Required: a) Provide a definition for the term ‘current liability,’ (Refer to the relevant standard or authoritative literature) and explain how liability related information is presented on the Statement of Financial Position.
Required: a) Provide a definition for the term ‘current liability,’ (Refer to the relevant standard or authoritative literature) and explain how liability related information is presented on the Statement of Financial Position.
Required: a) Provide a definition for the term ‘current liability,’ (Refer to the relevant standard or authoritative literature) and explain how liability related information is presented on the Statement of Financial Position.
a) Provide a definition for the term ‘current liability,’ (Refer to the relevant standard or authoritative literature) and explain how liability related information is presented on the Statement of Financial Position.
b) Why is the liabilities section of the Statement of Financial Position of primary significance to bankers, creditors and other users of the financial statements?
c) What are accrued liabilities? Give four examples of accrued liabilities that Williams Enterprise might have.
d) What might be the items that comprise Williams’ liability for “Compensation to employees”?
e) Evaluate the company’s liquidity and financial flexibility by calculating and analysing the following ratios for 2019.
(i) Current ratio at December 31.
(ii) Acid-test ratio at December 31.
(iii)Accounts receivable turnover.
(iv) Inventory turnover.
(v) Return on assets.
(vi) Profit margin on sales.
Transcribed Image Text:Presented below is the condensed financial statements of Williams Enterprise Ltd. for
the year ended December 31, 2019.
Consolidated Statement of Earnings
2019
2018
For the years ended December 31, 2019 and December 31, 2018
($ millions except where otherwise indicated)
Sales
$ 30,997
$ 30,735
Cost of Merchandise Inventories Sold (note 9)
23,393
23,539
Gross Profit
7,604
7,196
Operating Expenses
Selling and administrative expenses
5,680
5,402
Depreciation and amortization
655
589
6,335
5,991
Operating Income
1,269
1,205
Interest expense and other financing charges (note 4)
273
269
Earnings Before Income Taxes and Minority Interest
996
936
Income Taxes (note 5)
297
269
Net Earnings Before Minority Interest
699
667
Minority Interest
18
11
Net Earnings
$
681
2$
656
Net Earnings Per Common Share ($) (note 6)
Basic
2.45
$
2.39
Diluted
2.44
2$
2.38
%24
%24
Transcribed Image Text:Consolidated Statement of Financial Position
As a December 31, 2019 ad December 31, 2018
S miio)
2019
2018
Assets
Current Assets
Cash and cash equivalents (note 7)
932
フ76
Short term investments
735
614
Accounts receivable (note s)
724
774
Inventories (note 9)
2,114
2,112
Prepaid expenses and other assets
121
130
Total Current Assets
4,626
4,406
Fixed Assets (note 10)
9,123
8,559
Goodwill and Intangible Assets (notes 11)
1,029
1,026
Security Deposits
354
250
Other Assets (note 12)
787
750
Total Assets
S 15,919
14,991
Liabilities
Current Liabilities
Notes Payable
803
so2
Accounts payable and accrued liabilities
2,116
2,179
Compensation to employees
400
200
Income taxes payable (note 5)
30
41
Long term debt due within one year (note 15)
303
243
Total Current Liabilities
3,852
3,665
Long Term Debt (note 15)
4,213
4,162
Other Liabilities (note 16)
534
497
Future Income Taxes (note 5)
178
143
Capital Securities (note 18)
221
220
Minority Interest
41
31
Total Liabilities
9,039
8,718
Shareholders' Equity
common Share capital (note 19)
1,475
1,308
Retained Earnings
5,395
4,948
Accumulated Other Compre. Inc (notes 2 and 22)
Total Shareholders Equity
10
17
6,880
6,273
Total Liabilities and Shareholders' Equity
15,919
14,991
Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.
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