Identify the Industries

4-SERVICE INDUSTRY

One of the key determinants of service industry is that the service provision is the realization process, and therefore the service company’s processes are their products. There are companies that provide full service with no products and those which include products in the services rendered to customers.

A - Major passenger airline

* High plant and equipment (PPE) : 55.6%

* High unearned revenues: 11.6%

Airline services usually involve a lot of booking of flights. So, they should have the highest unearned revenue (11.6%) due to people booking and paying in advance without a proper transaction or services being done. Highly unearned revenue of airline business become from booking and paying in advance of airline passenger. Once the services are done, only then they can recognize the revenue as earned. Another point is that they also have a considerably high PPE because the planes are recognised as their PPE and they cost a lot.

E - Regional Bank

High cash and marketable securities: 32.7%

High accounts payable: 84.7%

Banks need to have a huge cash and bank balance as they are operating with money as their medium. It is because banks have very high percentage of account payable (84.7%), which they have to pay back on the depositors’ request their cash & bank portion is the biggest out of all and supported by the huge receivables due to their deposit/investments with other banks and payables (peoples, companies and other banks deposits/investments). Low stockholders equity is also a point because banks are highly leveraged where the banks are getting a huge portion of their financing from others and not by itself.

G - For-profit hospital chain: A high PPE (55.4%) is a point where it needs to have property (hospitals rooms, operating/surgery rooms and equipment) for it to accommodate patients to generate revenue.

J - Hotel chain: It needs to have high PPE (49.0%) as their business comes from having a huge property and...