The Financial Detective Case Solution
Thus, the net profit margin of “One” company is higher depicting that the company caters larger customer base and maximize profit returns.
Computer industry:
“One” company usually sells supercomputer to government bodies and commercial businesses; the company does not seek to invest largely as the risk tolerance lies between low and moderate.
“Other” company always seeks to expand the business by expanding the product line and to increase the customer base through innovating products.
The financial statement does not match with the description as the profits of “One” company are higher than “Other” company.
Hospitality industry:
“One” company franchises and manages hotel line of business and gather profit return from responsibly maintaining hotel chain. “Other” company owns its properties and operates hotels as well.
“Other” company has successfully generated more profits than “One” company through operating its own properties.
Newspaper industry:
“One” company is highly innovative and acquired various firms, as it also initiate cost control to reduce the cost that tends to be start with the process of budgeting. “Other” company engages offering its products both domestically and internationally, for the purpose of dispense with the strong competition, it is highly stuck with only product.
The profit return and ROE “Other” company is significantly negative or lower depicting that innovation is a mean of generating massive profits in highly innovative and ever changing world.
Pharmaceutical industry:
“One” company adapted diversification in offering a diverse range of products to its customers; it focuses on investing in innovative drugs so as to give competitive threat to competitors. “Other” company is involved in leveraged buyouts to improve the value of the drug despite of highly investing in innovating new drugs.
The financials of “One” company does not match with its business, however the profit return of “Other” company shows that strategy of the company is quite effective.
Power industry:
“One” company is engaged with the solar technique of converting sunlight into energy. “Other” company is involved with the electrical means of generating power worldwide.
The net profit margin of “Other” company is greater than “One” company which shows that the innovative mean of generating electricity is effective than traditional means.
Retail industry:
“One” company offers wide range of products i.e. electronics and media and generates massive profit from cloud computing business as well, and focuses on adapting new technologies. “Other” company offers apparel and accessories to its customers through departmental stores.
The profitability of the “Other” company is greater because the frequency of purchasing fashion apparel is more than electronic and media................
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