Compare and contrast the two common–size balance sheets below. Which one do you think may belong to an auto manufacturer? To a computer manufacturer? Common–Size Balance Sheets
|
ASSETS |
FIRM A |
FIRM B |
|
Cash |
26.7% |
10.6% |
|
Accounts receivable |
18.8% |
0.9% |
|
Inventory |
1.7% |
2.9% |
|
Other current assets |
7.9% |
5.0% |
|
Total current assets |
55.1% |
19.4% |
|
Net plant and equipment |
7.9% |
13.3% |
|
Other long-term assets |
37.1% |
67.3% |
|
Total assets |
100.0% |
100.0% |