Power

Companies M and N are in the power-generation industry. One company focuses on solar power. This includes the manufacturing and selling of power systems as well as maintenance services for those systems.

The other company owns large, mostly coal-powered electric-power-generation plants in countries around the world. Most of its revenues result from power-purchase agreements with a countrys government that buy the power generated. Some of its U.S. assets include regulated public utilities.

Retail

Companies O and P are retailers. One is a leading e-commerce company that sells a broad range of products, including media (books, music, and videos) and electronics, which together account for 92% of revenues. One-third of revenues are international and 20% of sales come from third-party sellers (i.e., sellers who transact through the companys website to sell their own products rather than those owned by the company). A growing portion of operating profit comes from the companys cloud-computing business. With its desire to focus on customer satisfaction, this company has invested considerably in improving its online technologies.

The other company is a leading retailer in apparel and fashion accessories for men, women, and children. The company sells mostly through its upscale brick-and-mortar department stores.

Looking at these Ratios: In the categories of Power and Retail, which of the 2 companies in each category is the best and why? Explain your answer and justify it with the ratio's given. Please identify the best and worst-performing industry in each of the following categories: Liquidity ratios or Short-term solvency, Financial leverage ratios or Long-term solvency, Asset management or Turnover ratios, Profitability ratios, and provide reasoning.

Correctly identify all 4 companies in section 1. Clearly and convincingly explain your decisions.

Exhibit 1 The Financial Detective, 2016 Common-Sized Financial Data and Ratios Aidines Bees Power D P N 25 15 9 9 30 10 0 4. 1 5 17 42 c 5 3 2 1 14 14 8 7 Computers E 14 41 10 18 1 10 5 9 31 84 3 10 2 2 1 1 4 16 75 1 1 1 8 100 Hospitalet H 7 2 4 18 O 3 15 23 53 17 O 9 39 21 Newsages 1 J 25 9 14 0 2 4 36 25 23 13 5 21 100 100 Pharmeuticals K L 1 13 5 11 3 10 2 11 35 3 23 10 BE 26 1 100 100 7 2 5 19 B 3 25 4 39 49 35 6 46 19 0 0 3 0 0 56 33 0 7 4 100 23 56 3 2 2 100 70 2 9 100 8 12 100 0 6 6 7 100 100 100 100 100 100 100 ASSETS (%) Cash & ST Investments Receivables Leventos Current Assets Other Current Assets-Total Net Property, Plant & Equipment Long Team Madsetable Secuatie: Goodwil & Intangibles Asset-Other Assets-Total LIABILITIES & EQUITY (%) Account Payable Debt in Cucent Liabilities Current Liabilities Other Current Liabilities-Total Long Term Debt Deferred Temes Liabilities Other Linbilities Total Stockholders' Equit Total Liabilities & Equity 7 4 4 5 5 3 2 5 19 9 4 4 12 4 2 4 0 8 12 12 0 12 1 2 8 11 11 17 8 15 4 O 19 23 22 5 15 52 5 1 8 8 13 4 4 0 33 26 16 19 50 D 10 13 0 10 5 38 5.3 63 0 43 159 (59) 100 O 20 24 0 D 5 20 71 100 0 0 9 1 12 28 18 3 4 99 41 100 0 62 12 12 3 2 21 32 9 4 6i6 34 100 0 20 38 56 0 15 59 11 100 34 6 15 14 25 46 46 13 59 88 24 29 71 100 47 53 100 12 83 17 17 100 66 34 100 37 100 34 76 12 100 20 100 100 100 100 100 100 100 100 (701 0 100 (48) 0 100 (60) 0 0 100 (63) 0 100 (26) 100 (24 100 (39) 0 0 100 (65) 100 (74 O 100 (69) D D 31 (12) 0 100 (23) 0 0 77 100 (39) 0 0 61 (52 0 0 0 100 (81) 0 0 19 19 (60) 0 0 40 (6) (3) 0 100 (101) 0 0 (1) 0 0 5 INCOME/EXPENSES (W) Revenue Cost of Goods Sold Finance Dir. Operating Exp Interest Expense - Finance Division Gross Profis SBA Espace R&D Exp Depreciation & Amnost. Other Operating Expan Exming before Interest and Tax Not Intermat Expat Other (67 0 0 33 ( (19) (12 10) 36 30 37 20 61 26 (36 (12) 45 (26) 76 (35) 24 (17) (15) 74 (25) 0 14 o D (4) 0 12 0 (5) (12) (13 0 (5) (5) 16 0 D D 0 0 o 0 10 0 D 19 (0) 14 32 D 12 (2) (5) 18 8 16 0 0 30 1 1 Z ) (5) (2 0 (0) 25 (15) (12) 0 0 D (6 14 (0) 10 1 2 0 10 31 14 15 1 18 (6) 3 (1) 10 7 (5 0 0 1 1 (1) 0 2 0 0 6) D (8 0 (14) o 0 2 D Pretax Income Income Tax Experts Earnings of Discontinues Extraed. Item & Ascunt. Chang inity Int. in Exning Net Income O 29 (6) 0 0 (4 19 0 3 0 0 (2) D D 0 0 0 D 0 0 0 0 0 D 0 0 10 (3) D 0 0 10 0 11 n 23 30 4 (7) 12 2 15 1 1.10 0.95 0.95 0.95 1.15 1.15 1.19 0.95 1.50 1.05 1.20 10.0 1.20 22.0 0.75 229 1.15 27.2 10.9 540 12.8 24.0 349 ment 9.7 ma 59.5 03 1.15 183 5.5 0.0 1.00 19.2 6.4 197.5 3.9 4.2 2.5 255 5.O 21.8 2.7 41.8 0.8 (39.4 0.0 38.2 0.0 0.D 0.0 29.5 88.7 91.5 0.0 0.0 0.64 2.01 1.11 3.50 1.02 3.17 1.53 0.99 1.08 1.04 0.52 0.31 0.60 0.44 0.45 0.37 1.53 1.45 1.04 0.67 3.45 7.40 0.41 1.35 0.90 0.92 0.77 0.30 BS. 5.9 5.5 628 109.7 . f 61.2 23 1.6 17.6 4.6 7.7 MARKET DATA Bab PrieEuning Puisto Bock Dudend Faut (%) LIQUIDITY Current Ratio Qui Ratio ASSET MANAGEMENT Inventor Tuner Reivable. Tume Fixed Assets Tuner DEBT MANAGEMENT Total Debt/Total Art LT Dobt/Shareholdes' Equity (W) Instant Cowego DUPONT ANALYSIS Net Pro Margin (9) Aurat Turner Ratamon Equity (W) 37.0 16.5 13.0 25.3 13.6 13. 1 5.9 5.8 9.3 17.8 117 43.3 1.0 5.3 22.0 8.8 0.6 5.3 AS 1.9 22 10.5 141 2.4 7.6 2.5 2.5 3.5 629 159.0 45.7 83.0 79.5 887 66.0 95.2 28.5 0.1 $8.9 44.5 29.1 0.0 59.0 54.6 43.5 65.7 29.3 4.2 26.2 0.0 5.2 61.5 5019 1.7 2925 1.9 3209 10.2 13.6 10.0 65 f 972 4.5 S. 141 11.1 10.6 19.0 10.3 4.9 30.1 121 2.0 15.3 0.6 22.8 09 3.S 1.1 (6.6) 1.0 (28) 0.3 OS 0.8 0.3 03 2.4 0.6 1.8 1.5 21.9 0.6 16.1 0.5 10.4 1.7 36.2 460 23.6 19.7 46.2 S.S 29 (14.5) (5.0) 112 mmf = nota menningful Suce Data sources: S&P Research Insight, Capital IQ, and Value Line Investment Survey. Exhibit 1 The Financial Detective, 2016 Common-Sized Financial Data and Ratios Aidines Bees Power D P N 25 15 9 9 30 10 0 4. 1 5 17 42 c 5 3 2 1 14 14 8 7 Computers E 14 41 10 18 1 10 5 9 31 84 3 10 2 2 1 1 4 16 75 1 1 1 8 100 Hospitalet H 7 2 4 18 O 3 15 23 53 17 O 9 39 21 Newsages 1 J 25 9 14 0 2 4 36 25 23 13 5 21 100 100 Pharmeuticals K L 1 13 5 11 3 10 2 11 35 3 23 10 BE 26 1 100 100 7 2 5 19 B 3 25 4 39 49 35 6 46 19 0 0 3 0 0 56 33 0 7 4 100 23 56 3 2 2 100 70 2 9 100 8 12 100 0 6 6 7 100 100 100 100 100 100 100 ASSETS (%) Cash & ST Investments Receivables Leventos Current Assets Other Current Assets-Total Net Property, Plant & Equipment Long Team Madsetable Secuatie: Goodwil & Intangibles Asset-Other Assets-Total LIABILITIES & EQUITY (%) Account Payable Debt in Cucent Liabilities Current Liabilities Other Current Liabilities-Total Long Term Debt Deferred Temes Liabilities Other Linbilities Total Stockholders' Equit Total Liabilities & Equity 7 4 4 5 5 3 2 5 19 9 4 4 12 4 2 4 0 8 12 12 0 12 1 2 8 11 11 17 8 15 4 O 19 23 22 5 15 52 5 1 8 8 13 4 4 0 33 26 16 19 50 D 10 13 0 10 5 38 5.3 63 0 43 159 (59) 100 O 20 24 0 D 5 20 71 100 0 0 9 1 12 28 18 3 4 99 41 100 0 62 12 12 3 2 21 32 9 4 6i6 34 100 0 20 38 56 0 15 59 11 100 34 6 15 14 25 46 46 13 59 88 24 29 71 100 47 53 100 12 83 17 17 100 66 34 100 37 100 34 76 12 100 20 100 100 100 100 100 100 100 100 (701 0 100 (48) 0 100 (60) 0 0 100 (63) 0 100 (26) 100 (24 100 (39) 0 0 100 (65) 100 (74 O 100 (69) D D 31 (12) 0 100 (23) 0 0 77 100 (39) 0 0 61 (52 0 0 0 100 (81) 0 0 19 19 (60) 0 0 40 (6) (3) 0 100 (101) 0 0 (1) 0 0 5 INCOME/EXPENSES (W) Revenue Cost of Goods Sold Finance Dir. Operating Exp Interest Expense - Finance Division Gross Profis SBA Espace R&D Exp Depreciation & Amnost. Other Operating Expan Exming before Interest and Tax Not Intermat Expat Other (67 0 0 33 ( (19) (12 10) 36 30 37 20 61 26 (36 (12) 45 (26) 76 (35) 24 (17) (15) 74 (25) 0 14 o D (4) 0 12 0 (5) (12) (13 0 (5) (5) 16 0 D D 0 0 o 0 10 0 D 19 (0) 14 32 D 12 (2) (5) 18 8 16 0 0 30 1 1 Z ) (5) (2 0 (0) 25 (15) (12) 0 0 D (6 14 (0) 10 1 2 0 10 31 14 15 1 18 (6) 3 (1) 10 7 (5 0 0 1 1 (1) 0 2 0 0 6) D (8 0 (14) o 0 2 D Pretax Income Income Tax Experts Earnings of Discontinues Extraed. Item & Ascunt. Chang inity Int. in Exning Net Income O 29 (6) 0 0 (4 19 0 3 0 0 (2) D D 0 0 0 D 0 0 0 0 0 D 0 0 10 (3) D 0 0 10 0 11 n 23 30 4 (7) 12 2 15 1 1.10 0.95 0.95 0.95 1.15 1.15 1.19 0.95 1.50 1.05 1.20 10.0 1.20 22.0 0.75 229 1.15 27.2 10.9 540 12.8 24.0 349 ment 9.7 ma 59.5 03 1.15 183 5.5 0.0 1.00 19.2 6.4 197.5 3.9 4.2 2.5 255 5.O 21.8 2.7 41.8 0.8 (39.4 0.0 38.2 0.0 0.D 0.0 29.5 88.7 91.5 0.0 0.0 0.64 2.01 1.11 3.50 1.02 3.17 1.53 0.99 1.08 1.04 0.52 0.31 0.60 0.44 0.45 0.37 1.53 1.45 1.04 0.67 3.45 7.40 0.41 1.35 0.90 0.92 0.77 0.30 BS. 5.9 5.5 628 109.7 . f 61.2 23 1.6 17.6 4.6 7.7 MARKET DATA Bab PrieEuning Puisto Bock Dudend Faut (%) LIQUIDITY Current Ratio Qui Ratio ASSET MANAGEMENT Inventor Tuner Reivable. Tume Fixed Assets Tuner DEBT MANAGEMENT Total Debt/Total Art LT Dobt/Shareholdes' Equity (W) Instant Cowego DUPONT ANALYSIS Net Pro Margin (9) Aurat Turner Ratamon Equity (W) 37.0 16.5 13.0 25.3 13.6 13. 1 5.9 5.8 9.3 17.8 117 43.3 1.0 5.3 22.0 8.8 0.6 5.3 AS 1.9 22 10.5 141 2.4 7.6 2.5 2.5 3.5 629 159.0 45.7 83.0 79.5 887 66.0 95.2 28.5 0.1 $8.9 44.5 29.1 0.0 59.0 54.6 43.5 65.7 29.3 4.2 26.2 0.0 5.2 61.5 5019 1.7 2925 1.9 3209 10.2 13.6 10.0 65 f 972 4.5 S. 141 11.1 10.6 19.0 10.3 4.9 30.1 121 2.0 15.3 0.6 22.8 09 3.S 1.1 (6.6) 1.0 (28) 0.3 OS 0.8 0.3 03 2.4 0.6 1.8 1.5 21.9 0.6 16.1 0.5 10.4 1.7 36.2 460 23.6 19.7 46.2 S.S 29 (14.5) (5.0) 112 mmf = nota menningful Suce Data sources: S&P Research Insight, Capital IQ, and Value Line Investment Survey