Question

Common-Size Balance Sheet Cash and marketable securities Accounts receivable Inventory Total current assets Net property, pla

Short-term notes Total current liabilities Long-term liabilities Total liabilities Total common shareholders equity Total li

Common-Size Income Statement 2016 100.0 % Revenues Cost of goods sold Gross profit 66.9 Operating expenses 29,950 (20,050) 9,

Cost of goods sold Gross profit Operating expenses Net operating income Interest expense Earnings before taxes 66.9 33.1 % 26

(Analyzing common-size financial statements) Use the common-size financial statements found here: 9 to respond to your boss

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Answer #1

a]

Cash on hand relative to total assets = cash as a % of total assets = 1.4%

b]

Proportion of assets financed with short term debt = total current liabilities as a % of total assets = 42.1%

Proportion of assets financed with long term debt = long term liabilities as a % of total assets = 21.1%

c]

% of revenues left after paying all of its expenses = net income as a % of revenues = 2.1%

d]

COGS as a % of revenues = 66.9%

Operating expenses as a % of revenues = 26.9%

Interest expenses as a % of revenues = 2.9%

COGS forms the highest proportion of expenses, followed by operating expenses, which are followed by interest expenses

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