Identify the Industry—Analysis of Financial Statement Data Essay

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Pages: 8
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A01-14-0012

Graeme Rankine

Identify the Industry—Analysis of Financial Statement Data
Since companies in the same industry face similar opportunities and constraints, they tend to make similar invest- ment, dividend, and financing decisions. Thus, the financial characteristics of firms in the same industry tend to cluster together. For example, old economy businesses with large amounts of tangible assets may have higher leverage ratios because such assets provide good collateral for lenders. Service or trading firms may have large amounts of intangible assets such as knowledge assets or a large and loyal customer base, and, hence, have low leverage ratios because growth options can devalue quickly. On the other hand, …show more content…
Common-Sized Balanc
ASSETS e Sheet
1 (all item
2 s scaled
3 by total
4 assets)
5

6

7

8

9
Cash & Short-Term Investments 1.4% 8.7% 21.4% 17.4% 51.9% 16.6% 10.4% 3.6% 2.8%
Net Receivables 4.8% 14.2% 4.7% 11.8% 12.2% 1.9% 55.1% 3.2% 10.6%
Inventories 0.4% 21.6% 5.3% 7.6% 1.3% 2.4% 3.0% 21.5% 4.5%
Prepaid Expenses 0.4% 3.7% 0.0% #VALUE! 0.0% #VALUE! 0.0% #VALUE! 0.0%
Other Current Assets 1.4% 3.0% 4.8% 2.3% 3.8% 2.5% #VALUE! 1.0% 1.6%
Total Current Assets 8.4% 51.2% 36.1% 39.1% 69.2% 23.3% 68.5% 29.3% 19.5%
Gross Plant, Property & Equipment 98.2% 25.7% 79.8% 43.7% 15.9% 104.8% #VALUE! 85.0% 122.3%
Accumulated Depreciation -58.3% -13.5% -46.3% -21.0% -8.8% -36.5% #VALUE! -27.3% -54.6%
Net Plant, Property & Equipment 40.0% 12.2% 33.5% 22.7% 7.1% 68.3% 0.8% 57.7% 67.7%
Investments at Equity 1.5% #VALUE! 1.5% #VALUE! #VALUE! 0.0% 0.7% #VALUE! 8.4%
Other Investments #VALUE! #VALUE! 7.8% 17.3% 8.0% 0.3% 22.2% 0.0% 2.0%
Intangibles 47.6% 34.7% 19.2% 13.8% 14.0% 6.0% 3.3% 10.1% #VALUE!
Deferred Charges 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% #VALUE! #VALUE! 0.0%
Other Assets 2.6% 1.9% 1.9% 7.0% 1.6% 2.1% #VALUE! 2.9% 2.4%
TOTAL ASSETS 100.0% 100.0%
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