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Firm B
One manufactured pharmaceuticals and a variety of low-margin hospital
supplies, and both product lines were marketed primarily through direct
sales to doctors and hospitals. The firm had recently acquired a large
hospital supply company and therefore had significant goodwill on its

Firm A
The other firm manufactured and nationally mass-marketed a broad line
of name-brand toiletries, nonprescription drugs, and consumer and baby-
care products, through 165 decentralized subsidiaries.
Reasons :

1. Company A has higher Tangible Assets than company B. As a company

who produce multi products that is sold nationally, the company needs a
lot of assets.
2. Company A has higher SG&A and R&D Expenses than company B. The
reason is because company A manufacture multi products that is
produced massively.
3. Company A has higher Inventory Turnover than company B. As a big
company that supplies its product nationally in massive amount, the
company needs to stock their product in order to fulfill any needs.
4. Company B has less Gross Profit thanCompany A which leads Company
B’s margin is less than Company A’s margin.
Firm C
One focused on marketing high-quality washers, dryers, dishwashers, and
refrigerators under its own name.

The other company attempted to segment the market for the same
products by selling under its own name and under three other brand
names. The second firm had a contract to sell one brand solely as a
private-label item through a large department-store chain.
Reasons :

1. Company D has higher Asset than Company C. Producing a large amount

of product should be provided by a large amount of asset too.
2. Company D has higher Receivables Turnover than Company C; Having
some brand partners probably resulting high receivables turnover.
Firm E
Supercomputer systems for scientific applications. Most of these
computers were used for physical research such as that related to
weather, energy, and defense. Although the output of these units was
relatively small, the price tag was the highest in the industry.

Firm F
The other firm manufactured large main-frame computers and had an
emerging position in the supercomputer segment; it also developed and
marketed related software and provided financial and insurance services
as well. Computer and software sales were responsible for about two-
thirds of the company’s revenues, and financial services for the remaining

1. Company E has higher COGS than Company F. The reason is because

Company E requires a greater cost in purchasing, since Company E
produce more-advance product than what Company F produce.
2. Company F expense higher R&D costtahn Company E, because Company
F needs more research than Company E.
Firm H
One company was a large, national chain of department stores that sold
largely on credit everything from automotive equipment and services to
clothing and household items, through its (primarily) leased properties. It
also marketed its products through a catalogue and provided a variety of
financial services. Merchandise sales were responsible for about 60
percent of revenues, and insurance sales for about 32 percent.

Firm G
The other firm was a rapidly growing chain of discount department stores
and wholesale clubs that owned a large portion of its outlets. As a
discounter, it provided little or no credit to customers.

1. Company G has less Receivables than Company H because Company G

clearly stated to not fasilitate any credit.
Firm I
One specialized in their manufacture and also produced small desk-top
and hand-held computing equipment. About half its electronic
components were sold to the defense industry.

Firm J
The other firm was financially conservative. It specialized in radio and
television equipment and made semiconductors as a secondary, but
increasingly important, line of business (over 30 percent of revenues).

1. Firm J had bigger cash & Equivalents because they are financially
2. Firm Jhad less total liabilities because they try to avoid debt.
3. Firm J had 78.3% COGS, with the assumption 30% of its COGS comes
from semiconductor as second line business firm J still has 48.3% COGS
that comes from its main line business.
Firm K
One company owned one of the largest food-service contractors in the
country, a large chain of family restaurants, and a large chain of fast-food
restaurants. This firm financed its hotels via off-balance-sheet limited
partnerships. The company had significant assets in the form of food
service and hotel management contracts. Hotel revenues accounted for
about 40 percent of the total, and contract services for about 45 percent.

Firm L
The other firm operated a worldwide chain of high-quality hotels and
motels in addition to a smaller line of casinos.

1. Firm K had bigger grossprofit because they gained profit from contract
service for about 45% which doesn’t have cost of goods sold.
2. Hotel K also had much lesser liabilities thann Hotel L which can be
interpreted as result of the firm financing (using off-balance-sheet limited
Firm N
One had a large flagship newspaper that was sold around the country and
around the world. Because the company was centered largely around one
product, it had strong central controls.

Firm M
The other firm owned a number of small newspapers throughout the Mid-
West. Broadcasting was its secondary line of business and accounted for
about 27 percent of total revenues. This company had a significant
amount of goodwill stemming from acquisitions.

1. Firm N has lesser other asset than M because only focus on one product.
2. Firm M has more gross profit than N because they have income from
3. Firm M has goodwill because of acqusitions and it can be seen on the
statement where its other assets are bigger than its fixed assets.
4. This company also got income from acquisitions that is written on other
expenses (income) account.
Firm O
One was a large, national trucking and freight- forwarding company.

Firm P
The other was primarily a railroad, although 20 percent of its revenues
were derived from real estate and exploitation of natural resources.

1. Firm O doesn’t have COGS because they are freightforwardingcompany

that doesn’t have product.
2. Firm O has bigger SG&A (all oper. exp. for H & O) than firm P becausue
they need bigger operation expenses to serve their service.