For this discussion, you have been presented with a list of companies that have been successful in some way shape or form, given the industry they belong to. These companies have developed strategic advantages to set themselves apart from their industry competitors.  However, their success within their particular industry is where the similarities end.  These companies have been purposely chosen for you to research because they all do different things in a wide variety of industries.  You will choose two of the companies listed below in which to research.  Because these companies are so different from one another by nature, there can’t be any meaningful direct comparisons regarding most aspects of their financial performance. 

Why look at companies and industries that are so different from one another, when the goal of this discussion is find similarities and to determine the most meaningful ways to measure financial performance? By having a broad understanding of how these companies and their industries differ from one another, we can start to get a clearer picture of the unique nature of the Entertainment Industry and how it also differs from other industries.  Additionally, by having a clear understanding of the many ways companies can differ from one another, you will also benefit by being more able to effectively identify the competition and their similarities so the most meaningful ratios can be used to compare various aspects of their financial performance. It is important to look at multiple ratios because there is no one ratio that tells the complete story about a company’s financial performance.  We need to find several important ratios that measure a variety of aspects about a business. But even then, the ratios are useless unless we have something to compare them to.  No matter how similar two companies may seem to each other, there will always be internal or external factors that cause one to differ from the other. Therefore, we can’t compare all areas of a company’s financial performance to all of the same areas of our own company. Instead, it is important to focus on the most meaningful characteristics, such as the core business functions vital to their operation, or to find the areas that have contributed to the company’s success.  We can then look at additional companies that have similarities in other areas and make even more meaningful comparisons using the most relevant ratios.  We can also look at an entire industry average as a benchmark for the most important ratios we have chosen to use given the nature of the company.

In addition to being purposely presented with differing companies, you are also being presented with more information than what you need.  This is important because as the leader of a company, it is important to be capable of sifting through the less important data and recognize the “jewels” of information, the most important types of ratios for a given company that will prepare you to make the best financial decisions moving forward.  

Click on the links for the two companies you have chosen.  You will be taken to the Reuters.com “ratios” page that lists all of the most important metrics for a company and compares them to the industry average.  There are many more ratios listed on each company’s page than we are learning about in this month’s class, so it will be important to recognize the ratios explained in the textbook and identify which ones are the most important for the companies you have chosen.  
 

• Wynn Resorts, Inc. (WYNN) 
• Lions Gate Entertainment (LGF)
• Tesla Motors (TSLA) 
• Google, Inc. (GOOG)
• Wal-Mart (WMT)
• Electronic Arts (ERTS) 
• British Petroleum (BP)
• Southwest Airlines (LUV) 

There is also an announcement titled “Entertainment Business Stock Ticker” that contains some additional background information about most of these companies, all packaged into a neat little widget embedded within the announcement.   

Feel free to expand your research using additional sources such as Yahoo! Finance, Google Finance, and the “investor Relations” websites for these companies that includes resources such as conference call archives, annual reports, quarterly reports, etc. 

These are the requirements and main topics that shall be considered for this discussion: 
• Explain the nature of two or three of these companies and the industries they belong to. 
• How does the nature of the business influence a company’s financial structure and performance?
• Which ratios do you believe to be most important for each of the companies that you previously explained? Why?
• Develop a ratio that is meaningful to your own personal business. (ex. the hotel industry uses “occupancy ratio”) Explain the ratio’s field of measure. Also explain the ratio’s strengths and weaknesses.
• Initial post should be completed by Wednesday and must be a minimum of two paragraphs and a maximum of four paragraphs. 
• Cite at least one outside source (In addition to the course materials) that discusses events and/or situations with respect to the entertainment industry.