FD - Marking Scheme You are the new finance manager of FD Group - Instruction: a holding company with diverse investments in Focus on the different industries. The Board of Director is "numbers asking you for your opinion / analysis of the particularly following holdings with their concerns. market [Note: Assuming market is efficient; therefore, multiples (e.g., market multiples have high predictive power] P/E, P/B, etc). Do not discuss industry characteristics e.g., "Health is important so the market will grow. Task 1: Health Industry - A vs B. Which firm has higher/lower/same market growth potential? Why? Which firm has higher financial strength to support growth and why? Type your answer below [Max: 50 words]: Task 2: Beer Industry - C vs D. According to Porter's Business Strategy Volume (or low cost) / Niche / Differentiation. What strategy do you think C and D are pursuing? Type your answer below [Max: 50 words]: Task 3: Identify the top 2 Cashcow firms as measured by FCF i.e., able to generate the highest FCF and why? Type your answer below [Max: 50 words]: Task 4: Identify the top Dog (as in BCG model) among the firms (A to P): Type your answer below [Max: 50 words]: EXHIBIT 1 | Common-Sized Financial Data and Ratios B B D E F F G G H 1 J K L M N O P Assets A Cash & Short-Term Investments 24.2 - Receivables 12.8 Inventories 7.0 Current Assets-Other 7.2 Current Assets-Total 51.2 Net Fixed Assets 19.6 Assets-Other 6.9 Intangibles 22.2 Investments & Advances 0.1 Assets-Total 100.0 Liabilities & Equity 16,1 8.1 5.4 2.5 32.1 14.9 3.8 46.1 3.1 100.0 1.4 4.3 4.3 1.3 11.2 54.7 7.2 7.4 2.9 100.0 55.6 11.9 11.7 2.4 81.7 16.0 1.0 1.3 0.0 100.0 42.2 67.9 19.0 13.0 2.0 1.3 9,5 5.5 72.8 87.6 7.3 8.8 1.3 2,4 0.0 1.2 18.6 0.0 100.0 100.0 54.8 nmt 14.8 8.6 78.2 7.6 9.3 4.4 0.0 100.0 16.2 2.3 38.6 2.6 59.7 24.4 4.9 11.1 0.0 100.0 7.6 8.8 7.9 3.0 27.2 50.8 5,4 14.6 0.0 100.0 5.9 9.3 10.9 18.9 14.4 17.8 1.4 7.0 32.6 52.9 62.5 13,6 3.1 11.8 1.9 21.4 0.0 0.0 100.0 100.0 6.5 23.7 14.9 6.9 52.1 13.7 8.9 22.3 3.0 100.0 4.6 1.4 24,5 1.5 32.0 57.0 2.0 9.0 0.0 100.0 7.0 17.0 16.7 2.5 43.1 52.2 4.0 0.6 0.0 100.0 0.6 4,6 0.8 0.7 6.6 14.1 0.1 76.8 0.7 100.0 1.1 9.9 0.8 3.8 15.5 34.6 7.2 37.1 0.0 100.0 Accounts Payable Debt in Current Liabilities Income Taxes Payable Current Liabilities-Other Current Liabilities-Total LT Debt Deferred Taxes Liabilities -Other Liabilities-Total Stockholders' Equity Total Liabilities & Equity 9.8 0.5 2.B 13.0 26.1 4.8 0.B 8.6 40.3 59.7 100.0 2.2 9.1 1.6 8.5 21.4 5.9 10.2 7.3 44.8 55.2 100.0 7.4 0.0 0.9 3.8 12.2 51.2 10.7 9.5 83.5 16.5 100.0 9.1 0.0 1.7 13.7 24.4 0.0 1.9 0.7 27.1 72.9 100.0 38.3 0.0 0.0 22.6 60.9 2.2 0.0 8.9 72.1 27.9 100.0 18.0 0.0 0.0 15.3 33.3 0.0 0.0 3.7 36.9 63.1 100.0 35.1 22.6 0.1 0.0 0.0 0.0 14.7 17.6 49.9 40.2 56.9 7.4 nmt 5.9 0.2 11.0 64.7 (7.0) 35.3 100.0 100.0 6.7 1.5 0.0 6.1 14.2 41.3 5.0 10.9 75.9 24.1 100.0 8.5 0.0 1.2 7.1 16.7 18.3 12.0 12.4 59.5 40.5 100.0 8.4 3.5 0.9 19.5 32.4 21.7 3.1 14.6 71.8 28.2 100.0 8.5 5.6 1.0 14.4 29.4 8.9 3.3 8.9 51.5 48.5 100.0 18.0 6.5 1.1 10.1 35.7 19.7 nmt 2.5 58.9 41.1 100.0 17.9 1.6 0.9 5.1 25.5 28.0 3.0 3.2 59.7 40.3 100.0 1.4 4.8 0.8 14.9 0.3 nmt 5.1 8.7 7.5 28.3 14.4 11.9 15.0 3.3 0.7 17.5 37.5 64.5 62.5 35.5 100.0 100.0 107.0 Income/Expenses Sales-Net 100.0 Cost of Goods Sold 23.9 Gross Profit 76.1 SG&A Expense 44.5 Depreciation 4.5 Earnings Before Interest & Taxes 27.2 Nonoperating Income (Expense) 0.7 Interest Income (Expense) (0.7) Special Items-Income (Expense) (0.0) Pretax Income 27.1 Income Taxes-Total 9.1 Net Income (Loss) 18.0 100.0 11.1 88.9 46.7 9.7 32.5 1.1 0.7 (6.3) 26.7 5.1 21.6 100.0 53.9 46.1 17.3 6.2 22.5 2.9 2.9 0.2 22.8 7.8 15.0 100.0 38.5 61.5 50.5 2.0 9.0 0.3 0.0 0.0 9.2 3.5 5.8 100.0 81.0 19.0 9.7 0.7 8.6 0.4 0.0 0.0 9.0 2.8 6.2 100.0 70.9 29.1 23.1 1.8 4.2 0.7 0.0 (0.3) 4.6 1.3 3.3 100.0 75.8 24.2 16.9 1.1 6.2 0.3 1.5 0.1 5.1 (3.4) 8.5 100.0 69.5 30.5 21.8 3.7 5.0 0.1 0.3 (0.3) 4.5 1.9 2.9 100.0 75.3 24.7 12.0 6.1 6.6 0.4 3.3 (0.8) 2.9 0.8 (0.1) 100.0 82.9 17.1 7.3 5.8 4.0 0.1 1.0 0.0 3.1 1.2 2.0 100.0 61.0 39.0 24.8 26 11.7 0.6 1.1 0.0 11.2 3.0 8.4 100.0 51.6 48.4 38.9 2.5 6.9 0.1 1.0 (1.0) ( 5.1 1.6 3.4 100.0 75.3 24.7 17.9 1.5 5.3 0.8 0.5 0.0 5.6 2.0 3.6 100.0 67.1 32.9 22.5 2.7 7.7 0.0 1.0 (0.2) 6.5 2.4 6.8 100.0 49.7 50.3 23.0 7.0 20.2 1.3 1.9 0.0 19.7 7.1 12.6 100.0 40.5 59.5 39.7 4.1 15.6 0.4 1.6 (0.1) 14.4 5.6 8.9 123 FA EXHIBIT 1 | Common-Sized Financial Data and Ratios (Continued) P2 Market Data A B C D E F G H 1 J KL M N OP Beta Price/Earnings Price to Book Dividend Payout Liquidity 0.65 22.29 5.93 38.21 0.85 22.32 3.08 46.28 0.55 16.85 13.99 33.16 0.60 19.73 2.56 0.00 1.20 30.48 17.46 0.00 1.05 41.85 5.13 0.00 1.70 27.32 nmt 0.00 0.51 1.15 21.63 30.97 2.36 1.91 0.00 101.46 1.10 33.78 1.80 86.16 1.00 1.00 13.64 23.01 4.65 1.85 15.30 70.62 0.85 1.10 18.97 24.19 4.23 3.64 21.56 14.85 0.85 0.90 20.54 13.29 2.07 3.09 37.53 30.81 Current Ratio Quick Ratio 1.96 1.42 1.50 1.13 0.92 0.47 3.35 2.77 1.20 1.01 2.63 2.43 1.57 nmt 1.49 0.46 1.91 1.15 1.94 1.00 1.63 0.87 1.77 1.03 0.90 0.17 1.69 0.94 0.88 0.69 0.55 0.39 Asset Management Inventory Turnover Receivables Turnover Fixed Assets Turnover 3.08 7.06 4.67 0.93 5.47 2.86 12.60 21.87 1.72 7.44 67.96 74.78 18.68 12.23 8.28 12.67 30.68 12.03 13.56 nmt 29.42 2.42 72.11 6.54 6.75 8.68 1.43 7.11 11.64 1.86 3.89 5.82 7.63 3.59 7.69 4.42 192.73 7.50 4.50 5.86 8.31 2.77 33.35 43.48 10.98 8.50 3.43 2.59 Debt Management Total Debt Total Assets LT Debt/Shareholders' Equity Interest Coverage After Tax DuPont Analysis 5.34 8.06 27.34 14.99 51.19 10.66 310.28 32.57 6.25 0.00 2.18 0.00 nmf 191.19 7.79 0.00 0.00 93.00 56.94 nmf 6.49 7.42 42.78 21.01 171.21 9.52 1.56 18.36 25.21 45.32 77.03 2.98 8.62 14.45 18.29 4.55 26.16 29.54 47.92 69.34 8.86 4.92 15.22 23.04 7.83 26.81 33.66 6.69 Net Profit Margin Asset Turnover Return on Equity 17.97 21.58 15.00 5.76 6.18 0.93 0.44 0.97 2.23 2.31 26.75 16.64 83.97 15.95 15.95 46.92 3.33 1.11 5.44 8.50 2.56 nmt 2.53 1.43 10.58 1.87 0.73 5.79 1.96 8.17 1.20 1.11 5.71 28.30 3.39 1.09 7.36 3.59 2.54 20.79 4.02 1.47 14.47 12.65 8.86 0.48 0.85 9.86 20.89 Sources of data: S&P's Research Insight; Value Line Investment Survey nmfnot a meaningful figure. FD - Marking Scheme You are the new finance manager of FD Group - Instruction: a holding company with diverse investments in Focus on the different industries. The Board of Director is "numbers asking you for your opinion / analysis of the particularly following holdings with their concerns. market [Note: Assuming market is efficient; therefore, multiples (e.g., market multiples have high predictive power] P/E, P/B, etc). Do not discuss industry characteristics e.g., "Health is important so the market will grow. Task 1: Health Industry - A vs B. Which firm has higher/lower/same market growth potential? Why? Which firm has higher financial strength to support growth and why? Type your answer below [Max: 50 words]: Task 2: Beer Industry - C vs D. According to Porter's Business Strategy Volume (or low cost) / Niche / Differentiation. What strategy do you think C and D are pursuing? Type your answer below [Max: 50 words]: Task 3: Identify the top 2 Cashcow firms as measured by FCF i.e., able to generate the highest FCF and why? Type your answer below [Max: 50 words]: Task 4: Identify the top Dog (as in BCG model) among the firms (A to P): Type your answer below [Max: 50 words]: EXHIBIT 1 | Common-Sized Financial Data and Ratios B B D E F F G G H 1 J K L M N O P Assets A Cash & Short-Term Investments 24.2 - Receivables 12.8 Inventories 7.0 Current Assets-Other 7.2 Current Assets-Total 51.2 Net Fixed Assets 19.6 Assets-Other 6.9 Intangibles 22.2 Investments & Advances 0.1 Assets-Total 100.0 Liabilities & Equity 16,1 8.1 5.4 2.5 32.1 14.9 3.8 46.1 3.1 100.0 1.4 4.3 4.3 1.3 11.2 54.7 7.2 7.4 2.9 100.0 55.6 11.9 11.7 2.4 81.7 16.0 1.0 1.3 0.0 100.0 42.2 67.9 19.0 13.0 2.0 1.3 9,5 5.5 72.8 87.6 7.3 8.8 1.3 2,4 0.0 1.2 18.6 0.0 100.0 100.0 54.8 nmt 14.8 8.6 78.2 7.6 9.3 4.4 0.0 100.0 16.2 2.3 38.6 2.6 59.7 24.4 4.9 11.1 0.0 100.0 7.6 8.8 7.9 3.0 27.2 50.8 5,4 14.6 0.0 100.0 5.9 9.3 10.9 18.9 14.4 17.8 1.4 7.0 32.6 52.9 62.5 13,6 3.1 11.8 1.9 21.4 0.0 0.0 100.0 100.0 6.5 23.7 14.9 6.9 52.1 13.7 8.9 22.3 3.0 100.0 4.6 1.4 24,5 1.5 32.0 57.0 2.0 9.0 0.0 100.0 7.0 17.0 16.7 2.5 43.1 52.2 4.0 0.6 0.0 100.0 0.6 4,6 0.8 0.7 6.6 14.1 0.1 76.8 0.7 100.0 1.1 9.9 0.8 3.8 15.5 34.6 7.2 37.1 0.0 100.0 Accounts Payable Debt in Current Liabilities Income Taxes Payable Current Liabilities-Other Current Liabilities-Total LT Debt Deferred Taxes Liabilities -Other Liabilities-Total Stockholders' Equity Total Liabilities & Equity 9.8 0.5 2.B 13.0 26.1 4.8 0.B 8.6 40.3 59.7 100.0 2.2 9.1 1.6 8.5 21.4 5.9 10.2 7.3 44.8 55.2 100.0 7.4 0.0 0.9 3.8 12.2 51.2 10.7 9.5 83.5 16.5 100.0 9.1 0.0 1.7 13.7 24.4 0.0 1.9 0.7 27.1 72.9 100.0 38.3 0.0 0.0 22.6 60.9 2.2 0.0 8.9 72.1 27.9 100.0 18.0 0.0 0.0 15.3 33.3 0.0 0.0 3.7 36.9 63.1 100.0 35.1 22.6 0.1 0.0 0.0 0.0 14.7 17.6 49.9 40.2 56.9 7.4 nmt 5.9 0.2 11.0 64.7 (7.0) 35.3 100.0 100.0 6.7 1.5 0.0 6.1 14.2 41.3 5.0 10.9 75.9 24.1 100.0 8.5 0.0 1.2 7.1 16.7 18.3 12.0 12.4 59.5 40.5 100.0 8.4 3.5 0.9 19.5 32.4 21.7 3.1 14.6 71.8 28.2 100.0 8.5 5.6 1.0 14.4 29.4 8.9 3.3 8.9 51.5 48.5 100.0 18.0 6.5 1.1 10.1 35.7 19.7 nmt 2.5 58.9 41.1 100.0 17.9 1.6 0.9 5.1 25.5 28.0 3.0 3.2 59.7 40.3 100.0 1.4 4.8 0.8 14.9 0.3 nmt 5.1 8.7 7.5 28.3 14.4 11.9 15.0 3.3 0.7 17.5 37.5 64.5 62.5 35.5 100.0 100.0 107.0 Income/Expenses Sales-Net 100.0 Cost of Goods Sold 23.9 Gross Profit 76.1 SG&A Expense 44.5 Depreciation 4.5 Earnings Before Interest & Taxes 27.2 Nonoperating Income (Expense) 0.7 Interest Income (Expense) (0.7) Special Items-Income (Expense) (0.0) Pretax Income 27.1 Income Taxes-Total 9.1 Net Income (Loss) 18.0 100.0 11.1 88.9 46.7 9.7 32.5 1.1 0.7 (6.3) 26.7 5.1 21.6 100.0 53.9 46.1 17.3 6.2 22.5 2.9 2.9 0.2 22.8 7.8 15.0 100.0 38.5 61.5 50.5 2.0 9.0 0.3 0.0 0.0 9.2 3.5 5.8 100.0 81.0 19.0 9.7 0.7 8.6 0.4 0.0 0.0 9.0 2.8 6.2 100.0 70.9 29.1 23.1 1.8 4.2 0.7 0.0 (0.3) 4.6 1.3 3.3 100.0 75.8 24.2 16.9 1.1 6.2 0.3 1.5 0.1 5.1 (3.4) 8.5 100.0 69.5 30.5 21.8 3.7 5.0 0.1 0.3 (0.3) 4.5 1.9 2.9 100.0 75.3 24.7 12.0 6.1 6.6 0.4 3.3 (0.8) 2.9 0.8 (0.1) 100.0 82.9 17.1 7.3 5.8 4.0 0.1 1.0 0.0 3.1 1.2 2.0 100.0 61.0 39.0 24.8 26 11.7 0.6 1.1 0.0 11.2 3.0 8.4 100.0 51.6 48.4 38.9 2.5 6.9 0.1 1.0 (1.0) ( 5.1 1.6 3.4 100.0 75.3 24.7 17.9 1.5 5.3 0.8 0.5 0.0 5.6 2.0 3.6 100.0 67.1 32.9 22.5 2.7 7.7 0.0 1.0 (0.2) 6.5 2.4 6.8 100.0 49.7 50.3 23.0 7.0 20.2 1.3 1.9 0.0 19.7 7.1 12.6 100.0 40.5 59.5 39.7 4.1 15.6 0.4 1.6 (0.1) 14.4 5.6 8.9 123 FA EXHIBIT 1 | Common-Sized Financial Data and Ratios (Continued) P2 Market Data A B C D E F G H 1 J KL M N OP Beta Price/Earnings Price to Book Dividend Payout Liquidity 0.65 22.29 5.93 38.21 0.85 22.32 3.08 46.28 0.55 16.85 13.99 33.16 0.60 19.73 2.56 0.00 1.20 30.48 17.46 0.00 1.05 41.85 5.13 0.00 1.70 27.32 nmt 0.00 0.51 1.15 21.63 30.97 2.36 1.91 0.00 101.46 1.10 33.78 1.80 86.16 1.00 1.00 13.64 23.01 4.65 1.85 15.30 70.62 0.85 1.10 18.97 24.19 4.23 3.64 21.56 14.85 0.85 0.90 20.54 13.29 2.07 3.09 37.53 30.81 Current Ratio Quick Ratio 1.96 1.42 1.50 1.13 0.92 0.47 3.35 2.77 1.20 1.01 2.63 2.43 1.57 nmt 1.49 0.46 1.91 1.15 1.94 1.00 1.63 0.87 1.77 1.03 0.90 0.17 1.69 0.94 0.88 0.69 0.55 0.39 Asset Management Inventory Turnover Receivables Turnover Fixed Assets Turnover 3.08 7.06 4.67 0.93 5.47 2.86 12.60 21.87 1.72 7.44 67.96 74.78 18.68 12.23 8.28 12.67 30.68 12.03 13.56 nmt 29.42 2.42 72.11 6.54 6.75 8.68 1.43 7.11 11.64 1.86 3.89 5.82 7.63 3.59 7.69 4.42 192.73 7.50 4.50 5.86 8.31 2.77 33.35 43.48 10.98 8.50 3.43 2.59 Debt Management Total Debt Total Assets LT Debt/Shareholders' Equity Interest Coverage After Tax DuPont Analysis 5.34 8.06 27.34 14.99 51.19 10.66 310.28 32.57 6.25 0.00 2.18 0.00 nmf 191.19 7.79 0.00 0.00 93.00 56.94 nmf 6.49 7.42 42.78 21.01 171.21 9.52 1.56 18.36 25.21 45.32 77.03 2.98 8.62 14.45 18.29 4.55 26.16 29.54 47.92 69.34 8.86 4.92 15.22 23.04 7.83 26.81 33.66 6.69 Net Profit Margin Asset Turnover Return on Equity 17.97 21.58 15.00 5.76 6.18 0.93 0.44 0.97 2.23 2.31 26.75 16.64 83.97 15.95 15.95 46.92 3.33 1.11 5.44 8.50 2.56 nmt 2.53 1.43 10.58 1.87 0.73 5.79 1.96 8.17 1.20 1.11 5.71 28.30 3.39 1.09 7.36 3.59 2.54 20.79 4.02 1.47 14.47 12.65 8.86 0.48 0.85 9.86 20.89 Sources of data: S&P's Research Insight; Value Line Investment Survey nmfnot a meaningful figure
