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

question 22

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.
$\begin{array}{l|c|c|c|c}\hline \begin{array}{l}\text { Balance Sheet Data } \\\text { (component percentages) }\end{array} & \begin{array}{c}\text { Company } \\1\end{array} & \begin{array}{c}\text { Company } \\2\end{array} & \begin{array}{c}\text { Company } \\3\end{array} & \begin{array}{c}\text { Company } \\\mathbf{4}\end{array} \\\hline \text { Cash } & 7.2 & 22.0 & 6.0 & 11.2 \\\hline \text { Accounts Receivable } & 28.0 & 40.0 & 3.4 & 23.0 \\\hline \text { Inventory } & 21.4 & 0.5 & 0.9 & 27.4 \\\hline \text { Property, Plant \& Equipment } & 32.0 & 19.0 & 75.1 & 25.0 \\\hline \begin{array}{l}\text { Income Statement Data } \\\text { (component percentages) }\end{array} & & & & \\\hline \begin{array}{l}\text { Gross Profit }\end{array} & 15.2 & \begin{array}{c}\text { Not } \\\text { Applicable }\end{array} & \begin{array}{c}\text { Not } \\\text { Applicable }\end{array} & 44.0 \\\hline \text { Profit before Taxes } & 1.8 & 3.3 & 2.5 & 7.0 \\\hline & & & & \\\hline \text { Ratios } & & & & \\\hline \begin{array}{l}\text { Current ratio (over the last } \\\text { five years) }\end{array} & 1.6 & 1.3 & 0.5 & 1.8 \\\hline \begin{array}{l}\text { Inventory turnover ratio }\end{array} & 27.8 & \begin{array}{c}\text { Not } \\\text { Applicable }\end{array} & \begin{array}{c}\text { Npplicable }\end{array} & 3.4 \\\hline \text { Debt-to-equity ratio } & 1.8 & 2.3 & 5.8 & 1.4 \\\hline\end{array}$

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Definitions:

Lower Explosive Limit

The minimum concentration of a vapor in air below which propagation of flame does not occur on contact with a source of ignition.

Lower Explosion Level (LEL)

The lowest concentration of a gas or vapor in the air that will ignite and produce a flame.

Vapor Phase

The state of a substance when it is in gas form, especially when it coexists with its liquid or solid phase.

Avogadro's Law

States that equal volumes of gases at the same temperature and pressure contain the same number of molecules.