The Financial Detective 2005

[ 2005 Introduction Each industry is distinctive. One might be unique in its high fixed assets; other would be differentiated of its increasing intangible assets and many other financial footprints that each industry leaves on its balance sheet. Nonetheless, industries are distinguished furthermore; fingers of one hand are not the same as said. Businesses in the same industry can be characterized differently according to their strategic plan and capital structure. The following case highlighted some characteristics of different industries and different businesses within those industries.

From pharmaceuticals to music and books, those differences, supported by numerical financial data, are explained in the following section. Books & Music General information provided: Company 1 1. Selling through a vast retail-store presence 2. Traditional book retailing 3. Online presence and owns publishing imprint Company 2 1. Sells books, music, videos solely through the internet website 2. Three quarters of the sales are media 3. Sells electronics and other merchandise 4. Recently became profitable 5.

Followed a strategy of acquiring retailed online business recently Assessing the provided information about the two companies and looking deeply at some of the financial data, it was concluded that company 1 is designated by the letter H and company 2 is designated by the letter G in Exhibit 1 (see appendix 1). Investigating the financial data, it was found that Company 1 (H) had a higher inventories account of 38. 6 this supports the fact that it is a traditional book store that needed to keep book inventories at all times to maintain its retail presence. This is further seen in its inventory turnover, is has a lower turnover of 2. 2x this reflects the nature of the company which traditional book retailer that experience slow turnover. Moreover, company 1 (H) has an 11. 1 in intangible assets, again this reflects the companies intangible assets such as publishing imprints. Also, company 1 (H) owns about 24. 4 in fixed assets as a results of its vast retail network. For company 2 (G), inventory account is much lower than company one (14. 8) this reflects the fact that company 2 is online based business that sells mostly digital products such as media along with few other general electronics and merchandise.

Thus, its inventory turnover is much higher (13. 56x) correspondent to the nature of most of the sold product (digital media) that are highly demanded and easily accessible. Regarding its fixed assets account, company 2 (b) has lower fixed assets of 7. 6 this mainly reflects the activities related to electronics and other merchandise that probably requires some fixed assets, but for its E-commerce, it needs minimal- none fixed assets. Considering the type of this business (online based) it was noticed that its receivables account is very minimal compared to company 1.

This is probably due to the fact that online products are delivered upon payment, thus it is rare to purchase music on credit. Assessing some of the income statements components, depreciation is recognized to be low (1. 1) this is highly related to its low fixed assets. Last but not least, SG& A expenses of 16. 9 is lower than company 1 , this is logical because company 1 depends on a network of retailers that impose higher general and administrative expenses while company 2 depends solely on its o0nline channel. Finally, net profit of 8. 5 (which is higher than company 1) indicates the mentioned recent profitability.

Newspapers Information provided: Company 1 1. Centered largely on one product 2. Fierce competition 3. Recently built a large office building for its headquarters. 4. international Company 2 1. Owns a number of local newspapers 2. Has a significant amount of goodwill 3. Recent acquisitions 4. Decentralized decision making and administration Taking a closer look to the provided data, it was concluded that company 1 is designated by letter P and company 2 is designated by letter O (see Exhibit 1) this selection was based on a number of factors: company 1 (P) have more receivables ( 9. ) than company 2 O, this is due to the fact that company 1 (P) operates on a larger, international scale than company 2, this larger customer base requires better and more receivable terms. Whereas company 2 , which operates on a smaller local level has lower receivables of 4. 6. Company 1 (P) has almost the double in fixed assets account t in company 2 (o) (34. 6, 14. 1) explaining the new purchase of the headquarter building by company (p). Assessing the intangibles account of both companies, it was noticed that company 2 (O) enjoys a high level of goodwill (76. ) while company 1 (P) has far less intangibles of 37. 1. Evaluating company’s 1 (p) focused and centralized strategy of producing and distributing one newspaper internationally, it was noted that this focus led to a decreased cost of goods sold (cost/ unit is inexpensive) this is evidenced in the lower COGS of 40. 5 compared to 49. 7 in company 2 (o). moreover, company’s 1 (P) Debt/ asset ratio is higher than company 2 (O) ( 26. 81 compared to 15. 2) this indicated that it is more cost efficient for company 1 that operates internationally to finance its strategy implementation by using more debt than equity. This boosted the ROE of company 1 to reach 20. 89 relative to a lower ROE of company 2 (9. 86) which follow a more conservative financing mix. As a final point, looking at the SG&A expenses, it was observed that company 1 (P) has higher admin expenses due to its strategy of operating internationally while company 2 enjoyed less Admin expenses due to its local strategy ( 39. 7 compared to 23 ).

Calculate the price
Make an order in advance and get the best price
Pages (550 words)
$0.00
*Price with a welcome 15% discount applied.
Pro tip: If you want to save more money and pay the lowest price, you need to set a more extended deadline.
We know how difficult it is to be a student these days. That's why our prices are one of the most affordable on the market, and there are no hidden fees.

Instead, we offer bonuses, discounts, and free services to make your experience outstanding.
How it works
Receive a 100% original paper that will pass Turnitin from a top essay writing service
step 1
Upload your instructions
Fill out the order form and provide paper details. You can even attach screenshots or add additional instructions later. If something is not clear or missing, the writer will contact you for clarification.
Pro service tips
How to get the most out of your experience with MyhomeworkGeeks
One writer throughout the entire course
If you like the writer, you can hire them again. Just copy & paste their ID on the order form ("Preferred Writer's ID" field). This way, your vocabulary will be uniform, and the writer will be aware of your needs.
The same paper from different writers
You can order essay or any other work from two different writers to choose the best one or give another version to a friend. This can be done through the add-on "Same paper from another writer."
Copy of sources used by the writer
Our college essay writers work with ScienceDirect and other databases. They can send you articles or materials used in PDF or through screenshots. Just tick the "Copy of sources" field on the order form.
Testimonials
See why 20k+ students have chosen us as their sole writing assistance provider
Check out the latest reviews and opinions submitted by real customers worldwide and make an informed decision.
Business and administrative studies
always perfect work and always completed early
Customer 452773, February 21st, 2023
Business and administrative studies
excellent job thank you Your Score 166.25/ 175- A 1. Current Culture 15% of total grade 18.37 Criterion "1. Current Culture" has textual feedback Criterion Feedback I see interesting points, though, in general they are not about the culture.
Customer 452773, June 4th, 2023
Humanities
Thank youuuu
Customer 452729, May 30th, 2021
Business and administrative studies
Thank you for your hard work and effort. Made a 96 out of 125 points Lacked information from the rubic
Customer 452773, October 27th, 2023
10th grade English
very good
Customer 452773, March 26th, 2023
Human Resources Management (HRM)
excellent
Customer 452773, July 11th, 2023
Leadership Studies
awesome work as always
Customer 452773, August 19th, 2023
Business and administrative studies
excellent job! got an A, thank you
Customer 452773, May 24th, 2023
ACC543MANAGERIALACCOUNTINGANDLEGALASPECTS
excellent
Customer 452773, January 25th, 2024
English 101
great summery in terms of the time given. it lacks a bit of clarity but otherwise perfect.
Customer 452747, June 9th, 2021
Business and administrative studies
great job as always
Customer 452773, February 26th, 2023
Business and administrative studies
Perfect
Customer 452773, February 23rd, 2023
11,595
Customer reviews in total
96%
Current satisfaction rate
3 pages
Average paper length
37%
Customers referred by a friend
OUR GIFT TO YOU
15% OFF your first order
Use a coupon FIRST15 and enjoy expert help with any task at the most affordable price.
Claim my 15% OFF Order in Chat
Close

Sometimes it is hard to do all the work on your own

Let us help you get a good grade on your paper. Get professional help and free up your time for more important courses. Let us handle your;

  • Dissertations and Thesis
  • Essays
  • All Assignments

  • Research papers
  • Terms Papers
  • Online Classes
Live ChatWhatsApp