(Analyzing common-size financial statements) Use the common-size financial statements found here:E to respond to your boss' request that you write up your assessment of the firm's financial condition. Specifically, write up a brief narrative that responds to the following questions a. How much cash does Patterson have on hand relative to its total assets? b. What proportion of Patterson's assets has the firm financed using short-term debt? Long-term debt? c. What percent of Patterson's revenues does the firm haveleft over after paying all of its expenses (including taxes)? d. Describe the relative importance of Patterson's major expense categories, including cost of goods sold, operating expenses, and interest expenses a. How much cash does Patterson have on hand relative to its total assets? The cash Patterson has on hand relative to its total assets is 96, (Round to one decimal place.) b. What proportion of Patterson's assets has the firm financed using short-term debt? Long-term debt? The proportion of Patterson's assets that has been financed using short-term debt is %. (Round to one decimal place.) The proportion of Patterson's assets that has been financed using long-term debt is %. (Round to one decimal place.) c. What percent of Patterson's revenues does the firm have left over after paying all of its expenses (including taxes)? The percent of Patterson's revenues that remained after paying all of its expenses is %. (Round to one decimal place.) d. Descnbe the relative importance of Patterson's major expense categories, including cost of goods sold, operating expenses, and interest expenses. The cost of goods sold represents % of Patterson's sales. (Round to one decimal place.) The operating expenses represent % of Patterson's sales. (Round to one decimal place.) The interest expense represents % of Patterson's sales (Round to one decimal place.) on-Size Balance Sheet Cash and marketable securities Accounts receivable Inventory Comm 2016 1.4 % 18.0 28.9 48.4 % 51.6 5,950 9,540 15,950 17,030 32,980 7,220 6,760 13,980 6,990 20,970 12,010 32,980 Total current assets Net property, plant, and equipment Total assets 100.0 Accounts payable 21.9 % 20.5 42.4 % 21.2 63.6 % 36.4 Short-term notes Total current liabilities Long-term liabilities Total liabilities Total common shareholders' equity Total liabilities and shareholders' equity $ Common-Size Income Statement Revenues 100.0 2016 30,000 (20,020) 9,980 (7,980) 2,000 (850) 1,150 100.0% 66.7 33.3 % 26.6 Cost of goods sold Gross profit Operating expenses Net operating income Interest expense Earnings before taxes Income taxes 6.7 % 2.8 3.8 % Net income 732
