Teaching Note | HBS Case Collection | April 2014

Jiangxi Agribusiness: (TN)

by David F. Hawkins

Abstract

[TN for 114-039] Emily Wang, an analyst with Future Securities, a Shanghai-based investment firm, is given the task of making stock purchase recommendations to her supervisor from a number of Chinese common stocks. One stock in particular, Jiangxi Agribusiness (Jiangxi), caught Emily's attention as a likely purchase recommendation. Before making her recommendation decision, Emily felt she needed to look deeper into the company's operating performance and financial condition. To this end, Emily performed a financial ratio analysis comparison of Jiangxi's financial ratios to those of selected peer companies. Jiangxi's major revenue sources were aquatic products (fish, ducks) and beverages (lotus root juice, mineral water). Guided by these revenue sources, Emily selected the financial statements of four companies in the fishery industry and three companies in the food and beverage industry to perform a peer company comparative financial ratio analysis. The case reproduces the individual company financial ratios Emily computed for her comparative ratio analysis. The student's task is to use these ratios and whatever insights they can develop from the case data to assess Jiangxi's individual and comparative performance, financial condition, and quality of earnings. In addition, the case assignment asks students to suggest possible lines of inquiry Emily might pursue if given the opportunity to conduct field research. At the end of the class, students are asked to make a stock recommendation.

Keywords: financial analysis; ratio analysis;

Citation:

Hawkins, David F. "Jiangxi Agribusiness: (TN)." Harvard Business School Teaching Note 114-041, April 2014.