The Financial Detective Case Study

Financial detective case study

The Financial detective case study is a case where it compares multiple companies to each other with their financials and brief explanation of accounts. The two most prominent drivers are industry economics and firm strategy. In this case it is up to us to match the financial data with the company descriptions. Also to try and explain the differences in financial results across all industries.

Health Care Products

The first two products we are comparing are health care products. Product A is a manufacturer and mass marketer of over the counter products. Similar to Johnson and Johnson. Product B is the largest prescription pharmaceutical. Which has a large research budget and very particular with licensing products. I have come to this assumption based on product A having more current assets. It’s a larger company with less intangibles. This company has a better turnover ratio per more wide spread audience, anyone can buy these products. Product B has much less cost of goods sold per larger company more intangibles, which coincides with licensing deals. Product B has larger debt to income for research and investments.

Beer

Then we have beer products that we are comparing. Product C is a national brewer of mass-market products. They operate extensive breweries as well as distribution systems. They are also owners of multiple businesses and theme parks. This is easily comparable to Anheuser-Busch company. Product D is a more seasonal and year round beers. They have a smaller production volume and higher prices. Product D is an outsourcing brewing as well as cost saving in packaging and freight costs. Similar to Summer Shandy. I have come to this conclusion based on the financials where product C has a lot of fixed assets per has more property than product D. C has higher debt and liabilities than product D, as well as higher cost of goods sold. There is less advertising expense associated with product C because a more well known company. This company has a greater return on equity. Where product D has a lot of at hand assets, similar to cash and inventory. This company invested with equity instead of debt. Zero debt to assets.

Computers

The two computer companies we are comparing are product E and product F. Product E is a built to order company. Assembler of computers from suppliers. The customer were to build, design, and price their own computers online. Comparable to Dell Inc. Product F is a consumer oriented electronic device and software products. Aggressive retail strategy. This is said from Product E having low advertising expense per made to order. With much greater return on equity. Where product F has a higher stockholder equity. As well as price to book is undervalued per the recent decline in market. Great time to buy.