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Industry Identification Using Financial Ratios

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This case explores a way to identify an industry by simply examining a set of financial ratios. Certain industries have unique financial statement items and, hence, unique financial ratios. Some, on the other hand, have a few financial ratios that are consistently high or low.

Students will grapple with practical questions on the identification of various industries simply by analyzing sets of financial ratios. In a practical context at school or workplace, students will then be able to reverse the process, i.e., to identify and apply financial ratios to certain significant industries, such as a stock exchange, banking, insurance, oil and gas, IT consultancy, e-commerce, and pharmaceutical.

Learning Objective:

On completion of the case, students will be able to:

1. Interpret the meaning and composition of certain industry-specific financial ratios

2. Apply logical steps to identify the industry by using given financial ratios

3. Assess the financial health and performance of a company using financial ratios

4. Evaluate the financial health and performance of a company using cash flow analysis

Year of Publication: 2022
Ref. No.: 22/726C
Discipline: Accounting & Control
Industry: Banks & Diversified Financials, Capital Goods, Commercial Services, Energy, Insurance, Pharmaceuticals & Biotechnology, Software & Services
Country: N/A
Languages: English
Pages of Text: 4