Financial Reporting, Financial Statement Analysis and Valuation
8th Edition
ISBN: 9781285190907
Author: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw
Publisher: Cengage Learning
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Chapter 1, Problem 10PC
Effect of Industry Characteristics on Financial Statement Relations. Effective financial statement analysis requires an understanding of a firm’s economic characteristics. The relations between various financial statement items provide evidence of many of these economic characteristics. Exhibit 1.22 (pages 60–61) presents common-size condensed
- A. Amazon.com: Operates websites to sell a wide variety of products online. The firm operated at a net loss in all years prior to that reported in Exhibit 1.22.
- B. Carnival Corporation: Owns and operates cruise ships.
- C. Cisco Systems: Manufactures and sells computer networking and communications products.
- D. Citigroup: Offers a wide range of financial services in the commercial banking, insurance, and securities business. Operating expenses represent the compensation of employees.
- E. eBay: Operates an online trading platform for buyers to purchase and sellers to sell a variety of goods. The firm has grown in part by acquiring other companies to enhance or support its online trading platform.
- F. Goldman Sachs: Offers brokerage and investment banking services. Operating expenses represent the compensation of employees.
- G. Johnson & Johnson: Develops, manufactures, and sells pharmaceutical products, medical equipment, and branded over-the-counter consumer personal care products.
- H. Kellogg’s: Manufactures and distributes cereal and other food products. The firm acquired other branded food companies in recent years.
- I. MGM Mirage: Owns and operates hotels, casinos, and golf courses.
- J. Molson Coors: Manufactures and distributes beer. Molson Coors has made minority ownership investments in other beer manufacturers in recent years.
- K. Verizon: Maintains a telecommunications network and offers telecommunications services. Operating expenses represent the compensation of employees. Verizon has made minority investments in other cellular and wireless providers.
- L. Yum! Brands: Operates chains of name-brand restaurants, including Taco Bell, KFC, and Pizza Hut.
REQUIRED
Use the ratios to match the companies in Exhibit 1.22 with the firms listed above.
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Chapter 1 Solutions
Financial Reporting, Financial Statement Analysis and Valuation
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