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PMD59

The case of unidentified US industries

Cat: ECO
Pub: 1990
#1524b
Colyer Crum (PMD59)
up 15924
Title

The case of unidentified US industries

米国産業の財務ケース

Index
Tag
 
Résumé
Remarks
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0. Financial Statements of US industries:

Balance Sheet % A B C D E F G H I J K L
Cash & marketable securities 4.0 7.6 5.1 15.7 4.1 0.5 8.5 4.3 3.2 5.4 17.1 38.6
Receivables 3.9 8.6 16.4 26.8 21.5 3.8 13.7 5.4 27.6 13.0 72.1 59.2
Inventories - 24.9 11.0 23.2 61.0 2.1 22.7 39.3 49.2 - - -
Other current assets 0.9 3.5 - 1.2 0.2 2.6 1.6 2.4 1.6 2.5 0.8 -
Plant & equipment (net) 78.7 44.6 49.5 33.4 10.9 90.0 45.4 44.1 17.1 73.9 7.4 1.1
Other assets 12.5 10.8 18.0 0.7 2.3 0.9 8.1 4.5 1.3 5.2 2.7 1.1
□Total assets 100 100 100 100 100 100 100 100 100 100 100 100
Note payable - - 12.8 - 5.1 3.1 0.8 5.2 2.0 - - -
Accounts payable 2.9 23.9 5.3 29.3 12.6 2.6 10.0 25.3 10.5 8.3 50.3 84.4
Accrued taxes 2.6 3.6 1.9 1.4 6.6 1.4 2.7 2.4 3.1 - - -
Other current liabilities 0.6 4.9 5.7 - 1.2 2.6 12.0 10.4 5.8 7.7 2.6 -
Long-term debt 35.2 3.4 30.4 1.7 5.8 43.3 25.6 3.8 20.6 45.6 3.3 1.6
Other liabilities 3.8 6.4 - 1.6 1.0 1.8 7.5 8.2 - 10.9 1.0 5.9
Preferred stock - - - - 2.2 9.4 4.9 - 0.1 - - -
Capital sock & capital surplus 16.7 6.8 27.8 9.4 31.0 25.3 11.9 12.0 17.4 8.4 6.8 5.1
Retained earnings & surplus reserves 38.2 50.0 16.1 56.6 34.5 10.5 24.6 32.7 40.5 19.1 36.0 3.0
□Total Liabilities & Stockholder Equity 100 100 100 100 100 100 100 100 100 100 100 100
Selected Ratios                        
Current assets/current liabilities 1.45 1.38 1.25 2.06 3.41 0.92 1.85 1.19 3.81 1.29 1.44 -
Cash, marketable securities, & receivables/current liabilities 0.96 0.50 1.20 1.32 1.62 0.44 0.33 0.22 1.44 1.13 1.24  
Inventory turnover % - 6.4 6.0 23.0 2.1 - 8.8 12.8 3.1 - - -
Receivables collection period (days) 20 19 64 18 64 44 30 4 66 69 42 -
Total debt/total assets 0.41 0.36 0.57 0.34 0.31 0.53 0.51 0.47 0.42 0.62 0.66 0.92
Long-term debt/capitalization 0.40 0.06 0.43 0.03 0.08 0.49 0.38 0.08 0.26 0.63 0.09 0.19
Net sales/total assets 0.32 1.61 0.69 5.40 1.30 0.32 1.65 5.03 1.51 0.69 5.33 0.06
Net profits/total assets 0.05 0.06 0.06 0.08 0.09 0.05 0.08 0.06 0.07 0.03 0.08 0.01
Net profits/total net worth 0.10 0.11 0.14 0.12 0.12 0.11 0.21 0.13 0.11 0.10 0.24 0.11
Net profits/net sales 0.17 0.04 0.08 0.02 0.07 0.15 0.05 0.01 0.04 0.04 0.02 0.13
  電力
ガス
百貨店 自動車 食肉加工 宝飾 鉄道 化学 スーパー 繊維 航空 広告 銀行
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1. Features of each industry:

  Industries Pattern of Asset Use Sources of Financing Operating Characteristics
G Dow Chemical high fixed assets moderate inv./rec., some affiliation high equity mied short & long term financing stable CF high profitability rel. high inv. turnover
A Baltimore Gas & Electric Utility capital intensive, some affiliation long term financing low gearing strong equity cash business low receivable turnover rel. low ROA, regulated ind.
H Kroger;
Supermarket Chain
high inventory, fixed assets short term financing equity cash bus./hi inv. turnover, short receivable cycle
I Hart Schaffer & Marx; Maker of Men's Apparel inventory receivable, some fixed assets medium gearing equity/ret. earnings high turnover
D Hormel; Meat Packer cash inventory/receiv., plant & equipment accounts payable, high equity high sales/assets ratio, high ROE, high turnover
E Zale Jewelry; Retail Jewelry Chain high inventory, some receivables mostly equity rel. low turnover, high ROA
F Norfork & Western; Coal Carrying Railroad heavy investment, some inv./receivab. due to coal bus long term debt, mixed equity rel. low ROA
C Ford Motor Company
high fixed assets, high receivables, some inv., invest. long term financing, equity, some notes high turnover, medium sales to cash cycle
B Macy Department; Large Department Store high inventory, lower receivables, higher fixed assets accounts payable, equity with high retained earnings short receiv. coll, period mostly cash business
K Doyle Dane & Bernbach; Advertising Agency no inventory, high receivables, low fixed assets accounts payable equity high sales/assets ratio, assets are the people high ROE
J American Airlines capital intensive, no inv. hi receiv. highly leveraged rel. long cash cycle
L Continental Bank & Trust; Commercial Bank cash/receivables securities acc. payable, very low equity high liquidity, low S/A ratio, interest rev.
  • Kroger, Male and May have all undergone LBO or leverage buyout transactions since the date of the financial statements and now look very different.
  • The real world often has unusual or aberrant facts. E.g.., the airline show a collection period of 69 days very hard to explain; this included some obsolete airplanes that had been sold on a deferred payment basis and which for the simplified accounts of this exercise were included in A/R.
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2. Comment:

  • Despite variations in operational and financial policies and practices and in operating results between firms in the same industry, the nature for funds (asset allocation), the methods of meeting these needs, and the financial results of most firms in the industry.
  • Presented in Exhibit 1 are balance, sheets, in percentage form, and selected ratios drawn from the balance sheets and operating statements of 12 different firms in 12 different industries.
  • Recognizing the fact of certain differences between firms in the same industry, each firm whose figures are summarized is broadly typical of those in its industry.
  • See if you can identify the industry represented. Then be prepared as bet you can to explain the distinctive asset structures and ratios of each industry

2. 建設費高騰の背景と仕組:

  • 財務方針や運用実績、結果の違いが同一産業でもあり得るが、資金調達、資金需要、その結果は、同一産業の多くの企業に共通点がある。
  • 上記は貸借対照表(%表示)および12の企業のBSやPLから抽出した代表的な財務指標である。
  • 同一産業内で若干違いがあるものの、広義では各産業の特徴を認めることができる。
  • どの産業を表しているかに留意し、その顕著な構造や指標に注目すべきである。
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3. Lessons:

  • In the economic growing period, staff who has high processing capacity has been appreciated; simple increase of sales leads to increase of profit (Economics of scale)
  • But in the changing age, selection, withdrawal, and concentration are getting more important. In establishing stragey; which markets, products & services should be selected or withdrawn, the financial analysis and forecast of each business division or project is getting essential.
  • The trend of globalization makes these situations more difficult due to more business opportunities, market possibilities, advent of desructive technologies and supply of multinational capable and challenging personnels, and etc.

3. Gross income:

  • 経済成長期は、処理能力の高いスタッフが評価されてきた。売上の伸びは利益の伸びであった。(規模の経済)
  • 変化の時代では、選択、撤退、集中が一層重要になってくる。どの市場、製品サービスを選択し、あるいは徹底する上での戦略立案に際しては、業務分野毎、プロジェクト毎の財務分析と予測が重要となる。
  • グローバリゼーションはこれらの事情を更に難しくしている。より多くのビジネス機会、市場の可能性、破壊的な技術の登場、他国籍にやる気のある人材等。
Comment
  • The materials of PMD-59 (1990) was probably made based on latter half of 1980s data, whch seem a golden age of both US and Japanese capitalism.
  • The data belongs classical ones, but is a typical and suggestive even in 21C.
  • PMD59のケース資料はおそらく1980年代後半のデータに基づいて作成されている。その時期は日米の資本主義のゴールデンエイジだったように思える。
  • データはもはや古典に属するが、それは典型的なものであり21世紀の現在でも示唆的である。

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