Ratios Tell a Story Harvard Case Solution & Analysis

Reasons behind the Match
Airline
The economic conditions of 2015 have given the airline industry the advantage of decrease in energy prices. Due to the favorable movement in the economy, energy prices declined and the decline increased the operating margins of the company by approximately 15%.Along with this, due to the decrease in cost and increase in capacity, the companies whichoperate in this industry reported high gross margin and growth in revenue.(Oliver Wyman.com)
The financials of A report return of sales of approximately 13.11% along with this, these financials also report high revenue growth.Moreover, the other financial ratios are approximately in line with the chosen industry player. Therefore weconclude that these financialsbelong to the Airline industry.(Morningstar, 2017)
Railroad
The railroad industry is one of the industries which wereaffected adversely due to the 2015 economic conditions of the world because theseindustrieshave to meet with many economic regulations such as Surface Transportation Board ACT and others. Along with this, these companies have to pay the huge amount of taxes to the tax authorities. However, people still like this industry, therefore, the industry shows uniform growth.(Jeffrey Macher)
The financials of B report return of sales of approximately 1.9% and uniform revenue growth.Moreover, the other financial ratios such as current ratio, gross profit margin, and dividend payout ratio are approximately same with the chosen industry player. Therefore, we conclude that these financialsbelong to the railroad industry.(Morningstar.)
Pharmaceuticals
There are many regulations over the pharmaceutical industry moreover, economic conditions of 2015 were less favorable for pharmaceuticalcompanies as these companies had to pay ahuge amount of taxes over their earnings.These companies have to conduct continuousresearch and development work. For an effective R&D, these companies need huge amounts offunds which are usually obtained through debt source hence thisincreases theirfinancial leverage. Along with this, the industry is in declining phase which shows a negative growth. (brecorder.com, 2015)
The financials of C report return on sales of approximately 9.5% and negative revenue growth of 2.8%.Moreover, thefinancial leverage and R&D expenditure of this company is approximately 3.49 and 0.36% and the other financial ratios such as receivable days and inventory turnover are approximately same with the chosen industry player. Therefore, we conclude that this financial belongs with the pharmaceutical industry.
Ratios Tell a Story Harvard Case Solution & Analysis
(morningstar)
Commercial Banking
In 2015, due to the economic events banking industry faced many difficulties such as due to the mortgage crisis,companies operating in this industry suffered for profitability. Therefore, at that time, the main focus of the industry wasto improve its profitability. Moreover, due to the unfavorable economic conditions, the industry reports negative growth.(ibisworld.com, 2017)
The financials of D report return of sales of approximately 18.6% and negative revenue growth of approximately 3.9%.Moreover, the other financial ratios such as financial leverage, inventory turnover, and gross profit margin are approximately same with the chosen industry player. Therefore, we conclude that this financialbelongs to the commercial banking industry.(Morningstar)................
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