(a) Using the Consolidated Balance Sheets for Walgreen Co. for August 31, 2013 and 2012, prepare a common-size balance sheet.
(b) Which current asset is the most significant? Which noncurrent asset is the most significant? Are the relative proportions of current and noncurrent assets what you would expect for a drug store?
(c) Analyze accounts receivable and allowance for doubtful accounts.
(d) What inventory method is used to value inventories? H as Walgreen experienced inflation or deflation? Explain your answer. Explain the reference in the inventory note to the LIFO liquidation and what this means with regard to net income reported.
(e) Assess the level of debt and risk that Walgreen has by looking only at the balance sheet.
(f) Estimate the dollar amount of dividends Walgreen paid in 2013.
(g) Does Walgreen use off-balance sheet financing? Explain your answer.
(h) Evaluate the creditworthiness of Walgreen based on the balance sheet and the excerpts from the notes.
The following excerpts are from the 2013 Walgreen Co. Form 10-K:

Inventories
Inventories are valued on a lower of last-in, first-out (LIFO) cost or market basis. At August 31, 2013 and 2012, inventories would have been greater by $2.1 billion and $1.9 billion, respectively, if they had been valued on a lower of first-in, first-out (FIFO) cost or market basis. As a result of declining inventory levels, the fiscal 2013 and 2012 LIFO provisions were reduced by $194 million and $268 million of LIFO liquidation, respectively. Inventory includes product costs, inbound freight, warehousing costs, and vendor allowances not classified as a reduction of advertising expense?

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CONSOLIDATED BALANCE SHEETS Walgreen Co. and Subsidiaries at August 31, 2013 and 2012 n millions, except shares and per share amounts) 2013 Current Assets Cash and cash equivalents Accounts receivable, net Inventories Other current assets $ 2,106 1,297 2,632 2,167 6,852 7,036 260 11,874 0,760 284 Total Current Assets Property and equipment, at cost, less accumulated depreciation Equity investment in Alliance Boots Noncurrent Assets 12,138 12,038 2,410 2,161 6,261 6,140 866 1,959 1,497 23,607 22,702 $35481 $33462 Alliance Boots call option 839 Other noncurrent assets Total Noncurrent Assets Total Assets Liabilities and Shareholders' Equity Current Liabilities Short-term borrowings Trade accounts payable Accrued Income taxes $570 $1,319 4,635 4,384 3,577 3,019 expenses and other liabilities 101 Total Current Liabilities 8,883 8,722 NonCurrent Liabilities Long-term debt Deferred income taxes Other noncurrent liabilities 4,477 4,073 545 2,067 1,886 6,504 600 Total Noncurrent Liabilities 7,144 Commitments and Contingencies (see Note) Shareholders' Equity Preferred stock, $.0625 par value; authorized 32 million shares; none issued Common stock, $.078125 par value; authorized 3.2 billion shares; issued 1,028,180,150 shares in 2013 and 2012 Paid-in capital 80 936 (19) 21,523 20,156 80 1,074 Employee stock loan receivable Retained earnings Accumulated other comprehensive (loss) income Treasury stock at cost, 81,584,572 shares in 2013 and 84,124,816 shares Total Shareholders' Equity Total Liabilities and Shareholders' Equity (3,114) (2,985) 19.454 18.236 $35481 $33462