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Posted on Jul 11, 2024

Identify the IndustryAnalysis of Financial Statement Data. Please match the industry to the financial data with explanation to why. The 9 companies are drawn from

Identify the IndustryAnalysis of Financial Statement Data. Please match the industry to the financial data with explanation to why.

The 9 companies are drawn from the following 9 different industries:

Liquor producer and distributor
Discount airline
Commercial bank (items fitted into the same categories as the non-financial firms)
Computer software company
Large integrated oil and gas company
Mobile phone service operator
R&D-based pharmaceutical manufacturer
Retail grocery company
R&D-based semiconductor manufacturer

image text in transcribed

Exhibit 2. Common-Sized Income Statement (all items scaled by sales) Company 1 2 3 Sales 100.0% 100.0% 100.0% Cost of Goods Sold 42.9% 30.3% 25.2% Gross Profit 57.1% 69.7% 74.8% Selling, General, & Administrative Exp. 27.1% 37.2% 33.1% Operating Income before Depreciation 30.1% 32.5% 41.7% Depreciation, Depletion & Amortization 14.3% 1.8% 13.5% Operating Profit 15.7% 30.8% 28.1% Interest Expense 0.0% 0.0% 0.0% Non-Operating Income/Expense 1.0% 0.3% 1.1% Special Items -2.2% -0.1% -0.3% Pretax Income 11.7% 30.0% 28.2% Total Income Taxes 3.8% 9.4% 7.3% Income Before Extraordinary Items & Non-controlling Interest 7.9% 20.5% 21.0% Net Income 7.7% 20.5% 21.0% 4 5 6 7 8 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 15.6% 22.7% 77.3% 12.6% 73.6% 80.7% 84.4% 77.3% 22.7% 87.4% 26.4% 19.3% 54.8% 38.0% 11.9% 38.1% 19.1% 3.8% 29.6% 39.3% 10.7% 49.3% 7.3% 15.5% 5.5% 4.3% 4.8% 3.1% 1.8% 3.9% 24.1% 35.0% 5.9% 46.2% 5.5% 11.6% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.5% 1.0% 0.1% -13.4% 0.5% 4.9% 0.1% -3.0% -0.8% -1.0% 0.0% 0.5% 23.8% 32.4% 4.3% 31.8% 5.4% 16.8% 5.1% 6.8% 1.7% 10.1% 1.7% 6.9% 18.8% 25.5% 2.6% 21.7% 3.7% 9.9% 18.8% 25.5% 2.6% 20.2% 3.5% 9.5% Exhibit 3. Common-Sized Balance Sheet (all items scaled by total assets) 3.2% ASSETS Cash & Short-Term Investments Net Receivables Inventories Prepaid Expenses Other Current Assets Total Current Assets Gross Plant, Property & Equipment Accumulated Depreciation Net Plant, Property & Equipment Investments at Equity Other Investments Intangibles Deferred Charges Other Assets TOTAL ASSETS 1 2 1.4% 8.7% 4.8% 14.2% 0.4% 21.6% 0.4% 3.7% 1.4% 3.0% 8.4% 51.2% 98.2% 25.7% -58.3% -13.5% 40.0% 12.2% 1.5% #VALUE! #VALUE! #VALUE! 47.6% 34.7% 0.0% 0.0% 2.6% 1.9% 100.0% 100.0% 3 4 5 6 7 8 9 21.4% 17.4% 51.9% 16.6% 10.4% 3.6% 2.8% 4.7% 11.8% 12.2% 1.9% 55.1% 10.6% 5.3% 7.6% 1.3% 2.4% 3.0% 21.5% 4.5% 0.0% #VALUE! 0.0% #VALUE! 0.0% #VALUE! 0.0% 4.8% 2.3% 3.8% 2.5% #VALUE! 1.0% 1.6% 36.1% 39.1% 69.2% 23.3% 68.5% 29.3% 19.5% 79.8% 43.7% 15.9% 104.8% #VALUE! 85.0% 122.3% -46.3% -21.0% -8.8% -36.5% #VALUE! -27.3% -54.6% 33.5% 22.7% 7.1% 68.3% 0.8% 57.7% 67.7% 1.5% #VALUE! #VALUE! 0.0% 0.7% #VALUE! 8.4% 7.8% 17.3% 8.0% 0.3% 22.2% 0.0% 2.0% 19.2% 13.8% 14.0% 6.0% 3.3% 10.1% #VALUE! 0.0% 0.0% 0.0% 0.0% #VALUE! #VALUE! 0.0% 1.9% 7.0% 1.6% 2.1% #VALUE! 2.9% 2.4% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 22.1% LIABILITIES Accounts Payable Notes Payable & Other ST Borrowings Current Portion of LT Debt Total Current Debt Income Taxes Payable Accrued Expenses Other Current Liabilities Total Other Current Liabilities Total Current Liabilities Long Term Debt Deferred Taxes & Investment Tax Credit Other Liabilities TOTAL LIABILITIES Redeemable Non-controlling Interest EQUITY Preferred Stock - Redeemable Preferred Stock - Nonredeemable Total Preferred Stock Common Stock Capital Surplus Retained Earnings Less: Treasury Stock Common Equity Shareholders Equity-Parent Nonredeemable Non-controlling Interest STOCKHOLDERS EQUITY TOTAL TOTAL LIABILITIES & EQUITY 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 3.9% 3.5% 3.7% 3.3% 3.7% 5.3% 70.4% 18.7% 11.6% 0.0% 0.1% 0.3% 0.0% 0.4% 0.0% 3.8% 3.1% 2.1% 1.5% 0.0% 0.0% 2.5% 1.0% 2.8% 1.1% 2.1% 0.5% 1.5% 0.2% 0.3% 2.5% 1.4% 2.8% 4.9% 5.1% 2.7% 0.5% 0.8% 0.0% 0.6% 0.5% 0.5% #VALUE! 0.7% 3.0% 3.5% 8.2% 9.2% #VALUE! 3.0% 5.4% #VALUE! 8.9% #VALUE! 2.5% 0.1% 2.4% 19.0% 18.0% 12.5% #VALUE! 0.4% 3.9% 6.0% 8.4% 11.6% 19.0% 20.9% 18.0% #VALUE! 9.3% 3.9% 11.9% 12.8% 15.6% 25.4% 26.6% 26.5% 75.3% 33.8% 21.1% 24.0% 13.3% 14.7% 9.9% 14.7% 8.4% 22.2% 2.4% 11.0% 4.0% 4.2% #VALUE! 1.4% 15.0% 0.4% 2.3% 11.3% 17.7% 9.8% 4.2% 15.5% 8.0% 6.0% 5.3% 1.6% 14.5% 64.6% 48.7% 37.2% 55.6% 45.9% 62.1% 88.9% 59.9% 49.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.9% 0.0% 0.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! 0.9% #VALUE! #VALUE! 2.4% 0.8% 0.0% 2.1% 0.0% 4.3% 0.6% 0.2% 2.9% 33.3% 1.8% 23.4% 14.4% 6.5% 4.1% 1.6% 0.0% 11.6% 69.9% 39.3% 37.0% 7.0% 30.7% 5.7% 35.5% 103.9% -12.1% -21.2% #VALUE! -9.1% #VALUE! -3.8% -0.4% #VALUE! -58.0% 35.2% 51.3% 62.8% 44.4% 54.1% 37.9% 10.1% 37.2% 48.8% 35.2% 51.3% 62.8% 44.4% 54.1% 37.9% 11.0% 37.2% 48.8% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 2.5% 1.8% 35.4% 51.3% 62.8% 44.4% 54.1% 37.9% 11.1% 39.7% 50.7% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 0.0% 47.0% Exhibit 4. Selected Financial Ratios (three-year average of values for 2011-2013) Company 1 2 3 4 5 6 7 8 9 LIQUIDITY RATIOS Cash & Market Sec to Total Assets Acid Test Ratio Current Ratio 0.01 0.52 0.71 0.09 1.80 4.02 0.21 1.67 2.32 0.17 1.15 1.54 0.52 2.41 2.61 0.17 0.70 0.88 0.10 0.87 0.91 0.04 0.20 0.87 0.03 0.63 0.92 ASSET MANAGEMENT Day's Receivable Day's Inventory Asset Turnover 37.35 67.77 26.01 63.34 7.52 341.92 117.78 264.40 0.47 0.77 0.65 0.68 80.88 37.57 0.55 7.57 3,208.07 12.50 1,342.81 0.90 0.06 5.10 46.27 2.31 31.30 16.66 1.23 FINANCIAL LEVERAGE Long-term Debt to Total Assets Long-term Debt to Stockholders' Equity Coverage Ratio 0.26 0.22 0.14 0.17 0.11 0.17 0.13 0.27 0.05 0.04 0.00 0.01 0.06 0.03 0.07 0.44 0.13 0.05 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! PROFITABILITY Gross Margin Ratio Return on Sales Return on Assets Return on Equity 0.57 0.08 0.04 0.11 0.70 0.21 0.16 0.31 0.75 0.21 0.14 0.22 0.84 0.19 0.13 0.29 0.77 0.26 0.14 0.26 0.23 0.03 0.02 0.06 0.87 0.20 0.01 0.11 0.26 0.04 0.08 0.20 0.19 0.09 0.12 0.23 = 0.22 0.29 0.20 DUPONT ANALYSIS Return on Equity Return on Sales * Asset Turnover * Leverage 0.11 0.08 0.47 2.84 0.31 0.21 0.77 1.98 0.21 0.65 1.59 0.19 0.68 2.27 0.26 0.26 0.55 1.85 0.06 0.03 0.90 2.64 0.11 0.20 0.06 9.05 0.04 2.31 2.52 0.23 0.09 1.23 1.98 Exhibit 2. Common-Sized Income Statement (all items scaled by sales) Company 1 2 3 Sales 100.0% 100.0% 100.0% Cost of Goods Sold 42.9% 30.3% 25.2% Gross Profit 57.1% 69.7% 74.8% Selling, General, & Administrative Exp. 27.1% 37.2% 33.1% Operating Income before Depreciation 30.1% 32.5% 41.7% Depreciation, Depletion & Amortization 14.3% 1.8% 13.5% Operating Profit 15.7% 30.8% 28.1% Interest Expense 0.0% 0.0% 0.0% Non-Operating Income/Expense 1.0% 0.3% 1.1% Special Items -2.2% -0.1% -0.3% Pretax Income 11.7% 30.0% 28.2% Total Income Taxes 3.8% 9.4% 7.3% Income Before Extraordinary Items & Non-controlling Interest 7.9% 20.5% 21.0% Net Income 7.7% 20.5% 21.0% 4 5 6 7 8 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 15.6% 22.7% 77.3% 12.6% 73.6% 80.7% 84.4% 77.3% 22.7% 87.4% 26.4% 19.3% 54.8% 38.0% 11.9% 38.1% 19.1% 3.8% 29.6% 39.3% 10.7% 49.3% 7.3% 15.5% 5.5% 4.3% 4.8% 3.1% 1.8% 3.9% 24.1% 35.0% 5.9% 46.2% 5.5% 11.6% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.5% 1.0% 0.1% -13.4% 0.5% 4.9% 0.1% -3.0% -0.8% -1.0% 0.0% 0.5% 23.8% 32.4% 4.3% 31.8% 5.4% 16.8% 5.1% 6.8% 1.7% 10.1% 1.7% 6.9% 18.8% 25.5% 2.6% 21.7% 3.7% 9.9% 18.8% 25.5% 2.6% 20.2% 3.5% 9.5% Exhibit 3. Common-Sized Balance Sheet (all items scaled by total assets) 3.2% ASSETS Cash & Short-Term Investments Net Receivables Inventories Prepaid Expenses Other Current Assets Total Current Assets Gross Plant, Property & Equipment Accumulated Depreciation Net Plant, Property & Equipment Investments at Equity Other Investments Intangibles Deferred Charges Other Assets TOTAL ASSETS 1 2 1.4% 8.7% 4.8% 14.2% 0.4% 21.6% 0.4% 3.7% 1.4% 3.0% 8.4% 51.2% 98.2% 25.7% -58.3% -13.5% 40.0% 12.2% 1.5% #VALUE! #VALUE! #VALUE! 47.6% 34.7% 0.0% 0.0% 2.6% 1.9% 100.0% 100.0% 3 4 5 6 7 8 9 21.4% 17.4% 51.9% 16.6% 10.4% 3.6% 2.8% 4.7% 11.8% 12.2% 1.9% 55.1% 10.6% 5.3% 7.6% 1.3% 2.4% 3.0% 21.5% 4.5% 0.0% #VALUE! 0.0% #VALUE! 0.0% #VALUE! 0.0% 4.8% 2.3% 3.8% 2.5% #VALUE! 1.0% 1.6% 36.1% 39.1% 69.2% 23.3% 68.5% 29.3% 19.5% 79.8% 43.7% 15.9% 104.8% #VALUE! 85.0% 122.3% -46.3% -21.0% -8.8% -36.5% #VALUE! -27.3% -54.6% 33.5% 22.7% 7.1% 68.3% 0.8% 57.7% 67.7% 1.5% #VALUE! #VALUE! 0.0% 0.7% #VALUE! 8.4% 7.8% 17.3% 8.0% 0.3% 22.2% 0.0% 2.0% 19.2% 13.8% 14.0% 6.0% 3.3% 10.1% #VALUE! 0.0% 0.0% 0.0% 0.0% #VALUE! #VALUE! 0.0% 1.9% 7.0% 1.6% 2.1% #VALUE! 2.9% 2.4% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 22.1% LIABILITIES Accounts Payable Notes Payable & Other ST Borrowings Current Portion of LT Debt Total Current Debt Income Taxes Payable Accrued Expenses Other Current Liabilities Total Other Current Liabilities Total Current Liabilities Long Term Debt Deferred Taxes & Investment Tax Credit Other Liabilities TOTAL LIABILITIES Redeemable Non-controlling Interest EQUITY Preferred Stock - Redeemable Preferred Stock - Nonredeemable Total Preferred Stock Common Stock Capital Surplus Retained Earnings Less: Treasury Stock Common Equity Shareholders Equity-Parent Nonredeemable Non-controlling Interest STOCKHOLDERS EQUITY TOTAL TOTAL LIABILITIES & EQUITY 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 3.9% 3.5% 3.7% 3.3% 3.7% 5.3% 70.4% 18.7% 11.6% 0.0% 0.1% 0.3% 0.0% 0.4% 0.0% 3.8% 3.1% 2.1% 1.5% 0.0% 0.0% 2.5% 1.0% 2.8% 1.1% 2.1% 0.5% 1.5% 0.2% 0.3% 2.5% 1.4% 2.8% 4.9% 5.1% 2.7% 0.5% 0.8% 0.0% 0.6% 0.5% 0.5% #VALUE! 0.7% 3.0% 3.5% 8.2% 9.2% #VALUE! 3.0% 5.4% #VALUE! 8.9% #VALUE! 2.5% 0.1% 2.4% 19.0% 18.0% 12.5% #VALUE! 0.4% 3.9% 6.0% 8.4% 11.6% 19.0% 20.9% 18.0% #VALUE! 9.3% 3.9% 11.9% 12.8% 15.6% 25.4% 26.6% 26.5% 75.3% 33.8% 21.1% 24.0% 13.3% 14.7% 9.9% 14.7% 8.4% 22.2% 2.4% 11.0% 4.0% 4.2% #VALUE! 1.4% 15.0% 0.4% 2.3% 11.3% 17.7% 9.8% 4.2% 15.5% 8.0% 6.0% 5.3% 1.6% 14.5% 64.6% 48.7% 37.2% 55.6% 45.9% 62.1% 88.9% 59.9% 49.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.4% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.9% 0.0% 0.0% #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! #VALUE! 0.9% #VALUE! #VALUE! 2.4% 0.8% 0.0% 2.1% 0.0% 4.3% 0.6% 0.2% 2.9% 33.3% 1.8% 23.4% 14.4% 6.5% 4.1% 1.6% 0.0% 11.6% 69.9% 39.3% 37.0% 7.0% 30.7% 5.7% 35.5% 103.9% -12.1% -21.2% #VALUE! -9.1% #VALUE! -3.8% -0.4% #VALUE! -58.0% 35.2% 51.3% 62.8% 44.4% 54.1% 37.9% 10.1% 37.2% 48.8% 35.2% 51.3% 62.8% 44.4% 54.1% 37.9% 11.0% 37.2% 48.8% 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.1% 2.5% 1.8% 35.4% 51.3% 62.8% 44.4% 54.1% 37.9% 11.1% 39.7% 50.7% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 0.0% 47.0% Exhibit 4. Selected Financial Ratios (three-year average of values for 2011-2013) Company 1 2 3 4 5 6 7 8 9 LIQUIDITY RATIOS Cash & Market Sec to Total Assets Acid Test Ratio Current Ratio 0.01 0.52 0.71 0.09 1.80 4.02 0.21 1.67 2.32 0.17 1.15 1.54 0.52 2.41 2.61 0.17 0.70 0.88 0.10 0.87 0.91 0.04 0.20 0.87 0.03 0.63 0.92 ASSET MANAGEMENT Day's Receivable Day's Inventory Asset Turnover 37.35 67.77 26.01 63.34 7.52 341.92 117.78 264.40 0.47 0.77 0.65 0.68 80.88 37.57 0.55 7.57 3,208.07 12.50 1,342.81 0.90 0.06 5.10 46.27 2.31 31.30 16.66 1.23 FINANCIAL LEVERAGE Long-term Debt to Total Assets Long-term Debt to Stockholders' Equity Coverage Ratio 0.26 0.22 0.14 0.17 0.11 0.17 0.13 0.27 0.05 0.04 0.00 0.01 0.06 0.03 0.07 0.44 0.13 0.05 #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0! PROFITABILITY Gross Margin Ratio Return on Sales Return on Assets Return on Equity 0.57 0.08 0.04 0.11 0.70 0.21 0.16 0.31 0.75 0.21 0.14 0.22 0.84 0.19 0.13 0.29 0.77 0.26 0.14 0.26 0.23 0.03 0.02 0.06 0.87 0.20 0.01 0.11 0.26 0.04 0.08 0.20 0.19 0.09 0.12 0.23 = 0.22 0.29 0.20 DUPONT ANALYSIS Return on Equity Return on Sales * Asset Turnover * Leverage 0.11 0.08 0.47 2.84 0.31 0.21 0.77 1.98 0.21 0.65 1.59 0.19 0.68 2.27 0.26 0.26 0.55 1.85 0.06 0.03 0.90 2.64 0.11 0.20 0.06 9.05 0.04 2.31 2.52 0.23 0.09 1.23 1.98