Finance

Industry Determinants of Financial...

Start Date:

Tue, Jan 5

Due Date:

Points

Points available: 25

Not yet graded.

Assignment 1-2: Industry Determinants of Financial Structure

Purpose

The purpose of this assignment is to relate financial ratios to specific industries and firm's positions, product

and asset mixes, and financial policies within those industries.

Action Items

1. Review the balance sheet, income statement, and financial ratios data for the 10 companies A through J in Common-Sized Financials and Select Ratios.

2. Complete the attached worksheet which requires you to match recent company financial data

presented in each column in the Common-Sized Financials document to companies in the following

industries:

1. PC designer and manufacturer

2. Online retailer

3. Warehouse club for food and general merchandise

4. Major passenger airline

5. International hotel chain

6. Temporary staffing agency

7. Supermarket grocery retailer

8. Pharmaceutical company

9. Telecommunications equipment designer and manufacturer

10. Manufacturer and marketer of consumer products

3. F or each choice, identify 2 - 3 specific financial statement numbers and/or ratios that lead you to identify any one column's numbers with one of the industries above.

4. Bring 2 copies of your completed exercises to class. One copy will be submitted to your professor at

the beginning of class. One copy will be used for an in-class activity.

Submission Instructions

Click the Submit button to upload your completed assignment prior to coming to class this week.

Time Estimation

Estimated time for completion: 3.5 hour(s)

Attachment:

Assignment1_1_FinancialStatementsRatioSheet_Draft1.docx;FINA495_Assignment1_1_Worksheet.docx;

Assignment 1-1: Common-Sized Financials and Select Ratios Assets Cash & Marketable Securities Accounts Receivable Inventory Other Current Assets Total Current Assets Net PP&E Intangibles Other Assets Total Assets Liabilities & Equity Accounts Payable Short-Term Debt Other Current Liabilities Total Current Liabilities Long-Term Debt Other Liabilities Total Liabilities Shareholders' Equity Total Liabilities & Equity Income Statement Net Sales Cost of Goods Sold Gross Profit R&D Expenses SG&A Expenses EBIT/Operating Profit Earnings before Tax Net Income A 1.6% B 7.4% C 60.7% D 4.0% E 48.0% F 17.1% G 14.7% H 35.6% I 22.1% J 3.7% 3.3% 15.8% 2.0% 22.7% 60.2% 13.6% 3.5% 100% 62.0% 2.8% 72.2% 3.1% 19.5% 5.2% 100% 6.6% 1.4% 17.9% 86.6% 7.2% 1.3% 4.9% 100% 4.8% 4.9% 3.7% 17.4% 14.2% 65.3% 3.1% 100% 10.9% 18.5% 2.2% 79.6% 9.9% 3.4% 3.7% 100% 3.9% 24.9% 1.7% 47.6% 48.5% 3.9% 100% 3.7% 3.0% 3.8% 25.2% 46.9% 11.8% 16.1% 100% 3.9% 2.5% 5.7% 47.7% 9.7% 7.2% 35.4% 100% 8.5% 4.6% 5.4% 40.6% 13.7% 36.3% 9.4% 100% 12.8% 6.0% 22.5% 32.0% 17.4% 28.1% 100% 16.0% 5.6% 7.5% 14.0% 0.5% 26.1% 19.6% 0.0% 17.15 4.1% 17.4% 0.9% 43.1% 14.2% 26.1% 0.1% 17.6% 3.6% 3.8% 25.5% 4.0% 2.3% 5.9% 2.0% 5.0% 11.9% 8.8% 2.0% 21.4% 29.1% 45.1% 36.7% 22.2% 57.3% 43.8% 32.9% 12.2% 18.9% 32.2% 26.4% 6.5% 62.0% 38.0% 100% 12.1% 5.9% 63.1% 36.9% 100% 0.0% 6.0% 42.7% 57.3% 100% 16.9% 12.5% 51.6% 48.4% 100% 20.0% 4.2% 81.5% 18.5% 100% 10.8% 1.4% 56.0% 44.0% 100% 31.1% 26.0% 90.0% 10.0% 100% 2.2% 14.4% 85.6% 100% 6.3% 18.4% 43.6% 56.4% 100% 31.2% 20.6% 84.0% 16.0% 100% 100% 71.3% 28.7% 24.5% 4.2% 3.3% 2.1% 100% 81.2% 18.8% 14.7% 4.0% 3.9% 2.4% 100% 66.0% 34.0% 3.26% 12.3% 18.4% 20.8% 14.6% 100% 48.0% 52.0% 31.8% 20.2% 19.2% 13.5% 100% 77.4% 22.6% 5.5% 18.1% 4.4% 4.4% 3.2% 100% 87.6% 12.4% 32.0% 2.5% 2.6% 1.7% 100% 5.1% 3.4% 2.0% 100% 30.2% 69.8% 20.6% 16.7% 32.5% 40.9% 37.2% 100% 23.2% 76.8% 16.7% 13.5% 16.8% 100% 9.2% 5.5% Sources: Mergent and Yahoo! Finance Assignment 1-1: Common-Sized Financials and Select Ratios Market Value Ratios Price-Earnings (ttm) Price-to-Book (mrq) Liquidity Ratios Current Quick Cash Asset Utilization Ratios Inventory Turnover Receivables Turnover Total Asset Turnover Capital Intensity Debt Management Ratios Total Debt Debt-Equity Equity Multiplier Profitability Ratios Return on Assets Return on Equity Market Value Ratios Price-Earnings (ttm) Price-to-Book (mrq) Liquidity Ratios Current Quick Cash Asset Utilization Ratios Inventory Turnover Receivables Turnover Total Asset Turnover Capital Intensity A 15.38 2.02 B 10.59 1.81 C 38.13 9.09 D 19.28 2.93 E 67.09 22.76 F 26.40 3.41 G 30.04 0.46 H 22.73 4.98 I 17.31 1.93 J 19.62 8.62 0.78 0.22 0.05 1.60 1.60 0.17 2.38 2.32 1.06 0.78 0.61 0.17 1.39 1.07 0.68 1.09 0.52 0.32 0.76 0.67 0.61 3.91 3.70 1.07 2.14 1.90 0.15 1.24 0.70 0.12 10.53 73.17 2.40 0.42 4.58 2.84 0.35 45.82 14.3 0.95 1.06 5.38 11.5 0.55 1.80 9.57 21.0 2.29 0.44 11.57 84.51 3.28 0.30 22.84 0.83 1.20 5.72 13.50 0.47 2.08 2.12 4.92 0.42 2.38 11.32 1.45 0.69 0.62 1.63 2.63 0.63 1.71 2.71 0.43 0.74 1.74 0.52 1.07 2.07 0.81 4.42 5.42 0.56 1.27 2.27 0.90 9.02 10.02 0.14 0.17 1.17 0.44 0.77 1.77 0.84 5.26 6.26 5.03% 13.3% 6.71% 18.16% 13.79% 24.05% 7.49% 15.49% 7.34% 39.77% 5.52% 12.56% 1.66% 16.67% 17.86% 20.86% 7.06% 12.51% 7.78% 48.71% Market Price per Share/Earnings per Share (trailing twelve months) Market Value per Share/Book Value per Share (most recent quarter) Current Assets/Current Liabilities (Current Assets-Inventory)/Current Liabilities Cash/Current Liabilities Debt Management Ratios Total Debt (Total Assets - Total Equity)/Total Assets Debt-Equity Total Debt/Total Equity Equity Multiplier Profitability Ratios Return on Assets Return on Equity Total Assets/Total Equity Net Income/Total Assets Net Income/Total Equity Cost of Goods Sold/Inventory Sales/Accounts Receivable Sales/Total Assets Total Assets/Sales Source: Ross, S. et al. (2007). Corporate finance: Core principles & applications. Boston: McGraw-Hill. Assignment 1-1: Industry Determinants of Financial Structure Worksheet Consider the Common-Sized Financial Statements and Ratios in Columns A through J. Determine which of the following industries is associated with the financials in each column: Industry PC designer and manufacturer On-line retailer Warehouse club for food and general merchandise Major passenger airline International hotel chain Temporary staffing agency Supermarket grocery retailer Pharmaceutical company Telecommunications equipment designer and manufacturer Manufacturer and marketer of consumer products Column Determining Line Items Financial Policy Seminar | F Industry Determinants of Financial... Due Date: Tue, Jan 5 Points Points available: 25 Not yet graded. Assignment 1-2: Industry Determinants of Financial Structure Purpose The purpose of this assignment is to relate financial ratios to specific industries and firm's positions, product and asset mixes, and financial policies within those industries. Action Items 1. Review the balance sheet, income statement, and financial ratios data for the 10 companies A through J in Common-Sized Financials and Select Ratios. 2. Complete the attached worksheet which requires you to match recent company financial data presented in each column in the Common-Sized Financials document to companies in the following industries: 1. PC designer and manufacturer 2. Online retailer 3. Warehouse club for food and general merchandise 4. Major passenger airline 5. International hotel chain 6. Temporary staffing agency 7. Supermarket grocery retailer 8. Pharmaceutical company 9. Telecommunications equipment designer and manufacturer 10. Manufacturer and marketer of consumer products 3. F or each choice, identify 2 - 3 specific financial statement numbers and/or ratios that lead you to identify any one column's numbers with one of the industries above. 4. Bring 2 copies of your completed exercises to class. One copy will be submitted to your professor at the beginning of class. One copy will be used for an in-class activity. Submission Instructions Click the Submit button to upload your completed assignment prior to coming to class this week. Time Estimation Estimated time for completion: 3.5 hour(s) Attachment: Assignment1_1_FinancialStatementsRatioSheet_Draft1.docx;FINA495_Assignment1_1_Worksheet.docx