The Financial Detective

The Financial Detective - The Financial Detective...

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The Financial Detective Introduction Financial characteristics of companies vary both from industry to industry and within a single industry for a variety of reasons. The challenge for any company in planning its strategy is the consideration of the industry’s economics in conjunction with their own strategy to help the company’s financial statements remain strong and competitive across both lines. In this case, we are asked to use this consideration of strategies to determine which company description belongs to which company’s financial statements. We will begin this case brief with a short overview of the issues in the case, followed by our determination and reasoning for the pairings of financial statements and company description. Finally, we will conclude the brief with an explanation of why differences exist in financial results across industries. Issues in the Case The financial characteristics of companies vary for a variety of reasons. They vary not only from industry to industry but within a single industry as well. Variance from between industries is expected solely based on the nature of the industry and its operations, including but not limited to whether or not it is a commodity industry and the industry’s other economic features. Within a single industry, corporate strategies can have a dramatic affect on the appearance of a company’s financial statements, allowing for the differences within an industry. The issue we are asked to address and understand in this case is how a particular strategy affects a company’s financial statements. Given a set of characteristics, strategies, and a set of financial statements for two companies in a single industry, we are asked to interpret how their information affects their financial statements and choose which financial statements belong to which company. As rightly said in the case, the financial statements of no two companies are alike. The financial statements of companies in a particular industry, however, have many similarities and follow certain financial norms unique to that industry. Our analysis focuses on identifying these similarities.
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This note was uploaded on 11/22/2011 for the course BUS 401 taught by Professor Terrywilson during the Spring '11 term at Solano Community College.

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The Financial Detective - The Financial Detective...

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