Module 2 Introducing Financial S a. Compare gross profit and net income as a percentage of sales for these differences in their respective business models explain the differences observed? b. Compare sales versus total assets. What do observed differences indicate about the relative capital C. Which company has the higher percentage of total liabilities to stockholders equity? What do these intensity of these two industries? ratios imply about the relative riskiness of these two companies? , 2, 3, 4, 5 E2-37. Applying Financial Statement Linkages to Understand Transactions Consider the effects of the independent transactions, a through h, on a company's balance sheet, income statement, and statement of cash flow. Complete the table below to explain the effects and financial omework statement linkages. Use "+" to indicate the account increases and " -" to indicate the account decreases, MBC Refer to Exhibit 2-10 as a guide for the linkages. f. g. h. C. d. e. a. b. Balance Sheet Cash . . . 111 Noncash assets . . .. 111111 Total liabilities . ... . Contributed capital. Retained earnings Other equity . . . . 11 111 Statement of Cash Flows Operating cash flow . . . . . . Investing cash flow. . . .. . 11 11 11 1HELL Financing cash flow . Income Statement Revenues . . . Expenses . . ... . . Net income . . . . . . . . Statement of Stockholders' Equity Contributed capital. . . 11 Retained earnings . . .. a. Wages are earned by employees but not yet paid. b. Inventory is purchased on credit. c. Inventory purchased in transaction b is sold on credit (and for more than its cost). d. Collected cash from transaction c. e. Equipment is acquired for cash. f. Paid cash for inventory purchased in transaction b. g. Paid cash toward a note payable that came due. h. Paid cash for interest on borrowings. ms LO1 P2-38. Constructing and Analyzing Balance Sheet Amounts from Incomplete Data y (MMM) Selected balance sheet amount mpany, a ma for three recent years follow. f consumer and business product Current Currer