Select the Industry tab and choose the Home Furnishing industry. In the Compustat Reports section, click on the link to get a list of the subindustry constituents. Pick two companies from the list and do the following for each firm.
a. Retrieve the latest annual Balance Sheet from the Excel Analytics section. Save it to your computer so you will be able to manipulate it and do calculations. Insert a column to the right of the last fi scal yearâ€™s numbers. Calculate the common-size percentages for the Balance Sheet in the new column.
b. Compare the fi rmsâ€™ investments in accounts receivable, inventory, and net plant, property, and equipment. Which fi rm has more invested in these items on a percentage basis?
c. Compare the fi rmsâ€™ investments in current liabilities and long-term liabilities. Does one fi rm have a signifi cantly higher burden in either of these areas?
d. Analyze the fi rmsâ€™ capital structures by examining the debt ratios and the percentages of preferred and common equity. How much do the fi rmsâ€™ capital structures differ from each other?