The CDS COMPANY

Balance Sheet (Millions of $)

YEAR 2018 YEAR 2017 YEAR 2016

Current Assets

Cash and Cash Equivalents 4,875 4,986 5,012

Accounts Receivable (net) 12,239 11,073 6,400

Inventories 2,147 2086 2,036

Prepaid Expenses 600 380 300

Total Current Assets 19,861 18,525 13,748

Long-term Investments 1,874 650 0

Net property, plant and Equipment 15,000 14,000 14,000

Net Intangible Assets 8,000 8,800 9,600

Other Assets 1,234 0 0

Total Long-term Assets 26,108 23,450 23,600

Total Assets 45,969 41,975 37,348

Current Liabilities

Short-term Debt 2,011 3,025 4,045

Accounts Payable 1,083 1,013 1,908

Sales Taxes Payable 926 874 1,023

Income Taxes Payable 858 651 990

Accrued Wages Payable 346 357 42

Dividends Payable 154 104 324

Short-Term Notes Payable 2,120 3,000 1,200

Total Current Liabilities 7,498 9,204 9,532

Long-Term Liabilities

Long-Term Bonds Payable 8, 882 6,488 5,638

Mortgage Payable 2,300 1,300 4,300

Total Long-Term Liabilities 11,182 7,788 9,938

Total Liabilities 1,8680 16,992 19,470

Owners Equity

Owners Investment 19,665 19,665 13,665

Retained Earnings 7,624 5,318 3,213

Total Owners Equity 2,7289 24,983 17,878

Total Liabilities and Owners Equity 45,969 41,975 37,348

The CDS COMPANY

Income Statement

YEAR 2018 YEAR 2017 YEAR 2016

Sales 29,105 28,184 29,924

Cost of Goods Sold 18,867 17,277 17,094

Gross Profit on Sales 10,238 10,907 12,830

Selling, General and Administrative Expenses 2,666 2,986 2,808

Research and Development Expenses 1,802 1,986 2,000

Other Expenses 1,008 1,211 1,680

Income from Operations 4,762 4,724 6,342

Other Income and Expenses 598 1,100 1,200

Income Before Interest and Taxes 4,164 3,624 5,142

Interest Expenses 846 764 2,090

Income Before Taxes 3,318 2,860 3,052

Provision for Taxes 858 651 623

Net Income 2,460 2,209 2,429

The ABS COMPANY

Balance Sheet (Millions of $)

YEAR 2018 YEAR 2017 YEAR 2016

Current Assets

Cash and Cash Equivalents 3409 3,986 4,212

Accounts Receivable (net) 6087 4,073 4,219

Inventories (net) 2652 4,098 4,509

Prepaid Expenses 4065 3,246 2,622

Total Current Assets 16,213 15,403 15,562

Long-term Investments 2,763 2,650 2,802

Net property, plant and Equipment 17050 16,940 16,540

Net Intangible Assets 8,030 8,800 9,570

Other Assets 1,009 2,010 1,031

Total Long-term Assets 28,852 30,400 29,943

Total Assets 45,065 45,803 45,505

Current Liabilities

Short-term Debt 10,011 9020 6,890

Accounts Payable 6,086 4900 5,210

Sales Taxes Payable 1087 1200 980

Income Taxes Payable 1230 1320 1,020

Accrued Wages Payable 1492 1512 1,503

Dividends Payable 333 0 212

Total Current Liabilities 20,239 17,952 15,815

Long-Term Liabilities

Long-Term Bonds Payable 9, 482 10,488 10,200

Mortgage Payable 3,300 6,600 9,600

Total Long-Term Liabilities 12,782 17088 19,800

Total Liabilities 33,021 35040 35,615

Owners Equity

Owners Investment 8,605 8,605 8,605

Retained Earnings 3,439 2,158 1,285

Total Owners Equity 12,044 10,763 9, 890

Total Liabilities and Owners Equity 45,065 45,803 45,505

The ABS COMPANY

Income Statement

YEAR 2018 YEAR 2017 YEAR 2016

Sales 31098 32,184 28,940

Cost of Goods Sold 14,547 16092 15,786

Gross Profit on Sales 16,551 16092 13,154

Selling, General and Administrative Expenses 4,026 3,002 3,821

Research and Development Expenses 3,802 4,006 4,924

Other Expenses 654 1,211 692

Income from Operations 8,069 7,873 3,717

Other Income and Expenses 130 310 441

Income Before Interest and Taxes 7,839 7,563 3,276

Interest Expenses 2,357 1,961 1,987

Income Before Taxes 5,582 5,602 1,289

Provision for Taxes 1,230 1,320 348

Net Income 4,352 4,282 941

1. The CDS COMPANY

Balance Sheet (Common Size)

YEAR 2018 YEAR 2017 YEAR 2016

Current Assets

Cash and Cash Equivalents

Accounts Receivable (net)

Inventories

Prepaid Expenses

Total Current Assets

Long-term Investments

Net property, plant and Equipment

Net Intangible Assets

Other Assets

Total Long-term Assets

Total Assets

Current Liabilities

Short-term Debt

Accounts Payable

Sales Taxes Payable

Income Taxes Payable

Accrued Wages Payable

Dividends Payable

Short-Term Notes Payable

Total Current Liabilities

Long-Term Liabilities

Long-Term Bonds Payable

Mortgage Payable

Total Long-Term Liabilities

Total Liabilities

Owners Equity

Owners Investment

Retained Earnings

Total Owners Equity

Total Liabilities and Owners Equity

The CDS COMPANY

Income Statement (Common Size)

YEAR 2018 YEAR 2017 YEAR 2016

Sales

Cost of Goods Sold

Gross Profit on Sales

Selling, General and Administrative Expenses

Research and Development Expenses

Other Expenses

Income from Operations

Other Income and Expenses

Income Before Interest and Taxes

Interest Expenses

Income Before Taxes

Provision for Taxes

Net Income

The ABS COMPANY

Balance Sheet (Common Size)

YEAR 2018 YEAR 2017 YEAR 2016

Current Assets

Cash and Cash Equivalents

Accounts Receivable (net)

Inventories

Prepaid Expenses

Total Current Assets

Long-term Investments

Net property, plant and Equipment

Net Intangible Assets

Other Assets

Total Long-term Assets

Total Assets

Current Liabilities

Short-term Debt

Accounts Payable

Sales Taxes Payable

Income Taxes Payable

Accrued Wages Payable

Dividends Payable

Short-Term Notes Payable

Total Current Liabilities

Long-Term Liabilities

Long-Term Bonds Payable

Mortgage Payable

Total Long-Term Liabilities

Total Liabilities

Owners Equity

Owners Investment

Retained Earnings

Total Owners Equity

Total Liabilities and Owners Equity

The ABS COMPANY

Income Statement (Common Size)

YEAR 2018 YEAR 2017 YEAR 2016

Sales

Cost of Goods Sold

Gross Profit on Sales

Selling, General and Administrative Expenses

Research and Development Expenses

Other Expenses

Income from Operations

Other Income and Expenses

Income Before Interest and Taxes

Interest Expenses

Income Before Taxes

Provision for Taxes

Net Income

QUESTION

ABS Company and CDS Company are all household appliance companies. They have similar products and share the same market. Their balance sheets and income statements are listed below.

INSTRUCTION

1. Prepare the common size balance sheet and income statement for ABS and CDS company respectively.

2. Please figure out corresponding financial ratios for the two companies for the year 2017 and 2018 respectively.

3. What can you get from the common size balance sheets and the income statements of the two companies?

4. Please evaluate liquidity, solvency, profitability and assets utilization for the two companies respectively.

5. Please make DuPont Analysis for the two companies respectively. (Year 2017 and 2018).

6. Please describe the advantages and disadvantages of the financial position and operating results for the two companies respectively. If possible, show your opinions of the improvement of their assets structures and capital structures to help them get a better financial position.

7. According to materials you get, which company do you choose to invest in (or rather not choose any of them)? Please give your reasons.

The CDS COMPANY

Balance Sheet (Millions of $)

YEAR 2018 YEAR 2017 YEAR 2016

Current Assets

Cash and Cash Equivalents 4,875 4,986 5,012

Accounts Receivable (net) 12,239 11,073 6,400

Inventories 2,147 2086 2,036

Prepaid Expenses 600 380 300

Total Current Assets 19,861 18,525 13,748

Long-term Investments 1,874 650 0

Net property, plant and Equipment 15,000 14,000 14,000

Net Intangible Assets 8,000 8,800 9,600

Other Assets 1,234 0 0

Total Long-term Assets 26,108 23,450 23,600

Total Assets 45,969 41,975 37,348

Current Liabilities

Short-term Debt 2,011 3,025 4,045

Accounts Payable 1,083 1,013 1,908

Sales Taxes Payable 926 874 1,023

Income Taxes Payable 858 651 990

Accrued Wages Payable 346 357 42

Dividends Payable 154 104 324

Short-Term Notes Payable 2,120 3,000 1,200

Total Current Liabilities 7,498 9,204 9,532

Long-Term Liabilities

Long-Term Bonds Payable 8, 882 6,488 5,638

Mortgage Payable 2,300 1,300 4,300

Total Long-Term Liabilities 11,182 7,788 9,938

Total Liabilities 1,8680 16,992 19,470

Owners Equity

Owners Investment 19,665 19,665 13,665

Retained Earnings 7,624 5,318 3,213

Total Owners Equity 2,7289 24,983 17,878

Total Liabilities and Owners Equity 45,969 41,975 37,348

The CDS COMPANY

Income Statement

YEAR 2018 YEAR 2017 YEAR 2016

Sales 29,105 28,184 29,924

Cost of Goods Sold 18,867 17,277 17,094

Gross Profit on Sales 10,238 10,907 12,830

Selling, General and Administrative Expenses 2,666 2,986 2,808

Research and Development Expenses 1,802 1,986 2,000

Other Expenses 1,008 1,211 1,680

Income from Operations 4,762 4,724 6,342

Other Income and Expenses 598 1,100 1,200

Income Before Interest and Taxes 4,164 3,624 5,142

Interest Expenses 846 764 2,090

Income Before Taxes 3,318 2,860 3,052

Provision for Taxes 858 651 623

Net Income 2,460 2,209 2,429

The ABS COMPANY

Balance Sheet (Millions of $)

YEAR 2018 YEAR 2017 YEAR 2016

Current Assets

Cash and Cash Equivalents 3409 3,986 4,212

Accounts Receivable (net) 6087 4,073 4,219

Inventories (net) 2652 4,098 4,509

Prepaid Expenses 4065 3,246 2,622

Total Current Assets 16,213 15,403 15,562

Long-term Investments 2,763 2,650 2,802

Net property, plant and Equipment 17050 16,940 16,540

Net Intangible Assets 8,030 8,800 9,570

Other Assets 1,009 2,010 1,031

Total Long-term Assets 28,852 30,400 29,943

Total Assets 45,065 45,803 45,505

Current Liabilities

Short-term Debt 10,011 9020 6,890

Accounts Payable 6,086 4900 5,210

Sales Taxes Payable 1087 1200 980

Income Taxes Payable 1230 1320 1,020

Accrued Wages Payable 1492 1512 1,503

Dividends Payable 333 0 212

Total Current Liabilities 20,239 17,952 15,815

Long-Term Liabilities

Long-Term Bonds Payable 9, 482 10,488 10,200

Mortgage Payable 3,300 6,600 9,600

Total Long-Term Liabilities 12,782 17088 19,800

Total Liabilities 33,021 35040 35,615

Owners Equity

Owners Investment 8,605 8,605 8,605

Retained Earnings 3,439 2,158 1,285

Total Owners Equity 12,044 10,763 9, 890

Total Liabilities and Owners Equity 45,065 45,803 45,505

The ABS COMPANY

Income Statement

YEAR 2018 YEAR 2017 YEAR 2016

Sales 31098 32,184 28,940

Cost of Goods Sold 14,547 16092 15,786

Gross Profit on Sales 16,551 16092 13,154

Selling, General and Administrative Expenses 4,026 3,002 3,821

Research and Development Expenses 3,802 4,006 4,924

Other Expenses 654 1,211 692

Income from Operations 8,069 7,873 3,717

Other Income and Expenses 130 310 441

Income Before Interest and Taxes 7,839 7,563 3,276

Interest Expenses 2,357 1,961 1,987

Income Before Taxes 5,582 5,602 1,289

Provision for Taxes 1,230 1,320 348

Net Income 4,352 4,282 941

QUESTION ABS Company and CDS Company are all household appliance companies. They have similar products and share the same market. Their balance sheets and income statements are listed below. INSTRUCTION 1. Prepare the common size balance sheet and income statement for ABS and CDS company respectively. 2. Please figure out corresponding financial ratios for the two companies for the year 2017 and 2018 respectively. 3. What can you get from the common size balance sheets and the income statements of the two companies? 4. Please evaluate liquidity, solvency, profitability and assets utilization for the two companies respectively. s. Please make DuPont Analysis for the two companies respectively. (Year 2017 and 2018) 6 Please describe the advantages and disadvantages of the financial position and operating results for the two companies respectively. If possible, show your opinions of the improvement of their assets structures and capital structures to help them get a better financial position. 7. According to materials you get which company do you choose to invest in (or rather not choose any of them)? Please give your reasons. QUESTION ABS Company and CDS Company are all household appliance companies. They have similar products and share the same market. Their balance sheets and income statements are listed below. INSTRUCTION 1. Prepare the common size balance sheet and income statement for ABS and CDS company respectively. 2. Please figure out corresponding financial ratios for the two companies for the year 2017 and 2018 respectively. 3. What can you get from the common size balance sheets and the income statements of the two companies? 4. Please evaluate liquidity, solvency, profitability and assets utilization for the two companies respectively. s. Please make DuPont Analysis for the two companies respectively. (Year 2017 and 2018) 6 Please describe the advantages and disadvantages of the financial position and operating results for the two companies respectively. If possible, show your opinions of the improvement of their assets structures and capital structures to help them get a better financial position. 7. According to materials you get which company do you choose to invest in (or rather not choose any of them)? Please give your reasons