In addition to common-size financial statements, common-base-year financial stat

Question

In addition to common-size financial statements, common-base-year financial statements are often used. Common-base-year financial statements are constructed by dividing the current year account value by the base year account value. Thus, the result shows the growth rate in the account. Using the financial statements provided in the Excel file, construct the common-size balance sheet and common-base-year balance sheet for the company. Use 2013 as the base year.

Use the provided Excel template to input your answers.

Assets Liabilities and Owners' equity 2013 2014 2013 2014 Current assets $ 16,298 $ 18,840 25,968 26,808 47,644 S 86,454 S 93,292 Current liabilities Notes payable Long-term debt $ 22,902 $ 24,768 29436 30,366 $ 52,338 S 55,134 $ 42,000 $ 60,000 Accounts payable Accounts receivable Inventory 44,188 Total Owners' equity Common stock and paid-in surplus $ 50,000 $ 50,000 326,532 334,978 S 376,532 $ 384,978 470 870 S500,112 Total liabilities and owners' equity S 470 870 $500,112 Fixed assets Net plant and equipment 384,416 $406,820 Accumulated retained earnings Total Total assets Output area Common Common base year 2013 size 2014 size Current assets Current assets S 16,298 25,968 44,188 $ 86,454 S 18,840 26,808 47,644 S 93,292 3.46% 3.77% 1.1560 Cash Accounts receivable Inventory Accounts receivable Inventory Fixed assets Fixed assets Net plant and equipment 384,416 S470,870 $406,820 Net plant and equipment Total assets Total assets es Current liabilities Current liabilities Notes payable Long-term debt S 22,902 29,436 S 52,338 $ 42,000 S 24,768 30.366 S 55,134 S 60,000 Accounts payable Accounts payable Notes payable Total Total Long-term debt Owners' equity Owners' equity Common stock and paid-in surplus S 50,000 326,532 $ 376,532 Total liabilities and owners' equity $470,870 Common stock and paid-in surplus S 50,000 334,978 $ 384,978 Total liabilities and owners' equityS500,112 Accumulated retained earnings Accumulated retained earnings Total Total

Explanation / Answer

Common Common Common Assets 2013 size Assets 2014 size base year Current assets Current assets Cash 16298 3.46% Cash 18840 3.77% 1.559701 Account receivable 25968 5.51% Account receivable 26808 5.36% 0.323475 Inventory 44188 9.38% Inventory 47644 9.53% 0.782113 Total 86454 18.36% Total 93292 18.65% 0.790941 Fixed Asset Fixed Asset new plant and equipment 384416 81.64% new plant and equipment 406820 81.35% 0.582806 Total assets 470870 100.00% Total assets 500112 100.00% 0.621021 Current liabilities Current liabilities Accounts payable 22902 4.86% Accounts payable 24768 4.95% 0.814776 Notes payable 29436 6.25% Notes payable 30366 6.07% 0.31594 Total 52338 11.12% Total 55134 11.02% 0.53422 Long term debt 42000 8.92% Long term debt 60000 12.00% 4.285714 Owners equity Owners equity Common stock 50000 10.62% Common stock 50000 10.00% 0 Accumulated retained earnings 326532 69.35% Accumulated retained earnings 334978 66.98% 0.258658 Total 376532 79.97% Total 384978 76.98% 0.22431 Total liabilities and owners equity 470870 100.00% Total liabilities and owners equity 500112 100.00% 0.621021

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