Drivers of Industry Financial Structure Essay

5. Computer software developer: the matching industry is F. As a software developer, it focus on provide services. However, there will be few percentages in inventories like software CD-ROM. Hence, computer software developer would be C, D, F, H or L. Additional; Computer software developer focus on wholesale. Therefore, the inventory turnover ratio will be low, C, Hand L can be excluded. Because of the service type would be online; computer software developer will be low percentage of plant and equipment. So computer software developer must be F which has only 4% of balance. For instance, Microsoft is the biggest computer software developer. The current ratio in this industry is the highest which is 2.18. Moreover, net profit/ total assets is 0.181 which is greatest in the fourteen industries. Therefore computer software developer industry is the most profitability. The receivables collection period in this industry is 77 which is the fourth longest of the fourteen.

2) I have a competitive advantage over other telecommunications company by providing the best telephone lines. Some companies may provide better internet or wireless but we provide all three of those services at a great rate with the most reliable landline service and for a business

Financial ratio analysis is a valuable tool that allows one to assess the success, potential failure or future prospects of the company (Bazley 2012). The ratios are helpful in spotting useful trends that can indicate the warning signs of

Account Cash Accounts receivable Inventory Supplies Computer equipment Accumulated depreciation Accounts payable Note payable, long-term Jerry Mobile, capital Jerry Mobile, withdrawals Sales revenue Cost of goods sold Depreciation expense

1. Please conduct a financial ratio analysis using the data in Exhibit 2. How do the results reflect different strategies pursued by the 4 firms?

“The use of ratio analysis is rather like solving a mystery in which each clue leads to a new area of inquiry” (2005, Block & Hirt, p. 55, chap. 3). These ratios help to make pro forma determinations for future years. The first step to making any predictions is to review the current year and past year ratios, making comparisons and determining areas of strengths and weaknesses. Larger companies may require a review of the past five-year’s ratios to obtain detailed analyses of these areas. For this review, we are concentrating on the years 2007 and 2006 and have prepared the following rations for review:

Firm G has much higher receivables than Firm H. (60.7 to 4.4) This would indicate that Firm G is the one that sells largely on credit. Firm G has lower inventory than Firm H. (12.2 to 29.7) This would

This paper examines financial ratio analysis by defining, the three groups of stakeholders that use financial ratios, the five different kinds of ratios used and their applications, the analytical tools used in analysis, and finally financial ratio analysis limitations and benefits.

Firm G has a large percentage of assets consisting of accounts receivable (51%), yet it has no inventory. This would suggest that the firm is based on services that require payments in installments. Furthermore, it has a large percentage (46%) dedicated to accounts payable suggesting that it is making payments to other firms. A health management organization would fit this description because it receives payments from customers and would pay hospitals and other health care providers. HMOs act as liaisons between consumers and health care providers and the financial data for Firm G would be suggest that it the case.

Comparable companies were needed in order to calculate the WACC for each business segment. The comparable companies were chosen using the following measurements: similar product lines, revenues, and bond ratings. Alltel Corporation, Sprint Corporation, and Bellsouth Corporation were determined to be comparable companies for Teletech’s Telecommunications Segment. Avaya Inc., Lucent Technologies, and Commscope Inc. were comparable comps for the Product and Systems Segment. (see Exhibit 1). The three comps for each segment were than averaged to create an appropriate WACC for each separate segment of Teletech.

Before beginning an analysis of a company it is necessary to have a complete set of financial statements, preferably for the pas few years so that historical trends can be obtained. Ratios are a way for anyone to get an idea of the financial performance of a company by using the information contained in the financial statements. Ratios are grouped into four basic categories, liquidity, activity, profitability, and financial leverage. This document will use a variety of these ratios to analyze the firm, Sample Company, as of December 31,2000.

In order to find out the exact firm by analysing the financial structure of typical firms, first we need to separate those firms which have zero inventory turnover (A, B, F and H) from those firms which have zero debt ratio which in our case are (E, H and J) and we use the information to narrow down the possibilities of each firm. In this case there are three groups of companies:

Part 1 : Examine and analyze the financial ratios for eight pairs of unidentified companies and match the description of the company with the financial profile derived from the financial ratios.

selected financial ratios computed from fiscal year 2011 balance sheets and income statements for 13 companies from the following industries:              airline railroad pharmaceuticals commercial banking photographic equipment, printing, and sales discount general-merchandise retail electric utility fast-food restaurant chain wholesale food distribution supermarket (grocery)

Several financial ratios can be considered when looking at a company’s economic performance. However, given all the possibilities it is important to focus on a few key areas that are functionally related. Therefore, for the purpose of analyzing Halliburton’s financial position as well as its competitors, some common ratios can be used such as current ratio, debt-to-total assets, inventory turnover, average collection period, net profit margin, and return on total assets (ROA).