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Business Case Analysis: Sherwin-Williams Case

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Sherwin-Williams
CASE ANALYSIS
MARTIN SMITH PB 721 - 03
06 /23 /2015

Overview
• Sherwin-Williams (SHW), ranked 278 on the fortune 500 list, manufactures, develops, distributes and paints, coatings and related products to professional, industrial, commercial and retail customers.
(1) SHW is the largest coatings manufacturer in the United States and third-largest worldwide. (1)
• In 2014, PPG Industries, Inc. (PPG) , ranked number 190 on the fortune 500 list, manufactures and distributes a variety of coatings, specialty materials and glass products.(2)
• PPG Industries is a competitor of SHW in the Specialty Chemical (Painting & Coating) Industry.

Current Ratio

2

1.8

1.6

1.4 CURRENT RATIO

1.73 1.74
1.59 …show more content…
These two companies express concerns about currency conversions and sluggish European and Latin American markets.
• Even though, SHW and PPG’s PMOS is lower than the industry average, it is apparent management has effectively manage expenses and working capital to increase PMOS over the years.

Asset Turnover

2.5 ASSET TURNOVER

1.95
2

1.5

1.53 1.6

1 0.85 0.9 0.87 PPG SHW

0.5

0
2 01 2 2 01 3 2 01 4

Asset Turnover
• SHW asset turnover has been trending higher, this is a sign that management has effectively used their assets in generating revenue.
• PPG asset turnover ratio has been stagnant. This could mean PPG is heavily invested in assets (inventory, manufacturing equipment) .
• 2014
• SHW is above the industry asset turnover average of 1.07 at 1.95. It is apparent SHW is becoming efficient and invested in continued growth.
• PPG is below the industry average at .87. This could mean PPG has assets that are doing nothing. (excess cash or hand and inventory sitting).

Return on Assets

25.00% RETURN ON ASSETS

20.00% 20.37%

15.00%

10.00%

10.12%

11.79% 15.17%

11.95%

PPG

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