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Posted on Sep 07, 2024

Try to match the 14 firms operating in the 14 industries named below with the 14 sets of financial data presented in Exhibit 1. MIHIR

Try to match the 14 firms operating in the 14 industries named below with the 14 sets of financial data presented in Exhibit 1. image text in transcribed

MIHIR A. DESAI WILLIAM E. FRUHAN, JR LEANNE FAN ADIL BHATIA The Case of the Unidentified Industries - 2018 Exhibit 1 presents the balance sheets (in percentage form) and other selected financial data for 14 firms drawn from 14 different industries. While there are clear differences in the financial structures of different firms within a single industry, the firms selected have figures that are broadly typical of those in the industry. 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. 8. 1. Aircraft manufacturer 2. Airline 3. Bookstore chain 4. Commercial bank 5. Computer software developer 6. Department store chain 7. Electric and gas utility IT hardware and storage provider 9. Online retailer 10. Parcel delivery service 11. Pharmaceutical company 12. Retail grocery chain 13. Software as a service provider for customer relationship management 14. Social networking service Why does each of the industries have the patterns of assets use revealed in Exhibit 1? The sources of financing? The profitability? The inventory turnover? The accounts receivable collection period? Exhibit 1 Balance Sheet Percentages and Selected Financial Data for Unidentified Industries A B D E F G H I J K L M N 12 5 4 6 16 0 3 54 21 31 10 14 0 35 10 1 5 1 3 64 26 52 10 1 3 11 23 1 4 55 4 15 23 15 2 25 2 13 9 2 7 4 64 4 61 0 24 1 10 49 7 0 1 16 26 15 3 0 2 59 22 11 11 48 0 14 16 4 4 18 4 57 13 22 19 0 4 9 47 49 8 100 100 100 100 100 100 100 100 100 100 Line Balance Sheet Percentages 1. Cash and Marketable Securities 2. Accounts Receivable 3. Inventories 4. Other Current Assets 5. Property, Plant, and Equipment 6. Other Assets 7. Total Assetsa 8. Notes Payable 9. Accounts Payable 10. Accrued Items 11. Other Current Liabilities 12. Long-term Debt 13. Other Liabilities 14. Total Liabilities 15. Retained Earnings + Accumulated Loss 16. Treasury Stock 17. Other Equity Accounts 18. Total Equity 19. Total Liabilities and Equitya 6 3 1 8 20 21 58 3 6 10 0 29 15 63 0 30 16 6 3 3 2 2 28 35 72 100 2 3 2 15 28 18 68 0 26 15 18 9 8 76 100 1 17 7 15 33 14 88 6 15 6 10 36 14 87 75 0 0 4 7 4 89 0 NM 3 1 0 8 12 3 1 12 9 21 19 65 100 1 13 17 30 11 28 100 100 10 16 3 10 32 11 81 5 NM 6 37 3 4 55 9 15 77 46 - 15 44 -52 50 42 5 -2 21 23 10 -1 18 28 37 -32 28 32 -12 -64 100 24 56 -79 35 12 -7 -1 21 13 11 -4 3 11 42 -2 48 88 38 -5 2 35 35 -47 13 0 44 -39 14 19 6 -2 0 46 45 37 100 100 100 100 100 100 100 100 100 100 100 100 100 100 1.4 1.4 1.2 24. Selected Financial Data 20. Current Assets/Current Liabilities 21. Cash, MS, AR/Current Liabilities 22. Inventory Turnover (X) 23. Receivables Collection Period (days) Total Debt/Total Assets 25. Payables Period (days) 26. Revenue/Total Assets 27. Net Profit/Revenue 28. Net Profit/Total Assets 29. Total Assets/Equity 30. Net Profit/Equity 31. EBIT/Interest Expense 32. EBITDA/Revenue 0.9 1.5 57 0.25 151 0.31 23% 7% 2.4 17% 9.7 35% 1.2 N/A 47 0.32 41 1.25 7% 9% 2.7 24% 8.7 12% 1.0 0.8 7.7 22 0.09 105 1.63 2% 3% 4.3 12% 8.6 9% 1.1 0.6 8.5 60 0.30 92 0.29 11% 3% 3.6 12% 2.8 24% 2.9 2.7 14.4 88 0.29 82 0.43 33% 14% 3.1 44% 12.8 41% 1.1 0.1 2.7 6 0.09 66 2.09 -3% -7% 4.2 -30% 2.2 3% 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% 1.1 0.8 N/A 4678 0.82 N/A 0.05 29% 1% 12.9 12.6 N/A 52 0.00 25 0.48 39% 19% 1.1 21% N/A 57% 0.8 0.7 0.4 N/A 1.5 16 41 0.24 0.12 13 65 0.74 1.01 13% 9% 10% 9% 2.9 224.1 28% 1990% 12.2 28.6 21% 13% 0.8 0.2 14.6 5 0.42 22 3.30 2% 5% 5.4 28% 3.5 4% 0.9 0.8 N/A 136 0.08 10 0.50 1% 1% 9.3 2.2 13% 3.5 36% 1% 2.7 10% Source: Compiled from company annual reports. Note: N/A = Not applicable; NM = Not meaningful, negligible amount Column totals may not add to 100 due to rounding MIHIR A. DESAI WILLIAM E. FRUHAN, JR LEANNE FAN ADIL BHATIA The Case of the Unidentified Industries - 2018 Exhibit 1 presents the balance sheets (in percentage form) and other selected financial data for 14 firms drawn from 14 different industries. While there are clear differences in the financial structures of different firms within a single industry, the firms selected have figures that are broadly typical of those in the industry. 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. 8. 1. Aircraft manufacturer 2. Airline 3. Bookstore chain 4. Commercial bank 5. Computer software developer 6. Department store chain 7. Electric and gas utility IT hardware and storage provider 9. Online retailer 10. Parcel delivery service 11. Pharmaceutical company 12. Retail grocery chain 13. Software as a service provider for customer relationship management 14. Social networking service Why does each of the industries have the patterns of assets use revealed in Exhibit 1? The sources of financing? The profitability? The inventory turnover? The accounts receivable collection period? Exhibit 1 Balance Sheet Percentages and Selected Financial Data for Unidentified Industries A B D E F G H I J K L M N 12 5 4 6 16 0 3 54 21 31 10 14 0 35 10 1 5 1 3 64 26 52 10 1 3 11 23 1 4 55 4 15 23 15 2 25 2 13 9 2 7 4 64 4 61 0 24 1 10 49 7 0 1 16 26 15 3 0 2 59 22 11 11 48 0 14 16 4 4 18 4 57 13 22 19 0 4 9 47 49 8 100 100 100 100 100 100 100 100 100 100 Line Balance Sheet Percentages 1. Cash and Marketable Securities 2. Accounts Receivable 3. Inventories 4. Other Current Assets 5. Property, Plant, and Equipment 6. Other Assets 7. Total Assetsa 8. Notes Payable 9. Accounts Payable 10. Accrued Items 11. Other Current Liabilities 12. Long-term Debt 13. Other Liabilities 14. Total Liabilities 15. Retained Earnings + Accumulated Loss 16. Treasury Stock 17. Other Equity Accounts 18. Total Equity 19. Total Liabilities and Equitya 6 3 1 8 20 21 58 3 6 10 0 29 15 63 0 30 16 6 3 3 2 2 28 35 72 100 2 3 2 15 28 18 68 0 26 15 18 9 8 76 100 1 17 7 15 33 14 88 6 15 6 10 36 14 87 75 0 0 4 7 4 89 0 NM 3 1 0 8 12 3 1 12 9 21 19 65 100 1 13 17 30 11 28 100 100 10 16 3 10 32 11 81 5 NM 6 37 3 4 55 9 15 77 46 - 15 44 -52 50 42 5 -2 21 23 10 -1 18 28 37 -32 28 32 -12 -64 100 24 56 -79 35 12 -7 -1 21 13 11 -4 3 11 42 -2 48 88 38 -5 2 35 35 -47 13 0 44 -39 14 19 6 -2 0 46 45 37 100 100 100 100 100 100 100 100 100 100 100 100 100 100 1.4 1.4 1.2 24. Selected Financial Data 20. Current Assets/Current Liabilities 21. Cash, MS, AR/Current Liabilities 22. Inventory Turnover (X) 23. Receivables Collection Period (days) Total Debt/Total Assets 25. Payables Period (days) 26. Revenue/Total Assets 27. Net Profit/Revenue 28. Net Profit/Total Assets 29. Total Assets/Equity 30. Net Profit/Equity 31. EBIT/Interest Expense 32. EBITDA/Revenue 0.9 1.5 57 0.25 151 0.31 23% 7% 2.4 17% 9.7 35% 1.2 N/A 47 0.32 41 1.25 7% 9% 2.7 24% 8.7 12% 1.0 0.8 7.7 22 0.09 105 1.63 2% 3% 4.3 12% 8.6 9% 1.1 0.6 8.5 60 0.30 92 0.29 11% 3% 3.6 12% 2.8 24% 2.9 2.7 14.4 88 0.29 82 0.43 33% 14% 3.1 44% 12.8 41% 1.1 0.1 2.7 6 0.09 66 2.09 -3% -7% 4.2 -30% 2.2 3% 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% 1.1 0.8 N/A 4678 0.82 N/A 0.05 29% 1% 12.9 12.6 N/A 52 0.00 25 0.48 39% 19% 1.1 21% N/A 57% 0.8 0.7 0.4 N/A 1.5 16 41 0.24 0.12 13 65 0.74 1.01 13% 9% 10% 9% 2.9 224.1 28% 1990% 12.2 28.6 21% 13% 0.8 0.2 14.6 5 0.42 22 3.30 2% 5% 5.4 28% 3.5 4% 0.9 0.8 N/A 136 0.08 10 0.50 1% 1% 9.3 2.2 13% 3.5 36% 1% 2.7 10% Source: Compiled from company annual reports. Note: N/A = Not applicable; NM = Not meaningful, negligible amount Column totals may not add to 100 due to rounding