Question

analyse following commom size balance sheet as the end of 2017 and 2018

hint analyse major chnages and potential relationships within the b/s accounts and other finacial starements

Analyse the following common size balance sheet as of th and 2018: 2018 2017 Current assets: Cash 16 Accounts receivable Inventory Total current assets Property, plant and equipment Other assets Total assets Current liabilities: Accounts payable Short-term debt Total current liabilities Long-term debt Total liabilities Common stock and paid in capital Retained earnings Total shareholders' equity Total liabilities and stockholders' equity Hint: Analyse maior changer and nati t

Answer 1

Common Size balance sheet analysis:
Point of analysis:	Year 2018	Year 2017
1) Liquidity	less liquidity, as more cash is struck in AR & Inventory	More cash liquidity
2) PPE investment	purchase of PPE, which resulted in liquidity	Higher cash unutilised
3) Disposal	Other assets disposed off	Other assets maintained
4) Payment of Liability	AP are paid off which reduces the liquidity
5) Liability raised	the debt both short term and long term raised which provides liquidity	Lower level Debts are maintained
6) Issue of stock	Stocks issued to raise cash
7) Dividend paid	declaration and payment of dividend reduces the RE