Question

​(Analyzing common-size financial​ statements) Use the​ common-size financial statements found​ here: LOADING... to respond to your​ boss' request that you write up your assessment of the​ firm's financial condition.​ Specifically, write up a brief narrative that responds to the following​ questions: a. How much cash does Patterson have on hand relative to its total​ assets? b. What proportion of​ Patterson's assets has the firm financed using​ short-term debt?​ Long-term debt? c. What percent of​ Patterson's revenues does the firm have left over after paying all of its expenses​ (including taxes)? d. Describe the relative importance of​ Patterson's major expense​ categories, including cost of goods​ sold, operating​ expenses, and interest expenses.

Common-Size Balance Sheet 2016 Cash and marketable securities $ 450 1.4 % Accounts receivable 6,050 18.3 Inventory 9,550 28.9 Total current assets $ 16,050 48.5 % Net property, plant, and equipment 17,040 51.5 Total assets $ 33,090 100.0 % Accounts payable $ 7,230 21.8 % Short-term notes 6,810 20.6 Total current liabilities $ 14,040 42.4 % Long-term liabilities 6,950 21.0 Total liabilities $ 20,990 63.4 % Total common shareholders’ equity 12,100 36.6 Total liabilities and shareholders’ equity $ 33,090 100.0 % Common-Size Income Statement 2016 Revenues $ 30,050 100.0 % Cost of goods sold (20,000) 66.6 Gross profit $ 10,050 33.4 % Operating expenses (8,010) 26.7 Net operating income $ 2,040 6.8 % Interest expense (940) 3.1 Earnings before taxes $ 1,100 3.7 % Income taxes (400) 1.3 Net income $ 700 2.3 %

Answer 1

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- 2x Find & Select GO GP 135 136 ACCOUNTS latest - Microsoft Excel (Product Activation Failed) File Home Insert Page Layout Formulas Data Review View Add-Ins % Cut Σ AutoSum : A Calibri -11AA = = = Dr Wrap Text General Ea Copy Fill 2 Paste BI U D- DA SF Merge Merge & Center - Center $ Format Painter % % , 4:0 .00 :.: Conditional Format Cell Insert Delete Format Sort & Formatting as Table Styles Clear Filter Clipboard Font Alignment Number Styles Cells Editing GF150 fx GD GEGE GG GH Formula Bar GL GD GK GL GM GN 134 PATTERSON THE CASH PATTERSON HAS ON HAND RELATIVE TO TOTAL ASSETS IS : 1.4% 137 (SEE % OF CASH & MARKETABLE SECURITIES) 138 THE PROPORTION OF PATTERSON'S ASSETS THAT HAVE BEEN FINANCED USING SHORT TERM DEBT IS: 42.4% 139 (SEE% OF TOTAL CURRENT LIABILITIES) THE PROPORTION OF PATTERSON'S ASSETS THAT HAVE BEEN FINANCED USING LONG TERM DEBT IS: 21.0% 141 (SEE% OF TOTAL LONG TERM LIABILITIES) 142 THE % OF PATTERSON REVENUES DOES THE FIRM HAVE LEFT OVER AFTER PAYING ALL OF ITS EXPENSES (INCLUDING TAXES) : 2.3% 143 (SEE % OF NET INCOME) 144 RELATIVE IMPORTANCE OF PATTERSON'S MAJOR EXPENSE CATEGORY 145 THE COST OF GOODS SOLD REPRESENTS 66.6 % OF SALES 140 146 THE OPERATING EXPENSES REPRESENTS 26.7 % OF SALES 147 148 THE INTEREST EXPENSE REPRESENTS 3.1% OF SALES 149 150 151 152 ► Rea FIFO budget 45 days cycle ROE, BV MV ratio VARIANCE BEP, OL FL ratios DETROIT float B-S profit loss SALES BUDGET dupont CASH BUDGET ferences: CU58 DIFF ANALYSIS B0 ovel 120% 0 + Ha é o . D R WA w L LS DOW9 ..* 4 40 ENG 04:20)