Question 5 O pts Computers Companies I and I sell computers and related equipment. One company sells high- performance computing systems (supercomputers") to government agencies, universities, and commercial businesses. It has experienced considerable growth due to an increasing customer base. The company is financially conservative. The other company sells personal computers as well as handheld devices and software. The firm has been able to differentiate itself by using its own operating system for its computers and by creating new and innovative designs for all of its products. These products carry premium prices domestically and globally. The company follows a vertical integration strategy starting with owning chip manufacturers and ending with owning its own retail stores. Hints: - Which company might have higher receivables? (i.e.: selling something expensive, and then having to wait until they receive payment). O Super computers is 1, Personal computers is O Super computers is J, Personal computers is Bees ty tel:(12)%2045%200%200%200 8 7 15 9 5 7 4 0 9 A 5 3 2 3 14 14 " 0 3 2 5 19 62 4 0 25 8 7 6 46 19 0 0 3 33 100 30 10 16 0 56 33 0 7 3 25 4 39 49 7 0 4 4 15 53 0 9 23 100 2 18 0 3 23 17 0 39 21 100 Computers I 14 41 10 18 1 16 5 9 31 84 8 4 * 56 0 3 2 2 2 9 100 100 35 64 07 0 Newspapers K L 25 35 9 14 0 2 2 4 36 56 25 23 4 13 0 5 19 21 2 100 100 Airlines M N 6 10 4 2 1 1 5 4 17 16 " 10 42 75 74 0 1 28 1 13 8 100 100 Pharmaceutic O 1 13 5 11 3 10 2 2 11 35 * 3 23 0 10 u " 85 26 1 6 100 100 70 2 100 1 1 100 8 12 100 4 100 6 7 100 7 12 4 Current Liabilities-Total ASSETS (%) Cash & ST Investments Receivables Inventory Current Assets Other Current AssetsTotal Net Property, Plant, & Equipment Long-Term Marketable Securities Goodwill & Intangibles Assets Other Assets-Total ASS LIABILITIES & EQUITY (%) Accounts Payable Debt in Current Liabilities Current Liabilities Other Current Long-Term Debt Deferred Taxes LiabilitiesOther LiabilitiesTotal Stockholders' Equity Total Liabilities & Equity INCOME/EXPENSES (%) Revenue Cost of Goods Sold Gross Profit SG&A Expense R & D Exp. Depreciation & Amort. Other Operating Expense Earnings before Interest and Taxes Net Interest Expense Other Pretax Income Income Tax Expense Minority Int. in Earnings Net Income MARKET DATA Beta Beta Price/Earnings Price to Book Dividend Payout (%) LIQUIDITY Current Ratio 9 > 4 4 7 8 21 21 32 JA 9 4 4 66 66 34 100 0 11 17 1 0 9 0 3 29 71 100 5 7 7 19 17 50 3 12 83 17 1- 100 5 1 8 13 4 4 0 7 24 76 100 31 J 5 15 52 wa 13 2 14 80 20 100 17 0 20 38 wo 36 JO 0 U 15 89 11 100 2 2 4 4 + 8 15 15 14 1 1 1 18 47 53 100 10 5 38 53 We 63 0 U 43 159 (59) 100 14 28 20 18 o 8 4 4 59 41 100 4 4 0 20 24 0 0 0 5 29 71 100 4 8 12 23 10 10 19 0 U 32 66 34 100 6. 6 0 12 18 o 0 o 0 28 46 54 100 5 3 24 33 13 0 0 34 80 20 100 1 1 2 8 11 1 62 02 12 3 88 2 5. 3 19 26 20 16 16 14 6 63 37 100 4 0 19 23 22 0 13 59 41 41 100 12 100 100 (39) ( 61 (32) 0 100 ( (48) 52 ( (36) 0 100 (26) 74 (23) 0 100 (60) 40 (6) 100 100 (101) (70) (1) 30 0 100 (60) 40 0 0 5 0 3 32 100 100 100 (81) (74) (67) 19 26 33 (1) (7) (19) 00 (4) (12) 0 0 0 0 0 (0) (0) 18 14 2 (6) 0 (0) (4) (4) 0 (0) 8 15 1 0 (1) (3) 0 0 2 15 1 100 100 (63) (63) 36 37 (28) (12) 0 0 0 (13) 0 0 0 8 13 (1) 0 7 7 8 (3) (3) 0 0 0 47 0 0 30 1 0 0 16 0 (0) 16 (6) 0 10 100 (69) 31 (12) (13) 0 0 6 6 0 0 0 6 (2) 0 4 100 (39) 61 45 0 4 0 12 (2) (4) 6 (2) 0 4 4 0 (5) 0 0 (5) (12) 19 (2) 14 0 17 1 29 100 100 (23) (24) 77 76 (26) (33) (24) 0 0 (23) 0 0 25 19 (15) (0) (12) (1) 14 (1) (2) (0) 0 (3) 12 (5) (5) 16 (1) 3 18 (6) 0 11 2 44 (14) 0 30 31 (8) 0 23 23 1 0 (4) 19 0 11 0.95 24.2 4.2 88.2 0.95 34.0 3.9 0.0 1.15 1.50 1.05 27.2 9.7 nmf 1.8 1.2 25.5 91.5 0.0 0.0 1.00 19.2 6.4 197.5 1.15 59.8 0.3 0.0 1.15 24.0 nmf 29.5 0.95 12.8 5.0 21.8 1.20 22.0 2.8 0.0 0.95 nmf 0.8 (39.4) 1.15 34.9 2.7 41.8 1.20 10.0 3.9 7.9 1.10 10,9 2.4 0.0 0.75 22.9 6.1 88.7 1.15 18.3 5.5 0.0 0.64 0.41 2.01 1.35 0.99 3.48 1.08 0.63 2.49 0.77 1.04 1.02 0.30 0.72 0.43 0.37 1.11 0.90 3.50 2.45 3.17 2.82 1.53 1.45 0.52 0.31 0.60 0.44 1.53 1.03 1.04 0.62 Quick Ratio 8.5 3.9 5.9 13.0 2.2 17.6 5.8 0.6 4.6 9.3 2.5 25.3 2.4 7.7 17.8 5.5 4.9 11.7 4.1 109.7 nm 8.8 13.1 0.6 14.1 62.8 13.6 10.8 5.3 61.2 8.3 4.8 nmf 7.1 2.4 37.0 16.5 1.9 85.4 43.3 1.0 2.3 4.3 1.6 5.9 2.5 22.0 7.6 58.9 ASSET MANAGEMENT Inventory Turnover Receivables Turnover Fixed Assets Turnover DEBT MANAGEMENT Total Debt/Total Assets (%) LT Debt/Sharcholders' Equity (%) Interest Coverage DUPONT ANALYSIS Net Profit Margin %) Asset Turnover Return on Equity (%) nmf = not a meaningful figure 66.0 95.2 6.5 28.5 0.1 nmf 83.0 24.2 79.5 88.7 47.4 159.0 292.5 5.2 106.0 320.9 26.2 nmf 1.9 74.1 4.9 10.2 4.8 8.1 44.8 97.2 29.1 0.0 nmf 45.7 0.0 nmf 65.7 29.3 4.2 79.6 62.4 13.6 62.9 43.5 10.0 59.0 87.7 54.6 501.9 23.2 1.7 10.6 19.0 0.3 19.7 10.3 1.5 21.9 2.0 15.3 0.6 0.4 0.5 1.8 11.2 10.4 4.9 4.2 1.7 36.2 4.9 0.3 2.9 30.1 2.4 nmf 22.8 0.9 46.2 3.8 1.1 5.8 (6.6) 1.0 4.0 0.6 8.1 11.1 0.8 46.0 0.8 23.6 12.1 0.6 16.1 (2.8) 0.3 (5.0) (14.8) Question 5 O pts Computers Companies I and I sell computers and related equipment. One company sells high- performance computing systems (supercomputers") to government agencies, universities, and commercial businesses. It has experienced considerable growth due to an increasing customer base. The company is financially conservative. The other company sells personal computers as well as handheld devices and software. The firm has been able to differentiate itself by using its own operating system for its computers and by creating new and innovative designs for all of its products. These products carry premium prices domestically and globally. The company follows a vertical integration strategy starting with owning chip manufacturers and ending with owning its own retail stores. Hints: - Which company might have higher receivables? (i.e.: selling something expensive, and then having to wait until they receive payment). O Super computers is 1, Personal computers is O Super computers is J, Personal computers is Bees ty tel:(12)%2045%200%200%200 8 7 15 9 5 7 4 0 9 A 5 3 2 3 14 14 " 0 3 2 5 19 62 4 0 25 8 7 6 46 19 0 0 3 33 100 30 10 16 0 56 33 0 7 3 25 4 39 49 7 0 4 4 15 53 0 9 23 100 2 18 0 3 23 17 0 39 21 100 Computers I 14 41 10 18 1 16 5 9 31 84 8 4 * 56 0 3 2 2 2 9 100 100 35 64 07 0 Newspapers K L 25 35 9 14 0 2 2 4 36 56 25 23 4 13 0 5 19 21 2 100 100 Airlines M N 6 10 4 2 1 1 5 4 17 16 " 10 42 75 74 0 1 28 1 13 8 100 100 Pharmaceutic O 1 13 5 11 3 10 2 2 11 35 * 3 23 0 10 u " 85 26 1 6 100 100 70 2 100 1 1 100 8 12 100 4 100 6 7 100 7 12 4 Current Liabilities-Total ASSETS (%) Cash & ST Investments Receivables Inventory Current Assets Other Current AssetsTotal Net Property, Plant, & Equipment Long-Term Marketable Securities Goodwill & Intangibles Assets Other Assets-Total ASS LIABILITIES & EQUITY (%) Accounts Payable Debt in Current Liabilities Current Liabilities Other Current Long-Term Debt Deferred Taxes LiabilitiesOther LiabilitiesTotal Stockholders' Equity Total Liabilities & Equity INCOME/EXPENSES (%) Revenue Cost of Goods Sold Gross Profit SG&A Expense R & D Exp. Depreciation & Amort. Other Operating Expense Earnings before Interest and Taxes Net Interest Expense Other Pretax Income Income Tax Expense Minority Int. in Earnings Net Income MARKET DATA Beta Beta Price/Earnings Price to Book Dividend Payout (%) LIQUIDITY Current Ratio 9 > 4 4 7 8 21 21 32 JA 9 4 4 66 66 34 100 0 11 17 1 0 9 0 3 29 71 100 5 7 7 19 17 50 3 12 83 17 1- 100 5 1 8 13 4 4 0 7 24 76 100 31 J 5 15 52 wa 13 2 14 80 20 100 17 0 20 38 wo 36 JO 0 U 15 89 11 100 2 2 4 4 + 8 15 15 14 1 1 1 18 47 53 100 10 5 38 53 We 63 0 U 43 159 (59) 100 14 28 20 18 o 8 4 4 59 41 100 4 4 0 20 24 0 0 0 5 29 71 100 4 8 12 23 10 10 19 0 U 32 66 34 100 6. 6 0 12 18 o 0 o 0 28 46 54 100 5 3 24 33 13 0 0 34 80 20 100 1 1 2 8 11 1 62 02 12 3 88 2 5. 3 19 26 20 16 16 14 6 63 37 100 4 0 19 23 22 0 13 59 41 41 100 12 100 100 (39) ( 61 (32) 0 100 ( (48) 52 ( (36) 0 100 (26) 74 (23) 0 100 (60) 40 (6) 100 100 (101) (70) (1) 30 0 100 (60) 40 0 0 5 0 3 32 100 100 100 (81) (74) (67) 19 26 33 (1) (7) (19) 00 (4) (12) 0 0 0 0 0 (0) (0) 18 14 2 (6) 0 (0) (4) (4) 0 (0) 8 15 1 0 (1) (3) 0 0 2 15 1 100 100 (63) (63) 36 37 (28) (12) 0 0 0 (13) 0 0 0 8 13 (1) 0 7 7 8 (3) (3) 0 0 0 47 0 0 30 1 0 0 16 0 (0) 16 (6) 0 10 100 (69) 31 (12) (13) 0 0 6 6 0 0 0 6 (2) 0 4 100 (39) 61 45 0 4 0 12 (2) (4) 6 (2) 0 4 4 0 (5) 0 0 (5) (12) 19 (2) 14 0 17 1 29 100 100 (23) (24) 77 76 (26) (33) (24) 0 0 (23) 0 0 25 19 (15) (0) (12) (1) 14 (1) (2) (0) 0 (3) 12 (5) (5) 16 (1) 3 18 (6) 0 11 2 44 (14) 0 30 31 (8) 0 23 23 1 0 (4) 19 0 11 0.95 24.2 4.2 88.2 0.95 34.0 3.9 0.0 1.15 1.50 1.05 27.2 9.7 nmf 1.8 1.2 25.5 91.5 0.0 0.0 1.00 19.2 6.4 197.5 1.15 59.8 0.3 0.0 1.15 24.0 nmf 29.5 0.95 12.8 5.0 21.8 1.20 22.0 2.8 0.0 0.95 nmf 0.8 (39.4) 1.15 34.9 2.7 41.8 1.20 10.0 3.9 7.9 1.10 10,9 2.4 0.0 0.75 22.9 6.1 88.7 1.15 18.3 5.5 0.0 0.64 0.41 2.01 1.35 0.99 3.48 1.08 0.63 2.49 0.77 1.04 1.02 0.30 0.72 0.43 0.37 1.11 0.90 3.50 2.45 3.17 2.82 1.53 1.45 0.52 0.31 0.60 0.44 1.53 1.03 1.04 0.62 Quick Ratio 8.5 3.9 5.9 13.0 2.2 17.6 5.8 0.6 4.6 9.3 2.5 25.3 2.4 7.7 17.8 5.5 4.9 11.7 4.1 109.7 nm 8.8 13.1 0.6 14.1 62.8 13.6 10.8 5.3 61.2 8.3 4.8 nmf 7.1 2.4 37.0 16.5 1.9 85.4 43.3 1.0 2.3 4.3 1.6 5.9 2.5 22.0 7.6 58.9 ASSET MANAGEMENT Inventory Turnover Receivables Turnover Fixed Assets Turnover DEBT MANAGEMENT Total Debt/Total Assets (%) LT Debt/Sharcholders' Equity (%) Interest Coverage DUPONT ANALYSIS Net Profit Margin %) Asset Turnover Return on Equity (%) nmf = not a meaningful figure 66.0 95.2 6.5 28.5 0.1 nmf 83.0 24.2 79.5 88.7 47.4 159.0 292.5 5.2 106.0 320.9 26.2 nmf 1.9 74.1 4.9 10.2 4.8 8.1 44.8 97.2 29.1 0.0 nmf 45.7 0.0 nmf 65.7 29.3 4.2 79.6 62.4 13.6 62.9 43.5 10.0 59.0 87.7 54.6 501.9 23.2 1.7 10.6 19.0 0.3 19.7 10.3 1.5 21.9 2.0 15.3 0.6 0.4 0.5 1.8 11.2 10.4 4.9 4.2 1.7 36.2 4.9 0.3 2.9 30.1 2.4 nmf 22.8 0.9 46.2 3.8 1.1 5.8 (6.6) 1.0 4.0 0.6 8.1 11.1 0.8 46.0 0.8 23.6 12.1 0.6 16.1 (2.8) 0.3 (5.0) (14.8)