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Unformatted text preview: Financial Condition The BS shows the financial condition or financial position of a company on a particular date. Assets = Liabilities + Stockholders equity Consolidation When a parent company owns more than 50% of the voting stock of a subsidiary, the financial statements are combined for the companies even though they are separate legal entities. Common-Size Balance Sheet Common-size financial statements are a form of vertical ratio analysis that allows for better comparison of firms with different levels of sale or total assets by introducing a common denominator. In this statement , each item on the balance sheet is expressed as a percentage of total assets Assets Current Assets Current assets include cash of those assets expected to be converted into cash within one year or one operating cycle, whichever is longer. The operating cycle is the time required to purchase or manufacture inventory, sell the...
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- Spring '11
- Balance Sheet