Task: Following is a comparative balance sheet for WorldView International Corporation:
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WorldView International Corporation
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Balance Sheet
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December 31, 2008 and 2007
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2008
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2007
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Current assets
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Cash
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$ 10,000
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$ 5,000
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Short-term investment
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7,000
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10,000
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Accounts receivable, net
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30,000
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23,000
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Inventory
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37,000
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35,000
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Prepaid expenses
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4,000
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3,000
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Total current assets
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$ 88,000
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$76,000
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Property, plant, and equipment, net
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33,300
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35,000
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Other assets
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27,000
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22,500
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Total assets
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$148,300
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$133,500
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Current liabilities
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Short-term borrowings
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$ 28,400
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$ 13,900
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Accounts payable
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20,000
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22,500
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Total current liabilities
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$ 48,400
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$ 36,400
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Long-term debt
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37,500
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33,000
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Total liabilities
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$ 85,900
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$ 69,400
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Stockholder's equity
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Common stock, no par
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$ 20,000
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$ 20,000
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Retained earnings
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42,400
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44,100
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Total stockholders' equity
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$ 62,400
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$ 64,100
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Total liabilities and stockholders' equity
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$148,300
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$133,500
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Required:
a. Calculate and show the percentages that would appear in a horizontal analysis for this balance sheet.
b. Indicate any positive and negative developments from one year to the next.