1. Identification of the company being described
Company A: Manufacturer of toiletries, non-prescription drugs, and consumer and baby care products.
·Compared with Co. B, Co. A has a higher gross margin equivalent to 63.1 percent.
Company B: Manufacturer of pharmaceuticals and low-margin hospital supplies.
·Goodwill can be seen on the other assets portion of the balance sheet. Co. B has a significant amount of other assets (40.6 %).
·Compared to Co. A, gross profit is 36.0 percent.
Company C: Marketer of high quality washers, dryers, dishwashers and refrigerators in its own name.
·High quality can be associated with high sales price of goods. Co. C has a higher Sales / Assets ratio equal to 223.0 percent.
·Cost of good sold is lower (72.8%) as against (79.8%) which may explain that manufacturing and selling under one brand name has a lower manufacturing cost.
Company D: Marketer of the same products under 3 different brand names.
·The company has a higher cost of goods sold (79.8 %) which may explain that manufacturing and selling one product under 3 brand names would require higher cost of goods sold.
Company E: Manufacturer of large mainframe computers.
·This company offers financial services aside from the manufacture of mainframe computers. Receivables comprise 18.7 percent of total assets which is significant in financing type of business.
·Financial services reflect other income for the company in the form of interest income which is 2.7 percent of total revenues generated.
Company F: Manufacturer of supercomputer systems for scientific applications.
·Output of the units were relatively small but the price is highest in the industry. Cost of goods sold is only 35.7 percent gross margin is 64.3%.
·Because the supercomputers were used for research, R&D expense of Co. F is 15.8 % of sales.
Company G: Discount store – wholesaler
·Inventory is large – 51.7 percent which is typical of wholesaler of goods.
Company H: Credit-based department store.
·SG&A is 97.1% (all of it operating expenses) may explain the nature that it leases it properties being used.
Company I: Semiconductor company with the defense industry as its main client.
·Compared with Co. J, total current assets is only 50.9% as against 60.2% which represents that it is less financially conservative.
Company J: Semiconductor manufacturer with radios and television equipment as
·Compared with Co. I, total current assets is 60.2%, 15.6 % of which is on cash & equivalents. This means that the company is financially conservative.
·Aside from semiconductor manufacturing, it is also involved in manufacturing of television and radio equipment. Which will explain the other income of 3.9%.
Company K: Operator of high quality hotels and motels.
·Long-term debt is considerably lower (21.6%) than Co. L (46.5%).
Company L: Largest food contractor in the country. Its financing is through off-balance sheet limited partnerships.
·Long-term debt is 46.5% which justifies that much of its hotel operations are financed by other parties on long-term basis.
Company M: Newspaper company that owns a number of small newspapers throughout the Midwest.
·Broadcasting is a secondary line of business that accounts for the other income percentage of 11.8 percent.
·Has significant amount of goodwill stemming from acquisitions. Other assets – 61.7%.
Company N: Large flagship newspaper that sells all over the country and the around the world.
·Because it is a big newspaper company that sells its product around the country and the world, its net properties, plant and equipment is significantly higher at 56.2%.
Company O: Trucking and freight-forwarding company
·The SG&A is high at 86.1% and is composed of purely operating expenses, which is typical for a freight forwarding company.
·20% of revenues was said to be derived from real estate business which will reflect on the company’s receivables – 18.7%
·Sales assets = 191% which reflects that it has diverse and high selling products like real estate.
Cite this Financial Detective
Financial Detective. (2018, Jul 05). Retrieved from https://graduateway.com/financial-detective/