The Financial Detective‚ 2005 proportion Financial characteristics of companies vary for many reasons. The two most promi_ nent drivers are industry economics and firm sfategy. Each industry has a financial norm around which companies within the industry tend to operate. An airline‚ for example‚ wourd naturary be expected to have a high of fixed assets (airplanes)‚ manufacturer would be expected to have a lower gross margin than a pharmaceutical manufacturer because commodities such as
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The Financial Detective As rightly said in the case‚ the financial statements of no two companies are alike. The financial statements of companies in a particular industry‚ however‚ have many similarities and follow certain financial norms unique to that industry. Our analysis focuses on identifying these similarities. Company A: Manufactures and markets a broad line of name brand toiletries‚ nonprescription drugs‚ and consumer and baby care products. When compared to company B‚ it has: •
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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
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The Financial Detective 1. Health Products: The first firm is company A and the second firm is company B because company B has a higher gross profit and higher intangibles as seen in the financial data. This is due to the additional costs and expenses company A has in comparison to company B. 2. Beer: The first firm is company C and the second firm is company D because company C has higher fixed assets and company D has higher gross profit as seen in the financial data. This is due to firm C owning
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The Financial Detective‚ 2005 Teaching Note Synopsis and Objectives The case presents the student with financial ratios for eight pairs of unidentified companies and asks them to mate the description of the company with the financial profile derived from the ratios. The primary objective of this case is to introduce students to financial ratio analysis—in particular‚ the range of ratios and the insights each one affords. This case presumes that students have already been introduced to
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1. EXAMINE & ANALYZE THE FINANCIAL RATIOS FOR EIGHT PAIRS OF UNIDENTIFIED COMPANIES A) Health Products From the market data‚ the beta of company B is slightly higher than company A. Company A appears to be less risky than company B. It is likely because company A is a diversified health-products company. Since it manufactures various products and involves in different segments‚ risk could be reduced. The liquidity ratios show that both companies A and B might not face liquidity problem. Current
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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
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companies with certain industries tend to have similar financial make-ups. This is because companies within an industry face many of the same economic forces. Some of those economic forces would include government regulation‚ consumer sentiment towards the product or service‚ consumer demographics‚ and international appeal and competition. However‚ when you take a deeper look at the companies within the industry you will see differences in their financial statements because companies must tailor a competitive
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professional users and sells them through its own technical representatives and mobile franchise dealers. The global manufacturer would be company L because they would have higher selling‚ general and administrative costs‚ in this case 38.9 compared to 24.8.The company with the specialized tools from mobile franchise would have higher cost of goods sold‚ in this case 61.0 compared to 51.6. Retail Both companies are large discount retailers. One company carries a wide variety of nationally advertised
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Case 6 The Financial Detective‚ 2005 Health Products Company A has a much higher ratio of Cash & Short Term Investments‚ Receivables‚ and Inventories (24.2%‚ 12.8%‚ 7.0%) as compared to Company B (16.1%‚ 8.1%‚ 5.4%) which is lower in every asset category ratio besides Intangibles and Investments & Advances‚ 46.1% to 22.2% and 3.1% to .1%. This proves that Company A has cash on hand from the sale of side divisions and that they have a large production facility. Company B is a more diverse company
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