The following selected financial data pertain to three companies: a hotel, a meat packing company,...
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Finance
The following selected financial data pertain to three companies: a hotel, a meat packing company, and a pharmaceutical company. Balance Sheet Data (Common-sized) Company 1 Company 2 Company 3 Cash 7.2% 6.0% 11.2% Accounts Receivable 28.0% 3.4% 23.0% Inventory 21.4% 0.0% 27.4% Property, Plant & Equipment 29.0% 75.1% 25.0% Ratios Inventory turnover ratio (Note: A higher inventory turnover ratio means inventory is sold and replaced faster.) 27.8 Not Applicable 3.4 Debt-to-equity ratio 3.4 8.8 1.1 Based on the financial information, it is mostly likely that companies 1, 2, and 3 are, respectively: (1) Pharmaceutical company, (2) Meat packing company, and (3) Hotel (1) Meat packing company, (2) Hotel, and (3) Pharmaceutical company (1) Hotel, (2) Pharmaceutical company, and (3) Meat packing company (1) Hotel, (2) Meat packing company, and (3) Pharmaceutical company
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