how has xyz changed its financial management strategies do these changes seem to be 582055

Interpreting Financial Statements

XYZ Corporation’s 2000 and 1999 balance sheets are summarized below (dollars in millions):

Current Assets	12 31 00	12 31 99
Cash and temporary investments	$ 535	$ 499
Receivables, less allowances	706	668
Materials and supplies	211	199
Prepaid and other	213	215
Total current assets	1,665	1,581
Property, plant, and equipment
Net property, plant and equipment	11,044	10,778
Investment in affiliates and other companies	302	268
Other assets and deferred charges	713	793
Total assets	$13,724	$13,420
Current Liabilities
Debt maturing within one year	312	146
Accounts payable and other current
liabilities	1,992	1,965
Short term debt	201	164
Total current liabilities	2,505	2,275
Long term debt	2,618	3,133
Deferred income taxes	2,570	2,341
Long term liabilities and deferred gains	2,300	2,491
Shareowners’ equity
Common stock and retained earnings	3,731	3,180
Total liabilities and shareowners’ equity	$13,724	$13,420

Required

a. With regard to XYZ’s balance sheet, identify any unusual or unfamiliar terms. Describe your understanding of each new or unfamiliar term.

b. Calculate the current and quick ratios for each year and analyze XYZ’s liquidity.

c. What recommendations would you suggest to XYZ about its liquidity?

d. Calculate and evaluate XYZ’s debt to asset ratios for each year. Calculate any other appropriate asset management or debt management ratios.

e. How has XYZ changed its financial management strategies? Do these changes seem to be appropriate? Why?