Case 6

In this case study, we look at several industries as well as firms and have to match them with their financial statements and ratios.

Looking at the health product industry, we see two different companies. The first one, which is firm B, is a world wide company with a robust research and development budget. It divested several non-pharmaceutical firms and shows goodwill. We determined this firm to be company B, since this firm shows high investments as well as advances in research. We can also see that its intangible goods are high with 46.1%, compared to company A with 22.2%. The second health product industry is company A, a mass production firm with brand development. This mass production can be seen in their high cash & short term ivestments of 24.2%, compared to company B with 16.1%.

The second industry describes two beer-producing firms. The first company, firm C, is a national, mass-producing firm with a variety of brands and networks. It also operates several beer related businesses as well as theme parks. This firm is represented as firm C in the statements and ratios for several reasons. First, it pays out dividends, which shows that this form is a stable and mature firm. Besides, this firm has fixed assets of 54.7%, compared to the other beer production firm with 16%. Firm C also has a higher current and quick ratio. This shows us that firm follows a more aggressive risk management. The second beer-producing company, D, offers seasonal and year around beer with higher prices. It outsources brewing activities and follows a financially conservative strategy. This can especially be seen in the fact that it does not have any debt in current liabilities and long-term debt in general.

The next industry is the computer service industry. Here, the first company, firm F, offers build-to-order products with are mail-order sales. The firm is an assembler of PC components and customers can design prices through the web. This firm is represented by company F in...