Match the companies in the table below with their industry using the financial statement data provided in
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Question:
Match the companies in the table below with their industry using the financial statement data provided in Exhibits 2, 3, and 4.?
Broader Classification | Industry | Characteristics | Company No. | Reason |
Service Industry | Mobile phone service operator | Mobile phone service operators would be expected to have high receivables, low inventories, and high property, plant, and equipment | ? | ? |
Capital-Intensive Industry | Liquor producer and distributor | A liquor company would have high inventories, high day's inventory (spirits must age with time), and high selling, general administrative expenses because the product is heavily advertised and branded | ? | ? |
Large integrated oil and gas company | An oil and gas company would be expected to have proportionately more inventories than an airline. An?airline might be more capital intensive | ? | ? | |
Discount airline | ? | ? | ||
High-Tech Industry | R&D-based semiconductor manufacturer | High technology industries would be expected to have high research and development intensity (ratio of R&D expenses to sales), and high return on sales (patent protection, brand value). They may also have low debt ratios because of the low collateral value of intangibles or growth opportunities. | ? | ? |
R&D-based pharmaceutical manufacturer | High technology industries would be expected to have high research and development intensity (ratio of R&D expenses to sales), and high return on sales (patent protection, brand value). They may also have low debt ratios because of the low collateral value of intangibles or growth opportunities. A pharmaceutical manufacturer would be expected to have the high gross profit margin and high inventories, and a high day's inventory. | ? | ? | |
Computer software company | High technology industries would be expected to have high research and development intensity (ratio of R&D expenses to sales), and high return on sales (patent protection, brand value). They may also have low debt ratios because of the low collateral value of intangibles or growth opportunities. A software company would be expected to have proportionately lower inventories and plant, property, and equipment | ? | ? | |
Financial Industry | Commercial bank (items fitted into the same categories as the non-financial firms) | Firms in the financial industry could be expected to have high receivables (loans) and payables (deposits, other loans), a large ratio of assets to stockholders' equity (Dupont leverage), and little inventory. Financial firms would also be expected to have low asset turnover ratios. They might also have a high gross profit percentage, i.e., net interest margin (interest revenue less interest income). | ? | ? |
Retail Industry | Retail grocery company | Retail firms would be expected to have lots of inventory, relatively low gross profit percentage, and low returns on sales (less than 4%), and high asset turnover | ? | ? |
Related Book For
Fundamentals Of Corporate Finance
ISBN: 9780135811603
5th Edition
Authors: Jonathan Berk, Peter DeMarzo, Jarrad Harford
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