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The Financial Detective

Satisfactory Essays

The Financial Detective
Kyle Cornelius

This case set contains information for two separate companies in eight different industries. Our task is to differentiate the companies based on what we know about them from a qualitative stand point and the financial data that we are provided.

The first one we will examine is in the healthcare field. One firm develops and manufactures prescription drugs and sells them to healthcare professionals directly using sales people. They have several unique patents and pursue an aggressive research and development strategy. The other manufactures non-prescription drugs, toiletries, and baby products for the mass-market. They use distributors and retailers to get their products in the hands of …show more content…

Note that Firm F also aims to have a broad product line, when examining these numbers, one can speculate that more of their products are made to specific client specifications, thereby increasing the proclivity for on-demand-manufacturing, while Firm E sells lower end computers to the consumer market and has a more uniform product line. The liabilities of Firm E is lower than that of Firm F. This tells us that because F is an established industry leading firm, they are able to take on more liabilities than Firm E. Based on this we conclude that Firm E is the one that aims for low cost, high volume consumer computers while Firm F manufactures computers for businesses and aims to be a quality leader of the industry. The fourth case focuses on firms in the field of retail. One firm is a large national chain that sells a large variety of products and sells largely on credit. The other is a rapidly growing chain of home improvement stores set up in a warehouse style that sells goods at a low price and tries to gain as much market share as possible and enjoy high unit sales volume. Firm G has much higher receivables than Firm H. (60.7 to 4.4) This would indicate that Firm G is the one that sells largely on credit. Firm G has lower inventory than Firm H. (12.2 to 29.7) This would

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