Identify The Industries

answer the main post:

Directions:

For this discussion, read

After reading the document, complete the matching exercise and note why you made your decisions. Then post your answers to the discussion board for comment. This will count as your first post.

Post an additional comment replying to a classmate’s answers to the case. This board closes at the end of the week 4.

Meets Module Objectives 1 and 3.

Professor will grade all assignments within 7 days of student submission.

2.Comment on peer post:

Reply from Stefany Guerra Gomez

Company 1 corresponds to a bank (B) because most of its assets are tied up in investments at 67%, not physical items. There is no inventory at all and almost no PP&E that accounts 1%, which tells us this company is not producing or selling goods. The very high current and quick ratios 11.85 suggest the company keeps a lot of liquid resources available, which is important for banks that must be able to meet withdrawals and other short-term obligations. Overall, the companys structure is centered on managing money rather than operating facilities.

Company 2 fits well as a department store (D) because it balances inventory at about 7% of total assets with a large investment in PP&E, which makes up roughly 49% and likely it represents store locations, fixtures, and in-store infrastructure. The receivables turnover of 15.13 suggests frequent customer transactions, often tied to store credit or short-term payment cycles. A gross margin close to 45% further supports this match, since department stores typically price higher than discount retailers while still relying on high sales volume through physical locations.

Company 3 matches an airline (A) based on how asset oriented it is. PP&E accounts for about 64% of total assets, which strongly points to expensive equipment such as aircraft. The company holds no inventory, which makes sense given that airlines sell transportation services rather than physical products. A current ratio of 0.73 indicates tight liquidity, and profitability remains modest, reflecting the high operating costs and thin margins that are common in the airline industry.

Company 4 aligns with an internet service provider (J) because it carries no inventory, very little in receivables, and relies heavily on debt. Long-term debt exceeds 250%, which suggests significant investment in network and infrastructure assets. The company is also unprofitable, with a net profit margin of negative 20.42%, which fits an industry where large upfront costs and intense competition often put pressure on earnings.

Company 5 shows the classic signs of a fully integrated oil company (K). PP&E represents about 70% of total assets, reflecting major investments in drilling equipment, refineries, and transportation infrastructure. The presence of inventory supports the idea that the company handles physical commodities. Profitability is steady but not extreme, which is consistent with oil companies that are influenced by fluctuating energy prices but supported by large-scale, asset intensive operations.

Company 6 matches a pharmaceutical manufacturer (L) because it generates a high gross margin of about 55.57%, reflecting strong pricing power from patented drugs. Intangibles account for roughly 8% of assets, supporting the importance of research, patents, and intellectual property. PP&E represents about 57% of assets, indicating investment in specialized manufacturing facilities. Even with lower liquidity, returns remain strong, which is typical in an industry driven by innovation and exclusivity.

Company 7 is a strong fit for the software industry (N). It carries almost no inventory, relies minimally on physical assets, and generates extremely high gross margins of about 81.05%. Profitability is also very strong, with return on equity close to 68%, showing how software companies can scale revenue without significantly increasing costs. The business clearly creates value through ideas and code rather than physical production.

Company 8 looks like an internet retailer (I) because inventory makes up about 34% of total assets while PP&E accounts for only about 1%, suggesting the company sells products without operating many physical storefronts. Days inventory outstanding exceed 270 days, pointing to large warehouses and a broad product assortment. This pattern is common for online retailers that prioritize product availability over fast inventory turnover.

Company 9 fits a securities brokerage (M) because it holds high levels of cash and receivables, carries no inventory, and has minimal physical assets. The very high receivables turnover reflects frequent trading activity rather than traditional product sales. This balance sheet structure supports a business model focused on financial transactions, client accounts, and market activity.

Company 10 aligns with an insurance company (H) due to the heavy presence of intangibles, which account for about 44% of total assets, along with low inventory and moderate physical assets. Insurance companies collect premiums, invest those funds, and manage long-term obligations, which explains this asset mix. Profitability appears steady but conservative, reflecting the long term and risk managed nature of insurance operations.

Company 11 matches a discount retailer (E) because inventory represents about 19% of assets, while gross margins remain low at roughly 22.36%. Inventory turnover is relatively fast, suggesting a focus on selling high volumes at lower prices. This pattern reflects a business model built on efficiency, price competitiveness, and rapid movement of goods rather than premium pricing.

Company 12 fits a cereal manufacturer (G) because it carries significant inventory, maintains strong PP&E, and shows stable but moderate margins. Food manufacturers typically operate with longer production and storage cycles, which explains the inventory levels. The asset structure supports large scale processing and packaging rather than direct consumer retailing.

Company 13 aligns with a brewery (C), with inventory making up about 29% of assets, reflecting the need for aging and storage of product. Gross margins are around 38%, higher than basic food manufacturers but lower than software or pharmaceutical firms. Breweries require both production facilities and time-intensive inventory management, both of which are visible in the data.

Company 14 stands out as a fast food retailer/franchiser (F) because it reports an extremely high gross margin of about 95.38 % while carrying minimal inventory. This suggests that most revenue comes from franchise fees and royalties rather than directly operating restaurants. The limited reliance on physical assets combined with strong profitability clearly supports a franchising-based business model.

• No need to go in great details, answers do not have to be long. Straight to the point!