Common-Size Balance Sheet 2016 Cash and marketable securities $ 490 1.5 % Accoun
ID: 2812296 • Letter: C
Question
Common-Size Balance Sheet
2016
Cash and marketable securities
$
490
1.5
%
Accounts receivable
6,000
18.2
Inventory
9,490
28.8
Total current assets
$
15,980
48.4
%
Net property, plant, and equipment
17,020
51.6
Total assets
$
33,000
100.0
%
Accounts payable
$
7,210
21.8
%
Short-term notes
6,790
20.6
Total current liabilities
$
14,000
42.4
%
Long-term liabilities
6,970
21.1
Total liabilities
$
20,970
63.5
%
Total common shareholders’ equity
12,030
36.5
Total liabilities and shareholders’ equity
$
33,000
100.0
%
Common-Size Income Statement
2016
Revenues
$
29,980
100.0
%
Cost of goods sold
(19,960)
66.6
Gross profit
$
10,020
33.4
%
Operating expenses
(8,030)
26.8
Net operating income
$
1,990
6.6
%
Interest expense
(920)
3.1
Earnings before taxes
$
1,070
3.6
%
Income taxes
(389)
1.3
Net income
$
681
2.3
%
a. How much cash does Patterson have on hand relative to its total assets?
b. What proportion of Patterson's assets has the firm financed using short-term debt? Long-term debt?
c. What percent of Patterson's revenues does the firm have left over after paying all of its expenses (including taxes)?
d. Describe the relative importance of Patterson's major expense categories, including cost of goods sold, operating expenses, and interest expenses.
Common-Size Balance Sheet
2016
Cash and marketable securities
$
490
1.5
%
Accounts receivable
6,000
18.2
Inventory
9,490
28.8
Total current assets
$
15,980
48.4
%
Net property, plant, and equipment
17,020
51.6
Total assets
$
33,000
100.0
%
Accounts payable
$
7,210
21.8
%
Short-term notes
6,790
20.6
Total current liabilities
$
14,000
42.4
%
Long-term liabilities
6,970
21.1
Total liabilities
$
20,970
63.5
%
Total common shareholders’ equity
12,030
36.5
Total liabilities and shareholders’ equity
$
33,000
100.0
%
Explanation / Answer
Req a: Cash in hand relative to Total assets: 1.50% of total assets Req b: Assets financed from Short term debts (i.e. Current liabilities): 42.40% Assets Financed from Long term debts: 21.10% Req c: Proportion of revenue left over after all expenses: 2.30% of revenue Req d: Cost of goods sold constitutes 66.6% of total revenue which is considered as major cost of firm. Operating expense constitutes 26.80% of total revenue Interest expense constitutes 3.10% of total revenue
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.