Question

In: Finance

How do you standardize the balance sheet? In other words, how do you compute a common-size...

How do you standardize the balance sheet? In other words, how do you compute a common-size account in the Balance Sheet. Give an example

Solutions

Expert Solution

To standardize a balance sheet, we will use the total assets/ equity + liability as the base. All other items in the balance sheet are stated as a percentage of the total assets. Hence, making both the sides of the balance sheet equal to 100% and tally. Please refer to the image below for the example-

Do leave an upvote if you find this helpful. In case of any doubt please let me know in the comment section.

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

How do you standardize the balance sheet? In other words, how do you compute a common-size...
How do you standardize the balance sheet? In other words, how do you compute a common-size account in the Balance Sheet. Give an example.
How do you standardize income statements? In other words, how do you compute a common-size account...
How do you standardize income statements? In other words, how do you compute a common-size account item in the Income Statement? Give an example.
To create a common size balance sheet ____________ all items on the balance sheet by ____________....
To create a common size balance sheet ____________ all items on the balance sheet by ____________. 1. multiply; owners equity 2. multiply; total assets 3. divide; owners equity 4. divide; total assets 5. multiply; debt
Prepare the common-size balance sheet and common-base-year balance sheet for the company. Use 2013 as the...
Prepare the common-size balance sheet and common-base-year balance sheet for the company. Use 2013 as the base year. (Do not round intermediate calculations. Enter all common-size answers as a percent. Round your common-size answers to 2 decimal places (e.g., 32.16) and common-base-year answers to 4 decimal places (e.g., 32.1616).) JARROW CORPORATION 2013 Common-size 2014 Common-size Common-base year Assets   Current assets     Cash $8,964 % $10,904 %     Accounts receivable 22,353 % 24,837 %     Inventory 38,722 % 43,697 %         Total $70,039 % $79,438...
Common-Size Balance Sheets Following is the balance sheet for Target Corporation. Prepare Target’s common-size balance sheets...
Common-Size Balance Sheets Following is the balance sheet for Target Corporation. Prepare Target’s common-size balance sheets as of January 31, 2015 and February 1, 2014. (Round your answers to one decimal place.) ($ millions) January 31, 2015 February 1, 2014 Assets Cash and cash equivalents $2,210 $670 Inventory 8,790 8,278 Other current assets 3,087 2,625 Total current assets 14,087 11,573 Property and equipment, net 25,958 26,412 Other noncurrent assets 1,359 6,568 Total assets $41,404 $44,553 Liabilities and shareholders’ investment Accounts...
explain what it means to common-size a balance sheet. How is it done? Why is it...
explain what it means to common-size a balance sheet. How is it done? Why is it useful?
A common size balance sheet expresses the balance sheet items as a percentage of total assets....
A common size balance sheet expresses the balance sheet items as a percentage of total assets. Select one: True False
Below is the balance sheet information on two companies. Prepare a common-size balance sheet for each...
Below is the balance sheet information on two companies. Prepare a common-size balance sheet for each company. Review each company's percentage of total assets. Are these companies operating with similar philosophies or in similar industries? What appears to be the major difference in financing for these two companies? Account Balance Sheet Company 1 Balance. Sheet Company 2 Current Assets Cash $5,377 $299 Investments $4,146 $354 Accts. Rec. $8,100 $221 Inventory $5,372 $494 Total Current $22,995 $1,368 Long Inv. $84 $307...
A common size balance sheet or common size income statement expresses everything in percentages rather than...
A common size balance sheet or common size income statement expresses everything in percentages rather than in numbers. Your manager has just asked you why you need to spend the time and money to have your analyst create both a common size and a regular balance sheet and income statement. How would you respond to her?
​(Analyzing common-size financial​ statements) Use the​ common-size financial statements found​ here: Common-Size Balance Sheet 2016 Cash...
​(Analyzing common-size financial​ statements) Use the​ common-size financial statements found​ here: Common-Size Balance Sheet 2016 Cash and marketable securities $ 500 1.5 % Accounts receivable 6,000 18.2 Inventory 9,450 28.7 Total current assets $ 15,950 48.4 % Net property, plant, and equipment 16,980 51.6 Total assets $ 32,930 100.0 % Accounts payable $ 7,240 22.0 % Short-term notes 6,750 20.5 Total current liabilities $ 13,990 42.5 % Long-term liabilities 6,990 21.2 Total liabilities $ 20,980 63.7 % Total common shareholders’...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT