Finance Case Study

Company A: Manufacturer of toiletries, non-prescription drugs, and consumer and baby care products. Data analysis: Compared with Company B, Company A has a higher gross margin equivalent to 63.1 percent.

Company B: Manufacturer of pharmaceuticals and low-margin hospital supplies. Data analysis: Goodwill can be seen on the other assets portion of the balance sheet. Company B has a significant amount of other assets (40.6 %). Compared to Company A, gross profit is 36.0 percent.

Company C: Marketer of high quality washers, dryers, dishwashers and refrigerators in its own name. Data analysis: High quality can be associated with high sales price of goods. Company C has a higher Sales / Assets ratio equal to 223.0 percent. Cost of goods sold is lower (72.8%) as against (79.8%) which may explain that manufacturing and selling under one brand name has a lower manufacturing cost.

Company D: Marketer of the same products under 3 different brand names. Data analysis: The company has a higher cost of goods sold (79.8 %) which may explain that manufacturing and selling one product under 3 brand names would require higher cost of goods sold.

Company E: Manufacturer of large mainframe computers. Data analysis: This company offers financial services aside from the manufacture of mainframe computers. Receivables comprise 18.7 percent of total assets which is significant in financing type of business. Financial services reflect other income for the company in the form of interest income which is 2.7 percent of total revenues generated.

Company F: Manufacturer of supercomputer systems for scientific applications. Data analysis: Output of the units is relatively small but the price is highest in the industry. Cost of goods sold is only 35.7 percent gross margin is 64.3%. Because the supercomputers were used for research, R&D expense of Company F is 15.8 % of sales which is relatively high out of the way.

Company G: Discount store – wholesaler. Data analysis: Inventory is...