Analyze current and long-term liabilities; evaluate debt-paying ability) EnviroFriend Structures, Inc., builds environmentally sensitive structures. The company’s 2018 revenues totaled $2,780 million. At December 31, 2018, and 2017, the company had, respectively, $656 million and $591 million in current assets. The company’s balance sheets and income statements reported the following amounts: Requirements 1. Describe each of EnviroFriend’s long-term liabilities and state how the liability arose. 2. What were the company’s total assets at December 31, 2018? Evaluate the company’s leverage and debt ratios at the end of 2017 and 2018. Use year-end figures in place of averages where needed for calculating the ratios in this exercise. Did the company improve, deteriorate, or remain about the same over the year?
Analyze current and long-term liabilities; evaluate debt-paying ability) EnviroFriend Structures, Inc., builds environmentally sensitive structures. The company’s 2018 revenues totaled $2,780 million. At December 31, 2018, and 2017, the company had, respectively, $656 million and $591 million in current assets. The company’s balance sheets and income statements reported the following amounts: Requirements 1. Describe each of EnviroFriend’s long-term liabilities and state how the liability arose. 2. What were the company’s total assets at December 31, 2018? Evaluate the company’s leverage and debt ratios at the end of 2017 and 2018. Use year-end figures in place of averages where needed for calculating the ratios in this exercise. Did the company improve, deteriorate, or remain about the same over the year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
(Learning Objectives 4, 5: Analyze current and long-term liabilities; evaluate
debt-paying ability) EnviroFriend Structures, Inc., builds environmentally sensitive structures.
The company’s 2018 revenues totaled $2,780 million. At December 31, 2018, and 2017, the
company had, respectively, $656 million and $591 million in current assets. The company’s
balance sheets and income statements reported the following amounts:
Requirements
1. Describe each of EnviroFriend’s long-term liabilities and state how the liability arose.
2. What were the company’s total assets at December 31, 2018? Evaluate the company’s
leverage and debt ratios at the end of 2017 and 2018. Use year-end figures in place of
averages where needed for calculating the ratios in this exercise. Did the company improve,
deteriorate, or remain about the same over the year?
Transcribed Image Text:1
A1
7
8
At year-end (In millions)
Liabilities and stockholders' equity
Current liabilities
3
4
5
6 Employee compensation and benefits
Current portion of long-term debt
Total current liabilities
Accounts payable
Accrued expenses
A
Long-term bonds payable
10 Deferred income taxes payable
Leases payable
11
12
Common stockholders' equity
13
Total liabilities and stockholders' equity
Year-end (in millions)
14
15 Cost of goods sold
16
B
2018
$ 148
149
14
3
314
1,485
134
5
1,844
$3,782
$ 2,656
с
2017
$184
177
30
20
411
1,313
131
23
1,584
$ 3,462
$ 2,046
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