Balance Sheet- week 2

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Charleston Southern University *

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Finance

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Apr 3, 2024

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docx

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Uploaded by AgentZebra1862

Balance Sheet 1. How much do customers owe this company on 10/2/2011? $390 2. What amount of investments does this company intend to hold for more than a year on 10/2/2011? $602 3. What asset is created when a company is acquired? Goodwill 4. Current assets at 10/2/2011 total $_______3951_______. 5. Current Liabilities at 10/2/2011 total $_______2083_______. 6. Assets and liabilities are recorded on the balance sheet in order of ____liquidity_________. 7. The beginning balance of the inventory account for the fiscal year on 10/02/2011 was $____567______. 8. From 9/28/2008 to 10/02/2011 accounts payable, did accounts payable increase or decrease? Decreased in 2009 from 2008, then increased 2010/2011 9. Does the change in accounts payable from question 8 indicate more or less financial risk? More financial risk 10. Are total assets showing a trend of increasing or decreasing? Increase. 11. What are total liabilities for the following Fiscal Year End : a. 10/2/2011 $____3022__________ b. 09/28/2008 $____3218_________ 12. Did net Property, plant and equipment increase or decrease from 2009 – 2010? increase. 13. What is the change in short-term investments from 2008 – 2011? +839 14. What is the change in Retained Earnings from 2010 to 2011? +1097 15. Based on the Balance Sheet information provided, would you invest in this company? Why or why not? I would invest in this company because it has room to grow further and expand although there are some concerns. They have a healthy level of current assets. The company has great PPE, and their retained earnings are continuing to increase. The minor concerns are the debt levels, the accumulated depreciation, the increasing of liabilities, and the decrease in contributed capital.

(Questions 16 – 19; 5 points each) 16. Calculate the Current Ratio for ABC Retail Company for each fiscal year. Is the trend showing a stronger position to pay off debt or a weaker position? Explain your answer. 2011=1.90, 2010= 1.44, 2009=1.14, 2008=.81. This calculation shows that the Company is becoming stronger over time. 17. Calculate the Debt Ratio for ABC Retail Company for each fiscal year. Is the trend showing a stronger or a weaker position? Explain your answer. 2008- 58%, 2009- 52%, 2010-45%, 2011-39%. This information shows that the company is growing stronger because fewer of its assets are being financed with Debt over time. 18. Compute the trend indexes for Total Assets for each year using 09/28/2008 as the base year. Have total assets increased since the base year or decreased? 2011= 1.388 or 39%, 2010= 1.21 or 21%, 2009= 1.09 or 9%, 2008= base or 0. This indicates that the total assets are increasing. 19. Compute the trend indexes for Other Stockholder Equity for each year using 09/28/2008 as the base year. Has OSE increased since the base year or decreased? 2011= -4.3%, 2010= 18.75%, 2009= 35.4%, 2008= base. These numbers are increasing, except 2011. (Question 20; 10 points) 20. Review the series of balance sheets for ABC Retail Company. Is the company showing a strong or weak financial position? Support your response with at least two observations . I feel that they have a strong financial position. 1. There total assets continue to increase, and this shows growth and expansion 2. The cash-on-cash equivalents, short-term investments, accounts receivable and inventory are steady and/or have increased. This is a positive factor for the company when pertaining to liquidity/operative capabilities.

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