THE CASE OF THE UNIDENTIFIED INDUSTRIES

1236 Words May 13th, 2015 5 Pages
THE CASE OF THE UNIDENTIFIED INDUSTRIES
West Coast Finance

In the Case of the Unknown Industries, we matched several industries with their corresponding balance sheets. We used several different methods to come up with our conclusion. An important factor we had to remember was the economic state industries were in their respective year.

A. Online Retailer
This set of data belongs to the online retailer industry. The most significant categories that helped with our decision was the low inventory for a retail business and the relatively high inventory turnover. The reasoning behind the high inventory turnover was because the goods were allowed to sit in storage until sold because of the online aspect of the business. We were also able
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I. Retail Grocery Chain
Retail grocery chain reflects I on Exhibit 1. The reasons for this conclusion are the high and wide varieties of inventory that are sold to consumers and the high plant and equipment are used to store, move, and facilitate the inventory. Another reason was the receivable collection period (days). Retail grocery chains have a low collection period because they are paid by cash or by card. Either method of payment is received within a few days. Also, the high revenue/total assets indicates the high volume of sales a retail grocery chain would have.

J. Department Store Chain J reflects department store chain. This industry is a retail business; therefore, there is a large amount of inventories. This industry also has high accounts receivable because usually customers pay with credit cards which are billed at the end of the month. However, sometimes, customers forget to pay their bills on time, and the bills are brought to next month. Therefore, the collection period is approximately 2 months.

K. Retail Drug Chain
Retail drug chain matches with K. It also has a similar balance sheet as retail grocery chain; however, some of the financing retail drug chains have received is through the sale of stocks, which shows are the large amount in common stock. Another distinction