Question

A main element of financial statement analysis is the use of common-size financial statements, also called "vertical analysis." A common-size balance sheet divides each account's value by the value of total assets, while a common-size income statement divides each entry by net sales revenue Common-size balance sheets immediately show how a firm's assets, liabilities, and equity are distributed. Common-size income statements give a quick snapshot of how various expenses and types of income relate to sales revenue. The following common-size statements show that total liabilities are 51.2% of total assets, while long-term debt is 36.7% of total assets. In your finance course, you will learn the significance of these relationships Complete the missing entries in the following common-size statements BALANCE SHEET (Thousands of dollars) $377 710 $ 136 240 260 Total current liabilities 636 1,610 2,246 90 300 1.751 Total common equity $ 2,141 Total liabilities and equity $4,387 8.6% Cash Accounts receivable Inventories Accounts payable Notes payable Accrued liabilities 3.1% 1,150 26.2% Total current assets $ 2,237 51.0% 5.9% Long-term debt Total liabilities Preferred stock Common stock Retained earnings 51.2% 2.1% 6.8% 39.9% 48.8% 100.00% Net fixed assets Total assets 2,150 $4,387 49.0% 100.00%

Answer 1