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Drivers of Industry Financial Structure

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Drivers of Industry Financial Structure

A: Online Retailer

Receivables negligible
Negative Profit

B : Supermarket

High inventory but less than that of the warehouse club


No investment in R &D
Good will
People pay bills after purchasing. Thus zero unearned revenue

C: International Hotel Chain


Goodwill
Low inventory
Payment after Check out .So no unearned revenue
Inventory turnover not meaningful
D: Passenger Airline
Plant and Equipment Cost high
Unearned Revenue high
Zero inventory
E: Consumer Products Manufacturer

Considerable amount of inventory


Goodwill
High investment in Plant and equipment

F: Pharmaceutical Company
Investment in R &D high
Goodwill
Low inventory
Considerable days of receivables
G: Electronics equipment manufacturer

Investment in R &D
Low inventory

It differs from Pharmaceutical as Income/sales is high in Pharma

H: Warehouse Club for food and general merchandise


Higher inventory as compared to supermarket
No investment in R&D
Zero unearned Revenue
I: Temporary Staffing Agency
No inventory
No investment in R&D
Receivables high
J: Development of prepackaged Software
No inventory
High investment in R&D
High Gross Margin
Investment in Plant and Equipment low

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