P Bread

769 Words Nov 1st, 2014 4 Pages
Company A of Health Products industry fits the first set of descriptions of world’s largest prescription-pharmaceutical company with very broad and deep pipeline of ethical pharmaceuticals, supported by a robust research and development budget; it has divested several of its non-pharmaceutical businesses. While Company B fits the second set of descriptions i.e. diversified health-products Company that manufactures and mass markets a broad line of prescription pharmaceuticals; brand development and management are a major element of the firm’s mass-market-oriented strategy. Johnson and Johnson is the company that it mentions.

Health Products

Cash and short-term investment for Company A (24.2%) is higher than Company B (16.1%). A is
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Company A is lower (76.1%) due to its limited product range (only manufactures drugs).

Beer
Company C fits the first set of description, and Company D fits the second set of description. Company D has higher current ratio and quick ratio, which is higher 2.43x and 2.3x respectively. This was because Company D had higher cash and short-term investment, which was 55.6% while Company C, only has 1.4%. It proves that Company D is financially conservative and it matches with the second described company.

Beside that, Company D keep more stock which is 11.9% compare with Company C 4.3% because their company produces seasonal and year round beers with smaller production volume and their beers’ demand is not whole year long. Hence slower sales in Company D will have lower inventory turnover with higher inventory.

There was no dividend payout for Company D whereas the Company C they have high dividend payout ratio due to stable product sales which not affected by the seasonal event. The goodwill for Company C is higher than Company D of about 6.1%, this may be due to the Company C is a national brewer of mass market consumer beers sold under a variety of brand names, so the Company C can match with the first described company.

The fixed asset turnover for Company C and…

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