented Companies
We were able to distinguish the Service oriented companies by looking at their Inventories. Being those kinds of companies they showed zero inventories and “not applicable” (NA) inventory turnover.
The first service-oriented company was E, the advertising agency.
We were able to see that the accounts receivable and the accounts payable were almost equal. Which reflects how advertising agencies do business and what Lamar Advertising & Co (LAMR) had. Advertising agencies are usually paid for their services when the campaign or assignment is done. And they usually pay their media buys or media buying companies at the end of the assignment.
Furthermore, LAMR also showed a big percentage of their assets as intangible ones. Which is logical for a service company like an advertising agency and is what company E shows on its balance sheet.
Their sustainable competitive advantage is based on their human resources creativity, which could be kept as assets in the form of patents (e.g. design patents).
The second company was company G, the Health Maintenance Organization (HMO).
We noticed that the accounts receivable represent 51%, which explains perfectly the
With The Case of Unidentified Industries, William E. Fruhan Jr. wants us to visualize the balance sheets belonging to fourteen unknown companies and connect them with the suitable industries.
In order to determine which balance sheets belong to which industry, we studied several companies in those industries. Using a number of different sources such as Yahoo Finance, Google Finance, Wikipedia and Investopedia, we were able to the link the unidentified firms balance sheets with their associated industries.
In order to give structure to our analysis, we will have two main parts. In part one we will analyze the Service oriented companies and in the second part we will turn towards the Product oriented companies.
I. Service Oriented Companies
We were able to distinguish the Service oriented companies by looking at their Inventories. Being those kinds of companies they showed zero inventories and “not applicable” (NA) inventory turnover.
The first service-oriented company was E, the advertising agency.
We were able to see that the accounts receivable and the accounts payable were almost equal. Which reflects how advertising agencies do business and what Lamar Advertising & Co (LAMR) had. Advertising agencies are usually paid for their services when the campaign or assignment is done. And they usually pay their media buys or media buying companies at the end of the assignment.
Furthermore, LAMR also showed a big percentage of their assets as intangible ones. Which is logical for a service company like an advertising agency and is what company E shows on its balance sheet.
Their sustainable competitive advantage is based on their human resources creativity, which could be kept as assets in the form of patents (e.g. design patents).
The second company was company G, the Health Maintenance Organization (HMO).
We noticed that the accounts receivable represent 51%, which explains perfectly the