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Financial statements and financial ratios can reveal industry-specific differences in financial and operational strategies. Company fundamentals are often similar within an industry, but they may
Financial statements and financial ratios can reveal industry-specific differences in financial and operational strategies. Company fundamentals are often similar within an industry, but they may vary ignificantly across industries. A manufacturing company, for example, should have higher fixed assets i.e., property, plant, and equipment) than a company from service industry. The number of accounts eceivable days for a bank should be higher than those for a non-financial firm, because banks offer long erm loans, whereas non-financial firms rarely offer credit over long periods. The goal of this exercise is to improve your understanding of financial statement analysis and financial ratio analysis by recognizing industry-specific differences. Financial information of 10 undisclosed companies (A to J) that operate within 10 different industries has been provided, including each company's commonize balance sheet (see Exhibit 1), income statement (see Exhibit 2), and financial ratios (see Exhibit 3). Financial statements and financial ratios can reveal industry-specific differences in financial and operational strategies. Company fundamentals are often similar within an industry, but they may vary ignificantly across industries. A manufacturing company, for example, should have higher fixed assets i.e., property, plant, and equipment) than a company from service industry. The number of accounts eceivable days for a bank should be higher than those for a non-financial firm, because banks offer long erm loans, whereas non-financial firms rarely offer credit over long periods. The goal of this exercise is to improve your understanding of financial statement analysis and financial ratio analysis by recognizing industry-specific differences. Financial information of 10 undisclosed companies (A to J) that operate within 10 different industries has been provided, including each company's commonize balance sheet (see Exhibit 1), income statement (see Exhibit 2), and financial ratios (see Exhibit 3)
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