In addition to common?size financial statements, common?base year financial statements are often used. Common?base year financial statements are constructed by dividing the current year account value by the base year account value. The result shows the growth rate in the account. Using the following financial statements, construct the common-size balance sheet and common?base year balance sheet for the company. Use 2018 as the base year.

Use the following information for Problems 19, 20, and 22: The discussion of EFN in the chapter implicitly assumed that the company was operating at full capacity. Often, this is not the case. Assume that Rosengarten was operating at 90 percent capacity. Fullcapacity sales would be $1,000/.90 = $1,111. The balance sheet shows $1,800 in fixed assets. The capital intensity ratio for the company is:

Capital intensity ratio = Fixed assets/Full-capacity sales = $1,800 / $1,111 = 1.62

This means that Rosengarten needs $1.62 in fixed assets for every dollar in sales when it reaches full capacity. At the projected sales level of $1,250, it needs $1,250 ? 1.62 = $2,025 in fixed assets, which is $225 lower than our projection of $2,250 in fixed assets. So, EFN is $565 - 225 = $340.

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JARROW CORPORATION 2018 and 2019 Balance Sheets Liabilities and Owners' Equity Assets 2018 2019 2018 Current liabilities Current assets Accounts $ 58,483 Cash 11,459 $ 14,453 payable Notes payable Accounts 24.973 $ 83,456 receivable 29,247 Total 33,304 Long-term 60.689 debt $ 34,500 52,655 Inventory $ Owners' 108,446 equity Total 93,361 Common stock and paid-in surplus $ 54,000 Fixed assets Net plant and Retained 2$ equipment 301,978 $353,330 earnings 223,383 Total $277,383 Total liabilities and owners' 395,339 $461,776 Total assets equity $395,339