THE CASE OF THE UNIDENTIFIED INDUSTRIES
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 to research the balance sheet from a well-known online retailer business in Amazon.com, and noticed similarities. Some similarities are the high amount of cash, and high long-term debt. We concluded that the high long-term debt is high due to the company trying to expand.
B. Bookstore Chain
B represents the bookstore chain. They carry large amount of inventories as the books are their main assets. Even though this industry is a retail business, their inventory turnover is low compared to other retail industries. It is because these days, consumers tend to read books and other paper materials online. As a result, they sell less and replenish their stocks less.
C. Online direct factory to customer PC vendor We determined that online direct factory to customer personal computer vendor represented C. Using Exhibit 1 the two key figures that gave us this indication was the high inventory turnover ratio, above average accounts receivable. As an online business normally inventories move fast due to the item being shipped as soon as it has been sold. In using dell computers as an example we saw a similar high turnover ratio. As being a supplier for business as well as personal computers the account receivable figure would also match
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 to research the balance sheet from a well-known online retailer business in Amazon.com, and noticed similarities. Some similarities are the high amount of cash, and high long-term debt. We concluded that the high long-term debt is high due to the company trying to expand.
B. Bookstore Chain
B represents the bookstore chain. They carry large amount of inventories as the books are their main assets. Even though this industry is a retail business, their inventory turnover is low compared to other retail industries. It is because these days, consumers tend to read books and other paper materials online. As a result, they sell less and replenish their stocks less.
C. Online direct factory to customer PC vendor We determined that online direct factory to customer personal computer vendor represented C. Using Exhibit 1 the two key figures that gave us this indication was the high inventory turnover ratio, above average accounts receivable. As an online business normally inventories move fast due to the item being shipped as soon as it has been sold. In using dell computers as an example we saw a similar high turnover ratio. As being a supplier for business as well as personal computers the account receivable figure would also match