Analyze the following balance sheet: Consolidated Balance Sheet: Consolidated Ba
ID: 2792458 • Letter: A
Question
Analyze the following balance sheet: Consolidated Balance Sheet:
Consolidated Balance Sheets - USD ($) $ in Thousands Dec. 31, 2016 Dec. 31, 2015 Current assets: Cash and cash equivalents (Note 14) $ 2,045,961 $ 1,939,469 Short-term investments (Notes 4 and 14) 150,000 100,000 Accounts receivable, net (Note 5) 1,631,676 1,383,823 Inventories, net (Notes 2 and 6) 2,479,958 2,245,469 Other current assets (Note 13) 198,798 185,644 Total current assets 6,506,393 5,854,405 Property, plant and equipment, net (Note 7) 5,078,650 4,891,153 Goodwill (Note 3 and 8) 2,052,728 2,011,278 Other intangible assets, net (Note 3 and 8) 866,835 770,672 Other assets (Note 9) 718,912 799,461 Total assets 15,223,518 14,326,969 Current liabilities: Short-term debt (Notes 11 and 14) 17,959 51,315 Long-term debt due within one year (Notes 11 and 14) 600,000 Accounts payable (Note 10) 838,109 566,527 Salaries, wages and related accruals (Note 17) 428,829 289,004 Accrued expenses and other current liabilities (Notes 10, 13 and 15) 505,069 478,327 Total current liabilities 2,389,966 1,385,173 Long-term debt due after one year (Notes 2, 11 and 14) 3,739,141 4,337,145 Deferred credits and other liabilities (Notes 2, 13, 15, 17 and 19) 839,703 754,774 Total liabilities 6,968,810 6,477,092 Commitments and contingencies (Notes 13 and 15) Nucor stockholders' equity (Notes 12 and 16): Common stock (800,000 shares authorized; 379,334 and 378,566 shares issued, respectively) 151,734 151,426 Additional paid-in capital 1,974,672 1,918,970 Retained earnings (Note 2) 7,630,916 7,316,910 Accumulated other comprehensive loss, net of income taxes (Notes 2, 13 and 20) (317,843) (351,362) Treasury stock (60,597 and 60,604 shares, respectively) (1,559,614) (1,558,128) Total Nucor stockholders' equity 7,879,865 7,477,816 Noncontrolling interests 374,843 372,061 Total equity 8,254,708 7,849,877 Total liabilities and equity $ 15,223,518 $ 14,326,969Explanation / Answer
31-Dec-16
31-Dec-15
Ratio
Current Ratio (Current assets/ current liabilities)
Total Current Assets ($)
6506393
5854405
Total Current Liabilities ($)
2389966
1385173
Current Ratio
2.7223789
4.2264793
Quick Ratio = Current Assets - Inventory/ Total Current Liabilities
Inventory ($)
2479958
2245469
Quick Ratio = Current Assets - Inventory/ Total Current Liabilities
1.6847248
2.6054045
Fixed Assets ($)
Property, plant and equipment, net (Note 7)
5078650
4891153
Goodwill (Note 3 and 8)
2052728
2011278
Other intangible assets, net (Note 3 and 8)
866835
770672
Fixed Assets ($)
7998213
7673103
Total Assets ($)
15223518
14326969
Fixed Assets/ Total Assets
0.5253853
0.5355706
Long-term debt due after one year (Notes 2, 11 and 14)
3739141
4337145
Total Nucor stockholders' equity
7879865
7477816
Long Term Debt / Total Equity
0.4745184
0.5800016
Current Ratio of the company for the year 31st Dec 2015 was 4.23 which reduced to 2.72 in the year 31st Dec 2016. The change in Ratio was (4.23-2.72/4.23*100) 36% (approx) and most of it was accountable for the purpose of increasing the current liabilities which indicates that the company did not pay out much of its current liabilities in 2016 than in comparison to 2015 thereby reducing the ratio.
Quick ratio of the company for the year 31st Dec 2015 was 2.61 which reduced to 1.68 in the year 31st Dec 2016. The change in ratio was (2.61-1.68)/2.61*100 = 35% (approx) and here the inventory increased in the year 31st Dec 2016 by (2479958-2245469)/2245469*100 = 10.5% (approx) from the previous year indicating that the closing stock has piled up but the sales has not gone up.
Fixed Assets to Total Assets for the company in the year 31st Dec 2015 and 31st Dec 2016, has remained more in the same range of 0.53 and 0.52 which means that asset utilization in terms of total assets for both the years has remain unchanged.
Long term Debt to Equity or (Debt Equity ratio) has lowered in 31st Dec 2016 as compared to 31st Dec 2015. In 2015, the (D/E) ratio was 0.58 but in 2016 it has come down to 0.47 and the reason for such is the lowering of the long term debt. It indicates that the company has redeemed its debt in 2016 and also wants to curb its leverage zone by a good margin since the fall is around (0.58-0.4745/0.58)*100 = 18% (approx).
31-Dec-16
31-Dec-15
Ratio
Current Ratio (Current assets/ current liabilities)
Total Current Assets ($)
6506393
5854405
Total Current Liabilities ($)
2389966
1385173
Current Ratio
2.7223789
4.2264793
Quick Ratio = Current Assets - Inventory/ Total Current Liabilities
Inventory ($)
2479958
2245469
Quick Ratio = Current Assets - Inventory/ Total Current Liabilities
1.6847248
2.6054045
Fixed Assets ($)
Property, plant and equipment, net (Note 7)
5078650
4891153
Goodwill (Note 3 and 8)
2052728
2011278
Other intangible assets, net (Note 3 and 8)
866835
770672
Fixed Assets ($)
7998213
7673103
Total Assets ($)
15223518
14326969
Fixed Assets/ Total Assets
0.5253853
0.5355706
Long-term debt due after one year (Notes 2, 11 and 14)
3739141
4337145
Total Nucor stockholders' equity
7879865
7477816
Long Term Debt / Total Equity
0.4745184
0.5800016
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