The Following Selected Financial Data Pertain to Four Companies: a Hotel

question 77

Essay

The following selected financial data pertain to four companies: a hotel, a travel agency, a meat packing company and a pharmaceutical company.
Required: Match each with the financial information and explain why you made your choice as you did.
$\begin{array}{c}\begin{array}{|l|}\hline \text {Balance Sleet Data}\\\text {(conmonent percentages)}\\\hline \text {Cash}\\\hline \text {Accounts Receivable}\\\hline \text {Inventory}\\\hline \text {Property, Plant \& Equipment}\\\hline \\\hline \text {Income Statement Data}\\\text {(conmonent percentages)}\\\hline \text {GrossProfit}\\\hline \text {Profit before Taxes}\\\hline \\\hline \text {Ratios}\\\hline \text {Current ratio (over the last five years)}\\\hline \text {Inventory turnover ratio}\\\hline \text {Debt-to-equity ratio}\\\hline \end{array}\begin{array}{l|}\hline\text {Company}\\ \mathbf{1} \\\hline 7.2 \\\hline 28.0 \\\hline 21.4 \\\hline 32.0\\\hline\\\hline\\\\\hline 15.2 \\\hline 1.8 \\\hline\\\hline\\\hline 1.6 \\\hline 27.8 \\\hline 1.8 \\\hline\end{array}\begin{array}{l|}\hline\text {Company}\\ \mathbf{2} \\\hline 22.0 \\\hline 40.0 \\\hline 0.5 \\\hline 19.0 \\\hline \\\hline \\\\\hline \text { Not Applicable } \\\hline 3.3 \\\hline \\\hline \\\hline 1.3 \\\hline \text { Not Applicable } \\\hline 2.3 \\\hline\end{array}\begin{array}{l|}\hline\text {Company 3}\\\\\hline6.0 \\\hline3.4 \\\hline0.9 \\\hline75.1\\\hline\\\hline\\\\\hline\text {Not Applicable}\\\hline2.5\\\hline\\\hline\\\hline0.5\\\hline\text {Not Applicable}\\\hline5.8\\\hline\end{array}\begin{array}{l|}\hline\text {Company 4}\\\\\hline11.2\\\hline23.0 \\\hline 27.4 \\\hline 25.0\\\hline\\\hline\\\\\hline44.0\\\hline7.0\\\hline\\\hline\\\hline1.8\\\hline3.4\\\hline1.4\\\hline\end{array}\end{array}$

Recognize the role of government policies and interventions in international trade.

Explain the concept of opportunity cost in the production and trade of goods.

Assess the short-term and long-term effects of international trade on industries, workers, and consumers.

Evaluate the arguments for and against protectionist trade policies.

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Definitions:

Efficient Outcome

An economic situation in which all resources are allocated in the most effective way possible, maximizing potential benefit.

Negative Externality

A negative effect or cost suffered by a third party due to an economic transaction they were not involved in.

Socially Optimal Price

The price of a good or service that reflects the true cost to society, accounting for externalities and ensuring allocative efficiency.

Transaction Costs

Expenses incurred when buying or selling goods and services, which can include fees, taxes, and other costs.