etail Store, Dru ustry

Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter12: Fainancial Statement Analysis
Section: Chapter Questions
Problem 48CE
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QUESTION 4
a) Below are selected ratios for three companies which operate in three different industries:
Discount Retail Store, Drug and Utility.
Industry
COGS/Sales
A
B
80%
58%
n/a
R&D/Sales
0%
7%
0.1%
Advertising/Sales
Interest/Sales
Net Income/Sales
Return on Assets
Inventory Turnover
Accounts receivable
Not defined
3%
0.1%
0.9%
1%
6%
2.5%
10%
10%
8.5%
10.6%
7.2%
5.5
4
n/a
100
9
turnover
Long term
debt/equity
n/a= not applicable
60%
50%
92%
Identify which industry each of the companies A, B and C operate in. Give TWO (2)
reasons for each of your selections.
Transcribed Image Text:QUESTION 4 a) Below are selected ratios for three companies which operate in three different industries: Discount Retail Store, Drug and Utility. Industry COGS/Sales A B 80% 58% n/a R&D/Sales 0% 7% 0.1% Advertising/Sales Interest/Sales Net Income/Sales Return on Assets Inventory Turnover Accounts receivable Not defined 3% 0.1% 0.9% 1% 6% 2.5% 10% 10% 8.5% 10.6% 7.2% 5.5 4 n/a 100 9 turnover Long term debt/equity n/a= not applicable 60% 50% 92% Identify which industry each of the companies A, B and C operate in. Give TWO (2) reasons for each of your selections.
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Follow-up Question
QUESTION 4
a) Below are selected ratios for three companies which operate in three different industries:
Discount Retail Store, Drug and Utility.
Industry
COGS/Sales
R&D/Sales
Advertising/Sales
Interest/Sales
Net Income/Sales
Return on Assets
Inventory Turnover
Accounts receivable
turnover
Long term
debt/equity
n/a= not applicable
80%
0%
Not defined
0.9%
2.5%
8.5%
5.5
100
A
60%
58%
7%
3%
1%
10%
10.6%
4
6
50%
B
n/a
0.1%
0.1%
6%
10%
7.2%
n/a
9
92%
с
Identify which industry each of the companies A, B and C operate in. Give TWO (2)
reasons for each of your selections.
Transcribed Image Text:QUESTION 4 a) Below are selected ratios for three companies which operate in three different industries: Discount Retail Store, Drug and Utility. Industry COGS/Sales R&D/Sales Advertising/Sales Interest/Sales Net Income/Sales Return on Assets Inventory Turnover Accounts receivable turnover Long term debt/equity n/a= not applicable 80% 0% Not defined 0.9% 2.5% 8.5% 5.5 100 A 60% 58% 7% 3% 1% 10% 10.6% 4 6 50% B n/a 0.1% 0.1% 6% 10% 7.2% n/a 9 92% с Identify which industry each of the companies A, B and C operate in. Give TWO (2) reasons for each of your selections.
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