Question

In addition to common-size financial statements, common-base year financial statements are often used. Common-base year financial statements are constructed by dividing the current year account value by the base year account value. Thus, the result shows the growth rate in the account.

  

Construct the common-size balance sheet and common-base year balance sheet for the company. Use 2018 as the base year. (Do not round intermediate calculations. Enter your common-size answers as a percent and your common base year answers as a times. Round your common size answers to 2 decimal places, e.g., 32.16 and common-base year answers to 4 decimal places, e.g., 32.1616.)

Answer 1

Please find below the common size balance sheet and common-base year balance sheet:

Balance Sheet
	Common-size		Common-size		Common-Base (2018)
	2018	2019	2018	2019	2019
Assets
Current assets	9.10%	9.66%	9.10%	9.66%	1.17
Cash	17.88%	18.52%	17.88%	18.52%	1.14
Accounts receivable	22.75%	21.87%	22.75%	21.87%	1.06
Inventory	12.89%	11.92%	12.89%	11.92%	1.02
Total current assets	62.62%	61.97%	62.62%	61.97%	1.09
Fixed assets
Plant and equipment	37.38%	38.03%	37.38%	38.03%	1.12
Total fixed assets	37.38%	38.03%	37.38%	38.03%	1.12
Total assets	100.00%	100.00%	100.00%	100.00%	1.10
Liabilities
Shareholder's equity
Share capital	43.34%	44.33%	43.34%	44.33%	1.13
Total shareholders' equity	43.34%	44.33%	43.34%	44.33%	1.13
Long-term liabilities
Loan	26.65%	27.39%	26.65%	27.39%	1.13
Total long-term liabilities	26.65%	27.39%	26.65%	27.39%	1.13
Current liabilities
Accounts payable	15.60%	12.02%	15.60%	12.02%	0.85
Salary o/s	11.92%	12.12%	11.92%	12.12%	1.12
Creditors	2.49%	4.14%	2.49%	4.14%	1.83
Total current liabilities	30.01%	28.28%	30.01%	28.28%	1.04
Total liabilities	100.00%	100.00%	100.00%	100.00%	1.10