Identify the Industries (1)

FIU ACG 617 6175 5 Financ Financ ial Reporti ng and A nalysi s

Week 4—Identify the Industries

Overview While companies may differ in their strategic objectives, financing mixes, and management approaches, they, nevertheless, share common characteristics with other firms in their industry. These characteristics result from the operational realities of a company’s industry, and as such can be used as benchmarks in evaluating a company’s financial position. The attached exhibits contain selected balance sheet data, financial ratios, and a list of industry groups for 14 companies. The financial data were gathered from the companies’ 1998 10-K filings as reported by Compustat . Directions Match each company’s data set (Exhibit 1, pp. 2 and 3) with the industry (Exhibit 2, p. 4) in which that company operates. Be sure to keep track of the rationale you employ in forming each match.

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FIU ACG 6175 Financ ial Reporti ng and A nalysi s

Exhibit 1 Selected Balance Sheet and Financial Ratio Information* Company Number 1 2  Assets % % Cash 0.05 0.18 Receivables 0.11 0.09 Inventory 0.00 0.07 PP&E Net 0.01 0.49 Intangibles 0.00 0.02 Investments 0.67 0.02 Other Assets 0.16 0.12  Total Assets 100% 100% Debt - Current Portion 0.00 0.00 Notes Payable 0.00 0.00  Acc ou nt s Payabl e 0.01 0.09 Taxes Payable 0.00 0.01 Other Current Liabilities 0.00 0.14 Total Long Term Debt 0.02 0.07 Deferred Taxes 0.01 0.05 Minority Interests 0.00 0.00 Other Liabilities 0.76 0.09 Total Liabilities 80% 46% Preferred Stock - Total 0.00 0.00 Common Equity 0.20 0.54 Total Stockholders' Equity 20% 54% Selected Financial Ratios Liquidity Current Ratio Quick Ratio  Asset Management Receivables Turnover  Inventory Turnover  Days Inventor y Total Asset Turnover  Debt Long-term Debt to Common Equity Total Debt to Total Assets Profitability Net Profit Margin Return on Total Assets Return o n Common Equity Gross Profit Margin

3 % 0.11 0.06 0.00 0.64 0.03 0.03 0.10 100% 0.01 0.00 0.14 0.00 0.17 0.12 0.02 0.00 0.26 71% 0.01 0.28 29%

4 % 0.58 0.00 0.05 0.05 0.00 0.00 0.33 100% 0.00 0.00 0.17 0.00 0.07 0.54 0.00 0.00 0.00 79% 0.00 0.21 21%

5 % 0.02 0.10 0.06 0.70 0.00 0.02 0.08 100% 0.01 0.04 0.09 0.01 0.06 0.05 0.14 0.02 0.11 53% 0.00 0.47 47%

2.63 2.31

0.91 0.57

11.85 11.85

1.43 1.00

0.73 0.56

2.88

15.03

0.00 0.31

15.13   9.97 36.09 1.32

12.20 2.85 12.73 3.76 19.11 19.05

NC

NC

0.00 1.03

24.25 14.85 1.53

9.96 14.27 25.23 1.07

13.55 9.93

44.30 13.09

250.92 53.79

10.35 9.48

3.57 4.64 8.75 45.09

7.08 6.78 24.61 18.06

(20.42) (19.21) (89.77) 23.53

6.40 6.94 14.70 21.41

NC

 

 

* Balance Sheet data is expressed as percent age of Total Assets NC  = Cannot be calculated Source: 1998 Compustat  Reported 10K Filings

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FIU ACG 6175 Financ ial Reporti ng and A nalysi s

6 % 0.03 0.14 0.09 0.57 0.08 0.00 0.10 100% 0.00 0.12 0.08 0.01 0.13 0.32 0.05 0.00 0.11 82% 0.00 0.18 18%

7 % 0.20 0.22 0.12 0.39 0.01 0.01 0.03 100% 0.00 0.14 0.03 0.08 0.19 0.19 0.00 0.01 0.07 71% 0.00 0.29 29%

8 % 0.24 0.34 0.36 0.01 0.02 0.03 0.01 100% 0.05 0.47 0.22 0.00 0.00 0.16 0.00 0.00 0.08 96% 0.00 0.04 4%

9 % 0.13 0.59 0.00 0.01 0.01 0.19 0.07 100% 0.00 0.15 0.62 0.00 0.00 0.09 0.00 0.00 0.06 92% 0.00 0.08 8%

10 % 0.08 0.19 0.24 0.44 0.00 0.00 0.06 100% 0.02 0.03 0.11 0.00 0.09 0.26 0.00 0.00 0.07 57% 0.00 0.43 43%

11 % 0.04 0.02 0.34 0.52 0.05 0.00 0.03 100% 0.02 0.00 0.21 0.01 0.10 0.19 0.00 0.04 0.01 57% 0.00 0.43 43%

12 % 0.09 0.05 0.01 0.70 0.03 0.07 0.05 100% 0.00 0.00 0.06 0.00 0.08 0.24 0.03 0.00 0.01 42% 0.00 0.58 58%

13 % 0.29 0.09 0.00 0.16 0.17 0.21 0.08 100% 0.00 0.00 0.04 0.00 0.36 0.17 0.00 0.00 0.16 73% 0.00 0.27 27%

14 % 0.62 0.07 0.00 0.07 0.00 0.00 0.24 100% 0.00 0.00 0.03 0.04 0.18 0.00 0.00 0.00 0.00 26% 0.04 0.70 74%

0.87 0.48

1.33 0.96

1.27 0.78

0.93 0.93

2.19 1.08

1.26 0.18

1.26 1.02

1.04 0.93

2.77 2.69

10.56 6.78 53.06 1.36

4.22 1.54 233.54 0.92

0.40 0.13 2718.66 0.12

0.21

131.46 6.37 56.56 2.89

22.22 73.17 4.92 1.03

18.09

11.87

NC

NC

2.94 0.13

8.21 4.02 89.65 1.72

0.00 1.70

0.00 0.79

181.45 44.26

66.78 33.40

478.79 67.41

109.46 23.86

61.13 30.40

45.50 21.23

41.76 24.56

62.21 16.80

0.00 0.00

7.43 9.95 56.48 55.57

22.52 19.65 67.96 81.05

3.53 0.41 12.57 60.21

12.82 1.18 15.19 60.48

4.03 6.64 15.70 38.37

3.22 8.86 20.98 22.36

6.33 6.71 11.55 26.95

3.54 4.16 15.38 38.12

31.00 19.96 28.52 95.38

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NC

 

 

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FIU ACG 6175 Financ ial Reporti ng and A nalysi s

Exhibit 2 Represented Industries Complete the chart. Company Number

Code

Indust ry

 A

Airline

B

Bank

C

Brewery

D

Department Store

E

Discount Retailer

F

Fast Food Retailer/Franchiser

G

Food Products Manufacturer

H

Insurance Company

I

Internet Retailer

J

Internet Service Provider

K

Oil Company (fully integrated)

L

Pharmaceutical Manufacturer

M

Securities Brokerage

N

Software Manufacturer

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Ratio nale

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