If the above balance sheet is for a retail company, what indications about this company would best be drawn from the changes in the balance sheet between 2007 and 2008?
Use the table for the question(s) below.
Balance Sheet
Assets 2007 2008 Liabilities 2007 2008
Current Assets Current Liabilities
Cash 50 46 Accounts payable 42 48
Accounts receivable 22 12 Notes payable/short-term debt 7 5
Inventories 17 38
Total current assets 89 96 Total current liabilities 49 53
Long-Term Assets Long-Term Liabilities
Net property, plant,
and equipment 121 116 Long-term debt 128 136
Total long-term assets 121 116 Total long-term liabilities 128 136
Total Liabilities 177 189
Stockholders' Equity 33 23
Total Assets 210 212 Total Liabilities and 210 212
Stockholders' Equity
A) The company is having difficulties selling its product.
B) The company has reduced its debt.
C) The company has added a major new asset in terms of plant and equipment.
D) The company has experienced a significant rise in its market value.
Answer: A
You might also like to view...
A goal programming model seeks to meet its goals in the order of their priority
a. True b. False
Federal agency issues ________
A) are obligations of U.S. treasury B) generate slightly higher returns than corporate bonds C) generate slightly higher returns than U.S. Treasury issues D) don't have strong secondary market