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
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
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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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