Drivers of Industry Financial Structure

Executive summary Ratios of ten companies are presented in this study. The companies are all headquartered in the United States and the financial statements are the most recent annual financials for the respective fiscal years ending in 1999 or 2000. The companies are 1. Developer of prepackaged software 2. On-line retailer 3. warehouse club for fare and general mathematical output 4. major passenger respiratory tract 5. International hotel chain 6. Temporary staffing agency 7. Supermarket marketplace retailer 8. pharmaceutical company 9. Manufacturer of electronic communications equipment 0. Manufacturer and marketer of consumer products analytic thinking 1. Innovation is extremely important in the software industry and it requires investments. The earthy margin is very high 90. 7%. Office buildings and computers are the run needed. High R&038D/Sales 19. 8%. The give the axe prove &038 Equipment is low 8. 6% 2. Receivables are unimportant for an online retailer. No R&038 D since the company sells goods and products from others and it has zero R&038D expense. 3. Warehouse Club for food and general merchandise has high Net Plant &038 Equipment 44. % and zero honorary Revenue. The stock is high 41. 6% comparing with a supermarket grocery retailer. 4. Major passenger airline has some Accounts Payable 13. 0%, high unearned Revenue as a result of prepaid ticket purchases for coming(prenominal) air travel 11. 0%. 5. International hotel chain has high grace 25. 1% 6. Temporary staffing agency has a relatively low percentage of Net Plant. The temporary workers are the main resource of a staffing agency. Because it is a service industry, there is no Inventory and R&038D is non necessary so they are 0.A high Asset Turnover 4. 130. 7. Supermarket grocery retailer is similar with warehouse club for food and general merchandise but the supermarket gross margin in high 26. 5% and exonerate profit margin is lower. High record 21. 9% and high Net Plant &038 Equipment 46. 1%. 8. Pharmaceutical company has a low inventory 8. 0% and a medium size of Net Plant &038 Equipment 27. 2%. The Gross gross profit is pretty high 46. 4%. A common use of the Gross Margin is to estimate a companys breakeven sales volume. (Higgins,2012) 9.Manufacturer of electronic communications equipment has the lower Profit Margin and yearlong Accounts Receivable characteristic of a firm effectively bidding for establishment contracts. 10. Manufacturer and marketer of consumer products have a small size of Inventory 10. 4% and its Net Plant &038 Equipment is 39. 3%. The Unearned Revenues is zero and R&038D/Sales is also 0. Conclusions ?Service Industries Temporary staffing agency, hotel and airline respite sheets are C, D &038 I. I is the temporary staffing agency D is anticipate to be the airline C remains as the hotel R&038D ground Firms Software, On-Line Retailing, Pharmaceutical and Communication Equipment. Financial statement candidates would be A, F, G &038 J. J is the software firm A is clearly the online retailer since it is losing. G is the communication equipment firm because it has the lower Profit Margin and higher Accounts Receivable. F remains the pharmaceutical firm because it has higher Margins collectible to the capacity to keep high drug prices. It also spends a meaningful amount on R&038D while the competition is endlessly coming up with a new product. Consumer or Retail Based Warehouse Club, Supermarket and Consumer Products firm. Remaining financial statements are B, E &038 H. B &038 H have low Accounts Receivable, Margins and high Inventory turnover so mustiness be the warehouse club and the supermarket. E must be the consumer product company. B must be the grocery chain since it has the higher markup and higher expenses relative to H. H, by process of elimination, is the warehouse club. References Higgins, Robert C. (2012) Analysis for Financial Management, tenth edited by The McGraw-Hill Companies, Inc