Perform the common sizing analysis for 2019 and 2018. Comment on your observations on the changes in the percentages. Focus on a) the change in the amount of total assets --- does this mean the firm is doing better? Why or why not? b) the changes in current assets, current liabilities and what this could mean for the firm. c) the changes in debt: what has increased more, total current liabilities or long-term debt? d) the change in total common equity. What has driven the change? e) the conundrum that although sales have nearly doubled, the firm makes a loss in 2019. What has caused this situation?
Perform the common sizing analysis for 2019 and 2018. Comment on your observations on the changes in the percentages. Focus on a) the change in the amount of total assets --- does this mean the firm is doing better? Why or why not? b) the changes in current assets, current liabilities and what this could mean for the firm. c) the changes in debt: what has increased more, total current liabilities or long-term debt? d) the change in total common equity. What has driven the change? e) the conundrum that although sales have nearly doubled, the firm makes a loss in 2019. What has caused this situation?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Perform the common sizing analysis for 2019 and 2018. Comment on your observations on the changes in the percentages.
Focus on
a) the change in the amount of total assets --- does this mean the firm is doing better? Why or why not?
b) the changes in current assets, current liabilities and what this could mean for the firm.
c) the changes in debt: what has increased more, total current liabilities or long-term debt?
d) the change in total common equity. What has driven the change?
e) the conundrum that although sales have nearly doubled, the firm makes a loss in 2019. What has caused this situation?
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