Download Kami Export - Finance Detective _ Ratio Analysis and more Exercises Financial Management in PDF only on Docsity!
Finance Detective (Financial Statement Analysis, A Strategic Perspective, Clyde P. Stickney/Amos Tuck School ofBusiness Administration, Darthmouth College)Effective financial statement analysis requires an understanding of the economic characteristics ofthe firm being analyzed. Many of these economic characteristics are captured in the relationshipbetween various financial statement items. The exhibit presents condensed financial statementinformation for firms in 13 different industries. Balance sheet and income statements items areexpressed as a percentage of total revenues (that is, all amounts are divided by total revenues forthe year). The 13 companies (all corporations except the professional basketball franchise) shownrepresent the following industries:1.2.3.4.5.6.7.8.9.10.11.12.13. Advertising agencyAerospace manufacturer (significant government contracts)Beer breweryComputer manufacturerDepartment store chainDistiller of hard liquorElectric utilityFinance company (also involved in leasing)Grocery store chainLife insurance companyPharmaceutical companyProfessional basketball franchise (a partnership)Steel manufacture
Use whatever clues that you can to match the companies in the exhibit with the industries listedabove.
Exhibit - Data for Ratio Detective Exercise^ Balance Sheet at End of Year^ (1)^ (2)^ (3)^ (4)
(5)^ (6)^ (7)^ (8)^ (9)^ (10)^ (11)^ (12)^ (13)
Cash and Marketable Securities^ 0.7%^ 19.1%^ 9.0%^ 0.9%
11.9%^ 1.6%^ 4.4%^ 22.7%^ 5.1%^ 14.4%^ 245.6%^ 1.0%^ 25.20%
Current Receivables^ 0.2%^ 4.5%^ 16.3%^ 4.9%
15.2%^ 36.2%^ 13.5%^ 21.3%^ 13.2%^ 70.6%^ 11.90%^ 7.8%^ 562.5%
Inventories^ 7.5%^ -^ 11.9%^ 5.6%
13.2%^ 14.4%^ 21.7%^ 13.0%^ 10.5%^ 7.5%^ -^ 11.4%^
Property, Plant, and Equipment Cost^ 17.0%^ 0.8%^ 42.90%^ 79.40%
54%^ 37.50%^ 25.30%^ 65.90%^ 162.5%^ 18.40%^ 3.60%^ 398.4%^ 70.8%
Accumulated Depreciation^ -5.5%^ -1%^ -21.0%^ -21.7%
-26.9%^ -12.0%^ -11.8%^ -27.4%^ -80.5%^ -9.3%^ -1.8%^ -109.6%^ -21.4%
Net^ 11.5%^ 0.1%^ 21.9%^ 57.7%
27.1%^ 25.5%^ 13.5%^ 38.5%^ 82.0%^ 9.1%^ 1.8%^ 288.8%^ 49.4%
Other Assets^ 1.40%^ 23.20%^ 12.50%^ 6.90%
8.70%^ 2.20%^ 31.80%^ 16.7%^ 4.0%^ 22.1%^ 51.9%^ 8.7%^ 57.5% Total Assets 21.3% 47% 71.6% 76.0% 76.1%^ 79.9%^ 84.9%^ 112.2%^ 114.8%^ 123.7%^ 311%^ 317.7%^ 694.6% Current Liabilities^ 7.8%^ 21.0%^ 32.7%^ 13.2%
22.3%^ 35.1%^ 15.3%^ 43.6%^ 12.5%^ 87.1%^ 203.9%^ 30.4%^ 437.5%
Long-term Debt^ 3.6%^ -^ 6.3%^ 14.7%
8.7%^ 11.6%^ 17.4%^ 3.3%^ 18.0%^ 4.3%^ 21.4%^ 126.0%^ 196.1%
Other Noncurrent Liabilities^ 1.4%^ 15.6%^ 5.5%^ 14.2%
4.9%^ 6.8%^ 10.8%^ 12.9%^ 5.0%^ 7.8%^ 8.4%^ 23.1%^ 12.2%
Owners' Equity^ 8.5%^ 10.3%^ 27.1%^ 33.9%
40.2%^ 26.4%^ 41.4%^ 52.4%^ 79.3%^ 24.5%^ 77.5%^ 138.2%^ 48.8% Total Equities 21.3% 46.9% 71.6% 76.0% 76.1%^ 79.9%^ 84.9%^ 112.2%^ 114.8%^ 123.7%^ 311.2%^ 317.7%^ 694.6% Income Statement for Year^ (1)^ (2)^ (3)^ (4)
(5)^ (6)^ (7)^ (8)^ (9)^ (10)^ (11)^ (12)^ (13)
Sales^ 100.0%^ 100.0%^ 100.0%^ 100.0%
100.0%^ 100.0%^ 100.0%^ 100.0%^ 100.0%^ 100.0%^ 100.0%^ 100.0%^ 100.0%
Cost of Goods Sold ( excluding depreciation ) or76.9%^ 61.8%^ 74.8%^ 62.0% Operating Expenses^
71.1%^ 72.1%^ 46.5%^ 26.60%^ 86.10%^ 89.60%^ 86.60%^ 57.80%^ 21.80%
Depreciation^ 1.4%^ 0.1%^ 4.1%^ 3.6%
6.8%^ 2.6%^ 2.0%^ 4.20%^ 6.60%^ 2.60%^ 0.90%^ 10.20%^ 14.80%
Interest^ 0.4%^ 1.9%^ 0.7%^ 0.8%
0.5%^ 1.3%^ 2.0%^ 1.10%^ 1.80%^ 1.20%^ 3.40%^ 10.10%^ 47.30%
Advertising^ 3.6%^ 0.5%^ -^ 8.0%
-^ 3.3%^ 11.2%^ 4.00%^ -^ -^ -^ -^
Research and Development^ -^ -^ 3.5%^
-^ 7.7%^ -^ -^ 11.20%^ -^ -^ -^ -^
Income Taxes^ 1.1%^ -^ 4.5%^ 5.5%
2.8%^ 2.9%^ 6.6%^ 9.90%^ -4.10%^ 3.90%^ 2.50%^ 8.20%^ 7.00%
All Other Items (net)^ 15.5%^ -0.7%^ 7.2%^ 13.4%
6.5%^ 13.5%^ 23.5%^ 25.10%^ 6.40%^ -1.30%^ -1.20%^ -5.50%^ - Total Expenses 98.9% 63.6% 94.8% 93.3% 95.4%^ 95.7%^ 91.8%^ 82.1%^ 96.8%^ 96.0%^ 92.2%^ 80.8%^ 90.9% Net Income^ 1.1%^ 36.4%^ 5.2%^ 6.7%
4.6%^ 4.3%^ 8.2%^ 17.9%^ 3.2%^ 4.0%^ 7.8%^ 19.2%^ 9.1%
Cash Flow from Operations + Capital Expenditures^ 1.22%^ -^ 2.95%^ 1.17%
Company Numbers Company Numbers 1.09% 1.09%^ 5.20%^ 5.20%^ 1.36%^ 3.06%^ 44.80%^ 0.95%^ 0.80%
