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FD Marking Scheme
You are the new finance manager of FD Group a holding company with diverse investments in different industries. The Board of Director is asking you for your opinion / analysis of the following holdings with their concerns.
[Note: Assuming market is efficient; therefore, market multiples have high predictive power]
Type your answer in the box below and return as word document. If you do not follow this format I would return your work to you for correction you would face the same late penalty if you fail to re-submit within deadline.
[You may submit any other exhibits / attachments to support your works]
Instruction: Focus on the numbers particularly market multiples (e.g., P/E, P/B, etc). Do not discuss industry characteristics e.g., Health is important so the market will grow.
Task 1: Health Industry A vs B. Which firm has higher/lower/same market growth potential? Why? Which firm has higher financial strength to support growth and why?
Type your answer below [Max: 50 words]:
Task 2: Beer Industry C vs D. According to Porters Business Strategy Volume (or low cost) / Niche / Differentiation. What strategy do you think C and D are pursuing?
Type your answer below [Max: 50 words]:
Task 3: Identify the top 2 Cashcow firms as measured by FCF i.e., able to generate the highest FCF and why?
Type your answer below [Max: 50 words]:
Task 4: Identify the top Dog (as in BCG model) among the firms (A to P):
Type your answer below [Max: 50 words]:
[Do not convert Word doc to PDF or any other unalterable format]
EXHIBIT 1 Common-Sized Financial Data and Ratios Assets A C D E F G H ! J L M N 0 P 24.2 81.7 Cash & Short-Term Investments Receivables Inventories Current Assets-Other Current Assets-Total Net Fixed Assets Assets-Other Intangibles Investments & Advances Assets-Total 12.8 7.0 7.2 51.2 19.6 6.9 22.2 0.1 100.0 16.1 8.1 5.4 2.5 32.1 14.9 3.8 46.1 3.1 100.0 1.4 4.3 4.3 1.3 11.2 54.7 7.2 7.4 2.9 100.0 55.6 42.2 11.9 19.0 11.7 2.0 2.4 9.5 72.8 16.0 7.3 1.0 1.3 1.3 0.0 0.0 18.6 100.0 100.0 67.9 13.0 1.3 5.5 87.6 8.8 2.4 1.2 0.0 100.0 54.8 nmf 14.8 8.6 78.2 7.6 9.3 4.4 0.0 100.0 16.2 2.3 38.6 2.6 59.7 24.4 4.9 11.1 0.0 100.0 7.6 8.8 7.9 3.0 27.2 50.8 5.4 14.6 0.0 100.0 5.9 10.9 14.4 1.4 32.6 62.5 3.1 1.9 0.0 100.0 9.3 18.9 17.8 7.0 52.9 13.6 11.8 21.4 0.0 100.0 6.5 23.7 14.9 6.9 52.1 13.7 8.9 22.3 3.0 100.0 4.6 1.4 24.5 1.5 32.0 57.0 2.0 9.0 0.0 100.0 7.0 17.0 16.7 2.5 43.1 522 4.0 0.6 0.0 100.0 0.6 4.6 0.8 0.7 6.6 14.1 0.1 76.8 0.7 100.0 1.1 9.9 0.8 3.8 15.5 34.6 7,2 37.1 0.0 100.0 Liabilities & Equity 9.8 0.5 13.7 Accounts Payable Debt in Current Liabilities Income Taxes Payable Current Liabilities Other Current Liabilities-Total LT Debt Deferred Taxes Liabilities-Other Liabilities-Total Stockholders' Equity Total Liabilities & Equity 2.8 13.0 26.1 4.8 0.8 8.6 40.3 59.7 100.0 2.2 9.1 1.6 8.5 21.4 5.9 10.2 7.3 44.8 55.2 100.0 7.4 0.0 0.9 3.8 12.2 51.2 10.7 9.5 83.5 16.5 100.0 9.1 38.3 18.0 0.0 0.0 0.0 1.7 0.0 0.0 22.6 15.3 24.4 60.9 33.3 0.0 2.2 0.0 1.9 0.0 0.0 0.7 8.9 3.7 27.1 72.1 36.9 72.9 27.9 63.1 100.0 100.0 100.0 35.1 0.1 0.0 14.7 49.9 56.9 nmt 0.2 107.0 (7.0) 100.0 22.6 0.0 0.0 17.6 40.2 7.4 5.9 11.0 64.7 35.3 100.0 6.7 1.5 0.0 6.1 14.2 41.3 5.0 10.9 75.9 24.1 100.0 8.5 0.0 1.2 7.1 16.7 18.3 12.0 12.4 59.5 40.5 100.0 8.4 3.5 0.9 19.5 32.4 21.7 3.1 14.6 71.8 28.2 100.0 8.5 5.6 1.0 14.4 29.4 8.9 3.3 8.9 51.5 48.5 100.0 18.0 6.5 1.1 10.1 35.7 19.7 nmf 2.5 58.9 41.1 100.0 17.9 1.6 0.9 5.1 25.5 28.0 3.0 3.2 59.7 40.3 100.0 1.4 0.8 0.3 5.1 7.5 14.4 15.0 0.7 37.5 62.5 100.0 4.8 14.9 nmf 8.7 28.3 11.9 3.3 17.5 64.5 35.5 100.0 Income/Expenses 1 Sales-Net Cost of Goods Sold Gross Profit SG&A Expense Depreciation Earnings Before Interest & Taxes Nonoperating Income (Expense) Interest Income (Expense) Special Items-Income (Expense) Pretax Income Income Taxes-Total Net Income (Loss) 100.0 23.9 76.1 44.5 4.5 27.2 0.7 (0.7) (0.0) 27.1 9.1 18.0 100.0 11.1 88.9 46.7 9.7 32.5 1.1 0.7 (6.3) 26.7 5.1 21.6 100.0 53.9 46.1 17.3 6.2 22.5 2.9 2.9 0.2 22.8 7.8 15.0 100.0 38.5 61.5 50.5 2.0 9.0 0.3 0.0 0.0 9.2 3.5 5.8 100.0 81.0 19.0 9.7 0.7 8.6 0.4 0.0 0.0 9.0 2.8 6.2 100.0 70.9 29.1 23.1 1.8 4.2 0.7 0.0 (0.3) 4.6 1.3 3.3 100.0 75.8 24.2 16.9 1.1 6.2 0.3 1.5 0.1 5.1 (3.4) 8.5 100.0 69.5 30.5 21.8 3.7 5.0 0.1 0.3 (0.3) 4.5 1.9 2.9 100.0 75.3 24.7 12.0 6.1 6.6 0.4 3.3 (0.8) 2.9 0.8 (0.1) 100.0 82.9 17.1 7.3 5.8 4.0 0.1 1,0 0.0 3.1 1.2 2.0 100.0 61.0 39.0 24.8 2.6 11.7 0.6 1,1 0.0 11.2 3.0 8.4 100.0 51.6 48.4 38.9 2.5 6.9 0.1 1.0 (1.0) 5.1 1.6 3.4 100.0 75.3 24.7 17.9 1.5 5.3 0.8 0.5 0.0 5.6 2.0 3.6 100.0 67.1 32.9 22.5 2.7 7.7 0.0 1.0 (0.2) 6.5 2.4 6.8 100.0 49.7 50.3 23.0 7.0 20.2 1.3 1.9 0.0 19.7 7.1 12.6 100.0 40.5 59.5 39.7 4.1 15.6 0.4 1.6 (0.1) 14.4 5.6 8.9 on 123 73 124 FD EXHIBIT 1 | Common-Sized Financial Data and Ratios (Continued) P2 Market Data B C D E F G H 1 J K L M N 0 P Beta Price/Earnings Price to Book Dividend Payout Liquidity 0.65 22.29 5.93 38.21 0.85 22.32 3.08 46.28 0.55 0.60 16.85 19.73 13.99 2.56 33.16 0.00 1.20 30.48 17.46 0.00 1.05 41.85 5.13 0.00 1.70 27.32 nmf 0.00 0.51 1.15 21.63 30.97 2.36 1.91 0.00 101.46 1.10 33.78 1.80 86.16 1.00 1.00 13.64 23.01 4.65 1.85 15.30 70.62 0.85 1.10 18.97 24.19 4.23 3.64 21.56 14.85 0.85 0.90 20,54 13.29 2.07 3.09 37.53 30.81 Current Ratio Quick Ratio 1.96 1.42 1.50 1.13 0.92 0.47 3.35 2.77 1.20 1.01 2.63 2.43 1.57 nmf 1.49 0.46 1.91 1.15 1.94 1.00 1.63 0.87 1.77 1.03 0.90 0.17 1.69 0.94 0.88 0.69 0.55 0.39 Asset Management Inventory Turnover Receivables Turnover Fixed Assets Turnover 3.08 7:06 4.67 0.93 5.47 2.86 1260 21.87 1.72 7.44 67.96 74.78 18.68 12.23 8.28 12.67 30.68 12.03 13.56 nmf 29.42 2.42 72.11 6.54 6.75 8.68 1.43 7.11 11.64 1.86 3.89 5.82 7.63 3.59 7.69 4.42 192.73 7.50 4.50 5.86 8.31 2.77 33.35 10.98 3.43 43.48 8.50 2.59 Debt Management Total Debt/Total Assets LT Debt/Shareholders' Equity Interest Coverage After Tax DuPont Analysis 5.34 8.06 27.34 14.99 51.119 10.66 310.28 32.57 6.25 0.00 2.18 0.00 0.00 7.79 0.00 nmf 191.19 93.00 56.94 nmf 6.49 7.42 42.78 21.01 171.21 9.52 1.56 18.36 25.21 45.32 77.03 2.98 8.62 14.45 18 29 4.55 26.16 29.54 47.92 69.34 8.86 4.92 15.22 26.81 23.04 33.66 7.83 6.69 Net Profit Margin Asset Turnover Return on Equity 17.97 0.93 26.75 21.58 0.44 16.64 15.00 5.76 6.18 0.97 2.23 2.31 83.97 15.95 46.92 3.33 1.11 5.44 8.50 2.56 nmf 2.53 1.43 10.58 1.87 0.73 5.79 1.96 1.20 5.71 8.17 1.11 28.30 3.39 1.09 7.36 3.59 2.54 20.79 4.02 1.47 14.47 12.65 8.86 0.48 0.85 9.86 20.89 Sources of data: S&P's Research Insight; Value Line Investment Survey. nmf = not a meaningful figure. EXHIBIT 1 Common-Sized Financial Data and Ratios Assets A C D E F G H ! J L M N 0 P 24.2 81.7 Cash & Short-Term Investments Receivables Inventories Current Assets-Other Current Assets-Total Net Fixed Assets Assets-Other Intangibles Investments & Advances Assets-Total 12.8 7.0 7.2 51.2 19.6 6.9 22.2 0.1 100.0 16.1 8.1 5.4 2.5 32.1 14.9 3.8 46.1 3.1 100.0 1.4 4.3 4.3 1.3 11.2 54.7 7.2 7.4 2.9 100.0 55.6 42.2 11.9 19.0 11.7 2.0 2.4 9.5 72.8 16.0 7.3 1.0 1.3 1.3 0.0 0.0 18.6 100.0 100.0 67.9 13.0 1.3 5.5 87.6 8.8 2.4 1.2 0.0 100.0 54.8 nmf 14.8 8.6 78.2 7.6 9.3 4.4 0.0 100.0 16.2 2.3 38.6 2.6 59.7 24.4 4.9 11.1 0.0 100.0 7.6 8.8 7.9 3.0 27.2 50.8 5.4 14.6 0.0 100.0 5.9 10.9 14.4 1.4 32.6 62.5 3.1 1.9 0.0 100.0 9.3 18.9 17.8 7.0 52.9 13.6 11.8 21.4 0.0 100.0 6.5 23.7 14.9 6.9 52.1 13.7 8.9 22.3 3.0 100.0 4.6 1.4 24.5 1.5 32.0 57.0 2.0 9.0 0.0 100.0 7.0 17.0 16.7 2.5 43.1 522 4.0 0.6 0.0 100.0 0.6 4.6 0.8 0.7 6.6 14.1 0.1 76.8 0.7 100.0 1.1 9.9 0.8 3.8 15.5 34.6 7,2 37.1 0.0 100.0 Liabilities & Equity 9.8 0.5 13.7 Accounts Payable Debt in Current Liabilities Income Taxes Payable Current Liabilities Other Current Liabilities-Total LT Debt Deferred Taxes Liabilities-Other Liabilities-Total Stockholders' Equity Total Liabilities & Equity 2.8 13.0 26.1 4.8 0.8 8.6 40.3 59.7 100.0 2.2 9.1 1.6 8.5 21.4 5.9 10.2 7.3 44.8 55.2 100.0 7.4 0.0 0.9 3.8 12.2 51.2 10.7 9.5 83.5 16.5 100.0 9.1 38.3 18.0 0.0 0.0 0.0 1.7 0.0 0.0 22.6 15.3 24.4 60.9 33.3 0.0 2.2 0.0 1.9 0.0 0.0 0.7 8.9 3.7 27.1 72.1 36.9 72.9 27.9 63.1 100.0 100.0 100.0 35.1 0.1 0.0 14.7 49.9 56.9 nmt 0.2 107.0 (7.0) 100.0 22.6 0.0 0.0 17.6 40.2 7.4 5.9 11.0 64.7 35.3 100.0 6.7 1.5 0.0 6.1 14.2 41.3 5.0 10.9 75.9 24.1 100.0 8.5 0.0 1.2 7.1 16.7 18.3 12.0 12.4 59.5 40.5 100.0 8.4 3.5 0.9 19.5 32.4 21.7 3.1 14.6 71.8 28.2 100.0 8.5 5.6 1.0 14.4 29.4 8.9 3.3 8.9 51.5 48.5 100.0 18.0 6.5 1.1 10.1 35.7 19.7 nmf 2.5 58.9 41.1 100.0 17.9 1.6 0.9 5.1 25.5 28.0 3.0 3.2 59.7 40.3 100.0 1.4 0.8 0.3 5.1 7.5 14.4 15.0 0.7 37.5 62.5 100.0 4.8 14.9 nmf 8.7 28.3 11.9 3.3 17.5 64.5 35.5 100.0 Income/Expenses 1 Sales-Net Cost of Goods Sold Gross Profit SG&A Expense Depreciation Earnings Before Interest & Taxes Nonoperating Income (Expense) Interest Income (Expense) Special Items-Income (Expense) Pretax Income Income Taxes-Total Net Income (Loss) 100.0 23.9 76.1 44.5 4.5 27.2 0.7 (0.7) (0.0) 27.1 9.1 18.0 100.0 11.1 88.9 46.7 9.7 32.5 1.1 0.7 (6.3) 26.7 5.1 21.6 100.0 53.9 46.1 17.3 6.2 22.5 2.9 2.9 0.2 22.8 7.8 15.0 100.0 38.5 61.5 50.5 2.0 9.0 0.3 0.0 0.0 9.2 3.5 5.8 100.0 81.0 19.0 9.7 0.7 8.6 0.4 0.0 0.0 9.0 2.8 6.2 100.0 70.9 29.1 23.1 1.8 4.2 0.7 0.0 (0.3) 4.6 1.3 3.3 100.0 75.8 24.2 16.9 1.1 6.2 0.3 1.5 0.1 5.1 (3.4) 8.5 100.0 69.5 30.5 21.8 3.7 5.0 0.1 0.3 (0.3) 4.5 1.9 2.9 100.0 75.3 24.7 12.0 6.1 6.6 0.4 3.3 (0.8) 2.9 0.8 (0.1) 100.0 82.9 17.1 7.3 5.8 4.0 0.1 1,0 0.0 3.1 1.2 2.0 100.0 61.0 39.0 24.8 2.6 11.7 0.6 1,1 0.0 11.2 3.0 8.4 100.0 51.6 48.4 38.9 2.5 6.9 0.1 1.0 (1.0) 5.1 1.6 3.4 100.0 75.3 24.7 17.9 1.5 5.3 0.8 0.5 0.0 5.6 2.0 3.6 100.0 67.1 32.9 22.5 2.7 7.7 0.0 1.0 (0.2) 6.5 2.4 6.8 100.0 49.7 50.3 23.0 7.0 20.2 1.3 1.9 0.0 19.7 7.1 12.6 100.0 40.5 59.5 39.7 4.1 15.6 0.4 1.6 (0.1) 14.4 5.6 8.9 on 123 73 124 FD EXHIBIT 1 | Common-Sized Financial Data and Ratios (Continued) P2 Market Data B C D E F G H 1 J K L M N 0 P Beta Price/Earnings Price to Book Dividend Payout Liquidity 0.65 22.29 5.93 38.21 0.85 22.32 3.08 46.28 0.55 0.60 16.85 19.73 13.99 2.56 33.16 0.00 1.20 30.48 17.46 0.00 1.05 41.85 5.13 0.00 1.70 27.32 nmf 0.00 0.51 1.15 21.63 30.97 2.36 1.91 0.00 101.46 1.10 33.78 1.80 86.16 1.00 1.00 13.64 23.01 4.65 1.85 15.30 70.62 0.85 1.10 18.97 24.19 4.23 3.64 21.56 14.85 0.85 0.90 20,54 13.29 2.07 3.09 37.53 30.81 Current Ratio Quick Ratio 1.96 1.42 1.50 1.13 0.92 0.47 3.35 2.77 1.20 1.01 2.63 2.43 1.57 nmf 1.49 0.46 1.91 1.15 1.94 1.00 1.63 0.87 1.77 1.03 0.90 0.17 1.69 0.94 0.88 0.69 0.55 0.39 Asset Management Inventory Turnover Receivables Turnover Fixed Assets Turnover 3.08 7:06 4.67 0.93 5.47 2.86 1260 21.87 1.72 7.44 67.96 74.78 18.68 12.23 8.28 12.67 30.68 12.03 13.56 nmf 29.42 2.42 72.11 6.54 6.75 8.68 1.43 7.11 11.64 1.86 3.89 5.82 7.63 3.59 7.69 4.42 192.73 7.50 4.50 5.86 8.31 2.77 33.35 10.98 3.43 43.48 8.50 2.59 Debt Management Total Debt/Total Assets LT Debt/Shareholders' Equity Interest Coverage After Tax DuPont Analysis 5.34 8.06 27.34 14.99 51.119 10.66 310.28 32.57 6.25 0.00 2.18 0.00 0.00 7.79 0.00 nmf 191.19 93.00 56.94 nmf 6.49 7.42 42.78 21.01 171.21 9.52 1.56 18.36 25.21 45.32 77.03 2.98 8.62 14.45 18 29 4.55 26.16 29.54 47.92 69.34 8.86 4.92 15.22 26.81 23.04 33.66 7.83 6.69 Net Profit Margin Asset Turnover Return on Equity 17.97 0.93 26.75 21.58 0.44 16.64 15.00 5.76 6.18 0.97 2.23 2.31 83.97 15.95 46.92 3.33 1.11 5.44 8.50 2.56 nmf 2.53 1.43 10.58 1.87 0.73 5.79 1.96 1.20 5.71 8.17 1.11 28.30 3.39 1.09 7.36 3.59 2.54 20.79 4.02 1.47 14.47 12.65 8.86 0.48 0.85 9.86 20.89 Sources of data: S&P's Research Insight; Value Line Investment Survey. nmf = not a meaningful figure
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