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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