17 Jul Prepare vertical common-size income statements and balance sheets for both companies. Note: Use Total Sales? and Total Assets? as the denominators for income statement and balance
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in Business Finance - Accounting
Prepare vertical common-size income statements and balance sheets for both companies. Note: Use “Total Sales” and “Total Assets” as the denominators for income statement and balance sheet, respectively. Compute for 2018, 2017, and 2016.
Balance Sheet
| NOTE: 2015 BALANCE SHEET INFORMATION SHOULD BE USED ONLY FOR RATIOS | ||||
| Report Date | 2018 | 2017 | 2016 | 2015 |
| $ in Millions | ||||
| Current assets: | ||||
| Cash and cash equivalents | $1,778 | $3,595 | $2,538 | $2,216 |
| Receivables, net | $1,936 | $1,952 | $2,029 | $1,890 |
| Merchandise inventories | $13,925 | $12,748 | $12,549 | $11,809 |
| Other current assets | $890 | $638 | $608 | $569 |
| Total current assets | $18,529 | $18,933 | $17,724 | $16,484 |
| Net property and equipment | $22,375 | $22,075 | $21,914 | $22,191 |
| Goodwill | $2,252 | $2,275 | $2,093 | $2,102 |
| Other assets | $847 | $1,246 | $1,235 | $1,196 |
| Total assets | $44,003 | $44,529 | $42,966 | $41,973 |
| Current Liabilities: | ||||
| Short-term debt | $1,339 | $1,559 | $710 | $350 |
| Accounts payable | $7,755 | $7,244 | $7,000 | $6,565 |
| Accrued salaries and related expenses | $1,506 | $1,640 | $1,484 | $1,515 |
| Sales taxes payable | $656 | $520 | $508 | $476 |
| Deferred revenue | $1,782 | $1,805 | $1,669 | $1,566 |
| Income taxes payable | $11 | $54 | $25 | $34 |
| Current installments of long-term debt | $1,056 | $1,202 | $542 | $77 |
| Other accrued expenses | $2,611 | $2,170 | $2,195 | $1,941 |
| Total current liabilities | $16,716 | $16,194 | $14,133 | $12,524 |
| Long-term debt, excluding current installments | $26,807 | $24,267 | $22,349 | $20,789 |
| Deferred income taxes | $491 | $440 | $296 | $379 |
| Other long-term liabilities | $1,867 | $2,174 | $1,855 | $1,965 |
| Total liabilities | $45,881 | $43,075 | $38,633 | $35,657 |
| Common stock, par value $0.05; authorized: 10,000 shares; issued: 1,782 at February 3, 2019 and 1,780 shares at January 28, 2018; outstanding: 1,105 shares at February 3, 2019 and 1,158 shares at January 28, 2018 | $89 | $89 | $88 | $88 |
| Paid-in capital | $10,578 | $10,192 | $9,787 | $9,347 |
| Retained earnings | $46,423 | $39,935 | $35,519 | $30,973 |
| Accumulated other comprehensive loss | -$772 | -$566 | -$867 | -$898 |
| Treasury stock, at cost, 677 shares at February 3, 2019 and 622 shares at January 28, 2018 | -$58,196 | -$48,196 | -$40,194 | -$33,194 |
| Total stockholders’ (deficit) equity | -$1,878 | $1,454 | $4,333 | $6,316 |
| Total liabilities and stockholders’ equity | $44,003 | $44,529 | $42,966 | $41,973 |
| Additional Information | ||||
| * No allowance account is created for receivables, i.e. Net receivables is equal to gross receivables | ||||
| **Property and Equipment, at cost: | ||||
| Land | $8,363 | 8352 | $8,207 | 8,149 |
| Buildings | 18199 | $18,073 | $17,772 | 17,667 |
| Furniture, Fixtures and Equipment | 12460 | 11506 | 11,020 | 10,279 |
| Leasehold Improvements | 1705 | 1637 | 1,519 | 1,481 |
| Construction in Progress | 820 | 538 | 739 | 670 |
| Capital Leases | 1392 | 1308 | 1,169 | 1,020 |
| Less Accumulated Depreciation and Amortization | 20564 | 19339 | 18,512 | 17,075 |
| Net Property and Equipment | 22375 | 22075 | 21,914 | 22,191 |
Income Statement
| shares in Millions, $ in Millions | 2018 | 2017 | 2016 |
| Income Statement | |||
| Net Sales | $108,203 | $100,904 | $94,595 |
| Cost of sales | 71,043 | 66,548 | 62,282 |
| Gross profit | 37,160 | 34,356 | 32,313 |
| Operating expenses: | |||
| Selling, general and administrative | 19,513 | 17,864 | 17,132 |
| Depreciation and amortization | 1,870 | 1,811 | 1,754 |
| Impairment loss | 247 | 0 | 0 |
| Total operating expenses | 21,630 | 19,675 | 18,886 |
| Operating income | 15,530 | 14,681 | 13,427 |
| Interest and other (income) expense: | |||
| Interest and investment income | -93 | -74 | -36 |
| Interest expense | 1,051 | 1,057 | 972 |
| Other | 16 | 0 | 0 |
| Interest and other, net | 974 | 983 | 936 |
| Earnings before provision for income taxes | 14,556 | 13,698 | 12,491 |
| Provision for income taxes | 3,435 | 5,068 | 4,534 |
| Net earnings | $11,121 | $8,630 | $7,957 |
| Additional Information | |||
| Basic weighted average common shares | 1,137 | 1,178 | 1,229 |
| Cash dividend per share | 4.12 | 3.56 | 2.76 |
| Operating cash flow for the year | 13,038 | 12,031 | 9,783 |
,
Balance sheet
| NOTE: 2015 BALANCE SHEET INFORMATION SHOULD BE USED ONLY FOR RATIOS | ||||
| Report Date | 2018 | 2017 | 2016 | 2015 |
| $ in Thousands | ||||
| Cash & cash equivalents | $511,000 | $588,000 | $558,000 | $405,000 |
| Short-term investments | $218,000 | $102,000 | $100,000 | $307,000 |
| Merchandise inventory, net | $12,561,000 | $11,393,000 | $10,458,000 | $9,458,000 |
| Other current assets | $938,000 | $689,000 | $884,000 | $391,000 |
| Total current assets | $14,228,000 | $12,772,000 | $12,000,000 | $10,561,000 |
| Property, less accumulated depreciation | $18,432,000 | $19,721,000 | $19,949,000 | $19,577,000 |
| Long-term investments | $256,000 | $408,000 | $366,000 | $222,000 |
| Deferred income taxes – net | $294,000 | $168,000 | $222,000 | $241,000 |
| Goodwill | $303,000 | $1,307,000 | $1,082,000 | $0 |
| Other assets | $995,000 | $915,000 | $789,000 | $665,000 |
| Total assets | $34,508,000 | $35,291,000 | $34,408,000 | $31,266,000 |
| Liabilities | ||||
| Short-term borrowings | $722,000 | $1,137,000 | $510,000 | $43,000 |
| Current maturities of long-term debt | $1,110,000 | $294,000 | $795,000 | $1,061,000 |
| Accounts payable | $8,279,000 | $6,590,000 | $6,651,000 | $5,633,000 |
| Accrued compensation & employee benefits | $662,000 | $747,000 | $790,000 | $820,000 |
| Deferred revenue | $1,299,000 | $1,378,000 | $1,253,000 | $1,078,000 |
| Other current liabilities | $2,425,000 | $1,950,000 | $1,975,000 | $1,857,000 |
| Total current liabilities | $14,497,000 | $12,096,000 | $11,974,000 | $10,492,000 |
| Long-term debt, excluding current maturities | $14,391,000 | $15,564,000 | $14,394,000 | $11,545,000 |
| Deferred revenue – extended protection plans | $827,000 | $803,000 | $763,000 | $729,000 |
| Other liabilities | $1,149,000 | $955,000 | $843,000 | $846,000 |
| Total liabilities | $30,864,000 | $29,418,000 | $27,974,000 | $23,612,000 |
| Stockholders' Equity | ||||
| Common stock | $401,000 | $415,000 | $433,000 | $455,000 |
| Capital in excess of par value | $0 | $22,000 | $0 | $0 |
| Retained earnings | $3,452,000 | $5,425,000 | $6,241,000 | $7,593,000 |
| Accumulated other comprehensive income (loss) | -$209,000 | $11,000 | -$240,000 | -$394,000 |
| Total shareholders' equity | $3,644,000 | $5,873,000 | $6,434,000 | $7,654,000 |
| Total liabilities and stockholders’ equity | $34,508,000 | $35,291,000 | $34,408,000 | $31,266,000 |
| Additional Information | ||||
| **Property and Equipment, at cost: | ||||
| Land | $7,196,000 | $7,414,000 | $7,329,000 | $7,086,000 |
| Buildings & building improvements | $18,052,000 | $18,521,000 | $18,147,000 | $17,451,000 |
| Equipment | $10,090,000 | $10,475,000 | $10,978,000 | $10,863,000 |
| Construction in progress | $525,000 | $530,000 | $464,000 | $513,000 |
| Total cost | $35,863,000 | $36,940,000 | $36,918,000 | $35,913,000 |
| Less: accumulated depreciation | $17,431,000 | $17,219,000 | $16,969,000 | $16,336,000 |
Income Statement
| As Reported Annual Income Statement | |||
| Report Date | 2018 | 2017 | 2016 |
| Scale | Thousands | Thousands | Thousands |
| Net sales | $ 71,309,000 | $ 68,619,000 | $ 65,017,000 |
| Cost of sales | $ 48,401,000 | $ 45,210,000 | $ 42,553,000 |
| Gross margin | $ 22,908,000 | $ 23,409,000 | $ 22,464,000 |
| Selling, general & administrative expense | $ 17,413,000 | $ 15,376,000 | $ 15,129,000 |
| Depreciation & amortization | $ 1,477,000 | $ 1,447,000 | $ 1,489,000 |
| Operating income (loss) | $ 4,018,000 | $ 6,586,000 | $ 5,846,000 |
| Interest income (expense), net | $ (624,000) | $ (633,000) | $ (645,000) |
| Loss on extinguishment of debt | $ – 0 | $ (464,000) | $ – 0 |
| Pre-tax earnings (losses) | $ 3,394,000 | $ 5,489,000 | $ 5,201,000 |
| Income tax provision | $ 1,080,000 | $ 2,042,000 | $ 2,108,000 |
| Net earnings | $ 2,314,000 | $ 3,447,000 | $ 3,093,000 |
| Additional Information | |||
| Weighted average shares outstanding – basic | 811,000 | 839,000 | 880,000 |
| Cash dividends per share | 1.85 | 1.58 | 1.33 |
| Net cash flows from operating activities | $ 6,193,000 | $ 5,065,000 | $ 5,617,000 |
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