EnviroFriend Structures, Inc., builds environmentally sensitive structures. The company’s 2021 revenues totaled $2,780 million. At December 31, 2021 and 2020, the company had, respectively, $656 million and $591 million in current assets. The company’s balance sheets and income statements reported the following amounts:

Requirements

1. Describe each of EnviroFriend’s long-term liabilities and state how the liability arose.

2. What were the company’s total assets at December 31, 2021? Evaluate the company’s leverage and debt ratios at the end of 2020 and 2021. Use year-end figures in place of averages where needed for calculating the ratios in this exercise. Did the company improve, deteriorate, or remain about the same over the year?

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123456 A1 At year-end (In millions) 2 Liabilities and stockholders' equity 3 Current liabilities 15 16 Accounts payable Accrued expenses Employee compensation and benefits Current portion of long-term debt Total current liabilities 7 8 9 Long-term bonds payable 10 Deferred income taxes payable 11 Leases payable 12 Common stockholders' equity 13 Total liabilities and stockholders' equity 14 Year-end (in millions) Cost of goods sold 2021 $ 148 149 14 3 314 1,485 134 5 1,844 $ 3,782 $ 2,656 2020 $184 177 30 20 411 1,313 131 23 1,584 $3,462 $ 2,046