Case Details
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.
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