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Industries differ on both internal and external dimensions. Internal issues such as culture and operating models are often specific to industries, while the external issues
Industries differ on both internal and external dimensions. Internal issues such as culture and operating models are often specific to industries, while the external issues of the marketplace and competition will vary from industry to industry. Financial accounting provides managers with the tools to quantify these issues, and financial ratio analysis can provide the astute manager with insights into these industry differences. In this case, you are given a list of nine industries and a table of nine sets of common sized statements and financial ratios. Your task is first to consider each industry—the typical operating models of the business, the market and customer factors, and the competitive nature of the industry, and how these characteristics might manifest themselves in the selected financial ratios. Starting with these qualitative issues, then match the industries with the appropriate column of financial information. Please note that not every general industry characteristic will apply to every company in that industry. Why? Required 1. Match each industry described to a set of financial statement information (company letters A through I); and 2. Write your answers down in bullet point format, three reasons for each industry, addressing why you matched that industry to a particular set of financial
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