The following data are taken from the comparative balance sheet prepared for Elison Company:
|
2003 |
2002 |
|
|
Cash . |
$68,000 |
$50,000 |
|
Accounts receivable . |
86,000 |
80,000 |
|
Inventory |
136,000 |
60,000 |
|
Property, plant, and equipment |
182,000 |
110,000 |
|
Total assets . |
$472,000 |
$300,000 |
Sales for 2003 were $2,000,000. Sales for 2002 were $1,600,000.
1. Prepare the asset section of a common size balance sheet for Elison Company for 2003 and 2002.
2. Overall, Elison is less efficient at using its assets to generate sales in 2003 than in 2002. What asset or assets are responsible for this decreased efficiency?