Drivers of Industry Financial Structure and Be Our Guest Essay Example
Drivers of Industry Financial Structure and Be Our Guest Essay Example

Drivers of Industry Financial Structure and Be Our Guest Essay Example

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  • Pages: 3 (573 words)
  • Published: May 11, 2017
  • Type: Essay
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Drivers of Industry Financial Structure

J. Development of prepackaged software

Investment in innovation is extremely important in the software industry. Thus, the R&D/Sales ratio is high. Additionally, as their products are technology-based, there is no inventory, and the gross margin is almost 91%, making it very high. The required facilities for this industry are limited to an office building and computers. Consequently, the net plant and equipment are low.

A. On-line retailer

Receivables are nonexistent as individuals pay in cash or with credit cards when shopping online. Receivables are minimal for on-line retailers.

D. Major passenger airline

The reason for the high net plant & equipment is that major passenger airlines rely on their fleet of planes as their primary assets for transporting passengers and generating profits. This is because people typically book and pay for their tickets in advance before

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completing their journey, resulting in high unearned revenue. On the other hand, international hotel chains primarily offer services and accommodations, resulting in a low and negligible inventory. Additionally, money is collected from credit cards after guests check out of the hotel, eliminating the presence of unearned revenue. The main assets of hotel chains are buildings, contributing to the high net plant & equipment value.

Temporary staffing agencies provide a service by connecting corporate clients with individuals who possess the required skills for the job. Unlike other industries, staffing agencies do not require inventory or investment in research and development. Supermarket grocery retailers and warehouse clubs for food and general merchandise are similar in terms of having high net plant and equipment and zero unearned revenue. However, warehouse clubs have a higher inventory as they maintain larger quantities of products for wholesal

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purposes.

Compared to supermarket grocery retailers, pharmaceutical companies and manufacturers of electronic communications equipment have a lower gross margin but a higher net profit margin. While the common size financial balance sheets of these two industries share similarities in long days of receivables, investment in R&D, and net plant & equipment, the pharmaceutical company stands out with a much higher net income/sales ratio.

E. Manufacturer and marketer of consumer products. The length of time it takes to receive payment is prolonged because retailers frequently pay the manufacturer after selling products and returning excess ones. Manufacturers must invest in net plant & equipment. Welcome to Be Our Guest, Inc. The crucial factors for achieving success in the equipment rental industry are service quality. To begin with, this company made investments in a more sophisticated inventory and upheld the quality of their inventory.

The facility's primary goal was to ensure efficient delivery, prioritizing speed and accuracy. Moreover, the company placed great emphasis on its quick turnover strategy and differentiated itself in the market through superior service quality and inventory rather than relying on low prices. The company has exhibited a notable seasonal pattern in its business performance over recent years. As per the quarterly income statement, the majority of its yearly net earnings were generated during the first and second quarters. Nevertheless, it began the year with a loss.

In the fourth quarter, the company faced a cash shortage and experienced a notable rise in accounts receivable as a result of a thriving business. From 1994 to 1997, the gross margin remained steady, while the net profit margin showed a considerable decline. This decrease can be linked to escalating general

and administrative salaries, indicating inadequate cost management within the company.

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