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FIU ACG 6175 Financial Reporting and Analysis

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

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FIU ACG 6175 Financial Reporting and Analysis


Exhibit 1
Selected Balance Sheet and Financial Ratio Information*
Company Number
1
2
Assets
%
%
Cash
0.05
0.18
Receivables
0.11
0.09
Inventory
0.00
0.07
PP&E Net
0.01
0.49
Intangibles
0.00
0.02
Investments
0.67
0.02
Other Assets
0.16
0.12
Total Assets
100%
100%
Debt - Current Portion
0.00
0.00
Notes Payable
0.00
0.00
Accounts Payable
0.01
0.09
Taxes Payable
0.00
0.01
Other Current Liabilities
0.00
0.14
Total Long Term Debt
0.02
0.07
Deferred Taxes
0.01
0.05
Minority Interests
0.00
0.00
Other Liabilities
0.76
0.09
Total Liabilities
80%
46%
Preferred Stock - Total
0.00
0.00
Common Equity
0.20
0.54
Total Stockholders' Equity
20%
54%
Selected Financial Ratios
Liquidity
Current Ratio
Quick Ratio
Asset Management
Receivables Turnover
Inventory Turnover
Days Inventory
Total Asset Turnover
Debt
Long-term Debt to Common Equity
Total Debt to Total Assets
Profitability
Net Profit Margin
Return on Total Assets
Return on Common Equity
Gross Profit Margin

3
%
0.11
0.06
0.00
0.64
0.03
0.03
0.10
100%
0.01
0.00
0.14
0.00
0.17
0.12
0.02
0.00
0.26
71%
0.01
0.28
29%

4
%
0.58
0.00
0.05
0.05
0.00
0.00
0.33
100%
0.00
0.00
0.17
0.00
0.07
0.54
0.00
0.00
0.00
79%
0.00
0.21
21%

5
%
0.02
0.10
0.06
0.70
0.00
0.02
0.08
100%
0.01
0.04
0.09
0.01
0.06
0.05
0.14
0.02
0.11
53%
0.00
0.47
47%

11.85
11.85

1.43
1.00

0.73
0.56

2.63
2.31

0.91
0.57

2.88
NC
0.00
0.31

15.13
9.97
36.09
1.32

15.03
NC
0.00
1.03

NC
24.25
14.85
1.53

9.96
14.27
25.23
1.07

12.20
2.85

13.55
9.93

44.30
13.09

250.92
53.79

10.35
9.48

12.73
3.76
19.11
19.05

3.57
4.64
8.75
45.09

7.08
6.78
24.61
18.06

(20.42)
(19.21)
(89.77)
23.53

6.40
6.94
14.70
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

6
%
0.03
0.14
0.09
0.57
0.08
0.00
0.10
100%
0.00
0.12
0.08
0.01
0.13
0.32
0.05
0.00
0.11
82%
0.00
0.18
18%

7
%
0.20
0.22
0.12
0.39
0.01
0.01
0.03
100%
0.00
0.14
0.03
0.08
0.19
0.19
0.00
0.01
0.07
71%
0.00
0.29
29%

8
%
0.24
0.34
0.36
0.01
0.02
0.03
0.01
100%
0.05
0.47
0.22
0.00
0.00
0.16
0.00
0.00
0.08
96%
0.00
0.04
4%

9
%
0.13
0.59
0.00
0.01
0.01
0.19
0.07
100%
0.00
0.15
0.62
0.00
0.00
0.09
0.00
0.00
0.06
92%
0.00
0.08
8%

10
%
0.08
0.19
0.24
0.44
0.00
0.00
0.06
100%
0.02
0.03
0.11
0.00
0.09
0.26
0.00
0.00
0.07
57%
0.00
0.43
43%

11
%
0.04
0.02
0.34
0.52
0.05
0.00
0.03
100%
0.02
0.00
0.21
0.01
0.10
0.19
0.00
0.04
0.01
57%
0.00
0.43
43%

12
%
0.09
0.05
0.01
0.70
0.03
0.07
0.05
100%
0.00
0.00
0.06
0.00
0.08
0.24
0.03
0.00
0.01
42%
0.00
0.58
58%

13
%
0.29
0.09
0.00
0.16
0.17
0.21
0.08
100%
0.00
0.00
0.04
0.00
0.36
0.17
0.00
0.00
0.16
73%
0.00
0.27
27%

14
%
0.62
0.07
0.00
0.07
0.00
0.00
0.24
100%
0.00
0.00
0.03
0.04
0.18
0.00
0.00
0.00
0.00
26%
0.04
0.70
74%

0.87
0.48

1.33
0.96

1.27
0.78

0.93
0.93

2.19
1.08

1.26
0.18

1.26
1.02

1.04
0.93

2.77
2.69

10.56
6.78
53.06
1.36

4.22
1.54
233.54
0.92

0.40
0.13
2718.66
0.12

0.21
NC
2.94
0.13

8.21
4.02
89.65
1.72

131.46
6.37
56.56
2.89

22.22
73.17
4.92
1.03

18.09
NC
0.00
1.70

11.87
NC
0.00
0.79

181.45
44.26

66.78
33.40

478.79
67.41

109.46
23.86

61.13
30.40

45.50
21.23

41.76
24.56

62.21
16.80

0.00
0.00

7.43
9.95
56.48
55.57

22.52
19.65
67.96
81.05

3.53
0.41
12.57
60.21

12.82
1.18
15.19
60.48

4.03
6.64
15.70
38.37

3.22
8.86
20.98
22.36

6.33
6.71
11.55
26.95

3.54
4.16
15.38
38.12

31.00
19.96
28.52
95.38

2010 Florida International University

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FIU ACG 6175 Financial Reporting and Analysis

Exhibit 2
Represented Industries
Complete the chart.
Company
Number

Code

Industry

Airline

Bank

Brewery

Department Store

Discount Retailer

Fast Food Retailer/Franchiser

Food Products Manufacturer

Insurance Company

Internet Retailer

Internet Service Provider

Oil Company (fully integrated)

Pharmaceutical Manufacturer

Securities Brokerage

Software Manufacturer

2010 Florida International University

Rationale

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