The chart below represents the following possible industries: [a] travel agency; [b] hotel; [c] meat processing companies; and [d] Drug Company.

What to Do ?

Select and match one company (table #1 - #4) to the possible industry choices (a - d).

Explain the answer choice - how does this number above convey to you? Why you think that is and why the other three choices are not indicative of your selected industry norms. Your explanation should include at least three parts - one balance sheet data, one income statement data, and one ratios data.

Why does the balance sheet data and income statement data shows in a "component percentage"? What does that mean and is that a term that refer to "horizontal analysis" or "vertical analysis"?

The investor would have looked at the chart above and will conclude this is not meaningful beyond the academia exercise. Explain why benchmarking a company (Say, American Eagle Outfitters) to determine whether this is a good investment potential by comparing data against this chart is NOT beneficial.

COMPANIES \begin{tabular}{lcccc} & & 1 & 2 & 3 \\ & & & & \\ \hline Balance Sheet Data (component percentage) & & & & \\ Cash & 7.3% & 21.6% & 6.1% & 11.3% \\ Accounts receivable & 28.2 & 39.7 & 3.2 & 22.9 \\ Inventory & 21.6 & 0.6 & 1.8 & 27.5 \\ Property and equipment & 32.1 & 18.0 & 74.6 & 25.1 \\ Income Statement Data (component percentage) & & & & \\ Cost of goods sold & 84.7% & 0.0% & 0.0% & 56.6% \\ Profit before taxes & 1.7 & 3.2 & 2.4 & 6.9 \\ Selected Ratios & & & & \\ Current ratio & 1.5 & 1.2 & 0.6 & 1.9 \\ Inventory turnover ratio & 27.4 & N/A* & N/A* & 3.3 \end{tabular} *NA=Notapplicable