Ass 1

Assignment 1
Sohad Hossam Elnagar 19100742

Omar Mohamed Emam 19105356
Company A: Major Investment Bank

As it has higher level of debt, assets and equity 30.9 %and 67.8%. in addition to number of days
of receivables 1941 that is higher than the remaining companies. The ratio of the equity in its
debt-to-equity structure is also lower than other companies from the different industries.
Company B: Warehouse Shopping Club
t has the high inventory turnover ratio that is 11.0 as well as higher level of inventory that is
17.3%. in addition, it has the greater number of net plant, property and equipment with the
percentage of 65.4% that is highest percentage in comparison with the remaining companies. The
numbers of days of receivables (5.0) are less than other firms as %well as it’s also had lower
higher level of leverage.
Company C: Express delivery firm
it has the greater long term debt percentage that is 32.9% as this type of companies require
higher level of debt in order to meet the financing needs of their assets and resources in addition,
the company has the average days of receivables that is 41.2. as express delivery gives credit to
very few customers. The levy of inventory is 8.2% whereas, inventory turnover day are 4.9.
Company D: Hotel Chain
It considered as the Hotel Chain due to the reason that it has the highest level of the assets that
are non-current which in term of percentage are 59.7%. However, it has the higher number of
receivables days and inventory turnover ratio that is 42.5 and 71.5 respectively. The company
also does not have very higher level of leverage ratios (assets/equity is 1.80, debt/equity 0.11 and
LT debt/Total capital 0.10).
Company E: Manufacture of Electronic Communications Equipment
It’s recognized as the Manufacture of Electronic Communications Equipment because of the
reason that higher level of investment in fixed assets as well as high long-term debt. The
company has number days of receivables that is due to the fact that it receives cash in longer
duration. However, due to this reason is need higher debt in order to finance its business
operations and activities.
Company F: pharmaceutical manufacturer
The only two companies with high R&D as a percentage of sales are F and J. Both are
comparable in multiple ways but the choice of F as the pharma company is driven by higher
intangibles for F (52%, patents etc.), a higher amount of debt (19% long term debt, 0.5 debt
equity) amongst others, also has higher percentage of gross profit that is 81.6%. Secondly, The
Company has higher numbers of receivable days that 81.2 whereas, on the other side, it has
lower inventory turnover ratio of 1.2.
Company G: Temp agency
A temporary agent is likely to have the lowest or near-zero amount of fixed assets and this holds
true for G. For a temporary agent, therefore, the asset is likely to be. s (accounts receivable ~
30.4%) and is a fixed asset 11%, Agency must have a high amount of credit mainly the current
and the number of G is 22,23) high fixed asset turnover. The main reason is that it has larger
number of customers on credit. It has high numbers of receivable days that is 137.2 whereas, 4.3
lower inventory turnover ratio.
Company H: Supermarket Chain

the great level of inventories in addition to high inventory turnover ratio that is 12.5. it also has
highest percentage in the net plant, property and equipment that is 46.5%. The days of receivable
(4) is less as compared to the other remaining companies. The company have higher asset to
equity ratio while lower debt to equity and LT debt to equity ratio.
Company I: Software Firm
Software companies also invest in office space, computer equipment, etc., so they may have few,
if not zero, fixed assets. do not have inventories and well as they do not need long term debt in
order to finance their assets need about 70% working capital. Given the small number of fixed
assets, the turnover rate of fixed assets must be high (~ 43). Low inventory (0%), and if the
credit sales are high, the accounts receivable will be high (59.3%). Usually, a small amount of
equity finance is used (Debt / Equity = 0.13)
Company J: Consumer products company
The only two companies left with high R&D as a percentage of sales are F and J. Both are
comparable in multiple ways but the choice of F as the pharma company is driven by higher
intangibles for F (52%, patents etc.), a higher amount of debt (19% long term debt, 0.5 debt
equity) amongst others so, we have J as the consumer products company that has no inventory
turnover

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Assignment 1

Sohad Hossam Elnagar 19100742

Company A: Major Investment Bank

Company G: Temp agency

Company H: Supermarket Chain

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