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    Seasonality and Earnings

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    Which of the following types of businesses do you expect to show a high of degree of seasonality in quarterly earnings? Explain why.


    Pharmaceutical Company

    Software Company

    Auto Manufacturer

    Clothing Retailer

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    Solution Preview

    I'd explain as follows:

    I don't expect the supermarket business to show a high degree of seasonality because of mainly the type of products it offers. The supermarket provides products for daily use, including grocery, milk, meat, etc. You name it. These products are used on an on-going basis. So whether it's Christmas or New Year, people would still have to eat.

    With pharmaceutical company, it ...

    Solution Summary

    This solution analyzes each business of supermarket, pharmaceutical company, software company, auto manufacturer and clothing retailer for seasonality in customer demand.