Analyze the following common size balance sheet. Consider thebelow guidance:
Have structural changes taken place in the components of thebalance sheet?
How have cash and other assets evolved from 2016 to 2017 andwhat appear to be the uses of cash during the year?
How has the financing structure of the company evolved from2016 to 2017?
Considering the limited information provided, does the companyappear to have been more or less profitable, risky and liquidduring the year?
2017 2016
Current assets
Cash 5% 15%
Accounts receivable 20% 17%
Inventory 35% 20%
Total current assets 60% 52%
PPE 35% 38%
Other assets 5% 10%
Total assets 100% 100%
Current liabilities
Accounts payable 32% 20%
Short term debt 20% 40%
Total current liabilities 52% 60%
Long-term debt 22% 15%
Total liabilities 74% 75%
Capital 5% 15%
Retained earnings 21% 10%
Total equity 26% 25%
Total liabilities&equity 100% 100%
