Co Finance

The Financial Detective

Friday, April 17, 2009

Health products

On the basis of trade receivables , inventories, fixed assets, payables , income and the ratio of inventory turns , it seems that Company A is more important than company B. Company A received so little a budget for research and development more important. Company B would be another commercial basis by a diverse mass production sold in supermarkets .

First on trade receivables , we see that Company A owns a third more than Company B ( 12% A and 8% B). This difference can be explained by the fact that pharmaceutical products are sold in supermarkets B . However , in the vast majority of distribution a customer pay in cash, but the problem and whether supermarkets quickly reverse the revenue to the company B. The rotation of customer receivables , confirmed that company A has time shorter than company B. payment

We note with income statements of the two companies , that B has less stock that Company A ( 7% A and 5% B). This suggests that company B test up to approach the "zero stock " and that it therefore work just in time to optimize its performance more than Company A. Although the difference is that here two points. These are businesses large inventory change.

Payables of Company A are more important than company B ( 9% A and 2% B). This difference may result in a different production. Indeed the company A which favors the search for new products to appeal to different components constantly and therefore many suppliers. In contrast , Company B produces products already on the market that require fewer suppliers . One can also consider that Company B sells more volume uses more suppliers to survive their needs.

Finally, for the benefits of each , Company B sells more Current products and requires less research is more profit than Company A.

So, Company A invests a maximum in research and development and then file patents , we see that it is society that B has more intangibles .

While Company B...