The Financial Detective

Topics: Balance sheet, Inventory, Brand Pages: 2 (474 words) Published: April 10, 2009
First we will analyze the first industry presented in our case, the health products.

Company A and B of the health products industry have a different scope in terms of their customer and market base. Company A is the world’s largest prescription-pharmaceutical company and obviously has more market share than Company B. In fact at first glance, we can see that for most data of the assets, liability& Equity, and Income/Expenses section, company A values are higher than those of company B. Taking a closer look at the financial data and ratio, we will analyze some major and subsections of the financial data in Exhibit 1. Starting with the Assets section, Company A has higher values than company B in Current assets, Net Fixed assets and lower values in intangibles. The high value of company A current asset means it has a good source of fund in its day to day operations. Also company A seems to have more funds available for the firm’s operations due to its high value in fixed assets. Company B high value in intangible on the other hand comes from its high number of brand recognition. This precedent factor fits the description of the other company of the health care product whose brand development is a major element of its mass market oriented strategy.

From the above facts we can also conclude that company A is the company described as the world’s largest prescription pharmaceutical company. These findings are even strengthened by more ratios such as the inventory turnover a subcategory of the asset management. As we can see the low value in inventory turnover may means a slow sales for company B. On the other hand company A whose business is described as the partner of choice for licensing deals has a higher inventory turnover.

Our second industry, the beer industry also portrays two unknown companies, company C and D, one is a national brewer of mass market consumer beers sold under a variety of brand names and one produces seasonal and year round beers...
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