Type:
Solution Manual
Resource:
Financial Reporting and Analysis
Edition:
13th Edition
Author(s):
Charles H. Gibson
Thomson ONE solutions Gibson, Financial Reporting & Analysis: Using Financial Accounting Information, 13e Chapter 1 THOMSON ONE This exercise introduces the use of Thomson ONE. This chapter’s Thomson ONE exercise introduces the Merck & Company in terms of business description, industry, sector, analyst rating, and peer data. A major advantage of Thomson ONE is that it is constantly updated. This represents a disadvantage when it comes to the solution manual. In this exercise the analyst rating will frequently change, the peer data will change, and the news headlines will change.
Chapter 1 I. Enter MRK in “Companies” (Merck & Company, Inc.). Click “Go”. Required a. Briefly summarize the business description. • Merck & Company, Inc. (Merck) is a global health care company. b. What is the industry? • Pharmaceuticals c. What is the sector? • Health Care d. Analyst rating. In your opinion, is this rating relatively high? Click “News & Events”. • Strong buy. (Note: This may change by the time the student reviews the case) e. Review and comment on the three most recent news headlines. Click “Comparables”. • (Note: The two most recent news headlines will frequently change.) f. For the comparable companies:
Thomson One; Chapter 1
Page 1 of 2
•
• • • • • •
List the companies. • Abott Laboratories • Astrazeneca • Bayer AG • Eli Lilly & Company • GlaxoSmithKline PLC • Johnson & Johnson For Merck & Company, Inc. and each comparable company, list the current sales. • (Note: This will change over time.) For current sales, select the peer weight for Merck & Company, Inc. • (Note: This will change over time.) At the time of working the solution, it was 9.08%. For current sales, select the peer aggregate. • (Note: This will change over time.) At the time of working the solution, it was $505,515.58 (in millions) For current sales, determine the peer mean. • (Note: This will change over time.) At the time of working the solution, it was $45,955.96 (in millions) For current sales, determine the peer median. • (Note: This will change over time.) At the time of working the solution, it was $45,913.96 (in millions) Comment on how dominant Merck & Company, Inc. appears to be in relation to the peer set. • (Note: This will change over time.) Based on the data at the time of working the solution, it was not dominant.
Thomson One; Chapter 1
Page 2 of 2
Thomson ONE solutions Gibson, Financial Reporting & Analysis: Using Financial Accounting Information, 13e Chapter 2 THOMSON ONE This Merck & Company exercise uses the proxy statement to review the directors, board committees, and executive officers. Students find the Executive Officers compensation to be particularly interesting.
Chapter 2 I. Enter MRK in “Companies” (Merck & Company, Inc.). Click “Go”. Review the business description, industry, and sector. Click on http://www.merck.com (Under Merck & Company, Inc.). Click on “Investors”. Click on “Financials”. Click on the most recent proxy statement for Merck & Company, Inc. Required Review directors or nominees for director by name, principal occupation or employment/other business affiliation, age, and director service. 1. Comment on the composition of the directors. • Note: The composition will change over time. • Information on the nominees follows: i. Leslie Brun Chairman and Chief Executive Officer, SARR Group, LLC since March 2006, prior to which he was Chairman Emeritus of Hamilton Lane from 2003 to March 2006. ii. Thomas Cech Investigator, Howard Hughes Medical Institute and President from January 2000 to March 2009; Faculty, University of Colorado since 1978. iii. Richard Clark Chairman of the Board, Merck & Company, Inc. since November 2009. Mr. Clark was Chief Executive Officer from November 2009 to December 2010 and was President from November 2009 to April 2010 iv. Kenneth Frazier President and Chief Executive Officer, Merck & Company, Inc. since January 2011. Prior to which he was President since May 2010. Prior to his appointment as President, Mr. Frazier served as Executive Vice President and President,
Thomson One; Chapter 2
Page 1 of 5
v.
vi.
vii.
viii.
ix.
x.
xi.
xii.
xiii.
xiv.
xv.
Thomson One; Chapter 2
Global Human Health of the company (since November 2009) and Merck Sharp & Dohme Corporation (2007-2009). Thomas Glocer Chief Executive Office, Thomson Reuters Corporation, prior to which he was Chief Executive Office of Reuters Group PLC from July 2001 to April 2008. Steven Goldstone Retired Chairman and Chief Executive Officer, RJR Nabisco Inc. from 1995 to 2000; Managing Partner, Silver Spring Group (private investment firm) for more than five years. William Harrison Retired Chairman of the Board, J.P. Morgan Chase & Co. since December 31, 2006, prior to which he was Chairman from November 2001 and Chief Executive Officer from December 2000 until December 2005. Harry Jacobson Vice Chancellor, Health Affairs, Emeritus, Vanderbilt University since 2009, prior to which he was Vice Chancellor, health Affairs for more than five years. William Kelley Professor of Medicine, Biochemistry and Biophysics, University of Pennsylvania School of Medicine for more than five years. Robert Kidder Chairman and Chief Executive Office, 3 Stone Advisors, LLC since August 2006. Mr. Kidder was a Principal of Stonehenge Partners, Inc. from April 2004 to July 2006. Rochelle Lazarus Chairman, Ogilvy & Mather Worldwide since January 1, 2009, prior to which she was Chairman and Chief Executive Officer from 1996 to 2008. Carlos Represas Retired Executive Vice President-Head of the Americas, Nestle, S.A., Switzerland from 1994 to 2004. Patricia Russo Retired Chief Executive Officer and Director, Alcatel-Lucent from December 2006 through September 2008. Ms. Russo served as the Chairmen from 2003 to 2006 and Chief Executive Officer and President from 2002 to 2006 of Lucent Technologies Inc. until its merger with Alcatel. Thomas Shenk Elkins Professor, Department of Molecular Biology, Princeton University since 1984. Dr. Shenk was also the Chairman from 1996 to 2004. Anne Tatlock
Page 2 of 5