Q1. Wal-Mart generates profits from a (high mark up / _______________). What other companies have a low-cost high-volume strategy? (__________ / __________ /DELL / AAPL) Contributing to CC and BBY’s high asset turnover is their high (_______________ / inventory) turnover.
Q2. Inventory turnover is faster for (BBY / _______________) because it assembles the product after the order is received from the customer, thereby needing very little inventory on hand. Whereas inventory turnover is slower for (_______________ / DELL) because inventory sits on the shelf an average of __________ days, almost __________ months before it is sold.
Q3. The company with the strongest ROA is (CC / BBY / WMT / DELL / __________). The primary driver of ROA for BBY is (ROS / __________) whereas for AAPL it is (__________ / asset turnover). Branding of AAPL allows it to charge (__________/ less) for its products, resulting in a higher (__________ / asset turnover).
Q4. The company with the greatest financial leverage is (CC / BBY / WMT / __________/ AAPL), indicating it relies primarily on (__________/ equity) to finance assets. Creditors, those who finance debt, (do / __________) have ownership rights. Therefore, there are (__________/ less) profits for the shareholders, who (__________/ do not) have ownership rights.
Q5. The company with the highest ROE is (CC / BBY / WMT / __________/ AAPL). The driver of ROE for Dell is (ROA / __________), as ROA contributes __________to ROE, whereas financial leverage contributes __________ to ROE. (ROE of 39.16% - ROA of 7.84%)
Q6. The company with the weakest ROE is (__________/ BBY / WMT / DELL / AAPL). Circuit City filed for bankruptcy on November 10, 2008. Impending signs of bankruptcy include weak (efficiency / __________/ both). How can you tell?
Q7. Best Buy has its cash tied up in (accounts receivable / __________), whereas Dell has its cash tied up in (__________/ inventory). Which company is managing its cash most efficiently? (CC / BBY / WMT / DELL / __________) How can you tell?
Q8. Overall the company with the greatest profitability is (CC / BBY / WMT / DELL / __________). How can you tell?
Q9. Of the 5 companies, which one would you choose to invest in? (CC / __________/ __________/ __________/ __________) Why? Support your choice by discussing at least 3 good reasons.