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Chapter 13 Finameial Statement Analesis 391
Case 13-3
Identify the Industries*
Common-sized balance sheets of 12 firms are presented
in the following pages, along with some useful ratios
(see Exhibit 1, page 392). These companies were cho-
sen because they consist of primarily one major busi-
ness segment and the relationships between balance
sheet items, profit, and operations are fairly typical of
these industries. The companies involved are
+ Regional bank
+ Temporary office personnel agency
+ For-profit hospital chain
+ Warchouse club
* Copyright © by the President and Fellows of Harvard Busi-
ness College. Harvard Business School case 198-017.
+ Major passenger airline
+ Major regional utility company
+ Manufacturer of oral, personal, and household care
products
+ Hotel chain
+ Upscale department store chain
+ Discount department store chain
+ International oil company
* Defense contractor
The financial statement dates are noted at the top of
each column. Use the ratios, common-sized state-
ments, and your knowledge of business operations and
conditions at the time these data were generated to
identify the companies.EXHIBIT 1 For Case 13-3
zoe
jun Dec Dec jan Dec jan. --dDec:=—~Dec_=| «Dec:=— «Dec: (Dec Sep
Fiscal Year End A B c D E F G H 1 J K L
Cash and marketable securities 13.5 24 24 09 «3270 (0.20 «13434 02 12 177 21
Receivables 79 94 7.6 327 63,123 72 146 60 13-4 0 55428
Inventories - 378 «= «6.2229 AG 05 101 16 «200 = 30.6
Other current assets $4 43 _34 250 = W 24 28 16 4.5 46 _18
Total current assets, 268 9536 19.0 59.0 958 46.2 235 30.9 94 Dl 77 373
Plant and equipment 55.6 161 71.72 404 V8 503 $54 282 81.1 49.07 S88
investments 6.0 19 6200 = - — 1940 = 07° 105 — —
Goodwi 2200 282 = - 03 — 359 = 17.6 77 10
Other noncurrent assets 94 27 _ 3a 0.6 2H i 23S, 17 _5.0 8.8 18 29 29
Total noncurrent assets 732 a64 81.0 “410 42 538 765 69.1 (90.6 78.9 22.3 _62.7
Total Assets 700.0 700.0 100.0 700.0 100.0 700.0 100.0 100.0 100.0 100.0 100.0 100.0
Accounts payable 126 106 9.3 101 847 172 100 97 37 42 74 253
Notes payable = 12200 «1.9 BS 60 6.5 27 3500 - 1.2
Current portion of L/T debt 08 01 os 27 = 09 7A 05 28 10 0.2
Unearned revenues n6é 350 = = = - — = ~ = —
Other current lia 48 itd 88 94 09 59 04 10.1 52 _84 263 _9.4
Total current liabl 28 375 205 304 916 30.5 175 230 152 138 33:7 36.1
UT debt 78 151 85 134 05 350 39.20 318359 25.0
Other noncurrent li 305 38 26.7 4d = 65 159 200 145° — 27
Total liabilities 78.1 364 55.7 47.9 92.1 590 781 670 «64.2 33,7 63.8
Preferred stock moo @1) = — - ~ 53 590 = = —
Common stock 1.8 24 3.2 6.2 03 06 42 24 12 0.0 55 0.0
‘Additional paid-in capital 215 260 — — 30 «15 — 135 188 226 10 6.6
Retained earnings (1.0) 385 58.6 47.7 45° 38300 417313 71 129 606 31d
Adjustments to
retained earnings 10001 Wo = or Ga) 2) 7 = 030 = (1s)
‘Treasury stock 5) = 89) 0.8) as (4.7) (8.9) _= — (0.8) mae
Total stockholders’ equity 219 «436 44.3521 79 “303 “41.0 21.9 330 35.8 66.3 36.2
Total Liabilities &
Stockholders’ Equity 100.0 100,0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Selected Ratios
‘Current ratic 090 143 092 194 105 151 1.34 134 0.62 1,532.31 1.08
laventory turns (X) NM. 25 89 45 NM 5.0 NM. 58 26 NM NM 11.9
Receivables collection period 28 29 2 79° NM. 3 31 49 49 55 54 3
Net sales/Total assets 1019 1.191 1.357 1.505 0.066 2.524 0.539 1.094 0.447 0.890 3.741 3.983
Net profits/Net sales 0.053 0.068 0.052 0.040 (0.171 0.029 0.105 0.021 0.069 0.060 0.026 0.013
Net profits/Total assets 0.054 0.080 0.071 0,060 0.011 0.073 0.057 0.023 0.031 0.053 0.096 0.051
Net profits/Net worth 0.217 0.185 0.160 0.116 0.144 0.186 0.138 0.102 0.113 0.147 0.145 0.140
“Adjustments to x
ined earnings consi pri
