- Using numbers 7, 8 and 9 on Exhibit 6.3 match the companies to the respective number.
- Using numbers 10, 11 and 12 on Exhibit 6.3 match the companies to the respective number.
Exhibit 6-3 Common-size Financial Statements 1 2 3 4 5 6 7 8 9 10 11 12 2.15 2009 22.5% 37.99 13.4% 11.7% 40% 30.8% 17.6% 19.995 42.7% 54.19 75 48 18 D 17.8 12.5 26.0 4.2 76.8 257 8.9 0.1 09 3.7 301.5 24 2.1 1826 17.7 513 22.5 679 135 8.1 475 7.3 79.0 8.6 34.4 0.1 24.B 945 26.9 6.1 76.3 (16.6) 127) 30.7) 8.5 (46.4) 28.8 30.4 (15.6) 2.6 70.6 (25.4) 5.2 3.2 15.8 75 33.8 (386) 152 B.6 51.1 123.5 162B%235.5% 53.196 50.4% 13.9 (115) 13 17.8 100.9% 104.8 136.3% 53.6% 199.7) 149.0) 7.0 472 131 269.3% 173.6% 32.8% 763 260 810 55 71.6 109.3 269.3% 173,6% 192.196 103.5% 34.4% 14.4 136.8% 46.2% 28.2 26.4% 13.4 118.4% 303 100.4% 33.6% 124 5.2 472% 28.736 1.0 43 34 35 0.1 5.4 21.2% 73.4 398 138 8.7 2.4 78 413 62.1 129.9 162.B%2355% 40.9 103.5% 46.4 53.7 136.8% 16.5 26.9 192.1% 11.4 53.6% 132 47.296 611 1009 24.8 56.9 136.3% 100 43 Balance sheet (year-end Cash and marketable securities Receivables Inventories Property, plant, and equipment Accumulated depreciation Investments Other assets Total assets Current liabilities Long term debt Other noncurrent liabilities Shareholders' equity Total liabilities and shareholders' equities Income statement Operating revenues Other revenues Cost of goods sold lexcluding depreciation or operating expenses Depreciation and amortization Selling and administrative Interest expense Research and development Income taxes Other Total expenses Net income Cash flow from operations Free operating cash flow 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100 0% 100.0% 0796 744 100.0% 1.4% 86.5 100.0% 4.3% 738 587 75.4 74.9 983 45.1 80.9 316 33.1 11.4 7.B 9.7 $3 5.6 2.9 0.7 28 212 15.9 162 322 11.3 16.2 360 8.7 25.1 31.0 1.3 1.4 0.1 0.7 25 7.9 0.7 14.4 4.2 16 019 2.2 3.7 4.1 28 25 1.5) 91.6% 8.495 25.2% 106 27 170) 95.2% 4.8% 1779 115 970% 3.796 5.1 52 78.4% 21.6% 31.1% 25.6 1.7 (1.8) 92.1% 9.0% 10.6% (1.0) 97.7% 6.6% 13.3% 1.2 1.8 97.7% 2.39 5.8% 3.1 28 08 92 396 7.796 12.0% 108.7% [8.7) 7.1% 13.6 10.1 207) 826% 17.4% 2439 02 93.8% 6.25 10.8% 9.7 2.8 (4.0) 92.0% B.0% 28.2% 5.9 5.5 23.1 18.5 Dell PROBLEMS 6.1 Financial Statement Detective Exercise Exhibit 6.3 shows common-size balance sheets and income state. Dell is the world's #1 direct-sale computer vendor. In addition to a ments for 12 companies, described below. Your job is to match full line of desktop and notebook PCs (about 80% of total sales). each company with its financial statements. Dell also offers workstations, storage systems, network servers, and Ethernet switches. Dell's direct-sales, built-to-order model allows Accor for lower inventories and lower operating costs, a necessity for the One of the world's leading hotel operators, owning or managing PC price wars and the occasional slump in corporate IT spending. almost 4000 properties throughout the world. It serves travelers in Deutsche Telekom Europe through its flagship chains Mercure, Novotel, and Sofitel, and its economy chains Ibis and Formule 1. In the United States, it oper. The #1 telecom company in Europe. Deutsche Telekom is Ger- ates budget brands Motel 6 and Red Roof Inns. Accor has embarked many's leading fixed-line phone operator, its T-Mobile unit serves on a sale and leaseback strategy for its upscale properties to reduce millions of wireless phone customers, and T-Online is one of the exposure to slowdowns in the market and is working to transition Europe's leading internet service providers. Although privatized in many of its midscale hotel leases to variable cost arrangements. the 1990s, the German government still holds a 15% stake and an additional 22% through a state-owned development bank. Arcelor Arcelor was formed by the combination of three European steel The FPL Group companies and is now the second largest steel manufacturer in the The FPL Group is a holding company with operations across the world. The company produces carbon steel and stainless steel for United States. Most revenue comes from its utility subsidiary, the the automotive, construction, appliance, and packaging industries. largest electricity provider in the state of Florida. The electricity is generated from the company's nuclear and fossil-fueled power plants. Carrefour Carrefour is the world's second largest retailer. Based in France, it Interpublic operates more than 11 000 stores under two dozen brand names, Interpublic is one of the world's largest advertising and marketing including Carrefour (hypermarkets), Champion (supermarkets), services companies. Operating through offices in 130 countries, its and Shopi (convenience stores). Unable to build new stores in flagship agencies include McCann Worldgroup, Lowe & Partners, France, until recent changes in French law, Carrefour has expanded and Hill Holliday. Like all of the global players in its industry, through acquisitions, at home and abroad. much of Interpublic's growth has come from acquisitions. Nestl customer base provides a steady stream of recurring licensing and Nestl is the world's #1 food company. It is the world leader in cof-service revenue. fee (Nescaf), and is also one of the largest bottled water (Perrier) and baby-food manufacturers. At last count, it is the owner of over Southwest Airlines 9000 branded products worldwide. Nestle's recent purchase of Southwest Airlines offers low-cost, no-frills air travel to 60 cities Ralston-Purina has made it a top player in the pet food business. In in the United States. A model for low-fare upstarts the world over, addition to its food business, Nestl owns nearly 27% of cosmetic the company has enjoyed over 30 straight years of profitability. giant L'Oreal. Southwest's business model is simple: flights are short (most are under two hours), and the airline usually lands at small airports Pfizer to avoid congestion at large hubs. Originally concentrated in the Pfizer is the world's largest research-based pharmaceutical company. western part of the United States, Southwest has expanded into Its best-known products include Viagra. Zoloft, and Lipitor. In addi key easter markets, such as Philadelphia. tion to prescription drugs, Pfizer also makes a broad range of popular over-the-counter remedies, including Sudafed and Benadryl. Toyota Toyota is the world's #2 car maker (by sales) and its most profita- SAP ble. In addition to longstanding core brands - Camry, Land Cruiser, SAP is the world's leading provider of enterprise resource plan- Celica, Corolla, and the luxury Lexus line - Toyota has pioneered ning software used to integrate corporate back-office functions the market for hybrid-powered sedans (Prius). While most of its such as human resources, accounting, distribution, and manu- North American and European competitors are downsizing opera- facturing. The company also offers a range of products on sup- tions, Toyota continues to pursue an aggressive growth strategy. ply chain and customer relationship management. SAP's large Exhibit 6-3 Common-size Financial Statements 1 2 3 4 5 6 7 8 9 10 11 12 2.15 2009 22.5% 37.99 13.4% 11.7% 40% 30.8% 17.6% 19.995 42.7% 54.19 75 48 18 D 17.8 12.5 26.0 4.2 76.8 257 8.9 0.1 09 3.7 301.5 24 2.1 1826 17.7 513 22.5 679 135 8.1 475 7.3 79.0 8.6 34.4 0.1 24.B 945 26.9 6.1 76.3 (16.6) 127) 30.7) 8.5 (46.4) 28.8 30.4 (15.6) 2.6 70.6 (25.4) 5.2 3.2 15.8 75 33.8 (386) 152 B.6 51.1 123.5 162B%235.5% 53.196 50.4% 13.9 (115) 13 17.8 100.9% 104.8 136.3% 53.6% 199.7) 149.0) 7.0 472 131 269.3% 173.6% 32.8% 763 260 810 55 71.6 109.3 269.3% 173,6% 192.196 103.5% 34.4% 14.4 136.8% 46.2% 28.2 26.4% 13.4 118.4% 303 100.4% 33.6% 124 5.2 472% 28.736 1.0 43 34 35 0.1 5.4 21.2% 73.4 398 138 8.7 2.4 78 413 62.1 129.9 162.B%2355% 40.9 103.5% 46.4 53.7 136.8% 16.5 26.9 192.1% 11.4 53.6% 132 47.296 611 1009 24.8 56.9 136.3% 100 43 Balance sheet (year-end Cash and marketable securities Receivables Inventories Property, plant, and equipment Accumulated depreciation Investments Other assets Total assets Current liabilities Long term debt Other noncurrent liabilities Shareholders' equity Total liabilities and shareholders' equities Income statement Operating revenues Other revenues Cost of goods sold lexcluding depreciation or operating expenses Depreciation and amortization Selling and administrative Interest expense Research and development Income taxes Other Total expenses Net income Cash flow from operations Free operating cash flow 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100 0% 100.0% 0796 744 100.0% 1.4% 86.5 100.0% 4.3% 738 587 75.4 74.9 983 45.1 80.9 316 33.1 11.4 7.B 9.7 $3 5.6 2.9 0.7 28 212 15.9 162 322 11.3 16.2 360 8.7 25.1 31.0 1.3 1.4 0.1 0.7 25 7.9 0.7 14.4 4.2 16 019 2.2 3.7 4.1 28 25 1.5) 91.6% 8.495 25.2% 106 27 170) 95.2% 4.8% 1779 115 970% 3.796 5.1 52 78.4% 21.6% 31.1% 25.6 1.7 (1.8) 92.1% 9.0% 10.6% (1.0) 97.7% 6.6% 13.3% 1.2 1.8 97.7% 2.39 5.8% 3.1 28 08 92 396 7.796 12.0% 108.7% [8.7) 7.1% 13.6 10.1 207) 826% 17.4% 2439 02 93.8% 6.25 10.8% 9.7 2.8 (4.0) 92.0% B.0% 28.2% 5.9 5.5 23.1 18.5 Dell PROBLEMS 6.1 Financial Statement Detective Exercise Exhibit 6.3 shows common-size balance sheets and income state. Dell is the world's #1 direct-sale computer vendor. In addition to a ments for 12 companies, described below. Your job is to match full line of desktop and notebook PCs (about 80% of total sales). each company with its financial statements. Dell also offers workstations, storage systems, network servers, and Ethernet switches. Dell's direct-sales, built-to-order model allows Accor for lower inventories and lower operating costs, a necessity for the One of the world's leading hotel operators, owning or managing PC price wars and the occasional slump in corporate IT spending. almost 4000 properties throughout the world. It serves travelers in Deutsche Telekom Europe through its flagship chains Mercure, Novotel, and Sofitel, and its economy chains Ibis and Formule 1. In the United States, it oper. The #1 telecom company in Europe. Deutsche Telekom is Ger- ates budget brands Motel 6 and Red Roof Inns. Accor has embarked many's leading fixed-line phone operator, its T-Mobile unit serves on a sale and leaseback strategy for its upscale properties to reduce millions of wireless phone customers, and T-Online is one of the exposure to slowdowns in the market and is working to transition Europe's leading internet service providers. Although privatized in many of its midscale hotel leases to variable cost arrangements. the 1990s, the German government still holds a 15% stake and an additional 22% through a state-owned development bank. Arcelor Arcelor was formed by the combination of three European steel The FPL Group companies and is now the second largest steel manufacturer in the The FPL Group is a holding company with operations across the world. The company produces carbon steel and stainless steel for United States. Most revenue comes from its utility subsidiary, the the automotive, construction, appliance, and packaging industries. largest electricity provider in the state of Florida. The electricity is generated from the company's nuclear and fossil-fueled power plants. Carrefour Carrefour is the world's second largest retailer. Based in France, it Interpublic operates more than 11 000 stores under two dozen brand names, Interpublic is one of the world's largest advertising and marketing including Carrefour (hypermarkets), Champion (supermarkets), services companies. Operating through offices in 130 countries, its and Shopi (convenience stores). Unable to build new stores in flagship agencies include McCann Worldgroup, Lowe & Partners, France, until recent changes in French law, Carrefour has expanded and Hill Holliday. Like all of the global players in its industry, through acquisitions, at home and abroad. much of Interpublic's growth has come from acquisitions. Nestl customer base provides a steady stream of recurring licensing and Nestl is the world's #1 food company. It is the world leader in cof-service revenue. fee (Nescaf), and is also one of the largest bottled water (Perrier) and baby-food manufacturers. At last count, it is the owner of over Southwest Airlines 9000 branded products worldwide. Nestle's recent purchase of Southwest Airlines offers low-cost, no-frills air travel to 60 cities Ralston-Purina has made it a top player in the pet food business. In in the United States. A model for low-fare upstarts the world over, addition to its food business, Nestl owns nearly 27% of cosmetic the company has enjoyed over 30 straight years of profitability. giant L'Oreal. Southwest's business model is simple: flights are short (most are under two hours), and the airline usually lands at small airports Pfizer to avoid congestion at large hubs. Originally concentrated in the Pfizer is the world's largest research-based pharmaceutical company. western part of the United States, Southwest has expanded into Its best-known products include Viagra. Zoloft, and Lipitor. In addi key easter markets, such as Philadelphia. tion to prescription drugs, Pfizer also makes a broad range of popular over-the-counter remedies, including Sudafed and Benadryl. Toyota Toyota is the world's #2 car maker (by sales) and its most profita- SAP ble. In addition to longstanding core brands - Camry, Land Cruiser, SAP is the world's leading provider of enterprise resource plan- Celica, Corolla, and the luxury Lexus line - Toyota has pioneered ning software used to integrate corporate back-office functions the market for hybrid-powered sedans (Prius). While most of its such as human resources, accounting, distribution, and manu- North American and European competitors are downsizing opera- facturing. The company also offers a range of products on sup- tions, Toyota continues to pursue an aggressive growth strategy. ply chain and customer relationship management. SAP's large
