Polygram is an international entertainment company, which has published such hits as Billy Ray Cyrus’ Achy Breaky Heart. Polygram is headquartered in Amsterdam. It lists the following current liabilities in a note to its 1994 annual report

(stated in millions of Netherlands guilders):

1993 1994 Payables to banks 25 155 Short-term notes 459 749 Accounts payable to trade creditors 665 798 Accounts payable to other companies 41 20 Income taxes payable 106 139 Dividend payable (to shareholders) 135 153 Other accrued expenses 1,931 2,167 Total 3,362 4,181 Required

a. Identify and describe each of Polygram’s current liabilities. Describe the business purpose of each liability.

b. Identify and discuss any unusual trends in its current liabilities.

c. Given that Polygram’s total assets and net sales increased by only about 5%, how does that affect your evaluation of its current liabilities?

d. Assume that most of the other accrued expenses are comprised of accrued license fees. Why would such a firm have almost half its current liabilities in accrued license fees? Discuss the timing associated with the payments of such fees, as compared to Polygram’s debts to banks or to trade creditors?