OVERVIEW OF FINANCIAL REPORTING, FINANCIAL STATEMENT ANALYSIS, AND VALUATION
Solutions to Questions, Exercises, and Problems, and Teaching Notes to Cases
1. Value Chain Analysis Applied to the Timber and Timber Products Industry. Exhibit 1.A below contains a depiction of the value chain. The links in the value chain are as follows:
1. Timber Tracts: Plant and maintain timber tracts (Weyerhaeuser) 2. Logging: Harvests timber (Weyerhaeuser) a. Sawmills: Cut timber into various grades of wood (Weyerhaeuser) b. Pulp and Paper Manufacturing: Grinds timber into pulp and converts the pulp into various grades of paper and cardboard (International Paper) a. Intermediate Users of Wood: …show more content…
Johnson & Johnson. Johnson & Johnson operates in three business segments: consumer healthcare, pharmaceuticals, and medical equipment. It derives the majority of its revenue and profits from the latter two industries. Patents protect the products of these two industries, which give the firm a degree of market power. Until another firm creates a new product that dominates the patented product of Johnson & Johnson, its product is not a commodity. However, rapid technological change makes most products obsolete before the end of the patent’s life.