The Financial Detective
The Financial Detective
Kyle Cornelius
This case set contains information for two separate companies in eight different industries. Our task is to differentiate the companies based on what we know about them from a qualitative stand point and the financial data that we are provided.
The first one we will examine is in the healthcare field. One firm develops and manufactures prescription drugs and sells them to healthcare professionals directly using sales people. They have several unique patents and pursue an aggressive research and development strategy. The other manufactures non-prescription drugs, toiletries, and baby products for the mass-market. They use distributors and retailers to get their products in the hands of consumers. To draw a comparison between these two companies, we first looked at receivables and noticed that Firm A had much higher receivables than Firm B. (16.3 to 10.6) This would suggest that firm A has more customers to deal with and probably has a less stringent payment terms. Inventory was also higher for Firm A, (12.7 to 5.8) indicating that their business model was not a direct sales method, requiring them to hold more inventory at any given time. Next we must take into consideration Other Assets. We can see that this category is much higher for Firm B than Firm A. From this we can speculate that the patents of the prescription drug manufacturer account for this difference. Based on this information, we conclude that Firm A is the company that manufactures over the counter drugs and uses distributors and retailers to get them to market. Company B manufactures prescription drugs and sells them directly to healthcare professionals. The second case concerns two firms in the household appliances business. One firm manufactures and markets its own products under its own brand name. Their focus is to be the quality leader within the industry and charge high prices for their goods. The other attempts to achieve a high sales
Kyle Cornelius
This case set contains information for two separate companies in eight different industries. Our task is to differentiate the companies based on what we know about them from a qualitative stand point and the financial data that we are provided.
The first one we will examine is in the healthcare field. One firm develops and manufactures prescription drugs and sells them to healthcare professionals directly using sales people. They have several unique patents and pursue an aggressive research and development strategy. The other manufactures non-prescription drugs, toiletries, and baby products for the mass-market. They use distributors and retailers to get their products in the hands of consumers. To draw a comparison between these two companies, we first looked at receivables and noticed that Firm A had much higher receivables than Firm B. (16.3 to 10.6) This would suggest that firm A has more customers to deal with and probably has a less stringent payment terms. Inventory was also higher for Firm A, (12.7 to 5.8) indicating that their business model was not a direct sales method, requiring them to hold more inventory at any given time. Next we must take into consideration Other Assets. We can see that this category is much higher for Firm B than Firm A. From this we can speculate that the patents of the prescription drug manufacturer account for this difference. Based on this information, we conclude that Firm A is the company that manufactures over the counter drugs and uses distributors and retailers to get them to market. Company B manufactures prescription drugs and sells them directly to healthcare professionals. The second case concerns two firms in the household appliances business. One firm manufactures and markets its own products under its own brand name. Their focus is to be the quality leader within the industry and charge high prices for their goods. The other attempts to achieve a high sales