Question

Using the horizontal analysis of the balance sheet, identify the significant trends

	FY 2015	FY 2014	$ Change	% Change	FY 2013	$ Change	% Change
ASSETS
Cash and cash equivalents	$                   4,046	$                   2,210	$   1,836	83.08%	$                      670	$   1,540	229.85%
Inventory	8,601	8,790	$    (189)	-2.15%	8,278	$      512	6.19%
Assets of discontinued operations	322	1,333	$ (1,011)	-75.84%	793	$      540	68.10%
Other current assets	1,161	1,754	$    (593)	-33.81%	1,832	$      (78)	-4.26%
Total current assets	$                 14,130	$                 14,087	$        43	0.31%	$                 11,573	$   2,514	21.72%
Property and equipment			$         -
Land	6,125	6,127	$         (2)	-0.03%	6,143	$      (16)	-0.26%
Buildings and equipment	27,059	26,614	$      445	1.67%	25,984	$      630	2.42%
Fixtures and equipment	5,347	5,346	$          1	0.02%	5,199	$      147	2.83%
Computer hardware and software	2,617	2,553	$        64	2.51%	2,395	$      158	6.60%
Construction-in-progress	315	424	$    (109)	-25.71%	757	$    (333)	-43.99%
Accumulated depreciation	(16,246)	(15,106)	$ (1,140)	7.55%	(14,066)	$ (1,040)	7.39%
Property and equipment, net	$                 25,217	$                 25,958	$    (741)	-2.85%	$                 26,412	$    (454)	-1.72%
Noncurrent assets of discontinued operations	75	442	$    (367)	-83.03%	5,461	$ (5,019)	-91.91%
Other noncurrent assets	840	917	$      (77)	-8.40%	1,107	$    (190)	-17.16%
Total assets	$                 40,262	$                 41,404	$ (1,142)	-2.76%	$                 44,553	$ (3,149)	-7.07%
LIABILITIES
Accounts payable	$                   7,418	$                   7,759	$    (341)	-4.39%	$                   7,335	$      424	5.78%
Accrued and other current liabilities	4,236	3,783	$      453	11.97%	3,610	$      173	4.79%
Current portion of long-term debt and other borrowings	815	91	$      724	795.60%	1,143	$ (1,052)	-92.04%
Liabilities of discontinued operations	153	103	$        50	48.54%	689	$    (586)	-85.05%
Total current liabilities	$                 12,622	$                 11,736	$      886	7.55%	$                 12,777	$ (1,041)	-8.15%
Long-term debt and other borrowings	$                 11,945	$                 12,705	$    (760)	-5.98%	$                 11,429	$   1,276	11.16%
Deferred income taxes	823	1,321	$    (498)	-37.70%	1,349	$      (28)	-2.08%
Noncurrent liabilities of discontinued operations	18	193	$    (175)	-90.67%	1,296	$ (1,103)	-85.11%
Other noncurrent liabilities	1,897	1,452	$      445	30.65%	1,471	$      (19)	-1.29%
Total noncurrent liabilities	$                 14,683	$                 15,671	$    (988)	-6.30%	$                 15,545	$      126	0.81%
Total liabilities	$                 27,305	$                 27,407	$    (102)	-0.37%	$                 28,322	$    (915)	-3.23%
SHAREHOLDERS' INVESTMENT
Common stock	$                        50	$                        53	$         (3)	-5.66%	$                        53	$         -	0.00%
Additional paid-in capital	5,348	4,899	$      449	9.17%	4,470	$      429	9.60%
Retained earnings	8,188	9,644	$ (1,456)	-15.10%	12,599	$ (2,955)	-23.45%
Accumulated other comprehensive loss			$         -			$         -
Pension and other benefit liabilities	(588)	(561)	$      (27)	4.81%	(422)	$    (139)	32.94%
Currency translation adjustment and cash flow hedges	(41)	(38)	$         (3)	7.89%	(469)	$      431	-91.90%
Total shareholders' investment	$                 12,957	$                 13,997	$ (1,040)	-7.43%	$                 16,231	$ (2,234)	-13.76%
Total liabilities and shareholders' investment	$                 40,262	$                 41,404	$ (1,142)	-2.76%	$                 44,553	$ (3,149)	-7.07%

Answer 1

1. Cash and cash equivalents increased significantly from 2013 to 2014 by 230% approx. Increase from 2014 to 2015 is 83 %. Similarly inventory increased from 2013 to 2014 and decreased from 2014 to 2015. In case of other current assets decresed from 2013 to 2014 and decreased with increasing trend from 2014 to 2015. Overall situation of current asset is that trend is decreasing year by year.

2. In case of fixed assets investment is also decreasing year by year.

3. In case of total current liablities, firstly it decreased from 2013 to 2014 and then increased from 2014 to 2015. Overall situation of current liablity is same from 2013 to 2015.

4. As we observe that currrent assets are decreasing and current liabilities remain same. It mean that working capital is decreasing year by year. That is not a good sign for short term financial position.

5. Long term borrowing increased from 2013 to 2014 and then decreased from 2014 to 2015.

6. Company buy back its common stock in year 2014 to 2015. But paid up capital is increasing year by year.