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It has been provided of balance sheet of different company with some anonymity.

Then we were dictated to find out those, additionally finding out the nature of company from different industries, whether the company is a multinational or local with appropriate logic.

Health product
In this industry, we have been gone through two companies named A and B. our assumption is about company A, that is the multinational company and B is the local company. We have gone through the different ratios of the companies. Total Fixed Asset: Company As total current asset ratio is 51.2 and company Bs total current asset is 32.1. From the case, we have come to know that one of the companies is worlds largest prescription pharmaceuticals company. Definitely they will have a huge amount of current asset to run the business. And it is showing that A has that, so A is the MNC and B is LC. Net Fixed Asset: world largest pharmaceuticals will obviously have the large amount of fixed asset than the local company. A has the higher ratio of net fixed asset, that is 19.6 and b has 14.9. Debt to Equity: A multinational company is run by proper management, proper asset allocation. It is run very thats why usually a multinational company has less debt than a local company. In the financial data and ratio chart, we have been seen company A (8.06) is lower than B (10.66).

Beer
After reading the case, our first impression was that, the company produces seasonal and yearround beers is multinational company. As because the cash and short term investment is higher of D (55.6) than C (1.4). So D is the multinational company. But, after seeing the fixed asset ratio, company C has higher of 54.7 than company D (16). Moreover Cs inventory is less (4.3) than Ds 11.7. at the same time the inventory turnover rate of C is 12.6 higher than D which is 7.44. a multinational company has higher inventory turnover than a local company. So our first assumption was not right, now it has been seeing that company C is the multinational company.

As company D does seasonal business so it has to have more current asset than the company C that does business through the years. Company D has become financially conservative and going in cost-saving initiatives, that is why their intangibilities are lower (1.3) than multinational company C (7.4). For the double taxations, a multinational company and a alcohol business dealers have to pay higher tax. C income tax (7.8) is higher than Ds income tax (3.5).

Computer:
From the case there are two companies E & F doing their business on computer relevant equipments. From our judgment company F is the multinational company because in the theory part of case we recognize that E just take orders by mail orders and then sales the items but on the other hand F has a very big product line up and directly dealing with the consumers and they are selling hardware and software both. By using retailing strategy F is expanding their business in a tremendous way. Now we will show the logical explanation of financial data and ratios of these two organizations in below: Current Assets Total: After reading the case it was clear to us that F(87.6) is sufficient enough more than E so in that case the their current asset limit is higher than E(72.8). So from our judgment F is the multinational and E is the local organization. Net Fixed Assets: Its is known to us that all the multinational organization contains advanced level of net fixed assets because they have to deal with many countries so if we consider this method in this case we can see that E has 7.3 and f has 8.8 so it is clear that from our justification organization F is the multinational organization. Intangibles: In this part of financial data we justified that which organization is more renowned and spending money for increasing their brand value. So in the financial data organization E(0.0) is not spending any money for increasing their values or loyalty on the other hand F(1.2) is using this term perfectly. So here we get that organization F is the multinational company.

Total Liabilities: As organization F has a vast product line and dealing on hardwares and software they have more consumers rather than E so the sales and profit should be higher in that good judgment so in the financial data and ratios we recognizes that E has 72.1 and F has 36.9 portion of liabilities. Gross Profit: We consider this part for our justification because it is so understandable that the perimeter of profit is higher by F because they have a large product line up but in other side E has less and less get in touch with consumers. So because of enormous product line high sales are growing up and F is making higher profit and it is a multinational organization.

Books and Music


After analyzing the financial ratio given in the table, we assumed that company G is the multinational company and company H is the local company. Company Gs total current asset (78.2) is higher than company G total current asset (59.7). In addition, G intangibility ratio (4.4) is much lower than company H (11.1). It is showing that company G is much aware of allocating their asset in very proper and systematic way. It has been said in the case that, one company has followed an aggressive market strategy. That means, the companys investment is huge. From the table it is shown, H is following the aggressive marketing strategy, to get brand value, to be popular. It is also been said that, the company recently been profitable. A MNC cannot be run by if it is not on profit mostly. Otherwise it cannot open their office to the host countries. For the same reason a multinational company has always higher inventory turnover rate than a local company. From the table, company Gs inventory turnover ratio is 13.56 and company Hs inventory turnover ratio is 2.42. Thus, H has more inventory than G. On the other hand, company H has just recently making profit, so its income tax is negative and company Gs is positive. So from the financial ratios our assumption giving the right reflection that company G is the multinational and company H is the local company.

Paper
Here there are two companies I & J; among them, the first one is the largest manufacturer of paper, paperboard and packaging. The second company is small manufacturer but has a big brand name. From these two companies, we can make our mind that the first company is the multi-national company and the second one is local organization. We can prove it through its ratio analysis, such as; Cash and Short Term Investment: Multinational company emphasize more on its long term investment than the national company and from the ratio we see, the J (5.9) company is having less short term investment than I (7.6). So company J is the multi-national company. Net Fixed Asset: Since the multinational company should have factories and offices in several countries, its net fixed asset will be higher than the national company. From ratio we see, I company has 50.8 asset and company J has 62.5 asset. So the company J is the multi-national company. Cost of Goods Sold: A multinational company has to grab market and face extra tax from several countries and that is why its cost of goods sold will be higher and the ratio is showing, company J has COGS of 82.9 on the other hand company I has the COGS of 75.3. So the company J is the multi-national company. SG and Administrative Expenses: Multinational Company has to have offices and factories over several countries and so their SG and Administrative expenses should be higher than the national company. The ratio is showing, company I has 2.0 administrative expenses and the company J has 7.3 administrative expenses. So company J is the multinational company. Inventories: Multinational Company has to work with huge amount of products and raw materials and so their inventory will be higher than the national company. The ratio says, company J has 14.4 inventory and company I has 7.9. So we can assure that company J is the multinational company.

Hard Ware & Tools:


With the given condition, we can assume that the company which is a global manufacturer and sells a variety of product to the retailers, wholesalers. It does not have its own distribution channel. This company cannot be a multinational company. This company will have more inventory, and from the financial ratio table we got that company K has higher inventory ratio (17.8) than company L (14.9). Now for being a multinational company with a vast range of product and maintaining a huge marketing value chain, the company will have fewer inventories. Inventory turnover will be high. Ks inventory turnover is 3.89 higher than company L (3.59). On the other hand, a multinational company always pays more taxes than a national company due to double taxation. Considering the current ratio, company K has less (1.63) than company L (1.77). The current assents cannot cover-up the current liabilities of company K that does company L. Gross profit of company K is 39, whereas becoming a multinational company L has high gross profit of 48.4. Having much distribution channels, so many outlets, they will have more selling and administrative expense. The financial ratio showing company L has high SG &A expense (38.9) than company K (24.8). The local company L has more debt (77.03) than the multinational company K has less debt (18.29). So all these criteria indicates that Company K is a local company and L is a multinational company

Retailing
Hence the first company is expanding internationally; it provides a clear indication of a multinational company. According to the conditions, most of the stores for this company is leased, meaning less fixed asset. On the other hand as expanding internationally, the selling and administrative expenses will be higher. And its income tax rate will be higher.

Considering the second company a national company for its given criteria, the gross profit will be less because of giving more deep discount. Meanwhile its intangibles will be higher hence its partners are several leading designers. Now considering the balance sheet of Company M and N, we can see: Net Fixed Asset of Company M is 57 and Company N is 52.2. Because, Company N has more leased stores than they own, indicating comparatively less fixed asset. Gross Profit of company M is 24.7 and company N is 32.9. That indicates, Company M gives more discount on its product, earning less gross profit. Having Leasing designers as partners increases the brand value, thus increasing the intangibles, Ms intangibles is 9 and Ns is 0.6. SG&A Expenses: company M has SG &A expense (17.9) lower than company N (22.5), because Global expansion increases the selling and administrative expenses for company N. Higher Taxes for the Multinational Company, showing company Ms 2 and company Ns 2.4. Evaluating the above data, we can indicate that Company N is a Multinational Company meanwhile Company M is a national company.

Newspaper:
From the given direction, we can see that the Newspaper being sold in the country and around the world is a multinational company. It concentrates on only one product. The competition for subscribers and Advertising revenue is very high. And Taxation will be higher. On the other hand the national company which has large amount of goodwill from the acquisitions are more likely to have more current asset. Hence it is decentralizing; its SG&A expenses will be higher. Now if we consider the Company O and P, than we can see:

Factors Comparison Current Asset total

of Company O

Company P

Reasons

6.6

15.5

The NC due to its good will from the acquisitions is more likely to have higher current asset

Intangibles

76.8

37.1

The competition for subscription advertising is and very

high indicating higher brand higher rate. Cost of Goods Sold 49.7 40.5 Hence O is selling in the country and value and

Intangibles

Around the World. SG&A Expenses 23.0 39.7 With a higher number of products and

acquisitions of firms increases the Selling and Administrative

expenses. Income Tax 7.1 5.6 MNC pays Double

tax. So the tax rate is high.

So considering the above data we can indicate that Company O is a Multinational Company on the other hand P is a National Company.