Compute the amount and percentage changes for the following balance sheets for D

Question

Compute the amount and percentage changes for the following balance sheets for Davis Company, and comment on the changes from 2009 to 2010. (Round the percentage changes to one decimal place.)

Davis Company
Comparative Balance Sheet
December 31st, 2010 and 2009
2010 2009
Assets
Current Assets 18,600 12,800
Property, Plant, and
Equipment (net) 109,464 97,200
Total Assets 128,064 110,000
Liabilities and Stockholders' Equity
Current Liabilities 11,200 3,200
Long-term Liabilities 35,000 40,000
Stockholders Equity 81,864 66,800
Tot Liabilities & Stkholders Eq. 128,064 110,000

Explanation / Answer

CA +5,800 +45.3% PPE +12,264 +12.6% TA +18,064 +16.4% CL +8,000 +250% LTL -5,000 -12.5% SE +15,064 +22.6% TLSE +18,064 +16.4% You can find these percentage changes by taking the 2010#, subtracting the 2009#, then dividing that difference by the 2009# (aka: (new-old)/old). Comment: The explosive growth in current liabilities is VERY troubling, especially since current assets have not grown nearly as fast; this could imply near-term liquidity issues. Long-term liabilities have declined, which helps alleviate some solvency concerns.

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