First Investments, Inc.

: Analysis of Financial Statements

Harvard Business School Case #910-410
197010
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Exhibit 1 Basic Industries Company and Consolidated Affiliates: Statement of Current

and Retained Earnings (as reported) for the Years 1994,1993, and 1985 (in millions)

Sales of products and services to customers

Operating costs:
Employee compensation, including benefits
Materials, supplies, services, and other costs
Depreciation
Taxes, except those on income
Increase in inventories during the year
Operating margin
Other income
Interest and other financial charges
Earnings before income taxes and minority interest
Provision for income taxes
Minority interest in earnings of consolidated
affiliates
Net earnings applicable to common stock
Dividends declared
Amount added to retained earnings
Retained earnings at January 1
Retained earnings at December 31

1994
1993
1985
$13,413.1 $11,575.3 $6,213.6

$ 5,332.0 $ 4,709.7 $ 2,440.8

6,966.7
5,690.5 3,063.4
376.2
334.0
188.4
123.0
113.5
51.6
(270.8)
(227.2) (176.1)
$12,418.1 $10,620.5 $5,568.1
$995.0
$954.8
$645.5
185.8
183.7
72.1
(180.1)
(126.9)
(27.4)
$1,000.7 $1,011.6
$690.2
(382.4)
(418.7) (352.2)
(10.2)
(7.8)
17.1
$608.1
(291.2)
$316.9
2.683.6
$ 3,000.5

$585.1
$355.1
(272.9) (216.7)
$312.2
$138.4
2.371.4 1.246.0
$ 2,683.6 $1,384.4

Basic Industries Company and Consolidated Affiliates: Statement of Financial Position

(as reported) December 31,1994,1993,1985 (in millions)
1994

1993

1985

Assets
Cash
Marketable securities
Current receivables
Inventories
Current assets
investments
Plant and equipment
Other assets
Total assets

$314.5
57.3
2,593.8
2.257.0
$5,222.6
1,004.8
2,615.6
526.1
$9,369.1

$396.8
$289.9
25.3
353.3
2,177.1 1,062.5
1.986.2 1.136.9
$4,485.4 $2,842.6
869.7
241.0
2,360.5 1,037.0
608.6
180.0
$8,324.2 $4,300.6

Exhibit 1 (continued)
1994

1993

1985

$644.9
696.0

$665.2
673.5

$120.6
376.2

1,000.5
72.8
337.2
1.128.1
$3,879.5
1,195.2
518.9
5.593.6
$71.2

$465.2

718.4
72.7
310.0
1.052.6
$3,492.4
917.2
492.1
4.901.7
$50.10

$463.8

300.5
58.7
318.3
392.6
$1,566.9
364.1
221.0
2.152.0
$41.40

$455.8

414.5
3,000.5
$3,880.2
(175.9)
$3,704.30
$9,369.1

409.5
2,683.6
$3,556.9
(184.5)
$3,372.40
$8,324.2

266.9
1,384.5
$2,107.2

$2,107.0
$4,300.6

Liabilities and Equity

Short-term borrowings
Accounts payable
Progress collections and price adjustments accrued
Dividends payable
Taxes accrued
Other costs and expenses accrued
Current liabilities
Long-term borrowings
Other liabilities
Total liabilities
Minority interest in equity of consolidated affiliates
Preferred stock
Common stock
Amounts received for stock in excess of par value
Retained earnings
Deduct common stock held in treasury
Total shareowners' equity
Total liabilities and equity

Exhibit 2 Basic Industries Company and Consolidated Affiliates: 10-Year Financial Highlights as Reported in 1994 Annual Report (dollar amounts in millions; per-share amounts in
dollars)

Summery of operations:
Sales of products and services
YOY
Materials, engineering, and production costs
Selling, general & administrative expenses
Operating costs
Operating margin
Other income
Interest and other financial charges
Earnings before income taxes and minority
interest
YOY
Provision for income taxes
Tax Rates
Minority interest
Net earnings(PAT)
Earnings per common share
Dividends declared per common share
Earnings as a percentage of sales
Earned on average shareowners' equity
Cash dividends declared
Shares outstandingaverage (in thousands)
Shareowner accountsaverage
Market price range per share
Price-earnings ratio range
Current assets
Current liabilities
Total assets
Shareowners' equity(equtiy)
Plant and equipment additions
Depreciation
Employeesaverage worldwide
average United States

Return of equity(ROE)
REturn of Asset(ROA)

1994

1993

1992

1991

1990

1989

1988

1987

1986

1985

$13,413.10
15.88%
10,137.60
2,280.50
$12,418.10
$995.00
185.8
(180.10)

$11,575.30
13.05%
8,55.2
2,105.30
$10,620.50
$954.80
183.7
(126.90)

$10,239.50
8.64%
7,509.60
1,915.20
$9,424.80
$814.70
189.2
(106.70)

$9,425.30
8.01%
6,962.10
1,726.20
$8,688.30
$737.00
152
(96.90)

$8,726.70
3.30%
6,423.60
1,754.20
$8,177.80
$548.90
106.8
(101.40)

$8,448.00
0.79%
6,346.10
1.615.3
$7,961.40
$486.60
98.7
(78.10)

$8,381.60
8.27%
6,251.10
1,482.10
$7,733.80
$647.80
86.3
(70.50)

$7,741.20
7.86%
5,779.40
1,320.90
$7,100.30
$640.90
91.4
(62.90)

$7,177.30
15.51%
5,311.00
1,234.30
$6,545.30
$632.00
72.4
(39.90)

$6,213.60

$1,000.70
-1.08%

$1,011.60
12.75%

$897.20
13.27%

$792.10
42.90%

$554.30
9.29%

$507.20
-23.57%

$663.60
-0.87%

$669.40
0.74%

$664.50
3.72%

$690.20

(382.40)
38.21%
(10.20)
$608.10
$3.34
$1.60
4.50%
17.20%
$291.20
182,120
547,000
65-30
19-9
$5,222.60
3,879.50
9,369.10
3,704.30
$671.80
376.2
404,000
307,000

(418.70)
41.39%
(7.80)
$585.10
$3.21
$1.50
5.10%
18.10%
$272.90
182,051
537,000
75-7/855
24-17
$4,485.40
3,492.40
8,324.20
3,372.40
$598.60
334
388,000
304,000

(364.10)
40.58%
(3.10)
$530.00
$2.91
$1.40
5.20%
18.00%
$254.80
182,112
536,000
7358-1/4
25-20
$3,979.30
2,869.70
7,401.80
3,084.60
$435.90
314.3
369,000
292,000

(317.10)
(220.60)
40.03%
39.80%
(3.20)
(5.20)
$471.80
$328.50
$2.60
$1.81
$0.38
$1.30
5.00%
3.80%
17.60%
13.20%
$249.70
$235.40
181,684
181,114
523,000
529,000
66-1/246-1/2 47-1/430-1/8
26-28
26-17
$3,639.00
$3,334.80
2,840.40
2,650.30
6,887.80
6,198.50
2,801.80
2,553.60
$553.10
$581.40
273.6
334.7
363,000
297,000
291,000
310,000

(231.50)
45.64%
2.30
$278.00
$ $1.54
$1.30
3.30%
11.50%
$235.20
180,965
520,000
49-1/837
32-24
$3,287.80
2,366.70
5,894.00
2,426.50
$530.60
351.3
410,000
318,000

(312.30)
47.06%
5.80
$357.10
$1.98
$1.30
4.30%
15.40%
$234.80
180,651
530,000
50-1/440-1/8
5-20
3,311.10
2,104.30
5,652.30
2,402.10
$514.70
300.1
394,000
305,000

(320.50)
47.88%
12.50
$361.40
$2.00
$1.30
4.70%
16.50%
$234.20
180,266
529,000
48-411/4
29-21
$3,207.60
1,977.40
5,205.30
2,245.30
$561.70
280.4
385,000
296,000

(347.40)
52.28%
21.80
$338.90
$1.88
$1.30
4.70%
16.20%
$234.60
180,609
530,000
6040
32-21
$3,013.00
1,883.20
4,768.10
2,128.10
$484.90
233.6
376,000
291,000

(352.20)
51.03%
17.10
$355.10
$1.97
$1.20
5.70%
18.00%
$216.70
180,634
521,000
60-1/845-1/2
31-23
$2,842.60
1,566.80
4,300.60
2,107.20
$332.90
188.4
333,000
258,000

1994
16.42%
6.49%

1993
17.35%
7.03%

1992
17.18%
7.16%

1989
11.46%
4.72%

1988
14.87%
6.32%

1987
16.10%
6.94%

1986
15.93%
7.11%

1985
16.85%
8.26%

1991
16.84%
6.85%

1990
12.86%
5.30%

4,449.20
1,118.90
$5,568.10
$645.50
72.1
(27.40)