Ratios Tell a Story—2015

4 Pages Posted: 30 May 2017

See all articles by Mark E. Haskins

Mark E. Haskins

University of Virginia - Darden School of Business


This case challenges students to review a series of corporate financial metrics and to match them to one of the 13 labeled and listed industries. It is suitable for MBA and undergraduate students ready to expand their basic understanding of financial metrics.



Jul. 26, 2016

Ratios Tell a Story—2015

Corporate financial performances and conditions vary among companies for a number of reasons. One reason for the variation can be traced to the characteristics of the industries in which companies operate. For example, some industries require large investments in property, plant, and equipment (PP&E), while others require very little. In some industries, the competitive product-pricing structure permits companies to earn significant profits per sales dollar, while in other industries the product-pricing structure necessitates a much lower profit margin. In most low-margin industries, however, companies often experience a relatively high rate of product throughput (i.e., turnover).

A second reason for some of the variation in financial performances and conditions among companies is the result of management philosophy and policy. Some companies reduce their manufacturing capacity to match more closely their immediate sales prospects, while others carry excess capacity to be prepared for future sales growth. Also, some companies choose to finance their assets with borrowed funds, while others are more conservative, preferring to avoid the buildup of debt. Some corporate management teams opt to not pay dividends to their owners, preferring to reinvest those funds in the company. And, some companies aim to grow organically (i.e., increasing sales of internally developed products and/or services), while others focus on mergers and acquisitions as their dominant means for growth.

Of course, another reason for some of the variation in reported financial results among companies is the differing competencies of management. Given the same industry characteristics and the same management policies, different companies may report different financial results simply because their managements perform differently.

. . .

Keywords: financial metrics

Suggested Citation

Haskins, Mark E., Ratios Tell a Story—2015. Darden Case No. UVA-C-2381, Available at SSRN: https://ssrn.com/abstract=2974096

Mark E. Haskins (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States
434-924 -4826 (Phone)

HOME PAGE: http://www.darden.virginia.edu/faculty/haskins.htm

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