Finacial Detective

Alfred University

MBA 614 – Corporate Finance

Case Study – The Financial Detective

Instructor – Frank Duserick

Sept. 25, 2013

David Burdick

1. Match financial data in exhibit 1 with the company descriptions.

Some key differences in the common sized financial ratios for Heath Product companies A and B are

A B

Intangibles 22.2 46.1

Investments and Advances 0.1 3.1

Debt in Current Liabilities 0.5 9.1

Deferred Taxes 0.8 10.2

Depreciation 4.5 9.7

Inventory Turnover 3.08 0.93

Based on these select differences, I would conclude that company B is the world’s largest prescription-pharmaceutical company and has a very broad and deep pipeline of ethical pharmaceuticals, supported by a robust research and development budget. This makes sense due to company A will have more intangibles such as patents which allow them to be a world leader in health products.

Some key differences in the common sized financial ratios for Beer companies C and D are

C D

Net Fixed Assets 54.7 16.0

Intangibles 7.4 1.3

Liabilities-Total 83.5 27.1

Stockholders’ Equity 16.5 72.9

Based on these select differences, I would conclude that company D is the national brewer of mass-market consumer beers sold under a variety of names. This company operates an extensive network of breweries and distribution systems. It makes sense that company D is larger because it has a larger percentage of stockholders’ equity.

Some key differences in the common sized financial ratios for Computer companies E and F are

E F

Current Liabilities-Total 60.9 33.3

Net Income 6.2 3.3

Return on Equity 46.92 5.44

Based on these select differences, I would conclude that company E sells a highly differentiable line of computers, consumer-oriented electronic devices, and a variety of proprietary software products.

Some key differences in the common sized financial ratios for Book and Music companies G and H are

G H

Cash/Short-term investments...