solution

Unidentified Industries

Use the following information to answer the next two questions.

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Company A Company B Company C
Assets
Cash and marketable securities 45% 7% 12%
Accounts receivable 8 8 6
Inventories 0 12 2
Other current assets 0 16 5
Plant & equipment (net) 17 15 60
Other assets 27 42 15
Total assets 100% 100% 100%
Liabilities and Net Worth
Accounts payable 2% 7% 2%
Accrued items 3 5 15
Other current liabilities 11 23 12
Long-term debt 16 11 30
Other liabilities 3 35 11
Preferred stock 0 0 0
Common stock 65 19 29
Total liabilities and net worth 100% 100% 100%
Selected Financial Data
Current assets/current liabilities 3.5 1.2 0.8
Cash, MS and ARs/current liabilities 3.3 0.8 0.6
Inventory turnover (X) NA 2.9 87.3
Receivables collection period (days) 53.8 63.1 5.4
Total debt/total assets 0.189 0.457 0.413
Long-term debt/capitalization 0.195 0.447 0.493
Revenue/total assets 0.47 0.50 2.11
Net profit/revenue -0.064 0.021 0.053
Net profit/total assets -0.007 0.02 0.117
Total assets/net worth 1.55 5.12 3.45
Net profit/net worth -0.049 0.055 0.277
EBIT/interest expense NA 4.8 37.5
EBITDA/revenue 0.115 0.135 0.141

1. The preceding table gives balance sheet percentages and selected financial data for three companies in very different industries – food and beverage, manufacturing, and social networking. Make three observations in each section – Assets, Liabilities and Net Worth, and Selected Financial Data – that you think are interesting. Describe what you think is going on.

REMEMBER:Each question in the Capstone must be answered in order. Once you click “Submit” to move to the next question, your answer is final and cannot be changed.

 
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