Comparative Analysis of Financial Statements Between Two Companies
A Case Report on the Financial Statements of Reed Elsevier and Thomson Corporation
Executive Summary
With the objective to understand the business performance of the two entities, we reviewed the 2007 financial statements of both company and tried to obtain some insight on the profitability and solvency of each entity.
The two companies we study are: Reed Elsevier and Thomson, in the filed of information and publishing.
Reed Elsevier is listed in below stock exchanges: REN (Euronext Amsterdam), REL (London), RUK and ENL (NYSE). Thomson was shown (before acquiring Reuters) as TOC (NYSE) and TOC (TSX).
As the two multinational companies we are studying covering diversified businesses, here in the article we are only focusing on the HQ level, and also from a global perspective rather than going into regions.
Note: the financial report of Reed Elsevier is presented in Euro while Thomson’s report is presented in US Dollar.
Article Outline
Income Statement……………………………………………………………………2
Cash Flow Statement………………………………………………………………...5
Balance Sheet………………………………………………………………………..8
Final Thoughts……………………………………………………………………...11
Appendix (Ratios) ………………………………………………………………….12
***
Income statement
Income statement - Reed Elsevier (Euro) Income statement - Thomson (US dollars)
We know that any company’s income statement reveals much more than its earnings. It provides important insights into how management is controlling expenses, the amount of interest income and expense and taxes paid.
We can compare the income statements of the two companies we chose by examining various profit margins such as the gross profit margin, operating profit margin, and net profit margin.
Gross Profit Margin
Gross profit margin will help us to understand company’s manufacturing and distribution efficiency during the production process. Gross Profit -----divided by------Total Revenue
Reed Elsevier: 4,322
Executive Summary
With the objective to understand the business performance of the two entities, we reviewed the 2007 financial statements of both company and tried to obtain some insight on the profitability and solvency of each entity.
The two companies we study are: Reed Elsevier and Thomson, in the filed of information and publishing.
Reed Elsevier is listed in below stock exchanges: REN (Euronext Amsterdam), REL (London), RUK and ENL (NYSE). Thomson was shown (before acquiring Reuters) as TOC (NYSE) and TOC (TSX).
As the two multinational companies we are studying covering diversified businesses, here in the article we are only focusing on the HQ level, and also from a global perspective rather than going into regions.
Note: the financial report of Reed Elsevier is presented in Euro while Thomson’s report is presented in US Dollar.
Article Outline
Income Statement……………………………………………………………………2
Cash Flow Statement………………………………………………………………...5
Balance Sheet………………………………………………………………………..8
Final Thoughts……………………………………………………………………...11
Appendix (Ratios) ………………………………………………………………….12
***
Income statement
Income statement - Reed Elsevier (Euro) Income statement - Thomson (US dollars)
We know that any company’s income statement reveals much more than its earnings. It provides important insights into how management is controlling expenses, the amount of interest income and expense and taxes paid.
We can compare the income statements of the two companies we chose by examining various profit margins such as the gross profit margin, operating profit margin, and net profit margin.
Gross Profit Margin
Gross profit margin will help us to understand company’s manufacturing and distribution efficiency during the production process. Gross Profit -----divided by------Total Revenue
Reed Elsevier: 4,322