Question

Joshua & White Technologies: December 31 Balance Sheets
(Thousands of Dollars)
Assets			2016	2015
Cash and cash equivalents			$21,000	$20,000
Short-term investments			3,759	3,240
Accounts Receivable			52,500	48,000
Inventories			84,000	56,000
Total current assets			$161,259	$127,240
Net fixed assets			218,400	200,000
Total assets			$379,659	$327,240
Liabilities and equity
Accounts payable			$33,600	$32,000
Accruals			12,600	12,000
Notes payable			19,929	6,480
Total current liabilities			$66,129	$50,480
Long-term debt			67,662	58,320
Total liabilities			$133,791	$108,800
Common stock			183,793	178,440
Retained Earnings			62,075	40,000
Total common equity			$245,868	$218,440
Total liabilities and equity			$379,659	$327,240

Joshua & White Technologies December 31 Income Statements
(Thousands of Dollars)
			2016	2015
Sales			$420,000	$400,000
COGS except excluding depr. and amort.			300,000	298,000
Depreciation and Amortization			19,660	18,000
Other operating expenses			27,600	22,000
EBIT			$72,740	$62,000
Interest Expense			5,740	4,460
EBT			$67,000	$57,540
Taxes (40%)			26,800	23,016
Net Income			$40,200	$34,524
Common dividends			$18,125	$17,262
Addition to retained earnings			$22,075	$17,262
Other Data			2016	2015
Year-end Stock Price			$90.00	$96.00
# of shares (Thousands)			4,052	4,000
Lease payment (Thousands of Dollars)			$20,000	$20,000
Sinking fund payment (Thousands of Dollars)			$5,000	$5,000

e.  Perform a common size analysis. What has happened to the composition
(that is, percentage in each category) of assets and liabilities?
Common Size Balance Sheets
Assets			2016	2015
Cash and cash equivalents
Short-term investments
Accounts Receivable
Inventories
Total current assets
Net fixed assets
Total assets
Liabilities and equity			2016	2015
Accounts payable
Accruals
Notes payable
Total current liabilities
Long-term debt
Total liabilities
Common stock
Retained Earnings
Total common equity
Total liabilities and equity
Common Size Income Statements			2016	2015
Sales
COGS except excluding depr. and amort.
Depreciation and Amortization
Other operating expenses
EBIT
Interest Expense
EBT
Taxes (40%)
Net Income

Answer 1

Joshua & White Technologies: December 31 Balance Sheets
(Thousands of Dollars)
		%		%
Assets	2016		2015
Cash and cash equivalents	21000	5.53%	20000	6.11%
Short-term investments	3,759	0.99%	3,240	0.99%
Accounts Receivable	52,500	13.83%	48,000	14.67%
Inventories	84,000	22.13%	56,000	17.11%
Total current assets	161259	42.47%	127240	38.88%
Net fixed assets	2,18,400	57.53%	2,00,000	61.12%
Total assets	379659	100.00%	327240	100.00%
Liabilities and equity
Accounts payable	33600	8.85%	32000	9.78%
Accruals	12,600	3.32%	12,000	3.67%
Notes payable	19,929	5.25%	6,480	1.98%
Total current liabilities	66129	17.42%	50480	15.43%
Long-term debt	67,662	17.82%	58,320	17.82%
Total liabilities	133791	35.24%	108800	33.25%
Common stock	1,83,793	48.41%	1,78,440	54.53%
Retained Earnings	62,075	16.35%	40,000	12.22%
Total common equity	245868	64.76%	218440	66.75%
Total liabilities and equity	379659	100.00%	327240	100.00%
ANALYSIS:
*The % of current assets to total assets has gone up in 2016 by nearly 4% points.
*Of the current assets the % of inventory has gone up by more than 5% in 2016
*The total current liabilities has gone up by 2%, with the major increase in notes payable.
*There is an increase of 2% in total liabilities.
*Within equity, retained earnings composition has increased by more than 4%
Joshua & White Technologies December 31 Income Statements
(Thousands of Dollars)
	2016	%	2015	%
Sales	420000	100.00%	400000	100.00%
COGS except excluding depr. and amort.	3,00,000	71.43%	2,98,000	74.50%
Depreciation and Amortization	19,660	4.68%	18,000	4.50%
Other operating expenses	27,600	6.57%	22,000	5.50%
EBIT	72740	17.32%	62000	15.50%
Interest Expense	5,740	1.37%	4,460	1.12%
EBT	67000	15.95%	57540	14.39%
Taxes (40%)	26,800	6.38%	23,016	5.75%
Net Income	40200	9.57%	34524	8.63%
Common dividends	18125	4.32%	17262	4.32%
Addition to retained earnings	22075	5.26%	17262	4.32%
Other Data	2016		2015
Year-end Stock Price	$90.00		$96.00
# of shares (Thousands)	4,052		4,000
Lease payment (Thousands of Dollars)	$20,000		$20,000
Sinking fund payment (Thousands of Dollars)	$5,000		$5,000
ANALYSIS:
The NI % has increased by about 1% only.
Though COGS has decreased in %, the operating expenses have gone up.