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The Following Selected Financial Data Pertain to Four Companies: a Hotel

Question 98

Essay

The following selected financial data pertain to four companies: a hotel, a travel agency, a meat packing company and a pharmaceutical company.
Required: Match each with the financial information and explain why you made your choice as you did.
Balance Sleet Data(conmonent percentages)CashAccounts ReceivableInventoryProperty, Plant & EquipmentIncome Statement Data(conmonent percentages)GrossProfitProfit before TaxesRatiosCurrent ratio (over the last five years)Inventory turnover ratioDebt-to-equity ratioCompany17.228.021.432.015.21.81.627.81.8Company222.040.00.519.0 Not Applicable 3.31.3 Not Applicable 2.3Company 36.03.40.975.1Not Applicable2.50.5Not Applicable5.8Company 411.223.027.425.044.07.01.83.41.4\begin{array}{c}\begin{array}{|l|}\hline \text {Balance Sleet Data}\\\text {(conmonent percentages)}\\\hline \text {Cash}\\\hline \text {Accounts Receivable}\\\hline \text {Inventory}\\\hline \text {Property, Plant \& Equipment}\\\hline \\\hline \text {Income Statement Data}\\\text {(conmonent percentages)}\\\hline \text {GrossProfit}\\\hline \text {Profit before Taxes}\\\hline \\\hline \text {Ratios}\\\hline \text {Current ratio (over the last five years)}\\\hline \text {Inventory turnover ratio}\\\hline \text {Debt-to-equity ratio}\\\hline \end{array}\begin{array}{l|}\hline\text {Company}\\ \mathbf{1} \\\hline 7.2 \\\hline 28.0 \\\hline 21.4 \\\hline 32.0\\\hline\\\hline\\\\\hline 15.2 \\\hline 1.8 \\\hline\\\hline\\\hline 1.6 \\\hline 27.8 \\\hline 1.8 \\\hline\end{array}\begin{array}{l|}\hline\text {Company}\\ \mathbf{2} \\\hline 22.0 \\\hline 40.0 \\\hline 0.5 \\\hline 19.0 \\\hline \\\hline \\\\\hline \text { Not Applicable } \\\hline 3.3 \\\hline \\\hline \\\hline 1.3 \\\hline \text { Not Applicable } \\\hline 2.3 \\\hline\end{array}\begin{array}{l|}\hline\text {Company 3}\\\\\hline6.0 \\\hline3.4 \\\hline0.9 \\\hline75.1\\\hline\\\hline\\\\\hline\text {Not Applicable}\\\hline2.5\\\hline\\\hline\\\hline0.5\\\hline\text {Not Applicable}\\\hline5.8\\\hline\end{array}\begin{array}{l|}\hline\text {Company 4}\\\\\hline11.2\\\hline23.0 \\\hline 27.4 \\\hline 25.0\\\hline\\\hline\\\\\hline44.0\\\hline7.0\\\hline\\\hline\\\hline1.8\\\hline3.4\\\hline1.4\\\hline\end{array}\end{array}

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Company 1: Meat packing company (high in...

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