Engineering Economics

595 Words Feb 11th, 2014 3 Pages
Based on analysis the operating and competitive characteristics of the balance sheets and some key financial ratios of five different industries, we can make a conclusion that A is the electric utility, B is the discount general merchandise retailer, C is the upscale apparel retailer, D is the Japanese automobile manufacturer, and E indicates the automated test equipment/systems company.

According to the column A, the data indicates a highest property and equipment percentages (74.5%) and lowest sales/net property & equipment ratios (0.43) among all industries which means this particular industry requires a relative high cost for the property and equipment purchase and the sale prices is relatively lower. However, if we look at the
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This because the upscale apparel is usually marketed with a higher sale prices but has lowest cost, which will cause a relative high profit. Also, during the economic crisis, customers would has less purchase power to buy expensive unnecessary life product in a short time, and it might take longer time for them to decide to buy a luxury product, which results in a 30.9% receivables. The column D indicates the Japanese automobile manufacturer, which can be explained by analysis the characteristics of receivables and collection period. Under the financial crisis, the purchase power for customers to buy a new car would decrease, and with a high pressure of loans and debts, the time for customer to pay back the purchase loans would be longer, which also took a longer time for the manufactory to collect the sale’s money back. Also, customers would less likely to purchase a new car because of the higher unemployment rate and higher inflation rate in 2009, which resulted in a 39.8% receivables, and pretty low ratio of net profit/net sales. In column E, the high ratio of days of inventory indicates that the industry has experienced difficulty to sell the products with certain of time periods. For the automated test equipment/systems company, the equipment and systems usually are used by the large scale industries, universities and research labs. Under the economic crisis, the profits and productivity of the large scale industries would be affected, and
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