match the 14 firms operating in the 14 industries named below with the 14 sets of financial data presented in Exhibit 1. Use any approach you find helpful. And please explain how you got to your answer.
Exhibit 2 Definitions of Financial Ratios Financial Ratio Other Names for the Ratio Calculation and Notes Asset Turnover = Total Sales / Total Assets Current Ratio = Current Assets / Current Liabilities Days of Inventory Days Sales in Inventory (DSI) = Inventory / (Cost of Goods Sold / 365) Days of Payables Days Payables Outstanding (DPO) = Accounts Payable/ (Cost of Goods Sold/365) Note #1: Accounts payable is the same thing as trade and other payables. Note #2: Sometimes uses Purchases instead of COGS, if available Days of Receivables Days Sales Outstanding (DSO) Collection Period = Accounts Receivable/ (Sales/365) Note #1: Accounts receivable is the same thing as trade and other receivables. Debt-to-Total Capitalization = Total Debt / (Total Debt + Total Equity) Financial Leverage = Assets / Equity Gross Margin = (Revenue - Cost of Goods Sold) / Total Revenue or: = Gross Profit / Revenue Interest Coverage = EBIT / Interest Expense EBIT = Earnings Before Interest & Taxes Inventory Turnover = Cost of Goods Sold / Inventory Return on Assets (ROA) = Net Income / Total Assets Return on Equity (ROE) = Net Income / Total Equity Note #1: Equity is measured at the end of year (EOY). It can also be measured at the beginning of the year (BOY), or average over the year. Note #2: Equity is also known as Shareholders' Equity or Total Net Worth. Return on Sales (ROS) Profit Margin = Net Income / Total Sales Note #1: Total Sales is the same as Total Revenue Note #2: This ratio sometimes uses Net Sales instead of Total Sales. The "net" figure excludes retums, discounts, and a lowances. Try to match the 14 firms operating in the 14 industries named below with the 14 sets of financial data presented in Exhibit 1. Use any approach you find helpful. 1. Aircraft manufacturer 8. IT hardware and storage provider 2. Airline 9. Online retailer 10. Parcel delivery service 3. Bookstore chain 11. Pharmaceutical company 12. Retail grocery chain 4. Commercial bank 5. Computer software developer 6. Department store chain 7. Electric and gas utility 13. Software as a service provider for customer relationship management 14. Social networking service Exhibit 1 Balance Sheet Percentages and Selected Financial Data for Unidentified Industries Line A B C D E F G H I J K L M w to to down Iz 100 Balance Sheet Percentages Cash and Marketable Securities Accounts Receivable Inventories Other Current Assets Property, Plant, and Equipment Other Assets Total Assetsa Notes Payable Accounts Payable Accrued Items Other Current Liabilities Long-term Debt Other Liabilities Total Liabilities Retained Earnings + Accumulated Loss Treasury Stock Other Equity Accounts Total Equity Total Liabilities and Equitya 50 alal on how 23 37 100 28 100 28 32 100 -79 35 12 100 100 24 100 -47 13 350 100 100 1188 100 100 19 100 19. 100 100 100 1.4 1.4 1.1 11 1.1 0.6 2.9 2.7 12.9 12.6 N/A 0.9 0.8 0.7 N/A 0.8 0.2 1.5 1.2 0.4 1.5 41 0.12 14.6 NA 47 0.32 0.9 0.8 N/A 136 0.08 57 52 16 0.09 0.24 0.42 88 0.29 82 0.43 41 Selected Financial Data 20. Current Assets/Current Liabilities 21. Cash, MS, AR/Current Liabilities 22. Inventory Turnover (X) Receivables Collection Period (days) Total Debt/Total Assets Payables Period (days) Revenue/Total Assets Net Profit/Revenue Net Profit/Total Assets Total Assets/Equity Net Profit/Equity EBIT/Interest Expense EBITDA/Revenue 0.8 7.7 22 0.09 105 1.63 2% 3% 4.3 10 4678 0.82 N/A 0.05 29% 1.25 1.1 0.4 4.9 3 0.34 52 1.91 3% 5% 8.3 45% 6.8 10% 0.8 0.6 21.9 52 0.42 114 0.64 -5% -3% 8.0 -25% -1.4 7% 3.30 2% 7% 33% 0.25 151 0.31 23% 7% 2.4 17% 9.7 35% 9 60 0.30 92 0.29 11% 3% 3.6 12% 2.8 24% % 14% 1% 9 0.00 25 0.48 39% 19% 1.1 21% N/A 57% % 2.09 -3% -7% 4.2 -30% 2.2 3% 9% 2.7 24% 5% 3.1 9.3 0.74 13% 10% 2.9 28% 12.2 21% 12% 0.50 1% 1% 2.2 1% 2.7 10% 13% 224.1 1990% 28.6 13% 5.4 28% 3.5 4% 44% 12.8 41% 8.7 8.6 9% 12% 3.5 36% Exhibit 2 Definitions of Financial Ratios Financial Ratio Other Names for the Ratio Calculation and Notes Asset Turnover = Total Sales / Total Assets Current Ratio = Current Assets / Current Liabilities Days of Inventory Days Sales in Inventory (DSI) = Inventory / (Cost of Goods Sold / 365) Days of Payables Days Payables Outstanding (DPO) = Accounts Payable/ (Cost of Goods Sold/365) Note #1: Accounts payable is the same thing as trade and other payables. Note #2: Sometimes uses Purchases instead of COGS, if available Days of Receivables Days Sales Outstanding (DSO) Collection Period = Accounts Receivable/ (Sales/365) Note #1: Accounts receivable is the same thing as trade and other receivables. Debt-to-Total Capitalization = Total Debt / (Total Debt + Total Equity) Financial Leverage = Assets / Equity Gross Margin = (Revenue - Cost of Goods Sold) / Total Revenue or: = Gross Profit / Revenue Interest Coverage = EBIT / Interest Expense EBIT = Earnings Before Interest & Taxes Inventory Turnover = Cost of Goods Sold / Inventory Return on Assets (ROA) = Net Income / Total Assets Return on Equity (ROE) = Net Income / Total Equity Note #1: Equity is measured at the end of year (EOY). It can also be measured at the beginning of the year (BOY), or average over the year. Note #2: Equity is also known as Shareholders' Equity or Total Net Worth. Return on Sales (ROS) Profit Margin = Net Income / Total Sales Note #1: Total Sales is the same as Total Revenue Note #2: This ratio sometimes uses Net Sales instead of Total Sales. The "net" figure excludes retums, discounts, and a lowances. Try to match the 14 firms operating in the 14 industries named below with the 14 sets of financial data presented in Exhibit 1. Use any approach you find helpful. 1. Aircraft manufacturer 8. IT hardware and storage provider 2. Airline 9. Online retailer 10. Parcel delivery service 3. Bookstore chain 11. Pharmaceutical company 12. Retail grocery chain 4. Commercial bank 5. Computer software developer 6. Department store chain 7. Electric and gas utility 13. Software as a service provider for customer relationship management 14. Social networking service Exhibit 1 Balance Sheet Percentages and Selected Financial Data for Unidentified Industries Line A B C D E F G H I J K L M w to to down Iz 100 Balance Sheet Percentages Cash and Marketable Securities Accounts Receivable Inventories Other Current Assets Property, Plant, and Equipment Other Assets Total Assetsa Notes Payable Accounts Payable Accrued Items Other Current Liabilities Long-term Debt Other Liabilities Total Liabilities Retained Earnings + Accumulated Loss Treasury Stock Other Equity Accounts Total Equity Total Liabilities and Equitya 50 alal on how 23 37 100 28 100 28 32 100 -79 35 12 100 100 24 100 -47 13 350 100 100 1188 100 100 19 100 19. 100 100 100 1.4 1.4 1.1 11 1.1 0.6 2.9 2.7 12.9 12.6 N/A 0.9 0.8 0.7 N/A 0.8 0.2 1.5 1.2 0.4 1.5 41 0.12 14.6 NA 47 0.32 0.9 0.8 N/A 136 0.08 57 52 16 0.09 0.24 0.42 88 0.29 82 0.43 41 Selected Financial Data 20. Current Assets/Current Liabilities 21. Cash, MS, AR/Current Liabilities 22. Inventory Turnover (X) Receivables Collection Period (days) Total Debt/Total Assets Payables Period (days) Revenue/Total Assets Net Profit/Revenue Net Profit/Total Assets Total Assets/Equity Net Profit/Equity EBIT/Interest Expense EBITDA/Revenue 0.8 7.7 22 0.09 105 1.63 2% 3% 4.3 10 4678 0.82 N/A 0.05 29% 1.25 1.1 0.4 4.9 3 0.34 52 1.91 3% 5% 8.3 45% 6.8 10% 0.8 0.6 21.9 52 0.42 114 0.64 -5% -3% 8.0 -25% -1.4 7% 3.30 2% 7% 33% 0.25 151 0.31 23% 7% 2.4 17% 9.7 35% 9 60 0.30 92 0.29 11% 3% 3.6 12% 2.8 24% % 14% 1% 9 0.00 25 0.48 39% 19% 1.1 21% N/A 57% % 2.09 -3% -7% 4.2 -30% 2.2 3% 9% 2.7 24% 5% 3.1 9.3 0.74 13% 10% 2.9 28% 12.2 21% 12% 0.50 1% 1% 2.2 1% 2.7 10% 13% 224.1 1990% 28.6 13% 5.4 28% 3.5 4% 44% 12.8 41% 8.7 8.6 9% 12% 3.5 36%
