Financial Data with the Company's Description

Detective, 2005 - Case 6

MBA 7300-01

Dr. Carol Wang

Group 1

Joel Mehan

Financial Data with the Company's Description

Health Products

Company A

Company A is the diversified health-products company.  This is found by its high cost of goods sold representing 23.9% vs 11.1% by company B.  

Company B

Company B is the world’s largest prescription-pharmaceutical company.  This is evident by its high intangibles and low taxes.  B’s intangibles represent 22.2% of its assets which translates as their robust research.  In recent years, they have also divested several of its businesses and that would result in their low tax of 5.1%.

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Beer

Company C

Company C is the national brewer of mass-market consumer beers sold under a variety of brand names.  With its extensive distribution systems, it has high net fixed assets at 54.7 % of total current assets.

Company D

Company D produces seasonal and year-round beers with smaller production volume and higher prices.  They are financially conservative and that is represented by 55.6% of their total assets in cash and high stockholders’ equity represented by 72.9% of total liabilities and equity.  Also with the recent surge in packaging and freight costs, D’s SG&A expense is 50.5% of expenses.

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Computers

Company E

Company E focuses exclusively on mail-order sales of built-to-order PCs.  Due to assembling of PC components from suppliers, E has a high accounts payable of 38.3% of its liabilities.  With all their sales being done online, they also have a high accounts receivable of 19% of total assets.

Company F

Company F sells a highly differentiable line of computers, consumer-oriented electronic devices, and a variety of proprietary software products.  With the company’s aggressive retail strategy, it results in a high SG&A expense of 23.1% of expenses.

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Books and Music

Company G

Company G is the company that sells books, music, and videos solely through its internet web site.  Selling only through e-commerce results in low fixed assets of 7.6% of assets.  With its aggressive strategy of acquiring related online business, G has high assets in their “other” category of 9.3%.

Company H

Company H focuses on selling primarily to customers through a vast retail-store presence.  This results in high inventories of 38.6% of current assets.

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Paper Products

Company I

Company I is the small producer of printing, writing, and technical speciality papers. Its description did not provide enough clues to distinguish from either I or J.    

Company J

Company J is the world’s largest maker of paper, paperboard, and packaging.  J is vertically integrated so therefore they have higher net fixed assets of 62.5% of total assets.  They have also been closing inefficient mills which has resulted in them having a low “other” assets of just 3.1%.  Additionally, J has been selling nonessential assets which would account for their low SG&A expense of 7.3%.

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Hardware and Tools

Company K

Company K is a global manufacturer and marketer of power tools and power-tool accessories, hardware and home-improvement products, and fastening systems.  Since the company primarily sells to retailers, wholesalers, and distributors, they have higher receivables turnover of 5.82.

Company L

Company L manufactures and markets high-quality precision tools and diagnostic equipment systems for professional users.  L sells their products through their own technical representatives which results in a high SG&A expense of 38.9% of expenses.  They also provide financing for franchisees and customers’ large purchases that translates into a high accounts receivable of 23.7% of current assets.