Answer – Balance Sheets of Different Companies

Here is the answer of Exercise – Balance Sheets of Different Companies.

Company A – Property Development

1. The most material item is land and buildings.
2. Most of inventories probably are development properties

Company B – Shipping

1. High machinery and equipment
2. Low in land and buildings.

Company C – Airline

1. Machinery and equipment is much higher than Company B.
2. High amount of borrowings

Company D – Bank

1. Huge investment securities in long-term assets
2. High goodwill indicates high business combination (typical activities in the bank industry)
3. Very high debt securities

Company E – Retail

1. Low AR and low AP – looks like a cash-based business
2. Low inventories – possibly high turnover of inventories

Company F – Port Services

1. 43% of PPE are Machinery and equipment
2. 36% of PPE are land and buildings

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