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:
Developer of prepackaged software
Warehouse club for food and general merchandise
Major passenger airline
International hotel chain
Temporary staffing agency
Supermarket grocery retailer
Manufacturer of electronic communications equipment
Manufacturer and marketer of consumer products
Innovation is extremely important in the software industry and it requires investments. The gross margin is very high: 90.7%. Office buildings and computers are the services needed. High R&D/Sales: 19.8%. The Net Plant & Equipment is low: 8.6% 2.
Receivables are unimportant for an online retailer. No R&D since the company sells goods and products from others and it has zero R&D expense. 3.
Warehouse Club for food and general merchandise has high Net Plant & Equipment 44.8% and zero Unearned Revenue. The Inventory 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 future air travel 11.0%. 5.
International hotel chain has high Goodwill: 25.1%
Temporary staffing agency has a relatively low percent 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&D is not 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 higher 26.5% and net profit margin is lower. High inventory 21.9% and high Net Plant &Equipment 46.1%. 8.
Pharmaceutical company has a low...
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