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Consider the balance sheet given below and perform Common Size Analysis for the entire balance sheet. Write a detailed comment on the analysis performed and advice how the firm can improve further.

Consider the balance sheet given below and perform Common Size Analysis for the entire balance sheet. Write a detailed comment on the analysis performed and advice how the firm can improve further.

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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Consider the balance sheet given below and perform Common Size Analysis for the entire balance sheet.

Write a detailed comment on the analysis performed and advice how the firm can improve further.

BUSINESS CONSULTING COMPANY BALANCE SHEET As at December 31, 2015 Assets Current assets: Cash 85,550 Accounts receivable 4,700 Prepaid building rent 1,500 Unexpired insurance Supplies 3,600 250 Total current assets 95,600 Non-current assets: Equipment 9,000 Аcс. dep. - Equipment 3,600 5,400 Total assets 101,000 Liabilities & Stockholders' equity Liabilities Notes payable 5,000 Accounts payable 1,600 Salaries payable 2,000 Income tax payable 3,000 Unearned service revenue 4,400 Total liabilities 16,000 Stockholders' equity: 50,000 Capital stock Retained earnings 35,000 Total stockholders' equity 85,000 Total liabilities and stockholders' equity 101,000
Transcribed Image Text:BUSINESS CONSULTING COMPANY BALANCE SHEET As at December 31, 2015 Assets Current assets: Cash 85,550 Accounts receivable 4,700 Prepaid building rent 1,500 Unexpired insurance Supplies 3,600 250 Total current assets 95,600 Non-current assets: Equipment 9,000 Аcс. dep. - Equipment 3,600 5,400 Total assets 101,000 Liabilities & Stockholders' equity Liabilities Notes payable 5,000 Accounts payable 1,600 Salaries payable 2,000 Income tax payable 3,000 Unearned service revenue 4,400 Total liabilities 16,000 Stockholders' equity: 50,000 Capital stock Retained earnings 35,000 Total stockholders' equity 85,000 Total liabilities and stockholders' equity 101,000
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