.0/msohtmlclip1/01/clip_image002.gif”>FIU ACG 6175 Financial Reporting and Analysis
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Week 4Identify the Industries
Overview
While companies may differ in their strategic objectives, financing mixes, and management approaches, they, nevertheless, share common characteristics with other firms in their industry. These characteristics result from the operational realities of a companys industry, and as such can be used as benchmarks in evaluating a companys financial position.
The attached exhibits contain selected balance sheet data, financial ratios, and a list of industry groups for 14 companies. The financial data were gathered from the companies 1998 10-K filings as reported by Compustat.
Directions
Match each companys data set (Exhibit 1, pp. 2 and 3) with the industry (Exhibit 2, p. 4) in which that company operates. Be sure to keep track of the rationale you employ in forming each match.
2010 Florida International University Page 1 of 4
FIU ACG 6175 Financial Reporting and Analysis
Exhibit 1
Selected Balance Sheet and Financial Ratio Information*
Company Number
1
2
3
4
5
Assets
%
%
%
%
%
Cash
0.05
0.18
0.11
0.58
0.02
Receivables
0.11
0.09
0.06
0.00
0.10
Inventory
0.00
0.07
0.00
0.05
0.06
PP&E Net
0.01
0.49
0.64
0.05
0.70
Intangibles
0.00
0.02
0.03
0.00
0.00
Investments
0.67
0.02
0.03
0.00
0.02
Other Assets
0.16
0.12
0.10
0.33
0.08
Total Assets
100%
100%
100%
100%
100%
Debt – Current Portion
0.00
0.00
0.01
0.00
0.01
Notes Payable
0.00
0.00
0.00
0.00
0.04
Accounts Payable
0.01
0.09
0.14
0.17
0.09
Taxes Payable
0.00
0.01
0.00
0.00
0.01
Other Current Liabilities
0.00
0.14
0.17
0.07
0.06
Total Long Term Debt
0.02
0.07
0.12
0.54
0.05
Deferred Taxes
0.01
0.05
0.02
0.00
0.14
Minority Interests
0.00
0.00
0.00
0.00
0.02
Other Liabilities
0.76
0.09
0.26
0.00
0.11
Total Liabilities
80%
46%
71%
79%
53%
Preferred Stock – Total
0.00
0.00
0.01
0.00
0.00
Common Equity
0.20
0.54
0.28
0.21
0.47
Total Stockholders’ Equity
20%
54%
29%
21%
47%
Selected Financial Ratios
Liquidity
Current Ratio
11.85
1.43
0.73
2.63
0.91
Quick Ratio
11.85
1.00
0.56
2.31
0.57
Asset Management
Receivables Turnover
2.88
15.13
15.03
NC
9.96
Inventory Turnover
NC
9.97
NC
24.25
14.27
Days Inventory
0.00
36.09
0.00
14.85
25.23
Total Asset Turnover
0.31
1.32
1.03
1.53
1.07
Debt
Long-term Debt to Common Equity
12.20
13.55
44.30
250.92
10.35
Total Debt to Total Assets
2.85
9.93
13.09
53.79
9.48
Profitability
Net Profit Margin
12.73
3.57
7.08
(20.42)
6.40
Return on Total Assets
3.76
4.64
6.78
(19.21)
6.94
Return on Common Equity
19.11
8.75
24.61
(89.77)
14.70
Gross Profit Margin
19.05
45.09
18.06
23.53
21.41
* Balance Sheet data is expressed as percentage of Total Assets
NC= Cannot be calculated
Source: 1998 Compustat Reported 10K Filings
2010 Florida International University Page 2 of 4
FIU ACG 6175 Financial Reporting and Analysis
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6
7
8
9
10
11
12
13
14
%
%
%
%
%
%
%
%
%
0.03
0.20
0.24
0.13
0.08
0.04
0.09
0.29
0.62
0.14
0.22
0.34
0.59
0.19
0.02
0.05
0.09
0.07
0.09
0.12
0.36
0.00
0.24
0.34
0.01
0.00
0.00
0.57
0.39
0.01
0.01
0.44
0.52
0.70
0.16
0.07
0.08
0.01
0.02
0.01
0.00
0.05
0.03
0.17
0.00
0.00
0.01
0.03
0.19
0.00
0.00
0.07
0.21
0.00
0.10
0.03
0.01
0.07
0.06
0.03
0.05
0.08
0.24
100%
100%
100%
100%
100%
100%
100%
100%
100%
0.00
0.00
0.05
0.00
0.02
0.02
0.00
0.00
0.00
0.12
0.14
0.47
0.15
0.03
0.00
0.00
0.00
0.00
0.08
0.03
0.22
0.62
0.11
0.21
0.06
0.04
0.03
0.01
0.08
0.00
0.00
0.00
0.01
0.00
0.00
0.04
0.13
0.19
0.00
0.00
0.09
0.10
0.08
0.36
0.18
0.32
0.19
0.16
0.09
0.26
0.19
0.24
0.17
0.00
0.05
0.00
0.00
0.00
0.00
0.00
0.03
0.00
0.00
0.00
0.01
0.00
0.00
0.00
0.04
0.00
0.00
0.00
0.11
0.07
0.08
0.06
0.07
0.01
0.01
0.16
0.00
82%
71%
96%
92%
57%
57%
42%
73%
26%
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.04
0.18
0.29
0.04
0.08
0.43
0.43
0.58
0.27
0.70
18%
29%
4%
8%
43%
43%
58%
27%
74%
0.87
1.33
1.27
0.93
2.19
1.26
1.26
1.04
2.77
0.48
0.96
0.78
0.93
1.08
0.18
1.02
0.93
2.69
10.56
4.22
0.40
0.21
8.21
131.46
22.22
18.09
11.87
6.78
1.54
0.13
NC
4.02
6.37
73.17
NC
NC
53.06
233.54
2718.66
2.94
89.65
56.56
4.92
0.00
0.00
1.36
0.92
0.12
0.13
1.72
2.89
1.03
1.70
0.79
181.45
66.78
478.79
109.46
61.13
45.50
41.76
62.21
0.00
44.26
33.40
67.41
23.86
30.40
21.23
24.56
16.80
0.00
7.43
22.52
3.53
12.82
4.03
3.22
6.33
3.54
31.00
9.95
19.65
0.41
1.18
6.64
8.86
6.71
4.16
19.96
56.48
67.96
12.57
15.19
15.70
20.98
11.55
15.38
28.52
55.57
81.05
60.21
60.48
38.37
22.36
26.95
38.12
95.38
2010 Florida International University Page 3 of 4
FIU ACG 6175 Financial Reporting and Analysis
Exhibit 2
Represented Industries
Complete the chart.
Company
Code
Industry
Rationale
Number
A
Airline
B
Bank
C
Brewery
D
Department Store
E
Discount Retailer
F
Fast Food Retailer/Franchiser
G
Food Products Manufacturer
H
Insurance Company
I
Internet Retailer
J
Internet Service Provider
K
Oil Company (fully integrated)
L
Pharmaceutical Manufacturer
M
Securities Brokerage
N
Software Manufacturer
2010 Florida International University Page 4 of 4
