Case 1: the Financial Detective

Health Products

It is given that one of the companies has 165 decentralized subsidiaries. If we talk about Company A; net property, plant and equipment is 34.4% of total assets while the percentage is only 23.3% for Company B. All those subsidiaries are in favor of the bigger percentage for net property, plant and equipment, so Company A has the subsidiaries. It is also mentioned that the other firm, which is company B in this case, had significant goodwill on its books. Since goodwill is considered as an intangible asset, we should look at “other assets” in the exhibit. Company B is 40.6% where Company A is only 15.6%.

Household Appliances

When we look at Companies C and D in the exhibit, the values for “minority interest” immediately takes the attention since one of them is 2.7% while the other is 0%. Company D took the interest of the minority since it has a contract to sell one brand solely as a private-label item through a large department store. Besides, when we look at market/book values of the companies, we see that Company C has the higher percentage because it is focused on marketing high-quality washers, dryers etc. Company D is selling both under its own name and under three other brand names in an attempt to segment the market. Since the products are relatively lower quality, COGS percentage for this company is larger than Company C whereas the net income is not as large.

Computers

The participants for this industry have similar properties to the household appliances. One of the companies produces relatively small number of units with the highest price tag in the industry. This is company F since its COGS percentage is almost half of the other company. Plus, the highly focused product line that consists of supercomputer systems for scientific applications needs almost excessive R&D expense. Company F has 15.8% of R&D expense while the value is not available for the other company. In the light of these two data, it can also be seen that...