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Assignment: Balance Sheet and Fundamental Industries

 Assignment: «balance sheet» and Simple Industries Article

Harvard Business School

9-197-010

Add some opuch. May 31, 1997

Initially Investments, Inc.: Analysis of Financial Statements

In March 1995, Fred Aldrich, a summer time trainee with all the First Investments, Inc., was called into the office of the brain of purchase analysis part of the trust department. The subsequent conversation came about: Fred, allow me to share the 1994, 1993, and 1985 Standard Industries Company's financials (Exhibit 1) and a 10-year summary (Exhibit 2 ). Our trust department offers owned this kind of stock since the early 1980s. As you know, the portfolio persons place a wide range of emphasis on the quality of a industry’s earnings as well as the return in owners' fairness in making inventory selections. Well, they are worried. The 1994 Basic Sectors annual survey shows a decline in the return about owners' collateral. Now, they really want us to comment on how that the organization has achieved its go back on collateral over the last ten years, starting with 85. I would like you to prepare this kind of analysis. Make sure you forget the hit years of 1989 and 1990. Also, pay attention to what happened in the 1993-1994 period. I hope the analysis will include a direct comparison of the quality of 1985 and year 1994 returns upon stockholders' value and the additional key economical ratios for these two years. Finally, you should know the company has not changed its accounting policies and practices materially over the last 10 years. The only improvements have been as a result of new standards issued by the FASB, require have not materially distorted acceptable data. Simple Industries is a diversified multinational corporation with major shares in various electrical related markets.

Questions

1 ) Complete the assignment given to Fred Aldrich.

Professor David F. Hawkins prepared this situatio as the foundation for class discussion rather than to illustrate both effective or ineffective managing of an administrative situation. Copyright © mil novecentos e noventa e seis by the Director and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685 or create Harvard Business School Publishing, Boston, MUM 02163. Not any part of this publication could possibly be reproduced, kept in a retrieval system, utilized in a schedule, or sent in any type or by simply any means—electronic, mechanical, copying, recording, or otherwise—without the permi ssion of Harvard Business Institution.

1

197-010

First Opportunities, Inc.: Examination of Financial Transactions

Exhibit you Basic Industrial sectors Company and Consolidated Affiliate marketers: Statement of Current and Retained Profits (as reported) for the many years movement 1994, 93, and 85 (in millions) 1994 Sales of products and services to customers Functioning costs: Staff compensation, which include benefits Supplies, supplies, companies, and other costs Depreciation Fees, except these on income Increase in stocks during the year Operating margin Various other income Interest and other financial charges Revenue before taxes and community interest Supply for taxes Minority involvement in earnings of consolidated affiliate marketers Net profits applicable to common share Dividends reported Amount added to retained income Retained earnings at January 1 Retained earnings in December 31 $13, 413. 1 1993 $11, 575. 3 85 $6, 213. 6

money 5, 332. 0 six, 966. six 376. a couple of 123. zero (270. 8) $12, 418. 1 money 995. 0 185. almost eight (180. 1)

$ 5, 709. six 5, 690. 5 334. 0 113. 5 (227. 2) $10, 620. your five $ 954. 8 183. 7 (126. 9)

$ 2, 440. 8 several, 063. four 188. 4 51. 6th (176. 1) $5, 568. 1 dollar 645. 5 72. one particular (27. 4) $ 690. 2 (352. 2) 17. 1 bucks 355. you (216. 7) $ 138. 4 you, 246. 0 $1, 384. 4

bucks 1, 000. 7 (382. 4) (10. 2) $ $ 608. 1 (291. 2) 316. 9 2, 683. 6th

$ 1, 011. 6 (418. 7) (7. 8) $ bucks 585. you (272. 9) 312. a couple of 2, 371. 4

dollar 3, 500. 5

$ 2, 683. 6

Simple Industries Company and Consolidated Affiliates: Affirmation of Financial Location (as reported) December thirty-one, 1994, 93, 1985 (in millions) year 1994 Assets Money Marketable investments Current receivables Inventories Current assets opportunities Plant and equipment Other assets Total assets money 314. your five 57. 3 2, 593. 8 a couple of, 257. 0 $5, 222. 6 1, 004. almost eight...

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