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Rachel owns a franchise restaurant, which is part of a large restaurant chain in New England. Help her calculate a vertical analysis of her balance sheet.

Rachel's Restaurant Balance Sheet December $31$ This Year

$ $\%$

ASSETS

Current Assets

$$Cash $57,317$

$$Marketable Securities $130,769$

$$Net Receivables $80,000$

$$Inventories $34,545$

$$Total Current Assets

$$

Investments $248,837$

Property and Equipment

$$Land $206,053$

$$Building $418,665$

$$Furnishings and Equipment $205,556$

$$Less Accumulated Depreciation $135,429$

$$Total Property and Equipment$$Net

Other Assets $15,814$

Total Assets

$$

LIABILITIES AND OWNERS' EQUITY

$$

Current Liabilities

$$Accounts Payable $142,439$

$$Notes Payable $31,905$

$$Other Current Liabilities $147,907$

$$Total Current Liabilities

$$

Long$$Term Liabilities

$$Long$$Term Debt $218,272$

$$Total Liabilities

$$

Owners' Equity

$$Common Stock $78,947$

$$Paid in Capital $324,324$

$$Retained Earnings $318,333$

$$Total Owners' Equity

$$

$$TOTAL LIABILITIES AND OWNERS' EQUITY

Rachel has been given by her regional franchise services director manager some balance sheet percentage averages for chain$$operated units. Select percentages of the chain$$operated units are given as follows:

Select Chain Percentages $($Vertical Analysis$)$

Cash $6\mathrm{.}70\%$

Inventories $1\mathrm{.}30\%$

Accounts Payable $10\mathrm{.}50\%$

Notes Payable $1\mathrm{.}10\%$

Compare Rachel's cash $\%$ with the chain units' $\%.$ Is it higher or lower? What does this mean?

Compare Rachel's inventories $\%$ with the chain units' $\%.$ Is it higher or lower? What does this mean?

Compare Rachel's accounts payable $\%$ with the chain units' $\%.$ Is it higher or lower? What does this mean?

Compare Rachel's notes payable $\%$ with the chain units' $\%.$ Is it higher or lower? What does this mean?

Answer & Explanation Solved by verified expert

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