Deriving a balance sheet analysis


Problem:

Following are the common-size balance sheets from companies: Pfizer, Inc., a global research –driven pharmaceutical company; JC Penney, national retailer; Time Warner, a global media and Entertainment Company; and Duke Energy, a leading energy company focused on electric power and gas distribution.

Based on your general business knowledge, the environments in which the above firms operate, and information derive from the balance sheet analysis, match the company with its respective balance sheet.  Explain each the choices that you made. Common-Size Balance Sheet Comparisons

                                                                                            Company                

                                                                 A                    B                       C                      D

Assets

Current assets

Cash and marketable securities                 23.93%           12.19%               2.70%               7.30%

Current receivables                                    0.00                6.88                  3.05                  7.78

Inventories                                                24.04              5.82                   2.66                  2.71                              

Other current assets                                   4.90                4.06                   1.70                  2.00

Total current assets                                   52.87%            29.96%              10.11%             19.79%            

Noncurrent assets                                      42.58               10.70                 66.53%              6.03

Property, plant, and equipment                    0.00                 51.84                  8.67                61.92

Goodwill and intangibles, net                        4.55                 8.50                   14.69                12.26

Other assets, net                                       100.00%          100.00%              100.00%          100,00%

Total assets                                                          

Liabilities and Stockholder' Equity

Current liabilities

Total current liabilities                                   25.82%            17.48%                7.17%              13.33%

Long-term liabilities                                       36.20               40.05                   54.46                35.36

Total liabilities                                               62.02               57.53                   61.63                 48.69

Stockholders' equity                                          

Contribute capital and other equity items*        21.90                23.49                   35.84               199.11

Retained Earnings (deficit)                               16.08                18.98                    2.56               (147.80)

Total liabilities and stockholders' equity           100.00%            100.00%               100.00%          100.00%

Net of cost of shares repurchased for treasury and other comprehensive income items.

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Finance Basics: Deriving a balance sheet analysis
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