MM 5007

FINANCIAL MANAGEMENT
THE FINANCIAL DETECTIVE, 2005 CASE


By:
Amalia Nur Intan I. 29113317
Dyta 29113477
Devin 29113491
Hanna 29113521

Young Professional 50B
Semester I 2014/2015


Lecturer :
Taufik Faturohman, PhD




MASTER OF BUSINESS ADMINISTRATION
SCHOOL OF BUSINESS AND MANAGEMENT
INSTITUT TEKNOLOGI BANDUNG
2014
I. Introduction
Each industry has a financial norm around which companies within the industry tend
to operate. Companies have different financial characteristics, in part because of the diverse
strategies that can be employed. Strategies typically entail making important choices in
how a product is made, how it is marketed, and how the company is financed. Strategies
among companies in the same industry can differ dramatically. Different strategies can
produce stringking differences in financial result for firms in the same industry.
II. Analysis
Health Products
This proves that Company A has cash on hand from the sale of side divisions and
that they have a large production facility. Company B is a more diverse company in
terms of production, which has a larger value for assets in Intangibles such as patents, so
consumer can identify the product. Company A has inventory more than company B,
because company A is manufactures andd mass markets a broad line of prescription
pharmaceuticals. Company B has a value for the cash ratio and short term investments
are actually smaller than shown because much of that money is earmarked for deferred
taxes. A value Cash & Short Term Investments, Intagibles and Inventories Company A
(24.2, 22.2, 7.0) and for Company B (16.1, 46.1, 5.4).

Beer
Company C has higher inventories and Net income which is 4.3 and 15.0, because
Company C is a national brewer of mass-market. Company D has higher value for Gross
Profit better than C because a Company C can produces product for seasonal and year-
round with smaller production volume and higher price. 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. 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.

Computers
From financial data and ratios, Company E has lower value of price per earnings
than Company F which is 30,48 and 41,85. Since we know that one company focuses
exclusively on mail-order sales of built-to-order PCs, including dekstops, laptops,
notebooks, servers, workstations, printers, and handheld devices, it makes the product
price become high, because the customers can order custom PC based on their needs.
Otherwise, to produce built-to-order products, the company doesnt need to have long-
term debt, because they only need the debt if there are orders from customers. We can
see that LT debt of Company F is 0, while LT debt of Company E is 2,2. The company
which sells a highly differentiable line of computers, consumer-oriented electronic
devices, and a variety of proprietary software products usually has more inventories than
the other company, so that affects the account payable of the company. Company E has
higher account payable than Company F which is 38,3 and 18,0. Based on that some
values on financial data and ratios, we can conclude that Company E is the company
which sells the computers, electronic devices, and software products. Whereas Company
F is the company which sells built-to-order PCs.

Books and Music
One company focuses on selling primarily to customers through a vast retail-store
presence with community store concept and regular discount policy, while the other
company sells books, music, and videos solely through its Internet Website. That makes
the first company must have a building as the store and it means they have more assets
than the second company. From the financial data and ratios, we can see the value of
current assets-total Company G is higher than Company H which is 78,2 and 59,7.
Otherwise, gross profit of Company G is lower than Company H which is 24,2 and 30,5,
while Company G has more net income than Company H. Based on that some values on
financial data and ratios, we can say that the gross profit of Company G is low because
they utilize regular discount policy. However the policy can stimulate and attract the
customers to do a large purchases, so it can make the net income for the company
become high. So, Company G is the leader in traditional book retailing, and Company H
is the online book and music business.