Selecting a benchmark company

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Reference no: EM13858178

Selecting a benchmark company:

The National Semiconductor Corporation (NSM) develops and manufactures semiconductors for electronic systems. The firm's products are used in a variety of applications, including LED lighting, high speed communication, renewable energy, and security and surveillance. The company's chief financial officer (CFO) has a report prepared annually that compares the firm's performance to several key competitors. The CFO has identified Analog Devices (ADI) and Texas Instruments (TXN) as key competitor. Selected information for all three companies is given below for the twelve month period ended June 2009. Based on this information, which of the two companies appears to be the beast match for a performance benchmark and why?

 

National Semiconductor (NSM)

Analog Devices Inc. (ADI)

Texas Instruments (TXN)

Revenue (billions)

$1.64

$2.27

$11.32

Gross margin

64.41%

58.83%

46.80%

Operating margin

25.35%

20.09%

17.67%

Net income

220.20M

349.78M

1.28B

Earnings per share

0.924

1.225

0.978

Price to earnings ratio

15.56

20.48

21.31

 

Reference no: EM13858178

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