Question
I do not know how to match and explain, please help me. The information are in the below paragraph and the picture (link). (Do not
I do not know how to match and explain, please help me. The information are in the below paragraph and the picture (link).
(Do not have incomplete data, all data are given out)
Financial characteristics of companies vary for many reasons. The two most prominent drivers are industry economics and firm strategy.
Each industry has a financial norm around which companies within the industry tend to operate. An airline, for example, would naturally be expected to have a high proportion of fixed assets (airplanes), while a consulting firm would not. A steel manufacturer would be expected to have a lower gross margin than a pharmaceutical manufacturer because commodities such as steel are subject to string price competition, while highly differentiated products like patented drugs enjoy much more pricing freedom. Because of each industry's unique economic features, average financial statements will vary from one industry to the next.
Similarly, companies within industries have different financial characteristics, in part of the diverse strategies that can be employed. Executives choose strategies that will position their company favorably in the competitive jockeying within an industry. Strategies typically entail making important choices in how a product is made (e.g. capital intensive versus labor intensive), how it is marketed (e.g., direct sales versus the use of distributors), and how the company is finances (e.g., the use of debt or equity). Strategies among companies in the same industry can differ dramatically. Different strategies can produce striking differences in financial results for firms in the same industry.
The following paragraphs describe pairs of participants in a number of different industries. Their strategies and market niches provide clues as to the financial condition and performance that one would expect of them. The companies' common-sized financial statements and operating data are presented in a standardized format in the picture. Match the financial data with the company descriptions and explain the differences in financial results across industries.
1 mark for each correctly identified company and 2 marks for explanation by 2 financial ratios or financial statements' items that are different for a pair of firms from the same industry
E.g., let us know why you believe that these 2 financial ratios which you selected, match with the paragraphs on companyE andF in theComputers industry.
Computers
Companies E and F sell computers and related equipment. One company sells high-performance computing systems ("supercomputers") to government agencies, universities, and commercial businesses. It has experienced considerable growth due to an increasing customer base. The company is financially conservative.
The other company sells personal computers as well as handheld devices and software. The firm has been able to differentiate itself by using its own operating system for its computers and by creating new and innovative designs for all its products. These products carry premium prices domestically and globally. The company follows a vertical integration strategy starting with owning chip manufacturers and ending with owning its own retail stores.
Picture link:
https://ibb.co/Z2gCmD3
https://ibb.co/0sj5dhf
https://ibb.co/cXDfZvJ
Newspapers
Companies I and J are newspaper companies. One company owns and operates two newspapers in the southwestern United States. Due to the transition of customer preference from print to digital, the company has begun offering marketing and digital-advertising services and acquiring firms in more profitable industries. The company has introduced cost controls to address cost-structure issues such as personnel expenses.
Founded in 1851, the other company is renowned for its highly circulated newspaper offered both in print and online formats. This paper is sold and distributed domestically as well as around the world. Because the company is focused largely on one product, it has strong central controls that have allowed it to remain profitable despite the fierce competition for subscribers and advertising revenues.
Picture link:
https://ibb.co/80D7tT7
https://ibb.co/QY8BTNc
https://ibb.co/ZHnJVXd
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