Compare and contrast the two common–size balance sheets below. Which one do you think may belong to a supermarket? To a jeweler?
Common–Size Balance Sheets
|
ASSETS |
FIRM A |
FIRM B |
|
Cash |
5.3% |
2.7% |
|
Accounts receivable |
4.1% |
0.0% |
|
Inventory |
37.5% |
61.7% |
|
Other current assets |
5.9% |
4.1% |
|
Total current assets |
52.8% |
68.5% |
|
Net plant and equipment |
35.1% |
20.6% |
|
Other long-term assets |
12.4% |
11.0% |
|
Total assets |
100.0% |
100.0% |
|
LIABILITIES |
FIRM A |
FIRM B |
|
Accounts payable |
19.6% |
23.8% |
|
Notes payable |
0.1% |
0.0% |
|
Other current liabilities |
16.8% |
3.6% |
|
Total current liabilities |
36.5% |
27.4% |
|
Long-term debt |
11.9% |
14.2% |
|
Other liabilities |
14.7% |
8.0% |
|
Total liabilities |
63.1% |
49.6% |
|
Common equity |
4.9% |
4.9% |
|
Retained earnings |
32.0% |
45.5% |
|
Total stockholders” equity |
36.9% |
50.4% |
|
Total liabilities and equity |
100.0% |
100.0% |
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