Equity can be thought of as the residual claim on the firm What is the total equity value of the firm is liabilities decrease to 9564 in 2015, while assets increase to 22000 in 2015?
Equity can be thought of as the residual claim on the firm What is the total equity value of the firm is liabilities decrease to 9564 in 2015, while assets increase to 22000 in 2015?
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
Problem 1PS
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Question
Transcribed Image Text:ASSETS
Current assets
Cash and equivalents
Short-term investments
Accounts receivable
Inventories
Other current assets
Total current assets
Net plant, property,
and equipment
Other long-term assets
TOTAL ASSETS
Battista Products
Balance Sheet as of December 31, 2014, and December 31, 2013
(S in millions)
2014
$1,651
$1,171
$ 3,725
$ 1,926
$ 657
$ 9,130
$ 9,687
$2,274
2013
$ 1,716
$ 3,261
$ 3,166 -$1,995
Change
-$ 65
$ 8,681
$ 1,693
$ 618 $ 39
$ 2,107
$ 464
$ 233
$10,454 - $1,324 OWNERS' EQUITY
Common stock
$1,006
LIABILITIES
Current liabilities
Accounts payable
Short-term debt
Other current liabilities
Total current liabilities
$167
Long-term debt
Other long-term liabilities
Total liabilities
Retained earnings
Total owners'equity
TOTAL LIABILITIES AND
$21,091 $21,242 - $ 151 OWNERS' EQUITY
2014
2013 Change
$5,271 $5,357
$ 274 $ 2,889
$ 1,315 $ 1,160
$ 6,860 $ 9,406
$ 2,550 $2,313
$1,073 $1,688
$10,483 $13,407
$ 2,614 $2,614
$7,994 $5,221
$10,608 $7,835
-$ 86
-$2,615
$ 155
- $2,546
$ 237
-$ 615
- $2,924
$ 0
$2,773
$2,773
$21,091 $21,242 -$ 151
Transcribed Image Text:Equity can be thought of as the residual claim on the firm.
What is the total equity value of the firm is liabilities
decrease to 9564 in 2015, while assets increase to
22000 in 2015?
Expert Solution
Step 1
Using the balance sheet principle, we can solve for the missing value.
The balance sheet principle is as below:
Total Assets = Liability + Equity
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