Prepare a vertical analysis of the balance sheet for Liu Company. (Round to the

Question

Prepare a vertical analysis of the balance sheet for Liu Company. (Round to the nearest whole percent.)

A condensed balance sheet for Liu Company is presented below: Required:

Prepare a vertical analysis of the balance sheet for Liu Company. (Round to the nearest whole percent.)

current assets current liabilities cash & cash equivalents $14,968 ___% accounts payable $866 ___% accounts receivable $450 ___% accrued liabilities 5,304 ___% inventories 1,836 total current assets 17,254 ___% total current liabilities 6,170 ___% property & equipment, net 6,060 ___% long-term liabilities 2,430 ___% long-term investments 5,186 ___% total liabilities 8,600 ___% ___% total stockholders equity 19,900 ___% total assets 28,500 total liabilities & stockholders equity 28,500

Explanation / Answer

Note: Total current assets is 61% of the total assets. Similarly total current liabilities and total liabilities are 22% and 30% of the total liabilitites and stockholders equity respectively.

Vertical analysis of the balance sheet for Liu Company. current assets $ % current liabilities $ % cash & cash equivalents 14968 53% accounts payable 866 3% accounts receivable 450 2% accrued liabilities 5,304 19% inventories 1,836 6% total current assets 17,254 61% total current liabilities 6,170 22% property & equipment, net 6,060 21% long-term liabilities 2,400 8% long-term investments 5,186 18% total liabilities 8,600 30% total stockholders equity 19,900 70% total assets 28,500 100% total liabilities & stockholders equity 28,500 100%

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