As the newest hire to the financial analysis group at Patterson Printing Company

Question

As the newest hire to the financial analysis group at Patterson Printing Company, you have been asked to perform a basis financial analysis of the company's most recent financial statements. The 2016 balance sheet and income statement for the Patterson are shown here: LOADING.... a. After discussing your training asignment with a fellow analyst who was hired last year, you learn that the first step in your completing the assignment is to prepare a common-size balance sheet for Patterson. b. The second step is to prepare a common-size income statement for the firm. a. After discussing your training asignment with a fellow analyst who was hired last year, you learn that the first step in your completing the assignment is to prepare a common-size balance sheet for Patterson. Complete the common-size balance sheet below:(Round to one decimal place.) Common-Size Balance Sheet 2016 Cash and marketable securities $ 530 % Accounts receivable 5,980 Inventory 9,490 Total current assets $ 16,000 % Net property, plant, and equipment 17,020 Total assets $ 33,020 % Accounts payable $ 7,150 % Short-term debt 6,760 Total current liabilities $ 13,910 % Long-term liabilities 7,050 Total liabilities $ 20,960 % Total common stockholders’ equity 12,060 Total liabilities and shareholders’ equity $ 33,020 %

Explanation / Answer

Ans. PATTERSON PRINTING COMPANY COMMON SIZE BALANCE SHEET OF 2016 ASSETS LIABILITIES and OWNERS' EQUITY 2016 % 2016 % Current Assets Current Liabilities Cash and marketable securities 530 1.6% Accounts payables 7150 21.7% Accounts receivables 5980 18.1% Short term debt 6760 20.5% Inventory 9490 28.7% Total current liabilities (a) 13910 42.1% Total current assets 16000 48.5% Long term liabilities (b) 7050 21.4% Net property, plant and Total liabilities (c = a+b) 20960 63.5% equipment 17020 51.5% Total common stockholders' equity (d) 12060 36.5% Total assets 33020 100.0% Total liabilies and shareholders' equity (c+d) 33020 100.0% *Calculations: Percentage for 2016 (assets side) = Particular asset of 2016 / total assets * 100 Percentage of 2016 (liabilities side) = Particular liability of 2016 / Total liabilities and owners' equity * 100

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