Unidentified Industries

Topics: Balance sheet, Accounts receivable, Asset Pages: 3 (783 words) Published: November 21, 2011
The first one I figured out is “N”- commercial bank.
N- there is no inventories in commercial bank. Compare to the other factor, accounts receivable occupies the biggest portion about 90 percent, which means commercial bank loan money to clients. As a result, it has a very long receivable collection period for 4071 days. In the meanwhile, clients would save money into commercial bank which lead to high notes payable-73%.

There are 3 industries without inventories left.(M,E,G)
M- In comparison with the other factors in balance sheet, airline’s inventories could be ignored, especially, with plant & equipment because the business owns very expensive equipment-airplane. In addition, the lowest ROE in the balance sheet accord with the reality that competitive between airlines are intensive.

E- advertising agency. First, it is definitely with no inventories. Second, because of the given information( half of the total revenue derived from commissions that equal 15% of media purchases for clients), we could tell that this business is not so profitable and has high accounts payable . So compare the rest two options(E and G ), ROA of E is much lower. So advertising agency has more likely to be E.

G- G is health maintenance organization which is the last one without inventories. Also, it has no current assets. Due to various kinds of payments for HMO, for example, insurance, government pension, etc, it has high accounts receivable and long receivable collection period.

Since online store has lower plant & equipment and ROA, A,C could be options.

C-This one is online direct factory to customer personal computer vendor. Because more than half of sales to business customers and most manufacturing outsourced, it has higher accounts receivable which some of them should be paid by manufacturers. Also, according to the sales situation which leads to high inventory turnover.

A-Referred to online book seller, besides we mentioned above, it has...
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