Analysis of WM Wiggle Jr. Company vs. the Devonshire Company
Submitted to: Ms. Mary Pincus
Submitted on: July 19, 2010
1.0 Financial Analysis Methodology
We have gathered the income statement, balance sheet and selected ratios from companies to analyze and compare the profitability, managerial efficiently, financial stability and potential company growth of the two companies.
2.0 Brief Company History
WM. Wiggle Jr. Company
Engages in the manufacture and sale of chewing gum and other confectionery products both in the US and abroad. Direct customers include vending distributors, concessionaires, and other customer purchasing in wholesale quantities. Marketing is primarily through wholesalers that distribute their products through retail outlets.
The Devonshire Company
Engages in the manufacture and sale of confectionery (especially chocolate), snack, refreshment and grocery products in the US and internationally. Customers include wholesale distributors, chain grocery stores, mass merchandisers, convenience stores and concessionaires through sales representatives, food brokers, and retail sales merchandisers.
3.0 Financial Statement Analysis
4.1 Managerial Efficiency
Return on net assets (RNOA) is an indicator of how efficient management is at using its assets to generate earning. A higher return on assets is better because it shows that the company is earning more money off of the money they have invested in assets. At Wiggle the RNOA has been steadily decreasing over the years currently their RNOA is 19% down from 28% in 2002; total decrease of 9.63%. If you compare the overall RNOA from 2002 to 2005 at Devonshire it has increased slightly, about .36%; however there was a decrease from 2004 to 2005 of 5.54% which may be an indication of future problems.
Return on equity (ROE) is one of the most important ratios in evaluating a company’s management. The ROE shows how effectively management is using investors’ money. The...