Common-size financial statements. The balance sheet information or two companies

Question

Common-size financial statements. The balance sheet information or two companies is n the popup window: Complete the common sze balance sheet fr these companies. Review each company's percentages of total assets. Are these companies operating with similar philosophies or in similar industries? What appears to be the major difference in financing for these two companies? Complete the table below: (Round up to two decimal places.) %of %of Total Assets Balance Total Balance ASSETS Co. 1 Assets LIABILITIES Co. 1 Current assets Cash Investments Current liabilities S 5,377 $ 4,146 $8,100 $5,372 $ |$ $ 12,309 $1,139 % Accounts payable |short-term debt % other short-term %| liabilities | % 1% 1% Accounts receivable 0 22,995|| 8411 | $ | % Total current assets Long-term investments Net plant, property Total current liabilities Long-term debt Other liabilities 13,448| $ 2,955 $4.991 lo Tatal i 0 Enter any number in the edit fields and then continue to the next quest 10

Explanation / Answer

Assets Balances Liabilities Balances Co 1 co 2 Co 1 co 2 Current Assets 5377 299 Current Liabilities Investments 4146 354 Accounts Payable 12309 661 Accounts Receivables 8100 221 Short Term Debt 1139 0 Inventory 5372 494 Other Short Term Liabilities 0 122 Total Current Assets 22995 1368 Total current Liabilities 13448 783 Long Term Investments 84 307 Long Term Debt 2955 4 Other Liabilities 4991 54 Net Plant and Equipment 9846 1471 Total Liabilities 21394 841 Goodwill 5390 69 Owner's Equity Intangible 6149 27 Common Stock 3120 1026 Other 3799 86 Treasury Stock -6754 0 Retained Earnings 30503 1461 Total Owner's Equity 26869 2487 Total Assets 48263 3328 Total Liabilities & Owner's Equity 48263 3328 Common Sized Balance Sheets Assets % of Total Assets Liabilities % of Total Assets Co 1 co 2 Co 1 co 2 Current Assets 11.14% 8.98% Current Liabilities Investments 8.59% 10.64% Accounts Payable 25.50% 19.86% Accounts Receivables 16.78% 6.64% Short Term Debt 2.36% 0.00% Inventory 11.13% 14.84% Other Short Term Liabilities 0.00% 3.67% Total Current Assets 47.65% 41.11% Total current Liabilities 27.86% 23.53% Long Term Investments 0.17% 9.22% Long Term Debt 6.12% 0.12% Other Liabilities 10.34% 1.62% Net Plant and Equipment 20.40% 44.20% Total Liabilities 44.33% 25.27% Goodwill 11.17% 2.07% Owner's Equity Intangible 12.74% 0.81% Common Stock 6.46% 30.83% Other 7.87% 2.58% Treasury Stock -13.99% 0.00% Retained Earnings 63.20% 43.90% Total Owner's Equity 55.67% 74.73% Total Assets 100.00% 100.00% Total Liabilities & Owner's Equity 100.00% 100.00% The two companies are operating with dissimilar porportion of various asset and liabilities classes compared to each other. They are neither operating with same philosophies nor in same industries Company 1 is dependant on a mix of retained earnings, current liabilities and long term debt and other liabilities with retained earnings contributing to 63% of total assets. Company is utilizing common stock ans retained earnings for financing activities which constitutes around 74% of total assets.

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