Unidentified Industries: Australia 2014 The case solution
·Distiller & Vintner
The distiller and vintner represents the alcohol industry, which is comprised of high inventory levels and a high accounts receivables, as the alcohol is expensive so the products will be expensive top consumers, ultimately leading to a high accounts receivable. Further, as the products are expensive, the gross margins are usually higher. The real distiller and companies actual; financial shows a high inventory ratio of 21.5% in the total assets and a high sales collection period of 52.6 days.
According to specified characteristics, Firm G is identified to be operating in the Distiller & Vintner industry, as the company’s gross margin is high i.e. 46.9% with an inventory ratio of 19.5%.
·Diversified Metals & Mining
The diversified metal and mining industry have high account receivables, high plant and equipment’s rate and it has high inventory, which can be shown through actual data, which proves that the diversified metals and mining company has a high PP&E of 44.6% and a high sales collection period of 43.6 days. So, the firm K is the diversified metal and mining firm because it seems that the firm K have high inventory of 19.4%, account receivables of 2.5%, and high plant and equipment i.e. 39.7%.
·Electric and Gas Utility
The main characteristics of electrical and utility firms in the industry have low inventories due to its revenue dependence on the natural gas sales. The electrical and gas utility firm have low inventory turnover. Along with these electrical and gas utility industry have high plant and equipment. The actual data for electric and gas utility firms (PG&E, Southern California Edison, and Alinta Energy) have a low inventory of 0.8% and a high property plant and equipment of 73.1%
Firm J is in the electrical and gas utility industry because it has low inventory and low inventory turnover i.e. 0.8%. And high plant and equipment i.e. 57.8%.
·Engineering & Consulting Services
The engineering and consulting firms provide services to the customers, which mean that there is no inventory required for such businesses. In addition, these firms might have a higher receivable turnover ratio. The engineering and consulting services firm like Fluor Corporation and Jacobs Engineering show that these companies have a zero inventory as these are services based firms and a moderate sales collection period of 24.9 days, which means that these companies have a higher receivable turnover ratio.
Firm B is identified as an engineering & consulting service provider, as it has a high percentage of accounts receivable i.e. 67.4% and no inventory levels.
·Food Retail
The food retail industry usually have high inventories and high inventory turnover because the food is not stored for so long. The food retail have very small account receivable collection time period because consumers pay at the time they buy food (counter). The food retail companies including Costco and Whole Foods reveal that such food retail firms have a higher inventory turnover of 12.0 times and a low accounts receivables collection period of 3.7 days.
Firm D comes in food retail industry as the inventory rate is 1.2% and the inventory turnover rate is 42.7 and it has short days of collection i.e. 0.5....................
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