Reference no: EM13907303

1. The following calculations have been made for Coos Company:

Growth Rate
Net sales 10.5%
Total accounts receivable 21.3%
Allowance for doubtful accounts 2.6%

Current Year Prior Year
Allowance for doubtful accounts as a
percentage of total accounts receivable 3.8% 5.4%

Analyze the accounts receivable and allowance for doubtful accounts

2. Use the following common size balance sheet to answer the questions below:

a) Explain what has happened to current assets and long-term assets.

b) Explain the changes in the liabilities section of the balance sheet.

c) What has occurred to Retained Earnings at year-end? What is the company's financial position?

BALANCE SHEET

Current assets:	2011	2010
Cash	3%	5%
Accounts receivable	20	18
Inventory	35	30
Total current assets	58%	53%
Property, plant and equipment	30	40
Other assets	12	7
Total assets	100%	100%
Current liabilities:
Accounts payable	25%	20%
Short-term debt	38	33
Total current liabilities	63%	3%
Long-term debt	22	17
Total liabilities	85%	70%
Common stock and paid in capital	14	20
Retained earnings	1	10
Total stockholders' equity	15%	30%
Total liabilities and stockholders' equity	100%	100%