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Ratios Tell a Story

In: Business and Management

Submitted By patrickyuan
Words 381
Pages 2
Baikang Yuan
Professor Gary Osmond
FINA 3301 Section 07
Assignment: Ratios Tell A Story
09/24/2015
Ratios Tell A Story Commercial banking, tax preparation and diversified financial services, and computer software development are three industries that have no inventory. So they match No.2, No.4 and No.11. Since developing computer software needs more development expense, No.2 has the highest research and development expense ratio, thus it matches computer software development. Commercial banking has a lot of loans and deposits. No.11 has the highest account receivable and the highest current liabilities so that it matches commercial banking. Then, No.4 matches tax preparation and diversified financial services. Wholesale food distribution has high inventory and its ROS&ROA should be lower than other industries. No.10 matches it best because it has the highest inventory and very low ROS and ROA. Pharmaceutical needs very high research and development expense. Also, we know that pharmacy is a really high-profit business, so its ROS should be very high. No.9 matches it because it has the highest research and development ratio and the highest ROS. Electric utility needs a great number of equipment. No.5 matches it because it has the highest net property, plant and equipment. No.12 matches computer and office equipment production and servicing because it has the second highest net property, plant and equipment. No.6 matches supermarket chain because it has the lowest account receivable and receivables collection and also, it has a higher net property, plant and equipment. No.1 matches fast food restaurant chain because it has a low account receivable and the lowest receivables collection. No.7 and No.8 are pretty similar, so I think they match airline and railroad. No.7 has higher Inventory and lower Inventory Turnover, so it matches airline because…...

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