Balance sheet difference between several industries
If you had 4 different balance sheets with the companies names blacked out how would you know which one was a banking company, industrial, retailer and technology company?
I recognize that some accounts are relatively larger in one indsutry than another, For example, depreciation would be highest in industrial and rent would be highest in retail.
What I am looking is accounts specific only to each of the aforementioned industries?
Thanks
Identifying a bank would be the easiest of the four. Banks typically have very different P&L and balance sheet statements and include line items such as Loans to the general public and/or deposits from the general public, which the others most probably wouldn't.
The others are a little trickier but some clues could be higher PPE for industrials, to account for tangible investments in factories, etc. Retail would probably be higher in working capital, specifically items such as inventory and accounts payable. A sign of a technology company could be high intangible assets, for example from capitalized software development costs.
Recognize Industry via Balance Sheet (Originally Posted: 09/11/2017)
Hi guys! I will have an ib interview at an EB next week. In their interview they like to give the candidates random balance sheets from companies so that people determine in which industry the company operates.
Here are some thoughts how I would approach such a task: - low to no receivables, high inventory: most likely retail - high PP&E, high receivables, high inventories: industry/ manufacturing - many intangible assets, mid to low PPE: most likely pharma or tech - high long term investments/financial assets/loans: FIG or insurance
What else can you think of?
Many thanks
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