Powerline Network Corporation (PNC) was founded in southern California in 1993, but since it now has customers all across the globe, it has worldwide operations. Its founder had developed a computer chip that permitted digital signals to be transmitted over electric power lines, thus converting a buildings interior wiring system into a computer network. The founder needed funds to commercialize the chip, so he set up a corporation, raised some funds from friends and eventually a venture capital firm, then from the public in 1997. PNCs primary competition is wi-fi, which permits computers and other devices to be untethered.[1] Wi-fi is better for laptop computers and other mobile devices. However, the powerline system has fewer security problems, operates over longer distances, has faster transmission speeds, and has fewer interference problems.

PNC struggled in its early years. Its technology worked, but problems were encountered in manufacturing reliable chips. That led to higher costs and thus higher prices than wi-fi. However, in 2002 a Taiwanese contract chipmaker solved the manufacturing problems and brought PNCs costs down to a competitive level. At that point, equipment manufacturers began using PNCs chip to connect desktop computers, printers, TVs, stereo systems, and other devices, and sales and profits began to climb. However, the chip is not a one-size-fits-all productdifferent devices need somewhat different chips, so PNCs engineers must work with equipment manufacturers to design the optimal chip for different products. This customizing requires the company to spend continually on product development. Moreover, the rapid pace of technology forces PNC to maintain an ongoing research and development program to increase transmission speed and reliability. Because of these factors, the recent growth in revenues, profits, and free cash flow is expected to slow to a more sustainable level in coming years. Naturally, management wants to maintain growth at a high level, but it recognizes that the recent growth rate simply cannot be sustained. Pick any four financial ratios/data of your choice from the company in 2004 (see Table 4 on the last page of the case, page 4). In a few sentences, explain how the financial ratios/data of your choice may help financial managers make optimal financial decisions.

Your report should be typed doublespace. Please be brief and to the point, do not explain how the financial ratios/data are calculated. We are just interested in the applications of the financial ratios/data of your choice.