The preceding table gives balance sheet percentages and selected financial data for three companies in very different industries - food and beverage, manufacturing, and social networking. Make three observations in each section - Assets, Liabilities and Net Worth, and Selected Financial Data - that you think are interesting. Describe what you think is going on. AssetsCash and marketable securitiesAccounts receivableInventoriesOther current assetsPlant & equipment (net)Other assetsTotal assetsLiabilities and Net WorthAccounts payableAccrued itemsOther current liabilitiesLong-term debtOther liabilitiesPreferred stockCommon stockTotal liabilities and net worthSelected Financial DataCurrent assets/current liabilitiesCash, MS and ARs/current liabilitiesInventory turnover (X)Receivables collection period (days)Total debt/total assetsLong-term debt/capitalizationRevenue/total assetsNet profit/revenueNet profit/total assetsTotal assets/net worthNet profit/net worthEBIT/interest expenseEBITDA/revenueCompany A45%8001727100%2%311163065100%3.53.3NA53.80.1890.1950.47-0.084-0.0071.55-0.049NA0.115Company B7%812161542100%7%5231135019100%1.2220.82.963.10.4570.4470.500.0210.025.120.0554.80.135Company C12%6256015100%2%15123011029100%0.80.687.35.40.4130.4932.110.0530.1173.450.27737.50.141

Observations are used to bring significant issues to the attention of audit managers. While…

Answered: Make three observations in each section…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter4: Balance Sheet: Presenting And Analyzing Resources And Financing

Section: Chapter Questions

Problem 14E

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Question

The preceding table gives balance sheet percentages and selected financial data for three companies in very different industries - food and beverage, manufacturing, and social networking. Make three observations in each section - Assets, Liabilities and Net Worth, and Selected Financial Data - that you think are interesting. Describe what you think is going on.

Assets
Cash and marketable securities
Accounts receivable
Inventories
Other current assets
Plant & equipment (net)
Other assets
Total assets
Liabilities and Net Worth
Accounts payable
Accrued items
Other current liabilities
Long-term debt
Other liabilities
Preferred stock
Common stock
Total liabilities and net worth
Selected Financial Data
Current assets/current liabilities
Cash, MS and ARs/current liabilities
Inventory turnover (X)
Receivables collection period (days)
Total debt/total assets
Long-term debt/capitalization
Revenue/total assets
Net profit/revenue
Net profit/total assets
Total assets/net worth
Net profit/net worth
EBIT/interest expense
EBITDA/revenue
Company A
45%
8
0
0
17
27
100%
2%
3
11
16
3
0
65
100%
3.5
3.3
NA
53.8
0.189
0.195
0.47
-0.084
-0.007
1.55
-0.049
NA
0.115
Company B
7%
8
12
16
15
42
100%
7%
5
23
11
35
0
19
100%
1.2
22
0.8
2.9
63.1
0.457
0.447
0.50
0.021
0.02
5.12
0.055
4.8
0.135
Company C
12%
6
2
5
60
15
100%
2%
15
12
30
11
0
29
100%
0.8
0.6
87.3
5.4
0.413
0.493
2.11
0.053
0.117
3.45
0.277
37.5
0.141

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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